Are You Truly Diversified?
September 18th, 2014
Many consider the “first stock market,” to be established around the year 1530 in Belgium. There wasn’t any stock involved. It was actually a marketplace; a location where people gathered to transact goods, or do business.
By the 1600’s, the maritime countries began their long voyages to the East Indies. And in the most simplified terms, companies were created where investors contributed to these expensive and risky expeditions and shared in the profits, according to their contributions.
Then in 1790, with a desperate need to raise money to help fund the Revolutionary War bonds, Secretary of the Treasury, Alexander Hamilton fought for and, eventually, enabled anyone holding these government bonds to up-trade them for new stock. (NYSE-History)
Great fortunes were made on this deal. And according to many, the American stock exchange was born. Over time, public corporations also began raising money, by selling their own stock to the public, and as they say, the rest is history.
Though fortunes are still made in the stock market, it is NOT the ONLY way to WEALTH.
Diversifying investments within the stock market is not diversifying at all. You are putting all your eggs in one basket.
Real investment diversification is dividing your investments amongst asset classes like paper, precious metals, oil & gas, real estate, and insurance.
With the proper financial planning and diversification you can master your wealth and control your personal economy.
To learn more about how the Infinite Banking Concept works to maximize your cash flow visit Paradigm Life.net.
Final Summer Webinar: Family Banking
September 9th, 2014
Family banking done the right way is an enduring philosophy that will help perpetuate a family’s legacy. There are many dynamic strategies that can create, protect, and preserve your family’s generational wealth. Listen to this presentation by Paradigm Life Agent, Ryan Lee, to learn more.
Be sure to register for Infinite 101 to obtain additional resources and education.
Stay tuned for Paradigm Life’s Fall Webinar Series beginning Thursday, October 2nd, 2014.
The Diminishing Value of a Higher Education
September 5th, 2014
Once a graduate degree was considered one of the most prestigious and pursued degrees in the world, and most would agree that it still holds its place. Twenty or even ten years ago, having a graduate degree did allow an applicant to stand apart from the crowd. Now a graduate degree is almost as common as a bachelor’s degree, making it more akin to a minimum requirement.
If you are considering the pursuit of a graduate degree or if your children or grandchildren are considering the investment, there is hidden and potentially very high opportunity cost to doing so.
According to the National Center for Education Statistics (NCES), the average cost of graduate school tuition is between of $30,000-$40,000 per year. Figuring another $40,000 for boarding and books and an additional $20,000 for travel, living expenses and misc., the total 2-year expenditure costs can be around $200,000. Keep in mind these are averages, not a top tier program.
However these are just the hard costs. There are additional financial considerations to factor in. The largest is the loss of wages that are forfeited while earning a degree. At a hypothetical annual salary of $60,000, $120,000 in lost income has to be added to the previous tally of $200,000 bringing the grand total, for an average graduate degree to, $320,000.
But most students looking to embark on their graduate school journey don’t start with a cool $320,000 in cash. The student often has to rely on student loans to cover the cost. If the loan is paid back at an annual APR of 6% (money.cnn.com) over a 20 year period, the grand total for grad school climbs to over $550,000.
If the student is fortunate enough to receive help from a parent or a grandparent (or if you are the lucky one to foot their bill) $320, 000 would have to be removed from a savings or investment account. If that money could have remained invested at 6% over 20 years it could have grown to over $1,000,000 ($1,026,283 to be exact). That $1,000,000 is the real opportunity cost of a graduate degree.
If you are assisting a child or grandchild with tuition, you may wonder what impact this would have on your own personal retirement. Assuming the same ROI of 6%, the payment of $320,000 at age 65 would reduce available income by over $26,000 per year between the ages of 65 and 85.
If you or someone you know is planning on funding a higher education, knowing its true cost is the first step. Contact us at Paradigm Life to have an agent help teach you how to analyze all the inherent costs not just in higher education but all the major purchases and investments you make. Together, we can set up a plan to help reduce those costs thereby maximizing your benefits.