A couple of months ago I was at the Denver Zoo with my family. As we strolled from exhibit to exhibit my six-year-old son, Douglas, peppered me with questions about the animals and their unique attributes.
The dialogue went something like this:
Doug: “Why is the lion so big?”
Me: “Because he is the king of the jungle”
Doug: “Why is the giraffe’s neck so long?”
Me: “So he can reach leaves high up in the trees for dinner.”
On and on this went until we arrived at the ostrich exhibit where my son asked, “What do these birds do?” Without even thinking I blurted out, “Well Doug, ostriches stick their heads in the ground when they get nervous.” As soon as I said this, my wife started laughing and quickly informed me that this was not true, but actually a myth.
Once I stopped to consider it, I realized that she was probably right. Subconsciously, I had believed, and even allowed this myth about ostriches to grow in my mind for years. This small shift in understanding got me thinking about what we do here at Paradigm Life every day. We help people realize simple but very misunderstood facts about money.
You see, just because you have a trusted source suggesting certain strategies to you that will help you to create wealth doesn’t necessarily mean that they are the best approach. Sometimes we accept everything we hear and have a difficult time separating from the good and bad advice that we receive. In actuality, to most financially related strategies and questions the best answer is, “It depends on your situation.”
Are 401k’s, IRA’s and other tax qualified plans the best place to store your money? That depends. Each situation is different and needs to be evaluated individually. What is true about these plans is that they are often touted as providing “tax benefits” because of the ability to defer your taxes until you begin taking distributions.
Stay tuned for next week where we will go over these “tax benefits” and how they will affect your financial situation.
-Ryan Lee, Paradigm Life
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