If you’re like most Americans, you’ve been indoctrinated to the benefits and the inevitability of investing on Wall Street. Whether stocks, bonds, mutual funds, or a similar product, you’ve been told that Wall Street is the definitive default place to park your money, that it will give you security and a solid return on investment.
It’s all hogwash, of course. Wall Street is full of high-risk, low-yield investments that sucker the investor into paying exorbitant investment fees, transaction charges, and withdrawal taxes. Plus, as history has repeatedly shown us, the traditional financial markets are an implosion just waiting to happen. Let’s explore the things you need to know to navigate this financial minefield, protect your assets, and avoid financial disaster:
Steps to Avoiding Financial Disaster
- Divest from Wall Street: No matter which combination of stocks and bonds you choose, no matter how slickly named your actively managed funds may be, you are putting yourself into a financial minefield with every dollar you put into a Wall Street investment. Thus, to lower your risk, your goal should be to lower the amount of money you’re placing into this financial quicksand in the first place.
- Abandon the compound interest hype: Most of us believe that compound interest is the underlying basis by which we build wealth over time. The notion that our interest will earn interest makes sense on paper, but it’s built on the unrealistic assumption that the market will move steadily upward. The reality is that when you lose 30% of your market value in a bear market, you need the financial markets to go back up in value by nearly 50% just to get back to where you were. A scenario like this, needless to say, wipes out the positive benefits of compound interest.
- Rein in your spending: No matter how much you’re making now, you will at some point see a drop-off in your income (unless you never retire). You need to prepare yourself for the day that you’ll be living on a fixed income by reining in your spending now. It’ll not only make the transition to retirement that much easier, but it’ll also help you to appreciate exactly how much you’re really spending. A failure to appreciate what it really costs to live is a surefire way to end up with a financial disaster on your hands.
- Invest in your own financial literacy: The fund managers on Wall Street aren’t interested in educating you on how to invest; they’re interested in selling you cleverly packaged investment products. To truly understand what you’re getting yourself into, you need to understand how Wall Street is set up and how it’s profiting off your ignorance and blind faith.
- Don’t believe high risk is the only path to big rewards: Wall Street has indoctrinated us into believing that we need to take on high risk to earn meaningful returns. But this is all part of the Wall Street indoctrination machine. There are far safer alternatives to building meaningful wealth, especially a whole life insurance policy that offers full liquidity and a steady return on investment in the form of a regular dividend check (not guaranteed but extremely likely). And best of all, the cash value of a whole life insurance policy can be accessed to fund other investments.
Wall Street has created a financial minefield littered with potentially disastrous outcomes. To avoid these financial disasters, the keys are to divest from traditional financial markets, stop believing the hype over compound interest, rein in your spending now, increase your own financial literacy, and seek alternative, more secure pathways to wealth-building.
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