Would You Drive Your Car Using Only Your Review Mirror?

This is exactly what many of us try to do with our personal finances. Instead of looking to the future through a clear large windshield we view our future by focusing on the past, as if we are looking behind ourselves and trying to drive our financial future by looking through the rearview mirror of life. Let me explain what I mean by this analogy. What do you think most will do this month if the stock market corrects to a point of a crash? The stock market has been declining in the New Year at an accelerating rate. Are most going to sell their mutual funds, stocks and other equities that make up qualified retirement plans at work or brokerage firm accounts and move these assets to cash? Do you think most will be able to stomach the same losses that have already been experienced during the last market correction earlier this decade? Well if the answer is -- sell! I am too close to retirement to wait for the market to rebound and replace these losses, or I don't know what to do I keep getting different advice from CNBC, financial writers and other experts. This is exactly like trying to drive a car using only the rear view mirror - it can be done but it is very hard. What if there was a different way of having your savings kept safe from loss of principal and you only risked the yield or return on those funds? There is a way to drive toward your financial future looking through the front windshield.

Let's assume you were looking to buy a home last year and instead of purchasing the home in a traditional way you offered the seller an option to buy the home at a specific price a year later. For this option you pay him $3,000 from the interest earned on money you have earmarked for the down payment on this property. Now the seller may not like this offer but decides to accept the option because of the current lack of buyers. A year passes and you assess the real estate market and the current value of this home - now you are able to decide whether or not to exercise your option. If the market has improved by 10%, then you would buy the house at last year's price - with the 10% gain intact. If the market on the other hand lost value - maybe decreased by 20% -- then all you lost was the $3,000 you paid for the option. By using this option you have limited your risk and remained in control.

You can do the same thing with your long term savings accounts like retirement, college funding and other future needs. I have shown many clients the benefits of creating liquidity, safety and respectable rate of return on their retirement accounts by using their idle lazy home equity and other savings to propel the future retirement income. There is no reason why you can't use these safe albeit unconventional strategies to increase your control over your financial future. Stop driving to your financial destination using only your rearview mirror. Let me show you how to look through the windshield. Call me to schedule a presentation of these unique savings strategies and financial vehicles.