Five Points to Consider

1) Thoughts for better money management

  • Applied knowledge is a step in the right direction for financial success.
  • Cash flow is more important than assets.
  • There is more to be gained by avoiding losses than picking apparent winners.
  • People should have control of their money not financial institutions.
  • All your financial assets should be working for you.

2) Many Americans don’t realize that all capital purchases are financed. A capital purchase is considered an item that cannot be purchased through your monthly cash flow. If you pay cash, you self-finance and lose the ability to earn interest on the principal, and that money is lost forever. If you finance a purchase, you must make payments and pay interest. But you keep your cash on hand. The question is – what is the most efficient use of your money? Interest rates for borrowing are at an all-time low. This is a good time to review.

3) Are you in debt if you decide to finance a capital purchase? It depends on your financial situation. If you do not have enough money to pay cash sitting in a side-fund then you are a debtor. However, if you do have enough money in an accessible account and choose to finance then you have a financial obligation, because you can pay off the purchase by the stroke of a pen and cutting a check. This is an important distinction because many people get caught up in thinking that all purchases are debt-related.

4) Are you putting too much emphasis on chasing higher rates of return when building your financial future? Remember, “high rate of return” strategies also include higher risks. For many Americans, the biggest expense they will have in retirement will be taxes of all types. Someone will have to pay the current and proposed expenditures of the federal government. If you have money in an IRA, 401K or similar saving vehicles, you won’t know the extent of those taxes until you start drawing down your retirement funds. Planning now to reduce taxation later could be a very smart strategy for the future. Retirement is about cash flow and positive outcomes.

5) What’s not covered by Medicare and a Medicare supplement plan?

  • Long Term Care (LTC)
  • Vision
  • Dental
  • Hearing aids
  • Eyeglasses
  • Private-duty nursing
  • All services not covered by Medicare are also not covered by a Medicare Supplement

Recommendation: Secure an advisor, understand these concepts, and let him or her guide you to a worry free and successful retirement!