Is there an Ideal Investment?

Everywhere I turn, I meet people who ask me the age old question, ??????Where is the best place to put my money now??????? When I am asked this question I know right away that the one asking is in need of a better understanding of how money actually works. You see, creating, managing, and protecting wealth is a process or a way of life, not a product. We are spoiled and too accustomed to getting what we want nearly instantly. For example, if you are hungry you can have a pizza, sushi or a hundred other dishes ready for you to eat in a matter of minutes. If you need an oil change, you need only wait in a comfortable waiting room for 20-30 minutes while someone does the work for you. Creating wealth is not a function of just buying a product, such as the right stock at the right time and then within a short time you are rich and can retire. (Yes, there are reports of stories like that out there, but in reality, it just doesn????????t work that way.)

Let me say it again; achieving financial security is a process, not a product. J. Paul Getty published a book in the mid 1980s entitled ??????How to Be Rich.?????? Although Mr. Getty was a very wealthy man, he was a good thinker. Getty’s book is not the one-dimensional tract so commonly written by lesser intellects. He discusses what it means to be rich — the attitudes, the appreciation for the cultural heritage of classical music, literature and art (The Getty museum in California, based on his original collections, is one of the largest repositories of fine art in the world today). He discusses how an individual’s outlook and attitudes constitute a virtual program for either success or failure. Then he provides the intellectual tools for changing self-limiting habits and developing productive and beneficial ones. Are you willing to change your behaviors and attitudes?

Okay then, where and how does the process of building wealth start? The first thing to do is think! Yes think. You have to consider they way you think, because you can only change your behavior by changing your thinking. If you had the ability to create the perfect investment for yourself, what would that investment look like? May I propose 12 questions or characteristics of an ideal investment? Once I have proposed these questions are you willing to think about them and see how they compare to what you currently are doing? If these 12 questions cause you think differently about what you have are you willing to make a change?

??????Wait a second Dr. J, you just told us achieving financial security is a process, not a product. Why are you now talking about the ideal investment? Isn????????t that a product??????? Yes, it is a product, but in order to become wealthy, we need to think about where we are and how we perceive things. Once we identify the best possible investment, we are in a good position to start altering our behavior, i.e. putting in practice a process or being in a better position to have the right kinds of money.

Write down my 12 questions on consecutive lines on a paper. Now just answer the questions and write your answers (yes or no) to the right in a column. What you have created is the beginning of what I call the money matrix. Next, think of all the categories of money you can and put them as the title of columns to the right of your answers. Possible column headings would be: IRAs, 401Ks, Roth IRAs, defined benefit programs, SEPs, mutual funds, bank savings programs, CDs, stocks, your home, real estate, your business, possible inheritances and life insurance (You may want to separate this category into term, universal and whole life insurance). Can you think of others? Now ask the following questions of each of the money categories you have listed. As you do, you will discover the efficiency, effectiveness and safety of each of your categories.

The Questions

1) RISK: Do you want risk involved in your account? Is it okay if you lose the money?
2) GUARANTEES: Do you want guarantees offering controlled positive results every year and to protect your money?
3) PENALTIES: Are there fees and/or penalties for using or withdrawing your money before a certain date?
4) LIQUIDITY, USE AND CONTROL: If you need your money, can you get to it eas????ily and quickly and without penalties?
5) PROTECTION: Is your money protected from creditors and lawsuits? (This var????ies from state to state)
6) LEVERAGE: Does your account allow you to create the most wealth from the least amount of money?
7) TAX-ADVANTAGED: Does your money grow tax-advantaged?
8) TAX-FREE Is your money tax-free upon distribution?
9) TAX-DEDUCTIBLE PAYMENTS: When you put money in, are your payments tax deductible?
10) COLLATERAL: Can your money be used as collateral for a loan if necessary?
11) DISABILITY BENEFITS: If you become disabled does someone continue to put money in?
12) WEALTH TRANSFERS: Will your money transfer to your heirs tax free?

With your money matrix completed you are in a better position to start learning how each category can be utilized as part of a process for creating, managing and preserving wealth. You might second guess some of your past thinking, but that is ok. Better thinking leads to better results. Better information can lead to better thinking.

Everything you do and have in life are the results of your actions and depend upon how you have prepared. If you wanted to become a doctor, you wouldn????????t prepare for this career by studying all the art courses you could in college, unless of course you were interested in having the fanciest waiting room in the world. To be a doctor you would study all the appropriate courses and then enter into medical school.

Financial security is no different. You need to apply a thought process to where you want to be in your financial future. Heading into that future without a clue of how your money will support you, will expose you to many unintended consequences. Now is the time to understand how your money is currently working and discover all the opportunities that might be right in front of you. You might need to repurpose some of your money so you have the opportunity to put in play processes that will help you get to your desired destination. The defining moment in your life will occur when you are no longer ??????out of control?????? in your financial life. When this happens, you KNOW you are on the path to creating, managing and preserving wealth for yourself and your family.

I will be posting a series of articles comparing some of the most popular categories of money and compare them to what might be considered the ideal storehouse for your wealth.

Please comment on this article below or contact me at [email protected]


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