Idle dollars are unproductive dollars. Unproductive dollars result in catastrophic opportunity cost over a lifetime.
Many investors focus their investment strategies on Accumulation of capital and not on Utilization of capital. Accumulation means growth of capital, whereas Utilization means use of capital.
If your money is growing or accumulating, but you don't have access to it, are you maximizing its benefit to you? The simple answer is, no.
By focusing only on accumulation many investors are giving up what could be their greatest amount of return.
In order for an investment to provide both Accumulation and Utilization, it needs to have these 5 attributes:
Ease of Access & Liquidity
Safety of Principle
Competitive Rates of Return
Tax Advantages
Inflation Adjustment
Let's take a deeper look at each of this items and discuss how they will affect your investments.
Ease of Access & Liquidity: Liquid assets are assets that can easily be converted to cash at its value without facing penalties.
Safety of Principle: The old adage of "only invest what you can afford to lose" is not a true investment strategy. You need investments that will guarantee that your principle cannot be lost.
Competitive Rates of Return: As discussed in previous emails in this series, there is a big difference between an average rate of return and an actual rate of return. Market-based rates are volatile and therefore unpredictable. Some years have gains and other years have losses. It's important to have your money in a vehicle which not only provides guarantees but also Competitive Rates of Return. A Competitive Rate of Return creates a bench mark: Perhaps, one of the biggest downsides to low savings rates at the bank is that it forces us to look for better returns. By default, we are taught to think that one of the only alternatives is the market. With the market being volatile and unpredictable it has put many families in a tough position financially.
Tax Advantages: Pre-tax or tax-deferred does not necessarily equate to a tax advantage. What you are looking for is true tax savings, which more often than not, means investing your money post-tax so you can avoid postponed-tax on your gains when you withdraw.
Inflation Adjustment: It's estimated that the USA economic system has an average annual 3% inflation. In order for your investments to truly grow, they have to consistently grow at a rate that exceeds the annual inflation rate.
You are probably asking yourself, "Is there an investment that has all 5 of these attributes?" The answer is YES, there is!
The Perpetual Wealth Strategy teaches how and where to invest your money to ensure you meet all five criteria.
Through this strategy, you will learn how to structure a Wealth Maximization Account to get investment-like returns without taking on any investment risk, all the while you can still access the capital.
For our next email in this series, we will discuss The 3 Wealth Destroyers. Watch for that email in the coming days.
-The Paradigm Life Team.
for more information you can go to: https://paradigmlife.net