From the category archives:

Foundational Articles

With Taxes Rising & the Value of the Dollar Falling, What Should You Be Doing?

February 9, 2010

When David Walker, Comptroller General of the United States Government Accountability Office (GAO), left office about two years ago, he stated he needed to retire so he could tell the American public the truth.

debttrap 300x299 With Taxes Rising & the Value of the Dollar Falling, What Should You Be Doing?The truth is we currently have national debt that exceeds $13 trillion, which represents a liability of $43,000 per American citizen.

It’s also estimated that this year’s deficit will equal 2009’s deficit and will likely add about $1.6 trillion to the debt.

Yet we continue to experience stagnant unemployment, shrinking tax revenue and a struggling economy for the foreseeable future.

Not only that, but the Trustees of Social Security estimate a current unfunded liability in excess of $100 trillion in 2009 dollars.

This means that the federal government has obligated itself to pay more than $100 trillion over and above any taxes it expects to receive.

In other words, that’s how much would have to be invested at U.S. Treasury rates to pay the future liability owed to Social Security recipients who have faithfully paid into the system during their careers.

Most people can’t even begin to comprehend what $100 trillion is. It’s “100” with 12 zeros to the right. Just $1 trillion would be $1 dollar bills lined up end-to-end from here to the moon and back—200 times!

Even though many believe that Social Security is our greatest entitlement problem, Medicare is six times larger in terms of unfunded obligations, according to David Walker of the GAO.

It would require $700,000 from every full-time working individual in America in order to cover this huge liability. How is that going to happen?

On top of that, Congress estimates that if the proposed health care reform comes to fruition, it will be at an estimated cost of just under $2 trillion during the next ten years.

In the meantime, the interest alone on the national debt accrues at $41 million an hour (just under $1 billion a day)—that’s $690,000 per minute, or $11,500/second!

When individuals find themselves with more outgo than income, they are forced to either cut expenses or increase income. Well, the federal government is definitely not cutting its spending, so it is clear it will be forced to raise taxes dramatically and will likely be printing more money.

The Congressional Budget Office estimates that, by mid-century, a middle income family will have to pay two-thirds of its income in taxes!

I can confidently assure you that:

  1. Your current tax bracket will likely be the lowest bracket you will ever be in, and
  2. Your money will never be worth more than it is today.

So, what should you be doing?

Many smart people are now converting their IRAs and 401(k)s (and other qualified accounts) by doing what I call a “strategic rollout.”

This is a method of taking care of taxes now on those accounts at a lower rate and repositioning the money into vehicles that will accumulate tax free from this point forward and more importantly, will provide tax-free income later.

Why wait for your IRAs and 401(k)s to recover from their losses and then pay tax on that higher amount later? You can either pay the IRS now or you will pay them more later.

Now is the time to convert your IRAs and 401(k)s to better plans. There are safe and proven strategies that will help you get your future back!

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Should I Keep My Traditional IRA, or Convert to a Roth IRA?

February 2, 2010

When it comes to savings and retirement vehicles, the traditional rhetoric is that you should put your money into “qualified plans” like 401(k)s and IRAs.

brokenpiggybank 200x300 Should I Keep My Traditional IRA, or Convert to a Roth IRA?For years, Americans have been socking away their investment money in accounts like these, following the crowd, hoping it would ensure the nest egg they want for the future.

The recent economic downturn has all but thrown out the egg and the nest from many Americans’ 401(k) and IRA accounts. Some have lost thousands—others hundreds of thousands—from their traditional retirement accounts.

Missed Fortune Clients are Safe

There are other people, however, who haven’t lost a dime—in fact, they’ve increased their wealth over the past couple years.

What do they know that you don’t?

These people have followed proven but unconventional investment strategies like those described in the Missed Fortune book series.

They know that qualified plans are qualified by the government. And the government is expert at ensuring it gets its money one way or another.

With a 401(k), for example, your taxes may be deferred on the money you invest, but when you withdraw your money after age 59½, you will be hit with taxes.

Higher Tax Bracket During Retirement?

You may be surprised to find that most Americans are in as high—if not higher—of a tax bracket when they retire than they were before. Why?

  1. Many of them have paid off their homes, so they no longer benefit from the itemized deduction of mortgage interest.
  2. They also no longer have dependents living with them, so they lose that tax advantage, as well.
  3. And while they were able to postpone taxes during the contribution years, when they start to withdraw their money in retirement, most people find they end up paying back ten to twenty times the amount of taxes saved during their contribution years.

Taxing the Seed vs. the Harvest

If you were a farmer, which would you rather do: 1) save tax on the purchase of your seed in the spring, then pay tax on the sale of your harvest in the fall, or 2) pay tax on the price of the seed, then sell your harvest without any tax on the gain?

Most of us would rather purchase the seed with after-tax dollars and later sell the harvest tax-free. You can learn how to do this now.

Now would certainly be better than tomorrow, or next month, or next year. Your accounts (hopefully) will likely be worth more in the future. And your taxes (unfortunately) will likely be higher.

Wouldn’t you rather get your taxes over and done with now? Especially if your accounts have lost money in the economic downturn, then right now makes more sense than ever to ditch the 401(k) or IRA.

So is a Roth IRA a Good Idea?

What about Roth IRAs or Roth 401(k)s? Many people say these are better from a tax standpoint. Indeed, one of the touted advantages of Roth plans is that you use after-tax money when you contribute, with no taxes on the distribution and withdrawals.

Currently about 13 percent of all IRAs and 401(k)s are Roth, and Congress recognizes more and more people are becoming interested in them.

Why? More people are realizing they would rather get their taxes over and done with now, rather than later. So every so often, Congress makes it appealing for people to convert their traditional 401(k)s and IRAs to Roth accounts.

In 2010, for example, the government will allow you to convert your traditional accounts to Roth accounts and spread the taxes over two years.

This isn’t just generosity on the government’s part. It’s a chance for the government to generate revenue, because when you convert your traditional IRAs and 401(k)s, you pay taxes on that money you transfer.

Again, this is nice, but it’s not out of kindness. It’s just smart business on Uncle Sam’s part—he needs money, and he’s happy to take yours in the form of more taxes.

Safer, More Profitable Alternatives

There are better alternatives for your retirement savings that have all of the advantages that Roth IRAs and 401(k)s offer, but also a considerable amount more.

Consider strategically converting your traditional IRAs and 401(k)s to maximum-funded, tax-advantaged index insurance contracts rather than to Roth accounts. Using indexing strategies, you can protect yourself from losses and still participate in any upside potential during good years.

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Where Can I Put My Money Where I Won’t Lose, But Still Enjoy a Good Rate of Return?

January 28, 2010

Traditional financial planning usually offers investors two choices: 1) guarantees with little upside potential, or 2) upside potential with no guarantees.

profitgraph 300x299 Where Can I Put My Money Where I Wont Lose, But Still Enjoy a Good Rate of Return?I prefer to invest my money in safe investment vehicles that have guarantees and allow me to participate in any upside potential.

In a post 9/11 and financial-collapse world, it’s better to use a proven strategy than trying to time the market with investments.

The indexing strategy that I use for my own money works in all markets, it does not require market timing (buying and selling), and it allows me to sleep at night.

Product-Picking & Market-Timing are Horrible Strategies

Most advisors recommend you pick specific products to invest in. Product-picking focuses on the extremes of safety or return, leaves you constantly second-guessing, and it has now been proven not to work.

Therefore, it’s wiser to employ a sound and proven strategy rather than trying to just pick specific products to invest in.

For years I have been recommending that people place their serious cash (such as money earmarked for retirement or their home equity) and keep it in investments that are liquid, safe, and earn a tax-free rate of return.

Only ONE Cash Accumulation Vehicle Offers These 3 Benefits

I choose to put my serious cash in maximum-funded, tax-advantaged (MFTA) life insurance contracts because they are the only investment vehicles that, when properly structured and funded, allow an investor to:

  1. 1Accumulate money safely, tax-free
  2. Withdraw the money later tax-free
  3. Transfer money income-tax free at death.

This is allowed under Sections 72e, 7702 and 101 of the Internal Revenue Code as I teach in my books.

Indexing: Get the Gains with No Losses

For the last 12 years, I have used a strategy called “indexing.” With this, your principal is protected and you don’t lose when the market goes down.

When the market goes up, you are credited whatever the index of your choice earns (like the S&P 500 Index)—up to a cap—without your money actually at risk in the market. Based on what the S&P 500 actually did the last 25-30 years, an average annual crediting rate of 7-8 percent could have been realized.

Some investors who had $100,000 in the S&P 500 during the last 10 years saw their money grow, but then dissipate to $68,000 as of April of 2009.

Had they used indexing, they could have had an account value of $178,000.

With indexing, during a period wherein you experience a gain, that gain is locked in and the point at which you will be credited the growth for the next period is reset. This “lock-in and reset” strategy is what protects you from losses when the market goes down and also allows you to participate immediately in any upside potential when the market starts to head back up—substantially reducing risk.

Proper use of such indexing strategies can help you safely regain what you may have lost and protect yourself so that you never lose again.

Take Action Now

Right now we are seeing upward trends in the market, and a recovery of the financial system. Inventory depletion is also resulting in growth in the economy. But employment will continue to rise, housing prices will likely remain stable, and inflation is around the corner.

But I implore people not to wait for unemployment to rebound before taking action.

Using indexing strategies, many smart and safe savers may have experienced only a 1 percent gain on their money in 2008, but they have already experienced a 12-16 percent gain just last year.

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Would You Rather Have $1 Million, Or $72,000?

October 27, 2009

Recently, we discussed the concept that “time is money.”

We pointed out every 90 days that go by without implementing asset optimization strategies that leverage maximum-funded, tax-advantaged insurance contracts can result in a loss of $100,000 or more in future retirement resources (when tax savings are calculated into the equation).

compoundinterest 300x199 Would You Rather Have $1 Million, Or $72,000?Well, there’s even more to the issue of the time-value of money.

Consider this: A dollar doubling every period for 20 periods tax-free would amount to over $1 million by the end.

However, if it were taxed as earned (in a 25% marginal tax bracket, which most Americans are in) as it doubled over the same 20 periods, it would only be worth $72,000.

Why is that?

When it’s taxed as earned, you have to pay tax on the gain every period.

So at the beginning, your money doubles from $1 to $2. You pay tax on that gain. Then what’s left doubles again, and you pay taxes on that gain — and so on for 20 periods.

By the end, if you’re in a 25% marginal tax bracket (as most Americans are on their last dollars earned), instead of $1,048,000, you would have $72,000.

Now that’s if you’re in a 25% marginal tax bracket. If you live in 41 of the 50 U.S. states that have a state income tax, you’re more likely to be in a 32 to 33% tax bracket.

And if the government eventually increases taxes to cover the skyrocketing federal debt, some experts estimate you could end up in a 50 to 60 percent tax bracket.

It would be far better to accumulate your retirement savings on a tax-free basis. Even if you’ve already started saving in 401(k)s, IRAs or other qualified plans, you can start now to transition your money through strategic roll-outs and be on your way to accumulating your wealth tax-free.

It is indeed possible to optimize your assets in savings accumulation vehicles where your money: 1) accumulates tax-free; 2) can be withdrawn tax-free (even before age 59 ½ – without penalty); and 3) transfers to your heirs tax-free when you pass away.

Find out more and begin now to empower yourself, and your financial future.

Isn’t it time you became wealthy?

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Avoid a $100,000 Loss, Start Optimizing Assets Now!

August 12, 2009

FACT: Every 90 days that go by without implementing the Missed Fortune Asset Optimization Strategies can result in a loss of $100,000 or more in future retirement resources for the average client when tax savings are calculated into the equation.

Why is that?

If you’re feeling a bit skeptical, that’s understandable. The average client who comes to implement the Missed Fortune Asset Optimization, Equity Management, and Wealth Empowerment strategies is skeptical at first, too.

New clients wonder how we can dramatically increase their retirement resources by repositioning assets (often those that have not been optimized) without increasing their outlay one dime.

The fact is, we do it all the time. That’s our unique specialty.

After people see the difference between the “darkness of the night” of their current retirement strategies, versus the “brightness of the day” of the Missed Fortune strategies, they are convinced to get in motion and get it done now.

Since it takes about 90 days on average to complete the True Wealth Transformation unique process, every month-every quarter-that slips by can result in a tremendous loss to precious future retirement resources, due to the time-value of money.

To illustrate, a typical client has some money accumulated in IRAs or 401(k)s that is not being optimized, and most will lose one-third of that value (due to taxes) when they retire and begin to withdraw money.

Many clients also have other non-performing assets such as CDs, money market accounts, and mutual funds that either have low yields, or may be volatile and unpredictable in growth. These accounts are often taxed-as-earned or tax-deferred, rather than being totally tax-free investments.

The average client also has a home worth about $250,000 – $300,000 with at least some equity in that home. Most people are anxious to get their house paid off and be “out of debt,” so they send extra principal payments on their mortgage, or they obtain a 15-year mortgage.

We show them a smarter, quicker way to get out of debt with successful equity management.

As you can see, most people are crawling, walking, or at best, jogging toward the finish line of financial independence, when they could be sprinting with Missed Fortune strategies.

With most clients, we reposition assets (between lump sums and monthly reallocation) during the first five years of their plan, which comes to a total of about $300,000 on average (some clients are substantially more, and some are less).

Over a 30-year period of a client’s life-for example, from age 35 to 65, age 45 to age 75, or age 55 to age 85-$300,000 has the potential of growing tax-free to a nest egg of about $4.4 million.

However, if clients delay starting their plan and that same money is put to work for only 357 months rather than 360 months, the account value at the same point in time down the road would be only about $4.3 million-a difference of $100,000!  No big deal you say?

Well, an extra $100,000 can generate $666 a month of tax-free income for the rest of your life-or into perpetuity. And that doesn’t take into account the savings of unnecessary income tax you could realize by employing the Missed Fortune strategies sooner than later.

The greatest question is why wait? If you had a serious disease and could be cured if you saw a specialist sooner than later, would you rearrange your schedule and take off work to get treated?

Many people have a financial illness that we cancure and it’s far better to tend to it sooner than later.

If someone offered you an extra $100,000 if you would take a day off your regular job to work on something else, would you jump at the chance? Missed Fortune is giving you that chance.

Make getting started on your Missed Fortune True Wealth Asset Optimization plan an A-1 priority! It can pay you back with huge dividends in the future!

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I Don’t Own an IRA or 401(k)–Never Have, Never Will!

August 5, 2009

There Are Better Ways to Save and Have Tax-free Income in Retirement

If you’re like many Americans, you may have seen 30, 40 or 50 percent losses on the value of your 401(k)s or IRAs in the last few years. But I predict the worst hit is yet to come-and it’s not what you think.

As it is, recovering from losses can be tough. For example, when an account loses 50 percent of its value, the account has to experience a 100 percent gain just to get back to the break even point. Say you had $100,000 in a 401(k) two years ago that is now worth $50,000. Your account would need to double to get back to its original value. In this volatile economy, that could take years.

Also, retirement accounts that were once worth twice as much and generated interest income of 7, 8 or 9 percent, are now worth half as much and are only generating 2, 3 or 4 percent.

But that’s not all to be worried about.

Despite all the recent losses, I predict it will pale in comparison to the tax hit retirees will experience the day they begin withdrawing their money from their qualified retirement plans.

I had a school teacher who came to me several years ago for financial planning.  She knew she would only be receiving 60 percent of the income she had when she was teaching (2 percent for every year of 30 years of service). Thus, she had socked away money faithfully in the state’s 401(k), 403(b), and in tax sheltered annuities (TSAs) to supplement her retirement.

But when she retired, she found herself in the highest tax bracket she had ever been in, even though she was not working. Why? Her house was paid off; she was not contributing to these accounts anymore; and she had no dependents. Her tax deductions were all gone.  On top of her pension and social security, at age 70½ she was forced to withdraw the minimum distribution from her tax-deferred accounts. Her taxable income was $80,000 a year, with hardly any deductions.  All that money she had saved in taxes during her 30 years of contributions-she essentially paid it back to Uncle Sam during the first two years of retirement, and every two years thereafter!

You see, the government has a permanent tax lien on your IRAs and 401(k)s.

One thing is certain:  Future taxes will be going up. For this reason, I don’t own an IRA or 401(k)-never have, never will!  There are better ways to save and have tax-free income in retirement.

There is only one savings accumulation vehicle that provides liquidity, safety, and earns an attractive rate of return that is tax advantaged while your money accumulates, and can remain tax-free when you withdraw it, and is income tax free when transferred to your spouse or heirs.

What is it?-A properly-structured, maximum-funded insurance contract under Internal Revenue Code guidelines.

I own several wherein my money grows tax-free, I can access it tax-free for income, and when I ultimately die, any money remaining will transfer income-tax free to my beneficiaries. I have every advantage that a Roth IRA or Roth 401(k) offers plus a whole lot more because I can put in as much money as I want and there are no rules on when I can withdraw my money.

If you’re feeling confused and powerless because your IRAs or 401(k)s lost 20-50 percent during the last couple of years, leaving you frustrated-even feeling paralyzed-there are safe strategies and solutions that will help you get unstuck and get your future back!

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How Older Parents Can Assure Their Children a Secure Retirement

June 11, 2009

As an older parent (I’m now age 57), I’m grateful that my children still listen to their dad’s advice.

universal life insurance How Older Parents Can Assure Their Children a Secure Retirement I’ve always counseled my children to prepare for the future financially by maximum-funding a tax-advantaged life insurance contract on themselves.

It’s the only investment vehicle that accumulates money tax-free,  then allows you to access your money tax-free, and when you ultimately die, it even blossoms in value and transfers income-tax free.

No other investment does that. I own several universal life insurance contracts (both indexed and fixed), and I have received an average internal rate of return of 7-8 percent on most (that’s cash on cash -after the cost of the insurance is deducted).

Sure, some years I have only been credited the minimum guaranteed interest rate of 1, 2, 3 or 4 percent. But other years, I have earned as much as 21 percent, as the interest rate credited was linked to whatever the S&P 500 did that year — without my money at risk in the market.

Recently I’ve begun to teach my children they can take this strategy a step farther — and I can help.

Let me tell you of the advice that I’m now giving my children.

“Kids, what if I could tell you which two teams would be playing in the Super Bowl next year, and what the final score will be? While I can’t predict that, I can predict something else with fairly good accuracy: 80% of  us will live to age 65; 60% to age 75; but only 30% to age 85; and less than 10% of us will live beyond age 90.”

Average life expectancy for a 60-yr old is about 22 years.

In facing the reality of the years I have left, I’ve come upon a revolutionary way to help my children assure their own financial security — especially down the road when I “check out.”

In doing the math, it became obvious that if my middle-age children were the owners and beneficiaries of a life insurance policy on my life for, let’s say $1 million, it would be better for them to deposit premiums of $500 a month into that policy, rather than into a Roth IRA or 401(k).

Why? Because an IRA or 401(k) would need to earn an average yearly rate of return of 9.4% for 30 years for $500 invested per month to grow to $1 million.

But, if I “go” anytime in the next 30 years or so, by using a life insurance policy, they would immediately receive a nice $1 million tax-free nest egg!

Hence, I’m insisting each of my children own a life insurance policy on my life as part of their overall retirement planning process.

The miracle of compound interest and tax-favored accumulation of money is great. But nothing beats the power of safe, positive leverage. I’m thrilled I can leverage my life to leave a legacy for my kids. You might consider the same.

Doug Andrew

photo by Leonid Mamchenkov

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Some People Did Not Suffer Any Losses the Last 2 Years! Why?

June 5, 2009

Last week, I published an article explaining why IRAs and 401(k)s are proving not to be best for a secure retirement, with many people seeing up to 50 percent in losses on their accounts the last few years.

Recovering from losses can be tough when money is left in the market. Realize that when an account loses 50 percent of its value, the account has to experience a 100 percent gain just to get back to the break-even point.  That could take years in this volatile economy.

This last April I took the opportunity to get in some spring skiing. Nearly everyone I sat with on the chair lift that day was from out of state, and while getting acquainted, most asked me what I did.

After telling them I was an author and financial strategist, they would say, “Oh, I’ll bet you’re having a tough go of it this year!” They were shocked when I said, “Actually, we’re having a great year, primarily because the people who followed the strategies that I explain in my books and on my radio show did not lose any money during the last two years!”

This is in contrast to people we’ve all heard about who have lost thousands, hundreds of thousands-even millions of dollars-in their traditional investments.

As an author, speaker and radio show host, I visit about 48 major cities each year. I have been overwhelmed by numerous people who have expressed gratitude for the advice they followed that protected them from suffering losses on their assets last year.

For years I have been recommending that people place their serious cash (such as money earmarked for retirement or their home equity) and keep it in investments that are liquid, safe, and earn a tax-free rate of return.

I choose to put my serious cash in maximum-funded, tax-advantaged (MFTA) life insurance contracts because they are the only investments that, when properly structured and funded, allow an investor to: 1) accumulate money safely, tax-free, 2) withdraw the money later tax-free, and 3) transfer money tax-free at death.

For the last 12 years, I have used a strategy called “indexing.” With this, your principal is protected and you don’t lose when the market goes down.

When the market goes up, you are credited whatever the index of your choice earns (like the S&P 500 Index)-up to a cap-without your money actually at risk in the market (averaging 7 – 8 percent).

Some investors who had $100,000 in the S&P 500 during the last 10 years saw their money grow, but then dissipate to $68,000. Had they used indexing, they could have had a current account value of $178,000.

Proper use of such indexing strategies can help you get your future back!

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IRAs and 401(k)s Proving Not to Be Best for Secure Retirement

May 28, 2009

If you’re like many Americans, you may have seen 30, 40 or 50 percent losses on the value of your 401(k)s or IRAs in the last few years. But I predict the worst hit is yet to come-and it’s not what you think.

stock market down 300x113 IRAs and 401(k)s Proving Not to Be Best for Secure RetirementAs it is, recovering from losses can be tough. For example, when an account loses 50 percent of its value, the account has to experience a 100 percent gain just to get back to the break even point.

Say you had $100,000 in a 401(k) two years ago that is now worth $50,000. Your account would need to double to get back to its original value. In this volatile economy, that could take years.

Also, retirement accounts  that were once worth twice as much and generated interest income of 7, 8 or 9 percent, are now worth half as much and are only generating 2, 3 or 4 percent.

But that’s not all to be worried about.

Despite all the recent losses, I predict it will pale in comparison to the tax hit retirees will experience the day they begin withdrawing their money from their qualified retirement plans.

I had a school teacher who came to me several years ago for financial planning. She knew she would only be receiving 60 percent of the income she had when she was teaching (2 percent for every year of 30 years of service).

Thus, she had socked away money faithfully in the state’s 401(k), 403(b), and in tax sheltered annuities (TSAs) to supplement her retirement.

But when she retired, she found herself in the highest tax bracket she had ever been in, even though she was not working.

Why? Her house was paid off; she was not contributing to these accounts anymore; and she had no dependents. Her tax deductions were all gone.

On top of her pension and social security, at age 70½ she was forced to withdraw the minimum distribution from her tax-deferred accounts. Her taxable income was $80,000 a year, with hardly any deductions.

All that money she had saved in taxes during her 30 years of contributions-she essentially paid it back to Uncle Sam during the first two years of retirement, and every two years thereafter!

You see, the government has a permanent tax lien on your IRAs and 401(k)s.

One thing is certain: Future taxes will be going up. For this reason, I don’t own an IRA or 401(k)-never have, never will! There are better ways to save and have tax-free income in retirement.

If you’re feeling confused and powerless because your IRAs or 401(k)s lost 20-50 percent during the last couple of years, leaving you frustrated-even feeling paralyzed-there are safe strategies and solutions that will help you get unstuck and get your future back!

Doug Andrew

Photo by mujitra

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Economic Stimulus that Won’t Cost Tax Payers $3.6 Trillion–$36K Each

May 19, 2009

In my last blog article I talked about the magnitude of the national debt and the $100 trillion of unfunded liability the government has incurred with the Social Security system.

The government is short on meeting its current bills and will be significantly short on future promises. The USA is living beyond its means.

budget no money Economic Stimulus that Won’t Cost Tax Payers $3.6 Trillion $36K Each My opinion is that Congress is uselessly rearranging the deck chairs on a ship that is slowly sinking with too much debt.

Over the past several decades, the U.S. economy has become increasingly intertwined with the global economy.

From foreign investments in U.S. companies, to overseas outsourcing, to giant multinational corporations doing business around the globe, we are inextricably connected to the world market.

The current administration and Congress are making a futile attempt to regain choice and control over what has become a world economy, assuming their course of action will somehow mend the U.S. economy.

This approach will only lead our country to retrogress rather than progress. These are misguided efforts. The federal government is essentially investing in the wrong places with just more inefficient government programs.

We need to place choice and control in better hands-our hands.

If the $3.6 trillion this administration plans on spending to stimulate the economy were placed in the hands of the average American entrepreneur, I’m convinced the economy would be turned around within a year.

If the $3.6 trillion were credited to American tax payers in less withholding tax for several months, I’m sure people wouldn’t be investing the money in GM (Government Motors) stock!

My ideas for an Economic Stimulus Package that won’t cost tax payers $3.6 trillion would include:

  1. Educating people on how to raise their credit score by 30 points or more, which would put $700 a month back into the average American’s monthly income.
  2. Teaching people how to take ownership of their future rather than rely on the government to take care of them.
  3. Rewarding people for saving and investing rather than taxing them for doing so.
  4. Instituting a flat income tax of 15 – 20 percent for everyone, along with a national consumption tax.
  5. Privatizing Social Security.

Since there is little chance of government giving economic choice and control back to the people, what we can do is empower ourselves. Sound financial education is the key.

Doug Andrew

Photo Credit Jeff Keen

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