The more they get involved, the more things seem to go wrong.

Our government and the leaders around the world have pushed regulations and social policies to the fringe and we are now facing the consequences. Their agenda of spending to satisfy their voters and to fulfill their vision for a government-controlled economy is proven to be an epic fail.

The markets are unstable, unemployment (including those on the social payroll who are not seeking work) is at all time highs and The Federal Reserve is hinting at negative interest rates.

…And they are not finished.

President Obama has one year left in office and he has more regulation coming, which could only add to the problems we are experiencing. Meanwhile, we have a presidential race for the White House going on and the candidates are touting more regulations and more social expansion.

It is truly unbelievable.

If the politicians in this next presidential term get what they want it will be like pouring gasoline on a fire. We could see more debt, higher taxes, a continuation of unstable markets and higher unemployment.

So, what are you suppose to do to protect yourself?

Focus On What You Have Control Over

Your behavior with money is really the only thing you have control over. So, concentrating on how you spend and store the money you have will help determine how much or how little control you will maintain in the future.

For instance, if you make a decision to invest into your company 401k, you receive a tax deduction today equal to the amount you invest that will defer the tax to a later date. In some cases you may even receive a matching contribution from your employer! All pluses if you have a tax situation needing attention in the current tax year. However, the trade off for the tax deduction today is relinquishing control of your money. When you participate in a 401k,

  • You have limited investment selection (Your are limited to what the employer offers.),
  • Expose yourself to market risk (This is true for any investment without protection features.),
  • Give up access to your money until 591/2 (Distributions are subject to an early withdrawal penalty of 10% on W/D prior to 591/2 and you have very limited access to the money while you remain employed even if you are ok with paying the penalty! It is only when you terminate employment that you can have access to your money without a hardship or by taking a loan.),
  • Defer the taxes owed to a later date at an unknown tax rate.
  • Are forced to take your money at age 70-1/2 whether you need it or not. (The IRS enforces a Required Minimum Distribution (RMD) in the year you turn 701/2)

It is all about maintaining as much control as possible given your situation.

Understand Your Cashflow

You earn, spend and store money. How that money flows in and out of your life is key to understanding the opportunity being captured or lost as money flows through your hands.

For instance, when you store money in a bank account, you earn little if no interest and what you do earn is taxed. Then when you use the money you have stored for a purchase, the money is gone forever. You missed out on potential earnings while the money is being stored and then you give up future earnings on the money you spent.

Evaluate How You Store Your Money

Banks are where many people traditionally store their money until they need it. Meanwhile, banks are most at risk of default if there is an economic downturn leaving us with liquidity risk when we need access to our money. (Don’t think it could happen? It happened in Greece.)

Banks are appropriate for regular transactions while insurance companies may be more suitable for storing money. It may be appropriate to keep some cash in a safe or other secure location in your home or business for quick and easy access in case there is an emergency.

Invest With Caution

Before making an investment decision, you should first consider how you plan to use the money you are investing. If you want to spend the assets you have in your investment account, you should consider programs that have principal protections. If you want your investment to produce income then consider programs that have income guarantees.

Remember that everything boils down to controlling the outcome. When you invest, you have no control over the outcome. The markets can go up and they can go down but it is not in your control. So, incorporating safeguards protecting the purpose you have for the money you are saving or investing helps put you in control.

Don’t hesitate to let us know how we can help. Everyone on our team is great listeners!


Certain statements contained within are forward‐looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Guarantees are based on the claims-paying ability of the issuer.