Straight To The Point:

Financial myths can get you in trouble if you let them lead you astray. Join us as we debunk some of these tall tales.

First Things First:

  • 1:15 – In The News: President Trump Tweets At Amazon.
  • 5:27 – Mailbag: Gretchen just lost her job and wants to know whether a Roth conversion would be a good idea given her circumstances.

The Real Deal:

Financial Myth #1: Don’t Touch The Principle. Live Off Of The Interest.

  • 8:58 – It’s important to note that living off of the interest would be fine if the interest was enough to sustain you. The trouble is, it’s usually not. Many times you’ve got to tap into the principle. This is why it’s important to supplement your investment with non-correlated income; income that’s not dependent on market activity.

Financial Myth #2: The More A Financial Plan Weighs, The More Valuable It Is.

  • 11:01 – Most of the time, hefty financial plans are filled with boiler plate garbage. That’s right, junk. The financial industry fills these plans with fluff to make them enticing. In reality, a financial plan is only as good as its worth to you. It doesn’t matter how large it is if the plan helps you to efficiently accomplish your goals.

Financial Myth #3: My Life Is Pretty Simple. All I Need Is A Will To Put My Affairs In Order.

  • 13:54 – A will could be all that you need, but if you have any level of wealth, you probably need at least a living trust. You should also leave specific instructions for your family to follow after you pass.  We often refer to this as a succession plan.

Financial Myth #4: My Spouse Is Going To Be Fine When I’m Gone. They’re Only Going To need Half As Much Income Anyway. 

  • 16:24 – Maybe this is true, but how is your spouse going to generate this income? This is a fast assumption to make. To return to our previous myth, you really need to lay the framework now to take care of your spouse when you’re gone.

Financial Myth #5: When I Retire I Need To Shift My Portfolio From Stocks To Bonds. 

  • 18:37 – This is one of the more popular financial myths. We’re at the end of a bond bull market. We’ve been in a decreasing interest rate environment for well over thirty years, and bonds have performed very well. However, we’re now entering a rising interest rate environment, and the bond market tends to cycle very slowly. A lot of folks would argue we’re entering a bear market for bonds. Look before you leap upon the bond bandwagon.

Beyond The Zone:

The host: Chris Patterson – EmailWebsite – Tax Free Retirement Toolkit – Call: 904-285-4489

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