We’re talking rugged independence and personal sovereignty this week. And when we left off yesterday, we talked about what not to do if we want to maintain full control over our money and investments.
Today we’re going to talk about a better approach. And it starts with this – the entire idea of “retirement planning” is flawed.
As we discussed yesterday, the traditional retirement planning model is all about keeping us locked into investment accounts (401(k)s/IRAs) in which we provide all the money and take all the risks – yet we have no control.
Even worse, these accounts force a range of arbitrary requirements and restrictions upon us… and the rules could change at any time. We have no input whatsoever. Yet, we will be penalized if we do not comply with the rules as they are written.
Why would we agree to such a one-sided arrangement? And for that matter – what’s the goal here?
A basic rule of success in any endeavor is to figure out exactly what outcome you want before committing to any course of action. “Begin with the end in mind”, as famed author Stephen Covey put it.
It’s all about clarity of purpose. Once we have it, we simply need to do the things that will bring our desired end to fruition.
With that principle established I have to ask – what do most people who follow the traditional retirement planning model really want?
Some might say they want a “comfortable retirement”. But I don’t think that’s it.
I would submit to you that it’s really about financial security.
That’s why we save and invest a portion of our income. Because we want to be able to take care of ourselves and our families no matter what. We don’t want to be powerless if we were to face an emergency or lose our job.
If that’s the case, why would we lock our money away in retirement account jail where we can’t touch it?
I’m a strong advocate of not putting money in jail. I suggest that we put it to work for us instead. Here’s my approach to doing so…
For true financial security, we need to build a portfolio comprised of several distinct assets. They are:
- Cash (strategically warehoused so it earns a yield)
- Gold (in self-custody)
- Bitcoin (in self-custody)
- A tactical stock portfolio (outside of retirement accounts)
- Alternative investments (including the items we need for home resiliency).
Each asset class serves a different purpose for us. But collectively they mitigate the major risks we may face.
If we are strategic in building our asset portfolio, it will grow in value over time – regardless of what happens with the economy, inflation, interest rates, or the stock market.
And here’s the key – we always have access to our money with this approach.
For starters, we have a warehouse of cash always available to us should we need it. But this cash isn’t dead money. In today’s climate it should be earning between 4 and 5 percent for us.
Then if we have an emergency and need access to additional cash, we can convert our other assets back into dollars immediately. And we don’t need to take out any loans or pay any penalties to do so.
The only thing we don’t get with this approach is tax deferral. 401(k)s and IRAs allow investors to defer their capital gains taxes until they retire and start taking withdrawals.
But here’s the thing – there are other ways to create tax advantages for ourselves. And we can do so while also creating streams of monthly income. But that’s a topic for another today.
For a step-by-step guide to this approach to financial security – including exactly how to build out your asset portfolio – see our Finance for Freedom Masterclass right here: https://financeforfreedomcourse.com/mastermind
-Joe Withrow