Wealth Building Strategies - A Huge Sea of Systems and Sages
Wealth Building Strategies cover a wide spectrum of financial products, services, and advisors. With so many self-help systems, seminars, and sages, the mainstream investor is offered only one real measurement of comparative success - "return on investment." Of course, return on investment only represents the investment sideof the financial plan, usually delivered as an average annual percentage rate over the life of a long-term investment portfolio.
Wealth Building Strategies - A Failure to See the Whole Picture
The huge problem with most Wealth Building Strategies is that they point to long-term investment returns, but don't address the short-term effects of cost erosion on the expense side. Cost erosion is usually undetected and/or unreported by traditional investment advisors, since they are hired to deliver quality products that generate "agreed upon" investment returns. Generally, these financial strategists are paid a commission on the purchase and sale of such products, and, if perceived successful, the happy clients return again (sometimes bringing their friends).
Regardless of the perception of investment success, cost erosion has a dramatic impact on the true success of an overall financial plan. Therefore, truly successful financial strategist should know this, share this, and plan for this reality. Cost erosion elements on the expense sideof the financial plan include taxes, commissions, inflation, interest, fees, and other lost opportunity costs. Cost erosion can be immediate or deferred, direct or indirect, but it always affects the real return on your investments!
Wealth Building Strategies - Why the One-Sided Approach Just Won't Work
Instead of true Wealth Building Strategies, the traditional financial planner delivers traditional investment products that produce an "agreed upon" return on investment over an "agreed upon" time horizon (usually retirement). The simple truth is that these Wealth Building Strategies don't account for how the money system really works - on both the income and expense side. It's not enough to look ahead 30 years to retirement and create a portfolio of investments that will supposedly achieve your financial needs in those 30 years. Without accounting for the cost erosion elements over that same time period, this one-sided approach just won't work!