We have all had this experience. We are busy working. We get hungry. We know we shouldn’t, but we just can’t help ourselves. We drive to the nearest fast food joint and get a burger, fries and soft drink. Ah. We are temporarily satisfied. Yet, in the back of our mind, we know we didn’t do our bodies any long-term favors. We promise ourselves, “I’ll NEVER do it again!” but the memory of the cheese dripping off of that double bacon burger is just too much for us to resist.
And we do it again.
I doubt I will get much argument from any health care professional that fast food causes the following problems:
- It is void of the necessary vitamins and minerals the body needs.
- It causes cardiovascular problems.
- It leads to unwanted weight gain.
- It can cause intestinal issues with digestion and leaky gut.
- It can increase the risk of diabetes and other chronic illnesses.
Given all that we know, why is it that the fast food industry rakes in over $200 hundred billion dollars a year in the US alone?
The short answer? It is quick, convenient, easy to consume, satisfies a short-term hunger and there are no noticeable undesirable effects immediately observed on the body.
Okay. So what does that have to do with financial planning?
I see the same thing happening with private practice and business owners when it comes to following financial advice. I even it gave it a name: Fast Food Financial Advice.
Fast Food Financial Advice can be defined as advice sought out and taken by an individual that seemingly helps them solve a short-term financial problem but has destructive long-term effects on their overall financial condition leaving them in a worse condition then they started in.
This type of financial advice is generally given by a financial professional who may have a single product they want to sell or an agenda they want to push on the unassuming client. The trouble is that in the moment, it has characteristics of a solution to a problem. Not only does it seem to make sense, but a lot of other people have done it and it feels good to take action, and to the untrained eye—there are no noticeable adverse effects by following this type of advice.
Here are a few examples of Fast Food Financial Advice you may have been given:
- Accumulate $2,000,000-$3,000,000 in tax-deferred accounts for retirement.
- Invest your money in growth stock mutual funds at a low cost to keep up with inflation.
- Don’t get aggressive with tax deductions unless you want to risk an audit from the IRS.
- Investing in cash value insurance and annuities are a rip-off.
- Banks are the safest place to keep all your money.
You may be thinking how this can be considered Fast Food Financial Advice? It doesn’t seem like its incorrect advice? Caution! Remember: Fast food tastes good. It hits the spot. It may solve a short-term problem, but what I want you to look for is how it effects your financial condition long-term. Just because it solves an immediate problem, doesn’t mean there aren’t long-term negative consequences!
Allow me explain why this is Fast Food Financial Advice:
- Accumulate $2-3 million in tax-deferred accounts for retirement. That may be enough for a retiree used to living on a fixed income and a lower tax bracket. But that’s not you. You are a business owner! $2-3 million is not enough saved. Do you really think you will be in a lower tax bracket and why would you want to be? There is no way you justify pouring $2-3 million in accounts that may becomes a tax bomb for you. Think about it—with trillions in national debt, do you honestly think tax rates will be lower when you retire? C’mon—total Fast Food Financial Advice.
- Invest in Stock Mutual Funds. I am sure some folks have had success investing in the stock market over the last 10 years, but honestly, a monkey can make money in a bull market. Let me remind you, you are a Practice Owner. If you own a business with accompanying commercial real estate, why would you need to take the risk of the stock market? That’s short-term thinking. To be prudent, a business owner should think long-term and put themselves in control of their financial destiny rather than giving away control to stock and mutual fund managers.
- Don’t mess with the IRS. The majority of what you read in regards to taxes is designed to put you in fear so you do nothing. This is the intent of the tax code. Most business owners are giving away potentially $20-30k a year in legal deductions because they are either ignorant of the tax code or their accountants are too scared or lazy to implement them. Either way $20k a year compounded at 4% over 10 years comes out to almost $250k. Enough for a beach house. There are no laws which state you must maximum fund the IRS every year. Giving away that much money so your accountant can sleep at night is complete Fast Food Financial Advice.
- Insurance and Annuities are a rip-off. Cash value insurance and annuities have been around longer than the stock market. They provide stability and income for millions of people. Is it sometimes sold and positioned incorrectly? Of course. Does that mean EVERY single product is useless? Absolutely not! Some of the wealthiest people on the planet utilize these products because of the features offered. Blanket statements like “insurance and annuities are expensive and a rip-off” is usually spread by financial neophytes.
- Banks are the safest place to keep all your money. Banks are depository institutions. They lend money. Most banks are part of the worldwide banking system and are subject to systemic risk. That means that any financial contagion can quickly spread and affect all the institutions that are part of that system. Your money should not be static—it should be in motion. Banks do serve a purpose: they keep money liquid. But it never should be assumed that banks are the “safest” place to keep all of your money. The only reason banks appear safe is that they can be bailed out by central banks.
I want your financial condition to be healthy long-term and short-term. To accomplish that, we have to reverse engineer the existing Fast Food Financial Advice model in order to really see what correct actions will lead to financial improvement and identify what will lead to your financial demise. As a business owner, you deserve to follow a financial planning system that was built specifically for you—not the masses. The masses are broke, over-leveraged, and oblivious to how sick they are going to be long-term from a financial perspective.
We can restore your financial health quickly!
It all starts by quitting your addiction to Fast Food Financial Advice! We have already designed a Results-Based Financial Planning® system for a practice owner household and we have used this system to help guide hundreds of families, like yours, in achieving their financial goals.
3 Easy Steps to Start Your Journey:
Step 1: Assess your current financial condition. Take the Financial Prosperity Index® assessment (with your spouse if applicable). Let’s learn your financial score in 9 areas of your financial life as a practice owner.
Step 2: Meet with a Specialist. Let’s examine what is holding you back from reaching your business and personal financial goals. Schedule a 15-minute meeting to start the conversation or go all-in and schedule a complimentary one-hour Financial Strategy Session to discuss your personal situation and what may be standing in your way of achieving your goals.
Step 3: Get a Plan and get Educated. We do all the heavy-lifting to get you started moving in a better financial direction. Getting control of your finances starts with getting a customized Road Map and working with a trained advisor who can guide you on a clear path to financial freedom. Take action now! You deserve the financial success you have worked so hard to achieve. Let us help you!
Advisory Services offered through Econologics Financial Advisors, LLC., A Federally Registered Investment Advisor.