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Guarding Your Wealth for Seniors
It’s YOUR Money: Make Sure You Keep Control Of It!
by Jeffrey D. Voudrie, CFP
Nov. 30, 2005 - One of the biggest mistakes I
frequently see investors make is needlessly losing control of their
money. Any time you pay a hefty commission or face surrender penalties
in order to get YOUR money you lose control. Losing control severely
limits access to YOUR money and limits your flexibility to make changes.
This can trap you in an under-performing investment adding years to the
time needed to reach your goals.
Whose money is it? Is it your broker’s, banker’s or
insurance agent’s? No, of course not. It’s YOUR money. Don’t believe the
lie that says you have to pay a big commission or face years of onerous
surrender charges to get an advisor’s help when you invest. It’s simply
not true. Can you imagine your doctor or dentist asking you to pay them
for 10 years worth of service up front? Then a professional advisor
shouldn’t ask you to, either.
Sharon is a real-life example. Sharon became a
widow a few years ago after her husband died of Lou Gehrig’s disease.
Her advisor put almost 90% of her money into variable annuities. Now her
money is locked up for 10 years! If she wants or needs more than a small
portion of that money she will have to pay a penalty that starts at 9%!
That’s tens of thousands of dollars in surrender penalties. Whose money
is it? It’s her money, but now she can’t get at it!
Think about all of the reasons Sharon may want or
need her money over the next 10 years. Her health could deteriorate and
she might need nursing home or home health care. Maybe she decides to
move to a different part of the country to be closer to her
grandchildren. Or she could decide that she wants to buy a second home
at her favorite vacation spot.
Her investment objective could change. Maybe she
doesn’t feel comfortable with her money fluctuating and wants to put her
money in a CD at the bank. Her income or her tax situation could change
so that she no longer needs that kind of investment. But it really
doesn’t matter, because now she can’t get more than a small portion of
her money for the next 10 years unless she pays thousands and thousands
of dollars in penalties!
Notice in all of these situations that Sharon is
the one who gets stuck paying the penalty. Not the broker or agent that
sold it to her and definitely not the insurance company. It makes you
wonder who benefits most from these transactions. It obviously isn’t
Sharon!
None of us knows what tomorrow holds. So it’s
important to maintain the flexibility to access YOUR money! Thousands
upon thousands of investors have seen the value of their investments
drop substantially and because they are in a similar situation to
Sharon, they have only limited flexibility to make adjustments to their
portfolio.
Brokers would have you believe that the whole
market is down and there isn’t anything you can do. That’s not true. For
instance, certain Real Estate Investment Trusts have provided an
attractive level of income without facing the wild fluctuations of the
stock market. Portions of the bond market have enjoyed double digit
gains in 2002.
Besides, there’s no need to pay a big commission or
have long surrender penalties. My clients don’t. They pay me a small
ongoing fee instead. They get professional advice and access to
investments they can’t otherwise get but they keep control. They can
access their money whenever they want without surrender penalties. We
can quickly adapt and adjust their portfolio based on market conditions
and changes in their situation.
Learn from Sharon’s mistake. Don’t let yourself be
talked into an investment with a hefty commission or a long period of
surrender penalties. Don’t put all of your eggs in just one kind of
investment basket regardless of how safe it is or how many features it
has. And seek the advice of an experienced, professional advisor who
gets paid by fees instead of commissions.
It’s YOUR money. Don’t let anyone talk you into
losing control of it.
If you have a specific question or would like more
information give me a call toll-free at 1-877-827-1463 or go to
www.guardingyourwealth.com. You can also reach me by email at
jeff@guardingyourwealth.com.
About Guarding Your Wealth:
“Guarding Your Wealth” is a
nationally syndicated weekly personal finance column written by Jeffrey
D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group,
a private wealth management firm that employs sophisticated proprietary
strategies designed to protect and grow its clients' investments. Please
visit his website,
www.guardingyourwealth.com to read past articles under the Guarding
Your Wealth Article Archive.
Guarding Your Wealth for Seniors are
a collection of columns by Voudrie that deal with issues of particular
interest to senior citizens. Click here
for all columns.
In addition to being a nationally
syndicated columnist and Certified Financial Planning Practitioner, Mr.
Voudrie provides personal, private money management services to clients
nationwide.
Looking for an energetic expert who
is passionate about financial and wealth management? Mr. Voudrie is an
excellent speaker who will excite and inspire your audience. Mr. Voudrie
is available for a limited number of speaking engagements, television
appearances and radio talk shows. For booking information, email e-mail
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