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Question Number One:

How many banks and financial institutions do you deal with every day? When you consider all your purchases, insurance carriers, and the assets you manage or have acquired? . . . five? . . . ten? . . . more?

Question Number Two:

Are any of those companies in business to help consumers (you) become wealthy? Likely not.  However, what do all of them hope, need, and want consumers to do with their money respective to their company? They may as well place a sign on every building and billboard. Every marketing campaign has identical intent. All of them should simply read, “GIVE US YOUR MONEY.”

Question Number Three:

How long would most companies like to keep your money? Truly! Advertisements disguise products as a path to provide consumers with access to irresistible benefits or entice them make a purchase which will help them immensely. Perhaps it would help to review the exact meaning in context within the economy we live.

  1. an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.

Did you catch that p-word? ‘profit’?

Modern consumers rely on businesses to provide them with means and tools to sustain activities, growth, well-being and independence each day.  Consumers pay organizations money – so they can go earn more money.

Modern companies make it easy! They call, ping, snail mail, cookie blast, network, advertise like crazy … all so consumers can do business the they need and some they never intended – without negotiation, discussion or analysis. Businesses develop new ways to offer services before consumers realize they were without them. They help us to measure our actual circumstances against imaginary deficits that, in turn, create profits for the company – if only every consumer would comply and buy! They offer ‘auto draft’,  provide comparative, emotionally charged, information and consumers believe they are being helped.

As consumers, we are trained to make financial decisions quickly, with the smallest amount of very convincing information, and in a micro-economic environment – when actually we live in a macroeconomic world. It’s not fair. Companies depend on consumers who are over-stressed, under informed, inexperienced, and quick to want the closest exit to the uncomfortable world of personal finance – because businesses know consumers don’t know what they don’t know.

As with everything, there are some businesses we simply must deal with. Most of us require a bank account, insurance of some sort, and a means to save for retirement. I would never suggest that ALL financial institutions are evil. In this day and age, doing business is necessary and we accept that there is a cost associated with doing business. What I would suggest is that some are better than others and that, as an industry, the terms are often nebulous, and costs can be excessive.

Find an advisor who can help you navigate the products and services financial institutions offer from an impartial perspective. If you don’t have one, the first rule to be on the lookout for is:

“Give us your money”

Measure all financial decisions you make against this rule. Does it fit? Think ‘auto-draft’, ‘free trial’, ‘cancel anytime’, ‘payroll deduction’, ‘electronic transfer’, ‘service fee’, ‘tax deferred’,  etc. If so, proceed with caution. There is more you need to know.

as consumers, we cannot avoid every transaction that resembles this characteristic. However, I suggest that consumers manage every occasion where a financial decision is necessary and attempt to view options from a macroeconomic perspective. In other words, what does that decision mean in real life? Now and later on? When combined with all the other financial decisions? Under the current tax laws? In my tax bracket? Are they coordinated?

Each financial decision WILL be effected by the choices made prior and will impact strategies implemented afterward. Learning to understand the duration, strength, coordination, tax implications, which party will gain benefits and which will be left accepting risk and lost opportunities is the information that you truly need in order to make the best decisions for you and your family.

Let me know if you need help.

Post Author: Beth Freudenburg

I am lucky! I have been given the chance to both do work that I truly love and engage in that work on behalf of families who inspire me every day!
My best days are spent helping families learn how their money works, how to grow it, how to protect it, and how to position themselves to spend and enjoy more of it so they are happier now. As a retirement income specialist I help clients secure a retirement income stream they can never outlive and that takes healthcare into account. Clients learn how to preserve their wealth for generations to come.