St. Augustine Woman's Journal - Educational Resource to the Women of St. Johns County Since 2009

Not Having a Plan B!

 

November 1, 2018 | View PDF

As we approach the 10th anniversary of the Financial Meltdown of 2008, we cannot help but realize that we might be in a similar juncture in the story of the US economy. It literally feels like déjà vu, as if it is picking up where it left off.

If history is any indication or guide, we are on track to experience another correction triggered by similar conditions and possibly resulting with a similar outcome.

In July 2007 Treasury Secretary Hank Paulson told Fortune Magazine "this is far and away the strongest global economy I've seen in my business lifetime". Yet a year later, we were in a global financial crisis that many consider the worst since the Great Depression. The immediate cause of the financial crisis now called The Great Recession, was the subprime mortgage collapse although all debt from credit card balances to auto financing and student loan amounts increased frantically to historic peaks.

But as Mark Twain is quoted, "We learn from history that we do not learn from history". Again, current Treasury Secretary Steve Mnuchin told Fox Business Network this past April, "I think the economy is doing fabulous... we're well on our way to sustained growth".1

Americans soon forgot the lessons learned and in 2017 household debt surpassed 2008 as it keeps surging upward for the last 16 quarters. Soaring household debt is a threat to banks, the markets, and consumers at large. It is a risk to the economy. Think about it – you may not have lost your home or your life savings during the financial crisis of a decade ago, however, you were still affected in a huge way by all those who did!

The events of 2008 clearly demonstrate that when U.S. consumers are over-leveraged and holding mounds of debt, the economic foundation of the entire country is at risk. This has been a lost decade of some crucial lessons. Unfortunately, the bank failures, market meltdowns, home foreclosures, and massive evaporation of personal wealth of a decade ago have failed to positively change our relationship with money. There are a lot more fluctuations including the Fed raising rates three times this year with a very likely fourth increase in December.

During these uncertain times, not having a Plan B can be devastating. These 5 Financial Strategies for a Successful Retirement can be guidelines of not experiencing the same devastating outcomes of the Great Recession in a person's life particularly on the horizon of retirement or already in retirement:

1. Creating an income plan for life what we call Mathematically Correct repositioning of portfolios to act as the cornerstone to address fluctuations, major corrections and ensuring lifestyle income while maintaining legacy provisions and making sure your money last at least as long as you do.

2. Taking control of your future IRA tax liability and putting the tax system to work for you.

3. Leveraging the tax code to maximize your children and grandchildren's inheritance by creating a tax free legacy for your heirs.

4. Properly titling your accounts and making sure your money goes to the ones you choose.

5. Protecting your retirement nest egg account from costly expenses

Information you might not be aware of because you don't know what you don't know... until someone points it out to you... can be detrimental to your financial wellbeing.

Investment Advisory Services offered through Sound Income Strategies, LLC, an SEC Registered Investment Advisory Firm. Shala Financial and Sound Income Strategies,LLC are not associated entities. Insurance and Annuities offered through SHALA FINANCIAL

1.https://www.foxbusiness.com/markets/treasurys-mnuchin-is-optimistic-about-improved-trade-tariffs-and-the-economy

 
 

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