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Tax-deferred Accounts Are a Trap

Any retirement money manager does not want you to read this article because they want you to defer your taxes in qualified retirement plans such as IRAs and 401(k)s, thus trapping your money.  If your money is stuck in the 401(k) box, then you will never learn how to be a true investor who can make real money for retirement.
As your money remains trapped in the 401(k), you cannot use it to pay off debts, or invest in income-producing property, or many other better options.  The government’s argument is that you are a lousy investor and you need to leave your money with someone trained to invest it.  This is a lie.  Investment firms lobbied to pass the “prudent man rule” as hard as any effort in Washington.
QUESTION: If you cannot get at the only liquid money available to you because it is stuck in a 401(k) how will you ever have the control you need over our own money to truly prepare for retirement?
ANSWER:  You won’t.  You will not feel a need to study and learn how to invest your money, because in your mind, there is no need.
Can’t you learn to lose your money just a good as someone else can lose it?  I have learned that a smart person will not continually lose their own money!  As they invest and lose money, they will learn how not to lose it.  They will find a way to invest in something they know and love and do very well with.  In my experience, a 401(k) gives a false feeling a security that your money is safe.  It is not.  Most of the people managing the money in your 401(k) are new and learning on your account.  How does that make you feel?  The successful money managers I know manage only their own money.  This leaves all grow-their-moneythe new beginners to practice on your money!
Here is a story that might bring a new perspective.  A cat is walking across the kitchen counter.  The cat sits down to rest on what is a normally very cold stovetop.  The cat does not realize someone has left the burner turned up to “red-hot high.”  When the cat sits down he burns his butt so bad it takes the hair and skin off in an instant.  Of course the cat screeches and runs off. Will that cat ever sit on the stovetop again?  Of course not!  But now comes the teaching moment.  Are all stoves hot?  Of course not!  Does every person forget and leave their stove burner on high?  Of course not!  But you cannot tell this to the cat, for this cat has evidence of a burned, bleeding butt to show for it.  What the cat learned is wrong.  But the cat still has the burned butt to prove he should never come close to a stove again.
When a person has a bad experience investing their money, it is generally with borrowed funds. This is where the disaster comes into play when investing.  The funds are borrowed so you are not able to pay back the initial investment so there is no chance this investor will ever learn how to make money grow. They become the cat, always afraid of the hot stove. But when you learn to invest with your own money, money you can afford, of say only $600, then when you lose you will not automatically assume all investing opportunities are going to burn you. Perhaps you change a few things and shutterstock 2_160261025make back the $600 you lost and even begin earning double that a month for several years. Trying new things with money you can afford to lose helps you become an expert investor because you have the leeway that prevents you from making false assumptions about supposed security of investments (like a 401(k) that others are managing for you, or that all investments will burn you like when you take a loss with borrowed funds that you are not at liberty to try to make back).
Here is another example: Many people try their hand at real estate investing, only to lose money and then say, “real estate is a horrible place to invest money.” Of Course that person will never invest in real estate again, just like the cat sitting on the stove.  This investor has a burned butt to show for it.  But does everyone lose money investing in real estate?  Of course not!  We all live in a house, sleep in hotels, and eat out in restaurants, all of which are real estate owned by somebody.  The real estate market is one of the largest areas to invest in the entire world.  World wars have been fought, with millions of deaths, to secure real estate.  
The task is to find your niche, learn how to work it and reap the rewards…not just be simply content to dump money into a qualified plan like everyone else with no hope of controlling how much money it does or does not make. I contend that the 401(k), IRA and 403(b) all keep you from learning how to be good investors in your own right.
Stay tuned for better ways of investing money so it can turn around and make you more.

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