The Perils of the 10-Page Financial Plan.

What are the perils of the 10-page (or more) financial plan?

• You get wiped out in recessions, and perform below the market in bull runs.
• You are not diversified or protected.
• Your income producing stocks could be losing money (due to high fees).
• You are probably performing below the market (due to high fees)
• You have more at risk than you realize.
• The higher the dividend, the higher the risk.

 
How? (The devil is in the details.)

• You get wiped out in recessions, and perform below the market in bull runs. Because you are not properly diversified or protected. Simple Modern Portfolio Theory with annual rebalancing would have kept your assets floating above the downturn and soaring to new heights in the bull run (instead of just crawling back to even).
• You are probably not diversified or protected. Because broker-salesman often get paid higher commissions on selling you into too much risk, not on aligning themselves with your best interests (even when they say they are). 
• Your “income producing” stocks could be losing money (due to high fees). Meaning that if you just had a few index-funds and paid the $9.99 trading fees charged by online discount brokers, you’d make more money. FYI: You’d still be on the Wall Street rollercoaster, losing half or more every eight years, if you were just riding the index fund up and down. But at least you’d perform better than the standard managed account. (Modern Portfolio Theory, annual rebalancing and a few other tricks that I teach at my retreats earned gains in the last two recessions and have outperformed the bull markets in between.)
• You are probably performing at or below the market (due to high fees). Be careful with broker-salesmen who claim that s/he performs XYZ percentage points higher than “the market.” Chances are this really isn’t true, particularly when you add in commissions and fees. Even when you simply compare the performance of the NASDAQ Composite Index compared to the Dow Jones Industrial Average, you can clearly see that few salesmen are performing at the speed of the NASDAQ.​

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Chart c/o Money.MSN.com. © Microsoft. Used with permission.

• You have more at risk than you realize. Warren Buffett says that stocks and bonds are too expensive. Alan Greenspan says that stocks and bonds are in a bubble. Nobel Prize winning economist Robert Shiller wrote in August of 2017 that the last time stocks were this expensive was in 1929 and in 2000. Most financial plans can only offer stocks and bonds. (Equities, mutual funds, index funds, REITS, fixed income products, etc. are stocks and bonds.) If both are in a bubble, your gains might be ready to pop and evanesce.
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  Performance of The Dow Jones Industrial Average
  During the Great Recession

Chart c/o Google Finance. © Google. Used with permission.

 
 
Performance of The NASDAQ Composite Index
During the Dot Com Recession

Chart c/o Google Finance. © Google. Used with permission.

Chart c/o Google Finance. © Google. Used with permission.

• The higher the dividend, the higher the risk.

Many investors are not aware that companies can report a net profit and income, and still owe many times the value of the company, or be drowning in pension and Other Post Employment Benefit (OPEB) obligations. Rather than understanding that a high dividend means the company might be a bigger risk than they realize, investors sing the praises of the gains without understanding the price they might pay for those small dividend checks. General Electric is the most recent example of a high-risk stock slashing its dividend in half, and seeing its share price sink by half. That’s a massive chunk out of their principal investment that most investors can’t afford. Similar share price implosions have happened to AIG, General Motors, the airline industry and many other publicly traded corporations.
 
What’s the solution?
Why not get an unbiased second opinion on your current budgeting and investing strategy, now while the markets are still high? (Call 310-430-2397 to learn more.)
 
My easy-as-a-pie-chart nest egg strategies earned gains in both of the last two recessions and have outperformed the bull markets in between.
 
"College students need this information before they get their first credit card. Young adults need it before they buy their first home. Empty nesters can use the information to downsize to a sustainable lifestyle, before they get into trouble." 
Joe Moglia, Chairman, TD AMERITRADE.

"Many people, including educated men and women, often get into trouble when they neglect to follow simple and fundamental rules of the type provided [by Natalie]. This is why I recommend them with enthusiasm." 
Professor Gary S. Becker. Dr. Becker won the 1992 Nobel Prize in economics for his theories on human capital
 
I’m not a broker-salesman. I don’t sell financial products. My goal is to empower Main Street, so that you can be the boss of your money. And I prefer to do this now, so that you can keep what you have before the next stock downturn. If you wait for the headlines that the economy is in trouble, it will be too late to protect yourself. Many times people come to me after they’ve lost half or more, which is better than not getting this information at all. However, clearly, I’d prefer to protect your retirement and teach you easy, smart systems that can earn gains in recessions and outperform the bull markets in between.  While we’re at it, I’ll also share wealth strategies of royals and billionaires, so that you can save thousands annually in your budget with smarter choices for your big-ticket budget items.
 
Blind faith in broker-salesmen, whose interests are not always in alignment with yours, has cost many Americans half of their nest egg every eight years. In 2000, Dot Com investors lost 78% of their stocks. In 2008, blue chip investors lost 55% (or more). When you add in the fees and commissions charged (sometimes hidden or opaque on your statements), the losses are even worse.
 
Wisdom is the cure.
 
Call 310-430-2397 or visit NataliePace.com to learn more. Attend the Florida Beachfront Space Coast Retreat to learn and implement the ABCs of Money that we all should have received in high school, while enjoying a fabulous vacation in the warm Atlantic Ocean. Register by April 18, 2018 and you’ll receive the best price and a complimentary private, prosperity coaching session (value $300). 
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