Douglas Andrew answers questions about financial matters.
Q: How do you define investments?
Douglas Andrew: Financial instruments are meant to help an individual or family better prepare for the future. There are many different types of financial products – everything from stocks and bonds to real estate and education. Some financial strategies bring an immediate return, while others provide returns over a longer period. And some provide big-interest returns (while they also often pose higher risks), while others provide smaller, but safer, more consistent returns.
Q: What are some of the primary risks involved with financial instruments?
Douglas Andrew: Most traditional investments such as stocks and 401(k)s and IRAs are subject to the volatility of the market, inflation, excessive taxation, and penalties for early withdrawal. However the best financial vehicles, in my opinion, typically pose very little risk. They have liquidity, consistent rates of return, and are inherently protected from shifts in an unstable stock market.
Q: Are there retirement vehicles that offer a safer path to an abundant future?
Douglas Andrew: The challenge with many traditional plans like 401(k)s and IRAs is they are heavily taxed. Think about it. The IRS is a government organization that was developed for one purpose only – to collect taxes. With taxes most likely escalating in the future, you’ll be paying more of your hard-earned money to Uncle Sam. There are retirement vehicles that are in compliance with IRS codes and offer significant tax advantages such as max-funded, tax-advantaged insurance contracts.
Q: What is the best way to protect personal assets from inflation, recession, and taxation?
Douglas Andrew: It is been said that an ounce of prevention is worth a pound of cure. This is true in all areas of life, and asset protection is no different. Individuals relying exclusively on tax-deferred financial products must learn to understand that not all strategies are equal. Just because the crowd thinks and acts a certain way doesn’t make it the best way.