Personal Financing for a Secure Future

In a recent government study that was done, it was found that fully 85% of people who had 401K tax differed savings plans have made no adjustments to their portfolio for the past five years. What makes that fact so astounding is that even as the stock market crashed, they still didn't make a move to change things.

Good Money Washed Right Down the Drain

In fact most of these people that fall into that 85% percent category sat like deer, frozen in cars headlights as their 401K plan lost sometimes up to 75% of its value. Money that they worked for and saved for their retirement simply washed right down the drain. Oh sure. The guys on the news tell you not to worry because it all will come back when the market picks up.

You Can Increase Your Value and Still Lose Retirement Money

Now what kind of investment logic is that? Wait ten more years to be back to square one? Even so, in ten more years the consumer price index will have once again doubled, so your money will have half its spending power. So then what is the answer? Before you answer that consider this.

Here Is Something to Think About

I recently stopped in to visit a friend of mine who's a production supervisor at a furniture manufacturing company in the next town over. During my visit in his office, which overlooks the main floor he walked me over to the window so we could see the thirty or so workers below, busy at their work stations.

People Managing Their Own Retirement Investments

He turned and asked me a funny question. "Would you let any of these guys manage your investment portfolio"? "Hell no"! He responded by telling me that they all manage their own portfolios and they all pretty much consistently lose money. They try their best but it's like the blind leading the blind.

Where Are You In the Wealth Building Food Chain?

If you're currently managing your own personal finances, chance are, almost without exception your portfolio has declined in value over the course of the past two years. Understand you see that in the "ocean" of investors, in order for there to be winners at the top, there must be losers at the bottom. It's just like a food chain where the smaller fish get eaten while the larger fish survive and grow fat.

Here Is Something Else To Ponder

Wealth cannot be simply created out of thin air because there is only a finite amount of it in any given system. You see, if you are in a room with five people and each of you has $20, there is no way you can leave that room with $100 unless the other four people have lost their $20. Try as you may to increase your wealth, it just isn't going to happen unless they lose theirs.

Positioning Yourself at the Top of the Pyramid

So while it may be important to make wise investments to see your personal wealth grow, it is even more important in the big picture to place yourself at the top of the investment food chain. That is to understand your investment territory, such that you are not working from the bottom up but rather you are seeing things from the top down perspective.