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Uncommon Financial Wisdom or just Wisdom Drowned out by Wall Street? June 2, 2014

Posted by shaferfinancial in Finance.
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When I started on my path away from mutual fund investing, I was surprised to find how easy it was to discover alternative strategies. Of course the trick is to figure out which ones work! But it was never hard to uncover the truth if you were able to put the research in. Since then I have had many clients who have come to understand investing in similar ways as I. But, the reality is that 95% of the folks are headed down the common path of mutual fund ownership that, in my opinion, is like being on the Titanic. They do this because Wall Street has created an eco-system that supports it at all levels. They have gotten the government to create an illusion of tax efficiency with 401Ks, IRAs, Roth’s, etc. And then gotten businesses to buy into using only mutual funds as a funding mechanism for these government created accounts. Initially, Wall Street was able to collect obscene fees, but now that Vanguard et al. have made a big point about fees, they have moderated some. Still lots of profits in the mutual fund business, especially with the government encouraging workers to buy into the Wall Street oriented strategy.

The financial planning industry grew up around the idea that common investors should diversify, do exactly what they are told to as far as purchasing mutual funds, and never should have issues like losing a job, health issues, or “god forbid” panic when the market turns ugly. All those concepts are, of course, just plain crazy if you know anything about how people live their lives and the psychology of individuals. But, amazingly so, the financial planning industry is still plying the same “snake oil” as has shown to be failed advice over the last 2 decades.

When I get asked by folks, Why don’t more people know about EIULs?, I am at a loss to explain all this above in a short manner. How can you say that Wall Street has created a system that benefits themselves and no one else, yet not come off as having sour grapes?

I have now been over 15 years off the grid of what Wall Street insists is the prudent course. My personal rate of return for my investments is off the charts compared to mutual fund returns during that time. I have been blogging about my moves since 2007, putting it out there for all to see. Also have been describing my intellectual growth on all matters financial. Here are some things that I have found out:
1. Putting your money into an EIUL will beat the pants off of putting your money into your companies 401K.
2. Real Estate investing done intelligently along with dividend growth stock investing over time will produce superior retirement income.
3. Using average intelligence one can beat the financial planners when it comes to producing retirement income.
4. It doesn’t take that long educating yourself to accomplish the above.
5. Uncommon financial wisdom is really traditional wisdom that has been drowned by the megaphones of Wall Street.
6. The real risk of investing in mutual funds inside your 401K is simply not be able to produce income for your retirement. It is not the risk of investing, just investing wrongly.

Good Luck with your investing and remember to call me when you are ready to throw off the blanket that Wall Street has thrown over us to keep us from investing wisely.

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