Dear Reader,

Stop focusing on asset accumulation. Instead, we need to center our focus on income accumulation.

The retirement cartel, which is basically Wall Street and all its talking heads, has conditioned the public into focusing on asset accumulation. Just keep buying and holding… while they collect their fees.

I have no problem with retirement, but the current idea of what retirement is is a really big scam, in my opinion. Tens of millions of people are all throwing money at the stock market with these inaccurate beliefs that they are somehow going to see an average of a 10% return if they just hold on. Then, at the magical age of 65, they can start withdrawing, drawing down on a large nest egg until they are dead or broke.

The 10% average return is a brochure for fools, and the Wall Street propaganda machine has trained the 401(k)ers and mutual fund buyers to be true believers.

Here’s the problem with “average” returns.

Let’s assume you put in $20,000 and you receive the following end-of-year returns.

Year 1, 58% = $31,620
Year 2, -37% = $20,000
Year 3, 54% = $30,701
Year 4, -35% = $20,000

The average return for this scenario is 10%, however, at the end of the day, your $20,000 is still just $20,000. You haven’t moved an inch, and you can honestly say — or your broker will — that you achieved an average return of 10%.

Of course, we all know that your $20,000 — especially left in a 401(k) or mutual fund — would be much lower now due to dozens of fees.

96% of people managing your money work on commission. Think about that; do you really think they are looking out for you? It’s why if you desire to have an expert help you, we only recommend a fiduciary advisor who is low fee-based and bound lawfully to put their clients first.

Outside of speculative growth stocks that do have a place in your wealth building strategy, a dividend cash flow-focused plan is where we believe 95% of your net worth should be active.

Real diversification in income is also important.

  • Dividends
  • Rental Income
  • Banking (Lending)
  • Whole Life
  • Royalty Streams
  • Real Estate Investment Trusts
  • Private Businesses

For the most part, the mutual fund industry exists to get Wall Street rich. It’s why the idea of retirement and buy and hold is so important, because without new money constantly flowing into Wall Street, they really can’t make money.
This topic inevitably leads us to the 401(k), so below is an article I wrote 3 years ago about why I absolutely hate these retirement vehicles.
Why I HATE 401(k)s

To start off, I’ve never been a fan of the 401(k). The very description of why people use them has always baffled me. I mean it’s a real loser’s bet, if you think about it.

Defer taxes now and invest in a 401(k) so that when you retire, you can pull out your money in the lowest tax bracket. Think about that; even at age 15, I knew I didn’t ever want to be in the lowest tax bracket, because that would mean I’m in the poorest tax bracket.

So by design, the 401(k)’s goal is to assist you as a poor old person – wealthy people need not apply.

I also don’t like to defer my investments and trap them like rats. If it’s still my money, then why do I have to pay a penalty to withdraw it?

If the 401(k) was more than just a tool for Wall Street to rake in the profits through fees and regular dumb money that is buying on the 1st and the 15th, then it would apply to all investments.

What about other investments, like your own business? Why isn’t that money tax-deferred?

Think about all the savings that have gone to 401(k)s since the early 1980s. Where would they have gone instead if the government wasn’t manipulating the population into investing in a 401(k)?

Perhaps they would have gone into investments that helped increase someone’s income today, instead of in 30 or 40 years from now, helping them to survive the expected income category that puts them in the poorest tax bracket.

60 Minutes did a special report on retirement accounts and uncovered all of the hidden fees – fees that add up to 50% of your savings over the course of 3 decades!

I think saving and investing is a great idea, but I hate that retirement planners and government officials have conditioned us to think that stocks, bonds, and mutual funds are the only answer. The real answer is investing in yourself, your own business, or investments where you are closer to the center of things, like houses, oil wells, and land.

A lot of times, the deferment of taxes comes with the deferment of life. We only get one shot at this, so maybe you don’t want to hoard all your cash for when you turn 65 years old. Maybe you want to go on a trip around the world now… Don’t defer your life, and certainly don’t trust Wall Street to help you retire or become wealthy.

Do you think the bankers and investment advisers on Wall Street are actively planning to be in the lowest tax bracket for themselves?

As someone who runs a financial letter,, I assure you everyone on Wall Street is getting rich from building businesses, many of which are brokerage companies, collecting fees. The 401(k) is also a mindless investment, something that conventional wisdom actually touts as a positive, but I think this is hurting us. It is making our people more dependent on the government and causes them to become financially ignorant. I would bet that not 1 in 10 people even know what they are investing in.

Have you ever considered that you might own a company in China that is using slave labor, or a business that totally goes against your own religious or moral values?

Lastly, not paying the tax now is a huge risk. Do you honestly think taxes will ever be lower than they are today? With 40 million Americans on food stamps and our middle class deteriorating, I am sorry, but taxes are going to be much higher in the future. You are far better off paying the tax now than paying it later. Unless, of course, your plan is to be poor at age 70. In that case, I guess you should go ahead and max that 401(k) out!

The ONLY exception to the 401(k) is if you have a government worker-type match, where they are literally doubling your money. Then, of course, it’s hard not to do it, but overall, I think one’s efforts will be much more rewarded if they take the money and put it to better use, like building up multiple streams of income that can help them today.

Best Regards,

Daniel Ameduri

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