Brian Michaud
The Michaud Letter Rules of the Strategy
What IF… what you thought you knew about money, turned out NOT to be true? When would you want to know?
The purpose of this conversation is to go through conventional (traditional) financial strategies and QUESTION the actual implications those strategies will have on your financial future.
Because each client’s specific situation is unique, I will provide a 100,000 foot overview, when covering a couple topics.
I encourage you to grab a pen or highlighter and highlight parts of this booklet that pique your interest. When you are finished contact me to schedule a time to meet and review what you’ve highlighted. You may have MANY “AHA Moments” when you read this book (and that’s a good thing). I encourage you to write them down so you can reference them when we meet.
Brian Michaud
CEO and Founder of Encompass
Sharing the Rules
We need to understand the rules of the game. Once we understand the rules, we can figure out how to play the game. Unfortunately, we are entering into retirement without anyone explaining to us the rules, so that we can make informed choices. Our goal is to help you have more spendable income for you and your family.
We will get into more detail, but hopefully you are beginning to see the problems we have explained and realized how you can proactively work to fix them.
My goal is to teach every taxpayer how true wealth works. Sharing how little the ‘rate–of–return’ conversation matters to true financial success. Allowing people to achieve financial success to a magnitude they never thought possible.
Understanding True Wealth
One key to understanding how true wealth works is to not focus on chasing rates–of–return, unless you thoroughly understand the potential losses incurred along the way. Utilizing Traditional Planning, your accounts are subject to the following;
- Market volatility
- Income taxes – all their variety
- Political climate
- Fees
- Asset management charges
- 12 (b)(1) expenses
- Commissions
Where you choose to invest, your after-tax dollars, will determine how many checks you will write to the United States Treasury.
What is Your Exit Strategy?
When you approach retirement, your ability to minimize your income tax burden will be decided by the amount of income that is required by law, to be disclosed on your 1040 tax return. All your investments that produce a 1099 will be added up and used to determine how much income tax you owe. It will also determine how much your Medicare premium will be and how much your social security will be taxed.
If your goal is to retire debt free, consider this: If you have $1 million in your traditional retirement account,
How much is yours (to spend)? One of your largest assets is your qualified retirement plan.
But how much is yours? Keep in mind, you are reducing your deductions, maximizing the amount of your distributions and maximizing the amount of your income exposed to arbitrary rate changes, determined by Congress.
Answering the Right Questions
The fact that you can not determine how much of “your” million dollar retirement plan you will get to spend during your retirement years (I hope you realize) is a problem. I would classify the UNKNOWN amount that you will not be able to spend as debt. Think about that for a minute. What would you call it?
Would you borrow money and not understand the maximum rate you would be charged?
You may have built your largest asset around the assumption that you will be in a lower tax bracket. But let’s analyze this
You do not need a retirement plan when you retire, you need money.
Where your money is, is more important that what it earns.