Understanding YOUR Economic Alternatives With an Education in Alternative Economics

In the recent past we looked to professionals of the financial planning industry to help us devise a more informed plan that would take us comfortably into our retirement years. Unfortunately, the procedures and methods that most typical financial planners follow and suggest have become archaic and antiquated (even self-serving). Too often, this misguidance has led to diminishing returns instead of the large gains usually promised. As a result, and for good reason, we as a public have lost our faith in these so-called professionals and have lost the desire to save or invest for the future. Read the book, “Where are the Customers’ yatchs?” by Fred Schwed Jr.

To further the challenge, Social Security has published their prediction to be bankrupt (See your yearly Social Security statement page 1 top right paragraph) and the government is screaming at the public through almost every form of media to establish a personal financial plan that would not include government assistance. In other words, “you are on your own!”

Without understanding your economic alternatives or having a personal system of financial growth, the effects of social heredity during demographic and economic transition has proven to be devastating financially for most.

In other words it’s becoming more and more difficult to achieve any level of financial security if we make our financial decisions based on our inherited perceptions. As time goes on things change and the economic climate we live in changes too. Things are changing more rapidly now than ever before. Unrecognized changes expand the information gap between our perceptions and reality. The decisions we make have their result determined by how close, or far, our perceptions are to the reality of the world we live in.

For instance, did you know:

1. You can Self Direct IRA’s, 401K’s and other tax deferred retirement plans and use those funds to leverage acquisition of high performing real estate and watch your assets grow unhindered by taxation.
2. If you have stocks bonds or mutual funds you can often Pledge (Not Borrow) that asset as a down payment on real estate but never take it out of the funds they are in. In effect you can double dip!
3. Banks make money through something called Arbitrage and so can you.
4. You have hidden assets you didn’t know you had. In fact you have all the financial assets you need to achieve any goal you desire.
5. The Return On Investment for Home Equity is Zero.
6. The Effective Rate you are paying on a fixed rate mortgage changes from one year to the next.
7. Of the ways that the financial planning industry are allowed to report the performance of your investments under their management at least 9 of the 13 can make it look like you are getting a better return than you are. Sometimes you are actually losing money when they report a gain.

Through knowledge of truths like this, and much more, you can turn the financial table in your favor.

To achieve your own goals and dreams (which may be just a comfortable retirement) you must become knowledgeable and sophisticated about how the money game works, now, and stay that way through fast paced changes. This requires an education process that may rattle your conventional thinking and an on going affiliation with a trusted source of new and current information as well as opportunities to keep you on the cutting edge. Finally you need to learn to apply a new systematic process that works and keeps working; Because all the knowledge in the world won’t get you anywhere without its application.

The principles of what is becoming known as Alternative Economics are critical in developing a successful personal system of financial growth. Alternative Economics is being called by some experts the solution to a failing financial plan in America and the economic doctrine of our era.

Alternative Economics was first introduced to the public through local investor clubs of the national investor group as a personal system of financial growth and an emerging industry by the National Strategic Investment Corporation (NSIC) in February 2005.

Founders of NSIC recognized growing financial disparity in homes on a national level due to inefficient financial planning traditions, a failing social security system and mismanaged or impotent government and corporate retirement programs that overlook many beneficial alternatives.

This disparity has reached a climax as the public is encouraged to take charge of its own financial future. The challenge to this solution lies in the progressively fast changing economic climate of this country caused by the effects of rapid technology growth among other major changes and events. The national education system can not keep up with these changes therefore leaving the public to make financial decisions based on perception and not reality. Financial decisions made with the old or just inaccurate information of perception yield less than desirable results and extinguish motivation of savings or investment activity. As a result less than 1% of this nation’s household income is currently being invested in any kind of retirement or financial plan.

Alternative Economics is an answer to the call to the American public being shouted by top officials from every political party of the federal government to plan our own financial future. The message is clear, “the government will not be able to support us as we get older”.

The “Savings Are Vital to Everyone’s Retirement Act of 1997” (SAVER) was enacted on November 20, 1997. The purpose of the SAVER Act is to advance the publics knowledge and understanding of the importance of retirement savings. The Act directs the Secretary of Labor to take action in four general areas:

1. To maintain an ongoing program of outreach to the public to effectively promote retirement income savings;

2. To disseminate specific educational materials related to retirement savings and the principles of saving and investment;

3. To establish a web site as a means to disseminate these materials, and

4. To convene these National Summits on Retirement Savings.

In 2006 this was the objective of the National Summit of Retirement Savings taken right from the DOL web site located at the Department of Labor web site listed in the resources section below.

National Summit Objectives

1. Advance the publics knowledge and understanding of retirement savings and its critical importance to the future well-being of workers and their families.

2. Facilitate the development of a broad-based, public education program to encourage and enhance individual commitment to a personal retirement savings strategy.

3. Develop recommendations for additional research, reforms and action in the field of private pensions and individual retirement savings.

Alternative Economics fulfills all three of these objectives. But why is our savings so important to the federal government? The answer is two fold:

1. The productivity of this nation and therefore the health of its economy are directly related to the savings habit of its people.

2. Based on current savings habits in America the majority of future generations will not have the ability to retire or even support themselves on their own resources.

Coupled together, these two effects of the current savings habit of the American people could result in an unrecoverable condition and even a collapse in our national economy.

“Left uninformed, ambition is paralyzed by fear of the unknown. Opportunities go unrecognized and our dreams of a prosperous future fade away into excuses.”

– Steven Hettema-

You may be asking yourself, “What is Alternative Economics”? To answer this lets start by telling you what its not.

Alternative Economics is not about stocks, bonds or mutual funds. Our corporate retirement plans, pensions plans, 401ks and IRAs are all invested in stocks, bonds and mutual funds. Let’s face it, we’ve all seen or experienced the poor performance of these traditional investment classes. We’ll talk in more detail in future articles about why we believe these investments are yielding such disappointing results. We’ll also discuss how Alternative Economics will solve this problem on a personal level for anyone who actively applies the methods and principles it suggested. But for now let’s keep the conversation a little broader in scope.

As a country, we’ve lost faith in these investment tools and are no longer motivated to save or plan for the future in the manner that we used too. This is evidenced by the fact that Americans save or invest less than 1% of our income. Some believe this is just because we are less disciplined today or we just don’t care any more. Suggestions have been made that we are entering a new economic era lead by an irresponsible generation with an immediate gratification mindset. These explanations blame this depleted savings habit of our nation on the actions of the people and not the cause for these actions or lack thereof.

The American people of this generation are not stupid; we are simply reacting to our common sense…Why engage in a plan that we know is failing for so many? After all, discipline comes from motivation and motivation comes from faith in an action that will yield a desired result. We just don’t believe anymore in the traditional financial plan which relies (for the most part) on the performance of stocks, bonds and mutual funds. What we need are better alternatives.

Alternative Economics is also not reliant on your frugality. Most Americans are under the perception that growing assets and/or investing are only possible at the price of significant lifestyle sacrifice. It’s no wonder people think this way, listen to what Federal Reserve Chairman Ben Bernanke was quoted saying:

“Unless the current generation is willing to sacrifice, by cutting consumption or increasing savings, future generations could face a heavier reduction in living standards.”

“We can mitigate the adverse effect of the aging population on future generations, but only by forgoing consumption or leisure today. As the population ages, the nation must choose among higher taxes, fewer government programs, cuts in Social Security and Medicare, a higher deficit or some combination of those options.”

USA TODAY 10/05/2006, by Sue Kirchhoff

Does Ben understand what he is saying? Doesn’t consumer consumption affect the health of the economy? Of course it does! Spending less to put more in savings or afford a higher social security tax is not a solution. Sorry Ben! People need alternatives that will allow them to keep spending (maintain or improve lifestyle now) while growing assets for their future at the same time.

The reality of this perception, left to us by the media, our political leaders and our heredity, makes more understandable the lack of motivation Americans have to save or invest in a conventional manner. Think about it, who in their right mind would be motivated by this financial plan?

Take money from your current budget, sacrificing lifestyle now, to save or invest for your future in a system that, based on past performance and future projections, will leave you with a retirement savings that won’t even support the reduced lifestyle you endured to make a better one.

With that kind of outlook, no wonder we are more apt to say, “Spend it while you can enjoy it and hope for the best at retirement”. Even though that’s not a plan it makes more sense than the traditional option described above.

The concepts of Alternative Economics deal with the necessity of asset accumulation without requiring or even consideration of frugality.

Finally, Alternative Economics is not reliant on corporate pension plans or government managed retirement programs such as Social Security.

In a recent Frontline Report titled “Can You Afford to Retire”, which first aired on May 16th 2006, observers were made aware of corporate financial strategies that lead to the demise of employee pensions. Specifically, federal law allows companies that offer pension programs to use those employee pension funds for company expenses with the hopes to repay the deficit at a later date. If the company experiences financial difficulty and can not repay the pension funds then they can file chapter 11 bankruptcies to wipe out the debt leaving employees with nothing. Check out the full report at the link below.

http://www.pbs.org/wgbh/pages/frontline/retirement

The Social Security system has predicted its own bankruptcy date and publishes it in its own report to the American people every year. Most of us have, at some time in our working life, received the yearly Social Security statement. If you are like the majority of people, when you finally take the time to look at the document you immediately turn to the 2nd and 3rd pages which outlines your personal benefits if you retire, are injured or die. This year take the time to read the first page. On it you will find the details of when (not if) the Social Security system will be bankrupt. Specifically, it’s in the paragraph on the upper right hand side of the cover page. When you read it you will understand why the government is so emphatically encouraging us all to make financial plans for retirement that do not include government or corporate managed programs.

Its time for economic alternatives; it’s time for Alternative Economics.

Alternative Economics(TM) is a personal system of financial growth designed to reveal hidden assets and apply them to alternative investment strategies using four asset acceleration principles through three financial growth stages. It is the solution to the failing traditional financial plan in America and the economic doctrine of our era.

Let’s break that down:

– Personal system of financial growth

– Revealed hidden assets

– Alternative investment strategies

– Four asset acceleration principles

– Three financial growth stages

Watch for future articles on each one of these five subjects above in the very near future. Meanwhile you can see more about the National Strategic Investor Group, the National Strategic Investment Corporation and Alternative Economics at http://www.nsicgroup.com

Practicing Frugality Around Your Home to Help You Afford to Keep It

With so many homes falling to foreclosure in this current economic turbulence, many homeowners are struggling to keep on top of their mortgage payments so keep a hold on their homes. One of the best ways to help stretch out your funds to keep abreast of your monthly payments is by cutting down your monthly costs as much as possible in those areas that you can be flexible about. Two of the biggest areas that your family can cut back on their expenses are with your grocery and transportation costs each month.

One of the biggest expenditures that families have is that of the monthly grocery bill; while it is important to keep your family well fed, there are many extras that you can easily cut back on to keep your costs down. Take the time to look through store flyers to find the best deals on pricier purchases; don’t drive all over town to save a few cents on items, but instead shop for your deals when convenient during the week. Stock up on items that have a long shelf life like canned goods; there are often good deals to be had at case lot sales on items that you will use regularly. Many fresh foods can be stocked up on as well; if you know someone with fruit trees or you can get a good deal on in-season fruit, it is easy to prep and freeze it for later use.

Try to shop around the outside edges of your grocery store where the milk, eggs, meat, and produce are. You may have to dip into the middle of the store to pick up items like basic baking supplies, cereal, canned goods, and the all-important coffee and tea; the key is resisting all the non-essential items.

For non-grocery items, like cleaners and paper products, it is most cost effective to shop at discount stores or watch for sales. Discount stores are also good for items like shampoo, razors, and sometimes prescriptions too.

Another big area that you and your family can cut back on expenses is with transportation; many families have two or more cars that they maintain and buy gas and insurance for. If you can manage it, cut back to one vehicle for the family. It’s likely that not everyone in the family needs their own car. Look into car pooling or public transit; one monthly bus pass is far cheaper than driving for a month but may be somewhat of a sacrifice in convenience.

While many money saving strategies may not be very popular in your family at first, it’s important to keep an eye on the goal here; sometimes it’s necessary to take on a temporary sacrifice in order to keep control of your finances in these turbulent economic times. Try to get your family behind the endeavour for best results and less resistance from them.

Pay Off Your Mortgage Early

If you’re looking to pay off your mortgage early, you may have heard of mortgage acceleration plans. These plans are designed to help you pay off your mortgage faster than the set 30 years.

One program is relatively new in the U.S., but has been used by other countries for decades. It offers more advantages over traditional payoff plans. It is called the Money Merge Account system developed by United First Financial. This program takes an advanced line of credit (similar to a HELOC), your existing mortgage, and the money merge account system and details exactly when and how much you should submit to your mortgage payment each month to pay it off in the shortest time period.

This program uses an advanced algorithm (math calculation) and is tailored to your lifestyle and financial needs. This means you don’t have to refinance or change your existing lifestyle. There are several advantages with this program.

First,you don’t have to refinance your existing mortgage like other payoff plans. Next, you can obtain a small HELOC from your local bank. This HELOC can have any interest rate, and it won’t affect the payoff estimate unless you had a previous balance on a HELOC. The HELOC amount is typically lower than other plans as well.

Second, the money merge account software clearly shows you all your financial data including income, expenses, mortgage balance, and the time when everything will be paid off if the plan is followed precisely. Although you are required to manually input your expenses each month, it gives you the power to see how much money you truly spend each month and helps prevent you from overspending. Overspending causes you to see more time being added to the payoff of your mortgage, which helps you be visually aware of your money and goals. This can help you subconsciously cut back on unneeded spending, such as eating out and shopping, and be more frugal. Thus, the more disciplined you are with the system’s plan, the faster you can pay off yourr mortgage.

With this system, an early mortgage payoff can occur in about 8 to 15 years. The only thing you’ll have left to do at that time is figure out what to do with all the money that used to go to your mortgage.

6 Overlooked Ways To Keep Your Pennies In Your Pocket

No one wants to be a “pinch-penny” or to be known as the “that tightwad guy” but with everything around us climbing higher and higher in price, we really don’t have much of a choice. It’s time to get smart with our money and learn to save in little ways that can grow into big savings.

1. CHECK YOU RECEIPTS. I’m checking mine now on a regular basis, I’ve found that it’s not always pennies but sometimes dollars that are rung up wrong. Over the course of a few times, this can add up to a nice amount of money back into your pocket. Most stores don’t do this on purpose (the computer age, don’t we just love it?) so just bring it to the attention of customer service for a refund.

2. GET YOUR BOOKS FOR FREE. How about a place where you can get all the books you want to read for free? It’s called the PUBLIC LIBRARY! Thousands of books for all ages, all interests and all for free!! When you think that you’re paying $10.00 to $25.00 and up per book that you read and just set on your bookshelf, probably to never touch again, you can see how much you could save over a year’s time.

If you just have to have the book, try finding it at one of the half price stores or a used bookstore. Most will take requests.

3. INTERNET COUPONS. There a literally hundreds of sites on the internet that have coupons for just about anything you could want from an oil change, cutting your hair or your dogs, getting your teeth cleaned to personal products and of course, food. You sign up at the site, decide which coupons you want and print them out. What could be easier and you save on products you use everyday.

4. TURN OFF THE HEAT. Many dishwashers come with a control that allows you to turn off the heating element during the drying cycle. If you don’t have one, just set a timer as a reminder and turn the dishwasher off.

During the winter months, open the door all the way to let the dishes dry-adds humidity to the air. During the summer, wait a few minutes after turning it off (gives the hot air inside time to cool down) and then open just a few inches to let the dishes air-dry.

5. MAKE YOUR BATH SOAP LAST LONGER. Buy your favorite brand of bath soap, open both ends of the paper wrapper and place on a shelf in your linen closet, on a closet shelf with blankets or in your dresser drawer. Why are you doing this?

When you allow the soap to air dry for about 30 days it will last about 50% longer when you use it. By placing on a shelf or drawer it acts as a potpourri sachet.

6. MONTHLY CREDIT CARD PAYMENT. If you must carry a balance on your credit card and are only paying the minimum amount each month, begin now to pay your card weekly instead.

If your monthly payment is $100.00 per month, make weekly payments of $25.00 instead. Interest is accrued daily to your unpaid balance, so paying weekly instead of just once a month will reduce your owed interest greatly over time and get that balance back down to where it should be–$0.00.

“A penny saved is a penny earned” has never looked better!

Ruth Walby