In working with these individuals I’ve come to learn something.

I do a lot of calls with people who have knocked on the door, who have heard about Freedom Founders and our reputation for what we do, and are checking to see what their next steps are. And in my review of many, many hardworking, ethical, great-service-providing doctors and dentists, I've come to find that many have done things the wrong way.

I don't mean they've been ignorant or stupid or been spendthrifts. No, I'm saying they used models that were very disparate, meaning there was no coordination between them. For example, almost every financial advisor, CPA, or accountant tells people who get into a business or a relatively high income that to save on taxes (the keyword they say is “save” which is the incorrect term) you need to have a retirement plan, particularly a 401(k).

“That's where you start – you need the 401(k) because you can invest money into it and get a tax deduction, it can grow in the market, and it's all tax deferred.” (Of course there could be a Roth component to that, which is tax-free). 

I get all that, but here's the problem. 

I've had this call many times and I want you to be aware of this. Once you put money into a retirement plan of any kind, whether that’s a 401(k), traditional IRA, Roth IRA (which I’m not against), cash balance plan, or defined benefit plan – the money goes into what I call a lockbox. (Side note: There are so many ways that advisors try to get people to stash money, often because they’re also managing the money and making a percentage off of it. May or may not be a conflict of interest).

What do I mean by lockbox? This means you can't get the money back to utilize in any form or fashion until you're 59 ½  without paying a substantial penalty, plus the taxes on that money. You’ll pay taxes anyway if it's in a traditional plan; if it’s in a Roth that's not currently the case, until they change the rules of course.

This is a problem because I’ve talked to many doctors who are in their mid forties to mid fifties who would like to slow down, look at options to transition out of the practice, maybe get out of the practice and the business altogether. But when I look at the assets that they’ve invested in, the majority of their money is in their traditional retirement plan – yet they’re still a number of years before 59 ½ . All I can do to help with that pile of money now is to show them how to get it out of the financial markets, self-direct it and invest it in real estate. At least we can save it and build it up more, but the problem still persists: you can't use it. 

(I recently wrote a blog post on why investing in general is dangerous right now, especially in the stock market, and the importance of not trying to figure it out on your own; you can read it here.)

This is why I'm not a fan of 401(k)s and retirement plans, and why I don't recommend it for those who want to be on their own frontier of creating their own financial advocacy and their own financial future.

For those people, I think it's the worst plan in the world. But for most people who don't have a clue and don't want to learn – they just want to abdicate their financial future to the markets or index funds or whatever it is – then you better at least do something. 

However, if you want to live a life of freedom, actually be able to take your foot off the pedal, not continue the usual drudgery of doing the same thing over and over every day – which sounds like a terrible life – then you have to do something different.

So what’s the lesson here? If you really want to do something differently, you've got to find a mentor – somebody who has done it differently, who actually lives the life that they're preaching about – and follow a different plan.

Does it take some guts to do that? Of course, but would you rather be like everybody else and play it “safe”? They can play it safe, but as I tell everybody: Whatever your philosophy in life and investing is, you will pay a price for it. What that price is depends on your choice of actions. Doing what society calls safe might keep you “safe”, but is safety worth the lack of freedom?

It’s your choice. For me, I prefer being on the edge, the forefront, but I also mitigate the risk factors because I don't do things alone. I surround myself with wise people; I find the right people so I don't have to do it all myself. This allows me to buy my time back. 

That's the key, but most people say, “No, I don't want to do that. I'm cheap, I'm frugal. I can do it myself and figure it out on my own.” I’ve seen that go wrong in so many cases, and I’m just telling you that you’ve got to step out a little bit – it will require some faith. Get some social proof on what others have done and decide, “Is this something for me?”

I encourage you to give this some thought. If you are on that hamster wheel and you'd like to have the ability to get off of it in the next few years, don’t just wait and hope that it will all magically come together at some future retirement age. You have to do something different.

Freedom Founders is a place where I’m able to help a lot of people. The timing isn't right for everybody, but the only way to find out is to check us out. I invite you to schedule a discovery call with one of my team members and see where you stand. The worst thing that'll happen is you’ll receive some clarity. Clarity on where you stand and what your options are. Once you know, you can decide what you want to do.