The Prosperity Blog

Financial Maturity: 7 Stages of “Adulting” with Money

Financial Maturity: 7 Stages of “Adulting” with Money

What does it mean to be an “adult” with money? What are the recognizable signs of financial maturity? To answer this, we’ll expand on a list co-author Kate Phillips shared in a Total Wealth video on “Adulting with Money.”

First—in case you are unfamiliar, let’s define “adulting.” The term refers to one’s ability to behave responsibly and maturely to accomplish necessary tasks.

While the focus is decidedly on behavior, financial maturity isn’t just a checklist of habits or accomplishments. It’s also a mindset. Adulting includes an understanding the role money plays in the world and the opportunities—and responsibilities—it brings.

Let’s dive in!

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Income for Life: Create Cash Flow with an Annuity

A guaranteed lifetime income is a compelling proposition. After all—who doesn’t love the idea of being set for life?  Financial planning for retirement begs for guarantees. While it is impossible to know how long you’ll live, it IS possible to make sure you will receive (at least) a certain amount of income for the rest of your life. Especially in this age of rock-bottom interest rates, a lifetime income annuity can be a lifesaver for some retirees!

Single Premium Immediate Annuities (SPIAs) can provide this income, yet few people use them in their retirement strategies. How can you know if a lifetime income annuity makes sense for your situation? Let’s explore.

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The 7 Principles of Prosperity™ in Action!

“Principle: A basic truth, law, or assumption.
A fixed or predetermined policy or mode of action.”

American Heritage Dictionary
The 7 Principles of Prosperity™ in Action!

In our Prosperity Economics philosophy, we use our 7 Principles of Prosperity™ to guide our strategies and actions. These are truths about wealth-building that have stood the test of time!

We didn’t “invent” Prosperity Economics so much as we coined the phrase to describe what already existed. The wealthy have practiced Prosperity Economics for generations. We simply observed and described the timeless principles and practices of wealth-building.

Knowing and understanding the 7 Principles can help people make confident financial decisions. So today, we review the 7 Principles of Prosperity™ along with specific action steps for managing your assets to accelerate wealth-building.

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Should You Retire Early? (5 Considerations)

Do you dream of life with no alarm clock, no commute, and no boss? Then you might be one of the many Americans who aspire to retire early. But for many, the dream of early retirement leads to a rude awakening when the reality of living on a limited income sets in. Today, we examine early retirement and the challenges it brings.

Usually when people ask questions about financial decisions, it’s difficult to answer without having more detailed information about their situation. “How much do you earn? Do you have consumer debt?” and so on. But if you are asking, “Should I retire early?”—whatever your situation—we would say, “No, please don’t!”

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Make Your Money Multitask!

Make Your Money Multitask!

One of our 7 Principles of Prosperity™ is MULTIPLY. Of course, we all want our money to multiply! But how—especially in such a volatile environment? The secret to multiplying your money is getting it to work harder… doing multiple jobs!

The truth is, we are trained to do the OPPOSITE with our money.

Certain dollars go in the retirement account bucket. Other dollars go in the 529 college education bucket. Emergency fund savings over here; life insurance over there. And don’t forget the long-term care bucket, the saving-for-a-down-payment bucket, and the vacation fund bucket!

While humans may be more productive doing only one task at a time, this is not true with money! Money works best when it can do multiple jobs.

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Let’s Bust the Financial Planning Lies!

If much of what you have been told about building wealth was wrong—when would you want to know? Hopefully, the sooner the better!

I used to be a typical financial planner. I began my career working in a bank, then moved into “typical” financial planning. Several years later, as I describe in Financial Planning Has Failed, I came to understand I was leading clients down the wrong path—or at least, a flawed path.

Typical financial planning can give investors false hope and very little control over their own money. And by the time people realize they are going to owe their brokerage, money managers and Uncle Sam a hefty cut of every dollar they receive in retirement, it’s too late to change course.

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The Self-Directed IRA: Pros, Cons and FAQs

During his presidential run, Mitt Romney came under scrutiny when it came to light that he had acquired something of a fortune in his self-directed IRA. According to Forbes.com, Romney’s IRA was worth between $20.7 and $101.6 million. How did he acquire such wealth in a qualified plan environment?

The answer lies in the descriptor “self-directed.” Because Romney this had a self-directed IRA (aka SDIRA), he was able to use his IRA to fund venture capital and private equity investments inside his retirement account. When Bain Capital (in which Romney was a founding partner) became highly successful, Romney’s wealth ballooned.

While few people have the ability to turn limited retirement plan contributions into many millions, the financial container Romney used to grow his investments tax-deferred is not reserved for multi-millionaires. Any American can open a self-directed IRA and use it to invest in (almost) anything they wish.

In this article, we outline self-directed IRA pros and cons and the basics of self-directed IRAs, including:

  • What is a self-directed IRA?
  • What can you invest in within a self-directed IRA?
  • What are self-directed IRA pros and cons, advantages and disadvantages?
  • Who might benefit from one?
  • What is the process and how do you begin it?

Then at the end of this article, we’ll list links to additional resources for further information.

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