Ask the Mailman

EVERYONE NEEDS AN IRA…NOT SO FAST, YOU CAN HIT THE LOTTERY
If you have come this far reading about my philosophies of saving and generating money you will find that I am now going to make a wild turn in reverse (kind of) and show you how saving in an IRA is not as great for you and your family as it could be (talk about being a contrarian.) I think I can safely say that most everybody has dreamed of hitting the lottery and what you would do with a large amount of unexpected cash. A new house, travel the world, exotic cars, just pamper yourself beyond your wildest dreams. Then after that be generous to others, wipe out hunger in your home town, fund a new addition on your church, start your own charity. Does any of this sound familiar? Now you found out that you just hit the lottery the first thing that you have to decide is, do I take it in a lump sum, or monthly payments over a course of time. This brings me to the whole point of this chapter. Is it better to have a “nest egg” or an income stream? Please think about that for a second before you answer. I know for myself I always felt for me personally that a lump sum was best because I knew that I would have no problem managing those funds in such a way that I could create more than if I waited to collect the money over a period of time. History has proven that for the most part people unfamiliar with large amounts of money generally do not manage money well. While having large amounts of money is very comforting there is a responsibility that comes with it that can be overwhelming even destructive if not managed properly. In this book I have pointed out in various examples how money is the “sharpest tool in your tool box”, and for those who get my message and dare to take advantage of my ways of investing I have another approach to building wealth, to reveal here. From the very beginning I have strived to have a comfortable retirement, sacrificing in my youth so that I could enjoy life later. The very first year that the personal retirement account came into being I contributed the maximum allowed, and continue to do that to this day. The creation of the individual retirement account (IRA) by President Ronald Regan has been one of the most significant wealth builders for the working man to create a nest egg for his golden years since Social Security. I would like to point out here Social Security was created as a supplement to the working man’s retirement. It was never meant to be a sole source of income for retirement. The IRA has also been a large contributing factor to the growth of our stock market this because we want something more substantial in the way of seeing our money grow other than sitting in a bank which provides security but very little growth. So now for 35 plus years our working population gets the idea that they have to take a commanding role in their own retirement destiny, of which I have been the “poster child” for, and it is working as designed because I took an active role to achieve the results that I wanted. Social Security will be a supplement to my retirement as it was intended; in fact it will totally be “play money” for me. That is what my goal was to have that “nest egg” at the end that would provide me with not only me and my family’s needs but my heart’s desires. It worked. I hit my own lottery; I have my lump sum, my nest egg. I won’t say here that I did it wrong, but I will say that I could have done it much better had I paid more attention to the bigger picture at the finish line, and the “pot hole” on the other side of the finish line is income taxes.