Incomology Makes the Difference

I have been involved in the financial services industry for 44 years. Throughout that experience I have heard, seen and witnessed every new great change that would revolutionize the industry. Most of these were gimmicks created to increase sales. The changes were necessary to create confusion because for some reason the industry seems to believe that confusion increases sales. Sorry, but it's totally opposite. Confusion creates procrastination which makes sales more difficult.

One of the most misdirected narratives has been the industry reflection on the concept of Retirement. The logic was to educate people to save. As if this was a great secret. Somehow no one knew about compound interest and the magic of saving. The problem is everyone knew about spending which also drives the US economy, so economically savings are an anathema to economic growth. When people save it takes money out of the economy and thus slows the velocity of money. Not good for the economy overall.

The picture changed though when the baby boomer generation was considered. This requires a much deeper analysis but for purposes of this writing let's skip over the depth issue. The simple truth is the baby boomer generation was and still is the most productive and influential generation of our society. In the 1980's the government recognized the impact of this generation when they would come to age of retirement A generation that influenced the economy at every stage of life couldn't reach retirement without some serious shift in how retirement was perceived. Thus came ERISA and the government enticement for Baby Boomers to save money tax deferred with deductible contributions. The government would be a willing partner to control the money and help the baby boomers be prosperous in retirement. But wait that was a big lie. The purpose was for the government to grow and control the end state of the baby boomers. Remember this generation created and controlled the greatest wealth in US history and would be passing that wealth onward. The government couldn't possibly ignore the temptation of grabbing this wealth. And so, the concept of the 401K and other defined contribution pension plans came into play. The great benefactors of this were the government and Wall Street. And so here we are in 2022 with a government debt of almost $31 trillion and an ERISA pool of about the same.

This brings me to the concept of incomology. For 40 years now the retirement story has been about saving money people don't have or paying down debt they do have, of course that requires more money they don't have. And so the middle class continues to go round and round on a hamster wheel with no opportunity to create generational wealth. Of course, the wealthy continue to use the techniques to create that ongoing generational wealth. My work has been to help the Middle Class accomplish what the wealthy have long been doing. The problem is the middle class has been misled and kept in financial illiteracy. The government wants it this way and will continue to keep it this way if people don't change.

There are 3 steps to financial independence for the Middle Class. It starts with the awareness about increasing income. It's not about saving or debt reduction, those are great for the financial services industry but sadly just a continuation of the plight of the middle class. The wealthy understand income and they realize that cash flow creates wealth and strategy grows cash flow. They realize that it takes 3 types of income, direct, residual and passive.

Now, it's time for the middle-class earner to recognize these principles and how to use them properly. There are strategies that can put the middle class on equal footing for financial independence. It's simple education and a change of mindset. The hardest part is breaking through the existing paradigm that clouds the middle class. We work with one client at a time and I'm growing an organization of Financial Concierges trained to work with clients.

We can create financial independence one client at a time.