The American Dream: Financial Independence

Scroode ™ - 5 Dirty Little Secrets that Keep You & The Masses Broke!

Contents The American Dream: Financial Independence ............................................................................................ 3 The Pursuit of Happiness .............................................................................................................................. 4 According to U.S Government Statistics ................................................................................................... 5 “The Financially Independent” ..................................................................................................................... 6 Dirty Secret #1 – Faulty Dogma .................................................................................................................... 7 Dirty Secret #2 - The Great Modern Day Bank Robbery ............................................................................... 8 Dirty Secret #3 - Understanding How Money Really Works! ...................................................................... 10 Learn How-to Measure Money ............................................................................................................... 13 Dirty Secret # 4 - Preservation vs. Accumulation........................................................................................ 16 Dirty Secret #5 - The Royal Sham, Cash-Value Life Insurance .................................................................... 17 Quick Summary ........................................................................................................................................... 19 Recap - Why the Masses Fail Financially..................................................................................................... 20 The Turning Point .................................................................................................................................... 20 References .................................................................................................................................................. 22 The Stats.................................................................................................................................................. 22

Copyright® 2015 by D.L. Witt. All rights reserved.

2


The American Dream: Financial Independence Countless books have been written, speeches given and endless information shared on “The American Dream” and how-to achieve it. Yet year after year the tiny percentage of those who actually become financially independent has remained relatively unchanged. In fact, some seriously argue that the number has been in steady decline for several years while others propose perhaps the American Dream itself is actually dead. If so, a serious question needs to be asked. In the modern information age of abundant resources and readily available know-how, why does financial independence remain elusive for most? In this powerful 23-page book, I am going to reveal “5 Dirty Little Secrets” that keep most from living the American Dream and instead broke and seriously financially challenged. *Before you begin reading I must caution you. The information revealed in this book may seem controversial. It may startle and disturb you. Some of it may even make you angry. You may want to argue and disagree with it. That’s ok and perfectly natural. I reacted in a similar fashion years ago when I was first exposed to the information inside. However, one thing is certain. The information you are about to read is factual!

Please proceed with a mild temper and an open mind.


3


The Pursuit of Happiness The American Dream is commonly defined as being financially free and living the good life. We see it stereotypically portrayed through fancy cars, multi-million dollar homes, exotic vacations, fine jewelry, world travel and early retirement to name a few. It is embedded at an early age into children’s minds who dream of one day becoming “rich and famous” as an all-star athlete, musician, best-selling author, world-renowned doctor and so on. It is part of the American culture that is not going away in the near future. So let’s address it. If financial independence is something most people desire or seek, how does one define it? For some, it may mean becoming a multi-millionaire and living extravagantly. For others it may mean having the time and money to take an annual family vacation. Leisurely travelling across the country in a mobile home. Buying a second home, summer cottage or winter cabin. Fully caring for an elderly parent or loved one. Or simply retiring early and living a care-free life.

How would you personally define it? Take a moment to really think about it. Do you define it differently today than let’s say 10 years ago? Have your exciting childhood dreams of conquering the world diminished or vanished? Are you really living the life today that you envisioned 10 or 20 years ago? If not, why not? Are you on the verge of giving up? Have you compromised your dreams? Don’t throw in the towel just yet. There’s room for hope. Read on.

Let’s first examine how the US Government defines and measures financial success.


4


According to U.S Government Statistics ✓ 1% of the population is considered wealthy ✓ 2% -5% are considered financially independent ✓ 97% are considered financially dependent with a vast majority relying on friends, family or government welfare programs to help make ends meet

The percentages above have remained relatively unchanged for decades. Looking at the numbers ask yourself, in the richest country in the world where a majority desire financial independence, why do so few succeed while most fall short and struggle financially their entire lives?

Is our system fatally flawed? Could it be that we were never taught how to succeed financially? Can the answer be that simple? Look around you. 95 out of 100 people you come in contact with on a daily basis will work their entire lives and still have to rely on some type of outside financial assistance to help make ends meet while working AND in retirement. The worst part is that most of these people NEVER imagined it would or could happen to them. Think about it!


5


The Financially Independent Let’s take a deeper look at the numbers. Obviously if the desire is to become financially independent, it only makes sense to find out what the 5% do differently than the 95% to achieve this status. One of the best resources to begin to find an answer is to study the annual list of the Forbes 400 Richest People. Although we are talking about the ultra-rich here, the wealthy 1%, there are commonalities that emerge and repeat down through the ranks into the upper class. Besides inherited wealth which makes up a small percentage of the wealthy, you will see that a majority of the Top 5% are Investors, Business Owners or a combination of both. Why Investors and Business Owners? Because Investors have learned the secret of “money working for man” NOT “man working for money alone” while Business Owners if successful, can determine and control the size of their own paycheck. It therefore is common sense that if you really want to increase your chances of becoming “Financially Independent”, you will have to become an investor, a successful business owner or both. The good news is that it’s not impossible regardless of your current situation. In fact, every day people just like you are learning how to make the necessary changes in order to improve their lives. The only thing that may be missing for you currently is the “how”. It will become clearer to you as I now expose the “Dirty Little Secrets.”


6


Dirty Secret #1 – Faulty Doctrine From an early age you are taught; “go to school, get a good education, get a good job, put all your money in the bank, don’t take any risks AND you’ll be fine”.

Sound familiar? For generations this doctrine has been instilled into the fabric of our society and rings true to countless millions today. It starts in the classroom, gets reinforced at the kitchen table and works its way into our adult lives never being questioned along the way. The results of following this doctrine are devastating. Tens of millions will struggle financially most of their lives and retire dependent on family, friends and government welfare programs to help make ends meet. The worst part is most were unaware of the consequences of this doctrine and helpless to change it. Nowhere is it taught that following this doctrine could lead to a life-time of hardships. Nowhere is it taught that only 5% of the population succeeds financially yet most want to. Nowhere is it taught what the historically proven paths to achieve financial independence are. What were you taught? Why? I have a quick question.

Why has this information been kept a secret from you and the masses?


7


Dirty Secret #2 - The Great Modern Day Bank Robbery So how could the masses be so ill-informed about creating financial independence? How could 95% of the population be duped for generations? There’s more to it than what you think. Let’s start by following the money.

Who really controls the vast amount of the wealth in the world? It’s the Banks and Insurance Companies. Need proof? Just look at their real estate holdings and massive buildings they own in most major cities.

How do they do this? It’s quite simple. Billions of dollars are voluntarily given to them by the masses in the form of deposits into savings accounts, checking accounts, CD’s, money market accounts and cash value life insurance policies.

Here’s how it works! When you put your money in the bank (because that’s what everyone has been programmed to do), it goes in the front door as a deposit and out the back door in the form of a loan. The banks are simply “middle men” who make a fortune by loaning out your money. Interesting, isn’t it? Yet most people never think of it this way.


8

Scroode ™ - 5 Dirty Little Secrets that Keep You & The Masses Broke! This cycle is repeated on a daily basis by tens of millions of people who give the banks billions of dollars of their hard-earned money as deposits that in turn become loans to others. The worst part is that depositors receive a mere pittance of reward in the form of interest for borrowing the banks their money and supplying the capital for this charade. Who’s winning and who’s losing in this game? I think you know the answer. Don’t get me wrong. Banks serve a great purpose to “park” money short-term or for establishing emergency accounts. However, banks are NOT in the business to create financial independence for “savers”. Yet, millions falsely believe that they can “save” their way to financial well-being through safe, secure, guaranteed savings accounts and CD’s. I will prove that it’s “mathematically impossible” to do so. Don’t take it personal, it’s simply a numbers game. Until the masses are awakened to the Great Modern Day Bank Robbery, the unnecessary impoverishment of tens of millions will continue uninterrupted. Ever wonder why banks are located at some of the most visible locations in communities and busiest street corners? If you answered to attract more depositors into their money machine, you are correct! Welcome to the banking business, masters of wealth creation for the banks and their shareholders! It’s time for the masses to enter the banking business and create wealth for themselves and their families. Wouldn’t you agree?


9


Dirty Secret #3 - Understanding How Money Really Works! What if almost everything you thought you knew about money was wrong? Well, what if it was? Again, most were taught to go to school, get a good education, get a good job, put all your money in the bank, don’t take any risks AND you’d be fine.

This doctrine HAS FAILED miserably for the masses. Instead the doctrine should have been; Yes go to school (if you can afford it). Yes get a good education (questionable). Yes get a good job (again questionable). Learn how to invest. Learn how to control the risk. Learn what it takes to become a successful business owner and then you just might have a legitimate chance of creating financial independence for yourself and family.

Below you will see a numbers chart. It’s a great tool to visualize how money works. Skilled Investors have this chart mastered. You MUST learn how to use this chart to your benefit or it will be used against you. You have no other choice. There are no maybe’s.


10

Scroode ™ - 5 Dirty Little Secrets that Keep You & The Masses Broke! Let’s take a look at this chart in greater detail and how it affects you

Let’s assume you can put away $100 a month for 40 years and you do so in an account that pays 2% interest. In 40 years your $100 a month would grow to $73,003. Again, as soon as you deposit money in your account, it becomes available for others to borrow. The bank can lend your money to another customer for a car loan, mortgage, business development or the bank can use your money for their own investment purposes. Let’s assume the bank lends your money to person who has the skills to earn 20% on it for the same 40 year period of time. Your money in the hands of someone else would grow for them to $12,284,401. Unbelievable, isn’t it? Finally, let’s assume the bank charged the skilled person 12% to borrow “your” money. Again, over the same period of time, 40 years, the bank earned $1,047,960 on “your” money.


11


Question? Who’s benefitting from this deal and who’s getting screwed? In this scenario, the borrower of your money made millions, the bank acting as the middleman made a million and “you” the depositor who supplied the money for all of this to happen may be struggling to make ends meet. Now multiply this same scenario by tens of millions of depositors worldwide. You’ll learn quickly that it doesn’t take a rocket scientist to understand that this is a poverty plan for the masses and a money machine for the banks and those who know how to earn a higher return on money!

Very Important Question! Where on the chart do you see listed one’s job title, number of college degrees, income, age, race, gender, nationality, religion? Where does it ask how nice or mean of a person you are? Nowhere. The brutal reality is that most of those things we assumed mattered actually don’t! What matters most is the ability to increase the amount of money you can put away and then get the highest possible rate of return % on it. Do it and YOU WIN! Cunning institutions like banks and insurance companies have also completely mastered the psychological game of separating the masses from their hard-earned money. Through myths, misinformation, fear and feel good words like “safe”, “secure”, “guaranteed”, “FDIC Insured”, the great modern day bank robbery continues to ensure that the banks get rich while the masses stay poor. You can clearly see on the chart that the higher the rate of return (%) over a longer period of time, the greater the amount of money you will accumulate. Conversely, the lesser the amount of money working for you at lower rates the smaller the amount of money you will have. The only thing that changed between accumulating wealth and suffering through a life time of money challenges is the % of return. The problem for most is that until they learn how to earn a higher rate, they will continue to struggle. You can’t take it personal. Again, it’s just a numbers game.


12


Learn How-to Measure Money Learning how to measure money will provide you with a great guide to determine if you are moving ahead or falling behind financially. Here’s the formula, don’t let it intimidate you. Principle x Interest x Time - Taxes - Inflation = Real Value of Your Money Principle – Amount of money you have to save or invest Interest / Rate of Return – Rate at which your money grows Time – Length of time your money grows Taxes – Amount you have to pay on interest income or capital gains outside of IRA’s Inflation – Rising costs of goods and services

Here’s an example using the above formula. Let’s assume you have $1,000 and put it in a so-called guaranteed bank savings account that will pay you 1% interest. At the end of one year you will earn $10 ($1000 x 1% interest) for a total of $1,010 Unfortunately, you will have to pay taxes on the $10 of interest you earned. The IRS calls it “interest income”. If you are in the 20% tax bracket, you will pay $2 in taxes. ($10 interest income x 20% tax rate) Now deduct the $2 of taxes you must pay from your $10 of interest you earned and you have a net gain of only $8 which represent .8% total gain. Question? What happened to the guaranteed 1% interest? (It doesn’t exist, does it?) Now you must adjust your money for inflation. If the inflation rate is 2% and you earned .8% on your deposit after taxes, you actually lost 1.2% on your money (.8% gain - 2.0% inflation rate = -1.2% loss) Your safe, secured $1,000 will only be worth $988 after one year of saving it in the bank!

Question?


13

Scroode ™ - 5 Dirty Little Secrets that Keep You & The Masses Broke! How can you realistically improve your well-being by growing money at a negative rate? You can’t. It’s impossible. In reality, you are falling behind and may not even know it. THE SOLUTION IS NOT TO DEPOSIT MORE MONEY INTO THIS LOSING FORMULA. The only solution is to increase your principle (the amount of money you have) & then increase the rate of return (%) you can earn on it. Need further proof? Look at the following chart.

This chart represents the silent money killer, inflation.

Using the above chart, let’s see what the value of $1.00 will be in 20 years if the average annual inflation rate is 3%. The number that intersects at 3% and 20 years is .55368 This means that $1.00 today will be worth just .55¢ in 20 years if the inflation rate is 3%. In more personal terms, if your retirement plan is projected to be worth $100,000 in 20 years, in reality it will only be worth $55,000 20 years from now. Make sense?


14


Shocking, isn’t it! Here’s another sombering scenario. If you want to live a $100,000 a year lifestyle 20 years from now, you will actually need to accumulate double that amount or $200,000 in order to do so. Why? Because over the next 20 years if inflation rate is at 3%, the value of your money will diminish by 50%! Make sense? Again, look at the above table. What if you plan to retire in 10 years and inflation is expected to be 2.5% annually over the next 10 years. Your nest egg will only be worth 78% of its current projection. Fact: The devastating effect of taxes & inflation on low interest savings accounts makes it mathematically impossible to cautiously save one’s way to financial success. You can be the nicest, smartest, greatest, best looking, most talented, most educated person in the world but if you don’t know how to measure money correctly, you’re going to struggle financially or worse yet end up broke!

Starting to see another reason why most fail financially?


15


Dirty Secret # 4 - Preservation vs. Accumulation Understanding the difference between preservation and accumulation is another dirty little secret most were never taught. Let’s define them. If you have all the money you will ever want, need or desire then you’ll want to preserve. On the other hand, if you do not have all of the money you want, need or desire then your goal is to accumulate. The problem is that the masses have been taught preservation strategies which are safe, secure, low interest earning bank accounts to accumulate money. Unfortunately, it’s mathematically impossible to accumulate money using preservation strategies. (Review the compound interest chart again) It's like trying to swim to Hawaii from California. No matter how great of a swimmer you are, you'll drown before you get there. That’s what’s happening to tens of millions of people today, they are drowning financially because they are using preservation strategies to try to accumulate money.

Finding Money If you want to drastically improve your chances of becoming financially independent, then one of the two historically proven options is for you to learn how to invest. One of the more common misconceptions about investing is that you need a lot of money to get started. That’s simply not true. You don’t need a lot of money to get started. What you need instead is know-how. Don’t run from this fact, embrace it!


16


Dirty Secret #5 - The Royal Sham, Cash-Value Life Insurance CAUTION: I REALLY DO BELIEVE THAT HAVING THE WRONG TYPE OF LIFE INSURANCE CAN BE FATAL TO YOUR FINANCIAL FUTURE. Besides a mortgage, one of the largest expenses a person or family will make over his or her lifetime is on premium payments for life insurance. If you are younger and do not have life insurance or a need for it, then I still recommend that you read this section. You will be faced in the future with the responsibility of purchasing it and you need to be armed with proper knowledge and information to make the right decision. If you are a female and think life insurance is only for men, think again. I am going to help you avoid the devastating mistake millions of people make when purchasing life insurance. I was a licensed insurance agent for years and know this subject extremely well. In fact, I have taught thousands what I’m about to teach you too.

Knowledge is Power! Life insurance agents are trained by the companies they work for to sell the policies that make the most money for the company, namely any policy that includes a savings element or cash value. Agents are also motivated to sell higher premium policies because their personal income is based on the premium you pay. The more you pay, the more they make. Because of this, you, the consumer, is at a distinct disadvantage. The insurance company wants to sell you the most profitable policy for the company while the agent wants to sell you a higher premium policy in order to increase his commission, all at your expense. Follow me? Now let’s add another insidious factor into the mix, the stigma associated with life insurance. Most people do not want to talk about life insurance because thinking about death can be a morbid subject.


17


What is life insurance? The word “life insurance” by itself is deceiving. Obviously life insurance cannot replace a physical life but naming it by its proper name, death insurance, would guarantee that very few would be interested in buying it. Instead, think of it as what it really is, Income Replacement Insurance. The intended purpose is to replace ones income should a premature death occur. If you live in a two income household whereby each person and/or dependents are relying on both incomes, then life insurance is necessary for both income earners. If there is no one dependent on an income, then the need for life insurance may not exist. Make sense?

The proper amount of coverage is the most important factor in purchasing a life insurance policy. Please re-read that again. It’s that important. The policy that provides you the consumer with the proper amount of coverage is also the cheapest policy that insurance companies sell. This least expensive policy (Term Insurance) is not a money maker for the insurance company or its agents. So don’t be surprised when they try to sell you anything but it. Despite what your agent may say, Term Insurance is best for 99.9% of those who need life insurance. It provides maximum protection for the least amount of money. Don’t be coerced into buying any “permanent” plans. Get informed today!


18


Quick Summary Life insurance was originally created as death insurance with the primary purpose of replacing an income due to a premature death. Over time insurance companies wanted to get in the lucrative banking business and created policies that were purposely designed to look like savings or investment plans in order to collect more money from their policyholders. By bundling insurance protection with a fictitious savings account they were able to create an array of insurance products to lure the uneducated public from their hard-earned money. Term Insurance is authentic, plain-jane insurance. It provides proper protection coverage at a very affordable price with no make-believe cash-value savings component. With term insurance, you are not giving the insurance company any extra money which they can use for their own benefit. That’s why most companies don’t want to openly offer term insurance policies and why they don’t want their agents selling them. On a side note, I greatly despise companies that sell life insurance for children and seniors. Children do not have an income to replace and therefore it is shameful to sell these plans to fearful parents. It’s just an insidious way for the insurance industry to condition the next generation to become lifetime depositors in their cash value life insurance programs. Seniors are also easy prey for the life insurance industry. They are sold life insurance policies to cover the costs of their own burial. How ironic. Overcharge them their entire lives for policies they couldn’t afford or didn’t need so they end up broke and therefore need to buy policies to cover the costs associated with their death. Criminal!


19


Recap - Why the Masses Fail Financially The most obvious answer is because they have never been properly taught how to succeed. 95% of the population at age 65 are partially or totally dependent on friends, family and government welfare programs to help make ends meet. Why? ▪

The masses have been indoctrinated since childhood with a failing plan

▪

Banks, insurance companies and the educational system perpetuate the plan

▪

The masses are taught preservation strategies to accumulate money

▪

The masses remain financially illiterate

▪

The masses practice the herd mentality finding solace in failing together than succeeding alone

The Turning Point Today marks a turning point in your life. Once you have been exposed to the truth, you cannot un-expose it. When I first learned about this almost 30 years ago, it was extremely shocking to me. How could that be? I was pretty smart or at least I thought I was. How could I be so misinformed and misled? Why did I not know about this? How did others not know?


20


The American Dream is Alive and Well Thirty years ago marked a turning point in my life. It changed the direction and destiny of my life and that of future generations in my family. Today may mark a turning point in your life. Oddly enough, your biggest challenge initially may come from those who love and care about you the most. Will you heed the call or risk heading down the beaten path that has caused financial hardships for countless millions? Will you be the one in your family who changes the direction of future generations? I challenge you to try! The American Dream of Financial Independence is alive and well. It’s waiting for you. Are you ready?


21


References The Stats According to the US Tax Policy Center based on household income You are in the top 20% if your income is $107,628 You are in the top 10% if your income exceeds $148,687 You are in the top 5% if it exceeds $208,810 You are in the top 1% if it exceeds $521,411

Exclusive: Signs of declining economic security http://bigstory.ap.org/article/exclusive-4-5-us-face-near-poverty-no-work-0

Half of Americans die with almost no money http://www.marketwatch.com/story/half-of-americans-die-with-almost-no-money-2012-08-29

Nearly Half of America Lives Paycheck-to-Paycheck http://time.com/2742/nearly-half-of-america-lives-paycheck-to-paycheck/ How to Break the Living Paycheck-to-Paycheck Cycle http://lifehacker.com/how-to-break-the-living-paycheck-to-paycheck-cycle-1445330680

76% of Americans are living paycheck to paycheck http://money.cnn.com/2013/06/24/pf/emergency-savings/


22

Scroode ™ - 5 Dirty Little Secrets that Keep You & The Masses Broke! Price tag for the American dream: $130K a year http://www.usatoday.com/story/money/personalfinance/2014/07/04/american-dream/11122015/

Number of billionaires hits record high in 2014 http://www.cnbc.com/id/102007270

Study finds 9 million members of the millionaires club in the U.S. http://www.nydailynews.com/study-finds-9m-millionaires-u-s-article-1.1290334

85 richest people own as much as bottom half of population, report says http://www.latimes.com/business/la-fi-mo-oxfam-world-economic-forum-income-inequality-20140120story.html#axzz2qxEXoTZW

CNBC.com March 14, 2013 US (and Booming Market) adds 300,000 New Millionaires http://spectrem.com/Content/300000-New-Millionaires.aspx


23