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What Wealth Strategies Are You Following?

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06/20/2007

I am so excited about my new radio show, Web site and upcoming business ventures (more on that over the next few weeks) that it's really hard for me to keep my enthusiasm in check. Fortunately, my devoted team always keeps me on track so that I don't get too ahead of myself.

Now that I do not have to perform the daily radio show I've been able to put some quality time into creating new content, researching new investment ideas and forming new alliances -- all to the benefit of my readers and listeners.

This past weekend's radio show focused on wealth, and specifically the wealth strategies that are most common. I have written about these opportunities in the affirmative because that's how I want you to think about them -- as if they are actually happening to you!

Let's take a look at them now: Let's take a look at them now:

  1. I live within my means each month. I spend less money than I make and save at least 10% of what I earn. Boy, wouldn't all of America be better off if they followed this basic principle of wealth accumulation? If I were asked what the best advice is to give a young person just starting out it would be to live beneath his or her means.

  2. I am building a retirement nest egg for myself through consistent savings and proper money management. This is one of the most basic wealth principles of all. You must save and invest for the day you stop working. This strategy also involves saving in the right places, such as your company 401(k), Roth IRA, etc. But where I see the biggest mistakes here are with high-wage earners -- those who make over $150,000 per year and who are not saving enough money. This is where a variable annuity (VA) or variable universal life (VUL) policy comes into play.

  3. I am actively working to pay only the taxes that I owe. Most Americans overpay their taxes. I know that's a bold statement, but it's true. Tax management is a wealth strategy. If you don't have a competent CPA or if you are not actively trying to lower your taxes, you are simply wasting money.

  4. I have targeted specific assets that have great wealth accumulation potential and I am consistently working to enhance their value. Stock options, real estate, small businesses and even your brokerage account all have great wealth building potential. Many people are planning on realizing a great return on certain assets. This is a great goal and a powerful strategy, and it most likely is the primary focus for many of you.

  5. I am creating passive income from my investments. This strategy is perhaps the most important one that you will ever pursue. Get this right in retirement and you will never have to worry about money again. Get this wrong and you could find yourself outliving your money -- a place no one wants to visit. Passive income investing today is very exciting. There are vehicles out there that deliver 7-10% annual dividend returns and many of those opportunities pay dividends monthly.

  6. I will leave a legacy to my heirs and the causes I care about when I pass on. I am finding that this strategy is very important to many people and this concern is something that really warms my heart. People want to take care of other people, whether through the causes they support or just through helping the loved ones they leave behind. Kids, grandkids, foundations, schools -- they mean different things to different people. Legacy is a wonderful wealth strategy and it can help to make the world a much better place.

  7. I am protecting my family and my assets from unforeseen threats that could hurt my wealth. Life happens; it could be an earthquake in California or a tornado in Texas. It could be the untimely passing of a spouse or an accident which results in a lawsuit. There are many things that could take your wealth away from you. That is why you need to manage the risk of accumulating wealth and taking care of those you are responsible for supporting. Life, health, disability and liability umbrella insurance policies all are meant to manage life's risks. Most people hate insurance, but once you understand its purpose and how to buy it correctly, you will come to embrace it.

Of course, I've just scratched the surface here when it comes to the many wealth strategies you can employ. But the point is to start thinking affirmatively about how you are going to create the kind of financial life you want for yourself and your loved ones.

BLOGS AWAY 11

Most of you probably already know that I am no longer broadcasting a daily radio show. But that doesn't mean I no longer have much to say about the markets and all matters financial. In fact, I now record a special message to Alert readers each week on my new free audio blog.

To listen to this week's audio blog, simply click here

ENERGY STOCKS AND SELL DISCIPLINES

We've seen the price of crude oil rise to nearly $70 a barrel this week. That $70 price point is perhaps a big point of resistance for oil. For example, the price of oil fell nearly 2% in Wednesday's trading.

A U.S. government report released today showed an increase in crude and gasoline supplies. Those findings caught most energy traders off guard. As we head into the always high-demand summer months, with increased supplies of crude, we may start to see a reversal in oil, gasoline and related energy stocks.

In fact, we already are seeing a sharp decline in energy stocks that are measured by the Energy Select Sector SPDR (XLE). This basket of the biggest and best energy companies has been smoking over the past month, but we now are starting to see a trickle-down effect as a result of today's oil news.

What this means for those of you who own energy stocks -- and who have watched your holdings surge in value over the past few weeks -- is that you must be very cautious. You absolutely must have a stop loss in place to protect your hard-earned gains and to preserve your invested dollars in case things go south.

Right now, my Successful Investing advisory service subscribers are profiting from this surge in energy stocks, but we also know that things can turn on a dime. That's why we have a stop loss in place to protect our winning position.

To find out more about how Successful Investing can help you collect gains in the energy space while protecting principal, click here

YIELDING TO HIGHER YIELDS

The precipitous spike in bond yields of late has taken on a life of its own. Although rates have come back off their recent highs, the move toward higher long-term interest rates definitely is in full effect.

In light of this now-established trend in bond yields, my High Monthly Income advisory service clients are positioning their money to take full advantage of this circumstance.

Just today we have allocated to an inverse bond fund that moves higher when the price of Treasury bonds falls. As you can see by the chart below, yields have been on a tear of late, and this surge in yields translates into a real profit opportunity.

I believe bonds are now entering what can now be described as a mini-bear. This mini-bond bear, i.e., the widespread rise in interest rates, also has taken its toll on other interest-rate sensitive sectors such as real estate and utilities. The two charts below, IYR and XLU, demonstrate the pernicious affect that higher rates are having on these once high-flying sectors.

If you currently are allocated to either real estate stocks or utilities, make sure you set a stop loss to protect yourself against any more selling in the sector.

Better yet, if you want to find out how my High Monthly Income subscribers are putting their money on the right side of the interest rate surge, click here.

HITTING THE ROAD IN JULY 2

You may recall that I just returned home from a fantastic week in Las Vegas where I attended the annual Money Show. Well, get ready Sin City because my team and I soon will be making another Vegas run.

This time we'll be there for FreedomFest 2007, July 5-7, at the Bally's/Paris Resort.

At this conference, I'll be conducting two investment workshops. One workshop will be on the future of investing using exchange-traded funds, while the other workshop will identify the next hugely profitable market sector.

For more details on FreedomFest 2007 and/or to register for the event, simply point your browsers here.

But hey, you don't have to make the trip out to Vegas just to catch one of my live events. If you are near Los Angeles or Orange County on Saturday, July 14, I invite you to attend my Creating Passive Income Seminar.

This event will be held at 9 a.m. at the Hyatt Regency Orange County, Garden Grove, Calif. For more information on this event and to reserve your spot.

Finally, don't forget about the upcoming San Francisco Money Show, which takes place July 26-28, 2007, at the San Francisco Marriott located in the heart of downtown San Francisco. Join me and over 50 of the country's premier policy analysts, advisors, and money managers who will share their best strategies for taking advantage of economic, political, and market opportunities to grow your investment assets.

You can choose from over 150 educational workshops and 15 panel presentations. The show also features a state-of-the-art exhibit hall with more than 125 of the finest financial companies in the country displaying their cutting-edge products and services. For complete details or to register for free admission, call 800.970.4355 (be sure to mention priority code #008562), or visit: The Money Show San Francisco's Home Page to register today!

Hope to see you there.

THE COACH IS IN 9

Once again I am really happy to report that so many of my Alert readers have taken me up on my offer for a free, annuity coaching session. The issues you've brought to my attention have really helped me to learn about the difficulties annuity investors face in this current market.

Your input also has helped me to see the kind of marketing and sales pitches many of you are subjected to when trying to make annuity decisions. I probably don't have to tell you, but there are a lot of promises made out there that, well, let's just say are laced with too much optimism and not enough realism.

If you are an annuity investor, or if you are planning on buying an annuity anytime soon, you owe it to yourself to take advantage of my offer for a free coaching session. I know I can help you to learn more about this often complex investment tool.

One thing you've got to realize is that understanding annuities requires experience and knowledge. I want all of my Alert subscribers to know all of their options before making decisions. If I can help you with your annuity questions, please just send me an e-mail and let me know.

If you would like to get your FREE annuity coaching session with Doug Fabian, simply send an e-mail.

THOUGHTS ON UNDERSTANDING

"Do not weep; do not wax indignant. Understand."

—Baruch Spinoza, philosopher

I know that subjects like the stock market, life insurance, taxes and retirement planning can often be vexing. This is especially the case when you aren't equipped with the proper tools to understand these often complex matters. The solution, of course, as Spinoza points out, is to not cry or get mad, but to just learn. Once you learn about how these things work, you take the mystery out, and then you can really understand and even master the complexities that once led you to weep and wax indignant.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you'd like me to share with your fellow Alert readers, send it to me, along with any comments, questions and suggestions you have about my radio show, newsletters, seminars, or anything else.

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