The current economy is rife with uncertainty. The danger is that uncertainty creates optimal conditions for financial myths to be created and for existing myths to be reinforced. When people make decisions from fear and scarcity, rather than confidence and abundance, destructive myths gain an even greater stronghold.

Myths become “sacred cows”—unquestioned beliefs that become woven in to the fabric of society, so much so that they become extremely difficult to see through and change.
They gain momentum through popularity and social agreement. They are not true or correct principles, but rather they are simply comfortable ways of doing things.

The ultimate sacred cow of retirement planning is the 401(k). To illustrate how the myths limit the potential of individuals and leave their success to chance, I will analyze the following article, which is based in conventional financial planning, and kill the sacred cows throughout. My intent is to help you, the reader, discern truth from falsehood and recognize myths. Throughout the article I will give you useful questions to ask not only for this situation but future financial decisions. Look for my comments in italics.

Retirement Funds: Invest More Now

By Jonathan Burton
The Salt Lake Tribune

Falling stocks are roadblocks to a comfortable retirement. The first assumption is that people have to use stocks as part of their plan. Stock market “investing” has become so deeply associated with retirement planning that for most, it’s almost unthinkable to consider alternatives. I say “investing” tongue-in-cheek because very few people actually invest in the stock market; most people are simply gambling with very little control and knowledge of what they’re doing and how they’re creating value. Furthermore, there are plenty of private investments that may be more in alignment with your knowledge, passion, and abilities than stocks. At times like this, when the path looks especially rocky, it’s tempting to reduce your regular contributions to a 401(k) account or other automatic investment plan. Interesting that when the plan is failing the article points out that people would be tempted to stop contributing to something that is losing. If you are traveling down the wrong road, is staying the course going to get you where you want to go? If there were a path less rocky why wouldn’t you want to take another route? It is as if the media wants you to think that your options are limited and you just have to accept that the ride will be rough and you may or may not get where you want to go.
In fact, with the U.S. and international stocks both down sharply this year, it’s actually a prime time to boost your commitment to these all-terrain retirement vehicles. Isn’t this an interesting take on investing? Since everything hasn’t been working and you have been taking losses, you should buy more because it is on sale. It would have been nice to know the sale was coming so people could avoid putting money in when things were overpriced. Why, if stocks are down sharply, is it a good time to buy? Are they for sure going to go up? Is this the end of the downturn or could there be more? Does anyone know for sure? If not then it sounds an awful lot like gambling. It is like saying at the roulette table “It has hit black three times in a row, red is down, now is the time to bet on red.” Take a bit extra from each paycheck, buy more shares at lower prices, and let the markets long-term upward trend do the rest. What is meant here by long-term? How long is the long-term? When will the upward trend do the rest? What is the impact of the downturn on your overall return and ultimately how you feel? This makes it sound so simple. That you just throw your money at the market and it will work out (even though the article starts talking about sharp downturns). What about those that were counting on retiring next year or had already retired? How long before they get where they want to be? There is no science thus far, merely myths and marketing. The message is loud and clear- you don’t know what you are doing so just stick it out and let those in charge handle it for you. You’re not directly creating value in the marketplace, but the marketplace will handle value creation for you if you just give it money.
“It’s a practice that almost all the great investors have used”, says Christine Benz, director of personal finance at investment researcher Morningstar. “They’ve taken advantage of short-term market panics. It’s a sensible strategy for smaller investors to emulate.” Do we know that it is a short-term market panic? How do we know? What are the indicators? Why did the Bank of Scotland tell their clients to be wary of the market and that the worst is yet to come? Who is right? Do you know? If not, then moving forward is a gamble.
Of course, anyone just a few years from retirement shouldn’t pile on stock-market risk – there isn’t enough time to recover from losses. But this recent turmoil has also rattled the bond market, where the same “buy low” strategy applies. How does one recover from losses? This is a damaging and utterly false myth. There are two parts to it: first- that high risk will be rewarding, and second, that you can actually recover from a loss. The definition of risk is to increase your chance of loss. So how can increasing your chance of losing equate to a higher return? Well…it is a gamble. Do you want to gamble with the money you have earned through hard work? Do you have future dreams that your money must fund? If so, is it worth risking it all? Second, a recovery is a misnomer. If you have $10,000 and lose ten percent, it will leave you with $9,000. But if you earn ten percent the next year, you only make $900, therefore leaving you $100 short of your original principal. Furthermore, you have also lost two years of potential progress and gains, which is lost opportunity cost, a cost that very few traditional advisors and pundits take into consideration.
“If you can afford to contribute more, I would tell you to increase it in any market,” says Sri Reddy, head of retirement strategies at ING. “Participate as much as the plan will allow.” Increase the contribution in any market- WOW, this really exposes the myth. Do you think that ING has an interest in you making deposits no matter what? Is this in your best interest? Once again, it is automatic and requires no thinking. Who is really making the money here? ING makes money on fees whether you have an increase or a decrease. Now, they would prefer an increase, but in their own words “I would tell you to increase it in any market.” Where is the strategy? Where is financial freedom and security? How is this in alignment with your plan?
Stick To the Plan
Increasing payroll contributions to a retirement plan, regardless of market condition, will likely earn you more over time. This is stated as if it is fact, but do some research. There is one key word here-“ likely.” How likely? What are the factors involved that determine this? Is there any way that you can directly contribute to increasing the likelihood of earning more, or are you completely dependent on indeterminate market forces?
Consider two hypothetical 401(k) investors who stashed $1000 in a Standard & Poor’s 500 Index mutual fund at the end of 1997. Initially, they each added $100 a month - $50 from salary and a $50 employer match – to this all-stock portfolio. A decade later, that approach brought the account’s value to about $17,500, according to investment researcher Lipper. So there was $13,000 put into the plan and just ten years later there is now $17,500. Best case scenario one can look at this as a 14.51 percent return on money. If on the other hand the match was considered money that is yours, it is only a 5.02 percent interest rate. As a side suggestion, if you do not feel that the 401 (k) is the best vehicle for your retirement or as an investing vehicle, then you may want to consider a new approach. If you are in a firm where you can communicate with the decision makers, it might be an opportunity to ask them to just pay you the money they would have otherwise matched in your 401(k) so you can utilize it more appropriately.
Back to the issue of the 17,500 dollars. If inflation were 4 percent (think of the increased cost of gas, utlilities, food and housing over the past 10 years and that would be a very low estimation) and now the $17,500 is only 67.56 percent of what it was just ten years before—in other words, the spending value is equivalent to $11,822, not $17,500. And, if a person has not yet reached age 59 and a half, if they actually use the money they will likely pay a ten percent penalty in addition to taxes (which could be higher if salaries or income have gone up for the individual in the last ten years). Now it would seem the person in this scenario is merely treading water. And were administrative fees, 12b-1 fees, and expense ratios taken into consideration on this amount of money?
During this period, the U.S. market went through an uplifting bull market and a punishing bear. Indeed, it was still a dark time for stocks at the end of 2002, when one of these workers – by now earning a bigger paycheck – upped her monthly contributions to $75 with an equivalent employer match. Well…if it was glaringly unsuccessful above, then more money will fix the problem right? So $3,000 more, the impact of the penalty, still don’t have full access to the money, assuming all expenses are accounted for, etc
That decision proved lucrative: At the end of 2007, this worker amassed a retirement portfolio worth $21,000. Even better, the automatic nature of these plans takes the emotion out of investing – as long as you don’t tinker with it. Through what’s know as dollar-cost averaging, you’re buying more shares in down markets and fewer in up markets. Do you want to only be average? Is this the goal? I agree that taking emotion out of investing can be very effective at times, but taking education out of investing is a dangerous path, sure to lead to a rocky road. The important thing is that you’re in the game; once you slip out of retirement-savings mode, it’s hard to get back in. If you are losing the game, is it the most important thing to be in the game? If you don’t know what you are doing how successful will that game be? Know that you can be educated (as evidenced by you reading this article). Investing doesn’t have to be complex—it’s just lucrative for the institutions to convince you otherwise.
“The worst thing that can happen,” says David Kula, chief investment strategist at money manager Mainstay Capital Management, “is that someone who has a long-term strategy designed to meet their goals and time horizon lets short-term market volatility cause them to waver.” Ummm…how do they know the worst that can happen? What if the government changes the rules of the plan? What if taxes go up? What if you need access to the money but it is locked up in this plan and you damage your credit or face foreclosure due to the illiquidity of this plan? What if you have no exit strategy and therefore don’t enjoy any of this money you save over your lifetime? What if you do not have a proper estate plan and lose up to eighty percent of the money to income and estate taxes when this is passed on to your heirs? What if you have too much of your employers stock and it ends up like Enron? I am not saying those things are going to happen, or that you should feel hopeless, or have all of your focus go towards worst-case scenarios—I’m simply saying that those that want your money paint a limited picture of what is happening and how it impacts your life.

Stay Balanced

Yet with rising prices at the supermarket and the gas pump, an uncertain outlook for jobs and the pressure of mortgage payments and homes that have lost value, many Americans are stretched thin. A 401(k) may be a lifetime plan, but to many people at this moment it’s a piggy bank to cover the bills.
Focus on the big picture. Trimming retirement contributions puts more money in your pocket, but you’ll have less once you stop working, and you may even have to work longer to make up the difference. Look for ways to cut spending or consult with a credit counselor before you slash savings. If you are putting money into a 401(k), but carrying twenty-two percent or higher credit cards it seems that the big picture would be to take the guaranteed profit. You know that twenty-two percent will be charged on your credit card, but do you know what your investment inside your 401k will earn? What if cutting spending means that you are not investing in your productivity? What if it means not investing in your education and memories with your family? What if that puts undue stress on you and limits your happiness? Is that worth cutting back on always? It is important and essential to live within your means, but locking your money up for years and gambling in the stock market while carrying expensive credit cards, or having late fees on mortgages may not be “big picture” thinking.
“Turning to 401(k) money is not a reliable long-term solution to your debt problem,” says Gerri Detweiler, a credit expert with Credit.com. It’s better to leave it alone and look at your other options”.
“By decreasing contributions now, you’re giving up a long-term retirement nest egg,” adds Dean Kohmann, a vice president of 401(k) plan services at Charles Schwab. “Whether the market goes up in one year or three years, you’re still better off staying invested.” Same advice no matter what—stay in, put more in. It doesn’t matter if the market goes up, down, or is flat, the advice is always the same. What is your plan? What do you really want? Does your current financial picture and strategy align properly to deliver the results you want?

Don’t be subject to what financial institutions with vested interests want—determine what you want and create your investment strategies based on meeting your interests. Get educated about what you are doing with your money and you can overcome the financial myths that are destroying the prosperity of so many.

When looking into 401k contribution limits it’s important to understand what you are trying to accomplish with your money. This is because although qualified retirement plans are popular, they aren’t necessarily the best wealth accumulation option for many people. Many people ask about 401k contribution limits because they are either high networth individuals, or approaching their golden years and want to have a nest egg available after age 59 ½.

For someone approaching retirement in the next few years, contributing the maximum might make sense. Many of the negatives attached with losing control of your own money, having it invested in places unknown to you, and the possibility that the government could change withdrawal rules while your money is trapped –have a lower downside on those approaching the withdrawal age limits.
(NOTE: These negatives still exist, but if your money will only be tied up for a short period of time, the negatives will have less impact than having money trapped in a qualified plan for 30 years or longer.)

For higher net worth individuals, maxing out your plan may seem to be a drop in the bucket and automatic “ but does that mean it is the best use of your funds? Most high net worth individuals have access to lower risk, higher return investments due to their level of unique knowledge in their field of expertise.

Also, financial experts agree that it makes sense to invest in areas where you have personal expertise and experience versus blindly contributing to an uncontrollable fund within a qualified plan (usually being run by a fund manager who is a unknown to the you, the investor).

Another reason that people max out their 401k contribution limits is that they see the company match feature as free money or a 100% return on investment. Although this may appear to be the case on first glance, it is far from the truth. I have personally tested returns from qualified plans against the opportunity cost of using the funds elsewhere. I found that people investing outside of a qualified plan far exceed the returns and flexibility of having funds tied up in these retirement vehicles.
In 2009 the 401k contribution limits for people under the age of 50 is: $16,500 and for people 50 or older it is: $22,000. In both cases that amounts to a lot of money for nearly anyone with a corporate salary, so how that money is used should be considered carefully. When weighed against investing in education, starting a business, or areas where you have a great deal of knowledge “ placing money into a qualified account blindly can feel a little like gambling. (If the market does well, you do well; but if it suffers so do you.) This lack of control is one of the largest contributors to stress, and a major way that 401k contribution limits the amount of spending that people enjoy — even AFTER they’ve retired.

9 Myths About Money & Prosperity

Myth 1: Scarcity Should Drive The Marketplace

The marketplace is driven by the notion that resources are limited and the world is a zero-sum game: anything that another wins is no longer available to all others. But this simply isnt true. We must put value on people, not things. We should seek win-win situations, not win-lose. Abundance, expansion, and reproduction is the natural state of the universe. Even if resources are finite, scarce resources plus human ingenuity equals abundant resources.

Myth 2: You’re In It For The Long Haul

Were told to accumulate wealth by letting our investments sit forever, such as with a 401K, to diversify, invest according to our risk tolerance, and never to utilize our principal. In a few decades, our investment should have multiplied so many times that we can live off the interest. So why is it a failed concept? Its based on gambling, not investing. Further, this type of investment is often based on a calculation that doesnt always add up. Plus it severely limits productivity by teaching that we have to wait 30 years to enjoy life; it is based on the misguided hope of futurism rather than maximizing the present, creating a dilemma that leads to inaction or limited action.

Myth 3: Financial Security

Security is perceived as coming from financial products, the government, corporations or health and retirement benefits. However, this type of thinking is destructive and debilitating because it leads to an entitlement mentality. It keeps us working in conditions that dont bring us happiness in the name of security, and it gives us a false sense of peace and security that we come to depend on.

Myth 4: Money Is Power

On one side of the money coin, were told one must have assets to build on, otherwise theyll remain stuck. But this runs contradictory to the belief each of us can create value and capitalize on our ideas, energy, or non-financial resources. Broke people think they need to start with money in order to end up with money, so they remain broke. This is why they gamble so much “ they have nothing, so they want something for nothing, from nothing. On the other side of the coin it is essential to realize money has no intrinsic value — to hate it or love it doesnt make money good or bad. The phrase œMoney is the root of all evil was perpetuated by a misunderstanding of biblical quotes and solidified by the belief that capitalists exploit workers. If money is a tool of production, used to facilitate efficient and effective exchange, then how can this even remotely be evil? The myth is paralyzing us because we want more money but are afraid to pursue it; and it turns our brains off when we settle for the lie that money isnt important.

Myth 5: High Risk Equals High Returns

There are no inherently risky investments; there are only risky investors. People make an investment safe or risky. Everything carries risk if we arent educated about the investment. And who defines whats risky “ for whom? Never accept the propaganda that you must be willing to stomach high risks in order to achieve high returns. The truth is, the better you can mitigate your risks to near zero, the higher your returns.

Myth 6: Self-Insurance

Too many people believe in only buying the minimum insurance coverage with the lowest premiums, and to stop carrying various insurance once we accumulate enough assets to be self-insured. But what should be done, for peace of mind and maximum protection, is buy all the insurance you can get. The more assets you have, the more insurance you need.

Myth 7: Avoid Debt Like the Plague

People are not taught the true definition of debt. Not all borrowing is debt. Debt is a function of assets minus liabilities, where if there are more liabilities than assets a person would be in debt. So it is a function in relation to the corresponding asset that you have when borrowing. Going in to credit card debt to support an out-of-control consumer addiction would be misguided and would create debt. Bottom-line, its okay to owe money if theres a greater or equal asset acquired through borrowing.

Myth 8: A Penny Saved Is A Penny Earned

We too often base our decisions on price, much to the exclusion of all other factors. Instead, we should look at other factors such as value “ both of the product or service to our lives and of how its creation gives value to society at large. Price is certainly a factor to buy or not, but we should still compensate the manufacturer for the value we will receive, according to our perception, rather than to win at their expense by getting them to lower the price.

Myth 9: It’s All About The Numbers

We make too many financial decisions by numbers. The problem is numbers alone can lie and dont often tell the whole story. Stats can be presented in any way and given any context in order to convince people of things. But stats are a trivial part of reality at best, and more often than not are considerably misleading.

The first step to overcoming myths, obviously, is to become aware that they exist, to identify them, and to raise our conscious awareness of how to deal with any financial teaching that we encounter. 

The formula for overcoming money myths is offered in six steps: 

1.      Ask the right questions, such as:  Who has a vested interest in what’s being proposed to you:  Is this really in alignment with my best interests?  What level of control do I have with this proposition?  What are the opportunity costs of this approach? 

2.      Know your interests.   Analyze all of the implications of a proposed investment, and see how they align with your interests, values, and your vision of your ideal life.  When we have precise visions of what our lives are about, and a clear sense of our Soul Purpose, we can see through any proposal that is not aligned with principle and our purposes. 

3.      Understand the “value proposition.”   You must weigh every financial option on several merits.  If you’re unable to see how value is being created, the chances are high that you’re dealing with a myth. Before you rush, under pressure, to act on a hot stock tip, determine exactly how value is being created, and how it will be sustained.

4.      Apply the teaching universally, in as many contexts as possible.   If something is clearly wrong and ridiculous in one context, the chances are good that it will be ridiculous in any other context.  An excellent way to test if a financial teaching is a myth or not is to apply it to any other area of your life and see if it holds true.  For example, would you parent a child the way you deal with a 401K?  Imagine raising a child by just throwing money at them, feeding them systematically, letting daycare have almost full control over them, and not thinking much about how they are performing until they’re fully raised and it’s too late to do anything about it if things have turned out badly.  Of course, it wouldn’t work out very well (but it would be okay since everyone else is raising their kids that way too). 

5.      Identify the impact that, living the teaching will have on the fulfillment of your “Soul Purpose.”   The ultimate end of every one of our decisions-financial and otherwise – should be to get us closer to finding and living our Soul Purpose.  Our Soul Purpose is the reason that we were born. It is the thing that brings us the most joy and creates the most value for others.  It is the development of our full potential.  It is what causes us to reach far beyond the mediocrity of social agreements. It is what gets us beyond a normal life to live extraordinarily. 

6.      Commit to always seeking every educational opportunity possible throughout your entire life.   One of the best ways to cultivate the ability to see through myths, recognize them for what they are, and then to break through them is to be constantly increasing our knowledge.  The more we know, the more content we have.  The more complete our knowledge is, the better informed are our decisions.  For example, the more an entrepreneur knows about historical cycles, her market, her product and/or service, her customers and how to run her business, the less risk she is exposed to and the more profitable she can be. Ignorance is perhaps the highest risk of all.

Concise Keys to Living a Life of Prosperity 

Financial Bondage

“This ideal world will never be realized as long as we are in financial bondage, both because of our personal choices and because of social myths concerning finances.  The way out of financial bondage is easier and closer to home than it may seem at times.  The power to kill the sacred cows of social myths is within us, and the power to become financially free is through our personal choice to be personally responsible, not in some amazing financial product or hot stock tip.”

Happiness Beyond Material Things

“If we want to prosper, we must learn that happiness does not strictly come from material things.  We must become aware that happiness comes from inside of ourselves, and nothing external can dictate our lasting happiness. Taking responsibility for and shaping our beliefs and habits is the first step towards happiness and prosperity.  The irony is that the healthier our beliefs are, the more material things flow through our lives, and the greater happiness we experience.”

Prosperity Is A State of Mind

“When we understand that people, not things are the real assets, we naturally stop placing so much value on natural goods. We have less of a tendency to base our sense of self-worth on how much stuff we have.  We find more happiness in relationships than we do in homes, cars, and boats.  We realize that prosperity is more a state of mind than it is net worth on paper.”

You Control Your Fate

“It’s natural for us to find things outside of ourselves to blame and to attack when things go wrong.  All of us do it or have done it.  But if

America is to remain free, and if her citizens want to prosper, then we must stop believing that financial security is a result of things outside of ourselves or beyond our control.”

Live In Abundance Over Scarcity

“Scarcity results in a competitive approach to economics and personal finances.  If resources are limited, and another’s gain results in my loss, then I must compete with that person for all available resources.  Competition results in hoarding.  If another’s gain represents my loss, then I must never give up anything I possess or own, because once it is transferred to another, I have lost all value that comes from activities and possessions that cost money and the increased satisfaction that comes from exchanging something we value for something we value more.  The opposite of competition is, of course, cooperation and interdependence.  When individuals bring unique skills and talents to a combined project, the total value of that project increases at a greater rate than the values of those people working individually on separate projects.  This is how we create an infinite economic pie.”

High Risks Are Not Needed For High Returns

“Behind every investment is people; understand the people and you understand the investment.  Be a wise investor and wise investments will follow.  Never accept the propaganda that you must be willing to stomach high risks in order to achieve high returns.  The truth is exactly opposite – the better you can mitigate your risks to near zero, the higher your returns.  There is, in fact, a direct relationship between risk and reward, but that relationship is what banks and other financial institutions practice themselves, not what they want the public to believe. They teach the propaganda in order to transfer their risk to end consumers – the more risks consumers take on, the less banks have to.  It may be a brilliant strategy on their part, but it’s a crippling fallacy on our part. If we want to prosper, we must learn how to reduce our risks and simultaneously raise our returns.  This is done by recognizing that we as individuals are our most important assets, and taking the time and effort to increase our human life value through education.”

Your Soul Purpose

“Selfish people never reach their full potential. They’re so concerned about what they can get from others that they never think of what they have to give.  It is precisely what we have to give that results in the development of our whole being.  Our Soul Purpose is all about what we have to offer to the world, not what the world has to offer to us.  As long as we’re more concerned with getting than giving, we will never find and live our Soul Purpose.  We will never love and serve others in meaningful ways.  And consequently, we will never receive what we have the potential to receive, because there is a direct correlation between what we give and what we receive.”

Financial Myths Come From The Great Depression

“The question arises, “If most of what we’re taught about money is false, then why are these monetary lies so prevalent, and where do they originate?’  I believe that most of the myths about money that we are taught today originated in the Great Depression, are solidified by financial institutions that have a vested interest in keeping the public ignorant of the principles of true wealth creation, and are spread through the misconceived advice of well-intentioned family members and friends.” 

Financial Freedom Is Within You

“Above all else, I want people to stop looking for solutions outside of themselves and instead turn inward to find their personal power that so often lies dormant and undiscovered. I want people to see that financial freedom is within their grasp and is something that they can control. No matter how broke we may be in our physical world, we can focus on increasing the quality of our mental and spiritual lives, which will then be reflected in our physical world. I invite you to question and analyze the traditional teachings about finances and see if they bring you closer to or take you further away from being all that you have the power to be.”

Hard economic times provide excellent strategic opportunities for entrepreneurs who are willing to buck conventional wisdom. 

Hundreds of successful entrepreneurs currently rely on Garrett B. Gunderson to help guide them on unconventional paths to business and personal success.  Here is what Garrett is currently advising his clients:

     1. Raise Salaries.
     2. Spend More.
     3. Meet Less.
     4. Stop Saving for Retirement.
     5. Put All Your Eggs in One Basket.
     6. Go Back to School.

1. Raise Salaries

When so many employers are reducing their workforces and cutting salaries, step up by showing your employees how much you value Human Capital and give them raises.  Employees, contrary to conventional accounting wisdom, are assets, not liabilities.

Savvy entrepreneurs recognize that each dollar invested in raising salaries during economic hardships leverages the loyalty and productivity of employees far more than handing out comparable raises during boom times. 

Now is the time you need to get the best out of your people.  Increasing their salaries demonstrates strength, vision, and importantly, gratitude for their contribution to your success.

2. Spend More 

Some great bargains are available now, for those who have the courage to nab them.  Many assets are undervalued and can be acquired at discounted prices, be they inventory, fresh hires, office supplies or even real estate for future expansion.

It is far more conducive to wealth creation to focus on increasing your production, rather than on slicing your expenses.

Spend where your money will have the most impact. 

3. Meet Less. 

Control freaks meet.  In good times, this inefficiency is easily glossed over.  But now is the time to empower your people, set clear expectations and boundaries, and then get out of their way.

Instead of sitting around in meetings talking to one another, encourage your employees to get out and improve contacts with customers and vendors.  Your team members can’t spot any market opportunities passing time in your company conference room.

4. Stop Saving for Retirement 

The best pension plan is simple: be successful.  Although qualified plans are sacred cows, you can’t afford to lock your money up in retirement plans now when liquidity is so essential. 

Ultimately, your business is a far better investment than a 401(k) anyway, especially since it can provide ongoing cash flow without the worry of depleting principal. Invest in yourself and in your business. By improving your liquidity, you’ll have cash to fund your enterprise and seize opportunities created by the economic dislocation of others.

5. Put All Your Eggs in One Basket 

Let others worship at the alter of diversification.  Now is the time to take a long, hard look at your business’s core reason for existing – its so-called Soul Purpose – and focus all your resources and energies on it.

Who are you?  Why do you exist?  Who do you serve?  What can you be the best in the world at?  Stay true to yourself in hard times and shed the excesses you’ve allowed yourself along the way.

6. Go Back to School 

Forget what you think you know about business, marketing and the economy.  The world is constantly changing and fortune-makers will use slow business periods to bolster their education and leadership skills. 

The most successful entrepreneurs I know are those who are constantly reading, attending seminars, engaging with mentors, and exposing themselves to new adventures and ideas.   This is even more imperative when the difference between those who weather the economic storm and those who don’t may well be the extra edge and contacts that continuing education provide. 

Conclusion 

While others are downsizing, cutting back, floundering, and desperately trying to diversify, you should be building your people, spending more money on the right things, thriving by being on the cutting edge through education, and maintaining laser focus on what you do best.  

The current economy is rife with uncertainty. The danger is that uncertainty creates optimal conditions for financial myths to be created and for existing myths to be reinforced. When people make decisions from fear and scarcity, rather than confidence and abundance, destructive myths gain an even greater stronghold.

Myths become “sacred cows”—unquestioned beliefs that become woven in to the fabric of society, so much so that they become extremely difficult to see through and change. They gain momentum through popularity and social agreement. They are not true or correct principles, but rather they are simply comfortable ways of doing things.

The ultimate sacred cow of retirement planning is the 401(k). To illustrate how the myths limit the potential of individuals and leave their success to chance, I will analyze the following article, which is based in conventional financial planning, and kill the sacred cows throughout. My intent is to help you, the reader, discern truth from falsehood and recognize myths. Throughout the article I will give you useful questions to ask not only for this situation but future financial decisions. Look for my comments in italics. You can download the article HERE.

What are your inner conversations like? Are you optimistic or pessimistic? When you begin something or have an idea how do you relate to your ability to implement? Many times the most powerful conversations are the ones we have about ourselves. Do you create uncertainty or look at past shortcomings as reasons to be fearful or do you feel energized and excited by your ideas? I have heard the phrase that we are our own worst critic. Is this true for you?

One of the best ways I know to create empowering beliefs and to shift the internal conversation is through meditation and gratitude. Meditation is great at silencing those negative thoughts and creating space for our inner genius to come through. Gratitude is great to leave us with an empowered feeling as we move attention towards something energizing.

Are your thoughts providing energy and serving you? They are serving you one way or the other, which do you choose?

What is your personal economy like? Does a recession have to impact you? Can an interruption in production ever be a good thing? What are you aftraid of most?

To start with the first question, each of us has our own opportunity to doing something that the marketplace values. For some, it becomes a routine and complacency tees them up for an awakening. This awakening is usually when they are commoditized. An example of this would be the mortgage market. For quite some time, there has been low rates combined with low barrier to entry to deliver a loan. Some refer to this as the refi-boom. Many people could get a license and then show people how to lower payments. There was steady and increasing growth in the number of mortgage brokers due to the simplicity and demand. Hence, a routine began. People did what was “normal” for them and the money came. Then the rules changed. It was a quick and significant drop off for many. Others used it as a way to elevate what they delivered. Which type of mentality do you have and how are you going to choose?

Early in June and early in the morning I got a phone call from Mike Isom. It was around 6 am and I was just getting ready to head to the gym. I didn’t get to the phone on the first call, but Mike called back. He was actually in Los Angeles preparing to attend a Strategic Coach event that day. It was that phone call where Mike told me the plane carrying Ray and Les left St. George the night before and hadn’t made it to the Provo Airport. At first I thought that maybe due to weather the plane landed somewhere else and the cell phones didn’t have any service. I was hopeful and concerned at the same time.

I turned on the TV and the news talked about a plane that had crashed into Utah Lake. At this point I still had hope, but the reality of their death was starting to set in. I immediately drove to Ray’s house and spent some time with his family. I stayed there for several hours and then went to the lake with Ray’s wife. There were many people there in support and concern. Most of the weekend was spent at the lake. A pouring of heatfelt calls and offerings came in immediately. There were people that took care of the various projects, obligations, functions, etc that were not even part of the business, but just cared and wanted to help.

Now, it was Monday morning, and I had a choice to do the radio or not. At this time, I knew that the most productive thing would be to do the radio program. I had been a co-host with Les and Dr. Paul stepped in on that Monday and we moved forward with a heavy heart.

This was a time to prove if we believed in what we talk about or not. If we could offer value to those grieving and honor two men that were not only my partners, but my friends.