Epic Real Estate Investing - The 4 Imminent Financial Blows Facing Your Children | Financial Freedom Friday

Episode Date: June 20, 2014

Have you prepared your children for these 4 imminent financial blows? Are you even prepared? It's Financial Freedom Friday! ------------------------- Download Matt's free real estate investing course "How to Do Deals | No Money Required" at FreeRealEstateInvestingCourse.com or text FreeCourse to 55678 "Click" what interests you most:  Education Properties Income Coaching Learn more about your ad choices. Visit megaphone.fm/adchoices

It's time for Financial Freedom Friday with Matt Terrio. Hey, financial times, they are different than they were in the past, aren't they? Indeed. And they continue to change at a very rapid clip as well. So preparing your children to meet the biggest financial impacts they will see later in life is imperative if you want them to experience a life on their terms. And as they go through life, they're going to have to deal with four significant financial blows. So they better be prepared. Financial blow number one, the extended golden years.

You know, it used to be 65 was considered old, retired, and, you know, and on your way out. Now we've got 80-year-olds running marathons, multiple marathons, and the concept of old is decades beyond what it used to be. The old for your children, our children, maybe 90, 95, 110. I don't know, we don't know. But with that extended life comes a new onslaught of financial responsibilities. You know, most Americans today, they rely on programs like Social Security and Medicare to assist them in their expensive elder years. But those programs are losing liquidity, and they're losing it fast. I mean, what will our children rely on to support them in their golden years?

Financial blow number two, insurmountable debt. Now, I'm sure you've heard of the power of compounding interest, right? That's no secret. It's truly a force to be reckoned with. But what's scary is the dark side of that coin. The oppression of compounding debt. The U.S. national debt has risen over $11 trillion in just 12 years, and it shows no sign of slowing. Our children, they're going to be the ones to face the global financial turmoil as the nations, you know, they try to get together and they attempt to manage the weight of the compounding debt and the compounding interest on that debt.

Financial blow number three, hyperinflation, the new depression. You see, there are two causes of financial depressions, and they both happened recently. They both happened in the 20th century, once here in America and once in Germany. America's depression was caused by not printing enough money, and Germany's was a result of printing too much money. So here's why that's important to understand, is because today America prints as much money as it wants at seemingly no cost. However, the price will pay for it may very well be greater than any number that we can think of. So hyperinflation, what is it? It's a period of rapid inflation that leaves a country's currency practically worthless.

I mean, the only ones who survive in these cases are those who produce and control commodities that are essential to the livelihood of the population, such as energy, food, shelter, like housing. The earners and the savers, those are the ones that get burned when hyperinflation hits. If the U.S. continues to print money like it is, our kids very well may see a state of hyperinflation. They'll need to be better equipped to deal with that scenario than with the previous generation's advice of go get a good job and save your money for a rainy day. I mean, no amount of money will be able to shelter them from a rainstorm like that. They're going to need a financial education. Financial blow number four, taxes, or a tax hike specifically.

You know, every time the central bank prints more money, two things happen. One, taxes rise, and two, inflation increases. And as the three things that I've already mentioned, as those come to pass, the government will have no choice but to raise taxes. And not by a little bit, buy a lot a bit. In order to stabilize the financial health of future generations, parents need to teach their children early on who pays the most in taxes and why. If you're not familiar with Robert Kiyosaki's cash flow quadrant,

now is the time to make that introduction. And this is what it looks like right here. And the letters in the four quadrant stand for employee, small business or self-employed. And then the B stands for big business. That's 500 employees or more. And the I stands for investor. Now, everyone resides in at least one of these four quadrants,

sometimes more than one, but at least one. And the dilemma lies in that those on the left side of the quadrant. That represents 90 plus percent of the population. They pay the most in taxes. And here's a general income tax breakdown, just to give you an idea. And it's general, but this is what it looks like. Employees, they pay 40% of their income in taxes. The self-employed pay 60% of their income in taxes.

Now, business owners pay just 20% of their income in taxes. And investors, they pay essentially 0% of their income goes to taxes. So do you see why it's imperative that our children have a robust financial education so that they learn how to function on the right side of the quadrant? You know, anyone, anyone and everyone, no excuses, anyone has the ability to reside on the B or the I sections of that quadrant. But they'll need the right training, they're going to need the right financial education to do it. And they're not going to get either one of those in school. So what are you doing to prepare your children for their future? Are you even prepared for your own future?

Because the reason I ask is it's impossible to truly teach something we don't even understand ourselves. So may I recommend a free course in real estate investing as a place to start? Go to free real estate investing course.com and take the first step of preparing your child for their future. I'm Matt Terrio of Epic Real Estate and I'll see you next week on another episode of Financial Freedom Friday. of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.