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Janine Bolon: Hi, welcome to this week’s three-minute money tip. This is Janine Bolon. I have with me today, Tom Perrone. He is going to spend 3 minutes talking about “The Secret of Creating Wealth”. No, this is not a get-rich-quick scheme if that’s what you’re interested in. Tom is all about leveraging risk with stability and how to do that, not only for business owners but for people in their personal lives, that therefore eliminating a lot of the stress of life due to the inconsistencies of the Stock Market. If you haven’t heard of Tom, I highly recommend you go out and buy his book “Unlocking Your Business DNA”. He also has a podcast called “Building and Protecting Your Business Wealth”. It is worth the time. I highly recommend you touch base with them.
So for today though, Tom is going to talk to us about The Secret of Creating Wealth. Tom, you’ve got 3 minutes. Go.
Tom Perrone: It’s actually very simple. Creating wealth works hand-in-hand with your 60/40 plan, which is basically a structure where you have the discipline to put money away. My suggestion to young clients is before they spend money or do anything, they put a certain amount away long-term with no thought of touching that money. I don’t care where they put it. But they need to put it away because money doesn’t fall off the trees. You have to put the money away. Those people that are disciplined will do it very well and they’ll create the money. One of the things I’ve seen young people do, I have five kids. So, I’ve seen them. They’ve been taught. You’ve saved the money and you’ll have it. Leave it alone. So, the discipline is number one.
Tom: The other part of that is what are you going to.. where are you going to put your money? There’s a lot of vehicles out there that have safety nets to whom we… you don’t have to take much risk and they’ll grow consistently. What I’ve seen over the years is a lot of people not really thinking through what they’re doing. Putting money into risk associated, in other words, all their money to risk associated areas. All of a sudden you have every 5 or 10 years a downside. So, don’t put all your money into risk. You need to kind of put the discipline money in a safety vehicle that’s going to grow. Things like Insurance, see these when they come back up. You can do annuities work very well long term.
Tom: The other thing I would suggest to create wealth on a safety basis is if you’re in the market and you’re getting close to retirement, you might consider moving the growth of what you’ve been growing with into more safety, if not, into more guarantee accounts. Because you’ve worked hard to earn that. You don’t want to lose it overnight and let your contributions take the risk on. For example, we may have clients that are in their 60s, 62. We may move a lot of their money into real guaranteed stuff from their 401Ks or IRAs and then have them contribute into the risk area with the smaller dollars every year. Those are just ways of creating the wealth and preserving it.
Tom: The other way of preserving wealth if you’re a small business owner, is looking to Executive Compensation Programs because you can get these things that have a lot of guarantees to them. You can have your company fund large amounts of money and shifted out of your company to you on a very tax-effective basis. Discipline is the key. Safety is number two.
Janine: And this works for a large level of people and if you have any questions for Tom, he is very generous with his time. He’ll be glad to help you. See what is in your highest and best good. He’s somebody that you can totally trust. I know I trust him myself and so definitely give him a look-see. Tom Perrone, he not only has a podcast “Building and Protecting Your Business Wealth”. He also has a book, “Unlocking Your Business DNA”. Go out and get yourself a copy.
Today, this is Janine Bolon with a three-minute money tip and we will chat with you again next week.
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