Diving into General Electric Freezing Pension Plan – Episode 335

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[00:01] Welcome to the Prosperity Podcast. On this episode of the Prosperity Podcast, we’re going to be talking about something that happened in the news recently, how GE froze pensions for 20,000 employees. Yes, 20,000. Kim, let’s talk about this. There’s a principle of prosperity that would change all of it. So let’s dive into it. It will delay the reveal of which principle it is, but I bet a lot of our listeners already know the answer. And so let’s focus on what you can do today to make sure that you’re not one of those people in the future. And to those people that are struggling with it, our thoughts go out to you because it’s not an easy situation, and it’s something that I know people are scrambling around

[00:56] about. So why do we want to talk about what you can do today if the bulk of our listeners are not GE pension people? Well, it’s because you don’t want to get yourself into a similar situation. And a lot of listeners may say, well, you know, my company doesn’t offer pension. I mean, which company does these days? They’re far and few between. And yet, frankly, the people that have the bulk of their assets in 401ks and IRAs are potentially in a very similar space. Because while it’s not a company, GE, our government, the U.S. Sam, Uncle Sam, the U.S. government does control, oops, there’s a big reveal, that’s the principle, does control the IRA space. And, you know, I’m not trying to be promoting fear.

[01:55] But the fact is that the government controls IRAs and 401ks and 403Bs 100%. And they could absolutely take action on money in that space that would have the impact of what GE did to its people by freezing its pension plan. Absolutely. And we didn’t even talk about taxes and how most people in the conventional, I should say, typical way, they’re thinking that they will bank on the government giving us lower taxes in the future. And I kind of scratch my head and think, OK, that’s not going to happen. You know what I mean? You know, it’s so funny. Not only does the bulk of our society believe that the lower taxes in the future thing is possible. And I shouldn’t say that. More and more people that I talk to, they don’t believe that they know that

[02:49] that’s not really what’s going to happen. And yet we’ve got a race to the bottom that’s going on in our thought. If it is truly lower tax or tax free income that we’re seeking, I’m so disappointed to see books and conversations out there around tax free income, because truly, if you’re trying to create tax free income, you’re talking about a subsistence lifestyle that is, again, a race to the bottom that no can win. And I am really alarmed by the specific whole life insurance product that people are using to try to create that tax free income, because we’ve got the tax tail wagging the financial dog. We want to build our income up and have as much as possible. And of course, we’re going to do legitimate things to reduce our taxes.

[03:59] But we want to create as much possible income, not as little possible as income. I just don’t understand this race to the bottom mentality. Yeah, it makes no sense whatsoever. And I think, you know, if we go back to looking at that principle of control, that will give us the answers to so many of those questions. So how can we tackle that of looking at the taxes, looking at people trying to take control of their own retirement funds, and then looking at that race to the bottom, how can we package all of these things and create an actionable plan? Well, it’s first of all, understanding that the whole life insurance product is not the problem. Like, that’s fine. Use it for your emergency opportunity fund.

[04:43] That’s awesome. Yes, borrow against it. And when you borrow against it, it is a tax free loan because all loans are tax free. But don’t use it for the creation of income to spend unless you’re in your nineties. If you’re in your nineties, fine. That’s going to work just fine. Then the second aspect is build up even more assets that you can control. In other words, and I’ll tell a quick story here. Let’s not get sucked into the qualified plan arena. So here’s the story. Some millionaires that were on the phone with me yesterday had a meeting with a well-known typical financial advisor. I should say the firm was well-known, like everybody would recognize the name of the firm. And that financial advisor laughed at them when they resisted the idea

[05:36] of contributing to a SEP IRA and literally shamed them about their feelings around giving up control of their money by taking the carrot, which is the deduction that you get today, and then locking that money up into this box called a SEP IRA that the government controls 100% laughed at them. I mean, they said it wasn’t a kind of thing. It was a like really, and then went after their emotions from like a moral standpoint about not doing this SEP IRA. And they already knew that they were not going to do it. They already had been educated enough to realize that it was so much more important that they maintain control over that money. Especially as business owners, business owners absolutely should

[06:28] not be locking money up. Business owners have so much opportunity and potential, and I would include real estate investors in this as well, to do awesome things with their money. And one of those things is not to lock it up in government controlled programs. So if you don’t know what else to do, just leave it sitting cash in the bank. It’s way better until you figure out what to do. And I have all kinds of suggestions. If you really want deductions, reach out to me. If you’re an accredited investor and you want a deduction for the year 2019, I have a solution. If you are an accredited investor and you want income right away, I have a solution. There are solutions to these things that people want that do

[07:11] not give up control. Absolutely. So I want to take a quick pivot on this and we’ve talked about some of the solutions to that, which is really helpful. Now I want to gain some perspective and maybe we can look at different companies and say, what are some warning signs that maybe external the companies or maybe warning signs in your life that say it may be time to shift how you’re handling your money? What are some of those things that you look at? Well, I think the election is one of them, you know, regardless of what political leanings you have, an election year, which is still a ways away, but coming is always going to cause little bumps in the economy. When things have been riding up, up, up, up, up, up, up, up,

[08:06] for a long time, real estate, the stock market, our economy as a whole, up, up, up, up, up for a long, long time. We know that that is not going to last forever. And so there’s a red flag there, just a sign, as you said, that maybe we want to shift how we handle our finances. I think in addition to that, your own situation and so many people, you know, back to our GE crowd, so many people are well aware that their jobs are in flux. I don’t want to say their jobs are in jeopardy because it’s too strong of a word, although it may be accurate for some people. But the job situation in our entire society is in flux. Big companies are hiring, firing those small companies are always at risk for having to shift things.

[08:54] And all of this points to a desire to have more control over the money that we save and work with and have as our responsibility and having control is more responsible than putting money where we can’t control it, can’t use it, can’t use it to create opportunity to have the space to take time to find another job, to have the space to pay first and last month’s rent if that’s your situation or sell one house and buy another or move to a different country or a different state, all of these things beg for money that we control. And so that’s what we should be focused on, building more money that we control. Well, well said. And I think for our listeners, a way to go deeper with that would be to dive

[09:46] into some of the audiobooks, some of the books that Kim has written, additional material that will help you to take control over your finances. Is there a specific book that you would recommend for this episode? Yes, I think that Busting Retirement Lies, Retirement Planning Lies addresses the specific 401k, 403b IRA space the most directly. And yet at the same time, of course, I’m a huge fan of our new Perpetual Wealth book, so I put them both out there and a quick update. The Busting Retirement Planning Lies, of course, has an audio version. Perpetual Wealth is going through a quick update before I record audio. So it’s not quite there yet. And it will be very soon. I shouldn’t say that. It will be a couple of months.

[10:33] That’s not very soon. And I’m guessing it’ll be a couple of months before the audio version of Perpetual Wealth is out there. So hang in there with it. It is at partnersforprosperity.com forward slash perpetual hyphen wealth hyphen book. Thank goodness for show notes. Yes, yes. Thank you for showing us. We’ll make sure to put that in there and make it easy for listeners to grab a copy of that wonderful conversation today on ways that listeners can take control. I think one final thought that I have is that it’s refreshing to hear financial insights that are not trying to take away our control, but they’re trying to reinforce the personal liberties and the control that we can put back in our hands.

[11:17] So thank you for that, Kempton. Absolutely. Thank you for listening to the Prosperity podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.