This title has powerful words, but think of the personal financial statistics in North America and it doesn't take much imagination to see that what we've been doing just ain't workin'. This also means that if you have anything to do with the money management industry, you are passing on information that is contributing to the economic numbers that aren't working in western culture. But keep reading. This information is for both advisors and clients.



The ?half truths? that have become accepted as the answers to financial stress are actually creating the problems. And, regardless of your current economic situation, millionaire or in debt up to your eyeballs, the number one stress in most people's lives is financial because of this half information.

Some examples of this are as follows:

Goals. The foundation of the financial industry is to help people reach their goals. Well, who decided the goals, and who does the communicating of the goals, in a meeting of a financial professional and their client? The advisor, of course, is the one who asks a series of questions about common goals while they complete a profile that becomes the basis for their recommendations to the client.

Budget. A word that conjures up feelings of restriction and sacrifice, yet the definition of budget is planned expenditures and a program for financing them. What if instead of trying to fit a lifestyle into an income, an income was structured around a lifestyle? Start with the desired expenses and then figure out how to finance them.

Debt. Good debt. Bad debt. Get out of debt. When you judge the debt and focus on eliminating it, you are missing the point. What was the benefit that was received by using the credit in the first place? If the reward was some lifestyle experiences or accumulation of consumer products, does this tell you that the lifestyle you really want to be living is currently higher than your current income provides? Rather than looking at how to get out of debt and feeling bad because you have debt in the first place, make a goal to create the income required to meet the desired lifestyle which will ultimately result in effective and efficient use of credit and spending that is appropriate for your life priorities.

Retirement. What does age have to do with retirement anyway? The concept of retirement that has been accepted in our society is one of something you do after you leave work. Great, but what it takes to be able to leave work is resources to provide income to pay for your desired lifestyle. If you have income sources that cover your expenses and don't require you to go to work to earn it, then you would be financially independent. And, there are many ways to generate income that doesn't require you to work for it or save a big pot of money to draw on later in life. The concept of saving money so you can stop working is a relatively new concept that just isn't working. The word ?retirement? needs to be replaced with ?financial independence? and has to stop being associated with age and accumulating savings.

Saving money. What are you saving money for? The reason is not to have more money, or to have money in case of an emergency, or to accumulate a pot of gold for the future. You don't want to accumulate money at all - you want the rewards the money will provide. If that's for some future use, then you need the income the savings will provide you. When you focus on accumulating money, the idea of spending it will lead to fear of loss.

Rate of return. If your focus is on saving money, it makes sense that the most important criteria in making financial decisions would be the rate you are paying on debt or receiving on savings. Conventional wisdom would have you believe that the fee you pay on your financial products would be important. But, when you look beyond the accumulation of money to the intended purpose, the rate becomes secondary in importance. Getting a good rate is only half the truth.

The whole truth is more than common goals, a restricted budget, getting out of debt, planning for retirement, saving money and getting a good return on that money.