Strolling along the National Mall, it’s easy to become overwhelmed by an air of American exceptionalism.
From the Smithsonian Museums… past the Washington Monument… and onward to the Lincoln Memorial, there is an unspoken sense of achievement amid the cherry blossoms.
It’s magical, really, and the truth is that you don’t have to be an American to feel the same vibe.
In fact on my latest trip just a few days ago, the Mall resembled something like the United Nations; people of every nationality walked right along with me, soaking it all in.
Yet, among all of that greatness there is a blemish — a structure that just doesn’t seem to fit. At the far end of the Mall stands the Capitol building.
To me, at least, the beautifully domed building seemed dirty, corrupt, and expedient — not at all like the other monuments that dot the Mall.
And you don’t need to be a member of a particular party to feel that way… Right, left, or somewhere in between, over 75% of Americans now disapprove of the business going on within the walls of the once great building.
It’s like the circus came to town and never left; a mockery among greatness.
That bad news is that this is one clown car that never stops running. Burning the midnight oil, these folks don’t rest when it comes to digging into your wallet or taking away your freedoms.
The larger problem, of course, is that they are running out of ways to pay for it all as they spend us into oblivion.
Big Surprise: Your Uncle Sam Needs You
That’s why, along with cap-and-trade and a VAT tax, Congress is considering an attack on your 401(k) as of late, as a juicy new way to keep on spending.
In a nutshell, Congress is planning to force Americans to turn their IRA and 401(k) savings over to the government — in exchange for an annuity-based fixed income stream during their twilight years. They are calling this program Guaranteed Retirement Accounts.
In fact, the groundwork is already being laid. Bloomberg reports:
The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams following a collapse in retiree accounts when the stock market plunged.
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
There is "a tremendous amount of interest in the White House" in retirement-security initiatives, Borzi, who heads the Labor Department’s Employee Benefits Security Administration, said in an interview.
So you see, they just want to save you from yourself again with the promise of a "universal, secure, and adequate retirement system".
(It’s all totally harmless, I swear... )
And while this monumental change is not necessarily imminent, be aware that the plan is gaining inertia as Congress sizes up the $6.3 trillion in retirement assets of working Americans — followed by mandates that may one day ration your own money back to you.
So what’s in this deal for you, you’re wondering? As you might have guessed… it’s not much.
Not only will you lose your coveted 401(k) tax break, but the government guarantee is only a mere 3% return on your investment.
It would be comical if it weren’t so tragic.
A monkey throwing darts at board could earn 3% with his eyes closed.
Retire in Style with Dividend Stocks
That’s why smart investors are beginning to leave this ship of fools behind by building retirement assets that the government can’t touch.
In that regard, dividend stock investments are the safest road to a happy retirement.
However, picking successful dividend paying stocks is not as simple as buying only the stocks with the highest yield. In fact, the stocks with the highest yields are the ones that often trip up investors the most.
Instead, picking winning dividend stocks usually requires finding candidates with two qualities.
#1 They should have a minimal risk of a dividend cut.
#2 There should be a high probability that the dividends will increase while you own the stock.
What’s more, once you receive your dividend payout, there are only two rules to live by if you’re actually serious about building a nest egg you can depend on.
They are:
Reinvest your dividends: When an investor receives dividends, they have two choices. One is to spend it; the other is to immediately take those funds and purchase more stock. Needless to say, the smart investor chooses the latter. Dividend reinvestment programs (commonly known as DRIPs) are an automatic way to build wealth over time.
Remember the Rule of 72: As every income investor knows, compounding is one of the most powerful forces known to man. That’s where the Rule of 72 comes in. The rule says that in order to find the number of years it takes to you double your investment at a given rate, you just divide the yield into 72. For instance, if you are earning a 9% yield on your money, it will double in eight years and roughly triple in thirteen.
That is why seasoned dividend investors know that it’s the tortoise — not the hare — that eventually wins this race. And this, my friends, is what smart retirement investing is all about.
Just don’t try to tell that to folks up on Capitol Hill. They are entirely too busy squandering a great inheritance.
Your bargain-hunting analyst,
Steve Christ, Editor
P.S. If your are ready to take the reins of your own retirement and build true wealth, The Wealth Advisory team has just the plan for you. To learn more about these steady income streams, click here.
