Wall Street wants your assets - all of them. They even want your liabilities - your mortgage, auto loans, margin accounts, etc. In fact, some Wall Street firms are reported to refer to you as a “Wallet” as opposed to a client.

There is a great fallacy in this thinking. Stocks and bonds are not money. Real estate is not money. Mutual funds are not money. This may seem obvious but the result of the “Asset Myth” is that assets do not necessarily - or even usually - translate into income to support your lifestyle. If you have millions of dollars you might be insulated from lifestyle loss but, if you are like most Americans, even a million or two “invested” is no guarantee of future income. In fact, people are more likely to have a lifestyle of choice when have secure income - regardles of their assets. You need income that does not desert you when you cannot work or you choose not to work. Assets - especially invested assets - are always at risk. (I have one client who came to me because their assets shrank from two million to eight hundred thousand in the aftermath of 9/11.) Borrowed money - especially when borrowed against home equity - imposes a burden on income. Even worse, equity borrowed to buy risky assets (regardless of what some guru or sales rep says) doubles your risk and increases the burden.

An article in yesterday’s Boston Globe sheds some interesting light on this subject. http://www.boston.com/business/personalfinance/articles/2008/01/31/for_most_of_us_the_future_doesnt_hinge_entirely_on_investments/

 www.TheMoneyForLifeBook.com expands the knowledge base of this approach to managing money and offers guidance that is available from only a few advisors in America. Take a few minutes and visit the site to learn what the book has to offer, You’ll never be sorry that you know more - or own more.

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