Dreamer vs. Doer – The Great Separator

by Darren Hardy

One thing separates the dreamer and the doer.

It also separates the wishful from the wealthy.

Two people can have the same capabilities,
same hope and same aspiration,
but have radically different outcomes.

One acted and the other did not.

ACTION is the great separator.

Right now, there are opportunities, ideas, dreams or aspirations in your life that you know you SHOULD act on, you WANT to act on, but you are afraid to do so.

Oh, you might be excusing your lack of action by your telling yourself you don’t know what to do, how to do it or if it will work out.

I can tell you firsthand, nothing I have ever accomplished had I done before.

I have been in wildly different industries: from the direct selling of environmental products, to real estate, to television, to educational software, to Internet media, to publishing and more.

None of these industries was I educated or trained to be in;


I had no experience in any of them previously—I just jumped in and started. And the outcomes evolved in ways well beyond what I could have planned for or envisioned at the beginning, meaning all the paralysis by analysis is useless anyway because it will never work out as you plan.

The key is to just get started.

Someone said to me recently, “You don’t have to see the whole staircase to take the first step.” That’s the key—just take the first step. Then when you do, take another. One at a time—one after another.

Before you know it you will have risen to the top of an industry, maybe heights you could never have allowed yourself to dream of and set goals for, simply because you jumped in and got started.

That’s all it takes, ACTION.

So tell me, What opportunity or goal are you finally going to jump in and go for? Need to encourage someone to just jump in and get going? Forward them this blog.


Message to Washington: Stop Scaring America

by Terry Savage

A spending cut of $85 billion is just 2% of our $3.6 Trillion in annual Federal spending.  Every American family with a job has just taken a 2% cut — as payroll taxes rose in January.  We survived — and Congress can too.

Especially since they’re getting our 2% to spend!

When American families face higher taxes, or higher gasoline prices, we make adjustments to our other spending.  We can’t “print” the money.

As reality sets in that there might be some limits to our ability to borrow and spend, Washington is insulting the American people with stories of impending collapse of government services because they need to cut 2% from their increased spending.

Here’s a roadmap to the “March Madness” that is upon us if Congress — both parties — don’t start talking about a serious deal that includes the entire budget:


The “sequester” — a 10 percent budget cut in “discretionary” spending is upon us — with dire warnings of cutbacks in unemployment benefits, “head start” programs for children, air traffic controllers and TSA workers at airports. On the plus side, there will be fewer IRS agents!

The picture is painted in such stark terms because both parties agreed that they needed this discipline to force themselves into taking action with regard to the budget, an idea endorsed and signed into law by President Barack Obama.


Speaking of budgets, the United States hasn’t had an official budget for more than three years. Instead we are funding our government with a set of “continuing resolutions” that merely authorize ongoing deficit spending — with no oversight or judgment of which programs might be appropriate to cut.

In mid-March the president will send his budget message to Congress, a delay of about one month from the traditional budget message. Once again, it is likely that nothing gets done on a budget agreement.

Government shutdown

And without a budget deal, the government must shut down. That’s the next potential crisis coming at the end of March.

We lived through a shutdown back in 1995, when the first budget stalemate took effect under President Bill Clinton. The federal government shut down, starting in mid-November, and continuing through the winter holiday break, until everyone came back to their senses, and back to work — on Jan. 6, 1996. The world didn’t end. People even started wondering what we needed some parts of government for, anyway.

If we don’t have a budget — or agreement on another continuing resolution — the government will shut down March 27.

Spring break

Yes, put spring break on the calendar, too. From March 25 through April 7, our elected representatives will go home to celebrate Easter and Passover — right in the midst of this likely “no-budget-so-we’re-shutting-down-the-government” crisis. Just like they did in December for the holidays, in the midst of the debt ceiling crisis.

Congress will come back to “work” the week before all of us must pay our taxes on April 15. Funny how they force us to meet deadlines, while they “kick the can . . . .”

No budget, no pay

Maybe this time it will be different. Realizing that their joint committees, and self-imposed deadlines were not forcing them to do their jobs, both parties passed the “No Budget, No Pay” bill, which the President signed.

This new, and hopefully, persuasive law was passed as part of the negotiations over extending the debt ceiling. And, speaking of the debt ceiling, that’s the next oncoming crisis — again.

The debt ceiling

The No Budget, No Debt Act simply pushed the Debt Ceiling issue to May 18th , when Congress must consider it again. In the meantime, any new Treasury borrowings above the current $16.4 Trillion will push the country above its official limit. No word on how they’d deal with that issue, if Congress fails to lift the debt ceiling again. And no word on how the Treasury would stave off default to its creditors if the ceiling isn’t increased.

And so March Madness is but a prelude to another crazy spring and summer in Washington, D.C. How much of this can Americans take, without totally destroying respect for our system?

Does anyone seriously believe that Washington couldn’t find a sensible $85 billion to cut out of a $3.6 trillion government spending plan?

Somehow the American family manages to cope, to do more with less money in their pockets. But government will have more money in their pockets — from the tax increase they’ve taken from us.

We know how to set priorities. Why can’t government learn that lesson? It’s because they have no process for talking to each other about actual spending plans.

We will have our own March Madness if Congress can’t find a 2 percent budget cut — as every American family must. And that’s The Savage Truth.

Develop Warrior-like Courage

by Darren Hardy

I was saddened to learn that Debbie Ford, an international bestselling author (1M+ books in 32 languages) and personal transformation expert passed away on Sunday night.

Debbie’s book, The Dark Side of the Light Chasers is still known as groundbreaking, pioneering work in emotional and spiritual education.

I interviewed Debbie only a couple months ago.
Maybe one of her last.

The theme of our conversation was Building Confidence and Self-Esteem.

This was distributed only to a private client group, but in honor of Debbie, her work and her legacy, I’d like to share that interview with all of you.

Debbie describes how to develop warrior-like courage in yourself.

Click to listen or ‘right-click’ and Save As to download:
SUCCESS Interview with Debbie Ford, November 2012

During the interview Debbie gives a simple formula to cultivate, as she describes, warrior-like courage in yourself.
1) Write down the areas of your life you aren’t happy with right now.
2) Write down why.
3) Write down the vision you have for those areas of your life. In other words, what would make each of those areas excellent in your eyes.
And then I will add…
4) What three things can you do, starting this week, to begin the process of realizing those visions? What can you do to enact change so you don’t wallow or stay stuck in complaint. We want to turn complaint into changes that become conquests.

A quick look at Debbie’s work:

Here you will find a tribute site for Debbie: http://www.rememberingdebbieford.com/

The Fed is Destroying Retirement Plans!

by Terry Savage

The Federal Reserve is trying to save the economy – but it is killing retirees’ financial plans.  This prolonged period of low interest rates has been devastating to those who planned to live on their interest income.  And for those approaching retirement, it means you may need much more money to afford retirement.

Chicago-based Morningstar, the largest provider of 401(k) managed accounts with more than 800,000 participants, has just announced it is changing its retirement modeling program because of the Fed’s actions.   And whether you’re just in the “saving for retirement” stage or the “withdrawal planning” stage – or in the midst of actually trying to live on your savings – you might want to reconsider your plans, too!

Taking Money Out

How much can you withdraw from your retirement accounts every year and not run out of money before you run out of time?  That’s the overwhelming question facing every retiree – and those planning to retire.

The whole question is made far more difficult by the low interest rate environment of the past few years.  While the Fed pushes rates down to try to get the economy going, those who planned to live on their interest earnings are devastated.

Real interest rates are actually negative when you take into account the impact of inflation.  And inflation for seniors — which is heavily weighted toward medical care, and property taxes, and food and energy bills – is even greater than the inflation numbers measured by the traditional Consumer Price Index (CPI).  It’s fair to say that for seniors, savings invested conservatively in 10-year Treasuries is producing a real loss of buying power each year.

And that is the real issue here:  How much can you withdraw every month, or year, to keep your standard of living? And if low rates force you to withdraw more, how much sooner will you run out of money?

The Traditional Rule

Financial planners have sophisticated computer models to tell you how to diversify your investments – and how much you can withdraw on a regular basis.  The process is called Monte Carlo modeling.  It takes into account historical returns of investments, such as stocks and bonds.

Monte Carlo goes beyond using an average return for investments.  That would be dangerous, because averages mask great extremes.  Instead this computerized modeling takes into account the small, but existing possibility of extreme movements in markets.  That’s the kind of action we’ve seen in the past decade in the stock market.

The simple rule derived from this kind of modeling has always said that with a well-balanced investment portfolio that contains both stocks and bonds:  You can withdraw 4 percent a year from your principal and have a 90 percent probability that you won’t outlive your money.

Since Monte Carlo modeling takes into account the potential of wide swings in the stock market, retirees and their planners have felt confident in using this rule to plan their retirement investments and withdrawals – even during recent wild swings in the stock market.  Those kinds of stock movements have happened before.  And as we’ve seen, the market ultimately returns to its norms.

You could live with volatility in stocks as part of your portfolio – because you were getting a steady return from your conservative bonds.  But what happens when bond yields go to extremes – as they have today – extreme lows?  What happens when bonds are not yielding anywhere near their historic models, and the low yields persist over a period of years?

The impact could be devastating on a retiree’s withdrawal strategy – causing him or her to run out of money far more quickly than expected.

That’s the scientific explanation of the anxiety that seniors are facing today.

Changing the Model

Now the experts are considering changing their models to adjust for this unprecedented and prolonged Fed intervention in the bond market.   Morningstar says that a 4 percent withdrawal rate from a balanced portfolio, once considered a secure way to plan, could now lead to a 50/50 possibility of running out of money too soon.

Instead David Blanchett, head of retirement research for Morningstar’s Investment Management division,  suggests that a retiree who wants a high degree of certainty over not outlasting his or her money should reduce the withdrawal rate from 4 percent a year to only 2.8 percent annually.   And to get the same amount of money to withdraw each year, that means you would need 43 percent more savings before retirement!

Blanchett is not alone in his findings.  Well known financial planner Joe Tomlinson has just published a sophisticated research paper in Advisor Perspectives, Inc., suggesting that  the immediate impact of current low bond yields will crush most retirement withdrawal plans.  He notes that most planning software includes an average historical real (after-inflation) return of 2.4 percent for intermediate term government bonds.  But the current real return, as measured by yields on Treasury Inflation Protected Securities (TIPS) is a negative – 0.73 percent.  The impact of wrong assumptions exponentially impacts the likelihood of the plan’s success.  [http://advisorperspectives.com/newsletters13/Predicting_Asset_Class_Returns-Recommendations_for_Financial_Planners.php]

What to Do Now

No matter what your stage of retirement planning – or retirement living, this is the time to re-think your numbers.  If the Fed keeps rates low even for another few years, you have to think about working longer, saving more, earning some extra money in retirement, or living on less.

What you should NOT do is take on more risk!  Trying to get higher yields on the bond portion of your investments by purchasing riskier bonds, or locking your money up for longer time periods, could be even more devastating when the Fed loses control – and all the money the Fed has already created produces inflation, which will bring higher rates.

Yes, these are tough times.  And according to the financial models, times will get even tougher for retirees living on fixed incomes.  It’s time for AARP to take the Fed to task for its low-rate policies.  And that’s The Savage Truth.