Liber Advisors

Hi there, friends!

Imagine going to an aviary and asking to purchase a bird as a pet. The associate brings out a duck. That’s not quite what you had in mind. You ask for another bird. They bring out a parrot. This is closer to what you were thinking, but you’re really interested in a canary. They’re much smaller, quieter, and easier to take care of. Once you got clearer on what you wanted, the associate brings you what you want.

This is a great metaphor concerning how people think about averages in the world of finance. Averages can be calculated in three different ways. They are not created equally. Unfortunately, it is common for advisors to pick and choose which average they show to make it look like they are doing a good job, when, in reality, the numbers just don’t add up.

What are the three averages and how do they affect your financial plan? I have a video explaining this on my YouTube channel. Here's the link.

https://youtu.be/Q8z3IldmVlw?si=IKGzGv1rU7JTQhg5

Imagine that you’re a farmer and are given the option to pay taxes on a bag of seed or on the entirety of your crop. Which would you choose?

This metaphor illustrates the difference between a Traditional IRA vs. a Roth IRA. The Traditional IRA lets you invest and grow your investments without tax complications, but every single cent taken out will be taxed. Whereas a Roth IRA is funded with post tax dollars, but the growth and withdrawals are tax free. Would you rather enjoy your retirement with or without paying taxes on your income?

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