From the category archives:

Universal Life Insurance

The Power of OPM: How to Leverage Debt Safely & Wisely

January 10, 2010

Podcast: Download (23.0MB)

missed fortune super blog itunes 150x150 The Power of OPM: How to Leverage Debt Safely & WiselyThis week Doug Andrew discussed the following:

Upcoming Complimentary Webinar

Attend our free 90-minute webinar live over the Internet this coming Tuesday, January 12th at 11:00 a.m. pacific (12:00 p.m. mountain, 1:00 p.m. central, 2:00 p.m. eastern), and again at 6:30 p.m. pacific (7:30 mountain, 8:30 central, 9:30 eastern).

The topic is “Successful Equity Management.” You’ll learn how to maintain liquidity and safety of principal while earning a healthy, tax-free rate of return that outpaces inflation.

Register now by calling 888-76-Radio (888-767-2346). If operators are busy, please call again.

All attendees receive a bonus hardcover copy of Last Chance Millionaire, Doug Andrew’s New York Times best-selling book.

Investors Losing Big with Small Returns

The New York Times recently published an article entitled “At Tiny Rates, Saving Money Costs Investors,” which reports that “millions of Americans are paying a high price for a safe place to put their money: extremely low interest rates on savings accounts and certificates of deposit.”

This is particularly detrimental to the elderly and others on fixed incomes. As the article reports:

“Indeed, after fees are subtracted, inflation is accounted for and taxes are paid, many investors in C.D.’s, government bonds and savings and money market accounts are losing money.”

Of course, the traditional financial services industry will tell you that people need to take higher risks to get better returns.

As the article states, “People who rely on income from such investments for support, however, are being forced to consider new options.”

Unfortunately, most of the options people are considering are misguided and damaging.

Missed Fortune, however, provides the best option: Maximum-funded, tax-advantaged life insurance contracts which provide liquidity, guarantee safety of principle, while still producing a healthy rate of return that outpaces inflation.

Furthermore, with the right equity management strategies many elderly and Baby Boomers can discover financial security with their existing assets.

The Power of Equity Management

While people scramble to recover from the recession and explore new ways to build their retirement funds, many of them are sitting on the answer, but are completely unaware.

That answer is home equity.

Before the recession there was $19 trillion dollars of residential real estate, with about $10 trillion sitting as idle equity and no loans attached. After the recession that dropped to about $17 trillion, with at least $8 trillion unencumbered.

About 60% of this total belongs to Baby Boomers, which represents $4.8 trillion in lazy, idle equity.

However, many people are fearful to leverage equity because they think it increases their risk. While this can be true in certain circumstances, Missed Fortune provides a way for you to decrease your risk by leveraging your equity.

It’s exactly how banks operate. If we could educate more Americans to do this we could turn the economy around without federal stimulus spending.

Register now for our next webinar to learn how to become your own bank and borrow to conserve, not consume. You’ll learn how to safely leverage your home equity, maintain liquidity, and increase your rates of return.

Bonus Missed Fortune E-Book: Baby Boomer Blunders

The average Baby Boomer has less than $50,000 accumulated for retirement (which means many have less than that), primarily due to bad habits and having money invested in the wrong places where economic downturns can diminish their nest egg.

Download this e-book now at www.babyboomerblunders.com.

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How Long Will Your Nest Egg Last?

November 3, 2009

When it comes to your retirement money, we’ve recently talked about why it’s far better to accumulate your money tax-free, versus taxed-as-earned.

We’ve illustrated how $1 dollar doubling every period for 20 periods becomes $1 million if it grows tax-free — but if it accumulates taxed-as-earned you only reach to $72,000 in a 25% marginal tax bracket after 20 periods, or worse, $27,000 in a 33% marginal tax bracket (which many Americans find themselves in with federal and state income tax combined).

This proves why it’s critical to take advantage of one of the three miracles of wealth accumulation: tax-favored accumulation that keeps your principal safe.

You deserve to have your retirement dollars safe, and you deserve to have them accumulating the most interest possible, without the drain of taxes. There’s something else you deserve — to withdraw your money tax-free.

Here’s why:

nestegg copy 300x278 How Long Will Your Nest Egg Last?Let’s say you have accumulated a $1 million nest egg, and you would like to live on $100,000 a year to enjoy a comfortable retirement.

If your retirement dollars are taxed upon withdrawal (as they are with most traditional plans), you would have to withdraw $150,000 a year to net $100,000.

That’s right, if you’re like most Americans in a 33% marginal tax bracket, you would have to pull out $150,000 and pay about one-third of it on taxes to live on $100,000 a year.

Do you know how long your $1 million nest egg would last under these circumstances?

Get ready — just 11 years. Wouldn’t you rather have the peace of mind knowing that you can enjoy your retirement income for as long as you live, whether that’s until your 60s, 70s, 80s, 90s or beyond?

What about when you pass away? Did you know that the average IRA and 401(k) is only worth about $.22 to $.28 on the dollar as it passes on to heirs? Wouldn’t you rather have 100-cent dollars to pass along?

There is just one retirement savings vehicle that:

  1. Accumulates tax-free
  2. Can be withdrawn tax-free (even before age 59 ½ – without penalty)
  3. Transfers to your heirs tax-free when you pass away

Find out how to grow and protect your retirement money so you can maximize your future.

Isn’t it time you became wealthy?

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How Older Parents Can Assure Their Children a Secure Retirement

June 11, 2009

As an older parent (I’m now age 57), I’m grateful that my children still listen to their dad’s advice.

universal life insurance How Older Parents Can Assure Their Children a Secure Retirement I’ve always counseled my children to prepare for the future financially by maximum-funding a tax-advantaged life insurance contract on themselves.

It’s the only investment vehicle that accumulates money tax-free,  then allows you to access your money tax-free, and when you ultimately die, it even blossoms in value and transfers income-tax free.

No other investment does that. I own several universal life insurance contracts (both indexed and fixed), and I have received an average internal rate of return of 7-8 percent on most (that’s cash on cash -after the cost of the insurance is deducted).

Sure, some years I have only been credited the minimum guaranteed interest rate of 1, 2, 3 or 4 percent. But other years, I have earned as much as 21 percent, as the interest rate credited was linked to whatever the S&P 500 did that year — without my money at risk in the market.

Recently I’ve begun to teach my children they can take this strategy a step farther — and I can help.

Let me tell you of the advice that I’m now giving my children.

“Kids, what if I could tell you which two teams would be playing in the Super Bowl next year, and what the final score will be? While I can’t predict that, I can predict something else with fairly good accuracy: 80% of  us will live to age 65; 60% to age 75; but only 30% to age 85; and less than 10% of us will live beyond age 90.”

Average life expectancy for a 60-yr old is about 22 years.

In facing the reality of the years I have left, I’ve come upon a revolutionary way to help my children assure their own financial security — especially down the road when I “check out.”

In doing the math, it became obvious that if my middle-age children were the owners and beneficiaries of a life insurance policy on my life for, let’s say $1 million, it would be better for them to deposit premiums of $500 a month into that policy, rather than into a Roth IRA or 401(k).

Why? Because an IRA or 401(k) would need to earn an average yearly rate of return of 9.4% for 30 years for $500 invested per month to grow to $1 million.

But, if I “go” anytime in the next 30 years or so, by using a life insurance policy, they would immediately receive a nice $1 million tax-free nest egg!

Hence, I’m insisting each of my children own a life insurance policy on my life as part of their overall retirement planning process.

The miracle of compound interest and tax-favored accumulation of money is great. But nothing beats the power of safe, positive leverage. I’m thrilled I can leverage my life to leave a legacy for my kids. You might consider the same.

Doug Andrew

photo by Leonid Mamchenkov

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Why Defer Taxes If Taxes Are Going Up?

June 7, 2009

Podcast: Download (22.9MB)

missed fortune super blog itunes 150x150 Why Defer Taxes If Taxes Are Going Up? Why defer taxes if taxes are going up?

Did you miss this week’s show? Doug Andrew discussed some of the following topics:

I’m really concerned about the rate that the national debt is increasing.  Two things are highly predictable:  1) Your money will never be worth more than it is today 2) Your current tax bracket is likely the lowest bracket you will ever be in.

If we know taxes are going up in the future, do you want to have a financial strategy that defers taxes?  Qualified plans such as 401k(s) and IRAs defer taxes.  Is that the right strategy for you?

An engineer who was in my office this week really gets it.  He understands that a maximum funded insurance contract is a far better alternative.  He is protected and doesn’t  lose money when the market goes down but gets competitive rates of return when the market is going up.

Attend our event live over the internet on Tuesday June 9th: Don’t miss your chance to understand how to protect your money during this economic crisis but get competitive rate of returns during the good years. This strategy is called indexing and you need to know all about it. Call 888-76-Radio (888-767-2346) to register for either the 11am or 6pm Pacific session.

New FREE Missed Fortune E-book: Baby Boomer Blunders. THE PROBLEM? The average Baby Boomer has less than $50,000 accumulated for retirement (which means many have less than that), primarily due to bad habits and having money invested in the wrong places where economic downturns can diminish their nest egg. Download at www.babyboomerblunders.com

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CBS 60 Minutes on the 401(k) Fallout

April 23, 2009

Why have we used insurance instead of traditional “conservative” investments for cash accumulation?

Watch this video 60 Minutes produced called the 401(k) Fallout. Need we say more?

If you are getting this in email or RSS and can’t see the video, just click on the header to go to the blog to view it.

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An Unnecessary Tidal Wave of Investment Wreckage

April 17, 2009

The economic crisis around us has created a massive tidal wave of wreckage.  Among those that have been impacted, the wallets and retirement plans of the American public has been some of the hardest hit.

While the major discussion among those following “conservative” advice is “How much have you lost?” or “Should I pull my money out of the market or leave it”, our conservative advice is the same as it has always been: Put your savings away in a specifically designed account, a maximum-funded, properly-structured insurance contract.

This type of policy can be one of the best ways to save for retirement and rainy days, as evidenced by how these policies have performed during this down economy.  There is no 40-60% loss!

target An Unnecessary Tidal Wave of Investment WreckageCan you miss and hit a target at the exact same time?  Yes, if we’re talking about a recent article called “It Doesn’t Have to Hurt“, published in Newsweek.

The author, Richard Thaler, hits the mark about consumer spending habits but misses the mark regarding cash accumulation vehicles for retirement.

With easy access to credit and undisciplined habits, the savings rate of the American public has dropped like a ton of bricks.  Consumer debt is at a 50 year all time high and savings accounts are at a 50 year all time low.

“It wasn’t so long ago that Americans were good savers.  From 1950 to the early 1980s the saving rate was a satisfactory 8 to 10 percent.  But even then, Americans never showed much willpower to stashing away cash.  The most important ways households saved were in pensions, cash-value life insurance, and by paying off their home mortgage.  What these have in common is that the saving occurs automatically and effortlessly.”

For years we’ve experienced these benefits with our clients.  Once an insurance policy is in place, a simple automatic draft can be set up to transfer funds from checking or savings accounts directly to your insurance account.

This savings habit becomes out of sight and out of mind as money each month is allocated toward cash accumulation and retirement savings.

Richard Thaler’s article goes wrong as he begins to focus on retirement investment vehicles.  As he gives his opinion how American’s can get back on track, he gives the following advice.

“In getting us back on the savings track there are two basic principles of behavioral economics to remember.  First, make savings automatic.  Second, put savings away in a specially designed account, such as an IRA or 401(k).”

To his first point, we agree whole heartily.  Creating budgets and a habit of saving is monumental to long-term financial success.  His second point however, does not ring true, and we’re not the only ones.

Just take a quick look at the comments that have been left on the Newsweek website about this article.

Many American’s who have followed the typical investment advice have lost anywhere from 40-60% of their savings.  Maybe all these big rich executives and investment companies don’t get it.

YOUR CLIENTS LOST 40-60%!

As we said in Missed Fortune 101 before these economic downturns ever reared their ugly face, “all the dogs are barking up the wrong tree doesn’t make it the right one!”

The advice in this article and promoted by so many other “experts” is to “save more so you can invest more, so you can have more.”  Instead of a formula for success it has really been a recipe for disaster.

It could be written “save more so you can invest more, so you can lose a lot.”

The tragedy is that if the vehicle for cash accumulation would have been a properly structured maximum funded insurance contract, the many that have had their retirement savings cut in half, would still have their retirement monies.

Our advice is the same as it has always been.  Put your serious cash away in a specifically designed account, a maximum funded insurance contract that is properly structured.  This type of policy can be one of the best ways to save for retirement and rainy days.

Oh, and by the way, our clients, who have followed these strategies, haven’t lost one dime in their insurance contracts due to this economic crisis.  Stop rolling the dice with your retirement funds and instead put a solution in place, a conservative one.

Photo by kokuziu

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“Sound” Retirement Guidance

April 2, 2009

A popular investment company recently sent out a newsletter claiming good and sound retirement guidance.  They asked a good basic question.  “Has the economy changed your retirement plans?”

They ask this question because they want to get you to come in to get your retirement goals back on track.  This company is not alone.  Many of popular investment companies are advertising for new clients right now.

The sad part about these efforts is that the vehicles they will suggest you use in your “planning” are traditional tools.  Savings accounts for minimal risk and short range goals, for longer time periods, diversify your portfolio among various stocks and mutual funds within your 401(k) and IRA.

financial advice Sound Retirement GuidanceHasn’t everyone woke up to the fact that these products have failed.  Saving accounts have trouble competing with inflation, especially with fears about inflation due to devaluing of the dollar.

Many economists are screaming that you can’t print a trillion dollars and infuse it into the economy without consequences, one of which is inflation.

401(k)s and IRAs have also failed miserably because of lack of safety.  It’s not uncommon to speak with clients who have lost 40%, 50% or even 60% of their retirement savings.

The sad part is that they did exactly what so many “experts” said to do.  Save, save, save, and put your money into specific products that would give great returns and be there for your “rainy days” of retirement.

Well folks, the rain has come, and the money was washed away.  I don’t know about you, but I’m thinking, this didn’t work out so well.

The Missed Fortune strategies were created on this premise.  Rains come!  And when they come you need safety of principal.

In other words, your serious money needs to be put in safe places, but also have a potential of a good return when the market is up.

This is exactly why we like Equity Indexed Universal Life, when structured the right way.  When the market is good, you can participate.  When the market is bad, you don’t participate (at least not at the level as everyone else).

I like having my cake and eating it too – good returns potential, much more than CDs or savings accounts, and lower risk, much less than the popular investments.

Right now, those who had baked a cake based on traditional advice have found it was cooked with rotten eggs.

Photo by laughlin

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Shift your Focus during Troubling Times

October 6, 2008

While observing the recent turmoil in the financial markets, watching the political debates, and seeing unrest around the world, it has been interesting to see how Americans — and the entire world community — react.

I have had several radio interviews during the past few weeks in which the interviewers always wanted to know my advice for dealing with the current troubling state of affairs.

My best and simplest advice applies to life in general, and it might surprise some people. I would urge everyone to stop worrying specific events, losses and difficulties. Rather, focus on being grateful.

Whenever there is “bad news,” I try to focus on the positive. It doesn’t do any good to complain. Complaining attracts negative thoughts and people.

Gratitude allows your confidence, faith and hope to be nurtured and grow. When you exercise faith and hope, you’ll discover that new opportunities will emerge, and you will open yourself to the best possible consequences.

It is impossible for faith and fear to occupy the human heart simultaneously. Whenever I am feeling fearful about anything, I take it as a signal that I need to exercise more faith. Sure enough, when I do so, fear is dispelled.

We are constantly being bombarded with bad news through the media. I have worked to train myself to see bad circumstances differently — when something arises that most of the world would view as a threat, I see it as an opportunity.

Try doing this whenever a crisis happens in your life. Ask yourself, “What do I know from experience that will help me, and others, deal with this crisis?”

You will be energized. You will see yourself focusing on what matters most — on your relationships, on creating value, on new opportunities, on progress, on who you can be, and on what you can do for others. You will forget about what’s missing and begin focusing on what’s available.

As a result, you will find out that the world rewards usefulness, and people will compensate you in some form for your wisdom and advice.

For example, as a result of coming through my own financial crisis in my early years, for more than three decades I have advised people to separate the equity from their home to maintain liquidity, safety of principle, and earn a rate of return.

I have also recommended that people avoid putting put their serious cash — home equity, IRAs, 401(k)s and other retirement funds — into variable investments like the stock market, but rather in maximum-funded, tax-advantaged equity-indexed life insurance contracts with highly-rated insurance companies.

Our clients who have done this have not lost any of the principal on their money during the recent severe downturn in the real estate or stock markets, because their money was not trapped in those places.

They continue to have liquid cash available for emergencies and can readily handle a higher mortgage payment, a temporary job loss or any other curve ball that this economy may throw at them.

Because of this, I continually receive comments and letters of gratitude for the advice given, and clients have been referring their friends and relatives to our firm.

Our business continues to thrive during these otherwise tenuous times.

Why? Because we have been able to create new opportunities to help people overcome their greatest fears, seize their greatest opportunities, and harness their greatest strengths. I am grateful for the trust and confidence that people have placed in us.

As Zig Ziglar has always said, “Help enough other people get what they want, and you will have everything in life that you want.”

I wish you all the best as you look for opportunities in difficult circumstances, dispel fear with faith, and maximize your financial potential through strategic planning.

Doug Andrew

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