Best use of $5k annual premium for retirement cash?

[DHK]

If you want people to view you as more than a guy trying to push a big life insurance policy on them you should take the step and become a fully license and trained investment professional.

And I think that "investment advisers" who are simply licensed to put their client's money at risk and can lose up to 50% of their accounts in two months (September 2008 to November 2008)... just because "they're fiduciaries"... should be criminal. At least, that's how *I* felt during that time.

There is more opportunity in avoiding the losses than chasing for gains.

"Rule #1: Don't lose money." Warren Buffett

https://www.crestmontresearch.com/docs/Stock-Impact-Losses.pdf

I've had more than one CFP contact me asking if they can use some of the content I put in this video I created over 3 years ago.

 

[Golfnut2112]

Warren buffet did not become rich investing in life insurance. He got rich in the market and I’m sure he had some loses. There are tactical money managers that will move you out of the market if they need to. All of the tactical managers I use were out of the market since mid November and moved back in the market in January.

 

[DHK]

Yes, that's obvious. However, I have yet to see a financial advisor or planner make someone rich.

Robert Kiyosaki says there are 3 kinds of financial plans:
1. Safe & Secure
2. Comfortable
3. Rich

We can help a lot of people with #1 & #2. But for "rich" people, the advice is different. We help to preserve the wealth and the value of their business, intellectual capital, real estate, etc. They make themselves rich, and advisors are there to help preserve and pass on that wealth in a tax-efficient manner.

Advisors don't make people rich. I'd love to see one example of where an advisor made someone rich.

https://davidkinderfinancial.wixsit...s-Your-Financial-Planning-Pyramid-UPSIDE-DOWN

 

[Golfnut2112]

Lol I do both life insurance and securities and I can tell without a doubt my clients have build substantially more wealth investing in securities, and that’s just in the last 20 years with two major corrections. You really need to get your hands on a past performance hypo from a fund company to help you understand. Go back 20 years, or for more convincing go back 30. I am not saying life insurance is bad, but I rather be invested in securities. I really wonder how many people would be promoting life insurance and the ultimate savings tool if it paid the rep 1% per year of the cash value.

 

[Allen Trent]

Alan read your post you said WL has no on going cost of insurance. I was just quoting you.
And again you run to things that are irrelevant to avoid the issue. You now also decide to skip over the fact the Mortality costs are part of every premium paid and are part of every dividend paid and The guaranteed mortality cost of the underlying policy is not at all reflected in the illustrations you use to sell the product. Please show me an illustration where you used only the guaranteed maximum mortality. Please have a WL company any company show their maximum mortality used to produce the guaranteed premium. You Can't because they won't. You are using current mortality assumption and current dividend assumptions that are based on unobtainable investment returns

So now please show me the WL product that has positive cash value by year 5 ,how about year 10

You are Correct, those were the exact words I typed. However, I meant to state that ongoing COI doesn't come into play as a component that can change my contractual premium. The cost was baked into the base contract up front to guarantee worst case that cash equals face at 100 if No dividend is ever created. ULs/IULs guaranteed COI don't offer that guarantee. Again, not bad, but misunderstood by almost all clients & a good number of agents

I will get you a 27k per yr case a client converted in the last 6 months with 7k in the base WL & 20k in annual PUAR. He asked for it after seeing a max funded IUL he didn't love because of the non guaranteed.

I would also like to see the IUL you say has a surrender value that is cash flow positive in yr 2 or 4.

 

[DHK]

Build more wealth = a higher level of being comfortable. That's not "rich". Just an elevated level of plan #2.

Rich is ambition. Rich is building an enterprise. Rich is having their own direction. Rich is creating or building something of their own. Rich is creating synergy where there was none before. Rich is creating something from nothing.

Warren Buffett did all that. I can assure you that it's a RARE advisor that can help their clients to be rich... through securities and insurance. At least with insurance, there's liquidity provisions that can be leveraged for an enterprise or other investment. With securities, you can leverage through margin... but I wouldn't necessarily recommend that.

Advisors don't make their clients rich. They can help preserve and protect a rich person's wealth. They can help others maintain and grow their wealth - sometimes faster than inflation... but they don't make their clients rich.

 

[Allen Trent]

Alan read your post you said WL has no on going cost of insurance. I was just quoting you.
And again you run to things that are irrelevant to avoid the issue. You now also decide to skip over the fact the Mortality costs are part of every premium paid and are part of every dividend paid and The guaranteed mortality cost of the underlying policy is not at all reflected in the illustrations you use to sell the product. Please show me an illustration where you used only the guaranteed maximum mortality. Please have a WL company any company show their maximum mortality used to produce the guaranteed premium. You Can't because they won't. You are using current mortality assumption and current dividend assumptions that are based on unobtainable investment returns

So now please show me the WL product that has positive cash value by year 5 ,how about year 10

attached is the term conversion where the client chose base WL of 7k & annual PUAR of $19450. he did this without UW & will have almost $600k more face amount in year 10 than the term policy face amount he converted

was shown IUL also, but this client chose the WL for whatever reason he & his wife decided. as you can see, the PUAR doesn't have an 8% load on page 3. if it did, there is no way the PUAR fund would already be net positive by year 1. if client decided to walk away in year 6, it is near break even. if he instead decided to elect reduced paid up, it would start out as $771k paid up coverage that would increase from that point forward when Dividends buy more PUAR

again, not everyones cup of tea, but it is a tool that this client chose because he wanted more on the guaranteed side.

I hold 6 & 63 licenses, so I don't have a preference to force someone in 1 direction. I actually likely saved this client money on his solo 401k by telling him to get rid of his fee only planner that was charging him 1% for AUM merely to have him in passive index funds. saved himself about .9% a year on his & his wifes $500k managing his own passive index funds with online broker. his fee only planner had made about $40k the last 8-10 years while the client held the same passive index funds the entire time.

But, yeah, the life insurance commission guy who made about $6k 1 time on this WL is the bad guy compared to the fiduciary upstanding guy that made 40k looking out for the clients best interest.

send me that IUL that is break even surrender value in year 2 or 4.

 

[Golfnut2112]

Build more wealth = a higher level of being comfortable. That's not "rich". Just an elevated level of plan #2.

Rich is ambition. Rich is building an enterprise. Rich is having their own direction. Rich is creating or building something of their own. Rich is creating synergy where there was none before. Rich is creating something from nothing.

Warren Buffett did all that. I can assure you that it's a RARE advisor that can help their clients to be rich... through securities and insurance. At least with insurance, there's liquidity provisions that can be leveraged for an enterprise or other investment. With securities, you can leverage through margin... but I wouldn't necessarily recommend that.

Advisors don't make their clients rich. They can help preserve and protect a rich person's wealth. They can help others maintain and grow their wealth - sometimes faster than inflation... but they don't make their clients rich.

What do you mean when you say insurance can be leveraged and a security can’t? I’m not trying to be confrontational I really don’t know what you mean. If someone has $50000 of cash value they can loan or withdrawal what they need and the cash value and death benefit both decrease by the amount withdrawn. If it was a loan they pay interest to the insurance company each year until the loan is paid off. If you have a security you just liquidate what you need and pay your taxes.

 

[DHK]

I was referring to margin loans on allowable securities. Obviously you can liquidate a security and one can cancel a life insurance policy.

But I think a better strategy is to have both going at the same time. Use your money and have the original amount growing as well. The more obvious problem with margin loans is margin calls, should the value of securities drop below the allowed amount and you'd have to come up with the difference within, I believe, 3 days (it's been a while). And since the value of securities is largely out of our hands, it's a far more risky strategy.

Fixed life insurance doesn't have that problem because the cash values never decrease (other than costs of insurance or loan interest not paid out of pocket).

 

[Golfnut2112]

Still not sure what you mean. If you have a life policy with $50000 cash value and a mutual fund worth $50000 and you need $25000 you can withdrawal it. Not sure what you mean about margins and your cash value does decrease. Bottom line you will have $25000 available under either option.