Selling Life Insurance...

[James]

Obviously we have some very confused people or I'm not being all that clear? The point of the home/house, is just an example to grap someone's attention, as in the saying, "if what you think is true in reality isn't true" has a specific meaning. Having a house paid off (unless there is extending circumstances) in most cases is really an urban myth, you simply don't find it often. When you do find it, several times at least in my experience I'll find someone in their 50's that does in fact have a paid off house or near paid off. Yet they have little or no savings, now can you explain to me how they are so well off since their house is paid off? In fact you can not in any reasonable manner suggest such a thing! In fact they fell into the 21st Century financial idiocy!

In fact, if these people don't act and act quickly a positive such as Appreciation of their property in fact becomes a negative, an actual threat that may force them out of their home. We're seeing it actually play out from coast to coast.

 

[padthaiforlunch]

The paradigm is simple, look at the cost of living and not the lifestyle! Its late, I hope I was able to post this in some proper manner but, in a nutshell this is the beginning of the plan. Next, the various mortgages available to them, financing of that new car or boat is a great place to start, not the home.

Not sure I get what you're saying here. Borrow against the boat?

 

[James]

Not sure I get what you're saying here. Borrow against the boat?

No, I'm gonna have them finance it themselves as in paying themselves the interest and not an outside financial institution. That interest will create a nice little retirement fund! Now positioning them to be able to do that is the paradigm!

I'm quickly finding that this idea isn't that hard to sell at all! Yet, I'm at a great disadvantage since I'm serving middle america, much of IBC and COW has a preset disposition towards Tax savings, or the Home Mortgage Deduction, most middle american households can not take advantage of the HMD. That is basically for the upper middle class and HWC's.

 

[djs]

Exactly how many licensed investment advisors would you like me to refer to you?

I think you missed my point. If done properly, there is nothing unethical about what you are suggesting. My issue is that I've personally seen far to many people recommend this type of thing with what I feel is an improper recommendation. The person making the recommendation was making the recommendation without enough fact finding up front, and simply to make a commission. I've seen a lot of this with mortgage brokers pushing to refinance homes, and putting individuals into loans they shouldn't have been in, simply because they paid better commissions. At the same time, I know mortgage brokers who are very above board, very ethical, and really talk with the client to figure out what is in the clients best interest.

Now, I know you are not taking this from a mortgage brokers perspective, but, I've seen many other industries (even licensed financial advisors) suggest pulling money out of a persons home, without taking the clients needs in proper perspective.

Heck, I even thought about doing it. Pull money out of my house at 8%, invest at 30%. What's wrong with that? Well, if it works, nothing. Many people like having the financial security of equity in their home, so that if something goes wrong, they are not out on the street.

Again, I agree with your basic point of in general, it is a better idea to be out of debt, but if debt is necessary, doing it in the lowest cost way is the best way. There is nothing unethical or illegal about this. From that point on though, a slippery slope can come up quickly.

Dan

 

[djs]

No, I'm gonna have them finance it themselves as in paying themselves the interest and not an outside financial institution. That interest will create a nice little retirement fund! Now positioning them to be able to do that is the paradigm!

I'm quickly finding that this idea isn't that hard to sell at all! Yet, I'm at a great disadvantage since I'm serving middle america, much of IBC and COW has a preset disposition towards Tax savings, or the Home Mortgage Deduction, most middle american households can not take advantage of the HMD. That is basically for the upper middle class and HWC's.

I've quickly lost track of this thread. I'm not able to put the pieces together.

- How does someone take a debt they have (the boat) and turn that around so they finance it themselves? Or are you talking in the abstract here, that if they want to buy a boat, they save the money first?
- Why can't middle class homeowners take advantage of the home mortgage deduction? I know lots that do. Or are you saying that in your area, the middle class average home / average mortgage doesn't get them past the standard deduction? That would be a good problem to have.

I guess I'm an example person. Can you spell out this boat a bit more?

Dan

 

[James]

I've quickly lost track of this thread. I'm not able to put the pieces together.

- How does someone take a debt they have (the boat) and turn that around so they finance it themselves? Or are you talking in the abstract here, that if they want to buy a boat, they save the money first?
- Why can't middle class homeowners take advantage of the home mortgage deduction? I know lots that do. Or are you saying that in your area, the middle class average home / average mortgage doesn't get them past the standard deduction? That would be a good problem to have.

I guess I'm an example person. Can you spell out this boat a bit more?

Dan

This is basically IBC, as far as the self financing, yes this takes time depending upon what they have. This really hit me as I was sitting accross the table of Mr and Mrs Sixpack with the husband waffling at the cost of a Blend Product I had in front of him. I ask him about his bassboat and he looked, well like I was going to come back with "If you can afford that?" but, of course I didn't! Simply ask how he was going to finance the new boat. Which open up a very good discussion, since I have employed this and low and behold it works!

Believe it or not, not all middle class Joe Sixpacks are as you describe them, irresponsible people. In fact many of them are quite responsible with assets! It is amazing if they see value in something exactly how much of those assets can be moved to a position to help them. As far as the Bass Boat or Auto, more then likely Auto is more common. First off we look at the mortgage, can we save anything there, things like the obvious, are they going to move in the next 2-3 years, if I'm with a client that came from my individual prospecting I look for homeowners of around 3-5 years. Do we need to jump start their retirement assets, as they may be approaching 50 with no real significant savings, outside of a letter from an African Prince.

Then you got the HELOC, can we now shift the emergency funds? This can be anywhere from 5-30 grand. Is there any small orphan accounts floating around that will be spent if not placed in a larger plan. Can we save them money in there P&C coverage. Can we pay the CC off with access to home equity if we went that way and so on and on. I'm finding on the cases I've work on 20-40 grand with no real pain can be gathered up within a quick time span. Of course depending, the plan calls for several years of ramping up. Yet though, if they can place this amount quickly in and, they want to purchase a car now or a boat now or soon you simply go the 36 plus month finance (which you should always do) free from interest and payments! You know, that deal GMC uses all the time, just have to pay the bill 1 month before it expires or you'll be charge a lot of deferred interest!

Then yes they have to pay themselves back just as they were writing a check to GMC. Except now that money goes into an account that will finance the next purchase instead of using a signature loan or credit card.

This part of the plan is nothing more then IBC, a great system. Yet many of the practitioners believe strong that IBC and other programs need that all mighty Home Tax Deduction, which isn't pratical for much of middle america.

 

[djs]

Believe it or not, not all middle class Joe Sixpacks are as you describe them, irresponsible people.

Okay, I think we're on the same page, but I didn't lump everyone into the irresponsible category. I simply pointed out that some people will simply run their bills back up again.

In general, most homeowners have some degree of responsbility, the degree varies from low to very high, but normally, you can't be totally irresponsible and buy a home.

Many people, myself included, run up credit due to a series of events. I started with plenty of savings, but, I needed more. I understand this happening, and in fact, having a credit card for emergencies is a good thing.

Dan

 

[James]

Okay, I think we're on the same page, but I didn't lump everyone into the irresponsible category. I simply pointed out that some people will simply run their bills back up again.

In general, most homeowners have some degree of responsbility, the degree varies from low to very high, but normally, you can't be totally irresponsible and buy a home.

Many people, myself included, run up credit due to a series of events. I started with plenty of savings, but, I needed more. I understand this happening, and in fact, having a credit card for emergencies is a good thing.

Dan

LOL, don't give me a credit card, my wife knows this, my mother told her that like my daddy, we can't handle credit cards. Do good in savings and budgeting etc etc, but give us a credit card and, with out a doubt we nickel and dime ourselves to death!

Gotta know your weaknesses!

 

[J.R.]

This is basically IBC, as far as the self financing, yes this takes time depending upon what they have. This really hit me as I was sitting accross the table of Mr and Mrs Sixpack with the husband waffling at the cost of a Blend Product I had in front of him. I ask him about his bassboat and he looked, well like I was going to come back with "If you can afford that?" but, of course I didn't! Simply ask how he was going to finance the new boat. Which open up a very good discussion, since I have employed this and low and behold it works!

Believe it or not, not all middle class Joe Sixpacks are as you describe them, irresponsible people. In fact many of them are quite responsible with assets! It is amazing if they see value in something exactly how much of those assets can be moved to a position to help them. As far as the Bass Boat or Auto, more then likely Auto is more common. First off we look at the mortgage, can we save anything there, things like the obvious, are they going to move in the next 2-3 years, if I'm with a client that came from my individual prospecting I look for homeowners of around 3-5 years. Do we need to jump start their retirement assets, as they may be approaching 50 with no real significant savings, outside of a letter from an African Prince.

Then you got the HELOC, can we now shift the emergency funds? This can be anywhere from 5-30 grand. Is there any small orphan accounts floating around that will be spent if not placed in a larger plan. Can we save them money in there P&C coverage. Can we pay the CC off with access to home equity if we went that way and so on and on. I'm finding on the cases I've work on 20-40 grand with no real pain can be gathered up within a quick time span. Of course depending, the plan calls for several years of ramping up. Yet though, if they can place this amount quickly in and, they want to purchase a car now or a boat now or soon you simply go the 36 plus month finance (which you should always do) free from interest and payments! You know, that deal GMC uses all the time, just have to pay the bill 1 month before it expires or you'll be charge a lot of deferred interest!

Then yes they have to pay themselves back just as they were writing a check to GMC. Except now that money goes into an account that will finance the next purchase instead of using a signature loan or credit card.

This part of the plan is nothing more then IBC, a great system. Yet many of the practitioners believe strong that IBC and other programs need that all mighty Home Tax Deduction, which isn't pratical for much of middle america.

I like this approach James. I'll have to buy Nash's book
The issues you hit on are exactly the topics I've thought about. Going into a household and conducting a complete money makeover.

I'm curious, when you incorporate IBC, is you goal to sell them a life insurance policy and get them sold on IBC by looking at their health, auto, home, etc. etc.??

 

[Guest]

I'm curious, when you incorporate IBC,

What is "IBC"?

Al