Money
How To Address Ideologues Cheerfully in 2012…
January 9, 2012 | Author dragonfly
If you would overcome the banal attacks of non-thinking ideologues…
you must arm yourself with both knowledge and wisdom. Knowledge is your sword; wisdom your armor and your shield.
Behold—WISDOM, wrapped often in sarcasm and humor…
1. In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress. — John Adams
2. If you don’t read the newspaper you are uninformed, if you do read the newspaper you are misinformed.– Mark Twain
3. Suppose you were an idiot. And suppose you were a member of Congress. But then I repeat myself.– Mark Twain
4. I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.– Winston Churchill
5. A government which robs Peter to pay Paul can always depend on the support of Paul.–George Bernard Shaw
6. A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.– G. Gordon Liddy
7. Democracy must be something more than two wolves and a sheep voting on what to have for dinner.– James Bovard, Civil Libertarian (1994)
8. Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries.– Douglas Casey, Classmate of Bill Clinton at Georgetown University
9. Giving money and power to government is like giving whiskey and car keys to teenage boys.– P.J. O’Rourke, Civil Libertarian
10. Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.– Frederic Bastiat, French economist(1801-1850)
11. Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.– Ronald Reagan (1986)
12. I don’t make jokes. I just watch the government and report the facts.– Will Rogers
13. If you think health care is expensive now, wait until you see what it costs when it’s free!– P.J. O’Rourke
14. In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other.– Voltaire (1764)
15. Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you!– Pericles (430 B.C.)
16. No man’s life, liberty, or property is safe while the legislature is in session.– Mark Twain (1866)
17. Talk is cheap…except when Congress does it.– Anonymous
18. The government is like a baby’s alimentary canal, with a happy appetite at one end and no responsibility at the other.– Ronald Reagan
19. The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.– Winston Churchill
20. The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.– Mark Twain
21. The ultimate result of shielding men from the effects of folly is to fill the world with fools.– Herbert Spencer, English Philosopher (1820-1903)
22. There is no distinctly Native American criminal class…save Congress.– Mark Twain
23. What this country needs are more unemployed politicians.– Edward Langley, Artist (1928-1995)
24. A government big enough to give you everything you want, is strong enough to take everything you have.– Thomas Jefferson
25. We hang the petty thieves and appoint the great ones to public office.– Aesop
FIVE SENTENCES; Infinite Wisdom – by Adrain Rogers
- “Friend, you cannot legislate the poor into freedom by legislating the wealthy out of freedom. And what one person receives without working for, another person must work for without receiving. The government can’t give to anybody anything that the government does not first take from somebody. And when half of the people get the idea they don’t have to work because the other half’s going to take care of them, and when the other half get the idea it does no good to work because somebody’s going to get what I work for. That, dear friend, is about the end of any nation.”
Individual Liberties Create and Nurture Free Markets
October 3, 2011 | Author dragonfly
How an Unconscious Conspiracy Stole Our Individual Liberties, Restricted Free Markets
How That Theft Created and Burst the Real Estate Bubble
Preamble…
The ASSertion is (OOPS! Keyboard malfunction), “The conventional wisdom says the 1999-2006 residential real estate “bubble” in the U.S. and the subsequent collapse of global financial markets were caused by a failure of the free market.”
That raises the question, “What’s wrong with that assertion?”
That is, of course a loaded question. The question assumes that something is wrong with the ‘assertion’ and invites only answers that agree with that conclusion. However, since I believe the ‘assertion’ is invalid, a loaded question is OK with me.
The Basic Argument…
My unequivocal answer to the question is, “Individual liberties create and nurture free markets. Free markets are an outcome and cause nothing unless they have been manipulated to reduce or eliminate individual liberties.” – The Author
Free Markets emerge and prosper only when government, financial structures, and social institutions protect and preserve individual liberties. A summary review of historical precedent – Mao’s China, Castro’s Cuba, or the USSR – and current events – Iran, North Korea, and countries in South America and Africa – confirm this statement.
A basic knowledge, understanding, and appreciation of the repression of individual liberties by the British, which gave birth to United States of America as an economic powerhouse, demonstrate clearly that individual liberties create and nurture free markets.
However, the practical answer to the question – “What caused the ‘bubble’ and the collapse?” – emerges when we look at the personal economies of Americans during the last thirty years. My conviction is that the culprit in the collapse is the compromising of individual liberties by dysfunctional government, financial structures, and social institutions.
An Unconscious conspiracy…
Since 1974, there has been an unconscious conspiracy to limit the individual liberties of Americans. Big government, big unions, big business – especially financial businesses, big non-governmental bureaucracies, and all of their minions – I call them Behemoths – knowingly and/or unknowingly embraced the aim of this unconscious conspiracy.
Some Behemoths, like the current administration in Washington, do so in the name of “change.” Others like the US Congress, which falls short educationally and intellectually when it comes to economics and historical context, do so out of ignorance, greed for money and power, and their inability to comprehend basic economic principles and historic precedent – not to mention their lack of common sense.
What Benjamin Franklin wrote 250 years ago or so is still true today. When you give up control of your money, “you give to another power over your liberty.”
All of the Behemoths in the unconscious conspiracy share a single aim. They all want to gain control of the individual American citizen’s money – income, savings, home equity, legacy, etc. The unprecedented success of this unconscious conspiracy reduced or, in some regards, eliminated individual liberties. That’s what created the bubble and the collapse of 2006.
Success for Behemoths = Liberty Lost for Americans…
Unfortunately, the Behemoths have had and continue to have a great deal of success:
- The various government Behemoths have increased their take of Americans’ wages and savings through multiple levels of taxation…
- payroll withholding (city, county, state, federal)
- social security
- Medicare
- sales
- property
- gasoline
- tobacco
- alcohol
- telephone
- natural gas
- electric
- heating oil
- cell phones
- corporate taxes passed on to consumers
- and on, and on…
- Financial Behemoths – investment companies, mutual funds, retirement plans, stock insurance companies, banks – have tightened their grip on the money Americans rely on to deal with life’s surprisingly unsurprising surprises, their future income needs and their legacies.
- Mortgage lenders, credit card companies, big box stores’ charge cards, auto lenders, same-as-cash businesses such as furniture stores, cosmetic medical and dental practices, and other business that promote every conceivable credit opportunity have lured Americans into a financial swamp that restricts their liberty by relieving them of control of their money.
The Steady Erosion of Individual Liberty…
ERISA passed in 1974. The Behemoths held ERISA out (among other things) as salvation for working Americans whose employers couldn’t or wouldn’t provide them with a pension plan. ERISA intended – we were told – to give individuals control of their retirement destinies.
The effect of ERISA was, and remains, quite the opposite. Financial Behemoths today control trillions of dollars that working Americans rely on for retirement income. This is retirement income that Americans believe they will not have to work for and they cannot outlive.
When the markets in which those retirement funds are invested crash, the minions of the Behemoths exhort the Americans they have misled (they promise only that they promise nothing) to “stay the course” and leave their money under the control of the same folks who just decimated the retirees’ incomes.
The true outcome of ERISA is that the money that Americans give the Behemoths to put aside in IRAs, 401(k)s, and their equivalents is ending up in speculative securities that the Behemoths characterize as investments.
The entire retirement income scheme that ERISA established is like a casino that financial Behemoths – especially the IRS – own and operate. The Behemoths are the house. They always profit from the money that Americans gamble there. Meanwhile, Americans are at the mercy of the gaming-table markets that hypothetically but unrealistically promise to deliver secure life-long income.
Worst of all, their future-income is at the mercy of the future-whims of the IRS.
The Coach – A.L. Williams
1977 introduced America to The Coach, A. L. Williams. The Coach bears a distinct resemblance to Ali Hakim – the traveling salesman in Oklahoma! – who has the skill to convince even in the absence of evidence.
The Coach developed the idea that Americans should reallocate their money – real money that the individual American controlled – from whole life insurance contracts and other traditional savings vehicles
- and use some of it to buy expensive term life insurance (that pays high commissions)
- and use the rest of their money to buy mutual funds owned and operated by Behemoths (these also pay high commissions).
With all those commissions floating around and a sexy but entirely unproven idea, The Coach easily recruited sales reps. However, most of his recruits only worked part time to supplement their full time employment, lacked significant financial or economic training and had little or no experience as advisors. Like so many since, they believed they had found the holy grail of financial success. They, like their master and mentor, believed (and still do to this day) that the flawed model The Coach developed would work in practice the way it appeared to work in theory.
Regardless of the credentials these advisors claim, the model didn’t, doesn’t, and won’t work. (If only Dave Ramsey and Suzie Orman would figure that out…) The result is that millions, perhaps billions of American dollars drifted out of the secure savings programs, which individuals controlled and that offered – surprise – security, and into the accounts of Behemoths.
A. L. Williams’ business diminished the liberty of the American public accordingly.
When E. F. Hutton Speaks…
In 1979, E. F. Hutton introduced the insurance industry and the American public to another new and sexy approach to saving and insuring – universal life insurance. Just imagine, you can deposit your insurance premiums in an insurance policy and hope to earn high returns on the portion of the premium that the insurance company doesn’t need to support the life insurance contract. It’s The Coach’s “buy term and invest the difference” strategy repackaged.
Countless millions of American dollars flowed out of secure savings programs – whole life insurance policies in particular – and into universal life insurance policies. The results of this flawed model still plague America today. Over the past three decades, universal life insurance has contributed to the de-mutualization of companies like Prudential, MetLife, Principal Financial Group, and John Hancock. In addition, universal life was a major contributing factor in the failure in 1991 of Executive Life of California and of Mutual Benefit Life (the oldest insurer in America).
In the experiment that is universal life insurance, the money of American families “saved” in universal life policies simply disappeared into thin air when the policies did not fulfill their promises.
The loss of money means the loss of liberty.
Where the Transfer of Money Leads…
During the ‘70s and ‘80s, universal life insurance, A. L. Williams, and the Behemoth bandwagon-followers that adopted the product, the strategy, or both managed to suck a huge portion of the savings out of American pocketbooks. When the savings ran out, the Behemoths discovered that they could convince Americans to sacrifice not only their savings but also their incomes.
They found two equally effective ways to do that.
First, the Behemoths convinced Americans that they could have everything they needed and anything they wanted as long as they had enough credit. They accomplished this with an onslaught of advertising and promotion for credit schemes ranging from simple credit card solicitations to inculcating the belief that lots of credit created superior credit ratings and that allowed for more credit, better ratings and a circular spiral into a dungeon of debt.
The Financial Behemoths also convinced Americans that the best place for their money was in investments and – worse – that giving the IRS control of the future value of those investments was an equally good idea. Defined contribution retirement plans multiplied like fleas on a stray dog.
Liberty lost.
Then there was ’99 through ’06.
“Show Me the Money…”
Here comes the bubble.
The Disorganized Conspirator Behemoths had just about decimated the savings accounts of Americans. They had encumbered American paychecks with debt payments and retirement plan contributions. Where, the Behemoths wondered, would they find more money for their greedily bulging accounts?
Enter dozens of pseudo financial gurus with “just-like-the-wealthy-do-it ” schemes to transform American homeowners’ equity into money for the accounts of the Behemoths.
- Doug Andrews created the Missed Fortune Myth that relied on steadily increasing home values (OOPS!) and year upon year actual – not average – market returns of seven or eight percent in “investment grade” equity indexed universal life insurance policies (OOPS! Again.)
- Mortgage lenders like Money Tree and others encouraged homeowners to refinance in order to solve their money problems when they got “in debt up to [their] eyeballs”.
- Other mortgage hucksters promoted buying homes to “fix and flip” using the equity in a residence as seed money.
- The Federal government’s Fannie and Freddie, relying on deeply flawed conventional wisdom, burdened Americans with mortgages and payments on homes they couldn’t afford. (I call this “idiot compassion” – a phrase adapted from Chogyam Trungpa Rinpoche.)
- And, the list goes on…even today VP Joe is telling us “Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said, “The answer is yes, that’s what I’m telling you.”
What makes it worse, the Behemoths themselves believed their gospel. They bundled and traded 125% debt to equity loans as if they were gold. They built and fortified their Jericho but to no avail. “The walls came tumbling down.”
“And the Beat Goes On…”
Free markets did not fail. The failure lies with the Behemoths that are supposed to protect the liberties of individual citizens and the free markets that arise from those liberties. The failure manifests the deceptive, subtle, and persistent erosion of those individual liberties by the Behemoths for their own gain but in the name of free markets. Today, the Behemoth of Behemoths, the Federal Government, is openly promoting the transfer, reduction, and elimination of individual rights in the name of bailouts, health care, ecology, union jobs, and saving GM.
The bubble that burst in 2006 has allowed a much more pernicious cancer on free markets than the Unconscious Conspiracy that initially caused the failure.
“Without individual liberties, there are no free markets. Period.” – The Author
Startling New Scientific Discovery Proves Economic Theory
September 1, 2011 | Author dragonfly
Startling New Scientific Discovery
How Dinosaurs Were Made Extinct
by Paul A. Cantor on August 26, 2011
Benjamin Franklin and Jonathan Swift were both masters of satire. Paul A. Cantor rivals their clever insights in the article linked above. Paul is the Clifton Waller Barrett Professor of English at the University of Virginia. He is the coauthor, with Stephen Cox, of Literature and the Economics of Liberty. See his interview in the Austrian Economics Newsletter.
Paul writes–in part…
…these theories conveniently conjure up various subjects of left-wing paranoia — the grand antithetical fears of global warming and nuclear winter — and they all insidiously suggest remarkable new roles for the federal government, like protecting us from comets and other objects from outer space.
Are even the dinosaurs lining up against the cause of the free market these days? Well I for one, as a student of Austrian economics, have a more plausible explanation: the extinction of the dinosaurs must have been the result of government intervention in the marketplace. Though my speculations have met with some skepticism from the paleontological establishment, I am finally prepared to go public with my findings after a visit to Montana this past summer which allowed me to examine the fossil record firsthand and to reconstruct the true story of the rise and fall of the dinosaurs.
You may be laughing or crying after reading this article depending on your outlook. If you understand basic Austrian economics you may be laughing and crying at the same time.
Keynesian VS Austrian Economics
Keynesian economists of today–perhaps contravening the tenets and intent of Keynes himself–believe that the state should control the economy and manage wealth. Austrians conversely believe that free enterprise should control the
Lifeboats For Your Money…
August 8, 2011 | Author dragonfly
Lifeboats for Your Money Predictions Revisited…
In January of 2008 and again in March of 2009 I posted the following warning. I didn’t emphasize that the safest place for your lifeboat money is in participating whole life insurance policies from mutual insurance companies. As you read this reminder, be aware that participating whole life insurance policies continue to deliver guaranteed cash value increases and non-guaranteed dividends as promised and that no American is losing a single penny in their whole life insurance accounts.
A Titanic Failure
In January, 2008 I wrote an entry in my blog about the failure of the White Star Line to add enough lifeboats to the Titanic because they believed it unsinkable. It’s worth re-reading today as the Titanic of the US economy is compromised by the arrogance and greed of the financial Behemoths and the gluttonous appetite for power by the Dolts in DC – the US Congress, the US Presidents of the past 16 years and the misguided ambition of the current US President for a “change” to the unknown…at least to you and me it’s unknown.
America’s Problem Is A Problem for Americans
The problem for the typical American is the possible failure of the good ship Economy – especially the financial structure that supports it. The media is not trumpeting the nature and outcome of such a failure, nor is the faltering financial community keeping us honestly informed. Instead they feed us the pabulum advice…
-
- stay the course,
- don’t make decisions now,
- wait for the market to settle,
- buy now when the market is down so you can capture the gain on the upswing
- and on, and on, and on…
BUNK, BUNK, BUNK, BUNK, AND MORE BUNK!
You were told the same thing when the market was at 12,000, 11,000, 10,000, 9,000, 8,000, and today. That advice has created immense losses for Americans – TRILLIONS OF DOLLARS OF LOSSES.
Then There’s Common Sense
What if, on the other hand, you had done what common sense, and a few advisors that are not controlled by the Behemoths, recommended as early as July of 2007? What if you had moved your money into a lifeboat when all the signs pointed at the sinking of the good ship Economy? You would have lost nothing.
Of course, if the market had surged at that time you might be disappointed that you didn’t hang on for the gain. However, that is like folding a losing Texas Hold’em blind only to discover that the next three cards would have made it a winner.
An Example
In the current situation, had you opted to move your money from “the market” to the lifeboat of a credit union, money market account, CDs, whole life insurance [my choice], or any other financial product with guarantees, you would not have lost a penny – not one single penny – and would have earned fair market interest rates the entire time. Want proof?
$100,000.00 left in the “market” in July of 2007 is worth less than $50,000.00 today.
$100,000.00 moved into a lifeboat in July of 2007 at 3% is worth over $105,000.00 today.
That difference of over $55,000.00. 3% doesn’t look so bad from this perspective.
Nobody Told Me
The advice of the Behemoths and their Minions aims to bolster the balance sheets and income statements of–believe it–the Behemoths and their Minions, not yours. Their advice aims to keep their ship afloat at your expense. It is bad advice for you and me and for 99.9% of Americans.
Hell, Warren Buffett – America’s iconic investment guru – lost money last year. So did T. Boone Pickens and many other notable investors. The Wonks on Wall Street [I now call it Dull Street] – the same folks the Behemoths quote to entice you to “invest” [aka gamble] with them - have failed across the board.
It Gets Worse
The Dolts in DC have spent over a trillion dollars in a disorganized and undisciplined attempt to right the good ship Economy. They have committed almost two trillion dollars more of our money since. They have failed so far. We all want success in this regard. However, the plenitude of pork that permeates the spending plans of these programs indicates discomfort for “We the People” and contentment for the cronies of the Dolts in DC.
Take Refuge
If you haven’t taken refuge in a lifeboat yet, it’s time. If the market grows dramatically and rapidly you may miss a part of the upsurge. That’s very unlikely. If there’s hope to repair the massive breach in the hull of the good ship Economy, it will likely have to be put in dry-dock for a period of time. In the short-term it is better to have a small guaranteed gain than the possibility of no gain or significant losses. For all practical purposes there is no long-term until the good ship Economy returns to full functioning capability.
“Relying on the long run for investment decisions is essentially relying on trend lines. But how certain can we be that trends are destiny? Trends bend. Trends break. Today, in fact, we have no idea where any trend lines might begin or end, or even whether any trend lines still exist.”
Posted Feb 27 2009, 10:16 PM
by John Mauldin
Investors Insight
If your advisor continues to encourage you to keep bailing while the ship is sinking and sturdy lifeboats are waiting, fire him or her. S/he is obviously not looking out for you.
Common Sense – Again
The common sense approach to creating wealth and managing your personal economy does not depend on the success or failure of other people and self-serving financial institutions. It relies on you and other like-minded Americans taking control of the money that flows into your life to assure your success, not the success of some Behemoth, banker or politician.
by Jeffrey Reeves, MA, EUREKONOMIST
Personal Finance Relies On Four Pillars
July 16, 2011 | Author jr
Posted in Money, Personal Financial Management, The Four Pillars, Whole Life Insurance | 
Tags: debt, EUREKONOMICS, financial, financial advice, financial plan, financial planning, jeffrey reeves, legacy, Money, personal finance, Personal Financial Management, personal financial plans, ready cash, Retirement, The Four Pillars, Whole Life Insurance | 
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“It’s Only Money.” Makes No Sense in Family Finances
June 2, 2011 | Author Dr Agon Fly
“It’s only money…” has no place in decisions about family finances
How many times have you heard someone say, “Let’s buy it! It’s only fifty bucks. We’ll save twenty-five dollars!”
Good Grief! There is no “only” when you are dealing with your personal finances. The automobile salesperson might want you to believe that the car you are considering is only $15,000 and, since the sticker price is $20,000, you are saving $5,000.
Savings are only savings when you put them into an account that you control.
If, instead of spending it, you put your $15,000 in your family bank–regardless of the form that bank takes–it would compound to nearly $65,000.00 in 30 years at 5%. If you add the $5,000 you saved, you’d have improved your family finances by almost $90,000 from a single decision to not save-by-buying.
Americans make those kinds of savings decisions frequently but on a smaller scale – say $50 twelve times a year. Compound those dollars over 30 years and your family finances will be a lot closer to fifty grand than fifty bucks.
Every penny counts.
“Only” fifty bucks? It’s self-deception. The old adage “every penny counts” is still in common use because it’s true.
We all tend to convince ourselves that our buying decisions are wise regardless of the reality those decisions impose on us when it comes to our family finances. It’s one of the oldest tricks in the world to tell ourselves “It’s only…”.
The next time you think you are saving money by buying a product on sale, ask yourself if the product you are buying and the amount you are “saving” is really worth it. (Often it will be. Americans have the most enviable lifestyle in the world and EUREKONOMICS™ does not espouse a life of deprivation.)
EUREKONOMICS™
EUREKONOMICS™ espouses the economic principles and financial practices that the Founders and Builders of America paid forward to us. These principles and practices have been twisted and manipulated by the Behemoths–big government, unions, banks, investment firms, etc.–to serve their aims and not those of the American people.
Remember – only money is money. For everything else–your 401(k), IRA, mutual funds, investments, and so on–you have to spend your money, and worse, relinquish control of your family finances to strangers.
When you’re closer to pushing up daises than doing fifty push-ups, having cash and income instead of the stuff you bought will be a blessing. Tennessee Williams expressed it best over half a century ago:
“You can be young without money but you can’t be old without it.”
PS – There is one purchase that Americans can make to assure…
- the safety of their family finances
- tax-free growth every year
- they never incur a loss
- their cash is accessible at all times without penalties or restriction:
participating whole life insurance from a mutual company.
Money and Financial Management Goals
May 31, 2011 | Author Dr Agon Fly
Our money and financial management goals remain the same as they’ve been for many years, so we renew them and reinforce them on a regular basis. I repeat them here because we spent part of a recent holiday weekend reviewing and renewing them.
We Resolve
We resolve to strengthen the foundation of our financial management plan and of the Four Pillars that support our – and every – successful personal economy.
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We resolve to continue to eliminate all debt-to-others from our personal economy. That means getting rid of our last debt-to-others, the mortgage. We may not get it done this year but we’ll make progress.
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We resolve to continue to convert assets into income that we do not have to work for and we cannot outlive. Every year we add substantial amounts of money to our private pension funded by participating whole life insurance polices, which are not controlled by any company and is not “tax qualified.”
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We resolve to add more money to our whole life insurance “banks”so that any unplanned money needs – a new car, a new roof, medical expense, etc. – can be met without invading our income or our income producing assets. We hope to increase the available money in these “banks” by at least 20% each year.
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We resolve to continue building a legacy of both money and wisdom to pass on to our children, their children and their children’s children by creating whole life insurance “banks” for each of them as we are able and by teaching them how EUREKONOMICS™ serves them today and into the future.
Aggressive But Realistic Goals
These may seem to be aggressive goals. They are. They are not, however, unrealistic or punitive. We will not give up any lifestyle gains we made in prior years and we expect to continue to improve our lifestyle. Every American can benefit from EUREKONOMICS™. Get the whole story here…
By Jeffrey Reeves MA, EUREKONOMIST™
Even The Fed Knows An Obama Economy Won’t Work
April 2, 2011 | Author jr
Fed Governor: Crisis Scared Winners, Too
- By ALLISON BELL
Read the entire article here…
Commentary…
As usual, the economist author of a study looked at the results derived from following conventional wisdom. What about those folks that relied on safe equity in their homes and whole life insurance policies, and their savings in local banks and credit unions. I assure you, those folks haven’t changed their practices and are not “scared.” They continue to apply the economic principles and follow the economic practices the Founders and Builders of America’s economy paid forward. Unfortunately, Washington and Wall Street have used Madison Avenue advertising and marketing schemes to convince Americans that creating equity in their homes and whole life insurance policies and saving money in their local banks and credit unions is a bad idea…better, the tell us, to give control of our money to some anonymous ‘money manager’ on Wall Street and subject our future income to the whims of the IRS.
There are links to more examples of just how bad the economy really is below. Just remember common sense: get out of debt, keep lots of ready cash, avoid the IRS–that means opt out of qualified retirement plans–and don’t forget to remember to pay something forward to those you care most about.
by Jeffrey Reeves
OTHER FEDERAL RESERVE BOARD COVERAGE FROM NATIONAL UNDERWRITER LIFE & HEALTH:
Posted in Money, What Others Say | Tags: bank, banker, banking, banks, debt, debt to others, financial, financial advice, financial planning, health insurance, investing, Retirement, saving | No Comments »
Awareness, Self-appreciation, and Gratitude—Keys To A EUREKONOMICS™ Practice
October 2, 2010 | Author Dr Agon Fly
“If it were not for the ‘last minute’, nothing would get done.” Dr Agon Fly
Many everyday events and occurrences are important; the kids are crying, the spouse is demanding, the boss is insisting, the grass needs mowed or the snow shoveled, and on and on. Chores, people, TV shows, and even bodily functions are shouting “Pay attention to me!” all the time. These demands are sometimes more urgent than they are important.
Paying your bills is one important everyday activity that becomes urgent when we put it off until the last minute. We tend to pay bills at the last minute because we think of it as an unpleasant activity.
However, paying your bills can also be an excellent exercise in awareness, self-appreciation, and gratitude.
- You can use paying your bills as an exercise in awareness. Paying for the things you bought and used…
- puts money at the center of your focus
- allows you to recognize both the value and the function of money in your everyday life
- lets you re-assess your decisions about money and realign your money usage with your life goals
- Moreover, paying your bills is an opportunity to pat yourself on the back. You work hard. You choose to spend your money in a certain way. Paying your bills, which are the direct result of those decisions, should be a source of satisfaction and self-esteem. If that is not the case, you may want to create greater awareness about the ways you are using the money that flows through your life.
- Finally, paying bills allows you to appreciate and be thankful for the work of the thousands of other Americans—just like you—who go to work every day to make sure…
- your electricity is on
- the grocery store shelves are stocked
- the streets are safe
- the cable or satellite TV is working
- the water is flowing and the sewage is treated
- the schools are open
…you get the picture.
We are entering the fourth quarter of the year. This is the time of year Americans…
· tend to run up the balances on their credit cards and incur other bills that they won’t see until January
· look forward with confidence but set themselves up to look back with regret
EUREKONOMICS™ is an approach to managing the money that flows through your life.
EUREKONOMICS™ lets you make sure you can always look forward with confidence and never have to look back with regret.
If you can delete the misconception from your thinking that paying bills is a burden and a struggle and replace that bad information with an understanding that paying your bills is a EUREKONOMICS™ practice in awareness, self-appreciation, and gratitude, you too will be able to always look forward with confidence and never have to look back with regret.
Posted in Money, Personal Financial Management | Tags: credit, EUREKONOMICS, gratitude, life goals, Money, money usage, self esteem | No Comments »
“It’s Only Money…” Has No Place In A EUREKONOMICS™ Practice…
October 1, 2010 | Author Dr Agon Fly
It’s only money…
How many times have you heard someone say, “Let’s buy it! It’s only fifty bucks. We’ll save twenty-five dollars!” Good Grief! There is no “only” when you are dealing with your money. Moreover, savings are only savings when you put them into an account that you control.
If, instead of spending it, you put your fifty bucks in your family bank–regardless of the form that bank takes–it would compound to nearly $300.00 in 30 years at 6%. If you add the 25 bucks you saved, you’d have over $450.00 from a single decision to not save by buying something.
Americans make those kinds of savings decisions frequently – say 12 times a year. Compound those dollars over a few decades and the total is over $5,000.00. Do it every year for 30 years… you’ll be a lot closer to fifty grand than fifty bucks.
“Only” fifty bucks? It’s self-deception. The old adage “every penny counts” is still in common use because it’s true. We all tend to convince ourselves that our buying decisions are wise regardless of the reality those decisions impose on us when it comes to our money. It’s one of the oldest tricks in the world to tell ourselves “It’s only…”.
“Human felicity is produced not so much by great pieces of fortune that seldom happen as by little advantages that occur every day.” Benjamin Franklin
The next time you think you are saving money buying any product–on sale or not–ask yourself if the product you are buying and the money you are “saving” is really worth it. Often it will be. EUREKONOMICS™ does not espouse a life of deprivation. Americans have the most enviable lifestyle in the world and it’s not a sin to maintain and improve that lifestyle.
EUREKONOMICS™ does espouse the economic principles and financial practices that the Founders and Builders of America and its economy paid forward to us. These principles and practices have been twisted and manipulated by the Behemoths–big government, unions, banks, investment firms, etc.–to serve their aims and not those of the American people.
Remember – only money is money. For everything else–your 401(k), IRA, mutual funds, investments, and so on–you have to spend your money, and worse, relinquish control of that money to strangers. When you’re closer to pushing up daises than doing fifty push-ups, having money instead of the stuff you bought will be a blessing.
This isn’t a new idea. Tennessee Williams expressed it over half a century ago:
“You can be young without money but you can’t be old without it.”
PS – There is one purchase that Americans can make to assure their money is safe, grows tax-free every year, never incurs a loss, and is accessible at all times without penalties or restriction: participating whole life insurance from a mutual company.
Posted in Money, Whole Life Insurance | Tags: bank, banking, banks, benjamin franklin, economic principles, economics, economy, financial, financial practices, insurance, investing, investments, Money, saving, saving money, savings | No Comments »
Why America Needs EUREKONOMISTS…
September 14, 2010 | Author Dr Agon Fly
This post is my reply to another Kool Aid drinker that knows nothing about participating whole life insurance but is—regardless—answering the life insurance question: “Which kind of life insurance policy should the questioner buy?” The answer–in bold–is from a mortgage broker. My responses follow.
Purchase Life Insurance: – I call this “Income Protection.” Only (repeat – ONLY) purchase a term life policy.
Hmmm! The mortgage broker states, “I call this….” So the millions of successful Americans that buy whole life insurance policies are wrong and the small “buy term and invest the rest” sect of Williams/Orman devotees like this one are right. No! This advice is akin to suggesting a diet composed only of Twinkies and doughnuts would produce optimum health.
The face-value should be an amount large enough to replace income no longer coming in due to the death, or the additional funding necessary to cover the expense of hiring someone to perform the tasks of the dear departed. If the budget permits, increase the face-value to pay off debts of #1) the mortgage, #2) creditors. The minimum policy should cover expenses to bury or cremate the deceased. The average burial costs are between $6,500 and $10,500. Cremation average: $1,250 to $6,500.
~ WOW! If only the millions of Americans that care enough about their families knew how foolish they have been to buy whole life insurance policies that actually serve the needs of the family both during their life time and after their death. After 40 years helping Americans deal with life and death issues it is apparent that more life insurance is always better than less and whole life insurance serves best. No widow or widower ever complained about receiving too much money from a life insurance claim.
Under no circumstances should you purchase a whole life, universal life, or any other type of policy that accumulates a cash-value.
~ YEAH, Right! More Twinkies…How about following that logic to its ultimate conclusion. Don’t buy a car, lease it. Don’t buy a home, rent an apartment. Why would anyone want to build equity in real property like a home or a life insurance policy? Shucks, why not go for the ultimate; don’t get married…
There are at least five (5) reasons why, as follows:
~ Now, the truth…
a. Although rates are better than a savings account or Certificate of Deposit, they are still low compared to other investments
~ When this argument arises, its proponents pull out hypothetical illustrations of future performance. Facts are different than projections. During the past 100+ years, whole life insurance policies that were issued and maintained produced results comparable to “investments.” (Can’t say the same for universal life policies. That’s why I never sold that kind of life insurance policy.) Looking forward using silly assumptions is a form of dishonesty. Any return over 5% net of taxes and expenses for an “investment” is unrealistic based on the actual performance of actual investments–that’s not my opinion but according to Benjamin Graham and Warren Buffett. One can–of course–use “averages” to “prove” whatever they want. I can show you how an “average return” of 10% per year leads to a total loss of your invested capital.
b. The interest rate to “borrow” the money is much higher (usually 6-9% plus). Unlike borrowing from your 401k plan where interest payments go back into your account, these payments go to the institution. Additionally, it could take up to six months to receive your check
~ These assertions are incomplete, mix unrelated issues with the issue being addressed, and are at best factually inaccurate.
i. Policy loans are, in many cases, the least expensive way to finance purchases. Although it is accurate to say that the policyholder borrows money from the insurer and repays the insurer, that does not take into account that the cash value of a whole life policy continues to grow and dividends continue to be credited to the policy regardless of the loan. Moreover, the value of the GUARANTEED cash value increases and dividends–not guaranteed but consistently paid for over 100 years–often far exceed the interest charged. Even some UL policies have zero cost loan provisions that assure the policy owner/borrower that the interest paid will equal the interest credited to the policy.
ii. It’s unclear where the six months comment comes from. I and many of my clients regularly borrow against the cash value of policies and receive checks in a few days, never weeks or months. (Most policies since the Great Depression have a rarely used provision that allows the insurer to withhold both cash accumulations and death benefit payments for as much as six months under very limited circumstances. To suggest that is the norm is–you put your own name to it.)
iii. Finally, borrowing from a 401(k)–assuming you are following conventional wisdom and actually risking your future by buying into such schemes–is fraught with dangers–too many for this response.
c. Although your premium does not rise, the portion that goes to pay your premium does because as you get older the rate increases. Therefore, the portion of the premium that goes towards your cash value contribution decreases as time goes on. Eventually, you are paying premium from your cash value therefore, you cash value will total zero at some future point in time
~ OK – that’s a relatively accurate description of a universal life insurance policy but does not begin to describe a whole life policy in which the premium, death benefit, and cash values are all GUARANTEED. In addition, the insurance contract–not the insurer–guarantees that any surplus/profit that the insurance company earns is paid to policy owners as a tax-free dividend. There are no outside investors in mutual companies.
d. After the cash value is depleted, the policy could be cancelled (unless you are willing to pay a higher premium)
~ This applies to UL policies – not whole life insurance policies. Whole life insurance policy premiums are guaranteed to remain level, the cash values are guaranteed to increase every year, and surpluses are guaranteed to be paid out as tax-free dividends annually. Moreover, this comment doesn’t address the question of what happens when the term insurance policy the mortgage broker recommends renews and the premium goes up 1,000% or more due to age.
e. Upon the death of the insured, beneficiaries receive either the face-value of the policy or the cash value. In order to receive both, the agent needs to mark both on the application. They generally don’t mark both because the policy premium would be much higher.
~ This refers to UL policies only. (Isn’t it amazing that the author of this response knows how other agents think and even knows their motives for filling out an applications one way or another?)
Whole life policies that are properly structured develop an increasing cash value. Happily, I just reviewed a policy that was issued in 1976. The premium was, of course, the same as it way originally. However, the death benefit was seven times the original face amount and the annual dividend was ten times the guaranteed premium–and rising every year.
“Cash Value” policies should only be used to supplement retirement savings after all other retirements account contributions reach their maximum allowed by Security Exchange Commission (SEC) regulations.
~ I worry about advisors that make assertions that sound like the Ten Commandments.
This is another out of context and meaningless comment. The SEC is the puppet of the Behemoths on Wall Street and in DC. Moreover, the SEC has no authority or purview relative to insurance companies and even less regarding how and where you put your money. They are supposed to regulate and control the behavior of folks like Bernie Madoff, Fannie Mae, Freddie Mac, and the dozens of other financial institutions that the overreaching federal government either put in jail or bailed out because the SEC didn’t do its job.
Here’s my bottom line: After almost 40 years as an insurance and RECOVERING investment advisor, I have not verified from actual performance any insurance/investment strategy that performs as well as EUREKONOMICS[tm]. During my entire 40 year career and for 100 years before that, not a single American that follows this strategy has lost any money, paid or incurred any taxes on their gains, complained that the cost of their whole life policies was too expensive, or expressed regret that the amount on the death benefit check was too high.
GO FIGURE!
Posted in Legal, Ethical, Moral, Money, Retirement, Whole Life Insurance | Tags: behemoth, behemoths, burial costs, debt, insurance, insurance question, insurer, interest, investing, investments, life insurance policies, life insurance policy, Money, mortgage, mortgages, purchase life insurance, Retirement, s, saving, Taxes, universal life, whole, Whole Life Insurance | No Comments »
Question: Got Debt? Answer: Get EUREKONOMICS™
August 17, 2010 | Author Dr Agon Fly
America and the world have received a legacy of wisdom and wealth but have squandered it as pointed out in this post from HubPages.com…
Shakespeare, Franklin, and Stanley Johnson
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
William Shakespeare, “Hamlet”, Act 1 scene 3 – Greatest English dramatist & poet (1564 – 1616)
“But, ah! think what you do when, I you run I in debt you give to another power over your Liberty.”
Benjamin Franklin, Poor Richards Almanac, c. 1758
“…How do I do it? I’m in debt up to my eyeballs. I can barely pay the finance charges. Somebody help me.”
Stanly Johnson, Lending Tree commercial, c.2005
Amazing…
It seems Stanley Johnson–and the rest of America, including the Dolts in DC–paid little attention to the wisdom that Shakespeare and Franklin bequeathed to us centuries ago as a legacy.
Instead, Stanley was seduced by the Siren Song composed in the late 20th Century by the Wonks of Wall Street and the Wannabes in Washington. The lyrics go something like this:
Get stuff you don’t own.
Borrow to buy it.
That proves your true worth.
Debt’s a good diet.
“Invest” - do not save.
Give us all your money.
Become our good slave.
Your life will be sunny.
Having stuff you don’t own and “owning” investments you don’t control is a sure road to servitude, poverty, and the loss of liberty. It is devoid of common sense and lacks an economic foundation.
This is conventional wisdom and I call it The Debt Paradigm.
The problem here is that true intelligence–common sense–sees all sides in a debate. On the other hand, pseudo-smarts embrace a theory, elevate it on an ideological altar, and protect it by demonizing anyone that interjects a competing or alternate view.
History abounds with examples…
- The Romans of Caligula’s reign
- Crusaders that ravaged both the Jews of Europe and the Muslims of Arabia
- Nazi Germans
- Modern day Islamic fanatics that demonize Jews and Americans equally
- Crazed religious fanatics of Iran
- Corrupt unions like the SEIU
- Misguided ACORN workers
- The list could be endless and include every religion and government
There is only one way to deal with ideologies that demand absolute adherence–and the Debt Paradigm is such an ideology–and that is to get real , challenge the assumptions, prove the alternatives, wake up the ideologues to the untruths that are leading them where the LEADERS want them to go.
There are strategies that allow you to personally escape The Debt Paradigm and gain control of the money that flows through your life. One source of information about a unique approach to this dilemma of the 21st Century is found in the life-changing book Money for Life. I encourage you to read it.
EUREKONOMICS™ Challenges…
July 12, 2010 | Author Dr Agon Fly
Posted in Money, Personal Financial Management, Retirement, Whole Life Insurance | Tags: bank, banking, banks, building wealth, credit, debt, economy, equity investments, financial, insurance, investing, investment brokers, investments, life insurance policies, managing personal finances, Money, money issues, mortgages, policies, Retirement, saving, savings, security, stocks, term life insurance, wealth, Whole Life Insurance | 1 Comment »
What’s Over The Horizon? EUREKONOMICS™!
March 2, 2010 | Author Dr Agon Fly
The financial principles that have made America’s economy and people the envy of the world are clear and simple.
- In the Declaration of Independence:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, Governments are instituted among Men deriving their just powers from the consent of the governed.”
- In the Constitution:
“We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”
Liberty and the blessings of liberty are both the cause and the effect of America’s financial success. Liberty derives from the ability of individual Americans to engage in “the pursuit of happiness” and is sustained by their success in doing so.
The ability to succeed in this elemental pursuit that is the foundation of America’s success and the success of its citizens is being challenged today by the failure of financial Behemoths, the incursion of the Dolts in DC into every aspect of the economy and many aspects of our individual lives. Just look at the headlines from this week alone:
| Obama opens health care summitPresident Barack Obama today opened a health summit
aimed at pushing through his stalled health care overhaul, saying reform is critical to boosting the struggling U.S. economy and emphasizing coop… |
| Home prices fall unexpectedlyHome prices dipped unexpectedly in December,
but the annual rate of decline slowed, according to Standard & Poor’s/Case-Shiller indexes. The S&P composite index of home prices in 20 metr… |
| Number of 2010 bank failures climbs to 20The Federal Deposit Insurance Corp. (FDIC)
shut down four banks late last week, bringing the number of U.S. bank failures for the year to 20. The FDIC took over La Jolla Bank, FSB, in La… |
| Foreclosed, delinquent mortgages reach record highThe proportion of U.S. mortgages
in foreclosure or at least one payment past due reached a record high during the fourth quarter, according to industry data provided by the Mortgage Bankers Associa… |
| Fed raises discount rate to 0.75 percentThe Federal Reserve said it will
raise the interest rate it charges banks for emergency loans in order to improve financial market conditions. The rate will be increased from 0.50 percen… |
EUREKONOMICSTM lets you create wealth and manage personal finances regardless of bubbles bursting, markets crashing, Behemoths bumbling, or the Dolts in DC deceiving. EUREKONOMICSTM embraces the founding principles of America’s greatness and molds them into a money management model that every American can easily follow without sacrificing lifestyle or falling prey to the failed financial model that has brought America to the brink of bankruptcy.
What exactly is EUREKONOMICS™ and how does it help you create wealth and manage your personal finances?
EUREKONOMICS™ is a wealth creation and personal finacial management model that guides you as you lay your financial foundation with money that you control, and allows you to effectively…
- manage and eliminate the indentured servitude that derives from your debt
- deal with life’s surprisingly unsurprising surprises, which crop up every day
- secure your retirment with an income you don’t have to work for and you won’t outlive
- create a legacy of wisdom and wealth for those you care most about
The secret that allows EUREKONOMICS™ to serve 21st century Americans so well lies in its foundation. Just as the devastating earthquakes in Haiti and Chile demonstrate how weak foundations create havoc and death and solid foundations save lives. Having a solid foundation of money that you control helps you avoid the devastation of financial earthquakes.
As you gaze over your shoulder and down the path at the receding horizon of the 20th century, the distress and damage the financial model we call the Debt Paradigm has created litters the way. The financial model that let Americans live happily and contentedly in control of their finances and their futures in the middle part of that century lies beyond the horizon. During the past decades it morphed into a model that separated Americans from control their money in the names of credit, investing, and returns – the Debt Paradigm.
EUREKONOMICS™ puts you back in control of your money without changing your lifestyle or pinching your budget.
- EUREKONOMICS™ allows you to comfortably make simple and painless changes in the way you create wealth and manage your personal finances.
- EUREKONOMICS™ show you how to build a foundation that can survive earthquakes, tsunamies, Wall Steet’s serpents, and the Dolts in DC.
- EUREKONOMICS™ advocates for the time tested strategy of saving money in the financial products and institutions that made America’s economy the envy of the world.
- EUREKONOMICS™ reintroduces and reinvigorates the most powerful, flexible, and versatile financial product ever introduced into any economy in any century - participating whole life insurance.
It’s easy to fall back on worn out shibboleths about increasing rates of return, the market always coming back, the fear of inflation, the promise of unrealizable growth, and so on. EUREKONOMICS™ talks about guaranteed rates of return, never losing money, eliminating debt without jeopordizing lifestyle, minimal or no interest loans with no applications needed, ready cash when life demands it, a retirement that is truly secure that you won’t outlive, and leaving some wisdom and wealth behind when you die.
What’s on your horizon? You choose.
Visit www.youBEthebank.com. Click on the Find an Advisor tab above to contact a Money for Life Guide and learn how you will benefit from EUREKONOMICS™.
Posted in Money, Personal Financial Management, Retirement | Tags: bank, banker, banking, banks, behemoths, blessings of liberty, credit, debt, derivatives, economy, financial, financial principles, financial success, inflation, interest, investing, investments, legacy, liberties, Money, Retirement, s, saving, savings, security, wealth | No Comments »
EUREKONOMICS(TM) – The History of Money by Carlos Lara
February 7, 2010 | Author Dr Agon Fly
There are few economists and economic writers that can clearly articulate complex economic concepts as well as L. Carlos Lara and the other members of the United Services & Trust Corporation. Here is an historical and factual discussion of…
Sound Money
In-Depth by: L. Carlos Lara | Friday, February 5, 2010
My thoughts on the subject of sound money, of course, are not original. They have been guided here by my own private study of writers of a unique school of economic thought. These great thinkers, to whom I refer, can be traced to Salamanca, Spain as early as the 15th century. Later they were found in Austria, but now are centrally located here in the United States. These economic theorists have at their core of thinking the principles of scarcity and choice. More importantly, they believe that economic value is subjective to the individual. These concepts, when used in the thinking process, provide the ability to see the world and especially the market economy in a uniquely different way from all other schools of thought. What becomes apparent by utilizing this way of thinking is that an idea has crept into our world that is destructive. Ludwig von Mises, one of the greatest of these economists, believed that this idea was evil and that no one should give in to it. He felt, as most Austrian economists do now, that fighting against this idea was a responsibility each one of us had to society because the stakes are extremely high. They are nothing less than the future of human freedom. (1.)
Young or old, our own education is where our fight must originate. However, learning how the world works according to this manner of thinking is a different type of education not earned in the classroom. In fact, this type of education is an individual endeavor and each of us must decide when we really want to take it up in earnest. What most disappoints us is that even after we decide to take up this intellectual battle sometimes our understanding comes slowly. Painful experiences, for example, can be some of our greatest teachers, however, it is not until these experiences are combined with a sound body of knowledge and historical evidence that an epiphany occurs. As for me, I am “too soon old, too late smart.” (2.) Nevertheless, it is never too late to begin.
To understand what is meant by sound money, we need to examine a bit of history. There are a few unique characteristics about money that I suggest we revisit in order to obtain a full perspective on this matter especially in light of our current economic environment.
The Genesis of Money
First of all, money did not come into being by some sort of agreement, or social contract. Money comes into being freely in the market place by trial and error. This happens as individuals begin to facilitate the process of exchanging goods with one another.
In the days of bartering (what economists refer to as “direct exchange”), problems arose when people attempted to exchange two different commodities. For example, if you had butter to exchange for beef, but no one wanted your butter, then you obviously had a problem without a solution. This exchange problem, because it came up quite frequently, forced society to search for a commodity to serve as a temporary exchange, or what economists refer to as an “indirect exchange.” Obviously, the commodity society ultimately selected for the indirect exchange had to be highly marketable. It may have been eggs, milk or bread, but, whatever it was, society eventually employed it as money.
Over the course of time the one medium of exchange that won over all other forms of money has been gold. Why gold? Because it has features no other commodity has. For example, it is divisible. Imagine trying to divide butter to pay for something. Gold, on the other hand, can be cut up into tiny pieces while retaining its prorata value so that money calculations can be made. By making gold in either bullion bars or coins, it becomes very portable and very convenient to use.
There is also the fact that from time immemorial gold has been valuable as jewelry principally because of its decorative beauty. In addition to this, we must not forget that gold is limited in its supply. It is mined from the ground at great expense in order to get more of it. But that is not all; gold is extremely durable and non-perishable. It can last for centuries. And finally, gold is homogeneous. It can be made to look exactly like another of its kind, as in gold coins. For these reasons it is not surprising why historically gold has been the money of choice. No doubt, gold is sound money.
This brings up two extremely relevant questions.
What is the right quantity of money? How much should it grow?
These questions have been asked by economists for centuries. The struggle continues. As we well know, there has been an astronomical increase of the money supply by the Federal Reserve Bank during the last four decades and especially last year. The general public, I believe, innately knows that all this new money creation is not a good thing for society. I also am also convinced that only one man in a million knows how it is done and why. To help understand this and know for certain what the right answers to these two questions are, we need to try asking ourselves this question: What should the optimum amount of canned peas be in society? Or, what is the optimum amount of fresh turkeys, or watermelons, or cattle, or whatever commodity comes to mind. The point is that the more consumable goods we have in society the better it is for everyone. In fact, more goods in the market help bring down prices and our standard of living goes up. However, this is not the case with more money. An increase of money provides no social benefit whatsoever.
Why no benefit? Because money cannot be eaten or consumed. Money, remember, is used for exchange purposes only. Once a commodity is in sufficient supply as money, no further increases are needed. Any quantity of money is optimal. The more mining of gold for uses other than money, such as jewelry, is perfectly fine, but more gold as money is not needed. An increase in money only dilutes its value. And, it is this last point–dilution–that represents the sum total of our money problems today.
Legalized Counterfeiting
To put my points into perspective, imagine a free market economy where gold is the money. In such a society one can acquire the gold in one of three ways– mining, selling, or as a gift. In each one of these methods of acquiring gold, the principle of private property is strictly honored. However, let’s suppose an individual decides to take advantage of gold’s homogenous feature and creates an enormous amount of counterfeit gold coins for himself. This act will create a permanent destructive rippling effect throughout society. In addition to its fraudulent method of acquiring the gold and undermining the foundations of morality and private property, the counterfeiter will also increase the money supply substantially when he spends the money in the marketplace. With more money in supply, its value will necessarily decrease and drive up prices on all goods. This, of course, is price inflation. It is very destructive because it impoverishes the whole of society, while the counterfeiting continues. The counterfeiter obviously benefits immediately by getting the money first, as opposed to the later recipients of the money, or those who never get the money at all…usually the average hard working citizen. These good people wind up paying dearly because they are left to deal only with the increased prices on all the goods in the market place. For them the cost of living simply rises year after year, and no one can provide an explanation as to why it happens. For this reason, Austrian Economists have always said that the inflation process (the increase of the money supply), is a form of indirect or invisible tax on society. This entire counterfeiting scheme is cleverly hidden.
We are fortunate that private counterfeiting has really never been much of a problem in modern times. The shaving of the edges of gold coins, the customary method of counterfeiting, ceased when milling was developed. However, when counterfeiting is mandated by government, when it is legalized, we have a serious economic and moral problem for all of society. Historically, there have been two major kinds of government mandated counterfeiting-(a) Government paper money and (b) Fractional Reserve Banking. This is precisely what we have today in our United States, but not just here-now it is all over the world.
“There is in all of us a strong disposition to believe that anything lawful is legitimate. Thus, in order to make plunder appear just and sacred to many consciences, it is only necessary for the law to decree and sanction it.” (3.)
Frederic Bastiat
1801-1850
The American public, in just this past year, has become increasingly more informed in the absurd concept of printing dollars on a printing press, and then spending them as a solution to stimulating the economy. They realize that a flood of dollars into the market only devalues the currency. However, a much more insidious and camouflaged feature of our banking system is Fractional Reserve Banking. If you have the time, you can learn how that works by watching this educational video “The Mystery of Banking.” In the meantime, the most important thing to comprehend and remember is that so long as government paper money is redeemable in gold, it is as “good as gold” and can be said to be sound money. Our paper money, however, has not been linked to gold since President Roosevelt made that linkage illegal in 1933. Since that time, the continuous expansion of the money supply, mandated by government through its Federal Reserve Bank, has devalued our money by 97%. There seems to be no end in sight.
Message of Hope
Obviously, we must re-link our dollar back to gold. By doing so, we would all own, by assignment, property rights to a unit weight of gold. If our dollars are redeemable in gold, all banks would automatically be 100% reserve banks. More importantly, inflation would stop because gold cannot be inflated.
Next, we must privatize all banking, thereby abolishing government’s monopoly over our money. If step one and two can be accomplished, then there would be no need for the Federal Reserve. Step three would be to close it down. If that happened, the size and expense of government would decrease immensely; our taxes would go way down, our savings-which fuel investment-would go up.
Think this is too big to accomplish? You would be amazed at the literally hundreds of thousands who support this solution. This support has been fueled in large part by the Mises Institute, the Foundation for Economic Education and other such private institutes, funded with no connection to powerful elites. These centers of education have become the places for learning the economic principles that our children and grandchildren need to be taught. They continue to fan the flame of liberty by publishing articles, scholarly journals, books, by holding conferences, and teaching students. Because of their efforts spanning more than 60 years here in America, there is faith, hope and expectancy at these independent scholarly institutions that a dramatic change in the political and social landscape is right around the corner, a belief that a great change can take place overnight when the ideological conditions are right. These institutions continue to provide the educational fuel to keep the fire burning. Every conscientious citizen should join and become a member of one.
Remember, we do not need to convince the entirety of the United States. With only 10% of the population supporting this solution, public policy can actually change. In the end, all economic policies are ultimately dependent on the views of the general public and our choice is final! America was founded on the principle that the masses, the people, determine the course of our history, but this movement for change must start with the individual–that means you and me.
L. Carlos Lara is President of United Services and Trust Corporation, a Management Consulting Firm specializing in Business Consulting, Corporate Trust Services, Corporate and Private Seminars including Speaking Engagements.
Notes: ___________________________________________________
1. Special credit to Ludwig von Mises, Austrian Economist born 1881 Lemberg, Austria-Hungary, died 1973 New York City, NY. Noted for Praxeology. The Science of Human Action. Also, special credit given to Murray N. Rothbard, Austrian Economist, 1926-1995, student of Mises, for all information in this article.
2. From the title of the national best selling book Too Soon Old, Too Late Smart, Thirty True Things You Need To Know , by Gordon Livingston, M.D. Copyright 2004 by Gordon Livingston published by Da Capo Press
3. Frederic Bastiat 1801-1850, The Law-the classic blueprint for a just society. Republished by the Foundation for Economic Education, Irvington-on-Hudson, New York
Copyright © 2009-2010 United Services & Trust Corporation. All rights reserved. Repreinted with permission.
Posted in Money, Personal Financial Management | Tags: austrian economists, bank, banking, banks, credit, economic theorists, economics, economy, liberties, ludwig von mises, Money, sound money | 1 Comment »
EUREKONOMICS! Home Equity & Cash Value Life Insurance…
January 10, 2010 | Author Dr Agon Fly
Over the past decade or so, the fallacy that home equity should be “harvested” by means of mortgage refinancing or home equity loans and converted into equity in some other investment has been foisted upon Americans as a legitimate financial strategy.
The most common presentation of these schemes suggests that home equity should be redirected into what some advisors call ”investment grade life insurance.” Other schemes suggest turning equity you control into annuities, real estate, gold, mutual funds, or some other investment – aka speculation – that you do not control.
The consistent mantra of the promoters of this idea is, “That’s what the wealthy do.” They want you to believe that following their advice is the path to wealth that those who were already wealthy followed.
BUNK!
Each of these demonstrably unsuccessful and failed schemes relies on the flawed principle that you should convert and asset – over which you have control – into cash. Having done that, you should then give the cash to the financial advisor/planner that recommended the transaction who will then invest your money into whatever financial product or service s/he is promoting and earning commissions from selling or fees for managing.
The results from this so-called strategy are apparent in the home foreclosures many Americans face today. They also appear in the non-performing, under-performing, and money-losing investmentsinto which the advisors often directed the American consumer’s home equity dollars.
Average Rate of Return…
The promotional basis for most of these schemes is the mythical Average Rate of Return. The average rate of return shell game uses illustrations that show a consistent seven to eight percent return over multiple intervals – usually annual. A typical $1,000 investment example used by this scheme with an average rate of return of 8% might look like this:
- Year 1 – $1,000 x 8% = 1,080
- Year 2 – $1,080 x 8% = 1,166
- Year 3 – $1,166 x 8% = 1,260
- Year 4 – $1,260 x 8% = 1,361
- average rate of return = 8%
- actual compounded annual return = 8%
However, even though this illustration shows an average rate of return of 8% over a four year period, it is unlikely, if not impossible, to earn an actual8% year upon year compounded return. (Just ask one of Bernie Madoff’s clients if you don’t believe that.) A more honest illustration of an average 8% return might look like this:
- Year 1 – $1,000 x + 40% = 1,400
- Year 2 – $1,400 x + 22% = 1,708
- Year 3 – $1,708 x - 15% = 1,450
- Year 4 – $1,450 x - 15% = 1,233
- Average rate of return = 8%
- Actual compounded annual return = 5.38%
Even though the returns in the gaining years far outweigh the negative returns in the losing years, the average rate of return is still 8% while the actual compounded return is about 5.38% It’s possible to show a much lower actual compounded return with a little bit of creative arithmetic, but this is enough to make the point: average rate of return is always deceptive, is always hypothetical, and is never guaranteed.
The fact that the returns on the investments recommended by the harvesting proponents are not guaranteed or even predictable compounds the primary deception in these schemes, which is that real estate values always move upward.
Granted, over the few years before the real estate bubble burst, the values assigned to real estate moved predictably higher. However, the assigned values were often determined by the amount of money an advisor suggested the owner harvest and invest in the financial product s/he had for sale. Add to that the painfully unethical behavior of the mortgage industry granting loans to enhance the compensation of executives and brokers in that industry and the outcome was predictable.
The wholesale failure of financial Behemoths like Freddie, Fannie, Lehman, and so on is proof positive that the actual values of real property were artificially inflated to accomodate harvesting equity and other schemes designed to move money from the pocketbooks of American families into the coffers of corrupt Behemoths.
EUREKONOMICS! – The Return of Common Sense
Let’s turn the equity harvesting scheme on its head.
First, I have known many wealthy people. I have known some who harvested equity from their homes and business properties. I have known not even one that becamewealthy by harveting equity. However, I have known some that became paupers by doing so.
The wealthy people that have commented on or reported about this concept have harvested equity only when they could guaranteethat the use to which they put the money converted from equity would return more than the cost of converting the equity. In their decisionmaking, it was always more important to avoid or minimize risk than to hope for returns. They used harvested equity to get richer without risk, not to get rich in the first place.
Conversely, even considering minimal risk investments, few of the wealthiest people I have encountered over the past four decades of my career would ever consider placing a mortgage on their paid-for personal property, least of all their residences. They worked diligently for decades to pay off their mortgages and protect their personal assets from business failures and legal actions. Why, in God’s name, would they ever want to put those assets at risk?
What common sense program would ever warrant taking the chance that the family home would be lost to some investmentthat promises only that it promises nothing. What about a greater return? Think about it. Is there a rate of return that is worth more than peace of mind, carols around the family Christmas Tree, or candle lighting at Hannukah?
If you would have a strategy regarding equity harvesting, why not consider harvesting equity from a source that you control and using it to pay off your mortgage and eliminate interest payments to the Behemoths? Why not first build and then harvest the equity from your cash value life insurance policies, use it to reduce and eliminate debt to others, and repay the low or no cost policy loans so you can do it agian and again? Why not learn how to BE the bank?
This is the inverse approach to risking everything you own to get an impossible maybe. It is a way-certain to reduce and eventually eliminate debt-to-others and guarantee that the equity you build in your home, your other personal property, and the cash values in your life insurance policies remain under your control.
Finally, the most powerful argument for this approach is that it has been tried, tested, and proven over many lifetimes and generations. It works in good times and bad. It allows you to grow rich without risk and secure wealth without worry.
Posted in Legal, Ethical, Moral, Money, Personal Financial Management, You BE the "Bank" | Tags: annuities, average, behemoth, financial, financial strategy, gold mutual funds, home equity loans, home foreclosures, inflation, investing, investments, life insurance, Money, mortgage, mortgage refinancing, mortgages, rate of return, risk, s, speculation, wealth | 2 Comments »
George Washington On EUREKONOMICS™…
December 13, 2009 | Author Dr Agon Fly
Joseph J. Ellis in His Excellency George Washington [Vintage books, NY] writes that the Father of our Country, unlike Thomas Jefferson and others from the elite class of the day, demonstrated “…concern for his own economic interest…” and adds paranthetically that “Perhaps this is the underlying reason Jefferson and so many other[s]…would die in debt, and Washington would die a very wealthy man.” p47 It may also be why George Washington was chosen to be our first President. Early America knew that looking out for our country’s financial well being was a primary duty of our Presidents.
Washington, unlike many of his peers, chose “…to act in a direct and personal fashion to recover his own independence from…” the British government and their elitist allies in business and commerce who treated Americans with a certain amount of disdain and ignored their cries for justice and pleas for liberty.
How did Washington unfetter himself from the British elite? The Ellis biography describes it this way: “Starting in 1766 he abandoned tobacco [a British obsession at that time] as his cash crop at Mt. Vernon…From now on he would grow wheat, construct his own mill to grind it into flour, and sell the flour in Alexandria and Norfolk…” He also “built his own schooner…to harvest the herring and shad in the Potomac and sell the fish locally…He…purchased a ship…to carry his flour, fish, and corn to such distant markets as Lisbon…he developed a full scale spining and weaving operation…” he “…made it quite clear that [he] was determined to defy the pattern of indebtedness [to the British Behemoths] that swallowed up…” his contemporaries and that “he was hell bent on freeing himself from the clutches of…” the British Behemoths of the day. pp 52, 53
What the Father of America and the other Founders discovered and understood in 1766 was that liberty and freedom cannot be had by people that are subservient to government or to the business, union, and lobbyists that maintain symbiotic relationships with government. George Washington knew Eurekonomics in the terms of his day. Americans today do not.
Americans today have been misled and misinformed about almost every aspect of wealth creation and personal financial management. Americans today need to relearn what the Founders knew about money; they need to practice what the Founders practiced when they created wealth and managed their personal finances.
Americans today are blessed with advanced financial products that the Founders were just beginning to develop. In particular, Americans in the 21st century have access to the most powerful, versatile, and flexible financial product ever conceived: participating whole life insurance, which allows today’s Americans to control the money that flows through their lives.
Remember the Golden Rule: Whoever controls the gold makes the rules.
To the extent that others – especially governments – control the money that flows through the personal economies of individuals, to the same extent those others deny individual liberties.
“Individual liberties create and nurture free markets. Free markets encourage and nurture healthy personal economies. Limiting individual liberties necessarily damages personal economies. Damaging personal economies necessarily limits individual liberties.” – Dr Agon Fly
Think it through. Who among us has the greatest liberty? Is it not those who control and are good stewards of their personal economies?
- The construction worker that lays aside extra ready cash to carry him through a tough winter or a downturn in new housing construction
- The nurse that adds a specialty to her RN degree and makes herself more employable even during the bad times
- The small business owner that reduces inventory and overhead at the first sign of reduced sales to insure the jobs of his or her employees
- The entrepreneur that nurtures his business to create personal wealth
- The retiree that opts to reduce current income to accommodate a longer life span
Unfortunately, many Americans have been led astray, have relinquished control of their money to investment advisors, qualified retirement plans like 401(k)s, and have opted out of actively creating wealth and managing their personal finances.
Beginning during the Carter administration and continuing during the Clinton, Bush, and especially the Obama Presidencies, the federal government, financial entities, and social institutions seized control of more and more of the personal finances and economies of individuals and families based on the faulty premise that BIG knows best. The effect of these decisions on personal economies is apparent today in the painful rate of unemployment, the high foreclosure rate, falling investment values and returns, and the tsunami of bankruptcies.
However, in the past few years, an old and thoroughly proven idea – that each American and each American family can and should keep control of the money that flows through their lives – has risen like a Phoenix from the ashes of a conflagration of disinformation and misinformation that started in the 1970′s.
We call this resurrected idea Eurekonomics!
Eurekonomics aims to show Americans how to create a personal economy that lets them…
- Thrive in good times and bad
- Grow rich without risk
- Secure wealth without worry
by taking advantage of the power, flexibility, and versatility of participating whole life insurance.
Here is a list of the 13 Immutable Laws of Eurekonomics that the Founders knew and followed. Modern America has been taught that these laws are no longer valid and that we should trust the government, the financial Behemoths, the unions, AARP and its ilk…NOT!
1. The Law of Liberty: When others – especially governments – control your economy, they deny your personal liberty.
2. The Law of Economic Know-How: Successful personal economies rely on knowledge of personal economic principles, understanding the application of those principles to one’s personal situation, and wise decisions about how and when to apply them.
3. The Law of the Behemoths: The economic system in the modern world champions the economies of Behemoths – big government, big unions, big bureaucracies, and big businesses – at the expense of individual personal economies.
4. The Tax Law: The government always writes tax law to its own advantage. Tax deductibility is a trap.
5. The Foundation Law: Every successful personal economy rests on the foundation of accessible cash money and participating whole life insurance policies are the best product available for that foundation.
6. The Law of the Four Pillars: There are four, and only four, measures of successful personal economies: freedom from debt, ready cash, secure income, and a legacy.
7. The First Law of Wealth Creation: You must manage cash flow to create wealth.
8. The Second Law of Wealth Creation: You cannot buy wealth.
9. The Law of Debt: Debt is never good. It can be useful and important, but it is never good in a personal economy. Borrowing money from others is NOT how the rich do it.
10. The Law of Speculation: What conventional wisdom refers to as an investment is really a speculation according to Benjamin Graham. Speculation is gambling.
11. The First Law of Investing: Investing is appropriate only for a very small number of Americans.
12. The Second Law of Investing: If you invest, invest only from savings, never from income.
13. The Law of Returns: Average rate of return, whether illustrating past performance or future results, is useless in managing a personal economy. The actual rate of return – year after year – is the surest, safest, and fastest way to wealth.
For more information contact Jeffrey Reeves or visit www.youBEthebank.com
Posted in Money, Personal Financial Management | Tags: debt, economic interest, economics, economy, financial, indebtedness, investing, investments, legacy, liberty and freedom, Money, s, saving, Taxes, wealth | 2 Comments »
EUREKONOMICS™ Considers “Financial Planning” An Oxymoron…
November 30, 2009 | Author Dr Agon Fly
The Certified Financial Planner Board of Standards stated mission is “to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning.” The CFP Board’s web site discusses and defines financial planning as “the process of meeting your life goals through the proper management of your finances.”
Here’s the contradiction. Planning is one thing. Management is another thing altogether. Planning may be a prerequisite to managing personal finances but it is not the process itself.
Planning is a map-making process. Map-making is done from an aloof and uninvolved position using esoteric engineering tools to describe real terrain in abstract terms. Managing is what you have to do when you come to the river on the map and discover that there is no way to cross the turbulent waters at that particular point because last week’s flood washed away the bridge on last month’s map.
Financial planning, as described and defined by the CFP® training program, is akin to map-making. The planner is not actively involved in the “the process of meeting [a clients] life goals through the proper management of [their] finances.” The planner’s role is to recommend and sell financial products and advisory services that may or may not actually support the goals of the client during the management phase.
There are, of course, ethical standards to which each CFP® must adhere. There are also practice standards that the Certified Financial Planner Board of Standards, Inc. and other regulatory powers impose and enforce. Add to that the burden of the standards and rules of conduct imposed by bureaucratic regulatory agencies such as FINRA and these collectively impose a set of “established norms of practice” on the planner that often restrict the options the planner may present to the client.
The restrictions may not overtly deny a client the best option, but often direct the options along the “established norms of practice” and thereby deny the possibility of any other better-suited alternatives.
None of what I wrote above intends to demean either the designation or practices of those who legitimately profess themselves to be financial planners. It does intend to clarify that the entire process of planning and managing personal finances is shrouded by an imposing oversight structure and that this structure does not always provide Americans with the most appropriate personal financial advice or products.
Case on Point…
Over the past decade, I have met with and trained hundreds of insurance and financial advisors in life insurance and Series 6 pre-licensing, and a wide variety of continuing education topics including ethics.
- Almost every one of these professionals assumed that investing is an appropriate – perhaps essential – part of every American’s personal financial program – an idea that Behemoths in government and on Wall Street slowly injected into the American psyche over the past 30 years.
- One-hundred percent of them assumed that contributing to a 401(k) or its equivalent was the starting point for every personal financial management program – another idea that slithered into our collective psyche in just the past 20 odd years.
- Fewer than one in ten of these – ahem – professionals (not referring specifically to CFPs®) understood the most basic concepts relating to participating whole life insurance, mutual insurance companies, or even the life insurance products they sold most – universal life insurance.
- Only a handful understood the most elemental economic principles that clearly indicate that participating whole life insurance is the best and safest foundation for virtually every personal financial management plan.
One can more easily grasp the reasons for this strange set of facts when one reviews the history of personal financial management in America since 1974, a history that illustrates the slow erosion of control of personal wealth from the pond of individuals to the oceans of government and Wall Street.
Conclusion…
I am often accused of being “down on” financial planners. Not true. I am down on lemming-like robotic adherence to “established norms of practice” that have misled Americans into a financial swamp that consumes both their money and their liberty while denying the validity of more conservative and viable financial management strategies.
Financial planning is an oxymoron when it denies the use of planning tools and strategies at the expense of individual wealth and liberty.
by Jeffrey Reeves youBEthebank.com
Posted in Legal, Ethical, Moral, Money, Personal Financial Management, Whole Life Insurance | Tags: certified financial planner, economics, ethics, financial, investing, investments, liberties, life goals, managing personal finances, Money, oxymoron, personal financial planning, wealth | 3 Comments »
EUREKONOMICS™ On Whole Life Insurance and Universal Life Insurance Fees
November 25, 2009 | Author Dr Agon Fly
I recently received this question from Christine:
Hi Jeffrey,
I hear those whole life policys have huge fees, what are all the fees?
Here’s my initial answer…
Great question, Christine!
Unfortunately your question implies a common misunderstanding so lets clarify that issue first. Clarifying things may be enough, but if it isn’t feel free to question or comment further.
Whole life insurance policies have no fees associated with them other than a small (usually less than $60) “policy fee” that some insurance companies still charge when an application is submitted. Whole life policies do, however, have three variables that affect their financial performance…
- mortality, which is the guaranteed cost of the insurance, which guarantees the death benefit. If the insurer incurs extraordinary claims activity the non-guaranteed dividends are affected but the guaranteed elements are not
- administration, which are variable costs incurred managing the everyday business of the company
- actuarial, rate making, underwriting, general management
- policy issue, policyholder services, and ongoing accounting
- agency management, marketing, commissions, etc.
- investment returns, which pay for administration and create…
- the guaranteed cash values
- the non-guaranteed dividends
Whole life insurance policies have been manufactured and sold in America for over 150 years. These three variables are well understood and very closely managed. That allows mutual companies like Mass Mutual, New York Life, Ohio National Life and several others to perform consistently and predictably decade after decade, pay consistent dividends even during market crashes like the ones we have experienced this decade, and maintain the highest financial ratings possible for decades on end regardles of the performance of the general economy or the financial sector.
On the other hand, Universal life policies (first introduced into the market by stock brokers in the early ’80s), especially variable UL policies (introduced in the mid to late 90′s), and indexed UL policies (first introduced about 2002), have what you refer to as “huge fees.” While whole life policies guarantee the three major elements of life insurance contracts – premium, death benefit and cash value – UL products do not.
The fees in UL policies consist of…
- annually increasing cost of insurance (guaranteed to be level in whole life policies)
- variable administrative costs, which can increase (whole life policies control these costs so they only affect non-guaranteed dividends)
- cash accounts, in which the insurance company shares none of the risk, that decrease as well as increase (whole life policies guarantee these will increase every year)
Because of these factors, these policies are not recommended by the Eurekonomics’ Money for Life Model. That’s not to say they don’t have a place in the financial lives of some Americans. They may. However, they are not apporpriate as the foundation of one’s personal wealth and finances. Whole life insurance is.
Posted in Money, Whole Life Insurance | Tags: economy, financial, financial performance, financial sector, insurance companies, investing, investment returns, investments, Money, policies, risk, universal life, wealth | 1 Comment »
EUREKONOMICS™, The FDIC, & The Money For Life Model…
November 25, 2009 | Author Dr Agon Fly
Someone recently asked about FDIC insurance for the money in the “banks” suggested by the EUREKONOMICS’ Money for Life Modelfor creating wealth and managing personal finances, which recommends that each American should act as his/her own banker. (Some advisors refer to these as “family banks,” “infinite banks,” or “personal banks.” The use of the term “banks,” “banking,” and “being your own banker” is analogous to how one creates wealth and manages personal finances rather than a direct reference to commercial or chartered banks.)
The answer is…
You can use any savings product – or you can also use your mattress – as your “bank.” So, if you choose an FDIC insured product that’s where the insurance comes from.
However, over the past 100 years participating whole life insurance has proven to best serve those who follow the Eurekonomics’ Money for Life Model for creating wealth and managing personal finances. When your money is in participating whole life insurance, it is in the most secure place possible. All state insurance departments require that insurers maintain reserves adequate to cover the death benefits of the policies they have in force and those death benefits are significantly higher than the cash values. In addition, each state maintains a guarantee fund similar to the FDIC, which guarantees some or all of the cash values in existing policies in the event the insurer fails.
By the way, no American ever lost any of the guaranteed cash value of a participating whole life insurance policy, while many Americans have lost money that was held by commercial banks and especially money that was held in speculativeproducts like mutual funds, ETFs, managed accounts, etc. – aka casinos.
PS – I actually know a man that uses a cigar box hidden under a floor board as his bank. His pit-bull’s bed is over that spot. However, we don’t recommend using your mattress, a tin can in the back yard, or a cigar box and pit-bull as your “Bank.”
EUREKONOMICS™ Or A Steady Diet of Financial Misinformation..You Choose
November 21, 2009 | Author Dr Agon Fly
During the last half of the 20th century and the first decade of the new century there have been hundreds – perhaps thousands – of the latest and greatest diet books, diet infomercials, diet clubs, diets that are delivered to your door, diets you can pick up at the store, even urban legends about cabbage soup diets. They all promise miraculous results.
Financial diets have come and gone just like the food diets. Sometimes it’s been…
- real estate trusts (REITS)
- oil and gas limited partnerships
- harvested home equity
- gold and other precious metals
- mutual funds
- on-line stock tracking and picking services
- ETFs
- financial planning (an oxymoron)
- managed money (remember Madoff)
- 401(k)s and their equivalents
- the list could go on for pages
However, just like the food diet fads, financial diet fads fade and disappear.
Just as the weight lost on food diets returns, the gains from financial diets are lost.
Eurekonomics is the centuries old, tried, tested, and proven system that lets you create and control your wealth.
Eurekonomics relies on principles and practices that support every successful personal economy anywhere in the world in any era.
Eurekonomics denies current conventional wisdom that chants the siren songs…
-
- you can have everything you need and want as long as you have enought credit – that means debt on your balance sheet
- tax deductions for retirement savings are in your best interest – ignoring the fact that the taxes you’ll pay on the investments you made could – and likely will be – much greater than the few dollars you save in current taxes
- some “adviser” from a Behemoth company, with credentials that restrict the options and choices she can show you, actually knows something other than what her Behemoth allows her to know
- that Behemoths have some aim other than increasing their bottom line and shareholder equity – as opposed to your best interest
- and on and on…
Discover and learn more about Eurekonomics. You will be glad you did.
Jeffrey Reeves, youBEthebank.com, ltd.
Posted in Money, Personal Financial Management | Tags: credit, debt, economy, financial, investing, investments, Money, Personal Financial Management, Retirement, retirement savings, saving, savings, Taxes, wealth | No Comments »
EUREKONOMICS™ – How Whole Life Insurance Can Save Social Security
November 19, 2009 | Author Dr Agon Fly
Preamble…
There are hundreds – perhaps thousands – of legitimate uses for participating (par) whole life insurance.
Thoughtful and creative insurance and financial guides recognize par whole life as the most powerful, flexible, and versatile financial tool in the US economy. These enlightened guides use par whole life for applications as simple as fulfilling basic family needs, as complex as the most advanced estate planning and wealth management strategies, and for every imaginable personal and business financial reason.
The most advanced among these professionals follow – and teach their clients to follow the EUREKONOMICS™’ Money for Life Model for creating wealth and managing personal finances. The idea that par whole life could also help solve the financial challenges faced by the Social Security System sprouted from the fertile minds of this group of insurance and financial guides.
The Hypothesis…
The premise is simple; the US Congress would exercise its wisdom (hmmm – is congressional wisdom an oxymoron?) and pass a law that required the Social Security Administration to purchase and maintain…
- a ten million dollar ($10,000,000.00) par whole life insurance policy on each member of the House of Representatives upon election
- a fifty million dollar ($50,000,000.00) par whole life insurance policy on each member of the US Senate upon election
- a one-hundred million dollar ($100,000,000.00) par whole life policy on the President, Vice President, and Speaker of the House of Representatives.
These purchases would create an immediate death benefit pool of one billion two-hundred thirty-five million dollars ($1,235,000,000.00). The death benefit would be payable to the Social Security Trust Fund. The US Congress would not be able to get its greed and power motivated mitts on it, as they would be prohibited from accessing this money for the General Fund.
That’s not a lot of money in the grand scheme of things in Washington DC. However, since…
- the makeup of the US Congress is not static and there tends to be a bi-annual 25% turnover in both the House and the Senate due to retirement, lost elections, and expulsions for criminal or ethical reasons
- and turnover in the White House is guaranteed to occur at least every eight years
one could expect the amount in that pool to grow by about 12.5% each year. That means that the initial one and a quarter billion would become about 5 billion in twelve years, 21 billion in twenty-four years, 86 billion in thirty-six years, and over 350 billion in forty-eight years.
Here’s an even better idea. If every US Senator and US Representative had a term limit of twelve years, there would be 100% turnover at least every twelfth year or about 33% every two years . Then the $1,235,000.00 would grow, based on a conservative estimate, to over two trillion dollars in forty-eight years.
Now, if we inflate the amount of death benefit on new policies issued to the newly elected at the same rate we inflate the compensation and expense accounts of the US Congress, reaching a total of over eight trillion dollars in forty-eight years is a reasonable assumption. In addition, using the dividends from the par whole life policies to purchase additional paid-up insurance would compound the total death benefit even further and achieving death benefits of over twenty trillion dollars or more in forty-eight years is a reasonable expectation.
Moreover, since the actual death benefits that the Social Security Trust Fund receives would not be subject to the whims of the US Congress they could safely be used to purchase secured debt. The SSA would thereby retain the principle. This would create a secure future revenue stream for the SSA.
Finally, if the US Congress would allow the SSA to use just a small percent of the current payroll tax to purchase small par whole life policies on the 51,859,000 current Social Security Beneficiaries, then the Social Security System would begin to receive accelerated death benefits as these beneficiaries die and would become solvent that much quicker.
The Real Possibility
Of course, the possibility that the US Congress would actually act in the best interest of “We the people…” or that a scheme like this that might actually work or could overcome political power brokers is about as realistic as the 7.5% year upon year returns illustrated by some insurance and investment advisors for mutual funds and equity indexed universal life insurance policies.
However, if this scenario ever becomes reality, I want to be the agent that sells the policies.
Jeffrey Reeves, youBEthebank.com
EUREKONOMICS™ 101 – Grow Rich Without Risk, Create Wealth Without Worry
November 15, 2009 | Author Dr Agon Fly
Mystery…No. 5 Volume Is More Important Than Rate
Every major product in the financial services business – every type of mutual fund, annuity, variable insurance product, bank CD, treasury bill, note and bond – proudly trumpets its rates. If 2% is good then 5% is better. If 6% compounded is wonderful then 8% compounded is marvelous.
The rates these products advertise, however, are hypothetical. Rate, like the products it applies to, represents the hypothetical aspect of pure unrelenting risk. The only guarantee of touted rates is that they are volatile and vary widely…in other words, they only guarantee is that there is no guarantee.
The facts are:
- If you contribute to your capital base on a regular basis
- If the financial instrument you chose to protect your capital has a guaranteed rate of return
- If you are using it as a source of borrowed funds for your own purchases
- If you are recapturing the principal, interest and fees you would otherwise be paying to others
- If you are not losing the earning power of your money while you are using it
- Then volume – regardless of rate – becomes more important.
In other words, if you are managing your money the way banks manage money, volume is more important than rate.
Remember the refrigerator at $1,000.00. If you financed it yourself and paid yourself back at the rate of $100.00 per month plus 12% interest, you would recover the entire $1000.00 dollars in less than a year, capture about $50.00 in interest and have the refrigerator to boot. Does the 12% rate have great value here or does the recovered principal – volume – prove more useful?
Remember what Will Rogers said: “I’m not so much concerned about the return on my money as I am about the return of my money.”
Mystery…No. 6 “Conventional Wisdom” Is an Oxymoron and Tax Deductibility is a Trap
“If you do the same thing everyone else does then you’ll get the same results they do.” – Dr Agon Fly
During the recent bear market, some of the highest paid advisors and investors were able to brag only that their clients lost less than others’ clients lost. “I only lost 35%” is a bragging line. Hardly a single mutual fund showed a gain. 401k investments went down to less than half their original values in some cases. All of these results occurred by following “conventional wisdom,” the thinking that tends to dominate any given topic.[1]
The reality is that current financial thinking, planning, and practices are akin to driving your car by looking out the rear view mirror. You get a great view of where you have been but no perspective on where you are going. You could also say it’s like mapping; it gives you a two dimensional view of what might be in store but cannot tell you about the bridge that just washed out.[2]
Part of that thinking is that you should take advantage of every tax deduction possible no matter what. This is a trap. A client of mine follows this philosophy to the extreme. If there are two choices and one has a tax advantage over the other – even if both were tax advantaged – he always chooses the one with the current advantage.
The results have been demonstrably horrible. His 401k went down almost 80%. His earnings were so low that he lost almost $100,000.00 in the tax deductions that he pursued and his balance sheet is worse now than it was 5 years ago. He is so busy avoiding taxes (legally) that he loses focus on his business and his own best interest.
The Debt Paradigm has created the personal economies of today; low savings rates, loss of the long-term perspective, excessive attention to current tax advantages, follow the crowd investing and saving strategies, high debt, constant refinancing of our home equity and on and on.
It is time to walk away from the madness of the Debt Paradigm and employ solid strategies and practices of the Money for Life Model that promise a solid financial base that the vagaries of the market and the whims of the IRS cannot disturb or destroy.
Mystery…No. 7 Compound Interest is Magic… Triple Compounding is Astounding
“The most powerful force in the universe is compound interest.” Albert Einstein
Compound interest on money you have saved (not invested) is the secret to financial success. What if you could save your money in a century old financial product where:
It earns compound interest – guaranteed
- You can borrow against it and it still earns guaranteed compound interest even on the borrowed amount
- You can repay the money that you personally borrow and reuse the borrowing power over and over
- Your borrowing costs are minimal or non-existent
- The interest you save by not borrowing from others becomes a secondary source of savings and another compounding factor
- Your money earns tax free dividends even when you have borrowed against the money
There are such products. Cash value life insurance, especially participating whole life insurance, is the cornerstone of the Money for Life Model for managing your personal economy and creating wealth.
Epilogue
There are a couple of thousand insurance and investment companies that do not have reliable cash-value life insurance products in their portfolios. There are fewer than two dozen companies that participating whole life insurance as one of their primary products.
It’s obvious that the almost one million insurance and financial advisors that can’t sell whole life insurance will not praise it as the most versatile, flexible, and powerful financial product in the marketplace today.
The companies that sell participating whole life insurance policies are the most respected and reliable insurance companies in the world. Here’s a partial list of companies that manufacture and sell participating whole life insurance – in alphabetical order:
- Lafayette Life
- Mass Mutual Life
- Mutual Trust Life
- New York Life
- Northwestern Mutual Life
- Ohio National Life
- One America Life
- The Guardian Life
These companies all understand and support the Money for Life Model in one fashion or another. They do not specifically endorse the Money for Life Model. However, their products and their practices support the use of participating whole life insurance as a savings vehicle with generous loan provisions, flexible premium options, and technical support for insurance and financial advisors that teach the Money for Life Model to their clients.
If you would like to learn more about participating whole life insurance and the Money for Life Model for creating wealth and managing your personal economy go to www.youBEthebank.com where you can find a link to an insurance and financial advisor that is well versed in the Money for Life Model and the use of participating whole life insurance as the foundation for a successful personal economy.
[1] Dr Agon Fly defines conventional wisdom this way, “Thinking what everyone else thinks and doing what everyone else does because that’s what everyone else thinks and that’s what everyone else does.”
[2] On a recent trip through New Mexico I followed a “scenic” route on the map that led me down a precipitous, 1,000 foot, one lane, unpaved, twisting and snow covered road with no turn-arounds, into the Rio Grande Canyon. I cursed the map, aka “plan”. I didn’t think about my preparedness, which called on every driving skill I’d ever learned and 40 years of focused meditation practice and got me through the ordeal. My wife, Sandy, on the other hand, was frozen and white knuckled during the descent.
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EUREKONOMICS™ 101 – Grow Rich Without Risk, Create Wealth Without Worry
November 11, 2009 | Author Dr Agon Fly
Mystery…No. 2 You Know Best What’s Right for You
The Debt Paradigm preaches that you cannot fully comprehend your own personal economy. It implies that the professionals who subscribe to the Debt Paradigm are in some way wiser, more knowledgeable about your situation, better informed about your needs, and perhaps even cuter than you.
BUNK!
You do not need a financial planner with an abundance of letters after her/his name and the logo of a big company on his/her business card[1] and a sales oriented computer program to tell you what is right for you and your family.
In fact, the financial and investment professionals most apt to help you are most likely working with smaller firms and choose not to align themselves with just one financial advisory firm’s products. It is also likely that they have narrowly focused practices and a broad understanding of the markets they serve.
Regardless, you need to equip yourself to direct the course of action. Only you should decide to incur the “pure unrelenting risk” of an investment. Your cousin Louie, golf partner, co-worker, or professional colleagues are always available with hot tips and enthusiastic advice. Ignore them. When you need advice, seek out an investment professional[2] – be it in the stock market, mutual funds, real estate, commodities, foreign currency or any other potentially lucrative investment.
And remember, it’s up to you to protect your capital base. An investment advisor is not compelled to do that.
Mystery…No. 3 Don’t Risk What You Can’t Afford to Lose
Ask yourself the question, “What is it that I can’t afford to lose?” This is a money question but the answer is not purely about money. Excessive consumer debt, job losses, family crises, medical expenses and long-term care costs underlie most bankruptcies.
However, all bankruptcies result from a lack of a capital. If you are trapped in the Debt Paradigm, you are at risk. You have saved too little, invested too much, and assured the success of some Behemoth while critically damaging your own personal economy.
Your capital base is not secure or is non-existent. You are at risk because you are employing a set of strategies and practices that are not based on developing a capital base and thereby place your family and your fortune – that which you cannot afford to lose – in constant jeopardy.
It is only by having an adequate capital base that you are able to withstand and survive what Shakespeare called the “slings and arrows of outrageous fortune.”[3] You cannot afford to risk your capital base.
However, as we point out repeatedly in this booklet, the strategies and practices of The Money for Life Model allow you to build a solid base of capital and avoid the risk of losing it. This model of your personal economy relies on the steady accumulation of capital and the concurrent elimination of debt and guides you through a program that lets you control all of the money that flows through your life.
This leads us to the next mystery.
Mystery…No. 4 Why Debt = Financial Death
The foundation of all banking is debt. The bank borrows from you at 2% in your savings account and lends it to someone for a car at 8% or for some furniture at 15% or on their credit card 22.99%. The reason debt is not death for the bank is that the bank borrows to lend and for no other reason.
The reason debt is death for most Americans is that they borrow to spend. In fact, some put the interest paid out of every personal dollar earned as high as 36 cents. That is higher in some cases than all income and payroll taxes combined.
The average person will pay almost two times the purchase price of their home in interest, will pay enough interest on automobiles to buy an extra car every ten or twelve years and might pay their credit card companies up to 2000% of the principal balance before paying off the card. Is it a wonder that the savings rate is less than 0%? This is financial suicide.
Take the example of a $1000.00 refrigerator. The manufacturer borrowed the money to build the plant and buy the parts to build it. The distributor borrowed the money to lease the warehouse to store it until s/he placed it in inventory and in the store. The trucker borrowed the money to buy the delivery truck. You borrowed the money to buy it.
Who’s making all the money? You got it – the bank. What reduction in cost would occur if each entity financed their part of the process in lieu of borrowing from the bank? Obviously you control only a small portion of that series of borrowing transactions but, if you could eliminate some or all of the 35% of your income that you pay to others as interest, your personal economy would work better for you and your family.
It’s not a bad thing that the bank – or someone – makes money from lending. Banking is essential to the economy of the world and just as essential to your personal economy. The important thing to be aware of and to remember is that you are not currently in the banking business…but you need to be in the banking business.
You need to find your way out of the Debt Paradigm – where you are a bank customer – and adopt the Money for Life Model where you are both the customer and the “bank.”[4] In The Money for Life Model, your debt is productive for you just as it is for a moneylender in the Debt Paradigm.
This does not imply that you sever your banking relationships or that the commercial bank has no place in your personal economy. There are many occasions when you may want and need strong banking relationships; when following the Money for Life Model makes you a very attractive customer of the commercial bank, and may even earn you preferred treatment and rates.
The Money for Life Model, however, transfers a major portion of your borrowing from moneylenders to your personal “bank” so that you recover the principal, interest and fees that you would otherwise pay to others.
[1] Industry designations and accomplishments demonstrate that an advisor has acquired specialized knowledge about finances. It is not an indicator that s/he has skill and wisdom…one can know all about sand castles and have the skill to build one but lack the wisdom to wait for low tide.
[2] Part of our practice is to identify and refer these kinds of professionals to our clients when appropriate.
[3] Hamlet, Act III Scene I – William Shakespeare
[4] The word “bank” in The Money for Life Model refers to any savings vehicle that you own and use as a source of borrowing and that you plan to repay as you would repay a loan from a commercial bank, credit union, etc.
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EUREKONOMICS™ 101 – Grow Rich Without Risk, Create Wealth Without Worry
November 7, 2009 | Author Dr Agon Fly
The Seven Mysteries – aka Wealth Builders
Moving from Bad Habits to Good Practices
Prologue
The difference between a habit and a practice is awareness.
If a habit relies on thoughtless performance, a practice relies on thoughtful performance. The behavior can be the same, e.g., locking the doors at night. Awareness makes the difference.
Conventional wisdom means that you do what everyone else is doing and think what everyone else is thinking because that’s what they are doing and that’s what they are thinking.
Do the Behemoths – that grow wealthy by convincing you to follow conventional wisdom – do they want you to be more thoughtful? Of course not.
Is there a more thoughtful way to accomplish what you want to achieve when it comes to creating wealth and managing your personal economy? Of course. It’s called common sense.
The Seven Mysteries aim to tear down the wall between Conventional Wisdom and Common Sense so you can thoughtfully grow rich without risk and create wealth without worry.
Read on…
Mystery No. 1 Pay Yourself First – But Don’t Count Your 401k
“Pay yourself first” is an axiom that’s been around for centuries – perhaps millennia. What it means is that your personal economy rests on the foundation of a personal savings plan – as opposed to an investing plan – and recognizes the need for a solid base of readily accessible capital.
The issue is not whether or not you need to put a capital acquisition strategy in place. You need to. The question becomes where you should put the money. Conventional wisdom from the Debt Paradigm say you should “max out your 401k.” This is extremely bad advice for you but great for the Behemoths.
The problems with relying on 401k’s, IRA’s and the like as your capital base are manifold:
First and foremost, you give up control of your money; first to your employer, next to the investment companies that manage your money, and finally to the IRS
- If you can get to your money at all, tax qualified plans restrict how much of your money you can use, and often restrict how or whether you can use it
- The money you withdraw – as opposed to borrow – is subject to penalties and/or taxes
- You have to repay borrowed money plus any fees associated with any loans you take within five years or pay the penalties and taxes referred to above
- You normally have to ask permission or get approval to get your hands on your money
- Your money is only available after much paperwork and then only on a restricted basis when you need it for any other reason such as an opportunity, a crisis, a child’s education, a parents long term care…
Savings accounts, certificates of deposit, money market accounts, and similar financial instruments have a place in your portfolio, but they too have shortcomings as base capital. To access the money in these funds you must deplete them and therefore lose their ability to earn interest.
Granted, the money in these funds is readily available if you lose your job and you need money to see you through to your next job or get a new business up and running. But, if the next job comes later rather than sooner, or the new business hits a bump in the road, your capital could be depleted and you would have no other resource to fall back on – except perhaps also depleting the 401k that you rolled into an IRA when you left your employer. And if that doesn’t last…
Mutual funds, real estate and any other investments (remember, investments are based on pure unrelenting risk) are subject to market conditions (think 2008 – 2009), and may not be fully liquid. The only way you can get your money out of them is if you sell them or borrow against them.
Moreover, you have to beg permission from a lender to borrow against your personal assets. Add to this degrading process that neither selling nor borrowing from others preserves your capital base and both deplete your resources. Worse still, the costs of borrowing drain your pocketbook while it fills the coffers of some Behemoth.
What’s a person to do? The answer is to step away from the Debt Paradigm and gain a new perspective. We call this new perspective or paradigm The Money for Life Model. It is a way for you to emulate the conservative financial strategies applied by savvy Americans and some of the most reliable corporations in the world for the past 150 years or so.
There are also financial instruments that allow you to build a fortified base of capital that you can use to create true wealth. From a very practical point of view, these products allow you to become your own banker, finance your life, and release yourself from the impoverishing clutches of the Debt Paradigm.
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EUREKONOMICS™ 101 – Grow Rich Without Risk, Create Wealth Without Worry
November 5, 2009 | Author Dr Agon Fly
Myth…No. 6 – My Financial Advisor Knows
This may be the biggest myth of all. Some of my best friends and clients are financial planners and advisors. They perform a valuable service, especially those who are specialized and focused on one particular aspect of the market and have an open mind toward the processes that you and I go through. I frequently refer clients to these professionals when the clients are in a position to use their expertise and services.
The general public, however, continues to support the myth that big companies with famous names (I call them Behemoths) automatically provide quality financial advisors. Recent history shows just how false that assumption is. Quite the opposite is true. Many of the well-known financial firms recruit anyone who is willing to endure their training and who can obtain the licenses required to sell financial products. A large percentage of those recruits fail within one year.
Moreover, these so-called financial plannershave very little leeway in terms of the planning they actually perform. Compliance Nazis severely restrict what these advisors can discuss with their clients and computer programs generate most of the charts, graphs, and spreadsheets that they call a plan. In addition, the Behemoths structure the outcomes in great part to assure the selling organization that the planner (aka sales rep) highlights company products and does not present anything to you that might land the firm in court.
Many – if not most – of the “plans” that these programs regurgitate are not plans at all. They are nothing more than sales presentations that encapsulate and perpetuate the conventional wisdom embodied in the myths we are discussing.
It’s a Stepford World and the well known financial planning firms see you as the Stepford Client of a Stepford Planner.[1]
Myth…No. 7 – I’ll Never Quit Working
Yeah. Right.
I actually believed this at one point in my younger life. It’s true in a way. It’s true if you mean that you will always pursue life goals. It’s not true if you mean that you will always work to earn an income to support yourself.
Ask any of the thousands over fifty who have had to find a job after a layoff if the work they were able to find was in fact equivalent in either pay or satisfaction to the work they had before. You discover that most of the time it is not.
You will also find out that many of those folks are trying to find ways to retire. They do not want necessarily to quit doing useful things. They just want to be able to spend their time and their lives doing something valuable to themselves and others – whether or not it produces income.
Consider another case. Sally was a successful consultant with a Fortune 500 company. The company put her on a highly sensitive and visible assignment that required long hours, extensive travel and intense focus. Long months into the project the 16 hour days, restless nights, bad diet, stress and physical exhaustion claimed Sally physically, mentally, emotionally and spiritually. She crashed.
At age 56, she is unable to work and is limited to her Social Security disability income of less than $1,500.00 per month. The bear market in 2001 and 2002 decimated her retirement funds and her prospects for any kind of future work are minimal at best.
The myth is that we will have an ability to find work or even to do work in the future. It is naïve at best to be unprepared for the probability that we will be challenged in some way in this regard.
Afterthought…The Seven Myths Are Wealth Destroyers
“Bad thinking creates bad habits” – Dr Agon Fly
Myths result from consistent bad thinking. Bad thinking transmutes into bad habits, which in turn fortify the myths. It’s a destructive and mind numbing cycle.
America’s understanding of personal economics today is as unsophisticated as the understanding of disease was a hundred years ago. You may question whether some or all of the myths are valid or whether or not they apply to you. It is more difficult to question the facts that surround and support them:
- Americans are addicted to debt; they have come to believe that credit is more important than savings. Proof? Americans have a lot more debt than they do savings.
- Most Americans are naïve when it comes to personal economics. Proof? Americans have a lot more debt than they do savings.
- Most personal economies are in a shambles. Proof? Americans have a lot more debt than they do savings.
- Americans save too little, invest too much, and often do both in the wrong places. Proof? Americans have less than a month or two of cash to cover budgetary needs and most have lost over half of the money the invested in their retirement accounts.
- All investment markets are based on pure unrelenting risk. Proof? None needed.
- Most financial plans are actually nothing more than marketing materials individualized to support a sales effort. Proof? Think about it.
- Most Americans are unprepared for their future – especially if it is not the future they planned. Proof? In addition to the above: Inadequate life insurance, disability insurance, long term care insurance, wills, trusts, guardianship for children…need we go on?
In the next part of this series, we will look at the Seven Mysteries that are wealth creators. I hope that they help you debunk and replace the Seven Myths.
by Jeffrey Reeves MA, youBEthebank.com
[1] An elderly client of mine was allowing her daughter and son-in-law to live with her. She asked me to counsel the young couple on building a personal economy. After several months it became apparent that both were unwilling to deal with the issue. They refused to balance their checkbooks (they each had one), formulate and live on a budget or curtail their spending (they were spending all of their money and nearly $3,000.00 of mom’s money each month) so I withdrew my support. The daughter was hired as a “financial planner” by one of the Behemoths just a week before I withdrew.
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EUREKONOMICS™ 101 – Grow Rich Without Risk, Create Wealth Without Worry – Cont’d
November 3, 2009 | Author Dr Agon Fly
Myth No. 4 – I Have A Retirement Plan From Work
Myth: my company has a pension/profit sharing/401k/other plan that promises me a secure future income.
Reality: Enron, MCI, US West/Qwest, Mutual Benefit Life, United Airlines, and many other well known and superficially reputable and stable companies have defaulted on retirement plans in the past and many more will do so in the future.
Banks, investment firms, and automobile companies as easily recognized as America itself and many other businesses are embracing bankruptcy and the elimination of pensions and other retirement plans in the process.
I am not predicting an endemic financial catastrophe in America beyond what we have already seen (Nov 1, 2009). However, it is imprudent to rely on the good will of a corporation whose only justifiable objective is to make a profit for its shareholders – even if it means adversely affecting the lives of its employees.
Remember, only money – and not people – shows up on the balance sheets and the earnings statements of public and private businesses.
“Wait a minute” you say “my company has a long history of taking care of its employees and I believe that it will take care of me.” Well, that may be so. If you truly believe that then, as you prepare for the future, you can incorporate that belief into your equations.
I suggest, however, that you not rely on that as an inviolable truth and an changeless premise of your personal economy and financial plan. You must also prepare for the possibility – regardless of how remote you may think it is – that your future income from your employer’s plan may not be there at all or may be less than current projections would indicate.1[1]
There’s another false premise in retirement programs and the way we talk about them in the current paradigm. Have you ever heard that you should contribute to your retirement plan today because you are in a higher tax bracket now than you will be when you retire? Indeed?
If you are successful, the same person who tells you this falsehood will next tell you that if you follow his or her program you will have this incredible amount of money to create retirement income. Guess what, if they are correct you will find yourself in a higher tax bracket with no deductions to offset your income.
Which is true?
All tax qualified retirement plans have strings attached and most of the time, in the end, they generate more money for the IRS than the tax collectors give up in revenue they lose to current deductions.
Myth No. 5 – My Investments Will Carry Me
There is a belief prevalent among American investors that “staying the course” in the market is wise. The theory is that over the long-term if you ride out the low times your portfolio will increase with the general trend of the market and you will be OK.
Bunk!
Compare that with the reality that Wall Street averages showed no gain at all for almost half of the 20th century. Consider also that only a handful of the million-dollar per year money managers of the nearly 17,000 mutual funds earned their investors even 1% during the two recent bear markets.
In other words, the professional money managers with their analysts and researchers working full time at very high salaries (many earn over $1,000,000 per year to manage our money in mutual funds) lost money.
Do individual Americans who are doing a thousand other things every day to earn money, care for their families, attend their churches and synagogues, play or support our kids who play softball, basketball and soccer, ski, and on and on – do they have the time, energy, resources, insight, wisdom, courage and experience to emulate these people?
Not in a million years; who would want to emulate the losers in that crowd in the first place? Look where they’ve led American families over the past fifty years.
How about real estate? Here again, it takes skill, patience, education and experience to succeed in the real estate investment business. Most who do succeed are full time real estate investors who have prudently eased their way into the business and out of their former occupations over a period of years.
Many of them understood intuitively that they needed to find ways to finance their own adventure without depending on borrowed money. That realization allowed them to endure its vagaries and survive its volatility.
Suggesting that everyone can follow this path makes millions for the infomercial producers who hawk books and tapes, but does not produce similar financial results for most buyers of those educational products. I’d venture a guess that fewer than 1 in 10,000 who buy a real estate investment course from an infomercial actually succeed.
Investment in the stock market, in real estate or anything else you might imagine is not necessarily an incorrect decision. It is a myth, however, that individuals who are not following those markets on a full time basis can, in the short or the long run, beat or even stay with the market.
In fact, while the market averages showed a decent compound annual return from 1980 through 2005, individual investor performance during that same time period was a miserable 3.2%. The vast majority of mutual funds did not manage to perform as well as the averages either.
If you are lucky, your portfolio today is above 50% of what it was a few years ago.2[2] Investments are risky. All investments are risky. That is the very nature of the beast. Bernard Baruch, one of the mythical pros of Wall Street, said that to be successful in the market you need the wisdom of Solomon, the patience of Job and the courage of a lion. Investing is not the place for the uninitiated to put the money that is the foundation of their personal economy. The markets are pure unrelenting risk. They are casinos and the casinos always win while most who spend their money there lose.
1[1] I realize that the paradigm that most Americans rely on includes a perception that business and government programs are on some level inviolable. Reality is otherwise. So is experience and it is important that our preparations assume failure of these systems to some extent. That does not imply that all benefits of these programs are lost but only that we must build our own fortunes as if they could be. If they aren’t, then we are much better off. If they fail completely we are still OK. You can do this. A Money for Life Guide can show you how.
2[2] Be aware that if your investments loose 50% – say drop to $50,000 from 100,000 – they must gain 100% -rise from $50,000 back to $100,000 – before you break even and have the opportunity to realize gains.
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EUREKONOMICS™ 101 – Grow Rich Without Risk, Create Wealth Without Worry – Cont’d
November 1, 2009 | Author Dr Agon Fly
Myth No. 2 – “My Home Will Keep Me Secure.”
Let me tell you a story.[1] Abigail had been in the military for 19 years when a stroke put her out of commission at the age of 52. She only qualified for a small military pension and a small monthly Social Security disability/retirement income.
“But,” she thought, “all is well. I own my home in a very nice neighborhood in a very nice city and my small income is more than I need for food clothing, entertainment, church and my VA benefits take care of my medical expenses.”
Fast-forward from age 52 to age 72. Abigail’s home is still in one of the nicest neighborhoods and is quite valuable but the myth is shattered. Her home is in need of significant repair. However, it had a $60,000.00 first mortgage on it that she borrowed to pay bills, make prior repairs, purchase a handicap-equipped car and pay off her credit card debt. The mortgage payment consumed over half of Abigail’s monthly income so she skimped on everything else and ran her credit cards up again. Her security – not to mention her comfort and peace of mind – were at risk and the picture wasn’t very rosy.
Fortunately, I was able to introduce Abigail to an ethical reverse mortgage specialist who helped her obtain a reverse mortgage. She paid off the $60,000.00 first mortgage, funded the needed repairs and freed up her entire retirement income for monthly expenses. She was also able to leave over $40,000.00 in the reverse mortgage for future emergencies and opportunities.
Now we have to wait and see if she outlives this strategy, which allows her a modicum of security. If Abigail lives beyond age 84 or 85 she may be right back where she was when I met her in 2004, and may not have the equity in her home to support a refinance of the reverse mortgage.
Abigail is not an exception. There are hundreds of thousands of older Americans who have homes that are paid for (some say as high as 77%) but little or no monthly income to pay for essentials. So, the equity to debt cycle continues for them. Eventually these brave Americans, who have given their lives to their families, churches and country either find a compassionate and informed advisor who guides them out of their turmoil or they end up discouraged, disparaged and depressed welfare wards of the state.
Many Americans had foresight enough to anticipate the possibility that a paid-for home would continue to be an expense and put aside extra money to deal with that reality. They were Savers.
Myth No. 3 – “I’m a Saver.”
“That’ll never happen to me,” you say. “I’m a saver and have money in CD’s and other investments.”
Meet Edgar and Edith Smith. Edgar had worked for decades and saved a part of what he earned every paycheck. He did not have a retirement plan because the small company he worked for cancelled it years earlier and, although he received a small settlement amount at that time, he and Edith were receiving no significant income from it.
Edith was a stay at home mom and had never worked outside the home so she did not have her own retirement or social Security. Even so, the Smiths were doing OK on Edgar’s Social Security and the earnings off their CDs – or so it seemed.
Then Alzheimer’s Disease attacked Edgar. In less than two years the savings were gone as was the income from the savings. Within another year, Edgar was in a nursing home on welfare and Edith, who had never had to deal with money issues or home repairs and certainly not with a completely debilitated Edgar, was herself in serious condition from stress, depression and near poverty.
Events that happen to people every day destroy the myth that savings are in some way secure: illness, uninsured losses, the needs of children and grandchildren, and the ravages of addiction to alcohol, gambling or drugs that afflicts people of all ages, both genders and every social condition.
Savings are also subject to market risk. Interest rates like those we experienced in the past few years (1999 – 2004) dropped from about 7% to as low as 1% and decimated the income derived from savings. Folks who were used to getting about $600.00 per month from their savings ended up with less than $100.00.
The savings rate in America in December 2005 was a negative .05% of net earned income. It doesn’t take a genius to realize that such a low rate of savings will never equate to some sort of future security. Even careful savers who might exceed the average could never accumulate enough money to offset the unrelenting onslaught of inflation and unforeseeable events.
[1] I’ve used aliases in all stories to protect the privacy of the subjects. The stories are all true and accurate in every detail.
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EUREKONOMICS™ 101 – Grow Rich Without Risk, Create Wealth Without Worry
October 28, 2009 | Author Dr Agon Fly
Seven Myths and Seven Mysteries of Personal Finance and Personal Economics
For the past half century, the hubris-laden financial industry has led Americans to believe that the individuals and organizations on Wall Street – renamed Dull Street by the author – and their minions on Main Street know more than we do about our personal finances and personal economies.
In fact, many of these self-appointed gurus of finance ended up penniless, in jail or in failed enterprises…
- EF Hutton
- Executive Life
- Mutual Benefit Life
- Arthur Anderson
- Indy Mac Bank
- Washington Mutual
- Freddie and Fannie
- Bear Stearns
- Lehman Brothers
- Bernie Madoff
- and the list goes on
Most financial executives and advisors – in my experience – have bought into the myth that the typical American is incapable of understanding personal finances and economics much less managing them effectively. The unfortunate reality is that many of these advisors don’t actually know enough about personal economics themselves to even discuss the topic intelligently.
They, like the clients they serve, have embraced the myth we call The Debt Paradigm.
These advisors know all about products. In fact, the financial tools that many advisors use to develop personal financial plans for their clients are often no more than sales tracks that lead to the sale of specific products and services that redirect the money of everyday Americans into the accounts of their Behemoth bosses.
This is especially true of those advisors that are captives of Behemoth financial organizations most interested in selling their own products under the guise of financial planning and advice. (This class does not include insurance companies that are selling and supporting particpating whole life products as the mainstay of their business.)
The Seven Myths and Mysteries Series is an attempt to begin (just barely, but to at least begin) deconstructing the Debt Paradigm myth and replacing it with a simple and effective model that American families can use to grow rich without risk and secure wealth without worry.
This kind of model doesn’t rely on esoteric insider analyses or on “secret” strategies known only to the initiated few. It rests on common sense and readily available information and ideas. The amazing part of that realization is that the “many” purport to have the inside track but the “few” – and you are among them because you are reading this – are the ones who actually do.
The two most important ideas you’ll take away from this series are these:
1. There is a model for helping you manage your financial lives and creating a personal economy that you control
2. You are in charge! It’s up to you to make your money work for your benefit and that of your family, including (and especially) your future generations.
We wish you well in your quest. We sincerely expect and desire that Seven Myths and Mysteries, while it does not claim to be an exhaustive study, will add to your understanding and insights about how to manage your personal finances and construct your own personal economy.
Here is a list of the Seven Myths and the Seven Mysteries we will discuss in this series. Some are very easy to wrap your mind around while others require a closer look.
Seven Myths – alias Wealth Destroyers – Bad Thinking Creates Bad Habits
1. I’ll Do OK on Social Security
2. My Home Will Keep Me Secure
3. I’m a Saver
4. I Have A Retirement Plan From Work
5. My Investments Will Carry Me
6. My Financial Advisor Knows
7. I’ll Never Quit Working
Seven Mysteries – aka Wealth Builders – Moving from Bad Habits to Good Practices
1. Pay Yourself First – But Don’t Count Your 401k
2. You Know Best What’s Right for You
3. Don’t Risk What You Can’t Afford to Lose
4. Why Debt = Financial Death
5. Volume Is More Important Than Rate
6. “Conventional Wisdom” Is an Oxymoron and Tax Deductibility is a Trap
7. Compound Interest is Magic…Triple Compounding is Astounding
Myth No. 1
“I’ll Do OK on Social Security.”
I believe in Social Security because I believe in the United States of America. I believe that Social Security will survive its current troubles because Americans are a good and compassionate people.
However, it is naïve to believe that Social Security will continue in its current form. It is equally turning a blind eye to believe that Social Security is at all adequate as the reliable and only source of income for those who qualify for its benefits.
Most of us look forward to a time in our lives when we can dedicate our energies to pursuits that fill our souls regardless of whether or not they fill our pockets. Some of us want that to happen when we are 40, 50, or 60. Others can’t imagine not following their career path until they step into the grave.
Social Security can help those who qualify for its benefits but it is a myth that Social Security is liberating enough to permit us to live in even the most basic prosperity one expects in our wonderful country without any other source of income. For most of us it is not even adequate to pay for rent and food much less the lifestyle we have imagined for ourselves as we age.
The stories about folks who relied on Social Security alone (whether or not by choice) and ended up eating dog food or having to choose between necessities and medical care abound. This is not urban myth.
A simple bit of arithmetic demonstrates that the costs of a modest apartment, food, transportation, Medicare coverage, clothing and a modicum of entertainment add up to more than a monthly Social Security check – even if you are receiving the maximum Social Security has to offer.
Moreover, if you can get by today, you will find shortly that inflation of the cost of necessities added to unexpected but unrelenting medical and long term care costs will quickly erode the value of that monthly check.
Living on Social Security alone is a Myth.
This provides a departure point for the second myth: Many believe that owning a home will insulate them in some way from poverty and need as the years go by.
That will be the first topic for the next installment of The Seven Myths and Mysteries.
Posted in Money, Personal Financial Management, Retirement | Tags: debt, economics, economy, financial, investing, investments, Money, personal economics, personal finance, personal financial plans, Taxes, wealth | No Comments »
Your Personal EUREKONOMICS™: Ideas And Ideals VS. Ideology
September 17, 2009 | Author Dr Agon Fly
Setting the Stage…
The men that came together in Philadelphia to craft the Declaration of Independence in 1776 were, for the most part, ideologues. Thomas Jefferson, John Adams, Benjamin Franklin, Roger Sherman, and Robert R. Livingston were on the committee that drafted the Declaration of Independence.
Adams and Jefferson in particular were at different points on an ideological spectrum. How was it, then, that they wrote a document that emancipated not only the United States of America but also millions of people since, based only on its content?
The answers are many, but one can sum them up in two words: ideas and ideals.
Benjamin Franklin was the third major force on that committee. Franklin was not an ideologue. Quite the contrary. Benjamin Franklin was a man of principles just as John Adams and Thomas Jefferson were. His principles were not, however, motivated by ideology but by ideas and ideals.
Both Adams and Jefferson were intimately familiar with Franklin from years of interaction. They each respected his sagacity and insights. They, too, were men of ideas and ideals. They willingly laid down their ideological swords and took up the battle for American Independence with ideas and ideals as their primary weapons.
James Madison, George Mason, Alexander Hamilton, George Washington, Benjamin Franklin, and about fifty other new Americans met in Philadelphia in 1787. Their aim was to debate and draft a new constitution for the fledgling United States of America.
Almost every participant offered a warring ideology about what the US Constitution should end up looking like. Over an arduous two years (1787-1789) of clashing ideologies and heated debate, ideas and ideals won over ideology and young America adopted the greatest governing document ever devised along with the first ever Bill of Rights guaranteeing individual rights over government control of individuals’ lives and activities.
History clearly demonstrates that Ideologues claim leadership by self-reference and by demanding rigid adherence to their own dogmatic declarations. These pseudo-leaders do not encourage ideas and ideals; they discourage and sometimes even punish them. If you aren’t convinced of this premise by the history of 20th century Europe, Russia, China, Japan, South Africa, Afghanistan, etc., etc. etc., remember your high school and college reading: 1984 by George Orwell and Lord of the Flies by William Golding.
Ideologies and the ideologues that promote them only masquerade as leaders. They are not interested in your wealth and well-being. They are absorbed and governed by a slavish adherence to a set of principles regardless of how their ideology affects the rest of the world. They aim to accomplish their goals just because they are their goals.
Act I – Enter The Federal Government
The National debt is approaching twelve trillion – that’s 12,000 x 1,000,000,000. There are about 306,000,000 Americans; about 100,000,000 American families. My calculator doesn’t have enough digits to even figure out how much each American individual and family owes based on these numbers. You can find out at… http://www.bigredcalculator.com/index.html
It is the adoption and slavish adherence to an ideology based on profligate spending in Washington DC and the abandonment of the American ideas and ideals expressed in the Declaration of Independence and the US Constitution that created this massive debt. Our government is corrupt. Our representatives are more interested in the accretion of power and the accumulation of personal wealth than they are in the wealth and well-being of Americans.
Only American citizens and citizen families can resurrect those ideas and ideals and reinstate them as the foundation of their personal economies and our country.
Act II – Enter the EUREKONOMICS™ Model of Personal Economics…
The EUREKONOMICS™ Model for creating and managing your personal economy does not aim to rehabilitate the power and money addiction of the Federal Government, the Executive Branch and the US Congress in particular. Political action will ultimately dethrone the self-appointed gods of government.
Instead, The EUREKONOMICS™ Model empowers you to thrive regardless of the antics in DC by teaching the 13 Immutable Laws of Personal Economics and guiding you in the practice the 7 Essential Steps for Creating and Managing a Successful Personal Economy.
Act III – Americans Take Action
The EUREKONOMICS™ Model is over one hundred years old. Millions of Americans have tested it and proven that it works in good times and bad. There are currently several hundred advisors all across the US that have studied this personal economic model and have adopted it for their own and their clients personal economic structures.
I encourage you to contact one of those advisors. They are listed on www.youBEthebank.com
Posted in Money, Personal Financial Management | Tags: debt, economics, economy, Money, wealth | No Comments »
Time To Start Investing Again? EUREKONOMICS™ Cautions, “STOP!”
August 25, 2009 | Author dragonfly
Remember that averages are meaningless in planning your future. Are you going to live the average life span? Is your retirement account average – $143,000? Do you expect to receive the average social Security check – $1077.00?
Remember also that most of what the pundits,financial planners and investment advisors call “investments” are actually speculations.
Benjamin Graham, the Dean of Wall Street and Warren Buffets’ mentor put it this way, “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” Benjamin Graham, The Intelligent Investor” 4th ed., 2003, Chapter 1, page 18. (emphasis is mine)
Benjamin Graham doesn’t suggest that you risk your principal for the possible but improbable big swing upward. Do not jump back into the market. You may miss an upswing and you may miss the upcoming downturn as well. If you are in the lifeboat and the ship doesn’t sink, you can climb back on board. If you are in the lifeboat and the ship is the Titanic, you’ll be happy as hell that you got off and stayed off.
Here’s a sobering reminder of what’s happened to the average investor and the averages over the past 20 years.
http://www.ifa.com/quoteoftheweek/pdf/QoW_55.pdf
by Jeffrey Reeves youBEthebank,com, ltd
Wake Up America! Nationalizing Health Insurance Will Cost You A Lot Of Money.
August 23, 2009 | Author dragonfly
No matter what President Obama says and regardless of his eloquence saying it, it would be a dire mistake, completely lacking in common sense, wisdom, and – mostly – regard for the US Constitution, for “We the People” to allow or accept any health care or health insurance program created by the US Congress and run by the US Government bureaucracy.
The record of accomplishment for US Government run programs is abysmal.
- Congress established The U.S. Post Service in 1775 – they’ve had 234 years to get it
right. - o It is seven billion dollars in debt again this year and will need another “bailout” (a word that is becoming all too common these days).
- Congress established Social Security in 1935 – They’ve had 74 years to get it right.
- o It is broke. It survives only on funds the US Government has borrowed from the next generation of Americans.
- Congress established Fannie Mae in 1938 – They’ve had 71 years to get it right
- o It is broke. Moreover, it is taking millions of Americans to bankruptcy court while it survives on (here’s that word again) bailout money.
- Congress established War on Poverty started in 1964 – They’ve had 45 years to get it right.
- o The IRS confiscates over a trillion dollars of our hard earned income each year to distribute to Washington bureaucracies to help poor Americans escape poverty, but the poor still abound. The US Government is losing that war.
- Congress established Medicare and Medicaid in 1965. Both are health care and health insurance programs. - They’ve had 44 years to get it right.
- o Both are broke. They survive only on funds the US Government has borrowed from the next generation of Americans.
- Congress established Freddie Mac in 1970 – They’ve had 39 years to get it right.
- o It is broke. Moreover, it too is taking millions of Americans to bankruptcy court with it.
- In 2009 Congress established a fund of trillions of dollars in the massive political payoff called the TARP Fund.
- o It shows NO sign of working the way the Congress and the White House (both Bush and Obama) presented it to “We the People.”
- In the first weeks of the Obama administration, the US Congress passed an almost one trillion-dollar pork-barrel bill disguised as a stimulus package that would, we were told, moderate the recession and reduce unemployment.
- o DUH! Did we really believe that?
- And now—a new record: Congress established “Cash for Clunkers” (welfare for the auto industry) in 2009 and it went broke in 2009!
- o So much for the ability of the US Congress to think ahead – it simply doesn’t exist.
So, with a perfect 100% failure rate, can Americans truly believe the US Government can
be trusted with a government-run health care system that the Congress designed?
“We the People” pay for every one of the failed programs listed above. Add another trillion or so (remember, a trillion is one thousand billions) of our hard earned dollars to the money the US Congress can waste, and it most certainly will be wasted.
The health care system in America is undeniably the best in the world. It became the best because “We the People” are in charge, and because the free enterprise system works. However, “We the People” also know that the system is imperfect and that the delivery system for health care relies on insurance companies whose self-interest is often opposed to the interests of “We the People.” It is also plagued by the irresponsible behavior of attornies that sue the medical commuity at the drop of a hat.
The health care and health insurance challenges that face America in 2009 have many more workable and less expensive solutions than the ones the Washington insiders are promoting. None of these alternatives requires giving the US Government another opportunity to fail.
This blog is too short to enumerate them. I encourage you to do some research on the internet where you will discover that the systems being modeled in Washington…
- are failing across the globe
- are loaded with political payoffs
By Jeffrey Reeves MA, youBEthebank.com, ltd and Ron Jennings, http://www.moneylearningcenter.com/
The American Trinity…Led By Liberty
August 4, 2009 | Author dragonfly
Dennis Prager recently commented that he has been carrying American values around in his pocket for his entire adult life. To clarify he reminded his audience that those values appear on the coins and currency of the United States: Liberty, E Pluribus Unum, In God We Trust. He referred to these values as the American Trinity.
These observations seem most appropriate at this time in the history of America. It’s also most interesting that Dennis Prage linked these values to the US of A’s coinage and currency. Particularly, the idea of liberty relates directly to money. When the government controls the money that Americans rely on for life, liberty, and the pursuit of happiness, those inalienable rights of Americans are diminished.
In fact, throughout the recorded history of mankind, when governments control the citizenry by controlling the money that those citizens produce, those governments become facist, autocratic, repressive – even murderous. We need only observe what’s going on in Zimbabwe, Venezuala, Iran, and North Korea today.
What’s going on in Washington DC is also disturbing. America is on the brink of the greatest loss of liberty in its 233 year history; a loss that would be mourned equally by Democratic icons Jefferson and Jackson and equally by Lincoln, the soul of the Republicane party. The more of our money that the US Congress and the Executive Branch controls, the less liberty we have.
It makes me proud to see and hear American citizens shouting down the puppets of the political parties and demanding the transparency and honesty we were promised during the 2008 campaign. It will make me ecstatic when the US Congress backs away from the failed strategy that is on the table now, August, 2009.
That will only happen if Americans continue to challenge the Washington oligarchy that continues to deny we the people our voice.
A Fable – The Stimulus Story
June 16, 2009 | Author Dr Agon Fly
It is the month of August, on the shores of the Black Sea. It is raining, and the little town of Bombasticus looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.
Suddenly, a rich tourist comes to town. He enters the only hotel, the Ritzski, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.
-
Pierreski, The hotel proprietor quickly takes the 100 Euro note and runs to pay his debt to Thumbless Joe the butcher
-
Thumbless Joe the Butcher takes the 100 Euro note, and runs to pay his debt to Porky the Pig Farmer.
-
Porky the Pig Farmer takes the 100 Euro note, and runs to pay his debt to Fred at the Pig Feed Store.
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Fred at the Pig Feed Store takes the 100 Euro note and runs to pay his debt to the Irma, the town’s prostitute that, in these hard times, gave her “services” on credit.
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Irma runs to the hotel, and gives the 100 Euro note to Pierreski the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything. At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.
No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism…
And that, ladies and gentlemen, is how the United States Government is doing business today.
Posted in Debt, Money, Personal Financial Management | Tags: credit, debt, stimulus, tough times, united states government | No Comments »
“If only,” “Someday Isle,” & “A Round Tuit”…Three Stooges
May 3, 2009 | Author dragonfly
The two most frequently asked questions posed to Money for Life Guides are:
“Why haven’t I heard of the EUREKONOMICS™ Model for Creating and Managing My Personal Economy before now?”
and…
“Why isn’t everyone using the EUREKONOMICS™ Model?”
However, one group of people (those who learned about this model years ago but whose thinking was trapped in the failed Debt Paradigm) are hanging out with the Three Stooges.
If Only…
On the one hand, they are wondering, “How much better our lives would be if only we had adopted the EUREKONOMICS™ Model ten years ago when we first learned about it.”
Truth be told.., if they had dedicated $10,000.00 a year to creating and managing their personal economy starting in November, 1998…
- had they chosen to invest that money in stocks, bonds, and mutual funds they would have had about $92,500.00 dollars in their accounts at the end of 2008 based on the performance of the Dow Jones Industrial Average.
- on the other hand, had they chosen to deposit that money into a Money for Life Account with guaranteed growth, they would have had almost $130,000.00 net of taxes, fees, and commissions.
Someday I’ll Get Around To It…
These folks may still be living on Someday Isle where the currency is A Round Tuit. They may still believe the failed advice to “be patient,” “hold on,” “wait for the rebound,” and, most damaging of all, “think long-term,” strategies designed to keep your money in a Behemoth’s account.
They believe that the recession will be over soon; that the economy of America and the world can be propped up with more government, more government spending, more government borrowing. They are convinced by the Dummies on Dull Street (formerly Wall Street) and the Dolts in DC (all of them) that giving control of their money to some Behemoth corporation, union, or government agency is somehow better than keeping it in accounts they control.
The time to change is NOW. Hear to what John Mauldin, a brilliant economic thinker, wrote in his weekly newsletter on May 1, 2009…
Next year, we will be entering what will certainly be the most dangerous era in my lifetime for the US economy. It is not clear what will happen. There are a lot of paths that can be taken…While I think the most likely outcome is a long Muddle Through recovery, the likelihood of a lost decade of deflation a la Japan is a very real potential outcome. And the possibility of stagflation and a seriously impaired dollar is also quite real…Investors, businessmen, and entrepreneurs need to be as nimble as possiblle. A free market will figure out what paths to take, and I am still optimistic about the long term. But we have some very dangerous times in front of us, and we need to be realistic.
What if…
It’s time to get off Someday Isle and learn how to grow rich without risk and secure wealth without worry. If you had left the island in 1998 you would obviously be better off today based on the example above. HowevEr, it doesn’t tell the whole story.
The money you held in your EUREKONOMICS™ Accounts would not have been idle. In addition to the growth referenced above, your money would also have been doing double duty…
- You could have borrowed from your account to buy a car and repaid yourself instead of the bank. That alone would have saved you thousands of dollars that you could have used to create a second Money for Life Account.
- You could have borrowed again to go on a grand second honeymoon, repaid that too, and saved the thousands of dollars – that would otherwise have been paid in credit card interest – in EUREKONOMICS™ Accounts.
The possibiities are endless.
by jeffrey Reeves MA, youBEtheBank.com
Posted in Money, Personal Financial Management, What Others Say | Tags: bonds, credit, debt, economics, economy, investing, investments, Money, risk, saving, savings, stocks, Taxes | No Comments »
529 Plans Guarantee Nothing And May Deliver The Same…
April 21, 2009 | Author dragonfly
An article, Turmoil Spooks 529 Holders, published in the National Underwriter on 4/20/2009 By TREVOR THOMAS indicated a flight to safety by some parents and grandparents that were putting money aside in 529 Plans for the college educations of their children and grandchildren.
This is one more indicator that America is waking up to the reality that Wall Street and the Dolts in DC have been telling us to “save” but that what they are really telling us is to gamble. Investing is clearly very risky. Investing that is disguised as saving is clearly a con of the lowest character. Putting your children’s or your grandchildren’s future at risk based on a con game that you or they cannot win is foolish.
Of course, the con-artists don’t tell you that. They project 8% gains year upon year and proclaim it the truth. They ignore actual investor performance history and substitute generic stock market statistics that support their sales proposal. (Sales proposals are OK when they are sales proposals. They are a con when they are packaged as sage personal finance advice.)
A truly sage advior told me today during an interview that he makes sure his college funding proposals incorporate cash value life insurance, which is not counted when seeking financial aid, and rely on gurantees that are –>
-
truth based
-
objective
-
verifiable
That kind of advice might just lead to reliable wealth creation and wealth preservation, intelligent legacy planning, and the perfect investment.
You might want to evaluate529 Plans that way, too.
by Jeffrey Reeves – youBEthebank.com
Posted in Legal, Ethical, Moral, Money, What Others Say | Tags: 529 plans, college educations, financial, financial advice, investing, investments, Money, risk, saving, savings | No Comments »
Has America Been Listening To The Wrong People About Money?
April 12, 2009 | Author Dr Agon Fly
In 1974 the US Congress passed ERISA and began convincing Americans that saving money was a bad idea. The law they passed convinced us that investing [aka gambling] in an IRA or 401(k) was better than putting our money into guaranteed return savings vehicles. Americans listened. Wall Street and the IRS rejoiced.
In 1977 a high school coach convinced thousands of naive amateurs that they were financial advisors and taught them to strip every penny possible from secure whole life insurance policies and – you guessed it – buy term insurance and invest [aka gamble] everything else in mutual funds. Americans listened. Wall Street and the IRS rejoiced.
A few years later one of the Wall Streeters invented a new kind of life insurance that took the money that whole life insurance saved in guaranteed accounts and moved it into accounts that were not guaranteed but that the Wall Streeter could profit from even if the policy owner didn’t. These kinds of policies destroyed dozens of successful insurance companies and cost billions in lost savings to American families. Americans listened. Wall Street and the IRS rejoiced.
In the ensuing decades Americans listened to advice to invest [aka gamble] in dotcoms, invest [aka gamble] our home equity in all sorts of schemes. Americans were convinced that carrying debt equal to their investments [aka gambles] made some sort of sense. Americans listened. Wall Street, the IRS, and money lenders rejoiced.
BUNK – A THOUSAND TIMES OVER – BUNK!
“THE FACT THAT AN OPINION HAS BEEN WIDELY HELD DOESN’T MEAN THAT IT’S NOT UTTERLY ABSURD.” Bertrand Russell.
America has been listening to the wrong people for almost 40 years. The results are apparent. American families and the American government are bankrupt.
You and I can’t stop the Dolts in DC and the IRS from trying to convince us that they can handle our money better than we can, or the wonks on Wall Street from trying to sell us products that make them wealthy and us poor.
We can stop listening to them. Please, stop listening to the wrong people. Find old ways of creating wealth, preserving assets, and taking care of your families.
By Jeffrey Reeves MA – youBEthebank.com
A Dialogue With Stephen The Stepford Advisor…
April 8, 2009 | Author Dr Agon Fly
This post recounts an email exchange with a credentialed financial advisor. The content has not been modified but the name has been changed and the credentials eliminated to avoid implying that there is any relation between one advisors opinion and the position that might be taken by the credentialing body.
Stephen,
Thanks for your comments.
Although they do not open a discussion but rather, close the door on dialogue, I am responding in detail. [As you will likely recognize, Stephen's mind was made up before there was a chance to respond.]
Stephen The Stepford Advisor wrote:
“YouBeTheBank site recommends that individual purchase life insurance policies to accumulate funds which are then used to fund future activities.”
Specifically we recommend that clients purchase permanent cash value life insurance. We recommend further that they choose dividend paying policies from mutual companies. Please, take the time to read further in the blog and you’ll discover that we justify this approach in some detail. Better yet, order copies of Money for Life! How to Thrive in Good Times and Bad by Jeffrey Reeves [that's me] and Becoming Your Own Banker by R. Nelson Nash. You’ll discover the amazing power of this approach, as many other credentialed advisors have done.
Stephen The Stepford Advisor wrote:
“It fails to mention that the costs of owning the policies will be substantail,(sic)”
There are – of course – costs. Substantial? You might want to define that for yourself first and for your practice second. Many advisors find the approach not only helpful but essential to their practice and do not see the costs as either substantial or burdensome.
There is another aspect of this that you may want to consider. There are many different forms of permanent cash value life insurance available in the marketplace. Some carry a heavy cost burden while others do not. If you don’t know which policy is being used you do not know whether or not the cost is “substantial”. Whole life policies from mutual companies tend to be less costly. Universal lifepolicies tend to be more costly – especially when they are improperly funded. Term insurance policies tend to be the most expensive.
Stephen The Stepford Advisor wrote:
“as will the restrictions on the availablity(sic) of cash.”
Again, Stephen, you may not have all of the information you need. My clients can access all of the cash in their policies whenever they want it. There is a bit of a lag – a day or two for processing and mail time – since the request must be made through the insurer. Immediate needs are satisfied with overnight delivery. This is not uncommon for mutual companies that are responsible only to their policy owners and not to shareholders or other outsiders.
Stephen The Stepford Advisor wrote:
“The accumulation of funds should never be done with life insurance as the primary choice.”
My Grandpa told me to “never say never and always avoid always.” Your statement is a shibboleth – an oft repeated mantra that contains no truth but that has been repeated so many times that people assume it must be true. In 1492 the world was thought to be flat.
To a thinking person who truly explores this approach to creating and managing a personal economy, the opposite is true. Whole ife insurance belongs in the foundation of every personal economy. That was the opinion of most financial planners prior to the advent of EF Hutton creating UL, A. L. Williams brainwashing amateurs, and Wall Street’s merchants of misinformation misleading America into the mutual fund swamp beginning in the 1980’s.
For over 150 years, and still today, dividend paying whole life insurance has been and is the single best place to put the money you use as a foundation for your personal economy and wealth building system.
Stephen The Stepford Advisor wrote:
“Individuals who truly fear banks should buy treasury securities instead. There are no costs as a practical matter.”
Nowhere in our blog or our book do we state or imply that you should fear banks. In fact, the practices of Money for Life are based on the banking model. Treasuries, like all investments, are for the limited few who have already established a foundation. In addition, there are always (sorry Grandpa) costs. Most commonly ignored by Stepford Advisors is lost opportunity cost.
Stephen The Stepford Advisor wrote:
“Yet the fact is, if the bank is insured via FDIC, then for all practical purposes, the initial $100,00 is not at risk.”
True. FDIC insures up to $100,000.00 per account. But, again, we never suggested that money in banks is at risk. Also, are you aware that the 50 state insurance guarantee funds typically insure about $250,000.00 per policy? Are you aware that no whole life policy holder in the history of the insurance industry in the US has ever lost even one dollar of their guaranteed values? Banks can make no such claim. Mutual funds fail this test. Stepford Advisors run and hide.
Stephen The Stepford Advisor wrote:
“Almost no one needs that amount of money to fund future plans.”
Of all your comments, Stephen, this is the one that challenges me the least. I’ve been serving clients for over 35 years. During that time every one of those clients encountered a financial need so great that they had to invade their retirement accounts…every one of them. Here are a few situations that demand even larger amounts of secure money.
-
Fidelity Funds reports annually on the unfunded medical expense needs of a couple that will retire in that year. In 2007 that was $207,000.00. That’s the out-of-pocket after insurance payments have been made.
-
Another fund company (Vanguard, I believe) projects the long term care needs of retiring couples – for 2007 it was $350,000.00.
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One of my best friends has two Down Syndrome children. I expect they’ll continue to need that $100,000.00 almost every year.
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Kyle was injured in a skiing accident and after months in a body cast, two years of physical therapy, and $125,000.00 in debt he is back to work. Seems each of these adds up to more than the $100,000.00 that “no one needs”.
Stephen The Stepford Advisor wrote:
“You should reconsider your recommendation as it fails every reasonable test of jusgement.(sic)
Stephen, the recommendation and my judgment are just fine.
Moreover, the processes and practices that we talk about on YouBeTheBank.com and TheMoneyforLifeBook and blog are tried, tested and proven to produce results that are guaranteed – a word that Stepford Advisors are not allowed utter. ”Guaranteed” is entirely legitimate in the context of dividend paying whole life insurance from mutual companies. I can assure you that “every reasonable test” of judgment supports what we teach and practice.
I can further assure you that the advisors who apply these practices in their planning help more people than those who don’t. One of our understudies (a former Sr. VP with a major, well known international brokerage with a large ad budget) proposed his first case last week to a very sophisticated investment client and it passed “every reasonable test” of judgment for all parties – advisor, client, attorney, accountant and family. Imagine that.
Stephen, I want to end with a word of thanks, again. My mission is to educate and inform. Your comments give me that opportunity. I urge you to learn more than you know, earn more than you imagine possible, and begin to question the shibboleths.
What Is A Personal Economy?
February 27, 2009 | Author Dr Agon Fly
It’s March 2009.
Americans are struggling with the cost of everything from mortgages to groceries. The struggle is the outcome of three decades of misinformation about how to handle the money that flows through the lives of American individuals and families.
Your personal economy succeeds when you control the money that comes into your life.
The Behmoths on Wall Street, Behemoth banks and insurance companies, and the Behemoth US Congress [the Dolts in DC], and the IRS…
- Have convinced you that they know better than you what is best for you and your family
- Have convinced you to divert your money into accounts that they control
- Have convinced you that a maybe dollar in twenty or thirty years is worth more than a real dollar today
- Have convinced you that you can only have the things you need and want today by using credit and mortgaging your future income and your current net worth.
BUNK! BUNK! TRIPLE BUNK! and BUNK ONCE MORE!
Everything you learn from this blog, and from our published works, aims to reveal and clarify the most basic secret of your success with your Personal Economy…
“Keep control of the money that flows into your life. Give control of as little of your money as possible to the Behemoths.” Dr Agon Fly
In addition, the experienced Money for Life Guides listed on YouBEtheBank.com will teach you strategies and tactics to help you gain and keep control of your money. They know how to guide you on a path that assures the success of your personal economy regardless of the bursting of real estate bubbles, the crashing of markets, and the dishonesty of the Behemoths.
Posted in Debt, Money, Personal Financial Management | Tags: bank, banking, banks, behemoth, Congress, economy, IRs, Money, mortgage, mortgages, Personal Financial Management, Wall Street | 1 Comment »
President Obama’s Hope VS Speaker Pelosi’s Pork Barrel – An Open Letter
January 21, 2009 | Author dragonfly
“Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.” President Barack Obama’s Inaugural Address, January 20th, 2009
Dear Mr. President,
There are among us hundreds, perhaps thousands of dedicated, intelligent, passionate people that have been diligently working for decades at “remaking America.” One group of professionals in particular has helped a multitude of American families and small businesses escape the dungeon of debt that has become the resting place of millions of their fellow countrymen.
These professionals have helped their clients build personal economies that are thriving today while most other Americans bemoan their losses. You might ask how they helped their clients build economies that thrive in good times and bad. If you were to ask that question you would discover that there is one consistent answer.
Economies built on capital [I like to think of that as money] that is controlled by the individual as opposed to the banks, investment houses, government, unions or any other Behemoth remain solid in all economic conditions. Economies like America’s in the late 20th and early 21st century are based on debt. The reliance on debt is based on the faulty notion that debt trumps capital in the national economy and in personal economies.
Look around you, Mr. President. Is there a single institution, business, government, of family that has an economy based on capital that is in serious trouble. No. On the other hand, every economy that is based on debt – especially the one you just became responsible for – is failing and needs to pick itself up, dust itself off and begin again.
Pelosi’s Pork Barrel adds nothing to the economy. It adds immensely to the debt. It doesn’t pick us up. It drives us further down. It does not help us begin again. It forces America to continue its downward spiral. It creates no new jobs but assures cronies are paid off. It moves the economy backwards as it elevates political hacks.
Pelosi’s Pork Barrel would prove a black mark on the start of your administration, President Obama. Looking forward, accepting the Pelosi Pork Barrel would be a terrible mistake for the economy, for you presidency and – most imprtantly – for America.
By Jeffrey Reeves
Posted in Debt, Money, Personal Financial Management | Tags: bank, banking, banks, barack obama, behemoth, debt, economics, economy, inauguration address, investing, investments, Money, national economy, pork barrel, remaking america, thrive | No Comments »
Buy Now, Pay Later…The Debt Paradigm Is Alive and Well…
December 26, 2008 | Author dragonfly
Much later, according to a new poll of holiday shoppers by Consumer Reports.
In my book Money for Life…How to thrive in Good Times and Bad a great deal of time is spent discussing the Debt Paradigm; a system of thinking about money that suggests that you can have everything you need and want as long as you have enough credit [that really means you have debt].
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According to the survey, 23% of Americans will not pay off their holiday debt until March or later, equaling $14.6 billion in interest-accruing debt.
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Over one-quarter of Americans (26%) use credit cards most often when holiday shopping, contributing to the $63.6 billion charged on credit cards throughout the shopping season.
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Among those using credit cards to pay for holiday gifts, 17% or more plan on accumulating $1,000 or more in holiday charges.
Here are two ideas from the same survey that might help you avoid this insidious trap:
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With little more than a day to go until Christmas, re-gifting becomes an attractive option. A noteworthy proportion of consumers (13%) are planning on re-gifting. Men are more likely to re-gift (17%) than women (10%).
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After the holidays, 16% of consumers plan on returning some of the gifts they received. Men (21%) are more likely than women (12%) to return some of their gifts.
Holiday shopping makes people usually spend more than they intend to. In addition they rack up major credit card bills looking for bargains, after the season.
Don’t fall into the trap. Or, if you already have, seek out a financial guide that can show you how to be your own banker and never get trapped again. You can find a guide who is trained in this financial discipline at http://www.youbethebank.com/find-an-advisor.html
Words Of Wisdom About Conventional Wisdom…
November 29, 2008 | Author dragonfly
John Mauldin’s November 26, 2008 Weekly Eletter begins with the following quote:
“It will therefore be crucial that you see the world anew. That means looking from the outside in to reanalyze much that you have probably taken for granted. This will enable you to come to an understanding. If you fail to transcend conventional thinking at a time when conventional thinking is losing touch with reality, then you will be more likely to fall prey to an epidemic of disorientation that lies ahead. Disorientation breeds mistakes that could threaten your business, your investments and your way of life.”
– James Dale Davidson and Lord William Rees-Mogg, The Sovereign Individual, 1997
The Money for Life Model of wealth creation and money management challenges convetional thinking [we refer to it as conventional wisdom] at every step. As an alternative to the lemming-like behavior that conventional wisdom engenders, The Money for Life Model suggests that awareness is the first essential characteristic of intelligent financial decision-making. Watching and listening to the commercials of the financial Behemoths – including the advice from their minions – tells you only what they wish you to know.
It’s 2008. Look where their advice has gotten us…and them!
It’s time to become aware of the reality that the Behemoths [any large business, union, government bureacracy or NGO] wants only to gain control of as much of your money as possible - regadless of whether or not that serves your best interest.
By Jeffrey Reeves, YouBeTheBank.com, ltd.
Posted in Money, Personal Financial Management | Tags: conventional wisdom, financial decision, john mauldin, money management, wealth creation | No Comments »
Conventional Wisdom = Bad Ideas: This One About Life Insurance For Children…
November 28, 2008 | Author dragonfly
Bad advice like that which appears below in the excerpt from the article 15 Insurance Policies You Don’t Need by Lisa Smith on Investopedia is painful for those who truly understand the value, power, flexibility and versatility of cash value life insurance. The article claims that life insurance on children is not desirable.
BUNK!
Read R. Nelson Nash’s article Jeanette’s Banking System or The Education of Emily Elizabeth and you will understand that cash value life insurance purchased on children and grandchildren can be more powerful and a lot safer than the typical 529 Plan or Coverdale IRA, which are foolish gambles at best.
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8. Life Insurance for Children
Life insurance is designed to provide a safety net for your heirs/dependents. Because children don’t have heirs to worry about and, statistically speaking, most kids will grow up safe and healthy, most parents should not purchase life insurance for their kids. Instead, use the money that you would have spent on life insurance to fund an education plan or an individual retirement account (IRA). (To read more on saving money for your kids, see Investing In Your Child’s Education, Teaching Your Child To Be Financially Savvy and Don’t Forget The Kids: Save For Their Education And Retirement.)
Other items in this article make some sense. Discussions of cash value life insurance by pundits and feature article writers, however, generally lack in both accuracy and depth of understanding. Read the entire article here…
http://www.investopedia.com/articles/pf/07/cutpolicies.asp?partner=forbes-am&viewed=1
The Age Of The Financial Advisor vs. The Age Of Your Financial Advisor…
November 16, 2008 | Author dragonfly
It dawned on me this morning while reading John Mauldin’s weekly letter that the age of the financial advisor that is informed by technological connections, charts, graphs, hypothetical illustrations, and on-line quotations has passed.
Americans are discovering that wisdom is a function of lived experience, not theoretical models. Americans are looking for advisors who lived through…
- the 1974 recession
- the economic failures of the Carter years
- the struggles of early 80′s
- the unbridled euphoria of the booming nineties
- crashing markets in 2001-2002
and are now experiencing…
- the attack of a bear market weakened by…
- failed financial markets
- the real estate bubble bursting
- mortgage madness promulgated by the Dolts in DC and the greed of Wall Street
- an automotive industry self-destructing because…
- management foolishly fought safety an economy standards
- unions demanded more than common sense and common decency would suggest.
As this flight to wisdom became apparent to me, I realized that the agent advisors who have opted to become Money for Life Guides and work with their clients using the ideas, values, principles and practices found at YouBeTheBank.com have either lived through these time or been personally mentored by someone who has.
The Money for Life Model for Wealth Creation and Money Management recommends products, strategies, and tactics that have been tested and proven for centuries and millenia; that hold the wisdom that comes only with time and lived experience.
If you are looking for a way to handle your money that delivers peace of mind in good times and bad i strongly recommend that you contact a Money for Life Guide at www.YouBeTheBank.com
The Failed Wealth Creation and Money Management Paradigm…
November 13, 2008 | Author dragonfly
My apologies for such a long absence.
YouBeTheBank.com is launching its new web site. Although it is fully functional, there are more than a few additional capabilities that are being developed and added daily and weekly. It’s a time and energy consuming project.
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The turmoil in every market: real estate bubbles bursting, the motgage mess, bank failures, GM/Chrysler/Ford facing bankruptcy, and on, and on…all are the result of a failed paradigm that convinced Americans to delegate their own wealth creation and money management to the Behemoths -
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the Dolts in DC who manage to increase their own wealth by taking more of yours,
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mutual fund managers who don’t know what they don’t know,
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investment advisors who have only the minimal registrations and licenses to compliment the brainwshing they receive from their Behemoth bosses,
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union leaders who see their RIP engraved on history and scheme to keep alive a system of relating to capital that can only be described as self-serving,
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banks and credit card grantors that have manipulated the Dolts in DC to serve them instead of American citizens.
I’ll write a book about this someday but for now here’s an article from InvestorsInsight that articulates a piece of the problem.
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“Buy-And-Hold” Bites The Dust – Now What?
by Gary D. Halbert
November 11, 2008
IN THIS ISSUE:
- Economic Overview
- The Conventional Wisdom Was Wrong
- The Shortcomings Of Index Investing
- Are Low Fees The Key To Investment Success?
- Risk Management Is Crucial
Introduction
In the newsletter business, it’s rewarding to see market action reinforce the advice you have been giving in your publication. Ever since I started writing this E-Letter, I have warned of the perils of passive “buy-and-hold” investing in general, and “index investing” in particular. While adherents to these strategies like to trot out long-term charts and graphs supporting their case, I have always warned that passive investing can result in major losses at just the wrong time from the investor’s perspective.
Posted in Money | Tags: american citizens, bank, bank failures, banking, banks, behemoth, conventional wisdom, credit, dolts, economics, halbert, investing, investment advisors, investment success, investments, investor insight, Money, money management, mutual fund managers, risk management, union leaders, wealth creation, wisdom | 1 Comment »
Why Mutual Insurance Companies and Credit Unions Continue to Thrive…The Prudent Man Rule
October 14, 2008 | Author Dr Agon Fly
The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court decision – Harvard College v. Armory. (26 Mass.) 446, 461 (1830). The Prudent Man Rule directs trustees “to observe how men of prudence, discretion, and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested.”
Benjamin Graham, the “Dean of Wall Street” and Warren Buffet’s mentor, held that an investment has two essential characteristics: “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”
If we put these two principles together it becomes clear that – regardless of how “diversified” one’s “portfolio” – almost every “investment” that was presented to American consumers during the past thirty years is no investment at all; it is mostly “speculation.” Calling them “investments” is a ploy to justify having uninformed registered reps sell them to uninformed consumers.
Mutual insurance companies and your local credit union are among the most respected financial businesses in America – and with just cause. While the rest of America’s and the world’s financial infrastructure is imploding, mutual insurance companies and credit unions are doing quite well. The reason that is so? They follow the Prudent Man Rule in its purest form.
Insurance policies issued by mutual companies continue to increase in value tax-free, every year at a guarnateed rate and continue to pay tax-free dividends as well. Credit Unions are less at risk than other depositor funded institutions because they continue to serve a small community as non-profits. In both cases, the companies are owned by policy owners or depositors, not by outside investors greedy for profits at any cost.
Mutual fund companies and other investment vehicles do not guarantee or even hint at promising “safety of principal and a satisfactory return.” They claim that “diversification” makes up for that failure. It doesn’t. That is apparent during these days of bank failures, investment company executives being indicted for foisting false financial products and promises on “we the people,” and tumultuous market fluctuations.
The stock markets, mutual funds, and virtually every financial product promoted to Americans represent unwarranted gambles – speculation – dressed up as “investments.” Even the money you pour into your Las Vegas style 401(k) plan is unprotected from the speculative nature of the underlying investments.
Secure savings in credit unions and financial growth in cash value life insurance are today – as they have always been – the surest and safest places for your money; the most solid foundation for your personal economy; the most likely source for secure retirement income, ready cash for life’s surprises and a meaningful legacy for those you care most about…not to mention freedom from debt.
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Posted in Money, Personal Financial Management, Whole Life Insurance | Tags: bank, banking, banks, benjamin graham, credit, credit unions, debt, economy, financial, insurance policies, investing, investments, legacy, Money, mutual insurance companies, prudent man rule, Retirement, saving, savings, stocks, warren buffet | 2 Comments »
Cents, Common Sense, And Economic Failures…Part I
October 6, 2008 | Author Dr Agon Fly
The Failure of America’s Economy and the Personal Economies of Americans…
This is a cautionary tale about four cousins - Elijah, Zachary, Mordechai, and Luke. Structured as an allegory, it describes their approaches to money and reflects the financial behavior of America and Americans over the last four decades. I hope you find this brief treatise enjoyable and instructive.
We begin the tale in 1968. Elijah, Zachary, Mordechai, Luke, and their families live in the mountainous coal-mining region of Appalachia – an isolated area with a relatively self-contained economy. The area’s economy as well as each of their personal economies rely on coal, coal-mining companies, government agencies that regulate coal-mining companies and other businesses that depend on the mining and selling coal to the broader market.
Each of these men views his and his family’s personal economy differently. Each expects a positive outcome and each approach produces predictable results – though often unexpected by the men themselves.
Elijah…The Value of a Penny
Elijah inherited 64 acres of prime farming and ranching land from his industrious parents. Elijah, however, didn’t appreciate the value of owning the land outright and applying himself to working the land raising crops and livestock for his family and for the market. Over the years Elijah raised money to support his family by selling off three fourths of the land in 16 acre parcels to his cousins Zachary, Mordechai, and Luke – more about them later – so that by 1968 each of the four owned equal amounts of land.
Elijah’s parcel sat on the eastern slope of Shelby Mountain. Although the land was mostly mountainside, about five acres lay on flat land, bordered on the east by Possum Creek and Possum Creek Road. The family home his parents had built and the four or so acres Elijah used for raising crops and livestock for personal consumption were separated from his cousins’ land by this border.
Just as Elijah was wondering how he could keep all that he had remaining of his parent’s estate, there was a knock on the door; enter The Mighty Coal Company. Jacob Ebenezer of The Mighty Coal Company wanted to buy a right of way across Elijah’s property to construct a railroad spur line, which, he explained, would carry coal from the rich Anglican Mine across Shelby Mountain to a rail line that would bring the coal to market.
Jacob offered Elijah two options. The first option was that The Mighty Coal Company would pay Jacob and his heirs a royalty of one cent per ton of coal that was carried over his land for as long as the Anglican Mine [or any other mine for that matter] used the spur line. If Elijah chose this option, The Mighty Coal Company would pay Elijah $1,000.00 up front and begin making royalty payments to Elijah as soon as the coal cars started rolling over the tracks carrying what the locals called “black gold.”
The Mighty Coal Company, explained Jacob Ebenezer, was still negotiating with other landowners on the route, and would likely be opening the spur line within five years if they could come to terms with the one hundred or so remaining landowners along the route. Elijah could keep the $1,000.00 if The Mighty Coal Company failed to complete the project.
The second option offered by Jacob Ebenezer was $10,000.00 cash up front. Elijah would receive no royalties and would not have to return any of the $10,000.00 if The Mighty Coal Company was unable to complete the project.
$10,000.00 was a lot of money in 1968 in Appalachian coal-mining country. Elijah thought it through this way. He could support his family in the family home for nearly another five years using the $10,000.00 from the sale of the right of way, the occasional sale of produce and livestock, and doing a few odd jobs when he must.
Elijah reasoned that if he took the $1,000.00 offer, he may never see another penny and, even if he did, it wouldn’t be for five or more years. Moreover, winter was coming and although he could use the extra money to get the family thru until spring, he’d be in limbo waiting for over four years for royalties.
Elijah took the $10,000.00.
The rest of Elijah’s story goes something like this. Elijah eventually sold all of his land and an option on his house to the man who owned the land that bordered his on the south. His neighbor had chosen to take the royalties.
Elijah died penniless and his neighbor took his land and house as agreed. Although Elijah was never a financial success, he remained a beloved character in the small Possum Creek community. His children, however, all left coal country for the big cities and there are no longer any remnants of his immediate family in Possum Creek.
Fast forward to 2008; every month since September of 1972 – 36 years; 432 months – The Mighty Coal Company has shipped an average of 100 coal cars carrying an average of 90 tons of coal each over Elijah’s property every day. That would have created $2,700.00 per month in royalties. That’s $1,166,400.00 in royalties never received. The Mighty Coal Company expects to be running coal over those tracks for decades to come.
A penny is an amazing thing.
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Posted in Money | Tags: behavior, economics, economy, financial, Money, personalpersonal consumption, undefined | No Comments »
The Money for Life Model of Financial Management and The Infinite Banking Concept(TM)
September 28, 2008 | Author dragonfly
I regularly receive questions that reference The Infinite Banking ConceptTM of R. Nelson Nash. The Money for Life Model of Financial Management guides its adherents on a path similar to the one Mr. Nash suggests.
A visitor to our web site recently submitted a series of clear and precise questions about three of the core concepts found in both programs; the Paid Up Additions Rider, guaranteed cash values and policy loan interest. The complexity of each of these makes sense to well-informed agent/advisors, but may befuddle a consumer – or as the questioner puts it a “normal guy.” [Hmmm! Does that mean those of us who call ourselves advisors are "abnormal guys?"?]
The questions and comments of the visitor who wrote to me are indented and in quotes.
“The first thing I am interested in is a “normal guy’s” explanation of a Paid Up Additions [PUA] rider. I cannot believe all the stuff that has been written about Infinite Banking that is lacking a clear explanation of just how it works.”
A reading of Money for Life…How to thrive in good times and bad would help clear up some of the ‘normal guy’s” questions you have.
“There are certain questions I have:
What is a PUA?”
A PUA has a variety of names. Basically, a paid up additions rider is a single premium insurance policy that is purchased with separate premium contributions in excess of the premium required by the base policy to which the PUA rider is attached. A PUA generally has minimal cost associated with it [commissions, policy issue fees, etc.], which makes it a most efficient way to increase both the death benefit and the cash value available for use as your ‘bank.’
There are wide varieties of restrictions and limitations on this rider form by different companies. Some of these riders lapse if they are not exercised, which means that you have to contribute each year or you forfeit the option to contribute in any subsequent year. Others allow partial contributions or include ‘catch-up’ provisions in case you miss a portion or even all of one year’s deposit.
Purchasing paid up additions using the PUA rider may put a policy in jeopardy of becoming a modified endowment contract [MEC]. This would result in the policy losing the benefits that make cash value life insurance so powerful and flexible as a cash accumulation and cash management tool.
“What does it mean that the policy is ‘engineered to increase in value every year.’?”
Whole life contracts are designed to guarantee an increase in the basic cash value each year. In the early years of most policies, the cash value increase is minimal due to the structure of the policy issue process, the long-term cash accumulation strategy, and the commission program.
The policy that I most frequently recommend is specifically designed – or engineered – to create cash value in the first year. This policy guarantees that about 90% of the base premium is credited to the guaranteed cash value in the first year and nearly 100% or more of the base premium in every year thereafter. The annual contribution of the PUA contributes 93% of the annual premium to guaranteed cash value every year it is paid.
“When I take a policy loan, do I or do I not have to pay the insurance company interest? If yes, then does this interest go into my cash value or go somewhere else?”
It depends on the company, but generally it works something like this; interest on policy loans is always assessed. If you fail to pay it, the outstanding interest and the policy loan itself are liabilities against both the cash value and the death benefit. Most policies, however, continue to pay the guaranteed internal interest rate when a loan is outstanding.
In effect this means that the interest you pay the insurer is a refund of the interest the insurer credited your account while the money in your account was on loan to you. The rate the insurance company charges you is generally a bit higher than the internal rate. This is to make sure each policy owner covers the cost of managing the loan and other policy owners are not subsidizing loans in which they have no interest.
Loans and interest are often described using reference to the ‘banking’ process for simplicity. It’s important that each advisor explain how it works with individual policies and loans. It makes a great deal more sense when the policy owner can see the actual results.
Conclusion…
Whole life insurance, used as a fundamental component of your clients’ personal economic structures, is an extraordinarily powerful and flexible tool. It is the Swiss Army Knife of financial products.
Over the past three decades or so the financial community’s understanding of whole life insurance has diminished dramatically. Whole life insurance has been misrepresented by those who can’t or won’t sell it.
The financial mess in America today is the direct result of the failure of the financial community to support the traditional financial values, practices, and products that made America the greatest economy and country in history. The greed on Wall Street jeopardizes our wealth and well-being as a nation and the wealth and well-being of “we the people.”
It’s time to again reclaim those values, reinstitute those practices, and recognize those financial products as essential to every successful personal economy.
If we fail at this we will fail completely.
Bear Stearns, Lehman Brothers, AIG And The Fed…
September 16, 2008 | Author dragonfly
Rather than boring you by recounting what is readily available in the rest of the media, I want to recommend a great book that sheds light on what our Founding Fathers believed and embedded in our banking system. I’ll let you decide if those principles and practices are still there.
The Financial Founding Fathers, The Men Who Made America Rich, Robert E. Wright and David J. Cohen, The University of Chicago Press, 2006
As will rogers said in 1928,
“Alexander Hamilton started the U.S. Treasury with nothing, and that was the closest our country has ever been to being even.”
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Posted in Money, What Others Say | Tags: aig, bank, banking, banking system, banks, bear stearns, financial, founding fathers, lehman brothers, press, u s treasury, university of chicago, will rogers | No Comments »
The 21st Century Way to Wealth…Settle Down
September 16, 2008 | Author dragonfly
By Dr Benjamin Franklin and Dr Agon Fly
“II. But with our industry we must likewise be steady, settled, and careful, and oversee our own affairs with our own eye, and not too much to others;
WOW! I wonder what Benjamin Franklin would think of ‘modern’ investment vehicles such as mutual funds, ETF’s, hedge funds, and derivatives of all kinds? These instruments require that you not “…oversee [y]our own affairs…”
The companies and the people that sell these products would have you believe that they are “steady, settled and careful,” but those qualities are not intrinsic to their products or the hallmarks of the marketers. In fact, the less you know the easier it is for them. If you think that’s an exaggeration, try reading a prospectus. You’ll discover that you know less after reading than you did before, and the prospectus is supposed to be the fountain of truth about mutual funds and primary stock offerings.
The truth is that America has lost sight of the wisdom that makes it great. Unless Americans reject the conventional wisdom, which is no wisdom at all, and regain clarity about how to handle their own money, they will soon find themselves gaining wisdom and clarity from the bankruptcy judge.
Father Abraham continues his lecture about being “steady, settled, and careful:”
for, as Poor Richard says, I never saw an oft-removed tree, nor yet an oft-removed family,
that throve so well as those that settled be. And again, three removes are as bad as a fire;
Father Abraham uses the word “remove” the way we might use the word “move.” In the America of the 1750’s, the ability to settle down in one place permanently was not quite as easy as it is today. Families built their own homes, made their own furniture, collected dinnerware one item at a time, and so on. Moving frequently would make being “steady, settled, and careful” quite difficult for the family.
You might remember, also, that Benjamin Franklin started the first volunteer fire department in Philadelphia around this time because a fire meant the loss of all that a family owned. The insurance that we rely on today was non-existent.
Just as a transplanted tree finds it hard to thrive, so a frequently transplanted early American family would find it difficult to thrive. In America today we hardly think twice about moving across town or across country. Many families spend their future trying to create a better one. They move to a new house or a new job or a new school district or a new city hoping that the mere fact of moving would create a better future. Americans burn their connections to place and destroy a part of their families when they do.
Granted, a lot has changed in the last 250 years, but Father Abrahams premise is just as valid today as it was in 1758; the deeper the roots, the stronger the tree. The same thinking applies to how you deal with your money. Moving money around like play money on a Monopoly Board is just as damaging to your personal economy as moving your family around is to your personal relationships. Money needs a home; it needs to be “steady, settled, and careful” in its own way.
As always, Benjamin Franklin, through the character of Father Abraham, brings wisdom, which knows no century, to the 21st century. We stand in awe of it both because it is timeless and because it has been buried by the advertising and marketing of the Behemoths, who would like nothing more than that ‘we the people’ remain slaves to their shibboleths.
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Posted in Money, Personal Financial Management, What Others Say | Tags: Add new tag, bankruptcy judge, benjamin franklin, conventionalinvestment vehicles, derivatives, economy, father abraham, fountain of truth, hedge funds, investing, investments, Money, mutual funds, prospectus, stocks, thrive, undefined, wisdom | No Comments »
Why The SEC Really Wants To Regulate Indexed Annuities…
September 9, 2008 | Author dragonfly
“Greed, for lack of a better word, is good.” Wall Street, 1987
The SEC is a Behemoth that works for other Behemoths, in particular the major Wall Street firms and their minions. The SEC, along with its junior partner FINRA, wear the mantel of a Robin Hood while concurrently robbing everyone in the neighborhood by supporting the self serving aims of the Behemoths. Now they want to get control of another bag of money.
‘Sheryl Moore, chief executive of AnnuitySpecs.com, estimates there were $25.1 billion in indexed annuities sold in 2007, down about $2 billion from their peak in 2005. While sales decreased, last year total indexed annuity assets reached $123 billion according to the SEC.”
Furor builds on SEC indexed annuity oversight plan
By EILEEN AJ CONNELLY, Associated Press http://www.forbes.com/feeds/ap/2008/09/08/ap5400800.html
The SEC claims that its aim is to protect consumers by further regulating an insurance product on the rather flimsy claim that Indexed Annuities are funded by investments.
DUH!
All insurance products are funded by investments. The simple fact is that the Wall Street wizards, who brought you the current credit and housing crises, now want to ‘fix’ the indexed annuity market.
BUNK!
The Wall Street Behemoths, who will be no more open and clear in their explanation of this product than current state regulations require, want to capture all that annuity money for themselves.
Consumers will actually lose since the Wall Street wonks will dishonestly demonstrate that these products don’t perform as well as the failed mutual fund industry, ETF’s and fee based advisors, thereby recovering the $123 billion that Wall Street’s Behemoths have been unable to get their greedy hands on.
American’s have been duped into believing that the SEC/FINRA are the watchdogs they were originally intended to be. They are not. They have morphed into watchdogs for the Wall Street Behemoths and their aim has become protecting the Behemoths from lawsuits by consumers as opposed to protecting consumers from the subterranean subterfuges of the Wall Street Behemoths.
Having said all that, it is clear also that the Indexed Annuity business is plagued with charlatans and snake oil sales reps that create a problem for the majority. The states have been too slow to effectively regulate these products and the people who sell them. The answer, however, is not to add a layer of bureaucracy that answers to the Behemoths.
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Posted in Legal, Ethical, Moral, Money, Movie Quotes, What Others Say | Tags: annuities, annuity, credit, investing, investments, Money | 4 Comments »
Getting A Grip On The Housing And Mortgage Crises…
September 8, 2008 | Author dragonfly
U.S. Takes Over Mortgage Finance Titans
WASHINGTON — The Bush administration seized control of the nation’s two largest mortgage finance companies on Sunday, seeking to shrink drastically their outsize influence on Wall Street and on Capitol Hill while at the same time counting on them to pull the nation out of its worst housing crisis in decades.______________
The plan represents a cease-fire in a decades-long ideological battle over the proper role of the companies. Free-market conservatives see the companies as extensions of “big government,” while Democrats have protected them as the main vehicle to promote affordable housing for middle- and lower-income people.
http://www.nytimes.com/2008/09/08/business/08fannie.html?_r=1&hp&oref=slogin
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The Lost Opportunity Cost Of Paying Cash…
September 1, 2008 | Author Dr Agon Fly
Preface…
This post is longer than normal. It deals with an issue that does not lend itself to easy explanation. Lost opportunity cost deserves closer scrutiny than most because it is fundamental to understanding, building and maintaining a successful personal economy. In addition, since it’s difficult to address the topic piecemeal, it demands a single post rather than a series of shorter entries.
Jeffrey Reeves
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Part I – The Myth vs. The Reality of Lost Opportunity Cost
There are hundreds of money myths that make bad decisions feel good. Most are propagated by popular pundits on TV and radio whose main credential is that they are smooth talkers or enthusiastic preachers of their unique financial management gospel.
One of the most deceptive and destructive of these money myths is that ‘paying with cash’ is always better than any other alternative. This erroneous belief ignores a basic economic principle: lost opportunity cost.
According to the Merriam-Webster Dictionary, Lost opportunity cost is the value of what is lost when you choose between mutually exclusive alternatives. This value can be estimated before the fact but is determined more accurately after.
A simple explanation of lost opportunity cost, and a statement of the benefit that you gain from understanding lost opportunity cost comes from R. Nelson Nash, author of Becoming Your Own Banker.
“Any time that you can cut out the payment of interest to others and direct that same market rate of interest to an entity that you own and contol…you have improved your situation.” Third edition, p40
Another way of saying the same thing comes from Charlie Jackson, an experienced advisor who says; ”You always finance what you buy.”
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If you borrow the money to buy something, you repay principal and pay interest to another.
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If you pay cash to buy something, you give up both the principal and the earnings it would have brought you.
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The only way to win is to borrow from yourself so you recover the money you borrowed – your capital – and the interest too.
Part II – Money is Capital Too!
An example…
Understanding the fact that money is ‘capital’ is key to understanding lost opportunity cost. For example, it’s easy to see that a person who owns a 160 acre parcel of arable land, holds that land as capital. The owner might consider these optional uses of that capital; plant one or more cash crops each year, convert the parcel to a tree farm, subdivide the land and sell off the lots, or sell the parcel outright. Each of these four mutually exclusive options would produce a different result both in terms of money and time.
- Cash crops promise an uncertain but probable income each year and preserve the basic value of the capital asset.
- A tree farm might produce a greater income at a much later date and, perhaps, enhance the value of the capital.
- Subdividing the land and selling off the lots would eventually reduce the value of the asset to zero while proportionately increasing the owner’s cash account.
- Selling the parcel outright transfers the asset to a new owner and produces immediate cash.
Money in the form of cash is capital too…
In commercial banking, cash contributes to the tier one capital that determines the stability rating a bank receives from regulators. Corporate balance sheets include cash holdings among their capital assets. Your personal economy runs almost exclusively on its capital holding of cash.
Why, therefore, is there the modern day myth that paying cash for everything is always the best choice? Why the insistence that you deplete one of your most valuable assets on a regular basis? Is it, perhaps the very fact that it’s a myth that serves the interests of those who propagate the myth rather than your interests?
The cash you give away when you pay with cash increases the cash account of the entity that receives your money…
- What do you lose when you pay cash?
- Should you consider just the cash in your decision?
- Is there a benefit you might receive from using your cash differently?
- Where is the cash coming from?
- Is what you give up when you use cash worth more than what you gain by doing so?
- Are there alternatives to cash that you should consider?
Part III – The Role of Debt-to-Others vs. Debt-to-Self
The always-pay-cash mantra is usually chanted with an ‘all debt is bad debt’ chorus. The purveyors of this myth seldom, if ever, consider a third, fourth or other alternatives. I’m not suggesting that debt is good. It’s easy to justify paying cash in lieu of putting your purchases on a credit card that you may take years to repay. It may make sense for some to pay off a mortgage early to save thousands in interest.
But debt may also give you leverage in certain situations. More importantly, debt to yourself can create wealth more readily than other more risky systems and paradigms.
Consider these common strategies used in the retail business. Here are three ways to use cash to pay for a $24,000.00 car.
- Cash, which you take from a $24,000.00 savings instrument. You also earn a $2,000.00 discount off the purchase price. This leaves you with $2,000.00 to put into a CD at 4.15% that yields $2,450.90 during the 60 month finance period. (If you were to leave the money in a five year CD paying 4.75% it would mature to a value of $27,745.52.)
- Borrow $22,000.00 from your credit union at 6.5% (you still get the dealer discount for cash) and withdraw the $430.46 per month payment for 60 months from your $24,000.00 savings instrument. You end up repaying $25,827.37 including interest and have just over $2,400 left in savings.
- 60 months of interest free payments of $400.00 per month to the dealers finance arm taken from your savings plan would reduce the $24,000.00 to about $2,000.00.
Does it surprise you that leaving your CD intact, borrowing from the credit union or taking the zero interest option all produce about the same result? It shouldn’t. In each of these cases, you effectively pay cash. When it’s all over you have depleted you savings, have very little money and a five year old car that is worth virtually nothing.
Imagine instead that you had borrowed the money from your own “bank” and repaid yourself? At the end of the 60 month payoff period you’d have both the principal and interest returned to your account…and you’d still own the five year old car.
Part IV – The Fallacies
Here’s the fallacy in the myth. The myth assumes that the payments you don’t make on the auto are going to be used to either increase savings or to pay off other debt. In this example (using numbers from BankRate.com and in order to be honest and fair in our presentation) we took the cost of the purchase from the same source in each case and did not replenish the savings.
If we factor in a monthly payment of $430.46 being made to replenish the savings plan – or in the case of the credit union loan, leaving the money in the savings account and making the loan payments to the credit union – and calculate the results for each approach, the results in each case are, again, similar. You would replace the money you spent on the car plus a little interest. The auto dealer is still the one that made a profit from the transaction while you lost the earning power of your money for a net two and one half years.
This uncovers the second fallacy in the always-pay-cash myth. The myth assumes that there is only one instance of the transaction type that is discussed or illustrated; one car, one refrigerator, one vacation, one of anything. The reality is that you will have to buy many cars, refrigerators and vacations. The always-pay-cash myth doesn’t address this issue. It relies, like most other shallow financial paradigms, on a snapshot in time that captures a scene that ceases to exist the instant it is taken, and is immediately at odds with your current reality.
This leads us to the third and most compelling failure of the always-pay-cash myth. Since the myth relies on creating support for its proposition, it consistently represents unrealistic results for both its positive effects and the negative results of not following its rigid mandates. It compares apples and elephants as if they were of the same species. It discounts any alternative that does not support its position – or improve the ratings of the pompous pundit that promotes it on radio or TV.
When investments are recommended – and they usually are – an unrealistic rate of return is illustrated. While the “market” has delivered a hypothetical 12% year on year return, investors have averaged only 2.9% gross and less than 1% adjusted for inflation and taxes.
If a savings plan is suggested, little or no consideration is given to the surprisingly unsurprising surprises that life delivers on a daily basis and that create the great sucking sound that decimates your reserves.
One Final Thought and a Conclusion…
What’s a person to do?
First, recognize that the concept of lost opportunity cost is, at best, misunderstood by the celebrities and pundits who promote their personal form of mucked up economics on radio and TV shows. (I am uncertain how I would fare if ever I had my own radio or TV show. I’d hope to emulate Ben Stein, who is fearlessly well informed and honest.)
Second, recognize that the vehicles you choose to consider when making a lost opportunity cost decision will determine the validity and outcome of your decision. If you rely on hyped up hypotheticals with 6% or higher assumptions, your choices will eventually destroy your financial foundation and your house will fall. If, on the other hand, you choose a more conservative and realistic approach that is based on guarantees and high probability returns, your financial foundation will rest on rock solid ground and your framework will strengthen.
Recall the thought early in this discussion that you can estimate lost opportunity cost before the facts are in and determine the actual results later.
· Like the country-western song says, “You gotta know when to hold ‘em, know when to fold ‘em, know when to walk away, know when to run.”
· And don’t forget what Will Rogers cautioned; “I’m more concerned about the return of my money than I am about the return on my money.”
Lost opportunity cost is one of the most powerful tools you have to evaluate financial opportunities. EUREKONOMICS Model incorporates this tool into every aspect of its approach to helping you build a successful personal economy that lasts ‘in good times and bad.
Jeffrey Reeves
The 21st Century Way to Wealth…”Do or do not…there is no try.” Yoda
August 30, 2008 | Author jr
The Way to Wealth…
By Benjamin Franklin, Commentary by Jeffrey Reeves
Having laid the groundwork for continuing his verbal treatise, Father Abraham translates the premises he’s postulated into a series of calls to action.
“Let us, then, up and be doing, and doing to the purpose;
These simplest of words carry profound meaning when it comes to you building your wealth. During the last thirty-five years Americans have lost track of the basic truth that working hard and following conventional wisdom – doing what everyone else does with their money just because that’s the way everyone else is doing – just isn’t enough. You need to invest your activity and decisions with meaning. You need to be ‘doing to the purpose.’
What purpose? Every successful personal economy has four essential goals: to be debt free, to develop an income stream that requires neither work nor active management, to have plenty of cash at hand when confronting life’s surprisingly unsurprising surprises, and, perhaps most importantly, to pay forward a legacy of both money and the secret wisdom about the way to wealth so future generations aren’t burdened with property they don’t own and investments they don’t control.
Father Abraham has other admonitions about how to travel the way to wealth.
“so by diligence shall we do more with less perplexity.
Diligence on the way to wealth means persevering with attention and care at building your personal economy. Diligence makes life simpler and less perplexing. That lets you get more done in less time and with less stress. Life is only a struggle for those who struggle with living.
Dr Benjamin Franklin’s Father Abraham has more insights…
“Sloth makes all things difficult, but industry all easy;
Motivational speakers, authors and coaches get paid millions of dollars every year to tell you the simple compelling truths that Americans have embraced for over 250 years and that Dr Benjamin Franklin’s Father Abraham popularized in the final installment of Poor Richard’s Almanac in 1758.
It’s no surprise that Dr Benjamin Franklin has become such an iconic person in history and folklore. He practiced what Father Abraham preached. He worked diligently at a wide range of tasks and became one of the wisest, most accomplished and most beloved men in history because of it…and he made it look easy.
Let’s consider a few more of Father Abraham’s ideas.
“and He that riseth late must trot all day, and shall scarce overtake his business at night; while Laziness travels so slowly, that Poverty soon overtakes him. Drive thy business, let not that drive thee;
I know a man that claims to be a ‘night person.’ He stays up late, sleeps late, gets to the office late, then works late. His family suffers, his health suffers, his business suffers, he complains about being overwhelmed on a regular basis. This man reads motivational books, attends seminars, studies Dr Benjamin Franklin’s works, yet he refuses to consider the possibility that his sleeping and work habits have anything to do with his everyday challenges.
Is this laziness? I don’t judge it, but Father Abraham implies as much and predicts the natural consequence – poverty. In America we may measure such a man as a success. He has a nice home in a nice neighborhood, drives a nice car and so on.
The hidden reality, however, is that he could be a better parent, a better spouse, a better provider, and of greater service to his clients. His income, his charitable giving, his health, life and peace of mind could all improve if he would put his business in perspective and give up the failed idea that he is a ‘night person.’
Father Abraham ends this discussion of “Do or do not…there is no try” with perhaps the most commonly quoted aphorism from Poor Richard’s Almanac;
“and Early to bed, and early to rise, makes a man healthy, wealthy, and wise, as Poor Richard says.
Bill Newman was one of the founders of the human potential movement and one of my mentors. He taught me by example that this approach to time and life management worked well.
I had hired Bill to conduct his PACE seminar for a group of my employees. I invited him to stay with my family for the two nights he would be in town. When he retired the first evening it was quite early and I asked him when he’d like me to awaken him. He said he would awaken at 5:30 and I need not worry. He did. He did so without the aid of an alarm. Bill had become so accustomed to rising early that doing so was automatic for him. I’m betting the same was true for Dr Benjamin Franklin and for thousands of other successful people for centuries and millennia.
I’ve personally followed this advice and practice for decades. I know that my life, my perception of the world, my peace of mind, my relationships, and every aspect of my life has improved since I adopted this approach to managing my work and my sleep. I also believe that, had I known about and followed this practice earlier in life, I would have avoided many of the mistakes I’ve made before, the many I’ve made since, as well as some I’ve yet to make.
Jeffrey Reeves
Posted in Money, Movie Quotes, What Others Say | Tags: ben franklin, benjamin franklin, diligence, poor richards almanac, sleep habits, sloth | 2 Comments »
0% Interest Game…
August 28, 2008 | Author dragonfly
It is rare for me to quote someone else’s blog in full detail. However, Greg Moore is helping many Americans escape from the Debt Paradigm and his emails are always worth reading. I hope this one inspires…
Dr Agon Fly - www.YouBetheBank.com
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Getting Into the 0% Interest Loan Game…
The U.S. Government is getting into the 0% Interest Loan Game. Actually, if you consider income tax refunds are really 0% loans taxpayers make to the government, the government is already in the 0% game.
Only this time, instead of you receiving 0% on money you lend to the government, the government will lend you money at 0%.
I’m referring to the new Housing and Economic Recovery Act of 2008, specifically, the “First-Time Home Buyer Tax Credit” portion of this bill.
You can read the “current” details of this provision here:
http://www.federalhousingtaxcredit.com/
I say, “current,” because, as you’ll read, some details are still being worked out.
In a nutshell, the FTHBTC provides a “refundable” tax credit up to $7,500 for first-time home buyers on homes purchased between April 9, 2008 and July 1, 2009.
Tax credits reduce your tax liability dollar for dollar, so, for example, if you have a $10,000 tax liability and you were eligible for — and took — all $7,500 of this credit, you would only owe $2,500. The “refundable”
part means you will receive this credit even if you have no tax liability. If you owe nothing, you will receive a check up to $7,500. If you expect a refund, your refund check will be increased by the amount of the credit.
Now, before you begin scheming on all of the ways you can put this credit to work in your debt-elimination, wealth-building, or flat screen TV plans… wait!
The amount of your credit must be PAID BACK over a period of 15 years. “Tax-credit” in this case means you have an IRS loan at 0% for 15 years.
This is just a wee bit different than a traditional tax-credit…
Michelle Singletary, personal finance columnist for the Washington Post had a few questions for an IRS spokesperson…
Michelle: Since this is a loan from the IRS, will the IRS be sending an annual loan statement to taxpayers?
IRS: The details of how the IRS will collect this money or inform people have not been worked out. A line would probably be added to the standard 1040 tax form to indicate that the credit should be paid as part of your tax liability.
Michelle: Can I pay off the loan early?
IRS: The IRS hasn’t yet come up with a system to accommodate an early payoff.
Michelle: What happens if someone does not pay back the debt on time or at all?
IRS: The unpaid loan will be treated like any delinquent tax obligation, meaning standard IRS interest and penalties apply.
Yep. Just like any 0% loan you default on, the 0% rate disappears, which places it in the same category as 0% credit cards, with one exception…
Do you really want to have the IRS as a creditor?
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Greg Moore is the Architect of the Debt Freedom System, ‘DebtIntoWealth — Lessons from My Journey to Debt Freedom.”
http://www.debtintowealth.com/debttrap.html
DEBTINTOWEALTH.COM
A Different Kind Of Credit Card Fraud – Credit Card Issuers…
August 9, 2008 | Author dragonfly
Here’s a story that should make you madder than h… and wake you up to the reality that is the credit card business.
A businessperson applied for and received an Advanta credit card with a low permanent rate of 7.99% – not an introductory rate, a low permanent rate.
- The card was used to pay all of the businesses expenses and was paid in full periodically as cash flow allowed; ususally each month or so.
- All payments were made on time and the credit limit was never exceeded.
- There were no cash advances taken and the “courtesy checks” that came with almost every bill, and which carry usurious rates, were summarily shredded as they were received.
- The businesspersons’s credit score was in the high 700′s and the business itself had never had any kind of negative report from any credit reporting agency or vendor.
So, what did Advanta do? They raised the rate to over 20% with a two week notice and with no justification other than “We adjust rates based on a variety of factors.”
Here’s the reality.
- You have NO CONTROL of the money that is tied up by credit card companies or of the rates they can charge you for the use of that money.
- Credit card issuers can raise your rate for NO REASON AT ALL and with minimal notice.
- Unlike the fixed or variable rate mortgage on your home, the terms of the mortgage on your paycheck that credit card companies hold can be changed by them without cause or limit – that’s right, they can charge you 100% if they wish.
Credit is a trap. You cannot win the credit game and you cannot escape unless you learn to be your own credit grantor; to be your own bank. It’s not as hard as it sounds or appears. You have to change your mind about money and adopt The Money for Life Plan thatl lets You Be The Bank. I know this is a commercial of sorts, but I also know that those who follow this approach are rocking comfortably on the front porch while others are sneaking out the back door to avoid the bill collectors.
By the way, the businessperson cancelled the credit card, paid off the balance and now relies entirely on her own bank.
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Posted in Debt, Legal, Ethical, Moral, Money, Personal Financial Management | Tags: advanta, bank, banking, banks, credit, credit card, credit card rates, credit cards, Money | No Comments »
The Pickens Plan and The Money For Life Plan
August 7, 2008 | Author Dr Agon Fly
The Money for Life Plan
America is addicted to investments they can’t control and debt they may never repay.
As you will see shortly, T. Boone Pickens has committed $58,000,000.00 to promote a plan to wean America from foreign oil in ten years.
The Money for Life Plan weans individual Americans from the Debt Paradigm almost immediately. [It's not as expensive.]
In both cases the process begins when a person – or in the case of the Pickens’ Plan – when a country changes its mind.
The Money for Life Plan lets YouBeTheBank and gain control of the money that flows through your life. It relies on the individual family re-thinking what works and what doesn’t regardless of the “conventional wisdom” that the Behemoths – large government, unions and business – want you to believe.
The Pickens Plan flies in the face of the “conventional wisdom” of Washington DC. The Pickens Plan aims to keep American money in America by converting electric power generation from natural gas to power generated by wind and solar, then converting petroleum driven vehicles to natural gas.
Both plans rely on the same principle.
The Pickens Plan believes that it’s essential for our nation to regain control of its energy and stop sending $700,000,000,000.00 of our wealth oversees every year.
The Money for Life Plan believes that it’s essential for individual American families to stop putting their money into investments they don’t control and debt they may never repay.
Below is a detailed description of the Pickens Plan. I encourage you to read it, recognize the wisdom it contains, and sign on to support it. It is worth your time and attention.
I also encourage you to visit www.YouBeTheBank.com and learn about The Money for Life Model. I don’t have $58,000,000.00 to promote this idea and the book that describes it Money Now, Money Later, Money for Life! How to thrive in good times and bad so I’m hoping you’ll discover some value there and tell a friend.
The Pickens Plan
America is addicted to foreign oil.
It’s an addiction that threatens our economy, our environment and our national security. It touches every part of our daily lives and ties our hands as a nation and a people.
The addiction has worsened for decades and now it’s reached a point of crisis.
In 1970, we imported 24% of our oil.
Today it’s nearly 70% and growing.As imports grow and world prices rise, the amount of money we send to foreign nations every year is soaring. At current oil prices, we will send $700 billion dollars out of the country this year alone — that’s four times the annual cost of the Iraq war.
Projected over the next 10 years the cost will be $10 trillion — it will be the greatest transfer of wealth in the history of mankind.
America uses a lot of oil. Every day 85 million barrels of oil are produced around the world. And 21 million of those are used here in the United States.
That’s 25% of the world’s oil demand. Used by just 4% of the world’s population.
Can’t we just produce more oil?
World oil production peaked in 2005. Despite growing demand and an unprecedented increase in prices, oil production has fallen over the last three years. Oil is getting more expensive to produce, harder to find and there just isn’t enough of it to keep up with demand.
The simple truth is that cheap and easy oil is gone.
What’s the good news?
The United States is the Saudi Arabia of wind power.
Studies from around the world show that the Great Plains States are home to the greatest wind energy potential in the world — by far.
The Department of Energy reports that 20% of America’s electricity can come from wind. North Dakota alone has the potential to provide power for more than a quarter of the country.
Today’s wind turbines stand up to 410 feet tall, with blades that stretch 148 feet in length. The blades collect the wind’s kinetic energy. In one year, a 3-megawatt wind turbine produces as much energy as 12,000 barrels of imported oil.
Wind power currently accounts for 48 billion kWh of electricity a year in the United States — enough to serve more than 4.5 million households. That is still only about 1% of current demand, but the potential of wind is much greater.
A 2005 Stanford University study found that there is enough wind power worldwide to satisfy global demand 7 times over — even if only 20% of wind power could be captured.
Building wind facilities in the corridor that stretches from the Texas panhandle to North Dakota could produce 20% of the electricity for the United States at a cost of $1 trillion. It would take another $200 billion to build the capacity to transmit that energy to cities and towns.
That’s a lot of money, but it’s a one-time cost. And compared to the $700 billion we spend on foreign oil every year, it’s a bargain.
An economic revival for rural America.
Developing wind power is an investment in rural America.
To witness the economic promise of wind energy, look no further than Sweetwater, Texas.
Sweetwater was typical of many small towns in middle-America. With a shortage of good jobs, the youth of Sweetwater were leaving in search of greater opportunities. And the town’s population dropped from 12,000 to under 10,000.
When a large wind power facility was built outside of town, Sweetwater experienced a revival. New economic opportunity brought the town back to life and the population has grown back up to 12,000.
In the Texas panhandle, just north of Sweetwater, is the town of Pampa, where T. Boone Pickens’ Mesa Power is currently building the largest wind farm in the world.
In addition to creating new construction and maintenance jobs, thousands of Americans will be employed to manufacture the turbines and blades. These are high skill jobs that pay on a scale comparable to aerospace jobs.
Plus, wind turbines don’t interfere with farming and grazing, so they don’t threaten food production or existing local economies.
A cheap new replacement for foreign oil.
The Honda Civic GX Natural Gas Vehicle is the cleanest internal-combustion vehicle in the world according to the EPA.
Natural gas and bio-fuels are the only domestic energy sources used for transportation.
Cleaner
Natural gas is the cleanest transportation fuel available today.
According to the California Energy Commission, critical greenhouse gas emissions from natural gas are 23% lower than diesel and 30% lower than gasoline.
Natural gas vehicles (NGV) are already available and combine top performance with low emissions. The natural gas Honda Civic GX is rated as the cleanest production vehicle in the world.
According to NGVAmerica, there are more than 7 million NGVs in use worldwide, but only 150,000 of those are in the United States.
The EPA estimates that vehicles on the road account for 60% of carbon monoxide pollution and around one-third of hydrocarbon and nitrogen oxide emissions in the United States. As federal and state emissions laws become more stringent, many requirements will be unattainable with conventionally fueled vehicles.
Since natural gas is significantly cleaner than petroleum, NGVs are increasing in popularity. The Ports of Los Angeles and Long Beach recently announced that 16,800 old diesel trucks will be replaced, and half of the new vehicles will run on alternatives such as natural gas.
Cheaper
Natural gas is significantly less expensive than gasoline or diesel. In places like Utah and Oklahoma, prices are less than $1 a gallon. To see fueling stations and costs in your area, check out cngprices.com.
Domestic
Natural gas is our country’s second largest energy resource and a vital component of our energy supply. 98% of the natural gas used in the United States is from North America. But 70% of our oil is purchased from foreign nations.
Natural gas is one of the cleanest, safest and most useful forms of energy — residentially, commercially and industrially. The natural gas industry has existed in the United States for over 100 years and continues to grow.
Domestic natural gas reserves are twice that of petroleum. And new discoveries of natural gas and ongoing development of renewable biogas are continually adding to existing reserves.
While it is a cheap, effective and versatile fuel, less than 1% of natural gas is currently used for transportation.
The Mechanics
We currently use natural gas to produce 22% of our electricity. Harnessing the power of wind to generate electricity will give us the flexibility to shift natural gas away from electricity generation and put it to use as a transportation fuel — reducing our dependence on foreign oil by more than one-third.
How do we get it done?
The Pickens Plan is a bridge to the future — a blueprint to reduce foreign oil dependence by harnessing domestic energy alternatives, and buy us time to develop even greater new technologies.
Building new wind generation facilities and better utilizing our natural gas resources can replace more than one-third of our foreign oil imports in 10 years. But it will take leadership.
On January 20th, 2009, a new President will take office.
We’re organizing behind the Pickens Plan now to ensure our voices will be heard by the next administration.
Together we can raise a call for change and set a new course for America’s energy future in the first hundred days of the new presidency — breaking the hammerlock of foreign oil and building a new domestic energy future for America with a focus on sustainability.
You can start changing America’s future today by supporting the Pickens Plan. Join now.
Posted in Legal, Ethical, Moral, Money, What Others Say | Tags: debt, economics, economy, energy, investing, investments, Life, Money, thrive, undefined | No Comments »
The 21st Century Way to Wealth – A Word To The Wise…
August 5, 2008 | Author dragonfly
By Ben Franklin and Dr Agon Fly
COURTEOUS Reader,
I have heard that nothing gives an author so great pleasure as to find his works respectfully quoted by others.
Dr Agon Fly agrees.
Judge, then, how much I must have been gratified by an incident I am going to relate to you. I stopped my horse lately, where a great number of people were collected at an auction of merchants’ goods.
Today we park our cars in multilevel parking facilities at multilevel malls where a great number of people are collected for “sales.”
The hour of the sale not being come, they were conversing on the badness of the times;
Just like last week, of month or year, times and topics remain consistent. Some see the world as full of shadows and others see it as full of light. Those who live on the dark side tend to engage in negative talk and behavior while those on the side of light focus on more positive thoughts and activities – as you will discover was the case in 1758 as it is today. Read on.
and one of the company called to a plain, clean old man, with white locks,
A picture of wisdom.
“Pray, Father Abraham, what think you of the times? Will not these heavy taxes quite ruin the country? How shall we ever be able to pay them? What would you advise us to do?”
Today, as in 1758, people look to those with experience and the wisdom of years for advice and counsel. The difference between 1758 and 2008 is that current America has mistakenly clothed government – including its most incompetent branch; the Congress – corporations, unions and bureaucracies with the mantel of both knowledge and wisdom.
Father Abraham stood, up and replied, “If you would have my advice, I will give it you in short; for ‘A word to the wise is enough,’ as Poor Richard says…”
Ah! The first words of Poor Richard and how profound. There’s much more to come. Read on.
Posted in Money, Personal Financial Management, Taxes, What Others Say | Tags: bad times, good times, Money, Taxes, wisdom | No Comments »
Financial News From The Week Of July 25th, 2008…
August 4, 2008 | Author Dr Agon Fly
I pay close attention to the financial news. It’s part of my job to know what’s really going on in the general economy so I can properly train other advisors and guide my personal clients with integrity.
Below are six articles from financial news sources from last week I encourage you to skim the first five and read No. 6 carefully.
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Government debt nears record high The Bush administration announced its plans to borrow billions of dollars to deal with the skyrocketing budget deficits, placing the blame for the near record levels of debt on the dismal economy a… |
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President Bush signs housing rescue bill Despite previous threats to veto any proposed housing bill, President Bush today signed a controversial bill that aims to help the limping U.S. housing market as well as provide a financial boost m… |
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Home prices down 15.8% in one year Between May 2007 and May 2008, the cost of homes in the U.S. declined an unprecedented 15.8 percent, indicates the Standard & Poors/Case-Shiller Home Price Index of 20 cities. This figure… |
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Hedge funds to post worst month in five years Hedge funds may post their worst month in at least five years after bets on financial stocks and crude oil backfired. Wagers on a decline in financial stocks and homebuilders soured afte… |
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IMF: Housing recession, credit condition will worsen The International Monetary Fund (IMF) today said there is no visible end to the ongoing housing recession in the U.S., adding that tough credit conditions could contribute to an extended economic s… |
Don’t expect another bull market
Stock returns may never be the same – at least for this generation of investors.
(Fortune) — Although you won’t find it listed on your calendar, we’re approaching the anniversary of an epochal event. No, it has nothing to do with the NCAA basketball tournament. It’s a different kind of March Madness: The end of the bull market that lasted for a generation and changed the way that Americans think about stocks.
Posted in Money, Personal Financial Management, What Others Say | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, money wisdom, morningstar, morninstar report, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Wall Street, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance, wisdom about money | No Comments »
Two Questions About The Money For Life Model…
August 3, 2008 | Author Dr Agon Fly
1. “Why haven’t I heard about the Money for Life Model till now?”
What amazes me most about this question is that the Money for Life Model has been the model preferred by successful savers and investors for thousands of years. More to the point, it is the model that successful Americans followed for the past two centuries while building the most powerful economy in history.
During the past thirty years or so, however, this tried, tested and proven model has been obscured by misinformation from advertising as we have been blinded by guidance, from Behemoths and their minions, that puts our money in their pockets.
· Americans have been bamboozled into thinking that the model that has proven successful for millennia, in all kinds of economies, is no longer valid.
· We have been propagandized into believing that giving control of our money to others is wiser than maintaining control ourselves.
· We’ve been convinced that saving money – getting a guaranteed rate of return, and knowing that we’ll have more money on December 31st than we started with on January 1st – is naïve and unsophisticated.
BUNK!
Large financial institutions, unions, government agencies, manufacturers, retailers – the Behemoths – aim to get control of your money through personal loans, mortgages, credit cards, savings, taxes, assessments, dues, investments, “sales,” and any other mechanism they can devise to move your money into their accounts. As we say elsewhere, they make bad decisions feel good.
There are thousands of Behemoths that have discovered that your money is the pavement for their road to wealth. They are, of course, unwilling to tell you that twelve months same as cash is not really the same, or that the hypothetical return on a mutual fund really is hypothetical, or that the average “rate of return” they advertise excludes years of poor performance, or that the small tax or dues increase becomes burdensome in a few years.
In short, you haven’t heard a lot about the Money for Life Model because it can make you wealthy but doesn’t serve the Behemoths and doesn’t put your money into the pockets of their minions.
2. “If the Money for Life Model works so well, why isn’t everyone following this approach to money?”
The Behemoths indoctrinate us with advertising and other forms of propaganda, but they sell us through their minions. Their minions – or representatives – are frequently our family, friends and neighbors. They know only what the Behemoths allow them to know. They learn the art of communicating the Behemoths’ programs as if they were the best and only approach to the use of your money.
There are tens of thousands of Behemoths and millions of their minions operating credibly to convince you that you should do what they suggest or recommend you do with your money – Conventional Wisdom.
There are few hundred – perhaps thousand – advisors and guides who are committed to re-introduce America to the Money for Life Model and are willingly forego the higher compensation that comes from promoting the plans of the Behemoths.
Do the math.
Posted in Money, Personal Financial Management | Tags: credit, economy, financial, investing, investments, mutual fund, saving | No Comments »
What’s The Difference Between “Soulutions” To Money Problems And Conventional Wisdom…
July 21, 2008 | Author dragonfly
“Soylent Green is people!” Soylent Green, 1975
Conventional wisdom…
In the future world of Soylent Green, people looked forward to the occasional serving of a food, called Soylent Green that the Behemoth of that time doled out periodically. What they didn’t know was that the delightful and nutritious foodstuff was actually made from human remains. They followed the conventional wisdom of the time and questioned little if anything that their Behemoth fed them – food, ideas, solutions.
- Conventional wisdom is doing what everyone else is doing and thinking what everyone else is thinking just because that’s what others are doing and thinking.
- Conventional wisdom would have you believe that the Behemoths – governments, bureaucracies, unions, corporations, universities or any other organization that might hold sway over your native intelligence – know more about what’s best for you than you know yourself.
- Conventional wisdom would have you believe that the snippet of information in an oft-run TV commercial or one-hour “special report” is the essence of a truth that Americans should embrace as a guiding principle for their everyday lives.
- Conventional wisdom would have you not think at all and adopt solutions that move your money from your pockets into the accounts of the Behemoths.
- Conventional wisdom makes bad decisions feel good just long enough to fleece you and send you back to pasture to grow more wool.
Soulution
- Soulution was coined by Jeffrey Reeves to describe an approach to solving money problems that is based in awareness of who you are and of what’s really happening in the economic world you live in. It is also a tab on www.EUREKONOMICS.com
- The key element of every soulution to every money problem is found at the core of the person who has a problem and not in the cookie cutter answers that Behemoths dole out like Soylent Green.
- The EUREKONOMICS Model is not a soulution by itself. It is a distillation of the wisdom of the ancient Bible, the New Testament, philosophers, statesmen, economists and other wise people of every era and age.
- The EUREKONOMICS Model shows you how to lay a foundation and build a framework for your personal economy based on your unique situation but leaves the management and control of that economy in your hands.
Don’t settle for Soylent Green!
Jeffrey Reeves
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Money Is Important, But So Are Red Marbles…
July 20, 2008 | Author dragonfly
Generally this blog deals with issues relating to money, saving, investing and the general economy and how that relates to your personal economy. Today’s blog digresses a bit from the norm but not really too far. It recounts a story I’ve heard several times about how one man used some of the money in his personal economy with great results. It inspires me and perhaps it will inspire you too.
RED MARBLES
I was at the corner grocery store buying some early potatoes. I noticed a small boy, delicate of bone and feature, ragged but clean, hungrily apprizing a basket of freshly picked green peas. I paid for my potatoes, but was also drawn to the display of fresh green peas. I am a pushover for creamed peas and new potatoes. Pondering the peas, I couldn’t help overhearing the conversation between Mr. Miller (the store owner) and the ragged boy next to me.
‘Hello Barry, how are you today?’
‘H’lo, Mr. Miller. Fine, thank ya. Jus’ admirin’ them peas. They sure look good.’
‘They are good, Barry. How’s your Ma?’
‘Fine. Gittin’ stronger alla’ time.’
‘Good. Anything I can help you with?’
‘No, Sir. Jus’ admirin’ them peas.’
‘Would you like take some home?’ asked Mr. Miller.
‘No, Sir. Got nuthin’ to pay for ‘em with.’
‘Well, what have you to trade me for some of those peas?’
‘All I got’s my prize marble here.’
‘Is that right? Let me see it’ said Miller.
‘Here ’tis. She’s a dandy.’
‘I can see that. Hmmmmm, only thing is this one is blue and I sort of go for red. Do you have a red one like this at home?’ the store owner asked.
‘Not zackley but almost.’
‘Tell you what. Take this sack of peas home with you and next trip this way let me look at that red marble’, Mr. Miller told the boy.
‘Sure will. Thanks Mr. Miller.’
Mrs. Miller, who had been standing nearby, came over to help me. With a smile said, ‘There are two other boys like him in our community, all three are in very poor circumstances. Jim just loves to bargain with them for peas, apples, tomatoes, or whatever. When they come back with their red marbles, and they always do, he decides he doesn’t like red after all and he sends them home with a bag of produce for a green marble or an orange one, when they come on their next trip to the store.’
I left the store smiling to myself, impressed with this man. A short time later I moved to Colorado , but I never forgot the story of this man, the boys, and their bartering for marbles. Several years went by, each more rapid than the previous one.
Just recently I had occasion to visit some old friends in that Idaho community and while I was there learned that Mr. Miller had died. They were having his visitation that evening and knowing my friends wanted to go, I agreed to accompany them. Upon arrival at the Funeral Home we fell into line to meet the relatives of the deceased and to offer whatever words of comfort we could.
Ahead of us in line were three young men. One was in an army uniform and the other two wore nice haircuts, dark suits and white shirts…all very professional looking. They approached Mrs. Miller, standing composed and smiling by her husband’s casket. Each of the young men hugged her, kissed her on the cheek, spoke briefly with her and moved on to the casket. Her misty light blue eyes followed them as, one by one, each young man stopped briefly and placed his own warm hand over the cold pale hand in the casket. Each left the Funeral Home awkwardly, wiping his eyes.
Our turn came to meet Mrs. Miller. I told her who I was and reminded her of the story from those many years ago and what she had told me about her husband’s bartering for marbles.
With her eyes glistening, she took my hand and led me to the casket.
‘Those three young men who just left were the boys I told you about. They just told me how they appreciated the things Jim ‘traded’ them. Now, at last, when Jim could not change his mind about color or size….they came to pay their debt.’
‘We’ve never had a great deal of the wealth of this world,’ she confided, ‘but right now, Jim would consider himself the richest man in Idaho’.
With loving gentleness she lifted the lifeless fingers of her deceased husband. Resting underneath were three exquisitely shined red marbles.
The Moral : We will not be remembered by our words, but by our kind deeds.
Life is not measured by the breaths we take, but by the moments that take our breath away.
_____________________________
Wishing you Health, Abundance, Love and Light…
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Posted in Legal, Ethical, Moral, Money, Personal Financial Management, What Others Say | Tags: Abundance, economics, economy, Health, investing, Life, Love, marbles, Money, saving | No Comments »
It’s Only Money? How You Can Prosper With Small Savings Decisions…
July 18, 2008 | Author dragonfly
It’s only…
How many times have you heard – or said – something like, “Let’s buy it! It’s only fifty bucks. That’s a twenty-five dollar savings!”Guess what. There is no “only” when you are dealing with your money. And, savings are only savings when you put them into your “bank”.
If, instead of spending it, you put your fifty bucks in your “bank”, it would compound to over $400.00 in 30 years at 7.2%. Add to that the 25 bucks you “saved” and you’d have over $600.00. Consider that you make those kinds of decisions frequently – say 12 times a year – and your compounded savings total is over $7,000.00. Do it every year for 30 years and you be a lot closer to fifty grand than fifty bucks.
“Only” fifty bucks? Don’t kid yourself. The old adage “every penny counts” is an old adage because it’s true. We all tend to trick ourselves when it comes to money, and one of the oldest tricks in the world is the “it’s only”. The next time you think you are saving money buying a product on sale, ask yourself if the product you are buying and the money you are “saving” is really worth it.
Remember – only money is money. For everything else, including your “investments”, you have to spend your money. When you’re closer to pushing up daises than doing fifty push-ups, having money instead of the stuff you bought on sale will be a blessing.
“You can be young without money but you can’t be old without it.” Tennessee Williams
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www.TheMoneyForLifeBook.com – www.YouBeTheBank.com
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Posted in Money, Personal Financial Management, Retirement | Tags: compound interest, compounded savings, fifty bucks, investments, Money, saving, savings | No Comments »
Home Equity Isn’t Money But A Lot Of Families Think It Is…
July 15, 2008 | Author dragonfly
The Measure of Wealth
A recent ad by the national Association of Realtors states that home equity accounts for about 65% of the average American’s wealth.
WOW!
There’s something wrong with that equation. That means that a family with a $500,000 house and a $300,000 mortgage – $200,000.00 in equity - plus a car loan and a few thousand dollars on a credit card has more debt than they have assets when you exclude the home’s equity.
Do the math. If $200,000.00 is 65% of what the family puts on the balance sheet, the total on the bottom line is about $305,000. Add up the mortgage, a $25,000.00 car loan and $5,000.00 in credit card debt and you get $330,000.00.
The Bottom Line on the Family Balance Sheet
Failure to recognize that the bottom line is not really the bottom line leads to the misconception that a positive “net worth” justifies all kinds of unsound economic behavior – like borrowing the equity to support a lifestyle that the family can’t afford in the first place.
A Solution
Here’s a solution that can help almost everyone, but especially those in their 30′s, 40′s and 50′s with children still at home. Begin building your financial foundation today. Buy a properly funded whole life insurance policy [you can make sure a policy is properly funded when the guaranteed cash value equals the initial death benefit at age 95 or 100] that will accumulate enough cash value to allow you to pay of the mortgage in half the original term; e.g., 15 years for a 30 year mortgage, 10 years for a 20 year mortgage, etc.
During the accumulation period [before you pay off the mortgage] you can use the cash values in the policy to finance things like cars and the kids education. As long as you repay the loans you make to yourself to pay for these items [you'd be foolish not to], you’ll still have the money to pay off the mortgage.
Managing your personal economy isn’t all that difficult once you recognize that there are solutions to every financial challenge and every money need and that the Behemoths want not to solve your problem but to pad their pocketbooks.
BY Jeffrey Reeves MA, EUREKONOMIST
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Posted in Money, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, books on personal finance, debt, debt elimination, debt management, debt reduction, debt to others, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, life insurance, long term care insurance, Money, money for life, mortgage, mortgage management, mutual insurance, mutual insurance company, nash, nelson nash, Personal Financial Management, r nelson nash, Retirement, retirement income, retirement planning, saving, term life insurance, The Four Pillars, universal life insurance, variable life insurance, Whole Life Insurance, why buy whole life insurance, why whole life insurance, wisdom about money | 1 Comment »
$1.6 Trillion in Losses and Counting…
July 13, 2008 | Author dragonfly
“There’s no crying in baseball!” Part II
If you are truly interested in your financial future – especially over the next year or two – you’ll read John Mauldin’s newsletter on a regular basis. Here’s an excerpt from and a link to his most recent. After a detailed discussion of the Freddie Mac and Fannie Mae fiascos, John opines about the near term and long term prospects for the economy and investing…
Posted Jul 11 2008, 11:13 PM
by John Mauldin
“…I am a long-term (and even mid-term) optimist. We have to work through some serious problems, but we will. Valuations are going to be low once again, and it will be time to become bullish. And researching and writing my book on how the world will change in 20 years makes me very optimistic. No one in 20 years will think of today as the “good old days.” The changes that are in front of us will be amazing. So, simply take a deep breath, be conservative today, and get ready for a really wild and fun ride.” Emphasis added…
Being conservative has always been common sense but in 2008 and for the foreseeable future it’s essential. If the Dolts in DC would recognize that and quit spending our money like it’s their own, the People they are sworn to serve would not be facing personal recessions while the fat cats in Washington get fatter. OH well! Vote for the non-incumbant and pray for a better future.
The ‘soulution’ to most Americans’ problems is to get off the credit train and get back to the basics of conservative personal economics. The people have been bamboozled for decades by the now failing financial industry and the incompetents that legislate on its behalf instead of ours. It’s time to ignore their insanity and regain our own.
EARN, SAVE, SPEND ONLY WHAT YOU CAN REPAY TO YOURSELF, LEAVE A LEGACY OF BOTH WISDOM AND WEALTH…
It isn’t as hard as you might think. Americans who adopt the Money for Life Model find that their financial situation improves rapidly and without significant life style changes. It’s really nothing more than controlling the money that flows through your life.
__________________________
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Posted in Money, Personal Financial Management, What Others Say | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, money wisdom, morningstar, morninstar report, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Wall Street, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance, wisdom about money | No Comments »
Short Term – Money, Long Term – Investments, And Never The Twain Shall Meet…
July 12, 2008 | Author Dr Agon Fly
“There’s no crying in Baseball!” A League of Their Own, 1992
The baseball season is long and strenuous. Players, coaches and teams have to pace themselves. They recognize that one game in a long season – win or lose – is less important than consistently winning more than they lose. More importantly, a team has to win more than the other teams in their division if they want to get to the playoffs, compete for the league championship and make it to the World Series. We’ll get back to that in a paragraph or two.
The baseball season is like your financial season from the time you wake up to the reality that your financial future is in your own hands, till the time you pass on to the next world and pay forward the wisdom and wealth you accumulated during your earthly existence. So, like baseball, you don’t expect to win every time you make a decision about money and investing. What you aim for is consistently winning more than you lose – right?
Wrong. In many baseball seasons a team that lost its opening game and chanted the mantra, “It’s a long season; you can’t win ‘em all,” ended the season one half game out of first place, missed the playoffs, the league championship and the World Series. Every game counts and every financial decision counts.
Moreover, when a team prospers through the season and gets into the division playoffs, they are subject to defeat in the short term. And so it goes through division play and into the Series; victory or defeat is just the swing of the bat away. There are thirty teams in Major League Baseball but only one winner in the end.
So, also, when you get to the point where you want to live off your money and investments instead of your labor, you can have a great season right up to the end and lose in the short term. So, conclude for yourself that the short term is both more important and more manageable than the long term. Having money that you control in the short term is more important than having “long-term” investments that you don’t control, and that someone else – perhaps with motives that don’t serve you - does.
Every baseball team knows that winning or losing a single game could well leave them in front of their TV instead of in the dugout during the playoffs. Americans need to recognize that managing their money so that they don’t lose it is more important than hoping that some investment over which they have no control will miraculously get them into the playoffs and make them winners in the World Series of wealth building.
America has been duped into believing that is OK to lose money, that waiting out ‘the market’ is a strategy that serves them; that the future is assured if only they ‘stay the course.’
BUNK!
Americans need to wrest control of their money from the Behemoths that have seduced them into believing that bigger is smarter or better than they are, and that the Behemoths should be the custodians of Americans’ money instead of the individual Americans themselves.
_____________________________
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Posted in Legal, Ethical, Moral, Money, Movie Quotes, Personal Financial Management, Retirement | Tags: financial decision, future, investing, investments, Money, wealth, wisdom | No Comments »
Geopolitics And Your Pocketbook – Why You Need Cash Money NOW
July 6, 2008 | Author Dr Agon Fly
“Go ahead, make my day.” Sudden Impact, 1983
It’s the 4th of July weekend and I’m getting pretty darn mad at the 535 Cowards in Congress. We Americans are willing to follow leaders who look out for us and the country but are tired to the bone of the Dolts in DC who spend most of their time and much of our money trying to damage the opposition and get themselves re-elected.
Gas prices are going through the roof. Food from afar – and every other item that arrives in a truck, plane, train, or automobile – is going up because gas prices are going up. Iran is threatening to squeeze the supply routes and put severe economic pressure on the world. Saudi Arabia refuses to increase production. Hugo Chavez is a fruitcake in a bowling shirt and wants nothing more than to prove that socialism is somehow better than democracy, state run everything is better than liberty and watching America suffer is better than TV.
The world – not just America – runs on oil. America currently consumes more oil per-capita – than any other country, but that is rapidly changing. China and India are increasingly demanding more oil and putting serious pressure on the supply and demand equation. Europe wants to become the dominant economic power in the world and needs an ever-increasing supply of oil to do that. Developing countries want and need more oil to build their economies.
So, here are the oil producing countries staring down America and Americans – and the rest of the world too – and threatening us with subtle and not so subtle “Make my day” threats while Congress debates and discusses what the rest of the world has proven;
-
nuclear energy works safely,
-
deep water drilling is economical and safe (Katrina proved that),
-
shale oil is extractable economically and ecologically,
-
ANWAR can be explored and could produce enough oil to take care of America for the decades it needs to develop alternatives that are less invasive – and fund the salvation of the polar bears in the process if that’s truly needed
-
and, finally, if we have leaders with the will, America will rise to the occasion and become the world’s leader in those alternative forms of energy
What does all that mean for us? American’s are going to suffer economic hardship in the short term because of the inaction and ineffectiveness of the Cowards in Congress. This problem’s been with us since the 1970′s and the Dolts in DC could have solved it ten times over if they had the courage to do so.
There’s darn little that individuals can do about it in their personal economies other than adopt a conservative financial strategy that cuts back on
-
consumer goods spending for cars, furniture, and luxuries
-
and puts
- saving money
- buying a house
- paying off the mortgage
at the top of the list, while other costly practices like
· investing in maybe-it’ll-grow mutual funds,
· the latest “Whatever 101″ miracle money making scheme,
· can’t-lose annuities that tie up your money for years, if not decades,
move to the dustbin.
Remember, when times get rough you need ready cash money and not the maybe-money from investments that guarantee only that they guarantee nothing.
_______________________________________
by Jeffrey Reeves, MA – www.youBEthebank.com
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Posted in Legal, Ethical, Moral, Money, Movie Quotes | Tags: economics, economy, ethics, Money, saving, savings | No Comments »
Oxymoron: Wall Street Wisdom About Your Money…
June 27, 2008 | Author dragonfly
Wisdom???
Forbes.com
Liz Moyer, 06.26.08, 3:00 PM ET
Wall Street’s Widening Credibility Gap
The carnage spread across the financial sector. Fortis was down 19%, Lehman down 6%, National City (nyse: NCC – news - people ) down 7%, MBIA (nyse: MBI – news - people ) down 11% and Washington Mutual (nyse: WM – news - people ) down 6%. The Keefe Bruyette & Woods (nyse: KBW – news - people ) index of bank stocks, the BKX, was off 3%. Financials dragged the S&P 500 17% below the record it set back in November. [Emphasis added]
The wizards of Wall Street can’t figure out how to take care of their own money much less yours. It’s time for every American to take back the control of their money, and there’s a simple, age old, tried, and tested formula you can apply that allows you to do that - http://themoneyforlifeblog.com/?page_id=69
The Debt Paradigm Isn’t Working…
I know this may seem blatently self serving and it is to an extent. On the other hand, the paradigm that controls America’s thinking about money management, saving and investing just isn’t working and needs to be changed. Money Now, Money Later, Money for Life…How to thrive in good times and bad offers a simple, sustainable, common sense set of strategies and practices that allow Americans to wrest control of their money from the Behemoths that demonstrate only greed and lusting for your money and neither wisdom nor compassion for you.
Peace of Mind Is the Payoff…
American’s who have read Money for Life, and who are applying the principles it teaches to their personal money management practice, are experiencing peace of mind about money that seemed out of their reach only a short time ago. You owe it to yourself to learn the Money for Life secrets that have been practiced since Biblical times and which were abandoned in the late 20th century.
Avisors with decades of experience who read Money for Life write comments like this:
“I Read your book it was great!! I am a financial advisor and have been doing a lot of research about banking concepts. I like the way you introduced the concepts and I am going to institute them into my practice. It is a shame the home office doesn’t teach these concepts to their agents. The more I read and test the more I like the concepts and the less I like what I’ve been taught by those that aren’t as wise. I would very much enjoy the opportunity to find out more about what else I could be doing for my clients. Thank you for sharing your knowledge.”
Thanks for your patience and understanding. America needs to know what’s in this book, not because I wrote it – I’m simply the voice of the many who preceded me – but because the ideas, principles, and practices it presents are essential to their success with money.
Jeffrey Reeves
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Mutual Fund Misrepresentation…
June 25, 2008 | Author dragonfly
“Frankly, my dear, I don’t give a damn.” Gone With the Wind, 1939
It appears that the mutual fund industry is very much like the Congress. Proof again that Americans are being bamboozled by Behemoths whose only interest is in moving money from your pockets into their own accounts. This isn’t a personal opinion but the opinion of a mutual fund industry watchdog as Gary Halbert reports in his newsletter this week! Here are a few excerpts and a link to the full text.
A Shocking New Morningstar Study!
June 24, 2008
“…Morningstar released a study last week showing that many mutual fund managers have little or none of their own money in the very funds they manage …
“Yet the new Morningstar study shows that about half of the mutual fund managers they track have NONE of their own money in the funds they manage. ZERO.
“Morningstar found that 47% of US stock funds and 61% of foreign stock funds have no investment of the managers own money. Bond funds fare even worse with 66% of taxable bond funds, 71% of balanced funds and 80% of municipal bond funds having no manager investment…
Perhaps the most interesting part of the study was Morningstar’s analysis of its own Picks and Pans. This is a service provided by Morningstar where they select funds that may be good long-term investments (the Picks) as well as mutual funds to avoid (the Pans). When analyzing management investment in these two groups, Morningstar found that the Picks had a median manager investment of $430,000, whereas the median investment by the fund managers in the Pan category was $0…Get the message?”
Here’s the link to the whole article; http://investorsinsight.com/blogs/forecasts_trends/archive/2008/06/24/a-shocking-new-morningstar-study.aspx
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There are better ways to handle your money that the Behemoths won’t, don’t, or can’t talk about. www.TheMoneyForLifeBook.com
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American Money, American Oil, American Innovation…Revisited
June 21, 2008 | Author dragonfly
This post from May 9 is becoming more relevant every day…
Friday, May 9th, 2008
“Frankly, my dear, I don’t give a damn.” Gone With the Wind, 1939
The Congress doesn’t “give a damn.” It has completely abrogated its sworn responsibility to provide vision, wisdom and leadership. Some in Congress have given their votes and their minds over to the insane claims of fringe groups who really hate America. Others have relinquished their power to the Behemoths; corporations, unions, lobbyists and 527′s that disguise themselves as spokespersons for some group or cause, and government agencies whose only function is self preservation regardless of the cost to the Country and its People – that’s you and me and 300 million other Americans.
America is committing suicide by Congressional Cowardice!
All in Congress have put political party goals above the needs of America.
The presidential candidates are members of Congress, too. Each of them has “caved” to one or more of the caveats of their constituents during the campaign. All of them have failed the “vision, wisdom and leadership” test when it comes to recognizing and dealing with the realities of the 21st century.
Obama naively clings to an exclusive far left agenda while promising to be a uniter. McCain offers only partial insights into his thinking and programs as he tries to convert his image from that of an independent minded conservative to that of a ”sorta” party loyalist.
There are two intimately related issues that should drown out the cacophony of claims by the crazies and the wimps and overshadow every other concern:
- America is at war. Insane Islamic zealots believe that only they possess the truth, and that destroying the western world in the name of Allah is the path to their heaven. It’s war declared on America - not criminal activity.
- America’s – and the world’s – economy is based on oil. If America doesn’t tap into its own oil reserves – as every other country in the world is doing – America will soon become a slave to the OPEC nations like Saudi Arabia and Venezuela – the birthplaces of the Islamic and other crazies. At the same time, America needs to have the vision to commit significant resources to oil alternatives.
If our leaders deal with these two issues, every other concern will resolve itself.
Some will argue that the current economic malaise is driven by failures in both the oil and the financial industry. The financial industry, however, is becoming more and more dependent on oil rich countries to supply it with the fuel for its engine, and that means dependence on oil by proxy.
Your personal economy depends on America being a leading economic power. If America fails to maintain its status as the engine of liberty through its economic strength, you and I will become servants to some foreign power.
We need to elect leaders who recognize and deal with these harsh realities instead of those in Congress today who pander to every Behemoth that promises a contribution to their campaigns to stay in office – translate that as “to stay in power.”
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In the meantime, find ways to save money that allow you to control the money in your life. At the micro level you can switch to energy efficient light bulbs, drive more slowly and less often, buy more fresh food and less prepared food; that will help you and the rest of us too.
At the macro level you need to gain control of your money, to apply principles and practices that have been tested and proven over centuries and millennia and that apply equally today.
_________________________
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Teaching Children About Money…
June 17, 2008 | Author dragonfly
“Prepare not a path for your children. Prepare your children for a path.”
Dr Agon Fly
The Bike…
Here’s an example of how one man prepared his child for a path and passed on a Legacy.
Mr. and Mrs. Smith started a “bank” for their only son when he was born. They used whole life insurance and funded it in anticipation of the boy’s future needs.
When Junior was 11 years old, he came to Dad very excited about a bike he had seen advertised. (I remember that feeling. For me it was a Schwinn with a chrome headlight prominently displayed in a store window.)
“Dad” he said, “there’s this really cool bike at the ABC Bike Store, and Dad, if I had this bike, it’d be the coolest bike on the street and I really want it Dad.”
“How much does this bike cost, Junior?” Dad asked.
“Welllllll…ummmm…I think it’s kinda ‘spensive, Dad” Junior replied and he handed Dad the newspaper ad.
“Nine hundred dollars is a lot of money for a bike, Junior,” said Dad with a bit of surprise in his voice.
The First Lesson…
Then, after a long pause, Dad said, “I think it’s time for you to learn about money, Junior. When you were born, your Mom and I started a very special savings account for you. We still own the account, but the money in this account is there to help you learn about money. Let’s call this account your personal “bank.” It’s time for your first lesson.”
Dad explained to Junior that he could borrow the money for the bike from his “bank,” and that Junior would have to repay the money borrowed. Then he taught Junior the basics of interest and payments in the life insurance policy.
When Junior objected that he didn’t have any way to make the payments, Dad reminded him that he received an allowance to buy his lunches, to buy birthday gifts, go to the movies and so on. He could decide to use that money differently if he really wanted the bike more than those other things. Dad also offered to pay Junior extra money if he agreed to do some chores on a regular schedule. Junior would have enough income to pay back his “bank” at the rate of $33.00 per month – including interest – in just less than three years and still have some money left over for other things.
The bargain was struck, and Junior got the coolest bike on the street. When the other kids saw the bike they were amazed and wanted one just like it.
“How much did your Dad pay for it?” they wanted to know.
“Dad didn’t buy it for me” Junior replied, “I borrowed the money from my own ‘bank’ and bought it myself for over nine hundred dollars.”
The Real Value of the “Bank”…
Imagine how Junior felt. His bike made him feel proud. His “bank” enhanced his self-esteem. You know which of those is truly important. The bike will rust. Self-esteem turns into gold: not just financial gold but moral, ethical and relationship gold as well. Junior went on to finance his first car at 16 and repay himself. He then used the “bank” to fund a large part of his college costs and repay himself. He’ll soon be buying a new car…and financing it himself…while the money in his “bank” is growing tax-free. In addition, Junior always recovered both the principal and interest in his “bank” that he – or his dad – would otherwise have paid to a commercial lender.
Think about how much tax-free money Junior will control in another 50 years and the kind of financial kick-start his children and grandchildren will have because he learned about Money for Life when he bought the bike at age 11.
“What is important for kids to learn is that no matter how much money they have, earn, win, or inherit, they need to know how to spend it, how to save it, and how to give it to others in need.” Barbara Coloroso
That is legacy.
Jeffrey Reeves
Posted in Debt, Money, Personal Financial Management, You BE the "Bank" | Tags: 401(k) plans, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | 1 Comment »
A Legacy Trust Of Money, Wisdom, and Wealth…
June 9, 2008 | Author dragonfly
“There are only two lasting bequests we can hope to give our children. One of these is roots, the other, wings.” -Hodding Carter
Don and Dawn want to give their children and grandkids both roots and wings. Strong Judeo/Christian values run through their veins and promise their progeny and heirs both roots and wings. There was something missing, however. Don and Dawn knew what they wanted, but were unsure of the “how to” part of the equation. That’s where EUREKONOMICS help.
The Money for Life Guide that Don and Dawn are working with introduced the idea of a Money for Life Legacy to them. It works like this. Don and Dawn purchase whole life insurance contracts on themselves and on each of their children and each of their grandkids as well. The insurance policies will eventually be owned by a special kind of trust called a “dynasty trust.” Don’s brother and sister-in-law are also joining the trust so there will be about 15 insurance policies purchased to fund the trust.
The role of the trust is to act as a family “bank.” As the insurance policies develop cash values – in this case over $120,000.00 during the first five years – the trust beneficiaries will be able to borrow those cash values for education, automobiles, housing, special needs and so on.
Later, when one of the founding family members dies or if – God forbid – one of the children or grandchildren passes on, the death benefit proceeds will be used to pay up existing policies or purchase new policies on family members. This increases the money available for loans to the remaining family members.
In the case of Don’s and Dawn’s family, the trust will hold about $400,000 dollars cash and represent over 1.5 million dollars in death benefits in twenty years if everyone is still alive. In forty years, when you would expect the founders to be deceased and the children to be retired while the grandchildren are producing more progeny, the trust would hold millions of dollars in cash values and guarantee the beneficiaries that they would never have to borrow from a commercial bank.
Don and Dawn’s children, grandchildren and great grandchildren as well as future generations could rely on the family “bank” for mortgages, business loans, education loans, and any other loan that the trust allows.
The EUREKONOMICS Model is an extraordinary way to get control of the money that flows through your life. It is just as powerful as a way to pay forward a legacy of wisdom and wealth to those you care about.
Learn more, own more, owe less – all great destinations. Here’s a map that will get you there with certainty –
Jeffrey Reeves
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I Have A Dream About Money, And An Investment Nightmare…
June 7, 2008 | Author dragonfly
People’s Dreams…
“As God is my witness, I’ll never be hungry again.” Scarlet O’Hara in Gone With the Wind, 1938
My Personal Observations…
Over the past 40 years I have been an insurance and financial advisor to small businesses, medical, legal, accounting, real estate and other professionals as well as executives, school teachers and brick layers – people from every profession and occupation it seems.
Perspective is What Really Matters…
Occupation, social status, race, religion or economic condition has made little difference in the successes of these clients. One characteristic or difference stands out:
- The Successful deal with their money and savings first and investments only after they control the money that flows through their lives
- The Failures pay attention to the “rate of return” on their investments and treat cash money and savings like an annoying second cousin or the stuff you get from the ATM with your debit or credit card
Investors and Scarlet Miss the Point…
Scarlet O’Hara’s dream became a nightmare because she paid attention to the wrong aspect of life. The dreams of financial failures become nightmares because they are looking at the wrong aspect of financial success. Investing is a way to accelerate the wealth building process; it is not the process and is not even essential to wealth building.
What is Wealth?
Wealth building begins and ends with accumulating money. Once you have some money, you can consider investing a small portion of it to accelerate your personal wealth creation. But, if you never invested a penny, if all you did was save money in conservative accounts, you would end up with a solid financial foundation; you’d be free from debt, have a secure lifetime income, have enough money to deal with life’s surprises and be able to pay wisdom and wealth forward to those you care most about.
There Are No Secrets…
The strategies and tactics that allow the Successful to wear the mantle of peace of mind about money are not new or revolutionary.
- In fact, the economic principles and financial management practices that lead to true wealth have been around for millennia and have been employed by astute Americans since before the founding of our country.
- In fact, again, the application of these economic principles and financial management practices contributed greatly to the founding itself. Were it not for the money saved by the founders, you might still be pledging allegiance to the Queen of England or the President of France.
There’s a serious–but easy to read–discussion about the failed Scarlet O’Haralike financial thinking that has led America and Americans to the brink of bankruptcy in Money, Now, Money Later, Money for Life. You’ll also find financial strategies and tactics there that have been tested and proven in America by Americans for over two hundred years. Strategies and tactics that you can start using the day you learn them.
Jeffrey Reeves
Posted in Money, Movie Quotes, Personal Financial Management | Tags: 401(k) plans, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
How To Buy A Car And Make Money Doing It…
June 4, 2008 | Author dragonfly
“I’m king of the world!” Titanic, 1997
Americans have had a love affair with automobiles for over a century. We buy them with abandon; new, used, wrecked and restored. A car inflates our ego, provides useful transport and crystallizes our status. For many reasons it makes us feel like we are royalty; in charge of our world.
Unfortunately the opposite is true. Spending thousands of dollars on a product that is worth less than we paid for it as soon as we take possession deflates our bank accounts and our balance sheets at the same time.
There is a way, however, to profit from your car purchases. Here’s a thumbnail sketch of how it works.
My wife and I just bought our first car since 1993. We borrowed the $24,000 from two of our “banks” - we use participating whole life insurance policies for our banking – to buy the car and will pay ourselves back the same as if we had borrowed from Guido the Loan Shark or the local bank (both having about the same level of interest in our well being.)
If we had borrowed from the bank our payments would have been about $565 for 48 months and the total we repaid would have been just over $27,000. Once the car was paid for we would be free from debt and would own a virtually valueless vehicle.
Instead, we are going to repay our “banks” $600 each month for 48 months – a rate of return of about 9.25%. (Why not higher, since all of the money returns to us?). When those 48 months have passed we will have $28,800 in our “banks” and still have the virtually valueless vehicle. In other words, we will have captured, in our accounts, all of the money that otherwise would have gone to the bank as principal and interest.
Not only that, but our “banks” would have been earning interest on the money that we repaid so the actual internal rate of return would be even higher - approaching 13%. In addition, the earnings would be tax free and virtually guaranteed. Find that in the “markets!”
Granted, there’s a start up period where you have to accumulate money in your “banks”. That is not as hard as it may seem and you can start at any level you choose. Some have started with a few dollars a month and others with ten thousand dollars a month once they discovered how this process works to serve their interests and not those of banks and the other Behemoths.
Learn how The Money for Life Model lets YouBeTheBank and control the money that flows through your life. — www.TheMoneyForLifeBook.com
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“Soulutions” To Financial Problems Or Difficulties…
June 1, 2008 | Author jr
The EUREKONOMICS™ “Soulution“…
The Oxford dictionary defines the word solution this way: “the act or a means of solving a problem or difficulty.”
The EUREKONOMICS™ Model for dealing with financial issues modifies both the spelling and the meaning of this word:“Soulutions” adds, ”with awareness of the personal aspects of both the problem or difficulty and the act or means employed in solving the problem or difficulty.”
The Operating Manual for EUREKONOMICS™…
Money Now, Money Later, Money for Life…How to thrive in good times and bad deals with practical, workable, easy to understand solutions to money and financial problems. In addition, one of the main goals of this blog and of the book Money Now, Money Later, Money for Life…How to thrive in good times and bad is to guide you to a greater awareness of the non-material and personal issues relating to money, finances and your personal economy. One of the soulutions that can make you more aware is reflected in this quote:
“The cave you fear to enter holds the treasure you seek.” Joseph Campbell
Conventional wisdom – which is no wisdom at all – guides us on paths that are contrived by Behemoths – large corporations, unions and government. When you follow this path, you are heading toward a destination that makes Behemoths wealthy but weakens your personal economy; a path that makes bad decisions feel good.
It’s scary to follow a path other than the one that you, your peers, co-workers, family and friends recognize from TV, radio, print, employer sponsored programs and so on. It’s uncomfortable to embrace your fear of being different and following your own path. But, that is the cave you must enter because that is where you will discover your treasure.
Shams of Tabriz, mentor and companion of the Sufi mystic Rumi, expressed the same idea another way: “If you’re not building rooms where wisdom can be openly spoken, you’re building a prison.”
If you don’t allow yourself to explore alternatives to conventional wisdom you are simply creating your own financial prison and your architects are the Behemoths whose only goal is to transfer your money from your pockets into their accounts.
There is a better way.
You can cut a clearer path for your self than any Behemoth can contrive.
Money Now, Money Later, Money for Life…How to thrive in good times and bad does not define a path and ask you to follow.
Money Now, Money Later, Money for Life…How to thrive in good times and bad provides the insight, wisdom, tools, and guidance that lets you to create your own path; lets you control the money that flows through your life; lets YouBeTheBank.
The few dollars you spend to buy Money Now, Money Later, Money for Life…How to thrive in good times and bad is less than the cost of pizza and beer or a night at the movies. A night out at the pizza parlor or the multi-plex promises neither a solution nor a soulution to money problems or a malfunctioning personal economy.
This book promises both.
Jeffrey Reeves MA, EUREKONOMIST™
Posted in Money, Personal Financial Management, What Others Say, You BE the "Bank" | Tags: 401(k) plans, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Skinny Models And Skinny Money…
May 30, 2008 | Author Dr Agon Fly
“Mrs. Robinson, you’re trying to seduce me. Aren’t you?” The Graduate, 1967
Major consumer product retailers (one in particular), make-up and perfume makers, and every other advertiser to one extent or another, employs skinny models to sell their products. I was watching one of those ads on TV yesterday evening and it dawned on me that most advertising for financial services and products employ skinny money to seduce you into buying what they have to sell.
I’ve made the point before that whenever you buy something that’s called an investment – stocks, bonds, mutual funds, real estate, annuities, gold, Euros – the company that sells it to you keeps some of your money to cover their costs and pay their sales force. Nothing wrong with that unless you allow yourself to be seduced into thinking that what you buy can make you rich.
Wealth is the result of saved money. Investements are skinny money; they offer no guarantees, can disappear in a flash (Enron, MCI, 1929, 2001,etc.), are not under your control and, if investments are all you have when it’s money you need, your losses could easily lead to starvation.
America has been led – or misled – to believe that investing from income is wise and proper. American”s are encouraged by mindless pundits that call themselves financial gurus to invest lots of money into their 401(k)s. IRAs or equivalents. These unwise advisors don’t tell them that the money they are stashing is nothing more than a loan from the IRS that will be collected when they retire.
Several popular – not necessarily bright – TV and radio talking heads tell Americans to be sure to have an emergency fund of 3 to 6 months expenses. They don’t tell them that many – if not most – who experience one of life’s surprisingly unsurprising surprises like job loss, disability, medical emergencies, family crises and so on, need enough ready cash to support themselves for 3 to 5 years.
Skinny money like skinny models may be seductive to some, but for me and my clients it’s foolish and downright scary to face the future with debt, unsesured income, limited liquidity and no assured legacy. It’s a heck of a lot better to face the future with the confidence that comes with control of the money in your life than to look back with regret because you relied on information from TV pundits and the advertising of the Behemoths to build your personal economy.
Remember, like Mrs. Robinson, they are trying to seduce you. Avoid the seduction and the pain that it leads to and build a solid foundation and framework for your personal economy BEFORE embarking on an investment program. Discover how –> www.TheMoneyForLifeBook.com
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Posted in Legal, Ethical, Moral, Money, Personal Financial Management, The Four Pillars | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Family Money For Life…
May 25, 2008 | Author dragonfly
This week my wife and I have been visiting her out of town children and grandchildren. With her permission I’ve been blessed to have been adopted by these wonderful people and her other kids and grandkids who live just a block or two away from us in Denver.
I want to leave the grandchildren a legacy of wisdom and wealth. Since I am not sure I have any wisdom to pay forward, I plan at least to leave them with some money and an intelligent way to handle money – some may call that a form of wisdom.
I’ve set up a perpetual life insurance fund for each of them individually and all of them collectively. It isn’t simple but it’s easy. It works in a way that insures that the grandkids will have money for college, cars, and houses for themselves and for their children and their grandchildren and, if they maintain the trust that funds the legacy, for many generations to come.
This is just one of dozens – perhaps hundreds – of strategies that can only be structured with participating cash value life insurance. We also use life insurance to fund our vacations and our car purchases in a way that allows us to borrow from our life insurance cash value, repay ourselves and return all of the principal and interest to our policies that we would otherwise have paid to some banker.
We call this the Money for Life Model…
Learn more; buy the book –> www.TheMoneyForLifeBook.com
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In Memoriam To Debt, “Rate of Return” And The Tax Deductible Trap…
May 23, 2008 | Author dragonfly
If the price of gasoline doesn’t wake up America to the foolishness of its reliance on debt for lifestyle and “rate of return” and tax deferral for wealth creation, then we may all be speaking Arabic or Chinese within a few decades.
This blog and the book Money for Life…(thrive) in good times and bad are dedicated to helping Americans – and perhaps some in foreign lands too – escape the dungeon of debt where they are imprisoned and recapture the money that they are literally giving away to credit grantors, investment companies and the government.
Think about it. It’s as simple as 1,2,3…
- Debt will never make you rich.
- Bear-Stearns, one of the largest investment banks in the world, went broke chasing “rate of return”
- Every time you take a tax deduction from the government for a retirement contribution you are effectively taking out a loan that you’ll have to repay when you “retire.”
There is today, and has been for millennia, a better way to handle your money. You need to control the money that flows through your life, become your own banker and recover, in your own “bank,” the interest and principal that you currently pay to others, reduce or eliminate your dependence on the Pirates of Manhattan and the government’s hold on your future and declare yourself independent, just as the Founding Fathers did over 200 years ago.
Start today. Start here–> www.youBEthebank.com
___________________________
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The True Cost Of Gasoline…
May 20, 2008 | Author dragonfly
“E.T. phone home.” E.T. The Extraterrestrial, 1982
How many American’s are going to “phone home” instead of going home this holiday weekend because they don’t want or can’t afford to spend the money it would take to fill up their gas tank three or seven times? Even for my high mileage compact it costs nearly $40 for a fill up.
The hesitation or inability to buy all the gas we need and want is a symptom. It’s not the disease. The disease is much more complex and affects manifold aspects of the lives of the typical American family. Let’s take a circuitous route to understanding the problem.
A plumber reported that the cost to replace about 15 feet of corroded galvanized pipe with copper and install a new sill-cock would cost about $300.00. That would include all the materials and repairing some damaged drywall.
If the homeowner took the position that he or she could do the job him or her self because he or she had read an article or two about this kind of repair and could buy all of the materials at the local home improvement store for about $75.00, you would think that person presumptuous and perhaps even foolish.
There’s a TV commercial that shows a surgeon on the phone to a patient suggesting that the patient could do his own appendectomy. Some home improvement stores suggest you can do anything around the house by taking one hour classes.
Several investment brokers run ads suggesting that you can invest successfully by occasionally getting information from a web site. Dozens of businesses offer “no interest and no payments” for 6, 12, 18, 24 months or longer.
When it comes to money, the Behemoths will say anything to get yours and make it theirs. Now, what the heck does that have to do with the price of gasoline and the trip you can’t afford to make to grandma’s house over the holiday?
Simply this; people who know how to handle their money are taking the trip. They are just as unhappy as you are about the price of gasoline and the cost of the trip, but they are in control because they have developed or discovered a way to deal with money that allows them to have what they need and want without regret or recrimination. They look forward with confidence and never look back with regret.
They have a guide that leads them through the jungle of claims and enticements and out of the swamp of misinformation and misleading advertising that traps so many Americans. You can join the informed minority that is in control of the money that flows through their lives, escape the swamp and build a personal economy on a solid foundation with a strong framework.
A great place to start –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, Personal Financial Management | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | 2 Comments »
Learn More, Own More, Owe Less…
May 19, 2008 | Author Dr Agon Fly
“Carpe diem. Seize the day boys. Make your lives extraordinary.” Dead Poets Society, 1989
America! We have been bamboozled by BS from Behemoths (the name given to large corporations, unions and government.) As long as we adhere to their paradigm and wander like zombies through our financial lives, we are doomed to be, as Benjamin Franklin warned 200+ years ago, their servants.
Russ Wiles, a writer for the Arizona Republic, wrote this just a day or so ago:
May 18, 2008
Financial issues still baffling AmericansAre doctors and auto mechanics really easier to understand than financial professionals? One recent survey says so – the latest indication there’s a literacy gap out there when it comes to money issues.
Most Americans have a lot of financial burdens to carry, whether it’s simply paying the monthly bills or investing for retirement, drafting an estate plan or borrowing prudently. Yet many signs suggest millions of people aren’t up to the task.
The article goes on to discuss our lack of literacy, excess credit, failure to educate our youth and a variety of other observations. It’s time Americans take back their personal economies from the Behemoths and their minions. It’s time to “seize the day”; learn more about personal economies, own more of what we use every day instead of just using things that we finance; relying on debt for our well being instead of building wealth.
Carpe diem! –> www.TheMoneyForLifeBook.com
(Read the entire article here http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20080518/BIZ/805180347/1005)
Posted in Debt, Money, Movie Quotes, Personal Financial Management, What Others Say | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Tom And Jerry And Money…
May 15, 2008 | Author dragonfly
Posted in Money, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
American Money, American Oil, American Innovation…
May 9, 2008 | Author dragonfly
“Frankly, my dear, I don’t give a damn.” Gone With the Wind, 1939
America is committing suicide by Congressional Cowardice!
The Congress doesn’t “give a damn.” It has completely abrogated its sworn responsibility to provide vision, wisdom and leadership. Some in Congress have given their votes and their minds over to the insane claims of fringe groups who really hate America. Others have relinquished their power to the Behemoths; corporations, unions, lobbyists that disguise themselves as spokespersons for some group or cause, and government agencies whose only function is self preservation regardless of the cost to the Country and its People – that’s you and me and 300 million other Americans.
All in Congress have put political party goals above the needs of America.
The presidential candidates are members of Congress, too. Each of them has “caved” to one or more of the caveats of their constituents during the campaign. All of them have failed the “vision, wisdom and leadership” test when it comes to recognizing and dealing with the realities of the 21st century.
Obama naively clings to an exclusive far left agenda while promising to be a uniter. Clinton is strident as she proposes specific, liberal, tax-increase based solutions to every imaginable challenge masked in so much detail that even an advanced degree in economics wouldn’t help one understand – or believe; just like HillaryCare of 1993. McCain offers only partial insights into his thinking and programs as he tries to convert his image from that of an independent minded conservative to that of a ”sorta” party loyalist.
There are two intimately related issues that should drown out the cacophony of claims by the crazies and the wimps and overshadow every other concern:
- America is at war. Insane Islamic zealots believe that only they possess the truth, and that destroying the western world in the name of Allah is the path to their heaven. It’s war declared on America - not criminal activity.
- America’s – and the world’s – economy is based on oil. If America doesn’t tap into its own oil reserves – as every other country in the world is doing – America will soon become a slave to the OPEC nations like Saudi Arabia and Venezuela – the birthplaces of the Islamic and other crazies. At the same time, America needs to have the vision to commit significant resources to oil alternatives.
If our leaders deal with these two issues, every other concern will resolve itself.
Some will argue that the current economic malaise is driven by failures in both the oil and the financial industry. The financial industry, however, is becoming more and more dependent on oil rich countries to supply it with the fuel for its engine, and that means dependence on oil by proxy.
Your personal economy depends on America being a leading economic power. If America fails to maintain its status as the engine of liberty through its economic strength, you and I will become servants to some foriegn power.
We need to elect leaders who recognize and deal with these harsh realities instead of those in Congress today who pander to every Behemoth that promises a contribution to their campaigns to stay in office – translate that as “to stay in power.”
In the meantime, you need to find ways to save money that allows you to control the money in your life. At the micro level you can switch to energy efficient light bulbs, drive more slowly and less often, buy more fresh food and less prepared food; that will help you and the rest of us too.
At the macro level you need to gain control of your money, to apply principles and practices that have been tested and proven over centuries and millenia and that apply equally today. This blog attempts to shed light on them. For a fuller understanding –> www.TheMoneyForLifeBook.com
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Timely Re-post…The US Congress’s Money…
May 7, 2008 | Author dragonfly
While those in the US Congress – three running for president – are proposing a meaningless gasoline tax relief program, it’s important to remember that it won’t effect them at all and won’t really help the average American.
http://themoneyforlifeblog.com/?p=119#comment-29
Gain control of your money before the Behemoths do –> www.TheMoneyForLifeBook.com
_______________________________
Posted in Legal, Ethical, Moral, Money, Taxes | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Gold Ain’t Money Either…
May 7, 2008 | Author Dr Agon Fly
“Snap out of it!” Moonstruck, 1987
You can’t go shopping at WalMart and pay with gold. Gas stations don’t accept Krugerrands. The gold coins minted by the US government are for investors – not for circulation.
Wake up America!
You can’t buy wealth. If you buy gold in any form the person who sells it to you gets paid in cash not in gold – and it’s your cash. So does the stock broker, the real estate sales rep, the financial advisor or planner, the annuity sales rep and anyone else that sells investments of any kind. They work to sell you investments but they earn cash for doing so. HMMM!
Wealth is first and foremost the result of saving. You have to have cash to invest in anything. You have to save in order to have cash for investing. If you invest wisely your wealth will grow. If you invest all of your savings or invest out of income (think 401(k)) instead of from your saved money, you are taking a dangerous, imprudent and usually foolish risk. If your investments fail and you used all of your savings to invest, you have to start all over again.
There is a way to manage and measure your money that keeps you on a path to wealth – no matter what happens in the “market” – stock, gold, real estate, annuity, etc.
Saving Money Is In America’s DNA…
May 5, 2008 | Author Dr Agon Fly
“You talking to me?” Taxi Driver, 1976
Yes. Even if you haven’t a penny in the bank, I’m talking to you.
Pat was divorced early in life. He never fully recovered from the trauma and never remarried. Over the next 24 years, however, he became quite a successful salesman for an industrial supply company. He took what he considered to be good advice and maxed out his 401(k), contributed to an IRA when possible and bought into the companies stock purchase plan; he amassed quite a corral of assets. Pat chose not to create a “bank” of money aside from that.
Then reality struck.
Pat had remained close to his children over the years. In 1999 his oldest daughter suffered a stroke. His former wife and his other children had moved out of state. The care of his daughter fell on his shoulders. Since Pat was earning a significant income the financial pressure was bearable.
Then reality struck again.
Shortly after that in late 2000 the company he worked for was acquired by a major competitor and Pat was terminated. His company stock was automatically cashed in as a part of the buyout so Pat incurred a large tax liability and reduction in value as a result. He rolled his 401(k) into his IRA account on the advice of his broker. Also on the advice of his broker, he invested his “retirement” accounts in what was considered safe but still fairly aggressive mutual funds. (Hindsight tells you where this is headed, but it sounded like a good idea at the time.)
And, again!
By the summer of 2001, at the young age of 55, Pat had given up on finding work. His daughter’s care and his own monthly expenses had drained the money he received from the stock sale. Pat decided to start his own business. He no longer had a no-compete limitation and he still had his old customer relationships so he cashed in some of his IRA investments, paid penalties and taxes, bought some inventory and went to work.
And again on 9/11…
Pat’s infant business took an immediate hit as devastating to him as the hit to the Twin Towers was to the rest of us. Not only that, but the value of his investments fell over 62%. Pat was suddenly struggling to make ends meet, care for his daughter and salvage a business he had started on a shoestring.
Your Personal Economy
Pat’s story is not yet ended but it has served its purpose for this post. Pat’s American DNA motivated him to “save.” His advisors – and most of the pundits, publicists and prognosticators who rely on the Behemoths for their information and advice – led him down a path that led him and millions of other Americans into a dungeon of debt.
In Pat’s case the debt was mostly to his company and to the government. His stock had strings attached so he really didn’t entirely own it and the price he received was not based on value but on the whim and greed of his employer. His “savings” in tax qualified plans were really nothing more than loans from the government at an unspecified interest rate to be repaid later disguised as a current deduction and a future liability.
Every successful personal economy has four clearly defined characteristics and achievable goals:
- Freedom from debt to others – including debt to the government disguised as a future tax liability
- Income you don’t have to work for but you won’t outlive that is protected from inflationary pressures
- Ready cash to deal with the surprisingly unsurprising surprises that we all experience
- A legacy of wisdom and wealth to pay forward to those we care about
Does your personal economy measure up? It can –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, Personal Financial Management, Retirement, The Four Pillars | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Save, Invest, Gamble or Become Your Own Banker…
May 2, 2008 | Author Dr Agon Fly
“Is it safe?” Marathon Man, 1976
SAVE…
When you save money, you’re guaranteed – insofar as that’s possible – to have more money at the end of each year than you had at the beginning. Interest increases the value of your savings and inflation and taxes gnaw at the growth that interest provides. This condition makes choosing a tax advantaged savings product an important part of your decision.
Cash value life insurance and deferred annuities have provided the perfect reservoir for savings for almost 200 years in America. Cash value life insurance – especially dividend paying life policies from mutual companies – have proven more effective than annuities because these policies allow you to access the cash values without penalty or taxes whenever you need to; a benefit not available with annuities.
INVEST…
Investing involves a much greater risk. When you invest in stocks, real estate, precious metals, commodities, etc. you are buying an ownership position. The future value of your investment is contingent upon the performance of your equity in a market over which you have no control. When your investment is debt – bonds, loans, etc. – your investment is safer but still relies on the success or failure of the entity to which the loan is granted.
Investors have to believe that they can see “across the valley;” that the future is reliably predictable by the past; that the ups and downs of the market in which they are investing will repeat themselves in a way that allows the investor to profit. This belief is the initial motivation but is challenged and becomes untenable when the investor needs money and the investment is in the valley.
GAMBLE…
Both saving and investing involve a gamble. The saver is gambling that inflation and taxes will allow some growth. The investor is gambling that the invested money will eventually grow beyond what could be expected in a savings program and will not be in a trough when money is needed and the investment has to be sold.
BECOME YOUR OWN BANKER…
There is a better way. If saving and investing are managed properly, the risk can be diminished and even removed when savings are used to fund purchases of both the things you need and want and the investments you wish to make. The business of becoming your own bank involves radically changing your mind about money, debt, saving and investing.
Americans have been lured into the Debt Paradigm and trapped in a dungeon of debt. The Money for Life Model teaches you how to handle your money in a way that serves both your short and long term financial goals without forcing you into a beans and rice lifestyle.
You owe it to your self to level out the valleys, to learn more and to own more –> www.TheMoneyForLifeBook.com
_________________________
Posted in Money, Movie Quotes, Whole Life Insurance, You BE the "Bank" | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
SOLD! 4,000 Copies of “Money for Life”
April 30, 2008 | Author dragonfly
“They’re here!” Poltergeist, 1982
Writing a book is a daunting task, but publishing a book and getting it to market makes writing feel like a walk in the park on a warm, sunny spring day – like today in Colorado.
Money for Life
In April of 2008 I wrote…
2,000 copies of Money for Life…How to Thrive in Good Times and Bad will arrive at my front door within hours and will get carried to the processing stations we have built in our basement. Our first task will be to inform those who bought the e-book how they can get their promised paperback copy.
We’ll then be sitting on $60,000.00 of inventory, a reasonably well defined and practiced fulfillment process and only a glimmer of intelligence about how to sell those 2,000 books and realize the profit they hold. Not that we haven’t studied the “how to” of selling; we have. It’s just that the process is so convoluted and complex that implementing it becomes a frog-in-the-well exercise – move forward two hops and slide back one; and, the well is very deep.
We hope the thousands of visitors to this blog have found benefit from what’s written here almost daily and recognize that the content of the Money for Life Book addresses the same topics in greater depth and offers more guidance than is possible in a few hundred daily (almost) words.
Special Discount Offer
We encourage you to take advantage of a SPECIAL OFFER –>
The paperback version of Money for Life…How to Thrive in Good Times and Bad is now available on this site for $19.95 – 33% off the Amazon price of $29.99
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Risk Management Must Read…
April 29, 2008 | Author dragonfly
“Elementary, my dear Watson.” The Adventures of Sherlock Holmes, 1939
Nothing is more elementary than risk management when it comes to saving, investing and financial planning. If you, or your advisors, allow the focus to shift to the ever fickle “rate of return” you will soon find yourself out of money or in bankruptcy.
Gary Halbert is insightful. His perspective reflects the common sense that is often wanting in less mature pundits and advisors. I encourage you to read the excerpt from his recent newsletter. It is loaded with wisdom. Better still, take some time and link to the entire article and soak up some of the ideas and information that makes a successful saver and investor, and creates a successful personal economy.
The Stock Market’s Decade-Long Drought
by Gary D. Halbert
April 22, 2008
IN THIS ISSUE:
- The Stock Market’s “Lost Decade”
- The Importance Of Risk Management
- Lesser-Known Investment Risks
- How To Determine Your Own Risk Tolerance
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The Importance Of Risk Management
Stock market volatility during the recovery phase of a sideways market is often significant, and the last couple of years have been no exception. This volatility is like riding a roller coaster for many investors. New interim highs make them feel that a market rally has taken hold, only to then experience yet another downhill run. Some who can’t stand the fluctuations in value get out of the market and sit on the sidelines, often without any plan for how to get back into the market later on.
No matter what the cause, the market’s recent action underscores the inherent risk of investing in the stock market. It also shows the danger of the buy-and-hold strategy, especially one that recommends investing in unmanaged “index” mutual funds. Sure, the markets will likely rebound eventually, but that will be of little consolation to investors who need their money now for retirement, or who may have bailed out of the markets at or near the bottom.
In past E-Letters, I have illustrated the relationship between losses and the amount of return you have to earn just to get back to where you started. Whenever I reprint this “break-even” table, I receive quite a response from readers indicating how this information opened their eyes to the risks they were taking. Because evaluating risks and avoiding large losses is so important, I have reproduced that break-even table below:
Amount of Loss
IncurredReturn Required
To Break Even10%
11.1%
15%
17.7%
20%
25.0%
25%
33.3%
30%
42.9%
35%
53.9%
40%
66.7%
45%
81.8%
50%
100.0%
60%
150.0%
70%
233.3%
To demonstrate the point of this table, the S&P 500 Index plunged apprx. 45% from its high of 1527.46 during the bear market of 2000-2002. Buy-and-hold index fund investors who suffered that 45% decline had to earn a total cumulative return of over 81%, just to get back to where they were in March of 2000, and it took them over seven years to do so.
However, even though the S&P 500 Index hit a “new record” in May of 2007 (and eventually climbed as high as 1565.15 on October 9th), the subprime debacle and potential recession have taken buy-and-hold investors back under water again! The S&P 500 Index closed at 1390.33 last Friday, down 175 points from its 2007 record territory.
For Nasdaq investors, the situation is much worse. Those who rode the market all the way down, over 70%, will require a return of over 233% just to get back to even, and the Nasdaq Index is nowhere near that point now, some eight years later.
This further illustrates that it is critical to avoid incurring large losses in the first place. If you can keep losses to a minimum, then you spend less time having to make up for lost ground.
Read the entire article here –> http://www.investorsinsight.com/blogs/forecasts_trends/archive/2008/04/22/the-stock-market-s-decade-long-drought.aspx
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SPECIAL OFFER –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also recieve an autographed copy of the paperback when it is release. No special codes are needed. Thanks for making the purchase befor April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, Personal Financial Management, What Others Say | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
The Velocity of Money…
April 28, 2008 | Author dragonfly
“Wait a minute. Wait a minute. You ain’t heard nothin’ yet!” The Jazz Singer, 1927
In our family lives, money moves pretty quickly. First, the government takes a large chunk before we even receive our spendable pay. Next, health care costs and “retirement” deductions reduce our take home pay even further. That money moves at electronic speed.
When we do get money into our checking accounts or our pockets, it flies out almost immediately to pay the rent or the mortgage, utilities, cable, groceries, clothing, education, other necessities of living, and – most damaging – interest; on credit cards, car payments, store charge cards, payday loans, and on and on…
If you would like to get a handle on the velocity of your money, I encourage you to visit the Money for Life site below and order your FREE copy of Why Budgets Don’t Work. This brief white paper was written to benefit the regular subscribers to the Money for Life Newsletter and is the starting point for many who have gained control of the money that flows through their lives.
You will find the information and practices useful and reliable in every kind of economy – but especially in your personal economy.
Best wishes for success.
__________________________
SPECIAL OFFER –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Thanks for making the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, Personal Financial Management | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
A Money Limerick and A Money Lesson…
April 24, 2008 | Author dragonfly
Originally posted on February 17th, 2008
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Comedians know about funny,
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And beekeepers know about honey.
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And chances are good
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That both wish they could
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Know more than they know about money.
Everything you do in life is affected by money and money affects everything you do.
Like the comedian and the beekeeper, you are an expert at what you do. You spend most of your time and energy knowing what you know so you can pursue the practice or career that you have chosen and increase the money that flows through your life. You , however, are not necessarily an expert with money. Like the comedian and the beekeeper, you’d probably like to know more about how to benefit from the money that enters your life when you do what you do.
Here’s a little exercise that might help. Make a list of the items you have purchased for about $30 during the past month: a couple of bottles of wine for dinner, lunch at an average restaurant, a shirt or blouse on sale, dry cleaning, a movie with a friend or spouse, music, a nosebleed seat at a ball game, a subscription to a magazine or newspaper, and on and on. Now, of all the items and events you have spent $30 on in the last 30 days, how many of them made some Behemoth wealthier instead of making you wealthier?
Well, here’s one more item that you can spend about $30 on that lets you know more about money than you know now; that promises to make you wealthier; that reveals secrets that have been buried for decades by merchants of misinformation and financial snake oil sales reps; that lets YouBeTheBank…
follow this link –> www.TheMoneyForLifeBook.com
You’ll never be sorry that you know more or own more and Money for Life…in good times and bad will help you with both.
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Posted in Money, Personal Financial Management | Tags: 401(k) plans, 801(k) plans, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market. stocks, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, Money, money book, money books, money for life, money under management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life insurance company, new your life, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Putting Money Into Your Home…
April 20, 2008 | Author dragonfly
“Oh, Jerry, don’t let’s ask for the moon. We have the stars.” Now, Voyager 1942
This weekend my financial planner son-in-law and I are completing the renovation of a room addition that was made by former owners several decades ago. We are installing all new windows, doors, electric, lighting, plumbing, insulation, drywall, flooring and cabinets…whew! In other words, we are building a new room addition using only the basic framing from the old.
The cost of the project, including the cost of subcontractors, will be about 2% of the value of the house but will be creating about 8% more usable space, and that space will be fully updated 2008 space in a 1946 vintage house.
We Americans often overlook value in housing and opt for square footage or prestige. We sink lots of money into a residence that is more appearance than substance. We make improvements that satisfy personal wants and needs but don’t add true value. If you’re considering a home improvement, use a formula like the one above to determine the value the improvement will create.
A two dollar improvement that adds an eight dollar room is worth doing. An eight dollar improvement that adds a two dollar space is not.
Don’t ask for the moon when you already have the stars.
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SPECIAL OFFER –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes | Tags: agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Borrowing The Government’s Money…
April 19, 2008 | Author dragonfly
“Greed, for lack of a better word, is good.” Wall Street, 1987
Wes thought himself a pretty well informed financial advisor and planner. For years he’s told his clients to max out their 401(k) plans and put as much as possible into IRA’s and other tax sheltered programs. His premise is that taxes saved today are better than taxes paid later; that tax rates in retirement will be less than tax rates during one’s working career; that using the government’s money is always better than using one’s own money.
He followed his own advice in this regard and was now about to retire. To test the theory behind his 40+ year practice, Wes looked back over the strategies he used during his working life. He was shocked when he realized that the taxes he saved were nothing more than loans that the government was granting him and millions of other Americans. He finally sees that the taxes - also known as ”interest” – he would pay during retirement greatly exceeded the benefit he gained from the deductions – also known as “loans” – the government granted him earlier in life.
Wes had charts and graphs and hypothetical illustrations that “proved” his theories – theories promoted by the vast majority of financial advisors and planners. But, now Wes is faced with the reality that his successes are going to cost him much more in post retirement taxes than the taxes he saved.
But wait! The issue isn’t really about taxes. Isn’t the real issue net income after taxes?
Yes and no. Wes saw that his sophisticated planning and disciplined investing created a significant pool of money over the years and his retirement income would be more than adequate to his needs. He also saw, however, that had he followed a less sophisticated and less government dependent approach he could have had an equivalent or even better retirement income and pay few if any taxes, and he would be able to pay forward his money-wisdom and a much greater portion of his wealth to those he cared about.
“Greed, for lack of a better word, is blind.” Dr Agon Fly, 2008
Using other people’s money – even if it’s the government’s – is never ever a wise financial move. Learning to control the money that flows through your life in a way that let’s You Be The Bank is safer, steadier and more secure.
_________________________________
SPECIAL OFFER –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also recieve an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase befor April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, Personal Financial Management, Retirement, Taxes | Tags: Add new tag, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Tags: 801(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Luck And Money…
April 16, 2008 | Author dragonfly
“Today, I consider myself the luckiest man on the face of the earth.” The Pride of the Yankees, 1942
The final proof of Money for Life,,,in good times and bad was sent to the printer today. Now the work of getting this amazing document that recalls the teachings of the world’s wisest financial minds from millennia past into the hands, minds and hearts of Americans begins in earnest
Thanks to all who read this blog for your support and encouragement.
I am exhausted today from the emotional and intellectual effort of proofing so I am ending this blog post early.
______________________________
Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Debt, Legal, Ethical, Moral, Money, Personal Financial Management, Retirement, Taxes, The Four Pillars, Whole Life Insurance, You BE the "Bank" | Tags: 801(k) plans, Add new tag, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Tags: 401(k) plans, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Easy Money – Or Not…
April 15, 2008 | Author dragonfly
“If you build it, he will come.” Field of Dreams, 1989
Bernice and Morrie were born poor. They want to escape the demands of a personal economy based on systematically acquiring wealth through saving, debt elimination and building equity in investments that are fully paid for. They are always looking for easy ways to get more money and more of the stuff that money can buy.
Bernice and Morrie are the perfect candidates for every scam that comes down the road. The scammers – even the ones with high visibility and having great reputations like Bear-Stearn – know that any product or investment that promises easy money attracts people who are looking for easy money.
Whether it’s a dishonest sales rep selling a product, a shady advisor selling an investment, one of the financial pundits on television or radio, an infomercial promising easy wealth in real estate investing, a book or seminar guaranteeing profit without risk or even the US Government promising a comfortable retirement based on current tax deductions (think about that for a minute) - the con artists know that if they build it, some will come.
Bernice and Morrie are trapped in a dysfunctional financial model that incessantly chants its mantra: “You can have everything you need and anything you want as long as you have enough credit!” You can have the sixty inch flat panel TV from the big box store, the new SUV, the dream vacation, the lavish “it-only-happens-once-in-a-lifetime” wedding, the upscale home in the hottest new neighborhood, a perfect retirement based on current tax deductions – a disguised form of credit.
To this way of thinking “I can afford it” really means you have enough income to make the payments – including huge amounts of interest and future taxes. It whispers that you only get to use the things you “buy”; that you really don’t own them. But, it shouts that just “having” them proves your wealth and worth. This model is called the Debt Paradigm.
The corollary of the debt paradigm mantra that glorifies credit is the one that says it’s easy to become wealthy; just follow the advice of the TV pundits, the financial media and the advertising of the Behemoths and you too can be a Donald or an Oprah.
BUNK!
This model is designed to make others wealthy at your expense. It makes bad decisions feel good.
Bernice and Morrie discovered the fallacy of this approach in 2001 and 2002 when the lost most of their wealth to the completely unpredictable stock market and then lost most of their home equity in 2006 by following the advice to mortgage their home to the max and “invest” – aka gamble – their equity.
Fortunately Bernice and Morrie are still relatively young; in their mid forties. They have restructured their personal economy;
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they bought a smaller home
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they are using an equity acceleration program to pay off the mortgage in 10 years or less
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they are contributing to cash value life insurance policies on themselves to build their personal “banks”
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they are committed to use only those banks to borrow for future consumer purchases so they can recapture all of the principal and interest that they would otherwise pay to credit grantors
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they are adding money to their children’s “banks” and teaching them how to borrow and repay that money when they need it for education, auto-purchases and even their homes
Bernice and Morrie have abandoned the Debt Paradigm and adopted the Money for Life Model.
_____________________________________________
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, Personal Financial Management | Tags: 401(k) plans, 801(k) plans, Add new tag, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Financial Plan – Or Not…
April 14, 2008 | Author dragonfly
Albert Einstein said, “The significant problems we have cannot be solved at the same level of thinking with which we created them.”
The 50 page leather bound financial plan that you receive from the well known company with the large advertising budget is at best a snapshot of a fantasy; it represents the “level of thinking” that has America in debt up to its eyeballs with a negative savings rate for the past three years. It is out of date when you receive it and out of touch with the reality of your life’s daily challenges.
The typical financial plan wants for wisdom.
Think about it. Do you rush to the bookshelf to pull out your neatly bound financial plan when your family faces a crisis and you need money?
Ask yourself how you’d feel if, instead of unfounded fantasies in a fancy leather binder…
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You were free from debt-to-others; no mortgage, no car payments, no credit card bills or store charge card balances, no home improvement balances at the home improvement center…no debt of any kind
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You had an income you didn’t have to work for, you couldn’t outlive, was protected from inflationary pressures, and wasn’t decimated by interest payments and taxes every month
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You had ready money to take care of yourself and your family when some planned or unplanned life event required it – job loss, college for the kids, illness or disability, a long awaited second honeymoon, long term nursing home expense
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You had a secure tax free legacy of your wisdom and your wealth that you could pay forward on your terms to those you care about.
These are the Four Pillars that are the framework of all stable financial structures because they rest on a foundation of money that you – and you alone – control.
_______________________________________
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, The Four Pillars, What Others Say | Tags: 401(k) plans, 801(k) plans, Add new tag, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Clarity About Money – Revisited, Again…
April 12, 2008 | Author dragonfly
“Love means never having to say you’re sorry.” Love Story, 1970
The second question that came up about Flo, Many Jane and Vern was, “What happens to the relationship with the kids if Mom uses a Money for Life Guide instead of Vern, who is in a competitive position?”
Vern worked for a Behemoth – a large publicly held corporation or government agency. He was bound to a set of practices designed by his employer. The Behemoths and their minions generally have three goals built into whatever they do.
- Get as much of the customer’s money as possible into the Behemoth’s coffers
- Sell investment and insurance products that produce the highest income for the Behemoth
- Restrict the activity of its brokers to avoid law suits by disgruntled customers
The Money for Life Guide might have been able to explain the principles and practices that s/he used to create the foundation and framework for Flo to Mary Jane and Vern. It’s more likely that the peace of mind and security that accrued to Flo by following the Money for Life Guide’s advice would have been evident to the kids and caused them to learn more.
In any event, it is seldom wise and never the responsibility of parents to conduct business with children – especially when the future security of the parent is at stake, as it was with Flo. If Mary Jane and Vern were honestly concerned about Flo and her future they would recognize this themselves and accept Flo’s decision.
“Love means never having to say you’re sorry.”
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SPECIAL OFFER! -> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. If you buy the e-book version before May 1st, you’ll also receive an autographed copy of the paperback when it is released. No special codes are needed. Make the purchase before April 30th. Shipping and handling charges will still apply. -> http://www.themoneyforlifebook.com/
Posted in Legal, Ethical, Moral, Money, Movie Quotes | Tags: 401(k) plans, 801(k) plans, Add new tag, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Clarity About Money – Revisited…
April 11, 2008 | Author dragonfly
“You know how to whistle, don’t you, Steve? You just put your lips together and blow.” To Have and Have Not, 1944
Yesterday I talked about Jerry’s widow Flo. I described how her daughter Mary Jane and her son in law Vern failed her and left her in a state of near poverty. The blog got a couple of questions that motivate a follow-up.
The first question was, ”What would a Money for Life Guide have done for Flo?” Knowing how to deal with money and knowing how to whistle do not come naturally and Flo wouldn’t have a great deal of time to learn.
Jerry died at age 63. He left Flo, age 62, with $250,000.00 in life insurance, almost $200,000.00 in IRA money, a $190,000.00 home that was paid for and $90,000.00 in savings and bank CDs.
A Money for Life Guide would have diversified Flo’s investments. S/he would have placed the life insurance proceeds and IRA money into a variety of secure, guaranteed income annuities. These would deliver initial cash flow of about $2,250.00 per month without using any principal. Flo’s income could increase if the underlying investments performed well, but would never decrease.
Flo also qualified for $1,800.00 per month in Social Security benefits. This benefit also has an inflation hedge built in. In other words, Flo would be debt free – remember that her home was paid for – and have an income of over $4,000.00 per month that she didn’t have to work for but that she wouldn’t outlive.
Flo’s Money for Life Guide would also move much of the $90,000.00 that was in the bank into a cash value life insurance policy over a period of four or five years. This creates a death benefit legacy for her daughter and for her possible grandchildren.
The cash values in her life insurance policies are still accessible by Flo if she needed them for any reason. In addition, the principal amount in her annuities, along with the equity in her home serve as Flo’s hedge against future medical and long term care expenses.
To summarize: Flo has set the four pillars of a successful personal economy. She is
- debt free,
- has an income she doesn’t have to work for and she won’t outlive,
- have money to deal with life’s surprises and
- leaves a legacy of wisdom and wealth for those she cares about
Finally, Flo continues to work part time at her passion but does not earn enough to reduce her social security. This money is being deposited into another cash value life insurance policy – another “bank” – that Flo can access if and when she ever needs it and add to her legacy if she doesn’t.
_____________________________
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. If you buy the e-book version before May 1st, you’ll also receive an autographed copy of the paperback when it is released. No special codes are needed. Make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
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Clarity About Money…
April 11, 2008 | Author dragonfly
“We rob banks.” Bonnie and Clyde, 1967
Florence was a teen during WWII and one of a dozen children. She and her husband, Jerry, had only one child and lived a very comfortable life in one of the nicer neighborhoods of a medium sized mid-western town.
Flo, as she was known to her friends and family, was widowed a few years ago. Jerry had always managed their money, so Flo was not really ready when it came to taking charge of the families finances. In desperation but with confidence she turned to her daughter Mary Jane, an accountant, and her husband Vern, a broker for one of the Behemoths.
As it turns out, Mary Jane and Vern could have been named Bonnie and Clyde. What Vern didn’t lose of Flo’s money in the market, Mary Jane spent.
Today Flo is living on Social Security, income from a reverse mortgage, and a small pension; her credit card balances are also creeping upward. The six figure life insurance policy proceeds and substantial savings that Jerry left her are gone. Her daughter and not-too-bright-or-honest son in law Vern are promoting a program that has families taking all of the equity out of their homes and putting it into financial products that promise amazing returns but guarantee nothing.
Bonnie and Clyde, as reprehensible as they were, were at least honest about what they did; “We rob banks.” They didn’t want the peoples money. They wanted the banks’ money.
Money for Life…in good times and bad is a book that teaches you how to handle your money in a way that lets YouBeTheBank, and also teaches you how to keep your money safe from modern day Bonnies and Clydes.
If Flo had been advised by a Money for Life Guide, she would still have all of her money, no debt, a significant income she wouldn’t outlive, and a legacy to leave to her grandchildren – and perhaps to Mary Jane and Vern if they chose to follow and teach Money for Life instead of using every scheme that came along to put other people’s money into their pockets.
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also recieve an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase befor April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
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The Investments You Need…
April 10, 2008 | Author Dr Agon Fly
“I’ll get you my pretty, and your little dog too.” The Wizard of Oz, 1939
A commercial that is currently running on TV explains how easy it is for you to move your money from wherever it is now into “the investments you need” and the coffers of the company running the ad. It’s their way of saying “I’ll get you my pretty…”
The problem with this ad and so many others like it is that most Americans don’t need investments. Most Americans NEED:
- ~ to get out of debt
- ~ to save money so they can turn it into income they don’t have to work for and that they can’t outlive
- ~ to insure that they can pay the bills when the unexpected happens – and it always does
- ~ to teach those they care about how to stay out of debt, how to avoid the BS of the Behemoths about “needing” investments, and how to be their own bankers
I once asked a group of small business owners what they would call a person who accomplished these four goals. I got several answers but the one that garnered the most attention – and laughs - was made by a woman that owned a drapery company: “I’d call that person” she said, “a figment of your imagination.”
She was and is wrong. Many Americans have discovered that being one’s own banker is a safe and sure way to achieve these goals – a way that is possible for everyone who chooses it. You can do this and Money for Life…in good times and bad gives you the road-map, the tools and the guidance to do it.
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, The Four Pillars, What Others Say | Tags: 401(k) plans, 801(k) plans, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
More Money For Them, Less Money for You…
April 9, 2008 | Author Dr Agon Fly
“I’m mad as hell, and I’m not going to take this anymore!” Network, 1976
The economy is in a slump. The housing market is in a mess. The money markets are in confusion. The typical American family has been led into a dungeon of debt.
Not so with the members of the US Congress. They are getting richer and now they want to raise your taxes. They say it’s a tax increase for the richest Americans.
The truth is, increasing the current tax burden on Americans will not affect the richest in a significant way. If you are earning a million or two or more a year – and there are many earning more than that - your lifestyle will not be dramatically affected by a tax increase. Yeah, you’d be mad as hell but you wouldn’t end up at the soup kitchen.
But, if you are a typical American family, you could be driven to the poor house by the irresponsible tax and spend US Congress. Here’s what you can expect if the unconcerned and politically motivated Washington elite get their way:
“Why this large tax increase? The tax code changes enacted in 2001 and 2003 are scheduled to expire at the end of 2010. If they do, statutory marginal tax rates will rise across the board; ranging from a 13% increase for the highest income households to a 50% increase in tax rates faced by lower-income households. The marriage penalty will be reimposed and the child credit cut by $500 per child. The long-term capital gains tax rate will rise by one-third (to 20% from 15%) and the top tax rate on dividends will nearly triple (to 39.6% from 15%). The estate tax will roar back from extinction at the same time, with a top rate of 55% and an exempt amount of only $600,000. Finally, the Alternative Minimum Tax will reach far deeper into the middle class, ensnaring 25 million tax filers in its web.” The Coming Tax Bomb, The Wall Street Journal, 4/8/2008 (emphasis added by the blog)
We do not have much to say about the workings of the US Government other than our vote. As powerful as that is, when you have an entrenched aristocracy like the one in DC, even the right to vote does not allow for dramatic changes.
It is incumbent upon each American to develop individual financial programs and practices to protect him or her self from the wild and unpredictable misadventures of the Behemoths – the Federal Government being one of them. There is a way.
You can handle your money and your personal economy so that you can be your own banker and exercise much greater control of the money that flows through your life. This way is clearly defined in Money for Life…in good times and bad.
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also recieve an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase befor April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
Posted in Money, Movie Quotes, Personal Financial Management, Taxes | Tags: 401(k) plans, 801(k) plans, agon fly, annuities, annuity, bank, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, book on money, books on money, books on personal finance, circle of wealth, debt, debt elimination, debt management, debt reduction, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial advisor, financial planner, financial planning, health insurance, housing market, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, mass mutual, mass mutual insurance, massachusetts mutual life insurance, millionaire, Money, money book, money books, money for life, money under management, mortgage, mortgage management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, new york life, new york life insurance company, northwestern mutual life, passive income, personal financial books, pirates of manhattan, r nelson nash, Retirement, retirement income, retirement planning, saving, stock dividends, stock market, stocks, Taxes, term life insurance, The Four Pillars, the guardian life insurance company, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, why buy whole life insurance, why whole life insurance | No Comments »
Investments Are Not Money…
April 8, 2008 | Author Dr Agon Fly
“You’re gonna need a bigger boat.” Jaws, 1975
I read and/or review dozens of articles dealing with economics, saving, investing, and other money related topics every day. The article below illustrates that many financial writers are blind to the fact that the Behemoths they rely on for information create complexity where simplicity is warranted in order to sell more of their investment products.
I could write a dozen blogs just from the brief excerpt below, but I want to focus on just one clause; “…determining types of investments to make and knowing how much they will need to retire…” First, make note that the author addresses two different topics in just a few words; “investments” and “how much they will need to retire” – that could be savings, income, or just plain money.
You can’t spend investments. They will not pay your post-retirement medical bills (estimated at over $200,000), nor your probable long term care expenses (estimate to be over $350,000). Investments are based on a risk-reward algorithm not on your need for money to pay your bills. The Behemoths sell investments for money; investments are not money.
Investments may or may not deliver dividend income to pay monthly expenses. Investments in companies like Enron, Global Crossing, Qwest, MCI and other “highly recommended” stocks produced poverty instead of wealth. Mutual funds rise and fall with the tides of the markets and, if you need money at low tide, you’re just out of luck.
Investment “returns” are a function of assumed appreciation in value and dividends paid. Returns may or may not occur and may not translate into money or income when you retire. Retirement planning is a shibboleth perpetuated by the Behemoths so they can sell you more investments.
What you really need is a system for managing the money that flows through your life; a system that works all the time instead of the robotic thinking that goes into “retirement planning” and assumes that the process is complete when you reach the magic moment of retirement.
The retirement planning model doesn’t work. You need “a bigger boat.” Money for Life as a better alternative to the myth that there is such a thing as retirement planning.
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also recieve an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase befor April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
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“Affluent and Non-Affluent Find Similar Roadblocks in Retirement Planning
April 7, 2008
A quarter of Americans have not yet started planning for retirement, according to a new survey released by Bank of America.The study of 1,000 interviews surveyed 750 nationally representative Americans and 250 affluent Americans (with $100,000 to $3 million in investable assets). Both groups identified two key areas of confusion about retirement planning: determining types of investments to make and knowing how much they will need to retire. However, non-affluent Americans also cited when to retire and how to start planning as difficulties.”
Read the rest here –> http://www.financial-planning.com/asset/article/563421/affluent-and-non-affluent-find-similar-roadblocks.html?pg
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Money Smarts and Mortgages…
April 7, 2008 | Author Dr Agon Fly
“You’ve got to ask your self one question: ’Do I feel lucky?’ Well, do ya punk?” Dirty Harry, 1971
Jim and Janet have no children and they still struggle at age 40-something to save and invest enough to secure their financial future. They were presented with the opportunity to buy their first home three years ago by one of Jim’s friends who was in the mortgage business.
They were convinced that it was a deal that could not lose;
- no money down
- low monthly payments for two years
- extra cash at closing to pay off some credit card debt and, most of all,
- the assurance by the mortgage seller that the worst that could happen if the payments got too burdensome would be that the house would have appreciated in value and could be sold for a profit.
Jim and Janet were feeling lucky. They took the deal. Today the house is worth less than they paid for it, the payments are unaffordable, the credit cards are maxed out again and selling the house in a neighborhood where over 40% of the homes are already in foreclosure is nearly impossible.
Jim and Janet have an alternative that most don’t have. They have no children. Because of that Jim and Janet are both seeking part time work to supplement their income and to avoid foreclosure and probable bankruptcy. Not a pleasant situation.
The Behemoths and their minions have convinced millions of Americans that owning a home at any cost is worthwhile.
BUNK!
Had Jim and Janet adopted the principles and practices of Money for Life, they would not have prematurely bought the house. They would have started a “bank,” paid off their debt and saved money for a down payment. Had they done that, they could today buy a home in a solid neighborhood for a good price, with a low interest conventional mortgage, for payments they could afford now and into the future. Jim and Janet are not alone, however. The excerpt from US News and World Report below demonstrates this.
If you would like to avoid situations that can create financial difficulty for you and your family, I encourage you to take a look at www.TheMoneyForLifeBook.com and take advantage of the FREE white paper. Or better still the SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008.
Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
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“Buyers are well-informed and rational. Investment vehicles might be remarkably innovative, but consumers seem to be as gullible as ever. It’s obvious now that some home buyers over the past few years took out loans far beyond what they could afford, with foreclosure probably inevitable even if house prices had continued to rise. But even people who consider themselves financially literate aren’t so shrewd. A 2007 study by the Federal Trade Commission, for instance, found that:
– 20 percent of borrowers looking at mortgage disclosure forms couldn’t identify the interest rate amount
– 24 percent couldn’t tell which loan was less expensive, when looking at two different applications
– 30 percent couldn’t tell if the loan included an expanded “balloon payment” at some point
– 44 percent couldn’t tell if there was a prepayment penalty for refinancing within two years.”
Excerpted from U.S.News & World Report
4 Sub-prime Myths That Could Derail Reform
Friday April 4, 1:56 pm ET
By Rick Newman
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Make Money On E-Bay – Or Not…
April 6, 2008 | Author Dr Agon Fly
“The stuff that dreams are made of.” The Maltese Falcon, 1941
Jonathan and Stacey have an unconventional family. Stacey is a highly compensated executive and is rising rapidly in her profession. Jonathan is an innovative and creative artist. Jonathan stays at home with the couples two children, works on his art when he can and dabbles on eBay as a way of making a few extra dollars to feed his passion.
His eBay adventure didn’t start out as an avocation, however. Like many other easy money schemes such as multi-level-marketing programs, foriegn exchange trading, precious metals deals, or day trading on the stock exchanges, it began as a fantasy about a fortune. It wasn’t long, though, before Jonathan and Stacey both recognized that success was unlikely. When Stacey became pregnant with their second child – well, that sealed the deal on the role of eBay in their financial future.
Reality and common sense tell us that there is no such thing as “easy money.” There are ways of making money – like those mentioned above – that are particularly suited to certain individuals; that are fulfilling, fun and rewarding if you and that way of making money are compatible. If your personality, skills and psyche are not in synch with a particular profession or business opportunity, failure is assured.
You might make a lot of money, but it won’t be easy, you’ll not be happy, and eventually you’ll find a way out of that situation – drugs, infidelity, alcohol, eBay, fishing, golf or some other distraction. The same holds true for financial practices. We all have two professions; one is the career of our choosing; the second is being our own banker and managing the money that flows through our lives.
Many individuals and families ignore their second profession or see it as a nuisance. That’s because their personality, skills and psyche are out of synch with the way they deal with their money. Americans have been led to believe that their personal economies are best served by “plans” devised by Behemoths – large, publicly owned financial institutions. Those “plans” are the counterparts of the quick and easy money schemes.
It is no more valid to expect to succeed using the standardized robotic thinking that goes into such plans, than it would be to expect every American to succeed on eBay.
There is a better way for you to take control of the money that flows through your life, a much better way; one that is adaptable to every American and to every situation; one that is based on principles and practices that have been known to the money-wise for millennia and practiced by financially successful Americans from the days of the Founding Fathers until today.
You can learn about this amazingly simple and effective approach by following this blog for a year or two or you can spend $29.95 and buy a book that will tell you most of what you need to know to debunk the bull of the Behemoths and escape the Dungeon of Debt they have built for you.
The Book? Money for Life…in good times and bad – How to Thrive in the 21st Century
SPECIAL OFFER! –> The paperback version of Money for Life…in good times and bad – How to Thrive in the 21st Century will be released on May 1st, 2008. Everyone who buys the e-book version before May 1st will also receive an autographed copy of the paperback when it is release. No special codes are needed. Don’t be an April fool; make the purchase before April 30th. Shipping and handling charges will still apply. –> www.TheMoneyForLifeBook.com
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