Featured Books
  • Money for Life Book
  • The Way to Wealth Book
  • The EUREKONOMICS™ Dazzling Dozen Book
  • Five Great Gifts of Whole Life Insurance
Venture street
VentureStreet Business Network

You BE the “Bank”

EUREKONOMICS! Home Equity & Cash Value Life Insurance…

January 10, 2010 | Author

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: , , , , , , , , , , , , , , , , , , , , | 2 Comments »

EUREKONOMICS™, The FDIC, & The Money For Life Model…

November 25, 2009 | Author

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.”

Posted in Money, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , | 1 Comment »

Buy Now, Pay Later…The Debt Paradigm Is Alive and Well…

December 26, 2008 | Author

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].

  • 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.
  • 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.
  • 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:

  • 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%).
  • 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

 

Posted in Debt, Money, You BE the "Bank" | Tags: , , , , , , , , , | No Comments »

The Lost Opportunity Cost Of Paying Cash…

September 1, 2008 | Author

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

_________________________________

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.”

  • If you borrow the money to buy something, you repay principal and pay interest to another.
  • If you pay cash to buy something, you give up both the principal and the earnings it would have brought you.
  • 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.

  1. 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.)
  2. 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.
  3. 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

Posted in Money, You BE the "Bank" | Tags: , , , , , , , , , , , , , | 2 Comments »

Home Equity Isn’t Money But A Lot Of Families Think It Is…

July 15, 2008 | Author

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

________________________

Posted in Money, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Real Estate and Whole Life Insurance: A Financial Marriage Made In America

July 3, 2008 | Author

“Louis, I think this is the beginning of a beautiful friendship.” CASABLANCA, 1942

This is going to be a brief but replete post.

Investment Real Estate

This post outlines a strategy that protects you against unforseen loss and guarantees a profit to your estate if you die owning investment real estate.

Every time you buy an investment property you have to establish a fund to assure that the taxes and insurance get paid, the maintenance gets done and that contingencies don’t derail the investment’s potential.

Whole Life Insurance

These expenses get taken care of If you put that money into a savings vehicle and draw it out as needed. If, however, you use a whole life insurance policy as your repository, there are other advantages that accrue. Here are just few:

  1. You can borrow the money from your policy to pay for these expenses and the policy will continue to earn interst and be credited with dividends as if you had not borrowed a penny.
  2. A single policy can support multiple properties’ money needs at once.
  3. With proper ownership and borrowing arrangements the money that flows through the policy will be entirely tax free.
  4. You can repay the money you borrow and perpetuate the usefullness of the policy for decades.
  5. At death your named benficiary will receive the face amount of the policy – less any outstanding loans – as a tax free death benefit.

There are, of course, many other benefits that a real estate investor can derive from the proper use of whole life insurance (not universal life insurance at this time) in support of an investment program. Consult a properly informed financial guide before launching such a program.

Posted in Movie Quotes, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Teaching Children About Money…

June 17, 2008 | Author

“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: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Fraudulent Financial Products And Advertising…

June 11, 2008 | Author

Honest Abe Would Be  Appalled…

“You can fool some of the people all of the time,
and all of the people some of the time,
but you cannot fool all of the people all of the time.”
- Abraham Lincoln

 

President Lincoln didn’t live in the information, advertising and propaganda age we inhabit. Everything from politicians to religious beliefs, hamburgers to health care, infant products to investments are presented to the public every day in one form or another and all are distorted to support the presenters’ aims.

 

If Abraham Lincoln spoke his famous line today – especially if he worked in the financial markets – it might go like this:

 

“Advertising and propaganda can fool many of the people all of the time,

and all of the people most of the time,

but it still can’t fool all of the people all of the time;

but don’t worry about it, the fines will be much less than the profits.”

 

This is especially true of financial products. Americans are bombarded daily with information, advertising and propaganda about new financial products and services. The Behemoths and their minions cleverly disguise sales pitches as planning strategies. The financial press follows the lead of the Wall Street Wonks and supports every ENRON type shibboleth as if it came directly from the Lord.

 

A Case Study from 2007…

 

Here’s a case on point. Tom bought a hot new indexed universal life insurance contract. He was told that if he paid $20,000 a year into the contract for five years – $100,000 total – and then let the money grow for another five years he could expect to draw $18,000 per year from the policy for as long as he lived and the beneficiaries of his policy would still receive the full death benefit when he died.

 

When this product was presented to Tom by a well known insurance and financial “advisor,” Tom bought it on faith. There was also a printed illustration from the insurance company that made the numbers look legitimate. Two years and $40,000 later Tom realized that the “advisor” exaggerated the earnings and possible income and at the same time gave little attention to the probability that the actual results would most likely fall way short those exaggerated claims.

 

Caveat Emptor?

 

This is not a case of “caveat emptor.” Sophisticated information, advertising and propaganda presented by a “professional” is readily believable and not so readily debunked by an untrained buyer. Tom was hoodwinked by a dishonest and unethical sales rep who cares more about the sale than the client.  (As a note, that salesman was recently indicted.)

 

“Trusted advisor” is a term that is claimed with about the same weight as “nice tie.” Americans need more than the claims of a well dressed salesman and a compliant illustration from a mutual fund or insurance company. If you want to dodge the “dodgers” then you need a way to measure and manage your money that lets YouBeTheBank and lets you control the money that flows through your life.

 

Here’s my first recommendation ever on this blog; find an INDEPENDENT advisor that is not bound to one of the Behemoths and who understands that keeping YOU in control of your money is the most important role of an advisor.

 

Jeffrey Reeves

Posted in Legal, Ethical, Moral, What Others Say, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

A Legacy Trust Of Money, Wisdom, and Wealth…

June 9, 2008 | Author

“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

Posted in Money, Personal Financial Management, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

How To Buy A Car And Make Money Doing It…

June 4, 2008 | Author

“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

__________________________

 

Posted in Money, Movie Quotes, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

“Soulutions” To Financial Problems Or Difficulties…

June 1, 2008 | Author

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: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

In Memoriam To Debt, “Rate of Return” And The Tax Deductible Trap…

May 23, 2008 | Author

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…

  1. Debt will never make you rich.
  2. Bear-Stearns, one of the largest investment banks in the world, went broke chasing “rate of return”
  3. 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

___________________________

Posted in Debt, Money, Personal Financial Management, Retirement, Taxes, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Tom And Jerry And Money…

May 15, 2008 | Author
You can guess the difference in the net worth of Tom and Jerry; plus $750,000 to Jerry's bottom line. Following the principles and practices that make you rich instead of making others rich is quite simple and quite painless. You don't have to change your lifestyle. You do have to change your mind about money and how to employ it to your own best interest. www.TheMoneyForLifeBook.com can show you how. Read the rest of this entry »
Posted in Money, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

American Money, American Oil, American Innovation…

May 9, 2008 | Author

“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:

  1. 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.
  2. 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

_________________________

Posted in Debt, Legal, Ethical, Moral, Money, Personal Financial Management, Retirement, Taxes, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Save, Invest, Gamble or Become Your Own Banker…

May 2, 2008 | Author

“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: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

SOLD! 4,000 Copies of “Money for Life”

April 30, 2008 | Author

“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

 

Posted in Money, Movie Quotes, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , | No Comments »

Luck And Money…

April 16, 2008 | Author

“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: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

The Pending Recession and Personal Financial Armor…

April 4, 2008 | Author

“Fasten your seatbelts. It’s going to be a bumpy night.” All About Eve, 1950

John and Marion’s business is just beginning to pay off after two years of struggling to get started. Unfortunately, their business is not recession proof so making sure their personal economy is prepared for the negative effect a major slump might have on it – and them – is critical.

When the economy gets bumpy, there are two of the Four Pillars to which you need to pay close attention; freedom from debt and having ready cash to deal with the surprisingly unsurprising surprises that life sends your way. This is especially true for small business owners who rely on cash flow more than the employed worker.

John and Marion have decided to re-organize a few things to assure liquidity if a down-turn affects their personal economy to a greater extent than they anticipated.

  • ~ First, they refinanced their home at a significantly lower interest rate, so their monthly payments remained about the same.
  • ~ They also “harvested” an extra $20,000.00 of equity from the refinancing and used that money to eliminate all of their other debt – mostly credit card debt – freeing up several hundred dollars each month.
  • ~ That leaves them with just one other debt to repay; a loan they made to themselves from the cash values of their life insurance policies. This loan will be eliminated quickly using the extra cash flow. This will restore the cash values in their policies. These values are guaranteed to grow every year regardless of what happens in the general economy and become the family’s and the business’s first line of defense against life’s surprises.
  • ~ Their mortgage then becomes their only debt.
  • ~ They also obtained a $100,000 equity line of credit today that they may not be able to get later. Should the business encounter “a bumpy night,” and their business or their personal economy requires it, John and Marion can tap into their HELOC.

There is one aspect of John’s and Marion’s personal economy that would be troublesome in a severe recession; their investments. Most of the money they have invested is in mutual funds that could lose significant value in a recession. The couple has decided to watch their mutual funds and the market more carefully in the months ahead and to move the money into cash or cash equivalents if the values begin dropping a lot.

Their mutual fund sales rep suggests that they should ride out the “bumpy night” and that the market will rebound – eventually. John and Marion believe that they would rather lose the potential for an eventual gain in return for a smaller guaranteed one today.

Money for Life…in good times and bad taught John and Marion the strategy that armors them against recessions, depressions, inflation, deflation or stagflation. Ask yourself whether or not that strategy makes as much sense for you as it does for them. If so, then take advantage of this…

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 E-Book Cover

______________________

Posted in Money, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Holding Tight to Money Myths…

April 2, 2008 | Author
  • Here lies the body of William Jay
  • He died maintaining his right of way –
  • He was right, dead right as he sped along,
  • But he’s just as dead as if he were wrong. Boston Transcript, date unknown

Kate and Ernie followed all of the financial rules that the media and their advisors gave them; max out the 401(k)’s, keep a large mortgage on the house and invest the equity elsewhere, three to six months emergency money is enough, the “market” is reliable, buy term insurance. Then, life delivered a knock out blow. First Ernie lost his job to a plant relocation and a month later Kate got laid off after a merger. OK, they had 6 months of expenses saved up and their severance and 401(k)’s were there if they needed them.

After a couple of months of no work and no income Kate was diagnosed with teminal cancer. Over the next year most of the assets that the couple had acquired went to treatments that were not covered by their insurance. They cashed in the investments that they bought with the equity in their home, got behind on the mortgage, lost the cars, spent the emergency money, dipped into the 401(k)’s and ran the credit cards to the limit. Kate died at the age of 29 and Ernie was broke and filed bankruptcy at the age of 30 – the term insurance was the first thing they dropped to control their spending when they first got laid off.

Blindly following rules about money is just as foolish as following the “rules of the road” when doing so puts you at risk. What if Kate and Ernie had chosen to think through their decisions about money instead of just doing what conventional wisdom dictated. What if they focused their energy on building a foundation of money that was entirely under their control and that supported the Four Pillars that are the framework of every successful personal economy.

I can’t give all the details in a blog post, but in summary, if they had paid their mortgage down over the seven years that they had it and even reduced it with the few bonuses and gifts they received, they would have had access to almost three years of living expenses with an equity line of credit. If they had put some of the money that they were contributing to their 401(k)’s into cash value life insurance they would have had an additional two years of living expenses and, more importantly, when Kate was diagnosed with cancer the policy’s waiver of premium benefit would have taken over her payments; when she died Ernie would have recieve a large tax free death benefit and repaid all of the money he had borrowed and recovered most of what he liquidated.

Money for Life can change the story of your life…in good times and bad. See yesterdays post for a great offer and go to www.TheMoneyForLifeBook.com to take advantage.

__________________________________

Posted in Money, Personal Financial Management, The Four Pillars, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

The Most Versatile Tool In Your Money Tool-Belt……

March 30, 2008 | Author

Insuring Against Recession

Check your life insurance policy to ensure it’s right for today’s troubled economy.

“A whole life insurance policy is the Swiss Army knife of the insurance world.”

Beth PiskoraManaging Editor, U.S. Editorial

The Outlook, Copyright © 2008, The McGraw-Hill Companies.

“Unemployment currently stands at 5%, but David Wyss, the chief economist for Standard & Poor’s, sees it creepingup to 5.5% by the end of this year. That means up to 750,000 Americans could potentially lose their jobs in 2008.

“Are you prepared — financially, if not emotionally — if you lose your job? If not, you might, with a financial advisor, consider buying more insurance. Even if you are retired, or feel very strongly that your income stream is safe, there are some stable long-term savings options in many insurance plans that you might want to consider in these volatile times in the stock and bond markets.

“While term life insurance is overall a more popular product, whole life insurance is enjoying a resurgence of demand. To understand if whole life is right for you, it’s best to know a lot about the product.

“A whole life policy can act as a buffer against estate taxes and probate costs, and provides a death benefit along with a living cash benefit, a feature unique to whole life. In addition, a whole life policy allows someone at the time of retirement to remain insured while spending the other assets they’ve accumulated or pursuing a more aggressive investment strategy for those assets.

“A whole life insurance policy is the Swiss Army knife of the insurance world,”…  read the rest here –> http://themoneyforlifebook.wordpress.com/why-whole-life-insurance-works-in-tough-times/

__________________________________________________

Money For Life…in good times and bad – How to Thrive in the 21st Century addresses the issues raised in this article in detail.

buy it today at –> www.TheMoneyForLifeBook.com

_________________________________________________

Posted in Money, Personal Financial Management, Retirement, Taxes, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Twins, Taxes, Money and “Banks”…

March 28, 2008 | Author

“Mama always said life was like a box of chocolates. You never know what you’re gonna get.” Forrest Gump, 1994

Jeff and Beth are 40 and have a plan. They manage their money wisely, could be the poster kids for prudent mortgage management, steer clear of credit card and consumer debt, promptly pay off any debt they incur out of necessity, put about $21,000 each year into their individual and their children’s “banks” and now, suddenly, are about to become the proud parents of twins.

“You never know what you’re gonna get.” and twins are going to force some changes to the “plan.” The first change is a significant reduction of income because Beth plans to semi-retire from her well paid corporate position to care for the newborns, and Jeff’s burgeoning university teaching career is just burgeoning but not yet in full bloom. This change creates others; funding for the “banks” has to be reduced, relocation is assured, the family home has to be sold in a down market, and, on the up side, two more tax deductions.

Since the “banks” are an essential piece of Jeff’s and Beth’s plan for the future, that’s the piece of chocolate we’ll address in this post. Jeff’s whole life policy is just entering its third year. Almost all of the premium that is paid into the policy this year is credited to the cash value account. This allows Jeff and Beth to pay the annual premium of $13,200 using a loan from Beth’s 401(k).

Once the premium has been paid using the 401(k) loan and credited to the cash value account in the policy, Jeff and Beth can immediately borrow it back from the policy and pay off the 401(k) loan. This leaves them with a debt to themselves that they can repay on their own schedule and with the money they have available.

In fact, they could borrow the premium from the policy every year for the next ten years and not make any payments out of their income and the policy would remain in force and retain some cash value. Jeff and Beth could, of course, pay the interest to themselves and assure that the policy would remain in force for decades and grow in value.

That won’t happen. Jeff and Beth will bite into another piece of chocolate and discover another surprisingly unsurprising surprise that will change their lives and their plans; they could win the lotto or lose an investment. The constant financial fact that allows them to go forward with confidence is the power and flexibility inherent in their personal economy because of their “banking” system.

“You never know what you’re gonna get.” but you can make sure you can handle it. Discover how –> www.TheMoneyForLifeBook.com

______________________________

Posted in Money, Movie Quotes, Taxes, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Money Talkers Talking Down to You…

March 21, 2008 | Author

“What we’ve got here is a failure to communicate.” Cool Hand Luke, 1967

Reba is an attorney; a very brilliant, busy and successful attorney. Her practice keeps her busy 60 to 80 hours a week and her long term commitment to her favorite charity devours additional hours each month. Reba, single and childless herself, also finds time to volunteer as a tutor at the high school that is just around the corner from her home.

Busy executives, sales reps, attorneys, accountants, consultants and others in professional practices, including Reba, earn a great deal of money. They rely on the adviced and guidance of financial and investment professionals (and there is a great deal of difference between these two vocations) if for no other reason than the lack of time available to study how best to handle the money that flows into and through their lives. But, Reba, like many others in her position find the advice they are receiving is lacking in both effectiveness and wisdom.

Reba’s advisor presented himself as an investment professional with financial planning credentials. Credentials did not, however, convert into performance. The advisor’s suggestions were perfunctory and superficial; they had no apparent research behind them, other than the recommendation of the Behemoth for which he worked; they were presented hastily and Reba’s questions and concerns were treated with impatience – almost disdain. In addition, the results that the advisor’s recommendations produced were no better than Reba would have expected from a good savings program.  Add poor results to the impersonal and arrogant character of the advisor’s behavior, and it is understandable that Reba wants a change.

The “failure to communicate” lies with the advisor. Like the “boss” in Cool Hand Luke, the advisor’s idea of communicating is that his clients should listen to him and do as he says; no questions, comments or concerns are permitted to enter the conversation unless they support his position. “Yes, Boss.” is the only legitimate response. This problem arises frequently. Most advisors do not take an holistic approach to their profession. They rely on templates and formulas that the Behemoths they represent force feed them.

The only way you can guarantee yourself competent advice is to have your own financial house in order before engaging an advisor. That means you need to adopt tested and proven practices that are objective in form and subject to your wants and needs. Then, you can rely on these practices to manage and measure the money that flows through your life .

Money for Life provides a model based on building a solid money foundation – a “bank” – that supports the Four Pillars that are essential to any successful financial strategy. You owe it to yourself to consider this approach. Those who have done so have more money and greater peace of mind than those who put every penny at risk in an investment program designed by a Behemoth for the benefit of the Behemoth.

www.TheMoneyForLifeBook.com describes the problems we all face as we navigate the 21st century. Money for Life articulates a solution that allows you to have everything you need and anything you want without incurring debt or risking your money in schemes disguised as “your plan” but devised by and for the benefit of others. Your financial future will benefit immensely from the few dollars you invest to buy Money for Life and the few hours you’ll spend reading it.

__________________________________

Posted in Money, Movie Quotes, Personal Financial Management, The Four Pillars, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

I Hate Spending Money…

March 10, 2008 | Author

A recent study found that spending cash - tens and twenties and fifties -  was emotionally painful while flipping out the credit or debit card was not only not painful but created a sense of well being – unless, perhaps, you were entertaining at a high class restaurant and shivering in fear because you were unsure if there was enough credit left on your card to pay the bill.

I can relate to the pain of spending cash. I hate spending money. Taking actual cash out of my pocket and giving it to someone else galls me. I recently had the opportunity to buy a 2004 Mercedes Benz ML350 (a small suv) with only 29,000 miles on it for a great price. I have the money to finance it myself, but I just couldn’t bring myself to part with thousands of dollars even knowing that I would repay every penny of principal and interest into my own “bank.” It was too painful. Plus, my 1993 Geo is still running strong and getting 30+ miles per gallon so spending money on the Mercedes wouldn’t be the end of giving my money away. I’d have to spend more on gas, and service would be more expensive too - more money out of my pocket.

Borrowing the money from a bank to buy the Mercedes was tempting. That way I’d give my money away in smaller chunks and it might not hurt as much. It would cost a lot more, but I could rationalize and say I was using the bank’s money. The bank would smile at me, but giggle in the back room because the bank would know how much money they were going to make off of me over the finance period, and the bank would also know that the car was really theirs until the last payment arrived in 24, 36, 48, 60, 72 or 84 months – the longer the better - for the bank.

The Debt Paradigm has America convinced that individual citizens can apply the same rules to their personal economies that governments and major corporations apply to their much larger and more robust economies. American’s are subjected to seminars and other training programs that portray the behavior of the “wealthy” as the ideal and insist that the average American can live like Donald or Oprah if only they follow the magic path to riches that the other wealthy folks are traveling.

BUNK!

There is a way that any American, who wants to, can build a personal economy that lasts starting from wherever he or she is today and without mastering some esoteric system that was perfected by the “wealthy.” —> www.TheMoneyForLifeBook.com and you owe it to yourself to give it a look.

___________________________________-

Posted in Debt, Money, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Money and the Media…

March 5, 2008 | Author

If you rely on the media for guidance about money and investing you will soon find yourself lost in a forest of financial misinformation. Both the financial media and the mass media develop their information from sources within the financial community – lobbyists for a specific point of view that serves the bottom line of Behemoths, not your best interests.

Even worse, the well known “advisors” who appear on television and the radio are performers and pundits, not trained financial guides. Their goal is to sell advertising to support their “show” and books and tapes and seminars and speaking engagements to sell their next book, tape, seminar and speaking engagement. I have no problem with that; it’s free enterprise and it makes us all stronger. I do it myself, but in addition, I put my 35+ years of experience helping individuals, families and businesses small and large with money issues into the equation.

That’s not the point of this post, however. Watching the news this morning to catch up on the primary results I realized that over 60% of the commercials on three different cable networks – CNN, FOX and MSN – were focused on negotiating tax relief with the IRS, negotiating debt reduction with credit card companies, acquiring new credit cards, borrowing to buy things and “interest free” purchases. Another 20% focused on capturing your money in 401(k) rollover accounts, planning for your “dreams” (interesting choice of words), on-line stock trading or other investment schemes, health insurance or mortgage rates. (I guess the politicians are wisely watching the commercials instead of the “shows.”)

The commercials do not address the same topics as the pundits and performers. They do address the issues my clients talk about every day, “How can I have the things I need and want without the risk of debt overtaking my personal economy?” or ”How do  I run my business so the profits come to me and not the IRS?” or any of dozens of other questions about current concerns; paying for college, or health care, or retirement, or housing, or vacations, or cars, or…you get the picture.

My point is this: American’s are trapped in an outmoded pattern of thinking I call The Debt Paradigm, which recites its mantra non-stop: “You can have everything you need and anything you want as long as you have enough credit.” We are even using credit to pay for our retirement when we finance the things we need and want and, at the same time, put money aside in an IRA, a 401(k) or its equivalent instead of paying for what we buy with money from our own “bank”.

The Point! The media and the pundit performers always operate in their own best interest not yours. They continue to tell the story of The Debt Paradigm as if it were the gospel. Even when they decry debt, they still promote the corrolary to the main mantra, which is that investing is better than saving. They are wrong.  Americans  have lost thier way. The past offers wisdom and the 21st century offers powerful financial products that serve you and not the Behemoths.

You owe it to yourself, your family and your future to discover the secrets to Money for Life…in good times and bad. If you don’t want to spend the $29.95 to buy the book, at least get a head start on your future and get the FREE white paper Why Budgets Don’t Work at www.TheMoneyForLifeBook.com

_____________________________________

Financial Satisfaction Survey Results posted on a separate page –>

_____________________________________

Posted in Debt, Money, Personal Financial Management, What Others Say, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Buffett – On Banks Losing Money…

March 3, 2008 | Author

Forbes.com (Annual Letter To Shareholders – Buffett On Investing And The Markets – Forbes.com Staff 02.29.08, 9:00 PM ET) excerpted the following gem from Warren Buffet’s annual letter to Berkshire Hathaway shareholders – http://www.berkshirehathaway.com/letters/2007ltr.pdf:

“Some major financial institutions have, however, experienced staggering problems because they engaged in the “weakened lending practices” I described in last year’s letter. John Stumpf, CEO of Wells Fargo aptly dissected the recent behavior of many lenders: ‘It is interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine.’

“As house prices fall, a huge amount of financial folly is being exposed. You only learn who has been swimming naked when the tide goes out – and what we are witnessing at some of our largest financial institutions is an ugly sight…”

Ugly indeed! One more reminder that every business’s economy, just as every personal economy, is prone to failure when it engages in unnecessary risk. Multi billion dollar banks can – of course – withstand the failures inherent in risk more easily than you and I; they are leveraging our money as well as theirs. You, as an individual or family, however, rely entirely on your own money UNLESS you have discovered a method of managing the flow of money through your lives that lets YouBeTheBank. Then you can armor yourself against investment risk while your neighbor struggles to pay the credit card bill and mortgage and hopes his 401(k) doesn’t crash and burn.

Being successful with money is easy and a great deal of fun once you know how. The secret is that you can have results like Warren Buffett or you can follow the folly of the banks. The tides on its way out. Get your swim suit here www.TheMoneyForLifeBook.com

Posted in Money, Personal Financial Management, What Others Say, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Wealth is a Relative Term…Part II

February 21, 2008 | Author

Part I of this discussion ended by stating the mantra of the failed Debt Paradigm that so many Americans have been duped into subscribing to; “You can have everything you need and anything you want as long as you have enough credit.” This installment deals with the alternative to the Debt Paradigm we call the Money for Life Model.

The Debt Paradigm tells you that earning and borrowing have equal value in the wealth equation. This thinking, however, creates a money siphon that mortgages your future income and ultimately leads to severe financial stress or even bankruptcy. If I were more adept at blogging there would be a diagram here to illustrate this concept but let me at least try to elucidate with words.

Picture a bucket into which water is flowing - that’s your income going into your checking account. As time goes by, you dip water out of the bucket to take care of your needs and wants just as you take money out of a checking account to pay your bills. Eventually (in the Debt Paradigm) the money flowing into the bucket is less than the money flowing out. The bucket becomes empty. What happens next – and it usually happens before the bucket is empty – is the use of a new money source – credit – to pick up the shortfall of money flowing into the bucket. Aaah! Relief.

But is it really relief? It seems to be so because the new money source is large and friendly (at this point) and you are able to get the things you need and want. But, while this new money source is pouring money into your bucket, it is also installing a siphon with a variable valve attached to take money out. If you follow this paradigm to its logical conclusion, the siphon will eventually take most of the money out before you can spend it and the money source will stop pouring new money in and you will be left with a bucket that has an open siphon that takes your money before you can use it – bankruptcy.

The Money for Life Model changes this verbal picture only slightly. The Money for Life Model installs the siphon when you start pouring money into your bucket and siphons some of the money that comes into income your bucket into your “bank”. When the money coming in is less than the money going out you dip into your “bank” to make up the difference and open the siphon into your “bank” a bit more to replace wht you’ve taken out. This approach recycles your money instead of allowing debt dollars to flow in from credit grantors.

This approach to wealth building is much more than the outmoded “pay yourself first” axiom suggests. It is based on this idea but goes way beyond. If you would like to learn more about your debt siphon, visit www.TheMoneyForLifeBook.com and request your FREE copy of the exclusive white paper Why Budgets Don’t Work.  (Of course you will also learn about the groundbreaking book Money for Life…in good times and bad.  If your time is short, you can scrroll to the bottem of the page to order the report.)

_________________________________________

Financial Satisfaction Survey page –> will close in about a week. We appreciate your contribution of two minute of your time to anonymously answer a few questions.

_________________________________________

Posted in Debt, Money, Personal Financial Management, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Wealth and Your Waistline…

February 19, 2008 | Author

The positive relationship between health and wealth is apparent. It’s difficult to acquire wealth when your health consumes your energy and your money.

The negative relationship between weight and health is equally apparent. Obesity creates unintended consequences that cost money…lots of money.

Now the health care industry is going to incorporate a mechanism in health insurance programs to track how health care providers deal with the obesity issue. (See the brief below.)  The obvious reason is that obesity leads to heart problems, diabetes, cancer and many other life threatening medical conditions. Each of these conditions is expensive to treat and puts a financial strain on the system, on the patient and the patients financial resources. In addition, many of these conditions are cronic and require home care or nursing home care at $6,000 per month and higher. You don’t need a calculator to figure out that writing a check for an extra $6,000 on the first day of each month for several years will stress the resources even of those who see themselves as wealthy.

Many estates that are built over a lifetime of work and worry are consumed by medical expenses in the last few months or years of life. Obesity can be a significant contributor to this erosion of health and wealth. You owe it to yourself to put a proper plan in place to address the probability that your wealth will be at risk even if you are in great health. Money for Life…in good times and bad shows you how to deal with this issue and with the other financial issues that present themselves throughout your life. It provides clear and effective strategies for accumulating and growing your wealth. It shows you how The Four Pillars can help you measure and manage your progress. You owe it to yourself –> www.TheMoneyForLifeBook.com

____________________________________________

National Underwriter L&H

NCQA Adds Obesity Indicators to HEDIS

NU Online News Service, Feb. 14, 2008, 5:29.m. EST

The National Committee for Quality Assurance is using its latest set of health plan quality indicators to encourage plans to pay more attention to weight.

The NCQA, Washington, says the 2009 edition of the Healthcare Effectiveness Data and Information Set, a tool for comparing the quality of many health maintenance organization plans and some preferred provider organization plans, will include a measure indicating how often doctors check the body mass index of adult plan members.

_______________________________________________

 

Posted in Money, Personal Financial Management, The Four Pillars, What Others Say, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

A Money Limerick and A Money Lesson…

February 17, 2008 | Author
  • Comedians know about funny,
  • And beekeepers know about honey.
  • And chances are good
  • That both wish they could
  • Know more than they know about money.

Everyhting 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.

________________________________

Please, visit the Financial Satisfaction Survey page if you have an extra two minutes and help us report on 21st century attitudes about money.  Thanks –>

________________________________

Posted in Money, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Financial Facts, Figures and Falsehoods…

February 16, 2008 | Author

Have you ever been approached (or accosted) by the “financial planner” at the local branch of your bank? If you were, the person you spoke with may have suggested that you buy an annuity, buy some mutual fund shares, open an IRA account, buy some term life insurance or start a SEP retirement plan (if you owned a small business.) What that person most likely wouldn’t have suggested is that you buy cash value life insurance.

That may not seem strange to you until you discover that the bank itself relies on cash value life insurance to provide its own financial foundation. Some banks own so much cash value life insurance that the actual cash value in those policies exceeds 50% of their tier one assets – the assets that determine the bank’s stability in the eyes of investors and regulators. A majority of banks hold substantial amounts of their tier one assets - ranging from $43 million to over $13 billion and growing - in cash value life insurance policies in 2006. Major NYSE and NASDAQ non-banking corporations also rely on cash value life insurance to support their retirement plans, executive compensation and balance sheet.

Why is it, do you think, that the financial businesses – including the Wall Street gang - which themselves rely on cash value life insurance as a significant part of their own financial foundation, do not recommend that you do the same?

  • ~ Could it be because they believe that you can’t understand the power of this product because you are just a “consumer?”
  • ~ Could it be because they believe that your assets are just not significant enough?
  • ~ Could it be because they believe that you don’t have enough income to even start such a plan?
  • OR
  • ~ Could it be that selling cash value life insurance is simply not as profitable for the advising company as selling those other products?
  • ~ Could it be that the advisors in those companies are not taught and, therefore, do not understand the values and benefits that accrue with the ownership of cash value life insurance?
  • ~ Could it be that the advisors themselves are disincented to teach you about and sell you cash value life insurance?

Successful businesses, individuals and families own significant amounts of cash value life insurance. They did not acquire their policies all at once. You have to excavate in order to lay the foundation for a building. You also have to prepare to build a financial structure. Just as the banks rely on cash value life insurance as an integral part of their tier one assets, individuals and families need to incorporate cash value life insurance into their tier one assets – those assets that detemine your ability to weather the financial storms that regularly assault your financial structure.

Would you like to know how? Visit www.TheMoneyForLifeBook.com

________________________________

The Financial Satisfaction Survey is still running…why not join in? It takes less than two minutes. Click here to take the survey…

________________________________

Posted in Money, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Why Be Your Own Bank – Revisited…

February 13, 2008 | Author

In the first installment on this topic we focused on:

  • ~ the struggles of the banking industry
  • ~ the impending failure of both small and large banks
  • ~ the sub-prime lending debacle
  • ~ the difficulty individuals without top tier credit ratings face obtaining credit of any kind
  • ~ the general difficulty that this situation creates for everyone

In this installment, we focus on what is, perhaps, the prime reason for you to consider starting your own “bank” by using cash value life insurance as your foundation. When you own a quality cash value life insurance policy that accumulates money that you – and you alone – control, you have a source of  borrowed funds that profits you – and only you.

When you borrow from others you make them wealthy. In a recent post – The True Cost of Financing – we demonstrated how the typical American wastes money by giving it to retailers. The truth is that our entire economic system today is designed to make others wealthy by having you pay them interest. Not only that, the interest is paid on money you have not yet earned. Get your mind around that. It’s important.  Credit cards are the biggest offenders. Auto loans, retail store charges and even mortgages follow close behind. You borrow money you have not yet earned and then you have to pay your earnings PLUS interest to a Behemoth that cares not one nit for you. You are a source of wealth for them. Thay are the source of your poverty – now or in the future.

The reason personal economies fail is because they incur debt-to-others. The boomers are headed for disaster because they have bought into the “Debt Paradigm.” They believe they can have everything they need and anything they want as long as they have enough credit.

They have lost sight of the basic truth that debt is bad for them. They listen to the merchants of misinformation and the financial snake oil sales reps who convince them – because the reps themselves are deluded and convinced – that “the market” will take care of them “in the long run”; that mortgages are good things; that debt is the path to wealth. It’s all BUNK!

The only way to have a personal economy that lasts in good times and bad is to have a foundation of ready money that you control and that you can use to support the Four Pillars of your – and every –  successful personal economy. (Visit the Four Pillars page.) That’s what we mean when we say you need to manage your money in a way that lets YouBeTheBank.

Please, visit www.TheMoneyForLifeBook.com There are a few people in the country that understand the problem and the solution and this book explains it well.

Posted in Money, Personal Financial Management, Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

The True Cost of Financing…

February 11, 2008 | Author

Let’s set the scene: You go the local furniture store, negotiate your best deal on the new family room furniture – $5,000 – and accept the store’s “one year same as cash” offer. You leave feeling pretty good. Over the next 11 months you pay the store $455.00 each month and pay off the $5,000 before the deadline so you avoid any interest or penalty. You feel pretty good again.

Here’s what really happened. You gave up $5,000 and got some furniture. By the time you pay for it, it’s pretty worthless. And, the “no interst” piece of that transaction is a bit of a shell game. The funiture store cannot afford to send its money out the door and expect no return on it. There are financing charges built into the price.

Why do I say you gave your money away? That is always what you do when you finance a purchase. And it’s worse if you pay interest. Consider this altenative as a way to clarify what I mean. Instead of using the “same as cash” deal, let’s assume you paid a discounted price of $4,545 for the furniture because you used cash from a savings program (we’ll call it your “bank”) to pay for the furniture. Over the next 11 months you repay your savings program the $455 monthly that you would have paid the store to avoid interest charges. At the end of the year you still have the furniture but you have recoverd 100% of the money you paid for it plus an additional $455 in “interest” that you paid to yourself.

Now, here’s the really powerful part. The $5,000 from year one became $5,455 at the beginning of year two. Do you need some new appliances? Let’s assume they cost $5,500 at the big box store. Recycle the money in your “bank.” Negotiate the price down to $5,000 (you can almost always do that if you have cash), repay yourself what you took out of your “bank” – the same as you would have if you had made payments to the store - and, include the interet that you would have paid. You’ll have the appliances and you’ll also have almost $6,000 in your “bank.”

Keep recycling that original $5,000 from your “bank” every year to pay for what you need and want and pretty soon you’ll have enough money to buy your next car or even pay off your mortgage.

Money for Life…in good times and bad explains in detail an approach to money that lets YouBeTheBank and gain control of the money that flows through your life.  You owe it to yourself to check it out at www.TheMoneyForLifeBook.com

________________________

If you haven’t taken the Financial Satisfaction Survey yet, please do so at the page on the right.  Thank you. Results will be published in early March –>

Posted in Money, Personal Financial Management, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Money Architect or Money Archaeologist?

January 28, 2008 | Author

21st Century Financial Management Paradigm

As I look back at the 67 years that have passed me by, I realize that my interests in architecture and archaeology contribute to my profession as a financial teacher and guide.

The new financial management paradigm that I construct for my clients and those who seek my advice is based on the architectural analogy of laying a solid foundation, erecting supporting pillars, and building a financial structure.

To support this approach I refer to the wisdom found in ancient practices that are articulated in financial classics such as Benjamin Franklin’s The Way to Wealth and George Clason’s The Richest Man in Babylon. In addition, when I wrote the book Money for Life…in good times and bad – How to Thrive in the 21st Century I felt compelled to recount a brief history of the money paradigms that led American’s to the paradigm that enslaves us today and the model that frees us from that servitude.

Money for Life

Perhaps these analogies don’t apply to someone who relates more to the growth cycles of an agricultural economy or the volatility of the market economy. For this I apologize. Whatever your point of reference, however, Money for Life…How to Thrive in Good Times and Bad in the 21st Century is a valuable contribution to the financial literature of the early 21st century and is worthy of your time, attention and money.

Special Offer

You can order Money for Life…How to Thrive in Good Times and Bad

Order your copy today!

Posted in The Four Pillars, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , | No Comments »

Mutual Insurance Companies Are Thriving in the 21st Century…

January 10, 2008 | Author

Wednesday, January 9, 2008

Small life insurance companies flourish

“A new study from Conning Research and Consulting shows that despite tighter competition and consolidation in the life insurance market, many smaller life insurance companies are still flourishing.

The study, entitled “Successful Small Life Companies: Remaining Nimble in a Supersized World,” analyzed small companies as a group to identify the key earmarks of their success, which, according to the study’s authors, can be helpful to companies of any size.

Whole Life Insurance is one of the keys

Findings indicate that successful small life companies often share these common traits: a stronger focus on ordinary life insurance, a defined and sustainable niche, and effective cross-selling strategies, all of which lead to premium growth that’s higher than average. ” (Emphasis added)

Ordinary life insurance is just another way of saying  whole life insurance.

I just thought you might like to know that not only are the people who want to build a solid foundation for their personal finances putting their confidence in whole life insurance, but also that the companies who are committed to helping them achieve that goal are building strong financial reserves in support.

Learn more!  Money for Life…How to Thrive in Good Times and Bad shows you how whole life insurance can help you travel the safe and easy path to prosperity.

Buy your own copy of   Money for Life…How to Thrive in Good Times and Bad today!

©2008 Poor Richard Publishing Company – PoorRichard.Reborn@yahoo.com

Posted in Whole Life Insurance, You BE the "Bank" | Tags: , , , , , , , , , , , , , , , , , , , , , , , | No Comments »
Archives
Bookmarks

Powered by WordPress and WordPress Theme created with Artisteer.