Enter the Financial Planning Labyrinth…
January 25, 2008 | Author Dr Agon Fly
Yesterday I compared the financial planning process to a labyrinth. Later in the day I taught a class on financail planning for a group of seasoned financial advisors and presented them wth this same analogy. I suggested that they may not be advising their clients properly if they were not advocating the use of cash value life insurance – particularly dividend paying whole life insurance from a mutual company – as an essential component of the clients financial plan.
It was not a surprise when not even one of the advisors knew enough about this product class and this strategy to even present it as an alternative. Remember, a labyrinth does not allow choices. It is a path to nowhere. That is great if you are on a spiritual journey and are traversing a labyrinth to achieve clamness and clarity of mind. It is entirely unproductive if you are mapping out your financial future. These advisors, like most of the advisors, who are informed and trained by companies that do not have dividend paying whole life in their portfolio, were only taught about other forms of life insurance – the types that their companies had for sale.
They were taught that combining term life insurance and investments – either as two separate products or combined in a single product such as universal life insurance - offered a better approach to financial planning. They were shown the entrance to the labyrinth and told to lead their clients on this path as if it were the secret to finding the holy grail.
In fact, when you enter a labyrinth there is only one path and one destination. You relinquish choice. You give your decisions over to a rigidly defined set of strategies and tactics that lead you to a predefined destination. The path offers no options. The rules of the labyrinth are that you must proceed to your desitination without evaluating either the path or the destination.
There’s another troubling aspect of the financial planning labyrinth. It is two dimensional. It is a flat outline, a mere diagram. The only way to invest it with depth is to enter it. When you enter this labyrinth you invest it with meaning. The problem is that the meaning assures the success of the designer of the labyrinth, not necessarily the success of those who traverse it.
The issue is not whether or not you should have a financial plan or engage a financial planner. You should. Your concern should be whether or not the planning process you are undertaking is a two dimensional labyrinth with a single path and a cookie cutter destination or a plan that is designed to help you create a foundation upon which you can erect the Four Pillars that are essential to EVERY successful financial plan but unique to every person:
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Freedom from debt-to-others
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Ready money to deal with life’s surprises
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Income you don’t have to work for and you cannot outlive
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A legacy of wealth and wisdom for those you care about
If you already have a financial plan or are considering one, measure it carefully against the Four Pillars. If it doesn’t measure up with guarantees that it will deliver the foundation and the Four Pillars you may want to ask your advisor why not – or find another advisor it the answer isn’t satisfactory.
To learn all of the secrets of Money for Life visit www.TheMoneyForLifeBook.com
Posted in Money, The Four Pillars, Whole Life Insurance | 
Tags: agon fly, annuities, annuity, bank, bank on yourself, banker, banking, banks, be the bank, become your own bank, becoming your own banker, bonds, circle of wealth, debt, debt to others, disability income insurance, Dr Agon Fly, Dr_Agon_Fly, financial, financial advice, financial planning, health insurance, housing market. stocks, how to thrive, infinite banking, insurance dividends, investing, jeff reeves, jeffrey reeves, leap system, life insurance, long term care insurance, Money, money for life, money under management, mutual funds, mutual insurance, mutual insurance company, nash, nelson nash, pamela yellen, passive income, pirates of manhattan, r nelson nash, saving, stock dividends, stock market, Taxes, term life insurance, The Four Pillars, thrive, universal life insurance, variable life insurance, Whole Life Insurance, Who’s helping you, yellen
I think it is most financial planners who advocate against buying a cash value life insuranc policy and instead advise their clients to get term life insurance. Maybe its not that they don’t know, but that they don’t like. That said, I have met one financial planner who seemd to think that cash value life insurance was the answer to everything.
While there is no “answer to everything,” using participating whole life insurance (and perhaps some other life products that are emerging) as the foundation of your financail structure, makes more sense than any other method.
What most advisors don’t know is that using life insurance as a starting point gives their clients leverage and puts the advisor in a position to safely manage client savings and investments for decades.