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Iul workshop 10102013 A New Financial Landscape Why today's financial reform means opportunity for you
What to expect? • Be Surprised • Happy to learn the REAL truth • Upset and even angry • Feel they have been deceived What to expect? • Be Surprised • Happy to learn the REAL truth • Upset and even angry • Feel they have been deceived
Universal Need: Money Money has always been important in my life and I expect it to be important in the future Universal Need: Money Money has always been important in my life and I expect it to be important in the future
If you never set financial goals, how will you ever know when you have achieved them? If you never set financial goals, how will you ever know when you have achieved them?
A New Financial Landscape The role of Banks, Insurance Companies, and Stock Brokerage firms has dramatically changed A New Financial Landscape The role of Banks, Insurance Companies, and Stock Brokerage firms has dramatically changed
A New Financial Landscape Today, you have to look at Insurance Companies totally differently. A New Financial Landscape Today, you have to look at Insurance Companies totally differently.
Common Myths Where do myths come from? Most people get their advice from others They rely on the Opinions of others They do not do the homework or research for themselves. Get The Facts Common Myths Where do myths come from? Most people get their advice from others They rely on the Opinions of others They do not do the homework or research for themselves. Get The Facts
Common Myths I have been told that: “Life Insurance was a Bad Investment and Too expensive” Common Myths I have been told that: “Life Insurance was a Bad Investment and Too expensive”
. Only an Insurance Company The EDGE today is with an Insurance Company. An insurance company can also be your best financial friend and ally in turbulent economic times.
. Only an Insurance Company offers! • With life insurance you can receive special benefits unavailable from your banker or stockbroker. • These benefits include safety of principal and prior earnings, low fees and favorable tax treatment.
. Life insurance is a financial TOOL that solves an economic problems Run out of money Sick Risk of Losing Money Live Too Long/Die Too Soon more effectively and for less cost than any other financial alternative.
. Life Insurance to Benefit Someone Else • This death focus is at the heart of most life insurance advertising. • Over time the "you die... we pay" characteristic of life insurance has been conventional wisdom – The “Old Type or the “New Type”?
. Life Insurance for YOUR Benefit • Replacing current income with passive income using Life Insurance will: • reduce increasing expenses, • eliminate stock market risk, and • deliver significantly more spendable money -- than a 401(k), IRA, or TSA account balance.
. Life Insurance for YOUR Benefit Increase your spendable income by 300% or more compared to 401(k), TSA, or IRA.
. Life Insurance for YOUR Benefit • Keep all of YOUR stock market gains. • Safely participate in the stock market without risking principal, or paying income taxes. • You keep all the previous gains, and never go backwards. When the market is down you will never go down.
. Reduce Your Fees • Most people have no idea how much management fees and 401k fees REALLY cost them • It’s what you get to keep that matters
. Replace higher fee expenses. • As your mutual fund account value increases, so does the dollar amount of the fee expense you pay. • Insurance, on the other hand, has a fixed level fee that's part of a lifetime level premium. • As the account value grows, the insurance fee stays the same.
. Increasing vs. Fixed Fees Year Value @ 7% Qual. plan fee (1.5%) Life Ins. Fee 1 $12,660 $190 $1,500 15 $283,694 $4,255 $1,500 20 $441,433 $6,621 $1,500 25 $647,592 $9,714 $1,500 30 $917,033 $13,755 $1,500 Example, contributing $12,000 annually into a qualified plan7% return- 1.5% management fee.
. Fees: “Low Cost”, Growth Fund in a 401(k) Fund mgt fees 1.13% Fund trading costs 0.86% Participant education fees 0.75% Administration fees 0.15% Custodial fees 0.05% Audit and legal fees 0.05% Total charges 2.99% LA Times.com 3/ 27/ 07
. Time.com June 4, 2012: “It isn't unusual to find 401(k) plans with a total cost paid by the participant exceeding 3% annually".
. “The 401(k) ReThink“ "once you're in a 401(k) there's no CAP on how much the plan might skim off the top and fees... many plans, especially those sold to small companies, can eat up roughly half of the real investment returns.“ September 7, 2009 Forbes.com
. Example • If you contribute $1,000 a month for 30 years and earn a 7% return, you will accumulate $1,219,979. • Run this at 5.5% -- less 1.5% fees -- and you will have $913,617. • That's $306,362 or 25% of YOUR total gain went to Wall Street
. Replace Higher Fee Expense • The 50 year total sent to Wall Street would be $580,447. • This is totally lost money, because you will never earn, gain, or receive income on it. • By contrast life insurance expenses for these 50 years would only be $75,000. and zero tax.
. The insurance company doesn't punish you for increasing your account balance and succeeding!
. “The ugly truth,… is that the 401(k) is a lousy idea, a financial flop, a rotten repository for our retirement reserves.” Read more: http://www.time.com/time/business/article/0,8599,1929119,00.html#ixzz0okff0Dcf Why It's Time to Retire the 401(k)By Stephen Gandel Friday, Oct. 09, 2009 http://www.time.com/time/business/article/0,8599,1929119,00.html#ixzz0okgNZ81R
. Eliminate Premature distribution Tax Penalty • Should you decide to liquidate your qualified plan in the early years before age 59 1/2, you will incur a 10% federal tax penalty, and in many cases a state penalty. • This tax is another expense that reduces your principle and prior earnings. • There is no tax penalty with insurance.
. Receive Living Benefits. • Government sponsored retirement plans DO NOT provide any sort of additional benefits. • Life insurance, on the other hand is uniquely designed to protect you against unforeseen illness.
. Receive Living Benefits. These living benefits at no additional cost. They include: • terminal illness, • chronic illness, • critical illness, and • guaranteed lifetime income.
. 7 out of 10 Out of every 10 people who reach age 65… At least 7 people will experience one the big three cancer , heart attack, and stroke.
. Receive Living Benefits Critical Illness 1. Heart Attack 9. Arterial Aneurysms 2. Stroke 10. Central Nervous System Tumors 3. Cancer 11. Major Multi-System Trauma 4. End Stage Renal Failure 12. AIDS 5. Major Organ Transplant 13. Severe Disease of Any Organ 6. ALS 14. Major Burns 7. Blindness 15. Loss of Limbs 8. Paralysis 16. Severe Central Nervous System Disease (Parkinson’s, Huntington’s, MS, Sclerosis, Encephalitis)
. Receive Living Benefits Chronic Illness Unable to perform 2 of 6 Activities of Daily Living: bathing, continence, dressing, eating, toileting, and transferring
. LIFE COMES WITH RISKS • A Harvard study found that 46.2% of bankruptcies were attributable to major medical expenses[1]. • Nearly 75% had health insurance. [1] Published in February 2005 Journal Health Affairs
. Contributions to qualified plans are “Phantom Deductions” It must be paid back at some point in time at a future income. You will have to pay it all back later Every penny of principle is added on top of the interest -- and must be repaid a combined state and federal tax rates which currently can exceed 40%.
. The IRS has two basic rules: pay me now! Or pay me later! Which one do you think is the best strategy?
. Life Savings Plan Smarter more complete alternative to 401k, IRA, Roth also know as IRS Code Sec 7702 Life Savings Plan Investment Grade Insurance Contract Indexed Universal Life
. The typical mutual fund investor has actually been losing one percent a year for the past 20 years, after adjusting for inflation.3 3 DALBAR’s 2008 Quantitative Analysis of Investor Behavior For Agent Training
. Protection & Potential Many people sacrifice return for safety, and other people sacrifice safety for return. Indexing combines the best of both. $150,000 $140,000 $130,000 $120,000 $100,000 $160,000 $170,000 $90,000 $110,000 Indexed AccountLarge Company Stocks 8/97 8/98 8/99 8/00 8/01 8/02 8/03 8/04 8/05 8/06 8/07 8/08 8/09 8/10 $180,000 $190,000 $200,000 8/11 $151,836 $128,379 $140,217 $93,403 $116,838 $117,453 $130,430 $134,185 $103,485 $133,065 $109,673 $120,396 $154,762 $138,192 43 $100,000 Invested in 1997 $115,563 $124,230 $124,230 $143,563 $158,775 $170,683 $154,330 $133,547 $107,500 $170,683 $183,484 $197,245 15 years: $211,000 Vs. $165,000
. Actual Performance 401(k) Vs. IUL 2000-2011 (12yrs) 410(k) $398,724 (1.5% fee) IUL $1,176,619
. Why have I not heard about this before? Several Bestselling books Time Magazine Cover Story Major news publication 60 minutes and 20/20
. I don’t have any money! Four Ways 1. Redirect other Money 2. Spend Less 3. Keep More Tax Deductible Business 4. Make More Do referrals with us
. People Moving…Money Moving Huge Talent Transfer and a Multi Trillion Market A Silver Tsunami • $2.2 trillion in inheritances • $17 trillion in qualified plans • $12.3 trillion in money markets, CDs • $2 trillion in rollovers in next 5 years
. “Old” Way Vs “New” Way Virtual - e Agent Before • Traditional • Time and Planning • Travel Miles, Gas, Meals etc • Weekly “live” Meetings • People have to be with 30 miles • Office Hotel and Wardrobe • No shows • Stress After • Virtual- e Agent • Work where you want • Work when you want • Video- Presentations, Training, App lications • Have a trainer with you • 50 States • More Family Time, No Stress • More Time, Money, Lifestyle Online is Bigger, Better, Faster
. Refer 3 per year & earn $ 7,200/yr. That’s 1 every 4 months Where else can you make this kind of money part-time? Referral Agent
. 53 Refer Agents Build a team: Open 4 a month personally… $ 6,144/mo. Build 5 Associates who each open 2 LSA’s a month... $ 8,160/mo. VP Associate Associate Associate Associate Associate Income $14,304/mo.
. Training Program • Our Training Program –Designed for someone that’s never been in this business –Can begin on a part-time, or referral basis –On-line, conference calls and personal coach • No cost to get started.
