Here is an announcement from MTL insurance company addressing the current financial climate.
A Press Release distributed by the New York Department of Insurance about the AIG situation mentions some very important points about the safety of the regulated insurance industry. Unlike the esoteric unregulated banking industry, Insurance companies have been held to a higher standard of accounting principles by the government and their own constituents in the insurance industry.
Please keep in mind that every topic below can be a longer conversation if you wish
Concerns you should have about where your money is safe, liquid, growing (tax Free):
Where is it safer? Bank? Stocks & Mutual funds? Bonds? Buried in home equity? IRA or 401K or any government sponsored plan? Insurance?
Bank: Safe, yes (up to $250K in some cases now) ; Liquid , yes ; growth very little and not tax fee
Stocks & Mutual Funds: Safe, no; Liquid, no; growth lots of ups and downs over the years, not tax free, maybe get average of 9% before taxes
Bonds: Safe (somewhat); Liquid , no; growth moderate and sometimes tax free
Buried in home equity: Safe, no; liquid, no; growth, no (home may go back up in value but the actual equity has no growth while trapped in home on paper)
IRA or 401K or most government sponsored plans: safe, YES, it is creditor proof and protected in bankruptcy, but usually people chose mutual funds; liquid, no; growth – most of it could be owed in taxes.
All of the above will be examples of your dollars only being used in one place for one thing at a time. The way to move ahead is to have your dollar working for you in many ways at one time. A system to do this; is what you have set up in your permanent whole life insurance policy.
Whole life Insurance placed with a Mutual type company (no stock holders): Safe, Yes; liquid, Yes ; growth, Yes and tax free
* Troubles in the Finacial market and what type of companies have a track record of surviving extreme pressures in the market.
Fannie Mae, Freddie Mac and Banks: there are commercial banks (such as Lehman Brothers) and FHA programs that do the majority of their business with other corporations. There are also banks that do most of their business with individual people like you and me (the Bank of America type).
Many of the Banks that are in trouble are because they have too many investments in low quality mortgage backed securities that aren’t worth what they paid for them.
AIG or American International Group is basically having their trouble because of Mortgage backed securities too. AIG has a division that in a complicated way insures the investments in Mortgage backed securities and also owns a bunch of them as payment for their insurance to other banks that issued them. We know the securities aren’t worth anything any more. This is AIG’s problem now. AIG does, on the other hand, have extremely healthy insurance companies that will be restructured or sold off to other companies.
Mutual Trust Life Insurance Company, like many other Life Insurance Companies has been doing good business for over 100 years. Not many other industries can make the same statement. MTL has been through the Recessions and the Great Depression along with the World Wars. It makes sense to keep your money with the proven company/industry.
* Some important points of Whole Life insurance:
Guaranteed Death Benefit. (But that is really not that important.) What should determine that is how much cash you want to stuff it with? Warren Buffett has the most life insurance on the planet. Once he maxed out the amount he could get on himself ; aka max human life value (MHLV) he started getting policies on everyone around him that he could establish an insurable interest on. He is the owner and beneficiary still just not the insured.
In the last 100yrs not more than a couple life insurance companies have failed yet 100s of banks have. He would rather put his money here than a bank backed by the FDIC (Except Wells Fargo of course)
-Guaranteed level premium for life of policy. (Perfect hedge against inflation)
-Guaranteed cash value base
-Judgment and creditor proof* (depending on the state you reside)
-Virtual will and trust by designating beneficiary.
-Virtual medical insurance (Accelerated Death Benefit; Meaning you can access DB now for major medical Expenses if needed)
-Virtual disability insurance (Pays for policy if you were to become disabled)
-Tax free growth and income
-Non-taxable dividends (return of premium)
-Velocity (liquidity, use and control) move the money by putting your dollars THROUGH the policy NOT TO it. (You literally can borrow the cash from it and it acts as if the money is still in there growing)
-Collateral (you can assign policy and use as collateral short term and long term)
Bottom-line one dollar can do 12 plus jobs by using the policy as a pass-through vehicle. Rule of thumb is you can front load it by 2.5 to 3x the annual premium. Anything above that the gov’t will turn into a modified endowment contract (MEC) and then it become taxable. The key is to stuff it right below the MEC threshold. It’s not going to get you 12 percent returns but it can be used as a safe, secure facility
Again take a look at the attached AIG Press Release from the NY State Insurance commission. It outlines how secure and safe insurance companies really are…
I am sure some astrologer will find some correlation between October 29th, 1929 and September 29th, 2008.
Although the DOW only dove 777 points -6.98% compared to the -12% in 1929 this is still horrifyingly close. NasDaq fell -9.14% and the S&P 500 fell -8.79% (so much for those that were selling the IULs)
Leadcritic has a good article that came out this morning on their blog however the best bailout article I have seen yet is on the Los Angeles Times website. Check out the graphic of the comparision with other federal programs:
Two things that have made me a lot of money in the past is:
1. writing down AND
I suggest using:
1. a large white board (at home or at your desk),
2. a small wallet size card and
3. if you really want to go the extra mile put something in the shower or on your frig.
I have seen some people do collogues out of magazines but I think you just need to imagine and focus in on would you want.
Your vision should be so clear you should be able to see yourself there in color, awake and while sleeping.
One thing I do know is that your focus must be razor sharp! 85% of your thoughts must be focused here and you can only allow yourself to indulge in 15% distraction.
In order to measure and manage your activities/indicators to stay on track toward your outcome I suggest:
1. another white board
2. an excel spreadsheet
“What does not get measured does not get managed”
In addition to focusing in on the direct activities that get you paid also manage your state.
Are you in a peak state in order to achieve your outcome?
Are you focusing in on the basics?
I always have found that you track things backwards
So for example if you were to want an outcome of $10,000/mo (which gets you financial freedom, debt free, new home, new car, more choices, trips with family, better school for kids etc etc)
If you were to say have an ave. gross sale of = $6,000 x 35% = $2,100/deal = 5 closings/mo
60% pullthrough = 8 submissions/mo
40% of APPS I send out come back = 20 APPS sent out/mo
It takes 60 hours of talk time/presentations/pitches per month to get 20 APPS sent out
In order to set up 40-50 presentations I need to make 2,000 dials/mo
Then you break it down from monthly to weekly to daily indicators so it looks something like this:
Month: $10K / 5deals / 8 subs / 20 APPS sent / 60 hrs / 2000 dials
Week: $2500 / 1deal / 2 subs / 5 APPS sent / 15 hrs / 500 dials
Day: $500 / ?deals / ? subs / 1 APP sent (or else I dont leave for the day) / 3 hrs / 100 dials
I wish I still had some Euros, Swiss Francs, Singapore Dollars, or even some New Zealand Dollars…not only would you benefit from the purchasing power of the currency but the down real estate market. The two combined guarantee at least 50 cents on the dollar (or maybe even free in some cases) and exponential future returns.
I think Robert Prechter has a currency fund.
1. The next time you order checks have only your initials (instead of first name) and last name put on them. If someone takes your checkbook, they will not know if you sign your checks with just your initials or your first name, but your bank will know how you sign your checks.
2. Do not sign the back of your credit cards. Instead, put ‘PHOTO ID REQUIRED.’
3. When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the ‘For’ line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check-processing channels will not have access to it.
4. Put your work phone # on your checks instead of your home phone. If you have a PO Box, use that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks, (DUH!). You can add it if it is necessary. However, if you have it printed, anyone can get it.
5. Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. Also carry a photocopy of your passport when traveling either here or abroad. We have all heard horror stories about fraud that is committed on us in stealing a name, address, Social Security number, credit cards.
6. When you check out of a hotel that uses cards for keys (and they all seem to do that now), do not turn the ‘keys’ in. Take them with you and destroy them. Those little cards have on them all of the information you gave the hotel, including address and credit card numbers and expiration dates. Someone with a card reader, or employee of the hotel, can access all that information with no problem whatsoever.
Unfortunately, this attorney, had first hand knowledge because his wallet was stolen last month. Within a week, the thieves ordered an expensive monthly cell phone package, applied for a VISA credit card, had a creditline approved to buy a Gateway computer and received a PIN number from DMV to change my driving record information online.
Here is some critical information to limit the damage in case this happens to you or someone you know:
1. We have been told we should cancel our credit cards immediately. The key is having the toll free numbers and your card numbers handy so you know whom to call. Keep those where you can find them.
2. File a police report immediately in the jurisdiction where your credit cards were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation.
3. However, here is what is perhaps most Important of all. Call the three national credit-reporting organizations immediately to place a fraud alert on your name and Social Security Number.
The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.
Now, here are the numbers you always need to contact about your wallet and contents being stolen:
1.) Equifax: 1-800-525-6285
2.) Experian (formerly TRW): 1-888-397-3742
3.) TransUnion: 1-800-680-7289
4.) Social Security Administration (fraud line): 1-800-269-0271
Unfortunately I will be out of town this year for the Coronado 4th of July but I wanted to encourage you to participate in the 49th annual rough water swim. The event starts at 9am and check in time is at 7:30am. Then you can go over to the famous Coronado 4th of July Parade. Proceeds go to the great cause of teaching swim!
Here are a couple of videos of me promoting the 48th annual event:
To sign up you can email firstname.lastname@example.org or you might be able to just show up
Have a safe and fun 4th of July Weekend! – Bill Lyons