If you could design the most perfect financial product, what would it be? We’re gonna do it today. Stay tuned.
From Philadelphia, the home of the Liberty Bell, Financial Freedom Radio starts now. Here’s your host, Raymond Jewell.
Good morning everyone and welcome to FinancialFreedomRadio.com. How was your weekend, Steve?
My weekend was great and it’s afternoon, Ray. It’s not morning.
What hemisphere am I in?
I don’t know, but remember we launch this show Fridays at 2 p.m. So people are seeing it Friday afternoon.
Oh yeah, but we’re shooting it on Monday.
Well but we’re still shooting it in the afternoon. My weekend was great. How was yours?
Good. Enjoy your daughter?
Yeah, my daughter came up to visit for the weekend. It was great.
So you’re gonna love this show. Before I forget, please like, share, and ring the bell. When you ring the bell, you will be alerted when we do these and you won’t have to seek them out if you’re doing that. That would be a great plus if people were seeking these out, right?
They are. We’re attracting people.
Are we getting more?
We are. The numbers are going up really good. It’s been a good steady stream of shows so far.
So I promised that I would talk about life insurance today and the benefits of it. We’ll get to that. So today, we’re going to talk about the perfect financial product and what it would look like if you were to design it. I’m gonna walk you through it. If a financial institution came to us and said we want to design the perfect financial product, what would it be? We would have a choice of designing it so that it satisfied everything we’re talking about and help eliminate all the eroding factors and all that stuff. So let’s go through that now. Even though we’ve said no product will ever make you wealthy alone, it has to be coordinated and integrated together. We’re going to talk about creating a product that does that. It’s the ideal world. So, we’re gonna look at designing our perfect financial product.
Number one, what do we want our perfect financial product to do? Let’s say that we want to create a savings account that has a guaranteed rate of return. It never goes up or down. That we have a place we can put our money into that will always be guaranteed never to go backward. So if the market crashes, it never goes backward and in addition to our guaranteed growth which we want to be based on efficiency. So we want our growth to be guaranteed and based on efficiency and I’ll explain that in a minute. As we save our money, if we ever become disabled, we want the developer of the product to pay our savings deposit for us. That would be ideal. So we’ve got a savings account we’re putting money into our ideal product, our ideal world, and we want that money going in on a systematic and ongoing basis. If we ever become disabled, we want that developer of the product that we’re getting to develop our ideal product to continue to pay that money for us if we ever become disabled. So there’s continuity there, it never stops. It continues while we’re working and if we ever become disabled, it continues then too. If we ever want to use our money, we want to be able to use it without losing growth. Remember, we’ve gone over use and growth simultaneously? If we take our money out to use it, what do we give up? We give up growth on the money. So while we take it out and use it, we want to continue to have it grow. It’s our ideal product, we’re designing this.
As our account matures, the growth becomes greater. So when you make your deposit each year, you end up with your values doubled. In other words, when you make a deposit, your account doubles on an annual basis. So, you’re not only getting a guaranteed rate of return, you’re getting paid the additional money and that’s going to be paid. We want the developer to give us those dollars based on the efficiency of the company. So as they take money in, to pay us our rate of return, we know that they’re going to use the interest to grow their business. If they don’t use the money to grow their business, we want them to give it back to us, a dividend. We want to have a very strong internal rate of return. It’s not subject to market fluctuations. So our guaranteed rate of return is built into our product, our ideal product. If the market goes down, our dollars in our ideal financial product don’t go down, they stay the same. So when the market collapse and people lose money, we want our ideal product to stay there. Again, ideal product, we’re creating this.
So we want to have a strong internal rate of return that is not subject to market fluctuations. We want to also have an external rate of return. If anything ever hurts us financially, for example, death. If we ever die prematurely, we want our heirs to get many many exponentially more money than what we’ve got in our savings account. Remember, this is ideal. So if something were to happen to us prematurely, our heirs will get exponentially more paid back to them then what we have in our account. We want an external rate of return and what we call an eternal rate of return.
So in our internal rate of return, as we’ve said, we want the account to never go back so we don’t have to worry about financial markets. Our external rate of return we want our ideal product to pay our family exponentially more than what we have in the account. So we want the money to be paid to our heir’s income tax-free and outside of probate. Outside of probate means that lawyers don’t get involved. Also as we grow older, we want our ideal product to make sure that when we pass, when we leave this wonderful planet, our assets are protected. So whatever we have saved over here, we don’t want our heirs to have to touch it because over here, we want to have our ideal product give us protection against our heirs having to spend the assets over here. We want the money to come in here because over here, the government’s got to take taxes or anything if somebody dies. They’re going to take estate taxes and all sorts of things. So we want that paid upfront. We want our ideal product to pay for that for us. Over here, in our ideal product, it’s called asset insurance. We want the developer of our product to pay all those other costs and everything that we incur over here.
We want our ideal product to offset inflation. The inflation we call as a stealth tax. On some other shows, I’ll show you how inflation can really hurt you. I think we did it a couple of shows ago where you saw the calculator and we actually showed you where inflation would take its toll. We want to make sure that our perfect ideal product beats markets long term, short term. So I’ve just laid out the ideal financial product. We all know that financial institutions don’t work for free. Let’s back up and look. We know that they don’t work for free. We know that they’re going to operate under the four basic rules. So when we work with our ideal product, we’re going to tell our developer, look you keep every deposit for the first year to cover all your cost and all that stuff that you do and from the second year on, we’ll let you take just a tiny little bit, but after a couple more years, you get nothing and we get it all. But you’re guarantees have to be that we’ll never ever ever ever ever lose another dime as long as we live.
So we make sure that the developer of this product guarantees that we never lose another dime. We’re going to let them get their little profit upfront, but we want to be guaranteed that after a couple of years, they don’t take any more, that we get all of it and we never suffer any losses due to any market fluctuations, any changes, and on top of that we want a guaranteed 4% rate of return. We want that written right into the contract. I don’t care if the interest rates are 0, we want you to pay us 4%.
Remember, this is an ideal financial product.
This is pie in the sky is what this is.
Just play along because I’m just creating an ideal product.
Oh, I’m playing all along, but I’m waiting for the shoe to drop.
In addition to that, we want, and I talked about this earlier, we want you to pay us dividends on our money. So you take the money in, you invest it, do whatever you do with it, and you run your business, your financial company, and then what you don’t use to run the company, we want you to give it back to us in the form of a dividend, tax-free. Still with me, Steve?
Yeah, I’m just waiting for you to say this is all make-believe land.
So we want to make sure that we stay in our ideal product. So we want that dividend to increase over time.
I can’t think of a financial company on the planet that would agree to this.
Everything is contractual. So, the shoe that’s dropping, I just explained whole life insurance.
That’s what it is. That’s what it does. That is whole life insurance in a nutshell.
That seems too good to be true.
It’s been going on for years, but will the financial world tell you that? No.
Well, I can understand why. That doesn’t serve their interest at all.
So why would they sell that?
They’ve been selling it for years. Wealthy people have been putting money into these things for years. People that are not so wealthy have been putting money into them. Life insurance companies are the only companies to be able to practice what is called adverse selection. They can pick and choose who they want and there are different types of companies, there are mutual companies that pay dividends to policyholders and their stock companies pay dividends as stockholders. So you want mutual companies. There’s some very good ones out there and there’s some not so good ones out there. In all cases in the ideal product, if you’re a company and you’re ten years into it, you’re getting some really good rates of return. The financial people don’t understand it. Dave Ramsey’s of the world don’t understand it. All these big writers want you in stocks because they want you up and down, they want to control you. That’s one of the reasons why. Another reason is they don’t understand the economics behind it. Remember, there are very few eroding factors in a whole life insurance policy. The money that goes in there that you pay your premiums is after-tax dollars. So when you take your money out, the first money coming out is tax-free because you already paid taxes on it. Your dividends are returned to you cash free because that’s considered an overpayment. So there’s a lot of things that are to the benefit of the consumer, but you won’t hear it from a financial planner because they want you in stocks and mutual funds and all their crazy cockamamie stuff.
It’s too simple. If you’ve got a life insurance policy, you’ve got essentially a trust document. If that’s all you have, you can beat the odds. My insurance policy have beat the markets for the last 40 years, 35 years. So that’s it.
It just seems too good to be true.
Well, that’s what it is. Either buy into it or not.
So why isn’t everyone doing this? Why isn’t every person getting a whole life insurance policy if it’s that great of a product?
Because they don’t know. They bought into the mantra of the financial planners. Do you see why I have an ax to grind with them? They’re nice people, I’m sure. They’ve just been brainwashed by the financial institutions to go out and brainwash the consumers. How many financial ads do you see on TV?
I see tons of them, but they’re pushing the same products. I’ve got tons of questions now. So if it’s such a great product financial planners don’t know about it, or they don’t want to sell it because it doesn’t benefit them?
It’s very hard to explain to a consumer because a consumer has been told that it’s been bad. So it’s very hard to explain it to a consumer. They’re not willing to take the time, number one. Number two, they’re not running with macroeconomics models. They want the money under management so they get paid management fees and hidden fees and charges and all this kind of stuff. You’re right by one of the parts you said, a lot of them don’t know. You don’t know what the financial planners don’t know.
It just seems like a no brainer that everyone should have one of these.
Do you have any more questions?
No, we just need to set up a time now where I need to get one of these.
They try all these convoluted ways to get you to put money away and they give you the allure of funds and stocks and all that kind of stuff. When stock markets go up and down, we saw what happened to people in the stock market. It took a week and the thing crashed down 10,000 points, I think.
To me, it seems like the stock market is a quick win, adrenaline rush type of system. This seems to me like a long-term. As you said, the first couple of years, you’re not going to make any money. You’re gonna be basically giving them money. This is more like a long-term, slow-burn thing and maybe that’s why it’s not as sexy as somebody who could say I gave this guy $1,000 and he turned it into $10,000 overnight. Then they don’t tell you that next week that $10,000 went down to $50.
Remember, you’ve seen me show the loss of time and 20-year loss took somebody from a million and three down to $300,000 now in the same window. You go to a party and tell somebody you have whole life insurance, they’ll laugh you out of the room and they don’t even know. Insurance companies will try to talk you out of it to say u-turn. Because it’s a quick down and dirty sale because people know they need insurance, they just don’t want to pay for it. Well, if your costs are in the first two or three years and then you don’t have any cost, everything’s growth, then what’s the cost? There’s no cost. You can have a death benefit at no cost. I’ve got lots of insurance because I’ve been in my models. I have some retirement plans and stocks and that kind of thing. I’ve got insurance and I’ve become my own banker.
That was one of the things you said to me when we first met was you gave me that book Be Your Own Banker. It never really sunk in. I’ve told you since we started this show, you were going to have an episode that was going to go viral and I now believe absolutely this is the one because the information you’ve given in this was absolutely eye-opening to me. You’ve explained it in a way that I did not understand before. We need to be singing from the mountaintops. If anyone wants to have real financial stability for the long haul, they need to be looking into something like this.
Sure, it just depends on how you tag it.
Well, don’t start down this tech road with me. Your fascination with hashtags has made me crazy lately. You stick to the finances, I’ll stick to technology.
Okay, well then I just hope many people see this because this was a long time coming. I was reluctant to do it, but I’m glad I finally did it and got it out.
Very valuable information today.
This behind our wider financial planners keeps running red lights. You see why they’re running the red lights. They see people fail and you just don’t understand why. If you get to age 65 or 70 and you may have 2 or 300,000 dollars sitting in all life insurance policy, you’ve got about a half a million dollars of the death benefit. You’ve gotta access capital. That is you’ve not had to recoup time. If you just put away a little amount each year and start it at like age 20, what’s that translate over time? It’s huge. You have to look at what’s the value of money. You could have a million dollars in a savings account or some kind of an account at age 65 or 70, you may only have a spending power of three or four hundred thousand dollars.
So, I want to thank you all for coming and downloading. Remember, share this video, like it, and ring ze bell. Ding ding ding. We need some sound effects here, Steve.
I’ll work on it.
Take care. God Bless. We’ll see you back the next show. FinancialFreedomRadio.com.
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