Friday, September 28, 2012

What If Everything We've Learned About Saving Money is Completely Wrong? is completely wrong?

Most households work on accumulating assets by focusing on how much of their annual budget they can save.  Although the goal may be 10% of income, the average savings rate for an American family is probably closer to 5%.

Now consider that the average American family is paying 34.5 cents of every take home dollar on lifestyle expenses.  Examples of such monthly expenditures include mortgage/rent, car payments, food, utilities, entertainment, etc.

Which of the two categories is bigger on an annual basis:  accumulating savings or lifestyle expenses?

It's an obvious answer.  Well, how come we focus on the smaller number then?  Perhaps because we've been conditioned by banks and Wall Street financial advisors to do so.  I know we are not taught anything in school about how money and finance works.

If we can accept that everything we buy is financed (we either pay interest to a 3rd party like a bank or finance company, or we give up the ability to earn interest by paying cash for things), doesn't it then make sense to realize that our need for financing our lifestyle is far greater than our need for saving?

From this new perspective we should then consider how to save enough money in order to solve our need for financing in our lifetime.  The perfect place to store your wealth in order to solve all your financing needs happens to be a dividend paying Whole Life insurance contract because when it is structured correctly, you reap the following benefits:

• Will provide you with a guaranteed return, without risk of principle, which means the amount will never drop.
• Will grow your savings by a competitive annual rate of return.
• Will enable you to take out your money whenever you want, without penalty.
• Provides complete protection against creditors, so you’ll never have to worry about losing your money due to a lawsuit or bankruptcy (in most states).
• Unlike 401K’s or IRA’s, there’s no limit to how much you can invest.
• The money can be used as collateral for the purchase of a home, etc.
• This strategy offers extreme liquidity so you can have your money in your hands within a few days.
• Provides you access to your money in the event of a disability.
• Allows you to “be your own bank”, so you’ll be able to buy your home, cars, and other large purchases from yourself, so you earn the interest instead of a bank.
• Allows you to pull out 100% of your money TAX FREE when you decide to retire.

To learn more, visit or contact me at (925) 386-6639.

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