That’s what this NY Times article claims…
What do YOU think?
That’s what this NY Times article claims…
What do YOU think?
I’ve dealt with the “hottest” (I know, it’s life insurance) product booms and busts for all my career. I’ve always been leery of products that promise amazing results (Variable Life for example), and always found they don’t live up to the hype.
Anyway, these days Indexed Universal Life is the hot one, and I’m once again reviewing the merits on behalf of a client. In short, there are MANY issues and concerns, and you should go in wide-eyed and well-informed if you ever buy one of these.
Here’s an excellent article from The Bishop Company explaining:
One thing no one talks about in my business is the enjoyment clients bring THEM. Yes, we’re paid to help our clients. Maybe I’ve been lucky, but one of the things I find most valuable about my work is the clients themselves.
Here are some examples of clients of mine:
The list goes on and on. They are diverse, which makes it interesting for me. I love getting to know a little about each of their worlds. They also provide valuable resources for me. Believe me I tap into the car guy, and plane guy, the cardiac guy whenever I need them! I hope they sense the enthusiasm I have for not only helping them with money, but in learning about their little (or not so little) slice of the world. I think they do.
Lots of people consider becoming financial advisors, planners, insurance agents, etc. and many try. Also, many fail. I’ve made it, beating the odds, but why?
First, I think I had the right idea about WHY I was doing it.
When I started, I had one ultimate goal: to build a career that would provide an above average and stable lifestyle that would pay for my kids to go to college. That was it!
Second, I had a few lucky breaks in the first few years. I got just the right clients, at just the right times to pay the bills, make my minimums and live to fight another day.
Third, I had just enough of a network to get in at the right firm. I never paid much attention to building a network before, but organically, I guess by being a decent enough guy, I had built a small but quality one. One of my connections got me into the firm I started with. If I hadn’t started there, I’m not sure I would have made it at all.
Fourth, I did work hard. Now I’m not the type to brag about this. I’m sure there are plenty of people who worked harder than I did, but I know I worked as hard as I could. Till I was cross-eyed. Daily. Especially those first few years.
Fifth, I was brave. I’d be willing to go to networking events alone, cold call people, chat up friends, family, my doctor etc. I was not willing to fail because I was too chicken to prospect. These efforts rarely worked out, but they did just enough, and gave me confidence that I DESERVED to make it, because I was doing everything I could.
Sixth, I invested money. Early on, I allocated 10% of my income (when I was still eating Ramen and Pork n Beans for dinner) to support staff and marketing costs.
Finally, I just believed. I asked “Why not me?” regularly. I had plenty of ups and downs, and almost quit numerous times, wishing there was an easier way, but I’ve stuck it out, and I’m glad I did.
I believe I provide a lot of value. I’m honest and fair to clients, and I legitimately care about them and their financial needs. Money is a critical part of anyone’s life, and it’s a pleasure to be given the responsibility to be the one who helps them win.
For years, investors have been sold, and have been buying BIG time, the notion that active investment managers DO NOT beat the indexes. The average fund manager doesn’t beat the index, and they charge fees to do so, so they cost you money to get lower net returns!
This all made sense, as EVERY index just went up and up and up since the recovery from the Great Recession.
I said all along that this flock to passive investment was a bubble in itself, exhibiting typical bubble behavior. It was a bubble not to an asset type, but to a strategy that SEEMED to be different, and better. Active managers and hedge funds have been tested, questioned, doubted and punished in the form of net outflows for years.
Now let’s be clear: MANY mutual funds and hedge funds deserved to be squeezed out of existence. Low quality or expensive funds could not stand up to the pressure, and folded or shrunk, or changed their ways.
But as expected, the flock to passive has been overplayed. CNBC reported $21B in ETF outflows during last week’s selloff. As prolonged volatility persists, and the market staggers, confidence will fade, stocks that have been along for the market ride will struggle, and active managers will show their value again.
In fact, it may already be happening, as early indicators are that active managers delivered on the promise they have made all these years: When things change, we’ll shine, so stick with us.
Being of Northern European heritage (primarily), and more importantly, having good relationships with my cousins in Norway, and my wife’s in Denmark, I’ve had a lot of first hand opportunity to observe how relaxed, sane and happy these people are. They’ve traveled here to visit us, and we’ve been overseas to be with them, and I think I’ve come to some conclusions about them.
Now this probably doesn’t surprise you. You’ve seen the happiness surveys, consistently revealing how European, particularly Northern European, and more specifically Nordic people are the happiest.
The usual reasons why are explained, as they are here by CNN, but I’m a financial planner, concerned with not only financial success for my American clients, but also the psychological and emotional enjoyment of life. In short, I want my clients to be relaxed, confident and calm. What good is a successful financial life if you’re stressed out all the time?
So here’s my observation (from a Financial Planner’s point of view) of why my Nordic cousins are so happy.
See the one word in common for each of those reasons? Guaranteed. Because of the guarantees they have, they don’t worry about unemployment, getting sick, being broke in retirement or becoming too sick or hurt to work. Guaranteed, guaranteed, guaranteed.
Now I don’t think the guarantees themselves account for everything. Surely what they choose to DO with those guarantees has something to do with it, right? So what do they do (according to my unscientific observations)? Travel, spend time with family, learn about and enjoy good food and wine, and learn about the world and it’s cultures. Sounds pretty enjoyable.
It’s makes me wonder: How would life change if YOU had more guarantees? How can you replicate, at least to some degree the sense of security the Nordics have, such that YOU would enjoy life more like they do, and be happier?
Which leads me to some of the most un-sexy, least appreciated and most maligned group of financial products on the market.
Whole Life Insurance: Derided as “expensive” (nonsense) and “commission heavy” (also nonsense), they in fact offer guaranteed premium rate, guaranteed death benefit, guaranteed cash values and guaranteed growth thereon. Obviously serves as protection in the event of death, but also can provide ready cash, education funds, or a supplemental retirement income.
As I write, the markets are melting down and assets are seeing large price decreases worldwide. I’m sure glad I own some of this stuff, which is contractually guaranteed never to lose value.
Income Annuities: A guaranteed paycheck every month for as long as you like. An opportunity to add onto Social Security payments, or to replicate that friend’s pension you’re so jealous of. All my clients who are preparing for retirement are shown what income annuities do. They’re fairly simple. They look at your gender and age and determine how long an “average” person like you will live. Then they ascribe some interest to the numbers, and pay you for as LONG as you like, and even beyond your death (if you want to get funky). Yes, yes, I know “what if I die early and don’t get all my money back?”. There’s a provision to return all the unused money if you want. Guaranteed :-).
*Caution: do NOT confuse income annuities with “Variable Annuities” or “Indexed Annuities” with income riders and bells and whistles. These are the complex, difficult to understand, and expensive annuities you have heard of. They should be dealt with carefully. But they are NOT what I’m talking about there.
Disability Insurance: First of all, know what you’ll get if you get disabled. If you think Social Security will pay you, read the fine print. You have to be totally f—-d up to get any of that. Also, your company plan may suck. I recently reviewed plans for a lawyer at a big-time law firm in NYC, and a Co-President of a major TV production company in LA, and their plans are horrendous. In both cases they have the “McDonald’s drive thru” definition of disability after on year. Meaning if you are capable of sitting in your wheelchair and taking orders at Mickey D’s, they won’t pay you anymore. Anyway, make sure you have coverage, and GOOD coverage. Get a personal, private insurance plan if necessary. They have the best provisions. Once you know you’re covered in this regard, you’ll be more relaxed.
Yes, this and Whole Life cost money. So put your big boy/girl pants on and take care of it. You’ll learn to live without the money you’re contributing to enhance your happiness.
Let’s do it!
I grew up in a humble and unstable financial situation. We didn’t have money. Dad was in sales. Mom worked in bars and restaurants. There were ups and downs.
I also didn’t know many business owners. My godfather owned a two-person plumbing business, and I knew a shady guy who owned a summer camp. But most of the people I knew worked for someone else, and the highest aspirations I heard most people talk about were to become cops or firemen.
So when I dropped out of college and needed a job, and got hired as a Domino’s pizza delivery guy, I met the first business owner who made an impression on me.
Matt was an ex-marine who used his savings to acquire this Domino’s franchise. He wasn’t even from the area, but moved here to try to make it as a business owner. His goal was to make this store successful and acquire more.
Matt was energetic, focused and positive, and here’s a few things I learned from him.
When I look back, I can see how my experience with Matt helped move me toward a future on my own, as a business owner. My direct experience with someone I respected, at a critical time in my life, helped me not only learn a few key lessons, but see a future for myself that would be satisfying, challenging and fulfilling.