We want to tell you a story about a client we had in recently.
Most people don't know that we do 401ks, IRAs, savings accounts, health insurance, auto insurance, home insurance and many other lines.
We have many different insurance and financial planning options.
The story here is we had a client that came in with $140,000 IRA from when he left his employer. He had this money and wanted a different option. Here's the issue, it was in a 401k, in mutual funds and when he brought in his statement, his statement said the client was making 3.24% and it also said the fund was making 11.1%.
Here is Tyler to talk about how that works:
Since it’s March Madness right now, I’m going to use a basketball analogy.
Let’s say you are the point guard on a basketball team and you had an decent game but your team still ended up winning. Your individual game-play didn’t cause your team to lose, but you feel like you could have done better.
That’s where our client sat with his IRA. The fund as a whole knocked it out of the park! 11.1%! But our client only did 3.24%... Which we can outpace with a 100% guarantee. We don’t want to say that these funds are deliberately deceiving its customers with these numbers, but it should make you think.
The biggest issue with the Mutual fund statement is that they show you how the fund is doing before they show you how you did personally. The fund sounds like it did awesome! but you and I know that it was really what the team did.
The problem with this 3.24% is that it’s in a 401k or IRA, and that money is all taxable. He's going to have to pay tax on that money yet and it only really made 3.24%
This barely outpaces inflation!
There's got to be a better way.. There is a better way!!
When you talk to most financial planners and people that are going through your financial plan, they talk about risk. There's a triangle diagram that describes it. If you're in the stock market with mutual funds, you're taking on more risk. The only issue with that risk is you take all the risk. When we go through a plan like we are describing, we like to look at the guarantees.
Everything on the bottom of the triangle diagram, such as health insurance, life insurance, savings, long-term care, disability, home insurance, bonds, and building equity.
Because we are insurance agents, we look at risk for for what it is.
The issue we have with it is most people say “I'm making 3.24%,” but we know that we can get them 3-5% on their money and we can make it TAX FREE!
By the time we put this together, we can show him that he gets long-term care insurance for the nursing home, he gets life insurance, and he gets a form of health insurance with this plan that we go over for financial planning. Plus it's all guaranteed!
You don't have to worry about market downturns and you don't have to give up the 3.24%. You can actually do better than 3-5%.
What we don’t like about the 11.1% is it deceives people into thinking that they are making this great return, when it is really the Fund that made that return .
There is a better way!
Here’s a farm analogy, lot of people say that putting money in a 401k or IRA is tax deductible and they get to tax deferring the money.
As cattle farmer what would you rather have happened? Have your seed taxed or have your crops taxed?
Many farmers would rather have their seed taxed than their crop taxed. So when we put it into a product like what we have at the bottom of the triangle diagram
Yes it is taxed money but it will grow tax free and you will withdraw tax free.
So like we said, would you rather have seed taxed or crop taxed
You would rather pay the tax up front. A lot of people talk about Roth IRAs and we do the same thing with Roth IRAs and other products.
If you have any questions, just give us a call. We really appreciate you guys putting your trust in us.