The Great 401k Myth

The Great 401k Myth
Six Reasons Why The 401(k) May Not Be in Your Best Interest

The great 401k myth has been perpetuated over the last 30+ years from good intending radio entertainers to trusted advisors. Unfortunately this utopian, politically motivated, economic view of your financial future originates from the government and big banks, and the 401k myth has been propagated to the point of epic proportions.

401k myth

The Great 401k Myth

“Myths which are believed in tend to become true.” ~George Orwell

What makes the 401k myth so destructive is that it is based on a scarcity mindset and it is being perpetuated from generation to generation. When we embrace the scarcity mindset we are buying into the belief that our resources are limited.

In order to achieve our maximum economic potential we must break away from the boundaries of traditional financial thinking and challenge our minds to live a life of abundance. An abundant life is developed through action and practicing our God given talents and abilities. Our actions are produced when our confidence and thoughts  in our minds are based on truth and specific knowledge in that area. As we increase our specialized knowledge we increase our ability, and we are free to make our own decisions and choices.

In this blog we’ve enlisted the specialized knowledge, opinions and talents of 2 bestselling authors, financial expert Pamela Yellen and CPA, Bryan Bloom. Yellen developed Bank On Yourself® website and authored the book of the same name. Bloom authored the book series, Confessions of a CPA.

The 401k Myth

Here are Six Reasons Why 401(k)s May Not Be in The Best Interest of Your Financial Future

Reason #1: The Tax-Deferral Myth

In our immediate-gratification society, deferring your taxes by funding your 401(k) sounds so good.

But when the tax man eventually comes calling, he won’t ask you to pay what your tax liability would have been if you’d been paying taxes all along. He’ll tell you what your tax liability is at the time your taxes are due.

So we ask our clients a question: Can you tell me what your tax rate will be 30 years from now? Didn’t think so.

And 89% of the people surveyed believe tax rates can only go up over the long term, due to our country’s unsustainable debt and aging demographics. Unfortunately, if tax rates do go up and you’re successful in growing your nest-egg, you’ll only be paying higher taxes on a bigger number.

That destroys the whole “tax-deferral” argument.

Reason #2: The “Free Money” Myth

Who doesn’t love getting “free money” in the form of the 401(k) employer match? Do you really believe your employer is giving you something for nothing?

The Center for Retirement Research did a study based on tax data and found that for every dollar an employer contributes to your 401(k) match, they pay 90 to 99 cents less salary on average. Whoa! Doesn’t sound like such a good deal now, does it?

Plus, you don’t even get all of the employer match during the first 4-6 years you work for the company – you need to be “vested” first. If you leave your job before that, you typically don’t get the full match.

And according to the Bureau of Labor Statistics, the average time a person stays on the job is only 4.6 years.

If you accept the employer match, even if you have elected the Roth 401(k) option, the employer match is taxable in the future. What if that match results in your Social Security being taxed, when without it your Social Security would have been tax free? Perhaps a quarter of a million dollar mistake on top of the taxes due on the match distributions!

Oops! There goes the employer match “carrot.”

Reason #3: Fees that Devour Your Hard-Earned Money

In spite of the rules passed a few years ago requiring better 401(k) fee disclosure, surveys show most participants still have NO clue how much they’re actually paying.

But according to Brightscope, participants in small plans pay 1.9% in fees annually, and participants in large plans pay 1.08% per year. If those fees sound like “small change” to you, then here’s a wake-up call: Fees of only 1% per year can slash the value of your savings by 28% over the next 35 years, according to the Department of Labor.

Poof! There goes nearly one-third of your hard-earned dollars. I can assure you somebody is getting rich on this, but it’s not you!

Reason #4: Funding a 401(k) is Like Putting Your Money in Prison

It’s like a trade with the devil: Give me all your savings in return for tax-deferral (a scam as we’ve seen) and an employer match (another scam), and I’ll keep it under lock and key for you until you’re 59.5 years old.

You have to beg for permission to use your own money! There are all kinds of restrictions and penalties for accessing your own money.

This is one of the biggest reasons people have large credit card balances exceeding 18% interest costs. Hope those 401(k) dollars are earning at least 18% after fees!

Reason #5: The Myth of Market Returns

You’re told that over the long term, you can do well in the stock market. But over the last three decades, the average equity mutual fund investor has earned only 3.98% per year, beating inflation by only 1.3% per year, according to the DALBAR studies.

Yet Wall Street has brainwashed us into believing we have to risk our money in order to get any kind of decent returns. And so we continue to blindly fund our 401(k)s like lemmings following each other off a cliff.

Our strategies reveal you don’t have to risk your money to get a decent equivalent return. You can reach your financial goals and dreams without taking any unnecessary risk.

Reason #6: After Decades of Being Lab Rats in the Great 401(k) Experiment, Most Pre-Retirees Still Don’t Have Enough Saved

Even the “father” of the 401(k), Ted Benna, has called it an “out of control monster” that should be blown up.

How much more evidence do we need that 401(k)s are not the solution they’re touted to be? The more accurate name for a 401(k) is a hope and pray plan.

So are there any good alternatives to the 401(k)? The answer is YES, but of course you won’t hear about it from Wall Street.

Here Are 8 Reasons Why the BreakAway Approach Makes an Excellent Alternative to Conventional Retirement Plans…

1. Guaranteed, predictable growth and retirement income – with no luck, skill, or guesswork required.

2. No volatility. Your plan doesn’t go backward when the markets tumble. Your principal and growth are locked in. It’s not subject to market risks.

3. You’re in control. You have control of your money without government penalties or restrictions on how much income you can take or when you can take it.

4. Tax advantages. You can access your principal and growth with no taxes due, under current tax law.

5. Liquidity. Your cash value can easily and immediately be tapped for any purpose at all, and your plan can continue growing as though you never touched a dime of it.

6. Fees don’t compound against you. Studies show that the fees in traditional retirement plans can consume as much as one-third to one-half of your savings over time. With our plan, all fees have already been deducted from the bottom-line numbers and results you’ll get.

7. Income tax-free legacy. The death benefit is likely to be many times larger than the total amount you’ve paid into your policy. This passes to your loved ones and/or favorite charities income tax-free and without going through probate. If you die prematurely, the death benefit allows your plan to finish funding itself. That won’t happen with traditional retirement plans.

8. Peace of mind. Perhaps the best reason of all: You’ll know the minimum guaranteed value of your plan on the day you plan to tap into it – and at every point along the way!

So, there you have it, why the 401k is a scam and how it has been propagated into the great 401k myth.

Bryan S. Bloom, CPA. Adapted and Updated from the original work done by Pamela Yellen, published as an e-mail titled “Is your 401(k) a Scam?” on July 11, 2017

If you’d like to reexamine your 401k or schedule a meeting, request a financial consultation.

Until next time,
Barry Page, RFC
Barry Page

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives unique financial approach to planning.

401k qualified plans are government retirement plans administered by the Internal Revenue Service (IRS).

“A qualified plan must satisfy the Internal Revenue Code in both form and operation.”

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Declare Independence

Declare Independence

Declare independence by taking control of your freedoms and finances. Our Independence Day, more commonly known as the 4th of July, is when we commemorate the United States adopting the Declaration of Independence and when we declared our independence from the Kingdom of Great Britain.

Traditionally, Independence Day is associated with fireworks, BBQ’s and family. As we celebrate our Independence Day, let’s remember what our independence really means… The colonists rebelled against the British Crown and taxation.

Today, some 241 years later, our country faces a similar situation that would have our founding fathers rolling in their graves. Our federal government is destroying our freedoms and is larger and more oppressive than ever.

declare independence

The Declaration of Independence

When you consider the FBI, CIA, NSA, TSA and other US Intelligence agencies, they are not protecting us from foreign insurgents, they are stealing our privacy. We’ve become addicted to technology while our every move is being tracked and recorded.

The Internal Revenue Service taxes our earnings and the government machine spends the proceeds with reckless abandon. Tax revenue is squandered and necessary obligations go unfunded.

Then there’s the Federal Reserve. Since it’s creation in 1913 our dollar has lost 98% of its value. This alone is tyranny stealing from the citizens. Inflation is a stealth tax that robs us

It’s time to declare our independence from an oppressive government and take control of our lives and finances. This revolution can be peaceful and begins with love and a simple message.

Declare Independence

  • We must reclaim our liberty and educate others.
  • We must find the spirit of independence again and unite in our efforts.
  • We must stand up against an oppressive government by getting involved.
  • We must declare our financial independence by taking control of our finances.

To learn more about what you can do now to protect your freedoms, request a consultation.

Until next time, Declare Independence!
Barry Page, RFC

Barry Page

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives using a unique financial approach to planning.

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The Federal Reserve – The Creature from Jekyll Island

The Federal Reserve
The Creature from Jekyll Island
Book and Audio from G. Edward Griffin

The Creature from Jekyll Island-A Second Look at the Federal Reserve is a non-fiction book written by G. Edward Griffin. In this posting we will provide an opportunity for you to download a shortened audio version of the book to help you gain knowledge of how the Fed was created and what it stands for.

The Creature from Jekyll Island: A Second Look at the Federal Reserve

The Creature from Jekyll Island

Where does money come from? Where does it go? Who makes it? The money magicians’ secrets are unveiled. We get a close look at their mirrors and smoke machines, their pulleys, cogs, and wheels that create the grand illusion called money. A dry and boring subject? Just wait! You’ll be hooked in five minutes. Reads like a detective story – which it really is. But it’s all true. This book is about the most blatant scam of all history. It’s all here: the cause of wars, boom-bust cycles, inflation, depression, prosperity. Creature from Jekyll Island is a “must read.” Your world view will definitely change. You’ll never trust a politician again – or a banker. (from Amazon)

Federal Reserve – The Creature from Jekyll Island Audio

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Private Family Banking

Private Family Banking

Federal Reserve Banking

Federal Reserve Banking

In case you don’t know, The Federal Reserve is not ‘Federal’ and they do not have adequate ‘Reserves’. As Edward Griffin states in his book, they are a banking cartel.  You may also have figured out that the federal government is a poor steward of our money. Yet every day, good people turn their hard earned money over to the big banks through government retirement plans, leaving them vulnerable to theft and confiscation.

For our clients, financial independence means, ‘freedom’ and ‘liberty’ when it comes to finances. And, having a comfortable lifestyle today with the opportunity to create a predictable income in the future. If this sounds like the kind of financial independence you’d like to have, then you can learn more about the Infinite Banking Concept.

When you look at our current system for saving and accumulating wealth, it is heavily weighted in favor of the financial institutions. Our educational system, our accounting system and the financial advisors, are all dependent on the government and these same financial institutions. We have been held captive.

Quotes from others about the book: The Creature from Jekyll Island

“A superb analysis.” -Ron Paul

“This is a murder mystery about the financial ‘murder’ of the middle class.” -Robert Kiyosaki

This may be the most important book you’ll ever read…
But in case you don’t have time to read the over 500 pages, just download the shortened audio version from
The Creature from Jekyll Island: A Second Look at the Federal Reserve
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May is Disability Insurance Awareness Month

May is Disability Insurance Awareness Month

disability insurance awareness month

May is Disability Insurance Awareness Month

May is Disability Insurance Awareness Month. Disability insurance is the most overlooked of the major types of insurance.

That’s likely because many people think a disabling illness or injury will never happen to them. But according to a Life Happens survey, a person has a 3 in 10 chance of suffering a disabling illness or injury that would keep them out of work for three months or more during their career.

Each May, Life Happens coordinates Disability Insurance Awareness Month. This offers you the perfect opportunity to talk about your disability insurance needs.

No matter what you do for a living or where you are in life, there’s always an opportunity to better protect yourself and your loved ones. Think about it… What would happen if suddenly, due to an illness or injury, you were unable to work?

Without your paycheck, how long would you be able to make your mortgage or rent payment, buy groceries or pay your credit card bills without feeling the pinch? If you’re like most, it wouldn’t be long at all: Half of working Americans couldn’t make it a month before financial difficulties would set in, and almost one in four would have problems immediately, according to a Life Happens survey.¹

That’s where disability insurance comes in. Think of it as insurance for your paycheck. It ensures that if you are unable to work because of illness or injury, you will continue to receive an income and make ends meet until you’re able to return to work.

Follow this link to learn more and schedule a meeting; Disability Insurance

#disabilityinsurance #protectyourpaycheck #awareness #disabilityinsuranceawarenessmonth

¹The Disability Survey conducted by Kelton Research on behalf of Life Happens, April 2012

Until next time,
Barry Page

Barry Page

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives using a unique financial approach to planning.

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Retirement Tax Bomb

IRA/SEP/401k Tax Liability

Is your IRA/SEP/401k a retirement tax bomb? Don’t worry, you can parachute out safely using our custom designed whole life insurance plans.

This time of the year families and business owners are pressured into making decisions that they think will “save” them taxes. Accountants and CPA’s frequently recommend to people that they contribute to their qualified plans before they file their tax returns. But, do qualified plans save taxes?

Has your accountant told you that the you can save taxes by contributing to your IRA/SEP/401k? Ask him what will your tax liability be at retirement?


Retirement Tax Bomb

Qualified Plans do 2 things…

  1. They postpone the tax.
  2. They postpone the tax calculation.

Contrary to popular belief, qualified plans do not save tax. Federal income taxes are levied at the distribution of most qualified plans. Analyze the numbers and compare qualified plans to non-qualified plan investments.

Qualified plans are government retirement plans administered by the Internal Revenue Service (IRS).

“A qualified plan must satisfy the Internal Revenue Code in both form and operation.”

Retirement Tax Bomb

Questions to ask your tax advisor:
1. What tax bracket will you be in at retirement?
2. What deductions will you have when you retire?
3. What will your unpaid tax liability be to the IRS when you retire?

In a similar example comparing a qualified plan to whole life insurance, it meant $350,000 difference after 20 years of income. That’s not chump change… Assuming pre-tax investments to a qualified plan (IRA/SEP/401k). The premium to a whole life policy is post tax, and it grows tax-free. The death benefit and loans can be accessed tax free under current tax laws.

The good news is… You can parachute away from these ticking, retirement tax bombs. Learn how to secure your retirement and create tax-exempt income for you and your family. Retire with peace of mind, knowing that you have predictable income and that you are in control of your financial future. Follow this link, Retirement Planning

Are you comfortable having the IRS and the US Government in control of your retirement? All government qualified retirement plans are subject to the ever changing rules of the U.S. Treasury/IRS. If taxes increase your hard earned savings could be at risk, but even if taxes stay the same, do you want more cash-flow?

You don’t have to depend on the government to create wealth and financial independence. Get started today, schedule your personal consultation:

Until next time,
Barry Page

Barry Page

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives using a unique financial approach to planning.

Contact me and discover how to receive tax free income at retirement without using a 401k, IRA, SEP or ROTH.

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For educational use only. We do not provide tax or legal advice.

Will The Government Default or Raise The Debt Ceiling?

Government Default or Raise The Debt Ceiling?

Will the government default or raise the debt ceiling again? The U.S. Treasury Department is now calling on Congress to raise the debt ceiling once again to prevent a government default.

Officially, the current United States debt ceiling expired on March 15th, 2017. The following day, the outstanding debt of the United States was at the statutory debt limit. This means that lawmakers must now decide how to address the nation’s fiscal problems or face government default.

Treasury Secretary, Steven Mnuchin, recently sent a letter to House Speaker, Paul Ryan, on March 8 urging Congress to raise the debt ceiling as soon as possible. The Treasury will begin to take “extraordinary measures” to prevent the U.S. from defaulting on its debt, Mnuchin wrote.

Debt Ceiling - Government Default

Debt Ceiling – Government Default

What Is The Debt Ceiling?

The restraining factor on the amount of U.S. debt is called the debt ceiling. The U.S. Treasury defines the debt limit as the amount of money the U.S. government is authorized to borrow to meet its existing legal obligations.

The national debt is rapidly approaching $20 Trillion. You can check the current status here:

Major entitlement programs, including Social Security, Medicare and Medicaid, make up almost 50% of all federal spending and are only expected to increase in the future as more Americans retire. Entitlements and net interest are projected to consume 100% of the government’s tax revenue by 2030.

Future entitlements will exacerbate our nation’s growing debt problem. As government debt mushrooms it imposes the threat of higher taxes in the future. Currently, just the U.S. spends about $258 Billion, or 6 percent of the federal budget just to pay the interest on the debt.

Why The U.S. Treasury?

The U.S. Treasury was created in 1789, and is the government department responsible for issuing all Treasury bonds, notes and bills. Among the government departments operating under the U.S. Treasury umbrella are the Internal Revenue Service (IRS), the U.S. Mint, the Bureau of the Public Debt, the Alcohol and Tobacco Tax Bureau, and the Secret Service.

Some key functions of the U.S. Treasury include printing bills, postage and Federal Reserve notes, minting coins, collecting taxes, enforcing tax laws, managing all government accounts and debt issues, and overseeing U.S. banks in cooperation with the Federal Reserve.

The U.S. Treasury is spending on average about $2 Billion per day, and they have the ability to issue more new debt. Net redemptions of existing debt not held by the government are more than $100 Billion a month.

The Federal Reserve System was established in 1913, ironically the same year as the IRS. The Fed serves as the central bank for the U.S. and influences monetary policy.

Supposedly, The Department of the Treasury and Federal Reserve work together to maintain a stable economy.

Depending on who you listen to, as the US Treasury sells bonds this may increase or decrease inflation. But, make no mistake, as the Federal Reserve prints more money, this inflates the money supply which is in inflation.

Federal Reserve Inflation

Federal Reserve – Inflation

The negative effects of the debt not only accrue in over time, but they also create a burden on future generations and weaken our economy. Currently each US citizen owns roughly $61,000 of the government debt and each US taxpayer about $165,000.

The government borrows from the Government Securities Investment Fund (G Fund) to avoid running up against the debt ceiling limit. The G Fund is a government account that is used to fund the government on a short-term basis to make up for the deficit spending by the government. The Treasury has “suspended reinvestment” or taken assets out of the G Fund to pay for these other expenses.

Many federal employees are contributing to financing the operation of the federal government whether they know it or not. Assets within the Thrift Savings Plan (TSP) are used by the federal government to help meet expenses.

The TSP is similar to a 401(k) retirement fund. It is utilized by over 5 Million current and former government employees and service members. There are assets of about $480 Billion in the TSP, of which 38% is in the G fund.

History of United States Deb Ceiling

From Wikipedia:
The history of United States debt ceiling deals with movements in the United States debt ceiling since it was created in 1917… The debt ceiling is a limitation on the federal government’s ability to manage the economy and finance system.

  • Prior to 1917, the United States did not have a debt ceiling. In 1917, during World War I, Congress created the debt ceiling with the Second Liberty Bond Act of 1917, which allowed Treasury to issue bonds and take on other debt without specific Congressional approval, as long as the total debt fell under the statutory debt ceiling.
  • In 1939, Congress instituted the first limit on total accumulated debt over all kinds of instruments.The debt ceiling, in which an aggregate limit is applied to nearly all federal debt, was substantially established by Public Debt Acts passed in 1939 and 1941 and subsequently amended.
  • Subsequent Public Debt Acts amended the aggregate debt limit: the 1942, 1943, 1944, and 1945 acts raised the limit to $125 billion, $210 billion, $260 billion, and $300 billion respectively.In 1946, the Public Debt Act was amended to reduce the debt limit to $275 billion. The limit stayed unchanged until 1954, the Korean War being financed through taxation.

In practice, the debt ceiling has never been reduced, even though the public debt itself may have reduced.

Depending on who is doing the research, it is said that the US has raised its’ debt ceiling (in some form or other) at least 90 times in the 20th century.

What would a Government Default mean?

According to many, a government default would destroy the credit system of the United States. The benchmark of interest rates in our modern financial markets are the risk factor on government issued bonds. Therefore creating a high degree of risk around U.S. Treasuries and disrupting many private contracts and government programs.

The NEGATIVES of a Default:

  • Interest rates could rise, because “Treasuries represent the benchmark borrowing rate” for all other bonds. This could mean increased costs for corporations, state and local government, mortgages and consumer loans.
  • The value of the dollar could drop, as foreign investors flee the “safe-haven” of Treasuries. And, the dollar could lose its’ status as a global world currency.
  • The U.S. government may not be able to pay salaries or benefits for federal or military personnel and retirees. Social Security, Medicare, and Medicaid benefit payments might stop, as would student loan payments, tax refunds and payments to keep government facilities open. If this happens, it would be much worse than a government shutdown.

As recently as 2013 many government landmarks were shut down due to Congress delaying raising the debt ceiling.

Government Shutdown - Debt Ceiling

Government Shutdown – Debt Ceiling

A US default could also be catastrophic to the stock markets and disrupt the global economy. However most market analysts describe the risk of default as very unlikely.

To put into context the magnitude of a US default, consider that the U.S. dollar represents 75% of the more than $5 Trillion worth of daily global currency trading.

The POSITIVES of a Default:

Many think a government default is overdue and that we should wipe the slate clean. Just as a fire can destroy a forest while allowing for new growth, this could be a good thing according to some. President Trump has even indicated that a U.S. government default is inevitable. And, if this happens we will have no choice other than to tell our creditors that they are taking a big haircut

And, of course the Austrians have an entirely different outlook on the government debt. If you follow Austrian Economics, they advocate smaller government and less spending. Austrians have predicted a government default and a collapsing economy for years, even suggesting that we cease using fiat currency and return to a gold standard.

Austrian Economist, Murray Rothbard, argued:

The government is an organization, so why not liquidate the assets of that organization and pay the creditors (the government bondholders) a pro-rata share of those assets? This solution would cost the taxpayer nothing, and, once again, relieve him of $200 billion in annual interest payments. The United States government should be forced to disgorge its assets, sell them at auction, and then pay off the creditors accordingly.

How could a Government Default affect you?

To put it simply, if you depend on the government in any way or if your savings are being held by the financial institutions, you will be affected in some way.

Banks will tighten credit and offset losses with higher interest rates on loans. Consumers may be dissuaded from purchasing a new car or a home and this will affect businesses that sell these items.

If you have money in the stock market, a default could be disastrous in the short term. However, just in any situation, many will also profit from the losses of others. So, it depends on how you respond and if you are liquid.

As of this writing, the US markets are down substantially. A one day drop of over 1% in all of the major markets represents substantial losses for all investors. What the future holds is uncertain, but rest assured, the government must get a hold on spending or risk collapsing our fragile economy.

Are you comfortable having the US Government in control of your financial future? All government qualified retirement plans are subject to confiscation by the Treasury/IRS. Whether it be through manipulation of interest rates by the Federal Reserve, or the raising of taxes by the IRS, your hard earned savings could be at risk.

The good news is… You don’t have to depend on the government or the banks to create wealth and financial independence. If you’d like to learn more about what you can do, contact me for a no obligation, financial review. Just follow this link to schedule your personal consultation:

Until next time,
It’s your money, protect it!
Barry Page

Barry Page

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives unique financial approach to planning.

Retirement Income Options

Retirement Income Options
Protect and Maximize Your Cash-Flow

Retirement income options are available to anyone who chooses to seek knowledge and plan ahead. Your options for how you distribute your retirement income are mostly up to you. It all starts with where you choose to store your money. We can’t control government rules such as taxes, but we can control how we save for the future, which will have a tremendous impact when distribute the income.

Assuming that you have accumulated a nest egg for retirement, you will then have choices for the distribution of that income. Traditional retirement planning suggests that you defer taxes for the future. This option may not always be in your best interest.

Do you know what your tax rate will be 30 years from now?

A whopping 89% of the people we’ve surveyed believe tax rates will go up in the future, due to our country’s unsustainable debt and aging demographics. Unfortunately, if tax rates do go up and you’re successful in growing your nest-egg, you’ll be paying more taxes on a larger balance.

In the example below, we’ve assumed that you’ve accumulated $1,000,000 in your nest egg. Regardless of how you got there, in this example it’s either stored in a government qualified plan such as an IRA or 401(k), or in cash-value, whole life insurance.

We are not suggesting that you could withdraw 7% out of your retirement plan that is invested in the stock market without the fear of running out of money, but we have to compare to something. And in most cases you can take a 7% withdrawal from a properly structured, dividend paying, whole life policy.

Retirement Income Options – IRA compared to Whole Life

Retirement Income Options

Retirement Income Options

As you can see, $70,000 of tax free income is much better than $70,000 of taxable income. But, that’s only part of the beauty of this retirement income option.

Other Benefits of Whole Life Insurance 

  • Mitigate the risks of longevity
  • Uncorelated to markets
  • Tax-Free withdrawals
  • Access to capital
  • Inflation hedge

Where you store your money is more important than what it earns. You can plan for your retirement income and maximize your cash flow, contact us to learn how:

Sage Money Radio with Hollis Day Jr and Barry Page

Sage Money Radio with Hollis Day Jr and Barry Page
Alternative Investing – Infinite Banking and Financing Retirement
How to use you life insurance while your alive

This episode aired February 18, 2017
Radio Host and Financial Expert, Hollis Day, Jr, interviews Barry Page, RFC

Sage Money Radio

Alternative Investments “The Best Investments You’ve Never Heard Of”

Infinite Banking

How to use you life insurance while your alive for financing. Private family banking strategies.

Financing Retirement

How you can use you dividend paying, whole life insurance for tax free retirement income.

Create real wealth and leave a legacy.

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5 Steps To Financial Independence

5 Steps to Financial Independence
How To Create Wealth and Freedom

Financial independence is truly that, freedom to do what you want on your schedule without depending on the banks or government. But, what if everything you’ve been taught about money and finance wasn’t true? That’s a bold statement, but when you realize that the deck is stacked in favor of the banking system and the government, you can start to understand.

financial independence

Financial Independence

How you create and store your wealth is your decision. Unfortunately, we’ve been told since birth…

  • Work hard – get an hourly job as soon as you can
  • Go to school – finish grade school, college and maybe get a graduate degree
  • Get a good job – trade hours for dollars and look for benefits like healthcare and retirement
  • Save – contribute 10% or more to your retirement account (IRA, 401k, ROTH, SEP ie IRS Qualified Plans)
    • Defer your taxes
    • Prepay your mortgage
    • Buy term and invest in the stock markets
  • Retire – when pension plans dictate
    • 59 1/2 for qualified plans, 65 full benefit Social Security
    • Reduce your lifestyle, depend on others

So, our decisions on how and where to store our wealth have been corrupted. Unfortunately, these rules and steps were created by the elite, the financial institutions, and the government who enforces them. : (  (Don’t follow those steps)

The good news is… You can change all of that and escape the tyranny. You can begin to enjoy the freedom of financial independence by investing in yourself and your family. It’s your choice!

Where you store your wealth is much more important than the return that it earns. While most Americans are dazzled into believing that they should “invest” in certain financial products with certain financial institutions, they are foregoing their own best interests.

To borrow a cliche, think of it this way. If you had a golden goose that laid golden eggs, would you protect the goose from predators? Of course you would… You are the goose!

When you’re auto and home are required to carry insurance, it’s not really to protect you from loss, it’s to protect the financial institution that loaned you the money.  But, there’s another kind of insurance that can not only protect you from loss, it can protect your money from predators. All the while this specific kind of life insurance allows you access to capital throughout your lifetime and for your family after you’re gone.

So, now that you have the protection part down, let’s talk about finance because cash-flow is what gives us the freedom to do what we want, when we want.

We’ve been taught that debt is bad, and it can be, but you can also use it as a financial tool if you know how. The important thing is to be in control of the terms of the agreement. When you control the banking function, you can determine the terms and make decisions based on your particular circumstances at that time.

Nelson Nash, author of Becoming Your Own Banker, said “You finance everything you buy, you either earn interest or pay interest to others.” In his book Nash outlines how you can use the banking function of a traditional whole life insurance policy to finance your major purchases over your lifetime.

By utilizing The Infinite Banking Concept the families and businesses can recover interest costs they normally would transfer away. This strategy alone can mean millions of dollars to the bottom line of the average family and keep that money in the family.

Great wealth is created by being effective and efficient with your finances. Most self-made millionaires did this in business. Surveys show that he majority of American’s would like to own their own business, but fear keeps them from doing so. There is fear of loss, fear of being successful, fear of failure, etc. But, when you look at successful businesses, there are certain types that have an excellent track record. They follow a proven model, usually franchises.

When you think of starting a business, what if all the fear could vanish because you were using a 200 year old proven model based on actuarial data? What if you were in business with other like-minded, healthy individuals that loved their family, and where each owner controlled their own terms? This Family Bank Business already exists, and if you qualify you can buy in at the level you want!

Whole life-insurance is the financial tool that I’ve been describing. However, it is important that you purchase the right kind, as their are many imitators in the marketplace promoting themselves as whole-life. Infinite Banking and Private Reserve strategies work best with participating, dividend paying, whole-life insurance from a mutual life insurance company. There are only a handful of companies that offer these types of policies and you will want to make sure your agent knows how to build these policies properly, and owns them himself.

Private Family Reserve

Private Family Reserve

Ultimately, we save, invest or create assets in order to someday be able to live off of the income those assets can provide. The difference here is that some of these assets will produce more cash-flow at retirement than others because of uncertainties like taxes and the risk of loss. Distribution is much different than accumulation, so during retirement we should carefully consider assets that can not lose value during harsh economic times and are not subject to taxation.

If you practice these steps, financial independence is simple, and you can do more with less. Typical financial plans are difficult to understand and based on products and variables that you have no control over. Once you discover that you can utilize your God given talent to increase your wealth and cash-flow, you’ll know what to do.

  1. Work Hard and Play Hard – experience life in different occupations to find your passion
  2. Self Educate – whether home school, private school or by personal reading, keep learning
  3. Start a Business – even if part-time, test your skills, learn a trade and earn profits
  4. Save More – save on your own, and invest in income producing assets
    1. Pay taxes on your income once
    2. Utilize your mortgage for as long as possible for protection and benefits
    3. Buy dividend paying, whole life insurance customized for your situation
  5. Retire – on your terms without depending on government plans
    1. Create passive income that does not require physical labor
    2. Enjoy your lifestyle and die on your terms
    3. Pay off your debt with your dead self
    4. Leave a financial legacy of stewardship

What I’ve just outlined for you is the simplest, most effective way to create generational wealth and financial independence. It all begins with education, and it really doesn’t matter where you are in life. It doesn’t have to be complicated and the only person you have to depend on is you. You can start today!

If you liked this post, please comment and share it with others.

If you’d like to learn how to create wealth and cash-flow in your life, follow this link for a personal financial review.

Until next time,
Barry Page, RFC
Barry Page

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives unique financial approach to planning.

How To Save

how to save using life insuranceHow To Save More and Create Wealth 
Why Life Insurance Is The Best Place To Park Money

How to save more and create generational wealth using the power of life insurance. Saving money today can be difficult, especially since in recent years artificially low interest rates have punished savers. The economy has also taken a squeeze on income and ordinary people are saving less and being subjected to unnecessary risk. Thus, the lines have been blurred between saving and investing, making it difficult to determine the best place to park money.

Saving money and investing money are two entirely different things. They have different purposes, and can result in drastically different outcomes. Both are important in your financial strategy and to your bottom line, but before you begin your journey to creating wealth you should make sure you understand the differences between saving and investing.

saving investing

Pigs versus Bulls, should you be saving or investing?

Saving Money

The concept of saving money has been around since the beginning of time, and there are many reasons to do so. A prudent person wants to have their money protected and growing, but that can be a delicate balance. So the question becomes, where is the best place to park your money?

Generally, the money we save should be safe from loss, so most are willing to accept less growth for protection. And, liquidity is important because you want to have access to your money in case of emergencies and opportunities.

There are many theories on how to save and many reasons to save. The simplest of these is just is to put aside money for the future, and having access to capital for an emergency should be at the top of the list. Recent surveys have shown that many Americans live paycheck to paycheck, so if an emergency arises, often times credit is used to pay for the expense.

In my experience as a financial advisor I’ve seen just about every scenario when it comes to saving. It really doesn’t matter how much money someone earns, we all face the same financial problems. And, we all should should have money set aside for a rainy day, or an emergency fund. If you just think about the what ifs in life, there are plenty.

Reasons to Have an Emergency Fund
Home Repairs

There is really no real reason to invest your money before you have an adequate amount of money saved for emergencies. Of course there are differing opinions as to how much money we should have saved in an emergency fund, but in my humble opinion it should be at least 50% of your annual income.

Another, not so obvious reason to save and have access to capital is for opportunities. All of us have come across opportunities that had the potential for profits, but for whatever reason we did not have access to capital at the time. These opportunities may come in the form of investments, but that doesn’t have to mean the stock market. Once you have your emergency fund and your income is protected, then you may want to consider investing.

Investing Money

People invest money for many reasons, primarily it is the hope for a gain. In most cases we invest in assets that can produce a return on our investment. These can be paper assets such as stocks or mutual funds or they can be hard assets like real estate or physical gold. Along with this probability of a return is the probability of loss, so there is risk involved.

The type of investment one makes typically depends on their experience and their comfort level with volatility. The majority of Americans invest in mutual funds, typically through their IRA or 401(k) at work. Unfortunately, people do not always understand exactly what they are investing in or the risks involved. Furthermore, there are so many options and so much uncertainty that most people just turn their money over to financial institutions with little to no knowledge of the underlying investment.

There are many ways to invest money and there should be a balance through diversification. True diversification isn’t owning multiple individual stocks in a mutual fund, it means owning multiple asset classes.

Types of Investments
Stocks and Bonds
Mutual Funds
Gold and Silver
Real Estate

Ultimately, we all want to accumulate more wealth. Whether this money will be used for our lifestyles today, our future retirement, or our children, the purpose of investing is to have our money grow.

How To Save

  1. Pay yourself first
  2. Make systematic savings
  3. Choose effective financial tools

Saving should come first before paying expenses. If you want to create wealth over time you have to pay yourself first. Disciplining yourself to save on a regular basis requires effort and sacrifice. Making systematic savings towards an asset that provides a return, enables compounding and growth. Effective financial tools provide multiple benefits and tax advantages.

Over time, liquidity, use and control of this accumulating asset is what we ultimately should want. Having access to your capital through collateralization will your savings to grow with uninterrupted compounding and by avoiding lost opportunity costs. Transfers of wealth come in many areas, but the biggest culprits are taxes and inflation. The problem with most savings plans is that they do not protect against these eroding factors of money.

How to save more using life insurance

So, how do you  save more and eventually create wealth? Should you save more money or try to get a higher return? Saving more takes discipline and requires effort. Earning a higher return often requires taking more risk. 

One asset that offers protection and growth is dividend paying, whole life insurance. A participating policy from a mutual life insurance company offers multiple benefits not found in other financial products. It provides the perfect balance of protection, savings, growth and liquidity allowing for more effective and efficient wealth creation.

In general, we’ve been taught to save as a percentage of income, and the number thrown around is typically 10%. Unfortunately, most Americans today are only saving about 5% of their income according to the Federal Reserve (see chart). But, what’s worse is that the average American family spends over 30% of their income towards interest and fees.

personal savings rate

Personal Savings Rate

We have and entirely different approach to saving. Our approach is to save at least 20% of your income, and reduce or eliminate debt and wealth transfers.  A properly structured whole life insurance policy offers a safe place to park money and have it work harder towards accomplishing these goals.

Ideally, you want to start saving early in your life and have your dollars compounding over time. Most of us are familiar with the term compound interest, but unfortunately the compounding gets interrupted when we use our money for purchases or expenses. There’s another term used in the financial world when this happens, and that’s lost opportunity cost. Lost opportunity costs come when your money could have been growing, but instead was used for an expense.

The Ideal Asset

What does the ideal asset look like? Ideally we’d like our assets to provide multiple benefits. Typically though most assets offer only a few real benefits. The list below are some of the benefits offered with whole life insurance.

  • Liquidity
  • Safe Haven
  • Competitive Return
  • Creditor Protected
  • Contribution Options
  • Tax Deferred Accumulation
  • Disability Benefit
  • Collateral Options
  • Privacy and Control
  • Use and Access to Capital
  • Critical Illness Benefit
  • Long Term Care Benefit
  • Tax Free Distributions
  • Estate Tax Free

Why life insurance is the best place to park money…

Life insurance is one of the oldest financial tools known to man. The concepts of life insurance date all the way back to 100 B.C. in ancient Rome. It has been tried, tested and proven over centuries. Life insurance is engineered by actuaries and underwritten based on millions of lives.

If you read the major publications out there, you’ll find various opinions on the best places to park money. The most common are, CD’s, money market accounts, real estate and the stock market. And, some people just like having their cash on hand, perhaps in a safe or even under their mattress.

Seldom will you ever hear of life insurance as being a good investment, unless you talk to someone who actually owns it. The reason you don’t is because the financial institutions do a good job at convincing you to park your money with them. Ironically, the very financial institutions (BIG BANKS) that recommend you don’t use life insurance for savings, own more of it than anyone else.

Just as all the major banks own life insurance (BOLI) for safety and guaranteed growth, you can use it in your life. A properly structured life insurance policy can be used as a financial tool providing your family with multiple benefits throughout your lifetime, and others that live on long after you’re gone.

And, when combined with other financial assets, life insurance can provide substantial increases in wealth and cash-flow. Using whole life insurance as a financial tool requires education, but it’s not rocket science.

It wasn’t that long ago when whole life insurance was the preferred method of saving. Only in recent years has the industry and public’s opinion changed. However, whole life insurance has withstood the test of time and is still one of the greatest financial tools ever created.

In general, the life insurance industry has done a poor job at relaying this message to the public. And, the financial gurus that harp against using whole life insurance for saving are ignorant of the real benefits. For instance, whole life insurance is a safe place to park money because it offers guarantees. And, the cash-values can be accessed at any time for any reason providing liquidity.

Furthermore, specific riders can be attached to life insurance policies providing multiple benefits that allow your money to work harder.  Riders, such as the waiver of premium, pay the policy premiums in the event of a total disability. No other asset that I know of, provides this tremendous benefit. The accelerated benefit rider can be used to access the death benefit while you’re alive in the event of a critical illness. And, the flexible, paid up additions rider allows options for contributions and dividends with access to cash values for liquidity.

Ultimately, all permanent life insurance policies are designed to pay a death benefit. This death benefit makes your financial plan self-fulfilling in the event of your death. Think about that, in the worst case scenario, you can know that your family and dreams are secure and protected. The benefit is tax free to your beneficiaries as determined by you as the owner.

So, there you have it, how to save more and why life insurance the best place to park money.

Please comment and let me know how you have used your life insurance to save money and create wealth.

Learn how you can save more and create wealth using life insurance. Follow this link for a personal financial review

Until next time,
Barry Page, RFC

Barry Page

Barry Page is a Registered Financial Consultant, Managing General Agent and Founder of Legacy Insurance Agency, PLLC. He helps clients with tax-advantaged investment alternatives, and specializes in showing families how to protect their assets, income and lives utilizing a macro-financial approach to planning.

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