Warning! What I am going to say goes against conventional wisdom espoused by pop culture financial gurus. Before I get into the details – I want you to actively participate in an exercise. I want you to think about if you could invent, from scratch, the perfect investment – what characteristics would you want your investment to have? We know in the real world every investment has at least one or two drawbacks, but in this exercise, we want you to think outside of the box. What attributes would you like to see? Let’s see if your list included these:
High Rate of Return
The first thing most people say is that they want the value of their investment to increase significantly over time.
Consistent Rate of Return
In other words, if we had two investments that both yielded a 10% return over 10 years, but one was up and down year after year, and the other consistently earned 10% without wild swings, most people would prefer the investment that was more predictable from year to year.
Conservative
This goes right along with consistent, we would want this investment to be safe from market risk and volatility. Everyone wants an investment that only goes up.
Liquid
An asset that can be quickly converted into cash.
Guaranteed
Some assets come with actual guarantees, insured by financially strong and reputable institutions, so of course, wouldn’t you want that for your perfect investment too?
Tax Benefit
Ideally our hypothetical investment would not have a significant impact on our tax liability and we would want it to grow tax free too, right?
Protected from Creditors
If the owner of this perfect investment owed someone more than they could pay, the creditor would not legally be able to seize this perfect investment.
Transferable
The owner should be able to easily transfer ownership of the perfect investment to someone else. And wouldn’t you want to be able to transfer this asset to your heirs’ tax free? Of course you would.
No hidden fees
Many have seen their actual returns greatly reduced by being hit with high rates, undisclosed fees and management charges that weren’t clearly explained. The perfect investment would be transparent and any fees clearly explained.
Perhaps there are other attributes you can think of but this list covers what most people find important. If you could have an investment with all of these features, wouldn’t that be a great investment? Guess what – this list of benefits perfectly describes a dividend-paying Whole Life insurance policy. Surprised? Most people are. A whole Life insurance policy isn’t an investment, but it is a robust financial asset that should definitely be a part of your financial strategy. Most importantly, this doesn’t even begin to describe the benefits of owning and using your policy to “become your own banker”. I will save that good news for a future blog!
Have questions, want to know more?
Contact us at hello@NeeserInsurance.com or call 574-234-1980 to set up a time to chat, we are here and ready to help!
