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Wealth Accumulation: What the Wealthy Know That Most Don't

Posted by Larry Jones on Apr 5, 2018 9:30:00 AM
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What do the wealthy know that we don't?

When it comes to "old money" wealthy families in the United States, there are some similar traits to be observed in how they accumulate assets and pass them on from generation to generation. When it comes to wealth accumulation, I believe the number one secret that they have is this: They know how to turn time into their ally rather than their enemy!

Did you know that the average mutual fund investor earns only 3.83% (Dalbar Study 2010)? Then those earnings are taxed at a greater rate than they need to be. At death, even more of those assets disappear into the government coffers. Time has become the brokers ally, or Uncle Sams, but not his.

Now let me ask you a question.

If you knew that you had all the time in the world to accumulate assets in your estate and for your family, would you do anything differently?

The wealthy have learned ways to make time their friend, and to use it to grow their assets, and to pass them along efficiently to the next generation.



Why do the rich have so much life insurance?

This is a common question I run across. The answer is that, in my opinion there is no better instrument on earth for safely and dependably growing assets, and then passing them along to the next generation in a tax-advantaged manner.

The average American investor is professional at buying high and selling low! (See Dalbar above...) When properly utilizing life insurance you are positioning yourself not to go backwards. This is incredibly powerful over time. You are, in effect, protecting you from yourself!

If you could find an investment vehicle that:

  • Paid an agressive dividend of 5-7% dependably each year OR was pegged to the best measuring index such as the S&P 500 and consistently grew at 8-12% over time
  • allowed your cash to grow inside the investment without capital gains or dividend taxes
  • locked in your growth each year no matter how the stock market did
  • allowed your cash to grow without mutual fund expenses or broker fees
  • increased the value of your estate immediately
  • gave you a free long-term care benefit as well as a free terminal illness benefit
  • gets the government's hands out of your retirement
  • and perhaps the best part...allows you to take the majority of the assets value tax-free as well as having access to it anytime you like (rather than when the government says you can, such as age 59 1/2)

Would you be interested in hearing about it?



Cash Value Life Insurance Meets All These Requirements!

In some of my future blogs I'm going to describe the technical aspects of how some of these products work, especially my favorite, Equity Indexed Universal Life, and how the tax-free withdrawals work, as well as point out some of the pitfalls to avoid, especially when being shown overly aggressive illustrations by insurance agents. These are great vehicles for growing wealth, and I'm totally sold on them, but the illustrations should be realistic. Many of them aren't.



 

Topics: Wealth Accumulation

What you don't know can hurt you!

As a fiduciary I am required to always act in your best interests, and as a professional planner, it's my job to be familiar with all types of possible solutions and financial vehicles. In short, I have no interest in selling any particular product or any affiliation with a particular company. I work for my clients.

Are you:

  • concerned that your tax bill is too high?
  • tired of watching your nest egg decline by significant amounts every 5-7 years?
  • wishing you could find more free time?
  • looking for ways to help protect yourself against litigation that could destroy all you have worked for?
  • worried that Uncle Sam is going to enjoy your retirement more than you are?

If any of the above describes you and you'd like to get a question answered then just click the button below and we'll be in touch.

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