This is a great time of the year; I love springtime. If you’re listening to this in my audio podcast, let me paint a picture of what others are seeing on our YouTube channel or you can go to our YouTube channel at a later date and watch the video. Simply search ‘Mark Bertrang’ on YouTube, it will take you right to where you need to go. I’m outside today. It’s a beautiful day. Spring has finally sprung. It’s wonderful to be outside when the temperatures are nearing 80 degrees.
The conversation I want to have with you today if you are in the game or if you are sitting along the sidelines, are you in the dugout, are you just watching the game and what’s happening, or are you in the game? What’s the difference between those two? It seems like during many people’s lifetimes they’re simply watching what is happening. That could be in relation to their retirement programs. That could be with 401ks. That could be with all of the different financial decisions they are making in their life and oftentimes what people do is that they just do what is presented to them. It could be an employee plan that their employer has put together. It could be a pension plan that their union has put together.
People are on autopilot. They are basically in the stands and they’re watching the game without really be involved in the game. Then they’re disappointed because life doesn’t seem to be working out the way that it should. Now obviously, you and I can’t play Major League Baseball, but we can be involved with the game more than just watching it on the Television or listening to it on the radio, or going to the game and watching it in the stands.
What are you doing in your life to be engaged as opposed to just looking at the box scores on the very next day to see how everything played out? Isn’t that what people do when they go to the newspaper to see what the stock market has done that particular day and they’re upset because the stock market has gone from one extreme to another extreme. They’re watching what is happening, but they’re being affected and they are emotional because of the plays that occurred, the run that didn’t happen, or the catch that didn’t take place. Instead, they’re yelling and screaming either positive or negative for or against a team because of the way that it’s being played out in front of them.
Instead, suit up. Make the decision to suit up. Just start on a very simple basis. It might be just throwing the baseball back and forth and learning how to play catch; learning how the little intricacies, even the basics of the financial strategies that are out there that can make your life better and for you to be able to participate in putting points on your scoreboard. I know during times of trials and tribulations when people are so nervous about everything that is happening in the world, in the market, in politics, and with other countries, they feel like there’s no control what-so-ever. Again, they’re just watching the game.
You can decide to play a part of that game. We’re not talking about doing day trading or things like that, but instead putting things in place that will provide some protection. Provide an opportunity for you to put money away someplace safe and something that can follow through and you know what the end result will be.
This morning we were in the office and we were back-engineering a whole life insurance policy that will be put into place for one of our clients. It’s going to be a whole life insurance policy issued by a mutual life insurance company. We called and talked with their marketing department as far as how to facilitate the maximum benefits for this individual. When people look at life insurance, they’re often looking at how do I get the most amount of coverage for the least amount of dollars. We’re actually back-engineering policies differently for many clients in which we’re trying to get the biggest possible premium into the smallest policy so we can take advantage of the IRS tax code 7702. I’m sure you’ve read it (Kidding), but you’ve heard of different tax code plans. For example, a 403(b) is like a non-profit retirement plan. You have to go to the section of the IRS code that is 403 then go down to (b). Many people have a 401(k). You’ve got to go to that section of the tax code to find the plan that has been established and has the details in the tax code.
7702 is the same exact thing; it’s just part of the tax code and how do we use the life insurance asset to be able to maximize the things that we want? How do we have tax-deferred growth? How do we have tax-free benefits? How do we have a plan that can continue on if we become disabled? If I have money going in to a plan 401(k) and I become disabled, it stops. If I have money going into a plan 401(k) and I become disabled, my company match stops. The money that’s there continues to grow, but nothing goes in beyond that point.
Can I have a plan in the event of the disability that money will continue to go in the plan? The answer is yes if it’s created correctly. Can I have my money in two places? If I borrow money from my 401(k), the money literally comes out of my 401(k). Yes, I might be able to use it with an interest rate that’s already been prescribed by the plan document and the 401(k) and then I have to put it in under the terms that they have dictated and if I change jobs, I got to get that money back in as quickly as possible. Otherwise, that loan becomes due for taxes. The government is going to want their tax-money and possibly a 10% penalty on top of it just because of the way that the tax code under 401(k) and 403(b) is written.
If I have a life insurance policy, I’m not going to borrow from it, but I’m going to borrow against it so my money is actually in two different places. The money remains in the life insurance policy and instead the life insurance company is giving me their money and using my policy as collateral so that they can give me their own money. Then, I can determine how I pay that money back. I’m not put on a monthly payment plan. I can decide to pay and then stop, pay it all back at one time, or pay it back in installments. I have all these different choices and if I leave my job, I’m not dictated by my life insurance policy in the tax code that I have to make all of these changes immediately. I’m not stuck with a 10% tax penalty and with all these other taxes due.
So, it’s not knowing how to ‘manipulate the system’; it’s learning how to ‘work the system’ so that it works in your benefit. If you are sitting on the sidelines or you’re in the dugout, not getting on to the field, you may not understand the nuances. What every team needs, they each have a coach. In fact, there may be a coach on first base, a coach on third base, and there may be another head coach off to the side. There may be a hitting coach and a pitching coach. There are coaches to get you to where you need to go.
You and I can’t know how to play the entire game. We need specialists to work in each category of our lives so we can maximize our financial life. So, if you’re looking for a safe place to store your money. If you’re looking for a place where you can have an emergency fund. If you would like to have an opportunity fund so you have money available for when a unique opportunity comes your way, and if you would like to have liquidity, peace of mind, an estate plan, and show love to your family and in the even that you get a disability to have someone else paying your plan for you, it’s time to consider the life insurance asset.
To find out more, purchase my book Investments Don’t Hug: Embracing the Life Insurance Asset. It’s available on Amazon, Barnes and Nobles, iTunes, or Audible. If you would like to work with me and my team to answer your questions and implement your life insurance asset to maximize your life, explore our website www.investmentsdonthug.com.