Pinney Presents: Van Mueller Newsletter for April 2020
We look forward to the Van Mueller newsletter every month. It's chock-full of sound bites, sales tips, and eye-opening statistics. Here are our favorite parts of the April 2020 edition. We're sharing the full introduction, and 2 of the 7 monthly sales ideas. If you like what you read, we encourage you to click here and become a subscriber.

As you read through this month's newsletter, share the ideas that resonate most with you in the comments - do any of the stats or facts about the Fed surprise you?

Reprinted with the author's permission.

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April 2020 – 7 Ideas and Views Newsletter by Van Mueller

Van Mueller

In less than 30 days the coronavirus COVID-19 has changed the world as we know it forever. The important thing to remember is that this is not bad news, nor is it good news. It is only news. How we position ourselves and our customers determines whether it is bad news or a spectacular opportunity. The Americans who plan and prepare for occurrences like the coronavirus not only view what’s happening as an opportunity, they are actually positioned to take advantage of that opportunity. Those that are unwilling to plan and prepare for events like the coronavirus will most likely be permanently harmed.

The financial pandemic has been long overdue. The black swan event, the COVID-19 pandemic finally opened the door to the financial crisis the whole world is now facing.

The point I want to hammer home in this month’s newsletter is that this is the greatest time ever to be an insurance and financial professional. It is also the greatest time ever to show the American people how to use the spectacular benefits provided by cash value life insurance and annuities of every variety. We have answers for zero percent interest rates. We have answers for dramatically increased taxes. We can easily replace lost benefits by showing Americans more effective and efficient uses of their money. There will be an enormous amount of money printing by our government.

It is also the greatest time ever to show the American people how to use the spectacular benefits provided by cash value life insurance and annuities of every variety.

Isn’t it the only way that our government will be able to bail out everything that will require a bailout? Doesn’t inflation destroy the purchasing power of our money? Aren’t we the only industry that is able to use pennies to buy dollars? Can’t we develop strategies to take advantage of inflation rather than be hurt by it? How do Americans deal with the kind of volatility we have seen in the past 30 days? What if our strategies could smooth out that volatility for our customers? Do you think they would want to know about that? Finally, didn’t the last 20 days and the challenges we will face in the days ahead, make longevity a nightmare for most Americans who live paycheck to paycheck? And, those Americans who thought they had a worry-free retirement, aren’t they now in danger of facing a worry filled retirement? What if our industry could provide strategies that would not only keep you safe but put you in a perfect position to take advantage of those events for the rest of your life? Would that be something Americans of every income level would be interested in discovering? It is exciting to talk about.

I have been waiting for this event for four years. I have been harder on me than any of you could ever be. I joke that I have correctly predicted 10 of the last 3 downturns. It is true that a stopped clock is right twice a day and occasionally a blind squirrel does find a nut. Why are my customers not angry with me? Isn’t it because I don’t tell them anything? I ask them about their opinions concerning the markets. If they believe they are going up, we design a strategy that fits their opinion. If they believe the markets are going down, we provide a strategy for that. At the end of this tutorial I will provide the exact language for conversations we are having with both prospects and clients. Many agents are already using the conversations successfully.

I have been harder on me than any of you could ever be. I joke that I have correctly predicted 10 of the last 3 downturns.

Before we do that, however I would like to share some economic information with you. This information is why I still believe the Dow Jones will fall to between 10,000 and 14,000 before it turns back up: It will turn back up. There is no end of the world scenario. We will deal with our current situation and then begin another positive journey forward; however, this will not be an easy fix.

I am writing this newsletter on March 26, 2020. At its peak the Dow Jones Industrial average rose to 29,568. That was a record. The market dropped 11,300 points to 18,213. That was a 38 percent reduction in less than 30 days. The market has now gone up 3 days in a row. As I am writing this the Dow sits at 22,552. That is still in Bear Market territory because it is 23.7 percent down from its high point. This is what is not being considered. The Market increased 3 days ago by 12 percent. Yesterday it increased by 2 percent and today the market increased by 6 percent. WHY?

You must understand this, or you will miss the opportunity to be of service to the American people. The Congress created over $2 trillion dollars of “fiscal” stimulus. The Federal Reserve created over $3 trillion of “monetary” stimulus. I will tell you how they did that shortly. That is a total of $5 trillion of stimulus provided by our government in three days. $5 trillion is 25 percent of the Gross Domestic Product (GDP) of our country. We just printed 25 percent of our economy and the stimulus was only enough to increase the market by approximately 20 percent, while still leaving us in Bear Market territory. What will the markets do when the full impact of COVID-19 on our economy is realized?

Would you have guessed that a $5 trillion stimulus was the equivalent of 25% of our economy?

Sound off in the comments!

The complexity of the challenges our economy and the world’s economy face are enormous. Let me see if I can review and simplify some of the issues that we will all face. Here goes!!

This is vitally important to understand. We are just seeing the EARLY stages of how the COVID-19 virus will be impacting our economy. Our government will be bailing out almost every industry in America and yes, they will even have to bail out state and local governments. Think about this: If no one is working how do the states collect taxes to provide the promised and yes even required services? As part of the new legislation passed by Congress called the CARES Act, they even defer the employer side of the Social Security taxes until 2021 and 2022. What impact will that have on the financial soundness of Social Security? The CARES Act also provides a waiver of required minimum distributions for Qualified Retirement Plans and IRA’s for the year 2020. Doesn’t that mean lower tax revenue? How will they make up the difference if Social Security is already paying out more than it is taking in. Will the government have to increase taxes once they feel they have alleviated the economic catastrophe being caused by the coronavirus? Will they have to print even more money?

The CARES Act also provides a waiver of required minimum distributions for Qualified Retirement Plans and IRA’s for the year 2020. Doesn’t that mean lower tax revenue?

I would like to go a little deeper. It is vital that you understand that we are nowhere near the end of this economic catastrophe. We are essentially in the first quarter of a four-quarter event. There is still much we can do to protect people and there is tremendous opportunity on the backside of our current situation.

The government provided $2 trillion of fiscal stimulus. The Federal Reserve will provide unlimited monetary stimulus. How do I know that? Please watch the March 22, 2020 edition of 60 Minutes. You can find it here commercial free or below, along with a transcript.

Scott Pelly from 60 Minutes interviewed the current president of the Federal Reserve Bank in Minneapolis, Neel Kashkari. He is one of 12 regional bank presidents. He is the only person serving who participated in the financial crisis of 2007 and 2008. He was the head of the Troubled Asset Relief Program (TARP) which was one of the stimulus programs used to restart our economy in March of 2009. In the 60 Minutes segment, Bank President Kashkari states clearly and concisely that the Federal Reserve will print ANY amount of money necessary to keep the economy liquid. He clearly states that the number one priority of the Federal Reserve is to print whatever money is necessary to keep our economy liquid. He describes the Federal Reserve as the "Lender of Last Resort." This clarification was backed today by Federal Reserve Chairman Powell who declared that the Federal Reserve will provide whatever money our economy requires. How will they do that?

Printing ANY amount of money necessary to keep the economy liquid - is this a good thing or is this a little scary?

Tell us how you feel about our current situation!

They will provide quantitative easing to eternity. They will buy back $500 billion of government bonds from the banks. They will buy back $250 billion of Mortgage bonds. In the $9 trillion corporate bond market the Federal Reserve will be buying $1 trillion or more of corporate bonds to maintain liquidity in those markets. Remember, there are now many investment grade bonds that are being downgraded to junk bonds because the companies don’t have any revenue to pay the interest payments. The high yield (junk bonds) market is now a $10 trillion-dollar market and growing. The Federal Reserve will work to keep that market liquid. The Federal Reserve will have to liquify the Municipal Bond Market. States and counties and cities are seeing dramatically reduced revenues. Businesses are closed. Workers are laid off. How do the states and municipalities pay the interest on these bonds? The Federal Reserve has even offered to provide $1 trillion per week to the Repurchase Agreement overnight market. However, because most businesses are closed, there are no takers for this money. Finally, the Federal Reserve is actually preventing Eurodollars from crashing. This is vital. Those are actually dollars held by foreign banks. Why do those banks hold American dollars? We are the reserve currency of the planet. Commodities such as oil are traded using U.S. dollars. If there are not enough U.S. dollars available to foreign banks, the entire planet could be affected. This will surprise you; the Federal Reserve has no idea how many Eurodollars are out there. How much longer will the rest of the world allow us to reduce the purchasing power of our money before they decide to look for another “Reserve Currency”, such as bitcoin for an example. With the Federal Reserve being defined as “The Lender of Last Resort” and as we get deeper and deeper in debt, won't the Federal Reserve have to print even more money? This event is a real turning point in the future for world economics.

Isn’t that why cash value life insurance will increase in value dramatically? Can’t we buy dollars with pennies? Can’t we have one dollar do the work of many dollars? Won’t Americans be much better off when they understand cash value life insurance is not an investment. Isn’t it much more than that? Isn’t it the foundation of a successful financial future?

Isn’t that why cash value life insurance will increase in value dramatically? Can’t we buy dollars with pennies?

I would like to share a little bit more economic information before I share the extremely positive and successful conversation you must have with every American. Here is a list of all the things that must and will be bailed out by all the “fiscal” and “monetary” stimulus.

Boeing (Thousands of jobs would be lost)
Airline Industry - They used $43.7 billion of their $50 billion of free cash flow to buy back their own stock to increase the price for their shareholders. Now that this event has happened, the airlines are asking for $50 billion just to stay afloat. They will need more, much more as this crisis moves forward.
Cargo Airlines
Auto Industry
Auto Supply Industry
Hospitals → $100 billion
Commercial Real Estate
Indian Casinos
Oil Industry
Brick and Mortar Retailers
Aerospace and Defense Industry
Banks - 80 percent of all bank assets in the United States are in the 5 biggest banks.
Credit Unions
Savings & Loans
Foreign Banks - This is necessary because of all the Eurodollars, i.e., American dollars that are used by foreign countries all across the globe.
States - You heard New York governor Cuomo complain that they were only receiving $3.8 billion when they needed $15 billion. As the focal point of the illness, and to be honest the focal point of our financial crisis, don’t you believe New York will require even more than $15 billion as this catastrophe moves forward?
Municipalities of all sizes

This is just a short list. Have you realized who was not on the list? That’s right, People, Workers, Taxpayers. They will get something; however, it will be very little compared to everyone else. According to Federal Reserve Governor Neel Kashkari in his interview on 60 Minutes, it took people 10 years to recover from 2007 and 2008. How long will it take people this time? Can’t we intercede on behalf of the American people and show them how they can arrive at a much earlier positive outcome.

It is very important that you stay in touch with your customers during this crisis. There are countless methods for doing so, here are a few you should give consideration to.

Zoom - This offers video conferencing and messaging for desktops and mobile devices that is easy to set up and offers a wide range of size features. It can support up to 1000 participants at the same time.

GoToMeeting/GoToWebinar - GotoMeeting allows up to 25 participants and should be enough for most agents and advisors. The webinar feature allows you to have up to 100 participants but there is additional cost. - This is owned by GotToMeeting but is limited to 5 participants and has a lower cost.

WebinarJam - Beneficial for someone who will use this for generating new events and driving growth via webinars. Uses email and has follow up features. Lots of additional features.

GoogleHangoutsMeet - Developed specifically for business needs, it can cater for a large number of users at once and also uses smart participations and a fast interface to reduce the need to wait. As an improved version of the standard Google Hangouts, it aims to make it easier to work with external clients. It does the first by providing a web app experience, which requires no software download. Secondly, it provides a dedicated dial-in number which not only means that employees on the go can join in, but this also ensures that live quality is maintained and that there are no dropped calls.

Telephone – This is one that I have the most expertise in. Please use the telephone to stay in touch with both customers and prospects who you would like to turn into future customers. Be reassuring and be positive. Only use bad news or negative information to get their attention. Pivot quickly to asking if our customers would like to develop strategies that would keep them safe and even better what if you could take advantage of the events that are currently happening?

HERE IS THE ALMOST VERBATIM CONVERSATION I AM HAVING WITH EVERYONE. I DO THIS IN PERSON, ON THE PHONE OR ON VIDEO CONFERENCING WHICH I AM JUST STARTING TO LEARN. You can teach an old dog new tricks and the public is much more receptive to the conversation we are about to have because of current events and perceived future events. The public is no longer “certain”. They are filled with “uncertainty.” Here are several different scenarios.

  • If it is someone who has all their money with me, I call and verify that our strategy is working and that they will be able to take advantage of what is happening when our current situation resolves itself. I congratulate them an being brilliant enough to create a strategy that works under any circumstance. I verify that I will call when the opportunity presents itself and thank them again.
  • If it is someone who has something with me but most of their money and insurance is held elsewhere, I call and tell them how much I appreciate their loyalty and the only way I know how to thank them is if they would allow me to ask a series of questions that will confirm that they are aware of all the challenges they must deal with, and that they could have strategies that would keep them safe and even better than that, wouldn’t it be amazing if they could take advantage of everything that is happening? We will not try to sell you anything. We will only ask you questions to help you clarify whether you are in control of current circumstances or not. Advise that there is no cost or obligation for this and it will probably only take around 45 minutes. If there is no cost, at the very least, wouldn’t this information be invaluable to you, you family and your business? When and how would you like to get together?
  • Multi Line Agents Customers and Medicare Supplement Customers – Use the same language we used in number 2. Thank them for their business and their loyalty. We do not say thank you enough. Then explain the only way we know how to show you we appreciate your business is if you would allow us to ask questions that would help you clarify all the challenges and risks you face. Could you be kept safe in these circumstances and even better, could you take advantage of those circumstances? Americans do NOT buy bad news. They DO buy access to opportunity. Focus on the good news.
  • People I Have Never Met or Prospects – I call and say hello, or I walk up and say hello if I am doing it in person. My name is Van Mueller, I am an insurance and financial service professional and we are very worried that Americans are not getting the information they need to have a successful outcome under the current circumstances in our economy. You would really help me a lot to help a lot of people if I could ask you a few questions to get your opinions about certain information. I would only take around a minute. Would that be okay? It would really help us to do a better job. I am always using we and us as it is much less adversarial. I then explain the presentation I am about to share. Many times, they will show interest. I then ask them for the appointment and explain again the three goals. Are you aware of these challenges? What if you could be kept safe? And, finally, what if you could take advantage of what is currently happening? Would that be valuable information? Here is what I am asking with ridiculous success.

I start with a question about the economy. “Isn’t it amazing what’s happening in the markets? How is our country going to deal with all of this? Can I ask your opinion on a few things? How many times will Americans be okay with losing 30 or 50 or even 70 percent of what they’ve made to Wall Street before they finally say enough is enough? How many times will they let that happen before they build a strategy that will never lose any money? If this volatility continues won’t this be happening more often? Doesn’t it usually happen about every six to eight years? Would you be further ahead if you didn’t lose 30 or 50 or 70 percent of your money every six to eight years? If that wasn’t bad enough, they’re not finished with you. Don’t you then have to deal with the Internal Revenue Service? Won’t they take 20, 30 or even 40 percent of what’s left? WOW! Isn’t that piling on? But they are not done yet are they? Now they will pour salt in the wound and print an enormous amount of money. Won’t that reduce the purchasing power of the little money you have left? What if none of that had to happen to you? And even better, what if you could take advantage of those occurrences? Wouldn’t that be a better strategy than the one most Americans are using now? What if there was no cost or obligation to find out how to do that? What if all you had to do was answer some questions as they apply to your situation so you could clarify how to do that? At the very least, wouldn’t that be worth 45 minutes of your time? And if you learned this information would you want to do it before or after the next downturn?

People will want to find out what the information is. They will want to know how to turn this mess into an opportunity. Agents will be astonished at how often this works. ALL it requires is practice. It must be CONVERSATIONAL. It can’t sound like a pitch. You only need to practice 20 or 30 times and you will be amazed at your proficiency.

Agents will be astonished at how often this works. ALL it requires is practice.

This is all I have time for this month in this section. Next month we will share more ideas on how to take advantage of a situation that I believe will worsen once the extent of the damage to our economy and our people is discovered. I say this all the time. Now, it has extreme value. This is the greatest time ever to be an insurance and financial professional. The next decade should provide wonderful opportunities to everyone who is willing to learn a few questions that will inspire our prospects and customers to take action. Can you tell how excited I am? We all matter. We can help. Let’s get started with our seven ideas.

Let's get started with the seven ideas.

Idea #1: Social Security Information

Will COVID-19 change Social Security? Of course it will. With millions of workers not paying Social Security or Medicare taxes there will be greater stress on both programs. Under the new CARES Act, the employer will not have to pay the employer side of Social Security for the people who are working for quite a while. Less money going in creates more stress for the programs.

There will probably be no cost of living increase for recipients in 2021.

A second article asks 3 questions that you should answer yes to when you make the decision to defer until age 70. These are great questions and are ideal for determining deferral to age 70.

Title: 3 Ways the Coronavirus Will Affect Social Security (The Motley Fool, March 21, 2020)

Title: If You Answer Yes to These Questions, You Should Claim Social Security at 70 (The Motley Fool, February 29, 2020)

Idea #5: Isn't Cash Value Life Insurance the New Stretch IRA?

Here are three articles you must have so you can take advantage of the opportunities for planning that the Secure Act provides. I provided Secure Act information in last month’s newsletter and these articles focus in on the “stretch” adjustment that the new law created. These articles walk you through a number of ideas that use both single and survivorship cash value life insurance to maximize IRA and 401k benefits for future generations and beneficiaries of these programs without the owner giving up control. You must have this information.

Title: 5 reasons why the end of the stretch IRA will not pose a problem (Investment News, March 2, 2020)

Title: Why life insurance is the new stretch IRA (Financial Planning, February 6, 2020)

Title: Use Of Roth IRAs And Survivorship Insurance After The SECURE Act (Financial Advisor, March 20, 2020)

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There's a lot going on right now. How are you feeling? What do you need? What do you wish people knew?

Let it all out - good, bad, or ugly - in the comments. We're all in this together.