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 2021 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.
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April 2021 – 7 Ideas and Views Newsletter by Van Mueller
This is a time for all of us to proceed with real caution. Stocks, bonds, real estate, commodities, even digital currency are all being manipulated by the powers that be so that they will not have to deal with the real underlying problems the world faces and will continue to face in the future.
I believe we are facing four major crises. Let me be clear, the information I am sharing about these crises oversimplifies problems that are much more complex. The purpose of this information is to help you have discussions with prospects and clients that are NOT about products or interest rates or cash values or premiums. Discussions build relationships! Pitches and presentations do not build relationships. The goal is to elicit the opinion of your customer.
Discussions build relationships! Pitches and presentations do not build relationships.
The four crises are as follows:
1. Economic Crisis
We have talked about this a lot, so I won’t repeat too much of it here. But the economic crisis is being caused by multiple issues. Government is poorly run. People are living longer and longer, and there are more and more people. The ultimate goal of this part of the discussion is to help your customer realize that for the most part, the solution to these crises is money. Lots of Money!
Then the questions will arise: Where will the government get this money? Will they get the money they need from people who don’t have money or people who do have money? The answer is not so simple. Of course, they will start by going after people who have money. But will that provide enough money? Will it even be close? Or will they have to print exorbitant amounts of money? Will that lead to the “Stealth Tax” of inflation for every person in our country? Will that decrease the purchasing power of that money? Don’t poor people lose the same amount of purchasing power as wealthy people? Who does this stealth tax hurt the most? Isn’t it important that we find effective and efficient ways to help EVERYONE?
Don’t poor people lose the same amount of purchasing power as wealthy people? Who does this stealth tax hurt the most?
This crisis is bad enough. But the other three major crises will dramatically increase the danger of economic crisis.
2. Social Crisis
The second crisis is the Social Crisis. There are the obvious prejudices about race, religion, color, nationality, and gender. There is added awareness of social injustice in our country. There will be protests and violence and enormous emotion. This is an oversimplification of a complicated issue. But the important point for us in the business of this discussion is, what will be the financial cost and who will pay that cost? I have no answers, only questions. The only opinion that matters is my customer’s opinion.
3. COVID-19 Crisis
Ask your customers who have been treated for COVID what their medical costs have been. I have seen as little as $100,000 to as large as $3,000,000. What will happen to the cost of health insurance when the COVID crisis is over? What impact does all of this have on Medicare and Medicaid? Where did the governments of the world get the money to purchase the vaccines from the drug companies? And here is a cost you probably haven’t considered: for the first time in a long time, the life expectancies of Americans did not increase. In fact, life expectancy decreased by over one year. What will be the financial cost of this? I am repeating this again. This is an oversimplification of a very complex subject. I hope that this will inspire you to ask your own questions in addition to mine about these issues and what their FINANCIAL cost will be to your prospects and clients. The ultimate goal is to inspire your customers to take action.
4. Climate Crisis
This is the biggest, most dangerous, most expensive crisis of all. In just the last six months, we have had record forest fires; not only in California, but in Arizona, Wyoming, New Mexico and Colorado as well. We have seen dramatic heat waves, with temperatures reaching 120 degrees in some places. We have also seen record cold as far south as Houston, Texas, where there was massive destruction; pipes froze, water mains burst, and many were left without safe and clean drinking water. The damage to Texas was greater than the damage caused by Hurricane Harvey. Mississippi, Alabama, Tennessee and Georgia saw around 100 tornadoes. We have had flooding, fires, mudslides, droughts and dangerous rising ocean and lake levels. We have had — and will continue to have — more intense hurricanes, tornadoes, rainstorms and snowstorms. Damage to shorelines is increasing. The cost for all of this is almost incalculable. How will we deal with all of this? Where will all the money come from? And who will the money come from?
We don’t sell life insurance, annuities, mutual funds, long term care, critical illness coverage or other investments. If you believe that is what you do, you are already out of the business. We must learn that we sell solutions. We sell positive futures. We sell certainty where none previously existed. We help our customers to achieve financial and retirement success, while using the same dollars for protection. With less and less discretionary money available for our customers, we provide more effective and efficient uses for that money.
We don’t sell life insurance, annuities, mutual funds, long term care, critical illness coverage or other investments. If you believe that is what you do, you are already out of the business.
Finally, I want to discuss market correlation. Other than cash value life insurance and annuities, there really are no safe havens any longer. Remember when we were taught that it was important to invest in non-correlated assets? Here are some examples:
- Invest in gold as a hedge in case the stock market goes down.
- Buy international and foreign stocks to off-set downturns in the American stock market.
- Own bonds because when the stock market goes down, the bond market returns increase.
Now, because of all the stock market manipulations by the government, the banks, and Wall Street, traditional economic reality no longer exists. When stocks go up, gold goes up and bonds go up. Conversely, when this manipulation causes markets to go down, they all go down. When the stock, bond, real estate, digital currency markets, etc., finally hit the fan, all these markets will get slaughtered. Insurance products are the only hedge left.
Do we understand that? Do our customers understand that? If they are not prepared, what will happen? Shouldn’t we ask these questions? This is one of the scariest times in our careers. Doesn’t Tom Hegna advise that the 10 years before retirement and the 10 years after retirement are the most dangerous years for retirees? Do our customers truly understand the enormous chances they are taking with their retirement futures? ASK THEM!
Doesn’t Tom Hegna advise that the 10 years before retirement and the 10 years after retirement are the most dangerous years for retirees?
Let’s continue with the expanded narratives for my 40 questions.
15: Was it your intention to make the Internal Revenue Service the primary beneficiary of your IRA, 401(K), 403B or 457 plan? Did you realize that if you have two or more non-spouse beneficiaries, then it is highly likely that the Internal Revenue Service will be the biggest beneficiary of those accounts?
The Internal Revenue Service always comes first, and its share is never reduced without planning. Here is an example: If you have $400,000 in an IRA and you and your spouse die, because all that remains is a non-spouse, you can only defer the taxes for up to 10 years. But did you know that almost everyone takes the money right away even if the taxes are unreasonable? Under current law, it would be easy to pay a combined 40 percent federal and state tax. 40 percent of $400,000 is $160,000, which leaves $240,000 divided by two children ($120,000 each) or $240,000 divided by three children ($80,000 each). The taxes are so high because the children are paying the taxes at their income tax rate which is usually during their best earning years. If you add fully taxable income to their current high earned income tax rate, you could create an income tax nightmare. What if you, grandma and grandpa, could convert marginal tax rates to effective tax rates of less than 10 percent while you are alive? And better still, what if you could eliminate the income tax liability on the money while you were alive, without giving up control of the money? Wouldn’t that be amazing for you and your family? Wouldn’t that be a better result than giving 40 percent of what you worked your whole life for to the Internal Revenue Service? When do you want to get started? Before or after they change the tax laws?
Remember everyone, most beneficiaries don’t care about the “stretch” provision. Most grandmas and grandpas are appalled by this. Show them that they can develop a strategy to keep the money in the family. You may not believe me, but it gives them a real sense of purpose to handle this for their families. They can repair this problem without giving up control.
It gives grandmas and grandpas a real sense of purpose to handle this for their families. They can repair this problem without giving up control.
16: Do you believe we will have another financial catastrophe? Do you want to have the same thing happen this time? Why do you continue to use a strategy that you already know isn’t going to work? What if there was a way not to lose any money ever again?
If you lose and get back to even, and then lose and get back to even do you ever really win? How far would you be ahead now if you had not lost any money in 2000 and 2008? Can you really afford to go backwards ever again? If you didn’t have to give up opportunity to have safety, wouldn’t that be worth knowing about? What if there was no cost or obligation, could you find me 45 minutes in the next week so I could ask you questions that will clarify how to do this?
17: Would you be interested in winning by not losing?
What if there was a way to never lose money ever again, yet have accessibility to your money so you would be able to take advantage of opportunities as they present themselves? Wouldn’t that be a better strategy than the one you are using now? What if there was no cost or obligation, and I would only ask you questions that will allow you to reason out for yourself the best course of action for you and your family? How about tomorrow at 7:00pm?
What if there was a way to never lose money ever again, yet have accessibility to your money so you would be able to take advantage of opportunities as they present themselves?
18: Have you heard that 30 states are now exercising their Filial Laws? Aren’t those laws that make children responsible for their parents’ debts?
Are those laws applicable here? Is there any planning that can be done to prevent your children from being responsible? And does this matter to you?
19: Do you know the average age of widowhood in the United States is age 57? Do you realize that 80 percent of husbands die married and 80 percent of wives die single?
Did you know that a spouse is not eligible to receive Social Security until age 60 when it pays the lowest benefit? What if there was an easy and inexpensive way to take this concern off the table? At the very least, wouldn’t it be worth 45 minutes of your time?
20: Would it be more beneficial to pay your taxes on the way in, so you don’t have to pay your taxes on the way out?
Would it be more beneficial to pay the taxes now on a small amount of money while taxes are historically low and then build that money into a large amount of money that would never have income tax liability again? Or would you rather take a tax deduction now on a small amount of money and build it into a large amount of money in the future that the Internal Revenue Service can tax at any level they choose in the future? Would situation one or situation two be better? Customers look at me perplexed and answer, “That’s easy, situation one.” I then say, but doesn’t that bring up another question? They say, “what?” I ask, “why are you doing the second one?” Ninety percent of the time they reply that they didn’t realize that was what they were doing. We think our customers know all this information and they don’t. They are busy living their lives and do not have the time available to them to give consideration to the consequences of the financial decisions they make. Most are just happy to be able to save some money. We have to stop assuming and start asking. It is the foundation of real success serving the American people.
We have to stop assuming and start asking. It is the foundation of real success serving the American people.
21: Have you insured your IRA? Did you know you could do that?
There are a number of ways you can go with this question. First, if you died too soon could you make sure there was a solid retirement benefit for loved ones? Could you insure the whole value was achieved whether you lived or died? Second, how would you pay off the mortgage on an IRA, 401(K), 402B or 457 plan? Isn’t the mortgage the Internal Revenue Service? Will that mortgage get bigger rather than smaller in the future? If you could use pennies to buy the dollars necessary to pay off this mortgage, at the very least wouldn’t you want to know how to do that?
It is important to have conversations with our customers so we can find out if they even realize the challenges they will face just to stay in control of the money they’ve earned and saved. If you stop telling and start asking, you will be astonished at all the things you would discover from your prospects and clients. It would immediately change your career for the better.
22: When was the last time you did a beneficiary review?
Many people are in a second or third marriage, but they forget to change the beneficiaries on work-provided life insurance and accidental death and dismemberment benefits. They forget to change the beneficiaries on pensions and 401(K)s. They don’t update beneficiaries to add additional family members, such as new grandchildren, as contingent beneficiaries. But it isn’t just beneficiaries. It can also be useful to make sure there are payable on death (POD) forms on checking and savings accounts, or transfer on death (TOD) forms on single owned mutual funds and stocks and bonds.
Having correct beneficiaries and PODs and TODs have prevented many costly estate transfer problems. We just had a lawyer put a transfer on death on a primary residence so the children would not have to go through probate to take control of the asset. It helped me to open a case that could provide as much as $2 million in assets, because I was the only one who offered the information. This is one of my really great questions; I ask everyone.
Let’s get started with the seven ideas and the Canadian idea. Things are changing so rapidly that it is important that we continue to provide as much current information as possible. Next month we will add the narratives of additional questions. If you learn the narratives, you will get a lot more appointments and have more success in those appointments.
Idea #2: Zoom Fatigue
Did you know that new research shows that watching yourself in the little box during a video conference is actually unnatural and can lead to self-evaluation? This leads to negative emotions. This is not good! Zooming can actually cause feelings of exhaustion.
Please read this article so you can offset the negative effects of “zooming.” If everyone believes we will still maintain virtual selling even after the pandemic is over than we must learn to offset the negative effects that zoom can cause and we must design presentations that prevent those negative consequences. This article will benefit you.
Title: Why we’re experiencing ‘zoom fatigue’ and how to fix it
https://www.cnbc.com/ (CNBC, February 25, 2021)
Idea #5: Will President Biden Increase Taxes?
Joe Biden is raising the possibility that income taxes and other taxes will be increasing in the future to pay for all the new programs he has proposed for his administration.
Here is a list of those changes. The article will provide a broader based explanation of the changes I am about to list.
- Reducing federal estate, gift and generation skipping tax exemption to as low as $3.5 million instead of the current $11.7 million.
- Eliminating discounting techniques.
- Taxing grantor trusts in the grantor’s estate.
- Eliminating step up in basis at the time of death.
- Limiting the generation skipping exemption to a specific number of years.
- Reducing the gift tax free annual exclusion which is currently $15,000 to as many individuals as the taxpayer wishes.
- Increasing income taxes for high earning taxpayers.
- Capping the benefit derived from income tax deductions and for upper income taxpayers the elimination of up to 80 percent of their deductions.
- Broadening the 12.4 percent Social Security tax from $142,000 to $400,000.
- Eliminating tax free exchanges of real estate under IRC Section 1031.
- Imposing an annual wealth tax.
- Limiting the size to which IRAs and other retirement accounts can grow.
When you take the time to examine these twelve proposed tax increases you would realize they could have a severe impact on the people who are already paying most of the taxes. Wow!!
Title: Twelve Potential Biden Tax Changes to Keep an Eye On
https://www.wealthmanagement.com/ (Wealth Management.com, March 18, 2021)
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