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 November 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.
Reprinted with the author's permission.
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November 2020 – 7 Ideas and Views Newsletter by Van Mueller
There are lies. There are damned lies. And then there are statistics! Our customers face great financial danger in the years ahead. But no one is paying attention to the dramatically changing economic numbers. Even our own industry is not taking into consideration the rapidly changing environment for our products. It feels like the newest four-letter word for Americans is “Math.”
Some statistics have recently come to my attention. They are derived from the usdebtclock.org app, not the free website, as well as truthinaccounting.org and wage statistics for 2018.
The current measurement of our country’s debt is $27.1 trillion. It is predicted to increase to $48.1 trillion in 2024 and dramatically increase to $84.7 trillion by 2028. Even if interest rates were to stay at approximately 2 percent, the interest would be $1.7 trillion by 2028. That is one-third of our current federal budget of $6.6 trillion.
That budget is forecast to increase 50 percent by 2024 to $9.9 trillion and increase by 50 percent again four years later in 2028 to $14.9 trillion. The federal government is on a spending spree unlike anything we could ever have imagined. And the federal government will be spending money it does not have. Our current deficit is $3.2 trillion. That will increase to $5.5 trillion by 2024 and, unbelievably, will increase again by 2028 to $9.7 trillion—which, by the way, was the entire budget in 2024. Federal income tax revenue is currently $3.4 trillion. It is forecast to increase to $4.8 trillion by 2024 and $6.7 trillion by 2028. Federal income tax revenue is predicted to double over the next eight years. And it is not going to be nearly enough.
This is mathematical proof that income taxes necessarily will be higher in the future. Now look at the wage statistics for 2018. From a total of 167 million American wage earners, only 17 million made more than $100,000 of income and 26 million made more than $75,000. At the same time, 113 million Americans make less than $50,000 per year. So those 26 million people should absolutely expect that they will see dramatic tax increases in the future, because without a huge decrease in spending there is no other way.
This is mathematical proof that income taxes necessarily will be higher in the future.
The current number of American taxpayers is almost 125 million people. That is from a U.S. population of 330 million people. Taxpayers increase to 146 million people by 2028, while the population increases to 358 million people. That means 40 percent of the population is paying to take care of 100 percent of the population.
But I just manipulated the statistics. How? Well, 85 percent of the tax revenue comes from the 26 million who make more than $75,000 per year. So, in our country, around 8 percent of taxpayers pay for most of the benefits we receive from the government.
This also mathematically shows the serious economic disparity in our country. However, I am not writing about that today. I am only reviewing how the math affects our customers and our industry. But one more point on economic disparity. The median income for Americans was $37,584 in 2000. That decreased in 2020 to $34,486. It is predicted to increase to $39,269 by 2024 and $44,714 by 2028. That is a 19 percent increase over a 28-year period. Most Americans have been left behind. Either we increase their median income, or we pay more taxes and print more money to take care of them. That is math.
Here is a terrifying example that shows the government has gone economically insane. In 2020, federal, state and local spending is 50.6 percent of our Gross Domestic Product (GDP). GDP is the measure of the value of all the goods and services provided by Americans. In 2019, that measure was $21 trillion. It has since decreased to $19.6 trillion. By comparison, China’s GDP is around $14 trillion. They are the second largest economy.
Now let’s see some scary numbers. The information in the updated www.usdebtclock.org forecasts that by 2024, federal, state and local spending will take 56 percent of our GDP and by 2028, are you ready, 62 percent. That means there will only be 38 percent of our GDP left for the private sector. That is not enough for our economy to recover. When you share this with prospects and customers ask them, “Do you think income taxes will be higher in the future?” Then, make it personal. “Doesn’t that mean they will be coming after you, Mr. & Mrs. Prospect? Haven’t you painted a gigantic target on your back?” Ask: “Do you want to be one of the ones who pays those higher taxes in the future? Would you be interested in ways to prevent that?”
There has never been a greater time to sell Roth 401K’s, Roth IRA’s and cash value life insurance of every variety.
There has never been a greater time to sell Roth 401K’s, Roth IRA’s and cash value life insurance of every variety.
Let’s return to the “damn statistics.” This will blow your minds. In the year 2000, the M2 money supply was $4.891 trillion. At that time, our country had 300 million people. Currently, our population has increased by 10 percent, to 330 million people. Our money supply is now $18.821 trillion. That is a 341 percent increase. By 2024, our population will increase by another 4 percent, to 344 million people. Our money supply will increase to $44.654 trillion. That is a 237 percent increase from 2020. By 2028 our population will increase by 4 percent again to 358 million people. Our money supply will increase by another 237 percent from 2024 to an astonishing $105.851 trillion. From 2000 to 2028 our population increases by 19 percent. Meanwhile, our M2 money supply increases by 2,164 percent.
What does this all mean? The government is destroying the purchasing power of our money. That is inflation, which is a STEALTH TAX! It is actually more deadly than a tax increase for several reasons. First, everyone pays this “stealth” tax. The rich pay, the middle class pay and yes, even the poor pay this “stealth” tax. No one is excluded. It is the most harmful to the middle class and the poor, because they are the ones who can least afford to pay this stealth tax. They don’t even have enough money to buy the bare essentials for their families and yet, because of the government’s insane economic policies, they will be forced to survive on even less.
Our industry can help the poor and middle class. In fact, we are the only ones who can. Government is now in a position where it is mathematically impossible to help the poor and middle class of our country.
Government is now in a position where it is mathematically impossible to help the poor and middle class of our country.
How can we help? Don’t EVER forget:
- We provide guaranteed income that cannot be outlived. Even if our customer runs out of money they can never run out of income.
- We provide mortality credits. In a zero-interest rate environment we can provide better returns for our customers using mortality credits.
- Finally, we provide leverage. We can use pennies to buy dollars. I can make $50,000 of cash value look like $100,000 or $150,000 or $200,000 of death benefit. That means my customer could use most of that $50,000 of cash value while they are alive and still pass on the $50,000 (or more) they started with to their beneficiaries. That is leverage.
Leverage is also one dollar doing the work of many dollars. My life insurance dollar can take care of the policyholder while they are alive. My life insurance dollar can take care of my family, business or charity if I die. My life insurance dollar is self-completing if I have a total disability and have waiver of premium. My life insurance dollar has a terminal illness benefit. Most times the person who dies was the person who handled all the financial issues. If they have a terminal illness, they can access most of the death benefit before they die to set things up for the people or business they love. My life insurance dollar usually can provide a critical illness benefit. If you have a critical illness such as cancer, a heart attack or a stroke, you can access the cash value to help transition your life. When you die, the death benefit will replenish the money you used to make that transition. My life insurance dollar will even help to provide long term care. Ask your clients if they understand that 40 percent of all the people who died from COVID-19, died in nursing homes. Ask them this question: “If there was someone you really loved, would you ever want to put them in a nursing home? What about you?” What if the funds could be created so they could be cared for in their own home? Even if they used 90 percent of the cash value for the care at home, wouldn’t it be amazing if that money was replenished when they died, so the person that cared for them would have the money to be cared for? Better still, if they never need critical illness or long-term care benefits, then they haven’t wasted any premiums to provide those benefits.
Not only that, but what if you could then use the values in your cash value life insurance to provide a tax-free income stream supplement to your retirement income? Wouldn’t that be amazing? Finally, when you are all done with these benefits, whatever is left over will be paid to your family, business or charity free of income tax liability.
I ask this question: “Do you know anything else in the world that can do what I just described? Now that you know all the wonderful things that you can do to stay in control of future economic events, how much value would you like to build for your family or business?” I don’t ask for a premium. I don’t make it seem like there is a cost. I try to amplify that they are building value for themselves. How Much Value Would You Like To Build For Your Family Or Business?
I don’t ask for a premium. I don’t make it seem like there is a cost. I try to amplify that they are building value for themselves. How Much Value Would You Like To Build For Your Family Or Business?
Of course, upper middle class and wealthy people can also avail themselves of these benefits. They are facing a two-pronged attack. Not only will they face higher taxes in the future, they will also be dramatically affected by the “stealth” tax called inflation.
First, higher taxes will reduce their assets. Then, higher inflation will reduce the purchasing power of these diminished assets. But if this segment of our society will have enough even facing increased taxes and inflation, then why should they address these issues? The answer is clear. Their children and grandchildren will have a much lower likelihood of building assets in the future with all the burdens being placed on these future generations by current generations.
Planning and strategies are vital for poor, middle class, upper middle class and wealthy Americans alike. There is no bad news and there is no good news. There is only news. Planning determines the outcome of that news. You can even explain that we don’t know anything about what will happen economically in the future. However, if we have a strategy in place, then we can respond in a positive way to anything that happens, good or bad, even if we don’t know what is going to happen. That is what makes you a powerful entity in the financial and retirement futures of the American people. You can show them how they can achieve financial and retirement success—even when government and all the other institutions they depend on do not keep the promises they have made. That is what is so amazing about being an American. You Can Choose Financial Success! However, it is a choice. You Must Take Action!
We must help the American people remove their rose-colored glasses. We face great financial danger in the years ahead. Our top priority is to always keep our prospects and clients financially safe. To provide that safety, we must fully understand the nature of the risk. Let’s help our customers to develop strategies that will allow them to achieve financial and retirement success under ANY circumstance.
Our top priority is to always keep our prospects and clients financially safe. To provide that safety, we must fully understand the nature of the risk.
My wife Pamela said this was a lot of numbers when she read this newsletter opening. She was correct. I have included a two-page chart that will simplify understanding the information.
Week of October 18, 2020
|Debt||$27.1 trillion||$48.1 trillion||$84.7 trillion|
|Federal Budget||$6.6 trillion||$9.9 trillion||$14.9 trillion|
|Federal Deficit||$3.2 trillion||$5.5 trillion||$9.7 trillion|
|% of federal, state &
local spending to GDP
|Taxpayers||124.6 million||134.8 million||146 million|
|Federal Tax Revenue||$3.4 trillion||$4.8 trillion||$6.7 trillion|
|State Tax Revenue||$2.2 trillion||$2.6 trillion||$3.1 trillion|
|Local Tax Revenue||$1.3 trillion||$1.3 trillion||$1.4 trillion|
|Central Bank Assets||$7 trillion||$7 trillion||$6.9 trillion|
|Unfunded Liability of U.S.A.||$155 trillion||$202 trillion||$263 trillion|
|Population||M2 Money Supply|
|2000||300 milllion||$4.891 trillion|
4% increase from 2020
237% increase from 2020
4% increase from 2024
237% increase from 2024
From the year 2000 to 2028 the M2 Monetary Supply increases by 2,164 percent. The government is methodically and intentionally destroying the purchasing power of our money.
I hope this information will help you to formulate your own questions or please use my questions to ask our customers how this information will impact their financial and retirement success and ultimately their financial freedom. Let me repeat this again... It Is The Greatest Time Ever To Be An Insurance And Financial Professional. It Is Without Any Doubt Whatsoever, The Greatest Time Ever To Sell Cash Value Life Insurance. Do not miss this opportunity to serve the American people during this crisis. Let's get started with this month’s sales ideas.
Idea #5: Women Will Face More Difficult Financial Challenges
This article clearly shows that women who have been caregivers of our children will likely be the caregivers of our parents. Many will face long term caregiving responsibilities because of Alzheimer’s and dementia. That responsibility will destroy livelihoods and careers for women. It will mean lower Social Security and less opportunity for IRAs and 401(k)s.
There are 140 million Americans turning 65 over the next 25 years. While that is occurring, we are closing substantially more nursing homes that we are opening. Because of the COVID-19 crisis, Americans are beginning to realize that care in these facilities is not always ideal. More and more families will take on the responsibility of caring for parents, which means more and more women will have that responsibility imposed on them.
Shouldn’t families at least have a discussion about how to protect the women who will be providing this important care for families? Use this article’s information to begin the discussion.
Title: Dementia Care for a Parent Can Be Costlier Than You Think. For Women Especially
https://www.barrons.com/ (Barron’s, October 11, 2020)
Idea #6: How to Use Life Insurance to Turn an IRA into a Legacy
I write extensively about this every year. We show how to use the progressive tax rates to pay lower effective tax rates rather than higher marginal tax rates. Then we reposition the money into cash value life insurance. Use this article to begin a discussion with customers. Ask them this question: “Would you like to use your IRA and 401(k) money to build a legacy for the Internal Revenue Service and the government, or for your family?” That question will start a discussion.
Title: How Life Insurance Can Turn An IRA Into A Legacy
https://insurancenewsnet.com/ (Insurance News Net, September 29, 2020)
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