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September 2022 – 7 Ideas and Views Newsletter by Van Mueller
I believe the insurance and financial service industry should be on a crusade. The institutions Americans depend on, such as government, Wall Street and the banks are going to let them down in a dramatic fashion. As I am writing September’s newsletter the so-called “bear market” rally is losing steam. I believe we are in the second inning of a nine-inning downturn. This will be very difficult for many of the people in our industry. Why? The last downturn was 14 to almost 15 years ago in 2008. More than half of the people who work in our industry were not working until after the 2008 downturn. During that downturn the S&P 500 lost 57 percent. Most of our country’s downturns happen approximately every six to eight years. That means that a majority of insurance and financial professionals in our industry have never experienced a serious downturn. Get ready, you are about to experience a serious economic disaster.
We have had two quarters in a row of negative economic growth as a country. Don’t be surprised if we have a negative third quarter. That is a recession. The government is trying to downplay these numbers by claiming we have had enormous job growth. They say you cannot have a recession with the kind of job growth our country is experiencing.
Here’s the manipulation! The government said employment grew by 528,000 jobs in July. Do you know that 384,000 of these jobs were for part time work? 92,000 people added a second job. We are seeing an increase in this occurrence. In July, the economy actually lost 71,000 full time jobs.
Even though the unemployment rate dropped, so did the participation rate. Fewer people are now working than previously.
The biggest gains were actually part time jobs. These jobs were in the services industry. Restaurants would be a primary example. Jobs lasting between one and three months increased, all other job durations decreased.
Wages were up slightly. They did not keep up with inflation. Wages increased almost four percent less than the inflation rate of 8.6 percent.
THESE ARE NOT BREADWINNER JOBS!
We will see an increased downturn in the economy. Period. We will also see a maintaining of the inflation rate between 7 and 9 percent. Oil price reductions are temporary. Food prices will increase. Healthcare costs will increase.
We will see an increased downturn in the economy. Period.
To effectively explain how damaging inflation is, you must develop an understanding of the rule of 72. If you divide the inflation rate into 72 it will approximate how many years will be needed before you need twice as much money to live on. Seven percent inflation into 72 requires approximately 10 years. Eight percent requires approximately 9 years. Nine percent requires approximately 8 years. At the current 8.6 percent inflation in eight years and four months you will need to double your income in order to maintain your standard of living. So, a person retiring at 65 on $50,000 of annual income would need $100,000 per year by age 73 and four months. They would need $200,000 per year by age 81 and eight months. They would need $400,000 of annual income by 90 years old to maintain their standard of living that they started with at age 65 of $50,000.
Here's another way to explain inflation using the rule of 72. If you started with $50,000 of annual income at age 65 and inflation continued at 8.6 percent for 8 years and four months at age 73 and four months $50,000 of income would now only buy $25,000 of goods and services. Eight years and four months later at age 81 and eight months, that $50,000 would only buy $12,500 of goods and services. Finally, at age 90, that $50,000 would only buy $6,250 of goods and services.
INFLATION IS A STEALTH TAX.
That is why inflation is so costly to Americans on fixed incomes and especially for the more than half of American already living paycheck to paycheck. Use the rule of 72 for inflation as well as showing people how many years is takes for money to double.
Finally, what if you have inflation and a recession at the same time? That is called stagflation, which is something we have not experienced since the seventies. It is really devastating because the value of your stocks, bonds and real estate decreases and then the purchasing power of what is left is diminished by inflation. Then, the government taxes what is left. Stagflation destroys wealth. Well, not necessarily. If you have a strategy or a plan IN PLACE, instead of being harmed by stagflation, you could actually take advantage of it.
Be sure to pay real close attention to the above-named establishments. They will all be playing fast and loose with the facts. The more they declare that everything will be okay, the more worried you should become.
The more they declare that everything will be okay, the more worried you should become.
The next thing I wish to talk about is learning and questions. There is no teaching. There is only learning. It doesn’t matter how amazing the information we share is. If you do not want to learn it; you won’t. Learning has requirements. You must create successful methodologies for learning. Reading the material out loud, for example. This prevents your mind from wandering as much if you can see and hear the material. Repetition is vital. Practice is vital. You must be able to do the things you learn, instinctively. If you have to stammer or stutter to reply to inquiries, you don’t look as professional as someone who can maintain conversationally, no matter how many interruptions or disturbances. Being well practiced allows you to bring the conversation back to the goal of inspiring action. Customers like to veer away in discussions. Your ability to ask the proper questions after listening to the customer’s unilateral interruption allows you to bring the customer back to focusing on the issues that need attention.
Here's an assignment for this month. I ask agents that we train, at the beginning, what is the initial and most important purpose of the questions? I have never received the correct answer.
It’s not because the agents don’t know. They do. It’s just that they have been focusing on the wrong thing for most or all of their career.
The number one initial purpose of the questions is to get an appointment. What kind of question can you ask that will get you that appointment? Let’s say the customer knows for sure that if they give you an appointment, you will try to sell them something. What kind of a question will still inspire them to give you an appointment anyway?
Really think about it for a minute. This will change your career, for the answer is actually easy to reason out. Wouldn’t it be a question that they absolutely want the answer to even if they have to give you an appointment? How do you develop questions like that? Isn’t the easiest way to pretend you are the customer? What questions would you want answered even if you had to give a salesperson an appointment?
Really think about it for a minute. This will change your career, for the answer is actually easy to reason out.
Here are just a few of those questions. I hope they point you in the right direction and they help you to create some questions of your own. However, feel free to use all my questions and every other sales trainer’s questions that meet the above stated criteria.
1. What is the best age to take your Social Security? Before you answer. Do you know why we ask? Do you know that over 90 percent of Americans take Social Security to their detriment rather than their benefit? If we could ask you a series of questions that would allow you to maximize this important benefit and there was no cost or obligation and we promise not to try to sell you anything and we believe you will be so pleased with the information that you will walk me to my car and hold my door open for me, do you think you could find me 45 minutes in the next week or two? Most Americans will give you the appointment because they want to know the answer to that amazing question.
2. Do you want to be rich or would you like an absolute, positive, guarantee that you would never be poor? What if we could show you a way that even if you completely ran out of money, you would never run out of income, wouldn’t that be valuable information in these uncertain times? Even if you didn’t do anything, at the very least, wouldn’t you want to know something like that was possible? There is no cost or obligation for this information, and we promise we won’t try to sell you anything. Can you find 45 minutes for us in the next week or two?
3. Do you believe we are about to have another financial catastrophe? Do you want to happen this time, what happened the last time? And this is important, why do you continue to use a strategy that you already know isn’t going to work? What if you could prevent being harmed by those occurrences and actually put yourself in a position to take advantage of those occurrences. When would you want to develop a strategy like that, before or after the next downturn? There is no cost or obligation for this information. We essentially ask you a series of questions that allow you to reason out for yourself how to create a strategy that does that. Would this week or next week be better?
There are many, many other questions of that type. Do not be afraid to disclose that you won’t try to sell them anything. You do not want to sell them anything. You want them to buy something. People love to buy; they hate being sold. Also, isn’t your prospect or customer going to ask this question? If you’re not going to try to sell me anything, why would you do this? What’s in it for you? You answer conversationally that most people wait until the last minute to make financial decisions and more often than not, they end up making mistakes. We want to show you that there are many ways to be financially successful rather than be harmed by all the financial excesses occurring in our economy. When you realize how bad this is going to get and how serious the damage to your financial and retirement programs are, we hope you will remember that we took you through a process that allowed you to be in control rather than be controlled. We hope you will consider our help at that time. We are essentially investing in a future relationship with you. Doesn’t that make sense? So, would this week or next week be better for an appointment?
Before we begin the sales ideas, I would like to show you how I use the free information at www.usdebtclock.org as a tool. Here you only get information to the year 2026. If you go to your app store, for two or three dollars you can load the app onto your phone and/or computer. The app has many additional features. First, it provides information until the year 2030. Here is a list of all the additional features that the app provides.
1. Our county’s finances under each president since the year 1900.
2. Current financial data on all 50 states. The data includes population and gross domestic product for each state, (A measurement of the output of goods and services provided by that state), state and local debt, unfunded pension liabilities, spending per citizen, how many government employees they have and finally, their debt ratio. It can really help you clarify which states are in the deepest trouble financially.
3. World Debt Clock – This provides amazing information about the global economy. We must know this information because of supply chain issues. China now has over 1.4 billion people. India has almost 1.4 billion people. The third most populated country on the planet is the United States which has 333 million people. If Earth’s current population is 7.75 billion people, that means that those 3 countries have 40 percent of the planet’s population. That gives them financial power. The European Union which has 29 countries has a population of 530 million. If you add the European population to the other 3 countries, that is almost 48 percent of all the Earth’s population. Knowing information like this can be beneficial in understanding many of the issues facing the global economy.
4. Another great part of the app is the waste, fraud, and abuse information. The information estimates the amount of waste, fraud, and abuse in every department of government.
5. Future Budget Showdown. This compares all the ways different branches of government measure all this information differently. This teaches you how to listen to diverse declarations about the economy without starting an argument. Now, you can use the varying information to ask questions which might make your prospect or client take another look as the way they view financial information.
6. City Debt. This shows the top 50 cities in the United States by size and how much unfunded liability each city has. It’s not just our country or states that are in financial trouble. This shows that cities, towns, and municipalities are all experiencing their own financial problems. There are layers of financial issues facing the American people.
7. Worker Compensation. This shows the average income earned by 200 professions. This is very interesting. It might cause you to specialize in one or a few professions. You can also share this information with your customers in a positive way. You can brag on them. They love it.
8. Famous fortunes. Again, this can be used to start conversations about any number of issues using someone they are familiar with to begin the conversation. This is very interesting.
9. Inflation Index. This is a very compelling part of the app. It shows the customer how damaging inflation is. It compares various brands of car’s prices. A 1953 Chevrolet Corvette originally cost. $3,498. Adjusted for inflation that car would cost $33,688. A 1981 Ford Escort originally cost $5,158. Adjusted for inflation that car would cost $14,590.
Then the app provides an amazing and important explanation of inflation. It shows inflation adjusted numbers for gasoline, electricity, coal, iron ore, oil, corn, wheat, coffee, milk, eggs, sugar, cars, homes, rent, college, and wages. You can really reinforce the real and serious damage caused by the reduced purchasing power that is inflation.
10. Then there is a Relevant Stats section that shows how much of the income tax responsibility the top 50 percent have. It’s 37.35 percent. The top 50 percent of wage earners account for 96.95 percent of all the income tax liability. It shows that the average wealth of the bottom 50 percent is $26,548. Will any of these people be able to retire?And, after the next downturn could 50 percent rise to 60 or 65 percent? Talk to grandma and grandpa. This part of the app also shows global derivatives or as Warren Buffet calls them, “weapons of mass financial destruction.” The amount of derivatives currently is higher than it was in the 2007 and 2008 crash. It is currently around $643 trillion. That is eight times greater than the GDP of the global economy.
There is information about the U.S. trade balance. Information about U.S. education. There is information about U.S. crime, U.S. prisons, U.S. injury deaths and the leading causes of deaths. The app also provides U.S. Chronic illness. U.S. mental health, the largest cities in the world, infectious diseases, poverty and even Earth signs.
11. Natural Disasters. This shares the costs affiliated with the largest hurricanes, fires, flood, and earthquakes with climate change becoming more prevalent, will their costs dramatically increase?
12. The cost of wars. Afghanistan and Iraq are now trillion-dollar wars. Where will we get the money?
There is much more information. Here are some additional segments to the usdebtclock app.
13. Military hardware
14. Classified programs
15. World energy output
16. Precious metals
17. Auto sales
18. Home sales
19. 2020 – 2010 – 2000: This is a comparison of some of the economic statistics sited above. You can see how much more dangerous the information is becoming and how quickly it is accelerating in present time.
20. 1990 -1980: In 1980 our country was only $900 BILLION IN DEBT. At that time the Federal Reserve raised interest rates to 20 percent to finally get control of inflation. With our country almost $31 trillion in debt we cannot even raise the interest rates to 9 percent to get current inflation under control. The interest on the debt would be 60 percent of the current budget. Inflation is and will be a serious issue for a very long time.
21. History of Money. This is like a cliff note about money and how it came to be.
Please understand this was only a small sample of all the information that you can make available at your fingertips. The debt clock shows the national budget, what our deficit is and what percentage of our GDP is going to our debt. It also shows how much we spend on Social Security, Medicare and defense, and that over 37 percent of everything we make as a country goes to taxes. The debt clock shows where all the tax revenue comes from at the federal level and also shows numbers like officially unemployed and actually unemployed. Actually, unemployed is twice as many people. It also shows how much tax revenue states and localities take in taxes. If there are 330 million people in the United States, and almost 86 million are on Medicare. It shows that 26 percent of our country is already old with many Baby Boomers and Generation Xers still to retire. Where will we get the money?
If there are 330 million people in the United States, and almost 86 million are on Medicare. It shows that 26 percent of our country is already old with many Baby Boomers and Generation Xers still to retire. Where will we get the money?
Finally, the part of the app I use the most is money creation. In the year 2000 the U.S. money supply was $4.8 trillion. Currently, the U.S. money supply is $22 trillion with only a 10 percent increase in the population. The debt clock predicts that by 2030 the U.S. money supply will increase to $34 trillion. Do you understand how inflationary that is?
All of this information can be used to develop questions that will inspire prospects and clients to take action. THAT IS THE INITIAL AND NUMBER ONE PURPOSE OF THE QUESTIONS!
I would get and use this app on my phone and my computer. Let’s get started with the sales ideas.
Idea #1: Series I Bond Information
I have been getting lots of questions from my customers about I bonds. I found a really good article which easily explains the pluses and minuses of this in the news, bond. I believe you should print out the article and have it with you on appointments.
Title: My Husband Flipped Over Series I Savings Bonds Rates. Then We Read the Fine Print
https://time.com (Next Advisor partnering with Time, August 16, 2022)
Idea #7: Why Do We and Why Don't We Get Referrals?
Here are two great articles that come at the problem of referrals from two different directions. Here are a couple of reasons why referrals aren’t being provided. They may not even know you accept referrals unless you ask for them. If they don’t understand what you do, they may not be able to share that with other people. The customer doesn’t want to risk putting a salesperson on a friend or relative.
Here are a few questions to ask that will inspire customers to provide referrals. Who do you know that may be retiring in the next year? Who do you know who recently had a child, got married, lost a spouse or got downsized at work? Obviously, you should not ask these all in the same question.
These two articles should have an immediate and positive effect on your practice. Read them carefully and then practice your favorite questions.
Title: Why Aren’t My Clients Providing Referrals?
https://www.fa-mag.com/ (Financial Advisor, August 1, 2022)
Title: 10 Questions That Prompt Clients To Provide Referrals
https://www.fa-mag.com/ (Financial Advisor, August 15, 2022)
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