A hearty welcome to “Grandma’s Wealth Wisdom” with your neighborly hosts, Brandon and Amanda Neely. This is the only podcast that helps you take charge of your cash flow and leverage your assets, simply and sustainably, the way Grandma used to.
Amanda: Hi, I'm Amanda, and welcome to Grandma's Wealth Wisdom where we help you break through to a smart, stable financial future with the tried and true wisdom Grandma used.
Brandon: Hey, I'm Brandon and this is Episode 51, “Questions Your SO Would Ask.” SO stands for significant other or, from my military background, superior officer, so that's what SO stands for. I think I don't want to confuse this. You are, Amanda, my significant other, not my superior officer. Maybe depending, I guess, sometimes, but … [01:01.5]
Amanda: Yeah, and sometimes you're my superior officer, but you're always my significant other. Just out of curiosity, what's the difference between an SO and a CO, a commanding officer in the military?
Brandon: I think it just depends on the branch that you're in and what they say. Yeah, they just have different terminology for different organizations, I think.
Amanda: Yeah, okay. Okay. But I think for this episode, we want people to think of whoever would help them make a financial decision. So, for you, maybe it's a life partner or a business partner, a parent, a sibling, an uncle, maybe even an adult child. Whoever is going to help you with making an important financial decision, that is your SO, and we're going to talk about the questions your SO would ask.
Brandon: But before we get into that, we wanted to do a quick shout out with a review that's on our … We have lots of reviews. If you like our podcast, if you enjoy it, please write a review—those things help—and just help get the word out. [02:06.6]
So, Diane wrote a five-star review on iTunes and she says this: “Today we set aside 45 minutes to listen to a couple of podcasts. A little over two hours later, allowing time to brew another cup of coffee, twice, of course, I made a note of where we would pick up our next opportunity to listen. Amanda and Brandon's conversation tone is so relaxing, and we smile as we enjoy their light natural humor.” Thanks, Diane. “This wisdom they shared and the way they presented it was easy to apply to our lives. As we're listening, I'm thinking our grandchildren could understand it. I may have to make that next opportunity to listen happen rather than wait for it to happen.”
Amanda: Thank you, Diane, for that review and thank you in advance as you are listening for your reviews, so that more people can find us and be helped to break through to a smart, stable financial future. [03:10.2]
Brandon: Now we're ready to get back into questions your SO would ask. I want you to pick a scenario. Pretend you're ready to get serious about financial strategies, but you're SO isn't. Who has ever been there? You could raise your hand if you’ve ever been there.
Amanda: I’m raising my hand right now.
Brandon: Maybe pretend your mom is very concerned about you getting scammed. Who has ever had their mom thinking they're going to get scammed? I mean, I have.
Brandon: Or let's pretend you've started working with us and have learned a lot about Grandma's strategy, but before you move forward, you want to check in with the people who care about you most to double-confirm you're on the right track, and I think that's important to do. So, how do you address their concerns? [04:04.7]
Amanda: Now, chances are they're going to have 101 questions that they might ask you, and at least one of those questions you're not going to know how to answer. And they're asking these questions because they care about you. They want you to make a good decision. And a lot of those 101 questions are going to be custom to your unique situation, things like, Are you sure you should save X and not more and not less? Is this the best thing for you because of X, Y or Z? There are lots of unique questions that they're going to ask.
But we've found that there are three categories or three lines of questions that are the most common, so we thought we'd help you answer them. Of course, you can use what we share here and have it as part of your conversation or before you have that conversation with your SO, you could just send them this episode if that's easier, so that kind of gets those questions out of the way and you can talk more about the ones that are more specific to you. [05:05.6]
Brandon: Now, if you haven't caught on yet by listening to our podcast, Grandma's strategy often uses a specifically designed high-cash value, dividend-paying whole life insurance. That's a mouthful. And we use this to build towards a smart, stable financial future, of course.
Now, we've got years of special training in the proper way to design and implement this strategy, and we've been using it for many years prior to being in the field ourselves. We've used it, again, in previous episodes where we shared how we used it to get out of debt and break through to a smart, stable financial future ourselves. So, that's the main piece of Grandma's strategy, one of the main pieces.
Amanda: Yeah, and sometimes and your SO will be turned off simply by the words “whole life insurance” and they just shut down the conversation. They don't even want to talk about it. But if you can get them past that point where they're open to having a conversation about it, we created this episode for the questions that come up from there. [06:15.0]
So, we're going to assume that you are interested in looking at Grandma's strategy and its use of whole life insurance as part of your strategy for these questions to make sense.
Brandon: The first line of questioning, the first category of questions are along the lines of “How do you know this isn't a scam?” That's a huge question to ask, right? How do you know you can actually trust them? Why do so many, quote-unquote, “smart” financial people say never to do whole life insurance?
Amanda: Now, this is a line of questioning we could probably talk for days about and, in fact, we know a podcaster that's done a whole series of episodes asking this question, Is whole life insurance a scam? And we wanted to just take a couple of minutes here to give the high-level overview. [07:11.1]
Back in Grandma's day, half of Americans used whole life insurance. It's kind of a little bit of a history lesson that it wasn't until the 1980s that this guy came up with an idea to make lots of money, telling people to cancel their whole life insurance, and instead buy term and invest the difference. And, since then, this idea of buy term and invest the rest has become very popular.
Knowing that history, knowing where that came from, I'm sure you see that this does not make whole life insurance a scam. It just makes it one of your options to take seriously. And, in fact, there are lots of people, as they seriously consider the options, that have chosen whole life insurance right now. There are rich people, middle-class people, young people, old people, people of all different kinds of backgrounds that have whole life insurance right now. [08:02.4]
Brandon: A question you might ask back to your SO is, What's so special about investing in the stock market anyway? Has it really done that much for you? And, again, ask them those questions to see where they are coming.
Amanda: Yeah, but really the two biggest things that most SOs are concerned about when they say, Shouldn't we just buy term and invest the rest? The first one is the cost of whole life insurance. This is the, quote-unquote, “smart” financial people's biggest reason not to do whole life insurance. They say it costs too much.
Maybe you turn this question around to your SO and give this scenario, “Would you rather.” Would you rather pay a little bit for 30 years and never get anything in return or a lot more for 30 years and use that cash that builds up whenever you want and for whatever you want? So, even that little bit for 30 years can really add up. Can you imagine paying $45 a month for 30 years and having nothing to show for it because the policy is gone after 30 years and you don't have the funds to keep it going? That's paying $16,200 over 30 years and not having anything to show for it. [09:16.2]
Or, alternatively, imagine setting aside $400 a month for 30 years, a whopping $144,000 total, but you have 254,000 or more to show for it. That is safe and predictable, meaning you have a high degree of certainty that that's going to be there, that 254,000+ is really going to be there, and you could have used it throughout those 30 years to do the different things of life. Do those numbers make you think you should at least compare your options seriously?
Brandon: And I don't think that actually accounted for the death benefit that happens after that 31 years and 32 years.
Amanda: Correct. That’s just looking at the cash, yeah.
Brandon: Yeah. The most likely pushback is that you're SO might believe they can get a better return in the market. That's going to be their pushback. I can get a better return over there. [10:12.2]
Amanda: Right. So, the $355-difference between the $45 a month in the $400 a month, couldn't I have gotten a better return in the market for that? And, in this case, we want you to listen to next week's episode where we're going to talk more about that, and just ask them this question: does having cash available in my whole life insurance policy take away my options to loan it out, borrow it out, withdraw it out, take it out however I want to and invest in the market anytime I want? Does it take away any of my options?
Brandon: That's a good question.
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Brandon: The other thing there like the concern about trying to make sure you are not scammed is the company your whole life policy would be with. You want to make sure it is reputable, which is really tied to the second line of questioning, which is where is your money really going? How do you know it's safe and will grow for you?
Amanda: Yeah. One of the important things I like to point out here when I ask people, if you're going to do Grandma's strategy, where does your money go? Do you mail a check to me every month? What happens? And the fact is you never actually send it to us. You're sending it directly to a life insurance company. [12:05.2]
And one of my favorite things to talk about and research is all the different places you can store your money and how safe they really are. From a tin can in your house to a bank, like a checking or savings account to a mutual fund to a life insurance policy with a life insurance company, and so many other options that there's not really a time to explore. But the question is, What is really safe? Of all these different places you could store your money, what's really safe?
Brandon: Now, we could talk about the pros and cons of these options. Do the words “FDIC insured” mean what we think they mean? I mean, people say it all the time, but does it really mean what we think it means? But let's stay with whole life insurance for now and not go off the rails again into those whole things, but staying with the whole life insurance. [13:01.5]
Amanda: Yeah. So, here are the most important things you need to know about how we do Grandma's strategy. We work with companies that are A-rated or better, and they've been profitable and paid dividends every year for over a hundred years. They have millions of policy holders that are working with them, individuals and families, and they've got billions in assets and those are real assets. There's actually plenty of cash in the vault, so to speak, in case every policy holder wants their cash now.
Brandon: So, your bank probably has 10% or less, more likely less, of their deposits on hand. If there was, again, that whole run on the bank, they have 10% or less on hand. So, how safe is that really?
Amanda: Now, the reason most people haven't heard of the companies we work with before, when we share their names as part of the process, it's usually because they're not doing things like spending a bunch of money on Super Bowl ads. And, frankly, that's fine with me. [14:08.8]
I want them to be putting that money to work to grow my money even better. You can decide if that's what you would want, too, and, of course, whatever company we match you with because we work with multiple different companies, we invite you to do your research. Make sure you believe that it's safe and it's going to grow with them, and that you're comfortable sending them your money, whether it's regularly or even just once.
Brandon: So, all those big, big commercials everywhere. The third line of questioning is, followed by all kinds of scenarios, what if you lose your job? What if you get really sick? What if a zombie apocalypse happens? What if this happens? Now, you could think of any “what if?” I think there's actually a new Marvel “what if?” show coming out, too. Anyway, beside the point.
Amanda: Oh no, you'll probably rope me into watching that with you at some point. [15:02.9]
But this actually brings up one of the most misunderstood things about Grandma's type of whole life insurance and I want to make sure we really get clear on this because sometimes what holds people back the most, and here's the truth. The amount you pay, if you're paying regularly on a monthly or quarterly or annual basis, the amount you put into Grandma's strategy is flexible.
Typically, when we plan for these and structure them and do all of the math behind them, we try to make sure that at least half, if not more, of , quote-unquote, “premium”—that's what the life insurance company calls it, a premium—more than half of that as optional. And there are also options to pay less or even less than what the minimum is, or temporarily stop payments anytime you need to. You could even choose to stop payments forever and still have life insurance coverage. [16:02.7]
Now, there are plenty of things to think through about when and if that's the best thing to do and does it make sense to do that if you lose your job? Does it make sense to do that if you're disabled? All kinds of different scenarios, and that actually is one of the most important things we like to talk about, too, that we stick with our clients. We're talking to them regularly. We're helping them as things come up. It's not just we're selling your product and forget about you. We want to make sure that, as life changes, your strategy, your policy can change with you.
We talked about that more in Episode 49 about financial flexibility and how to manage your money as life changes. If you want to go back and listen to that, we've got lots of ways that we want to help make sure that when the “what if?” happens, you're taken care of and you feel comfortable with what you could do.
Brandon: Now, of course, there are more questions those who care about you will ask. Chances are you won't be able to answer all of them. So, before you go talk with a trusted mentor or before you ask your significant other to get serious along with you, there's absolutely one thing to ask yourself first. Who do I need in the conversation in order to make a smart financial decision? [17:20.1]
I'm going to say that again. Who do I need in the conversation in order to make a smart financial decision?
Amanda: Yeah, and as you're asking that question, you might ask yourself, If I'm going to invite them into the conversation, would I want them to be fully in the conversation from the get go in all the conversations, so that they get all the facts? Because don't they really need all the facts to give you the best advice?
And then, also asking the questions like, Who is most impacted by my financial decisions? As I'm asking them for their advice, who might be looking out for their own interest? If you're asking another financial professional that you're already doing business with for advice, they might give you a different story because they want to make sure they keep making money off you, or various situations within there, too. [18:11.6]
And then, also whose opinion should weigh the most? Whoever is going to be most impacted by your decisions, their opinion should actually carry more weight than those who aren't, won't be as impacted, meaning your opinion should probably carry the most weight, I would imagine.
And it's really your future that's on the line. Thinking along the lines of “I need to make the best decision that I can for me and I'm the one that's going to be living with it for a year as to come. Am I okay with, and are the people that I'm talking to and asking for their advice, are they okay with me even going against their advice before I even ask for it?” Maybe that's something I want to bring up at the beginning of the conversation. Hey, I'm going to ask for your advice. I might not listen to it. Is that okay with you? [19:01.1]
And, also, maybe ask them, are they okay with being challenged and their own beliefs about money? Because you're going to maybe bring up some concepts and some ideas that they don't believe in. Are they willing to have that conversation in an open and honest way? And, if they're not, maybe they're not the best person to be in that conversation and maybe it actually be more harmful to your relationship to ask them for advice. Maybe. I don't know. Up to you to decide.
I know when I sometimes even ask Brandon what I should wear that day, I have to tell him before I might not agree with your answer. I might choose what you did not pick, but I'm going to ask you still, Which one do you think I should wear today? because he hates it when he tells me and then I choose the other one.
Brandon: I also think your beliefs about money, sometimes it's a generational thing. We don't even know why we think about it and there's a poverty mindset versus prosperity. There's all kinds of other things about money and our beliefs about money that we have to be thinking through. So, that's a huge question in thinking about “Where are they at on the spectrum?” just to think about it, so their beliefs about money is huge, both past and current. [20:12.7]
Now, we've put these questions into the wealth journal for this episode, so you can get that wealth journal just by going to Grandma'sWealthWisdom.com/51. It’s absolutely free and going to help you think through for yourself. Even if you don't use us, going through these exercises and these journals are going to help you, again, build a smart, stable financial future for yourself.
Amanda: Yeah, and we invite you to make sure you get this journal. Take some time. Answer the questions about who you're going to talk to and why you're going to talk to them, and what you want the conversation to look like before you actually go talk to them. It'll just help the conversation be the most helpful, and we hope this episode has been helpful. [21:02.1]
We're going to take a risk, pun intended, in the next episode and talk specifically about a controversial topic, 401(k)s and the stock market, and kind of open up a can of worms there.
Brandon: Uh-oh, taking those risks.
Amanda: If you've got a 401(k), a 403(b) or an IRA, you're going to want to hear Grandma's perspective, so hit subscribe so you don't miss it.
Brandon: So, until next time, keep building your wealth simply and sustainably, so you can break through to a smart, stable financial future.
The topics presented in this podcast are for general information only and not for the purposes of providing legal, accounting or investment advice. On such matters, please consult a professional who knows your specific situation.
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