(00:06): Some of you saw the title of this episode. What's more important than life insurance and thought will lots of things. Many say life insurance as a necessary evil for parents with young kids or to cover a funeral. Here's what might surprise our most dedicated listeners. We agree cure basic life. Insurance is either a necessary evil for those who have someone who depends on their income, something to cover your final expenses. You don't have to leave the bill to someone else or a luxury for the rich who have money to spend today. We wanna share with you, what we have come to believe is the largest need for the largest number of people, and yet most see the solutions as necessary evils or just for the rich who can take risks, keep listening, because we're about to reveal an insight that could unlock wealth. You've never dreamed of hi, I'm Amanda. And welcome to the wealth wisdom financial podcast episode one 14, what's more important than life insurance And I'm Brandon. And back on 12 31, 20 21, it seemed like a long time ago, but it was only nine months ago. We released an episode and it's episode number 97, making a contract with your future. This is where we share how life insurance is really a contract with our future selves and helps us fulfill our promises to our loved ones. But also to ourselves, this episode is not about life insurance. It's about, I need much bigger and yet most of us don't realize that we have this need, but every one of us do, we're gonna start by defining what is a need. Then we've got two case studies for you. Finally, we'll show you how you can strategize ways to fulfill this need along your journey. Now, warning, this might be a big mindset shift for you, and it is for a lot of people. So be sure before you continue listening that you're ready and open-minded for a truly historically wise insight today. And we'll go to our little intro to give you time to prepare and be ready to have your insights blown. I guess I, something like that.
(02:37): So are you sick and tired of hearing the same old, conventional financial thinking? We feel you we're fed up with the same old trues that fall flat. When you get into the unique opportunities and challenges of specific situations, this show, it's all about bringing you historic wisdom around building wealth, with practical insights on how to apply it to your journey. When conventional financial thinking, doesn't get you where you wanna go. You need a wealth wisdom. Let's master wealth building together. Okay? So here we go. Typically financial professionals are going to invite you to consider your wants versus your needs so that you'll spend less and invest more with them raising their fees. Of course. Right? And we wanna flip the script and ask you, what do you really need? Do you need a huge ROI or turn on investment? Do you need an emergency fund? Do you need budgeting software? Do you need to give yourself a break and allow yourself to spend a little more freely and going to get that latte? Do you need life insurance? What do you truly need? First, a copy that only you can determine what you really truly need. Take what we're about to share and weigh it against your unique situation. See what rings true for you. Work with a professional to help you implement test the strategies that we come up with. Only you can decide what's right for you. What we've found working with many people is that for some life insurance is a need. They need to protect their dependence. In case something happens to them for others. It's a want, they wanna leave a legacy beyond what they could save up themselves. What could be more important than protecting dependence or leaving a legacy? That's the question we want to answer today. First, let's get to the basics at its core. All each of us really need our three things. Say it with me, food, food, water, Water, And shelter Shelter. Yep.
(04:54): Sometimes it's helpful to remember that truth. Everything else is really a want even clothing is optional in some communities, or if you never leave your shelter, seeing like that, simply food, water shelter can be very freeing rather than restrictive.
And yet we do live in 21st century America, where you do need to wear clothes, right? And where food, water, and shelter are getting more and more expensive, making, earning an income a need. Then there are all kinds of needs in order to earn an income like access to the internet, to look for jobs and do interviews. Something that didn't even exist 50 years ago. Yeah. So before we make needs at once more complicated than it needs to be, since it is so subjective, let's move on to our case studies for today. Just keep in mind. This idea of needs are actually really simple and basic. Keep that idea with you as we go. The first case study should feel very familiar to you is the journey most of us take. So let's take Joe. Joe is the average American from the time Joe is 23 to when Joe is 70, she spends every dime. She earns except for a small portion. She puts away for retirement. I'm familiar, but then in retirement, she spends every dime. She saved every penny, those dimes grew to and all the unearned income she gets from social security. So it's safe to say, Joe spends about 50,000 per year, some years lower when she's first get starting her career. And many years higher as her income grows. And the cost of her purchases are increased by inflation. It gets complicated, but let's pretend it's 50 K per year for 60 years from age 23 to age 83, that's 3 million over Joe's adult life. And since show is the average American more than one third of her spending goes to paying debt, including interest. That's 1 million going to debt, payments, mortgage, credit cards, car loans, student loans for herself, and maybe her kids major expenses. She didn't save for like a new roof, vacations or braces for the kids, emergencies that cause her to take out a loan and so forth. Does that sound familiar?
(07:35): Joe's need to finance. If it's a third of her income is roughly a million dollars. Now ask yourself, assuming Joe is just your normal American with 2.5 kids and a healthy spouse. Does she need a million dollars in life insurance? Some might say yes. Some might even say she needs a lot more than that. And I'd probably say that's probably a good idea, but then I'd ask doesn't Joe need a pile of cash to keep her from paying a million dollars toward debt throughout her lifetime. Wouldn't that be even more helpful? Isn't she way more likely to have this debt and to stay in the cycle of debt than to die. Young. Might we say her need for financing is greater than her need for protection. Now, remember we said life insurance is important. It's important to protect your income potential one of your most valuable assets, but could the need to get out of a cycle of debt payments, be an even bigger need. Believe that question for you to ponder because you might find your answer. As we look at a second case study, the second case study is gonna seem less familiar to you. Maybe possibly it's the journey of trust fund kids and others who start off their adulthood with wealth. We'll call this person. Chris, Chris receives a million dollars upon reaching age 23. Congratulations, Chris. Nice. Yeah. Chris decides to just live off the interest so that that $1 million generates and tries the hardest not to tap into the principle. The million dollars that they start with this ends up being an average of you guessed it $50,000 per year, some years higher when investments are up some years lower when the investments are down. But that means Chris lives on about the same amount of income as Joe $50,000 per year for let's say 60 years or 3 million total. And yet crystal has major expenses buying a home, paying for college for the kids and new roof, vacations braces for the kids emergencies, so on and so forth. But unlike Joe, Chris can simply use some of the $1 million nest egg and then plan to reinvest some of the earnings to build back up to that million. Chris never has to go into debt.
(10:04): Let's the same question we ask about Joe, does Chris need 1 million in life insurance? Most people would likely say, no. Chris has the million dollars already. Why pay for life insurance? And then our main question for today, what could be more important than life insurance for Chris? And if you step back and look at its roots, Chris is actually just doing the same thing. Joe is Chris is financing every major purchase while Chris isn't using debt. Chris is using that nest egg. Every time Chris dips into that million dollar nest egg, there goes all the growth those funds could have gotten until Chris gets that account back up to 1 million. Chris isn't paying interest. Chris is losing interest. Sounds like a staircase up and down. And depending on how volatile the holdings of that account are, he could also be losing a lot of the growth being used as personal income. Perhaps this trust fund kid has to now go get a Job because his million dollars is banishing. Uh, oh, so what do these case studies really mean? What are we trying to share here? You know, we made it really simple and it's really this way of saying that having accessible cash for all the things people would normally use debt to purchase is super important. The interest save can really add up over time. And then the flip side paying cash. Isn't the answer either. This is one of the major problems of 401ks and IRAs. The money is locked up. So people go into debt when they have the money for the thing sitting right there, they just can't access it. And seriously, I see this all the time where they need that. And it's just like out of reach just enough while they're going into debt in other places. And they go into a vicious cycle.
(12:06): Yeah. And it's actually a cognitive bias or fake news. in our brains where we do this thing called mental accounting, or some people call it a money jar mentality. We have our money in different accounts, whether physically like a 401k and then a savings and then a brokerage. And, but we give each account a purpose or we pretend like we have these different money jars and we give the money a job, good thing. But we don't allow ourselves to change their jobs or to make adjustments because we're locked into what we've already said. Be like somebody putting money into a vacation fund and then they have to replace their car tires. And so they go into debt to, you know, pay 29% interest to replace their car tires when they could just use their vacation fund and then fill it back in. So what we wanna emphasize is like, it's all one wallet mm-hmm . And for most people with their wallets, they're either paying interest or they're losing interest when they pay cash. Yeah. And paying the cash. Isn't the answer either when you pay cash, you lose all the money that, that cash could have grown into what they call opportunity cost. This is one of the major problems of savings accounts and brokerage accounts. When you withdraw the cash, you don't get any growth on that money that you took out. That's a problem. So here's the question. Most of us never hear whether you're a Joe or a Chris. However you identify. Here's our question for you. What if you could have your cake and eat it too? What if you could get life insurance that develops a cash component that you could use for the things people usually would go into debt for, but still protect your loved ones, leave a legacy, whatever the purpose of that life insurance is. And what if the cash value of that life insurance continued to grow at the same rate as if you didn't take any money out to go make those major purchases over and over again. What if your need for financing and your need for life insurance can be solved in the same product. Wouldn't that be pretty cool.
(14:20): Yeah. Honestly, if this is someone's first time hearing about this optional thing, all that sounds too good to be true, right? People are saying, well, that is impossible. You can't have your cake and eat it too. And yet this is exactly what we've been doing for the last eight, almost nine years now. And we were like that too. We thought it was too good to be true. We didn't think it was possible, but we did it. And we, we added a very specific kind of life insurance to our, for financial portfolio that we used to pay off student debt, get through an emergency, sell a business, start a new business, buy a home and buy a real estate property. And that's a lot of things that we've done in the past eight or nine years because of the need for financing and all the while we've protected ourselves from losing interest, paid to others and from losing the growth of our funds while we use them on top of all that we've protected each other in case something happens to one of us and our son in case something happens to both of us at the same time. Amazing. Yeah. A quick warning here though. This isn't just any kind of life insurance, it's a very particular kind. That's only offered by handful of companies. Please reach out to us to make sure you're finding the right kind for you. Even if you think you already have one of these already, you might not. We'll share in a minute how you can reach out to us to confirm with no obligation, no upfront cost, nothing like that. Really just to see this isn't the right fit for everybody, but you don't know until you look into it.
(16:10): Yeah. But I do think everybody's need for financing and working in the banking industry. Most people are doing that. They just don't even realize it. So to cut to the chase here, whether you are a Joe or Chris, you know, the basic needs you as a human, have food, water and shelter. It's that simple. What are the basic needs of your financial portfolio? What it's food, water and shelter equivalence, certainly a little subjective and will depend on your goals. One way to think about how to identify your financial needs is to consider your biggest financial dangers. We need food, water, and shelter because hunger, the hydration and the weather are some of the greatest dangers to our lives. We can think of some of the greatest dangers to your wealth as well. Interest paid to others, breaking compound, interest, opportunity costs, loss of income, all kinds of things, right? And we suggest trying this line of thinking on for size, what financial product would protect you from these greatest dangers and threats. Great way to think about it. So if you're ready to feel financially protected from some of the greatest dangers to your wealth building journey, we've found our financial security over eight years ago, and it's truly protected us from all of these dangers. We'd love to help you see if it's right for you. Remember it's not right for everybody, but you don't know until you look into it. The first step is to schedule an intro call with one of us at grandma's wealth, wisdom.com/call the call's only 15 minutes. And we'll simply answer your initial questions. Get to know one another, a little bit, share about how we work, decide the next steps from there. It only takes a couple minutes to find a time secure your spot on our calendars at grandma's wealth wisdom.com/call. Put a link in the show notes as well or open your browser now and type in grand MAs wealth, wisdom.com/call.
(18:18): Awesome. Amanda, thanks for sharing and all the stuff you do here. Now, as you guys listen to this, I really want you to share this. This is impactful for everybody. So share this episode with a friend. And if you found these episodes helpful, write us a review. We'd love to read it publicly and, and let people know how impactful this is for you, cuz we really wanna help you break through to a smart, stable, financial future. And we've got a very special announcement in our next episodes. It's also a crucial mindset to have as you pursue financial independence. So be sure to hit that subscribe button so that you don't miss what I believe is gonna be one of the best ever episodes that we've done. And we've been doing lots of episodes and podcasts. Yeah. And these last few episodes including today have really been building up to the next one. So be sure not to miss it until next time. Keep filming your well simply and sustainably. So you can break through to that smart, stable, financial future. We hope you live long and profit. The topics presented in this podcast are for a 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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