“Nobody appreciates insurance enough…”

“Nobody appreciates insurance enough…”

I came across an article a while back that I found remarkable. It was a summary of an interview with former FED Chairman, Alan Greenspan, written by Tyler Durden of Zerohedge.com. A link to the article is below.

There are several remarkable statements attributed to Mr. Greenspan that I want to focus on in this post.

The insurance industry as we know it – or at least the actuarial mathematics that underpin it – got rolling when two Scottish ministers in the 18th century devised a fund that would take care of their widows, and the actuarial methods they used were pretty spot on and have not really changed that much since. Insurance,” Greenspan said, “is really nothing more than saving for a rainy day. And insurance, by its construction, is a major form of savings for this country.”

“The whole structure of the industry is the mechanism by which you’re converting consumption into savings,” Greenspan said, “and the only way the economy can grow is to save.”

“Insurance,” he noted, “is the most formidable mechanism we have to save as a society, and the economics of insurance have not been given proper weight by economists in how they look at the world.”

Isn’t it interesting that one of the most famous central bankers in all of banking history is talking about saving as the ONLY way the economy can grow? Aren’t central bankers constantly trying to get us to save less and consume more?

Isn’t it also interesting that he calls insurance “the most formidable mechanism” to save? Not banks, not the stock market, not real estate, just plain, old fashioned, insurance. Saving and Insurance – strange bedfellows for a central banker to be sure…

What Mr. Greenspan’s comments underscore is that he understands a few things that the vast majority of the general public do not:

Savings = Capital. When we consume less than we produce, that difference is called savings. Those savings become a pool of capital that we can put to work to increase what we produce, otherwise known as “growth.” Properly deployed capital (savings) is the only way a society, an economy, a country, a business and even your own family can grow economically.

Debt cannot replace capital. Debt gives us the ability to consume more than we produce while maintaining an illusion of short term growth. But eventually, the interest on that debt eats up everything we can produce. Saving – consuming less than what we produce – is the ONLY path to real growth and prosperity whether you are a country, a business or a family.

The banking system (including the stock market) is a system based on debt. When we deposit a dollar at a bank, the bank uses our dollar to create about 9 new dollars out of thin air and then loan those newly created dollars to borrowers. It’s called fractional reserve banking. It’s the real reason a gallon of gas cost 24 cents in 1957 and about $3 bucks in 2017. An increase in the currency supply is the cause of the disease called inflation. Rising prices are just the symptom of the disease. A debt based, inflationary system, is not a suitable place to hold or deploy capital (savings).

Insurance is a system based on actuarial science. When we pay a dollar in insurance premium, it is still just a dollar to the insurance company. Insurance companies cannot create dollars from thin air. They cannot inflate the currency. They are not inflationary. Instead, they use actuarial science to deploy their dollars to produce more for their policy owners or shareholders (and the company) in the future. It’s a text book definition of saving. This is what makes it a “formidable mechanism” for saving – it is science based and non-inflationary.

The fact is that many savvy families and businesses have known for nearly two centuries that a properly structured insurance contract can be an excellent repository for savings – and the accumulation of capital. If you are feeling like maybe Mr. Greenspan knows something about insurance that you missed somehow, maybe it’s time to look into it?

Schedule a free, no obligation, analysis today!

Source: Tyler Durden Zerohedge Article 9 11 2014

Parkinson’s Law, Victim or Master?

Parkinson’s Law, Victim or Master?

Congratulations! You finally got that raise or promotion or landed that new job. Now, will you be a victim or a master of Parkinson’s Law?

Sadly, there are many victims and few masters but the good news is that just becoming aware of Parkinson’s Law can put you on the path to mastery.Parkinson's Law

So, what the heck is Parkinson’s Law?

Parkinson’s Law comes to us from British author and satirist Northcote Parkinson. The original version stated that “work will expand to fill the time available for its completion.” This version of Parkinson’s Law explains why we always seem to complete a task at or very close to the deadline for its completion. Essentially it says; to increase efficiency, set shorter deadlines.

The version of Parkinson’s Law I want to focus on here states that “expenses will rise to meet income, unless vigorously resisted!”

If you’ve ever gotten a raise, a promotion or a new job where you made more money and within a very short period of time realized that your budget was just as tight as it was before, then you have experienced being a victim of Parkinson’s Law.

stock market crash and financial crisisHave you heard about lottery winners who won millions but are broke within a couple of years? They are also victims of Parkinson’s Law.

Lots of victims, very few masters! So how does one master Parkinson’s Law? The key is to “vigorously resist” it. In other words we have to break Parkinson’s Law and that is not an easy thing to do!

Just like setting shorter deadlines to increase efficiency of time, we have to set rules to limit the expansion of expenses to increase our financial efficiency. To prepare for the next time you get that raise, promotion, new higher paying job or any other kind of financial windfall, decide right now what your limits will be.

Maybe your rule is 50%. You will take 50% of any increase in income or any windfall and immediately put it into your savings bucket. The other 50% is yours to spend! Or maybe your rule will be 80% – 20% or 75% – 25%. The specifics of your rules are less important than setting your rules now, well in advance of the raise, promotion, new job or windfall. It just makes good sense, right?

This is what it means to “vigorously resist” Parkinson’s Law. This is how you become a master of Parkinson’s Law and not a victim of it. If you follow this super simple guideline, you find yourself magically becoming wealthier and more financially empowered as the years go by.

Once you’ve mastered Parkinson’s Law, the next big decision you have is where all that money you are saving should live. Savings account? CD? 401K? IRA? Under the mattress? There are so many options and so many opinions out there it can be difficult to sort out what to do.

That’s where I can help. I offer a free “Financial Health Quick Audit.” In a 15 – 20 minute phone session, I will review your current assets, liabilities and savings strategy and give you a score for Efficiency, Control and Safety (The X Factor) as well as a number of other benchmarks such as a diversification score, Interest in/Interest out score and safety ratio.


Click on this link to access my TimeTrade calendar and schedule your Quick Audit today…

Rate of Return Comparison…

Rate of Return Comparison…

Check out this short video by the best selling author of The Bank On Yourself Revolution and one of my fellow Bank On Yourself Advisors, Paul Nick, as they explain the real world rate of return comparison to other types of plans – using an actual policy purchased by Paul’s father in 1969. You just can’t argue with real world numbers!

Of Money and Freedom…

Of Money and Freedom…

American Flag

In the Land of the Free we are raised to believe we live in the freest nation on the face of the earth. We are taught that the constitution guarantees this freedom and that the three branches of our government uphold it and our police and military forces defend it.

Have you ever tested the validity of these “truths?” I have… When was the last time you read through the bill of rights? Google it, it only takes a minute… Life, liberty, happiness, these are the attributes associated with freedom in the declaration of independence and the U.S. constitution.

The bill of rights further defines the rights of free people: freedom of speech, freedom of religion, right to bear arms, right to property and protection from unreasonable search and seizure, right to speedy trials, to face accusers and innocent until proven guilty, right to jury trials, protection from cruel and unusual punishment and excessive bails or fines.

Did you notice the subtle difference between the constitution and the bill of rights? The constitution and declaration are talking about some very lofty and high minded ideals, where the bill of rights describes the basic rights that free people should have. Do you see it yet?

A slave can have freedom of speech. A slave can be allowed freedom of religion. A slave can even be armed and allowed privacy and some property. In fact, a slave can have every right contained in the bill of rights and still be a slave. However, a slave can never have control and autonomy over his life, liberty and happiness. A slave can never truly be free.

Having rights and being free are two related but very separate things. The delusion we face in the land of the free is that because we have certain rights, we are free. How free are you, really?

The 9th and 10th amendments are the most fascinating to me:
The 9th amendment says that not even the constitution itself can deny any rights of the people.
The 10th amendment says that the federal government of the United States only has the powers specifically given to it by the constitution and if the framers missed something, then the people and the states get the benefit of the doubt, not the federal government, it still only gets the powers specifically given to it in the constitution.
The 9th and 10th amendments are saying pretty much the same thing, but the framers felt so strongly about it they said it twice, in two different ways, so as to be perfectly clear: The people are the supreme power in the United States of America! My, but we have certainly fallen far from the tree…

If you have ever found yourself in a dispute with the federal government – the IRS, the EPA, the DOE (education), the DOE (energy), SBA, etc., then you have probably realized that we “the people” are not the supreme power at all. In a very clever move that has played out over more than a century, the federal government has seized full and complete power over our money – and our freedom.

In a modern, technologically advanced society, power over the money is power over everything, including absolute power over you and yours. What would you do if tomorrow morning you woke to find your bank accounts empty, your retirement or brokerage accounts frozen and your wages seized?

As your food dwindled, gas tanks ran dry, mortgages and car payments went in arrears and the collection notices piled up in the mailbox, you, just like most of us, would do or agree to just about anything to turn the flow of money back on. Most of us can’t survive without it.

Many federal government agencies have the power to do exactly what I just described without going to court, without a jury trial, without a judgment, without much due process at all other than a few notices in the mail. You are guilty until proven innocent and proving your case will take years of red tape and bureaucratic stupidity, during which time you are completely powerless against them.

Hmmm, this sure doesn’t feel like what I thought being the supreme power of the land would feel like!
Now, some might say, “don’t get into a dispute with them and you won’t have to worry about it.” Of course, this is pure nonsense. It’s like telling the slave, “you can have free speech and free religion and so forth as long as you don’t disagree with me, piss me off and always do what I say… As long as you know your place and remember who the master is, you can do whatever you want.”

Slavery with benefits is not freedom! A debt laden, W-2 employee with a spouse, two kids, a mortgage, two car payments, a wallet full of credit cards and their only savings locked away in some government controlled retirement plan is little more than a slave (with benefits).

To take control of your money is to take control of your freedom. One way to do that is with a Bank On Yourself plan. Schedule a free financial analysis and strategy session today to learn how it could work out for you… Request a Free Financial Analysis Now…


Musings on Freedom

Musings on Freedom

Have you ever noticed how the terms freedom and liberty get thrown around a lot, especially when it comes to discussions of the U.S. constitution or members or the armed forces. Phrases like, “The constitution secures our liberty” or “our soldiers are defending our freedoms,” can often be read or heard. So, the question is, what exactly is “our liberty?” What are “our freedoms?”

Is it free speech, freedom of religion, right to bear arms and all the specific things listed out in the bill of rights? Or are all those “rights” just symptoms of freedom? What if they are just examples of the types of experiences truly free people should be able to have? The constitution pretty explicitly says that “the people” have rights that may not be explicitly listed in the constitution or bill of rights…

There is no question that the U.S. declaration of independence, constitution and bill of rights, are unique, first of their kind documents, created by a group of very enlightened framers. Having said that, I can’t help but notice that so many people seem to have completely missed the very spirit of what these genius framers were trying to do.

People seem to think that it’s the constitution that makes them free. They think that the U.S. government is some sort of holy and divine entity that makes Americans the freest people on earth. As if freedom and liberty are some kind of gift to be handed out to the most deserving.

Guess what? The government is not an entity unto itself – it’s a collection of human beings, including the collection of human beings who wrote and ratified the constitution. To say that a collection of human beings has the power to grant freedom and liberty to other human beings sounds suspiciously like, well, slavery…

Guess what else? You were born a free human being – freedom and liberty are your divine natural state. No human being, including any government or document written by any government, has the moral or ethical right to infringe upon your natural, divine free nature.

The constitution was not written to grant you freedom. It was not written to list out your liberties. It was written as an attempt to restrict the collection of human beings we call government from encroaching on the natural rights of all human beings to be free. The purpose of the constitution was to keep government in a very small box – and therein lies its genius! Freedom and liberty are not genius concepts, they are self-evident.

The genius is in recognizing that government ALWAYS expands its power through the forceful limitation of the divine human spirit of freedom. The genius idea was to try to use the laws of men to keep the government monster in its cage. Of course, we now know that though genius the constitution may have been, it failed miserably. The monster has clearly escaped its cage – and has reproduced exponentially – recruiting countless blind and ignorant humans to its ranks along the way…

So why is this distinction important? It is critically important because it is only when we can view the world through the clear lens of a divine, free human being, that we can recognize things for what they truly are. When we see government as the grantor and defender of our liberty, then we can more easily justify its actions as necessary or even as “right.”

If we perceive the government, through the constitution, is the grantor and defender of our freedoms, then perhaps we owe it some allegiance. When it says that it needs 10% or 25% or 50% of our money, we may say, “well, I guess that’s the price we have to pay for our freedoms.” When it spends that money to kill and maim millions of people under the auspices of “defending our freedom,” we may give it the benefit of the doubt, look the other way – or even buy in to the delusion of the moral high ground.

When we come to understand that we are already naturally free with or without it and that “it” is actually “them,” we can then perceive the reality that a collection of human beings is simply stealing from us (by force) for its own designs. We can only defend against a thief when we perceive the thief’s actions (or potential actions) as theft – as something fundamentally unethical, immoral, harmful and wrong…

When this shift in thinking occurs, we finally begin to structure our lives from a different standpoint. We reorganize our values and find that something we once took for granted, something like privacy, particularly financial privacy, has become of paramount importance.

It’s important, not because we have anything to hide or we are somehow criminal or unpatriotic (whatever that actually means…), but because we recognize the uncaged monster on the loose. We finally understand that our highest duty as a divine, free, human being is to defend against the monster, even to resist it with all our might. We don’t “owe” our allegiance to any one, let alone any government.

The framers of the U.S. constitution would roll over in their graves if they could hear the scores of American school children “pledging” their allegiance to any nation-state, especially the United States of America – because what the framers intended was that the government of the United States of America would pledge its allegiance to the American people, not the other way around.

We are the ultimate defenders and protectors of our own divine freedom and liberty. No other human being can morally grant it. No other human being can morally defend it – unless we first defend it in our own mind, body and soul. Recognizing and living by this simple, self-evident, albeit admittedly dangerous, truth is to truly embrace the ideals and spirit of the U.S. declaration of independence, constitution and bill of rights – regardless of what nation-state issues your passport…