Chapter 8: The Swiss Army Knife of Financial Strategies

Andy Horner  •  11/16/2014  •  Feature Presentation

Video Transcript

In this new, challenging economy that calls for innovative wealth-building and retirement strategies, Millennials, Gen-Xers, and Baby Boomers are all trying to find their footing and chart a path for the future. Offering relevant solutions that meet the needs and goals of today’s investors is just as important as the financial education we provide. Let me share with you a financial option with the opportunity for everyday people – YOU included – to avoid market risk and build a tax-free income.

Traditionally, there have been different tracks for saving money. You can choose between a fixed product or a securities product. A fixed account is one in which your principal is guaranteed and today pays between less than 1% to as much as 3%. With securities products, you have a chance for more growth, but you risk your principal. An indexed product is designed to offer the best of both worlds – the chance for more growth without risking your principal.

I want to highlight that again – consider how unique this product is in the financial industry – the chance for more growth without risking your principal.

Saving, protecting, and growing your money is the key to creating financial security. The concept sounds simple – but achieving that outcome will largely depend on the vehicle you choose to get there. Fixed, securities, and indexed products are all different vehicles. How do you choose the right one for you? And if you’re a financial professional, how do you help your clients choose the right one for them? 

Let’s look at the Tic-Tac-Toe grid of financial products. You can see the fixed product there on the left with two of its primary characteristics. Securities is on the right. You can circle the left column as your choice or the right. Or you could make what might be a smarter move – encircling the indexed product at center with the safety of principal strength of the fixed product and the upside potential strength of the securities product. Can you see how this move might be a winning strategy?

With a lump sum and safety of principle as your driving goal, you could put your money somewhere like a bank account or into some kind of fixed product.

That’s the main appeal of a fixed account. So what’s the downside to a fixed strategy? You’re typically not going to get a very high rate of return. We know from the Rule of 72 that a savings account, a bank CD, or a fixed product may not be the smartest avenue to take on your retirement road map. 

So what’s an alternative, and hopefully more advantageous path, people can choose? Well, they can consider the stock market and other investment products. The reason we do that is for the upside potential – but what’s the downside? The downside is that you could lose your money. The impact of losses really comes into play when you have your money in the market.

Wouldn’t it be great to discover a way to capture the best of both worlds? What if you found out that you could get upside potential AND safety of principal in one product? That’s what indexed products allow you to do. 

And that’s one of the primary advantages – or blades if you will – of the indexed product, the Swiss Army Knife of Financial Strategies. Loss avoidance with growth potential. You can participate in the market’s gains without putting any of your money at risk.

We refer to Indexed life insurance as The Swiss Army Knife of Financial Strategies because this one plan offers four distinct advantages:

  1. The potential to grow your money with zero market risk.
  2. An option that can allow you to cover the potentially devastating effects of long-term care needs.
  3. Allowing you to offset inflation and gain access to tax-free income at retirement.
  4. And of course, life insurance protection that enables you to leave a tax-free inheritance to your heirs. 

And since the only leg of the 3-Legged-Stool of Retirement we truly have control over is the personal savings leg – it’s up to you as an individual to take control of your financial future. I hope I’ve made a compelling case to you that this is one of the strongest strategies you can consider today.

(Sources and disclaimers included in the video above)