It’s easy to see that we’ve got a financial crisis sweeping the globe, not just the US. The big question on everyone’s mind is ‘What should I do with My Money?’. Retirement savings are swinging wildly every day and we’re all wise to re-evaluate where our money is and how long it is going to be safe there!
A Safe Investment with High Return is the easy answer. An investment with high marks in all of these categories:
- Safety
- Liquidity
- Rate of Return
- Choice and Control
- Tax Favored Status
Of course we’re all concerned about the economy and a myriad of other big picture issues. But, let’s be honest and admit that we’re really interested in personal survival first and foremost. I wholeheartedly agree with this approach for several reasons. Here are two big reasons:
- You are in a better position than anyone else to to make informed decisions critical to your own financial health
- You can’t help anyone else unless you are healthy yourself. Get your own house in order and you’ll will genuinely be in a position to have a positive impact on ‘bigger picture’ issues.
Where is a safe port in this storm? Does a ’safe’ place really exist? Better yet, where is a safer place to put my money?
Okay, the bullet points above are a wish list for any investment. These items are also a good filter to determine whether an investment is a good one, and to compare different investment options.
Let’s look at a comparison of options that are attainable for most Americans
A quick filter based on our three main characteristics of a good investment.
Liquidity:
Business Ventures, Limited Partnerships, Raw Land, Investment Real Estate, and Equity in the House all fail this test. Each of these options restricts access to the investment principal or equity – it is not easy to get your money out at any time you want.
Safety:
Commodities, Stocks, Bonds, Mutual Funds all fail this test. I would be tempted to put Money Market funds in this category given recent events, but overall that is not fair so I won’t.
Each of these carries a risk of loss to all of the principal or investment. We’ve seen the damage to values on the stock market lately and oil is a good example of volatility; good stocks and bonds and mutuals have all taken a serious hit.
Rate of Return:
Money Market and Treasury Bills fail this test historically. I am tempted to put CDs in this category, but there have been some very high years, so I’ll leave them out for now.
That leaves us with three contenders for a good investment today.
- Certificates of Deposit
- Equity Index Universal Life
- Annuities
We need to use another parameters to split these three up, so review Rate of Return with numbers and then look at and Tax implications.
Rate of Return: (long-term average)
Certificates of Deposit – 5 %
Annuities – 7 %
Equity Index Universal Life – 9.6 %
Tax implication: (long-term average)
Certificates of Deposit – income tax as earned
Annuities – income tax as received, plus early withdrawal penalty
Equity Index Universal Life - tax free
So the final answer is — Yes, there is a safe place to put my money in today’s uncertain times.
Use Equity Index Universal Life as the perfect place for your retirement money. Done correctly, this is ideal for any funds you will not need for 10 years or longer.
There is no better way to achieve a balance of safety, liquidity, return, and tax benefits than Equity Index Universal Life. With all the volatility and uncertainty today, a safe haven just makes good sense… it’s where the Smart Money goes.
Mike,
The investment pyramid did not make sense to me just looking at it. The colored dots and then a few numbers showing were confusing. However, after reading your article I was able to somewhat figure out the visual.
The information was very good… even for me a non-financial person. I liked the list of investment option. I am not familiar with Equity Indes Universal Life so maybe more information would be helpful for someone like me.
One thing I recently heard from Dan Kennedy is to decide the ‘who’ first. Who is your customer and then write for them. Don’t try to write for everyone, just be focused on the ‘who’ you want to market to. This makes a lot of sense.
If I am your ‘who’, you would have to write even more basic for me. My husband has always researched our financial options and then presents it to me for our decision. So for me to read financial information, it really needs to be easy and catch my attention.
With your knowledge, I would think your ‘who’ is a more sophisticated market. Or since you have much information in this blog about college costs, your ‘who’ would be parents of college bound students. Of course, these parents would have other financial needs and interests that you can address.
I hope this helps.
Denise Gore
Thanks Denise. Good feedback.
Here is an example of Dan Kennedy’s work.
The Ultimate Sales Letter: Attract New Customers. Boost Your Sales (Ultimate Sales Letter)
I enjoy his writing and have gotten a lot out of his work.
See more of his books here: