As recently as August 15, 2015, Dalbar, the independent investment research group out of Massachusetts, released their Quantitative Analysis of Investor Behavior Study which documented that the average investor is only earning 2.6% on their portfolio not the 6% or 8% that most financial planners refer to as being the average.
By the way, the average investor that Dalbar reveals in this study “Includes small and large investors as well as professionally advised and self-advised investors.” And knowing that, is why you should Never Accept Less.
That’s right, you should Never Accept Less. In fact, you should expect and receive more, guaranteed. Guarantees to earn more than the average investor because
If you earn 8% on your $30,000 savings/investment over a 22-year period of time (age 45 to 67) you will have $1,663,703. $660,000 of that will be your own contribution ($30K x 22) and the balance of $1,003,703 will reflect the 8% growth.
But what is often ignored, forgotten or overlooked is your protection. Your assets are completely naked, exposed and vulnerable unless you have some type of life insurance to protect them. And so most advisors will encourage you to take out the cheapest and most inexpensive life insurance to protect your assets. In doing so you will end up spending a total of $827,801 over the next 22 years and end up with only $835,902 after all is said and done. $835,902 is not 8% it is only 2.18% and that is BELOW AVERAGE!
But remember you should Never Accept Less! Why should you throw your money away when 99% of those policies NEVER EVER pay.[i]
Here is the better alternative:
Accept a 4.24% internal rate of return and at age 45 (or at whatever age you are today) pay your $30,000 for a whole life insurance policy that allows you to participate in the dividends of the company. Then 22 years from now (age 45 to 67) you’ll have $1,064,144 and possibly even more depending on the profitability of the company. And along with that $1,064,144 you will also have $2,217,720 of asset protection of which $1,761,003 is guaranteed and can never be taken away from you!
Of course, there is a third option. That option is to keep doing what you are currently doing. Accept the average rate of return of 2.6% that Dalbar statistically proves most investors are earning, and 22 years from now you have $875,658. And this means you’ll have a meager $47,857 left over after purchasing the cheap term life insurance to protect you assets. Poor choice.
But an even more shocking fact is that most people are not saving $30,000 a year. And that means their bottom line is even worse than this bleak scenario. So its time now to save more and use that savings to lock in guarantees that will protect and provide for your future needs and desires.
Participating Whole Life Insurance designed to accumulate maximum cash value CAN provide the guarantees that you need because you deserve it and because it is critical to your future.
Never Accept Less!
[i] Penn State Study On Term Life Insurance Pay Outs