Practice Managers…“Stick To Your Last”

Apelles the Greek painter is reported to have listened carefully to the cobbler as he told him the shoe in his painting didn’t properly portray reality.  But when the cobbler proceeded to criticize the stance, the face and other parts of the painting Apelles shamelessly told the cobbler to “Stick to his Last.”[i]

Like the cobbler of ancient Greece there are many experts and specialists today who, though outstanding in their field and specialty, should learn to “Stick to their Last.” These experts and specialists regularly provide well-meaning guidance and instruction on subjects that lie completely outside their expertise. This is dangerous and even damaging to unsuspecting souls.

Tragically, because such advice is entirely opinion, speculation or hearsay it never stands up to fact, common sense or sound judgment.

CASE STUDY:

• Recently at a well-know and respected Practice Management Group meeting the group’s owner and chief executive officer got up and ignorantly told everyone in attendance that “Buying Term and Investing the Difference” was the best and safest way to grow their money.

(For those of you who don’t know, a Practice Management Group acts as a consultant, helping business owners with ideas for marketing their business…or in this case they help doctors market their services so that more people might be able to benefit from their specialty of care.)

This CEOs bad advice has been proven incorrect so many times that it’s ridiculous. But since he brought it up, let’s look at the facts once again in order to dispel this well meaning, but uninformed, counsel.

Here are the simple facts:

1. We all are in this life for the long haul, not the shortened version.
2. We all need to have our income protected for life, not just until we turn 65 or 70.
3. We all need to be reliably saving more and protecting the assets that we own.
4. We all need to have access to our savings without penalty, fees or added taxation.
5. We all need to recover the lost opportunity cost in our lives.
6. We all need to be better managers of the money we have and will have.
7. We all need to be more wealthy minded and not poverty minded.

Based on these simple facts participating whole life insurance is the only financial tool that fits the bill.

You can buy term insurance, and that’s a good thing if you are young and healthy enough so your premiums are low. That will save you money, no doubt about it.  But 9 out of 10 people never invest the difference they saved and that is a HUGE problem.

But even more significantly, participating whole life insurance after 12 years, or even sooner, has a total cost that is lower than buying term and investing the difference when you factor in what the returns might be on your invested difference.

Of course, you have to contemplate the high probability of you being sued in your lifetime.  And if you are sued and you’ve taken this Practice Management Groups ill-informed advice and have only purchased a term life insurance policy, you have no asset protection because there is no cash value in a term policy.  YOU are now better off dead than alive financially because until you die you have no liquidity.  That is why ALL good asset attorneys will tell you the first and best asset protection tool you can own is high cash value life insurance.

Now consider those who advocate buying bonds instead of participating whole life insurance, as suggested by the Practice Manager’s CEO mentioned above.  They fail to realize or understand that the life insurance industry has a much larger and better-managed bond portfolio than you can ever build in your lifetime.

Billions and billions of dollars are managed by Life Insurance Companies in the bond market today.  So why would it NOT be in your best interest to own participating whole life insurance and profit from this massive bond portfolio annually just as smart money managers and CEOs of banks and large corporations have done over the past 150 years?

That would be a question that the chief officer of this Practice Management Group might want to address next time he feels a need to spout off without knowledge and first hand experience.  Otherwise he is leaving his Last and he not only cheapens his advice he also injures unsuspecting souls while doing so.

Let’s talk some more next week…we’ll look at how you can keep more money in your control, even without the purchase of life insurance. Think that will please the CEO?

            Until then a song comes to my mind that my children used to play on the piano:  “Rap, tap, tap, tap; Rap, tap, tap, tap; Cobbler mend my shoe.”

 [i] http://idioms.thefreedictionary.com