Give Your Dollars a Lifetime Guarantee

Give Your Dollars a Lifetime Guarantee

Lifetime-guarantee.jpg Not much in life is truly “guaranteed.” We can’t guarantee the weather, what other people will or won’t do, the direction of the markets, or even if we’ll be around to see tomorrow.

And even most “guarantees” have exceptions.

Your purchase is guaranteed – but only for 30 days, or unless you drop the item, get it wet, or use it in a way that invalidates the warranty.

One company printed a tongue-in-cheek limitation about their own lifetime guarantee for their rugged luggage and phone cases: “Does Not Cover Sharkbite, Bear Attack, or Children Under 5.”

Sometimes you have to jump through hoops to claim a money-back guarantee. You might have to return the unused product or prove that you used it before you can even request a guarantee. One skin product company required customers to send pictures of themselves taken with the product and a newspaper showing the date, one at the beginning of the 90-day-trial period and another at the end.

What’s a guarantee worth, anyways?

Guarantee-your-money.jpg If the company making the guarantee has a solid track record, a guarantee is valuable! Guarantees give buyers confidence, reduce stress and provide assurance. They limit risk. And they help purchasers make decisions about who they can trust and where their money might be well spent.

Oddly enough, people usually put their money in places with few if any guarantees. And without guarantees, even the most trusted places to store our cash can let us down.

Mortgage bonds, previously thought of as reliable and boring, collapsed in the financial crisis. The housing market followed, with trillions of home equity lost. Muni-bonds, typically another safe haven for money, have been disrupted by bankruptcies. Enormous companies assumed to be stable drivers of the economy such as Enron and WorldCom collapsed with little warning. And the elite brokerage that performed so consistently turned out to be Ponzi scheme.

Some financial products do come with guarantees. Banks have FDIC insurance and CDs offer guaranteed rates, although the current anemic rates “guarantee” your savings will not keep pace with inflation.

Term life insurance provides a death benefit that is practically “guaranteed” not to be paid, since most term policies expire long before the insured does.

But there IS a place where your money can provide you true “lifetime guarantees.” Participating whole life insurance from a mutual life insurance company offers guarantees that should not be overlooked… especially if you’re not the type of person who likes to gamble with your dollars!

When you buy a whole life policy from a mutual life insurance company, you’re purchasing a financial product known for its guarantees:

A guaranteed death benefit. Since death is a “when” and not an “if” event, we think that’s a pretty important guarantee! Term life policies can be useful, especially to young families on a budget, but they are designed to be temporary policies, not permanent life insurance. They’re like appliance warrantees – they assure you of temporary protection, but you’re not likely to need it while it’s in force. With whole life, as long as the premiums are paid, a legacy benefit is assured.

A guaranteed level premium. You premium will never go up with whole life insurance. Quotes for term life insurance increase dramatically as you age until they become cost-prohibitive. Premiums have risen on other types of permanent life insurance while policies were in force. However, your whole life policy premium will remain the same for life, or until the policy is paid up.

Guaranteed cash value. Whole life policies have a guaranteed cash value that is net of all costs (mortality costs, company expenses, agent commissions). Additionally, that guaranteed cash value is guaranteed to rise every single year even if no dividends are paid. Your gains are locked in, and unless you withdraw from it, your cash value will only ever go up.

Cash value can be guaranteed because of the following guarantees:

A guaranteed mortality rate. This means that your cost of insurance inside the policy is pre-determined. No ugly surprises or “imploding” policies.

A guaranteed expense factor. Policy expenses are guaranteed not to exceed a contractually determined amount.

Guaranteed growth of your cash value. Whole life policies guarantee a minimum interest rate (typically 4%) subtract the internal costs of the policy. This growth does not include dividends, which have historically been paid, but are not guaranteed.

Your cash value will not “roller coaster ride” with stocks, interest rates, real estate prices or politics, and your savings are guaranteed to grow even during market crashes and periods of rock-bottom interest rates.

Perhaps you’re hoping for more than the minimum guarantee? You’ll love this next guarantee then…

A guarantee of participation in any profits of the mutual company. Premiums are used to pay claims, cover operating expenses and policy costs, and fund required reserves. Profits over and above operating expenses are distributed back to policyholders in the form of dividends. This is because mutual insurance companies are “by definition… owned entirely by their policyholders,” according to the National Association of Insurance Commissioners, and “profits earned are returned to policyholders….”


Dividends, though not contractually guaranteed, have historically been paid in addition to the guaranteed minimum returns of whole life policies. Declared annually, dividends have been paid by major mutual life insurance companies every year for well over 100 years through every economy imaginable. Whole life dividends were paid even through the Great Depression and the Great Recession, which gives you an idea of how solid this guarantee is!

By purchasing Paid-Up Additions with dividends, policyholders increase both their cash value and the amount of the death benefit. Through PUAs, dividends become part of the guaranteed cash value, guaranteed to rise every year. In this way, your dividends earn their own dividends!

Your ability to borrow against your policy’s cash value is also guaranteed by your policy contract. Typically you can borrow an amount equal to 90 or 95% of your cash value from the insurance company. And you won’t ever have to justify your reason for borrowing or prove your “creditworthiness” to do so. With many mutual life insurance companies, you can even lock in a guaranteed interest rate for any future policy loans.

Customized guarantees. Depending on which riders are chosen, you can also be guaranteed:

  • the ability to purchase more insurance in the future, regardless of health,
  • that premiums will be paid for you in the event of disability, typically until the age of 60 or 65 (depending on your policy),
  • access to a portion of your death benefit for long-term care, if needed, and
  • the ability to accelerate your death benefit in the case of a terminal illness.

Are guarantees right for you? You don’t need to ask your doctor, just take the quick true/false quiz below:

T/F You understand the importance of having safe, liquid savings in addition to investments.

T/F You want a good, safe place to store cash where you can earn more than the banks are paying.

T/F If you could easily leverage more cash, you could capitalize on more opportunities.

T/F You enjoy sleeping at night and don’t want to leave your financial future to chance.

T/F When you pass away, you want to leave a legacy (or an additional legacy) to loved ones and/or special causes you care about.


If you answered “True” to three or more questions, we guarantee you’ll appreciate whole life insurance!

To find out more about the power of whole life insurance when used as a replacement for other cash equivalents, you may wish to read Live Your Life Insurance, a book by my friend and colleague, Kim Butler. It explains how to use whole life insurance strategically so that YOU benefit from your own life insurance.

And to find out how a whole life policy might perform for you… simply reach out and request a policy illustration. We would be happy to provide you with an illustration as well as additional information, and there’s no obligation… guaranteed!

© Prosperity Economics Movement


Term or Whole Life: The Third Option

Term or Whole Life: The Third Option

“The third option is that other possibility…”

– Lynn Barrette, Counselor and inspirational blogger

The Convertible Term Insurance Solution

“Whole Life or Term Insurance?” It’s a never-ending debate amongst financial advisors and self-proclaimed experts. Today, we’d like to suggest a third option.

But first… let’s summarize the two most popular and obvious choices:

Term life insurance allows the insured to afford more coverage for less premium, thus putting greater protection in place, in the form of a death benefit. However, term life insurance policies rarely provide a benefit, because they only provide coverage for a certain period of time and typically expire (like product warranties) before they’re likely to ever be used.

Like most other insurances, term life is an “if” insurance, not a “when” insurance. A benefit is paid only IF your house burns down, your car is vandalized, or someone passes away long before expected.

Whole life insurance, on the other hand, is a “when” insurance. It is a permanent policy that allows the policyholder to build liquidity in the form of savings while building equity in a life insurance policy that will provide a benefit WHEN the insured passes. Purchased through a mutual insurance company, such policies have a long history of paying dividends, provide tax-advantaged growth, and an option to borrow against the equity in the policy.

Opinions run strong on this matter, and life insurance shoppers are made to feel they have to choose one option or the other.

We’re led to believe it’s an either/or dilemma, and as we argued in Busting the Life Insurance Lies, often “both” term and whole life makes sense. But what if we can actually have both in one policy?

Think about questions like:

  • Steak or lobster?
  • Cats or dogs?
  • Ginger or Mary Ann?

These questions are designed to make us pick just one. But what if we want both? Surf and turf can be pretty delicious, after all.

Life Insurance: Should You Rent or Buy?

Sometimes insurance policies are compared to a home that you can either buy or rent. Term insurance is like renting life insurance; you only get to keep it for a certain term, and when that term expires, you no longer have it. With whole life, as soon as you make your first premium payment, you’ve begun the process of “buying” the whole asset. This is similar to the way you purchase a home by making your first mortgage payment.

But there’s a third option when it comes to both homes and life insurance policies…

Some people find a home they can “rent to own.” In this arrangement, you, the lessee, would rent the home while securing an option to buy it at a later date. In a lease-to-own agreement, you don’t HAVE to buy it, but you CAN if you choose to. You know you want to buy a home soon, and you’re getting ready.

Did you know that you can “rent to own” a life insurance policy, too?

These types of policies are known as convertible term life insurance. A convertible term policy gives the insured an option to covert a term policy to a permanent, whole life policy at a later date.

A convertible term policy is typically a level term life insurance policy (with a level death benefit for a specific term or length of time, such as $500,000 for 15 years), and all or part of it can be converted within a specified time frame. You can apply for a convertible term policy today, put it into place in 4-8 weeks, and decide later if and when you’d like to convert it to a whole life policy… without having to re-qualify.

This could provide a perfect solution for you if you:

  • don’t want to leave your future insurability to chance;
  • know you want whole life but are currently on a “term” budget;
  • already have a whole life policy and want to lock in your ability to purchase more;
  • want to protect your growing income and assets;
  • have (or expect to have) children to whom you wish to leave an inheritance;
  • wish to have a future option for storing cash in a tax-advantaged environment; or
  • want to increase your death benefit permanently while keeping premiums low right now.

Is convertible term insurance a fit for you? Consider the following…

Five Things to Know about Convertible Term Insurance:

1. It locks in your insurability.

This benefit is of utmost importance, whether you realize it or not! You can only obtain life insurance when you are perceived to be relatively healthy, just as you can only obtain home insurance when your house is not on fire!

You also may be able to lock in a better qualifying class than you could obtain later, which lowers your insurance cost. It is not unusual to experience higher blood pressure, blood sugar, or cholesterol levels, etc. as you age. By obtaining a convertible term insurance policy, you guarantee future insurability and keep your options open.

Future insurability may be especially important to you if you are healthy now, but there is a family history of diabetes, heart disease, or cancer. However, it can’t be emphasized enough… you have no way of knowing what the future brings, and your insurability can change in a moment.

2. You have to convert within a certain time frame.

Typically, convertible term policies can be converted only during a portion of the term, such as the first half of the policy term. For instance, if you own a 10-year convertible term policy, you might have five years to do the conversion. You’ll want to fully understand the time frames of the policy and manage the policy appropriately.

3. You can convert just a portion of the policy to whole life insurance.

If you obtain a convertible term policy with a death benefit of $1 million, and wanted to only convert half of it down the road, or convert a portion of it each year, that is typically an option.

Keep in mind though, the company may have a minimum amount for a convertible term insurance policy, which could affect your options. If you purchased a $200k policy, and $200k was the company’s minimum amount for convertible term, you could convert a portion to whole life, such as $100k, but you would not be able to keep the remaining amount as a convertible term policy.

4. You want to insure your “Human Life Value,” not conduct a “needs analysis” to determine the optimal amount.

Life insurance companies won’t give you insurance in any amount you want. Someone making minimum wage with minimal assets will not be able to obtain $10 million in life insurance; it has to make sense! And there are two common ways to determining how much life insurance you should get.

The “needs analysis” method calculates what your family “needs” in order to get by should a breadwinner die. It may consider the amount needed to pay off a mortgage, pay college tuition, or maintain a certain standard of living for a surviving spouse.

We prefer measuring “Human Life Value,” which represents a person’s economic value, measured through their earning ability or by their assets. This is the method that insurance companies use to determine the amount of insurance a person can qualify for.

Typically, HLV is 15-20 times a person’s income, although it can be up to 30 times for a business owner. When the insured is retired, another way to determine HLV is a measure of gross assets, including debt such as mortgages.

We prefer HLV because the needs analysis method typically short-changes heirs and limits the usefulness of life insurance. Since life insurance is the most effective way of passing assets to the next generation and/or funding foundations and charities, plus an efficient financial vehicle for storing cash, wouldn’t you want the maximum amount?

5. Convertible term is a fantastic option if you WANT permanent insurance, but don’t want higher premium payments right now.

Convertible term policies are competitively priced. Premiums are only slightly higher than regular term policies for healthy individuals, even though you are putting a potentially permanent death benefit in place.

There is even a cost savings when you convert. An amount equal to one year of convertible term premium payments is typically credited towards your new whole life premiums.

Too often, people delay obtaining life insurance until it is too late. There are many reasons for this procrastination, but if you are delaying because the type of policy you want isn’t quite within your budget, convertible term may be your solution.

Lock in a Lifetime of Protection

Like “steak or lobster?” the question of “whole life or term insurance?” is almost exclusively presented as a false dichotomy. A false dichotomy sets up two apparently opposite choices, and tells us we have to pick one because there’s no way for the two to coexist.

The implication is that you can (or should) buy one or the other, but not both, and there are no other options. The question polarizes the beneficial effects of a life insurance policy into a false dichotomy of “now or later?”

Do you save money now (lower premiums for term) or later (by securing level premiums with whole life)?

Should you get the maximum death benefit you can afford now (term) or secure a permanent death benefit that will provide a guaranteed benefit later (whole life)?

Of course, you can purchase both term and whole life insurance. This can be an excellent option, and one that we often recommend. However, convertible term is the third choice that leaves your options open.

If you wish to consider this option, we’ll be happy to provide you with a no-obligation quote on a convertible term policy. You might be surprised how affordable it is to lock in a lifetime of protection!

©Prosperity Economics Movement

Alternative Investments: Non-Correlated Assets for a Better Portfolio

Alternative Investments: Non-Correlated Assets for a Better Portfolio

“Some people don’t like change, but you need to embrace change if the alternative is disaster.”

– Elon Musk

alternative investments not stock market

Investors have short-term memories, which is why so many cling to the stock market, even when it’s on a downward trend, or overdue for a correction.

If you have lost confidence in the market, or are simply looking for WHERE you can invest OUTSIDE of the stock market—safely and profitably—you’re not alone.

So why do even nervous investors still cling to mutual funds and stocks? We think it’s due to one of these reasons:

  1. “Already made up my mind.” They aren’t open-minded to try something new, even if they are unsatisfied with their current strategy.
  2. “Risk equals reward.” People mistakenly believe that the stock market roller coaster ride is required if they want to earn a good rate of return in the long run. (We’ve been well-conditioned to believe this! See this article about the insanity of risk assessment profiles.)
  3. “You don’t know what you don’t know.” Some investors just aren’t aware of other options. They lack the knowledge, confidence, and guidance to seek better alternatives.
  4. “What will they say?” People have relationships with investment reps, planners, and advisors who don’t offer alternative investments (or who actively steer their clients away from them because they don’t understand them, don’t sell them, or both.)
  5. Inertia. Sometimes, people have educated themselves and want to try alternatives, but it’s easier to put it on your “to do later” list and convince yourself that the sky really isn’t falling (at least not yet), so why not just avoid the topic with your planner, spouse, parents or friends who aren’t as open minded as you a little while longer?

Let’s face it: typical financial advice tends to give very limited options, fixating on “how much of your portfolio should be in stocks, and how much in bonds.”

We say, “Neither of the above!” Stocks and mutual funds ultimately rely on speculation, and bonds (depending on if you’re talking high quality bonds or junk bonds) range from “risky with fair returns” to “safe with weak returns.” you really stuck between high risk and low returns, as typical financial planning would have you believe?

No, you’re not!

Investments that are now considered “alternative” (because they are not the stock market) have been helping people build wealth for decades, even centuries before the financial planning industry even existed.

I never want to have to explain to a client why they lost money! For this reason, I only recommend assets which I believe to offer protections against loss of principle, and non-correlated investments that don’t rise and fall along with the stock market.

Below I list some of our favorite investments not correlated to the stock market. These investments have generated healthy single digit and low double digit returns for clients, without the roller-coaster ride of stocks.

Life Settlements: An excellent investment for growth non-correlated with stocks For those looking for excellent asset growth with minimal risk, life settlements are a very attractive option, offering investors a way to participate in the secondary market for life insurance policies.

Just as real estate deeds of trust can be bought and sold, so life insurance policies and the assets they represent are bought and sold on the secondary market. Life insurance has been considered an asset class since a Supreme Court ruling in 1911 judged that life insurance policies are private property that can be assigned or sold to others at the will of the policy owner.

Life settlements invest in life insurance by purchasing policies that have become unwanted, unneeded, or unaffordable to elderly policyholders. In this way, they represent a true “win-win” scenario. Policyowners nearing life expectancy are able to turn a death benefit into a living benefit they can use now. At the same time, investors are able to purchase an asset with a guaranteed future value, rather than grow an asset with an unknown, perhaps even lower future value.

Although most investors have never heard of life settlements, they have been used in institutional investing for decades. Some of the reasons life settlements have grown in popularity include:

  1. Returns are non-correlated. Life settlement investments are not correlated to interest rates, housing prices, stock prices, political events, or any outside influences.
  2. Very limited downside risk. Life settlements are based on actuarial math, not stock market speculation. As policies are purchased for a discount and costs such as future premiums are factored in, losses are unusual.
  3. You’re in good company. Results of course vary and are not guaranteed. However, sources such as have confirmed that Berkshire Hathaway and Bill Gates, along with major institutional investors, have invested hundreds of millions in life settlement portfolios.
  4. High Safety. Life insurance companies are among the strongest financial institutions in existence. Only seasoned policies are purchased for life settlements, and death benefits are always paid when the time comes.

Formerly for institutional investors only, there are now options for accredited  investors (with a net worth of 1 million and cash flow of $200k or $300k for couples) to purchase private equity funds that hold life settlements.

As with any investment, it is important to understand how it works and who it is best suited for. Life settlements are not liquid and the investment time frame and exact rate of return fluctuate. Required minimum investment with our life settlement partners currently begins at $100,000, and money is typically invested for 7-10 years.

Commercial Bridge Loans: Our Top Investment for Cash Flow 

diversify-investments-out-of-stocks Bridge loans on commercial and investment property can be an excellent choice for investors looking for immediate, steady, substantial income. Bridge loans allow investors to capitalize on real estate without the hassles of being a landlord.

Also known as “hard money loans,” sometimes they are “rehab loans” as well (though not always), bridge loans provide temporary financing (typically 6 months to 3 years) at higher-than-typical interest rates.

Real estate investors are eager to secure these higher-interest loans from private lenders because it has gotten more difficult to obtain financing for anyone with less than perfect credit. Bridge loans are often short-term loans made to other investors and business owners who need temporary financing and can demonstrate an ability to pay, or occasionally on lease-to-own homes.

Investing in carefully screened commercial mortgages and bridge loans can provide you with reliable monthly income with high single-digit and even low double-digit returns, with low risk… provided that the loans are properly vetted and sources.

There are many benefits of becoming a private lender for bridge loans that make it worth serious consideration for anyone who needs income:

  1. Reliable: Monthly income payments may come directly from the company that sources the loans, not the borrower. In some cases, the company that sources and services the mortgages even holds a secondary interest to assure your best interests are represented.
  2. Secure: Assets are backed with real-world assets, often secured by first position deeds of trust. Loan-to-value never exceeds 65% and is often lower, allowing for market fluctuations. Properties are valued by experienced professionals and borrowers are also vetted.
  3. Limited Risk: Although private investment mortgage funds can provide income for years, the underlying notes are held short-term (usually one year) to minimize risk in the event of a market downturn. And in the case of foreclosure, properties are sold to recoup investor’s equity.
  4. Healthy Returns: Private lenders (investors) working with us typically earn a minimum of 7% and a maximum of low double digits, depending on if you are accredited and what is available at the moment that is a “fit” for you.
  5. Flexible: Bridge loan notes and funds can be held in a self-directed Roth IRA for tax-free income (within your IRA or in your pocket, if you are over 59-1/2). Funds can usually be rolled over into new loans for continued cash flow.

The downsides to bridge loans are that there is quite a learning curve to finding and managing your own loans, and when working with other lenders, not all operate according to industry best practices that make protecting your principal a top priority. (We ask a lot of questions of our providers and are choosy who we refer to!) 

Four More Ways to Invest Outside of the Stock Market 

1. Direct Real Estate Investments Cash-flowing rental properties are a time-tested way to build wealth. Being a landlord can be time-intensive but rewarding. Some basics:

  1. Start small (perhaps renting out your old home when buying a new one;
  2. Crunch the numbers, always focusing on cash flow and not speculating on and counting on appreciation;
  3. Get good help and advice, from a real estate attorney to a great handyman; and
  4. Always have adequate cash for the unexpected. (See #4 below for our favorite place to store cash.)

2. Fractional Real Estate Investing

Accredited investors will find an opportunity to invest directly in commercial real estate by becoming private lenders for commercial projects, typically cash-flowing apartment buildings.

These types of investments offer qualified investors cash flow as well as equity, and help real estate investors avoid the most common (and most costly!) real estate investing mistakes, such as limiting themselves only to properties in their local area, not evaluating enough properties before purchasing, not forecasting future costs accurately or managing the properties effectively.

3. Peer Lending

peer lending alternative investment Also called “peer to peer lending” or “P2P,” peer lending cuts out the middleman – the banks and credit card companies – and allows people to lend using online websites such as  and as

For those who are just starting out, peer lending offers a way to start investing in a hands-on way, investing as little as a few hundred dollars. (At $25 per loan, you’d want to have your dollars in at least 10-20 loans.)

Returns are generally in the high single digits or low-double digits. We hear that people who are actively choose loans tend to do better than those who allow their portfolios to be randomly selected.

4. High Cash Value Life Insurance 

Life insurance is not an investment,” per say, but it is an excellent place to store cash while also providing permanent protection for a family. Life insurance has also become a top asset purchased by banks, known as BOLI ( bank-owned life insurance) by the billions in recent years as part of their Tier One assets.

Whole life policies constructed for maximum cash value are particularly attractive when one or more of the following is true:

  1. You want long-term savings. You desire to build equity and liquidity in a long-term savings vehicle that can outpace inflation;
  2. You value liquidity. You want the flexibility of being able to temporarily borrow against your savings for major expenses, emergencies, or lucrative opportunities;
  3. Increased life insurance protection is desired. Because death benefits are permanent and grow with time, families with term life insurance are wise to replace their term with permanent whole life policies as they are able.
  4. Multi-generational wealth is valued. (There are valuable benefits to insuring adult children and grandchildren as well as yourself.)

An excellent primer on how whole life insurance can be an ideal foundation of a larger wealth-building strategy is Kim D. H. Butler’s Live Your Life Insurance.

Now that you understand some of the best options for saving and investing using alternative investments…

Is it time for you to invest beyond the stock market?

Prosperity Economics helps people build wealth without Wall Street or the big banks. We educate people about new ways to invest and help them SUCCEED in saving, creating income, growing assets and reducing risk… by investing outside of the stock market.

When it comes to diversifying outside of the stock market with alternative savings and investment vehicles, that is our specialty! Contact us with any questions, or for help in sorting through your options and which might be a fit for your situation.

©Prosperity Economics Movement

mountain of debt.jpg

5 Things You Should NEVER Leave to Your Children

5 Things You Should NEVER Leave to Your Children

“You will only be remembered for two things: the problems you solve or the one you create.”
– Mike Murdock, American preacher

Unfinished Business Puzzle Pieces Hole Work Still to Be Done While inheritances are largely thought of in terms of financial legacies, there are many things that we “leave” for our children, including things they may not want! Our financial, emotional, physical, intellectual and spiritual legacy is hopefully a positive one, not one that burdens them.

Whether or not you have life insurance, assets, or a sizable estate that may one day be an financial legacy, here are five things that your children – however young or old they may be – are hoping you DON’T leave them.

1. A house full of clutter.

An acquaintance of ours just took 8 months off of work to sort through the packed basement, attic, closets, and rooms of her father’s home after his passing.

When one sister left her four-bedroom house full of things to her surviving sister to deal with, it took a high emotional and physical toll to have to clear the home of decades of “stuff,” not to mention deal with overdue repairs.

Another woman took trips from Seattle to the East Coast for over a year to clear the mountain of belongings and paperwork out of her father’s home… and she was not without assistance.

Yes, there are those who can be hired to help in such circumstances, such as professional organizers who specialize in clearing estates. However, it can be difficult for family members to delegate such tasks of sorting through family treasures—and family junk—to strangers, even when the personal cost of not getting help can be high.

Start giving things away now. Don’t leave all the “stuff” stored in your attic, basement, garage or junk room for your loved ones to sift through someday. Give the treasures to family members who appreciate them, and don’t stop until the clutter is gone and nothing but a few boxes of holiday decorations remain.

If you need help or find yourself overwhelmed to the point of inaction, hire out or call on family members. It is far more satisfying to have a family garage sale and recycle/donation weekend during the good times than to have to sift through piles of belongings during a time of grief.

“Lighten Up” workshop creator Laura Lavigne teaches clients a mantra to help them sort. “Is an object ‘actively used or deeply cherished’? If not, let it go.”  Lightening your load will lessen your burden and help you to leave a better legacy.

2. A paperwork mess

Businessman with big piles of paperwork Todd Tresidder shared a heart-breaking story on his blog about the aftermath of his father-in-law’s passing and the legacy he didn’t intend to leave. Unfortunately, his family’s experience is not uncommon.

Todd’s father-in-law was a good man with good intentions. However, he left one heck of a mess for his loved ones. Not only did the family have to confront a storage locker full of useless, outdated junk, they had other, more difficult challenges left by his unfinished business.

As Todd tells it, his father-in-law had always planned on “getting his accounting records together and filing several years of delinquent, back taxes.” But he passed away unexpectedly before he even turned 65, leaving his children with the impossible task of preparing tax returns with incomplete records.

And the hassle was only the beginning. “They had to personally sign and take on liability for those back taxes,” said Todd. “He planned on living longer and eventually getting around to these things, but he never did. Life had a different plan….”

Don’t leave the paperwork you didn’t want to deal with to others. If you don’t want to tackle this burdensome task, your children certainly don’t either! Hire a bookkeeper, an accountant, or whoever you need to sort it out. Ask for help from the family if you are unable to deal with it yourself, they would rather help you now than be left with your mess later.

3. A mountain of debt.

mountain of debt.jpg The woman who left behind her 4-bedroom house full of things also left behind tens of thousands in credit card debt from years of living beyond her means.

Todd’s father-in-law had dropped his health insurance because it was “too expensive.” He thought he could do without it until he was old enough for Medicare to replace it, but he never made it. His children were left to negotiate and settle a pile of medical bills that consumed their father’s life savings and bankrupted his estate.

And every day, people die without proper estate planning or trusts that leave their heirs responsible for settling debts.

One reason we advocate for whole life insurance is that the death benefit can replace assets that must be spent when “life happens,” or when the paid-off house must be sold or mortgaged to fund long-term care. And now there are whole life insurance policies with riders that allow a sizeable part of the death benefit to be spent on long-term care while the insured is still living, helping them to avoid either running out of money due to medical bills, or the possibility of paying for long-term care insurance that is never needed.

One way or another, find a way to resolve your debts. If you are unable to repay your debts or settle them for a negotiated amount, then bankruptcy might be a viable alternative. A major reason people enter into bankruptcy is because it offers them protection from their creditors. Bankruptcy also offers the same protection to a person’s estate, thus protecting heirs who would otherwise have to pay debts from the proceeds of the liquidated estate.

4. A Family Feud

FAMILY FEUD One way to start a family feud is to leave siblings with differing amounts of an estate. And regardless of their financial habits or history, anything other than an equal split is likely to leave someone crying “unfair!”

Another way to start a family feud is to not have an up-to-date estate plan in place. Too many people “intend” to organize their financial affairs and assemble an estate plan. Instead, they left a mess of contradictory documents and incomplete plans that pit family members against each other.

Failure to keep beneficiaries up to date can also create chaos and ill will. Sometimes, divorced spouses or divorced spouses of children are still listed as beneficiaries of an estate, while younger grandchildren, nieces or nephews (born since the last updated will) have never been added! Clearly, that was not what was intended.

Be clear, consistent, and complete with your estate plans. Establish a will, and a trust, if applicable to your situation. Update it every few years, or at the very least, when there is a change in the family structure of a family, such as a death or divorce.

Need help to get started? Contact the National Network of Estate Planning Attorneys, they have an excellent process to help families communicate effectively.

5. Confusion and a lack of communication.

Lenore Vassil created as the result of her father’s illness, which left him temporarily unable to run the household or pay the bills. Following that experience, she watched as a pregnant friend lost her boyfriend and father of her unborn child in an accident. The family searched for weeks, not knowing if there was a life insurance policy or not.

Family members may talk frequently, but are they having conversations about the things that would really matter in an emergency? Usually not. The lack of communication creates pain and confusion as those remaining are left to wonder:

  • What lawyer, financial advisor, CPA or insurance agent should be contacted?
  • Where are the important documents stored, and which documents should we expect to find?
  • Who is the family doctor, and is there a durable POA?
  • How does the mortgage get paid, anyway? Knowing what bills are on “autopilot,” which aren’t, and how the family financials are tracked is crucial.
  • Then there are the more personal logistics… Where are the car keys? Are there instructions for taking proper care of the dog? And the list goes on.

Communicate thoroughly and pro-actively. My grandmother had a green notebook that listed all of the essential information and detailed where to find what, and everyone knew where the green notebook was. does what my grandmother’s green notebook did, but it’s easy, digital, and can be updated and shared with others across the country. Best yet, it thinks of everything so you don’t have to. Start an account and share the five most important things your loved ones need to know for free.

Get Started on Your To-Do List Now

priority-list.jpg It’s easy for an article like this to invoke feelings of overwhelm. But if YOU’RE overwhelmed by your unfinished business, do you really want to leave it to your loved ones to complete?

Anything that drains your energy will become an energy drain for your loved ones if—or rather, when—something happens to you. So start finishing your unfinished business today. It doesn’t matter that you may well live 30 or 40 more years, because who wants to live that long with unfinished business hanging over their head!?

Envision what you would like to leave for your loved ones—beyond the financial legacy. And if you assess that you are in danger of leaving a legacy of clutter, confusion, and unfinished business, then start taking action now. Make a list and set aside time to work on your list. With regular action-taking, you’ll be able to celebrate having your “ducks in a row” before you know it.

And, of course, let us know how we can assist you! Whether it’s financial guidance, life insurance, an estate planning referral, or something else, we’re here to help.

©Prosperity Economics Movement


Happy Wealth: The Surprising Secret to More Sales, Success, and Satisfaction

Happy Wealth: The Surprising Secret to More Sales, Success, and Satisfaction

The greatest discovery of any generation is that a human can alter his life by altering his attitude.”

—William James, American philosopher and psychologist

Why Happy People Are More Successful

Happy-wealth-couple.jpg We tend to believe that certain conditions must be met in order for us to be truly happy: We’ll be happier when we have more money, when we move into our next home, when we find a new mate, or when we lose 20 pounds.

But the latest research says we’ve got it backwards.

When it comes to wealth, the age-old debate asks: “Will money make you happy?” Implied is a further question, “If so, how much money is required for a certain level of happiness?” (You’ll find both questions and answers addressed in an article on “Money and Happiness: The Surprising Research.”)

But perhaps… we’ve been asking the wrong question. Perhaps we should be asking which is cause and which is effect. It’s the old, “Which comes first, the chicken or the egg?” debate. Or rather, “Will success result in greater happiness, or does happiness bring about greater success— including financial success?”

Shawn Achor, a leading positive psychologist and former Harvard professor, asked how being happy first might make people more successful as a result. When we begin with happiness, we’re actually more likely to end up with the success we mistakenly thought was a prerequisite for happiness.

Author of The Happiness Advantage: The Seven Principles of Positive Psychology that Fuel Success and Performance at Work, Achor has tested his research on students at Harvard, in impoverished schools in Africa, with Fortune 500 companies, on children in cancer wards, and in the slums of Venezuela. And no matter the setting, he found that re-wiring our brains for happiness with simple but effective habits leads to measurable success. And whether you are an employee, an employer, or an entrepreneur looking to raise your results, Achor’s conclusions can impact your success.

The Productivity Advantage

If you want to be more productive and profitable (or wish the same for your employees), take note. As Achor reported in a Harvard Business Review article, “The Happiness Dividend,” a decade of research proves that happiness raises a wide range of business and personal outcomes:

  • Sales soar by 37%
  • Productivity increase by 31%
  • Employees are 40% more likely to be promoted
  • People have 23% greater energy in the midst of stress, and
  • Accuracy on tasks improves by 19%.

Simply put, happy brains are more productive brains. Achor’s research shows that when your brain is happy, it “performs significantly better than it does at negative, neutral, or stressed. Your intelligence rises, your creativity rises, [and] your energy levels rise.” Additionally, health improves, job satisfaction increases, and longevity is extended… dramatically.

Watch Achor’s hilarious and inspiring TED talk: (It’s 13 minutes and well-worth it!)

Digging beyond the TED talk, three striking studies cited by Achor in his research include:

Positive Top Producers. In one study conducted by University of Pennsylvania professor Martin Seligman, considered the father of positive psychology, it was discovered that “the top 10 percent of optimists at MetLife Inc. outsold the other 90 percent by 90 percent,” according to MetLife then hired for a positive mindset. The result? “The new agents outsold their more pessimistic counterparts by 21 percent the next year and by 57 percent the following year.”

Success and Satisfaction. Just before a stressful Great Recession tax season several years ago, Achor did a three-hour intervention with tax managers at a New York/New Jersey accounting firm. Half of the managers attended Achor’s training on changing your lens to a more positive one. Not only did they subsequently report increased optimism and satisfaction, but they sustained improvements through tax season. Four months later, those who received the training reported a 24% improvement in job and life satisfaction, compared with their peers who received no training.

Quality and length of life. A group of 180 elderly Catholic nuns were asked to document their thoughts in diaries. The nuns whose journal entries had more overtly joyful content lived nearly 10 years longer than those whose entries were more negative or neutral! Additionally, practicing the happy habits (below) has been proven to lower blood pressure and improve many other health markers.

Breaking the Negativity Addiction

“…It’s not necessarily the reality that shapes us, but the lens through which your brain views the world that shapes your reality.”

—Shawn Achor

happy-optimist.jpg Do you catch yourself frequently complaining? Do you wake up every morning and scan the news to see what terrible thing might be happening in the world? (Granted, you might also be hoping for wonderful news about peace and prosperity, but let’s face it, news is 90% negative because that’s what we tend to pay attention to, according to

“Constantly scanning the world for the negative comes with a great cost. It undercuts our creativity, raises our stress levels, and lowers our motivation and ability to accomplish goals,” posits Shawn in The Happiness Advantage.

If you want to be more successful, breaking the negativity addiction is a must. And while Achor gives concrete positive habits to practice, there are also habits you can let go of to give yourself a “happier” brain. News in the morning is one. Just three minutes of negative news in the morning can reduce your effectiveness at work. Complaining is another. Worry, fear, and impossible expectations of yourself that leave you constantly in “the gap,” as my mentor Dan Sullivan would call it—focusing on all the ways you are falling short instead of how far you’ve come—also won’t serve you.

So how do you raise your mood and train your brain to be happy? It’s all about changing your behavior in simple, effective, measurable ways, for instance, by practicing gratitude on a daily basis. Positive psychology shows that while our happiness can be influenced by genetics, conditioning, and circumstances, your mindset and habits are far more predictive of happiness. By controlling how you view the world and habitually respond to situations, you can re-wire yourself for happiness.

Even when it comes to clinical depression, research shows that behavior and habits matter. Even simply believing that behavior matters gives a depressed person more power to overcome the challenge of depression. “It’s very difficult for the brain to be depressed and grateful at the same time,” Achor shared in a Big Think video.

If you’re someone who tends to notice the negative first, don’t despair! The good news is that you can retrain your brain with simple habits in as little as three weeks.

Five Happy Habits

Happy-couple.jpg “Habits are like financial capital – forming one today is an investment that will automatically give out returns for years to come,” says Achor in The Happiness Advantage.

Achor researched what habits would lead us to a happier, more productive brain, documenting the habits that lead us to become “positive in the present,” rather than simply aiming for the achievement of goals that we believe will make us happy “someday” in the future. Achor recommends practicing these five simple habits daily:

1. Recall three things you’re grateful for. To re-train your brain to scan for the positive first, write down three NEW things that you are grateful for every day. (I write gratitudes every morning before I start my workday.)

2. Journal about a positive experience. Also daily, recall a recent positive experience and journal about it for two minutes. This allows your brain to relive and reinforce positive .

3. Exercise. Engaging in 15 minutes of cardio activity daily will help you focus better. Exercise also “teaches your brain that behavior matters,” as you’ll notice concrete results.

4. Meditate. Be still and observe your breath go in and out for two minutes a day. Achor explains that meditation “allows your brain to get over the cultural ADHD that we’ve been creating by trying to do multiple tasks at once (and) focus on the task at hand.”

5. Engage in random acts of kindness. Write a thank-you note or a complimentary email to someone you admire, or perform a simple favor you weren’t asked to do. You’ll be happy you did!

Practicing these habits for 21 days in a row can actually rewire your brain for greater optimism and success. Happiness “turns on all of the learning centers in your brain, allowing you to adapt to the world in a different way,” says Achor.

If it all sounds a little “pie in the sky,” well, it’s not. “Focusing on the good isn’t just about overcoming our inner grump to see the glass half full,” writes Achor in The Happiness Advantage. “It’s about opening our minds to the ideas and opportunities that will help us be more productive, effective, and successful at work and in life.” Achor affirms that the best leaders are those who can thrive in times of stress and struggle, not those who pretend that challenges don’t exist.

happy-elderly.jpgYour Happiness Advantage 

If you’re ready to up-level your productivity and profitability, we invite you to start practicing the 5 habits above. One of Prosperity Economics’ 7 Principles of Prosperity™ is to THINK from a Prosperous Mindset, and we believe that gratitude is an essential part of that. It has been said that “Gratitude and scarcity cannot co-exist in your mind,” and we agree with that statement wholeheartedly! Give yourself the happiness advantage and don’t be surprised if greater health and wealth follow.

Need positive help with your finances? Our financial philosophy isn’t based on scarcity or luck, it’s based on timeless principles and proven financial vehicles and strategies that won’t have you lying awake at night worrying about the economy! We assist people with growing, protecting, and passing their wealth, also tax reduction, maximizing cash flow, utilizing the living benefits of life insurance, creating self-directed IRAs that won’t roller coaster ride with the market, and more. Reach out to us; we’re happy to help!

© Prosperity Economics Movement

Protect Your Identity and Personal Financial Information

Protect Your Identity and Personal Financial Information

“Last week, somebody stole my identity. This week, they begged me to take it back!”


protect-identity-1.jpg Chances are, you were affected by Equifax security breach which impacted 143 million Americans, plus some Canadians and Brits with US dealings. The breach reportedly happened on July 29, 2017, although the public was not informed until early September. If you’re not sure what to do about it, or whether you’ve done enough, this article can help you make choices and take steps to protect your sensitive financial information from being used against you.

First, check to see if you could have been impacted. You can check here, although it “may” give you an inconclusive (“you may have been affected”) answer. Keep in mind: virtually anyone with credit would be in the Equifax data base, since they are one of the big three credit bureaus monitoring credit activity of Americans. So even if you’ve never personally set up an account with Equifax, if you have a credit score or any current or recent credit instrument: a credit card, mortgage, car loan, or installment loan, your personal information was probably compromised.

Check your credit report. This won’t tell you if someone has your information, but it will give you a “baseline” on your credit. Plus, if there are inaccuracies on it (new or old), you can file disputes and get it cleaned up. You can get a full, detailed credit report from the three credit bureaus once per year at no cost (FICO score is extra) at

Then, decide how to protect yourself for the long haul. After all, protecting your personal financial information—your credit, identity, banking information, etc.—matters all of the time, not just following a security breach. So it may be time to put long-term protection in place. Seven options include:

1. Accept Equifax’s offer of credit monitoring and ID theft protection.

credit-score.jpg Equifax is offering all customers potentially affected by the breach TrustedID Premier free for one year. There’s no credit card information taken, and you won’t automatically be charged when the year ends to continue it. You can sign up for it here. It includes:

  • an Equifax credit report
  • monitoring from all three bureaus (Equifax, Experian and TransUnion)
  • an Equifax credit report lock (see below about locks/freezes)
  • Social security number monitoring
  • and $1 Million in identity theft insurance.

As we were writing this, we found articles warning not to sign up for Equifax credit monitoring because the “fine print” agreement prevented you from participating in any sort of class action lawsuit or taking any legal action at all, should you suffer financial damages from their compromised security. This is no longer the case. The clause has been removed, and the updated terms apply as well to anyone who signed up before the language was removed.

Signing up for TrustedID Premier is an option unless you have a more comprehensive solution in place. Be sure to check your credit report for any inaccuracies, and be aware to continue or replace this service at the end of the year if you don’t have something similar in place.

2. Monitor your own credit report.

If you were not part of the breach and not eligible for (or do not want) Equifax’s offer, there are many other ways to monitor your credit.

Some budget options: offers daily credit monitoring from TransUnion plus tools and articles to help you raise your score… all at no cost. or you can sign up directly to TrueIdentity from TransUnion. (It’s marketed as “free identity protection,” but it’s really little more than credit monitoring.)

Do be aware that free options are more likely to allow the credit monitor’s “partners” to market to you, although you may be able to opt out of emails you do not want.

For paid options, we recommend services that will do more than merely monitor your credit, since protecting yourself from identity theft involves more than just watching your credit. So if you are “established” with multiple bank accounts, credit cards, etc., and can pay for a higher level of monitoring, we suggest the next option…

protect-ID-theft.jpg3. Get identity theft protection and restoration.

Credit monitoring is important, but it won’t do you much good as far as protecting your financial information, or assisting you if someone does indeed use your information—or worse, your identity—for theft or impersonation.

According to a new identity fraud study from Javelin Strategy & Research, in 2016, over 15 million Americans had their identities stolen, with losses of $16 billion dollars. Unfortunately, in spite of attempts to fight the crime of identity theft, these were new highs in both the number of people impacted and the amount stolen.

The Government Accountability Office recommends that, in addition to credit monitoring, a comprehensive solution also includes identity monitoring and identity restoration. Identity monitoring tracks your personal data on illicit websites as well as public records. Identity restoration services assist you in recovering from identity theft, and can include case management, legal help, and reimbursement for costs and losses.

Three top identity theft protection programs recommended by are:

They all monitor your credit and also bank accounts, passport, drivers license, and more. IdentityForce is top rated, and IDShield is perhaps the best value for a comprehensive solution at $9.95/month or $19.95 for a family. You can read a comparison here.

State Farm offers ID theft insurance for only $25/year as an add-on to home or condo insurance. However, by itself, this type of insurance is insufficient as it offers no monitoring and therefore won’t help nip identity theft in the bud.

4. Consider freezing or locking your credit.

A credit freeze or lock will prevent anyone—even you—from using your social security number to obtain a new credit account in your name. If you are a long-term renter or homeowner with no plans to obtain additional credit (or don’t mind the hassle if you do), it could be worth considering. However, it’s not a bulletproof solution.

The advantage to a freeze is that no one can take new credit in your name. It doesn’t affect your credit score and you can still obtain your own free annual credit report. The disadvantage is that it won’t stop thieves from charging an existing line of credit, so you’ll still want your credit accounts monitored.

If you do place a freeze, you’ve got to remember to “thaw” your credit a few days ahead of when you might need it. You also have to place freezes with each bureau separately, and there can be a nominal cost ($5-$10) to place the freeze, as well as sometimes remove the freeze, from your credit. This cost varies from state to state—see this handy chart—and has been waived for Equifax customers at the moment.

Here’s where you can go to sign up for a freeze at each of the three major credit bureaus:

Or call…

  • Equifax: 1-800-349-9960
  • Experian: 1-888-397-3742
  • TransUnion: 1-888-909-8872

5. Consider placing a fraud alert on your credit report.

protect-from-fraud.jpg If you don’t want a freeze or lock on your credit—perhaps you are going to be applying to purchase a home or car soon, or you just don’t want the hassle—you can place a fraud alert on your credit report. It’s easy and free, and you only need to place it with one bureau, which will inform others.

With a fraud alert, your credit report is flagged, and creditors and lenders are then required to take extra steps to verify your identity. According to there are three types of alerts available:

Here’s where to go if you want to place a fraud alert on your report (only one is necessary):

(Or use the phone numbers above.)

You don’t need a fraud alert if you’ve done a freeze… a freeze makes an alert unnecessary.

6. Be vigilant about monitoring your own sensitive information.

Monitoring companies can do a lot, but only you know what you’ve actually purchased or withdrawn. So keep your eyes open and don’t ignore anything that seems “not quite right.” Some suggestions:

  • Check your bank accounts weekly or at least monthly.
  • Monitor your investment accounts regularly for any unusual activity.
  • Watch your mail for anything suspicious.
  • Follow up on alerts from credit monitoring companies even if you think it’s your own activity.
  • Get your annual Social Security benefits statement online and look for anything unusual.
  • NEVER give out your personal information to anyone who has not been sufficiently verified first. (And if you’re getting annoying calls from “the IRS”, it’s almost surely a tax scam.)

7. Make protecting your information a lifelong habit.

credit-score-check.jpg Unfortunately, this is not a temporary drill. As Alex McGeorge, the head of threat intelligence for Immunity security firm told, “Your Social Security number doesn’t change, so this data is going to get resold on the black market and hold its value for a while.” Realize that your information could be circulating for years, so take steps to protect it. Credit and identity monitoring and protection is the new normal.

Finding out your sensitive information has been hacked is no fun! However, taking action to protect yourself is a positive step that can increase your peace of mind, minimize future hacks, and position you for a quick recovery even in a worse-case scenario.

Secure and Protect Your Wealth

Nobody wants a hacker or thief to be able to take their personal information or worse, take money from an account or credit card! And yet, many investors put their money where it can easily be lost to the whims of the market or eroded by inflation.

If you have savings earning virtually nothing in a bank account, or investments subject to risk and unexpected losses, contact us today. We can help you protect your money!

© Prosperity Economics Movement

Is Your Real Estate Portfolio Diversified?

Is Your Real Estate Portfolio Diversified?

“You should have a strategic asset allocation mix that assumes that you don’t know what the future is going to hold.”
—Ray Dalio

So you’ve conquered the your local real estate market. You’ve got 6 or 8 rentals, each earning cash flow. Congratulations! Now… what if a natural disaster decimates the area, or if the economy suffers a major setback? Uh oh….

If you were heavily invested in New Orleans before Hurricane Katrina, Detroit Michigan before automotive industry layoffs, or almost ANY market prior to the Great Recession, you understand the risk.

Investing in real estate is a time-tested strategy and one of the BEST ways to diversify away from the stock and mutual fund investments that most Americans already have. However, if your real estate investments aren’t diversified, you could be vulnerable to setbacks and losses. So let’s look at some options to make your real estate portfolio “bullet proof.”

Locations, Locations, Locations.

A fantastic location (singular) is great, but if circumstances or the local economy changes the desirability of a location, you’re better off with having multiple properties in multiple locations. Consider different cities, different areas of the country, even (perhaps) international real estate—of course with care, caution, and reliable professional advice!

Another wise move is to diversify the types of economies that fuel your real estate investments, such as working class neighborhood homes, commercial properties such as office spaces, and resort condos popular with upscale retirees and vacationers.

Would you prefer to be a “hands off” investor and skip all the location scouting, negotiation, tenant management and plumbing problems? You can! The simplest way to expand the types of properties you invest in is by becoming a private lender by financing bridge loans for commercial projects, residential lease option properties, or through real estate equity investing (being a fractional investor on an apartment building).
Even if you enjoy investing locally, first deeds of trust or bridge loan funds that invest in properties elsewhere can give your investment strategy stability and diversity.

Types of Real Estate Investments

Another way to diversify is to invest in different types of real-estate-based investments. There may be endless options, but some of the more popular types of real estate investments include:

1. Rental Homes. A great “bread and butter” investment, you can get started by either renting out a home you move out of when your purchase a new one, or purchasing a home specifically for the purpose of renting. Either way, you’ll want to do your math! Perhaps the biggest mistake people make with real estate is counting on appreciation while paying too little attention to cash flow. We think that cash flow should be the cake, and appreciation—if you get it—makes for wonderful “icing on the cake.” (Truth Concepts Real Estate Analysis Calculator can be used to calculate returns.)

Done wisely, buy-and-hold rental homes can allow you to take advantage of long-term cash flow as well as potential appreciation. You can keep it for years or even decades until market conditions are excellent for selling, while your tenants pay your mortgage and other costs.

2. Commercial Rental Real Estate. This is similar to rental homes or residential real estate that you own and rent out, except these properties are commercial in nature, such as office buildings, warehouses, or storefronts.

Commercial real estate can be an excellent investment, although you might expect higher start-up costs. Commercial markets can also be more fickle than residential markets, so be aware. While residential markets tend to be fairly stable, it is not unusual for office buildings to sit empty during a downturn, or for a “hot neighborhood” to turn sluggish when the next hot neighborhood surfaces (one reason to consider shorter-term bridge loan investments or funds when it comes to commercial real estate).

3. Commercial Bridge Loans. You may be familiar with residential bridge loans as a temporary financing tool that allow a homeowner buying their next home to access the equity in their current home until they can sell it. With a commercial bridge loan, the temporary financing is done on a commercial property, such as a hotel, office or apartment building. A “bridge loan” puts financing in place while a property is improved or rehabbed, or while an income history is established that can allow the owner to secure permanent financing at more favorable terms.

When you invest in bridge loans, you are technically a “private lender,” rather than an investor. There are multiple opportunities for private lenders, from short-term first deeds of trust (often one year term), to bridge loan funds, which require longer terms, yet offer higher returns. (Bridge loan funds are available to accredited investors only, with one million dollars in net worth, not counting their residence, or $250k annual income/$300k for couples.)

Want more cash flow? Our clients who become private lenders earn at least 7% annually, and yes, you can use a self-directed IRA. If you have lazy assets and would like monthly checks, let us know you’d like to put your dollars to work!

4. Apartment Buildings. Perhaps the “gold standard” of real estate investments, multi-family apartment buildings typically produce higher returns than rental homes. A well-managed apartment building in a desirable area can generate low double-digit returns consistently, plus nice tax advantages and the potential for future appreciation!

The downside of apartment buildings is that it’s not a beginner’s game. There can be significant financial investment, plus managerial experience required to do it well. Done poorly, you can end up losing money and/or dealing with nightmare tenants or lawsuits.

5. Real Estate Equity Investing. We can make referrals to a company with an excellent track record of happy clients that offers the upsides of investing in apartment buildings without the burdens of selecting, purchasing and managing them. They offer investors a fractional share of equity, along with healthy cash flow and a plan that puts their initial investment back in their pocket by the fourth year… while still maintaining an equity position and continued cash flow!

This company works with accredited investors only, and if you are qualified, we’d be happy to get you further information on request. (Ask us about “real estate equity investing”.)

6. “Flipping” Homes. In spite of the popularity of cable TV shows that make this look easy, it’s not! It’s trickier and less profitable than you think. Quality contractors aren’t cheap, and if you do the work yourself, you have to factor in the value of your time. There can be big risks involved, as a dip in the market can wipe out your profits, and your money has a cost, which is ignored by misleading “reality show math.” As former Seattle realtor Kate Phillips notes, TV shows fail to factor in interest costs, lending costs, or closing costs such as title, escrow, so consider these shows as entertainment, not factual representations of investments.

7. Lease-to-own homes. Investing in lease-to-own single family homes can be a successful strategy in certain markets, such as those with depressed housing prices. According to professional real estate investor, Jimmy Vreeland, lease-to-own strategies offer unique advantages to investors willing to learn how to do it well. Lease-to-own sellers/landlords experience decreased management burdens because tenants are hopeful buyers willing to care for their future property and assume maintenance tasks themselves.

8. REITs. REITs are very popular with investors right now because of recent favorable returns and the ease of investment. Most function much like a mutual fund or a private equity fund and offer a “hands off” way to invest in real estate. However, REITs can offer similar downsides as mutual funds, performing poorly in a down economy. According to a New York Times article, during the financial crisis, “Just as stocks fell fast and furiously, so, too, did most REIT shares.” In 2008 alone, commercial property REITs (the majority) dropped 49% in value, while mortgage REITs lost 42%. Thus, even though some REITs have revised strategies after such losses, we don’t recommend then as a proven diversification strategy.

9. Land. While land can have its place in a portfolio, it’s not one we recommend for most investors. Unless the land is being leased (perhaps for farming or camping), land does not typically produce cash flow. So purchasing land is usually speculative in nature—you’re hoping or assuming the price will rise—and while you wait, you’ve got property taxes to pay.

10. Part-time rentals. Like to travel? Fancy a vacation home? Savvy investors look for second homes that can earn money when they’re not there. This works especially well for properties with year-round demand, such as New York City condos, resort homes in Hawaii, or beachfront properties in Southern California or Florida. You can hire a management company to manage rentals, or manage them yourself using or (vacation rentals by owner).

Of course, while you’re away… you can also rent our your “first” home, too! Laura Lavigne is a life coach with a travel bug who rents two rooms on when at home. Then she packed her bags for a 6-month trip to Europe, renting out her entire home (to a single party, requiring no day-to-day management). In this way, she has all but eliminated her mortgage payment year-round, giving herself increased income and freedom, while building equity in a six-figure asset that also provides a “home base.”

Is It Time to Diversify?

Ultimately, a safe bet is to diversify into multiple types of real estate investments. Currently, we work with several companies offering one or more opportunities for investors who wish to be private lenders.
And if the thought of investing in something a bit “out of the ordinary” makes you a bit nervous, consider a few things:

Real property. Unlike stocks and bonds, real estate investments are secured by real physical assets. (That’s why it’s called “real” estate!) Real estate markets don’t drop to zero in a matter of months like Enron stock did in 2001.
Collateral confidence. Banks and other lenders routinely lend from 75% up to 100% on real estate. Now ask your banker what percentage they’ll lend you with your IRA as collateral.
It’s insured. What if a property is destroyed in a worse-case scenario fire, flood, or storm? Chances are, it’s covered by insurance… unlike your mutual funds.
Start small, go slow. You don’t have to trade all of your stocks for real estate-based investments overnight, or ever. You can start with as little as $25k with some investments, gaining confidence as you receive regular checks.
Whether you want to add real estate to your portfolio or diversify the holdings you already have, get in touch with us for more information. We specialize in helping clients “Build Wealth Without Wall Street,” and we’ll show you how to diversify away from market risk and use time-tested strategies for better results!

© Prosperity Economics Movement

7 Reasons to be a Private Lender

7 Reasons to be a Private Lender

“The human species, according to the best theory I can form of it, is composed of two distinct races, the men who borrow, and the men who lend.”

— Charles Lamb

It’s one of the oldest, most proven forms of investing; lending capital to another—perhaps someone who can’t get traditional bank financing—in exchange for interest, and eventually your principal, in return.
A private lender lends money to helps borrowers:
⦁ purchase real estate (for a mortgage or a short-term bridge loan until permanent financing is put into place.)
⦁ rehab or improve commercial or residential real estate (again, often with a bridge loan)
⦁ start or expand business ventures
⦁ refinance credit cards or other debt
⦁ or fund a host of other projects—from kitchen remodels to weddings—through websites such as and
In recent decades, investing has come to be equated almost exclusively with stocks, bonds and mutual funds. However, there is greater volatility in the stock market, and many motivations to diversify at least a portion of your portfolio with private lending strategies. Here are seven reasons to consider becoming a private lender:

1. Historically proven.

Private lending has been a reliable way of generating profits and cash flow for literally centuries. We have records of private lending agreements as early as 3,000 B.C., showing people loaning to others for defined time periods in exchange for “interest” paid in wheat, livestock, shekels of silver, or other commodities. Interest rates of 20% – 40% were common in ancient times, though extraordinarily high rates became known as “usury” and became discouraged or outlawed. Below is a translation (from Fordham University) of a Babylonian contract for a real estate loan, circa 611 B.C., with an interest rate of eleven and one-third percent:

ONE mana of money, a sum belonging to Iqisha-Marduk, son of Kalab-Sin, (is loaned) unto Nabu-etir, son of Nabu-akhi-iddin, son of Egibi. Yearly the amount of the mana shall increase its sum by seven shekels of money. His field near the gate of Bel is Iqisha-Marduk’s pledge. (This document bears the name of four witnesses, and is dated) at Babylon, Tammuz twenty-seventh, in the fourteenth year of Nabopolassar, (the father of Nebuchadnezzar).

(Private lending contracts are slightly longer, now.)

Fast forward to the Great Depression in the late 1920’s and 1930’s. The stock market in the U.S. was just over 100 years old at the time, and had experienced many crashes and panics, as they were often called. But the 22 years preceding the Wall Street crash of 1929 saw an impressive, though deceptive, bull run.

Investors such as John Powell soon learned that what goes up may go down… way down. After severe losses, Powell swore off the stock market and instead, started lending money to those who needed capital to purchase or temporarily finance properties. For the next 3 decades, Powell was a private lender, his profits were steady, and he no longer feared market crashes .

2. Predictable returns.

When you invest in the stock market, you are placing a bet that the price will go up. Historically, this may be true more often than not. Yet we can observe times when this has gone horribly wrong! Nobody thought that Enron was going to go under, or that there was a possibility of the stock market losing more than 40% in a Financial Crisis

The exception? If your private lending deal is not properly constructed or vetted, there is a chance of loss. That does not necessarily mean that you’ll lose your capital, but in cases where the borrower was paying you directly, a property could have to be foreclosed on then sold to get your cash out of a property.

3. Excellent cash flow.

In addition to passing the test of time with flying colors, banks and other institutions that operate as lenders are some of the most profitable businesses in the world. Unfortunately, many people tend to be borrowers, not lenders! So if you’ve got money to lend, congratulations, you can put it to good use.

In this low-interest environment, you can earn several times what your bank is paying, without the unpredictability of the stock market. And if interest rates at banks go up, so will interest rates for private lenders! That’s because there will always be people who need to borrow money outside of mainstream channels.

Today, investors who want more income from their existing assets can earn high single digit, even low double digit interest rates (for accredited investors only) by becoming private lenders. In many cases, the monthly income is contractually agreed upon, so you know exactly what cash flow you can expect.




4. Diversification.

Not only does private lending help diversify a stock heavy portfolio, but through private lending, it is also very easy to diversify amongst different types assets, or real estate investments in different locations. Of course, it is handy to do business locally. But you might live in an area where it is difficult to earn a decent ROI. Read, “Is Your Real Estate Portfolio Diversified?”

And of course, you can practice private lending with different types of assets, such as a real estate bridge loan, a fractional investment in real estate (apartment building) equity, or a collection of peer lending loans. (With the latter, you’ll want to diversify into many small loans to reduce your risk.)

5. A secured investment.

If you are lending on real estate, your investment will likely be secured by the property itself, perhaps with a first deed of trust, although there are several different ways that private lending deals can be structured. (Just make sure you’re not last in a long line to be paid!)

Whether you are lending directly or through a company that vets the deals, you’ll want an appraiser to verify that the property is worth substantially more than the amount you are lending. The lower the loan-to-value percentage, the more security you have for your investment.

In a worse-case scenario that requires a foreclosure, you could actually reap additional profits for your extra effort and trouble. Alternatively, many private lenders prefer to work with companies that manage the transaction and pay them directly, significantly reducing their risk.

Of course, not all private lending opportunities (such as those through prosper or lending are secured by a real asset. In the case of peer lending, the borrower’s income and good credit are your “security.” Peer lending returns are tiered so that lower-risk loans (with high-credit score borrowers) pay less interest, while higher-risk loans pay more interest, yet also have higher default rates.

6. Leveraged investment opportunities. 

It’s called arbitrage: By investing money you have borrowed at a lower rate to earn a higher rate, you can earn an exceptional rate of return and expand your investments. A couple examples:

Let’s say you have a daughter who is getting settle in her first home. She purchased some furniture, window coverings, and appliances from various stores on credit.  Now she’s got $6000 of debt at rates of about 21%!

You hate to see her paying 21%. You borrow $6000 against your life insurance policy at 8% to take care of the debt, and they happily agree to pay you back at 10% interest. You are actually earning 25% on the money that you are borrowing, and she is saving interest big-time:

That’s a small, simple example. Let’s look at a large, lucrative one. You leverage your whole life cash value as collateral and borrow $50k from a bank at 5%. Then you put the money into a bridge loan earning 7%. Your rate of return is actually 40% on the money:

To understand this concept of arbitrage more thoroughly, watch this financial calculator video from Truth Concepts financial software developer Todd Langford, as he explains “How Banks Make Money.” (It’s not how most people think!)

Click to watch.

7. You look like a genius.

When—or if—you tell your friends you are going to be a private lender, chances, are, they’ll be concerned for you. They’ll tell you it’s risky (and it can be, if you do it yourself!) People may share horror stories or even talk you out of it.
But when you’re an experienced private lender, and you tell your friends that you’ve been collecting healthy cash flow for years, with none of the losses or stress of the stock market, they’ll think you’re really smart! (And of course, you are.)

Would you like to turn an existing asset into steady, reliable cash flow? Become a private lender and use the investment strategy with the longest track record in history! Contact us and we will get you more detailed information and help you identify which options might work best for your situation.

© Prosperity Economics Movement


The Balancing Act: Are You Truly Diversified?

The Balancing Act: Are You Truly Diversified?

Everything in life… has to have balance.”
—Donna Karan
Have you taken a “30,000 foot view” of your finances lately? Is it positioned for the growth, strength, stability and cash flow you desire? To help you answer that, let’s examine asset allocation and diversification through the lens of Prosperity Economics.

First off, let’s define a couple of key terms. Asset allocation and diversification are not the same thing, although they both help with the problem of excessive risk that is created when you “have all your eggs in one basket.” Next, we’ll look at what those terms typically mean in “common financial advice,” which will let us notice what may be missing. Lastly, we’ll present a NEW model for achieving greater balance—and better results—with YOUR money!


Asset Allocation Vs. Diversification

Asset allocation refers to investing in different asset classes. Typical financial advice tells us that the common asset classes (where you should put your money) are: 1) stocks, 2) bonds, and 3) cash. Typical advice tells us that stocks are best for long-term growth and that is where most people should have most of their money. We are told that bonds provide adequate balance to the risk of stocks, and that the older you are, the more you may want to have in bonds verses stocks. Lastly, typical advice tells us that cash vehicles such as savings accounts, money market funds and bank CDs should make up the remaining (very small) balance of your assets.

Of course, there are big problems with this limited asset class model. Bonds are no longer the safe haven they once were. Stocks aren’t the only valid or the safest growth strategy. Most cash options haven’t been performing well, and represent too small a portion of most portfolios to provide any real safety. And the options are simply too few and narrow.

Typical advice does little to actually help you achieve balance and stability! Those following this model ten years ago suffered huge losses in the Financial Crisis and spent years recovering. Even the age-based or target-date funds supposedly designed to SOLVE asset allocation problems for investors—completely failed, so beware popular financial “wisdom.”

Diversification refers to how to diversify the options WITHIN a particular class, especially stocks. Without diversification, asset allocation could look like this:
⦁ a million dollars of stock in a growing, forward thinking company. (Enron, anyone?)
⦁ some “safe” municipal bonds, perhaps in a classic US city (like Detroit).
⦁ cash in a bank account that’s depleted through inflation or even threatened by an ⦁ asset forfeiture scandal.
⦁ a million dollar property (perhaps in an area subject to hurricanes or forest fires).
⦁ a cryptocurrency, such as PayCoin (which hit bottom after a promising start).

Diversification in the stock market spreads risk among different funds, stocks, industries, and companies of different sizes and locations. But stocks aren’t the only asset you may wish to diversify. Consider diversifying:

⦁ real estate, such as we describe in ⦁ “Is Your Real Estate Portfolio Diversified?”
⦁ cash equivalents, using more than one savings institution for short-term cash and multiple insurance companies for long-term cash.
⦁ Non-correlated growth and cash flow strategies ⦁ apart from the stock market.

The Problem with Typical Models of Risk Reduction

Typical asset allocation models try to focus you only on the limited assets that banks or brokerages sell. The pervasive debate about “how much should you have in stocks vs bonds?” is designed to get you to forget about other alternatives, such as real estate, life insurance, investing in a business or alternative cash flow vehicles. This is a problem because it increases your risk!

Additionally, as described in this article on why 401(k) can be risky, the popular investment vehicles subject you to MANY risks, including systemic stock market risk. Market crashes and corrections can bring sweeping losses to virtually every type of stock, yet typical financial advice tells you to subject MOST of your assets to the whims of the market. You’ve been trained to put your assets in stocks where a “diversified” portfolio won’t save you from a crash, correction, or bear market. (And note how the word “correction” minimizes this loss. We tend to think of a “correction” as a good thing—“a change made to something in order to correct or improve it,” says the Cambridge English Dictionary, as if losing 10% or 15% of an investment’s worth is somehow supposed to happen!)

The Balanced Prosperity Model

If your investment model was a chair, you’d want it to sit on a stable foundation, have several sturdy legs, and a seat that would support you. Let’s start from the ground up:

The Foundation:  Your chair needs to sit on something! What should your foundation be? Virtually all advisors will tell you that you should have an emergency fund (even before investing), and savvy investors won’t neglect the need for protect their assets and their loved ones.
Unfortunately, typical savings solutions are lacking, often producing only a fraction of a percentage point in interest. And when it comes to protection, often financial professionals recommend cheap term life insurance that’s designed to expire before you need it 99% of the time—like a product warranty that never gets used! (But you’ll have more to invest on “their” products with systemic risk.)
We recommend (and use!) whole life insurance as our financial foundation because it provides
⦁ long-term cash growth that outpaces bank rates and inflation
⦁ exceptional security (banks use it as part of their Tier One assets)
⦁ excellent financial flexibility (including the ability to withdraw or leverage against your cash for emergencies and opportunities)
⦁ an incentive to save consistently
⦁ opportunities for long-term care riders and other benefits that can supplement when medical needs arise,
⦁ plus a guaranteed, permanent, death benefit that transfers (usually) tax-free to heirs.
The Investment Legs: A stable chair or stool has four legs. (Three to six will also work, as you’ll start with fewer and build towards more.) Our favorite four legs that many of our clients have include:

1. Steady Growth Vehicles. While many people look to stocks for growth, the big problem with stocks is the roller coaster ride of the stock market. We want our clients to invest in a growth vehicle that will grow steadily regardless of the economy, the market, or other changing factors.

Life Settlements are an excellent choice for steady growth vehicles. They represent the secondary market for life insurance policies, which can be bought and sold much like a deed of trust to a property. They rely on actuarial math rather than speculation and have proven to be immune to market swings, housing crashes, low interest rates and virtually every kind of economic downturns.

A Life Settlement is the sale of an existing policy from the current policy owner to a third party via a secondary institutional market in exchange for an immediate one-time cash payment that is less than the policy’s death benefit, but more than the policy’s  cash surrender value. You might have never heard of life settlements because until recently, they were reserved for institutional investors. (Now they are also available to accredited investors.)

Life Settlements create a win-win for both investors and sellers, matching policy owners who no longer need or want their policies (perhaps having outlived heirs, or finding themselves in need of cash to meet their own needs) with investors (or private investment funds) who are willing to pay more than the policy’s surrender value to obtain an asset with a secure future value. (Ask us for more information about life settlements.)

2. Private Lending. Many investors make the mistake of focusing on accumulation but ignoring cash flow until they try to retire or cut back at work, only to realize that they don’t know how to turn their assets into income!

The oldest and most reliable investment model for generating cash flow is private lending. This can include real estate bridge loans, fractionalized real estate investments, peer lending strategies such as and, land leases, and more. Learn about the advantages of being a private lender.

3. Real Estate. This means a home to start, as it’s virtually impossible to build wealth dumping money down the rent drain. Then it can include investment real estate such as rental homes, apartments, or commercial real estate. Investment real estate can (and should) produce cash flow, while also allowing you to build liquidity or equity, perhaps even enjoy the property yourself seasonally. Real estate can also offer potential tax benefits of such as mortgage interest write-offs, depreciation deductions, and shielding growth from capital gains taxes (in certain circumstances and up to certain limits).

4. Business Investments. Putting your own expertise to work creating your own source of income is a fabulous way to diversify! While perhaps not for everyone, many more people have obtained wealth through business ventures than through working a job and making typical investments.

Many of our clients also have:

5. A Stock Portfolio. Many of our clients come to us with mutual funds and a stock portfolio already. Although we would never recommend the majority of your assets to be in the stock market, there can definitely be a place for equities.

Stocks, mutual funds, indexed funds, and ETFs etc. are also assets that many young investors will get started with due to the ease of investing when you don’t have lump sums required for some other investments. Low-cost options such as Vanguard make it simple to start investing as little as $50/month after you have established your emergency/opportunity fund.

6. Precious Metals. Some clients desire precious metals in their portfolio, perhaps as a hedge against the dollar. Even with a traditional investment such as gold, be aware that it will lock up your money in an asset that can’t produce cash flow while you have it.

7. Digital Hedges. Some people enjoy speculating with bitcoin and other cryptocurrencies. This requires great caution as this is a volatile and speculative asset! If you enjoy living and investing on the edge, just make sure it’s but a leg of your strategy, and not a big financial gamble.

The Seat. A chair is not a chair without a seat! The seat represents cash flow, because cash flow is what supports you and your life—literally! While private lending is especially focused on cash flow, there are ways to convert every leg as well as the chair’s foundation into cash flow that will support you and your life long-term.

The key to generating maximum cash flow is to sequence how you use or liquidate your assets. You can often enjoy greater cash flow—and fewer taxes—by changing your disbursement strategy. But don’t wait to create cash flow—generating income builds confidence and expands your life options.

Is it time to balance your financial strategy? Contact us today; we’re here and happy to help!

© Prosperity Economics Movement