What Is Prosperity Economics? (And why would you want to use it?)

What Is Prosperity Economics?

(And why would you want to use it?)

Prosperity-Economics-paradigm There seems to be no shortage of financial advice, but that has not led to economic success for most. Too many Americans are having trouble saving for their own needs and wants while struggling to pay down debt and keep up with the rising costs of healthcare and college educations.

Many are saving in their 401ks and other qualified retirement plans, crossing their fingers it will be “enough.” Meanwhile, even those considered relatively wealthy are often unsure of how to grow their assets while protecting them from market instabilities, and taxes.

Prosperity Economics offers a way out of the mess. It doesn’t aim to help people succeed better at flawed strategies; rather, it offers a total paradigm shift about wealth-building. Prosperity Economics questions the financial assumptions we’ve come to accept as true and provides an alternative to “typical” financial planning.

Prosperity Economics – What is it?

Prosperity Economics Movement logo While sometimes hailed as the latest greatest thing, Prosperity Economics hasn’t been so much discovered as rediscovered. Prosperity Economics employs common-sense principles and strategies that preceded the rise of 401ks and the financial planning industry. It shows us how to optimize wealth by keeping it in our control rather than delegating our financial futures to Wall Street, big corporations, and the government.

Prosperity Economics can use traditional wealth-building tools such as owning a business, investing in real estate, and saving, borrowing and transferring wealth with dividend-paying whole life insurance. It’s NOT gambling on Wall Street, or putting your nest egg into retirement programs where the government gets to tax them later.

Prosperity Economics represents different values and principles than typical financial planning. The chart below gives an overview of Prosperity Economics as contrasted with typical financial planning:


Prosperity Economics also represents different strategies than typical financial planning. Ask yourself these questions, should you…

  • Hand over all of your savings to companies who will charge “management fees,” whether or not your funds are gaining or losing?
  • Analyze your “risk tolerance” (i.e., how comfortable you are with losing money) while subjecting your assets to losses?
  • Max out your 401k and cross your fingers that you’ll someday have “enough” to live on, without running out?
  • Take tax deductions now by putting money in a qualified retirement plan, only to pay more taxes later?
  • Tie up all of your dollars in accumulation vehicles that penalize you for using your assets and prevent you from borrowing against your them?

We think there’s a better way.

We practice Prosperity Economics because we don’t believe that “typical” financial planning works very well! Commonly-accepted financial advice often does not tell the “whole truth” about your money, and it doesn’t do a very good job of protecting your money, either.

Typical financial planning is “better than nothing” and will get you partway up the hill, but we want to show you how to reach the “mountaintops” of prosperity. We invite you to explore this website and contact us (LINK) to explore how Prosperity Economics can help you!

©Prosperity Economics Movement


Women and Wealth: Challenges, Changes, and Steps to Prosperity

Women and Wealth: Challenges, Changes, and Steps to Prosperity

“When people point out that I am successful in business AND a woman and a mother, I have to wonder why that should come as a surprise or be a fact worth noting.”

– Kim D. H. Butler, Financial Author and Advisor


What challenges do women face when it comes to money? What must they do to overcome these challenges? And where are the signs of hope and progress when it comes to women and wealth?

In this article, we’ll examine the facts about women and money, the obstacles that many women encounter on the path to prosperity, and how some women are shattering glass ceilings and creating wealth.

Women and Money: The Challenges

The Earning Gap. The median earnings for all women are $638 a week, compared to $798 for men–approximately 80 percent of what men earn on average, according to The Bureau of Labor Statistics. There are many reasons for the pay gap, including the type of work that that women tend to be drawn to, women’s reluctance to negotiate, and the discrimination that still exists in some workplaces.

Fortunately, this gap is narrowing. The Pew Research Center observes younger women are consistently beginning jobs with more equitable pay than women vs. men as a whole. In 1980, younger women entered the workforce earning 67% of what men earned. By 2012, younger women earned 93% of their male counterparts. For more on the earning gap, watch this enlightening video from Pew Research.

Household Habits. Women tend to manage the household finances, but men usually direct the investments. As a result, women tend to be better at budgeting, but generally have lower confidence than men when it comes to financial strategies and portfolios. According to Morgan Stanley, women are 44% less likely to consider themselves knowledgeable about financial matters than men, although women often prove to be better investors than men!

Child Raising. It costs money to raise children in more ways than one. According to Women’s Institute for a Secure Retirement and National Center for Women’s Retirement Research, the average woman spends 15% of her working years outside of the workforce caring for children and elderly parents compared to the average man’s 1.6%. Inevitably, while a woman takes time off, her male former co-worker continues to gain seniority, experience, and promotions.

Single Parenthood. Women are also 4 times more likely to be single parents, either following a divorce or as the result of a child born outside of marriage, according to U.S. Census Bureau figures. As a single parent, a woman is tasked with balancing work and parenthood, sometimes without additional financial support.

Longevity. Women live longer than men, which means that they must either keep earning or save more to support themselves in their later years. According to a report from the Centers for Disease Control and Prevention’s National Center for Health Statistics, life expectancy for females is 81.2 years; for males, it’s 76.4 years, a difference of 4.8 years.

Widowhood. The average age of widowhood is only 59.4 years, according to a study published in the Journal of Financial Service Professionals. 80% of married men will die while married, and their wives are often unprepared for such an event. The study confirmed that 70% of widows will fire their advisor, who likely did a poor job of preparing them for the financial realities they find themselves facing.

While poverty rates in the U.S. between men and women are not significantly different (13% for men vs. 16% for women), elderly women living alone are much more vulnerable. A Social Security Administration report showed that “the rate of poverty among elderly widows is consistently three to four times higher than elderly married women.”

Although financial statistics about women and money can sound daunting, it’s only part of the story. When it comes to women and money, there is much good news to celebrate!

Women and Wealth: A Success Story in the Making

There is a tremendous shift in financial power and equity happening between the sexes, and much evidence that more women are moving towards a more self-sufficient, prosperous reality.

The Changing Landscape of Wealth in America. According to a 2014 article in,

  • The number of wealthy women in the U.S. is growing twice as fast as the number of wealthy men.
  • Women represent more than 40% of all Americans with gross investable assets above $600,000.
  • 45% of American millionaires are women.
  • 48% of estates worth more than $5 million are controlled by women, compared with 35% controlled by men.

And lest we conclude that women are simply inheritors of wealth, note that 60% of high-net-worth women have earned their own fortunes, according to Forbes.

The Entrepreneurial Explosion. Eager to control their own schedules and destiny, new data shows women starting new businesses at a much faster pace than men. The number of women-owned businesses in the U.S. rose by 68 percent between 1997 and 2014, according to an American Express analysis of Census Bureau figures. Women are starting businesses twice as fast as men, with minority women starting businesses at the fastest pace.

Women in the Boardroom Help Companies Succeed. Venture-backed companies that include females as senior executives are more likely to succeed than companies with only men in charge, concluded Women at the Wheel: Do Female Executives Drive Start-Up Success? a report by Dow Jones VentureSource.

Organizations that are the most inclusive of women in top management achieve 35% higher return on equity (ROE) and 34% better total return to shareholders versus companies without this diversity.

Women-led private technology companies are more capital-efficient, achieving 35% higher return on investment, and, when venture-backed, bringing in 12% higher revenue than male-owned tech companies, according  to Women in Technology: Evolving, Ready to Save the World, research conducted by the Kauffman Foundation.

The “Power of the Purse” is Undeniable. Women control up to 80% of household purchasing decisions, a fact which advertisers are now paying attention to. And women will soon have even larger purses to manager. According to a 2009 study from the Boston College’s Center on Wealth and Philanthropy, women will inherit 70% of the money that gets passed down over the next two generations, and that excludes the increasing amounts they earn on their own.

The Power of the Portfolio. In the U.S. alone, women control $11.2 trillion, or 39%, of the country’s investable assets, according to Morgan Stanley. And they pay attention to where their money goes. Women prefer to invest in companies they perceive are making a positive difference as well as generating returns. They also prefer to invest in companies owned or run by other women, which will ensure that trends continue.

Five Keys to Being a Woman of Wealth

1. Save More

women-and-money.jpg There’s no getting around it. Women must save more than men, on average, to ensure a similar financial result. We recommend saving as much as 20% of your income, if at all possible. But wherever you are with your habits, simply start saving “more.” If you are not saving now, can you start putting away 5%? If you are saving 5%, can you bump it up to 10%?

2. Work Longer

Women live longer, but they do not tend to work longer. On average, women retire slightly younger than men! We need to revise our expectations about retirement and remain productive as long as possible. When full time work becomes no longer possible or desirable, consider part-time work or an enjoyable freelance occupation.

3. Invest Wisely.

It is imperative to not play guessing games with your investments, but to put your money in vehicles guaranteed to grow it. And if you are past the “accumulation” phase, you’ll want to put your money where it can generate cash flow. (We can help!)

4. Prioritize Your Health

Even with Medicare, healthcare and medical costs can swallow enormous sums of money. Take care to exercise regularly, eat healthy wholesome food, drink lots of water, and maintain a positive outlook. Focus on what you can do and practice gratitude!

5. Get Life Insurance

Many people think that life insurance is only for young couples with children at home, and they purchase term insurance that expires before they will need it, just like a warranty designed to expire before it is used! Permanent life insurance should be a priority for every married couple, and it can often be purchased up to age 85.

Even if you are not married, most people need a financial vehicle to store cash where it can grow over time. Purchasing a life insurance policy for yourself with a long-term care rider may be an excellent strategy to help you grow cash over time while obtaining protection against unknowns. If you have children, it is also an excellent way to leave a legacy that is much more tax-efficient than an inherited retirement fund.

How Can We Help?

We’re here to help you reach your financial goals! Reach out to us by phone or email, and we’ll set a time to talk. We look forward to helping you take steps towards a brighter, more secure future!

© Prosperity Economics Movement


The Surprising Research About Money And Happiness

The Surprising Research About Money and Happiness

“All I ask is the chance to prove that money can’t make me happy.”

~ Spike Milligan

can-money-make-you-happy.jpg Are people who make more money happier? What about people who save more? Can people be happy with very little? And how do your spending habits impact our satisfaction?

In this article, we’ll explore the relationship between wealth, income, and happiness. As you’ll see, there are many insights we can glean from various studies on the topic, the relationship between money and happiness isn’t necessarily simple.

The Price of Happiness (about $75k)

Economists Betsey Stevenson and Justin Wolfers of the University of Michigan examined World Bank data from more than 150 countries. Not surprisingly, they concluded that the more money you have, the happier you tend to be. However, money will only make you a little happier. According to, “each doubling of your income correlated with a life satisfaction 0.5 points higher on a scale of 1 to 10.” In other words, doubling your income may make you only about 5% happier than you are right now.

Other studies indicate that an increase in one’s income has a greater impact on happiness below a certain level. Research by Princeton University economist Angus Deaton indicates that in the U.S., $75k is a meaningful benchmark when it comes to money and happiness. Below that level, more money translates to a lot more happiness. Over $75k, increases in happiness begin to level off as income continues to climb.

Apparently, money matters more if you have very little of it, and it matters less when you have more of it.

What is the significance of $75k, more or less? It is theorized that $75k approximates the amount at which basic needs can be easily met. As Abraham Maslow’s hierarchy of needs suggests, when physical needs such as food, shelter, and healthcare are not met, other needs are less important in comparison.

It may be a case of preventing sadness more than buying happiness. Scholars at Michigan State University and the University of British Columbia concluded that above a certain level, there is “no trace of a relationship between income and happiness.” So while it seems that money produces happiness, the truth is that poverty tends to make people unhappy at a level far deeper than merely the struggle to pay bills.

Winning the Happiness Lottery

money-and-happiness.jpg However, not all studies support the “more is better” theory. Perhaps at odds with other studies, a report in Social Psychological and Personality Science magazine found that the wealthier people were, the less likely they were to savor positive events. Perhaps people with the financial ability to do or purchase almost anything they want are in danger of becoming numb to simple pleasures of life.

In this 1978 landmark study, psychologists sought to answer the question, “Is Happiness Relative?” by interviewing those who had experienced notable gains in life – Illinois State lottery winners – and those who had experienced great loss: paralyzed accident victims. While the lottery winners were determined to be the happier group overall, the accident victims actually derived slightly greater joy and pleasure from everyday experiences such as enjoying time with a loved one or visiting a park on a beautiful day.

Almost everyone assumes that more money will make them happier, but that’s not necessarily the case. Other studies, such as a 2008 University of California, Santa Barbara paper on “Unexpected Income Shock” found that modest-sum lottery winners (winning sums equivalent to about 8 months income) were not be measurably happier than others only six months after their windfall.

One theory as to why such windfalls don’t ultimately increase happiness is the psychological concept called “happiness adaptation,” articulated by Michael Norton, associate professor at Harvard Business School. In 2007, Norton co-authored a paper that sought to understand why reaching life goals – whether the dreamlike goal of winning the lottery or more common goals such as getting married – don’t end up making us as happy as we anticipate. The paper concluded that people tend to get used to things – both the good and the bad – and thus our personal happiness is not significantly shifted by such accomplishments.

Perhaps Sandra Hayes, a lottery winner with a degree in psychology from Columbia, explained it best in a comment to an article: “Just because you win the lottery, it does not change you as a person.”

happy-Fiji.jpgThe Happiest Place on Earth

It is important to keep in mind that no amount of money – nor lack of it – can determine one’s emotional state. While those living in poverty may be less likely to see themselves as happy, there are plenty of exceptions.

The World Database of Happiness, which measures the levels of happiness found in various nations according to a certain set of standards, often finds countries such as Costa Rica, Puerto Rico, and Mexico ranking above more affluent countries.

In 2014, a WIN/Gallup poll surveying people in 65 countries found that residents of Fiji were far and away the happiest people on earth, according to an ABC news article. In spite of average incomes well below $15k in US dollars, a whopping 93 percent of respondents said that they were either happy or very happy. (Only 67 percent of US respondents made the same claim.)

Lynne Twist, author of The Soul of Money, argues that our experience of scarcity is fundamentally contextual. In other words, we tend to base our determinations of what is “enough” or “not enough” by comparing our situation to that of others.

A 15-year old middle-class American girl in an upscale neighborhood may live like a king or queen compared to a 15-year old in Fiji, yet in her consumer-based culture, she may feel deprived if she can’t spend spring break in Hawaii or upgrade to the latest smart phone. Meanwhile, a school child in Fiji with a much lower standard of living may feel extremely content with life in a culture in which singing, dancing, and celebration are a way of life.

You Really Can Buy Happiness!

Regardless of income, research has shown that those who spend in certain ways find greater levels of contentment. Apparently, to spend your way to happiness, you should follow these rules of thumb:

1. Purchase more experiences, less “stuff.”

Research from Dr. Thomas Gilovich of Cornell University reveals that spenders experience more long-term happiness and satisfaction when they buy experiences rather than possessions. A new watch or necklace increases happiness for a short while, but it soon becomes a routine part of the purchaser’s environment, contributing little to happiness and possibly even inducing buyer’s remorse.

money-can-buy-happiness.jpg However, dinner with friends, a Broadway play, or an Alaskan cruise creates valuable memories shared with others. Connection creates meaning, and we’re more likely to bond with someone who also hiked the Appalachian trail than someone who purchased the same television.

2. Buy time.

You’ve heard that “money is time,” and spending money to create more time is another expenditure that tends to raise happiness. If a promotion guarantees a higher income yet a much longer commute, it might not be a good deal. Not only is time a valuable non-renewable resource, but the more time you have, the more experiences you can enjoy!

3. Spend on others.

Studies by the Chicago Booth School of Business and the University of British Columbia found that people experienced more happiness when they spent money on others. The emotional rewards of social spending such as donating money to a food bank were even tracked on MRI scans in a University of Oregon study, according to a WebMD article. Whether treating someone else to an experience or helping another – including giving to charities – it appears that money is best shared.

4. Save your way to happiness!

According to a survey of 1025 adults conducted by Ally Bank, the more money people have in savings, the happier they are! Those with savings accounts were 31% more likely to rank themselves as “extremely happy” or “very happy” than those without savings accounts. A notable 57% of those with $100,000 or more in savings describe themselves as “very happy” or “extremely happy,” compared with only 34% of those with less than $20,000 in savings.

Those surveyed counted among the benefits of saving the ability to “face the unknown” (92%), “feel proud” (84%), “feel independent” (84%) and “realize life goals” (78%). The majority of participants (84%) ranked having money saved as more important to their sense of well-being than eating healthy foods, getting regular exercise, and having an enjoyable job.

Are you ready for more happiness?

We’re here to help raise your satisfaction and your savings! Contact us today, we’d love to assist you with financial strategies than allow you to live, save and give in ways that give you joy and fulfillment.

©Prosperity Economics Movement

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