Avoiding Faux Prosperity – Episode 075

This transcript was auto-generated and may contain errors.

[00:00] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, best-selling author, Kim D.H. Butler, and No BS Money Guy, Todd Strobel. Hey everybody, welcome to another edition of the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, we have best-selling financial author and my co-host, Kim Butler, with us. Welcome, Kim. Thank you, Todd. Today, we are going to be talking about the difference of for, F-O-R, prosperity, and for prosperity, F-A-U-X, prosperity, meaning to have something that appears to be real, but when you get down to the hardcore basics of it, it’s a copy of the original.

[00:53] It’s a cheap duplicate. It’s not the real thing, so it’s not sustainable in the long run. Kim? Well, you know, apparently you saw a, did you tell me it was a football player wearing faux fur that sparked this idea? It was actually, Tony Saragusa is an ex-football player who’s now a commentator, and he was wearing, I think he wears like a size 70 coat or something, and I’m going to see this guy in a size 70 fur coat. It looked like a brown bear coming down the sidelines. I bet. Well, whether or not you like faux furs, it is interesting how many faux financial products there are out there. So the first one that we’ve talked about before, but is always worth mentioning, is universal life. It is such an example of a copy of an original, the original, of course, is whole

[01:50] life that can appear on the outside to do a good job and literally even provide all the benefits that the real deal does. But holy cow, when you take out the lining and look at the inside, you can see the disaster that occurs. And so we are just wanting to share with as many people as possible the dangers of universal life. And, you know, there’s always an exception. There’s always going to be maybe one or two places that it could actually work. But to try to help people understand that universal life is not permanent insurance, and even though it’s sold as such, it truly is faux permanent insurance. It’s fake. It’s not going to get you to where you want to be, which is to have the death benefit when you die.

[02:40] It’s also faux in that most of these policies are index policies as well that make you think that somehow or another you’re investing in the market when you’re really not. They’re tied to options which though they may function as a part of and reflect the market, you are not actually investing in the market either, are you? Definitely not. And so here you have a situation where you’re getting not only a faux savings account because the cash value of the universal life policy is never going to be there for you, but you’re getting a faux investment because you think you’re getting an investment in the stock market when you’re not. And you would be so much better off separating out your savings from your

[03:26] investing. And gosh, it took me a long time to realize this. I used to have people ask me, well, what’s the difference between savings and investing? And I would say nothing. But it truly is, you know, the verb save is designed to help us understand that we’re saving to be liquid. We want a cash account that’s liquid and available and that’s worlds away from an investment because all the good investments are not liquid. They build wealth over time. It could be real estate. It could be bridge loans. It could be the life settlements, but it could be a business to any of those environments take time. So we really encourage people to understand the difference between savings and investing and to make sure, of course, that both of them are

[04:12] real, that you’re going to have real cash value for your savings and real investment dollars for your investments, but that never the twain shall meet. And when people sit on the fence and they try to get both things in the same environment, they are going to hurt themselves. And I would say that an annuity is a similar example to where the universal life has its problems with the life insurance, the cash value and the investing. The annuity has the same three problems because people talk about an annuity’s death benefit. Well, all that is, is the money that you have in there. And then they try to make it be like a savings account, like getting a fixed rate of return, but it’s not liquid. And then on the other hand, they try to make it be an investment because

[04:59] they think that maybe 7% or something is good enough to grow your money. And so I’m a huge believer in trying to get lots of jobs done by a single dollar, but what I’m not a believer in is when we’re sitting on the fence and we’re not truly saving or truly investing, whereby we can separate those two out and consequently get much better results. And the one thing that is real is the fees in the universal side. Those are not faux. You really mean it. That’s well said, very well said. So the universal life and the index universal life even have a column for some of their fees. Of course, the index universal life, if you dig through the 40 page prospectus, it’s in there in black and white, and that should be an

[05:49] alarm to you right away. If you look at the 40 page illustration, it is also in there. Whereas a whole life insurance illustration is maybe 12 pages, maybe 15 or 16, if there’s a bunch of writers added. So I know it’s rough reading the fine print, but it is something that is so important when it’s your money, you want to dig in there and learn all the pieces and learn both the good and the bad so that you really get a chance to make sure that a product that you should own for 30, 40, 50, 60, 70 years is going to sustain itself and do the job that it is supposed to do. Super. What’s another example of for prosperity versus faux prosperity? Well, I love taking a look at our thinking. Always our first principle of prosperity is think.

[06:48] And so one of the things that I learned recently is a comment from my sister that I just thought was fabulous. And she said something about how important it is to manage your mind. And so thinking about things, and we talk about thinking about things from a prosperous standpoint, thinking about things is what enables you to dig in and read the 40 pages of the universal life or read the prospectus or watch the whole video on a particular investment, but managing our mind and making sure that we’re really watching the intake on our mental abilities is super important as well. And so this goes to what we read. It’s so important that we pay attention to what we read. Now, an example, just the early week in January, when the stock market was

[07:44] having its major drop, if you have money in the stock market, then maybe you should be reading about it. But for most people, I think all that reading about the stock market does is cause us anxiety. And especially in the morning, you want to be super careful about what you’re feeding your mind. Just as you’re careful about what you’re feeding your body, you should feed your mind with good things, with positive things that are helpful, that enable you to go forward and make good decisions with confidence, not be feeding your mind with things that cause scarcity, thinking or concern or fear or what have you. And I’m not saying you’re going to bury your head in the sand and pay no attention to anything, although sometimes that can be valuable too.

[08:28] But for the most part, just pay attention. You know, I’ve been on the plane a lot. I always see these women reading all the magazines that are out there. And most of the magazines cause people to be in scarcity mode. I’m not pretty enough. I’m not good enough. Tall enough, thin enough, fat enough, short enough, whatever. That’s another area where we can really pay attention. I’m sure men’s magazines are no different. Really start to take a look at what you’re reading. Well, I think one of the greatest sales techniques or whatever marketing techniques that have been done in this country or maybe even globally, this is probably the Western contribution to the world, is training consumers to believe that they’re not enough because once

[09:16] you’re convinced you’re not enough, you can be sold anything. Yeah, that’s really well said. So the marketing messages are so prevalent. And as we head into, I don’t know when this podcast will be live, but we head into Super Bowl. People are spending more time on TV because it’s winter time. We have to pay so much attention to the various advertisements that are out there. Our family, when I was growing up, we used to have that habit of hitting the mute button when the advertisements came on because we didn’t want our heads filled with all the ads for all the prescription drugs that are out there. And my gosh, it’s even more prevalent today. So paying attention to what you’re thinking, reading, listening, watching.

[10:00] Tammy, my sister told me of a lady that was spending two hours on Facebook every day, realizing that wasn’t the best use of her time, but she had a hard time doing anything else. And so Tammy said, set the timer, 10 minutes. That’s it. Then go find something else to read. Super. I think that’s another fantastic example. Any more money or economic examples you can think about? On the for prosperity versus foe prosperity, we always want to be looking for the whole truth. So whether it’s your mortgages, whether it’s the interest rate on the car loan or the furniture loan that you’re being talked about, whether it’s the information about your 401k and the match, all of these areas have potential for foe information.

[10:52] So we’re coming out with a book called Busting the Interest Rate Lies. I’m going to say it should be available in the late January, early February part of this year, 2016. And it goes through a lot of the interest rates that are presented incorrectly in our society. And of course, presents the foe prosperity time frame and information and thought process so that you can get the whole truth. One of the biggest challenges with interest rates is wrong time frames. Always, for example, like the 15 year versus 30 year mortgage discussion. They’ll compare the 15 year mortgage over 15 years to the 30 year mortgage over 30 years. That’s the wrong time frame. You have to compare them both over 15 or both over 30.

[11:41] So that’s that part. Then you have the actual interest rate itself. So often there are different interest rates makes it hard to compare. So in the book, we bring all that down to a similar level, just like any scientific experiment. You only want to change one thing at a time in order to figure out what’s foe in the environment, in the information that’s being presented. So the Busting Interest Rate Lies book we’re super excited about should be available soon and we’ll let everybody know when it is. And it will be a great primer. Highly recommend that you get it for every high schooler and college student that you know, because it’s a story of a high school kid going through all the interest rate things in his life

[12:23] that he needs to learn about. Super and you can track the book or if it helps you by going to partners, the number four, prosperity.com. There’ll be a big announcement on there when the book comes out as well as I’m sure we’ll get a podcast out on it. But sometimes it takes a little bit of time because we’re kind of backed up on those right now. But again, that’s a great resource for you. And again, I have read the book, so I’m excited about seeing it come out as well. Anything else to add before we wrap up? Just always be grateful. We’re happy to have the new year begin and lots of good things. And if you’re feeling like you don’t have them in your life, sit down and take five minutes to write a list of things

[13:04] that you are grateful for and then up level at one. By every thing, write an idea. So we can be grateful for things, but we can be even more grateful for ideas. So that would be for gratitude versus faux gratitude. There you go. Super. Well, this is No BS Funny Guy Todd Strobel. Special thanks again to Kim Butler and take care everybody. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.