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6 Things Every Parent Should Know About Money

by Cort Dial

 

1. Our children will live 100 years or more.

Life expectancy estimates for our kids are approaching one hundred years. For our grandkids, up to 140 years! Obviously, our children are going to face challenges we cannot imagine today.

One challenge that is entirely imaginable is they’re going to have to work until they’re 80 or 90, or hold 30 to 40 years of income-generating assets. 

As a nation and as parents, we’re not prepared to face these financial challenges. The majority of us are using 40-year-old investment and savings technology (401(k), IRA, etc.) intended for generations expected to retire at 60 and die at 75.

Even at present, these antiquated vehicles are failing us. Less than 4% of Americans say they’ve prepared adequately for their retirement years. Half have nothing saved. What makes us think technology analogous to the rotary phone will do any better decades from now when our kids face retirement?

 

2. Our children will need to invest and save in an entirely different way than we do.

In the last decade, technology specifically designed for the unprecedented financial challenges our children will face has become available. As parents, we must learn about this technology and put it to work for ourselves and our children.

Children tend to invest and save as their parents do. If we want our kids to take advantage of the latest technology, we must set that example. 

 

3. The sooner our kids start, the sooner they will enjoy financial independence. 

A child whose parents (or grandparents) invest $5,000 annually in this new technology for her first ten years will have approximately $3,000,000 available at age 70, which would produce for her a tax-free*, annual income of approximately $300,000 until her death. A child whose parents delay investing this same amount until he is 10 will enjoy less than half of all this. 

 

4. Parents can establish a family culture where today’s generation provides for the financial independence of the next.

Imagine a family tree full of financially independent individuals. Image generations blessed with the freedom of choosing based on their true wants and not their bank accounts.

Now imagine those generations are financially independent not because they inherited wealth or invented the next iPhone, but because their family culture demands that one generation invest for the financial security of the next. These new technologies put this family culture within reach of all parents that are willing to learn and utilize them.

 

5. The children of parents who do not prepare financially for their senior years are likely to pay their parents’ bills.

American seniors are declaring bankruptcy at alarming rates. Seniors as old as 80 are forced to work to pay their bills. The number of parents living with their children has doubled since 1995.

Unprepared seniors who can no longer find meaningful work or become ill or disabled often have no one to turn to other than their kids. We owe it to the next generation not to be a financial burden and to educate them in and model for them the latest investment and savings technology.

 

6. This technology cannot be found at your bank and is not available from your brokerage firm.

In 1999, the Gramm-Leach-Biley Act brought down the firewalls between banks, investment firms, and life insurance companies erected after the Great Depression by the Glass-Steagall Act. This change had minimal impact on banks—for the most part, they’re still the place we save and borrow money.

The restructuring also had minimal impact on financial firms—they still take a disproportionate percentage of our account value in exchange for investing our money while we put up 100% of the capital and assume 100% of the risk. 

But, the change did produce an enormous opportunity for life insurance companies, which recognized the colossal failure the “Great 401(k) Experiment” has been. They also appreciated the unprecedented business opportunity this change created for those willing to offer Americans a safe and reliable means to achieve financial independence and retire with dignity. 

It took these companies several years to design the products that would deliver on this lofty goal and get them approved by state and federal regulators. Then, in the early 2000’s, a few of the most progressive companies began bringing to market the first products in our history specifically designed to insure twenty-first century Americans’ financial futures. 

Regrettably, these products were widely received with apathy because of 1) generally negative preconceptions of insurance companies, 2) the stock market delivering positive returns at that time, and 3) the products were not available from the financial institutions Americans had become accustomed to using for investing and saving.

The market crash of 2008 was a game changer for many Americans. Consequently, both consumers and insurance companies began to reevaluate the potential of the alternative products originally introduced earlier in the decade. As insurance companies gained a stronger grasp on the potential of these new technologies, they began to tweak the products to address better the problems Americans face. 

Today, there are insurance products available to Americans of all ages and incomes that:

  • Provide a guaranteed, tax-free*, lifetime retirement income
  • Double that income if medically confined
  • Provide growth greater than investing in the stock market along with 100% protection against downturns in the market (can only make you money and can never lose money)
  • Charge zero fees
  • Give you reasonable access to your money in an unforeseen emergency
  • Protect against the financial impact of a serious illness or disability

Breaking with the status quo is always daunting, but if anyone can give us the courage to try, it’s our kids. So, research these modern investment and saving technologies and be open to new ideas. Your centenarian daughters and sons will thank you. 

* Tax-free income require after-tax contributions


Cort Dial is the Founder and CEO of Bulletproof Future Planning, LLC. Its mission is to educate Americans on how to achieve financial independence and retire with dignity. www.areyoubulletproof.com

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