Taxes! Who in their right mind ever wants to pay them? Or who would ever donate extra to the national debt, which is an option on the tax form? We are everyday average citizens with a few dollars in our savings accounts. Yet, a billionaire in California just bought the biggest life insurance policy ever for $ 201 million.
Right now you are saying the same I am: “Argh! Insurance companies! They sleep with the devil and the IRS!” Yes, insurance industry has a bad reputation on pickpocketing our hard earned dollars. But is that stereotype correct? This mystery billionaire in Silicon Valley is teaching us a great lesson on preserving our wealth for our wife and kids. How so?
His kids that inherit his $ 201 million life insurance policy will be exempt from paying the crazy inheritance taxes. The inheritance taxes are now a whopping 50 %, depending on how much wealth you have accumulated. With President Obama going on these shopping sprees with your money, expect the death tax to go even higher. I hear rumors of 65 % tax coming in 2014. I would not doubt it.
We are learning from this Mystery Billionaire that one has to wisely preserve their wealth. And the best way to do so is with a large insurance policy. As a financial coach, I always advise my clients to buy two investments for the next generation:
- A 529 College Savings Plan
- A life insurance policy that comes close to a $ 1,000,000 policy
Why such a large policy? Because inflation in the next 20 to 30 years is the real killer of your investments. Inflation is the secret tax that the Federal Government does not want anyone to know about. The only problem with a large insurance policy is the higher premiums when you get older. For a million dollar policy, do expect to pay a good $ 20,000 a year for the policy when you come close to the average age of death according to actuarial tables.
$ 20,000? “How will I pay that?”, you are thinking to yourself right now. You will find ways of budgeting and savings that will make you pay for that. This is investing in the welfare of your wife and children. Do you want your wife being 70 years old and being a cashier at Target or Kohls to make enough for food a month? Or would you rather have your wife live worry-free on financial security? Thanks to pharmaceutical sciences, we are now living to the 90+ years of age today. One needs to think about the financial security for 20+ years after the husband dies.
It is your job as a father and a husband to supply your family with a college education and a financial security of old age. Do you want to be 72 years old and restocking paint and screwdrivers in your local Home Depot? Or would you rather be at ease of counting all your pennies and living on food stamps? It is up to you…… No! I said that wrong. It is your responsibility as a husband, father, and earning the title MAN OF THE HOUSE. Be responsible! Envision the future… your family’s future.
To Your Health…
To Your Wealth…
To Your Wisdom