Monday, August 24, 2009

ATTENTION 401k owners! Sick and Tired of Losing MONEY?

Most people are afraid to look at their 401k statement. Thanks to the downturn in the market; the values of their stocks or Mutual funds are hitting rock bottom. Most people have ZERO insurance on their investment assets. If you bought a piece of Real Estate, the bank requires you to have hazard insurance. If you purchase a new car with a bank loan, the bank requires that Physical Damage is included on the Auto insurance policy. So why does the average investor invest in the market without an insurance policy? In other words, how do you protect your mutual funds from loss of principle? The answer is to Dollar Cost Average! Buy more shares while they are cheap of the Mutual Fund or stock because they will eventually go up! This is the advice of Suze Orman and Dave Ramsey. Where do they buy their crystal ball? How do they know it will go up in value? Their advice is to buy cheap term insurance for 20 years and invest the difference into mutual funds, so at retirement age; the need for life insurance is not needed. This advice has plenty of flaws. Life Insurance Companies expose very little of their cash reserves or assets to the market, so why should the average person be 100% self insured with Mutual Funds? Seems fishy? Keep reading...
401k plans are just Defined Contribution plans. People can place money into the plan pre-tax and at retirement, the IRS will tax ALL withdrawals at the investors' Income Tax bracket. This present Congress is planning on reversing the Tax cuts from 2001, the lowest tax cuts in decades. Investors at retirement are in for a rude awakening. It will be just a matter of time before you will hand over a large portion of your 401k earnings right BACK to the IRS. The money invested by YOU can be taken by Congress upon the changes of the Tax law, since 401k plans are REALLY qualified plans under the US Tax code. What control do you have over YOUR hard earned money? The answer: NONE. Keep reading....
Here is another flaw with 401k plans. The investment choices in the 401k plan are provided via the employer. Since most HR managers are NOT Securities Licensed, how does the Average Employee know what Mutual Funds to choose? The answer, they have NO clue! As they choose their investment choices, these choices begin to lose value especially in an economic downturn. The employee just hears from Good old Smart Gurus like Suze Orman and Dave Ramsey to continue to place MORE money in these Mutual Funds since the shares are cheap now, the overall MARKET ALWAYS turns around! I always wonder, why not place these claims in writing? If these "gurus" are so sure of their claims, place these claims in writing!
What is guaranteed to happen is your 401k money will run out at retirement! Thanks to the IRS, and your principle being decreased upon EVERY withdrawal. It does not compound at the same amount each year because the owner keeps taking out money! So Dave Ramsey and Suze Orman please place your Investment Strategy in writing! They claim you will be self insured at 65, but where is the proof? Where is this statement or claim in writing by Suze Orman and Dave Ramsey?
The reason why these claims or statements by Dave and Suze are not in writing because Mutual Fund investing, like most forms of investing provides ZERO guarantees. It is written in the prospectus, "Principle could be lost do to market risk". This leads us to my original point, what does a Mutual Fund investor do in a down market? He(She) can just hope and pray. What kind of investment strategy is this? It is very passive and places all the control in the hands of the Mutual Fund manager and the Federal Government. Oh yes, the Mutual Fund manager is going to make money if you LOSE money or make money. They also by SEC law, can not purchase ANY shares of stock that are NOT part of the Mutual Funds charter. This means they must continue to purchase the same crappy shares regardless of performance of those shares! This is insanity! The risk is passed DIRECTLY to the owner of the Mutual Fund shares..YOU! This is a VERY VERY RISKY investment.
Why do people invest in these risky investments? For starters, the ERISA law that was passed in the 1970, pushed retirement planning back towards the employee. The employee from that point forward was responsible for his/her retirement planing. Next, Mutual fund companies are very successful in marketing their funds, and they make it really simple for the average or poor person to invest. With those pooled assets, they make billions from average investors while the average investor assumes ALL THE RISK! If you factor in the Federal Reserves ability to print money and manipulate interest rates, this is a recipe for disaster;along with these Federal Government stimulus packages. The IRS tax at retirement is the last straw that breaks the "camel's back". Why continue this insanity?
What is a better more efficient option? Its obvious that the combination of 401k plans(and their equivalents) are not the best way to accumulate wealth. Let's wave a magic wand and create a more perfect wealth accumulation vehicle. If we could list out some benefits, here are some:
  • Liquidity-easy Access to money
  • Safety of Principle-Principle is protected against downside market risk
  • Excellent Returns-Vehicle had the ability to provide returns that are similar to the Stock Market
  • Tax Free Growth-The gains from the performance of the principle is protected from Taxes or Taxes are Differed.
  • Tax-Free Retirement-When the money is withdrawn, Income Taxes are eliminated or reduced.
  • Tax Free Wealth Transfer-The Cash could pass through Probate or eliminate Estate Tax on cash accumulation. Tax Free transfer to heirs.
Where can one find a vehicle that can provide these features? Please email me at rbjbizgroup@gmail. com to find out more about the AMAZING wealth accumulation product. We can perform an analysis to see it YOU qualify! Stop donating money to your Mutual Fund manager! Stop providing the IRS a Bond that will come due at retirement! Take control of your hard earned cash NOW! Do it now before its too late!!

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Saturday, August 15, 2009

SHOCKING NEW PROGRAM IS REVEALED! LEARN Secrets on Auto insurance Savings!

If you live in the State of NC, you can have a major accident;save money on your Auto Insurance AND be forgiven! That is right! You can get into an accident and the insurance company will NOT charge you for the accident! It is called Accident forgiveness. You have seen the commercials advertised Nationally by David Palmer(The guy who is the President from the Show "24"). In the State of NC, there are NO companies that carry this feature, ONLY ONE! Call 866-846-4901 to find out which company is doing this program in the State of NC. All companies must file their rates with the State of NC, only ONE company is GIVING away money like this!!!
How accident forgiveness works is this: After setting it up on your policy, it will cover the ENTIRE policy! If you or any over your drivers are involved in an accident, the insurance company will not CHARGE you for an accident! This means MORE cash in your pocket if you are involved in an accident! NO CHARGE for points! That is better than Cash For Clunkers!
How do you find out more information about this AWESOME program? Call 866-846-4901 for more details. Ask for information on the Accident Forgiveness package. This package includes also minor violation forgiveness also! This could potentially save you money, and keep MORE cash in your pocket if you are ever in an accident! Call 866-846-4901 for more FREE info!! Call NOW!!! In Case you forgot, it is 866-846-4901.
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Saturday, August 8, 2009

A Simple Solution For Health Care Reform

A Simple Solution For Health Care Reform

I have been paying attention to the rhetoric being used in the current debate on Health Care reform. Right now, no one REALLY has a great solution. The current requests by Congress are not satisfactory by the people and their respective constituents. The President is losing popularity on his position in this particular issue. Republicans and Democrats resort to blaming the Insurance Companies for their underwriting guidelines in regards to Health Insurance. What I find interesting, that there is a solution already in the marketplace! What is that solution? I will present this solution shortly, but let's explore why the current system is not working. The current system has several problems, but the main one is the rising costs. Let's see why costs are rising, and how "The Simple Solution", can begin to gradually fix this issue.

Let's look at main reason why costs are rising in the health care arena. First of all, no one REALLY knows what they are paying for their service. Many Americans don't pay cash for all of their health insurance needs. Those costs are typically transferred over to a 3rd party payer :e.g. Insurance company or Government Health Care. With Private Insurance, the premiums are usually paid by the employer and small percentage is shared with the employee. Government Health Insurance is paid by the tax payers. The insured may pay a small fraction of the office visit or service, but has no clue to the true price of the visit! For example, if I have a typical PPO network Group Insurance plan, I make my doctor appointment, show them my card; and pay the co-pay. That co-pay is a fraction of the doctor's visit! I see the doctor, and go home! The doctor bills my insurance company, and they pay the doctor for my visit; typically at a lower price than his true retail price. Here in lies the problem: Since I don't know the true cost of the visit, I will more than likely over-utilize the service, thus creating a higher demand for the health care providers' services. This problem is also compounded with the fact that my employer is picking up most of the bill for my health care premiums! So what happens? The costs of health care go up as well as the costs of premiums!

When this happens on a large scale, the insurance companies must either raise the premiums for the overall group, or drop them from the plan. Insurance companies are in the business to make a profit, not provide free health care. They have obligations to meet also.

What is the solution? The solution must have incentive for the insured. It must have an incentive for the employer, and it must still have some incentive for the health care provider. It must be a win-win-win. The solution must be able to control costs, and it must give some feedback to the insured to allow them to choose their service based on price, but not lose access to quality health care. It also must provide coverage when something catastrophic happens to the insured. You ready for the solution!

This solution is a combination of a Health Insurance plan and a personal savings account. It is called a Health Savings Account. Let's explore how it works. It has the workings of a typical Auto or Homeowner's insurance policy. Let's look at your Auto policy. You may have a $0 deductible or a $1000 deductible on your car. If you are in an accident, the $0 deductible policy, the insurance company pays for the entire damage to the car; while the $1000 deductible is different. You must pay the $1000 first, then the insurance company pays the rest of the bill. Which one is cheaper in premiums? If you guessed the $1000 deductible, go to the head of the class! That difference in premium between both types of deductibles, you could save in an account and cover the costs when you do have a claim!

Heath Savings Accounts work very similar. Here are some benefits:

  • Contributions to the Account are Tax Deductible
  • The money in your account is YOUR MONEY not the insurance companies'
  • With most HAS plans, once you meet the annual deductible, the insurance company pays for the insurance claims at 100%
  • Any office visit during that year, paid out of the HSA account is counted towards your deductible
  • Premiums for these plans are considerably less than tradition PPO plans.
  • With most HSA plans, in network providers must charge you the network cost versus the actual retail price. This provides tremendous savings for the client!
  • The visits are paid with a VISA debit card, the health care provider receives their money, right then! Reduces Admin cost to file to the insurance company! No waiting for reimbursement from the insurance company for the health care provider!
  • For the insured, ANY health care related costs can be used from this account: i.e. Drugs, Short Term disability premiums, Long Term Disability premiums, Dental Insurance premiums, etc.
  • Since the Premiums are cheaper than a typical PPO plan, the cost to the employer is reduced, AND the employee can take the account with them if they leave their current employer!
  • It will cover catastrophic events: Major Hospitalizations, etc. Keep in mind, if these events exceed the annual deductible, you are covered 100% by the insurance company!
  • Many companies lock in the premiums for 2 -3 years! No major rate increases!
  • It can be sold as an individual plan or a group plan

    This is a small list of all the benefits for this type of insurance. Is this for everyone? It could be! It provides a win-win-win for all parties, and gives the consumer the power of choice on how he/she can spend his money on health care. It also provides the employer a more cost effective way to provide multiple health care benefits, and still be competitive in the marketplace. It also provides the Health Care provider, a much simpler way to process and receive payments, and it promotes better customer service because the consumer will have choices since he is paying cash!

    The irony of all of this debate, these are types of plans have been in existence for several years, no one has really promoted this plan in the debate. Its time to look at these plans as a step in the right direction for the solution to this "Crisis" For more info on this type of plan, send me an email at

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