The Truth behind those Multipolicy discounts!!

I really don’t mean to offend anyone’s intelligence but everyone needs to know the truth.  My first statement is that businesses are in business to make a profit! Am I correct by making that statement? So if that is correct, when all of these companies advertise, All State, Farmers, State Farm, New York Life….Get the picture? They spend millions of dollars in advertising cost…Who do you think pays for that expense? Right!!! You guessed it YOU do! Let me give you an example.

When my daughter was born in 2008 I wanted to begin some kind of savings account for her, not at a bank because they don’t pay crap for returns and I might as well put the money under my mattress right? So here goes. In my networking group a New York Life agent offered me a custom whole life policy. I invest $100 per month into this cash accumulation policy until she’s 18 years old, has a death benefit of $140,000 and it can start her off o.k. So I thought great, the rate of return was like 6% better than the bank also not as aggressive as being in the market directly. So the way that account works is you pay a portion of the premium to the cost of insurance and the difference into the savings part. All fine and dandy until I entered the business…

So I enter the financial services industry after leaving mortgage for 16 years. That’s when I understood companies that have high overhead and companies like mine that have ZERO overhead. I investigated my daughters policy…A better product, similar but WAY different…Instead of a fixed rate of 6% now invested in the open market (where over the last 15 years the S&P 500 has done 10%) I gain an extra 4% and still have a guarantee where the money will never lose. But here’s the kicker. Better policy, same death benefit, cheaper cost of insurance the premium was $38!!!!!So where the premium with New York Life was $100 it’s now $38…What does that mean? The the extra $62 goes DIRECTLY into the savings bucket…Now more money is growing, higher rate and much faster.

So let’s talk about those multipolicy discounts…..First do they really exist or do they over inflate the policy to begin with so you think you are getting a discount. My good friend Garett has 3 policies with one of the above companies. He has one whole life policy and one term policy. Just to compare his multi discount term policy for kicks. He has a $500,000 term that he pays $55/month for 20 years. Forget the fact that he has two junk Whole Life policies,…So I ran a $500,000 20 year term policy with our company….The premium was $26/month…No discount just our cost..The same $55/month he’s spending at the other place for $500,000 we could cover him for $1,200,000…Would that extra $700,000 to his wife and kids be nice if something happens to him?

So people don’t be fooled with marketing terms as MULTI DISCOUNT policies by companies that over charge to begin with to pay for their mass advertising dollars. Educate yourselves and get advise from people who care. For more info click here to visit my site.

Credit Card Companies gone Mad.

You will not believe this story, well you just might. I have a client that was given a credit card while on their cruise. Last January 2009 they booked a reservation in which they canceled. The refund issued was for $10.00 less than what they had put on the card. To make a long story short, they were unaware of the $10 balance but get this? The credit card company began charging them $29 every month they were late on top of the late fees…In July 2009, the balance had reached $147 for the $10 owed? The kicker is that when the client made the $147 payment in July the credit card company failed to tell my client that the payment being made was also past due, so guess what? They charged them another $29 plus late fees. The new balance now is $90!!!!!Is that insane, ridiculous or what? A $10 balance got to over $240 in a year and the credit got thrashed!!!!!!!

People, we need to wise up…This game called life has only two sides to play on, everything is 100% financed, we are either paying % or making %….Which side do you want to play on……

We have ways to restructure your debt (click here), teach you to save and how money works (click here) do what the WEALTHY do; hence that’s why the rich get richer? How the RULE of 72 applies to evrything, don’t just get educated take ACTION! It’s been said that Knowledge is Power, that’s not all true; it’s Applied Knowledge that is Power…

Folks, take action, contact a Financial Professional today!

For contact info click here!

Is the 401(k) good or bad?

This is a highly debated issue and my personal opinion doesn’t really matter but my goal is to get the public educated, fully educated. You see I once wrote that we are a told too society…We do whatever we are told to do, don’t question it and never really do our homework. Unfortunately at the end when you are 68 years old hoping that your money is around and it’s not what happens then? Next time you are at Walmart look around? Who’s greeting you at the door, who’s checking your receipt when you leave, American’s that should be retired at the golf course, enjoying their golden years but they are not, WHY?  Because they put their future in the hands of people who had an agenda that did not have your best interest at hand…So what will happen to the next generation, the ones that currently spend more than they make because again we are told to spend, ( turn on the tv) buy but never to save….I talk to so many people who would rather spend $750/month on a BMW v saving for their retirement….We are in trouble and something has to change….

Let’s dissect a tax qualified retirement account, that’s a 401(k), IRA an account that you do not pay taxes on money earned today but you pay taxes later after the growth has occured….For conversation purposes if you save $500/month for 30 years @ 12% you will have accumulated $1,700,000….Now there’s two ways to withdraw the money:

1. A lump sum-$1,700,000…You if you chose this route @ 50% tax bracket you will pay the government $850,000 so your retirement is now at $850,000.
2. You can take annual installments, so lets say you took 10% for 10 years, that’s $170,000 at a 30% tax bracket you’ll pay $51,000 x 10 years that’s $510,000, retirement earner $1,190,000…

So the question is, who did you really save for? YOU or the GOVERNMENT? So what do we do? Great question…Is the saying the rich get richer and the poorer get poorer true? Do you think the rich do what the masses do? Do you think the rich go shopping at 3am on Black Friday? Do you think the rich put their money is something that is heavily taxed? For the rich secret’s click here!

Like I said above my personal opinion doesn’t matter do your homework…Last question, do you think Time Magazine knows what they are talking about? If you are interested read the October 19, 2009 article. To help you out click here for it.

Enjoy…

Why not Credit Card Modifications?

Ok, everyone is looking to do a loan mod, why because the market is so messed up and EVERYONE is upside down. Is the credit card industry not messed up too? I mean there are folks that have never missed a payment, have over 800 fico’s and the credit card companies are increasing their rates to 28%…Not only that, they make large payments then get they limits slashed…That’s crazy!!!!!Let’s fight back, why not…Let me give you a scenario!

As we speak American’s are in debt and have absolutely no savings…They are more concerned with their credit score than they are their future, their children’s future….How about we turn the tables….I have a client, 42 years old that has over $50,000 in credit card debt. So we are proposing to change his monthly out going a bit. We will start a debt management program, no different from a loan mod program….$800/month towards his debt, PAID in full in 36 months (DEBT FREE) how does that sound, no BK….Then then we will take $1500/month and put in a tax-free savings vehicle that at 65 years old will accumulate over $1,100,000 TAX FREE! Not to bad, better yet we will save him $700/month…How about that debt structure. So let’s recap:

1. He will be DEBT FREE in 36 months.
2. Save over $700/month
3. Have a TAX FREE retirement of over $1,100,000

The other alternative is to do nothing, continue to pay $3,000/month for the next 36 years, have no emergency fund and no retirement, know you tell me what is a better debt structure? Honestly, can you loan mod that will probably never happen do a better job?

For more info please call me or email me…click here for contact info…

Life Insurance products with Cash Value!

O.k I’m writing this post because I am coming across too many people who have purchased life insurance products that are getting taken by their so-called financial adviser. Many of you have more that one permanent insurance policy! Why? is my question, why would your financial adviser do that to you. There is no reason for that to be happening except that he gets paid for the two policies written. Each policy especially if it’s a Whole Life type has extremely high fee’s and high costs. Flat out Whole Life policies are terrible and if you have one get out ASAP and get a different type of life insurance like a GIUL(Global Index Universal Life), it’s the one that I have.

Having a savings plan within life insurance is a great idea because the IRS allows the growth to be TAX FREE, meaning you don’t pay taxes on the growth unlike your current tax qualified accounts. (Click here for a great article on this secret tax code). The idea with this type of policy is to over fund it, the more money you dump in this policy the more it will grow….When you are getting 9%,10%,11%, 12% or even 13% on your money TAX FREE why not. But the kicker is why is your adviser selling you two of the same policies when you should just over fund the one. Now if you need more insurance coverage then buy a term policy, it’s very inexpensive especially if you are healthy and under 50, if you are a female it’s even cheaper.

So people do your home work, I know that consumers aren’t aware and are very trusting and if you get a great sales person then you are doomed, always check your gut ask questions and lots of them.

Reasons why I personally chose the GIUL for me is as follows:

1. It’s Tax Free on growth
2. It has a 1% Guarantee(i.e. you won’t lose your money)
3. It has the high rate of returns of up to 13.25%
4. It’s liquid, you need not wait until 59.5 to touch your money, therefore you are in control.

Lastly, in your 401k or any other tax qualified account let’s say that you save $500/month for 30 years at a return of 12%, that’s roughly $1,700,000 in your account. But after you pay taxes, depending on how you withdraw your money either in a lump sum or annual installments also dependent on your tax bracket at that time you will pay anywhere from $500,000 to $875,000 dollars in taxes…So the question really is, who did you really save all those years for? The government! With Life Insurance it’s your money 100% tax-free. Due your due diligence and contact an expert today.

Here are a few video’s for you:

Re: Your Life Insurance!

I am your life insurance policy.

You and I have similar purposes in this world. It is your job to provide food, clothing, shelter, schooling, medicine, and other things for your loved ones. You do this while I lie in your safe deposit box.

Click here for full letter

Senators Agree to Extend Homebuyer Tax Credit Legislation Pending Approval From Congress

Senators have agreed to extend the $8,000 first-time homebuyer tax credit originally set to expire on November 30. Once the Senate officially votes on the bill it will move to the House of Representatives, which strongly supports the extension. The Obama administration has also signaled its strong support for an extension of the tax credit.

Aside from the first-time homebuyer credit, the new plan would offer a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing primary residence between December 1, 2009 and April 30, 2010. Buyers would have until June 30 to close on their new homes.

There is an $800,000 price limit on all homes eligible for the credit. The income limits for all buyers would rise to $125,000 per year for individuals and $225,000 for married couples. Under the current program, the limits are $75,000 and $150,000 respectively. The first-time homebuyer credit is also available to those who have not owned a home in the previous three years. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.

According to the Treasury Department, more than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the first-time homebuyer tax credit.

Please be advised that this legislation has not yet passed, but I will be sure to keep you informed as it moves through Congress toward approval. I’m committed to meeting your home financing needs. Call me if you have any questions, or if you would like to get started on a loan application today!

The Credit Game…How to Win!

It’s late 2009 and the consumer credit world is still in turmoil. You have a new credit law, The Credit Card Accountability Responsibility and Disclosure Act of 2009, which partially became law in August 2009 and will completely become law in either February of 2010 or December 1, 2009 if Democrats have their way. You have a new FICO® score, FICO 08, which is now live and commercially available at all three of the credit reporting agencies. This new FICO score promises to do a better job of predicting future credit risk. You have millions of credit card holders who have seen their credit limits reduced, accounts closed, interest rates increased and/or their minimum payment requirements increased.

In addition you have billions in lost home equity, which means no more safety net for those consumers who have excessive credit card debt. You have debt settlement companies aggressively marketing their services like vultures circling a dying carcass without fully disclosing the downside of possible lawsuits and severe credit damage to their customers who use their services. And finally, you have media and the undereducated that are spreading fallacies about the credit world, and are causing panic. All in all, it’s a tough environment to survive and thrive in. Here are what I believe are the most important things that we consumers should be focused on over the next 24 months;

Continue to Improve Your Credit Scores

Continue to make your payments on time regardless of what you read or hear –
Debt settlement companies would have you believe that the best way to serve you is to suggest that you stop making your payment to your credit card issuers. The theory is that a lender who isn’t getting paid might be more flexible for a consumer who isn’t making their payments. I guess it’s the “I’m lucky to get something” hypothesis. The problem is that many credit card issuers will gladly work with their debtors and work out settlements or payment plans directly, without the intervention of debt settlement companies.
This helps them to collect more than what they’d get from a 3rd party settlement company and it will also mean that you are paying them more of what you owe them, which is a good thing. It will also protect you from litigation should the credit card issuer grow tired of you avoiding them at a debt settlement company’s request.

Pay down your debt to no more than 10% -
The new FICO score, FICO 08, is more sensitive about your revolving utilization percentage, which is the relationship between your balances and limits on credit card accounts. This means those of you who are highly utilized will suffer more as lenders continue to convert to this newer credit score, and many have already made the switch.

If you can’t get your balances to less than 10% of your credit limits then get them as low as possible and your score will benefit. Why is this important? It’s simple. Lenders are being more critical about credit scores than in the past 36 months. A good score, say 700, two years ago would have gotten you approved at their best deal a lender had going. Today it will get you approved but not with the best terms. Shoot for 750 to ensure you of the best terms. And, be aware that mortgage lenders not only want 750 but they also want a larger down payment in many cases.

More Cards Are Better, Shoot for Five –

This is counter intuitive but we’re living in a bizarre credit world. Those of you who have less than five credit cards are in a bad position. A bad position because of a couple of reasons, which are;

You have fewer options if one of your credit card issuers changes your terms – Tens of millions of consumer have seen the terms of their credit card accounts changed adversely over the past 18 to 24 months. This means lower credit limits, higher rates, higher minimum payments and closed accounts in some cases. If you have only one or two cards then you leave yourself without options should one or more of your credit card issuers start misbehaving. And for those of you who think you’re immune from this because you have good FICO scores, think again. FICO released a study several months ago that showed that, at a 2 to 1 ratio, cardholders who saw their credit limits decreased had median FICO score of 770. Nobody is immune.

With more cards you give yourself the option to move your business elsewhere and not lose the access to the capital that a credit card provides.

Think About Litigation If You Know You’re Right –
Fair Debt Collection Practice Act (FDCPA) lawsuits are going to eclipse 8,500 this year, which will easily be a record. According to John Ulzheimer, founder of www.creditexpertwitness.com, and a professional expert witness, “many consumer are finding that they can’t get legitimate errors corrected on their credit reports. The choice they have is to live with it for seven years or take someone to court and force them to listen.”

Many collection agencies are finding it hard to avoid lawsuits despite a huge growth in outstanding delinquent receivables. Some are calling for a revamping if the FDCPA but any politician that chooses to reduce consumer protections at this time in history is asking to be voted out of office.

Let’s talk about investments?

So where is the best place to invest your money?  Lets take a look at what most America’s do?

1. 85% of Amercians deposit there money where? Correct: the banks! (checking, savings, CD’s)  Why? because it’s safe..Ok what’s the downside low ROI (rate of return)…What do the banks do? They take your money, pay you anywhere between 0%-4% if you are lucky and they in return invest that money and they make anywhere between 12%-18%…BTW these accounts you PAY TAXES TODAY!

2. 10% of Amercians put their money in: Right! Mutual funds, 401k’s, IRA’s! The upside to these types of accounts is the high ROI and the downside is what? Risk, you can lose all of your money, ask your neighbor who lost all of their retirement in 2007/2008….BTW these investments you PAY TAXES LATER…FYI if your money is in IRA’s beware….Don’t believe me watch this expert explain it:

3. 5% of American’s (the wealthy/educated have been putting their money here over the last two decades)…Life Insurance…IUL(Index Universal Life) Let’s take a look at why that is:

• It’s GUARANTEED that’s right…If the market loses 20% you are GUARANTEED 1%…
• High ROI up to 13.25%
• Tax Advantage=Never PAY TAXES
• Liquid…You need not have to wait until 59.5 to access your money…
• Privacy…You get sued, file BK…Your investment is private the only thing seen is the death benefit.
• There a little tax code IRS 7702 click here for info
• This investment you PAY TAXES NEVER!

Sound to good to be true, see what the experts say:

I hope that I was able to bring you some valuable information, if you have any questions please email me at john@johnfranco.com…Lastly buy a book called Tax Free Retirement by Patrick Kelly click here to purchase.

New Rules For Ditching Student Loans

Hoping some of your student loan debt will be wiped away because you’ve chosen a selfless career? That may depend on what state you’re from, what type of loan you have, and, of course, what profession you’re in. Click here for full article