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MISSED FORTUNE
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General Questions

Questions about Retirement and Investment Money

Common Questions about Home Equity

Common Questions about Insurance





Financially, what can the Missed Fortune strategies do for me?

  • Increase financial liquidity – the ability to access your money when you want it
  • Increase the safety of your retirement or investment money by
  • making it guaranteed or insured
  • Establish a private retirement planning strategy that can be superior to qualified plans
  • Earn a rate of return by employing idle assets that are not
  • optimized such as home equity
  • Realize tax savings through higher tax deductions
  • Eliminate non-preferred debt
  • Create opportunities for other investments
  • Create greater property sales options
  • Create an emergency fund
What type of cash-value life insurance on the market should I use?

Generally, there are five types of cash-value life insurance on the market: whole life, variable life, and three kinds of universal life –
fixed, variable, and equity-indexed. Universal life was created with flexibility in mind – both premium payments and insurance death
benefits may be varied. Home equity should not be invested in variable contracts because they are vulnerable to market downturns and
loss of principal. Equity-indexed universal life was designed to help cash values with insurance contracts have a guaranteed floor on the
minimum rate credited on their ash values and yet have the potential to participate indirectly in the market.
When do I have to pay back my policy loan?

Loans on insurance contracts can be open until death, at which time the loan balance is deducted from the death benefit automatically.
These types of preferred loans were created specifically for retirement income.
How do I access my money that is in an insurance contract?

The advantage of these kinds of insurance contracts is that when you withdraw your money, it is treated with FIFO taxation (first in ,
first out), so your withdrawals are tax-free up to the basis. The dumb way to access money from your contract would be to continue
“withdrawing” your money after you have recovered your basis (the amount you have put in), because it would trigger unnecessary tax.
The smart way to access money is to withdraw your money up to the basis (the amount you have put in), then change the “withdrawal” to
a “loan” – simply a change in nomenclature. Loan proceeds are not deemed earned, passive, or portfolio income. Additionally, if you were
to pass away, the death benefit can provide an incredibly high return based on premium dollars. We call this the SAD way to access your
money.
What are some of the benefit of using the Missed Fortune concepts for my estate?

When people die, they usually leave behind some assets that were earmarked to sustain them had they lived longer. Those assets may
include bank accounts, CDs, money markets, stocks, bonds, real estate, or cash values of life insurance. Life insurance is the only asset that
instantaneously blossoms from the cash values previously used for living benefits into tax-advantaged death benefits.
Do all financial professionals understand how to properly structure a maximum funded life insurance contract?

No! Please understand that not all financial professionals understand how to structure these insurance contracts correctly. Ask your
financial professional if they have been TEAM trained and are a current member of Missed Fortune Associates.
Which insurance companies do you use with these strategies?

There are a variety of companies whose products might be right for your situation. Part of the process in creating your own Missed
Fortune insurance contract is determining which product and company meet you at the level of your need.
What else should I know about a maximum funded insurance contract?

This kind of policy is not free of costs. The costs associated with a universal life policy most closely resemble those for term insurance,
but with a significant difference: If premiums are paid that are far greater than the actual pure term insurance premiums, the policy
accumulates an excess cash value. Over time, the interest and compounding of that cash can more than compensate for the continuing
costs of owning that policy. These costs, which allow the investment to qualify under the definition of life insurance and, therefore,
remain tax-free, are an absolutely critical component for achieving the most attractive results.
What is a maximum funded cash-value insurance contract?

First, we determine how much the client wants to contribute (how much he is going to reposition over a given time period) into the
policy. Then based on government guidelines (TEFRA and DEFRA) we can determine what the minimum death benefit should be. Most
insurance contracts are sold for death benefit not the living benefit. A maximum funded contract however, has the lowest possible death
benefit so that expenses (that pay for the insurance) are minimized and cash value accumulation is maximized.
Does it matter how a cash-value insurance contract is structured?

Absolutely! Properly structured life insurance contracts can be used for tax-favored capital accumulation and tax-advantaged retirement
income as living benefits, in addition to providing income-tax free death benefits.
What additional benefits does cash-value insurance offer?

Cash-value insurance also provides equity buildup inside the policy, which provides a liquid fund that can be used at will – in the event of
an emergency, for investment opportunities, or to supplement retirement income.
Why do the Missed Fortune strategies call for cash-value life insurance?

Modern cash-value life insurance can be designed to accumulate and store cash safely and provide tax-favored living benefits, as well as
income-tax-free death benefits, while maintaining liquidity and safety and achieving an attractive rate of return.
What is the difference between term and cash-value insurance?

Term insurance premiums generally increase with age. Term insurance may be a good way to meet specific, short-term needs, but it has
no cash accumulation value or living benefits. Coverage will lapse or expire the moment premiums are no longer paid into the policy.

Cash-value life insurance, on the other hand, was designed to accommodate an overpayment of insurance premiums during the early
years, thus allowing an underpayment of premiums in later years. The excess premium paid over and above the mortality and
administration expenses creates equity in the policy. The excess money accumulates with interest, then begins to accrue the cash values
that can be used for living benefits.
How stable are insurance companies and what is their history?

The insurance industry in America is a trillion-dollar industry and is probably one of the most stable factors in the American economy.
During the Great Depression of the 1930s, for instance, a large percentage of banks failed and never opened their doors again. Even some
real estate dropped as much as 80 percent in value. Many stocks took a long time to recover, if they did at all. However, some of the most
stable and safe funds during that time were in life insurance contracts.
What a typical rate of return of an insurance company portfolio?

Annual reports and financial statements of many insurance companies reveal they are structured similarly to conservative,
income-oriented mutual funds with some growth potential. Most insurance company portfolios earn from 7 to 9 percent.
Why do you recommend a maximum funded insurance contract for the Missed Fortune strategies?

Properly structured insurance contract (maximum funded) can be the best retirement vehicles for providing liquidity, safety, and
tax-favored rates of return. Because of the tax-free accessibility of cash values that can be used for retirement income, these types of
insurance  contacts can far outperform alternatives like IRAs, 401(k)s, annuities, and mutual funds.
Why should I use insurance for my retirement or investment money?

Many investors in America don’t realize that many major life insurance companies are not much different from a conservative mutual
fund type of asset management company. Insurance companies are experts in managing risks. As they bank and hold money set aside for
future needs, they are responsible for investing that money wisely to achieve a safe rate of return.
How does arbitrage work with these financial concepts?

A homeowner can safely make thousands of dollars’ profit by borrowing money at one rate, such as 6 percent, and investing the loan
proceeds at the same 6 percent, especially when two conditions exist: the borrowing interest rate is deductible and the investing interest
rate compounds under tax-favorable circumstances.
How should I manage my home equity?

Only borrow equity to conserve and not to consume. Always position yourself to act instead of react to circumstances over which you
may have no control. Look at implementing arbitrage. Undisciplined borrowers who use home equity to consolidate may enter a cycle of
debt proliferation, which can lead to bankruptcy.
Why is home equity not a prudent investment?

Home equity is not liquid or safe and has not rate of return. When times get tough those who lack liquidity have no choice but to liquidate
their assets (home) at low prices and survive the best they can. If you were in a neighborhood that was devastated by an earthquake,
flood, tornado, or hurricane and your home was destroyed, you would rather have your equity in a safe and liquid environment.
How does achieving an average return of 7 to 9 percent, nontaxable, over a ten or twenty year period compare with earning a 10 to 12 percent return and having to pay tax on the gain?

We advise having the more stable, less volatile investment, watching it grow tax-free, and reaping the rewards free of tax on the back end,
during the harvest period of life. These characteristics would help achieve your financial goals with a higher net spendable income and
greater net accumulation value than other more volatile strategies. For this reason, wise investors are turning more to insurance
companies for tax-favored, long-term savings and capital accumulation.
How do I choose the right investments with my cash?

When choosing a place to save, invest, or store cash for conservative, stable returns, we want to ask ourselves the same four questions we
ask with regard to our home equity:

1.  Is it liquid?

2.  Is it safe (guaranteed or insured)?

3.  What rate of return am I likely to get?

4.  Are there any tax benefits associated with this investment?
What is arbitrage?

The prevalent myth-conception is that there are only two kinds of people in the world: those who earn interest and those who pay
interest.  There is really a third kind of person: those who do exactly what banks and credit unions do – borrow money at lower interest
rate and invest it to earn a higher interest rate. Arbitrage is the lifeblood strategy of nearly all financial institutions and most self-made
millionaires have mastered it.
Why is home equity not a prudent investment?

Home equity is not liquid or safe and has not rate of return. When times get tough those who lack liquidity have no choice but to liquidate
their assets (home) at low prices and survive the best they can. If you were in a neighborhood that was devastated by an earthquake,
flood, tornado, or hurricane and your home was destroyed, you would rather have your equity in a safe and liquid environment.
What makes a prudent investment?

There are three elements a prudent investor should look for: liquidity, safety, and rate of return. If an investment also possesses a tax
advantage, it is icing on the cake. When considering a particular investment, you would probably see the answers to at least three
questions:

1.  Can I get my money back when I want it back – is my money going to remain liquid?

2.  How safe is my money – is it guaranteed or insured?

3.  What rate of return can I expect to receive?
What is a strategic roll-out and what are the benefits?

Many people come to realize that they are getting trapped in an IRA or 401(k) that someday will be taxed. Continuing to postpone the tax
that will be due may dramatically increase the amount of tax you will ultimately pay. We suggest developing a plan to strategically
convert your qualified funds to non-qualified accounts at the most opportune time taxwise. This strategic conversion over a five to seven
year period may result in up to 60 percent less tax than stringing the tax liability out over a lifetime.
Why do the Missed Fortune strategies state that qualified plans, such as IRAs and 401(k)s, do not provide the most attractive retirement benefits?

Most people are motivated to invest in qualified plans for tax-favored treatment during the contribution and accumulation phases of
retirement planning. When traditional qualified plans are liquidated in retirement, they produce the taxable results the government
predicted and intended. It doesn’t make sense to postpone tax for some perceived advantage in the future. Non-qualified retirement
vehicles can provide greater net spendable retirement income.
Will deferred taxes save me retirement dollars?

Not necessarily. A common myth-conception among retirement-minded Americans is that they will be in a lower tax bracket when they
retire than when they were employed. The reality is that most Americans who have saved for retirement will find themselves in a tax
bracket at least as high as-if not higher than-they were in during their earning years. That’s because retirees usually have fewer deductions
and exemptions.
What does Douglas R. Andrew mean by “All the dogs barking up the wrong tree
doesn’t make it the right one”?

Conventional advice on your journey toward financial independence may not always be the wisest choice. Setting aside money in qualified
retirement accounts, such as IRAs and 401(k)s, while paying down our home mortgage is like going down the highway with one foot on the
brake pedal and the other on the gas pedal.

In our opinion, there is a better alternative for retirement income and financial independence. With proper planning using the Missed
Fortune philosophy, a homeowner can utilize home equity retirement planning that may provide tax advantages during the contribution
and accumulation years, and more important, you may enjoy tax-free income during your retirement years and transfer any remaining
funds to your heirs tax-free.
Why do some financial professional speak against the Missed Fortune strategies?

Unfortunately, some financial professionals don’t know what they don’t know. Many haven’t taken the time to understand the concepts
thoroughly. Some don’t want to invest learning something new and will almost always steer clients toward what is comfortable or what
they know. The key messages of Missed Fortune are found in liquidity, safety of principle, and then rate of return. If you compare financial
strategies that combine home equity and retirement through these filters, the numbers cannot be refuted.
If the Missed Fortune strategies work, why doesn’t my financial planner know about them?

Missed Fortune strategies use a new and unique approach to the accumulation of wealth, estate planning, debt management, and
retirement planning. Every month, financial professionals from around the country attend our TEAM training to learn how they can be
involved in this new movement. Once these professionals understand and test the Missed Fortune concepts, they always agree the
numbers add up.
Why haven’t I heard of the Missed Fortune concepts before now?

We’re sure you are familiar with the phrase “You can’t see the forest for the trees.” We believe there are certain financial opportunities
that have always been in front of us, but whose true potential we couldn’t see. The Missed Fortune philosophy will lift, you, like a
helicopter, above the trees for a better perspective. Your vision will open up, and you will begin to take in the bigger picture – a point of
view that can change your life.
I like the concepts, what do I do now?

Just visit our getting started page.
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