Investing in 2009 - written by Chad Levin

Dear Clients and Friends:
After my son's soccer game on Friday night, in which my son scored the winning goal, Rhonda approached me. Rhonda is NOT a client, but she knows What I do for a living. She exclaimed, "My Freaking husband lost 50, not 50%, and why you blaming him?" Well she said, his Advisor is his best friend and the two of them should have known and moved all our money into cash. Now we are down, what should we do? I tried to defend her husband and advisor, but was not getting anywhere. Rhonda was too emotional. Then she said, "I could just KILL MY husband." So I said, well I have an application in my car for some Life Insurance, if you are going to Kill him, at least get some more Life Insurance. Of course, I was kidding. Then the idea hit me. So Soccer Mom Rhonda, I give you credit for this idea.

Let's use some Math and make a few assumptions. Let's say that before this horrible few months, Rhonda and her husband's portfolio was $600,000 and now it is worth $350,000. If Rhonda's husband does die too soon, then Rhonda will only get 350K, instead of 600K. Let's assume that Rhonda's husband is concerned about this, well not so much for Rhonda, but for their 15 year old son and 13 year old daughter. The husband is my age 51, and in good health. The husband is investing into retirement accounts, $10,000 per year. His projections of early retirement now obviously need to be recalculated, but anyway here are the basic facts. They are down about 250K, they have 2 teenage children. The husband is concerned that if he does die, Rhonda and family will get less money from their portfolio, and he still can invest 10K into his future retirement plan. READY for the JG CREATIVE IDEA ????

The husband only invests $5,000 into his retirement plan, and buys a $250,000 Universal Life that builds cash value. He invests $5,000 per year into this Investment/Insurance product. If he dies too soon, then Rhonda will get the 250K from the Life Insurance and the 350 K from their portfolio, wow back to the original 600K. If he lives, the 350 K in the portfolio will Hopefully grow from the $5,000 of new money he is investing, and the Universal Life's cash value will grow. At age 65, the cash value growth and the Portfolio growth will be very close as if he invested the entire 10K in the original portfolio. So everyone wins, and everyone is happy, just a SMART way to reallocate your future Retirement contributions. There are some tax issues with this strategy as well as a few others, which could make this idea even better or not as good. Each person's numbers will depend on age, health, life insurance needed, and future investment allocations and contributions.

I welcome the opportunity to explore this idea with you to see if we should reallocate your Investment Contributions and/or to review your portfolio to see if any changes at this point makes any sense.

Make it a good week.

Jerry Gross, MBA, CLU, CHFC
Life Insurance Specialist at www.EasyToInsureME.com
Phone 215-944-3079
Fax 215-364-3990
Email easytoinsureme@aol.com

DO IT NOW...RELAX LATER