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Paperback Missed Fortune: Dispel the Money Myth-Conceptions--Isn't It Time You Became Wealthy? Book

ISBN: 0446693502

ISBN13: 9780446693509

Missed Fortune: Dispel the Money Myth-Conceptions--Isn't It Time You Became Wealthy?

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Book Overview

Most of us dream of becoming wealthy. While some take steps to achieve it, few realize the goal. Why? According to financial planner Douglas R. Andrew, flawed financial strategis - or what he calls... This description may be from another edition of this product.

Customer Reviews

4 ratings

Missed Fortune - well worth reading

Called the 'War and Peace' version by financial planners, I found this book to be surprisingly readable, and its conclusions (while obviously controversial) to be at least thought-provoking. There are four large concepts at the beginning: increasing liquidity, safety, rate of return, and tax deductibility, in considering the 'big picture' of financial planning. It is an eye-opener to read through his analysis of how quickly taxes will eat up any tax-deferred gain in a 401(k) or IRA, as well as how few options there are for saving both tax-deferred with tax-free withdrawals. The Roth IRA is great but so limited, and thus when you get to the main section of the book (investing in equity indexed universal life insurance contracts) the author delves into great detail about how they work and how they can benefit you. Many articles in newspapers do not look at EIULs, they are comparing the book's approach to other universal life products (such as a fixed-interest product - which a reviewer below apparently has, or a variable universal life product, which isn't the same, or a whole-life product). I also found the 7.5% return to be a bit high, but after looking at the EIUL more closely (and reading up on the S & P500 returns historically) the 7.5% number used is a conservative one. Douglas Andrew gets into the technical detail about how a properly setup EIUL can yield a 'floor' of 1% and a 'cap' of 15 or 17%; i.e. when the S & P goes down -5%, you still get a 1% return, when it goes up 5% you get 5%, when it goes up 20% you are capped at 17%. Although I found out that these EIUL's have been around only the last five years or so, back-testing this approach for 50 years yields some 9.4%, and it makes sense as you are getting the upside of the S & P investment without the downside risk, and thus it is a bit lower than the historical 50-year S & P return. This reviewer thinks that the 'hidden costs' of a properly constructed EIUL, about 1% (average over a 20-year span) is very reasonable, to pay for both administration as well as the insurance component, but it is the tax implications (to grow tax-deferred and withdrawn tax-free) that seems too good to be true. I haven't started a EIUL policy yet, but am seriously considering it, and everything I've been able to find has not been able to be refuted as many confuse equity indexed universal life that has been properly constructed and implemented (following the tax rules/laws) with other vehicles that are similar but do not offer the kinds of growth advantage nor cost advantage that this has. While it may seem extreme to no longer fund a 401(k) to its maximum limit and purchase a universal life insurance contract instead, from the tax perspective there seems to be a compelling case here. At least I have been convinced (after paying a mortgage off early by the age of 39 in my case) that that money could have been put to better use elsewhere.

A lot of solid reviews here, what's one more

This book shows how the wealthy made money in the past. It is simply abritrage for the common man. You borrow for less than what you can earn on your money. Donald Trump said during his troubles in Atlantic City before coming roaring back,that he'd "rather have a million dollars in his pocket and be in debt a million dollars, than have zero dollars with no debt". Yes that concept can present a problem to a lot of people, that is why it takes homework on our part to understand it thoroughly before jumping in headfirst. To complicate matters, these policies are complex with TAMRA laws and the like. The participation rates are very important to how your interest is earned. With so many insurance companies now selling these products, each with different twists, it is so important, that A)your advisor knows what he's doing and B) has your best interests at heart and not his. The insurance company that offers the best commssion is probably the worst product, will he put aside his interest for yours. One of the most important things I learned from this book is that Traditional IRA's are bad, just plain bad. Someone putting away $4000 a year over 35 years (assuming 8% Annual ROR)will pay in the first two years of retirement, all the taxes that he saved on, from then on, it'll be gravy for Uncle Sam. Some may question the assumptions, but if the markets doesn't return 8% average over the next wherever you have your money is not going to get the returns either.

I am a financial planner with various titles, certifications, and licenses.

This is a great book. It takes an old rarely heard of concept and brings it to light (with examples). There is one major reason that financial planners bash this book. The financial industry is a war zone. This includes the insurance, mortgage, various real estate, and senior/retirement planning industries. We all want your money. Because many new financial products are transcending traditional platforms in non-traditional ways, this battle has escaladed. Now you have insurance agents attacking mortgage concepts, Mortgage LO's attacking the anything indexed, and CFP's attacking everyone. Handling money is an old business with a lot of Old Dogs in it. It is a lot easier for them to sit on their porch barking at competitors to "get off their lawn" than learn the new and often better products that are out there or get the certifications that allow you to sell those products. The reason you hire one of these people is because you do not have the time to learn the industry yourself. However these people that you hire are usually biased and attach to a larger corporation thus forced to share their views, or are too new to see past the seemingly endless smoke and mirrors. The bad news is unless you have someone you know that has been in a specific industry for a couple years and you know they have your best interest at heart; the world of finance is a treacherous place. Although Id love to turn this into a commercial for my company, I didn't want that to cheapen my advice, which is: 1. Learn what you can to limit your risk. Read a book or articles on the internet, but beware of advice from friends (they always think were they have their money is the best). 2. Pin companies against each other for your business, especially if they have opposing ideas. Usually the truth eventually comes out because both sides have to defend their concept/products. Besides if someone is truly confident in what they are selling, you should be able to ask them anything and they should never have to "sell" you. 3. Like a good accountant, try to find someone you can trust and can talk to at least once a year. This is a well written book, interlaced with personal experiences that push to concept to new levels of understanding. All examples and projections are sound and insightful. But I agree that this book is not for everyone. Derived from personal experience, if you are any of the following do not read this book: * Too stuck on the old idea of the American Dream where you pay off your mortgage ASAP * Already very very wealthy, many concepts will not apply to you (although some still will). * You are a day trader. Although still applicable these concepts are low maintenance and you will become board. * Too young. No one thinks about retirement investments at 30-40. They're invincible. * You are a CFP and can not except change. The only problem this book has is that there are too many uneducated and/or biased people vocalizing decisions about its concepts. I am not tryin

Makes Sense

Being very interested in putting Andrew's strategies to work myself, I have assiduously investigated it. So far, I've not found one single piece of irrefutable evidence that a) what D. Andrew says is false; and b) that his strategies do not work. As with any financial plan, one needs to be very selective in the choosing of the right vehicles to use; just plunking funds in the first product of choice, be it a mutual fund or an EIUL, is not smart regardless of one's strategy. True, Andrew does sell life insurance as part of his financial services, but he also has built his fortune using the same methods he details. Moreover, Andrew has been stringently audited by the IRS (as have many of his clients) with the result being a clean bill of health and the IRS agent who did his audit becoming one of his clients. After reading the recent November 2005 review of from 'Finance Investigator', I decided to check out his references upon which he builds his case to 'blast' the book, e.g. the NASD report http://www.nasd.com/web/groups/rules_regs/documents/rules_regs/nasdw_010368.pdf, the www.nmlcomplaints.com site, the Seattle Times 'article' http://seattletimes.nwsource.com/html/businesstechnology/2002192636_qa_retirementhotline.html, and the Boston Globe article http://www.boston.com/business/personalfinance/articles/2005/09/11/investing_via_life_insurance_not_worth_the_gamble/. The first report from the NASD is not an 'investor alert' as FA suggests, but rather a report about the investigation of the selling of variable universal life insurance, a much different animal than the equity indexed universal life Andrew suggests which has a guaranteed rate of return while VUL goes up and down with the market. In fact the report makes no mention of the concepts and processes proffered by Andrew. The second site mentioned also doesn't talk about Andrew's ideas at all as far as I can find; it almost exclusively uncovers the unethical, fraudulent practices of agents for Northwestern Mutual. The Seattle Times piece is not an article but rather a response to a question by their financial columnist. In it he deftly points towards the potential pitfalls of Andrew's overall strategy of leveraging home equity and one's mortgage to fund retirement accounts using EIUL; it does not 'blast' the book and its ideas as FI suggests. Finally, in the Boston Globe article, the columnist has personal experience that his Universal Life policy has not performed as well as Andrew predicts EIUL would. Fair enough--there is risk with any retirement funding plan and tradeoffs when using one's money. The methods and vehicles used by Andrew are complex. They take serious study and investigation to understand and employ. As such, any 2-3 paragraph review is inadequate to ascertain their true worth. I, for one, have found great truth to his concepts and have yet to find flaws in his strategies.
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