We look forward to the Van Mueller newsletter every month. It's chock-full of sound bites, sales tips, and eye-opening statistics. Here are our favorite parts of the July 2021 edition. We're sharing the full introduction, and 2 of the 7 monthly sales ideas. If you like what you read, we encourage you to click here and become a subscriber.
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July 2021 – 7 Ideas and Views Newsletter by Van Mueller
It is February 15th. It’s 5:00 in the morning. We are on a farm in northern Minnesota, in the middle of nowhere. It is 25 degrees below zero. The ground is frozen solid. There is a light on in the farmhouse. The farmer is in the kitchen making a pot of coffee because this is the time he wakes up every day to work on his farm. He takes a sip of his steaming cup of coffee and he hears a knock on his front door. Puzzled, he hurries to the front door to see who it is. He opens the door and standing before him is a 6’2” man wearing a hat, an overcoat and a suit and tie. He has on gloves and boots to fend off the bitterly cold morning. The farmer asks who it is and the man replies that he is with the Internal Revenue Service and he is there to ask the farmer a vitally important question. The man from the Internal Revenue Service asks if he can come in out of the cold. The nervous, yet courteous farmer says of course, and invites the man from the Internal Revenue Service into his kitchen and offers him a cup of his steaming coffee. The man accepts, takes a sip, and then reaches into his briefcase and pulls out a folder which he opens and then lays his pen on the open folder. The farmer, who still can’t believe that someone was knocking at his door at 5:00 in the morning in the middle of February, on a bitterly cold day and is now sitting at his kitchen table finally gets the courage to ask, “Why are you visiting me this morning?”
The man from the Internal Revenue Service leans forward and says, “I am here to ask you one question and one question only, and how you answer that question is how we, the Internal Revenue Service, will tax you for the rest of your life. Your answer is important, and we will only ask you one time. Are your ready to answer the question?” The farmer answers hesitantly, “Yes I am. What is the question?”
“Here it is. From this day forward for the rest of your life, would you prefer to pay your taxes on your seeds, or would you prefer to pay your taxes on the crops that you grow from those seeds? Please remember how you answer is how we will tax you for the rest of your life.”
The farmer didn’t have to think even for a second. He said, “That’s easy. If its allowed, I would much rather pay taxes on my seeds than the crops that I harvest from those seeds.”
The man from the Internal Revenue Service made a notation in his notebook, closed it and replaced it in his briefcase. He took a last sip of his coffee, thanked the farmer, stood up and put his hat, gloves and overcoat on and headed for the front door. When the man from the Internal Revenue Service got to the front door, he put his hand on the doorknob, paused, and turned to the farmer and asked if he could ask one last question. The famer replied, “I would be happy to answer one last question.” The man asked the farmer this question. “Why Aren’t You Doing With Your Money What You Are Asking Us To Do With Your Seeds?”
Isn’t that a question that all of our customers need to answer? Isn’t the answer to that question more important now than ever before? Do you think your customers will remember the concept that story teaches? Very powerful: Easy to understand and fun to share with people. Wow!
Do you think your customers will remember the concept that story teaches? Very powerful: Easy to understand and fun to share with people. Wow!
Now I am going to share another story that I shared in a recent newsletter. I believe the information and the concept are so powerful that it bears repeating and must be used over and over again with prospects and clients. I actually sold a woman in a grocery store with this information and have used this process over and over, even with existing clients.
The approach is the same whether it is with a stranger, a prospect or an existing customer. I share that I am an insurance agent and that I am very concerned that I am not providing important information that my customers must have and it would really help me to do a better job if I could get your opinion on a few questions. It will only take a minute or two and I believe you will be interested in your own opinions about what I want to ask you. Would it be okay?
Essentially, you are asking them to help you. Take your time setting this up before you ask the questions. You are trying to get them to help you. Sometimes, I say, come on, have a little fun with me. You could help a lot of people with your opinions.
Take your time setting this up before you ask the questions. You are trying to get them to help you.
I then explain that I am going to ask them two questions and then we’ll be done. I don’t want to impose on them, not even existing customers. I want them to know this will take a very short amount of time. The brevity is what allows you to get away with this. The customer is thinking that this will only take a minute or two: Of course, I can share my opinion, they say.
The questions must be asked, exactly. They are helping your prospect or client make an important discovery on their own.
Ask the first question. “Do you think it would be more beneficial for you and your business to take a tax deduction now on a small amount of money when taxes are historically as low as they will ever be and then grow that money into a large amount of money that the government can tax at any level they choose? Or, would it be more beneficial to pay your taxes now when they are historically as low as they will ever be and build a large amount of money that the government can never, ever tax again? So, which would be the most beneficial for your family and for your business? Question one or question two? The customer or prospect always looks at you funny with an expression that says, are you kidding that’s easy. They always say it’s the second one. You then ask, doesn’t that raise another question then? They reply, what is that? Why are you doing the first one if the second one is more beneficial?
Here's the punchline. Here’s what they say almost every time. They reply they didn’t realize they were doing the first one. That’s the important discovery, not only for our customer but for us as well. Americans, kind of understand tax deductibility. They really have no understanding of the concept of tax deferral. Millions of Americans will suffer the consequences of not understanding tax deferral. 401(k)s, IRA’s, 403B’s and 457 plans will be demolished when the Internal Revenue Service gets its hands on the tax deferred values of these accounts.
Let’s discuss some important considerations to use this information at its maximum value. When you ask the questions, use words such as beneficial or appropriate. Never, use the word smarter ever again. Smarter is an attack on their intelligence. We never want to denigrate. We always want to elevate our prospects and clients.
When you ask the questions, use words such as beneficial or appropriate. Never, use the word smarter ever again. Smarter is an attack on their intelligence. We never want to denigrate.
Next, many so-called experts will argue effectively, by the way, that when the customer withdraws the income from these deferred retirement accounts that the customer will be in the same or even lower income tax bracket in retirement. Please acknowledge that is true and then ask, are they sharing the whole story of this with you. Ask the customer what they want to happen to the money when both the husband and wife die. Do you want the government to get your money or do you want your children to get the money? There are several questions you could ask in this situation. Here are a couple I use frequently. Is there someone at the Internal Revenue Service that you are so madly in love with that you have decided to make them the primary beneficiary of your IRA, 401(k), 403B or 457 plan? Would you like an example? After you and your spouse die that money is taxed at your children’s rate rather than your income tax rate which is probably much lower. If you have $400,000 in an IRA and it is taxed at your children’s rate it will probably cost 40 percent of the $400,000 or $160,000. That leaves $240,000 divided by two children is $120,000 each, or three children is $80,000 each. The Internal Revenue Service will receive more of that account than any of your children. Are you okay with that? What if you could change the order so your children were the primary beneficiaries? Would you want to know how to do that?
Another question I ask all the grandmas and grandpas is this: If I could show you a way to stay in complete control of your money until you took your last breath, but instead of giving that money to the government, Internal Revenue Service, nursing home or hospital, you could keep that money in your family for generations to come, at the very least, wouldn’t you want to know how to do that? Even if you didn’t do anything wouldn’t that be valuable information? Almost 100 percent of the time they want to make an appointment.
One final consideration. With 90 percent of Americans making less than $100,000 per year, that means that most are in the 12 percent tax bracket. That means that tax deductibility is not as valuable as people believe and for people making less than $400,000 even the current administrations tax increase will change little for people in that $100,000 per year or below income tax bracket. If you are under age 50 and contribute the $6,000 maximum to an IRA, you only reduce your taxes by $720. If you are over age 50 and you contribute the maximum $7,000 you only reduce your taxes by $840. If you are under age 50 and contribute the maximum to your 401(k) of $19,500 you only reduce your income taxes by $2,340. If you are over 50 and contribute the maximum $26,000 to your 401(k) you still only reduce your income tax liability by $3,120. Tax deductibility is certainly not as valuable in this low-income tax rate environment. The government is using American’s misunderstanding of income tax deductibility to build an enormous treasure trove of income tax liability that they can access in the future. That is how our government will take advantage of Americans not understanding tax deferral. It is actually possible for the government to amass an enormous army of income tax collectors who won’t even recognize what they are doing until it’s too late.
We must intervene on behalf of our prospects and clients. These two methods for helping Americans understand tax deferral will be vital to the future financial health of the American people.
These two methods for helping Americans understand tax deferral will be vital to the future financial health of the American people.
I would like to touch on a couple of Additional thoughts before I start this month’s seven sales ideas.
First, and I cannot stress this enough. We are approaching the end of this up cycle in the markets. I absolutely do not know when this will happen. I do know it is close. More and more people are predicting Armageddon for the markets and they are predicting that it will happen sooner rather than later. I want to be clear. I believe this will be an everything crash. Stocks, bonds, real estate, gold, silver, bitcoin, commodities, EVERYTHING. At the very least, begin to make prospects and clients wary of positive returns for anything in the short term. Ask them, don’t tell them how they would like to proceed. It is a great question because it really identifies all the customers who cannot and will not stomach any losses. You have strategies for that. It also identifies prospects and clients who are comfortable with some volatility. That is valuable information as well. And, no kidding, we have strategies that will work for them as well. The questions help us to identify what strategies to present. Don’t kid yourself. The piper must be paid. I believe the next economic catastrophe will be dramatic and it will be global. Make sure your prospects and clients are aware.
The last thing I want to talk about are the mentors we should all have to help us dramatically increase our skills. I will first list some current mentors that we must all pay attention to and why they are valuable as mentors. Then I would like to share some mentors from the past that would provide insight into the way life insurance and annuities should be sold. I think we should know these names and I believe we should never forget the lessons they teach.
Here are the current people I believe you should consider as mentors, they are listed in no particular order because they all provide magnificent insight and language to what we do for a living.
1. Ed Slott: Believes the number one best benefit in the income tax code is the tax exclusion for cash value life insurance. Also, believes taxes WILL BE higher in the future.
2. Tom Hegna: Taught all of us about mortality or longevity credits. Believes building guaranteed income rather than building assets is the secret to a happy and successful retirement. Shared with us that words and stories are the secret for us to be successful in our industry.
3. David McKnight: Taught America about the Power of Zero in retirement and that reducing or eliminating income tax liability is vital to a successful retirement. Created the movie The Power of Zero, The Tax Train Is Coming.
4. Donald Blanton: Created the Circle of Wealth presentation. Has developed wonderful questions and presentations for cash value life insurance. Has an annual review for members every year in Florida.
5. Pamela Yellen: Created the Bank on Yourself methodology for building tax free retirements for Americans using cash value life insurance.
6. Robert Castiglione: Created the Lifetime Economic Acceleration Process LEAP teaching how to use cash value life insurance as a tax-free personal bank.
7. R. Nelson Nash: Created the Infinite Banking Concept. Financial wealth building using cash value life insurance to facilitate that wealth building.
8. Van E. Mueller: You didn’t think I would put me in this list. However, what I bring to this list is the professional use of questions and dramatic shortening of the sales cycle. We can do many of the above systems in five questions.
Please understand, there are many other mentors you should be paying attention to such as James Silbernagel and Curtis Cloke just to name a couple. This is just a list to help you begin your search of modern mentors.
Please understand, there are many other mentors you should be paying attention to such as James Silbernagel and Curtis Cloke just to name a couple. This is just a list to help you begin your search of modern mentors.
Now I am going to share a list of the amazing mentors from the past whose words and concepts we all steal and claim as our own. I would recommend that you Google the names individually and begin to learn about the amazing gifts they brought to our industry. Here is the list!
Ben Feldman
John Savage
Tom Wolff
Sid Friedman
Benjamin “Woody” Woodson
Charlie “Tremendous” Jones
Don Connelly
The Kinder Brothers, Jack & Garry
Mehdi Fakarzadeh
Norm LeVine
Oscar Newton
Roger Zener
Howard Wight
These are just a few. There are so many.
Idea #2: How to Prosper Using Annuities
Kiplinger shared in great detail how using annuities can yield wonderful results in a variety of ways. They showed how to use different maturities of annuities for both different income requirements but to also increase liquidity and opportunity to increase rates in the future. Many use annuities instead of bonds because bonds lose principal and annuities don’t. Annuities easily transfer wealth by named beneficiary. Annuities can be used to delay taking Social Security. Modern annuities can provide some additional coverage for long term care. Skilled insurance and financial professionals know how to use annuities to qualify their clients for Medicaid without spending down. Many agents use annuities to give money to charity. Finally, with careful planning annuities can be used to reduce required minimum distributions (RMDs). This is a great article.
Title: 8 Surprising Ways to Prosper From Annuities
https://www.kiplinger.com/ (Kiplinger, June 3, 2021)
https://www.kiplinger.com/retirement/annuities/602876/8-surprising-ways-to-prosper-from-annuities
Idea #4: Hidden 401K Plan Fees Destroy Retirement Assets
I have been talking about this for years. There are now many, many articles that wonder whether a 401(k) is the best methodology for saving for retirement in the investment and income tax environment we currently find ourselves in, as Americans. And then, pouring salt in the wound, we find there are still excessive and even hidden fees that over the course of a lifetime, can cause our customers to lose hundreds of thousands of dollars in retirement benefits. Because many of the fees are hidden our clients don’t even know this is happening.
We have many more cost-efficient ways to build our customers’ quality and even tax-free retirements. Shouldn’t they be made aware of the hidden costs in a 401(k)?
Title: Hidden 401(k) Plan Fees Are Eroding Retirement Savings, Study Says
https://www.fa-mag.com/ (Financial Advisor, May 5, 2021)
https://www.fa-mag.com/news/hidden-401-k--plan-fees-a-drain-on-retirement-savings-61879.html
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