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 November 2022 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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November 2022 – 7 Ideas and Views Newsletter by Van Mueller
Before the start of this month’s newsletter, I just want to remind all of us that the purpose of tools like https://www.truthinaccounting.org and this month’s Wage Statistics are not to dump a large amount of information on our prospects and clients. Used properly, these tools will allow you to develop questions that will be so compelling that the customer will not only give you an appointment, but they will also take action.
Please try to use these tools in this manner. Pretend you are the customer, and you know Van Mueller wants an appointment with you and you absolutely know he wants to sell you something. What question or questions would Van Mueller have to ask you that would be so compelling and so important that you knew the answer that you would give Van Mueller an appointment even though you knew he would try to sell you something? Wouldn’t that be the most beneficial way to use the tools we shared in September and October and in this month’s newsletter?
Pretend you are the customer, and you know Van Mueller wants an appointment with you and you absolutely know he wants to sell you something.
I am very excited to share this month’s newsletter ideas with you. The opportunity for us to help people increases exponentially each day. We continued to get closer and closer to the economic disaster which is long overdue. I believe it is the greatest time in the history of the business to be a life insurance and financial professional. The impact and negative consequences of deflation, inflation, higher taxes of ALL kinds, increased volatility and the concerns most American retirees have of outliving their money are real and will happen in the near future rather than the distant future. The damage will literally destroy many Americans’ and Canadians’ lives. What we do can prevent that from happening. But we must see the people. We must ask them the important questions. We must do a spectacular job of listening to their concerns. The questions help our customers organize their thinking. We ask all the questions to inspire our prospects and clients to take action. We have a very important responsibility to the American people.
In September’s newsletter we showed many of the ways that the U.S. Debt Clock app could be used to increase appointments, build more successful outcomes once we got those appointments and allowed us to develop questions that would inspire our prospects and clients to take action. The https://www.usdebtclock.org an amazing tool that helps us to expand our practice in a variety of ways. Please re-read the September newsletter to develop great questions using the Debt Clock website.
In October, we updated how to use https://www.truthinaccounting.org. This website provides information used to inspire people to give us more appointments and to have better success in those appointments. The website provided information about the financial condition of our country, our states and the 75 largest cities in our country. This information is used to clarify that these entities do not have enough money to meet their current and future responsibilities. The information helps us to show our customers that these entities will have few choices to deal with their future financial requirements.
They will have to raise taxes or lower benefits or borrow more money or a combination of all of these things. You are then able to ask all your customers, especially those with money, what that means. If the various governments need more money, will they get that money from people who don’t have money or people who do have money? Doesn’t that mean that they have you in their sights? What if there was a strategy that would make you invisible to their desire to increase YOUR taxes? When would you want to do that? Before or after they begin to increase your taxes? Won’t they close all the opportunities that are available to you now if you wait too long? Wouldn’t it be amazing if you could control the amount of taxes your family pays or at the very least, change who pays those taxes for you and your family?
Wouldn’t it be amazing if you could control the amount of taxes your family pays or at the very least, change who pays those taxes for you and your family?
The reason I am so excited about this month’s newsletter is that October 12, 2022, the Chief Actuary for Social Security released their annual Wage Statistics report. I use this information with poor people, middle class people and of course wealthy people. The Chief Actuary for Social Security has been providing this information since 1990. 32 years of important information about the incomes of the American people.
Let’s analyze some of the new information. First, there were 168,133,174 Americans who earned $9,773,579,880,275.66. That’s $9 trillion and almost $800 billion. 68.6 percent earn less than $58,129.00 and 50 percent earn less than $37,586.03. 78 percent of Americans earn less than $75,000. I ask every one of my prospects and clients this question: If you are married with two children and you live just about anywhere in the United States, are you rich? In fact, aren’t families with $75,000 per year of income struggling to make ends meet? Worse, with inflation destroying the purchasing power of the money isn’t making ends meet becoming more and more difficult?
Do you understand that 87 percent of Americans make $100,000 or less? What this information clearly shows is that we have destroyed what made America the strongest economic engine on planet Earth. We’ve destroyed the middle class of our country. That means that we will have to transfer more and more from the wealthy people in our country to take care of all the middle class and poor who need help with food, healthcare, housing, utilities, etc. If you are wealthy and you did everything you were asked to do, you lived within your means, you saved in the tax-deferred accounts that were recommended and you didn’t allow yourself to be overcome with debt, it doesn’t matter. Why? Now the government will do everything they can to transfer your wealth and your family’s wealth to the people who were not willing to do what you did successfully. How do you feel about that? Are you just going to sit aside and let them do that or are you going to use the products and strategies that are available to you that allow you to be in control of how much the government and the Internal Revenue Service take?
Now the government will do everything they can to transfer your wealth and your family’s wealth to the people who were not willing to do what you did successfully. How do you feel about that?
Here are several additional ways to use the Wage Statistics information with your customers. The discussion of this information leads to great conversations about taxes in America.
With this first example, I am going to share how we use this tax discussion and I know you won’t believe it, with Americans who pay little or no taxes. I use the Wage Statistics discussion to inspire them to take action. The math easily proves that in order to provide ALL the promised benefits our government will have to tax everyone. No one will be immune. We are entering very dangerous waters. That’s why these tools are so valuable. They provide third party support for the questions you need to ask that our customer MUST get answers to.
I say to my poor, middle class and upper middle-class customers, would you like to have some fun with me? I use that phrase frequently to have discussions about serious issues without creating a lot of tension. So, let’s have a little fun. Let’s get those rich people. Isn’t it true that most people don’t think they pay their fair share. I agree. Let’s get them. Let’s tax everyone who made over $1,000,000 at 100 percent. Wouldn’t that be fair? Let’s see how many people that is and let’s calculate how much revenue we would collect. In 2021 there were just under 250,000 people out of 330 million who made more than $1,000,000. That’s not even one, one hundredth of a percent. If we taxed them all at 100 percent, we would only collect $525 billion in revenue. The annual budget of the U.S. government is approximately $6 trillion.
So, then I say, let’s tax everyone who makes over $100,000 per year at 100 percent. Let’s get all the rich people! Six percent of Americans make over $100,000 per year or 21,899,478 people. If we tax all the people who make over $100,000 at 100 percent, all 22 million of them, we would only collect $4,593 trillion. Please remember, the government’s annual budget is approximately $6 trillion. We get that number from the https://www.usdebtclock.org app. We are still short about $1.5 trillion. Then I ask, will we really tax these people at 100 percent? Probably not. However, isn’t it likely that we will tax these people at 50 percent sooner rather than later? If we do, we only collect $2.3 trillion, Now we are short $3.7 trillion. That means there are over 300 million other Americans that we could tax at $1,000 and we would collect $3 trillion. We’d still be short. What will the government do? Won’t they print more money creating a “stealth tax” called inflation? Does inflation discriminate? Couldn’t inflation be more deadly to the poor, middle class and upper middle class than an increase in income tax? Ask your customer, what if instead of being hurt by the ongoing and devastating inflation, you could position yourself to take advantage of it? Shouldn’t our industry feel a desperation to help these people? Shouldn’t we have a crusade to help these people through what will be a difficult and even devastating destruction of the American peoples’ financial and retirement futures?
Ask your customer, what if instead of being hurt by the ongoing and devastating inflation, you could position yourself to take advantage of it?
Now, let’s use Wage Statistics from the vantage point of the rich. The conversation is very different. What I hope you will recognize is that even thought the math and the analytics should be convincing on their own, they are not. For us to be successful in our quest for our customers to take action, we must appeal to our customers’ emotions. We don’t say it enough. Customers make buying decisions with EMOTION and support those decisions with a FEW facts.
When I speak to the wealthy about Wage Statistics, I go out of my way to ask my customer if they realize they are in a small minority. I congratulate them on all the amazing progress they have accomplished and repeat many times how they have been more successful than 85 or 90 percent of the country or even more. I ask them if they realize how well they have done? You would be surprised how many don’t realize and are even still worried if they have enough to maintain their lifestyle for the rest of their lives. I use questions like “Do you realize that 95 percent of the people in or country would trade places with you tomorrow,” to reiterate just how successful they’ve been building wonderful financial and retirement futures. Then I ask if they realize that they have unintentionally painted a gigantic target on their back for the government and the Internal Revenue Service to aim at. I follow with several more questions. Do you think the government will let those other 80 or 90 percent of Americans go without healthcare, food, housing, utilities, etc.? If you are the only one with any money, won’t they come after you to get the money needed to care for the 80 or 90 percent who were unable or chose not to take the steps you took to build financial success. You worked many hours. Sometimes 60 or even 80 hours in a week. You saved and you saved in the taxed deferred vehicles they recommended you should save in. You lived within your means. You controlled your debt level. You never bought things you didn’t need. You took care of the things you did buy so they would last longer. Remind them of all the things they did so they could be in the position they are in today. Then, ask them if they think it’s fair that the government and the Internal Revenue Service are going to take the money you earned and saved for you and your family to take care of ALL the people in our country who were not willing to do the things that you did and now those people will be rewarded by our system and you will fund these programs? Do you think it’s fair? Do you think they might even need more of your money in the future because of the circumstance we find ourselves in as a country? Then I ask, do you think the government is stupid? They laugh. I ask again, seriously, do you think the government is stupid? Don’t you think they know that we have products and strategies that could prevent that from happening? If they are going to require a lot more revenue in the future to keep the promises they have made, how much longer do you think they will allow us to have those products? So, doesn’t that leave just one questions? Isn’t it true that the only people who will be allowed to have those products and strategies are the people who already had them before they changed the law? You have a choice, don’t you? This is America. You can be controlled, or you can build a strategy that allows you to be in control. Which do you choose? When do you want to get started? Before or after they change the laws?
This is America. You can be controlled, or you can build a strategy that allows you to be in control.
Here are a few more interesting bits of information that can be gleaned from the Wage Statistics Report. There were more people working in 2019 than in 2020 or 2021. 62 percent of Americans make less than $50,000 per year. More and more Americans are living paycheck to paycheck and are one calamity away from serious financial problems.
Sixty-one percent of Americans paid no income tax, and yet more than half of these people contributed to tax deductible IRA’s, 401(k)s, 403(b)s and 457 plans. They received no current tax deduction for their contributions and contributed to an investment vehicle that will have lots of income tax liability in the future. Do we think that makes any sense, knowing what we know is going to happen? We must get in front of as many customers as possible and make sure they become aware that they have options that will allow them to be successful.
They have made it more difficult to access Wage Statistics. If you use this hyper-link, it will take you to the Wage Statistics directly. https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2021.
Also, on October 12, 2022, when the government issued the current inflation rate of 8.2 percent, they were able to solidify two other important inflation numbers for 2023. The first was a clarification that Social Security recipients will receive an 8.7 percent increase in their benefits beginning in January of 2023. This is one of the largest increases in the history of Social Security.
This is one of the largest increases in the history of Social Security.
I want to briefly talk about the other adjustment that the recent inflation numbers solidified. That is the standard deduction and the Federal income tax brackets for 2023. In the December issue of the newsletter, I will go into much more detail about the impact of these changes.
I do want to give you a little head start on a way to use the new standard deduction and increased tax brackets. For years I have been creating some rules that easily explain marginal and effective tax rates. It allows you to open a discussion with anyone, anywhere and at any time. For the year 2022 I was using the following rules to clarify the difference between the marginal income tax rate and the effective tax rate. The rules were the rules of 49-10, 112-12, 207-22 and the rule of 369-24. These rules were for a married couple, over the age of 65, filing a joint tax return.
2022
Rule of 40-10
You can make $49,000 as a married couple and be in the 10 percent marginal tax rate. However, your effective tax rate was only 4.1% because you only pay $2,055 of tax on $49,250 of income.
Rule of 112-12
The married couple over age 65 can make $112,250 and have a marginal tax rate of 12 percent. However, their effective tax rate is 8.6 percent because you only pay tax of $9,615 on $112,250 of income.
Rule of 207-22
The married couple over age 65 can make $207,000 and have a marginal tax rate of 22 percent. However, their effective tax rate is 14.7 percent because you only pay tax of $30,427 on
$207,000 of income.
Rule of 369-24
The married couple over age 65 can make $369,000 and have a marginal tax rate of 24 percent. However, their effective tax rate is 18.8 percent because you only pay tax of $69,295 on
$369,000 of income.
For 2023 Rules (Over age 65)
Rule of 53-10 – Marginal Tax Rate → 10 Percent Effective Tax Rate 4.2%
Rule of 120-12 – Marginal Tax Rate → 12 Percent Effective Tax Rate 8.58%
Rule of 221-22 – Marginal Tax Rate → 22 Percent Effective Tax Rate 14.7%
Rule of 395-24 – Marginal Tax Rate → 24 Percent Effective Tax Rate 18.8%
For 2023 Rules (Under age 65)
Rule of 50-10 – Marginal Tax Rate → 10 Percent Effective Tax Rate 4.25
Rule of 117-10 – Marginal Tax Rate → 12 Percent Effective Tax Rate 8.58%
Rule of 218-22 – Marginal Tax Rate → 22 Percent Effective Tax Rate 14.7%
Rule of 392-24 – Marginal Tax Rate → 24 Percent Effective Tax Rate 18.8%
Here’s a quick guide example of how I use one of these rules to open a discussion with prospects to get an appointment or to inspire an existing customer to start a conversation. In 2022 I ask if they are taking advantage of the Rule of 112-12? They ask, what is the Rule of 112-12? Then I say, you don’t know about the Rule of 112-12? I thought for sure that someone like yourself would take advantage of the Rule of 112-12. Do you know that it’s a way to eliminate taxes at much lower effective tax rates on qualified money and tax deferred annuities? If you make $70,000 per year of income and have $400,000 in an IRA, if you took $40,000 per year out of the IRA and paid taxes on it your effective tax rate would be 8.6 percent or $3,440. If you did that for ten years, it would only cost you $34,400 to completely eliminate the income tax liability on the $400,000 IRA. If you took the $40,000 every year out of your left pocket and put it in your right pocket which would be a cash value life insurance policy, the leverage or death benefit would reimburse the family for the $34,400 your customer paid while alive. Ask them if they realize how brilliant they are. They withdrew their entire $400,000 IRA and did not pay one cent of the income tax on that money out of their own pocket. In January of 2023 that Rule of 112-12 becomes the Rule of 120-12. That’s an additional $8,000 per year. The above customer could have withdrawn $48,000 per year and still paid an effective tax rate of 8.6 percent or $4,128. Next year you could eliminate the income tax on $480,000 for $41,280. The opportunity increases.
Let’s get started with the sales ideas.
Idea #1: Customers are desperate for tax planning
Shouldn’t reducing your taxes be part of a comprehensive financial and wealth building strategy? One of the articles explains that 80 percent of investors desire their advisors have skills in minimizing taxes. 90 percent of our customers understand the terrific damage that taxes can do to our financial and retirement futures. Both articles clearly explain why we should be taking advantage of the tax preferences of our products.
Title: Why Most Financial Advisors Do Not Provide Valuable Tax Planning
https://www.forbes.com/ (Forbes, March 4, 2022)
https://www.forbes.com/sites/davidrae/2022/03/14/why-most-financial-advisors-do-not-provide-valuable-tax-planning/?sh=2cea4f54cf5c
Title: When Advisors Have Tax Blind Spots, Clients Leave Billions in Returns on the Table
https://www.thinkadvisor.com/ (Think Advisor, October 17, 2022)
https://www.thinkadvisor.com/2022/10/17/advisors-tax-blindspots-leaves-billions-in-returns-on-the-table/
Idea #3: Average returns?
Most of us know that the average annual return of the S&P 500 is between eight and ten percent. Did you also know that the S&P 500 very rarely produces returns of eight to ten percent. In fact, for the most part you may see many outsized returns in both directions. That is why I shared how important sequence of returns were in idea number two. Also, be careful how you calculate returns. From approximately 2000 to 2009, the stock market made nothing. Then from 2009 to the present the markets provided outsized returns. Now, again, many analysts are predicting the possibility of another lost decade. Doesn’t that mean zero average returns for a decade? Strategic planning to take advantage of volatility could be the order of the day in the next decade.
Title: The stock market rarely produces average returns: Morning Brief
https://finance.yahoo.com/ (Yahoo Finance, October 11, 2022)
https://finance.yahoo.com/news/the-stock-market-rarely-produces-average-returns-morning-brief-100033582.html
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