When you link to an index, you’re taking the interest on your million and giving it to the insurance company to fund an options budget. Your million is safe in the insurance company; it’s not invested in the S&P.
During the Great Recession, our clients saw impressive returns. In two years, one client was credited 17%, capped out, and another in 2009 capped out at 16%. They only capped out in two of those years. The other three years, they received a nice rate of return. By rebalancing, they didn’t have five years of zero returns. They didn’t make anything in those years, but they didn’t lose either.
We had them switch back to the general account portfolio rate during their annual reviews, where they ended up getting credited 5%. This strategy allowed our clients to move from an average of 7.23% up to 11.17% by rebalancing.
Learn more about how to optimize your returns with smart indexing and rebalancing. Click on the link below, contribute a nominal amount towards shipping, and I’ll cover the rest. I’ll send you a hard copy of my insightful book.
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