Table Of Contents - Apekmulay
Table of ContentsThe Retirement MiracleCopyrightThe Road Not TakenDedicationIt’s Worse than I ThoughtStorm Clouds on the HorizonCan Anyone Escape?A Rocky BeginningThe SolutionThe Big LieBut I Heard Life Insurance is a Bad InvestmentA Story About TomIs it Really Tax-Free?Never Lose MoneyUp, Up and AwayHow Can They Do That?What if Tax Laws Change?The Ideal AnswerThe Best-Kept SecretThe Other OptionWhat Next?2
The Retirement MiraclePatrick Kelly3
Copyright4
The Road Not TakenI shall be telling this with a sighSomewhere ages and ages hence:Two roads diverged in a wood, and I –I took the one less traveled by,And that has made all the difference.The Road Not Taken, Robert Frost5
DedicationTo my Mom and DadThank you for everything.6
AcknowledgementsWriting a book feels much like I imagine a walkacross America. If you focus only on yourdestination, the sheer magnitude of the task canoverwhelm you. Paralyze you. But if you take eachday, one at a time, bit by bit, not only will youeventually reach your final destination, but you willalso have the privilege of reveling in the joy of eachday’s walk.This is a picture of my journey.Not only have these last few years been a surpriseadventure, more significantly, I have beensurrounded and blessed by incredible people, all ofwhom I now call friends. It’s a gift. A rare andunexpected gift. Thank you!But I do need to name a special few, withoutwhose support I would have failed.Laura Carlson, Queen of the Cardboard – thankyou for your long days and for putting your entireheart and soul into making sure all customersreceive their orders. Your faithfulness and dedicationhumble me.Caryn Kelly – most fathers don’t get the privilegeof working with their daughter I am blessed. Iwatch in awe at your maturity and talent. I love you.Gina Lillie – thanks for accepting the task ofkeeping me pointed in the right direction; if anyone isup to it, you are.Audria Gardner at Indigo Design – your talent as adesigner is a wonderful gift. Thank you for your7
brilliant cover and for taking this manuscript andmaking it art.Greg, Nathan, and Carter – each of you havebecome the kind of friend every person hopes for,but few actually experience. Please know thatwithout your friendship, encouragement, anddirection, my journey would have likely ended a longtime ago. I am forever in your debt.Bill Martin–thanks for your sustaining friendshipand continunig encouragement. You're a trueprofessional and an asset to our industry.Jim Kuhlman, my trusted confidant and brother –your friendship allows me to nullify the laws ofmathematics, because with your mind, one plus onealways equals five.My dear wife, Marly – thank you for willinglybearing the brunt of my travels, for making ourhouse a wonderful home, and for being my lovingwife as well as the best editor on the planet. If Icould live 100 lives, I'd choose you in every one.8
Special Note to ReaderThis book is not intended to give any tax orinvestment advice of any kind. Neither is it intendedto make or suggest any personal recommendationas to what any individual should or shouldn’t choosein regard to the most fitting and appropriate financialstrategy. Each person’s need and situation is asunique as his or her own fingerprint. Also, and Ipoint this out multiple times throughout this book,while these strategies exist as of the writing of thismanuscript, no one can guarantee they will exist inthe future. Therefore, I encourage you to seekprofessional advice from a knowledgeable advisorwho fully understands these concepts and can notonly provide you the most up-to-date information,but can clearly outline both the benefits as well asthe pitfalls of this or any other strategy you mightpursue. Lastly, I urge each reader to pursue onlywhat is in his or her unique, specific, and bestinterest. The intent of this book is solely to introducesome of the unique and powerful concepts andstrategies that life insurance and annuities canprovide if utilized to their full and proper potential. Ihope you find this book to be a fun journey.9
Chapter 110
It’s Worse than I ThoughtI will never forget May 19, 2008. That day changedeverything.I was sitting in a hotel dining room eatingbreakfast, getting ready to host a daylong workshopfor a group of financial professionals in Raleigh,North Carolina, when I just about choked on myoatmeal. Seriously, it was all I could do to keep fromblowing oats all over the nicely dressed couplesitting next to me.The headline caught my attention; the articleinvoked the reaction.I picked up the morning copy of USA Today , andstaring at me in bold print, right there on the frontpage, was: Bill for Taxpayers Swells by Trillions.Stunned, I read on. Here’s what it said:The federal government’s long-term financialobligations grew by 2.5 trillion last year, areflection of the mushrooming cost of Medicareand Social Security benefits as more babyboomers reach retirement.That’s double the red ink of a year earlier.Taxpayers are on the hook for a record 57.3trillion in federal liabilities to cover the lifetimebenefits of everyone eligible for Medicare,Social Security and other governmentprograms, a USA TODAY analysis found.11
That’s nearly 500,000 per household.When obligations ofstate and localgovernments are added, the total rises to 61.7trillion, or 531,472 per household. That is morethan four times what Americans owe in personaldebt such as mortgages.The 2.5 trillion in federal liabilities dwarfs the 162 billion the government officially announcedas last year’s deficit, down from 248 billion ayear earlier.‘We’re running deficits in the trillions of dollars,not the hundreds of billions of dollars we’rebeing told,’ says Sheila Weinberg, chiefexecutive of the Institute for Truth in Accountingof Chicago.The reason for the discrepancy: Accountingstandards require corporations and stategovernments to count new financialobligations, even if the payments will bemade later. The federal government doesn’tfollow that rule. Instead of counting lifetimebenefits for programs such as SocialSecurity, the government counts the cost ofbenefits for the current year. 1 [Bold print byauthor.]I was gasping for air. How could this be? I had justspent the previous decade working on my book Tax12
Free Retirement. Reading. Researching. Writing.And never once did this fact come up. Not once.How could I have missed it?Easy. It was information that wasn’t talked about.Taboo in the circles of the political elite. Thesenumbers were clandestine. Buried.Do you comprehend what this article is saying?Our budget deficit for 2007 was 15 times worse thanofficial reports. Yes, 15 times! Even the phrase“Good enough for government work” can’t comeclose to touching this discrepancy.Let me explain in more detail what this front-pagearticle was telling the American public. Simply put, in2007 the U.S. government reported our country’s“official” annual deficit (the amount we spent abovethe income we brought in) to be 162 billion – billionwith a b. However, our “real” deficit for that year wasactually a mind-numbing 2.5 trillion – trillion with a t.Why the difference? Here comes the really funpart.The U.S. government uses a set of accountingpractices different from every other entity in thecountry, including state governments. All otherentities report debt on their balance sheet the yearin which they commit to the liability, not just the yearin which the money is spent. Do you see thedifference? It’s major.For example, let’s say in 2010, Corporation Xcommits to a project that is going to cost 20 millionover the next five years. Even though the moneyisn’t going to all be spent in 2010, the entire 20million has to go on that company’s balance sheet13
as a liability, because it is money that will be spentbased on the current year’s decision.Is it any surprise that the U.S. government doesn’tplay by the same rules? Yeah, that was my reactionas well.Here’s how everybody’s favorite uncle, Uncle Sam,handles the reporting of his debt. He (the U.S.government) only reports debt in the year that themoney actually leaves the U.S. coffers, not in theyear in which he commits to the liability, creating anenormous disparity. A disparity so large that, whenyou look at our total national debt, this reportingaberration covers up a figure that is nearly six timeslarger than what is currently being reported to theAmerican public.Here are the actual numbers. I hope you’re sittingdown.As of January 2011, the “official” national debtreported by the U.S. government is 14.3 trillion.However, our “real” national debt, taking intoaccount all of our current outstanding liabilities,stands at a whopping 76.1 trillion2 – five and a halftimes larger than the number the governmentofficially reports.Before we go any further, I want to put intoperspective just how big 1 trillion really is.Near the end of last year, I picked up my oldestson from school. On the way home he said, “Dad,do you want to know how big a trillion is?”“Yeah,” I said enthusiastically.“Okay, guess what year it was 1 trillion secondsago?”14
“I have no idea. What year was it?”“C’mon, Dad, you gotta guess.”“Uh 1400?” I answered a bit pathetically.“Nope! Not even close! It was 30,000 B.C.”“What? No way!” I said, as I tried to keep my caron the road. “That’s impossible.”“Nope. Trust me. It’s right. We did the math inclass today.”“That can’t be. That seems way too big,” I said,wishing I could pull out a calculator right at that verymoment.And that’s exactly what I did when I got home. Andhe was right.Let me walk you through the simple math Iperformed to verify that answer.Seconds per Day 86,400 (24 hours X 60minutes X 60 seconds)Seconds per Year 31,536,000 (86,400seconds per day X 365 days)Number of Years in 1 Trillion Seconds 31,710(1,000,000,000,000 / 31,536,000)Can you believe that? It takes nearly 32,000years, at 31.5 million seconds per year, to equal 1trillion seconds. Or another way to look at this is,you would have to spend 31.5 million a year for31,710 years just to spend 1 trillion.The word “trillion” has been thrown around somuch in the last few years that we have becomenumb to its vastness.So, back to our debt – America’s “real” debt15
currently stands at 76.1 trillion. This means thatyour personal share of this obligation is just over 250,000. That is the amount that every Americanwould need to pay just to meet our currentobligations. (Though by the time you read this bookit will be much, much larger.)Do you have an extra quarter million just sittingaround under your mattress? A quarter million thatyou are eager to give the U.S. government? Doesyour 3-year-old son? Does your grandmother? Yourgreat-uncle?Every man, woman, and child in America wouldhave to cough up 250,000, as of the writing of thisbook, to expunge this staggering mountain ofobligation. And this number is growing at anunprecedented rate.To make matters worse (not that we need to makethem worse), if we calculate this debt based solelyon the taxpaying citizens of the United States, theamount that each taxpayer would owe blossoms toover 1 million – each!3Does that anger you in the same way it does me?It should. How is it possible that these cold, hard,facts would remain a secret to the American public?It should be headline news – every day. And whileI’m not a conspiracy theorist, let’s admit it, we’vebeen lied to.There is one person in public service that hasbeen desperately trying to get this message out tothe American people, but no one seems to belistening. As a matter of fact, it seems that mostAmericans have shoved their index fingers so far16
into their ears that their knuckles are touchingsomewhere in the middle of their heads.The person I am referring to is David Walker,former comptroller general of the United States. For15 years, and four presidential administrations, Mr.Walker served our country in different publiccapacities ranging from assistant secretary of laborfor pension and welfare benefits to his final positionas comptroller general of the United States.4Essentially, he was the nation’s CPA.What shocks me most about his message, otherthan its dire ramifications, is that no one is listening.Wouldn’t you think that an appraisal from the manwho had to sign off on America’s budget wouldwarrant our attention? Yet most Americans seem tochoose ignorance.Here are four quotes from Mr. Walker5:“If [our country] were a company, we would beout of business.”“Current federal financial reporting andbudgeting provides policy-makers and the publicwith an incomplete and even a misleadingpicture.”“As the federal official who signs the , it is apparent that our government’sfinancial condition is far worse than advertised.”“We have been diagnosed with fiscal cancer.”17
These quotes are not taken out of context. Themessage is clear. We are in trouble, and if Americadoesn’t make some quick changes, it will find itselfon its financial knees, because what is yet to comeis only going to exacerbate the already horrificproblem.Here’s just one of the many reasons why:In 1945 – five years after the first monthlypayment was issued to a Social Securityrecipient – there were 42 workers per retiree. In1950, the ratio was 16-to-1. In 1960, there werefive workers per retiree. Today, the ratio is 3.3to-1, and within 30 years, it is projected therewill be just slightly more than two workers perretiree. Some economists have labeled SocialSecurity a pyramid scheme.6I find that last sentence a bit amusing, because itechoes a sentiment that an individual once shoutedfrom the back of the room at one of my workshops.It was early in the workshop, and I was speakingabout the pending problems surrounding SocialSecurity. I was pointing out that there is absolutelyno pot of money sitting anywhere within the SocialSecurity program that has your name on it. Noneindeed. Social Security is a pay-as-you-go system.Every penny that is taken in each year is spent thatyear, including your Social Security tax. You are notputting money away for you. You are paying for theindividuals currently receiving Social Securitybenefits.18
As I was detailing this with the group, a man in thefar back of the room yelled out, “It’s just a Ponzischeme!” Everyone laughed. Including me. Histiming was perfect. You see, I was speaking at ahotel in downtown New York City to a group of localfinancial professionals, and Bernie Madoff had justbeen convicted of running the largest Ponzi schemeof all time. It was fresh on everyone’s mind.But you know what? I think the person whoshouted that comment was right. Social Securitydoes operate like a classic Ponzi scheme – ascheme that just may make Bernie’s swindle looklike a game of Monopoly . (To be clear, I am notsaying that Social Security is a Ponzi scheme. I’msimply saying that the parallels are very interesting.)Let me give you the definition of a Ponzi scheme.Simply put, it is a scam that uses the moneyreceived from current depositors to pay back what isowed to the early depositors. This was the hoaxCharles Ponzi perpetrated on a great number ofpeople back in the 1920s. He had to keepgenerating new investment money from newindividuals because little, if any, of the money hereceived from investors was actually ever invested.He simply used it to fund a lavish lifestyle.This is not dissimilar to the way that SocialSecurity works. As I just mentioned, all SocialSecurity revenue that comes in during the currentfiscal year is spent. However, it may be spent inways that you were not aware. While it does coverbenefits for existing retirees, it is also used to fundother parts of the government’s over-committed19
general budget. Yes, you heard me correctly. Thegovernment spends the money that you pay into theSocial Security system on things other than SocialSecurity.The government borrows money from the SocialSecurity Trust Fund so it can attempt to meet all ofits other current obligations, and then it turns aroundand writes a big, fat IOU for what its just borrowed.Why does it do this? It must, in order to keep thedoors of government open.When you hear the term “Trust Fund,” don’t youthink of a huge pot of money sitting somewhere, justwaiting to be used? I do. However, that is not thecase. It is a deceptive choice of words. The onlyreason there is a so-called Trust Fund is simply foraccounting purposes, so the government knows howmuch it has borrowed from the Social Securityprogram.Do you see the similarity to a massive Ponzischeme? Social Security takes all the current taxrevenue from today’s taxpayers to cover thebenefits due to the earlier depositors, those who arenow receiving Social Security benefits. The problemis, as you read above, pretty soon there are going tobe only two workers for every one recipient of SocialSecurity benefits. As my daughter would say, “Yeah,have fun with that.”Why does all this matter? I’ll give you the answerin two words – future taxes. If our debt is almost sixtimes worse than we thought, and the government’sonly source of revenue to combat this debt istaxation, then what do you think is going to happen20
to future tax rates? And if you don’t think it is likelythat tax rates will go up in the future, simply go backand review the tax rates in America over the lastcentury. (See Appendix A for a year-by-year listingof the top marginal tax bracket all the way back to1913.)Did you know that back in the 1940s, the topmarginal tax bracket was over 90 percent? No, thatis not a typo. Over 90 percent! Think about whatthat means. It means that individuals paying taxes atthat rate kept less than 10 cents out of every dollarthey earned. Ninety cents or more of every dollarabove that tax level went to Uncle Sam!How would you like to keep only 10 cents of everyhard-earned dollar? It is possible, you know.Unlikely, but possible. We have been there before;it’s just that most people either don’t remember orweren’t alive to know.So, does the significance of this debt issue, and itsramifications, make a little more sense now? I hopeso.But let me tell you, the best part is yet to come,because there is a solution for your retirement. Away you can potentially make future tax ratesimmaterial to your retirement savings. A way thatyou can get your money out of the tax-wash todayand be able to access it tax-free in the future,regardless of at what age you want to retire*.I know you may be thinking, “C’mon, that soundstoo good to be true,” but it’s not. This strategy hasbeen around for decades and is just as real andpowerful today as ever. As a matter of fact, with the21
introduction of a new product in the marketplace, Ibelieve the opportunity is better than ever. And thisbook, The Retirement Miracle, is going to give youthe details about how this specific product works. Iwant you to see all the facts and then make the bestinformed decision that fits you, whether it utilizes thisstrategy or not.This is not a one-size-fits-all approach; it is not foreverybody. But for those that see its potential, andcan afford to take advantage of its great benefits, Ihave found nothing better.* Based on current tax law as of this writing.22
Chapter 223
Storm Clouds on the HorizonIn May of 2007 I hosted my first training workshopfor financial professionals. At that event I gave eachattendee a notebook of materials for the day thatwas divided into five areas of financial concern, or“storm clouds,” as I called them.The first two categories dealt with debt, bothpersonal and national. What I saw concerned me.The last category centered on the foreclosureactivity I saw accelerating around the country,especially in the state of Ohio at the time.I made a statement to that small group (which Istill have on video) in which I warned that very soonsomething was going to set an inferno ablaze withinthe economy. While I didn’t know with certainty whatit would be, I speculated that very possibly it wouldbe ignited by foreclosu
The Road Not Taken I shall be telling this with a sigh Somewhere ages and ages hence: Two roads diverged in a wood, and I – I took the one less traveled by, And that has made all the difference. The Road Not Taken, Robert Frost 5. Dedication To my Mom and Dad Thank you for everything. 6. Acknowledgements
Creating a table of contents The Insert Index/Table window (Figure 1) has five tabs. All of them can be used when creating a table of contents: Use the Index/Table tab to set the attributes of the table of contents. Use the Entries and Styles tabs to format the entries in the table of contents. Use the Background tab to add color or a graphic to the background of the table of
Creating a table of contents The Insert/Index Table window has five tabs. Four of them are used when creating a table of contents: Use the Index/Table tab to set the table's attributes. Use the Entries and Styles tabs to format the table entries. Use the Background tab to add color or a graphic to the table background. The next four sections of this chapter tell you how to use each . /p div class "b_factrow b_twofr" div class "b_vlist2col" ul li div strong File Size: /strong 554KB /div /li /ul ul li div strong Page Count: /strong 15 /div /li /ul /div /div /div
Word. Modifying the appearance To change how the table of contents looks – font type, size, indentation etc. – click in the table and on Table of Contents on the References tab, then choose Custom Table of Contents again. In the Table of Contents dialog box, click the Modify button to
The TABLE OF CONTENTS will have shifted. If you need to re-insert the TABLE OF CONTENTS, this margin fix will not stay in place. You will have to follow the temporary fix again OR make a permanent fix to the TABLE OF CONTENTS. Permanent fix: Place your cursor at the first entry in the TABLE OF CONTENTS.
table of contents reviewed early. It is proposed that, in the digital environment, " the table of contents needs to be generated automatically to reflect the dynamic feature of "digital books" and online collections. the table of contents needs to provide an overview to contents of the documents it covers; the overview
Standard Cover Letter of Transmittal Table 1. Identification Table 2. Bidding Process Table 3. Bid Submission and Opening Table 4. Bid Prices (as Read Out) Table 5. Preliminary Examination Table 6. Corrections and Unconditional Discounts Table 7. Exchange Rates Table 8. Currency Conversion (Multiple Currencies) Table 9.
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