Leaving A Legacy
We all like to be remembered in one way or another. Sometimes we want to be remembered by our community, sometimes by our industry. Sometimes we wish that even just our family would remember us.
How would you like to be remembered by your grandchildren forever?
Before I give you an idea how, let me prove a point.
Get a piece of paper and draw four lines on the top half and draw eight lines on the bottom half.
On the four lines on top, write down the name of your grandparents, first name and last name, on your mother’s side and your father’s side.
Most likely, only half of you would remember the full name of your grandparents.
Now, on the eight lines at the bottom, write down the first name and last name of your eight great-grandparents. Rarely do we meet someone who can write the full name of their great grandparents. Interesting isn’t it?
So how come John D. Rockefeller’s great-great-great-great-great-great-great-grandkids can remember his first and last name and you don’t even remember grandma and grandpa, why? It’s because every year, they get a cheque from John D. Rockefeller.
How would you like to be remembered by your grandkids? Here’s what we can do, it’s very simple.
We have a generous Grandpa who’s has $100,000 of lazy money. He buys a joint lifetime income annuity. The joint annuitant is his 5-year-old Granddaughter. For the rest of his life, he gets $3,864 every year on her birthday.
When Grandpa dies, she continues to get $3,864 on her birthday for the rest of her life. Now let me ask you, if you had a Grandpa or Grandma who gave you $3,864 every birthday for your entire life and never forgot even though they’ve been gone for years. Would you remember their names?
It’s very simple, generous grandpa, $100,000, favourite granddaughter, joint life, $3,864 a year as long as either one of them is alive. Total payout to the granddaughter on her 95th birthday is $351,624.
You may be asking, what about inflation? $3,864 won’t pay be enough to pay for groceries when she’s 65. Ok, we can put in an inflation protection. We can put in a 4% inflation factor on it. Now, her first birthday present goes down to $1,345. But every year, that goes up by 4%. When she’s 20, it goes up to $2,422, when she’s 50, it goes up to $7,856. By the time she’s 65, it’s up to $14,149. Now if granddaughter lives to 100, which is highly likely, she would have been paid a total of $1.2 million over her lifetime.
Here’s how to make it even better. Grandpa takes a portion of the annuity income and buys a 20 pay Whole Life policy on the granddaughter for $100,000. After 20 years, the insurance is paid for and the granddaughter has insurance for the rest of her life where she can put her children as the beneficiary.
Here’s my question, where else can grandpa can put $100,000 and be guaranteed that two generations of his family will never forget his name and out of that $100,000 potentially transfer $1.3 million?
A mutual fund cannot do that, a GIC cannot do that, investing in the stock market cannot do that. That can only be done through an Annuity bought through a life insurance company.
Annuities has gotten a lot of bad press from popular finance authors, but even the Chairman of the Federal Reserve Ben Bernanke has most of his investments in annuities. This is the guy who practically runs the world’s largest economy and more than 50% of his assets are in annuities.
An annuity is a great investment tool that has been ignored by a lot of clients and advisers. Maybe it’s time to look at annuities in your portfolio.
How would you like to be remembered by your grandchildren forever?
Before I give you an idea how, let me prove a point.
Get a piece of paper and draw four lines on the top half and draw eight lines on the bottom half.
On the four lines on top, write down the name of your grandparents, first name and last name, on your mother’s side and your father’s side.
Most likely, only half of you would remember the full name of your grandparents.
Now, on the eight lines at the bottom, write down the first name and last name of your eight great-grandparents. Rarely do we meet someone who can write the full name of their great grandparents. Interesting isn’t it?
So how come John D. Rockefeller’s great-great-great-great-great-great-great-grandkids can remember his first and last name and you don’t even remember grandma and grandpa, why? It’s because every year, they get a cheque from John D. Rockefeller.
How would you like to be remembered by your grandkids? Here’s what we can do, it’s very simple.
We have a generous Grandpa who’s has $100,000 of lazy money. He buys a joint lifetime income annuity. The joint annuitant is his 5-year-old Granddaughter. For the rest of his life, he gets $3,864 every year on her birthday.
When Grandpa dies, she continues to get $3,864 on her birthday for the rest of her life. Now let me ask you, if you had a Grandpa or Grandma who gave you $3,864 every birthday for your entire life and never forgot even though they’ve been gone for years. Would you remember their names?
It’s very simple, generous grandpa, $100,000, favourite granddaughter, joint life, $3,864 a year as long as either one of them is alive. Total payout to the granddaughter on her 95th birthday is $351,624.
You may be asking, what about inflation? $3,864 won’t pay be enough to pay for groceries when she’s 65. Ok, we can put in an inflation protection. We can put in a 4% inflation factor on it. Now, her first birthday present goes down to $1,345. But every year, that goes up by 4%. When she’s 20, it goes up to $2,422, when she’s 50, it goes up to $7,856. By the time she’s 65, it’s up to $14,149. Now if granddaughter lives to 100, which is highly likely, she would have been paid a total of $1.2 million over her lifetime.
Here’s how to make it even better. Grandpa takes a portion of the annuity income and buys a 20 pay Whole Life policy on the granddaughter for $100,000. After 20 years, the insurance is paid for and the granddaughter has insurance for the rest of her life where she can put her children as the beneficiary.
Here’s my question, where else can grandpa can put $100,000 and be guaranteed that two generations of his family will never forget his name and out of that $100,000 potentially transfer $1.3 million?
A mutual fund cannot do that, a GIC cannot do that, investing in the stock market cannot do that. That can only be done through an Annuity bought through a life insurance company.
Annuities has gotten a lot of bad press from popular finance authors, but even the Chairman of the Federal Reserve Ben Bernanke has most of his investments in annuities. This is the guy who practically runs the world’s largest economy and more than 50% of his assets are in annuities.
An annuity is a great investment tool that has been ignored by a lot of clients and advisers. Maybe it’s time to look at annuities in your portfolio.
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