The Software that Tells the Whole Truth about All Things Financial

Author Archives: Kate4TC

“Truth Quotes”

“Truth Quotes”
We had the privilege of conducting a Truth Training in Salt Lake City hosted by Paradigm Life. Jay Gentry of Chandler Advisors, LLC compiled his favorite quotes from the training. (Thanks Jay!) We hope you’ll enjoy (and maybe even repeat) some of these “Truth Quotes”:   “Eliminate ‘government’ from our vocabulary and replacContinue Reading

Truth Tip, Tax Chart

In the upper middle of the Income Tax Chart is the “Federal Income Tax / Gross Income %”  Since this is mathematically correct but not technically accurate, you can click on it to hide. The reason it is not technically accurate is that our income tax does not change up or down based on averages but instead on last dollar earned or marginal rates.  … Continue Reading

Truth Tip, Amortization Schedule

For an Amortization Schedule on the Loan Analysis Calculator, you can switch the “Period Number” to “Start Date” by clicking on it and then your amortization schedule will have payments dates on it which you can adjust based on when you want the first payment to be.… Continue Reading

Truth Tip, Loan Analysis

On the Loan Analysis Calculator, if you want to show skipping a payment on the loan payback, go the the middle and click the “compare” button, then you skip payments or change them on the blue lines.  … Continue Reading

Borrowing Calculator Tutorial 9m 43s Transcript

So let’s look at something a little different here, and let’s go to the borrowing strategy, here if we take the borrowing strategy and let’s look out over 30 years, no present value dollars, let’s put in 10,000 dollar a year. Okay, so what we see over this time is $300,000   so let’s start with understanding the shoe box for just a minute and if we have this shoe b… Continue Reading

Average Does Not Equal Actual

Average Rates of Return are often touted by financial experts, and yet simple math can show us that Average does not equal Actual. Pretend that you invested $100,000 into a mutual fund that had promised an average rate of return of 25% if you left the money alone for 2 years. In the first year it earned 100%. After the first year, the investment would look like this: In the s… Continue Reading

Using the Loan Analysis Calculator to show difference between a 15 and a 30 year mortgage payment if applied to PUA.

How do we show what the difference between a 15 and a 30-year mortgage payment would look like if applied to a PUA (paid up addition) on a life insurance policy?   Using the Loan Analysis Calculator we can see that when the savings rate and loan rate are the same, the gross costs of each mortgage are identical to each other when properly measured over the same time… Continue Reading

How do I explain the difference between Total IRR and Annual ROR on Life Values?

How do I explain the difference between Total IRR and Annual ROR on Life Values?   The Total Internal Rate of Return is based on the cash value (and we also have one based on the death benefit) and it starts very low and increases over time.  It usually shows a negative 100% first year because we have zero cash value in the first year but the IRR appreciates and increases over ti… Continue Reading

How to tell the whole truth about Direct Recognition.

How to tell the whole truth about Direct Recognition. There are two different methods insurance companies use to handle the loaned cash value — direct recognition and non-direct recognition. In a non-direct recognition company, the earnings rate on cash value is totally unaffected by any loans against cash value. In a direct recognition company, the earnings rat… Continue Reading

Truth Tip on Borrowing Calculator

On the Borrowing Calculator, just left of the first loan, there is a blank white space where you can place your mouse and it will switch to a hand.  If you click on this, you’ll see the IRR on the entire deal you are looking at on that calculator.… Continue Reading

Life Insurance Loans, Simple or Compound Interest?

The Whole Truth about Life Insurance Loans, Simple or Compound Interest?   Investopedia explains Compound Interest as “The more frequently interest is added to the principal, the faster the principal grows and the higher the compound interest will be. The frequency at which the interest is compounded is established at the initial stages of securing the loan.” InContinue Reading

Life Insurance Loans, In advance or Arrears?

Life Insurance Loans, In Advance or in Arrears? The Whole Truth   An issue that is often incorrectly talked about as an advantage, is the idea that the insurance company charges a lower interest when interest is paid up front (in advance) versus at the end (in arrears).  The whole truth is that there is a different factor (not a different interest rate) used to calculate th… Continue Reading

Life Insurance Loans: Where does the interest go?

Life Insurance Loans:  Where does the interest go?  The Whole Truth:   Life insurance companies charge interest when we borrow their money just like banks and credit unions and other financial institutions do.  Many statements are made in the market place about how we borrow our cash value.  This is incorrect. The whole truth is we borrow against our cash value, or t… Continue Reading

Life Expectancy

The Life Expectancy tables in the Truth Concepts Calulators “Tools” section show the AVERAGE number of years a particular person will live.  You can choose the age, male/female, standard/preferred, smoker/non-smoker and joint/single.  Then remember that the number of years you see in the L.E. column is an average.  For example, when a 35 year old m… Continue Reading