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.  

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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.

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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.  

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The Whole Truth about Indexed Universal Life, Part 2

By Todd Langford, www.truthconcepts.com Mt. Enterprise,Texas   The Whole Truth about Indexed Universal Life, Part 2 Why not sell (or buy) IUL/EIUL? How is it different from Whole Life? Insurance companies have put numerous pages on the front of Equity Indexed Universal Life (EIUL) illustrations that describe the issues below, but most people (by design) will not take the time to read and understand what these pages are saying.  I would encourage you to read those pages thoroughly before depending on an EIUL policy to increase your assets or protect your

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The Whole Truth on Equity Indexed Universal Life Part I

The Whole Truth about EIUL Part I By Todd Langford   Go here for Part Two of this blog post: https://truthconcepts.com/the-top-10-reasons-not-to-buy-equity-indexed-universal-life One of the major problems with the agents and the companies that sell EIUL (Equity Indexed Universal Life, which is what it was originally called) or IUL (Indexed Universal Life, which is what the industry is now calling it to avoid SEC scrutiny) is the gross negligence in conveying the risks to the clients. All one has to do is carefully read the full insurance illustration or proposal to

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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 box and we’re putting in10,000 ayear into it for 30 years at the end of the time frame we’re going to

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Truth Tip Loan Analysis Calculator

On the Loan Analysis calculator, you can title each of the loans (in addition to changing the title on the title bar) by right clicking on “loan 1” or “loan 2” and typing in 30 year mortgage and 15 year mortgage etc.

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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 second year, the fund earned -50% (that is a negative 50%) and so now your investment looks like this: While your

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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 frame.  However, when the mortgage interest deduction is taken into account, the longer mortgage has less cost.   In order to show the difference

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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 time. It is however, weighed down by the early years as IRR is a “cumulative” column as opposed

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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 rates on loaned cash value are affected both positively and negatively when the cash value is used as collateral. Generally, the loaned cash value has a dividend rate that is a certain number of

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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.

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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.” Investopedia explains Simple Interest by saying “Simple interest is called simple because it ignores the effects of compounding. The interest charge is always based on the original principal, so interest on interest is

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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 the amount of up front interest that has to be paid.  This factor can be calculated by reducing the Annual Interest Rate by the

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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 to be more specific we borrow the insurance companies’ money and use our cash value as collateral.  They charge us interest for this privilege because we have now

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Gold Confiscation Requirement

A Recreation of the 1933 Gold Confiscation Requirement Document Could something like this happen again?? It’s a bit shocking to thin that less than 100 years ago, the U.S. government saw confiscation of it’s citizen’s wealth as an option! Click on the red link directly below to download a full-size PDF: —>> Gold Confiscation Requirement

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How to Input Inforce Ledger into Life Insurance Values Worksheet?

How do I input an inforce ledger into the Life Insurance Values worksheet? Open the Permanent Life Insurance or Life Insurance Values Tool (you’ll find “Tools” to the right of “Calculators” on your Truth Concepts dashboard.) Select radio dial “Inforce”. A box will appear asking for Existing Cash amount. Enter the Cashvalue on the policy’s current status report in this box.   Put age and policy year in on top left and fill in description so you’ll know which illustration you copied. Next to it, an “As of:” box will appear, allowing you

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The Truth Concepts Blog
(New to TC? Click Here!)

Welcome to the Truth Concepts Blog. We’re delighted you are here! You’ll find many examples and tips for using Truth Concepts in our posts, along with other helpful information you can use in your business. Have you heard about our Free Ten-Day Trial? Click here for details. Looking for something in particular? Check out the Categories in the Menu on the right. Click on a Category to view posts relating to that topic or Truth Concepts calculator. The “Truth Tips” category is for quick tips and updates on various calculators. Please note

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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 male, preferred, non-smoker turns 65, there are 20.78 years of his life remaining on average.  This means 50% of the people will live longer than 20.78 years and 50% of the people will live less

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Accumulation

When filling in the tax box on the right for Mutual Funds, the following guidance and definitions will be helpful.  Remember to get this tax box, the “MF?” box on the left must be checked.  This means the existing money plus any new payments will be taxed like a mutual fund.  To fill in the box, you’ll use 3 percentages that must equal 100%, for example, 20% + 30% + 50%.  Unrealized Long Term Capital Gains means the percent of the funds’ growth that “fell off the fund managers desk”

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Favorite Links

Visit some of our favorite links as we will update the list below with our favorite links: www.401kfeesandexpenses.com    The Economic Value of Certainty-LIS Article Les McGuire   Washington Post Mensa   New Stock Market Terms   www.bigeye.com/griffin.htm scroll down for a talk by G. Edward Griffin author of The Creature from Jekyll Island   www.dalbar.com for their Quantitative Analysis of Investor Behavior reports   From Bloomberg TV- The Truth Behind Hidden Fees   You Tube Videos – Get the Whole Truth Part 1   http://www.youtube.com/watch?v=08UPQ3JaRek Part 2   http://www.youtube.com/watch?v=94eDjL4ciVE Part 3   http://www.youtube.com/watch?v=x1NPUf2Q-sw   Fee

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Truth Tip, All Calculators

When in Financial Calculators, Double Click on the word of the second calculator you want and it will come up.   For example, if you have the Rate Calculator up and now you want Future Value, just click on “Future” inside of the Rate Caclulator and you’ll get the Future Value Calculator.

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