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The name is catchy—”Wealth Beyond Wall Street.” Most people want to find wealth beyond Wall Street to avoid risk. Who wouldn’t want to be a safe money millionaire?
In this article, we share what’s actually going on with the main theories behind Wealth Beyond Wall Street and Safe Money Millionaire.
Brett Kitchen and Ethan Kap, the originators of the terms “Wealth Beyond Wall Street” and “Safe Money Millionaire,” have authored two books that unfold these concepts. Their promoted product, Indexed Universal Life Insurance (IUL), comes with its set of risks that warrant attention.
My primary critique of Wealth Beyond Wall Street is its fundamental reliance on Wall Street performances, contradicting its title’s implication. The strategy of using IUL to amass wealth supposedly outside of Wall Street’s influence mirrors investing directly in Wall Street, as it depends significantly on its fluctuations. The name “Wealth Beyond Wall Street” might suggest independence from the market’s ebbs and flows, but in reality, it’s deeply intertwined with them. This connection introduces risks associated with IUL, where poor market performances can diminish the policy’s value, contradicting the goal of accruing wealth independently of Wall Street. This issue underscores a significant flaw in the premise of IUL products.
Is Wealth Beyond Wall Street misleading, then? To better understand, consider these seven insights about IUL policies, the backbone of the strategies for achieving Wealth Beyond Wall Street and becoming a Safe Money Millionaire.
 | Policy Checklist Make Sure You Get a Good Policy Is your policy good or bad? Use this checklist to help evaluate your existing life insurance or a new policy you are considering. |
IUL policyholders face the risk of losing money not only when the mirrored index declines but also when it moves sideways or experiences only marginal gains. These risks can derail your journey towards becoming a “safe money millionaire” or building “wealth beyond Wall Street.”
Numerous news reports have highlighted that premiums for many IUL policyholders have surged. The nature of IUL premiums is variable; they can climb over the tenure of your policy without any corresponding rise in benefits. Opting for a guaranteed level premium to avoid this fluctuation essentially contradicts the Wealth Beyond Wall Street concept, as it negates the flexible premium advantage.
Regulators across all states have recently required insurance companies to abandon the optimistic rates of return previously featured in their IUL illustrations, used to market IUL policies. Given the inherent uncertainty of future market performance, on which indexed universal life insurance heavily depends, this change underscores the unrealistic expectations set by such illustrations. Even more disheartening is that the revised, more conservative rates of return still surpass the actual growth rates experienced by policyholders.
IUL policies often show illustrations where guaranteed cash values plummet to zero before the insured’s expected lifespan, indicating a likely lapse of the policy or the need for increased premiums. This situation arises because the death benefits in all IUL policies are secured through renewable term insurance, the costs of which invariably rise over time.
We’ve identified 25 distinct risks associated with owning an IUL policy. These risks can lead to financial losses, policy forfeiture, increased tax liabilities, and restricted growth in cash value for the policy owner. Despite the appealing label of “Safe Money Millionaire,” these inherent risks of IUL ownership do not simply vanish.
To mitigate the effects of poor index performance, IUL contracts often feature a guaranteed interest rate. Insurance companies offering IUL have the flexibility to apply this interest at various intervals: annually, every 5 to 10 years, upon policy termination, or even post a death claim. This discretion to postpone interest crediting can be detrimental to the IUL policyholder, as delayed interest payments can hinder the beneficial impact of compounding, ultimately at the policy owner’s cost.
In a crucial measure, the insurance company employs a “cap” and a “participation rate” to regulate the extent of the mirrored index’s gains that are actually conveyed to the policy owner. This mechanism further exemplifies how Wealth Beyond Wall Street aligns more closely with wealth on Wall Street, by directly linking the policy’s performance to market limitations.
If an agent tries to sell you an IUL and “Wealth Beyond Wall Street,” you now know seven reasons you don’t want IUL.
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Why take on these seven risks? They don’t pave the way to genuine wealth beyond Wall Street or secure the status of a safe money millionaire. True financial security and legacy-building wealth come from strategies not tied to the stock market’s whims. It’s your finances, your future, your policy – shouldn’t you be in control?
At McFie Insurance, we advocate for well-structured whole life insurance policies as a cornerstone for retaining more of your earnings, enhancing your wealth, and achieving financial tranquility. We firmly believe that properly structured whole life insurance stands out as the optimal choice for cultivating wealth outside the Wall Street sphere.
Book a strategy session with us to navigate your life insurance needs effectively.
There’s a chance you might think you’re covered by a well-structured whole life insurance policy but actually hold an IUL policy. If you already have life insurance, we recommend undergoing an independent review with our team to fully grasp your policy’s details. Knowledge is power, especially timely knowledge, as time is not always on our side. Reach out to our office at 702-660-7000 to arrange your independent life insurance assessment.
Dr. Tomas P. McFie
Most Americans depend on Social Security for retirement income. Even when people think they’re saving money, taxes, fees, investment losses and market volatility take most of their money away. Tom McFie is the founder of McFie Insurance which helps people keep more of the money they make, so they can have financial peace of mind. His latest book, A Biblical Guide to Personal Finance, can be purchased here.
