How Stress Affects Your Wallet

Worry and anxiety are probably the most operative words usable as descriptive vocabularies of the term stress. Do you have fear or anxiety clouding in any sphere of your life? Do you have professional or job-related stress? Concerns about your retirement? Anxiety about whatever’s in store for the coming year? Or concerns about your personal relationships with your friends, fiancé, or family members? All these worries and anxieties have a significant impact on your wallet. Stress can either bolster your financial wellbeing, or it can elicit an adverse outcome on your financial well-being depending on the context of the dilemma.

Positive impacts of stress on your financial wellbeing

An anxious mind tends to think about the possible solutions to the looming predicaments. Ergo, when you are stressed with bills in your house, the brain develops a scheme that will provide cheaper alternatives that are cost-cutting, hence more savings. The survival instincts that kick in when worry occupies can be very effective reality checks to your expenditure.
Stress gives you the motivation to work harder and earn more money. When you are concerned about your life after retirement, or about how you will provide for your children sufficiently, you become driven and strive to generate more income so as to be financially stable later on in life.
Negative impacts of stress on your financial wellbeing
Stress has a negative impact on your physical and mental well-being; the two key components of human productivity and hence ability to earn. The decreasing mental and physical health culminate to taking sick days off, lack of focus and hence reduced efficiency, quantity and quality of output, therefore, hurting your income.
Psychological conditions attributed to stress require either therapeutic intervention, or pharmacologic management, or both treatments. Treatment of these mental conditions is costly and can irreparably eat into your wallet.
Anxiety and other symptoms of depression also affect your level of productivity and ability to earn income. Depressive symptoms such as low self-esteem and poor grooming and hygiene reduce your confidence and interpersonal skills significantly leading to a reduction in your productivity and ability to achieve your full potential and earn income from the same.
Poor mental health impedes prudent decision making leading to impulsive expenditure and unsound financial management. These are detrimental to your overall financial being as they result in increased costs, missed opportunities for more income and wastage of dollars.
Stress can also lead to depressive tendencies, including self-deprecating behavior, especially overindulgence in addictive behaviours. Overindulgence entails high expenditure in unnecessary deeds, sometimes leading to addiction which attracts further costs.
Your concern over the prevailing conditions shows a lack of satisfaction hence the need for a better position or results. This stress emanates from the need to fit in, you may blow your hard earned money so as to appeal to a particular class and this can lead to accumulation of debts that are unhealthy. The desire to change the prevailing conditions can result in extravagant expenditures that are unsustainable at your level of income.

Online Forex Trading – A Way to Enter in the Biggest Financial Market

Amongst the many financial markets existing globally, the Forex market is the biggest of them all. The Forex market is where different currencies are exchanged against each other, with daily transactions often surpassing 4 trillion US dollars. The major participants in Forex markets are the central and commercial banks, hedge funds, and multi-national corporations. However, the Forex market is the easiest financial market to access as a retail trader, on a desktop computer or a mobile device and with only a small amount of investment capital. Unlike the ‘big players’, who invest millions in Forex trading, retail traders can get started with limited funds and without any previous trading experience. They just need to select a Forex broker, preferably from the regulated CFD brokers and make an initial deposit indicated in the trading account details. In our experience, regulated CFD brokers stipulate an opening balance of around $100 on a regular trading account, but the amount varies according to the account type and the benefits provided to customers. Nevertheless, there are Forex brokers for beginners, offering micro accounts with deposits from $1, giving novice traders the opportunity to ‘test the waters’ before taking the plunge with bigger investments and riskier trading positions.

Do Retail Forex Traders Need Huge Sums of Investment Capital to Trade?

If retail clients could invest only their own capital into trading Forex, the potential for making a worthwhile profit would be limited to very wealthy investors. However, the best Forex brokers offer marginal trading and leverage to their clients, as part of the online trading package. Leverage lets Forex traders control a larger amount of the market without putting up the full amount of capital. Usually, the amount of leverage accessible on the Forex trading platform, varies from 1:25 up to 1:500. Whilst we have seen regulated CFD brokers offering from 1:1000 up to 1:2000, trading at this ratio level can be very risky and should be avoided by inexperienced traders. Notably, the ratio of leverage offered may depend on the customer’s trading experience and type of trading account. The best Forex brokers often ask customers to prove their Forex trading understanding by taking a simple test on the website. The test results decide the initial leverage ratio, which may be increased as customers gain trading experience. Successful leveraged trades generate larger investment profits for traders than if they had traded using only the funds in their trading account.

Nevertheless, leveraged trading can ‘backfire’ when unsuccessful trades occur, as the potential losses are greatly amplified. Nevertheless, the best Forex brokers typically protect their customers from catastrophic losses by providing limiting features such as ‘Stop Loss’ settings and pre-set margin calls on the platform. In our experience, Forex brokers for beginners and regulated CFD brokers, are especially careful to integrate negative balance protection into their trading platforms.

Advantages of Trading Forex

The Forex market provides infinite trading opportunities to traders especially when markets are very volatile. Because Forex trading involves predicting price movements of currencies against each other, the depreciation of one currency means the appreciation of another. Moreover, global Forex markets are open 24 hours a day from Monday to Friday with the Asian, European and Asian market sessions following each other because of the different time zones. The best Forex brokers provide support during the entire time that markets are open. In our experience, Forex brokers for beginners and more experienced traders provide demo accounts for practice trading as well as educational training courses free on their websites. Importantly, regulated CFD brokers are often ECN brokers (electronic communication network) linking smaller investors with liquidity providers in Forex markets. ECN brokers don’t trade against their clients but are interested in their customers profits as they get commissions on those profits.

Automated Forex Trading

The best Forex brokers typically offer automated trading on their trading platforms. With financial markets affected by multiple variables, it’s very tiring for traders to sit at their desktops for hours on end trying to make sense of the Forex market. Automated trading is made possible by using Forex robots analyzing market movements and generating predictions through trading signals on the platform or even to traders’ mobile devices by SMS. Traders can decide to act on the signals themselves or use the signals to execute Forex trades automatically. Automated trading with signals is especially helpful for inexperienced traders and can potentially increase investment profits substantially

Understanding the Importance of Residual Income

This article is aimed at explaining the importance of building residual income and also to explain the need for individuals to leverage network marketing business model if their dreams are to gain financial and time freedom. So, even if you presently work a job or business, it is needful that you pay attention to network marketing so as to develop residual or passive income over time.

The commonest way that people define residual income is “income earned while sleeping”. Is it really possible to earn income while, all the while, you are asleep? This may sound strange to some people but, yes, it is possible.

The importance of residual income in a man’s life finds expressions in the statement of the billionaire investor, Warren Buffet, in which he stated that “if you don’t find a way to make money while you sleep, you will work till you die”.

Residual income is a concept that many ignore without understanding that their future well-being is dependent on it. And with what result? With damaging consequences.

By going to work every workday and receiving a salary at the end of the month, you’re simply exchanging time with money. Your salary is not residual. If your work stops, your income stops automatically.

Let me explain residual income with the following example.

Imagine two men in a village. Both have to walk a mile every day to a river to get water for their families. After a month, one man starts working on building an underground pipeline to connect the river to his house. For an entire year, he expends extra energy working on his pipeline. When he finishes, he has the source of the water directly to his house, while the other person continues to visit the river.

Residual income is like building a pipeline to connect water from the source to your house so that you don’t always have to go to the river.

In that short example, you will notice that it took some time for the pipeline to be constructed. But having done that, the man continued to enjoy water supply effortlessly.

However, the second man who failed to take the same initiative had to continue to visit the river for his water supply. What will happen if he becomes indisposed? He and his family will stay without water and suffer its consequences.

There exist many business initiatives that you can leverage in your effort to build residual income. But I do recommend network marketing, or MLM as some would like to call it, due to the fact that it doesn’t requre a tonne of investment capital to set up.

A lot has been said about network marketing by various network marketing professionals but many still feign ignorance about it.

The reasons people WON’T take a look at network marketing is NOT:

• because they don’t have the money.

• because the opportunity or business isn’t good.

• because they are worried about being scammed.

• because the profit margins aren’t high enough.

• because the demand for the product isn’t wide enough.

• because they need to ask their spouses first.

• because they need a night to sleep on it.

• because they need more time to research the company.

• because they need to get on the phone with you to join.

• because they have to ask other people on Facebook to see if you’re a good sponsor.

• because they need to see your bank account to prove the results.

• because they don’t believe in it.

The real reason they don’t join network marketing business opportunity is that they have been conditioned by society to be consumers of goods and not producers.

.They have been conditioned to buy “education” but not to buy knowledge.

.They have been conditioned to have a “job” but not to own a “business”.

.They have been conditioned to be workers but not to be their own bosses.

.They are non-thinkers instead of go getters

.They are intimidated by anything that challenges them.

That is what this is really about. It’s about people who are so afraid of learning, and stepping out of their comfort zones and being paralyzed by their fears.

It’s about being comfortable and caring what other people might think. It’s about their family thinking they are FAILURES if they do anything besides just having a JOB.

If you’re working presently, understand that you are only exchanging your time and effort for the pay cheque you receive at the end of the month. That’s okay though but by going to work every day, you are not building residual income which is the pipeline that will enable you to get water supply without having to go to the river.

3 Steps for Accountants to Balance Work and Home Life

Accounting practice is on a progress march, and while the hot topic of conversation is to work towards the complex advisory path, it might not be a suitable option for everyone. Embracing cloud technology has already turned the accounting landscape over its head, and has proven to be a performance booster. The popular use of smart accounting processes, like QuickBooks hosting solutions, has improved collaboration among team members.

While it is important to embrace the change and grab the opportunity to be successful on this path, your success is not defined only by your advisory journey. Identifying your strengths and working to add value to the community with your services is an essential task. Also, you might have found a specialization for you that has a potential to grow, even if its local. If you are comfortable with your current scenario, then it is great.

Work smarter, not harder – that is the key to improve your practice. No need to add on to your already piling workload this tax season if it will not help you professionally. Although cloud accounting and the ease of internet has made work more manageable, here are few steps to achieve the much coveted work-life balance.

1. Find an expertise

While it is good to be the “Jack of all trades, master of none”, it is not very practical in the accounting landscape. Yes, it is a lucrative idea to offer all kinds of services, but becoming an expert in one field and making your name for it offers another opportunity. Select one (or two) complex services to make your specialty and advise your clients on.

Many firms offer to do your taxes in the tax season — they promise to help save your money for a price. And, their marketing strategies to reach the target audience through radio and internet are taking the cake. Management is easier with cloud based QuickBooks. The thing to learn here is, know what your clients need and find your expertise.

How is this related to work-life balance? Well, a balanced work practice will resonate a balance home life. Thus, it is crucial to have a stable workflow that eliminates financial stress and provides satisfaction.

2. Create your clientele

Once you have made a foundation and discovered your niche, next is creating a client base. Be proactive in how you manage your client base, make your expertise your selling point. Target the type of clients you want, manage the messy ones, continue to acquire more — this is a certain way to ensure continuous growth of your revenue.

Another upcoming trend is to specialize in an industry, a vertical niche. A few firms do this, and they do it really well. For example, if you have many restaurants and cafes as clients, you can call yourself an expert for the restaurant business. This means you have a deep understanding of the work processes, budgets, and profits so that you can advise them for their business growth accordingly. Once you establish yourself as an expert in a particular area, people from that industry would prefer to be a client of your firm as you endorse better handling of their business process.

3. Priorities and Choices

It may seem difficult to achieve that work-life balance, with so much to be done and so little time. The primary thing is to clear your priorities. Do you really need another house? It is your choice to make your life smooth or keep it a constant struggle. Your priority must be to plan your life keeping in mind the daily activities and responsibilities — both at home and in the office — and weave your long-term goals in between. Financial trouble must not strain your daily life.

Achieving that sweet balance of work and home life is simple if you take the right steps toward effective management. Using modern technology like QuickBooks cloud hosting can save your time and money. Strategize your work processes and prioritize both home and work to get that balance.

Calling All Millennial Women: Your Finances Need You

In our last blog we discussed the results from the USB survey indicating the deferral of financial planning by women to their partners. If you recall, the highest demographic for this was millennial women. Millennials are famous for being an easy target for mockery but perhaps it’s time for the prior generations to help them pull up their bootstraps when it comes to financial planning.

Millennials are the fastest growing group in the workforce and are dealing with the challenges of graduating during a recession and the continued wage gap. Combine these factors with the likelihood of taking time away to have children and a longer lifespan, it’s more important than ever to master finances and long-term planning.

Another layer of complexity is that most millennials are raised by parents who live with high debt-ratios. Baby-boomers were raised with a fear of owing money and made a concentrated effort to avoid it and to pay it back as quickly as possible. The next generations were handed credit like candy and indulged. Learning by example may not be the best course of action, so we’ve compiled some advice for the up-and-coming.

  1. Spend Carefully. Along the same lines as “think before you speak”, think before you buy. Evaluate what long-term benefit that item is going to bring to you. When it comes to the nickel and dime type expenses such as your daily dose of fancy coffee, invest in a fancy espresso machine at home.
  2. Build an Escape Plan. Life often throws challenges our way and true power comes from being able to choose your own path. Having some cash squirrelled away allows you to make the choices which are right for you and prevent you from returning back to what was keeping you in debt.
    1. Set up an automatic deposit from your paycheck to an account which you are not able to easily access. That way you never had the money, so you can’t miss it.
    2. Funnel your wins. Instead of “treating” yourself with your birthday gifts, tax return or bonus, treat your future self by putting it into your savings account.
  3. Manage Your Debt. You’ve grown up in an era of credit and debts from student loans to car loans to credit cards. Make a list of all you owe and the corresponding interest rates. This will enable you to prioritize which debts you want to pay off the quickest. High-interest debts should be the first target to stop the cycle of handing your money to an institution.
  4. Save for Your Future. It’s hard to look that far forward when you’re in your 20′s, but imagine the freedom of being able to live your life your way when you’re older. With a few sacrifices, you can save now and play later.

Why People Rarely Get Rich Quick

The world seems like a huge ball full of endless opportunities to get rich but still millions, if not billions, of people are stuck in poverty. While some cases may be argued as sheer bad luck or misfortune, most people are simply not becoming rich because of various factors that will be highlighted.

Most people don’t become rich quick because of the failure to balance the paradoxical process that is full of contradictions, requiring a strategic balance of the various elements.

They never plan
Without a plan, and without sticking to the plan, becoming rich becomes a moving target or a wild goose chase. Most people do not become rich quick because they just lack the plan to take them there. Whereas plans can be subjected to turbulence, they provide goals and contingent approaches of achieving these goals or salvaging the entire venture if things become unbearable. Without a plan, and without goals, nothing can ever be accomplished, and you will keep on starting all over again every other time.
They procrastinate
The best time to start acting on your plans is now. Most people, however, postpone their plans until it all remains as a thought that can never be actualized. Without starting, you can never know the challenges and neither can you come across the opportunities and hence becoming rich for these people is also postponed.
They never invest
We have all heard of hardworking employees who retire without a penny in their retirement accounts and have to continue working for their daily sustenance in their retirement ages. It becomes impossible to get rich if you only depend on one stream of income known as linear income. Linear income requires that you get a job done for the payment to be effected and hence without working, there is no stream of money. On the other hand, passive income is the money earned from investments that give a return without you having to step in the office. Passive income is the equivalent of making your money to work for you as opposed to you working for the money. Most people will keep on laboring but will not experience their financial breakthrough because they do not make investments that will enable their money work for them.
They lack intent
Intent is masked in several facets including ambition, accountability, and responsibility among others. The process of becoming rich is an intentional journey that must be followed to fruition. It means that you will take responsibility and remain accountable to yourself, and even when faced with obstacles, your ambition will drive you through up to the realization of your goal. This requires a balance between courage and foolishness, and patients and grabbing opportunities. Most people who do not become rich quick simply lack the ability to persevere and exercise restraint while others exercise restraint and perseverance enough till they miss the chance or get ‘burnt.’

Top Three Things You Should Do After Winning the Lottery

Winning the lottery can be a very overwhelming experience, especially if you are dealing with millions of dollars in earnings. Being handed over that kind money will naturally tempt you to splurge on all the things you’ve missed before because of your lower financial capacity. You might immediately go on a shopping spree, series of travels, handing some of your winnings to others, and so on.

Sure, there’s nothing wrong about pampering yourself with your well-deserved reward or sharing it with someone. However, remember that the cash you got after winning the lottery will eventually run out. Just look at the celebrities right now who used to earn millions but were forced to file for bankruptcy because of bad spending habits. Therefore, you should make the most out of your lottery earnings by using it wisely.

Here are the top three things that you should prioritize after winning the lottery:

1. Pay Your Taxes

If your winnings is taxable, be sure not to neglect your obligation to the government in order to avoid penalties or being on the receiving end of a suit. Consult an accountant who will help you understand your options and aid you with all the paperwork associated with filing your taxes.

Normally, you can select whether to get your money in a lump sum or in installments. Getting all your cash winnings right away will require you to cough up nearly 40% of all your duties. If you want to control your spending, you can also choose to get it in the form of an annuity, which will let you pay your taxes after winning the lottery gradually.

The bad side of the latter though is that taxes are subject to adjustments, so you might end up paying more than what you are supposed to back when you won the jackpot. This is the reason why you need an accountant to explain the benefits and repercussions of your choice.

2. Settle Your Debts

Debts can bubble out of control when left unchecked. If possible, pay all of them before they incur more interest. This will be a great time for you to repair your credit score if you used to have a bad credit report prior to winning the lottery.

Having a good credit history will put you on a good standing with financial institutions and to every transaction that you will have to deal with. Be sure not to miss out on this opportunity.

3. Invest Your Money

Make your money earn by investing it. However, you have to do this in a right way. You can deposit your winnings in a bank for it to earn interest. You can also put some of it in bonds, stocks, mutual funds, insurance, and others.

Hire a lawyer and financial adviser from a reputable firm to help you manage your money properly. They can explain to you the pros and cons of each mentioned investment options as well as guide you along the way should you have any concerns regarding your decision later.

Priorities First

Be sure not to miss out on any of these after you have won the lottery. Keep a balance between enjoying the fruits of your prize and keeping some of them to ensure your financial security, so that whatever happens, you and your family will always have a backup.

Giancarlo C. Perlas is a professional freelance article writer working for various companies and clients. He is an expert in writing web contents, SEO articles, news articles, product reviews and other tasks related to writing. He also specializes in providing consultancy services in the promotion of various projects and businesses.

Reasons to Go Cashless and Ditch Paper Money

More and more people are leaving their cash in the bank and using their credit or debit cards for everything. In other words, paper forms of currency are out and digital payments are in. But, are cashless transactions feasible and practical? The answer is definitely yes. Here are a few reasons why going cashless is a great idea.

Convenience: You can shop, dine out, gas up and pay for your Uber with one small, lightweight card. Consumers and businesses all benefit from the speed and convenience of electronic and digital payments.

Security: Carrying cash makes you susceptible to robbery and cash is 100% gone and untraceable. If you carry a debit card it is replaceable and any fraudulent activity is refundable. So, transitioning to cashless payment options enhances security and reduces risk. Utilizing cards keeps your money secured.

The use of EMV chip technology assures your account information is protected and your hard earned money is safe from unauthorized use. And, if for some reason your cards are lost or stole you can always have them blocked and replaced.

Going Cashless creates a disciplined spender: Paying with cards gives you a record of all your transaction, allowing you to monitor your spending. Using a debit card can also prevent debt because you are only spending what you have in your bank account.

You Always Have Exact Change: How many times have you paid cash for an item that costs $5.02 with $6 and get.98 cents back. Now all you hear is that jingling in your pocket. If you had used a card, you wouldn’t have this very annoying problem.

Accumulate Rewards: Using cards can help you save money in different ways. For example, a cash back credit card will give you rebates on all your purchases with no caps or minimums. What about a card that gives you rebates while feasting with your friends or shopping for clothes, shoes or misc. items online. Who doesn’t like rewards? Card companies are always finding different ways to reward their customers for using their cards, so why not reap the benefits!

Discounts: Many merchants (online and offline) offer discounts ranging between 2 – 20% for using a cashless form of payment.

Makes It Difficult To Borrow Money: With little or no cash in your pocket, it is very difficult to lend money to those people who probably conveniently forget that they even borrowed it.

Do You Know How Dirty Money Is? From a hygiene point of view, money is absolutely filthy. Do you know what nasty stuff can accumulate on a dollar bill after several years in circulation?

Buy Now Pay Later: The arrival of credit cards that allow you to pay after 50-55 days without any interest payment is something that cash doesn’t offer. This is a blessing for people that run down their bank account balances.

Lastly, It’s Green: Using cashless modes of payments helps in maintaining bills and records electronically which in turn saves paper and thus saves a lot of trees.

Basics of Revenue Recognition Audits

Revenue Recognition accounting is a process that depicts how sales transactions are recorded by a company in financial statements. While recording revenue, companies are mandated to comply with Generally Accepted Accounting Principles (GAAP). As per GAAP, in order to book a sale as revenue, the revenue should be recognized initially. Consequently, for a revenue to get recognized, it should be Earned and Realizable Revenue.

It reviews the accounting techniques of revenue recognition that are adopted by a company. This audit thus assures that the recorded information is compliant with National Accounting Standards which stand mandatory for a firm.

Revenue Recognition Audit procedures:

For a successful Revenue Recognition Auditing process, Planning is a key element. This process thus initiates with analyses of revenue recognition policies and techniques of a company. Thus ensuring the company’s compliance with the desired audit procedures. After satisfying their doubts, the auditing comes to the second level that involves the analyses of contracts of that year. Material Contracts are then separated from the lot. Auditors invest their time to test whether those contracts are recognized aptly. Along with this, they ensure that the financial statement contains receivable and deferred accounts. Besides reviewing the Material Contracts, auditors also pay heed to the one which is not material to ensure that even they recognize the revenue aptly.

Important Aspects of Revenue Recognition Audit:

Reviewing General Ledger:

When an Auditor/Accountant analyzes a General Ledger it provides them with a lot of substantive evidence and thus initiates lesser procedural tests. General Ledger is reviewed to have knowledge as to how the sales are recorded in that particular firm. The information that concerns Revenue Recognition Audit includes the sold goods, the date when it was delivered and the mode of payment used to do so. It ensures that General Ledger is in accordance with the actual sale transactions of the firm. While auditing, even the Revenue Recognition Policies of a company can also be considered.

Analysing the Financial Statements:

For a detailed overview of the company’s finances, auditors look out for financial statement of an organization. Then a comparison follows between General Ledger and the statement deduced, to look out for dissimilarity that exists. Auditors are well acknowledged about the importance of financial statement; as the stakeholders evaluate a firm by the information provided by that.

Combating Risks in Receivable Accounts:

Accounts of high-profit sales of a firm can be studied by an auditor in Receivable Accounts. The information mentioned by them is cross-checked by the auditors with the original sale invoices. Primary risk that exists is that the net receivables might be overstated, because either receivable have been overstated, or the allowance for uncollectible accounts has been understated. Revenue Recognition Audit ensures that the company’s account balance mentioned is legitimate.

Accrued/Deferred Revenue:

While recording revenue, firms may incorporate accrual or deferrals. Auditors stay skeptical regarding accruals and deferrals to ensure that the real transactions are mentioned and do not contain wrong invoices.

What are the Prerequisites for a Revenue Recognition auditor?

An Auditor is required to have complete knowledge of complications prevailing in revenue recognition’s auditing and accounting. Active participation of employees should be fostered by the auditors for smooth auditing.

Internal control in an organization is a continuous process to collect, analyze and update information during an audit. Thus mandating internal control; as the responsibility of an auditor. An Auditor then evaluates the appropriateness of finances.

The Secret Legacy Behind “Buy Term and Invest the Difference”

In 1965, A.L. Williams died of a heart attack. He had a whole life policy, but it left the remaining Williams clan underinsured. This left an impression on his son, Art L. Williams, Jr, whose cousin later introduced him to the concept of term life insurance, which was relatively unknown at the time and provided much more in face value at cheaper rates.

Fueled by the financial hardship his family had endured, Art launched himself into an ambassadorship of term life with an almost religious fervor. He coined the phrase “Buy term and invest the difference”, BTID for short, launched a new company on the concept, had some 200k agents under his umbrella, and the rest is history.

Or is it?

Some 40 years later, a study published in the May 2015 issue of Journal of Financial Service Professionals indicates that Williams’s grand experiment had unintended consequences for families. “People don’t buy term and invest the difference”, said David F. Babbel, the study’s co-author. “They most likely rent the term, lapse it, and spend the difference”, leaving many families uninsured instead of simply underinsured when a loved one passes.

Even the small percentage of people who do fully execute Art’s advice and invest the difference may invest emotionally in the market by buying high and selling low, or buy managed investments without realizing the potential impact of associated fees to their nest egg. People who think they are playing it safe by overfunding a 401k beyond the amount an employer matches often don’t consider that, if the management fee is 3%, they must make a 3% return each and every year to break even and protect their principle.

Supposing everyone who bought term actually did invest the difference wisely, whole life still offers advantages that BTID doesn’t. Whole life locks in insurability, allowing the insured to purchase additional coverage with accumulated cash value, even if their health has declined to the point that they are no longer able to buy new policies. Further, they can borrow against the cash value, convert it into guaranteed income, or take tax-free distributions.

Chris Blunt, executive vice president of New York Life, points out the value of BTID to the investment firms, says “Generations of Wall Street professionals have been trained by their firms to trash cash value life insurance so the investment firms could maintain those dollars under management.” He also points out that there’s no need to decide between term and permanent life insurance. Young families can purchase both, and convert the term to whole life as their income increases.

Art Williams’ legacy consists of overpriced term-only options and a drastically reduced pool of agents who, like the Wall Streeters mentioned by Mr. Blunt, push only one product and openly disparage every other option available to their prospects, calling cash value insurance “trash value” and an “awful product” and touting BTID as the only solution for everyone. The 40-year look back on this way of selling life insurance detailed in this study doesn’t support these claims. America’s families deserve more in terms of both options and advice.