You are searching about What Does Mutually Exclusive Mean In Math, today we will share with you article about What Does Mutually Exclusive Mean In Math was compiled and edited by our team from many sources on the internet. Hope this article on the topic What Does Mutually Exclusive Mean In Math is useful to you.
Don’t Be Taken Advantage Of Financially In Networking Groups!
I am sick and tired of seeing people get taken advantage of in the financial services industry. After some particularly heinous things have happened within my network affecting people I care about, I’ve decided to write a bit that might serve as an educational guide for those getting financial advice. You can use these pointers below to know what drives the sales, what common tactics and tricks are used as well as some completely illegal scams that have been happening in great amounts through networks just like this.
What follows are some little-known industry secrets and sales tactics for you to be aware of.
How commissions work for life insurance and investments
Let’s talk about why some people get into this field for the wrong reasons, and some of the ways people convince you to let them hold all your retirement assets who have no business being anywhere near them. It starts with one word: commissions.
These can be glitzy, glittery and enormous. Oftentimes they pay “trails” in which a small percentage is kicked back to the Advisor each year that you stay in that investment. Sometimes depending on the product, the company pays this to the Advisor, and it can be a normal way that the Advisor gets paid. Other times it is taken directly out of the initial investment to buy-in to an investment such as for A-shares of mutual funds and commissions on stocks or bonds. If this is the case, they should always be clearly disclosed.
There have been several times in which I was working with new clients and they had never been told by their previous Advisor how much they were paying for the investments they were in. Sometimes we found out some very bad news, and an imminent change was necessary. Sometimes they had industrial shares and the cost was so low I couldn’t compete, and would recommend the client to stay in those investments, provided it fit their goals and risk tolerances. But having an Advisor that can show you an array of options, and be able to clearly state what your costs are, is an important indication in choosing a person to work with. Any honest Advisor with the proper education and mind for numbers should be able to clearly show you WHY they are recommending a certain investment. And it should fit your goals, timeline, risk tolerance – AND be the best value with best performance after fees are taken into account. Sadly, I have yet to see many people take this into account.
I was speaking with an “Advisor” at another questionable firm recently and asked him about the differences in cost between several life insurance cash value policies he’d been selling for a year. The answer was a laugh and “it’s none of our concern, the client is the one paying it”. He had no idea what the cost was to the client, and yet this is basic math and available on all disclosure documents one is mandated by law to give the client. The cost will come into play when calculating how much you can expect to be earning, and if this isn’t accounted for in your projections, your whole retirement plan could be completely off. This particular salesperson DID, however, know the commission he would receive, and could calculate that within seconds. There are quite a few companies that hand out luxury vacations, bonuses, promotions, fur coats, fancy watches, you name it, and this is based on COMMISSIONS.
There are also firms in which the salespeople might be on salaries and not receive commissions, but they will be unable to be promoted, obtain raises, or they could even be threatened with being fired if they don’t make a certain number of sales. Are you starting to see the potential for a conflict of interest here? Don’t be afraid to ask your Advisor how they are paid and make sure that you are satisfied with the answer. Some people are salaried, others on commission or a combination, others are a fee-for-service in which they get a flat fee from you for research, planning and recommendations only, and they do not receive any commissions regardless of what they recommend. Otherwise someone could pitch you an impassioned plea about how some investment will save your whole portfolio, but they will be internally salivating at the thought of going to the Bahamas on the company’s dime if they hit a certain number for the current month!
Red Flag – your “Advisor” is just a salesperson if they can’t tell you all the costs to you for each investment, and cannot make an educated financial plan for you taking this into account. A good Advisor will be able to manifest WHY they are recommending a certain product for you and WHY it is a good fit for your specific needs and risk tolerance. The reasoning should not be “this is a really awesome fund and they always have really high returns” (NOT something anyone can guarantee!).
“We go to church together, you can trust me, I’m a good Christian boy!”
This is my personal pet peeve, and is actually a common fraud technique. The recent CFE conference in Dallas dedicated quite a bit of time to this common practice. Playing up an affinity network is one of the BEST ways to get clients, we are all told in sales training. While it might be fine and dandy when you’re volunteering at a soup kitchen to pitch what you do, there are unfortunately many people that make an action plan out of “prospecting for clients” at church. Yes, you read that correctly. Now if you go to church with someone you know and trust, and seek them out for their professional services because of your relationship with them, that’s your choice. But BEWARE the person who goes to church with you and then starts giving you the full court press of using their services.
Some of the most monetarily successful salespeople I know utilize this technique heavily. And I’m sad to say I’ve had to report one financial firm this year to the State Insurance Commissioner and FINRA for nearly all the violations and manipulations listed in these blogs, and they are a self-proclaimed “Christian” company. Some of the worst case studies we read of fraudulent activity had “Faith-based company” emblazoned all over the website and business cards. Do not ever let your guard down, and always ask questions. If you’re getting “sold” rather than properly advised and educated, seek a second opinion.
Furthermore, regarding affinity networks, there have been a set of people within the job seeker network I volunteer at, who have been contacting people using the organizer’s name as a referral when they in fact did not endorse them. People often borrow the reputation of others in this industry so check with the references on how well they know this person and their experience before trusting anyone too much.
There have been cases of these salespeople going to the job seeker networks to meet people, ask how they can help them in their job search and offer to meet up for coffee. When an unsuspecting job seeker arrives they don’t receive any actual help in their job search, they get the low-budget PowerPoint presentation on taking out a mortgage and putting everything into life insurance, complete with scare tactics about taxes and stock market performance. Sometimes these are drawn on napkins as examples. “See here’s what all your money will do, it will GROW!” (draws a big arrow skyward, there is no x or y axis in sight… ) I worked on Wall Street and I can definitively say that proper financial planning is made on REAL graphs and Monte Carlo simulations. Not napkins.
How to choose an Advisor
When you choose someone, you need to understand that the job title “Financial Planner/Advisor/Wealth Advisor” can sometimes be very loosely applied, unlike the situation in which few people earn the job title “chemical engineer” without having a degree in a related field. Sometimes people with a very large network of friends, relatives, and acquaintances might start a second career in retirement after doing something completely unrelated, like selling swimming pools for example, and can suddenly have the “financial planner” title without so much as a high school degree. Then they simply convince all their network and friends to buy in. Not that this means a person like this won’t do a good job in certain areas, they might be a great SALESperson. However, it does mean you might want to do some research as to their background and education.
Obviously you want someone who is properly licensed. If they’re talking about financial planning and investments and making recommendations, they legally need to have a series 7 license and not just a life insurance license. The series 7 is a brutal and intense test, and you have to be sponsored by a brokerage, have errors and omission insurance, and continuing education. I cannot understate the difficulty and expense of this and the series 63,65 of 66 (combination of the 63 and 65) tests and upkeep. Furthermore you can do a ‘broker check’ on FINRA to see if your licensed Advisor has had any complaints on their record. The basic assumption in the industry is that if you can fog a mirror in some states, you can get an insurance license to sell life/health insurance.
So if your financial “Planner” or “Advisor” is only licensed to sell life insurance, you might want to ask how they are qualified to be making recommendations for all of your retirement investments. I’m not trying to be excessively snobby, and these are not mutually exclusive. For example an insurance salesperson could have a degree in finance or certifications and training in retirement projections. However, the overwhelming financial plans that I see insurance salespeople present coincidentally involve the “put every cent you have into my fine insurance policy” strategy… and the next section focuses on commissions involved in that.
One of the biggest myths I run into in the hundreds of client appointments I have had, is that knowing about Finance and Investments is an innate trait that all people, especially men, naturally know all about just by reading the investments section of the paper. Nothing could be further from the truth. It’s like saying that since I read a medical journal, I can now effectively self-diagnose myself for autoimmune conditions and prescribe medications. Without appropriate education you can sometimes get lucky by gambling in the stock market, but it’s most certainly NOT the safest and most intelligent way to go about working with your nest egg for the rest of your life. I repeat myself: NO ONE NATURALLY JUST KNOWS ABOUT FINANCE. You MUST be educated in it through either company training, a degree, or advanced certifications like the CFP, AAMS, ChFC, CLU, CDFA, CFA, CRIP, etc. These are not cheap and often take a few years to complete. It manifests that whoever you choose to be your Advisor has sacrificed their time and income to obtain them. Furthermore, having these credentials means that they must be kept current through continuing education. Make sure that whoever is handling your retirement funds has something to show that they can professionally specialize in this field, and managing portfolios. This is different from someone who was good at selling pools and wants to try selling something else. A good salesman does not a good Advisor make.
Pandering to emotion to sell products
Salespeople are coached in dramatic ways to be able to sell more and make the company money. One thing that salespeople are force-fed is that certain things are an “emotional” sale. I don’t believe that this is an ethical way to approach financial planning. When it comes to life insurance, there are ways of presenting it that don’t stoop to illogical and fallacious arguments or examples, but simply focus on needs.
For example, a good planning session can calculate how much would be needed to sustain your family if something were to happen to you. Things such as mortgage payoff, debt payments, educational savings for children, child support and income replacement should be carefully taken into account to make sure that the family can survive in case something happens to someone. However, there are some unethical people out there that put Broadway actors to shame in the pleading and dramatic emotions they try to elicit.
“Imagine your wife struggling to make ends meet and becoming a lot lizard to pay the mortgage!”
“What if your daughter has to pole-dance to afford college?”
“How will you feel paying the bill each month for your child’s funeral?”
These are all real quotes I have heard salespeople state. A real Advisor should talk to you in a professional manner and not make low-budget-local-news-style headlines to frighten you into getting a policy. Yes, insurance is an important component to your total financial plan, but your need depends on your unique situation. How many kids you have, how much liquid assets you have, how much debt and who makes the money in the family and how much apiece, for example. There are sophisticated reports to find the sweet spot for you without the emotional pleas that I’ve heard so much in this industry. It doesn’t have to win a Tony award to get you to move forward with it, it should make sense WITHOUT manipulation.
TAX RATES WILL GO UP!
I know EXACTLY what is going to happen in the market!
No true Advisor will be able to make guarantees to you about what will happen in the future to the market, tax brackets, or performance of non-guaranteed investments. In fact, Advisors are usually barred from using the “g-word” (guaranteed). The correct phrase is usually “backed by the full faith and credit of [insert insurance company/municipality here]”. For example, if the insurance company goes under and has no insurance for its business you are completely out of luck. This is why researching the credit rating of the insurance company offering an annuity or policy is important. Also shopping around is a good idea. The companies with higher payouts might pay them because they are newer companies, or perhaps they are not a strong company with high ratings. Take all this into account and your Advisor should be doing this for you before presenting options to you.
We’ve established that literally no one has a crystal ball or knows what will happen to the market, correct? Feel free to provide me with an example of someone who can consistently “beat the market” anytime, and I’d love to see it. NO ONE can consistently beat the market. Someone may get lucky with a guess here and there, or someone with insider trading knowledge could break a bunch of FINRA and SEC laws to “beat the market”, but absolutely no one knows what exactly is going to happen to the market. The best we can do is make educated decisions through research and information. If someone claims to be able to “time the market”, “beat the market” or anything like that, run in the other direction.
Tax rates – many people are speculating that an administration in the future might need to raise taxes depending on circumstances in the future. However, NO ONE can say what tax rates are going to do definitively. There’s a common scam out there by people selling insurance in which they have a pathetic PowerPoint delivering a jumbled message that tax rates WILL GO UP IMMEDIATELY and therefore you should put all your entire retirement savings in LIFE INSURANCE (because the commission they would get on this would be enormous; around $60k). They don’t care if this means that your money might be inaccessible, there would be huge fees associated with accessing it, you would have to take a loan at interest to obtain it, or only a certain amount of the total might be available to you (Depending on the company and type of policy, these could vary). They don’t care that for a policy that large you might need to manage the policy each year to avoid a Modified Endowment Contract (if you put too much in at the wrong time you would be assessed a huge fee and owe taxes to the IRS, and this requires careful planning to avoid), they also don’t care that for a contract that big you might be signing on for incredibly large monthly payments to keep the policy active ($800/month or more if you’re not an ultra-marathoner). They don’t take into account how that affects your plan for retirement. Again they’re only worried about getting that commission and moving on to the next person. Also, Financial Advisors that do not possess a CPA or are licensed Tax Advisors cannot legally provide tax advice nor hold themselves out as Tax Advisors. We can work with your Tax Advisor and discuss how different investments are treated regarding taxes, but going farther than this violates several serious regulations. Beware the former pool salesperson who can handle your taxes and investments without any prior experience or education!
In conclusion – anyone making predictions about future market conditions and tax brackets as an absolute had damn well better have a crystal ball and a fabulous gypsy outfit on. Otherwise it’s illegal to make these statements while holding yourself out to the public as a licensed Advisor.
Finding money you didn’t know you were losing through paying off your house too fast.
I don’t know where to start on this ridiculous tactic. There have been some scammers around with a low-budget power point aimed at convincing you that you’re unnecessarily making “wealth transfers” (Doesn’t that sound ominous?) of money that you didn’t know you had. They promise that they can go through your finances and find a way to uncover thousands of dollars in unnecessary spending WITHOUT your spending any less on your lifestyle! Sounds too good to be true, right? Guess where this is going…
Here’s how it will go: a real Advisor will carefully go over your budget and spending with you to see if there are unnecessary items that can be cut (gym memberships you never use, eating every meal out, buying 5 lattes a day on a credit card, etc.) and then looking at the big picture with you so that you can understand where your spending is in relation to your income. There’s no way that you can keep spending more than you earn and think that you’re going to be successful financially, and that’s the cold hard truth. You MUST live within your means. I’ve had to put people on a budget that make over $300k/yr. because they were spending themselves on a path to destruction. I’ve taken far too many calls from people in their eighties that are struggling to pay the power bill and medical costs with their retail job and social security. As far as worst-case scenarios I have enough examples of real life suffering to fill a novel, so more on that another time, but you get the picture.
However, these salespeople won’t do take the time to tell you the truth if you are spending outside your means. They’ll only look at what they are licensed to sell to make more sales. Too much on Medicare Supplement Plans? Hey they’re licensed for that! Too much on your current life insurance? They sell that too! Now don’t get me wrong, shopping around every year to make sure you’re not overpaying for a uniform service is a good thing. But you can do that yourself and you can do it by checking with several other companies. There might be a chance people like I mentioned could have a lower price/better product for you. But retain some skepticism, because they’re still getting commissions on all this. Here’s where it really gets scandalous, however…
Unless you had enough spare cash laying around to pay for your house in full, you most likely have a mortgage. When you do your taxes, you usually get a deduction for having a mortgage. That’s it, and everyone does it. These scammers take this to new levels by exaggerating how much that tax deduction really is and recommend that you either refinance your home to have a much longer mortgage (keep in mind that you will pay interest over the time of the loan on the value of the house all over again, and the amount paid over time can sometimes be double or more the initial cost of the house) so that you can get this glittery deduction. Now – for a small slice of society, this move could make sense. But a lot goes into this. For example – your income, your retirement savings so far, how much discretionary income you have after all monthly bills, your total debt already, how long you have until retirement, how many children you have and how much they need for school, and your TAX BRACKET. For all of these to come together perfectly to make it worth spending double the cost of your house over time with all the interest, it would be for a very specific person and situation. I have yet to see a cost/benefit analysis of this situation that can prove that it is worth it for every single person. So while this might work for a few people, salespeople will then claim that you need to refinance your home entirely and put the ENTIRE AMOUNT INTO A LIFE INSURANCE POLICY.
That’s right. Remember the accessibility issues? Did they talk to you about how much you had in an emergency fund? Did they examine your spending and have a plan in place in case of job loss, untimely death of a spouse, medical bills or other emergencies? Did they make sure that by refinancing a nearly paid-off house when close to retirement, you would have enough retirement income to be able to pay a mortgage for another 30 years as well as increased medical costs and long term care later in life? If you have millions of dollars in the bank maybe you can afford to do this, but for the average American household, which by the way a recent survey found cannot handle a $400 unforeseen expense in a month, most likely will not be able to withstand additional mortgage payments and money locked up in a life insurance policy or annuity.
Now, why do you think these people would recommend you take a chunk the size of $300k and put it ALLLLLLLLL into a life insurance policy? Do you think commissions on that would play a role in their advice? Commissions of $60k?
In conclusion, this strategy might work for a few select types of people, such as those who are already in a high tax bracket, and are extremely wealthy. If you’re satisfied that your advisor went through every possible scenario when creating this plan as mentioned above (emergency fund, detailed budget planning, spending analysis, adequate retirement funds, diversified and appropriate portfolio, guaranteed income options, family continuation planning, estate planning, life insurance for spouses and long term care) and you can definitively prove that this strategy saves you more than you spend, congratulations. However, that’s not usually the case statistically. So ask questions and ensure that if you go through with something like this you have exhausted ALL scenarios and are sure of all costs to you. DO NOT let someone with a really passionate presentation and PowerPoint convince you that this is right for you while they salivate thinking about those commissions they’ll earn. A passionate argument does not equal a logical one.
“Just because you’re saying.. [something] louder and more relentlessly does not make it true” – Sam Harris, Author
I hope that this is helpful to at least one person out there, I encourage you to be critical and take your time when choosing where/how to invest your life savings. I’ll be writing additional posts on high-pressure sales and other topics. Please reach out if you have a specific question or something you would like to see a post about.
Disclaimer – The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice that will be specific to your needs and financial situation.
Video about What Does Mutually Exclusive Mean In Math
You can see more content about What Does Mutually Exclusive Mean In Math on our youtube channel: Click Here
Question about What Does Mutually Exclusive Mean In Math
If you have any questions about What Does Mutually Exclusive Mean In Math, please let us know, all your questions or suggestions will help us improve in the following articles!
The article What Does Mutually Exclusive Mean In Math was compiled by me and my team from many sources. If you find the article What Does Mutually Exclusive Mean In Math helpful to you, please support the team Like or Share!
Rate Articles What Does Mutually Exclusive Mean In Math
Rate: 4-5 stars
Search keywords What Does Mutually Exclusive Mean In Math
What Does Mutually Exclusive Mean In Math
way What Does Mutually Exclusive Mean In Math
tutorial What Does Mutually Exclusive Mean In Math
What Does Mutually Exclusive Mean In Math free
#Dont #Advantage #Financially #Networking #Groups