A few years ago, Thomas W. Young, CLU, ChFC, saw a movie that reminded him of a situation he experiences as a financial advisor.
In the movie, vampires took over a major city and kidnapped its citizens, continually taking blood from the innocent people to feed themselves.
Why does this matter?
“When you fully understand lost opportunity cost, you can see that our current banking and taxation systems are doing something similar to what the vampires were doing in the movie,” said the 31-year MDRT member from Beaver, Pennsylvania, in his 2016 Annual Meeting presentation “The lifetime impact of lost opportunity costs.”
It’s important, Young continued, to explain the concept of lost opportunity costs, and how much money clients may lose throughout their lives as a result of inflation, taxes and interest they could have earned on taxes paid. In his presentation, Young talked about the value of dividend-paying whole life insurance, and various ways to use money more efficiently and avoid unnecessary costs. “If you are comparing one money strategy against another and you are not sharing with the client the concept of lost opportunity cost,” he said, “the numbers are false, and they will not bear out truth and accuracy.”
Hear more in the MDRT Presents episode:
Inflation and Dearness are increasing and Savings interests on Deposits are decreasing,When we are talking about yeild of our products in long term view,Tax benefits under 80 ccc and Tax free returns under 10/10 D, everything should be count and consider,These are erosions and rusting effects on your investments and so called insurance assets…So stock market oriented insurance plans are shield against all these erosions and works as antirusting agents..
Absolutely true.
Knowledge is of less or limited use, if not shared.
The Lost Opportunity Cost is an absolutely well thought off, hidden wealth eraser …
Thanks.