Missed Fortune

  

            Missed Fortune is a book written by acclaimed financial author, Douglas Andrew. Douglas Andrew has written two versions of Missed Fortune.  Missed Fortune 101 is an abridged version of the original Missed Fortune.  Douglas Andrew has also written a recent book called Last Chance Millionaire which builds on the Missed Fortune concepts.

 

            Missed Fortune is a book about family financial planning concepts that gives people the means to maximize tax deductions, obtain tax free income, both pre and post retirement, and at the same time be passed to their heir’s tax free.

 

            Missed Fortune was a New York Times best seller in 2003. It has made a program that the affluent have used for years, into a program that the middle class can now use.

 

            Have you heard of the saying house rich and cash poor? A good example of being house rich and cash poor are my parents.  They worked hard to payoff their home and retire early.  My Father is a child of the depression, so the mantra  "don't hock the house", which means payoff the house and never borrow against the equity, held true. Banks can no longer take peoples homes from them in the fashion they did during the depression.  New laws have been enacted to protect consumers.   On the other side, the United States tax code has taken away many of our tax deductions.  Today the mortgage tax deduction is the single largest deduction for American homeowners.  Is paying off your mortgage the right thing to do? 

 

            Now that my parents property is free and clear, they have to pay Uncle Sam between $6,000 to $7,000 per year in taxes.  Why? Because they do not have enough tax deductions, namely the mortgage interest.  They will be owing taxes every single year for the rest of their lives.  

 

            Another scenario is one where a homeowner has a home valued at $400,000 and owes $150,000 and have a net household income of $160,000, chances are you are paying Uncle Sam a chunk of money come tax time as well.

 

            What can these borrowers do to stop paying these taxes?

 

            There is unused equity sitting in the $400,000 property, as shown above, that can be put to work for the homeowner in a safe manner.  It is money left on the table.  Missed Fortune strategies can greatly help these people by reducing taxes and creating tax free income at the same time.   

 

             I read a Yahoo News clip in December of 2007 that stated 55% of all Americans have less than $25,000 saved toward retirement and less than $10,000 in the bank.  A large segment of these people are baby boomers as well and they are unprepared for their retirement years.            

 

            American homeowners with less equity than illustrated above, can also take advantage of the Missed Fortune concepts.

 

            Most financial magazines and websites now say that paying off your mortgage early, isn’t wise since you are giving up your largest tax deduction, but they rarely give you a plan of action to fix the problem.

 

            Missed Fortune gives you an action plan.  The secret to the plan is the investment vehicle itself.  It is not a mutual fund, annuity, REIT or tax free bond fund.  It’s a properly structured MFTA, maximum funded tax advantaged life insurance product.  Most financial advisors are not licensed to sell or even heard of this product.  You have to know where to find it.  Financial advisors for the most part sell stocks and mutual funds, which when investing home equity, is too risky.  An MFTA, maximum funded tax advantaged life insurance product is a much safer plan since the funds are not tied directly into the stock market.  A properly licensed financial planner, not a financial advisor, will be able to give a more detailed explanation. At the end of this article I will disclose where to find a financial planner who practices the Missed Fortune plans, straight from the book. 

            

            For starters, on an IRA, 401k, or any other retirement plan, in general you have age restrictions you have to meet before you can access your funds without penalty and you must start taking money out by a certain age or you will be penalized as well.

 

            When you’re over 59.5 years old when you are able to take out IRA/ 401k funds without penalty, you will pay tax on those funds (non Roth IRA’s don’t’ apply).  Tax rates are going nowhere but up, you could be looking at 30-40% in taxes on each withdrawl from your non-Roth IRA funds.  Taxation on withdrawls of your investments will eat up the gains that your investments took years to attain.

 

            You also can not transfer most IRA’s and retirement accounts, when you pass away, to your heirs without Uncle Sam taxing the account 25-35%.

 

            Everywhere you look you and your investments get taxed.            

            

          Properly structured maximum funded tax advantaged life insurace contract products, MFTAs, cash values don’t get taxed as long as you stay within their limits and because you don’t experience taxes, you keep more of your money.  Even though you may earn 11% on your mutual fund, a 6 or 7% life insurance contract can be much more lucrative than the mutual fund in the end, because there isn’t any tax when you pull the money out, plus it is compounds interest, which the stock market can’t do.

 

            Your properly licensed financial planner will give you a detailed written plan to illustrate the numbers above prior to you signing on the dotted line.            

             

            So how does the middle class take advantage of this strategy?  Missed Fortune promotes taking a safe amount of idle equity out of your home, and strategically putting the money into the maximum funded insurance contract over a period of time (decided by you and your advisor). The shorter period of time you choose to feed the funds into the policy, the better, that way a greater amount of money can compound on itself quicker which makes the investment grow at a faster rate.  This way you increase your tax deduction, (mortgage interest from the higher loan balance) fund your retirement, and create tax free income for yourself, and/or your heirs without all the government strings attached.

 

            Taking equity out of your home to fund retirement?  Yes. It sounds irrational to some people, but we are maximizing the greatest tax deduction Uncle Sam hasn’t taken from us, mortgage interest deductibility.  Many times the homeowner has had the same loan for a long time and has built up equity, so their new payment doesn’t change very much. 

 

            Some people don’t want to touch their equity they’ve worked so hard to achieve, by paying down the balance in combination with  rising real estate market values.  But you must ask yourself, “ how much of a rate of return on my equity am I getting?”  You may have $50,000,  $100,000  or $250,000 in equity. But it has a net return of zero.  Just like a stock, you realize the gain when you sell the stock.  Equity is the same. It comes and it goes.  You only realize the gain in equity once you sell the property, or access the equity via a cash out refinance loan.            

 

            Missed Fortune promotes that your cash out refinance loan should be an interest only type.  You don’t want to give any more money to the bank than necessary by paying any principle.  Again I am conservative and a 30 year fixed rate loan with a 10 year interest only payment option is the safest loan.  After the 10^th year, the rate stays fixed, your payment will go up to make sure the loan will be paid off over the next 20 years.  At that point, you can choose to do another interest only loan, or keep the loan you have.  A 5 year or 7 year interest only term will give you a lower rate than the 30 year loan, but you will have to refinance again sooner than later to obtain another interest only payment. 

            

            I am a Mortgage Planner, I am more than just a loan officer.  I want to be of greater value to my clients and which means sharing ideas that will financially benefit them in both the short run and especially the long term.

 

I align myself with professional, seasoned people who are licensed to sell the Missed Fortune plans.  In fact my referral partner was personally trained by the author of Missed Fortune, Douglas Andrew.

 

            As with any investment, I advise all my clients to see the webinar (from your computer) or if you are local, go in person to the offered seminar.  It is well done, and I feel fortunate to be affiliated with honorable people who do the strategy straight from the Missed Fortune books and not stray away to other riskier investment products.

 

Also I encourage you to do your own research on the subject, compile a list of questions and concerns for your properly licensed financial planner.  Reading Missed Fortune or Missed Fortune 101 will also help prior to viewing the seminar, but it’s not required.

 

This is the safest investment available, with the least amount of taxation, and has all the family planning benefits all rolled into one.  If you find a plan better than this please let me know, I’m always shopping for a bargain!

 

If you would like further information on Missed Fortune and their seminars and webinars, please feel free to go to www.oganfinancialgroup.com.  Their website is well done and informative.  You can contact them by e-mail as well and they can send you a free DVD on Missed Fortune.  They do business nationwide.

 

When you contact them tell them Kevin Walton from Clarion Mortgage sent you.  Ask for Michael Voogd, he would be the trusted financial planner you want to speak with.  He has a wealth of knowledge and is pleasant to work with.

 

I believe as a Mortgage Planner, when I find a product that can improve my client’s lives both in the short and long term, it is my duty to share it.  Doing a loan for someone is nice, but making a difference in their life is much more satisfying and creates clients for life.