Help middle American families and watch your sales soar

By Lew Nason

Insurance Pro Shop

During the past two decades, many of the major companies have been moving to the more affluent markets. They appear to have forgotten whom they served and what made them the company they are today. According to LIMRA, this leaves the middle America marketplace wide open. And, in our opinion, it provides an exceptional opportunity for the financial adviser who learn how to help middle American families to find the money.

Understanding the problem
We believe that most middle American families have been at a distinct disadvantage in managing money and accumulating wealth. Most of the financial information being passed on by the major publications and financial experts is really geared towards people who are already wealthy. These are the people who have their basic necessities covered. They have built a strong "safe money" financial foundation, so they can afford to take risks with much of their other money.

Consider, wealthy people live in a different world. They are not concerned about qualifying for financial aid so their children can afford to go to college. They are not concerned about eliminating debt to improve their cash flow, so they can afford health insurance or put braces on Mary's teeth. They don't have to worry about whether there will be food on the table or a roof over their family’s head if something happens to them.

Solving the problem
You can help middle American families by providing them with the little known, unconventional strategies that the wealthy have used for decades to accumulate and hold onto their money. The wealthy were able to accumulate wealth not by taking risks, but by taking a portion of everything they earned and putting it to work for them. They understand that the road to wealth starts when you truly understand that part of what you earn is yours to keep.

The reason most middle American families continue to struggle today is because the conventional financial wisdom that has been passed on from generation to generation isn't designed to accumulate wealth. The conventional wisdom our great grandparents and grandparents learned was designed to protect their assets during the tough economic times of the Great Depression.

A change in philosophy
Most agents and advisers are taught to tell people they need to invest in (or buy) this or that by taking additional money out of their current budget. The problem is that many middle American families are only one or two paychecks away from going bankrupt. They don’t have any savings or even an emergency fund.

The American family’s financial turmoil
As detailed here, the average American family is in a serious financial position that leaves no room for financial problems and incorporates little planning for future financial needs. Meet the average American family.

retirement account. Their neighbors (the other 50 percent) only have $35,000 saved for retirement. The family has no mutual funds, stocks or bonds. The house is worth $160,000, but the family owes $95,000 on it to the bank. They make $43,000 a year, but can’t manage to pay off a $2,200 credit card balance.

The average American family’s finances, by the way, are in shambles. Forty percent of working Americans are not saving for retirement. Twenty-five percent have no savings at all — retirement or otherwise. The average household has $117,951 in debt. That’s enough to buy 7.5 2010 Honda Civics.

The combined amount of personal debt held by Americans is $2 trillion. This is approximately equal to the GDP of England. Twenty-four percent of workers have postponed their retirement age in the past year. Eighteen percent of people polled are very confident about having enough money for retirement.

According to Among Americans, 7.7 percent don’t have a bank account. While only 1.7 percent of Utah residents don’t have a bank account, 16.7 percent of Mississippi’s residents don’t have a bank account. Less than 40 percent of American adults have an emergency fund to fall back on in the event of some financial disaster.

Giant opportunity

There are now significantly fewer agents selling life insurance than there were 30 years ago. The March/April 2005 issue of the GAMA International Journal, a professional development journal for the insurance industry, reported the number of recruits entering the industry has declined 46 percent since 1975, reducing the number from 55,000 to 29,968. And with the average agent age at 56, this problem continues to escalate as these agents near retirement. Meanwhile, the industry is still looking for the next generation of life insurance agents to step forward.

Help middle American families
We need to help middle American families to find the money to:
  • Reduce or eliminate their consumer debt

  • Maximize the amount they can invest from current income

  • Reap the upside of the market, while guaranteeing the safety of their investment principal

  • Position their assets to increase your eligibility to qualify for college financial aid

  • Minimize their income taxes

  • Position their money to provide more current liquidity

  • Maximize their investment returns
And, in many cases, we can help them do it all without taking additional money out of their budget or changing their current lifestyle.

Watch your sales soar
Can you really make money helping middle American families? The answer is a resounding “yes” if you learn how to conduct a thorough fact-find and help these middle American families to establish their financial priorities and reposition their money to have the financial security they want and deserve.