If it sounds too good to be true…

If it sounds too good to be true…

One of the more charming aspects of our business is answering questions that involve some financial product or scheme that purports untold riches or eliminates some great fear like losing half of your 401k or other investment.

As a former life insurance and commercial real estate salesperson with extensive sales training, it’s a little easier to spot the “come on”, but what about most people?

I’ve now developed the 4 questions I want every client or prospect to ask before they send me an email to gain my approval for the latest “idea”.

  1. What condition/situation am I solving with this product or scheme?
  1. Did I see this condition/situation before I was approached? If not, why not?
  1. What does it really cost and what is the risk I’m not seeing?
  1. What other alternatives are there for solving the same problem?

My goal is that by the time you finish getting the answer to the fourth question you will recognize when the buyer (you) is liable to get less than the salesperson and/or entity creating this product/scheme.

So what are those products/schemes that you see most often, you say? Here is a short list of items that frequently fall into the too good to be true category:

  1. Equity indexed annuities (variable annuities)
  2. Equity indexed life insurance (variable life insurance)
  3. Non publicly traded REITs (Real Estate Investment Trust)
  4. Life insurance pension plan (overfunded permanent life insurance )
  5. Stranger-orientated life insurance
  6. Good deal and everyone is doing it (in your social group) using words like “guaranteed” with rates/returns way beyond current normal

In most cases, just Googling the product/scheme will tell you if others are questioning the idea. Can’t find or understand the results. Send us an email.

We like to answer questions!

Jim Ludwick
Jim Ludwick

Jim Ludwick is the founder of MainStreet Financial Planning. His varied education and life experiences have enabled him to apply his knowledge and experience into useful solutions for personal financial problems. His writing and broadcasting activities allow him to help many more than just individual clients. He loves a microphone.

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