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Mortgage Planning, Equity Management, and Investments

I wanted to take a moment to pose a question to the mortgage community here on active rain and open up some communication about equity management and investments. As a mortgage planner, I try to take the initial mortgage consultation much further than the average joe. We talk about investments, insurance, short and long-term goals...pretty much everything imaginable...as I'm sure most of my mortgage planner colleagues on active rain do as well.

I personally believe that equity is better empowered when it is separated from the home and put to use in an investment that is earning a rate of return. Ultimately, I wanted to open up a forum where we could talk about what investments other mortgage planners (YOU) are talking about with your clients. Obviously, the Missed Fortune concepts recommend Equity Indexed Universal Life. Barry Habib seems to be partial to Tax Free Municipal Bonds. Ric Edelman seems to favor the stock market. I have personally dealt closely with TEAM members of the Missed Fortune concepts, and I think the EIUL can be great for the right people. What does everyone think about Investments from an Equity Management standpoint? personally and professionally?

I'm excited to hear everyone's thoughts.

Chad Trease

www.TheTreaseGroup.com

Posted by Chad Trease on 03/15/2007 12:03 PM

Comments (5)

equity management, investment, mortgage, mortgage planning, wealth, wealth building, wealth creation

5 Comments on Mortgage Planning, Equity Management, and Investments

MAR

2007

I guess I'll start off...I am personally looking into setting up my own plan with a financial advisor using investment grade life insurance. I'm 29, so I also don't mind taking more risk and having much of my money in the market. I definitely think the tax advantages of the investment grade life contracts look appealing. Much more so than my 401k or IRA accounts.

On a professional level, I consistently refer my clients to one of my financial planner partners that understand repositioning equity. The insurance contracts seem to be what many planners are focusing on. Do the other mortgage planners see this as well? What is being utilized for equity management in your areas?

I am a financial consultant an a mortgage banker. I love this concept and use it often. I would like to talk more about this with you. I think this should be done more now today than ever before. I am developing more marketing around this topic now.

I am glad you are doing what you would want others to do. Tat is what I have done with my family as well.

Keep up the good work.

Dave

Thanks for the comments Dave. I was starting to think that we have mortgage planners on the site that use the title but don't truly practice the ideas. Feel free to contact me whenever you'd like to talk more about this. I'm currently in the process of marketing this much more as well...in addition, I'm planning to start doing monthly seminars in my area around the principles of equity management.

JUN

2007

I think the best asset allocation strategy from the loan proceeds needs to follow the 1- your age rule.

Your age= fixed income percentage

1- your age = equities percentage

For example, I'm 42. I want an asset allocation of 58% equities and 42% fixed income. This can best be accomadated in a tax advantaged account like a VUL (as Andrews suggests) or a qualified retirement plan. The VUL allows for an asset allocation strategy within the tax advantage of insurance.

JUN

2007

Chad,

First off, yes you need to look at a lot more than just the loan application to serve the clients best. I have developed my own process that does that and takes it from a financial planning perspective, discussing various strategies, educating clients, etc. I will not go into details here.

Regarding the best solution, Brian hits one of the best wyas of determining suitability, age. Every suitability questionaire has this included as this presents a clear picture of how much time they have to utilize and benefit from the strategy. I would suggest going beyond that, but it is the best starting point.

As Brian pointed out, the VUL is one of the best tools that can be used and provides flexibility. It can be set up as an EIUL as Doug Andrew suggests or you can put it at more risk if it is suitable for you and employ a diversified asset base much like you would investing in an IRA or 401(k). Personally, I use a VUL with a diversified portfolio as one of my strategies.

Everyone is different, and so is the solution for each one.

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