America’s Top Investment Vs Whole Life Insurance - Who Wins?

Hey guys, it's Justin Garman here from Better Wealth. And today we are going to look at what is America's favorite investment. Well, at least according to a survey that Bankrate does where they had done that in 2022 and 2025. And they ask everyday Americans like yourself what their favorite long-term investment is. So we're going to take a look at those and dive into what I thought were some surprising numbers from this. survey here. So if we first take a look at a quick comparison here. So we have 2022, we have real estate being the number one investment for Americans, at least for the long term. And then stock market there, and then cash and savings being at 17% there, as well as a few other items along the way there. Then fast forward to 2025, and you see stocks pulled slightly ahead. But really, the real surprise to me is just how high cash, so savings and CDs are, is America's favorite long-term investment. So that really means one in five Americans believe a savings account is the best place to put their money for the long run. So, and I found that true through the many people that I talk to every day. Lots of people come in and they may not have very many investments and they are putting a lot of money into savings, into a safe place there. And so something that even coming here, didn't realize that it was going to be that high. And then just to look at some of the numbers, if you saw some of those numbers change from 2022 to 2025. So some of why the shift there? Well, I know interest rates have been higher. So therefore some of those savings and CDs are earning a little bit higher of a return. Housing hasn't been the same, especially with those higher interest rates. So some real estate may feel less safe. There's also been some market volatility as that was in 2022, but you saw that that actually jumped up a little bit and moved to be the top. But really the main headline that I want to look at is that it seems like a lot of Americans are really looking at a safe place to store their money, a shift towards that safety there. Part of the reason They asked as well in the survey is why do Americans not want to put their money in stocks? They compared stocks to other things there. I know there's other assets or really many other investments that you can do. And so when you look at the survey, the reasons people avoid stocks are pretty consistent compared even 2022 to 2025. So you see 34% say the stock market is too volatile. 21% were just intimidated by it. They didn't know what to do, what to invest in there. So intimidated, didn't want to do it. 13% believe that it is rigged for somebody to win that is not them. And another 13% said, hey, I just want to keep my money. I want to preserve it. Want to make sure that I don't lose it. And then finally, 12% just doubted the long-term return. So they thought, hey, maybe we can get better somewhere else and didn't believe the long-term returns that they can get there. Now, I'll say whether... or not those fears are completely accurate, because I don't believe a lot of those to be necessarily accurate. At the end of the day, it really doesn't matter what I think or what you think, because everybody's money is going to be personal. And so by that, one in five people are putting majority of their money. Maybe they're not putting the majority of it there, but they truly believe that savings is the best long-term investment for them. So whether... You agree with that. Maybe you think it's real estate. Maybe you think it's the market. Maybe you think it's crypto. Maybe you think it's something else. Everyone has the right to choose how they want to grow and protect their wealth. And then it's really a matter of, hey, based on what you believe, based on what you want to do, yes, we can look at facts and show different things. But let's look at what you want to do and say, hey, how can we make that a little bit more efficient there? So one. I'll say this, we don't look at savings here, at least at Better Wealth, and especially life insurance as an investment at all. So a lot of times, I know Americans, like we said, one in five looking at it as that long-term investment, but here is really where the problem is. Savings accounts were never designed to really be long-term investment vehicles. They are really there to protect your principal. You put it in there and it's going to be safe and sound, but it's not going to grow your... well. So that is definitely one thing. And in life insurance, like we say all the time, life insurance is not an investment. Life insurance is a place to store your money, place to get a death benefit, but it is not the investment. Same thing with savings. And I would even say CDs. Now CDs, especially as of late, can get a return there. And so you can look at that, but it is generally going to be the safe place to store their money. Let's now ask the question here. If you are conservative with your money, wouldn't it be nice to have an asset that one is guaranteed to go up every single year? Just a question of how fast? Well, that's where you probably know the answer here. Knew where this was going is life insurance. It can be a great savers alternative. So that's exactly what it does. It gives you safety. It gives you liquidity. It gives you creditor protection. It's going to be guaranteed to grow over time, can even grow more with dividends. And so it provides all of that protection in one place, let alone the death benefit that you get along with it. So now if we compare that to a high yield savings account, sure, today's interest rates can look attractive, maybe not as attractive as they did even a few years ago, but they are fairly high, especially historically, but they do change. So they haven't always been that high. Historically, they've been pretty low. And so we can then look at compare that to life insurance dividend rates. So on the other hand, have had been there for over a century and quietly been there returning steady growth there over that time. So here, let's actually take a quick look at a comparison between a high yield savings account with a high cash value life insurance policy, just like we talk about all the time here. In this example, We're going to look at a 35-year-old that is contributing $50,000 per year for 25 years and then stopping after 25 years and letting the money just continue to grow in there. So starting there, $50,000 per year every year just for 25 years. And honestly, to make it more simple, keep it really fair here. We're not taking out any taxes on the interest along the way that would be in a CD or in a high yield savings. So all of it here is growing tax-free. So sorry, Uncle Sam, you don't get your cut here of this money right here. So that'll keep it simple. Give high-yield savings at least a little bit of chance here. And you can see the savings are ahead in the first few years. So we see here, we have 3.5% and 5%. Now we could look and argue historically, is a high-yield savings account going to earn you 3.5%? The numbers say actually, historically, the average has been less than that, but I wanted to use 3.5. And then also. If you're a believer in, hey, it's going to be a 5%, we can look and see how that compares as well. And then we're going to look at a pin mutual policy and a Lafayette Life policy. So we have two comparisons. So it's not just saying, hey, one of them is going to be better. We're going to look at two different policies there. So as you can see early, cash is going to win. And I tell any client that I work with all the time, if we're looking at that comparison is cash always wins in the short term. So there's no fees, no PUA load fees. no cost of insurance. If you have the cash, you have the cash. It's all there. It's all accessible there. So cash wins in the short term, but cash value will win in the long term as we'll see right here. So as it goes, even five years in, cash is still going to be ahead. So we see the cash, obviously the 5% is going to be a little bit higher and then pin mutual and Lafayette Live. So similar for you've looked here, Lafayette Live is going to be closer to the cash. We can get a little higher early cash value here, like you see. And then over the long term, once you get Typically, you're 8 to 10 to 11, somewhere around there. That's where we're really going to start to see one pin mutual be ahead over here. And then even further out, now we're going to even be ahead of the cash. So again, truly looking at it as a long-term where it's going to be ahead. But of course, if you have $50,000 and now you have 41 and you are looking at this as a long-term investment, because that's what the survey looked at, that long-term is going to be what we want to be the highest there. And so you see. Over that time, we get out to year 35 and we can look and compare across the board here. Even in year 30, guess what? Penn Mutual now at that point is nearly a million dollars ahead of the three and a half percent and about $200,000 ahead if it was at 5%. So if you believe that, and again, not taking out taxes, which would significantly hurt the growth here that we have. And then at year 35, so down at the end here, we're going to see Penn Mutual policy there. Funded over that time, had the steady dividend rate. So again, dividend rates not guaranteed. Strongly assume they'll have something there and also probably going to be very correlated to interest rates. If interest rates are high, dividend rates are probably going to be high. Now, I could argue, are we going to see 5%? I think. No way you're going to average or have 5% every single year. But just for a fun comparison there, we can see what it would be like. So at the end there, you end up with about $1.5 million more compared to the $3.5, which would probably be closer to accurate. And then as well as almost $1 million more at Lafayette Life. And that's not even mentioning the death benefit that you would have. And this is only at age 70. As it goes further out, so you're 80, 90, 95, 100. it's going to grow even further apart there. And so we can look at here with the debt benefit, even in the high yield saving that 5%, you're going to be nearly $3 million ahead because yes, you die. That's what's going to be less. You die over here, this 6 million is going to be less. I'll say this is a great example of the internal rate of return. So the IRR, so at 5%, because that's what it would be. Be like you put $50,000 in and earn 5% every year. Here's where you would be at. in this one. So pin mutual clearly, we're able to get a little bit over a 5% IRR, at least at this age and how we funded it. Same thing over here. It's actually a little under 5% there. So that's where we always say somewhere around maybe four to five and a half percent IRR. And if you don't fully understand IRR, check out the recent video that we did where we specifically dive into all of those and even more details. So this is great. We looked at cool life insurance can be a high-yield savings account or a savings account in general there, but here is where it gets even more powerful. Your money doesn't have to just sit there. Hey everyone, it's Justin Gartman, a wealth coach here at Better Wealth. And if you are a high earning professional, an entrepreneur, or someone who just wants more control over your money, we are offering something called a player to call. It's a one-on-one conversation with someone like myself. where we are able to walk you through exactly how overfunded whole life insurance could help you build a safe, liquid, tax-advantaged foundation for your wealth. No pressure or fluff, just real clarity on whether this strategy is right for you. So click the link in the description below or tag comment and we'll walk you through exactly how we can possibly help you. Now, back to the video. Life insurance, as you know, the cash value can be borrowed against. We can leverage it now to potentially invest in real estate. Maybe you will want to start. a business. Maybe we want to balance out our stock portfolio, look at this as a bond alternative, or just like we had it there, we can let it sit. We can let it grow. It's going to continue to earn those returns. So it's going to give savers flexibility without forcing them to give up safety. So no matter what you have here, policy is going to be guaranteed to grow. You have the leverageability of it, and you can now take that and invest in other assets as you go. And there's two. ways to build wealth. I'll argue there's a third way to build wealth, but some of that information here in the survey said, let's get a low savings. We're going to not save very much, but we are going to hope for a five rate of return, or we can save a whole lot. So we can save a big percentage of our income and save a lot and have a low return. We can end up in the same spot. Now, ideally, the ideal situation is that you are able to save. and earn a high rate of return. And that's where saving a lot into life insurance as a tool can be a big benefit to you. And so while life insurance definitely is not the investment where you're going to get the high rate of return, although we could argue compared to just savings, you could argue that life insurance rate of return is going to be fairly high, but it can be one of the best places to store capital. while you wait for opportunities to come along. Your money's going to grow safely, and now you're positioned to take advantage of any future investments and get those high returns, all while the money inside of your policy continues to grow. So you were able to really do both. And I know we're on the and asset channel. That's why we call it the and asset, because you can do both. And so for those of you at the beginning who looked at this and said, oh, all of these savings, I'm not interested in saving. I only want to invest. Well, You can do both. You have your safe asset. It's going to grow. It's a great place to store some money. You get the added deficit. You get four to five and a half percent internal rate of return, much better than savings. And then when the opportunity comes, you borrow from it and you can invest. Now you can pay it back and continue to have your bucket of money continue to grow and continue to grow and then rinse and repeat. So it can really be a very powerful tool no matter what Can you argue? The big picture is this. A lot of Americans are choosing safety more than ever. You can look at the data. You can look at that. Now, whether or not that's the best thing for them or that's the best thing for you, it doesn't really matter. It's whether you're a saver who doesn't like investing or maybe you are an investor, an entrepreneur, a business owner who just needs a better place to stack their cash in between opportunities or is a place where you build your business. You need funding to fund your business. I would say schedule a call with us today. We can look at how life insurance can possibly help you get closer to those goals. Be that safe place to store your money where you know you're going to get guaranteed growth. You can use it in many situations. It can make a lot of sense there. Now, the key to that is one, a lot of this we had to do with savers. You need to have the money there that you can invest or you can save. So if you're someone who hasn't crossed that bridge yet where we're able to save a lot and you're but in a way, just a little tiny chunks here and there and hoping for those high returns. Well, we need to find the best way to get those returns and start building up that bucket of cash. And then now we can go out without having to take on a whole lot of risk and have to get those high returns. So whether you're any of those things, schedule a call with us. Let's walk through your situation and see how something like this can fit. We'll see you next.