DOW tumbles another 350 points! So, everyone who reads this forum assumes it’s going to be another bit of wisdom…..or a dash of the world according to Ed, about life insurance. And it is, but what’s the connection between a loser year for stocks and life insurance? The connection lies in that not so complicated realm of those that believe the very old, very, very old advice from those who make money helping you buy stock that no matter how bad it looks today, no matter how bad a whipping you just took, the stock market will always correct itself and make you money.

What those brilliant financial advisers never address is what happens to when the breadwinner and primary contributor to retirement just up and dies while the stock market is waiting around for the correction that always happens. The other thing the gurus of the stock market never discuss is that time (are we there yet?) when all of the world’s horrific indebtedness comes to roost and the stock market becomes a different kind of history lesson, one in which the stock market does in fact adjust, but adjusts to the cold, harsh reality of the true state of the world economy. We all know at some level that there is no sound basis for the DOW to be bouncing around in the 17,000 to 18,000 range. Our economy has been beat to death for 15 years and has sort of been artificially medicated by the Fed leaving interest rates at 0% most of that time. There just isn’t any reason that the DOW shouldn’t be at 10,000 or lower as it was in 2001. Seriously, raise your hands if you think your personal financial world is almost twice as good as it was 15 years ago. That’s what I thought.

But who am I to address, let alone pretend to know why the rich get richer and the also rans get poorer. The point is that if you have retirement income that is completely and totally dependent on the lie that the stock market will always recover and you don’t have life insurance that A. protects your retirement against the death of an income producer dying during a downturn or B. becomes your only hope for retirement when the whole stock market mirage finally hits the black hole of reality and just disappears. Or at least drops back to some basis in reality, rendering the majority of our retirements useless.

Bottom line. You can stick with the age old wisdom of letting everything ride and bank on the fiction based stock market (how’s that working for you), or at the very least get some life insurance (not indexed universal life) that will last until you can actually move that pretend money into some safe retirement harbor. If you have questions or want to know what a little stability in your financial plan would cost, call or email me directly. My name is Ed Hinerman. Let’s talk.