These words, penned in 1973 by then-Soviet dissident and Christian writer Aleksandr Solzhenitsyn, brilliantly sum up the human condition after the Fall.

They pooled their slim resources, and leased the land from the government.   Buying seed with their last funds, they planted it and prayed for rain.  The rains came sparingly and the wheat and rice began to sprout and turn the acreage green again.  But, there was some fine print on the lease deal.

After 6 months they had noticed nearby oil platforms going up.  One day, some men from the state oil company arrived and wanted to have a meeting with everyone.  Apparently, the fine print on the leased land said the farmers would have to leave the land if there were oil wells to be drilled on it.   They said, basically, you all have to pack up your things and leave tomorrow.

This was a bad situation.  The farmers said NO, collectively.  The government men said you WILL leave.  The farmers said they would NOT leave, because they had nothing left.  The government men said they were going to bring in the military and bulldoze them off the land.  The farmers said they would fight to the death, since they would die anyway if they left the land.

The next day there were tanks and bulldozers there at sunrise.  The farmers were all armed down to the last one.  This was an ugly standoff,  but the military had the bigger guns.  Then a Corporal asked the commander if he coiuld go talk to the farmers before the bulldozers and tanks mobilized.  He said he was a farmer before becoming a soldier.

The corporal was given permission.  He took a government man with him.  They spent about 30 minutes talking to the elders in charge.   They found out the farmers were ready in about 3 months to harvest their crops.   The corporal asked the oil man what they needed to do with the land right now.  He said they needed to do seismic surveys underground.  They needed to deploy their “thumpers” and collect and analyze the data.

The corporal found out that would take about 4 months, and the farmers wouldn’t mind working around the few trucks and boreholes that would take.   They just wanted to harvest their crop.  Also, there was a fallow time for the soil after the crops were harvested that the government could use to drill and set up pump stations.  And there probably wasn’t going to be that many pump stations, that the next set of crops could be planted around them.

No guns fired, nobody died, some families got reasonable start on a life that was sparse and difficult – all because somebody thought to ignore the two sides “positions” and find out what their actual Priorities were.  An excellent lesson for war, for business, for life.

Interesting, though, when he boils it down to business is nothing
but politics, a thought came together for me. There’s two kinds of growth in business – growth for growth’s sake and growth for people’s sake.

The true titans of business are growing all the time. Growth of
business. Changes of ownership, increases in scale – mergers, stock market
trends, legislation, governments. continents.

But the word “business” no doubt derives from the word “busy.” And you shouldn’t lose track of the fact that being busy doesn’t always mean adding value, value to the
human race. If it puts “me” way ahead then, isn’t it good for the whole human race? Since “I’m” a part of the human race? Maybe so, maybe if you are being true to yourself.

There’s a bible quote here, right? Do you know it?

Nationwide is a great company and it has been around a long time.  People that work at Nationwide have a great deal of collective experience.  The company knows a lot about risk, how to help customers avoid risk, and how to protect customers from the results of harmful risks.

The company mitigates its own risk, to keep predictability high, and costs minimized – to sustain profits and operations. So consider this scenario:   you have a clean driving record, and a long history with your insurer.  You are driving one night, and are involved in a two-car collision with about $3000 total damage to both cars.  You were clearly not at fault.  From your vantage point you were totally in the right.

However, the other person in the accident has filed a suit against you, for being at fault for the accident.

Your insurance company is doing their job, and uncovering the details of the incident and you are confident of a favorable outcome.  Then you get a call from your insurance company.  They say the other party has offered to settle for $3500.  Then your insurance company tells you they are going to accept those terms and pay the $3500 and be done with it.

The problem is, accepting the settlement is a de facto admission of guilt for you, and it would result in an accident report on your record permanently.  It’s a fine solution
for the insurance carrier, who is hedging their risk by accepting the settlement, avoiding lengthy trial, and any open questions until a judge makes a ruling.  Their bill will be a
predictable $3500, no court costs, no risk of more serious charges or greater costs.

You protest, since you are certain the accident was no fault of yours.  The insurance company informs you that you have the right to go to trial, but since they are offering to
settle, you will have to pick up the attorney fees and court costs, and if the ruling is not favorable you will have to pay that also.  This is a tough decision you now have to make.  Your resources are limited, and they do not compare with your insurance company’s resources.  It could be as high as $25,000 in the end – it’s hard to predict.  The Insurance company at this point is not representing your best interests.  It looks like you will walk away with an accident on your record.

To give you an idea of how important a blotch on your record can be, a certain candidate for nomination for the republican presidential bid in 2012 likely had this same scenario, with one or more past sexual harassment complaints ending in a settlement.  Did he really do it?  Was he a repeat offender?  We’ll never know, but it ended his bid for the republican nomination.

The most dependable answer to the whole issue is this:  don’t get sued.  What do you think?

What about securities? Well, consider 9% average returns, and after fees it’s 6.5%. That will require $131,000 to start with. If you want to plan for age 97 you have to start with about $148,000. But here enters the risk. You might just lose 6.5% in that timeframe from being in a mutual fund or stocks. Not uncommon. Then your plan won’t work.

Over the last 10 years being in stocks or mutual Funds has yielded only 3.5%.  What if you could get 4%, and at the same time NOT risk going below 0% returns? This would give you the strongest assurance of your plan working out, at a fair price: This would mean $160,000 set aside to reach your goal for 20 years, till age 84. And if you want to shoot for 97, start with $216K.

This is the arrangement with an indexed annuity. It is kind of a middle-ground approach to planning an income stream, with the added advantage that if the market and the economy tank for some reason, your money is safe, the principle is preserved.

To complete the picture, if the market takes off, your gains will be there, but they will be more modest gains, since a moveable cap allows for underwriting company to make some positive returns, also. Say the market climbs by 10% in a year and your cap increases to 6% – you still make a good return, and the underwriter makes 4% that year, too. And, conversely if the market shrinks that year your cap could go below 4% but it would never go below zero percent. With this arrangement you are likely to meet your plans from historical averages.

So take this on board and give us a call at Polvogt Insurance group and we’ll help you plan with the help of an indexed annuity. 281 395 9400

The short definition:  an indexed annuity is where you place your money in an arrangement where the interest it earns is paid out to you on a regular basis, and it is tied to an index, in this case a stock index.  You will never lose your principal, even if the stock market takes a major plunge.  The “floor” for the interest rate is zero percent.  If the market increases, your interest rate increases.  There is a cap, that your interest rate cannot go above.  And it is a longer-term agreement, not a short-term strategy.  Again, the safety similar to a CD only with a significant upside, depending on the stock market (S&P 500 for ours).

Should you buy one of these?  People buy them to help make sure they don’t “outlive their money.”

First off, what does it mean to “outlive your money?”   This refers to the possibility that during the last phases of a person’s life, the resources it takes to maintain a standard of living, or simply maintain life itself may dwindle and deplete down to nothing.  What happens then?   Not a good prospect.   We all want to savor the good times spent on this earth, and most of us want to be able to spread those good feelings, but that gets harder if a person’s health is failing and they can’t adequately take care of themselves.  And it gets harder when a person becomes financially dependent on other people in their life.

Discomfort, uncertainty, worry, poor health – people are looking for strategies to avoid all that in their later years, and insurance products like indexed annuities can help.  But these are complex financial tools.  Enter Polvogt Insurance Group.  Our brand is a simple phrase, we’ve had it for a long time and it captures what we believe in and what we offer our clients:  K.  A.  T.  I.  E.   stands for:  Kindred Advocates for Trusted  Insurance  Excellence.

Everybody has different needs and an indexed annuity may have a lot of options.  It was just a few years ago these products were developed and offered to the public.  The principle behind them is so logical and has so much potential that they suddenly came in all shapes and sizes.  A lot of people took advantage of them, and some people were taken advantage of.

Anyway the dust has settled.  The offerings are more mature now, some rules were made, and there are simpler ways of judging their value in your life.   More on this later, or give us a quick call and let’s talk about them! (281 395 9400).

Caution:  This is a southern Cajun tradition, cook it outdoors, know something about propane use, and buy a good rig from a big box store.  Then you can “try this at home” but we’re not responsible !

Take about a 15 pound bird, frozen solid.  Place it in the deep fry kettle and start filling it with water.  When the bird is about 80% covered with water, take the bird out and make a pencil mark on the outside of the kettle to record where the water level is.

Then dump a cup of sea salt into the water and stir.  Put the bird back in, covered with salt water for 8 – 10 hours.

IF YOUR BIRD IS ALREADY THAWED:  put it in the salt water for 6 hours.

Then take the bird out and dry it off thoroughly.  Place it on the deep fry stand with a platter underneath, cavity pointed down.  Let that water drain for an hour.  Pat the bird down one last time with a paper towel, making the skin dry.

Pour a jug or two of peanut oil into the fry kettle, filling it up to your pencil line.  (3 ½ to 5 Gallons)

Heat the oil to 325 degrees with the propane rig. 

Lower the bird into the hot oil slowly, using either two large pairs of tongs or two large barbeque forks OR, the handle that comes with some deep fry rigs.

Set the timer for 45 minutes, or 3 minutes per pound.  Internal temperature needs to reach 170 degrees.

Take the bird out carefully with the tongs or the barbeque forks, or the handle, and let it drain by placing the bird, with its stand and all, onto a platter, cavity down.  When it’s cooled and drained for 10 minutes, carve it up !

Happy Thanks Giving from Polvogt Insurance Group!  281 395 9400

Indexed Annuities are a good way to hedge risks with your money.  You can’t use CD’s these days to hedge risk, because their interest rates are so low, it’s likely that inflation will surpass the interest rates and you end up losing money by choosing the safety of a CD.

The Indexed Annuity pays a return percentage that relates to a securities index, like the Dow Jones Average or the S&P 500.  It’s for longer-term investing, and it’s safe.  Your odds of losing money are quite low.   Here’s how it works in general.  The minimum return rate that the annuity pays will never go below zero percent.  That will never change – no matter what the stock market does.  As the index rises, so do your returns, up to a point.  That’s called a “Cap” and they reset the cap every year, meaning they adjust it up or down according to several factors.

But you never receive a negative rate of return even if the stock market has a percipitous fall.

It’s a great little protected income tool.  There are some details to be aware of, like how these are insured by the government, how to do an early withdrawal, how the taxes work, and where to buy these instruments.  But that’s what we’re here for, to answer your questions.  I think we’ll have another community information session real soon.

Till then, we will do some more posts on this very valuable topic.

Comments?

Is there something going on here?  There are probably psychological and biological things going on in our make-up that steer us in the direction of “balance” automatically.  Or maybe the concept is “moderation in all things.”  What if this mechanism never kicked in?  There we would be on the back porch, 102 degrees, just mowed the back, starting our second tall glass of iced lemonade, and third, fourth, fifth, until we make the headline news as a tragic lemonade fatality.  Oh- there goes another one…

The Law of Diminishing Returns is one of the most famous tenets of economic thought.  It states basically, that if you are making something, and you keep increasing one of the ingredients more than the others, you soon start producing fewer and fewer things of acceptable quality.  So if it takes 20 people 20 days to make a car, and you increase the number of people working on it, you may get a car made a little quicker, but only to a point.  After a certain number of extra workers, they start getting in each other’s way. 

This law might be working in our brains and in our bodies, too.  We get a little obsessed with lemonade, or whatever else and we start getting less and less productive.  We start getting too much of a good thing and we start getting sick.

So maybe these are evolutionary adaptations, straight from the garden of Eden, when things were all abundant, beautiful and delicious (including the apple).  What kept us, back then, from indulging in – anything? In everything?  Perhaps that is a very important question.  We did take a bite of the apple, but before that, in general, we could have ‘overdone it’ in many different ways, surely.

There is an opposite phenomenon.  Have you ever donated your time for charity?  Or perhaps written a sizeable check for a cause?  Or done someone a big favor that they may never find out about?  If you have had the opportunity to repeat this event, however big or small, you might notice something.  You might notice the good feeling doesn’t fade the way it does for that second glass of lemonade.

So how do we explain that?  It somehow relates to “Man does not live by bread alone.” Deut 8:3 & Mat 4:4.  Not sure how to put it in words, anyone care to comment?