What We Can Learn From 3 Little Pigs

The Three Little Pigs is more than just a story to entertain children.

We remember that the fate of the houses built of straw and sticks was pretty awful, right?

Only the house built of bricks was sturdy enough to withstand the huffing and puffing that destroyed the others.

This fable can also be used to teach important lessons about planning for one’s financial future. Whatever huffing and puffing our economic future may hold, we need to know we’re secure in our metaphorical financial house made of bricks.

To flesh out this analogy, building a house of straw can be compared to taking our hard earned cash and placing it in the stock market or in mutual funds that are tied to the stock market. While many people choose this route, these particular savings vehicles are easily blown down by the hurricane force winds of market volatility.

These are higher risk vehicles for your retirement money and are not the best choice for someone who is concerned with safety. This is one of the more painful lessons learned by many Americans during the Lost Decade between 2000-2010.

The house of sticks can be compared to real estate where a lot of people choose to put a lot of their money because of the more moderate risks.

While real estate can be a little stronger and more predictable, but still has some serious weaknesses.

But the real estate market has its ups and downs and people are at risk when all their money is in real estate alone.

What we need for our serious cash is a sturdy house of brick.

Fortunately, there are many financial instruments that qualify as a house of brick. These include annuities, bonds, and money market accounts.

However, not all of them are as strong in two very critical areas; namely, liquidity and rate of return.

Why not enjoy the security of a house that is strong in all three aspects of safety, liquidity, and rate of return?

MFTA Spells Safe, Reliable, Tax-free Income

When structured and funded properly under sections 72E, 7702, and 101A of the Internal Revenue Code, and under three specific tax citations, Maximum Funded Tax-Advantaged (MFTA) life insurance contracts can deliver the kind of triple performance that counts.

In this particular savings vehicle, you experience the upside when your stock market and real estate investments do well without incurring any extra risk. On the other hand, should they go down, you don’t lose any money.

The Big Bad Wolf can come calling in many different forms. When a 9/11, a Hurricane Katrina, or even a recession comes, your house must remain securely standing even when houses of straw and sticks are blown away.

When structured and funded correctly, life insurance contracts are not considered investments and should not be purchased as an investment.

In 1980, the Internal Revenue Service ruled that these specific life insurance contracts remain untaxed even though they can perform quite well.

MFTA life insurance contracts are a financial instrument where you can put your money to be used for tax-free income during your golden years.

They can be structured to have great liquidity so your money is accessible when you need it and without penalty.

They can provide a combination of tremendous safety, stable rates of return, and tax-free income.

You must be willing to explore all of your financial planning options to find what works best for you. This is where Warren Buffet’s advice may come in handy:

Rule number one–don’t lose money.

Rule number two–remember rule number one.

After a lifetime of work, saving, and time invested with family and friends, most of us would choose to leave a legacy that endures after we’re gone.

We have to be willing to forget the straw and the sticks and go with the bricks if we wish to create a long-lasting future for ourselves and those we care about most.

We must build a properly constructed financial future won’t come apart when the Big Bad Wolf starts huffing and puffing.

By Doug Andrew


Doug Andrew