The Alternative That Might Save Your Retirement

In the past few years, you’ve probably heard the buzz about “alternative investments.” So, what are they, anyways?

In the highly regulated world of investments, there are a few specific things that are typically referred to as alternative investments: hedge funds, non-listed REITs, private equity, gold, fine art, vintage Ferraris, wine, etc.

You get the picture. Basically, alternative investments are things that aren’t directly related to the stock market.

Staying out of the Mainstream

Some people spend all their lives trying to fit in. They hop onto whatever trend they think is fashionable and hope that others will accept them socially for their efforts.

For those people, this strategy is probably a bad idea. But hey, do you really want to fight like hell to be entrenched in mediocrity?

A lot of people make excuses for being average.

There’s a mental twitch that says it’s okay to be part of the crowd, and when we see examples of those worse off than ourselves, we rationalize our bad behavior and tell ourselves we’re “at least better than those people.”

Marketers are well aware of this habit and use it to influence behavior by manipulating impressions to give you the notion that everyone else is doing it, so you should too.

Please don’t fall for this.

You don’t become spectacular (at least, not in my opinion) until you can make your decisions independent of sweeping trends.

Now, this isn’t to advocate for living in a cave like a hermit; it’s a call to the importance of hedging.

There are plenty of people who have the decline of the stock market as an excuse for their unfortunate financial situation. We’ve met plenty of them.

We have also had the fortune of meeting people who motored right through 2008 with little trouble at all, and for the most part, we are among them.

If having something to complain about is your thing, by all means, stop reading and go look for something to complain about.

But, if you’re the type who values peace of mind, there’s something we’d like to share with you.

Think Different(ly)

Remember the Apple marketing campaign that began in the late 90s?

It was one of Steve Jobs’ first initiatives when he returned to head the company he started. He explained the concept behind the campaign as an awakening to the notion that our society’s traditional paradigm (living your life within the confines of what we accept as “normal”) was useless.

Our world and its structure was created by people no smarter than you and I. Furthermore, there is definitely something to be gained by not being confined to “normal.”

It turns out that being “normal” when it comes to financial planning is a frightening notion.

Luckily, buried in our bag of good tricks is the alternative investments playbook.

Alternative investments are typically classified as investments that exist outside the norm of retail investment products available to the investing public (i.e., stocks, bonds, mutual funds, and some precious metals) and typically have the following key characteristics:

  • Low or no correlation with major stock markets
  • A somewhat exclusive buy-in or minimum investment threshold
  • A lower degree of liquidity
  • A somewhat hide-able asset

What do all of these characteristics have in common?

They are all traits that we see in the portfolios of wealthy, high income earners. Now that you know how we would normally classify an alternative investment, we’d like to propose something to you.

Why not use cash value life insurance (universal life or whole life) as an alternative?

Yes, we will clearly state for all the regulators who are reading that “Life Insurance is NOT an Investment,” and you can perform your due diligence on that statement. You will find that every insurance regulator in the country agrees with us on that.

However, the great thing about cash value life insurance is that we get the highly coveted features of low or no stock market correlation and a somewhat private or hide-able asset without the drawbacks of unreasonable barriers to entry, difficult valuation, and liquidity risk.


We’ve managed to build a practice that works with a fairly sophisticated clientèle.

Our client list includes such professionals as engineers, financial analysts, medical specialists, attorneys, and accountants. These people tend to ask a lot of tough questions.

They push hard for answers. And, they love cash value life insurance.

A lot of them are looking for an alternative to bring to their portfolio, and we've been intrigued by how they look at a lot of traditional financial advice (with great skepticism).

Some of these people work for companies that manufacture various investment products (mutual funds, limited partnerships, hedge funds, debt obligations, etc.), and they understand the limits of traditional investment products.

Most have done really well with traditional and alternative investments.

Still, they understand the role luck played in their good fortune and realize they need to balance risk.

We don’t want to come off as arrogant, but based on the sophistication of the people we’ve worked with and the success we’ve witnessed in setting up their policies (not to mention my own), the warnings of the non-believers don’t faze us.

Validation Part 2

Why take our word for it?

Dan Solin, a syndicated financial writer best known for his Smartest Series books, wrote an article on this very subject back in 2010. What’s even more interesting is that he pointed out the weakness gold poses with respect to its extreme risk and poor long term yields.

We also got a kick out of the comment section where “TorllDiddy” beat the gold war drum and went so far as to make a prediction about the double dip, which, according to him, is officially happening January 1.

He didn’t specify what year, so we suppose he’s still not technically wrong.

Those in the Know

We’ve never once had a client who wasn’t interested after coming to understand how cash value life insurance worked.

But we have set straight a lot of poorly educated people who have fallen prey to misinformation. Those with some experience (and especially those with a deep understanding) have been consistently happy with what cash value life insurance has to offer.

If they have any problem with it, it’s that they are mad they didn’t figure this stuff out earlier.