by: Sarah Kaelberer, CFP
have kids, of any age, you have heard "but mom" before!
Most of you know, about a year ago (ugh! Has it been that long!)
I gave birth to my little boy Max. He was the third child in
less than 5 years. Miranda, our oldest, just turned 5. Chloe
is every bit of 2-1/2 years! And then Max, just one. Our
house has been full of love, laughter and, needless to say, noise!
But in all that love, laughter and noise, some very special
moments have been shared, and there are always lessons to
Come In All Sizes
Bath time usually starts by 7:50. I am just putting the two
girls in the tub. 25 minutes behind schedule; a perfect ending
to a hectic day! As the girls start splashing and laughing my
mind is listing everything I did not get done that day, which
I thought was just about everything on my list! I sighed. Miranda
asks "What's wrong?" I explain to her that I did not
get anything done. In her usual style, she begins listing everything
I did. "But you helped me build a house for Caddy, you
washed blanky when I spilled milk, we played Hungry Hippos and
you took care of Max." I smile and, not minding that I
was going to get wet, leaned over and hugged her. She did not
mention dinner. My husband would have. She did not mention work,
Dennis and the staff would have. She did not mention cleaning
(which I seem to be the only one to notice). She mentioned what
was important to her. I made her day because I had time to do
the little things she needed. They are little to me, but not
so little to a then 4-year old.
...The infamous "But Mom!" came out...
I let the kids watch a show on Public Television during breakfast.
Halfway between the cartoon, the show stops and the characters
sing a song, encouraging the views to get up and dance. When
this show first came out, they would jump out of their chairs
and start running around. I did not have a clue as to what they
were doing and would insist they stay at the table until breakfast
if done. The infamous "BUT MOM!" came out. "This
will give us more energy!" Have you seen my kids lately?
More energy is <I>not</I> what they need!
is what I need. So now I "get up and dance" to the
songs with them. Not only does 5 minutes of stretching and moving
help me get started, it also give me one more fun thing to do
with my kids!
Do It! Watch!
I think of what they cannot do. Then I take extra time to tell
them how to do something they already know how to do. Then,
when they do something they (and I) did not know they could
do, I am not watching. Wait; am I talking about my kids, my
husband or my office? Well, all of them! I am constantly reminded
by all of them. Miranda, being her mother's child, can be a
little too particular about the way she does some things. So,
when I started to tell here <I>how</I> to clean
up her Barbie's, the door was promptly closed with a "I
know Mom, let me do it!" After about 10 minutes she proudly
came down stairs and invited my up. (Hint: don't let an almost
five-year-old lead you up the stairs with your eyes closed!)
When she opened the door to her room, not only was every Barbie
in her proper place, her bed was even made! She was so proud
of the Super Tornado (which apparently is the tornado that comes
in to clean after the tornado that makes the mess). First, find
out what they already know. Then instruct if they need it. And
lastly, acknowledge that they did it!
a Financial Planner. She's not a Business Person. She is not
a Church Volunteer. She is not a Rotarian. She is not a Wife.
She is not a daughter. She is my Mom and she is Silly! She did
not understand that the teacher was referring to occupation
or volunteer work. Miranda started explaining how her mom makes
up funny words to songs and pretends to server brussel sprouts
and hasenpfeffer for dinner. Sometimes it can be so easy for
me to get caught up in my schedules and lists. What do I have
to do, when and for whom? Some days it seems like an endless
list. But each day, I make time to make my kids laugh. I always
figured they would remember and appreciate that. Andy they do!
But why not try to make everyone smile? So what if they don't
know you. They will know how you made them feel.
are some little lessons my little one have taught me. I smile
as I think of them. And my smile widens as I think to take them
beyond the walls of my home. While I may not get everything
done, I always get something done. And when stress gets to me,
I should stand up and do a little stretch or dance. I need to
trust that others can get things done. I should see what they
know and if they need help, before offering instruction. I must
remember to give praise for a job well done! And last, but certainly
not least, small jokes and friendly eyes can make a world of
difference to someone having a bad day. Every day is an adventure,
especially in my home. And every day there is a lesson waiting
to be learned, as long as I just stop and listen.
By E. Dennis Zahrbock, CFP
with please and pride I accompanied Sara Kaelberer, CFP to her
first MDRT meeting. MDRT membership is earned by less than 5%
of insurance and financial professionals. Sarah not only earned
membership in her first year of eligibility she also was honored
to be a speaker on 401(k) plans. It is truly excited to have
served as mentor to Sarah's success
lines it is with more please and pride to welcome my son-in-law
Steve Bowman to the firm. Steve received his MBA from the University
of Denver in May and became the Wealth Management Specialist
at Business & Estate Advisers, Inc. on July 1st. With myself
being the "old pro", and Sarah being the "new
pro", we are excited to mentor our new rookie to becoming
great fun for Sue and I to have daughter Lori back in Minnesota,
not to mention having granddaughter Addison and first grandson
"Mallard Teal" expected to arrive in late duck season!
week of September allowed friends and business colleagues form
throughout the United States to enjoy business discussion and
fishing action on Molson Lake in Northern Manitoba. Industry
pros Dan Rigby (Phoenix), Dale Young (Oklahoma City), and Roger
Grove (Los Angeles), showed why they are professionals in financial
services and not in the sport of fishing. To view some of the
action check out http://www.molson-lake.com
Planning segment of our business was formally launched as a
division of Business & Estate Advisers in July. We felt
we had been helping people accumulate money for years in our
Pension/401(k) division so why not further help the participants
with spending and retaining assets during their retirement years.
Educational seminars in the metro area as well as Greater Minnesota
and Northwest Wisconsin are already scheduled monthly throughout
the next year.
to Steve Bowman for passing his Series 7 (securities license)
exam with a passing score of 88%! The national average is 74%.
He also passed his Insurance Exam with a passing score of 88%!
Way to go Steve!
BULLETIN BOARD OF
& Sue spent a week in France being honored as members
of the Top 1% of MetLife's three companies (Met, New England
& General American)
oldest daughter, Miranda, started Kindergarten.
sons-in-law Greg Loxtercamp and Steve Bowman open the duck-hunting
season on the Delta Marsh in Manitoba Canada.
will travel to St. Louis as a member of General American's
Advisory Council. He will later return to attend Top Gun advanced
& Estate Advisers will be sponsoring Jules in the City of
Hope Breast Cancer Walk-A-Thon and Diabetes Awareness Walk-A-Thon,
each 6 miles walks.
is to be featured speaker at the Northeast Wisconsin Association
of Insurance and Financial Planners and also at the Chicago
Association of Insurance and Financial Planners.
and Darvin take their semi-annual trip to the Black Hills.
and Sue are scheduled to go to Branson, Missouri to visit
retiring Chief Underwriter Paul McDaniel and his wife Sylvia.
Over the years the couples developed a friendship that goes
& Estate Advisers to hold 2nd Annual Staff retreat at
the Silver Pine Lodge.
& Sue intend to return to Mission Jamaica for the fifth
year in a row.
Advisory Board Member
Bethlehem Lutheran Church
Q: How did you first become acquainted with Business &
Estate Advisers? Through Dennis, member at St. Philip
the Deacon, when I served there. He helped us with saving
for our children's education.
During your association, what has Business & Estate Advisers
done for you? Helped grow our assets, helped us set up
a plan to meet our goals and worked well (efficiently) with
What, in your opinion, makes Business & Estate Advisers different
from other financial services firms? They are known, frank
conversations about goals and how to get there. We are cared
about and for. Business & Estate Advisers (Dennis) helped
when we had very little and was still very interested.
up once again...
Good thing we gave away sweatshirts
your calendar for Skip-A-Day XVIII on May 20, 2002!
Zahrbock and husband Greg Loxtercamp are proud new parents
of Sabrina, who joined the Zahrbock family on May 2,
2001! Could she more adorable?
and Revised by Business & Estate Advisers, Inc. as an
insert to our newsletter
Business & Estate Adviser's
E. Dennis Zahrbock, CFP
In past "Tips
for Teens" we've discussed everything from offense (stocks, bonds,
mutual funds, etc.), to defense (insurance products), to referees
(IRS) to one Secret to Financial Success.
issue our topic will be The Ugly Duckling or The Beautiful
Swan. Although we have touched on it before, the subject
will be Section 7702(b) or in more common terms Life Insurance.
is always difficult to discuss as many people "tune out" at
its very mention. After having spent nearly 33 years in the
industry there are a number of reason why Life Insurance could
be considered an Ugly Duckling. Here's what I think the top
5 reasons are for it being called Ugly!:
#5: Someone, a parent, a teacher, a magazine reporter
has said it is bad and therefore it must be Ugly!!
#4: The language of the insurance industry seems like
basic English to those that are part of it but seems like advanced
Chinese to those who are not. Where else do you find terms like
settlement option, non-forfeiture value, cash value, surrender
value, waiver of premium, etc. Ugly!
#3: The concept of cash value insurance versus pure
term insurance is very hard to understand. How can something
appear to cost so very little when acquired as term insurance
and so very much when acquired as cash value insurance? Ugly!
#2: Respected mathematicians and financial type people
can prove time and time again that the consumer get the short-end
if cash value insurance is acquired. Ugly!
#1: Most people that sell it don't really understand
it. Some of those that do, still can't explain it! Thus, even
people your respect and you know can sell it think it's bad
so why would you want it! Ugly!
As I earlier
state, I've been associated with the cash value insurance business
for 33 years at this juncture and before I can try to say why
something so "ugly" may be "beautiful" I need to help educate
you on some facts of cash value life insurance.
life insurance is composed of the following ingredients:
A mortality charge which is the "risk expense" to cover those
that die. Mortality charges are lower the younger you are, higher
the older you are. It makes no difference how old you are when
you acquire the policy. When you are age 99 the mortality charge
will be very, very high as so few risks (people) are still in
the pool (alive).
A deposit charge is assessed by the insurer on all premium deposits.
This varies among insurers, but virtually all assess a deposit
An administrative and overhead expense is charged by the insurer
as its margin for handling the risk.
Finally, an investment markup is charged. This simply means
that part of the investment gain is paid to the insurer.
On the positive side are two items: a. Annual premium deposit
is estimated for the insured by the insurer based on the estimates
of the four charges and an interest assumption. b. Annual interest
assumption is an estimate of future investment returns of the
purchasers of today's cash value life insurance do not understand
is that these "four costs" and "two gains" are not guaranteed.
One, or all, of the six assumptions can change.
For Modern Life Insurance:
of year cash value + actual premium deposit + actual investment
gain/(loss) - mortality expense - deposit expense - administrative
expense - investment markup = year end cash value.
is relatively long, but if understood, it can show why an Ugly
Duck can turn into a Beautiful Swan. Before explaining how to
make beautiful we must add the tax effects of Section 7702(b).
For purposes of this discussion there are four important tax
Cash value growth is not taxable as incurred.
FIFO accounting applies if money is every withdrawn. This means
the premium deposits are allowed to come out first! Since premiums
are paid with after tax income this means that withdrawals are
not taxable until they exceed the premiums paid.
Loans may be requested by the policy owner. The policy cash
value is the collateral. In Section 7702(b) policies these loans
are not considered taxable income. Be careful though, for in
Section 7702(b) policies they are!
At death of the insured the total death benefit is free of both
income and capital gains taxes.
how do you make an Ugly Duckling into a Beautiful Swan? The
best way to explain the transformation is to crate a hypothetical
Gain ("net" 9%)*
of Year Cash Value
Assume gross return of 10% with a 1% investment fee deducted
and then 9% of ($1,000 + $1,000) - ($500+50+50).
the fact that we have life insurance, for the $500 mortality
charge, this example still appears ugly.
to make it beautiful we need to voluntarily make larger premium
deposits. To maximize "beautification", we need to make the
highest premium possible under the law. Contrary to popular
belief a low premium may not be the best deal for the insured!
Gain ("net" 9%)*
of Year Cash Value
assume a deposit higher than $1,000 every year thus our same
policy starts with $10,000. Why can an extra deposit make such
a difference in our cash value growth? Mathematically the answer
is very simple: 1) Mortality costs are the same, thus use less
of the policy values. 2) Administration and overhead expense
is the same. 3) Deposit charges are proportionally higher. 4)
Investment gain is the same net percent.
grasp beautification, think of what happens in a taxable investment.
You start with something, you add something, and taxes would
take away something. Then you have an ending value. True beautification
takes place when you discover that taxes are often higher that
mortality, deposit, administrative, and investment expense combined.
be included in every calculation, but are seldom fully discussed.
Simply ask yourself "If taxes are 30% and insurance charges
are less than 30% which would I prefer to pay?"
of our studies we have generally concluded that during the first
ten years of a cash value life insurance contract cumulative
taxes would be less than insurance expenses but after ten years
cumulative taxes will be more that insurance expense! Just as
it takes time for an Ugly Duckling to grow into a Beautiful
Swan, it takes time to make cash value life insurance beautiful.
Cash Value Life Insurance is always a good place to accumulate
money. Y N
charges are higher if you deposit a higher premium. Y
potential tax expenses exceed potential insurance expenses
it is a good idea to accumulate funds in a cash value
policy. Y N
insurance is considered ugly because it is misunderstood.
of the code can make cash value life insurance beautiful
CORRECT ANSWERS WILL RECEIVE A PRIZE! PLEASE MAIL OR FAX
RESPONSES TO P.0. Box 679, WAYZATA, MN 55391 OR FAX (952)