Albert Einstein was ahead of his time. He revolutionized the thinking of physics and his theory beginning with the breakout year of 1905 is still the basics of quantum physics today, over 100 years later. When Einstein is remembered for his work it is almost always E = mc², the theory of relativity. However I think a more interesting part of Einstein’s life was his view on compound interest.
Albert Einstein called compound interest “the greatest mathematical discovery of all time.”
The Power of Tax Deferral
Compound interest allows the account to grow by earning interest on the original investment and any accumulated interest. Here is a generally accepted definition of compound interest.
Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. Compound interest differs from simple interest in that simple interest is calculated solely as a percentage of the principal sum.
Compound interest is offered by banks and saving institutions and is also referred to as Double Compounding. The downside is when the interest is credited to your account it comes with tax liability. The interest is credited but it is taxable.
Insurance companies offer products that allow for tax deferral and compounding but under certain situations can defer also the tax liability. These products are called annuities and life insurance. As long as the accumulated funds are left untouched the tax liability is deferred.
This concept is referred to as Triple Compounding.
If some of your savings are placed in an annuity the benefit of tax deferral provides for:
• Interest on your principal
• Interest on your interest and
• Interest on your tax savings…because your interest is free from current income tax in an annuity, it can all continue to compound instead of being withdrawn for tax payments.
Is that all there is? No! There is also Quantum Compounding.
Quantum Compounding is building on Triple Compounding by adding features only found on certain insurance company annuities.
• Bonus of 5% to 10% of funds deposited, immediate and guaranteed
• Long term care benefits
• Lifetime income provisions
• Annual moveable minimum guarantees
• Complete safety, full guarantees against loss and risk`
• Enhanced benefits for the beneficiary
• Probate avoidance
Consider the use of Quantum Annuities for added benefits and added value to yourself and your clients.
Bill Broich is thirty year annuity salesman who helps agents generate leads and sales. To discover more visit his website: Annuity Leads
Tags: annuities, annuity, clients, interest rates, investing, marketing, prospects, quantum, selling
