Wealth strategist Tad Fallows discusses life insurance vehicles with host Sean Weisbrot, advising against buying permanent or whole life insurance policies.
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Fallows: Almost none of 7,000 ultra-high-net-worth community members hold permanent life insurance
“In our community of about 7000 people who are Either very high or ultra high net worth and, you know, price of a scan, these things, pretty much nobody carries one of these permanent life insurance.”
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Fallows: Half of High-Net-Worth Community Members Have No Mortgage
“So half our members don't have a mortgage at all on their house.”
Insight
Fallows: Offshore trusts in places like Cook Islands create more risk than protection
“I think that's a pretty dangerous thing to do. The only reason that's relevant, if you are doing something really shady and any proper legal system would come after your assets and now you've parked them in the Cook Islands, but you know, one, that's probably …”
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Fallows: Historical private equity returns average 10% to 12% versus 8% to 10% for public equities
“I think it's fair to say that on average, historically, the returns of private equity have been somewhat higher than public equity. Not three or four times as high, but if public equity is delivering eight to 10%, maybe private equity is delivering 10 to 12%.”
Insight
Fallows: Entrepreneurs and High Earners Handle Sudden Wealth Better Than Athletes
“So I think, you know, if you, if you're coming from a background which is significantly more common for somebody who generates significant wealth as let's say an entrepreneur, or maybe you are a high paid employee at a tech firm, you're a high paid employee at…”
Assertion Not checkable as stated
Fallows: High-Net-Worth Community Allocates Well Below 10% to Bonds
“We do a annual asset allocation benchmarking survey and ask, hey, between
Stocks, bonds, cash, crypto, private credit, private equity, oil and gas, et cetera.
Where do you keep your money?
And I'd say the bond allocation is well south of 10%.”