Risk Management
We believe it is essential for our clients to understand that they do not need to exceed any risk levels that make them uncomfortable.
Even though the stock market has its roller-coaster moments, the downturns are ultimately overshadowed by more extended periods of sustained growth.
That is the reality on paper. If only our brains accepted that and did not trigger emotion-driven reactions — like selling during market dips and possibly missing the eventual uptick.
We believe it is essential for our clients to understand that they do not need to exceed any risk levels that make them uncomfortable.
Determining how fast you are comfortable traveling on your investment journey is the first step in helping your advisor develop an investment strategy that is perfect for you.
Gone are the days of stereotyping investors with subjective semantics based on their age. It is time to act in the best interests of investors and prove it quantitatively.
Everyone has a Risk Number.
Let us find yours.
Our team at Tesla Wealth Management applies Cash Value Life Insurance anchored solutions to accumulate funds in a safe and market-downturn protected environment. While our clients' investments toil night and day, we help them sleep well at night.
Learn more about how to use Cash Value Life Insurance in your Retirement Planning.
Cash Value Life Insurance is much safer than investing in the stock market.
Why? Three reasons:
(1) The insurance companies are levied to maintain a General Account Portfolio Yield or a GAP yield. The fund represents the insurance company's legal reserves, which is the money safely tucked into very conservative investments—like AAA bonds.
(2) The insurance companies practice REINSURANCE to transfer their risk portfolios to other parties and diversify the risk.
(3) Life Insurance companies use HEDGING to prevent large losses when the stock market is adverse.
When we discuss optimizing retirement savings, the goal is to risk less and minimize the losses during stock market downturns.
Therefore, the insurance companies also use the collar strategy, commonly known as a hedge wrapper. It is an options strategy implemented to protect against large losses. This design allows low and steady premiums, provides low charges, and prioritizes long-term protection and security.
Did You Know?
Indexed Universal Life insurance or IUL is the type of Cash Value Life Insurance where the insurance companies use hedging strategy to prevent losses during stock market downturns.
The Collar represents the companies cap and floor.
The lowest point of the collar is the strike price of a protective put, build inside. The collar's minimum also represents the life insurance company's floor. Below this value, the put will offset any further decrease in the stock price.
The collar's maximum value is also the strike price of a written covered call. It represents the insurance company's cap. Above this price, the holder of the collar, the insurance company, will get the stock's strike price.
The emphasis here is that this design allows low, steady premiums, provides low charges, and prioritizes long-term protection and security.
KEY TAKEAWAYS
Think about it--through devastating world wars, financial recessions, depressions, sweeping epidemics, earthquakes and fires, inflation and deflation, the life insurance industry has protected people to a degree unmatched by any financial institution in the history of the world. Today the life insurance industry provides more than a trillion dollars of death protection to American consumers.
At Tesla Wealth, we believe it is essential for our clients to understand that they do not need to exceed any risk levels that make them uncomfortable.
Therefore, we teach the Balanced Approach--the financial strategies to build wealth both under the wing of life insurance companies and the stock market.
After all, it is not necessarily how much money you have that is important—it is how much you get to keep that matters.
Contact our team at Tesla Wealth to create an easy-to-understand analysis specific to your situation. Give us a try and Build Your Legacy with Tesla Wealth Management.
