Page 25 - Know-So Money, Hope-So Money, Retirement Secrets Wall Street Doesn't Want You to Know

How Safe is Safe?

Fixed annuities and life insurance contracts emphasize safety above

everything else. In fact, financial experts consider fixed annuities and
life insurance, CDs and treasuries as the safest monetary instruments
available. And of the three, fixed life insurance products have by far the
very best track record.

Now I know how that sounds. Please just read on and I will explain

why that is.

People often wonder if annuities are FDIC insured? And the answer is
no, they are not. But they actually have a better record of depositor
protection in the event of company failure than the FDIC.

How can this be?

Fixed insurance and annuity policies are protected by the Legal
Reserve System. The Legal Reserve System dictates and enforces very
strict controls and safety measures on how money under its oversight is

managed.
Why is FDIC Insurance necessary?

Banks can have up to a nine-to-one ratio of liabilities to capital. Here’s
what that means. If you deposit $1,000 in a bank, the bank can go to the
Federal Reserve and borrow up to $9,000 against that $1,000. Then, the
bank can lend that money out to personal loans, credit cards, run
businesses, and all the other commercial lending activities a bank
engages in.

They get in trouble, however, when they start to get greedy like what
happened during the years prior to 2008 when they started lending to
financial markets and investing in derivatives and all kinds of things

16