Missed Fortune: Dispel the Money Myth-Conceptions--Isn't It Time You Became Wealthy? (Paperback)

~ (Author) "About 4 percent of American households have a financial net worth in excess of $1 million..." (more)
Key Phrases: liquid side fund, equity retirement planning, fixed universal life, Social Security, Internal Revenue Code, Uncle Sam (more...)

Editorial Reviews

Product Description

Most of us dream of becoming wealthy. While some take steps to achieve it, few realize the goal. Why? According to financial planner Douglas R. Andrew, flawed financial strategis - or what he calls "money myth-conceptions" - lead us down the wrong road. In his revolutionary financial guide, MISSED FORTUNE: Dispel the Money-Myth Conceptions - Isn't it Time You Became Wealthy?, Andrew rattles conventional attitudes about personal investments and challenges readers to build wealth with new and - and very contrarian - strategies.

About the Author

Douglas R. Andrew has extensive experience in business management, economics, accounting, gerontology (as it relates to the economics of aging), financial and estate planning, and advanced business and tax planning. He is currently the owner and president of Paramount Financial Services, Inc., a comprehensive personal and business financial planning firm with several divisions.

As a retirement specialist, Doug shows people how to accumulate money on a tax-favored basis to achieve the highest possible net spendable retirement income. His firm, Paramount Financial, helps people to successfully manage equity to enhance its liquidity, safety, and rate of return, as well as maximize tax benefits. Paramount Financial Services, Inc. and Potomac Group West, Inc. have formed Wealth Enhancement Strategies and Creative Opportunities (WESCO), an entity created for the purpose of helping affluent individuals enhance and perpetuate their wealth. Douglas Andrew is a national advisory board member of Empowered Wealth LC, a company dedicated to optimizing not only financial assets, but also human and intellectual assets. --This text refers to an out of print or unavailable edition of this title.

Product Details

• Paperback: 560 pages
• Publisher: Business Plus (April 1, 2004)
• Language: English
• ISBN-10: 0446693502
• ISBN-13: 978-0446693509
• Product Dimensions: 8.8 x 6 x 1.6 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (43 customer reviews)
• Amazon.com Sales Rank: #310,724 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

171 of 188 people found the following review helpful:

1.0 out of 5 stars Check out what a CFP says firsthand., May 22, 2005

By	Concerned Cit "Concerned Cit." (CA) - See all my reviews

I came upon an ad by the author, Mr. Andrews in the Sunday Los Angeles Times today - 5/22/05. It mentioned his book as well as a lot of claims to max ones wealth. So, I thought to do a bit of a google search on him and the title of his book. I did finally find a review by a Certified Financial Planner on the Seattle times website: http://seattletimes.nwsource.com/html/businesstechnology/2002192636_qa_retirementhotline.html

I thought it wise to share this with anyone intersted and feel that most who read the following may want to hold back on buying his book.

Equity Indexed Life Insurance-I have been approached by several insurance agents regarding using equity indexed annuities to creat an arbitrage using home equity. They are basing their approach on a recent book written by Douglas Andrew-Missed Fortune and Missed Fortune 101- suggesting interest only mortgages and investing the equity in S & P 500 indexed annuities. Invest the max amount allowable under law with the least amount of insurance required, etc. What are your thoughts on this strategy? Have you read or heard about this book and the author? - Cary, N.C.

FP: I just finished reading the book "Missed Fortune". The concept is interesting and may make sense in a very few specific cases, I would be wary of its general applicability. The book fails to adequately address the risks inherent in the strategy.
The first part of the strategy I would be concerned with is the notion that you can structure interest only loans to last a long time. Interest only loans typically have an interest only period of 10 years or less.
The most "attractive" interest rates are associated with adjustable rate mortgages. Most of these have fixed rate periods of 3, 5 or 7 years. So, for the strategy to work as advertised, you will need to refinance (or sell and purchase another home)as often as every 7 years or less. And then you will have to hope that (a) you will qualify for new financing and (b) that today's low rates are available.
The strategy presented in the book assumes that your home interest is fully tax deductable. The analysis does not account for the fact that most people actually only receive a partial deduction since their itemized deductions aside from the home mortgage interest add up to substantially less than the standard deduction (which is scheduled to rise over time).
And finally, the strategy assumes that you will earn a relatively high rate of return on the equity index life insurance cash value. Every projection the book makes has an unreasonably high rate of interest projected for a long time into the future. The strategy prospects for success are highly sensitive to the rate that you acutally receive.
If the insurance policy return is as little as .5 - 1% less on average, the strategy has real problems. And the problems can be huge.
If you are drawing "tax free" income out of an insurance policy through a series of policy loans as shown in the book, the policy surrender value drops steadily. When the policy surrender value drops to zero, which it could quickly if interest rates are less than hoped for, the policy lapses and all the interest that has been credited on a tax deferred basis suddenly becomes taxable income.
The author's answer to this problem is to suggest that the IRS is unlikely to go after a 90 year old for that kind of tax. You wouldn't want to test that theory.
The bottom line is that there is no free lunch. The equity index insurance products ability to credit interest to the cash value is essentially the same as any fixed insurance product. The fact that the interest credit is "linked" to the S&P 500 index is very different from actual market participation. It's just a calculation that happens to use some aspects of the S&P 500 index performance in the formula.
While the products do provide protection against market losses, that protection comes at a price. The price is that they will not and cannot produce long term returns similar to market returns.
For people in the highest tax brackets who are not going to depend on the insurance policy performance to provide retirement income and who will save enough in income taxes to offset the inherent costs in the strategy, there may be a place for this strategy. Aside from this narrow group of people, trhe strategy is almost certainly inappropriate.
People should recognize that this is a very complex strategy with many pitfalls that are not well presented or analyzed in the book. Be very careful!

49 of 52 people found the following review helpful:

4.0 out of 5 stars Great Ideas but I'm very concerned UPDATED MAY 2008, June 9, 2006

By	Cindy J. Schreiber (Thousand Oaks, CA) - See all my reviews (REAL NAME)

Ideas in this book are outstanding. Sure opened my mind to a higher level of consideration regarding ways to handle money more tax efficiently. I am OK with the push for Equity-Indexed Life Insurance ... in a bull market environment. What about an extended bear market or a flat market? It's nice to state repeatedly that the stock market S&P 500 80-year average is about 8% and base the entire book's illustrations and models on that. However, we are now in the 6th year of no performance on the S&P 500. PLEASE NOTE I WROTE THAT SENTENCE OVER A YEAR AGO. I HAVE A NEW UPDATED S&P 500 STATISTICAL RETURN ACCORDING TO VANGUARD MUTUAL FUND LITERATURE - THAT THE 8 YEAR S&P 500 FROM MARCH 2000 THROUGH THE END OF MARCH 2008 IS AT 3.8% ANNUAL AVERAGE RETURN - A FAR CRY FROM THE 8% STATISTIC USED BY THE BOOK'S AUTHOR. If you entered the markets (buying the index fund or buying the life insurance with repositioned assets) on January 1, 2000 then as of today you would be looking at a 3.3% averaged 6-yr return AND AS I JUST STATED NOW VANGUARD HAS RELEASED THE 8-YEAR STATISTIC. BOTH ARE ABYSMAL. Today (June 8, 2006) that low return got royally whacked and dropped the S&P 500 to a -3% YTD. The idea of these policies is to maintain that approx 8% average. So far that Jan 2000 purchaser has not nor has any purchaser since 2003 either. What happens if you don't achieve that result and you are 50, 60, 65+? How can you 'fund that bucket' with subpar index returns such as these? The answer is -- you simply can't. You won't have enough years to generate enough cash accumulation to service your retirement needs. It's common sense - it won't happen. It's lovely to say 'you will never lose, no matter what you will always get at least 1% a year.' Great. In the book Andrews gives examples of a minimum of 3% and an unlimited return but most of the policies the agents are using now are one of two companies, one giving a low of 3% at minimum and a 12% maximum cap, the other giving a low of 1% at minimum but the trade-off is they will cap you at 17%. I have a flexible premium Universal Adjustible Life policy from 10 years ago WHICH IS NOT AN EQUITY INDEXED PRODUCT BUT IS ALMOST IDENTICAL IN THE MANNER OF WHICH IT OPERATES and I can tell you even that one has not performed. It is pure life insurance. To most people that sounds great ... till I get into my 60's and 70's and the cash accumulated will not be sufficient to pay the increasing term insurance premiums built into these policies to meet the government requirements. Right now at age 52 my interest at 4% just meets my costs. It won't in about 10 years. It REALLY won't in 20 years. I'll be 72, draining capital and facing a taxable scenario even tho the money will be gone. And this is a 4% return right now for me. Imagine the S&P 500 doing worse than that LIKE 3.8% ANNUALIZED RETURNS, like if it is just flat (a very real possibility) OR ONE RECEIVES AT LEAST THE 1% GUARANTEED RETURN. I will not have enough capital to overfund that puppy which is a moot point because you must fund in the first 5-7 years of purchase to meet the government requirements. That means if I did have the capital, I would have to get a new policy and who knows if medically I will qualify at age 72 to be underwritten for life insurance.

Many of the financial planners that are quite sold on Doug Andrew's concepts present illustrations at 7% and 8%. It never crosses anybody's mind that this just might not be the case AND MORE THAN 8 YEARS LATER IS MOST DEFINITELY NOT THE CASE. The problem with the general public is, they don't know the right questions to ask. So they buy these policies based upon those juicy illustrations, forgetting to read the fine print - there is no guarantee your policy will perform as illustrated. People, you have to be smart. You have to know what they know. I am not saying don't buy these policies. I am saying you must be aware & committed to overfunding that 'bucket' and age has to be in your favor. I myself am not banking on the performance of the S&P 500 in today's horrid economic climate. It really is possible that we are in an extended period of rotten stock market performance AND A YEAR LATER AS I AM AMENDING THIS REVIEW IT DOES CERTAINLY SEEM TO BE THE CASE.

For those of you that have read Robert Kiosaki's RICH DAD POOR DAD (which the Andrews Team recommends) then good for you. Next go read RICH DAD'S PROPHECY. Digest that one. What happens when the first of the Boomers reaches 70 1/2 and MUST start drawing their pension benefits by law? Is anybody really aware just how much money will have to leave the markets? That is really food for thought. Rich Dad projected the years 2012 - 2016 as the beginning of that disaster. Then combine that with today's rising inflation, rising interest rates, pensions going broke, more pensions severly underfunded with no chance of being brought up to any acceptable level (no profits, won't happen) and the world situation especially the capital committment in this country for the war on terror -- oops forgot to mention the very real nightmare of rising health costs AND THE SUBPRIME/CREDIT CRUNCH FIASCO AND INFLATION AND THE COST OF ENERGY/GAS BECAUSE TODAY, MAY 2008, THE NIGHTMARE IS REALLY IN FULL SWING -- take a look at what America will have to do to keep the foreign capital invested in America (because if that gets repositioned into more attractive investments paying higher interest say, the Euro offerings) then we are in BIG trouble. I for one can't figure out where the money is going to come from to make us a SuperPower again. Too many problesm, too much corruption, too much bankruptcy in America on all sides of the equations. So for me, I have to say, while I enjoyed the book and got a lot of ideas from it, I am very very concerned with what I suspect will be non-performance of the underlying insurance policies based upon the S&P 500..

Having said all the above (thank you if you read it) I must tell you I am NOT a permabear. As my financial advisor says, there is always a bull market somewhere in the world, it just might not be in America!! (Try China, Australia, New Zealand, Switzerland, Brazil and Canada ...) I still recommend the book as a good thought provoker.

244 of 279 people found the following review helpful:

2.0 out of 5 stars Some good ideas, way way oversold..., September 19, 2004

By	Ken Walsh (Tucson, AZ) - See all my reviews (REAL NAME)

There are two lessons in this book worth considering:

1. Paying down your mortgage lickety split may not be a great idea as your equity assets aren't very liquid, aren't particularly safe in your house, may actually increase the likelyhood you get forclosed on, and in some environments might not be the best return on your money.

2. Universal life insurance has various tax benefits that may make it a good alternate or supplement to 401K/IRA plans depending on your investment and estate transfer goals.

I give Mr. Andrew one star for each idea. The rest of the book is oversold hype and downright intellectual dishonestly, not untypical of many "finacial planning" books. He constantly says to not pay close attention to the numbers, but rather the concepts. Unfortunately many of his concepts completely fall apart when you look at the numbers, and in some cases his numeric examples are down right dishonest.

First, the good part. The first five or so chapters make a very good case for storing money in a interest bearing side account instead of paying down your mortgage fast. You hear many people say they do this to make more money than they'd save on thier interest. Mr. Andrew makes some excellent points why one would want to do this even without any additional return, or to my mind even a little bit of loss. Namely, extra payments to mortgages are nearly impossible to get back out of the house when you need them. These chapters are definately worth a read in the library, or given the quantities of money involved in a mortgage even purchasing the book before you start extra principle payments on your mortgage. He over hypes a few points in this part of the book, but on the whole very good advice worth one's serious consideration. Where he fails is by making a false case that it is always trivial to find an investment to put your saved money into that will beat the mortgage interest. If it was that easy no idiot would sell mortgages in the first place. Again, to my mind he makes a number of points worth considering even if you only just barely match the mortgage interest rate.

Now the bad. The last half of the book is about using a universal life insurance policy instead of a 401K/IRA for retirement savings. Mr. Andrew does a good job, though a bit long winded, explaining the concept here. He also points out some of the important benefits that life insurance would have over 401K/IRA. Unfortunately he frequently uses very dishonest math to show that life insurance will greatly outpace a 401K/IRA. In one case he doesn't account for life insurance contributions being after tax. In others he double counts tax deductions from mortage interest. In others he assumes one finds the cheapest life insurance and yet doesn't comparatively shop for an IRA plan. To me this is where the book falls apart. The life insurance concept was unknown to me and I'm glad I now know about it. But it was so oversold and the math done so poorly that I had to go do numerous scenarios in Excel, and what I found was that he made very unrealistic assumptions on both sides of the equation and when those imbalences were removed 401K/IRA and life insurance came up about the same. Again, there are situations in which one would be more advantageous than the other, but Mr. Andrew makes no effort to illustrate these. He mearly oversells insurance as a panacea that is for everyone.

In summary, I guess the book is worth its money just for the first five chapters, but I'd check in the library first. And I'll have to give Mr. Andrew for having more content and more sound advice than that "Rich Dad, Poor Dad" garbage - but that isn't much of a complement.