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​3 Enemies of Money Blog
What They Are and How They Affect Your Financial Planning 

April 08, 2025

When it comes to financial planning, many factors need to be considered when making crucial decisions with your finances.  Unfortunately, very costly mistakes are made because of 3 topics I like to call "Enemies of Money".  Let's take a look at these 3 topics:

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  • Taxes

  • Inflation

  • Procrastination​

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First Enemy of Money: 
TAXES

There are 4 MAJOR Retirement Taxes:

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  • Social Security Taxes

  • Capital Gains Taxes

  • Interest Income Taxes

  • Estate Taxes

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Social Security Taxes

Uncle Sam determines how much you pay in Social Security taxes by these 3 criteria:

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  • Social Security Income

  • Pension Income

  • And For Each $$$ That Exceeds:

    • Married Couple:  $32,000 | Single:  $25,000 | Tax Rate:  50%

    • Married Couple:  $44,000 | Single:  $34,000 | Tax Rate:  85%

Capital Gains Taxes

Capital gains tax is a type of tax imposed on the profits earned from the sale of capital assets by individuals or corporations. These capital gains represent the financial gains an investor makes when selling an asset for a higher price than the original purchase cost. The tax rate applied to these gains may vary based on factors such as the holding period and the taxpayer's income level.

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Common examples of capital gains include the profit generated from selling real estate or liquidating stocks at a higher value than the initial investment. When an investor realizes a gain from these transactions, they may be subject to capital gains tax, which can differ based on whether the asset was held for the short term or long term.

Interest Income Taxes

Interest income is the earnings generated from various financial assets, including deposits held at banks and credit unions, investments in money market funds, bonds, and loans such as seller-financed mortgages. Individuals and businesses can receive interest income as compensation for lending their funds or maintaining balances in interest-bearing accounts.

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For tax purposes, interest income is classified as ordinary income and is therefore subject to standard income tax rates. This means that the amount earned as interest is combined with other sources of taxable income when determining the overall tax liability. The specific tax rate applied will depend on the taxpayer's income bracket.

Estate Taxes

An estate tax is a federal levy on the transfer of a deceased person's assets before distribution to heirs. As of the end of 2024, the exemptions are:

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  • $13.61 million per individual

  • $27.22 million per married couple

 

NOTE: The current federal estate tax exemption of $13.99 million per individual (or $27.98 million for married couples) is set to end on December 31, 2025. Beginning in 2026, the exemption is scheduled to revert to approximately $6 million per individual (adjusted for inflation), as the provisions from the 2017 Tax Cuts and Jobs Act expire.

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AT JNFIS, let us show you how to minimize ALL those taxes.

Second Enemy of Money: 
INFLATION

Inflation is an enemy of money because it erodes the purchasing power of your savings over time. As the cost of goods and services rises, the same amount of money buys less, making it harder to maintain your lifestyle or reach financial goals. Even modest inflation can significantly reduce the value of your savings and investments if not properly managed. Since 1913, the average rate of inflation per year is 3.10%. To combat inflation, it's essential to invest in assets that have the potential to grow faster than inflation rates. Without proactive planning, inflation can slowly but surely eat away at your wealth.

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AT JNFIS, Let us show you where to put your money to beat the rate of inflation.

Third Enemy of Money: 
PROCRASTINATION

Procrastination is an enemy of money because delaying financial decisions can lead to missed opportunities for growth and security. Putting off saving, investing, or purchasing insurance means you lose valuable time for your money to work for you. The longer you wait, the harder it becomes to reach your financial goals, as you may have to contribute more or take on greater risks later on. Taking action now is key to building a solid financial future.

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Here are the 6 Steps of Procrastination:

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  • False Security

  • Laziness

  • Excuses

  • Denial

  • Crisis

  • REPEAT...

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Yesterday you said "Tomorrow"...  Tomorrow is here and now.  Let's get started and start saving today!

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To recap, the 3 Enemies of Money are: TAXES | INFLATION | PROCRASTINATION

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Let's look at solutions on how you can eliminate the 3 Enemies of Money...

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On average, most people can save $300 - $500/mo. Once they save that $$$, where do they put it?  Let's take a look at 3 very different options to see what happens to that $$$ once they are in those options:

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Banks | Insurance | Professional Money Managed Accounts...

You have 3 tax options for your money:

 

TAXABLE | TAX DEFERRED | TAX FREE  

 

You can have one or two of these options, but not all 3.  Let's see what tax categories the Banks, Insurance, and Professionally Managed Accounts fall under...

BANKS

  • Checking / Savings / CD / Money Market

  • Rate of Return: less than 2%.  Does NOT beat the Rate of Inflation

  • Benefits include Liquidity / Guaranteed by the FDIC

  • Income Interest TAXABLE now at the end of the year

 

INSURANCE

  • Participating Whole Life / Indexed Universal Life

  • Rate of Return: can average between 2-15% based on the type of plan, with historical returns consistently beating the Rate of Inflation

  • Benefits include TAX DEFERRED Growth / Death Benefit Protection / Tax Advantages (no taxation on cash value life insurance IRC 7702) with TAX FREE distributions / Safety of Principal with Guarantees

 

PROFESSIONAL MONEY MANAGEMENT 

  • 401(k) / IRA / Mutual Funds / Annuities

  • Benefits include Diversification / Professionally Managed

  • Income Interest is TAX DEFERRED but TAXABLE at the time of distribution

  • Money is potentially at risk of loss if invested into the Stock Market. Potentially can beat the Rate of Inflation in an up market, but will NOT beat the Rate of Inflation in a down market.

All 3 of these options fall under the following categories:

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TAXABLE: Pay Tax NOW... Stocks | Mutual Funds | Savings Accounts | CDs

Deposits and contributions are made with after tax $$$ and are TAXABLE at the end of the year, when you will get a 1099 Form to pay tax on your gains.

TAX DEFERRED: Pay Tax LATER... 401(k) | Traditional IRA | Annuities

Qualified Plans use pre-tax $$$ and gains grow TAX DEFERRED.  Distributions prior to age 59 1/2 will incur an IRS Early Withdrawal Penalty.  Mandatory withdrawals must be made at age 70 1/2 or incur tax penalties up to 50%.  Distributions are 100% TAXABLE.


TAX FREE: Pay NO Tax (Tax Advantages: Cash Value Life Insurance)

Premiums are paid with after-tax $$$ with the cash value growing TAX DEFERRED, guaranteed rate of return with on cash value with Whole Life, potential market-like returns without risk of loss with Indexed Universal Life, cash value distributions are TAX FREE via the loan provision (IRC 7702), death benefit is income tax free, cash values are private $$$ and in most states protected against liens and creditors, and finally provides protection against dying too soon, living too long, or becoming sick or disabled.


So the question is:

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  • Do you want to put your money into an account that is TAXABLE at the end of the year and does NOT beat the Rate of Inflation?  or...

  • Do you want to put your money into an account where your money grows TAX DEFERRED, but is 100% TAXABLE at the time of distribution? Remember, your money is also at risk of loss in a down market.  or...

  • Do you want to put your money into an account that grows TAX DEFERRED, gives you safety of principal with guarantees, protects you against loss in a down market, historically beats the Rate of Inflation, and gives you TAX FREE distributions? 

 

The answer is obvious:

 

Cash Value Life Insurance.  This will give you the best tax advantages to minimize your tax liability, cash values grow TAX DEFERRED, the rate of return consistently beats the Rate of Inflation, and with the loan provision, TAX FREE distributions.

 

Let's get started today and DO NOT PROCRASTINATE!  Remember, you have to qualify for life insurance, and the earlier you start, the less the costs of participating while maximizing your ability to realize compounding interest.  Time is more expensive than money.  Do not procrastinate. 

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Let's get started today!

Learn More About Tax Advantages of Life Insurance

(800) 900-3150  |​
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