Dynamic Chiropractic – November 4, 1994, Vol. 12, Issue 23

Money in the Bank

By Stanley Greenfield, RHU
Do you have money in the bank? Is it safe? Is it insured? I'll bet it is. The good old Federal Deposit Insurance Corporation (FDIC) -- long may it live. You can sleep easy at night knowing that your money is safe and secure, even if the bank goes belly-up.
Uncle Sam will just step in and give you back all of your hard-earned money. That sure is a good feeling. I'll bet that your cars and home are insured too. No one would want to walk around with their assets left totally exposed. It does sort of give you a good warm feeling that at least you don't have to worry about those things.

Are you sure that all of your dollars are covered? Think about that for a moment. Your practice gives you a nice living each and every year. Yes, it was a struggle to get started, but now it just seems to flow in. Isn't that nice? I'll bet you take every dollar that comes in and put it in your favorite bank that has the FDIC sticker on the front door. After all, that's the only smart thing to do. Everyone knows that. It just makes good business sense. Have you every considered putting that money in a bank that isn't covered by the FDIC? They would pay you more interest on your money, but who wants to run that risk? It just isn't worth it. How true. This way, you and your family never have to worry about those dollars being there. That insurance does buy you a lot of peace of mind. Yes, it does cost you some interest for that coverage, but it's worth it.

Your practice is probably the best investment you will ever make in your life. Let me explain. What amount of cash invested in the bank would it take to yield the income stream that you now enjoy each and every year? If you are pulling out $50,000 every year, it would take $500,000 at 10 percent to yield that amount. To be more realistic, let's assume an interest rate of eight percent. In that case it would take a nest egg of $625,000. Wow! I'm sure if you had that amount, it would be in a bank that is insured. If you are drawing $100,000 per year, it takes $1,250,000 at eight percent. You say you just started and are only taking out $30,000? Well, it still takes $375,000 in the bank at eight percent to yield that. Like we said earlier, no one would risk that kind of income by putting into a bank that is not insured.

I hate to be the bearer of bad news, but that is exactly what you have done. Not with your current flow of dollars, but with the future flow of dollars for your family. That flow will only continue as long as you are able to get up each and every morning and get to the office and see patients. As soon as you check out, so does the flow of money. Isn't that a shame? And so unnecessary too. You have your money in a bank that is insured now, and you wouldn't even consider keeping it there if they didn't have insurance. That insurance cost you each and every year almost one percent interest, but it's worth it. Isn't it worth one half of one percent to make sure that money is "insured" even if you aren't here so that your family can continue to go on living? That's a lot of peace of mind that can be bought for a very small price tag.

I'll bet that if you keep all of your current money in your bank and one day retire, they won't even send you a thank you card! Wouldn't it be amazing if they sent you back ALL of the money that they charged you for all those years for the FDIC coverage plus interest?! Trust me, it will never happen. Well, if you make sure that your family's future cash flow is "insured" and you don't die, that is exactly what will happen; all of your money back plus interest. It's a nice plus for being prudent and caring for your family.

Stanley Greenfield, RHU
Rockville, Maryland

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