Although most people look for guarantees, the advantage of equity investments still remains for beating inflation on an after-tax basis and for rapid accumulation of investment dollars. The answer is to recognize the value of diversification by placing money in a variety of products. Consider the value of employing a mix of cash reserves, cash value life insurance, tax deferred variable annuities and a total return of growth mutual fund versus a single guaranteed fixed return. To show the powerful principle of diversification, consider the following scenarios:

A. A $100,000 investment with a guaranteed fixed rate of return of 8% will grow to $684,850 after 25 years.

B. The same $100,000 could be evenly diversified between five separate investments each with a different degree of risk. One could lose all of its value, one could remain even, one could gain 5%, one could gain 10% and one could gain 15%.

The net result would be an accumulation value of $962,800 after 25 years or $277,950 more than the guaranteed investment. Although two of the investments were underperformed by the guaranteed investment, the diversification into other assets which did perform well provided a greater long term total return.

$100,000 invested at 8% for 25 years would grow to: $684,850

$20,000 at a Total Loss -0-

$20,000 at 0% return 20,000

$20,000 at 5% 67,730

$20,000 at 10% 216,690

$20,000 at 15% 658,380

Total All Investments 962,800

Working together, a variety of products will build a stronger financial program with greater possibility to offset inflation.