Life Insurance of the Rich & Famous – Part 2
I recently got a phone call from an upset gentleman who, when I picked up the phone, immediately quipped, “why do you keep writing about whole life insurance being a good investment in your blog? Don’t you know all the financial experts say that whole life is NOT a good investment?”
I told the man that I too, have heard all about what the “financial guru’s” say regarding whole life and I have seen many of the disparaging articles they write. But I also told the good and rightfully confused man that there are also many good articles – articles that he probably has missed – about how whole life insurance REALLY works and how life insurance can be a great investment.
I explained that many people focus on the negative articles and seem to ignore the positive ones. And that’s why I write this series about life insurance. So people can learn that life insurance can be a great asset to own, regardless of what the stock market does.
So here is another true story about a famous person who used his life insurance polices to build an empire:
In 1898 James Cash Penney began his career in retailing by working as a clerk in a small country store called Golden Rule. He worked under the 2 owners of the store who found James to be a very enterprising young worker.
It wasn’t long after James was working for his 2 employers, that they asked him if he would be interested in joining their partnership. James jumped at the opportunity and within 5 years, he was instrumental in opening 2 more stores for the owners.
In 1902, the partnership of the owners fizzled. The owners asked James if he would be interested in buying the company outright. Always looking for an opportunity, James bought the interest in all 3 store locations. The next year, James moved his company to Salt Lake City, Utah and incorporated under a name almost everyone recognizes. today; The JC Penney Company.
The JC Penney chain of stores quickly grew and by 1924, James opened his 500th store across the Country. By 1928, James had opened more than 1000 stores.
In 1929, the stock market crashed and the nation plunged into a deep recession devastating his stores and his wealth. James was teetering on financial ruin.
Unlike many people at the time, James never believed in investing in the stock market. Most of his money was invested in his stores and he continued to fund his whole life insurance policies that he purchased when he was a young man.
As the unemployed numbers grew across the Country, James was reluctant to lay off any of his employees. Being cash-strapped, James borrowed from his life insurance policies to meet his payroll and kept all his employees working.
Had James not been able to access capital from his life insurance policies, he probably would have lost all of his stores and had been forced to lay off thousands of workers.
After the recession, the economy rebounded and so did the JC Penney stores.
In 1940, James hired Sam Walton to work in his Des Moines, Iowa store. Sam eventually went on to open his own chain of stores called Wal-Mart.
Today, JC Penney stores produce more than $18.5 billion dollars of revenue each year with more than 1600 stores nationwide and the dream was kept alive through a loan from a life insurance policy.
If you would like more stories about “Life Insurance of the Rich and Famous” or you would like to learn more about how whole life insurance can be a great investment, call my office at: 914-633-1717