What is Palm Beach’s “Untouchable Income Account?”

Looking at Tom Dyson's pitch for PBL Wealth Builders Club

By Travis Johnson, Stock Gumshoe, March 18, 2014

“Outlawed in Amsterdam in 1598… Banned in France in 1681… Now only available in America and Canada…

“The ‘Untouchable Income Account’ that can safely multiply wealth 468%—without risking your money in the market
Set it up the way I’ll show you, and you can access the funds anytime, without penalty…

“But the IRS can’t take a penny… The government can’t touch it… And if you get sued or owe money to a creditor, in most cases no bank, or lawyer, or gov’t agency can seize the money in this account…

“Just 1 in 1,500 Americans know about this secret (legal) account…

“Here, your dollars grow tax-free…”

That’s the intro to the latest ad from Tom Dyson for his Palm Beach Letter — this time around, he’s pitching the idea of an “Untouchable Income Account” as one special report you’ll receive when you sign up for the Palm Beach Wealth Builders Club, which styles itself as more of a “get rich and live a wealthy life” advisory than as just a stock picking rag … which I think is probably admirable, and they may well provide lots of guidance and hand-holding to get folks to change the way they think about wealth and savings and generating cash flow aside from the basic retirement savings strategies … though I imagine there are ways to learn about Mark Ford and Tom Dyson’s strategies without separating yourself from $1,250.

We won’t get into all the detail on what the “Wealth Builders Club” might tell you — Mark Ford, who is the papa bear at Palm Beach and a copywriting mentor to folks like Porter Stansberry, is well known for non-stock investments and talks a lot about safety and cash flow with things like rental real estate, freelance work and other small scale business opportunties, etc… basically, thinking about building the business of you and increasing your cash flow rather than just saving and investing.

But the teaser pitch that’s getting everyone’s attention is this “Untouchable Income Account” … so what is it?

Well, we can give you a little taste of the spiel:

“This may be the weirdest ‘investment’ you ever see…

“But it could let you retire, tax-free…

“I’ve put more money into this than any investment in my life. By the time I’m finished, I will have invested more than $2.8 million.

“Why?

“Because it’s projected to create an estimated $11.8 million in my lifetime.

“Set it up the way I did, and every $100 you invest could return $468… Every $1,000 could return $4,679… Every $10,000 could return $46,788.

“That’s what I’ve set myself up to receive.

“But let me be clear. These results won’t come overnight. They won’t even come in a year.

“Instead, your gains will build safely and steadily, year after year. They take time. But they will come. Just as surely as mine do now.”

That sounds kind of appealing, right? Maybe not if you’re 75 and aren’t planning for returns that take a long time to build, but a steady sheltered growth is what most investors are looking for from their retirement accounts, so something that could provide that without scaring you silly (like the stock market does to some folks) catches attention.

And it’s not one of your typical investments, as you gathered:

“It has nothing to do with stocks…

“Bonds…

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“Options…

“Metals…

“Or commodities of any sort….

“This is a true ‘set-it-and-forget-it’ wealth accumulation tool. One you only need to maintain once per year. All you need to do is make one annual payment to keep your account active. And it will always be working in the background. Slowly at first, but surely, increasing your wealth.

“The French banned this account in 1681. Not because it’s dangerous or immoral. But because—as the New York Times reported—they feared it would make people so financially safe and secure, they would never work again.

“As a matter of fact, this account is safer than your 401(k). And it’s safer than any retirement plan you’re currently part of…

“There’s a simple reason for that. It’s because—unlike a 401(k) or pension fund—the money you make with this account does not depend on the performance of the stock market.”

So what is it?

Well, turns out that what they’re now touting as the “Untouchable Income Account” is … pretty much exactly what they were touting a few months back as the “Secret 770 Account” or the “President’s Account”: Life Insurance.

Not just any type of life insurance, but the “old” kind of life insurance with a twist — he’s not talking about indexed life insurance accounts or annuities, or accounts that are tied to market performance, or even about the plain jane inexpensive term life insurance that many people use to protect their families from the premature death of a breadwinner. This is participating (dividend-paying) whole life insurance or permanent life insurance, bought from a mutual insurance company, and the twist Dyson has been talking about on that kind of account is, in part, the addition of a “paid up additions” rider to maximize the cash you put into the account and how much it can grow and compound with dividends from the mutual insurance company, and minimize the actual “death benefit” part of the insurance contract.

The “participating” part means that you should have insurance that participates in the profit of the company — that’s why you’d want a mutual insurance company that’s owned by policyholders instead of a publicly traded, investor-owned insurance company. Dyson’s expectation the last time he pitched this was for annual earnings in the range of 5% based in part on this “participation” … and the earnings compound for a long time, and are tax-sheltered and have estate planning benefits and creditor protection benefits of some sort.

The “paid up additions” rider means you put in more cash than would be required to maintain your death benefit — so in fact you’re turning it into much more of a savings vehicle instead of just life insurance.

This time around, Dyson doesn’t as aggressively push the idea as being a way to finance your life — borrowing at low cost from the account to buy your car, or send your kids to college, or finance your business, but that was a pretty big part of the last spiel.

Essentially what Dyson is talking about in combining this whole life insurance with the paid up additions rider and then also using the cash b