Update News for June 2023

Here is a quick run-down on what you will find in this bulletin:

• • I really dislike raising prices but…

  • When You Have Inflation –
    The Same Price is a Price Reduction

  • The Shrinking Value of the Dollar

  • Inflation’s Biggest Problem – IGNORANCE

  • Designing Analysis Software To Deal With Inflation

  • Our Prices Must Rise Steadily With Inflation

  • New Prices In September

  • We Are Giving Lots of Notice

  • Term4Sale Listing Prices are Also Going Up

  • Here Are Those New Software Prices

  • Our Current Programming Plans for 2023

These topics will be dealt with in more detail throughout this bulletin.

I really dislike raising prices but…Inflation is real and inflation is not going to go away.

One of the benefits of being old, and having been around for a while, is that I lived through the Jimmy Carter years of rampant inflation. I experienced and saw how incredibly hard it was for Ronald Reagan and Paul Volker to get inflation under control in the 1980’s. It was a VERY painful transition and inflation was not rolled back easily.

This time it is going to be much, much worse. The U.S. national debt has now jumped to over 30 trillion and there is NO serious interest in Washington, on the part of the current administration, to stop spending like drunken sailors. The talk about inflation is unserious lip service with the common view that it is a minor problem that can be reigned in easily. This is all utter foolishness.

There is ONLY one root cause for inflation and that is an increasing money supply. The money supply is controlled by the Federal government which is the sole determiner of how large our money supply is. When the government increases the money supply FASTER than the economy grows you get inflation. Inflation is all about more currency chasing the same goods and services. The laws of supply and demand dictate that prices will go up. The currency is worth less because it takes more and more of it to buy the same products and services. And of course when prices go up, wage demands go up, which is a cost of business which leads to prices going up. It’s a dog chasing its tail.

When inflation rises interest rates must also increase. There is no such thing as 20% inflation and 3% interest. In an economy where that’s happening, people borrow money to buy tangible goods which are rising faster in value than the cost to borrow the money. THAT just adds to inflation driving prices higher and higher, faster and faster. Everyone wants to borrow and no one wants to lend. Interest rates MUST GO UP.

The opposite is also the case. You cannot have 3% inflation and 20% interest rates (unless you’re a credit card company or a private lending service with employees name Vinny and Guido; I jest). If you have 3% inflation and 20% interest no one wants to borrow because they can put the money in the bank and the value of their investment grows faster than the goods and service that they ultimately will want to use that money to purchase. In that market everyone wants to lend and no one wants to borrow. Interest rates, due to reduced supply and demand must come down.

To summarize. Inflation is ALL about money supply and interest rates react and go up and down with inflation. Interest rates don’t cause inflation they are a result of inflation. You can (in the short term) manipulate interest rates to manipulate inflation but you are simply treating the symptom and not the disease. The U.S. Fed would like you to believe that their interest rate decisions control inflation, but the fact is they are covering up the fact that their decisions to increase the money supply are the real cause.

When You Have Inflation –
The Same Price is a Price ReductionNo one likes paying $7 for a carton of eggs when last year the same carton cost $3. It makes you angry. No one likes paying $3 for a gallon of gasoline, when 2 years ago it was $2. It makes you mad. Now some price increases are short term BS, like egg prices. The avian flu knocks out large numbers of laying chickens. Once that had run its course, and the supply increased, prices relaxed. Or in the case of gasoline you have governments shutting down oil exploration, development and production. That causes the supply of oil to shrink. Continued demand for that oil causes the price to increase. Again, these circumstances are NOT causes of inflation, they are short term price changes.

But in reality we do have real inflation because governments are running the presses. Consider this article:

The government is forced to run the presses because they are spending more than they take in. Government debt (the money we owes to ourselves) is growing by leaps and bounds. Where does the money come from to spend?

The Shrinking Value of the DollarWhen REAL inflation happens the value of the currency is shrinking. If you have 5% inflation (and no one who is sane believes that is the REAL number) it means that if you were charging $1,000 a year ago, and you are still charging a $1,000 for the same thing now, your customer has effectively enjoyed a priced reduction because the $1,000 they are spending now is worth less than the $1,000 they spent last year.

The price MUST go up or the price in real dollars is dropping. Meanwhile, all the other costs associated with that product or service are going up. The same revenue, minus increasing costs means less net revenue. And when you are in business, you don’t operate as a charity and losses are a business killer.

Inflation’s Biggest Problem – IGNORANCEWhen I started selling life insurance in 1979 it was during the height of double digit interest rates and double digit inflation rates.

Initially how much insurance people needed to buy was a mystery to me, just like it is a mystery to most consumers. But as a new life agent those same consumers who were becoming my customers wanted my advice and I didn’t want to repeat some of the BS that was common when I sold insurance. The problem was that I knew the advice was BS, but it took some time to sort the BS out.

The common advice that I ran into when I was first selling is that consumers needed 10 times their income in life insurance to replace their income to their family if they died. If you made $25,000 per year (big money in those days) and you have a $250,000 policy, then your family could take the $250,000, invest it at 10% and get the $25,000 you used to provide. And that $25,000 would be a perpetual wheel. Every year your family would get $25,000 per year and that would go on forever.

Now the BS was obvious to everyone, even the consumer. The consumer looked at that advice and realized their family would not need that income “forever” and so obviously the real need would be less than 10 times and very often consumers bought a lot less than 10 times their income. I knew it was BS because when you have high inflation rates the value of the income was shrinking quickly – but how fast was it shrinking and how quickly would it take before it was all worth nothing?

I can remember sitting with a calculator for many days punching in numbers and working out tables of values. These were the days before micro-computers and spreadsheets. I wanted to get a grip on how to advise my customers and I worked up my own “rule of thumb” calculations which satisfied me as to the correct amounts of money people needed to replace income.

Designing Analysis Software To Deal With InflationAll of that began the genesis for the two analysis tools that are part of your Windows subscription to Compulife. Those tools were originally called “Income from Capital Analysis” and “Retirement Investment Analysis”. They were designed to make the calculation of “needs” for insurance and retirement savings simple, and to deal with the biggest ignorance people have which is the impact of high inflation and high interest rates over long periods of time.

Since the 1990’s inflation has been relatively low, and interest rates have also been relatively low and so the need for those calculation tools was not as great as when we first introduced them. Let me give you some free advice – LEARN TO USE THOSE CALCULATORS. You are going to want to have those handy for the upcoming years as inflation and interest rates soar out of control.

The average face amounts for insurance need to also be growing at the same time as inflation goes up. If you were selling an average $500,000 policy 10 years ago, you should be selling an average $1 million dollar policy today. If you are still selling that same old $500,000 you are doing a disservice to your client, and a disservice to yourself. The disservice to your clients is that they are more and more underinsured. The disservice to yourself is that the premiums your client are paying are the same, and so the amount they are actually spending for insurance is shrinking. And by the way, your commissions are shrinking at the same time. And if that is happening you need to get your head in the game and start selling bigger face amounts.

And nothing, I mean nothing will help you do that like the Income for Calculator tool that is in Compulife. Learn to use it and you will make more money on EVERY sale of life insurance. Teach your client about inflation and they will realize that that $1 million dollar 30 year level term policy is really a $1 million dollar decreasing term policy with a vanishing (shrinking) premium.

I was always amused by the financial advisors who recommend “staging” insurance by buying some 30 year term, with some 20 year term, with some 10 year term. The idea is that the buyer can eliminate each of the shorter level terms as they reach the end of those level periods. It’s clever, but it’s also clear that these same folks are NOT thinking about inflation and what that is doing to the value of the currency. Level term is really decreasing term (in real dollar value). It may still be the same million dollar face amount, it’s just that the value of that million is shrinking. Now add to that the fact that the average working person will earn more and more money in life as they become more and more experienced in their field or occupation. THAT is not inflation, it just recognizes more people advance in the careers as they get older.

Our Prices Must Rise Steadily With InflationLast year we raised our prices and we are going to do it again. And we will do the same the year after given the level of inflation. One thing I learned about inflation is that if you hold the price at the same level for a long time, and then suddenly jack the prices by a large amount, you make your customers ANGRY. And if I have learned anything in the last 40 years, it is that an angry customer is NOT a good customer because they share than anger far and side. And you can have 10 people sing your praises, but all that can be nullified by one unhappy customer who tells everyone about their bad experience, whatever that may be.

So two things are true. I do NOT want any unhappy customers, but I also don’t want to reduce the real price of our software. In order to NOT reduce the price of our software, the prices MUST GO UP.

New Prices In SeptemberThe new prices we are announcing will take effect with the renewal invoices that will be going out August 15th. August 15th invoices will be for software that has a subscription expiry date of September 30th. Prices on new sales of software will be increased on our websites in the first week of September. This means that your renewal prices will be higher than what you will see on our websites for 2 or 3 weeks.

If you are alert, and you are paying attention, we will honor the old price until the price increase on our website, but you must call us and tell us you want the OLD price and you must pay us that old price when you call. We will issue a credit for the difference and process your card at that moment. If you pay the new price and then read this information later, we are not going back and issuing a credit. That horse will be out of the barn, so to speak.

We Are Giving Lots of NoticeWe are telling you about the price increases well in advance. The reason is simple. We are giving you the opportunity, as we have in the past, to pay in advance and lock in the old price by “topping up your subscription”. No matter what your current subscription expiry date is, you can add 12 months to it by paying the old price for your subscription. The only thing that we sell where you cannot “top up” your subscription is the purchase of “additional zip codes”. The exception to that are the “local zip codes” that you have, where those zip codes are invoiced at the same time and for the same period as your base subscription to the Windows software. Those zip codes you can top up.

We also offer 10% and 20% discounts to those software subscription to those who choose to buy 24 month or 36 month subscription (respectively). You can also take those discounts if you choose to “top up” and lock in the old prices before the price increases in September. Once the prices change and go up in September, the old prices are dead and gone.

Term4Sale Listing Prices are Also Going UpThis year, for the first time in a VERY long time, the prices for term4sale listing will also be going up. The fact is that we are increasingly having difficulty getting SOLID zip codes for new customers because all the really SOLID zip codes have been taken by current subscribers who participate at term4sale.

WHY is that?

The answer is quite simple: Term4Sale works. Subscriber using Term4Sale MAKE MONEY. And they are NOT spending a dollar and making a dollar, their return on investment (ROI) is much higher than that. Oh yes, you still have to work. You still have to “sell” the consumer which takes time. You still have to take and process an application. You still run into situation that the prospect doesn’t buy or buys from someone else. But the subscribers who participate heavily in Term4sale (and we have quite a few of those) know that it is the best source of un-prospected referral business they get from anywhere.

Compared with the cost of “leads” being sold by “lead vendors”, and by comparison with the quality of those leads, there is NO comparison. Most people who try buying leads spend hundreds and/or thousands of dollars before they discover that the ROI on leads, for the most part, is BS. The problem is that there is a steady influx of “new” agents who are ignorant and they won’t be less ignorant until they also spend hundreds and thousands of dollars on leads only to discover that the ROI is BS.

That is NOT Term4Sale.

So Term4Sale prices are going up also. Partly because of inflation but also because we have a shortage of solid zip codes to offer to new customers. Demand is now exceeding supply. We are still discussing what those price increases will be (and they will be moderate) but we are also discussing changing the limits for how many we will let any one customer buy. Because the prices for “additional” zip codes will NOT change until November 15th, we have more time to review that and we will keep you posted in future bulletins.

Here Are Those New Software PricesAll prices are annual subscription fees with one exception.

Compulife Mobile – $104 (was $99)

Compulife Web Quote Option – $105 (was $100 / must be purchased with a Compulife Mobile or Windows subscription)

Minimum Total will be $209 (was $199) – web quote option plus Mobile subscription (Mobile is minimum basic subscription)

Compulife Personal Use Windows – $209 (was $199)

Compulife Agency subscription (Standard License) – $369 (was $349)

Compulife API –

• API – 1,200 quotes per month – $350 per year (was $330)

• API – 6,000 quotes per month – $700 per year (was $660)

API – 30,000 quotes per month – $1,050 per year (was $990)

Internet quote engine – $1,450 per year (was $1,390)

Historical Data – $109 (was $99)

Batch Analyzer – $2,250 per year (was $2,100)

Individual Agent Sub-User

• 1-9 – $149 (was $139)

• 10-29 – $104 (was $99)

• 30-59 – $85 (was 81)

• 60+ – $66 (was $63)

• 100+ – $5.50

per month

Agency Sub User – $279 (was $249)

Our Current Programming Plans for 2023The following is the current order for new work that we will be doing in 2023:

• • Introduction of New PC Version: CQS.EXE

• • Overhaul Of Current Product Data Files

• Introduction of Compulife Mobile Plus (with Pick 12)

Anyone with questions about any of these upcoming projects can call Bob Barney to discuss:

Please don’t email me essay questions, just call. If I’m not in, email me your phone number, I’ll call you.

These planned objectives will easily consume our programming time during the balance of this year and throughout 2023. The good news is that once the product data files have been converted, and we have introduced the new CQS.EXE, and upgraded our internet engine to use the new data files, Compulife will be turning it’s full attention to our web based, Compulife Mobile software. The long term goal is to have a web based product that does everything our PC based software does.