Wealth without Stocks

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CNA Finance Wealth Without Stocks

This is another article in a series of how to invest in solid real estate deals. Please read the previous articles before proceeding with this new article. These are more ways to find killer real estate investments in addition to the ones already mentioned in the previous articles:

  1. Put up a website and get a decent domain. Many sites do this but I get my domains and some of my sites through GoDaddy®. The website does not have to be fancy or expensive but make it solid and clean and keep it current. So many sites get put up and forgotten about it blows their credibility. I suggest a 4 minute video every month to post to the site. Keep the site relevant and use the domain in all your marketing
  2. Make up your wedding list. Imagine you are getting married and going to have a huge wedding.   Who would you invite? Get that list together and get all their contact information and let them know periodically (at least every quarter) that you are looking for real estate investments
  3. Find out who in your area handles bank foreclosures (otherwise known as REO’s or real estate owned by a bank) and send those agents a letter introducing yourself. Follow up these letters with calls and ask for a one on one appointment and buy these agents and brokers lunch. If there is a good sized foreclosure market in your area this one strategy can be a gold mine for your business
  4. The internet is loaded with properties but depending on the site the information can be very old so nothing will replace building relationships with real human beings who are in the world of real estate
  5. Estate properties sometimes can offer a great opportunity at a bargain. I have bought dozens of properties from my local probate court lists. When people pass away many times they leave a will that will have to go through probate court. These probates are public information and usually posted in a county legal news and/or website. These notices will have the person who passed away and the person who is the personal representative for the estate. These are the people in charge of opening and closing of probate and the estate. A well placed letter and follow up phone call have provided me with some great deals and large profits. I always got more excited when the personal representative is located out of town because they are sometimes more motivated to get the estate closed as quickly as possible. I would never send letters to spouses who just lost their mate; they have enough on their minds without me seeing if they want to sell. Most of the time you can tell by the address of the decedent and the address of the personal representative. If Ken Jones passed away and Lisa Jones is the personal representative and both live at 1234 Maple Street it means that Lisa is probably Ken’s wife. If the representative lives at a different address they are more than likely a child and that property will more than likely be sold in the next 30 to 90 days. I also got better deals when there were several siblings which meant the money was being split by several people. A $40,000 price reduction might only be $10,000 per person and easier to accept

When you receive leads from the above and some of the other 100 ways on the downloadable list they will come in 3 basic categories of properties:

  • Ugly
  • Semi Ugly
  • Pretty

When you are looking to buy and sell for a profit most (but certainly not all) of those deals will be ugly (they need a lot of TLC and money to bring them up to snuff) or semi-ugly (needs work for sure but more simple cosmetics than real contractor television stuff)

Before you even go to the next step of analyzing the lead, first pay attention to why the seller is selling the property. What is their true motivation for selling? All sellers sell for only two reasons. The need for cash or the need for debt relief are those two reasons. Yes, there are dozens of sub reasons such as divorce, pending foreclosure, settle estate, relocation, getting non performing loan off the books (REO’s aka bank foreclosures) and many others. All of those sub reasons go back to the two main reasons above.

Is the seller’s reason for selling strong enough that might allow you to buy this property under its current market value? The stronger the reason the bigger the discount on the price you could expect to receive. If a seller wants to sell because they are upgrading their home and need more space will that usually allow you a chance for a deal? No it will not! On the other hand if the seller has inherited the property and lives out of state and has just been informed the property is a beat up old mess does that sound like you might have a better chance at the kind of property we are trying to secure?You have a much higher chance of success based on that need to sell.

Tune in next week for more information on making successful real estate investments.

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CNA Finance Wealth Without Stocks

If you missed last weeks article on real estate investing,I recommend you read it before you move on to this week’s follow up article. All good real estate investments start out at the same place and that is where you must:

Find a Good Deal

The term good is such a broad term and is in the eye of the beholder. My definition of good and yours might be totally different. From the perspective of a guy who has bought and sold tens of millions of dollars of real estate let’s talk about what’s a good deal. This assumes you want to buy a fixer upper cheap and rehab the property for immediate resale. This also assumes you are going to cash out of the transaction by selling to a retail buyer who wants to live in the property. You will see in upcoming articles that is not even close to the only way to sell properties but for this article, that will be the discussion.

You must buy your property at a big enough discount off its retail or repaired value to allow you to make repairs, pay holding costs, pay sales costs, and make a nice profit. The first thing needed is to know what the value of the home is after you put it in nice shape. One of my first mentors, Mr. Nick Koon, told me this “son, until you know value, you know nothing!”

We need to know what similar homes in the same area are selling for and are currently on the market for offered by other sellers. You are looking for as close to your style, size, lot size, school district, age, bedrooms and baths as possible. Does the subject property have a basement? Does it have a garage? These are the biggest factors in pulling the comparables (or comps as they are referred to in the trade).

There are many sites on the internet that will allow you to gather comparables but none will be as good as the local multiple listing service (MLS for short) that Realtors™ have at their disposal to conduct their business. Working with a real estate agent will be a huge asset to your business but make sure you don’t waste their time. I would use these other sites (Zillow, Real Estate abc, Trulia) to get a ball park and then ask my agent for their “comps”. By the way, real estate agents and brokers pay big money every month to have the best information in the marketplace so they should have the best and most up to date information.

If my prospective investment home is a 3 bedroom 2 bath 1,500 sq ft ranch than that is the kind of home I am looking for to compare against my home. On the same street or in the same subdivision would be great but at least as close as you can get. You are looking for a range of value because no two homes, however similar, are rarely exactly the same. If I see similar homes in nice shape selling for $240,000 to $260,000 then my value will be about $250,000. You would like sold comparables to be within 60 days or sooner when possible for the most accurate snapshot of current market value.

A Simple Formula to Keep You Profitable

Determine the After Repaired Value and multiply that amount by 70% to 75% maximum. Then back out your estimated repairs. This figure will give you your maximum offer on a fixer upper. It would be nice to buy it for less than this figure but this figure is the maximum you can pay.   Deviate from this formula at your own risk. This will allow you to make a nice profit on the deal. By paying more you put your profitability at risk. The “After Repaired Value” is what your property would sell for assuming it was fixed up nicely to compare with or even be better than the other properties that have sold in the last 60 days.

We need to be buying this $250,000 home (depending on repairs) in the $170,000 to $190,000 range.  We will first focus on bringing good prospects and leads to us so we can find a good deal as described above. We will focus on a few key ways to find good deals in this and subsequent articles but we can only scratch the surface. I would like to give you 100 best sources to consistently find good investment prospects. Please visit www.wealthwithoutstocks.com for a free download of the 100 ways to find great deals.

  1. The local Multiple Listing Service- This is usually only a good strategy when the overall market is very slow and there are large numbers of unsold inventory on the market. During those markets there is usually enough inventories in any good sized market to keep you busy.   Most local MLS’s download to realtor.com where you can access millions of listings from all over the country. When your market is hot you can expect to find very few deals on the MLS and the rare times there is a great deal listed it will most likely have multiple offers.
  2. Getting the word out that you are a serious investor and are looking for good deals in any condition.
    1. Get business cards made stating that you buy houses, in any condition, any area, and close quickly. Buy 1,000 and leave them all over and pass them out as often as possible
    2. Over-sized flyers stating the above as well as domain name for a website. May consider passing these out (services do it for cheap) or mailing to a certain geographic location if you really want to own properties in that area
    3. Good old fashioned bandit signs still work. These are usually yellow signs with permanent marker hand written on them and placed all over town. Get a service to put them up for you but check with local zoning ordinances so you don’t get fined. Add a 21st century technique to the sign and put something like text to “webuyhouses123” for a quicker response. This will get you cell phone numbers from prospects instead of just bad email addresses
    4. Pay an ant farm to bring you deals. After you download your 100 ways to find deals find all the people on there that are around houses all day every day and make connections with as many as possible. Tell them if they bring you a lead that ends up as a successful investment you will play them $300.00 or some figure that makes sense to both of you. You also might just pay them $10.00 per each lead sheet they bring you back filled out with the information you need to make a decision. Think of having 20 or 50 “ants” in the field bringing you solid leads. This is leverage at its finest!

Tune in next week to find out more killer ways to find great real estate investment prospects.

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CNA Finance Wealth Without Stocks

In upcoming articles we are going to look at how to profitably invest in real estate of many kinds, starting with the old fix and flip. Stay tuned in coming weeks if you would like to enter that business or simply add some solid real estate holdings to your wealth portfolio.
My first love is real estate investment because it took me to levels that I could not have achieved without getting to be an expert in that arena. Before I bought my first property I was in college for two years and before that I was a juvenile delinquent and high school failure.

Your life can change in 30 minutes

My second year in college my grades were respectable. I was not winning any awards but I was doing far better than I had ever done in high school. The main reason was a reality check from my mom who told me in no uncertain terms that if I received the same grades in college as I received in high school that she would be cutting me off from my education funding. I couldn’t blame her as who wants to waste big money on someone who is not taking it seriously? Even though my grades were fine I hated every second of my two year college career.

Then late one night I watched an infomercial (brand new marketing strategy in the late 80’s that has now become common place) and it was talking about buying properties with no money, no job, or no credit. I had all of those so I figured I could make it happen. After some research and investing in that home study program I decided my second year at college would be my last. I jumped into the real estate investment business full time and eventually would also be a loan originator and real estate agent, in addition to an investor.

I found out that you could indeed buy properties starting with nothing if you had some cutting edge knowledge. I spent years and tens of thousands of dollars acquiring that education through books, tapes, and live seminars plus the real life education I learned on the streets.  I want to pass that real world information to you as much as possible in these next articles and in my book Wealth Without Stocks or Mutual Funds.

I then went on to train people all over the country in multi-day seminars where people spent thousands of dollars to attend these weekend events. I really love teaching people the power of real estate and how it changed my life. I obviously don’t have time or room to put all of those trainings into this article or the upcoming articles but I am going to load them with top notch real world information that you can put to use right away in your own life.

Who knew there were TV shows in flipping houses?

My young son loves to torture me with Real Estate “Reality Shows” because for some reason he is fascinated by the housing business. This will likely change as he gets older but if he wants to go into that field he sure was born into the right house! I am going to write these articles as if I was gone and trying to teach my sons the down and dirty of how to make money by fast turning or “flipping” houses. If they do what they learn on those “reality” shows they will certainly go bankrupt quickly.

Reality shows meet true Reality

I rarely watch these shows but when I do it becomes obvious they have little to do with the actual business of real estate investing and much more to do with drama and before and after photos. By the way, there is nothing wrong with this drama because people are tuning in to be entertained and not to be educated. The only problem is when people don’t know the difference and believe the televisions show is actual how to education. So let’s cut out the drama and get down to making real money.

Big paychecks are very possible in this business and are even possible starting with nothing. You see “no money down” does not generally mean there is not money in the deal it just means that it does not have to be our money. My first property was bought as a rental when I was 21 years old and did not require one dime of my own money. I used two strategies combined that allowed me to use a partner and seller financing to accomplish this first deal. My second deal was also no money down and I received about a $7,000 paycheck on the resale. Now $7,000 isn’t all the money in the world but when you are starting from scratch with none of your own money at 21 years old $7,000 was a windfall! Thankfully the deals and checks got bigger but those first two deals were critical to my future success in real estate.

I want to take you through the 5 steps of any profitable fast turn on a single family home. The 5 essential steps are:

1) Find a good deal
2) Analyze deal quickly
3) Make offer and close on accepted deal (or follow up on deals that didn’t get done but were close)
4) Repair for maximum profit
5) Sell Quickly

Seems simple enough doesn’t it? Inside of each one of those 5 steps are the details that will make you be successful or struggle in this niche business. Tune in next week when we further examine each step in more depth.

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CNA Finance Wealth Without Stocks

CNA Finance Wealth Without StocksThis article is the last in a series of pieces on how to dramatically reduce your income taxes legally and ethically. If you missed the first two you can review them before moving on to this article; Income Taxes – Beating the Biggest Wealth Drain and Give Yourself A Raise Without Asking Your Boss.  These other two articles discuss the hundreds of deductions you qualify for when you own a business as opposed to being an employee. First we show you how everyone can have a small business even if they’re a current employee working for someone else. Specifically we talked about 4 strategies out of those many hundred of deductions that you can start to use immediately to increase your net take home pay. Now let’s talk about the 5th and a special discussion on a superior business structure for successful businesses to lower their taxes by 50% or more.

TAX DEDUCTION 5 $25,000 Vehicle Deduction

Per Section 179, you may be able to expense some or all of your business use of your vehicle. Basically, if your vehicle weighs more than 6,000 pounds, you can expense up to $25,000 the first year the vehicle is used in your business. You also must use the vehicle at least 50% for business in order to qualify. The $25,000 deduction assumes 100% business use. If you use your vehicle 75% for business, you would get 75% of the $25,000 or $18,750.

Car Used Less Than 50% for Business

If the business use of your car drops to 50% or less, there are certain rules that apply. These include:

  1. You cannot take a Section 179 deduction for your heavy vehicle.
  2. You must use the straight-line method of depreciating your vehicle. While the five-year period still applies, this will result in a lower depreciation deduction in the earlier years.These 5 strategies are just the tip of the iceberg that I mention here and in the other two articles.

These 5 strategies are just the tip of the iceberg that I mention here and in the other two articles.

If you are already a successful business owner and feel like you are implementing every legitimate tax deduction, but are still paying $150,000 or more in annual income taxes there is a different specific strategy for you.   There is a little known company structure that may help you save 50% or more on your income taxes every year. We call this our income efficiency strategy and work in conjunction with a very high level attorney to structure these programs. It is very unlikely your current tax professional will be aware of this business structure but this attorney has been utilizing them for clients since 1998. However, the attorney who sets these up will be happy to have conference calls with your tax professionals to explain the program in depth. This attorney is not trying to replace your current professional but rather work with them to implement this plan for your business.

You will utilize structures that have been around for decades and most tax professionals mistakenly believe are only good for public corporations. These are structures that Lowes®, Southwest Airlines®, and Home Depot® use just to name a few. Now the successful small business owner can utilize the same structures as the big boys thereby dramatically lowering your tax liability.

I don’t want to bore you with details here but if you are in that small group who are paying those kinds of taxes we have a real solution that has been looked at by the IRS several times since 1998 and every time there were no changes required for the client. In other words this is not some kind of a scam or loophole but rather a very specific company structure that will fit into your existing business model to dramatically reduce your income taxes. Send us an email at info@perpetualwealthsystems.com with the subject line “income efficiency strategy” and we will have one of our professional teammates reach back out to you to see if we can help.

Tune in to next week when we talk about investing in real estate even if you have no cash!

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Giving Yourself A Raise

In last week’s article we gave you an introduction to the United States Tax code and why you need to take control of how much you pay to the government. This week we will give you the most powerful strategy to legally and dramatically reduce the amount you pay in taxes.

The #1 Tax Strategy in America – Do something with the INTENT to make a profit from your home!

The “Business” tax breaks were passed by Congress for 2 reasons:

 1) To stimulate the economy by creating more businesses and more jobs.

 2) Encourage people to have additional sources of income to pay off their debt and contribute to their retirement.

An activity with the INTENT to make a PROFIT, can be considered a “Business” and qualify for “Business” tax deductions. You can do this as a sole proprietor (in your own name) or as an entity (corporation, LLC, etc…) either way works. In order for a business to be able to deduct all ordinary and necessary business expenses it must be able to show that the business is being run with the reasonable intent of making a profit. You do not need to actually make a profit as long as you intend to make a profit.

So here are the requirements set forth by Congress

  •  Have the intent to make a profit
  • Work your business on a regular & consistent basis
  • Treat it like a business – Keep good records

Meet these 3 requirements and you can qualify for $1,000’s in new Tax Deductions.

So let me share with you just 4 of the many Tax Deductions you will qualify for when you take the time to meet the above 3 requirements.

 

TAX DEDUCTION 1 You cannot deduct expenses for attending a convention, seminar, or similar meeting held outside the North American area unless:

  1. The meeting is directly related to your trade or business, and
  2. It is reasonable to hold the meeting outside the North American area.

NAmericanCountriesList

It is considered “REASONABLE” to have a business meeting in any of these countries! (See chapter 1 of IRS Publication 463)

 

TAX DEDUCTION 2Travel Rule Basics:

Basic Rule: For each business day of travel, you can deduct 100% of your lodging and 50 percent of your meals and entertainment.

Workdays: You can count a business day as any day during which your principal activity during normal business hours is the pursuit of business. You must work more than half of the workday.

Tried-to-work days: You count a business day as any day you intended to work but circumstances beyond your control prevented you from actively pursuing your business objective.

Weekends, holidays: If a weekend or holiday falls between two business days, the weekend or holiday is considered to be a business day and is tax deductible. This applies only when it is not be practical to return home for the weekend because of time required or expense involved.

Saturday night travel: Airlines sometimes charge you less if you stay over a Saturday night. If you can save money by staying over Saturday night, you count the stay-over as a business days.

Travel days: Travel days are business days.

 

TAX DEDUCTION 3  –  Meals & Entertainment

The IRS considers “entertainment” to be any activity that provides “entertainment, amusement, or recreation, and includes meals provided to a customer or client.”

You are permitted to deduct 50% of all of your ordinary and necessary meals and entertainment costs for your business.

The 50% limitation applies to all meals (whether local or in travel status) and entertainment expenses.

In order to qualify for the deduction, you must discuss business during the entertainment (directly related entertainment) or immediately before or after the entertaining – within 24 hours (associated test for entertainment expenses).

You must be able to document Who, Where, When, What & Why. Most receipts have the Where & When printed on them – you just have to document the Who, What, & Why

  • The Tax Code does not provide any guidance as to what constitutes a “substantial and bona fide” business discussion for purposes of meals and/or entertainment.
  • There are no rules that specify how long the discussion must be before it will constitute a business discussion for deducting your meal or entertainment expenses.
  • Your business discussion does not need to take a greater amount of time than your non-business discussions for the meal or entertainment expenses to become deductible.
  • As long as a business discussion is the primary purpose of the entertaining, the expenses will qualify for a deduction.

 

TAX DEDUCTION 4  –  Dutch Treat

DEDUCTING “DUTCH-TREAT” BUSINESS ENTERTAINMENT

Many business expenses do not involve paying the expenses of clients or prospects. They are Dutch-treat. Everyone pays for himself or herself.

But how do you handle Dutch-treat expenses? How do you know if they’re deductible?

General Dutch-Treat rule: IRS regulations state that the taxpayer may deduct entertainment “even though the expenditure relates to the taxpayer alone.” The IRS says its objective test precludes arguments that “entertainment” means only entertainment of others.   Further, the IRS acknowledges that business entertainment may include an activity that satisfies a personal, family, or living expense. The IRS notes that an individual in business may deduct the entertainment cost, including his personal benefit, as a business expense.

Translation: Business entertainment deductions aren’t limited to the costs of treating others; you’re also allowed to deduct your own costs if you “go Dutch.”

Tune in next week when we will give you more strategies to reduce your income taxes thereby giving yourself a raise without asking your boss!

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incometaxpreparer

incometaxpreparerThese next couple of articles will show you the US Tax Code as you probably have never seen it before. The tax code is over 70,000 pages of boredom and confusion and is designed so badly that even all the authors of the tax code really don’t have much idea of how the system actually works. You can be sure that the code is designed to be difficult and keep you, as the tax payer, intimidated and paying the most money possible to your old Uncle Sam.

Income taxes are the single biggest expense most Americans will ever have and yet very few people have a real clue how the system works. It is my belief that since you are going to pay taxes for your entire working lifetime and probably even some taxes after your death that you should have a handle on how they actually work and how to legally pay the absolute lowest amount of taxes allowable. To pay the lowest amount of taxes possible is your responsibility and not your tax preparer or CPA. Nobody will ever care more about your money than you do so think of this as your spring board to saving a fortune in income taxes over your lifetime. You will be amazed at how relatively simple it is to legally and dramatically reduce the amount of taxes you pay every year.

Let me say upfront that I am not a CPA or a tax attorney. I am just a tax payer like you that wanted to understand how I could get the tax system to work in my favor as much as possible. I have read countless books and listened to many live presentations from many experts on the subject of taxes. In these next couple articles I will be sharing information from a tax expert who has been teaching taxes all over the country to thousands of people for 20 years. He blew my mind when I saw him speak with all the great information he shared. We have become friends and had many business dealings together over several years. His name is Pat and he will be a huge asset for these taxation articles.

I am going to try to simplify some of the 70,000 pages of the tax code and supporting documents to help you capture more deductions and ultimately saving you $1,000’s of dollars on your taxes every year. A leading tax expert has graciously agreed to make one of his books available for FREE. Just go to www.wealthwithoutstocks.com and send an email requesting the booklet be sent to you right away via email. This book will show you little known secrets such as:

  • Why people over-pay their taxes
  • Two tax systems in America
  • #1 Tax Strategy in America
  • Profit Motive
  • Business Trips VS Vacations
  • Travel Rule Basics
  • Ski Trips
  • Cruises
  • Meals & Entertainment
  • Golf & Other Activities
  • Dutch Treat
  • Automobiles – Your KEY to a HUGE Deduction
  • Motor homes & Yachts
  • Medical Expenses
  • Tax Deductible Gifts
  • Insurance Premiums
  • Depreciation
  • Deducting your Spouse & Kids
  • Work Clothes
  • New Business Start-Up Deductions
  • Deductions for Employees W-2 Wage Earners

 

Obviously I can’t cover all of these topics in a couple of articles so I will just pick a few (5 to be exact) to give you an idea of what’s possible.

First we need to understand why People Over-Pay Their Taxes…

 

Most people over-pay their taxes for 3 reasons:

1) Fear of the IRS and being Audited. As long as you are following the laws in the Internal Revenue Code there is no need to fear an audit. The IRS just wants to make sure you are doing things right and following the laws.

2) Not keeping good records therefore missing out on deductions – Would you be willing to spend just a few minutes a day, (about an hour a month) to put $6,000 of your hard earned money back into your pocket? That would be a great use of your time. You have the ability to make that a reality but you will need the “know how” along with the desire.

3) Not knowing the rules – What’s deductible and what’s not. The follow up articles and free book will open your eyes to available tax deductions most people don’t even know about. Remember, to consult with your tax professional to make sure you qualify and are documenting your deductions correctly.

TAXES- COMPLEXITY:

The U.S. Tax Code is very complex and confusing. No one, including any of the 100,000 or so IRS employees really understands it in its entirety.

TAXES – THE LARGEST SINGLE EXPENSE:

The average American pays about 30% of their gross income in taxes (Federal, State and Local), representing their single largest family expense. Taxes cost the average family more than housing and medical care combined.

Yet, few families ever realize the great expense that taxes cost them. While many people budget for food, clothing and other necessary expenses, they typically do nothing when it comes to planning to legally reduce their biggest expense: taxes!

We have all heard that middle class Americans pay the bulk of the taxes – there could be some truth to that.   Let me explain. You see, for the average American wage-earner, a W2 employee, there are about a dozen tax deductions they are entitled to however if you are doing something in your life with the intent to make a profit on a regular and consistent basis, you can be entitled to 100’s of tax deductions.

Tune in next week for our next article to find out how to dramatically and legally reduce your income taxes!

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Whole Life Insurance Myths

Whole Life Insurance MythsThere are many myths about life insurance that most people unfortunately consider as facts. Most of these myths are perpetrated by Wall Street and people who want every nickel of your money in the market under their management. The first huge myth is “buy term and invest the difference” and this one is so big it required its own article to debunk.

Myth #2

Life insurance is a lousy place to put money

What I described in previous articles about designing policies is very true but there are also some other facts that blow this myth away. Simply ask yourself this question, if putting money into life insurance contracts is such a lousy place to put money, why do the biggest and most wealthy institutions put loads of their own money into life insurance products? Major Banks, large corporations, and family dynasties have been putting boat loads of money inside these kinds of policies for generations. Are they that stupid about money? Not hardly. They are very savvy with money which is why they use life insurance contracts and other products to grow and protect their wealth.

Major Banks High Cash Value Life Insurance
As of 12/31/2014, Federal Financial Institutions Examinations Council Call Reports

JPMorgan Chase

10.6 Billion Dollars
Wells Fargo Bank 17.995 Billion Dollars
Bank of America 20.794 Billion Dollars
PNC Bank 7.699 Billion Dollars

Myth #3

Whole life insurance is too expensive

When someone tells me that I will simply say “in relationship to what?” If you are just comparing it to premiums for a term policy on the same coverage amount you are correct. However, because of the tax free guaranteed compounding of a proper life policy many of my clients will overcome the actual cost of the insurance in the first few years of the policy. These policies will get to the point where they self complete which means the insurance company owes you more than you owe them in minimum premiums. So if you decided to, you could have the basic premium paid out of cash value and your cash value will still grow and move forward. So when 20 years from now you still want coverage and go to extend your old term insurance policy or buy another one, get ready for the shock of the new premium based on your attained age. If you had strongly funded a life policy 20 years before, that policy’s death benefit would have been growing these last 20 years (all part of proper design of the policy with a proper carrier) and no more funds would be required to maintain the policy due to the huge cash values you have accrued. You would have also have had access to large cash values to use for other wealth strategies.

Myth #4

Universal life or Indexed Universal life does the same thing as Whole Life

This is such a myth that I will need more than the space allotted to let you know how these policies really work over time and why the cost of insurance will skyrocket over the life of the policy. Please download my free report at my website and find the indexed universal life report under the video. Don’t you dare buy one of these policies until you read this free report. If you already have one of these policies get the report and be thankful there is probably something we can do for you to help. Ask us about a 1035 exchange of that kind of a policy to one that is better suited for long term and being your own bank.

Myth #5

I am too old or in too bad of health to obtain a life insurance policy

I have clients all over the country who once believed this to be true but now own life insurance policies. If you like the concepts of self banking and insurance policies don’t assume you can’t qualify for one of these policies. You may be able to qualify and the numbers will still make sense. If you indeed can’t qualify yourself there are other options.

Many of my clients take out policies on their children or grandchildren which mean the younger, healthier person qualifies for the insurance but my client owns the policy with all the benefits. I have clients in their 70’s who took out new policies but put the policy on their adult children. They then went on to use the funds in the policy as their own bank. Contact us to see if this might be an option for your situation as well.

When I am speaking to a crowd on this topic I often call a properly designed whole life policy as the “one account” because it is so truly unique and powerful. It is the only account that I am aware of that can function with many different uses that all work together. This is the only account that can be:

Savings Account– When you are not using your money it is sitting inside of the life insurance contract collecting much more in interest than it would if it was sitting in a bank. As of this writing most savings accounts are paying 0.5% or less and some life carriers dividend scale is almost 6.5% on life policies. Even after you take out the cost of insurance in the early years of the policy your money still does far better than dying a slow death in a traditional bank. You have easy access to your funds just like a savings account so why keep most of your money in the bank doing nothing for you or your family?

Your Personal Bank– Just as described in the last chapter you can put these funds to use to plug up your 4 massive wealth drains and help you grow wealth as the bank. Because you are doing this inside of your life insurance contract your earnings are tax deferred inside the policy and when properly done can be accessed tax free. Also with some policies and carriers the money you borrow out will still be credited with growth and dividends. This is not common but there are carriers that allow this and we can help you determining which carrier is best for your needs

Retirement Account- There will come a time when you desire to pull an income stream out of your policy. You will be able to either withdraw the money as you see fit (not optimal most of the time) or take policy loans that you will not pay back. In most cases policy loans are optimal because you don’t have to pay taxes on policy loans. If you choose, you don’t have to pay the policy loans back during your lifetime. The loans can be paid back out of the death benefit after you pass away. For instance you have a $1,000,000 death benefit but have borrowed out $250,000 in policy loans and deferred interest and you pass away, your family will receive the $1,000,000 death benefit less any outstanding policy loans which in this case are $250,000. This will produce $750,000 tax free to your estate after you pass away.

Rainy Day Fund- You should never borrow all the cash value out of your policy but rather keep a chunk of money in the policy in case of emergency. This is a rainy day fund that produces solid interest rates and return.

Estate Creator- Let’s not forget you are creating all this wealth inside of a life insurance contract which will automatically leave behind money for your family and/or anyone else you choose after you pass away. My mom, as she aged, started to worry more about leaving money behind for her family instead of living as abundant of a life as she should have lead. This is the only kind of program where you can spend every nickel during your lifetime and still leave behind extra for your family. Wherever you have your money saved or invested currently, ask yourself if the account you have it in has all of the benefits listed below. These are all benefits of a properly designed life insurance contract. Please feel free to contact us if you need more information.

Money News

Money NewsIf you can master these seven gears of riches you will own a rock solid financial fortress. Most of my clients are not balanced when we first meet. When you can appropriately balance these 7 gears they will feed off of each other and you could have a wealth creation perpetual machine. How are your 7 gears working together?

  1. Income from job and/or business is your life blood to live your life and pay all your bills. I don’t feel we were put on this earth just to live, pay bills, and die so this cash flow must be large enough to pay your bills and live a certain lifestyle with options such as vacations, nice home, automobiles etc. When your cash flow is weak you cannot plug up your wealth drains nor can you fill in the other 6 gears. You should be working toward a results driven income so you are not limited by other people’s opinions of what income you should make. One of my mentors told me years ago that profits are better than wages. He was so right and for many reasons. (We will be exploring several ways to immediately increase your income in future articles. I want to give you several options to make extra money and for some of you that might lead to an entirely new career in the future. There are millions of families whose lives would be greatly influenced for the better if they just brought in an extra $1,000 to $2,000 of monthly income.)
  2. Investments are the second critical gear and there is a seemingly endless supply of places you can invest money that could make you wealthy and other seemingly endless supply of places that could also take all your money and leave you poor. The secret is to find a few core investments that you understand very well and work those investments. Become an expert at even one or two solid investments and focus your efforts in those areas. One of the biggest mistakes people make is to put all or most of their efforts to just their investment gear and little effort into the other main gears or drains of their financial life.
  3. Cash on hand is seemingly self explanatory and is not a difficult concept. However, even though it is a simple concept many people focus on putting so much into investments that if a short term cash need arises they might not be able to satisfy that need. They also might be able to satisfy the need but at a cost of selling investments at losses or incurring penalties and fees to get their cash needs met. Cash set aside is usually thought to be low interest bearing but that does not have to be the case. There are great financial vehicles out there that will allow you quick access to cash while still giving you a decent return on your cash as it sits in the account
  4. Guaranteed income is the income we can count on after our job or business income either goes away completely or drops significantly. Do you know how much income you need every month to live your current lifestyle? Would you like to live even better? Most retirement accounts such as IRA’s and 401k’s make no guarantees on how much monthly income they will provide in your retirement years. Do you have a pension? How much will you receive from Social Security? Will Social Security be there in the future for your retirement years? The Social Security Administration’s own web page says that if you retire after a certain year you will only qualify for 77% of the current amount given to you as your projected retirement account. A successful and abundant retirement will require safe and stable income.
  5. Debt elimination or reduction will be critical to a worry free life and retirement. If you have a $2,500 house payment and $2,000 of that amount goes toward principal and interest you will have $2,000 more net cash flow if you can pay that home off in full. You will learn how to do that faster and easier than you ever thought possible in future articles.
  6. Long term care or home health care in your older years. Most people’s plan for dealing with long term care boils down to one word……..Hope! Hope is not a strategy but there are strategies that are little known that can aid you should you ever need extra money for long term care or home health care. If this one gear falters it can systematically destroy all the other gears you have been working so hard to build. The average cost for care varies by state and even by city. Many times, by simply reallocating existing assets you can control the potential back breaker of long term care or home health care without expensive long term care policies.
  7. Estate or legacy is what you would like to leave behind in this world after you move on to the next one. Would you like to give family more options in their lives as far as education or opportunity? Do you have a special cause or foundation you would like to help long after you’re gone from this life? Would you like to make sure that all your hard work doesn’t go to Uncle Sam after you pass away or to a greedy court system? A proper estate plan is critical to closing out your financial life and leaving a positive influence behind generations after you’re gone from this world. If you want to determine who is entitled to what than a simple estate plan is a must.

We are going to show you how to build out all your 7 gears of riches while at the same time plugging up your 4 main wealth drains. This section of CNA Finance is dedicated to changing your financial future for the better. You hold in your hands a completely new way to look at money and wealth. We can’t wait to continue to add more articles to this section as the weeks and months pass! Tune in next week!

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Insurance News

Insurance NewsWhen I am speaking to a crowd on this topic I often call a properly designed whole life policy as the “one account” because it is so truly unique and powerful. It is the only account that I am aware of that can function with many different uses that all work together. This is the only account that can be:

Savings Account– When you are not using your money it is sitting inside of the life insurance contract collecting much more in interest than it would if it was sitting in a bank. As of this writing most savings accounts are paying 0.5% or less and some life carriers dividend scale is almost 6.5% on life policies. Even after you take out the cost of insurance in the early years of the policy your money still does far better than dying a slow death in a traditional bank. You have easy access to your funds just like a savings account so why keep most of your money in the bank doing nothing for you or your family?

Your Personal Bank– Just as described in the last chapter you can put these funds to use to plug up your 4 massive wealth drains and help you grow wealth as the bank. Because you are doing this inside of your life insurance contract your earnings are tax deferred inside the policy and when properly done can be accessed tax free. Also with some policies and carriers the money you borrow out will still be credited with growth and dividends. This is not common but there are carriers that allow this and we can help you determining which carrier is best for your needs

Retirement Account- There will come a time when you desire to pull an income stream out of your policy. You will be able to either withdraw the money as you see fit (not optimal most of the time) or take policy loans that you will not pay back. In most cases policy loans are optimal because you don’t have to pay taxes on policy loans. If you choose, you don’t have to pay the policy loans back during your lifetime. The loans can be paid back out of the death benefit after you pass away. For instance you have a $1,000,000 death benefit but have borrowed out $250,000 in policy loans and deferred interest and you pass away, your family will receive the $1,000,000 death benefit less any outstanding policy loans which in this case are $250,000. This will produce $750,000 tax free to your estate after you pass away.

Rainy Day Fund- You should never borrow all the cash value out of your policy but rather keep a chunk of money in the policy in case of emergency. This is a rainy day fund that produces solid interest rates and return.

Estate Creator- Let’s not forget you are creating all this wealth inside of a life insurance contract which will automatically leave behind money for your family and/or anyone else you choose after you pass away. My mom, as she aged, started to worry more about leaving money behind for her family instead of living as abundant of a life as she should have lead. This is the only kind of program where you can spend every nickel during your lifetime and still leave behind extra for your family. Wherever you have your money saved or invested currently, ask yourself if the account you have it in has all of the benefits listed below. These are all benefits of a properly designed life insurance contract.

Do your current investment or retirement accounts accomplish all of this?

  1. Give you principle protection against any downside market risk. Initial cash value and all subsequent premiums are principle protected
  2. Your money will grow every year contractually guaranteed by very old solid companies
  3. Non taxable growth and dividends paid to the account
  4. Allow you to access your funds at any age, for any reason, with no penalty or taxes, without fees. Big difference from 401k’s and IRA’s that have very strict guidelines and timetables for withdrawing or borrowing money from the account
  5. Total control of what you use your funds for including for investment, personal, business, and emergencies
  6. Ability to put large sums of money into the account while maintaining the account’s tax free growth and access. The maximum most qualified accounts (IRA’s and alike) will allow contributed annually is around $50,000. There is no such limitation on whole life insurance contracts(NOTE: While #6 is true please don’t think you have to be a high income earner to make this program work. We have clients putting in as little as $300.00 per month into their program. We also have clients putting in multiple 6 figures into their plans every year. This is truly a strategy for most income levels)
  7. Tax free withdrawals when done properly. These structures have a similar tax structure to a Roth IRA but without all the rules and red tape for accessing the funds
  8. Easy in and out of the policy means you can use this account as your personal banks and recapture lost depreciation and interest you might otherwise normally experience
  9. Very difficult for creditors to attach judgments and liens and be able to collect the funds. (always consult with a good asset protection attorney)
  10. Money creates a large death benefit that will also pass tax free to your estate (certain maximums apply, check with your attorney)
  11. Very easy to borrow money from the insurance company for the rest of your life. Not having to “qualify” for a loan as with traditional sources for funds. Truly taking control of your finances for generations to come
  12. Guaranteed insurability for life once you’re approved. Once you have this policy in place you and your family are covered for life assuming at least the base premium is paid as agreed. It is important to understand that the base premium might be able to be paid out of existing cash value in years you don’t want to fund it with anymore outside money. Unlike term policies that only insure you for a specific time frame. Many people are shocked to find out they cannot get new coverage because they have been diagnosed with an affliction that makes them uninsurable. You will also be able to stop funding the policy in the future and have it in force for the rest of your life without new premiums
  13. The freedom and flexibility to combine these policies with almost every other strategy outlined in this book. Your life insurance policy or private bank will be your centerpiece and cornerstone wealth creator. Many other wealth streams will flow around this rock solid base. Would you like to invest in real estate, make private loans, buy tax liens, buy gold, and buy discounted notes and discounted debts? You can use this policy to do all of the above and more

When you properly design a life policy with a proper carrier who embraces these types of policies you receive all these benefits. Now I always get the question “how do I get one of these set up?” If you go to your normal insurance agent please don’t be surprised if they look at you like a deer in headlights when you start describing this type of policy. There are only a handful of agencies who understand these concepts (to their fullest degree not just, “yes I have heard of it”) and I am sure you will not be surprised to learn that my company writes these policies all over the country and has done so for years. Please feel free to send us an email if you would like more information or to have your own custom illustration built.

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The Myth Of Whole Life Insurance

The Myth Of Whole Life InsuranceLast week we talked about depreciation on all our assets as a huge wealth drain and suggested one way to combat that wealth drain along with the other 3 wealth drains is to be your own bank.

Now is your time to understand that there is a fortune in using a pool of money just as a bank would and put volume and velocity on your side in your wealth creation efforts. You will use this strategy to stop the 4 wealth drains above and grow and protect wealth for you and your family. You can explore further at our other article on CNA about this very topic.

My last couple articles have been about banking but even more important it has been about your own control of your money and cash flow. We all have been told that we need to put our money into the stock market and let financial professionals handle our money and give up control. I do believe that there is a place for almost everyone to participate in the stock market at some level. In addition, a solid investment representative can be a huge asset to you in your wealth creation efforts. However, I also know that there are many ways you are quite capable of controlling much of your wealth and directing your own wealth creation efforts on several fronts.

Being your own bank and putting a stop to the 4 wealth drains are critical to everyone’s financial success and I hope you will start immediately to pool your own money either all at once or build your own bank over time.

Now let’s talk about the best place to pool that money once you have decided you would like to operate a portion of your life as the banker and not just the borrower.

What I am about to tell you might fly in the face of some of the financial advice you may have been given over your lifetime. I know that was certainly the case when I was first exposed to some of the concepts in these upcoming articles. A truly wise person is never closed down to the possibility that there are better ways to accomplish goals. This is how progress is made in all areas of life and human endeavor. I know I am very knowledgeable in many areas of investing, real estate, personal finance, and business. However, I would be an absolute fool to believe I “know it all” in any area. Put this to the test but only with an open mind. I did this by spending the first 3 weeks after I was shown some of these concepts trying to poke holes in what I was being shown. Soon I realized that the information I was given before about this topic was very one sided and closed minded. There is an old saying “if you can’t beat ‘em, join ‘em” and that’s what I did when it comes to the information you are about to learn.

Where is the most optimal place to operate this bank from and use volume and velocity? Should you just use a checking or savings account? Maybe you should use a money market account? After all, the account must be very liquid and easy to obtain funds. The truth is there is only one account that will be your optimal place to fund your own bank. That account is a PROPERLY DESIGNED WHOLE LIFE INSURANCE CONTRACT.

Many of the famous gurus of today still teach their students the same idea that whole life insurance is a lousy place to put money. I believed that financial myth for over 20 years and so I never did own a whole life policy during that time. I believed the untruth about “buy term and invest the difference” that’s still being told to the masses. So why is there such a difference of opinion between me and those gurus? To be fair to those that still teach that whole life is a terrible place to grow money, for what they understand about how most policies work, they are correct. The problem (as with many things in life) is you don’t know what you don’t know.

You see, most whole life insurance policies are written just for the death benefit and very little thought given to the cash value. Why? Because most whole life policies start off with very little, if any, cash value in the first few years and are only starting to grow cash many years into the future of the policy. However what almost nobody understands (even people who sell life insurance) is that there are some insurance carriers that will write a policy that will allow very high cash values from day one and design the policies to grow nicely over time. You can basically exchange a lower death benefit or coverage amount in return for more access to your cash and greater growth.

Example on how to use a banking policy.

Make sure to read next week’s piece to find out why this isn’t your father’s whole life insurance policy.

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