Why You Want to Be Your Own Bank?

I always want to be the “bank”…not in Monopoly… in real life.

Why?

You know how everyone thinks banks are safe places to park their savings?

That’s exactly what the banks want you to think. So you’ll put your life savings with them.

What’s your interest rate in your bank savings account?

Inflation is 3.3% each year…are you making or losing money in savings account?

 

 

The bank borrow money for almost free and lend YOUR MONEY out at 5%, 7%, 10% interest.

Related article: Is Your Money in Your Savings Account Working Hard for You? Or for the Bank?

 

How Be Your Own Bank Works

The cash value life insurance is a little known secret tool for wealth building and investing.

If is actually 2 products in one vehicle – life insurance and a savings account.

The difference between this “savings account” and your bank’s savings account is that the “cash value” savings account grows tax-free and is distributed to your beneficiary as tax-free death benefit.

Let me clarify this a little. Every cash value life insurance policy is different. Most charge interest rate for borrowing…some charge more and some charges less.

The Transamerica Financial Freedom Indexed Universal Life Insurance that I own and represent, charges a net interest rate of 0.75% for first 1-9 years, then 0% after 10 years.

Also a very important point to remember is when you borrow money from your cash value, you are not taking money out from your cash savings account, you’re borrowing money against your cash savings account, which is being used as a collateral for your loan. This is an added bonus, because your cash savings account continues to grow money tax-free while you’re enjoying your extra cash interest-free.

Another bonus with borrowing from a cash value life insurance is that you don’t have to repay your loan it you don’t want to.

How? Good questions!

Remember it is a life insurance policy. So it also has a face value. When you die, the insurance company will pay off your loan from the proceed of the death benefit.

If this is the first time you’ve heard of this life insurance feature, don’t be alarmed. Life insurance has come a long way just like mobile phone has evolved into smart phones.

Related article: Do You Have the Best Life Insurance?

Consolidate high interest debts

Long term care

Critical or terminal illnesses

Invest in real estate

Pay for college tuition

Pay for private school tuition

Start a business (like Walt Disney)

Supplement retirement income