Tri-CitiesVol
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yeah, I was looking into this and unless you are "saving" 5k a month on not paying interest on that loan you are losing money doing this.Just a reminder - mutual life insurance dividends aren't taxable because the IRS deems that you were extremely overcharged to begin with (i.e., the IRS deems them as a refund of overcharging you for premiums)...
It’s a viable option to create wealth, but not for you. It’s a lifetime commitment that instead benefits your heirs plus you don’t have as much flexibility as with an IRA or one of the other defined contribution plans. You can’t change your mind and pull your money back out. Plus you can’t put premium payments on pause. But if you are a kazillionaire (or at least 8 figure wealth) it might have a place for some of your investment mix. It utilizes leverage which isn’t allowed with IRAs/DCBs.
But why give the insurance companies a big cut of your investment returns through their fees?
Maybe but people don't get to 8 figure net worth by paying excessive fees and locking in a long term low rate of return.
It can be part of an estate plan but there are just better and cheaper alternatives IMO...
It’s a method to use leverage inside of a wealth management plan. It’s used when creating generational wealth. It isn’t a logical alternative to prioritize over maxing out IRA and other defined contribution options.
So many better ways to use leverage or create generational wealth....
Paying excessive fees for decades isn't the way. When you hear whole life and investment, run....
My wife and I have been practicing it for the past 3 years. I studied it for about a year before we started our journey. It's a completely different way to think about money and seeing how much of your paycheck flows away from you and learning how to recapture those cash flows into your own banking system. It's also not an investment, it's a savings vehicle and place to store your wealth/capital and then you can choose to access your capital via policy loans and deploy it for whatever you want (payoff debt, invest, etc). And while your capital is deployed and working for you, your equity or cash value continues to grow because it hasn't been touched! The same dollars are working for you in two places. When you take a policy loan, you're getting the insurance company's general fund money and they use your policy cash value as the collateral.Anyone familiar or practice it? Legit or nah? Still in the learning phase, but a colleague swears by it and its potential to help create generational wealth.