by Dan Thompson

From the cover:

Discovering Hidden Treasures was written by Dan Thompson with the intention of helping business owners better manage their capital. As a business owner you know that there is always a need for capital whether it’s for materials, equipment, payroll, etc. Learning how to use the banking system and other unique financial tools helps you leverage the capital you have, continue to grow your business as well as plan the future.

Common questions that are answered inside Discovering Hidden Treasures include:
-What is going on in the economy and how does it effect my financial plan?
-What is best way to save for retirement?
-How can I create additional tax advantages?
-Where is the best source for financing my personal and business needs?
-How can I protect my assets and pass them efficiently to my heirs?
-What is the Infinite Banking Concept?

Hard Copy – $15             PDF – $10                    Buy Kindle
            

by R. Nelson Nash

Written in the 1980’s, “Becoming Your Own Banker” is the the first book ever written on the Infinite Banking Concept. Though the idea of using dividend paying whole life insurance as a tool to create and maintain wealth was not knew, Nelson sheds new light on the value of using it as your private banking system.

Nelson’s work adds tremendous value to those seeking to learn more about the Infinite Banking Concept (phrase coined by Nelson himself). It is filled with examples of the powerful potential that lies within becoming your own banker.

From InfiniteBanking.org:

Finally! A book that tells the truth about Dividend-Paying Whole Life Insurance. Exercise your imagination with this major paradigm shift. Reading the book just one time won’t do the job.

There have been many people who have had a glimpse of what this book is all about, but none, to my knowledge, has put together a comprehensive rationale such as you will see here. Read it with an open mind and you will discover an exciting new financial world!

Purchase on Amazon, or contact us for a free copy.

by Joshua Thompson

Description:

High cash value whole life insurance is one of the most misunderstood and underutilized financial tools today. Unfortunately, we live in a world that puts investment luck over hard work and smart investment decisions. “The ‘Simple’ Banking System” is a concise and to the point view on all the advantages and disadvantages of whole life insurance, how it works, and how it may, or may not, work for you.

The purpose of this book was to get you quickly up to speed on exactly how whole life insurance works as an investment tool. This way, by the end of reading this book, you will have a clearer picture of how it works, and, more importantly, if this is a product that is right for you.

The Simple Banking System will give you a concise and to the point view on everything involved with whole life insurance as a banking system.

It’s easy to read and an excellent, highly recommended book for anyone starting or already learning about high cash value whole life insurance.

Purchase options below…

Hard Copy – $6.14      PDF Copy – $5     Buy Kindle $5.83
            

Carlos Laura and Robert Murphy have done a brilliant job explaining the need for privatized banking. While not facing the idea of using life insurance as your own private bank head on, they start by explaining the need for privatized banking, and how the idea of Infinite Banking can solve that very issue.

Very good read to better understand the overall need to move money away from the federal banking system, and toward privatized banking.

From the Author’s website (www.usatrustonline.com):

The powerful combination of Austrian Economics, The Sound Money Solution and Privatized Banking, as described by R. Nelson Nash’s Infinite Banking Concept, is the “new” idea in this book.

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“Lara and Murphy have demystified fractional reserve banking, and made it clear: We’re getting ripped off!”
– Dr. Thomas E. Woods, Jr. Author of the New York Times bestseller Meltdown and The Politically Incorrect Guide to American History

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“Read this book and learn how you can personally secede from our crumbling monetary regime and improve your financial future while undermining this insidious system of government controls.”
– Dr. Thomas DiLorenzo Professor of Economics, Loyola University Maryland, Author of How Capitalism Saved America, The Real Lincoln, and Hamilton’s Curse

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What if there was a solution to government intervention and our current money madness? Would you hesitate one minute in wanting to know what it is? Of course not! No one would. The problem is so pervasive that a solution seems impossible and yet, there is a solution. This solution’s only requirement is the action of a single person acting in a manner to help only himself, but in so acting ultimately he helps all of society.

Purchase on Amazon

Defining Paid Up Additions

To be more technical, paid up additions are an immediate purchase of life insurance coverage (death benefit) in full. That paid up insurance then adds cash value equal to the paid up price.

Let me break that down a little bit. Make sure you read the example at the bottom, it will clarify even further.

A purchase of paid up additions is essentially paying for the death benefit, in full, today. Because it is being paid for, in full (hence the name “paid up”), there are no premiums or insurance costs associated. It is fully paid for insurance. This also means that the dollar you used to pay for the insurance are now dollars added to your cash value. Simply put, its money you put into your policy that goes into cash value, and gives you more death benefit.

Paid up additions can be paid for out of pocket, or can be purchased with dividends.

One of the main uses of the paid up additions rider is to add cash value to the policy. This is especially beneficial if you are using life insurance as an investment, and want to accumulate cash value quicker. When you contribute to the paid up additions rider, those dollars ultimately increase cash value and increase death benefit. This can have significant advantages (safe, liquid, tax friendly). Check out our high cash value life insurance resource page for more information on why this can be beneficial, and how to create it.

Flexible vs Non-Flexible

Every insurance company is different. Some have a flexible paid up additions rider, where you can contribute as much or as little as you would like into the rider from year to year. Others are less flexible, and if you do not continue to contribute to the rider at the same levels, you can risk losing the rider and having to reapply for it in the future.

Adding the PUA Rider

To take advantage of the paid up additions rider, it needs to be structured into the policy when you purchase it. Some companies may allow you to add it in the future, but it may be subject to health, age, and other factors.

A Hypothetical Example

A 35 year old purchases a policy with an annual base premium of $4,000 dollars. This premium purchases $200,000 of death benefit.

This individual decides to pay and extra $6,000 into a paid up additions rider in the first year. The paid up additions will give him an immediate cash value of $6,000, and add $30,000 to his death benefit.

He ends up paying $10,000, with $6,000 going to cash value, and a total death benefit of $230,000. If he continues to purchase paid up additions, he will continue to increase his cash value, and his death benefit as time goes on.

Make sure to sign up for our Infinite Banking Info Kit to get more information on how to use the PUA Rider.

Life insurance policy loans are one of the least understood aspects of the Infinite Banking strategy. In fact, many insurance agents have been banned from selling insurance through different companies, simply because they portrayed loans incorrectly.

It’s a common belief that, just like a bank account, your policy allows you to take loans from your cash value, and pay yourself back the principle and interest. This, however, is not the case.

The cash value of your policy is simply that… cash value… a value given to the policy based on a variety of factors (time, contributions, health, etc). It is not a cash account, or side fund, of any kind. It is also described as the dollar amount the insurance company will send you if you cancel your policy.

When you take a policy loan, those funds are offered to you by the insurance company with your policy cash value acting as collateral. When you make payments back, they are paid to the insurance company and not to your policy. To clarify even deeper, there is no relationship between those payments and your policy. It is not credited back to you directly in anyway. The funds go back to the insurance company’s resources, and are calculated into the dividend they eventually distribute.

This misconception is unfortunate because paying the insurance company is, in my opinion, in your best interest. It is my experience that you will cheat yourself, and being required to pay the insurance company gives you a greater sense of responsibility. Additionally, when you borrow for certain purposes (like business and investments), the interest can be tax deductible, which would not be an option if you were to, indeed, pay yourself back directly.

Keep in mind this has almost the same outcome as paying yourself, but with slight differences that need to be taken into account when borrowing.

If you are looking for additional information, please contact us, or comment below.

Jake

The idea of paying, or charging, yourself extra interest is more of a philosophy than a rule, and is commonly taught incorrectly, in my opinion. The idea of paying yourself more interest than the insurance company charges is simply a way of forcing yourself to pay off the loan to the insurance company quicker. Higher interest results in increased payments, which snowballs (adds additional principle) the loan, resulting in a faster payoff. Once the loan is paid back completely, the payments you are forcing yourself to pay will be used to add additional premium to your policy, or to start a new one.

This, for me, gets a little confusing, and tedious to manage. The philosophy is actually quite simple, and should certainly be applied to the overall Infinite Banking Concept. Here’s what I do.

Instead of trying to create extensive amortization schedules, track payments, and become a loan officer, I use the philosophy that my money is more valuable paying off loans and saving interest than sitting in my bank account. If, at any point, I have extra money, I apply it to my loans. This reduces my overall interest expense, ultimately increasing the long-term efficiency of the strategy. Money saved is money earned right? I am essentially trying to pay off my loans as fast as I can, and if I have no more loans to pay off, I add those funds to the cash value, or start a new policy.

The great part about having your own private banking system is that you have less fear of paying things off quickly. When I borrow from a bank or other financial institution, I hesitate to make extra payments, because I know that if I need that money, I’ll have to qualify to get it. Using my own banking system allows me to pay things off quickly, knowing that I can access that money anytime I need it. I find this to be a significant part of this strategy, much more valuable than I am capable of expressing on paper.

Hopefully this helps explain how what it means to charge yourself interest. Please let me know if I better clarify anything here.

Life insurance policy loans are one of the least understood aspects of the Infinite Banking strategy. In fact, many insurance agents have been banned from selling insurance through different companies, simply because they portrayed loans incorrectly.

It’s a common belief that, just like a bank account, your policy allows you to take loans from your cash value, and pay yourself back the principle and interest. This, however, is not the case.

The cash value of your policy is simply that… cash value… a value given to the policy based on a variety of factors (time, contributions, health, etc). It is not a cash account, or side fund, of any kind. It is also described as the dollar amount the insurance company will send you if you cancel your policy.

When you take a policy loan, those funds are offered to you by the insurance company with your policy cash value acting as collateral. When you make payments back, they are paid to the insurance company and not to your policy. To clarify even deeper, there is no relationship between those payments and your policy. It is not credited back to you directly in anyway. The funds go back to the insurance company’s resources, and are calculated into the dividend they eventually distribute.

This misconception is unfortunate because paying the insurance company is, in my opinion, in your best interest. It is my experience that you will cheat yourself, and being required to pay the insurance company gives you a greater sense of responsibility. Additionally, when you borrow for certain purposes (like business and investments), the interest can be tax deductible, which would not be an option if you were to, indeed, pay yourself back directly.

Keep in mind this has almost the same outcome as paying yourself, but with slight differences that need to be taken into account when borrowing.

If you are looking for additional information, please contact us, or comment below.

Jake

Quick note: with the sheer number of apps available it was impossible for me to cover everything – if you are in love with an app that isn’t listed please share it in the comments.

So here we go, the top 5 must have finance apps.

MoneyMobile

From the guys at Money Desktop comes this killer personal finance tracker app. If you haven’t heard, Money Desktop is revolutionizing online banking. For the most part they provide online banking solutions to banks and credit unions but they have a free personal finance app that allows you to manage all your accounts and create and manage budgets with their patent pending “bubble budgets”

Debt HD Free

This app has some handy features to help you pay off your debts in the most efficient way possible. It even helps you plan and see the results of using the snowball method to pay down your debts.

If you don’t have a Mint account, go get one. Now. This app automatically tracks everything on your phone: your bank accounts, credit cards, loans, spending, etc. It’s incredibly intuitive and it’s all in one place so you can easily see the big financial picture.

ShopSavvy

ShopSavvy will help you do just that, find the best deals on almost anything you’re shopping for. It’s simple, pull out your smartphone, scan the barcode of the item you want and let ShopSavvy tell you where to find the item for the cheapest price.

Along with local results you’ll get online results from places like overstock.com and buy.com so you can guarantee you’re getting the savviest deal.

Pageonce – Money & Bills

Simplicity rules with this finance app. Easily keep track of all your utility bills, cell phone bills, credit card bills, etc. Not to mention having all your accounts in one, easy to navigate location. Pageonce is definitely worth a look.

Shoeboxed

This is a handy little app that allows you to easily digitalize your receipts for effortless organization. This may be a good alternative for those of you that aren’t jumping to share all your bank account information with apps like Mint, etc. Instead of piling up receipts all month on your kitchen counter, use Shoeboxed to de-clutter.

So there you have it, 5 must have personal finance apps. I’m sure you can think of a few others that deserve to be on this list so let’s hear all about em.

The idea of premium financing or premium funding is simple – typically a third party will loan the consumer funds to cover the premium for insurance they want to buy.  These loans are most easily compared to a variable rate loan with a set term.

You may be having some of the same thoughts I did when I first heard about this idea…”why the heck would anyone do this?!”

Before I get into an example let me point out that this strategy is one that is typically used by high net worth individuals that don’t want to liquidate current assets but still understand the need for coverage. They may also be dealing with large estates, businesses, or taxes.

So here’s a quick example: 

Meet Phil and Jill.  They’ve been married for 30 years, Phil is 60 and and Jill is 54 and their net worth is $50 million.  They look into getting a $5 million dollar life insurance policy only to find out that that the annual premium would come in around $223,000.  That’s a good chunk of change each year.

Enter Premium Financing.  Instead of paying $223,000 each year for the next 30 years until the policy is paid up they could borrow $1.7 million at 4.5% from a premium finance company.  This lump sum of money would allow them to pay for the life insurance in full today, known as a single premium insurance policy, have $6.7 million in coverage,  and pay $76,500 in interest each year to the premium finance company that lent them the money.

When Phil passes on, he will leave $6.7 million to his wife Jill. Jill can use $1.7 million to pay off the loan to the premium financing company and she will be left with the same $5 million death benefit. The benefit? They paid a fraction of the cost. They saved $146,500 a year in insurance premium… not bad.

 What to Look For

As with any financial strategy it’s vital that you work with a reputable company and representative.  As you do your due diligence make sure you find out the terms and conditions of the loan.  Often times the loan will have to be refinanced or renewed before the death of the insured – make sure you know if and when this will happen and what effect it could have on the overal outcome.  Ideally you would want a loan with a term that stretches well beyond your life expectancy.

Take interest rates into consideration.  Most premium finance loans are variable, which could be a good thing while rates are low, but if rates are expected to go up dramatically it could pose a problem to the strategy.

A good rule of thumb is to run from anyone who claims that premium financing is a way to obtain “free” insurance.

Is It For You?

Premium financing is a option for high net worth individuals that, for estate planning or business purposes, need substantial life insurance coverage.  The decision for most is whether or not they want to use current cash flow or liquidate assets to pay for the premiums.  If current cash flow and assets are better used elsewhere then premium financing could be a viable option.

Bring on your comments….what did you first think when you learned about premium financing?