lost opportunity

Wealth Building Opportunity

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While most financial advice is heavily focused on maximizing return while minimizing fees (and this perhaps is one of the reasons so many people fail long term in their financial plan) I'm going to take time today to introduce a concept that is by no means new, but one of those golden little nuggets that could dramatically change the way you look at financial matters through the lens of your personal self worth.

Because SOPA and PIPA went down a ball of flames I'll post the following picture to illustrate what today's post will be all about.  Not, of course, before acknowledging that it's not my original work and noting that you can purchase it directly from despair.com (I haven't started selling ad space; I'm not getting paid for this, FYI)

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Bank on Yourself®, Infinite Banking, et. al. Unraveled

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Bank on Yourself®, Infinite Banking, et. al

Our regular readers know that we have a certain love/hate relationship with the whole Bank On Yourself®, Infinite Banking, and their various iterations. We certainly enjoy their work in furthering the cause, the notion that one really can use cash value life insurance as a means to accumulate wealth and that the products actually do make for an incredibly stable and predictable asset.

But…

Our good friends at their respective camps also tend to make a few claims that we think are a tad over the top. While the notion that whole life insurance and/or universal life insurance can be used as a means to acquire the funds for major purchases, and that the use of life insurance to do so has a much smaller economic impact on the individual are certainly all valid, we’ve pointed out numerous times in the past that these systems are totally off base in their suggestion that one can enrich his or her life further by virtue of using their life insurance policy for policy loans. In other words, it’s good…but it’s not that good.

We’ve been asked quite a few times to put the logical discussion into more concrete terms with a numerical example. Our delay in doing so has nothing to do with our unwillingness, and everything to do with lack of time to focus energy on putting the numbers together, that all comes to an end today.

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