This will be my favorite newsletter of all time.
Today my family closed on a beautiful piece of property in Tennessee along with a stunning, up and running Air B&B.
This will serve as an investment, a vacation spot, and possibly our retirement estate.
And we bought it for cash.
We didn’t want a bank, we didn’t need a bank, and we didn’t even need to sell another rental property.
We got most of the money from our cash value life insurance policies, no questions asked!
Because we were able to make a cash offer, we leapt right into first position in a very competitive, multi-offer situation, and prevail. Cash was the only way we were going to succeed.
The other buyers offered to waive inspections and provided vision statements; we offered cash and 30 days to close!
It is not about the rate of return of your financial assets! It is about liquidity; efficiency; guarantees; safety; leverage; and control.
The money I accessed from my policies has yet to hit “break even.” That means I currently have less cash value than the total amount of premiums paid, even after 6 years. I will hit that break-even point in a few more years (safety). But while my cash value will eventually surmount the amount of money I have put into my policies as premiums (guarantees), it doesn’t matter.
In return for the temporary “negative rate of return” of my policies, as the average investor or advisor would look at it, I retain critical benefits – namely, a large permanent death benefit in case something happens to me (again, safety & guarantees), and the opportunity to access most of my money at any time I want for any thing I want (liquidity, control), without even affecting the growth inside the original vehicle (efficiency).
The real gain will come from the income I make on the property – leverage!
But it gets better.
“We're all in the banking business, it's just a question of what side of the table you're on.”
There is NO opportunity cost on the money I borrowed.
How can that be? Because the dividends** I receive on my life insurance policies are paid on the entire cash value, even if I borrowed against 95% of the cash value – which is exactly what I did!
So, I am consistently growing my cash value every year, with no chance of loss,* while at the same time leveraging my values to do things like buy into the stock market after the crash, or in this case, to buy an income property for cash.
Sure, there is a financing cost. It’s not like my “bank” can print its own money like the Federal Reserve.
However, the interest rate I pay on the loan is 5%, which is lower than current bank rates! And because that interest expense is offset by my dividends, my effective interest rate is considerably less than 5%.
My loan comes with more favorable terms than bank terms, such as the way interest is calculated. And I’m in CONTROL of the loan. I pay how much I want, whenever I want, depending on my personal circumstances. There was no application, no credit inquiry, no appraisal, no fee, and no DELAY!
Oh, and then I have those valuable insurance benefits on top of everything. If either my wife or I were to die, the tax-free death benefit will pay off our policy loans, leaving the surviving spouse with the property free and clear, in addition to a large amount of cash.
Again, I never could have secured this property if I didn’t have the ability and liquidity to make a cash offer. I didn’t actually have the money sitting in cash, so indeed I had to take a loan. I had simply positioned myself to be my own banker!
In my last newsletter, I closed by explaining, not for the first time, the benefits of a financial strategy utilizing cash value life insurance as the centerpiece. Today, I’m giving you a prime, first-hand example.
I’ve never been on the sideline, missing out. My money was always growing in a safe, efficient, tax-free manner, providing me with tax-free chronic care and death benefits. And it was available when I saw an opportunity and had to act fast.
Anyone can do this, if they just stop listening to the conventional wisdom that continues to fail us.
Ready to start thinking like a banker?
Best Newsletter Ever! Buying Real Estate for Cash – June 2023 (Pdf Download)
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Thank you for your time and for taking control of your financial future! Be safe. Be free!
Sincerely,
Sam Arieff
Arieff Consulting
(904) 478-0102
Disclaimers: This newsletter represents the opinion of Arieff Consulting, Inc, and does not constitute financial, tax, or legal advice.
* Subject to the claims paying ability of the company.
** Dividends are not guaranteed. However, companies I work with have paid dividends without fail for more than 100 consecutive years.