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Posted on 07/08/2012 6:45:55 AM PDT by WhoisAlanGreenspan?
I've searched and found only one mention, a joke, about bank on yourself here on FR.
I listen to talk radio and one station WDTK - The Patriot, advertises bankonyourself.com so I thought I'd check it out.
It has to do with a concept of over-funding a whole life insurance policy that you can earn interest on at a much higher rate than a savings account, and of course you can borrow money from it as well.
Recently my business changed mortgage lenders and switched from paying an escrow for the property tax to maintaining my own in a credit union savings account. I hadn't given earning interest much thought until I saw dividends being deposited; Wow, $.13 for the first 1/4 and $.75 for the second. As I understand it, the bankonyourself would pay more like 4% or even 7-8%.
Don't get me wrong, I'm just looking into this and seeking comments.
Here's some links to read more:
Setting Up Your Own Personal Banking System by Jorge Herrera
bankonyourself website
Try this link at you tube. I used to sell this mortgage here in michigan and also other states. My primary targets were high income and high net wealth individuals who could use this mortgage product as a pass thru account to drive interest down. It is a first position HELOC. I placed this mortgage on my house and we are paying it off next year in July. Big party time here. Paying off $180 K in 5 Years. Not bad. No way we could have done it without this product. Our interest rate today is about 1%.
Stay away, for reference see my tagline...
This is nothing more than a repackaged whole life insurance policy. They are the equivelant of the payday lenders for the middle class. Any increased interest is miniscule when you consider your total wealth building plan.
It is hard to give you numbers without more details, however the package you are referencing is generally a bad product. Run your numbers and you will probably see that you gain enough each year to buy a pizza, but you lose so much on your true growth that you are getting hammered by the fees and commision...
Stay away, for reference see my tagline...
This is nothing more than a repackaged whole life insurance policy. They are the equivelant of the payday lenders for the middle class. Any increased interest is miniscule when you consider your total wealth building plan.
It is hard to give you numbers without more details, however the package you are referencing is generally a bad product. Run your numbers and you will probably see that you gain enough each year to buy a pizza, but you lose so much on your true growth that you are getting hammered by the fees and commision...
"Blindly following the advice of Wall Street and financial “gurus” such as Dave Ramsey and Suze Orman got you where you are."
no link???
It sounds like just a new way to sell whole life insurance.
Something like this? http://www.quickenloans.com/blog/what-is-a-first-lien-heloc-5095
Except, I thought they changed it so you can't deduct mortgage interest anymore.
While a viable financial TACTIC, the strategy should be:
Live within your means
Protect against loss
Pay down debt
Establish an emergency fund (3 months of bills)
Save and invest disposable income via diversification
Over funding an insurance policy is one way to Save and Invest and since is different from stock/bonds, real estate, business portfolio, etc does qualify for diversification. However, it is the last of the 5 steps to financial freedom.
When they blatantly lie in their marketing, it is proof that their product is a scam. I won’t speak for Suze, but if you follow Dave’s baby steps you will become debt free and eventually wealthy. Their statement is proof that their product defies common sense and is therefore a money making scam for their sales persons.
If they have a legit product they could sell it on its merits without the need to blatantly lie.
The concept is ok but not as good as it could be. I designed my own policy and got 90% cash value accumulation year one by adding a term rider. It cut the reps. Ommission so the rep wont tell u about it. Freepmail me if you want to know more.
I didn't want to do business with a company that tried to fool me that way.
They advocate whole life insurance.
My interest in this concept is only in regards to my small business at this point. Where pretty much everything cash that goes in, comes right back out after awhile. So for my purposes this isn't so much get rich as it is get smart with money waiting to be spent on designated items.
Our situations are probably pretty different, neither my business or myself personally are sitting on a bunch of cash wondering what to with it, but the amount of cash that flows through the business makes me wonder.
I appreciate your comment.
Again, although I'd like to get rich, or be rich. My emphasis is to investigate this concept and any other concept that comes up (several have), where I can run the cash flow of my business through a channel that pays better than zero for the possession of capital that just sits there waiting to be paid out for its intended purpose.
What I know is I run somewhat south of 1/2 million dollars a year (a truly small business) through a number of banks and financial arrangements that pay me nothing for the privilege, but they charge fees whenever they can.
Perhaps Dave Ramsey is right about whole life insurance. I'll certainly keep it in mind.
Here’s my take on life insurance. I hope is helps you.
My father worked hard, educated himself, and invested wisely. He retired as a vice-president and company officer of an electric utility in 1991.
He had invested his money in Merrell Lynch funds and a life insurance policy with a reputable company.
Merrell Lynch lost much of his total investments in the late ‘90s. A couple stock market crashes haven’t helped. I convinced him to pull out of all mutual funds in August 2008 and put his money in bank CDs. That was the right thing to do, and he made money in 2009.
In 2010 he broke his hip, was declared incompetent and I assumed power of attorney for him.
Due to Alzheimer’s and a high maintenance grandson, my father’s savings no longer existed. It’s a bitch when you outlive your money. Grandson/nephew and myself are looking for full-time work to help support him in a nursing home.
Late last year, after the MFGlobal fiasco, I looked into the company behind dad’s life insurance policy and was shocked to discover that they are heavily invested in commercial real estate. Those are conservative investments and generally isn’t a problem, but many businesses in today’s environment are failing, pulling out of leases, and there are high rates of vacancies across the nation.
I’m certain the economy will collapse; not a question of ‘if’, but ‘when’.
So I gathered my close realtives and tendered a suggestion: we cash in the life insurance and pay off dad’s debts. My reasoning was thus: if we wait until he passes away, which may not be anytime soon, the life insurance company may no longer exist.
He has another, smaller insurance policy with his former employer which is suitable for paying off accumulated debt at end of life. Electric utilities generally keep operating during economic hard times. They’re good, I believe, for dad’s continuing pension pay-outs and the life insurance policy, but I’m keeping my fingers crossed at this juncture.
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