This week I am excited to introduce you all to another guest blogger, Rachel Marshall. Rachel is the Co-Founder, Chief Financial Educator, and Podcast Co-Host at The Money Advantage. Their mission is to help established business owners find and fix money leaks and leverage alternative savings strategies. In doing so, they have more to invest, without working harder or sacrificing their lifestyle.
What I love about Rachel’s message is that it goes against “traditional wisdom” that we have long been told to do. As an investor, there are different strategies which allow you to be more efficient and effective in your investments. And this is what Rachel shares with us.
I am an avid listener of Rachel and her co-host Bruce Wehner’s podcast The Money Advantage, and have even been interviewed on their show.
A word to readers: READ ALL THE WAY TO THE END! This is great content, especially the videos which are ideal for low attention span people like me.
(In case you can’t wait, here it is: : Privatized Banking – The Unfair Advantage)
With all that said, here’s Rachel…
Taking Control of Your Financial Journey
You’ve started on a path to take control of your financial life. Because of this, you are investing in assets which produce cash flow.
You’re not following the status quo, which includes:
- Putting all your money in Wall Street where it’s at risk of the market roller coaster
- Paying brokers who take their cut with management fees
- Plodding down the dead-end highway that never gets you to where you want to be
No. Instead, you know your break-even point – the cash flow you need to create to truly be financially free. You’re working towards that passive income by buying assets which produce cash flow. You are a smart investor.
So, how do you become a better investor?
By becoming more efficient.
Efficiency in Your Investing
With efficiencies in a washing machine, there is less waste, bubbles, and sputtering. Elite athletes use direct, energy-conserving movements.
In the animal kingdom, the lion is the “king of the jungle.” It’s not because he is the largest or fastest. Rather, it’s because he has the most efficient motion. He spends most of his time regally, unflinchingly poised. When he hunts, he is direct, and every muscle and fiber of his being works in a coordinated flow towards seizing his prey. It’s the opposite with squirrels, who dart in every direction with jerky movements. Squirrels are not the most efficient movers, and therefore, have not earned such a noble reputation.
When it comes to your investing, you want to find ways to improve and fine-tune continually. As you calibrate your investing, aligning it more closely to your investor identity of what you know and control, and do it most efficiently, without wasting time, dollars, or mental energy, you increase your results and power. You’re able to make decisions and pull the trigger with precision, increasing your efficiency.
The best investor is the most efficient investor.
With maximum efficiency, you can become the most elite of investors. Privatized Banking is a system and strategy that further improves your investing efficiency in three specific ways.
1. Privatized Banking Provides Guaranteed Access to Capital
The first way Privatized Banking improves your investing efficiency is that it gives you guaranteed access to capital.
When you have found a deal that you want to move forward with, you don’t want to be delayed in search of capital. Instead of having to scurry to secure your capital partners, find financing, or pull from accounts with hoops, hurdles, and delays, you want ready access to capital. Capital at hand gets you to the closing table quicker and more efficiently.
Privatized Banking improves your access to capital by giving you a pool of cash you can use whenever and however you wish. There are no strings attached. No requirements to qualify. No set repayment schedules.
This works well, because with Privatized Banking you’re building up cash value inside a Specially Designed Whole Life Insurance Contract. The cash value is accessible directly through a contractually-guaranteed policy loan. That means that the life insurance company is legally required to provide you with a loan up to the amount of cash value in your policy.
This guaranteed access to capital gives you peace of mind that you can get to the resources you need to invest with efficiency and precision.
2. Privatized Banking Doubles the Work Your Money Does
The second reason Privatized Banking makes you a more efficient investor is that it doubles the work your money does.
Multitasking has been given a bad rap. Humans used to think that we could spin a hundred plates at the same time and be effective in all areas. Now, we’ve come to learn that our brain is incapable of devoting full mental capacity to multiple things at the same time and we’re embracing the power of focus. In our own work life, we know that multitasking is a fraud.
However, if your money does two things at the same time, it doesn’t lose focus like our brain. Instead, it can accomplish both purposes effortlessly.
With Privatized Banking, your capital is sitting inside of a life insurance policy. While your money is at rest, between investments, it is growing. But the magic is that, even while it is deployed in another opportunity, it’s still growing for you.
The cash value is used as collateral.
The reason it is so valuable to you is that you do not take your money out of the policy. Instead, you collateralize your cash value by taking a loan against it, leaving your money inside the policy to compound and grow at a tax-advantaged 3 – 5% growth rate, based on dividends and interest.
Collateralization Allows You to Stack Investments
At the same time, you now have a policy loan against this collateral that you’re able to put to work in an investment. We call this “stacking,” or “double-dipping,” because you’re doubling the work your money does, allowing your money to work for you in two places at the same time.
It’s still working for you inside the policy because you never took it out, AND it’s also working for you in the external investment.
(Not to mention, the same dollars are also providing a death benefit, creditor protection, and more, so it’s really pulling its weight and doing more than two jobs.)
Having your money work in two places at the same time gives you the third advantage in your investment strategy.
3. Privatized Banking Boosts Your Investment Returns
The third way Privatized Banking improves your efficiency as an investor is that it boosts your investment returns. You’re gaining one return inside of the policy, AND you’re earning another return outside of the policy.
Let’s compare the results of two investors.
Each has $100,000 of capital to invest per year for seven years. While they are waiting for the right opportunity, they store up their cash.
One investor puts his cash into a Privatized Banking system. The other investor stores his cash in the bank.
Using an actual illustration for a 40-year-old man in average health, his policy grows at a compounded 3.72% annual equivalent, net of all taxes and fees, when looking out to year 37. To get the same returns in a taxable account with a 33% tax bracket, such as a bank savings account, you’d have to have earned 5.55%.
The investor with his cash in the bank earns a taxable 1%.
In the seventh year, both investors deploy $500K in a multifamily investment earning 12%. That’s $60K passive income per year.
The investor using Privatized Banking uses a policy loan, and the other investor pays cash for the property. For simplicity’s sake, we’ll assume they both hold the investment for 30 years.
Even though the first investor has a loan to repay, reducing his cash flow from the investment, he ends up with nearly $1 Million more in total cash 30 years later.
This is the power of having guaranteed access to capital, earning uninterrupted compound interest, getting your money to multitask, and earning returns in two places at the same time.
Your Decision Point
Because Privatized Banking improves your efficiency as an investor, it makes you a better investor. Your money is working harder for you than it’s ever worked before. And, it’s accelerating your path to time and money freedom.
If you’re already using Privatized Banking in conjunction with your investing strategy, kudos! I would encourage you to more fully and adequately understand the range of power that Privatized Banking provides so you can maximize its efficiency in your investing life.
If you’re not already using Privatized Banking, now is the best time to start.
If you want to find out more, check out our 20-min guide and video course: Privatized Banking – The Unfair Advantage.
Don’t forget to check out our podcast, The Money Advantage!