- Jan 15, 2016
Anyone familiar or practice it? Legit or nah? Still in the learning phase, but a colleague swears by it and its potential to help create generational wealth.
yeah, I was looking into this and unless you are "saving" 5k a month on not paying interest on that loan you are losing money doing this.Just a reminder - mutual life insurance dividends aren't taxable because the IRS deems that you were extremely overcharged to begin with (i.e., the IRS deems them as a refund of overcharging you for premiums)...
It’s a viable option to create wealth, but not for you. It’s a lifetime commitment that instead benefits your heirs plus you don’t have as much flexibility as with an IRA or one of the other defined contribution plans. You can’t change your mind and pull your money back out. Plus you can’t put premium payments on pause. But if you are a kazillionaire (or at least 8 figure wealth) it might have a place for some of your investment mix. It utilizes leverage which isn’t allowed with IRAs/DCBs.
But why give the insurance companies a big cut of your investment returns through their fees?
Maybe but people don't get to 8 figure net worth by paying excessive fees and locking in a long term low rate of return.
It can be part of an estate plan but there are just better and cheaper alternatives IMO...
It’s a method to use leverage inside of a wealth management plan. It’s used when creating generational wealth. It isn’t a logical alternative to prioritize over maxing out IRA and other defined contribution options.
So many better ways to use leverage or create generational wealth....
Paying excessive fees for decades isn't the way. When you hear whole life and investment, run....