Bank on Yourself...

Need to pay for kids college?  Or want to take a trip?  Finance it by banking on yourself!  The way to be your own banker and create tax free income for yourself is to use a fixed index strategies program.  The development of fixed index strategies makes other old fashion types of savings plans obsolete.  

Let's say a 30-year-old saves a thousand dollars a month for five years in this plan. After that a loan from the plan could be made every 5 years until age 60, funds to buy a new “car”.  Each time they borrow, they pay their plan back over the next 5 years the “same” payment that before would ordinarily be paid to the bank.  If they do this, they will also create tax free income for later, something your car loan will never do for you!

The accumulation goal for this type of plan could be for college funding, mortgage acceleration, retirement savings, and/or income, the own banker feature is secondary.  If they make contributions for a longer period of time they can borrow much more using with this program. 

As for the Own Banker concept in general, it is a lot less complicated than most people seem to think: 

1) You make contributions into the plan just like you would your 401k.

2) You borrow money from the plan (for any purpose you want).

3) You pay the money back to yourself (instead of the bank) with pretty much the same payment.  If you don’t put it back, then you will have less you can take out later (in retirement).

4)  Unlike your bank or credit union, if you pay it back “late”, there are no derogatory marks on your credit or late fees.  That’s pretty much all there is to it.

There are two types of loans, fixed rate and variable rate loans and with the fixed rate loan your money does not participate in any index gains and the plan will typically credit back most the loan interest unless there is a wash (or zero cost) loan provision.  Variable rate loans are only used with the fixed index strategies plan where your interest is credited using an index like the S&P 500. The biggest difference with the variable rate loan is that you get all of the index gains on your money as if there was never a loan.  Similar to a loan from a 401k retirement plan, there are no late fees and payments are not required, although it would be in your best interest to put the money back for retirement income or your next loan.

 If you would like to visit, and go through the fact finding process we can suggest valuable strategies that will help you reach your goals and secure your vision of the future.