Thanks for reading So, You Want More Control Of Your Money? We are very excited to help you begin building your financial foundation so you can achieve financial freedom, die without debt, and leave a legacy.
As always, our educational resources are designed to give you the tools needed to achieve a strong and stable financial foundation. The information found in this blog today is basic knowledge for anyone wanting to build wealth successfully, safely, and consistently while using a Specially Designed, Dividend-Paying, Whole Life Insurance policy for Infinite Banking purposes.
So, You Want More Control Of Your Money?
When it comes to building wealth there are so many financial products and investment strategies out there it’s hard to know where to start. If you’re reading this then there’s a pretty obvious reason why you’re here, because you want more control of your money – you can join myself and thousands of other young professionals who feel the same.
At The Wise Banker, we help people like you understand there’s often a combination of risk, taxes, interest payments and/or opportunity costs associated with most of these options that limit financial potential.
In this blog, I’m going to address the different kinds of risks outside of your control that are limiting your potential.
The Three Predictable Risks
The three predictable risks humans face in their lifetime are the risk of premature death, risk of disability and sickness, and risk associated with old age — all of which we must prepare for if we hope to die without debt and leave a legacy.
Pure and Speculative Risks
Then there is pure risk, which is a risk that involves only a chance of loss and there is speculative risk, which is a risk that’s taken with hopes of making a profit. When investing – a speculative risk – there are systematic risks which affect everyone involved regardless of diversification. These systematic risks include market risk and political risk. There are also non-systematic risks which only apply to one business or specific set of investments at a time and include interest rate risk, business risk, liquidity risk, and currency risk. There is risk involved in not having enough money when we spend it and it’s called scarcity, but there’s also risk involved when we save money instead and it’s called inflation risk (also speculative).
It seems a bit obvious that we live in a world of finance, debt, and risk! On the bright side of speculative risk, we can achieve our financial freedom, but on the flip side there is confusion and uncertainty about money.
So, What Do We Do?
We can retain the risk and pursue a particular course of action anyways. We can avoid risk altogether which itself can be risky. We can employ risk mitigation techniques to reduce the risk and chance of suffering a loss, control the risk and severity of the loss, or segregate the risk by spreading it around. We can also finance the risk to ensure that if a loss does occur, there will be funds available to offset the consequences of the loss. Or, alternatively, we can transfer the risk to someone prepared and willing to help us deal with them.
If we’re thinking about restoring and stewarding money into future generations, then we know that retaining and avoiding risks are not ideal options because there’s always going to be an element of risk involved no matter what we decide to do with our money. Risk mitigation and financing are good practices to keep, though it’s hard enough as it is for the average person to save for retirement alone when the Canadian household net saving is $2812 in 2017 or 3.5% of household disposable income. This will be made even more difficult if we consider the financial burden of having a disability or illness that may occur and cost us more money.
Now, there is a difference between savings and investments; savings being the money we can’t afford to lose and investments being money that we can. For those of us who can’t afford to lose money because of the principle of stewardship, it’s important to understand that the biggest risk of all is the one where we aren’t planning our finances in a way that provides for our children, grandchildren, and great-grandchildren and that teaches them to do the same. We believe that too much money has been lost over the years unnecessarily due to poor risk management practices. If we understand all this and are prepared to take on risk but also want to protect ourselves and the future generations, then the best option for risk management is to transfer our risk to the person or institution willing to take it on for us, giving us the benefit of participating in speculative risks without the fears, headaches, and heartaches involved otherwise.
The good news in knowing transferring risk is an option is also knowing there is a warehouse full of the wealth and prosperity of Canadians that is just waiting to be restored to its rightful owners. The question is, “how we get there?” and is where Infinite Banking comes into play.
Infinite Banking Can Give You More Control
Infinite Banking is a cash flow management system that uses a Specially Designed, Dividend-Paying, Whole Life Insurance policy as it’s financial foundation to use and grow your money. By funding future purchases through this policy, you can redirect interest costs back into this policy and save the opportunity costs associated with spending money.
Since the very nature of life insurance is to provide financially for loved ones upon the death of insured individuals, life insurance embodies the spirit of thinking long term, and enables the transfer of wealth to future generations by allowing us to transfer our own risks to the company. A unique and often ignored value of Whole Life insurance are the living benefits. Life insurance was used as a primary savings vehicle in the early 20th century because of built in guarantees, liquidity in the form of cash values and the stability that the private insurance sector was built upon. Given the rise and fall of the financial industry over the past 100 years, life insurance has largely been forgotten or disregarded for the very purpose for which it was created. Properly structured Whole Life insurance policies provide policy owners with control, liquidity, use and equity.
We know how hard it can when there’s financial risk involved and have helped Canadians use Infinite Banking as a way to transfer the risk of the financial markets. When you transfer risk and other pitfalls like interest payments and opportunity costs, your money can start working for you to build wealth designed to last for generations.
My personal hope is that throughout this educational process, you will come to know the same peace, clarity, and stability that I have experienced in my own financial plan and life with Infinite Banking.
Infinite Banking and whole life insurance are two separate and equally complicated topics to break down and discuss. Right now, my hope in writing these blogs is to build a basic understanding for Infinite Banking and while doing so, offer simple explanations for things and refer mostly to uncomplicated insurance plans. I will touch more on estate planning, corporate owned life insurance, and planned-giving in future blogs – always for education purposes and not intended as financial advice. Thanks for understanding!
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All the best in your financial journey,