Banking from Yourself & Leveraging/Hedging Stocks

This page is still under construction…

Last year I learned this cool financial hack utilized by the smart money. By being your own bank and using the Infinite Banking Concept you can create a dividend-paying whole life insurance. Its called life insurance but its just a tax code loophole to make a tax free yield in an account that is sheltered from lawsuits and creditors. I can assure you this is another thing you financial advisor or life insurance sales guys just does not get… likely because they are still working for a paycheck and it actually decreases their commissions.

And for you high-net worth folks still dabbling in paper assets you won’t want to miss this other trick that I will reveal on there too.
For a warm intro to the guys I recommend email me at Lane@SimplePassiveCashflow.com

Wealth Formula Banking w/ Lane Kawaoka Outline

 Downloadable excel example

  1. Purpose statement: Wealth Formula Banking is how cash flow investors enhance the investing they already are or will be doing
  2. Vehicle:
    1. Net 5–6% Return
    2. Tax-Free
    3. Safe / Predictable
    4. Liquid
    5. Loan Provision
    6. Death Benefit / LTC
  3. Strategy:
    1. Same dollar creates value in 2 ways
      1. Simple vs. compound
    2. Replace the bank
      1. Opportunity fund
      2. Safety
  • Liquidity
  1. Higher return
  1. Real life example: WFB vs. Bank

 

Next up is this method of hedging yourself to a 0% loss. So if the stock market goes down 10-20% in one year you lost 0% 😁

Unfortunately, by taking this type of deal (that the rich do) you cap your upside at 12%. So if the market goes up 14% you only get 12%.

Here is where the strategy comes together… We leverage your investment by using 3X leverage. So if the market goes up 7% you get 21%. In that case, where the market goes up 14% you only get 12% you actually get 36%.

I know it sounds crazy. It’s like bowling with the bumper rails in place.

 

Velocity Plus w/ Lane Kawaoka Webinar Outline

  1. Purpose
    1. Leverage
    2. Max income w/ least dollars
    3. Alternative for retirement plans
    4. Great for groups
  2. Concept Structure
    1. Leverage
      1. $100k for 1 property?
      2. No. $100k for 4 properties
  • Do the work of $400k
  1. Years 1-5: Policyholder and bank contribute
  2. Years 6-10: bank only
  3. Ratio: 25% policyholder, 75% bank
  4. No collateral needed beyond policy
  1. Product: Indexed Universal Life
    1. Use an index
      1. Cap
      2. Floor
    2. Capture 80% of upside
    3. No downside
    4. Policy structure: max cash growth/min costs
  2. A Look at the Numbers
    1. 46-yr-old
    2. $1M total going in
      1. $50k from policyholder / $50k from bank
      2. Then bank takes over total
    3. @ year 15—pay off bank loan
    4. Age 65-90—tax-free income of $115k/yr
    5. $250k goes in, total of $3M comes out!
  3. How it Works—Leverage Throughout
    1. Spread—growth vs. loan interest
    2. Leverage the bank for 15 years
    3. Pay off bank loan using policy loan
  4. Leverage Throughout—A Snapshot
    1. Example numbers at year 15 after we pay off bank loan
    2. Figures:
      1. Total Cash Value: $1.8M
      2. Loan Balance: $1.2M
  • Net Cash Value: $600k
  1. Let’s say we get a 10% credit the next year:
    1. $180k (calculated from Total Cash Value)
    2. Loan grows by 5%–$60k
  • Growth in Net Cash Value–$120k
  1. That’s a 20% gain on our net equity
  1. Overall return is 18%!
  2. Estate planning
  1. 2 Primary Risks
    1. High Interest Rates
    2. Poor Performance
    3. “Stress Testing”
      1. 80’s interest rates–$98k/yr income
      2. Great Depression–$78k/yr income
    4. Baseline income was $115k/yr

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