|Posted on 9 August, 2018 at 0:40|
One of the Most Effective, Underused and Risk-Free Money Making Strategies that Everyone Should Use.
Today’s blog is all about one of the best strategies for making money. I will warn you however, that this strategy is perceived negatively by some, mostly due to a misunderstanding of the concept. With that said, if this strategy is structured properly, it is - as the title says - one of the most effective, underused and risk-free money making strategies that everyone should use.
For now, we’ll use a few letters to name this strategy - DPWLI. So what makes this DPWLI strategy so great?
1) Guaranteed Growth that actually gives a decent return.
The most frustrating thing about investing is that we generally have to risk our money in the markets if we want a return that keeps up to, or surpasses inflation rates. If we do not want to risk our money, our best option seems to be GIC’s. GIC’s usually give a return somewhere around 2%. Inflation rates are around 3%. With GIC’s, we are losing money value.
The DPWLI strategy works likes a GIC on steroids. It offers - over the long term - an annualized rate of return around 4.5%. Now that may not seem all that high but let me explain something. Most people see the Average Rate of Return on their investment statement. But I said Annualized Rate, and Annualized Rate of Return and Average Rate of Return are quite different. You can expect to need an Average Rate of Return of about 2% higher to have the same amount of money in your account as what an Annualized Rate of Return will give you. If you have money in the markets (ex. RRSP’s in mutual funds or index funds), you would need an average rate of return of about 6.5% to match the 4.5% Annualized Rate of Return that the DPWLI strategy offers. You may be thinking to yourself that 6.5% isn’t all that great. That may be true but it’s already better than the return most people are getting. There’s more to consider however… point 2.
2) It’s all Tax - Free
When the DPWLI strategy is structured properly, all the money you take out to use - now or in retirement – is received tax free. No Taxes! At all!
When you have your money in an RRSP, your retirement income is fully taxed. Taking into consideration the tax implications of this type of investment, you would now need an average rate of return around 8.5% over the investment’s lifetime to have the same amount of money in your account as the annualized tax-free 4.5% rate of return that the DPWLI strategy gives you.
Tax Free Savings Accounts also offer tax-free income, but you are significantly limited to how much you can invest in a TFSA, and you need to find a place to put your TFSA. Most people leave their TFSA at the bank gaining 2% (again, losing value). If you have your TFSA in the markets, you are dealing with the risk of loss.
3) You can use it during your life time and the value keeps growing.
One of the most amazing things about the DPWLI strategy is that you can use the money that has grown using this strategy without losing the value of the investment.
Albert Einstein said “Compounding interest is the 8th wonder of the world. He who understands it, earns it… he who doesn’t, pays it.”
I think most of us understand this statement to some degree. None of us like taking money out of our investments (our RRSP’s, TFSA’s, etc.) because when we do, we are taking away the opportunity for our money to grow on itself. We are depleting the value and potential of our investment. We do not want to do that. This leaves us with two choices to ensure that we have money to deal with emergencies or issues that come up, or for opportunities that arise.
The first option would be to save money in an emergency or savings fund.
The problem with this strategy is that we now have a pool of money that is not working for us. This “emergency” fund is just sitting in an account making 1%, waiting for something to happen.
The second option is to borrow money from the bank.
There are a few problems with this strategy. First, we need to qualify to borrow from the bank. Second, the bank controls the whole arrangement. You’ll have set payments and interest to pay. And finally, plenty of issues arise if something unfortunate happens and you cannot continue your monthly payments, even if only for a short period of time. Your credit score will drop, and you will start paying interest on interest on interest.
With the DPWLI strategy, you are in control. You can use the money that you have gained and the value of your fund does not decrease. It actually continues to grow in value, even if you have used it. The principal of your investment continues to grow interest on interest on interest, increasing the value of your policy and you can use that money for emergencies or opportunities. This strategy relieves you from the need to have an emergency/savings fund, and helps you avoid the bank for loans.
4) The moment you put any money into the DPWLI strategy someone you care about is guaranteed to receive a large sum of money - tax-free.
This strategy has an inheritance - a guaranteed death benefit - attached to it.
The DPWLI strategy allows you to grow money at a decent rate in a guaranteed and safe manner. It allows you to receive all the money gained through its lifetime tax-free in retirement and to use that money in your lifetime – for emergencies and opportunities - without losing any value. And it allows you to give people you care about an inheritance.
DPWLI stands for Dividend Paying Whole Life Insurance. Most people view Life Insurance as an expense, but it doesn’t have to be. When your life insurance policy is structured properly, it is an asset. It is an investment, a TFSA account, an emergency and opportunity fund, a retirement account, a legacy for your family. It’s like a GIC on steroids wrapped in Life Insurance. And it’s all guaranteed whether you live till 40, 70, or 105.
To top it all off, the value of your life insurance policy - the death benefit - increases in value every year too.
Now, you may be thinking “what if I wouldn’t qualify for life insurance?”
You do not personally need to be healthy/insurable to use this strategy.
Or maybe you’re thinking “I’m too old for this, it’ll be too expensive.”
Not true. You can still do this with a very small investment amount.
This truly is one of the most effective, safe, predictable, underused, and all-encompassing money making and family wealthy building strategies available.
Interested? Let’s talk.
There is no charge to meet with us, so it’s probably worth it!