Debt Management

When Can I Borrow from My Policy?

Have you heard about life insurance policy loans and wondering what they are and how they work? A policy loan is a collateralized loan against the equity or cash surrender value in your life insurance policy. And this is a key distinction, because several times I’ve spoken to people who were misinformed, on exactly what a policy loan is.

They were told that a loan against your policy is a loan against the death benefit, that is technically not correct.

 

Although policy loans will decrease your death benefit dollar for dollar if you’re to die with a policy loan balance, it’s technically collateralized against the policy cash value. And this is a big difference because you don’t have access to that full death benefit while you’re alive, but you do have access to the amount of cash value that has collateralized and built up in your policy throughout your policy years.

Now, it doesn’t matter which insurance company you’re working with as long as you have a cash value building life insurance policy like a whole life universal or variable universal life policy, you have access to the policy loans via the policy loan provision included in those contracts.

So the next issue with policy loans is when or how soon can you take a loan or borrow against the equity of your policy? And the answer is it depends. It depends on the company. Some companies allow for loans after ten days or within the first 30 days. Other companies discourage policy loans in the first year.

It’s important to address these questions before placing your policy in force, because the last thing you want to do is plan on using that policy value during the first year and not have access to it to accomplish your short term goals.

The next question is how much cash are you able to get your hands on and that again, depends on the policy. If you have a policy designed for cash accumulation, typically it has some type of rider and the rider allows you to build up that cash value quicker so you have access to it sooner.

You can expect about 85 to 95% of the contribution that’s going towards the rider to be accessible immediately. However, if you have a regular or whole life insurance policy or other permanent life insurance policy, there’s likely some cash value in it, especially if you’ve had it for several years. And typically you could get your hands on about 90% of that cash value via the policy loan.

So you’ve decided that you’re ready to take a policy loan. How do you go about accessing that money? Well, it’s real simple. You’re giving an order to the insurance company with either a form, a phone call or going online and requesting that policy loan. They’ll either send you a check or put the money right into your bank account.

But then the next question becomes, how do you pay that loan back? And do you have to? You see, life insurance policy loans are unstructured loans, which means there’s no coupon booklet or payment schedule that goes along with the loan. It’s completely up to you as to when or whether you pay the loan back.

And the reason is the entity, the insurance company that is making the loan is also the entity that is guaranteeing the collateral, the equity in your policy. The insurance company is literally verifying to themselves whether or not you have equity in your policy. As the equity appears or when you have equity, the insurance company can release that money to you through the loan provision. Since it is a loan, a separate loan from the insurance company against your cash value, the policy loan will accrue interest.

And what that means is basically on your policy anniversary, the insurance company will send you a bill for interest if you have a loan outstanding. It’s typically anywhere between 4 and 6%, maybe a little more, maybe a little less, and it can fluctuate.

But every year you’ll get that policy loan interest bill and you have the option to pay it. And as long as there’s enough cash value within the policy, you don’t have to pay it and it will accrue onto your loan balance. But we do recommend that you at least repay the loan interest so your loan balance doesn’t continue to grow year after year.

And this is important, you understand, because the loans are unstructured, the decision to pay back the interest or to pay back the principal is completely yours. The interest is charged, but the decision to pay it is yours. And that’s why we utilize policy loans to help our clients regain control of their money.

Now, you may be wondering why would you want to pay that policy loan back? And the answer again is control. As soon as you pay that policy loan back, you’re releasing equity within that policy. So you’re able to access that money again in the future.

This is very different than when you’re repaying your loan to, let’s say, a credit card or other loan, because once you give that payment to that other entity, you no longer have any access or control or you’re giving up opportunity costs on each one of those dollars.

You see with policy loans if you take a policy loan, this becomes your loan balance. Your equity is reduced dollar for dollar by the loan balance. Every payment you make on the loan reduces the outstanding loan balance and increases your equity. And that’s the key. Now you control that money because you’re the owner of the policy. You could ask for another loan, and another loan, and another loan, as long as there’s equity you can borrow.

Now, at this point, you may be wondering, what do people use policy loans for? And there’s a variety of reasons. We have people who are buying real estate, investing in their business, doing other investments in the marketplace, earn an external rate of return as well as their internal rate of return within the policy.

We have other people who are trying to get out of debt and they’re building their savings in the policy and also getting out of debt simultaneously. And what this allows to happen is they’re able to get out of debt often faster and still build their savings within the policy so they don’t have to put themselves in that situation going forward.

Another reason why people would borrow against their life insurance cash value is to create a volatility buffer against their retirement portfolio. We’ve done a previous video that explains how a volatility buffer works, but real simply, instead of taking money out of your retirement portfolio in the year that the market is down, you would forgo taking money out of that account, borrow money against your life insurance to supplement your income and give your portfolio an opportunity to regenerate or regrow itself.

Another great use of policy loans could be sending your children to college and funding the tuition through the policy loans. Did you know that accessing money from your life insurance policy and building that equity within your policy is completely off the FAFSA calculation in most cases?

Another reason why people would take a policy loan would be to buy a car or to remodel their home. And finally, for a medical or financial emergency, you see the key in life is having access to capital. And one of the things about life insurance, cash values is that money is liquid and you can use it and you control it. We call it liquidity use and control or “the luck factor.”

If you’re ready to get started with a whole life insurance policy designed for cash accumulation or could use some more guidance on using your existing life insurance policy, be sure to visit our website at Tier1Capital.com.

Feel free to schedule your free strategy session or if you’d like to learn more about how our process works, check out our free webinar, Four Steps to Financial Freedom.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

 

Growing Your Circle of Wealth

Are you looking to start down the path of financial freedom and wondering where you’re going to find the money to start saving?

This circle represents all the money that will pass through your hands throughout your life. Your circle is larger than some and others are larger than yours. But we all have one thing in common, and that is we want our circles to grow.

 

Every dollar in your circle of wealth is broken up into three categories.

First is accumulated money. That’s the money you have saved and invested. Second is lifestyle money. That’s the home you live in, the car you drive, the schools or the colleges that your children go to. They’re all lifestyle expenses. And finally, there’s transferred money. Transferred money is money you’re giving up control of unknowingly and unnecessarily. Two key words unknowingly means you don’t realize it and unnecessarily means that working together, we can fix it for you.

You see, our focus is on making your money more efficient. How do we regain control of that transferred money and put it to work for you, your business, and your family.

Have you experienced this?

You sit down with a financial advisor and the first thing they say is, show me what you got. So you give them all your statements and a listing of all your accounts and assets. And the next thing they say is, well, you’re earning X. We can show you how to earn X plus something else, but you’ll probably have to take a little more risk to do it. Now you have to make a decision. Do you want to take more risk in order to build your wealth?

Let me ask you this question. Have you ever taken risk and not gotten the reward in the past?

The second scenario you may have experienced with a traditional financial advisor is looking at your lifestyle, cash flow and seeing where you could cut back so you’re able to save more. But let’s face it, if you could be saving more, you probably would be. How many subscriptions can you cut out a month to save more, and will that really help you reach your financial goals?

So if you’ve ever had an experience with a traditional financial advisor, the two bullets they have is move your accumulated money to them because they’re going to manage it better or reduce your lifestyle in order to save more for the future.

But nobody’s talking about this third piece of your circle, and that’s transferred money. And this is where we can help you. This is where we have been uniquely trained to identify exactly where you’re giving up control of your money unknowingly and unnecessarily.

What if there was a way to achieve your financial goals no matter what they are, without reducing your lifestyle or without taking on additional risk? Wouldn’t you want to know about that?

Our unique ability is to point out exactly where you’re giving up control of your money. The question is, will you stop doing it? Because understand, it’s things that you’re doing that you think are moving you forward but in fact, are actually holding you back.

No one wakes up in the morning and says, “Hey, how can I mess up my finances today?” No, we all think we’re making the best decisions that are moving us forward to reach our financial goals. But we’re here to say that there are some areas where you may be giving up control of your money, and there are five areas of wealth transfer that we help identify.

The five areas of wealth transfer are taxes, how you pay for your mortgage, how you pay for your retirement, how you’re sending your children to school, whether it’s college, high school or grade school, and how you’re funding major capital purchases like cars, weddings, or anything else that you can’t pay out of monthly cash flow.

Our process is really simple. It’s four simple steps.

Number one, we identify where you’re giving up control of your money.

Number two, and this is the hardest step. You have to agree to stop doing it. Now, think of this. What would happen to your circle of wealth if you were giving up control of your money and you stopped doing it? Wouldn’t that have a positive effect and grow your circle of wealth?

Step three is to save the money in a specially designed life insurance policy so that you have access, liquidity, use and control of that money whenever you want, for whatever you want. No questions asked.

And step four is where the magic happens. This is where you borrow from yourself and pay interest back to yourself for things like major capital purchases, sending your children to college, buying vehicles, going on vacation, whatever a major capital purchase would be for you.

If you’re saving and growing your circle of wealth, using your savings to fund your lifestyle, your money never leaves your control. And what effect do you think that would have on your circle of wealth? By using our system, you can regain control of your money to grow your circle of wealth. And if you understand how this works, your money never leaves your control.

When thinking about growing your circle of wealth. We always say it’s not what you buy, it’s how you pay for it that really matters.

If you’d like to get started with a specially designed, whole life insurance policy designed for cash accumulation and see if this makes sense for your situation, be sure to visit our website at Tier1Capital.com to schedule your free strategy session today.

We also have a Four Steps to Financial Freedom webinar on our website where you could learn exactly how we put this process to work for our clients.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

Can Life Insurance Help Pay for My Home Renovations?

Are you thinking about renovating your home and wondering what the best way to finance that purchase would be? Whether it’s paying cash or taking out a home equity line of credit?

It’s a foregone conclusion, you are going to do some renovations or remodeling around the house. Whether it’s adding on a deck, redoing the kitchen or a bathroom, getting new windows and siding. Either way, remodeling your house is a major capital purchase, and you’ll always hear us say, it’s not what you buy, it’s how you pay for it that really matters.

So the question remains, what is the best way to make this major capital purchase so that you will come out ahead on the other end? Our unique ability is to see things through the lens of being in control of your cash flow or not being in control of your cash flow.

So with every financial decision we look at the question, is this putting you in more control of your money or giving control to someone else and leaving you in a weaker financial position Let’s take a look at how you could be in control of your money and still buy the things you want, like renovating your house.

First, let’s assume you have enough cash or enough savings to pay cash for the renovations that you’re planning on making. So in this scenario, what happens is you have all the cash sitting here that you own and control, and then as soon as you make the purchase, the control is gone, your bucket is empty, and now all that cash is given away to an outside entity.

But what does that really mean for you financially? Well, you’ve drained the tank. You’ll never see the interest you’re not earning on your pile of cash because you drained the tank and it could no longer earn any compound interest for you. We call that opportunity lost.

The second way you could pay for your renovations is to do traditional financing, whether it’s an installment loan, whether it’s a home equity loan, whether it’s a total refi or a cash out refi to pay for the renovations. Either way, you’re asking permission to get the loan and now you have an additional payment to make out of cash flow.

So what this looks like is you had these payments going towards your savings or investments and now you have to redirect that cash flow to pay this installment loan, home equity, loan, mortgage, whatever you chose. So based on what we just said, whether you finance or pay cash, you’re either going to pay interest if you finance or give up your interest if you pay cash.

So the question remains, what’s the best way to pay for your renovation and how can you be in control and continue to earn interest even while you’re using that money for your renovation?

The answer may be a specially designed, whole life insurance policy designed for cash accumulation so that you could build up a pool of cash that you have full liquidity use and control over so you could access the cash through a collateralized policy loan, a contractual guarantee, and still continue to earn continuous compound interest.

Now you’ll have a loan against the policy and you could make payments back to the policy loan and rebuild access to that cash value. So you could use it again in the future instead of giving away control to an outside entity.

So again, looking at things through the lens of you being in control of your money and showing you how to regain control of your money, it’s very simple. You build up a pile of money that you are in control in your life insurance policy. You pledge that, as collateral through a collateralized loan, all they do is put a lean against your policy and they give you a separate loan. Now, when you make a payment, every payment you make increases the equity that you have. You stay in control of the cash. It’s always earning compound interest and you’re in control of the loan payments that you’re making because every loan payment reduces the outstanding policy loan, increases your equity and is completely accessible to you through the contractual loan provision.

Let’s look at this for a second. What’s the difference between building equity in a life insurance policy in the cash value versus, let’s say, building equity in your home? And there’s a very distinct difference, and that is you have guaranteed access to your cash value. There is no ifs, ands or buts or qualifications of any kind to access that money. It’s simply giving an order to the insurance company. “Hey, I want a policy loan against this cash value,” and then they send you the money versus going to the bank and saying, “Hey, I’d like a home equity line.” And they say, “Okay, show me everything you got and prove that you could repay this loan.” It doesn’t work like that with a policy loan, and that is a very distinct difference.

So it basically comes down to this: with a policy loan, you’re giving an order. With a home equity loan, you’re asking permission. Which position gives you more control when you’re giving an order or when you’re asking permission? So when you take a policy loan against your cash value, it basically is giving you the best of both worlds. The aspect of paying cash and financing.

 

So what do we mean by the best of both worlds? Well, it’s really simple. If you were to pay cash, you would have first had to have saved money. But when you pay cash, you drain down the tank. You don’t want to do that because you’re giving up control to the contractor.

Borrowing against your cash value, you don’t drain down your cash. You still access it through the loan provision, but now you have a payment. But now that payment is yours. Every payment you’re making goes back to reduce the policy loan and increases your equity. So you’re controlling your cash because it’s continuing to earn compound interest and you’re controlling the monthly payment to pay back the loan against your policy. The best of both worlds.

If you’d like to see whether or not a specially designed whole life insurance policy designed for cash accumulation makes sense in your situation. Be sure to visit our website at Tier1Capital.com and schedule your free strategy session today.

On our website, we also have a free web course, The Four Steps to Financial Freedom, where we do a deep dive on exactly how we use this process to achieve our clients financial goals.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

How Do I Become a Wealth Creator?

Have you recently received an inheritance or anticipate receiving one soon? For the past 37 years working in financial services, I’ve seen many people receive inheritances and they generally fall into one of two categories. First, they’re either a spender, or second, a saver.

The first type of person who would receive an inheritance is a spender, and the spenders finances typically look something like this. They start at the zero line, and when it comes time to make any major capital purchase, they’re forced to borrow because they have no savings, they’re at zero.

And so they dig themself a hole in debt and all of their extra cash flow, instead of going towards savings, goes towards repaying that debt and filling in that hole. So when they receive their inheritance, it makes sense that they first, pay off their debt and then would drain down that tank, draining down the rest of that inheritance to make other major capital purchases.

The second type of person who would receive an inheritance is a saver and savers start at the zero line and they save and save and save. But when it comes time to make a major capital purchase, they drain down the tank or reduce their savings back to zero. And then they start saving again for, let’s say, the next automobile or the next major capital purchase.

So if you’re a saver and you receive an inheritance, it would make sense that you would use your inheritance to make major capital purchases and pay cash for everything.

Now, it may seem to you that the saver and the spender are two very different people, but they have something in common, and that whether you’re a debtor or a saver, you spend a lot of time at the zero line and you never get to experience the magic that comes with continuously compounding interest on your money. The other thing that neither the spender nor the saver receive or experience, is being in control of their money. Which brings us to the third type of person who can receive an inheritance. And that’s the wealth creator.

The wealth creator is a very unique individual. They save, as a matter of course, just like the saver. The only difference is, unlike the saver who drains down the tank to make purchases, they continue to earn uninterrupted, compounded interest by borrowing against their savings. And when they borrow against their savings, they’re making their money more efficient.

 

Now, if you’ve recently received an inheritance or anticipate receiving one soon, you may want to look into becoming a wealth creator. Keep this in mind, the saver, spender, and the wealth creator are all making the same exact purchases. And we say this all the time. It’s not what you buy. It’s how you pay for it that really matters. The wealth creator is still able to make that purchase without draining the tank and without giving up control of their money, all the while making their money as efficient as possible. They’re never jumping off that compound interest curve. That is a huge deal.

If you’re using a specially designed whole life insurance policy with a mutually owned life insurance company, you’re automatically building in a legacy for the next generation and being a great steward of your money.

If you want to make your inheritance work for you, your business, and your family and last for generations. Visit our website at Tier1Capital.com to get started.

Feel free to schedule your free strategy session today or check out our free web course, the Four Steps to Financial Freedom to see exactly how we put this process to work for our clients.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

How Can I Utilize My Policy Loan Provision

Do you have a cash value life insurance policy, but you’ve never accessed the cash value? Well, that’s kind of like having a Ferrari in your garage and never driving it.

Did you know that every single cash value life insurance policy has something called a policy loan provision, that allows you to have full liquidity use and control and access to that cash via a policy loan?

So the questions remain, why would you want to use a policy loan? Why would you pay somebody to access your own money?

Well, it’s real simple. It isn’t your own money that you’re getting. You see, your money will continue to stay in the policy and grow on an uninterrupted compounding interest basis. The insurance company will use the equity in your policy and put a lean against it. They’re going to give you a separate loan outside of your policy so your policy continues to grow. But now you have this extra loan and now you can use it for whatever you want, whether it’s to pay off a bill to buy an asset or just to go on a vacation.

So the next question is, who is showing you how to use this asset? Who’s showing you how to utilize this tool in your financial game plan?

For the past 37 years I can’t tell you how many times people have come to my office and they show me their assets and they have these life insurance policies and they say, “You know, my brother in law sold me this policy. He’s probably ripping me off, but it’s my wife’s brother. So I did him a favor.” At the end of the day, what they don’t realize is that the best asset they have ever owned is that life insurance policy.

It takes a little education and becoming familiar with the ability or what you can do with that policy. But once we show them how to utilize that policy, they never go back and they always want more life insurance rather than getting rid of what they thought was a bad asset.

So think about the assets that you own, whether it’s a bank account, an investment account, real estate or even insurance policy, they were all purchased through a financial institution. But you see financial institutions have rules, and those rules center around getting our money and keeping our money for as long as possible. But what if you are able to maintain full liquidity use and control of your money so that you’re able to achieve your financial goals and still maintain that continuous compounding of interest that we all want so badly so our money could be working for us instead of against us.

Well, that’s exactly what you get with a cash value, life insurance policy. Full liquidity use and control and access to achieve your financial goals. You see, when you’re accessing the cash value in your life insurance, you’re following a simple law of nature. You see, in nature, everything has to flow. And when you are accessing your money, your money is flowing. But when you leave your money somewhere, it is stagnating. And guess what? Wherever you left that money, that institution is earning interest on that money.

The key is to utilize your cash value, to utilize that policy loan provision, that contractual guarantee that allows you full liquidity use and control of your cash value so that possibly maybe you could take that cash and invest it somewhere, so you have the internal rate of return within your contract, as well as an external rate of return on an investment.

 

Another option to utilize your policy cash value is to take a policy loan to repay debts. Whether that’s a high interest credit card or possibly some student loans. Once you take the policy loan, you now have free cash flow from the payments that were going to your credit cards or student loans that you could redirect back to your policy loan payment. And what that’s going to do is rebuild and reestablish that equity in your policy so that you can access it again in the future. All the time never interrupting the compound interest curve within your life insurance policy.

Let us know how you use your cash value within your policy or if you’ve never accessed it before, and have this Ferrari sitting in your garage. How we can help you the most is to show you how to unlock this stagnant money, how to utilize this asset, how to drive this Ferrari as fast and as far as you want.

If you’d like to get started with our process, be sure to visit our website at Tier1Capital.com to get started today. We show people how to use cash value life insurance policies, whole life insurance policies designed for cash accumulation to achieve their short term, long term and other financial goals.

Feel free to schedule your free strategy session today or check out exactly how we put this process to work for our clients in our free webinar. The Four Steps to Financial Freedom.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

Pay Yourself First

Nowadays there is so much competition to get in our checkbooks every single month. Between subscriptions, utilities, credit card bills, student loans, rent or a mortgage the competition is fierce. Not to mention the increasing rate of inflation that could be detrimental to our cash flow each and every single month.

Today, let’s look at why it’s more important than ever to pay yourself first.

The Golden Rule in personal finance is to pay yourself first, but the question becomes, how do you do that? There’s never been more competition. It’s never been easier to give away control of your cash flow.

With as many subscription options as we have today, whether it’s a large corporation, a small company, a financial institution like an investment firm, a bank or an insurance company, or the government, they all are experts at getting into our checking account and getting into making sure that we’re paying them first rather than paying ourselves first.

So the question remains, how do we pay ourself first? The answer is simple. It’s to get $1 to do multiple jobs. If you were able to get $1 that you were using to repay a credit card with, to do multiple duties so that it’s also able to continuously compound interest and be working for you at the same exact time, that’s the secret.

Think of this question. What’s the rate of return? I’m getting $1 to do several jobs. The answer is that it’s almost infinite, and that’s the key. Making sure your money is much more efficient than just doing one job. That takes us back to the original question.

How do you pay yourself first? Well, first and foremost, you have to prioritize savings. And it’s really simple, but it’s also very hard. So think of this. I’ll never forget when my son got his first real job after college and after he got his paycheck. He was figuring he was going to make about $2,000. When he got his first check, it was closer to $1100. I’ll never forget what he said to me. He said, “Dad, who in the world is FICA?” And I said to him, “Welcome to the real world, son.”

So again, how do we pay ourselves first when we’re only going to end up with 50 or 55% of what we think we’re going to get in the first place? Well, it’s real simple. You’ve got to make sure that you’re understanding how much you get and also prioritize, and say, “Okay, whatever I get, 10% is going into my savings, could be 5%, could be 3%”, whatever you choose. You just need to start somewhere.

So when it comes to compounding interest, there are two factors and only two. Time and money. We can never get the time we lose back. So it’s important to start saving now, and make a habit out of saving. Save month after month, week after week, and never drain that tank so that you can experience the eighth wonder of the world: compound interest.

When we talk about not draining down the tank, what does that mean? Well, typically what happens is people save with great intentions, and then all of a sudden a disaster hits them. They have a financial or a medical emergency, so they wipe out their savings. Another example is that they’re saving money, and they need a down payment to buy a house. So what do they do? They drain down their savings and use it to pay for that emergency or they use it for that down payment on the house. Well, what happened is you drained down the tank and you stopped compounding interest on that money.

So again, the key is getting $1 to do two things. Have it in a place where you can utilize it to do whatever you need, whether it’s a financial or a medical emergency, a down payment on a house, paying cash for a car, things like that. But also, still make that money continue to grow and earn uninterrupted compounding of interest. Because if you drain that tank and deplete all of your savings, you lose all the opportunity that that money could have earned you. You’ll never see the interest that you don’t earn on that savings. But more importantly than the opportunity, you just lost all the time it took you to build that money up. Now you’ll never get that time back either.

So when you look at a compound interest curve, and in the beginning years you don’t see much growth, keep this in mind. Compound interest is when you are earning interest on the interest. That interest continues to compound and grow every single year. If you continually drain down that tank, knock yourself back down to zero, and start all over again, you’ll never experience the real growth on your money, which takes place in the later years.

It’s so important to never get off that compound interest curve, because by the time you realize the detrimental effects this is going to have on your finances and your ability to achieve your financial goals, it’s going to be too late.

This is where we always say the future you needs to have a sit down discussion with the present you about how you’re using your money, because the present you could really be shortchanging the future you out of a comfortable retirement.

So here’s the key. Pay yourself first and never stop. Pay yourself as a matter of course and never drain that tank. One of the ways we help our clients achieve this goal of paying themselves first is with a specially designed whole life insurance policy designed for cash accumulation. So, they’re able to meet their short term goals of paying off their credit card debt or paying off their student loans, as well as their long term goals, such as paying for a wedding, sending their kids to college, or saving for their retirement.

If you’d like to get started with this specially designed whole life insurance policy for cash accumulation, to help meet your short term and long term financial goals, so that you can save and pay yourself first and never drain that tank. Be sure to visit our website at Tier1Capital.com.

Feel free to schedule your free strategy session today or check out exactly how we put this process to work for our clients in our free webinar. The Four Steps to Financial Freedom.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

Ready to Expand Your Financial Knowledge Circle?

You hear us talk about wealth transfers and how you’re giving up control of your money all the time. But what does that actually mean? Where do we find this money and how? Where is there money hiding in plain sight in your financial life?

Let’s face it, we’re all trying to make the best financial decisions possible. When we wake up in the morning, we don’t say, “Hey, how could I screw up my finances today? “No, we say, “How can I move myself forward financially? How do I get from point A over here to point B, Financial security?”

Everything we do, we think, is moving us forward. But here’s the question. If what you thought to be true turned out not to be true, when would you want to know? Wouldn’t the answer be as soon as possible, so you could start on the correct path to financial freedom? A path where you have complete liquidity use and control of your money so that you don’t have to ask permission to access your money to make purchases in your life.

Let’s face it, every purchase we make is financed, whether we go to a bank for a loan or we pay cash. But what if there’s a better way, a way that leaves you in control of more of your money for a longer period of time?

All the decisions we make are based on the knowledge and the information that we have at that time. We call this the circle of knowledge. This circle represents all of the information that exists in the universe today. It’s everything that’s known by everyone in the universe. Your slice may just be a small slice of everything.

Then, there’s another slice of that circle of knowledge, and it represents everything that we know exists, but we just don’t know anything about it. It’s things like brain surgery or nuclear physics.

What we often forget is that there’s a whole universe of knowledge out there and not one person could know everything in the entire universe. It’s simply impossible. What we’re able to do is leverage the knowledge of other people, that’s the easiest way to expand your slice of knowledge.

So here’s the problem. All of the rest of the information, the rest of that circle is information that we don’t even know exists. It’s stuff that we don’t even know that we don’t know. And this is the information that can be holding us back from making huge strides personally and financially.

So how does this relate to the money we’re giving up control of unknowingly and unnecessarily? Think of it like this. The information that we don’t know exists is stuff that is literally sitting in our blind spot. Now, when you’re driving down the road and you look in the rearview mirror and you see nothing, and then you look in the side view mirror and you see nothing. And then you peek your head around and you see a 4,000-pound truck traveling down in the lane that you wanted to turn into.

That’s your blind spot. And this could be your blind spot financially as well. The information that we don’t know exists is stuff that is literally sitting in our blind spot. That car didn’t just appear out of nowhere. It was there the whole time, we just didn’t see it until we changed our perspective.

So if the decisions we’re making are based on the information that we have, the information we know and believe to be true, the best way to make better decisions could be as simple as expanding your circle of knowledge, making your slice a little bit bigger, and creating new beliefs that could actually move you forward financially instead of what the conventional wisdom is telling us to do.

It’s very simple. There are only three ways we can expand our knowledge. The first is the experiences we receive by the places we go. The second is the knowledge we gain by reading books. And the third is the transfer of knowledge from one person to the next.

That’s where we come in. We could help you because the key here is the things that might be in your blind spot are literally in the slice of the circle that we know, and we know that we know it. If you meet with us and we share our piece of the circle of what we know, it could help expand your circle of knowledge so you can make the best financial decisions for you.

There are five major areas of wealth transfer that we could help identify where you’re giving up control of your money unknowingly and unnecessarily, with 100% certainty. Those five areas are…

  1. Taxes
  2. Retirement
  3. Real Estate
  4. Capital Purchases
  5. Education

After we identify these areas where you’re giving up control of your money. It’s really simple. This is money that’s literally hiding in plain sight. It’s in your cash flow. You think it’s moving you forward, but it’s actually holding you back. Once we go through this process, you’re able to utilize that money to move you forward.

If you’d like to get started with a custom plan on how to move yourself financially forward, visit our website at Tier1Capital.com to get started today.

You could schedule a free strategy session if you’re ready to speak with us or we have a free webinar where we do a deep dive on our Four Steps to Financial Freedom.

Feel free to click that button and register for our webinar today.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

Are you Unknowingly Giving Up Control of your Finances?

Do you make a great income but still feel stuck financially?

Well, you’re not alone.

Most of our clients don’t understand how to make their money as efficient as possible. That’s where we come in. We find money that’s hiding in plain sight, that people are giving up control of unknowingly and unnecessarily.

If you’ve ever met with a financial advisor, traditional financial advisors are really good at pointing out problems.

“You don’t have enough money saved for your kids to go to college. Therefore, you need to save more for college.”

“You don’t have enough money to fund your retirement income. Therefore, you need to save more money for retirement.”

But the thing is, you’re probably doing the best you can with what you have, and if you could save more, let’s face it, you would be saving more. The question is, how to do it?

This is exactly what makes us unique. We’re trained to identify where you’re giving up control of your money unknowingly and unnecessarily. And these are two keywords. Unknowingly, meaning you don’t realize you’re doing it. And unnecessarily, meaning a simple shift, sometimes just in perspective, can change what you’re doing that’s actually holding you back. It’s our mission to help as many people as possible make the best decisions possible financially, and oftentimes that means making their money work more efficiently.

 

What does it mean to make your money work more efficiently?

Well, it means putting your money to work for you, not the government, not the banks, and not Wall Street. Maintaining control of as much cash flow as possible is what will move you ahead financially. It’s not enough to point out a problem. It’s not even enough to offer a solution. What makes us unique is that we actually help you find the money within your current cash flow to pay for the solution. Basically, we would have minimal or no impact on your current cash flow to solve a problem and provide a solution.

There are five major areas of wealth transfer where we look for these inefficiencies in your personal economic model.

    1. Taxes
    2. Retirement
    3. Mortgage
    4. Education
    5. Major Capital Purchases

Identifying these five areas is literally how we find money that’s hiding in plain sight. Ultimately what happens is we can provide you with a solution to your problem with minimal or no impact on your current cash flow.

Let’s face it, none of us wake up in the morning and say, “Hey, how can I hold myself back financially today?” No, we think we’re making the best decisions that would be moving us forward. But what if what you thought to be true turned out not to be true? When would you want to know about it?

If you’d like to get started with our solution to find the money within your current cash flow so you’re able to achieve your financial goals sooner, visit our website at Tier1Capital.com to schedule your free strategy session today. Or if you’d like to learn exactly how we use this process to identify inefficiencies in the cash flow model, check out our free webinar where we go into the four steps to financial freedom.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

How multi-duty dollars can fund the growth of your business


Are you a small business owner and looking to grow your business, but wondering how you’re going to retire one day?

If that sounds like you, stick around because today we’re going to talk about how you could continue to fund the growth of your business and still save for the future.

As small business owners, everyone knows that the number one issue is often cash flow. There are constant demands on our cash flow and the question of how do we manage everything?

Think of it this way. There are several types of cash flow to pay attention to.

Cash flow needed to operate your business.

Cash flow needed to reinvest in your business.

Cash flow needed to grow your business.

Cash flow needed to support your family.

With all of these demands on your cash flow. Every single day, it becomes incumbent upon you, the business owner, to make your money and your cash flow as efficient as possible so you can manage all of these demands.

The first step in making any change, is to acknowledge that there may be a better way out there and to be open to hearing about it.

 

Whenever we sit down with a business owner and it comes to the recommendation of doing a cash flow analysis.

They all say unequivocally, “Well, I’m using my cash flow properly,” or their CFO will say, “Well, we’ve already done this. We’re using our cash flow efficiently.” Or their accounting firm will say, “Well, you know, we’ve done the analysis. They’re using their cash flow efficiently.”

I’m here to tell you, you’re probably not using it as efficiently as you possibly can.

What does it mean to make your cash flow efficient?

Well, first of all, we like to get $1 to do the job of many dollars. And we like to make sure that the cash flow is working as hard as possible for you, not for the banks, not for other institutions, but for you, your business, and your family. So getting $1 to do the job of many dollars, we call that multi-duty dollars.

How do we get $1 to do multiple jobs?

The first step is to identify dollars that can be working harder for you. We usually find that in how you’re making major capital purchases and how you’re financing your debt. It’s not what you buy, it’s how you pay for it that really matters. That’s where efficiency can come in.

Recently we worked with a retail operation and they said they were using their money efficiently. The problem was they needed over $300,000 to fund their buy-sell agreement. The question was, where in the world were they going to find $300,000 to do that?

Well, we looked at how they were making major purchases and we looked at how they were handling their debt. Lo and behold, we found over $400,000. They were completely blown away. But again, it’s not what you buy, it’s how you pay for it that matters. So basically, we took the dollars that they were utilizing to pay off their debt and we converted it to create an asset that they can use to fund their buy-sell agreement.

So think about it.

We got $1 that was used for debt and we made it $2 by not only paying off their debt but also creating the asset that they needed to fund their buy-sell agreement. Multi-duty dollars. The same principle of converting liabilities into assets can be utilized for funding your own retirement or major capital purchases for your family, like sending your kids to college, or financing major purchases for your business, like equipment or vehicles for your business. 

Also, you could use it to expand your business so you don’t have to choose.

“Hey, I need to get out of debt as soon as possible. Let me put all my extra cash flow towards this goal.” You can achieve that goal, but also save along the way to achieve your own financial goals and put you in a more secure financial position.

So here’s the point. Over 35 years ago, I began working with a young couple who happen to be business owners, and I said, you know, let’s set up some life insurance that you can utilize along the way. Basically, this will be your exit strategy. You can borrow against the money for whatever you want between now and the time you retire. But then, when you retire, you can live off the growth of that policy. And sure enough, that’s what they did over the years. They borrowed against their policy to grow their business, expand their building, buy equipment and buy cars. They used it to educate their children, but they always borrowed and put it back.

Now, they recently sold their business. They came into a huge windfall and they’re getting all this advice to tie up their money to prevent themselves from having to pay taxes. But, because of all the work that we did, their legacy is intact and consequently, they can use the proceeds from the sale of their business to fund their retirement instead of their life insurance, and all of that money is now going to be utilized for legacy purposes for their children and grandchildren.

The point is we got $1 to do multiple jobs over a 35-year period, and it gave them the flexibility to do the things that they want to do for their children and grandchildren.

If you’re tired of giving away control of your cash flow, and you’re looking for a cash flow analysis. Feel free to hop on our website at Tier1Capital.com to schedule your free strategy session today.

Also, if you’d like to learn more about how our process works for families and business owners, check out our free web course, the Four Steps to Financial Freedom. It’s right on our website.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.

 

5 Best Tips For Financial Success

So your cash flow is tight, but you still want to set yourself up for financial success in the future. If that sounds like you stick around to the end of this blog because today we’re going to go over five things you could do right now to set yourself up for success.

Let’s get started with the five things you could do today to move you ahead financially down the line, whether you’re just getting started or maybe your income isn’t as high as you’d like it to be, these things can make a huge impact on your financial future regardless. 

The first thing you can do is to start saving today, no matter how small the amount. There’s an old proverb that says “The journey of a thousand miles starts with one step,” and that’s the key. Pay yourself first, no matter how small that amount is. That’s right. Start saving and start saving on a consistent basis. These days we have so many subscriptions and auto-pays and everything else in our checkbook every single month and it seems like there’s always more. Pay yourself first. No matter how small the amount. 

This brings us to number two: never drain the tank. Keep this in mind. You’ll never see the interest you don’t earn. Once you put that money aside for savings for your future self, don’t drain the tank. Don’t use it to go on vacation. And don’t use it to go buy your car. Now, we’re not saying don’t use that money. What we’re saying is to use your money in a way that you’re able to always continuously earn compound interest on the money. So it’s always working for you, but you’re using other people’s money to make your money more efficiently. It’s the key fact. Leverage will move your head. Never drain your tank. 

The third thing you can do to move forward and set up your future self is to live within your means. For many of us, that might mean that we need to set a budget and stay within that budget. 

Number four: keep your savings liquid, and free from taxes, losses, and government regulations. Conventional wisdom teaches us to save our money in places where it’s inaccessible, places like qualified retirement accounts like IRAs, simples, SEPs 401k’s or 403b’s. Where we have to pay a penalty if we access before age 59 and a half and at all times we have to pay taxes, and it’s taxable as income when we access that money or non-qualified accounts where the growth is taxed every single year on that account. And we all know you can’t accumulate wealth in a taxable environment. 

Rule number five is probably the most important. Not all debt is bad, especially when you own your debt. You see, when you own your debt, you’re in control of the terms and conditions of that debt, meaning that you can set up the interest rate. You can set up the payment plan. You can set up how the money is going to be used. The bottom line is you’re in control. But think of it this way. Before you pay that loan, you control the value of that payment. 

Let’s say it’s $450. So, this month, you control $450. The next day, when you make a payment to a credit card or on a car loan, you no longer control that loan. The lender controls that $450. Now, here’s the key. When you control your debt and you own your debt, you get to control the payment before you make the payment and you get to control that same amount of money after you make the payment. That’s complete control. And that’s why we’re sticklers for putting our clients in control of their money. Why? Because when you’re in control of your money, you’re in control of your cash flow and you’re in control of your life. 

Think about it this way. When it comes to owning your debt, it could be likened to having money in your pocket and sliding it over to your right pocket. At all times you have full liquidity, use, and control of that money. The bottom line is this, when it comes to your money, keep it in your pants. 

If you’d like to get started on your financial journey, visit our website at Tier1Capital.com. We have a free web course, The Four Steps to Financial Freedom that goes through our process step by step and could show you how to get ahead financially.

And remember, it’s not how much money you make, it’s how much money you keep that really matters.