As business owners, there is so much that’s uncertain. Are we going to expand our business or is it going to shrink? But what happens when the government needs more money? And how do you react, as a business owner, to protect your most precious asset, your business?
We’re currently over $31 trillion in debt and interest rates have risen and they’re going to continue to rise in the near future. That means more of the revenue that our government takes in through taxes is going to be allocated to paying interest on the debt. That has nothing to do with the government programs, government subsidies and of course, the military protection that the government affords for us.
Now, keep this in mind. The government only has two tools in its toolbox when it comes to producing more money. They could react legislatively by increasing taxes, or by printing more money. If we’re currently $31 trillion in debt and interest rates are rising and part of our issue is that more and more of the government’s revenue is going towards paying the debt. Printing more money is not going to reduce that situation. It’s actually going to make it worse.
Every single time a dollar is printed by the government, it increases inflation. And inflation is known as the stealth tax. Inflation does not discriminate. It affects everybody. Low income, middle income, high income. Everybody is affected by the effects of inflation.
Now more than ever, the buying power of our dollar has significantly decreased recently. So the question remains, how, as a business owner, can you protect yourself from all of these things that are outside of our control?
Now, one of the things we really didn’t drill down on today is the fact that, okay, if the government doesn’t print money, how are they going to address their need for more revenue? And that is to increase taxes. How do you protect your money or your business from an increase in taxes as well as how do you protect your money or your business from the ravaging effects of inflation?
One way you could help protect your cash and your business and the way we help our clients is with a specially designed whole life insurance policy designed for cash accumulation. This could help combat the effect of inflation and taxes on your business and your cash flow. You see these specially designed whole life insurance policies allow you to pay the premiums with after tax dollars. But once the money’s in that policy, it’s able to grow on a tax favored basis.
Then you can borrow against the cash value of that policy and deploy that money in your business, either to pay operational expenses or to expand and take advantage of a huge opportunity that you didn’t want to miss out on.
Either way, it allows your money to be in two places at once. It’s still earning interest in the policy, but now you’ve deployed it in your business to do whatever you need it to do to grow your business.
So you have the opportunity to earn a reasonable rate of return within that policy and earn an external rate of return within your business. That’s called multi duty dollars. That’s getting $1 to do the job of two, three or $4. And by doing that, think of this, what’s the rate of return of getting $1 to do two jobs? Well, it’s almost infinite. And that’s the key. That’s what allows you to offset the ravaging effects of inflation.
Recently, more and more business owners are sitting on cash and sort of paralyzed as to what to do. They know inflation is hitting them, but they also want to protect their money from taxes. So, we’re seeing them wanting to utilize their money in a more efficient and effective way so that they can get the most out of their money and also protect their business.
We always say it’s not what you buy, it’s how you pay for it that really matters. If you’re looking to protect your assets and your business from the effects of taxation and inflation, be sure to visit our website at Tier1Capital.com. We’d love to chat with you. Make sure to schedule your free strategy session today.
If you’d like to see exactly how we put this process to work for our clients, check out our webinar at 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.