Why I Borrow Against My Own Assets
Today I am writing about the power of borrowing against your own assets.
Namely, life insurance as an asset.
When I first thought about the idea of borrowing against my assets, I legitimately could not understand why I would take a loan and pay interest against something I already own.
Mainly because every time I had taken a loan, it was from a bank and it was to buy something I didn’t own (a car, expenses on my credit card, etc.).
So the idea that I would borrow money on something I already did own made no sense.
This is because I was financially illiterate and was a consumer.
I didn’t understand that the wealthy do it completely the other way around.
They generally don’t borrow money for things they don’t own and the often borrow money on things they do own.
When I own assets, those assets grow.
Makes sense so far right?
Well two really bad things happen when I sell assets.
#1: They stop growing. Because I don’t own them anymore.
#2: I pay taxes on any gains I made on those assets.
The wealthy do not like selling assets.
I don’t like selling assets.
I don’t want my assets to stop growing and I don’t want to pay taxes.
If I borrow against my assets, I didn’t sell them, so the keep growing.
If I borrow against my assets, even if I made money, I did not realize a gain because I didn’t sell and pocket my profits. A loan cannot be taxed!
Borrowing against my assets allows me to avoid taxes and for my assets to keep growing, while I have access to the value of them to do things like pay off debt, make large purchases, or invest!
The key is that my cost of interest to borrow must be a lower than what my assets will grow at, plus my tax savings.
As long as I am making more money and saving more in taxes than I am paying in interest to borrow against my assets, then I am winning!
Life insurance is actually perfect for this strategy!
If I deposit $1, I can borrow 70–90% of it right away, and my dollar keeps growing at 3–5% while I borrow. My cost of borrowing is only 1–3%.
Where life insurance is remarkably advantageous is that my life insurance cannot lose value, unlike many other assets I may borrow against. This means I have no risk.
I also have a death benefit that pays my loans off if I die. So I’m never leaving my family holding the back on loans I took against my assets and they are paid off automatically.
To learn more about how you can use this strategy to multiply your wealth, I want to offer you a free copy of my book!
Click here to order!
This book will cover not only the life insurance strategy, but also hundreds of pages full of strategies used by the Top 1% of Wealth historically!
It comes with a free Course Supervisor who will ensure you finish and understand the book and it will come with a free Coaching Call so you can begin implementing what you’ve learned!
To Purpose, Wealth & Freedom,
Jerry Fetta
Jerry Fetta is the CEO and Founder of Wealth DynamX. He is a nationally recognized financial expert featured in Forbes, Yahoo Finance, Fox, Chicago Weekly News, New York Finance, interviewed on over 45 podcasts with world renowned experts, earning endorsements and affiliations throughout his career with names like Kevin O’Leary, Grant Cardone, Dave Ramsey, and Pamela Yellen.
Jerry’s mission in life is to help create millions of financially educated and solvent families achieving greater financial freedom and sharing the truth about money with those around them.
Learn more at www.WealthDynamX.com
(DISCLAIMER: The information in this content should not be considered tax, financial, investment, or any kind of professional advice. Only a professional diagnosis of your specific situation can determine which strategies are appropriate for your needs. Wealth DynamX can and does not provide advice unless/until engaged by you.)
