With 25-35% paid in taxes and another 25-30% paid in interest expense, your ship might be sinking. At best, the burden of these expenses is keeping it from moving very quickly. Taxes and interest expenses are the 2 biggest holes in anyone’s ship. The average American loses 60% of their income to taxes and interest. Let me ask you this: How big are your holes?
Think of a bucket with holes in it. You can pour water in but it drains right back out. This is a metaphor for our financial lives. We are constantly throwing money in our buckets trying to fill them up, only to have it leak back out through a variety of expenses. The sad thing is that we have been trained taught and educated to believe that this is the way it is or it’s a normal cost of business. Well, it doesn’t have to be. Plug some of those holes and your bucket will fill up faster…without having to add more income or take on more risk.
How much did you spend in 2009 in:
- Income Tax : Federal, State and Local
- Sales Tax: 6-8% average on most purchases
- Mortgage Interest including Home Equity Loans: Typically 90% in the beginning of the loan and 52% over the life of the loan. Look at your Truth in Lending Statement.
- 4. Automobile Interest Expense
- 5. Credit Card Interest Expense: Typically 12-18%
- Finance Fees: Such as refinancing or purchasing a property
- 7. Bank Fees, Investment Transaction Fees, Management Fees:
I challenge you to find out how much you spent in these areas. It will stagger you. And until you understand where your money is going you won’t know which holes need to be plugged.
The Infinite Banking Concept is geared toward plugging these holes. To do this we use a properly structured, tax-advantaged whole life insurance policy. By funding a policy and then using it as your first means of financing it allows you to recapture the interest expense you would have paid elsewhere.
We have been taught to get our loans from the bank. And in some cases we need to. But by building your own system of banking you can reduce and potentially eliminate your dependence upon traditional banking institutions for financing. By borrowing from yourself and paying yourself back, the interest expense goes back to you. In addition we can eliminate loan finance charges and transaction fees.
Take the challenge and identify where your money is truly going. Or contact me and I’ll do it with you. You’ll be amazed!
Scott Storace
