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- Financial Freedom – Time and Money
Building Wealth
- The easiest way to build wealth is to create a routine of consistently saving money from every paycheck.
- You must practice and live by the 70/30 Rule.
| Idea Disposition | The 70/30 Rule |
|---|---|
| Mr. Jim Rohn – by Jim Rohn | Feb 15, 2017 | Blog, Building Wealth, Featured | Professionally known as Jim Rohn, was an American entrepreneur, author, and motivational speaker. |
| The 70 Percent (Taxes and Debt): | “After you pay your fair share of taxes, learn to live on 70 percent of your after-tax income. These are the necessities and luxuries you spend money on.” |
| Charity: | “One-third should go to charity. Charity is the act of giving back to the community and helping those who need assistance.” |
| Capital Investment: | “The next 10 percent of your after-tax income, you’re going to create wealth. This is money you’ll use to buy, fix, manufacture or sell. The key is to engage in commerce, even if only on a part-time basis. Buy/Sell products, Real Estate, Start a Part-time business.” |
| Savings: | The last 10 percent should be put into SAVINGS. “Consider this to be one of the most exciting parts of your wealth plan because it can offer you peace of mind by preparing you for the “winters” of life.” |
| Jim Rohn stated: “Let me give you the definition of “rich” and “poor”: | Poor people spend their money and save what’s left. Rich people save their money and spend what’s left. |
When you can afford $150 for Savings/Investment you should talk to us about creating a Indexed Universal Life policy.
Anthony Gladney
How building wealth with Indexed Universal Life policy can help low income to middle income families?
- Tax-Advantaged Growth:
IUL policies offer tax-deferred growth on the cash value component. This means that as the cash value grows, policyholders don’t have to pay taxes on the gains each year, allowing their savings to compound more effectively. - Protection and Investment Combined:
An IUL policy provides both life insurance coverage and a savings component. This dual benefit ensures that families have financial protection in case of the policyholder’s death, while also building a cash reserve that can be accessed during their lifetime. - Flexibility in Premiums and Death Benefits:
Policyholders can adjust their premiums and death benefits over time, which is beneficial for families with fluctuating incomes. They can reduce premiums in tighter financial times or increase them when they have more disposable income, ensuring continuous coverage and growth of the cash value. - Participation in Market Upside:
The cash value in an IUL policy is tied to a stock market index (e.g., S&P 500). While the policy doesn’t directly invest in the market, it credits interest based on the index’s performance, subject to a cap and floor. This allows for potential higher returns than traditional whole life policies, without the risk of direct market losses. - Policy Loans and Withdrawals:
Policyholders can borrow against the cash value of their IUL policy. These loans can be used for various purposes such as funding education, paying off debt, or covering unexpected expenses, often with favorable terms compared to traditional loans. - No Contribution Limits:
Unlike some retirement accounts, IUL policies do not have contribution limits, making them a flexible option for additional savings and retirement planning. - Living Benefits:
Many IUL policies offer living benefits riders, such as critical illness, chronic illness, or long-term care riders. These can provide financial assistance if the policyholder experiences serious health issues, adding an extra layer of financial protection. - Estate Planning:
IUL policies can also be used as part of an estate planning strategy. The death benefit can be used to cover estate taxes, ensuring that more of the estate is passed on to heirs.
Considerations and Cautions:
- Costs and Fees: IUL policies can have higher fees and costs compared to other investment options. It’s essential to understand these costs and how they impact the cash value growth.
- Understanding the Product: IUL policies can be complex. Families should work with a knowledgeable financial services professional to fully understand how the policy works and ensure it aligns with their financial goals.
- Commitment: Building substantial cash value in an IUL policy typically requires a long-term commitment. Policyholders should be prepared for this commitment to maximize the benefits.
Conclusion:
For low to middle-income families, an IUL policy can be a valuable tool for building wealth, providing life insurance protection, and offering financial flexibility. However, it’s crucial to carefully evaluate the policy terms, fees, and long-term commitment required to ensure it’s the right fit for your financial situation and goals.
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