To use a bad pun, a good financial planner is worth his weight in gold. But it really is a fact that powerful advice can take your net worth to new levels. The trick in all this is to find one that is innovative but not based on risk. Once you locate this kind of professional, and allow yourself to be open to some new ideas, you may be astonished at the results he can obtain.
A good example of this is the financial planners that are creating “personal banks” for their clients. The idea of a self directed banking structure is not entirely new. In fact, the idea has been around for about 25 years. But it has taken the Internet to spread the word and build a base of professionals educated in how to properly assist their clients.
The concept is deceivingly simple, and not greatly more complicated to put into practice. However, there are pitfalls to avoid with the IRS, although not in the sense of taking on risk with the tax man, just in making sure the rules are followed properly.
Once you have found a “personal bank” professional, he or she will guide you in the use of a hybrid whole life insurance policy that emphasizes allowing you to invest money, creating cash value that can be invested. The life insurance portion is minimized to keep the cost of the policy down.
The part that is a bit tricky comes with funding the policy to its full potential. The IRS has rules about this that if broken, will remove the tax saving aspect of the whole system. Did I forget to mention that having your own bank can provide you tax savings?
Yes, it can do that by returning your earnings to you in the form of dividends. And the other part of this system that is so appealing is that you are in full control of how your cash value is invested. In fact, the whole idea is to lend money to yourself so you never hand money over to another lender. Now does it get any better than that?
For more details: www.thepersonalbanker.com
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