Tax-Advantaged Real Estate Investing
The main focus of retirement planning business has always been about helping real estate investors make more money. Of course, real estate is an excellent field in which to do investments — nothing surprising in that statement.
However, Tom Rutkowski had an epiphany very early in his “life insurance” career. As a sales manager was explaining policy loans to a potential client Tom had brought to the office, his ears piqued at his manager’s use of the words: “take policy loans against the cash value.”
This was intriguing. Tom’s real estate investor’s mind started running away with the possibilities:
“Ok.” Tom thought to himself, “Let me get this straight, my cash value can earn 7-8% tax-free. Let’s call that 12% on a taxable equivalent basis in a product that can’t lose value. Wow! AND I can get a loan secured by that cash value at the then current rate of 4.4%. So any investment I can make with that loan amount that earns more than 4.4% will add value ON TOP OF the tax-free return on the cash value! I can literally put my money to work in two places at one time!”
This is like a having a “Magic Checking Account” where your bank account balance continues to grow and earn interest even after you write a check. In essence, it’s like having a credit line equal to the amount of money you keep in the bank. Try that with a real bank!
Tom had talked to life insurance agents earlier in my life. Nobody ever told him that he could do this with life insurance. This was the most powerful financial strategy Tom had ever come across in his entire life and it’s not something that is taught in business schools or even remotely well-known.
Join Tom as he lays out the principles behind this method of putting your money to work in two places at the same time. You will be glad you did!
Article by Tom Rutkowski, “Tax-Advantaged Real Estate Investing When You’ve Maxed Out Your Self-Directed IRA”
Editor’s Note: For more articles written by Tom addressing financial topics for investors, please visit our GREEN Blog (https://www.learnfromgreen.com/blog/)!
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