Savings Account vs. Whole Life Insurance
The dollars that you keep in your savings account “earn” less than 1%. That doesn’t beat inflation. In fact, your are losing roughly 2% – a fact they don’t disclose when you deposit your life savings into a long-term savings account. There is a huge opportunity cost to keeping that cash in a bank and you work too hard to lose your money. The truth hurts and I hope you aren’t a loser but if you are – you won’t be for long. There is a winning solution.
Let me also shed a little light onto how we came about this solution. In the early years of our company we worked with traditional banks. Banks operate on a fractional reserve banking system which means that when you deposit your savings into a bank account they don’t slap a name tag on a lump of cash and hold it for you and await your return. They put your money to work for themselves. You are allowed to access small sums but large withdrawals above 10k (sometimes less) require paperwork. Your deposits are not liquid. They make it difficult for you to go to your local bank and access your cash because they have your cash tied up in their own interests. There is a reason there is a lot of government oversight into large transactions. Let’s say, for example, you had 30k sitting in a savings account at the bank and you wanted to withdraw the entire lump sum – you would get a swift and firm NO. It’s happened to me. I have had friends who have even tried to cash a 5k check prior to a trip and they aren’t allowed to access their own money the same day.
Who does this hurt the most? The people who are working and saving to retire and those on a fixed income who need somewhere to store their money. I had to find a better solution due to the volume of large sum transactions we go through on a weekly basis within Joint Ops Properties and stumbled upon something pretty amazing. There is a safe place to store your capital that, as an added bonus, operates as a perfect investment vehicle if you so choose: Whole Life Insurance Policies. I store our capital in these policies while I wait for another deal for the below mentioned reasons…
Whole Life Insurance Benefits
- beats inflation
- Tax advantages
- Minimal government regulation and oversight
- Antifragile; Not subject to market volatility
- A place to save and invest, not speculate
People often look at life insurance with regard to a number insuring the “value” of a person. It wasn’t until I picked up a book by Nelson Nash – Becoming Your Own Banker that my conventional thoughts on life insurance completely flipped. He focuses on the “banking” qualities of a whole life insurance policy allowing you to “become your own banker” and alleviate your risk and involvement in the flawed fractional reserve banking system. It is a life line for anyone wanting to store their savings in a truly secure location and a game-changing concept for investors and entrepreneurs.