private financing strategies

The Benefits of Financing Yourself!

The “Why” and “How” of Incorporating Private Financing

Family - Small Business - Organization

“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”

Lord Acton English Historian, 1834-1902

"Banks lend by creating credit. They create the means of payment out of nothing."

Ralph M. HawtreyFormer Secretary of British Treasury, 1879-1975

You will either own your own bank, or, you will be the customer of someone else’s bank.

You cannot take banking out of the equation.

-R. Nelson Nash

How banks make money

Paying and earning interest and how money moves

Depositor Borrower

BankLoans out depositor’s money charging greater interest to borrower, keeping the difference.

Interest a bank pays to depositors

Interest a bank earns on loans or investment grade

bonds

$2,000 $8,000

How Banks WorkExample: $100,000 deposit and loan

$6,000

Bank

Depositor Borrower

How Banks WorkThe Three Players

Unfortunately, most people are either the:

Learn how to Recapture, Reuse and Recycle Your

Money!

How do you use your local bank? Deposit money and the bank pays you interest • Checking / day-to-day operations • Savings• CD's

$ Deposit $

% Interest %

$ Loan $

% Interest %

Borrow money and you pay the bank interest • Auto Loans

• Business Loans • Credit Cards

• Home Equity Loans

Most Americans spend 24% - 34% of every disposable dollar in interest

Why do investors start banks?

Banks are a proven investment that gives fair returns with little risk • For every $1 deposited they can loan out $10 • The spread is used to fund operations and create earnings for

shareholders

Interest a bank pays to

depositors

Interest a bank earns on loans or investment grade

bonds

0% - 2% 6% - 8%

• Banks make, on average, between 200%-400% on YOUR money, through fractional reserve lending (1 to 15 leverage)

• That includes overdraft charges and miscellaneous account costs and fees.

There is tremendous money in banking

21We finance everything that we buy…

You either use someone else’s

money

You pay cash

=

Lost Opportunity Cost

%The way you finance your life always

impacts your wealth.

For better…

…or for worse.

Every financial decision we make, impacts every other financial decision. They are all tied together.

+++

Capital is a responsibility and should be treated with great respect.

You must also respect the concept of

ECONOMIC VALUE ADDED

The continued profitability of your business could depend upon it….

%%%

Those who recognize that their own capital has a cost, have a system in place to RECOVER that cost.

Most of us spend our entire lives focusing on Rate of Return.

Instead, we should be focusing on wealth transference….interest charges, taxes, inflation, and other associated costs and fees.

Directing Interest PaymentsBanking is about redirecting interest payments that you would normally make to a lending institution, to an entity that you own and control.

Mine!And starting

your own financing

strategy permits you to move

income off of the tax rolls, forever…

?If, over your lifetime, you could redirect $250,000

of interest payments away from the Wells Fargo and Chase banks of the world…

and deposit that money into your personal

financing system…

Would that inspire and motivate you to explore the opportunities that this strategy offers?

Do you understand Interest?

“Those who understand interest earn it. Those who don’t pay it. …be the bank.”

Robert KiyosakiAuthor, Rich Dad Poor Dad

Your last loan….

• When was the last time you had to take a loan from the

bank?

• How much did you need to borrow?

• What was the Interest Rate?

• How much paper work did you have to fill out?

• How long did you have to pay it back?

• What happens if you miss a payment or two?

Creating your own financing option

What would it mean to you?

Welcome Home to the Benefits of “Private Financing Strategies”

You will learn:• Financial literacy• The importance of liquidity, use and control of

your money• How to think and act like a banker• How to recapture money that was unknowingly or

unnecessarily being lost

1st National of You

Most Americans borrow because they have to…

Wealth Creators borrow because they want to…

Your own alternative?If you had your own banking system you could: • Stop the transfer of your wealth to banks and finance

companies • Capture some of the profits currently made at your local bank

And enjoy…• Increased wealth• Asset protection• Tax advantages• Use and control of your money, and liquidity

Mine!

If you owned your own bank, how much money would you want to have flow through your banking system?

Over time, the efficiencies associated with operating your banking system create:– Guaranteed tax-free retirement income – Tax-free death benefit– Creditor protection, and – 25+ additional benefits

Money OutMoney In

Mine!

What if you:• Controlled the interest rate?• Determined the payment schedule?• Borrowed because it actually made your retirement

better and bigger?• Recaptured the principle and interest instead of giving it

to financial institutions?• Grew your capital on a tax free basis?• Had total asset protection?• Could reduce your tax liability?• Could provide for your family for generations to come?

Creating Your Personal Banking System

“Financing” as a Wealth Creation Strategy

Mine!

“Everyone should have two businesses – the one that gives them a paycheck and the banking business.”

R. Nelson NashAuthor of the bestselling book - “Becoming Your Own Banker - The Infinite Banking Concept”

Your Own Personal Banking System

The Capitalization Phase

Be patient & Trust in the process

How long will it take to build up your bank?

You can begin borrowing from your bank within 30 days

In approximately five to seven years the cash value of the policy will equal the amount of your deposits

Mine!


Those who embrace this concept will profit for generations to come…

The good news is that the infrastructure for your Personal Banking System already exists, and has for more than 200 years…

…but very few people know about it.


The Capitalization Phase

Be patient & Trust in the process

Where will the money come from?• You can transfer assets from existing assets, savings, CD's,

investments• You can re-direct current savings 40Ik's, savings accounts • You can use substantially equal periodic payments from IRA's

What would you need?

Capital&

A place to keep it

• That has growth potential• Allows you advantaged access• That offers some protections

1st National of You

How To Create Your Infinite Banking System You will fund a dividend paying whole life insurance policy

up to the MEC limit. The policy will be from a mutual life insurance company on an individual who you have an insurable interest (including yourself)

WHY? A mutual life insurance company is already set up like a

bank. It can perform all the activities of a bank except for checking accounts.

A dividend paying whole life policy will – Hold your deposits – Pay you interest on your cash values – Loan money to yourself or others – Pay dividends on the earnings of the life insurance company

Additional benefits: – Tax advantaged growth – Asset protection – Death benefit

The PlatformWhole Life

Insurance Plan

Cash Value

Finance YourselfCapitalization1 2

Your life insurance policy acts as a warehouse.

Until you need to use those funds to finance your next purchase.

PAYROLLINVENTORY

HEALTH CAREVEHICLES

It’s only limited by imagination…

And your willingness to employ your personal

banking system.

The PlatformWhole Life

Insurance Plan

Cash Value

Finance YourselfCapitalization

Pay Yourself Back

1 23

Pay Interest 4

The costs associated with financing these items become deductible to your company…

And, ultimately shift income from your company to your personal accounts.• 1099 interest income, but

no FICA or FUTA

The PlatformHow to make your transition to banking easy, transparent, and affordable:

Whole Life Insurance Plan From a dividend-paying, mutual Life Insurance company

No: • Buildings• Staff• Financial oversight• Government regulation• Compliance issues

Uses For Your Private Banking System

EquipmentLoans for your business Line of CreditAutomobile LoansFund an Equipment Leasing Company Loans to family membersCollege fundingGifting for estate planningReal estate loansVacationsHome Remodeling Anything that you finance

No other bank, insurance product, or investment vehicle works as well.

You Can Create 5 Assets

Death Benefit

A Private Bank - – Use cash value to

finance your purchases.

Tax-Free Growth on Your Capital

Tax-Free Loans – IRC 7702

Perpetual Capital and Wealth to

Future Generations One

Annual Premium

How to Finance a Car

A Tale of Two Brothers

$30,000

JohnMichael

How to Finance a Car:A Tale of Two Brothers

$30,000

Both brothers decide to buy a new SUV and finance with the same terms:

$30,000 Loan 6% Rate

$580 for 60 MonthsJohn

Uses his Personal Financing Strategy

MichaelUses the local bank

to finance the purchase

Income Statement

Principal and Interest

Expenses

IncomeIncome Statement


Expenses

Income

Balance Sheet

Michael’s Auto Loan

LiabilitiesAssetsBalance Sheet

Michael’s Auto Loan

LiabilitiesAssets

Michael Local Bank

Net Effect for Michael

Michael is left with a depreciated car worth $5,000

Net Effect for Bank $580 income for 60 months$30,000 principal$4,799 Interest$34,799 Total

Income Statement


Expenses

IncomeIncome Statement


Expenses

Income

Balance Sheet

John’s Auto Loan

LiabilitiesAssetsBalance Sheet

John’s Auto Loan

LiabilitiesAssets

The Bank of John

Net Effect for John

John is left with a depreciated car worth $5,000

Net Effect for John’s Bank

$580 income for 60 months$30,000 principal$4,799 Interest$34,799 Total

John

John keeps the car & all his money!

Because he owns the Bank!

Michael is left with only a depreciated car.

The Local Bank keeps all his Principle & Interest.

How to Finance a Car:A Tale of Two Brothers

$30,000 Principle + 4,799 Interest+ 5,000 Car $39,799 Total

JohnMichael

So When You Finance Your Next Car, You Will Either…

Increase Your Net Worth or Decrease It.

You Have a Choice!

???

What would the ideal financial plan look like?

Putting your Private Financing Strategy to work

One of the greatest drains on our financial resources is the interest

we pay to finance our lifestyle:

Bank Loans

Credit Cards

Qualified Retirement Plans

Market Losses

$ $ $%%%

The Money we transfer away is a lost fortune with two parts:

• The actual number of dollars we transfer

• The future value of the transferred dollars

$%

Controlling the amount of money we transfer away will dramatically increase financial security and wealth for retirement.

How then do we save for retirement without loss while financing our lifestyle?

$ $$ %%$

$

%%

$

$

%%$$ %

%

Most Americans have been trained, taught, and educated to build wealth through government-promoted Qualified IRC plans like:

• 401(k)s• 403(b)s• 412(i)s• 457s• IRAs• Seps• Keoghs

Conventional wisdom and current planning methods tell us to save for retirement using qualified plans that tie up our money.

That in turn sends us to the bank and credit cards to

finance our lifestyle.

Everyone does it this way but, is there a better way?

401(k)IRA

Benefits IRC 400 Plans IRC 7702Creditor Proof Yes* Yes Contributions: Tax-deferred Yes Yes Growth: Tax-deferred Yes Yes Withdrawal: Tax-free No Yes Transfer: Tax-free No Yes Guaranteed Returns/Growth No Yes Competative IRR No Yes Unlimited Investment Options No Yes Enhanced IRR through Self-Management No Yes Collateral No Yes Virtually Unlimited Contributions No Yes Accessible: Provides Velocitization Opportunities No Yes Liquidity, Use and Control No Yes Disability Provision No Yes Self-Completion Provision (Death and Disability) No Yes Banking Purposes Allowed No Yes

YearGrowth with

No TaxGrowth Taxed

at 17%Growth Taxed

at 27%0 1.00 1.00 1.00 1 2.00 1.83 1.73 2 4.00 3.35 2.99 3 8.00 6.13 5.18 4 16.00 11.22 8.96 5 32.00 20.52 15.50 6 64.00 37.56 26.81 7 128.00 68.73 46.38 8 256.00 125.78 80.24 9 512.00 230.18 138.81

10 1,024.00 421.22 240.14 11 2,048.00 770.84 415.44 12 4,096.00 1,410.63 718.71 13 8,192.00 2,581.45 1,243.37 14 16,384.00 4,724.06 2,151.02 15 32,768.00 8,645.03 3,721.27 16 65,536.00 15,820.40 6,437.80 17 131,072.00 28,951.33 11,137.40 18 262,144.00 52,980.93 19,267.70 19 524,288.00 96,955.11 33,333.12 20 1,048,576.00 177,427.85 57,666.30

Loss due to Taxes 871,148.15 990,909.70

100% ROI in a

Tax Free Vs.

Taxable Environment

POINTS TO CONSIDER1. There are only two sources of income -- people at

work and money at work.2. If you knew, at passive income time, that you would be

getting back every thing that you paid into a system -- tax free -- would you object to putting more money in it?

3. When you get paid for your work, you put all of it into “someone else’s bank” and then write checks from the account to buy the things of life. So, “someone else’s bank” gets all of your money. If you owned a banking system, wouldn’t you want to run all of your business through your bank?

POINTS TO CONSIDER4. When government creates a problem (onerous taxation)

and then turns around and grants you an exception to the problem they created (any tax-qualified plan) aren’t you just a little bit suspicious that you are being manipulated?

5. Tax-qualified retirement plans were all created under the guise of “giving you a break.” First, there were pension plans for corporate employees, then came HR-10 plans for partners and sole proprietors, and finally, IRA’s for individuals. Now everyone “had an exception” to the IRS Code. If the government really wanted to “give you a break” -- all they had to do is cut out the taxes! Do you really think they want to do that?

POINTS TO CONSIDER6. Wealth has got to reside somewhere. Where would you prefer

to have it reside? Real Estate? The Stock Market? Or, free contract with other free persons (Life Insurance)?

7. You finance everything you buy. You either pay interest to someone else or you give up interest you could have earned elsewhere. There are no exceptions.

8. Your need for finance, during your lifetime, exceeds your need for life insurance protection. If you solve for your need for finance through life insurance cash values, you will end up with so much life insurance, you can’t get it past the underwriters. You will have to insure every person in which you have an insurable interest.

Understanding Taxes

“... few people know that the free bridge exists”

“I live in Alexandria, Virginia. Near the Court Chambers is a toll bridge across the Potomac.

When in a rush, I pay the dollar toll and get home early. However, I usually drive outside the downtown section of the city and cross the Potomac on a free bridge.

The bridge was placed outside the downtown Washington, D.C. area to serve a useful social service – getting drivers to drive the extra mile and help alleviate congestion during the rush hour.

If I went over the toll bridge and through the barrier without paying a toll, I would be committing tax evasion.

If I drive the extra mile and drive outside the city of Washington to the free bridge, I am using a legitimate, logical and suitable method of tax avoidance, and I am performing a useful social service by doing so.

For my tax evasion, I should be punished. For my tax avoidance, I should be commended.

The tragedy of life today is that so few people know that the free bridge even exists.”

U.S. Supreme Court JusticeLouis D. Brandeis (1916 – 1939)

Essential Characteristics of the Ideal Financial Plan

1

2

3

The Ideal Financial PlanCash

Available

Flow of Money

Must provide for a systematic and continuous flow of money into the plan (or it won’t get done).

There should always be a positive return on the money.

Money should be available when it is needed (to prevent the costs of indebtedness and to prevent missed opportunities.

Positive Return

5

4

The Ideal Financial Plan

Min. Taxes on Accum

Cash Available

Flow of Money

Control Distribution

There should be minimum taxes on the accumulation of money in the plan.

There should also be minimum taxes on the distribution of money from the plan (minimum tax whenever the money may be used, and minimum tax on whomever ultimately receives the money).

Distribution should be easy and uncomplicated, and not subject to control by others (such as the imposition of penalties for using your money the way you wish, and in ways most valuable to you.

Positive Return

Min. Taxes on

Use

6

9

8

7


Min. Taxes on Accum

Cash Available

Flow of Money

Minimize Loss

Flexible


The plan should contain contingencies for the normal occurrence of real life events (such as death, disability, emergencies, opportunities, and unforeseen factors that can take whatever wealth may have been achieved).

It should minimize the risk of loss of the money.

There should be flexibility to change the plan when and if necessary.

Positive Return

Min. Taxes on

Use

“What if” Protection


Min. Taxes on Accum

Cash Available

Flow of Money

Minimize Loss

Flexible


All of the this can be accomplished by learning the principle of private family banking through dividend-paying whole life insurance.

Positive Return

Min. Taxes on

Use

“What if” Protection

Key Benefits

1. Dividend Paying Whole Life is the only financial product with a guaranteed, permanent, growing, tax-free death benefit and a guaranteed lifetime premium regardless of any health change.

2. The same dollars create the death benefit and the cash value simultaneously.

Key Benefits3. The guaranteed continual growth of cash value

provides full cost recovery.4. The interest and dividends are not reportable as

taxable income.5. Cash values and dividends are liquid and

contractually guaranteed to be available upon request.

6. It is the only financial product that can include a benefit to complete the plan if disability occurs.

Dividend paying whole life insurance is a 200 year old financial tool that should be the foundation

for every solid financial plan!

?Are these strategies a fit for you?

• Business is profitable – excess/retained earnings or savings

• You want to tax-efficiently shift income from the company to your personal accounts

• You are comfortable with a capitalization phase of 1-4 years– Good, Better, Best

?Are these strategies a fit for you?

• You are interested in creating a legacy for you and your family

• You are willing to become a student of banking

• You are tired of the banks making all the money

• Call me at 678-889-8940 and let’s talk – Richard Young - Young Financial Group, LLC

private financing strategies

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