It will make America Great again!
This blog post will not be what you think it is about. While “The Wall” has been a source of contention these days, we will not get political whatsoever. That is, unless personal responsibility and taking care of your loved ones could be construed as political?
“The size of your emergency fund is a direct correlation to what constitutes an emergency”
We at Dynasty Wealth Partners believe in the idea of thinking multiple generations into the future. Our question is how can we give the most benefit in the future while also having the most money today? There are only a couple things we can do with the money that we earn. We can save it, spending it or give it.
Today I want to talk about the saving portion. One of my mentors, Jim Rohn was a business philosopher and motivational speaker. While I never had a chance to meet him personally I have listened to hundreds of hours of presentations on business, success, motivation, life and wealth. One of our favorite sayings from Jim is
“Build A Financial Wall Around Your Family That Nothing Can Get Through” ~Jim Rohn
The question to answer is How do I go about doing this?
Savings is not Investing
The first key is learning how to save.
Save often is our mantra, what if you start by saving just a dollar a day? That’s $7 a week, $30 per month. Next work on increasing your savings rate from there. Go to $2 a day, Then $3 a day. Soon your saving $100 a month. This method may be a simplistic view, but many people do not know where or how to start.
How much should I be saving?
One would want to work their way to saving 10% of their income. This is money that will never be spend. In the book “The Richest Man in Babylon” George Clason says, “A Part of All You Earn is Yours to Keep” and “Commence thy Purse to Fattening” Meaning, you save and earn compound interest, so that each year you automatically have more than the previous year. Do this over and over during your lifetime and you will be wealthy .
Beyond this, the 10/20/70 principle. Always save 10% that is never intended to be spent. Use 20% to pay off current debt, then increase overall savings to 30%. The additional 20% would be used to save for things like high ticket items like cars, vacations, educational expenses and the like. The 70% is what you would live on.
In building that wall around your family it’s best to establish an emergency fund to start which you will want to grow so large that any supposed emergency becomes a non event. What if you had 1-2 years of your income at your disposal? What if you had to take an emergency flight for a week to visit a sick or dying relative? (this happens every single day to someone)
As your emergency fund grows past the point of which you don’t see ever needing, then this fund becomes your “Opportunity Fund” Now we will call it an “Emergency/Opportunity Fund”
“When you have access to cash, opportunities will seek you out” ~Nelson Nash
Notice with the above scenario I said nothing about investing? Yes even I made the mistake years back by trying to invest too soon. I was thinking that getting high rates of return would reduce my need to save. I was wrong, investing should only come after you have the first two items in place. Your savings and protection. This includes contribution to your retirement funds and 401k’s. Don’t do any of this until you have a sizeable emergency fund in place.
Protection of your most important asset.
Your most important asset if your ability to earn money. If you had a machine that could produce one million dollars, would you want to protect that machine with insurance?
The same holds true for you! Over your lifetime even an average salaried person will have earned several million dollars gross over their lifetime. Most of that money will get eaten up by taxes, interest to others and to lifestyle. Protection of your asset is the second and one of the most serious things you will want to do in Building That Wall! Actually purchasing insurance should come prior to even savings! I can’t tell you how many people I run into that 0 (Zero) life insurance. Even if you haven’t yet started a family, it’s a good idea to have some basic protection in place. Many people wait, only to find out something prevents them from being insuranable.
“The Wall of Babylon offered Centuries of Protection. We cannot afford to be without adequate protection”
Now is the time we focus on getting out of debt and controlling your expenses. Want to know the most effective way of getting out of debt? Read my article on the “Roll Over Roll Down Method of becoming debt free.” The key is being able to put your money in a place that will compound over your lifetime while recapturing the interest that you are current paying to banks and financial institutions and give yourself more control over the paydown of debts.
Multiple Income Streams
Finding ways to create multiple streams of income. Many people do this with a side business (side hustle). Starting a business on the side gives you all kinds of tax advantages (write off’s) it can also pay you big time if you work at it consistently. We found that the Rich Dad series of books by Robert Kiyosaki to be one of the best mindset educational tools out there.
Premium payments (which, like mortgage payments, are one of the few things benefited by inflation)
The last piece of building your financial wall is putting the banking function in your own control. Becoming Your Own Banker will give you control over your life as well as add efficiency to your emergency/opportunity fund whereas each dollar you put into your banking system will do multiple jobs. We design our “Banking System” using Specially Engineered Life Insurance. this SELI maximizes each dollar and protects your wealth. Each dollar you put into you system does these things:
- Premium payments (which, like mortgage payments, are one of the few things benefited by inflation) Cash value
- Death benefit
- Waiver of premium
- Increasing death benefit
- Paid-up addition capability to increase cash
- Income tax-free to heirs
By using Specially Engineered Life Insurance as your “Warehouse of Wealth” you now have a powerful financial tool
“By Controlling the Banking Function in your life, you now have created a perpetual tailwind to everything you do in the financial world.” ~Nelson Nash, author of “Becoming Your Own Banker”
You can purchase a copy of Becoming Your Own Banker on our website
Another great book to help wrap your mind around using life insurance to help you securely Build That Wall is “Live Your Life Insurance” by Kim Butler. Kim has been an advocate of this strategy for over 20 years and teaches this concept through the Prosperity Economics Movement which we are a part of. Click here to download a free copy of “Live Your Life Insurance”
“Making America Great Again”
The above slogan has been a source of contention lately in the United States. It seems like people either love it or hate it with a passion. During the 2016 Presidential Election the President Donald Trump began using this. Today we want to do our part in making America Great Again. The way to achieve this would be for all people to begin to save money, get out of debt and take personal responsibility for their own personal finances.
Utilizing our strategies of creating a “Lifetime Piggy Bank” where business owners, individuals and families can build multi-generational wealth. We use the Infinite Banking Concept as a foundational strategy. What if there was a place where each dollar you earn and then save compounds tax free over your lifetime? What if each dollar you put into this system allows that dollar to do 5-7 jobs (or more if you invest in things like real estate)
How will utilizing the Infinite Banking Strategy Make America Great Again?
First we must understand a few things. How is money created? Money is created by the banking system when someone deposits money at their local bank. This includes checking and savings. These dollars now become part of the bank’s reserves. Each day those reserves are calculated and determine how much the bank can loan out to others. The Fractional Reserve sytem allows banks to only hold a “fraction” of the deposits compared to the amount loaned out. Normally is is 1/10 of which 9/10 can be loaned out. This means you deposit $100 into your account and now the bank can make loans of $900 based off of this deposit. Learn more at Fractional Reserve Banking
What this does is inflates the amount of money in circulation (both currency and electronic funds) The more money chasing the same goods and services reduces the value of those dollars. This creates inflation.
Understand that keeping your own personal reserves in insurance companies, they can not inflate the money supply, they cannot use the fractional reserve system like a bank does.
Are insurance companies safe? Great question! We believe that insurance companies are some of the safest institutions in America. Matter of fact, during the great recession from 2008 through 2015, more than 500 banks failed, according to Federal Deposit Insurance Corporation (FDIC) data. In contrast, in the 7 years that preceded the recession, 25 banks failed. *source the Cleveland Fed
Since 2008 only about 14 insurance companies have gone into insolvency. Each state must have an state guarantee fund that all insurance companies pay into. This allows in the case of an insolvent insurance company to be bought out and made whole again.
Additionally, the companies that we work with have been in business for over 100 years. We also only recommend that our clients use mutually owned companies. This means that each policy holder is a partial owner in the company. All profits, by law, must be distributed back to the policy holder in the form of a dividend. We believe this type of company is stable and forward looking. While dividends are not guaranteed, the companies that we use have been paying them for over 100 years. Secondly once a dividend is declared it cannot be take away.
Can you imagine how much better off our nation would be if more people were out of debt (credit card, student loan and other consumer debt) and they have more in savings that most currently do. According to the latest data from the U.S. Bureau of Economic Analysis, the personal savings rate in the United States is 7.6 percent. This means that out of every $100 in after-tax income Americans bring in, approximately $7.60 is being saved for things like retirement, emergency expenses, and rainy-day savings. While most of this going to towards retirement accounts like 401k’s. Secondly this is a cross section of the United States, many people save nothing, or worse spend more than they make via credit cards, cash advances and other loans.
Making America Great Again means everyone saving at least 10 percent or more of their income. In the book “The Richest Man in Babylon” starting with at least 10% that you will never spend, and increasing this over time to 20 or even 30% will make everyone better off.
Our goal is to help people have a safe and reliable place to save their money. Currently banks only pay 2.25% or less. Certificate of Deposits certainly a little more than this. We believe that using life insurance according to the Infinite Banking Concept as your warehouse of wealth offers you a more stable and more benefit than banks, while also preventing those dollars from being part of the fractional reserve system.
In the book “How Privatized Banking Really Works” by Carlos Lara and Robert Murphy. They spell out the problem (fractional reserve) as well as the solution (privatized banking / Infinite Banking) and why this idea is so important for the future greatness of America. You can purchase “How Privatized Banking Really Works” on our website.
As you can see building that wall, which is a financial wall around yourself and your family is one of the most important things you can do to Make America Great Again. As Infinite Banking Authorized Practitioners we are able to help you carve a path forward for your financial future and that of your children, grandchildren and generations to come.