The last of our 7 Principles of Prosperity is MULTIPLY. Of course, we’d like our dollars to multiply, but exactly how do you manage your assets to do that? In addition to following our other Prosperity Principles, we want to multiply the ways we use each dollar. You might say the secret is getting your money to “multi-task.”
Think of your dollars like a smartphone. For many decades, phones were only used to make phone calls. They did one job. Today, a smartphone is a multi-tasking device (such as an iPhone) that acts as
- a phone
- a camera
- a mini-computer with internet access
- an address book
- a calculator
- a calendar
- a GPS mapping and guidance system
- a video player
- a recording device
- an alarm clock and stopwatch
- a music library
- an instrument that sends and receives texts and emails
And that list is just for starters!
You can still go out and buy a separate phone, camera, palm pilot, pager, GPS system, stopwatch, alarm clock, iPod, mini-laptop, etc. But that wouldn’t be efficient if you were only trying to duplicate the tasks that your smartphone performs. You would waste money and energy, separating tasks and duplicating efforts, rather than multiplying the uses of one smart-phone.
What does this mean for your prosperity? Managing your assets separately like 10 different devices wastes money and energy. Having a 529 for savings, a 401k and IRA for retirement, savings accounts and certificates of deposit for your emergency fund slows down your prosperity.
You want your dollars to be flexible and to do as many jobs as possible. You want your money to be as smart as your phone!
Let’s see some real-life examples of how this works. Here are the multiple jobs your dollars can do in whole life insurance:
- pay for premiums
- build cash value
- waiver of premium
- guarantee a death benefit
- be used for leverage (such as borrowing against your cash value from your insurance company or a bank)
- increase the death benefit over time
- the capability for paid up additions.
Meanwhile, the velocity of money is increasing, because money can “move” through the policy, and leveraging your policy gives you endless options for further cash flow.
Now, let’s look at how money does multiple jobs in investment real estate. When you purchase investment real estate, you can immediately have your dollars doing up to 7 jobs:
- purchasing and improving the property itself
- mortgage payments
- depreciation (a tax advantage which offsets cash flow)
- leverage (the ability to multiply dollars by borrowing against the property or using it as collateral)
- disposition (the ability to sell or give property away in a tax-favored way)
- and cash flow
Finally, let’s see how to move and multiply your money combining both whole life insurance and investment real estate:
A. Use life insurance to buy property. If you have been steadily storing money in your whole life policy, you can borrow against your cash value for a down payment of a piece of investment real estate. (First – make sure the property gives you adequate cash flow without too much overhead! We can help you determine that…)
B. Use cash flow to fund a policy. As rents rise, the loan for the down payment shrinks, and your mortgage stays the same, you’ll find yourself with increased cash flow on your property. At this point, you might want to consider a way to store some of that cash flow in a vehicle where it can grow tax-free such as… in a whole life policy!
Many wealthy people have multiple real estate investments and multiple smaller life insurance policies to allow themselves greater flexibility and many options.And while real estate and insurance aren’t the only options, they are excellent vehicles that follow our 7 Principles of Prosperity and help you accelerate your wealth.
Move and manage your assets with multi-tasking in mind… and your dollars will MULTIPLY and be fruitful!
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