July 23rd, 2014 → 7:40 pm @ MacDev Financial Group| Stephen Devlin // No Comments
How many cars do you expect to buy in your lifetime? I’d say the average is about six to ten for most Canadians, wouldn’t you? Let’s look at what happens when you buy a car. For a reliable compact car worth about $20,000, you might pay $5,000 to $10,000 down and finance the rest, right? That means you sacrifice not only that $10,000 down payment, but also its ability to gain interest in savings or pay dividends as an investment. In economics, we call this “opportunity cost,” and over the course of 10 vehicles, that cost could amount to as much as $500,000.
Wouldn’t you like $500,000 as a retirement savings supplement? I sure would!
Now, if you finance every car you buy over the course of your life through a properly structured dividend-paying whole life insurance policy, with a mutually-owned insurance company, you’ll get to keep 100% of the equity in your policy. Instead of only having a dented car by the time you pay back your loan, you’ll have cash value in your policy with interest, plus dividend growth. That’s right – you don’t lose out to “opportunity cost.”
When you borrow from your dividend-paying whole life insurance policy, it maintains the ability to grow and pay you dividends. If you happen to die while a loan is outstanding, the insurance company simply deducts the loan balance and interest from the guaranteed death benefit.
What have you paid for each of your cars in cash? You might save on paying interest on the loans, but at the end of 40 years, you’d only have the last car you purchased to show for your efforts and a zero balance in your savings account!
When purchasing big-ticket items throughout your life using your dividend-paying whole life insurance policy, you stand to make money even while you spend it.
Tags: CPA, Financial Advice, retirement advice, retirement information, Tax Advice, Tax Information, Tax Tips
