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How Easy It Is to Become Your Own Source of Financing
Is buying a big-ticket item looming in your future? A home theater system, a new washer and dryer, a car, a cruise?
Any time we’re considering the purchase of something “big,” lots of things run through our mind. Excitement—This is going to be great! Anticipation—I’ve dreamed of this for so long! But also worry—Am I making the best choice? Am I paying a fair price?
Something many people rarely think about, something that is equally as important as the right choice and a fair price, is choosing the right way to pay for your purchase. How are you going to finance it?
Have you stopped to consider that you finance everything you buy? Either you pay interest when you make payments, or you lose interest on your money if you pay cash. Since you really do finance everything you buy, a fair question to ask is, How are you going to finance your purchase?
Financing Purchases Usually Comes Down to
One of These Strategies:
- Use your own money. Save up in advance, take the money out of your savings account, and pay cash.
- Use somebody else’s money. Take out a loan, use the proceeds to pay for the item, then pay back the lender—with interest—over time.
- Lease it. Obviously, you can’t lease a cruise, but leasing is a popular strategy to get a new car with a low down payment and often lower monthly payments than taking out a loan. And some people lease, or rent, their appliances. But either way, this is a variation on the strategy of using somebody else’s money and paying it back—with interest—over time.
Truth be told, none of these strategies is ideal, but there is a little-known strategy that is ideal.
Let’s look at the big picture: Let’s include not just what your costs are now, but also what you’re left with a few months or years down the road. For example, let’s talk about financing a new car.
Over the years, probably more cars have been purchased using a loan than using any other method. Getting a loan is usually pretty easy. The dealer will take care of all the paperwork right there in the showroom, and you can have the car now, whether or not you have enough money in hand. What’s not to like about that?
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You’ve Got to Look at the BIG Picture
What will you have to show for your money after you’ve paid back the money you borrowed, plus the interest on your loan? Answer: only a used car, worth whatever its trade-in value happens to be. Okay, that’s pretty obvious.
Then there’s leasing. Again, look at the big picture. What will you have to show when your lease is up? Answer: Once you turn the car in, you have nothing to show for your money. Contrary to what many people think, leasing is actually the least efficient way to purchase something.
That leaves paying cash. If leasing is a bad idea, and if borrowing costs you all that interest, isn’t paying cash the least expensive way to finance a car—or any other big ticket item? After all, there’s zero interest expense … right?
Again, you’ve got to look at the big picture. How much interest will you be earning on the money you pull out of your account to pay cash for your car? None. You’ll stop earning interest the day you take the money out, and you’ll only start earning interest again very slowly as you put money back into your account. Most people never think about that. That lost interest is what economists call your opportunity cost.
You see, the reality is, you must consider the interest expense every time you buy, because either you pay interest when you finance or lease, or you lose the interest and investment income you could have had if you’d kept your money invested instead.
A Better Way to Finance Major Purchases
We said there’s a better way. And there is. It’s a way you can bypass banks, finance, and credit card companies altogether and become your own source of financing. The key is to have a Bank On Yourself plan.
A Bank On Yourself plan is based on a special kind of dividend-paying whole life insurance policy—coupled with little-known options that supercharge the growth of your money in the policy and make your cash value grow significantly faster than the policies most financial experts talk about.
You don’t have to die to “win” with these policies. You can borrow against your cash value to make major purchases such as a car, a dream vacation, home remodeling, business expenses, or even a college education. And as you pay back your loan, you actually recapture the money back into your plan, so you can use it again and again.
Then, when you’re ready to retire, you can use your Bank On Yourself plan as a safe, guaranteed, and predictable retirement plan alternative.
But what about the interest you stop earning when you draw on your plan to make a purchase? That’s the big difference between taking money out of a savings account and using the cash value of your Bank On Yourself plan: While you use the money in your Bank On Yourself plan, your policy continues to grow just as if you never touched a dime of it—if it’s from the right company.
Really? Is that even possible? Yes, it is. And happy Bank On Yourself policy owners are using that feature to their advantage every day of the year.
The Bank On Yourself strategy solves the problem of having to constantly interrupt the growth of your money when you spend it or invest it. As a result, you could add hundreds of thousands of dollars to your lifetime wealth, simply by changing the way you make major purchases.
Discover What Becoming Your Own Financing Source Can Do for You!
What big ticket item could you finance with a Bank On Yourself plan? A new car? … A new kitchen? … A dream vacation? … Or something entirely different?
Whatever it is, get answers to your questions, and find out how much you could increase your lifetime wealth, simply by using a Bank On Yourself plan to finance major purchases. Our free, no-obligation analysis will show you how you could benefit from a plan custom-tailored to your financial goals and dreams.
Click on the links below to learn more about other key benefits of the Bank On Yourself method: