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Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
Controlling The Banking Equation
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Controlling The Banking Equation

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Private Family Banking

Private Family Banking

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  1. Your Investments<br />Controlling The Banking Equation <br />Ron Doerksen - SUSTAINABLE FINANCES<br />
  2. How banks make money<br />
  3. The Process<br />Seller<br />House<br />Car<br />6%<br />7%<br /> 3%<br />BANK<br />YOU<br />100K<br />Dealer<br />8%<br />11%<br />Visa<br />House<br />Remodel<br />3%<br />Debt<br />Consolid.<br />Contractor<br /> 4%<br /> 5%<br /> 8%<br />______<br /> 20%<br />
  4. Getting In The Drivers Seat…<br />By becoming the “bank” you recapture <br />not only the cost of the purchase, <br />but the interestnormally paid to the bank <br />and other financial institutions as well.<br />
  5. Capitalizing the bank<br />
  6. Key Requirements<br />Safety<br />Liquidity<br />Return %<br />
  7. What Can We Use For A “Bank”??<br />Let’s look at some options<br />
  8. Grandma’s Feather Bed<br />Safe: More or Less Liquid: Very ROR: Nope<br />
  9. Certificate of Deposit<br />Can You Bank On It?<br />Safe: FDIC Liquid: Penalties ROR: Small<br />
  10. Real Estate<br />Money In YourWalls<br />Safe: Less and Less Liquid: Not Very ROR: Hmm! <br />
  11. “Personal Bank”<br />This type of account offers the following:<br />Tax Deferred Growth<br /> TAX FREE income<br />Access to the money (liquidity, use and control)<br />Safety<br />Unlimited Contributions (no IRS involvement)<br />Competitive rate of return<br />Creditor Proof<br />Passive Income (for the Golden Years)<br />Ease of transfer at death<br />No Probate<br />Earns money even when loaned…..this is HUGE!<br />Stock Market<br />Presentation<br />
  12. A product as old as dirt!<br />InterestBearing<br />Dividendpaying<br />Permanent<br />Whole life<br />Insurance<br />
  13. Business Owners<br />The banking system is wonderful for personal use, but for business owners it even gets better.<br />Reduce taxable income<br />Reposition money from the business to personal on a tax advantaged basis<br />It may be better than a qualified plan i.e. IRA, 401(k), profit sharing plan and so forth.<br />Recapturing ALL the costs and interest associated with purchases used for your business.<br />All without dramatically changing what you normally do in business!<br />
  14. Business loan:<br />Let’s look at a business loan for your business.<br />You loan your business $100,000 at 12% interest.<br />You are in a 35% tax bracket.<br />This is an interest only loan for ease of illustration<br />
  15. Traditional verses Infinite Banking<br /><ul><li>Traditional</li></ul>Borrower<br />Depositor<br />Bank<br />LOAN<br />REPAYMENT<br /><ul><li>IBC</li></ul>LOAN<br />REPAYMENT<br />Business<br />Your “Cash Cow”<br />LLC<br />Sub-S<br />YOUR BANK<br />(INSURANCE POLICY)<br />YOUR<br />Family<br />LOAN<br />$ @<br />12 %<br />Loan $<br />@ 6%<br />
  16. Tax Reduction Strategy – Interest ONLY Loan<br />YOUR BANK<br />(Insurance Policy)<br />Family Bank<br />Business<br />LLC<br />S-Corp<br />$100,000 @<br />12% interest =<br />$12,000 per year in interest<br />$12 K<br />$6 K<br />Schedule B $ 12,000<br />Investment income<br />With IBC<br />K – 1 is reduced by <br />($12,000)<br />Increase taxes ($4200)<br />$6,000 Interest Paid<br />To YOUR BANK (Insurance Company)<br />Schedule A ($6,000)<br />interest expense<br />Taxes reduce by ($4200)<br />Tax Deduction ($2,100)<br />“Opportunity Funds”<br />$ 2,100.00 tax savings<br />+$12,000.00 paid from LLC<br />$14,100.00<br />Deposited into your bank(s)<br />Effect on 1040 ($2100) Tax Reduction<br />
  17. Paying Cash<br />Many business owners pay cash for equipment to avoid finance charges, which<br />is the best alternative until the IBC method is understood.<br />Question:<br />If I was going to sell you stock in a company at $100.00 per share and then<br />guarantee you that in 5 years it would be worth $40.00 per share,<br />HOW MANY SHARES WOULD YOU BUY?<br />
  18. Paying Cash<br />Paying cash for depreciating equipment is like<br />buying stock that is guaranteed to go down. Not only does paying<br /> cash take away opportunity, but in addition <br />the equipment will go down in value……guaranteed!<br />
  19. Your<br />Family<br />Bank<br />The Alternative…<br />BE THE BANK:<br /> Recapture the total purchase price<br /> Recapture and pay yourself the interest<br /> Deduct and depreciate the equipment<br /> Reduce your overall taxes<br /> Use the funds over and over again<br /> Redirect funds for retirement use<br /> Creditor proof your assets<br /> Be in control<br />
  20. Two Businesses<br />You should be involved in TWO businesses…..<br />
  21. Two Businesses<br />You should be involved in TWO businesses…..<br />Whatever it is you do for a living….AND….<br />
  22. Two Businesses<br />You should be involved in TWO businesses…..<br />FINANCING whatever it is you do for a living!<br />
  23. Two Businesses<br />You should be involved in TWO businesses…..<br />And of two the banking is the most important to understand!<br />“The key to wealth is the <br />Banking business.”<br />
  24. Again…..Do exactly<br />What you would normally do <br /> in the course of Business<br />But add the twist…..<br />this time Be<br />the Bank!<br />

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