How to Become Your Own Banker


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How to Become Your Own Banker

  1. 1. Recover The Payments, Interest &Finance Charges You Otherwise Pay To Banks & Finance Companies!
  2. 2.  Recapture the interest and profits you now pay to banks and finance companies! Finance a car, house, credit card debt or college education—yourself! Wake up at the beginning of each and every year with more wealth than you had the year before! Create a tax-free stream of income for life! Eliminate banks and finance companies from your life and gain control over your money! Win the financial freedom game! You can benefit from this strategy even if you typically pay cash for major purchases!
  3. 3. Heres How To Recapture Those Dollars By Becoming Your Own Banker, Plus...Get triple compounded interest on the money you recaptureUse it to grow wealth without riskEliminate banks & finance companies from your lifeGain control of your moneyCreate a tax-free income stream for your retirement
  4. 4.  Unfortunately, theres no such thing as a "magic bullet"—I cant show you how to finance your own car starting tomorrow, because... If you want to become your own banker, theres going to be a "start-up" or "capitalization" phase, just as there is when you start up any new business However, you can become your own banker for your car in just a few years...and once you do, youll never have to throw money away leasing or financing a car for the rest of your life!
  5. 5. The 3 Wrong Ways and 1 Right Way to Purchase A $25,000 Car...To keep this illustration as simple as possible and to compare apples to apples,we are making these assumptions:1. We are not factoring in any down-payment2. We are not factoring in any trade-in value a car may have3. We are not factoring in inflation4. We are assuming you will buy a $25,000 car every four years, from age 40 until you turn 805. We assume a conservative historical interest rate on your car loan or lease of 7.5%. (Do you remember it wasnt long ago that car loan interest rates were higher? In 1997, it was 7.99%, in 1994, it was 8.5%1, in 1991, it was 11%2)6. We calculated the "lost opportunity cost" (LOC)—which is what you would have earned by investing the interest you gave to the finance company, by assuming you could get a 5% return (long-term) on that money, had you put it into a savings account instead7. You pay taxes on the income you earn in a taxable savings account at a rate equal to your combined Federal and State income tax brackets 1 USA Today 2 Kiplingers Personal Finance Magazine
  6. 6. Your monthly payment is $416.00 of which 50000$57.56 is interest (current interest rate on leasingis 7.50%) You do this for 40 years, leasing a new 0car every 4 years.Total Cash Outlay = (-$199,680) -50000LOC [Lost Opportunity Cost]= (-$60,208)(i.e. the lost earnings on the interest you paid Lost the Finance Co. or Bank) -100000 CostYour total cost = (-$259,888) -150000 TotalOther Drawbacks of Leasing: Cash OutlayYou have no equity and you get nothing back -200000at the end of each lease!You typically pay a large down payment. -250000Lease company may make you pay extra fordepreciation, wear and tear, or high mileage. -300000
  7. 7.  Your monthly payment is $604, of which $84 is interest—you do this for 40 years (financing a new car every 4 years) Total Cash Outlay = (-$289,920) LOC = (-$87,489) Your total cost = (-$377,409) You get nothing back from the bank or finance company at the end of the loan! 100000 0 Lost Opp. Cost -100000 Total -200000 Cash Outlay -300000 -400000
  8. 8. You take $25,000 out of your savings account 100000every 4 years to pay cash for your car & you do this 0for 40 years (10 cars total). -100000Remember—you finance everything you buy—you either pay interest to a bank or finance company -200000 LostOR you give up the interest you could have earned on -300000 Opp. Costyour money had you invested it, instead of paying -400000cash for a depreciating asset .Total Cash Outlay = (-$250,000) -500000 TotalLOC = (-$544,797) -600000 Cash OutlayYour total Cost = (-$794,797) -700000If you are disciplined enough to make monthlypayments into a savings account to accumulate -800000$25,000 over 4 years to pay cash for your next -900000car, your LOC will be less, however, youll payincome taxes on the growth of that money in ataxable savings account or money market fund Harness The Incredible Power Of A Strategy That Has Been Around For Over 200 Years, But Which Very FewThose Are The 3 Most Common Choices...But People Or Financial Advisors KnowTheres a Fourth, And Very Intriguing Option... Or Understand... AND ... Heres How It Works...
  9. 9.  Your monthly payment is $604/month for 40 years, the same as you would pay if you took out a bank loan. When you start a business, whether it be a finance company or any other kind of business, isnt there always a "start-up" or "capitalization" phase? Of course there is. And since youre building up your own "bank" or finance company, theres a capitalization phase necessary to do that. In this case, its going to take a 5-year start-up period. After the fifth year, theres enough in your account to withdraw $25,000 and pay cash for your car. Then you start making your $604/month payment to your own "bank", instead of to the finance company. This is a commitment you must make to yourself—to make the same payment directly to your own "bank," just as any outside banker or lender would have required. Remember, theres no such thing as a "magic bullet"—this is what it takes... this is a strategy for practical people willing to make a change in how they manage their finances.
  10. 10. Your Total Cash Outlay over 40 years is $289,920(the same as if you financed your car through an 500000outside finance company), however its all going intoyour own "bank" instead of someone elses (which is Growthwhy its listed in the "positive" column) and... 400000 Over 40It grows to a Total Value of $461,139 in your Plan Yearsin 40* years and... 300000It grows with triple compounded interest, the"Eighth Wonder of the World," because... Total CashFirst, you earn money on the principal you pay in 200000 Outlay--Second, youre earning money on the interest you but goes into yourwould have paid to a finance institution ownThird, youre earning interest on that interest! 100000 "bank"Because you had a "capitalization phase" of 5 yearsto start your own "bank", youre getting the use of 9cars over 40 years, instead of 10 cars in the previous 0examples .* Based on current interest rates and assumptions and individual contracts andwithdrawal features
  11. 11. Now think about much did those 9 cars really cost you?They really cost you NOTHING, sinceyou recaptured every penny in yourown "Bank" and then some!
  12. 12. $600,000.00 $400,000.00 $200,000.00 $0.00 ($200,000.00) Loss Over 40 ($400,000.00) Years ($600,000.00) Growth Over 40 ($800,000.00) Years($1,000,000.00) Option 1 Option 2 Option 3 Option 4 Lease Bank Loan Cash Become Your Own Banker (-$259,888) (-$377,409) (-$794,797) +$461,139
  13. 13. [i.e. from a negative -$377,409 cash outlay through a Bank loan, to a $461,139 POSITIVE GAIN to you when doing it through YOUR OWN BANK!] And that’s just for one car! After 5 Years, Youll Never Have To Go To A Bank or Finance Company Again To Finance Your Car, And...............Youll be recapturing every cent you would have paid to them!The money you recapture will grow steadily in your Plan and you can borrow yourequity in the Plan whenever and however you want, tax-free, and/or you can take it as a tax-freestream of income!If you purchase a car or other item through a bank or finance company, and anunforeseen event cuts off your income and you cant make your monthlypayments, what happens? Theyll come and repossess your car, foreclose on yourhome, send the collection agencies after you, ruin your credit rating... and in generalmake your life unpleasant.However, when you use your own "bank" to finance purchases, and your incomestops for a few months, you can simply skip some payments or pay less for a while—itgives you flexibility and peace of mind and control over your own money.
  14. 14. 1. Even if finance companies are still offering low interest rate loans, youll come outahead by taking the rebate instead and financing your car yourself.2. Unlike a taxable savings account, you have access to the gains on your moneyanytime you want—tax-free!3. You can take it as a tax-free stream of income at retirement, and—unlike a pensionplan—there are no government limits on how much or how little you can take each yearand no early withdrawal penalties!4. You dont have to wait until you retire to get your hands on your money!5. You had the use of 9 cars over those 40 years and still increased your wealth by$461,139!6. Imagine what happens if you do this with 2 cars instead of one!
  15. 15.  Your mortgage Credit card debt Funding college education for your kids or grandkids Other small or large purchases you would typically finance An equity line of credit you can use to finance things you want to buy, or for an emergency... with the interest you would normally pay to a financial institution going into your own pocket instead AND ... Business owners with C-Corporations Using this Concept, you can purchase the equipment yourself and then lease it to your corporation...and get the interest deduction and depreciation...and youll recapture all the interest you were paying to the finance company!
  16. 16. 1. You can continue to give that money to banks, finance orleasing companies, never to see it again, or...2. You can pay cash and give up all the interest you wouldhave made on your money had you invested it instead... OR..................................... 3. You can put all that interest into your own pocket (viayour Own "BANK") and never have to go to an outside sourcefor financing ever again! Be honest now, and think about it ... which of the above options makes the most sense to you?