“ A banker is a fellow who will lend you his umbrella when the sun is shining , but wants it back the minute it begins to rain .”
-- Mark Twain know who are in debt up to their eyeballs and working 60 + hours a week , or stressing over non-paying tenants , or feverishly rushing from property to property , hoping they can sell a property before the balloon payment comes due .
Fire Your Real Estate Banker !
Ain ’ t that the truth ? As we look ten years back on the Great Recession , we can see how much has changed , and how much more has stayed pretty much the same . Home values are up again to 2007 levels . Unemployment is down to pre-crisis levels . The stock market is hitting record highs as I write these words . And yet , not much has changed since 2008 or since Mr . Twain wrote those humorous words - bankers control the money supply , and just when you need the money most , they are there holding all the umbrellas .
I have no problem with bankers , personally . Some of my best friends are bankers !
In fact , as investors we ’ ve been taught to use “ other people ’ s money ” ( also known as OPM ) as leverage to help us gain traction in real estate or to get ahead in our business . Other solutions include getting a business line of credit to buy new equipment , or securing a mortgage on an investment property to renovate and flip a property . These are the standby solutions used by many Americans .
But ask yourself - who are the “ other people ” when OPM is your strategy for leverage ? ( Remember , leverage can work both ways - for and against you !) And what do other people want so badly that they ’ re willing to part with their money and hand it to you ? Were you just handed an umbrella on a sunny day ?
When banks control the environment where your money lives , they win every time . When you control the financial environment in which your money lives , you win . 34 % of all American income goes to servicing debt . If time is money , as the old saying goes , that means a full one-third of the day is spent working as slaves to a bank ! Think of how many folks you
by Mark Willis , CFP Lake Growth Financial Services
“ A banker is a fellow who will lend you his umbrella when the sun is shining , but wants it back the minute it begins to rain .”
-- Mark Twain know who are in debt up to their eyeballs and working 60 + hours a week , or stressing over non-paying tenants , or feverishly rushing from property to property , hoping they can sell a property before the balloon payment comes due .
For many real estate investors , the road to becoming a wealthy landlord turned south toward the highway of serfdom , with their banker holding the upper hand .
Is there any other way ? How can someone who has skill and passion for real estate or their business keep control and a sense of sanity amidst a world gone insane ? Is there a way to break free of financial slavery to the banks ? Yes , it ’ s simple . Fire your banker ! Where is it written that you have to service your debts and pay off a banker before you can enjoy the fruits of your investment ? Who says you have to pay interest on your properties , effectively turning all your real estate assets into liabilities ? Where did we get the idea that banks were the only ones who could provide the function of banking in our society ? You can be your own source of financing - you can rid your financial portfolio of your banker and provide the function of banking yourself .
How ? The answer may shock you . I ’ m talking about a modernized form of dividend-paying whole life insurance . It works like a source of capital , a bank , to provide a guaranteed pool of money liquid and available for whatever you need . The funds you accumulate in your life insurance grow safely and predictably every year , guaranteed - no matter what ’ s happening in the stock market . You can use the equity in your policy like a line of credit to yourself - and you have complete control over how , when and if you pay your money back to your policy . You are in complete control of the entire process . When most people see the words : whole life insurance , their mind turns off . Mine sure did ! I was taught to avoid whole life insurance even in my earliest days as a financial planner .
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