Albert Einstein, the renowned scientist and mathematical genius once said;
There is nothing new under the sun, only things which we have forgotten.
As an example of this I will tell you a couple very short stories.
In American farm country, when we are talking about a farmer who died, we don’t say he died, instead we say “He Bought The Farm”. While growing up I thought this saying was peculiar. And while researching wealth building strategies I learned that while He bought the Farm meant that he died, it also meant that he literally bought or purchased the farm.
Historical Background
According to my sources, in American there is a economic practice which predates the Civil War in the 1800’s, whereby many or most farmers would buy a Permanent or Whole life insurance policy. Which was literally one insurance policy they kept for their “WHOLE” or entire life.
But the policy wasn’t just about having a death benefit, it also provided a life benefit. Something the farmer used while he was alive. The secret is that a Whole Life Insurance policy contains a savings account, where money earns compound interest tax free. The Life Benefit was that the farmer could borrow money from the insurance company using this savings account as collateral. This savings account was called the “Policy Cash Value”.
According to my sources, the farmer took out loans to buy seeds, fertilizer and equipment. And after he harvested and sold his crops, he would pay back the loan, and then use it again another time. The cash value grew every year tax free and was a useful savings account to get loans from quickly with no credit check. After all the loan was secured by his cash value and he paid interest, so the approval was automatic.
How the farmer bought the farm
So the farmer enjoyed this life benefit all his life and when he died, the insurance company paid the insurance policy death benefit amount and the remainder of the cash value to his beneficiary. It was then that the farmer literally bought the farm.
How did Albert Einstein get into the conversation?
This is an example of something Albert Einstein said wasn’t new, but was forgotten.
However certain wealthy individuals know about it and use it as a the wealth building vehicle or as a source of capitol for their business.
Walt Disney, the founder of Disneyland
Yes, Walt Disney apparently had trouble convincing Banks that people were going to visit a Theme Park for the love of a mouse and a duck. So he borrowed money using the cash value of his whole life insurance policy to finance his Theme Park called Disneyland when the banks wouldn’t give him a loan. Now Disneyland is world famous.
Ray Kroc, the owner of McDonalds Restaurants Chain.
Yes, Ray Kroc had trouble getting loans from banks to expand the chain of restaurants called McDonalds threw real estate acquisitions. It seems that banks thought a restaurant chain with a clown mascot called Ronald McDonald was a silly idea and refused to loan him money. So he borrowed money using the cash value of his whole life insurance policy to finance his business and eventually used a loan to buy out the founders and owners the McDonalds brothers. So he became the sole owner of the McDonalds Hamburger Fast-food chain. Now McDonalds is world famous.
Bank Owned Whole Life Insurance
You probably know that banks like money. Probably almost as much as banks love Fractional lending, the basis of most western banking systems, which makes banks rich. Did you know that banks apparently also love using the “Life Benefits” of “Whiole Life Insurance”??? In fact, bank owned life insurance, also known as BOLI, is a huge part of the life insurance business. How big ?? A recent filing of a public statement of financial health for a certain American Bank listed 23 billion dollars of cash value in bank owned life insurance as an asset in their quarterly statement in 2016.
Yes, there are as Albert Einstein said many things under the sun, which we have forgotten. So I am here to remind us of this wealth building vehicle called Whole Life Insurance. The life insurance with both life and death benefits.
Knowledge is power, power creates wealth and wealth provides you freedom.
Free yourself.
✍🏼 by Shortsegments.
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