It’s a rite of passage for many of us. When you were young, maybe your parents started a savings account for you. When you got your first job in your teens, you started depositing money. And wonder of wonders, you took money out to buy a better phone, clothes you didn’t hate, or gifts for your friends – whatever you wanted!
Hopefully, mom and dad instilled in you that it is important to save more than you spend. You built up a little nest egg and then had a decision to make: college or right out into the workforce. If you choose college, you did everything possible to avoid debt after college. Hopefully (again with the hope!) someone sat you down and talked to you about how to keep student loan debt as low as possible.
You get your first job out of college, where they tell you to contribute to the 401k/Roth account. To keep up with car loans, student loans, crazy rent prices and some kind of excitement on the weekends, you start using credit cards to make up the difference between take-home pay and the cost of the life you want to be living.
At this point, you start to think about budgeting. If you are lucky, your parents instilled the idea of budgeting in you a long time ago – but if not, better late than never!
This is the frontline of the battle. If you can’t manage to live on a budget it will be very tricky to build wealth. We know that, but managing our own expectations around what we want versus what we need can be a real challenge.
So maybe you use an envelope system – a “pay yourself” savings envelope, an envelope for fixed expenses like rent/mortgage, car payments, an envelope for tithing and other charitable giving, etc. Or you outline a budget on Excel or some other spreadsheet platform. However you do it, a basic budget is a great start!
The problem we find in our work is that this standard way of banking does not go nearly far enough in helping you reach your goals. With this common way of banking, your money isn’t really working for you. It’s working for the bank.
That’s why we like to think about banking in an uncommon way. We like to see the money you are saving act as an economic engine for you, rather than just sitting in an account and earning pennies while the bank is leveraging it the way you could be doing.
One of the ways we make money work for our clients is by using cash value whole life insurance policies for uncommon banking. For the money you are looking to save and grow, this is really an excellent tool. With a cash value whole life policy, you can take out a loan against that cash value. With that loan, you can purchase assets that produce cash flow. All the while, you are using the power of compound interest to grow wealth, so you can create more cash flow, and so on and so on. It’s a virtuous circle of positive results that can lead to greater financial freedom. It creates so much more than a trickle of a return that you are going to see with a small, interest-rate, savings account.
Standard banking has its place, but don’t limit yourself to those parameters, where the entity that holds the money reaps the most rewards. Find out more about uncommon banking by reading this article and contact us today to learn more about how we can help leverage your assets more effectively through uncommon banking.