The Minimum Sale

We are going to go through a concept here Referred to as the minimum sale this I did not come up with my own an old mentor taught me this Several years ago and really what it shows is how to get multiple rates of return off of one dollar So you see up here on the board. We've got a life insurance policy Yielding five percent the return could be anything We have a qualified account yielding five percent The qualified account could be a 401k ira doesn't matter and then we have stocks yielding eight percent and If we're not into stocks That could be real estate. That could be our business. We can really change this However, we want but conceptually just remember this I put money Into a policy or put it anywhere. How do I get multiple rates of return off of that dollar? So we're going to pretend or assume that we're paying in twelve thousand dollars per year We take that 12k put it into a life insurance policy. Remember once a dollar passes through a life insurance policy Regardless if I let that sit and grow and earn five percent or if I pull it out It is forever at work for me. There's no lost opportunity cost there So we're going to assume I then borrow out ten thousand dollars I take that ten thousand dollars And I decide to pay it into my 401k or ira So when I make a payment into a qualified account, that is a tax deduction So what happens then we're going to assume that we are in a 30 percent tax bracket What would happen? Well, if I paid in 10k, I'd get a three thousand dollar refund there Now i'm going to take that three thousand dollars and put it into the stocks yielding eight percent So I started with 12k Earning five percent on that i'm going to do this every year 12k per year borrow out 10 Put the 10 in a 401 generate a three thousand dollar refund or whatever tax bracket i'm in that will vary Then take the refund and put it into stocks That will yield me a return of whatever those stocks are earning And then here's the kicker which I really liked when was the last time uncle sam bought you anything Hey guys, steve parisi here If you enjoyed the content you just saw please subscribe like and hit the notification bell for future videos If you'd like more information or to see some custom policies for yourself Feel free to call or email our offices at the contact information below