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A Savings Vehicle That Makes All the Difference

Missed Fortune – Get Off the Government’s Sinking Ship & Board Your Own Lifeboat

Posted on | October 4, 2009

It’s time to save yourself because big government can’t. Politicians are experts at finding bad news, but they’re out of touch with reality. Innovations and technological breakthroughs are happening all around us every day. The innovation, resilience, and responsibility of the American people is what will save us from our current troubles, not more government spending and stimulus packages.

It’s time to jump off the government’s sinking ship and board your own lifeboat instead. But how? By being wiser about your financial strategies.

There are three ways to save money:

  1. Taxable savings accounts (mutual funds, cds, money markets, etc.).
  2. Tax-deferred accounts (IRAs, 401(k)s, etc.).
  3. Tax-free accounts (properly structured and funded life insurance contracts). These offer full access, no penalties upon withdrawal, they grow tax-free, they can be accessed tax-free, and they transfer tax-free income to your heirs upon death.

It’s critical to understand the time value of money to realize how important taxes are to the equation. A dollar doubling every period for 20 periods grows to $1 million if it grows tax free. However, if you’re in a 25% marginal tax bracket it will only grow to $72,000 if it’s taxed during growth. Shelter your accounts from taxes to harness the time value of money.

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*Life insurance policies are not investments and, accordingly, should not be purchased as an investment

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