All Forum Posts by: Mike S.

Quote from @Chris Seveney:

 I have found the youtube videos by Steve Parisi at IBC global to be educational. I am a numbers guy and thats what he provides is data. Some others I have seen like to manipulate numbers to make certain policies that generate more income for them look better.

I agree, I like his videos that are going in depth about how to optimize whole life insurance for cash value. However, he barely mention Index Universal Life, if only to denigrate them as he explain he does not have enough experience with them.

@Thomas Rutkowski has a great educational website and Youtube channel covering both WL and IUL, with probably more focus on IUL. He also has more content towards real estate investor use of overfunded permanent life insurance policies.

Entities are created to protect you against two types of liability:

Inside liability: something is happening within your entity (slip and fall from a visitor or tenant, mold health issue, ...).

Outside liability: something is happening in your personal life (you are at fault in a car crash with major injuries, ...)

Not all entities are created equal for liability protection. Most LLC will protect against inside liability. So if you put a real estate property into an LLC, if a tenant sue you and win, the maximum at risk is all that is within that LLC, but your own wealth outside this LLC or in other LLC will not be impacted. But if you put all your four properties into a single LLC, any event in any of them is risking all four

Outside liability protection however varies greatly by state. Florida has charging order protection for multi member LLC but not for single member LLC. So even with a single member LLC in Florida, if you are sued personally, all your assets in Florida LLC are at risk.

We have in Florida a great tool called Land Trust that offer inside liability protection (but not outside).

In your situation I would suggest that you open a Wyoming holding LCC (WY has charging order protection even for single member LLC). Each property will be placed in its own Florida Land Trust, the WY LLC being the beneficial owner of the trusts. You can be the trustee of the land trusts or create another WY or NM LLC as trustee if you want to get anonymity.

You will have one bank account for the WY LLC that will collect all rents.

Creating an LLC is easy, but you need to know what kind of LLC you want (single member/multi member, member managed/manager managed). You would also need a registered agent if you can't receive legal service during business hours or don't want to disclose you private address. The operating agreement on the other hand is extremely important as it will be the major piece that will maintain your liability protection. Legal zoom templates are highly inadequate for asset protection. I would recommend spending some money on an asset protection attorney to draft them.

To educate yourself on this topic, I strongly recommend you spend some time watching the excellent videos on Clint Coons Youtube Channel. After years of studying the field, I am more than 95% in agreement with his advice.

@Todd Goedeke

If you can guarantee me a 20% return with no risk I will give you money to invest…

I made some 500% return in the stock market in some commodity stocks. But it is risky and I lost money on other bets.

I still have a permanent life insurance policy as foundation where all my cash flows in first… It acts as a multiplier of the returns I am making in real estate, and also add a layer of safety.

Quote from @John L Daly:

I recently pulled out of 401k and started putting into my whole life insurance and just wondering if that's the right move 

Unless very special circumstances, I would not withdraw from a 401k to put the money into a properly designed permanent life insurance. I may not put anything anymore in a 401k or IRA, or continue to put some in addition to the life insurance. It all depend on each specific situation.

However, what is most of the time discouraged is to surrender or cancel your life insurance policy as you have paid upfront the fee for a life insurance that was supposed to last for your whole life. If you surrender it before that, you have wasted the fee and it was a very bad financial decision.

Permanent life insurance is a great product for long term goal. It is however a complex product and you need to learn how to use it properly to maximize its benefit. The front loaded commission make is usually less appealing in the first few years, but after five to seven years, it should start performing better than some other options. Also, you can easily use the cash value of your life insurance as collateral for a loan that you can reinvest in other investments, basically making your money work at two places at the same time.

While you may get better return with a 401k/IRA stock investment, with a wholelife you will get steady moderate return with no negative years, with an Index Universal Life you with get variable return with a long term IRR in the 7-9% range, and also no negative years. Like a Roth IRA/401k, the life insurance is tax free if used properly. And during retirement you can draw approximately 8% per year for the rest of your life while with a IRA/401k it is recommended not to draw more than 4% to make it last 30 years.

Quote from @William Joel Idleman:

I don't like the fact that most policies keep your cash.  For example, if you die and you have a death benefit of 100k and have paid up to 60k.  They will give you the 100k and keep the 60k.  Generally, a better return on your 60k can be found in the marketplace.  This is why you hear the phrase, "Term insurance and invest the rest."  Advisor will show you what the cash value policy costs vs term life insurance.  Then they would show you market average return on if you invested the difference.  I've yet to see a cash value policy give a better return than the "Term and invest the rest" strategy.

You are an insurance agent and say that the insurance is keeping your cash when you die. I don't know where you learn that, but I would be concerned to be one of your client as you obviously don't understand the product you are licensed to sell.

IUL are great wealth multiplicator. However it is a long term game. Canceling your policy now will make it a waste of money and your will lose all the premium you put in.

The first few years you can expect to have a negative return, but later on you will be way ahead. Especially if you start using loans secured by the cash value, you can make your money work for you at two places at the same time.

My only regret with IUL is not to have started it sooner...

Not the cheapest, but I had good service with https://dascorplumbing.com/

@Alexandria Long

There are a few companies that are usually recommended for maximum overfunded Whole Life insurance and a few others for Index Universal Life insurance.

The choice will depend on your age, health, amount and duration of premium you want to make, level of flexibility in payment, type of loan expected, return strategy offered, …

You will need to talk to an agent who is well versed in these strategies who can listen to your needs and explain to you the different options so you can make an informed decision.

@Suresh Jersian

The best ressource I have found is the Clint Coons YouTube channel.