All Forum Posts by: Nick Cuttonaro

I'm late to the party, but can offer some value on this topic.

I'm paying premiums on (substantial) whole life policies for myself, my wife, and twin boys who are infants right now.

Here's my rationale on why it's a great for my situation and other's in the same boat.

1) Death Benefits. No matter what happens to a family member, there's a foundation in place to ensure financial security and stability. At the very least, term life insurance is useful and disability insurance is important too if you have dependents relying on your income. 

2) Guaranteed Insurability. This was very important having out of the womb for my boys who are now 10 weeks old. Certain medications and diagnosis of certain illnesses could prevent future insurability. They have the freedom to pursue a high-risk profession if they choose (hopefully not!) and always have ample coverage in place.

3) It's a hedge against untimely and unfavorable market conditions when I'm at retirement age. Being forced to take distributions on an IRA when I reach a specific age in my twilight years could be horrible if the market is dropping. I'm not a fan of most retirement accounts for this reason nor liquidating income producing assets for cash. Access to liquidity much down the road is a perk.

4) If my wife were to die, I'd need the death benefit to cover the negative tax implications of being taxed in a higher bracket as a single-filer, losing half of the new standard deduction, and surrendering all of the real estate investing tax benefits we’ve been utilizing jointly as my wife is classified as a Real Estate Professional. Plus, I'd probably need 24/7 help at home and I may just want to take a couple years off from work to spend time with my boys.

5) With respect to the cash value accumulation in these polices (much later down the road) it can be used to fund premium payments, distributed to pay things like property taxes, cover some living expenses, used to buy real estate, or anything else that perks my interest.

6) It's a component of a portfolio of assets I've accumulated over the past decade which supports businesses, real estate, stocks, and other stores of value. The guaranteed returns from whole life contracts offer protection against future downside risks within other asset classes.

7) In my later years, having my personal contract in place should motivate me to take great care of my mind, body, and spirit. Every year longer I live the cash value compounds exponentially.

8) Premium payments are high, no doubt about it. However, 25% of the premium costs right now are covered by rental income profit.  Within the next 5 years, 100% of the premium costs will be paid by tenants.

9) Everyone in my family was at a "sweet spot" when the contracts were obtained. My wife and I are in our early 30's, perfect health, hit high income years, have other investments and reserves, etc.  For the infants, the premiums are dirt cheap compared the death benefit and a lifetime of compound interest.

10) I'm setting my family up for success over future generations and it feels good knowing fortunes can be created and passed down.

I'm not a life insurance salesman, just a business owner who loves buy and hold single family rental properties. Whole life contracts are just another resource in my financial toolbox and a great tool which can be used or leveraged in so many different ways.

Takeaway: Create a scenario where tenants cover premium costs on these contracts and you can create more wealth for you and your family than you ever thought possible.

I'm from Long Island, NY and have been down here 1.5 years. Closing on my 4th investment property in the past year. Expect astronomical cash-on-cash returns if you know how to buy low and rent high. Taxes are so low in comparison to NY or any other markets. You'll get the appreciation you're looking for to. In all seriousness, you can set the bar much higher in this market with appreciation and cashflow expectations. It's a fantastic market! 

Fantastic deal, doesn't get any better than that. Well done!

Not only does the property look fantastic (I'm sure your tenants will love living there) but it will stand the test of time over the years. This a great investment. Low risk, big returns.

I would invest in Bitcoin, possibly other crypto currencies if you're brave. That's what I'm doing with some free cash now.

@Patrick Gray -  Not going to sugar coat this, you need to get your bankroll up. It's a simple formula to establish stability so that you can pull the trigger when you're ready. 

If I were in your position, I'd get a job in real estate to become as knowledgeable as possible so you're both competent and confident to do your own deals when you're ready. Earn and expand your income while learning the industry.

The only thing to focus on now is increasing your income to pay down debt, establish reserves, and allocate those funds toward investment when you're ready. Be frugal and stay hungry. Good luck!

You are not alone @Tiera Taylor. Greenville, SC is a great place to call home as well as invest. 

Any book by Grant Cardone will help you in business, real estate, and help you achieve more in your personal life than you ever thought possible. 

Taking a loan out to cover the $15k or $28k program costs (when you don't have it) would be a poor decision. You're going to need to get your bankroll up anyway to invest in real estate so holding on to all the cash you can get your hands on is important, before you start putting it to work in an investment.

You may be getting all the information you think you need from this program, but you'll be in a worse financial position potentially putting you in a scenario where no lender will give you a chance. Potentially, it's a lose-lose scenario and you're looking for a low-risk win!

Best Option: Work in the industry and get paid while acquiring knowledge along the way.

If you really want to become a real estate investor work as an agent, a loan officer at a bank, with a hard money lender, at a property management company, or as a project manager for a local real estate investor. With on-the-job training and working professionally within the ecosystem, you'll be in a much better place to take on deal of your own when you're ready.

Killer deal, Mario. My wife just reached out to you on this one. I'm not surprised it sold, looking forward to seeing future deals you come across. Thanks!  

@Anup Gazmere - Keep stacking your bankroll and try working along someone in the industry. (i.e. realtor, mortgage broker, investor, etc.) If you can get paid to learn and be really helpful to those in your community who have experience you'll be in a strong position to make a move when you're confident to pull the trigger on a deal you really want. Mentorship through that route will help accelerate your path to success.

The desire to make money is the first step and you're ahead of other 19 year olds having $10k saved up and taking interest in real estate investments. Pat yourself on the back, well-done!

Steps / Advice:

1) Keep making and saving money. The more income you can show, the better. Work (3) jobs if you have to. Getting really good at being able to "turn a buck" in this world is one of the most important skills you need to succeed.

2) Establish smart / strong credit now. You're going to need it for financing if you're not doing all-cash deals. Creditworthiness matters.

3) Be mindful of debt. You mentioned you're a college student, hopefully you won't graduate with too much debt and the education will put you in a position to make a serious income. If that's not the case, think about what you're doing and the long-term repayment obligations you might be facing.

4) Read Books / Audio Books. Get smart, get motivated, and invest in yourself. No matter how old you are or how smart you think you are, there's always something new to learn. Stay curious!

5) Resist buying things you don't need, spending like other 19 year olds spend their money, and making stupid decisions. Ditch the friends who are not going the direction you see yourself going.

6) Keep believing in yourself. Life doesn't slow down, keep pushing forward no matter what.

7) Don't be afraid to ask for help. You become the sum of the questions you ask.

Great first post. Keep thinking big, setting goals, and staying hungry. This is a great community to learn from so you're in the right place. Good luck!