All Forum Posts by: George Carnicle

Has anyone looked into Asana? I use it for project/task management at my non real estate related job and am planning on using it to stay on task in my real estate endeavors.

@Thomas Rutkowski I was indeed referring to that statement.

Please correct me if I'm wrong. Your access to your cash value is limited by the outstanding policy loan(s) you have. So if you have 50k of cash value and an outstanding policy loan for 45k you will only be able to borrow, withdraw 5k or leave the DB minus 45k to your beneficiary. 

I find it odd that you don't have a DB. I was under the impression that you were discussing functionality of a whole life insurance policy (which would have a DB).

@Thomas Rutkowski I think what you meant to say was you will have the death benefit minus the cash value and the asset you purchased with the policy loan.

@David Lewis Thank you for the detailed response. I thought it was helpful!

I'm an "IBC" policy owner (bought it in 12/2009) and became an agent in 2014 with the goal of "helping" people use this awesome concept and financial vehicle for themselves. I sold my first policy 12/2015 and almost sold my 2nd this month but ran into an issue which is now making me question how good a "banking" policy really is.

Through doing research for my potential client, I figured out that taking policy loans "hurts" the policy owner on 2 ends. The annual dividend is reduced (direct recognition company) due to lower cash value and interest owed and the interest the company charges for the policy loan flows back into the general fund vs increasing the gross cash value. 

I'm coming to the conclusion that buying a whole life policy is great for points 1-7. Using it as a financing source for 6+ month investments/purchases/... is not a smart use of those funds. Were the interest to be credited to the policy owner it would change everything and make owning a whole life policy(s) a no brainer for everyone.

I would love to hear your thoughts!

PS

Welcome to real estate investing in Jacksonville, @Scott Dorsett !

I want to echo what Lennie said: "Listen to the Podcast". In my opinion, it's the most efficient use of your time while commuting and one of the best investments in yourself you can possibly make. I'm a fan of the listen to it through from the beginning method, Brandon and Josh will grow on you.

@Michelle Elsaid has a great list of tips for buy and hold! Much of that is great for flipping too. I would add to it that you should find your niche area and property type. That will help you determine how great a deal really is and pull the trigger much quicker as a result. I believe it is important to know the neighborhood a property is in. Not all of Jacksonville is very flip friendly.
What is your full-time job? I highly recommend you try to leverage those job skills in your real estate investing.

@Laura Richards Could you give a little more detail on this tech startup? Do they have a website?

@Mark Creason I'll definitely elaborate on my disclosure from earlier in the thread. I am not affiliated with Paradigm Life in any way. I have colleagues who know the owner/team. I am a part time life insurance agent and full time financial analyst for a top 15 Fortune 500 company. 

I owned an optimized whole life policy for 4 years before deciding to become an agent. Yesterday was my 6 year anniversary of being a policy holder and I have seen it behave exactly as illustrated. 

I asked who they worked with out of curiosity that's all.

@Steve Vaughan It sounds like you've heard about whole life insurance as sold by traditional agents. The policy that this thread is discussing is an optimized whole life policy which focuses on "rapid" cash value buildup so those dollars can be used as the owner sees fit.

@Dondi Gerber I'm very sorry for your experience! It sounds like there were some failures on multiple levels. :( Who specifically were you working with at Paradigm Life? Could you also tell us what product you actually bought vs what you thought you were buying?

Hi Joe!

Thank you for serving and  good luck with your degree! I wish I had studied engineering when I went to school so I'm a little jealous!

Just to clarify it sounds like you are moving from Jacksonville, FL to somewhere in Michigan? I got a keyword alert for Jacksonville so I recommend being a little more specific on where you're moving to. That should help get you the right kind of responses!

Best of luck to you!

Real life personal story
I lost my index finger in a table saw accident on 6/12/15. In anticipation of the medical bills I reached out to my agent via email on 6/22/15 at 6:39PM to request a policy loan. On 6/24/15 my loan was in my personal bank account to be used as needed. This has been the fastest turned around I've seen. My previous loans took between 3-5 days from the time I requested the loan until it was in my account. In my opinion this is pretty liquid!

My return on investment for just the month of November was 103.9%. I paid in $213.04 and saw my cash value grow to $221.43. My total net return as of today is 81%. This doesn't take into account my potential dividends for 2015 (they will be paid out in Dec). Also my policy was setup to break even in 10 years vs the 6-7 the one you're looking at. Deferring the break even period gives me a higher death benefit and cash value down the road. It's a tweak I made with my agent based on my preference at the time.

@Dmitriy Fomichenko I agree with you, investing in whole life insurance is a bad investment. To give you a very rough high level view of what is being discussed here. A whole life policy is being modified to behave like a compounding savings account with a guaranteed death benefit. The fact that a whole life insurance policy is being used is really secondary. The point is to use the money that is saved into a policy to finance actual investments. The policy owner has multiple benefits:
- the obvious death benefit
- a contractually guaranteed cash value that can be used at the policy owners discretion
- potential dividends (not guaranteed) which will be used to buy more paid up life insurance and compound over time while the policy is in force
- potential bankruptcy protection
- tax benefits
And more

Congratulations for digging a little deeper on a topic that seems to get dismissed so quickly! 

I bought a whole life policy optimized for banking in 2009 after doing extensive research. I started using it within the first year and don't ever intend to stop. I became an agent in 2013 after being a client first and enjoy helping my clients on a part time basis.

My policy will be "breaking even" on the guaranteed side in 3 more years but due to my using it (taking loans and paying myself back with interest) and the dividends I've already realized I'm ahead of schedule.

The company I bought my policy through and who I now primarily use to write new business through charges a fixed 5% annual interest rate on policy loans and all of that interest goes back into the policy to be loaned out again.

If the policy is optimized for banking you should be seeing immediate cash value from year one and your cash value should equal and then exceed your cumulative premium payments 5-7 years after your policy begins. Make sure that you start out with a manageable payment structure that you can maintain for that first 5-7 years so you don't have to worry about lapsing/surrendering your policy and walking away with less than you paid in. Once you've owned and used your policy for any length of time you will realize that it will never be in your interest to surrender the policy.

If you're interested, I would be happy to give you a second opinion to help you make sure you're getting the best possible option for your situation. Just shoot me an email directly!