Set up a small cash reserve in a savings account. Place the extra cash-out into an Indexed Universal Life Insurance program making a non-taxable gain of about 8.27% with a 167 year old insurance company with 1.,59-1 asset to piolicy ratio.
In about 11 years, you'll have twice as much money and from the beginning you'll have a death benefit and can take out the surrender value anythime you want.
Equity has no loan-to-value, it's not very liquid, hard to take out when you need it (unemployed, injured, or elderly).
In short, you'd be paying about 4% for the money after the tax deduction and making about 8%. You will have set up your own personal arbitrage. You will enhance your retirement and you will own your own bank.
Huh? 6 months ago I was getting 10 calls a week from lenders begging me to cash out my equity. No fees, below market rates, 125% to value, etc. I realize that things have changed but to state there is no loan-to-value or liquidity is just not correct.
Secondly, where does one find anything yielding 8.27% after tax, 12.7% at marginal rate of 35%, now that Madoff is going to prison?
“Set up a small cash reserve in a savings account. Place the extra cash-out into an Indexed Universal Life Insurance program making a non-taxable gain of about 8.27% with a 167 year old insurance company with 1.,59-1 asset to piolicy ratio.”
This sounds suspiciously familiar. I had a Prudential life insurance policy. They talked me into buying a second policy with the earnings of the first.
Churning I believe it was called. The class action settlement wasn’t very much.