Creating A Leasing Company

Becoming your own banker really requires a shift in mind set. We’ve been programmed for so long with how things work that it takes awhile sometimes to reprogram ourselves to truly think like a banker would. The first time you hear about a 101 Plan, you’d probably start thinking about how you are going to use your Plan after capitalizing it.

For most people, that starts with paying off high interest credit cards or even car loans, but after diligently practicing the concept for some time you maybe begin to notice that the cash values in your policy will increase over time and at some point you may not have any more personal debt to finance, this is a wonderful feeling and perfect time to really start thinking like a banker would.

You see, in order to make money, banks and finance company must first have capital then they lend that capital to somebody else who needs it, for a fee. When the cash value in your policies begins to increase beyond your own needs, you can follow the lead of the finance companies by lending it out to others, for a fee.

For example, assume you were a dentist that wanted to purchase a new piece of equipment that cost $100,000, how would you pay for it? If you’re like most of the dentist who aren’t trained to think like a banker, you likely end up leasing that equipment. The leasing company would buy and own the equipment then lease it to you. Your monthly leased payments will be structured so you would end up paying back the original purchase price of the equipment plus some profits for the leasing company for letting you use their money to purchase that equipment. Depending on how the lease is structured, you would either own the equipment at the end of the lease period, or you could buy it at some agreed upon price. If you ever failed to make your lease payments, the leasing company could take back the equipment and lease it to another dentist.

With sufficient capital in your policy, you could actually start your own leasing company and began purchasing and leasing equipment to your own business or to other business owners. Remember, as the owner of your permanent life insurance policy, you have the contractual right to use your cash value for anything you want or whenever you want. This means you can buy equipment and lease it out to any business in any industry you want, whether it’s: x-ray machines for doctors, backhoes for builders, trucks for trucking companies, micro-loans to start up entrepreneur, like your children, or anything else. The key is to make sure that you personally are the owner of the policy, not the corporation who will be leasing the equipment from you, even if you are the sole owner of the corporation.

You will personally then purchase the equipment and lease it to the corporation ensuring to charge a high enough lease payment to cover the cost of the equipment. If you’re the owner of the corporation, who’s leasing the equipment, you can receive an interest deduction for the policy loans you took out to purchase the equipment. Since the loans are for a business purpose, plus you can depreciate the trucks over the reasonable time, if you structure the lease properly, you should definitely meet with the qualified professional to help you structure the lease agreements properly, develop any necessary amortization schedules, determine whether you should be adding more policies to help you establish separate entities, should that be necessary. Ultimately, with everything properly structured, you can make a very good living during retirement by just leasing out equipment to businesses.

By controlling the banking process, you’ll soon be in a position to stop supporting the employees and share holders of banks and finance companies through all the interest you’re paying to them and instead use that money to support you and your family, becoming your own banker will prove to be one of the wisest decisions of your life time. Contact a True Financial Age Advisor to learn more about this powerful concept.