Be Your Own Bank
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- Опубликовано: 15 июл 2024
- Intro to SBLOCs ▶️ • Intro to SBLOCs
In this video, I give an overview of how the Be Your Own Bank investment strategy works with whole life insurance policies. I talk about why I don't like the traditional strategy using life insurance and teach you about a better way to accomplish the same tax and investment objectives with SBLOCs.
Buy, Borrow, Die strategy video - • Never Pay Taxes Again ...
SBLOCs overview video - • Intro to SBLOCs
Video Contents
00:00 - Be Your Own Bank strategy overview
03:10 - Whole Life Insurance
12:38 - SBLOCs
⚠️ Exercise caution before using this strategy. Do your own research and make sure you fully understand the risks you are undertaking!
💡 I do not work with clients or offer any consulting services. If you want to learn more about the best tax and investment strategies, subscribe to my channel and check out these courses ▶️ sharonwinsmith.com/courses/
The information provided in this video is owned by Winsmith Tax LLC and is solely for informational and educational purposes. It is not intended as investment, legal, or financial advice. Always consult with a professional familiar with your unique situation, or conduct your own research before making any decisions. We might receive commissions for recommending certain products or services.
Intro to SBLOCs ▶ ruclips.net/video/iURB5PbEUD4/видео.html
Agreed - SBLOCS are a healthy way to model "build, borrow, die" without all the fee loads. Great content!
Thank you for watching!
@@sharonwinsmith I really thought I was breaking the law because of how stress free life got. lol over head low live on margin and returns pay it off 🤯🙏🏿🙏🏿🙏🏿🙏🏿
Been looking for this video for years. Thanks for doing it. Glad I found you.
Fantastic! you are a hero!
thank you!
You are a God sent 🙏 thank you. Please keep the content coming
Thank you so much! I really appreciate that! 🙂
Another highly informative and thorough video!!👍🏾✌🏾😁 I always thought that the whole "Infinite Banking" Insurance strategy seemed a little shady. Thanks for laying out the why.
I just subscribed to your newsletter. I'll be taking your business owners course by Fall. Kudos!! Cheers!!
Thank you! Appreciate your kind words 😁
Great content, Sharon. Sub!
My SBLOC is SOFR + 2% = 7.3% currently. That is way too high. My commission-free VUL (variable universal life) can invest in S&P500 and many other index funds and the interest is only at 0.9%. And, after the policy is active for 5 years, the interest is 0.00%! I know exactly how much of the monthly premium goes into the 1.) death benefit bucket and how much goes into 2.) my investment bucket. No surprises. I will take the VUL any day. And - no margin calls.
Thank you for sharing your perspective! You can get better rates on SBLOCs than that and you are also looking at the pre-tax interest rate. Even though a policy might be commission-free, you are still paying insanely high fees. There are also fund management fees (among many other types of fees) with VUL policies. Once you start borrowing against the cash value, you start draining out the death benefit. The policy can also lapse which means you are trapped with the policy for life. Lapsing policies is a huge money maker for the life insurance companies that sell these policies. The COI is also likely to go up significantly as you get older. There are even people who voluntarily walk away and let their VUL’s lapse even though they could still afford the premiums because the COI and fees went up so much it became untenable. It wouldn't make sense for life insurance companies to offer these policies if they weren't charging exorbitant fees. There’s a reason people like Warren Buffet tell you to stay away from these types of life insurance investment products.
Used M1 kept my overhead low now the dividend is paying the overhead Line of Credit off. I honestly thought I was breaking the law the first time I paid my bills all at the begining of the month and having the LoC paid off before the next billing cycle automatically makes it easy to invest everything over the overhead into the principle which in turn raises the Line of Credit. litterally money from thin air if you work it right.
What?
@@wisulliv live on margin. Let the returns pay it off
Thanks a lot for the amazing content. QQ: For 2023, the personal federal estate tax exemption amount is $12.92 million. will the life insurance death benefit take up part of this 12.92M limit (let's use the personal limit, not the couple limit for simplicity)? e.g if your children inherits your home that worths 12.92M, and the death benefit is 1M, does that mean the 1M will be subject to estate tax since it is over the limit? Thanks in advance.
Sharon instead of a SBLOC you can short a box spread and have no interest payments and you also can record a capital loss that can offset capital gains
Box spreads have the lowest possible rate that the market can offer you and you can take them for a month or at most five years
Excellent point! I generally agree with you but think there are some downsides to box spreads. I also don't think the vast majority of people should try them unless they are extremely experienced (as you seem to be) and know what they are doing.
1. According to Google, the minimum for SBLOC would be $100,000. Can I combine different brokerage that add up to that amount or more to get the SBLOC?
2. Why SBLOC is being your bank?Since you have to pay the bank interest. Is it because when you interest is tax deductible and make this 100% being your own bank?
I've never come across any minimum for an SBLOC so I think that is likely wrong. There may be banks that have specific requirements on min SBLOC amounts. However, no bank I've ever worked with had a min requirement.
The Be Your Own Bank strategy is typically thought to be the approach where you borrow against the cash value in your whole life insurance policy. I think the SBLOC approach is a better strategy as compared with the Be Your Own Bank - whole life strategy.
If you already have such a policy and have paid into it for years, what do you suggest? Borrow against the cash value for investments that yield more than the interest you're charged?
If it still makes sense, I would use the policy as intended by borrowing against it to make secondary (better) investments. I know many people have walked away from these types of policies in the past because they were so far underwater. It's important to analyze it from an overall perspective and see what makes the most sense.
@@sharonwinsmith Thanks!
Is this similar to a margin account?
SBLOCs are commonly referred to as margin loans as well. However, I think of margin accounts as being accounts with a brokerage where you buy stocks on margin. Meaning they lend you the money to buy the stock with the account as collateral. This is different from an SBLOC where you are taking a loan against stocks you already own (not borrowing to buy stocks). Thanks for watching!
@@sharonwinsmith thanks for the infos
Thx for the video….I use both methods byob and sbloc…..both have their pluses and minuses…. Yes the fees are real on byob but so are margin calls on sbloc. Also, might get lower dividends but can withdraw 90%+ of my cash value vs 50% of sbloc…. Lastly, byob on life insurance still pays out a significant death benefit whereas sbloc will just leave whatever is in ur account…. Of course this is also an oversimplification
Lastly more lawsuit n creditor protection may be avail n your life Ins vs your brokerage accounts
All these be your own bank videos online are highly confusing when really its just save your money and use your cash to buy stuff. You want to buy a car in 5 yrs...save the money and write a check or loan against an asset. I don't know why all focus on using insurance vs normal after tax brokerage account. Most SBLOC are at WSJ Prime which is 8.5% but I got a car loan from a credit union at 4.7%, so do your research.
Thanks for watching! The rate on my SBLOC is nowhere near 8.5% right now. Agree you can usually get a low interest rate for something like a car. However, if I were going to buy a business, I would certainly rather pay interest on an SBLOC than an SBA or bank loan right now. If you know what you are doing and do your research, SBLOCs typically have low interest rates that are often close to, and have been at times, lower than mortgage rates.
@@sharonwinsmith you're borrowing at 8.5%, where do you park the money loaned to you against your stock port? it can't be easy to find investments that yield much more than 8.5%. or that doesn't matter because you're saving on taxes?
She talks about rates being lower than that in some of her other videos. You have to shop around for brokers. I’ve seen as low as 6% in today’s high interest environment. I don’t think it’s advisable to borrow at 8.5%.
You can use that money for personal purchases, if the sbloc rate is lower than what you can get through a traditional loan. Or better yet, use it to buy another asset. She talks about real estate, businesses, and other assets that can yield higher than your sbloc rate. So essentially you’re earning returns on your money twice - once through the primary stock acct and again through the secondary asset, such as real estate.
Please can you up the quality of the videos. First, you are informative, second I like my 4K TV, third you look great. 🙂
Thank you for your kind words. Any thoughts on how the quality of the videos could improve?
@@sharonwinsmith I don't know, a better camera and upload quality? The content has no obvious flaws (that I can see) only the quality of uploads is 480p.
I watch on an iPhone or maybe an iPad. I don’t want to have to download a 4k video for 5 minutes I think the quality is perfect now
you don't have to, but an option to watch it in 4K would have been nice. 4K isn't mandatory it is an option and the iPhone has no benefits form it...@@eyre1720
The quality looks good to me.
Coos afternoon can I have you contact information I really need help how to open SBLOCs