Today on The Wealth Secrets Podcast, Sean Adams talks about the different dimensions to consider before making an investment. Focusing solely on the rate of return is not enough to help you build real wealth. Sean discusses in further detail other investment metrics that will help you make better financial decisions and strategies.

[00:41] Four factors to consider before investing
[02:33] Investing in the S&P 500 VS cash value life insurance
[06:19] Liquidity, leverage, and investment opportunities
[10:13] Minimizing tax on investment returns
[11:54] Protection and legacy planning

The rate of return is an eye-catching metric for most people. Factors like guaranteed rate of return, tax advantages, liquidity, and protection are just as important to consider. Let’s compare a long-term investment in cash value whole life insurance against a long-term investment in the S&P 500. In this example, we have annually invested $19,500 in both life insurance and the stock market from 1990 to 2020.

Over a span of 30 years, the stock market investment will significantly outperform the life insurance investment with a yearly growth rate of 11.5% and 4% respectively. The S&P 500’s annual return rates are very volatile, with some years showing growth and other years showing losses. However, this isn’t the case with cash value life insurance. Instead, there is a 4% guaranteed return since it isn’t affected by the stock market.

Although the returns from the stock market are great, you do not have immediate access to your money. Cash value life insurance policies are not the end investments but are more often used as storage tools. You can take a policy loan against the insurance balance and use the money for other investment opportunities. Meanwhile, the cash value will keep earning interest in its full amount. In a way, you’re growing your money in two places at once.

Another important factor to consider is the tax bills on your investment returns. The interest earned in insurance policies are not categorized as income so it’s tax-free. Insurance policies are private contracts between the company and the policy owners. As such, they are not declarable assets. Storing your money in policies will keep it safe from litigations, bankruptcy, and divorce. Should you face an untimely death, insurance policies pay out a death benefit to your family.

Connect With Sean:

Facebook: https://www.facebook.com/profile.php?id=100060279543976

LinkedIn: https://www.linkedin.com/in/leveraged-life/

Instagram: https://www.instagram.com/sean_adams103/

Youtube: https://www.youtube.com/channel/UC0i91Q-fFy70LkaFxvfnGpg

For more videos and resources, visit leveraged-life.com. Do you have questions and feedback? Get in touch with Sean Adams through his email: sean@leveraged-life.com.

All shared information from the Wealth Secrets Podcast should not be taken as legal or financial advice. Please consult with a professional before making any decisions.