July 13, 2008

"10-8" Leveraging: Turbocharging the Top 5 Insured Strategies

We've looked at the perennial top five insured strategies for tax planning. We've also seen how "10-8" Leveraging reduces the risks over conventional financial leveraging.

This time, we'll look at the interrelationships, combining
  1. tax advantages of life insurance
  2. tax advantages of borrowing to invest
Lower Costs or Higher Returns?
If you want life insurance primarily for the tax-free death benefit, you look for low cost. If you're an investor, you focus on higher returns.

With "10-8" Leveraging both become possible while you bypass the two drawbacks of investing in life insurance by investing externally --- the way you already do. You can use the tax deductions to
  • reduce your cash outflow --- usually less than the cheapest products available, or
  • increase your yield by reinvesting the tax savings
The Top 5 Strategies
As we saw, the top 5 strategies account for about 80% of the concepts the wealthy use.

Here is how "10-8" Leveraging helps active investors.
  1. Legacy Bond: no effect (used by passive investors)
  2. Insured Retirement Strategy: enhance returns
  3. Estate Protection: reduce costs
  4. Income Shelter: enhance returns
  5. Insured Annuity: no effect (used by passive investors)
Users of the remaining strategies may also benefit.

Can you see the appeal that "10-8" Leveraging has for wealthy active investors who want tax deductions?


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