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A Financing Error

I made an error when we purchased our commercial office building.

The mistake wasn’t buying the property almost two decades ago.  It wasn’t the remodeling.  It wasn’t the brand-new parking lot.  It wasn’t the construction that needed to be done.  It wasn’t the financing.  The mistake I made was not taking advantage of discussing how much of the financing was taking place. 

Often times when a brand-new commercial building, and office building, retail space goes up, there will be a large placard by the local lending institution, savings & loan, bank, or credit union that says “This project was partially financed by XYZ Institution.  Where I made the mistake is the following – I should have bought a large placard, put it on posts, right in front of our commercial building, and it should have said the following:  "This project was partially financed by Mark Bertrang borrowing against his life insurance policy." That would have had people turning heads and wondering what was it that I was doing.  This is the thing that people sometimes don’t realize the benefit of having permanent life insurance policy that builds equity, builds cash not only for emergencies, but for opportunities.  When you finance things through a bank, you have to sit down with a banker, a lender, and it has to be determined and what financed terms the program will see itself through from the beginning to the end.  The wonderful thing about borrowing against a permanent life insurance policy that you own, is that you determine much of the terms – how long will this loan take place?  When do I need to begin paying back?  Do I have the option of delaying that payment?  Can I determine the amount that I decide that I wish to pay back?  Can I determine the amount?  Can I change the amount?  Can I delay payment?  Can I stop payment?  Can I then begin payment all over again?  You as the policy owner can determine how to put together your own financing plan, and here’s the big key:  People always thing of life insurance as something for the dead, that you have to die to be able to benefit from the life insurance policy that only your beneficiaries will benefit from your life insurance benefiting from your death.  Here it is, here it was that I financed an opportunity without having to die, but I could use the equity, the cash inside my policy, to borrow against my policy.  I know I say this a lot - borrowing against.

A good friend of mine, a fellow by the name of Caleb Guilliams, refers to life insurance as the “AND Asset” because it’s in two places at one time.  This is what a lot of people don’t realize – if I had money sitting at a financial institution, and I took that money out to make an investment into a property like our commercial building, the money actually would have to leave the financial institution, and then literally I would have to give it to another financial institution to be able to finance my opportunity.  With a permanent whole life insurance policy, it is an “AND” asset, where I am borrowing against that asset, so my cash remains inside my life insurance doing all the wonderful things it always has done by having guaranteed increases in value each and every year.  Having the opportunity to participate in the profitability of the insurance company by having additional dividends as they are declared, also becoming part of the equity inside my permanent life insurance policy, and also increasing the potential death benefit that I’m planning on having paid out a long, long, long time from now because I want to take advantage of what’s inside the policy for me to be able to make a difference in my life, to be able to build more assets because I’m using my life insurance to be able to fund those assets.  I’m being able to enjoy my life insurance policy where I am beneficiary while I am alive.

So, here is the mistake that I made.  Where banks will talk about have they have financed programs, large real estate ventures; the mistake that I made was when I borrowed against my life insurance policy to be able to have our commercial office building, I should have done what all of the financial institutions usually do is put up a big sign right in front of the building that said, “This investment property is being financed partially through a policy owned against the life of Mark Bertrang utilizing a permanent, whole life insurance policy.”  If you wish to have that option for yourself, it’s as close as a telephone call.

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