People always ask me, "why is it smart to loan myself my own money? Why do rich people loan themselves their own money?" I'm gonna break it down for you right now.
Why is loaning myself my own money? Smart. Let's imagine that you have an account that has a available balance of $500,000. The liquid cash available in this account is $500,000.
This account lets you leverage – so you're able to loan money from yourself, from your own money. So you wanna take out a loan of a hundred thousand dollars, you're gonna buy a property. That is gonna come out of your liquid cash value.
$500,000 - $100,000 = $400,000
Now our liquid cash is $400,000. However, our account value does not change. Then, when this account is going to earn interest, the interest will be earned on $500,000, not $400,000. So you will earn interest on all of your money, even though you took a loan. It's basically like using your money twice, or other people's money (OPM). You can find out more about how to do this by reaching out to Power Three Financial.
Power 3 Financial is not giving financial advice. We are not licensed financial advisors – our licenses are strictly in insurance-based solutions. The information we share is specific to the products that we work with and therefor cannot guaranteed that other agents outside of Power 3 Financial will have access to the products that we talk about.