When you save your money, you have access to all or part of it at any time without penalties, it is not subject to losses, and if saved in the appropriate financial instrument, it grows continuously over time.
When you invest your money, you may have to pay penalties and/or taxes to access it at any time, it is subject to gains and losses, and if the losses coincide with major life events like your retirement or the beginning of college for your children, they may have a devastating impact on your financial future.
Am I opposed to investing? No, as long as you can afford to lose the amount you are investing without affecting major life events. Unless your family’s income is in the top 5 percentile, I don’t believe, in general, it is appropriate to risk the amount you are investing.
To give you an example, if your investments suffer a market loss of just 10%, you need a market gain of over 11% just to break even. Whereas, if the market loss is 25%, your market gain should be of over 33% just to break even, and if your market loss is 50%, your market gain needs to be 100%, or doubling your money. Will you have peace of mind and sleep well under this situation?
Obviously, you have no control, or precise idea, of when your investments are going to suffer a market loss. Let’s assume that you invest during a period of 10 years and your investments give you gains of 8% in 9 of the 10 years and just one year they lose 20%. Will you believe that your total return will be better with a savings instrument that gains 5% every year? Yes, a Banking Policy gives you better returns and peace of mind, which is priceless.
If you would like to learn how you can grow a substantial amount of cash that you have access to at any time without penalties, is unrelated to the stock market, and will generate income that is not included in your tax return, visit our website at http://dev.infinitebankingsimplified.com/blog/ or feel free to email us your questions at ContactUs@InfiniteBankingSimplified.com or call us toll-free at 1-844-443-8422.
Isis B. Palicio, LUTCF, MBA
Pedro A. Palicio, MBA, Ph.D.
Infinite Banking Concepts® Authorized Practitioners
We are experts in designing high cash value dividend-paying whole life policies.