We are always looking for more economic freedom and the power to control our destiny. But before making any aggressive commitments, let’s plan to have a capital structure that will withstand financial hurricanes. Then let’s find a market opportunity above financial sea level and away from the world’s economic heavy weather zones. Now let’s bring this analogy into our tent so we see its relevance.
Much like the steel frame and concrete used to help buildings stand up against 150 mile per hour winds our capital structure must be strong. It should be liquid and close to debt free. Our tax returns done and paid. Our Cash Value Life Policy and our Health insurance in position. Our own retirement plan in place and ready to receive the assets from the employer’s 401(k) plan. Our personal budget and records in order. We should have our accountant and lawyer identified and our business legal format identified. Our family support (immediate and extended) firmly in line. This will allow our most important asset, our brain, to be available for the challenges of a new business. But you already know that part, so make your own check list as part of your economic freedom plan.
Think of using cash value whole life insurance as a foundation for building your pool of liquid reserves. Those reserves can be working for you without increasing your taxes, and the cash is readily available, like a savings account, to meet unforeseen demands. This is also capital that re-assures the world that obligations will be paid, dead or alive. Cash Value whole life is like a steel structure giving financial strength to small business, farm and medical practices.
Here are some cases where that financial steel structure was put to work:
• Doris Christopher withdrew cash from her whole life policy to start her business and to provide a reserve. She started Pampered Chef
• J.C. Penney, in the early years, used cash value in his life policy to make sure the payroll was covered in his 1,400 stores.
• Ray Kroc launched McDonald’s chain with help from his Life Policy’s cash values.
• Walt Disney used his policy’s cash values to help build Disney Land.
Whole Life Insurance provides a means for enterprising business owners to take advantage of opportunities that present themselves, and assure lenders that they will be repaid even if something happens to the borrowing entity. It helps to enable the prompt payment of payrolls and invoices to keep the economic machine bolted together. It can give the power to borrow more at lower rates, even in times of distress. It also demonstrates that the entrepreneur is a prudent planner, a quality hard to demonstrate on a loan request form or resume.
Call on franchise consultants at FranFinders to help you find the business opportunities above financial sea level and out of the economic hurricane zones. Call on the team at Tailored Planning to help you build and maintain your steel and concrete-like capital structure.
– Douglas Brown, Tailored Planning
NC Licensed Life, Health and Long Term Care Insurance Agent
Licensed Investment Adviser Agent
January 11, 2017