Originally Posted by
Gunfighter
GVUL with no additional investment in the policy is my plan. I'll take the tax savings from lower imputed income and move on.
WRT Infinite Banking, I've modeled a few whole life policies from IBC mutual life companies against a 20yr term with the difference invested in an S&P ETF taxable brokerage margin account. Even with LTCG paid on qualified dividends from the ETF, the brokerage/margin option comes out ahead for total value. The one area where WL comes out ahead is higher available loan proceeds in the early years. This is because I put a cap on the margin loan to allow for a safety margin in a down market. There are pros and cons to each approach depending on the individual and I may revisit the IBC concept next year.
IBC is a conversation that is germane to the discussion because it provides a stark contrast to the features GVUL touts. However, it also goes well beyond this. IBC is NOT an "investment" (although it shares some of those properties). If your focusing on ROR, you're missing the boat. IBC attacks, head on, the two biggest problems with money, which are taxes and inflation. Most give up north of 34% of their earnings in interest. It's not the interest rate that kills you. It's the volume of interest! It's all about how you cash flow money. The typical investor might put 10 or 20% in a qualified plan, then slug it out for a better ROR. The entire time they ignore the other 80 or 90% of their income! This is the beauty if IBC. It's about cash flow. We finance everything we buy. We either pay someone for the use of their money, or... we forfeit all future interest on our money when we pay cash... My intention was not wanting to take the thread "into the weeds", I'd encourage a read of Nelson Nash's "Becoming Your Own Banker". Again, I'm not soliciting here, but happy to clarify anyone's questions. I'm a pilot trying to share what I know. That's it. IBC changed my life.