Hypothetical Question:
If you could borrow money at 4% and invest at 6% with
no risk to principle, how much would you borrow?
Answer:
AS MUCH AS YOU CAN!
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Benefits of The Professional’s Retirement Strategy, (PRS)
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Its Good To Be The Bank!
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This is for illustration purposes only. Strategies may not be appropriate for everyone. Your results may vary. Registered Investment Advisory Representative offering services through First Advisors, Inc. Advanced Equities Companies CA License # 0B96613 |
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By using our strategy, a 45 year old male in good health who’s company could fund $6,000 per month for his benefit with $1,500 per month voluntary contributions could accumulate enough to provide him between $30,000 and $40,000 monthly income at age 65 (tax free) for the rest of his life. This is equivalent to having a $7,500,000 pension plan! |
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Qualifications for the PRS Plan |
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*Business Owners with 2 Consistent Years of 250k+ Income OR *Significant Equity in an Investment Property AND *Must Have Good Credit |
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McKinley Financial Group 555 Twin Dolphin Drive, Ste 170 Redwood Shores, 94070 Tel: (650) 551-8900 Fax: (650) 551-8919 Call us today for a free consultation! |
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Banks have worked with this as their major method of doing business for hundreds of years. Banks use other people’s money and pay them little or no interest while lending the money back out to some of the very same people at 7% as Mortgages or 18%+ as credit cards. This concept is called Arbitrage. Wouldn’t it be nice to be the bank? Now you can. The very same principles apply to the Professional’s Retirement Strategy, (PRS). Now, Business Owners have the power to borrow against the “dormant” value of their businesses or just their potential income today! The benefit of this strategy is that you could have $1,000,000 or more working for you today at a rate that is higher than the rate at which you borrowed. |
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If the question were: “How much money would you borrow if you could borrow at 7.5% and invest at 6% with little risk?” most people would say, “It doesn’t make sense to borrow any.” But they would be wrong. Because the loan interest is calculated on a Simple Interest Basis, a 7.5% interest payment would be $75,000 on a $1 million loan. The interest on the one million dollars invested would be calculated using Compound Interest. In ten years, a $1,000,000 loan at 6% interest would be making over $100,000 in interest while paying only $75,000. Obviously, the longer time frame you have the better this begins to work. In twenty years, the interest earned would be $181,000 while paying only $75,000. Still think it doesn’t make sense? If there were any tax benefits, such as the 7.5% loan interest being considered tax deductible, the after tax interest rate could be closer to 4% for a business owner in a high tax bracket. And if the investment interest accrued on a tax deferred basis and was available on a tax free basis later, this equation is now undisputable. This opportunity exists today! |