To Repay My Loan Or Not?
“Am I required to repay the loans I take against my policy?” -Said nearly every person wanting to learn more about The Money Multiplier.
I totally understand. It’s a key component of the equation. After all, we are talking about money here.
The short answer is “No.” While repaying the loan to yourself is not required as long as you continue to pay your premium deposits, it is encouraged to repay your loan because this is more money for you to use in the future.
Making The Decision
When you’re trying to decide whether or not to pay back
your loan, here are a couple questions that may help you to make the right decision:
– Do I still need the money? If you are still using the loan and don’t have the option to pay it back at the anniversary date, then don’t repay the loan back.
– Can I at least repay the interest back? When you become your own banker, treat your bank the same as you would treat a conventional bank. If you borrowed money from a conventional bank, you would be expected to pay back the loan with interest.
Payback of loans is never required. It is your money and we will never tell you what to do with it. But paying yourself back is encouraged when you have the funds to do so. This helps you to keep your money moving. And it’s far more useful when you put it to work for you.
Paying your premium deposits is a must, however, as is paying the loan interest on the policy anniversary date. (Learn more about premiums here.) This will ensure your policy stays active and does what it’s supposed to. After all, what good is a policy with a cash value account that you can’t use?
When In Doubt
To put it simply, just remember these three key points regarding creating wealth:
a. Pay yourself first.
b. Pay yourself with interest.
c. Recycle (recapture) all the money that is paid to others.
Bada bing bada boom. No need to overthink it.
When you’re ready to get started on creating your financial legacy or if you have more questions, most questions can be answered by watching this video. Start there and then schedule a consult with my team when you’re ready to begin.
