Leverage & Financing Strategies

We are strong advocates of using other people's money (OPM) when making major "one-off" purchases.

Leverage & Financing Strategies

For example, if you can generate a 7% return on money that would otherwise be used to make a major purchase (such as a vehicle or second home), while borrowing from a bank at a lower rate, you are in fact experiencing something known as positive arbitrage or a positive spread on your money. The difference clearly works in your favor and can have a dramatic impact on your bottom line over time. Our role is showing clients how to utilize OPM in a prudent and responsible way, when and where it makes sense. 

Is Paying Cash Really the Best Way?

Every time you pay cash for an item such as a car, new roof, or family vacation, opportunity cost on the money you've spent is incurred. That is, the amount you could have earned on your money had it stayed invested is now gone forever. And the meter on opportunity cost doesn't end until you die. For example, if you could earn 5% on your money, paid $100,000 cash for a vehicle, were 50 years old, and lived to age 90, your total opportunity cost would be $635,842 because of just that one purchase. Multiply that by many purchases over time and the numbers are staggering. But what if instead we showed you how to build an equity base for yourself and show you how to borrow against it to make that same $100,000 purchase, essentially leaving your money to compound while paying back "your bank" the same money you've been saving to begin with? How much value could this strategy provide?

Mortgages, HELOCs, and Refinancing

You can create superior returns by leveraging the equity in your home and investment properties. If you need cash to finance a big ticket purchase, are planning to buy or sell a home, or are planning to refinance your mortgage, we can help you utilize your home equity as part of your financial plan.

Cash Value Lines of Credit (CVLOCs)

If you own whole life insurance policies, you can borrow against the cash value of your policy. We show our clients how to use strategies such as premium financing, hybrid premium financing, and infinite banking to take full advantage of insurance as an investing tool.

Securities-Backed Lines of Credit (SBLOCs)

If you own stock, bonds, or mutual funds, you can borrow against the market value of your investments while your capital continues to work for you. SBLOCs allow you to access cash without incurring capital gains tax on appreciated assets.

Investment Real Estate

When we work with clients who own investment property, we frequently see situations where there is an excessive amount of cash tied up in equity. Our role is helping our clients properly diversify. We can usually find ways to restructure our clients' debt, freeing up the capital to purchase additional properties or finance other investments.

Ready to learn more about how you can
utilize leverage strategically in your portfolio?

Give us a call today.