Here’s A Trick The Wealthy Do
Insurance is not just for accidents, it can be for wealth planning.
But, if you’re going to insurance for wealth planning, you’re going to have to think as the wealthy do.
Napoleon Hill tried to teach the world how to Think and Grow Rich. Most of us think about being rich, we just don’t know how to think and grow rich.
Since we’re speaking of thinking, I have to convey it to you in a story to get you to think. Please bear with me for a few minutes while I relate a story.
There was a rich man in New York who decided he was going to treat himself and go for a 4 month extended vacation, visiting several sites in Europe and then swinging through southern Asia before heading back home. (Now, this is in a setting several years back, or no doubt what you will learn about this man you would know he would have checked out travel mlm opportunities like I do with www.ScoobyPhotos.com, that guy knows the most about all those choices…talk about thinking and growing rich!).
He even decided to be especially kind to his limousine chauffeur. He said take five months off with complete pay and enjoy it like a holiday. Otherwise, this exclusive chauffeur would have been down on his luck, along with his family.
The wealthy man still had a dilemma. He couldn’t leave his limousine unattended in downtown New York, and his chauffeur had no business tending to the limousine in the owner’s absence. Where was he going to park the limousine for four months?
This man had already arranged to sublet his attractive and well located apartment for the period of his absence, so he couldn’t leave the limo where it was normally stored…the sublease wanted to park his vehicle there (and for what he was paying for the sublease, he deserved to park his own vehicle there). Does that give you a clue about how the rich think…would you have left the apartment vacant for fear someone who mistreat it? Or, would you raise the sublease so high that only the responsible would consider leasing it?
Unless you have mid-town to uptown New York friends, you don’t know that a parking spot alone can cost between $35,000 to $50,000 annually. (It’s outrageous).
So, the rich guy was not going to pay that much just to park his limo.
Here’s how the rich think…he contacted his private baker. He asked his private banker,”How much do I need to borrow for you to require collateral on a loan?” The banker said, “Now, friend, you know with your holdings in this bank, we don’t need any collateral from you before we get into the area of 5 or 6 million.”
The rich man said, “That’s not what I’m asking. In your standard loan structure, what does an average bank account holder have to borrow before you require collateral?” The private banker replied, “Around $10,000 to $15,000.”
The rich man asked, “I want to borrow $20,000 for 4 months, just 1/3 of a year. Would you take my limousine as collateral to secure that loan in an interest free circumstance?”
That’s what he was after. He’ll return the $20,000 without interest on the same day he picks up his limousine from the free storage provided by the bank.
“Sir, it is unnecessary for you to set your limousine as collateral. We know you will pay as you say. If you insist, yes, your limo is worth far more than $20, 000, and we will be glad to take that.” He said, “Good. I will have my chauffer bring my vehicle to you. I will receive the money from you at that time.”
And indeed that is exactly how he sheltered his limousine at the expense of the bank. He thinks differently.
- His sublease provided the expense for his travel and his chauffeur being off for 4 months.
- He turned the $20,000 into $30,000 with an investment he made.
- He paid nothing for the storage of his limousine (an estimated $10,000 savings)
The potential cost for housing a limousine was turned into a money maker because he knew the value of exchange.
Thinking in that same way, it’s not unusual for a wealthy man to increase his life insurance when he starts drawing his social security check.
Most of us would think, why does a rich man need social security checks? He doesn’t, but since it’s coming to him anyway, quite often he will use it to pay the premium on a life insurance policy as a savings precaution for his family in his death.
Certainly the premium is high, he’s older. Certainly he doesn’t need the money, but it’s coming. Certainly his family will find a use for it.
After all, most of us think of our social security as a means of income when we are least productive. That’s how the rich think, too.