Hi, it’s Peter Aquart of American Wealth Builders
One of my goals here at American Wealth Builders is to find ways to help investors fit real estate into their portfolio.
Obviously we talk a lot about retirement savings, and how cash flowing turnkey real estate can help you retire comfortably… and even retire early.
Not surprisingly, we talk about saving for education, and how cash flowing turnkey real estate can help you save for your children’s education… and beyond.
And, we talk a lot about leaving a legacy, and how cash flowing turnkey real estate can make an ongoing difference for those who receive the benefit of your legacy of real estate.
Here’s a strategy that you may not immediately think of but it can be a very powerful reason to buy cash flowing real estate.
Insurance. It’s basically a bet against something bad happening.
Whether we’re talking about car insurance, health insurance, property insurance, life insurance, whatever – your insurance is the proactive “investment” into protection that something even more costly won’t happen to you.
Let’s use car insurance as an example: you make small payments that add up over time; and if you get into a wreck, your insurance steps up and pays the expenses. (In theory, anyway).
Problem is, insurance also feels like you’re just throwing away your money. Yes, you get the peace of mind and protection that you’re covered, but you also know that the money is gone if nothing bad does happen. So it feels like a lose/lose proposition and the only reason people get insurance is because they want to lose less.
And that’s where I’d like to suggest that cash flowing turnkey real estate can actually make a difference, potentially even replacing insurance in some situations.
(Of course I’m not a financial advisor or insurance professional and I’m not suggesting that real estate will REPLACE EVERY insurance policy you have… keep reading and I’ll talk about that, but make sure you talk to a financial advisor or insurance professional before making any permanent decisions).
There’s two ways that turnkey real estate can help you with your insurance situation.
#1. Acquire real estate to cover your insurance premiums. Let’s say you pay premiums on all kinds of insurance – vehicle, dental, medical, health, life, mortgage, liability, etc., etc., etc. Those premium payments can add up each month. So, instead of pulling that money out of your after-tax income on your paycheck, why not invest some money into a turnkey property and then use THAT cash flow to pay your insurance premiums.
Result: you increase your take-home pay because it’s not being thrown away on insurance premiums. PLUS, your insurance premiums are paid for by ongoing cash flow from an investment that you own… and one that still benefits you.
For example, if your premiums are less than the monthly cash flow, that’s more money in your pocket; and even if your premiums are the same amount as your monthly cash flow, you can still look forward to the potential growth income you get from selling the property years down the road.
#2. Acquire real estate INSTEAD of paying for insurance. This one is a bit more advanced and won’t work for every person or every type of insurance, but I want to put it out there for you to consider. Some insurance, such as life insurance, requires a premium payment and then the money goes to your beneficiaries upon your death.
It’s meant to help them through the difficult financial period after you pass away, especially if you are the primary breadwinner.
Problem is, life insurance is not meant to be a windfall; rather, it’s meant to provide temporary relief until they’ve finished mourning and can then go look for a job. And worse yet, insurance companies are notoriously tight-fisted and may refuse payout for any number of reasons – from a pre-existing condition to a cause of death that they deem “suspicious.”
Over your lifetime, you may pay tens of thousands of dollars in premiums that your family may never see.
A different way is to instead use those anticipated premium payments and acquire turnkey real estate instead. The payouts start immediately in your lifetime; the payouts are far more generous than an insurance company would ever pay, and there’s no time or dollar limit to the payouts, which means that your family will be well-taken-care of month after month after month, long after you’re gone.
Here’s another example: let’s say you want dental insurance but aren’t sure if you want to pay for dental insurance. After all, you go to the dentist once a year for a cleaning… and if you ever do need dental surgery, it can be costly but you’re basically spreading that one-time cost over your premium payments.
So, why not invest in a turnkey property as your “dental insurance”? The regular payments can be spent on anything you want… and once a year they’ll cover your visit to the dentist to get your teeth cleaned. That extra cash flow can even be saved up in case you need dental surgery. And if you ever need a lot of money for dental surgery? Well, as a last resort you could always just sell your property.
The benefits of this approach are obvious… you get incoming cash flow instead of premium payouts; you still cover your expenses with PLENTY of money left over; and you have a contingency plan in case you need a lot of money.
Look, insurance is necessary but it’s also a hassle. The premiums are expensive and the benefits are sometimes difficult to get if you need them (how many of us know someone whose insurance denied them?), or they’re limited in some way.
That’s why I love integrating cash flowing turnkey real estate into my insurance plan – either to cover the premiums of insurance that is necessary (car insurance, house insurance, liability insurance) or to replace insurance that might not be as good of an option (life insurance and possibly other insurances in your life).
Talk to our team about this. We’re not insurance experts but we do understand how turnkey real estate can make a difference on a lot of life’s costs, and we can show you how a couple of properties in your portfolio could reduce or even eliminate a bunch of your insurance premiums.
American Wealth Builders
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