We’re so busy dealing with the needs of today that very few of us stop to think about future generations of our families. We hear about families like the Hiltons and know their children are trust fund babies with millions of dollars in a trust funding their lifestyle. We talk about these real world examples, the things they have or are able to do thanks to their grandparents’ money. It doesn’t occur to us that we should be doing the same thing for our future generations. Our lived experience tells us we probably won’t be around long enough to enjoy any money we accumulate—why work so hard to put it all aside for someone else to enjoy. Enough of us live in-the-moment and die without real assets to pass on. We live in a capitalist nation but the next generation of our youth has no choice but to start from scratch—without capital. How can we move forward as a people when we doom each generation to building wealth from the ground up. When do they get a come up?
Change has to happen now and it has to start with us—the grandparents and ancestors of our future generations. The work we put in now will lay the foundation for generations to come. If we do things right, they’ll have the advantage of having somewhere to turn for money to create and run businesses. When the pool of money is big enough, they can even collect a monthly stipend from it. By now I’m sure some of you are thinking you already have a 401K, IRA, or something equivalent as the place to keep your money. That money however was intended for retirement so once you’re beyond your working years, it’ll serve a set purpose. Let’s talk about a different way to get this done.
What we need to put in place is living insurance. An indexed universal life insurance policy structured for cash value that’s invested to grow with the stock market. It benefits when the market does well and takes none of the losses when the market drops. There are two parts to this policy—a cash value based on what you put in every month and a death benefit. The amount paid out to the beneficiary in case of death. Term life insurance won’t meet these requirements and is no substitute. Even if you’re in poor health, a life insurance policy can be taken out on a young and healthy member of the family and you can still control the policy. This is a custom policy structured with terms (features) that meet your goals. Once you put enough money into it, you can access the cash value part of the policy tax free. Yes, you heard right—tax free. You’ve just learned how to create a family bank. Like any other bank, the more you use it and repay it to yourself with interest, the faster it grows. The key here is to borrow the money you need from the insurance company. When you do it this way, your actual money continues to grow uninterrupted.
You can have as many life insurance policies as you can afford on every member of the family. You can also choose to create a family trust and have the trust be the beneficiary to all the policies. Each passing member of the family makes future generations richer as you claim the benefits. Now that you have a family bank, you should make every attempt to use it and help it grow. You can use it for all kinds of large purchases or even lend money out of it to individuals and businesses. Afterall, if you’re going to pay interest on any major purchase wouldn’t it be better that you pay it to yourself. Like anything, you’ll want to create some rules around how you’ll manage use of the funds.
This is just the beginning and setting up your family bank can be the foundation for exponential growth. Imagine how it would feel to not need to go to a traditional bank begging to be approved for loans. Take the first step to set this up and then create a list of ways to tap into that money for assets or businesses that will make you even more money. Future generations of your family will thank you for giving them a come up. Let’s go.
