If you’re looking to understand how money really works and how to create mega wealth, you’ve come to the right place.
In this article, we’ll explore the concept of Other People’s Money (OPM) and how you can use it to your advantage, just like banks and credit unions do.
We’ll also discuss the four things you can do with money and how owning and loaning on the same assets can help you become your own banker.
As we dive deeper into the topic, we’ll cover the role of banks and credit unions, the power of tax deductions, and the concept of infinite rate of return.
We’ll also explain the velocity of money and why banks loan money to individuals, even when they could make more money by investing it elsewhere.
By the end of this article, you’ll have a better understanding of how to optimize your assets and minimize taxes, paving the way to creating mega wealth.
Key Takeaways
- Understanding Other People’s Money (OPM) and how to use it to your advantage can help you create mega wealth.
- By owning and loaning on the same assets, you can become your own banker and optimize your assets.
- Understanding the velocity of money and the power of tax deductions can also help you on your road to wealth.
Understanding Money
To truly understand the road to wealth, you need to understand how money works. There are four basic things you can do with money: spend it, lend it, own with it, or give it away. Many people believe that owning as much as possible and owing nothing is the best way to handle their money. However, this is not necessarily the case.
One way to use your money to create wealth is by using other people’s money (OPM), just like banks and credit unions do. By owning and loaning on the same assets, you can become your own banker. This means that you can put your money into a financial vehicle, such as a max funded index universal life insurance policy, to keep it liquid and safe. If structured correctly and funded properly, this can provide an average net return of 10% after all fees and taxes.
When you put your money into a bank or credit union, it is in a lended position. The bank or credit union will turn around and loan that money back out again. By borrowing money at a lower rate and making a rate of return that is usually double or triple what you are paying on any debt, you can create mega wealth just like banks do.
Banks make money by borrowing money and then loaning it back out again at a higher rate. They make a spread, which is the difference between what they pay in interest and what they charge in interest. For example, if they pay 4.5% interest on a CD, they might turn around and loan that money back out at 7.5% interest to a business owner or someone with an equity line of credit. This creates a 3% spread, which is how banks make millions, billions, and trillions of dollars.
Banks Don’t Just Put Your Money Into a Vault
However, banks do not just put your money in a vault. They turn around and loan it back out again, just like you can do with your own money. By borrowing money at a lower rate and making a higher rate of return, you can create mega wealth. This is the concept behind OPM and why it is so important to understand how money works.
The velocity of money is another important concept to understand. Banks and credit unions loan you money because they understand the velocity of money.
They know that by loaning you money, they can make a profit and increase the velocity of money in the economy.
In summary, by understanding how money works and using other people’s money to create wealth, you can achieve financial success. This means putting your money into a financial vehicle to keep it liquid and safe, owning and loaning on the same assets, and borrowing money at a lower rate to make a higher rate of return. By understanding the velocity of money, you can also take advantage of opportunities to increase the velocity of money in the economy and create even more wealth.
The Concept of Other People’s Money (OPM)
As Doug Andrew, a financial strategist and retirement planning specialist for five decades, and someone I’ve gleaned valuable information from in my financial advocate career explains, using Other People’s Money (OPM) is a powerful tool to create wealth. Banks and credit unions have been using this concept for years to make millions and billions of dollars. By borrowing money at a lower rate and investing it in assets that generate higher returns, individuals can create Mega wealth.
To understand how OPM works, it’s essential to know the four things that individuals can do with money: spend it, lend it, own it, or give it away. While owning assets is a good thing, it’s not always the best strategy to create wealth. One way to create wealth is to own and loan on the same assets. This means that individuals become their own banker and use their assets to generate more wealth.
Doug Andrew suggests that individuals can keep their money liquid and safe by putting it into a Max funded index universal life insurance policy. By structuring and funding this policy correctly, individuals can average returns of 10% netting after all fees and tax-free. This strategy is explained in several videos on Doug Andrew’s channel.
When individuals put their money into a bank or credit union, it’s in a lended position. Banks and credit unions don’t just put the money in some Vault; they turn around and loan it back out again. Therefore, individuals can borrow money at a lower rate and make a rate of return that’s usually double or triple what they’re paying on any debt. This creates Mega wealth, just like Banks make wealth.
Banks make millions and billions of dollars by borrowing money and investing it in assets that generate higher returns. They pay interest to their customers and turn around and loan the money back out at a higher rate. This creates a spread, which is the difference between the interest they pay and the interest they earn. Banks make a spread of 100% to 200% more than the cost of the funds.
The velocity of money is the rate at which money changes hands in an economy. Banks and credit unions loan money to individuals to create new assets, which, in turn, generate more wealth. They understand the velocity of money and use it to their advantage. By loaning money to individuals, they create new assets that generate more wealth, which, in turn, creates more opportunities for lending.
Using OPM is a powerful tool to create wealth. By borrowing money at a lower rate and investing it in assets that generate higher returns, individuals can create Mega wealth. Banks and credit unions have been using this concept for years to make millions and billions of dollars.
How Money Works
To simplify how money works, there are four basic things you can do with it: spend it, lend it, own with it, or give it away. While owning as much as possible with your money may seem like the best option, there is another strategy that can help create mega wealth: using other people’s money (OPM) to your advantage.
Banks and credit unions use OPM to create wealth by borrowing money at a lower rate and then lending it out at a higher rate. By doing this, they create a spread and make a profit. As an individual, you can also use this strategy by owning and loaning on the same assets. This means putting your money into a financial vehicle, such as a max funded index universal life insurance policy, which can provide returns of up to 10% after fees and taxes.
When you put your money in a bank or credit union, it is in a lended position. The institution then turns around and loans that money back out again, making a profit on the spread. By borrowing money at a lower rate and investing it in assets that provide a higher rate of return, you can create mega wealth just like banks do.
The velocity of money refers to how quickly money changes hands in the economy. Banks loan money to individuals and businesses, who then use that money to invest in assets or spend it on goods and services. This creates a cycle of money changing hands and helps to stimulate economic growth. Banks understand the velocity of money and use it to their advantage by loaning money to those who can invest it and create a higher rate of return.
By understanding how money works and utilizing strategies like OPM and the velocity of money, you can create wealth and achieve financial freedom.
The Role of Banks and Credit Unions
Banks and Credit Unions play a significant role in the financial industry. They are financial institutions that accept deposits from individuals and businesses and lend money to those who need it. Banks and Credit Unions use other people’s money (OPM) to create wealth, just like how Doug Andrew, a financial strategist, does.
When you deposit your money in a bank or credit union, it is in a lended position, meaning they turn around and loan it back out again. Banks and Credit Unions make money by paying you interest on your deposits and then loaning that money back out at a higher interest rate. The difference between the interest they pay you and the interest they charge on loans is called a spread.
Banks and Credit Unions also borrow money at a lower rate and make a rate of return that is usually double or triple what they are paying on any debt. This creates wealth, just like how Banks make wealth. By borrowing money using a preferred interest expense and loaning money out, they create Mega wealth.
Banks and Credit Unions are able to make millions and billions of dollars by borrowing money and making a spread. They borrow money from individuals and businesses and then turn around and lend it back out at a higher interest rate. They make a 3% spread on every million dollars they borrow, which is a smart way to make money.
Here is an illustration of creating wealth by 3% spread.
Let’s say you are a bank that lends money to borrowers at an interest rate of 6%. If you borrow $1 million from the bank and lend it out to borrowers at an interest rate of 9%, you would earn a 3% spread on the borrowed money.
Assuming you lend out the entire $1 million and all borrowers repay their loans on time, you would earn $90,000 in interest income from the borrowers (9% of $1 million). You would then pay the bank $60,000 in interest expense (6% of $1 million) for the money you borrowed from them. This would leave you with a net interest income of $30,000, which is equivalent to a 3% spread on the $1 million you borrowed from the bank.
If you repeat this process multiple times with different borrowers, you could potentially earn a significant amount of money through the 3% spread on every million dollars borrowed. However, it’s important to note that there are risks involved with lending money, such as the possibility of default by borrowers, which could result in losses for the lender.
Banks and Credit Unions also understand the velocity of money. They loan you money to get a construction loan to build a new house because they understand the velocity of money. They know that they can make more money by loaning it out than by putting it in an insurance company.
In conclusion, Banks and Credit Unions play a crucial role in the financial industry. They use other people’s money to create wealth and make a spread by borrowing money and lending it back out at a higher interest rate. They also understand the velocity of money and use it to their advantage.
The Concept of Owning and Loaning
When it comes to money, there are four basic things that you can do with it: spend it, lend it, own with it, or give it away. While many people believe that owning as much as possible is the best strategy, financial strategist and retirement planning specialist Doug Andrew suggests a different approach: owning and loaning on the same assets to become your own banker.
Andrew recommends putting money into a Max funded index universal life insurance policy, which can yield an average net return of 10% after fees and taxes. By doing this, you are putting your money in a lended position, just like when you deposit money in a bank or credit union. However, rather than simply letting your money sit there, Andrew recommends borrowing money at a lower rate and making a rate of return that is usually double or triple what you are paying on any debt.
This strategy of owning and loaning on the same assets is similar to what banks and credit unions do with other people’s money (OPM) to create mega wealth. By using a preferred interest expense, you can create more wealth by having liabilities and loaning the money out, while also owning assets.
Banks make millions and billions of dollars by borrowing money and making a spread, which is the difference between the interest they pay on deposits and the interest they earn on loans. For example, a bank might pay you interest at 4.5% on a CD, but they turn around and loan your money back out at 7.5% to make a 3% spread. By paying $45,000 in interest on a million dollars and making $75,000, the net cost is only $30,000 after tax deductions in a 33% bracket. This creates a 2.5 times return on investment.
The velocity of money is another important concept to understand. Banks loan money to individuals for things like construction loans because they understand the velocity of money. They could put the money in an insurance company and make a safer return, but they loan it out instead because they know that the money will come back to them quickly and they can make a spread.
By understanding the concept of owning and loaning on the same assets and the velocity of money, you can use other people’s money to create mega wealth.
Creating Mega Wealth
To create Mega wealth, you need to understand how money really works and what the velocity of money is. There are four basic things you can do with money: spend it, lend it, own with it, or give it away. However, owning and loaning on the same assets is a concept that can help you create more wealth.
One way to do this is by using OPM (other people’s money) like Banks and Credit Unions do. By putting your money in a Max funded index universal life insurance policy and structuring it correctly, you can average returns of 10% netting after all fees and tax-free through diversification and rebalancing.
When you put your money in a bank or credit union, it’s in a lended position. Banks and credit unions don’t simply put your money in a vault; they turn around and loan it back out again. By borrowing money at a lower rate and making a rate of return that’s usually double or triple what you’re paying on any debt, you can create Mega wealth just like Banks do.
Banks make millions and billions of dollars by borrowing money and making a spread. For example, if you deposit a million dollars into a bank, they’ll pay you 10,000 and then turn around and loan it back out at 7.5%, making 75,000. By borrowing money at 42%, which is a net cost of 30,000 on every million, and making 7.5%, you can create Mega wealth just like Banks do.
The velocity of money is the rate at which money is exchanged from one transaction to another. Banks loan you money because they understand the velocity of money. They know that by loaning you money to build a new house, they can make a profit faster than by putting the money into an insurance company. By understanding the velocity of money, you can create Mega wealth and optimize your assets while minimizing taxes.
Understanding Interest Rates
To truly understand how money works, you need to understand interest rates. There are four things you can do with money: spend it, lend it, own it, or give it away. Many people believe that owning as much as possible without owing anything is the best way to go. However, owning and loaning on the same assets can create more wealth.
One way to keep your money liquid and safe is to put it in a Max funded index universal life insurance policy. If structured correctly and funded properly, this policy can average returns of 10% netting after all fees and tax-free. By diversifying and rebalancing, you can create even more wealth.
When you put your money in a bank or credit union, it’s in a lended position. Banks and credit unions make money by borrowing money at a lower rate and then loaning it out at a higher rate. They make a spread, which is the difference between the interest they pay and the interest they earn.
Banks and credit unions are not just benevolent institutions paying interest. They turn around and loan the money back out again. By borrowing money at a lower rate and making a rate of return that’s usually double or triple what you’re paying on any debt, you can create Mega wealth.
Banks make millions, billions, and trillions of dollars by borrowing money. If you deposit collectively a million dollars into a bank, you’re lending them a million bucks. Banks turn around and put 30 to 40% of that money in insurance companies, where they can earn a much higher rate of return.
The velocity of money is the rate at which money is exchanged in an economy. Banks loan you money because they understand the velocity of money. They know that by loaning you money, you’ll use it to build a new house or start a business. This will lead to more economic activity, which benefits everyone.
In summary, understanding interest rates is crucial to understanding how money works. By borrowing money at a lower rate and making a rate of return that’s usually double or triple what you’re paying on any debt, you can create Mega wealth. Banks and credit unions make money by borrowing money at a lower rate and then loaning it out at a higher rate. By understanding the velocity of money, you can use other people’s money to create wealth.
The Power of Tax Deductions
To create Mega wealth, you need to understand how to use other people’s money (OPM) like Banks and Credit Unions do. One of the ways to do this is by taking advantage of tax deductions.
When you borrow money from a bank or Credit Union, you’re in a lended position. The bank or Credit Union will turn around and loan that money back out again, making a profit on the spread between the interest rates. For example, a bank might pay you 4.5% interest on a CD, but then loan that money out to a business owner or someone with an equity line of credit at 7.5%, making a 3% spread.
But banks don’t just make money on the spread. They also take advantage of tax deductions. For example, if a bank pays $45,000 in interest on a million-dollar loan, that interest can be tax deductible in a 33% bracket, making it a net cost of only $30,000. This means that if the bank can borrow money at 4.2% and make a profit of 7.5%, they can create Mega wealth.
You can do the same thing by borrowing money at a lower rate and using it to invest in assets that earn a higher rate of return. By doing this, you can create Mega wealth just like Banks do.
To take advantage of tax deductions, you need to structure your investments correctly. One way to do this is by using a Max funded index universal life insurance policy. If this policy is funded properly and structured correctly, you can average returns of 10% netting after all fees and tax-free. This is because you can borrow money from the policy at a lower rate and invest it in assets that earn a higher rate of return.
In summary, to create Mega wealth, you need to understand how to use other people’s money and take advantage of tax deductions. By borrowing money at a lower rate and investing it in assets that earn a higher rate of return, you can create Mega wealth just like Banks do.
The Concept of Infinite Rate of Return
When it comes to creating wealth, one of the most important concepts to understand is the use of other people’s money (OPM). Banks and credit unions have been using this strategy for years to generate mega wealth, and you can do the same.
To start, let’s simplify how money works. There are four basic things you can do with money: spend it, lend it, own with it, or give it away. Many people believe that owning as much as possible without owing anything is the best strategy. However, owning and loaning on the same assets is a powerful way to become your own banker and create more wealth.
To keep your money liquid and safe, you can put it into a max-funded index universal life insurance policy. When structured correctly and funded properly, this can result in an average net return of 10%, tax-free. By diversifying and rebalancing, you can optimize your returns.
When you put your money in a bank or credit union, it’s in a lended position. These institutions don’t just hold onto your money; they turn around and loan it back out again. By borrowing money at a lower rate and making a higher rate of return, you can create mega wealth just like the banks.
Banks make money by borrowing money at a low rate and lending it out at a higher rate. They typically make a 100-200% return on their funds. However, when you use OPM, you cannot calculate the rate of return because it’s not your money. This is known as an infinite rate of return.
The velocity of money is another important concept to understand. Banks and credit unions loan money to individuals and businesses because they understand the velocity of money. By loaning out money, they can generate a higher rate of return than they would by simply putting the money into a safer institution like an insurance company.
In conclusion, using OPM and understanding the velocity of money are key strategies for creating wealth. By putting your money into a max-funded index universal life insurance policy and using borrowed funds to generate higher returns, you can create mega wealth just like the banks.
Understanding the Velocity of Money
To understand the velocity of money, you need to know how money works. There are four things you can do with money: spend it, lend it, own with it, or give it away. Many people think it’s best to own as much as you can with your money and not owe anything. However, owning and loaning on the same assets can help you become your own banker and create mega wealth.
When you have money that you want to keep liquid and safe, you can put it in a Max funded index universal life insurance policy. If structured correctly and funded properly, this can average returns netting after all fees and tax-free at 10% by diversification and rebalance. By putting your money in an institution, you are putting it in a lended position. Banks, credit unions, and insurance companies loan out the money they receive, so your money is in a lended position.
You can borrow money at a lower rate like banks do and make a rate of return that’s usually double or triple what you’re paying on any debt. This creates mega wealth, just like banks make wealth. You can own assets but create more wealth by having liabilities, loaning the money out, and borrowing money by using a preferred interest expense.
Banks make millions and billions and trillions of dollars by borrowing money. A bank or credit union’s greatest asset is their liabilities. If they stop paying interest, they would wither up and die. They pay interest on deposits, but they turn around and loan it back out again. They make a spread, which is the difference between the interest they pay and the interest they receive. Banks make a 100% to 200% spread, which is how they make money.
The velocity of money is how quickly money changes hands in an economy. Banks loan money to people to create new businesses, buy homes, and make investments. They understand the velocity of money and loan money to people, even though they can make it safer in a multi-trillion dollar institution like an insurance company. By loaning money, they can create more wealth and keep the economy moving.
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