Albert Einstein, the renowned scientist and mathematical genius once said, “There is nothing new under the sun, only things which we have forgotten.” The “we” here being the collective we referring to our country or world’s population.
I will give you an example, which I found funny and sad at the same time.
In American farm country, we have a saying or euphemism; when we are talking about a farmer who died, we don’t say he died, instead we say “He Bought The Farm”. I always assumed this saying meant that our culture doesn’t like to talk about death, or even used the words death, dead or died. So we used this euphemism. The truly sad thing is that while we remembered that “Bought the Farm” meant that he died, we forgot that it also meant that he literally bought the farm.
In American there is a economic practice which predates the Civil War of 1865, whereby farmers would all buy a Permanent or Whole life insurance policy, which was a policy good for your whole life span, and the amount was enough to payoff the mortgage and equipment, plus a little money to bury you. But the policy wasn’t just about a death benefit, it was a life benefit, as in during the farmers life he could use the money in it. The policy built up cash value, a type of savings account, earning interest, usually compound and the farmer could borrow against the cash value from the insurance company, the loan was secured by this savings account called the cash value. The farmer took out loans, against or secured by the cash value to buy seeds, fertilizer and equipment. And after he harvested and sold his crops, he would payback some or all of the loan, and then use it again another time. The cash value grew every year tax free and was a useful savings account to get loans from quickly with no credit check. After all the loan was secured by his cash value and he paid interest, so the approval was automatic. So the farmer enjoyed this life benefit all his life and when he died, the insurance company paid the death benefit and the remainder of the cash value to his beneficiary. It was then that the farmer literally bought the farm.
This is an example of something we, the collective “we” use to know, but have forgotten. But the wealthy, like banks and certain rich families remember and practice this strategy as a life benefit. In fact, bank owned life insurance is known as BOLI, and is a huge part of the insurance business, so big that a certain American Bank listed 23 billion dollars of cash value in bank owned life insurance as an asset in their quarterly statement in 2016.
I didn’t know about this before, but I know now and consider Whole Life Insurance an important part of my plan for financial independence.
Knowledge is power, power brings wealth and wealth provides freedom.
Free yourself.
✍️ By Shortsegments.