3. Mr. Jones Invests $100,000.00 for one year APR = 20% Gross yield on investment: $20,000.00 Less taxes (30%): $6,000.00 Net Yield: $14,000.00
4. Mr. Smith Creates IBC system Builds $100,000.00 Cash Value Borrows $100,000.00 for investment Charges himself 8% for loan Gross Yieldat 20% APR: $20,000.00 Minus loan % paid to IBC system: $8,000.00 Taxable gain: $12,000.00 Less taxes (30%): $3,600.00 Net Yield: $8,400.00
7. WeForgotSomeThings Mr. Smith owns the IBC system The $8,000.00 loan % wentintothis system He earnsthis money on a non-taxed basis It is an investmentexpense Whatdoesthis change?
8. The Real Deal For Mr. Smith Net yieldfrom the investment: $8,400.00 Net yieldfrom IBC system: $8000.00 Total yield: $16,400 Mr. Smith earns $2,400.00 more than Mr. J
9. Moral Of This Story Don’t ignore bankingprocesswith ROR An IBC system requires time to build Capitalizationhappens once An IBC policyislike a business A new business requires time beforemaking a profit