Want to Reduce Risk? Get CONTROL!

No investment is without risk, and at the foundation of any good strategy you’ll find the mitigation of risk. The traditional way to mitigate risk in an investment portfolio is with the theory of asset allocation and diversification.

For example, a Mutual Fund account for a typical investor might have several different funds. His capital may be invested into hundreds of different compa­nies. If the “investor” has no idea what they are doing, then some diversification might make sense. The ideal investor must have certain qualities which I will discuss another time.

But what if we all “invested” a little more of our time and focused on a few really good investments? ( Investments for instance, which allow the investor some control. Control is one of the best ways to mitigate risk.

If we peer into the banking model we’ll find different tiers of assets. The lower the tier the lower the risk. We can relate it to a pyramid. The Tier 1 assets would be considered the foundation which would carry very little, if any risk. And just like building a pyramid, the bank must start at the foundation. Banks always invest a good portion of holdings in Tier 1 assets.

We can model our personal financial system after the banking model. Once we have a solid, safe foundation built, we can take on a little more risk and move into the higher tiered assets.  Cash Value Life Insurance is considered a FDIC bank Tier 1 asset. The Cash Value in a properly structured whole life policy provides the foundation needed for your financial pyramid. It provides CONTROL.

Whole Life insurance is a tool that allows you to optimize your investments. A powerful advantage of a Whole Life policy is the loan provision. (Infinite Banking Concept) This provi­sion gives you the ability to leverage your cash value and use the loan proceeds from the insurance company to invest in other performing assets. (Learn more about the infinite banking concept here.) The beauty is that the cash value is left to compound uninterrupted in your policy. It continues to grow year in and year out, i.e. 24/7. You don’t have to take any risk in order to get the growth.

A few questions to consider:

1)  Have you stress tested (risk tested) your investments lately?

2)  Do you have a foundation-less portfolio?

3)  How can Becoming Your Own Banker secure your future?

4)  Who can design a great financial foundation for you?

By Jason I. Henderson, Ph.D.

To learn more about the Infinite Banking Concept call (435)764-1451 for a FREE consultation OR join us for “7 Keys To Financial Freedom”.