The single biggest mistake people discover after taking a policy loan

Dr. Seuss’ book, “The Sneetches,” which is also now a YouTube, is about two different kinds of creatures.  One type has stars on their belly, the other kind have no stars.  Of course, those who have the stars make those who don’t have stars feel inferior and less of a Sneetch than those who do.  And that is when a slick entrepreneur comes through town with a machine that can make a starless Sneetch into a starred Sneetch simply by running the Sneetch through his machine, for a price of course. Obviously, chaos ensues as masses of starless Sneetches line up to be run through the machine and receive their stardom.

Which brings us to the point of facing reality.  Nothing, not even a participating whole life insurance policy can make you into something you are not, simply by running money through it.  So, whatever you do, never fall for the gimmick that “running money through an insurance policy” will create the stardom (wealth) you are seeking.  At the same time, never, ever forget that your desire to become wealthier is not a bad thing but was actually given to you by your creator.

Think about this for a moment.  Have you ever met anybody that desired to be poorer?  Of course not.  We all desire to improve, grow and become wealthier.  That is a given.  The important thing is, however, there are no shortcuts to becoming wealthier, and “running money through a policy” will in the end, find you on the short end of the stick just like the Sneetches who thought they could obtain their stardom simple by running themselves through the slick entrepreneur’s machine, after paying him a fee.

Money is a spiritual thing.  Spiritual in the sense that animals, who don’t have spirits only souls, don’t use money as an exchange of value like we humans, who have a spirit, do.  In fact, we humans do many things that separate us from the animals, namely because of our spirits. But that is another subject.  Even so, money is a spiritual thing and therefore it has to be treated as a spiritual thing if it’s going to improve your life, grow and produce the wealth that you really desire.

Be careful of slick entrepreneurs and their fanciful machines with ideas of how you can make money. Ask yourself if the ideas are reasonable and make sense.

1. Think twice about borrowing against your policy if there is a lower interest rate where you can access the money you need elsewhere.
2. Think twice about borrowing against your policy if you don’t have the means to pay the policy loan interest and the premium on that policy.
3. Think twice about starting another policy by borrowing against one policy in order to fund the premiums on the additional policy.
4. Think twice about “dumping-in” extra money into a policy if you are merely going to turn around and immediately borrow against your policy.
5. Think twice about believing that wealth comes merely by “running money through your policy.”

Here are the bold facts.

• Money that is “run through a policy” is money that could have been producing more wealth for you if you hadn’t run it through a policy in the first place.
• Participating whole life insurance is the best place to store money until you have a need for it. That is because it earns an average to above average rate of return for you in a secure and guaranteed environment.
• Before you borrow against those secure and guaranteed funds, you must make sure that you will be able to earn more than what the insurance company will charge you to use their money while that loan is outstanding.

And here is the single biggest mistake that policy holders are discovering the hard way after they have been encouraged to take a policy loan.

• The internal rate of return and the dividends that your policy provides, even though it is above the average rate of return by today’s standards, are not adequate enough to cover the interest the insurance company will charge you for your policy loan.

Knowing this beforehand will keep you from paying the fee for the “stardom” promised by “running money through your policy.”

Remember this.  Money needs to be treated as a spiritual object, if you want it to improve your life, grow and produce the wealth you desire.  And that means there are no short cuts.  You will need to discipline yourself to develop the management skills, cultivate your thoughts to develop the habits, and fertilize your attitude to accept the wealth that God has stored up for you and your stewardship.  Interestingly enough, not one of these three necessities can be short-termed by “running money through your policy.”  And like the Sneetches who got their star but never the stardom they were seeking, “running money through your policy” will keep you busy paying interest but will never provide you with the wealth you are seeking.