A YouTube monologue (Jayson Lowe, Feb 2, 2022) explaining how the speaker plans to fund a $10,000 family vacation using passive-income assets. The approach combines a dividend-paying whole life insurance policy (wife's policy with $105,000+ cash value; allowable $95,000 loan; cash value grows ~$19/day) and private lending (promissory note or first mortgage) yielding ~10% annual interest. Speaker walks through steps (take policy loan → fund private lending → collect interest monthly → pay down policy loan monthly → pay policy interest before year-end → repay loan and pay off policy) and gives an annual example: $95,000 lent at 10% → $9,500 interest; policy-loan interest and taxes reduce net profit to about $3,132; plus $6,935 cash-value growth for a total just over $10,000.
Chapters
Have you ever wondered how you could get your money to work for you? Income that's coming in even while you're not working? So it's like making money while you sleep or making money while you're not working. I just wanted to use one of my stories, my family stories, and that's about how we're funding our family vacation. So we haven't had this vacation yet. If you ever wondered how you could get your money to work so that you don't have to, that's what I'm going to talk about today.
Now, what's the whole idea behind passive income? Well, I think most of you understand that it's about having income coming in without you having to physically work for it. Now, why would you want that? So, you know, for a lot of people, it's how they get freedom from doing what they're doing. Now, other people, as they get older in life and they want the time to be able to travel or whatever, you still need access to money and, you know, you can either build up a pile and start using it, or you can have forms of passive income income that's coming in even while you're not working. So it's like making money while you sleep or making money while you're not working. Now, if you ever wondered how you could get your money to work so that you don't have to, that's what I'm going to talk about today. And I really wanted to tell you one of my own stories about passive income, how you can use it and how you can make it. So with that, I just want to give you a bit of background. Anything that we go to do in life that's worthwhile doing takes effort, takes determination and time. So I haven't found no silver bullet. And if you have, let me know a way to achieve some of these things without putting time and effort into it. So to really have passive income, you have to apply yourself to get to there. Now, there's a lot of great resources that are available out there to you on that subject. Now, one of it is what we teach people as part of becoming your own banker. This book by Arnel Sanash, you know, really gives you an example of how you could create passive income for your family. And, you know, you can get to a stage of life that you know you're not working and you're actually able to enjoy income out of that system. So that's just one of the great books. I'd suggest you read another one. And I think a lot of you would be familiar with. This one is Rich Dad, Poor dad by Robert Kawasaki. In this book, he spends a lot of time talking about how and why and what are some of the ways to get there. Again, it's about having income. And if you take the time and you work at it, you can get to a place where it really becomes passive or you don't have to be working at it every day, but that's not going to happen overnight. That's a great book. I just suggest you read it if you never have. Another one, which I've come across in the last little while, which I highly recommend people read, is this one by Justin Donald, and it's the Lifestyle Investor. Just a great amount of information in this book and it really coaches you how to go about doing it so that you can truly get to a place in your life where you're unable to enjoy the lifestyle you want through the use of passive income. For the case study that I'm going to show you today, I just wanted to use one of my stories, my family stories, and that's about how we're funding our family vacation. So we haven't had this vacation yet, but I'm going to show you how we're going to fund it and how we're going to do it with the use of our money so that we don't have to work and our money can work. So we're going to do it through assets and we're going to do it through passive income. So let's take a look at that example. So here we are funding the family vacation. So just so you know, we set our budget at $10,000. I'm not going to give you a lot of details about what we're doing on the vacation, but we're getting all of our children together and our significant others and we're spending time enjoying time together as a family. That's really our primary focus and it's something we really value. So we thought about, well, how can we do this in a way that we put our money to work so that we don't have to. So we're going to do it, like I said, with assets. We're going to use assets to pay for the vacation. And I love this quote by Robert Kawasaki, rule number one in his book rich dad, poor dad, know the difference between an asset and a liability and buy assets. Yeah, that's as simple as it is in some ways. Simple, but probably not easy is what you're thinking, which is true. It takes work and time to get to there. So we're going to take assets and pay for our vacation. One of those assets. Hey, there's a, here's a big surprise if you know me. It's a dividend paying whole life insurance policy. So this is one of my wife's and she presently has a 105,000 plus dollars in cash value and she can safely take a $95,000 policy loan. And the thing I wanted you to understand about that particular policy that she owns, the cash value is going up every day by contract at $19 a day. And it'll get better in the future, but I'm talking about presently. And another great reminder of what is an asset. Again, I love Robert Kawasaki's definition. An asset puts money in your pocket. And why building? Well, it takes money out. So use an asset to do this. This is a great asset. It puts money in our family coffers. Every day, whatever we're doing, we wake up the next day we have more value in our policy. So the other asset, and this is the one that, you know, we've been taking the time to investigate and we're going to use one of two methods. One is either a promissory note or the other one is a first mortgage. And this is all about private lending. It's very available out there. You just need to do your homework, find the right party to work with. Again, I go back to Justin Donald's book and it's, it's about, you know, how you can protect yourself. What is the steps you need to take to make sure, whatever, wherever you're putting your money, you up the likelihood that you're going to get it back and you're going to get a return. So you know, when you look at those options that are out there, you can go up to more like 15%. It's quite doable in some of these opportunities. For this example, I'm simply going to use 10%. And so on an annual perspective, when you invest $9,500 or $95,000, you're going to get 9,500 back as interest income. So that's the two assets that we're going to use to achieve this. So what is the process that we're going to follow? Well, step one, we're simply going to apply for the policy loan. Step two, we're going to use that policy loan to either put the promissory note in place or the first mortgage, private lending. Then we're going to take the month of the interest because that's what and how we'll get compensated and we're going to pay down the policy loan each and every month. And then we're going to pay interest on the policy loan prior to the end of the year because, hey, I know enough about this process and I want to pay that off and not have it compound on me. So I'm going to pay that interest off. Then there's taxes. Yeah, I calculated the taxes. You have to account for that stuff. And then basically you receive, at the end of that period of time, you receive the money back from the borrower and then you pay off the policy. So that's really the process that we're going to use for this objective. And again, if you look at this, you may want to really ask yourself, hey, maybe I want to do this again. Because one thing you learn about money is that if it's not in use, it's really not worth anything. So you got to keep your money in use, put it to use for you, and help generate that passive income that we're talking about. So how does this all look? What's the math look like? All right, so here's just a quick look at the math. So there's the interest that's going to come in every month. It's going to be paid against the policy loan. And over that first 12 months, we're going to get $9,500 in interest. Now the interest rate, we're going to pay it back. Interest rate on the policy loan going to cost 5,300, $324. So we got to consider that. Now the taxes. So that'll be the tax rate that's, you know, after you claim your interest costs. And just knowing what my wife's taxable income levels like that will be, the taxes that we estimated that will cost us in that year. So the net profit, really, you consider all those things is like 31, 32, $3132 in that first year. Not bad. Hey, it was all passive, really didn't do anything to gain that $3,132. The other thing I want you to think about is every day while we're doing that, for that full year, the cash value growth in that policy was $6,935. You add those two together, it's just over $10,000. Really, your objective was achieved so you were able to fund the vacation. And hey, what am I going to do? What are we going to do? In all likelihood, we're going to keep that money earning for us and we're going to keep this process going. We're just going to make sure we've got a good party that we're working with and reduce the likelihood we're going to lose our money at any point through following the proper steps. So again, that's just a quick example of how you could do something as simple as putting your money to work so that you don't have to. And that's a very specific example of how we are using it in 2022 to pay for an upcoming family vacation. Again, that's our passive income story. And how we're making money and how we're putting it to use. I hope you found this valuable and I really encourage you that if you really want to get your money working so you don't have to, there is ways to do it. We have some great videos on this site, this channel where you can just go in and take other examples in. And we're always open to someone reaching out to us and saying, hey, can I have some ideas? Can we talk about this? How could I do this? And I always tell people, yeah, we'd love to have that conversation. It all starts with a good foundation, the foundation for how I do all things financial. It's through my dividend paying life insurance policies and the process called becoming your own banker. So with that, just take in some more of our information. I hope that you have the time and the desire to do so. And with that, take care. Thank you.
