Turning the Flow of Business Capital from Cash Out to Cash In
Thirty-something Kris Campbell, grew up as “a military brat” and moved to a different town or different continent every few years. In college she was a voice major learning to sing opera, but after graduation she landed a job as a studio photographer. Eventually that led her into business on her own, doing a unique brand of professional event photography.
As she explained during our interview…
“What we do is we go on-site to events, set up a full portrait studio, and print out studio-quality photographs on the spot. We do a lot of proms, graduations, and holiday parties, and we work with corporations on many events. We also do standard photography so we can go out and take pictures at a convention or other large event and then burn the images to a DVD for the client.”
The next thing she said I had to ask her to repeat, because I was sure I hadn’t heard her correctly.
We also print full, four-color photographs onto chocolate.”
“So the people eat their pictures?” I asked.
“They do! We can print your image in full color onto chocolate lollipops and chocolate CDs. We can even provide them live at events. So we can take your picture and then give you a lollipop with your face on it about five minutes later.”
Kris described how she first heard about Bank On Yourself…
“I was listening to talk radio and heard that you could redirect the money you’re paying to finance companies and the like back to your own pocket. I thought, I’m paying a lot of money to finance my company. Because of my business, I have a lot of credit cards, and I have a line of credit, and we finance equipment. We finance a lot of things.
I was carrying about $100,000 in debt. So I thought it would be nice if the money was coming back to me rather than going to all those finance companies.”
When I asked if she had ever calculated how much she was paying out in interest every month, Kris answered, “I tried not to.”
Kris started her first Bank On Yourself policy with a $21,600 annual premium. The policy was backdated six months-a perfectly legal way for someone to get two years’ worth of premiums into their plan in the first six months. This provides a great way to supercharge the cash value in the plan very quickly-so more equity is available, and it’s available sooner. In Kris’s case, though, for cash-flow reasons she pays her ongoing premiums monthly.
Once she was established with a B.O.Y. policy and in position to take her first loan, she retired a high-interest family obligation.
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“I used it to pay off my brother and sister-in-law. They had initially loaned me $1,500, at 15 percent interest. I hadn’t been paying them anything, because it was an investment for them. It was just sitting there building up interest, and the balance had grown to over $4,000. So I decided to pay it all off.”
Aided by a software program, her advisor helped Kris look at different combinations of interest rate and number of months for paying back the loan she took from her Bank On Yourself plan for the $4,000. Most people are happy to let their Authorized Advisor handle the math and offer alternatives, and Kris did, too. At first. But then, she says, “I ended up getting that software program” so she could juggle the parameters and make loan payback decisions on her own.
My biggest surprise came when Kris started explaining how she was almost immediately able to become her own financing source for an expensive device her personal corporation had been leasing.
“My company owed $35,000 on the lease for the piece of equipment that creates the photos on chocolate, and my lease payments were $1,026 a month. I took $35,000 out of my house with what they call a cash-out refinance, and I loaned that money to my company.”
Kris finds a clever way to quickly become her own financing source for a major business purchase…
Her company paid off the equipment lease, Kris explained, so it owned the equipment outright. She noted, “And now my company is paying me the $1,026 a month, to pay me back the money I loaned it. I’m now using that money to help fund my Bank On Yourself plan.”
So Kris had taken the $35,000 from the refinance and loaned it to her company, and the company had paid off the lease. Every month her company makes a payment to her on the $35,000 loan, and she turns around and puts that money into her policy. She had quickly become her own financing source for a major purchase she had been running through an outside lending institution, while freeing up money to fund her B.O.Y. plan.
I thought that was very creative and resourceful.
Redirecting the finance charges and principal she was paying the leasing company into her own pocket was just a starting point for Kris. She also spends about $20,000 every year on photographic equipment for the business and has now set a goal of financing all that through her policy, too.
“All the interest that would just be going down the drain is now going into funding a policy for myself, and it’s providing me with life insurance at the same time.”
Not surprisingly, when Kris ran the idea of B.O.Y. by some of her business advisors (who, like most people, are ignorant of the facts about B.O.Y.), they tried to discourage her.
“I went to a consultant who helps me make decisions in my business, and I told him I had come across this idea about redirecting some of my business debt by using a B.O.Y. policy. He thought I was crazy and told me I should never buy that type of life insurance.”
Some people would have dropped the idea right there. Not Kris; it became clear during our interview that she is a woman who has achieved the level of success she has by keeping an open mind and challenging conventional thinking. (How many photographers would even consider investing $35,000 in equipment that prints edible photos?)
Kris went back to her Bank OnYourself Advisor and “put her through the mill. I asked her some tough questions and she was able to answer them all. She has been unbelievably patient with me.”
As a result, she decided to “take most of the money I was putting into the other policy each year and put it into my B.O.Y. plan instead. “Kris also had been funding a variable universal life policy. After learning about the many advantages of the specially designed type of whole life policy used for B.O.Y., Kris decided her B.O.Y. policy had “better growth potential” and certainly more guarantees. (In fact, the policy Kris had can even lose money and would not be an appropriate type of policy to use for B.O.Y.).
When I asked Kris what message she hoped people would take from her story, she didn’t skip a beat before replying…
I would let them know that a lot of people operate their lives like they’re victims of circumstances, but you do have options to take control of your financial destiny. You really owe it to yourself to be open to the possibilities out there and find ones that make sense for you.”
Businesses and professionals who spend significant sums leasing or financing vehicles, equipment, inventory, or even office buildings will find that all of these expenditures could potentially be financed the B.O.Y. way. The difference this can make over time can be staggering.
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Did you know that the Bank On Yourself wealth-building method has NEVER had a losing year, it has stood the test of time for more than 160 years! More than 500,000 Americans already use Bank On Yourself for true financial peace of mind. And famous people including Walt Disney and J.C. Penney have used this method, too.
To find out how you can grow your nest-egg safely and predictably, even when stocks real estate and other investments tumble… and how much money you could have – GUARANTEED – on the day you plan to retire, request your FREE no-obligation Analysis and Recommendations now.
You can use Bank On Yourself to self-finance business vehicles, equipment, inventory, or even office buildings.
In addition, some business owners may also qualify for tax deductions for interest and depreciation. A knowledgeable tax advisor can provide appropriate guidance. (A referral to a Bank On Yourself Authorized Advisor who can do a free, no-obligation B.O.Y. business analysis for you and may also be able to direct you to a CPA in your area familiar with the tax implications of B.O.Y. for business owners and professionals is available here.)
This is an excerpt from Pamela Yellen’s New York Times best seller, “Bank On Yourself: The Life-Changing Secret to Growing and Protecting Your Financial Future.”