How $16,200 Paid Off $111,600 in Debt 18 Months Early

What if $16,200 could erase $111,600 in debt… and finish the job 18 months early?

That’s exactly what happened when private family banking entered the picture.

One real story. One unexpected path. Results most people never see coming.

Hit play to find out how.

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Transcript

SPEAKER_00 0:20

Hey everyone, Mike back here with another episode of the Five-ish Minute Private Family Banking Podcast. I'm continuing my mini-series on debt elimination and making the argument that private family banking is the most efficient way to eliminate your outside debt. Two episodes ago, I introduced the idea of debt elimination through private family banking, and last time I talked about one of the biggest misunderstandings that people have about debt and how some a lot of people, most people are probably looking at the wrong number when it comes to debt. Go back and listen to that episode to find out if you're in that category. Today I'm going to walk through the first of two real life examples using private family banking for debt elimination. And we're going to show how somebody wiped out all of their outside debt using a fraction of the money that they would have used if they had just continued to make their monthly payments. And they did this while also building a pool of capital that's going to live well beyond their debt elimination and maintained protection on their life through the death benefit during the process. Okay. After these two examples, one of which I'll talk to you about today, you're going to see how powerful this can be and why I believe it's the most efficient way to eliminate debt. Without further ado, I'll get into it. Alright, so the first example I'm going to cover is a person we'll call him Joe, who has eight separate debts. Okay, all these eight debts total $111,600. So he's got over $100,000 in personal debt. Using our strategy, we don't worry about the interest rate. We don't worry about what the monthly payments are or how many years are left before each debt is paid off. Rather, what we do is we list the debts in order of smallest debt to largest debt. The smallest balance, uh, debt balance for this person, for Joe, is $4,500. And the largest is $40,600. Okay, the other thing I want to highlight is what we alluded to in the last episode, and that is the volume of interest. For Joe, the total of all of the monthly payments on these debts is $3,552. Of that, $1,437 is going to interest. That's about 40% of all of his debt payments that are going to pay interest to somebody else. So our goal, we want to capture that interest. We want to recapture that interest. We want to get that interest coming back to him instead of going to somebody else. Now, just making the minimum payments, the longest term is close to six years. So Joe is able to contribute $300 per month into his private family banking policy. That's the premium payment that he's able to afford. And after the first year, he has $2,475 in cash value available. So what he does, he takes out a policy loan for this amount and he pays that towards his lowest debt. He then continues to make his monthly premium payments and his minimum payments on all of his debts. Now during year two, two of his other debts got paid off simply by making the minimum payments. So rather than just celebrating and keeping that money for himself, Joe took that money and he transferred those payments to pay off the policy loan that he took after year one. So that $2,475 loan is now getting paid down with the money that he used to be paying to somebody else. Because he's doing this and because he's continuing to make premium payments, at the end of year two, he now has $5,000 available to borrow. So he takes out a loan and he uses that loan to pay off two more of his debts. Now, he transfers all of those payments the same way he did the first two, and now all of that money is going to pay back the policy loan. So between that action and his continued premium payments, he's able to pay off debts five and six at the end of year three. And by the end of year four, he is now able to borrow enough to pay off the last two. Now, all of his outside debt is paid off at the end of year four, but he still has that policy loan balance. So what he's gonna do is gonna take all those payments that he was making to somebody else, he's gonna use those to pay off the remaining policy loan balance, and he's gonna be debt-free by the end of four and by before four and a half years. Now, at this point, he's only paid sixteen thousand dollars, sixteen thousand two hundred dollars in premium payments, and yet he was able to pay off $111,600 of debt. That's nearly seven times his premium payments, and he was able to do that a year and a half early. Plus, now he has close to $20,000 in cash value available to use for other strategies that I'm going to talk about down the road. By continuing to make his premium payments, that pool of money will continue to grow. Oh, and he's had the death benefit as a backstop to protect his family or his heirs along the way. So, as I mentioned earlier, he's wiped out all of his debt a year and a half early, using a fraction of the money relative to the amount of debt. And while he was doing that, he was building a pool of capital that will long outlive his debt elimination, and he had the death benefit as a safety net while he was working through the process. You'd be hard pressed to find another financial vehicle that can do all of that, which is why I feel comfortable stating that the most efficient debt elimination strategy out there is exactly this private family banking. Next time I'm going to show you another example to drive the point home. Please like and subscribe, share with a friend, and I'll see you next time. Until then, out