The number 1 biggest destroyer of wealth is TAX! Man, it's a bummer! Taxes take a chunk out of the money we earn so we have less to save, spend, invest.
While we can't completely eliminate taxes living in Canada, the opportunity to not pay taxes while we earn is a super advantage for wealth accumulation. It can be a pick up of 15 to 50% on the dollar that could exponentially grow wealth.
What can give you this tax advantage? One way is to save or invest inside your permanent life insurance policy.
So in addition to tax-free death benefit payout to beneficiaries, you can also grow your fund value tax-exempt within certain limits. Growth in the form of dividend, interest or bonus are received tax-free. Whether you get a predictable return using a whole life policy or track market performance with a universal life policy, not having to carve out a chunk of this growth in taxes each year means more is invested for the power of compounding to do its magic over time.
And that's not all. To top it off, there are ways policyholders can access cash value without causing a tax event. Look out for the next in this series, to learn more.
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