- 11,512
4.9%... of WHAT?
2% of $100,000,000 is $2 million
But 4.9% of $20,000,000 is $980,000
Don't fall for "dividend rate selling". It's really unethical.
Misrepresentation and Ignorance: A Dangerous Blend for Ethics
Favorite BYOB, Infinite Banking Concept System Video?
- Thread starter jcorr
- Start date
4.9%... of WHAT?
2% of $100,000,000 is $2 million
But 4.9% of $20,000,000 is $980,000
Don't fall for "dividend rate selling". It's really unethical.
Misrepresentation and Ignorance: A Dangerous Blend for Ethics
Lloyds of Lubbock
Guru
- 757
Alan
When you borrow from your policy your loaned money gets a dividend.
You are getting that dividend whether you borrowed or not.
If it is a variable loan rate, the dividend is the same rate as if you did not borrow.
If it is a Direct Recognition Company, the dividend interest rate is effected by loans.
To use Guardian as an example.
A loan rate on an older policies is 8%.
There is a hundred basis point spread, so your dividend crediting rate on the loaned money is 7%
Your current div rate is 5.65 so you have a positive adjustment of 135 basis points.
The overall cost of your loan is the interest rate charged plus the change in dividends.
So you have an 8% start and an increased dividend of 135 basis point making your net cost of the loan 5.65 irrespective of adjustment features.
It is a bit complicated.
If you would like send me a private email to go into this in more deatil
When you borrow from your policy your loaned money gets a dividend.
You are getting that dividend whether you borrowed or not.
If it is a variable loan rate, the dividend is the same rate as if you did not borrow.
If it is a Direct Recognition Company, the dividend interest rate is effected by loans.
To use Guardian as an example.
A loan rate on an older policies is 8%.
There is a hundred basis point spread, so your dividend crediting rate on the loaned money is 7%
Your current div rate is 5.65 so you have a positive adjustment of 135 basis points.
The overall cost of your loan is the interest rate charged plus the change in dividends.
So you have an 8% start and an increased dividend of 135 basis point making your net cost of the loan 5.65 irrespective of adjustment features.
It is a bit complicated.
If you would like send me a private email to go into this in more deatil
Lloyds of Lubbock
Guru
- 757
Dividend formulas are not uniform.
Also is the dividend net or gross?
A very good friend of mine used to say, if you live by the numbers, you will die by the numbers.
When NML had the highest rate not to long ago every one of their agents threw it in the clients face.
They had more marketing material than anyone touting that number.
Times have changed now they market how big their total payout is.
Also is the dividend net or gross?
A very good friend of mine used to say, if you live by the numbers, you will die by the numbers.
When NML had the highest rate not to long ago every one of their agents threw it in the clients face.
They had more marketing material than anyone touting that number.
Times have changed now they market how big their total payout is.
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