 |
frequently asked questions
What is OwnYourCarforFREE.com about (About Us)?
Why would I want to build my own private bank?
How does Be My Own Banker give me 10 to 20 percent of return with no risk?
Why does an 8% auto finance rate ACTUALLY cost me 17 percent of my money?
What is LOC (Lost Opportunity Cost)?
How does My Own Private Bank work (1)? - The fundamentals.
How does My Own Private Bank work (2)? - The initial capitalization period.
How does My Own Private Bank work (3)? - The wealth accumulation period.
How does My Own Private Bank work (4)? - The wealth distribution period.
Who helps set up and administer my own private bank?
I would like to know more about building my own bank. What should I do?
If you know what’s really happening, you will know what to do!
The OwnYourCarForFREE.com website is a service of Eugenia Chao, providing independent financial education and consultation - your resources for private banking, insurance, retirement and financial planning.This site is created to show how you can create and preserve your wealth, and enjoy your live at the same time without complicating your financial life, taking unnecessary risks and incurring losses.
Often the public get confused, intimated, or misled by the media and even by the financial services community itself to think that creating a wealth plan is complicated. Don't let them confuse you. Understanding of the time-tested, proven principles and facts is all what you need.
Auto financing is an example to show how you can control your wealth and the direction of your money flow, and use the principles and strategies that banks and financial institutions have been using over 100 years to your own benefits, which they hope you never learn.
Why would I want to build my own private bank?
Banking is a very important part of our lives. We finance everything we buy. We either pay interest to someone else or we give up interest we could have earned.
The volume of money paid or loss annually by the average American towards the cost of financing our cars, etc… is staggering.
Rather than fighting to get a higher rate of return on your savings and investments, it might be as important as, if not more important than, taking control the directions of your money flow.
Here is a short list of the benefits:
- Your savings from transaction costs, interest savings, money in action growth and opportunity costs could be over hundreds of thousands, even millions of dollars over your life time.
- The interest to pay on the transaction…will go into your own pocket…not to the outside banks.
- You may never have to negotiate loan terms, rates and conditions with a outside banker again once your private bank is established.
- No one, but you, decide when you want to access the money. No government rules, or restrictions, and no early withdrawal penalty.
- With a one-time capitalization requirement, you will enjoy lifelong benefits.
What is LOC (Lost Opportunity Cost)?
In the auto finance example, it represents financial charges on auto payments and the lost future growth on the money paid for financing charges or your lump sum cash payments.
If you buy an auto with cash, you don't pay any direct financing costs. However, the money that you take out of savings or an investment to pay for the auto has an opportunity cost.
For example, if you take $25,000 out of an investment account that earns an average of 8 percent a year, the opportunity cost is about $9,000 over four years. That's the interest your money would have otherwise earned had you left it alone. When you pay cash for the car, you lose the opportunity to have your money grow. $9,000 is your lost wealth in four years. The same $25,000 will grow to $543,113 in 40 years, which could be your additional retirement income.
If you get an auto loan, the major financing cost will be the interest expense, loan fees and the upfront costs to the lender when you close a loan. You lose money on the financial charges and the future growth on these interest payments.
If you lease an auto, the main difference from borrowing is that you don't own the auto at the end of the lease term.
Back to top
Auto finance uses amortization schedule. Each loan payment consists of interest and principal repayment. Payments near the beginning of a loan contribute more interest, and less principal, than payments near the end of a loan. Because the majority of the payments go to interest at the beginning of the loan, your loan balance is left longer to incur the interests.
If you have a 48-month $25,000 auto loan with 8% interest, your actual financing charge is 17.181% of your loan.
Total Repaid: $29295.36
Total Interest Paid: $4295.36
Interest as percentage of Principal: 17.181%
Get your own personalized rate.
According to American Demographics, the average American will SPEND $1,860,000 on goods and services in his or her lifetime. More than HALF of all the money you make in your lifetime will go towards taxes, debt payments, and fees.
By being your own banker, which financial institutions hope you NEVER do, you are taking back those interest and financial charges that you are giving away to outside banks. The savings on interest, fees and tax gives you the return on your money as good as a double digits return GUARANTEED with no risk. (See an example on why an 8% auto loan actually costs 17% of your money.)
In addition, being your own banker, you are guaranteed to have more money every year. You can enjoy life more and have less stress. You can gain wealth without sacrificing the conveniences and comforts of your life.
How does “My Own Private Bank” work (1)? The FUNDAMENTALS.
Whenever you need to make a big purchase, you can borrow the money from yourself, instead of borrowing from the outside bank. You pay the loan back to yourself, plus the interest you would have paid the outside bank. Now it's you who make the big profits the outside bank would have made.
Back to top
How does “My Own Private Bank” work (2)? The initial capitalization period.
Building your own private bank is NOT a get rich quick scheme. It's a get rich slowly but surely or a STAY rich strategy. It’s based on the same principles and strategies that banks have been using over 100 years, plus compounding interests growth and IRS-approved tax benefits.
Just like any outside bank, you first start building your own bank through a “capitalization” period. During this period, a pool of money is accumulated. When the pool of money is large enough for your car purchase or other major purchases, you can take the money out to pay for your purchases, and then make the payments that outside bank will charge you back to your own private bank account.
Usually, the “capitalization” period of your own private bank will take 3 to 7 years. However, you can use your own bank sooner in 18 months if planned.
Back to top
 |
|
After years and years of using your private bank to finance all of your purchases, and enjoying the savings on financial charges and taxes, along with the power of compounding interest growth, at the retirement age, you can use the money in your private bank as the additional retirement income, TAX-FREE, with a proper planning.
If you prefer, you can leave the fortune to your family, income tax free, too!
Back to top
The mutual financial company is hired to set up and administer your own private bank. You, as an owner of your own bank, will earn interest and the dividends paid by the financial company through profit-earnings.
Back to top