Joseph Kimbrough, the Founder of Apex, a private equity fund specializing in acquiring multifamily assets to ensure strong returns for investors, recently discussed the benefits and strategies of combining infinite banking with passive multifamily investing. Infinite banking involves setting up a whole life insurance policy that offers both a death benefit and a cash value that grows tax-deferred over time. Investors can borrow against the policy’s cash value to use for investments and repay the loan at a lower interest rate, allowing for control over their finances.
By combining infinite banking with passive investing, investors can access liquidity and cash without dealing with banks, customize repayment terms, and save on interest. This strategy provides flexibility, financial independence, and the freedom to invest in opportunities that offer quick returns. When paired with passive multifamily investing, where investors leverage the expertise of others to build passive income and wealth, investors can enjoy benefits such as group purchasing, passive income distributions, and tax advantages through depreciation and capital gains.
When using both strategies together, investors can have quick access to investments while maintaining growth in their policy cash value. For example, an investor can borrow from the cash value of a whole life policy to invest in a multifamily project offering a preferred return, receiving distributions from the property and reinvesting them back into the policy. However, it’s important to be mindful of liquidity needs, risks, and potential consequences of excessive borrowing or mismanagement of funds when combining these two strategies.
This approach may be most advantageous for high net worth individuals who can open multiple policies to avoid excessive borrowing or lapsing a single policy, as excessive borrowing or high interest rates could eat into returns from real estate investments. However, it may not be recommended for early career investors or those who cannot afford the costs associated with borrowing from the policy. Consulting with a licensed professional for personalized advice on this strategy is crucial to ensure suitability for specific financial situations.
Forbes Business Council recognized Joseph Kimbrough’s expertise and advice on these strategies for investors looking to maximize wealth and achieve financial independence through infinite banking and passive multifamily investing. As a trusted figure in the private equity industry, Kimbrough’s insights provide valuable guidance to investors seeking innovative ways to grow their wealth and navigate the complexities of financial planning in today’s market.
