Category Archives: Building Wealth

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Learn how to money works, build wealth, and protect your income and assets.

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I want to share this book “Saving Your Future” with you because the information in this book has changed my life, and I hope it will change yours too.

You might be thinking why “Saving Your Future” instead of “Saving for Your Future”? We all know we need to save for our future. But the more urgent problem is many of us may not have a future…many people nowadays live paycheck-to-paycheck and is just one paycheck away from poverty. Because of that, there is no money left at the end of the month for investing. And worse, many carries never-ending credit card debts, mortgages, student loans.

So, where is your future? Can you depend on your employers for  your retirement? Do you have a pension plan? How much would you get from social security? Can you survive on your social security income? Do you have savings? Are you saving enough?

This book contains a lot of simple financial strategies. You don’t have to read from front to back in sequence. You can look at the table of content and jump straight to the chapter that best fits your financial goals.

Consider signing up for the Financial Strategies Workshops in Honolulu, HI. There is no substitute for learning in a fun and interactive environment with experienced financial advisors.

Be Your Own Bank

Exploiting the living benefits of a cash value life insurance

The cash value life insurance is a little known secret for real estate investment or anyone planning their retirement.

The indexed universal life is the best investment vehicle. Why?

Cash value life insurance, as in it's name, is life insurance with cash value. Similar to a savings account associated with your life insurance. The difference is this "savings account" grows tax-free as part of the life insurance.

This is the bonus for real estate investors. Short on cash. Borrow from your cash value account interest free. How does that sound?

Let me clarify this a little. Every cash value life insurance policy is different. Most charge interest rate for borrowing. But some charge more and some charges less. The one that I have, charges 0.75% for first 1-9 years, then 0% after 10 years. Contact me to find out more.

The other thing is when you borrow money from your cash value, you'll not taking money out from your account, you're borrowing against your cash value, which is being used as a collateral for your loan. This is an added bonus, because your cash continues to grow tax-free while you're enjoying your extra cash interest-free.

Another bonus with borrowing from a cash value life insurance is that you don't have to repay your loan it you don't want to. How? Good questions!

Remember it is a life insurance policy. So it also has a face value. When you die, the insurance will pay off your loan with your policy's face value.

Isn't this a great idea? People always think that life insurance only benefit the family after you diet, but with a cash value life insurance, you got to benefit from it too before you die.

Need help with retirement planning?

Many wealthy people use a cash value life insurance for their retirement planning. Say you pay your insurance premium every year and contribute to the cash value at maximum level every year for thirty years, and never taken any loans out. Now you're 65 years old, and ready to retire. By now your cash value should have grown significantly over the years TAX-FREE.

Now you can stop paying premium, because your cash value is be used to pay your premium, and at the same time pay you money for the living expenses. Again, this pay-out is given in the form of a loan, so the cash value continues to grow while you enjoy your retirement, and you do not pay tax. Remember, Uncle Sam taxes earnings only when you withdraw it, but not loan interest.

Read Do You Have the Retirement Plan to Retire Rich?

With that all said, you might be wondering what's the best cash value life insurance?

I would have to say hands down the indexed universal life. This is like the Rolls Royce of life insurance. What make this particular policy so special is that your cash value never loses money. The one that I have tracks the indexes of Europe, Hong Kong and US - Euro Stoxx 50, Hang Seng and S&P 500.

As investor, you probably knows the risk of investing in stock markets - the ups and the downs. In this product, there is a floor of 1%, which means, even if the stock market tanks, I still get 1% return on my cash, and the ceiling is 13.75%, the maximum return I can get. I think this is pretty good deal because when you lost 5% in the stock market, you need a 10% return to regain what you lost. With this policy I have no loss, only gains.

Zero Down USDA Home Loan

For home buyers today, there are two mortgage programs that offer 100% financing.

The first is the VA loan from the Department of Veterans Affairs. It's available mostly to active duty military personnel and veterans nationwide.

The other is the U.S. Department of Agriculture's Rural Development Single Family Housing Loan Guarantee Program. The USDA home loan is sometimes called a "Rural Housing Loan" or a "Section 502" loan.

Similar to FHA loan, USDA does not generate the loan. It insures mortgage lenders against loss 100%. The program is meant to drive homeownership in rural and underdeveloped areas.

The USDA Home Loan program in Hawaii offers very low interest and mortgage rate than any other institution. USDA home loans in Hawaii also offers the options for renovation, repairing, building a home from scratch and even paying off old debts.

The USDA does change its "rural areas" fairly regularly and an expanding town is apt to lose its rural loan eligibility with the next census. Homes which are USDA-eligible today may not be USDA-eligible next year.

Benefits of a USDA Home Loan

USDA home loans are very similar to conventional loans backed by Fannie Mae and Freddie Mac.

Unlike conventional loans, USDA home loans have no down payment requirement, which allows a home buyer to finance up to 100 percent of its purchase price. The U.S. Department of Agriculture assesses a two percent mortgage insurance fee to all loans, and the cost may to be added to the loan size at the time of closing, as can the costs of eligible home repairs and improvements.

RELATED ARTICLE: Why Private Mortgage Insurance Sucks

You can't do that with a Fannie Mae or Freddie Mac loan.

Another benefit is that its annual mortgage insurance fee is just 0.40%, which is less than half of most private mortgage insurance charged on a comparable conventional loan, and only one-fourth of what the FHA will charge.

USDA home loans do not have loan size limitation, which means home buyers can theoretically borrow more money with a USDA mortgage than with a conventional, VA or FHA loan.

Loans insured by the U.S. Department of Agriculture are available as 30-year fixed rate mortgages only, and come with their own USDA Streamline Refinance program.

Qualifying for USDA Home Loans in Hawaii

The factors that will determine your USDA eligibility are current income, credit history and also the zip code of the country where the home is situated. USDA loans are specifically for moderate to low income households thus; there is an income limit for each USDA home loan eligible county.

To be eligible for USDA Home Loans in Hawaii, your yearly income should be less than 115% of the average median income for that area. You will qualify for a USDA Loan if your income is quite less than the average median income.

Check here to see if you meet the USDA Loans Income Requirements

You should have an average credit score of at least 640, maintain a steady flow of income, and should have no foreclosures that are unsettled and no bankruptcies in the past 3 years.

Get your FREE credit score at

RELATED ARTICLE: Increase Your Credit Score to Get Your Mortgage Pre-approved

Other qualifying criteria:

• The subject property must be a primary residence
• The buyer must meet a qualifying ratio of 29 percent for housing costs; and 41 percent for total debt
• The buyer may not own another home within commuting distance of the subject property

Most importantly, the property must be located in one of the USDA designated areas. USDA property eligibility is determined by census tract density. USDA designated rural area usually has a population of less than 20,000 residents. Because of the way the USDA defines "rural", there are plenty of ex-urban and suburban neighborhoods nationwide in which USDA loans can be used.

USDA-designated areas in Hawaii:

Big Island – all areas except Hilo

Kauai, Lanai, Molokai – all areas

Maui – all areas except Kahului and Wailuku

Oahu – Village Park and Royal Kunia subdivisions, Ewa Beach, Makakilo, Kapolei, entire Waianae Coast, Central Oahu from Whitmore Village North to North Shore and Kunia, entire North Shore, Windward Oahu from Kahuku South to Ahuimanu, Waimanalo from Olomano Golf Course to Sea Life Park.

If you fulfill all these criteria, you should be eligible for a USDA Loan in Hawaii.