Have You Heard Ben Franklin’s Story?
When Benjamin Franklin died in 1790, he left $1000 to each of the cities of Boston and Philadelphia. His bequest came with some strings attached: Specifically, the money was to be invested in stocks and could not be touched for 100 years. At that point each city could withdraw up to $500,000 for designated public works. Any remaining monies could not be touched for another 100 years. Finally, 200 years after Franklin’s death each city would receive the balance – which in 1990 amounted to $6.5 million, with no money having been added over all of the years.
This story was told in the book “ Money Master The Game”, by Tony Robbins
How Did It Grow? Through The Magic of Tax Free Compounding.
Today, if you are in a high tax bracket and have to pay 55% estate tax after the death of your spouse you would be shocked at how little your money would grow in comparison to Ben Franklin’s money. Between State, Federal and for some people even city taxes, compounding is drastically reduced.
This is why Bill Gates, Warren Buffet and many others set up foundations.
IRA’s, 401k’s and Profit sharing plans are helpful but taxes eventually are paid and for wealthy people can wipe out over 70% of the capital. Often estates have to liquidate IRA’s to pay estate taxes creating additional income taxes that are not deductible from estate taxes.
How can you harness the power of tax free compounding?
We call it a Tax Alpha Portfolio
To qualify for a Tax Alpha Portfolio you generally need to be younger than 60 years old and in good health. The exception would be for people who are older and wealthy seeking to enhance their estate free of taxes. They still must be generally healthy.
We have two different plans:
One for people and companies that have over $5,000,000 in invest- able assets to qualify. Once they are qualified, they must invest a minimum of four annual payments totaling at least $500,000 over the period
A second plan is for people who can invest $15,000 or more over a five year or longer period.
To learn more about the second solution, ask me for the book entitled, “ My Family Financial Miracle”. You may e-mail me at firstname.lastname@example.org or call me at 860-963-0722.
I have personally benefitted from the solutions described above. I was able to compound monies tax free and even access my principle without taxes during my life. There is no more powerful tool you can use if you start early enough.
Robert K. Mann
Advisor’s Capital Investments, Inc.