Borrowing through TheBloomStrategy Makes You Look Smart!

One of the questions we hear a lot is why wouldn’t I just borrow from the line of credit (LOC) that I have setup at the bank? An excellent question for sure and here is our thinking on this. The number one concern when borrowing from any other party including your LOC at the bank, is that you are paying interest to someone else with no structure in place to recapture that interest. This is an immediate loss to your personal wealth. Additionally, if the LOC is unsecured then essentially you have in place a demand loan that your bank can ask to be paid back at any time. If you do not have the available cash in savings you will have to find it somewhere. Some options might be to liquidate assets, pull money from retirement savings, borrow from a credit card (that is likely going to incur some heavy finance charges) or snuggle up to a family member or friend.

With TheBloomStrategy you are essentially borrowing from yourself. You are borrowing against the very capital that you have built through regular contributions and re-invested dividends. The only reason that a bank offers you a LOC against your home at favorable interest rates is because of the “capital” that you have built through your regular mortgage payments and market appreciation.

Let’s look at that LOC secured by your home. In this case it is highly unlikely that your bank would ever demand the credit line be paid off unless you were in default of paying the monthly interest charges or your mortgage overall. However, if you did want to eliminate the debt you are still in the position of having to find the money from somewhere in order to do that. Yes you could sell your home to pay it back but would you want to? You could sell other assets or investments but what if it is the wrong time to do that (2008/09 for example)?

With TheBloomStrategy you are borrowing against your own pool of cash, the very same capital that you have built up. You can at any time liquidate that cash in order to pay back the loan. You don’t have to go looking for the money or sell other assets.

The beauty of TheBloomStrategy is that you are working with capital that you have spent time building. This is an asset that you are using as security to finance anything you can think of, much like using your home as security for your mortgage or LOC. In Canada, with your home you can borrow up to 80% of its assessed market value before your lender asks you to put in place costly mortgage insurance. You will of course need to qualify and you will have to immediately start a principal and interest payment if the mortgage exceeds 65% of the market value.

With TheBloomStrategy you have access to a maximum of 90% of the cash value anytime with no questions asked. There is no costly loan insurance, you are already qualified and if you do borrow up to that 90% limit then you will need to make a payment for the interest amount only. We do recommend that you always begin a principal and interest payment no matter how much you have borrowed, it’s just sound financial management.

At Bloom Strategies “We Have Your Best Interest at Heart”.