Current savings strategies becoming outdated, say local advisors

Many Americans are sitting on thousands of dollars' worth of home equity and enjoying a sense of security knowing it's there. But it's misguided security, say Tom Greenwell and Jerry Heintze, co-founders of Arizona Equity 2 Income, whose mission is to assist homeowners in building wealth and creating financial security. At a time when the nation faces record high personal debt, a softening real estate market and uncertainty surrounding the social security system, the notion of home equity as a financial safety net is outdated.

"Unlike our parents and grandparents who lived in the same house and had the same job all their lives, Baby Boomers live in a world of constant change," Greenwell says. "We're also living longer than ever before and face a real threat of outliving our savings."

According to conventional wisdom, we should pay off our homes as soon as possible and sock away as much as we can in IRAs and 401k plans. "If you follow this advice, you'll lose your biggest tax deduction -- your mortgage -- and have a bunch of money in a 401k plan, which is 100% taxable. It's really reverse tax planning."

Greenwell and Heintze propose a different strategy: reposition your home equity, restructure your debt and secure a side fund with tax-free growth, access and transfer. This transformation offers four significant benefits: safety, liquidity, improved rate of return and tax-favored status.

If someone were to lose his job, for example, and had already separated his home equity, he'd have access to the funds to take care of himself and his family until he got a new job. In the meantime, his equity would be hard at work earning returns, money that will be available to him tax-free whenever he needs it.

"We've discovered a way for people to build their own banks and then borrow from and pay themselves back," Heintze explains. "This gives them unparalleled financial security and control and opens up many new possibilities."

Source: Arizona Equity 2 Income

Web site: http://arizonaequity2income.com/