This Privatized Banking Strategy is not about Rate of Return within the policy as much as it is about access to capital and what you do with that, outside the policy.

“It takes a lot of money to make these dreams come true. From the very start it was a problem. Getting the money to open Disneyland. About $17 million it took. And we had  everything mortgaged, including my personal insurance…” – Walt Disney

Walt Disney collateralized money from his life insurance policy and so was able to take a loan after the bank refused to lend him money to start a theme park, which is now the world famous Disney Land.

What do you think his internal policy rate of return was compared to his external rate of return. How much profit has Disneyland generated for him?

A number of years ago, presidential candidate John McCain secured initial campaign financing by using his $3 million life insurance policy as collateral.

In 1980, Doris Christopher used a life insurance loan to launch her struggling kitchen gadget company. In 2002, she sold that company — the Pampered Chef — to Warren Buffett for a reported $900 million.

                                                                                                                                                                                                                                                                                                                                           Even in the midst of the Great Depression, J.C. Penney used a loan against his $3 million life insurance policy to resuscitate his retail stores after the 1929 crash.

James Cash Penney (ca. 1902).jpgWhen the market crashed in 1929, JCPenney, then a dry goods store for mining and farm families, was severely affected.
As the sole owner, James Cash Penney took a huge dive in company and personal wealth. The financial setbacks were so devastating that it even took a toll on his physical  and mental health.
Fortunately, Mr. Penney had accumulated massive wealth inside his cash value life insurance policies, and was able to borrow against them to help the company stay afloat  and eventually rebound. If he hadn’t used cash value life insurance as a tool to keep his money safe and accessible, it likely wouldn’t have been there, and JCPenney would  have likely closed it’s doors.
When he died, the Grand Rapids Press wrote the following about him: “In the Great Stock Market Crash of 1929 he was almost wiped out, but with the money he borrowed on  his $3 million dollar life insurance policy, he was able to rebound.” Today, JCPenney takes in revenues of $18 billion a year and has over 1,100 stores worldwide.


 George Bailey of It’s A Wonderful Life wanted to use his life insurance as collateral also…but Potter wouldn’t do it.


 Cash Value Life Insurance helps tide over left handed pitcher and Wiffle-Ball Creator, David N Mullany in 1953







Stanford University

Pacific Mutual Life (now Pacific Life) ceremoniously issued its first policy to Leland Stanford, the company’s first president, in 1868. After his son, Leland Jr., died of Typhoid Fever in 1884 at the age of 15, the former California governor and U.S. senator and his wife, Jane L. Stanford, determined that because they could no longer do anything for their own child, they would use their wealth to do something for other people’s children. With a strong belief in the importance of a practical education for men and women that would prepare them to be productive and successful, six years of planning led them to establish Leland Stanford Jr. University in Palo Alto in 1891, with a pioneer class of 555 students (including Herbert Hoover).

Following Leland’s death in 1893, the fledgling university’s financial support became uncertain, to the point where Jane tried unsuccessfully to sell her treasured jewel collection in 1897. Intent on preserving the university and avoiding a “temporary” closure, she used her husband’s life insurance policy proceeds to help fund operations and pay faculty, allowing Stanford University to weather a dangerous six-year period of financial distress.




Working as a milkshake machine distributor in 1954, Ray Kroc (1902-1984) took notice of a successful hamburger stand in San Bernardino, Calif., which he called on, intending to sell brothers Dick and Mac McDonald more Multimixers. He learned they were interested in a nationwide franchising agent. Kroc, 52 at the time, decided his future was in hamburgers and partnered with the brothers. He opened his first McDonald’s in Des Plaines, Ill., in 1955 and bought out the McDonald brothers in 1961.

Kroc did not take a salary during his first 8 years, and to overcome constant cash-flow problems, Kroc borrowed money from two cash value life insurance policies (and also his bank) to help cover the salaries of key employees. He also used some of the money to create an advertising campaign around emerging mascot Ronald McDonald.

Using a progressive franchising arrangement and striving for consistency and standardization throughout the chain, McDonald’s grew to more than 700 restaurants within 10 years. Today, McDonald’s serves more than 50 million people each day through more than 30,000 locations in 119 countries.


Foster Farms

Foster Farms

In 1939, a young couple named Max and Verda Foster started Foster Farms by borrowing $1,000 against a life insurance policy. They invested in an 80-acre farm near Modesto, Calif., and began raising turkeys and, eventually, chickens.

By the 1960s, the company had outgrown the original farm and moved its corporate headquarters to the small California Central Valley town of Livingston, where it still resides. Today Max and Verda’s grandson, Ron Foster, is the CEO of the family run business. Foster Farms is now more than 10,000 employees strong, with operations in California, Oregon, Washington, Colorado, Arkansas and Alabama, and has a line of products that are sold globally.

Foster Farms specializes in fresh, all-natural chicken products free of preservatives, additives or injected sodium enhancers.


October 13, 2009 · Jennifer · No Comments
Tags: , , , , , , , , , ,  · Posted in: Walt Disney

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