Let's just make this clear and simple. Just about all the examples in MF101 discussing building wealth through removing equity from a home and repositioning it into cash value life insurance are faulty.
Because the examples with used where borrowers remove equity from a home to build wealth are based on the assumption that you can write of the interest in the 33.3% tax bracket (which 264(a)3 prohibits most of the time).
The "SIDE FUND"
Throughout MF101 the author alludes to a "side fund" where clients can grow their wealth in what appears to be a magical way not know to others. The flaws with the math in SSOYA are so glaring and problematic that the conclusions in the book are not "real world" and as such should cannot be relied upon when determining if using the strategies to grow wealth.
You can read about some of the examples by clicking on the link "ignoring the tax code."
In reality what is the SIDE FUND? It's a cash value life insurance is used as a cash accumulator because once funded properly (minimum death benefit to keep costs down), cash in the policy grows tax free and can be removed tax free in retirement.
For one simple example of how the numbers are faulty in the book, turn to page 153 where you can see how the author allows $8,000 a year to grow in this SIDE FUND The $8,000 a year investment into the SIDE FUND where somehow it magically grows tax-free, money management expense free, and mutual fund expense free.
THERE IS NO SUCH THING AS A MAGICAL SIDE FUND
The wealth building examples using the "SIDE FUND" in MF101 use a vehicle that grows 1) MONEY MANAGEMENT EXPENSE FREE, 2) MUTUAL EXPENSE FREE, 3) CAPITAL GAINS AND DIVIDEND TAX FREE, 4) INSURANCE EXPENSE FREE.
The average mutual fund expense is over 1.2%, the average money management fee on a small brokerage account is 1% and taxes on investments range from 15% for long term capital gains to 40%+ for short term capital gains and dividend taxes (depending on the state you live in.
Cash Value Life Insurance (also known as the "SIDE FUND")
If cash value life insurance is used as a wealth building tool, even the best and least expensive policies will have annual expenses of approximately 1% annually and upwards of 3% annually for other policies (these expenses include cost of insurance and per 1000 charge (which are other expenses such as commission, "dac" taxes, administration etc)).