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We all love a good “self-made millionaire” story – the kind where someone starts out with a laptop, a little hustle and a caffeine habit, and somehow becomes financially free.
But the thing is: building real wealth isn’t magic, luck, or some secret handshake that only extremely rich people know about. This usually takes a few smart, repeatable money moves done consistently over time.
GOBankingRates spoke to licensed insurance broker and founder Michael Benoit California Contractors Bond and Insurance ServicesTo discuss money hacks to skyrocket your net worth.
Premium financing for investment capital
Benoit said the first money hack he was able to implement was to switch from lump sum to premium financing.
“Most insurance companies allow you to pay your annual salary over 10 months with interest rates ranging from 6% to 7%,” he explains. “It’s counterintuitive at first because you’re paying interest. But here’s what I thought: If I can earn a 10% to 12% return by investing that capital elsewhere, I’m making money on the spread.”
His first year of doing so saved $180,000, which he immediately invested in rental properties and index funds.
Benoit reports, “The returns I earned were far greater than what I paid in financing fees. From my experience working with contractors in the western states, this strategy alone can produce an additional $50,000 to $200,000 in working capital, depending on the size of your operation.”
Strategic relationships for high-profit contracts
According to Benoit, it’s all about getting tied up appropriately and gaining access to bigger contracts.
“If you’re in the construction business, you’re already familiar with the fact that most government and commercial projects require a performance bond,” he said.
The insurance broker said most people don’t realize that a $5,000 investment in bonds can open the door to contracts worth $2 million or more.
“In my seventh year of business I started bidding on tied-up government projects,” he said, adding that the profit margins were much better than his typical residential job. “Bonded commercial jobs had an average of 18% margin compared to 12% on smaller projects.”
Compound effect of protected evolution
Benoit said the third hack brings it all together – reinvesting the freed capital, taking on larger bonded contracts at the same time, all with proper insurance coverage.
“This combination resulted in a rapid increase for me,” the insurance broker shared. “I took the capital freed up from premium financing and put it into real estate and business expansion. At the same time I was landing higher margin contract contracts to increase my annual revenue.”
But here’s the part he said most people miss: Insurance protection ensures that a lawsuit doesn’t destroy everything you’ve built. “Based on my years in the field I have seen contractors lose their entire net worth due to a claim because they were underinsured,” he said.
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