Beating the system never felt so good, especially when there is money involved. Don't worry: these financial hacks suggested by LearnVest are perfectly legal!
Just before the Enron scandal broke, the company's CEO immediately put his money into annuities — in his wife's name.
Why? Because those assets are creditor-protected, so they can't be seized (in this case, by the government).
This is just one example of many — remember the 14% tax rate Mitt Romney paid on his $13 million income? — illustrating how extremely wealthy people get the most from their money. And most of them do it legally.
Much of their success comes from knowing where to find loopholes in the financial system — "hacks," if you will. While we would never recommend any illegal or dishonest money moves (seriously, don't break the law!), there are a handful of legal personal finance hacks that are available to all of us — like these seven incredibly useful, low-profile tricks.
Hack #1: Borrow Against Your Home's Equity
This hack is for homeowners, but it's good for everyone to know about, should you ever decide to buy a home.
How It Works: Instead of having the bank front you the money you need through a personal loan, you borrow against your home's equity. (As a reminder, equity is the difference between the total of your mortgage and the appraised value of your home.)
The benefit here is two-fold: Since you've already been approved for a mortgage, the process will be less involved for this loan. You'll need to get your home appraised, but your lender should be able to walk you through the process. Second, interest payments on home equity loans are typically tax-deductible, unlike interest on personal loans.
Lenders probably won't give you an amount equivalent to the entire equity — you'll get more like 75 percent, at most. But if you have equity of $100,000, that's $75,000 you may be able to borrow. This is a great option if A) you're planning to stay in your home for a while and B) your home is worth more than what you paid for it.