Infinite Banking with Whole Life Insurance for 2020 with Chris Miles

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Summary: We discuss infinite banking. To get the full guide go to SimplePassiveCashflow.com/banking

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Website link: SimplePassiveCashflow.com/banking

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Unknown Speaker 0:00
If you’re a hard working professional struggling to reach financial freedom, I would like to help you out as much as I can in a free 15 minute strategy call when I started investing in real estate in 2009, there were no resources for high paid w two workers like myself, I wish someone who knew what to do and had the same pedigree as me told me what to do at the starting line. As I wind down the year as a limited time holiday gift, I would like to connect with you to give you a free strategy session. open to new members to the cuido pipeline club book here at simple passive cash flow comm slash talk. Hey guys, I just wrapped up seeing a few of you in Huntsville and Dallas recently. Great to see everybody and hope to see everybody in 2022 check out future and past events go to simple passive cash flow.com slash events. Now this podcast is going to be a replay of a webinar we did for the deal pipeline club recently talking about infinite banking, where I brought on my buddy Chris miles but if you’re more of a visual person, and in this case, want to see the sidebar Side numbers of to policies and fee structure subscribe to our YouTube channel where we will be giving away a free e course subscription for YouTube subscribers there

Unknown Speaker 1:10
also courses webinar at my banking info page at simple passive cash flow comm slash banking and if you would like to see how I use this strategy to manage my liquidity to invest in deals, go to simple passive cash flow comm slash open a lot thank you and try to rent them out. And then he became one real investor me

Unknown Speaker 1:37
the last three years I use it as a way to store short term and medium term liquidity as I wait for a syndication deal to come out. I make a nice little yield doing it. It’s tax favorable and it’s off the table of litigators. Chris and I are very Different, right? We explain things very differently. So hopefully, you know, I’ve explained it before, maybe you need it and just quite understand it. Hopefully Chris can explain it in a different way. But this is something that a lot of wealthy people do. If your net worth is under, I would say a quarter million dollars is probably ain’t for you. And you probably need to split every penny, that you got to an investment like in a single family home. Just to get started. I’ll let you take it away, Chris.

Unknown Speaker 2:29
Awesome. Yeah, appreciate it. Lana. Yeah. So today, I really want to talk to you guys about, again, this infinite big concept. I’m sure several of you guys even heard of this, or at least some of you guys might even be doing this. But I definitely take a different angle on it. I come much more from an investor perspective. Then then what you’ll see most people talk about this sort of concept with because sadly, I mean, most time you hear people talk about are just insurance agents, right? And people are just trying to sell you a policy. And I think that like this long term thing. You know, something that You have to save it for many years. But my experience I mean, I’ve been a financial advisor or as you can see here, an anti financial advisor for the last 18 years first for those years I was the traditional mainstream financial advisor that totally sucked. basically told you to buy, buy mutual funds don’t buy a real estate because real estate doesn’t really grow and you know, all that kind of stuff. And it was bullcrap like it. When I when I saw the real evidence, I realized that none of that stuff works. And that’s why I keep hounding all the time. I do like my podcasts on the Chris miles money show and stuff is, hey, like, this alter investments of stuff that liens teach you is absolutely legit. It’s seriously the only way when I run the numbers, no, really, honestly, it’s the only way you’re gonna be able to have any hope of retirement or financial freedom. You can’t get it from saving and 401k and mutual funds. So in 2006, I actually left that industry I was like, I’m done. I will never teach about money again. I’m out of here. I’ll just teach ballroom dancing and and I’ll do mortgages. So I did For a time, but I was able to retire myself in 2006. I was 28 years old. And and in the process, part of the rule is able to do that as I met other millionaires I met guys that were in real estate, they were doing other things, and they were actually getting real results. And, and even though I had been life insurance license before, I’d never heard of doing this whole infinite banking concept. And as time went on, only to learn how to do it better. But I even learned how to do it better than even how people people that call themselves infinite bankers do it. Because they’re always thinking long term, put your money in here, grow it forever, and then maybe you can retire off it. The truth is you can’t retire off. There’s really nothing that a financial advisor can offer you that will help you retire, whether it’s IRAs whether it’s you know, mutual funds, life insurance doesn’t matter. You will never be able retire using those things. So this was kind of a concept that started developing it perfect to the point where this becomes like a really high cash high returning type of supercharged savings account tax free resumes count we’ll talk about I forgot to

Unknown Speaker 5:01
point this out. Like, I think as simple passive cash flow listeners, when you hear life insurance, your your hair should stick up at the back your neck. And you should already get this queasy feeling because yeah, most times when people are trying to sell life insurance, it’s a kind of a scam. I mean, it’s like your slimy, buddy that you met in college or high school that you haven’t seen in six years cause you up on to take you to lunch. What we’re talking about today, yeah, it’s life insurance. But the whole reason why we’re using life insurance is because there’s a little loophole that’s not taxed. Why it’s a technique that I like to use, you know,

Unknown Speaker 5:39
I definitely gotta give kudos to you too late because I mean, for example, I mean, I was I went through the recession I’m like a millionaire to upside down millionaire right. And then I came back out of it and I was able to retire again three years ago. And in a once again, you know, be due to you and then our mutual friend buck Joffrey, but was like bugging the crap out of me to say Hey, Chris, you gotta teach this stuff because the guy referred me to it doesn’t insurance. He’s kind of, I don’t know, he’s just not cool. Like, he just doesn’t explain it. Well, you’ve done the best job, how do I get you out of retirement? And it’s actually because of you and him, I actually came out of retirement to teach some of this stuff, and, and even find out ways to do better, you know, so. So that was I’m a double arbitrage, right? We’re talking about how do we get our money to pay us twice? So the big thing again, I talked about is acceleration, not accumulation. It’s not about just trying to save up money and building growth over five, bazillion years. It’s about how do we create speed with our money? How do we create cash flow with it? And the thing is, like everybody in the financial industry, they don’t get it. I mean, you got your Dave Ramsey’s out there telling you, hey, basically, let your life suck forever. And then someday, you might actually have some sort of freedom, right? And I’m not espousing that at all. You know, they don’t, they don’t understand it. They definitely don’t understand what I’m going to teach you because he’s teaching you kind of what Lane just said about the slimy people how they do it. He’ll say Life, for example is horrible. And that’s because he’s talking about the slimy stuff that’s out there. There’s good ways to do it. There’s bad ways to do it. And definitely he doesn’t get it. But banks been using this for years and decades. They get it, they’ve been doing it. You know, these, for example, I remember the recession, when they start reporting their numbers. Banks like Washington Mutual, for example, they had about 42% of their assets being held within life insurance policies in the cash value. Remember, Wells Fargo was about 25%. I mean, Chase Bank had a good chunk of their money in there too. So this is not a new strategy. But the cool thing is the way I do it, it’s definitely more supercharged than the typical way. Now, here’s a basic concept I want you to understand. So let’s kind of go away from life insurance for a second talk about leverage, right? Like there’s there’s really two ways to use money. Either you use cash, or you borrow it, right. So either you’re gonna borrow money for somebody else, you’re gonna use your own cash. Here’s the key thing you gotta understand. You’re always paying interest. Always. Now we all know that when you borrow money, like you borrow from a bank, you’re paying interest to them. But what about when you pay cash? Why is there interest being paid there? Well, the way that happens, because when you pay cash for something, you’ve lost the ability to earn any interest on that money. So when you say pull out of a savings account, it’s not making money, and that seems good anymore. So hopefully, you’re putting that investment, whether it’s with land or wherever it is, you’re putting that money in that investment, and then that’s kicking off a return. But again, you’re not making money over here just on that investment. So the whole thing we’re talking about here is how can you make money there and here at the same time, how can you make money twice?

Unknown Speaker 8:38
So let’s talk about compound interest versus simple interest because you understand this concept one, this will blow your mind from an investor perspective. You will no longer ever want to do the whole Dave Ramsey method ever again with paying off your debts the same way. You know, I’m totally cool with paying off debts that don’t serve you. But when you realize about leverage and how it all works, it will be Blow Your Mind. So from invest perspective, this is awesome. But also have you understand it from a life insurance perspective too. But there’s two types of interest. So let’s talk about a mortgage thing. You have a mortgage of 300,000 bucks, and you have it at four and a quarter percent, it’s a 30 year mortgage. If you paid the minimum payment on this mortgage for the next 30 years, it will cost you 231,000 of interest. So not double, some people say, yeah, you’ll pay twice as much an interest as your mortgage. No, you all know that’s not even close. The exact number here is 231,000. And actually, I think I rounded up a little bit. So 241,000, you’re paying interest over those 30 years. Now, aside from people trying to throw a little bits and pieces we’re going to try by extra principles or mortgage that doesn’t do anything to save you any interest you save very little throwing extra payments your mortgage. Your best bet is if you have $300,000 in cash today, to pay off that mortgage now to save that 231,000 that is your best case scenario for saving on the interest side. So let’s just assume that you do have 300,000 in different assets that you could use liquidate to pay off your mortgage now. Now, if you had that money you could pay off your mortgage say the 231,000 but what if you didn’t What if you actually instead took the 300,000 you could use to pay off your mortgage and instead invest it and let’s just say you invested in a crappy CD right? earning 2% just 2% now this is what I want you guys to use a little chat feature here I want you guys to make a guess here. If the interest rate the interest you pay over 30 years on a mortgage at four and a quarter percent is 231,000 interest. What do you think you’ll earn over 30 years on $300,000 saved in a CD? What do you think you’ll earn an interest on that? So go ahead and just put this in will make it like prices right? Right so go ahead and just type in little chat tosses this forum 25,000 Jay says negative crap

Unknown Speaker 10:53
that means just think crowd here

Unknown Speaker 10:56
I think that’s Jays way of saying you know, prices right version, same one. Dollar right? He’s gonna get the little bit or city five from Jennifer got 100,000 gene. So again 2% over 30 years and 300,000 All right, you guys ready for this? We’re going to make sure that this is not frozen here. All right here it is 2% $243,000 400 bucks is what it is. Now if you remember four and a quarter percent on that mortgage was cost you 231,000 over 30 years. But even earning less than half the interest only 2% interest you earned $243,000 on top so you basically made an extra 12,000 bucks by making less than half the interest rate. Now a lot of people were like what what like how does that even happen? How is that even possible? How does that even work? And I think some of you guys get it because you guys made some guesses are all over the place here right? This is where it comes down to. When you keep your money in savings when it’s there and savings it compounds on itself when you pay on a loan with We pay principal and interest on a mortgage, it’s simple interest, they are not the same interest rate. There are two very different calculations. Another way to look at it visually is like this, the green section of this is is the compound interest. It’s kind of like this, this curve, it’s exponential curve, it goes up like this, right? But when you pay when you pay on a loan is some people say, Yeah, they screw us on the on the numbers here, like they charge us all the interest in the beginning, they seriously do not do anything like that all they’re doing is just simple math. But when you pay a payment, obviously, most of it goes to interest in the beginning and some goes a principle. But as you keep paying that balance down, you start the same interest rate, but less and less has been charged and interest. That’s why the more and more goes to principle over time, you have this inverse effect where the exponential goes down over time. So that’s what happened. That’s why you don’t have this massive compounding number of interest on four and a quarter percent when you pan a mortgage. But when you let it grow and compound that Where it’s different. Now here’s where it gets fun guys, what if you earn the same interest rate? 745,000, you basically netted an extra half a million dollars by making this same interest rate 740 5000 for a quarter percent, right, we keep going 10%. So I know lane you try to get things that give you an IRR above this even. But think of this even just 300,000 bucks in 30 years. 10% compound makes you about 5 million bucks. At 15%, almost $20 million. Do you really think you’d give a crap about the tour 31,000 that you pay anymore? If you could be making about 20 million off that money? Why would we want to leverage as much as we can from the bank, which by the way, this is what I try to do, especially with cheap money is I really leverage the bank as much as I can. And then I use cash for things I can’t leverage the bank for right? So even to get nothing else out of this just knowing that how you use your money. How can you pay cash for things can actually create a greater loss opportunity costs than anything You pay that mortgage off, you just lost about $20 million of interest. This is the argument where

Unknown Speaker 14:06
people are saying, Well, if you buy a house and that house appreciates 3% every year, which it doesn’t, would you compare it to whatever you invested at a 1015 20% IRR is what you compare it to. So you need to think like an investor and think in terms of opportunity loss costs.

Unknown Speaker 14:26
That’s exactly it. Like when I was a financial advisor, the traditional mainstream guy, I remember I’d show the charts right the chart to show the stock market graph compared to inflation compared to real estate prices. I’d say well look at real estate, if they ask me what real estate they will look at that is barely keep up with inflation. It sucks, you know, look at the stock market, you know, all over the place is bipolar, right? But hey, it’s average since 2000 bC 10 or 12% returns which is not true, the stock market only average a real rate of return of seven a half percent over the last 30 years. You know, but when you look at averages, you can you know, you can kind of manipulate the numbers a little bit. So but even then heck even if you did happen average seven and a half percent point still is yes, you can make way more than the debt you’re paying. Now, why am I bringing this whole compound symbol is interesting up is because life insurance uses this strategy. This is exactly when I understood his concept, why life insurance made sense to us rather than my own savings account. Because then I realized Wait a minute, I can make way more money using this and using almost like a HELOC that pays me interest. Or another way Look at it’s like a Roth IRA with no limits right. So I use high cash value whole life that I use this as a difference because again, whole life insurance can be designed variety of different ways based on how the insurance guy or woman will design it. I go for the max cash ROI possible in a policy that allows you to be able to have quickest access to money to go and invest it because that is the only way create freedom is build invest that in other places, but By using life insurance versus a savings account, now we get a different story because when I borrow from a life insurance policy, really what I’m doing is I’m borrowing from insurance company, the money still in there growing and compounding the full amount. While I’m borrowing from insurance company a certain interest rate, I’m getting paid where a savings by withdraw from savings, I have lost the ability to earn interest and not have to creep it up slowly over time by adding more money into it, and then earn almost no interest. And I’ll kind of show you what that looks like at the numbers here in a second. So I call it my supercharged savings account, right? It’s my supercharged tax free savings account. All I’m doing is I’m doing the same strategy you would have done with your money anyways, by just add one little extra step. So we’re most people just take their money they put into the investment, they get cash flow, and then that cash that goes back into their checking or savings account to build up to reinvest again, right. Same exact strategy, but I use my life insurance instead to build that cash. So instead, I’m taking the money from my check your savings putting into my policy. Now That if there’s ever a negative with this is that in this first two years, there are costs that insurance, you’ll see a net cost to your money. Nice thing is after year three on, there’s no, there’s essentially zero net cost of your insurance you make more in dividends than what it costs you. So it feels like it’s free insurance at that point. those first two years are just come cost coming out. Usually the first year, the most expensive year, I can get at least 75% of cash in there while 25% going to insurance costs. So I put money into the policy, I then take a loan from the insurance company, I can take a withdrawal to just like a savings account, but I wouldn’t do as a loan because I want that compound interest working for me. So I think as a loan from the insurance company, it’s a separate loan. There’s no minimum monthly payment. So it’s not like a keylock where, say you go do a real estate project, it takes six months before you get paid in cash on it. You’re going to have those issues of of that you know, of having to make payments while you’re earning no money. You don’t have that issue here. They’ll charge you interest, but there’s No minimum monthly payments required. In fact, there’s not even a balloon payment required on this until your death. So your your death is the deadline to pay off the loan which they just take out her death benefit anyways.

Unknown Speaker 18:11
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Unknown Speaker 19:12
So anyways, I borrow from the from the insurance company, they give me a loan about 5%, I use that I create arbitrage that money, I go and invest it, the cash flow from that I used to pay back towards the line of credit they gave me. And as I do that, that’s where that simple interest effect comes in. Because as I’m paying down more than interest, then I’m actually paying down that loan and then actually freeing up more cash to use again, kind of like what you do with a 401k. But the difference is a 401k is that you can only have one loan at a time. With life insurance, I can have dozens of loans out at the same time. It doesn’t matter. It’s all based on balances. I can borrow 95% of whatever cash is in my policy I can borrow and use however the heck I want. So that’s the basic concept around it. By the way, it’s also the same time like I said, because I’m borrowing from insurance company, the full amount of money is in there. dividends. So say for example, you’ve got $100,000 you borrow 50,000 out of it. If you were to just withdraw 50,000 from savings, you’re only earning interest on 50,000 bucks with life insurance, I’m earning interest on the full $100,000 now there’s the interest being charged against me. By the way, here’s the myth is the key myth. I think some even have this question from before this this webinar here. But some people think well I’m just pay myself back interest, right. So I should just leverage this and just pay myself back interest. That is false, you do not pay yourself back interest. This is a line of credit just like with any bank, you are paying interest to an institution at you know, 5% below rate, but you are paying them interest. So it’s not paying yourself interest. Like some of the people out there will try to teach us sell you on this crap. That’s not true. The truth is, even with truth even with this whole situation, you still come out way further ahead. Right. So just so you know, you do not pay yourself interest you just pay back however much money you want. You pay it Least interest only payments you keep it simple interest it doesn’t compound against you. And that’s where you win because you’re earning those tax free dividends at the same time while you’re making money on your investments and cycling through

Unknown Speaker 21:12
Chris when you when you’re borrowing from your 401k and you’re paying they say paying yourself interest is that really paying your self interest is that

Unknown Speaker 21:21
no they’ll they’ll pay you interest on the money that’s being borrowed. They’ll pay like a set interest rate or whatever, when when you when you’re borrowing against your 401k loan and you have their interest are you paying that to yourself? Is that even the sensor technically Yes. Like the kind of like credit back the interest to us what what happens so they charge you interest and then credit it back as you’re paying it back? Yeah. So yeah, it’s it’s kind of like Universal Life Insurance is like you kind of credit back but it’s not really it’s like becomes almost like a zero percent loan, in a sense when you factor it all in. Okay, Noah. So yeah, so key points here. It’s tax free. So this money you put in with after tax dollars Just like a Roth IRA, it grows tax free and it could come out tax free. So that’s one key point. Number two, I think is really important is protected from creditors and lawsuits. In most states, there is there is no limitation to the amount of protection that’s in here. So sorry, Sue’s you and wins, even they went on that lawsuit. And there they are, they can get money from you. They can access almost any of your assets, they can access it, they put a lien on your home to a certain level, they can take out money from your IRAs, they can access your savings accounts just about anything. With life insurance, they cannot access it at all, if you’re a millionaire, with million dollar, several million dollars saved up in this life insurance, they cannot access it in most states. Other states like California, it’s limited protection, you got at least a quarter million protected in there. So some of the states where there tend to be more liberal, they tend to give less protection but in over 30 of the states. It’s an unlimited amount of protection that you have in their guaranteed growth. It’s guaranteed to grow. Regardless, there’s no stock market rides or anything like that. There’s no stupid limits or penalties. So there’s no 10% penalty for early withdrawal. Like I said, you can access the money whenever you want. There is no 59 and a half rule, there’s no limit, like even if you pay your own 401k, right, you’re a business owner and you you pay your own 401k with the match, you’re maxing an hour or so a SEP IRA, you’re maxed out to about 50 grand a year. You don’t get capped on this, you we’ve got investor friends are doing a half million a year into this summer doing 10,000 year I mean, you can do it however the heck you want. Plus, by the way, just as an extra bonus, I build it with flexibility. So you have a max but you also have a minimum so there’s like a window of space you can do bank leverage. I’ll talk about that in another example here in a little bit. But there’s ways you can use it for for getting bank loans, and then access to cash Now, like I talked about, it’s about getting that money today. Can

Unknown Speaker 23:54
we go back to that other slide, Chris? No. Right here on over it the way I Look at it like, you know, just yeah, radiate the same thing. So tax free. Here’s how I do it. I don’t know like, what am I policy pay me like 4% or something like that. So I don’t pay taxes on it because it’s via my life insurance policies that the writing I explained Chris. Yeah, it was a loophole or Now Google, but like the way tax code is written. It’s not tax.

Unknown Speaker 24:23
Yeah, they pay you dividends, but they also pay return a premium. So it’s like a rebate. And so with the tax laws is very similar to a Roth IRA. They keep it tax free. So yeah, any dividends you earn inside the policy within it, not from your investments outside you still get taxed like normal on your other investments. So that’s why, you know, like you’re investing with lane, you want to make sure you share the depreciation stuff because you get some tax breaks. But like with this, yeah, anything inside the policy, the cash that’s in there is growing and get paid dividends every year. That’s all growing tax free. And then you can access it, take it out tax free as income or later on if you want to do

Unknown Speaker 24:59
yeah, and then the same endpoint their guarantee are protected from creditors lawsuits that’s very similar to how we all sort of know the 401k is pretty much off the table in terms of litigation.

Unknown Speaker 25:11
Yep, for okay the only other place you get that kind of protection

Unknown Speaker 25:15
and the guaranteed growth like you know, there’s not much guarantee things in life but the people backing these life insurances are guys from what the Civil War era you talk a little bit like, these are like, the big companies that invest in a really, really big class A buildings are the those those huge buildings that are just investing for preservation of capital.

Unknown Speaker 25:39
Yeah, I mean, that’s, that’s one thing. It’s nice. Like I have one company I work with, they started in 1849. And they’ve paid a dividend every single year since then, through all the different depressions and recessions and everything they’ve paid out every single year, you know, and so it’s awesome. I usually work with companies have paid at least 100 years in a row, because I want to make sure that they pay through the depression. The Great Depression everything you know, but yeah, I mean, they’re investing in their own portfolios. They’re buying up like, sometimes they’re buying, you know, like mortgages and things like that different notes. They’re buying more stable type things. They’ll buy a lot of bonds to, you know, like, government bonds or whatever it might be. They’ll buy different stuff like that. But yeah, I mean, they’re paying out pretty, pretty regularly. You know, I’m right now, I know some of those companies are paying between five and 6%. Right now tax free.

Unknown Speaker 26:25
Right? We don’t we don’t like to say anything is risk free right now. But this is as close to as it is, I think you can get

Unknown Speaker 26:34
Yeah, probably even better than a bank.

Unknown Speaker 26:35
Right?

Unknown Speaker 26:37
Yeah. There’s they have what they call reinsurance that they buy that they are required by a lot of by which reinsurance companies are insurance companies that ensure an insurance company in case they become insolvent because they go out of business. They can make sure that nobody’s policies, you know, they don’t lose their money or anything. It’s, I mean, even from that standpoint, I mean, fdic. I mean, you hear the numbers, like there’s only like, 3% of people’s total savings that is actually in reserves for the FDIC. So if banks started to shut down like they didn’t the Great Depression, we’d all be in trouble, right, we would have a hard time getting our money back. Worth this, it’s guarantee that even if a company shuts down, the reinsurance companies ensure that either another company can come in and buy them up in your policy state enforced nothing changes, or at least they’ll pay out the money to you. So there’s, there’s, I would say better guarantees than even the typical savings account.

Unknown Speaker 27:29
Yeah, and and then the last point there the access to cash now, so if I put in $50,000, there’s some money that goes to fees right away, but there’s a big chunk of that money that I’m going to take out possibly the next day or next few days to go invest in other things because I don’t mind money just to sit in here and make 4% I want to make my money my 4% here and take it somewhere else. And maybe stick it in, you know something like hbn double that on.

Unknown Speaker 27:56
Yeah, you have to double dip right. So Exactly. HP is a great example that’s I’ve watched clients do that same strategy they’re like hey, I get that guarantee return boom. Make my money on it right? yeah it’s it’s it’s great and again yeah you want to keep those fees low and that’s and that’s about as low as I can get them is usually about you know 25% give or take you know some more some less depend on the situation but that’s the first year so like you said 50,000 bucks you put in there usually can have access right away at about 37,000 after the cool thing is from 30 if you put in 50,000 bucks even that third year you British have access to 50,000 bucks it’s pretty great. So here I use a real example I do some turnkey properties I took a turnkey provider said hey, let’s use a real estate example for you know, using comparing savings to using your life insurance right so just looking at apples apples here. So this one is just saying hey, if you had 100,000 savings, you liquidated 95,000 to go invest buying a single family home and a duplex the cash flows 1070 a month net right versus having 100,000 your life insurance borrowing the 95,000 for the insurance company so your full hundred thousand is still making money and you’re also taking the cash flow and taking it to your pay down your line of credit. So I compare the two I said all right, after nine years was it look like use your savings account making point 2% By the way, you know, of course you get taxed on that point two point nothing percent, you know, after nine years, you got about 128,000 that that cash will build it back up to so that’s almost like a getting a total of about 1.3% ROI. So really, you just made like 1500 bucks in interest over those nine years without money. Now on the flip side, life insurance side after nine years, I use my own insurance policy just to use it as gamble hundred 78,000. I had after the same nine years following that money back in and not contributing anymore just using this simply as the money of foreign the money back through, which is almost like getting a savings account like an 8% per year ROI. savings account so if you can find an 8% per year savings account that you get taxed on you could store money and then use it to funnel money in and out cool. This is what I use instead because I know I will never get a percent on a savings account unless we have astronomical Lee just ridiculous rates so so again, net profits about 50 grand difference just over those five years, I think about us 95,000 I used to invest to make an extra 50,000 profit that’s over 50% more return on my money over those nine years just by using a different type of savings vehicle in that place. And so again, same thing, use that money flowing back through money’s flowing in and out. Again, your earned dividends and you’re so have your cash flowing investments. So that’s how you make money twice. Now, I know lane this was a specific specific request from you. You want to see okay, Chris, I want to see you compare with like, other infinite bankers versus what you do on compare with IE wells and all that kind of stuff because I get A lot of questions on that as well.

Unknown Speaker 31:01
Yeah, there’s a lot of people, about half of this group have seen this concept before, but I think it takes a few times to get it wrapped around your head. But after a while this job Charles is in a sick the numbers right? Let’s compare.

Unknown Speaker 31:16
Yeah, it’s interesting. I had this woman come to me, she said, Hey, I had this guy run these numbers, I was with the same exact insurance company. This is this is why it’s so important to understand. It’s not about which company you go with. It’s more importantly about who designs it. Because the problem is most insurance agency, I’m already financially independent. I don’t need the money, like I was able to quit. So this for me is it’s kind of fun. But most insurance agents, this is their livelihood, right? So this this guy that she went to this guy I actually know personally, he’s good at what he does. He’s one of the better infinite bankers, but she said, Well, how’s yours compared to what he would do? I said, Well, let me run the same numbers. She was just putting in 10,000 a year right. His number was that one on the left are highlighted yellow there. The 6947 Is what you know. So about 30% or so Went, went to cost the other 70% went in mine, there’s about an extra hundred bucks or so that went in mind. Cool thing is, is that one, you’ll see your six drops down the minimum is 2950 minus 2874. So have a lower minimum, because I have less cost coming out and buy your seven, he had a little under 52,000. Well, mine had over 60,000. So essentially by doing the same thing, same company, over those seven years, I saved her about 8000 bucks, which that’s now money she can go and invest. Right. So and again, he was one of the better infinite bankers out there. A guy that I actually really respect but I was like, Hey, you can still go with him. But he’s he’s a good guy. He’s honest. But that’s the thing is like, I’ve learned a little tricks that milk out every little dollar I can get out of these to make it less cost better ROI.

Unknown Speaker 32:55
Well, it’s greed. Right? You know, I mean, go back, go back, Chris. Some

Unknown Speaker 33:02
people that are just not familiar to what even this is, so I’ll kind of catch people up here. So on the left side, you’ve got the total premiums, that’s how much you’re putting into this policy, you’ve got to kind of feed the beast for what, six, seven years or something like

Unknown Speaker 33:16
that for seven years. So you have to

Unknown Speaker 33:19
come the, like, some kind of design plan where you’re going to have to feed this thing, $10,000 a year or $50,000 or $100,000 a year. And, you know, in this case, I told Chris, you know, a lot of us are engineers, we like the factors of 10. So, they do a 10,000 a year, which is actually a pretty small policy, in my opinion. So you put in 10,000, your first year, you’re one and then your total cash value is almost 7000 bucks. So that’s the amount of value can the next day, pull out and go invest that in whatever you want or pull up out and buy a jet ski with what what Chris was kind of talking about here in the first year, you’re like, Oh, geez, like 3000 of it went to fees, right? It’s like, yeah, you know, there’s there’s a utility value to this type of policies insurance, and that’s what you’re paying for. But as Chris mentioned earlier, and it probably went over people, some people’s heads until you see the numbers here. If you look at the fees are kind of going down by the year three, your fees are what about 90% or so? Like,

Unknown Speaker 34:33
well, zero. It’s actually you see, it’s a net positive that changes TV, less premium outlay right there, the far left, right. It’s making foreign 36 bucks. Okay. Right there,

Unknown Speaker 34:44
you know, so initially, whatever you put in the first year is going to be what like 25 30% is going to feed but that that goes down by year 2345.

Unknown Speaker 34:55
By by your Yeah, it goes down every year. That’s the nice thing about whole life is that costs decrease over time, versus most life insurance rate increases over time because you get older, right?

Unknown Speaker 35:05
So this is how we the holly highlighted here is how you compare the fee structure. Because it’s super complicated, right? Until you know what to look at. And you’re kind of just looking at all right, if I put in 10 grand, this is how much my cash value is going to be and how much he’s therefore it wasn’t the first year 6947 for the other guys, and this other policy on the right, you know, some guy here 7036 so much difference, but

Unknown Speaker 35:39
it was seven years out, it definitely adds up. Yeah, yeah, it’s like $8,000 difference over about 80 $500 difference right there. It’s all about design. And by the way, like this, this guy on the left, you know, compared to me on the right, I mean, that guy left, he wasn’t like one of those guys that’s trying to screw people over. He was doing a great job. As a you know, being an infinite banker, just so you guys know and compare and contrast even more, a normal whole life policy and those first two years, you’ll have probably zero cash value in the first two years. If you buy a normal whole life policy, the kind of Dave Ramsey doesn’t like, which I would kind of agree with them, you would have zero cash value after two years, versus having 15 grand doing this way all because we figure out ways to cut costs, which actually just saves you give you another example had a guy that he owns a turnkey company. He was he was only putting away like lower 5000 a year with this other guy was an infinite banker as he called himself. I knew the guy personally I told him I was like this guy’s a schmuck is not an infinite banker. This guy is all about paycheck. Well, after finally after six years, he said, Man, I’ve been putting I put in like 36,000 bucks, and I only have 19,000 in here, right? When I do with people, usually by the fifth year, six years the latest they’ve broken even on their costs and have more cash than what they put in. Well For him, he’s put in for six years, he’s only got half the cash in there. So he was mad. And so I said, hey, let’s let’s do it this way instead. And when I showed him it’s like hey, in five years you break even he says, I’m going to do that I’m going to do 50 grand a year instead of five grand a year is like this is a no brainer. So even cancel that Paul other policy had transferred the money over it boosted his cash value even more. And and actually for him, but your for you breaks even on those costs. So he was pretty, pretty thrilled about that. And that’s, I mean, at that point, you think about it, it’s like your insurance cost you nothing at whole time, that’s even better than buying term and investing the difference, you know, the reason

Unknown Speaker 37:36
for the difference in the CV growth?

Unknown Speaker 37:40
Like in this particular example, I’m guessing

Unknown Speaker 37:43
Yeah, I don’t quite understand that question.

Unknown Speaker 37:46
Yeah, I mean, if it’s what I think it is, I mean, the the difference in the CV growth, at least with the way I do it is just because I’m middle I find different ways to minimize costs, just so you know, insurance companies don’t train you how to do this. They’re all about trying to train you how to sell the typical policy because they want you to make this a long term thing. They don’t want you to be an investor with this money. So this is stuff I’ve had to learn and pick up over the last decade really. So typically,

Unknown Speaker 38:08
what I’ve been seen as your first year 30% are going to go to fees, and therefore whatever you put in your first year, you can take out 70%. Day one. Yeah. How does that range in terms of like, let’s use a extreme example of a smoker who’s really out of shape, unhealthy, the lowest health level and little older. How, how low Do you see that dip for that type of profile? It depends.

Unknown Speaker 38:40
I mean, it depends on how bad it is, right? I mean, obviously the worse the health, the more cuts in the ROI. But I’ll tell you, it depends on what you’re funding into it to like this is a $10,000 a year policy on someone that’s in their 40s. So this is not the best ROI you can get. This is actually a an okay ROI compared to what you can normally get normally I try to get that between 75 to 80%. So if it were using the same number 10,000, right, I would try to get at least 70 508,000. But because it’s a lower number for her age, it’s not as good of an ROI. But for smokers or people that are out of shape or just, you know, in bad health, I’ve seen that still, we can at least get, you know, 60% plus of their money and not so much.

Unknown Speaker 39:24
Yeah, the takeaway is, it’s not much

Unknown Speaker 39:27
yeah, it just, it just depends on how your how we’re designing it. My whole goal is again, with any given situation, I always reverse engineer I always figure out what’s the max you want to put in and and figure out how we get the best ROI based on that max. That’s really what I do. So it’s not about like, Hey, can I buy two or 50,000 insurance like we have, we can figure that out. But I will just figure out what’s what made me want to put in and how we get the biggest bang out of this. So you can make this thing really sing, you know.

Unknown Speaker 39:54
So we had another question. Can you explain that death benefit in your policy increasing?

Unknown Speaker 40:01
Consistently versus the IBC increasing then decreasing?

Unknown Speaker 40:06
Yeah, I mean, they both do. Well, I guess holiday. Yeah. So what it does, if you see it on the one on the left, it increases. And that’s what whole life does that’s a nice benefit is that the death benefit grows every year. And then what happens when you make it a paid up policy, which means you have no more premiums do the rest of your life based on wherever the cash value is, it’ll say here’s how much death benefit that you need to have to keep the cash in there but it can still keep guaranteed to grow. So you’ll see his definitely drops down from 358 down to 158. But then they start growing from there as well as the cash value keeps growing from there to mine does the same thing. I just had it done at a later date. So it started doing that after age 60. It drops a little bit the death benefit. But then it starts actually hardly dropped. It dropped like 50,000 so it’s hard to see. But then it kept creeping up after that. I buy I showed more years going out just because I wanted them to have more flexibility, because with life insurance, you can actually it’s actually easier to ask to do less is to ask to do more. So if this person where she was like, Well, I don’t know I did seven. And that’s just what the guy told me. I said, Well, do you think you might want to go longer than seven? Well, maybe like, well, let’s leave the option open. So you can, but still, in my example, I could still have it cut off at your seven just like theirs. But now they don’t have to ask for permission to do more. They can just say I want to do less want to stop.

Unknown Speaker 41:29
And then the question How soon can I borrow money from the

Unknown Speaker 41:32
insurance within the month? it with certain companies, Every company has different rules, but the companies I usually use you can usually borrow within the month. Some will make you wait a year, but I like to do it with where you can access within about a month.

Unknown Speaker 41:48
Another quick question, can you borrow up to your cash value throughout the life of the policy

Unknown Speaker 41:55
or up to 95% of your cash value for the life of the policy? Yep, so Delete 5% end of whatever that total amount is, just so that something goes wrong, you know, you don’t pay the interest or anything like it’s still got a buffer on it. So that’s the main thing, but yeah, 95% of whatever is in there at any, anytime there.

Unknown Speaker 42:14
So if you’re making a 4% plus or minus a percent or two on the yield, when you take a loan from it, at what interest rate ranges, are you getting charge effectively?

Unknown Speaker 42:28
Yeah, depends on the company. Every company is different different dividends, different loan rates, the one I use a lot like their dividends about 6% of their loan rates. 5% Yeah, so just just depends some, some are ridiculous loan rates. Like if you have a guardian policy or Northwest mutual I love when people have Northwest mutual because they suck. Like, their, their policies are just ridiculous. And so especially trying to bank with them, I actually tell people not to borrow from those policies because you want to be paying 8% on those. There are ways to go around it where you can actually borrow from other lenders, they’ll give you like prime rate loans. You could borrow from them and do it that way. So there’s there’s little workarounds sometimes if you have those kind of policies,

Unknown Speaker 43:09
and here’s what I do. I mean, I’m not a CPA or give me any tax advice here, but I take those loans because I’m buying investments in my business. So their tax write off the interest of writing them off.

Unknown Speaker 43:22
Yeah, yeah. Just like any loan that you give us a HELOC or using your credit card, you pay interest on that. But for business purposes, you can write off the interest. Yep.

Unknown Speaker 43:32
That’s always a nice perk.

Unknown Speaker 43:37
Cool. Alright. Should I move online? Yeah, for more questions come in. Alright. So here’s one I get a lot of people say like, Well, yeah, you do this? Well, to just say, you know, I used to sell our URLs before they became popular. I was one of the first guys actually was was promoting them and being big about it. Here’s the thing. Here’s why I don’t use iOS fish from an investor perspective. One, there’s no double dipping You do not get that compound versus simple interest effect at all. The way they work is when you take out a loan, you’ll take out maybe it’s at five or 6% but what they’ll do is they’ll credit you at most five or 6%. So they make it like a best a zero percent wash loan. But if you did that, say it’s $100,000 cash value Have you borrow 50,000 that 50,000 you borrowed does not earn any interest it basically stagnant the 50,000 other 50,000 makes interest but this money does not with whole life, the 400,000 earns interest. So one you lose out on double dipping to Costco up over time each every and every year and a ul any kind of ul policy right there. Basically renewable term insurance is what they are. It’s like, it’s like the old Toyota Camry compared to a Lexus. Right? The Toyota Camry is the cheap version of the Lexus same parts same everything. And the camera is kind of like term insurance while the Lexus IS LIKE THE THE IU l or the UL policies. They’re just term insurance. But the thing is that I you will, you’ll pay More money for it. So costs go up every year. And then to there’s no certainty. So are you a lot of times people say, hey, it’s awesome because even if the market goes down, you get stock market type of returns, you get, you get none of the downs, but you don’t get all the UPS either you get like a floor to a ceiling. So might be zero to 10%, or zero 11, or one to 11, something like that. Here’s the problem. If say that the floor is 1%. But your insurance costs that keep going up every year or more than whatever little piddly 01 percent you earn on those down market years, which are coming here soon, right? If that happens, you can actually lose money in those policies. So you can actually get to a point and say, oh, shoot, I got to put in more money than they told me just to have any cash in here at all. It’s like running out of cash or eating itself alive. So you have to be careful that that was one thing that I taught other agents how to how to sell our URLs before that was one of the things when I looked under the hood, right? I was like, Oh, yeah, that doesn’t always work. Well, you know, so So from an investor perspective, not great. I will usually use iOS for certain types of strategies or like people that are older, like maybe they’re late 60s, early 70s, I might use an iOS they just want death benefit. But for this strategy I’m talking about I don’t usually use iOS it’s primarily whole life because it’s just cleaner. It’s easier. Oh, here’s a bonus. Why did put in here, there’s no fees where iOS and US have surrender fees so you can access the cash early on. Let me show you that right here. In fact, using 12,000, you’re going in left hand sides IE well, right hand side is the policy I was creating to do apples apples for this person. Notice in the first year on the IU l zero cash surrender value. So even though Yes, there’s 4000 bucks in there because of surrender fees. You have access to zero money in the first year. Mine yet almost 8500 bucks in there. You know, and even that your five they had 28,000 my head 58,000 by your 25 they had four 55, almost 456 I had 591,000. So now I have more cash, but there’s more access to cash early on, that allows you again to get that double dip pathetic, that compound versus simple interest, all those things, all the flexibility that people hope to have in their universal life, but you could still do it better with the whole life. It’s designed the right way.

Unknown Speaker 47:21
And again, we’re talking about index universal life, I ul, right. And the way I explain that to people and 99% of life insurance guys don’t get it. They think we’re doing this for yield because we’re investors, right? I think we want yield but this is just a means to kind of cycle money around and invest outside of this thing. I you do have higher yields, then, you know, their whole life policy, but you’re giving up the liquidity component to be able to pull that cash value out and invest something that you know, probably four or five, six X’s I us rate of return.

Unknown Speaker 48:01
And the problem with it Well, once I looked under the hood, they may not get the better return anyways, they might get a Western, there’s possibility you could get a better return the time the market just right. Like you’ve got one the last 10 years, you’re thinking you’re awesome, right? But that’s just not because of you. It’s because the market did well. But when the market corrects or when it would have done like what it did in the 2000s, you know, the first decade their iOS sucked, like they just did not produce returns, you’re glad he didn’t lose money in the market necessarily like a Wii U L, a variable universal life where you get all the ups and downs. But still, it’s, I mean, compare the whole life policies, they were still doing worse than the whole life policies where it’s only been the last 10 years, they’ve done better. And that’s why they got more popular again, because you got all these new insurance agents in the last 10 years think the market only goes up, you know, so that’s the problem. So, now Who is this not for? I’ve mentioned older you know, some people that are older or particularly if you are retired, if you’re at the point where you’re just consuming cash flow. You’re not Building assets. It’s not for you This is really best for those are trying to grow your assets create an income snowball or gets bigger and bigger. So we can start creating more and more cash flow, right? So you’re trying to cycle money through, you’re accumulating assets, you’re accumulating cash flow. For those that have already done that. They’re like, Hey, I’m now living on my cash flow. There’s not that flow of money coming in, I’m living off every dollar is not for you. Or if you’re paycheck to paycheck, you can’t you can’t afford anything. It’s not for you. They’re either. I had one guy today where it didn’t make sense for him because he actually was max funding his 401k. He’s now using this instead of the 401k. So that’s now an extra 18 grand a year he gets now put into this instead, and now actually invested however he wants, he doesn’t have to be stuck in the mutual funds that fidelity or whoever says he has to invest in right. Who’s also not for people to have bad health. You know, we talked about that a little bit earlier. I have a guy that he’s like, Great guy, but you know, a great investor, but he’s over 400 pounds. So I mean, his friends is ready to be ridiculous. So our workaround with him is we ensured his wife, we got insurance on her instead she was in great health perfect health, used her and actually got great returns. I’ve also had people do this with their their kids get a policies on the kids and they use this instead of 529 plan is a 529 plan you don’t use it for education purposes you’ll lose but with a you know with using this you can use it for whatever you want. You can invest it however you want, doesn’t have to go into mutual funds like a 529 plan. You can invest it however, hey, if they don’t go to college great. You can keep it you can keep investing with it. You keep it for the rest of your life, or even down the road you gave a gift it to your kids and say hey, I know you didn’t know I had this money but I’m going to give this to you. I’m going to turn the ownership back over you. Now you can use it however you want. So here’s your little wedding gift or years of money for your down payment on your first house

Unknown Speaker 50:49
really want to give it to this website offers very general information. That real estate is every situation. always seeking the services of licensed third party appraiser inspectors to verify nine for one intend to use a professional title and escrow companies

Unknown Speaker 51:09
are legal advisor for Live Nation giddyap here he has an investment there is risk market how’s yours just change your and I reserve the right to change our minds above all else do your own analysis and think for yourself because in the end kids you’re the only person that’s going to wake up

Unknown Speaker 51:28
you’re not going to say that right? So yeah I love freedom I love flexibility

Unknown Speaker 51:34
so here’s ways I use this one I use it as emergency fund or extra cash reserve if you’re trying to build up your you know, your your your war chest or whatever, right you’re trying to get more powder like a timeout with the next recession is great way to do it. Honestly, like with my wife, she keeps changing passwords on me for our savings accounts. I can’t remember what they are. So I just go into my I just go into my policy online, click print statements, save as PDF, send it to you know, whenever I’m getting a more Like I just refinance my mortgage recently get to a lower rate, send it to them and say, here’s my cash reserves this check next, because you can actually use life insurance, just like cash savings on a mortgage application. So you just say, hey, there’s proof, there’s money in there, check moving on, right? So I’ll use it for that. cash flowing investments we already talked about that short term or cash flow investments, this is awesome to use for that kind of stuff. If you’re if you’re a flipper, if you’re flipping properties, I mean awesome way better to use the even then he like I love using he locks but I like to use those more for cash flowing quick cash flowing investments, where if things like maybe will take a year, a half a year to a year to get paid on a deal. This is a great way to use it because you don’t have to make those minimum monthly payments. They just charge you interest. You pay it back whenever I actually had a lady recently where she said, Hey, okay, I just did $125,000 investment last year borrow from my policy. Now I got paid back 155,000 so I made 30 grand of interest on this deal. She’s like, shut pay off my loan? Or should I invest it again, because I already know where to invest it. I said, Well don’t pay it off. I’m like, if anything, just pay off you the interest on it. 6000 bucks of interest, take that extra hundred 50 grand now and go and invest it wherever you want. You don’t have to pay it back. That’s the great thing. So she did, she wouldn’t did that. collaterals another one cloud was awesome. Like I had a guy who was in Minnesota. He bought a commercial building for him to office in plus rent out some office spaces, right? The build out on it and everything was 375,000. He said, Hey, Chris, I got 310,000 in my life insurance policy, should I just cancel the policy, just cash it all out and use that money? I was like, don’t want don’t cancel it. Because if you’re not careful, you could get taxed on some of the gains if you cancel a policy like that. But secondly, let’s do this. Instead, let’s go to a bank and see if they’ll do a line of credit using that as collateral. So basically, they’ll give you a loan based on that as being your collateral there. So he went to his local credit union and said hey, can you use my three or 10,000 for class? On this $375,000 loan with build out and everything, they said, Yeah, we’ll even give you a three and a quarter percent rate on it is payment on three years later 5000 was only 1800 bucks a month, which is awesome. I mean, even just the rents he was making as well making above and beyond his payment, right? Well, after a year and a half, you got a built out and everything he went back to his bank, he said, Hey, now is built out, there’s obviously value in this property, can you take the lien off my life insurance, they said, Yeah, and we’ll keep the terms the same. So he still kept the super low rate of three and a quarter percent on a commercial building, still paying 1800 bucks a month, and now he’s got the three or 10,000 to invest however the heck he wants. So there’s cool ways to use it that way. Sometimes have people pay off loans, you know, they’ll pay off credit cards with it at times that can increase your cash flow and use it that way. Extra retirement income, I mean, obviously you can use it down the road whenever retirement is whether it’s 710 years or 20 plus years down the road. You can create extra tax free income for yourself. And then as an Yo, kid savings, we use it.

Unknown Speaker 55:02
Yeah. So one of the questions came in, saw our agents incentivize what an agent make more or less money selling me a policy that is better or worse for me. And I’ll add in there aren’t these policies sort of like commodities? I mean, as you buy, as long as you buy it from like a top tier guys, pretty much, how much fees Do you want to pay here? Dude, right?

Unknown Speaker 55:23
Yeah, it doesn’t matter. If you buy from the company itself or you buy from insurance agent, you’re going to be paying fees, right? I mean, so insurance agents are paid off those insurance costs. So the reason that you have more cash in those first years is because I figured out how to minimize the insurance costs as much as possible, which, yes, that’s what I’m paying off, right. Most insurance agents even if they know how to do this, they realize if I hadn’t had a two hour argument with the guy about whether or not you should do this strategy, because he would do this the plain old version where you’d have zero cash if the first two years and he would make the argument and say Yeah, but you buy more death, but Fit. And that’s the power. So I did apples apples comparisons, I ran the number to say, Hey, I’ll match your death benefit, and I’ll still have more cash and these policies. And finally after this debate back and forth came, the only reason he came down to was Chris, I just can’t afford to cut my commissions like that. I was like, Dude, that is the wrong answer. I can’t believe I sent you referrals. Like that sucks. In fact, I stopped sending him referrals after that this was like a decade ago, but still like, that’s why most insurance agents know that they do this a customer into their commissions. But what I’ve learned is if you have an abundance mentality and you realize how human nature works, just like with my my friend that owns that turnkey company, right? When he realized he would get most of his cash back. He went from doing a 5000 a year like a 50 $600 a year policy with that one agent to doing 50,000 a year with me. Ironically, even though he’s getting a much better ROI. I actually got paid double that other insurance agent earned all because of doing the right thing for the person. But again, most insurance agents it’s their livelihood. They see the paycheck and they’re afraid to cut those things back. So sometimes they’ll just say, Hey, I know I can do more, but we’ll just do in between now let’s give you a little bit of some cash in there, they get 50 or 60% in that first year, not 70 or 80.

Unknown Speaker 57:12
Is that a good option for older higher earners near the end of their work career? And now you mentioned? Like if you don’t if you’re older, you know, there’s a little bit of fees of this. So it does there’s a crossover point, right where it makes sense. What about in this case? Yeah.

Unknown Speaker 57:31
Yeah, I had a guy, same thing. He’s he actually lives out in a wahoo. Right? He lives in white on the other end of the island where you live lane. And he was he was asking about that, too. He’s like, I’m looking to sell my business in two years. So you know, what should I do? Now? The thing is, he had about half millions of sitting in his business checking account. I was like, well then let’s not worry about so much like investing with us, although we could his wife, especially one that cash reserves available. So I said why don’t we move that money over the course of like three years, the next three years Move it in there, and then drop it down to the bare minimum thereafter. And, and then yeah, like after the seventh year just make a paid up. And the truth is because there’s cash value in there, he could borrow from the cash the month before the payments do put it in. And the cool thing is when you put money in it goes right back into cash anyways. So you borrow it to just put it right back in your account. Again, it’s kind of fun. So there’s ways you could do it that way, but just depends on situation. There’s another strategy that I talked about here with it again, infinite ROI. On this works especially great if you’re in your 50s or younger, but if you’re older, this could be one way where you get the banks to pay the premiums for you. There are ways to do that too. So there’s there’s different ways you can do it.

Unknown Speaker 58:41
Another situation where I think this is a really good ideas like you get one of these investors that had been working for quite a while they have a pretty good net net worth 500 actually a million or 2 million or above and they’ve been investing in the hole for one Nonsense for their whole life. And they finally read this purple book and they understand they need to go into deals and buy rentals or syndications. But I’m like, No, you shouldn’t. You shouldn’t like you just started learning about this stuff you should slow down. Don’t think you’re going to invest half a million dollars in the next six months or a year. Yeah, maybe throw 50 100 grand a year into this just to slow you down. You’ve been sleeping for two decades. You know, this is this is a good way of just, you know, doing something to slow you down and to build up these cash reserves and to get your money. Maybe not working 10 15% but certainly five.

Unknown Speaker 59:40
Yeah, you could you absolutely could. I mean, like I’ve had people that said, You know what, I just want to use this as a way to diversify my money in different places, right, you know, just have extra cash reserves. I mean, my wife, for example, she’s like, Chris, I want minimum 120,000 cash, you cannot touch. And so Mike Well, I don’t want to be keeping that in. You know, my bank account earning point 1.2%, or even an online savings account earning maybe one or 2% and getting taxed on it. So I told I was like, Alright, great, I’ll keep two thirds of those reserves in the life insurance. The other third, we keep the local banks or whatever and online savings than anything above and beyond that I invest, you know, I can use that money to invest it. However, I want to generate more cash flow, you know, so there’s, that’s a cool thing. Is that really your it’s really your, your imagination? That’s the limit here?

Unknown Speaker 1:00:27
What is the network threshold, be for retired people where this makes sense?

Unknown Speaker 1:00:34
You know, it really is the way how you do this particular strategy. This one here that we’ve talked about networks really doesn’t matter. It’s really based on cash flow, right? It’s based on how you’re flowing and accumulating money if you’re not in the place where you’re accumulating assets anymore and trying to build more assets. You know, maybe we don’t use a strategy maybe we use like, you know, the the bank financing strategy that I talked about earlier. You know, this infinite ROI thing, you know, But now, I mean, like, it just depends on where you’re at. I mean, there is no network thing. It’s all based on flow of money, how, you know what kind of money we want to flow through this thing. And in fact, if your whole thing is I just want a death benefit, okay? Well, maybe we just focus on the death benefit, we don’t try to add more cash to it, because that’s what we’re doing is we’re over funding these policies, you could do minimal funding of these policies to so you can just depends on what you’re trying to achieve with that.

Unknown Speaker 1:01:26
A good question here, people are getting creative. So they’re asking is the dividend that you’re making, that the insurance companies paying you more than the interest you’re paying in the loan, typically, is then why not put all your money out here, put it in putting in and saving?

Unknown Speaker 1:01:44
You know, that’s a great question. I mean, if you don’t like the way I teach you to do it, then yes, I mean, like it will definitely create that arbitrage effect, you know, if you’re paying it down. Now, here’s the thing is that a lot of companies they’ll they’ll always have, like some sort of spread, right. Like I know one company, they’ll say Hey, you know, if you borrowed 5% of that money will instead paying you 6% will pay on that portion money 4.35. And as you pay the loan down, you get more than 6% instead of 4.35, you know, so there’s a little bit spread the at best, sometimes I’ll make it just five and five, right sometimes will be like five and five, even. So it just depends. Again, you know, you wouldn’t just throw the money in and just borrow from it and never pay it back. I mean, you could do that. It’s totally, it totally works. But but it doesn’t quite get that extra compound effect that I talked about where you get that acceleration of money. So the way to do is definitely if you can pay at least the interest only payment or more, that’s when you create a little extra double arbitrage there.

Unknown Speaker 1:02:41
And I think you have to think you can just think of in terms of interest rate, and even if it is tax free, and you’re you’re considering at a business costs, yeah. And where you’re taking a loan you’re taking, you’re paying some fees out of it, too. So you have to account for that. It’s a two phase master equation, back up the fees, and then figure out the percentage as you move through the time horizon once you 345 15 years, 10 years, 20 years, not impossible to figure out on your own when the crossover point is,

Unknown Speaker 1:03:13
yeah, yeah, it’s good. It’s good point because there’s no extra fees when you take out a loan, like some people say, Okay, do they charge you extra costs? No, they just charge you interest. There’s no sound like a keylock where they pay, you pay 300 or 500 bucks to do the loan. It’s not like that’s just pure interest. But there are insurance costs that that obviously you have, especially in those first two years. And so I had a guy, he said, He’s like, he was an investor. He said, Hey, Chris, I’ve got 80,000 bucks, and I want to invest it, but I want to run it through your policy, how should I do it? How should I structure it? And I said, Well, how much the money you trying to invest with and how soon he said, Well, the next two months, I’ll need 70,000 of that 80,000. I said, Well, I’m not going to tell you to dump in all 80,000 policy because you may only have about 60,000 available to us. So instead Listen, let’s just say You do 36,000 the policy, so then you have about 30,000 or so available, and then keep your other 44,000 in cash and between the two you’ll have enough to do the investment. So, you know, I always have to tell people’s like, no, it’s not just like you know, savings carriers putting money in and that you just pull the money right back out. There is initial, especially those first two years, there are some costs. But once you get past that, I mean, the costs are way more than worth it up front to be able to create the benefits you create, year after year after year with this tax free returns.

Unknown Speaker 1:04:31
I mean, the goal is for like a high net worth investor one $2 million dollars and above is that you want a little slush account, you want to know where you can go and grab 50 $200,000 in case somebody steals your kid and you can either pay ransom money or a good deal comes out that liquidity is nice to make a little yield on it that otherwise you wouldn’t make even 1% and it’s a good benefit to have that obviously there’s a cost to that right So, you have to wait because everybody’s a little different. You guys have any more questions? type it into the chat now,

Unknown Speaker 1:05:07
Pruitt’s at the end of our time right now, and I don’t want to cut too much and your guys’s networking time and stuff. If you want, I can show you that one more thing about the infinite ROI really quick.

Unknown Speaker 1:05:15
Yeah, go ahead.

Unknown Speaker 1:05:16
So, yeah, this this is, like I mentioned, like bank actually financing it for you. The bank does it all for you that way. Now, here’s the prerequisite, you have to have a net worth of at least two and a half million dollars. And that’s and that’s not like the investor network, right? This is like net worth including all your business value, which is always debatable. You can usually most people undervalue their businesses from what they actually are valued at home equity, all of this counts. But if you have a net worth at least two and a half million, 5 million if you’re over the age of 50, if you have a net worth of at least two and a half million, you can get that bank to pay your policy for you. So think of this as a separate strategy. The first thing I taught you is short term. This is like the first one with the infinite banking. This is all about how to create cash flow now and invest now. Thank you. This is like this infinite return pension plan and about 20 years, not to mention banks paying your death benefit for you. So you have to pay it yourself, right? This is great for legacy planning to even if you’re older. So banks pay premiums for you, they pay the full premium. The cool thing is after about 20 years, this you can serve drawing an income of anywhere from like 50 to 500,000 or more a year, depending on your situation. So what happens is the bank pays or premiums, they charge you at life or interest rates, and they’ll pay you those premiums for 15 years, right? They’re charging those interest. And then after that, what you want to have happen because of course in the beginning, cash value is less, you know, while premiums are higher, but eventually what happens the cash value catches up and surpasses the interest you’re basically creating arbitrage off their money because library now is charging like 3.7% of your earning five 6%. Who gives care, who cares? I mean, we’re gonna start passing them up, right. So after those 15 years, now, you got extra cash in there, you could pay off the bank, and all their leftover cash is yours to use for your own income. So just kind of show you a quick spreadsheet on an example of one of my clients, you know, here, the bank was putting in that 364,000. So they’re putting that in every year for 15 years. And we just kind of preach reprojected libel rate we put at the current rate, but we kept jacking up every year just to be conservative, right? Because we don’t know labor rates could stay low, and it’d be great. It can be way better than this. But we just want to see what would happen if they did increase the rates over those years. And so they charge the rate, you can see the end of your loan balance in your one, it charged about 30 grand of interest. So you have 394,000 your cash value is only about 170,000. So you get it you have this you’re upside down about 235 grand right. The cool thing is your death benefit even after the loans paid off. If you were to die during these years, your death benefits over 9 million almost 10 million bucks. Now as time goes on, Now you see, like at your 19, or your 20, they pay off the loan, right? The loan was like to $10 million, you had 11 million you guys paid off now you’re left with that little call me there $1 million. And plus you got a $7 million death benefit. So now you’ve you just had leverage the bank to use all the money, you put in your own money, you pay them off, now you’ve got a million bucks and $7 million death benefit, you start pulling off about hundred and 82,000 a year in income. So it’s definitely not a short term strategy. But for for the right situation special, you’re a higher net worth. This could be an awesome additional strategy that you use to say, Hey, I wouldn’t mind extra cash flow and 20 years from now and essentially pay nothing for it. You know, it would be cool

Unknown Speaker 1:08:43
for some people, for the people who are like, Well, that sounds too good to be true. Like how does how can the bank How did the banks do that?

Unknown Speaker 1:08:52
Well, they know that they’re going to get the interest back anyways. For example, when you’re upside down, they want some sort of collateral, so whether it’s like a letter of credit from your bank or the bank says, Yeah, well, we’ll create a line of credit for you that will cover that in case something happens. Like if you decide to cancel the policy now cover their butts, you know, give the bank their money back with the interest in everything. That’s I said, that’s the one negative from the investor perspective is, yeah, you got to have some collateral, some skin in the game there. But like I said, you can get a line of credit, they can cover that from your bank, or you can even use like brokerage accounts, you know, if you got money sitting in savings, you got brokerage accounts, you have money sitting there and savings anyways, you can use that as your collateral. And then the banks say, Okay, cool. We’ll loan the money. As long as we know, we can get our money back. That’s what matters.

Unknown Speaker 1:09:37
There are I posted a couple of links simple passive cash flow, comm slash bank, where I have sort of a user manual. How do you use this actually, it’s just for my own personal need, because every time I need to withdraw money, I forget how I also do it. So I wrote like, how I do it in there and so you guys can kind of read up on that. I even cut and cut and paste the exact verbiage I do to send them an email that do this and talks about the flex paid off writer, which is a little complicated. And I don’t know if we should go over this, this webinar, but there’s I did a little write up in there about that, and a whole bunch of other information and also simple passive cash flow calm slash often how I use this banking instrument in my whole investing scheme.

Unknown Speaker 1:10:31
Yeah, I mean, we want to talk about that necessarily mean that’s just, I mean, simply put, that’s just us putting in more money than what’s required right and putting an extra cash. Yeah, it kind of go with your point, like getting out the money. I just tell people shoot me an email. You know, if it’s less than 50,000 bucks, you can shoot me an email, I can forward that email to the company. And then they’ll either one mail you a check, or to direct deposit into your account, usually within a week to a week and a half. So it takes about a week to week and a half to get your money. If it’s over 50,000 that I send you a little form, say sign here saying Yes, it’s me, I want this much money out super easy. And I good for it to the company. So it’s really an easy process. Like if you want to get x the money. The cool thing is it’s not too easy, like a like a checking account or something like that where you can, on a whim, just pull the money out and blow it right, you got to think about it a little bit. So that’s one thing, it kind of adds a little extra level safety for some people. So so we’re

Unknown Speaker 1:11:23
kind of close this out for with this question. You know, so this all sounds really cool. How do you suggest shopping around at insurance companies? There’s a guy here he has an application open, but like the feasor unless you get that side by side, right. It’s hard to compare. It is.

Unknown Speaker 1:11:45
Yeah, you want to get apples apples for sure. One independent broker that helps. I’m one of those brokers obviously, like I’m a guy who designs them and actually writes them up and I work with several different companies. And usually I go with one company or whatever that might be the best. For your given situation, but you know what I do I always invite people Mike shot me around if you want Like, seriously like, fine an apples apples if anybody can beat me, please show it to me because I would love to know how they did it because the truth is, is that even when people do it wells I still come out better than that. And that’s even with non guaranteed returns of whatever they think the stock market might be. Right? That’s there’s no guarantee on that. So yeah, I mean shut. I love it when people say hey, here’s what I got from this other guy. It’s like cool, I’ll beat it. You know we’re best the best I’ve ever seen somebody do is match me because they knew exactly how to do what I did with the same exact company. But even when they’ve used the same companies I usually always beat those people to

Unknown Speaker 1:12:43
there’s information there was it was your email to email Chris and then if you guys don’t get it you guys can always email me I’ll forward it off the press but

Unknown Speaker 1:12:52
yeah, yeah, if you want email me to shoot me an email Chris. So just like ch ri es at money ripples, calm just like you See there on the screen? Do not put in money nipples. I did have someone got to interview me it’s like money nipples.com I love it like, I am not that kind of company. I promise you not that kind of cash, you know, money ripples. Yeah. So there you go. No space.

Unknown Speaker 1:13:17
Yeah.

Unknown Speaker 1:13:18
Alright, so this we’re going to take a networking break so I’m going to split you guys up magically into six groups. And this is the free form area where I’m going to set the clock for about seven minutes so you guys can chit chat a little bit. Your network is your net worth and we do this on our mastermind calls so if you guys are interested in joining the mastermind go to simple passive cash flow comm slash journey

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