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30-Min Teaser Webinar

we’re going to be going over the infinite banking scheme that you guys have been hearing about profusely from a lot of podcasts out there, they get like an insurance salesman and they talk about how the wealthy do this. I personally do this.

I started with a $50,000 a year policy back in 2017, 18. And now I have a bigger one and a lot of people in the family office group are using these policies. So we want to give, this is a primer really quick presentation. These are the slides we’re going to be going through today. This is going to be a little bit of a high level 20 something slides.

If you guys want to go through the company of men on the simple passive cashflow.com/bank, you guys can be to this year as we go through this presentation, but we’re going to be doing a special a couple of hours cram school, . We’re going to be going to this a lot more in detail on September 4th. If you guys are somehow watching this video, after that date, all these videos will be posted@simplepassivecashflow.com slash banking.

Or it will be put into the e-course a much more in-depth and curated course, which you guys can go through and learn about this stuff, 📍 but let’s get into it. If you guys haven’t met me before, my name is lane Colwell. I run simple passive cashflow.com. Here’s my bile.

The other person helping me present today’s tether for the Kala. Do you want to introduce yourself real quick, Tyler? Sure. Hi, 📍 I’m Tyler . I’m currently residing in Honolulu. Hawaii. I grew up in Hilo, went to university of Washington. Got my degree in engineering. And then I was an active duty Navy officer for about eight and a half years.

Transferred out to the civil service. Or I was a project engineer, construction manager, eventually first-line supervisor, and then the chief engineer in the end up in 2001. Retiring from there. And as far as from my real estate experience, I’ve been investing in real estate since 2002, where I bought my first single family home in Jacksonville, Florida.

I did house hacking then they didn’t know that term, but that’s basically what I was doing. Auto fuel more over the next few years got overwhelmed, stopped married with kids and put investing on hold until. 2018 or so when I met lane with online, with simple passive cashflow and ever since been so deep into syndications currently have about 24 active syndications going on.

And enjoy that. And that’s what allowed me to basically retire as far as for my insurance experience. I got my first policy about three years ago. I looked at trying to get, yeah, understand how that works. So I got licensed and then eventually started actually writing policies and I’m currently.

I’m licensed in many states across the United States. So Tyler he is an investor first and this whole discussion on this infinite banking concept that we’re going to call simple, passive cashflow banking here in the future. I been a lot of it is stemming from, how do we use this liquidity in these insurance policies to do what we do, which is.

Totally different than what most life insurance salesman of create and customize this stuff for. Those guys just don’t get it. They don’t understand how the wealthy used this. These policies basically gets whole life insurance over-funded, but configured in the right way with lower fee structure. Just making it better for the investor to use for their investing purposes.

But, yeah. So where this all came from, I asked Tyler A. Long time ago, Hey, if you’re interested in this stuff, go get a license. And then cut the fees down for me and my friends. And he he went and spent what, a couple years then a couple of years learning. Yeah, that’s what you get. When you get an engineer to do this stuff, they actually read everything.

So let’s start off here. Let’s I mean, this, I think a lot of people, they go online, they look up whole life, infinite banking and everything that comes up is it’s a scam, right? Dave Ramsey will absolutely, talk really badly about it. But I think the difference here is it’s not, we’re not configuring this, like how most people do where they’re configuring it for high death payout and high interest rates.

We’re doing the complete opposite work at food bank for higher liquidity instead, so that we can take the money and invest it in, higher producing assets, such as real estate, or, if you guys still want to do your stocks and mutual funds, you can still do that.

So we’re taking the traditional finance method and turning it around. This is typically how. No normal people do it, they put it in the bank, it deflates and value with inflation and inflation is running rapid. And that kind of makes it even more case to do this.

Tyler wants you to talk to us about some of the insurance. Oh, some life insurance works. Sure. I think that the main point here is that if you search online, you may hear from some financial advisors that, whole life is a bad investment. Don’t do it. If it, it’s just that it’s not structured correctly.

The ultra Walty or wealthy, or even banks, they own tons and tons of life insurance. And the reason for that, it’s a safe, secure assets. And it’s liquid. So this slide is just basically showing that banks on and hold a lot of assets of their assets in bank owned. Life insurance is basically life insurance that is owned by the bank.

So it’s called Bali. But yeah, if you look at any large bank on their asset sheets, they have tons of life insurance. Yeah. So the thing is, they like the pros. This is what they. And effectively what we’re doing here is getting rid of that, man. Yeah.

So this is the loose framework and you know what we’re trying to get to, we’re trying to bang from ourselves and that term, it sounds school, right? Like instead of using a bank that the bank is able to leverage our money and go invest. No, we’re doing this on our own, working directly with the insurance company, which by the way, to me is a lot more secure than any bank FDA.

Sure thing out there of insurance companies are some of the largest companies that have the longest track record. When you have a contract with an insurance company, it is very secure.

Like a lot of you guys jump into these apartment buildings and you guys know we never buy a class assets, a class locations because the returns just aren’t there. A lot of times the insurance companies are the ones buying those large act class, a assets in the class, eight areas because they are going after capital preservation.

A lot of times is their cap rates are anything from two to 3%, but they don’t care. Because they want to just preserve and they don’t need to make that high rate of return. They’re in the game of just being secure with people’s money, but not every life insurance carrier is weighted the same.

Okay.

Tyler, I want you to I think everybody has a little bit different definition of what infinite banking is. Depending on the way, people understand things, different things resonate with different folks, but why don’t you take a first crack and what this is, or something never heard of that.

I best define infinite banking is it’s really a process in creating, private vault for you to use as your bank and overall it’s a process. The vehicle that it uses is holding. Insurance and its dividend paying whole life insurance is the product of choice that I specifically like from multiple reasons that we’ll go over.

But that policy then is you’re you overfund it. And in that way it has a cash value that you can ask. Your cash at any time via policy loans. That’s the overall concept. And as you pull that out, the money still continues to work in their vault or in that, in your account. And you’re able to deploy that elsewhere and pretty much have your money work in two places at once.

Yeah. So the way I personally use it, when I had a policy, when I first started to do $50,000 a year, after a couple of years, two, three years, I had at least a hundred thousand dollars of cash value built up in there. And, I always try and keep my liquidity low in my bank.

You never want to have too much cash making nothing, that’s why the next money is in your infinite banking policy to cash value where it’s making it a nice little tax-free yield and we’ll get it. That’s the first component of why, we’d like infinite banking so much when the money is in.

And, I would call this a government in full, but it’s just for some strange reason when it’s life insurance, your yields, there are tax-free. So that’s a place to store my liquidity. And then when I need to go into a dealer too, and need to drain that liquidity, I have it, but at least it’s not sitting in my normal checking account savings account.

Not doing anything.

The guaranteed growth. So use the use of the whole lot. Insurance. It has a guaranteed aspect of it. Current gross rate of that is 4% that is about to change, but the policies are ranging from three, three, 3%. It’s three and a half percent uncorrelated not tied to the stock market directly.

On some policies you may have the choice and you can be in control of that, of how much funds are correlated. But one of the main benefits for investors that this is not correlated to the stock market protection. So it is a product. So there is a life, the death benefit portion of it. But in addition to that in states, It varies, but there is also some liability and bankruptcy protection with the cash value or the death benefit over your policy.

Yeah. So some of our doctor clients, what they like to do is they stuff a lot of cash in here mainly for this protection aspect, right? There’s all these different asset protection strategies out there. There’s not one that’s going to get you to trying to build your castle with multiple layers of protect.

And diversifying. So by putting some money into your life insurance policy, you’re shooting at one part of your portfolio, your network. Yeah. And the bottom, the liquidity, that’s one of the main appeals for investors where your funds are not tied up. You have access to them.

And it, you would have access to it in the forms of policy loans, and that’s what keeps it also tax-free where you have access to the growth and of your policy. And I think a lot of us, myself included my wife, Tyler’s wife, we all got swindled at some point in our early twenties, maybe early thirties where, you know, a long lost college.

Classmate or high school classmates calls us up for lunch and China’s and stuff us into one of these badly customized, full life policies. Now that typically the way that they’re structuring it, it’s not built with good liquidity customization, as you can see this is a lever here. There’s. If you were to imagine there’s different ways, you can customize these different components.

A lot of these guys, they will ratchet up like the growth rate, but that’s not the point, right? The point is we can get much more, better returns outside of these policies. So this is why it’s counterintuitive to a lot of these life insurance agents who just aren’t real estate investors. And, we’re just glazing over the top.

A lot of this stuff, a lot of this is in that infoPage@simplepassivecashflow.com slash bank. You guys can get access to the e-course for free there. And then, we’ll be doing that cram school later on where we get to go into this in more depth and ask any particular questions.

Yeah. Okay. I can summarize, the purpose of this is basic to really emphasize. That it’s really the design of the policy. That is the most important factor. You could, you, you could have the same product at the same insurance company and they would perform much differently and that’s all based on the design.

Yeah. And this is the classic. Hey, let me just shoot Layne an email ASCO, Hulu, the CPA lower he’s using, or are you guys going to. Mass mutual Penn, whatever, like top AAA rated life insurance company. And let me just go work with them. Whether you work with them or us, like everything is the same except the design.

And that’s the critical part of what we’re talking about here.

So I can cover this all. So is this there’s two main factors of the policy design. The two things you must maintain, so instruct to keep it an insurance product, which then reaps the tax benefits of it and the tax treatment. You need to meet some IRS limit. So there is some limits in there and you people may hear the modified endowment contract or the seven pay limit that keeps it an insurance product where it’ll be tax favored.

And along with the design maximizing the cash value. So you have the liquidity early to go use and do investments as you choose. And those are the kind of the two main levers on, in the design that you’re playing around with and, way back long before there was simple, passive cashflow, a lot of smart people figured out that, with it being life insurance, you could have your yields in there grow tax-free.

And of course, there’s always people out there that get a little greedy. So that’s where the government started to put these limits in there that you have to have a search and above the actual life insurance, you can. You don’t get a dollar of life insurance, but stuff like the zillion dollars in there and still make it tax free.

People did it, which is smart actually, there’s limits to it today. And this is what we’ll go into more detail in the e-course and then in the cramps.

Yeah. And just that IRS limit that’s based on the insured’s age, gender, and the amount of death benefit there is. So they’ll, we’re designing it a specific way to minimize fees. The death benefit is needed there in order to be able to max fund it to your targeted amount that you want. And one common question that comes up here.

Some people who think that they’re older in their fifties, sixties, they think that this is going to be more expensive. And then, guys are typically a little bit more expensive than females for some strange reason. Really at the end of the day, it really doesn’t matter.

Like we’ve compared policies from, 30 year olds and 50 five-year-old. It the cost of insurance really doesn’t matter. And why is that? Again, we’re not really doing this for the death. Hey, out again, we’re just, we’re doing this just to call it life insurance and the bare minimum so that we can have this policy book tax-free to be able to stuff cash into it.

And that’s, I think where a lot of people, they missed the boat on this. This is, yes, this is, there was a debt payout for it. It is life insurance. But that’s not the purpose. And that is why, the agent, the gender, and, people also say Hey, can we ensure my kids will talk all about that type of stuff?

And the e-course in the webinar, this doesn’t really factor too much into the cost of this.

And the the second main limit other than the IRS limit, when designing that we have to be careful of is just the individual policy limits. So each individual company has some limits. Yeah. And specifically one of the main ones that they’re starting to limit is the. The amount of paid up additions, one can put in.

So each company has different limits. For example, one company may have, you can put up five, five times the base premium or 10 times the base premium. So we just have to design it accordingly for that specific company. And that’s where the flexibility comes into play. And that, that helps decide what, which company is best suited.

And this is when I was learning this stuff. This stuff gets to be really complicated and it changes all the time. And when I was just learning about this, I thought it was pretty simple, know, this is something that I learned and realize, we need to have somebody that’s under the umbrella of our group.

Kind of be on the look out for all these, these changes. Coming down the pipeline to keep us out of trouble, but also optimize getting the best policy for our situation.

So where does your payments go? So every year there’s a premium payment. There’s two main places that your money goes. One is to the base premium. So that’s basically to cover the cost of the insurance. That base premium is specifically what we want to drive down as low as possible, because that is a pure expense to you as a client that paid up additions, that’s really a cash.

Very little fees on that. And it’s, you almost see one for one cash value increase on any paid up additions that you contributed. There’s different premium splits. Some people may hear, 50, 50, 30, 70, 10, 90 traditional whole life. The way it just was. Normally you may, and you may have seen in the past, that’s really a hundred percent.

Base premium. So that’s why it takes 15 to 16 years, maybe for you to break even on the, on your cash value for the amount of premiums you paid. And we’re able to basically modify that so that, you’re breaking even sometimes years, between years three and four, five, usually at the end. And that’s the use of this premium splits was also introduces a lot of flexibility that you may have throughout the year.

So most of the credit investors over a million dollars net worth, no, they’ll probably do a policy where they dump a hundred grand in here. So add another couple of zeros onto them. And again, what, the way we’re trying to do it is we’re trying to minimize the amount of base premium. So the paid-up additions can build up our cash value so that we can take this out the next day as a policy loan and stick it into a multitude of different deals that make a much higher yield and sort of the industry secret of life insurances.

If you’re a sales. And you’re just worried about your commissions. You try and trick your clients into getting as much base premium, the more life insurance, but that’s the complete opposite that what we’re trying to do here with simple passive cashflow banking. Not that we’re, we want to maximize the paid-up additions, typically going much better than a 50, 50 premium split.

Yeah. That’s less insurance premiums and fees for us. But that’s better for the client at the end of the day, so they can keep most of that cash value, but that’s typically what’s wrong with most normal, full life insurance. And I think this is why, Dave Ramsey, all these online, Google’s kind of actually demonize this stuff.

And I went to if you’re doing like a 50, 50 premium split and a lot of this is going to your base premium, this is where most of the commission certainly calculated.

Yeah, this is an extreme example that 10 90 premium split, in some cases, some of the people in the family office group have found that the 70, 30 premium split is actually better. That’s an I actually use, this is just more of the extreme about that example where you’re still complying with those mech limits.

So you’re getting the tax free treatment. But you’re stuffing as much money into the cash value and you’re minimizing your feet on this side.

Yeah. And one unique way that someone explained it to me, as far as understanding the premium PUA relationship was relating it to your house. The base premium is like your mortgage. So that’s an expense or a cost that you have to for your house. It doesn’t, it slowly as value, right?

By slowly paying down the principle. So base premiums does add a small amount of cash value. Just like how paint on your mortgage slowly pays down the principal. But if you were to, you can think of your paid up additions as if you were to do a renovation where you spend, $50,000 to renovate the kitchen, that $50,000 spent on the kitchen basically increase the value of your house.

Hopefully not almost exactly the same or even more so that’s the home relationship as far as the base premium, paid up additions to mortgage and and our renovation. Yeah. And again, different ways to understand this and it, to me personally, and it really took me about a year and a half to really grasp this school.

And the differences between typical whole life insurance, configuring it in a way and using it in a way that the wealthy do have for some of you guys use that strategy where you’re taking a hilar out on your mortgage and paying down your mortgage with simple interests versus amateurs interests.

It operates in a very similar way. And in fact, when you’re using a whole life overfunded or infinite banking or whatever you want to call it, simple passive caching that. It is superior to using a hilar in my opinion. And I actually think that’s, this is a lot better than using a 5 29 plan for your kids’ college savings too.

Yeah. How do you access the cash value within your policy? So that’s in the form of a policy loan and I’ll just caveat, with the low interest rates, there are other ways also of accessing the cash value of basically collateralizing your cash values through a traditional. That is also an option, but for here specifically how a policy loan.

So this is a loan you’re taking through the insurance company. You’re basically utilizing your cash value that you have in there. You’re usually able to take about 95% of that cash value in the form of a policy loan. Your cash value actually stays there in the account. But your death benefit is collateralized.

So from the insurance company, they’re basically able to give you the loan because they know at some point. If you pass away and you don’t pay back the loan, they’ll basically just decrease it from the death benefit of your policy. So whenever you take out a loan there’s an interest charge to it.

However there is no payment or set payment plan. You are in control. You can choose to pay it back or not. And very similarly to a Heela. They’re very similar. Yeah. And tie it in with the other slide up here. This is the cash value, right? We’re stuffing money into the cash value.

And this is what we’re taking the volts out of to put into deals. If you want to buy jet skis, at some point, you can use the money for that. You don’t have to ask the bank or tell the bank what those annoying questions that the hilar application always has. You’re in control.

And, some of the people in the family office group or, going to another bank and collateralizing this cash value policy getting anywhere from both 3% interest rates. And for some of you guys who are good business operators who drive your adjusted gross income very low at the same time, it screwing yourself by not being able to get a loan for a home.

This is a great way you buy the home cash. But you dip out of your cash value of your life insurance policy to essentially put debt and, get your leverage up, which is always a good thing. If you can pay your debt service. So this is, that’s just one of the merit of different ways that we’ll go into more detail and we’ll ask individual questions on the webinar next week.

But, this is if you’re seeing how the wealthy are doing things, it gives them a lot of options and it’s something that they control that they bank from themselves.

Yeah. And this slide was basically just go over an example. If you were to take on a loan to invest in real estate. You can create some sort of arbitrage use of the cashflow from your investment to also cover your debt service team for the policy loan. And as Leanne mentioned, one of the, one of the big benefits is that the policy loan interest is calculated as simple interest.

The cash value continues to grow in your policy, but it’s compounding interests or compounding dividends you’re receiving.

A quick policy example. So this is for a 50 year old male. And when you’re looking at this, the target amount that this individual would want to put in is 50,000 per year. So you’ll see that. And then the breakdown of the, that amount is pretty much a 10 90 split. So the base premium is here.

The 45 45 is what is required annually. And that’s 10 per that’ll cover the base premium. And the about the 44,000 or 45,000 of P Louise is truly unscheduled, or you’re able to stuff that in throughout the year here shows it where you’re funding it for seven years and you are after that seven years, we’re basically doing what you call a reduced, paid up option.

So you’re eliminating any additional premiums needed from there on out. And then you’re just letting the cash value and the dividends girl throughout the year. On this specific policy, even as of 50 year old, you’re breaking even at around year five. In cash value or between years four and five.

And you from year one you’ll have liquidity or your cash value is about 88% or so of what you’ve contributed. So you still have you lose some of the quality up front and that’s the cost. That’s the main cost of starting these policies. But from then on, it truly feels like a deposit where that 50,000 you’re putting in every year, your policy cash value is growing by larger than 50,000 from year two on.

And this is I think this is where people get very confused, right? Because the difficult part of this industry is an insurance agent and ratchet up and take whatever fees they want like a home loan, but worse. So that the way. Shop this stuff around is to figure out what Tyler is saying.

That break even point when dad is, that’s the quick and dirty way of comparing policies and colors always does that for our folks. We always beat them anyway, but that’s the quick and dirty way of comparing the policies that you have now. Of course, there’s some, different nuances with certain kind of exclusion.

That different types of more flexibility of one year being able to pay your rider or the other you’re taking off those types of things that we’ll get to more detailed in the e-course and the webinar, but, for the most part that’s, if you just ignore one thing from this little webinar

Yeah, a question we also get often is what, the policy loan rates. So if the normally most insurance companies for their variable interest rates, it’s based on the moody AAA corporate bond index. Granted we’re in this super low interest environment. It’s two point something percent, but the company also has their floor, their limits, as far as how low their policy loans will go.

Most of them are all at the company policy floors, which is hovering around four and a half or 5% as far as their variable interest rates. The company declares these rates annually, it becomes effective on your policy anniversary date. It’s that policy anniversary date may be different for everyone yet.

The company does declare it annually. And the good news with it. If your variable interest rate can increase by more than 0.5% every year. But it can go down. It has no limit on going down, but keep in mind that, the corporate bond index that, that, that doesn’t fluctuate, like what normal interest rates fluctuate.

So it is a slow moving number. But there, there is some safeguards in there where you’re not sure. Get blindsided by this large increase in policy loan rates. And, we have a lot of FAQ’s that we’ll talk about in the e-course, here’s some of ’em, the difference between the whole life and term life.

I’ll talk about, when you use one or the other we also discussed IUL, no, people always have that question and that’s the way we do, everything is a lot of this is products. But when is the product right for you? I honestly don’t care which one you use.

It’s I care when it’s the right one and I’m the person let’s say when you do term, when you do whole life, and the such we’re going to talk a little bit about. Different needs, which insurance come. There’s a lot of rogue insurance companies that have really like loose standards, but it’s, it doesn’t make sense when you actually are with a company you want to be with a secure company.

So we’ll talk more about that small insurance companies for as large insurance companies. Talk a little bit about different ages, who to get the policies on a lot of business owners out there. This is definitely something to think about, getting it on key employees. I This is what all like the big boys, like Walmart.

Talk a little bit about taxes. And again, all this is in the e-course which you guys can get access to@simplepassivecastle.com slash banking. And we’ll talk about this on the webinar. We’ll be going to the cram school format. We go into this stuff that much more to tell us.

What I wanted to do is go over. So here’s the big picture and the toddlers, you never seen this slide. I made this yesterday. This is the roadmap here. Step one, put a hundred grand in and not say you got to do that, right? Like we help you figure out what’s the comfortable level for you to start.

When I first started doing this a few years back, I did that $50,000 a year for six years. Today I’m doing a much larger one and I always tell people to start off small and probably, or it probably makes more sense for the agent to have you do a bigger policy than you’re comfortable with so that you can teach him to collect his commissions.

That’s not where we’re about here. We want set people up, but yeah, you wouldn’t, you stuff a hundred grand in there in this scenario or 10 grand or whatever you want. Step two, you start to establish a banking firm yourself system, and you are able to take a big loan from that cash portion.

And what we’ll talk more about detailed on the next in the e-courses in the beginning is when it’s, the cash value loan is going to be the least. You’re going to be able to take the lease out in the middle. But as time goes by year two, year three, you get typically 90% of what you put in and your 4, 5, 6, it’s essentially everything.

So again, this, all this stuff is, these are front loaded into this stuff, but in the first year, just to using that as an example, as being the worst case scenario, and you’d take that 85 grand on your original hundred grand, we stick it in a deal and you make more money that way. And so now. Step three here, you’re leveraging money in two different places.

Step four is once you’ve act, once you’ve invested the money into a deal or you’re producing income there, which is paying back the loan, right? Just if you would have taken the money out of your heat, lock out of your house and invest it in deals and use that money, the payback. Or what a lot of people just simply do is you just take it a little bit extra and put it on the side.

So they’d know they can make their debt payments for the next year or two. That’s just more of a mindset security thing. Like Tyler says, there’s a lot of flexibility on paying back these life insurance policies. And we’ll talk about like worst case scenario, which isn’t that bad, not paying back your principal and not paying back your.

It’s not the end of the world. It takes a lot for the policies to decay it. Cannibalize itself is the term that we use. And we’ll talk about exactly when that happens. So when you’re customizing the amount of your policy, those are the things that you did have in the back of your head to be able to meet your commitments.

And then the step five here, you have your income generating assets paid back the loans of the policy. Or like they said, just keep that stockpile on the side and just pay it back when you want. That’s what I do. I’ll take a loan out. I’ll go into a deal. I’ll take a loan out and I may not pay it back for six months or a couple of years.

I just whenever I get a glut of money or when the deals exit, like we just had a deal exit a little while ago, Tyler was limited in that one. That’s what we did. We take that money. We put it back into those cash. That’s how we use these policies. Really no real motivation to really payback the policy because it’s ours.

Life happens here, a little cone I put here, so you have unexpected expense loss of job. College savings. Use this cash value as your emergency savings account while let’s making yield, give a nice four or 5%, but it’s making a tax. So in actuality, you could probably argue that to making five, six, 7% potentially, or even 8% for somebody you hide in cupboards is not there.

Step, step six is, grows over time. And then you start to get a handle how to use this account, right? Like I’ve gotten a handle how to use it. I take it out. I put it into deals when it deals cash out. I put it in here, but then I go into two more deals. In the time being it’s it becomes a very fluid kind of state and it’s very similar to it.

You guys have gotten really accustomed to managing your passive activity losses on your taxes to offsetting your capital, gains it, depreciates recaptures on deal exits, and then a sub seven all this time. You’re enjoying the benefits of asset protection. And at the same time, if we always joke, if I died or toddler died or wives are gonna be, yeah.

It’s sad, but they’re going to be set. I always ask what would you do if you had X amount of money? If I die, she just tells me to go play theater again, but yeah, you’re setting them up. And it, we’re technically not doing this for death payout, but that’s some of the, also the benefits to them. Oh, and Tyler, is there any kind of other he wants to get assisted living benefits.

There’s disability, there’s all these types of things that can be put in there too. Yeah, definitely. And it’s, I think the biggest thing is truly the flexibility and that’s the flexibility of funding, the flexibility of what you can use it for, you are in control. So for me personally, this has replaced the five to nine a long-term care plan.

All of those other things that I would normally contribute to where it locks in money, or even remember my retirement plan The all of these will cover that you’ll be able to contribute. It grows. We’d like to call this the, an asset where you’re doing this in addition to what you were doing already.

So it’s not, you don’t have to choose between a policy or a syndication deal. You do the policy and you do the syndication there layer. So you’re just enhancing what you were going to do. Already, but surely the flexibility if it’s properly designed is it, allows you to choose what you’re going to do with this and allows you to set it up super benefit, your self while you’re living along with legacy planning for your beneficiary.

Yeah. And in the course we’ll outline all the advanced strategy. What people typically will do. They’ll dump in a bunch of money the first year, sometimes based on where your birthday is, what part of the year it is, you can backdate and double this about and get her to the jumpstart on it.

And then, these guys are dumping money in there quick, so they can quickly put it into the next deal. Some sometimes, usually it takes another like a week or two to get this stuff really wrapped. Get all the banking relationships, direct deposits all set up, once it’s all set up, it’s as simple as calling up that life insurance company or just going into their online portals.

And in that direct deposit to your account, then you are off your funds that you signed your PPM and other certifications. And, and they’ve been, you’re set, you’re making money to places and, that’s where we get to at the end step eight, you stop worrying how to grow your wealth because you’re optimized.

What’s the passive cashflow is it’s not that hard. What we outlined here is exactly what the wealthy do, but it’s a little bit of a twist, right? We’re using the same technology, the same product that is full life insurance, where we’re configuring in a very special way that benefits what exactly what we do.

If you guys are real estate investors or you invest in other types of deals. This is your jam guys. This is exactly what you guys need to be doing to augment and make money at both places and get the asset protection. But even if you’re not real estate investing, like Tyler said, for a lot of people, this replaces the 5 29 plan or any long-term type of insurance options, or just a place where you just get cashflow building up.

It’s a lot better than in your bank and it’s something that you can try.

But anything else you think I missed out Tyler? No, I think yeah. And we’ll go over a lot more in details and answer specific questions during the e-course. Yeah. So yeah. Make sure you guys sign up here. If you guys are listening to this video or after 20 20, 1 of just check out this website here, it gets signed up for the free I-Corps.

And if you guys have any questions contact information, this was up here earlier. You say, we always tell people, get educated and then we can help you guys out, whether it’s taking a look at your current policies or getting you set up with fresh new ones, get this infinite banking set up for you sooner set up.

But. Thanks for listening guys. And we’ll see you guys next time.

Introduction to Simple Passive Cashflow Banking (Infinite banking or IBC)

This is the introduction to infinite banking in the next , two and a half hours, however long we need, just start at the high level, this is the flow. Why you do, if an, a banking, this is the whole point of doing.

No, you just using an arbitrary number, like a hundred thousand dollars, put it into a whole life overfunded policy, you put it into there. And the whole point we’re doing that is so we could bank from yourselves or utilize this banking phenomenon so that we can take a loan from our policy.

And then invested in rental properties, syndication deals, you could remodel your house, you could buy a car, you can pay for your kids’ education. You can use that cash value for whatever you want, and you can use the income, not income from the assets that you invest in such as real estate syndication, or just put it in a stock market to pay for the debt arbitrage.

Very similar to hilar, but I feel like this way of doing things is much more superior. You could use it to pay for unexpected expenses and then your policy grows and grows and grows. And then now you have this big pot to pick from, and this is what more the experienced investors will use as their opportunity.

To go into more and more investments and, in case they need to have these expenses in life that pop up. So this is the cram school. We’re going to be walking through the e-course page by page again, the whole, the random questions to the end. But if you guys have any questions to what we’re talking about, please put it in to the question and answer box.

. 📍 Just a little background of myself. I got a wife and child and a dog now. I grew up in Hawaii. I was in Seattle from 2003 to 2007. My education background is a bunch of engineering. I started investing in 2009. But my first rental got up to 11 rebels in 2015 today, I mainly invest in private placements since indications is, a lot of credit investors will say, why you can’t really find any really good reason to own any rental properties directly, private placements in syndications.

If you can find people that you trust, you don’t get any debt in your name of the loans. Go on your name to go into general partners. None of the headaches like tenants, toilets and termites, and I think just better deals. And this kind of goes hand-in-hand with this infinite banking strategy that we’re going to talk to about today, syndication deals come up infrequently and you can need to save up large chunks of money, 50, a hundred thousand dollars.

So this is what I do with my, for the banking policy. My buddy 📍 here, Tyler for the Kala is also going to be presenting with me. Sure. Good morning. I also grew up in Hawaii a bit older than me though. Also went to Seattle university of Washington and studied metallurgical engineering.

I actually went there on a Naval ROTC scholarship. So upon graduating, I became a Naval officer for eight and a half years. Through that eight and a half years also got my a master’s in mechanical engineering and a lot of 2009, I transitioned out of the active duty and went into civil service.

Still worked as a federal worker, as an engineer and did various jobs, project management. Construction management and facility management. And then I became a frontline supervisor and eventually Indian up as a chief engineer with veteran’s affairs. And I’ve transitioned out of that. As far as my real estate investing background, I started my investments back in 2002.

I bought my first single family home in Jacksonville, Florida. Mainly with the VA. And I did what is now known as house hacking then acquired about three or four more doors over the next four years. But I, it really got over, I was one to do it all myself, so we got it. Got it. I got to my room maximum limit is being able to manage it myself, stopped.

At the same time I was married. Having kids. So my focus shifted to that until about 2017 when I started out being around in yeah. Mortgage notes. Wasn’t as simple as I thought also. And then I stumbled across lane on the internet in 2018 and been drinking the Kool-Aid ever since. Now mainly focused on syndication’s, portfolio of about 24 syndications.

And had three of those go full cycle. That’s, what’s allowed me the freedom to basically walk away from my W2. As far as the insurance side, I was really pitched the idea of infinite banking. About 10 years ago. I blew it off and disregarded it until around 2017.

When I started looking at other investors. I just kept on hearing infinite banking come up. So I, jumped on a policy. It was an IUL. And it’s a little bit more gray and hazy of what, how those work. Being an engineer or being a numbers guy, I just started tracking it researching.

It couldn’t find as much information as I wanted to. So I decided to get licensed to see the inner workings of things. And lane approached me to say, Hey, I’ve been studying this. Why don’t I share the knowledge with with his group? So that’s where I’m at here.

As far as writing policies. I started writing policies in 2019 and that was after joining a mastermind just getting the confidence to do it and yeah, here around them, I’m licensed in various states. And and I’m enjoying it. Yeah. So a little bit more context on that. I’ve always, I started my policy, I think in 2018.

And I started to realize that a lot of you guys might’ve already had policy set up, but the jacket all up, because they could figure it the wrong way, not the way that we want. And we’ll get into how you want to configure it. I told Tyler’s Hey. And told him about it and he kind of kept out on it.

We recently did this predictive index tests. I don’t know if you remember what you are, Tyler, but it’s like the disc profile as we start to hire employees on my side, I realized like I’m a venturer. I think I’m like a leader, but I have all these wild and crazy ideas.

I need people like Tyler who’s, the scholar is going to learn it and come back. What, two years? Three years later than we originally had that conversation. And there’s some tricks to this infinite banking thing. It changes quite frequently. Tyler’s going to be talking about some of the changes that are be.

The hand is, the best time to get it was yesterday, but Tyler does a good job of coloring the details of this, and it is really a full-time job to learn, keep up on this type of stuff.

, I want everybody to be going through the e-course with us. So if you guys can go to sickle Pasa, cashflow.com/bang, you guys should be able to get the outside info page, but what you really want to be getting taught to is within your guys’ members. If you guys can go to e-courses and scroll down to the infinite banking e-course you guys should all have that blocked right now.

So you click on that and we will be going through each section and chapter here very slowly. I’m surprised nobody has asked. I don’t have access. Give me access. Sorry, you guys should all have access to your guys’ numbers portal by now use your email and that if you haven’t been in here before, and haven’t changed your password, the default password, it goes to his passer 1, 2, 3, all lower case, no spaces,

any questions before we move off of getting access. And then that way you guys can walk through the course, along with us.

So infinite banking from a high level, we recorded a thickness as what, a 30, 40 minute webinar. I suggest taking a look at that later, but we kind of chime in here, Tyler, whenever, if you want to add stuff as we just walked through this quarter. Section by section, the infinite banking from a very high level, it’s it’s very similar to putting money into your 401ks IRAs or your HELOC in your bank.

It’s a way of storing cash in the form of cash value. You’re able to pull it right back out to use it for whatever you’d such as investments or emergency.

Yeah. And I say, I call it traditional financing. Either in a bank you’re losing your purchasing power. If your money’s just sitting there you’re not beating inflation. And then the traditional storage’s of retirement accounts the major downfall of that is that it’s illiquid.

So you have very little access.

Yeah. And that this is just showing, I think. Like life insurance is a safe, stable asset. Banks heavily rely on it on their asset books. They have lots of, bank owned, life insurance as their reserves or as, a small part of their investment strategies, but mainly for a lot of their reserves.

The ultra Walty. Banks, they’re the ones utilizing these a lot and or trying to open the doors to, not be so exclusive to those groups that, even us, we, we can use these policies similarly. Yeah. And my takeaway from B’s is, you do what the smart money does, that’s why I always report on what Blackstone is doing. They’re currently buying up a bunch of rental properties cause they know. And, know, these are the strategies that Walmart will take life insurance policies of their head guys. Not because they like them or anything like that, but it’s a good store places to stuff, cash like rose tax-free and that’s the big loophole in this whole thing.

Your money at these life insurance policies for some strange reasons. It’s tax-free, if you could standard that MEK level, we’ll talk more about that.

I think that, we’re talking about whole life insurance, but we’re funded. And if you guys are probably Googling this, not on the side, if you have in the past, there’s a whole bunch of negative press on it. Dave Ramsey. I don’t know why you’re falling Dave Ramsey in the first place, if you’re not huge credit card debt, he’ll absolutely just, just talk, say this, like the worst thing in the world, it’s a scam.

It depends though how the, what your purpose is and what are you using the insurance for the way we’re going to be doing this. We’re trying to optimize the policy for the maximum mom of liquidity, and we’re going to lower the amount of death payout and, of, how much, which is very counterintuitive to how everybody thinks about this stuff.

And I’ve talked to a lot of life insurance guys and they’re like, Hey, Mr. Simple, passive cashflow, don’t you want it to be done this way? I’m like, no. You guys don’t understand like what I’m trying to do. I’m trying to stuff money into this policy. So I can take it back out as a cash value loan and go invested in something that makes me feel double digits.

So a lot of you guys, like my wife included, I think Tyler, the same thing for you, right? Policy created initially, but it wasn’t configured the right way. It wasn’t configured the way that the wealthy use it. And that’s what we’re going to teach you guys today.

Yeah. And one of the main goals is, people can here become your own bank or be your own bank or bank on yourself. Nelson now. It was the farm there as far as publicizing, a lot of the the techniques and the big benefit with that is being in control. Removing the middleman, recapturing a lot of that, the opportunity costs, or just re diverting the interest that you’re paying to traditional banks.

Yeah. You’re having it. You’re having full control of that portion of your finances within the policy.

How the Wealthy Manage Their Money

Section two here, all the wealthy management. No, the wealthy want control. And these are the big advantages of what we’re trying to go for. We’ll create one of these policies tax advantage. So again, when the money is in these policies and it’s growing, I’d say four to 5% it’s tax-free and I don’t know why.

I know why the IRS code says it is right. And there’s all these people lobbying that have these large life insurance policies, the politicians that have their money in here that have this good tax treatment. So when a girl’s at 4% tax-free and it’s like a, it’s a bond, which exactly. In the end of the day, it’s seen as maybe six to 7%, depending what, where your tax bracket is.

So that’s one of the big loopholes. One other reason that kind of pushes it over the edge. Why there’s some small marginal reasons why to do this, liquidity. Store of your cash, just like a key lock, right? You can pull the money out whenever you want the asset protection in each individual state.

It’s a little bit different, but for the most part, the way to think about this stuff is once it’s in your policy, it’s like how. Your retirement funds are off the table of litigators for the most part, or at least the worse off states. It’s a lot harder to get to. That’s not correlated with the stock market and then it is guaranteed growth.

And a lot of these companies that you’re putting your money in, and, as long as you don’t go to one of these rogue insurance companies that don’t really underwrite their people. These are probably the most stable companies out there paying for like a hundred plus years. These are the companies that are buying those large buildings in locale environments that are just looking for capital preservation.

It’s when we buy, when we invest in properties, we’re looking for those class B acids, secondary and tertiary markets. And we’re like we don’t want to touch the large class a assets. In primary markets, but that’s what these insurance companies invest in because they’re going after stability at capital preservation.

And the reason why they want that is they just want the money to be there so that they can fund these life insurance policies for you guys. Yeah. And land, before we go forward, the concept we’re going to be covering today is may. Focused around the use of whole life as the vehicle for infinite banking.

There are other vehicles you could just use a regular checking account and do the same concept. The results would be much different but there’s also other permit life insurance , that are also somewhat popular. This kind of pertains to the use of whole life. So when we sit on the correlate.

That’s why it’s uncorrelated. There are, one company for whole life that has a feature where you can tie it. The returns could be tied to the SMP 500 SIM, very similar to IUL, but for the most part in a whole life is looked at as uncorrelated. And the last benefit is of course the death payout.

Okay. She die, you’re buying a lot of insurance here and it’s, the way we design it or the way you want to design it. Get it for death payout, which, but it’s a secondary thing necessarily. So you get the tax benefits, you have to buy an insurance. So you know, Tyler and I would probably joke around that if we died or spouses and families, we get a huge boatload of money where they don’t.

Invest or worry about anything further dying days. And most people, in the family office group, they get enough of this stuff built up. Talking life-changing money, two, five, $10 million plus. We had a question here we’d like to know which one is better whole life in a banking, IUL policies.

Color mentioned that, the differences, the, what is it built off of? We recommend the whole. I feel like the IUL is for a different purpose. Like whole life is where most people are at today. People that are under five to $10 million net worth. In my opinion, you get the IUL is for something very different.

You don’t use it, get it to store cash, but you get the IUL is like a triple charge annuity, but your net worth needs to be higher and you need to be more what I call a lot. End game. You’re willing to take a lower return, but you want to be guaranteed. And then of course the other type of insurance that we’re not going to be talking about today is term life.

The purpose of that is in case you die you want your survival. To have a nice chunk of money. But that’s what life insurance for world we’re talking about today. The goal of the whole life over funded, infinite banking policy that we’re talking about today, you put money in, it grows tax free.

We have the liquidity so we can invest it, do something higher, better use for, there’s the middle of that asset protection. And of course the death payout is there, but that’s a side benefit. We’ll probably do a, another section on this later on about IUL, but to me, if your net worth, if you’re not the end game, you don’t have a high network of three, five, $10 million.

Plus I think you have different goals at that point. And I think that’s where the IUL comes in. Yeah. And just add a little, The whole life is a stable, is it’s a lot more stable though. Your premiums are expenses, there are set once you, when you acquire the policy, it’s set for our whole life and that’s hence the name whole life.

I UL’s. Some of those fees and expenses could fluctuate along with, the returns fluctuate a lot more because it is correlated to the stock market. So there’s a lot, there’s more volatility. And as lane mentioned, there are different purposes. So yeah, I historically are able to project a lot higher because that the average returns on SMP is 8%.

Maybe you’ll see seven or 6%. But again it’s a lot more volatile. Also laying before we go, the, the discussion about tax-free. It definitely doesn’t grow tax-free but we’re able to access the gross or the cash value in ways that will be tax-free. So that’s the other portion there are.

If you don’t do the right things, you could be taxed on that. Know you just have to make sure you follow the right rules and we’ll go over. Most of those. Yeah

know Walt Disney and these are just examples, entrepreneurs and life insurance, Walt Disney, when banks would not initially fund his construct. Plants AKI became his own bank and brought from us life insurance developed Disney Ray crock was able to pay key employees, through his liquidity and his life insurance policy.

And we’ll get into this at the end, I think in the more events topics. And this is where I really. Enjoy you got this big chunk of money, like the different uses, and this is where you need a peer group. This is what kind of like the family office Ohana is like these different best practices and ideas.

A lot of us are using it in lieu of a 5 29 plan 5 29. So not a big fan of, at all for college education. For other entrepreneurs out there that are showing, low income, because you want to not pay taxes so much such as myself is going to be hard to get a qualified mortgage. What some people will do is they’ll use these by the property cash and just take the loan from their life insurance to get no leverage, because you always want to be using leverage good debt appropriately.

Yeah. So this is just comparing the average versus the actual returns stocks, S and P roughly eight to 10%. I’d probably argue that it’s lower these days, although it’s been on a tear mostly because of quantitative easing, which probably would be good. A little bit blocker,

I think what people don’t realize with stocks, you go to these huge ships and I think the phenomenon that a lot of people talk about is, when you take, when you have. Big dips. You’re going to have to your return, your percent returns have to come back extremely stronger to get up to even baseline or get up to where you’re moving average was.

So it is very misleading. You look at that stuff which is why, that kind of comes in with, storing the value in these life insurance policies.

When I first started to look at this. I’m always a skeptic. I’m always this is funky, right? Like how are people making money off of this? And why are insurance companies doing it? But then I started to what really gets me going is like when successful wealthy people that are financially free, start to use these strategies.

That’s really what I get interested and I start to backwards engineer what they’re doing.

I don’t know if you want to talk about the rate toddler, but this typically, for baseline example, we’re using 4% here that the money girls on these policies. Yeah. So usually the true, I R you know, what policies can see is anywhere between three and a half to four and a half percent.

Typical IRS is what they’re seeing over the life of the policy annually. It’ll different of course, or you’re catching up for the upfront cost for that first year where you have a negative IRR, but yeah, for the life of the policy that are, is about what we’re projecting is 4%. So if you guys are new to this, you might be saying that’s not very good.

But I’m missing the point, right? Like when your money is not working right. Think about it. I don’t want to use the example for crap stable in Vegas, but I will write when your money’s not on the table. Buying, buying bets, it’s sitting on your, in your pocket, burning a hole, making 0%.

But in this case, what we want, when our money is not on the table and syndication deals in a rental properties, building equity upon it. When you got money in your pocket. And for a lot of us that are credit investors, you may have 10, 20, 50, several hundred thousand dollars of liquidity just sitting right there.

So that’s what we’re trying to do here. When our money is off the table, just as liquidity, we want it to grow at this tax-free rate here. So when people are. What you want to be doing is you want to put your money in your cash value policy. So it’s making returns off the table, but then raise redeploy it onto there too.

Like again, we said other applications and this is where we look to a lot of you guys. If you guys want to, anybody’s got any good ideas, you can type it into a question and answer box. Some things that we’ve used are, 5 29 plans in which are the education savings Coverdells in lieu of that.

Throwing your money into an infinite banking policy, not necessarily under your kid’s name. And we’ll get more into that. People think it’s a good idea to do that type of stuff, which is a good idea, but it’s such a small policy. It’s not even going to move the needle. If you put it in your kids, have them buy it.

Using the own cash to take a policy, to keep the debt there. You just had a hot seat in our mastermind where one of the members is using this to fund their IBC, but then to fund their other defy other crypto staking dividend in bed.

And then this is essentially what I use as my, what I call my opportunity fund, which you guys can click on this article here to read more about that. But basically what the opportunity fund is, like you, you’re going into syndication deals and let’s just say the minimums are $50,000. Most guys here might have a hundred, $150,000 in liquidity stuff, in the parochial mattress or, the checking account half in your wife’s checking account.

But, maybe a deal comes up. Cool. You have that. But what if another deal comes up and you may or may not have that readily available, but that’s what this infinite banking policy is. So you have dry powder around in case you lose your job in case there is the opportunity for a better deal coming in.

Yeah.

Another guy here is they do that. The stock investing infinity banking is a big, what they call it, where they go into dividend stocks, another great example of things that will, people will use these policies in combo with. Yeah. And for me personally, a little 5 29. So I’m using it instead of a 5 29, along with it long-term care.

I’m not saying that’s the best solution, but I just liked the flexibility of the five to nines also long-term care, you’re locked in for the use of those funds for those specific. Types of expenses putting in the policies, the cash value girls I’m most than I’m able to use that cash value for anything.

It could be for college expenses for my children or long-term care in the future. But for me personally that’s kind of other applications, just the freedom to use the cash value. Holly, please. Yeah. And another reason I don’t like that 5 29 plan. Yeah. You’re stuck within those garbage options, just like a 401k, right?

Like you’re just stuck with all those mutual funds, high expense ratio or high hidden expenses. And then a lot of those mutual funds have carried interests issues with those. And that’s the whole thing that kind of powers the way I’ve been investing for over a decade now is just getting off the retail stuff or the retail stuff is what builds these big buildings for these companies.

Pays high executive salaries. They try and make it all complicated to use you guys. But I think a lot of you guys have realized that it’s just, it’s not that hard to invest on your own and cut off all these middlemen. So this infinite banking policy set up is exactly what you guys need to have you the choices of what you guys want to do with your money instead.

Common Misconceptions

The next section, common miss conceptions. So as I said, Dave Ramsey, a lot of people will say whole life insurance is a rip off. And I think this is the classic example. Where in your long loss high school classmate, or your buddy from college. The last time you saw him, you guys were drinking beers into the wee hours in the morning, five, 10, maybe even 20 years later, you have a chance meeting with this person.

They call you up out of the blue they’re working for a financial planning company and they pitch you on this idea of getting a whole life insurance or any kind of insurance product. You trust them, right? And they bamboozle you it’s a doing the policy, but they set it up the wrong way and very different from what we’re talking about here today.

So it’s all depends on how you design this thing. And I explained things differently. Tyler’s going to explain it a little bit differently, but it, and I think it took me personally, like three or four times, the people explaining it to get different ways to find it. How, you know how this is this different.

I knew that the wealthy did this, but I didn’t know exactly how they did. Hopefully, some something we say here will resonate with one of you guys, but ultimately I thought, when you learn this types of alternative investing techniques, it’s always good to meet up with other people who are actually doing the same thing and kind of talk it out with them.

Yeah. And, traditional whole life is. Usually illiquid for a good portion of it. You don’t break even probably till 15 or 16 years. So it could be, it gets a bad rap along with even policies or the product within the same company. It’s really the design that, that makes it perform to meet your goals.

So a poorly designed one will cost you money and it, the product is insurance, which has an expense to it. Just like how car insurance. It’s a, it’s an expense. It’s not a, it’s not an asset, but it serves a purpose. There’s a lot of people out there and there are examples where insurance is designed poorly and that’s, fire to, to cause a lot of the, Ramsey to, to knock whole life.

Yeah. Again, going back to our personality types, this is where me, the venture, I realized what people were doing with this, how they used it, their large investing strategy. And then I realized that there was a lot of fees. I was paying for this stuff. So I asked Tyler, Hey man, can you look at this?

This is like years ago. And. Of course, it took them a lot longer than I thought. And then I guess I didn’t realize that this is there’s so much to this in the design standpoint. And I thought it was just a box off the shelf, but in reality, it’s you’re buying this thing that you can configure it multiple ways.

And there’s, to me there’s three big sliders, the way you can configure it. If you don’t hit all these sliders the right way, this is not the way that we’re doing it. So I don’t know. What is if there’s three different ways to do it, is it nine permutations and combinations? I guess there’s only one of those nine that work.

Do you want to explain this one? Todd? I think I took a stab at it, but it’s always good to hear it from a different angle too. Just the difference. Yeah. Whole life has a cash value component to it. It costs a lot more. The premiums are higher, but it is building some cash value term is exactly like that car insurance example, where it’s user lose.

So you’re paying a premium it’s has its purpose as far as, protecting or having a death benefit for very little premium. But there’s no cash value aspect to that. And the cash value part of the insurance product is what we’re using as the private vault or that savings account.

There are hybrid policies and we actually use one year term life blended with whole life. That’s to allow us to buy debt. The death benefit very cheaply for a low expense, but we cut it off after a certain time to, to cut the drag off of your policy and not have those expenses goal for the whole life.

So term-life is for a different visa and you get term life in case you die. So you can have your survivors get a chunk of it. That is the purpose of term life, whole life. Yes, it also does that, but to me, the way I am, I don’t want to spend money on something I’m not trying to do or something of the utility I’m not going to get for.

So I try and separate the two. When I ask people, what are you trying to do? The why? Why were you here today? We’re trying to use infinite banking to stuff, cash to invest in higher, invest, use things. We’re not here. I think all of us need some term-life, which we get a lot through our jobs.

To me, you separate the two of you get the product of what you’re trying to go after. And then this is just another example of my wife. So like somebody did take her out to lunch and she probably didn’t get a free lunch out of it, but she. Somebody, she knew set her up with one of these policies.

And when I came around, years later, I was like, why the heck did you do that? And she, she’s she said like I needed. I needed a big payout in case I died, so my parents wouldn’t be left with the condo and I got really upset and I was like, that doesn’t make any sense to me. Let’s stop and think about it. If you died. Your parents or your survivors would just sell your condo. It’s not like the bank’s going to come and take it away. Like that, there’s equity in there and even better. There’s no equity in there and you died and your negative equity, all, you can just walk away from that type of thing.

But, she got sold on this thing and most people aren’t aware of, these type of financial products. So the reason why the heck you’re getting it in the first place, for somebody like that, you’re single to me. I don’t think you really need it term life, but most people here are married and I would recommend some term life.

Maybe. I don’t know. What do you think Tyler, maybe like a million or 5 million for average people here, yeah, and it matters. It, because the, some of the policies, the way we’re designing it, it does have that term. So the death benefit is relatively high early on. There’s the traditional way of calculating how much insurance you need.

It’s your earning power for life, or looking at yourself as ATM machine. If you were to die. Your beneficiaries would lose that earning. So that’s the amount of death benefit you would need. And if you don’t have that cover, then I think that’s how I would, or, typical people calculate how much death benefit you need for the purposes of your beneficiaries.

But yeah, it’s I would say it’s very. On an individual basis. There’s not a one size fits all from my perspective, as far as how much or size of policies. Yeah. Everybody’s different and but you pay for what you get right guys, if you wanna, if you want a $10 million, that’s the payoff from term life, it’s going to cost you more.

There’s a lot better things to putting money to your insurance premiums, right? It’s no different than, over insuring your car, that type of stuff, where I think, whole life, the reason why there is a little bit of an insurance component, the way we do it is exactly to get those tax benefits, because there’s a minimum amount of life insurance you have to get when you do these things.

So we get that taxed. Good texture. And I think what most people will find when they grasp this, when it finally clicks, they grasp this infinite banking strategy. They’re going to load up on a boat load. When I first started to do this, I was like $50,000 a year for six years. Had built up at least a quarter million dollars of cash value in the policy over the years.

But, nowadays, I’m looking to, maybe five X that at the. And I think when Pete, this is what the wealthy do, they just load up on these policies when you’re loading it up with that large of a, cash value drop. Inherently, you’re going to have a lot of death payout so that you don’t really need term life.

I think if I died, might be like a $10 million payout. It’s life-changing and that’s another term I like to use a lot is what is life changing money to you guys? For a lot of people. And this is off topic a little bit, what kind of money do you watch your survivors to have?

I would think at least a million dollars cause million dollars is nothing really nothing these days, but maybe anywhere from two to $1,000, I think where most people stay. And when you get a normal size for life policy, most people in our group, a credit investors are usually building this thing up with 50 to a hundred thousand dollars a year.

When you get that large size of a policy, you’re going to have that. And what does it tie like one to two, one to $4 million debt pay for that kind of size of a policy. We have off the top of your head. I’m sorry. For what premium size. Let’s say a guy does a hundred thousand dollars a year for six years.

What is the death?

Or a 40 year old male would be probably about close to four mil, the death benefit for a hundred thousand dollars a year policy. Yeah. Yeah. That’s just one data point, but it’s pretty linear relationship.

They take this one. I think I talked about a little. Yeah, so whole life versus whole life. There’s, it’s set, it’s a contract for whole life. The fees are set. A lot of the terms of the policies are set. In there it does have potential greater returns, correlated to that, usually the S and P 500, and its index.

So a lot of times it matters. When your policy anniversary date is. So it goes from say October 2nd. So look at October 2nd, 2021, and then October 2nd, 2022. And the difference is the gain is what in the stock market and S and P would be what you would receive minus some fees. So it varies. It varies even person to person based on, if your anniversary date is October 2nd, someone else’s, when is October 15th, they may get a different return.

Even with it, even though it’s just two weeks apart because of how the index feature works. Along with that expenses can fluctuate and go up and it’s not set for your whole life. So yes, there are higher returns, but there is also higher risk that the expenses are, will grow also. And then, index a lot of the selling point also is that it, you can never lose money in the sense that you’ll never get a negative return.

However, the policy can lose value in the sense that expenses start eating away at that as well. But the index has a floor. So I say this S and P dropped 10%. This in your index, it usually has a floor of either two, 2% or 0%. Instead of that stock market, Chart where it drops. It’ll just stay level and then grow.

But it’s, there’s also a ceiling. So if the S and P went up 20%, you’re usually cap that like around eight, seven, 9%, and then you’d have to subtract maybe some of the fees. So it is a lot more attractive versus the dividend rates. Five and a half to 6%. Yeah, but like the dividend rates are higher, but you guys are missing the point, right?

The full point is you put the money in here as a short-term thing and in the it right back out and you invest it, which you don’t have that flexibility with the IUL. And, when is one more appropriate than the other. The whole life is to me the growth strategy, right? That up until you hit this point that I call it critical mass is this big chunk of money for some of you guys, it’s $2 million net worth for other people at somewhere between $10 million net worth.

You’re trying to accelerate up to grow up to that point and you’re going to need this infinite banking music, whole life to over-fund the policy. Take it right back out as a loan to put to your investments. Not until you’ve. This or gunner or getting well on the way to this freedom flying escape, velocity, zero G whatever you call it when to call it or what I call it, mark end game that’s to me, when you start to use these other IRLs and we’ll do another probably scrap cram school on this, in the future.

But most people here are still trying to grow their wealth, and that is what, why we choose the whole life. If you want a part of your portfolio, that’s very low risk, lower return, and you want to get it. Yeah, sure. You can do it. We can talk offline. You can talk to Tyler about doing one of these other things, like the whole thing about the whole life is like the cool thing is it’s there’s a little trick is like taking the money back out and investing it and overall.

No, you get a bigger return instead of just myopically, just looking at have a higher dividend than full life. Yes. If you look at it, my optically, you are correct. But the whole point here is taking, putting the money in the whole life or taking it right back out and putting it into a deal on the side.

We had a question here from Justin. Why not buy term? Invest the difference? No, you’re exactly right. If you don’t want to do any, but that’s for a different purpose, right? You’re trying to ensure yourself that a death payout, we’re not doing this, or at least I’m not doing this for death payout.

I’m not sitting on infinite bank and poly for death payout. It’s a store of cash that goes tax-free that I could invest it. But if you’re looking for, death payout, I would suggest appropriate amount of term life for that.

Yeah. And there’s some questions on here. We’ll get to them. Some of them were answering privately, but some of them there’s probably benefit answering it. As we discuss it on the, on those sections. W we’ll get to all the questions. Yeah. Again, if you guys went all four questions, so the very end, if, unless it’s really pertains to what we’re talking about.

So this isn’t, some people like to really understand the nitty gritty, Tyler explained like different places that you can go to different insurance companies. But, for those of you guys want to take a nap right now for the next five minutes. So as we go through this, like just use the top, like the top rated the best, I don’t know how they rate them.

Like credit-based or yeah. The Moody’s or whatever, the top rated insurance companies, because they have the best balance sheets, simple, passive cashflow. This one’s specifically about the stock insurance companies versus mutual. The biggest differences as for the policies that we write are with mutual insurance companies, the difference differences that mutual insurance companies, as a policy holder, you are.

Part owner of that company. There’s no shareholders, it’s only policy holders with a stock insurance company, there’s, it’s owned by stock holders. So the company itself has, two interests that they have to appeal to the policy holders along with stockholders. That’s where it gets a little more hazy, maybe not as transparent.

There is a question on here about the dividends being paid are because you’re overpaying. Premiums. And that is partly true, right? But you’re overpaying the premiums because these companies are, they have to have a reserve, they have to pay out death benefits. The dividends are basically the company’s profits, that they have.

And some of that is overpayment of premiums. Also it’s their investments and, other things, policy loan interests. But as the mutual, as the policy holder and mutual company, you’d benefit from those dividends, it’s almost no different than if I was a stock holder in Costco or in Costco.

And you’re overpaying for that, toilet paper. And the dividends you get will be the profit. So it’s for that company. And part of that company’s profits would be you overpaying for that product, or their, their profits. So it does sound like, yeah you’re just getting your money back, but it’s no different than, pain or profit product, any other product that you buy from another company?

Yeah. And the insurance companies will use are probably a hurdle for them a lot, because they’ve been around since the beginning of time, guardian and, what is the, not the good there’s two mutuals, right? One of them is if we try Northwest mutual, we try and stay away from because they just don’t, you can’t do this kind of strategy as effectively, to be the four large.

No proven mutual insurance companies are New York life, Northwestern, mass mutual, and, guardian and, Penn is coming up there. However, th their track record and may not be as strong. But yeah and the dividends for a lot of those companies, guardian, especially as they’re in pain for over 150, that’s true.

The great depression through the wars, through stock market corrections, all of that. They still continue to pay dividends consistently. Yeah. And that’s, that’s the, we talked about that earlier, right? You don’t want to just go to somewhere else. Life insurance company that, oh, I hate, I don’t have to do a physical on this one.

It’s that doesn’t sound good to me. If I’m a policy holder and I got all these other brands on people in here that haven’t done physicals right to me, I would do it. You go to one of the top companies because they have the best balance sheet, best track record. I think I’ve got, I got a policy too, with the Veritas there, the way we do it, we’re ubiquitous. So you just go to the better, we just pick the best one for the individual person and even, and this is where I didn’t realize, I just told Tyler, Hey, go get me one from this guy. But even within each individual company, they have different products.

And then this is where I realized, whoa, You need to study this all the time, Tyler, like this will be your thing, like every company’s individual products change and cycle through. Any insight on that one, Tyler? Yeah, and the, there is, this big law change had happened early or late last calendar year that has to be in effect this year.

So that’s a great example of all these new products are coming out. And how you design it is changing. Some of the performances are changing and it is a full-time job of watching and catching up on things. And. Changing it and you can tweak it. And also within a product that’s good for someone may not be good for another one.

There, there is all within the companies, a little bit different quirks of flexibility, whether it’s a funding amount per year or the funding duration, their online portals or how they, the use of the portals and access to the funds and the ease of that, that there’s. There’s some facts fluctuations company to company.

It definitely isn’t a one size fits. All right. And just case in point with that like I think with guardian, they have this component where right now this point in time, this probably will change in the future who knows. For people like entrepreneurs, right? You guys have very fluctuations in your income levels.

Some years you might make a ton some years you might be a bearish year for you. That’s what I, as a small business owner, guardian has this little like kind of component where you don’t have to make your payments every single year. There’s a little bit of a flexibility there and that’s why.

When you guys book your onboarding calls with Tyler. That’s why it takes so long. That’s why it’s a long chat. It’s not just a quick 15 minute thing. We want to understand your guys’ story to cause we know what the policies are or the options of each company, we want to make sure it’s tailored just for you instead of just stuffing you in a Penn mutual one, because that’s the only one where licensing we’ve got.

We do we look at the whole. A bunch of companies and within each of those companies, different products and, that’s something I’ve learned after a while. Like these insurance products, once you get the right ones are come on and use it after that point. It’s just, how much do your sales guy wants to charge you in commissions?

It’s no different than, getting a home. Right where your lender just charges you X amount of origination fees, investor profit. And some guys will charge you a lot for some strange reason. Some guys will charge you less. What we try and do here is we try and bury the commissions as low as we can to make it more advantageous for you guys, because you guys aren’t getting very, you guys aren’t getting these ticky-tacky.

Five 10, $20,000 a year in thinking policies. Most of you guys are getting, 50, a hundred thousand, maybe quarter of a million every year, this stuff. So we want you guys to come back and, as your life changes, your situation changes and the products change. That’s, we’d like to know who you guys are, but there’s a, there’s a reason behind it.

After all Tyler and I are both engineers. We’re not the most, like they don’t really like the chitchat too much. I want to get it get the best policy for you guys and get out. But, we need to get to know you guys a little bit to fit you in with the right.

I’ll take it. So yeah, this is all fin. A popular question about, Hey, I should I pull a policy on my child? Purely for the IBC purposes? My normal recommendation is you want to maximize. The policies on yourself. So there’s limits because it is insurance product. You can, if there’s a limit based on your earning, your annual earning along with your age.

So that’s a mom, there’s a calculation. If you’re in your thirties, that limit of death benefit may be about 30 times that your annual income. As you get older, goes on to 25 times and maybe when you’re 50 or so it might be as little as 20 times. And then 16, like 10 times. So that’s usually the total amount of death benefit one can have across all policies companies.

So I would say at first, as a parent, you’d want to maximize your ability to. To buy insurance on yourself. The reason for that is you have earning power. The premiums would be a lot less or more beneficial that you can maximize your cash dump or the POA portion of it would a child, not especially a minor child, not having an earned income.

The amount of death benefit you can get on a child is limited to basically 50% of the parent’s death benefit. So the parent needs to have a policy in place first in order to buy by death benefit on a child. And then based on that limited amount of death benefit, because they’re soil young, the premium will be actually very cheap, which sounds good.

However, you’re not able to max fund it. So it’ll be, instead of being able to stuff in 50 or a hundred thousand a year, you’re probably limited to maybe 7,000 a year. And so it’s not, you’re not able to really grow your cash value. As fast as a policy on yourself, pause a child on top policy in a child does have its benefits in other ways, but purely for the IBC portion.

It’s not as efficient as having a policy on a working adult. We liked the creative thinking guys. This is what’s fun about this stuff that you guys different ways to use it. But yeah, if you want the simple passive cashflow cliff note, No, you got a couple, most people do is they get it on the female, because they’re just a little bit cheaper.

I don’t know why. Maybe guys are a little bit more reckless. They tend to die quicker, they’re a little bit cheaper. If you ha and maybe just get it out of one of the two for now, and then when we fill up that policy, fill it up, maybe. Putting in $10 million at death payout or, stuff it with a million dollars, then you fill up the other person.

But every situation is different. That’s just like a, give you guys a real quick example to get it in your head for now. We had a good question here, mark, as we currently have a term life policies, since we have young kids, We only wanted this until our kids at 18. If you started to do of banking we need to cancel the term life policy.

So two different purposes here, right? You want the term life in case you guys kick the bucket, your kids have a nice chunk of money. I’m going with the example of let’s just say you’re you bought $2 million of term life because you want them to have a couple of million dollar drop. If you check the book.

Like Tyler said, if you’re getting, if you’re stuffing this whole life policy with 50, a hundred grand per year, you’re going to get that utility. So you could probably just drop your term life at that point. Yeah. And I’ll actually type it so you don’t need it. It’s not going to be required to cancel it.

It may make sense to. But just keep in mind that, there, the death benefit of your term will count against the total death benefit that you can get in overall insurance. So if that’s eliminating factor based on your earning power and it may make sense to cancel it. But it’s not, you don’t have to, mostly you guys will be loading up on larger policies anyways. You hit two birds with one stone already that you could probably just drop your term, that’s why we have the conversations, right? There’s, this is a little bit complicated. It’s multi-facet Tyler does this all day, so can you help you with that for that front?

Another question that comes up a lot and you guys can watch these videos later on for more details on this. I’m 40, 50 sixties. You’re 50 years old. It isn’t going to be more expensive for me. But if you remember from the start, like we’re not really configuring this for the death payout, I we’re minimizing that portion.

Therefore, the pricing is not really dictated too much on your age just as can be a little bit more expensive. But at the end of the day, it’s really combo on minor wash. Yeah. So the big, the biggest impact, what you would see if you’re doing it, if you’re a 60 year old versus a 30 year old would be the amount of death benefit advice.

But again, since we’re not, that is, we’re not focusing on the death benefit, the cash value portion. It will still perform relatively the same instead of maybe breaking that year at breaking, even at your, for a six-year-old may break. Even I hear five or maybe six matters on, some of the design, but the biggest impact too, is that you don’t have.

The long, the years past that too, for it to compound. So of course, when you look at a 30 year old at age 85, the cash value versus someone starting their policy at 60, and then looking at the cash value at their age, 85. It’ll be a lot smaller along with the death benefit, but the cash value will perform the same way.

So you know, there’s cases where, a seven year old can pull out a policy. Again, this is requires underwriting. So you need to meet some of the health requirements there, but that even, yeah. Then it can make sense for a seven-year-old to, to start pulling policies for the purposes of the cash value.

Does it matter which life insurance agent I work with this in the same company? That’s, this is where I would recommend going with a brokerage that’s licensed with multiple companies. So you’re just not just pigeonholed with black company because different companies have different, caveats and flexibilities.

It is stuff changes all the time. And I just if you’re going to a lending broker, you want a lending broker to be able to go to different banks to get a ball. I think the broker arrangement is just better in this world too. But ultimately it’s how much does that lending broker or that life insurance agent want to take the commissions?

We play around with the life insurance splits and we make it the lease it needs. Which is not the best for a commission that’s for sure. That’s her what’s what’s the client. And for, especially for this purpose, we’re trying to maximize that cash value in the policy.

So you guys can take that money and go invest it elsewhere.

Taxes

Taxes section. And this should be fun because this is where, we kind of skirt around taxes as one of the benefits to doing these types of policies. Of course, you shouldn’t be getting the legal or tax advice for many of us. This is all just for your infotainment to talk to other people and to learn the whole story, but.

But yeah. Like right now, the way things are set up in IRS land is when you have your money in these policies, the dividend rate, it doesn’t get texts and whether that’s right or wrong, that’s just how it is. Now. Back in the day, people would stuff a whole bunch of money in these policies because they would get that tax cheap.

That’s messed up, right guys. It’s smart. All of you probably would have done it, but the government got involved. I was like, wait a minute, guys, you guys can only stuff a certain about into these policies to get the tax treatment. They want to limit it. And I think that’s fair, right?

This reminds me very similarly of the real estate professional status, when that first thing came. Now all these doctors were getting this one stupid rental property and not able to use all their passive losses, the lower, their ordinary saving hundreds of thousands of dollars each today.

Now there’s the whole 2000 hours, 750 hour rule to get rep status. And similarly here, back in the day, again, you could stuff a whole bunch of money in here and have it grow. Tax-free government got involved. It puts some restrictions here, but. Tyler. Why don’t you explain like Mac, what does Mac, all these PUA, like what are all these terms that we’re going to be talking about?

Sure. For the, for this IRS meth limit. As I mentioned, back in the day, people are utilizing it as an investment. So then it got the IRS looked at it and said, you can’t stuffing. You can put a dollar for insurance. Dropping a million dollars in what you call PUA are paid up additions, which is really goes to boost up your cash value.

The limit, the IRS put on it’s a, it’s basically a three-way limit is based on. Your age and gender, and then that you, the policy needs still needs to look like it’s an insurance product. So it requires some sort of a death benefit, which then requires in order to get that death benefit, it requires some amount of premium payment for that death benefit.

So there is a correlation to that. If you exceed that amount, then it becomes a modified endowment contract and no longer is treated as an insurance product for tax purposes and gets treated more like a, an investment product. So you lose the tax benefits that the insurance companies have for that the way we’re playing around with this limit because we’re trying to draw down the premiums as low as possible, which also drives down the death benefit as low as possible.

But. We still want to be able to stuff in as much money as possible in that PUA or the paid-up additions portion. So we do need some level of death benefit in order to be able to keep it or keep paying him say a 50,000, but keeping your premium. At our lowest range of about 10% of the 50,000, so 5,000.

It’s really just a numbers game to, to maximize your target amount by keeping and keeping the expenses, the Lois, what Tyler just told you there don’t worry. If it went over her head, it took me. I just realized that until six months ago for assembly And, for the most part your agent keeps you in the, within the fairway for this stuff.

That’s where I learned more about the neck limit, things like that, the maximizing, that type of stuff. Yeah. And this IRS meth limit, it is something you do not you cannot ex you do not want to exceed it. There are times. Maybe in your policy life or for different purposes, people do a Mac because they want to just stuff, money in there.

And they’ll, there’ll be okay with the tax implications. But for the most part, this is something that you don’t want to mess with. The insurance companies know that, and they make it very difficult for you to mistakenly go over a Mac. There’s all these alarms. Questions asked if you’re paying too much and it here you’re about to make your policy.

Some people may hear a Mac or they may also hear a different term of seven-year pay. It’s really that limit is they’re looking at a seven-year window and it, the policy needs to be meet those requirements for seven years. So that’s why, we, you can’t really just put a lump sum right off the bat.

It won’t work in really looks at funding it for seven years. And that’s the terms you have to meet. Yeah. And not just funding it for seven years, they can be slightly flexible. So people stuff it in five to six years, some people will smooth it out over 10, 20 years. I personally prefer, shorter time commitments and leering, multiple policy on top of each other.

So you’ve got a five-year old. And then maybe you in a couple of years you do another five-year one she’s there at these things on topic two. This is the method that strategy, I think works best for me. And we’ll see you guys, but however you guys want to do it. That’s where I can help.

Yeah. And other taxable events would be so where w the way you’re accessing the cash is you’re really taking a policy loan. That’s how you’re keeping. You’re a funds tax-free there are other events that can cause you to have to pay taxes. So you already just canceled the policy and you just take out the cash.

You, if you withdraw all the funds also you’ll have to pay taxes. And then This is above and beyond your premium payments. So I’ll look at it as it’s behaves as a Roth to a certain point where other premium payments you’ll be able to take out. But beyond that, any of the gains you’d have to start paying capital gains.

If it’s math or if you withdraw that money. Yeah, we have about 20% of the participants who already have a policy and looking for some cool events tips. What I would say. Like you probably missed it, but of as Tyler said earlier in this chapter, there are some people on the mastermind really maximizing that contribution amount of two or over that NEC moment.

That’s some people we’ll do. We’ll also talk about like different places to get a third-party loan. That’s another little advanced trick. It’s not necessary. I think the whole point is just again, stuffing cash into this policy investing and elsewhere while you’re, while it’s tax-free, as we mentioned this chapter.

Yeah. And that bottom bullet is meaning, that the companies make it very hard for you to mistakenly maquette. They also, most of them give you a window to reverse it. They’ll just refund. Some of them won’t even allow you to pair online by mistakes or they’ll just automatically refund the money up to the max limit.

Dividends

Dividends. So there is a dividend rate that when your money is in here, it grows again, tax-free that portion. And then we’re going to be talking about different terms here. So it’s just like guaranteed rate. And this is where I honestly don’t really understand something. I’ll probably let Tyler explain also that type of stuff.

Yeah, sure. And the way we’re the most efficient way of designing, it would be having the dividends, basically be reinvested in pay and buy purchase more paid up insurance. That’s the way to keep it tax-free and then it also just keeps on compounding and growing. When you hear the dividend rates or you hear other companies announced their dividend rates, so say mass mutual 600.

Or guardian 5.6, 5%, that there is a guaranteed rate portion that is required by law, that insurance companies, keep, but this is a, everyone got to keep in mind that’s a gross rate. So it’s the 4% currently. And that’s the new law change that will. We’ll change starting in year 28, 22 of insurance company.

Now they don’t no longer need to guarantee that 4% rate, they can guarantee a range from either two to 3.7, 5%. So companies are coming out with new products, right? Anyway, there’s a guaranteed rate. And then when the company announces their dividend rate, that’s a surplus above and beyond. The guaranteed rate, but it’s not the, it’s not a surplus of 6% over the guarantee rate.

It’s the 4% guaranteed rate and then a 2% surplus to make the dividend rate of 6%. It’s, don’t get confused that you’re getting the 4% plus the dividend rate of 6%. It’s really 4%. Plus the 2%. Gross overall rate of 6% with that 2% portion being the dividend, which is being reinvested by more cash value, life insurance, and then the interest rate or the guaranteed rate is boosting up your cash value.

So what is like a common mistake? We’ll get into the, the policy illustrations, which is the big chart of all the confusing numbers. But what is like a common misperception of somebody will look at only the guaranteed rate that you see know most people take a look at this stuff for the first time.

Yeah. So so guaranteed rate, it’s nice because it gives you an idea of the expenses that our company has, but w everyone I’ll keep in mind that, the insurance companies haven’t been really operating and only that guaranteed. That’s if they’re basically their dividends are zero.

But most of the strong insurance companies have been paying dividends consistently for the, for over a hundred years. So although that guaranteed rate is something nice. And as I like to look at that, they’re really guarantee the dividends won are not guaranteed, but it. It’s very likely that, dividends will continue even in this low interest rate environment, but it’s that’s one of the biggest.

Confusions. If you’re only looking at the guaranteed rate, the policy will pretty much outperform that’s just the guaranteed rate. The other misnomer is that one company made be seen 6% and other company maybe saying 6% what you actually get, maybe different because what’s embedded in the guaranteed.

Is the company’s expenses, which is consists of the mortality charges administrative charges the cost of insurance. So what you’re really netting or what you’re seeing as IRR is probably somewhere between two and a half to one and a half percent less than what the actual dividend rate is.

So the net or the IRR, maybe more the 4% or so. Three and a half percent in some cases. So similarly, it’s like in one of our deals, say we’re projecting 80% return in five years. But then, a mistake would be an investor, be like I got this other deal. They’re saying I’m getting 120% in five years.

I’m like none of this is guaranteed. Let’s just see what actually really happens. And I think some of the. Reputable insurance companies, they sandbag their numbers a little bit to exceed expectations where some of the other companies, they might show a higher guaranteed. So on paper, somebody just straight looking at the guaranteed rates, you’re just not comparing things, very smartly in my opinion, you’re just going off of that guaranteed rate and the way I read into the whole no government. Mandate change where they have to, where they’re allowed to show a lower guaranteed rate. I don’t think it’s anything now, but it’s just opens the door in the future. As interest rates start to Coco lower or lower yields are lower or to meet the insurance companies.

They don’t need to offer the large, the higher rates. If the interest rate with the yield rate is not very higher or the cap rates, as well as we’re talking about is that’s what drives fields. And I like to use the guaranteed rate projections to compare company to company. So that’s good.

What’s going to make it a lot harder. Is that starting in 2022, the guaranteed rate it’ll vary company to company. So up until now, all companies have to have 4%. So when you’re comparing different companies and different illustrations, It was almost comparing apples to apples. If you do the guaranteed rate next to each other in the future, one company could have their guaranteed rate as low as 2%.

Another one would have it at 3%. You’re not, you’re no longer able to compare the two and see what their company expenses are, for that company. So it’ll make it a little bit more, black box again. Yeah. We can’t really see, the true company expenses that way. Yeah. And I think a lot of that is just more, I don’t think it’s needed to know by bolster.

I don’t honestly don’t know. I don’t care. I just, I don’t really examine the roots of this stuff. Of course you guys are doing this cram school to learn it, but a lot of this stuff we’re talking about, but he doesn’t pertain. It doesn’t really matter to, the kind of the average user of this type of stuff.

Don’t really care what the guaranteed rate. Again, I’m not doing this stuff for returns people. I’m just putting an anchor to store money so I can go to invest elsewhere.

Yeah. And the varies by company accompany that’s the biggest part. That is the part, even as an agent with a company that’s proprietary, we don’t really see. Calculations there at all. And yeah, and the biggest thing here to take away is, the dividend rate alone, doesn’t it varies.

So it doesn’t you, you relate it like the actual performance based on the advertised dividend rate. Yeah, correct me if I’m wrong though. Tell her, but if I were looking at these pauses and comparing. If you really want to do that, that’s why you go with a broker that helps you pick the right one based on the different products.

They’re not just pigeonholed into one selling you one from one company, but it’s not really the dividend rate. You’re really comparing. It’s like just the fees and the breakeven point is really, that is the big analysis comparing. Yeah.

We talked about this earlier, going from different. Insurance company ownership, structures, large companies, small companies, when you work with a broker, they pick the best one for you. Based on the most longest track record of companies. Again, the takeaway here is just be careful, these kind of rote insurance companies that have very loose underwriting standards.

Probably not the best ones to be getting into. Yeah. Yeah. And when they’re comparing those sizes it’s mainly, the assets under management, Similarly with, investment firms that the larger, the number of assets under management, the less risky they’ll have to be in a lot of their investments to get, steady returns.

A lot of other things that some small companies are doing to get business is to have a simplified underwriting process. And that just puts, the risks back on. The company or the policy holders. Underwriting sometimes sucks, but I always tell people that’s, what’s protecting the company along with, your policies is screening so that they’re not, issuing these policies that that shouldn’t be issued and then unable to make the deaths that payouts down the road.

Yeah, you don’t want to go with the company that that just gives everybody the same price, whether they’re a smoker or not, and it doesn’t check that type of stuff.

All right. So I can take this. So this is that big Irish law change. 7, 7 0 2. That’s the tax code. So this is the biggest impact here is. The guarantees companies no longer have to do the 4%. So we’re starting to see some products come out. All companies are mandated to have their new products, out by the end of this calendar year.

So guardian and some other companies have started kicking out some of these newer products. That reduction of the guaranteed rate has not allowed companies to be a little bit more flexible. What basically what we’re seeing is that with the larger guarantee or the smaller, the guarantee rate, the less death benefit you need for that same amount of, targeted the targeted amount.

One way to look at it is that. Like lanes, privet example, the a hundred thousand or by $4 million worth of death benefit. Now you may be seeing that a hundred thousand for that same age person. Now only needing $300 or three, $3 million of death benefit in our case. It’s good in the sense that you need less death benefit to still be able to stuff in a desired amount of money that’s benefit then, because it’s lower also comes with lower premium costs in the way where these ironing it.

People may hear the opposite. If it’s not IBC it’s because truly the premiums are higher for four. If you want that same death benefit, the premiums will be higher. But in our case, the premium, the premiums are dropping because we’re using less death benefit. The other impact is that some of the P wave costs are going up.

So we’re seeing. Less cash value upfront early, but you have longer growth at the end. So you’re giving up some of the liquidity upfront for the longterm returns can be good, but for a lot of the investors we like to have that early cash value upfront so that we can then go and redeploy it in things.

But And then at the last true big impact is that because you’re because the guaranteed rate is lower. The dividend rate it’s are still the same. So say for guardian the 5.6, 5% dividend rate, they just came out and announced that their guaranteed rate is 3%. So now when you look at the surplus, the true dividend now becomes.

2.6, 5% versus 1.65. So the dividend treatment, it will be, the policies will be a lot more sensitive to dividend fluctuations, good or bad. So if dividends go up, the policy growth will be greater than the old product because it’s. The way it’s crediting you the cash value, but the, also the opposite is also true.

So if dividends may go lower and it’ll impact the performance, greater than how the current products are right now. The companies are still rolling out all of their products or it’s still being evaluated, but that’s the early on evaluation, especially with the guard guardian products.

They came out basically a week and a half or two weeks ago. So everyone’s still deciphering or the impacts for that. The takeaway here, guys. This stuff isn’t getting any better. The best time to buy her rental property was yesterday or 30 years ago. And the best time to get one of these life insurance policy was yesterday.

Sure. Things, think the way things typically move you’re talking about taxes and laws is that it fluctuates a little bit, but overall, if you want to call these holes or these tactics, they get less and less effective. The later on yard to jumping on the bandwagon. Another unrelated thing that I’m personally looking at is Biden’s like possibly looking to close the loop on a lot of these dynasty trust, where you get know you get your assets out of your name now, so that when they create all these like high estate taxes, they get rid of that 11, $20 million.

And bring it way lower. It’s going to impact most of us, very suit. Like to get money out of your personal needs is something I’m looking at right now. So it’s just another example. I don’t know if that’s the case, I’m just trying to, not trying to figure everybody out, but it was just another case for a lot of these things that this life insurance stuff included is, the getting’s good now.

And it’s always going to be decaying over time. This is why you need a network of other kind of financial hackers to know when, maybe it things get really good at a certain year case in point, bonus depreciation kind of came in 2018 and it’s going to be going away a few years.

Starting after year 20, 22, who knows if it’s going to come back, it probably will in the next few decades, but you need to be in a community with other people to know when at that point is when that best practice store opens.

And then just a little bit of context okay what are these guys? What is insurance company people doing with them? They’re going out and buying class a assets in primary markets. They’re investing force, very capital preservation. We’ve bought some of our apartments from insurance companies.

They’re not the best operators, which is why sometimes we can get a good price. So these types of guys, but they don’t care because all they’re trying to do is make a small yield with the least amount of headache and now, but yeah, that’s what these guys invest in. Probably the most, probably way more stable than banks, I would argue.

Oh, in kind of the scene is, they’ve been paying out for many doubters since the civil war.

Yeah. The comment about the banks for sure is because. Unlike banks where they have the fractional reserve insurance companies are not allowed to, by law to do any fractional reserves. So they need to have on the books for the death benefit, payout. Yeah.

Policy Design

All right, this next section, policy design, check out these videos here, this is where you work with your broker to create the, how much do you want to be putting in? That’s probably the biggest thing you want to decide, 20, if you want to start off small it’s $20,000 a year, I would.

You can go to. Very small, but to me, it’s not worth the hassle. It’s like not more than 10 grand per year in my opinion. But if you guys really want to start out small, you could, you, you can’t do much at $10,000 as cash value in your policy. Most people doing this stuff is like 50, a hundred thousand dollars plus four or five or six years.

That way, after a few years you have a hundred, $200,000 of dry powder there to invent. Do what you want, the way we are. These ironing know it is to stay within the tax limits, along with the company has some limits, but it is designed mainly for maximum cash value. Another appeal, especially for investors is the flexibility.

So maximum cash value, not. And that’s early cash value so that we can redeploy it, not giving up the long-term growth so that you’re giving up some of that long-term growth for the earlier cash value. But then you’re also introducing a lot of flexibility for the, what ifs. What, if you don’t have enough to make the premium year two or three or, and so that flexibility component is often overlooked.

And that’s what over talking about earlier, just for example, like guardian has a great flexibility for business entrepreneurs or, I you don’t need to be a business opportunities, but that was like the profile that we pick, or you have, you could make your payments for that year, but totally, we skip out on your next year and still keep the policy rolling and still have the ability to fund it as you first intended to.

Yeah, this is, we’re going to talk about premium splits, and this is a way of kind of understanding how does your, how does the insurance company and broker make their commissions? And this is how to understand how to drive down those commissions. So ultimately most of your money goes to your, either your cash value or to the minimal model.

Death or life insurance that you, yeah. So when w when you hear us saying, someone’s putting in 50,000 or a hundred thousand, that’s really this total, what I would call premium. So in this case, a thousand, that premium split, there is a lot of flexibility in how you design it, that, but there is a company limits.

But in this case, and this first one, you paint a thousand. The 50, 50, pretty much it would be 500 goes to the base premium, which is the cost of the policy cost of insurance. And then the other 50 is being used for paid up additions. Some companies allow that paid up additions to be flexible throughout the year.

Some other companies may require you to put it on your policy anniversary date, all at once. So this is a example of a 50, 50 premium premiums. As Leanne was mentioning the biggest cost or the expense that you see is in the commissions. And that’s at year one, commission commissions are based off of the base premium.

So in the second example, this is one of the, the most streamlined. We can do it drive down the costs of the actual policies at $1,000. Now you’re only paying a hundred dollars, the death benefit and the rest 990% of it will be going to paid up additions, which is really going to your cash value.

So this is the one of the extreme ways. This is personally my go-to way of designing it. Purely because what’s due every year is to keep the policy alive is really just the base premium. So a hundred dollars, this $900 is really the way we design it is optional, and flexible. So if things happen, you’re only really committing to 10% of your target amount.

So there’s this $1,000 premium is what we call your target amount. And you’re what’s, you’re committing to is 10%. So a hundred dollars. So in that a hundred thousand dollar example, that, that may say some a lot, but you are really committed to 10,000 and you have the flexibility to put in the 90,000 as capital as you get capital.

Yeah. So this is the secret sauce folks. This is what, like the guy who spindled my wife. Getting their life insurance, the whole life, right? They load up on the death benefit. We don’t want this because that’s where a lot of the commissions are bracket paying for insurance of this space premium part.

Now you can call Tyler dumb for cause that’s how he makes his money. Like he’s minimizing, we’re, we believe in doing what’s best for the clients. And for you guys weren’t fester. And we know you guys will probably put probably 20, 30 times more than the school teacher and it’s this example.

So yeah, but, and it makes more sense for you guys to put the, keep your cash value, not paying commissions and expenses. I put it into here. In some cases, some of the family office folks and myself, I have it. Action. Skewed more towards an 80 20 split because it allows me to overfunded even after the first initial, six, seven years that I had set it up.

Sometimes that flexibility is, so you don’t have to go through the hassle of going through another underwriting process at five to seven years. I think that’s where you talked to Tyler. What makes more sense for you guys? But our kind of default is just lower the commissions for you guys so that you guys come back and that’s how we keep this under the umbrella of, we do pipeline club.

At the end of the days, the happier you guys are, the more you guys send for referrals. If you guys, I think most people’s thus far. They’ve been more than happy. Tyler is always willing to open up his personal portfolio to like him not, not only how to do the policies, more holistically how he uses it is his investment.

And he doesn’t really need much these days he’s financially free. So it’s these angels are his, these wings are hit. It’s not all about commissions for us. It’s more about I hate to say it helping people, but it seems so, so slightly when I say it, but you guys come up with bigger policies too and helping your friends and at the end of the day, this is what helps you guys jump into more and more deals, right?

Yeah. And going back up. So the traditional whole life would really be a hundred. Percent premium, very little going to cash value. So that’s where, breaking even you’re 16 or so. And that’s where it can get a bad rap, because what you’re doing is you’re trying to buy as much death benefit that premium can buy.

Traditional ways of designing, it would be a hundred percent premium, 0% Tuas so where we’re extremely opposite of that, but yeah. And th the biggest, I think the takeaway is that is, it is we’re not set on the 10 90 split. You’re able to tweak it to meet people’s goals. And some people may have different goals of funding it longer.

But there’s ways of kind of tweaking some of that also, and still maintaining a 10 90. So it really is just a personalized design. This is just a generic statement of hallway, how we’re doing it.

Different ways to increase the cash values. So one of one of those ways, and this is why when I get to know what your guys’ personal situations are based on your birthday and based on some of the policies, not all companies can do it. Like the one I did it my first year I did 50,000, but I was able to fund $50,000 the first couple of months because of where my birthday fell on the calendar year.

So that was a little nuance.

I’ll take the first. So this is this way. I think it was very appropriate, at least for a lot of the people on the call who are investors and are seeing that the one way. It was explained to me that was my aha. So someone had mentioned relating it to to to a home purchase. So in the above example, the premium payments that are related to your mortgage payments for a house, you that there is, it’s an expense.

It slowly is paying down your principal. So your cash value in that sense is your equity is growing slowly. And then for your house, you’re able to boost up the value by doing or putting in some capital and doing a renovation. So say you do a kitchen renovation, 20,000, it boosts up your house value to 20,000 or hopefully maybe 40,000.

And then you go in and refine you. You take out because of that boosted of value now. With the paid-up addition on that renovation or the renovation you see the immediate boost in cash value or equity of your home, and then you’re accessing that cash value via Sheila. It’s very similar to a life insurance policy where you’re paying the base premiums.

It’s there. You’re. Painting your super funding it with these paid up additions and you’re accessing the cash value via policy loan.

But some of you guys have done this strategy where you get a HELOC to pay down your mortgage with simple interest for amateurize insurance, which works. I’ve always argued against it. It’s better just to take that money and go grow your money four or five times as fast in vestments and to pay down your mortgage.

But it kinda opt this whole strategy kind of operates in the same mindset. If you guys are familiar, how that works. If you guys wanna go look at that webinars as civil, passive cashflow.com/sheila, again, I don’t remember giving them that strategy, but it helps you understand how this was all. Yes.

Yeah, so the reduced, paid up. And that might be yeah, so reduce paid up. So a lot of our designs, we do what you call a reduced, paid up. This is an optional where we’re basically cutting the requirement to pay any more premiums. So when we’re saying we’re going to fund it for seven years, After seven years, we do a reduced, paid up what’s happening is the it’s taking the cash value, currently in your policy and is buying a single premium, paid up whole life policy where no other premiums are due.

From there on forward. It’s good in that sense that, expenses are cut, but it limits how much you can contribute. And really you’re not, at that point, you won’t be contributing anymore. The policy then will continue to compound and grow and you’ll still have access to it, but not nothing is due after that.

This reduced paid up. Is available for all companies and it can’t be done or earlier than eight years. So if we’re, if you have a funding target period for five years, you’re still having to pay some of those premiums up through year seven, and then we can do a reduced paid up. And you could, you, you could push it out to 10 or 15 years as a reduced, paid up the products we use for whole life.

Usually the premiums that traditional. Model is that you’re paying till age 99 or age 95, some of them, to age one 20, but with the reduced paid up, you’re able to stop those expenses early on. Yeah. I love it. This will naturally happen when you gonna get on the phone with Tyler and you guys figure out what you guys are trying to do.

And I personally liked the idea of layering, these five to seven-year policies on top of each other. To eventually get to that magic number you’re trying to hit of cash value and that magic number of cash value might be anywhere from a quarter of a million. For some of you guys, some of you guys might want a million dollars of cash value in there to me after a while, it becomes a little bit of, law of diminishing returns.

Really what do you need? $2 million of cash value lying around at that point in the game. And I think that’s where you’re going more into the end game strategy. Where the IUL and those types of products which you know, can help with. But, again, like most of the people here, we’re still trying to grow our networks from one to $10 million.

This is how we’re going to get there. And, I always use the idea of the bucket approach. You focus all your time and energy on doing one thing first. Then when that overflows, it goes and fills up the other buckets. That might mean for some of the younger guys. Don’t do infinite banking this stuff.

If your net worth is under footer Miller, this stuff isn’t for you guys, you can do it. People will sell it to you all day long. They’ll be glad to take your commission, but in my personal opinion, take your guys’ money and go buy a rental property, get your net worth up to something, half quarter of a million dollars first or half a million dollars.

That’s the first bucket, but for a lot of people on the call today, your guys’ net worth is over a million dollars. You have some side, but we D that’s where we. It’s funny, these infinite banking policies, we fill this bucket up. Maybe you have a quarter million to half to a million dollars of cash value built up or ability to fund it up to that much.

And then you go onto the other thing. But most of us are trying to fill up that middle bucket. This point again. It’s different. There’s different ways of doing this types of stuff, but that’s how I’ll, a lot of the folks in our mastermind group are thinking about it at this point.

Yeah. And the scheduled versus unscheduled Pele’s that’s that that mainly is to touch on the flexibility. So the previous example where, if we’re doing 5,000 or 50,005,000, is do that additional 45,000 can we can design it where it could be flipped. And it’s not, you can.

Put that into your policy at will throughout the year that also can carry over to the next year if it’s within your targeted fund funding period. The main takeaway with the schedule unscheduled is just the flexibility that we can design into the policy. And then finally the underwriting process.

I’m going to try and simplify this for sake of time. So you go through the onboarding call, you work with your broker to figure out what is the size when we use the carrier. A couple other components that we mentioned here. I think the way we explain it here, when you first make your policy or, your first invest, like you may not know everything, but it doesn’t, it’s not totally needed.

The biggest thing is how much fees they’re going to pay. And we try and drive that down to the bare minimum that you guys pay when you’re under our umbrella. After that, it’s just a matter of going and getting underwritten, which is a physical process. For me, a nurse comes to the house. They might draw blood, they might get a piece of paper.

Ask you some questions. Are you a smoker? Do you ride motorcycles? Do you skydive answer them truthfully, but don’t be a bone half on it. But is that pretty much. Maybe how long does the process take? So the process, that ranges, I’ve, we’ve, I’ll just say to two weeks to eight weeks, anywhere between that.

And a lot of that is dependent on the medical side of it, whether they’re able to obtain your medical records from your primary care. In a timely fashion or in a recent case now the actual exam is backed up because they’re in the state of Washington and there’s this huge backlog there.

But that’s that they’re trying to verify income again, income verification up to a certain point. And I S I would say, below the death benefit of 10 million Documentation is needed. If it makes sense based on your occupation and your need for that size death and that of 10 million, that’s usually around you’re stuffing this thing with $250,000 per year, which I would say maybe a handful of you guys would be getting on the call, but most of you guys will be starting off anywhere from 50 to a hundred thousand dollars per year.

I always say just do it early, right? The quicker you learn and get the hang of this stuff the quicker. Get your next policy and then right-size into your next one. That’s what I personally did. I did $50,000 for six years for a few years, and then I got the hang of it and I was like, oh, this is cool.

This is cool. How I’ve using this. Then I got the larger one on top of that.

Policy Loans

Paula C long. Once you’ve got your policy, I’ll set up, you funded it maybe through an 50, a hundred thousand dollars and want to take the policy loan to you can go throw that money into a syndication deal or go and spend it. However you’d like. You just, for a lot of times you can either just call up the insurance company.

On call Tyler or some of you guys don’t want to talk to people. A lot of times you can just go on the internet portal and make that direct deposit right to your banker.

Yeah. And so what internally is happening is, and it can vary from company to company. Some companies you’ll see a decrease in your cash value. Other companies or cash value stays the same what’s happening truly in the policy is nothing. Really being taken out of your policy itself, it’s more that your death benefit is collateralized.

So the insurance companies are able to give you a policy without any additional on their writing, because they already did the underwriting. They know that you have this death benefit. They’ll only give you so much. And then at some point, we all will die and the loan will be made whole on the death benefit if we don’t pay it.

So that’s really, what’s happening with the loan? There’s no terms set for the loan. No, that’s where you’re in complete control. Okay. You should be prefacing, good financial, you should have good financial discipline of, pain, back pain, the interests, those that servicing not causing it to implode in that sense, by just continually pulling out the loan and letting the interest grow.

But it’s extremely hard to have it implode or cannibalize itself. You mean the, you guys are taking, it’s the thing of it like a healer guys. They like, in some cases on the key locks, your bank wants you to make annual or monthly payments back to you make sure you’re still alive. The same thing here with the insurance companies.

And a lot of this is just mindset. Some investors, they get really nervous when they have to pay back their HELOC or in this case, their loans, their cash value. But, you remember you paying it back to yourself in a way, and at very low rates, and if you’re smart, you finagle this as a business expense and therefore you can also, if you’re smart, you can get the deduction for it too.

So if you’re borrowing something. 6% or 5%. If you’re deducting those interest costs really you’re effectively borrowing at say 4% and that’s the key to this whole thing, right? Cause we’re making money. Tax-free 5% that is actually tax free. So you could argue that it’s 6%, but you’re borrowing their same amount of money through your cash value at maybe 5% were escaped.

But then it’s tax deductible. So it’s really like 4%. So you take the Delta six minus 4% in this crude example. And that’s the spread. That’s the little loophole here, guys. That’s and it’s nothing game changing, but the whole kind of the point is like, this is a nice little trick to augmenting returns, just a little.

And yeah, there matters. What company are you using? Some of them provide fixed loan, interest rates. Some of them are variable. Some people are wary about the variable, but again, the, almost all insurance companies the variable interest loan interest rate is based off the Modi AAA corporate bond.

In the extended, that historically has been fairly low, I think in the 2%. But companies also have a floor on how low their loan interest rates will be. So in most cases they’re at that floor. They’ve been at that floor for awhile. Probably will remain there for a while going forward.

Some loans get treated. People may hear. The raft versus non-direct recognition. Direct means that the company is recognizing that the loan is taken out and then they’ll treat the funds on that loan differently. Could be less, or it could be more, it could be better advantageous to taken out a loan.

You’ll see a decrease in the returns for non-direct recognition. It really looks it visible to the company that whether you have that money out or not, they’ll treat those funds the same way. It’ll just receive the same dividends. Like it never was taken out. There’s some chatter that, one is better than the other.

It really matters of terms. So that for like guardian it’s a non-direct recognition. But what happens with the funds that are loaned, they actually receive a better dividend rate, a slightly boosted dividend rate. So in this case, if you were to compare them, policy side-by-side if one was to not take a loan out and one was to take a loan out at the end of the day.

Yes, you have to pay that servicing, but the cash value in the loan policy will be actually higher because of the slightly boosted up dividends. Some of this is changing some of the rates with the, with those 7,702 products coming out. So you’re seeing slightly lower interests. Slightly lower floors which is overall better for the consumer in that sense.

Yeah. And I’ll be honest guys from my policies that I have. I don’t know how mines are in terms of direct versus non-direct, which I mean, to me, It is what it is. That’s not the, I don’t know, I think some, you got to be people on the call, right? People who like to know every little thing and they ultimately never do anything.

And those aren’t, unfortunately the people who finally gone to alternative asset investing in their forties and fifties to late, we can definitely get you as where you want it. In a decade, the people that jump on this quick, that kind of just eat, they understand the big things, just drive down the commission.

So I’m paying for the least amount of that as possible. And then they get moving. They jump into a 10 $50,000 policy in the first year and they fund that for several years. And then you start to learn about more of these nuances, right? No, that’s just my personal advice. It’s just get moving with one of these things.

Most of the family office clients that have already set this stuff up, they’ll say a lot of this doesn’t really matter what I mean. We just like to educate people. Maybe we educate people too much where it freezes a lot of people. And that’s the people that I advise at this point kind of self recognize who you are.

Yeah. We put this in just cause this is. This is a lot of getting a lot of attention also just in this low interest rate environment. lot of the insurance companies, their floor, Policy loan interest rates are higher. It’s like some of them are at 6%. Some are our 5%. And people are asking what a, why I can go out to a bank and get, 3%, three and a half percent, and create a better arbitrage.

There are better spread. There is the opportunity, bank there’s banks out there that you’ll basically collateralize your cash value or policy cash value. And the banks will be giving out loans at three. And I think some people are seeing like three and a quarter percent. 3%. There usually is some limit on a minimum of cash value you need in order to be able to do this.

And, I’ve heard historically it’s been a hundred thousand. I think they may be lowering that in some banks, but this is another option. Just be aware of though, you are giving up some of your. You’re a control. Of your policy at that point, the bank has some control of it. A lot of times you’re going to have to ask for permission to do certain things with your policy from their own for, but it is an option out there.

Personally I value the control more than the interest rate, but this is something out there that people are. Yeah, I think I’m on the same side as you. I think it’s just too much of a headache to save 1.5% to do this. I’m not too concerned with the control aspect, but nothing’s easier than just going to your life insurance website, putting in direct deposit and just sliding 50 quarter million dollars into your bank in a few days, it’s there to go through the extra step, but these are the summit.

The advent we’ll get this into the advanced topics. We’ve got like a list of different third party banks that will lend on these policies, if you really want to maximize stuff. And, three, a 1.5% on, several hundred thousand dollars policy. That’s serious money right there.

That’s more than what most people make per months. It might make sense. And that’s, I think when you start to build the relationship with Tyler, those are the things, the relationship goes on even after you make your policy, because those are the kind of the, the things that, that’s, what will we do to stay on the forefront of this stuff.

So you guys are optimizing the usage of this stuff, but you got to set it up first and best day to do it with yes.

And one more aspect of that, that collateralized loan is that, you’re probably have a set payment plan or some bank terms that you have to pay back. So you know, that’s also part of, it’s not only the control, sometimes it’s also the flexibility in that you’re here giving up some of that.

Yeah, and even in our mastermind group where, a lot of the guys are born. Fiscally advance, they’ll you’ll get hung up with the mindset of well, and I have to make another payment. If I take money out of my 401k, I have to pay taxes on it.

Yeah, let’s just set aside more money because at the end of the day, it’s like, what is, how is your net worth going? That’s the whole point? How soon can you take out a policy loan? Maybe a couple of weeks. It’s pretty much, we say it’s instant, but there is some administrative moving around times.

So if you’re trying to go into a deal and the next couple of weeks, maybe a plan ahead. Yes. But once the salt stuff is all set up, you should be able to get the money back out and maybe a couple of days as I’ve seen personally. Yeah. So there’s two parts I think to this question is once you make a.

Premium payment or a deposit. I like to say you have 10 days. So the cash value will grow. Basically probably to, the second day after you make that deposit, you’ll see in your portal, your cash value increase it also even say, available loans. Increase, but to be safe, we usually wait 10 days after that deposit in order to take out that loan because from a lot of the insurance companies, the funds don’t truly clear until that 10 day mark.

You’re able to take out a loan, but the con the insurance companies will require a lot more, documentation because they’re worried that it’s, people are laundering money or it’s fraud. So a lot of times you show on your bank account statement, that actual statement, not a screenshot that the F the money cleared your bank, which usually is you can do that within 10 days.

So I’ll just say 10 days after the posit is when. Funds are available and then how fast it shows up could be two to three business days. So to tell people is that when you go on the online portal, you request the loan and the second business that it, especially if it’s ACH, it’ll be in your account.

If it’s a check, which you can also request a check, it’s just slower. I would say, five business days or so the chat. In your mailbox. So it’s not instant, but it’s pretty quick in that sense, same thing with your payments, takes, one business. They actually do probably show up in your account.

So it’s liquid and almost just like doing online banking. Yeah. So the, the practical setup is maybe you have $25,000 in your checking, right? You always want to have very little money and liquidity and those types of no yield balances, but then a deal comes up.

You want to throw in a hundred grand, you take a loan from your cash value. It shows up in your bank account in a couple of days, then you complete your PPM docs. You are off your funds and then shoot. There’s another awesome deal that comes up. You want to double down, you want to put 200 grand? No, you take the same cash value loan.

And this is where I’m saying. You got to fund it enough to get that magical number. You’re you want to look for the amount of dry powder for most people here, anywhere from, I would say a couple of hundred thousand dollars to a million dollars of dry powder that you want to have just sitting there ready to go.

And also then for emergency savings too.

There are some FAQ’s here for you guys too, to check out later. But let’s talk about this. So we talked about, so you got you got your policy, you’re taking a loan from it and this idea of cannibalizing or decaying on me, right? You take a loan and in the background, they’re like a payment plan happening.

Now, your policy may not be, requesting payments back every month or a year, but it’ll slowly be eating away at your cash value. Tyler, if you can explain this, how this kind of works and it’s not that big of a deal, but it’s important to understand like how the policy kind of preserves itself.

Startup. So when you do take out a loan, a lot of you’re paying upfront the inch or you’re not paying, but they’re calculating the interest upfront. So if you take out a $10,000 loan, And say the interest rate was five and a half percent. There $550 will show up as interest due on your policy, but it’ll be prorated to your next policy anniversary.

They, so it’s not really due until your next policy anniversary date. Any payments you make back to their loan or to the interest it’ll truly just reduce your principal, which then also gives you some credit on your, on that pre calculated interest rate that’s due. If you don’t pay that interest on your policy on your next policy anniversary date.

That interest, then we’ll actually get added to your principal and it’ll have that compounding effect. But within that policy area, it’s really being calculated by simple interests. And for me personally, that’s the key keeping the loan interest, simple interest while your policy is growing at a compound interest, at some point.

If you’re not, if you don’t make any payments, the interest will continue to grow and it has a potential of exceeding the, your cash value growth, and that’s where it’ll start borrowing from the cash value start going negative. And at some point it could implode. Is that what you were asking?

Yeah. So when people are like setting up their policy, They realized, like I need to set up a, a a commitment or mock in a way. And I think a lot of people here, we set commitments and we say what we’re going to do. And we get freaked out because I don’t want to put in a hundred grand per year if I can’t hit it.

Even though I have $800,000 in the bank and equity in my house that I could get at, that I have to pay in the next six, seven years. People might be a little timid putting signing up for a larger map, which is actually what they probably should be doing like a hundred thousand, $200,000 per year.

And one of the things is if I don’t, what if I don’t hit my, if I say I’m going to do a hundred grand per year, but year three, I have a bad year of my business. What happens is my policy collapses, my, the life insurance take back my policy, which is not the case. What’s going on, but to actually to go back to that, the specific question in this case, I think they’re asking if they can’t make the premium payments, years two through six or after the first year.

And so the, to me that the flexibility and the beauty of the 10 90 split is that because. You’re only the premium is only 10% of what you have, what your target amount is. If you make that, if you max fund that you’re one you’re really buying. I had 10 years worth of premium payments. That’s do so ears, ear to ear three or four, if you’re not able to make even that premium payment, even this a hundred dollars.

It’ll take the cash value, but you’ve prepaid a lot of that by prepaying. You’re also are starting to earn dividends and interest on that, but that’s where it’s covering your downside. So you’re able to. The policy won’t cannibalize quickly because you’ve overfunded it especially in the beginning.

And then even at some point, you’re eight, you’re able to, you could do a reduced, paid up at that point. And you’re not necessarily, you’re not going to lose the money for say, you’re still going to be breaking even at some point. And we can ma you know, when we look at your design, we can stress test it and say, Hey, what if I paid the full premium at year one?

And then nothing from years three to six, what does the policy look like? And most times, or a scenario. Yeah. And a lot of times it, it’s still, you’re still breaking even probably at year five. Of course the cash value in that is, is way lower than what it would be if you’ve max funded it. But it’s not that the policy just doesn’t go away.

We’re able to preserve it and design it for that flexibility. And this is where I didn’t really grasp this until you told me that a few months ago, this idea, I always just thought the boogie man was going to come and get me. And my policies were going to collapse on me and not making my annual commitment about, was not an option.

You know what Tyler just said, it’s set in a different way, right? If you’re making, if you major full, say you’re doing a, we sign up for a hundred grand a year, just use a nice round number. The premiums on that. It’s just a mere 10% of that. So if you’re funding it for that for six years, $600,000, $60,000, 10% of that is your base.

You’ve already made that if you funded your first year, a hundred grand, like you probably will be because I know you guys are going to want to fund this as fit as possible is heavy. And especially in the beginning, you’ve already funded that 60 grand plus already. So you’re good. You don’t have to worry.

It’s not going to cannibalize collapse on you and the life insurance is going to take everything. It’s not the case. You’ve already it. And that’s why, I mean that’s the benefit of the 10 99, even a 30, 70 split, then the numbers get a little bit, that you’re a downside is it’s not as flexible, but you just got run that, that math.

So if it’s $300 and $700 you front loaded it, you bought yourself three and a half years of premium versus the 10 years of premium. It’s just some, yeah, it’s just math. Yeah. So again, look guys, this is a little confusing, but once you grasped this idea, I think you guys will feel a lot more comfortable.

And actually nowadays I’m actually even more cavalier. I’m looking to fund this thing. Over two 50 per year, or at least set the policy so I can set the policy up here so I can get it. If I have a good one. Deals, cash out. That’s where I want to put my money. I don’t want the money to sit in my bank account me, nothing.

I want a container for this stuff to go into. So that’s why I’m even more cavalier about the idea of making that ceiling get higher, even though if you don’t fund it the first year, because so in this case, Say you, you said you were going to do a hundred grand every year for six years. So a total combined sum of $600,000, I would say the most people who say they do infinite banking from yourself, we’ll do like a 70, 30 split, like how Tyler is saying.

So 30% of it is going to your base premium. So 30% of $600,000 is 180. In this case, I would need to fund pretty much two full years. So I don’t lose, the policy value or if in case something happens. And I can’t put any more money after the second year, I’m still even at a 70, 30 split, which is not as advantageous and how you think?

I think that’s the secret sauce guys. That’s what kind of separates us, two years out of the six. That’s still pretty dang good. I think that should make people pretty comfortable. But if you do an 80 20 split, like how I personally have, because I like the ability to pay up, to increase it even more after the, the higher originally set up for five to seven years of, that’s, it’s pretty easy to hit, especially if you already paid your first year, if you already paid your first year full way, you’re already there.

Yeah. And we’re not saying. We encourage you not to max fund it every year. It’s more just covering your downside, but covering the what ifs, if but it is most advantageous to max fund it every year as, as much as possible. Yeah. And this is, again, comes down to, tell your situation and.

Sees enough of these cases start to, make you aware of different ins and outs of things that you should be aware of or situations that, no other places to go, get money from to kind of stuff and maximize the policy to get it even bigger. So you have a bigger cash base to invest out of.

Advanced Topics

All right now, we’re getting into the fun stuff, ? There’s so many different ways you can use these policies, emergency savings accounts, opportunity, funds to go and invest. But here are a lot of different ways that we’ve found, people in our community have used these policies to augment what they’re already doing.

At the end of the day, I would highly recommend everybody read this little third right here, which is basically saying keep it simple guys. There were a lot of stuff, especially in the last section where we probably just thoroughly confuse you guys. And unfortunately, when people were confused, you guys don’t do anything.

Don’t do that. Minimize your commissions or fees and that Lou try and do to help you guys, but all this money eventually goes back to you guys. So you guys can augment the return. And to me, the most money you want to stuff more money into this thing as much as possible. Just get going, right?

Get going with a little test policy to get the feel from it. You’re going to learn how it works, but you’re going to fund it. And then when you need the money, maybe in the next month or maybe next year, you take the money out in a really quick, direct deposit form. Very clean. And then you have the money to invest for your syndication to, or whatnot as you’re making deal within the policy.

I don’t know. Any thoughts there, Tyler? Any yeah, and as far as some other, so some events topics, and I’m not sure if we’re going to get it to them. I know a popular one is premium financing. A lot of people are starting to ask about that. The I mean that, I think our goal is to get everyone set up with the, with just their initial the maximum cash value, whole life policy, the premium financing, which typically are for the higher net worth.

You lose a lot of the liquidity. It is basically you’re leveraging, you’re utilizing a bank, they’re covering a lot of the premiums upfront. And at some point, and we’re talking probably about 10 or 15 years is when you’ll be gaining access to that cash within that policy. For right now, the target is to have maximum liquidity and early cash value.

That is something we’ll be starting to look out and research and dive heavily into as everyone starts progressing especially in their net worth. Other advanced topics are utilizations of these policies in your business for your. Your executives or for high value employees, people are using it as a way to for retention to be able to pay retirement to some of their key employees along with still having access to the cash value now.

And that’s probably the next step we’re going into. There’s a lot of business owners or they want to. Ensure some of their, the other dentists, for example, partnership and that they’re trying to structure some policies. That way. Overall concept is always the same, maximizing liquidity and flexibility and the cash value.

It’s just, the uses can be To just have different uses legacy planning is also a big one. I’m personally looking into utilizing these things. And th the beauty is once you start, once you have these policies and it’s surely cashflow, then you have the flexibility of using that cash. However you want.

That’s. That’s why I personally like it. You’re not locked in to eat only education funds or Long-term care or retirement funds and you’re able to do it to use the cash. Ho how you want

some side benefits too, is tolerant can add on like a writer for like long-term care. There’s a term life there’s index fund ad-on, but it a lot of times you pay for that in my opinion. Like to me, I don’t like the all-in-one option. I like to get the product for the S the need.

And get many products. Maybe that’s just me personally, but, again, like the IUL thing, that’s more for higher net worth people, in my opinion. You can get it if you want, if you’ve got no money, but it’s not to me. I don’t think it’s the sh the tool for the job at that point in your part of your journey?

I think when people, you can see where this goes, that people asking the premium finance question, you guys have already done your full life, infinite banking policies with us, and you guys are asking what’s next? Because you’ve already seen how good this stuff is. So to just give a little bit insights outside the scope of today’s call, but female financing.

Like when your network gets to be a certain level, I would argue it really starts to get good at four to $5 million plus net worth. Although people will say out there, you can do it when you make a hundred grand per year, then the multiplier isn’t as strong until you have that type of network. But nor should you be doing an Iowa at that point, right?

Like again, I said, you fill up your buckets, right? You get your different a bank in blank. First to get that cash value built up as your network grows. And as you enter end game strategy, then you start to employ premium fight financing. IUL is at that point, but we got to get everybody up to speed with the basics, which is just a supple, infinite banking, whole life over funding.

Other advanced topics. They’re in this section, but the big ones are using a third party thing. So instead of paying your life insurance company, four or 5% for their loans, but some of these guys are doing is they’re going to a third party bank. I forget which bank we have a spreadsheet.

We keep this updated for clients that they can go to, to, a lot of these they’re getting what three and a quarter, three and a half percent. Doesn’t seem very much, but if you were to do another event strategy, I personally am thinking about one day, I can’t get a big loan. If I wanted to go buy a $5 million house, I can’t get a loan for that.

And the loan terms are going to suck. So what do I do? I just buy cash. And then I take the money from my infinite banking to play that rate arbitrage. And now I’m paying, maybe I also added the advanced strategy of going to a third party bank to pay three to four. Percent on that. And it’s probably way better than like a whole mall at that pump because I can probably call it a business expense at that point, too.

I’m thinking about it. This is where you got to build your community and you get these other events, topics, ideas.

That private placement life insurance, I’m not sure. If you misheard us saying we do private placement investments, I’m not familiar with the term private placement life insurance. I know what he’s talking about. So I actually put this in the mastermind discord channel last night.

So what they’re talking about is. It’s I dunno. I It’s advance for the most part, but what I would do is I would recommend doing research on what’s client. I let, if you’re interested in this type of stuff, it falls more into the IUL, type of facility. But if people want to, this is This is Biden.

Guys are trying to like close this loop hole where you’re able to pass off your estate tax free by just passing in a mouth. Now, before they close this poll, for people under $5 million net worth is Bobbie. You’re going to pay too much money to make this make sense. I would tell Justin, don’t worry about it, man. Get your net worth five to $10 million and worry about that stuff.

But I’ll take, I’ll put an article we’re interested here very well. Yeah. I think we’ve covered the whole life or IUL, index feature for guardian. There’s a question. Yeah, hold on. What does it take to access the money? Yeah, two to three business days via ACH. That’s if you go through the online portal that there are some companies that don’t have online, and you may have to either fax or fill out a call, call the agent.

Most companies, we used to have that online portal.

The death cash value in life, if you can. So a question as far as qualifying for an accredited investor, if you can use the cash value in your life insurance policy to qualify for that that is if you choose to disclose that it would be just like unlike a bank account where, they can pull a credit report and they can maybe see what you have.

These are really private. So you would have to disclose it to whoever is qualifying you. I have in the past when I went through investor or verify investor.com I just had to take a screenshot of the portal to show what the cash value and they use that.

That’s that’s thorough for them, right? You get like these verification things. I’ve seen it go so many different ways. , when I co-sign on, 20, $50 million deals, a lot of times I’ll just take a screenshot of my cash or the PDF, and I send it over as part of proof. Yeah. I think that the more sophisticated the person you’re sending it to the better they’ll understand what the heck it is.

But if you go to your average bank, I think you’re going to just going to end up with some bureaucratic idiot that doesn’t know what the accurate book doing. So that said you may be tricky to use it as cash reserves on a home purchase. But then if that’s the case, just tell that bureaucratic guy.

I’m just going to do a cash deposit into my bank account tomorrow. You’ll see it there, buddy. You can look it up,

Of question. Can you carry a term life and whole life policy at the same time? Yes. The only thing is that’s benefit does go into the equations. So it’s the, you have a overall total limit of death benefit, that, insurance companies will insure you for. So it does affect that, but you can carry and both, a lot of people do have both

take these questions as we go. This is, I think this is good to reiterate. Why not buy term and invest the difference. And this is the sentiment that the Dave Ramsey guys always say. And I would agree with this, right? If you, if your forgot what is your goal, that’s why you do the consults, right?

What is your goal? What are you trying to do here? Most of you guys are the same. You guys want to take your money and put it into a policy so you can take it out. Cash value, policy loan to go invest it. But if your goal is I want a million, $2 million of death payout in case something happens from my family.

To me, the solution and tool for that is a term life policy, but it just so happens if you fund something for $50,000 for six years, you’re going to get that by-product two at the same time.

A question about the guaranteed dividend changing at the end of the year. So that’s that 77 0 2 tax change. As far as, by how much that a very company guardian has come out with most of their products, they’ve stated that there is one will be, is 3%. Other companies have come out and for a product, it differs the guaranteed rate.

So it’s a little bit more complex in that sense, but it’ll vary. Between two to 3.7, 5% is what’s mandated.

A question went away earlier. We currently have a term life policy since we have young kids. I think everybody should have that. I’m not giving any financial advice here, right? This is no financial advice. But I think that is prudent. We only want it to do this into our kids over 18. If we start to do the infinite banking where we need to cancel the term my fault.

So you don’t need to cancel it. You can still have it, but I would say you probably, if you’re doing 50 I don’t know how much term-life, we’re getting today. But if you’re, you’re getting like a billion, $2 million by getting $50,000 a year for six years in a whole life policy that kind of suffices for that.

So most people will they’ll do is they would cancel the term life and see that was at 500 bucks per years, wherever that costs.

Yeah. And the other, I think the last one we’ve answered, when we’re going over the example about not funding it every year, yeah, we just want to clarify, we’re not, we weren’t suggesting that’s the ideal way of doing it. It was, we were just covering the downside of saying what if you can do it still perform, but yeah, the most efficient ways to fund it every year.

Yeah. It’s like buying like seven containers. Why only fill up three? You could, if you want it to. You had, I would say you train right size. It maybe go a little bit more than you think you can. Like we said, because the splits, the commissions are so low or that the life insurance component is so low, you’re going to hit your minimum of cash dumping into it in the first year.

Most likely. So you don’t have to worry about it. Collapsing cannibalizing itself. But why would you not want to fund it every year? If you’re, if you have say you lost your job one year, and things are a little bit rough. Cool. Just catching up on the next year, skip a year.

But luckily that’s where you put your money, right? That’s where you’re holding your emergency savings account. As it earns four to 5% tax rate. And that’s the beauty of this.

I think those are the open questions.

All right. How much money that someone needed to contribute to build up the cash value to make it worthwhile? That’s probably a personal question, but the numbers so that the illustration we showed, you just, you can add a zero or subtract a zero or cut it in half. It performs the same way.

As far as numbers wise, But the value will be different. How, however much you cut it up, but the way it performs number-wise would be the same. So I think main, you mentioned probably 15,000 target would probably be the minimum. And yeah, I agree in the sense that,

The base premium then at that point is, $1,500 a year or so. You want to try and stay above that a hundred thousand dollar death benefit of whole life of prayer or else you’ll lose a lot of the, kind of the side benefits like that. Enhance benefits rider. You won’t be able to get the most ice rating.

If you get the highest rating, you still just get the non-tobacco rate health rating and have slightly higher fees. It gets less efficient, a smaller unit. Trying to see who miss Mr. Michael is get a little context. Cause everything. That’s what I do. I looked your guys’ profile up. And I see the question behind the question.

Yeah. I don’t know what Mr. Michael’s net worth is. I don’t know his situation because actually he fell off the investor list cause he stopped answering emails. So Mr. Michael, if you’re out there, there used to be sign up for their club. And if you guys don’t open up emails, my system eventually purchasing from the system.

So please be aware of that. But if Michael was million dollars net worth or more. Yeah, I think this is a no brainer for him. But if Mr. Michael barely has any money like I said, it’s not for the lower net worth guys. Therefore if you’re doing a policy for $5,000 a year, I’d say, just save up the money, buddy.

Like it’s not worth the headache for you to do it. My opinion. So

I would say at the bare minimum, $10,000 a year would be the bare minimum. But I would say, try and at least do 20 10, 20, $30,000 a year, especially if you have liquidity or home equity, not doing anything, run it through this thing.

And I think it’s important. Like you’ve mentioned that before, th this is not for everyone. Yeah, but most people here are hi, higher paid professionals, higher net worth is certainly going to be there, accredited investor. Plus at some point, this definitely comes in. I think when your net worth goes over half a million dollars, but, talk to Tyler who gives you your 2 cents in that too.

You guys talk personally. The next question. What if interest rates go up over 4%? I’m not sure exactly for it asking for loan interest rates or the dividend rate, but I think dividend rate, right? So it’s right now, interest rates yields are low, right? So 4% pretty good. If the interest rates environment goes up, do those art dividend rates go up.

Yeah, so that’s a good historically the dividend and the interest rates, they all follow each other. I would say as loan interest rates go up, dividend rates go up also and vice versa. There are floors though. So a lot of times now we’re at a, or at a floor below the floor. So even though interest rates go up.

You may not see the loan interest rates go up because it wanted, there was a lag and also it may not reach the, like the moody, the corporate moody bond index may not be over the 4% floor for a loan interest for awhile. But I think it’s a good question for Mr. J here and I had the same question, right?

I don’t want to have fun. In case interest rates go up and I’m stuck here at my 3.5% that my insurance company pays me for it. I should have done it later, even if it was that case, you don’t want to have that attitude. The whole point is you’re just, you’re not really parking the cashier to make the 4%, 5% you’re taking the money right back out and you’re investing.

That’s the whole idea we’re doing here.

Yeah. So it makes sense to take policy loans to foreign investment. Does it ever make financial sense to use the loan for something smaller? I’ll look at our word that as a liability doodads something, some stupid whimsical purchase. Yeah. You can do whatever you want, but. Yeah, I would say for me personally, it would make sense if you are, especially for a car, if you are financing it and your pain, another financial institution, that interest.

So in that case, I would, there’s ways you take out a policy loan and then instead of paying the financial. Institution, 500 bucks a month or so in car payment, you pay back your policy loan. So for me personally, that’s when it would make financial sense, I’m a true advocate of using it either to buy an asset or cashflow asset or a recapturing interest that is going somewhere else.

So those are the two things I personally use my policy. Yeah. This is definitely off topic, but I’m going through like exotic car hacks.com. It’s a fun little you guys always ask what are fun things I like to do? That’s something, that’s the kind of stuff I do on my free time.

But with cars, you’re able to get a loan for much more than the car’s worth, which seems really irresponsible, but it allows you to make stuff a lot more money off of the value of the car. Stick it. Use cheaper debt. But even though the interest rates might now be like five, 6%, that’s still it’s a loan, right?

That’s not other people’s money now. Tyler is exactly right. I think a lot of car loans these days, especially if you go longer than 60 months is going to be in a higher than what you would be paying in. It’s pause. Certainly, if you’re doing a third party loan from one of these little banks that a lot of the advanced people are doing it 3.2, 5%.

That’s the way to do it. This is for some of you guys who still buy rental properties distressed, this is the place to sit, half a million dollars while you’re still making four or 5% tax-free on the money while it’s sitting there for, so it doesn’t quite burn a hole in your pockets, making something.

Off the table and litigators that the asset protection component. But when you want to buy that also distress, you can go write a check, a couple of days you can take the money cash value from the other deal. I think most people here have moved off from that type of stuff, but some of you guys might come back to that type of lifestyle because you’re quite frankly bored, just looking for something to do it, financial freedom date.

It’s fun. It’s the hunt. And then this gives you the war chest to that.

All right. The next question. What do you mean by a hundred thousand dollars for per year policy? Do you mean you paying that amount in premiums for the year? I think we covered that as far as the premium breakdown. So typically when we’re seeing, if it’s a hundred thousand dollars a year policy, that’s the target amount.

And then where the premium was, would be, or the base premiums would be 10% of that or whatever, the, whatever, the premium split 20 or 30%. But yeah we’re often talking about the target amount is that dollar amount is, that’s not what you’re committing to. Yeah. Do you guys look in that past section or go to the policy illustration example section.

The video when we’re scrolling through the, those real illustrations, that person in that sense, that illustration is pretty not 50,000. Yeah. Yeah. I think most people here to get up to a point where they’re doing a hundred grand a year, and then in six years they built up half a million plus of cash value where they can go deploy and use that as kind of their spammy slush.

And then we covered the inflation. So insurance, the insurance companies are also investing that money or buying bonds, things of that sort. So yeah. It, it should grow with inflation, just maybe lagging a little by, eventually catch up. Yeah. And I think this is, what is your assets backed by?

Like some people like to put money in block five or these defined, crypto staking platforms where they’re making eight, 10, 15% per year. But the question is what does it collateralize with? What’s the backing of it. And in that type of format, that’s the reason why it’s getting such a big rate because it’s really a loosey goosey system where this life insurance contract that you’re going into business with the life insurance company, it’s very secure.

What they’re investing in is very low risk class, a assets in primary markets. And mostly their investment perspective is just for capital preservation. So there, the money that you have with them, the companies, the foundation is very fiscally responsible. Sean van. She,

I am going to couple, I think the question they misunderstood. So the growth from the investments benefits are not tax the growth within a policy. Can grow tax deferred, you access it tax-free by policy loans. When you take all that loan and then you go do an investment with that’ll get tax normally how a normal investment will get tax.

So I think that’s what you’re asking. Yeah. It’s important to make that distinction because for a lot of people starting out this stuff gets very confusing. But yeah, it’s separating two things here.

No, I think this second, this is just the second part of that question. So it would be very similar to the hilar. Maybe when you take all that heat off money and go do an investment. That investment that gets taxed right.

Under what circumstances can you access the money if you need it? It’s really, as long as you have the there’s a cash value and within the policy, you can access the money. So there is no underwriting for the loan. No, you’re basically just requesting it and it shows up. And I think it’s a fair question because you know what the retirement plans, that type of stuff alone or withdrawals, you always got to substantiate it with some kind of hardship or there’s limits none of this such with this.

And, he locks that the bad thing, what I don’t like about Healogics is in this happened then like 20 years, Two or 2008, 2010 is when things kinda got topsy-turvy. The banks pulled all those loans and they didn’t get access to that, which I really don’t see that happening with these types of policies that the asset is back it’s life insurance.

It doesn’t make much money, but it’s very secure assets. So I wouldn’t imagine any of these life insurance policies would pull the loan or freeze the loans on these types of things.

What was the law of change and impact in IBC? That was the, I think we answered this. This is, do you know why that’s there was a code? That’s why they did that or any contexts? It was really pushed by the insurance companies because it helps them. There were. Honestly, struggling to keep up with the 4% guaranteed rate.

So this allows flexibility in this true low interest rate environment, they were able a lot of like guardian was able to inject a lot of other benefits. So it’s not. It’s not like a huge detriment to us as policy holders and yeah. Keep in mind that, I still, yeah. That’s why you want to go with it.

The mutual insurance company is that, the strength of the insurance company, it gets paid back to you in dividends. It is making them financially stronger. They’re, they’re giving it back in different ways. I guess more in ways more they can control, but they’re, loan interest rates also for some of these policies are reducing our Loring.

So instead of maybe a 6%, it’s going down to a 5% and the policy loan interest rate, so there are some other benefits to it. Would you say that it was like a consumer protection or makes things so much transparent for consumers or it was more from the, from what I know it is more pushed from the insurance company.

Yeah, because it’s we’re in a low year. Investors are starting for yield and it’s hard for the insurance company to provide it. And that’s something for people to understand too, right? Like a lot of these laws are the way they are is because the insurance companies are very high lobby.

They have a lot of influence in the way tax code is written too.

The next one is just, I guess someone’s signed on late, but it is being recorded and laying will be posting these and you guys will have access to the entire e-course here. We know we skipped over a lot of like FAQ’s that we cleaned up for you guys and we’ll put all these recordings in the individual sections.

That’s how I was starting and stopping the recording. Sorry for that. The final product will be, this is infinite banking I-Corps so that you guys can refer to what will probably happen is, like when I first did my policy, I’m kinda wanting to do half of it. That’s all I really needed to know.

That other wealthy people are doing this too, and essentially how they were doing it. But then you kinda, as the years go by, as you start to see it actually working for you, right as the policy comes up to a substantial amount of money, over a hundred thousand dollars of cash value, you start to use it.

You start to get, you get more confident in it. And then you start to want to understand that the new lots is cause you’re a little bored. I think a lot of us are, we’ve enjoyed learning about these types of financial hacks. How do you figure out your max death benefit? It’s a generic number based on your age and it’s really, or your stated or an income. You, it’s a multiple of your, your stated currently. Based on age. So th the ballpark is, in your thirties, it’s 30 times your annual income in your forties and I, 25 times in your fifties, 15 to 20 times.

And then in your sixties, it’s usually 10 times your annual income is the max death benefit, but the best way is just book a call then. And then just see, almost policy illustration, just see where yours lights up to be. But again, we’re not configuring this to death payout. So if you’re older, younger, it doesn’t really change it too much cause it’s not predicated on the death payment component.

I sh I should share that, with the newer product, the. Or you’re able to get, a higher Mac for a lower death benefit. It does help some of maybe the borderline earners where they’re trying to stuff in 50,000, but based on their annual income, they can only, and the calculation for the death benefit currently, they’re not able to do that because the death benefit required is too high.

But now that in the new product, that death benefit required would be a lot lower and you’re still able to do, maybe the 50,000. So it’ll be probably easier for some, maybe some lower income earners to qualify.

I’ll let you take this one lane. Now you use there’s some good questions guys. So the question was, if you’re just out of college in your first jobs, when you should consider that the whole life IBC, and this is not from some young whipper snapper, this is from a investor thinking about their kids, right?

From one perspective, from a, just a insurance perspective. Sure. This stuff is infinitely scalable, right? Big and small. So if they want to get it, they can get it. But I think this is an awesome idea to give this to your kids and it really teaches them how, like you have different places, you can put your money and make different varying levels, a yield here.

In this case, they’re making something halfway decent, like 5%, which is a hell of a lot better than what they’re going to get in your bank account. Sure. They have to plan and wait a couple of days. The chunk of money to buy a PlayStation or video game or whatever they want. But, I think this allows them.

You don’t learn about this stuff unless you do it. So I think this is an excellent idea. Even for younger kids to potentially, although, you start to run the whole argument, is it worth your time? The pain in the butt factor for a smaller policy, but then again, I guess kids completely fall on the category.

PETA. But if it teaches them like, you know how to manage their money, the way that the wealthy do, I’m all for it. And I think this is something that is very, if you do this for your kids, it’s very different from what their peers are going to do. And that’s in a way, I think you want them to understand that they live a very different life than most people out there doing things that traditional.

So if you want it, you can fund it. They can own it. You could own it. There’s different configurations and how you want to do this. You probably want to own it. If you’re concerned about your college kid dropping out and becoming a crack head, that’s always a thing and you can embed it in your trust and do what’s called again.

You want to Google islet. It’s not really talked to much these days because the state tax threshold is higher than normal. But that probably that’ll be coming more of a topic that we’ll talk, discuss more in the future and bring up the clients. But yeah. Yeah, maybe I’ll answer. So diff it’s I think personally, if it, if you’re right out of college working your first job, It matters what you’re investing in.

Again, these policies you are giving up the liquidity upfront, so it’s costing you, that 17% or so, or 13% or so upfront that first year, if you can go ahead and use at 13% and do an investment instead, and you need that 13% to make every dollar work, especially early on IBC is probably not. Doing that right now is probably not the best idea because you’re going to give up that liquidity.

I would say, put that money to work first and then come back later in on in a few years, maybe. For most of you guys listening, if you guys are under foot or midnight, half a million dollars, don’t do this because you’re already, you guys need to go buy a rental properties and you guys are already on like the forefront of pulling down 30 grand on the turnkey rental for a hundred.

So you don’t want to be paying, every dollar super precious to you guys when you guys are broke like that. So you don’t want to be putting that to fees, but most of us listening, we’re going to do this, we’ve got, you’re going to pay the fees, but you get the utility that you’re going to really see in the next three years, even well, beyond that, a lot of the breakeven points are five to six years.

On these types of things. But what I was thinking here for this specific scenario, Tyler was this kid is in college. He’s another two years away from even thinking about buying a rental. So now would be the time to load the policy. So when he actually grows up and actually looks to actually invest two to three years later, this policy is primed and ready to go.

Oh, he has. Yeah. Got it. Tara and I are both very passionate about, passing. Generational wealth that these kind of, these ideas of this. So I think, all right is the Mac irreversible tenue ear or two to turbo charge and then get back under the maximum limit. So the Mac is not a reversible.

Once you map the policy becomes. An event, a modified endowment contract. ER not, there may be ways of slightly supercharging, which we can go into details on a, on a one-on-one call or whatever, I can go over some of those tricks, but yeah, it’s not a reversible. So Justin is the classic case that the guy who sits around for a couple of years and missed out on all the schemes that he could have been doing with it, like tries to figure it all out now.

That’s probably maybe 5% of the population here. But again, I’m just mentioning it because there are some people that are like that likes to get wrapped up in these details. I honestly didn’t even know what MEC was for like two years. And then I figured out what it was and you’re buying a commodity here.

It’s life insurance. Can we, it just needs to be configured in a right way.

This is a common question. Wouldn’t it be advantageous to continue paying the premiums even after the seven years? The typical answer would be it,

it may, we can’t necessarily give a blanket answer. So there are times when yeah, you continue. You want to pay the premiums. There may be reasons you don’t want to open up another policy or. My standard one is that with, at least with garner, when we’re maximizing the cash value, you’re able to continue pain, as long as you want, it just may not be the best use of those dollars having it, or the most efficient, and instead divert those dollars to either another policy.

It’s not gonna you’re paying the premiums either way, whether it’s a long funded policy or you’re opening up another policy. The premiums and costs are all relative or all the same just structured slightly differently. I’ll add onto that.

Like in this one situation where I think everybody might fall in this category, a lot of you guys are on the fast track. Your situation would be drastically different in five years, your financial outlook, they’re different. You just got to get started doing this stuff. So in five to seven years, your job will change you.

You’re going to increase your investment holdings. You’re going to be in a lot different place, and you’re more than likely going to want to like double, triple the size of your policy that you’re putting in today. So if you start off with 30 grand may want to put a hundred grand after the first few years.

That’s my angle on this question here. And I’m always like, especially when you’re starting out, just get a smaller policy and just get it going. And if you have to get another layer, another six, seven year policy, right on top of it a year and six months from now, then also, it’s just the little bit more paperwork, but if whatever the mistake is waiting on this.

And trying to figure out what is the best one? No, I’ll just go on and do a smaller one. If it helps you get going further on the path, six months ahead of schedule.

Yeah, there’s this a good question. So I agree with the 10 90 split too, but Nash Institute, people are, again instead, do you have an opinion about this? Yeah. Great question. And I’ll sit and rash. The typically, yeah, I think a lot of their designs are really like a 40, 60 split. And he even advocated at some times, not a 2080, but an 80 where it’s base premium 80.

Or even a hundred can work at times. I think that’s good for possibly the long run. The way we’re structured, especially in this group is the, is for investors. So I per se like the early cash value access, the liquidity there so that I can go out and do something else. If you were to just purely look at the policy by itself and structure it, maybe, the would a higher split.

It’s more for like the long funding and you’re going to be funding it for 20 or even the whole life of the policy. And it behaves a little differently than what I personally intend to do with it, which is pull the money out and then have it again, working in investments. Yeah.

It’s from a different angle, when you do it the way they do, you make a lot more commission. So if you’re the sales man you’re going to, it’s better to do it that way. Or the way we do it is better for the client and it just doesn’t make as much commission. So that’s stupid, but, there’s a business these in behind it and at the same time, there’s all this is guys.

Sorry if we went this long. Tricked you like, this is just whole life insurance configured in a way. And you’re, over-funding it, there’s a lot of different name brands up there. Infinite banking from yourself, your own bank. I don’t know any other ones, Tyler, but these are just like marketing terms really means nothing.

All that. What it comes down to is working with one of the big insurance companies picking the right product and then configuring it in the right way. To have it set up like how we’re doing it, where it’s advantageous for investors with lower commissions or fees and you maximize your cash value up front.

That’s all it is. And that’s why it’s aligned with the mission of simple passive cashflow, which is to, cut all the crap out there. Like these huge fees, all these middle men this is why when you do it in this way, able to get on the path to financial freedom so much faster and cut off all these games and commissions and all this other stuff.

But yeah, don’t tell him, we told you though. All right. The next question. How is the 90% PUA tax reported? I’m not quite sure on that question, but I would say that all money going, using to pay whether it’s the base premium or POS that’s after tax dollars, solar you’re paying into it after tax dollars.

As far as how that’s being taxed. It, I dunno, I don’t know if you understood that question a different way. Yeah, I think you got it. Just out of curiosity, like what happens when, like you kick the bucket and your family gets that $2 million death payout, does that get texts so that it was transferred tax free?

The thing people got to watch out for a lot of times is the estate tax though, especially if it’s a large policy and that’s the one where like right now, If you have a couple, they can both give 11 million. I believe so. As long as you don’t make one of those huge policies, you don’t have to worry about it.

But there’s talks about that decreasing. So then that’s that. Yeah. And that was like the question that came there in the very beginning about that PP. Private placement life insurance. You guys are under $5 million net worth disregard what I just said. Don’t worry about it.

If we’re going over premium finance for life, I not in detail, but we, that’s something offline. What we’ll we are diving into it. Justice. Definitely we’re going to Guinea pig it with you guys first, for sure as we do it ourselves personally, but again, there’s a lot of market in terms for that type of stuff.

Philosophy, banking, payment financing, it’s all the same thing. It’s all annual product with a contract with a bank that gives you the leverage.

Are we supposed to overpay the policy loan as a way to backdoor fund the cash value. That is one way, typically the ways you’re max funding it upfront, and then you’re taking the loan out. So you’ve already almost gone up tier here, almost your max teething limit. When you are paying back the loan, you can choose to pay more.

And that, that just drives down the effective loan interest rate or what you’re being charged. Similar to a sweep strategy using a hilar if people are familiar with That’s something I do at times also, when I, whenever you have your income or a paycheck, come in, you can pay down your loan.

Then as expenses come to you, you take it out. You’re keeping your policy loan as low as possible. But you for this specific question, the way I like to think of is you’re already max funded at, and then you take out the policy alone. Like what some people will do with those Healogics is they’ll set up their checking account to pay all their bills that also pays their fee law.

I haven’t found out a way to look it up completely in line with your life insurance. Perhaps something will come on in the future, but it’s easy enough already to make your Gmail. If you want to do it that way, but that’s essentially it. If I think Justin is this new to Justin, like it’s very simple.

We talked a lot about more advanced stuff that we really don’t really need to know, but that’s effectively what we’re doing here. We’re stuffing this whole life and that’s why it’s called whole life over funded with a bunch of money. And then we’re taking that excess, taking it as a loan. A lot of people who have, W2 salary, more consistent income, consistent, expensive, I would say most of you guys are the strategy will be taken every single last penny of that cash value and going on investing it because there’s a higher, best, better use out there personally.

As a business owner, and I think this speaks for a lot of business owners. You guys know, sometimes you can have increases in income, decreases in income. Sometimes you might have to buy a CapEx expense for me. I keep a lot of dry powder on the side, just in case we might have to bring in extra money into a deal as a general partner.

So I like to keep a lot of dry powder in my cash value policy and I don’t vest it completely. Okay. I like to keep at least several hundred thousand dollars of dry powder just to add into a deal in case the pool cracks or something like that. So that I don’t, we don’t have to do a cash call and I can just loan money to the deal or throw in cash as a general partner sponsor.

But I would say that’s a very rare case. And for most of you guys are just taking, putting the money in putting it right back out of the cash flow.

All right. You can use it as long-term care insurance. You can also use it as well. Yeah. So the benefit with having maximum cash value is that it’s really, you can use that cash value for whatever you please, there are some features, the accelerated, enhance benefit rider. That’s the. It’ll you’re able to have access to the death benefit if for a terminal illness or a chronic illness, or you could also put on a long-term care rider, but there are ways of accessing the death benefit while you’re living.

Again. You always have access to the cash value in the form of a policy too long. That there is that also.

I’m going to, I’m going to clear this. Did you capture it already?

Got it. And the next one is just a continuation of that.

All right. How long is the loan term? So there is an old term. That’s part of the beauty of taking a loan policies that you don’t, you determine the term. Is very flexible in that, but it also requires something solid. I highly suggest that, you create a term that works for you and you.

You stick to that, but it is flexible. There’s no repayment plan. Insurance companies are able to do that because they’re, collateralizing your death benefit. And at some point you’re you’ll die and they’ll get their money that way. So they’ll just take it out of the death benefit and then give your beneficiaries the remaining amount.

So of course, what are some things. Void the contract, if you commit suicide or whatever you to read the fine print. But like off the top of your head. Yeah. So unlike so usually there’s just a two year hold for a suicide. So it’s still, most companies will still pay out for suicide, but it’s a two-year hold.

Yeah. Every policy, product or company is different, so yeah, you would have to read the fine print. Just going back to the long-term care or the enhance, accelerated benefits. Some of those, if you develop a chronic illness or a terminal illness, but I feel as a result of maybe a suicide attempt or drug use or drug abuse per se, Some of those won’t be covered.

So there are, as you do have to qualify for some of that. Again, that’s not why we’re using the product, but just to be aware of that, and again you have access to the cash value. One thing that I would say is if you’re a smoker with your smoker on the thing, cause I’ve seen them throw up policies or payouts based on that they can prove otherwise.

But any other. Things like that. It goes without saying, but I got to say it. Yeah, no yeah. That’s right, the company, these are reserves the right to have the final say on know if on your underwriting, you said you never. Smoked. And then you have lung cancer and there are signs that, you passed away because of that, that there’s, that may have caused the company to say, we’re not with camp, we’re not going to pay this out or at least reduce it or something.

But to touch on that too. A lot of times, we’re not because we’re not necessarily doing it for the death benefit who you insure. Sometimes doesn’t matter if it’s within your family, associate a spouse. If the male has some underlying health conditions, That’s where maybe you, you say, Hey, we’re going to ensure the wife who’s healthy and the policy can work and you’d have access to that cash value.

Then there’s the owner of a policy, the beneficiary of a policy. And then the insured, a lot of times the owner and ensure it doesn’t have to be the same person. It’s just, I think the only issue is like, if you get it on your. Yeah, I know you always all have access to their online portals, do whatever you want, but if you have to call something in, I think that they have to call it in for you potentially, or maybe you have to designate Dennis.

Yeah. Sometimes. Yeah. Yeah. A lot of times with the online portal. It’s yeah, it’s like fine. So joint McCollum, online banking at times. So I told my wife, we’re going to make our next simple passive casual shirts are going to be. Or our spouses, like I’m only here because I have to co-sign this long husband, hey, what do you mean? I can’t put the loan in. You can’t put the loan for your rental property in your knee. I don’t want to get it. Just, don’t worry to sign this stuff the same thing, but I don’t know. What did you do? Do you store it all in your, under you personally split? My wife has one.

We’re actually opening up another one. And then I have my, I have a couple of lanes. Okay. I split, I just, just to keep it even cause it’ll be super sad if she goes away. So

yeah, I think I’m, I think it’s all on me, maybe that’s the intention, right? If financially I’ll be okay. Yeah, but I know that’s another, and I think this is where you talk with individual people just see where their head’s at and just get on the right person. It’s not super important, but something to think about too.

Who’s the beneficiary. All right. We’re getting down to the last few. Can you set up a one-year paid-up policy versus six to seven year policy? Yes, you can. I’ll tell you that a one year lump sum payment will not perform as good as counter-intuitive you think that you front load it and you stuff it all.

Then I start running dividends, but remember that there’s that MEK limit. So in order to be able to pay a certain amount there, looking and saying, okay, you’re going to have to pay that amount for the seven years. Even if you don’t pay it. So in order to lump sum this large amount in year one, you’re going to need this huge death benefit because it’s going to look like you’re paying that premium for the next seven years.

So it’s that large death benefit will eat away at all of the costs versus. Spreading the payment out, between two or three years. I like to say, five is probably the shortest seven is the most efficient as far as stuffing the most in. But you can see very good returns in the five-year one.

It’s just because you’re paying for funding it for seven years, even though you’re not, a lot of people will do 10 years because it’s around them. But I would argue, as I said earlier, like your life situation will change every five years. Like you guys are on the fast track financially. To me the shorter, the better, but I didn’t know that, I didn’t know.

You could just do one or two years, but my, I didn’t know that, but if the sweet spot is six to seven years. Yeah. And definitely, we can set something out by I’ll show, whatever. Policies and we can illustrate it. And that’s where we just compare things side by side.

Things will behave differently for each individual. So it’s always best to just illustrate it and put it out on a spreadsheet and compare it and okay. Yeah. Don’t do that with Tyler. Do it with the other guys, have them go through that. Rick and Paul just do it with us cause we’ll beat them on pricing anyway.

So it seems like a pain to do. I think there’s some we started. Yeah. How does the loan usually need to be paid back annually? Quarterly. It technically doesn’t. If you don’t make any interest payments, the policy will just start borrowing from itself. Or the cash value was, will start going down as the need for interests grows.

So that’s what’s happening. And then at some point, it’ll, it could erode all the way, but there’s ways of designing it too. Matters what people’s goals are. Some people they want to, when they’re 8 65, Start drawing 50,000 a year for 20 years or so. So that’s how we’re deciding the funding period or the funding amount to reach that goal.

And their intent is they take out that $50,000 loan make zero payments and want the policy itself to still maintain. So it just tweaking the policies and that’s, I know exactly like a reverse mortgage, right? Yeah. Yeah.

Something like comedic close, but we have a spreadsheet of this stuff, but since we’re recording this, the banks change all the time, but I don’t know. When you guys do your call with Tyler, he can share the sheet with you guys. There’s like about 12 different banks across the country.

Some of the people in the family office groups helped us out. I called the ball and then talk to the people. So you have the names and contacts of the people that you want to work with. If you’re, if you want to do that. I personally don’t. I think it’s a pain to do that. I don’t utilize my entire cash value loan, but if you had a cash value of more than a quarter of a million, it might make sense, but we’d have to do that.

But they’re really these obscure banks, like I’d never heard of these banks before. They should send us a coffee mug for sending all these random people from California, Hawaii, Washington, Texas out there. Yeah. Any last question?

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Closing thoughts so this whole idea came about I was talking with Tyler in terms of people come into simple passive cash flow and they start to learn about all these alternative investing ideas. No, the rental properties. I thought at one point when I first started the podcast back in 2016, that everybody should own turnkey rentals.

How easy it’s turnkey, how hard is that? And then, you got into it. We had the remote investor eCourse, that’s still available. And if you guys still want to do that’s. I think that’s for lower net worth guys, and it’s not something not everybody can do call up property managers do all this type of stuff.

And I think that’s where the syndications became a nice little sweet spot in terms of you just need to have enough money to invest and you don’t do anything it’s purely passive. You have to be careful who you invest with for sure. But it’s something where you can do. Great returns and you start to initiate those tax benefits.

And this infinite banking thing that we’re talking about today is the cornerstone of it. This is the third piece of the tri force onto this huge strategy or this kind of the way the wealthy do things. And you don’t need to invest in real estate to implement the strategies, what we thought, right?

Because a lot of our friends nowadays are financial fanatics. Like you guys are. Investing in crypto investing in rentals, investing in syndication deals, but we always thought what did the person that doesn’t read any blogs doesn’t read any financial podcasts? What should they do? The average person out there is just trying to paint off their own mortgage.

And, they’re just getting beat by the pace of inflation investing in their 401k 5 29. This infinite banking is something that’s implementable by everybody. Although we said, it’s probably better if you invest first, if you’re under a quarter million dollars net worth, but that said there’s lot of people that are unwilling to do that they don’t want to put into effort.

And this is something that’s in terms of good, better, best. It’s something that anybody can do out there. That’s better than what’s the average thing that most people do. This is some kind of thump, something that we’ve done personally, we use it in a form to take the cash value right back out, into invest in investments, but that’s not necessary.

Like you guys can see if one of your friends that doesn’t is doesn’t invest in real estate. Like how you guys are, we call them muggles, right? Muggles are like the not magic people. That non wizards, which is in Harry Potter. The non-believers is what they. Hey, this is something that the muggles can do out there and that you guys should probably implement too, as a way to to funnel funds through these policies and then invest to augment their returns that you guys are currently getting with the tax benefits with the, the, we didn’t talk too much about the asset protection piece of it today.

But Tyler. You’re getting some of these for your friends too, right? That real estate investors. Yeah. Yeah. And it’s really just following what the smart money is doing. It’s scalable in the sense, these got, the wealthy are putting millions and millions a year into this then we’re able to do that same trip.

Scale down to whatever to meet here, to meet everyone’s needs. That’s what I like about it is that the entry point is relatively not, it can be customized to me your goal and what you’re comfortable with. Of course. Th there’s, probably a minimum that we’re discussing what that is, but also look at it as it’s really an asset.

It’s not at some point where you’re able to give up some of that liquidity upfront. It’s not like you have to choose. A policy or am I gonna do a syndication? It’s almost, you’re doing both. You’re going to do the policy and then you’re going to do the syndication. So it really just enhances what you know, you’re going to do anyway with that money.

And like what Tyler says, it’s like an add on like the way I’ve thought about it. When I first thought about doing this is maybe it’s not the most politically correct analogy, but it’s your investments are like a. This is like the silence or on top of the guts, like it enhances what you’re currently doing.

It’s not, if it’s a hand thing, it’s not this or that type of thing. Maybe you should think of a lot more, less violent type of analogy, but maybe you guys can figure out why, but that’s the best I’ve come up with thus far.

Yeah. Call to action here, guys. Go through this e-course you guys should have all access to this. It’s on the members site, not simple passive castle.com site, but the members that simple passive cashflow.com, you guys should have your email logins. The default password, if you’ve never been in here is password 1, 2, 3.

If you guys can’t see it. So having trouble shoot the team email eight questions, email bank@simplepassivecashflow.com. Look your compliments, you our all here, get to know Tyler so we can get get to know how you guys are running things. He’s always willing to talk about, how he does things in terms of investing.

And then, how it parlays into your infinite venture. I just want to truly and invest there first. And that’s what that’s what my strength is, my, the experience of the investments in home doing that. And then I would say, insurance broker second. But yeah, my, my main background is, I’m like you guys, I’m a, I’m an investor.

And that just studied about this insurance thing for awhile. So I enjoy talking about my investment experience and that I think that helps lay out maybe how to design these things and how it could possibly work for you. Yeah. So he’s licensed in multiple states. So you can do it anywhere. The vision of where this is going to go eventually is we want to have the brick and mortar.

So this is a partnership between myself and Tyler, where he does the life insurance side. But I also want to have a piece of that office, that suite office, that you guys, as clients can visit to, come and talk story with Tyler and high five. Me also in the office and also bring together the community aspect, right?

Because the clients that are doing this, you guys are all, like-minded doing it the same way that kind of pulled together. You guys because best practices for using these policies as this essentially, this is just a conduit for your other bigger, better things. This is one piece of it, but There’s no last questions.

Thanks you guys. And if you guys have any questions, feel free to email bank@simplepassivecashflow.com.

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