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You remove the risk and you're
working with certainties.
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you're not gambling because there's
gonna be a death benefit payout
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and you're gonna have access to
that cash value the entire time.
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we want as much risk to leave
us and as much guarantee to
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come to us as we possibly can.
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you're gonna have access to
multiple times what you put it in
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premium, in the cash value side.
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And your beneficiaries will get, multiples
of that on the death benefit side.
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Welcome to the Infinite Mindset Podcast,
the show where we explore the power of
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the infinite banking concept and how to
take control of your financial future.
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I'm your host Andy, along with
Scott and frequent guest Jared.
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We're here to help you think
bigger, build smarter, and
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create freedom on your own terms.
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Let's get started.
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All right.
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Welcome back everyone to another
episode of the Infinite Mindset
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Podcast, just me and Scott today.
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And so we'll just jump right into it.
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Scott, what's going on with you buddy?
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Let's see.
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Got home from work yesterday.
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That was a long day, so I, didn't,
I forgot to mention this to you.
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I screwed up.
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We got done at like 10 30 at night
and I thought I had booked the crash
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pad or just a room to stay at that
night and come home the next morning.
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I take the taxi from JFK to
LaGuardia, go to the crash pad.
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I look up what room I'm gonna stay in,
and I realize that I didn't book one.
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So, oh, it was terrible.
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So I went over to the crew room,
hopped in a recliner, couldn't sleep.
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Worked on my bids for next month,
even though I'm going to training,
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but just to get a schedule on
there, just for the credit wise.
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But anyhow, yeah, I got like two
hours of sleep, slept like 45
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minutes on the airplane and then
stayed up yesterday until like nine.
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So San Francisco to Kennedy,
like two and a half, two hours.
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45 minutes of sleep and
then up all day yesterday.
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That, that was cool.
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but on a more positive note,
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You're looking
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that was,
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for that right
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that was bad.
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Yeah, I, oh, I slept
like 10 hours last night.
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It was awesome.
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So, but I got the,
practitioner course, complete.
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The test is done.
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So, now onto the mentor phase
with you and then the actual
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practitioner title after that.
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So
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Congrats
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that's.
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Yeah.
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Yeah, I was, that was, I was
glad to get that done before the
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two 20 training next month too.
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So, gotta come down, come down
to Atlanta for basically a month.
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Well, I'll be five on three
off or something like that.
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So, but yeah, so I was, I was, I
was happy to get that done before
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airplane training, 'cause trying
to study and do two things at once.
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I can't.
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I can barely walk and talk.
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Don't ask me to chew gum and bite my lip.
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No, it's actually really smart.
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So I know the NNI, they do it
where I want, was it 60 days?
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Right?
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But you can potentially request an
extension for 30 days, depending
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on what's going on, but they
want you to get that test done.
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And I like it
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Yeah.
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you're either motivated,
you're gonna do it or you're
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Oh yeah.
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and hanging over you.
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But now, once it's done, it's not like
you're one and done and you put it away.
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You know you're gonna keep using it.
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Right.
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it's important to get through it so you
can actually start executing and not just
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constantly be in this studying phase.
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I think if it would've took any longer,
you'd have to go back to like the
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problem and start reading stuff again.
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Not that it's, not that it leaves
your memory, but like the specifics
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that are gonna be on the test
of what they want you to know.
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And how quick to find it or, like
regurgitate it outta your mind,
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you know, and, and put it on paper.
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But yeah, it's the, the test
was pretty in depth too.
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I was surprised, or, or I shouldn't say
surprised, but you know, I'm getting at,
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it's like, oh yeah, they, because they're
like, they're like, oh, it's o it's open
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book, you know, but you're not gonna
have time to go through and find stuff.
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You really don't, maybe maybe
10 questions out of 115.
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You have time to actually dig
through the book and look for, so,
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Yeah, they
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it was,
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you know what's going on.
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yeah.
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it's one of those things where if you've
read and done the research and you
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Yeah.
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moments where you're like, I
just need to look it up, you're
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gonna know exactly where to go to
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Yep.
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If you're starting in
there and you haven't done.
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Homework.
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Yeah.
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You're gonna
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Yeah, the, the only really thing that I
used the pen and paper for is I jotted
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down like, like I said, like 10 questions.
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As I went through.
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I was pretty confident in the
answer, but I just went back
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to double check 'em type thing.
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So, but yeah, so
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Good deal.
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that was, that was the big
weight off the shoulders, so,
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right, right.
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No, it is.
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It's definitely nice to be done
with that and be able to move on.
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yeah.
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to you.
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I'll let you kind of run with this
one and I'll just jump in and.
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Cool.
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doing before, we're gonna go into
section two that you actually covered.
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So we're gonna force you to
regurgitate or, bring that information
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back to the forefront and see,
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Recall.
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Recall, that's word I was looking for.
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Recall.
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Recall.
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There's even a button on the plane.
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Just recall.
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Recall.
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Yep.
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anyhow, uh.
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You got it.
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That sounds good.
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So, going back to the NNI course kind
of is like where we're at with this.
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I did a couple of podcasts so
far, talking about the problem.
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We dipped into the solution just a
little bit naturally through the, through
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the last podcast that I, that I led.
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but now we're gonna get more into
the solution, the solutions that
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there's three parts to the NNI,
just as a reminder, we have problem,
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solution, and implementation.
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the solution is definitely the thickest
part of this, practitioner course.
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there's, there's a lot going on in it.
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I don't think a lot of it is.
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Applicable to like general public
knowledge, but it's definitely something
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that as practitioners, you need to have
a, a pretty good understanding of in
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order to get to the implementation phase.
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we're gonna talk about the solution today.
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So to recap, we talked about
problems with money inflation,
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fractional reserve banking,
monetary expansion, stuff like that.
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and that kinda led us into what
we call the Sound Money Solution.
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And if we remember a step two of that
sound money solution was privatized
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banking, and there's things with the
sound money solution that we couldn.
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You know, we just can't accomplish on a
personal level, but privatized banking
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is something that we can do today to
help basically the economy, by not
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participating in monetary expansion via.
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inflation and, fractional reserve banking.
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So anyhow, the big question that
people might have is, why insurance?
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why do we use whole
life insurance for this?
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why are we using that as a warehouse
to store our wealth, and implement
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this privatized banking system?
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you might hear there's better
rates of returns on other
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products, stuff like that, but.
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going back into the problem.
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it's, the solution is
we're transferring risk.
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we're getting uninterrupted compounding
growth and control and whole life
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is, it's not pretty much, it is the
only product or vehicle that fits
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everything that we're trying to
accomplish in our personal banking.
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I wanna really emphasize that last bullet
that you talked about there, the transfer
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of risk, the uninterrupted compounding
and that control, that's really what
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separates us from conventional thinking.
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So many people look at these
things and look at ROI they think,
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more risk equals more return.
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What we do requires a complete
mindset shift, and it's tough,
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if you've been taught or.
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thinking one way and you come into
this and you realize you have to
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pivot and do things differently.
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I find that is one of the things,
depending on people's background,
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that is the hardest part for them.
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and you can tell when people have
read the book and when they haven't or
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when they've caught it and when they
haven't caught it, because they'll start
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asking different questions the second
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Okay.
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talking about ROI or what's
the internal rate of return?
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And they start comparing it.
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And I know like we're talking about,
you've got your one buddy that
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does it, and they start looking at
it like the market or something.
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can tell.
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Okay.
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They haven't caught it
yet, and that's okay.
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You just realize where they're coming
from and it's, I, I was there before.
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You know, it takes a little bit until
you read this book and really catch it.
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It's tough to change that mindset,
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I jokingly offered him the book
the other day knowing full well
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that he wasn't gonna read it.
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right?
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I was like, I was like, dude, if I
buy you the book, will you read it?
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He's like, uh, no.
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And I. I'm like, that's fine.
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Like I, I knew the answer before I
asked it, so, but it's just who he is.
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It's his personality.
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It's who he is.
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And then there's, wouldn't,
wouldn't trade him for the world.
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So, but
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note on that.
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That's why I will not buy people the
book, because if you buy it, typically
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people will not read it if they buy it
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I've,
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and typically they are gonna read it.
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I've learned this twice now.
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So, that is a solid, I give the link now.
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I've, I've done it twice.
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Well, I, I did it once
and offered it once.
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And now it's, I send the link and if
you're gonna get it, you're gonna get it.
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If you're not, you're not.
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But yeah, that's, I, I carry a copy with
me in my bag just in case somebody asks,
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like I can show 'em what it looks like
so they know what they're looking for.
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But that's, that's my copy.
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100%.
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I gave it to my nephew.
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I gave a, I gave one of my
nephew and one of my friend and.
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Did, did your nephew read it?
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he read it, but, how do I describe him?
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he's an entrepreneur.
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He'd be perfect for it.
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He'd be absolutely perfect for it.
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And it would be perfect for him, I guess
is the more accurate, way to word that.
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But he's young.
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he's living in the now.
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I can't blame him, you
know, when I was 23 or 24.
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I had other things on my mind and,
but he's, a successful business owner.
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He is a good guy.
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But yeah, he's just not there yet.
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but anyhow, off the book
topic, talking about, transfer
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of risk, This is a big one.
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'cause we've kind of mentioned
this and had this discussion,
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but just to throw it out there,
insurance is a transfer of risk.
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that's what it is.
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That's at it, at its core.
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That's exactly what you're doing.
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You're paying a premium and then the
insurance company is assuming the
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financial burden to cover a loss,
whether it's your car or your future
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earning potential, so at its core.
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We're transferring risk.
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some people might think it's gambling.
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It's a form of gambling.
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you're paying for something
that may or may not happen.
243
00:09:47,825 --> 00:09:49,835
the biggest thing with that is gambling.
244
00:09:50,375 --> 00:09:50,915
Gambling's an unknown.
245
00:09:50,915 --> 00:09:54,635
When you stick a dollar into a slot
machine or you lay 20 down at blackjack,
246
00:09:55,025 --> 00:09:56,645
you're not sure what's gonna happen.
247
00:09:56,685 --> 00:09:59,595
you might come out ahead, you might
come out behind, you don't know.
248
00:10:00,135 --> 00:10:01,905
Insurance is not gambling.
249
00:10:01,905 --> 00:10:03,045
It's a guarantee.
250
00:10:03,145 --> 00:10:07,685
if something happens, the company
is going to do this for you.
251
00:10:07,715 --> 00:10:09,155
That that's not gambling.
252
00:10:09,205 --> 00:10:10,045
that's a certainty.
253
00:10:10,495 --> 00:10:13,765
just as certain as you will
graduate, as Nelson puts it, you
254
00:10:13,765 --> 00:10:15,865
know, pass away, you'll graduate.
255
00:10:16,186 --> 00:10:16,936
it's a guarantee.
256
00:10:16,936 --> 00:10:19,846
There's no getting out of
this alive anyway, but.
257
00:10:21,061 --> 00:10:24,571
So it can't, it can't be gambling,
you know, there's no, there's
258
00:10:24,571 --> 00:10:25,681
no risk associated with it.
259
00:10:25,681 --> 00:10:28,681
You remove the risk and you're
working with certainties.
260
00:10:28,731 --> 00:10:30,831
for me, when I look at it,
it's very straightforward.
261
00:10:30,861 --> 00:10:32,961
Everybody is going to
graduate at some point.
262
00:10:33,021 --> 00:10:36,921
The question is when, so you're not
gambling because there's gonna be a death
263
00:10:36,921 --> 00:10:40,461
benefit payout and you're gonna have
access to that cash value the entire time.
264
00:10:40,791 --> 00:10:42,441
The real question is when does it happen?
265
00:10:42,741 --> 00:10:45,591
And so it separates the whole
life really from the term, 'cause
266
00:10:45,591 --> 00:10:48,861
that kind of gets mixed in there
sometimes too, is the rent versus own.
267
00:10:49,251 --> 00:10:52,221
So you're still not even gambling
with term life insurance.
268
00:10:52,221 --> 00:10:54,741
It's just temporary coverage is
the biggest difference with this.
269
00:10:54,741 --> 00:10:58,581
It's permanent and you know that if
you go down this road, all that capital
270
00:10:58,581 --> 00:11:02,491
or premium that you're putting into
here, it's going to, pay out, through
271
00:11:02,491 --> 00:11:05,761
the death benefit multiple times that
over eventually when you do pass.
272
00:11:06,106 --> 00:11:08,896
And if you do this long term and it's
around long enough, you're gonna have
273
00:11:08,896 --> 00:11:12,736
access to multiple times what you put
it in premium, in the cash value side.
274
00:11:12,946 --> 00:11:14,446
And so there's no gambling involved here.
275
00:11:14,446 --> 00:11:16,966
'cause you have a hundred percent access
to that capital while you're alive.
276
00:11:17,176 --> 00:11:20,536
And your beneficiaries will get, multiples
of that on the death benefit side.
277
00:11:20,566 --> 00:11:21,886
that's how I think about it.
278
00:11:22,340 --> 00:11:22,580
Absolutely.
279
00:11:22,913 --> 00:11:27,293
On the NNI course when we're talking
about the solution and we start talking
280
00:11:27,293 --> 00:11:32,363
about insurance, they do a pretty big,
deep dive into insurance, starting with
281
00:11:32,363 --> 00:11:38,013
term and advancing into whole life, and
then covering other products that, some
282
00:11:38,013 --> 00:11:43,423
people may think are suitable for IBC,
you can use 'em, but they're not the ideal
283
00:11:43,423 --> 00:11:45,563
product is, what we're gonna get at here.
284
00:11:45,953 --> 00:11:50,063
the biggest thing with whole life is
the living benefit of the insurance, and
285
00:11:50,063 --> 00:11:52,343
that's where we get the banking function.
286
00:11:52,403 --> 00:11:53,923
so we'll, start talking about that.
287
00:11:53,923 --> 00:11:55,813
It's more applicable then you,
288
00:11:55,853 --> 00:12:00,623
If you get into insurance and various
things and policies and designs
289
00:12:00,623 --> 00:12:02,333
and functions and what each one do.
290
00:12:02,828 --> 00:12:05,168
I mean, it'd be, it'd be
darn near a college course.
291
00:12:05,168 --> 00:12:07,848
So it's like, we'll just glaze over that.
292
00:12:07,848 --> 00:12:11,148
But they do teach us is the biggest
thing they do teach us where it all
293
00:12:11,148 --> 00:12:14,268
comes from, how it all is designed,
how it works, how it functions.
294
00:12:14,568 --> 00:12:18,858
It's just not really applicable to the
end user who are, who are audience is.
295
00:12:18,918 --> 00:12:22,178
So, so on to the, living benefits.
296
00:12:22,278 --> 00:12:24,708
we're using cash value to do.
297
00:12:25,558 --> 00:12:28,138
personalized privatized
banking function in our life.
298
00:12:28,258 --> 00:12:31,138
So it's like, okay,
well what is cash value?
299
00:12:31,278 --> 00:12:34,218
this is a really, really boring
description in my opinion,
300
00:12:34,458 --> 00:12:35,748
so we'll dumb it down after.
301
00:12:35,928 --> 00:12:39,138
But just so everybody knows,
the cash value is the actuarily
302
00:12:39,288 --> 00:12:43,368
expected, present, discounted value
of the future death benefit, minus
303
00:12:43,368 --> 00:12:45,468
remaining premiums that aren't paid.
304
00:12:46,233 --> 00:12:50,133
I don't know how many times I heard that
through the NNI course, I can still still
305
00:12:50,133 --> 00:12:52,213
see, Murphy saying it every single time.
306
00:12:52,213 --> 00:12:52,753
It's so funny.
307
00:12:52,993 --> 00:12:56,533
But anyhow, to dumb it down,
it's the, it's the present value
308
00:12:56,533 --> 00:12:58,393
of your future death benefit.
309
00:12:58,883 --> 00:12:59,273
absolutely.
310
00:12:59,303 --> 00:12:59,783
Let me, I'm gonna
311
00:12:59,815 --> 00:13:00,055
Okay.
312
00:13:00,173 --> 00:13:00,863
real quick 'cause I didn't
313
00:13:01,105 --> 00:13:01,495
Oh, yeah.
314
00:13:01,555 --> 00:13:01,885
Yep.
315
00:13:02,008 --> 00:13:02,333
No, no, no
316
00:13:02,455 --> 00:13:02,905
Yeah, no.
317
00:13:03,083 --> 00:13:06,173
thing I just wanted to talk about was
when we look at the whole life policy
318
00:13:06,173 --> 00:13:09,053
and how these things are labeled, I
think a lot of people, and we talked
319
00:13:09,053 --> 00:13:11,393
about this before, and they talked
about in the course from the seventies,
320
00:13:11,603 --> 00:13:14,723
that when they hear whole life, there's
this knee jerk reaction and people
321
00:13:14,723 --> 00:13:15,863
are, oh, I'm staying away from that.
322
00:13:15,863 --> 00:13:16,703
That's a bad product.
323
00:13:17,453 --> 00:13:20,243
we could actually relabel this thing
and call it what it is, which is
324
00:13:20,243 --> 00:13:23,963
a capital storage vehicle with the
added bonus of of a death benefit, I
325
00:13:23,963 --> 00:13:27,503
think people would actually jump on
board with this and really go forward.
326
00:13:27,713 --> 00:13:29,273
But the problem is we're
not gonna relabel it.
327
00:13:29,303 --> 00:13:30,053
It is what it is.
328
00:13:30,053 --> 00:13:33,533
The industry has these standards, but
conceptually, if you think about it that
329
00:13:33,533 --> 00:13:36,623
way, I think it helps a lot of people
understand what they actually have there.
330
00:13:37,043 --> 00:13:39,683
And then moving on to the, what you
just talked about, the cash value.
331
00:13:39,683 --> 00:13:40,403
It's very simple.
332
00:13:40,403 --> 00:13:41,223
The way I look at this is.
333
00:13:42,008 --> 00:13:43,568
If you were to go, you
know what, I'm done.
334
00:13:43,568 --> 00:13:46,778
IB C isn't for me, or this whole life
policy, I wanna walk away right now.
335
00:13:46,958 --> 00:13:50,798
It's what the company would actually give
you to walk away or surrender the policy.
336
00:13:51,008 --> 00:13:53,678
And if you think about it, they're
on the hook right now to pay you
337
00:13:53,678 --> 00:13:55,448
a huge sum of money down the road.
338
00:13:56,318 --> 00:13:57,908
Compared to the premiums that you put in.
339
00:13:58,208 --> 00:14:00,788
But you're saying, Hey, if I were to
walk, if you were to walk away right now,
340
00:14:00,788 --> 00:14:01,988
this is what the company would give you.
341
00:14:01,988 --> 00:14:04,118
And they wouldn't have that
massive obligation down the road.
342
00:14:04,298 --> 00:14:07,718
Now the company, the life insurance
company, does not want you to do that.
343
00:14:07,718 --> 00:14:08,828
It's not in their best interest.
344
00:14:08,828 --> 00:14:11,798
It's not in your best interest, but
conceptually, it's a very easy way
345
00:14:11,798 --> 00:14:13,423
to think about it so you understand
what you actually have there.
346
00:14:13,941 --> 00:14:16,516
So what do they do to get
you to not surrender the.
347
00:14:17,429 --> 00:14:20,849
Well, the irony, the irony is
these policies are really, really
348
00:14:20,849 --> 00:14:24,959
efficient, and if you are going to
surrender it, it's not gonna go away.
349
00:14:25,109 --> 00:14:27,779
What's actually gonna happen is there's
a secondary market and somebody will
350
00:14:27,779 --> 00:14:31,369
actually go out there and buy that
policy and people do this all the time.
351
00:14:31,369 --> 00:14:33,349
And the life insurance companies
don't like that as well.
352
00:14:33,349 --> 00:14:36,079
So when you actually apply, if you look,
they look at Viatical settlements and they
353
00:14:36,079 --> 00:14:39,079
go, Hey, do you have any kind of plans to
sell this policy or anything like that?
354
00:14:39,499 --> 00:14:42,019
The company doesn't want you to do it,
but there was a secondary market for it.
355
00:14:42,019 --> 00:14:44,419
I just throw that out there so people
kind of understand what's going on.
356
00:14:44,479 --> 00:14:48,649
And my point is this, if these, if these
policies were so poor, why would there
357
00:14:48,649 --> 00:14:51,769
be a secondary market where people wanted
to buy them and keep them in force?
358
00:14:51,769 --> 00:14:53,419
'cause they knew what it
was gonna pay out later on.
359
00:14:53,659 --> 00:14:56,059
So just think about that, you
know, there, there's a reason why
360
00:14:56,181 --> 00:14:56,451
Yeah.
361
00:14:56,479 --> 00:14:58,129
aren't just surrendered and
they don't just go away.
362
00:14:58,881 --> 00:14:59,241
Right.
363
00:14:59,751 --> 00:15:04,041
So speaking of surrenders, one thing
that's a characteristic of a whole life
364
00:15:04,041 --> 00:15:07,251
policy, the living benefit, this is
where this comes in on the cash value.
365
00:15:07,761 --> 00:15:13,121
the policy loan function is there
originally, to keep people from
366
00:15:13,121 --> 00:15:15,491
surrendering their policies when
they come across hard times.
367
00:15:15,491 --> 00:15:19,271
It's, it's a way of the insurance
company saying, okay, hey, instead of
368
00:15:19,271 --> 00:15:24,201
getting rid of this or doing anything, to
surrender it, what if we made you a loan
369
00:15:24,201 --> 00:15:26,061
against it and used it as collateral?
370
00:15:26,821 --> 00:15:30,481
the only way I would describe it as
genius on their part 'cause they're
371
00:15:30,521 --> 00:15:37,421
collateralizing the debt with a policy
that they are guaranteed to pay at some
372
00:15:37,421 --> 00:15:44,381
point in time, whether it's tomorrow,
the next day or age 1 21 in the us.
373
00:15:44,501 --> 00:15:49,351
speaking of 1 21, just A brief
point, your cash value and your
374
00:15:49,351 --> 00:15:51,931
death benefit will reach each other.
375
00:15:51,931 --> 00:15:54,661
They will equal each other at age 1 21.
376
00:15:54,931 --> 00:15:57,661
whether it's just a plain
vanilla whole life policy or
377
00:15:57,661 --> 00:15:59,041
you're using riders or anything
378
00:15:59,041 --> 00:16:00,241
so there's a few things here.
379
00:16:00,241 --> 00:16:02,881
We're assuming we're in the US and
that's typically where it happens.
380
00:16:02,881 --> 00:16:05,281
If you look at older policies
during endowed sooner.
381
00:16:05,281 --> 00:16:06,841
So first is the term endowment.
382
00:16:06,841 --> 00:16:07,981
We've talked about this before.
383
00:16:07,981 --> 00:16:09,451
It's simply where the death benefit.
384
00:16:09,811 --> 00:16:13,591
Cash value will equal what we
do with the dividends as they
385
00:16:13,591 --> 00:16:15,121
come in, which we buy more PUA.
386
00:16:15,121 --> 00:16:17,281
And what that's doing is
raising the death benefit.
387
00:16:17,701 --> 00:16:19,951
And if you think about it,
the death benefit is a leader.
388
00:16:19,951 --> 00:16:22,921
The cash value's, the follower,
and the cash value will equal
389
00:16:22,921 --> 00:16:24,241
that death benefit at 1 21.
390
00:16:24,241 --> 00:16:26,941
Here in the us with most carriers,
there's always exceptions to the role.
391
00:16:26,941 --> 00:16:28,021
So that's why I say most.
392
00:16:28,491 --> 00:16:32,661
But I just wanna be very clear, even if
you don't use a dividends of PUA, and
393
00:16:32,661 --> 00:16:37,141
even if you have just a straight base
policy at 1 21, that death benefit and
394
00:16:37,141 --> 00:16:39,361
the cash value will equal the benefit.
395
00:16:39,361 --> 00:16:42,301
The way we do it is we buy more
death benefit with the dividends.
396
00:16:42,301 --> 00:16:45,691
So because the death benefit is
higher, the cash value is a follower,
397
00:16:45,691 --> 00:16:48,211
it's gonna have to get bigger and
bigger, bigger to eventually catch it.
398
00:16:48,211 --> 00:16:49,861
That's kind of conceptually
how to look at it.
399
00:16:50,326 --> 00:16:52,546
And then a really, really quick
side note, we have the mec, which
400
00:16:52,546 --> 00:16:54,226
is a modified endowment contract.
401
00:16:54,346 --> 00:16:57,676
All that means is that the death benefit
and the cash value are gonna equal
402
00:16:57,676 --> 00:17:01,846
each other at some point, pre 1 21,
and that's where we have the tax issue.
403
00:17:01,846 --> 00:17:03,511
So that's why we build the
policies the way we do.
404
00:17:03,872 --> 00:17:04,192
Gotcha.
405
00:17:04,652 --> 00:17:08,922
Yeah, and we'll get into that on, the next
one that I do with the implementation.
406
00:17:08,922 --> 00:17:10,452
So good point there.
407
00:17:10,852 --> 00:17:14,152
back to the policy loans, it's the
safest bet for the insurance company.
408
00:17:14,392 --> 00:17:18,202
It's not necessarily, I wouldn't say
like the financially best thing for
409
00:17:18,202 --> 00:17:21,712
the insurance company because the
cash flow isn't a certainty form.
410
00:17:21,892 --> 00:17:24,672
There's no structured repayment,
plan or anything like that.
411
00:17:25,337 --> 00:17:27,227
the policy holder may pay the debt back.
412
00:17:27,227 --> 00:17:28,757
They may not the loan rather.
413
00:17:29,147 --> 00:17:35,207
so while it might not be in the company's
financial best interest, it's from a
414
00:17:35,207 --> 00:17:40,997
cashflow standpoint, it's a safe loan
because they're gonna pay it anyway and
415
00:17:40,997 --> 00:17:45,227
they'll just subtract whatever's owed
plus any interest off the death benefit
416
00:17:45,227 --> 00:17:46,697
when they pay it to the beneficiary.
417
00:17:47,067 --> 00:17:52,707
the only other point to make on there
is while practicing IBC, it's important
418
00:17:52,707 --> 00:17:58,227
that we pay the loans back because
then the company does better twofold.
419
00:17:58,617 --> 00:18:02,637
One, they have that money available to
put into other stuff in their portfolio
420
00:18:02,787 --> 00:18:04,257
that makes your dividends bigger.
421
00:18:04,257 --> 00:18:08,067
Bigger dividends equals more PUA
more PUA means more cash value.
422
00:18:08,397 --> 00:18:11,067
So it's just kind of a small point.
423
00:18:11,622 --> 00:18:14,292
Inside everything that's going on.
424
00:18:14,352 --> 00:18:17,202
the main point is it is a safe
bet for the insurance company.
425
00:18:17,202 --> 00:18:19,572
Is is kind of where it all leads back to.
426
00:18:19,924 --> 00:18:21,424
I think real quick, a couple things
427
00:18:21,461 --> 00:18:21,681
yep.
428
00:18:22,046 --> 00:18:22,076
I.
429
00:18:22,144 --> 00:18:24,274
you look at the insurance companies,
the amount of people that are actually
430
00:18:24,274 --> 00:18:27,094
taking loans, it's usually single
percentages is what you're looking at.
431
00:18:27,094 --> 00:18:27,424
So.
432
00:18:28,239 --> 00:18:30,429
of people when they have these
policies, they're not necessarily
433
00:18:30,429 --> 00:18:31,449
practicing infinite banking.
434
00:18:31,449 --> 00:18:34,529
They just have a whole life policy
in force and some people don't even
435
00:18:34,529 --> 00:18:36,599
realize that they can even take
loans against their cash value.
436
00:18:36,599 --> 00:18:40,469
So that's one thing to note there,
realize that as all these premiums
437
00:18:40,469 --> 00:18:44,489
come in the company, the insurance
company that is, they have an obligation
438
00:18:44,489 --> 00:18:45,749
to pay out these death benefits.
439
00:18:45,749 --> 00:18:47,999
And so they have to have that
money and put it to work.
440
00:18:48,059 --> 00:18:51,119
And they're very savvy when they do
this and they have the actuaries and
441
00:18:51,119 --> 00:18:53,189
all their people in the back shops
and they figure out where are we gonna
442
00:18:53,189 --> 00:18:55,979
make this money work so we can pay
our death benefits and be profitable?
443
00:18:56,214 --> 00:18:58,494
And profitable, meaning they're
also paying out dividends to you.
444
00:18:58,524 --> 00:19:00,234
'cause it's a mutual
company, which is great.
445
00:19:00,654 --> 00:19:04,524
But you said, the big thing is with the
loans, it's actually the safest place
446
00:19:04,524 --> 00:19:06,954
they can loan it out because one of three
things that's gonna happen, you're gonna
447
00:19:06,954 --> 00:19:09,894
surrender the policy, you're gonna pass
away, you're gonna pay back that loan.
448
00:19:09,924 --> 00:19:12,864
So they know for a fact they're
getting that money back with interest.
449
00:19:13,194 --> 00:19:16,044
But like you alluded to, and it's the
biggest thing, they just don't know when.
450
00:19:16,314 --> 00:19:18,954
When they do these other investments,
they know when they're gonna get it back.
451
00:19:19,014 --> 00:19:21,474
But there's still a slight element
of risk with those other things
452
00:19:21,474 --> 00:19:22,524
compared to this other side.
453
00:19:22,524 --> 00:19:24,624
'cause it's a hundred percent guarantee
they're gonna be made whole on it.
454
00:19:25,349 --> 00:19:26,549
it's a trade off with all of it.
455
00:19:26,829 --> 00:19:28,629
but like you mentioned, the reason why
they're doing it is they don't want
456
00:19:28,629 --> 00:19:29,949
people to surrender these policies.
457
00:19:29,949 --> 00:19:31,179
And we've done history stuff on this.
458
00:19:31,179 --> 00:19:34,299
I don't wanna go down too far into
that, but the big thing for us
459
00:19:34,299 --> 00:19:37,839
is we have an unstructured loan
for us on our end, and it puts us
460
00:19:37,839 --> 00:19:41,019
in a very, very strong financial
position to do what we want to do.
461
00:19:41,019 --> 00:19:41,804
This is why we use this vehicle.
462
00:19:43,196 --> 00:19:43,416
Yep.
463
00:19:43,620 --> 00:19:49,700
so speaking of, returns and risks,
There's, people out there that would think
464
00:19:49,700 --> 00:19:51,770
like, oh, we can do IBC with other stuff.
465
00:19:51,770 --> 00:19:56,080
And I mean, the truth is that you
can, but there's risks and it goes
466
00:19:56,080 --> 00:19:57,670
back to that whole transfer of risk.
467
00:19:57,670 --> 00:20:00,970
We wanna transfer as much risk
off of us as we can and take
468
00:20:00,970 --> 00:20:02,530
as many guarantees as we can.
469
00:20:02,900 --> 00:20:08,630
you'll see people use I Ls or uls
or security back line of credit.
470
00:20:08,700 --> 00:20:09,780
there's any slew of things.
471
00:20:09,780 --> 00:20:12,060
I guess you use a HELOC
too, if you wanted to.
472
00:20:12,450 --> 00:20:15,980
but there's risks associated with that.
473
00:20:15,980 --> 00:20:19,690
Just one example, with an IUL,
going back to your remark about
474
00:20:19,690 --> 00:20:23,950
the seventies, there was some
consumer reports more specifically.
475
00:20:24,040 --> 00:20:25,120
One that.
476
00:20:26,120 --> 00:20:30,110
attacked whole life as it was too
complicated and there's no way for
477
00:20:30,110 --> 00:20:32,090
the consumer to know what's going on.
478
00:20:32,090 --> 00:20:36,170
So ironically, they developed
a new thing called IUL and
479
00:20:36,170 --> 00:20:37,610
Index Universal Life Policy.
480
00:20:37,700 --> 00:20:41,210
And what it was meant to do was
basically unbundle a whole life policy.
481
00:20:41,390 --> 00:20:46,460
So it is a insurance policy and
an investment vehicle separate
482
00:20:46,460 --> 00:20:50,000
from each other, or to show how
it was separate from each other.
483
00:20:50,570 --> 00:20:55,670
How they had to do it is you basically
have a one year renewing term policy
484
00:20:55,880 --> 00:21:00,890
so that you can show yearly or
annually what the insurance cost is.
485
00:21:01,385 --> 00:21:06,485
To the policy versus what part of the
premium is going to the savings portion.
486
00:21:06,845 --> 00:21:13,095
The problem with that is as every year
goes by your term policy, your renewable
487
00:21:13,095 --> 00:21:18,225
term costs more as you get older because
your risk of graduating is that much
488
00:21:18,255 --> 00:21:23,655
higher, and eventually, if you didn't
put enough in, it's gonna start coming
489
00:21:23,655 --> 00:21:27,555
off the investment side and it's just
going to eat up on the, on the premium
490
00:21:27,555 --> 00:21:30,165
side for, for the insurance policy.
491
00:21:30,780 --> 00:21:34,880
Essentially what happened was
they put risk back on the policy
492
00:21:35,030 --> 00:21:37,040
holder, and we don't want that.
493
00:21:37,090 --> 00:21:40,600
we want as much risk to leave
us and as much guarantee to
494
00:21:40,600 --> 00:21:42,490
come to us as we possibly can.
495
00:21:42,800 --> 00:21:43,735
we've touched on.
496
00:21:44,415 --> 00:21:47,565
Security backed line of credit,
HELOCs, stuff like that.
497
00:21:47,915 --> 00:21:51,045
essentially, what it comes down
to is you're taking risk and
498
00:21:51,045 --> 00:21:54,435
moving it back onto yourself, and
you're taking away guarantees,
499
00:21:54,435 --> 00:21:55,635
which is what we don't want to do.
500
00:21:56,115 --> 00:22:00,765
after we do that, then we can concentrate
more on the living benefits of whole life.
501
00:22:00,835 --> 00:22:03,595
and that's where we get into the
cash value loans and stuff like that.
502
00:22:04,265 --> 00:22:05,675
I ended up doing a little
bit of research on this.
503
00:22:05,675 --> 00:22:07,955
'cause people always wanna hear numbers,
they wanna hear real life stuff.
504
00:22:07,955 --> 00:22:09,035
So first the numbers.
505
00:22:09,365 --> 00:22:12,095
I looked at this through the Life
Insurance Consumer Advocacy Center.
506
00:22:12,095 --> 00:22:12,875
this was interesting.
507
00:22:13,205 --> 00:22:15,875
88% of universal life fail to pay a death.
508
00:22:16,715 --> 00:22:19,415
that somebody surrendered or they
walked away from the policy and
509
00:22:19,415 --> 00:22:22,025
it's because of what you talked
about, the term gets too expensive.
510
00:22:22,265 --> 00:22:23,525
There's also a ton of assumptions.
511
00:22:23,525 --> 00:22:26,585
If you look at a typical universal
contract versus a whole life contract,
512
00:22:26,585 --> 00:22:27,905
they're about three times as long.
513
00:22:27,905 --> 00:22:29,705
'cause it's all the
assumptions and stuff going on.
514
00:22:30,455 --> 00:22:33,005
then to your point, even with the
seventies when they were looking at
515
00:22:33,005 --> 00:22:36,365
this and the numbers and separating it,
if you remember interest rates and the
516
00:22:36,365 --> 00:22:38,615
returns were absolutely insane back then.
517
00:22:38,705 --> 00:22:41,495
And so those numbers theoretically
could have supported.
518
00:22:42,300 --> 00:22:45,360
the cost of the term down the road,
but obviously that didn't keep up.
519
00:22:45,360 --> 00:22:48,810
And so with those numbers not keeping
up the cost of term just outweighed what
520
00:22:48,810 --> 00:22:51,210
those side funds were basically doing.
521
00:22:51,480 --> 00:22:55,280
And there's a point in the book as well
where, Nelson Nash talks about he just
522
00:22:55,280 --> 00:22:57,920
is basically when people get into their
late sixties, early seventies, he thinks
523
00:22:57,920 --> 00:23:00,710
just fall apart because the numbers,
the cost of the term just runs away.
524
00:23:01,430 --> 00:23:05,900
to be fair, look at whole life and
they said the big issue actually with
525
00:23:05,900 --> 00:23:07,670
whole life is lapse rates early on.
526
00:23:08,525 --> 00:23:10,025
so this is outside of IBC.
527
00:23:10,025 --> 00:23:11,045
This is all whole life.
528
00:23:11,045 --> 00:23:15,135
It's typically 15% in the first five
years they lapse, another source
529
00:23:15,135 --> 00:23:17,115
quoted 25% in the first five years.
530
00:23:17,115 --> 00:23:19,155
So it kind of depends what I would say.
531
00:23:19,395 --> 00:23:22,785
The biggest problem is there is that
people are not educated properly
532
00:23:22,785 --> 00:23:25,275
and they don't know what they have
and they're very shortsighted.
533
00:23:25,415 --> 00:23:27,845
Now, on the IBC side, those
numbers are very different.
534
00:23:28,115 --> 00:23:30,485
The people that are actually properly
educated, they know what's going on.
535
00:23:30,515 --> 00:23:33,905
Those policies are staying in enforce,
so not anywhere close to that number.
536
00:23:34,085 --> 00:23:36,605
So it's just people that don't really
understand what they have there.
537
00:23:36,995 --> 00:23:38,945
And so that's why we do these podcasts.
538
00:23:38,945 --> 00:23:41,685
We talk to people, we make sure
people read the book before we even
539
00:23:41,685 --> 00:23:45,225
get started because if you have a
tool and you don't know how it works,
540
00:23:45,225 --> 00:23:46,545
you're gonna get yourself in trouble.
541
00:23:46,545 --> 00:23:49,485
And these people got themselves in trouble
by not understanding what they had.
542
00:23:49,905 --> 00:23:52,880
But I wanted to bring this back
home 'cause I think it will
543
00:23:53,089 --> 00:23:54,029
strike a chord with people.
544
00:23:54,029 --> 00:23:56,189
So both my parents had
universal life policies.
545
00:23:56,594 --> 00:24:01,034
My father passed away very unexpectedly,
a couple years back at the age of 69.
546
00:24:01,034 --> 00:24:02,114
And it did pay out.
547
00:24:02,504 --> 00:24:05,054
And quite honestly, the reason why
it paid out is 'cause he was young.
548
00:24:05,084 --> 00:24:06,704
And I don't think that's
a good game plan to have.
549
00:24:06,704 --> 00:24:08,474
Like I'm gonna die early
enough so this will work.
550
00:24:08,804 --> 00:24:11,684
My mom now is in her early seventies
and I actually just got a letter in
551
00:24:11,684 --> 00:24:13,484
the mail and it's a small policy.
552
00:24:13,484 --> 00:24:15,824
I'm probably gonna let it go 'cause
it's not gonna make sense anymore.
553
00:24:15,824 --> 00:24:19,199
And it basically said if you do nothing,
the policy is gonna expire this fall.
554
00:24:19,859 --> 00:24:22,199
If you do pay the expected
premium, though, it's only
555
00:24:22,199 --> 00:24:23,669
gonna last for one extra year.
556
00:24:23,669 --> 00:24:26,369
And then I'm gonna be forced to
pay additional premium on what
557
00:24:26,369 --> 00:24:30,029
the actual expectations were when
this policy was first set up.
558
00:24:30,089 --> 00:24:33,289
And what that tells me is the side
funder, is not keeping up with the
559
00:24:33,289 --> 00:24:35,119
cost of term insurance that's going up.
560
00:24:35,359 --> 00:24:38,419
Now, ironically, if she would've put
that same premium into a whole life
561
00:24:38,419 --> 00:24:41,599
policy, not only would it be there,
and if it was designed the way we do
562
00:24:41,599 --> 00:24:45,169
it, she would've had more death benefit
and the cost would've been going down.
563
00:24:45,569 --> 00:24:49,169
So it just kind of shows you how
this works you gotta think long term
564
00:24:49,169 --> 00:24:49,979
and understand what you're doing.
565
00:24:49,979 --> 00:24:51,119
A universal policy.
566
00:24:51,119 --> 00:24:51,359
Yes.
567
00:24:51,359 --> 00:24:53,549
In the beginning it may look like
it's outperforming the whole life.
568
00:24:53,549 --> 00:24:56,639
I'm not gonna argue that, but it's a
long term where we always constantly
569
00:24:56,639 --> 00:24:57,449
went out with the whole life.
570
00:24:57,449 --> 00:24:58,559
It's kind of the tortoise and the hare.
571
00:24:58,589 --> 00:24:59,939
It's that same type of mentality.
572
00:25:00,216 --> 00:25:04,091
Funny you mentioned the whole, lapse rate
on whole life policies in the beginning.
573
00:25:04,421 --> 00:25:07,606
I remember back when I got mine
and I knew nothing about IBC.
574
00:25:07,606 --> 00:25:07,996
All I knew is that.
575
00:25:09,136 --> 00:25:10,396
You know, it's a whole life policy.
576
00:25:10,396 --> 00:25:13,576
It stays with me forever, and it has
a cash value function to it that I
577
00:25:13,576 --> 00:25:14,926
have no idea what I'm gonna do with.
578
00:25:15,556 --> 00:25:20,596
But, I'm paying, quite a bit of money,
especially back then at the time, relative
579
00:25:20,596 --> 00:25:26,826
to what I was making, I think I called
the agent two or three times probably.
580
00:25:26,826 --> 00:25:28,596
It was like, again, like,
why am I doing this?
581
00:25:28,596 --> 00:25:31,716
And he wasn't an IBC practitioner
or anything, but I was like, should
582
00:25:31,716 --> 00:25:32,706
I be doing something different?
583
00:25:32,706 --> 00:25:33,246
And he's like, no, no, no.
584
00:25:33,366 --> 00:25:34,086
Stay the course.
585
00:25:34,136 --> 00:25:34,796
to his credit.
586
00:25:35,359 --> 00:25:39,419
He was saying look down the road, look
in your retirement years, what you have.
587
00:25:39,449 --> 00:25:39,749
You know?
588
00:25:39,749 --> 00:25:42,929
And it's like, well,
yeah, but I could do this.
589
00:25:42,929 --> 00:25:46,799
And you know, he did do a good
job at keeping me on track.
590
00:25:46,799 --> 00:25:51,269
And I still have those policies and
now I use them basically as my own
591
00:25:51,269 --> 00:25:53,309
privatized bank for certain things.
592
00:25:53,567 --> 00:25:54,857
I almost did it though.
593
00:25:54,917 --> 00:25:58,697
I almost did it, and then I, if I
would've did that, I probably wouldn't
594
00:25:58,697 --> 00:26:01,592
be here now either with, two more
policies because I would've just been
595
00:26:01,592 --> 00:26:02,822
like, yeah, I already did that once.
596
00:26:02,822 --> 00:26:03,782
I'm not doing it again.
597
00:26:04,015 --> 00:26:05,065
Real quick 'cause it makes me think of it.
598
00:26:05,065 --> 00:26:07,945
A lot of PI people, and we were talking
about this before we jumped on, that
599
00:26:07,945 --> 00:26:10,465
you might have a client that's gonna
be looking at getting stuff on his kids
600
00:26:10,465 --> 00:26:13,525
before you pass that policy onto your kid,
make sure they understand what they have.
601
00:26:13,555 --> 00:26:14,905
'cause you don't want them
to do something silly.
602
00:26:14,905 --> 00:26:16,105
I've heard that happen before.
603
00:26:16,555 --> 00:26:18,205
And the other thing is
too, with these numbers.
604
00:26:18,450 --> 00:26:19,620
Keep in mind these numbers.
605
00:26:19,620 --> 00:26:22,380
This is taking into account stuff that
happened in the seventies when a lot
606
00:26:22,380 --> 00:26:25,740
of people did 10 35 exchanges or just
completely surrendered their policies.
607
00:26:25,920 --> 00:26:27,930
So that's hurting the whole
life argument as well.
608
00:26:28,110 --> 00:26:30,750
But at the end of the day, it's really
important no matter what you're doing,
609
00:26:30,750 --> 00:26:32,160
understand what you're getting into.
610
00:26:32,160 --> 00:26:34,080
And once you understand it,
I think you're gonna be very
611
00:26:34,080 --> 00:26:35,610
happy and keep what you have.
612
00:26:35,640 --> 00:26:38,520
But if you go in and you're not sure
you haven't read the book, of course
613
00:26:38,520 --> 00:26:40,245
you're gonna have questions 'cause
you're, you haven't been educated.
614
00:26:40,885 --> 00:26:42,535
So, kind of back to our outline here.
615
00:26:42,585 --> 00:26:45,555
we're talking about insurance, the
solution how to build policies,
616
00:26:45,555 --> 00:26:49,515
how insurance comes to be, and
then specifically, why do you We
617
00:26:49,515 --> 00:26:54,355
use whole life as our, means to do
privatized banking in our household.
618
00:26:54,805 --> 00:26:57,555
Nelson says there's one pool
of money you can't create it.
619
00:26:57,615 --> 00:26:59,175
Well, we can't create it.
620
00:26:59,415 --> 00:27:00,765
There's only one pool of money out there.
621
00:27:00,765 --> 00:27:02,665
It's just like water, It flows.
622
00:27:02,665 --> 00:27:03,835
it comes and goes.
623
00:27:03,835 --> 00:27:05,235
you spend it, you earn it.
624
00:27:05,545 --> 00:27:07,225
it has to reside somewhere.
625
00:27:08,425 --> 00:27:11,575
we're saying, why don't we put it
somewhere where it's guaranteed to grow
626
00:27:11,635 --> 00:27:13,445
and then, we can borrow against it.
627
00:27:13,445 --> 00:27:17,850
But even while it's there, the living
benefit of being able to use it.
628
00:27:18,935 --> 00:27:21,485
It's still growing
contractually in the background.
629
00:27:21,785 --> 00:27:26,825
And one important point there is it's
doing this because it's not your money,
630
00:27:26,855 --> 00:27:28,685
it's the insurance company's money.
631
00:27:29,285 --> 00:27:32,315
You are borrowing the insurance
company's money and it's being
632
00:27:32,315 --> 00:27:34,955
collateralized with your death benefit.
633
00:27:34,985 --> 00:27:39,415
So I know a lot of people, we get into
myths and misconceptions, as well in the
634
00:27:39,415 --> 00:27:43,615
NNI course, one big one is that you're
borrowing money from your policy or
635
00:27:43,615 --> 00:27:45,085
not borrowing money from your policy.
636
00:27:45,085 --> 00:27:47,995
You're borrowing it from the insurance
company, from premiums that they're
637
00:27:47,995 --> 00:27:51,685
taking in today, and they're putting
them to work with you instead of
638
00:27:51,685 --> 00:27:53,365
putting 'em to work somewhere else.
639
00:27:53,750 --> 00:27:57,250
that's ultimately to be able to
pay death benefits down the road.
640
00:27:57,490 --> 00:28:00,560
So, just a side point, but an
important point nonetheless.
641
00:28:00,890 --> 00:28:06,730
so what, what we're looking at then is
being able to borrow against our policy.
642
00:28:07,390 --> 00:28:11,560
We do that in order to recapture
interest that we're paying out to other
643
00:28:11,830 --> 00:28:14,080
financial institutions or other people.
644
00:28:14,140 --> 00:28:16,450
you're gonna borrow money regardless.
645
00:28:16,500 --> 00:28:18,600
you're either gonna borrow money
from your own bank account or you're
646
00:28:18,600 --> 00:28:19,890
gonna borrow it from somebody else.
647
00:28:19,890 --> 00:28:23,560
If you do it in a traditional banking
sense, by borrowing it from yourself
648
00:28:23,560 --> 00:28:28,090
inside of a whole life policy, you're
continuing that contractual growth.
649
00:28:28,495 --> 00:28:32,455
Uninterrupted compounding interest
until the benefit is paid out,
650
00:28:32,455 --> 00:28:33,715
until the death benefit's paid out.
651
00:28:34,185 --> 00:28:36,045
you're not creating money from nothing.
652
00:28:36,045 --> 00:28:40,245
some people will be like, oh, you're
essentially getting this car or TV
653
00:28:40,245 --> 00:28:44,805
for free because you're, you're using
money that you're already gonna use.
654
00:28:44,805 --> 00:28:45,585
no, you're not.
655
00:28:45,975 --> 00:28:47,325
We don't, we can't create money.
656
00:28:47,325 --> 00:28:48,735
The insurance company can't create money.
657
00:28:48,735 --> 00:28:49,635
The bank can create money.
658
00:28:50,155 --> 00:28:53,395
Which causes inflation, but we
are not creating money and you're
659
00:28:53,395 --> 00:28:54,685
not getting anything for free.
660
00:28:54,695 --> 00:28:58,265
you're moving where the cost of
it is coming from and keeping
661
00:28:58,295 --> 00:29:02,915
that interest or that compounding
growth in your own personal system
662
00:29:02,915 --> 00:29:04,775
forever and ever until it pays out.
663
00:29:05,405 --> 00:29:08,075
I think that was great and you kind
of alluded to it, but I just want
664
00:29:08,075 --> 00:29:09,575
to touch on it just for a second.
665
00:29:09,575 --> 00:29:12,395
All this is contingent on being
an honest banker, so you have to
666
00:29:12,482 --> 00:29:12,872
Yeah.
667
00:29:12,905 --> 00:29:14,375
plan to pay back the loans.
668
00:29:14,375 --> 00:29:17,865
If you look at this as a piggy bank
that you were just going to raid
669
00:29:17,865 --> 00:29:21,015
and never have a plan to pay it
back, then this is gonna fall apart.
670
00:29:21,105 --> 00:29:23,925
And so that's why at the beginning of
the book, Nelson spends all that time on
671
00:29:23,925 --> 00:29:25,455
the human factors and what goes into it.
672
00:29:25,665 --> 00:29:28,605
But this all works as long as
you actually play on a banker.
673
00:29:28,975 --> 00:29:29,275
Yep.
674
00:29:29,365 --> 00:29:30,415
Yeah, exactly.
675
00:29:30,415 --> 00:29:32,215
Back into the problem section.
676
00:29:32,635 --> 00:29:36,715
It the human element is also the problem
and it assumes that we take care of that
677
00:29:36,715 --> 00:29:41,185
or crush those human elements to make all
this function, which you need to anyway.
678
00:29:41,185 --> 00:29:43,345
I mean, you'd have to do that in
your own personal world anyway.
679
00:29:43,345 --> 00:29:45,835
'cause you gotta build a bank,
you gotta build a savings account.
680
00:29:45,835 --> 00:29:47,185
So we're just keeping it.
681
00:29:47,875 --> 00:29:48,265
Our own.
682
00:29:48,805 --> 00:29:53,845
So that's, that's ultimately on the
solution side of things where we end up
683
00:29:53,845 --> 00:29:58,185
with, insurance policies, which ones are
best suited for what we're doing, which
684
00:29:58,190 --> 00:29:59,885
is, quite literally only whole life.
685
00:29:59,965 --> 00:30:02,095
dividend paying, whole life insurance.
686
00:30:02,455 --> 00:30:06,505
but that's, that's ultimately where
we end up at in the, in the solution.
687
00:30:06,965 --> 00:30:07,475
This was awesome.
688
00:30:07,475 --> 00:30:08,165
Thanks Scott.
689
00:30:08,407 --> 00:30:08,767
Cool.
690
00:30:08,885 --> 00:30:09,665
you putting this together.
691
00:30:10,237 --> 00:30:11,737
Yeah, no, it's good.
692
00:30:11,767 --> 00:30:15,577
Like I said, it's good to go back
through stuff and, you know, even if it's
693
00:30:15,577 --> 00:30:18,937
skimming through, just to kind of keep
a structure going and keep a dialogue
694
00:30:18,937 --> 00:30:20,797
going and keeping your mind working on it.
695
00:30:21,129 --> 00:30:23,899
Next time around, we'll start
getting into more implementation.
696
00:30:24,299 --> 00:30:27,119
specifically how it
works, on the user side.
697
00:30:27,459 --> 00:30:31,029
how it offers a safety,
security, contractual guarantees.
698
00:30:31,079 --> 00:30:35,149
how we don't assume that risk and what
that does for us in our, everyday life.
699
00:30:35,509 --> 00:30:38,809
implementation was a good subject
too, so looking forward to that one.
700
00:30:39,712 --> 00:30:40,012
All right.
701
00:30:40,042 --> 00:30:40,402
Awesome.
702
00:30:40,402 --> 00:30:43,402
Well, thanks everybody for watching
or listening, however you're taking
703
00:30:43,402 --> 00:30:44,992
in the Infinite Mindset Podcast.
704
00:30:44,992 --> 00:30:46,132
We hope to see you on the next one.
705
00:30:46,312 --> 00:30:48,502
If you like what you heard, give
us a thumbs up, a decent review.
706
00:30:48,502 --> 00:30:51,442
If you don't like it as well, please give
us some feedback and we'll try and adjust.
707
00:30:51,502 --> 00:30:52,372
Hope to see you on the next one.
708
00:30:52,894 --> 00:30:56,434
If there's anything that you want us to
cover, make sure you let us know because
709
00:30:56,434 --> 00:31:00,604
we have implementation on NNI and then
we'll start getting into just other stuff.
710
00:31:00,604 --> 00:31:02,254
We've got some ideas in the future.
711
00:31:02,364 --> 00:31:05,364
What to talk about, but any input
or anything that you wanna know
712
00:31:05,364 --> 00:31:07,884
more about, even if it only takes
part of an episode that we can
713
00:31:07,884 --> 00:31:09,354
get into with you, let us know.
714
00:31:09,652 --> 00:31:10,567
Without a doubt.
715
00:31:10,627 --> 00:31:10,837
All right.
716
00:31:10,837 --> 00:31:11,257
Thanks guys.
717
00:31:11,257 --> 00:31:11,797
See you next time.
718
00:31:12,234 --> 00:31:12,534
See ya.
719
00:31:16,225 --> 00:31:18,025
Thanks for tuning into
the infinite mindset.
720
00:31:18,505 --> 00:31:21,595
If you found today's conversation
valuable, share it with someone who's
721
00:31:21,595 --> 00:31:25,105
ready to think differently about
finances, and don't forget to subscribe.
722
00:31:25,465 --> 00:31:28,225
Your journey to financial freedom
starts with the right mindset.
00:00:00,000 --> 00:00:03,000
You remove the risk and you're
working with certainties.
2
00:00:03,050 --> 00:00:05,839
you're not gambling because there's
gonna be a death benefit payout
3
00:00:05,869 --> 00:00:08,570
and you're gonna have access to
that cash value the entire time.
4
00:00:08,899 --> 00:00:12,409
we want as much risk to leave
us and as much guarantee to
5
00:00:12,409 --> 00:00:14,299
come to us as we possibly can.
6
00:00:14,659 --> 00:00:17,149
you're gonna have access to
multiple times what you put it in
7
00:00:17,149 --> 00:00:18,979
premium, in the cash value side.
8
00:00:19,239 --> 00:00:22,599
And your beneficiaries will get, multiples
of that on the death benefit side.
9
00:00:25,720 --> 00:00:30,100
Welcome to the Infinite Mindset Podcast,
the show where we explore the power of
10
00:00:30,100 --> 00:00:34,000
the infinite banking concept and how to
take control of your financial future.
11
00:00:34,570 --> 00:00:37,870
I'm your host Andy, along with
Scott and frequent guest Jared.
12
00:00:38,440 --> 00:00:41,830
We're here to help you think
bigger, build smarter, and
13
00:00:41,830 --> 00:00:43,720
create freedom on your own terms.
14
00:00:43,900 --> 00:00:44,800
Let's get started.
15
00:00:48,580 --> 00:00:48,790
All right.
16
00:00:48,790 --> 00:00:51,730
Welcome back everyone to another
episode of the Infinite Mindset
17
00:00:51,730 --> 00:00:53,680
Podcast, just me and Scott today.
18
00:00:53,770 --> 00:00:55,060
And so we'll just jump right into it.
19
00:00:55,060 --> 00:00:56,075
Scott, what's going on with you buddy?
20
00:00:56,651 --> 00:00:57,341
Let's see.
21
00:00:57,851 --> 00:00:59,231
Got home from work yesterday.
22
00:00:59,321 --> 00:01:02,941
That was a long day, so I, didn't,
I forgot to mention this to you.
23
00:01:03,241 --> 00:01:03,931
I screwed up.
24
00:01:03,931 --> 00:01:07,111
We got done at like 10 30 at night
and I thought I had booked the crash
25
00:01:07,111 --> 00:01:10,006
pad or just a room to stay at that
night and come home the next morning.
26
00:01:11,071 --> 00:01:14,461
I take the taxi from JFK to
LaGuardia, go to the crash pad.
27
00:01:14,461 --> 00:01:18,901
I look up what room I'm gonna stay in,
and I realize that I didn't book one.
28
00:01:19,621 --> 00:01:21,691
So, oh, it was terrible.
29
00:01:21,691 --> 00:01:25,801
So I went over to the crew room,
hopped in a recliner, couldn't sleep.
30
00:01:25,801 --> 00:01:29,221
Worked on my bids for next month,
even though I'm going to training,
31
00:01:29,581 --> 00:01:33,541
but just to get a schedule on
there, just for the credit wise.
32
00:01:33,961 --> 00:01:37,951
But anyhow, yeah, I got like two
hours of sleep, slept like 45
33
00:01:37,951 --> 00:01:42,511
minutes on the airplane and then
stayed up yesterday until like nine.
34
00:01:42,511 --> 00:01:46,621
So San Francisco to Kennedy,
like two and a half, two hours.
35
00:01:47,116 --> 00:01:49,966
45 minutes of sleep and
then up all day yesterday.
36
00:01:50,686 --> 00:01:51,706
That, that was cool.
37
00:01:51,826 --> 00:01:53,746
but on a more positive note,
38
00:01:54,209 --> 00:01:54,509
You're looking
39
00:01:54,586 --> 00:01:54,916
that was,
40
00:01:55,109 --> 00:01:55,589
for that right
41
00:01:55,796 --> 00:01:56,456
that was bad.
42
00:01:56,606 --> 00:01:58,916
Yeah, I, oh, I slept
like 10 hours last night.
43
00:01:58,916 --> 00:01:59,516
It was awesome.
44
00:01:59,966 --> 00:02:03,666
So, but I got the,
practitioner course, complete.
45
00:02:03,876 --> 00:02:04,746
The test is done.
46
00:02:05,166 --> 00:02:10,156
So, now onto the mentor phase
with you and then the actual
47
00:02:10,156 --> 00:02:11,776
practitioner title after that.
48
00:02:11,986 --> 00:02:12,526
So
49
00:02:12,704 --> 00:02:13,154
Congrats
50
00:02:13,246 --> 00:02:13,666
that's.
51
00:02:14,236 --> 00:02:14,656
Yeah.
52
00:02:14,836 --> 00:02:17,646
Yeah, I was, that was, I was
glad to get that done before the
53
00:02:17,646 --> 00:02:19,386
two 20 training next month too.
54
00:02:19,386 --> 00:02:24,126
So, gotta come down, come down
to Atlanta for basically a month.
55
00:02:24,336 --> 00:02:26,886
Well, I'll be five on three
off or something like that.
56
00:02:26,886 --> 00:02:31,311
So, but yeah, so I was, I was, I
was happy to get that done before
57
00:02:31,341 --> 00:02:34,851
airplane training, 'cause trying
to study and do two things at once.
58
00:02:35,111 --> 00:02:35,891
I can't.
59
00:02:35,951 --> 00:02:37,421
I can barely walk and talk.
60
00:02:37,796 --> 00:02:40,016
Don't ask me to chew gum and bite my lip.
61
00:02:40,954 --> 00:02:42,094
No, it's actually really smart.
62
00:02:42,094 --> 00:02:45,184
So I know the NNI, they do it
where I want, was it 60 days?
63
00:02:45,184 --> 00:02:45,454
Right?
64
00:02:45,454 --> 00:02:48,514
But you can potentially request an
extension for 30 days, depending
65
00:02:48,514 --> 00:02:50,314
on what's going on, but they
want you to get that test done.
66
00:02:50,314 --> 00:02:50,884
And I like it
67
00:02:50,966 --> 00:02:51,296
Yeah.
68
00:02:51,814 --> 00:02:53,104
you're either motivated,
you're gonna do it or you're
69
00:02:53,336 --> 00:02:53,966
Oh yeah.
70
00:02:54,124 --> 00:02:55,054
and hanging over you.
71
00:02:55,354 --> 00:02:58,384
But now, once it's done, it's not like
you're one and done and you put it away.
72
00:02:58,384 --> 00:02:59,584
You know you're gonna keep using it.
73
00:03:00,056 --> 00:03:00,386
Right.
74
00:03:00,634 --> 00:03:03,184
it's important to get through it so you
can actually start executing and not just
75
00:03:03,184 --> 00:03:04,594
constantly be in this studying phase.
76
00:03:05,511 --> 00:03:08,511
I think if it would've took any longer,
you'd have to go back to like the
77
00:03:08,511 --> 00:03:10,341
problem and start reading stuff again.
78
00:03:10,341 --> 00:03:14,331
Not that it's, not that it leaves
your memory, but like the specifics
79
00:03:14,331 --> 00:03:16,646
that are gonna be on the test
of what they want you to know.
80
00:03:17,391 --> 00:03:20,801
And how quick to find it or, like
regurgitate it outta your mind,
81
00:03:20,891 --> 00:03:23,171
you know, and, and put it on paper.
82
00:03:23,330 --> 00:03:27,200
But yeah, it's the, the test
was pretty in depth too.
83
00:03:27,300 --> 00:03:32,250
I was surprised, or, or I shouldn't say
surprised, but you know, I'm getting at,
84
00:03:32,250 --> 00:03:35,910
it's like, oh yeah, they, because they're
like, they're like, oh, it's o it's open
85
00:03:35,910 --> 00:03:39,240
book, you know, but you're not gonna
have time to go through and find stuff.
86
00:03:39,724 --> 00:03:43,624
You really don't, maybe maybe
10 questions out of 115.
87
00:03:43,624 --> 00:03:46,564
You have time to actually dig
through the book and look for, so,
88
00:03:47,217 --> 00:03:47,397
Yeah, they
89
00:03:47,494 --> 00:03:48,064
it was,
90
00:03:48,207 --> 00:03:49,287
you know what's going on.
91
00:03:49,414 --> 00:03:49,894
yeah.
92
00:03:50,067 --> 00:03:53,157
it's one of those things where if you've
read and done the research and you
93
00:03:53,374 --> 00:03:53,764
Yeah.
94
00:03:53,817 --> 00:03:55,347
moments where you're like, I
just need to look it up, you're
95
00:03:55,347 --> 00:03:56,397
gonna know exactly where to go to
96
00:03:56,494 --> 00:03:56,794
Yep.
97
00:03:56,847 --> 00:03:57,942
If you're starting in
there and you haven't done.
98
00:03:58,287 --> 00:03:58,737
Homework.
99
00:03:58,737 --> 00:03:59,007
Yeah.
100
00:03:59,037 --> 00:03:59,427
You're gonna
101
00:03:59,629 --> 00:04:03,169
Yeah, the, the only really thing that I
used the pen and paper for is I jotted
102
00:04:03,169 --> 00:04:05,209
down like, like I said, like 10 questions.
103
00:04:05,209 --> 00:04:05,779
As I went through.
104
00:04:05,779 --> 00:04:08,479
I was pretty confident in the
answer, but I just went back
105
00:04:08,479 --> 00:04:10,159
to double check 'em type thing.
106
00:04:10,159 --> 00:04:12,979
So, but yeah, so
107
00:04:13,197 --> 00:04:13,707
Good deal.
108
00:04:14,089 --> 00:04:16,909
that was, that was the big
weight off the shoulders, so,
109
00:04:17,997 --> 00:04:18,867
right, right.
110
00:04:18,897 --> 00:04:19,317
No, it is.
111
00:04:19,317 --> 00:04:21,687
It's definitely nice to be done
with that and be able to move on.
112
00:04:22,189 --> 00:04:22,549
yeah.
113
00:04:22,677 --> 00:04:23,037
to you.
114
00:04:23,037 --> 00:04:25,197
I'll let you kind of run with this
one and I'll just jump in and.
115
00:04:25,759 --> 00:04:25,999
Cool.
116
00:04:26,027 --> 00:04:29,087
doing before, we're gonna go into
section two that you actually covered.
117
00:04:29,087 --> 00:04:32,407
So we're gonna force you to
regurgitate or, bring that information
118
00:04:32,407 --> 00:04:33,757
back to the forefront and see,
119
00:04:33,924 --> 00:04:34,464
Recall.
120
00:04:34,644 --> 00:04:36,234
Recall, that's word I was looking for.
121
00:04:36,234 --> 00:04:37,044
Recall.
122
00:04:37,254 --> 00:04:38,004
Recall.
123
00:04:38,364 --> 00:04:39,924
There's even a button on the plane.
124
00:04:39,924 --> 00:04:40,554
Just recall.
125
00:04:40,554 --> 00:04:41,274
Recall.
126
00:04:41,377 --> 00:04:41,827
Yep.
127
00:04:42,444 --> 00:04:43,134
anyhow, uh.
128
00:04:43,267 --> 00:04:43,867
You got it.
129
00:04:44,349 --> 00:04:45,279
That sounds good.
130
00:04:45,669 --> 00:04:49,979
So, going back to the NNI course kind
of is like where we're at with this.
131
00:04:49,979 --> 00:04:53,229
I did a couple of podcasts so
far, talking about the problem.
132
00:04:53,469 --> 00:04:57,189
We dipped into the solution just a
little bit naturally through the, through
133
00:04:57,189 --> 00:04:59,089
the last podcast that I, that I led.
134
00:04:59,459 --> 00:05:02,189
but now we're gonna get more into
the solution, the solutions that
135
00:05:02,429 --> 00:05:05,709
there's three parts to the NNI,
just as a reminder, we have problem,
136
00:05:05,709 --> 00:05:07,299
solution, and implementation.
137
00:05:07,529 --> 00:05:11,729
the solution is definitely the thickest
part of this, practitioner course.
138
00:05:11,779 --> 00:05:14,119
there's, there's a lot going on in it.
139
00:05:14,299 --> 00:05:15,274
I don't think a lot of it is.
140
00:05:16,004 --> 00:05:20,624
Applicable to like general public
knowledge, but it's definitely something
141
00:05:20,624 --> 00:05:25,514
that as practitioners, you need to have
a, a pretty good understanding of in
142
00:05:25,514 --> 00:05:28,004
order to get to the implementation phase.
143
00:05:28,014 --> 00:05:29,784
we're gonna talk about the solution today.
144
00:05:30,084 --> 00:05:33,174
So to recap, we talked about
problems with money inflation,
145
00:05:33,174 --> 00:05:36,564
fractional reserve banking,
monetary expansion, stuff like that.
146
00:05:36,814 --> 00:05:40,084
and that kinda led us into what
we call the Sound Money Solution.
147
00:05:40,414 --> 00:05:44,854
And if we remember a step two of that
sound money solution was privatized
148
00:05:44,854 --> 00:05:48,844
banking, and there's things with the
sound money solution that we couldn.
149
00:05:49,289 --> 00:05:52,709
You know, we just can't accomplish on a
personal level, but privatized banking
150
00:05:52,709 --> 00:05:58,549
is something that we can do today to
help basically the economy, by not
151
00:05:58,549 --> 00:06:01,489
participating in monetary expansion via.
152
00:06:02,209 --> 00:06:04,259
inflation and, fractional reserve banking.
153
00:06:04,259 --> 00:06:08,929
So anyhow, the big question that
people might have is, why insurance?
154
00:06:08,999 --> 00:06:11,429
why do we use whole
life insurance for this?
155
00:06:11,429 --> 00:06:15,719
why are we using that as a warehouse
to store our wealth, and implement
156
00:06:15,719 --> 00:06:17,339
this privatized banking system?
157
00:06:17,879 --> 00:06:20,339
you might hear there's better
rates of returns on other
158
00:06:20,339 --> 00:06:22,409
products, stuff like that, but.
159
00:06:22,834 --> 00:06:24,394
going back into the problem.
160
00:06:24,654 --> 00:06:28,134
it's, the solution is
we're transferring risk.
161
00:06:28,424 --> 00:06:32,954
we're getting uninterrupted compounding
growth and control and whole life
162
00:06:33,044 --> 00:06:39,134
is, it's not pretty much, it is the
only product or vehicle that fits
163
00:06:39,224 --> 00:06:42,877
everything that we're trying to
accomplish in our personal banking.
164
00:06:42,951 --> 00:06:47,241
I wanna really emphasize that last bullet
that you talked about there, the transfer
165
00:06:47,241 --> 00:06:50,991
of risk, the uninterrupted compounding
and that control, that's really what
166
00:06:50,991 --> 00:06:53,121
separates us from conventional thinking.
167
00:06:53,301 --> 00:06:56,961
So many people look at these
things and look at ROI they think,
168
00:06:56,961 --> 00:06:58,611
more risk equals more return.
169
00:06:58,971 --> 00:07:03,471
What we do requires a complete
mindset shift, and it's tough,
170
00:07:03,471 --> 00:07:04,851
if you've been taught or.
171
00:07:05,531 --> 00:07:08,051
thinking one way and you come into
this and you realize you have to
172
00:07:08,051 --> 00:07:09,461
pivot and do things differently.
173
00:07:09,491 --> 00:07:12,791
I find that is one of the things,
depending on people's background,
174
00:07:13,061 --> 00:07:14,381
that is the hardest part for them.
175
00:07:14,821 --> 00:07:17,161
and you can tell when people have
read the book and when they haven't or
176
00:07:17,161 --> 00:07:19,891
when they've caught it and when they
haven't caught it, because they'll start
177
00:07:19,891 --> 00:07:21,751
asking different questions the second
178
00:07:21,968 --> 00:07:22,258
Okay.
179
00:07:22,291 --> 00:07:24,721
talking about ROI or what's
the internal rate of return?
180
00:07:24,841 --> 00:07:25,861
And they start comparing it.
181
00:07:25,861 --> 00:07:28,111
And I know like we're talking about,
you've got your one buddy that
182
00:07:28,111 --> 00:07:30,661
does it, and they start looking at
it like the market or something.
183
00:07:31,321 --> 00:07:31,651
can tell.
184
00:07:31,651 --> 00:07:31,831
Okay.
185
00:07:31,831 --> 00:07:33,541
They haven't caught it
yet, and that's okay.
186
00:07:33,541 --> 00:07:37,141
You just realize where they're coming
from and it's, I, I was there before.
187
00:07:37,171 --> 00:07:39,601
You know, it takes a little bit until
you read this book and really catch it.
188
00:07:39,721 --> 00:07:42,031
It's tough to change that mindset,
189
00:07:42,252 --> 00:07:45,377
I jokingly offered him the book
the other day knowing full well
190
00:07:45,377 --> 00:07:46,487
that he wasn't gonna read it.
191
00:07:46,695 --> 00:07:47,385
right?
192
00:07:47,497 --> 00:07:50,147
I was like, I was like, dude, if I
buy you the book, will you read it?
193
00:07:50,147 --> 00:07:52,097
He's like, uh, no.
194
00:07:52,102 --> 00:07:53,597
And I. I'm like, that's fine.
195
00:07:53,987 --> 00:07:57,887
Like I, I knew the answer before I
asked it, so, but it's just who he is.
196
00:07:57,887 --> 00:07:58,727
It's his personality.
197
00:07:58,727 --> 00:07:59,267
It's who he is.
198
00:07:59,267 --> 00:08:01,517
And then there's, wouldn't,
wouldn't trade him for the world.
199
00:08:01,517 --> 00:08:02,687
So, but
200
00:08:02,850 --> 00:08:03,450
note on that.
201
00:08:03,450 --> 00:08:07,170
That's why I will not buy people the
book, because if you buy it, typically
202
00:08:07,170 --> 00:08:09,180
people will not read it if they buy it
203
00:08:09,197 --> 00:08:09,467
I've,
204
00:08:09,750 --> 00:08:11,010
and typically they are gonna read it.
205
00:08:11,447 --> 00:08:12,647
I've learned this twice now.
206
00:08:12,647 --> 00:08:17,117
So, that is a solid, I give the link now.
207
00:08:17,147 --> 00:08:18,287
I've, I've done it twice.
208
00:08:18,287 --> 00:08:20,142
Well, I, I did it once
and offered it once.
209
00:08:20,912 --> 00:08:24,062
And now it's, I send the link and if
you're gonna get it, you're gonna get it.
210
00:08:24,062 --> 00:08:24,932
If you're not, you're not.
211
00:08:24,932 --> 00:08:31,502
But yeah, that's, I, I carry a copy with
me in my bag just in case somebody asks,
212
00:08:31,532 --> 00:08:34,802
like I can show 'em what it looks like
so they know what they're looking for.
213
00:08:35,222 --> 00:08:36,632
But that's, that's my copy.
214
00:08:37,275 --> 00:08:38,235
100%.
215
00:08:38,432 --> 00:08:39,422
I gave it to my nephew.
216
00:08:39,632 --> 00:08:42,152
I gave a, I gave one of my
nephew and one of my friend and.
217
00:08:42,255 --> 00:08:43,765
Did, did your nephew read it?
218
00:08:44,417 --> 00:08:47,185
he read it, but, how do I describe him?
219
00:08:47,335 --> 00:08:48,775
he's an entrepreneur.
220
00:08:48,775 --> 00:08:50,035
He'd be perfect for it.
221
00:08:50,065 --> 00:08:51,565
He'd be absolutely perfect for it.
222
00:08:51,615 --> 00:08:55,715
And it would be perfect for him, I guess
is the more accurate, way to word that.
223
00:08:56,495 --> 00:08:57,725
But he's young.
224
00:08:57,885 --> 00:08:58,905
he's living in the now.
225
00:08:58,935 --> 00:09:01,755
I can't blame him, you
know, when I was 23 or 24.
226
00:09:02,275 --> 00:09:06,085
I had other things on my mind and,
but he's, a successful business owner.
227
00:09:06,345 --> 00:09:07,095
He is a good guy.
228
00:09:07,145 --> 00:09:10,325
But yeah, he's just not there yet.
229
00:09:10,425 --> 00:09:15,115
but anyhow, off the book
topic, talking about, transfer
230
00:09:15,115 --> 00:09:16,425
of risk, This is a big one.
231
00:09:16,425 --> 00:09:18,745
'cause we've kind of mentioned
this and had this discussion,
232
00:09:18,745 --> 00:09:23,395
but just to throw it out there,
insurance is a transfer of risk.
233
00:09:23,425 --> 00:09:24,325
that's what it is.
234
00:09:24,325 --> 00:09:26,035
That's at it, at its core.
235
00:09:26,035 --> 00:09:27,865
That's exactly what you're doing.
236
00:09:27,865 --> 00:09:32,225
You're paying a premium and then the
insurance company is assuming the
237
00:09:32,225 --> 00:09:37,325
financial burden to cover a loss,
whether it's your car or your future
238
00:09:37,325 --> 00:09:39,555
earning potential, so at its core.
239
00:09:40,305 --> 00:09:41,655
We're transferring risk.
240
00:09:41,915 --> 00:09:43,685
some people might think it's gambling.
241
00:09:43,685 --> 00:09:44,885
It's a form of gambling.
242
00:09:44,885 --> 00:09:47,285
you're paying for something
that may or may not happen.
243
00:09:47,825 --> 00:09:49,835
the biggest thing with that is gambling.
244
00:09:50,375 --> 00:09:50,915
Gambling's an unknown.
245
00:09:50,915 --> 00:09:54,635
When you stick a dollar into a slot
machine or you lay 20 down at blackjack,
246
00:09:55,025 --> 00:09:56,645
you're not sure what's gonna happen.
247
00:09:56,685 --> 00:09:59,595
you might come out ahead, you might
come out behind, you don't know.
248
00:10:00,135 --> 00:10:01,905
Insurance is not gambling.
249
00:10:01,905 --> 00:10:03,045
It's a guarantee.
250
00:10:03,145 --> 00:10:07,685
if something happens, the company
is going to do this for you.
251
00:10:07,715 --> 00:10:09,155
That that's not gambling.
252
00:10:09,205 --> 00:10:10,045
that's a certainty.
253
00:10:10,495 --> 00:10:13,765
just as certain as you will
graduate, as Nelson puts it, you
254
00:10:13,765 --> 00:10:15,865
know, pass away, you'll graduate.
255
00:10:16,186 --> 00:10:16,936
it's a guarantee.
256
00:10:16,936 --> 00:10:19,846
There's no getting out of
this alive anyway, but.
257
00:10:21,061 --> 00:10:24,571
So it can't, it can't be gambling,
you know, there's no, there's
258
00:10:24,571 --> 00:10:25,681
no risk associated with it.
259
00:10:25,681 --> 00:10:28,681
You remove the risk and you're
working with certainties.
260
00:10:28,731 --> 00:10:30,831
for me, when I look at it,
it's very straightforward.
261
00:10:30,861 --> 00:10:32,961
Everybody is going to
graduate at some point.
262
00:10:33,021 --> 00:10:36,921
The question is when, so you're not
gambling because there's gonna be a death
263
00:10:36,921 --> 00:10:40,461
benefit payout and you're gonna have
access to that cash value the entire time.
264
00:10:40,791 --> 00:10:42,441
The real question is when does it happen?
265
00:10:42,741 --> 00:10:45,591
And so it separates the whole
life really from the term, 'cause
266
00:10:45,591 --> 00:10:48,861
that kind of gets mixed in there
sometimes too, is the rent versus own.
267
00:10:49,251 --> 00:10:52,221
So you're still not even gambling
with term life insurance.
268
00:10:52,221 --> 00:10:54,741
It's just temporary coverage is
the biggest difference with this.
269
00:10:54,741 --> 00:10:58,581
It's permanent and you know that if
you go down this road, all that capital
270
00:10:58,581 --> 00:11:02,491
or premium that you're putting into
here, it's going to, pay out, through
271
00:11:02,491 --> 00:11:05,761
the death benefit multiple times that
over eventually when you do pass.
272
00:11:06,106 --> 00:11:08,896
And if you do this long term and it's
around long enough, you're gonna have
273
00:11:08,896 --> 00:11:12,736
access to multiple times what you put
it in premium, in the cash value side.
274
00:11:12,946 --> 00:11:14,446
And so there's no gambling involved here.
275
00:11:14,446 --> 00:11:16,966
'cause you have a hundred percent access
to that capital while you're alive.
276
00:11:17,176 --> 00:11:20,536
And your beneficiaries will get, multiples
of that on the death benefit side.
277
00:11:20,566 --> 00:11:21,886
that's how I think about it.
278
00:11:22,340 --> 00:11:22,580
Absolutely.
279
00:11:22,913 --> 00:11:27,293
On the NNI course when we're talking
about the solution and we start talking
280
00:11:27,293 --> 00:11:32,363
about insurance, they do a pretty big,
deep dive into insurance, starting with
281
00:11:32,363 --> 00:11:38,013
term and advancing into whole life, and
then covering other products that, some
282
00:11:38,013 --> 00:11:43,423
people may think are suitable for IBC,
you can use 'em, but they're not the ideal
283
00:11:43,423 --> 00:11:45,563
product is, what we're gonna get at here.
284
00:11:45,953 --> 00:11:50,063
the biggest thing with whole life is
the living benefit of the insurance, and
285
00:11:50,063 --> 00:11:52,343
that's where we get the banking function.
286
00:11:52,403 --> 00:11:53,923
so we'll, start talking about that.
287
00:11:53,923 --> 00:11:55,813
It's more applicable then you,
288
00:11:55,853 --> 00:12:00,623
If you get into insurance and various
things and policies and designs
289
00:12:00,623 --> 00:12:02,333
and functions and what each one do.
290
00:12:02,828 --> 00:12:05,168
I mean, it'd be, it'd be
darn near a college course.
291
00:12:05,168 --> 00:12:07,848
So it's like, we'll just glaze over that.
292
00:12:07,848 --> 00:12:11,148
But they do teach us is the biggest
thing they do teach us where it all
293
00:12:11,148 --> 00:12:14,268
comes from, how it all is designed,
how it works, how it functions.
294
00:12:14,568 --> 00:12:18,858
It's just not really applicable to the
end user who are, who are audience is.
295
00:12:18,918 --> 00:12:22,178
So, so on to the, living benefits.
296
00:12:22,278 --> 00:12:24,708
we're using cash value to do.
297
00:12:25,558 --> 00:12:28,138
personalized privatized
banking function in our life.
298
00:12:28,258 --> 00:12:31,138
So it's like, okay,
well what is cash value?
299
00:12:31,278 --> 00:12:34,218
this is a really, really boring
description in my opinion,
300
00:12:34,458 --> 00:12:35,748
so we'll dumb it down after.
301
00:12:35,928 --> 00:12:39,138
But just so everybody knows,
the cash value is the actuarily
302
00:12:39,288 --> 00:12:43,368
expected, present, discounted value
of the future death benefit, minus
303
00:12:43,368 --> 00:12:45,468
remaining premiums that aren't paid.
304
00:12:46,233 --> 00:12:50,133
I don't know how many times I heard that
through the NNI course, I can still still
305
00:12:50,133 --> 00:12:52,213
see, Murphy saying it every single time.
306
00:12:52,213 --> 00:12:52,753
It's so funny.
307
00:12:52,993 --> 00:12:56,533
But anyhow, to dumb it down,
it's the, it's the present value
308
00:12:56,533 --> 00:12:58,393
of your future death benefit.
309
00:12:58,883 --> 00:12:59,273
absolutely.
310
00:12:59,303 --> 00:12:59,783
Let me, I'm gonna
311
00:12:59,815 --> 00:13:00,055
Okay.
312
00:13:00,173 --> 00:13:00,863
real quick 'cause I didn't
313
00:13:01,105 --> 00:13:01,495
Oh, yeah.
314
00:13:01,555 --> 00:13:01,885
Yep.
315
00:13:02,008 --> 00:13:02,333
No, no, no
316
00:13:02,455 --> 00:13:02,905
Yeah, no.
317
00:13:03,083 --> 00:13:06,173
thing I just wanted to talk about was
when we look at the whole life policy
318
00:13:06,173 --> 00:13:09,053
and how these things are labeled, I
think a lot of people, and we talked
319
00:13:09,053 --> 00:13:11,393
about this before, and they talked
about in the course from the seventies,
320
00:13:11,603 --> 00:13:14,723
that when they hear whole life, there's
this knee jerk reaction and people
321
00:13:14,723 --> 00:13:15,863
are, oh, I'm staying away from that.
322
00:13:15,863 --> 00:13:16,703
That's a bad product.
323
00:13:17,453 --> 00:13:20,243
we could actually relabel this thing
and call it what it is, which is
324
00:13:20,243 --> 00:13:23,963
a capital storage vehicle with the
added bonus of of a death benefit, I
325
00:13:23,963 --> 00:13:27,503
think people would actually jump on
board with this and really go forward.
326
00:13:27,713 --> 00:13:29,273
But the problem is we're
not gonna relabel it.
327
00:13:29,303 --> 00:13:30,053
It is what it is.
328
00:13:30,053 --> 00:13:33,533
The industry has these standards, but
conceptually, if you think about it that
329
00:13:33,533 --> 00:13:36,623
way, I think it helps a lot of people
understand what they actually have there.
330
00:13:37,043 --> 00:13:39,683
And then moving on to the, what you
just talked about, the cash value.
331
00:13:39,683 --> 00:13:40,403
It's very simple.
332
00:13:40,403 --> 00:13:41,223
The way I look at this is.
333
00:13:42,008 --> 00:13:43,568
If you were to go, you
know what, I'm done.
334
00:13:43,568 --> 00:13:46,778
IB C isn't for me, or this whole life
policy, I wanna walk away right now.
335
00:13:46,958 --> 00:13:50,798
It's what the company would actually give
you to walk away or surrender the policy.
336
00:13:51,008 --> 00:13:53,678
And if you think about it, they're
on the hook right now to pay you
337
00:13:53,678 --> 00:13:55,448
a huge sum of money down the road.
338
00:13:56,318 --> 00:13:57,908
Compared to the premiums that you put in.
339
00:13:58,208 --> 00:14:00,788
But you're saying, Hey, if I were to
walk, if you were to walk away right now,
340
00:14:00,788 --> 00:14:01,988
this is what the company would give you.
341
00:14:01,988 --> 00:14:04,118
And they wouldn't have that
massive obligation down the road.
342
00:14:04,298 --> 00:14:07,718
Now the company, the life insurance
company, does not want you to do that.
343
00:14:07,718 --> 00:14:08,828
It's not in their best interest.
344
00:14:08,828 --> 00:14:11,798
It's not in your best interest, but
conceptually, it's a very easy way
345
00:14:11,798 --> 00:14:13,423
to think about it so you understand
what you actually have there.
346
00:14:13,941 --> 00:14:16,516
So what do they do to get
you to not surrender the.
347
00:14:17,429 --> 00:14:20,849
Well, the irony, the irony is
these policies are really, really
348
00:14:20,849 --> 00:14:24,959
efficient, and if you are going to
surrender it, it's not gonna go away.
349
00:14:25,109 --> 00:14:27,779
What's actually gonna happen is there's
a secondary market and somebody will
350
00:14:27,779 --> 00:14:31,369
actually go out there and buy that
policy and people do this all the time.
351
00:14:31,369 --> 00:14:33,349
And the life insurance companies
don't like that as well.
352
00:14:33,349 --> 00:14:36,079
So when you actually apply, if you look,
they look at Viatical settlements and they
353
00:14:36,079 --> 00:14:39,079
go, Hey, do you have any kind of plans to
sell this policy or anything like that?
354
00:14:39,499 --> 00:14:42,019
The company doesn't want you to do it,
but there was a secondary market for it.
355
00:14:42,019 --> 00:14:44,419
I just throw that out there so people
kind of understand what's going on.
356
00:14:44,479 --> 00:14:48,649
And my point is this, if these, if these
policies were so poor, why would there
357
00:14:48,649 --> 00:14:51,769
be a secondary market where people wanted
to buy them and keep them in force?
358
00:14:51,769 --> 00:14:53,419
'cause they knew what it
was gonna pay out later on.
359
00:14:53,659 --> 00:14:56,059
So just think about that, you
know, there, there's a reason why
360
00:14:56,181 --> 00:14:56,451
Yeah.
361
00:14:56,479 --> 00:14:58,129
aren't just surrendered and
they don't just go away.
362
00:14:58,881 --> 00:14:59,241
Right.
363
00:14:59,751 --> 00:15:04,041
So speaking of surrenders, one thing
that's a characteristic of a whole life
364
00:15:04,041 --> 00:15:07,251
policy, the living benefit, this is
where this comes in on the cash value.
365
00:15:07,761 --> 00:15:13,121
the policy loan function is there
originally, to keep people from
366
00:15:13,121 --> 00:15:15,491
surrendering their policies when
they come across hard times.
367
00:15:15,491 --> 00:15:19,271
It's, it's a way of the insurance
company saying, okay, hey, instead of
368
00:15:19,271 --> 00:15:24,201
getting rid of this or doing anything, to
surrender it, what if we made you a loan
369
00:15:24,201 --> 00:15:26,061
against it and used it as collateral?
370
00:15:26,821 --> 00:15:30,481
the only way I would describe it as
genius on their part 'cause they're
371
00:15:30,521 --> 00:15:37,421
collateralizing the debt with a policy
that they are guaranteed to pay at some
372
00:15:37,421 --> 00:15:44,381
point in time, whether it's tomorrow,
the next day or age 1 21 in the us.
373
00:15:44,501 --> 00:15:49,351
speaking of 1 21, just A brief
point, your cash value and your
374
00:15:49,351 --> 00:15:51,931
death benefit will reach each other.
375
00:15:51,931 --> 00:15:54,661
They will equal each other at age 1 21.
376
00:15:54,931 --> 00:15:57,661
whether it's just a plain
vanilla whole life policy or
377
00:15:57,661 --> 00:15:59,041
you're using riders or anything
378
00:15:59,041 --> 00:16:00,241
so there's a few things here.
379
00:16:00,241 --> 00:16:02,881
We're assuming we're in the US and
that's typically where it happens.
380
00:16:02,881 --> 00:16:05,281
If you look at older policies
during endowed sooner.
381
00:16:05,281 --> 00:16:06,841
So first is the term endowment.
382
00:16:06,841 --> 00:16:07,981
We've talked about this before.
383
00:16:07,981 --> 00:16:09,451
It's simply where the death benefit.
384
00:16:09,811 --> 00:16:13,591
Cash value will equal what we
do with the dividends as they
385
00:16:13,591 --> 00:16:15,121
come in, which we buy more PUA.
386
00:16:15,121 --> 00:16:17,281
And what that's doing is
raising the death benefit.
387
00:16:17,701 --> 00:16:19,951
And if you think about it,
the death benefit is a leader.
388
00:16:19,951 --> 00:16:22,921
The cash value's, the follower,
and the cash value will equal
389
00:16:22,921 --> 00:16:24,241
that death benefit at 1 21.
390
00:16:24,241 --> 00:16:26,941
Here in the us with most carriers,
there's always exceptions to the role.
391
00:16:26,941 --> 00:16:28,021
So that's why I say most.
392
00:16:28,491 --> 00:16:32,661
But I just wanna be very clear, even if
you don't use a dividends of PUA, and
393
00:16:32,661 --> 00:16:37,141
even if you have just a straight base
policy at 1 21, that death benefit and
394
00:16:37,141 --> 00:16:39,361
the cash value will equal the benefit.
395
00:16:39,361 --> 00:16:42,301
The way we do it is we buy more
death benefit with the dividends.
396
00:16:42,301 --> 00:16:45,691
So because the death benefit is
higher, the cash value is a follower,
397
00:16:45,691 --> 00:16:48,211
it's gonna have to get bigger and
bigger, bigger to eventually catch it.
398
00:16:48,211 --> 00:16:49,861
That's kind of conceptually
how to look at it.
399
00:16:50,326 --> 00:16:52,546
And then a really, really quick
side note, we have the mec, which
400
00:16:52,546 --> 00:16:54,226
is a modified endowment contract.
401
00:16:54,346 --> 00:16:57,676
All that means is that the death benefit
and the cash value are gonna equal
402
00:16:57,676 --> 00:17:01,846
each other at some point, pre 1 21,
and that's where we have the tax issue.
403
00:17:01,846 --> 00:17:03,511
So that's why we build the
policies the way we do.
404
00:17:03,872 --> 00:17:04,192
Gotcha.
405
00:17:04,652 --> 00:17:08,922
Yeah, and we'll get into that on, the next
one that I do with the implementation.
406
00:17:08,922 --> 00:17:10,452
So good point there.
407
00:17:10,852 --> 00:17:14,152
back to the policy loans, it's the
safest bet for the insurance company.
408
00:17:14,392 --> 00:17:18,202
It's not necessarily, I wouldn't say
like the financially best thing for
409
00:17:18,202 --> 00:17:21,712
the insurance company because the
cash flow isn't a certainty form.
410
00:17:21,892 --> 00:17:24,672
There's no structured repayment,
plan or anything like that.
411
00:17:25,337 --> 00:17:27,227
the policy holder may pay the debt back.
412
00:17:27,227 --> 00:17:28,757
They may not the loan rather.
413
00:17:29,147 --> 00:17:35,207
so while it might not be in the company's
financial best interest, it's from a
414
00:17:35,207 --> 00:17:40,997
cashflow standpoint, it's a safe loan
because they're gonna pay it anyway and
415
00:17:40,997 --> 00:17:45,227
they'll just subtract whatever's owed
plus any interest off the death benefit
416
00:17:45,227 --> 00:17:46,697
when they pay it to the beneficiary.
417
00:17:47,067 --> 00:17:52,707
the only other point to make on there
is while practicing IBC, it's important
418
00:17:52,707 --> 00:17:58,227
that we pay the loans back because
then the company does better twofold.
419
00:17:58,617 --> 00:18:02,637
One, they have that money available to
put into other stuff in their portfolio
420
00:18:02,787 --> 00:18:04,257
that makes your dividends bigger.
421
00:18:04,257 --> 00:18:08,067
Bigger dividends equals more PUA
more PUA means more cash value.
422
00:18:08,397 --> 00:18:11,067
So it's just kind of a small point.
423
00:18:11,622 --> 00:18:14,292
Inside everything that's going on.
424
00:18:14,352 --> 00:18:17,202
the main point is it is a safe
bet for the insurance company.
425
00:18:17,202 --> 00:18:19,572
Is is kind of where it all leads back to.
426
00:18:19,924 --> 00:18:21,424
I think real quick, a couple things
427
00:18:21,461 --> 00:18:21,681
yep.
428
00:18:22,046 --> 00:18:22,076
I.
429
00:18:22,144 --> 00:18:24,274
you look at the insurance companies,
the amount of people that are actually
430
00:18:24,274 --> 00:18:27,094
taking loans, it's usually single
percentages is what you're looking at.
431
00:18:27,094 --> 00:18:27,424
So.
432
00:18:28,239 --> 00:18:30,429
of people when they have these
policies, they're not necessarily
433
00:18:30,429 --> 00:18:31,449
practicing infinite banking.
434
00:18:31,449 --> 00:18:34,529
They just have a whole life policy
in force and some people don't even
435
00:18:34,529 --> 00:18:36,599
realize that they can even take
loans against their cash value.
436
00:18:36,599 --> 00:18:40,469
So that's one thing to note there,
realize that as all these premiums
437
00:18:40,469 --> 00:18:44,489
come in the company, the insurance
company that is, they have an obligation
438
00:18:44,489 --> 00:18:45,749
to pay out these death benefits.
439
00:18:45,749 --> 00:18:47,999
And so they have to have that
money and put it to work.
440
00:18:48,059 --> 00:18:51,119
And they're very savvy when they do
this and they have the actuaries and
441
00:18:51,119 --> 00:18:53,189
all their people in the back shops
and they figure out where are we gonna
442
00:18:53,189 --> 00:18:55,979
make this money work so we can pay
our death benefits and be profitable?
443
00:18:56,214 --> 00:18:58,494
And profitable, meaning they're
also paying out dividends to you.
444
00:18:58,524 --> 00:19:00,234
'cause it's a mutual
company, which is great.
445
00:19:00,654 --> 00:19:04,524
But you said, the big thing is with the
loans, it's actually the safest place
446
00:19:04,524 --> 00:19:06,954
they can loan it out because one of three
things that's gonna happen, you're gonna
447
00:19:06,954 --> 00:19:09,894
surrender the policy, you're gonna pass
away, you're gonna pay back that loan.
448
00:19:09,924 --> 00:19:12,864
So they know for a fact they're
getting that money back with interest.
449
00:19:13,194 --> 00:19:16,044
But like you alluded to, and it's the
biggest thing, they just don't know when.
450
00:19:16,314 --> 00:19:18,954
When they do these other investments,
they know when they're gonna get it back.
451
00:19:19,014 --> 00:19:21,474
But there's still a slight element
of risk with those other things
452
00:19:21,474 --> 00:19:22,524
compared to this other side.
453
00:19:22,524 --> 00:19:24,624
'cause it's a hundred percent guarantee
they're gonna be made whole on it.
454
00:19:25,349 --> 00:19:26,549
it's a trade off with all of it.
455
00:19:26,829 --> 00:19:28,629
but like you mentioned, the reason why
they're doing it is they don't want
456
00:19:28,629 --> 00:19:29,949
people to surrender these policies.
457
00:19:29,949 --> 00:19:31,179
And we've done history stuff on this.
458
00:19:31,179 --> 00:19:34,299
I don't wanna go down too far into
that, but the big thing for us
459
00:19:34,299 --> 00:19:37,839
is we have an unstructured loan
for us on our end, and it puts us
460
00:19:37,839 --> 00:19:41,019
in a very, very strong financial
position to do what we want to do.
461
00:19:41,019 --> 00:19:41,804
This is why we use this vehicle.
462
00:19:43,196 --> 00:19:43,416
Yep.
463
00:19:43,620 --> 00:19:49,700
so speaking of, returns and risks,
There's, people out there that would think
464
00:19:49,700 --> 00:19:51,770
like, oh, we can do IBC with other stuff.
465
00:19:51,770 --> 00:19:56,080
And I mean, the truth is that you
can, but there's risks and it goes
466
00:19:56,080 --> 00:19:57,670
back to that whole transfer of risk.
467
00:19:57,670 --> 00:20:00,970
We wanna transfer as much risk
off of us as we can and take
468
00:20:00,970 --> 00:20:02,530
as many guarantees as we can.
469
00:20:02,900 --> 00:20:08,630
you'll see people use I Ls or uls
or security back line of credit.
470
00:20:08,700 --> 00:20:09,780
there's any slew of things.
471
00:20:09,780 --> 00:20:12,060
I guess you use a HELOC
too, if you wanted to.
472
00:20:12,450 --> 00:20:15,980
but there's risks associated with that.
473
00:20:15,980 --> 00:20:19,690
Just one example, with an IUL,
going back to your remark about
474
00:20:19,690 --> 00:20:23,950
the seventies, there was some
consumer reports more specifically.
475
00:20:24,040 --> 00:20:25,120
One that.
476
00:20:26,120 --> 00:20:30,110
attacked whole life as it was too
complicated and there's no way for
477
00:20:30,110 --> 00:20:32,090
the consumer to know what's going on.
478
00:20:32,090 --> 00:20:36,170
So ironically, they developed
a new thing called IUL and
479
00:20:36,170 --> 00:20:37,610
Index Universal Life Policy.
480
00:20:37,700 --> 00:20:41,210
And what it was meant to do was
basically unbundle a whole life policy.
481
00:20:41,390 --> 00:20:46,460
So it is a insurance policy and
an investment vehicle separate
482
00:20:46,460 --> 00:20:50,000
from each other, or to show how
it was separate from each other.
483
00:20:50,570 --> 00:20:55,670
How they had to do it is you basically
have a one year renewing term policy
484
00:20:55,880 --> 00:21:00,890
so that you can show yearly or
annually what the insurance cost is.
485
00:21:01,385 --> 00:21:06,485
To the policy versus what part of the
premium is going to the savings portion.
486
00:21:06,845 --> 00:21:13,095
The problem with that is as every year
goes by your term policy, your renewable
487
00:21:13,095 --> 00:21:18,225
term costs more as you get older because
your risk of graduating is that much
488
00:21:18,255 --> 00:21:23,655
higher, and eventually, if you didn't
put enough in, it's gonna start coming
489
00:21:23,655 --> 00:21:27,555
off the investment side and it's just
going to eat up on the, on the premium
490
00:21:27,555 --> 00:21:30,165
side for, for the insurance policy.
491
00:21:30,780 --> 00:21:34,880
Essentially what happened was
they put risk back on the policy
492
00:21:35,030 --> 00:21:37,040
holder, and we don't want that.
493
00:21:37,090 --> 00:21:40,600
we want as much risk to leave
us and as much guarantee to
494
00:21:40,600 --> 00:21:42,490
come to us as we possibly can.
495
00:21:42,800 --> 00:21:43,735
we've touched on.
496
00:21:44,415 --> 00:21:47,565
Security backed line of credit,
HELOCs, stuff like that.
497
00:21:47,915 --> 00:21:51,045
essentially, what it comes down
to is you're taking risk and
498
00:21:51,045 --> 00:21:54,435
moving it back onto yourself, and
you're taking away guarantees,
499
00:21:54,435 --> 00:21:55,635
which is what we don't want to do.
500
00:21:56,115 --> 00:22:00,765
after we do that, then we can concentrate
more on the living benefits of whole life.
501
00:22:00,835 --> 00:22:03,595
and that's where we get into the
cash value loans and stuff like that.
502
00:22:04,265 --> 00:22:05,675
I ended up doing a little
bit of research on this.
503
00:22:05,675 --> 00:22:07,955
'cause people always wanna hear numbers,
they wanna hear real life stuff.
504
00:22:07,955 --> 00:22:09,035
So first the numbers.
505
00:22:09,365 --> 00:22:12,095
I looked at this through the Life
Insurance Consumer Advocacy Center.
506
00:22:12,095 --> 00:22:12,875
this was interesting.
507
00:22:13,205 --> 00:22:15,875
88% of universal life fail to pay a death.
508
00:22:16,715 --> 00:22:19,415
that somebody surrendered or they
walked away from the policy and
509
00:22:19,415 --> 00:22:22,025
it's because of what you talked
about, the term gets too expensive.
510
00:22:22,265 --> 00:22:23,525
There's also a ton of assumptions.
511
00:22:23,525 --> 00:22:26,585
If you look at a typical universal
contract versus a whole life contract,
512
00:22:26,585 --> 00:22:27,905
they're about three times as long.
513
00:22:27,905 --> 00:22:29,705
'cause it's all the
assumptions and stuff going on.
514
00:22:30,455 --> 00:22:33,005
then to your point, even with the
seventies when they were looking at
515
00:22:33,005 --> 00:22:36,365
this and the numbers and separating it,
if you remember interest rates and the
516
00:22:36,365 --> 00:22:38,615
returns were absolutely insane back then.
517
00:22:38,705 --> 00:22:41,495
And so those numbers theoretically
could have supported.
518
00:22:42,300 --> 00:22:45,360
the cost of the term down the road,
but obviously that didn't keep up.
519
00:22:45,360 --> 00:22:48,810
And so with those numbers not keeping
up the cost of term just outweighed what
520
00:22:48,810 --> 00:22:51,210
those side funds were basically doing.
521
00:22:51,480 --> 00:22:55,280
And there's a point in the book as well
where, Nelson Nash talks about he just
522
00:22:55,280 --> 00:22:57,920
is basically when people get into their
late sixties, early seventies, he thinks
523
00:22:57,920 --> 00:23:00,710
just fall apart because the numbers,
the cost of the term just runs away.
524
00:23:01,430 --> 00:23:05,900
to be fair, look at whole life and
they said the big issue actually with
525
00:23:05,900 --> 00:23:07,670
whole life is lapse rates early on.
526
00:23:08,525 --> 00:23:10,025
so this is outside of IBC.
527
00:23:10,025 --> 00:23:11,045
This is all whole life.
528
00:23:11,045 --> 00:23:15,135
It's typically 15% in the first five
years they lapse, another source
529
00:23:15,135 --> 00:23:17,115
quoted 25% in the first five years.
530
00:23:17,115 --> 00:23:19,155
So it kind of depends what I would say.
531
00:23:19,395 --> 00:23:22,785
The biggest problem is there is that
people are not educated properly
532
00:23:22,785 --> 00:23:25,275
and they don't know what they have
and they're very shortsighted.
533
00:23:25,415 --> 00:23:27,845
Now, on the IBC side, those
numbers are very different.
534
00:23:28,115 --> 00:23:30,485
The people that are actually properly
educated, they know what's going on.
535
00:23:30,515 --> 00:23:33,905
Those policies are staying in enforce,
so not anywhere close to that number.
536
00:23:34,085 --> 00:23:36,605
So it's just people that don't really
understand what they have there.
537
00:23:36,995 --> 00:23:38,945
And so that's why we do these podcasts.
538
00:23:38,945 --> 00:23:41,685
We talk to people, we make sure
people read the book before we even
539
00:23:41,685 --> 00:23:45,225
get started because if you have a
tool and you don't know how it works,
540
00:23:45,225 --> 00:23:46,545
you're gonna get yourself in trouble.
541
00:23:46,545 --> 00:23:49,485
And these people got themselves in trouble
by not understanding what they had.
542
00:23:49,905 --> 00:23:52,880
But I wanted to bring this back
home 'cause I think it will
543
00:23:53,089 --> 00:23:54,029
strike a chord with people.
544
00:23:54,029 --> 00:23:56,189
So both my parents had
universal life policies.
545
00:23:56,594 --> 00:24:01,034
My father passed away very unexpectedly,
a couple years back at the age of 69.
546
00:24:01,034 --> 00:24:02,114
And it did pay out.
547
00:24:02,504 --> 00:24:05,054
And quite honestly, the reason why
it paid out is 'cause he was young.
548
00:24:05,084 --> 00:24:06,704
And I don't think that's
a good game plan to have.
549
00:24:06,704 --> 00:24:08,474
Like I'm gonna die early
enough so this will work.
550
00:24:08,804 --> 00:24:11,684
My mom now is in her early seventies
and I actually just got a letter in
551
00:24:11,684 --> 00:24:13,484
the mail and it's a small policy.
552
00:24:13,484 --> 00:24:15,824
I'm probably gonna let it go 'cause
it's not gonna make sense anymore.
553
00:24:15,824 --> 00:24:19,199
And it basically said if you do nothing,
the policy is gonna expire this fall.
554
00:24:19,859 --> 00:24:22,199
If you do pay the expected
premium, though, it's only
555
00:24:22,199 --> 00:24:23,669
gonna last for one extra year.
556
00:24:23,669 --> 00:24:26,369
And then I'm gonna be forced to
pay additional premium on what
557
00:24:26,369 --> 00:24:30,029
the actual expectations were when
this policy was first set up.
558
00:24:30,089 --> 00:24:33,289
And what that tells me is the side
funder, is not keeping up with the
559
00:24:33,289 --> 00:24:35,119
cost of term insurance that's going up.
560
00:24:35,359 --> 00:24:38,419
Now, ironically, if she would've put
that same premium into a whole life
561
00:24:38,419 --> 00:24:41,599
policy, not only would it be there,
and if it was designed the way we do
562
00:24:41,599 --> 00:24:45,169
it, she would've had more death benefit
and the cost would've been going down.
563
00:24:45,569 --> 00:24:49,169
So it just kind of shows you how
this works you gotta think long term
564
00:24:49,169 --> 00:24:49,979
and understand what you're doing.
565
00:24:49,979 --> 00:24:51,119
A universal policy.
566
00:24:51,119 --> 00:24:51,359
Yes.
567
00:24:51,359 --> 00:24:53,549
In the beginning it may look like
it's outperforming the whole life.
568
00:24:53,549 --> 00:24:56,639
I'm not gonna argue that, but it's a
long term where we always constantly
569
00:24:56,639 --> 00:24:57,449
went out with the whole life.
570
00:24:57,449 --> 00:24:58,559
It's kind of the tortoise and the hare.
571
00:24:58,589 --> 00:24:59,939
It's that same type of mentality.
572
00:25:00,216 --> 00:25:04,091
Funny you mentioned the whole, lapse rate
on whole life policies in the beginning.
573
00:25:04,421 --> 00:25:07,606
I remember back when I got mine
and I knew nothing about IBC.
574
00:25:07,606 --> 00:25:07,996
All I knew is that.
575
00:25:09,136 --> 00:25:10,396
You know, it's a whole life policy.
576
00:25:10,396 --> 00:25:13,576
It stays with me forever, and it has
a cash value function to it that I
577
00:25:13,576 --> 00:25:14,926
have no idea what I'm gonna do with.
578
00:25:15,556 --> 00:25:20,596
But, I'm paying, quite a bit of money,
especially back then at the time, relative
579
00:25:20,596 --> 00:25:26,826
to what I was making, I think I called
the agent two or three times probably.
580
00:25:26,826 --> 00:25:28,596
It was like, again, like,
why am I doing this?
581
00:25:28,596 --> 00:25:31,716
And he wasn't an IBC practitioner
or anything, but I was like, should
582
00:25:31,716 --> 00:25:32,706
I be doing something different?
583
00:25:32,706 --> 00:25:33,246
And he's like, no, no, no.
584
00:25:33,366 --> 00:25:34,086
Stay the course.
585
00:25:34,136 --> 00:25:34,796
to his credit.
586
00:25:35,359 --> 00:25:39,419
He was saying look down the road, look
in your retirement years, what you have.
587
00:25:39,449 --> 00:25:39,749
You know?
588
00:25:39,749 --> 00:25:42,929
And it's like, well,
yeah, but I could do this.
589
00:25:42,929 --> 00:25:46,799
And you know, he did do a good
job at keeping me on track.
590
00:25:46,799 --> 00:25:51,269
And I still have those policies and
now I use them basically as my own
591
00:25:51,269 --> 00:25:53,309
privatized bank for certain things.
592
00:25:53,567 --> 00:25:54,857
I almost did it though.
593
00:25:54,917 --> 00:25:58,697
I almost did it, and then I, if I
would've did that, I probably wouldn't
594
00:25:58,697 --> 00:26:01,592
be here now either with, two more
policies because I would've just been
595
00:26:01,592 --> 00:26:02,822
like, yeah, I already did that once.
596
00:26:02,822 --> 00:26:03,782
I'm not doing it again.
597
00:26:04,015 --> 00:26:05,065
Real quick 'cause it makes me think of it.
598
00:26:05,065 --> 00:26:07,945
A lot of PI people, and we were talking
about this before we jumped on, that
599
00:26:07,945 --> 00:26:10,465
you might have a client that's gonna
be looking at getting stuff on his kids
600
00:26:10,465 --> 00:26:13,525
before you pass that policy onto your kid,
make sure they understand what they have.
601
00:26:13,555 --> 00:26:14,905
'cause you don't want them
to do something silly.
602
00:26:14,905 --> 00:26:16,105
I've heard that happen before.
603
00:26:16,555 --> 00:26:18,205
And the other thing is
too, with these numbers.
604
00:26:18,450 --> 00:26:19,620
Keep in mind these numbers.
605
00:26:19,620 --> 00:26:22,380
This is taking into account stuff that
happened in the seventies when a lot
606
00:26:22,380 --> 00:26:25,740
of people did 10 35 exchanges or just
completely surrendered their policies.
607
00:26:25,920 --> 00:26:27,930
So that's hurting the whole
life argument as well.
608
00:26:28,110 --> 00:26:30,750
But at the end of the day, it's really
important no matter what you're doing,
609
00:26:30,750 --> 00:26:32,160
understand what you're getting into.
610
00:26:32,160 --> 00:26:34,080
And once you understand it,
I think you're gonna be very
611
00:26:34,080 --> 00:26:35,610
happy and keep what you have.
612
00:26:35,640 --> 00:26:38,520
But if you go in and you're not sure
you haven't read the book, of course
613
00:26:38,520 --> 00:26:40,245
you're gonna have questions 'cause
you're, you haven't been educated.
614
00:26:40,885 --> 00:26:42,535
So, kind of back to our outline here.
615
00:26:42,585 --> 00:26:45,555
we're talking about insurance, the
solution how to build policies,
616
00:26:45,555 --> 00:26:49,515
how insurance comes to be, and
then specifically, why do you We
617
00:26:49,515 --> 00:26:54,355
use whole life as our, means to do
privatized banking in our household.
618
00:26:54,805 --> 00:26:57,555
Nelson says there's one pool
of money you can't create it.
619
00:26:57,615 --> 00:26:59,175
Well, we can't create it.
620
00:26:59,415 --> 00:27:00,765
There's only one pool of money out there.
621
00:27:00,765 --> 00:27:02,665
It's just like water, It flows.
622
00:27:02,665 --> 00:27:03,835
it comes and goes.
623
00:27:03,835 --> 00:27:05,235
you spend it, you earn it.
624
00:27:05,545 --> 00:27:07,225
it has to reside somewhere.
625
00:27:08,425 --> 00:27:11,575
we're saying, why don't we put it
somewhere where it's guaranteed to grow
626
00:27:11,635 --> 00:27:13,445
and then, we can borrow against it.
627
00:27:13,445 --> 00:27:17,850
But even while it's there, the living
benefit of being able to use it.
628
00:27:18,935 --> 00:27:21,485
It's still growing
contractually in the background.
629
00:27:21,785 --> 00:27:26,825
And one important point there is it's
doing this because it's not your money,
630
00:27:26,855 --> 00:27:28,685
it's the insurance company's money.
631
00:27:29,285 --> 00:27:32,315
You are borrowing the insurance
company's money and it's being
632
00:27:32,315 --> 00:27:34,955
collateralized with your death benefit.
633
00:27:34,985 --> 00:27:39,415
So I know a lot of people, we get into
myths and misconceptions, as well in the
634
00:27:39,415 --> 00:27:43,615
NNI course, one big one is that you're
borrowing money from your policy or
635
00:27:43,615 --> 00:27:45,085
not borrowing money from your policy.
636
00:27:45,085 --> 00:27:47,995
You're borrowing it from the insurance
company, from premiums that they're
637
00:27:47,995 --> 00:27:51,685
taking in today, and they're putting
them to work with you instead of
638
00:27:51,685 --> 00:27:53,365
putting 'em to work somewhere else.
639
00:27:53,750 --> 00:27:57,250
that's ultimately to be able to
pay death benefits down the road.
640
00:27:57,490 --> 00:28:00,560
So, just a side point, but an
important point nonetheless.
641
00:28:00,890 --> 00:28:06,730
so what, what we're looking at then is
being able to borrow against our policy.
642
00:28:07,390 --> 00:28:11,560
We do that in order to recapture
interest that we're paying out to other
643
00:28:11,830 --> 00:28:14,080
financial institutions or other people.
644
00:28:14,140 --> 00:28:16,450
you're gonna borrow money regardless.
645
00:28:16,500 --> 00:28:18,600
you're either gonna borrow money
from your own bank account or you're
646
00:28:18,600 --> 00:28:19,890
gonna borrow it from somebody else.
647
00:28:19,890 --> 00:28:23,560
If you do it in a traditional banking
sense, by borrowing it from yourself
648
00:28:23,560 --> 00:28:28,090
inside of a whole life policy, you're
continuing that contractual growth.
649
00:28:28,495 --> 00:28:32,455
Uninterrupted compounding interest
until the benefit is paid out,
650
00:28:32,455 --> 00:28:33,715
until the death benefit's paid out.
651
00:28:34,185 --> 00:28:36,045
you're not creating money from nothing.
652
00:28:36,045 --> 00:28:40,245
some people will be like, oh, you're
essentially getting this car or TV
653
00:28:40,245 --> 00:28:44,805
for free because you're, you're using
money that you're already gonna use.
654
00:28:44,805 --> 00:28:45,585
no, you're not.
655
00:28:45,975 --> 00:28:47,325
We don't, we can't create money.
656
00:28:47,325 --> 00:28:48,735
The insurance company can't create money.
657
00:28:48,735 --> 00:28:49,635
The bank can create money.
658
00:28:50,155 --> 00:28:53,395
Which causes inflation, but we
are not creating money and you're
659
00:28:53,395 --> 00:28:54,685
not getting anything for free.
660
00:28:54,695 --> 00:28:58,265
you're moving where the cost of
it is coming from and keeping
661
00:28:58,295 --> 00:29:02,915
that interest or that compounding
growth in your own personal system
662
00:29:02,915 --> 00:29:04,775
forever and ever until it pays out.
663
00:29:05,405 --> 00:29:08,075
I think that was great and you kind
of alluded to it, but I just want
664
00:29:08,075 --> 00:29:09,575
to touch on it just for a second.
665
00:29:09,575 --> 00:29:12,395
All this is contingent on being
an honest banker, so you have to
666
00:29:12,482 --> 00:29:12,872
Yeah.
667
00:29:12,905 --> 00:29:14,375
plan to pay back the loans.
668
00:29:14,375 --> 00:29:17,865
If you look at this as a piggy bank
that you were just going to raid
669
00:29:17,865 --> 00:29:21,015
and never have a plan to pay it
back, then this is gonna fall apart.
670
00:29:21,105 --> 00:29:23,925
And so that's why at the beginning of
the book, Nelson spends all that time on
671
00:29:23,925 --> 00:29:25,455
the human factors and what goes into it.
672
00:29:25,665 --> 00:29:28,605
But this all works as long as
you actually play on a banker.
673
00:29:28,975 --> 00:29:29,275
Yep.
674
00:29:29,365 --> 00:29:30,415
Yeah, exactly.
675
00:29:30,415 --> 00:29:32,215
Back into the problem section.
676
00:29:32,635 --> 00:29:36,715
It the human element is also the problem
and it assumes that we take care of that
677
00:29:36,715 --> 00:29:41,185
or crush those human elements to make all
this function, which you need to anyway.
678
00:29:41,185 --> 00:29:43,345
I mean, you'd have to do that in
your own personal world anyway.
679
00:29:43,345 --> 00:29:45,835
'cause you gotta build a bank,
you gotta build a savings account.
680
00:29:45,835 --> 00:29:47,185
So we're just keeping it.
681
00:29:47,875 --> 00:29:48,265
Our own.
682
00:29:48,805 --> 00:29:53,845
So that's, that's ultimately on the
solution side of things where we end up
683
00:29:53,845 --> 00:29:58,185
with, insurance policies, which ones are
best suited for what we're doing, which
684
00:29:58,190 --> 00:29:59,885
is, quite literally only whole life.
685
00:29:59,965 --> 00:30:02,095
dividend paying, whole life insurance.
686
00:30:02,455 --> 00:30:06,505
but that's, that's ultimately where
we end up at in the, in the solution.
687
00:30:06,965 --> 00:30:07,475
This was awesome.
688
00:30:07,475 --> 00:30:08,165
Thanks Scott.
689
00:30:08,407 --> 00:30:08,767
Cool.
690
00:30:08,885 --> 00:30:09,665
you putting this together.
691
00:30:10,237 --> 00:30:11,737
Yeah, no, it's good.
692
00:30:11,767 --> 00:30:15,577
Like I said, it's good to go back
through stuff and, you know, even if it's
693
00:30:15,577 --> 00:30:18,937
skimming through, just to kind of keep
a structure going and keep a dialogue
694
00:30:18,937 --> 00:30:20,797
going and keeping your mind working on it.
695
00:30:21,129 --> 00:30:23,899
Next time around, we'll start
getting into more implementation.
696
00:30:24,299 --> 00:30:27,119
specifically how it
works, on the user side.
697
00:30:27,459 --> 00:30:31,029
how it offers a safety,
security, contractual guarantees.
698
00:30:31,079 --> 00:30:35,149
how we don't assume that risk and what
that does for us in our, everyday life.
699
00:30:35,509 --> 00:30:38,809
implementation was a good subject
too, so looking forward to that one.
700
00:30:39,712 --> 00:30:40,012
All right.
701
00:30:40,042 --> 00:30:40,402
Awesome.
702
00:30:40,402 --> 00:30:43,402
Well, thanks everybody for watching
or listening, however you're taking
703
00:30:43,402 --> 00:30:44,992
in the Infinite Mindset Podcast.
704
00:30:44,992 --> 00:30:46,132
We hope to see you on the next one.
705
00:30:46,312 --> 00:30:48,502
If you like what you heard, give
us a thumbs up, a decent review.
706
00:30:48,502 --> 00:30:51,442
If you don't like it as well, please give
us some feedback and we'll try and adjust.
707
00:30:51,502 --> 00:30:52,372
Hope to see you on the next one.
708
00:30:52,894 --> 00:30:56,434
If there's anything that you want us to
cover, make sure you let us know because
709
00:30:56,434 --> 00:31:00,604
we have implementation on NNI and then
we'll start getting into just other stuff.
710
00:31:00,604 --> 00:31:02,254
We've got some ideas in the future.
711
00:31:02,364 --> 00:31:05,364
What to talk about, but any input
or anything that you wanna know
712
00:31:05,364 --> 00:31:07,884
more about, even if it only takes
part of an episode that we can
713
00:31:07,884 --> 00:31:09,354
get into with you, let us know.
714
00:31:09,652 --> 00:31:10,567
Without a doubt.
715
00:31:10,627 --> 00:31:10,837
All right.
716
00:31:10,837 --> 00:31:11,257
Thanks guys.
717
00:31:11,257 --> 00:31:11,797
See you next time.
718
00:31:12,234 --> 00:31:12,534
See ya.
719
00:31:16,225 --> 00:31:18,025
Thanks for tuning into
the infinite mindset.
720
00:31:18,505 --> 00:31:21,595
If you found today's conversation
valuable, share it with someone who's
721
00:31:21,595 --> 00:31:25,105
ready to think differently about
finances, and don't forget to subscribe.
722
00:31:25,465 --> 00:31:28,225
Your journey to financial freedom
starts with the right mindset.
