I’ve said it before, and I will say it again: NOT ALL INFINITE BANKING POLICIES ARE MADE EQUAL.
Learn why most insurance agents don’t show you the best options and how to spot a good policy from a great one. I am sharing personal stories and comparisons to highlight the importance of minimizing insurance costs to keep more money in your pocket. I
f you’re curious about passive income and financial freedom, this episode is packed with valuable tips and real-life examples to help you on your journey. Tune in now!
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Speaker 1 (00:00):
You don’t use your investment money to fund it. In the beginning I use, we have that as a rule in our company. The first verbal warning is already there that 99 plus percent of the time, no one meets our numbers. They might match ’em, but they don’t beat them. And the reason is because,
(00:31)
Hello, my fellow Ripples. This is Chris Miles, your cashflow expert in anti Financianal advisor. The show is for you, those that work so hard for your money and you’re now ready for your money to start working harder for you today. You want that freedom and cashflow right now, not 30 or 40 years from now. So you can live that life that you love with those that you love. But it’s not just about getting rich, is it? It’s about living a rich life because as you are blessed financially, you now have a greater capacity to bless the lives of those around you. That is exactly the purpose of this show today. Thank you for tuning in for binging and sharing and creating your own ripple effect in the world today as well. And thank you for allowing me to create that ripple effect through you guys definitely want to remind you of this.
(01:09)
If you are wondering how much passive income you could create in the next 12 months or so, you want to figure out what your situation is actually possible. We have an assessment, we have a calculator online@moneyripples.com. You could try out today to see what kind of passive income you could create. And by the way, don’t be discouraged if that number is a low number or a negative number. It just means we’ve got to save more. And the topic today we’re going to talk about is going to talk about ways to do just that. So be sure to check that out today@moneyripples.com. Alright, so I’m often asked in all kinds of varieties, people are always saying, okay Chris, how do I know I have the best infinite banking policy out there? How do I know it’s the best thing? And I tell my clients all the time, they got the best, but sometimes they don’t know this because they may have just gone right to us.
(01:56)
And many of you have done this too. I know many of you listening are also clients of ours, not just on the consulting side where you hire us to be like your anti financianal advisors so to speak and help consult you on passive income, but many of you have actually worked with us on designing the best infinite banking policy possible in your situation. And so I want to go over what that really is because the truth is is that most insurance agents don’t want to show you much publicly because they’re afraid people will steal their stuff. The truth is it’s all fighting with each other and they still suck. One thing you have to understand too is that my perspective is not coming from being an insurance agent, although I have an insurance license for the last really now it’s been over 22 years, even though that’s the case, I started out more being an investor first.
(02:43)
Granted, I started out as being a financial advisor first. I get it, yes. But after I left that industry, I learned about infinite banking and things like that and how do you create the max ROI. Infinite banking, I didn’t learn until years later. I was an investor first and foremost. I became passively investing. I became financially independent that way first before I really got into this stuff. So I’ll tell you this, you don’t need infinite banking to become financially free, but man, had I known how to do this years ago, 20 years ago when I set up my own policy, and actually I should say somebody else set it up for me that didn’t do a great job, if I had done it the right way, it would’ve been a different story. And I say the reason I say it wasn’t done well is because I first learned about this.
(03:25)
I was breaking into the real estate world. I was starting to realize that I could make a lot more money passively investing in real estate based or backed assets. And so everybody was talking about in this group, this circle, and this is a circle like Garrett Gunderson was a part of. And then I started to get into this circle too, and everybody’s talking about how amazing this infinite banking concept by Nelson Nash is. Well, long story short, I became really good friends of the guy that sold me the policy. He was the one that many people recommended. I figured he had it figured out even though I was a financial advisor for four years prior, I didn’t know anything about whole life insurance. I thought whole life was a big ripoff. Well, I ended up getting the policy, I was putting a thousand dollars a month into this policy and I thought, cool, I’ve got it going now, remember looking at the numbers thinking, man, I have no cash value in those first few years.
(04:14)
That’s the tax-free savings account inside of it. I have no cash in those first few years. And he said, yeah, that’s the way these work. But they get cheaper over time as opposed to the other types of strategies I was looking at like term or universal life and those ones that get more expensive over time. So I said, okay, I’ll trust you. Two years later, the recession hits, it’s 2008. I am in the hole. You guys know my story. I went over a million dollars in debt. I was over 15,000 to 16,000 or so in the hole each month. I couldn’t keep paying a thousand dollars a month if I’m in the hole that much. So I eventually had to stop paying my premiums and of course because there’s no cash in that policy, it died. Now I had paid at that point, 25 grand into my policy, wanted to watch it all disappear along with the death benefit and everything.
(04:59)
And I thought, man, that stinks because that’s so much money I put into this to now not have it. Two years later, well months later, I’m speaking with a friend of mine and he says, Chris, did you know you could actually overfund these policies? This friend had bought a policy from the same guy as I did. I said, wait a minute. I asked this guy point Blake if I could add more or if I could make this richer with cash. He said, no. He said he was wrong. You could, well, I did my own research, I did my own numbers. I still had a life insurance license, so I did my own thing, found out he’s right. I could have actually from day one had cash in these policies instead of it going to pay for all the insurance costs upfront. Well, I’ll tell you what, I had a pretty interesting debate with that guy.
(05:42)
I actually showed him numbers. I showed him how I could still even match his death benefit. He said the death benefits the most important thing and as a result what happened? I kicked the crap out of everything he talked about, including his numbers, and he says, Chris, I did it that way. I couldn’t afford to cut my commissions. And that was at that point I realized, man, even people that could talk good values or even have some good values, and he was a great person overall, but still when it came down to it, the problem was even though he knew he could do it better, he did it because that’s how he made his money. He wasn’t an investor, he was an insurance agent. And that’s one of the biggest issues I see out there today is that there’s insurance agents just going out there and that’s how they make all their money.
(06:23)
They don’t make it from real estate. Now some even do some real estate investing, don’t get me wrong, but they still have this conflict of interest. They still think, well, if I make a little bit of money but I still make my clients a little bit money, maybe they go in the middle between where my friend is versus what we teach today, then it’s good enough. I don’t think that’s the case. I think it should always be that the client’s best interest every time, not the insurance agent’s best interest but the client’s best interest. In fact, we have that as a rule in our company. The first verbal warning is already there that you do not break this rule. You give the client the best every single time. If you violate that, you’re out. There’s no warning after that you’re gone. Okay? And that’s a very strict rule we have.
(07:02)
So I want to show you what that looks like because what I was seeing I saw is that I would’ve to put in all this money for two years and there would be zero cash in there. It would go all to insurance costs, which by the way, it’s the insurance costs that pay the insurance agent. The more that you pay an insurance cost, the more the agent makes. That’s the correlation. So what we try to do is minimize insurance costs as low as we could possibly go. So the short answer is this, how do you get the best design policy? Well, you can get the lowest death benefit potential or the lowest cost of death benefit so that your policy can grow more. What we do is we reverse engineer. We figure out what’s the maximum amount of cash you want to contribute every year and what’s the minimum death benefit needed to allow that money to stay tax free so it doesn’t break it and all of a sudden gets taxed.
(07:47)
That’s what we go for. We always figure out what’s the minimum death benefit needed to allow X amount of dollars to go in every single year, and we figure that out based on your budget. For example, if you can save $20,000 a year, we’re probably going to recommend not putting in more than 20,000 a year. It’s probably going to be closer to like 12 to 15,000 a year. We might recommend many people we get, of course they’re maxing out 4 0 1 Ks, they want to switch and so they’re saying, I’m already putting in 20,000 a year. Let’s switch that over to here instead. And so we do that. If someone wants put away, if they’re normally putting away 50,000 a year, we might recommend 40,000 a year. If they want to put away a hundred thousand a year, we might recommend 80 or 90,000 a year max, and that’s not even the minimum required premium.
(08:24)
And you’ll see what I mean in just a minute here when I show this comparison. And so I was speaking at an event and this guy approached me. He was actually the brother of one of the people I was speaking with. Now the brother had already bragged to me that he already had an infinite bank policy and was amazing, and I told him after he told me a little bit more about it, I said, yeah, I would agree it was done really well. Granted, this guy had put in the guy that presented at this event, he was putting in a couple million dollars upfront, so the insurance agent cut him a break. He said, you know what? I can cut my commissions back now, but he didn’t do that for his own younger brother. His younger brother was coming in saying, Hey, I’m going to be put in at 10,000 year and understand his brother, younger brother was excited.
(09:02)
He’s like, yeah, I got the same guy that my older brother got in with and I’ve got the best. I said, really? Well show it to me. Here’s what he showed me. Now I know it’s hard to see here, but this is basically what it shows. It shows him putting in, you see on the left hand side, this guy is course in his early thirties. He’s putting in 10,000 a year for 10 years and then after the 10th year he puts in over 2,800 a year for the rest of his life. That’s how it’s showing the numbers. I’m only showing the first 35 years, which takes him to his late sixties. Now 10,000 year he is putting in this buys him a little over quarter million dollars death benefit, which is fine and all, but you’ll notice after 10 years he puts in $10,000. That’s a hundred thousand he put away, he has $103,000 in here.
(09:45)
Also, notice I didn’t highlight, I should have highlighted, but year one, if you can see it, the net cash value, this is that tax-free savings account. This is what’s left over after the insurance costs come out, he has just under $7,000 69 87, right? That’s what he has in there. So when he told this to me, I said, well, listen, you’re young. You’re in good health, I assume. He’s like, yeah, I am. I said, well, look at this. I mean they’re showing you the best numbers supposedly, and by the way, this is a very popular company, especially if on YouTube you’re watching infinite banking videos. It’s very possible. You’ve actually seen some of these people’s videos and they claim that they’ve got the best and this is actually better than usual. Usually you’d see not out of 10,000 going in, you might see 6,000 in here.
(10:29)
He quote, cut ’em a break allowing only about $3,000 of costs coming out, and I told him, I said, you still overpaid, even though they cut you a deal supposedly because of your relationship with your brother, it still wasn’t as good as they could have done. And I said, that’s a problem because even in year one it should be cheaper than that. You should actually have probably about a thousand dollars more than that, 69 87, and so that really implies you’re overpaying a thousand dollars a year, an extra 10% a year that you’re losing in return because of this. Now, of course, he didn’t really believe it, so what we do, we gave him another quote. We said, here we’ll do Apple’s apple comparison showing this. Just so you know on this one, you’ll notice at age 68, he’s still paying forever. That 2,800 is the minimum he has to pay.
(11:16)
He doesn’t have to pay 10 grand every year, but he has to pay the 2,800. But notice even after those 35 years, he’s got about $383,000. Here’s what we showed. So we showed ’em the same $10,000 a year and you’ll see here 10,000 a year, right? But look after year 10, 118,000, remember the other one was 103,000. There’s already $15,000 more after 10 years. Remember what I said about that first year look, 79, 82, almost exactly a thousand dollars less in costs coming out, allowing a thousand more to go in his cash account. That’s more cash in his pocket, and of course after 10 years, guess what? Now with compounding interest and everything else adds up to be over $15,000 after just the 10 years, he now has 118,000. By the way, he actually broke even almost in year five rather than waiting till the 10th year to finally have more than what he paid in.
(12:10)
But year five, he had almost the same exact money as we paid in by year six. It was just over. Notice his minimum too. I highlighted that as well. Year eleven, eighteen fifty two. You recall in the other example, that example was showing about 2,800, so again, a thousand dollars more that he was supposed to be paying, and he was by the way, in underwriting with this other company, he was actually in process about to do it thinking he had the best, but in truth, he was paying overpaying a thousand dollars in costs that were just paying the insurance company and commissions more. By the way, notice that the death benefit actually is over a quarter million, so the death benefit’s about the same, but it’s just better. It’s more efficient, less insurance costs are coming out. The thing I love about this, by the way, is that third column from the right shows you what’s the net cost versus gain compared to what you’re paying into it.
(13:04)
You’ll notice by year three only if there’s only an $85 net cost, so almost every dollar he’s putting in by year three is going in right to that cash. He grew by 9,900 that year. That’s assuming by the way, lower dividend rates than what next year’s going to be. By year four. It goes up and then of course it’s making thousand dollars more a year notice on the next page because even by the way, 25 years in, not 35 years, in 25 years in, he’s got 293,000. In that other example, he only had $90,000 more after 10 more years. Watch what happens here. So two things happen here. One is I had him stop paying premiums even though he’s paying about a thousand dollars less a year. So remember he’s already paying a thousand less a year for 25 years. That’s 25,000 less paid in premiums up to this point, and you’ll notice I highlighted right there in yellow, those next four years, zero, I had him do a paid up policy where he’s paying nothing in for the rest of his life.
(13:59)
That means the rest of life he pays nothing. The other example was shown him paying premiums the rest of his life. So not only is he not paying an extra 25,000 in insurance costs or in those premiums, he’s also not paying those four years of 1852, which means now he’s saving another 7,500. So really we’ll even just round down, he’s paying $32,000 less in the same period of time, but look right there, he’s got basically a half a million dollars. The other one was 383,000, so he’s got over 110,000 more while paying $32,000 less. Does that make sense? I mean, now you might say, okay, I’m lost in the numbers, Chris, but basically here’s the deal. Less cost coming out of your pocket means more money back in your pocket. That’s what happened to the of even though him paying $32,000 less, he still has over a hundred thousand dollars more paying the same that he was going to be paying or really 32,000 less than he was going to be paying.
(15:02)
And of course, because there’s always somebody that argues like, well, the death benefit, the death benefit still now three quarters of a million dollars. Remember he started about a quarter million dollars. He’s got three quarters of a million dollars after that many years, he actually has a higher death benefit because he has higher cash than the other one. That is a big deal. Let me even just go back to show you again, just so you see it. So look at it again, right there at age 68, remember he’s paying 28 37 the whole time, so he is paying again a thousand dollars more a year and he’s got $383,000 guys versus 499, almost 500,000, so he’s got really $116,000 more by paying 32,000 less and look at the death benefit, 700,000 there. We still had about 70,000 more of death benefit too, so you can have your cake and eat it too, and that’s my point guys.
(15:52)
It’s hard to tell whether you have the best deal or not unless you shop around and I recommend it. I actually had somebody just tell me today because, well, unfortunately we took a little bit too long shopping, helping him shop around, and by the time we got responses back from insurance companies, somebody else has said here, here’s a good deal, and he went for it. I don’t know if it is a better deal or not, but the one thing I can guarantee is this is that 99 plus percent of the time, no one beats our numbers. They might match ’em, but they don’t beat them, and the reason is because we come back to the same thing, which is how do you look at this as getting the best deal for you? It requires doing the least amount of cost, and here’s the crazy thing, guys.
(16:32)
Insurance agents don’t want to do that because they’re afraid of sacrificing their livelihood. They’re afraid of making less money. Guys, the thing is, I’ve done this part-time before. I’m no longer really doing it actively, but I’ve made over a million dollars a year doing it part-time. Why? Because when people know that you’re trying to do the best thing for them, especially if in this guy’s case, only 20% comes out in the most expensive year and it’s paying for itself by about year three or four when he realized this, it’s like, well, dang, I could do more because my minimum premium is lower, so I’m not required to do all this match, but I can do more. That’s what happened with one of my friends that owns a real estate company. He was only putting away a little over 6,000 a year into a crappy policy just like the one I bought early on where he put in over about $37,000 guys, and then he came to me six years later saying, Chris, you’re right.
(17:22)
That guy is a schmuck because now six years later, I’ve put in 37,000. I only have 18,000 bucks in here. What am I wasting my money on? When I showed him he could do it better and buy a year, five or six or so have at least as much money as he paid into it, not waiting 15 to 20 years like the normal policy is. What did he do? He decided to put in $50,000 a year. By the way, since then, he’s also done another a hundred thousand dollars a year on top of that. Why? Because he knew that it was in his best interest, not the agent’s best interest. That’s the difference, guys. This is one of the reasons why I came back into this specific field after I retired the second time after 2016 going to 2017, I saw this as a problem.
(18:06)
So many agents out there, even the good ones, even the ones that I was trusting to send my friends and my clients to, were still not giving people the best every time they were just doing it based on however they felt like doing. There should be a system. There should be a system that every time you give them the best, every single time, no bs, no exceptions, no buts, give ’em the best every single time. That’s what ticks me off and that’s why we actually came back in the industry and now we’re disrupting it. Now we’re actually becoming some of the leaders in the infinite banking space after really since what’s been seven years now, right? It’s not that we haven’t done it for seven years or less, so obviously we’ve done it longer, but now we’ve just taken over. We brought it in-house because we couldn’t trust people that we were referring to.
(18:51)
Good people, they’re good people, but when their self-interest gets involved, just like other financial advisors, right? When their pocketbooks on the line, they try to figure out, well, can I take a little bit higher cut of this or that? Can I do this or that to make myself a little bit more money? I can promise you if they actually had an abundance mentality and they would trust that true principles always work, that when you do what’s best for people, you always gets what’s best in return. What you sow is what you reap. That law of the harvest taught in the Bible, what works every time, but it’s a huge amount of faith for those guys because the honest truth is they don’t have the faith in that principle fully, right? They think if I just do good enough, if I do a good job, not the best job, but a good job, my clients will be happy.
(19:33)
You shouldn’t be happy with just good enough. You should be happy with doing the best every single time. That’s the biggest issue that I see. That’s why literally we’ve saved people sometimes thousands of dollars or in his case, over a hundred thousand dollars with really putting in less money, right? He’s making a hundred thousand more because of that. Apples to apples, and we’ve had other people too, has been into the millions doing apples. Apples, same thing. Not even trying to over promise on returns. In fact, some of ’em might even get better results than what they were thinking before. That’s the difference, guys, that this should be best for you. Death benefit, there’s a great need for that, but the truth is we can always get a small cheap term policy to make up the death benefit if somebody’s really concerned about that. By the way, I just bought 3 million more of term on myself because I thought, you know what?
(20:20)
I need to have more coverage because as my wealth grows, I need to protect more of that. I need to protect more from taxes potentially, especially if lawmakers go crazy trying to figure out how to pay for social security and stuff. I know that we need to protect our wealth, and so that’s why I buy term insurance too, but when I do my life insurance, I do yours the same way that I do my own. The way we do it is the same way we do it for ourselves. There’s no difference at all, and that is the way it should be. Remember, you want someone who thinks like an investor first and then insurance person second, right? That’s the key. I’ll also give you this one other tip too. How do you fund it? How do you decide how much you fund? Granted, it’s better just to book a call and I would just suggest if you want to know more, go to money ripples.com.
(21:02)
You could book a call under the infinite banking section there, but I’ll just say this simply, we’re telling people when it comes to investing, because again, we think investors, people are like, yeah, but if I put my money in here, then I don’t have as much money to invest because look, those costs come out even though you’re lower the cost, Chris, still, that’s less money to invest. Guys, the strategy is this. You don’t use your investment money to fund it. In the beginning, I use, I have people use their emergency funds, use your money that you already have sitting in a bank earning point, nothing percent, and maybe you’re in a high yield savings account earning three, four, maybe 5%, but you got to pay tax that money. Why not put it into place where it’s going to earn over 5% tax free like these accounts do?
(21:45)
It’s just diversifying your savings to somewhere else where you can make a better return. It’s protected from losses of creditors in almost every state. Some states only do limited protection. Most states though, a hundred percent protection. You have millions of dollars in here and you cannot lose it if you get sued, right? That’s huge. Or you have creditors that you owe money to. There’s judgments and liens against you. They cannot get to this money. That’s a big thing for your peace of mind, and it’s basically a liquid, like a savings account. Now, you won’t walk into a bank, but about a week or so later, you have the funds electronically transferred to your account. So I put the bulk of my emergency fund in my life insurance because it’s going to make more money and it’s protected from creditors and lawsuits. It’s a no-brainer for me.
(22:28)
I have people fund it using their emergency fund over those first few years. When there’s net costs, guess what? When there’s not the net costing more, now there’s a net gain. Guess they’re using. They’ve already been investing all their investment money earning passive income that’s been building up as well on the side. They’re like, I’ve got extra cash. Now what? Cool. Now you can take that cash and use that to go in here and because there’s no net cost anymore because now it’s making more dividends than the cost in insurance costs, guess what? You just use that to build your savings and then you can invest from there at that point if you want to or do it however you want. That’s how people fund it. That’s how we’re teaching our clients to do it so that it doesn’t take away from your investing. In fact, it actually works hand in hand with it.
(23:07)
It’s your emergency reserve first. Then it becomes something that you can actually earn money in two places at once when you invest with it. That’s a whole nother topic. You can watch our masterclasses on our Money Ripples podcast channel. If you look at the live section on this Money Ripples podcast channel, you’ll actually see, this is on YouTube I’m referring to. You’ll actually see we’ve got courses just about that very topic, so my recommendation is this. You need to have the best every single time and you need to have somebody who actually gets the perspective of how to do it as an investor. If you want help with that or you want to know more, again, reach out to us@moneyripples.com. You can look us up. You can even book an appointment right there, but I will tell you guys, it’s so cool when it’s done right?
(23:46)
I used to argue against it. I used to hate it. I thought it was a waste of money before I did it, and then after I did it. When it’s done right now, you realize like, wait a minute. This thing can actually boost and accelerate my goals towards creating more passive income faster, especially when it starts paying you more interest in your bank account will, and you can use it to invest too. It’s pretty awesome guys. So anyways, you have questions, reach out to us, but my point is this. Look for how you can cut the cost as low as you can go while keeping it tax free. That is the secret to getting the best design infinite banking policy. That’s why we call it Max ROI, infinite Banking Guys, make a wonderful prosperous week. We’ll see you later.