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[Music] Bank on yourself it's a really really freaking cool name but what is it and what does it actually do for you so a few years back right before I got into finance two guys approached me and they said Curtis we really want to show you this really amazing system that's gonna completely change your idea on how you run your business and your finances and it's called Bank on yourself for infinite banking come to a steak dinner with us and we'll totally show you how it works so I bought in I went to this steak dinner and they showed me this new system and this system really actually blew my mind it had some things in it that I'd never seen before first guaranteed rate of return I could never lose my money it had a dividend I'd paid out for like 10 million straight year so I was almost guaranteed it came with life insurance which is good because I'm a married with five kids had tax-free income tax free wealth transfer legal protections of all my money no penalties and the most important thing that was most attractive to me is that could leverage my money it was leverageable my money was accessible I could use it to buy equipment I could pay off debt I could do all the fun things I always did with the money inside of my business I bought in I signed the application I went through underwriting I did everything I supposed to do all the way to contract they were bringing it over to sign I was gonna sign my first check and luckily for me I have a great wife she walked up to me and she said but Curtis how much money does it actually make us up to that point I had never even considered the numbers how much money had actually made for me because all this was so attractive I mean when he does tell me all this stuff I'm like I'm in but didn't make any money so I got the illustration and my mind was blown what actually happened inside these whole life policies so I'm gonna explain that real quick what happens so inside these policies you get this guarantee right here is the guarantee and it's typically between three and four percent you're gonna get this guarantee inside the thing and a dividend is between one and two percent so collectively you're gonna get about five to six percent in the system that sounds pretty good right a near guarantee of five to six percent but when you understand compounding interest not so good had the life insurance had all these different things I could borrow around five to six percent ID accessibility everything seemed fine until I started comparing it then I noticed that on the income they said curse you're gonna have about fifty thousand dollars income I said okay that's not bad you know I'm not putting in that much money on fifty thousand dollars income then I really started looking at the numbers and something crazy happened how expensive these life insurance policies are for the first ten to fifteen years inside this Bank on your self policy it makes the zero dollars nothing so if you put in ten thousand dollars a year and you run it out for fifteen years that's a hundred and fifty thousand dollars you put into the system and guess how much cash value you'd have at that point time around a hundred and fifty thousand and I'll tell you that another thing it's not inflation proof so this is gonna guarantee you X amount of money but what if inflation goes up past the three percent or what if it blows up and gets a lot of inflation you're still only guaranteed to five hundred thousand so that five hundred thousand or the fifty thousand dollars of income was actually only going only going to produce about twenty five thousand dollars of income of today's buying power because in thirty years from now when I go to retire inflation doubles your cost so now this inflation is only gonna be twenty five thousand dollars income even though it told me I was going to get a near guarantee of fifty and lastly I noticed like I just said it doesn't make any money it wasn't designed to make any money it was designed to protect your money and it does protect you it just can't make very much compounding interest cuz it wasn't designed that way because of these features the expensiveness no inflation and it really isn't designed to do income so by the end of it I'm gonna give fifty thousand dollars income in 1999 something really cool happened the insurance world came out with something they wanted to start competing with the money managers they wanted to produce a project to compete with the 401 k IRA and they did and it's called an i UL indexed universal life and although it has its flaws don't get me wrong there are some problems with this system it changed the script of the whole game on a whole life bank on yourself you still got the life insurance you still got the tax you still got all this stuff legal advantage penalties and leverage ability but it changed it start focusing on growing your money more than the guarantee of the three to four percent inside this system in 1999 they gave you a zero percent floor meaning your money was 100% contractually guaranteed not to lose that's what they guaranteed rather than guaranteed a three to four percent they guarantee that you wouldn't lose then they would take part of your money and go and go invest it really aggressively they would go try to get a lot of money for you grow your money focus on compounding interest and they did it they produced a system that could get up to around 12% interest according to the S&P 500 so whatever the S&P 500 does between 0 and 12 percent you can get all of it and since 1990 92 to 2018 now it averaged around 7% you would think 5 percent 5 to 6% and 7% are almost the same but they're not they're completely different when you include compound interest into this so I started running the numbers and saying hey I'd be into 30 years how much money do I have if I put in $10,000 a year every year for 30 straight years into this bank on yourself I would have around $500,000 of cash value I had in I had put in 300,000 and I only have 500,000 after 30 years it made me $200,000 of compounding interest not very good because this doesn't make very much money in this exact same situation putting $10,000 for 30 years into this indexed universal life the cash value was nine hundred thousand four hundred thousand dollars difference just by a few percent difference being a little bit more aggressive being a conservative risk-taker getting the 0% floor so we have our security but then pushing the limits to get maximum rate of return this right here produces around a $25,000 income that's all this one nine hundred thousand focused on compounding interest and income produces $80,000 to income would you want 25 with a guarantee or 80 with a zero percent floor guarantee and then go play the market conservative risk-taking is the key get your security and then push the nth limit then one day I said why not use this leverage feature this is a really really cool feature you can borrow money against your cash value from the insurance company let you take lines of credit against them to go do whatever you want with it what if we combine the two 0% floor making a good red return and then leverage it what does that look like what do these numbers start looking like using 1989 S&P 500 results all the way to 2018 real live data what would have happened if you started in 1989 to 2018 what would this account value now look like 1.9 million with security with a good compound interest with leverage but more importantly it's focused on income so what is your income off of 1.9 million dollar nest egg inside of this system two hundred and forty five thousand annual income spendable every single year do you want twenty five thousand of annual spendable income eighty thousand or two hundred and forty five thousand this system is called M P I max among premium indexing and is the first and only system on the planet that focused on security maximum rate of return and then leveraging it in every possible aspect to maximize the compounding interest in your account [Music] [Music]