How to industry sign banking colorado ppt later
if you make a cash purchase you've got to have the cash accumulated right somewhere I had to cash I could have paid $30,000 for the truck but I didn't I Bank wire transferred that money into an existing life insurance policy and this is what I'm going to show you now look what I put together today is is just an example of a loan and we have many masterminds in in my practice groups of clients that we share ideas with in concepts and I put it together for them just to show the timeline of a loan you know Nelson's talking about alone he's illustrating loans and and I just put this together for a timeline in the beginning but there's so much that you can see from using a policy I created it a couple of years ago and then I'm just going to continue to add to it okay if you have any questions you know I'll be more than happy to answer them in my practice we use about five different life insurance companies at the end of the day I don't really care who they are you want to practice banking you need a good strong mutual company right properly structured life insurance policy and then you need to go learn how to use it and you learn how to use it by using it right and it's really that simple of course Nelson gets it done he created the four basics think long range don't be afraid to capitalize don't steal the piece and don't do business with banks it's really really simple guys in my industry you give us enough time and we'll complicate the fire out of it it is extremely simple okay now this is a real life policy and the reason here let me back up a minute the reason I wanted to do this why in the world would I use a life insurance policy we can all go to the bank we can all go to the credit card company the third party lender we go to our family members that have qualified plans you know they can borrow money from them why would I want to take the time to set up a life insurance policy build capital in there and then borrow from it and I'm just trying to share or show some of what really happens in a policy when you do that now there's no magic in loans all right you can't get rich borrowing money just because you're borrowing money that's what are you doing with that capital right you're the most profitable thing you have going using your god-given abilities and talents there's no magic in loans or debt it's what you do with that capital that makes sense do you agree with that okay so look we're all we're all busy extremely busy there's no question but we're all also banking every one of us are banking right okay so just looking at a at a policy I want to consider the timeline of a loan the loan what does it take to get a loan what does it look like how do I want to repay the loan don't want to pay the loan off early and be forced to go buy another policy or do I not you know the banker can do anything he wants okay it's who is the banker so we're just going to look at the timeline and the effects of a policy and I want to demonstrate and Nelson has clearly in his book demonstrated that the actions of the owner of the policy have a greater bearing on the results than even the insurance company I just want a strong relp well-run mutual company I don't care who they are and now I'd prefer them to be open to this concept right I mean don't make it difficult for me to get a loan right now I want to access to my capital so I want to you know at least to have a a good attitude or a like mine right I want them to know what I'm doing and I don't want them to work against me okay some of the companies do now look we're going back in time this is a real life policy this is not my clicker me and the clicker we're just now getting to know each other okay this is December 2014 and I've got this up here just to show that yep I'm as busy as you are we're all busy right there working me like a Hebrew slave right up until Christmas right so my heart my heart goes out to you I get it why do I want to take the time and use a policy to Bank all right no I live on the country you know and my dogs get in the back of my truck I Drive trucks and I Drive them to the wheels fall off of them okay I get 10 years out of a truck all right so here's just a calendar December y'all seen how am i how full my schedule was right Friday morning I go out to the truck and it starts making the noise you know and I grew up in the car business when I was a boy my daddy was in the car business this was making a bad kind of noise I'm not going to shade-tree mechanic it ain't gonna be you know dicks it's gonna lay them so sure enough you know it it's confirmed dead my truck I have a client they happen to had the largest pre-owned automobile dealership in Fort Worth taxes right and they they understand banking as a matter of fact after a couple of months you know after they became my client a couple of months into our relationship he said to me James you know we're in the banking business cars are a byproduct and he's absolutely right hey third-generation car lot so I call them if they look I need a car I need a truck can you help me out they said yeah what are you looking for James a Chevrolet a Ford or Dodge and I said yes please right and he said well what do you want to spend we can get you a 2015 for about $30,000 we get you a 2014 for about 27th out and dollars and then we could probably just get you a late model low mileage truck for about 25,000 what do you want to do and I said that's exactly what I want to do thank you right I just need a truck okay so they said okay no problem so now in my mind I'm gonna spend $30,000 for a truck I don't know what he's gonna find he's gonna be a Chevrolet a Dodge or a four-door and I'm gonna spend up to $30,000 you know what you can spend on trucks nowadays dry 75000 I mean my house didn't cost that much okay so he calls me a couple of days later and he says James we we found a truck you probably wouldn't be interested in it you know it's a it's an older truck but it's really low mileage one owner but it doesn't have leather so it's probably not your speed I'm like what is it he said well it's a 2010 Dodge truck but it's one owner is strong for doors and I'm like okay he said you want to drive it I said sure so he brings it down okay I don't know if I'm gonna lock the truck or not he was gracious to let me drive it okay so it's a strong truck I decided I liked it so I'm still thinking I'm going to spend $30,000 on a truck though right I can pay him if if you make a cash purchase you've got to have the cash accumulated right somewhere I had to cash I could have paid $30,000 for the truck but I didn't I bank wire transferred that money into an existing life insurance policy and this is what I'm going to show you okay all right I know these numbers are small but I married up like all you guys in the room come on y'all that was good I married up just like y'all all right my wife she's younger than me she was 39 years old when we bought this policy and this was purchased in 2010 this illustration was ran in 2011 and I'll prove all this right so in 2010 I put $10,000 into this policy the company said I'd have about eighty one hundred eighty three hundred eighty one thirty in cash value at the end of the year now you know that when you talk about life insurance everybody wants to stay and there's two sides to this illustration this is a guaranteed side this is a non guaranteed side because this side has the dividends all right everybody says now look that's the guarantees over here all right let's talk about this side I tell them no this is a mutual company they pay dividends they've never failed to pay dividends whoever this company is alright so we're going to use this side of the ledger because I'm going to include that dividend these companies if they know how many people are going to die next year they got a pretty good idea of what they can pay in a dividend does that make sense okay so and I'm just going back to the basis right the original illustration they said I'd have 80 130 dollars in cash value all right that's 2010 projecting forward and if you look September 14th of well that's not the it is a September policy anniversary I believe September of 2010 y'all think about what the stock market did through 2010 and 2011 okay this company is projecting out from there and I got to tell you as soon as I hit print on this illustration it's wrong it's wrong as soon as I hit print all right as soon as I hit print it's wrong because this company can't illustrate what I'm going to do what I'm not going to do they don't miss they don't have control over the interest rates you tell me what interest rates have done in the last years they've gone straight down they're talking about negative interest rates and in the u.s. they're already there in Europe right zero you got to pay the bank to put money in there alright so interest rates have come down Oh looky there sorry about that gentlemen ladies eighty one thirty all right so if that's 2010 that's 2011 that's 2012 13 14 that's we're at December of 2014 right okay we're actually right here 10 11 12 13 that's at the end of 2013 and they're projecting that I'd have thirteen thousand eight hundred and sixty two dollars in cash value in a three hundred and fifty two dollar death benefit but up 350 mm but I want you to see here pay ten thousand the first year and then I lowered the premium to two thousand twenty two hundred I wouldn't even write a policy like this today okay and people say well why'd you do that well I promise you the ten thousand to that eight thousand dollar difference in year two three and four it went into other policies that I own I've created a place to put money right so I'm gonna have a windfall in the future so are you all's I've done just create a place to put money okay all right looky here yeah why wouldn't I create this policy and why wouldn't I do this again I would not write a policy where there's eight thousand dollars into the PUA in 2002 the base I would not do that there's not enough money going into the base premium of this policy what it did for me though it gave me a really high cash value in year one right and I did I did we did some loans and loan repayments that I'm not illustrating here but they weren't big thank you for that question that's a great question okay so here is an annual report with it that's big it is so this is the first annual report I believe issued 2010 so this is the year ending 2014 all right so I'm four years later here's really where I'm at when I purchase the the truck now they said I'd had thirteen 867 or thirteen 862 I've got more cash value than they projected and they said I'd have a 350 $2,000 death benefit deadly accurate all right okay now because I didn't put that 888 thousand dollars a year and you're to three and year four with this particular company I have the guaranteed contractual right but not the obligation to go back in time and pay those previous PUA premiums that I didn't pay yeah really yeah yes yeah me too all right so now I had the thirty thousand dollars I'm gonna buy the truck anyway why don't I just write the man a check right okay well I have a place to put it right here how about up it did yeah I put it here first and then took a loan to purchase the truck I was going to do that anyway right okay so I'm just saying I'm just bringing this illustration up and this you know four years later an annual statement to show that there's accuracy these companies are not playing games they're not playing games with numbers on pages right these were accurate numbers okay here is the bank wire transfer December 12th that Friday a bank wire transferred the money in cost me 15 dollar it went right to my policy I called the company and I said apply it to my PUA my paid up Edition driver okay they do this for me because I can't see they could be okay I went into the bank after twelve o'clock banks don't transfer money after 12:00 all right so the insurance company did or the bank didn't transfer the money actually until that Monday now of course my friend has called me and says James do you lock that truck I said yes I love the truck don't just quit looking he said great that trucks not $30,000 I said perfect I'm getting ahead of myself here I just want you to see the insurance company on the 17th they said thank you very much for your $30,000 premium it went straight to your LP you a which is a level paid up Editions rider so it goes straight to my policy right and so there it was it was applied the next day bank wire transferred one day applied to the policy the next day now I gave them a day before I requested a loan so my bank and the insurance company wouldn't be thinking I'm trying to launder money I did it for them right and of course right in the middle of all this I'm thinking James you oughta you ought to take pictures of these things so you can put them on a PowerPoint so you can demonstrate how long it takes to put money into a policy and get money out of a policy it took me more work to do this PowerPoint than it did to get the loan right okay now when I requested that policy loan you know I had to sign a one-page form one signature in my wife had to sign because this was her policy and we're in Texas it's a community property state two signatures one page and I fax it or email it how easy is that can you do that at your bank I know you can do it the credit card no big deal right okay so I said well look over not me the cheque because I've decided to buy the truck okay and if I don't hear you over not me the cheque I'm gonna pay him $20 to overnight it here's what I was trying to get to the truck was only eighteen thousand dollars it wasn't thirty thousand dollars so now I get to practice Parkinson's Law I could have been driving the thirty thousand dollar truck I'm prepared to spend $30,000 for the truck but he shows me a great truck at eighteen thousand dollars that other twelve thousand dollars is still in that policy okay so I get the cheque overnight it to me it goes to my home on a Saturday so here's the check eighteen 140 and on Monday I'm depositing that cheque in my bank right on the way to pay for that truck right now I was going to buy the truck anyway why did I put it into my policy so there we are Monday I picked it up now here's a snapshot I'm calling the company I said look right in the middle of this I decided I should make a PowerPoint can you send me something that shows the values of my policy before I put the money in there and they said sure and so I had or she had three hundred sixty four thousand dollars in death benefit and there was 14 289 in cash value now this does show the loan but that's the cash value before the PUA was paid and before the loan was actually credited right now I'm still ahead of the illustration am I not aren't these numbers bigger than what they Illustrated and I don't care what the illustration says at the end of the day I don't care I don't care and you won't either whenever you understand what's going on in a life insurance policy that you own and you control okay all right so well what'd it look like after well the death benefits now four hundred and forty nine thousand and the cash value is thirty seven thousand 206 no I'm sorry forty-two thousand for 48 all right so let's look at this so the thirty thousand dollars out of that premium 94 percent of it went to cash you see the death benefit go up and where do I get that number fourteen 289 cash value prior to the payment 42 448 after the payment so $28,000 went to cash out of that thirty thousand dollar premium so eighteen hundred and forty-one dollars bought a paid-up death benefit of eighty four thousand three hundred forty six dollars overnight that's my wife right so now if God called her home tomorrow who do you think would get that money me or my children right and it's a one-time payment all right they didn't they didn't send me all that they didn't they did not send me a check for eighteen hundred dollars because I paid the premium right death benefit has a cost there are no deals in the life insurance industry all right they don't give away free death benefit but it's still a bargain put in 30 get a $84,000 death benefit just on a death benefit cost so the net cash value increase now will always earn interest and dividends f
rever forever alright and I was going to buy the truck anyway let me show you I want you to see they projected at $575 dividend though with that original pay schedule I'm out here in 2015 at the end of the years when the dividends paid I was at the beginning of the year when I purchased the truck right but five years ago they said well we're gonna pay a five hundred and seventy five dollar dividend well they paid six hundred and ninety dollar dividend now why'd they pay me a $690 dividend because I'm the life insurance agent and they love me right because they're paying now the cat the money went straight to the cash back it's always going to earn interest and dividends tax free forever an exponential curve right I had it already created an exponential curve in 2010 that money is going to compound and increase tax-free interest and dividends forever right now I'm just adding to that exponential curve right five years later all right look all of y'all all of me you know we all of us have one exponential curve in our life just one right all right now I made the dividend go up because I chose to put the money there I could have the money went to the brick-and-mortar bank because I don't write cheques from the life insurance third-party checks the the car dealer wasn't going to take a third-party check from the insurance company it went to a brick and mortar Bank right but I could have wrote him a check because the bank wire transfer came out of the brick and mortar bank to the insurance company couldn't I've written him a check for $30,000 anyway I was going to buy the truck why'd I put it into the policy because I could and I'm the banker and now I've affected not only this one year's dividend I've affected every dividend in the future to the positive right and that money is in the policy okay now here's what I did on an amateur ization table my office can run amateur ization tables Julie can Jake can Carol can my clients can this is just a visual calculator it shows that eighteen thousand one hundred and sixty dollar loan okay the insurance company is charging me five percent and it's only fair if they're a mutual company when I put money into the policy by contract they have to put that money to work to meet future obligations dividends death benefit and cash value right that's their obligation they've got to put that capital to work now if I have a guaranteed right to a loan up to my cash value shouldn't they at least charge me what they have to earn to meet their future obligations right if I put money into the policy they got to put it to work they've got to go earn at least five percent to meet the future cash values and death benefits so if I would if I take money from them all right because I'm using the bank's money my money's in the policy now I'm using the insurance company's money shouldn't they at least charge me what they would have to earn to meet the future obligations of course or it wouldn't be fair you could have a policy with the same company and you get interest-free loans you're affecting my dividend and the negative rate because we're both co-owners of the company right now look you get interest-free loans on new cars did Nelson talk about that they all really believe that okay you tell me how many interest-free loans you can get on a pre-owned car they won't even advertise zero percent interest on a pre-owned car this is a 2010 Dodge yes well you know I'll use all your capital you want to lend me at 1% I'll take a 1% alone all day long all right now if I have access to my capital at five I'm personally okay using your money at 1 right all right so if you if you even if you make me alone at 4 right I'm borrowing his money at 4 I'm leaving my money in the policy and I would pay 5 to get that I'm taking it's math I win in the math right but if you get mad at me our relationship gets across you show up and you want to start repossessing something or controlling the loan I'll access my capital at 5 and tell you thank you very much goodbye it's okay to use money at a cheaper rate if you want it's who has control right control and then however much you want to participate in the banking system you know if I go to the bank they're going to lend me money that didn't exist at 1% make me sign a personal guarantee and put up collateral I just don't agree with that I'd rather pay additional interest to an insurance company but that's a personal choice yes yes I'm gonna I'm just saying it's okay it's okay if the math is okay if you want to go through the math it's okay to use somebody else's money at a lesser rate [Music] might as well right because then I'm gonna really benefit and I just showed one year dividend okay I'm my wife is she's 39 at the time she's 45 now 44 her people live into the 90s there's 50 years that I've affected the dividend in a positive way yes sir wait yes no it's going straight to the insurance company because I'm using their money my money is in my policy on an exponential curve and I'm not going to do anything to interrupt restrict that exponential compounding okay and I said my her people because they're farmers from Nebraska they live into their hundreds okay thank you they're German I'm Irish my people we you know would rule the world if it wasn't for alcohol but okay so here I'm paying the insurance company five percent I'm making a loan repayment at Penn I created this amateur ization table and all this is is a visual calculator now if I pay back at ten percent I'm gonna pay back that loan in forty three months this is what Nelson was saying if you borrow money at five and you pay back at ten you're going to shorten that amateur ization table you should go and be an honest banker and purchase a new policy to put that money in right because I would owe at least three more payments or five more payments if I borrow it five eighteen thousand at five percent and I put it on a forty year or forty eight month diameter ization table but I want to pay it back at ten then I'm gonna pay that forty eight months off in forty three months does that make sense yes no no the insurance company does counting on their loans much different than we think right they they this is a five percent annual rate all right that's right at the end of the year I'm gonna have an outstanding balance next year right at the end of and they're just going to charge five percent on that outstanding balance exactly I'm not even really paying that full 5% if I stick with an amateur ization table exactly yes sir yeah the the honest banker would open the policy of at least four hundred and sixty dollars a month for at least five months well look this isn't the last thing I'm going to finance this is my truck my wife needs a car my kids need this or I want this so I should open another policy um yeah if this policy couldn't hold that cashflow that payment I should open another policy bear bear with me here all right this policy was designed to take the money to hold the money if a policy can't hold that money that additional interest then to be honest banker you should start another policy that can hold that interest does that make sense and look out of a thousand clients there's a thousand different ways to Bank okay really probably two thousand because you bank one way you learn something that you didn't know before you hear something that you didn't hear previously and you do something different bigger and better and it's okay then you should share it with somebody else that's practicing the infinite banking concept right if if the policy can take there accept it you should do that or you can do that you can do either one but to practice honest banking I should make this cash flow I should own it for forty eight months that's what I created a forty eight month loan repayment right so whether it goes into this policy or another and it should go into a policy that I own in our control great great question what under what circumstances would this policy not hold that additional interest if I got so close to the MEC limit that additional interest that that's what I'm paying on a loan it is a premium to the company and it could cause that policy to lose its prep or rental tax treatment modified endowment contract yes yep yes sir oh yeah you know what the MEC is from the beginning that's all in the design okay you know from the beginning what a MEC premium is or what the MEC limit is and these are all great questions and very good questions I want to show you what I did here though because this policy could accept that premium or that payment okay the additional interest so we borrowed it five I'm paying back at ten I'm not going to repay that loan I'm not gonna pay it early but that would require four hundred and sixty dollar a month payment if I'm borrowing eighteen thousand at ten percent and I want to finance it for forty eight months it would require a four hundred sixty dollar a month payment okay and here here's alls we're doing here's the loan here's the interest that I'm paying the insurance company here's the principle that I'm paying the insurance company and that total is four hundred and eighteen dollars because they're charging me five percent I want to pay ten so that additional 42 dollars goes into my policy all right because the policy was designed for banking right it was designed for the end-user so if we go and why did I pick 10 look the last car payment we had was about four hundred and thirty dollars I figured with inflation it should be four hundred and sixty dollars there's no magic and it just happened to come out to be a 10% round number which is my minimum see this also look at the insurance company values their money at five doesn't this give me the opportunity to place a value on my money I can set any interest rate that I want to I bough you my capital at least at ten percent right all right so forty two dollars a month is going straight to my PUA policy now you know that's buying an additional one hundred and twenty something thousand or one hundred twenty dollars in death benefit at the end of the forty eight months look I've got the truck I've enjoyed the truck I paid the insurance company interest there is no question but I put an additional two thousand dollars into my wife's policy it bought at least another six thousand five hundred dollars in death benefit and it's all cash ready available as soon as I make that payment you know there's that much more is available in my policy for loans or withdrawals if I got mad and quit yes as soon as I make that payment thirty days later there's forty two dollars more than the cash value that I put in there that's available to me and that's just accumulated over the forty eight month time period all right now look do you think remember when I put that additional thirty thousand dollars it caused the death benefit to go up it all went to cash ninety ninety six percent of it ninety four percent of it went to cash right now I'm gonna earn interest in dividends on the all that capital forever the same thing happens here that causes the death benefit to go up it goes straight to cash value it's always going to earn interest forever and this isn't the last truck I'm gonna buy it's not the last automobile we're going to purchase or any other purchase all right now Nelson kind of alluded to and look they put this in there I've got the truck I love the truck right all right the thirty thousand dollars that I put into that policy is never going to leave my community again right I get all the goods and services that that money will buy that cash flow that 460 dollar a month cash flow is never again going to leave my personal economy alright do you know why Nelson put the grocery business a grocery store in his book think about it right number one you're not in the grocery business that's good all right you don't have to make a bunch of money on one canopy's it's how many cans of peas can you run through that grocery store the same concept is here it's the same truth how many times can I turn over that four hundred and sixty dollars a month how many times can I turn over that thirty thousand dollars making purchases that I was going to make anyway buying goods and services that I own that's the wealth right that this money buys this money will not leave my personal economy for the next 50 years on this policy think about that this is just one loan one four year time period it's how many times could I turn that money over does that make sense so when you get money into a policy it's yours you own it you control it it is not it really it is not about interest it's about the volume of money that is flowing through your hands how much can you capture and keep in your personal economy and then just continue turning it over and over and over does that make sense okay yes if you want to keep your property now the better your taxes he's like I've got a huge tax bill I'm self-employed should not put it into the policy yes but then you're going to have a huge payment for the next four or five years no you're you pay taxes every year right so you just take that whatever that bill is say it's fifty thousand dollars it goes into one policy and you just isolate that fifty thousand dollars out of that one policy right and pay the IRS and then make the laundry payments to your policy monthly that money's there every year every year every year and if the insurance company charges you five and you pay ten you know you'll have the the accumulated you'll accumulate more money to pay taxes which you need to do because you're going to be more successful and you're going to pay more taxes later does that make sense you just break it down into a one-year payment that's exactly what it is it's a sinking account it's an escrow account you're using your checking account right now to put money aside to pay the taxes that's even worse Uncle Sam's pay now you got along did you say ten thousand maybe about eight hundred forty bucks a month I where'd the money come from to pay Uncle Sam to begin with all right well where'd the money come from to begin with don't pay Uncle Sam next year because you can't find the money see what happens to your property yeah you got to pay taxes every year anyway it's an escrow account yes yeah but the saving see he's saving up money every year to pay taxes alright alright so you do just do that one time separate the premium from your taxes now you're putting money that you were going to pay in taxes into the pu a portion of your policy right so it's there for Uncle Sam you pay your taxes yeah you just do it no you just do it one year you're just doing it one year at a time instead of riding up with Sam a check you write the insurance company a check it goes into the PUA so you can get a loan and then pay Uncle Sam now you've got a loan repayment for that money at the end of the year that loans are repaid you pay your taxes the next year all right you were you were saving the money you were setting aside that cash flow savings in a escrow account the sinking fund method to pay taxes that's a savings cash flow right as soon as you make a loan now it's a loan repayment it's a loan repayment cash flow the cash flow didn't change the only thing that changes where it was going to right very simple I get it it's very simple very simple and then you get the long term benefit number one the taxes are paid you're going to keep your property but that additional interest if you're honest banker keeps your death benefit going up your dividends going up and it's all going to cash anyway that's a great question very hard concept in the beginning but once you do a loan or two it's like oh my god why didn't I see this 20 years ago it's because nobody gave you a book nobody gave you a DVD so I'm telling you Bob books and DVDs on your way out not for you for everybody that you love yes sir no it could be the but generally not if you're working with a good coach know that Beth benefits tax-free right loans are tax-free because the premium is being paid with after-tax dollars and life insurance is not an investment it's a replacement of a loss so it's really not preferentially taxed treated it's treated appropriately right if you're if you had a piece of property that got wiped out by a hurricane and the insuran
e company paid you a benefit is that taxable no why because it's not income it's a replacement of a loss that's what the death benefit is it's a replacement of the loss if I die my wife loses me and she loses all my future income it's a replacement of that loss tax-free all right great questions any other yeah once you see something like this you can't unsee it yeah I can find the house you know and I look can I this is not a tax scheme okay it's not a tax scheme but could my business on the truck and wrap that interest off yes that it is possible I'd have to document the loan from the insurance company document the loan from me to my company right because it's an expense to the company but it's income to me and with the dodd-frank bill they've complicated it you know it really should be the Dodd Frankenstein act seriously but if I document both loans it's really a wash because if if I'm charging if the insurance company is charging me five and I'm charging my company ten right it's a ten percent right off that interest is a right off to the company but the difference in the two is income to me and I don't want to pay income on that I've already paid income on the money that I'm putting into the policy one time you see what I'm saying no yeah it would be if I'm trying to write off this interest if I'm going to write that five percent off and I'm charging more than whatever that more is is taxable now it'd be a moot point but awash and there's some benefit to it that the insurance company is charging me five and I make a loan to the corporation at five it's a wash it's an expense to the corporation it's not it would be income to me but I get it right the five off it's a wash yeah maybe but it depends on what your income level is you can eliminate what he's saying you can eliminate the Medicare tax on that income which is potentially true being on what your income level is but you can also cause yourself another 3.8 percent in income under the dodd-frank bill you know so does it make sense it can make sense but it's not a tax game you know if all the money went in after taxes I just want to use the money in a tax-free environment you know instead of playing their game to get a tax you know exactly okay any other questions