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good morning y'all my name is James nether II look the reason we're here is because y'all are creative people you're outside of the box thinkers and you're getting it done who shows up at you know 8:30 on a Saturday morning seriously so we're appreciated that you're here and what I'm going to share with you today is the infinite banking concept a little about me the challenge I feel that I have is bringing numbers and concepts together because this is very conceptual you know and I don't want to oversimplify with concept but I don't want to beat you up with numbers either you know I married a beautiful lady from West Des Moines Iowa she's an English major right I can when I talk about numbers I can make her eyes glaze over fairly quickly but then when she corrects my English you know my eyes glaze over pretty quickly too so I'm going to seriously try to find a balance I think I've done a pretty fair job of doing that and then this my portion is an introduction to the infinite banking concept and briefly about me it's not about me this is about a concept that everyone in the room should investigate with an open mind I'm 20 over 25 years and the life insurance and industry isn't there's a life insurance agent I'm proud of what I do I'm also an investment advisor and I was 14 years in my profession at least moderately successful million dollar roundtable producer top 5% in the world you know maybe not the first guy in line but I wasn't the last guideline right and I've always been a student of my faith my profession economics and history and so about 14 years into my practice here I'm being a good student so I can take real solutions to my clients and I'm at a two-day seminar then you wear outside speakers from all over the country came in and they were sharing their best ideas practices and and being a student you know I'm taking copious notes and then I bought all the books that all the speakers referenced I took all of those books home and you know when you deal with numbers all day in the office and you go home at night to read more numbers you're essentially trading family time for just more numbers right so that stack of books was on my nightstand and I'd start reading one and not finish it and I'm a reader right so I started another book and not finish it and it was probably three months on my nightstand before I even began to read through the stack of books and then I started this process of starting without finishing above and I got down oh and on approach started without finishing about five books now you know you're seeing that stack every night and I'm feeling like a real underachiever now all right so I go through the stack of books and I picked out the thinnest book in the stack only so I could finish reading the book right there was 92 pages big print lots of illustration blank pages and I could not believe I was able to read it that night right I'm like I'm achieving something 14 years in my profession I was as angry as you could be had no idea that this concept existed had no idea what you could do with life insurance and just couldn't believe it because I've been a student of my profession and history and economics all right that was over 11 years ago you know that next morning after I read the book I'm like oh my god my clients have to see this I can't believe this right so I'll call the number on the back of the book I'm going to order about 10 books take them to some clients that I greatly respect and understand money and cash flows at a pretty good level and the author of the book Nelson Nash answers the phone and we had a good conversation and it wound up like this boy I do these 10 hour seminars all across the country and you need to get yourself to one so I ordered the ten books he shipped in to me and I got myself across the country to the next event that he was speaking at right went as a student took copious notes when I returned home I restructured all of my life insurance and most all of my investments and then had been teaching my clients how to implement this concept where they're at every sentence okay so thank you for letting me share that I like to share it I like to practice I think you ought to hear it but I need to hear it as much as you okay all right so you got to kind of have a comparison or sometimes it's easy to understand a concept or see some value in the concept if you have something to compare it to so I'm going to compare this concept with qualified retirement plans all of y'all know and understand qualified retirement plans probably at various level so some of this you already know there's no question but I want to look at qualified retirement plans because most all of America holds the majority of their wealth in their primary residence and a qualified retirement plan okay so we have a have a place to start from and I'm mocked up here for one reason we're going to make this available for y'all later you cannot you want to access it and you know you think that I misspoke didn't understand something by all means you can go in there and dissect it I challenge anyone in here to take this information and prove me wrong prove this concept wrong right you'll be better for it and and I would too okay so we're going to start with qualified retirement plans because this is where the majority of Americans build their wealth well let's just take a really kind of a deeper look at the qualified retirement planning I'm mainly talking about the traditional plans the 403 B's 401k the IRA we're going to talk about Roth IRAs but I'm mainly going to start with the traditional plans because most of us if you're depending on your age you know we didn't have the opportunity to invest Roth IRAs in Roth 401 KS the tremendous amount of the money is in a traditional IRA and 401k okay now they beg three questions traditional qualified plans begged three questions number one our tax is going to be higher in the future are they going to be lower you tell me the bonafide question taxes going up are they going down they're going up look the I got a 1913 1040 form here so you know the IRS the federal income tax is existed for I think I can blow that up for 103 years right exemptions change exclusions change carry overs change all deductions change but the net amount that we as average individuals are paying in taxes continues to go up and I'm not saying y'all are average I don't believe that for a minute you know I'm talking about the average all-american family I believe y'all are above average that's you know without trying to patronize you I mean that's why you're here right you know how many people should be here this morning I mean oh my goodness not just for us I'm just saying for the opportunity that Tim provides okay of course taxes are going to go up all right the second question would you rather pay taxes on the seed or the harvest a little or a lot the seed well now if we look at that if we have a linear return if I can get a 7% actual rate of return year over year over year over year over year forever it wouldn't matter taxes up front at the end but your returns don't come that way it can be twenty percent this year negative five next year fifteen the year after for the year after three a variable rate of return it does matter you'd want to pay taxes on the seat right okay a little versus a lot now the third question is a dollar worth more today or in the future today it's always today and way I usually example well you know when we were a kid how many candy bars could you buy for a dollar you could buy a handful there's no question you keep buying candy bars all your life this is what happened alright so you should be buying apples you know how many candy bars can you buy with a dollar today one if you go to the dollar store right but health you know you should still be eatin Apple the apple a day absolutely does keep the doctor away alright okay so a dollar is always worth more today compared to the future so the qualified plans violate those three truths right you're going to be in a higher tax bracket in the future you're going to pay taxes on the larger amount if the underlying investment is successful alright and y'all understand in the real estate industry you're trying to do something about that rate of return in your qualified plan you don't trust the money manager 5,000 3,000 or 4,000 miles away you with your own god-given abilities and talents you're going to go out and use that money in a self-directed account to get that rate of return right perfect okay doesn't change the fact doesn't change these three truth then the dollars that you receive at distribution are always worth less than the dollars at the time of contribution so now when you look at that.look the dollar keeps going down right so inflation right an expansion of the money supply and the effect of that is the rising cost of goods and services and so now we're in a world that is eaten up with ridden with the concept and the idea of chasing returns so you can outpace inflation you can't talk to anybody in the investment world and hardly in the real estate world without talking about what's the rate of return what's the rate of return what's ready to return right we are just trapped in an environment that we're chasing a rate of return when it comes to money all right okay now let's look at the Roth IRA they still violate the third principle the third truth because the dollars at distribution are worth less than the dollars at the time of contribution okay and of course look your income could potentially phase you out of that participating in a router limit what you can put into a row the conversion is always taxable that could be a good thing or not a good thing it depends on where you're at right and then of course the regulations for managing the self-directed IRA the requirements are becoming more and more onerous in it and expensive when you do self-directed qualified accounts all right okay now let's look at a take a closer look at the timeline of a qualified plan the example here I've got the individual going to work at about nineteen and a half you know and they're either putting their money in maybe they're getting a match from their employer doesn't matter but they've effectively for the next 40 years locked up that portion of their capital right now this is a place that the majority of Americans build well they're putting money into a qualified plan in at 20 years of age they're effectively locking up their capital right okay because if they access it they're going to pay the ten percent penalty and then ordinary income taxes now there's no question you can borrow against your 401 K right there's some hardship provisions and all of them but even that's very limited right but at fifty nine and a half you enter into this magical eleven year period where you can have all the access you want to that capital as much or as little on withdrawals whenever how often it doesn't matter right there's no limit to access to that capital and there's no penalties but it's just ordinary income taxable when it comes out it's always ordinary income taxable when it comes out it is always in forever ordinary income taxable when it comes out whether you the owner takes it out or your beneficiaries take it out right it is always taxable now look if I'm getting a tax break today right because this I digress for a minute but allow me you know if you look at where the qualified plan came from the Uncle Sam he says well I'm concerned about the American citizens they're not saving enough for retirement we don't want a bunch of old people that are dependent upon the government Social Security right now ATS so they said okay we're going to give you a tax break today to save money for your retirement so you're not dependent all right how would a qualified retirement plan that tax benefit that you get they're bidding that an exception to the Internal Revenue Code you're going to pay taxes on this income but will allow exception if you say for your retirement because you're not doing a very good job now thunking Sam really loved me and had my best interests at heart wouldn't if he had just lowered my taxes to begin with of course he would all right let me continue there can the Federal Reserve you know the fractional banking system that we have in America the central bank can they print all the money they want of course they can they're doing it right now if they can print all the money that they want to print why does Uncle Sam need our tax dollars ever thought about that right it's a fair question I'd love to have a good answer I mean I have my own opinion okay I digress now after that 11 and a half year period you turned 70 and a half in my example I let you live another 30 years to age 100 right now you can take as much out as little out as you want oh no if you don't take a minimum distribution it's called the minimum required distribution on an annual basis if you don't make that withdrawal you can be penalized up to 50% of what you should have taken out but did not take out okay then it's always you know ordinary income taxable now this means that the majority of the time if we look at the timeline on a qualified plan the majority of that time the plan owner is in some kind of a penalty phase some kind of a penalty if they make the mistake right or they need access to their capital okay and then here's a statistic forty five percent of all the partially are to retirement the net number went up to 70% in 2009 10 and 11 now why would anybody put money that they have a hard time accessing to somewhere pay all the fees right take all the risk for their you know rate of return hoping that there's something there in the future and then access that money prior to retirement pay the penalties and pay all the income tax in that one year that they access that money why would anybody do that because life happens right I mean that you lose your job there's a medical emergency whatever we're going to go to school or whatever the case may be it's real life that happens where you've kind of lost control and if you think about that for a minute most of the time when you and we lose money it's because we've lost control you know of course we're all human we can make a bad decision you know there's no question about that but even look at the bad decisions that we make it's typically based on either bad information misinformation or greed or fear right but if we have good information and make a good decision and you maintain control you know lose money alright does that make sense okay and was designed for this is easy my questions are easy easy right of course it's not designed for us design for Uncle Sam that's nothing but a long-term savings account for the IRS that's all that is then you're paying the taxes you're paying the fees and you're taking the risk all right what a deal for Uncle Sam you know by the time you get into distribution when you have a qualified plan I don't care what size your plan is I don't care how large the numbers are about a third of that is going to go away and fees and about a third of that is going to go away in taxes even with the employers contribution the match to your contribution and you're going to enjoy about a third of that on their terms think about that and then like I said prove me wrong I'm still a student I don't know everything I promise all right now all plans violate the law of use think about this for a minute you tie your right hand behind your back for about three months and you tell me how much you can get out of it in the fourth month ten all right that's the whole another reason for self-directed iras the owner of the plan is using that money right not so in the traditional qualified plan you're violating the law you should let somebody else use the money and I assure you they're extremely profitable whatever your little account statement says not that little numbers but you know they're they're profitable okay and of course you give up restrict or you do give up or restrict the control use or liquidity of your money the majority of the time you're in a penalty period in addition you know of course you always pay the fees and you assume all the risk now that's the comparison because that's where the majority of people are told to bu
ld their well all right now we're going to compare that to the infinite banking concept this infinite banking concept is a little bit counterintuitive yes ma'am no my mics not on how about that I thought you know I'm really soft-spoken but I thought I could you know speak loud enough for the room the mic that I have here is for that camera over there so but thank you for telling me that or asking okay all right look the older I get you know you got to have all these you know eyeglasses and things like that okay so the comparison is to the infinite banking concept right here's the book the book that I just showed you Nelson created this concept he discovered it in 1980 he wrote the book in 2000 here it is in 2016 there's a lot of things out there on the internet there's some good some bad you know most all of its copycat v2 or some outright bastardization 's but it's okay if okay to look at the bad and the good right to make a good decision whether this concept is good for you but you know a friend told me once you know James just because you google something doesn't mean you're researching it all right now you think if Christopher Columbus if he had done his research before he left looking to find the new world what was the consensus be before he left the world was flat so when you go on Google and do your search you're not doing anything but getting a gathering of consensus right the world was wrong they're still wrong and they're still wrong right that makes sense okay why in the world would we use life insurers why the world would we use life insurance several reasons is because the characteristics that only life insurance has structured correctly and it very simple it operates like a pre-engineered tax-free trust it's private property the owner has complete control use and liquidity of the money and then it has all of the major characteristics that's required for banking now if we look at banking for a minute you know words have power words have meaning all right like I said I married a beautiful girl from West Des Moines Iowa alright you know it snows up there sometimes like crazy in the wintertime I mean it snows unmercifully you know and then when the wind blows while it's snowing you know that snow piled up beside buildings and barns right you get a picture of that in your mouth what do you call that pile of snow that's piled up against the barn a drip you ever heard of terms snow bank all right of course snow bank now if I'm gonna go float down a river in a canoe right what do you call that pile of dirt on both sides riverbank right you practice from that before haven't you of course we all have now if I'm gonna go give blood today where would I go give blood a blood bank all right so bank can be an aggregate of any one thing right okay now the route I'm told the root word the etymology of the word Bank is bench because 6,000 years ago when people went to the temples to worship and pay their tithes and homage the money changers worked off of a bench outside the temples right now if we look up Westers dictionary today the word bank or banking it's going to talk about deposits withdrawals loans loan repayments the flow and the movement of money all right okay so we're going to take a life insurance policy because it has all of the characteristics that are required for banking and I think I can prove that it's the best place for anyone to put money into and warehouse their money and if you think about that for a minute money is not wealth well is the goods and services that money can buy money's a medium of exchange right your money must reside somewhere should have a primary place of residence you know just like y'all just like me you know I have a primary place of residence from that primary place of residence I can go anywhere in the country anywhere in the world that I want to go I can take advantage of an opportunity a vacation and then when the opportunity is seized upon the vacation is over and it's been enjoyed I'm going to return to my primary place of residence because that's where I live just like y'all your money is no different you should have a primary place of residence this should be easily accessible for ever and ever compounding earning interest and dividends tax-free and then when you have an opportunity come up your money should go take advantage of that opportunity or that vacation and once that's done it should return to its primary place of residence all right this is pretty conceptual but it's simple and I know you want to get to the numbers and Epstein Lasky's going to get to the numbers with you okay all right does that make sense what I'm saying okay now for this concept to be okay you've got to be okay with two foundational concepts and the first one is that you'd finance everything you purchase there are no exceptions right you either pay interest when you formally finance so you give up the interest you could have otherwise earned when you pay cash so those are the two you either pay interest when you formally financial you give up the interest you could have otherwise earned when you pay cash all right that makes sense now look the cash buyer most of the time they are like oh my gosh I can't wrap my mind around that they're paying cash because they don't want to pay anybody interest or maybe they don't want payments but that primary reason is they don't want to pay interest anyway okay well what am I talking about what is this interest we could have otherwise earned all right let's look at that this is not a new concept lost opportunity cost Richard Cantillon discovered this in the 1500s this is not new okay so here's an example of the interest that you lose by paying cash now my screen is very small I hope y'all can see these numbers but in the upper-right we're looking at a 30 year time period I'm illustrating the ability to earn 5% on your money safe rate of return I'm not talking I'm not trying to compare this to the real estate investment or any other investment okay so we're looking at a 30 year time period 5% earnings on your savings and I'm illustrating a $30,000 cash purchase I don't care if you bought a piece of real estate an option in the real estate market I don't care if you bought a piece of equipment that's going to cause your business to be more profitable or you bought an automobile whatever it is you get all the benefits of that purchase right but if you're $30,000 was earning 5% over 30 years in the lower-right it would have grown to about a hundred and twenty nine thousand dollars but you have whatever it is you purchase so you subtract $30,000 out of there now we've isolated the financing cost of paying cash over a 30-year time period it's 99006 $58.00 that makes sense all right because as soon as you make the cash purchase you don't have that money it will never earn interest for you again right but if it was earning interest I'm isolating the cost of paying cash so the question here is do you know that it is possible to capture or recapture the equivalent of that lost interest I'm telling you it is and if you would like to this is the concept that you need to investigate learn and in just the implement into your life because you can capture the equivalent of that lost interest and you can capture it tax-free okay so how many would like to capture that lost interest if you could well how soon would you like to capture that lost interest as soon as it makes sense to you and you can wrap your mind around it right of course okay the second concepts you have to be okay with is the banking process nothing new we're all banking everyday right we're all banking every day my example here and I'm a generous guy I'm showing $100,000 deposited into a bank and I'm showing that they're going to pay you four percent on that deposit see how generous I am that's generous right of course it is well the powerpoints a couple of years old concepts still the same you know and at the end of the day I don't care what the interest rates are interest rates don't matter when you understand this concept that's a powerful statement okay here's the question do you know what the bank is going to do with your money no the bank no that is correct your money they are going to lend it out but before they lend it out they're going to create money out of thin air because the banks don't lend their money you're exactly right the banks don't lend their money it's tier 1 capital it's too valuable for them to Lynn their money's on guaranteed deposits earning guaranteed interest rates they lend your money after they inflate it out of thin air so in essence they're really lending money that didn't exist there creating this money that didn't exist with your deposit think about that that's almost criminal alright okay but let's look at this banking process the your deposit goes in the bank inflates that deposit and then creates loan portfolios I've created six loan portfolios and I have assigned interest rates to them okay now if we look at that you know I put a 8% on automobile loan portfolio 5% on a mortgage 9% on a line of credit 8% on equipment 8% on construction and then commercial real estate I put six then we can move those interest rates up and down all day long I don't care it's not about interest rates but I assure you that I have driving over here this morning and driving home this afternoon you're going to pass cars on the on the freeway that are financed at ten twelve and fourteen percent all right pre-owned automobiles don't get that a zero percent interest rate that they advertise all right okay now we know that some of these notes are going to be called some are going to be defaulted and some are going to pay off early and the remainder is just going to pay on time as scheduled all right okay now I'm going to add up these interest rates and against the forty four percent now the bank's paying you for and they're earning forty four and a straight linear simple math the question here is how much more is the bank earning on your money than you are a lots probably the best integers that can have some numbers forty forty is the most common answer right and it's wrong a lot you know more accurate but you know undefined well huh okay so look I'm saying the bank's making more than a thousand percent in my example right here and I'm wrong too because they're making about eighteen hundred percent in this example but let's just check the math how do we get to these numbers well this is how you got to forty forty four minus 40 equals 40 well nether he how did you get two thousand here the keystrokes simple calculator four times 1000% equals 40 all right all right now look the bank's doing something that you can't do there's no question they're inflating money out of thin air that's a federal offense you're being seen sing or you know under the jail right counterfeit whatever they call it we can't do it they can I don't want to do anything illegal there's nothing illegal about this that every one of y'all drove here in an automobile and everyone y'all are going to drive home in the same automobile your significant other your children probably have automobiles and you probably purchase their first one y'all been driving for 15 20 30 years you're going to continue to drive 15 20 30 years all right all right and I bet you none of y'all have slept in the rain unless you wanted to unless it was by choice y'all are not sleeping in the rain tonight all right so you've all got a mortgage had a mortgage I don't care if you paid cash or you formally finance it I don't care if you stay in a five-star hotel somebody financed that period they either use somebody else's money or they pay cash and lossing interests they could have otherwise earns all right okay so you can't print money out of thin air there's no question but you can create a bank an aggregate of money and then you can put that money into motion and finance every major purchase in your life it's called velocity of money all right have y'all heard that term it's an economic term when you put your money into motion you're adding velocity to your money all right so if I piled money up into a life insurance policy and I'm calling it a bank because I'm going to practice banking and it has all the characteristics of a bank can I finance my own automobile and my wife's automobile and my children's automobile and my neighbor's automobile if I wanted to and then the next automobile and the next automobile and the next automobile in the next automobile and I can do that with all the same money if you look at a banking system as your personal economy you put money into your personal economy and then you finance everything that you were going to finance any way through that bank you've captured that money that it took to capitalize your bank and then you captured and maintained and kept control of all of that money that you have continually used financing over your lifetime everything that you're going to finance any way that makes sense okay so can't print money out of thin air that you can finance everything from a banking system that you were going to finance anyway and you finance everything you purchase you either formerly financed with somebody else's money or you pay cash and lose the interest that you could have otherwise earned all right now this is the only trick question that I have who would you rather be the bank or the borrower the bank all right of course you want to be the bait right the bank controls all the loans they control the loan process but it's okay to be the borrower the borrower has a need for capital right so you really want to be both you want to be the bank and the borrower all right all right well here's the trick part of the question you also want to be the bank owner he's not on here that's why it was a trick okay the bank owner made all the profits the banker controlled the loan and the borrower needed access to capital you want to fulfill all those roles now let me ask you how many of y'all have received a dividend check from your bank did you know your bank pays dividends they do they just pay them to the owners of bait you don't own the bank so you don't get the dividend they just pay you a modest amount of interest while your money is there and as soon as you pick it out they won't pay you anything all right okay baseline of zero this is cash versus formal financing look most people don't have any money right they can't start a big the capital stock of a bank is cash right okay this is not y'all you're above average right the average guy on the street out there he doesn't have any money so he has to bar money from someone else someone who does have money all right so he borrowed the money and then he makes payments he still didn't save any money he's undisciplined he's going to make another purchase I don't care if it's an automobile I don't care what it is but he makes another purchase he doesn't have any money uses somebody else's money and he pays them back interest payments over time that's how he lives this lot right y'all have renters like that all right well you take the guy who has some discipline he don't want to pay any interest anybody so he saves up a ton of money right did you know you've got to have cash before you make a cash purchase right okay this is a guy saving up the cash then he makes a cash purchase but he's disciplined he's always going to save money he's going to save money his whole lot so before he makes his next cash purchase he saves up money and then makes the purchase that's how he spends his life that's his spending that pattern all right now look both these guys end up at the same place all right all right now you know anytime you put money anywhere and it has a rate of return and time you create an exponential curve right at any time you've created an exponential curve and you take money out of that place right you put money in I don't care if it's your IRA 401k checking account savings account investment account I don't care where it is when you put money in there and there's an interest rate or some kind of rate of return in time it will compound right the exponential curve the more time that it compounds the greater it grows too now if you take money out of that account you have the compounding right you have stunted th
curve that make sense okay if you put money into a life insurance policy structured correctly that's liquid you own it you control it and you use that capital to finance everything that you are going to finance anyway which is everything you purchase when you put them into the policy you've created an exponential curve and then when you take money out of the policy you don't take it out through withdrawals you do it collaterally you're borrowing money against the cash value that's growing when you do that you don't interrupt the compounding of that exponential curve does that make sense all right perfect so we're just going to put this spending method onto an exponential curve cash flows didn't change you know the guy saved up money collaterally you use that capital while it was still earning interest in dividends made loan repayments the money's all there he's his own banker all the longer payments went to him so you're putting the same spending pattern on the exponential curve that makes sense easy-peasy right now I'm gonna beat you up with some numbers all right I know these numbers are little I don't know how they look out there for y'all and I know there's a lot of numbers on the page I just want to isolate a couple okay all right this is right off of a ledger of a real life bonafide life insurance policy and the guy I believe it's 39 years old Julie do you have these sheets anywhere I mean I can strain with the best of them but I'd rather not all right okay so here when I mentioned the word life insurance most people's mind slam shut like a steel trap right oh my god life insurance the older you are the sooner that happens now I'm able to see what y'all see all right okay we're looking at a 39 year old guy just standard non-tobacco I'm not this is nothing special this is a whole life policy a whole life insurance policy the guy pays twenty thousand dollars a year in premium at the end of the year year one he has five hundred dollars in cash value but he has a million one in death benefit it takes this guy 17 years before his twenty thousand dollars a year in premium is accessible a hundred percent in cash value this is what people this is really a good strong life insurance illustration but it's typical life insurance this is not what I'm talking about I'm taking the same 39 year old gentleman and this guy happens to be a real estate investor oh look it blew up oh then that helped y'all alright so look here just conceptually the guys paying twenty thousand dollars a year in premium he's got five hundred dollars a cash value at the end of the year he's got a big old honking death benefit 1.1 million and all of that's going to grow the cash value and the death benefits going to grow but the cash value is going to take seventeen years to grow where it equals a 17 years of $20,000 a year in premium okay that a bad deal not necessarily what am I talking about I'm talking about the infinite banking concept which just structures policies for cash not the death benefit that's the first paradigm shift in thinking we've all been taught to buy life insurance with the least amount of premium and the largest death benefit you could buy with those pennies you're trying to throw at the insurance company right the exact opposite I want to buy the least amount of death benefit that I could possibly buy and I want to put as much cash in as I could possibly put in and still maintain the preferential tax treatment of life insurance oh did I mention life insurance was tech free forever and ever no matter what the brackets changed to look that's powerful taxes and inflation are the greatest destroyers of the wealth period when you can operate in a tax-free environment and mitigate or eliminate inflation you'll win without chasing the rates of return and that's exactly what I'm talking about so this guy's saying got twenty thousand in but now he had almost he has thirteen thousand two hundred in cash value at the end of the year but he only has five hundred and seventy seven thousand dollars in death benefits not a million won all of the expensive life insurance is in the death benefit all right the majority of the expense of life insurance is in the death benefit we're just trying to buy least the least amount of death benefit as possible alright so now this guy I'm illustrating $20,000 to year premium the guy doesn't have to do that unless he wants to when he understands what goes on in a life insurance policy I guarantee you he'll want to but let's say he doesn't this is the same illustration now I'm illustrating that $20,000 in premium going away after year 7 you see the third column from the right 20,000 a year for seven years and then it drops down to 6625 a year you see that does that blown up okay all right all right look you go about six seven columns over and you see 6625 coming out of the policy the policy is paying for itself from the policy values this guy's not writing a check for it all right but he has second column from the right access to a hundred and thirty thousand dollars in capital you know you go you go qualify for a loan you tell me the hurdles you have to jump through don't tell me you're a real estate investment you get 80 percent loan to value and you've got 30 properties all right I just bought a property the office building right next to us right I called the insurance company two signatures mining my wife Texas community property state right so she has to sign whether I want her to or not but she knows what she's doing two signatures one page and I get a check I control the banking function I'll tell them when I'm going to pay it back if I'm going to pay it back right okay but now you've created a pool all right I can prove it but I have put money into a policy and taking money out of a policy in five business days I put money into the policy wire transfer my institution to their institution they've got to process that premium and then they've got to process right I think I had it well I had to mail me that particular check that I'm talking about you can get money out of this policy within three business days is that always the way it is no no no but seven to ten days men and that I mean that's worst case scenario if your mail guy loses the mail we have to reissue a check it's quick and thanks for asking that because you tell me what's king in real estate besides location location location its cash cash is king right you can have the best dealer in the world the best opportunity in the world can be before both of us it's the person who shows up with cash first wins and that right cash is king cash will be king in cash is been king that's why we're building these policies for cash all right because it's what you can do with your god-given abilities and talents in the real estate industry that gets your great rate of return but who's controlling the banking function in your life all right and you can control it very efficiently with this system all right now do y'all see that this policy is paying for itself in the eighth year and Beyond the guy's not writing a single check all right now look at second column from the right at the end of the seventh year the net cash value he has access to a hundred and thirty thousand dollars right now you tell me what you can do with real estate in the real estate business with one hundred and thirty thousand dollars can't you go make ten percent a year all right Kenyon I don't know Tim can you go make ten percent a year in the real estate business I think so too man I got clients they won't even do a deal unless it's 20 percent period right okay just play a little numbers game around here and he's golden this guy's put money in he's got the real estate now he's created a real estate cash flow didn't he in that the reason y'all real estate it's real property and cash flow and there's a deferred benefit sometime you either go to equity strip or you're gonna give your property to your beneficiaries or your legacy with the step-up in basis tax efficiently right and there a deferred benefit with real estate look let's look at life insurance this way for a minute it's nothing but real property there's cash flows and then there's a deferred benefit it's just called a death benefit here and it's all tax efficient okay now here's the example there's one hundred thirty thousand dollars in cash value can't that guy go generate sixty six hundred a year off of that real estate deal of course he can if he can't you know he's not he's not the member of the right real estate group I guess right or he you know I don't know maybe you should do something else alright so now we're looking at it this is a very same illustration but now I want you to go down to the seventh year second column from the right he's got the same hundred and thirty thousand dollars in there right cash flows are the same in the first seven years same cash value but now in year eight he decides since he's got that real estate cash flow that he wants to pay the premium he doesn't want the policy to pay its own premium does that make sense now he's writing a check for that premium we were looking at year a third column from the left sixty six hundred and twenty five dollars is the premium now I want you to go third column from the right in year aid there's a ten thousand five hundred and ninety seven dollar increase in cash value that year and the only thing he did was put 66 25 there now you tell me if that's a cash flow in premium in and you make a loan out another cash flow in and the cash flow out and met a cash flow in and out okay that's what I want to focus on for the next few minutes there's a cash flow now this guy at the end of that first year you know he's forty I want to go out fifteen years to his age fifty four and I don't care how old you are and how young you are this concept is in fact outstanding at any age okay but let's go out to age fifty four he put sixty six hundred and twenty five dollars in third column from the right and you'll see that number fifteen thousand five hundred and two dollars he put 6625 in and there's 15 thousand five hundred dollar increase in cash value and look he the previous year he could still have two hundred seventeen thousand dollars outstanding in loans buy more real estate that causes him to have a greater cash flow and if you put more money in on this left side of the page 6625 this number that I'm isolating on the right side of the page third car from the right would be bigger y'all know where you can put sixty six hundred and twenty five dollars today and see a fifteen thousand five hundred dollar increase in twelve months because from the left side to the right side of this page is twelve months all right I don't either I don't either but if I have real estate and it's cash flowing and I stick a dividend paying life insurance policy right in the middle of that cash flow are not amplifying those cash flows an incredible amount now you get you've got all that money in that qualified retirement plan right because you've been doing self-directed iras god bless you at seventy and a half you have to start making withdrawals right you don't have a choice alright I don't know what the tax brackets going to be but I bet you you're gonna be in a big tax bracket right unless all that money is in a Roth IRA and it's not going to be let's be honest that seventy and a half this guy's showing a premium of sixty to ninety five some riders have come on sixty to ninety five is the premium you know you'd probably have to earn about eighteen thousand dollars thirty one years from now to enjoy $6,200 I don't know all right $6,200 goes in third come from the left there's a twenty six thousand five hundred dollar increase in the cash value does that keepin up with inflation it's incredible i yes yes I'm told to I'm asking an easy questions yes it keeps up with inflation now I get the real estate I get all the benefits of that I get all the cash flows from the real estate the step-up in basis you know when I do legacy planning you know planting seeds and gardens that you don't get to see the fruit grow right your grandchildren all right I get that plus I get the ability to leverage my cash flow without risk and a private asset that I own and control the judgment-proof that's operating like a pre engineer tax-free trust I get the real estate the cash flows the passive income in retirement and the ability to leverage it life insurance is designed this way is not that either-or asset it's an and asset I get that and that and that and that and that that makes sense pretty easy okay I believe there's just some other illustrations I can beat you up with the numbers you get the point that I'm trying to explain here that you put money in you have access to it and then the more money you put in the more capital you have access to and the greater you can there the greater incomes or cash flow streams you can leverage all right all y'all have an opportunity I'm going to bring Nelson Nash to Fort Worth Texas on July 23rd right and it's we served lunch and dinner it's going to be for Texas y'all need to register for this if this has any interest to you okay every one of y'all I think we're given away these DVDs at the back of the room look this DVD is called banking with life this is a documentary-style film completely unscripted it's not a promotion of me or anybody who talks about this concept to the top Austrian economists in the country are in here Nelson's in here businessmen across the country are in here there's some financial guys that are in here and then there are some everyday people like you and me some real estate investors and doctors and dentists and retirees unscripted this sells online all day long for 1495 plus shipping it's 52 minutes and it's well worth viewing and then everyone in here should buy this book becoming your own banker I don't I think we have them available I'm not giving them away but I'm not making a profit on them either what are we selling these for $15 I've got $15 zero find them and shipping them and then store them this is a deal for y'all only because you're here with Tim screw okay all right perfect any questions awesome well I appreciate y'all I've been a very good audience thank you thanks for watching if you enjoyed the video leave a like and if you think it was helpful share it with the friend if you want to see more videos like this then subscribe down below and click the bell icon so you can be notified when we release new videos and we are releasing new content all the time don't miss it thank you for stopping about you
