Becoming Your Own Banker Book Review (Part 1) | The Banking System

Speaker 0 | 00:00.464

All right, ladies and gentlemen, welcome back to the And Asset Show. I got Dom, I got Austin, I got myself. We got Becoming Your Own Banker, the first book that Arnelas Nash wrote, the one that really became the trailblazer for the infinite banking concept. And it's funny, he even wrote in part one that this is not supposed to be a marketing deal. This is supposed to be education and 10-hour. course that he used to teach. He put it in book format, which we're grateful for, because R. Nelson Nash is no longer alive, but his legacy lives on through this book and the many other teachings. And so, what I thought would be awesome is for us to actually go through this book that there's so much opinions on, and a lot of people making videos about the Infinite Banking concept, including us. And I thought it would be great if we go through the book And... Share some of our takeaways just discuss it like real people like this is stuff that we do behind the scenes is like wait What do you think of this and all and it's like let's just document this so that more than one person can Follow along and so the the book as part five parts Will I don't know if we're gonna go through all five parts like per episode we may put combine a couple parts But for this episode we had homework of reviewing part one, which there was a lot of good things, a lot of good concepts in part one. And so, Austin, to get us started, I know that you read part one of Becoming Your Own Banker. Would love the English teacher's takeaway. No pressure, but would love the English teacher's takeaway on just what some of the biggest things you got from part one. And, yeah, I'll just let you riff for me. Yeah.

Speaker 1 | 01:56.212

This is right up my alley. It's been a minute since I've done a book report, but once again, this is how I was educated, so this comes more naturally to me. In part one, the thing that stood out to me the most, and obviously I've also read the rest of the book, I kind of know where he's going with it, but the thing that stood out to me the most is you really do get at the heart very fast of kind of what his central thesis is in the book. And, uh, this there's, there's obviously some, some parts that I, I still might not like fully that I feel like the, he is says things like out of both sides of his mouth, mouth. Like he says, it's not this thing, but he's also saying that it's that thing at the exact same time. But realistically, like you get very, very fast in part one, kind of exactly like what, what he's getting at with this book. You know, it's, you know, he'll say things like, you know, it's not a procedure to get rich quickly, which I love. which I love him saying. And then, you know, in like the second paragraph, he says, you know, your need to finance during your lifetime is much greater than your need for protection. And that's a theme that is carried on throughout the rest of the part one is that, you know, is how do you protect your need to finance so that you don't have to be sending, sending as few of your dollars as possible outside of your own banking system and creating that inside of yourself. he'll even say he'll say on the very first page, the whole idea is to recapture the interest one's paying to the banks and finance companies for the major items we need during a lifetime, such as automobiles, major appliances, education, homes, investment opportunities, business equipment. And I think that we all have maybe a little bit of a bone to pick with like the way that he's like couching that. But like, admittedly, like that's kind of what he's, that is like the ultimate like upshot of the book is that ultimately we have a need to finance and How do we go about that in the smartest way possible, losing as little money as possible, saving as much money as possible in an asset that we own that is never going to have a down year and that ultimately is going to grow with us for the rest of our lives? And so that's something that is very fast in this book that we come across. I'm curious about you guys. What did you take away?

Speaker 0 | 04:14.545

Awesome question for you. This concept of your need for finance is your greatest financial need that's been used, that language. Explain what that actually means, like the need for finance. What do you think Nelson is saying when he says that?

Speaker 1 | 04:27.791

Yeah, when he says your need, the finance is your greatest need. There's another phrase that you come across in part one, which is ultimately what this one single concept, more so than anything, Caleb, that you ever said is what truly opened my mind to the idea that what I thought about money was not necessarily true. and is that ultimately... when it comes to your dollars and your need to finance dollars is that there's only two things that you can do. You can either use somebody else's dollars and pay them interest. Or you use your own dollars to pay for the thing and you lose the interest that you could have earned for the rest of your life. And so when Nelson has to talk about your need to finance is that ultimately when it comes to the things that we need in life, obviously the money has to come from somewhere. And, you know, for things like, you know, a sandwich for groceries, I don't think he's more so. He's not and he didn't list that in that list that I mentioned. He's not necessarily talking about those things. but for like the larger purchases. where we need a larger pool of money than maybe we have access to right now, we could either use somebody else's money and pay them interest for a set amount of time, or we could use our own money and forego the interest we could earn on those dollars for the rest of our lives. And you have to make that choice regardless of which option you pick.

Speaker 0 | 05:47.784

Yeah. When I hear the word, your need for finance, I think of consumption. And it's true. It's like our need for consuming if you just look at America in general, is far greater than anything else. So if you can solve the creating a system to better consume, you're going to be way better off. And I think at the end, we're kind of skipping to the very end, but it's like banking is not a product, it's a process. In other words, what Nelson is saying, if you zoom out and don't get technical, is your greatest financial need is consuming. Just look at where the money's going. So create a system. for your family that capitalizes on that and if you solve that need everything else is secondary especially if you do it through you know dividend paying whole life insurance policy which was another big part like i i saw part one is just really setting the stage about the power of banking and then pretty much you know you know talking about like what what what would it look like if you went to start your own bank and then you know all the regulations and even even seeding the fact that it's like, okay, you're going to be seven years in before you get a profit. What do you think he's doing? He's talking about like, hey, those of you that are complaining, you don't have all your money in the first couple of years. He's like seeding that when you start a bank, it's not like you're going to turn a profit immediately. But then you're creating that system and then talking about why dividend paying, whole life insurance, if you understand that as a contract, how that could play a really great role for for those of you that aren't actually going to go the traditional starts your own bank route any anything else from i obviously your need for finances your greatest financial need one of the big takeaways anything else in part one that is key before we move it over to dom and we will go through chapter by chapter i just want to know like big big themes right now yeah

Speaker 1 | 07:44.535

uh i once again and this is coming from my past as a farmer is that he very briefly touches on his past as a forestry consultant and he's like You know, we're thinking 70 years ahead. We're thinking decades and centuries ahead as a foreclosure consultant. And he kind of brings that mindset to life insurance and how he's like, you know, this, this is a long-term plan. And he says in the, in part one, it might take 25 to 30 years for you to build your own bank, but you could truly not that your pool of money for financing your life only comes from yourself. But ultimately this is a long-term strategy. You know, this isn't something that you're going to be able to accomplish in a year. This is a long-term thing. So I love that he lays the groundwork here for, you know, you are setting yourself up for success, possibly decades down the road. You know, this is not a quick fix. You're not going to get rich from this. You know, I tell people when I talk with people on calls, life insurance will not make you wealthy. You make you wealthy and you'll use your life insurance policy as an asset in doing that. This is not, you know, going to solve all your problems. It's not going to cure your financial warts. You know, this is a life insurance policy. And if you got good things going on, it's going to help you do even better. And if you have bad fundamentals, if your spending is out of control, it's going to, it's going to make that even worse because it's just going to amplify what you're already doing.

Speaker 0 | 09:05.161

You know, a lot of the pushback to life insurance comes usually from the paradigm of short thinking, if you think about it. And even in the introduction, he talks about think long-term. And I wrote the question to myself, what, what is your time horizon? like are you thinking in a 10-year time horizon a 50-year time horizon 100-year time horizon 200 year time horizon and when you start thinking about that different things become important you highlight certain things you want and and the idea again not of insurance but of like the banking system and like understanding how to solve the consumption for your family There is an argument to be made where it's like, hey, for you being the pioneer, you may not reap all the benefits. You can make decisions today that can change the ripple effects of your family, especially if you if you. Really are ingrained and one one of my friends Jason Lowe who's also a friend of Dom's and I know that you've you met him Recently Austin. Yeah, I mean his family is living it and he's got some you could say extreme opinions, especially when it comes to like your you know, if you don't use the family's bank like there's some consequences and just wait to That episode will be coming out soon. And I was like wow, but then the more I think about it It's like he's ensuring from day one that every generation the family gets more capital and he's, he's living out a version of that. And I think you could, they're going to reap a lot of benefits from their family. So, uh, thank you. Thank you, Austin. Anything else you want to say before we hand it off to Dom?

Speaker 1 | 10:40.562

What you're saying, uh, just one last thing quickly is that like, when you're saying like, you might not reap the benefits yourself. I'm actually thinking of something not related to money, but my wife's, um, Graham, my wife's grandpa, God rest his soul. He's no longer with us but Just thinking of his family situation that he had growing up is a perfect parallel to this because he grew up, he had virtually, he had a very broken, fractured kind of family. His grandparents were never really part of his life. He was always bounced around houses and he had a very broken upbringing. And the upbringing he created for my wife and their family could not have been more different. By the time my wife grew up with grandparents who loved her, who are present. who lived in the same house with her, who were not a mystery to her. And like over 80 years, he totally changed the narrative of his family story from one of his brokenness and like absenteeism to like presentness. And just, or I should say presence. And so like, I think with life insurance, you can see something similar. It's like you can change whatever broken family narrative you're in to being one of plenty and of bounty, even if that's not the one that you came into the world with.

Speaker 0 | 11:52.327

Yep. I'll just say this. Thank you for sharing that. You mentioned the word recapture. We'll highlight that. I'm sure when we recover that chapter, that word recapture has created a lot of bunnies, a lot of rabbits, and some of those rabbits have to be shot. So we'll talk about that. Speaking of shooting rabbits,

Speaker 1 | 12:11.968

Dom,

Speaker 0 | 12:15.093

what were some of the big takeaways that you had?

Speaker 2 | 12:18.733

Yeah. So my time reading this book, this is the third time reading it. And the first time I read it, very, very, very confused, you know, to the point where I just shut the book. I didn't come back to it again for like four years. And if you're one of those individuals, your first time reading it, just know that there's a good chance you may not understand it the very first time. And so I have mad empathy for you. And that's why this episode is created is so that we can hopefully help decipher some of the things that you're reading. Especially if you're not in the industry, they talk a lot about terminologies. And I think that's probably one of my, I'll start with a few downsides to it, is they do use very specific insurance jargon that he does. When you're trying to explain the concepts mindset-wise and then start to implement it with the life insurance, it becomes very hard to, I think, understand and fathom if you're not in the industry, right? But that doesn't necessarily mean that it's bad. It's just it makes it more complex and more complicated for the average person to read. And so that's just one takeaway. On the other side, though, I actually think that this book did an incredible job at sharing problem awareness, like what really are the massive issues and specifically when it comes to like the mindset and the heart and just massive human behavior. Right. And just talking about like, well, what happens when life happens, when interest rates are one rate and then they go to another rate? Like, are you prepared for that? What happens when your family dies or you get sick, your family gets sick? Are you prepared for that? What happens in just, you need to move somewhere, but you can't sell your home and you have to be stuck even though you have a job in a different, and I use this example because I have a friend that's going through that, that lives in a different state and he can't move to where his job is at in a different state because he can't sell his home and therefore now he's at the verge of losing his job or he has to travel every single weekend and be away from his home family for three days out of the week. And it affects essentially quality of life. And I can see it in his face as time goes on. It's like, man, like I'm just getting more and more black and depressed and, you know, anxiety that I'm not going to be able to move and, you know, have the life that I desire for my family. So by him doing all this and talking about leverage and what the financial gurus say, I think it's actually truly is amazing by the way that he does the problem awareness. And then I think he does a really good job as well of using stories, whether it's the plane. whether it's the the grocery store whether it's the um the boiling point we'll talk about all these different things these are all great examples of mindset and headspace to allow an individual to think about just money and you know you guys talked about the you know kaylee you said what is the time frame and to me i've been thinking more and more about this question the older and older that i get and i have more and more empathy for this question because everybody is so different and There is a direct consequence to the moment in time that you're thinking about and the pathway that you do choose because there are people that choose to maybe not reap the benefits today, but their family reaps the quote-unquote benefits financially, but it actually ruins them later because they got more money and they didn't go through the hardship, right? So that is a consequence of thinking you're doing the right thing, but not. And so for me, it's how do I think about today and also the future to make the best decisions for myself today? my family today, my family in the future. And a lot of that comes all back to the beginning of this book. And this concept is like education mindset, because the asset in itself is not life insurance. It genuinely is not. It's Life insurance is, like Austin said, is just a byproduct of things that you can do that can help. But if you just pass down life insurance and money and you get a banking system, but without the system mindset wise, which is why I think that this book's whole goal is to talk to people about a process versus more so than an actual product, then you're going to fail. And that's what you essentially need is you need to find a way to pass down to your kids, the next generation, the people you love, all of that. The education that you know, the discipline that you have and systems beliefs and foundation to be able to pass down something meaningful right and that's why you have the story of the rockefellers versus the vanderbilts one created foundation one created education one created systems both had money and then one essentially left with nothing and one today is still billionaires right so i really did appreciate reading the chapters again for the third time and i i took more away from it this time than i did in the past dom

Speaker 0 | 16:46.838

was there any anything that you highlighted that was like that's a great analogy. I know you mentioned like the shot example, the airplane example, which I think are two key parts of part one. Was there anything, you know, that was specific to the book or the infinite banking process that you want to mention?

Speaker 2 | 17:07.487

The, believe it or not, the, it was very small, but it actually was just like, man, that was so good. And it was the idea of the boiling point where it's essentially saying that, you know, 210 degrees, you just have like warm water. And then at 212 degrees, you have boiling, steaming, crazy hot water.

Speaker 0 | 17:25.407

That's not how it's... Do you ever burn your tongue on 200 degree water?

Speaker 2 | 17:31.115

Yeah, yeah, yeah. You know what I mean, right? This is the difference between boiling and not boiling. Yeah. And I also think of the... Maybe it's in Think and Grow Rich that came up with the idea, where it's the imagery that you see of the guy that has the axe, and he's hitting under the tunnel, and he's just going hard and hard and hard. And then like he turns around and like walks away and like gets upset. He's like, man, I spent all this time and energy and nothing came from it. And then another guy comes and essentially just like, you know, finds it. And it didn't take that much work because the other guy did all the work for it. And essentially just showed that the first guy, what he what he failed to do was he just quit. Right. And quitting was the thing that essentially ruined the entire thing of all things that he was working towards. And he was this close away to essentially achieving gold. And if he would have just spent an extra, an extra day, one more day getting there, right? The extra two degrees to essentially make it boiling, his entire life would have been different. And I think sometimes it happens here as well. Like we could even start policies for people and, you know, and you get it for like three or four years. And then ultimately happens like the fourth year, second, third, fourth year. They're like, why do I have this policy again? Like, do I even want this anymore? Right. And then Austin, you know. myself, Kayla, we all have intentional conversations with people like, Hey, this is why you got this in the first place. You are this close to over the hump and receiving all the benefits and rewards for it. Right. Just keep going. And I promise it'll be better. I promise you'll start to receive the benefits. I promise you'll start to get to the boiling point. I promise you'll start to get to gold. Right. And the people that stick with it, they reap the benefits and the people that don't, they go back to the starting point from zero. Uh, and you know, that's why I love, I love her Mosey in a lot of ways, Alex Mosey, when he talks about business. He talks about the same concept with people. Like they start a business for two or three years, it gets hard, and then they start over, and they do it two or three years, and then they choose another shiny object. And they never could compound the efforts to essentially reap the benefits of sticking to one thing. Same thing here. Like if you can't stick to this process and do it long enough and compound the efforts, you're never going to reap the benefits from what can come from it.

Speaker 0 | 19:34.833

Yep. So good. So good. All right. Well, I took chapter by chapter. and a a highlighted some key things that I'll just quickly run through before we actually do a deep dive. The big takeaway is actually there's an illustration disclaimer in the introduction. And I have to say, I wish I would have read that more carefully when I first went through this, because I was very analytical. I was presenting to a group of entrepreneurs yesterday, actually, and they were so analytical. And I'm like, guys, you don't get it. Like, just take it. chill pill. Just like get the big picture. And they want to know like super analytical. And I think what was frustrating was they're like, they're like trying to figure out this one little thing. And it's and it feels like they're, they're focusing on this. If you're watching on YouTube, you're seeing like, like a small fraction of what's really like they're missing the big picture. But that was me. And that was like almost probably most people that go through this for the first time. And so you almost have to, when you read this book, you have to not. take it so analytical you have to read it like you're reading like meditations by marcus or like a poem book or like even sometimes the not the bible is not not like crazy literal every verse sometimes you have to be like you have to take a step back and and so that was that was like a good reminder because now that i know like when i first read this i was going like i was on the apologetics like is this true is this not and now i can more appreciate like the concepts and to be like man there's there's some wisdom in here and like i want to live more intentionally and i think one of the aspects is thinking long term That was one of the things I highlighted is what's your time horizon? And the short-term time horizon is never going to benefit. I think one of the aspects of this whole thing is Nelson Nash and Dave Ramsey are actually not too far off. Like they're really not. They both had a very bad story. They went through leverage. Leverage turned on them both in unique ways. And they both have... ways of solving that. One is like pay cash for everything. And actually, Nelson Nash is a version of that, maybe even more extreme. And what they're both saying, and I think it's a good message, is just consume less. I mean, Nelson, in a way, is talking about the importance of banking and all that stuff. You could summarize it real simple by saying consume less and really capitalize on your consumption. So almost tax your consumption. That's what Nelson's saying is like pay cash for something tax it by you being the bank. And oh, by the way, dividend paying life insurance is gonna be like a long-term thing that you're gonna do as well. But they're both very much saying similar things. They have different strategies on that. And I think there's something wise about that because if you're really gonna do this well, that's the first person needs to be able to raise their hand and say, I am going to build the system. I'm going to say no to maybe purchasing the thing that I want, save up, and start creating a system and a habit. of starting to own the consumption decisions of my life. I, when it comes to the volume of money I'm gonna save, I'm gonna make an intentional decision to save more, create that pool of capital. And that doesn't happen on accident. That's intentional decisions of putting as much money flowing to your banking system as possible. And I think early on, I was so analytical about recapturing and how that works, and I had someone, actually, Russ Morgan, he, I remember I was struggling with this whole thing and he's like, Caleb, he just drew a simple drawing for me. He's like, all we're doing is we're helping people save more. We're taking someone that, you know, is maybe saving 5% and we're just helping them save 20%. It's like, there's nothing magical about that. You're literally, in scenario B, you're literally saving way more money. And if we can create systems and habits and all these to help people save more long-term, they'll be better off. But that means that they're usually saying no. to most likely consumption status or whatever but we're creating a system to be able to recapture money that you're are that's already leaving and so those are some of the things as i re read this it was like man that was really good for my soul to to go through um he talks about banking being the most important business in the world and he he mentions those who control the banking function has the power and i just think it's again like goals but it's just like that Okay, if we take a step back, you're right. The banks do- control all the big buildings and all. And what do they do? They're just, they're literally just in the middleman between money, the flow of money. And so it's like, why don't we learn a little bit about that and try to apply it into our own life? He talks about economic value added, which I think is going to be really key to understanding like what that principle is and how we apply it in our own life. It's interesting. In chapter two, he talks about imagination. And I like wanted to include more of like, okay, I'm going to write notes down. And I literally, guys, I have one I just have the quote by Albert Einstein that imagination is more important than knowledge. I didn't come up with anything else because he talks about this schooled example of, you know, division and all. But as I was reflecting, I'm like, Nelson, why did you start really like, you really started the book after you kind of gave a little bit of preface with the imagination? And I think it is important on this. The Bible talks about having a childlike faith. And sometimes we take ourselves too seriously. And there is an aspect of like wealth, like what you were saying, Austin, very much comes with within like you. You are your greatest asset. You're thinking going back to what you're saying, Dom, like thinking you're rich, like your ability to, you know, think, you know, what's in the ether. And I think that's I think there's something really important. And there's a reason why a lot of these greats go back to that and don't go right into the this is how the banking system works, but starts with like. this is only as good as how you think which i think is a great example yeah the grocery store example are you want to say something no no i was just yeah the grocery store example i think is classic i think it's self-explanatory i love like Anyone that reads that will get it. Don't steal the peas. You know, this idea of like, you know, velocity of money is another important thing that I think is easy to slip past. But the most important thing is that you were an owner of a grocery store. Would you go to other people's grocery stores if they were having a sale? No. You're keeping within your banking system and you're going to make sure that you're not going to rob from yourself. I actually don't 100% agree with that whole principle. but I think there's there's aspects of it that are beautiful. And so we'll talk about in that chapter how people use that as a reason to maybe take loans against their life insurance when they could get cheaper money. And I could make the argument with the essence of keeping more volume in the family, why you would want to do it that way, but I get the principle of it. The problem, I just wrote down max potential. For those of you that have not been aware of Todd Langford's max potential conversation I've had a video. a couple videos with him breaking down. It just shows you like volumes that like we need to save more. We help people save more money. It's not the rate. A lot of people are like, if I could just earn a little bit greater rate of return in the market, I'm going to be better off. And it's like, no, if you're only saving a few percentage, like you're not. You need to create systems to save more. And sometimes the way to be able to do that is to have that mentality of becoming your own bank. And so, yeah, guys, I mean, there's... Lots of good things. I also think just the way that he broke down dividend paying life insurance and human life value and even the example of like that taking off the airplane, you know, taking off is burning a lot of fuel and then gets more efficient. All goes into long term, long term, long term. But it goes to show that even Nelson, when he wrote this and in the conversations that he was having, was having the same. issues and friction and head noise that we face today. And in some cases, it's worse today because of all the shiny objects out there. But it just goes to show that there's nothing new under the sun. So thank you for coming to my TED talk. But yeah, this one was a fun read and lots of gems in there.

Speaker 1 | 28:09.470

Question for you, Caleb. What do you think are some of the other shiny objects out there right now? that are, and this obviously goes beyond just talking about the book, but what do you think are some of these shiny objects that might be tempting to kind of go after right now, that the wisdom that we learn inside becoming your own banker would kind of encourage us to maybe stay away from?

Speaker 0 | 28:34.881

Yeah, we say this phrase all the time, and it comes from this book in a sense, is life insurance is not an investment. It's not an investment. It's not an investment. I think it's So... Easy to be like okay should I put my money in Bitcoin or should I put my money in this fund and There's a sense of like if I it's almost like gambling in a sense. It's like I could do this I could go up I could like it's this it's almost like this addiction of like putting our money somewhere and having it multiply And there's nothing wrong with that But I think that's not a family system and it's like it very much is an and but I think the aspect is It's like, hey, you're going to have to spend years in the trenches building a foundation. A lot of times that's not sexy, and a lot of times we don't want to do the work to actually make that happen. And so I would just say that we're trying to continue to look to that thing that's going to, like, get rich quick or that thing that's going to, like, solve the issues or try to, like—I'm not diversifying the word. I'm, like, trying to outsource the hard work, trying to, you know— Dom and I know firsthand, like anytime you try to outsource too soon in business, it can kind of bite you in the butt kind of deal. And sometimes there's a lot of business analogies here as well as like building the foundation. And so those would be the examples of there's nothing wrong with investments, but build a foundation. A lot of people don't have any system, any framework, any foundation. they're just kind of like they they don't have they're they're just riding the roller coaster of you know, ups and downs of life, how they make their money. And it feels impossible to win long term, multiple generations with that mentality.

Speaker 1 | 30:18.149

Something else that you've said before, Caleb, I think is applicable here is that I think some people jump too quickly to making an investment outside of themselves is that they'll go sometimes the shiny object is just other things when sometimes the best investment to make is like, you know, personal, like getting coached or mentored or like learning a new skill or getting a new certification. Like you, like you, if you get those things, you could have a wild multiple of your income compared with what you'd even earn in a Bitcoin, right? Like if you put, if you've put $10,000 in Bitcoin versus if you like got a new degree, you learned a new skill, you did something, you could four or five extra income, maybe who knows versus, you know, what And that makes Bitcoin look paltry. you know, at that point. And just as just one example of an investment that has like a, you know, historically high, you know, rate of return.

Speaker 0 | 31:11.494

Yeah. And the idea is if you become more valuable in life, that's something that will compound the rest of your life. It's not a lot of times when we're looking at investments, we might get a huge pump in the first next couple of years. Does that always compound the next 90? Maybe, maybe not. But usually if you can create more value within yourself and how you think that compounds really well. Anything you guys want to say before we go in chapter by chapter?

Speaker 2 | 31:35.434

I'm going to have to say something just because of the things that you guys are talking about. If you were to have this be played to a million different people, I do think that a lot of people in the comment section would highly disagree in a lot of ways. Especially Austin, I have to say, and I'm not even biased, it's just that he's a realist. Using the example of saying that investing in yourself could 10x the ability of what you can make in Bitcoin. I think that that blanket statement is very challenging for me in my current state to essentially like say, yes, that's a hundred percent. Because when did you start investing in Bitcoin? What, what are you currently investing in yourself? If you make a hundred thousand dollars today, if you 10 extra income, you know, you made a million dollars per year, that's obviously an incredible asset that you now have, right? If you invested in Bitcoin in 2012 and you were putting $10,000 a year into Bitcoin, you might actually have more than that. And so I'm not saying that one was actually wrong or right. I'm saying that again, it's also the same question that Caleb asked that I've been thinking about is, what is your time horizon? When is it? And what's the end objective? Because we're now talking about, you say, hey, Caleb, we always talk about like, don't talk about life insurance as an investment. It's not an investment. It's life insurance. I think sometimes we also get into the category of. We talk about active income and we put it together with passive income as something like investing into something like Bitcoin. So investing in yourself, right, and is your active income of how you can improve and increase that. And passive income, investing into something like more like Bitcoin is a whole different conversation. And so asking yourself, should I invest in one or the other? I don't think it's very black and white because there's lots of people that have actually have a better, higher quality of life by investing into Bitcoin versus by investing, quote unquote, himself And sometimes what actually naturally happens is by investing into that thing, like a Bitcoin, you actually become more knowledgeable on that asset yourself by investing in yourself. And you actually reproduce greater returns with your active income and also your passive income. So I just wanted to remove blanket statements sometimes. And I think we get into this like foundational philosophy that like, we need to start with this foundation. We need to invest in life insurance. We do invest in ourself and without actually like looking at the bigger scope but like, what's the alternative? or what actually is that look like, right? And I think sometimes we're biased to the things that we actually like put our time and energy towards, which sometimes us as life insurance, Caleb, for you, it's business, right? And Austin, like you have an incredible backstory of all the things from teaching farming, where you're at, what you've learned from the books here. And I also wanna challenge just the foundational baseline sometimes that we talk about, because I think it's a little bit more complex than just like, here's what it is. So I just had to say that because, Yep. We get roasted in the comments if we left it at that. Yeah.

Speaker 1 | 34:33.197

Yeah. In my own poor paltry defense, I will say I did say four or five X, not 10 X. But your point stands. Your point certainly stands as like, you know, depending on when you invested in Bitcoin to now, like, yeah, you could get, you know, even even more than 10 extra income. And also this is and this is just a admission to my part. I'm kind of in a season of my life where I chose to make an investment in myself rather than take the money and like put it in an outside investment. I I I went through a self-publishing course and that's just something that I'm doing on the side. And so that was like me, you know, doing what I feel like I needed to do to increase my own active income at the expense currently of passive income. And so there could be reasons why people, somebody would make the alternate choice and I get it, but for me and what I need for my family and what I feel like is the best for the long-term, my, my, my long-term passive investments, it was increasing my active income right now. And so that's kind of the mindset that I was taken into it.

Speaker 2 | 35:32.770

This could take a whole other conversation, so I'm not going to keep going.

Speaker 0 | 35:35.572

Yeah, I'm going to bring us back to the book. Bring it back to the book.

Speaker 1 | 35:38.334

Let's go.

Speaker 0 | 35:39.916

Bring us back to the book. All right.

Speaker 2 | 35:41.882

Good for a future talk.

Speaker 0 | 35:43.201

Introduction. Introduction. We all kind of gave some big takeaways, but your need for finance is greater than your need for protection. Solve the finance problem. Protection comes easy. That was my reword of what he said. You know, he talks about recapture interest. That one is already paying. He also talks about the illustration, disclaimer, thinking long term, wealth needs to be resolved somewhere. I think that's a key place. Your money's got to reside somewhere. And then your need for finance. Anything that you guys want to mention as we go through introduction of this book?

Speaker 1 | 36:19.039

In the introduction, I mean, I think you covered that. I think we spent a lot of time actually talking about the introduction. Yeah. In the minutes that we've been here already, yeah, I think he lays out a lot of the themes that he explores later in the book. And he does it just in soundbite, so you don't get the full nuance of what it gets talked about later, but you do get the sense of what it's about.

Speaker 0 | 36:47.909

So then in part one, this is where I'm page 11, he talks about becoming your own banker. And some of the highlights that I made was most people know nothing about banks. Which is true. Actually, accounting for banks is totally different than the real world. So that's just a good example. And that also is something that's interesting that an asset for you is a liability for a bank and a liability for you is an asset to the bank. So loans are actual assets to the bank. And that's just a really interesting way to start shifting how we're thinking about when we use money. Imagine if that was an asset to our family versus not. Banking is the most important business in the world. I think he really creates a theme there. And I think this is one of the reasons why this book took off is that he knocked it out of the park with that mentality. Even the way that this book is designed, it's like a vault. Also, those who control the banking function has power. And then the last point I made is how much of the banking function do you control as it relates to your needs, which I would reword as your consumption needs or your use of money. when it comes to part one what what uh what are some of your thoughts on on those points or and if you guys have other points please pipe up dom i want to hear from you haven't heard from you as much today amazing

Speaker 2 | 38:12.937

uh i think at its core foundation you know probably don't need to spend too much time on talking about like why was the book written and it even says that at the end of the first page. Really talking about the focus is to create your own banking system and figuring out a way to do so. I, for people that are trying to understand this, don't want to make things so complicated because I do think we're going to go down a rabbit hole of how banks work, fractional lending, like the Fed. You start going down this whole rabbit hole. After you learn all this stuff, you then say, now what? And I think that that sometimes can get to a place of at least starting Let me escape the matrix. Let me think differently. Let me be different than what everybody else is doing. And I think that's great. But at the same exact time, um, I think that stuff is very minuscule to the things that really matter, which again, it's identifying what you want out of life, getting really clear from a headspace mindset, and then your heart, and then using your dollars for that activities to essentially get you to your, your end result in life. And I think that it does a really good job though, in this chapter, just giving more examples and we could talk about those examples of changing your mindset because, you know, I just listened to, I just went to church the other day and the pastor was talking about the power of the mind and essentially says like, you need the Holy spirit to have focus on, uh, removing sin from your life and focusing on what God's will is for you in your life. And when you're not having anything to do, what is your mind thinking about is probably where your heart's desires are at. So it comes to the same exact thing as like when it just comes about like money like where is your heart's desires at where's your headspace at what education knowledge do you have and that's probably where money is going and if you have this banking system set up which i think is great well then your mindset is in a different place of like consumption discipline focus and talking about like the headwinds and the imagination all the ties again back to your head back to your heart how do i create a system a banking system that allows me to be more efficient with my money and trying to keep it as simplistic as possible So... I think going into the super nitty gritty, woe is banking system, Fed system, all of that other stuff. I try to not go too down a rabbit hole with it.

Speaker 1 | 40:26.521

Yeah, I think that the... the way that he, he kind of frames, you know, what are you doing? You know, how are you building the vacant system of your life? And Dom, as to what, you know, what you said with the sermon that you heard and how, you know, what you fix your, you know, what you spend your time thinking about is what kind of where your heart's desire is. Like if people just have a bank account and they're not like actively trying to thinking about building a legacy, like, cause this, this strategy is like, you're, you're building this legacy. You're building this. you know, family banking system that's going to potentially span generations or something that doing this is like a long to your thinking long-term versus like, if you just have a checking account, you're just thinking about today and about, you know, how am I going to pay for what I need today? So it's just, like you said, it just has a different mindset that's, that's attached to, even though you're maybe you might be putting the same dollars in, but one is like, you're, you're actively investing in the future.

Speaker 2 | 41:23.482

Caleb, I think the question you asked was personally, was challenging mainly because the first question asked was what is the takeaway of the first chapter and then because that's what we're talking about like what's your big takeaways and then your second question is what is your thoughts on the first chapter so it was hard to not explain the the first the same thing over without just broadly you know if we went by like section by section or a different topic we probably go in a little bit more depth about like a specific function of the the chapter so i apologize on my end if It wasn't necessarily a good enough answer. I tried to add more value than what I previous did.

Speaker 0 | 41:56.516

Yeah, I mean, what I'm trying to do is I want to go through this book because there's many people that are maybe reading it for the first time. There may be people that have read this a hundred times and they want to take our take on this book. And so please share your opinions and try your best to anchor them back into the chapters or the pages that we're talking through. So then it talks about on. page how the infinite banking uh concept got started this is starting on page 12 and this is where he talks about his story this is where uh the drawbacks of leverage you know i you know he it was so super interesting he said that he got used to the normal rates of return around nine percent and then rates shot up 21 percent 21.5 percent to be exact and it was devastating it was devastating and i i just think it's like it's easy to kind of point your fingers but i'm like man How many people right now, if rates skyrocketed 21% and everything got refinanced, that rate would be underwater? Majority of it, like almost everybody. And outside the people that actually have their own pools of capital and way under consume. And so he talked about that. And then like the, you know, he has a phrase where he says a lot of times, like he talked about he could get money from his life insurance policies to five to 8%, which is. pennies compared to what the banks are charging but he said but you don't see it because you don't look at thing you look at things like everybody else i think that's another aspect um of this is being willing to think differently be willing to you know be willing to say okay maybe maybe i do should care about how the banking system works and how the federal reserve works and not not to i think we there's two sides of the coin right there's some people that are like they're living in a world where they can't control. There's other people that are like, I don't want to be ignorant. I want to understand what things are going. But then your life will get better if you can translate that into a mission or into principles of better live, not just no knowledge, just to know knowledge and be more upset. It's sometimes the people that know more, the more miserable people. And that's obviously not not the key to life. So when anything about this chapter that got that you guys, any takeaways that you have or thoughts as you read this, as you read this?

Speaker 1 | 44:18.139

Yeah.

Speaker 2 | 44:18.920

Yeah, I think the part that you said, Caleb, about the nine and a half to the 21 and a half percent, I think is something that a lot of people are currently actually feeling now. Like it's a very small perspective, but like you go to rates of low two and a half to like as high as like eight percent and a lot of facets. Like you go from people that want to buy a home. And back then, Jamie and I, we took a drive and we were looking at a home that was like. 1.8 million dollars and we were just like oh like look let's look at this drive to this neighborhood and they had one of those signs and we saw the total cost and i essentially asked chad gbt i said hey what would the the monthly payment on this mortgage be and it was like around you know and i said what are the average rates it was like twelve thousand dollars a month and then i essentially said hey like if rates were back then which was only a couple years ago like two and a half what would the the monthly payment be now and it was around like 7500 and so you can see that the difference in cashflow changes by like five grand ish per month. And it's a massive difference in regards to just like what people can do with their money and the access and control of what is possible. That happened in 2008, right? People had variable loans, things shot up, people were underwater and they couldn't afford it. And that's when one of the biggest busts of all time happened in the real estate market. And we know it was interesting because When he said that, that say lines, you can get five to 8% from your life insurance. I was like, yeah, that's what it is now. And I was like, well, there's probably a point in time when, uh, interest rates were higher, that loan rates were also higher. And I would, it'd be interesting to know and go back. Like if, cause that's how just for everybody that's on the call understands is when interest rates go up, dividends also go up, which means that your policy will perform better, but loan rates also go up as well. And loan rates are actually more. quicker response a lot of times to affect it to what the interest rate environment is. And I was like, well, if they were at like, let's just say 20%, did that mean the loan rates were 15, 16, 17, 18% at the time? I wonder what the stipulations and rules are then, because I do now read contracts and insurance contracts today. And a lot of the verbiage language is say 8% will be your ceiling. So you don't have to worry about it going above that, which I think is a good safe haven. because it's like, well, if interest rates do go to something astronomical high, you know that you're guaranteed to not have to go above 8%, which is the safe money, safe. And so, yeah, you know, I think the whole concept of it is great.

Speaker 0 | 46:45.775

And Nelson, I obviously didn't say anything in this contract, but he worked with Guardian. And if you understand Guardian, their direct recognition, 8% fixed. And so for those of you that want to get super analytical about non-direct versus direct, Probably if you took an 8%. loan, his dividend may have taken a quote unquote hit. I think that's the last thing that Nelson cared about at the time, you know, because it's like when you're underwater, it could be a, you know, life changing event. But those are for those that are super analytical around like, hey, the insurance company would actually go underwater if that was the case. The way that you get around that is direct recognition. This is not an endorsement for direct versus non direct. That's just like, that's how that would work back in the day to get loans at five to 8%. when interest rates are at 21. Like, how is that possible? Well, that's that's possible because of how the contract is written.

Speaker 2 | 47:39.274

Just a couple things with that rates for a fixed side, they're actually closer to like 5% as of late with Guardian, which is great. So just kind of shows that that barrier of like five to 8%. Back then, when they were at 8%, the fixed side of things, when you would borrow, because you said it would affect your dividend. The dividend actually increased. So let's say the dividend was actually like 6%. When somebody would borrow, it actually would make their dividend go higher. So closer to like 7%, closer to the 8% fixed loan. So that actually was a benefit for people at that time with interest rates and the fixed rates 8%.

Speaker 0 | 48:14.613

Are you saying there was a benefit at when it was at 21%? Well,

Speaker 2 | 48:20.394

I don't know what things were like at 21%, right? So it all depends on what they...

Speaker 0 | 48:24.520

Yeah, I think Logic would say it would... do the exact opposite, but you're totally right. When interest rates were lower, if you as a policyholder to a mutual company are going to be made right, or it's going to be over a long period of time, it's going to be made right across the board.

Speaker 1 | 48:40.391

So the way that it can help you with a direct recognition carrier is that, let's say that you have, let's just say, for instance, that a policy, let's say a policy loan interest rate can get really crazy high, let's say like 15% in like a direct recognition carrier because the interest rate environment is higher. But we have one carrier that we work with where they peg the interest or the dividends of the dividend interest rate you receive on the loan dollars off of the policy loan interest rate and then a certain amount of basis points underneath that. So, you know, if the dividend that they're awarding, let's say, let's say we're in a topsy turvy environment where the dividend they're awarding is lower than what the policy loan interest rate is. if you borrow against the money, then those loan dollars are going to receive actually a higher dividend rate because it's actually pegged off of... the policy loan interest rate and not the dividend rate. So that's another way in which it can actually help you.

Speaker 0 | 49:31.343

Yeah, we're going to, yes, I think that one of the key things is power and access to other money, especially if interest rates go up. I think we can all agree that they're probably never going to go up to 21%. If they do, we're going to have big, big problems. And the fact that you have access to money that's going to be a lot cheaper will be a value. All right,

Speaker 2 | 49:48.601

let's go to the- When they were 21%, nobody thought they would go to two and a half so You know,

Speaker 0 | 49:52.591

that's right. Hey, it's Caleb Williams here. I'm just interrupting this video quickly to invite you to check out our and asset vault. You may have been there, we've actually re revamping it. And if you are somebody that wants to learn more about his life insurance, right fit for me, does this and asset makes sense? Like, does this actually help me be more efficient? We've put together a 10 minute documentary style video. And I think that's a really, really good job giving the history why the and asset different setups and designs that we use. And then we have an innocent fault that gives like... case studies, calculators, handbooks, and so much more. We are here to serve you, whether it's a conversation, whether it's education, or the video. So make sure to go check out andasset.com slash vault. Learn more. Let's talk about the imagination chapter and the grocery store chapter. Don't have much to say other than what I mentioned to begin with is, you know, imagination, how we think is important. And then the analogy around You know, the can of peas, flipping it so many times to create a profit, you wouldn't steal the peas, which I think is a great analogy. And so I want to hear your guys' thoughts. And then I have a contrarian take on this one.

Speaker 1 | 51:01.770

Yeah. I personally, as an industry, I love the metaphor of the grocery store. And like all metaphors, they do break down at some point. You know, no metaphor is going to perfectly describe what's happening somewhere else. But I think that it is very clear when you go through, like, okay, what happens in a grocery store? Would you... would you steal from yourself? Like, you know, like, is that, does that make any sense when it comes to your bottom line? No. So then, you know, why would you use your life insurance policy any different? Like, I really liked it because ultimately, like, I think we can identify a lot with the fact that like, oh, like if I own the grocery store, you know, why would I charge myself for food since this is my business? Like, and once again, it's so short-sighted because, that stealing from the bank It's probably not even just going to be you and your wife. It's going to be the other employees. And if you want to take that metaphor to banking, it could be other people in your family who kind of steal from the personal banking system. It creates this really obvious like you're actually stealing from yourself long term. Like, yes, you are making things easier on your cash flow, but the money doesn't just like magically pop out of nowhere for these. Like you're ultimately, you're stealing from the profitability of your business. Like you can't, like the money just doesn't magically appear. These groceries don't pay for themselves. You're just stealing from yourself in a different way and you don't feel it for a while. So I really, I really like the metaphor.

Speaker 2 | 52:29.677

For the imagination piece of it. This one is hard for me. I actually wrote down reflect on the story of the kid in math. And then I went to go reflect and I had nothing to reflect on. So it's maybe that's just like my brain and how it works. I'm like, okay, I'm not the person that. And maybe we're so far, I've been in the industry now for a decade. So I think it's hard for me to go to that place knowing that I'm not in a place where it's like, well, what do I need to just reimagine within this side of things? So I did think the story was cool, though. I did really like it. And I was like, oh, that's epic. I didn't know that that's how that math worked with that example. So I thought that was entertaining was the best way that I'd probably say in this one.

Speaker 1 | 53:10.944

Yeah. Yeah. I only had one thing underlined in the story. and so like Yeah, it was like, oh, yeah, I got I agree. And then it was kind of like spend more spent most of my time just kind of pondering the grocery store metaphor and what that one meant.

Speaker 0 | 53:26.489

Two things that I took out is don't steal from the don't steal the peas, which I really appreciate it, because I think there's an aspect of sometimes it's that analogy of, you know, maybe paying cash for something, not paying yourself back. And now your whole systems. So it's like, don't steal the peas. I 100 percent agree. But then he talks about like the. you know, you're as a family, you have your captive family, you should you could charge them more, you know, because they're loyal, which I'm cool with that statement. But the more you think about it, you go, okay, if I was actually running a grocery store, and there was a grocery store down the road that had a sale on peas, like a big sale, would I be robbing from myself to go buy those peas? And as I was thinking, I was like, you know, Bye. You could make the argument that you as a family could be better off going and buying peas at half price over there. You're not like it's like you're actually like if you actually do the accounting, the idea is and we're going to get to the problem section next is being able to save more, is to be profitable. And so I do think you should look at profit. That's why you don't want to steal the peas. That's why you don't want to go out the back door. But it's like... That's where I think some of these analogies could break down because it's like, okay, Nelson, is the goal to be profitable? Yes. Okay. Then let's make there are scenarios that I could be more profitable by making a different decision, but I'm optimizing for profitability in this analogy. and another example of this, this is not like he talked about the principle, but it's like the idea of you need to be loyal to your banking system and so I'm gonna take a loan from... my banking system at 7% when you could back in the day get a 3% car loan. Well, you don't be loyal to yourself. And it's like, actually, like, that's, that's dumb. Like, why? Like, you could actually save more in your banking system, have less risk, it could be like better for your family to do to do that scenario. I get the whole concept. But that's where that's the pushback. But I also appreciate the concept of don't steal the peas. I appreciate the concept of you know, make sure to patronize your family and your business, but figure out what you're trying to accomplish. And I believe it's being able to save more, have a greater pool of capital profitability. And if that's the case, it's not a... black and white, one size fits all. Sometimes to hit that, you need to think a little bit differently, but we need to optimize that metric, whatever we need to optimize.

Speaker 2 | 56:05.143

I actually, maybe you disagree with me. Yeah, let's go.

Speaker 0 | 56:11.136

There is a point when you said- It's almost an hour in, we're all agreeing. Let's go.

Speaker 2 | 56:14.775

Let's go. I disagreed with Austin earlier, so. That's right, that's right. You were the first. So, and a book review, you know, anyways, I digress. The part where you said like you don't think that the grocery store example was talking about like life insurance specifically like that like the loan side of it is where I disagree and the reason why I disagree is because on page 20 he does talk about the example of the bankers and them having the underperforming loans that they were just being paid to essentially themselves and they also would then take that money and they go invest in oil and then energy would essentially go downhill and then Now the banking business went downhill and also the oil business didn't downhill. But then he says, he said, had they repaid their loans plus interest, their bank would have still been in operations, but grief prevailed. And then at the bottom of it, it says loans have to be paid back or you can kill the business in the world. And then he, and then right after that, like directly the next paragraph, it says there is a much easier way to accomplish this creation of a banking system. And he goes talking about life insurance and essentially tying in like. You need to pay your loans back when you're using your banking function. You need to. And the only thing for creating our banking function you can use to you have to pay your loans back would be a life insurance loan.

Speaker 0 | 57:29.816

So that's why I think that's that's on page 20 is in a different chapter.

Speaker 2 | 57:36.761

But he also but no, but real quick. No, no, real quick. He says so I skipped over it says right before I talk about he says loans have to be paid back. You can kill the business. He says does all this sound somewhat like the grocery store example that you read about earlier?

Speaker 0 | 57:49.010

Exactly. Yeah, no, it's an analogy that he's building upon. That's all I'm saying. It's totally right. All the things that he's building in this book, he's going to reference back by saying, this is the analogy and don't steal the peas as an example of life insurance loans. I tried to read this as saying, okay, he's building the analogy. I want to judge the analogy. And then we can, in that example, we can also now judge that statements of referencing back to creating your own bank.

Speaker 2 | 58:17.593

Okay, so I just... So what you said specifically about you didn't think it ties directly to the life insurance, you actually do think it ties directly to the life insurance. Yeah,

Speaker 0 | 58:24.296

but in the chapter of the grocery store, he's not directly talking about how this relates. He's building the analogy to reference back, and he references back in the entire book around this idea of not stealing the peace. So this is why we have three people on the show, not one.

Speaker 2 | 58:44.069

No, but I do agree with that too, which is... He ties every analogy to its own story and then think you're getting into mindset. And then once you have the mindset, then he tries to tie it back into it. So yeah,

Speaker 0 | 58:55.903

I do agree with that. The golden rule for next week, tune in, is going back to creating that pool of capital. Those who have the gold make the rules. All right. Anything else before we get into the problem? The problem section arguably is one of the most important sections. And I... I really like the shot example of volume versus rate. I think a lot of times we think we just need to earn greater rate of return, but your system is broken and you're just not saving, period, which is a big problem. I think the airplane example, I wrote this down. Most people in this situation concentrate all their attention on trying to make the airplane go a little bit faster when they should be spending their energy on creating the environment that they're in. And I think that. example gets maybe overused sometimes, but I think it's really wise about like, you know, I don't think any of us have flown, but anytime you're operating an airplane, you have to be aware of your surroundings. And sometimes you just choose not to fly if it's a bad surrounding. And that does matter. And the fact is, a lot of times you could look at this and say, I can't control the weather. Well, you really can't. But there's aspects of your financial life that you can control based on the mentality that you have. So I think there There's power in that. And then I just wrote down, you can control the financial environment in which you operate. Perhaps it's cause of lack of imagination, tying back to the imagination. Whatever the cause, learning to control is the most profitable thing that you can do in your lifetime. So that was an interesting statement. I feel like Nelson's makes a couple of those definite like most important thing, but I think it's like in anything like that's worth underlining. And it just goes back to the max potential. For those of you that have never seen that, we'll make sure Joel to put that in the show notes, that video, because I think max potential is an important one to... to see what were your guys takeaways on the on the problem section. So

Speaker 2 | 61:03.144

I'll start with the glass half empty version of what I didn't like and then talk about the good that I really loved. And so there's there's parts again on here that I think I'm not a huge person when it comes to just like making definitive statements. And I think sometimes you're doing a book or you're on a podcast, it becomes very challenging, you know, because there's just so many things that could be variable into somebody's life that becomes challenging to essentially decipher if that's true or not. Because, you know, for instance, I'm a huge proponent of cashflow. And I think that cashflow honestly is probably one of the, one of the most crucial pieces that somebody should look at when it comes to creating financial independence, right? When do I have enough ability to have more cashflow than expenses to give me the ability to do what I want when I want to help the people that I want to live the life that I desire. He talks about like leasing is bad and, you know, selling a home, like all these different things are bad. Right. And for mathematically, in some scenarios, you could probably argue, you know, but for like renting a right now, like a home versus buying a home, you could argue that you will get way more cash flow for way more value of a home with higher quality of life than not. Right. And so we're just digressing the problem. I think that we're talking about and all this stuff happened like a long time ago. So I think that's also the the challenging piece to. you know looking at this from like today versus then but i just wanted to state that like the bad sometimes you talk about math and things like that different states of the economy it becomes challenging especially cash flow is king all right now for the good um i really love that he talked about the idea that people focus on higher rates of return right versus focusing on like what your dollars can do for you and control right and we talk about this all the time of like well if you have a million dollars in 401k versus let's say eight hundred thousand dollars in life insurance. And your rate of returns on one is like 10 and another one is let's say five. Well, it seems like the 401k is like better, sexier, stronger, et cetera. But when you start talking about like, what do you have actually access to and used to, or what stage of life are you in? Like if I'm 35 versus if I'm 65, more control, more access to money, the utilization is more important to me than maybe if I'm 65 and I'm ready to retire. And so I do think that sometimes You can get more utilization of dollars with less when there's also the multiple benefits that are also happening, such as life insurance, which is the death benefit, the overload protections from the living benefits, accelerated death benefit rider, the tax advantages, a lot of really cool things that a lot of people aren't aware of. And I love that he just focuses around higher rate of return isn't necessarily always the answer. And then the last thing that I really thought was awesome is the tailwind. in talking about when you're flying and you obviously hit this tailwind and you're just like, whoa. And then you go from 345 miles per hour to 100 miles per hour and that's where people just give up in life. And that's actually what happens. People, they get beat down, they struggle, they get hit in the face, they get kicked. All these things happen and then they just give up, right? And then they get accustomed to this is the way life is. And it kind of reminds of the grasshopper example that gets put in a box, right? He's jumping, jumping, jumping, hits it, hits it over and over again. And after like so many days, uh, they, they take the lid off and the grasshopper no longer jumps because he's accustomed to just like, well, I can't get out no matter what. And so you're locked in the matrix. You're locked in your headspace of the system. Like I failed. But if you just keep pushing a little bit longer and you just keep grinding and you just keep to the other side, you now can two X and you go from 345 miles per hour to 600 plus miles per hour.

Speaker 1 | 64:49.772

and a lot of really beautiful fruit comes from it so again i really love this book from a headspace mindset and i think that was the intention of this book which is what i really value in a lot of it yeah yeah the the strongest part of this chapter for me was definitely the analogy of of the tailwind the headwind and it reminded me of one of the stories when i before i was even in in the finance space that i heard uh i had this uh this coach and he was just telling me a story and there was this guy that he had talked to um at one point and uh this guy this is like so this is the headwind tailwind example is that um didn't know any specific details about this guy's life other than he was making really good money um as a realtor but then ultimately he was going in the hole by tens of thousands a month because of you know lifestyle choices that he had made and like it's crazy to be in a place where you're making six figures like you're you're in you have a good job but you have such an upside down sort of lifestyle and you like to the point where you're going tens of thousands in the hole every single month you're having to to liquidate your other investments in order just to stay afloat in the present, is that like, yeah, like, you know, you could probably find like a more ideal place to maybe save part of your six-figure income. But ultimately, it doesn't matter because there is a mountain that is currently just like dropping on you and it is going to bury you if you don't do something about it. Like you need to turn around. Like this comes back to what he talked about in the introduction, which is, you know, this is. This is like Caleb was saying, like tax your consumption. Like this comes down to changing your spending habits. Ultimately, like that's the analogy of like turning the plane around is like changing, changing your your household economy, changing your spending habits. Like what do you find valuable?

Speaker 0 | 66:47.290

Yeah, I can very much relate to you, Dom. When you're like when you're reading the problem, sometimes there's like some cringy moments because like, I don't know if I agree with your definition of the problem, but I think we agree that the fact that the average American saving less than 5% is the issue. And so whether it's a 30-year mortgage problem, whether it's credit card debt, like we're consuming too much, that's the issue. We might have different ways that we communicate that, but that's the issue. And I do, I think you guys both made really good points there.

Speaker 2 | 67:21.071

Which, not to get too spicy with y'all, which one of your wives is vacuuming back there? I hear a... Is that Austin? I can hear the vacuum the whole time. Okay, just checking in.

Speaker 0 | 67:37.727

Great timing, yeah. All right, so the chapter five is creating a bank like the ones you already know. And this is where Nelson talks about starting a real bank isn't easy. It's going to take years to get off the ground. He talks about fractional reserve lending and he talks about the book case... against the Fed. He talks about loans have to be paid back or you can kill your best business. That's where it references back the grocery example. And then he quotes, there is a much easier way to accomplish the creation of owning your own banking system. And the mechanism has been around for over 200 years. And it's tried and true. It's called participation, dividend paying, whole life insurance. The problem is that very few people know. how this business works, including the home office folks. He takes a jab at the home office folks. In the life insurance company, he also goes on to say, creating your own banking system through the use of dividend-paying whole life insurance is like a cogeneration, and all the ingredients are already there in place. All you have to do is understand what is going on in such insurance plans and tap into the system. due to time uh Anything that you guys want to add in this section before we go on to the next section?

Speaker 1 | 68:59.807

The co-generation analogy is something that I think...

Speaker 0 | 69:04.850

I knew you were going to say something about that.

Speaker 1 | 69:06.444

I had to read it a couple of times, at least the way that he phrased it and that he explained it. But it's such that thinking about the way that it relates to life insurance is that... you know, you, here you have this, this, uh, this plant and I'm trying to remember what kind of a plant, um, it actually was, but then there was a, an electrical plant that was like co-generating power. And it's like, okay, like the analogy with, with banking is that once again, if you could, instead of just losing, um, if you can recapture as much interest as you can, right. Or just, or Or, or let's say recapture as much interest as you can, uh, try to tamp down on your spending, make sure that you're, uh, you're paying into, you know, that whenever you are making purchases that it's wise is that like, you're going to, if you, the more money you put in the system, the, the, the bigger the system gets, that's what the cogeneration plan is kind of going for there is that like, they're taking the waste products from one plant. They're using it to create electricity to power the other plant, which then makes... everything more efficient and effective, which is pretty much to say is that like, try to be as efficient as possible. You know, try to waste as little as humanly possible. Don't finance something unless you need to finance it. Right. And I think what it's getting at is like, be wise about your spending because if you're going to spend waste as little as possible, that,

Speaker 2 | 70:41.737

that was the time Caleb, we can.

Speaker 0 | 70:45.190

Yeah. Yeah. I think if you, if you're looking at this big picture, it's Nelson's talking about the importance of a bank, then logically it's like the route of creating your own bank is hard, and then the next section is creating your own banking system through dividend paying home life insurance. And then the first principle he goes back to, you finance everything that you buy, you either pay interest to somebody else, you give up interest that you could have earned otherwise. He talks about opportunity costs and he acknowledges that a lot of people like to play lip service to opportunity costs, but very few people live it. Economic value added is the thing I highlight, something I think the more I study, the more I learn. So I'm by all means not, don't, I don't fully get that concept other than the fact that it's like. Every decision we make compounds and dollars today we need to value them more than just a dollar And so I think there's something great there You're the owner and the idea he really talks a lot about the importance of ownership And even in a dividend paying whole life insurance contract you are the owner He says that the insurance company is just the whole liaison. What does he talk about? He put it somewhere here. You're the owner outranks everyone absolute control. I wrote somewhere where the You're the country the insurance company just administers it that's actually in the next section But it just see like talks about like you're the you're in control. You're the owner That's you could tell that controls a big thing for him He talks about the Boeing example of taking off and how you burn a lot of fuel Which is an analogy for when you start your banking system whether you do it the traditional way or the life insurance way There's gonna be cost early on and it gets efficient as time goes He talks about income tax was in 1913. Insurance predates that. And then he talks about human life value and how you take somebody who's working with the bank over here, already paying interest in the loan over here and getting term insurance over here. And he's like, what if you combine this? But he also acknowledges that you're going to have it's going to take some time. But imagine going back to the imagination. Imagine if you could redirect the three hundred and ten dollars. into your own system, like long term, you're going to be better off. One of the things I think you need to factor in is there is a little bit of a delay there, which if you're being if you're playing fully, fully devil's advocate, there's opportunity costs in that delay. I think we'd all agree, at least I'll speak for myself that in most cases, building the foundation, you might be slow or start, but there's so many people that go back to zero in the way that they make decisions. And you're you're almost ensuring that every year you're going to get better, like that Boeing airplane taking off. Any big takeaways that I mentioned or didn't mention in this section that you guys want to highlight?

Speaker 2 | 73:30.157

I'll just mention, just add on to your emphasis on the economic value added. And I think that's a big piece of the chapter and everything like that. And in a very simple way, Caleb, you're actually very good at this, just even outside of just this in a box, of just thinking about how you're...

Speaker 0 | 73:51.969

I'm not used to getting compliments from Dom. This is great.

Speaker 2 | 73:54.010

They're very slim, very slim, right? But it's essentially like, are you making more than your money could have earned elsewhere at the same exact risk, right? And I think from your perspective, Caleb, you do a really good job of thinking about even control costs. And you've always said, hey, sometimes I would even rather not take a loan at getting 8% growth somewhere. to keep control of my capital, knowing that like, if I have more control, there's a really good chance that I could actually go get make 12, 13% of something else that I understand like business to get a higher rate of return. And so conceptually, like when people are thinking about this idea of economic value, it's Nelson does a, does a great job of thinking about this within like the life insurance policy in itself. But I just think also like mindset wise, um, This is a very important concept to think about. And I actually think you live and breathe this more than anybody that I know.

Speaker 1 | 74:51.325

So love that. So nice.

Speaker 2 | 74:55.782

It's the last one that I'll ever get on the show.

Speaker 0 | 74:59.048

So we'll count them. I'll send anything you want to add before we go, before we hit home plate.

Speaker 1 | 75:05.775

Let's hit home plate, man. I'm ready for it.

Speaker 0 | 75:08.432

Okay. So last, last thing, uh, as we're, you know, wrapping up, he, he goes back about the. The basics and then he also has a review and some of those are you finance everything you purchase we've talked about that quite a bit You know create the entity you own the contract the insurance company just administers it. I think that's important to Nelson Banking it's a process not a product show and so Joel, please show the picture In the show notes. This is on Page 26 where you see that the banking is a process not a product. So you see premiums going in dividends going out expense operations going out death claims going out you have your pool of capital and then this pool of capital you know works with policy owners more ages joint ventures and you so just that basic picture of how banking how insurance companies work and then you know just goes over again the importance of imagination the grocery store the money problem which I put The overconsumption and the volume of money flowing outside of your control. That's my take on it. But again, we all can agree that lack of creating a pool of capital is the issue. Create a bank like the one you already know about and then how dividend paying life insurance works. And so I see part one, if we had to summarize the whole thing is there's a big problem. Banking is a solution. Figure out how to be bankers in your life. 99.9% of you won't be able to start your own bank. The traditional way, dividend-paying life insurance with a mutual company is an amazing mechanism, but it's a process, not a product, and really setting the stage for what he's going to go in to the rest of this book.

Speaker 1 | 76:53.217

In this final section, this is actually where I pulled out my disagreement with Mr. Nash. here, it's on page 24. He's talking about the young man who is paying over 35% of every dollar of African tax income to interest alone. He says it should be obvious that his need for finance is much greater than his need for life insurance protection. And something I've seen now that I'm on kind of both sides of the... I do sales, I do service, and I talk with people who are at, like Dom said, that three or four year mark where they're like, why do I have this? And it tends to be the people who didn't put any value on the death benefit. early on and they just thought of this like, oh, this, this kind of shiny object, cool banking thing for me to do. Like I can park my money there, but like ultimately they, they forget like, and this is what I, I always walk people through and, and I'm, and I've had discussions with other coaches about this. And I think I feel more strongly about this than maybe other people do, but it's like, you are buying a life insurance product. Like you have to accept that, understand that. And you have to put some value on the death benefit. Doesn't have to be the main thing, maybe, or the only thing, but there has to be, like, for this to be a long-term strategy that makes sense for this year, next year, four years from now, 10 years from now, there has to be some aspect that that death benefit is bringing value to your household economy and to the relationships of the people around you who depend on you. And if it doesn't, you know, there's going to be something cool like a, like a, like, you know, a MAGA account or whatever that just opened up that like, is it going to be like, oh, this is the newest, greatest thing. I'm going to put my money here instead. Like if nothing will ever do death benefits except for life insurance, like there's going to be other kind of cool financial things that come around, but nothing is going to have like the multi-tool nature of life insurance that is a place to park your money and has tax advantages, you know, and as you know, creditor, predator, loss of protections and has a death benefit. Like There's just nothing we'll ever do.

Speaker 0 | 78:56.947

And again, I. I'm going to try to defend the person that's not alive, defend himself.

Speaker 1 | 79:01.786

Yeah.

Speaker 0 | 79:02.747

I mean, Nelson literally in part one talks about human life value and, you know, talks about, you know, the even even he acknowledges like how someone would sell life insurance of like what it would cost. So I'll show you how to do that for a fraction. So I think he and he he's mentioned if you if you figure out the financial financing need in the problem, protection easily gets covered. So I don't. I'm with you on that. I just think, I don't think maybe in that section, it could be easy that he's overlooking some things. But I think he's did, he referenced it a couple times in part one, the importance of protection. He just is like, we're missing the mark if all we're talking about is protection. You actually figure out the financing thing in this analogy. If you're putting $310, you're going to solve both. But I'm with you on that. If people don't value the death benefit, and they don't value insurance, insurance period, there's this strategy becomes less like why you used to have been paying whole life insurance. You could make the argument that there's other accounts that could be better if you didn't care at all about the insurance aspect. Dom, you want to say last words? It was funny. I was like, oh, we're going to get done with this in like 40 minutes.

Speaker 2 | 80:12.790

Yeah. I was just saying we're already four minutes over. So I just didn't even think to say anything. So yeah, I'm okay. I'm okay with not.

Speaker 0 | 80:19.790

So tune in, tune in for the biggest book review. I don't know. I'm just going to make up things. But literally, we want to hear from you. We very much want to hear from you. We obviously have talked for way over an hour, and I feel like we only scratched the surface. Tune in for next week where we go into part two. And for those of you that want to talk with our team, you have a policy that you want us to take a look at, you have questions about something that we talked about, please reach out to us. We're in the business of helping you set up life insurance policies, understand That it's just it's a policy is not going to change your life, but it could be a really important step on your journey. And until next time, on behalf of Dom, Austin and myself, we wish you an amazing. Rest your day,

Speaker 2 | 81:10.370

and we'll see you next week. In the next phase, there's a chapter called Use It or Lose It. Maybe we should get JG on here, the freak in the sheets, that Caleb coined last week to talk about this chapter.

Speaker 0 | 81:22.463

We might have to bring in one of our own, who's an analytical genius, to talk to us about the numbers.

Speaker 1 | 81:30.566

Yes,

Speaker 2 | 81:30.832

he is.

Speaker 0 | 81:31.191

Amazing.

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