Building TAX FREE Income With Life Insurance

 I think where a lot of people come at you is not the message that taxes are going to go up and we should be in a 0% tax bracket, but how you get there. You're a fan of Roth conversions. You're also a fan of life insurance. And I think that is like a trigger word, especially for our friend, the white coat investor and others. It's like the fact that you use life insurance means you're a horrible human being and that you're a scam artist. So let's talk about that because again, you didn't come out of the womb saying, oh, life insurance is this amazing tool and we should convert into Roths. Why do you have this certain belief and how do you teach where life insurance should be used and how someone should look at that asset? Yeah, I don't look at life insurance as a silver bullet. I look at it as a compliment to all of the other tax-free streams of income that are out there. I look at a strategy that contemplates multiple streams of tax-free income, none of which show up on the IRS's radar, but all of which contribute to you being in the 0% tax bracket. I want to take advantage of every nook and cranny in the IRS tax code. I think that if you're a tax-free income, you're going to have to take advantage of all of the other tax-free tax codes that are out there. I think that if you're a tax-free income, you're going to have to take all you ever talk about is life insurance. You sort of look like a life insurance agent and nobody hands their life savings over to a life insurance agent. So I think it's important to give everything their fair shake. I think every stream of tax-free income has something unique about it and some sort of value proposition. I love Roth conversions, for example, because if you had a billion dollars in your IRA, you could shift every last dollar to your Roth IRA, no problem. So it could be a real workhorse in getting you to the 0% tax bracket. But the life insurance really does have some unique propositions. Number one, it's a tax-free income. As you know, it's tax-free. The money accumulates tax-free. You can take the money out tax-free by combination of withdrawing the basis and then loans. The money grows safely and productively, whether it's whole life or index universal life, whatever flavor you prefer. We're not trying to hit the ball out of the park here. We're looking for 4% to 6% net of fees over the life of the program, which means that it works as a great bond portfolio. There was a guy, I just did a YouTube video on this. A guy appeared on Twitter and he says, look, life insurance is not an investment. And then Tom Hegna responds and says, it's not an investment. Think of it as a bond alternative, then it works. And then Tom proceeded to say, look, I'm not an advisor. I don't make money off this stuff, but I pay $225,000 per year into my life insurance. And it is the best. Is it my stock portfolio? No, it's my bond portfolio. We're not looking to make it the whole shooting match. It's just the bond portion of your portfolio. And you can get, as Tom says, reach into your portfolio, take out your bonds, replace it with permanent life insurance. You'll increase your return, you'll lower your risk, you'll lower your standard deviation on your entire portfolio, and you'll have a better outcome over time. And so that's really one of the main ways. It's a way to grow your money safely and productively. But the other way, and this is what I really love about it, is it's a long-term care. A lot of our clients are between 50 and 67. And if you're between 50 and 67, I can guarantee that if you're married, you have four of something. And I always like to ask those people, what is it that people have four of? And eventually we get around to the fact that they have four parents. And what is the likelihood that someone who's, say, 60 years old has one of those four parents that's going through a long-term care event, even as they speak? So a lot of people are saying, gosh, how do I... Solve this long-term care dilemma. It can wipe out my entire life savings. How do I do it without the heartburn associated with the traditional ways of mitigating long-term care risk, which is buying a long-term care policy? And one of the great things about permanent life insurance, particularly with the companies that allow you to receive your death benefit in advance of your death for the purpose of paying for long-term care, is if you die peaceful in your sleep 30 years from now, never having needed long-term care, guess what? Someone's still going to be in the death benefit, probably your kids or your grandkids. So there isn't that sensation of having paid for something you hope you never have to use. So is it a silver bullet? No. Is it a panacea? No, but it can be a very, very effective complement to all of the other streams of tax-free income that you're doing, particularly if it's structured and funded properly. Yeah. When I first got into the industry, I was a big Dave Ramsey fan by term and invest a difference. I want to talk to you about that in a second. One of the epiphanies that I had, and it was quite frankly, a turnoff when I was getting into this space was people were like, oh, life insurance is a sexy investment. It's better than your investments. And I'm like, well, if you're talking to an amazing entrepreneur, that's a pretty big turnoff, quite frankly. And then when I started hearing the message of the and, or the multi-use of a life insurance policy when set up and used properly, and you articulated it so well, it can do multiple jobs. And it's beautiful. And you think about it, like our cell phones, everyone that I know has a smartphone, but I don't think it's just a phone anymore. You can text, it's a flashlight. It woke me up this morning. It's a GPS. I can do emails. I can tweet and do all kinds of things. It gives me so much utility on that one device. Yeah. It's, it's over a thousand dollars, but it's so inexpensive when you think about all the jobs that it does. And maybe that's why everyone in America has a smartphone essentially. And so it's just one of those things where if we take a step back and talk about life insurance from a, the utility and not the investment and not compare it to an investment, using rate of return. Speaker 2 And look at the result, which I think is cashflow, which is maybe tax advantage cashflow. People would start looking at it differently instead of just saying like, this is a better than an investment. Anything that you want to say before we go on to buy term and invest a difference? Speaker 3 Yeah. I think it's just a question of how we position it. I tell people this all the time. The more you talk about Roth IRAs, the more your clients will be attracted to the idea of permanent life insurance. And the reason that is, is because permanent life insurance, if we hold it out as the, you know, like I said, the silver bullet, the panacea, I think people that have been reading Kipling, Kiplingers are higher their entire life, Barron's market watch. They're going to be skeptical because they've always been told that life insurance is a scam. Dave right there on, on, on Dave Ramsey's website, he says, it's a rip off, right? The only reason people do it is because they haven't researched it enough. So it's, it's for people that are easily duped and they're gullible. Well, guess what? Um, I, I think that if we, you know, we're, we're up against significant headwinds. And so if we approach the marketing of this particular tool, as it is the end all be all, and it should replace your stock market portfolio and it should replace everything else that you're doing, that people are going to be inherently skeptical. So we have to recognize what its limitations are, but we also have to, you know, be good at positioning, you know, what its strong points are. And, and I think that if we strike the right balance there, that people are going to recognize that it does have strong points, do things that some of these other streams of tax free income. Can't do it doesn't replace them, but it compliments them. And so I think as long as we're approaching this with a comprehensive balance approach, that people that are even people that are really, you know, financially savvy are going to recognize the good that it can bring to their financial situation. Hey, I want to thank you so much for watching this video to the end. This video is on life insurance. And if you have more questions about life insurance, infinite banking, why you should overfund it. We have a link below that goes to our and asset vault. This is a free vault that gives you everything you need to know about life insurance. We have case studies, we have a calculator on there. We have a handbook. We have frequently asked questions. We go through a process. I have my masterclass on there. We literally want to be the one-stop shop for every life insurance decision. And so if you want to learn more, click the link below and we look forward to educating and maybe opening your mind and eyes, the power of life insurance.