Why I'm Skeptical About Becoming Your Own Bank MR. BRRRR

 Sell me on this concept of being your own bank because I still don't get the message It's maybe as much as I like I see it as an asset place a store protect grow my money This whole like being my own bank Is never fully resonated with me as much as it's resonated with you Chris Brent and others who they're all gonna be on the show And so I just like that's just my pushback and challenge, but I'm seeking to understand of like what is the concept and what is like the aha Because I find that a lot of people Use it as like a technique to sell but like when you actually drill into the numbers And they're not as good as we might think they are and I'm like big proponent like I over fund life insurance That's what that's our main money maker. So I'm a we're on the same team. I just don't necessarily use the same language Yeah, so for me it was um When I when I realized every dollar that we spend yeah It's got one use right so if I Buy this phone. Yes, 1500 bucks or whatever it was you're taking money from your account that 1500 I'll never get back. Yeah, I got the phone. Yeah, right the phone can make me money. Yep Or it can cost me money because it be a distraction totally but The opportunity cost of that 1500 is gone forever never make another dollar Yeah, and I started realizing that okay if I fund this policy Every single dollar that goes in I'm never losing the opportunity cost guaranteed it'll continue to go up guaranteed tax free Then I can borrow against it right and use the money to buy the phone or use the money to do an investment Use the money to go on a trip use the money to do whatever and Then as long as I treat my money like I would treat the banks pay myself back with interest right I'm making a spread Just like banks do okay, right because if the insurance company charges let's say 5% And I charge myself seven. Yeah, I'm making 2% But you can so that's it will impact that in a second So let's let's put a pin on that about the spread because you're intentionally paying yourself more right Which I think sometimes confuses people but but you're literally you're getting a spread because you're literally paying yourself more Because you don't want to steal the pieces or else a Nash talked about in his book So you are not going to devalue you your number one asset, right? So you're gonna intentionally pay yourself more but that that gets people confused a little bit because it's like But it's not paying yourself more. It's paying yourself what you would have paid the bank Okay, so like let's say if I can get a bank loan for 3% yeah and I take a policy loan at 5 that doesn't make sense right you'll just pay yourself back at 5% right or I'll just Take the banks away. It's a thought crime at 3% yeah, right? That's not happening right now, but if I could get money at 3% yeah, I'm gonna get that all day long Totally instead of getting it 5 from the policy. Yep. You see I'm sorry and I agree with that. Yeah, so it's just um I started realizing like okay if I put money in a policy it will 100% grow and then I started thinking more long term like I think this is a problem that most people have is they can't see more than 5 feet in front of them I agreed it's a huge problem people have not because they have lack of vision Yeah, so it's like They don't think of a year from now five years now little on 10 20 30 years from now. Yeah, but I've been lucky enough to not have to Like mourn any deaths in my family. Yeah, like of anyone that I'm really close to I've had grandparents die, but I wasn't really close to them. Yeah, they all died in their 90s So I'm like thinking okay. I live a healthier lifestyle than anyone in my family. Yeah, I'm probably gonna live a long time. Yeah God willing When I started looking at illustrations of when I'm 80 90 The compound interest is silly you put in a dollar you get like 30 back While I could use that money while I'm alive at the same time, which is that's that's the key Yeah, that's the key because people will comment and say guys the stock market will get way better and there may be not wrong The life insurance is not an investment right and the whole concept of when you pull out your phone It's like the epiphany I can do this and this right over 30 40 years that that's Depending on you as your track record as an investor, right? It gets pretty exciting Yeah, and then I We can definitely go into the whole all but the stock market does this and our you wells, but that's looking at an investment Right Insurance is simply a storehouse for capital. That's what I look at it as I want to store as much there as I can a couple reasons In a policy it's protected against lawsuits and judgments in most states if I've got millions of dollars in the stock market It's not protected right could this do better? probably But there's actual returns and what's one dimension returns right everyone just mentions average returns Yeah, what's the actual so is it actually better? Yeah, it's not protected When you pass away everyone does it's guaranteed to happen if you've got all this money in the stock market your family's gonna get that Minus the taxes they're gonna get taxed on it You put all this money into whole life insurance with a mutually owned company that pays dividends When you die again, guarantee to happen. They're gonna get a multiple of that. Yeah tax-free. Yeah So as of right now, I'm about 40 30 40 million dollars of death benefit. Oh right on your life for your family's life My family's I think me alone. It's like 29. Wow You're like make your wife happy dude. She might 100 percent But like let's just say just on my life. Let's say 30 million If I was to pass away tomorrow god forbid Because there's no taxes that's almost like I had 40 45 million in assets at my death My family sells it off what's left after the taxes they get 30 million bucks That's crazy like what else can you do Where you put money in you can use it right away for whatever you want without interrupting the compounding Yeah, it's protected against lawsuits and judgments. So no one can steal it from you And when you pass away, it's guaranteed to give you a multiple of what was in there. Yeah tax-free There's nothing that does that you articulated that better than almost anyone I've ever talked to And that's that's where I need I think that's where the conversation needs to go. Yeah Think about life insurance as a wrapper a protection first I think we get in trouble if we like life insurance is a protection vehicle We can structure in such a way that is a great storage vehicle because life There's people that probably use your videos people that use my videos in book push their crappy agenda I'm sorry for everyone that gets ripped off by that. I'm sorry At the end of the day a lot of times it's Bad actors that will take concepts like life insurance, but then not structure properly right everything that you said is amazing And I actually think that needs to be the message to say hey listen One dimensional maybe the soccer market will per real estate investing in business like I'm not trying to say that life insurance is better than those things Right, I'm just saying one dimensional multi-dimensional and with the and component you can do both right love the soccer market so much do both right do both But if you actually like start realizing like what's going on you might find that there are other assets Including yourself that you maybe show an invest in because it would be a shame for you to have a high stock portfolio But be broken inside right we could go down that road a different time But it's multi-dimensional versus one dimensional and the multi-dimensional goes back to credit protection Goes back to death benefit goes back to the sum of the tax advantages Goes back to this chronic illness and critical illness writers Which essentially I'm not saying it's a long-term care alternative But I'm saying you get extra options in the future god forbid things happen to you even if you don't die God forbid things happen to you have options So you have one road with fewer options you have another road with more options That's I think needs to be the message. I think my Pushback to this whole being your bank is like when then we get into arbitrage and we're like we use dividends Like you're getting this and and at the end of the day when I when I zoom into the numbers Could there be arbitrage on what you're earning versus what you're borrowing Maybe in 20 30 things it starts a line that could happen But I find that it's like we're missing the point because we're almost like going We're comparing to the one-dimensional when we don't have to right over here They what do they got whereas if you understand creditor protection if you understand the 30 million dollars and growing death benefit Like you value that that's nothing. It's growing. It's 30 million like that That's the thing is like if you don't value other things don't do life insurance right if you don't value More options if you don't value the tax benefits if you don't value having a death benefit if you don't value these things Life insurance is probably gonna be Average or maybe under form perform a high-ealt savings account. That's a thought crime But it's like when you start valuing other benefits then maybe just rate I can't think of it a better asset right so this is where this is where it's like This is maybe the thing that I wanted to just discuss on because it's like Again, I think the people that talk about being your own bank and all that they almost make it sound like There's just like this magical thing and the magical thing is you give your dollars more wrappers more jobs and over time That's really good, but when you when you look at the intermigator return and the cost of borrowing Over time, it's kind of a wash But we're discounting all the other benefits. I'll let you talk, but that's really good This is therapy for both of us. I agree 100% if you if you really dive into my content. Yeah I talk about becoming the bank because like I truly believe like the bigger The bigger this asset gets the more you put into it the more you can truly be your own bank, right? Like if you've got a thousand bucks in there. How can you really be your own bank? Right I've put over two million dollars in Yep, so I've got a good amount of money that I can use to be the bank by cars Do investments whatever So I talk about that, but if you look at my videos and really dissect them I'm not talking about arbitrage. Yeah, I'm talking about Credit or protection. I'm talking about death benefit one of my videos says I'm like I bet you have insurance on your house and it shows a house I bet you have insurance on your cars. It shows your cars. I bet you have insurance on your phone Yeah, crazy, but then you don't have insurance on your life. Yeah another one I did is um Which is can I just double tap that If you think about it unemotionally Yeah, your car is valuable your house is valuable, but if you look at our lives and our ability to create income It's like if we just a machine if if you just take my input output and just say I have a money printing machine That would be the first thing out of insurance I'm like if if that machine stops working everything that I'm doing falls apart right And yet A lot of times we don't get it or we're selfish and we're like well if something happens to me It's a other people's problem and we're not unemotional about saying listen if I have an asset that's worth 50 million I probably should ensure it for 50 million. I think part of it is the fact that um Nobody really wants to think about dying right yeah Like no one really no one really wants to think and no one can comprehend it like yeah You know, I can't really comprehend like what happens no one really knows yeah like you're a believer of Christ. I am as well. Yeah I have beliefs. I have faith But nobody really knows so it's like most people just can't comprehend like why am I gonna? I'm not a fun thing to think about right. Yeah, but I think the older you get especially for me I start realizing that this thing called life has a expiration date My runway is going to stop at some point right. I just don't know when right so How can I give the most impact while I'm here? How can I have my money have more uses while I'm here? It's to first put it into this asset because again it gives you all those other things Like I have a video where I'm saying You probably have insurance in your car, but there's no guarantee you're ever gonna wreck the car right you probably have insurance in your house There's no guarantee you'll ever have to use it right you probably have Insurance on your phone. There's no guarantee. You're gonna drop that phone. Yeah You're guaranteed to die Yet you don't have insurance on that it makes no sense right right and we can get into like Really really ninja moves what I know you do and I do where You can take this and put it on another level where Death benefits are paid out tax-free, right? Income tax-free income tax not a state tax, but income tax Which I think states anything over 21 or 22 it will probably change Depending in the future, but yeah, but family single yes income 100% tax-free So I think about it like if right now my family got 40 million bucks or 30 million to find out Do they know what to do with it? Do they know how to protect it? Do they know how to multiply it? Do they know how to grow it probably not right especially if me and my wife die and my daughters get that much yeah They're probably broke Before their life is over and if not their kids my grandkids would be broke So what did I do? I set up a trust So now the trust dictates as a succession plan when I die when that happens what happens money goes into the trust because that's the beneficiary What's the trust going to do with the money the trust dictates it has to go into more policies built like this where you can use it the family can use the money But the trust gets wealthier and wealthier because everyone's gonna die at some point yeah And the trust dictates money can't just be spent on anything has to go into a policy first yeah Then policy loans can be taken and it's just a road map of how I would use money Even when I'm gone the trust will use it the same way. It's interesting. It's love love that Rockefeller's Very much inspired a lot of that mentality It's interesting because in planning you always want to look at like what are the points that we know are gonna happen And death is one of those points So if you know that's gonna happen in the future It's like how do we optimize an event that is going we don't know if we're gonna hit by our tornado or hurricane Just like what you said, but we know this is gonna happen And I think that's where having someone else that's unemotional about your situation being like Okay, I'm unemotionally looking at your situation. How do we optimize how do we make it better versus being like hey I'm gonna it is taught hard even to think about like hey, I'm setting things up. I'm planning trees that I will never be able to eat from That's a that's a different I mean that's an admirable way of thinking But I do believe it makes you richer and wealthier while you're alive Because you show up differently knowing like ham worth 30 million bucks like a little like my time like I'm worth that I think there's I think there's something really special about that. I think it's like honor versus it's the same concept of like Flying first class and all those things. I know you probably get that more than I I'm maybe I less in material But like you feel different driving a sports car versus a regular car. Mm-hmm same thing. It's like you know You know when you're worth that much like you show up differently Let's let's let's move on to I'm curious about your portfolio You're in a lot of interviews, but I don't think people ask you these deep questions because of a lack of nat lack of you know how life insurance works So so do you know how much cash value you have on your it just your life insurance policies or like the ones that you're responsible for you of ownership As of right now. Yeah as of right now Um, not much. I don't keep a lot in there because I wanted to ploy it Okay, so let me ask a different question. How what is your annual premiums going in? Almost 700. Okay. What is the base on that? That's like the required premium Uh, I'm not sure it depends like I've got some that are 50 50 design. Okay One even 60 40 so 60 to base 40 to PUA that's on my new daughter. Okay Um, so are we looking like 350 to 400,000 of annual premium going to base Probably a little less. Okay, so I'd say average is probably like 30% base. Okay, and 70% PUA. Okay, so 300,000 of of base that's the required premium Um, you're funding and the way that you think about money is like hey, you don't want a ton of cash value So you don't have a lot of cash value sitting you're borrowing against it to do other things. Okay Um, is that fair and you're what you're investing in business you're investing in real estate What are the type of investments that you're doing and get not investment advice don't sue either of us And just I'm asking you as a friend so funny because you just put that disclosure. I was gonna say it We have a family is just please don't sue us. Yeah, this is not investment advice. It's just what I do. Yeah Um So yeah, all the money goes to whole life first um, I've got 14 policies So as you make more money you can't put too much into one so I just gotta keep getting more and What I do a lot of is private lending so I'll lend it to Different investors people I know have a really good track record and I love their business model So I always want them to have skin in the game I want to be in first lean position and I want a personal guarantee So all lend on those things and then I'll do that's where most of my money goes because that's a safe I've got collateral I make 15% A lot of times 15% it's safe Aren't in the same Right, but this is again backed by Um, first lean position personal guarantee The operators put their money up to buy it's basically a development company They'll put their money up to buy the land And then they'll raise the capital to excavate and build single-family home communities from the ground up And then they'll they'll keep some for rentals. They'll sell some off So 15% is like their top it's a ladder. So if you come in at a hundred grand they're paying 12 As you go up you go over a million they're paying 15 So that's why I do most of because it's the safest and it's 15% And then I'll do some more riskier things like I'm about to invest in a cannabis company Which could potentially give me like an eight times return on my money in two years um I'll Invest in my own real estate. So I've got some apartment buildings where I'm the bank on it. So I'm I'm pulling the funds from the policy I'm giving it to do all the construction and all that stuff And then the back end I've got a property. Okay, so when you get them money Are you just putting it back into the deals or you putting it back you're paying back your life insurance fall? So how does that work because Because when I the next question I'm going to ask you is how much money do you have as a reserve urgency account like everything hits the fan You're you're making cash flow today and I just want to be upfront like Do your due diligence and when you think you do your due diligence do it more right and You know, I would really be skeptical 15% debt like I would really want to know like operators and all but I do know people Close to me who have like really really billionaires that they make you know 9 10% on on death like so it's possible out there. I just it's like 2008 you and I didn't full like you maybe lived more of it than I did I just feel like a lot of like this secure Safe things hit the fan right that I'm all a skeptic when it comes that that's why I think diversification is good But like let's talk about what you're getting those cash flows coming back. What are you actually doing with that money? Is it going great question? So what I'm doing is All either I've got a heat lock okay home like we line a credit on my house to about 500 grand I have access to So if that's leverage I'm paying that back first because it's a higher interest higher higher sure, yeah, so it's like 9% right now Policy loans are like five. Okay, so it makes more sense as I have cash flow coming in Pay it towards the equity line That's me storing money in that equity line that I can use again, but I'm paying down a 9% Instead of paying down a 5% to store the money there. Yeah, right? And when I said I don't have much in cash value. I still have a couple hundred grand. Okay. I just don't want I don't want a bunch sitting got it right yeah, so if I took 200 grand let's call it. Yeah, lent it at 15% It's 30 grand a year Right, it's not a ton but It's sitting in a policy doing nothing right for the most part. It's it's a safety net case anything happens I've got 200 grand in access. Yeah on equity line. I think we've got 300 available. Yeah, so 500 there I'm across bank accounts. I probably keep 10 grand per account. Okay, so we've got maybe a hundred something there So all together just shy of a million probably just liquidity. Okay, because it matters in matters. It matters one thing that I always um I always touch on liquidity definitely matters because it lets you sleep at night if you have if you're totally leveraged You've got no money in the bank no money in policies no money in anything. Yeah It's hard to sleep in night and what I do and this might be extreme I try to do a ton of due diligence on investing and then when I invest I mentally I'm like I'm never going to see that money again And so I design my financial life that if everything hits the fan on an investment side I can ride the ship And that's just one of the so I keep quite a bit of liquidity Morian Howell the person that wrote psychology of money, you know, he talks like you should almost have Too much like you should almost have more liquidity than you're like wow like I'm dumb like I I'm losing opportunities here But I'm telling you if you just listen to that and especially if you're an entrepreneur investor The psychology of money Morgan Howell highly recommend that book for all of our listeners But he just talks about like even more and buff it billions at all. They're sitting on cash And he and he does it like he's 20 years from now will look back and be like that's why he did that and people are thinking like you're an idiot You could have this money deployed in the market all this stuff But there's like the goal rule or Nelson Nash those who have the gold make the rules. Yep. My next question is You're continuing to fund more life insurance Do you ever worry and I know that we all need to be about abundance abundance abundance abundance But you worry that if you hit things in your income That you you have such a big nut that you have to fund and like does that ever like again I know it's like maybe we're different people like I I'm I'm abundant in one hand But I'm also like from a cashful perspective I would be like You know I would be hedging you know, so I this is just me being like vulnerable and asking you questions about like when I look at your situation I go like man this works until you stop making as much money right and then it gets a little sketchy Right you stop making income. That's where it's like the way that we advise entrepreneurs might be different than the like if you weren't a W2 employee not having an increase what you're saying is not possible It partly works because you and knowing you you're going to continue to make more money or that's what your plan is If you have a bad years or if you get crushed potentially You're overleveraged on life insurance taking a safe asset and making it risky. What's your thoughts on that? Great question. I don't really think of it because I I know without a doubt The value that I have again. It's all about building myself right becoming more valuable I know without a doubt if I lost it all tomorrow. I can get it all back right. I know that without a fact without a doubt and That's part of the battle is just knowing and knowing you're worth something. Yeah, you're worthy of it Right again going back to my wife like I never was worthy of having a woman like that And then I became worthy of her and now like I know I'm worthy of her. Yeah I know that I make her better. She makes me better. Yeah, so it's the same thing with money is like I know I'm worthy of the money I'm making And I'm worthy of more. Yeah, so that's why I keep making more And you do you also like the pressure? You also like a K. I need to make enough to fund two million dollars of life insurance You I do like the pressure. Yeah. Yeah, and it's uh It's one of those things where My wife also does really well. Yeah, you know W2 she's made 700 grand in a year. Yeah, so it's like There's not a ton of pressure on me because she does well. Yeah But today right now it's good times Right The beautiful thing is the right type of people the right type of killers will make more in bad times Right she made the most during COVID 2020 720 grand as a W2 employee when everything was in the fan she crushed it. Yeah So Yeah, I don't really worry about that. I just I I think the mind's a powerful thing and the second you start worrying about things. You're just attracting it to you. Yeah, you know, so I play the mind game a lot. I talk to myself a lot And if you really think about the only person that you're around 24-7 is yourself. That's right and self-talk Can be very negative. Yeah, and it can be positive. Yeah, I'm not saying I'm some saint I'm always in a positive mindset, but I pretty much am most of the time because of the self-talk And I can attest being your friend being someone who's around you. You're always in a good mood high energy That's part of the reason why we're probably friends is I I would like to say I'm similar to that like right You know, it's like you have a choice. It's like why complain right life is good I do if you complain most of people don't care. Yeah, yeah, or they're just happy that it's not happening to them Here's my big here's my big takeaway when it comes to life insurance when it comes to finances people really really got to understand their situations people can take inspiration on my videos my book your videos what you you have going on They really got to take ownership and like there's no Silver bullets. There's no magical vitamins that will be able to solve all your problems So life insurance is a tool life insurance is a powerful tool I think we need to make this a clip or like make this like people need to understand how we're talking about Rapper multi-use single use love that But at the end of the day you have to you have to understand your financial situation take ownership of it And I know that there's a lot of people that are getting insurance on their family because of you because of your videos And I'm excited to see what happens in the future