This Infinite Banking Debate Went Off the Rails!

Speaker 0 | 00:00.148

Welcome back to Better Wealth Reacts. Today I'm going to be reacting to Is Infinite Banking a Scam? It's a video that our team put in front of me. It's by Pocket Watchers and I actually watched a couple of his videos. He does a lot of call-in shows. People interact with him. He's very strong in his opinions and he's passionate and it looks like he's a CFP and a financial planner and he has some very passionate views on infinite banking. I watched this video once. I'm going to watch it again with you. We'll stop when I want to make some points. And then at the very end, I'll give you my two cents around do I agree with what JT is saying and what would I do a little bit different. So without further ado, let's jump in.

Speaker 1 | 00:46.325

Infinite banking is a scam. Change my mind.

Speaker 2 | 00:49.434

All right. Well, I'd like to first say I'm a 24 years retired military. All right. And I had term insurance under SGLI the entire time that I was in the military. What got me to looking at insurance was because SGLI had to go into VGLI, which is for veterans insurance. So I had to go and look for insurance for myself and my family. Okay. So what I ended up doing was researching custom whole life and traditional insurance, what have you. So what I ended up doing was eventually I worked for New York Life for about a year.

Speaker 1 | 01:16.797

Okay. So did you become an insurance agent?

Speaker 2 | 01:18.656

A producer. I became a producer for a little bit.

Speaker 0 | 01:22.578

So New York Life is one of the top major four mutual companies. And so just. for contacts.

Speaker 1 | 01:27.769

I know what it means, but I want the pocket watch. What does a producer mean?

Speaker 2 | 01:31.314

It's an agent.

Speaker 1 | 01:32.114

Okay. So that means the way that you made money was selling people insurance policies.

Speaker 2 | 01:36.680

No.

Speaker 1 | 01:37.399

How did you make money?

Speaker 2 | 01:38.336

So the reason that I got into it was,

Speaker 1 | 01:40.118

I'm asking you that I'm asking you very specifically, how did you make money?

Speaker 2 | 01:43.829

Uh, I'm retired.

Speaker 1 | 01:44.672

No, no, no, no, let me, let me, let me be clear. Maybe I'm speaking another language. When you worked for the insurance company, how did you make your money?

Speaker 2 | 01:52.860

I did not. I'm trying to explain it to you.

Speaker 1 | 01:54.377

You didn't make money. Did you work for the insurance company?

Speaker 2 | 01:56.528

Yes, so this is what happened.

Speaker 1 | 01:57.791

So you worked for the insurance company, but you made no money when you were working for the insurance company.

Speaker 2 | 02:01.392

I made no money. So let me explain how that works. Because insurance producers are paid on compensation. They're not paid like a normal salary or anything along those lines. So when you go in there and say, okay, well, you can sell insurance policies, you can sell annuities. So a commission? So a commission? A commission? Yes, sir.

Speaker 1 | 02:17.282

That's getting paid. A commission on what?

Speaker 2 | 02:18.939

A commission on what, sir? Like I said, if you sell insurance, if you sell annuities, you sell any of the financial products under New York Life or any financial institution, you're paid. Based on compensation.

Speaker 1 | 02:26.853

Compensation of what?

Speaker 2 | 02:28.075

Commission. So you got paid when you sold. I did not get paid, sir. No, sir. Okay, so the reason I didn't get paid is because I was only temporary involved in it. So you don't get paid unless you sell something. So you never made money? I never made any money.

Speaker 1 | 02:41.165

How long did you work there not making any money?

Speaker 2 | 02:44.016

Six months.

Speaker 1 | 02:44.751

So you worked there for six months not making any money. This is a great story so far. Please continue.

Speaker 2 | 02:48.673

So the way that I make my money, like I said, I'm retired.

Speaker 1 | 02:50.970

No, no, no. I understand that part. We're talking about the time when you were working at the insurance company.

Speaker 2 | 02:54.861

Got it, got it. Yeah. So I made zero money. So we're clear, correct? You,

Speaker 1 | 02:58.072

apparently.

Speaker 2 | 02:59.592

I mean, it's your story. Got it.

Speaker 0 | 03:00.135

So what else do you care? So first of all, this, this makes my head hurt so far. Um, I think this could be so simple. Uh, but JT, and I've seen him do this in another video, he'll ask right away, like, hey, do you, do you make money, like, do you make money selling insurance? And, and if someone says yes, I'm not saying he uses it to discredit, but he rightfully just points out that's like, hey. you make money selling insurance so somehow your credibility should be less which i totally get that that mantra because it's you know it's anytime someone makes money by you know saying something you you know that there's bias there so i get where he's coming from this this other person i think was maybe a little bit confused or maybe was trying to point out the fact that you know he didn't make a ton of money and clearly he didn't sell anything and that doesn't necessarily surprise me because over 80 percent of the people They get into the insurance space, make nothing, and they get out. And so not shocking, but a painful first couple minutes.

Speaker 1 | 03:57.923

That's it. You went for an insurance company and you made no money.

Speaker 2 | 04:01.251

Made no money.

Speaker 1 | 04:02.008

Okay, but let's do a hypothetical. Okay. If you were to have made money, how would you have made your money?

Speaker 2 | 04:07.696

By selling any of the products, insurance, communities, X, Y, and Z.

Speaker 1 | 04:11.431

So I would have been correct when I said you made money or you would have made money based on the position. You would have made money. Based on your position. You would have profited by selling people insurance. Correct. It's just that you didn't sell anybody any insurance.

Speaker 2 | 04:22.120

I didn't sell anybody insurance. Correct.

Speaker 1 | 04:23.903

Oh. Honestly, bro, I mean, all that stuff you just said, yeah, I was an insurance agent. I didn't make any money because I didn't sell any insurance. But my job position was that of an agent that makes money off of selling insurance. I mean, we really went a long way around the block. Okay.

Speaker 2 | 04:37.351

I apologize. I apologize.

Speaker 1 | 04:38.570

At this point, I just want to let you know how you look. It seems as if you're dodging the direct question. So now the rest of what you're going to say, people are going to be squinting a little hard with what you say. Sorry. First impression is everything. Go right here.

Speaker 0 | 04:50.709

Change my mind. I watched another video recently of Dave Ramsey talking with a individual who sells life insurance. And the way that that individual brought up to Dave Ramsey was in a very humble way. He in a very humble way. And you could see Dave Ramsey out of all people who, you know, jumps down, jumps on people, you know, took it with a lot of grace. And it was like a great call. And I think there's a lesson to be learned where it comes to being up front, but to also play devil's advocate. JT is and you'll see this throughout the video is like very much like very reactionary like trying to like really punch back and I think that can also make it difficult when you're trying to Have a connection or talk to someone and someone's constantly trying to like debate you It makes for a choppy call which I think you'll see that this call is choppy And you'll again get my final thoughts on what I would have said or how I would have directed the call and my hope is that i get to talk to jt sometime and maybe we can have like a real sit-down conversation where it's not a i'm right he's wrong he's right i'm wrong it's a conversation to see if there's any points that we can agree on and and then work backwards from there all right all right so basically what you're saying about infinite banking is incorrect because when

Speaker 2 | 06:02.012

you put money into an overly funded specially designed what do you mean by overly funded break that down so every month you have either a monthly uh quarterly or annual premium

Speaker 1 | 06:11.432

So a premium for a premium for insurance.

Speaker 2 | 06:14.413

OK, insurance. All right. Let's say my age is 46 years old. So my premium is thirty five hundred per year. OK, right.

Speaker 1 | 06:20.014

So what are you what are you getting for that premium, sir, versus a term policy?

Speaker 2 | 06:24.114

It's a custom whole life. What are you getting for that? You're getting a death benefit and you're also getting access to cash value, which is being which under contract is guaranteed to pay a compound dividend of four percent. OK,

Speaker 1 | 06:37.013

let's break that down just for a second there, sir. So you're building up a cash value.

Speaker 2 | 06:40.820

based on what where's this cash value coming from that's coming from my my money from your premium already it's my money already so the insurance guys are granting you the ability to access your money your money grant me access no not to do it it's other people's money so let me let me clear my people's money okay my cash value is my cash value okay so any dollar i put in there is going to go to cost of insurance and then the rest is going to go to the cash value so the money that the insurance is so graciously lending me

Speaker 1 | 07:07.889

by the gift of baby Jesus, they're giving you the ability to have access to your money.

Speaker 2 | 07:14.717

Not my money, sir. No, no, no. Whose money? Whose money is it?

Speaker 1 | 07:17.276

How was the cash value created? Was the cash value, no, no, time out. Was the cash value created by other people paying their premiums?

Speaker 2 | 07:24.081

No, cash value is my cash value.

Speaker 1 | 07:25.707

Oh, cash value is made up of you paying your premium. Is that correct?

Speaker 2 | 07:28.893

My cash value is made up of my premium only, period. Gotcha.

Speaker 1 | 07:31.456

Okay. So tell me again if you're borrowing money.

Speaker 0 | 07:33.035

And this is where, you know, we got to be careful with language because The guy on the other phone is technically correct. I would say technically correct in air quotes because it's the insurance company's money. Well, you know, because you're lending against your cash value. But what JT is saying is like, hey, listen, like you're saying that this is the best kept secret. But like it's there's nothing special. It's like you have a percentage of what you've started to pay and which which both is correct. So I'm just letting you know, like this this caller technically correct. JT technically correct. And so they're kind of going around in circles, which is the theme of this call, by the way.

Speaker 2 | 08:10.231

So based on the amount of cash value that I have,

Speaker 1 | 08:12.473

let's say that you gave the insurance company that I gave the insurance company,

Speaker 2 | 08:15.953

you're buying paid up additional insurance. That's why I said,

Speaker 1 | 08:17.656

what are you buying it with?

Speaker 2 | 08:20.063

More of my money,

Speaker 1 | 08:20.836

more of your money,

Speaker 2 | 08:21.781

more of my money. So I'm going to go. So I pay my premium and then I overfund that policy by buying paid up additional money of my own money. So now I have a value, a cash value of ten thousand.

Speaker 1 | 08:33.696

Okay, real quick, before we get to that point, how long did it take you to get to that $10,000 cash value, sir?

Speaker 2 | 08:38.241

Immediately. Immediately. You got cash? So I can put a dollar in? Right,

Speaker 1 | 08:42.023

right. How much did you pay them to get that $10,000 cash value, sir?

Speaker 2 | 08:46.389

I paid them the $3,500, which is my premium, and then I paid an additional $10,000 on top of that. What?

Speaker 0 | 08:53.475

That sounds like a deal. Right,

Speaker 1 | 08:54.711

so if I did it, I don't even need an insurance company to do this. I'll just do a deal with Orlando. Hey, Orlando, listen, bro. I'm going to give you $13,000. Would it be okay if I borrow $10,000 from you? 100%.

Speaker 2 | 09:05.811

100%. I figured it would. I figured it would. I figured it would. Okay. Keep it going. Now, I have $10,000 cash value. That's 90%. Now, remember,

Speaker 1 | 09:13.399

you had $13,000 in your bank.

Speaker 2 | 09:14.400

I had $13,000. You had $13,000. I had $13,500, actually. I had $13,500.

Speaker 1 | 09:18.220

Now, you got $10,000.

Speaker 2 | 09:19.407

Because the insurance company will let you borrow up to 90% of the cash value that you have inside your policy. All right.

Speaker 1 | 09:25.235

So, let's take a pause here. Just one second. Now, the $3,000, that went towards insurance. Okay, a $3,500, you know, let's just say that. The $3,500, that went towards insurance. Great, great, great, great, great. Then the extra $10,000 that used to be in your bank account is now with the insurance company. Okay, and now when I want to borrow my money, they'll let me borrow $9,000 because that's 90% of the cash value. Well, if I just kept my 10,000, I have access to the whole 10,000, sir.

Speaker 2 | 09:53.130

Okay, sir. Let's go to your argument. Am I correct?

Speaker 1 | 09:54.733

Let's go to your argument. Am I correct?

Speaker 2 | 09:56.132

Yes, sir. You're absolutely correct. Let's go to your argument.

Speaker 1 | 09:58.053

I just gave up the right to 10% of my money. No, sir. No, you didn't.

Speaker 2 | 10:00.374

That's why I'm asking you to stop.

Speaker 0 | 10:03.359

More than that, if you want to play technical, because you gave up, because the original amount was over 13,000. So you gave up a lot more than 10%, but you get the point. And this is, by the way, this is what happens when you get super technical right away and you're trying to like talk to people. in features and benefits. Listen, if you are in the industry and you're talking to people and you're trying to sell them whatever you want to sell them and you're talking about PUAs and loans, it's like this is what you sound like. And then vice versa, if someone's not willing to start with the actual problem and asking the question, what are we trying to accomplish? And you're just telling me about a strategy, you'll see that it doesn't go super well. And I've seen lots of these conversations because when you just interact with people, you understand. that many conversations can end up this way. And so this is not something that I'm like hearing for the first time, but it for sure is painful listening to this.

Speaker 2 | 10:54.962

Let's go to your analogy.

Speaker 1 | 10:56.482

Within the framework of what I just said, using the information that you gave, I just gave up access to 10% of my own money.

Speaker 2 | 11:03.599

No, you didn't.

Speaker 1 | 11:04.365

You said you can only borrow 90% of the cash value.

Speaker 2 | 11:07.911

Of the cash value.

Speaker 1 | 11:09.083

Right, and the cash value you said was $10,000.

Speaker 2 | 11:11.427

$10,000.

Speaker 1 | 11:12.271

So if I can only borrow 90%, which is 9,000, what happened to the other 1,000?

Speaker 2 | 11:17.418

Your $10,000 actually remains there.

Speaker 1 | 11:19.120

What happened? Do I have access to that other $1,000?

Speaker 2 | 11:22.044

If you close that policy, yes, sir, you do. Oh, but I'm going to have the policy.

Speaker 1 | 11:27.830

Think. Think. If I never had the policy,

Speaker 0 | 11:28.807

I've always had access to the $10,000.

Speaker 1 | 11:33.197

Exactly. More. Maybe the next one's your best one. I'm going to give you two minutes to break. Make the next one your best one.

Speaker 2 | 11:40.267

Go right ahead. So now the $10,000 that I have in cash value, I can turn around and borrow 90% of that. So I can take $9,000. then i turn around and spend that money on investments x y and z now the next now the next time that that money is out is outstanding i don't necessarily have to pay that money back initially i could wait a month or two months save another ten thousand dollars so now i pay your money of my own money and now you're giving them 20. i've got to sit two minutes sir okay i've got ten minutes two minutes so what the what the policy gives you is the opportunity to earn dividends on the money that you have in the account in the cash value So in the sense that I keep on putting money into that account, I'll keep on earning dividends on that money. Compounding dividends.

Speaker 1 | 12:19.922

Compounding dividends. OK,

Speaker 2 | 12:21.907

so I never lose the opportunity.

Speaker 1 | 12:22.848

Let's talk about let's talk about let's talk about these these compounding dividends. Are these dividends taxable?

Speaker 2 | 12:27.731

They are not. Not really. Over because you're overpaying.

Speaker 1 | 12:30.974

We're going to get there. We're going to walk this one down slow because you know, in Orlando, I know. That's not for the pocket watchers. Let's walk one down slow. So the dividends are not taxable. Why are the dividends not taxable, sir?

Speaker 2 | 12:46.472

Because DeoClife is a mutual insurance company.

Speaker 0 | 12:49.036

It's a return of premium.

Speaker 2 | 12:49.758

And you're part owner of that. So it's essentially them and you are owners. So that's just money returned. So that's basically what it is. Pocket watchers.

Speaker 1 | 12:56.726

He went fast. What it is, it's not really a dividend. The IRS has already classified. It's not a dividend. You didn't earn new money. They're just giving you a refund of the money you already gave them. Because if it's new money, it's taxable. New money. is almost always taxable unless you put money in a Roth IRA or something like that. The growth money is not taxable. But in the situation we're talking about right here, this dividend, this compounding dividend, the IRS looked at it and said, this ain't new money. You're just giving them a refund of the money they already paid you. That is why the IRS does not tax you on this dividend, sir.

Speaker 2 | 13:30.557

Am I wrong? Am I wrong? No, you're not wrong.

Speaker 0 | 13:35.744

Yeah. And here's the thing. You're not wrong, but there's a point. And if you watch any of our content, you know that we go deep. into the ins and outs and all of this. And the reality is you'll get to a point where a policy is earning your IRR, your internal rate return is far greater than what you've put in. And so, yeah, early on when it's not necessarily making any money, it's a return of premium. You can totally say that. And then over time, like your policy is actually growing at a greater rate and dividends are also tax free. And so, yeah, just because in the tax code, it's considered return premium that's actually a good thing And so I don't I mean you're getting super technical by saying like, oh, because the IRS says that this is a return of premium and tax-free, like that proves our point that this is a scam. I Yeah, we'll just finish. We'll finish this.

Speaker 2 | 14:26.077

Come on,

Speaker 1 | 14:31.642

man. I know what I'm talking about here, man. Why did you call it a dividend if you're getting new money when you know, because I just explained it and you agree that the IRS looked at the situation and said these people are not making money. They're only getting a refund on money they already gave the company. Why would you refer to it as a dividend?

Speaker 0 | 14:48.918

If that's the case, then there should be no actual earnings. in a life insurance policy and while some people don't actually earn anything and you know that i'm not for most people selling life insurance to to most situations there are life insurance policies that there actually is a interest rate above like you're actually earning interest and so that that whole fallacy

Speaker 2 | 15:10.325

like that that doesn't really hold water quite frankly people are making money that's contractually guaranteed on page two of the contract stop it stop it stop it Answer my question directly.

Speaker 1 | 15:20.762

Is it new money or is it old money? the breakdown is not is it new money or is it old money it's old and new money no does the irs call it new money or does the irs call it old money the irs does not recognize it as new money you got them right they don't because it's just a refund of your old money i appreciate you attempting sir it was fun having you on the show and i'll welcome you back any other time i'm sorry you did not change my mind lord have mercy is this the best

Speaker 0 | 15:45.615

we got uh no and and jt if you if you want to have a conversation i whether I come on your show or we do a joint thing. I, I, you know, I'm not here to try to change anyone's mind. Um, but it definitely, I think here, here's my, here's my two cents before I give like how I would explain infinite banking. So set number one is, um, the caller, not, not the greatest performance, but in your defense, like when you're already on your back toe or foot and you're trying to justify and you're trying to kick back, it's really hard. I mean, it would be easy for me and my... studio to be able to say this is how it go about it when you're talking to someone who's like in your face like really trying to call you out by first of all like how you make your money and trying to potentially discredit you and get in your face like especially if you're not if you don't do content or if you're not used to that it can it can fluster you and so whether the intention was to you know talk about the you know puas and borrowing your it's just it's a bad look because It's like, yeah, what's the point? Like, why would I do any of this stuff? Why would I put my money in and have less early on? Why would I pay? We didn't even cover that, but they alluded to that. Like, you have to pay to use your own money. Like, why would you do that? And then the dividends, it's like, well, the dividends are a return of premium, and so it must be a scam, which the whole idea is like, if you look at an illustration over time, even if you stop paying your premiums, JT, and you have more money than what you've put in, the dividends are still tax-free. And so you could say that's a return of premium, but like... It's what's a return of. If you put in over time, let's just hypothetically say $100,000 of premiums and your cash value is more than $100,000 and your dividends are continuing to pay on that, you can say that's a return of premium and it's not taxable, but there's more than what you put in. And so that argument on the other side is like, okay, I don't love that because we're talking like we're so in the weeds and we got to zoom out and say like… Should we even be in the same forest? Like, should we be in this pasture? Because we might be in the wrong pasture. We're trying to debate technicalities. And it's like, at the end of the day, let's zoom out. And it was talking about infinite banking. And the word scam is a really strong word. It's like, it's definitely not a scam, but it might not be a fit for everybody. And for those of you that have seen a lot of my content, you know that is not something that I recommend most people do. And there's people in the life insurance space that they're like, man, you should be more passionate about this. It's for videos like this that I'm not like, this is the best. kept thing for every single person because it's not. But if I were to explain infinite banking, we first of all have to zoom out and ask the question, what are you trying to accomplish? What are you trying to accomplish? Like when you do something, you all know, or those of you that have watched some of my videos, you know that I reference the word efficiency a lot. And the concept of efficiency is removing any friction to get to where you want to go. And so when you're working with somebody or when you're trying to figure out what you need to do, you need to figure out number one where do you want to go what do you want to accomplish What does financial success look like for you? And if you're trying to get to a destination, where's your destination? And then what you have to do is you have to then look at anything that's in your way. You know, you might, if you have to, if I have to get to across the country, how am I going to get there? My, what's in my way is the distance between where I am, where I need to go. If I need to accomplish this goal, what is getting in my way? And when it comes to finances, what is the friction that's getting in my way? Is it, is it money? Is it time? You got it. You got it. list all that out and then at the end of the day If we can accomplish the destination or the goal the best way, that's what we should do. And so I don't love when people are saying, well, this is better than what most people are doing. Well, I want the best. It's like better wealth is a decent name in my opinion because we want the best. I want the best way to get to the destination. And so whenever we're talking about that, the first thing is we got to figure out what are we trying to accomplish. And at the end of the day, financially, like you guys know that. you know, intentional living is really big for me. You're not wealthy if you don't live intentionally. I would encourage every single person to get really crystal clear. What does intentional living look like for you? Really figure out like from a value standpoint and, and, and figure out what that is. What does that mean to live intentionally and make that the trump card make no matter what I say or JT says or other people like make sure that living intentionally is, is the metric. But then we also have to ask the question, what's like, what's financially the best way to accomplish that? And what you'll find is cashflow is one of the most important metrics to look at. Cash flow. Cash flow makes the world go around. Cash flow is, when we talk about retirement planning, we should really call it future cash flow planning. You know, I'm planning for a future date where my work, my assets that I got, all these things translates into future cash flow. Now, there's two ways that you can get to that destination, two basic ways. Basic way number one is to earn money, spend less than you make. And then invest that money into some type of investments. It could be the stock market. It could be ETFs. It could be any type of investments. But let's just say the purpose of those investments is to not touch, have it grow over time. And then when you hit 55, 60, 65, 70, 75, those assets are in a place where you can be able to take income, future cash flow. Now, we're not going to get into this, but the 4% rule, blah, blah, blah, that's essentially saying Whatever your... Your dollar amount is you could maybe take out 4% pretty safely with chances of not running out of money. With proper planning, you could get that number up. But that's like scenario number one. And so the question would be, not infinite banking, but the question would be, is life insurance, does life insurance help person that wants to do scenario number one? Person that's making money is investing for a future cash flow date in maybe traditional accounts like the market ETFs, Roth IRAs, 401ks. Does life insurance? help that person do what do what have more cash flow in the future because at the end of the day protecting your family is important but you can do that with term insurance you can you can buy term insurance invest a difference like what everyone says and accomplish that so there's that that's that's like protections key i don't think jt would even say that don't be insured but but the the key thing is in the future what gives me the best result and so we could talk about like does life insurance become a better bond alternative does it enhance your cash flow does it give you that result and you know so and we could have we could have a conversation about let's look at scenario a by term that's the difference and you get to retirement and then what's your distribution strategy you're doing this okay and then you know let's say you over fund max fund whole life and for a portion invest the difference your investments will be smaller because whole life and investments will get you a net smaller return than if your money was all in the stock market That's just like. historically, like I'm not going to argue that whole life is going to outperform the market. But then the question is, does that, there's a smaller number over 30, 40 years, does it produce more cashflow? And you might say like, that's a dumb question. Of course it's not. Well, not, not all numbers are created equal and, and a person that has maybe a more diversified portfolio or have some more options might have the ability to take out greater income without having all their eggs in one basket. That's, that's why some people don't put all their money until retirement and uh into an ETF. A lot of times there's diversification. I think there is an argument to be made where life insurance could play as a better bond alternative. That's a conversation that you could have and you could look at that and then you could say, okay, if I was going to diversify into bonds and I get the whole concept and life insurance would potentially give me a better return if you look at not just the rate of returns, but the tax benefits. And then you look at the other benefits that life insurance gives you, credit protection, safety, and all those other things, and you might be able to say like, oh, well, this actually would be a better bond. quite, I would be very much willing to argue that and either debate that from a standpoint of life insurance being a better bond alternative for a portfolio. And then you could have to say, like, well, if you were funding that, is there a world where you could maybe pay less to term insurance if you had some of your bond alternative is protecting your family? And some of your bond alternative could give you access to capital throughout your life. You know, it's not something that you have to do, but it's It's available to give you. So that would be the route that I would take for so many of you that it's like what you're doing is you're making money, you're investing that money, and you're investing for a future cash flow date, and you want to make sure that you have as much certainty as possible. And then the question would be, does life insurance, not infinite banking, but does life insurance for a portion of your portfolio give you a better outcome? That's scenario number one. Hey guys, I just wanted to interrupt real quick. If you're watching this and have an indexed universal life policy, a whole life policy, have any type of insurance policy. in general and you're like, I want to know if I'm on the right track. I want to know if this is set up properly. We at Better Wealth want to help you. We want to give you a free policy analysis and show you, are you on the right track? Is there some things that you potentially could be doing better? And so we have a link down below that you will have access to. We would encourage you, if you have a policy and you want to see if you're on the right track, check that out. And if you're someone that's watching this and you're like, I want to talk to someone, maybe setting up a policy for myself or I have questions, we would love to serve you. You can also see. a link to have a call with someone on our team back to the episode scenario number two is for the person that is an entrepreneur is a person that is maybe is an investor and your your greatest need is money and you are looking to deploy that money invest that money in your businesses you're looking to invest it in maybe future businesses you're maybe looking at to employ in real estate and so what you're doing is you're making money you're putting it into a high yield savings account And hopefully, some people put it in a checking account, but hopefully it's in a high-yield savings account. And then you're looking for places to deploy that capital and use that money. And for someone like you, you would want to, the conversation would be, we have to compare it to a high-yield savings account versus life insurance policy. And there's pros and cons. High-yield savings account gives you early liquidity. So like even what JT was saying is like this person had 13,500 that they funded into life insurance policy and they have an immediate, in this scenario, $9,000. So any rational person would be like, well, where did the other $4,500 go? And it takes years. If you set it up properly, it takes years to have more money than what you put in. And so a opportunity cost and the definition of opportunity cost of what you could have done with that money is there's in the first couple of years when you come to infinite banking, there's less money than what you put in. That's a real step back. That's a disadvantage because if someone in a high-yield savings account or a checking account would literally be ahead for the first couple years by not even introducing life insurance. Now, if that person was doing term insurance, obviously they would be paying the term insurance expense, but that still is going to be less. That gap is still going to be less than if they did the whole life insurance. Now, there will get to a point that over time, the life insurance policy, from just a cash value standpoint, just an actual growth, and yes, JT, that means… factoring in all the commissions and everything, everything. Internal rate return means the actual rate of return. You're going to get anywhere from 3.5% to 5.5% actual growth rate. This is not dividends. All these dividend rates, they can be super misleading. I look at the actual growth rate of a policy factoring in everything. Okay, so 4.5%, 5%, not going to change your life, not going to outperform any investments, but that's the kind of rate of return. over a long period of time. And if interest rates stay where they are, the, the, the, the, what I said is probably on the low end. And so with that, they, over time will grow greater than a high yield savings account, but that's, but that's even without factoring in the tax benefits. And when you factor in some of the tax benefits and stuff, you're going to bump that up because in a life insurance policy, you don't have to pay taxes. And, and so there's other, there's other things that factor in because in a high yield savings account, you actually have to pay ordinary income tax on. interest, which sounds crazy, but that's how it works. And so when you factor all that in, let's say life insurance gives you a 5% to 7% rate of return when you play the devil's advocate tax game over a long period of time. Still not going to outperform any investments. But it does allow you to be able to borrow against that to invest in hopefully other assets. Now, the common question would be, that is a dumb idea. Why would I borrow to use my own money? And technically, this caller was trying to point that out and may or may not have done the best job. But again, he's trying his best with the environment he's in. And the reality is, you know, you're not borrowing your own money because then you wouldn't be getting any of the benefits. You are borrowing the insurance company's money to be technical. And your cash value is staying in the policy and getting all the benefits. Now, here's where I disagree with a lot of my friends in the industry that are just like, there's amazing arbitrage and this makes a ton of sense. Financially, if you don't care about insurance, if you don't care about the death benefit, you don't care about... the credit protection, the safety, and all these other benefits, the living benefits, and the permanent death benefit that increases. You don't care about any of that. Infinite banking is a dumb idea. It really is. It financially may, you may squeak out 1% arbitrage if you factor in taxes and all that stuff, maybe 2% if you factor in taxes. But over time, it's just not worth the headache if that's the only thing that you care about. But if you factor in the permanent death benefit and the chronic illness riders and the creditor protection and the safety and all the other benefits that you get, the fact that you get to protect your family, get all those benefits have your money compound for the rest of your life and you get to use your capital while you get the benefit of that compounding that's that's beneficial and and my answer would be is if if if we're comparing to person a which is the person that does high yield savings account by term you know invest in their businesses and does their thing they're they're ahead financially and let's say that they did the responsible thing about term insurance for the next for the next 30 years they're covering They're family. They're doing certain things. But there's going to be a time when person B, who's a little bit behind in the first, let's say, five, six years, over time, their system is going to be financially more efficient than the high-yield savings account. But it's also going to get a lot of other benefits that person A doesn't have. And there will get to a point where 30 years in where person A drops off their term insurance and now has all these assets, this person has… let's say most of all those assets because they there's a little bit opportunity cost in the first couple years not having all the money that they've had they get all those other benefits and my question would be does person b is do they have more options are they are they in a better financial situation than person a that that's that's the question and and i would say that person b is in a better financial situation even from the get-go even from the get-go you could argue that person b even though their liquidity is a little bit down they could be having other benefits that that benefit them. Now that could be a stretch. And if that is a stretch for someone, you're going to realize whether you work with a company like ours or somebody else, like there's, I'm, I'm never saying that someone should over leverage or put too much money. I'm always saying, start small, get this thing started and see how this works. And I think that's another mistake that people make is they talk about all the talking points and they're like, let's go all in and you should never go on in any one strategy, but especially when it comes to insurance, you should never have insurance be something that makes you less safe. by having it. So to answer the second question around like if your path is not just put your money in the market or an investment account and have a future cash flow and you actually are an entrepreneur or you're someone that is looking to invest, you have to look at, okay, your money's always got to reside somewhere. Where's the benefit there? You got to deploy that money. Hopefully you're buying assets and other things. And the question would be, is life insurance and those activities going to give you a better result from a cash flow standpoint and other and what you're looking for long term The answer for me and a lot of our clients is yes, but the answer for most people that are on YouTube, the most people in America would be no. It would be not a great strategy for you. That doesn't mean that it just means like there's got to be an investment in the knowledge of why this asset and then there's also got to be the means to be able to fund something like this to actually make it make sense. And when you look at most people aren't able to save anything. And so if that's someone like you, the last thing I would say is the first place you should put is in life insurance. The first place that I would suggest is in a high-yield savings account, and you could also make the argument of maybe putting that money into a Roth IRA and all, not investment advice. But that's where I think the infinite banking or life insurance pitches can fall flat on their face is they're usually saying that this is better than investments, and they're usually making talking points. And I've heard pitches that literally make you think that the stock market is... trash and that insurance is going to outperform it. And, you know, in the past, even if you look at the and asset book, I make, you know, I look back in time and when you factor fees and all these things, you can make the argument that insurance could outperform or perform just as good. And I just, as I reflect on that, I go, I understand why I wrote that because that was, you know, big, like that's when I was learning about all this stuff. This was like a big deal, but I was like, I just don't love that. I don't love that argument anymore because I think it really does hurt our credibility long term when you're working with people that really know how investing works. And so that's my final thoughts. JT, I would love to have a conversation. We'll be reaching out, and it would be awesome to connect with you, have a conversation. I'm not saying we need to agree, but I think we'll agree on more things than we disagree. I also want to do some type of call-in show and figure out how to pull that off, and so we'd love to hear. um just what you've learned in just your journey of being able to do that i also also love to hear from you what did i miss what do you think i could have explained better um what are your thoughts on how jt jt and this other caller um you know interacted and please send us more videos to react to because this is fun it's it's fun for me to see what other people are saying and give my two cents

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