What Should You Know Before Starting Infinite Banking?

All right. Everything that you say can now be held against you. We're live. I'm here with Wealth Nation. And guys, I have to say this. We had an interview. It's so funny because your guys' background looked so beautiful and bright and I'm like in this cave for some reason. I did not have a good lighting day. So I was a little bummed. I was like, "Okay, you know, the conversation was good." And we put a clickbait thumbnail of like Wealth Nation exposed.

And I have to say that I love the comments and so many people are just like I love your guys' energy. I love how you explain certain things. And so I am just so grateful that you guys would come on back. We're going to talk about everything about money, infinite banking, some of the mistakes that people have made, your clients, yourselves have made when it comes to talking about infinite banking, and just anything and everything. And so, I appreciate this. I didn't ask you before we got on, but we'll stop whenever you guys need to stop and I'm just excited that you guys are coming back on the show. So, welcome.

Thank you so much. It's our pleasure. I mean, whenever the phone rings and it's Caleb, we're like, we got to do it. We got to do it. So, thank you for the opportunity and we also enjoyed seeing the comments. Thank you to all the love as well. It's just a ton of fun to have great conversations with good people.

Yeah. And it may be weird, but your video emails are awesome. The quality, your smile, like I keep them and I'm like, man, this is so cool. Like, this is Caleb talking.

Yeah, we're on your newsletter, Caleb. We stalk you.

I'm going to clip that and I'm going to share that with every single adviser that tells me that video emails don't work. My message to you is you don't work, but video emails work and you work. So, I appreciate that. And it's a secret hack that's no secret, but it's like if we can scale the unscalable and it's just it's super super cool and it's been a lot of fun. To date, I've sent over 4,300 emails personally. And there's no like secret of why we've grown so quickly as I think some of those emails land in people's inbox. They watch it and things happen. And so thank you guys for saying that.

No, absolutely. It's a personal touch.

Yeah. So let's talk about, I mean, if you guys don't know, you know, Wealth Nation story, go back to our other episode that will be linked somewhere here. You guys did a phenomenal job talking about your background. And Darius, you got really personable and also Carmen, thank you so much for just that and some of your epiphanies and your just money insights, and that was total fire. I want to now get into the nuts and bolts of like let's talk about strategy. Let's talk about infinite banking number one because you guys have a lot of your videos especially in the past about infinite banking. A lot of people are attracted to your brand and I have like this very interesting thought around infinite banking.

I love it. I love what it stands for. I want to get your guys' definition. I also think it can be overhyped. I think it can be oversold. It sometimes some people give us all in the industry a bad name. And so my hope in just this whole series is I want to interview people that are doing it right, have discussions, be able to chat about the pros and cons, and really just go a level deeper that you don't necessarily see on YouTube. And so, thank you guys for your willingness to do that. And without further ado, I'm putting up infinite banking on a tee and wondering where we want to go from there.

From there, let's do it. We're open books. All gloves are off. I think it's important for your audience, for anybody who's watching to really just get the nuts and bolts of what's going on and exactly what you said. So let's get into it.

Yeah. And before you even ask your question, the first thing I say is infinite banking doesn't work. It doesn't work unless you do. And I think when people hear the tagline of infinite banking, I think and what I've seen with clients and some of the mistakes we made in the beginning is we treated it like a diet instead of a lifestyle. And when you treat something like a diet, what happens is as soon as you go off of that diet, you go back to where you were. You gained 10 pounds, right? You gain, you might even gain more weight back than when you started. And I think with infinite banking is one of the same situations to where you find yourself having access to more money. And if you haven't adjusted your mindset to that new power that you have and control that you have, then you can go back even further than where you started from.

Yeah. Or worse than where you started from. I agree with that. And one of the big kicks that I've been on is like life insurance is not an investment. Infinite banking is not an investment. It's don't hype it. It's not going to save your marriage. It's not going to save your business from failing. Like I say that jokingly because I think some people, like when they watch a video that you guys do or they watch a video, they're like, "Wow, Caleb loves this strategy. Like let's go." And let's jump all in.

But we like to focus on efficiency. And efficiency is removing any friction or barrier that's helping you get to where you want to go. And the idea is if we can take a dollar and give it more than one uses, create a multi-dimensional aspect, it may be possible that those multi-uses equal a better result than just one or two uses based on an investment. And one of the cool things that we all are talking about is this is not an either/or. It's very and conversation. And that's one of the things that if I could just get people to take a step back and say it's like if buy term and invest the difference works for you, go for it. I don't

...necessarily want to argue with you, but this is very much for people that are like, I'm not this is not the destination. This is the foundation to build what we need to build. And so that's very much I appreciate you sharing that because it is a process. It's not necessarily just a one and done or you just get the policy and then you're done. And so anything that you guys want to add to that foundational kind of premise?

Yeah, exactly what you said. This is a process, not a product. So in order for this to work, you got to work the process. And then the thing that we learned about compound interest is it's about what you get on the back end, not on the front end. And the more you continue down this road in this process, it just gets better over time. Don't cut your legs out from under you by doing something silly that you wouldn't have normally done because you have a nice foundation, a nice building and situation that you put yourself in. Have to continue going.

Yeah. Yep. So, in your guys's words, we're on this large building and we're going up the elevator. Okay. So, this is not like a 20 second elevator ride. It's like a three minute elevator ride. And they're like, "Okay, infinite banking. What is it?"

So, okay. So if we have let's say two minutes on this elevator, what I would say is infinite banking is a process that allows you to multiply your money in ways that gives you more control. So instead of relying on the banks and being dependent on the banks to store your capital, there's other ways in which you can store your capital, maybe with a life insurance company that's going to allow you to, one, have liquidity, and then two, have a death benefit to protect your family, God forbid something were to happen. And because of the control that you have with just using a different storage facility, it allows you many different opportunities to finance your lifestyle, to finance investment opportunities, and just to basically finance anything that you can think of because now you're in control and you're not dependent on someone to give you an approval for money, right?

And I take it a step further and say it allows you to remove the middleman from your pockets, because right now the middleman in all of our lives are the banks. If there's anything that we want to finance, we have to go to a bank or financial institution. And what infinite banking allows us to do is to use the tools that the banks use in the place of the banks. And by doing that, what you're doing is you're redirecting interest payments back to yourself. The name of the game when it comes to infinite banking is the interest payments that you're able to redirect back to yourself to put back in your system so you can continue growing your system and continuing to finance the things that you finance on everyday basis any day. Anyways, is there anything else you want to state there?

I think that's it. Yeah. No, I think that's very comprehensive. I think Yeah, I mean it's very, very foundational. You guys were over two minutes, but you were pretty close.

I was wondering if you were timing it. I was going to, but I was like it would be too distracting.

Yeah, I mean I think I'm with you guys. One of the things that I would love to chat about, and we don't have to talk about it, but I want to talk about the cutting the banks out and the paying yourself back interest, because I think when people hear that, it again it sounds like, oh, that's amazing. And the way that I explain it is, when Nelson Nash in his book, you know, Becoming Your Own Banker, he talks about volume versus rate. Yes. And the name of the Wall Street game or the Bay Street game is hyping rates of return. And we can easily show you where you could get an average rate of return of 25% and actually get nothing.

Okay, so rates are very misleading. It's like when Elon Musk says 69% of stats are a lie. You know, you could lie with statistics. And the whole concept, I think, of overfunding life insurance, the infinite banking concept, is we're able to create a massive amount of savings. And I believe people, our clients, your clients can save more money if they just have access, if they can utilize it, if they have access to those dollars before 59, 69 and a half. And the fact that their money can continue to be growing.

And the thing that I've been articulating more recently is all the other benefits of life insurance. Like, what's the benefit of creditor protection? What is the benefit of privacy? What is the benefit of a tax-free death benefit? What is the benefit of unlocking potential your 401k and maybe increasing the cash flow that you could take from that or maybe increasing what you can take out from a pension? Just because you have life insurance doesn't mean life insurance is pensionized. It just allows you to have another option. And so I start thinking, I'm like, man, that's incredible, and the fact that we get all those future benefits and have control of that capital is incredible.

Now the two things that I generally hear that I want to have this frank conversation is like cutting out the banks. I want to know what you mean by that. And then also paying yourself back interest. I want you to break that down, because I think when people hear that, they say you're actually paying your policy back interest, whereas I think it's like, no, our cash is able to grow, get interest on compounding, and we're able to utilize that capital while our money grows, and that's a indirect way of saying we're capturing interest because of the efficiency of our dollars getting all those benefits and our cash.

And again, I don't know if this makes sense, but I'm grateful that we can go deeper because there's not a lot of people that can jam about this. You're like one of the few people that we can have a deeper conversation. And maybe everyone in the comments are like, "Caleb, you lost me. It was nice walking. You had a good start, but you dropped off dramatically." Well, I know Darius is like chewing at the bit to answer this question. So, hold on before you

Yeah, go into this. To this point that you're talking about, Caleb, what I think causes the confusion and or the disconnect between paying yourself interest and this thing called life insurance is because, at least what we found as consumers in the game, right? Or even what we've just seen from our clients is the lack of financial education of understanding what are interest rates, what is happening with my money in the bank. And so when you start to teach these concepts, people are like, "Okay, yeah, that sounds cool. It sounds sexy." But they don't completely even understand what's happening with their bank accounts.

So then it's hard for them to then now all of a sudden imagine this unicorn of some interest coming back to them some way when they're just already used to paying interest out. You know, it's just a subconscious effort that they're always paying their credit cards or paying their mortgage or paying their car note, and they don't even think about the interest that they're constantly paying. So exactly what you're saying with Nelson Nash, how he was talking about how much the volume of interest that we're constantly paying. A lot of consumers don't even understand the volume of interest that they're already paying. So how can we even have this conversation if you don't even know how much interest you're paying on a monthly basis anyway, right?

So I know one of the statistics that we've talked about, lie or not lie, right? But it's about how the average consumer spends more in interest every single month than they save themselves. So when we go back to this concept of control and your money growing and how did this all work? One, we ain't saving money, and then two, we don't have any interest or we're paying all the interest out to the bank. So what we're talking about is a complete paradigm shift in this financial world that we're in.

So I just wanted to make that comment before we go there. Because I think even for me, Darius is phenomenal with numbers. He just gets it. But even for me, like I had to see it. I had to see the process working. And once I saw it, I started going, "Oh, shoot. Wait a second. That's what you meant this whole time?" So just for my personal testament how this whole thing works.

Yeah. And that last point that you said I think is really important also is for us to keep it simple. There's some things that we're not going to understand until we actually start on that journey. Is there some certain nuances we don't understand about riding a bike until we actually get on that bike and start riding it. Yeah. So when it comes to the fact that the insurance policies are earning interest and it's all efficient and things of that nature, we're also paying interest that we would have paid to a third party institution. So we're winning on both ends.

Now the comment that I made about the banks and cutting out the banks. I think if we go back to when banks originated, it's originated as a storage facility, and over time you started using banks for other purposes than what it was originally designed for. So the only thing we're saying, well, and let's take a moment, right? Because we need to break this all the way down for the viewers so they can come with us on this journey, right?

So we talk about a storage facility, we all needed places to put our money, and so the banks got hip to the game and said, "Hey, I'll hold your money for you." Right? And then over time, they recognized that as Caleb's depositing money, I'm depositing money, Darius is depositing money, we're not using every single dollar that we deposit in the bank every single day, right? So when you look around, there's this money sitting and they're going, "Hm, what do we do with this money? What would you do with the money?" And so then they started getting more aware, and we're simplifying, right? We're oversimplifying and it's just for the conceptual piece of things of just like what can we do with this money?

And money sitting doesn't make any money. So if Caleb isn't going to come on Tuesday and get all of his funds back, we can maybe lend out a few dollars, and when Caleb comes, we can give him his money, but the money that is sitting here will be making money. And so that's how the banks are making interest, is because when you're depositing your funds into the bank, they're going, "Thank you for that deposit, sir, ma'am, and we're going to take this and now lend it out." Which is why, like Darius said, now we can use the banks for so many different products and services. You can get all sorts of funding, you know, regardless if you're trying to buy a house, a car, credit cards, personal loans, whatever the case may be. You have access to cash, and it's because of the pool of funds of everyone who is a depositor at the bank. All of their money is at the bank, right?

So, perfect. Moving, everything that Carmen said, everything that Carmen said. Now, fast forward to right now, what we're currently doing is we're using the banks for everything except what it was originally designed for, which is a storage facility for our savings. Yeah. So that's why it's so far-fetched when we say we want to cut out the banks. No, we're talking about cutting out the banks for everything else except for what it was originally designed for.

Yeah. Financial institutions and really insurance companies, banks and Wall Street, they have all the money. And so you think about it. So banks and Wall Street, like, so banks will lower fees if you do a direct deposit. Okay? Why? It's like, oh, because we want to see your money before you do. And so does Wall Street. Like they want to, we'll give you a deduction. We'll postpone your tax to an unknown date where it's tax will probably be higher, and we're going to just take it out before you even get your money.

So they're like one step ahead of each you. Banks are like, instead, before you even get your paycheck, we're going to take money and then we're going to penalize you if you want your money because we want it as much as possible. So it's like, and what I've always said is like just do what they do. Like that's it. I mean, I don't want to, maybe we just end now, like just model. And this is actually interesting, this, when I worked

At the bank, when I worked at the bank, this is before I got introduced to all this stuff. We had our accountant and we were talking, like I was going through accounting class. It was a blast. But the problem was I was going through accounting class and the way that banks account are the exact opposite. Like a debit usually is a good thing, right? And so there's like, oh wait, what is, and you guys know the answer to this, but like when we take on money, that's actually a liability because the bank is saying, I owe you this. And then a loan is actually an asset, where it's the exact opposite in your personal life.

And so another step that I will give 100% credit to R. Nelson Nash and just that movement is like, oh, we got to start taking a look at, could it be that loans could be an asset for us? And that's more of just an entrepreneurial way of looking at your money anyway. Take a loan, how do you create an asset versus a liability? It's so powerful because again, going back to like I was saying about the financial education, we don't understand this because as consumers we're thinking that our deposits are our assets, but it just depends on, you know, who's using it, what form and all of this. So it's a complete paradigm shift to understand what's going on and then taking ownership of it, right? Because it's one thing to know that you're getting robbed. It's another thing to do something about it.

Yeah, so to speak. So it's one of those things where once we started to get more and more education as far as deposits and loans and assets and liabilities and this big old house that we bought, what do you mean this isn't an asset anymore? We just started questioning everything and going back to cutting the middleman out again. How do you, what do you do? Like you said, Caleb, just do what they do. And I think the other thing too was throughout our journey, we didn't know of any other places where you could deposit money.

Yeah. You mean I can deposit money somewhere else besides a bank? So again, it's just the education of understanding that there's other places to put your money. There's other things that you can do, but you just have to be exposed to it. Yeah, I think infinite banking is just the tip of the iceberg. Oh, yeah. Because once we get on this journey, we start looking at the things around us differently.

And the crazy thing about it is the fact that there's opportunity all around us. Yeah. But if we're not trained to see it, then we're going to continue to operate based on our default or how we were raised or what the banks are telling us to do. The banks tell us to do one thing and then they go and do something else, totally opposite of what they're telling us to do. So we have to use this system and stay on this journey as a way to help us start to open our eyes also to what is really going on and what is success really. How do you really grow your money? Yep, yep.

I love everything that you guys are saying. A lot of times I'll hold up my cell phone, which is a distraction right now. But it's like, this is a multi-dimensional asset. I'm able to text. I'm able to call. I'm able to do my email. I'm able to wake up in the morning. I'm able to have a video, like I'm able to video certain things that have way high quality than majority of cameras out there. And it's like, okay, is a phone really expensive or is it incredibly cheap for all the benefits that we get?

And so one of the things that we just get practically, and I want to move on kind of with some other questions, is like life insurance. Well, the question number one is, can overfunding a life insurance policy, can that help you get closer to where you want to go or farther? It's like, if the goal is intentional living, if the goal is X, Y, or Z, passive income, all this stuff, can life insurance in your life, when it's overfunded and you're using it as a storage vehicle and then borrowing against it, can that help you get closer to that or farther? And if the answer is farther, then you probably shouldn't do it. The answer is closer, then you probably should do it, because it's that simple.

And so one of the ways that we try to do in educating our clients, obviously the policy design is really important, understanding all the benefits. It's like, this is fake money by the way, but it's like if I'm going to put my money, what are all the benefits I'm going to get, kind of deal, and understanding that. And then the next question is, and this is where I find a lot of people that teach this miss, is when we're talking about infinite banking, it's really a two-part question. Number one, is life insurance the right asset for these certain assumptions? Yes. The next question is, when should you use your policy loan?

And so this is, and again, there's no wrong answer here. We may teach it differently. We may even disagree. And that's what I want the industry to see, is like, you don't have to agree with me to be right or wrong. But how I teach it is, when you take a loan, you're not taking a loan from yourself. You're taking a loan from the insurance company or a third party. That's another strategy that can make things more efficient.

And whatever that third party or that insurance company, whatever their cost of capital, that's what I call it in the insurance rate. So let's just say it's 5%, and I'm taking a 5% loan to then go make an activity. The way that we teach our clients is, you better make sure that that activity is getting you a greater return than the cost of capital. So I wouldn't pay off a mortgage 3% at five. It's like that, you know, but at a 7% rate, if I have a debt at seven and I'm able to pay a five, that's a 40% on my money. Or if I'm able to take a 5% control cost and invest in a syndication where I'm earning 12, that's 140% of my money. My money's in my policy, but it's costing me, it's a leverage point. So I

I want to hear how you guys explain it because there's a lot of different ways that people explain. I think some people are like, "I should just run my expenses through my policy." And that's another thing that I hear taught and I'm like, man, we got to go deeper because I think some people don't think about how they use the policy and the math behind it. And as a result, it's that baby step number one, getting the concept. Then the step number two is the actual strategy of efficiency.

Yes. Yeah. And I think I even say it so often to where Carmen was like, "Just stop saying that. Stop saying that." When you borrow from your policy, you're not borrowing from your policy, you're leveraging the insurance company's money to get a loan from them while your money sits there. That's exactly the way you said this, is exactly the way we teach it.

Yeah. And also even in the beginning when you first start your policy, you don't want to borrow money from your policy and pay something less than 5%. Now you can do that much later. Much later you can do that because of how much interest you're able to redirect back to yourselves after years of working. Yeah, seasoning. But in the beginning what we recommend is when you borrow your money, only leverage against something that is 10% or more. So in 20% credit card debt, that's boom. There you go. Perfect.

Yeah. And it literally, we don't want to be redundant. We say the exact same thing because it has to make sense. It doesn't make sense for you to get a loan if you're not going to make money with it. And with the whole world of investing, we know that it's all about making money. It's all about leverage. So all we're doing is cutting out the bank, cutting out somebody, right? And we're creating leverage for ourselves within our policy.

So with the investing piece of things, I think it's important for people to know what you're doing when it comes to getting a loan and how you're paying it back and things like that. Darius and I have used policy loans for expenses and we've talked about it on our channel, but it had to make sense, correct? And it was much later, we've used the system so many, over so many years. Yeah. Because we have one scenario, for example, where we even shared where we used a policy loan to pay off our rent for the year, but it was because we got a significant discount and how the numbers worked out. We were paying ourselves back with a greater return than what we would have paid. So we ended up making like 30% off of that deal, but it's because 30, excuse me, 36%.

Yeah, get it right. All right. Yeah. But who's counting? But it's because we understand how this process works and so it has to make sense and you have to understand the process again, not just the product and how this all works, but the main thing again is just control and leverage.

And you guys just had a perfect point, a perfect point. You guys got to think outside the box. Majority of people can't even, they're not even in a financial situation to pay for their rent all in full. Like that's not even an area that they can even pursue. But they might have hundreds of thousands of dollars tied up somewhere. Yeah. But what you guys were able to say is like, okay, if you just were able to save 1% on your rent, that you probably wouldn't do it. But you were able to save 36%, which, if I had my financial calculator out, that's an insane rate of return.

And what's cool is, what kind of risk did you guys take on by doing that? Zero. Zero in it. And one, ourselves, we were the risk, right? And one, you're going to live in that house regardless. Yeah, exactly. So no, that's what's perfect, is like you literally, efficiency, I was going to make up a word. You literally optimized your current situation. Yeah. Made a crazy rate of return. Why? Because you had control of capital. I'm sorry, Darius, you can go now.

No, one thing I was going to say is sometimes, or a lot of times, we don't realize we don't convert what we save into cash. Like for example, in this situation what happened was we had cash. Cash in a lot of situations is very important. So when it came to our rent, we said, "Hey, we have 12 months right now so we can pay that. What kind of discount will we get?" They said they'll give us like two months and a half. They give us two months and a half. That's a savings that most people won't realize because they were like, "Oh, I don't have to pay this, so I'm going to spend my money on something else."

No. When it comes to infinite banking, you pay yourself the same amount every single, the entire 12 months, as if they didn't give you a discount, so you can actually realize that cash. And there's a ton of opportunities that are like that to where we can have access to cash and present that cash and get a discount. But we have to realize the savings or the discount that we get. And that's just another way of being able to leverage this tool of life insurance.

Yeah. And if I may, Caleb, I want to try to articulate what I'm thinking to make sure that we can hit this home with the audience, right? But the thing that I feel like a lot of practitioners miss, and maybe we're not even doing the best job communicating this as well, but so many people are so focused on investing and they don't know what's happening with their salary, with their realized income that they have access to, and they're so busy on what should I do with investing or this and that, that they have no idea that they're bleeding from the opposite end.

So what we try to at least get people to see is if you make $100,000 a year, how much do you have left over after 12 months? Zero, 10%, 20%, whatever it is, how much money of that capital do you have from your income? And all we're trying to do is to teach you a process that's going to allow you to

...keep more of your money.

Yep. Done.

So, yeah. So, it's just about now next year, can we keep 30, 40, 50%? And then what are we doing with that money when it comes to investing and other opportunities to create cash flow? So, it's just a different way of thinking about your income, because we got to stop the bleeding and then put a tourniquet on it and then move forward.

Plug the holes in our boat.

Exactly. Yeah. I like Darius's example better than your example.

Maybe a little bit graphic on my end. So, I'll just say again, you said something very early that will probably be the title of this video: if infinite banking doesn't work. And I'll just go back to the rent example, and I'm actually going to give Dave Ramsey a pat on the back here, so be ready. Is like, listen, if you guys were to use your infinite banking policy to get the discount and then spend the difference, congratulations. Like, your financial life and model isn't better off. You might have better memories spending, but you don't have more money.

Yeah. So that's what's very, very important. The same thing about paying off your house, like kind of deal. It's like, all right, like you could pay off your house and you could behavior-wise could bankrupt yourself, kind of deal. Or you could have a loan and as a result you're not saving the difference. And so it's just one of those things where behavior has so much to do with whatever strategies we do, and it comes down to the discipline.

And so it's one thing being mathematically correct, which I tend to default towards. I'm more with you, Darius, from a standpoint of like, I need to know the math. It's got to make sense. But at the end of the day, we could be the ultimate losers if we have the most mathematical making sense policy and strategy that no one does. And so as a result, you might have the most efficient plan that you're not utilizing, which just makes it not optimized. And you might be super efficient with your 5% savings, whereas, you know, you could be saving 25 if you just start rethinking and create discipline in some areas that may be off limits for some people that are teaching money.

Mhm. Very, very good perspective. Discipline is 80% of the game. If you think of any successful person that you can imagine, financially successful person, their foundation is discipline.

Yeah. Like you can even add the buy term and invest the difference. If you have discipline, it works. If you don't, it doesn't.

I love it. I love it. And even with habits, right? This all boils down to financial habits, savvy financial habits. And I think sometimes within the industry that we're in, sometimes people look at budgeting or just intentionally spending as a restrictive activity when really we're creating healthy financial habits that aren't restrictive. We're creating habits that allow freedom. And so when you understand the nuances and how these things play, you start to adapt different habits and you start to act a certain way and think a different way until you can start adopting these habits and really indoctrinated into your life.

Yeah. Like when you think of a budget, you're trying to get yourself to a position. It's not a position of scarcity or limiting myself. It's trying to get you to a position of living off less than you earn.

Offense. And living off less than you earn allows you to go on the offense. It allows you to, instead of you making money, allows your money to make money. That's where we're all trying to get to, is that point to where our investments are making money for us. And I think the jet fuel that we can throw on this fire is life insurance.

Yeah. Life insurance is a jet fuel we can put on this thing and blow it up.

Yeah. I love it. I love it. And that's why I enjoy speaking to you guys so much, is you guys get it. You guys have a ton of energy and there's no doubt why your guys' channel is over 100,000 subscribers and counting. Congratulations for that.

Thank you.

Yeah, it's just an honor to be connected with you guys. Got a couple other questions that come up for our audience. And again, we can disagree on this and totally stay friends. Your mortgage, if someone has a mortgage, are you guys recommending them use infinite banking to pay that off? You recommended them do a 30-year. What is your thoughts on the mortgage conversation?

Well, we have kind of touched on this before. So again, it has to make sense. So initially we say no. We say it's not a good opportunity for you to pay down your mortgage because you probably have some greater areas where you can make more money. However, if you go 5, 10, 15 years down this road and your policy seasoned, you have ton of interest coming in from every which way, then maybe at some point it might make sense for you to look at your mortgage. But again, we have to have that mindset of, can we do more with $300,000, the balance on your mortgage, can we do more with that than just throwing it at the mortgage?

And the only reason why we kind of pick and choose the message is because we realize that certain people have different values. Yeah. Right. So we have to look at, you know, your age. We have to look at your lifestyle. What's important to you? What are some things? And some people are just adamant about paying off their mortgage. And we can't do anything about that. So we try to support them in the best way we can.

But the overall conversation is, if your balance is $300,000, can we invest $300,000 and make some more cash flow as opposed to just paying off a bill? Because really, what is this going to do for you? And early on what we learned is you either want to own all of it or you don't want to own any of it. And with mortgage rates, I mean, by the time this video comes out, it may go up, but at mortgage rates less than 5% compared to your policy that may have 5%, it doesn't make sense to switch places. You have to think of, do I want to switch places with a higher interest rate and a lower interest rate? And then when you think of a 30-year mortgage

With inflation going up, you're going to be paying them weaker dollars 30 years from now compared to right now. The most important or the most powerful dollars that we have right now are the dollars that we have right now because of inflation. If you have a 30-year mortgage and inflation, who knows what inflation is going to be 30 years from now. Yeah. It really doesn't make sense to pay off your mortgage early because you're giving up stronger dollars. Yeah, instead of the weaker ones in the future.

The other thing is, and we have a workshop that we walk people through this, and so I'll walk through the math. It's like, okay, if I can pay five and earn seven, that's a 40% rate of return. And so people are starting to be like, okay, I like that. And then I say this and it totally messes people up, and I do it anyways because I kind of like it. And it's like, okay, so if I had an investment that I could earn 7% and I could control my capital at five, I would still not do that deal. Why?

And they're like, well, mathematically it makes sense, but what I like to tell them, and this is something that's like an invisible factor, but it's the opportunity cost. I don't have unlimited money like Elon Musk. Okay? I make a decision whether it's to pay for a car, whether it's to go pay off a credit card, whether it's to pay off a mortgage, whether it's to invest. By that decision, there's some other factors that are in play there. And to a 7% rate of return, why in the world would I want to give up liquidity and control over the use of capital for a 7% rate of return when as an entrepreneur there's opportunities for better or worse that can, you know, triple digit returns?

So it's just another way to think. It doesn't make it right. That's where working with a coach is important, because you might be someone that's like, you should take that all day long. That's it. You're getting a dollar doing more than one thing. But then you also are like, I hope that gets you to start thinking, to be like, there's value in controlling capital. And my hope and plea to people is start putting a valuation on control and have that be the benchmark. And it might be for some of you 10%, meaning you're not going to give up control of your capital unless you can earn more than 10%.

Completely. Yeah. And I think that's when it goes to knowing the math behind it, because I think every bill that we have or every loan that we have, the interest rate that's on the paper is different than the interest rate that we actually pay. And I say that because I'm thinking of like mortgages, for example, a mortgage at 3% interest. If you look at the amount of money that you spend over that time frame, you're not actually spending 3%. You're actually probably going to pay double over that time frame.

Every single loan that we have is like that. We have to be able to look at it and see what we actually spend over the time frame and take that in consideration for the amount of money that it's going to cost us when we give up our money versus the amount of money that we can make above and beyond that amount. And the same thing goes for compounding. It's like, yes, you may pay for your house double, but you're also, if you compound at the same rate, it could be triple, you know?

So I love what you said about always looking at both factors and just making an unemotional decision. And by the way, there's more than math. It's security, control. And I'm a fan of, if you can use debt properly, you can actually have more control, because if I keep my money and have a mortgage and I become disabled, I'll take the money, because the bank's not going to necessarily refinance my house when I'm not able to pay them back. So it's just thinking through that.

Next subject. It's like these are like the controversial subjects with Caleb. Is bank a car. So I've done a couple videos where we've talked about, you know, when you purchase a car, there's really two decisions. Should you buy that car? If the answer is yes, then what's the most efficient way to do that? And obviously, we know if you have cash and you pay cash for that car, there's an expense there. So you're not paying any interest, but you're losing interest of what you could earn.

Now, obviously the policy, you're taking on a little bit more cost, but instead of your money sitting in a bank account, maybe it can sit in a life insurance policy and get a greater yield and other benefits. And then I'm the controversial person that says, "Okay, I will actually take the bank loan or credit union loan and take a 2% loan, keep my cash and pay the credit union, but I can mathematically prove to you that I can save more money, because with that extra money, either it can increase my lifestyle or I can save it." What are your thoughts on that? And did I go too far?

No, no, no. Absolutely. Because I think the difference is the money that you save, you actually have a purpose for it. I think a lot of times what people look at is just a surface of a conversation or an opportunity and they think that's it. But it's all about, if you have control of more money, what are you doing that to make more money?

So if you can get a loan at 2%, get that loan at 2%. If you can get a loan at anything less than 5%, you're good, because the only thing I'm thinking about is how much does it cost me to access funds from my life insurance policy, and I'm comparing everything to that amount. So if I can get a smaller loan, of course I'm going to take the smaller loan and keep my money and do something different with it. I love it. I love it. And one of the things that I chatted with one of my good friends is just the benefits of health. I think actually we chatted even when getting on, is like the amazing, like we

...can take supplements and we can eat healthy and we can just show up more powerfully and think more clearly and have a better quality of life. And it's one of those things when you have control over your capital, when you have a foundational asset that maybe gives you a little bit of margin, you just will be less stressed. And I don't know what the rate of return of being less stressed is. I don't know. But it needs to also be factored.

And that's where people, especially the analytical people, they're like, "I don't love those statements because I can't measure it." But it's like, I can't measure rate of return of a golf club, but I know for me, I'm not getting paid to play golf. And some people are, you know. And so it's just a tricky scenario or something to really grasp.

Yeah. And I even think statistically, when you think of the stress, we think of 50% of divorces happen because of financial hardship. 70% of the people incarcerated because of some type of financial situation or money. There's a variety of different statistics that revolve around the stress. And money puts people into a different state of mind and how they react to life. So if we can get a better understanding and a better handle on our money, have more control of it, and that's one less stress that we have, I think the world will be a better place.

I 100% agree, man. I 100% agree. Anything else you guys want to talk about, the nuggets of infinite banking? Or we're using the word infinite banking, but really it's just a word to say overfund life insurance. Utilize it as a multi-dimensional asset. It's not an investment. It's a better place to store capital. And as at the foundation, our thesis is it should enhance your ability to live more intentionally and get your goals. And if it can't, there's nothing magical about it. So if it can't, then don't do it. Buy term. At least be protected. But for majority of people that we see, it's way they can just be more efficient with it. And that's kind of the light bulb moment of like, okay, it makes sense.

Yeah. One thing I would say is what I found over the years of being an insurance agent and having our own policies is the different circles of people and how they refer to this product. For people who don't know about being able to use a cash value from a life insurance, we have to call it infinite banking, or we have to call it overfunded life insurance. We have to give it a name or title. But when there are people out there that have access to more money or have higher net worths, they just call it insurance. Just call it life insurance, because their default is already preset to what this product can do for them while they're living versus having something for them after they pass and they put it on the shelf and wait for it.

So I think the basis of our conversation, I want people to understand is to keep it simple and realize that it's a journey, and on that journey you start learning so many things about yourself and the opportunities around you, to where if we keep it simple, we can get started. The sooner we get started, the better off we'll be.

Yeah. And to add to that, I think with this whole concept of infinite banking, sometimes we're even hesitant really at this point in the game to even just say we're infinite banking, you know, because we feel like sometimes people misunderstand the term. It actually comes from conversations with you. "Don't say that. Don't say that." And not only do people misunderstand the term, but also from marketing, we find that sometimes, you know, in the industry, you can slap lipstick on a pig and call it infinite banking, and then you have clients thinking that they have these designed policies for banking and it's not.

And so we find that more and more these days where people are using all different types of insurance products and calling what they're doing infinite banking, and we don't necessarily agree with some of the products that are out there to apply this concept to. So what I would say is if you're thinking about entering this journey and educating yourself, then make sure you understand the products that actually should be associated with this process. Because we've even had family members that could have lost their entire insurance policy after having it for 20, 30, 40, 50 years, you know, and would have had nothing to provide their families at the time of their passing. So it's really, really important to make sure, like we said, not only for you to foundationally understand healthy financial habits, but then also understand the products and services that you're looking into and the ones that you're thinking about buying.

Mhm. It's really tough to think about this, but it's true. It's like all the benefits that have come with your YouTube channel and me writing a book and all that stuff is awesome. But we also know that there are people using your videos and my book and selling something that you and I wouldn't even want to be associated with. Associated with. And I think it's so difficult. I have so much empathy for the people out there that are creating brands because it's so difficult.

And that's the hope is like, please use your common sense. Please really ask questions. Make sure you understand something. And again, answer the question with whatever you're doing: is it helping me get closer to where I need to go? And what are the mosquitoes? What are the potential problems that could be a part of this scenario? And if you start asking those questions and get a defensive answer, just use your common sense. That's what I'll say.

Else you want to say? Like, I appreciate, and that's all I can say is like, I know people that are using my book and I'm like, I can't stop it, I don't think, like, you know. And so overall I want to say, if you ever thought about the ripple effect that you guys have had, it's unbelievable. It's unbelievable. Like, families and next generations are going to be better off. And so, like, obviously that's what we need to focus on. But...

...there with with any good, there's always a little bit of bad that comes along with it. Yeah, absolutely. And I think that's the main thing that we always say, and even with our team, like, you know, when people come our way and they say, "Oh, I want this," we're like, "Well, we wouldn't buy this, so you won't buy it from us. Thank you, but we appreciate you." But again, we have to stick to our values of just making sure that we're setting our clients up with the best opportunity and what we would want as from ourselves, right?

And one thing we also try to do is we don't talk about anything that we haven't done ourselves. And reason being is when you can come from a different standpoint of how an action made you feel, you can connect with somebody differently on an emotional level. Because money, good point, money doesn't have an emotion. We bring the emotion to money. That's why we react different ways and do things as a result of it. And when we can have a conversation as two human beings about a product or service that shouldn't have an emotion to, we're able to connect differently.

So that's one of the reasons why we don't talk about something that we wouldn't buy ourselves or haven't bought ourselves or haven't applied ourselves, because there's a connection that you need to have with the person that you're working with. Yeah. And that's our agent, that's us, that's anybody. And also too, to Caleb, you know, sending love your way. That's one reason why we love and respect you so much, is because game recognizes game. You know, we understand, like the minute we met, we were like, "Yep, yeah. Yeah, we good." You know, because it's just you get it.

Obviously, you've applied the knowledge and you're just trying to share the same vision that we have as well. So at the end of the day, people who aren't applying this process, it's obvious and it comes to the surface, and we want to just continue to rep your brand and support you in any way that we can, because we know that you're just trying to serve the same way we are. Amazing.

Last question: biggest mistakes you're seeing people make. Maybe it's your own clients or overall biggest mistakes you're seeing people make in this space as it relates to having life insurance be that foundational asset, using it throughout their life. For all the success stories are also some horror stories, and is there any parting wisdom, value bombs that you can drop?

I think going back to plugging the holes in your boat, plug the holes in your boat before you start a life insurance policy. And the only reason being is because it's going to open more holes, more opportunities. And if you don't have those healthy financial habits in place, this could over complicate things. And you even talked about this before, Caleb, where people get a policy and they think, "Oh, it's going to save everything." But if you don't have those financial habits in place, it's just going to make it worse. Make it worse. It can.

So we always say be patient. You know, everyone loves the content that you have. They love your book. They love your podcast. They love seeing our videos. But if you're not ready for it, don't rush the process. Get clean house first. And everyone will be here to serve when you're ready. Yeah, I 100% agree.

Because when situations like that happen, then you start looking at the insurance product as a liability and not an asset. You start looking at it as an expense instead of something that could help you. And when you feel all those holes starting to add up in your boat and your boat sinking, the first thing you want to throw overboard is your life insurance policy, when that's the last thing you should be throwing overboard because of how much value it gains over time and protection for your family, right? What we need to be thinking about is eternally, or the person in the mirror and how our decisions have led us to a certain position and how we can fix those problems before we start adding other tools to our repertoire. Yep.

I think one of the biggest mistakes I see people making is they want to act so fast. They want to like, when's the fastest I can take a loan? And anytime I hear that I go, "Oh boy, this is, you might just want to pay cash for that." And then the other thing is being overleveraged and not valuing emergency, not valuing margin in your account. And the only reason I say that is, one of my favorite books is The Psychology of Money. Oh yeah, love that book. And they talk about the rate of return of 0%, and that concept is really profound when you think about it.

If I, and we'll take life insurance out of it, I have $10,000 in a checking account. Yes. And it's like you could look at that with inflation 8.5%, whatever, and it's like, okay, but my money, it's like it's getting me a greater rate of return because of all the other things that are happening in my life. And maybe that money sitting in a checking account is allowing me to go to a mastermind or maybe double down on an investment or buy a call option. And as a result, this money is not earning any rate of return, but it's because I have this money that I'm able to say yes to other things.

And I'm sharing this example because a checking account, like you could easily make this work in a checking account, but what if there were better ways? What if there were even more efficient ways to do that? And I think there's just some wisdom. And like when I heard this person articulate it, not from a life insurance lens, I was like, I love that. And that's one thing I've been trying to communicate.

It's like I work with entrepreneurs and investors that I have so much respect for. The one thing I disagree with is they think if they have any liquidity, it's just burning a hole in their pocket. And usually what happens, because I've been around a long enough, not that long, but I've been along long enough to see like people that had a lot of success, they can also crash. And if you don't have any

Margin or backup, it can be a really it can be a really sucky fall. I'll just say that. It's so true. And like you said, it just goes back to the building blocks and how we apply this whole thing from just the basic financial knowledge to when you get to that make it level, right? And how to continue keeping your money flowing, because we too have seen mentors and people who we idolize come crashing down and we go, "Wait a second." Yeah. What happened?

So it is, it's very, very important that along this journey you continue to educate yourself, you continue to understand what's going on, because what we've just seen with COVID, right, that flipped everybody's business and everything on its head and everyone had to pivot and try to figure out how to make ends meet, how to make our businesses more powerful, how to leverage, whatever the case may be. So this is one of those things that you can't get comfortable with. You have to continue to challenge yourself.

Guys, I'm so incredibly grateful for both of you. Please, if you're watching till the end, please go take time, subscribe to the Wealth Nation. I'll make sure to have links down below. Is there anything else that you guys want to plug in the world that you guys are up to? And I just appreciate the content that you're creating. What I love is it's not just product centric. It's you're talking about a lot of things that matter, a lot of habits, a lot of money mindset. And I just think people's financial literacy and IQ will increase if they're watching your videos.

Thank you. Thank you so Well, I'd say one shameless plug that we'd like to share. We are building a membership community and we're really excited about it because what we know is with this journey, sometimes you just need a friend, you just need to talk to somebody or you need engagement. So if you guys are definitely interested in checking out our community, click on the link that's in the description. We'd love to share it with you and serve and just share, because what we understood from ourselves as clients, our own clients, is what do we do with this policy? What's the best investment opportunity? What should I do? And sometimes it's just nice to have a conversation with other like-minded people.

Yeah. In any community to that matter that you can have a conversation with like-minded people, because it goes so far. Even the conversations we're able to have together, it does so much for us to as an outlet, because I feel like sometimes we have so much pent up ideas and and maybe even advice that there's some people that we can't share it with because it could possibly go over their head and overwhelm them. So we keep it amongst ourselves, and I don't think that's healthy either.

Yeah. Like you said, what did you say, Caleb? You said measure the rate of return of stress. We got to like create a project around that to figure out what that is. That's powerful. Yeah, it is. And it's just one of those things where we got to start making, we got to start getting people to start thinking differently, because that is going to be the true change, and that's one thing that you guys have gotten from the very beginning.

So check out the links down below. And please share this with people that would benefit from hearing us jabber about in-depth policy concepts and infinite banking. I really appreciate you guys taking time to go do a deep dive with me. Appreciate our friendship and look forward to what the future holds. Absolutely. Thank you. Thank you, Caleb, so much for the invite.