Can Life Insurance and Real Estate Pay You $120,000 a Year?

I don't believe in the idea of retirement. I need an income stream that's going to last my entire life. It's going to eliminate taxes. We've got to have a way to deal with any volatility or risk inside of owning these assets. Now, you can make whatever numbers you want. So, these are the three calculations that anyone has to have to be able to use the system that I'm about to use. I get someone, they're like, "Hey, I want $120,000, $10,000 a month of net spendable retirement income," right? That's the objective.

>> Ryan D. Lee lost everything in 2008 following the traditional financial playbook. >> Now, a financial strategist, co-founder of Wealth Outside Wall Street, >> author of Retire in 10 Years or Less, >> he built his own system using life insurance and real estate. >> And now helps thousands retire in 10 years or less.

>> There are two games of money and they're going on in parallel in our economy right now. You get to choose which game you play. Then in the dependency economy, I trade my time for money. I save what little money I can into mutual funds, 401(k)s, whatever. Everything in the economy is now working against me. Taxes are working against me. Inflation is definitely working against me. Time is working against me. Market volatility is working against me. It's a game of time and I only find out if I won the game after I traded 30, 40 years.

>> The beautiful thing is, like, leverage allows you to jump-start this thing and yet you're not using crazy assumptions. >> So, all investing is just future income, the future spending. Financial guys, consumers, people out there, we missed the mark and we're always arguing about this is better than that. Who cares? How do I generate the most effective and efficient stream of income? And that's really what we'll dive into today.

>> Ryan Lee, welcome to the BetterWealth Show. >> My man, Caleb, I love it. I'm so grateful to be here. You know, I've been doing a lot of podcasts lately, but honestly, I was a little bit like, I had some butterflies in my stomach coming on the show today, Caleb. You've created a phenomenal community, a phenomenal culture, and it's an honor to be here with you today.

>> The phenomenal culture keeps me humble every day. You know, we have very smart people that listen, watch this, and will keep us in check. You wrote a book called Retire in 10 Years or Less. Love this, and we're going to dive into the playbook on how you can retire in 10 years or less using life insurance, real estate. I know you got lots of crazy things. You told me I'm going to stir the pot. I'm going to stir the pot and you gave me permission to push back. So, let's jump in, man.

For those of you that don't know who Ryan is, good good friend of mine. I actually learned from him when I first got into the business. Would watch your videos. The concept of the AND Asset very much came from you and Todd Langford. I know that, like many of this stuff, we're just learning from other people, but that's the credit to you and Todd for just articulating in such a way that the 21-year-old Caleb, it really like I really grasped it and it became the brand and the foundation that we've built here at BetterWealth.

And so, it's always fun to have you on. And your book, dude, congrats on the success it's already had and we're only getting started. So, love love love for you to be on here, and also I know that you got some things to share. We're going to roll up our sleeves and really go into a 2.0 or 3.0 master class when it comes to generating cash flow from other assets.

>> Man, I love that. You know, here's the frame. Let's set this frame to start off with, okay? Because I really do believe, and I think you say this all the time, you know, what is all investing? Why would I forego spending money today? Like, why not just go on all the vacations, buy all the shoes, whatever I want to spend my money, why not do it today? So, all investing is just future income. It's future spending. That's all it is.

And so, I think oftentimes we, you know, financial guys, consumers, people out there, we miss the mark and we're always arguing about this is better than that. Who cares? Who cares? Like at the end of the day, let's just skip right to the end. Let's talk about how do I generate the most effective and efficient stream of income. And that's really what we'll dive into today. The book that you've got there, it is a playbook and the culmination of the playbook is the concept of retiring in 10 years or less.

And Caleb, I do want to throw this out there for your audience cuz I think your audience has a little bit different mindset than probably the general broader public. I don't believe in the idea of retirements. Like, I don't believe in the idea of stopping. >> I hate the word retire. >> Totally. >> But people, that resonates with people. >> That's why we put it in there. I'm trying to meet people where they're at because they understand the idea, the concept, the dream, the wish of retiring.

And my objective throughout this book is to remove the constraints of money so they start living a more purpose-driven life and they build a life that they don't want to retire from. And maybe that has to do with work, maybe it doesn't, but I don't love the idea of retirement cuz I think it lulls people to sleep and they think they retire from their life and they sail off into the sunset. That never works.

>> Yeah, I love that disclaimer. I was going to say that right off the bat, but you know, I'm like, let's start off with no confrontation in the first minute. >> Bring it, Caleb. Put those gloves on. Let's go. Cool. Well, how do you want to dive into this? You want to just dive right in? >> I think we dive right in. One thing I've always admired about you is you have frameworks. You really put intention in how you educate. And so let's dive into that and then I will color commentate, push back, and very very grateful for you to give this premium content to our audience. >> Heck yeah. All right. But before, I did prep a little things, we're going to kind of draw on this.

I'm going to put some math out there, some numbers out there. A lot of this has been done, pre-done in this book. And so a lot of it's been researched out. So we won't... Unless you want the sources, they're all in the book. But here's what I want to start off with. And this is very important for me.

Caleb, you've known me for a long time. And I didn't stumble into this world with the intention of selling life insurance or doing real estate. I stumbled into this world because I was stuck with money. I didn't know how to use money and I had to over time raise my financial intelligence to learn what I'm about to share with you today.

And it's really kind of funny, Caleb. You know, when I walked away from my corporate job, I'm going to "quotation mark" this, financially free, about 12, 13 years ago. I walked away. I didn't know what I was walking into. I just was walking away from pain. I didn't know what the next stage of my life was going to be.

And it was funny, the very first thing I tried to do is sit down and write a book. And I got like two sentences into it. I'm like, "Dude, I have no idea how I did this. Maybe I'm just going to carbon copy Robert Allen or Robert Kiyosaki." And so what I'm about to share with you has come from a decade of learning. And it's not just with me. I've worked with, like you, thousands of clients and we have a very definitive framework that we work within.

So we're going to set the framework of what winning means. I think this is oftentimes not done in a financial plan. It's just more, I need more money, more wealth, more in my portfolio. Financial freedom in 10 years or less. That is the measurement of success. So anything that's not going to meet that criteria, it might be good. You might have a good rate of return. You might end up with more money in a 401k.

But we're just going to go right to the point. Like if I came to you, Caleb, and I did ask you this question on our book launch summit and said, "Dude, you've got 10 years starting from scratch. If you can only work, earn, save, and invest for 10 years and after 10 years you can never work for money again, how would you do it?" That's the frame that we're going to work under. You good with that?

>> Yeah, I love that frame and there's something really powerful about giving yourself a constraint, because if you do that, of course you're going to create value beyond 10 years. But if you can accomplish what you've wrote about and what you're going to share with us, if you can actually accomplish that, imagine your life after 10 years. And then it's powerful. I'm on board. A little bit skeptical, but I'm on board. So let's dive in.

>> Well, let's banter about it for just a minute, cuz I think this is fascinating. Dude, I asked no less than 50 people that came in, interviewed for the book launch summit. And then obviously I've asked lots of clients this question. So what would you do? Like let's imagine this isn't a hypothetical, like this is a real scenario. How would someone generate an income stream for life? What would be some of the threats to that income stream? And like legit, what are some of the things that we have to consider as we go into this strategy?

>> Right. So the frame that I have is that you make money and then money can only do two things. It can be consumed or it can be saved. And then with that savings, I see that as like oxygen, as fuel to go somewhere, whether it's fueling increasing your earning potential or fueling other cash flow engines, assets to hopefully produce their own cash flow. So what I would do is I would try to figure out, okay, if I have 10 years, how can I provide as much value actively as possible? So I'm trying to actively provide as much value as possible. I'm going to reduce my spending and consumption as little as possible.

I talked to someone recently who knew my, like, was talking to me before I started BetterWealth, and he was like, "Yeah, when you were first talking about BetterWealth, I didn't really catch the vision. It's been cool to see where you've grown." And I reflected and I was like, "You know, the secret was I just didn't spend any money the first 3 years of business." Like we weren't that successful, but I didn't spend much money, so we stayed in business. So I would consume as little as possible and then with the money that I was saving, I would ask the question, what would be the better bet? Reinvesting this to create more active cash flow or deploying that into assets that can produce cash flow.

And I would think through from a cash flow perspective, but I would also think through on risk management from a standpoint of like, if I'm to take a risk and it's equal, I'm going to bet on myself versus something that I'm not tied to. But businesses can be a lot more risky than other assets depending on how they're done. So the tough thing about 10 years is after 10 years, the active side is gone. So the active needs to either be sellable or over 10 years you got to build up a foundation and then you got to start deploying more money into those passive assets.

And so that's for me how I'm thinking and then it just is like, "Okay, every year you're kind of looking at where's the best rate of return." Because if you're only earning $50,000 a year and you can figure out a way to earn 300 but maintain your standard of living, you by default are just going to have so much more advantage. And so that would be my approach. But that's, I don't want to steal the thunder. That's just how I think when it comes to frameworks. I'm not sure how that aligns with our interview that we did for your summit, but hopefully it's somewhat consistent with what I said a couple months ago.

>> Totally. I mean, and that's always the best investment is your ability

to create value, solve problems, and make money. So, I never want to take away from that, right? Making money is the key. And the crazy part about what we're about to solve is we've got to make enough, we've got to keep enough, and we've got to convert whatever we've kept into a stream of income that will last a lifetime.

So, before I open up this presentation, we're going to go into it and we're going to go step by step. Let's now put ourselves on the precipice, okay? And this is a scary thing. I mean, you work with a lot of people that legit are moving into retirement. And you know, although I've never fully retired and lived off of my income into perpetu... off of my passive income into perpetuity, you know, I imagine and I can see and I understand the risks that we're facing. Like, what are some of the risks you think that we're actually facing when we step into the void and say, "Okay, my assets have to produce income for the rest of my life, right?"

>> Longevity, taxes, and then volatility would be like the three things. And really it's like how long am I going to live? If I knew that, it's a lot easier to back into certain things. Volatility, a lot of people are planning with assets that can go up and down and that creates tough... That creates a lot of constraints and friction on just what your ability to spend. And then volatility and other would just be risk. It's like I heard this once and it was like really stuck with me. Minimize and diversify. So minimize your risk by, you know, doing your due diligence, but then ultimately diversify as well and those are like the two levers. You'll never be able to have a risk-free portfolio, but if you can do your due diligence and diversify, those are like the two D's that will help you create downside protection. So those are just a couple things I rattled off of that just to be aware of.

>> Okay. So we've got to solve in what we're about to go through. We've got to solve exactly as you mentioned. We've got to solve for lifespan and that's the one unknown variable. I hope I live forever, but I don't want to live forever broke. Right? So lifespan, taxes, that's a major, major liability that I think a lot of people have under accounted for as they move forward. And then risk, right? So I mean the risk profile of where our money's at. Do we lose money if we double compound by taking money out in a loss year? That just messes all of the math up.

>> Right. And if I put money into a real estate property and it's producing 20% cash on cash cash flow, that's great. Assuming the real estate property doesn't go down. And if it goes down, boom, not only do I lose that cash flow, but I lose that percentage of my portfolio. And so the risk side is the thing that I think about especially when it comes to alternative assets because they can on average produce more cash flow, but I've also seen more people lose money in certain alternative assets. So that's my bias. Just straight up is like, how safe are these, you know, assets.

>> Cool. All right, my man. Let's get into it then. This is going to be super fun, dude, cuz we've done so much research on this both not just like academic but like legit real research in practical experience. So, the frame that we're playing, we're going to be retired in 10 years or less. Now, I'm going to bring to the equation, I'm going to assume that you followed a plan where you've put the majority, if not all, of your capital. And I know this is like the... like people get crazy when I say this. You put all of your money into overfunded whole life insurance policies and you've bought a certain amount of simple single-family homes that are all done turnkey. That's the assumption that we're making. Now, you might have some money elsewhere, but I'm just going to show you how to convert those two assets into a six-figure stream of tax-free income for the rest of your life. You ready for that?

>> Life insurance and real estate equals >> 10 years or less being financially free. >> Yeah, it equals amazing. That's what we're going to define it as.

>> My producer just told me something wild. Over 70% of you watching right now haven't subscribed to the channel. So, whether you're brand new or one of our long-time viewers, if any of our videos have helped you see things differently or provided value to you in any way, I would love for you to subscribe as we're trying to reach 100,000 subscribers by the end of 2026. We've got some incredible guests and conversations planned for 2026. I don't want you to miss them. I'm so grateful for each and every one of you who support this channel and I'm excited to continue this journey with you.

>> Now, I'm going to roll through this with you. So, I call what we're about to go through, I call it the equity mill. And I'm going to kind of set the frame here for you and this is going to be a fun conversation because, honestly, when I read Robert Kiyosaki's little purple book and his like savers are losers and then go buy real estate, and then I read Robert Allen's book Creating Wealth and he said just buy 20 single-family homes, I did it. I did it. I did all of that. But I misunderstood what I was actually doing. I didn't understand the full picture.

So, we're going to go through the full picture right now because the objective is, like just like you mentioned with risk, like I need an income stream that's going to last my entire life. It's going to eliminate taxes and even though I don't have it in here, we've got to have a way to deal with any volatility or risk in time inside of owning these assets, yeah? Yes. Okay. Here's the math, okay? And let's use... I'm going to just use simple numbers on this. Now you can make whatever numbers you want.

So these are the three calculations that anyone has to have to be able to use the system that I'm about to use with you. So let's say I get someone, they're like, "Hey, I want $120,000, $10,000 a month of net spendable retirement income." Right? That's the objective, okay? So if that's true, if this is our goal, then we need to have 5 years of whatever our desired spending is in accumulated cash value. Non-leveraged accumulated cash value. So Caleb, what's $120,000

multiplied by five?

>> Times five is 600,000. 600,000.

>> Now get this calculator ready, too, okay? So 600,000. So now I know I've got to have one or two or three life insurance policies with a total accumulation of $600,000 of cash value. That's where all of my savings has to go, okay? Now the next thing that I need, and I want you to think about this kind of like peanut butter and jam, right? You know, the best combination, peanut butter by itself decent, jam by itself decent, peanut butter and jam the best, right? So the vault's going to be our peanut butter and turnkey real estate is going to be our jam.

So now I'm going to tell you, "Okay, cool. You're going to take your desired income." So take the $120,000 divided by 5%, and you'll see where this math comes from here in just a minute. What's that?

>> 2.4.

>> I need a real estate portfolio valued, not with equity, but valued at $2.4 million, okay? Now let's assume I'm buying somewhere in the Midwest, right? Asset values out there in decent B neighborhoods are between 150 on the low end, 250 kind of is a little bit of the higher end. So let's just go right there in the middle. Let's say I'm going to buy properties at about $200,000 a pop, okay? So, if that's true, take 2.4 million divided by 200,000.

>> We got 12 properties.

>> Okay, so all right. Now, this is the game, man. This is crazy. So, how am I going to convert $600,000 of cash value, a portfolio valued at 2.4 million with 12 single family homes inside of that? How do I convert that into this, $120,000 of tax-free income for the rest of my life? You're all on with me on that?

>> I'm tracking.

>> Okay, so I'm going to call this the equity mill. Now, I want you to understand, or I want you to conceptualize, what the heck is milling inside of refineries. Like let's take coal, right? Coal has to be extracted from the earth. It goes to a refinery and it's re-produced, it's re-processed into a usable form that can now be used in cars, airplanes, things like that. So, we're going to use the same concept. How do I refine the profit centers within my investments, in this case life insurance, and single family homes, okay?

So, we're going to use this concept called the equity mill. And the goal of this is I want to own assets, I want to let inflation automatically grow my asset value, and we'll kind of prove this out here in just a minute, and then I want to harvest the equity, not the cash flow, harvest the equity for tax-free income, okay? So, that's the premise of this. So, let's talk about life insurance first, right? And I think this, I obviously misunderstood. I think many people do. I'm super grateful I got into the concept of infinite banking, overfunded whole life insurance policies. But like if we really think about the value of a whole life insurance policy, what is the actual value of the policy?

>> The cash value side and all the other living benefits tied to it.

>> Yeah, I mean, really the value is the death benefit. That's the market value of a life insurance policy. That's what we're buying, right? And then everything underneath that, it's, you know, all-encompassing in the cash value, that's the equity. So, our cash value is the equity inside of a death benefit. And what do we know about a whole life insurance policy is over time, the cash value is going to equal the death benefit. It's just going to systematically grow year over year until the policy matures and the equity equals the value, yes?

>> Yeah, correct.

>> Okay, so now let's go to real estate. Let's go to real estate, because again, I misunderstood this completely. Like let's talk about this really quick, cuz real estate's a really dynamic asset class. If I own a turnkey piece of property, what are the profit centers inside of the turnkey piece of property?

>> The profit centers would be the, well, I would say it would be appreciation, the cash flow, and the tax benefits. I wouldn't say that using leverage to acquire it is a profit center, but it's a potential advantage to real estate.

>> Yeah, it's a multiplier, right? I mean, if I'm going to use leverage, that means I can acquire the assets with less money down. And I'm going to argue that leverage is actually the key to this entire system, which we'll talk about here in just a minute, but you're totally right. And when I was buying real estate, I was like, "Okay, cool. I've got to have assets that generate cash flow." And I'll be honest, the first property that I bought way back in the day, it generated like $300 in cash flow and I was like, "Cool, this is phenomenal. It's paying my car payment." But now, you know, if I'm buying properties that generate, you know, let's just say today $200 in cash flow, that's decent. But if I want $10,000 a month in net spendable income, if I divide that by 200, you know, $200 in cash flow, that's 50 properties.

>> Yeah.

>> And that's assuming all 50 properties give me my full rent every single month. So, I probably have to have 75 properties to net $10,000 a month in cash flow, yes?

>> Yeah, correct.

>> So, now we're right back to Robert Kiyosaki's original premise, savers are losers. I probably can't save enough money to put enough down payments to buy 75 properties, yeah? So, let's actually look at this. If I bought a $200,000 property, okay, I just bought it and held it, $200,000 property, and, you know, it was cash flow positive, I had 30% of the total cash flow going to cover vacancy and make readies, and my rent increased, I put on average by 2%, and I just held this thing for 10 years. Now, to buy this property, I'm going to have to put in about $40,000 plus closing costs. That's what I'm putting in.

And if I just look at this from my net cash collected, like if I just look at real estate from a cash on cash and an internal rate of return perspective, I'm like, this sucks, man. I collected $20,000 of cash over 10 years. Okay? My average cash collected per year, with the low years in the beginning and slowly raising my rent over time over 10 years, is about $2,000 per year. My annualized ROI is 5%, but my IRR, I haven't even got all my money back that I put into

The equation, right? My IRR on my cash on cash return is still negative. It's negative 10.9%. This is why it's easy to argue against real estate when compared to just about anything else, cuz I look at that, I'm like, what the crap, man? I mean, I don't even have my money back yet, yeah? But what's actually happened? I've owned the asset, I've held the asset, and time, because of the economic conditions that we live in today, time's just working for me, right?

And so, over time, if I own and hold that asset, and we've seen this, I know you've seen this in Tennessee, and I'll actually justify this here in just a minute, the purchase price, I'm not going to say the value, but I'm going to say the purchase price of that house went from $200,000 10 years ago, that same house would cost me about $299,000 10 years from now, or today. Now, over this period of time, I would have had tenants in this property, and I did include a 30% vacancy inside of this. So, if I had my property occupied, excuse me, 20% vacancy. So, if I had my property 80% of the time, tenants would have amortized my debts, and even if they didn't amortize it, I'm amortizing it. My debt got amortized one way or the other by 20,000 bucks.

So, check that out. I mean, I amortized my debt just by as much cash flow as I collected. I collected 20,000 in cash flow, and my debt was amortized by 20,000. So, now if I look at this, my total mortgage on the property after amortizing it by, you know, 20,000 is, let's see, I don't have the total mortgage listed here, but I have equity of $182,000 in this property. My annualized ROI, because I only put a 20% down, my tenants paid down my mortgage, and my property appreciated, is 40%. My IRR on just owning the asset is 19%. Right.

>> Yeah, I'm tracking so far. Yeah, so there's the cash flow collected, and then there's the equity, and you have to look at both of those, and it, yeah, so I'm tracking so far.

>> Okay. This is where it's going to get bonkers. Now, a lot of people, you know, they misunderstand the asset that they own, right? 12% of their comprehensive return came from cash flow. 88% of their return came from owning the asset and letting time make them wealthy with amortization, inflation driving up the cost of the real estate, and the equity that's generated because of that.

>> Mhm.

>> Right? So, if that's all true, and let's just justify this out, right? I mean, we can look back over the compound annual growth rate of real estate, you know, from the beginning of 1965 all the way to today in 2026, the average is 5.4%, right? And, you know, 2020 time it went nuts-o bonkers crazy, but the average is if I just own an asset and hold it, by default, the purchase price, not the value, but the purchase price of the property is going to go up by 5.4% every single year.

And here's a property that I own. This property is in Indianapolis, so nothing crazy special. I've owned this property now for about 8 years, but this property was built back in 1950s, okay? So, let's just look at the history of just this one property. So, if we go all the way back to 1950, from 1950 to 1960, if I just bought and held the property, right? The property went from $7,000, man. That's how much this property sold for back in the 1950s, and 10 years later, I'd buy the same property for 12,000. So, a 71% increase in the price of real estate over a 10-year period of time.

Okay? And if we go from 1960 to 1970, $12,000 to $17,000, 42% increase in the price of the real estate. From 1970 to 1980, $17,000 to $47,000. That's a 176% increase, and this isn't, I'm going to take just a moment. I want to have a dialogue about this part right here. Just owning the assets, it went up by 176%, the price of the property. Now, we, the two of us know, and I'm sure a lot of the listeners of your channel know, in 1971, I love the way Kiyosaki puts this, the game of money changed. The rules of the game of money changed. So, what happened in 1971, Caleb?

>> Let's just say gold was the topic of conversation there.

>> Yeah. So, you're exactly right. I mean, back in the day, our monetary policy to inject more currency into the marketplace, it required a tangible, you know, asset, gold, to back that dollar. And so, like, look, we live in a world today where it's easy to say savers are losers, but that's a really controversial thing, right? I mean, I remember when I read Kiyosaki's book, dude, I legit thought he was crazy because I've always been a good saver like you. Like I was born saving. I have no problem saving. That's not hard for me. But it wasn't until I fully understood what I'm about to share with you here. In 1950, 1960, 1970, and even through the beginning part of the '80s for a different reason, savers were actually winners.

>> Mhm.

>> You could save your way to retirement, right? People weren't living quite as long, but the primary reason was the dollar maintained its value. I could save a dollar, get a decent interest rate, and the cost of living was such that I knew that I could live off of that interest rate cuz the cost of living wasn't going crazy. In 1971 when we went off the gold standard, if we just look at this tracking of inflation, you know, up until the year 2000, it wasn't crazy. It wasn't amazing, but it wasn't crazy. And also, in 1971 or 1981, companies stopped doing pensions and money just flooded into the market. So, if you had money in the market, you could millionaire your, what is that? The Millionaire Next Door your way to retirement.

>> Mhm.

>> But in 2000, you can kind of see what's happened since this. Beginning in 2000 all the way to today, the monetary supply, the amount of money floating around in our economy, has gone up by 375%, Caleb.

>> That's nuts. Like that is, by definition, I cannot outwork the rate at which the government is injecting new currency into the marketplace. I just, it's not possible. I can't do it. I'm fighting a losing battle, especially if I'm talking about 10 years or less.

>> Yeah. I'm with you. And you articulated the problem, I think, very very well. And so,

Thank you for even showing this graph, cuz I think it really illustrates the savers are losers concept. And yeah, if you're saving, you're losing to inflation, your little dollars are getting less valuable every year.

>> Yeah, I mean, I don't morally agree with the economic system that we're born into. It infuriates me, man. Especially when you know as much as you and I know, we've gone down the rabbit hole, we know what the Federal Reserve is, we know how that was created. So, I mean, it was a really dark season in my life when I learned what I learned, because I realized that we are in a system designed to keep us trapped. It is designed to oppress people with monetary choices or with monetary policy that we don't get a vote in.

We do not get to choose the monetary policy that our government implements. They are printing, again, $40 billion, starting in December of last year, per month right now. They're just printing that. It's the only way the system can survive. So, we could go down that rabbit hole as deep as we want to go, but let's just go back to our holding assets.

If we go from 1980 to 1990, the average purchase price of that same single-family home went from 47 to 79, a 68% increase. From 1990 to 2000, 79 to 119,000, a 51% increase. From 2000 to 2010, this includes 2008, purchase prices went from 119 to 222. There was a dip, not across the board, but in some locations, but it still cost 87% more to buy the same asset. Why? It's not any more valuable. It's just because there's more money floating around in the economy.

And then I just lumped the last 15 years together. From 2010 to 2025, it went from 222,000 to 495. So, you're seeing the theme here, right?

>> Yes.

>> So, if we're seeing this theme, I'm going to put Jerome Powell up here, right? He's just cranking the printing press. Boom, boom, boom, printing out money. But here's the thing we got to consider. So, the red line here is the increase in monetary supply. The blue line is the increase in the cost of real estate.

Now, for our podcast listeners, what are these two lines doing? They're following light and bright and parallel with each other, right? They're the same line, pretty much. I mean, money supply goes up, cost of houses goes up. Money supply goes up, cost of houses go up, right? And interest rates might have something to do with affordability. I get that, we can have a discussion on interest rates, but at the end of the day, the primary driver of the system that is oppressing most people today is the money supply.

So, now that we've established the problem, let's come back to the solution. The solution really is, and this is the wealthy secret to converting equity into income, okay? And this is, Caleb, I have experienced this in my own life. We've now helped several clients do this. It's going to blow your gosh dang mind. I'm so excited to share it with you, okay?

Now, I got this, again, Kiyosaki has such a way. He's so freaking good at taking complex subjects and breaking them down into bite-size deliverable pieces. And I remember when I read his book, Why the Rich Are Getting Richer. Like, that book, I love, I mean, Rich Dad Poor Dad opened the doorway to a new thinking around money.

>> For me.

>> Yeah. Why the Rich Are Getting Richer helped me see the game. I was winning the game of money and I didn't understand why. I mean, things were working for me. Everything was working in the right direction, but I didn't fully understand why until I read that book.

And let me break it down for you, cuz now we're going to go back to the fundamental reason why all of us are saving. We want income. Depending on where we put our money will determine how much we get back, primarily driven by taxes. Okay, so the first thing is we can be taxed on earned income. Now, you and I know this game really well, right? We put money in a 401k. We don't pay taxes at the highest possible tax rate because it's earned income tax rates today, and we shift the liability tomorrow and we're told it's okay, you're going to retire in a lower tax bracket. And that might be true. I don't know. But earned income is progressively the highest tax bracket that we can retire in, yeah?

>> Yes.

>> If I get a little bit smarter, right? If I get a little bit smarter, maybe I shift some of my money into portfolio income. And this is where I'm taxed as a capital gain, and depending on how long I've owned the asset, my taxes kind of get capped, they don't progressively climb a higher, higher ladder there. And so I can either be taxed as ordinary income or capital gains. And that's basically the game that 99.9% of the people play in.

But there's this thing, okay? And there's no page in the tax book, in the tax code, that says what we're about to talk about. But there's this thing, and it was opened up in Why the Rich Are Getting Richer. He called it phantom income. And I'm like, what the crap is that? That sounds scary and exciting. I got to know, right? But phantom income, this is when I understand how the game works at the highest level, because if we really understand it, in 1971, our money became debt, right? We used to be a store of value, but today it's debt.

And the rich, the wealthy, they've just understood how to use the economic system that is oppressing most people to their advantage. So we're going to talk about phantom income, which is borrowing against appreciating assets. Okay? And so what we're going to talk about now is how to convert assets into income without ever selling the asset. If we sell the asset, we trigger capital gains, right? If we don't sell the asset and we borrow against it, now we get a whole new game to play.

And so with life insurance and real estate, what are our profit centers? And let's talk about these cuz this is phenomenal, man. Appreciation, right? That's the purchase price of real estate going up. Amortization, that's the debt that I took from a bank and I'm paying it off, or someone's paying it off. And as the real estate goes up in value and my mortgage goes down, what do I have right here in the middle?

>> You have your equity.

>> Cool, right? Cool. That's great. Now, right now, the bank controls that equity. It's not

mine, right? The bank controls it and I want to try to control as much of that equity as I possibly can. And then on my cash flow, and we're not going to use too much of this, but it is relative to know, on the income, the positive rent that I'm collecting, I get to go to the government and say, "Hey, yeah, I got a couple thousand dollars in the bank, but look, I get to depreciate. I get to take a paper loss, so I'm not paying any taxes on my cash flow, either."

Now, Caleb, you and I, and man, every single time I talk about this, I get more excited about what we do. But what the heck? Like, we've got a policy here. This is essential storehouse for us to control, which we've already established the cash value is equity, right?

>> Correct.

>> And Caleb, I'm sure you've done this, right? You've taken policy loans before. How does that whole process work?

>> Yeah, I mean, it's easy as either calling the insurance company or going online and clicking a button or filling out a form or working with a third-party bank, which I do, and they make it even more easy to. It's almost like having a home equity loan on your house, but you have it on your insurance policy. And so it's been a pretty seamless process, at least in my experience.

>> Have you ever been denied for a policy loan?

>> I have not. No, I've not been denied.

>> Have you ever had to like sign up for automatic repayment schedule?

>> I have not. No.

>> You control the whole thing, right? And this is why people call it infinite banking, because you become the bank. And there's nuances to that statement that we can get into, but you know, for the sake of conversation, I now have a place that I could harvest equity, and I can do it tax-free. So let's talk about this. Now, I'm going to play this clip. I don't know if it's going to come through for you.

>> You're going to trigger me, but

>> to trigger something. Have you ever seen this clip before?

>> Maybe I think I know where you're going, but

>> Okay.

>> But yeah, like let's play this thing.

>> This is Senator Elizabeth Warren giving us the entire playbook of the wealthy. She knows it. She knows what the playbook is. She's trying to condemn it, but if we have ears to hear and eyes to see, the game of money just gets simplified in two simple statements. Here we go.

>> So I'll start with the first one, and that was the question about the wealth tax. Remember, let's look at someone like Jeff Bezos, who is worth a bazillion dollars. He has not paid taxes on all of that wealth. Don't describe it that way. In fact, Jeff Bezos many years has either paid nothing in taxes or he's paid about 1%. Why? Because his income is very, very small, but he continues to grow his wealth through all of his Amazon stock. And how does he then fund a lifestyle like he does? Not by cashing in Amazon stock, but by borrowing against it. Right now, we have a tax system

>> I love it. I love it. So, Caleb, like she just gave us the playbook. Let's actually look at this from a different angle. Like if Visa sent me a credit card today, I mean, I've been working super hard. I just launched the book. I've been traveling. I've been, you know, hotels. I'm so tired. Visa sends me a credit card today, right? And if I feel like, you know, hey, I've earned it, I deserve it. If I open up that credit card and it's got a $30,000 limit, and I go blow it. I go on vacations. I go buy shoes. I whatever. At the end of the month, if I get the statements and I've spent technically $30,000 more, but I don't have the money to pay it back, I've now mortgaged my future for consumption today, but I didn't have to claim the $30,000 as income, right?

>> Correct.

>> So now we're going to play the same game, but with assets now that are amortized on our behalf, but we're going to do the same thing because here's the thing that the wealthy know. Income is taxable, but debt used as income, it's not. So going back to this idea of a policy. This is why I wanted 5 years of my desired spending inside of cash value of my policy because I'm going to use policy loans as income. And in the income phase, my policy loans are private. They're non-reportable. They're not going to impact my debt-to-income ratio. There's no repayment schedule. And my death benefit technically is collateralizing the loan that I'm taking out from the insurance company. We good on that?

>> Yep. Yeah, I'm good so far.

>> Okay, here we go. Here we go. If I retired with those 20 or those 12 single family homes, if I bought all of those single family homes and I just held them, okay, I just held them, I would retire with about a portfolio valued at about 3.4 million dollars in equity. And, you know, we calculated in the beginning what I needed to have, but if I just held those properties and they compounded by 5.4% every single year, I own a portfolio valued at 3.4 million. I have debt on this portfolio of about 2.1 million 30-year fixed mortgages, and I've got a little bit of equity spread out over 12, in this case study, it's actually 14 properties. But I've got equity spread out over 14 properties, okay?

So, awesome. I'm never going to be financially free with that. If that's the only source of income that I've got, and all I'm going to use the cash flow for in this example is to keep me in the game of owning the assets. I'm not even going to consider how much cash flow these produce. I'm just going to assume every dollar goes to vacancy, make-ready, property management. I just want to own the assets.

>> Yeah.

>> Now, I've got a cash value in my policies of 650,000. And again, this case study was built in the book and they ended up with 650, but 650. And in year one, all I'm going to do is I'm just going to take a policy loan. Whether I take $10,000 a month, $30,000 a quarter, I'm going to take $120,000 of a policy loan, tax-free, non-reportable private loan. That's my income. I just straight up retired. If that was my only source of income, I don't even have to fill out a tax return, right? There's it's debt as income. I didn't technically

...earn any income that year. Okay, now in year two, this was showing you how convenient the policy loans are, but I think you and I know that. So, in year two, now what am I going to do? Well, I still earned a compound rate of return on my cash value, so my cash value went from because the debt, the loan came from the insurance company, not cash value. So, now my cash value is 682,000. I take another $120,000 policy loan. I let the interest from year one roll into year two. Now, combined between the two, I've got $246,000 of policy loans. Okay, you tracking with me on the math?

>> I'm tracking so far, yeah.

>> Okay, dude. This is blowing your mind. So, now what happened with my real estate? Well, it got a little bit more valuable, right? It went from 3.4 to 3.6. My debt is still 2.1. But now I've got a little bit more equity. 1.5. All I'm doing is owning the assets. So, if we just rolled this out for 5 years, okay? In year three, my cumulative cash value in my vault would be 716,000. I'll take another policy loan for 120,000. I have comprehensive policy loans outstanding, including just compounding my interest, of 378,000. I still have $338,000 of available cash value to borrow against. I have a real estate portfolio value of about 3.8 million now. I have debt of 2 million, and I have equity of 1.8.

And every single year, in year four, I do the same thing. In year five, I do the same thing. So, at the end of year five, I've now kind of run my vault dry, right? And I'm really considering my vault as a reservoir. I want my vault to be the reservoir of all my capital. I've run my reservoir dry. Right now, I'm in Utah, and right now it's snowing outside right now. The snow is going to melt, and it's going to fill up the reservoir. So, that's exactly what I have to do on my equity mill now.

At the end of year three, I've got $663,000 in policy loans, but here's the crazy part. I'm going to go back to the growth asset on my game, which is my real estate. It's now valued at 4.2 million. All I did is hold the assets. I have 2.3 million in equity because my tenants paid down my debt a little bit every single year, and the increase in the value of money, or not the value, but the amount of money drove up the price of my real estate, yeah?

>> Correct. I'm tracking so far.

>> Okay, my man. Here we go. This is the funnest part.

>> Just go back? So, you said in year one, you're assuming year one you have $650,000 in cash value.

>> Yeah.

>> So, is that the assumption? Obviously, most people watching this, year one they wouldn't be there. Are we, you assuming year one, are you assuming year one of retirement?

>> Year one of retirement. Great question.

>> Is actually 10 years in.

>> 10 years in. Yeah. Yeah.

>> Okay, 10 years and you have $650,000 in cash value. You built up, okay, so okay, I'm tracking so far.

>> So, for the first 10 years all I did is I said, "Look, I'm never going to get what I want in Wall Street, especially if my definition of success is retiring in 10 years or less."

>> Yeah.

>> I shifted all of my savings, all of my focus into putting money in life insurance. I used life insurance to be down payments in this example. In the book it was 14 properties that we actually owned.

>> Yeah.

>> So, 14 properties, those properties amortized, they appreciated. I did equity harvest a little bit out of them in year three and four. I put all of that in new life insurance. I just want to get as much money in my life insurance policies as possible.

>> So, in year 10 you got 1.3 million of equity, a total portfolio of 3.4

>> 3.4 million.

>> 3.4, you have a $2.7 million death benefit. You're taking $120,000 policy loans for tax-free cash flow. And then the properties are just, is it fair to say that they're just self-funding? Like, you're not necessarily taking cash flow from the properties, but you're not necessarily needing money because of the, am I saying that right?

>> You're saying it 100%.

>> Is no income, but the income, it is creating extra cash flow, but that cash flow is going to, you know, just from a risk management standpoint you're becoming less risky because you're creating some buffer.

That's it right there. Like it didn't need to cash flow at all. I just want, the way I become wealthy is owning the assets and letting time work for me.

>> I see.

>> So whether or not it creates cash flow, yes I want it cuz that makes it easier to own it. But in this example I'm not even touching the cash flow. I didn't even factor it into the equation.

>> I see. Okay, I'm tracking so far. Yep.

>> Okay, now we're getting to the funnest part of all. Now we're at the end of year five. We had a great five-year run, but this is lifetime retirement income. This isn't, hey, five years and I'm back to work, right? So now I'm going to go back to my growth engine of my machine. Now Caleb, you're probably seeing some similarities here, okay? A lot of this research was justified and backed up with Dr. Wade Pfau's research on the volatility buffer strategy, but rather than using the market I'm using real estate.

>> Mhm.

>> Okay, and I'm using the vault to not be a buffer of, you know, risk inside of the market. I'm using the vault for income, but my growth asset is my real estate. We've already proved that. And so now I'm going to go back to my real estate portfolio valued at 4.25 million. I have 1.9 million dollars in current debt. So I'm just going to go back to any bank in the world and say, look, I want to re-amortize my mortgages. I want to now take $700,000 of cash out refi. I'll re-amortize as a block or individually one by one and I'm going to push my debt from 1.9 million up to 2.6 million. Okay. I'm going to take the $700,000. I've got $633,000 of policy loans. I'm just going to pay my policy loans back. Now in this case I've got a little bit of extra cash, so I'm going to assume I put that in my

policy. So now at the end of five years, I've harvested the equity from my real estate portfolio. I've paid back my policy loans. I've put a little bit of extra from the cash out refi into my cash value. That wasn't necessary, but I did it in this example. So now in year six, I have $825,000 of policy loans. My real estate portfolio is still valued at what it's at, and all I want to do is run another 5-year game, right?

So now if I want to increase my income because of inflation, now if I take $825,000 and I divide it by five, I can give myself a 37% increase and raise my income from 120 to 165. And if I draw 165, just like we did for 5 years straight, at the end of 5 years, I'll draw my policy down and I'll have to go back to my real estate portfolio, my equity mill, harvest the equity, replenish my policy loans, and repeat the process.

>> Ryan, can I ask a question? I don't want to kill momentum here, but it's just, how are we funding the policy throughout the years, at least paying the minimum premium? Is that coming from active cash flow? Is that coming from... how are we doing that? Or is part of the 120, is that the idea, is like we're going to take a portion of that and pay the policy base premium?

>> Yeah, great question. Now, my recommendation is you should always pay your base premium. You should always put money in, but to make it as simple as possible, we didn't factor in any new premiums going into the policy after year 10. It was just premium offset and the growth of the policy.

>> Okay. That's a fair assumption from a standpoint, and the assumption could be it only could get better if there's obviously more money being injected. So...

>> It only gets better.

>> And make sure that we weren't double counting you that. So that answers my question. Yeah. No, I'm tracking so far. So you're using the volatility buffer, but instead of your money being in Wall Street, you're creating real estate portfolio. And you're using life insurance and real estate versus life insurance and a stock portfolio.

>> Yeah. Let me go back to how I see the game of money. And I hope this is divisive. And I'm not saying it to be divisive, I'm saying it to be very direct. There are two games of money. And they're going on in parallel in our economy right now. And you, whoever's listening or watching this right now, you get to choose which game you play in.

And the first game of money is the game of money I started in. I call it the dependency game. Right? And in the dependency economy, I trade my time. And really, my time is my life. I trade my time for money. I save what little money I can into, you know, mutual funds, 401(k)s, whatever.

And that side, in the dependency economy, everything in the economy is now working against me. Taxes are working against me. Inflation is definitely working against me. Time is working against me. Market volatility is working against me. Interest rates are working against me. Opportunity. Everything is working against me.

It's a game of time. I have to trade enough time with my fingers crossed, and I only find out if I won the game after I traded 30, 40 years. And Caleb, you and I know the math. And the math is atrocious if you're honest with yourself. And my premise, my belief is you will never be free if you play in the dependency economy. You might have enough money. You might have a lot of money, but because you don't control the outcome of what you're in, you're always going to be looking over your shoulder wondering what's going to happen with taxes, what about inflation, who's sitting in the Oval Office.

In the dependency economy, it's really, you're not even actually investing. And I have a whole chapter on this in my book. You're actually speculating. You're speculating in things that you have no control over, and you're just hoping for a higher resale value at some point down the road. That's the game that most people play. And if that's the game that most people play, if it's not going to work, and especially if we came away with the premise that we came away with, we're trying to play a 10-year game, it's never going to work in 10 years. But I don't think it will ever work, period.

And my objective is to help people see and understand this and not do things that don't work better. Stop playing the game. Right? Play a different game, because the other game of money, it's also going on in parallel right now and it's wealth outside of Wall Street. I'm buying assets and, in my opinion, what we just walked through, okay, what we just walked through, the only way you can win in the game of money today is you have to understand what leverage is. It's the Jeff Bezos. Jeff Bezos is borrowing against the value of his business. I don't need to be Jeff Bezos to have a financial system that works like Jeff Bezos.

In the ownership economy, I own my money. That's first and foremost. I have to be in control. Now, this is not going to work for anyone who's not willing to do the work, who's not willing to rise up, who's not willing to understand that financial intelligence. That's why you would invest in your business first and foremost, because it's driven by you. Your financial intelligence is what defines whether or not you will win and whether or not you will thrive in the ownership economy. If you come into the ownership economy and want someone else to do it for you, stay in the dependency economy and suffer the consequences.

>> Right. Ryan, an observation I'm making also is the just pure dollars standpoint in the dependency economy, as you call it, the idea of saving, like it's in 10 years, there's no way in the math that you just showed for you to get a portfolio of 3 million bucks. I mean, not in like, the rate of return that you would have to earn with your numbers would be bonkers. And so the beautiful thing is, like, leverage allows you to jump-start this thing and yet you're not using crazy assumptions. What I love is you're using 5% return on your real estate portfolio and you're not assuming stripping that money out. That's a flaw that I see so many people making, is they're selling you the dream of real

...estate and then something goes wrong and now you're going backwards. So I do appreciate the conservative nature and we looked at once we went off the gold standard, you're like you could say, "Oh, debt is bad. Like I feel risky." Well, I get a dollar bill out and see what it says at the top. It says Federal Reserve Note. Like you're literally, whether you might feel better by spending cash and doing the envelope system, but you're using debt whether you like it or not. Like that is just pure fact. You're using debt. You're just using debt your way. You're using debt maybe one-dimensional debt. I just made that up. One-dimensional debt versus multi-dimensional debt.

>> I love it, man.

>> It's just one of those things where it's like, yeah, understanding the Fed and I'm with you. It's like, do I love the system? No. But are we going to change the system? No. So let's figure out the rules and apply it to our own life and not just be, you know, potential useful idiots that are just continuing to finance this, the world that we live in. So I appreciate you laying that out. Is there anything else you want to say before we dive into some Q&A stuff?

>> Yeah, man. I want to say this. I truly do believe that financial freedom is everyone's obligation. And some people get mad when I say that, but look, here's the reality. I've talked to so many people and they're waiting for one day. They're waiting. That's the most dangerous statement in the human language. One day when I have enough money, I'll do fill in the blank.

>> Yeah.

>> And so my objective is to come into someone's world and shake them up and give them a new paradigm, a new worldview. Because when your paradigm shifts, you see the world differently. What you see changes. It's always there. And so the reason I say there's two economies is I want you to see what's going on on the other side. And I can look at that and say it's not fair, it's not right, and be a victim of the dependency economy, or I can say it is what it is. How do I work within the rules as they are and win the game of money?

And let's go back to where we started this whole conversation. Money is time. And time is life. So when I say win the game of money, I'm talking about winning the game of life. That's the objective here, Caleb. It's to have an income stream that gives you more options in your life, more control over your time, and allows you to live a purpose-driven life now, not with this elusive idea that one day, which will likely never come to fruition, I'll do it then. Because, guys, we get one shot at this thing. One shot at this thing called life. And so that's why I get so passionate about what I do, is I try to wake people up so they live their best life.

>> Yeah. Yeah, I think anyone that's listening to you, I don't think many people could say, "Wow, Ryan needs to, you know, be more passionate, be more energetic."

>> Tone it down.

>> I love that, man. I can tell you've been doing a lot of talking. You're going to be losing your voice here soon if you keep that up. So, okay. Can I pepper you with some questions? I get the concept. Congrats, by the way, on just articulating this message, and I do think there's so many people that have asked me. They're like, "Caleb, like, okay, I'm building cash value. What's the next step?" And part of this platform is to give different perspectives. And so you over-delivered when it comes to laying that out. So thank you.

Couple questions. Number one, real estate due diligence. I know that that might be like part two, but I think it's a safe assumption because we're continuing to print money. And I just mentioned that you didn't go crazy with like your assumptions on real estate, which I appreciate. Do you feel just by like single family homes, how you're vetting these? I assume that you actually help people with this, or is it just like education? It's kind of like Rich Dad, Poor Dad, buy real estate, good luck. Or is it like, no, like actually we'll help you do the due diligence? Because that's the thing that always gets me. It's like, okay, that sounds great in theory, but how do you make sure that you don't get hosed on something?

And how do you make sure that you're, because this whole thing is predicated on the real estate continuing to grow in value, because if not, you're, if someone does hypothetically leverage their life insurance for cash flow. I don't necessarily love the word income, but that's retirement income how people think. So cash flow, and then 5 years later, uh-oh, portfolio's not working out that way. Now you can see that that could be problematic, but I just also want to remind people we're giving ourselves a 10-year constraint, whereas like the default is 40. So like just relax if, a worst case scenario, I just want to remind someone that. But like what would you say to, a lot of this is predicated on the real estate, because the life insurance with your assumptions are pretty solid, but a lot of it's predicated on the real estate underlying asset.

Hey, I want to interrupt this video real fast to tell you about our clarity call. We designed this clarity call for the entrepreneur, the high income earner, the person that wants more control, the person that is ultimately asking the question, how can I better my finances? And this clarity call is simple. We get clear about your situation and then we try to answer the question, does integrating overfunded whole life insurance help you better your financial situation? Does it help you be more efficient? Does it help you better accomplish your goals? If the answer is yes, we'll actually show you how it does.

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>> Totally. And there's about 100 ways we can answer that question. Here's what I'll say. One of my very first mentors in the game of real estate said, "Real estate's like a bad haircut. If you do it wrong, just wait a little bit of time and it's going to grow back." Now, for a bald guy who wears a hat on a show, maybe that doesn't work so well. So, you actually win the game of real estate when you buy real estate. And buying in the right markets, with the right provider, and managing it within the right system make all the difference. Property management is key.

We've done, and you asked the question specific, I'm going to give you a specific answer. That is what our company does. Our company helps people not talk about a theory, but apply and create the theory inside of their life. We've done 5,000 single-family homes inside of our community over the last decade. And I'll tell you what, man, we've learned so many lessons. So many lessons.

And not every piece of real estate is a winner. Not every property manager is a banger. But I'll tell you what, when we're doing it as a group and when we're doing it at volume, we have a ton of leverage. The right positive leverage to buy the right asset in the right market with the right provider and hold them accountable to it. And so, yeah, that's probably the major focus of our company is helping people execute the system that we talked about.

And then I'll say one of the things, too. And again, I'm going to go back to the tax code. I asked ChatGPT this when I was writing the book. I didn't actually sit down and read the tax code. So, I wish I could tell you I did this, but ChatGPT said

>> doubts about it. Some people are like, "Yeah, I read the tax code." Come on. And you're like, "You haven't read the tax code, but you may have referenced the tax"

>> I referenced the tax code, yeah. But here's what chat said, okay? Chat said 38% of the tax code has to do with real estate. 38%.

>> it.

>> And one of the biggest advantages in the tax code is a 1031 exchange. And so what that means is let's just say by some stretch of the imagination I bought a property in the wrong area. I missed the market timing, whatever, and I don't want to hold it, right? Remember that the game is don't sell assets cuz assets trigger taxable gains. I can 1031 that asset just like I can 1035 life insurance.

And so yeah, we do a ton of 1031s as well. You know, also there's markets that have just, like, man, they've boomed and we captured, we've got lots of mathematical formulas to determine when to do this, but we can determine when we've captured the majority of the gains in a piece of property and then we 1031 and we go roll those gains over to another property that has upside to it. And so the idea of buying one property and holding it for 50 years, that's probably not realistic. But the idea of getting into real estate and letting time work for you, that's absolutely the game.

>> Next question is what are typical loan products that you're using? Obviously, if you do one or two, you can maybe do personal loans, but when you're doing multiple homes, it's like what are the economics? Are we putting 20% down? Are you working with certain lenders that are getting, like, talk to me about that cuz I would imagine in your equation the cash value is what you're using for the down payment and then you're financing the rest and I would imagine that you're paying back the policy loan and that is included in, like, the self-sustaining. So it's like, yeah, there is cash flow coming back, but it's not coming to Ryan Lee, it's coming to Ryan Lee's policy loan, which is actually the insurance company. Is that, am I, is that assumption number one? And then how, I again, I know I'm not asking for all the details, but what are some of, like, baselines that you're seeing right now as people are acquiring homes every year?

>> Yeah, let's, I'm going to answer all three of those questions. Let's first go back to, like, for me everything has to be a principle. Everything has to come back to a framework that I can understand and let's give you the framework of America. Right? Before the Declaration of Independence was written, today it's written as life, liberty, and the pursuit of happiness and I like that. That's good. But it actually came from John Locke and the original statement was life, liberty, and property.

Yeah. The reason people came to America, the reason America is what it is is because there's contract law and property was written into the Declaration of Independence. And so, if I know that, I also know that I have a contractual opportunity, constitutional opportunity to access debt. That is the game of money. And so, you can actually access up to 10 single-family homes government-backed Fannie Mae, Freddie Mac loans per person that has taxes. So, if I'm married, I can get 20. If I hit my 20, and very rarely, I just showed you how to generate six figures of tax-free income with 14 properties. We have people, myself included, that have gone beyond the 20 and then we just go from Fannie Mae, Freddie Mac loans to DSCR loans and you can go as far as you want with those.

>> And just define what those type of loans are.

>> So, they used to be a lot more detrimental. They used to only be amortized over 15 to 20 years. They required a lot more points, but today they almost identically mirror a 30-year fixed mortgage from Fannie Mae and Freddie Mac. You'll pay a little bit more, typically a point more in interest, but you can amortize them over 30 years.

>> Love it. Okay, so that's question number one, down payments on the first 20. I feel like most people, you know, they're working on their first or second home. So, if you get to 20, congratulations. You can call Ryan. But on the first one to 20, what are some of the down payments needed to acquire homes?

>> Yeah, so we generally do 20%. You know, if we understand the game of leverage, my objective is I

...want to keep control of as much of my capital as possible. And I mean, let's just go back to this idea that inflation is making us both wealthy and poor at the same time depending on which side of the equation we sit. If I take a 30-year fixed mortgage, I get to buy an asset that inflation is increasing the value of that asset, but I get to then pay the bank back with less and less valuable dollars over 30 years. It's such a phenomenal opportunity. So I take 30-year fixed mortgages, generally put 20% down, sometimes 25%, just depending on what we're trying to accomplish.

And then the objective really is, like, you never, I mean when you understand this game, 80% of what you need to be financially free, it's sitting out there. It's waiting for you to raise your financial intelligence and go claim it. That is the game. Debt is the game, both on the income side and on the asset acquisition side. This is how you can accelerate your path.

I love it. I love it. And then they also, what wasn't even mentioned, is the buy borrow die concept and the step-up-in-basis that you get with real estate. Incredible. And you happen, arguably speaking, real estate portfolio and life insurance are one of the two best assets to die with. And why is that important? Well, if that's the case, it should only reflect on making a living better. That's what's weird. It's like, "Okay, if something's guaranteed that's going to happen and you have assets that are optimized and what..."

And so why is it where these two assets are great versus other assets? Well, getting leverage against them are a lot easier than, you know, gold, equities, and all, like you can do all that, but it's like literally real estate's built around leverage. It's like it's a very common thing. It's not like, "Oh, we'll have to see if someone can do that." I mean, there's like everyone's doing it. So by default, real estate's just a natural asset to have with the buy borrow die step-up-in-basis, like that concept.

I would even go as far as to say way easier than owning a business and trying to lend against it. Yes, if you're a billionaire, you got people to do it. But if you're a small business like you run, I run, we're not going to banks right now and it becomes harder, harder. Whereas like real estate, very very black and white. And then obviously life insurance is even easier when it comes to like built-in guarantees to leverage. And then obviously the income tax-free death benefit.

So not only are you acquiring a greater asset with leverage, and I think doing it in a safe way, at least from what I'm seeing so far, which is awesome, you're creating the cash flow, but then you're also having two assets that are beneficial upon passing, which should only enhance your life while you're alive.

It's like peanut butter and jelly, man. I mean, let's go back to where we started, the premise and the arguments. Like this is what makes life insurance and real estate and business, if we're honest with ourselves, but these are the three assets. If you want to retire in 10 years or less, it has to be a combination of those three assets, period. There's no other way to do it. You've got to make a lot of money, you've got to keep a lot of money, and you've got to generate tax-efficient income.

And so here's what I love about this. You mentioned the step-up in basis in passing on assets to your heirs. Like the value of life insurance is the death benefits. The value of real estate is the appraised value that I can sell it for down the road. That's the value of the asset. Now what makes life insurance and real estate so phenomenal is I can have the asset that has value and I can harness and leverage the equity for the present value for the short term. So if I can leverage the equity but still have the asset value and pass that asset value at its complete value onto a future generation, that's what makes these two assets work so phenomenally in this situation and strategy.

Okay, next question, Ryan. How, if you're an entrepreneur that's doing this, you're literally doing this. You're owning real estate, but you're also investing in your business and continuing to grow your business. How do you decide what, I'm assuming you're making money, anything that you're not spending is being deployed to cash value. And then how do you decide where you deploy it, back in your business, back into real estate, and then do you own any crypto? I know that's a random, but like do you own any other assets? And then do you own any crypto? One-two punch right there.

Yeah, you know what? That's always a delicate balance. My objective, and I think I heard this from Hormozi, it's such a phenomenal statement, but he says think in decades, act in days, right? And I love that idea of thinking in decades and acting in days. And as a business owner and entrepreneur, I think oftentimes we think we are both, our business is the solution to our problem, but the more entrepreneurs I've worked with, the more I've realized they don't have an exit strategy and they dump everything back into their business and their business might be phenomenally successful, but they're not free. There's no exit. Their business owns them.

And so if I think in decades and act in days, I kind of think about this idea that I want to get my business to a point that I have the ability to take both a salary from my business and profit from my business sufficient to hit my exit strategy in 10 years. And we did the math, so I know the math. So if I know that, if I'm in the beginning phases and I can't even keep my lights on in the business, every dollar needs to go back into the business. But if I'm at a point where my business and my margins are pretty healthy, I've got to start paying myself a salary. I've got to start, you know, paying myself for working in the business. And then I have to save 10% of all I make, has to be mine to keep, minimum, but really from a business owner standpoint where I really kind of jack up the opportunity is my profit. I have a whole framework that I believe in strongly of taking quarterly distributions, profit from the business, taking it out of the business, fundamentally taking it out of your business bank

account, and then if I choose to put it back in, here's the crazy part. The second it comes out of your business bank account, you realize that profit and for some weird reason you think it's yours. It was always yours. But in the business you kind of let it just sit there, and then when something comes up you're like, "Oh, there's money in the bank account. Just go do it, right?"

But when I take it out and I intentionally choose to put it back in, I ask the one question that business owners never ask themselves: when do I get my money back? I treat it like an investment. And so you have to. You have to. And so for me, I want to think in decades and not in days. You need to have a game plan as an entrepreneur to exit from your business. And the math, we can easily build that math for you. But then you have to go do what it takes to run a business that generates enough income or profit for you to be able to do it.

>> I love it. Couple more questions and we're going to land the plane. Obviously

>> Didn't get the crypto question, dude.

>> Oh, yeah, yeah, yeah. Get the

>> Come on. You left me on a cliffhanger. Okay, so let's look at it this way, okay? Here's, I'm going to give you my crypto story. I'm going to give you my crypto answer in a framework, right? The only way, if I'm going to use leverage, the only way that I can use leverage is if I counterbalance it. This comes from Nassim Taleb. Nassim Taleb in Antifragile talks about a weight, you know, a barbell.

If I take all, like, if I look at life and I have a lot of risk and I level up my risk on one side, if I don't counterbalance that risk with no risk, de-risking the situation, I'll die, right? It's not going to work. And most people, they take so much risk across the board. Their income is risky, their investments are risky, their life is risky, their health is risky, and they live in a state of chaos.

So the way I look at the game of money is if I'm going to use leverage, I want to counterbalance my leverage with hedges, with things that have zero risk in them. And zero risk is cash. So I keep a ton of cash. I have lots of reserves. I keep my cash value. And I look at those hedges against the external risk of the leverage that I'm taking.

But if we now look at the world that we live in, the economic world that we live in, let's go back to the dollar. We just acknowledge that the dollar is very risky. They're printing a lot of dollars. And I think the foundational game of money is convert fake dollars into real assets. That's kind of what we talked about today. But the next level, I can de-risk the risk of the dollar by owning assets that counteract the risk of the dollar. Gold and silver's one of them.

Now, I also believe Bitcoin specifically, not cryptocurrency, but Bitcoin is a hedge against the risk of the dollar. And so when I own gold and silver, I'm not buying and trading. I'm owning it as a hedge. And a hedge's definition is just to preserve the value of the asset. So the way I look at Bitcoin, and yes, I do own Bitcoin, I don't care what the market volatility is. I'm not, it's like food storage. I own food storage because there's a risk that I might need food sometime and the grocery store's closed. I don't care what my food storage is valued at. I care that I have it. That's how I look at Bitcoin.

>> Okay, I love it. And again, I'm asking really personal questions, but when you look at your portfolio, gold, silver, and Bitcoin, less than 10%? 5%? More than 10%? How are we looking when it comes to looking at your portfolio including your real estate portfolio? We'll exclude your business just to not muddy the waters.

>> Yeah, great question. And you know, the reserve game, I think if I look at the world as, you know, security, everything becomes how do I hedge my risk? If I look at the world of leverage, everything becomes leverage. So there's a delicate balance and I don't know if there's a right answer for everyone. For me, in the beginning, I held no gold and silver. Like, my whole goal was get a little bit of money, get some assets. Over time, I realized holy crap, leverage is a dangerous and a risky thing. I better counterbalance that leverage with liquidity, and I just kept cash. I still keep cash on hands.

But today now, most of my reserves are in cash value in my policies, and it's a minimum threshold I never go below. For me, I've got very specific formulas of how much reserves I'm going to hold for real estate, for my personal production, and for my business. Now, my gold and silver today, I like to hold 10%. I mean, that's just a general rule of thumb, you know, that I've got from smarter guys in the world. I know some people take more or less. I hold 10% and for the most part up until recently, I hold it. I want that in my possession.

Recently, I've partnered up with a company that will allow you to have your gold. You know, they'll invest your gold and they'll pay you the interest in more gold. So that's a little bit of something I'm trying right now. But then on my Bitcoin, again, for Bitcoin, I also think of the same way. I want to have 10% of my total portfolio value in crypto, not crypto, not crypto, Bitcoin specifically. That's the only crypto I do. I'm not in and out. I'm not trading. I own cryptocurrency because it hedges my risk against the dollar.

Guys, if you're enjoying this, subscribe. And I know Ryan, you also have a YouTube channel. We'll link that as well. Just like, that's one of the greatest things you can do is just continue to follow along. Obviously, Ryan, this is the playbook. So go get the book. Go get the book. We'll have a link down below. I mean, we covered a lot of ground in this conversation, but this is just scratching the surface for what's in this book. And then Ryan, obviously, there's going to be tons of people that are curious to learning more. We'll have links to how someone can learn more about just this idea of real estate

being retiring in 10 years or less. Two parting question and a parting thought. Question, from an income standpoint, is there an income level that someone needs to be at for banks to even work with? Like if someone's watching this and making 50 grand as a household, probably not a great first start. Probably advice would change. What, how much does someone really need to be making right now for them to realistically be able to apply this?

>> Yeah, that's a great question. You know, it's really going to come down to your debt-to-income ratio more than anything. And the best part about investment real estate is they'll actually qualify some of the rent that's coming in.

>> Yep.

>> To supplement some of the debt-to-income ratio. But, you know, I'd kind of go back to your original answer to the question. Like if you're in a position right now where you've got a couple thousand dollars, go do whatever you can to 10x that amount of money, right? I mean, to buy real estate today, you're going to need 40, 50 thousand dollars as a down payment. Like the game, like that's why, get assets and let time work for you, but first and foremost, go make money. Go make money. Go make money. Go make money.

But yeah, lending, it's really easy and the rules always change, but man, my very first mortgage, and this was, you know, years ago, but my very first mortgage, I was making $32,000 when I got my very first mortgage. So, it's not necessarily the income that you're making. It's more about your personal debt income ratio and then when you're buying investment property, how that increases your debt income ratio and what offset of cash flow you get to take on that.

>> I see. Parting thought is, I really appreciate you. A lot of people talk about life insurance, real estate, but they're not actually showing the numbers. Really appreciate you doing this. My initial reaction, I think some of our audience would be like, "Whoa, I feel a little bit uncomfortable, you know, taking that policy example and bringing it down to potentially zero and then, you know, having refinancing and putting that back." Here's the cool thing. This is America. You can do whatever you want, okay?

Sorry if you're watching this in other countries, but if you're someone that's like, "Okay, it's the principle." You could do half of it. It's the principle that matters. You might be someone like me that maybe I'm going to continue to earn and want to make more money 10 years from now. So, can I live off of my earned income, but continue to pour gasoline on this? So, what I love about what you're doing is you're showing someone how to do it in 10 years or less, but I bet a lot of the people, including you, aren't going down to zero on all your things and then re, so you're showing us that that can be done, but if someone's like, "Oh, that feels risky." Awesome. Make it more conservative.

So, I just wanted to point that out because I think, you know, sometimes we can get over analytical and we can judge comments and most people are giving you the 45-year journey of how you become financially free and retire and you're doing the 10 years. And yeah, if the 10 years are going to, there are some {quote} bets that you need to make and I think you did a very good job talking about like these are not unrealistic. But also, we're talking in 10 years. I just want to actually quantify that because, and commend you on creating this playbook because I think it's going to expand the way that people think and whether they do it in shorter time or if they do it in 15 years, this is a playbook that I think is, again, not something new, but you've made it really easy for someone to take life insurance, which is a phenomenal asset and be able to actually use that in a way to become free without having to rely on passive cash flow being the thing. And so, I appreciate that as well.

Ryan, is there anything else that you want to say? Obviously, we'll put all your stuff in the links for people to check out your book and what you're up to. But is there anything else you want to say before we land this plane?

>> Yeah, Caleb. Number one, I just want to acknowledge the man that you are. You know, I've known you for a lot of years now and I still have this vivid memory of you coming up to, I'm pretty sure it was Funnel Hacking Live and you were just a, like you were just a kid and you, you know, you had a camera man with you and you were asking me questions. I'm like, man, what the heck is this guy doing? But to see what you've built, to see who you are, to see the value that you give to the world, to see the way you objectively, unbiasedly give people answers to help people see the full picture.

That's really hopefully the last word of wisdom that I'll give people today is your perspective determines your action. And my goal today was to give you a different perspective that will hopefully give you a possibility to take a different action because here's the crazy part, Caleb. The next 10 years are going to go by one way or the other. The question is if you think about your future self, do you want more freedom, more options, and more control 10 years from now? And if so, it doesn't start with life insurance or real estate, it starts with you getting a clear vision on what you want and why it matters because the only difference between the current version of you and the 10-year version of you from now that's free and does all the things that you can envision yourself doing, you have to become that person.

That's the best part of the ownership economy. For the first time ever, you own your money and when you own your money, freedom isn't just, oh my gosh, everything's blissful and wonderful. And in this course, writing that book, doing all the real estate we've done, man, I've made so many mistakes. And the best part about it is those mistakes, they teach you real lessons and the smart person doesn't repeat the same mistake twice. So, your objective is get clear on what you want, get extremely emotionally committed to why you want the thing that you want, and become that person, raise your financial intelligence, use money as a tool, and build and live a life

That doesn't just matter to you, but matters to the world. You have one shot at this thing called life, and Caleb is a perfect example of someone using his God-given talents in the service of other people. Do the same, my friends.