Who Is Infinite Banking Actually For?

Life insurance is an incredible thing. Ladder Life is a very innovative solution to the marketplace, and so, but I want you to know that Ladder's majority what they do is term insurance. When Kevin's talking about infinite banking, he goes to the founder of the company that is talking about selling term insurance, and he's asking him about overfunded, max funded whole life insurance.

This is Better Well with Caleb Guilliams. Hey everybody, it's Caleb Guilliams here, and a lot of you have been reaching out to me and saying, hey, did you see the video that Meet Kevin did on his channel about infinite banking and life insurance with the CEO of Ladder Life? And I want you to know that I watched it, and I'm going to be commenting on it, and that's why I'm doing this video. So I'm going to reference that person as Kevin, because I know that there's certain trademarks and I don't have permission to making this video, so I want to make that very clear.

And I also want to say, before I jump in, because I'm very passionate about this subject, is I absolutely love what Kevin is up to on his channel. I absolutely love how he processes, how he thinks, how he talks, his energy, his passion. I think he's doing amazing. I challenge you, I don't think you'll be able to keep up with all the content that he's doing. And he does such an incredible job, and he's really a role model as it relates to consistency and putting things out on YouTube. And so I just want to be very clear with that, because I would love to be friends with him.

And I very much believe that I would, I guess I'll say this, Kevin, I will come on to your channel and we can have a dialogue, and I promise I'm a nice guy, and hopefully could add value to your audience. And I very much do mean everything that I'm saying. So with that, what I want to say is I just want to make a clear observation. There was this, they did a video on infinite banking because Kevin went into different clubhouses, there's a lot of people that are pitching a lot of stuff.

And this video might surprise you, because as someone who's written a book on the AND Asset, who's making a movie on pretty much, you could say, a combination of like infinite banking and like retirement income planning and like molding them together, like you might think I might be super one-sided. I actually, through this whole process and meeting people, I've actually taken a step back, and I think majority of people should not do what we call infinite banking, cash flow banking and all this stuff, because I think the one thing that gets in the way is you. And there's a lot of people that don't understand how this works. In fact, I read through the comments, and I was blown away by all the people that were attacking Kevin and that were getting it wrong, that were totally missing the mark as it relates to what he was actually trying to say, and actually was talking about infinite banking in the wrong light.

And that's when I'm like, when I want my channel to get away from life insurance, because I don't want to be the life insurance guy or the overfunded life insurance or the AND Asset person only, because I very much like, we just finished a series, we're talking about asset analyzer and making decisions. It's like, then it's like, man, maybe I should do more content on this, because we need to have the proper truth in the marketplace if we're going to be talking about money. So again, that's the pros and cons.

Now, the one observation I've made when I watched Kevin's video is Kevin makes a lot of money just from YouTube, like people watch their ads. I just got my channel approved with YouTube, so I think I made like 200 so far on YouTube ads. So I'm small potatoes when it's compared to Kevin. But there's a ton of benefit of using hot topics that get people to watch. So that's number one. But number two, a big source of income that Kevin gets is from affiliates, people, we talked about Webull, and he talks about other things and click the link below.

He's adding value to the marketplace, and these companies, a lot like my company would do if we ever set this up, is saying, hey, we provide this, and if you're able to bring people that want what we sell, there's value created, and as long as we're not getting in any trouble sharing commissions, I'll give you a flat fee and do all this stuff. So Kevin has relationships, and a lot of times you'll see like, hey, to get life insurance, click the link below, and it takes people to a company called Ladder Life. And so Kevin has a great relationship with the Ladder Life company, probably makes a good chunk referring people.

And overall, if some of you guys follow my work, I want to see a million people get life insurance. Like, I think life insurance is an amazing thing. I think what Ladder Life is doing is very innovative, because what they're saying is there's a lot of brokenness in the life insurance world, and instead of you going to an agent and then trying to sell you something for a commission, we're just going to create technology, we're going to partner with A rated companies, and that is going to create efficiency and give you good cheap life insurance. Because majority of people need slash should want life insurance, whether for debt, they might be in debt, they don't want to leave their families worse off if something does happen to them.

And so life insurance is an incredible thing. Ladder Life is a very innovative solution to the marketplace, and so, but I want you to know that Ladder's majority what they do is term insurance. When Kevin's talking about infinite banking, he goes to the founder of the company that is talking about selling term insurance, and he's asking him about overfunded, max funded whole life insurance. So the moment I saw that, I was like, okay, I have a lot more empathy, because at the end of the day, for people like, and here, I'm not a real estate expert, so if I go there, there's a difference between real estate syndication and like single family houses. But I could say, hey, I'm going to get so and so, who's a real estate syndicator, and somehow think that they're going to be an expert on

Another, you know, real estate game. It's like, or someone that's like invest in the S&P thinking that they're going to have good things to add as it relates to special option trading. It's both in the market, but they're very different. And so when I saw that, I was like, okay, well what we really need to do is we need to take a step back and we need to just say, listen, it's not one, or one is not good or bad. Majority of people probably shouldn't do infinite banking, but for the people that are interested in infinite banking, the pros and cons, I want to make this video because, again, I just think that the moment I think I can get away from that, obviously there needs to be more videos that that needs this. And I'm going to use a good title, and maybe some people watch this video for the first time. So if that's you, thank you for watching.

So anyways, so Ladder Life founder obviously has some type of bias. I have a bias because I've written a book on overfunded life insurance. So knowing that, I just want to be very clear with that. I'm going to do my very best to give you the pros and cons of that. But if you're talking to a person who's running a term shop and then they're giving you their opinions on permanent life insurance, which he says that they can do, but really at this, the kind of infinite banking or overfunded life insurance that we do, there's a disconnect. And so that's, so I become way more empathetic and I just want to throw that out, that it's not any attack, it's just an observation.

So what I'm going to do is I'm going to share my screen and I'm just going to quickly walk through the pros and cons of life insurance, okay, of the infinite banking concept. So what I'm doing is I'm going to make this as simple as possible. You have money and you have your investment, let's just say. And majority of people, what they're doing is they're taking their money over here and they're investing it directly in the S&P, real estate, business opportunities, you name it. And that's super easy.

What infinite banking is doing is they're taking money and they're putting it into life insurance, and then the people that are teaching this properly are doing then, hopefully, the exact same activity. I talk about asset-based activity is the thing that you can do that can help you live more intentionally and give you the results that you want. So this could be building a business, this could be investing in real estate, this could be stocks, this could be paying off debt, this could be a whole lot of things. And so really it comes down to, is routing your money through this and this better, or would you be better off taking your money and buying an investment?

And this gets into the buy term and invest the difference, because what this person would do is they would invest, but they also believe that life insurance is important, and so they would go to Ladder Life, or if I can plug our business, or get term insurance with BetterWealth and then invest the difference, and that the whole thing would work. So really it comes down to, is option one or option two better? There's pros and cons.

Now I'm going to make this video quick, because there's really two things that we need to talk about when it talks about infinite banking, and I'm going to talk about the pros and cons with that. There's how the policy is designed and there's the activity that you use it. If you are the right person, i.e. if you can save over ten thousand dollars a year and you can have an activity that can earn you money, like a business, real estate, stocks, that is more than five or six percent, and you believe in that, I think there's a pretty good chance that actually having the AND Asset, overfunded life insurance, at the foundation of your plan will leave you better off in the future. I really believe that. And everything, there's an exception to the rule, not everyone can get this and all this stuff. And so with that, I would say that would be the pro.

The con is if you don't have ten thousand dollars a year to even start this, if you don't really have an activity outside that can earn you, like a business, real estate, something that you control, like if controlling money to you is not that important, then I think the infinite banking concept is less advantageous for you. Now there's always an exception to the rule. There might be people that use this to pay off debt or save and then an opportunity comes up. But I just want to be overall, if controlling your capital is not that important to you, the infinite banking concept becomes less valuable. If controlling your money is more important to you, then the infinite banking concept becomes more, like, more valuable, and I'll explain that in a second.

So let's talk about number one. The biggest problem to the infinite banking concept is whole life insurance. Now a lot of people that I highly respect, the Dave Ramseys of the world, they're in Seti, I would even probably put Meet Kevin and other people in this category. They very much say, like, okay, life insurance is something that you need to have but don't overpay for it. In the video they talked about like 20 times, you're in it, it's like putting 20 times the premium for the life insurance. And so it's like overall logically, it's like this thing is the issue. Like I get the whole banking concept, I get the control, but the whole life insurance is the thing that stinks.

And I will say, for the most part, whole life, the way that it's structured, is horrific. It's horrible. You shouldn't put a single dollar in it. It's not going to help you get the result that you want. And at the end of the day, even the founder of Ladder Life made the comment, and I think he has the right to make that comment, we're 20 years to break even. Now I don't necessarily, I haven't really seen 20 years, but I've seen 15 years, I've seen definitely like 12 years, and it's like that's a problem. So it's like whole life is not flexible. It's it

doesn't grow very well. There's like no liquidity, and so it's like, okay, like this banking thing is good in theory, but this thing can't give you what you want. And this is what I'll say: I have plenty of videos on my channel talking about the rate of return of life insurance and how it's structured and all this stuff. I will say if it's structured properly, and here's really the secret, to think about this from a foundational banking aspect, you need the death benefit to be as small as possible and you need to increase what we call the living benefits. And the living benefits we do through riders and other things, which pretty much give us a lot of cash that we can access, like anywhere from 60 to 90, 90% cash that you can access in the first year.

It gives you competitive growth, and again, you can check out my video on the true rate of return of life insurance and I break down in a calculator with that. It gives you high liquidity, gives you options, gives you flexibility, which flexibility is a huge deal, you guys, when we're doing the strategy, because we never know what the future holds. Flexibility. And so the idea is you get whole life insurance because of, and this last thing is because of the tax benefits, the tax benefits, and because of the, really, your money, I call it the controlled compounding in my book, it's your ability to grow your money while you control it, is huge. It's the borrowing feature of the life insurance that I'm going to break down in just a second.

But the big reason why we use life insurance, not other aspects, are these two benefits, are the tax benefits, because it acts very much like a Roth. What you, you don't get a deduction of your money going in, but once your money's in, it grows tax-free. And so people that believe that taxes are going up in the future, or government's going to increase the rate or threshold of our taxes, this is very much valuable, because it's like, I can put my money in a contract that's not necessarily regulated, that cannot just get changed overnight at the Congress level, that allows my money to grow tax-free. And it's unlike a Roth, I can put, I'm not limited to how much money I can put in and other things that that's beneficial. But it's only beneficial if I can control my money, because at the end of the day, life insurance is not going to get you, it's not going to outperform other investments if you know anything to do with money. So that tax benefit and the controlled compounding benefit together are super beneficial.

And so number one, majority of life insurance doesn't work this way, but if done right, it should be flexible, it should grow with special tax advantages, should give you liquidity, should give you a lot of options, and really becomes a foundational aspect to put your money. I tell people this because I believe it's important to practice what you preach. I put over six figures a year into this, not because I think it's a great investment, it's in fact, life insurance is not an investment, it's a great foundational asset. And because of that foundational aspect, it allows me to do a lot of other things. So step number one is make sure that you're working with the right person, getting the right policy set up, because if it's not done well, then step two doesn't even matter, because the foundation's got to be set up properly.

All right, step two is what you do with your money. A lot of people get this wrong. A lot of people, number one, say like, "But become your own banker, you get your interest, you pay yourself interest back," and that's so wrong, you guys. You're not paying yourself interest back. You're not necessarily even recaptured, like we use the word recapture interest, I'll explain what they mean in just a second. But it's like, I haven't read Kevin's comments, and there's so many people attacking him, and I'm like, man, I'm like, these people, they have the right heart, but they don't even have it right.

These are people that are probably selling infinite banking and they don't even have it right. They're saying you get to pay yourself interest back to you and you need to become your own banker. It's like they're missing the whole point. The whole point is this: your money is continuing to grow over here. And I will say, and I have other videos to talk about the benefits of having life insurance in your plan, having life insurance at retirement will help you get more cash flow. I'm going to make that statement, and I can make other videos that back that up.

And what you can do is you can control money while your money continues to benefit your future. So instead of you losing the compound growth of a dollar, you take a dollar and it's going to grow for the rest of your life, and that just represents the benefit at retirement. And instead of disrespecting the future value of that dollar, what you can then do is you can borrow against it while letting it continue to grow. Okay, so when we talk about recapturing interest, what we're really talking about is this thing called lost opportunity cost. And lost opportunity cost essentially says a dollar is worth more than a dollar in the future. Let's just say a dollar is worth a hundred dollars in the future.

So if you spend a dollar today, you're actually spending 100 of your future. By doing this strategy, your dollar is going to continue to grow and you get the future dollar of the growth, and you get the ability to control capital to do other things. It's not free, it's not a get rich quick deal. It's, in fact, a lot of people are borrowing their money and buying dumb things and are worse off because of infinite banking, whereas if they just had their money locked up in their 401k, they wouldn't put themselves in that situation. In most cases, when I talk about control cost, the control cost is anywhere from three to eight percent.

Okay, so common sense tells you, if you're paying, let's just say, just to make this easy, let's say if you're paying five percent for controlling money, for it's the insurance company's money, not yours, your money is continuing, remember, lost opportunity cost, your money's continuing to do its thing. If you're paying five percent for someone's money and you're paying off four percent debt, or paying off your mortgage, or

...or going on vacation or buying a car that you shouldn't afford or can't afford, you were actually worse off, because you're paying money to buy something that you shouldn't. You're paying money, you're paying interest and then not actually making that up through the activity, arbitrage. This is so important, you guys, because we are teaching this wrong. We're telling people that they can earn, that they're earning, let's say, three percent in their policy, they're taking a five percent loan and paying off three percent debt, and we're trying to tell them that's a good idea. That's not a good idea. The math doesn't add up.

And so this is where the benefit is. That's why I'm critical on my friends, I'm critical on the people that are teaching infinite banking, because we got to teach this right, and there's a reason why people are getting this wrong. The benefit is this: it gives, so our step number one, this only works if your policy long term is going to be a better benefit, and it's not just about the rate of return. There's all kinds of benefits that happen with life insurance at retirement. So the benefit is you get that future benefit and you get control of capital.

And let's say at five percent you can control capital, and remember, your money's doing its thing, so you're using now leverage. That could be powerful. And let's say you invest at something that's earned six percent, or let's say your real estate earns 12 percent, or let's say your business earns, you know, 20. Now we can't cheat ourselves, some people aren't earning this, but then what you can do is then you can take one dollar, one dollar over here, it's doing its thing, it's going to be a long-term benefit, but because we do quote-unquote infinite banking, because we borrow against our life insurance, because we have a contract that allows us to do that, we are able to take other people's capital at five percent.

So if we were having a hundred dollar loan, I'm putting up five dollars and I'm earning six, what rate of return is that? That's twenty percent. What rate of return is taking five dollars and earning 12? It's 140 percent. What rate of return is, and I can't do this in my head, so I'm not going to try, but in the comments you can slap my hand for winging this video. What's taking five dollars and earning twenty dollars? It's, and just so we know how we do the math, this is the investment, not the loan, right? This is the investment, this is the cost of capital.

And so the power of infinite banking is if your activity over here is helping you get closer to the result that you want, your life is going to be better. Like, you are going to be better off. It's going to change, you're just going to change your game, because you literally have a dollar doing more than one thing, and that can be really beneficial. The amount of people though that are teaching you that you can buy your car, pay off low interest debt, go on vacation and do all the stuff because your money is magically growing, what they're referencing is once when your dollars are put into a life insurance box, you do get your long term, life insurance is a really powerful asset to own. And so what they're saying is they're justifying long term and letting you rob from yourself in the future, which is a problem. And it's really powerful if you can get the long-term benefit and also take that same dollar and do other things that create value.

I'll just end on this, and so the thing that I just want to remind everybody, that in infinite banking, over funding life insurance is an amazing strategy if controlling money, by controlling money you can do good things with it. And there's other videos and you can, like, again, there's a lot of data that is going to come out more in the future that having life insurance a part of your investments, having life insurance a part of your pension, having life insurance and owning your home gives you options and gives you opportunities in the future. We need to understand that first. If we don't understand that, buy term and invest a difference, because you don't see the value of life insurance. But if that's valuable, what infinite banking is saying is do that, and if controlling your money is a benefit for you, do that as well without hurting the future growth of your money.

And for the people like myself who own businesses that love opportunities, that is super beneficial. Like, that's why I save a ton of money, because it's not an investment, it's not an or, it creates an AND conversation that's beneficial. For majority of people though, the control, if we're being honest, controlling money is a bad thing. What do I mean by that? We do dumb things. Psychology of money is a real thing. And so controlling money is not at this magical ATM for every one person, that controlling money is a good thing.

I would say I could probably give you a case study where the nine people out of 10 are not bettering their lives, in fact they're getting worse off. So we just have to have honest conversations. But infinite banking gives you, it literally is one of the few strategies that allows your money to benefit you in the future while giving you control to potentially increase the future cash flow by other activities. So with that, I appreciate all of you guys, I appreciate the comments, liking the video, subscribing to the channel.

I'm really, because I respect Kevin and Graham and other people that are making videos, I want to be a voice as well. I promise you, I'm not just a life insurance junkie. I very much love this concept of unlocking intentional living. I love people reaching their highest potential, and I realize money is a tool to help them do that, and so that's why you get me fired up, that's why I'm excited to show up in this way. So thank you so much, hope you enjoyed the video and look forward to reading the comments.

Thank you so much for listening to the BetterWealth Podcast. It would mean the world to me if you could hit subscribe, leave a review and share this with the people that you know and love.