In this #tbt we wrap up the Policy Design discussion by going into the details of what Nelson discovered. So many of us buy life insurance for just the death benefit and never think of the possibilities that lie within that contract. Mike continues to challenge us and asks which is more important to you today; cash or life insurance death benefit. It’s always cash. But using this tool we can not only gain incredibly flexible access to cash, but we also get to continually grow the death benefit for those we love and care about. Take a listen, this is an excellent episode that keeps reminding us that we must change our way of thinking.
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Chris Bay:
Welcome to the Life Success Legacy podcast. My name is Chris Bay, and I’m joined today with the founder of Life Success & Legacy, Mike Everett. Mike, in our last podcast we started to talk about the policy design for Infinite Banking. And one of the phrases that you used is, “What’s more important to people? Is it cash, or is it death benefit?” And obviously, for most of our life, cash is more important than death benefit. So now what we want to do is dig in a little bit more into how we design the policies to emphasize the cash value, and then how that is utilized to, for example, turn the wind current, or, people use their cash value for investment purposes, retirement purposes, a variety of things. So can you talk a little bit about the two pieces of a policy design, and what I’m getting into is the base portion and typically what it generates, and then the paid-up addition portion and what it generates.
Mike Everett:
Okay. Traditionally, once again, life insurance was designed almost 100% for death benefit. So one of the things that Nelson discovered was, if you can reengineer or rearrange the way the premium is allocated internally with the policy, there are these two pieces that you’re talking about. We have the base premium. The base premium purchases almost 100% of the death benefit in the life insurance contract. So basically what you’re doing is, you’re taking a certain percentage of the premium and you’re allocating it to what we call the base premium.
Chris Bay:
So in a traditional life insurance policy, most, if not 100% of that premium, is going to go to base-
Mike Everett:
That’s true.
Chris Bay:
… and so it’s going to be 100% going towards death benefit.
Mike Everett:
That’s correct.
Chris Bay:
Okay. So how is this different?
Mike Everett:
Well, then Nelson realized that there was a way to actually create cash in your life insurance contract by adding a piece called the paid-up additions rider. This paid-up additions rider, what it does is it creates almost 100% cash value available in the contract that people can access. Now, there is a certain portion that purchases a little bit of death benefit. Remember, it’s a life insurance contract, but yet, I asked the question again, what’s more important right now, cash or death benefit? We’ve all said cash. We’ve said this a number of times, but we want to reiterate this to the people listening because cash is king, and if we can get access to that cash in some sort of way, and still have the life insurance contract in place, why wouldn’t a person want to do this?
Chris Bay:
Let’s put this into specifics for people. Let’s say that I come to you and I say, “Hey, I want to start an Infinite Banking concept policy. And I want to be able to put, I’m going to say, $10,000 annually into this policy.” Break that out for me, then. If I’m putting money into it, when do I get access to the cash value that I can then utilize for turning wind current and other things?
Mike Everett:
Well, if you were going to put $10,000 in, then there’s a certain way to allocate these dollars. So what we’re going to do is we’re going to take 40% of those dollars or $4,000 of that 10,000, and we’re going to buy the base portion of the policy. Then we’re going to take $6,000 or 60% of those dollars and buy the paid-up additions rider. Now, the easiest way to explain the paid-up additions rider is the Apollo rocket. You know, when it goes up into space, it gets up into space and it’s on the Apollo rocket. It’s got these turbo boosters. Well, after they get up into space, what do they do with the turbo boosters?
Chris Bay:
They drop off.
Mike Everett:
That’s exactly correct, but they need those two turbo boosters to get the rocket up into space. With the way that Nelson created the Infinite Banking concept, you need the turbo boosters or the paid-up additions rider in order to get this thing up and going.
Chris Bay:
So it’s flooding it with cash.
Mike Everett:
That is correct. Now, your question was, when do you have access to that cash? With the companies that we utilize, you can have access to that cash within the first month of starting your Infinite Banking Concept policy.
Chris Bay:
Now, when you say that you’re talking about an annual premium, so someone would pay the full 10,000 upfront.
Mike Everett:
That’s correct.
Chris Bay:
We also have clients who, for various reasons, they decide to do a monthly premium. So would they get access to that money right away?
Mike Everett:
They would not.
Chris Bay:
Okay.
Mike Everett:
Because, the way you explain that to people is, if you were going to write a check on your checking account, how much can you have access to? With whatever you’ve got in there?
Chris Bay:
Right.
Mike Everett:
So if you have somebody who pays an annual premium, they have access to their portion or their 60% of their policy when they pay that premium in the first 30 days. But if you have somebody who goes on a monthly plan, it’s going to take them the full 12 months or annual premium of monthly payments in order to have access to those dollars. In the great big scheme of things, it doesn’t make any difference.
Chris Bay:
Yeah. Yeah. So, if I understand correctly, when we put a chunk of money in, I’m going to get access, or I can borrow against my policy-
Mike Everett:
That’s correct.
Chris Bay:
… and really that’s a loan. It’s called a policy loan, but it’s not really money from my policy. It’s really a loan from the company.
Mike Everett:
That’s true.
Chris Bay:
And they’re using my policy as collateral, which is an unbelievable trade of this is that our policy stays fully intact and it continues to compound and grow for us on the full, let’s say it’s $10,000, even though I’ve pulled out a loan for $6,000.
Mike Everett:
That’s correct.
Chris Bay:
So, we’re never interrupting the compounding interest of our policy.
Mike Everett:
Eighth wonder of the world.
Chris Bay:
It’s unbelievable. Now, some people might say, “Well, I just put in 10,000 and I’m only getting access to six.” Well, let’s talk about capitalization and thinking of our policies as businesses a little bit.
Mike Everett:
Well, we’re going to go back to Nelson’s three main principles. Number one, you’ve got to think long-term. Remember, Nelson was trained as a forester, so he thinks 20, 30, 40, 50 years in advance. Infinite Banking is a long-term thought process, so we tell people, “If you’re not in this for the long haul, this is not a good thing for you.” But number two, you can’t be afraid to capitalize. That means that you have got to put some money into this thing in order for it to work. If you think traditionally about life insurance, and it doesn’t matter if it’s term or whole life or universal life, most of the financial gurus out there say, “Let’s buy as much death benefit as we can and put as little premium in there as we can.” With Infinite Banking, it is completely opposite. We’re wanting to flood this thing with as much cash as we can get and get as little a death benefit as possible in order for you to be able to access the cash efficiently in your own life.
Chris Bay:
In fact, we call our premiums, premium deposits because it deposits into a banking system, really, that we own and control. So, if it’s a deposit into your banking system, do you want that deposit to be a little or a lot?
Mike Everett:
I want it to be a lot, but we need to be careful here because, this is called the Infinite Banking Concept. But we want to reiterate that we’re life insurance guys, and you are purchasing a life insurance policy. And in that purchase, you are creating absolute control of that contract. So you get to decide or control where 100% of that investment goes when you access that cash through a policy loan.
Chris Bay:
Okay. I want to take you back to your analogy of the space shuttle.
Mike Everett:
Correct.
Chris Bay:
Or the Apollo, or whatever it was that you used. And you talked about those booster rockets falling off. And that is what we call the flexible paid-up addition rider.
Mike Everett:
Correct.
Chris Bay:
That flexible piece is an important word. And you talked about, on the rocket, those falling off. Does the flexible PUA, the paid-up addition rider, do those ever fall off the policies, and why?
Mike Everett:
Well, once again, it’s called flexible because you have the flexibility of deciding what you want to do with that. We personally would like people to leave that flexible paid-up addition rider on there, but we can adjust the premium or keep it flexible enough to where you have a place to put some additional cash if you want to. Or you can actually reduce that to a minimum flexible paid-up addition rider payment of $100. Remember earlier we talked about 6,000, but then it goes to a hundred. So that creates a whole bunch of cash flow on your side of the fence, so to speak, when we help you understand how the policy is designed.
Chris Bay:
Yeah. It’d be easier if we had some visuals for people to teach them this next concept. But in theory, if we think of our policies as businesses.
Mike Everett:
Correct.
Chris Bay:
And let’s say we’re in the business and let’s use McDonald’s as an example. Obviously McDonald’s started with one restaurant. Well, now they’re everywhere across the world, right? They franchised them. So if we think of our policies as businesses, are we able to franchise our policies?
Mike Everett:
Absolutely.
Chris Bay:
Nelson, I think, we know this. I’m not sure he says it in his book, but at one point he had 49 life insurance policies.
Mike Everett:
That’s correct.
Chris Bay:
And I think you’re up to what? 17 now?
Mike Everett:
- Almost 17.
Chris Bay:
Yeah. And in, gosh, seven years, I guess of doing my plan, we’re up to six policies. Explain to people why in the world would they want to start adding additional policies?
Mike Everett:
If you look at your policies as a business and your one policies or two policies or three policies are doing well, why wouldn’t you want to go and start more? All we’re trying to do is create a system to where you control 100% of your own cash flow. So, bottom line is, Nelson on page 48 talks about expanding the system to accommodate all your income. He’s helping people think through, why in the world would you want to continue to build policies? But the way we design the policies is, your policy is going to get better every year, regardless of the economy, regardless of the financial landscape in our country. So if that’s true, why wouldn’t you want additional policies at certain time periods as you’re growing this thing?
Chris Bay:
And, theoretically, we’re able to show people that they could actually start a additional policy of roughly the same size every five years without any additional cash out of pocket.
Mike Everett:
That’s true.
Chris Bay:
And so, eventually, aren’t they going to be capped on how much life insurance they could get?
Mike Everett:
There’s a possibility of that happening, but it really takes a large number of years. 15, 20, 25 years before they really need to worry about that.
Chris Bay:
Okay. And obviously we coach people through all of that.
Mike Everett:
That’s correct.
Chris Bay:
That’s part of the strategic planning that we do with people. My great topic, for some people this may be a little too much in the weeds for them, but I think there’s probably some folks out there that, I know this for a fact, that they like to understand the design of the policy and why it’s different than a traditional life insurance policy would be designed. In the future podcasts, what we’d like to do is get into some of the applications of how people are utilizing their policies in their life for the different ways that they do that, whether it’s for business, addressing debt, college financing, things like that.
So, to our listeners, thanks for joining us. Lots more information on our website at lifesuccesslegacy.com. If you haven’t got yourself a copy of Nelson Nash’s book, Becoming Your Own Banker, you can get that at our website as well. We encourage you to read it. Come back and join us again.
In this weeks #tbt, Mike and Chris go into more details about the types of life insurance, why most people buy life insurance, and how Nelson, through his own struggles, came to realize the true power of whole life insurance. This part 1 of policy design does really give context to how Infinite Banking works and really challenges us to think beyond death benefit. Take a listen, heck, read the transcript, this one will have you clamoring for part 2!
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Chris Bay:
Welcome to the Life Success & Legacy podcast. My name is Chris Bay, and I’m joined today with the founder of Life Success & Legacy, Mike Everett.
Mike, we’ve talked in previous podcasts about how Nelson came to discover that whole life insurance, if designed properly, can be an unbelievable tool for really privatized banking, and controlling your own finances and all that. So, what we’d like to accomplish in this podcast is to educate people about different types of life insurance, why whole life insurance is the tool to be used, and why is this type designed differently for the purposes of Infinite Banking? So to begin with, can you just kind of give our listeners a broad perspective on the different types of life insurance that are out there, and why people buy life insurance?
Mike Everett:
Well, traditionally, life insurance was bought for one reason. It was bought for death benefit. If you go back, I’m going to say 40, 50, 60, 70 years, there was really numbers of different kinds of products out there in the life insurance industry, but the only difference was the design of what was going on. Some people, if you go back to my grandpa’s era, what they did was they bought whole life insurance and they bought it for death benefit. What they planned on doing was, they just planned on putting money aside just like you would for a savings account, but they just stored money into a life insurance policy.
There were all kinds of products out there. There was a 20 pay life. That means that you could pay the premium for 20 years and then it was paid up for the rest of the time. There was life paid up at 65. So you paid the premium until age 65, and then the policy paid for itself. Then you had your ordinary life or permanent life insurance, and you paid the premium all the way up to age 99. Basically what happened was, in all of those policies, the traditional life insurance policy, which was bought specifically for death benefit, the policy endowed at age 100. Meaning the death benefit amount and the cash value amount were equal amounts. What they did was, they turned around and they gave you the cash and said, “Hey, thanks a bunch for paying on this thing and thanks for not dying.”
Chris Bay:
I know from my past history in finances, personal, we were following some teachings of Dave Ramsey. Dave is famous for encouraging people to buy term and invest the rest. So can you just talk about term life insurance?
Mike Everett:
Term life insurance is exactly like renting an apartment. You’re basically renting your life insurance policy for a certain time period. There are all kinds of time periods that you can do. You can do annual renewable term. That means that you pay the premium every year and every year the premium goes up. It’s called attained age. As you get older, what happens to the cost of life insurance? It goes up because you’re just a little bit closer to death. That’s annual renewable term. You can get 5-year level, 10-year level, 15, 20, and even up to 30-year level.
If you think about it from an insurance company standpoint, the insurance company offers term life insurance for whatever time period you choose. Five years, you pay the premium for five years and at the end of five years, the premium goes up and you choose another term. 10 years, 15 years, 20 years and so on. If you think about it from a life insurance company standpoint, they just want you to pay your premium. They’d like you to not die. Right before you die, what they’d like you to do is, they’d like you to cancel your life insurance. Term life insurance is the number one profit center of most life insurance companies out there. So why wouldn’t they do that?
Chris Bay:
Yeah, so Infinite Banking obviously does not use term.
Mike Everett:
They do not.
Chris Bay:
You mentioned earlier that term life insurance is kind of like renting life insurance.
Mike Everett:
That’s correct.
Chris Bay:
So if we make that correlation to our living situations, if we’re renting, we’re not building equity.
Mike Everett:
That’s correct.
Chris Bay:
Okay. So then the option is then whole life insurance, and that’s kind of like buying a house where you’re building equity and that equity, we use the term cash value. Can you talk a little bit about whole life insurance and the cash value piece and why that is so important to the concept of Infinite Banking?
Mike Everett:
Well, this is one of the awesome things that Nelson discovered was, he realized through his own trials and his own tribulations, that there was a way that he was building equity. What ended up happening was, he had incurred a tremendous amount of debt. At the time that this had all come due, interest rates had soared extremely high, like 18, 19, 20, 21%. He realized that he had all kinds of equity, or all kinds of value in his life insurance policies, that he could tap into.
Instead of borrowing the money from traditional financial institutions at 18 to 21%, he was able to go to his life insurance policies and do a policy loan. Borrow against the cash value of his life insurance policy and be able to pay off some debts that he had out there. This is exactly what Nelson discovered in his book, Becoming Your Own Banker.
Chris Bay:
So, with a whole life insurance policy, you’re building equity, which can be borrowed against from the life insurance company and then utilized for many different purposes.
Mike Everett:
Correct.
Chris Bay:
Can you talk a little bit about the design of the whole life policy, because the traditional whole life policy… If I went down to some life insurance company and said, “hey, I want X amount of coverage.”, they’re going to design the plan a certain way, but if you went to an Infinite Banking coach, they’re going to design it differently. What are those differences?
Mike Everett:
In a traditional life insurance format, you’re buying literally a hundred percent death benefit. One of the questions that we ask every potential client is, “if we had to ask you right now, what was more important to you, cash or life insurance death benefit, what would you say?”
Chris Bay:
I’m going to say, “cash.”
Mike Everett:
It’s cash every single time. What if there was a way to design the policy where you could have both in ample supply? You would not only have death benefit, but you’d have the cash that you need now. We need cash from right now until the day we die. We only need death benefit one day. What if there was a way to design the policy to emphasize the cash value now, still get a death benefit, but yet really, we need the death benefit 20, 30, 40 years from now, not today. This, once again, was the beauty of what Nelson discovered. He realized there was a way to completely re-engineer the policy to work for you today and still have the death benefit when you needed it 20, 30, 40 years from now.
Chris Bay:
In the middle of Nelson’s book, Becoming Your Own Banker, he uses an example of a business person. He’s an equipment finance person, and he shows a couple of examples. One is first, this business owner simply putting money into his policy and just letting it be life insurance. It turns out to be a really incredible result for him. Then what Nelson shows is, if he actually uses the cash value of his policy and takes loans and utilizes that to finance his business expenses in his life, that he actually ends up with a better result. Simply by using his policy to finance everything in his life. That, sometimes for people, is a hard leap to make.
We always encourage them. If you think like a banker… In fact, in our boot camps, we say, “we’re going to remove your brain from your skull today and we’re going to replace it with a banker’s brain.” We want you to think like a banker. How do banks make money? If we can apply that to utilizing their own whole life insurance policy, but having it designed to emphasize the cash value portion versus the death benefit, it’s an unbelievable tool for banking.
Mike, thanks for explaining some of the ins and outs of life insurance. This is a topic that I think is going to take a little bit more explaining. I think what we’ll do is do another podcast that digs in a little bit deeper. We’re going to talk about the base portion of the policy. We’re going to talk about the paid-up addition portion of it and how those policies really can be thought of as businesses and how we can actually franchise our policies. Thanks for the information. Listeners, thanks for joining us and catch us on our next podcast.
In this episode Mike and Chris dive into Willie Sutton’s Law. Nelson had a lot of well thought out opinions on things. So why does he follow up the Human Problems with a chapter about a notorious bank robber? Well, I will steal from Nelson (via Willie), “Wherever wealth is accumulated someone will try to steal it.” Watch, listen and enjoy this first episode of 2021!
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The first chapter of Section 2 is the Human Problems… Gulp. Nelson knew it was important to tackle this topic first, because we all struggle with these issues. The whole chapter is one page, but it’s a packed one page! Take a listen to how Mike and Chris dissect the human problems and even give examples of their own personal struggles.
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This #tbt podcast is from August of 2017 and over three years later, it’s still one of the most asked questions. How do you actually get started in Infinite Banking? Listen to how Mike and Chris reframe the conversation and you might just realize that getting started is the easy part, it’s getting out of our old way of thinking that can be most difficult.
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Chris Bay:Welcome to the Life Success Legacy podcast. My name is Chris Bay and I’m joined today with the founder of Life Success & Legacy, Mike Everett.
Chris Bay:
Mike, today we want to talk about something that comes up a lot of times in our boot camps, in our seminars that we do, as people start to learn about the Infinite Banking Concept, they want to know well how does this apply to me? How do I get started? So I guess probably the best place to start with that is going back and talking about the wind current and how most people, not everybody, but most people are really fighting what we call a headwind. Can you talk a little bit about that?
Mike Everett:
Well, in some of our older podcasts we talk about a headwind tailwind, but we’re going to just specifically talk about the headwind right now. What is the headwind when you’re talking about your finances? Do we have a mortgage on the house? That’s a headwind. Do we have a loan on the car or cars? That’s a headwind. Do we have credit card debt? We have student loan debt or bank loan debt. That is what we call a headwind.
Mike Everett:
And if you think about it, when you get paid on Friday where does the money go? It goes to the bank. And then after you get that money in your bank what do you do with it? You have to make your house and cars and credit cards and student loans and bank loan payments before anything else happens. That is what we call the headwind, you are fighting a wind current because that money is not under any of your control.
Chris Bay:
And in Nelson’s book, Becoming Your Own Banker, he talks about the headwind and he talks in terms of interest and the amount of interest that the average American is sending out the window. Talk about that amount and what that’s doing to people’s lives.
Mike Everett:
Well, Nelson talks about the interest that we spend on all of that outside debt so to speak. He says that it’s 34,5% after taxes. So can you imagine the headwind that people are really truly fighting after taxes, that almost 35% of their money is going to interest alone?
Chris Bay:
Wow.
Mike Everett:
That’s a mountain.
Chris Bay:
It is. And yet our mindset, what we’ve been taught to think about money is, okay, we’re financing all this stuff in our life and yet we’re trying to save how much and put it towards retirement or some kind of tax qualified plan, an investment or so forth. And how much are we actually sending away for those types of things?
Mike Everett:
Well, for investments, for your 401K, IRAs, mutual funds and the like, you’re supposed to be saving somewhere between five and 10%. So if you think about it you’re sending 34,5% and supposedly saving five to 10%. Well none of that even makes sense if you really turned around and you looked at it according to the airplane world. If you were fighting a headwind of 345 miles an hour let’s say, and you’re… Let’s just say you’re saving 10% and your airplane goes 100 miles an hour, well, you’re going backwards.
Mike Everett:
And the financial gurus out there are saying, “Well, oh by the way maybe we could get your airplane to go five miles an hour more.”
Chris Bay:
Yeah.
Mike Everett:
So none of this really makes any sense to be honest with you, but that’s the awesome thing about what Nelson Nash’s book becoming your own banker has taught people. There is a way to change the headwind into a tailwind.
Chris Bay:
Well, I always… When I talk with people it just makes sense when you say, “Okay, so average America has 34,5% of their dollars leaving their control in interest.
Mike Everett:
Yep.
Chris Bay:
And they’re sending another five to 10% to investments, and those investments are not guaranteed.
Mike Everett:
No they’re not.
Chris Bay:
So what would you rather have? Would you rather have the maybe eight to 12% maybe return on an investment or would you rather have the 34,5% that’s going to interest, that if you just turn the wind current from a headwind to a tailwind it’s guaranteed to you. I mean it’s pretty obvious right?
Mike Everett:
It is obvious.
Chris Bay:
Okay, so let’s talk about that. We talk in terms of outside debt, that’s money that we’re sending out to somebody else, car loans, student loans, mortgages, those kinds of things. And inside debt, we want to switch that outside debt to our side and make it inside debt and then we’re making those payments to ourselves. Can you describe how that happens?
Mike Everett:
Well, one of the things that we get people to understand is we are trying to get these things under our control, which is then the inside debt that we’re talking about. So imagine if all of a sudden you were able to create a system where you controlled your car payments and credit card payments, student loan payments, and even possibly your mortgage.
Mike Everett:
So think about those payments that you are planning on paying for the next five, 10, 20, 30 years to somebody else, and then all of a sudden we were able to create a system to where you were making those payments to yourself. This is when economic value-added comes into the picture, EVA, which is one of the most powerful things in Nelson’s book. And really all we’re doing is we’re adding value, we’re telling people, “Your money has a cost.”
Mike Everett:
And what we’re trying to do is we’re trying to transfer that control that you were making to outside debt to your control and now you make those payments to yourself. It completely changes the way you think about your money.
Chris Bay:
So if I’m able to switch my outside debt where I’m paying to other people, and I shift it over to my side of the scales where it’s now inside debt, and I’m an honest banker and I apply economic value-added, that means I’m making those same payments to myself which then I get to reuse those dollars, don’t I?
Mike Everett:
That’s correct.
Chris Bay:
Okay. So here’s the question that people always have, and if I’m listening right now to the podcast, I’m saying, “Well that sounds great but how do I get the outside debt to my side of the scale and make it inside debt?” That’s the question we want to answer right now.
Mike Everett:
Well, part of that thought process is how does this apply to me?
Chris Bay:
Mm-hmm (affirmative).
Mike Everett:
Okay, so people go… Just like you said, this all sounds fine and great, but how do I get this thing going for me? We have what we call activators and we teach this in our boot camps. People go, “Well, how do I get started?”
Mike Everett:
Well, we throw the question out to the group, where would you find money if you were thinking about doing something like infinite banking? And some of the things that come back to us are home equity lines of credit, cash, CDs that are setting in the bank. We even have some people utilize their 401ks. There are all kinds of ways for you to access dollars and create your own activator in order to get Infinite Banking implemented in your life.
Chris Bay:
Well, I remember examples like so many of us, and this would be us included back when we were doing another program, a financial program, as we were paying extra on our debts. So we were sending extra money to somebody else that we were losing control of that money. We have folks who… Basically what it is is with Infinite Banking is we were trying to increase the amount of money that people are using and controlling and sending their direction rather than sending it out of their control to somebody else.
Chris Bay:
We want to increase the pool of money that they can control. And we help… As you mentioned, it’s all… It’s unique. It’s individual. And where do people find out what can work for them, when does that happen?
Mike Everett:
Well, it happens in a number of different ways. It really happens mostly when they come to one of our boot camps or if they go to one of our online boot camps that we do every other Tuesday. We have these online boot camps where we’re creating ways that they can educate themselves to get the tools that they need in order to make the decisions of whether or not infinite banking is for them.
Chris Bay:
Mm-hmm (affirmative), yeah. And what’s always surprising is people may not think that they have a pool of money that they have control of, and that’s where the coaching sessions that we do with them is we help them discover where that pool of money is that they have control of and how they can leverage that pool of money to turn their outside debt to inside debt and start taking advantage of those dollars and getting multiple uses of those dollars.
Mike Everett:
Chris, this could happen really quickly for some people because everybody has a pool. Every single person has a pool but nobody has ever showed them how to take advantage of the pool that they have access to.
Chris Bay:
So when we do our client conversations we talk with people about what are their goals, those things, and a lot of times debt is one of the things that they’re concerned about. Give the listeners just a feeling of in general, how quickly are people able to shift their outside debt to inside debt?
Mike Everett:
Well, it really depends on the access that people have to their own pool. The average client, and I’m just talking about the average client, can be 100% out of debt, to any outside debt, any other financial institution I’m talking about, in five to eight years.
Chris Bay:
Yeah.
Mike Everett:
But we do have some people that have the ability to change that wind current in the first year.
Chris Bay:
Yeah, yeah. Some cases the first month, which that sounds insane to people probably but it’s pretty fun to be a part of designing those. Mike, I appreciate you talking about how people can get started. This may seem a little vague to folks and really for the best… The best way for them to find out, I always tell people, “Would you be willing to spend $0 to see what was possible?”
Mike Everett:
Absolutely.
Chris Bay:
I don’t know why you wouldn’t, but if people want to find out they can contact us through our website at lifesuccesslegacy.com.
Chris Bay:
Again, we always encourage people to educate themselves through either coming to one of our boot camps, joining us on a webinar. They can register for all of those on our website. And of course we encourage them to order Nelson Nash’s book, becoming your own banker, off of our website, and read that and educate themselves.
Chris Bay:
Next podcast we’re going to get into and it may take a couple of podcasts, and that’s getting into policy design. Why are the policies for IBC different than what you might find in other circumstances. Mike, thanks for joining us and listeners, thanks for joining us.
This #tbt is awesome. Mike and Chris dive into the heart of who we are. Why do we exist? “To inspire financial hope and freedom by revealing little-known truths about money while investing in trusting, long-term relationships.” That sentence is more than just our mission statement. Take a listen, you will not be disappointed!
Original recording: July 2017
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Chris Bay:
Welcome to the Life Success & Legacy Podcast. My name is Chris Bay and I’m joined today with the Founder of Life Success & Legacy, Mike Everett. Hey Mike, we’re excited today to talk a little bit on a topic that is foundational to Life Success & Legacy, and that is who is Life Success & Legacy? Because a lot of times people are like, “Okay, great. I’ve researched this Infinite Banking thing and I’m interested in learning more about it, but who are these people that are going to be teaching me, designing plans, working with us?” So, I was just wondering, tell us a little bit about how Life Success & Legacy has come together, what drives it, and we can dig into more details about that.
Mike Everett:
Well, Chris, it’s funny that we’re discussing that today. I remember a trip that you and I had made to Iowa.
Chris Bay:
Mm-hmm (affirmative).
Mike Everett:
And on our way home, you started firing questions at me right and left about what my passions were, why I enjoyed Infinite Banking, what is it that we were trying to achieve? And I remember it to be not just an informational Q&A, but there was some pretty intense, emotional stuff that was going on too, to find out what this thing was all about and where were we going with it?
Chris Bay:
I remember that conversation. It was a good one.
Mike Everett:
It was. And then I remember by the time we had got done with our four and a half hour trip, you had given me a few things to think about. But then the question that arose was, why does Life Success & Legacy exist? And I think what culminated from that whole conversation that we had literally four and a half hours was to inspire financial hope and freedom by revealing little known truths about money while investing in trusting long-term relationships.
Chris Bay:
I remember that conversation well, like it was yesterday. I remember it was dark and I had my phone out and I still have in my notes the results of that conversation. Because as you were talking and I was asking you questions, for me as somebody who is new to the organization, I wanted to know more about what was this whole thing about. Why were we really doing it? To me, it’s got to be purpose driven and it’s got to be bigger than just helping people with their money. It’s got to be a broader scope, a broader purpose. And so yeah, you did a fantastic job of answering the questions that I was asking. And then we just put it together in this, I guess, purpose statement, we just call it why we exist. I want to break it down just a little bit. When you look at the different sections, there’s three different sections to that why we exist. Can you talk about those different sections?
Mike Everett:
Well, I’m going to start with the last line, investing in trusting long-term relationships. This is really about friendships, it’s about relationships. And when we turn around and we’re talking and teaching and educating people about Infinite Banking, and trying to get them to say, “Why would we invest our money with you? Or why would we trust you to handle this thing in our lives?” We realized that there must be a tremendous amount of trust in the relationship. We don’t want the relationship to happen for the next 12 to 18 months, we want the relationships to happen for the next 30, 40, 50 years.
Chris Bay:
Mm-hmm (affirmative).
Mike Everett:
And so that is where I would start, number one. Number two is we’re giving people information. We are educating people in ways that 99.9% of all financial planners will not take the time or the energy to give them these kinds of truths about money. So trusting long-term relationships, little known truths about money, but yet where we’re all trying to go is we want financial hope and freedom.
Chris Bay:
Mm-hmm (affirmative).
Mike Everett:
So there is a great big picture here that we are trying to create for our clients, but yet in the midst of all of this education, we are giving them the tools that no other financial institution or no other financial guru will take the time to give to them.
Chris Bay:
Yeah. The first part of why we exist to inspire financial hope and freedom actually goes, in my view, even beyond that. Because so many times there’s a barrier for people to really create the life that they want and that barrier is their finances.
Mike Everett:
Yep.
Chris Bay:
And so once we teach some of these truths about money and they apply the Infinite Banking concept in their financial world and they take control of that process, all of a sudden it opens up all kinds of possibilities for our clients to actually create the lives that they want. I mean, we’ve got quite a few people that have quit their jobs because they’ve been able to remove those barriers and they are actually now pursuing dreams that they’ve had for many, many years in their life. That to me is really rewarding and it’s motivating. And it’s one of the reasons that I love doing the work that we do.
So I want to touch on that second piece about teaching little known trues about money. Talk to us a little bit about the philosophy of Life Success & Legacy and educating people. Do people have to be qualified to work with Life Success Legacy? What does it cost to come to a bootcamp to learn? When we design plans as a team for our clients, what is involved in the cost and those kinds of things?
Mike Everett:
Well, one of the things that we have discussed at length is we shouldn’t get paid until we add value to somebody. So when we put together a plan or an illustration or an educational seminar, or a bootcamp, or a one-on-one conversation, we don’t charge anybody anything. The only cost that someone might have is the cost of Nelson Nash’s book, Becoming Your Own Banker. The cost to them is $20. If they’re standing in front of us, everybody’s got a $20 bill in their pocket. So we charge $20 because we want people to have a little bit of skin in the game before we move forward. And usually, if people will buy the book, they’ll take time to read it. But once again, we have these educational bootcamps and we have educational online bootcamps, and we don’t charge anybody anything to attend any of those things because we would like people to investigate and spend some time investing in themselves, time, energy, a little bit of money, in order to find out if Infinite Banking is really for them.
Chris Bay:
Yeah. I tell people back in my education days, the 22 years I spent in education, I spent a lot of time designing strategies and plans for kids to try and help them be motivated to be in school, and some of them just really did not want to be there. And so I made a promise to myself in working with clients, I’m not designing behavior plans for the clients. I’m only working with the people who want to learn about this concept. So in my mind, if people are willing to come halfway, I’ll meet them halfway and I will teach them as long as they want to learn about this concept, until they decide they want to move forward, or they say, “Chris, I just don’t think this is for us.”
Tell me a little bit about the team. Because when you first started, we joke about this all the time as you being a rugged individualist out there, moving along solo, but now there’s a team with Life Success & Legacy. Talk a little bit about that team, how the pieces fit together, and how people have come to join the team.
Mike Everett:
Well, let’s touch on the rugged individualist for just a second. You and I, we literally kid back and forth on this. When I first got started in this, I told you within a couple of months of you coming on board was that you were probably going to be out on your own in the next 18 to 24 months. But in the midst of all of that, there were some pieces that were missing in Life Success & Legacy that you brought to the table. So, you were the first piece, or the first edition, the first team member, along with myself, that brought Life Success & Legacy to where it is today.
I am a shoot from the hip kind of guy, there’s not much organization, let’s get done what needs to be done right now. But you brought this organizational thought process and this let’s get some things done that would make sense for the organization, not just in the next two to three weeks or two to three months, but for the next four, five, six, 10, 15 years from now. And that’s really what we’re doing with Infinite Banking, we’re making people think long-term, and I never did that personally. So me to say that I’m thankful for Chris Bay is pretty incredible. And then all of a sudden it was just like, now we were at a place where it made sense that maybe we should build a small organization.
Chris Bay:
Mm-hmm (affirmative).
Mike Everett:
I remember when we got started, I was calling people and having people do website stuff, I was designing brochures and I was doing all this on my computer. I had absolutely no idea what I was doing, but then all of a sudden I got introduced to a guy by the name of Mike Crawford.
Chris Bay:
Yeah.
Mike Everett:
And this guy is just a wiz with social media, with our website, with some of the internet stuff and how we’re even creating these podcasts. So him to come on board as part of a team too, now that’s our Lawrence team, and now what we’ve started to do is we’ve started to build out from that. We have Chris Garret’s out in Pennsylvania, we’ve got Clint Bradfield down-
Chris Bay:
Wichita.
Mike Everett:
…in Wichita. And then we’ve got Joe Frazier out in Western, Nebraska.
Chris Bay:
Yeah. Matt Zimmer up in North Dakota.
Mike Everett:
I’m telling you. So this thing is continuing to build, and we’re still adding pieces to this puzzle, which is very, very exciting.
Chris Bay:
The thing that I’ve really enjoyed as this organization has grown is that each person who joins, and we’re pretty selective in who we add to the-
Mike Everett:
Very.
Chris Bay:
Integrity has got to be a huge piece of it. But we know whether they have integrity because every single person who’s joined our team has been a client.
Mike Everett:
That’s right.
Chris Bay:
There’s nobody who has come in and they’re already an IBC coach or a life insurance agent, or somebody out there doing this work. These are people like myself, like you, like Crawford, and others who were in other professions. And they experienced IBC personally, and what it can bring to their life. And they were so impassioned by it that they chose to join on, to teach other people about this.
Well, I love the organization that we are. I feel like we’re doing things the right way. I think some of the common values go back to that, why does Life Success Legacy exist? And it is, it goes back to inspiring financial hope and freedom, it’s about educating people about money in a different way, and it’s about long-term trusting relationships. How many of our clients now are our friends?
Mike Everett:
It’s pretty incredible. In fact, how many texts a week? How many phone calls a week? How many emails a week do we get from clients just saying, “Hey, thank you,” or, “Hey, I’ve got a question about this,” or “How do I implement that?” So it’s very exciting stuff.
Chris Bay:
That’s right. Well, thanks for sharing with that, Mike. Our next podcast that we’re going to talk about is, well, okay, so we’ve learned a little bit about Infinite Banking, we’ve learned a little bit about who Life Success & Legacy is, how do people get started? How do you take those first steps getting started? So we’ll look forward to that conversation next. Thanks for joining us.
We are officially buttoning up Part 1 of Nelson’s Becoming Your Own Banker book review after thirteen AWESOME episodes… whew!! We’re having so much fun taking this deep dive into each chapter of this life changing book.
In this episode, Mike and Chris go through the review on page 27 (5th edition) and start with a quote. “The importance of imagination -it is more important than knowledge.” This perfectly captures the simplicity and overwhelming value of how Nelson chose to write this book. Setting the stage early with real stories about how he himself ‘fell’ into Infinite Banking. As we continue through this adventure, our imagination will be of upmost importance. Our Infinite Banking voyage will be marred with us fighting not to fall back into the rut of our ‘old’ way of thinking.
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In this weeks #tbt podcast repost, we wrap up the four pillars of Infinite Banking with Tax Free Wealth Transfer. This is something we all think about when it comes to traditional life insurance purchasing, right? We all buy life insurance for death benefit… Well, that’s where Infinite Banking kicks traditional (old school) thinking in the tail! With a properly designed whole life policy, we get to use the equity inside the policy throughout our lives. Then being good bankers we repay ourselves through the magic of wind current. That’s not all, the policy(ies) get better every year by contract, and in the end, we pass on more than we could have ever imagined to the ones we love and care about most! WOW… you should reread that. Anyway, listen, read the transcript or do both. Whatever you do, don’t skip this one!
Chris Bay:
Welcome to the Life Success & Legacy podcast. My name is Chris Bay and I’m joined today with the founder of Life Success & Legacy, Mike Everett. Hey Mike, last time on our podcast, we talked about the third area that Infinite Banking can address again. The first one, just to review for our listeners, the first is eliminating debt rapidly, typically three to eight years. Second is how to finance everything in your life even after you’re debt free.
The one we talked about last time was on a tax-free retirement or as Nelson puts it, passive income. What we’d like to talk about today is how do we then transfer wealth when our time on this Earth is done? This really speaks to the brilliance of Nelson Nash. He knew that banking was an unbelievable, unbelievably powerful tool. I mean, you always talk about if you drive up and down the streets in any town, what are the nicest buildings?
Mike Everett:
Banks.
Chris Bay:
The banks. So if Nelson understood that banking was really powerful, but not everybody can get into the banking business the traditional way. He actually discovered a way where you and I, common folks, common business people could actually create their own banking system. The key was where to store your money.
Mike Everett:
Correct.
Chris Bay:
Talk about that.
Mike Everett:
Well, once again, I talk traditionally first because we were taught to put our money in a savings account, or a checking account, or a mutual fund, an IRA, a stock account, or a 401k, but as most people have found out, when you start getting into tax qualified plans, like a 401k, a 403(b), mutual funds, annuities and such, having access to that money is pretty tough. So what Nelson has done is he has realized that because of the way life insurance was created and oh, by the way, life insurance was created more than 125 years prior to 1913, which that’s when the income tax law was put into place.
Everything that was created after 1913 is a part of the income tax code, but traditional dividend-paying whole life insurance with a mutual company is not a part of that. But what Nelson discovered was, was the re-engineering or the redesigning of the policy to flood it with cash versus the death benefit. Make sense?
Chris Bay:
Yeah. So typically a life insurance policy is designed for the death benefit. We want the death benefit to be as high as possible and we want the cost of that life insurance to be as little as possible. That’s why term is so-
Mike Everett:
That is traditional, that’s correct.
Chris Bay:
… yeah. But what Nelson figured out is if you decrease the emphasis on death benefit and you increase the emphasis on the cash value part of the life insurance policy, you can accomplish multiple things. One is, you can use it to finance your life and then at the time when you actually are going to need that death benefit, at the chance of when you are going to pass away, there is plenty of death benefit available. When we go back to the equipment financing gentleman that we talked about in our last podcast, by the time he needed that death benefit, he had more than enough.
Mike Everett:
Yeah, it was two to four times the amount of death benefit than if he would have just bought a traditional life insurance plan. So, just because of the engineering of the plan, what happens is not only does the cash get higher, but the death benefit outperforms even the cash as time goes along.
Chris Bay:
Wow, that’s pretty amazing. Now we say that in the fourth area is that it is tax-free wealth transfer.
Mike Everett:
Correct.
Chris Bay:
Why is that?
Mike Everett:
Well, because you, as the owner of the policy, you get the opportunity to direct exactly where you want that money to go. Most people because of their kids, grandkids, et cetera, they want the money to flow down into the family. That is part of the long-term thinking that Nelson helped us with who are Infinite Banking authorized practitioners think through, because we want that money to flow income tax-free to the next one or two generations as life happens.
Chris Bay:
So thinking long-term Nelson at one point, I believe had 49 life insurance policies.
Mike Everett:
Correct.
Chris Bay:
So talk to me about how his strategy was with those 49 policies.
Mike Everett:
Well, basically, all the policies weren’t on him. He had policies on him. He had policies on his wife. He had policies on his kids, grandkids, and now great-grandkids, but as time goes on, once the future generations show responsibility, what he’s done is, he doesn’t have 49 policies anymore. What he’s done is he’s gifted those policies over to the next generation, or even the next two generations as it has, because Nelson is now 85 years old. So he’s transferred that cash or those policies to those generations so they can begin using those policies as well.
Chris Bay:
So he signs over those policies, the ownership of those policies-
Mike Everett:
Correct.
Chris Bay:
… to his kids, grandkids, great-grandkids, et cetera, when they demonstrate responsibility and an understanding of how to utilize IBC with those policies. Now, here’s the question, when Nelson graduates, when he leaves this earth, there’s going to be a death benefit attached to the policies on him, correct?
Mike Everett:
That’s correct.
Chris Bay:
What happens with that death benefit?
Mike Everett:
That death benefit goes income tax-free to the heirs or to the beneficiaries that Nelson has determined would get that money, income tax-free, I might add.
Chris Bay:
Yeah and so for those other people who have IBC plans already working, that money can then go into those policies, correct?
Mike Everett:
That’s right.
Chris Bay:
Now, pretty amazing concept that this man has created.
Mike Everett:
It’s incredible.
Chris Bay:
Yeah, I know it’s changed my life and your life-
Mike Everett:
For sure.
Chris Bay:
… and our client’s lives as well. Well, to learn more about all of these concepts, we, again encourage you to go to our website, lifesuccesslegacy.com and get yourself a copy of the free eBook by Kim Butler, Financial Planning Has Failed, and we have other resources on our website. You can also order the book, Becoming Your Own Banker by Nelson Nash.
Our next podcast, what we’re going to talk about, a lot of times people say, “Well, how in the heck do we get started?” We use the term activator. So we are going to talk in our next podcast about how do you activate this plan? How do you turn the wind current and get that money flowing your direction? Hope you’ll join us on our next podcast. Thanks for joining me, Mike.
Mike Everett:
Thanks, Chris.
This podcast is a wrap up of section one of Nelson Nash’s Becoming Your Own Banker. Mike and Chris highlight the chapters, review key points and sum up the information packed section. After you watch this one, go back and watch the other episodes in this chapter!
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