Life Success & Legacy Triagle

Review of Part 1 – BYOB #14

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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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Life Success & Legacy Triagle

Tax Free Wealth Transfer

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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.

Life Success & Legacy Triagle

Section One Wrap Up – BYOB #13

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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Tax-Free Retirement

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In this weeks #tbt podcast, we dive into the third pillar of Infinite Banking. It is probably something that all of us have pondered recently, considering the volatility of the markets with its roller coaster highs and lows. Yes, I am speaking of retirement. That formidable ambition that can keep us up at night wondering if we’ll have enough money or when is the right time to start taking withdrawals? What if you could have your money in a vehicle that isn’t tied to the market ups and downs? What if your money could be withdrawn tax-free? What if you could use and grow your money on your own terms until you choose to retire? Listen to this short, but informative, episode to hear how Nelson taught us a better way. A way in which the performance of our money isn’t reliant upon someone or something other than ourselves.

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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’ve been talking about the four areas that Infinite Banking can address for people. First was eliminating debt rapidly, typically in 3 to 8 years, by turning the wind current. Our last podcast we did, we talked about how to finance everything in your life and applying economic value added or EVA, or as Nelson says, “Don’t steal the peas.”

Chris Bay:

In this next conversation, what I’d like to talk about that I think is going to be really interesting to people, and that is how to get tax-free retirement. Most of us have come up during a time period where we have been told to put our money into certain kinds of tax qualified plans or markets or things like that. So what I’d like for you to do is kind of describe the landscape of what most people know about. Most of the noise that we hear out there about retirement. Let’s talk about that first. And then what we want to do is transition to what are alternatives for that.

Mike Everett:

Okay. So here’s the way I did things before I learned about the Infinite Banking concept. I got taught to put my money aside into a 401(k), an IRA, a mutual fund, and I was going to do this systematically over a time period.

Chris Bay:

Mm-hmm (affirmative).

Mike Everett:

You start out when you’re 25 to 35 years old and you start putting your money aside. Now, you’re supposed to do it systematically, and you’re going to do it tax-free right now, is that correct?

Chris Bay:

That is correct.

Mike Everett:

Okay. So you’re going to think through this thing with a customer or a client and help them understand why these things do or do not work. So one of the questions that I ask right off the bat is, are income tax is going to go up or down?

Chris Bay:

And if you look historically, the answer is yes.

Mike Everett:

That’s correct.

Chris Bay:

It’s going to go up.

Mike Everett:

The second question I would ask somebody is, number two, the money that you have in your checking account or under your mattress, is it worth more today or is it worth more tomorrow?

Chris Bay:

Today due to inflation.

Mike Everett:

That’s correct. Well, they keep cranking out dollars in the basement of the White House. And so the dollars are going down. Well, number three, when thinking of income taxes, you want to pay on the seed, the little amount, or do you want to pay on the harvest, the big amount?

Chris Bay:

I’d rather pay on the little amount.

Mike Everett:

But yet everything that we’ve been taught to do with our money, we take money, we set it aside income tax-free into a retirement plan, an IRA, a mutual fund, and it grows income tax-free. And then 20 or 30 years from now is when we start pulling money out. And you and I both agree that income taxes are going to go up and the value of the dollars are going to go down. So the dollars that we’d have access to 20 or 30 years from now are worth less or worthless, whichever you like.

Chris Bay:

So we’re paying higher taxes with dollars that are worth less. And all those tax qualified plans are assuming that that money is going to increase. But I remember a conversation with a teacher back in 2007, 2008, who came in and announced in the fall that she was getting ready to retire. And we celebrated. And yet in the spring, she came back into my office and said, “I’m not going to be able to retire.” And the reason was, what happened in 2007, 2008?

Mike Everett:

We had our fallout [crosstalk 00:03:42] financially.

Chris Bay:

That’s right. So the market crashed. So her money that was sitting in one of those tax qualified plans, they lost a great amount of it.

Mike Everett:

I guess. So the question is, was there money guaranteed?

Chris Bay:

No.

Mike Everett:

There you go.

Chris Bay:

So I filed that away in my head. That was before I knew about Infinite Banking. When I started learning about Infinite Banking and that my money was in some, in a vehicle that was safe, not only safe, but guaranteed by contract to grow, that gave me security. I love that. Okay. So we’ve talked a little bit about how people have been told to put their money into something, [crosstalk 00:04:17] those tax qualified plans. So now I’ve never heard about IBC, let’s pretend, and I want to learn about an alternative. And I’m curious about retirement. Talk to me about what IBC can do for retirement.

Mike Everett:

Well, we talk about this all the time. Really what we’re doing is we’re re-engineering a life insurance policy, so people can have access to their money in an income tax-free environment. So one of the things that Nelson says is people want access to those dollars. Well, they have access to those dollars in an income tax-free environment, because we’re going to show them how to borrow those dollars out of there without actually making the system or the contract null and void.

Chris Bay:

Right.

Mike Everett:

So what we’re trying to do is… I chuckle about this. I say, “How big a check can you write from your checking account?” Well, how much have you put in? The same is true with either your retirement through a 401(k) or with your life insurance policy, the cash values are the equity that you have, how much have you put in? So the more you put in, the greater value you have, that means that the dollars that you have access to will have greater value as well. This isn’t rocket science what we’re doing.

Chris Bay:

Right. So as we’re putting those dollars in, and I like to think of my premiums, my life insurance premiums, rather than thinking of them as bills, I think of them as deposits. And I want to put in as big a deposits as I can so that I have money to take out and finance my life. But also I’m thinking ahead to, let’s say, I want retirement, or as Nelson calls it, passive income, that’s money that comes to us and we don’t have to do anything to earn it. So if I want to be able to pull money from my life insurance policy as retirement money and live on that, how does that work and how does it impact my overall policy?

Mike Everett:

Well, a great example would be in the Equipment Financing section in Nelson’s book, Becoming Your Own Banker. By the way, you can get that on our website at lifesuccesslegacy.com. In this particular section of Nelson’s book, it goes into a great detail about a guy who has a policy. He creates his own policy. And then in the very first section, it talks about him just putting the money in there and never using it.

Chris Bay:

Just leaving it as life insurance, [crosstalk 00:06:50] he really doesn’t understand IBC.

Mike Everett:

He absolutely doesn’t. And so what he does is he makes his premium payments and he leaves all of the money on deposit with the life insurance company. Now, the great thing about it is after he does that, after he gets to retirement age, he has access to $92,000 a year in retirement income. Now, if you knew somebody who got $92,000 a year, you’d be excited, but then Nelson goes into detail in a number of different ways. And we’re just going to move right to the end of the Equipment Financing section, where the more he used it to finance all of the stuff in his life, trucks and equipment, et cetera, et cetera.

Mike Everett:

He had access to more dollars because he utilized the policy and he implemented economic value added. And he made all of those payments back to himself over a time period. So instead of taking $92,000 out a year, he had access to $225,000 a year. The question I always ask then is, did it have anything to do with the insurance company? It had absolutely nothing to do with the insurance company. It had to do with how he functioned with his own dollars.

Chris Bay:

I love that because what it does is it puts the onus, it puts the control on me. And when people say, “Well, what with Infinite Banking can go wrong? What’s the risk.” We always say, “We are the risk.”

Mike Everett:

You are.

Chris Bay:

If we don’t treat the system right. If we don’t apply economic value added, and we don’t put the peas back on the shelf, we are the ones who can mess it up, but it’s not at the risk of the market or anybody else. Well, so then I know in that case of the Equipment Financing in the book that Nelson wrote, I notice that the cash value continues to grow even though he’s pulling out $225,000 a year, how does that happen?

Mike Everett:

Well, by the time you get down the road, the dividends are so large inside these things what’s happening is it’s continuing to buy paid up additions, which adds to the base of the policy, which turned around, increases the death benefit in these things. It’s not magic, but it seems like it’s magic.

Chris Bay:

So he’s pulling out $225,000 a year, right? And his cash value is still continuing to grow, which for a lot of people, one of their main concerns is am I going to run out of money in my retirement? And when you capitalize a policy like this and you let the system grow, the beautiful thing is you’ll never have to worry about running out of money. And oh, by the way, in that Equipment Financing, how much death benefit did he pass on?

Mike Everett:

Well, in the early stages, it was $1.3 million. But as he moved down the road, it was three, four, $5 million. So the numbers just get bigger the more you use it.

Chris Bay:

And that policy was designed for cash value, banking purposes, not death benefit.

Mike Everett:

That’s correct.

Chris Bay:

So isn’t that amazing that we can use it now, but then still be able to pass on assets to our beneficiaries in the future?

Mike Everett:

It’s opposite of everything we learned about money.

Chris Bay:

Yeah. That’s good. Mike, thanks for talking through us a little bit about retirement and passive income and the use of Infinite Banking. Again, we encourage our folks to go to our website lifesuccesslegacy.com. If you haven’t downloaded our eBook, Financial Planning Has Failed by Kim Butler, good friend of ours, we encourage you to do that, that’s free. And also you can access order a book by Nelson Nash, Becoming Your Own Banker. Our next podcast we’re going to talk about is thinking long-term, which is Nelson’s number one principle, and that is, how do you pass on assets tax-free to your future generations? Join us for that. Hey Mike. Thanks a lot.

Mike Everett:

Thanks, Chris.

Life Success & Legacy Triagle

Learn How to Finance Everything!

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In this #tbt episode, we’re getting into the second pillar of Infinite Banking; How to Finance Everything! This is a critical aspect of Infinite Banking and it can uncover limitless possibilities. As Nelson used to say, this concept, and the ideas within are only limited by your brain. Listen to this early podcast and let us know your thoughts.

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 when we were talking on our podcast, we talked about how to turn the headwind into a tailwind and designing plans, where we get people a debt-free in a short amount of time, typically three to eight years, without actually changing their cashflow. Today what I’d like to do is deal with the second aspect of what infinite banking can do for people and that is actually, once you’re debt-free, learning how to finance everything in your life or your business. So we talk a lot about the concept of EVA, economic value added. What does that mean? Where did it come from and why is that important when you think about creating your own banking system? Can you talk a little bit about that Eva and why it’s important?

Mike Everett:

Economic value added is probably the second most important topic that we talk about. Obviously changing the wind currents number one, economic value added would be number two. The bottom line is all the concept amounts to is the recognition of the fact that your capital has a cost, as well as that which you have borrowed from banks. So the easiest way to explain that is on this side of the scale, and I always do this with folks, on this side of the scale, you’ve got your house, your cars, your credit cards, et cetera, you have to make those payments, correct?

Chris Bay:

Correct.

Mike Everett:

Okay. So what if in this relatively short time we can move all of that debt to your side of the scale, meaning that means that you own the debt, the house, the cars, the credit cards, et cetera. So imagine if infinite banking is not a part of your life right now, do you have to make the payments for your house, cars, credit cards, et cetera?

Chris Bay:

Absolutely. We call that outside debt.

Mike Everett:

That is correct. So what happens if we shift all that debt to inside debt, economic value added, what we’re doing is we’re adding value to your dollars by giving you the opportunity to make those payments to yourself.

Chris Bay:

So I’m interested, when we talk about if we have a loan at the bank, are they going to give you that money for free?

Mike Everett:

They are not.

Chris Bay:

Okay. So I always ask people, do you care more about your banker than yourself? And obviously they chuckle and they say, well, no, of course not. So if the bank is going to charge you whatever percentage, then wouldn’t, you care more about yourself and charge yourself at least that amount. So let’s take a car loan. Okay. Talk us through how you might apply EVA with a car loan.

Mike Everett:

Okay. So let’s just take a conventional bank to start with. They charge you, let’s say, anywhere from 1.9 to 8%. Okay. Do you have to make those payments?

Chris Bay:

Absolutely.

Mike Everett:

Okay. So if all of a sudden you got yourself to where you own the debt, let’s say we used the activator that we talked about in the previous podcast, or we utilized an asset to pay off that debt. Imagine if you were making that car payment to yourself, would you want to pay yourself a small interest rate or a large interest rate? Remember, it’s your money. Part of the thing is getting people to make the mind shift, to pay themselves whatever interest rate they are comfortable with. I personally, when I borrow money from myself, I charge myself 10% on every loan and people go, you charge yourself 10%, and I go absolutely, because it’s my money and I’m paying myself. So it’s huge.

Chris Bay:

Yeah. When we do our boot camps for folks, I always try to say if the most important thing we could do today is if I could take a banker’s brain and plop it inside your skull so that everything that we’re teaching you today, you would look at it from a banker’s perspective, it completely changes everything. If you’re a banker, don’t you want everybody to bring their loans through your bank?

Mike Everett:

Absolutely.

Chris Bay:

And don’t you want to charge them interest?

Mike Everett:

As much as you can.

Chris Bay:

Exactly. So why not charge yourself that interest? Because now that’s additional capital going into a system that is guaranteed to grow and compound and you have access to it again. So the more you put into it, the more it’s going to grow and be available to you and know, by the way, when you pull that money out, your policy is still growing and compounding as if you’d never touched it.

Mike Everett:

It’s unbelievable.

Chris Bay:

I don’t know another financial vehicle that allows you to do that.

Mike Everett:

There’s not one out there.

Chris Bay:

That’s the brilliance of Nelson Nash and earlier you referenced a quote from Nelson when you were talking about EVA…

Mike Everett:

Right.

Chris Bay:

…Direct quote from the book, Nelson’s book is Becoming Your Own Banker and we have a copy of that available for you on our website at lifesuccesslegacy.com, and again, we always encourage people to get a copy of that and read it. In the book he will reference, and we’ll talk just a little bit about it, but to learn more about it, you’re going to want to get a copy of Nelson’s book and read it, but he talks about putting the peas back on the shelf. Just touch on that real quickly.

Mike Everett:

Well, basically if you own the grocery store, you want to be able to go to your own grocery store to purchase groceries.

Chris Bay:

Right.

Mike Everett:

Nelson used a can of peas in his book but what we do is we literally show people how every dollar that flows through their hands can be just like that can of peas. But we would really encourage people to get a copy of the book so they can go into a little bit more detail on the grocery store, in the book.

Chris Bay:

Yeah, absolutely. Because the principle is we always teach people is don’t steal the can of peas. That’s actually Nelson’s number three principle.

Mike Everett:

That’s correct.

Chris Bay:

Number one is, think long-term. Number two is…

Mike Everett:

Don’t be afraid to capitalize.

Chris Bay:

Don’t be afraid to capitalize. And number three is…

Mike Everett:

Don’t steal the peas.

Chris Bay:

Don’t steal the peas. So if you want to learn more about not stealing the peas and how to finance everything in your life, once you’re debt-free, encourage you to get a copy of Nelson’s book off of our website, lifesuccesslegacy.com. So today we talked about how to finance everything in your life with economic value added or not stealing the peas. Our next podcast, we’re going to be talking about something that I think would be important to a lot of people. Don’t miss that podcast. It is about how to get to tax-free retirement, or as Nelson calls it, passive income. Thanks for joining us.

Mike Everett:

Thanks Chris.

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Life Success & Legacy Triagle

Create Your Own Banking System PT 4 – BYOB #12

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Part 4 of this chapter, Creating Your Own Banking System, is amazing. There is so much crammed into this episode you may have to listen twice. So, sit back and enjoy as Mike and Chris dig deeper into the nitty gritty of life insurance, the need for protection and the idea of being insurance poor. This truly captures the brilliance of Nelson Nash and the Infinite Banking Concept!

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Create Your Own Banking System Pt 3 – BYOB #11

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In part three of this ultra packed chapter, Mike and Chris dive into the way insurance actuaries “overbuild” policies. They also discuss dividends. What are they? How do they work? And are they helpful when considering Infinite Banking?

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Rapidly Eliminate Debt

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Today’s #tbt repost is the first of the four pillars of Infinite Banking. In the last #tbt we posted the short introduction to all four pillars, here, we dive in and get a more detailed look at exactly HOW Infinite Banking can help US take control of our finances. Learning to overcome the wind-current we face, is huge. If this is your first listen of this podcast, enjoy, if it’s your second, third, or more… we understand why you keep coming back!

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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. On our last podcast, we talked about the four things that Infinite Banking can do for somebody. The first thing we talked about is how it can eliminate debt rapidly. Which for most of our clients, that happens in about three to eight years in general, for some it’s sooner. For some it’s actually the first month, which sounds crazy. For us, for my family, it took us 26 months. But in general, for most people, it takes somewhere in the range of three to eight years. And we talk about that, being able to do that by turning our headwind into a tailwind. And we’ll talk more about that today. The second thing it does is it teaches us how to finance everything in our life.

The third thing that Infinite Banking can do for folks is it can give us tax-free retirement. And then the last thing, the fourth thing, is tax-free wealth transfer. And that’s passing on our assets to our future generations or other philanthropic organizations that we care about, churches, organizations and such. So on this podcast, what I’d like to do is really dig into that first thing. And that is, how do we eliminate debt rapidly using Infinite Banking? And we talk a lot about shifting the headwind of interest through financing and shifting it to a tailwind. For those listeners, I’m a runner, and at my age, when I’ve got a headwind that I’m facing, when I’m out running on the lobby, instead of feeling about 47 years old, now I feel about 67 years old. But man, when that wind changes and it comes around behind me, all of a sudden I’m feeling 37 again. So that wind makes a huge difference. Can you explain a little bit about shifting that headwind that people are facing and financing to a tailwind?

Mike Everett:

Well, when people come to us, usually their debt load is pretty heavy. Let’s just talk about some of the things that they’re spending their money on. They’ve got mortgages, they’ve got car loans, they’ve got credit card debt, usually multiple credit cards. They’ve also got some student loans and even business owners have business loans, equipment, vehicles, et cetera, et cetera. So, changing the headwind into a tailwind is kind of a big deal, because if you think about all the things that we’re sending money out on, we’ve got all these things that we’re … we get paid on Friday, what do we do? We send our house, our car, our credit card, our student loan payments. How much is left over for us? Not very much. So imagine if there was a way to shift the wind current to where all of a sudden you weren’t making those payments to somebody else, but you were making those payments to yourself. What kind of freedom would that create?

Chris Bay:

Yeah.

Mike Everett:

It’s pretty incredible.

Chris Bay:

Yeah. Nelson Nash, in the book, Becoming Your Own Banker, which we always recommend people get a copy from our website, lifesuccesslegacy.com and read that book. Nelson talks about the wind current in the context of airplanes. Can you talk a little bit about that?

Mike Everett:

Well, if you think about it, you were just talking about it as a runner. A perfect example is, imagine if you had a plane and you were flying into a 345 mile an hour wind.

Chris Bay:

Mm-hmm (affirmative).

Mike Everett:

Your efficiency of your plane wouldn’t be very good. But if all of a sudden you wait for the winds to shift and all of a sudden you’ve got that 345 mile an hour wind behind you, how fast are you going to get there?

Chris Bay:

Pretty fast.

Mike Everett:

Pretty quick. It’s amazing when you get to explain that to a customer when it comes to their finances.

Chris Bay:

And I remember when I was first learning about all this, we didn’t have a huge headwind because we were really a save up and then pay cash for things.

Mike Everett:

Right.

Chris Bay:

So we really didn’t have a wind going at all, either a headwind or a tailwind. But our problem was, let’s say our airplane’s traveling 100 miles an hour, we’re trying to figure out how to make it go 105 miles an hour by, let’s not go out to eat quite as often or let’s cut our cable bill, those kinds of things. That’s pretty hard to get excited about when you’re going from 100 to 105 miles an hour. When reality is, if we can turn that headwind completely into a tailwind, we can really get going.

Mike Everett:

You change the tailwind quickly if you can control the cash flow. But most of the financial industry does not ever explain it that way. You said something about getting the airplane to go 105 miles an hour. That’s just like the financial professional trying to tell you, oh, by the way, we can give you three to 5% more on your investments. When in fact, all you’re doing is, you’re stopping the headwind from 345 miles an hour into 340. You see, it still doesn’t change the wind current that much and so you’re still fighting it

Chris Bay:

Just to clarify for the listeners, you’re using 345 miles an hour of a headwind or a tailwind, where does that come from?

Mike Everett:

That comes from the interest rate that Nelson says the average family is paying towards debt. It’s just house, cars, credit cards, student loans, et cetera. Add them together and you usually have an average of about 34 and a half percent that people are spending on interest alone after they pay their income taxes.

Chris Bay:

When I first read about that, I found that fascinating. So when I think about every dollar that passes through my hand, right off the bat, 20, 25, 28% goes to taxes.

Mike Everett:

Correct.

Chris Bay:

I never even see it. Right?

Mike Everett:

Yep.

Chris Bay:

Then on top of that, let’s add 34 and a half percent that’s going to interest. So you’re adding that up in your head?

Mike Everett:

Yeah.

Chris Bay:

Then let’s say I’m trying to send money to my company, 401k or IRA, which by the way, is not guaranteed to grow and I don’t have control of it. And they’re using it-

Mike Everett:

That’s correct.

Chris Bay:

… while it’s sitting over there. So I am now trying to live on the remaining amount.

Mike Everett:

Which isn’t very much.

Chris Bay:

Whereas, if I can turn the wind current and I can add that 34 and a half percent of interest going my direction, it’s dramatically changing our cashflow.

Mike Everett:

Let’s just pretend that you only have access to not the 34 and a half percent, but let’s say you have access to 10 to 15% of that.

Chris Bay:

Yeah.

Mike Everett:

It’s gigantic.

Chris Bay:

Yeah. Okay. So we talk about how we design plans for people and that we can eliminate debt and build capital at the same time, without changing their cashflow. How is it possible? Explain a little bit about, how is it when we do plans for people that we’re able to eliminate debt rapidly without changing their cashflow, we’re just changing where it’s flowing.

Mike Everett:

Well, part of that comes from having assets or what we call an activator. If you have an activator or an asset that’s sitting there doing nothing for you and we’re able to access that to be able to eliminate a car or a credit card or a student loan debt, then all of a sudden you have the payment that you were making to somebody else, but now you have the availability of making that payment to yourself. So the bottom line is, what we’ve done is, we’ve changed the wind current of those one, two or three items that you were sending money out the door. Now you’re getting the opportunity to send the money in the door.

Chris Bay:

Wow.

Mike Everett:

Changes things pretty dramatically.

Chris Bay:

I was just working on a plan the other day for a client, where we were able to eliminate all of their debt, including their mortgage, in four years and one month, without changing their cashflow and recoup everything tax-free within the fifth year. So not only are they debt free, but they have all the equity in their home and everything else within five years. I mean, when we get to share that with people, it really inspires possibilities for them.

Mike Everett:

A lot of times you’ll get calls like we did just a little bit ago, where people are having trouble sleeping.

Chris Bay:

Yeah.

Mike Everett:

Because they’re looking at these things and they’re going, I can’t believe that you can do this for us, but we do.

Chris Bay:

Yeah. Well, as always, we want to encourage our listeners to go to our website, lifesuccesslegacy.com. If you don’t have a copy of Nelson Nash’s book, Becoming Your Own Banker, we again really encourage you to purchase one of those. Also, we have a free downloadable e-book called Financial Planning Has Failed. And the next podcast that we’re going to tackle is the second element of Infinite Banking. And that is, how do you finance everything in your life? So if you’re debt free, then what do you do? Please join us for our next podcast. Thanks.

Mike Everett:

Thanks Chris.

Life Success & Legacy Triagle

Create Your Own Banking System Pt.2 – BYOB #10

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In part two of Creating Your Own Banking System, we continue unpacking this dense chapter and helping you get the most out of all that Nelson is trying to teach us!

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Life Success & Legacy Triagle

IBC’s Four Pillars

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In this #tbt we are reposting our second podcast titled The Four Pillars of Infinite Banking. We are adding the transcript as well, just as an extra way to dive into the content. Let us know what you think by adding a comment to the page!

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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. Last week, we talked, Mike, about how you were introduced to the Infinite Banking Concept. What I’d like to do is dig a little bit deeper now into what is the Infinite Banking Concept.

Chris Bay:

When we are conducting our Infinite Banking Boot Camps, we talk about the four things that Infinite Banking does. The first of which is that it reduces debt rapidly by turning the wind current. The second thing we do is we teach people how to finance everything in their life and actually earn the interest that they might be losing by taking loans at banks or other financial institutions or the interest they might be losing because they’re paying cash. The third thing that Infinite Banking does is it provides a tax-free retirement. Then the last thing, the fourth thing, is tax-free wealth transfer. So what I’d like to do is have a conversation about each of those a little bit.

Mike Everett:

Sounds good.

Chris Bay:

The first thing of what is IBC, reducing debt rapidly by turning the wind current. People are amazed, and I know you feel this way. When you’re able to show somebody a plan and you show them what’s possible in a very short amount of time really, they get excited, you’re excited, I’m excited, we’re all excited about what’s possible. The power of it is turning the wind current. So can you kind of describe what is the wind current that people are facing, that kind of headwind tailwind thing?

Mike Everett:

Well, when we’re going into detail with people on how to rapidly eliminate outside debt, people don’t even think through all of the payments that they’re making to somebody else, the house payment, the car payment, the credit card payments, the student loan payments. Imagine if you were just putting part or half of those payments into your own system. So what I normally do is I help people just think through about all of the money that’s going out the door. What if some or all of that money was coming back to them in some sort of way? That’s what we call changing the wind current.

Chris Bay:

Okay, so then how does that happen? I mean, if we’re thinking about shifting the wind current and we’re turning those payments from going to somebody else to now, all of a sudden, it’s going to themselves, how do you go about doing that?

Mike Everett:

Well, first of all, you teach them about economic value added, EVA, which is really one of the most powerful things that we teach. What people don’t understand is our money has a cost in some sort of way. So if we’re trying to get people to understand about the costs that they have towards their money, if they were making payments to Visa and MasterCard and Ford Motor Credit and Countrywide Homes for all of the different things that they were paying money towards, what would happen if we taught them how to actually make those payments to themselves? Our question to most people is if you were making all or part of those payments to you, how fast would your money grow?

Chris Bay:

The amazing thing is so once we turn that wind current for a family or for a business, that money they were making payments on was going to somebody else and they never got to see it again-

Mike Everett:

Ever.

Chris Bay:

… but when we turn that wind current, and now all of a sudden that headwind turns into a tailwind, it’s now flowing to them and don’t they get to reuse that money.

Mike Everett:

They have access to it in an income-tax-free environment. That’s what blows people away, but this is what separates us from everybody else. We show them how to have more than one use of that dollar over and over and over.

Chris Bay:

So talk to me a little bit about how rapidly because that very first thing is that we reduce debt rapidly. Give me a range. Give me, in general, over the hundreds of clients that you’ve helped turn their wind currents, generally, when are they able to pay off their outside debt?

Mike Everett:

I would say the average client, and I’m just talking average, is 100% out of debt in a five to eight year range. When you’re showing people this kind of thing, they’re always going, “Well, there’s no way that this is possible,” but once you understand what the wind current is and how you can control the wind current, it makes all the difference in the world.

Chris Bay:

That’s pretty powerful. Now, I have a little personal story along with that just because you were my coach originally in Infinite Banking.

Mike Everett:

That’s correct.

Chris Bay:

When we were able to turn our wind current, we were able to pay off our outside debt in 26 months.

Mike Everett:

Unreal.

Chris Bay:

It’s unbelievable. We have clients that will actually be debt free in the very first month of starting their plan.

Mike Everett:

That’s correct.

Chris Bay:

Now, not everybody’s that way.

Mike Everett:

No.

Chris Bay:

So give me a long stretch. What would you say is the longest it’s taken one of your clients to be completely debt free? You’re talking about mortgage. You’re talking about student loans. You’re talking about business debt, any kind of debt at all. What is the longest that you can recall that it’s taken somebody to be debt free from that outside debt to somebody else?

Mike Everett:

Somewhere around 11 to 12 years. 11 to 12 years, but yet when we go out and get a mortgage, we get it for 30 years. So if you turn around and you tell somebody, “Oh, by the way, we’re going to get you 18 to 23 years on your mortgage,” I don’t think we have a problem.

Chris Bay:

No, and when you think about it if a mortgage is, let’s say, 30 years long and the amount of interest that you pay during that time period, if you were able to shrink that mortgage down to let’s just say 10 years, think of the amount of interest that you save somebody.

Mike Everett:

It’s tens of thousands of dollars, probably close to… On a quarter of a million dollar house, it’s like a $100,000. The numbers are just astronomical.

Chris Bay:

Yeah, one of the data points that I like to share in our Boot Camps is that the average American over a lifetime… and we’re talking mortgages, student loans, car debt, credit card debt, all of that… the average American is going to lose $600,000 just in interest over a lifetime. We can teach people not only how to save that $600,000 in interest, but actually make that $600,000, which sounds too good to be true.

Mike Everett:

It does.

Chris Bay:

Okay, so the very first thing IBC does is it reduces debt rapidly by turning the wind current. Second, teaching people how to finance everything. Now, that one I find takes the most teaching. People don’t get that.

Mike Everett:

It does.

Chris Bay:

So once I’m debt free, how does this thing work for me? How is it that I finance things in my life? Can you give some examples or paint a picture for us?

Mike Everett:

The greatest example we give is how to finance a car. When we go out and we buy cars, we either save up money for three or four years and pay cash or we go down to the bank and finance it. What we’re going to do is we’re going to just kind of stick on the cash guy for just a little bit because this’ll be the hardest guy to get to understand why we do what we do. He saves money, but then the minute he buys a car, he’s back down to zero. Then he has to continue to do that over a lifetime with all of his cars.

Mike Everett:

So imagine if you created a system where you had access to that money, but it continued to grow over time. When I say grow over time, I’m talking about exponential growth. What we’re doing is we’re just getting… You remember we talked about being able to use that dollar over and over again. That’s what we’re talking about in being able to finance things, but we buy washers and dryers, we buy cars, we go on vacation, we have credit card debt. We learn how to finance everything that we purchase through the Infinite Banking Concept.

Chris Bay:

One of the things that strikes me is that because I was a cash guy and we followed Dave Ramsey’s plan for seven years. We didn’t go on vacations. We didn’t go out to eat very much. I mean, we weren’t having very much fun, and we were slowly getting our debt snowball… We were slowly getting that debt paid down, but not nearly as rapidly as we did when we started Infinite Banking.

Mike Everett:

Right.

Chris Bay:

The piece that struck me is if I’m paying cash, that means I’m saving up a pool of cash and then I’m going and paying cash for that item. Every single time I am killing the compounding interest.

Mike Everett:

You are.

Chris Bay:

Every single time I’m starting over. So I’m never really building up anything with that, that approach.

Mike Everett:

Correct.

Chris Bay:

Whereas with Infinite Banking, not only am I really going to be able to pay cash, but I’m also having my money compounding and growing for me, and it’s never interrupted.

Mike Everett:

Correct.

Chris Bay:

Pretty powerful overlay [crosstalk 00:00:09:47].

Mike Everett:

It is. It’s big.

Chris Bay:

Okay, let’s jump into the third thing. Is there such thing as tax-free retirement? Well, we say yes. How does that happen?

Mike Everett:

Well, of course once again, there’s only one pool of money, but what we’re trying to do is we’re creating a system to where you are controlling the entire pool of money that you have access to. So when we’re taking those payments that we were making for cars and homes and credit cards and vacations and stuff and continuing to reuse that money, then what we’re doing is we’re creating a larger pool and it’s still compounding. But at one point in time, you’re going to want to start to access that money, the larger pool, for income. Instead of you utilizing a 401K or an IRA or a mutual fund that is going to have tax on it, we’re going to show you how to take policy loans and be able to access that money in an income-tax-free environment.

Chris Bay:

There’s been many, many examples that we’ve looked at. In Nelson’s book, Becoming Your Own Banker which we highly recommend to all of our listeners to get a copy and read it, Nelson shows many examples of when people are pulling that money out… as he calls it, passive income, retirement income, whatever you want to call it… and you’re pulling it out as a loan, it’s not taxed. In many cases, if you’ve capitalized your system and given it time to do what it needs to do, even though you’re pulling out living expenses, pulling out income, it’s still growing and compounding. So the question of… and I find this with a lot of my clients that are in their fifties or sixties, their biggest concern is they’re going to run out of money in retirement. Well, in this situation, they never have to worry about running out of money.

Mike Everett:

Nope.

Chris Bay:

Nope. That lets you sleep pretty well at night.

Mike Everett:

It does.

Chris Bay:

Okay, so that’s tax-free retirement. How about the fourth thing IBC does? That is tax-free wealth transfer. Powerful.

Mike Everett:

It’s gigantic. When you think about some of the wealthy families, they’ve continued to do this for generations, for literally for hundreds of years. What we’re trying to show people is this life insurance policy that they put together, even though we’re able to use it along the way, what we’re doing is we’re guaranteeing that they’re going to be able to direct 100% of the direction of that money through this wealth transfer. It’s pretty unbelievable.

Chris Bay:

It makes me think of Nelson’s number one principle, and that is?

Mike Everett:

Think longterm.

Chris Bay:

Think longterm, brother. So when you’re talking about think longterm, what are you thinking?

Mike Everett:

I’m thinking of my grandkids. I’m thinking of my great grandkids. So literally when we go to work with families, we’re talking about two and three generations from now. When you’re thinking like that, you’re going to be able to create a wealth transfer that people won’t believe is possible.

Chris Bay:

One of the things that I learned at this last Nelson Nash Institute Think Tank was the phrase “Rags to rags in three generations.” What that means for the listeners is that one generation works their tail off and they build some wealth. Then that wealth gets transferred onto the next generation, but by the time that wealth gets transferred to the third generation, it’s gone. The problem in that is the knowledge has not been passed on from one generation to the next. One of the things that we do at Life Success & Legacy is that we work with generations within families so that not just the initial generation, but future generations, are learning how this works.

Mike Everett:

Yeah, we want to sit down with families. We want them to understand that when they hand that baton off, it has to do with money, everybody knows what’s going on.

Chris Bay:

That’s right. That’s right. So that’s really kind of the big picture, four things that Infinite Banking can do. Obviously, there’s a lot more education that goes into this. Nelson’s book, Becoming Your Own Banker, is available on our website at lifesuccesslegacy.com. We highly encourage everyone to read it. This is just the beginning. That book is a 10-hour course of instruction. Our boot camps that we do are typically about three hours long, and we have those both through web conferences as well as live around in different regions. Mike, thanks for joining me.

Mike Everett:

Thanks, Chris.

Chris Bay:

I look forward to our next conversation.

Mike Everett:

You bet. Have a great day.