IBC’s Four Pillars

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.