Hey guys, welcome to Wealth Wisdom
Financial Podcast. Now you see both of us
in my office. We'll probably switch it up
and go into hers next time. Who knows?
We're just having fun here. It's summer,
you know?So now
funny thing is. Infinite banking and the
banking yourself concepts has been around
for a long time. However,
lately there's been a lot of hype,
I guess you could say a lot of, uh,
movement in that because, I don't know,
people are losing, they're they're no
longer mortgage brokers or I don't know,
something's going on, uh, where there's a
lot more people doing podcasts, YouTube,
we've been doing it. We're the OGS of
this. We've been doing it for a while.
And so what we really wanted to
do today is address some of
the misconceptions that are out
there. There's a lot of people who are
probably saying things that Nelson
Nash and would would
he would turn over in his grave if he saw
some of those things that were out there
now. Pamela, she
is still around, but she
probably just shakes her head and
probably is is off of social media
and the likes because some of the things
that are said about her, even I'm like,
really?That's not even accurate.
But yeah, she still around, but she
is, you know, kind of not on the Internet
as much. So today we're going to ask some
of those questions. But before then,
why don't Ben, why don't you take us away?
In a world where chaos seems to reign
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OK, so here's how we're going to we set
up this episode today. We went to
an AI platform and we asked them,
what are some common misconceptions of
infinite banking?That's all we put in as
a prompt, and they gave us
8 misconceptions. And we're gonna
take turns talking about those
misconceptions. So like I'll read number
one and bring then you react to number
one and then you read number two and I'll
react to number two and we'll go through
it like that. We're gonna try to do this
fast because eight could take a long
time. So remember, we
are improving here. We have not
prepared. We might make mistakes. We
might say something semi-incorrectly.
Please give us grace. We're just having
some fun here in the summer to bring you
some impromptu kind of episodes.
just got this list like a minute ago.
Here we go. The first one is,
it's a get rich quick scheme. Many
people mistakenly believe infinite
banking promises unrealistic, rapid
wealth accumulation. Brandon, you've got
a minute. Go. Yeah. So I I do
think that asI've heard Pamela
Yellen do a lot on this and people
would say, yeah, but she's just saying,
you know, you can use this to then buy
your cars and you'll be OK and you'll get
wealthy. And I think that they are
farther from the truth in that
regard in that. I don't know where I've
see heard that or seen that, but, you
know, using it to
create other assets that will help grow
your wealth is maybe a more a better
way to think about it. Not just saying
I'm going to use it to buy a car,
depending on the interest rates, right?
Uh, if it was a high interest rate car,
using a policy loan is more important,
but it's not just going to create wealth
if you're just. doing it to consume more
stuff, but if you're using it for
creating more
opportunities for wealth in maybe real
estate or in other areas, that's
an important thing. It's not a get rich
quick scheme because you actually have to
think about how you're gonna deploy the
fundsin a smart way that works for you.
Not everybody should be in real estate.
Maybe they need to be in Touro or they
need to be in other areas that they know,
right?But it's a way of building a good
foundation to then move forward. Yeah.
Takes a long time to, to overcome and
build that kind of thing. Yeah. There's
no get rich quick schemes. If you're
being sold one, it's likely a scam. Yep.
Number two. Yeah. So in the,It's the
same as whole life insurance. That's what
people say all the time. While infinite
banking often utilizes whole life
insurance policies, the strategy
involves more than purchasing insurance.
Is that true?Well, so
one weird thing about how
the AI says is it often uses whole
life. I think true. Nelson Nash
style, Pamela Yellen style, Infinite
Banking and Banking Yourself, they always
use whole life. It's just not the kind of
whole life that our grandparents and
great-grandparents would've owned. Or
even Dave Ramsey. Yeah, it's even some,
it's it's had some specific
modernizations to it that makes it
more than just purchasing insurance. So I
think that's a key part of it
to remember is that it's not like the
traditional,you know, 100 year old whole
life insurance. It's kind of like, I like
to use the phone. 100 years ago,
the phone looked differently. We still,
you know, we now have these smartphones
that can still make calls. Like they have
that same basic thing, right?You can
literally have a phone call on these, but
they're dramatically different. There's,
it's had a lot of modernizations, added
things to it, just like that's, same
things happened with whole life
insurance. And that's what we call
infinite banking or bank on yourself.
Okay, number three here. It's only for
the wealthy. Some think infinite banking
requires significant upfront capital, but
it can be implemented at various income
levels. What say you, Brandon?Yeah, I
think first you need to have a good
foundation of savings, right?And
you could start a smaller policy, like a,
a younger person maybe, or even older
person, maybe $300, uh, that
they can save for future them is what it
is that they can afford, right?Uh,
and so it's not, $300 may
seem like a lot for you. Or it may seem
like, uh, a very little
amount. So our first policies
were $400 a month. That was what we could
do at the time. Now we have bigger
policies. We did not start there. If you
would've told me, oh, all you need to do
is put in 20,000 a year for the rest of
your life, uh, back then I might've said,
eh, I'm gonna wait on that. Now
that's why we do a full comprehensive
plan, because we wanna make sure that it
fits within where you're. at
now and giving you a little bit of
push to be able to grow into
something, uh, so that way as your income
grows, you're able to, to build. But it's
not just for the rich, uh,
and it's not just for just,
uh, well, you know, the poor or whatever.
We need to have a good balance there.
Yeah, I would say, um, related to this,
saying it's only for the wealthy, I would
say,mindset is really important
here. Because wealth isn't
just about money, right?If you have a
wealthy mindset, you
believe your future is bigger than your
past, you believe that you can think
creatively and make
decisions yourself for your own financial
future, rather than get, you know, bogged
down in what other people think, then
infinite banking, banking yourself is for
you. If you can't get into those kind of
mindsets,It might not be, no matter how
much money you have. Yeah.
So I'm going to ask this one.
Since you are a CFP, this is going to be
a good one for you. Um, so infinite
banking, uh, as again,
the AI said, it replaces all
other investments. Infinite banking is
often misunderstood as a replacement
for diversified investment
strategies rather than a complimentary
tool. So maybe people on the YouTubes are
saying, oh, this is the holy grail.
Right. Of everything. I thought this one
was mine. Yeah. I don't know, maybe, maybe
So go ahead. Go back to our last episode.
I talked about this a little bit in
there. One of the things
that I think too often it's
it's my way or the highway, right?Put all
of your money into infinite banking or
put all of your money into the market or
put all of your money into CDs or, you
know, whatever it might be. None of that
could be true. You want to have
diversification. You want to
build strategically, not just all
or nothing. And that's true of
everything. So it can be a
supplement to, but definitely does not
replace all other investments
#5. You ready for this one?The returns
are guaranteed. Many people overestimate
the guaranteed aspects of the policy, not
fully understanding the difference
between guaranteed and projected
values. This is one that came up in my CE
recently, but go ahead. Oh, you might go
in there. Yeah. So I like to
look at worst case scenario and best case
scenario, right?So why we use
properly designed whole life is becauseis
I like to make sure the guarantees
it is going to last regardless of
whatever happens, you know, in- As much
as possible. As much as possible. Based
on the insurance company. Yeah. Um, short
of zombies, right?Um, so I wanna
make sure that the guarantees are good,
uh, that regardless that we
are okay because nothing in life,
again, is guaranteed. You know, things
can happen to us, uh, on our
end, let alone the, you know, part of the
insurance, right?we want to make sure
that the contract will stand.
Now, this is where I don't like the, uh,
IUL products is because they
just show the non-guaranteed side
and, um, what that straight line
projection or stuff like that, that
uh iskind of misleading. And so I want to
be able to say, worst case scenario, how
is this going to hold up if you do this?
And they say, and it won't, right?And so
I like the guarantees there.
And then I like the, um, looking at the
non-guarantees with the dividends and the
other parts of the policy. Now, that's
what I I think is really important. Tell
me a little bit about the CE way. Oh
yeah, in my continuing education,
we always have to do three hours, I think
it is, of ethics education every year for
anybody that talks to folks about life
insurance. And one
of those ethical things is making a very
clear distinction, but that dividends are
not guaranteed. And too often
the way that folks talk about
Infinite banking and banking yourself.
They make it sound like the everything's
guaranteed and that just isn't the case.
Well, that's another. But I actually what
I love about it is because the dividends
are not guaranteed, they can change. And
as we've had lots of inflation, as
interest rates go up, I can make more
like I want that. That's that's great.
Yeah. And I think that's also looking at
other people's portfolios and things like
that. We often buy things and we think,
oh, well, it's guaranteed. I'm like,
well, no, in real estate it is not.
and so thinking about that in other
areas of your life, what is the guarantee
and non-guarantee is really important
too. So, um, number
six, it's completely tax free.
While there are tax advantages, not
all aspects of infinite banking are tax
free. Is that true?False?What?Yeah,
that's true. So there are lots of tax
advantages when you're using whole life
insurance, um, deferred growth, uh, at
least under current law, right?Um, as the
policy grows,get that guarantees and
dividends, they go into the policy and
help the policy grow. And that growth is
not taxed every year like it would be in
a savings account. The death
benefit also famously tax-free to your
beneficiaries. It's
protected in that way. However,
it's income tax-free. It's not
necessarily a state tax-free. And
there are some times when people
take withdrawals from their policy that
could have tax implications. There
are other times when we intentionally
make the growth taxable whenever you
touch it because of other specific
reasons. You want to ask lots of
questions about taxes, understand what's
going on there, talk to a
tax professional, a CPA, an enrolled
agent that can specifically give you tax
advice. But for sure,
understand what's happening
tax-wise, what are the advantages of,
and what could be the tax implications?
How do you avoid them?Like that estate
tax can be avoided, but you have to know,
are you willing to pay that cost to avoid
it?Or is it a remote possibility you
don't really need to worry about?Ask all
those questions, think those things
through, 'cause it's gonna be different
for different people. Yep.
That was me dancing around taxes. Yeah,
right. And and again, knowing. And again,
we are not tax people, but we know a
lot about taxes. I I wish I didn't know
so much. However, it is
important to know as you build a
comprehensive plan, how that's going to
impact you. And I ready for #7. Yeah, I
just realized I was reading both the
answer and the question at the same time.
I got #7 for you. So the common
misconception is it's a new or
unproven concept. And what AI says is
that actually the principles have been
around for decades, though popularity
has increased recently. Part of why we
did the last two episodes to talk about
the increasing popularity. But maybe
Brandon, take this opportunity to talk
about that it's been around for decades.
Yeah, life insurance, I mean, again,
it's been around for a long, long time.
It's really was to protect widows and
orphans. And then it became
unpopular whenever 401ks and
other things became popular. And we were
like, yes, well, we can risk more here.
We can do this more here. But the
principles and the
idea has been around for a long, long
time and people have used it. That's
why they made the MEC rules, because the
rich were using it to make a
lot of money and put it through a policy
and then buy their assets. So they were
doing it, uh, way, way back when.
And it just became more and more popular
as people were like, wait, the
banks are doing what?I could do that?Oh,
I didn't realize I could do that. And
they're starting to learn. And that's a
good thing. We just wanna make sure that
you have a, um, person that
understands how the backend works. Kinda
like a mechanic. You wanna have a good
mechanic, not just, uh, Uncle Joe who
maybe fixed a car once. Yep. Great.
Ready for the last one?Number eight?Yeah,
number eight. Let's go. Uh, it
eliminates the need for traditional
banking. Now, the strategy doesn't
completely replace the need for
conventional banking services. That's
what, uh, AI says, but- Yep. Let me talk
about this. So, um, one important thing
when you talk about infinite banking or
banking yourself is that you're not
opening a bank. We're not going, you
know, to federal government and getting a
bank charter, you know, or anything like
our state government, none of that. This
is a way to
to bank, right?The banking part is a
verb, and you're actively taking over
the banking function in your life.
And we want to do that, particularly
with things that are more long-term in
nature or with debt, but we still
use a bank for convenience.
We've got a great episode about this as
part of our foundation series. We'll make
sure we put it in in there using banks
for their convenience and what are what's
the cost we're paying for that
convenience is a big eye-opener
that then you can start to learn how to
use banks in your favor, but also
use make sure you're not using them
when it's not favorable to you. That's a
very important reason that
infinite banking and banking yourself
even exist is seeing how,
you know, even Mark Twain said a banker
is a fellow that will lend you your
umbrella when the sun is shining, but
will demand it back when it starts
raining. Paraphrase. He said it much
better than I did. But that that's a Mark
Twain, right?Like that idea of bankers
being like a necessary evil has been
around for a long time. Maybe not evil.
That's too strong of a word. But taking
over some of the banking function in our
lives can be really important. Watch It's
a Wonderful Life. If you want a primer on
what that looks like, maybe. Maybe you
know that banker is a fellow who lends it
when it's sunny and. takes it back
when it's raining. Maybe people are
starting to see a lot of storms
out there or rain. Or we're just fed up
with them getting like the bailouts and
we don't. Yeah, or something along those
lines. And so that's why there's a rise
in the interest of this is saying, hey,
every time it's raining outside, they
keep wanting it back. And is there a
better way?And people are starting to
ask. And then there's clever marketers
out there saying, oh yeah, but there is.
And so. SoIf you're ready to
combat some of these misconceptions,
bring your own misconception to us, here
what we would answer when I give you that
opportunity. Here's how you make that
happen.
Ready to take the next step towards
securing your financial future?Whether
you're planning for retirement, saving
for your dream home, or you just want to
make your money work harder for you. The
team at Wealth Wisdom Financial are ready
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We hope that you'll schedule with us. We
look forward to talking with you soon.
Yeah. So as you're going through your
understanding, we just wanna give you
guys the tools to make smart decisions
for your life, not just our life, right?
Or the bank's life or somebody else's,
but how is this
Information going to impact you and your
family and, you know, your your
grandma, your kids, all those areas,
grandkids, grandkids. These
things that you're learning have huge
implications that you may not even know
yourself, right?I I think about that all
the time. But if you want to ally along
the way and somebody who's like not just
setting up a policy but having regular
reviews with you, don't forget to reach
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subscribe button. Remember the topics
presented in this podcast for general
information only and not for the purpose
of providing legal, accounting or
investment advice. And also if you
are considering the banking yourself
infinite banking concept, make sure that
you. Work with somebody who's going to
ask you a lot of questions about your
dreams and goals to make sure that the
olicy fits for you. Live long and profit.