Latest / Success Story with Scott Clary / Lessons - How To Be Your Own Bank | Chris Naugle - Co-Founder & CEO of The Money School

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Lessons - How To Be Your Own Bank | Chris Naugle - Co-Founder & CEO of The Money School · Success Story with Scott Clary

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  In this episode, you'll learn how to implement a private banking system that allows you to
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  earn on both your savings and loans. The conversation highlights the importance of changing where you
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  save your money, using specially designed, whole life insurance policies to act as your own bank.
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  By making a spread on loans, paying off debts strategically and reinvesting,
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  you can leverage your money to work for you multiple times over a strategy used by the wealthy for generations.
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  I still need to better understand this private banking system. So what do you teach over?
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  I don't want to misinterpret this and I'm just coming at this for the first time ever.
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  So when you work in this system, like you're finding deals, you're acting as a bank,
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  but you're funding the bank yourself or you're basically acting as like the broker and you're
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  finding high net worth individuals and you're bringing all the deals. It's all my money. So think
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  of it this way, right? We all had been taught to go on work for money. We had a monetary value
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  on our hours and we do that. So for those of you listening, some of you are watching, I'm holding
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  a hundred dollar bill. We make money. And when we make money, most of the money goes out and gets
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  spent on our living expenses. If you live in Toronto, all of it goes to your housing, just kidding.
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  But you know, not a lot. Not a lot. Very true. We make this money and you know,
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  the smart ones, not all of them, but the smart ones save or follow their six laws to wealth.
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  I'm writing a book on it. It would be my fourth book called the laws of, it would be called
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  the laws of wealth, but it's about the laws of wealth. And law number one is you must keep or save
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  one tenth of your money. Now I knew this for a long time. Pay yourself first. A lot of different
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  things. But when we save money, where do we save it? Well, in Wall Street or in one case, bank
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  accounts, money markets, brokerage accounts, all the different things that we sold. But when I found
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  out as none of the wealthy individuals started with their money there, they changed one thing.
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  And they changed where their savings went first. And the wealthiest, the Rockefellers, the Roth
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  Childs, the I can go on for days, they're great crocs, the Walt Disney's. They all did this,
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  okay? And right up to the sitting president today, Lovemer Haydom, he does this as well. And they
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  just changed where their money goes. They don't trust banks and banks are the only ones that make
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  money when you deposit money. They even give you a sucker. Tessess in Florida, you have these.
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  Go to any bank in Florida and get, you know, make a deposit and grab a sucker. There's
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  out a bank in this country that doesn't give away dumb, dumb suckers. They're telling you something.
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  So I changed where my money was saved. And I put my money into these. And now in the other thing
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  to remember, I said it was a whole life instantly. People go to negative thoughts because regular
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  whole life is not what I'm talking about. These are specially designed and engineered contracts.
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  Credibly specialized. There's only a couple giant mutually owned insurance companies to do this.
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  But we create this, this policy that serves and acts like a bank account. So I take the money
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  that I would normally save and I just change where it goes. So I take it from my left hand or my
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  right hand and I give it to my left hand, which is my policy. And I put it into this specially
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  designed whole life. Now the next phase, when you make money and you save money, what, what is the
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  next thing you do? Well, you buy things, right? People buy cars. When you buy a car, you either
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  lease it, you pay cash for it or you finance it. And when you finance it, you make monthly checks
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  to somebody else's bank, okay, whatever your bank is. That's where you're paying. And then when
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  you finance other things, dirt bikes or boats or anything, you make payments. We've been conditioned
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  by the system to give up control of all of our money for the things that we want. This concept that
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  I learned from Mike and Brent is a banking concept, but it's now I've got the money in the policy.
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  Now there's one thing the policy pays me a guaranteed interest rate plus dividends.
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  To do it by today's numbers is about five to six percent, okay, which is way better than what a
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  bank pays you. And in of that five to six percent, three to three point two five percent depending
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  on the company is guaranteed forever. Okay, so I'm earning a pretty good return on my money.
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  But the coolest part is is now it doesn't matter what I'm earning on my money. I need to make that
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  money go to work as law number two is make your money work for you. So now what I'm going to do is
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  I'm going to figure out where can I make that money go to work. And I remember back in my
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  story when I first started this, I had lots of debt. And if you think of a credit card,
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  if any of you have a credit card, your credit card probably charges you north of 20% interest.
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  In every month, you're making a monthly payment of which most of that goes to interest. Have you ever
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  thought about what, you know, and then when you're thinking about investing money in Wall Street
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  or the market, you're like, oh, man, I wish I could make a 20% return. Ding, ding, ding.
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  You're giving 20% away to the credit card. So why don't we start there? This is what Brent taught
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  me. So I took the money that I saved. And instead of investing it, I took it and I then paid off
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  credit cards, lowest balance to highest balance. And I'd pay off a visa. And if I was paying visa
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  a hundred bucks, I took that hundred bucks. I was paying visa. And I set up an automatic
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  transfer or bill pay that paid back to my policy. Now remember, it's especially designed in
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  an engineer's whole life, but I call it my bank. So now that hundred I used to give away, now I pay
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  it back to my policy. Here's the kicker. Okay. That doesn't sound too sexy. And it's really not.
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  But there's one thing that I left out that's critical. And this is why the wealthy families do this.
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  Let's just say I'm, let's call it a thousand bucks that I would visa. So I had to have a thousand
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  bucks in my policy in order to pay visa for a thousand. We don't understand that. You can make
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  money out of thin air. But when I had a thousand in my policy and I took that thousand out to pay off
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  visa, I took a loan against my policy much like I would take a loan from a bank. I took a loan
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  against my policy. But here's a unique thing. If I had a thousand dollars in my policy paying me six
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  percent and I take a thousand dollar loan out of my policy, how much money Scott is left in my
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  policy? I started with a thousand and I took a thousand out. How much is left? If it's a loan,
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  there's still a thousand in your policy. Smart. Now a lot of people that are listening to this would
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  think zero. Well, you had a thousand and took a thousand zero. The insurance company never touched
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  my thousand bucks. They made me a loan that was collateralized by my thousand dollars. But the loan
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  is a loan that never needs to be paid back. Now this is the thing that most people and when I heard
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  this, I'm like, that can't ever happen. That sounds too good to be true. The loan they gave me was
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  a loan against my death benefit. The insurance company promises to pay a guaranteed interest rate
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  on my money that's in there. Plus they promise to pay a death benefit the day I die. So the insurance
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  company will allow me to use the death benefit up to the amount that I can collateralize with my cash
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  value, which was a thousand bucks in this case. So the thousand dollars they gave me was the
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  insurance company just saying, Hey, here's a thousand dollars of your death benefit today. And we'll
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  charge you an interest rate on that loan. But you don't ever have to pay it back because when some
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  day when you graduate and die, it's a nice way of saying die, when you die, we're just going to
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  true up that we're going to subtract the thousand from your death benefit that you have and we're
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  good. We're made whole. But if you care what I just said, let's just do some math, isn't it? That
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  wasn't a fascinating. It's so simple. But nobody teaches this and I'll tell you why nobody ever
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  has heard of this from an advisor standpoint. Now let's just let's just use simple math.
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  First year, let's say I got a thousand in there and I need a thousand to pay out visa. I'm making
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  six percent on my thousand with dividend and to borrow that money, let's just say the insurance
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  company charges me four. What is six minus four to two, right? Yeah, to two percent spread.
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  When you think about a bank, when you put money into a traditional bank as a deposit,
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  is the bank put your money in that vault like they want you to believe? No, what do they do with
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  your best? They lend it out that those cubicles around the outside, they're lending your money out.
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  So if they're paying you one percent on your deposits, you leave in the bank,
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  are they lending it out more than one percent? They're making a spread. So I'm doing the same
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  thing with this policy. I'm making six and I'm borrowing it at four. I'm making a two percent
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  spread and then I pay off visa. I paid visa a hundred bucks a month, which is all interest at 20%
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  and now instead of just saying, oh, visa is gone. I'm done. No, I treat my money the same way I would
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  treat the bank's money. And instead of paying visa, I just changed the name on the check.
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  A hundred dollars I gave to visa, I just write that check back to my policy, paying my policy
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  loan back, which means now I'm making, I just made money twice. Did anyone catch that?
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  I just showed you how to make money two times instead of one time. I made a spread on my policy
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  between the six and the four plus I took back the 20% that I was giving away to visa.
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  So as long as everybody understands that, let's go round two. So I did this for years and I paid
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  off all my credit cards from lowest balance to highest. So now I'm recapture and all the money I
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  used to give away. So starting to feel like I got some real wealth because I was just giving all my
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  money away now, keeping it also. My policy is now mature and getting more and more money.
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  Now remember, my money through this whole process never left. So there's a thing called
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  compound interest that I'm benefiting from every year. I'm compounding on a higher amount,
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  a higher amount, and a higher amount. So every year without me working any harder or any longer
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  doing anything different in my life, my spread between what I'm making and what I'm paying goes up.
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  Automatically, because I'm compounding on a higher amount so that spread just naturally,
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  mathematics, my spread gets bigger and bigger. So instead of making a 2% spread, five years later,
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  maybe I'm making a 7% spread. Another five years, maybe I'm making a 10% spread. Folks,
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  it's just mathless and I'm not telling you anything crazy complicated. But eventually all the
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  debts are paid off. But we all buy cars, right? Now most people finance their cars like I used to.
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  Well, now I finance my cars, but I finance it with my bank. I take a loan from my bank, the policy,
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  and I buy the car cash. But I then ask the dealer, whoever I buy the car from, how much would this
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  car be if I were to finance it through your finance company? 600 a month? Great. I then write a
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  check for 600 a month back to my policy. Today, it's evolved a lot from there. I lend money out at
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  12% through our FinTech company called Private Money Club. So I take loans from my policy. I lend it
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  out to, you know, good investors that are buying real estate and I charge them 12. So now do the same
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  math. Remember, my policies are mature now. I'm making a heck of a nice spread. Let's say it's
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  five to 10% and I'm lending it out at 12. When most people got lend money out, they make whatever
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  the interest is they're charging right 12%. I'm making 12 plus my spread. I'm making money twice
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  and I'm doing nothing different than everybody else. I've been doing this now for a long time and
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  see what I teach and I teach it and the reason no one knows about it because it's still like one of
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  the biggest secrets of the wealthy is if I was an advisor and I was to design one of these policies
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  for my clients, I would have to give up 90% of my commission. How many advisors want to take a
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  pay cut of 90% and give you the answer. Zero. None. That's an easy, easy, easy. I wouldn't.
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  I wouldn't. The insurance companies, like in the early years, I worked for a company called New
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  York Life and then I worked for their investment division called Eagle Strategies, but they never
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  taught us this but yet they knew all about it. But they didn't teach us because they don't want
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  an order for the policy to work to explain to where I put a, you know, I put a thousand bucks in
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  and I have almost all of that money to use immediately in the next 30 days. Requires the advisor or
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  the person building the plan who was us today to take a 90% reduction in commission. So we're
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  a normal whole life at let's just use 10 grand, right? For simple math, if somebody put 10 grand
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  into a regular off the shelf whole life with their advisor or agent, that advisor will make a
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  minimum of $5500. That's a good day in the office, isn't it? So you put 10 grand into a regular
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  whole life that advisor just made a pay of $5500. Now flip the script. I design the policy through
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  our company to do what I just explained. My commission is $387. See the difference? Would an advisor
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  rather make $5500 or $387? Doll, right? But in order for this to work the way that Brent and Mike
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  and all these guys use it, it has to built that way. Otherwise, it's always somebody's got to give
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  for somebody else to get and the give has to come from us to design the policies the right way.
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  This is why nobody knows about this. Thanks for tuning in. If you found this valuable, don't
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  forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper
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  into this conversation, check out the links in the description to watch the full episode. See you
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  in the next one.