Latest / Wealth On Main Street / 345: Policy Loans Explained | 5 IBC Questions Worth Asking

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345: Policy Loans Explained | 5 IBC Questions Worth Asking · Wealth On Main Street

0:00
Speaker A: Foreign. Welcome to wealth on Main street, where conversations about growing your wealth are fun and entertaining. Wealth isn't just about money. It's the skills and the knowledge that we develop to pass on to future generations. Tune in each week to grow your mindset and your net worth. At the same time. There is multiple instances of people indicating or suggesting that you're borrowing your own money. That is 100% unequivocally false. You do not borrow your money. My good friend Mike Smell gone through a series going through one of our books, Cash Follows a Leader, one of our advisors in the United States. He's a grandfather. He's got an amazing home services business that he operates with his son. So he gets to be in business with one of his kids, which I think is really amazing. Mike, the first one has to do with what is a modified endowment contract or a mech. And then what are these limits? What is the difference between a direct recognition and a non direct recognition company? Why are life insurance carriers starting to crack down on The Infinite Banking marketing? Is the irs, Uncle Sam going to close the tax free loophole for infinite banking? First off, there is no such thing as a tax free loophole. And then are you actually borrowing your own money? So, Mike, I think we should go to the first one. The Infinite Banking Concept creates a lot of questions, questions for people digging in, learning about that. You want to understand the process of Becoming Your Own Banker depending on where you live. Are you in the usa? Are you in Canada? You might have different questions. Sometimes we think a little bit differently. Sometimes there's things that are relevant to us, maybe more so on one side of a border or another. And fundamentally the what seems to try to drive a wedge is this massive tax line that seems to exist between one country another. The reality is how the concept works of becoming a maker is completely the same regardless of what border you're in. The difference is in some of the subtleties and some of the language. You know, as an example, we say a a lot in Canada and there's a little bit more snow here depending on where you live in a lot of loc. So from that vantage point though, I've got my good friend Mike Smella with me today. Mike's been on the program, he's gone through a series going through one of our books, Cash Follows a Leader. Mike's one of our advisors in the United States. Amazing guy, he's a grandfather. And man, this guy's great with his hands too. He's got an amazing home services business that he operates with his son, so he gets to be in business with one of his kids, which I think is really amazing. Mike, I love that about you. And you, you volunteered some time to join me today to unpack a couple of questions that we received recently on some of our videos. You know, we always ask people what are some of the things you want us to cover specifically on the show? And we have our series, our Real Talk Friday series that we do. So this is really a part of that. And we're going to unpack. So I'll list what some of the questions are and then we'll kind of go through them a little bit one by one. So the first one has to do with what is a modified endowment contract or a mec and, and then what are these limits that we keep hearing about? So we'll talk a little bit about that. What is the difference between a direct recognition and a non direct recognition company? So we'll expand on that a little bit. We're not going to get too deep into the weeds, but we'll definitely cover the basics. Why are life insurance carriers starting to crack down on The Infinite Banking marketing? It's kind of interesting, I think, about that, like crackdown, like what kind of crack are we talking about here? You know, so, so there's going to be some fun discussion, I think around that one. Is the IRS, Uncle Sam going to close the tax free loophole for infinite banking? First off, there is no such thing as a tax free loophole. We'll get into that. And then are you actually borrowing your own money? So we'll talk about these things. We'll kind of go through them one on time. Now, Mike, I think we should go to the first one because this one I think causes a lot of both confusion and misunderstanding and it's talked about frequently. And because it's, it's something that kind of shifts and changes depending on policy design. It's kind of like this nebulous thing that's hard to get your hands onto. So let's talk about the MEC limit. Why don't you kind of walk us through, I think you got a definition of we can read about what this is and then we can just have a discussion about it.
4:20
Speaker B: Sure, Richard. And it's, it's great to be on again. Always, always fun to talk with you for sure and educate all of our people on both sides of the border. So it is but modified endowment contract. I mean it. We talk about keeping things simple and a lot of these things are in day to day operations. It doesn't matter. Okay. But what had modified endowment contract way back when, back in. I think it was the. Back in the 80s,
4:53
Speaker A: there was a tax reform act in 1986, and there was some stuff that led up to that prior to. And then. And then it became official, I believe, in 1986.
5:03
Speaker B: Yeah. So really what it is, is it's, it's tax rules is what it is. And, you know, think of it. I want to try and keep things somewhat simple for people. Think of it as a ceiling. It's the, it's the maximum amount that we can contribute into premiums, wise into a policy and still staying under what all, all of the federal tax rules of life insurance. Okay. So it's really a matter of how much premium is paid into a contract relative to the death benefit under the federal tax rules. Again, when I'm talking to clients and prospects, it's the ceiling. We can't. We can't. If we're. If we have a policy that we're designing and it's a, let's say, $1 million policy, and we're putting anywhere from 10,000 a year up to maybe 30,000 a year in, or whatever the numbers are, and then we sell a piece of property worth $3 million. We can't take that and plunk it all in. The IRS says no. Now all of a sudden, you're going to be losing some of the. Or potentially losing the, Some of the tax benefits. So life insurance contracts under the taxing rules, they stay as life insurance contracts, not investment vehicles. So really what we're doing is we're saying let's make sure that we stay under all of the good things that we've got to optimize our tax benefits versus trying to put more in and potentially running into a problem from that. Hopefully that makes a little bit of sense. Or how do we want to kind of go from there with it?
6:58
Speaker A: I. I like it. I think it. I think it clarifies things because we want to keep things simple. And then, you know, we're going to have some technical people listening as well. So I'll, I'll. I'll play the role of the more technical guy in this situation.
7:09
Speaker B: You do that. Because I'm not. I'm not the big technical guy. You are much better at that.
7:14
Speaker A: I, I like, I like doing the, the examples of the ceiling like you just did. But I'll. I'll kind of. I'll take my. Going a little bit into the weeds for this scenario. So, modified endowment contract. I mean, the Keyword is modified. Because technically an insurance policy is often considered an endowment contract. So now we're modifying it from what it should be from that vantage point. So from a, from a perspective of the irs, what we have is we have exemption tests. So there's, there's various exempt tests that take place. And annually an insurance company is basically running these tests automatically on, on a, on a contract. The same thing happens in Canada, by the way. We just call it something different. We call it the MTAR line. It's, it's fundamentally means ultimately the same thing. It's, it's how much money up to the ceiling that Mike identified in a given amount of time based on the structure of the policy. Because every policy is different. Everyone's got a unique situation. So, so policies can be constructed in different ways and they can be changed over time because the policy owner can make changes. So your changes in your behavior as a policy owner could actually impact this situation. And a policy that is not a MEC contract could become one at a later date based on your behavior. So that, that is an important criteria. That's why we need to talk about it. And so there's, there's one thing called a 7 pay test. It has to do with how much capital, how much cash value can accumulate inside of a policy in a seven year time frame relative to what we're putting into it and the design of the policy. And it could fail that test if there's too much capital built up. Because now the policy is effectively, if you look at it this way, it's no longer really, from the eyes of the tax man, considered an insurance contract. It's now broaching into something else. Okay? It still maintains its status as an insurance policy. It pays a death benefit. But from a taxable perspective, they say, you know what, you just put too much in this thing. This isn't really quote unquote an insurance contract anymore, like from a tax vantage point. So that's really, that what's changed kind of as of 1986. Similarly, there's something similar in Canada. The difference is in Canada, you know, we, we actually keep it pretty simple up here. And most companies, it's very difficult to create a scenario where you can fail the exempt testing structure because the policy design at the actuarial level now they issue the contracts, they usually try to minimize your ability to screw it up. Let's just put it that way. Okay? Now down in the States, Mike, you kind of guys have the Wild west out there. Everyone loves a good Western, at least I do. And there's a lot of ability to go and maneuver or even I would say manipulate an insurance illustration to do things that maybe it's not really supposed to do. And through that activity, a person could potentially put themselves in a position, a dangerous position where there's a higher probability of having an insurance contract become a MEC or a modified endowment contract. So I want to expand on that just a little bit.
10:14
Speaker B: So aren't and. And there, there also isn't a hard and fast rule of what you know, what is that MEC limit. Each insurance carrier defines it their own. So you know, again, those people that are hard and fast, you know what's get give me the true definition of where that modified. There really isn't one each. Each company develops it on its own. So it's kind of a nebulous, you know, is it a mech? Is it not a mech? It depends on whether you're working with this underwriter, that underwriter what you are particular the way that you design the policy. Like you're like you talk about how much that we are funding the policy. So the policy owner's behavior in that there are a lot of things that go into it. I think the big, the big picture of where that fits into the equation is when you're talking with your advisor and obviously the advisor knows this. So it's just a matter of hey, how much do you want to be able to put in? How much do you think, how much flexibility do you think you're going to be able to want? And what's that ceiling? We get to a point where you've got additional capacity on an ongoing basis. Well then it's maybe time to start another policy. As Nelson talks about,
11:39
Speaker A: hey, I like free stuff. I hope you like free stuff. In fact, we got something for free you can download right now. It's a copy of our book, Cash Follows the Leader. This book is all about how you can develop uninterrupted daily growth with high cash value value life insurance. We explain a ton in there. We even have some fun images so you can follow along. Go ahead and go to cash follows.com that's cash follows.com and pick up a copy for yourself today. And the key distinction of a MECH contract, like there's a lot of commentary and stuff out there that it's the, it's the end of the world. Like, oh my God, we screwed it up and we can't do anything about it. You know, one of our good friends, our colleagues, James, he's encountered where people have a mech policy and, and things happen because of certain situations. It's still a great policy. It still has all the contractual benefits. You're still the policy owner. It still has all these massive advantages. There is some potential tax consequences when you're accessing capital during your lifetime. But if you have multiple policies or other things and then you probably have other things to tap into. So it is not the end all, be all or the worst case scenario. Is it nice to minimize and avoid doing it? Absolutely. But is it a hard fast like oh my God, if we have a modified endowment contract, might as well just burn the house down like the, everything's, everything's over. The answer is no. You have all the same contractual features. And here's a key thing that we really want to make sure people understand. So one of the things that we go over in the Nelson National Institute Coaching Academy because I, I, I recently just completed doing one of those here in first time ever in Canada. We did one in Calgary, Alberta. It was amazing, had an amazing group, people over 50 people attending that session. And we do a segment inside of that coaching academy, especially built for existing but primarily for new advisors. It's called Policy Design Considerations. It's not a checklist of here's how you need to go about constructing a policy. Because everyone can operate their business and more importantly, every unique client has unique circumstances. So customization is a key critical component. But in considering how we build a policy, there's life company decisions, you know, how they operate administratively, how they manage their PAR fund, how they handle loans, a number of factors. But more importantly, when you're designing the contract itself, have you considered things like a MEC status and not just what does it look like on the illustration because once the illustration is printed and then the client has a contract, the client can do certain things that weren't on the illustration. They could potentially put more capital in and cause a problem or they could do it at a certain point in time. And I'll give you an example of this, Mike. You know in Canada we don't really have seven year term riders but you know, they, they do exist in the states and that we see them used by many other organizations versus one that's a 10 year, a 20 year or even a 30 year term insurance where what happens is we add a term rider and do you get a whole life policy? It's a nice foundational layer and then we're putting a temporary structure like you know, you know, when people have, they want another place to park their car, but they don't want to build a garage. They'll go get one of those tents with it, like a tarp and everything around it. And you just kind of put it together and, you know, it's like a. It's like a modified carport, but you could just drag it around with a quad on your property if you have an acreage. It's not a really good structure. It's temporary, and after a few years, the weather's going to beat it up, knock it down. I mean, if you live in Florida, hurricane's going to come and blow that thing into your neighbor's house. It's not a proper structure. So that's the way you can think about the term insurance, if you get my. My meaning and my drift. And so those things can end over periods of time. And more importantly, the policy owner, they could reduce or cancel a portion of term insurance. They could still have the main contract, but they could remove or cancel a piece of term insurance. And if they've done that, but they've put too much premium in and there's too much accumulated cash value, they could create a MEC environment, even though the illustration, the design and the intention at the point the contract was put in place was to do something different. So this is where the behavior of the ins. The insurance, sorry, the policy owner is far more critical than the behavior of the insurance company. And so it's also why good coaching matters. That's why having a relationship with your advisor, being able to have ongoing meetings, being a part of a community, not being a lone ranger, connecting with your advisor, or once or twice a year, jumping on a webinar with your organizations. You know, staying warm, close to the fire around this behavior in this mindset will make you a better banker. It'll make you be in a better position where some of these things don't happen. Now, I've been doing this mike for, I think I'm entering or at my 17th year, something to that effect, which is kind of weird when I think about it. Now, the reality is I've seen all kinds of things and we can have a conversation with a client 10 years ago, and the probability they're going to remember that exact conversation is pretty low. If we move forward in time a decade, we forget things. We're forgetful people. We have busy lives. So you have to recognize your attitude and your behavior as a policy owner and how, how consistently and regularly you stay close to the fire about the mindset, the behavior. Becoming Your Own Banker can have A direct and material impact on your future financially. So when it comes to the contract itself, how it performs, how you utilize it is far more important than the behavior of the insurance company. And as an advisor, we try to put our best foot forward in the design process based on what's going on in your life. So we can create a structure that helps optimize towards your objectives, but also protects you from potentially doing some unintended consequences in your own life later on. And there are some things you can do in the design phase, especially around the utilization of things like term riders that can be potentially extremely damaging to the financial circumstance of the client. It might look good on paper, but one change in behavior could completely screw that whole thing up. And that's why we have to really be aware of that. And we spend a lot of time in our organization talking about what is the problem when it comes to becoming why, why would you want to do this in your life? And then we take these ideas from our clients and it informs how we construct the policy for their benefit. Versus here's the cookie cutter example, go ahead and use this. You know, it's like handing someone a chainsaw, sharpening the blade, firing it up and say, here you go, good luck. No safety gear, no safety training, you know, and we just say, you know, here, go cut down that 30 inch tree, good luck, hope you get there. It's just not appropriate. So we spend a lot more time in the education phase because of things like this.
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Speaker B: Sure. And, and as we. I actually had a client the other day that called up and, and he wasn't, wasn't quite sure on a few things. So what we ended up doing is, is getting on the phone with the insurance company. We, you know, did a three way call, we said, hey, how much additional paid up additions can he put in for this year without creating a modified endowment contact. So we let the insurance company come back to us and say, here's your limit for this year. Now next year it might be a little bit different, but we always have the ability to, whether you do it on your own or whether you do it with your coach, to contact. If you're not sure, contact your insurance company and find out. Another thing that we typically see is if you, let's say you get a big lump sum and you want to put it into your policy and you send the check in the insurance company, if it does potentially get to a point where it's going to maybe get it as a MEC or turn it into a mec, the insurance company will typically reach out and say, hey, you know what? You sent us too much money. You're going to create a mec. Are you sure you want to do this? So they're typically looking out for us as well. So there are some safety rails that we have kind of built in. But like you were talking about, Richard, it's always great to be in touch with your, in touch with your advisor, in touch with your insurance company because it is Becoming Your Own Banker. It is yours. So. And that's just part of it.
19:56
Speaker A: And I like using the, the fire analogy because, you know, everyone has sat around a campfire and you know, some of my most fondest memories, Mike and I suspect yours are spending time around the campfire with friends and family. You know, whether it's, you know, it's a hot dog roast or marshmallows or whatever it is, but you're, you're in community with one another and you know, as the night progresses and gets on, it gets colder and colder in the evening. You put more wood on the fire. But more importantly, you know, as you get down to the embers, you pull your chair closer, you move closer to the warmth and the heat. It's a natural human tendency. So think about your proximity in heat to your education and understanding of the concept of Becoming Your Own Banker. Not sure if Becoming Your Own Banker fits your goals. Trying to figure out if this is even for you. Well, save some time. Look, our free 7 Simple Steps report is the fastest way to find out. It's designed to give you total clarity and focus your effort on what really matters. Plus, you'll get access to free four of our best selling books as a bonus. Go ahead, get it at seven steps ca. That's seven steps ca. Well, you getting pulling your chair up to the fire is jumping on a live webinar. It's listening to this podcast. It's, it's continually filling your brain. It's rereading Nelson's book. It's booking an appointment with your advisor to talk about an idea strategy you have and, and how it might work in your situation. That's pulling your chair closer to the fire in that example. And then here's the final thing I'll say about the MEC limit or MEC situation. And again, we'll pull the Canada in here because the general premise is identical between Canada the United States around what causes this type of an issue. There's only so much tax exempt, I repeat, tax exempt accumulation. So cash value accumulation that is allowed to exist inside of a particular insurance contract relative to its insurance coverage. So whatever the death benefit is. And then, and then what is the exempt test? So the exempt test in Canada and the United States is different. And there, there's more than one. There's actually a combination of tests that get paid. You could fail in a combination of things. So United states has a 7 pay test. They actually have a few other tests that they run and these are happening all the time in the background. And so just because a policy is issued and it has an illustration and a funding amount goes in, and if we go forward in time, it might maintain that it meets this qualification. But if there's a material change, a material change to the structure of that policy or the death benefit specifically, that could cause a retesting element to occur. And that's where it now might fail. So just because it passed the 7 pay test once doesn't mean it's always going to do that. If there's a material change. The only person who's allowed to make a material change to the contract is the policy owner. Again, 100% based on insurance. So the advisor might have set up a great policy. They might have did everything correct. They might have educated you, they might have provided research, I send you emails, they might have told you to listen to this podcast. They might have done all these things. And then one day you fall down your stairs, you smack your head on the basement, on the concrete, you develop amnesia, you fumble through your filing cabinet and find an insurance policy. You call the insurance company and say, hey, I want to cancel this term rider. I want to do abc. Now, you've materially changed the structure of that contract and you may have placed yourself in the position where it fails that exempt test. That is 100% on the policy owner and policy owner behavior. So you got to stay close to the fire. Well, Mike, on to the next one here. So next question has to do with this. This is about the difference between so what is the difference between direct recognition in an insurance company and non direct recognition recognition? Common thing. I see headbutting and battles about this on all the forums all the time online. I find it really, really comical. And we, we, we'll try to keep this simple, but then we'll, we'll unpack it a little bit more as we go as well.
23:52
Speaker B: Sure. So I personally, I've only, my policies are all with non direct recognition companies. So I don't have any personal experience with direct recognition companies. It all really has to do with when you take a policy loan, does the insurance company Directly recognize, let's say you take a $10,000 policy loan out, do they recognize that $10,000 and your accumulation of your cash value is or is not recognized in that transaction? So in a non direct recognition situation, if you've got $20,000 of cash value available and you take out a $10,000 policy loan which you borrow from the general fund of the insurance company, they do not recognize it, that it is left. So your entire amount continues to grow uninterrupted on a daily basis. In a direct recognition situation, you've got that 20,000 available and you do a loan for $10,000, they recognize that 10,000 and the growth is now only on the resulting continued 10,000. Now all of that does continue to grow uninterrupted, but you've borrowed the 10,000, so they directly recognize that.
25:26
Speaker A: And this is good. And so the key thing is directly recognizing that the loan exists. Here's where things are often a little bit misinterpreted in how people recognize the understanding of these two elements. Because automatically, based on what we've described, most people say, oh well, obviously it seems logical I would want to therefore have a non direct recognition scenario. But that's not the entirely the whole truth. And what I mean by this is. So first off, I spent a fair amount of time with Nelson Nash. Nelson Nash personally owned a lot of policies. Number he had 49 policies at one time. And, and with a lot of these policies, many of them were with what are considered direct recognition companies. Well, Nelson passed on and of course he sold a lot of policy. He actually worked, he had a long career with one company that is well known as a direct recognition company. And in fact he even had a pension with that company. And so there are many of those policies that he sold that still exist today and they exist within the Nelson Nash family tree. So David Stearns, I was just with David last week here up in Calgary, Alberta. Unbelievable. They got to go spend time in Banff and in the mountains. And he shared an incredible story at the Coaching Academy about some of his system of policies. Lots of policies actually increased his system. And many of these older contracts are with a direct recognition company. He had policies issued essentially the same day because they were trying to match examples in Nelson's book on children. $2,000 a year policies on children on the same policy with the same company, with the exact same structure built identical. The policies where he took policy loan and he paid the same premiums, we're not talking about more premium going in. He simply repaid the loans and he was charged loan interest by the life company on those with the direct recognition company. The policy where he did the loans and the one where he didn't, the one with the loans has a higher amount of cash value. He actually received higher dividends even though the company directly recognized that the loan was outstanding. Now here's the other thing. When he took the loan, he was paying a higher interest rate than anticipated. Well, the reason that that occurred is that the insurance company operates by a fundamental principle. So first principles tell us a lot about how things operate. In the first principle that a participating account is managed by, with most insurance companies across the world, but specifically in North America, is something called, it's called a contribution principle. So the way that contribution principle is whatever policy based on how it was sold, the assumptions that the actuary made when they designed that product and the pricing around that product, the pricing of that product was based on what could they earn in interest? What could they do on their investments? How many death claims are we going to pay out? What do we got to pay in taxes? What do we got to pay our employees? What are our cost of expenses? What are the commissions we have to pay advisors? All of that is built in to the original pricing assumption that determines the rate for the person who's 45, 55, 65, 85, it doesn't matter where you are. We design the product based on age, based on all of these factors, and it's a reasonable projection of what we expect to happen over the next 20, 30 years. Make sense? Well, every year when they assess the policies, they look at those assumptions and they say are we above the assumption or below the assumption that was made? And did this policy materially contribute more to surplus or less to surplus compared to other ones? And that's how they fundamentally look at applying dividends. So in a scenario of direct recognition, if you take a loan and the loan is at 7% versus I can get 5% over at this company, but I directly and materially contribute more to the surplus, it would be logical that I should receive a higher dividend respectively, based on all the other factors. So maybe there were more death claims in my group, in which case we would be below the line from the assumption. But if we talked about policy loan and policy loan interest coming back to the pool that we all share in, there's people who put nothing into the pool, and then there's people who put into the pool. Well, the people who put more into the pool contributed. And so therefore biologic and the first principle of contribution, we could assess that they may be able to achieve actually a higher rate of dividends than other people. So it's misleading to say that non direct is better than direct. The reality is it depends. There is no right or wrong answer. What does matter is how easy is it to do business with a company. Do you understand what the contribution principle is? And do you recognize that you as the policy owner and your behavior, whether you're repaying loans or not repaying loans or paying interest to the pool or not paying interest to the pool pool, the things that you do will have a far bigger impact than anything that the insurance company. Okay, farmers, business owners, look, stop letting banks control your growth. Our book growing your own capital shows you how to finance equipment, land, inventory and the expansion of your own family system. Get a free digital copy@growyourowncapital.com that's growyourowncapital.com
30:56
Speaker B: these insurance companies that we work with, these mutual insurance companies, they've been around for 130, 150, 170 years. They've been profitable every single year. They're owned by their policyholders. They are as solid of financial institutions as there are on the planet. So a lot of times the, the minor, I guess whether you want to call them differences or nuances, whatever, hey, they've been, they've continued to be profitable and they continue to pay the profits back to the policy owners. So it's a lot of these questions do come up and yes, we need to address them. And it's great when people do bring them up. When I talk with our prospects and our clients, you know, I keep trying to go back and I know you do the same thing, Richard. It's this entire concept of infinite banking. And the vehicles that we leverage are truly brilliant in their simplicity. And I think as a nation, as both nations, we're taught to, well, what about this? What about this? What about this? What about this? Well, whoosh. Let's go back to the very basics. Does the concept work? Does the concept make sense? When you create an asset that you own and control and that you co own the insurance company and that so long as we contribute to it, the insurance company has to perform. And the more that we put into it, up to the limits, it puts all the impetus and all of the risk on the insurance company. Is that good or is that good?
32:53
Speaker A: Well, one friend
32:54
Speaker B: of mine says that a lot doesn't.
32:56
Speaker A: Yeah, this is. There's a guy. No, he does say
32:58
Speaker B: that.
32:59
Speaker A: Here's one thing I would have people consider in relation to this as well. This kind of circles back to our, the previous part of our conversation around MEC limit, but it's all tied together. If you have a vehicle or, or an airplane, we have a lot of people who, you know, they're, they're pilots and things. Every vehicle has a red line on it. You know, if you've got a tachometer on the, the dash, you can see when you're getting into the red line and you're hoping that that thing's going to shift before you hit it. But when you're in top gear, you keep pushing that thing and it's in the red line. How long can your vehicle and your engine run at that degree before something breaks down and you're going to, you're going to be splattered on some kind of concrete barrier because you were over driving the vehicle, right? You were pushing it past or at the, at the edge, the absolute edge of its limit for too long. Now, they're always going to engineer some fudge factor in there. Everybody's going to try to engineer some fudge factor. But if you're the one driving the car, you're the one pushing the limit. And if you do that repeatedly, eventually something's going to happen and you're going to want that death claim to come in for your family because you're the one who screwed it up. So consider the design of an insurance policy. Do you want a policy put together and structured in such a way where you're, you're literally on the red line and you're, you're tiptoeing across basically the, the, the precipice of falling over into a tax situation or this situation or that situation. A policy should not be designed based on that because, and as humans, we should not be driving our vehicle that way. We know if we want to get from a long range perspective, understanding Nelson's core principles, you got to think long range is rule number one. If you're thinking 20, 30, 50, 70 years down the road, you're thinking beyond your own lifespan. Well, man, if you're, if you're buying a car, you're not buying a car because you want to drive it for one year. You're buying a car because you want to drive it for 10, maybe 15, you want to be able to hand that down to your kid when they're, they turn 16 years old, get their license so they can drive it for a while. You have to recognize how you drive that vehicle is going to have a Direct impact on what happens for whoever ends up with it. And if it's still going to be you, you want to make sure that it's safe and you take care of it. The same way you would approach a vehicle that you look after is the same way you should be looking after your insurance contracts.
35:25
Speaker B: Yep. Absolutely. Absolutely.
35:28
Speaker A: Now, next one on our list here is fun. And I think this is interesting. So why are life insurance carriers starting to crack down on infinite Banking marketing? Well, here's the real answer to that. Life insurance companies don't give a flying rat's ass about infinite banking. What they care about is whole life insurance. Infinite banking. And The Infinite Banking Concept is not whole life insurance or whole life insurance contract. That is the problem. There's a lot of people and talking heads just like this one out on the YouTubes and the Tic Tacs and the Instagram talking about how they bought the next greatest red sports car and they made a bunch of money because of infinite banking, which is 100% false, completely inaccurate, misleading to the public, and they're making statements that are inaccurate. And if you're a life insurance company with a really expensive legal team, you might take offense to that. And so a life company isn't going to endorse something that they, number one, likely don't own. And number two, creates unnecessary confusion. A concept that you implement in your life, which is more broad in its way that it can be applied into your life versus a product which is whole life insurance. They are not, they're simply not the same thing. So they're not cracking down on anything. What they're identifying is they want people to talk about their product the way it's supposed to be talked about. And when you talk about whole life insurance, you better damn well be saying whole life insurance, dividend paying, participating. And you could talk about its features and talk about its benefits, whatever your license indicates till the cows come home. But you better not be saying, hey, get this, infinite banking blank. Well, no, there is no such thing. That is a concept and a way of doing things. It's action. Banking is an action word. It's something that you do. Okay? And, and so we need to really, as, as practitioners be clear in our, our statement. And I can put my hand up in the air. I have said some dumb things and misleading statements in the past based on what I knew at that time. But if I learn more and I know more and I grow because I don't have the arrival syndrome, it I have to start showing up in a different way. And explaining and clarifying things better. And that's what we really try to do in this podcast. So are the insurance companies cracking down on anything? What they're cracking down on is stupidity and people trying to blend in a whole life insurance contract that they might sell with a concept that has nothing to do with that contract whatsoever.
38:04
Speaker B: Yeah, the. You know, we, we talk about the. The product. The participating whole life insurance contract is the vehicle that powers the engine. The engine is The Infinite Banking Concept. Why does it make sense to reverse the flow of interest out of our lives and opportunities out of our lives back into our lives? Okay. That's why we do. We really. And as practitioners, it's educating people on the concept of privatized type banking rather than what we've always been taught leveraging somebody else's banking systems. Okay, great. Focus on that. Okay, that makes sense. Now, how do I go about doing it? Well, ultimately, there is. There are tools. There may be a number of different tools that can be used. Do you want the most efficient tool or do you want something that's less than most efficient? I want the most efficient. Okay, great. Then here is what history tells us and all of the results tell us is the most optimal vehicle to do that. Two different, like you're saying, two different things. There's the concept, and then there's the vehicle that powers the concept.
39:22
Speaker A: I would extend. I would say the. The human mind that drives the actions that the human takes powers the concept. The, the product is the efficient storage warehouse. It's the location where you want to have capital reside for efficiency purposes. So that when your human brain wants to power it, to put it to work, which is the banking transactional element. It's the movement of money from one reservoir to another in a relatively short period of time. That is the process of banking that Nelson is talking about. He says that right in the book. So that is a action process. Banking is a verb. It's an action word. It's something that you do. A bank is a storage facility. Well, whole life insurance isn't a bank. It's whole life insurance. An insurance company is not a bank. It's an insurance company. They have similar situations. They have similar things that they do, but they are unique and different. And we need to clarify that those things. So just because something has a similarity, you can draw similarities to it, but you need to specify and be clear that this is what this is and this is what this is over here. And I think there's a lot of confusion because people try to oversimplify and that oversimplification, unfortunately, actually leads to more complexity unnecessarily. Hey, if you're getting value from this and you haven't subscribed yet, hit the subscribe button right now. Look, we're marching towards 10,000 subscribers and every single one helps us bring more powerful content. On taking control of your money. That's what we're all about. Go ahead, hit it now. Now, here's the last thing I would say on this. So first off, David Stearns and Lee Bargainer, they recorded a recent podcast episode on their YouTube channel. We, we encourage everyone to go to the Nelson Nash Institute, subscribe to their YouTube phenomenal content there. And more importantly, he just recorded a great episode speaking about this topic and the use of the word bank and where it's not appropriate, how certain language you should be saying. Practitioners are held to a standard. They sign an agreement to abide by that standard. And if they're not abiding by it, they might find themselves no longer a practitioner. They can have their practitioner status revoked if they're not being using appropriate language. And you know, there might be warnings issued to some of those people. And if they don't play ball, well, maybe they're no longer considered a practitioner. And that's happened in the past. A lot of people don't realize that that is the case. So how you manage that is really important in your business practice if you're a practitioner, but also if you're a client of a practitioner, the language that you use and you communicate with your friends and your family and the people around you also matters because unintentionally you might confuse other people as well. And nobody really wants do that. We all want to tell, we all want to be a truth teller. All right? And here's the other thing. There's lots of companies, lots of insurance companies, a lot of them offer whole life products. But you know, there's certain companies who show up and they sponsor and attend the Nelson Nash Institute think tank. And they'll even sponsor and attend and send their representatives to attend a Nelson Nash Institute coaching academy where we spend two full days talking through Nelson's principles and teaching things about what you should be saying and should not be saying, what is a misuse of language, which is part of the, the curriculum of that event. And they appreciate when we do that, they're not going to stand behind and say, wow, we're going to just plaster The Infinite Banking all over our billboards, you know, in our downtown building. But they are supporting the initiative of good design and good language with, with practitioners and the community. When they show up to a think tank, when they have a panel of their top representatives that are being interviewed and they answer and field these questions. Now those don't get recorded because they don't. They don't want the lawyers to have to go to battle something that somebody said and they want them to speak freely. But if you're a member of the community and you come to that event, you can hear and answer these questions directly and you'll hear the horror stories of what their legal department has to deal with because one person, you know, one bad apple, says something really obtuse and kind of stupid and can ruin it for a whole bunch of people. A couple of years ago, Mike, there was one major carrier that came up with a letter and they distributed, I guess, to all of their, you know, all the people who have a contract with them and said, here are things you're not allowed to do and promote anymore. Well, first off, that carrier never once attended and sponsored a Nelson Nash Institute think tank. So you have people using it, asking them to go and endorse something that they clearly aren't endorsing or participating in in any way. Obviously they're going to think that there's something going on. More importantly, they had some individuals who weren't a member of the Nelson Ash Institute, were not practitioners who are kind of doing some nefarious things, and they were creating policies right on that red line that you and I were talking about earlier. And people were putting dollars in and they were accessing dollars and they would do that for one or two years, never make a loan repayment, take every single dollar that was possible to borrow against the policy out as a policy loan. They didn't remove anything. They didn't do cash withdrawal. Okay? They borrowed against, again, appropriate language and never put anything back. And their policies collapsed because of bad behavior, bad education, poor design, poor coaching, and on and on and on being too far from the fire. Many of those individuals never even knew about this book and certainly didn't read it. And probability is the advisor conducting the business didn't do it either. So when you have that happen repeatedly by a group of people who are doing high volume, basically turn and burn, churn and burn type business, and all the policies collapse, well, that's an indication that you have a problem as an insurance company, you're starting to create a shaky business, so you have to kill it. Now. The insurance company didn't do that. Bad apples with bad behavior, crappy Advisors did that. That's a them problem that now has a ripple effect to anyone who's conducting good business. And that's just how it goes.
45:42
Speaker B: Yeah, and the same thing happened in the mortgage industry back when. And you know it does. You know, it's like Nelson talks about, you can, you can put a, the right machine or the right vehicle in somebody's hands, but if they don't know what they've got their hands on and they don't know how to use it, not only are they going to not use it accordingly, but they're going to break the machine. So, you know, you can put a, a golfer out there on the golf course with Tiger woods golf clubs and it's not going to make him a great golfer.
46:14
Speaker A: Exactly. Yeah. Okay, next one on our list we've got here, Mike, is, is the IRS going to close the tax free loan loophole around infinite banking? First off, there is no such thing as a tax free loophole has anything to do with infinite banking. Infinite banking isn't a loophole. Infinite banking is a concept. And any potential tax advantages for people practicing infinite banking have nothing to do with practicing infinite banking. They may have something to do with the product that they own and their utilization of the product. But loophole is a dumb word. It's a dumb term. And we're all looking for a way to reduce or pay our fair share of taxes. And you may have a disagreement with what Uncle Sam says is your fair share. Okay. And that's logical and that's reasonable. You might think that you owe less and want to owe less. And so you're looking for strategies. Totally fine. Everyone should do that. That's your, that's your right as a human in North America is to only pay your fair share and to fight for what you believe is right. When it comes to your fair share, understand Uncle Sam's got a lot more money and time than you and they might win that fight. That's all I'm gonna say. Okay. Same thing exists up here in Canada. It's actually probably a little bit worse in my, my personal opinion. All right, here's the thing. There is no such thing as a tax free loan loophole. There's loans. And when you take loans in the United States, if you took a commercial loan, you don't have to report that as income. Well, in Canada, if you take a commercial loan from like a home equity line of credit, or I borrow money from Toronto Dominion bank and I get $30,000 for a loan and I put it in my bank account and then I spend it on stuff I don't have to report that as income. The same situation applies now in Canada and US. There are differences between policy loan because in the Income Tax act of Canada we have a different definition of what that means, which changed in our Income Tax act because of a former Liberal government in 1982 when we did a tax reform, because they were trying to tax death benefits and the insurance lobby went in an uproar and they was all over the front page news. They're like, oh, it's the orphans tax and the widow tax. You're going to tax all those poor widows. How do you think that played in the news, Mike? It didn't go very good. Would you believe
48:39
Speaker B: it?
48:40
Speaker A: No. So they made a modification and they made something called a disposition. So they said, look, death benefits are still tax free, no problem, we won't come after the widows and the orphans. But if you're using capital from that machine and you're using it while you're alive and it doesn't materialize as a death benefit, we're going to look at that a little bit differently. So there's an adjustment in the income tax in Canada and guess what? We have a whole podcast episode 100. It's annual homework for our Canadian climates clients to go over again and again to understand exactly how to deal with that when the time comes. There's a strategy, there's things you can do, you can be in control. It's not a big deal in the United States. What's the chance, ask me, Riddle me this, Batman. Okay. What's the probability, low, medium or high that a few congressmen and some senators and some well known political people who've got a lot of money and some high performing entrepreneur with boatloads of capital who spend money on government lobbies might own some whole life insurance?
49:45
Speaker B: Yeah. Not to mention, not to mention all the major banks,
49:50
Speaker A: all the men. Yeah. So do you think that they're going to all the people who have all the money, who put a lot of it into things like this, because they understand that a, they can use it and do things and it's safe and it's secure and it's protected and they understand that. They want to love their family and protect them as well. They do all the things that the person who's got 10,000 bucks does. They just do it at a larger scale. They add more zeros into the equation and they tend to bring money into political campaigns. Do you think they're going to have a little Bit of a problem if they try to close the air quotes loophole, I think. So
50:29
Speaker B: it would. No. You know, and again, we go back to the. These insurance companies have been around in existence for way longer than the IRS has been in existence. So it's, you know. No, just, just. No. Okay. It's a logical question. Personally, I have not had a client that or a prospect that has brought that up to me. But yes, it goes back to okay then if you're going to close or if you're going to say that policy loan are not, are taxable, then again, what about equity lines of credit on your house? What about refinancing your house for cash out? What about borrowing money in general? Does where, where does, where does that stop? You know, they're not, they're not going to just pick on one thing that is insurance. Because again, these insurance carriers are more financially solid and strong than all the major banks are.
51:27
Speaker A: Okay, entrepreneurs, this content is built for you. Comment below, tell us what money topic you want to hear more about. Your insights and questions inspire us to create the content that coaches you to build lasting control and growth on your terms.
51:43
Speaker B: And they do have quite a bit of clout and they did during times of, you know, the Great Depression and all these other. They supplemented and, and kept our nation going.
51:56
Speaker A: Yeah, I mean, there's demonstrated evidence from the past, these policies doing exactly that. Here's a key thing I would want people to think about. And again. So is the IRS going to close the loophole? First of all, loophole's stupid. This is the thing to be aware of in general. I'm not a tax professional, Mike, and neither are you. Okay? So I'm not going to say that I understand and I've read everything in the IRS tax code or the Canadian Income Tax Act. I really haven't and nor would I ever want to. I actually enjoy my life and I don't want to hate it by reading giant volumes of tax code because I think I could, you know, I'd rather spend time with my wife, my kids. But that being said, if in general, when they make a major change that is industry disrupting to a large degree, they don't, they don't come along all that often. When it happens, there's usually a lot of discussion for several years before anything comes to pass. And it gets pretty noisy. So you can kind of see when it's coming. They don't just like make the change and then all of a sudden it shows up on CNN one day. First of all, who's watching CNN anyhow. But the reality is, like, it's not something that is just going to happen overnight. There would be, if it ever did take place, you would be hearing about it for a long time. Here's the next thing. In general, when they make a major adjustment like that, guess what they usually also do. They grandfather the stuff that was already in place. So if you have an existing contract and that contract's been in place for a while, probability on a scale of low, medium to high probably is very high that you're fine. Somebody new might have to deal with the new environment, but you know, that's kind of on them. And so if that is true and that is actually something you're legitimately worried about, wouldn't that be all the more reason to get started now so you can have contracts that are in the before rules, not the after rules. I mean, again, we, we can't guarantee something like that. I can't, you know, guarantee what the future holds, but I can logically think it through based on past history and precedents to allow that to inform me on future decisions. So if that's a legitimate concern, if someone's asking that question, you need to give your head a shake and think about this. Look, if you're really worried about that boy, you better get in now. Like, you should book an appointment today and start getting something together.
54:14
Speaker B: Yeah, and even Nelson talks about this too. First off, going back to when was the last time that there was a major change? It was back in 1986 like you were talking about, and it was the modified endowment contract. So there hasn't been anything since then. And like Nelson talks about, okay, let's say all of a sudden it does become taxable. The reality is, is it still has daily compounded growth. It still has all of those amazing benefits that we have. Well, okay, if we get taxed on certain part of it, live with it, it's still. If we're getting taxed on that, we're getting taxed on everything else. I mean, imagine like, like one of the things I talked to people about is I said, okay, right now, private insurance contracts are private. They're outside of the control of the government. What does the government already have their control over? All qualified accounts, 401ks, IRAs, everything that we've been supposedly taught to do, They've already got their hands in it because they're the ones that are making the rules. Don't you think it would be easier for them to change the rules on something they already control? Yeah, probably so if you're thinking about are they going to change the rules on life insurance and policy loan I think you better be thinking about are they going to change the rules on your 401k and your IRA and, and those things that they already have their hands in.
55:43
Speaker A: The page 29 of Nelson's book is about Willie Sutton's law, okay? And he identity, he talks about this here. The first labor saving ideas don't produce anything, just steal that which someone has already produced. Question who is the biggest thief in the world? If you answered the internal revenues, Ernest, you are correct. Well, you know, Nelson wrote this before he knew a lot of Canadians and understood that CRA is, is actually he is a bigger guido than the IRS is Canada Revenue Agency. So then he says, look, he talks about Frederick Bastiat who wrote the book the Law. Among a number of other things, he identified it as legal plunder. He goes on to explain, but how is the legal plunder to be identified? Quite simply, see, if the law takes from one person's what belongs to them and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime, it's a pretty good indication. Then he further goes on to say it's kind of like a parasite host relationship. Government is not capable of producing anything. It gets all its sustenance from the productive element of society. Government is a parasite that lives off the productive taxpayers known as the host. It is self evident that if the parasite takes all of the produce of the host, then both parties die. So that last statement, that last sentence goes directly to what are they likely to do? So they have to give you options to get things and do things your own way. Meanwhile, the bulk of everyone's putting their money in qualified plans and they're literally growing a harvest for a future point in time. That's a, that's a lifelong cash flow for the government. They understand and they know very well people are aging and when they age there's all these points in times where they're going to get their pound of flesh. So they're not really concerned about it. If a couple of people are doing something different and they're not participating, they're not really worried. If 400 million Americans, there's only a couple of million of them that aren't really participating in that environment. Hey, once it gets to a larger amount of people, that would be great. Maybe they might take notice. But the reality is most people are just doing what everyone else is doing. They're just lined up like sheep continuing the process. The people who want to practice infinite banking, they're the black sheep that's put their head up and says, whoa, whoa, guys, I've seen that shoot up there before. If we go, we go through there, we ain't coming back. You know, they understand that the, the butcher's knives are sharp and we don't want to go down that road. And if that's you, probability is you should really be considering this last one we got on the list here. Mike, this is so much fun. You're having a good time. I'm having a blast with this.
58:39
Speaker B: Part of me is like, where did people come up with these questions?
58:45
Speaker A: So, last one on our list here for our Real Talk Friday is are you actually borrowing, in quotes, your own money? Are you borrowing your own money or are you taking out a high interest loan from an insurance company? Well, this is a good one. And I suspect that maybe it was an advisor that asked this because they wanted us to actually just really clarify it and get it recorded. There is multiple instances of people indicating or suggesting that you're borrowing your own money. That is a hundred percent, unequivocally false. You do not borrow your money. In fact, Mike, you've gone through and discussed this from your, you know, your, your chapter by chapter walkthrough of cash follows a leader. It identifies it really clearly in this book. If anybody wants a copy, go to cashfollows.com it's there free, free if you want it. And so you are never borrowing your own money from the insurance company. You are borrowing the insurance company's money. The insurance company has one big fat giant pool of money. It's called the participating account par pool. They got to put that money to work. And every day someone pays a premium, whether you're paying annually or you're paying monthly. There's millions of Americans, millions of Canadians putting money into that pool. And so every day money shows up. They take some, they pay some expenses. They take some, they put some in a rainy day fund called a contingency. They take some and they invest it into bonds and into long term things and into some real estate. They take some and they send it out as policy loan because people request a policy loan. Well, when that money comes in, Mike pays a premium to the pool and I request a policy loan. For all I know, I'm getting the dollar that Mike put in the pool and it's coming back to me. But you know, if My loan request is $100,000 and Mike only paid a premium of 10,000. Well, maybe I'm getting 10 premiums of $10,000 that just came in that day. And you know what? They got to put the money to work while they can put it to work in the investments that they have that are approved by the life company. Or they could put it to work in that policy loan. That money is custodial. It's being looked after for my behalf and for Mike's behalf. We care about our families. We want the insurance. We're in this pool together. We're in it to win it. But guess what? We don't have to do any of the day to day stuff. The management company, the people, the life company, they do all the work, they hire the employees, they look after them, they pay their salaries. It all takes care of it in the pool. It's the law of big numbers. And every once in a while somebody dies. Cool. That comes out of the pool too. Are you tired of watching your hard earned money leave your family and go to the banks? Look, our number one best selling book, don't Spread the Wealth, shows you exactly how to build a family banking system that creates true generational wealth. Get the free digital copy plus over 4 hours of bonus videos and our guide to hosting family banking meetings go to don'tspreadwealth.com that's don'tspreadwealth.com all done on my behalf. I get an ownership stake in that big giant pool that's well ran for a hundred plus years by really good people with long term horizon thinking. Despite all the ups and downs of every other market that's ever exist. Every war, every world war, every inflation, hyperinflation, this, that challenge, every pandemic boom. Insurance is still working away like clockwork. And I didn't have to do a damn thing other than participate. The key word was participate. So when I take a policy loan, I'm borrowing from a pool that I am a co owner in and I'm going to pay interest to that pool. And I don't care what the interest rate is, to be perfectly blunt, because if I pay interest to that pool, I'm contributing to a business that I'm a co owner in. And you know, my wife has a policy and my kids have multiple policies. And so if I pay into that co ownership pool and eventually Richard dies, well, they're just going to take some of that money to pay my death claim anyway and then my family's going to receive it tax free. And then my wife could borrow some more money. You see, we're all in it to win it, and it's all being managed really effectively in this beautiful giant pool that's being looked after on our behalf. But I have an ownership stake in it. What determines how much my stake is, is how much premium I'm putting in. How big is my policy, or policies, plural. You're not borrowing your own money. You're borrowing the insurance company's money. But the, the insurance company doesn't own anything. They don't own squat. They handle the money for their owners, which includes you.
1:03:18
Speaker B: And all the while, our asset, which is our policy, continues to grow uninterrupted, compounding daily, tax free, bigger on top of bigger on top of bigger on top of bigger, while we borrow their money to go do whatever we want. So while our initial. You know, Jason talks about this and which is, which is very true. When we pay premiums, that money is no longer ours. It's the insurance company's money. Just like when you deposit money in a bank, that money's no longer yours. It's the banks
1:03:58
Speaker A: know
1:03:58
Speaker B: that. Yeah, most people have no idea, but that's the truth. So when we create these policies, these policies just grow. They're ever compounding. They're getting more and more efficient every single day. And then we borrow the insurance company's money code to go do whatever we want to do. If that, then be it real estate, be it buying a car, whatever you want to do with it then contributes or creates additional cash flow. Well, where's that cash gonna flow back into? You gotta put your money somewhere like Nelson talks about, you know, our money must reside somewhere. Why not put it back into the system that you own and control? Oh, but when you pay the policy loan back, guess what? Those original amount was continuing to grow anyway. So you're building it back, but it's continuing to grow. Where's the downside in that, folks? There is none.
1:04:58
Speaker A: I got. I got to tell you an interesting story about this, Mike. This is a conversation I just had this week. So a client that I never sold the policy to, I took over. A gentleman got out of the business. He had some health challenges and he, he begged me to, look, take over some of his clients and help them out. I, I agreed. I'll be, I'll be blunt. It probably wasn't my best business decision of all time. It created an awful lot of work for. Not, for not an awful lot of value, to be perfectly honest. But nevertheless, I, I Have a responsibility to help these individuals. So I have a, I have a young, young girl and she's had this policy now for it's, it just entered, it just crossed into its, just started year 12. I never sold the contract. I didn't design the policy originally. It was fine, it was okay. It had a 10 year term rider on it which I wouldn't have done based on the client's age. But we can't go back and change that. I've never spoken to this person. She's been technically my client for probably almost seven years. Send emails, reached out by phone, sent letters, reached out many times. You know, this person doesn't even know the fire is lit. They're so, so far away from the fire. They have no idea that there's even a fire to go to. And you know, but I, I also have the mother as a client and she had some concerns and so she might be a policy owner of, in her own right now has a bunch of policies on grandkids. And then this is the daughter and the daughter has a policy and the policy was started a long time ago. But because ownership was transferred over, I can't communicate to mom about daughter's policy. I'm not allowed to do that. I can only talk to daughter about this policy. So mom says I want to take it over or we should just cancel it. I'm worried she's not going to do anything. I'm like, hey, you can have all these worries. I can't communicate with you about this policy. Eventually was able to get the, the, the daughter on a call and I, you know, I wasn't sure I was going to go. I was concerned. I was, I want to help this lady. But what we have is we have a policy where every dollar of borrowing potential has been borrowed out of it. We're talking about, we're entering year 12 premiums being paid. It's not a large policy. It's like $2,300 a year or something. It's pretty moderate, but there's a, almost a $20,000 outstanding policy loan on this contract. Well, I had this conversation. Would you believe it? It went extremely well. She says, I think I have that book. I'm going to go, I'm going to go get it. Hey, great. Let me send you a letter on how to read it. Let me send you this video. Here's how we're going to do. We're going to talk about loan repayment. We're going to talk about this term rider. You're paying more for it now, but in eight years, it's actually going to go up 1,200%. We should probably deal with that. Turns out we can get you a brand new one with actually more money for a lower price than what you're paying for that rider now. So we would be more efficient to apply for this one, lock it in for 20 years, have more coverage and kill that rider, and you'll be better off without having a, you know, mec or tax consequence. So, like, it ended up being an amazing conversation, totally unexpected. She's completely engaged. She knows there's a fire to go to now. She knows how to get resources. And we were able to create a rough sketch on a repayment plan over five years. She says, yeah, I think I could do about three hundred and three hundred and fifty dollars a month. I could get that repaid. I said, well, would it help you to know that every time you put a dollar back in and a repayment, it's a dollar you can borrow back out again? She's like, that's fantastic. So she knew there was something good in the policy. She knew she had it for a reason. She knew it was set up on purpose. She just didn't have any other information. Now, 10 years later, 11 years later, we're in a position where she's going to get back on track. Now, if you're listening to this, I hope that that is not going to be your story, but maybe you got started. Maybe you had a policy somewhere and you need some extra help. You need something to help you get by. You need some good coaching. Well, you reach out to someone, get connected with someone to get that coaching. Reach out to your existing coach, check in with them. You have to take the action and the initiative as the policy owner. No one can manage your finances other than you. You have the ultimate call. You're in the driver's seat. You got to take the action and the initiative. Well, Mike, this was awesome today. We covered a lot of ground. Final thoughts.
1:09:19
Speaker B: I guess final thoughts would be what we talked about at the very beginning. Don't overthink it, folks. It is brilliant in its simplicity. It is creating a private banking system that you own and you control for yourself, for your family. The insurance company is our hired help. It has to work. It's contractual design. It's the foundation that drives everything else. So, yes, ask questions, but don't get caught up in all the. In all the minutia on it. Stick to the basics and you know it'll work. It does. It has to by design. So we really appreciate it. And yes, like Richard says, get back with with your coach. If you don't have a coach, reach out to one. If you want more information. Yes, reach out. It's worth it. We wouldn't be here doing this if we didn't do it ourselves, believe in ourselves and have our families benefiting from it. So we greatly appreciate the opportunity to continue to educate you and to be be here as hopefully valued resources for you and Richard, thanks. Always a great time. You're. You're just a blessing, brother.
1:10:33
Speaker A: Yeah, I appreciate you, man. For those of you watching, of course, everything Mike said, ditto. And additionally, on top of that, in the idea of being close to the fire, you just demonstrated that you're keeping warm by listening this episode. But, you know, if you want to heat yourself up a little bit more, there's another episode that just popped up on your screen. You should probably watch that one, too. Thanks for being with us today.