The Money Guy Show EXPOSES Infinite Banking - My Response
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- Опубліковано 2 жов 2024
- My rebuttal to The Money Guy Show's "exposing" infinite banking and whole life insurance. @MoneyGuyShow
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I want to thank Brian and Bo for sincerely approaching this often divisive topic! I would love to sit down and have a conversation with you both, on or off camera, and see if we can find common ground!
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They forgot to say 8% is no t likely as average, and they did not count tax and they did not count using the money which stop working for u in the stock cs in loans against ib
This whole video didn't show HOW to do IBC. It just evaluated WL, not what it meant to take out loans and use it to fund opportunities like a 20% yielding rental property and then paying back the loan to deploy it again.
Great point!
Man I would love a conversation between Caleb, Brian, and Bo! I think it would clear up so much confusion about infinite banking and whole life.
I am going to do my best to make this happen!
@@BetterWealth I would love to watch that!
I also appreciate, as you said, for trying to approach this topic sincerely. However, I do have to point out a huge flaw in their analysis. They spent a good bit of time talking about dividend rate vs. IRR (totally valid) and then at the end compared WL (though its not an investment) to the returns in an S&P fund over the last 30 years HERE IS THE KICKER -- Without factoring in any fee to own the S&P index or taxes (either on a Non Qualified Basis or Deferred). Mind blowing to me you can beat up whole life return for as long as they do by talking about the internal costs that negate from the dividend and then turn right around and literally talk about S&P without any internal costs. 🤷♂🤷♂
Super insightful point! Really appreciate you taking the time to watch and write this 🙏
They also leave off the fact that when you're money is in 401k, it is locked up. It is unusable if you are to get their illustrations. So you lose the ability to use your money multiple times to create velocity. How many opportunities could you have for investing over 30yrs if you only had the cash. Big oversight IMO...
You can take out up to a limit i think it's 50k (from 401k)
They are two clueless dumdums, if 401k is prison how IB is worse? Money is accessible earlier... With no limit, and no tax
Great point!
While you can use your 401k I would say overfunded life insurance is way better when it comes to uses and access throughout your life.
Yep! That’s what happens when you run your mouth mouth about things you know nothing about.
Glad you picked up on this.
Caleb, they make it seem like you have to chose either whole life or term when like yourself can have both. I would like to add that I have a $400,000 whole life death policy and $1.9 million in term policy. I used $80,000 (90%) of my cash value and put a down payment on a rental property which I operate my business out of. My approach is if I died tomorrow my $80,000 is now $320,000 (whole life payout- loan) 400% return plus I still have the equity of $80,000 plus in equity. Tax deductions, value appreciation, rising equity value. That’s why they shouldn’t say choose one or the other term or whole. Do both
This is a great point!
Would you be willing to do a video with me sharing your situation? I think it could really help a lot of people!
@@BetterWealth yes I would be interested but not sure how valuable I can be on video lol just kidding . I have had my share of up and downs in my life and I am living proof that life happens over my 56 yrs .
@@bennybiordi193 love it!!
Look forward to getting your email.
I’m interested in watching this video that’s not a video yet too! lol! I am going to be 54 next month and have about $50k-ish to put into a whole life policy and would love to know where to invest or how long to wait before investing.
No mention of the tax implications that will greatly affect the outcome. This was great! Would love to see you educate them on the benefits they missed.
Hoping to do a sit down with them 🙏😊
What they leave out is that Manny, once he realized how his money is growing and being taxed, Will get a life insurance policy to store it.
Very interesting point you’re making. I think the big takeaway is life insurance is not an investment and it seems like everyone treats it as a long term investment where rate of return is the only thing that matters.
They bash how much the premiums are for whole life but here I am going out of my way to put as much money into my whole life policy (specifically PUAs) as possible so I have more money working for me over my lifetime and earning uninterrupted compound interest.
Great video, btw.
I 100% agree. Is hard to talk about this if you’re not in this space. I think it would be really good to chat with them in a long form convo because there’s a lot of pros and cons we could talk about when it comes to overfunded life insurance.
Caleb you are by far the most level headed and reasoned UA-camr on this! I’m personally more of an IUL guy, but I can watch you all day and I really agree with you on 95+% of what you say. You’re so unlike Chris Kirkpatrick who does nothing but bash IUL’s using bad policy designs and over zealous illustrations and agents as his ammunition.
Hey bro, appreciate you watching and commenting. I try to do my best to be fair objective. It resonates with some and others wish I communicated differently. I know many people who love how Chris makes videos and wished I talked differently lol. Believe it or not I get feedback on most of my videos and it’s all over the map lol. I am going to do my best to be as objective as possible and try to help people live as intentional as possible 🙏
@@BetterWealth Again, I really think you and James Barber of Oregon Cash Flow Pro should collaborate and do a video together.
Hey Caleb, do you have a sales course or consulting course that we could buy? I was a license banker for 5 years and I left due to learn about infinite banking I see more value in that than putting your money in a mutual funds. I want to pitch IUL to most my clients but that was a bank main priority and clients are not used to such strategies so I wasn’t doing well in sales. In FYI, most bank advisor aren’t advisor. They’re mutual funds and manage accounts sales man. I since then left the bank and started my own insurance agency. Could you help me build credibility and the process?
Lol wow dumbest move ever. Do you understand the concept fully?
I would love to see more comparisons to a cash emergency fund. I know plenty of folks who carry a ton of cash in checking accounts earning nothing at all. There's no way they are putting that in mutual funds instead. They want the safety.
😂😂😂 representing Whole life with IUL rules and saying it’s bad or the constant comparison to an investment vehicle like 401k says you do not know enough to keep talking.
LIFE INSURANCE IS NOT AN INVESTMENT!
Nobody discusses what will you do to cover health care cost and disability issues later in life like we just go from young to old without ailments making the journey tougher than what you planned
Yeah I can't stand when people call these products investments smh. It's life insurance
Only 15 minutes in but I love how you're breaking down and explaining all of the points they are missing!
Appreciate this so much! Pumped to grow both of the channels 🤟
Infinite banking is a bs concept that agenta push. It's nothing smart about it
So when Manny the Mutant turns 66, and his 30 year term policy expires, what does he do? SInce he's "self-insured", he needs to lock away $1 MM from the $1.2 MM accumulation to make sure it's still there in the event of an emergency. That leaves just $200,000 he can safely and securely use to seek out opportunities. With the WL IBC policy, he'd have close the same amount of death benefit while retaining over $500,000 in liquid capital. Sounds like the IBC policy leaves Manny the Mutant in a much better position than that fantasy 8% annualized return.
The rate of return in the market if using buy term invest the rest strategy as suggested in comparison doesnt account for the taxes that will be paid when it is accessed in the future, at future tax rates.
yes, would be nice a discussion, all these "haters" all hate insurance, but never able to confront an insurance guy. would love to see a discussion with these financial guys and a life insurance guy who knows "infinite banking" person. then can what they really think about it. rrsps (401k), they dont' talk about fees/taxes either. may look like 1.5mill on paper, but do you have access to the full amount?? and once you pass away, how much taxes will go to the beneficieries and to the irs/cra?
I couldn’t agree more. I am hoping to get a long form convo with them. I think it would be awesome for both sides to hear the points on both sides. I think you would see that we actually agree on most points!
Have you ever shown your policies that you have in the whole life and how they are performing? Because I do not think this guy wanted to show the best side or a fair side of infinite bank
Hey Caleb, in the comparison, I don’t think they ever addressed the impact of what taxes are going to have on that 1million plus dollars in their investment account. Aren’t they going to lose a significant portion of that million dollars to taxes? I wonder what the tax implications will be over time during the distribution phase when the portfolio is being taxed and the death benefit is not being taxed. Also, isn’t life insurance more about protecting your family and leaving them better off after you’re gone?
You make really good points! The answer is yes, there is many more points to look at when it comes to someone’s financial life.
All these exposers ever do is bash the vehicle. they never actually talk about the concept of taking back the banking function in your life.
Yes they miss the whole point. Bank uses our money to lend others, and when we borrow our own money, they earn from us and does get returned to us. Whereas the interest from the loan we took from the WL gets returned to us by means of an increase overpay ( if that's what they want to call it ).
@@Tidmouth-Sheds Yep, they NEVER get to the point. Words matter, and they way they are trying to explain just isn't so. People who practice the IBC know more about WL than most insurance agents who sell it.
Very good "response" video. Very fair on both sides, but you can still see the bias on their side. This didn't really even touch IBC, it was more of a Whole Life explanation.
Pointers:
Can't stress enough about "Risk".
Can't guarantee 8% S&P returns (so misleading when they all do average. That's when people get wiped out like in 2008.).
Valid point about something being complicated to explain (but that's why we're here, so we can learn).
Really need to compare if someone borrows from policy in order to "invest" it in something a little more risky to get the 8% for example.
Need to actually show examples of IBC. Like purchasing something like a car & how paying back the loan actually lowers that loan interest rate.
Didn't really talk about how you can use the death benefit if you're terminally ill. This is huge.
Need to stress that WL will last your whole life whereas term ends. This example went to 65years old but when that guy hits 65, that's when he needs life insurance more.
Should show illistration of 70 year old with WL vs the other guy who ended his Term at 65, lol.
Really appreciate you taking the time to write this all out!
All very good points!
Listen to the tone of these guys.
Their tone should tell you they are spouting about something haven’t actually researched
Don’t rely on these guys, Do your own research.
Everything has its own strengths and weaknesses.
Make sure the vehicle you choose is going to properly serve you.
These jokers are barely old enough to have a drivers license.
They are using this platform to feel confident important.
Maybe when they are old enough to shave someone will feel some confidence in their “Opinions”.
Seriously, getting hung up on catch phrase instead of doing some real research is making them look foolish.
its sad that The money guy knows too much but not enough..😞. STOPY SAYING INVESTING. ITS A SAVING METHOD!!
Thanks for the fascinating discussion; my head is spinning. I was looking into whole life insurance as a "bucket" for retirement and you mention repeatedly that one should be borrowing against a whole life insurance policy to invest in other high yield investments. But what is your take on borrowing against a whole life policy just to live on as part of retirement income?
1.2 million will be taxed so you won’t have 1.2 million probably have 650k with no life insurance and you could also lose it through law suit. This is the problem with! 401k is really a 201k
I had participating whole life, my insurance ppl would charge me for borrowing, when I pulled out my money the government. Charged me 50% on my profit?? Did not work.
I don’t believe that no one is asking the question what did that 3.62% IRR do for your assets accumulation strategy. The products performance isn’t the main benefit here. 🙄
Would love to see a podcast with everyone together. To lay it out ALL ON THE TABLE. Then people can have both sides and make their own decisions. Make it happen! Thank you!!
Working to make this happen!
You don’t think or talk about the tax advantages of insurance and IBC
I could be wrong but I thought that a retirement account is to be used for retirement? This is why we need short term, mid-term, and long-term savings vehicles.
I agree, they missed the investment strategy to increase your wealth through purchasing realestate. They also left off the tax ramifications when you have to cash out the 401k. And you still don't have any Life insurance to pass on. So that's a loss. Lastly, they assume the markets will appreciate forever. Not exactly a fair comparison. But they are not experts on Whole Life w paid up additions, so that could be expected. Hopefully they will investigate further in the future
401k can be Roth, so no taxes on withdrawal. Cash outflows for both people were after tax.
I am totally tempted to poke holes in their analysis except for the fact that I'm not allowed to in the comment section
I do like these guys because they're not super judgemental, but they do suffer from the fact of not being insurance guys. Just like a lot of insurance agents suffer from not being skilled in finance
So one question I have is, why do you suggest not getting into one of these assets if you're not in it for at least $10k annually? Maybe I've glazed over this fact in your previous videos 😅
What about the years in a mutual fund type investment that you’re down 30%? What about taxes every year, especially when up?
I love this a lot! How you set up your videos. This is what we need… during the crypto run, realestate and stock run up…. All the gurus on UA-cam were never challenged. I think this is a great trend and I see one other guy doing this, he goes through a lot of the realestate gurus and challenges their ideals ❤
Hey although Infinite Banking isnt about the ROI. Somebody has got to say it. It is impossible to state what the average ina person's portfolio will actually get in the market because you'd have to predict too much.
1) You'd have to reinvest all dividends and never have bonds or anything like that.
2) Average return is so much further away from Actual Average which is the IRR of the market.
3) It is possible to average 75% in the market and still only break even.
Ex Manny the Mutant has 100k the market drops by 50% now he has 50k if the return in the following year was 100% he will then go back to 100k. The average return in those two years is 75%.
So in essence the 3.62% is an actual IRR. 8% is not the IRR of the market and especially isnt on the end user once taxes hit it.
You’re not wrong, but I mean the only way you can reliably expect the “average” return is if you keep the money invested for long periods of time. Anyone planning to put their money in an index for only a couple of years would have better luck keeping their money in a high yield savings account instead.
@@TheParkingLotGarage Actually the truth is that's why using whole life the right way is so instrumental. One strategy I use is I'll design the policy and then my CFP will write a Structured Note which are extremely low risk but 8.25% return in 6 months to a year is very likely. The Whole Life allows you to have money sitting on the sidelines when the market tanks so you can take advantage of the growth and get right back out a year later. Then we rinse and repeat. Traditional accounts lock up money far more than structural notes. The only reason why it seems you have to invested a long time is because of dollar cost averaging. The truth is if a client dropped 100K at 24 in lump sum in an fixed-indexed post tax annuity without loss they will have more money than a client who contributed 400K throughout their career with dollar cost averaging and the ebbs and flow of all the market because the averages will be Actual and a large amount of money that never went backwards.
The reason being because of Human behavior and traditional advice. It is near impossible to get the average of the S&P long-term because traditional advice doesn't even advise you to do that. For instance, when young invest in full risk, in the middle of your career mix the accounts to protect the principle a little then when you get old take out of risk. All of these actions will effect averages. For instance let's say you lost early in life what advisors say is you'll have time to catch up but wouldn't that be harder if the older I get the more conservative I should be?
Check out Fidelity's report on their average accounts during our last bull market it'll shock you because it's showing short term it's not even that great because of lost.
newsroom.fidelity.com/pressreleases/fidelity--q3-2023-retirement-analysis--workers-commit-to-the-long-term-while-navigating-uncertain-ma/s/d5824701-cdfa-4cd2-8796-602b7b1dc541?fbclid=IwAR0ccmWObgRK1HzCSsLAJVBCkdQ6Lzn4YX69J7vWC8tfUKV9nRcphwLRktA
In life insurance why do I have to pay interest when I’m accessing my own money
They lied about the consumer report on whole life return. The 1.5% is strictly based on guaranteed rate, the article says with dividends it's 3.5% and that's probably ignoring the impact from near zero interest rate environment as well as tax advantage.
I don’t think they intentionally lied. I think all this stuff is easy to miss especially if you’re not in it all the time.
I appreciate you watching and commenting!
Plus you have to qualify nedically and the older you are and any medical issues it seems to be very expensive. The reason I went with an annuity.
Would be nice to see updated info on what annuities are. There are so many conflicting views out there.
@@sotoa1 sound like we need to make a video on this 😊
You make great points. I think I will make a video on this something soon
Another issue is watching hours upon hours of being your own bank but they never reveal what the insurance companies are to get started. This dontmake sence to me. Another thing is what happens when we are forced into a cashless system? Plus you still need a bank account to use your money. To me having to depend on a bank is not being my own bank. I see no one talking about this.
Yeah, you should do another video about self-insured! They don’t understand that you can have the 401(k) and you can also have your life insurance!
If you can do it you understand it. If you can teach it you have mastered it.
Great breakdown
Thanks brother!
One of the things I didn’t like about their “how infinite banking works” slide is the old explanation that “some of your money goes into death benefit, some of it goes into cash value”. It’s just not correct, and sets up the whole idea that the “insurance company keeps your cash value”.
Your premium buys death benefit with whole life - full stop. Your policy actuarially derives a cash value based on the policy design, age of policy holder, etc. There is no “cash value account” like there is with Universal Life. It seems like nitpicking, but I think it’s an extremely important distinction if one is going to actually understand how the policies work.
Would you be willing to come on and do a video with me about this subject and topic?
If your open to chatting about this, please email me Caleb@betterwealth.com
@@BetterWealth Caleb - I’m not a professional agent or financial advisor, just a consumer. Not sure I’d be a great “expert” for you. I just fully research and learn about everything I put a lot of capital into. I know enough to be dangerous (and in this case, probably more than the Money Guys).
@@cscorona1 I think talking to non experts about this would be awesome!
@@BetterWealth email sent
I’m 95k in on my PAC Life IUL I’ve had for 5 years and my cash value is 63k. Don’t think I can do this much longer. I know if I cut the cord I’m losing a boat load of cash but I don’t want to lose a boat load more in hope this turns around. I’m in a real pickle with this. Any thoughts?
You mean I’m sending the money I had already to pay into the policy for cash. So I could buy a term policy for a fraction and invest the rest myself. Do I trust the moneys guys more than I do Caleb of course they have been doing this longer in terms of building wealth and I’m sure if infinite banking was all that people want you to think it is they would know about it.
You need to be invited to their show and give a different point of view.
I would love to figure out how to make that happen!
Just write to them@@BetterWealth
Can you elaborate on how the avg. person could receive a return of 1% if the policy has guarantee returns and dividend? What could be impacting their return percentage?
Bad advice
I found this video super helpful. Still something I’m really working through. But it’s been really helpful to hear you reiterate how life insurance is not an investment. It provides a place to leverage your money.
I really appreciate your balanced perspective even encouraging people to not do it if they don’t get it. Wise advice.
I’m happy this has been helpful for you!
Real Estate investors and Business owners love Whole life, why? Control, leverage, liquidity, and tax-exempt income. It's the only product that will do what you want when you want, and how you want it. Most R.E. Investors pull cash out of one of their properties to get another one, If they are doing flips and a rehab they don't want to make payments until they sell the property that isn't possible with a bank loan but it is possible with WL When you're an R.E investor or a business owner your writing off income as much as possible which makes getting a loan a pain in the ass, not so with WL. Sometimes it makes more sense to borrow from the lender. Always keep in mind you have the internal rate of return but there is also the external rate of return that R.E. investors look at.
@AirCity4Life The death benefit is tax-exempt. Correct all loans are tax-free but all loans aren't guaranteed to be given.
Appreciate the insight and footnotes. I've seen many of these choreographed "exposes" that don't compare oranges to guacamole or not telling the WHOLE story and need other creators to fill the gaps they intentionally leave off to tell the narrative. Some good nuggets in there, but i cant help but wonder what kind of video would come out of a great conversation between the three of you!
Good stuff!
I agree and appreciate your insight here!
Ty
Alcatraz vs arbitrage...
Appreciate the comment. Can you share a little more context to you comment. Not sure I am fully tracking.
@@BetterWealth they were talking about alcatraz, but I think they meant to say arbitrage.
Oh, got it 👍
Another excellent debunk. Humble wisdom.
Thanks for watching!
The only people defending infinite banking are the people who sell it
I appreciate your perspective.
Looking forward to the next video! ❤️
TY.
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