Infinite Banking on steroids is better. That is to say, an Indexed Universal Life insurance policy collateralized for a business line of credit from M&M Bank at 3.65% APR and quarterly interest-only. The cash value is compounding with no life insurance loans outstanding so the IUL cannot lapse. The interest paid out of pocket is a tax write-off and the line of credit grows with the cash value growth similar to a reverse mortgage line of credit. Also, the line of credit does not report to your personal credit which means you can use the line of credit as proof of funds and the cash value as proof of collateral when asking for credit limit increases on unsecured cards or applying for a mortgage. Merchants and Manufacturers bank works with Ameritas, Lafayette, Prudential, Penn Mutual, and Northwestern Mutual.
Real Life Scenario (Me) using Infinite Banking Concept. My WholeLife insurance cash value was about 50k 3 years in. During covid crash, stocks dropped about 50%. I would have lost 25k right there but my life insurance cash value was untouched. Instead, I took that 50k out (at 5% int), dropped it into stocks. And sold a year later at 90k. Made 40k(80%) to use to pay back loan+5%int. And dropped the rest in as OPP just right below MEC limit. When my cash value hit 100k. I took 100k out to do stocks again. Started in 4/21 and sold all stocks 2/22 for a 30k loss. Yeah Paypal, BLOCK, etc dropped hard this past year. If I left that 100k in my life insurance account, I wouldn't have lost 30k lol. Anyways, I have positive vibes about IBC as long as your using it right. I also used over 10k to pay off CC debt (15%+ vs 5% is a big deal). Any debt under 5% I wont use my life insurance on. Things I wish I knew beforehand. Dividends dont pay out the first year. Dividends % seem to be calculated based on cash value of anniversary date of the year prior. PS. I don't think this concept works well for those who can't put in 1000 per month in premium. Yes stocks over the long term can double, triple, quadruple your investment, but have you seen your entire portfolio drop 50% before? What if you needed that money due to a business opportunity or financial crisis and can't wait til your portfolio recovers?
3 seconds into the video I hear "in a vacuum" and I think I probably don't need to listen to the rest of the video because when someone explain this subject to me, I thought that sounds good in a vacuum... and I feel like I got that confirmation 3 seconds in.
Your comparison is fundamentally flawed. The stock portfolio is taxed when liquidated. You are also taxed on the growth. If you want to say it’s an ira that’s tax deferred, you left out the penalty for withdrawal. You also blew right past the fact that if you buy it on a policy loan you end up with the cash again plus the asset at the end of the repayment. Not to mention the CAGR of the stock market since it started is far less than the annual rates of return thrown around in this video. This video also only accounts for taking a loan for the full amount of the cash value in the policy. Taking a 30k loan at 6% on a policy that is being paid say 5% on 200k youarestill accruing positive cash flow on the policy even with the loan out
I’m down with Jeremy. I wouldn’t take a policy loan if I was offered 1.24% interest rate at a bank. lf the stock portfolio performed as well as he claims (it won’t), just take the bank loan for the car at 1.24% and use your policy to buy those awesome stocks.
The "feather-ruffling" that you might have received would be due in large part to your misunderstanding of IBC and "Becoming Your Own Banker." IBC policyowners are not trying to "beat" the interest rate that the insurance company lends to us at. We own policies with mutual life insurance companies. That means we are part owners of the insurance company ourselves. Any interest we pay to the insurance company adds to the profitability of the insurance company, and is returned to us indirectly through the annual dividend. You know, the dividends that universal life insurance doesn't even pay. And I get it -- the dividends are not guaranteed. But they have been paid by several mutual life companies in the U.S. (and a few in Canada) every single year for over a century, regardless of economic crises and wars. And when used to purchase more death benefit within the policy, those dividends cause a compounding growth of the cash surrender value over time. The "extra interest" paid to the car in BYOB, by the way, isn't to pay the policy loan off faster. What Nelson meant was that you should pay more than what you would have paid to a bank and that extra "interest" becomes premium in the form of a PUA payment, thus adding to cash value growth, future death benefit, and future dividend payments. Yes, you can borrow from a bank at a lower rate, but you sacrifice flexibility and privacy to do so. You also sacrifice the interest which is going to an entity that you are not an owner of at all, rather than being a part owner of the insurance company and recapturing that interest in the form of dividends. IBC also discourages using your policy as collateral for a bank loan. The whole point is to utilize policy loans. But you're so focused on the interest rate that you don't consider all the intangible benefits of using the policy loans as intended. There are some benefits that can't be measured in numbers. You also used a whole life policy example where the policyholder just stops paying PUA after year 9. Why? Why would I want to give up the ability to pay additional premium, grow even more cash value, buy even more death benefit, and entitle myself to a greater share of future dividends every year for the rest of my life? In any case, you aren't looking long-range enough. That cash value growth will grow faster and faster over time. It has to because it is a function of the death benefit, and as one gets older, that cash value has to, at some point, equal the death benefit (either at the death of the insured or at the end of age 120 when the policy endows). But you only look ten years into the future. Is the "account value" of an IUL a function of the death benefit? No, it just grows randomly according to some index (if it grows at all). No guarantees there. I thought this was insurance, where risk is transferred to the insurance company? This sure seems like the opposite of that. Your Monte Carlo simulation used criteria that you chose. You could have chosen a lower average return or a higher one. The point is that you do not know the future, so whatever numbers you use, they're just random. The most that someone could lose in your simulation was under 2%. You even say explicitly about your Monte Carlo simulation - "it's generating these returns for me based on the risk profile that I give it". You could make it show anything you wanted it to. Do you not see how that is a major flaw in your calculations? Oh, and you completely ignored taxes. No, whole life is not "difficult" at all. By contrast, IULs are insanely complicated and suffer from major flaws. I'm not an insurance agent, but don't IULs have an annually-renewing, one year term insurance rider? And can't the cost of that rider go up at some point? What if you have a health problem that drastically drives up the cost of the term rider, or even makes you uninsurable? That is something you never seem to mention or take any account of in your illustration. And once again, the insurance company is transferring risk back to the policyholder. Also, you basically used all the non-guaranteed values for both the whole life and the indexed policy and you should already know that illustrations are not accurate the moment that you print them out. They make assumptions about future dividend rates that are nearly guaranteed to be wrong. At no point did you compare apples to apples. You just assumed the market would yield returns within the artificial bounds that you set. And you used a single whole life illustration from a single company (one that many IBC practitioners object to, by the way) with a weird design to boot. This video didn't prove anything except that you should probably read Nelson's book a few times. It's only 92 pages. The text is large and there are multiple illustrations that take up a lot of space. It's a fast read. Take a night off and try giving it an honest read through. And did you honestly claim that IULs have a "slightly" higher risk profile than whole life? Are you joking? "I know there's going to be tons of haters in the comments. And I know, by and large, the haters in the comments have no idea what they're talking about." Rather than being so arrogant, maybe you should do some more research on IBC first instead of using UA-cam's keyword suggestions to base your conclusions about IBC on. You know, actually approach IBC practitioners honestly and start a discussion instead of pretending that IBC is just a "sales strategy", which it never was, and which you'd know if you'd read BYOB.
Your rebutal is right on. This guy’s ranting is missing the point. It’s obvious that while he is concentrating on the trees, he has missed the forest. Unfortunate. He is leading his viewers astray. Whole life, properly design for maximum cash value grows with a GUARANTEED interest rate that compounds, plus yearly dividends. There are many more benefits that this man failed to understand or ignored. I hope his viewers would do more research than to listen to a seemingly “reasonable” analysis that is full of flaws.
Thanks for your comment, while incomplete and inaccurate, we welcome the feedback and commentary anyway as it helps educate in general. The main point of this video isn't IUL vs WL at all. The forest that you are missing is simply that SO MANY people get led astray by this concept. We see it everyday. Most of our videos are responses to TERRIBLY designed policies and/or pure lies by bad agents.
@@CashValueLifeInsuranceReviews "...while incomplete and inaccurate", he says, without providing any examples whatsoever. Obviously you just didn't like the smackdown but are too ashamed to admit when you're wrong. I was only responding to this video, where you were attacking IBC itself, not "TERRIBLY designed policies and/or pure lies by bad agents". I don't care about your other videos, because they have nothing to do with your demonstrated lack of understanding of IBC in THIS video. I suggest you read and re-read BYOB and then film another video once you actually get a clue, instead of straw-manning my argument because it hurt your fee-fees.
Great video, gives very good perspective on this issue. Two questions: 1) if you want to use IBC for investing in real estate or a franchise, Typically the rates are not going to be as low but would the rates be lower with IBC than with an average bank for a commercial loan? 2) How would the numbers would stack up if you pair the IBC with Real estate investing for example?
Thoroughly enjoyed the video, a fair detail between the two. I have been trying to tell people on a few channels that infinite banking in WL isn't a great option. For some reason the words 'infinite banking' seems to make people feel like they should defend it. My points are very simply, If anyone walks into their financial location and deposits $200,000, they should be able to borrow against it. Ask an agent what they make on selling that WL policy that will be used for infinite banking, and if the client pays that commission through fees ? Thank you for being real about infinite banking. It's a marketing idea that isn't in many peoples financial future. I'm partially thinking that even wealthy people that could purchase it probably don't, as there are other ways to accomplish similar goals. Hoping many people watch this.
You have no idea what you're talking about, which is not surprising. Whenever someone complains about commissions, what they're really saying is that they want the insurance agent to do work for free. Do you work for free? Just because the pay structure for an insurance agent is different doesn't mean it's "evil". Hell, the insurance company doesn't even have to pay a commission to an agent that doesn't make any sales. You can't really say that for W2 employees, who get hourly wages regardless of how productive they are. Your point about depositing money into a financial institution makes no sense. Yes, in the early years of the policy, you lose some liquidity. So what? You're buying a death benefit, and you will recoup that cash value over time. If you think long-range enough, then this is a non-issue. If you need to spend all your money right after depositing it in a bank, then maybe you have other financial problems that you need to do with first, like basic money management issues. Meanwhile, I'll buy whole life and not only buy a permanent death benefit, but also be entitled to a guaranteed growth of cash value and non-guaranteed but highly anticipated annual dividends every year for the rest of my life. Oh, and you'd be surprised how much money is tied up in whole life insurance among the wealthy. You should probably look that up. You might end up being surprised.
Infinite banking is a long term strategy. If you are going to fund with 200,000k to turn around and pull 200,000k its not going to work. My kids have infinite banking policies ($100,000 VULs) that have been in force for over 8 years and they will be primed for infinite banking for their whole adult lives.
@@hanselbermudez7604 thank you. Investing is a buy and hold strategy. Even an insurance policy. People seem to think that infinite banking is an answer. Accepting low rates of return so you can make better return elsewhere. ? How does that make any sense. ? Better to go for better return the whole time. Depositing 200,000 into a bank or credit unions investments and borrowing against it, say at 85% is the same as infinite banking. Hopefully you are depositing extra into the policies, as minimums make minimum returns.
Thank you for this video. Definitely something to consider! However, a few notes.. -WL has a lot of tax advantages that weren't discussed. - who is getting 1.24 interest rates? I'm lucky if I get a 6.. currently sitting on an 8.2 for a car. - do you see any value in having the option between your WL and the bank? I will absolutely take the IUL into consideration.. I'm young and risk averages better in time.
Yes, lots of benefits to Whole Life, this video is not about that. I have lots of videos on Whole Life, feel free to watch those and let me know what you think! I'd be happy to chat: leveragedwm.com/contact-ii/
@@brianstephens3162 He glossed over a lot of details about both whole life and IULs and only focused on "beating" the policy loan interest rate while simultaneously pulling numbers out of his ass to make IULs and stock market investing look like guaranteed returns.
@@brianstephens3162 it's a very big deal, particularly when you near retirement age. You simply can't do an "apples to apples" comparison as he did in this video without considering all the other benefits the IBC (in it's purest form) strategy provides.
Some will argue that excessive loans might “cannibalize” the IUL policy down the road. Overloan protection riders and proper policy management should easily avoid that situation.
@@CashValueLifeInsuranceReviews You don't have to take any withdrawals from a whole life policy. You can live off the dividends of sufficiently large policies if you're looking for retirement income. Or take loans and let the death benefit pay them off. No need to withdraw up to the cost basis. Meanwhile, you HOPE that your withdrawals from a 401k won't eat up your entire account before you die.
This is great bur most people are not getting 1.24% on average auto loans traditionally higher and stock portfolios withdrawals are subject to capital gains tax not to mention net losses by the average investor
Way to many flaws in this video. First, where do you find a 1.4% loan? Second, with stock market investing your not guranteed gains. If your lucky enough to earn gains you have to claim taxes on it if your income is over $40k year. WLI is tax exempt, which you don't even get into. Third, bank will want collateral where as WLI is secured with the payments you already made. You don't loose possessions with WLI. They just keep your plan when you die and it's not reported to credit bureaus if you don't make payments.
Great video. I have question on this as the only benefit I see is if you are a Realestate investor you can borrow money without having to go to a bank, but I think there is something wrong there as well but I don’t understand it! If I have a $2 million policy and I’m in year 5 and I want to borrow $700,000 to buy property. Would they give it to me? Or do I have to have enough equity(paid at least $700k) to be able to borrow that much?
You compared the cash value growth rate of a whole life policy to the market?? That’s not an accurate comparison. Next you mentioned the loan rate from a bank can be lower which it can but you failed to mentioned the ease and flexibility of a policy loan. Be your own bank isn’t a scam, it’s just math. By not withdrawing the money and instead taking a loan, it allows the cash value to continue to grow. It’s not a replacement for market money. It IS however a great replacement for a savings account earning next to nothing.
I understand what you are saying, my commit would the average car buyer isn't getting a car financed at 1.24 interest rate. Currently it is around 4 to 5 for a new car, and 8 to 9 for used. But this is generalize for people who have good credit. If you less than stellar credit you looking at 5-8 new, and 8-14 used. And that can also based on the term of financing that good rate would using be on 36 to 48, and increase incrementally the longer you fiance. And example would be I qualify for that $50,000 car but to have a reasonable payment. I stretch the financing to 72 or 84 now I'm setting at an higher interest rate to get to the longer term. You probably understand this better than me. But when my interest rate for a 50k car is 6, and example policy is 6 percent is it still better to borough from the bank?
I would like to know what banks have 1.24%, we're about 5-6% in NY. And if the bank rate is higher where I am, does that mean my WL % is higher as well - because of my location?
Thank you for the video. Great, but is the real purpose behind using this for asset protection reasons like is the policy divorce proceeding proof or something like that?
You debated your point with a very narrow viewpoint and questionable assumptions. You never mentioned the tax aspect of the market when you pull funds, no one can repo your car if you hit hard financial times (going to cost you additional interest though), glossed completely over uninterrupted compound interest for the rest of the insured's natural life and assumed everyone is willing to take moderate risk in the stock market. With sequence of returns, when you cash out of the stock market, you have to pay taxes plus that withdrawn money is no longer working for you.
I think that you well handled the personal loan elements of the IBC. While the 1.24% interest rate is currently a thing of the past, I get your point. But, I am still confused about two elements I didn't hear about from you: Can you speak to the death benefits of the life insurance policy? And, can you speak to the tax benefits of whole life vs a brokerage account (or, perhaps, an IRA)? Thank you.
While a great video, there are a few assumptions I don't think are taken into consideration. The idea of IBC is to have your money compounding for the rest of your life, regardless of market risk, no? I personally like IUL more, but WL is fine in some cases. You don't borrow from the policy, but rather against the policy. Yes, you pay interest to the insurance company and not to yourself. So, use policy loans if that makes sense vs use bank loans when those make sense. Right now, policy loans are less than bank loans. A year ago, bank loans had a much lower interest rate. Use the math that makes more sense. The last thing I think that was not accounted for is the purpose of the insurance policy. I've any people say life insurance is not an investment, and for good reason. Investments have much higher IRR, but have other downsides. Often times there's risk and volatility, and if in a qualified plan or in real estate, it's not liquid when you need it. Granted, WL is not a great accumulation vehicle. IUL is better but the market will often be better (but you expose yourself to more risk) from a rate of return standpoint. It will, however, allow you to compound your money for your whole life, provide an additional death benefit, and also allow you to use the money in other ways to potentially create an additional return. And then all the growth and compounding can be accessed tax free, which market investments cannot!!
Wow, been along time since I've seen a video this dishonest and misleading. The benefit of using Whole Life for, let's say a car, is the arbitrage between earning compound intrest vs repaying a simple interest policy loan. As opposed to an amortized fixed amount car loan. You can have a "lower rate" on a bank car loan, and still end up paying more because it's amortized. A Whole Life loan is simple intrest. That's a HUGE difference. Next you're comparing the safety of a Whole Life policy, which should really be compared to a savings account, to a freaking equity portfolio! Whole Life isn't an investment. It's that guaranteed bed rock of liquidity that you can ALWAYS rely on. How would your equity portfolio recover when your pulling funds out during a -20% time.....like right now. Having nothing but equities forces you to sell during down markets. Which is the opposite of what you need to do. Having your savings in Whole Life provides you a significant amount of flexibility. It's not an investment, and should never be compared to one. It's just a savings tool that acts as the middle man prior to moving funds into actual investments.
Another great video from my UA-cam Yoda! I have learned and continue to learn from you with each video. Keep sharing and fighting the good fight Mr. Decker
I appreciate your videos. Even though I’m a LH&A agent, my specialty is Medicare, so I’m far from the expert or even proficient at these products. But, I am having more clients ask me about these types of products and wondering how viable they are. The one question I have is--In the comparison of WL vs. IUL is one better than another when it comes to the potential of withdrawing and paying taxes? Thanks!
You've made some valid points but like the infinite banking sales Pitches your data is also skewed. Velocity is good but one should always go with the lowest rates available. Yes 1.x% 0% for X years is the best. But why not run a Montecarlo simulation on the IUL policy? Is you market stock investment an indexed mutual fund or a managed mutual fund? The fees can be very different. The same for both policies depending on how they are set up. But that is another can of worms. Also you left out the tax implications once you try to withdraw the stock market funds.
Note. I like both whole life and IULs. I also use vanguard to invest in the vfiax and vtsax. I do not use a 401k, IRA, Roth, or SEP. I also enjoy your channel. I just wanted to point out something I felt would make it more balanced.
Yes, that was one question I had. Don't you get whacked pretty good with taxes with the mutual fund option? Also, isn't the return for the stock market closer to 7%?
Seems like you are American. Can you do one why banks in the US buy billions of dollars of whole life using this strategy. There is no question that stocks will beat whole life in this strategy because you are comparing a savings vehicle vs an investment that is common sense. Couple items I wish you would have mentioned was the cost of term insurance this client would have had to pay during this time, the whole life death benefit that has been created during the timeline and what management fees investments choice you are using as most people don't go all in stock so 100% stocks? How is an advisor allowed to sell someone 100% stocks when 99% of people's risk profiles come in at balanced which also cuts the returns down significantly using a lower risk mix. Would have been nice to see balanced portfolio and adding in an MER and cost of buying term insurance and the cost of the death benefit vanishing from the client's life after 10 or 20 years and not to mention taxes if the stocks portfolio is in a taxable account can be another big erosion factor. On the flip side, the vast majority of people do not like risk and to say save for a car using stocks and then during that time dealing with a major correction and need that money at that point, in real life the vast majority of people don't want this and most have no real understanding of how investing works anyway so will make bad decisions on emotion all the time,. There is a big difference from jotting down numbers on a piece of paper or in a video to what happens in real life. Overall good video thanks for doing this
Hi Matt, love the content. Two questions: 1) You show the non-guaranteed values in the insurance policies. Wouldn't the better "apples-to-apples" worst case scenarios compared to the stock market worst case after 5000 monte carlos be the guaranteed insurance values? That would support your argument even more I'd think. 2) Depending on the insurance company, can't you get an interest rate that is essentially a wash-loan rather than 4-7% as you state in your video?
I sure could! Good idea. Tough to represent the non guaranteed values as apples to apples though. The guarantees in IUL would assume the market is negative every single year.
That’s a hell of an auto loan rate. Just did a simple search, average credit score in America. 716. Average car loan for a 716 credit score is about a 3.74%. I feel like you’re not being objective at all in this scenario. You’re skewing the numbers to make it look better. You’re also not taking into consideration the variable loan rates on cars in the future. They are low in today interest environments, however we are seeing the rates increase as of today at an astronomical rate. Mortgage rates are already back up to 6.5%. You’ve always not included the tax preferential treatment or potential increase of taxes in the future as well. So many moving parts and uncertainty…..
That's what I was wondering. Also, other stock market returns that high? I thought they were around 7% averaged, but that is just off the top of my head.
that APR is for someone with great credit what about the people that have a high rate? which would be better? for example I sit at 695 credit APR is 5.6. so I guess it would be what is the actual interest rate and the principal or that would pay car off or grow in insurance. Is that correct?
MATT- YOU are comparing a highly RISK Based Investment = STOCKS, versus NO RISK except the guaranteed interest of 3% + Dividends or profits from the Insurance company that today is yielding 5-6%. ALSO, your OTHER Alternative needs to have a Cost Of Insurance from something to include a Term to age 90 perhaps. Finally, you have NO INCOME TAX Considerations on your Stock returns being reduced by annual taxes on Dividends and Cap. Gains that come out. YOu are WAY OFF on your comparisons for NET GAINS. Finally, you are not considering the Line of Credit a good Mutual Company is offering with collateral to ADDITIONALLY invest and recapture 10 to 20% Yield or more from Real Estate of Simply being a Private Lender for 15% into your Tax-Sheltered BANK. Watch your Video there are MANY HOLES and things you LEFT OUT- perhaps you are ignorant to some of these things- I can understand. Now wrap all these together and compare to your High-RISK Stock Market Investment reduced by at least 25% Cap. Gains and the 5% most states tack onto. I am trying to get you more FUlly Informed into the Private INSBANK. This is NO Real Comparison Matt with investing in stocks that might take away 20 to 40% pullbacks then wait 5 Years like I have done to simply catch back up to where I was 5 years earlier before I began growing again.
This is a terrible video. The infinite banking concept is not an either or. Why not take a loan on the cash value of 4% and leverage that money and put it in the stock market. Infinite banking concept is showing you that your policy cash is still growing at 4%. You don’t have to use the money to buy a car. That a policy loan and buy the stock market if that’s what you want to do. Infinite banking concept is replacing the banking Function not replacing investing. Educate yourself.
In my situation infinite bank ing would work for me bc I have never gotten a loan for less than 10% and currently I’m paying 21% on my car loan right now. So in my situation where my credit is horrible I think infinite banking would work in my situation. Can you do an illustration on people with bad credit and I can only afford $200 in an IUL or wL which I still don’t understand after 100 hours of watching videos which life policy works for me. It sounds like these life insurance policies are only for rich people? But how can someone who wants a better life 10 years from now even get started? Am I just screwed in my lifetime? Bc that’s what I’m understanding.
This doesn’t compare apples to apples. You’re forgetting this is a life insurance policy with a death payout of $1 million dollars as opposed to just sitting your money in a mutual fund with 7-10% interest per year.
And it doesn’t take into account tax benefits and how the profits on a stocks is highly taxed for many. On top of that, don’t use the standard deviation. Should what it’d look like 2007-2011 or what 2021 through 2024 will look like with the market losing 20% in the first 6 months of 2021 alone. Timing the market includes trying to time your exit as much as trying to time your entrance. He’s cherry picking market returns.
The illustration is the incorrect interpretation and structure of how IBC is used for high cash value. Anyone who teach IBC this way without undergoing IBC certification will get people confused. I was one of the confused and believed on people who are not a practitioner. Until I took one from a practitioner to try out. I have the policy for 4 years now, boy I was glad I took a leap of faith to understand the real IBC. I have far more gain when interest and tax are going back to me. Versus other investments I have been doing for the past 18 years. Why not get one first from an IBC practitioner then compare at what you are teaching. Nothing personal, I just lost time because I did not start IBC long time ago.
The interest doesn’t go back to you…unless you mean to say you are paying the loan back plus extra interest from out of pocket. In that case, doing the same thing in other vehicles nets a better outcome.
Most IBC purists believe you should only use policy loans, but if you can get a better interest rate by using your policy as collateral (some banks give you a line of credit), why not do that? It seems IBC was designed for the 80s and early 90s (see the interest rates used in Nelson Nash's book illustrations). Following that model to the "T" with no flexibility or adjustments to changes in the financial/economic world doesn't make sense to me.
His entire presentation is shot as soon as he said he went to the bank and found out what interest rates are for car loans. 1. 24% . LOL! change this 1.24 number to 4.44%.... Rediculous~
Wow you should be sued for how deceptive this video is. First you use and whole life policy instead of an Iul which match the return of the stock market. Then you also significantly understated the interest rate because the avg new car rate is above 5% plus the bank strategy is about creating arbitrage so if your example is correct the decision would be to use regular financing and not use your bank but where the bank is more financially beneficial you would use your own bank that's how the arbitrage Bank strategy works. But I guess you're not a fiduciary financial advisor in any capacity so you're only interested in selling your product which is shameful very very shameful because you seem like you know what you're talking about
Did you watch the video? Your points are my points. New car rates above 5% make Bank on yourself LESS viable. which is my point. Using whole life for banking almost never results in positive arbitrage. You CAN get it using IUL. An IUL will not "match the return of the stock market" I am a Fiduciary.
You compared the cash value growth rate of a whole life policy to the market?? That’s not an accurate comparison. Next you mentioned the loan rate from a bank can be lower which it can but you failed to mentioned the ease and flexibility of a policy loan. Be your own bank isn’t a scam, it’s just math. By not withdrawing the money and instead taking a loan, it allows the cash value to continue to grow. It’s not a replacement for market money. It IS however a great replacement for a savings account earning next to nothing.
Infinite Banking on steroids is better. That is to say, an Indexed Universal Life insurance policy collateralized for a business line of credit from M&M Bank at 3.65% APR and quarterly interest-only. The cash value is compounding with no life insurance loans outstanding so the IUL cannot lapse. The interest paid out of pocket is a tax write-off and the line of credit grows with the cash value growth similar to a reverse mortgage line of credit. Also, the line of credit does not report to your personal credit which means you can use the line of credit as proof of funds and the cash value as proof of collateral when asking for credit limit increases on unsecured cards or applying for a mortgage. Merchants and Manufacturers bank works with Ameritas, Lafayette, Prudential, Penn Mutual, and Northwestern Mutual.
Real Life Scenario (Me) using Infinite Banking Concept.
My WholeLife insurance cash value was about 50k
3 years in. During covid crash, stocks dropped about 50%. I would have lost 25k right there but my life insurance cash value was untouched. Instead, I took that 50k out (at 5% int), dropped it into stocks. And sold a year later at 90k. Made 40k(80%) to use to pay back loan+5%int. And dropped the rest in as OPP just right below MEC limit. When my cash value hit 100k. I took 100k out to do stocks again. Started in 4/21 and sold all stocks 2/22 for a 30k loss. Yeah Paypal, BLOCK, etc dropped hard this past year. If I left that 100k in my life insurance account, I wouldn't have lost 30k lol. Anyways, I have positive vibes about IBC as long as your using it right. I also used over 10k to pay off CC debt (15%+ vs 5% is a big deal). Any debt under 5% I wont use my life insurance on.
Things I wish I knew beforehand. Dividends dont pay out the first year. Dividends % seem to be calculated based on cash value of anniversary date of the year prior.
PS. I don't think this concept works well for those who can't put in 1000 per month in premium. Yes stocks over the long term can double, triple, quadruple your investment, but have you seen your entire portfolio drop 50% before? What if you needed that money due to a business opportunity or financial crisis and can't wait til your portfolio recovers?
The fact that you can control and this flexibility is immeasurable….totally agree with you!
@@enoessien7641 Thank you for your real life scenario which is the actual benefit of Divided paying WL policy!
3 seconds into the video I hear "in a vacuum" and I think I probably don't need to listen to the rest of the video because when someone explain this subject to me, I thought that sounds good in a vacuum... and I feel like I got that confirmation 3 seconds in.
Your comparison is fundamentally flawed. The stock portfolio is taxed when liquidated. You are also taxed on the growth. If you want to say it’s an ira that’s tax deferred, you left out the penalty for withdrawal. You also blew right past the fact that if you buy it on a policy loan you end up with the cash again plus the asset at the end of the repayment. Not to mention the CAGR of the stock market since it started is far less than the annual rates of return thrown around in this video. This video also only accounts for taking a loan for the full amount of the cash value in the policy. Taking a 30k loan at 6% on a policy that is being paid say 5% on 200k youarestill accruing positive cash flow on the policy even with the loan out
I’m down with Jeremy. I wouldn’t take a policy loan if I was offered 1.24% interest rate at a bank. lf the stock portfolio performed as well as he claims (it won’t), just take the bank loan for the car at 1.24% and use your policy to buy those awesome stocks.
The "feather-ruffling" that you might have received would be due in large part to your misunderstanding of IBC and "Becoming Your Own Banker."
IBC policyowners are not trying to "beat" the interest rate that the insurance company lends to us at. We own policies with mutual life insurance companies. That means we are part owners of the insurance company ourselves. Any interest we pay to the insurance company adds to the profitability of the insurance company, and is returned to us indirectly through the annual dividend. You know, the dividends that universal life insurance doesn't even pay.
And I get it -- the dividends are not guaranteed. But they have been paid by several mutual life companies in the U.S. (and a few in Canada) every single year for over a century, regardless of economic crises and wars. And when used to purchase more death benefit within the policy, those dividends cause a compounding growth of the cash surrender value over time.
The "extra interest" paid to the car in BYOB, by the way, isn't to pay the policy loan off faster. What Nelson meant was that you should pay more than what you would have paid to a bank and that extra "interest" becomes premium in the form of a PUA payment, thus adding to cash value growth, future death benefit, and future dividend payments.
Yes, you can borrow from a bank at a lower rate, but you sacrifice flexibility and privacy to do so. You also sacrifice the interest which is going to an entity that you are not an owner of at all, rather than being a part owner of the insurance company and recapturing that interest in the form of dividends.
IBC also discourages using your policy as collateral for a bank loan. The whole point is to utilize policy loans. But you're so focused on the interest rate that you don't consider all the intangible benefits of using the policy loans as intended. There are some benefits that can't be measured in numbers.
You also used a whole life policy example where the policyholder just stops paying PUA after year 9. Why? Why would I want to give up the ability to pay additional premium, grow even more cash value, buy even more death benefit, and entitle myself to a greater share of future dividends every year for the rest of my life?
In any case, you aren't looking long-range enough. That cash value growth will grow faster and faster over time. It has to because it is a function of the death benefit, and as one gets older, that cash value has to, at some point, equal the death benefit (either at the death of the insured or at the end of age 120 when the policy endows). But you only look ten years into the future. Is the "account value" of an IUL a function of the death benefit? No, it just grows randomly according to some index (if it grows at all). No guarantees there. I thought this was insurance, where risk is transferred to the insurance company? This sure seems like the opposite of that.
Your Monte Carlo simulation used criteria that you chose. You could have chosen a lower average return or a higher one. The point is that you do not know the future, so whatever numbers you use, they're just random. The most that someone could lose in your simulation was under 2%. You even say explicitly about your Monte Carlo simulation - "it's generating these returns for me based on the risk profile that I give it". You could make it show anything you wanted it to. Do you not see how that is a major flaw in your calculations? Oh, and you completely ignored taxes.
No, whole life is not "difficult" at all. By contrast, IULs are insanely complicated and suffer from major flaws. I'm not an insurance agent, but don't IULs have an annually-renewing, one year term insurance rider? And can't the cost of that rider go up at some point? What if you have a health problem that drastically drives up the cost of the term rider, or even makes you uninsurable? That is something you never seem to mention or take any account of in your illustration. And once again, the insurance company is transferring risk back to the policyholder.
Also, you basically used all the non-guaranteed values for both the whole life and the indexed policy and you should already know that illustrations are not accurate the moment that you print them out. They make assumptions about future dividend rates that are nearly guaranteed to be wrong.
At no point did you compare apples to apples. You just assumed the market would yield returns within the artificial bounds that you set. And you used a single whole life illustration from a single company (one that many IBC practitioners object to, by the way) with a weird design to boot. This video didn't prove anything except that you should probably read Nelson's book a few times. It's only 92 pages. The text is large and there are multiple illustrations that take up a lot of space. It's a fast read. Take a night off and try giving it an honest read through.
And did you honestly claim that IULs have a "slightly" higher risk profile than whole life? Are you joking?
"I know there's going to be tons of haters in the comments. And I know, by and large, the haters in the comments have no idea what they're talking about." Rather than being so arrogant, maybe you should do some more research on IBC first instead of using UA-cam's keyword suggestions to base your conclusions about IBC on. You know, actually approach IBC practitioners honestly and start a discussion instead of pretending that IBC is just a "sales strategy", which it never was, and which you'd know if you'd read BYOB.
Your rebutal is right on. This guy’s ranting is missing the point. It’s obvious that while he is concentrating on the trees, he has missed the forest. Unfortunate. He is leading his viewers astray. Whole life, properly design for maximum cash value grows with a GUARANTEED interest rate that compounds, plus yearly dividends. There are many more benefits that this man failed to understand or ignored. I hope his viewers would do more research than to listen to a seemingly “reasonable” analysis that is full of flaws.
Thanks for your comment, while incomplete and inaccurate, we welcome the feedback and commentary anyway as it helps educate in general.
The main point of this video isn't IUL vs WL at all.
The forest that you are missing is simply that SO MANY people get led astray by this concept. We see it everyday. Most of our videos are responses to TERRIBLY designed policies and/or pure lies by bad agents.
@@CashValueLifeInsuranceReviews "...while incomplete and inaccurate", he says, without providing any examples whatsoever. Obviously you just didn't like the smackdown but are too ashamed to admit when you're wrong.
I was only responding to this video, where you were attacking IBC itself, not "TERRIBLY designed policies and/or pure lies by bad agents". I don't care about your other videos, because they have nothing to do with your demonstrated lack of understanding of IBC in THIS video.
I suggest you read and re-read BYOB and then film another video once you actually get a clue, instead of straw-manning my argument because it hurt your fee-fees.
I stopped video as soon as he started comparing to the stock market casino
@@CashValueLifeInsuranceReviews Please read the book!
Great video, gives very good perspective on this issue. Two questions: 1) if you want to use IBC for investing in real estate or a franchise, Typically the rates are not going to be as low but would the rates be lower with IBC than with an average bank for a commercial loan? 2) How would the numbers would stack up if you pair the IBC with Real estate investing for example?
Great to see you brother!!
Thoroughly enjoyed the video, a fair detail between the two. I have been trying to tell people on a few channels that infinite banking in WL isn't a great option. For some reason the words 'infinite banking' seems to make people feel like they should defend it. My points are very simply, If anyone walks into their financial location and deposits $200,000, they should be able to borrow against it. Ask an agent what they make on selling that WL policy that will be used for infinite banking, and if the client pays that commission through fees ? Thank you for being real about infinite banking. It's a marketing idea that isn't in many peoples financial future. I'm partially thinking that even wealthy people that could purchase it probably don't, as there are other ways to accomplish similar goals. Hoping many people watch this.
You have no idea what you're talking about, which is not surprising. Whenever someone complains about commissions, what they're really saying is that they want the insurance agent to do work for free. Do you work for free? Just because the pay structure for an insurance agent is different doesn't mean it's "evil". Hell, the insurance company doesn't even have to pay a commission to an agent that doesn't make any sales. You can't really say that for W2 employees, who get hourly wages regardless of how productive they are.
Your point about depositing money into a financial institution makes no sense. Yes, in the early years of the policy, you lose some liquidity. So what? You're buying a death benefit, and you will recoup that cash value over time. If you think long-range enough, then this is a non-issue. If you need to spend all your money right after depositing it in a bank, then maybe you have other financial problems that you need to do with first, like basic money management issues.
Meanwhile, I'll buy whole life and not only buy a permanent death benefit, but also be entitled to a guaranteed growth of cash value and non-guaranteed but highly anticipated annual dividends every year for the rest of my life.
Oh, and you'd be surprised how much money is tied up in whole life insurance among the wealthy. You should probably look that up. You might end up being surprised.
@@moriendus Quite defensive, and almost like you are trying to be insulting. Perhaps read my comments again.
Infinite banking is a long term strategy. If you are going to fund with 200,000k to turn around and pull 200,000k its not going to work. My kids have infinite banking policies ($100,000 VULs) that have been in force for over 8 years and they will be primed for infinite banking for their whole adult lives.
@@hanselbermudez7604 thank you. Investing is a buy and hold strategy. Even an insurance policy. People seem to think that infinite banking is an answer. Accepting low rates of return so you can make better return elsewhere. ? How does that make any sense. ? Better to go for better return the whole time. Depositing 200,000 into a bank or credit unions investments and borrowing against it, say at 85% is the same as infinite banking. Hopefully you are depositing extra into the policies, as minimums make minimum returns.
I agree 💯%. But at the same time with the IUL, you can do a partial withdrawal where you don't need to pay an interest and pay back the loan
You can withdraw up to your basis, correct. Thanks for watching!
Thank you for this video. Definitely something to consider!
However, a few notes..
-WL has a lot of tax advantages that weren't discussed.
- who is getting 1.24 interest rates? I'm lucky if I get a 6.. currently sitting on an 8.2 for a car.
- do you see any value in having the option between your WL and the bank?
I will absolutely take the IUL into consideration.. I'm young and risk averages better in time.
Yes, lots of benefits to Whole Life, this video is not about that. I have lots of videos on Whole Life, feel free to watch those and let me know what you think!
I'd be happy to chat:
leveragedwm.com/contact-ii/
Yeah, I noticed no tax implications were discussed, is that not a big deal?
@@brianstephens3162 He glossed over a lot of details about both whole life and IULs and only focused on "beating" the policy loan interest rate while simultaneously pulling numbers out of his ass to make IULs and stock market investing look like guaranteed returns.
@@brianstephens3162 it's a very big deal, particularly when you near retirement age. You simply can't do an "apples to apples" comparison as he did in this video without considering all the other benefits the IBC (in it's purest form) strategy provides.
Some will argue that excessive loans might “cannibalize” the IUL policy down the road. Overloan protection riders and proper policy management should easily avoid that situation.
The same way excessive withdrawals will eat away your 401k!!!!
@@CashValueLifeInsuranceReviews You don't have to take any withdrawals from a whole life policy. You can live off the dividends of sufficiently large policies if you're looking for retirement income. Or take loans and let the death benefit pay them off. No need to withdraw up to the cost basis. Meanwhile, you HOPE that your withdrawals from a 401k won't eat up your entire account before you die.
This is great bur most people are not getting 1.24% on average auto loans traditionally higher and stock portfolios withdrawals are subject to capital gains tax not to mention net losses by the average investor
Agreed and fair points! The point of the video is to show that the BYOB tends to overpromise, oversell, and under-deliver. Thanks for watching!
Way to many flaws in this video. First, where do you find a 1.4% loan? Second, with stock market investing your not guranteed gains. If your lucky enough to earn gains you have to claim taxes on it if your income is over $40k year. WLI is tax exempt, which you don't even get into. Third, bank will want collateral where as WLI is secured with the payments you already made. You don't loose possessions with WLI. They just keep your plan when you die and it's not reported to credit bureaus if you don't make payments.
Great video. I have question on this as the only benefit I see is if you are a Realestate investor you can borrow money without having to go to a bank, but I think there is something wrong there as well but I don’t understand it! If I have a $2 million policy and I’m in year 5 and I want to borrow $700,000 to buy property. Would they give it to me? Or do I have to have enough equity(paid at least $700k) to be able to borrow that much?
You borrow from your cash value, not face value. So you would have to have at least 700,000 accumulated.
A policy may be an alternative for those that cannot get a loan for 1.24%. In fact, I've never gotten a loan for such low rate...j/s
Maybe the best video on IBC that I’ve seen. Thank you.
By best did you mean inaccurate?
You compared the cash value growth rate of a whole life policy to the market?? That’s not an accurate comparison.
Next you mentioned the loan rate from a bank can be lower which it can but you failed to mentioned the ease and flexibility of a policy loan.
Be your own bank isn’t a scam, it’s just math. By not withdrawing the money and instead taking a loan, it allows the cash value to continue to grow.
It’s not a replacement for market money. It IS however a great replacement for a savings account earning next to nothing.
I understand what you are saying, my commit would the average car buyer isn't getting a car financed at 1.24 interest rate. Currently it is around 4 to 5 for a new car, and 8 to 9 for used. But this is generalize for people who have good credit. If you less than stellar credit you looking at 5-8 new, and 8-14 used. And that can also based on the term of financing that good rate would using be on 36 to 48, and increase incrementally the longer you fiance. And example would be I qualify for that $50,000 car but to have a reasonable payment. I stretch the financing to 72 or 84 now I'm setting at an higher interest rate to get to the longer term. You probably understand this better than me. But when my interest rate for a 50k car is 6, and example policy is 6 percent is it still better to borough from the bank?
I would like to know what banks have 1.24%, we're about 5-6% in NY. And if the bank rate is higher where I am, does that mean my WL % is higher as well - because of my location?
No, your whole life policy has a set loan %. Check your individual contract
I heard you don’t have to pay back the WL loan if you don’t want to.
Thank you for the video. Great, but is the real purpose behind using this for asset protection reasons like is the policy divorce proceeding proof or something like that?
Just wonderful info .
Glad it was helpful!
You debated your point with a very narrow viewpoint and questionable assumptions. You never mentioned the tax aspect of the market when you pull funds, no one can repo your car if you hit hard financial times (going to cost you additional interest though), glossed completely over uninterrupted compound interest for the rest of the insured's natural life and assumed everyone is willing to take moderate risk in the stock market. With sequence of returns, when you cash out of the stock market, you have to pay taxes plus that withdrawn money is no longer working for you.
Facts!!!❤
When and How does the Ins Co collect the interest on the loan? Monthly?..from the cash value. Or from your rate of return on cash value? Thank you!
The company lets the interest grow in a side account to be paid back at surrender or death.
Keep dropping knowledge Matt!!
Thank you!
I think that you well handled the personal loan elements of the IBC. While the 1.24% interest rate is currently a thing of the past, I get your point. But, I am still confused about two elements I didn't hear about from you: Can you speak to the death benefits of the life insurance policy? And, can you speak to the tax benefits of whole life vs a brokerage account (or, perhaps, an IRA)? Thank you.
Reach out to us, we'd love to talk. This is too specific for the comments field.
Thanks!
While a great video, there are a few assumptions I don't think are taken into consideration. The idea of IBC is to have your money compounding for the rest of your life, regardless of market risk, no? I personally like IUL more, but WL is fine in some cases. You don't borrow from the policy, but rather against the policy. Yes, you pay interest to the insurance company and not to yourself. So, use policy loans if that makes sense vs use bank loans when those make sense. Right now, policy loans are less than bank loans. A year ago, bank loans had a much lower interest rate. Use the math that makes more sense.
The last thing I think that was not accounted for is the purpose of the insurance policy. I've any people say life insurance is not an investment, and for good reason. Investments have much higher IRR, but have other downsides. Often times there's risk and volatility, and if in a qualified plan or in real estate, it's not liquid when you need it.
Granted, WL is not a great accumulation vehicle. IUL is better but the market will often be better (but you expose yourself to more risk) from a rate of return standpoint. It will, however, allow you to compound your money for your whole life, provide an additional death benefit, and also allow you to use the money in other ways to potentially create an additional return. And then all the growth and compounding can be accessed tax free, which market investments cannot!!
Out here bamboozling people with a 1.24% interest rate on that car
Wow, been along time since I've seen a video this dishonest and misleading.
The benefit of using Whole Life for, let's say a car, is the arbitrage between earning compound intrest vs repaying a simple interest policy loan. As opposed to an amortized fixed amount car loan. You can have a "lower rate" on a bank car loan, and still end up paying more because it's amortized. A Whole Life loan is simple intrest. That's a HUGE difference.
Next you're comparing the safety of a Whole Life policy, which should really be compared to a savings account, to a freaking equity portfolio! Whole Life isn't an investment. It's that guaranteed bed rock of liquidity that you can ALWAYS rely on.
How would your equity portfolio recover when your pulling funds out during a -20% time.....like right now. Having nothing but equities forces you to sell during down markets. Which is the opposite of what you need to do.
Having your savings in Whole Life provides you a significant amount of flexibility. It's not an investment, and should never be compared to one. It's just a savings tool that acts as the middle man prior to moving funds into actual investments.
Another great video from my UA-cam Yoda! I have learned and continue to learn from you with each video. Keep sharing and fighting the good fight Mr. Decker
NICE!
I appreciate your videos. Even though I’m a LH&A agent, my specialty is Medicare, so I’m far from the expert or even proficient at these products. But, I am having more clients ask me about these types of products and wondering how viable they are.
The one question I have is--In the comparison of WL vs. IUL is one better than another when it comes to the potential of withdrawing and paying taxes?
Thanks!
Is the interest of the stocks portfolio garentee????
What about using this strategy to payoff credit cards and mortgage that have amortizing interest rates?
If you understand the risks, go for it!
Shouldn’t tax be included in this?
You've made some valid points but like the infinite banking sales Pitches your data is also skewed.
Velocity is good but one should always go with the lowest rates available. Yes 1.x% 0% for X years is the best.
But why not run a Montecarlo simulation on the IUL policy?
Is you market stock investment an indexed mutual fund or a managed mutual fund? The fees can be very different. The same for both policies depending on how they are set up. But that is another can of worms.
Also you left out the tax implications once you try to withdraw the stock market funds.
Note. I like both whole life and IULs. I also use vanguard to invest in the vfiax and vtsax. I do not use a 401k, IRA, Roth, or SEP. I also enjoy your channel. I just wanted to point out something I felt would make it more balanced.
Yes, that was one question I had. Don't you get whacked pretty good with taxes with the mutual fund option? Also, isn't the return for the stock market closer to 7%?
Seems like you are American. Can you do one why banks in the US buy billions of dollars of whole life using this strategy. There is no question that stocks will beat whole life in this strategy because you are comparing a savings vehicle vs an investment that is common sense. Couple items I wish you would have mentioned was the cost of term insurance this client would have had to pay during this time, the whole life death benefit that has been created during the timeline and what management fees investments choice you are using as most people don't go all in stock so 100% stocks? How is an advisor allowed to sell someone 100% stocks when 99% of people's risk profiles come in at balanced which also cuts the returns down significantly using a lower risk mix. Would have been nice to see balanced portfolio and adding in an MER and cost of buying term insurance and the cost of the death benefit vanishing from the client's life after 10 or 20 years and not to mention taxes if the stocks portfolio is in a taxable account can be another big erosion factor. On the flip side, the vast majority of people do not like risk and to say save for a car using stocks and then during that time dealing with a major correction and need that money at that point, in real life the vast majority of people don't want this and most have no real understanding of how investing works anyway so will make bad decisions on emotion all the time,. There is a big difference from jotting down numbers on a piece of paper or in a video to what happens in real life. Overall good video thanks for doing this
Hi Matt, love the content. Two questions: 1) You show the non-guaranteed values in the insurance policies. Wouldn't the better "apples-to-apples" worst case scenarios compared to the stock market worst case after 5000 monte carlos be the guaranteed insurance values? That would support your argument even more I'd think. 2) Depending on the insurance company, can't you get an interest rate that is essentially a wash-loan rather than 4-7% as you state in your video?
Tyson, I'm glad you love the video!
Yes you are correct about both!
The IBC almost never is sold on wash loans, though.
I sure could! Good idea. Tough to represent the non guaranteed values as apples to apples though. The guarantees in IUL would assume the market is negative every single year.
It’s just math. Money growing at 5% is going to make more money than interest paid on a 5% loan.
That’s a hell of an auto loan rate. Just did a simple search, average credit score in America. 716. Average car loan for a 716 credit score is about a 3.74%. I feel like you’re not being objective at all in this scenario. You’re skewing the numbers to make it look better. You’re also not taking into consideration the variable loan rates on cars in the future. They are low in today interest environments, however we are seeing the rates increase as of today at an astronomical rate. Mortgage rates are already back up to 6.5%. You’ve always not included the tax preferential treatment or potential increase of taxes in the future as well. So many moving parts and uncertainty…..
hello, i was wondering, what about taxes?
aren't the stocks taxed?
That's what I was wondering. Also, other stock market returns that high? I thought they were around 7% averaged, but that is just off the top of my head.
that APR is for someone with great credit what about the people that have a high rate? which would be better? for example I sit at 695 credit APR is 5.6. so I guess it would be what is the actual interest rate and the principal or that would pay car off or grow in insurance. Is that correct?
With that interest rate, you could convince me to consider this strategy as long as you are fully educated on the risks involved. Thanks for watching!
Great video.
Thanks Ken!
MATT- YOU are comparing a highly RISK Based Investment = STOCKS, versus NO RISK except the guaranteed interest of 3% + Dividends or profits from the Insurance company that today is yielding 5-6%. ALSO, your OTHER Alternative needs to have a Cost Of Insurance from something to include a Term to age 90 perhaps. Finally, you have NO INCOME TAX Considerations on your Stock returns being reduced by annual taxes on Dividends and Cap. Gains that come out. YOu are WAY OFF on your comparisons for NET GAINS. Finally, you are not considering the Line of Credit a good Mutual Company is offering with collateral to ADDITIONALLY invest and recapture 10 to 20% Yield or more from Real Estate of Simply being a Private Lender for 15% into your Tax-Sheltered BANK. Watch your Video there are MANY HOLES and things you LEFT OUT- perhaps you are ignorant to some of these things- I can understand. Now wrap all these together and compare to your High-RISK Stock Market Investment reduced by at least 25% Cap. Gains and the 5% most states tack onto. I am trying to get you more FUlly Informed into the Private INSBANK. This is NO Real Comparison Matt with investing in stocks that might take away 20 to 40% pullbacks then wait 5 Years like I have done to simply catch back up to where I was 5 years earlier before I began growing again.
can you explain more on the line of credit
This is a terrible video. The infinite banking concept is not an either or. Why not take a loan on the cash value of 4% and leverage that money and put it in the stock market.
Infinite banking concept is showing you that your policy cash is still growing at 4%. You don’t have to use the money to buy a car. That a policy loan and buy the stock market if that’s what you want to do.
Infinite banking concept is replacing the banking Function not replacing investing. Educate yourself.
Thanks for watching!
lol, the guy can't even rebut so he just says "Thanks for watching!". What a dishonest video this was. I don't think he's even read BYOB.
In my situation infinite bank ing would work for me bc I have never gotten a loan for less than 10% and currently I’m paying 21% on my car loan right now. So in my situation where my credit is horrible I think infinite banking would work in my situation. Can you do an illustration on people with bad credit and I can only afford $200 in an IUL or wL which I still don’t understand after 100 hours of watching videos which life policy works for me. It sounds like these life insurance policies are only for rich people? But how can someone who wants a better life 10 years from now even get started? Am I just screwed in my lifetime? Bc that’s what I’m understanding.
All I heard was “ get WLP and IDXP😂 get both “. I don’t even care about the “ car “
This doesn’t compare apples to apples. You’re forgetting this is a life insurance policy with a death payout of $1 million dollars as opposed to just sitting your money in a mutual fund with 7-10% interest per year.
Hear, hear!!!
And it doesn’t take into account tax benefits and how the profits on a stocks is highly taxed for many. On top of that, don’t use the standard deviation. Should what it’d look like 2007-2011 or what 2021 through 2024 will look like with the market losing 20% in the first 6 months of 2021 alone. Timing the market includes trying to time your exit as much as trying to time your entrance. He’s cherry picking market returns.
If this video is about how bad WL policies are (even the well-designed ones) then yes we wholeheartedly agree!
There may be a future where whole life makes sense, but in the current marketplace IUL (or even VUL) is where these strategies shine.
The illustration is the incorrect interpretation and structure of how IBC is used for high cash value. Anyone who teach IBC this way without undergoing IBC certification will get people confused. I was one of the confused and believed on people who are not a practitioner. Until I took one from a practitioner to try out. I have the policy for 4 years now, boy I was glad I took a leap of faith to understand the real IBC. I have far more gain when interest and tax are going back to me. Versus other investments I have been doing for the past 18 years. Why not get one first from an IBC practitioner then compare at what you are teaching. Nothing personal, I just lost time because I did not start IBC long time ago.
The interest doesn’t go back to you…unless you mean to say you are paying the loan back plus extra interest from out of pocket. In that case, doing the same thing in other vehicles nets a better outcome.
@@CashValueLifeInsuranceReviews is an iul a better structure? Doing an 80/20 pua gives wl early cash values to start a bank.
Most IBC purists believe you should only use policy loans, but if you can get a better interest rate by using your policy as collateral (some banks give you a line of credit), why not do that? It seems IBC was designed for the 80s and early 90s (see the interest rates used in Nelson Nash's book illustrations). Following that model to the "T" with no flexibility or adjustments to changes in the financial/economic world doesn't make sense to me.
@@johnp7739 Very well put!!
1.24%???!?
I turned the video off at the 1.24 car loan also my WL doesn’t give me the loan base off of some credit score 😂 1.24 Most car loans end video
His entire presentation is shot as soon as he said he went to the bank and found out what interest rates are for car loans. 1. 24% . LOL! change this 1.24 number to 4.44%.... Rediculous~
Wow you should be sued for how deceptive this video is. First you use and whole life policy instead of an Iul which match the return of the stock market. Then you also significantly understated the interest rate because the avg new car rate is above 5% plus the bank strategy is about creating arbitrage so if your example is correct the decision would be to use regular financing and not use your bank but where the bank is more financially beneficial you would use your own bank that's how the arbitrage Bank strategy works. But I guess you're not a fiduciary financial advisor in any capacity so you're only interested in selling your product which is shameful very very shameful because you seem like you know what you're talking about
Did you watch the video? Your points are my points. New car rates above 5% make Bank on yourself LESS viable. which is my point. Using whole life for banking almost never results in positive arbitrage. You CAN get it using IUL.
An IUL will not "match the return of the stock market"
I am a Fiduciary.
Man, this video didn’t age well, especially with the car loan interest rates.
You aren't wrong! But the principle still applies.
You compared the cash value growth rate of a whole life policy to the market?? That’s not an accurate comparison.
Next you mentioned the loan rate from a bank can be lower which it can but you failed to mentioned the ease and flexibility of a policy loan.
Be your own bank isn’t a scam, it’s just math. By not withdrawing the money and instead taking a loan, it allows the cash value to continue to grow.
It’s not a replacement for market money. It IS however a great replacement for a savings account earning next to nothing.