Split your cash into an emergency fund and an opportunity fund using whole-life insurance. Borrow against the policy's cash value at 6% interest only if you expect at least 12% returns on what you deploy.
Uh, the, the framework's pretty simple. You, you, you have an emergency fund and an opportunity fund. You can do that with wherever, savings account, bonds, whatever. I choose a big portion of that to be in life insurance. So I have a year plus of emergency, actually closer to 2 years because that just makes me feel better. And then above that, I see it as opportunity. And opportunity essentially means is this is capital that I need to deploy somewhere. Now, not all my money's in whole life, just for all the reasons why Jim said. So probably if you look at my portfolio, about 30% of my cash flow, of free cash flow goes into whole life. So I'm still investing outside of whole life directly into investments, into premiums of whole life policy. Yes. So premiums. Yes. So now let's, let's say I have a couple hundred thousand dollars of cash value that's above the emergency fund. Now it's, it's simple as, okay, what's the cost of borrowing against that? Let's say it's 6%. Well, I'm going to make sure that if it costs me 6% to access capital, I'm going to make sure whatever I can invest in or deploy, when you factor in risk, is far greater than the cost of the 6%. And then you also have to factor in opportunity cost of putting all your money into something and not saying yes to something that's maybe a greater opportunity. And so that's, that's the simple deal is I'm getting the benefits of insurance, which are great, in my opinion, are greater than the cost of 6%. If it wasn't, I wouldn't be doing it. But then, but then I'm being able to deploy the insurance company's money at 6% to do whatever. And I have all kinds of investments. Not all of them are turning out great, so don't get— I don't give investment advice. Don't follow my investments. But a lot of them, because I'm an entrepreneur in business, I'm using to deploy in different business opportunities. And my goal is if I can't earn at least 12%, I'm not even going to think about borrowing at 6% because you do take on some hassle. And like Jim said, like extra control cost
