Q&A Deep Dive: Mastering Infinite Banking and Whole Life Insurance for Legacy Wealth | Titan Impact

Okay, I am super happy to be here and talking about the Q and A session for unlocking the power of whole Life insurance. So a couple days ago we did actually, Tristan, you did an extraordinary job on explaining this. And what was really great about it is that multiple people have actually reached out to me about this and want to have conversations. So that's really, really cool. So this is a session for people to be able to obviously come on and ask questions, but I, in my experience is that people don't know the questions Stephen asked because they don't know what they don't know. Right. And so I'm going to have you go through and go ahead and just answer some questions that, you know, people typically have. And then from there, when people have questions, they can put it in the chat or whatever, we'll answer those questions as well.

Fantastic. A wonderful. Thank you again for having me back. And this is exciting. So let's take a look at the slides that we have. So let's just do a little recap of last time. We talked about the different types of whole life universal index policies as banking foundations for this concept of infinite banking, which we mentioned below. The different types of life insurance, most life is commonly a term, so you have a length of time. It might be unusually a very short one, maybe four or five years to 10 to 20 years. Index policies are indexed with the market, so they are susceptible to both wins and losses in the stock market and can offer some benefits. But whole life is the one that we're really focusing on in this conversation where we have living benefits as well as death benefits. And infinite banking is a structure of whole life insurance policies in a way that allows us to pay a premium and preferably minimize the premium. And it may not give us much death benefit for us, but the living benefit is the one that we're looking for, is to be able to structure in a way that over time we become our own bank. And then potentially long term, in a legacy manner, as the Rockefellers and many other families that we talked about the other day have created, is a structure where the money never leaves the trust, an underlying foundation for the family's legacy, and it just rolls in and expands and snowballs and exponentially grows over time through both compounding and and leveraging what we call the arbitrage, which is the difference of borrowing a collateralized loan against the value of your policy and investing it in an investment that has a higher return than what you're paying. And that difference, the margin is known as an arbitrage between what the interest is you're paying towards your loan, your collateralized loan, against the value, but not removing the money. Remember we said it's unlike going to chase and putting $100,000 in a bank and taking 50 grand out. You're only getting paid interest on 50 grand. In our situation, you don't take any of your money out, you borrow against it in a collateralized loan. You don't apply for the loan, you don't have to justify the loan, there's no underwriting and you don't even have to pay it back. But those are some of the questions that probably will answer in the session today. And then I think I've covered a little of the investment leverage there, which is arbitraging or putting the money to work, to work with a higher return than you're paying in the cost of debt. And, and this is an unusual concept to many people until they realize this is what Chase Bank, Wells Fargo, all of the banking system is doing with your money. You put the money in there, they have that collateral to lend and they might pay you at best, 5% interest right now on a 12 month certificate of deposit where you're forced to leave that money, it's not liquid to you. They hold onto that money for a year or potentially longer and try and catch you into leaving the money with the bank instead of making the bank for yourself. And they go and put that money to work and they will lend money at 7, 8, 9%, 10% interest in some cases, depending on what they're deploying your money to make money for themselves. And when we look at that, if the bank's got no money in the game and they're making a return of 1% or 50% or 100%, they are getting an infinite return on their investment because they're using somebody else's money, which you've probably heard the expression, opm, other people's money. So they're using our money to lend out to other people and they're making a big, you know, margin on what they're lending your money out to somebody else for. So the infinite banking concept is what allows us to lend our money on our terms to other people. And we make that margin, we become wealthier and we can police our own money better than we can with the banks. As we know, even in the last year, a couple of banks went under for mismanaging. They lent more money than they had in the reserves. And we can't pull out from a whole life insurance policy more than we have in the as the collateral, which is the paid up additions. We can't do that. So it's a much safer strategy to do that with our own money, with our own whole life insurance policy and create an infinite banking. And that's where infinite comes from, is we're using the health, the life insurance company's money, not ours, to lend to other people. And we're making effectively an infinite return on that. Everything that we make above the interest rate that we pay them. So let's have a move on. So top questions, answer. So policy qualification requirements. So we're alive, that's one qualification. But there are some beyond that. And as you know, with a car insurance policy, if you've had a clean driving record, you probably have the lowest risk. Again, depends on where you live, depends on where the crime is in your area. Let's relate that to a life health. Ultimately, we're looking to find somebody who has preferable risk, which means it's a lower risk than the average risk that the insurance company is taking, a preferred risk. That way the policy premium is going to be lower than somebody with a standard risk or a high risk or a risk that they're not willing to take on. So people in their 50s and 60s will therefore, because they're closer to death and have likelihood for more chances of diseases and ailments coming along, are going to pay a higher premium than somebody in their 20s, in their teens, or even preteens. And the reason I mentioned preteens, I'm going to come back to it later on, is requirements require that you're alive, that you have an income, that you have a value to your life financially as far as what you're earning. And that's how they calculate your premium is what are you earning, what's your earning potential and what's your risk of death? Those are pretty much the main factors involved in creating a policy qualification. So minimum requirement, you could start with as little as maybe $300. You're going to get more results the more you put in. So maybe $500 might be an ideal investment. And where does the $300 come up? So this would be the monthly premium or the paid up additions that you're making to the policy so that you can create more value in the policy. Now, as with many things, there's a salesman involved, they need to get paid. So when you put your first year's premium in, some of that is going to go to the person that sold you the policy. And then on subsequent years, that's when Your premium is going more towards the policy. Even though the policy is in place with the insurance company, they're banking on that long term value of life and contribution over time. And that's why by year four is when you have the optimal growth and the more money you put in, the quicker it grows. Compounding interest. We discussed that the other day. Einstein described it as the eighth one of the world. If you understand that you earn it, if you don't understand that you pay it. And referring to the growth of a life insurance policy, it is always compounding the cash value that you have in the policy because you're borrowing against that cash value, you're not removing it. Like we mentioned with a Chase bank deposit account, when you take it out, they're not paying you in a whole life insurance, it's always compounding, it's never interrupted. So let's look at. When we put money into the policy, we need to pay a premium, which is the baseline for being insured. We have what we call paid up additions, which gives it the additional cash value. That's the living benefit that we have, that we can invest and we can draw from as a collateralized loan. And my policy, when I put money in, within 30 days, I could access that initial deposit that I put in. And within 30 days of any of these additions, you can access that as a collateralized loan. And that is building over time. And obviously with that hockey stick of compounding, that's growing more and more the further we go down the line, which is why we say full efficiency is reached by year four. So what kind of returns can we expect on the actual life insurance policy? So generally the life insurance Companies are giving 4 to 5%, and very often it's a larger return. Banks have a marginal lending requirement where they have to have a certain amount of capital available to be able to lend a certain amount of capital. So working basically in basic terms, these aren't true values. But just to give you an example, basically they might need $10 million to create loans of $100 million. So they might be able to loan 10 times the amount of money they really have in their bank to create returns. With the life insurance companies, they can't lend more money than they actually have in reserves, which makes it a very, very safe organization to invest with or place your money. They are very good guardians and custodians of your capital. And they're very well known for investing in real estate, commercial real estate, and some very solid investment platforms which are available to all of us. But they do it at such a large scale, they are getting much more solid results. They have a team in place that manage all of these things. And what is the benefit for the life insurance company? Well, we got two different kinds of life insurance companies we covered the other day. There are for profit who are all about making money for their shareholders through the money that you place with them in the life insurance. And there are the mutually owned companies which are owned by the members. The members are the people that are otherwise known as customers to the for profit businesses and they place their money with fellow members in a group and you're investing with this group with who are mutually benefiting from each other's capital. The expertise of the mutual organization which is managing the money and administering all of your capital, that's protected with them. And they will always give any excess profits to the shareholders, which is, I correct myself, the mutual members rather than the shareholders. So any excess profit that was over and above what was forecast, that comes to the members. So that benefits you. So they are doing business for you, with you instead of the for profit company which many of which offer very good policies but ultimately their goal is to make the shareholders happy through leveraging your capital. So those are the two different situations involved. And commonly the mutual companies will have lower costs which means there's more growth of your capital and also there's more profit coming back to you instead of going outside of, of your, you know, your membership. So protection from creditors. There are state jurisdictions that have different, different positions on this. But traditionally in most cases, any money which is in a life insurance policy is protected from creditors. So if somebody got in trouble financially, in some cases people could come after your house, they could come after anything that's in your name, personally owned by you. In most cases, the life insurance cash value is protected from creditors. They can't come after it and draw that out of your fund. Now somebody inheriting that money may have the possibility of, you know, having that as a cost of the estate. But I think that we're going to talk about probate and other things in a future slide. So there are protections there. So let's talk just briefly about some success stories. The Johnson family started with a thousand dollar a month monthly premium and now the cash value over many years has grown to over $1.2 million. They have paid for the college of three generations of their families through this network of policies. And they paid no taxes on the growth, which is incredible. Dr. Williams practice, there are doctors, there are professionals that actually leverage whole life insurance in A business context to be able to loan money to their business from their personal or their trust's life insurance policy. So that instead of buying equipment from medical supplies XYZ llc, they're actually borrowing money from the family's life insurance policy from the cash value to be able to then loan to their business and then pay interest back to their family policy instead of paying Medical Financing llc. So they're keeping that money within their, their personal network they use in their family's bank to finance their business which is benefiting the family in a, in a better way. It could be a family business, it could be a corporate business. Either way, you can lend money to your business, somebody else's business, you could lend money to somebody doing real estate transactions or invest in other real estate. Which is where we come on to Sarah's real estate empire through the use of her policy with loans as down payments and very often on investment properties, your down payment is going to be about 20% of the value of the loan. The loan to value as it's known. She looks like she's used a million dollars to create 5 million dollar portfolio. So she's put maybe 20% down here. There is some equity built in there. So I'm just using rough numbers. But her mortgage payments flow through to her policy. So any cash flow that comes through, they come back into her policy which pay down the collateralized loan that she had for the 20%. And she's created a cash advantage retirement income stream. So not only is she deferring tax with the real estate, she's also pushing that cash flow back into a whole life policy which can then be drawn down towards the end of her life as a retirement strategy for paying for cost of living or just fund straight into more policies. So we have next page. So here we come on to. I mentioned probate and estate planning. So let's look. So it's ultimately our legacy that we're looking to prepare, build and hand on to the next generation. So we just talked about tax free growth. So with the policy itself, there's no taxes on the policy, cash value increases. We also want to put then a trust structure in place, which I've mentioned several times. A trust is an entity, not a person and that allows us to own either assets or businesses or control otherwise, you know, things that we might buy ourselves into a trust. So property is one of those big things that we put in there. So you may have a living trust or maybe a revocable or non revocable trust. That is then the Beneficiary and the owner of the life insurance policy. And any assets that you buy will be then creating LLCs, which are the asset protection level. The Trust owns the LLCs. That protects you from most creditors and lawsuits, especially frivolous ones when they can't find who owns the trust. Because in most states you don't have to declare who the trust owner is. You then open a, maybe an anonymous LLC in one of those states that allows that, Delaware, Wyoming, et cetera. And then you can own assets through those entities without personally owning them. So you technically own nothing. You are in control of everything. And estate planning by integration. We've heard the word probate before. Probate is a nasty thing, or it can be really nasty. So the probate handles the estate, and the estate can be described as the stuff or the possessions that somebody has. Could be a car, it could be a house, it could be a piano, it could be one of many things. But probate is necessary because there wasn't an estate plan put in place. Now you might ask the question, well, they've got a will. A will isn't a conveyance of assets through a structured manner, which doesn't, which can avoid the county court being involved. A will has to be verified and almost ratified by a judge to say this is a true and proper document. To also make sure that the person or persons who may be inheriting or receiving assets or stuff from the deceased estate are going to the people that the court agrees are the right people. Well, with a trust, if it's structured correctly, you've got everything you need to avoid doing probate because it's outlined the trust is an entity, whereas the stuff which a person owns is under them personally, not a separate entity. So a trust is like a vehicle which can be driven from generation to generation, potentially, if it's structured correctly. And that is the owner of the assets. And you can create bylaws and you can create effectively. The operating agreement for the trust outlines how it will be managed and how it be run. And obviously you need a trustee at minimum, or you can have a board of trustees to run a trust. And that's what the Rockefellers and those families are doing. They are heavily managing and controlling the trusts to make sure that they evolve to benefit the family's future generations. And they are known for planning many, many, many generations ahead of time on what will happen with the growth of assets. And obviously they don't know the ups and downs of the market necessarily, but they are already strategizing and creating what ifs because they've already had this in place for eight, 10 plus generations. So they know how the world evolves. They don't think about just tomorrow and next week or next year. They're thinking tens or maybe 100 plus years down the road where they're planning their wealth to grow over time. So customizing your policy. So premium allocation, we need to look at what your base premium is because we want to minimize the base premium because we don't want the death benefit, we want the living benefit. Which is why we have to structure it in a way where the paid up additions give us the the majority of benefit so that we can reinvest that capital or the collateralized capital during our life so that we can make investments. We can create passive income streams. As Catherine said the other day, the average millionaire has seven or eight individual diversified income streams passively. And this will either fund the first one and then maybe fund many afterwards, or be funding one or two income streams with other income streams being available to you. So rider selections, this could be different. Things like in the event that you have a situation where you can't make the policy payment, will it draw from the cash value to make the policy payments, the interest payments, et cetera? There are the main policy riders that are available. I won't go into those right now. Those are more specific to specific people and situations. So ownership structure, as we mentioned, we could have a trust which is the owner of a whole life policy. It could be an individual, it could be me. I did start a policy, but I immediately made my living trust the owner and beneficiary of that policy so that I'm not personally receiving anything from it. I'm going to die. And it's the trust that I want to benefit from, you know, the living benefit or the death benefit, when I ultimately die, it could be joined, it could be between a husband and wife or a partnership, a life partnership, or it could be corporate owned. And in the situation with corporate ownership, one of the examples is, I may have given the other day is where you have two partners in a business, two individuals who share the ownership of a business that you know, maybe sells doodads or a plumbing company, for example. So person A and person B, they may have a spouse or a significant other that are not involved in the business and they have set the organization up, the entity to know that person A and person B are owners. But in the event that person A or person B unexpectedly dies, the other person remaining doesn't want the spouse or the significant, the other involved in running the company by inheriting that ownership. They set up an operating agreement for the business to say if one of them dies, each of them has a life insurance policy on the other's life. Because I'll come back to who can have life insurance and what you can, who you can insure, but they can insure each other's lives. So that say person A dies, person B receives maybe half a million dollars or a million dollars, whatever the agreed amount is in the operating agreement to buy out the surviving partner or spouse of the other party, which leaves them in full control of the business. So that's one area in which you could, you know, it could be a corporate ownership, but it could be an application within a corporate environment owned by each of those two individuals from a corporate basis. Funding schedule so you want to make sure that you put as much money in the policy up front. So premiums you want to minimize, but paid up additions you want to put as much money in as you can up front. Because remember, we're compounding. So the further you leave money out of the policy that you could invest in there, the longer it's going to take for that hockey stick effect to really drive upwards. And, and that's the return that we're looking for through this compounding and growth of the policy. So the more money you can put into the policy up front is much better because that's going to give that hockey stick a much better run up and it's going to happen more quickly. It's not like an overnight where it suddenly goes vertical. But if you understand compounding, it's a slow growth and it's an accelerating growth as compounding is so policy layering. So for example, I've got convertible term life as well as a whole life insurance policy. The convertible term life is available for me to pay a minimum premium for a large amount of life insurance. But the convertible means that I can convert it over to more whole life coverage and, and kind of say I've got $5 million total, I can take another million dollars of coverage and make it whole life policy. A new whole life policy with a million dollar death benefit and that would reduce my convertible term to $4 million. I can convert over and create more layers of policies where I can add more money in and start more hockey stick curves with that growth over time while maintaining my death benefit. I don't mind if my death benefit reduces when I've created a new whole life insurance policy from the convertible life because it's now more life benefit that I can get access to with those paid up additions and the cash value. So business integration fund companies really benefit through policies. There's a lot of tax advantage, executive compensation policies which can be created so that they may not receive the money up front, but they can have the additional compensation put into deferred life insurance policies to ensure that they get a reduction to tax and other benefits and receive it in a non traditional way. Again, another way that the wealthy protect their income and strategically manage it to benefit them in the long term. So velocity banking, so the way you can accelerate debt payoff through strategic policy loans. So Catherine mentioned this in her summit last week, which is where you use a line of credit, which we could take a collateralized line of credit against our whole life policy. So we could then take, say somebody's got 20 grand in credit card debt, you could pull out 20 grand as a collateralized loan from your life insurance policy at say 5% interest, interest only, it's simple interest. And you could pay off a $20,000 credit card, which you're paying maybe 25, maybe close to 30% right now. And then you can, instead of making the monthly payments which are minimizing your pay down on the credit card, you can make those same payments back to your whole life insurance policy, which is paying off your credit card, reducing the interest you're paying. So it's reducing the cost of debt. And that's one of the important expressions we use in investing is the cost of debt. You significantly reduce the cost of debt. You're only paying interest on what you borrow from the life insurance policy. So putting more of the principal back into your collateralized loan, replacing that, paying that off instead of paying a credit card off month by month and minimally reducing the debt, you're going to have a much better way of, and this is why they call it velocity, because you can pay it down a lot more quickly leveraging that line of credit. Now, say you managed to pay 20 grand off in three years instead of maybe 20 years, which might be in the schedule. If you spent no more money on the credit card by just paying the interest payments month by month now you might have paid it off in two or three years. Now you can start to pay another credit card off if you have other credit cards. And we can use a combination of these things to accomplish that. So real estate synergy, we can, as we, as we mentioned on the earlier slide, with the lady creating a $5 million real estate portfolio, she used policy loans for down payments. So she's paying minimal Interest to put money down to buy property. And then she is buying a property with a mortgage from a bank because, because she didn't maybe have enough money to go and buy the property entirely with her whole life insurance policy. And there's another discussion there of leverage and how much we should leverage. But she's able to make those policy repayments through the cash flow from her real estate investments. The cash flow and properties. And again, it's not quite the same as velocity banking, but it is in some ways because you're leveraging that to buy more assets, create more cash flows, which is another income stream to pay down that, that commercialized loan. So what are your next steps to your financial freedom? Do you feel free right now? I would suggest probably not in 99% of cases. So book a 30 minute personalized consultation. We'll look at where you are now. We'll discover what you're, what you've been up to the last, you know, 20 years of your life. How you got to this place, what was your vision? I remember when I was a kid wanting to drive a Formula one car. I could visualize being in the driver's seat driving a car around a track. Vividly remember it now. But where did our imagination go? Where did our goals go over time? I got married, I got divorced, I had kids. Not quite in that order, but through focusing on different things outside of myself, I kind of lost that vision for the future. And I think that's common for many of us. So let's sit down, see what Was your vision 20 years ago? What did you want to see? We got to consider how much life, the world, and we've changed over time. We become different people than we were 20 years ago. What's available to us as a goal has changed. So, so that's where we look at creating your custom blueprint so we can tailor an infinite banking strategy for you with the right policies, the right providers, and look at your objectives and make sure that it's aligned with those objectives so that it creates the most efficient and effective path to getting to your goals. Implementation support, we will help you set that up. We'll get the right structure, we'll analyze, we'll do a, a confidential financial questionnaire with you which will produce where you are now. That'll give us a benchmark and we can then look out to how many years it is till you retire. Do you really want to retire? Maybe that's something you don't want to do, but you want to change what you do over time. So we can help you structure your life and build a bridge between retirement and today. And that will meet somewhere in the middle. And hopefully you'll have the opportunity to retire. And let's use the term retire in the sense that we no longer have to work because many of us find things that we really enjoy doing. We enjoy impacting people, whether it's coaching, giving back to communities or a combination of those above, travel, other things. But we may find something we really like doing which may not be the most efficient financial income for us. But because we built that structure that bridge between today and retirement, we can afford to go and do that without having to worry about a financial future. As we can see, 20 years has changed from 20 years ago when we had that initial plan. In the next three years, in the next five years, 10 years, 20 years between now and retirement, we will change. The world around us will change. And we'll do quarterly reviews with you to look at your banking system, check what's in there, make sure you're leveraging it in a way that's efficient and most effective for building. And if there are changes, new opportunities available, we can help you look towards those and find those opportunities that are going to best fit you. So with that, that is the end of the Q and A today. Are there any questions or answers? I see tp do you have any questions that you might want answered from what we've talked about?

Well, and if people are going to watch the recording, so if they have any questions, they can message. And I know that I'm already going to be connecting you to several people who have even more questions because I think this is just a such a huge subject that I know for me, my Questions come at 3:00 in the morning. So everybody's going to get the recording. So if anybody has questions, even after this, really, I invite you to reach out to Tristan or I and we'll work and absolutely get all your questions answered. But I think the bigger thing is to understand that each individual person's plan and what they're doing is different. So there's no one size fits all. And so having a strategic call with you to be able to go over that I think would be hugely beneficial. So thank you. This is one of my favorite, obviously subjects to talk about and tools to be able to use to have people be able to leverage other people's money to create those multiple streams of passive income. So with that, thank you, Tristan, you're amazing. I totally appreciate you coming on. And yeah, I can't wait for you to be helping others be able to create a way to use other people's money to create their. Their freedom. This is awesome.

Thank you so much. So.

You're amazing. Thank you. And I hope you have an extraordinary day.

I love it.

Okay, bye, everyone.