CALEB GUILLIAMS INTERVIEW – The “Secret” Way to Save and Use Your Money at the Same Time

Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm Chris Larsen.

And I'm Caleb Welborn.

You can get your free copy of our book@nextlevelincome.com Today's show is sponsored by the Multifamily Investor Nation Summit. If you missed it last week, you can see myself as well as multiple other experts in the multifamily real estate and financial space at Multifamily Investor Nation. On our show today, we have Caleb Gilliam of Better Wealth. Ever since he was young, Caleb has been interested in money. And in his early teenage years, Caleb began reading books about money and various financial strategies. Unlike his peers, he was saving and trying to multiply his money at the age of 19. That's 19 years old. He was still in college and he was extended an offer to take over the investment division by a bank CEO. While he was timid and thrilled, he read and did all that he could to educate himself. And he sought out and positioned himself to study under the best mentors he could find regarding finance, taxes, insurance and investments. He traveled the country for over two years to ensure that he would be able to provide the best strategies for his clients. And just three years later, at the age of 22, Caleb started his business, Better Wealth. Today, Better wealth focuses primarily on financial education and he has the ability to work in all 50 states. Show his clients how to take better control of their wealth today with while preparing for their financial future at the same time. He uses videos, books. This is his own book here. Gentlemen, ladies and gentlemen. And his personal mission is to help people see and reach their highest potential. Few people Caleb's age have dedicated their lives to helping the millions of people in need of a better way financially. And you can check him out@betterwealth.com Caleb, I'm really excited to have you on the show today.

Chris, it is a true pleasure and I'm a huge fan of what you guys are doing and I'm excited to get into the the weeds here and jam out on some amazing money principles.

Likewise. We're all financial nerds here, so this is exciting. So our mutual friend here, Caleb, myself and you, Louis Diaz, connected us. But for those of you who don't know your story, maybe you could share a little bit more than I shared in the intro about how you ended up where you are today with Better Wealth.

Yeah. So if you're not watching our recording and you're just listening, imagine me looking like I'm 14 years old, like, now. Okay. Imagine what I was like at 19. It was pretty rough. Heard that it's going to be an advantage 10, 20 years from now, but I'm still waiting for it.

Yeah, don't worry about that.

I need to grow a beard like Caleb and really just help me look older. But my story in a nutshell is I grew up in central Wisconsin, oldest of six kids. My dad is a PhD molecular biologist. I've never read any of his books, but he's written nine, and he's way smarter than I am. Apparently his genes didn't get passed on to me, but my mom was a nurse and stayed home and homeschooled us. And so I had a really unique upbringing, was homeschooled, was always into money and savings. But that really became real for me when at 15 years old, I got a job at a chicken farm. And I don't want to offend any vegans on this podcast, but I essentially gutted chickens for my first job. So I have an appreciation for the chicken sandwich that most people don't. And I ended up getting paid a dollar per chicken for that. And what that ended up doing is I just got into this mindset of, like, wow, my money can start working for me too. And I started doing investing and option trading, and it was truly incredible. And then I couldn't figure out why all my friends are so broke. And I didn't know a fraction of the problems that we have in our world and in our country as it relates around money. At the age of 17, through a mutual connection, one phone call got me a job at a bank. Two things there, I learned about the power of networking and relationships. And I also learned about, just like, the importance of working and getting experience. And like you said, worked in almost every department, really wanted to be as valuable as possible. At the age of 19, found myself taking over the investment department, which is crazy, in my opinion. I don't know what they were thinking. But the CEO of the bank, who's like a second father to me, he gave me a really cliche phrase, but it's true to this day. He said, people don't care how much you know until they know how much you care. And I know that you're going to do the best buyer clients. And so he just, he gave me the ability to run and learn. And I learned some insane things about money, about efficiencies, about the lack of savings, about increasing cost, and real financial solutions to help people take back control of their wealth with still growing it effectively and most importantly, using their money throughout their life. And so I feel super blessed. I'm so grateful that Louis connected us. And yeah, again, I love what you guys are doing and I know there's. We have a lot of alignment on what we teach people as it relates to wealth.

Absolutely, yes. Around that. Tell us what does better wealth do?

So better wealth is a financial company and our like mission as a company is to help create financial certainty so that you can live a more intentional life now and in the future. And we do that through our better wealth way, which is essentially helping people get clarity, helping you be efficient with your cash flow, your assets and liabilities. Then we specialize in helping you save your money in I call it the and asset. Some people call it infinite banking or becoming your own banker. It's essentially overfunding life insurance, whole life insurance. And where you get your dollars to do multiple things. It grows tax free. You can borrow against it to invest in real estate or your business. You could pay off debt with it. And so we help people through efficiency fund their and asset and then leverage that asset to do what we call asset based activities. Any activities that will help you get closer to the kind of results that you want to live. And so just a real plug. ROR for us stands for return on result. Most people are going to tell you that rate of return. And unfortunately we live in a world where people are being seduced by whatever gives you the highest rate of return. But we want to get clear on what's really important to you so that you can live your life and use your money in a way that can help you get the results that you want to get. So that's in a nutshell, that's kind of what we do.

Yeah, I mean, you know, when we, when we first spoke, I remember revolving around that and that's, you know I write about in my book, it's like why financial independence? What are you working for? What are you doing? And if you start out with that, you know people, a lot of people don't step back and really think about that. I know that's one of the first things you ask your clients when you work with them. And it's so important before you can even begin to help somebody to understand what they're working towards, helping them understand really what they're working towards as well, I think.

Right. And a couple questions we ask is. And it sounds simple but it's like what do you want? And if money wasn't an issue, what would you do. And another way to ask that is, if you had $10 million in the bank, what would you be doing? Or how do you define financial success? Those are all the same question, by the way. But it's interesting, when we ask those, we usually get different answers. And our goal is, on our first call with people is get really clear on what you actually want out of life. Because in the words of Alice in Wonderland, she was at the fork in the road, and the cat was like, if you don't know where you want to go, any road will get you there. And the sad reality is most people don't know where they want to go. And so your book and my book really doesn't matter at the end of the day, if you don't know why.

That's exactly right. That's exactly right. Yeah. You got to get certain on what you want, what you're doing it for. And, you know, that's the other thing. If you're. If your why is big enough, then you can move anything out of the way, right?

Yep.

Awesome.

That's a great point. And I love the mission of spreading that education because we're recording this in April right now. It's not. It's not going to come out until June, but we're in the middle of the coronavirus crisis right now. And those statistics that some of the people who listen to our show know of, you know, the majority of Americans don't have the money to cover a $400 emergency. Most people, the majority of Americans, over 50%, don't have $1,000 in a savings account. Unfortunately, right now, a lot of people in our country are seeing what happens when you're not financially healthy like that. So I think what you're doing is really important. So going back to your book, the. And asset, A and V asset, you kind of touched on it there, the idea of using a dollar in two places at once. But, yeah, Chris is holding it up there, but for people. Because also in your book, you say, you know, a lot of people don't know about this. So could you go a little bit more in depth into the strategy to someone listening who may have been intrigued by that, but wasn't exactly sure what you were talking about?

Yeah, I'm gonna. I'm gonna break this down. I want you guys to ask clarifying questions. If it's not. If it doesn't. If I'm not saying it simply, but there's essentially two factors that everyone has to come. Has to realize that happens to their wealth. Factor number one. Is long term. I call it time value of money. Some people call it compound interest. Albert Einstein is noted for saying that this compound interest is this 8th one of the world. What is compound interest? It's a function of money compounding over. You have to get an interest rate over time, so it's a long term deal and so on. One factor we have to understand that every day that goes by, there's a long term element to our money. And every time we don't understand or maximize that, every year that goes by, we're missing out on what we could be earning. On the other side we have control. And control is the element of being able to utilize capital, being able to use your time in your talents and to be able to make things happen. If you're an investor, if you're an entrepreneur, and you had to choose between long term or short term control, I would say most people listening to this would go into the control aspect because over time, controlling capital, especially if you know what you're doing, that compounds as well and you'll be better off and most likely be happier if you're doing something that you enjoy. The epiphany that I had at 21 years old at Community First bank was I realized that we are being taught this false choice. We're literally being taught you have to choose between long term or short term planning. I was being told that I could either max out my Roth IRA and 401k and all these things, and over 30, 40, 50 years, not touching that money, it's going to grow and be amazing. That's awesome. And that's math and that's debatable depending on who you're talking about, where you're growing it. And then on the flip side, I'm like, I could also put my money in a checking account, earn zero interest, but have access to capital to do real estate to launch better wealth. I'm telling you, better wealth as a company is outperforming any investment that I could do in the market. So I had this dilemma. It's a first world problem, I guess, but it's still a dilemma. And so we have to understand there's a long term and a short term. And the epiphany moment for me was you don't have to choose anymore if you know the rules to the game, if you understand how the and asset is positioned. Essentially an and asset is a special type of contract with a mutual dividend paying life insurance carrier. In other words, it's a contract that gives you ownership into a mutual insurance company. And that contract has to be specially designed to maximize cash and minimize the insurance benefit. So right off the gate we're like reverse engineering a special type of contract that allows your money, when set up and used properly, to grow tax free the rest of your life, to use capital tax free and to pass on that wealth to the next generation tax free. You look at all the benefits and in my book I talk about 16 ideal benefits to any investment or savings vehicle. And when this properly structured life insurance contract set up, it checks 15 out of the 16 benefits. And so what we end up doing is it's not an investment that we're setting up, it's just an ideal place to store house capital where your money will grow the rest of your life. You'll get that long term value, but you'll still be able to leverage your savings to do other things while your money's continuing to grow. People say it sounds too good to be true. Well, it's really not. And you just have to understand how it works because it's not a get rich quick scheme, but it's definitely a more efficient way to save and use your money. And the whole thesis of my book is give your dollar multiple jobs and efficiency matters. Efficiency takes into consideration long term and short term and this is just a more efficient way to use capital. So that's an overview and how I explain the and asset what it is. Life insurance sometimes gets a bad rap but I want to encourage everyone listening to this. This is not your parents life insurance policy. It's a very specialized kind of contract that gives you tons of benefits and really gives you the ability to use $1 in multiple places.

That's a great way to describe it. And I love the title of your book, the and Asset, which I'll hold up again here. And if people want to read it, if they want to get it, they can go to your website, betterwealth.com and get a copy there. And Caleb, thank you for the copy. I really appreciate you sending me one. I read it in the afternoon the other weekend, very easy read. And we set our policies up, my wife and I, right before my first son was born. I talk about that in my book. I call it my Opportunity Fund. And I was kind of bummed when I as I started to learn these strategies I shared with you. My agent did a great job setting the policies up, set them up appropriately for our income level, the ability that we were able to fund at the time and continue doing. But we didn't really get a lot of encouragement to take that money and use it somewhere else. And I think that's the key with investors, especially the ones that we work with. What's really cool. And that's why I love the title, the end asset. We talk about whole life, we talk about the benefits and we can go through all 15 of those or people can just read your book. But it can be an emergency fund. We've used it here recently during the COVID crisis. My wife and I, we've accessed some liquidity to have as a cushion. A month ago we didn't know what was going on. It's great. We've also used it for funding spec homes. We've also used it to finance cars and we're now using it to invest in, in our commercial real estate deals, specifically our multifamily deals. So maybe you can dive into a little bit about. You said two things. It's not an investment and you can use it in two places at once. And I love this. It's like double dipping. So can you go into those two aspects? Caleb?

Yeah. So the first thing and remind me of the first question.

Yeah. So you said it's not an investment.

Yes.

So why do you say it's not an investment.

And then how do you use collateral? Those are two really good questions. So it's not an investment. So because it's life insurance, because it's under contract law and because there's some built in guarantees, there's no risk. Like when you think of an investment, there's risk. And the definition of risk is your chance of loss. Only in America do we say things like increase your risk and you get a greater rate of return. Increase your chance of loss so that you could get a great, that's okay, maybe I need to go back to school. But so that's the first. Like that's why it's not an investment, because there's built in guarantees. But how, like a lot of people ask, okay, what is the rate of return that you can expect over time? Now there's built in guarantees, but when you add in the dividend and when you add in all the ways like long term of where this can grow to it, you're going to look, you're going to get anywhere from like a three and a half to four and a half percent tax free. What we call internal actual rate of return, meaning we factor in the fixed cost of insurance, we factor in all those things and you get somewhere 3 to 4%. Now people will say, oh that's not that good. And my Question to you is what savings account right now can you store capital in? It gets anywhere close to that, then the savvy person will say, wait a second, you said that life insurance, was it grew tax free. Is that 3 or 4% the tax free rate? Correct. So in the savings account you have to factor in taxes which then bumps up this 3 or 4% to like 5 or 6, depending on where you believe taxes are going and where they are now. Then there's, that's. And you're not including fees, so you're actually getting a taxable equivalent to like a 6 or 7%, which by the way, Kris outperforms, I would say most stock market investments over time. So you get a really great place to grow your money. But here's the cool thing is the life insurance contract allows you to collateralize your money. And if you're into real estate, you know what that means. It's like you don't have to use your money. You can put up your cash value in the contract as collateral and use the insurance company's money at cheap rates, usually 5% or lower. And I call that the control cost. So as long as when you use that activity and you're paying 5%, your activity needs to earn you more than 5% for it to make sense. Now your money and your life insurance is continuing to grow. Now another savvy person will say, is there arbitrage? And the short answer to that is usually you're not arbitraging your money in that year, but going back to efficiency. What system out there is allowing you to continue to save money? And every single year you have an ever increasing volume of tax free growth increasing for the rest of your life. By the way, not stopping at 65 like this is going to grow the rest of your life while also giving you access to capital to, to take advantage of opportunities.

Yeah, exactly. Yeah. And that's, you know, that's a great, that's a great way I talk about it in my book. I talk about using it as your opportunity fund. I rewrote the book, I added this chapter on it and you know, put the money in here. A lot of people I asked, we did a webinar, it's on our website. And the question, the first question I said is, here's my question to you. What are you doing with your money in between deals? And a lot of people, like you said, some people are putting their money in the stock market. And I want to revisit something you said because a lot of people that are Listening are going to say, oh, no, no, the stock market over a long period of time gives you like a 9 or 10% rate of return, not a 6 or 7% rate of return. However, if you look at the dowbar studies, so this is a company that actually studies the actual returns of investors. The actual returns of investors are typically a couple percentage points lower than the stock market due to investor behavior. And that doesn't take into account fees. So if you say, okay, you're going to pay, maybe you're going to pay your investment advisor a percent, you have to shave that off. Now, I will also say that if you have a good investment advisor, they'll help keep you on track during those tough times. So you don't have that erosion. But if you take your average investor, it's losing a, a couple percent according to Dalbar, and they're losing a percent maybe just in fees of the mutual fund, that's 3% less. Now you're down to that 7% rate if it's taxable. Well, now you're right down to that 4 or 5% level. And then you can say, oh, well, it's in a qualified plan. Well, let's see. If you need that money today and you're 40 years old like I am, and you need them out of that qualified plan, you got to pay a penalty. So you don't have that control. I think that's a great thing. So then the second part of the question, Caleb, and you mentioned the arbitrage and this is what we've done so successfully explain that. And this is really at the core of the, in my opinion, in my words, the end asset.

Yeah, love that question. I just want to go back. The Dalbar study is really interesting because over that long period of time, you look at the average or actual rate of return that S and P would do, and then you look at what investors actually got during that time and it was less than 4%. And that's like, man, I wonder why. And that's just something to ask a question about. But going back to the arbitrage question, the reason why the market and the and asset shouldn't even be compared is the market is an investment. So at the end of the day, when we look at our process, it's like, whatever you use, your money should get you closest to the result that you want. So if you're listening to this and saying the stock market is my way to do that, awesome. You can use the and asset and do the stock market at the same time. But I would really encourage you what is that activity? And it might be a business, real estate or other things that you need to do in your life. And so the difference in the arbitrage is in the market. Your money can't be continuing to grow and you borrow against that. Who would do that? Banks might give you a percentage of your stock account, but they're not going to give you dollar for dollar in your brokerage account. And there's some risks there because what if the market drops and so margin.

Stock market margin calls. That's called a margin call. Yeah.

Right. And so what's interesting is the market is, is definitely like the vehicle that you can invest your money in. But remember, your dollar's doing one thing. It's hopefully growing.

Yeah.

In your life insurance. When it's structured properly, your money's gonna grow the rest of your life and you have control and access to using insurance company's money up to the cash value that you have. And so they're just two different assets. The reason I love my book name the and asset is if you think about where you put your money, a lot of the time it's or in a savings account or it's somewhere else. It's in the market or it's not. It's in this investment or it's not. The and asset just wipes everything off the table by saying you can get a better rate of turn and you can get that you want real estate, you can do the and asset and that you want to do option trading. Great. Do this and do what you're currently doing and that over time efficiency will say if you're a good investor and if those activities aren't all fail, you're going to be way better off because now you have a dollar doing two jobs rather than just one.

Yeah. And look, we got that right now, my wife and I, we have money that's in our insurance policy and then we've taken a collateralized loan and it's invested in multifamily real estate deals which are kicking off. Let's just say it's kicking off higher percentage returns on an annualized cash basis than the numbers that we were just talking about. So it really is in two places at once. It's pretty amazing.

So people listening now, Caleb, in our age group and in our 20s, they might be thinking this sounds awesome. But then they hear whole life insurance and then they think, oh, life insurance. Isn't that for when I'm a bit older? You know, when I'm more established, once I'm building out my family further and all of that. What would make this a good fit for someone in their 20s? And how would you describe it to someone who hears that whole life insurance and then they get a little unsure about it?

Yeah, great question. I think the first thing is this is not for everybody. If you have a ton of credit card debt, if you can't save money right now, I wouldn't necessarily say the and asset is going to change your life. This is for people that can save $10,000 or more. Now again, the cool thing is it's not like you've locked that money up. If you understand the rules of the game, you can cash flow that through your policy. So number one, I would ask the question, does saving $10,000 a year or more, if you can't do that then, then still get my book, I'll do a plug. But like don't like it might not be a realistic strategy for you right now. And there's other ways to do like a preplan to set that up for when that's the case. I will say you can't think about this like traditional life insurance. Traditional whole life insurance is a very poor place to put your money. Big premiums, no access to money, not flexible, takes forever to get cash and usually is disincentivized to even borrow against your money. It's a really awful place to put your money. What we're saying is do you work with the right person, you have the right company if it's structured properly. Remember reverse engineering how much money you put in for the ratio of an actual insurance that you're getting. You really just have to think about this like a high cash value savings account that is going to give you tax free competitive growth long term. And so I will say this, I know people are using my book and maybe not doing the best thing on the back end. And that's why it's important to work with people like yourself, people like me, people that actually know what's going on. And that's what I would say. So I'm not telling you to go to your agent or your financial advisor and say set this up because you may be disappointed. I'm saying if you meet the criteria, work with someone that knows what they're doing and it will by far be the best place that you can save your money.

Yeah, that's a great point. Like I was, I worked for State Farm 20 years ago and when I, when I learned about this strategy I talked to a qualified agent that said hey I can, I can set this up. This is how we're going to do it. We're going to, we're going to minimize the insurance, we're going to maximize the amount you can put into the policy, which is like you said, it's reverse engineered, it's backwards.

Right.

Compared to a typical whole life policy. I called my State Farm agent who I have my other lines with, and he said, oh, we can do that. And I explained it to him. He said, oh no, we can't do that.

Oh, they could do it. It's just not very good. It takes about 13 years to even break even. And so, you know, State Farm's great. And I wouldn't necessarily say that they're the number one provider for this special type of contract.

Yeah. And it's again, it pays to make sure that you have, you're working with a professional that understands exactly how to set this up.

Yeah. And so you had mentioned and going along with what Chris said, some of these companies have been around that you mentioned in your book since the 1800s, like before the Civil War even, some of them. And you also go further into what Chris was saying about how most insurance agents as well as financial advisors are not incentivized to sell these policies because the fees are so low. And one of your 16 points that you hit on is super low fees. So to someone listening who's wondering why these companies would do this or how it really works, could you outline how they work exactly and the reasons that they choose to focus on these policies?

I've done a lot of interviews and that was one of the best questions I've ever gotten because a lot of people don't go in that deep. So thank you, Caleb for asking that. Life insurance is really unique because you get. So there's two type of life insurance companies. You have a stock company and you have a mutual company. And mutual companies are kind of like the credit union. When you buy into that, when you create a contract, you have ownership of that. And their mission as a company is to stay. They're thinking long term. And they not only want to support you with your current cash flow needs like your living benefits, but most of them are in to make sure that they can pay when you pass away. Because these are permanent. They're not like term insurance that 98% don't pay out. Like they permanently have to have, have a system where they can play the long term game. Now what's interesting is life insurance companies are the only financial institution that are playing two games. Game number one is their interest rates. And they're investing, so they're investing in real estate, they're investing in interest rates, they're investing in other things to grow your money. But they're also hedging that with mortality. They're able to know on large scale when you're going to pass away and they're able to take their reserves and also build in and become profitable there. All these insurance companies, by the way, they sell other products which are extremely profitable and guess where that profits go. And so when you are able to balance rate of return and mortality, you have the perfect hedge. Whereas most companies are just on the upswing of growing assets and they can't hedge it with anything. And so insurance companies again have been around. They started by insuring people's crops. And I know you're in your guys's book, which was really well done by the way you talk about different case studies. Walt Disney, Ray Kroc. So people have used it in the past. If you look at over 3,800 banks in the US alone have their tier one assets in what's called Boli bank owned life insurance. Every Fortune 500 company has some form of coli corporate owned life insurance. You look at presidents from Donald Trump to I won't, I'm not saying that he's going to be our next president, but Joe Biden as well. You take pretty much a lot of people in Congress, they have these special type of contracts. And so why? It's just because it's an amazing tax tax loophole legal and it's been around for a while. But these institutions have really continued to play the long term game. And their whole deal is we're going to invest and get your money growing. But since you have part ownership in this, if you want to use our capital to do things that you want to do, we'll give you guaranteed access to that. Because another question that is asked is how can they give a guaranteed loan and not require you to pay it back? Well, going back to that hedge that they have, rate of return and mortality, they know that you're going to die someday, as maybe bad as that sounds. So they know that they're guaranteed going to get their interest someday. And because they're playing the long term game, you're either going to pay them back or you're going to die. And if you die, they're going to take the death benefit, which is a liability on their, their balance sheet and deduct what you owe them and pay your beneficiaries, your family, your foundation Wherever that money's going, the difference. So it's very, very powerful because other institutions, because they don't have that hedge, need to require you to pay that back. Need to require and like they control the terms. Well, this contract gives you control over the terms. People are like, that sounds too good to be true. Well, these institutions are playing the ultimate long game. And when you're playing the ultimate long game, you can make rules that don't necessarily make sense. And quite frankly, no one can compete with them because unless you're hedging both sides, mortality and interest rate, you can't make promises because it could fold. That was a long.

I think, you know, when you look at it, this is the, you know, this is even safer place to have your money than the banks in a lot of ways. You know, bank account is insured for $250,000 if you have it in there.

Right.

If you have your money with a life insurance company, you could have as much as you want with that. What's interesting is, I don't know, do you know of any life insurance companies that failed during the Great Recession?

Gail? Not mutual life insurance. There was two stock companies that failed during 2008 and they got bailed out. But they were doing. They were not. Don't even put them in the same category as this. The big difference between life insurance and banks is banks work off a fractional reserve. So for every dollar that you give a bank, they can loan out like nine. Insurance companies have to have a dollar for dollar reserve. And in most cases they have one, like 1.8 cents for every dollar that they have to pay out. It's insane and it's so safe. And it's because they're not an investment. They have guarantees that they have to be able to deliver on.

Yeah, and I'm a numbers guy, so I'm a nerd. I look at this, it's like this makes perfect sense because, you know, it's based on mortality tables, it's based on the law, large numbers. It's all math. And if you throw a few million people in these pools and you insure them, you may come out a couple percent different here or there, but that's where the dividend comes in. I don't know, do we address that? Can you share with the audience where the dividend comes from on these policies?

Yeah. So dividend and I love this, by the way, because we're going in deep. But the dividend is essentially a non guaranteed extra payment that is essentially known as a return of premium. So it's also tax free. That's kind of like the tax code that they use to make sure that you don't have to pay taxes on it. And it's essentially if you have part ownership of a mutual company and they're profitable at the end of the year, they need to pass on those profits to somebody. And this is a way to get that tax free. And the dividend is made up of investment. So the companies, I mean, these companies have billions and billions of dollars. So any like skyscrapers or there's a good chance that there's an insurance company that finance that. They're just, there's. They have a ton of money. So you look at the, the interest that you earn in investments, the mortality credit because of all these other products, like they're, they're making a profit off of that. And then the, and then you subtract that from the cost of doing business, the cost of home office, the cost of paying your salespeople, and that's what you get the dividend. And then a portion of that goes into reserves because they're conservative, and the rest gets passed on to the policyholders, which are owners. So that's how dividends are calculated and used.

Yeah, no, it's terrific. And I think we talked on our. I was on another podcast yesterday, so I might be mixing some stuff up, but I talked about how these whole life insurance policies are a lot like real estate. So you start it, you start the policy. The first year you're paying, a large part of your premium is going to the cost of insurance. Just like when you start a mortgage, a large portion of it is going to interest. And then over time, a big portion of your mortgage payment is going to pay off the principal. Over time, most if not all, at some points in history or in the later years of the policy, most if not all that premium is going to increase the cash value of the insurance. And then the dividends are kind of like if you have an investment and you take out a line of credit, or you take money out of the investment, or you're getting rent from the investment, it's not taxable. It's pretty wild how that works. So you're getting equity in your life insurance, you have the ability to pull money out. If you get a quote unquote return of premium, it's not taxable. It's pretty. Again, it's when you line it up with real estate. People that understand and know real estate, I think they'll understand this more than if they try to think of it, you know, like a term life policy, for instance.

And I bet we're not a huge fan of the word retirement, but we have a retirement crisis on our hand because. Yeah, okay, so it's like a swear word. It's also a swear word on my show, by the way. It's like the reason is increasing taxes because by the way, taxes have to go up. Especially if you look at what Congress is. It's insane. Go look up the US debt clock and like get depressed for 30 seconds. Okay. And then, and then the second thing is principal all over the place. That's why we have super small withdrawal rates. Cool thing about and asset is we eliminate tax risk and your principal is guaranteed to grow and not decrease. So you unlock whether it's real estate, stocks, annuities, pensions, like any kind of strategy that you can imagine the and asset helps you enhance your cash flow later. And so that's just another benefit along with all the things that we talked about. And when you start adding that up, you go, this is a no brainer to start saving my money because it just unlocks everything else that you want to do in your life.

Absolutely.

Caleb, it's been great having you dive into these details coming out a little bit now into the bigger picture in your book. You open with saying you need to know what your why is. I think you close with it at the end as well. And we sort of hit on that earlier in the show. You know, it doesn't matter. You know, if you had $10 million in the bank, what would you do? And if you don't know that, you know, the whole idea of if you're not happy poor, you're not going to be happy rich, all of that. How did you find your why? And if someone listening is struggling to find their why or maybe redefine it, what advice would you give them in finding their own individual, unique why?

I, from a very young age was terrified of regret. And I didn't want to do anything and look back on my life and regret it. And I read the book seven Habits of highly effective People. And the second habit is thinking with the end in mind and thinking about you at your funeral and what people would actually be saying about you. And I would just encourage everyone listening to this to take a step back and say, like, what do you want your life to actually be about? A quote that rocked my world was by a guy, Andy Stanley, an incredible communicator. And Andy Stanley said, the value of your life is always measured by how much of it was Given away. No one is going to be talking about my book at my funeral. No one's going to be talking about how much money I made. No one's going to be talking about how smart I was. They're going to be remembering the relationship aspect, how I poured into their life in a meaningful way that helped them see something that they didn't even know was possible. So how I articulated my mission statement, I would encourage everyone to do this exercise and I actually have it on like printed out and it was actually made it. And then someone for a gift made me a plaque and it says to help people see and reach their highest potential. I wake up every morning knowing that people have so much to give. And yet the sad reality is many people are unable to do that because of a lack of knowledge around how they see themselves, how they use their time, how they use their talents, how they use their money. So I'm not going to say that I'm going to solve the world's problems, but I'm going to say if I can help people show up more powerfully around this money issue, it can help them do things and ultimately serve more people. And so that's, that's, that's at what really spurred me on and I realized that it does not matter. Anything of what I'm saying does not matter if you don't know why it's going to make an impact like why it matters in your life. And so I would really encourage everyone listening this take a step back and reflect on, on that. And then I saw one of our founders die of cancer last two years ago. And that also gave me perspective because I realized that life is so short and I want every moment to go into serving others and actually lifting other people up.

Yeah, thanks for sharing that. I'm sorry for your loss. We've all experienced that in some way, shape or form here on the show. And then I love what you say there. I say it a little bit differently now as a parent, I start to relate things to my sons. And what's interesting is I found that a lot of things I put in my book, if I can explain it to my 8 or 10 year old, then it probably makes sense to a lot of people out there. And the first step in the next low income strategy is make more money. And what I tell my sons is that if you want to make money, you need to find out how to help as many people as possible. I think I came from Zig Ziglar, but Caleb, we've really enjoyed having you on the show sharing your perspective, sharing what I consider to be an amazing story for you at a young age. I highly encourage everybody to get Caleb's book the and asset. And Caleb, do you mind reminding the audience one more time where they can find you and your book and more information about better wealth.

If you go to betterwealth.com you can get my book and we're pretty much giving it away for the cost of shipping and we have some other videos and resources that's betterwealth.com and you guys are incredible. Your questions were I really appreciated the deep dive and again it was a true honor to be on your show.

Awesome. Well likewise. We loved having you on and if you want to get a copy of our book you can go to nextlevelincome.com book we're doing a giveaway during the COVID crisis here so you can get our book for free as well. Thank you for listening. Caleb, thanks again for being on the show.