Ep 33 - How to Create Generational Wealth Part 2

Hey everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.

Podcast, Freedom through Passive Income.

That's right. Today's episode is called Generational Wealth Part dos. And so we did a. Obviously there was a part one. Make sure you go back and watch that one if you have not watched that one already.

We're talking about investing in your kids financial education. So you have not watched that one. That was super powerful.

Yes. And so we're going to start this episode with talking about preparing to pass it down, which life insurance, wills, trusts. And in that other episode, you know, you'll see the stack of paper that I had because that's exactly, exactly what we're doing right now. We're setting up life insurance. Well, life insurance has already been set up, but we're setting up wills and trusts and bears and. Oh my.

And what he's talking about there is actually, we'll probably put this in the description notes. We did a short eight minute of the investing Kids financial education, but then our team wanted us to do an entire podcast of it. So we actually combined both parts one and part two and did. It was probably about 45 minutes.

Yes.

We really kind of settled down a little bit and really talked about it and talked about what we were doing. We brought all of our trust paperwork in and just kind of, you know, we just, we settled down and didn't go so fast. So if you want to hear that one, we'll link to it in the description. So when it comes down to passing it down, estate planning is always about preserving wealth and being able to transfer as much as possible. Right. To whomever it is that you want to pass it down to. For us, it's very much our family. Of course they're going to get some things. We've got life insurance policies for our personal for our families, but we also have life insurance policies for business. And a lot of the things that we're creating here are actually going down to our team and that's what we're going to talk about here.

Somebody's getting the rock.

That's for his family.

I'll make sure I put a picture of the rock in the video. That's awesome.

Hilarious. So we're going to talk about life insurance here real quick. There's two different kinds of life insurance. Term life insurance, which is you can get a five year policy, 10 year policy, 30 year policy, whatever it is, it's very, very cheap. That's why a lot of people will get term Life insurance. There's also whole life insurance. Whole life insurance, it does many things for you. It's permanent life insurance. So as long as you're paying on the policy, then you have life insurance. It's guarantees future insurability, meaning that if you have a disease or something comes up later, they can't change your policy at all and your premiums are stuck where you got the policy. So doing it at a younger age, the youngest possible age, when you're in good fit physical condition is the best, even though that's not when you're thinking about it. But it's the best for two reasons. You guaranteed your insurability before anything happens. You, you've locked in low rates and you start building up cash value. So that's another thing about whole life insurance is it builds up cash value that you can borrow from. It's building tax, you've got tax advantages in there, so it's building tax free. You can borrow from it while it still keeps compounding. And there's again no tax implications because it's a loan. There's a lot of benefits to this. And sometimes depending on the company, then you can also get dividends. So it just kind of depends on who you're working with.

But if you're watching this right now on Facebook, LinkedIn, yes, MySpace, whichever, YouTube, now's your chance, don't smash the like button and the love button again. This is the help what the algorithm of our video is. But click that button right now again just let us know that we're doing good.

Okay, so we're adding some value to your life right now. Yeah, so I was going to say that this is good for. We've got personal life insurance policies, we've got business life insurance policies. And like I said, it's good for kids too. It can't be canceled unless you stop paying some term life insurance policies. They can cancel it on you. So that's another thing. And then become your own bank. If you want to learn more about this type of policy, Google, become your own bank. There's lots of people out there that talk about it. We're not affiliates, we're not life insurance people, we just know a lot about it. Because I used to work in the life insurance industry and I loved, I fell in love with whole life insurance. And it's what I talk about all the time because it's a great wealth building tool. Allows your kids to do so much. Borrow for college, borrow for a car, whatever.

Look into that disclaimer though. We're not attorneys, we're not financial advisors.

We're not life insurance salesmen, vegetarians, CPAs.

Yeah, yeah. We're none of those things. Make sure you consult your own of all of those.

That's right. So something that we did too was the disability piece.

Yes. And again, I completely forgot about. Forgot what we were talking about this. But this was a insurance set up insurance. Life insurance set up for disability.

Yeah. It's like a rider you can put in your policy. I think what we did is we just stuck into our estate planning.

Right. Because one of our private lenders said, hey, what happens if, you know what, you guys get hit by a bus? Yeah. And you know, well, it's pretty drastic. But anyway. But you're still alive.

Yeah.

You know, you're not dead. So there's no life insurance involved. But you can't work.

Yes.

You know, and so it was something that we didn't think about. That. Yes. And so we set up those. Both of us as well.

Yeah. And so these are all things that we didn't necessarily think about and we were actually getting older and we should have been thinking about them. But it took a private lender to start going, hey, what happens here, here, here. So we started really protecting ourselves, protecting the people around us. Because if you truly do care and love the people around you, you want to take the time to actually do this.

Right.

We are so excited that we have gotten to the point because if something does happen to us, We've got over 40 team members in our businesses right now. And the last thing that we want is for the businesses to go crashing in some way, shape or form because we didn't have all the tools in place to be able set it down. So we did succession plans and things.

Right. Because in my mind, I'm 20 years old still.

You are a kid. That is 100% true. So again, estate planning planning is preserving the maximum amount of wealth possible as you pass down. So the last thing we're going to touch on real quick is succession plans. Those are things that you can put in operating agreements when you have a business. What's going to happen to that, that company, that llc, if you die? It's also something you can spell out in your will and in trusts. Not everybody has both a will and trust. If you're going to start with something, at least, at the very least, do a will. But trust is in our opinion better. It's just more expensive. And that's something I forgot to say during the whole life, term life. Even though I like Whole life better. It is more expensive. You have to be doing it for the right reason and understand exactly how it works. Talk to somebody that can share all that with you. But the will is going to spell out everything that you want handled after you die. The trust is going to do the same thing. It's just going to give you more control and it's going to avoid probate. So you're going to want to talk to somebody about what the differences are, what you should do. We personally in that last video talked about the fact that we had a will about 20 years ago. We went to update it and we started talking about estate planning and trust and things like that. And we felt like for us it was more important with everything that we have these days to go ahead and have that trust.

Yeah. Our family members will thank us later.

Yes, yes. So get it now. Talk about this stuff. Right, right, right. Right now. Generational wealth is so and so incredibly important. And the very small things that you do that change from what your parents did, make a difference and an impact. And see that, right? They're watching you because they look up to you, they idolize you, and so they're learning from you. So protect them, set time aside and show them that this is a priority.

And like you wrote right here, we are not promised tomorrow.

That's right.

So make sure you do it today.

That's right.

Boom. Again, we like to keep these short and sweet. Make sure you do. Check out our Facebook group. Facebook.com group Freedom Through Passive Income. That's right. We're also on LinkedIn. Excuse me. There's no cool URL, so just go to the search bar and search for.

Freedom through passive Income.

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Nothing on the show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on the show are not guaranteed. All investment strategies have the potential for profit or loss.