EMERGENCY RALLY

Okay, I should be live on YouTube at this point. And welcome, welcome everyone. We got two things going on right now. I've got a live audience on Zoom, so anyone that follows the YouTube channel, you're subscribed to my email list, you can actually jump in the Zoom meeting with me and I'll be able to do some Q&A directly. Then there's those who are going to be tuning in on the YouTube channel itself, and I will see your comments as well in the comment section. All right, reason why I'm doing this, I titled this an emergency rally on the YouTube channel. Main thing that's happening right now is— and let me see what's going on here. Actually, it looks like— okay, yeah, we're good. We are good. I see about 7 people in the house on live on the YouTube. All right, so everything's working good there. So let me get right into this. I want to give a major shout out to two people. One is a gentleman, his name is Travis Peters. I consider him a, a brother in Christ. He has a phenomenal YouTube channel and has equipped me with the right information as it pertains to my faith how I operate, and what I'm getting ready to share with you right now. The reason why this is an emergency rally, and I'm taking a few minutes before I get into my actual lesson this evening, is earlier today, one of my clients, her name is Brenda, I was speaking with her nurse, and it is The diagnosis that she received from the doctors that we are in a stage 4 cancer position as of right now. There are cancerous tumors in the uterus which has spread into all different areas around her body, mainly like, I think it's getting into the bones, into liver, potentially the lungs. So this has progressed really fast. Um, she went through a surgery about a month ago, and ever since then, the health has been declining. And so we've been putting together a financial strategy to reverse this process, to reverse the cancer, to eliminate it from the body so that we can heal and continue on with her life. So after that phone call, and during the phone call, I declared to her, and we began to shift our language to state that in the name of Jesus, in the name of the Father, the Son, the Holy Spirit, that you are already healed. And we need to keep the faith on that. And then moving forward, we're going to do the works that are required. So we're going to take all the logical resources needed whether that's doing treatments in, out of the country potentially, oxygen therapy, red light therapy, you know, all the different holistic treatments that are, that are out there. We'll leverage any and all resources provided through her health insurance and any and all that's not covered through health insurance because of all the tremendous work Brenda and I did over the years. We've paid off a ton of debt, we've saved, we've invested, we've shifted assets, we set her up for a perfect retirement plan. And now that's put us in a position where she can spend the money on all different types of, you know, holistic treatments to reverse this. So there's, there's a dual approach happening here. We're doing all the things to heal the body that the body physically needs to heal itself from stage 4 cancer. Then spiritually, we're calling upon the greatest physician in the world, the Father, the Creator, calling upon him to heal the body from within. And in order to do that, we must speak life. Not death. And we must move with no fear, no doubt, and no worry. Only conviction in the finished works of Jesus Christ. So with that, I decided as a leader, as a man of faith— Brenda is a woman of faith, that is a sister in Christ— and as her brother in Christ who is a leader who runs a YouTube channel, who knows many people and other many people of faith. You can comment if you're a person of faith, you share the same faith as I. I figured, hey, why not rally the troops? Let's all come together and we're gonna pray over Brenda that she heals from stage 4 cancer, that it gets completely reversed, and that she continues to live her life in alignment according to God's will. And with that, giving a shout out to Travis Peters again, who's someone who is very well versed in the word, in scriptures, and helping me access the resources, access the promises, access the, the covenant as it pertains to healing. So there's a foundation that he provided for me. The foundation says Jesus already carried it. Okay, and this is something we're going to settle in our heart because everything else stands on it. It is God's will for you to be well. He is a good Father, and a good father does not put sickness on his child. Jesus went everywhere healing all who were sick. He never once told anyone, "Stay sick. I'm teaching you a lesson." Healing is not something you have to talk him into. It's already yours in Christ. So these passages that he provided for me to read to her, and also I'm sharing with the community, is that we can all equip ourselves with the right word and apply that into this situation. And let me just say this for all of my clients watching or maybe catching the recording: if you're going through something like this in your family I want you to know when it comes to my team, which every one of us are believers, we're gonna go above and beyond the logical stuff that we need to do as it pertains to your finances. And we're also not gonna operate from the position like we need to do things with your finances to get ready for death. That's not how I'm operating my practice. I'm operating from the standpoint of it's already done. God already healed you, and we're going to apply the resources that needs to be done for you to do the work, because faith without works is dead. So we need faith and we need to do the works involved. So myself, my team, we come together, all hands on deck, when it comes to our people that we serve one-on-one. If you got someone in your life that's going through something, needs healing, I want you to know that this channel, this community, is another place that you can access, and we can rally people together to pray over you. So that is a big thing here. So let me dive into some scriptures here. We got Isaiah 53:4-5, says, surely He has borne our griefs, sicknesses, weaknesses, him stricken, smitten, and afflicted by God, and carried our sorrows and pains. Yet we ignorantly considered him stricken, smitten, and afflicted by God, but he was wounded for our transgressions, he was bruised for our guilt and iniquities, the chastisement needful to obtain peace and well-being. For us was upon him, and with the stripes that wounded him we are healed and made whole. So that's Isaiah 53:4-5. Matthew 8:16-17: He drove out the spirits with a word and restored to health all who were sick, and thus he fulfilled what was spoken by the prophet Isaiah: He himself took our infirmities and bore away our diseases. 1 Peter 2:24: Who himself bore our sins in his own body on the tree, that we, having died to sins, might live for righteousness, by whose stripes you were healed. And by his wounds you have been healed. Okay, so this is Old Testament and New Testament coming together. And we got another one, Corinthians 1:20: For all the promises of God in him are yes, and in him amen, to the glory of God through us. Every promise of God— this is Travis speaking— every promise of God is yes, not maybe, not if, is not if it's his will, but yes. And amen means so be it. So when you speak his word, you are sealing his yes with your own agreement. This is the language that I'm going to be speaking with my wonderful client and friend Brenda every time I speak to her, and I'm going to remind her, and this is the language that she's going to continue to adopt in her faith that We're going from, "If it's God's will, let it be done," to, "Lord, I want to live. This is the healing I call upon, and I already believe you did it for me. Amen." seal that, the healing begins. The healing is already done. Now it's just seeing it come into fruition by doing the works that is required. And the beautiful thing is that in terms of works, God did all of it. So now we get to rest in the finished works of all of that. I got a couple more scriptures I'm gonna go through here. Again, Travis Peters provided me with an extensive like, call it a game plan, like a playbook that we literally can implement in time of fear, worry, and doubt. Imagine getting a diagnosis. You have stage 4 cancer. What do you do? What do you do? Who do you talk to? What people do you surround yourself with? And I believe these are all factors that can change a result. So there are some things I was speaking with Brenda about, and I said, okay, well, number one, you're not gonna have to stress about money because you got me and an entire team, all hands on deck, that's gonna help you with the financial part of this season and beyond. So that stress off your mind, wonderful. That's what you get for investing in yourself and personal development all these years of consistency booking calls, showing up, doing the work. That's your reward now. You now have a whole team backing you up. So that's a stressor you don't got to worry about. You're a woman of faith already. So now what we have to do is make sure that the devil is not entering into this environment, and he can do it through other people who sow seeds of doubt. Right, where do we get our influences from? People, our surroundings, and God. So we want to make sure that our environment and the people we surround ourselves with are in alignment with God's will, which is for you to be healed, and that we ourselves are listening to the Father first for his guidance, because he's the greatest physician, the greatest doctor. He is a healer, and upon many other things. Amen. So now my job moving forward is say, okay, Brenda, I want to make sure I get myself to make sure my language is not using safe Christian language or safe Christian things that people say when things like this happen. I'm pretty sure we all have met that person or been that person when you don't know what to say, and you might lead with, "Let's pray for healing," and we might So that's the good part. We'll start with that as believers. Let's pray for healing. And then we might throw in, if it's God's will for you to be healed, let it be done. Or if it's God's will that you're not to be healed, well, then that's God's will. And as far as I know, I don't know a scripture in the Bible that supports that claim, that statement. I don't know where it is. If you know where that is, please find it for me. Until then, I'm 100% confident nowhere in Scripture are we gonna see, "If it's God's will for you to die, then let it be." Yet it's sort of like a safe thing to just say in the moment because we don't know what to say. Because when it comes down to it, When we don't know the Word, we don't know our constitutional rights. We don't know our covenant, the New Living Covenant that we live in. When we don't know that, it leads to doubt, worry, fear, and ultimately a result that we don't want. So if the result is I want to live and I want to reverse stage 4 cancer, which I know this is in her heart. I know this is what she wants because she has more to do. God doesn't need her in heaven yet. There's more for her to do here. So with that, we have that mindset moving forward. We got to make sure the people around us are, are not sowing any sort of doubt, any sort of uncertainty. We're just going to use God's word. So continuing on, we got Matthew 8:2-3, this is the King James Version. Lord, if you are willing, you can make me clean. Then Jesus put out his hand and touched him, saying, I am willing, be cleansed. Immediately his leprosy was cleansed. Acts 10:38. 10:38, God anointed Jesus of Nazareth with the Holy Spirit and with power, who went about doing good and healing all who were oppressed by the devil, for God was with him. Okay, and we got John 2:2, beloved, I pray that you may prosper in all things and be in health just as your soul prospers. This is awesome stuff, and I have to go through all of this. So now there are tons of scriptures that talks about God's healing promises to, uh, for, for Brenda here and then myself that I'm going to be reading. You know, in Exodus, God says, I am the Lord who heals you. I will take sickness away from the midst of you. All right, in Psalms we got, bless the Lord, O my soul, and forget not all his benefits. Forgive all your iniquities. Who heals all your diseases, who redeems your life from destruction, who crowns you with loving kindness and tender mercies, so that your youth is renewed like the eagle's. Very interesting. This is beautiful stuff here, and this is a ton of material that I definitely can't get all in a session here. But that is what I wanted to share with you all in, in this community. And again, for everyone who is a brother or sister in Christ, that I ask that you pray over Brenda with the language in your prayer that it's already done. That she's already healed. And we're agreeing. Our agreement, our covenant agreement is we are petitioning the Father to heal a sister in Christ. Done. Amen. That's our prayer. Anyone that wants to connect with me, email me, have a conversation, we're going to— we can pray together., and I'll, you know, provide updates. And like I said, anyone in the community, client or not client, got someone in your family going through something, they're a person of faith, or even if they're not and they want to be, and they want to be healed, that you can access this community and we'll come together just like this. I've got 14 people on Zoom and we got 11 people on the livestream. And all I titled the video was Emergency Rally. So just know that hundreds of people will watch this and that can get shared. And again, we're all coming together, so we're just eliminating any blocks, any obstacles or challenges. And now Brenda has that support, spiritual support, financial support, community support. God himself. With that, we can now transition. Just wanted to share that with you all, and I appreciate you listening and taking the time. The lesson that I'm going to be giving this evening is about cash value life insurance and how to leverage the loan option in a properly structured permanent cash value life insurance policy. We're gonna be focusing on whole life, and I'm just gonna share with you rules that I've played by for 8 years and how I've taught all of my clients that are funding a life insurance policy. So you're already contributing to a policy and you're getting ready to use it to either pay off debt, make an investment, do something with it, finance something. And I want to set a, a rulebook, a playbook for you to follow. It's a framework. You can go against it, it will have some consequences, but if you follow the framework, it leads to success. It protects you from yourself. It protects the assets that you're that you have in acquiring, and it ultimately reduces stress when you're applying and stacking different assets and leveraging and different things like that. So I'm going to provide a case study here. We're going to take to the whiteboard, provide you with a case study to give you an idea on how I think the, the rules I've implemented over the years, and we can look at some real numbers. So on the left-hand side of the board, we have the leverage rules. This is what I, I go by and live by. This, this apply— these rules apply whether you're using a line of credit, whether you're using a 401, whether you're using a whole life policy. Same rules apply. So starting with your 4 major numbers, gotta know your numbers first before we implement a strategy. So here are the 4 major numbers of an individual making $7,200 a month. Expenses are $6,450, total debt $240 grand, with a cash flow of $750. That's what we have before implementing any strategy. This is where we're starting to work together. My Rules for leverage are: I take cash flow times 10, uh, cash flow times 12. So your cash flow in a year, monthly conservative cash flow. This is a monthly conservative cash flow, $750. We overestimated on expenses, and then we typically underestimate income. For example, if you're a W-2, we'll just use your base pay if you get commissions. That's how we'll base it off of, or we'll use a low estimate on commissions. So $750 times 12 is $9,000. That's our first metric to determine leverage. Now, CV stands for cash value. So whatever tool I'm using again, whether it's a line of credit, whether it's a 401, whether it's a credit card, whether it's a HELOC, whether it's a whole life. In this example, we're using whole life. Okay, can you all hear me and see me? Michelle, Andy, Philip. I'm back. Welcome back. Thank you, Andy. Virginia. Hey, how weird is that? How weird is that? I just did a whole prayer petitioning the Father. And the internet goes out. Tell me that's not weird. I think I'm back live on YouTube. Let me know on YouTube if you're tuning in. I see 6 people live. Let me know if you hear me nice and clearly. Andy, you said you said a prayer to not let this happen and you pop back up. Yeah, to me that's very weird. I'm in South Florida, there's no rain, there's nothing, weather's fine, and I just saw the power go out. I'm like, since when? That is so weird. Well, we're going to continue because we were getting into the details. So I'll kind of recap again now that I'm back and I got you all back here. And I thank you all for waiting patiently because there's still 14 people on the Zoom. Nobody dropped. Thank you. And on YouTube, Mostly everyone is back on and I'm seeing the number come back. So thank you as well. Let me do a quick recap. This is what we were talking about. I was getting into the leverage rule, so I'm not sure where I cut off at, but I'll start from the top. Gotta know your 4 major numbers. This is a case study I'm working on right now, and the theme is we're going to be leveraging the cash value in a whole life policy to accelerate, pay off some debt. But we want to know how to go about doing that effectively. So we implement these leverage rules that I've been using for 8 years now, my entire career. So cash flow times 12, in this person's case, $750 a month times 12, $9,000. Then we take the available cash value. This person has $30,000 of cash value built up, and we can either do times 2/3, so that would be 66%, or 67% if you don't like 66%, right? So either or. And that is considered our max leverage number. Ideally, we don't want to penetrate that number to make a move in case an emergency comes up in your life. You want to have additional liquidity to handle that emergency. If something comes up so that you're not putting yourself in further higher interest type debt or in a, or in a worse financial situation. So that's how we come up with these rules. Knowing what your cash flow is in a year, your projected cash flow, lets you know how much cash flow you're putting at risk before you make a move. The final rule is understanding your borrowing costs, whether you're borrowing from a credit card, borrowing from a HELOC, borrowing from a whole life policy, borrowing from your 401. Understanding the borrowing cost versus the earnings rate, or the amount of interest that you're saving by eliminating an expense like a debt. So by eliminating debt, how much interest do I save by rerouting that debt into my policy? And would that make sense? Or if I'm investing, if I'm borrowing at 5% and I'm only earning 5%, that wouldn't make sense. So I like to solve for double the cost. So if your cost is 5% and you're going to make an investment into something, I want that investment to yield at least 10% or more. Now, because we're talking specifically about whole life insurance there is a critical point in the policy which some people call it the break-even point or the capitalization period. So what that refers to is basically in the first 5 to 7 years of any properly structured whole life insurance policy when you're solving for high cash value performance is it should take anywhere from 5 to 7 years or sooner for your money to break even, meaning your cost basis, the total amount of money you contribute into the policy, you see that amount and more in cash value available to you. Once you hit that, that's the break-even point. After that point, that means every year your policy is producing a positive net yield. So if your premiums are $5,000 a year in your policy, or $10,000 a year, that means your policy earned $10,000 growth in the cash value. So you paid $10,000 in premium and $10,000 more showed up in your cash value column, plus more, say dividends. So now you're— now you have a policy that's producing new money on top of the original money you put in. Makes sense? So if we're after the break-even on this, on this policy, in this example, we're after the break-even point. So I want the earnings rate to be double. If you're before the break-even, if you're only in year 3 of your policy, year 2, in the first year of your policy, you fund it and then you borrow money out, preferably I want the rate of return, your earnings, to be triple because that's going to make up for the negative impact the policy has, right? You put money in, you're funding it, and then you borrow against it out the gate, you, you know, if you put $50,000 in a policy, you're not gonna have $50,000 in cash value. You're gonna have a lesser amount, and then whatever you borrow, you're gonna have an interest cost. So you're already kind of behind the 8-ball when you're using that type of an account. But if you're after the break-even point, now when you borrow and earn more than what you borrow, you create a positive yield outside and inside of the policy. All right, so those are all the rules, and now I'm going to give you the situation, and then we'll do some Q&A. If you have questions at any point, drop them in the chat. I'll take a look at it all. So here we have, again, this is their 4 major numbers: cash flow, Capital times 12, $9,000. We have $30,000 of cash value. We're after the break-even point, so 2/3 of $30,000 would be $19,800, would be the max amount that I would personally feel comfortable borrowing. We have a loan rate of 5.5%, so if I were to borrow $19,800 We run the math. In a year, how much that would cost of interest? That's $1,089. The dividend rate of the insurance carrier is 6.25%, and for those of you, you already know 6.25% is not what you're actually earning when we look at what's called the internal rate of return. I put a number of 2.5%. So let's say in the year that we're in, our internal net rate of return is 2.5%. So if I have $30,000 in cash value and the net growth after expenses and fees, because we're also paying for a death benefit, the net growth is 2.5%. Let's call that $750. My net cost to borrow internally inside of the policy in a year is $339 in this example. That's like my true cost because I'll earn $750, so my $30,000 grows to $30,750, let's say. And if I kept the loan outstanding for an entire year and didn't pay anything back, I'll pay $1,089 of interest. That'll get washed by my $750 of earnings, right? Because I pay the $1,089 to the insurance carrier, and then the insurance carrier credited me in earnings on the same money. As if I didn't borrow it. So we have money working in two places. The $19,000 is gonna go do something that we're gonna talk about. Meanwhile, the whole $30,000 kept growing. So now we know what our internal net cost is in a year if I don't pay back the loan: $339. Now here's the situation: we have debt, $23,500 worth of credit cards, all of which are around 29.99% with total payments of $1,000. So now you might be asking yourself, Denzel, is it okay to violate one of your rules of max leverage to go borrow $23,500 out of the policy. So that, that goes above and beyond our max leverage to get that full $1,000 of cash flow and save 29.99%. So I get to move 29.99 to 5.5. 29.99 divided by 5.5, that's a 5.4x return. After the breakeven, I'm only looking for double, at least double. Before the breakeven, if it was before, I'm looking for triple, so it would have been 15. We got 5.4. That's a no-brainer, which means these rules, we can violate it with terms. So when does it make sense to violate Denzel's rules of leverage? Here would be an example: when your rate of return is far greater than the standard, in this case 5.4x, and the cash flow gain recovered exceeds your two-thirds leverage number. So watch this. If I go from $750 a month to now $1,750 a month, times that by 12, that's $21,000. So that means if I make this one move and then I recalculate cash flow moving forward, I'm now at $21,000. Very close to— it exceeds the original 2/3 leverage and makes it more of a better opportunity, a more reasonable way of, okay, I'm willing to violate these standard framework rules because of the tremendous gain that I'm gonna get once I make just the move alone and do nothing. If I just make the move alone and do nothing, I save 29.99 over here, reroute it to 5.5, and then really, since I earned 2.5— 5.5 minus 2.5— really, I brought it down to a net cost of 3%. For the year. And that's your difference, $339, right? So if I do 19, 8 times 3, $594. So we're, you know, close to that number if it was like a true net 3% cost throughout the year. So that's where it would make sense to violate the rule of, of leverage because you're like, okay, there's a massive return here, tremendous cash flow increase here. Now we solidify it with the ongoing strategy moving forward. Like, what do we do after we've consolidated $23,500 into the policy. So let's run that. Let's say we went ahead and borrowed $23,500, which is above 2/3. We're now going to have this cash flow gain, and we have a couple options. We can take 100% of the cash flow, which would now be $1,750, and begin to repay the loan, which means you're gonna reduce your loan interest costs if you start paying back the principal month 1. So that's one option. The other option is we take that cash flow and this cash flow, not pay back the $23,500, leave that there at 5.5%, and maybe she goes and pays off more debt that she has that are at higher rates than 5.5%. So this is leverage on leverage, what we're talking at this point. So we're going to lay out two different options. $23,500 times 5.5%, her cost she knows is only going to be $1,292.50. Before, her cost was 29.99%. It was $7,000 of interest. This person here, so they go from paying $7,000 a year in interest costs to $1,292.50, and they say, okay, I'm comfortable not paying off the loan, and I'm gonna take this $1,750, we're gonna go and attack more debt to get more cash flow. Person has $240 grand, there's mortgages, there's loans, there's credit cards. So we wipe out all the credit cards, and then we're just left with the mortgage and some personal loans, a car loan I believe, and we can keep attacking that. Once we've gotten rid of all of the debts, then we can come back to the policy and begin to pay it down. So that's one route. The route that we chose was to pay back the loan. For some folks, depending on your, your discipline, your capacity to handle multiple things going on at the same time, you might entertain the idea of not paying back the loan because you know it's in a secure location, no one's coming after you, there's no required payments to make, and you can do even more damage. So you can kind of compound your savings. For others, if you like the simplicity behind consolidation— and now I, I like, I have a saying that I often tell my clients when they're making moves is with time we do the initial consolidation leveraging existing capital that we already have at our fingertips. A lot of us don't know what existing assets or capital that we have that we can borrow at low rates to knock off higher interest debts that are tearing you up in payments and interest. A lot of different moves that we can make here. This is just one of them. Okay, so this is the example, more simple approach, just taking that $1,750 a month and just boom boom plopping it into the policy throughout the year. The policy is growing. You've completely offset your costs. Right, because we— there was $7,000 of interest savings. I only pay about $1,100. There's that positive gap of interest savings, and the cash value grew by $750, let's just say, on top of you continuously paying your premium, which is included in the expenses. So on top of me paying my premium into this policy, I'm also paying down the loan with that additional cash flow. There's any questions so far, let me know. I'm gonna take a look, quick look at the questions. So we got Boss in the house, Francis. Let's see, question for you is, what happens if you don't have enough cash value to really help the debt situation? Would I just have to wait to build it up? Or would— or what would be another option, right? Great question. So let's, let's do that example of someone who has a whole life policy that they're funding. They're in the early years and there's just not a whole lot of cash value built up in there. So we'll look at other options outside of cash value. If the person— I typically look at when I'm working with clients is I'm like, do they have equity in their home? How's their credit? So many people I work with have seasons in their credit where there was a season where they had good credit, then life happened, credit went down. When their credit went down due to life events, so they accumulated debt over here at the better rates, let's say, then life happens, their credit score goes down because utilization's going up. And all of a sudden these variable rate debts start going up in interest, and before you know it, we're in a hole. So now their credit has tanked because they're in this hole. There, maybe there's some debt payments that they missed, you name it. So we're in a hole now, credit's tanked, but they have a ton of equity in their home. Or they have a $300,000 401 over here, or they have $25,000 in a whole life cash value over here, or they have a brother or sister or friend or colleague that's willing to lend them $10,000 at 0%. So when we combine all these things together, what ends up happening is we can restructure the debt. Here's another big one that I forgot about. Is— I'll just summarize it as debt transfer, where you go from personal to biz. Depending on who I'm working with, if they have a business and they have a lot of their debt on their personal, maybe we can open up 0% business credit cards to buy time free of cash flow and begin to pay off debt that way. So that's the other way I know, and then I think that covers everything, because whatever anyone else might come up with may fall under these different categories, whether it's a securities collateral loan. Maybe the person has one Bitcoin. We could borrow against the Bitcoin to pay off some debt to make a certain move. There's a lot of different ways. You want to think about what assets do I already have in this chaotic financial situation that I'm in? And what happens most of the time I work with people is that when you're in that tough financial position, it's hard to think. So this is where coaching and accountability comes into place, where someone with a high-level knowledge and professionalism can come into your world without the stress that you're bearing, and they can help you think more clearly. That would be me. I come into your world, I'm able to think with a clear mind because I'm not going through what you're going through, and I'm able to identify assets you weren't even aware that you had or could leverage and use at a far lesser cost without using your credit, without having to put more time in at work. It's just moving things around in a very unique way. Some of the examples I listed here below, when it comes to the 401k loan, when it comes to private lending, when it comes to— so cash value would— I would stick it over here. When it comes to securities or asset loans, collateral loans against assets and/or private lending, those are two locations that when you stick debt over there, it doesn't show up on your credit report. So when you do a 401k loan, it doesn't show up on your credit report. When you borrow against a brokerage account, it doesn't show up against your credit report. When you borrow against the cash value in a whole life, doesn't show up on your credit report. When you borrow from a friend, a family member, colleague, doesn't show up on your credit report. So what does that do for you? If your credit was already tanking or in a, in a worser state and you free up DTI, now the credit bureaus report that, your credit bounces back up, which would unlock access to capital and benefits for you to maybe get approved for a second lien HELOC or approved for a personal line of credit or credit card. And then what you would do is once you're in that better financial position, you then pay back the person sooner. You chunk them out, right? Or you begin to pay your assets back a little bit faster and then rinse and repeat, do it over and over again until you're either fully debt-free or you've solved for the initial task that you were trying to shoot for. Any, any other questions on that? Is that helpful? Very good, Boss. Okay, let me see if YouTube's got any questions. Let me see if you guys got any questions here. 16 people in the house. Let me know if you guys got any questions on leverage rules, borrowing, calculating your borrowing cost options outside of a cash value life insurance policy. This was just focusing on what this person had available to them. They had a cash value life insurance policy they really weren't paying much attention to, didn't have any loans against it. And they're sitting on all this credit card debt, and I'm like, it's right there, right in front of you. Let's go make that move. Let's see what your loan rate is. Let's see how your policy is performing. We'll run the math, but I can just tell you easily, you know, borrowing at 5, 6, 7% to pay off 29% is easy, easy game changer, game changer, winner, no issue there. K. Let me go like this. Let's do an example of the person who shifts debt for the purpose of creating more cash flow to then do another move, right? To then do another move. So we'll use this person. Say we already agreed on sticking $23,500 in the policy. We're gonna pay the 5.5%. That's literally less, less than one year's worth, one month's worth of cash flow, less than one month's worth. So here's what they could do. Say they do this move, they pay off the debt, they get the $1,000, they now have $1,750. Just one month, they do $1,750 minus $1,292, $50, and they set aside interest cost in a high-yield savings account, earn 3% for the year, just set that money aside. So now you're not thinking or worrying about this interest 12 months from now, or however long till the next anniversary date. That would be the smart thing to do. Now we evaluate the risk. So we say $23,500 divided by $1,750 is 13.4 months future cash flow risk. 13.4 months of future cash flow at risk. Because what are we doing? We're taking on risk. We've borrowed more than the leverage rule. There's only a couple grand in there for emergencies if something pops up, and they want to take the $1,750 that they now have in cash flow. We took only 1 month, set aside money for interest. You can, you can just take the whole month, let's say $1,750 or $1,292, either one. Now, within a certain time frame, let's just say that same 13.4-month time frame, This person wants to eliminate more debt at higher interest rates than the 5.5%. So let me just look at their spreadsheet real quick so I can see the other debts that they have. Okay, let's say we have another $12,500 of debt at 12%. So far, doubles the cost. 5.5 times 2, boom, more than double. After the break-even period, Okay, they're gonna take their $1,750 and make extra payments at that instead of paying back their policy loan because they see the value in stacking The results— they're already saving thousands of dollars by rerouting 29.99% to 5.5%, and they left a little bit of cash in there for emergencies. They set aside a month's worth of cash flow in high-yield savings to cover the interest costs. When it's all said and done, $1,292 $750 minus $750 in growth, their net cost is about $542 for the whole year to borrow. They have $12,500 of debt at 12%, is another $1,500 in a year worth of interest that they're gonna pay. And the monthly payment on this debt is $375. So there's another $375 of cash flow they can recover and save $1,500 in interest, around that number, give or take. So we do 12.5 $2,000 divided by $1,750 and $375 because they're doing full payments. So $1,750 plus $375. So now we're technically applying $2,125 per month. How quickly can I kill that? $12,500 minus $2,125. Wait, 12, 5, divided by 2125. 5.8 months. Okay, so, so far we've used 6.8 months in this 13.4-month window. Of future cash flow at risk. Meaning if this person doesn't follow the rules and they do something else with their $1,750, they don't actually pay down the debt, now what? And then something happens in their life, now they're really short on cash. So they're only a couple of incidents away from kind of messing up their their life in a, in a way. But that is the nature of risk. They're saying, I'm willing to do that because of the gain that I can get over here. So we got 6.8 months used so far. Now we have total cash flow of $2,000. $1,225. Total cash flow $2,125 each month. 13.4 minus 6.8, about 6.6 months left. So do 6 times $2,125, $12,750. What they can do now is now begin to pay back the loan. They can do that if they want. How long will that take? So that number stayed at 23,500. 23,500 divided by 2,125. How long will it take? 11 months. To pay off policy loan. Person looking at this says, yeah, I'd be willing to take on that risk because technically 11 months plus 6.8 brings me to 17.8 17.8 months from 13.4 months. Eh, I'm willing to pay an extra 4, 4.5 months of low interest at 5.5% to get the full gain of the debt that I eliminated over here. Does that make sense for those watching? Is that clear? See what happened? There's two options. One person said, yeah, I did a big move, Denzel. I just paid off a ton of debt, and I'm gonna witness the fruit of that result by paying as little interest as humanly possible on the whole transaction, meanwhile keeping myself fully secure and safe because I immediately replenish my savings. Let's just say, for example, their savings is all in the cash value. You don't have— they don't have any other capital anywhere else, just the cash value. And then obviously their month-to-month cash flow, so that's being immediately replenished. And if a life event happens, they will have more cash to settle that life event than the person over here that said, you know what, I want to stack my results. I want to save $29.99, and I'm gonna save 12% on top of that $29.99, and I'm gonna have a total cash flow now of $2,125. So I'm willing to wait only about 7 months into the cycle. So the only— they only waited 7 more months to begin repaying back their first loan. This is now done. The debt is done. Let's say they have everything paid off at this point except for their mortgage, and then they decide, you know what, I'm going to leave the mortgage alone and I'm going to replenish my savings, build that up to then attack the mortgage later. And they can do that as well, and they're willing to wait. Their full cycle was 17.8 months. So 17.8 months. Let me know in the comments, which do you resonate more with? Are you more of a willing to take on more risk for a higher you know, reward here in, in this example? Or are you more of a person that's like, hey, one thing at a time, man, one thing at a time. And then as I get more and more comfortable with myself, I witness the fruit a couple times, then I might do a double strategy, you know, like finesse, move that over here, and then take my daily cash flow, attack more debt over here, get even more cash flow because I feel like I'm going faster. So you might value speed, a little more efficiency, and you might think you're unstoppable. Let me know what you think. I think I see a question here. Andy says, I have a VUL and borrowed against it to create an income-producing asset. I'm wondering if it's better to pay it back and convert it to an IUL. I didn't know about IULs at the time and the beautiful uninterrupted compounding, which my VUL doesn't have. Okay, so I'm not too educated on VULs or IULs. I'm more educated on whole life. What I do know is if you were to do, say, a 1035 exchange from a VUL to an IUL, depending on the VUL's surrender charges, you want to look at what does it cost to go from one product to another. You may be out of the surrender charges depending on how long you've owned the product, or you may not, right? If you're not outside of the surrender charges, we got to factor that in. Then we look at the design of the IUL. What are you exactly solving for? Now, for almost every single IUL I've ever looked at and analyzed, in the first few years you're only able to borrow around 50%. I could— this could be an error, but this is of most of the IULs that I've seen in the, in the early years. You can only really borrow about 50%, maybe 70% of the accumulated value of the cash value, something to that point. In a whole life, in the first year with certain carriers— I don't— I am not going to speak for every carrier, but I would say mutually owned carriers will let you borrow up to 90% of the cash value day one. So then the question just becomes, what do I want more of? Do I want more cash liquid available from a guaranteed safe standpoint? And you're probably going to lean more toward a whole life. If you're someone that looks at IUL projections, the rate of returns, they're always going to project better than a whole life because of how the IUL grows with the indexes, right? Indexed universal life. So it has the potential to earn more inside of the IUL, but I also lose some liquidity in the early years of that IUL. So there's a trade-off. Potential higher returns in IUL, less liquidity upfront early years, or 1035 into a whole life guaranteed higher liquidity if you structure it right. And that's important— if it's properly structured for high cash value, then I know I'm going to have more liquidity and my earnings are— I'm going to have higher guaranteed dividend earnings, and then the non-guarantees are smaller because you're only receiving from the company's profits, right? You're not participating in any indexes or anything like that. It's just the growth of the company. So Andy says, uh, I have a whole life policy as well. I'm told it doesn't have uninterrupted growth, so that you might be getting misinformation. So my experience now, I've owned my whole life policies for 8 years now. The companies that I have used are MassMutual and Guardian. Those are the companies that I've used, MassMutual and Guardian. Both of those companies, regardless of what I have borrowed out— so however much you have a cash value column, then you have the loan. So we'll use the same number, $30,000, and say you do a loan for $20,000. There's two options specifically with whole life products with a mutual company. There's direct and non-direct, and they both kind of mean the same thing. It can be a little weird. I'm going to break it down for you. A direct loan will state that the insurance company is recognizing the loan that you're taking against your cash value, and they're going to give you a crediting rate of 6%. They're gonna credit you a different earnings on the borrowed funds. So your $20,000, let's say, is now earning 6%, and then in the cash value that you didn't borrow, $10,000, let's say, is being credited 6.25%. So there's a slight difference. So you earn a little bit less, let's just say in this example. Sometimes that's not always the case. Sometimes the Direct Recognition Loan will pay a higher crediting rate than what they're charging you. So direct means this is what you're going to earn. When you borrow money from us, and the mutual company is going to charge, let's say, 5.75%. So they're going to charge you less than what they will credit you. So sometimes there's a positive gap there, sometimes it's the reverse. Maybe they give you 5.75% and the loan rate is 6%. But their dividend is 6.25%, so it's a little bit higher on the money that you didn't borrow. Either way, Andy, either way, it's still uninterrupted growth because you're still earning money on all of the $30,000. It's just a matter of how much. You're still earning money on all your money. Non-direct is the mutual company will not recognize that you just took a $20,000 loan. And I'll keep it the same, say the loan interest rate is 5.75% non-direct, and say the crediting rate is 6.25%. So in a non-direct loan— non-direct loans a little bit easier to understand. You're only dealing with 2 numbers, whereas direct you're dealing typically with 3 numbers. You have the rate you're earning on the loan and the rate that you're being charged, and then the rate that you're earning on the funds that you didn't borrow. So that's why that's a little more confusing. Non-direct, 5.75% is your loan rate. Crediting rate 6.25. That's it. You're still going to earn 6.25 dividend on the $30K regardless of how much you borrowed, and your loan rate is 5.75 on that money. Done. So those are the two options, and again, both technically kind of mean the same thing. Uninterrupted compounded growth. Those are your two options when it comes to whole life insurance when you're dealing with a mutual carrier. I know this to be true for companies such as MassMutual, Guardian, New York Life, Northwestern Mutual, Ameritas, OneAmerica, Lafayette, Penn Mutual, I can't think of the other ones. There's really only a handful that we even would, would even look at when it comes to this kind of policy design. So Andy just said my whole life is with New York Life, so you are for sure earning money on all of your cash value even when you have it borrowed out. So that would be a— that would be the agent misspeaking or not fully understanding how the loans work in the cash value. You're not gonna not earn money. Great, cool. So coming back to Boss, Boss says, actually Denzel, I value both. I love more cash flow during each month, but also understand how eliminating debt helps my overall situation. So in that earlier example of, yeah, do I do one move at a time, witnessing the fruit of each move, and then do the next move? Or am I a little bit more willing to park leverage, park debt over here, low cost, pay that, set money aside, then pay off more debt, get more cash flow, and then pay back the first move, and if that costs me only, say, 4 to 5 more months of additional future cash flow, I'm willing to take that risk. So the key thing for you, uh, boss, is this: you want to know what is my max future cash flow risk capacity. Are you comfortable risking 24 months of future cash flow? Is the question. Are you comfortable risking 36 months? 48 months, whatever the number is, you times that by your monthly cash flow so you can truly see what you're putting at risk. And if it does not make you feel good, right, now we got to rely on feelings a little bit here. And I would also, if you're married, then you talk it over with wife. Talk it over with the spouse. If you're in business, you have partners, you talk it over with the partners and you, you process this. But this is something I don't see anywhere in the world of debt leveraging. Everybody is always chanting about leveraging debt to, you know, make investments, no money down, blah blah blah, take on all this risk. But then I work with all those people who took on all those risks. They, they got 5, 10 properties, they have $4 or $5 million of debt, and they are having trouble sleeping at night. Their health is declining, they have more stress, they're going through a divorce, they're having trouble getting on the right page with their wife, or vice versa, husband, or one is freaking out the other, the other's freaking out the other. I, I hear and see this day in and day out, and the reason behind that is you have a lot of influencers and gurus that are always preaching about the good of whatever strategy that they're doing and always leaving out the bad. And then they'll do some motivational pitch on how they lost all their money in '08 or whatever and how they recovered because of these strategies that they've implemented. Okay, whatever, that doesn't matter that you lost all your money, you got it all back. I don't— why do I want to go through that? I don't want to go through that. That doesn't make sense. I'm not trying to put on all that risk. So you want to evaluate your personal risk capacity. And I was just thinking, well, how do you evaluate your personal risk capacity? Like, what, what would be the, the numbers behind calculating that? How do I actually do that? And this is where I came up with understanding future cash flow per month at risk, because when you do it per month, it, it has a different effect than if you say 1 year's worth of future cash flow. No, no, no. If you say 24 months, if you say 12 months, if you say 36 months of future cash flow you're putting at risk, then you times the number out Now you're like, okay, if I'm— if my cash flow is $2,125 times 24, I'm putting $51,000 of cash flow at risk. Meaning if I fuck up, if that investment doesn't work out, if I lose my job, if I get hurt, if I experience a death in the family, if I don't pay off the debt, well, well, now I have $51,000 of leverage I lose. So that technically puts you back 24 months. So what are you going to find yourself doing? Desperation mode. You're going to start working more hours, spending less time with family, kids, wife, God, all that. Stress goes up. And you're just going to find yourself making moves out of desperation rather than logical, structured, purposeful moves. Makes sense. Okay. Andy says, when should I focus on paying off assets, parentheses, real estate, and when to let them pay for themselves through the rent? Interests are in the 3 to 4% max. If no one else has questions, don't want to take up all your time, fire away, my friend. Everyone else is either listening intently or you're asking questions that they were going to ask and they're like, okay, let's see what Denzel says. So you are taking full advantage, which is cool, no problem there. Now, to answer that question, so now that you know, okay, whatever leverage I'm taking on in life. You can even, you can even do this max future cash flow risk on the total amount of debt that you carry today. So if someone carries $1 million worth of debt, you can just take that million, divide it by your cash flow, and see how many years of future cash flow that is that it would take to pay that off, basically. And if you're like, yeah, I'm fine with that, That's cool, no issue. Some people are like, no, my heart just— I just felt something in my heart. And you're like, okay, so then we get to evaluate how much of that debt we would like to either pay down, or we have the mindset of never pay it off. Never pay it down. So you also want to pair your personal values and beliefs and make sure it's paired well with whatever strategy that you are implementing. So if you're implementing a debt leveraging strategy, but all your life you've been taught to live debt-free, you have to make a decision. Am I going to step into the 21st century, which is a debt-based monetary system that we live in, which makes savers losers in the 21st century. I have to fully adopt this mindset and then get around people who also understand it and won't contaminate that mindset so that I don't fall back or mess up the strategy because of my previous values and beliefs. Or you might be the person that says, I want to live debt-free, remain debt-free. Well, then stop getting temptation to use debt just because the math makes sense. Even if the math makes sense, this is one of the things that I do respect about Dave Ramsey is on multiple podcasts people try to trip him up. They'll ask him, if I gave you a billion dollars, if I gave you $100 million at 0%, would you take it? Dave Ramsey's answer is always no. He would not. Doesn't matter how long the term is, doesn't matter what the interest rate is, even if it's 0%, even if it paid him, he's not gonna do it. I value that, I respect that. I have clients that are like that. They don't like debt, so they just choose to pay off all their debt first and then they'll invest later. Can that have consequences in the 21st century? Yes. But at the same time, we're finding the balance between happiness, peace, and long-term wealth building. You know what, what that actually ends up being, because a lot of people run scenarios about not paying your house off and how much more money you'll have in retirement. Well, that's an assumption. It's not a guarantee, it's an assumption. Maybe if you invested and got X rate of return more than your mortgage interest rate, maybe, sure, but it's still a maybe. You can't guarantee it. Versus the person that does pay off their house, there's a guarantee. You guarantee you will have XYZ, no more payments, interest saved. Then you take that, then go invest. And if you have a long enough trajectory, there's possibility to make up for it. So it's, it's a dance, it's a game, and trying to figure out what works best for you in that, in that scenario. So coming back to Andy's question here, now that I erased the board, Andy says, okay, when does it make sense to pay off real estate asset and when to let them pay for themselves. I'll just create some numbers here. Let's say Andy has 5 properties and say the total Property values are $2.5 million. Total debt value is $1.5 million. And let's say of his 5 properties, they're all cash flow positive to date. They're all cash flow positive. Let's say positive 5 properties, couple maybe, maybe 7, 8 doors. Let's say $2,000 positive net cash flow after all expenses, you know, money in accounts to cover property tax, insurance, everything. This is giving you $2,000 a month in cash flow consistently, and then Throughout the years, it continues to go up because you increase the rents, all that stuff. So technically, he has $1 million at risk, it's $1.5 owed, $2.5 in valuation. So they got this— we got this $1 million, or technically $1.5 million gap. So we'll just do that. So $1.5 million debt gap, and as of right now, it's not an issue. Things are going well. The banks are not checking on him. All the mortgage payments are being paid on time. What could mess this up? The risk— let's evaluate the risk. What are the risks of holding $1.5 million of debt? Risk is loan call, right? They call— bank calls a loan. And vacancy is a risk that can affect his cash flow. Vacancy and high repairs. High repairs that he's going to say he has to come out of pocket that insurance doesn't cover. Those are your probably main risk on the, on the board. With $1 million of equity, I look at that— that was a number I was trying to like explain earlier— it's technically only $500,000 I need to worry about because if I sell everything for $2.5 million, pays off $1.5 million, right? We got that gap. So I'm looking at the net cash flow per year. It's bringing him $24,000. There's tax benefits in this for holding the debt. The interest he pays on the debts tax deductible. If he's W-2, this is offsetting a lot of his tax liability. There's a lot of reasons why he wouldn't want to accelerate this. And in his example earlier, he said interests are in the 3 to 4%. So imagine having $1.5 million and it's only costing you 3 to 4%. And these are 30-year notes, and you got a million of equity in there that you could tap in through via HELOCs. Okay, $24,000 each and every year of net cash flow. We're not talking full income that he's getting, net, net that he's able to pull out of this and go do something else with. I would say if we haven't already built some sort of an emergency to protect against vacancy, repairs, loan call— loan call is hard to do. How are you gonna— you'd have to have other assets to be able to pay off the $1.5 million instantly, or you sell. So that kind of helps there in a sense. But if you have enough set aside, separate account— I don't know what the rules are in, in real estate to protect against vacancy, but in my mind, I want no less than 6 months of mortgage payments in a separate account somewhere. That could exist in my whole life policy, that can exist in my high-yield savings, that can exist in another liquid asset somewhere else. For me, I think I would want no more than— no less than 6 months, probably ideal like 12. So for, for me, I would, I would first build up protective capital outside of equity to help mitigate the risk of carrying this debt. Then once you've done that and you're like, I still want to pay off this $1.5 million of debt at 3 to 4%, then we look at what's the most efficient way of going about doing that without reducing all that available cash flow that you have. So if I have $1.5 million of debt and you really want to pay that off, does it make sense to put an extra $2,000 a month on the property on top of your other cash flow, or does it make sense to convert one of the properties into a first lien and have the ability to dump all your income in at a maybe a similar rate around there, maybe even if it's a little bit higher, would it make more sense? Would it make more sense to take that $2,000 cash flow, put it in a separate asset like a life insurance policy, have it grow tax-free, then be able to borrow from it and knock off the property debt? Does it make sense to take that $2,000, invest it in a retirement account, build it up, borrow against it via margin line of credit, and knock out the debt? So it might make more sense to set up a separate account first, build capital, and especially if these things are paying for itself, and then take care of it. But it's kind of hard to argue when you have mortgage rates at 3 to 4% and you're saying the rent pays for itself. It's really hard to argue with against not paying it off. It would just be a matter of personal preference. I just personally prefer to pay these off. Okay, great. If you personally prefer to pay these off, can you earn more than 3 to 4%, preferably say double or a little bit more, in a separate account? And then once your money has equaled $1.5 million or $500,000 to $1 million, you can kind of consolidate everything and knock it off. Then you'll be fully debt-free, operating like Dave Ramsey in a sense, who has all paid-off real estate property that produces cash flow. So that is a thought. That's how I determine it. I would first set up the emergency account before sending more money. Because if you start sending extra money to that real estate property that's already paying for itself, and then the roof goes, or this heater goes, or the AC goes, or you get a vacancy and you don't have that free cash flow sitting aside because you threw it in the, in the property's balance, and the only way to access it is by getting a HELOC right, getting a line of credit against it, that kind of defeated the purpose of accelerating it, just to have to dip into it to handle certain, certain costs. So I would first want to set myself up with a healthy amount of reserves and capital, 6+ months or longer, then decide, come back to it and decide, okay, from this position, I still want to pay off this property. Great, you have money set aside in case anything happens, and now you can start making extra payments. Or we can do a chunking strategy with a line of credit, a HELOC. We can restructure— I'm doing this right now with a client where she's restructuring some of her mortgage properties into a first lien HELOC and accelerating it from there. So working on that. And he says, awesome advice. Scared of good debt if it makes sense. I'm all about cash flow these days. Thank you. I'm all about cash flow too. That is my framework for wealth building, is cash flow is better than accumulation. Always cash flow over net worth, every day of the week. That is what I personally prefer. All right, any other questions? Was this helpful? I'm gonna get ready to close this out, and again, I want to thank you all for taking the time spending with me on here running the math, understanding leverage, and more importantly leverage rules. This is the thing I'm going to spend— I have spent a lot of my time on this YouTube channel always talking about the rules of leveraging debt. It can be very attractive, the amount of money you can create or the amount of money that you can save when you accelerate debt. We have to have rules in place so that you don't just leverage the whole dang line of credit. Let's say you don't leverage all the cash value in the policy, you don't leverage all of your credit cards at 0%. There's a lot of videos out there where it's like, get $250,000 of 0% credit card debt in your business. $250,000 at 0% for only 12 to 21 months, and then you, you know, you're rotating it. Hey buddy, that's a lot of money in monthly payments. What's 2%, 2.5%, 3% monthly minimum payments on $250,000 of business credit card debt, which when they expire and they jump to 30, 20 plus percent, that wipes out all your cash flow. So there's so many people that preach getting all these 0% credit cards. I'm the one that's gonna stay consistent. I think you should just get one, one on your personal, one on your business. Get comfortable with that. You want to get two? Cool. Let's have a purpose for each credit card and just run the future cash flow risk. However much you leverage, times cash flow per month times 12, credit limit, credit line, cash value times 2/3, and see the gaps, see the differences. Okay, yeah, I'm willing to put up $50,000 of leverage, risk 12 months of future cash flow because of the amount of cash flow I will double in just 15 months, and then my ability to pay back that $50K will take 21 months or take 18 months, whatever it is. Run that math. And for an additional coaching accountability, I'm here for you. You want to work with me one-on-one? Let's book time. Go to my website, look at my program, look at my consulting, book time, book a call. I'm here. This is what I do. All day. Love it. I love it, love it, love it. And then also want to thank you all for praying for one of my clients and friend and sister in Christ, that her cancer is fully healed, fully, fully reversed. And I can't wait to report the good news once that has come into fruition, once we have witnessed our faith. We have to have faith in the things that we don't see. We have to have— that's what it is. Faith is evidence of something not yet seen. So I have the faith, she has the faith, you all have the faith here. We're about to witness what we cannot see just yet, and we have to maintain that language, and we let God do the work. God, this is your will. Yes, I shall be healed in the name of Jesus. Amen. So with that, we'll close it out here. Thank you again. Appreciate you all tuning in. God bless you. We'll see you next week. Every single Friday, we're keeping a nice rhythm here, doing lessons, doing workshops, having a ton of fun. So if you want to be a part of that, get on my email list, hang out with me. We'll spend some time together. We'll do some Q&As. God bless. Bye now.