Infinite Banking Proof of Performance

Welcome everyone, we are live on YouTube. And if you're part of my community, Increase Academy coaching client, did any business with me in the past, or any one of my partners, you're tuning in on Zoom as well. So you're either hanging out with me on Zoom or you're with me on YouTube and/or Live with me on Daniel Romburg's channel. So excited for you to be here. Thanks for taking that time. This evening we're going to be discussing proof of performance. Simple. This won't be a long class. This is more of a technical class. This is for those who have been doing the studying, you've been doing the research, doing your due diligence, you're learning about the Infinite Banking Concept. You are maybe speaking with an insurance agent and you want to make sure you're going down the right path. You want to see proof, like, does this actually work? Are there customers— not the people who sell it and promote it— who are the customers? Are they happy? Are they getting results? What do those results look like? And so over the last 8 years, I've dedicated my entire career, my life, to helping folks become either debt-free and/or debt-leveraged, increase their cash flow, fix, repair, build their credit scores, personal and business, save more money, invest more money, and ultimately achieving financial freedom and independence. One of the tools in my arsenal is leveraging properly structured whole life insurance That focuses on cash value accumulation with all the other benefits that come with owning life insurance— living benefits and death benefit. When you structure a policy this way, you get the benefit of guaranteed, predictable, tax-deferred growth and tax-free use of the living benefit called cash value. The cash value in a properly structured whole life insurance contract over roughly a 10-year period and beyond will outperform a high-yield savings account, a CD, a money market, a Treasury bond, checkings and savings accounts. Those are all the other financial instruments that you and I can park money Have it grow safely at a relatively low rate of return that is for the most part guaranteed in terms of getting something. Not the actual rate is guaranteed, but something is guaranteed. You're going to earn something each and every year. It's safe, you won't lose money, and it's liquid and available to you. Now, depending on where that money sits, It can either grow tax-free or it would be taxable. If you want liquidity, you're most likely going to have to give up the tax-free function. So if you put your money in a CD and you want liquidity afterwards, there's going to be a taxable gain on the earnings. If you put your money in a high-yield savings account, you want liquidity, that's your emergency fund, you're giving up the tax free aspect of it. But if you had your money growing in a Roth IRA and you bought a CD, you bought a bond, you just had it growing in the money market earning a certain percentage, the gains on that is tax-free. But what happens? You lose the liquidity, access to that money. Whole life insurance is the only product that allows you to have the liquidity, access to the money you contribute into the policy, As well as the tax-deferred and tax-free use of that money. And the thing that takes it over the top when you compare these other accounts is the death benefit and the living benefits that come with it, these additional protections for the same dollar that you're contributing into this asset. All right, so that gives you the— a nice overview breakdown. We're going to take it to the whiteboard. Real quick, and let me just verify something because it looks like my screen is blurry. Yes, it is. Okay. All right. So I need everyone's help. Just a second here. We're going to fix my camera because it is a little blurry at the moment. Sometimes that happens. With tech. And I think I fixed it. Let's check. Boom, here we go. So let's begin giving you the entire breakdown of a real whole life insurance contract with a reputable carrier. We're going to look at the entire history and performance of this policy that is in force. An individual, someone that is not a licensed life insurance agent, they do not sell or promote this. This is one of my clients that I've had the privilege of serving all these years. Since we are live, if you have any questions whatsoever along the way, please comment them below as I go through this and I'll address your, your questions. So let's begin. On the left-hand side of the board are the facts of the whole life insurance policy that was put in force back on March 10th, 2019. The company we used was MassMutual. This is on a male, 24 years old, ultra preferred, got the best health rating with this carrier. The policy design is what's called an L100, and the way we design the policy is summarized as a 90/10 split, meaning roughly 90% of the money we contribute into this whole life insurance contract is going to be targeted towards the cash value accumulation column of the policy, the living benefit. And the other rough Roughly 10% is going to the base premium cost of insurance. So this design, we're showing funding $10,000 per year into this policy. The base premium is $1,000, so that's the minimum required amount to fund. Everything above that is pretty much optional. We have a MEC limit— stands for modified endowment contract— that is the That is the IRS's limitation, very similar to a 401 limitation, a Roth IRA limitation, an HSA limitation. The IRS sets limits as to how much you can pay or contribute into any one of these assets that would allow your money to grow tax-deferred or tax-free. All right, if you have a brokerage account, you can put as much money as you desire. There are no limits. But anything that comes with a tax incentive, tax benefit, the IRS puts a limit on it. So that's what the MEC limit is referring to. We have a $12,271.22 MEC limit initial that starts off with. We have an initial death benefit, total death benefit, of $525,769. And 6 cents. Again, the policy started in March of 2019. In 2019, the declared dividend rate from MassMutual was 6.4%. The guaranteed rate with MassMutual in 2019 was 4%, and the loan rate was a variable 5% rate. Okay. So that was year 1. Coming over to year 8, this information is current as of September of 2026. Although we're in October now, this is of September, and these numbers really don't change a whole lot, only when you get to the anniversary. So we are past 8.5 years old on this policy. We're approaching year 9. The total amount of money we funded into this policy— this individual has paid in $84,000 into this policy. That's roughly $10,500 per year. So there were some years where they paid in more than $10,000. There was a year I believe they paid in $11,000, $12,000, and— $13,000. Like probably like $11,000, $10,000. So they've actually paid a little bit more than what they initially intended to do. That ultimately will be to their benefit, right? As of year 8, person's now 31 years old going on 32. The projected cash value at the end of year 8, which would be the beginning of year 9 come March, Of 2027 is $94,327. So at this point, we have reached the break-even point. This policy is now producing a surplus above and beyond a return of premium. So they've paid in $84,000. There's The cost of insurance to get this $500,000 of death benefit. And over the last 8 years, that money has now returned to them in the form of a living benefit cash value, which is now going to be around $94,327. I believe this policy broke even around maybe year 5, maybe year 6. I'd have to look at that. And as of year 8, we're now producing a net internal rate of return of 4.56%. Since that time, over the last 8 years, the death benefit has also increased. Started at $525,000. By the end of year 8 going into year 9, we'll be at $819,559. The declared dividend rate for 2026 is 6.6%, so it actually went up from 6.4% to 6.6%. The guaranteed rate is still 4%, that never changes in the policy. For the life of the policy, they'll always earn 4%. The loan rate increased, went from 5%, now we're at 5.52%. As of today, I checked They have a loan outstanding on their policy for $81,652.47. That's their principal balance with loan interest owed that's accruing, and currently it's at $2,403.76. So the results are year 1, zero cash value. You pay in $10,000, the cash value at the end of the year was somewhere around like $8,000 and some change. So we go from, say, $8,000 to $94,000 in cash value. $500,000 plus $1,000 to now $800,000, that's a $293,789.94 increase in the death benefit. We have a $14,327 surplus above and beyond our principal, which simply means moving forward, every year this person contributes $10,000, they're getting a return of premium. All that $10,000 is classified as premium, and 100% of that will show up in the cash value Plus new money, new dividends, profits from MassMutual gets deposited into this individual's account. How cool is that? Now let's go even deeper. Let's look at the dividend history of MassMutual starting from 2019 all the way to 2026. 2019, it was 6.4%. That was the declared rate. In 2020, it went down. 6.2%. As a licensed insurance agent, ideally you don't want to see that where you sell a product and the very following year it goes down, right? But what happens if it goes down again the following year? And what happens if it goes down again the following year and again the following year? That's literally what happened to this individual. They bought a policy in 2019 The rate was 6.4, it went down to 6.2, went down to 6, it stayed at 6, it stayed at 6. Not until 2024 the rate began to go up, 6.1. By 5 years later, 5, 6 years later, it goes to 6.4%, and now it's above where they started at 6.6. So the average dividend rate from 2019 To 2026 has been 6.2125%. All right, still below what was initially illustrated in this policy. Now, if I had educated you all and, and taught this person that the dividend rate is the most important thing in this policy Then more than likely this person would have probably canceled this policy and would have done something else with their money. But because of how I teach this particular policy and how we're structuring it and how it creates value in many different avenues in a person's life, they did not cancel this policy. They kept saving money. Because they understood that this asset is not an investment, right? If this was an investment, this would be a terrible investment. I, Denzel Rodriguez, I'm a licensed life insurance agent. I make money when you buy a life insurance policy with me. I am incentivized to have you buy policies because I will make money. I make videos, I make money, right? I educate, I make money. So from that perspective, I'm here telling you, you should not have this policy. You should not do this if you view it as an investment. You shouldn't do it. Why? Proof is in the pudding right here. This policy underperformed 6.4% was the declared rate. It went down for 5 years, recovered. It's now above 6.6%, but it kind of doesn't matter, right? You need more years above 6.4% for the average to be above 6.4%. So from that perspective, this should be an unhappy client. So I just want to make that very clear. Very abundantly clear when you're doing your research, when you are making comparisons, one of the things that you will constantly see financial professionals and gurus at the highest level is they will compare a non-investment asset, a non-risk asset. Whole life insurance is a de-risk asset. It has no risk. inside of it, right? It literally provides protection coverage in the event you die. That's its sole purpose. And then it has these other benefits, cash value and living benefits, that come with it as well. So again, terrible, horrible investment. Whole life insurance is a horrible investment coming from someone that sells this. I make money when I do this, right? So therefore If we take off the investment lens and we say, okay, what can we compare this to? What would be a reasonable, fair comparison for what this product does and what I could do elsewhere with the same dollars? A fair comparison would be high-yield savings, checking savings account, money markets, CD, bonds, treasuries. Because that is safe, liquid places where I can store money. I'm going to get a decent rate of return and the money's there and I'm not going to lose my principal, period. So what did I do? I compared it to high-yield savings rates from 2019 to 2026. And here's what I discovered. The average high-yield savings account in 2019 was giving you anywhere from 2% to 2.2%. When COVID hit, rates went down, so you were earning as low as 0.4% to 0.6%. 2021 was the same thing. 2022, it jumped up to 3% when we started seeing rates increase. 2023 was an excellent year. You literally could earn 5%, 5.5% in your high-yield savings account or a CD or a bond, and you were killing it. But that was short-lived. It went back down to 4.25% to 4.7%. 2025, same thing. 2026, right now is between 4% and 4.5% is what you could probably earn on a high yield savings. It's a little more rare to find 4% and 4.5% right now today, but earlier this year it was around 4%, 4.5%. Today, I think you're seeing more high yield savings are around like 3.75% to 4%, but 4.5% is A little hard to find right now. Alright, so what I did was take the same funding amount, alright, $84,000, divided it out, boom. And if this person would have just saved their money instead of buying whole life, they would have just saved their money, they would have anywhere from $93,000 to about $94,000 Based off of the average return of 2.9% to 3.23%, they'd have about $93,000 to $94,000. All right, let me share my screen, show you the proof. Here's what I discovered. Let's go here. So this is a simple compound interest calculator showing an, you know, average rate of return 3.23% over the last 8 years. In order for the high-yield savings to beat the amount of cash value that was in there, the average return would have had to have been like 3.3% to 3.4%, a little bit higher. Then it would have beat the cash value in that sense. And you could totally argue based on what type of high-yield savings you got, and if you maybe moved from one bank to another and you kept chasing the highest rate of return, no doubt you could probably beat that $94,000 of cash value because it's neck and neck. Right, so at an average return of 3.23% compared to my 6.2%, you have $94,000, I have $94,000. I just have a couple extra hundred dollars more than you. Okay, now here's the difference. Is this money tax-free or is it taxable? It's taxable on the gains. What are the gains? The gains are roughly Call it ten thousand or more is how much your high yield savings would have earned you. So you take the ten grand, you got to minus at least twenty to thirty percent off the top. What are you left with? Okay, so you have to factor taxes into this equation. So you end up with a little bit less money. So if I do, let's say eleven thousand is what it earned minus. Say 20% off the top, 88 plus principal of $84,000. Maybe your maybe your net amount is between $92,800 and maybe like 91. All right. So at at this point. Every year, if we were to compare this person putting their money in a high-yield savings, chasing returns throughout the years, versus their money in whole life, by year 8, call it, we see a crossover point where the amount of cash value is equal to the earnings of the high-yield savings account. And then year 9, year 10, and onward, this will continue to outperform the high-yield savings, putting in the same amount of money each and every year. So it takes about 8 years, maybe a little bit longer, to beat a high-yield savings account. Because out the gate, you save $10,000, you have $10,000. Right. You put $10,000 into a whole life, you don't have $10,000. In cash value, you have 20+% less. So you have a 20% loss year 1. So that's why it takes 5, 6 years just for your money to break even. Once you get to the break-even point, now you're in a surplus. So we can see here, I usually tell my clients it takes about 10 years, give or take, to beat A high-yield savings account, a bond, a CD, a Treasury, putting in the same amount of money, even when you minus taxes, that you would still have more money the first 8 to 10 years, let's say, is what I usually tell clients. And then after year 10 and beyond, the whole life will always outperform high-yield savings accounts, CDs, bonds, Treasuries, money markets, checking and savings accounts all day, every day. Because it has 2 things in its favor. Number one, a higher dividend rate from the insurance carrier. And 2, the earnings are tax-deferred. There's no fees coming out in taxes. And I would say the 3rd thing is a guarantee. Like, no matter what happens, I'm always going to get at least 4% every year. We have a net internal rate of 4.56% to their 2.9% to 3.23%, or even if it was more than that. If we take a look at the policy's performance now, this is where it begins to really, really take off. Alright, so here is a breakdown of the policy's performance from day 1. Notice how day 1 we lose 22%. You put— this person actually put $11,000 year 1. So they put $11,000 in, they had $8,573 cash value to show for, right? 22% net loss. 2020, negative 0.4% loss. It's not until year 3 we start producing a positive return, but we're still behind in terms of principal and what's in cash value. By year 5, we see the break-even. So this policy broke even around 2023. It's producing a net rate return of 3.15%. This is where we're at now, 2026. Next year is projected to be 4.71%, and we can see how it's on track to pretty much average out a net rate of return of, you know, a little over 5.5% for the rest of the duration of this policy. Not bad at all. Okay, and notice how death benefit keeps going up and up and up. So that's another value-add comparison is, okay, if I put my money in a high-yield savings, all I have is the capital. If I put my money in a whole life, I have the capital. It takes 5 years to recover the capital, and then it's at a surplus at that point. In this specific case, others may take shorter or longer, right? Depends on age, health, finances, all that, and the carrier that we choose. We have the capital plus we have the death benefit. We have the capital, we have the death benefit, and we have liquidity. You have liquidity with a high-yield savings, but now here's The another value add that, that can occur, which is, say this person who puts their money in a high-yield savings account, and over the last 8 years they saved $84,000 in principal, and somewhere along the line they had emergencies pop up, so they had to pull $10K. They had to pull $10K again. They had to pull $10K again. Every time you take money out of your high-yield savings account, you're no longer earning interest on the money you pulled out. You only earn interest on the money that's there. Inside of the whole life, this person over the course of 8 years has taken out $81,652.47 in loans. Various loans throughout the last 8 years. That means this person either had unexpected expenses, emergencies pop up in their life, life happening over the last 8 years, or B, a combination of unexpected life expense— expenses, emergencies, and/or they made some type of an investment. Or maybe they paid off debt with that $81,000. While that was happening, they continued to earn interest on their money as if it was not borrowed. MassMutual will not penalize you for taking loans out. Right, you're gonna still earn the same dividend rate whether you have loans out or not. What does happen is you pay loan interest. So this person has been paying anywhere between 5% and 5.52% in loan interest. When they pay loan interest, goes to the carrier. And And then the carrier pays a dividend. So it's as if you are getting that money back in the form of dividends when you pay loan interest versus losing interest by just having your money in a savings account. You spend the money, you lose the opportunity of earning. The, the gain, you could say, if we were doing pros and cons, is When you withdraw money from your savings account, you're not paying a loan interest rate of 5% to 5.5%. What you are paying is the opportunity that you could have been earning. You could have been earning 5% that year when you took money out of your savings. You could have been earning 4.5% when you took money out. You could have been earning 3%. when you took money out. So that's your cost of having a high-yield savings. The cost of having a whole life is the loan rate and the death benefit coverage. But knowing that, okay, over time I get all of that money back in the form of return of premiums and dividends that get paid based on the company's performance. I can rely on that performance because MassMutual has been paying dividends for well over 150+ years. There's no bank in America today that has been able to successfully pay dividends that long, but MassMutual has. So it has that credibility, it has that reputation, it has that strength and capability to Deliver that. All right, let me come back and share my screen, and I want to show you the original life insurance illustration, what it originally was set to perform at. So this is the original illustration paying in $10,000, and by year 8, the performance should have been $88,962. But notice how that's showing $10,000 per year. This person paid in an extra $4,000 in those 8 years. So $80,000 of contributions produces, or would have produced, about $88,962 by the end of year 8 going into year 9, with a death benefit of $842,000. Because this person not only contributed The same $80,000, but they did a little bit more. This is an in-force illustration, and this is showing the internal rate of return at 4.71%. The only reason why it's blank is because we're still in the year, so it hasn't calculated that just yet. Here's where the cash value is projected to be. At the end of year 9, $109,000. But let me do something real quick because I don't want to share the person's information. So I got to scroll through the illustration real quick. So I want to take you through the line-by-line performance. One second, don't want to reveal their information. Okay, so this is a better analysis here. There we go. This is an in-force illustration showing, you know, by the end of year 8 They've got that outstanding loan that I showed earlier. Net cash value is $8,345, so you basically just add the 2. Then we can see how, okay, the cash value has technically performed better because of 2 factors. One, they paid in a little bit more than what was initially intended, and B, there was one year where the dividend rate was 6.6%, and that played a factor. 5 years, the dividend rate actually underperformed according to the original illustration, but it still kept on par. So we look at $109,000 to $240,000 now is the projection going into year 9. And year 9, we're at $103,000. So $103,000 to $109,000, pretty good. So it's, it's performing right on par and slightly better. To me, in my books, in terms of an asset that is not an investment, it's gonna grow slow. Is performing right on par, is doing exactly what it said it's going to do. And that just provides a level of conviction and excitement for the client, satisfaction. This person has expressed that of all the investments they've made over the 8 years, things that work, things that didn't work, this asset has always been there every single year. So there's some intangible values of having something just like this, the properly structured whole life, compared to all the other chaotic investments that we make, all the risk that we take when we are trying to make a return, we're trying to make more money, passive, whatever it may be. You have this one vehicle that's your backstop, that's your foundation, that's your— like, no matter what, this thing will keep performing year over year over year. And so hopefully this helps you. For those who have been doing the research, you're interested, you're, you're skeptical— you should be— you are doing as much research and due diligence as possible to, to find all the holes. You are analyzing the pros and cons. Hopefully I did a good job analyzing the pros and the cons of owning whole life insurance. The major cons are really the first 5 to 7 years. It produces a negative day 1 out the gate, so you have to be aware of that. The returns are really, really low. They get better with time. You are paying for insurance. It's not an investment. It's just going to perform better than a high-yield savings account, better than a bond, better than a CD over any 10-plus year period. Like, if you get sold on that, this product's good for you. Then you start adding all the other layers behind it. The fact that you have a death benefit that starts here and grows over time depending on how you design it. Tax-free growth, tax-free use. Money is leveraged in 2 places. I can borrow this money, go earn something with it. Let's say at bare minimum, you borrow from the policy at 5% and earn 7% to 8%. How hard is that to do? You earn a rate of return that will Offset your cost to borrow and a little surplus and factor in taxes. That's not bad at all. This person is now at a point where if they borrow at 5.5% and they're earning a net 4.56%, their net cost to borrow is 1%. 1.04% is the way I look at it. Net IRR Versus loan rate. The loan rate is 5.52%, but they're earning a net of 4.56%. So it really only costs them about 1% right now in year 8 to borrow that money out. So all they really need to do is earn more than 3-4% in the outside world minus taxes. To wash the loan costs and have a surplus back into the account. Do would that make sense? No, you don't do that. You don't borrow from your policy at five and a half percent to earn less than five and a half. That would not be a reason good enough to borrow from the policy. You if you're going to make an investment like this person has, they got eighty one grand out is because they're earning maybe a you know upwards of triple. What their net rate of return is. That that's more of my framework. I want the return to be at least triple what your loan rate is, regardless of what year we're in. Okay, it just but just know that it gets better and better the longer you have it. So probably by year ten, year eleven, if the internal net rate of return is closer to like five percent, five and a half. And the loan rate is 5%, 5.5%, depending on how much is borrowed out at any given time, it's going to be a complete wash. Plus, you have the surplus of whatever you did with the money. Did you consolidate debt, save money on interest? Did you make an investment and score? There's a lot of cool things that you can do here. I want to dive into some questions. Okay, we got someone that says, I want an annuity. Awesome. You can reach out to my team below. You can click the link, book a call with me, reach out to me directly. Happy to help you there. We can discuss, you know, what it is that you're trying to solve for and if the annuity makes, you know, most sense for you. This dapper young man keeps me motivated to help others. Thank you, thank you, thank you, thank you. The only 4% return I have seen lately was a 24 to 35 month CD for an IRA account. Money there would be useless for decades. Good point. Yeah, um, today in 2026, rates did go up, so banks are going to be able to pay out on a high-yield saving— probably, you know, smaller banks, local credit unions, or online banks with, with no physical locations are probably going to be able to pay out like a little over 4%. Without having to lock the money up, more than likely. All right, let me see what other questions you guys have. This is the, the opportunity to just be like, okay, I'm looking into this, does it make sense? Hopefully I provided as much detail, like the core details of a life insurance policy, how it's functioned Over the years. I'm gonna put my calendar link in the chat for— and this is, you know, anyone that wants to have a conversation, you're not a client. If you're a client already, don't use this link because you already have your own. So this link, book a call with me. No pressure. I will not sell you whole life insurance. Like, I'm probably one of the worst Whole life insurance salesmen out there, because majority of my conversations, I'm actually turning people away from whole life. Like, we're not just going right into it. I like to take people through an educational process, just like I did here. I like to verify, double and triple check you fully understand what you're doing, that you know this is a long game, that you know this isn't a short game move. That you know the cons, you know the pros, you are confident in your decision-making, you're not just relying on me. And in that process can take anywhere from 3 to 6 months. I've worked with families where it was a 6-month process before we even put one policy in place. They needed to learn, they needed to gather the capital, they needed to talk it over with the spouse. Everybody was on board, we're all on the same page. Great. When I have discovered in my practice, when I've done it that way, I don't have people complaining later on just because rates go down or the performance is negative the first 2, 3 years because they already know. I don't hide any details about whole life insurance. I show the IRRs. The net internal rate of return is a terrible thing to show your clients in the first few years because it's horrible. It's like -20%, -1, -2, -3, and then +1 by the 5th year. That's not attractive. But why are major banks, institutions, and wealthy entrepreneurs and high net worth people and families Why are they buying this by the billions of dollars every single year? They're doing this because they understand how it fits into their entire portfolio. This asset is not meant to take away or replace your investments. It's meant to complement your investments. This is one of the coolest things I get to show clients almost every single time is I show them The separation of their dollars. I show them, okay, here's how much you're saving right now. Here's how much you're investing in your 401. But now let's take a look at that 401. What are you actually invested in? Oh, you've got 40% of your money sitting in bonds right now. So you're missing out on a higher potential rate of return by being invested in stocks Index funds, ETFs, REITs, you name it. You're missing out on all that higher rate of return because you're what? You're balancing the portfolio. That's what the advisor told you to do. You got to balance the portfolio so that when there's a down year, we don't have the need to sell, let's say. Well, what if you never needed to pull from that account Because instead of having your money sitting in bonds and cash, you took that percentage, 30%, 40%, whatever it was, and you just parked it in whole life. And then you got this laundry list of benefits that came with it. Now you go put 100% of your money in stocks and ETFs, which sounds very controversial to most financial advisors because it's against the normal traditional way of doing things. But if I have this backstop that's guaranteed no matter what in tax-deferred, tax-free use and fully liquid, then I don't need to have my money in bonds. I can just go 100% stocks, ETFs, give me the highest possible rate of return. That thing's gonna compound like an animal. Meanwhile, you got this slow money over here that's safe, secured, and guaranteed predictable growth. No matter what. How awesome is that? So I think I saw another comment. All right. What about using your second lien home equity line of credit to fund and then repay? Say the HELOC is 8%, borrowing from the policy at 4.76%. So technically speaking, Say you apply for life insurance. The life insurance company is going to ask you, how are you going to fund this whole life insurance contract? Especially if you're funding it for high cash value accumulation, you're going to be overfunding it, putting in $10,000, $20,000, $30,000, $40,000, $50,000, $100,000, whatever it is. If you tell the insurance company, I'm using the equity in my home to fund this policy? I'd say 100% of the time they're going to deny that because that's showing your inability to fund this policy with your own disposable cash flow, your own income. So you would not do that. Now, can you do that? Yes. Should you do that? Should you do that is the real question. That is— my answer is, it depends. So, can you do it? Yes. Should you do it? Let's run the math. Let's run that math together. Now, my framework personally, I want to see every one of my clients with cash capital in their savings account at the bank available. First year's funding is available for them to fund the policy. I don't like to see clients, and I have seen it happen in the past, where I've seen clients borrow the vast majority of what they're intending to put into the policy. So they go into debt. Obviously, you could tell the insurance company, I have the money in savings here, because technically you turn debt into cash. You have the money sitting in savings, and you can prove that. But still, the money derived from debt. Again, you don't tell the insurance company that because if you say that, you're gonna get denied. If you don't say it but you still do it, what are you doing? You are injecting risk, potential risk. So you want to first say, okay, what is the risk? Not just does it make sense, it's what is the risk of me borrowing from my home equity line of credit to max fund a whole life insurance contract? Basically, what you're saying is you're gonna leverage debt at this 8% to pre-fund, max fund this asset over here that's gonna grow at a negative return the first few years. So no matter which way you slice the pie, no matter which way you slice the pie, that will always produce a negative yield. The first couple of years absolutely produce a negative yield. It would take many years to produce a positive yield doing that. All right, just, just keep that in mind. Can you do it? Yes. Should you do it? It depends. Do you have the stomach? Do you have the financial stewardship management, debt management capability Wherewithal, confidence to consistently borrow from HELOC, max fund whole life, borrow against the whole life, pay off the HELOC. By the time it gets to the anniversary date, your HELOC's at zero, and then you do it again. Max fund the policy, you keep the loan outstanding, but now you have a loan interest cost. You have to factor that in. So you do that over and over again. The idea Is you want to wean yourself off of doing that. You don't want to do that forever because you're gonna have a massive loan built up in the policy with a lot of interest. And you're, you know, there's what happens if the HELOC reduces in value? What happens if life happens? What happens if you lose your job? So now you got debt and debt over here. So now you run the risk of losing a perfectly good asset And the equity in your home is stripped. Process that, sit with that. Does that make sense? Am I willing to do that? Okay, those are for people with second lien HELOCs. People with first position home equity line of credit, you have all your income going into the HELOC already. You're technically saving money In your HELOC. I operate this way. I have a first lien HELOC. I make money through business. I pay myself a salary. All my salary goes into the line of credit on this house that I'm living in. I pay all my bills and I save money in my HELOC. On the anniversary date of my policy, I I borrow money out of the HELOC and I max fund my policy. I then, if need be, will take money out of my policy and plop it right back into the HELOC, bringing the balance down. And I continue to do that year over year over year. Why does that work? Because of the nature of the account itself. The first lien HELOC is my checking account. All my income goes in, expenses come out, net cash flow stays in paying down the line. And then I can use the line to make investments or to save money outside of the HELOC, which is max funding the policies. That works. And again, even in that way, you're still— there's no positive return there. You're gonna be negative the first couple years. But let's say you have the policy for 8 years now, 9, 10 years. The growth of the policy and you no longer taking loans out of the policy, right? You literally are making more money. The idea is you wean yourself off of doing that. So in my case, I have my first lien HELOC here, I have all my whole life policies here. All my income flows into the HELOC, sits there, pays all bills, There's cash flow, there's an equity, there's a delta, right? I then take a piece of the cash flow and I move it over into my policies and I fund all my assets. Okay? Now, the idea is I keep making more money over time where I no longer need to do that. The HELOC will eventually go to zero. Once it hits zero, now I have the checking account that's linked to the HELOC. Income's going in there, expenses are being paid, net cash flow, that capital just funds the policy, right? For those of you who don't have a first lien HELOC and you don't have a second lien HELOC, the traditional way is you get a high yield savings account. So this is where you can get the value of both. Imagine having a high yield savings account. Earning anywhere from 2% to upwards of 5% every month, every year, throughout the years. You make money, you pay bills, you save money, you park that savings in a high-yield savings account, and you're basically building capital in your high-yield savings. And then one time per year, you take a chunk and you fund your whole life. Right, so now you're earning some interest over here, and then you earn some interest over there. So there's a flow of money that can occur where you have income, you save money, you park it in a high-yield savings, earn some interest for 11 months. By the 12th month, you max fund your policy. Now that money's growing tax-free forever. Rinse and repeat. So this is great for people who don't have HELOCs, don't have first, second lien HELOCs. You're— say you're debt-free and you're just saving money in a savings account right now and you're earning interest. You can begin to peel money out of there, take it out of tax and put it into tax-free, guaranteed, predictable growth and get death benefit protection, living benefit protection, etc., etc., etc. All right, so back to Jay's question. Can you borrow from a home equity line of credit to fund a whole life policy? Yes, you can. Should you do it? It depends. There's going to be scenarios where it doesn't make sense, and there's going to be scenarios where, not that it makes sense, you are just simply evaluating all the risk in it, and you're willing to take on that risk to fund this asset to earn all this potential interest later on. And over a long period of time, all the interest you paid over here, you earned it back over here over a long period of time. Call it 10+ years. Let's see, if we have that percentage trapped in bonds, is there a way to finesse that money into our whole life policy? One can just simply Say for example, Glenn, someone's contributing $1,000 a month into their 401, and 40% of that contribution is going to bonds. The adjustment that person can make is just contribute $600, or $700, or $800, whatever the number is. You tell the advisor. Put me now all in stocks. They can sell all the bonds, put me now on stocks, and then you begin to take the money you would have been securing, and now you're peeling it off and putting it into your whole life instead. That's one way. Depending on the person's age, if they're over the age of 59, with, you know, no tax penalty whatsoever, they can You know, sell their bonds, take a distribution, park it into the whole life. They're going to have a taxable event, of course, but if they're already taking income, they can take that income and then park it into the whole life. Before 59 and a half, a person could, if I'm not mistaken— depends on the employer, right? But either before 59, even after 59, They could roll over money. Let's say they had an old 401, they're no longer employed at that job. They can roll over that 401 into the new 401, or they can roll over that 401 into a whole life policy. One-time taxable event, but if I'm not mistaken, no penalty on the rollover into that whole life policy. So there are options. To convert qualified retirement dollars into whole life. People do that. And then there's people that begin to simply adjust their portfolio. So instead of taking a massive tax hit that year, they just begin to adjust their contributions. They're like, I'm just going to contribute money here and take the safe dollars and my savings. and now move it over into whole life. All right, thank you. I looked into First Lien CMG, but closing costs were close to $20,000 in New York. Yes, that is going to be standard with most banks. So that's CMG, that's First Savings Bank, that's University Bank, that's pretty much any bank that is offering a first position home equity line of credit. The closing costs are, uh, somewhat equivalent to doing a 30-year, you know, mortgage, regular, regular closing costs. In certain states, it can be quite hefty. California, Florida, New York— those are gonna be your states where the closing costs are just high, right? It doesn't matter what the product is, it's just high. The, the all-in-one cost, like not looking at third-party closing costs, because third-party closing costs is where you're getting the bulk of that $20,000. It's unavoidable. That's the state of New York. But when you look at CMG's fee, it's probably only like $1,500 or $2,000. It's like a flat fee. So that is a major advantage there. That's a value. So don't get confused by, oh, CMG has charged me $20,000. No, they're not. The state of New York is charging you the majority, the bulk of that $20,000. But if you actually look at the breakdown of the cost with CMG, You— they have a flat origination fee for their product, and that right there is often way cheaper than your 30-year conventional loan closing process when they charge 1% of the loan amount, which could be $3,000, $4,000, or $5,000. So CMG is only gonna charge you that flat origination fee if you are Buying the margin rate down, maybe that's why you have $20K. You have to pay attention. Are you purchasing down the rate, right, to get a lower rate? Mathematically, that may not make sense for a lot of folks depending on cash flows, income. If you're a high-income earner, you could just have the higher rate, and because you know how fast you're going to accelerate the debt, You're just not gonna pay the cost to have a lower line. So pay attention to see if they put in some margin rate paydown at all on that. That could lower the closing costs. Also, just have a conversation with them at CMG. More often than not, I've seen them work and do things to lower closing costs to do the deal, right? To make it happen, make it work for you. So that's huge. All right, Glenn says gotcha. Awesome. Any other questions before we go? I think we did good. This is awesome. You guys have my calendar link. For those of you who've never had a conversation with me before, there's your opportunity to have a conversation with me. I will continue to do more and more, like, proof of performance regarding this asset. I don't think there's enough videos showing proof of performance, so I figured, you know, as the guy who always does case studies Let me do more case studies now. Now that I've been in the business 8, 9 years, I now have clients who have had their whole life for 8, 9 years. It's pretty awesome to see the performance of it. So I'm bragging in a way, yes. And it's also increasing my conviction where it's like 8 years ago, I was going off of everything the illustration was saying. Now it's like I know it's going to do good. Like, I know it's going to work. So that's awesome. I will leave you to the rest of your weekend. God bless you. Thank you for your time, and I'll see you next week. All right, God bless you. Again, reminder, if you're a lifetime client, if you've done work with me in the past and it's been a year, it's been over 2 years, and you invested with me in the past, Reach out, book a call. You know who you are. I know you're watching the videos. I know you're watching the content. Uh, let me hold you accountable. Let's make sure you're hitting your goals. All right, so that's just your friendly call out accountability for all my clients and all the new people. You're getting to know me. Stay tuned in, watch the videos, get value. I literally put money in your pocket before we even have a conversation. How cool is that? All right, God bless. Have a good one. Bye now.