Nelson Nash: The HIGHER The Interest Rate You Charge The BETTER (17 of 30)

IBC is a totally different paradigm. It's really a personal lunar system. See, that's the problem. Life insurance as we know it, whole life insurance should never been called life insurance. It changes characteristics totally, as we shall see before our course is over. You've got to develop new habits. You can't live the way that other people live. You can't think the way they do. Now, fatal error is thinking. It's a matter of function of interest rates. But there's the stumbling block that prevails in so many fields out there today. The minds of people. You got to recognize where money is flowing to. The failure of charging interest for yourself is the things you buy using your own banking system. In other words, don't steal the fees. This is so important. Anytime you can eliminate the payment of interest to others, direct that same market rate of interest to an entity that you own and control with minimal taxation, you've improved your situation. Now, Monica, I think it was you that I heard say earlier that it's somehow ingrained in the Chinese thought process. Loans is bad. Is that right? Was it you? Well, if you're the banker, loans is good. Loans, yes. You think so? We're not talking. We're not talking about investment anything yet. We're talking about being a banker. The higher interest rate you charge, the better if you're the banker. You know, I think a smart thing for life insurance companies do is consider having a subset for people who understand banking and charge all those folks policy loans on 20% interest.

You built a microcosm.

That would work.

If.

They got a higher dividend? Absolutely.

Well, of course you would.

You can't help. That's the only natural thing that can happen. They would have to.

Yeah, and that's the most.

I mean, think about it. If you're going to limit the people, if you have direct recognition and you're limiting the return for the person who has a loan, why not reward the person who is willing to pay.

Exactly.

Market red interest?

Absolutely. You know, if they could do such a thing. Yeah, I participate in a heartbeat. Okay? But that's the way things go.

Now. I'm a very slow learner. Would y' all believe I took Fortune magazine for 35 years? I'm wading through 24 issues per year, Wayne, plus two bonus sessions to find one decent article.

Because you see all the articles in Fortune magazine is about, look how good old Ken Lay is doing with Enron down in Houston.

Look how good old Bernie Elvis is doing with WorldCom in Mississippi. Look how good old Richard Scrushey is doing with Health south in Birmingham, Alabama. Wayne, his bonus that year was 110 million. That's his bonus now, by the way. For the last several years.

Richard Scrucey's been living in a gated community called Fort Leavenworth.

They give him shoes.

They finally coming up with him. He was the governor of Alabama at that time. We're in cahoots of defrocking people money. And so the governor is still there.

Rich is out harassing the public again.

All right, well here comes the good rule. Barry and I've been to the Far east for a month, vacationing. And we come back and here's that pile of mail. And so I'm wading through all that stuff. And here's the second issue of Fortune magazine cover story. The real key to building wealth, Economic value added. A concept put together by Stern Stewart consulting firm in New York.

They have clients like Coca Cola, Richard Stratton, hinges, Quaker Oak, CSX railroad, folks like that run by Harvard MBAs and so forth. Now Stern Stewart is teaching these brilliant business people that look guys, you don't got money in capital. You stop. You got money you borrowed from banks. Now this shouldn't do bad. I'm sorry, you don't got money borrowed from banks. You're paying those interests folks interest. You aren't charging yourself interest for your own capital. That's violation of Finance 101. Capital always have codes cause act like it. And so Stern Stewart is making millions a year in consulting business, teaching.

High priced executives, Wall street firms, Finance 101. Now that's got to be the most absurd scenario I can ever think of.

Now the author of the article is Sean Tully. Sean Tully says, how in the world is this happening? His explanation, they're listening to accountants. Accountants don't think this way. Accountants think around the IRS code.

They think if I can't show you a tax advantage of some kind, I would earn my fee.

So Stern Stewart is teaching them Finance 101 and making all kinds of money. Because by making sure that they're paying themselves interest on their own capital. Now they know buyers know that the value of their company is going to increase every day of every year. Rich, that's exactly the definition of a life insurance policy. Now I'll be leaving you guys tomorrow and we've had a great day of fun with you guys. Thank you for letting us be here, Jason. Thank you, sir. Appreciate you. All right, now, do you all know my cash values are going to be increasing as we drive down to 11 worth.

And when we do some more sightseeing around the Seattle area, my catch beds will be increasing. And we get on that airplane driving home, my catch battery is going to be in Grace.

Stearns. Dude is chump. Making all kind of money teaching Harvard MBAs that fundamental principle. Good lord.

What is this moral candidate?

Now let's think this thing through.

Did you all know a town with 35,000 population.

Nacogdoches, Texas is. That's the oldest town in Texas. Piney woods of eastern Texas, due north of Houston, kind of due south of the Bat Sharks. Shreveport, Louisiana. You can't get the napkin dutchess from here. You gotta go one of those other places and then go anyway.

CSF railroad has 35,000 employees.

Now let's just suppose we're gonna play a game here. Let's suppose Sturman Stewart says you don't need to do business with us.

You go to Edmonton, Canada and there's a guy up there named Jason Lowe.

Buy high price life insurance on all 35,000 employees.

The higher the premium the better.

Now you know in about two or three years they get a ton of cash values.

They need to buy some locomotives. And so they call Jason's office and say Jason get us 50 million dollar fossil loan. We will buy some locomotives.

Jason gets them the money, gets them an amortization table for an agreed number of years test time. What is the interest rate that Jason's going to charge Margaret Roof? 10%. What's, what's, what's affordable charging?

What's Jesse gonna do greater than seven? Oh, that's meaty mouth. I need numbers.

Probably 10 to 12.

10 or 12? Yeah. All right. Now Richard, aren't they gonna pay off the loan before they finish the schedule? I bet you they will if they don't finish the schedule. Are they obeying what I'm teaching?

Stealing the piece?

That's right. Well how do you rectify that?

Slap them around a little bit.

Yeah, what you do is you buy another policy on all 35,000 employees. Now you know you can get Copper Tunnel filling out all them applications.

It's all done online. Every field of work has problems with it. That's your problem. You can get carpal tunnel fill out on an application.

Now.

I've been to Nacoge's a while.

They have a newspaper there.

I've never seen one of their newspapers without an obituary column of Tyler.

Tyler. Somebody in Nacogdoches died every week.

Is this registered? If.

CSX Railroad did what it got through saying, did you know that CSX railroad would have a death benefit every week.

Wouldn't that be tax free?

Well, why aren't people doing this?

They don't know.

Whoa, what's your job?

Do they need to learn this?

Absolutely.

All right, do you see the vastness of this?

Let's amplify that a little bit.

Do you own with a FedEx.

Freight line? Is Memphis, Tennessee?

Y' all know the story of Freddie Smith Broke, huh? When he started FedEx, he was down to the nitty gritty.

Like three days from belly up. Well, yeah, back there in the time that he was putting all this idea together, he was saying to the professors he was going to buy create this transportation company where goods were all shipped to Memphis and they play fruit basket turnovers and they'd all go back to the locations of where the merchant I was going to. And the professor says, there's no way that'll work.

So now Freddie Smith sends him his financial statement every year.

How many airplanes do they have? How many trucks do they have?

Do you all see the possibilities that's out there?

Well, we got to start from where we are. We've got to get a few to the point where this begins to get momentum. And when we get 10% of the financial world to understand this, it goes viral.

People quit thinking the way they used to think then that's our mission. And that's going to involve lots of people that understand this and participate in this. And that's why we created the Nelson Nash Institute.