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In this episode, you're going to learn wealth tips that you think are only reserved for the ultra wealthy, but they're actually available for you right now. Listen in. In the last episode, we talked about how to set up your financial plan for wealth, success, and abundance. And in there, we had a couple offshoots on strategies. I would love to hear some strategies most people don't know about that are still pretty simple around insurance and retirement accounts. What you got?

I got some.

And I mean, in the last episode.

You dropped 15 knowledge bombs. You know. So make sure you wrote them down. Full of knowledge bombs. Share that episode, this episode, all the episodes, all the seasons with all of your friends all around the world, because we're here to truly impact and create massive shifts in the wealth. of this nation, 401, I'm gonna start there. First and foremost, a 401 is this actually a tax code. That's where that comes from. So it doesn't mean like $401,000, it's actually a tax code because the money that goes into a 401 can grow tax-free. So as that money is growing, there's no tax implications on that money. You're only taxed on that money when you start pulling it out. A 401k is very often if you are working for a non-government agency and you have a job, some jobs, some companies, some careers offer a 401k plan. What that means is you take a portion of your paycheck, very oftentimes the company will match a percentage of your paycheck and then they will stuff it into stocks. So to break it down, if you make $1,000 a week and your 401k is 10%, you're gonna be putting in $100 per week. Now, your employer, let's say they match 4%. So you put in 10% of your paycheck automatically every single week, and your employer puts in 4%. So that means every single week you're putting in 14% of $1,000, which is $140. This is an incredible way to build some wealth and to start getting into the game, because what it does is it builds habits. We've talked about habits before.

Habits are important.

Habits are important. So it builds a habit. It starts this process of growth where you're doing what wealthy people do, which is investing. Inside of that 401, there's a term called a fiduciary. A fiduciary is the company that's actually overseeing your 401. So let's call them. I'll give them a shout out. Edward Jones. So Edward Jones is a financial institution that's a fiduciary. They're overseeing your 401. They have worked with your company and they have developed and constructed a plan of what your money inside of your 401 is being invested into. Normally, 95% of the time here in the United States of America, it's called something like Target 2040 Retirement Fund. So at recording this, this is 2024. So 16 years into the future, you plan on retiring. So they're going to shove some of your money into this retire in 2040 fund. Inside this 2040 fund, there's a magical elixir of like 5,000 stocks, bond, international companies all blended together. And that's what your $140 per week is investing into. And that's how people can grow true wealth. Now, the average American, when they retire, I mentioned this probably 10 episodes ago, do you remember approximately how much they end up with at retirement?

Gosh, it was 130,000?

Yeah, you nailed it. So that's usually how that happens. So over a 20 to 25 year career of them putting in let's just say 140 to 250 bucks per paycheck, plus the investing of the stocks and bonds and international markets inside of your 401 grows to about $130,000. And so when people retire pieces, that's how much money they have inside that 401. Better than nothing though, better than nothing. Now here's the best part. So when I went to University of Florida, Go Gators, to get a finance degree, I didn't learn Anything, any of this?

No.

What do you learn with a finance degree? Is that somebody who didn't go to college? In my mind, I was always thinking, oh, I only don't know this 'cause I didn't go to college.

Yeah.

They must teach this in college, so I'm just behind. I always beat myself up. You're behind. That's why you don't know this. You just gotta figure it out because I thought they taught you all this stuff.

My wife sent me a funny Instagram reel last night. As I was teaching our son.

That's love.

That is love Sharon Reels. I got home last night at 8:30 p.m. and at 8:30 until 10, I worked on my son's eighth grade math test homework.

Oh.

And it's all about parallelograms and the volume of a cylinder and how to calculate the volume of a cone and things.

Did it just irritate the heck out of you?

I'm so irritated. And the reel that she sent me was Thankfully, I learned so much about parallelograms in school because it's parallelogram season and it's really important, right? It's like, well, taxes are coming up actually. And so, you know, we learned in finance at a top 10 business school, accounting principles, managerial economics. I don't know what that means to this day.

Managerial economics.

I still have no clue.

How do you not know? Everyone knows that.

All kinds of people do. So I'm going through this, I'm learning none of this and I get a packet at my desk at Nationwide Insurance, and that packet was a 401k investment plan. I was like, well, I don't know what that is. I'm going to school for finance. I should read this. So I read the packet cover to cover. And turns out you can do all kinds of cool stuff in 401ks. Like, you can self-manage most of them. A lot of times you can manage a 401k. Now, when I say manage, I don't mean like you can take your money in there and buy whatever you want all the time, although in some fiduciaries, back to that Edward Jones example, you can do that. But 85% of the time, they limit what you can do inside of your 401, but what you certainly can do, everyone listening to this, 99.9% of the time, you have the ability to sell whatever positions you're in and be in cash. And then you can take that cash and you can rebuy your retire in 2040 fund. And so I did that for the first year is I would go in and buy and sell my retired, I think it was 2040 or 2060 plan, 10, 15 years ago. And what I was doing was I was kind of trying to time the market. So when the market was really high and I felt the market would drop, I would sell my retire on 2040 plan and I'd go to cash. Then when the market kind of dropped a little bit, I was like, all right, the market's down 5 to 10%, I would then rebuy it. And I saw that wealth begin to grow just doing that. My number really started increasing relatively dramatically. So then after about a year or so of doing that, I had about $10,000 into my 401k and I learned about self-directed 401k. Now self-directed 401k is when you can choose yourself what you invest in and it's all your decision. So I sold all of my retirement and 2040 fund, I went full to cash and then I logged into my fiduciary, which was Charles Schwab, traded in Charles Schwab and bought A very first stock, first majestic silver ticker symbol AG.

Oh, that's silver stock.

Going all the way back to season one.

Made you so rich.

It made me so rich for a period of time. I made a bunch of money and then I lose it all. But what was cool is I took $10,000, I bought that stock. It was at $10 a share. So I bought a thousand shares. It went up $3. I sold it. I made $3,000.

Right?

Thousand shares, moved through bucks, $3,000.

That was more than I made it.

Work in a month.

Yeah, that's pretty good.

Pretty good. So I was like, whoa, there's some good things going on here. So then I started learning about IRAs. An IRA stands for individual retirement account. Oh, simple as that. Amazing how many people probably don't know that.

Yeah, and there's probably about seven or.

Eight different types of IRAs. I'm not going to go into all of them in this particular episode. Just message me if you want to learn more about it or Google it or hop over to investopedia.com, but IRAs. these are again tax sheltered events, tax sheltered vehicles. When you're in an IRA, your money can grow tax free. So as you grow your wealth inside your 401ks or your IRAs, you really have a beautiful tax shelter. So you don't have to pay any tax on these gains. It's just a nest egg sitting over there. Now, what you love and what I love, and this is some next level stuff, once you start getting a decent amount of money into an IRA, in my opinion, that's over $25,000. you can start doing some really cool nifty things in there. Once you get over $25,000 in an IRA and in some 401 s is you can borrow against that money and or you can use that money through what's called a custodial and you can literally use that money as a self-directed IRA or self-directed 401 and you can invest it into real estate.

Hey.

Hey. Now in just the next episode, we're going to talk about some of Brittany's favorite real estate and maybe non-favorite real estate of investments, we're going to go over some real estate and it's going to be an absolutely banging episode. But I think that is a wealth tool that so many people don't know about. Because let's say that your name is Iris, you have $120,000 into an IRA, you can take that IRA money and you can invest into all kinds of things. You can invest into a duplex, you can invest into a rental, you can invest it into businesses, right? You can give it to a real estate flipper or a professional real estate person and they can give you a return on that money. There's so many things you can do once you start hitting a level. Now, I tell people all the time, Brittany mentioned this in last episode, $100,000 is a big, big number for a lot of people and that's a big dream for a lot of people and that's because once you make $100,000, you now have more dollars than days left in your life. So, once you have $100,000 liquid, that's when you can really, really start using this at massive impact to start buying time and to start leveraging your money and letting it grow. Also with $100,000, you can start investing in a lot into multifamily as what's called an LP, limited partner. And as a limited partner, you have limited risk, but you also have limited returns and there's all kinds of things. But limited partners, you can start buying a ticket into the room. How many times have we used that term?

It's important to get in the room. There's something about the proximity that is so powerful. You've heard the phrase proximity is power, proximity is power. And the easy breakdown on that. It's not like you're bribing people, but it's just so much easier for people to make a phone call introduction to people that would take you 10 years to get in front of. And so if you just are friends with people that have access to places, then you can share your really great ideas. I was on a G-Force entrepreneurs call yesterday, and this woman is sharing her vision on Giving babies who are born with addiction because the mom was a drug addict. Like, how do you take these babies born that day who the mom's abandoning, who are just screaming, screaming, screaming for heroin, screaming, screaming, screaming for this? Like, it's really a nightmare situation. And how do you give them the love and safety to help them get out of that and into loving homes versus just thrown into Foster care system. And we talked about her creating a rapid response team for being able to deal with that. And how do you even get in front of people? And so we start talking about who's in your network? How do you actually meet with the hospital administrators? So the point is, again, a lot of people view having this big network as something bad or like, oh, greedy big people have. I'm sure they do.

Sure.

But let's make sure the forces for good have it as well.

Yeah.

Get in the room.

But, and that, that's a way to buy a ticket into the room. Yeah. I started doing that relatively early is I would take some of my money and through an IRA or 401k or some other investment retirement vehicle, and I would give it to a professional investor and I would learn all kinds of tips, tricks and fun things because I'm now an investor. So I'm getting the emails, I'm getting the reports, I'm getting the newsletters, I'm giving the updates. I'm just learning, I'm learning new words, I'm meeting new people. They're inviting me to conferences, I'm going there, and I'm just learning so much as being an LP, a limited partner into different investments. So you can do that through your retirement vehicles, which is amazing. You've already talked tons about home equity and how to use home equity, which is super, super cool. But one thing we haven't talked a lot about, if at all, in broke to oak, is special types of life insurance. And fun fact, the amount of things that you can do with life insurance is bananas. Now check this out. If you're listening to this, you probably never heard this before, because that's what Brittany promised in the last episode. There are some people whose wealth is so unimaginably large that they never have to go to a bank. Ever.

Never.

They don't go to banks. Now, I still go to banks. I'm not there yet. I'm not at the, I don't go to banks money. But once you start getting over about 100 mil, there's no need to go to a bank. And here's why. There's a particular type of life insurance that you can buy and Oftentimes it's called whole life insurance, but generally there's different names and different terms depending on who you ask and who you talk to. But you can buy this type of life insurance and there are tons of life insurance agents out there. I mean, they're like real estate agents, they're everywhere.

So you know somebody.

I do, I do. My wife is a licensed life insurance.

That's an interesting side thing.

This is a cool side hustle that she has. She does really well at it. She's very, very smart, but the reason she got licensed, is because her husband died. And when her husband died, she had all these huge financial issues and all these huge problems that occurred from that. She's like, I don't want other women or men to ever face this again. So I'm gonna learn everything I can about life insurance to protect people from that. So she stays up on her license. I did learn a lot from her, but granted, I knew a decent amount about this before me and my wife got married, but she taught me a little bit more. But yeah, she has a license to sell this particular product, and it's a very, very fascinating product. So how do very, very wealthy people never go to a bank? They front load this whole life insurance policy.

Tell me what that means. What does that even mean?

What does that mean? So I have a $10 million check with my name on it. I put $10 million into a whole life insurance policy and I let it sit there and marinate for about a year.

Okay.

After a year, I can borrow against the life insurance value and my cash surrendered value of that policy. So I put in 10 million. These policies grow at a guaranteed rate per year.

What's that guaranteed rate typically?

Usually somewhere between 4 and 7%.

Okay.

So it's not a lot, but it's not zero. So it's growing at a guaranteed 4 or 7%. Now here's the best part. I put in $10 million two years from now. I now want to go buy a yacht, a hotel, a giant apartment complex. I can then pull out, let's say $8 million out of my policy. Now, when I pull that money out, it's tax free. Wow. So I don't pay any taxes on it.

Wait, was it taxed on the way in?

Nope. Ooh, super cool. Pull it out. I have no taxes. And the money is still growing at that four to 7%. As if you never took it out.

All 10 million?

All 10 million.

What?

Yes. So it's as if you never actually pulled the money out because you're borrowing from yourself. And then if you want to pay back yourself from this apartment complex or this yacht or this whatever development that you just built for this $8 million, you then can pay yourself back. Now, if in the interim something unfortunate happens and that person who pulled that money out, they die, the $8 million is simply subtracted from their insurance death benefit. And if you put in $10 million into an insurance policy, you're buying probably somewhere north of $100 million of life insurance. So that means 100 million minus eight is $92 million that can be rolled into your family's generational wealth track. And that is an incredible possibility. And then with certain writers and with certain agencies and with certain situations and setups, you can do all of this tax free. It can roll into your estate. It doesn't get taxed. Now you can live off of that money and it becomes a generational wealth thing. and the best part, these policies don't expire.

What?

Yeah. So a term life insurance policy, you buy 20 or 30 years.

Yeah.

A whole life after 20 or 30 years, you just stop paying into it.

What?

You just stop paying into it, but it's still there.

Why would they let you do all this? Why would the insurance company let you do all this?

Yeah, they're taking your money, right? They're giving you 4 to 7% guaranteed. But they're taking that money and they're making 10, 20, 30, 40% off of that.

Right. But if you could take out your own money, what do they have to play with?

Numbers on the screen.

Pools.

Numbers on the screen. Oh man. It's all money is.

It's just numbers on the screen.

Anyway, dang. And so what's cool about this is this is a concept called, ready? You've heard it a million times, I know. But for my listeners, infinite banking. Infinite banking. That's what this is called. The infinite banking concept were created by a guy named Ralph Nelson, I believe. No, sorry, Richard Nash. Richard Nash. And this infinite banking policy and concept is how very, very wealthy people will put a bunch of money into a whole life insurance policy, borrow against that forever. That money continues to grow as if it was never taken out. They never pay taxes on the money that they pulled out. They can take that money, buy whatever they want to buy with it, and then they fund themselves again.

Well, this is an amazing policy, but how do I start if I don't have $10 million? Wrap it up very succinctly. How do we get going? That's what we're trying to figure out. That we don't have $10 million to swoop in there.

We're not super wealthy yet. Of course, no. What would you do? You can do this with any amount of money. Hey, you can buy one of these policies if you are 22, which is.

When I bought my first one.

And you can do it- I was 22 when I bought my first one. That's crazy. And you can do it with whatever $109 a month, right? I think that was my policy. I put $109 every single month since the age of 22. Just recently, I've started pulling out against some of my policies to go buy some assets that I know are going to go higher, which at the time was cryptocurrencies. Yeah. And it's still growing at a guaranteed clip. I'm still making my money and I'm paying myself back using that exact policy that I bought at 22.

Yay. Boom.

Super cool. So ladies and gentlemen, there's so many awesome, amazing wealth tips and tricks out there. And the reason that Brittany and myself know this is because we were in the room. It's not because we were smart, it's because we asked. talking to people. We ask really, really great questions. And one of the questions that I want you to learn the answer to is what type of real estate investing Brittany despises and or likes. I'm gonna ask her some really poignant questions about how she's doing and what she's doing in the next episode of Broker 2.0.

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