Shawn explains how his family uses whole-life insurance policies as a banking system, with his son learning through exposure to a loans spreadsheet and informal conversations. He holds four policies across his family and plans for his son to open his own around age 18 rather than inheriting them.
Questions this video answers
Four policies (two on Shawn, one on his wife, one on his son).
Equitable (referred to as "equitable CA").
Around age 18—"in a year and a half" from the time of the conversation.
Chapters
Having a long range system of thinking for Bitcoin, really, really helpful. Put whatever you think you want to in and have a plan for five, 10 years in the future, future generations. Fantastic.
Now I'm curious. Was, you know, because you, you do have discussions, you've obviously got the books, you know, they up, up on the wall, you know, you know, your son will have learned at some point in time a number of years ago that this was important. He knows you're talking about bitcoin all the time. He's hearing these things or whether you're actively in discussion with them or it's just coming up, you're on the phone, you're on a zoom call. You know, people do a drive by and they overhear some things. It tends to settle in the mind a little bit. Has there been some interesting conversations prior to this loan experience that you've had with your son? And have you had some, you know, inquiries from him about this at a bigger scale at all? I'm just curious, what are, what's being a fly on the wall in the Iron bank system like for your son?
Yeah, I wouldn't say that we ever had like had a huge in depth conversation, but it has been a lot of that, like maybe sort of like you said, drive by like, you know, in terms of both learning about Bitcoin and about the infinite banking, you know, we don't talk about either one constantly, mostly because my wife is sick of hearing me listen, talk about it. And I do talk about it a lot outside the house.
So that happens at my house too, by the way.
Yeah, right. But we, you know, he's understood that we have a different way of doing personal finance, of doing our finances than a lot of people do. Right. The idea of taking loans and repaying loans more than one loan. Right. Because he's seen the spreadsheet that we talked about in our first, in our first podcast together. Right. Sort of having that spreadsheet that details all the different loans that you've got. Right. Having more than one out at a time showing that there's a repayment schedule and you've got to pay it back. Which is of course the lesson of the Iron bank is that you must pay back your loans. Right. Or the bank, you know, you'll be in trouble with the bank. But of course, I am the banker. But I have to have that mindset with making sure that the customer also me repays those loans.
Well, just identifying yourself as the customer and separating the customer versus the bank owner is an important distinction. And the way that you're doing that does matter, you know, and I'm kind of curious, you know, we, we talk about a variety of way that people, you know, everyone who starts this process, if they have kids or grandkids, they are automatically, you know, we're fine tuned to want to do things for the younger generation of our family that we often won't even be willing to do for ourselves. And there's this, you know, that, that, that parental insight to do that. And a lot of times I'll see folks, they will get policies, let's say, started for their kids at various ages, but in their mind, they'll then separate that from the rest of their systems. Like, oh, no, this is for my kids in the same way that they might fund, you know, an RESP plan or in the United States, a 529 plan, and they're funding that for, say, college funding. Let's just say they separate this element out and it's kind of like a set it and forget it model. But the reality is it's all capital access, that if there's a way to create efficiency in your life and you can tap into this bucket for something today while you've got kids living in your house for the next 10 years, when they're the most expensive, by the way, is when they're living with you. At least that's what I'm familiar with at this stage of life. Maybe, maybe I'll, I'll readjust my thinking as I. My kids get older. But the reality is you can be using that to do things that benefit everybody in that time frame, rather than waiting and letting it sit on a shelf doing nothing, collecting dust, essentially. So in the same way that you see that we, we've, we found that some people want to turn the keys over and hand over the policy or transfer ownership, let's say, to that child at some point in time, they're discussing that right out of the gate and they're wondering when the time to do that is. Now, my feelings about that is that I don't ever plan to do that and I have my own reasons for it. Is that something that you've, you know, maybe when you first got started, Shawn, to where you're at today in the journey, has there been any change or shift there for you in your thinking?
Well, for me, like with. Because. Just because of the nature of the size of the policies that we have. So we have four policies in the summer's family banking system. One on myself, like I said, one on myself. My wife and my son. And then I opened a second one on myself a couple years ago. Now, you'd have to tell me the date right off the top of my head. And because his is much smaller, he's younger, you know, we couldn't make the premium super huge. So it's not, it was always a little bit smaller. So we didn't need it necessarily to function in the part of the system. So I've always kind of thought of it as that's a little bit his system for some of his use. And I planned from the beginning to sort of like have this, something like what happened happen. He's going to want something and I'm going to suggest you take, take a loan from that. Right. So that did end up working out, I guess, pretty well. I didn't know when it was going to happen or if it was going to happen, but that was always something I was kind of hoping to be able to do. And that way we can sort of take a look at that policy online@equitable CA and just say, hey, look, here's all the different facets of this, here's the, the policy values and everything else. But like you said, I don't really, I was going to even say, like I don't intend to sign that to have him be the owner of that policy. I'm hoping that because I've taught him well enough, he'll want to open a policy when he turns 18. Right. In a year and a half. Right. In a year and a half he can get his own policy. Right. And in a year and a half he'll be in maybe college or university, but he'll also have a job. And you know, if he needs some help getting it started, paying, I can help with that. But it'll still, that will be his policy. And then he'll use what he's learned to be able to start doing that in his own life. Right. And then, you know, keep going with that. That's. I think I always felt that that was the intention is to build that larger family system. Right.
Yeah, I love that and I think that's great. And the fact that he's learning the lessons now, he can already start pre planning for it. You know, you're planting seeds and you're just watering the seeds in his knowledge, in his brain so that he's going to understand what to do at various stages of life. And you, you and your wife maintain control, ownership over the policy you have on him. Well, when you're gone, you know, you know, contingent owner It'll pass on to your wife. And then she would need to make an update on who the contingent owner is at that stage of the game to now position it so that your son would become the owner when she's gone. And then, you know, if that's the natural turn of events, then he's going to end up with it anyway, regardless whether there's a loan on it or not. If he's. If he understands the human elements, human action, the implementation, the utilization, borrowing and repaying, the core fundamentals of Nelson's Rules that he teaches us, then he will be able to have the ability to do whatever is necessary for that. He can, you know, as he takes care of estate values that happen. He can pay off existing policy loans. Now he's got a policy or multiple that he started on himself, that he manages and controls on a daily basis, and he's going to have this other one that's been there since before he even knew it was a possibility in his life, operating in the background. I think that's just an absolutely incredible big picture methodology that you're creating in the system. I'm super pumped about it. The Iron bank will live on. We have a ton more amazing conversations and great clips just like this. If you go right here, or if you want to watch the rest of this conversation, the full episode, click right here.
