Richard Canfield, Che O'Brien, and Garrett explain how whole life insurance policies work as a family capital pool. When you take a policy loan and pay interest, that money stays in the insurance ecosystem rather than leaving your family. They use Nelson's money pool diagram to show how mutual insurers manage inflows and outflows, and argue this mindset shift toward acting as your own banker builds long-term wealth.
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We're so conditioned to think loan payment bad. Interest payment bad.
I'm joined today by two incredible gentlemen from our American area of the company. I've got Che o' Brien here joining us for the first time on the podcast. And I've got Garrett making his second appearance.
We always joke that they know when I'm going to die, but I don't know when I'm going to die.
Policy owners is number one. Because you're a co owner, you have the first right.
Put your capital in a system that's been proven to work. They're really conservative. They're really careful. When you're talking about repaying loans, Richard, I think we're so conditioned, too, to think, oh, this is a loan payment. And, like, getting used to wearing the hat of the banker hat just takes. It takes practice, right? Like, I've been doing this for six years, and I still. Sometimes I'm like, I don't want to pay back the pol. Like, paying a policy loan and interest is not. It doesn't feel good all the time. It's because I'm still wrapping my head around what that means to be a co owner and that you got to wear the banker hat. But it's just, we're so conditioned to think loan payment bad, interest payment bad.
And a really good place, Garrett, that you're mentioning this, that I want to reference people, is if they have Nelson's book and you guys have yours there. I want you to flip to page 26. So if you guys listening, go to page 26 of your book. And you'll see at the bottom of page 26, Nelson has a diagram called the money pool. Now, the money pool diagram here is all about, you know, the. The inflows and outflows of the. Of the insurance company. It's not everything. It's a simplified view. But look, printers come in, they gotta pay for expenses. That's the people that work there. They gotta pay the heat bill. They got a building to maintain. They got a technology system, they got a phone system so you can call them. You know, they've got a couple of executives and VPs. There's an actuary that designs the product. Like, these are all people that need to get paid. That's got to come out of that deal. Another expense line would be taxes. The insurance company pays taxes to the federal government and probably to the state. All right? In Canada, they have that set up where there's. There's something called premium tax. Premium tax is technically paid by the policy owner, but they don't see it because they pre bake the cost into the premium. Yeah. All right. They think everything, it's a pass through from the policy owner directly to the tax authority. It's just pre done. So they simplified it for everyone. So they don't even really know what's happening. But it is happening in the back. Right. They got to pay for death claims. Claims come out of there. Well, then they got to take, they got to put money to work. It says there's three, there's three key places. They got policy owners, mortgages and joint ventures. Now we could just call that investments as one big bucket, right? Yeah. They got to invest money. They also own a bunch of bonds and stuff like that. And a lot of those things have a repayment model to them. Well, there's, there's money goes out. Money comes in. Money goes out. Money comes in and out of the hierarchy. What Nelson's trying to establish is the hierarchy. Who's at the top of the food chain. Policy owners is number one. Because you're a co owner, you have the first right. You as the individual and the ownership mechanism have the first, first right to access whatever value your policy has from the big pool as collateral before it goes anywhere else. That's your percentage or level of control. It's full autonomy and control at whatever your equity position is. Now I got to put the money to work anyway. They're going to put it to work.
Okay, so you want to keep the.
Wealth in the family.
I get it. I hear you.
Me too.
That's why we wrote this book, Don't Spread the Wealth. Everyone tells you that. You want to spread the money, spread the wealth around. No, no, no, you don't want to do that. You want to keep the money in the family with the people you love and care about, where it belongs for as many generations as possible. That's what we talk about in this book. In this book we have an incredible 15 page bonus you can download which instructs you on how to start the conversation with your family, on annual family banking meetings, how to host them, some sample exercises and a sample agenda. Tons of amazing great benefits. Go ahead, get a copy. Right, right. Now head on over to Don't Spread Wealth. That's Don't Spread Wealth Dot Com. Don't Spread wealth dot com.
You're going to love it.
They can choose to put it to work somewhere else or they can put it to work with you. Where do you want them to put it to work? I don't care. Just put it to Work. So if, if the three of us are all with the same insurance company, and Garrett, you take a policy loan and you're paying some interest and it's, It's. It's accumulating. Maybe you're not even making payments and it's accumulating. Well, that's reducing the net death benefit that's going to come out when you get paid.
Yep.
Well, if you look at the diagram, death benefits is an outflow.
Y.
So we've just reduced the outflow, which means that the net result is the same. It's either an inflow of interest coming in or it's a lower outflow. It's still a benefit to Che and I because we're in the same pool as you and our families by, by, you know, essentially being connected. So that's really all this is. It's just a closed ecosystem of free people all over, you know, just happen to be connected unknowingly through contracts across the, across the nation. Yeah, it's so cool. And with. Yeah, you don't have to ask permission to do it. You voluntarily protect your family and get access to capital as you build it, and you can mutually be profitable together because the, The. The insurance company's got to put it to work. It's going to put it to work. Some of it can be with you. Yeah.
So good. It's also, I, I love being the, the analytical nerd that I am. I used to work at a CPA firm. Jay. We still like that.
It's okay.
Yeah, it's okay. But just how the, the stewardship that life insurance companies show and have is just remarkable over their existence. Like, why would you not put your money there? You know, they've done. They've paid out dividends every year since they've existed through the depression in 08. Like, tell me something that's done that. You know, so it's just remarkable embargoes.
You know, wars, multiple wars. Every financial calamity that's existed in the last 200 years, they've managed to weather it better than any other organization on the planet, and they've been consistent. And yet people. People who learn about this will say, oh, but it's too good to be true. I'm like, well, if. Was it too good to be true 200 years ago when everyone was.
Well, what I love about it is, like, the meticulousness of it. So what you were describing about the, the tax, the premium tax being baked in, it's. It, it works and it's profitable to the policyholder, even with that baked in. But they've thought of all of those costs on the front end and you know, we always joke that they know when I'm gonna die, but I don't know when I'm gonna die. Like, like they know more about me than I do, you know, so but it's just, it's amazing the and like the history of that. Like they know more about the population than you know, which is and it's great but it's just incredible to see that and to, you know, to put your capital in a system that's been proven to work. They're really conservative, they're really careful and they do a great they do what they're, what they say they're going to do.
Go ahead, check out the next video down below. And if you want to make sure you get a copy of Don't Spread the Wealth so you can have family banking meetings that actually matter, go to don'tspread wealth.com don'tspread wealth.com.
