Grow your money like a bank with Scott Schwarz

I am Travia Steward, and I want to help you move past barriers and obstacles that are preventing you from getting what you want in life. This is Breakthrough. Money is a rigged game, and it's been that way from the start. You know, if money was a game, many people would know they would consider themselves to be on the losing side of money. And because money is only for those born in wealth, money is scarce, you need money to make money, we need to hold on to money, more money equals more problems. We've all heard a lot of these things. My guest today on the Breakthrough Podcast is here to prove to you, to me, to us, that all of these statements are absolutely wrong. To introduce you and myself that money is actually not a mystery. He's gonna share with you a process of how to make bank like a bank. My guest is Scott Schwartz. He's a 30-year veteran of the insurance and financial services industry based in Kansas City, Kansas. He's also the founder of Never Too Much Money. I like hearing that because I want to feel like it's never too much money. I want to have never too much money in my bank. So Listen up, keep listening as Scott starts off with his breakthrough story.

Well, I kind of got started in the entrepreneurial world by accident, by, by mistake. I was a corporate guy for many years, but throughout that time I really felt locked in a bad marriage for years. And as long as there was food on the table and a roof overhead, I was getting by okay. And so in 2007, I lost my job. Corporate buyout, new owners made changes, no fault of my own. All of a sudden, I was out of work right as the economy was getting really bad. So it was suddenly became very hard to find something else. And so what started happening, it was a cycle. Unhappiness at home. Now the food on the table and the roof overhead weren't coming so easily. And instead I'm getting collections calls, I'm getting foreclosure warnings in the mail. And that was increasing the pressure at home, the, the marriage problems. And sad to say, I became an alcoholic. And it got bad enough, the, the financial problems got bad enough to where to have some income, I went to the animal hospital where my then wife worked to to help in the kennel, which meant that I was walking dogs and cleaning out poopy dog cages. So if you can imagine, my previous work, I was management. I had a good job for a very reputable Fortune 500 company. And now I am literally cleaning up dog poop. Huge blow to the ego. And again, so the cycle got worse. The marriage problems got worse. The self-medicating got worse. A friend of mine heard what I was doing for work, took pity on me. He hired me on in his floor care business. So I was sweeping floors and waxing floors by night and cleaning up dog poop by day. And I'm sure you could imagine, Travia Steward, I'm— so I'm walking in this large open lot next door to the animal hospital And of course you've gotta keep your head down as you're walking to watch where you step. And by the time I was done walking all these dogs and I come back inside, my neck, shoulders, upper back would be sore, would be in pain from being focused on my feet. And I remember thinking how ironic this was, that here at a time in my life when I was hanging my head emotionally and professionally, now I'm also doing it literally to the point where it's causing pain. In time, I got— I found a new job doing something similar to what I was doing before, a good job back in the insurance and financial industry. And, but by now the compulsive nature of the drinking, you know, had full hold and, and it was getting progressively worse. One Friday, I had the brilliant idea of sneaking in a bottle of vodka with me as I returned from lunch into the office, was discovered and was terminated. So now I've lost that job too, that Another good job that I've lost. And that led to my rock bottom moment. November 3rd, 2015, I wrote out my suicide note. I figured that I was worth more dead than alive to my then 14-year-old daughter, and that instead of being a drain on her, holding her back, that, uh, that was the best thing I could do for her. Um, a number of things happened that day to lead me to wondering, is God stepping in telling me not to do this? And, you know, finally that night, right as I was— had scheduled that now was the time I'm going to do this, it became obvious. I got a phone call from a friend of mine asking how I was doing, right as I was about to, uh, go to the car. And, uh, I'll leave it at that. Um, so now I know God's stepping in telling me, don't do this. And that date that was going to be my suicide date has instead become my sobriety date. Haven't had a drop since. But the financial problems, of course, now I've got no job. I had already been bankrupt. I had been on food stamps. I had short-sold the house. By now I was divorced, had to short-sell the house after the divorce. I did one of those medical experiments where they have— inject you with medication that's not approved, and you stay overnight in their facility. To monitor how you react as a part of the approval process. Because I figured at that point, the most marketable thing I had to sell was my health. So we're talking rock bottom, but at least now I was sober. And so I was able to think clearly now, what am I going to do from here? What I knew was the insurance and financial services industry. So I went into sales and had some good days, some bad days, mostly bad, was struggling. One day I get a call, um, from an associate. He was switching companies. He was asking me if I might be interested in doing the same, basically following him. And what caught my interest was that a part of what this company had to offer was what he said was the best way to help people get out of debt. Knowing what a huge problem debt was in society and had been for me, I was intrigued. I was also very skeptical because what they were pitching was that it was a way that you can spend your dollars twice, once to pay off debt, once to earn interest, the same dollars at the same time. So my "this sounds too good to be true" alarm went off loud and clear. I had one question in my mind. Who does this? If it was other broke people, I didn't care what it was. I didn't care how it worked. I only cared at first about who does this. So I started to investigate that. Who uses this approach? And what I found, Travia Steward, was the answer to that question was banks and the wealthy. Okay, so now I want to know what is it and how does it work. That sent me on my little investigation of reverse engineering banks, reverse engineering banks and the wealthy. Because making money— I, I had one shot at this. Because I was already broke. I had to know that this was going to work, not guess if this was going to work. And so in investigating all this, there's— I find there's 3 mistakes people make with their money. One, trial and error, guesswork. And that's a financial agnostic. They feel financial truth is unknowable. Therefore, what I'm going to do is sample a little of this, try this, try that, and hope I stumble across something that works, hope I stumble across something that makes me feel good. The second mistake is listening to their broke friends, even though they know they've got no idea what they're doing. That's a financial atheist. Since there's no such thing as financial truth, it doesn't matter what I do, so I'll just connect with people, things that I can see and touch around me. Third mistake is listening to one of those financial entertainers yell at you that their way is the only way and everything else is dumb. That's a financial cult. Follow the leader regardless of what they say, what the basis is of what they say. Each of those inevitably fails because they violate history and science. History shows us that banks and the wealthy have got it figured out. They have blazed that trail and they've left breadcrumbs along the way so that scientifically we can reverse engineer what they do. We don't want to listen to to what they tell us to do, we want to do what they do. Because when we listen to what banks tell us to do, that's what makes them money. What makes us money is to copy what they do because they've got it figured out and they've blazed that trail. So now that takes away the trial and error. It takes away— the listening to your broke friends, and it takes away the financial entertainers yelling at you to cut up your credit cards, work 3 jobs, and live on rice and beans every day. Because now you're not wondering, hoping, you know. That's what I needed. I needed to know. And now, now I'm talking 2 years ago, Now, now I know, now I knew, all right, this is the right path. And because of my background, because of having been bankrupt, having been on food stamps, all the things I already mentioned, I had a little internal debate in my mind because I'm wondering, okay, so selling insurance is one thing. But helping people get out of debt and save and grow their money when that was my background, bankruptcy and all those other things, who's going to listen to me? And talking with someone, they really helped me to think this through. Who would someone rather listen to? A trust fund baby who was born rich, never had any adversity in their financial life, or someone who can relate, someone who's been there, someone who's been at the bottom and worked their way out of it and, you know, come through the very depths. Um, And I'm like, okay, yeah, I can share my history and make it my superpower rather than my downfall and connect with people who have faced that adversity, people who do want to grow, what, what they have, or get help to have something to grow. I've been in both places. And so now I figure, okay, now I'm equipped. Now I know why I came out of that moment, so that I can help others to reverse engineer banks and the wealthy, to make bank like a bank, because that teaches us what, what we need to know. We don't learn it in school. We don't learn it at the school of hard knocks. We learn it by copying the experts, the ones who are where we want to go. So as far as breakthrough story, I mean, that's, that's the breakthrough story. That's the, you know, the genesis to today of it.

Perfect. Now, Scott, I have so many questions. Like, I love that you just said you learned to make bank Like a Bank.

Yeah.

So everybody who's listening right now, they're going, tell me how to make bank like a bank. Like, I'm so curious about the spending your dollars twice, you know, that same dollar. Like, you know, just give us a little insight. So first, yeah, yeah. What does that mean?

Well, I prefer to think of it as recycling money.

Okay.

So we, we all are taught to recycle. We, we use up our trash, and then of course some special trash goes in the special bin so that it gets recycled and reused. We can recycle our money too, so that we use it, we spend it, and then we can save it and grow it. And, and you know that recycle triangle, the little arrow— arrows— we can spend, save, grow, spend, save, grow. To reuse those same dollars in multiple ways. Now, here's the basics of how banks do that. Travia Steward, you walk into a bank and you say, I want a home mortgage. They have you fill out the stack of paperwork about this high, and, and finally they say, okay, Travia, here's your money. And then what do you do every month after that for 30 years? You make payments to the bank. Let's say I'm the next guy that walks into the bank and now I want a car loan. They say, okay, Scott, here you go. What did they just do? They just gave me your money. Okay? They don't sit and wait for 30 years until your loan is paid off to say, oh, well, now what are we going to do with this?

No.

When it comes in, it goes out. That's velocity of money. Banks don't hold. They tell us to hold and accumulate. Think of the retirement funds as they're set up in this country. They want you to put a little bit of money out of each paycheck into your account and don't touch it. Be careful not to touch it because there might be early withdrawal penalties. Leave it alone. Let it sit there, and then in 30 years, see what you get. The whole time, that's deferred— it's tax deferral. It's not tax-free. So what does the government do? They tax your harvest rather than taxing your seeds. IRS lets us choose one or the other. If we really mess it up, we might end up having to pay both times. But we can pay tax on our seeds so that we don't have to pay tax on our harvest. That's not how your 401s, your IRAs are set up. So let's go back to the bank example. Now the third guy walks in the bank. He wants a business loan. Bank says, okay, fine, here's your money. What does he get? He gets yours and my money and all the other customers in the bank. They are creating multiple streams of income, and they're creating velocity. Money doesn't sit and stagnate. They don't play the game of accumulation. They play the game of cash flow. So they're earning interest on your home mortgage. They give me that money. They're earning interest as I make those monthly payments on my car loan. They're making interest on the third guy's business loan and so on, multiplied so many times over every single one of their clients. So banks have a way to recycle money. And that's not all. I mean, you think of— there's many other ways that they make money. One of them has been called a golden asset. Not by me, by others. Golden asset that they use, that they really accelerated using around 2008, around the Great Recession. Because what banks can do— and this is an area where we can't imitate them. They have regulatory advantages that we don't. But something that banks can practice is fractional—

fraction—

fractional reserve lending. Okay, so every dollar that they take in, they can lend out $10. Poof, 1,000% just manufactured out of thin air. So not only are they making interest from, from us, they're just manifesting money because regulations allow them to. That can create instability. It can create problems. And we saw it around the Great Recession with many banks asking for bailout money or going out of business. So what many of them have learned to do— and here is where we can imitate them— the golden asset they use provides safe, liquid, and guaranteed funds for them. And it is— and, you know, I'm not just going to keep it under lids, keep it a secret— it is a guaranteed, overfunded, high cash value life insurance plan. Now, this is not like the insurance that maybe Grandma and Grandpa had, where you pay a little bit, pay a little bit in each month and then you only get paid after you die. It's set up very differently, very uniquely, to really, like I say, overfund the cash value. Because what the government does— IRS has a code called 7702, and it draws basically a line in the sand where everything that stays under that line remains defined as insurance. Why is that important? Because life insurance proceeds move tax-free. Okay, important distinction. When a policy pays, that beneficiary does not pay tax on the proceeds. Okay, you cross that line, you put too much into the policy, now it is defined as an investment. You owe ordinary income tax on it. Plus a penalty if you take anything out prematurely. So we stay under that line because we don't want to just end up tipping the IRS with that money, for one. So increased stability, tax-favored benefits, and here's the big thing: as we use one of these specially designed policies We are able to take money out of it as a loan, not as a distribution. So therefore, the money we take out is tax-free. So not only does it accrue and grow tax-free, but we can access it tax-free. How does that work? So we apply for a loan from our policy, and by the way, this loan application has one question on it. And that is, how much do you want? It's your money. They don't— the company doesn't care what we're going to use it for, and they don't ask us about collateral because the cash value that we build up in the policy is our collateral. So say you've got $500,000 in this policy and you withdraw as a loan $50,000. And then you die the next day. What happens? Your beneficiary gets $450,000. Important to know that because it shows us that the company will always, always, always get their money back. And unless we understand that, then this probably sounds like nonsense. Why would they do this? Okay, they make their money back. This is an additional income stream for them. It's smart business for them. So we take this money out as a loan. It comes from the insurance company's general fund, not from our cash value. The significance there then is, okay, so we take out that $50,000 either to pay off debt or to make an investment, whatever the reason may be. That money didn't come from our account, so therefore we're still continuing to accrue and earn tax-free interest on the entire amount as if we didn't take any money out. So that means there's no opportunity cost to that money. There's we take it out, we use it. Let's use the example of to pay off debt. So we're using that $50,000 to pay off our car loan, uh, and maybe a couple of credit cards, whatever the case may be. So now instead of paying 20% on those credit cards, paying 5% on that car loan, that interest is gone. Yet still on that $50,000 we took out tax-free, we're still earning interest on it as even as we use it. That's recycling money. That's spend, save, and grow all at the same time with the same dollars. So now we don't even have a written formal repayment schedule on that loan, on that $50,000. The company doesn't care if we ever pay it back because they're covered. They've collateralized our cash value. They are either going to make interest on the money we pay them back, or they're going to continually decrease the amount of the death benefit they're going to pay off if we don't pay that loan and it accrues interest. Insurance companies covered. We have flexibility because if an emergency comes up and we need— and we miss a payment, no problem. The prudent thing to do, smart thing to do, if we want to continue leveraging this as a tool for investing, for paying off debt, then yes, we will go ahead and pay money back into the policy. Because now, as we do, all that cash value has been growing the whole time. We never drained the account. It was growing the whole time. So now we can use it again, we can take out more to pay off more debt, to make an investment, down payment on a rental property, for example. Now we've got a rental property, and with the money that the tenant pays us, we pay back our loan from the company. Restore that cash value. Now we can use it again and again and again. Recycling, recycling the whole time to give us a solid base that is going to grow of itself, let alone now how we can leverage that same money to earn from what the tenant— from what that rental property gives to us from the 20% interest that we no longer have to pay on our credit cards. We've got that leverage, and even as we use that money, it continues to grow.

Okay, so Scott, I want to make sure this is what I'm hearing. So what I'm hearing is I should go get an insurance policy. Would that be whole universal life? Which one? Term?

You could use the approach with different types of insurance. Not with term, because there is no cash value growth.

Okay, okay.

What most prefer to use is whole life because that gives you guaranteed growth. Now let me make an distinction, Travia Steward. Like I said briefly earlier, this is not like grandma and grandpa's whole life insurance policy. Specially designed. It's kind of like a 3-legged stool of different components, a couple of different riders on top of the policy that supercharge the growth of your cash value. Because the people that I work with, they're generally, oh yeah, I'm glad to know there's a death benefit there, that's nice. But that's not their motive. Their motive is to have that money to leverage, to eliminate debt, to invest, to have flexibility with. So generally what they want is for me to, you know, crank up that line in the sand as high as they can so they can put as much money as they can in it without crossing the line, keep the tax-free benefit. In other words, keep the death benefit as low as they can, as low as the IRS and the company will allow, but still be able to grow that money.

So let's layman term it for some folks, because Scott, you've got a lot of information here, and like for me to learn, I'd have to listen back to this like 4 or 5 times, and it's like, oh my God. So for Joanne Smith, who's just going, Scott, tell me what to do. Do I go get a specific type of whole life policy and then I wait until it accrues enough cash value? Now it has $100,000 and now I take $50,000 out, and if I pay it back, that's fine while it's growing interest. If I don't pay it back, they're just going to take $50,000 from the death benefit to my beneficiary.

Okay, what I've described There is a name for it. It's called Infinite Banking Concept.

Okay.

The great majority of your insurance salespeople have never heard of it. I was in the industry myself for over 30 years before I had heard of it. I had no idea it existed until 2 years ago, although it has been around longer than that. But it's been kind of under the radar because it is structured so differently and frankly, because it doesn't pay the agents nearly as much commission as your traditional insurance policy does. So what name did you use? Joanne Smith. So when our friend Joanne says, I want what he's selling. She would need to check, are you familiar with the infinite banking concept?

No.

Even then, she wouldn't know that that sales rep would truly juice up that cash value to her best benefit. The way I generally speaking work this is that about 10% of what someone pays will go to the insurance portion, and about 90% goes into building the cash. Okay, that's about as extreme as I can make it, but that's what gives you the most benefit, the fastest growth, the most long-term growth in that policy. Um, plus another factor in this, Travia Steward, is that I do a little more than just infinite banking. I also help my clients, those who are entrepreneurs, to structure their business so that they really maximize their tax savings as well as their legal protection, so that that helps them to put fuel in this policy. I look at holistically at what people have today, like a before snapshot, so that I can give them a proposal that's an after snapshot. Because I feel that a financial professional's job is not just to show you spreadsheets and say, look, Travia Steward, I can earn you X% on such and such investment. Now, how are you going to pay for it? I feel the financial professional's job is to provide you the way to pay for it. So I look holistically at where their finances are today. What are they spending today that we might be able to reallocate in a smarter direction where we can leverage that money like I've described it. I'm looking at their insurance, their investments, their expenditures. I have ways that I can help people save on their internet and cell phone bill, even their utilities bill. Think of it as like a buy-in bulk discount where I look at their finances today and, oh, I can find, you know, $200 a month here and $100 a month here and look at all these different areas where without tightening the belt, without the extreme budgeting that most people take for granted as the only way to get out of debt, without doing that, I'm able to find fuel for this policy so that they can make this work without tight— without digging any deeper into their pocket and without taking food off the table.

Okay, so, Scott, Joanne and I still don't know what to do. Like, like, like, like, really, like, and I know we have to wrap it up because we're already over 30 minutes, but like, I need you to say, Joanne, go down to the bank, come down to Scott, ask for this, do that, then we're going to do this.

Okay. All right. What Joanne can do is nevertomuchmoney.com. Okay, nevertoomuchmoney.com. That's my website. Um, and, and two is spelled out, T-O-O, nevertoomuchmoney.com. And I will take— I, I will do that holistic review, my Show Me the Money review, for Joanne and for anyone else who wants to see what this can do for them. It's their decision. And they— Joanne has control. I don't take over her money. I don't start paying her bills for her. She maintains control the whole time. But I will show her a proposal that's okay. Here is the exact month and year when every one of your debts is going to be paid off. So that she can see Here's the pace she's on now, and here's the new pace that she'll be on with my Never Too Much Money plan. So she'll know, Joanne will know just where she— just what that path is, just how she'll be able to use the tax strategies, the policy, other things that we don't have time to talk about today where I'm going to have her on that trail, the same trail that the banks and the wealthy laid for us. She'll follow those breadcrumbs with my proposal that'll show her exactly when she'll reach that point and how much she'll have saved at the same time that she can now leverage, like what like what we described. You want to leverage it to buy a rental property. Here's how much money you've got to do so. You've got control. Go for it, Joanne. Chase that dream and buy that house. And now take what you're making from that and leverage it again and again and again. Keep recycling. Keep taking the, the used up stuff that you've spent and recycle it and use it again.

Okay. All right. So the, the answer is you got to go to Scott's website, nevertoomuchmoney.com, and he's going to help you with this, right?

Yes, exactly.

Okay. And is, is that the work you do? Because I know that you have quite the experience and like a 30-year veteran in insurance and financial services. So it's your company, you work one-on-one with families, with people who want to grow their money?

Yes, I work one-on-one with people. So it will be a personalized plan what I put together. Your plan will be different from Joanne's. Which will be different from the third person's. In many cases, I can get people out of that debt in a third of the pace that they're on now, or a fifth, or it's different for different people. Some people that don't have debt really eat this up because they're leveraging it from day one and they're able to take that money that is earning interest and put it somewhere else where it's also earning interest. And accelerate things.

Okay. All right. Well, Scott, I feel like we would need a whole, like, I bet you do workshops. Like, this would be so good to like dive into. Let's, you know, let's get some papers in front of us and let's go. Let's start actually doing the work. But of course, on a podcast, most people are listening. Some people will see this on YouTube. So yeah. So guys, if you want to learn more, about how you can recycle your money, because I certainly do. I want to learn more about how I can— Scott said, make bank like a bank.

That's right.

I love that. So yeah, check out Scott, you know, because it is— what is it? NeverTooMuchMoney.com, and Scott's gonna hook us up.

That's right.

Yeah, I'd love to. Okay. All right, Scott, so any last, you know, gold nugget of information before we wrap?

My last comment is thank you, Travia. I appreciate so much the opportunity to talk with you and with your audience. I would love to help and get that personalized proposal out to you.

Yes. All right. That sounds so good, Scott. Thank you so much for the podcast, for being on the podcast today. And, you know, like, my brain is going, go back and listen to this because I'm, you know, I do the editing and everything, so I'm going to do it and go, Okay, I think I'm gonna actually take notes. So I usually don't do that on a podcast, but I think today I need to do that. All right, all right. So thank you so much, Scott. We appreciate you.

Oh, thank you. I appreciate it.

Absolutely. Thank you so much for listening to the podcast, and I hope you're finding this information valuable and helpful to help you create your best life, to break through those barriers. If you're enjoying this podcast, I would love it if you would like subscribe to Apple Podcasts or wherever you get your podcast, whether that's on Spotify or Google Playlists, and also on my YouTube channel. If you like seeing the videos of these podcasts, please click below to the subscribe button so you don't miss an episode. All right, my peeps, take care.