How are whole life insurance dividends and interest rates faring in this low interest rate environment? Is today's long stretch of low interest rates a bad sign for whole life insurance in the future? https://www.youtube.com/watch?v=FYMHKtVtVKI Today, we're having a candid conversation about today's interest rate environment, the impact on bond rates and prices, and how that impacts whole life insurance dividends. If you want to know how your whole life insurance will weather any environment… tune in now! Table of contentsThe Role of Bonds on InsuranceHow Do Insurance Companies Invest?What About Policy Loans?Life Insurance Companies Invest ConservativelyHow Do Bonds Work?What a Portfolio of Bonds Means for Insurance CompaniesWhy You Shouldn’t Worry About Low Dividend RatesAdditional ArticlesBook A Strategy Call The Role of Bonds on Insurance Bonds play a significant role in the dividends you receive as a policyholder. This happens because life insurance companies invest heavily in conservative bonds. So rising interest rates should lead to higher declared dividend rates. Similarly, a falling Federal interest rate will likely result in a decreased dividend rate. Are there long-term effects of a low interest rate environment? Well, not to spoil things completely, but life insurance has been around for a long time. It has survived many low-interest rate environments, paying dividends through wars, depressions, recessions, and much more. We’re going to dive deeper into why this is, and how life insurance is still one of the safest choices for your money. How Do Insurance Companies Invest? When you pay premiums, the insurance company doesn’t just throw that money into a savings account and wait. They actually put the money to work. Some of this money goes into securities, however, it’s a minuscule amount. Many companies have anywhere from 0.58% to 2.49% of their portfolio in common stock. The much more significant portion of life insurance company’s investments is in bonds—either corporate bonds or treasury bonds. Bond investments often range from 60.2% to 75.5%. Then, there are preferred stocks, which work similarly to bonds because it produces interest. Additionally, preferred stock means that stockholders get paid before anyone in the common stock gets paid. This means preferred stockholders have low liability. The range for preferred stocks is about 0.25% to 1% of the company’s portfolio. The next biggest investment in an insurance company’s portfolio is going to be mortgage-type investments. Companies allocate anything from 0% to 16.3% of their portfolio to mortgages. To reduce risk, they invest in high equity mortgages. Real estate investments, separate from mortgages, range from 0.33% to 1% of the investment portfolio. What About Policy Loans? The last kind of “investment” life insurance companies make is contract loans. And these are the loans that insurance companies offer to policyholders. Contrary to popular belief, when you take a loan, you’re not taking a loan from yourself. The life insurance company is giving you the money because your cash value is backing the loan. This also means that when you pay interest, you’re paying interest to the life insurance company, not yourself. Life insurance loans make up anywhere from 2% to 7.24% of an insurance company’s portfolio. Policy loans, even in a low-interest rate environment, are great for insurance companies, and by extension you, as the policy owner. It all comes down to the way mutual companies are structured and the dividends they pay. In a low interest rate environment, with many loans fixed at about 5%, this is actually some of the greatest returns companies get during such times. Plus, they can take comfort knowing all loans are backed by cash value. This is beneficial to you, the policy owner because you want your insurance company to do well. You partake in the profits of the company,
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7702 Whole Life Insurance Updates
15:39Are you considering whole life insurance, but want to know more about the new products the life insurance companies have released in response to the 7702 Whole Life Insurance updates in 2021? https://www.youtube.com/watch?v=WCMQruG3bVQ The new products are here. What does the 7702 tax code mean for whole life insurance? Tune in now to get the need-to-know information so you can see what to expect for new Infinite Banking policies. Table of contentsWhat are the 7702 Whole Life Insurance Updates?What Happens to the Infinite Banking Strategy?Are Lower Guarantees a Bad Thing?Is Less Death Benefit Bad?Is There a Big Difference Before and After?Book A Strategy Call What are the 7702 Whole Life Insurance Updates? If you’re scratching your head when you hear 7702, don’t worry. This simply refers to a section in the IRS tax law that dictates the tax treatment of whole life insurance. At the end of 2020, this tax law was updated. While some have voiced concerns over how this will affect future life insurance policies, we’re more optimistic. You can read our initial analysis of the 7702 whole life insurance updates in our post, Is Infinite Banking Dead? Fortunately, we’re now seeing actual life insurance illustrations that reflect these changes. That means we can dive deeper into the discussion with real numbers so that you can make the most informed decisions possible about your insurance. What Happens to the Infinite Banking Strategy? While there’s still a lot of unknowns, we’re starting to see new developments in the 7702 change. These updated products and policies will take full effect by January 1, 2022. Not all major life insurance companies have begun to sell these new policies. From our preliminary analysis of what’s available right now, here’s what we know: Guarantees have gone from 4% to somewhere in the 2-3% range on most productsYou’ll see less total death benefit compared to older policies of the same premiumTotal dividends, which include guaranteed and non-guaranteed, should not be impacted much Are Lower Guarantees a Bad Thing? Not necessarily. In fact, as we mentioned in our first 7702 whole life insurance updates article, lowering the guarantees can actually strengthen your company’s longevity. Remember that minimum guarantees are just that: minimums. As a policy owner, you get to partake in the company’s profits. This means that if and when interest rates bounce back, we would expect to start seeing higher returns on the non-guaranteed side. We should also note that the guaranteed portion of your policy is a part of the declared dividend. For example, if the guaranteed side is 4%, and the declared dividend rate is 5%, you’re (roughly) getting an additional 1% in growth. However, there are certain factors that change exactly how this calculation works. Ultimately, remember that an illustration of a policy is simply a snapshot in time. As soon as companies pay dividends, that illustration is inaccurate. So a policy illustrated in a low-dividend year won’t reflect the real trajectory of your policy. It’s simply a guideline. Is Less Death Benefit Bad? While total death benefit is going to be lower overall, this actually pushes the cash value up. This happens because your cash value is the portion of the death benefit that’s accessible to you. And by the endowment age, your full death benefit is accessible to you. As your policy matures, the death benefit increases, and your accessible cash value increases. With a lower death benefit, this means that your cash value is proportionately higher than a similar policy. While you may be losing some death benefit, what you’re not losing is cash value and the ability to access that cash in a tax-advantaged way. To solve for the death benefit, you can consider a convertible term insurance policy or put more premium into your policy. Is There a Big Difference Before and After? Truth be told,
The World’s Most Disciplined Man, with Craig Ballantyne
42:00What are the top 1% of high-performers, producers, and achievers doing differently? How is it possible to get more done, scale your business, and have MORE time for what matters, not LESS? Discipline. It’s what you need, but it’s not what you think. You can’t hustle and grind into your ideal life. Our guest, Craig Ballantyne shares with us an alternative definition of discipline...and how working less may actually get you where you want to go. https://www.youtube.com/watch?v=4AoOx5OIRhc Intrigued? Join us for a conversation with “The World’s Most Disciplined Man,” author of The Perfect Week Formula, The Perfect Day Formula, and Unstoppable, coach, builder of multiple 7-figure businesses. If you want to achieve more than you thought possible, while working less… tune in now! Table of contentsWhy is Craig Ballantyne the “World’s Most Disciplined Man”?Becoming More Productive Creating Systems in Your DayWhy Value-Alignment MattersAbout Craig BallantyneGet Free Copies of Craig Ballantyne’s BooksBook A Strategy Call Why is Craig Ballantyne the “World’s Most Disciplined Man”? [2:30] “It came about...because about 10 years ago I was finishing up my career in the fitness industry, and I was starting another business, helping entrepreneurs be more productive. And some of my friends would be like, ‘Man, how do you get so much done?’... And they first started calling me the most productive person. Then that just kind of morphed into the most disciplined, because in order to be productive, you really have to have discipline.” However, the way Craig Ballantyne identifies discipline may not be what you’d expect. Craig shares that most people define discipline as additional tasks to do. [3:20] “I actually take the opposite approach, and I call it effortless discipline. And what this is, is it’s really not using willpower, it’s not making your life harder. It is simply building systems into which success becomes automatic.” Becoming More Productive [5:40] “...I joked that I was lazy and undisciplined because I didn’t have the systems and stuff at home in order to be effective and disciplined and productive. But anybody can build the systems around themselves to be successful.” The trick, Craig asserts, is not adjusting your life to fit his productivity principles and systems. Instead, you adjust the systems to fit your life. For example, he frequently shares the idea of “attacking your morning” with his audience. Some may interpret this as a call to wake up earlier, however, Craig recognizes that many people are night owls. So it’s less important when people wake up, and more important that whatever time they wake up, they make use of that time. Creating Systems in Your Day [12:30] “We can control our morning: we can control what time we get up, we can control what we have for breakfast more than most other meals. We can control what time we get started on our work—that sort of stuff. And we control what we let into our heads—whether we go to YouTube immediately, or Twitter immediately, or we actually sit down with a book. Or we sit down and work on our number one priorities. We have a lot of control in the morning. And the more control we put over the morning, the better we’re going to be able to deal with the chaos that comes in the afternoon.” [15:30] “Everybody listening to this is probably familiar with Dilbert, you know, the cartoon. And Scott Adams, who writes Dilbert, has actually written some really great books on being successful in life… The title of his book is ‘How to Fail at Everything and Still Succeed in Life,’ I think. And he just talks about how everything is not about goal-setting, it’s about system building.” Craig Ballantyne continues to say that goal-setting is really like wishful thinking. Creating a system, on the other hand, helps you make strides toward your goals. Goals don’t necessarily have systems in place though.
Whole Life Insurance Dividends and Interest Rates
42:22How are whole life insurance dividends and interest rates faring in this low interest rate environment? Is today's long stretch of low interest rates a bad sign for whole life insurance in the future? https://www.youtube.com/watch?v=FYMHKtVtVKI Today, we're having a candid conversation about today's interest rate environment, the impact on bond rates and prices, and how that impacts whole life insurance dividends. If you want to know how your whole life insurance will weather any environment… tune in now! Table of contentsThe Role of Bonds on InsuranceHow Do Insurance Companies Invest?What About Policy Loans?Life Insurance Companies Invest ConservativelyHow Do Bonds Work?What a Portfolio of Bonds Means for Insurance CompaniesWhy You Shouldn’t Worry About Low Dividend RatesAdditional ArticlesBook A Strategy Call The Role of Bonds on Insurance Bonds play a significant role in the dividends you receive as a policyholder. This happens because life insurance companies invest heavily in conservative bonds. So rising interest rates should lead to higher declared dividend rates. Similarly, a falling Federal interest rate will likely result in a decreased dividend rate. Are there long-term effects of a low interest rate environment? Well, not to spoil things completely, but life insurance has been around for a long time. It has survived many low-interest rate environments, paying dividends through wars, depressions, recessions, and much more. We’re going to dive deeper into why this is, and how life insurance is still one of the safest choices for your money. How Do Insurance Companies Invest? When you pay premiums, the insurance company doesn’t just throw that money into a savings account and wait. They actually put the money to work. Some of this money goes into securities, however, it’s a minuscule amount. Many companies have anywhere from 0.58% to 2.49% of their portfolio in common stock. The much more significant portion of life insurance company’s investments is in bonds—either corporate bonds or treasury bonds. Bond investments often range from 60.2% to 75.5%. Then, there are preferred stocks, which work similarly to bonds because it produces interest. Additionally, preferred stock means that stockholders get paid before anyone in the common stock gets paid. This means preferred stockholders have low liability. The range for preferred stocks is about 0.25% to 1% of the company’s portfolio. The next biggest investment in an insurance company’s portfolio is going to be mortgage-type investments. Companies allocate anything from 0% to 16.3% of their portfolio to mortgages. To reduce risk, they invest in high equity mortgages. Real estate investments, separate from mortgages, range from 0.33% to 1% of the investment portfolio. What About Policy Loans? The last kind of “investment” life insurance companies make is contract loans. And these are the loans that insurance companies offer to policyholders. Contrary to popular belief, when you take a loan, you’re not taking a loan from yourself. The life insurance company is giving you the money because your cash value is backing the loan. This also means that when you pay interest, you’re paying interest to the life insurance company, not yourself. Life insurance loans make up anywhere from 2% to 7.24% of an insurance company’s portfolio. Policy loans, even in a low-interest rate environment, are great for insurance companies, and by extension you, as the policy owner. It all comes down to the way mutual companies are structured and the dividends they pay. In a low interest rate environment, with many loans fixed at about 5%, this is actually some of the greatest returns companies get during such times. Plus, they can take comfort knowing all loans are backed by cash value. This is beneficial to you, the policy owner because you want your insurance company to do well. You partake in the profits of the company,
Delusional Altruism, with Kris Putnam-Walkerly
49:47Want your charitable giving to make the greatest difference in the world? Today, we’re talking with Kris Putnam-Walkerly, author of Delusional Altruism, who advises philanthropists who want to achieve greater clarity, impact, and joy with their giving. https://www.youtube.com/watch?v=cWVQF5___XQ&t=11s We’ll discuss why how you give matters, the 7 delusions of altruism, and how to create lasting change. If you’re a philanthropist, donor, or an everyday person who donates time, money, and experience to help create a better world… tune in now! Table of contentsDelusional Altruism: What Makes Philanthropy Effective or Not?Invest Like It’s Your BusinessHow Do Philanthropists Get in Their Own Way?How to Ask the Right QuestionsHow Can You Be Transformational in Your Giving?Links Mentioned: About Kris Putnam-WalkerlyBook A Strategy Call Philanthropy Coaching [7:08] “I also provide a lot of coaching and advising. So most of my clients now retain me as a private coach to help them navigate their philanthropic journey and help them get clarity on what they’re trying to accomplish. And help hold them accountable to accomplishing it. And really being a sounding board to them, because it can be a very lonely place to be. Either you’re the executive director, perhaps, of a foundation...but also for, perhaps, an ultra-high-net-worth donor...it can feel lonely because you can feel a lot of guilt with having all that wealth.” The reason it’s lonely, as Kris mentions, is that there aren’t many people you can have a conversation with about your finances. Either people are asking for that money, or they don’t validate your struggles because you have money. Delusional Altruism: What Makes Philanthropy Effective or Not? [9:35] “Delusional Altruism is really about how donors of all sizes and types are generally genuine in their altruism. They really want to make a difference, change the world, want to help others; but are getting in their own way and are preventing themselves from having the impact that they seek….So part of the challenge with effectiveness is, it’s hard to be effective when you’re getting in your own way.” [10:05] “One of the challenges is a scarcity mindset, and this is when donors believe that maintaining a spartan operation for themselves or their grantees...somehow equates to delivering greater value in the community.” [11:00] “If you want a non-profit to be successful, just like a business, it requires investment in your growth and in your success.” [11:55] “I think a lot of people of wealth feel guilty. They feel guilty because maybe they inherited the wealth and didn’t earn it, and therefore don’t deserve it. Or maybe they made more money than they ever thought they’d make in their lifetime, sold a business, and suddenly have wealth... But the problem with that is it really holds funders back, from a mindset perspective. It often causes people to shrink, to kind of mask their talent and mask their ability to make a difference in the lives of others.” [13:04] Rachel: “The business in the first place is service to mankind and to the world. And you are not taking money from society; you are giving something that’s more valuable, and the exchange of that is that you are profitable.” Invest Like It’s Your Business [18:50] Kris: “Is that how you invest in your business? Do you only allow one cent of every dollar to go to pay your staff salaries? [Or] to go to pay for your own business development? So why are we asking a non-profit, who’s trying to save people’s lives, why are you asking them to do [that]?” How Do Philanthropists Get in Their Own Way? [20:20] “I think fear really is the primary cause of the scarcity mindset. And there are lots of different ways funders feel fearful; which might surprise you because you assume that the donor is wealthy, and with wealth should come confidence.” [25:30] “Sometimes we...sort of stumble through our giving based on what...
The Number 1 Secret to Succeeding
30:54If you're shaking your head at the state of the world right now, you're not alone. There are food shortages, supply chain disruption, medical mandates, unemployment, price inflation, and more of our freedoms at stake. https://www.youtube.com/watch?v=Zaew0MenJhU Yet, people are thriving, there's more opportunity than ever, and you will succeed if you live by this one truth. To join the conversation… tune in now! Table of contentsThe Domino Effect of Supply ChainsIt’s Easy to Be Discouraged…Walking in AbundanceAn Abundance Mindset Causes SuccessEntrepreneurs Are the Real Movers and ShakersBook A Strategy Call The Domino Effect of Supply Chains Are the shelves at your local stores looking a bit empty? If so, you’re not alone. And while there may technically be food “shortages,” we’re not lacking food. What we’re actually experiencing is shortages along the supply chain. Lack of workers, for example, means that there are gaps in how food and other goods get distributed to stores. This is the same reason it’s taking longer to receive packages. There’s no huge headlining problem, rather there are small structural pieces missing that are affecting the economy on a global scale. And these small pieces can have a massive domino effect. Because if a single piece of this supply chain is broken, everything that comes after that “break” is delayed or impacted. If you’re looking for a great read for all ages—The Miraculous Pencil, a children’s book by Connor Boyack about free markets, really breaks down the global economic infrastructure. It’s Easy to Be Discouraged… When you look at the state of the world and know that our freedoms hang in the balance, it can be devastating. It’s easy to feel discouraged by the news and media. However, it’s important not to let this mindset make you feel hopeless, or like you no longer have control. I think we can walk in a state of abundance because here’s what I know: people are still finding tremendous opportunity in the midst of the state of the world. Walking in Abundance The big question is, are we going to walk in scarcity, or are we going to walk in abundance? And the choice may seem obvious, but it’s important to actively choose abundance. You have to live abundance to walk in abundance. In a world like what we’re experiencing now, that means not walking in fear. It can also look like not hoarding supplies and food, and being confident that you will be provided for, as well as your fellow man. Walking in abundance may also mean looking at your income, and determining how to maximize your income and your cash flow. How can you manage your resources so that you have increased access to and control of those resources? An Abundance Mindset Causes Success Actively cultivating an abundant mindset doesn’t just increase your odds of success. This mindset actively causes success. When you think abundantly—free of fear, free of limitation—you can see and seize opportunities that someone living in scarcity mode is simply unequipped to do. If thinking this way doesn’t come naturally to you, don’t worry just yet. Fortunately, you can train yourself to think this way. It takes work, consistency, and time—but it is possible. The whole spectrum of scarcity to abundance can all be boiled down to this idea of being in fear or being in faith. If you are in fear, it’s very easy to be controlled by other things, and not be in control. And scarcity always causes you to give up control. In today’s world, there are a lot of fears: fear of the virus, fear of the vaccine, fear of shortages, and job loss and mandates. We could continue the list for quite some time. The point is, when you act solely upon these fears, you allow the fear to control you. Choosing abundance means asking how you can act in faith, even when the world around you feels uncontrollable. Entrepreneurs Are the Real Movers and Shakers Entrepreneurs,
The 4-Week Vacation, with Dr. Sabrina Starling
1:05:16How does the quality of your life relate to the health of your business? How do you free yourself from the constant demands of your business? If you have a cash-sucking business, there’s hope. It doesn’t have to be this hard. Joining us today for this conversation is Dr. Sabrina Starling, the Business Psychologist. with Tap the Potential. She’s an author, speaker, and coach who believes that work should support your life, not the other way around. And she's introducing her new book, The 4 Week Vacation. https://www.youtube.com/watch?v=e84ovViK6yo If you’re not taking time off, on the edge of burnout, exhausted, struggling with team performance, stressed or cash-strapped… tune in now, and find out how making a 4-week vacation pledge might be your answer! Table of contentsFinding A-Players for Your BusinessBurnout, and the Need for The 4 Week VacationThe 4 Week VacationWhat’s in The 4 Week VacationContact Dr. Sabrina StarlingAbout Dr. Sabrina StarlingBook A Strategy Call Creating Freedom in Your Business [4:00] “When we have success, we struggle. When our businesses grow and they take off, they demand more and more of us. Being an entrepreneur is our greatest opportunity for personal development. Because we have to grow ahead of that business in order for that business to be where we need it to go. So what I take from that experience is that hiring and being in business has always been challenging. This is nothing new.” [7:50] “The book that I always wanted to write is The Four Week Vacation…. But before I could write this book, I realized I had to help them [entrepreneurs] with their hiring challenges. So I dug in and wrote How to Hire the Best, and I developed the How to Hire the Best system so that business owners could take their lives back….And that’s really what it takes to have a thriving business, and a business that’s going to continue to grow, that’s going to not rely on you, the owner, for the day-to-day operations of the business.” [9:00] “When we design our businesses to give us freedom and generate profit and ongoing owner’s pay, then we have that opportunity to make strategic decisions with the wealth that’s being created; not just for ourselves, but for team members, and impacting the communities that our businesses are located in. So it’s really much bigger than just creating a business that gives you freedom. It’s really about creating a business that’s going to have an impact for all involved—and what I like to call life-giving businesses.” Hiring Top Talent [12:30] “I really think it is getting clear on the ‘why’ that we are in business. If we are in business to be perfectionists, then we can work 70 plus hours a week and we can be great perfectionists and really be good at it. If we are in the business to create freedom and opportunity for others, then we need to align our choices and actions with that.” [13:13] “When we’re in survival mode, psychologically, it’s very hard to access that creative part of our brain; it’s just not there. So creating a vision and a compelling why is really the most important thing. And the irony is that we tell ourselves we don’t have time to step back and get into that creative zone... Well, all the research shows that the less we work, the more effective we become.” Dr. Starling shares a few things you can do to step back and rest: take a lunch break, stop working at 5 PM, and don’t check emails and texts until the next day. Otherwise, you get burnout and overwhelm, and somewhere along the line your life stops being the one you’re trying to create. Thoughts on Retirement [18:10] “When I titled my book The Four Week Vacation, I almost changed the title. Because as I’ve been talking about this book for years with people and entrepreneurs, I get pushback. Because I hear, ‘I don’t know what to do with myself if I take four weeks off.’ What is that about? And I think so much of it is that we’re so used to working hard that we’ve...
Answers to Your Money Questions, Part 2
1:02:11We all have money questions. If you don’t, you just haven’t asked them yet. https://www.youtube.com/watch?v=jrsQ4Tzo7ao Today, we continue to answer questions from you—our audience, tribe, fans, those in a quest to control their money and financial future! You can view part one of this conversation here. There are some great ones here that might be on your mind too. So maybe you’ll get the answer you’ve been needing, so you can clear the hurdle and get one step closer to your goals… OR maybe it will prompt you to ask a question of your own… tune in now! Table of contentsWhat Should You Do With Extra Cash?How Can Debt Be Advantageous?Compounding InterestIBC Isn’t About Paying Off DebtCan You Withdraw Your Cash Value?Available Cash ValueLow Cash ValueWhat Happens if You Withdraw All Your Cash Value?What Happens if You Collateralize All Your Cash Value?Policy CollapseIs There a Difference in Dividends on Base Premium vs. PUA?Do You Get Your Cash Value When You Die?What Endowment MeansCan You Pay Premiums on a Monthly Basis?Book A Strategy Call What Should You Do With Extra Cash? In this instance, a listener named Matthew says he recently did a cash-out refinance. Now, he’s wondering what to do with the cash he has leftover. Really, the answer depends: there’s no one-size-fits-all answer to this question (or in fact, many questions). The follow-up question that we would like to pose in return, is what is the purpose of your money? What do you want to accomplish with your money? You can approach this from the big picture as well as on a smaller scale, like what you want your money to do at this stage of your life. If you’re unsure of what to do with extra cash and want to hone in on your money’s purpose, here are some clarifying questions: Does your money need to be accessible to you? Or is this money you are comfortable locking into an investment or other illiquid arrangement?Are you looking to create a cash-flowing asset that will create passive income?Do you wish to use this money for long-term growth? Or do you have a short-term opportunity?Is your emergency fund sufficient? Are you looking to take on some risk, or protect what you have? It’s also okay to wait and be patient until you know what you want to do—or an opportunity presents itself. A privatized banking system may be a good way to store cash long term while you wait. Or you may want to park your cash short-term. You may want to do a combination of many things. How Can Debt Be Advantageous? Another listener mentions their interest in IBC, yet is unsure what the advantage is of funding a whole life insurance policy just to take a policy loan? They offer an example of funding a policy with $40,000 of cash value and accessing $36,000 to make a purchase, such as a car. By their calculation, they’ve funneled $76,000 into a $36,000 car. This is an extremely important question and one that “makes or breaks” people’s understanding of IBC. Because this can be hard to wrap your head around, and it may take some “unlearning” of what you’ve been told about life insurance. First and foremost, you can’t think of your life insurance premium as a “cost” to you. Instead, consider it savings that you can automate. Because the premium payments you make directly fund your cash value, which grows over time. It’s no different from paying money to the bank; or more directly, paying into your home and taking a home equity line of credit. If you contribute $40,000 to your savings account, and then spend the savings, you’re not paying twice. You’re storing your money and then using it. A life insurance policy is another means of storing money, and a policy loan is another means of using that money. The advantage of taking a policy loan, rather than a withdrawal from a savings account, is twofold. First, you have control. You can determine how fast, or slow, you pay the loan back. If you run into a lean year,
Business Secrets from the Bible, with Rabbi Daniel Lapin
58:33What if your thoughts about the Bible and what it has to say about money were crippling you instead of helping you to flourish the way you’re meant to? Today’s guest is Rabbi Daniel Lapin, returning for another deep and powerful conversation about business, money, and the Bible. https://www.youtube.com/watch?v=ytZD5GkFlp4 He’s a rabbi, speaker, TV host, and author of seven books, including America’s Real War, Business Secrets from the Bible, and Thou Shall Prosper-The Ten Commandments for Making Money. Instead of avoiding the seeming conflict in our culture between God and money, Rabbi Lapin is known for uncovering and unpacking Biblical wisdom to guide today’s business leaders. Prepare to be challenged, changed, and grow… tune in now! Table of contentsWelcoming Back Rabbi LapinWhy Business MattersInvesting vs. Making Money in the First PlaceFaith and FinancesA Godly EconomyDoes God Want You to be Wealthy?About Rabbi Daniel LapinBook A Strategy Call Welcoming Back Rabbi Lapin [2:23] Rachel: “We believe alike when it comes to money. And it’s amazing to me, to be able to understand the roots of what everything means, financially, and how that connects to our Christian faith, how it connects to biblical principles.” And a common journey is reconciling faith with finances—how can you be a good Christian and a good entrepreneur without those things being in conflict? Fortunately, as Rabbi Lapin shows us, there’s more overlap than you think. We’ve enjoyed having him as a guest several times before because he has a deep understanding of the bible and the financial wisdom within its pages. [4:54] Rabbi Daniel Lapin: “We are not using our time today to try and surreptitiously convert people to faith. What we are trying to do, very forthrightly, is impact their bank accounts.” Why Business Matters We’ve talked about many of the Rabbi’s books on The Money Advantage, and today is about one of his older books, Business Secrets from the Bible. What’s great about this book is that it provides a strategic, spiritual approach to business. And the foundation of this approach is within the pages of the Bible. The conversation begins with a few thought experiments, such as the one below: [13:15] “If retirement is such a good thing, what would happen if everybody in your world retired? According to the way many people think, people should say, ‘Well...God bless them, good for them. They’ve made enough money, they don’t need to work anymore. It’s great!’ And that would be great until you decide you want to go to a restaurant for dinner. And then you discover that nobody’s there because they’ve all got enough money, they don’t need your money.” [14:18] “Without other people, you have nothing.” The Impact of Inflation Rabbi Lapin brings another thought experiment into the conversation. He asks you to imagine you found a duffel bag filled with a million dollars. And to your surprise, it’s addressed to you, as a gift from the white house. Your mind begins to fill with the possibilities of that money, and you call your friend to tell them. But before you can say anything, they tell you that they also received a million dollars from the white house. And you quickly come to learn that every single person got the same gift. [17:40] “This is the mystique of money: if everybody got a million dollars, it is exactly the same as if no one got a million dollars. Really, nothing has changed.” Lapin takes it further and says if you don’t understand, think about what you would do with the money. Say you want a specific BMW, so you go to the dealership to purchase it, because you can still use the money, right? But before you can find a salesman, you’re in a line of 40 people, with only 6 or 7 of that particular BMW available. And the price of the BMW has also shifted to reflect this sudden infusion of cash in the economy. These thought experiments serve to help people think differently about mo...
Answers to Your Money Questions, Part 1
57:52We all have money questions. If you don’t, you just haven’t asked them yet. Today, we’re answering questions from you—our audience, tribe, fans, those in a quest to control their money and financial future! https://www.youtube.com/watch?v=ZiW3MeJiL7c There are some great ones here that might be on your mind too. So maybe you’ll get the answer you’ve been needing. Then you can clear that hurdle and get one step closer to your goals. OR maybe it will prompt you to ask a question of your own. Find out and tune in now! Table of contentsDoes it Make Sense to Fund a Policy with a Loan?Should You Pay Off Your Mortgage ASAP?Can You Borrow Against Your Death Benefit?Why Can’t You Simply Increase the Face Value of an Existing Policy?Is it Complicated to Prove Disability?What Insurance Companies Do You Suggest?What are the Interest Rates on a Policy Loan?Can I Do a 1035 Exchange Between Companies?What Are the Best Companies to Work with for Policy Loans?How Do Premiums Contribute to Cash Value?Isn’t a Dividend Just a Refund of Premium? Book A Strategy Call Does it Make Sense to Fund a Policy with a Loan? A YouTube viewer of our show asked us the question, “Does it make sense to take out equity from an investment rental to start a policy and then borrow from that policy to reinvest in other investments?” We believe that it makes sense to have a life insurance policy as a foundation for your finances. This is because it protects your income, provides liquidity, and shields your money from creditors. On the other hand, properly funding a whole life insurance policy requires consistent payments. Depending on your funding source, it may not be wise to fund a policy with a loan if you don’t have a strategy for paying premiums after that. This depends on your personal economy and your investing goals. The other reason for caution is that it can take a few years for your cash value to “break even.” While you are able to take a life insurance loan right away, your cash value will not immediately equal your premiums paid. It will take time to build your policy to a point where you can make larger investments. However, when you do reach that point, it’s an excellent strategy to leverage policy loans for cash-flowing investments. Should You Pay Off Your Mortgage ASAP? This question comes from Lon, another viewer on YouTube. He shared with us a HELOC strategy, and ended with this hypothetical: “The other question that you really need to ask is: Is it really better to pay off my mortgage ASAP vs. using my available income for investing?” We agree that this is a great question to ask. The answer, again, is not black and white. There are two answers to this question: a mathematical answer, and an emotional one. Mathematically, it often doesn’t make sense to accelerate payments because you lose control. Contrary to popular belief, the less you owe on your home, the more control the banks have. This is true because, in the event that you cannot pay your mortgage, the bank is less likely to foreclose when you have a large loan balance. This is because there’s a chance the banks will be unable to make up the difference. On the other hand, if you’re only a few years away from owning your house, it’s easier for banks to foreclose. They can sell your property and have a much greater chance of making up the difference on the house. This doesn’t necessarily mean you shouldn’t pay down your mortgage. However, it does illustrate the benefits of saving or investing your additional income, rather than putting it into the house. You can build equity in a life insurance policy, then use that to pay down your home. This is one way to maintain control of your home and your money. Then, there’s the emotional component. Sometimes, you just sleep better at night knowing that you're reducing your loan balance. To learn more: 15 vs. 30 Year Mortgage: Myths About Paying Off Your Mortgage
Get Different, with Mike Michalowicz
27:37Want the most effective and radically simple marketing system in existence? Today, we’re talking with Mike Michalowicz, perennial best-selling author of Profit First, Surge, The Pumpkin Plan, FixThis Next, and his newest release Get Different. https://www.youtube.com/watch?v=4LENRtB7xGY If you want to scale your business and reach more people, here’s the answer you’ve been waiting for. Tune in now! Table of contentsWhy Marketing Blends Into the BackgroundThe Problem with Email MarketingHow to Break Through the HabituationUsing the DAD MethodHow to "Get Different"Overcoming the Fear of Being DifferentSuccessfully "Get Different"Get Different with Mike MichalowiczAbout Mike Michalowicz Book A Strategy Call We love having Mike Michalowicz as a guest because he knows and understands entrepreneurs like you! Mike has joined us before to discuss his books Profit First as well as The Pumpkin Plan, and now we’re excited to talk with him about his latest book, Get Different! This book is all about how to stand out and be different so that you can not only attract clients and customers, but attract the right ones for you. Marketing is like the lifeblood of any business, but it can be all too easy to lose your “edge.” Mike Michalowicz is here to share his ideas so that you can continue to innovate your marketing strategies. Why Marketing Blends Into the Background [2:50] “I discovered this concept called habituation, and how it works biologically is we have a thing called the reticular formation. It’s a neural network, both figuratively and literally; it's a net that sits at the brain stem, and as stimuli come in...its primary job is actually to disregard or ignore most things. It’s the way we maintain focus.” Without this reticular formation, anything and everything can distract us. Our brain uses this function to manage productivity and focus. Because the daily stimulation from things we experience with our senses is constant. Just imagine all the things you filter out as “normal” in your daily life. [3:25] “So the job of the reticular formation is to ignore everything unless it meets one of three qualifiers. Threats get prioritized—our safety depends on it, so that’s the number one feature. The second...is opportunity. If there’s a known opportunity, we will pursue it. And there’s a third way through, and it’s the unknown or the unexpected because our mind then needs to open up and say is this something I need to consider as a threat or opportunity? Everything else is ignorable. And this happens on a subconscious level.” A great example Mike shares is how we filter through junk mail. It’s amazing how quickly people can rifle through their mail and pick out the garbage from the important pieces, with very little information. The only things that make us stop in our tracks are the things that stand out from what we’re used to. The Problem with Email Marketing Now, more modern forms of marketing, like email, are facing the same problems. People have become so accustomed to certain practices that they can filter out “junk” in milliseconds. Mike reminisces about the first time he got an email with the subject line, “Hey Friend.” It was novel and created a sense of kinship. Then he opened it and realized it was a marketing message. As this continued to happen, it got easier to filter out emails that started with this as being “junk.” This is an experience that most people with an email address can relate to. And it’s therefore no longer a very effective way to market through email. The same goes for dozens of email strategies. Yet they’re still commonplace, and marketers still teach these methods to entrepreneurs. As consumers, we all become habituated to certain marketing messages that our reticular formation has learned to filter out. It’s not a threat or opportunity, so it's unnecessary knowledge for our brain to spend time on. [4:43] “Our job when we market our business,