When a Roth Can Block Other Tax Benefits

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Everyone talks about Roth IRAs and many of you ask me about infinite banking but almost no one shows you how to combine infinite banking with real estate, business, or even oil and gas to create what I call a potential "tax-never" outcome. In this episode, I break down exactly how I use properly structured whole life (max-ROI infinite banking) alongside tax-advantaged investments so my money can work in two places at once growing uninterrupted inside the policy while I put capital to work in cash-flowing deals.

First, I level-set what a Roth IRA really is: a tax wrapper, not an investment. You can hold CDs, stocks, or even certain real estate inside it. Roth shines when the underlying investment has no tax advantages like simple lending or plain vanilla income funds because the wrapper gives you tax-free growth and withdrawals later. But when you're using investments that already come with write-offs or depreciation, the Roth can actually block benefits you could have taken elsewhere.

That's where infinite banking is different. I fund a high-cash-value whole life policy with after-tax dollars; the cash value grows tax-advantaged and I can access it via a policy loan or line of credit to invest in whatever I choose without age restrictions. I can't "place" the investment inside the policy (this isn't an IRA), but I can leverage the cash value to fund opportunities and keep my dollars compounding. People always ask, "Can I write off my life insurance premiums?" Generally, no if you try to deduct them, you risk losing key tax benefits elsewhere. The smarter move is to let the policy grow and then deploy those dollars into activities that do create deductions.

For example, as a business owner (S-Corp), legitimate expenses marketing, R&D, team, systems are deductible. If I borrow against my policy to fund those expenses, I'm still earning crediting inside the policy while capturing the tax write-off at the business level. The interest I pay on policy or bank lines used for bona fide business purposes can often be deductible, too. Same idea in real estate: if you or your spouse qualify as a Real Estate Professional, bonus depreciation and other write-offs can offset active income. I walk through how couples sometimes position the lower-W-2 spouse to achieve RE Pro status so depreciation can reduce the household's overall tax bill.

We also talk about energy specifically oil & gas working interests where portions of your capital can be deductible in year one (depending on the deal structure). Imagine using policy cash value to fund that investment: you get potential deductions up front, income from the project, and your policy value continues compounding in the background—helping you reach work-optional status before age 59½, unlike Roth rules.

I tie this into my "Wealth Wheel": Get Lean (increase cash flow, slash taxes), Get Liquid (store reserves in max-efficiency infinite banking, not in tax-prisons like 401(k)s), and Get Out (deploy into passive, tax-advantaged cash flow). I share how I personally hold emergency and opportunity cash in policies, then cycle it through business, real estate, and energy to accelerate wealth while keeping optionality and minimizing the drag of taxes.

If you've been looking for a practical, real-world way to combine infinite banking with tax-smart investing and to build freedom without waiting decades this episode gives you the blueprint.