9min chapter

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The Untold Truth About Leveraging Life Insurance: Laddering, IUL vs Whole Life, & Compound Interest!

BetterWealth with Caleb Guilliams

CHAPTER

Leveraging Life Insurance and Personal Finance Strategies

This chapter explores the benefits of overfunding IUL and whole life insurance policies, emphasizing the growth potential of the death benefit. It compares different financial strategies and viewpoints, highlighting the significance of building assets, especially through leveraging properties. The discussion also touches on common mistakes in insurance and finance, showcasing the importance of cautious investing and thorough research.

00:00
Speaker 2
Well and just to be clear on both IUL and whole life, when you're fully funding it, if you're over funding it properly, the death benefit will increase every year. So is it true that you don't get your cash value and death benefit? Yes. Is it also true that the death benefit grows faster than your cash value grows? Yes. So in other words, you get like, in other words, you're technically right, Dave, but you're not admitting that the death benefit is growing faster than your cash flow is growing. And so it's essentially saying you get death benefit plus more whenever you pass away. And so that's where those are the little comments that I go, I can't believe that's the thing that people are arguing with me on YouTube. I'm like, can you please get a better point? You know, because it's not, it's not effective.
Speaker 1
You know, the way I look at it, say I got a million dollar death benefit and $200 ,000 of cash value. Yeah. Okay. I die. My wife gets a million dollars. Does she care that the 200,000 was part of that did they go take it and run over to the Bahamas with that 200 ,000? Yeah. And they pulled another 200,000 from the other side to pay the million dollars. Yeah. It's a million dollars. And what you're truly doing in whole life is you're only paying for $800 ,000 of death benefit. Not a million. Yeah. Because 200 of it's yours. I mean, it's just, it's semantics. And, you know, when it comes right down to it, but the reality is he's using that as a scare tactic instead of just being, you know, straight up. And I love to call all those guys that work with him his minions, you know, so I'll do a video talking about his minions. And it just did one, you know, just a little while ago, he did this great job of explaining compounding. And then he went and talked about paying off your house in 15 years. Like, that's not compounding. It's just, so he does great, get them out of debt, but then let us take it from there.
Speaker 2
Yeah. Well, it's funny if you use Dave's logic, 12% mutual funds, and then you also use his logic, pay off your house. You're like, okay, let's run the math here. Like Dave with Dave's advice, we just lost millions of dollars. And again, I have a ton of respect. I have probably way more respect than people realize about Dave Ramsey. Like I would, he would be like my number one person than I would interview if I could. And I just would have so many questions about, you know, some of the things that we disagree, but I just admire what he's built. And the reality is he's impacting a lot more people than we are because he stayed consistent. He's done, he's actually following, he's doing what we're doing from a standpoint of investing in his business, all those things. He might have millions and millions of dollars in mutual funds. His payroll per month a lot, maybe more than what his entire mutual fund that worth is. I don't know. I've never, this is all speculating. But what I'm saying is, he's where he is because of his business. His business. And that's a huge message that you and I both have is produce in assets and you being your greatest asset.
Speaker 1
that's and it's easy when the guy's making that kind of money And he's getting all the money from sponsors and advertisers and you know, he does very well It's easier for him to say yeah, go pay cash for a piece of rental property or whatever But the average guy out there making a hundred and fifty two hundred thousand dollars a year It's gonna take him 20 years to save enough to go buy that property, and that property's appreciated three times since then, and you'd be better off leveraging that property, get it under your control, take the appreciation and the tax deductions. That's how you build your wealth.
Speaker 2
Question for you, what are some of the biggest mistakes people make in the insurance space, or just in general in finance? What are some of the things that you just show like don't make this mistake?
Speaker 1
roll on the dice on some investment that sounds Look, there's some really good investment that still sound too good to be true Yeah, but you got to do your homework, you know, make sure that it's sound. But really, the big thing that I see is people, I'll give you a great example. We obviously we leverage life insurance, we tell our clients, be very careful, da da da da. I had a client who thought he could pick the next coin that was going to come out in crypto and leverages life insurance policy when and bought the crypto, didn't work out.
Speaker 2
We
Speaker 1
have literally for the last four years just scrambling to keep those policies alive because you didn't have the capital to replace that loan. we have the capacity and the knowledge and understanding. And we can, like I say, we've been inking it along, but that's the worst thing. You just can't roll the dice when you're leveraging a policy. You want to be very conservative. What
Speaker 2
are you excited about in the future? I know you're someone that's full of energy. You're playing basketball. I'm doing breath work in the morning and you're like walking, running up and down the beach. I'm like, man, you're in good shape. I can tell you're full of life. What are you excited for when you look at the future?
Speaker 1
Oh, man, I'll tell you, I've got so many good investments that I just want to see them go to fruition. Like this year, or I guess last year now, I bought a student housing complex at Texas A &M and I just want to see that explode. And then I've got 19 grandkids. So it's fun. When we get together, I'll sit the older ones that can kind of understand. Like I've talked to them about the penny doubling and the frog that gets in the whipped cream. Yeah. I mean, just fun little stories, but I'm always telling them,
Speaker 2
look, think. I'm not familiar with the frog that got in the whipped cream.
Speaker 1
Oh yeah. So two frogs get into this barn. They get into a pail of whipped cream and they realize it can't get out. And so, uh, uh, the one says, oh man, there's no hope and just goes to the bottom and drowns, the other one keeps kicking and kicking and saying, okay, there's gotta be a way, there's gotta be a way, gotta be away. And he just keeps working at it, you know, thinking, thinking, thinking. And then finally he says, I don't think I can make it either. And he stops, but the cream is turned into whipped cream, butter, whatever. And now he can climb out. Wow. And the whole point is, you know, compounding whatever you want to use as your analogy. Don't quit. Don't stop. Just keep going. You just never know what the, what's at the other end of the tunnel. So it was
Speaker 2
like. Any final thoughts that you have? Just anything else that you want to share with our audience or what you were up to?
Speaker 1
You know, I wish I would have somehow, some way back in 1986, learned these concepts. Powerful. I mean, I've been doing this 38, 39 years. And if all I did, because I've lost money, right? Stock market, all that stuff. If all I did was do what we teach now, put your money in the life insurance policy, leverage into safe assets, I'd probably have a lot more zeros behind my name. I mean, I'm lucky I've done well, but just that little change in my life would have just, that'd
Speaker 2
be that much further ahead. Last question I end on the show is legacy question, which will be fun, 19 grandchildren. This will be a fun one. If this was your last day on earth, and you couldn't give your kids or your loved ones any books, any videos, you just had one last conversation with them. What would you say? What would you say to them?
Speaker 1
Well, here's my book. No, you can't give them in your book. Yeah, you should have a conversation. What are you covering? I would talk about, I'd talk about using assets to pay for your liabilities. And that's, that's just a powerful concept that rich dad, poor dad, that would be the recommended first book Yeah, if I could do that and then I would tell him don't ever think about getting a job think about how you can improve other people's lives and You'll be on your way. It's
Speaker 2
a nugget. Dan. Thank you. Thank you for making this happen. We're five years in the making Thank you And I'm grateful to know you.
Speaker 1
Oh, thank you. And it's been fun. And let's do part two
Speaker 2
with the spreadsheet. Thank you so much for listening to the Better Well podcast. It would mean the world to me if you could hit subscribe, leave a review and share this with the people that you know and love.

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