The Money Advantage Podcast

Join us on an enlightening journey with our guest, Becca Wilhite, a certified IBC practitioner, as we explore her personal path into the world of the Infinite Banking Concept and the IBC Practitioners Program. From a basketball player to a worship leader, Becca's eclectic background is fascinating, and her initial skepticism towards life insurance is something many of us can relate to. We share how she overcame her doubts and discovered the power and potential of life insurance through extensive research and experience. https://www.youtube.com/watch?v=HU5uSEWjflA In our enlightening conversation, we get down to the very basics of the Infinite Banking Concept, debunking myths and misconceptions about life insurance. We shed light on the importance of capitalizing and the surprising flexibility of premium payments. Not to mention, our examination of the Dave Ramsey approach and how it has influenced people's beliefs about money and insurance. And trust us, there's more to this journey than meets the eye.  What's more? We also discuss how Infinite Banking can be used practically in everyday life, from paying off debts to buying homes and cars, and even saving for your children's future education. Becca and our co-host Cole share their insights and experiences, showing us that Infinite Banking is not just a financial strategy, but a way to reclaim financial freedom. So, get ready to challenge your beliefs about money and discover a new perspective with us. Let's take this enlightening financial journey together! Introducing Becca WilhiteThe Problem with the Dave Ramsey ApproachWhy Whole Life Insurance for the Infinite Banking Concept?What is the Hardest Part About Life Insurance Education?Paying InterestThe Infinite Banking Concept is a Way of LifeBook A Strategy Call Introducing Becca Wilhite Becca didn’t always want to be an insurance agent. Before that was even an option to her, she was a basketball player, an avid traveler, a teacher, and even a worship leader. Insurance wasn’t on her radar. When some friends got into whole life insurance, she couldn’t be LESS interested. After all, she was also a huge Dave Ramsey fan. Finally, she decided to go to one of the presentations, if only to protect her friend from making a bad financial decision. And that’s where Becca’s path changed drastically.  [04:35] “I went with my guard completely up, ready to just pick this thing apart. But what I found instead was [that] I never knew that life insurance could do that… So it made me curious.” Armed with a dose of skeptical curiosity, Becca started to read books, like Becoming Your Own Banker, that would help her understand. It wasn’t because she was totally on board yet—she was still determined to “expose” the truth, certain that Dave Ramsey couldn’t be wrong.  [05:46] “The more I read, the more I studied, the more interested I got. [I was thinking], this is so different from the status quo, this is so different from what we’ve been taught. I don’t think it’s wrong anymore.” This led to Becca opening her first life insurance policy and working with an IBC life insurance agent. However, Becca was still pretty “green,” as she puts it. She didn’t just want to have whole life insurance, she wanted to know how it works and learn more. So Becca reached out to The Money Advantage about mentorship opportunities and found her way onto Bruce’s calendar.  The Problem with the Dave Ramsey Approach Dave Ramsey is certainly a person with conviction, and we don’t want to downplay the good that he’s done for people. Many people struggle with debt, and his approach is helpful. However, Dave also tends to parrot a lot of things that simply aren’t true—about mutual funds, which is what he recommends, and about whole life insurance. And this can be detrimental to people who could really benefit from capitalization more than anything.  One of Dave’s common talking points is that mutual funds can offer an uninterrupted 12% growth. However, mutual funds rarely hit 12% for even a year, and they can hardly be considered uninterrupted. If you make withdrawals or lose money one year, that’s an interruption to the compounding. Dave’s stance is also that term insurance is preferable to whole life insurance because it’s cheaper, and it’s “good enough.” It gets the job done. However, many agents and advisors have reached out to him over the years to share their perspectives. It’s entirely plausible to speculate that Dave knows better by now; however, he can’t publicly change his stance.  Regardless, we’re not here to say that you can’t listen to Dave. If your ideologies align with him, that’s great. We’re here to share our ideologies with you, and if you align with that—with long-term thinking, the values of capitalization, and protection—then we welcome you to start your IBC journey. If not, that’s okay, too.  Why Whole Life Insurance for the Infinite Banking Concept? One thing that really stuck out to Becca when she was learning about IBC was the financing portion. People are taught to save for retirement and lock that money away in an account that’s for that single purpose. However, people still need to finance all kinds of purchases over their working years and don’t have the means to do it. This can put people into debt or other uncomfortable situations, too.  Yet whole life insurance doesn’t lock your money away. It allows you to create an “all-purpose” savings account that doesn’t get depleted when you use it, thanks to the loan function. This can create much more flexibility for people, without reducing future opportunities. And that was a powerful thing to learn.  What is the Hardest Part About Life Insurance Education? A listener asked Becca Wilhite what the most challenging aspect of educating people about Infinite Banking and whole life insurance is for her. Becca answered the following:  [30:46] “I think a lot of people get tripped up when you say life insurance because everybody already has their own perception of that—good, bad, or otherwise. And so, when you tell them what this is, they have a reaction to that. And usually, it’s kind of looking at you, squinting out of one eye, right? So I really try to hammer home the fact that life insurance is just a tool, just like money’s just a tool. If we could… become our own banker some other way—with a can of pennies or a box of rocks—we would do it that way. Life insurance just happens to be the avenue that already has everything in place. The system’s already there, you just have to plug into it.” Bruce adds that another challenge about life insurance education is that there are so many misconceptions due to poor language skills. People hear things like you can “take money out” or that you “pay yourself interest,” which gives people a false impression. This false impression either makes people believe it’s a magic asset, which it’s not, or people are convinced that it’s fraudulent and the agents lack integrity.  The truth is somewhere in between; the asset works exactly as it’s designed to work. It’s not magic, it’s an effective strategy, and you are still required to play by the rules and pay back your loans, or “be an honest banker.” The language agents use to discuss IBC is of the utmost importance, in order to make sure that whole life insurance is being represented accurately.  Paying Interest Another issue people seem to have with infinite banking and whole life insurance is that they have to pay interest to use their own money. Once again, this is a failure of language. You’re NOT paying interest to use your own money, you’re paying interest to use the whole life insurance company’s money. They lend it to you, no questions asked, because your cash value acts as collateral.  The reason you should want to pay interest to the insurance company is because you own the insurance company, in part. You don’t want to have a negative impact on your company, because that’s how you get dividends. You should want your company to be as successful as possible so that you can enjoy the benefits of life insurance for the rest of your life.  The Infinite Banking Concept is a Way of Life If you’re committing to Infinite Banking, you’re committing to a way of life. This isn’t something that you can do for a year or two and see results. You have to keep at it, be patient, and commit to long-term thinking. If you expect to try it for a few years to “prove it wrong,” you’ll be validated, because that won’t work.  If you want to venture into the world of IBC with a whole life insurance policy, you have to do it for the right reasons. It works when you want to learn and grow and use it over your whole life. If you go in with the expectation of failure, you’re sure to see that. You must be willing and desiring to make this change for your life and your family’s lives.  Book A Strategy Call Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster. That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to https://privatizedbankingsecrets.com/freeguide to learn more.

Want to see firsthand how financing with Infinite Banking will help you come out ahead? https://www.youtube.com/watch?v=E8vTK1dhZWU Get ready for a mind-shift as we journey through the concept of infinite banking, as presented in Nelson Nash's groundbreaking book, Becoming Your Own Banker. We promise to challenge your conventional thinking about storing capital and show you a more profitable way of managing your money. This episode uncovers the benefits and nuances of this method, contrasting it with five different ways of purchasing items and revealing why the Infinite Banking Concept could be the game changer you need. The heart of this episode is a detailed examination of infinite banking, where you play multiple roles, from the policyholder to the depositor, customer, and owner. We illuminate the advantages of this system, using the example of financing a car purchase over 44 years. By comparing this with leasing, bank financing, cash, CDs, and whole life insurance, we uncover the superior potential of the infinite banking system. We highlight not just the numbers but a fundamental, more profitable shift in thinking. Lastly, we delve into the nitty-gritty of capitalizing life insurance policies. This method stands apart from other methods and requires discipline and long-term thinking to see uncommon results. We stress the power of capitalizing and how it can enable you to secure static payments for large ticket items and a robust future. This episode is all about unlocking the incredible potential of thinking like a business and understanding the key players in the game: the policy owner, the life insurance company, the dividends, and the death benefit. Tune in, and let's change your financial future together. Join us for this discussion of life insurance, infinite banking, and building wealth! powerpress] Rethink Your ThinkingNelson’s Car-Financing StrategyWhy is IBC So Effective for Car Financing?Other Methods of Financing:Book A Strategy Call Rethink Your Thinking [05:20] “IBC is a way of life. It’s not something that you’re just going to try.” In order to execute an infinite banking strategy, you have to be willing to completely rethink your thinking. IBC is about storing capital—that’s something you’re already doing, regardless of your background. Whole life insurance is simply the vessel for storage, and by rethinking what capital storage means to you and what it can do for your life, you’ll be able to create life-changing financial strategies.  IBC isn’t magic. It’s just strategy, and you can benefit from it by being receptive to learning new things and challenging your existing worldview about money.  [07:40] “Remember, this is about the human condition and changing your human condition. That is more important than the numbers.” Nelson’s Car-Financing Strategy In this instance, we want you to rethink your thinking about what it means to finance purchases. In this case, we’ll talk about car financing. There are many opinions on how to do it—pay cash, do a short-term loan, etc. In Becoming Your Own Banker, Nelson Nash shares his strategy for financing a car every four years. The basis for this strategy is, of course, whole life insurance, which provides your pool of capital. The advantage of financing via policy loan is that you can set your own amortization schedule, and you can buy a car without losing the ability to earn interest and dividends on the full amount of your capital pool. This not only puts you in complete control of your payment circumstances, but it also makes your banking system more efficient.  Why is IBC So Effective for Car Financing? What makes whole life insurance so efficient? The answer is opportunity cost. Opportunity cost refers to the cost of one financial decision over another. When you pay for something in cash, you lose the ability to invest that cash somewhere else. So not only are you losing the initial capital, but you’re losing all of that growth over the rest of your life.  There’s an opportunity cost to every financial decision. And when you stretch your dollars thin making cash payments or funding multiple pools of capital, you’re actually weakening your assets. Whole life insurance allows you to capitalize without losing the ability to grow your dollars uninterrupted. So you can finance a car purchase all while your cash value continues to grow on the full value of your dollars because there was no withdrawal. Your loan payments, therefore, aren’t playing catch-up. They’re simply reducing the lien on your account so that you can re-collateralize those dollars again. And the interest you pay contributes to company profits, which trickles down to you in the form of dividends.  By creating one pool of money for all of your financing needs, you’re getting growth without sacrifice. You won’t have to spend years playing catch-up to get your accounts back to “normal,” and you won’t miss out on any growth.  If you compare the IBC method to other methods of financing, as Nelson does in his book, you’ll see that the IBC user comes out with greater assets that can be used in a multitude of ways, including retirement income.  Other Methods of Financing: [25:40] Deferred car payments with a savings account [45:17] Financing your car with a Certificate of Deposit (CD) [55:09] Tax Implications of CD Method Book A Strategy Call Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster. That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to https://privatizedbankingsecrets.com/freeguide to learn more.

Have you ever paused to ponder the legacy you’re creating, the inheritance you’re accumulating, or the lasting impression you’re leaving behind? The question of whether you should leave an inheritance often brings up complex emotions and practical concerns. The thought can be heavy, even daunting – but it’s a conversation worth having. https://www.youtube.com/watch?v=z4jwxj6lMEQ With a focus on infinite banking and the inevitable death benefit that will be left to your heirs, we venture into the complex terrain of legacy and inheritance. For some, this is a familiar landscape, for others, it’s a concept that’s met with conflict. Either way, this episode aims to shed light on the obstacles that accompany the journey of leaving an inheritance. Looking beyond the immediate, we explore the significance of long-term thinking when it comes to your finances. Drawing wisdom from Proverbs 13:22, we discuss the idea that a good person leaves an inheritance to their children. This principle, when applied to financial decisions, fosters informed choices that benefit not only you but future generations as well.  With the help of Nelson Nash’s five principles for creating a robust banking system, we delve deeper into the impact of long-term thinking on the process of wealth accumulation and how money, neither good nor bad, is merely a tool that magnifies one’s character. If you’re using Infinite Banking, you’re automatically building an inheritance as well. But inheritance is an emotional word. Maybe you’re opposed because it creates problems, feels like it’s too difficult, impractical, or overwhelmed by how to do it well. Tune in as we talk about long-term thinking, generational wealth, and what’s really best for your kids. What You'll LearnHere's what we'll explore together:How Infinite Banking Leads to Legacy3 Reasons to Leave an Inheritance1. The Bible Directs Us to Leave an Inheritance2. Long-Term Thinking Helps Us Make Better Decisions3. An Inheritance is Actually Good for Your KidsSome Common Inheritance Myths"Inheritance Always Spoils Children""Inheritance Creates Lazy Kids""It's Better to Spend It All During Your Lifetime""Inheritance Planning is Only for Old People"Book A Strategy Call What You'll Learn Here's what we'll explore together: How Infinite Banking automatically builds your legacy - Why this strategy creates inheritance with minimal effort Biblical foundation for leaving an inheritance - What Scripture teaches about generational wealth transfer Why long-term thinking transforms your decisions - How inheritance planning makes you a better steward today The truth about money and character - Why inheritance helps rather than hurts your children when done right Practical steps for preparing your heirs - How to raise children who can handle wealth responsibly How Infinite Banking Leads to Legacy Legacy: it’s the impact you leave behind. For many people, legacy is about what mark they make on the larger world. It’s what people remember them for: their memory. However, legacy can also be financial, and can impact your family not just for a generation, but for many generations when done properly.  The wonderful thing about Infinite Banking is that with it, you’re actually creating your legacy in the background with little effort.  This approach to leaving an inheritance with purpose means you're building wealth while you live and automatically creating a legacy through life insurance for when you're gone. While you’re building cash value, you have the death benefit waiting in the wings to be paid to your heirs. This financial legacy is the most efficient way to pass wealth from one generation to the next because you lose as little as possible to taxes, fees, and creditors. Meaning that you can keep your money in the family and provide a basis for the next generation to grow their wealth beyond what you accomplish in your lifetime. Life insurance isn’t just for leaving a legacy to your family, though. It’s also possible to use it to leave a legacy to your favorite charities and institutions as well.  Regardless of where your money goes, we all need a really powerful reason to motivate us to leave an inheritance. There can be a lot of feelings and emotions tied up in the idea of an inheritance, and some people choose not to leave one at all. If you’re on the fence about leaving a legacy, tune into our conversation as we talk about three reasons to leave an inheritance. 3 Reasons to Leave an Inheritance Whether you're just starting to think about legacy or you've been wrestling with this decision for years, these reasons to leave an inheritance extend beyond just the financial benefits. Each addresses both the practical and the deeper, more meaningful aspects of why inheritance matters. Not just for your heirs but also for you. 1. The Bible Directs Us to Leave an Inheritance In Proverbs 13:22, the Bible states that a good person leaves an inheritance to his or her grandchildren. This foundational truth establishes leaving an inheritance as a biblical principle — one that frames inheritance as legacy, not indulgence. The interesting thing about Proverbs is that it’s all about principles to live by rather than promises from God. It comes directly from the wisdom that God gave to Solomon, so it’s a great source of inspiration when you’re seeking clarity on principles to guide your own life and understand the world.  If you look at the rest of scripture, it becomes clear that generational lines are of paramount importance. There are many biblical families that can be traced in either direction. An inheritance is a resource you can provide to extend your family’s wealth (and legacy) for generations. There’s something to be said for this thinking. 2. Long-Term Thinking Helps Us Make Better Decisions Deciding to leave an inheritance requires a lot of thoughtfulness now, even if you anticipate a long and healthy life. This kind of future-focused inheritance planning creates the long-term impact that shapes every financial decision you make today. For example, the policy you start today could be the vehicle for the inheritance you leave 50 years from now. And all along the way, that requires good stewardship.  You want to make choices that keep your policy in good standing and don’t eat away at the death benefit. You may even make choices that grow your income so that you can buy more policies, increasing the inheritance you leave.  When you embrace this generational strategy, something powerful happens to your financial discipline. The point is that by thinking about the future now, you’re going to adopt a long-term mindset that will lead to better decisions over time. When you’re living financially in the present, you don’t have to think about how your choices will affect your life in 50 years. So you might be more liable to spend than save.  Whether or not the inheritance is your primary goal, choosing to place importance on it can help you make better choices now until your last days.  3. An Inheritance is Actually Good for Your Kids This can be a controversial statement to make. While all parents want to provide for their children, there’s a common belief that money can corrupt and that leaving children with an inheritance can spoil them.  However, we firmly believe that money isn’t good or bad, it’s a tool. It just happens to be a tool that acts as a magnifier of your soul, enabling you to do more of what you were already doing.  [19:05] “So here’s the challenge: the inheritance is never a problem, but the preparation of the children to receive the inheritance is what causes the good use of an inheritance or the poor use of an inheritance.” Your role as the parent, once you decide you want to leave an inheritance, is to begin preparing your children to receive it. Remember point number 2? You’re not just called to think long-term about how you use your money, you’re called to think long-term about how your children will use it too. And this is just one more piece of the legacy you will leave, one where your children will be good stewards of the inheritance. Teaching your children how to use inheritance wisely starts early. This education can take place from day one and doesn’t just have to be financial education. It’s about nurturing your child’s interests and passions, raising them to have strong convictions, and nurturing their entrepreneurial spirit. As they grow, you can help them learn how to create and grow wealth, including their spiritual and social capital.  Some Common Inheritance Myths Despite the biblical foundation and practical benefits we've discussed, several myths persist about leaving an inheritance. Let's address them directly. "Inheritance Always Spoils Children" This is perhaps the most damaging myth. Money doesn't spoil children — poor preparation does. Wealthy families who raise responsible heirs understand this distinction. They focus on character development alongside wealth building. "Inheritance Creates Lazy Kids" Actually, the opposite is often true. When children see their parents building wealth intentionally, they learn entrepreneurship and long-term thinking. They understand that wealth comes from discipline, not entitlement. Studies show that children from families with clear wealth-building strategies often become more entrepreneurial, not less motivated. "It's Better to Spend It All During Your Lifetime" This "die broke" philosophy misses the point entirely. Building wealth isn't just about personal consumption — it's about creating opportunities for future generations and supporting causes you care about. And with Infinite Banking, you can access your money during your lifetime while still leaving a legacy. You don't have to choose between enjoying your wealth and leaving an inheritance.

Prepare to unravel the mystique behind funding and overfunding life insurance, and the empowering concept of becoming your own banker. This episode holds the key to understanding how to fund a life insurance policy, maximize its cash value, and reap the benefits. Our human-centric approach puts you, the listener, at the forefront as we examine how to expand your contract and build additional ones to create your own holistic financial system. https://www.youtube.com/watch?v=0vyR5l4w3Wo We dive right into the heart of constructing a life insurance contract that prioritizes both cash value and death benefit maximization. We lay bare the intricacies of balancing ordinary life, term, and single premium contract components, aiming to achieve the optimal cash value to death benefit ratio. We also confront the challenges of adding a single premium paid-up addition to a contract and the complications that arise when human life value is exceeded, all in the pursuit of financial freedom and security. Lastly, we explore the evolution of universal life insurance over the past quarter-century, with a special focus on its transformation following the 2001 stock market crash. We scrutinize the allure of universal life, index universal life, and variable universal life, revealing their potential pitfalls and unpredictability.  Before we sign off, we arm you with a list of recommended readings to further your understanding. Included is Nelson Nash’s enlightening book, Becoming Your Own Banker, as we champion the importance of financial literacy and independence.  Join us for this insightful look at overfunding life insurance, infinite banking, and gaining financial control! Why “Overfunding Life Insurance” Isn’t Technically AccurateWhy “Overfunding” Misses the Heart of Infinite BankingThe Importance of Policy DesignBenefits of Overfunding a Life Insurance PolicyHow Long Should You Fund a Policy?What if You Want to Shorten Your Payment Window?What is Reduced-Paid-Up?Real-Life Results Why “Overfunding Life Insurance” Isn’t Technically Accurate You may hear the phrase “overfunded life insurance” used a lot—especially in conversations about Infinite Banking or high cash value strategies. It’s catchy. But it’s also misleading. The truth is, life insurance policies don’t have a “maximum” like most people assume. What they do have are funding limits set by the IRS. These limits determine whether a policy maintains its tax-advantaged treatment—or becomes a Modified Endowment Contract (MEC), which changes how the money inside the policy is taxed and accessed. So when people say “overfunded,” what they usually mean is:“Efficiently max-funded—up to the IRS limit—without triggering a MEC.” In reality, a well-structured policy is: Intentionally designed for both early liquidity and long-term growth Compliant with tax rules, so it retains all the advantages of life insurance Strategically aligned with your goals—not just throwing money at a contract This isn’t about cramming in as much as possible. It’s about funding with wisdom—within the rules, and with a long view toward legacy. Why “Overfunding” Misses the Heart of Infinite Banking The deeper issue with the term “overfunding” isn’t just technical—it’s philosophical. Too often, the word leaves people believing that high early cash value is the point of Infinite Banking. But that’s not what the concept is about. Not even close. Infinite Banking is a long-term, generational strategy based on ownership, discipline, and control. It’s about building a system that expands opportunity and multiplies wealth over time—not extracting value as quickly as possible. If you truly understand the principles of IBC, you’re not aiming to “overfund.” You’re aiming to optimally fund—in a way that matches your current cash flow, future opportunities, and the expansion of your system over time. That means designing a policy with the right balance of: Base premium, which builds lasting strength Paid-Up Additions (PUAs) for flexibility and early access And a death benefit that grows as your system grows A policy designed this way won’t just solve for today. It will support the future you’re building—without limiting your ability to grow, invest, or bless the next generation.Because Infinite Banking isn’t about squeezing cash out of a contract. It’s about designing a strategy that works—for your life, your legacy, and the generations to come. The Importance of Policy Design When you’re designing a policy, it’s easy to think that the best possible design is to have the lowest premiums relative to your death benefit. However, that’s not strictly true with life insurance. An overfunded life insurance policy gives you more cash value growth. And so in most cases, you want to cozy up as close to the MEC limit as possible. At the very least, you want to aim for that. However, you also have to consider your priorities. Do you want to prioritize a higher death benefit in the early years or higher cash value? This is going to depend on what assets you already have, most likely. But once you know the answer, you’ll know whether you want to maximize PUAs or not, and toe that MEC limit.  The reason “base” premium doesn’t toe that MEC line is simply because it’s pure equity in the death benefit. Actuaries do a great job of calculating exactly how much you need to pay for your cash value to equal your death benefit at endowment. PUAs, on the other hand, are considered extra and incrementally raise both the death benefit and the cash value.  [19:34] “The longer you pay into the contract, the more cash value you have compared to death benefit.” Benefits of Overfunding a Life Insurance Policy When structured well, overfunding life insurance gives you more than just numbers on a spreadsheet. It’s a way to build a financial system that works with you, not against you. By maximizing paid-up additions, you increase early cash value, so you have liquidity when you need it, without interrupting the growth.  An overfunded life insurance policy lets your capital stay in motion, giving you access to tax advantages, stable compound growth, and the kind of long-term control traditional financial tools don’t offer. You’re not just funding a policy; you are designing a tool that serves your future, your family, and your freedom. How Long Should You Fund a Policy? Another factor of overfunding life insurance is how long you pay into a policy. The MEC limits on a policy are about early-year funding. In other words, they don’t want you funding a policy in a single year. These MEC limits apply to the first seven years of policy ownership. So, in general, you’ve got to toe the line for the first seven years. What about after that? How long can you pay for a policy, and how long should you? This is another critical facet of policy design that can get confusing fast. If you’re using a policy to create your own banking function, however, you probably want to overfund life insurance by funding your policy for as long as possible. Remember, the longer you fund it, the more it grows and the more it CAN grow thanks to compound interest. This is something you want to decide when your agent is drawing up illustrations for you to look at, as it contributes to your base premium “cost.” What if You Want to Shorten Your Payment Window? While a long payment window allows you to overfund your life insurance policy for as long as possible, you might still find that you’d prefer a shorter payment window. Or maybe you want to shorten your payment window retroactively. Let’s explore those funding options. If you know you want a short payment window before you buy your policy, you can do a 10-pay. This means you pay premiums for only 10 years. While this can increase your early cash value, it will also pull down the amount of death benefit you can purchase.  The problem is that you can’t decide after 10 years to overfund the life insurance. While the cash value will continue to grow even after the funding period, you’ll lose volume of interest in the later years.  Instead, you could design a policy with the proper amount of Base and PUA premiums so that you have the option to pay base-only if you want. You can also do something called a reduced-paid-up. What is Reduced-Paid-Up? If you have a life insurance policy and decide that you want to stop paying premiums, there’s a possibility you can do a reduced-paid-up contract. The insurance company will look at how much you’ve already paid into the policy and adjust the death benefit according to your age and what you’ve paid. At this point, your premiums stop completely.  You cannot reverse this decision, so it’s not something to choose lightly. However, if you have some convertible term insurance and you decide you want to increase your liquidity, you can convert and start paying whole life premiums on that policy. Real-Life Results Marcus came to us in 2019 looking for a smarter way to protect his family, grow his capital, and invest in real estate. Since then, he’s used his whole life insurance policy as a financial foundation to launch multiple ventures, without relying on banks. Here’s how he’s put his policy to work: Real Estate Flips Marcus borrowed against his cash value to fund two profitable fix-and-flips. "We used it to pick up the property and make the repairs... then flipped it. Paid the loan back as soon as the equity came in." Collateral for an SBA Loan He secured an SBA loan for his Hotworx fitness franchise using his policy’s death benefit as collateral, without touching the cash. "They didn’t access my cash value... they collateralized the death benefit. It got us where we needed to go." Family Vehicle + New Business With a policy loan,

Are you a new agent or looking to join the insurance industry, and wondering exactly just how and where to get started? https://www.youtube.com/watch?v=R9HQ313aNS0 In today's podcast, Bruce and Rachel will help you know how to set up your business, how to get licensed, and what you need to know about joining an insurance IMO or a life insurance FMO, or better yet why you should not join an IMO. This episode promises to help you unravel the multiple layers of the insurance industry—especially useful if you're an agent kick-starting your career or a business owner considering your options in the field. We tackle the complex question of whether to join a general agency, an independent marketing organization (IMO), or a field marketing organization (FMO). Get ready to absorb invaluable insights that will help you make your mark in the insurance landscape. So, let's embark on this enlightening journey together! What Happens After New Agent Licensing?What is a General Agency?What is an IMO?First StepsResourcesBook A Strategy Call What Happens After New Agent Licensing? After you get licensed to sell life insurance, you have to get appointed with a life insurance company to write contracts. You can do this through a general agency, or you can choose a more independent route.  The problem is that most newly licensed agents can’t just call up an insurance company and get appointed. The insurance companies won’t agree, because they don’t want someone with no experience selling the product. After all, they don’t know whether this person can write good business, or how they’ll represent the product to clients. It’s safer for insurance companies to appoint new agents through an agency or an organization that can provide training and support.  What is a General Agency? [05:50] “A general agency is a person or entity that has already had the experience. They get appointed with an insurance company to sell their products, and then you can get appointed under them. And they, supposedly, are going to help you along in the business.” Often, this general agent or agency is only appointed with one insurance company, although it’s possible for them to be appointed with several companies. This can be one of the best ways to get into the industry because the agent already has a direct relationship with the insurance company and with you as well. This means they have a more vested interest in your growth and can be a real mentor to you. What is an IMO? IMO stands for independent marketing organization and is one kind of organization that you can get appointed to as a new life insurance agent. These are also called field marketing agencies, or FMOs. These organizations do a lot of marketing in order to get agents, and you often don’t have a direct relationship with the agent at the top. These organizations are less concerned with how you fit into the company culture and may value quantity over quality. This can be an incredibly frustrating way to start your journey if you don’t yet know the ropes. On the other hand, you might have a lot more freedom to run your business the way you desire. You may also get some training and marketing solutions that can help you get off your feet.  However, it’s known that marketing companies may keep bonuses from the insurance company, and offer less-than-favorable compensation structures for agents. In other words, it’s possible you might get less money per contract through a marketing agency.  First Steps After you figure out how you want to get appointed with a life insurance company, you want to think about setting up your business. You don’t necessarily need to set up a business entity, however you do want to set up a different bank account to collect your revenue. It doesn’t have to be a business bank account, it can be a personal account. You want to keep it separate.  This will help you in the long run, especially in tax season. Then, you can pay yourself an income from this account. Remember to set aside funds for taxes, as well.  You’ll also want to ask for an open release policy in your contract with an agency or organization. Otherwise, you can have trouble leaving the agency if they’re not a good fit for you. If there’s no open release, you could be stuck in a company that doesn’t work for you, or you might have to leave and go through a six-month waiting period before you can get reappointed with an insurance company. Resources What Are the Benefits of Working with an FMO? Start With Why by Simon Sinek Leaders Eat Last by Simon Sinek Book A Strategy Call Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster. That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to https://privatizedbankingsecrets.com/freeguide to learn more.

Get ready to rethink your thinking about the cost of life insurance and, more importantly, the process of Infinite Banking. Our journey leads us to insights from Nelson Nash's book, giving us a fresh look at how to balance life insurance and the Infinite Banking Concept. We'll tackle the life insurance company's pricing strategy and discuss how the process of creating an entity for Infinite Banking works. https://www.youtube.com/watch?v=x-hjCfhC_ew Our exploration doesn't stop there! We delve deeper into the Commissioner Standard Ordinary Mortality Table and its role in life insurance pricing. By examining the thrilling world of actuarial science, we'll understand how mortality tables are updated using data collected from millions of lives. We'll discuss how aspects like age, gender, health, and lifestyle habits are considered when setting the price of life insurance. Furthermore, we'll delve into why having life insurance beyond the traditional retirement age is crucial and how part-time work can be a significant advantage in this context. Join us for this in-depth discussion and learn more about life insurance, Infinite Banking, and their financial implications! Creating Your Banking EntityLife Insurance UnderwritingLongevity and Life InsuranceBuy, Don’t Rent: The Cost of Life InsuranceBook A Strategy Call Creating Your Banking Entity At the crux of Becoming Your Own Banker, as the title suggests, is that you are going to become your own banker. Not your own bank. Therefore, you need to establish a banking entity outside of yourself. And what Nelson believed to be the ultimate place to do this was whole life insurance. Primarily because the policy loan provision makes it perfectly structured to leverage your capital as bankers do. So if you want to establish your banking entity, you need to buy life insurance. Life Insurance Underwriting First and foremost, life insurance, like all insurance, is about mitigating risk. For you, the person buying the insurance, you’re mitigating the risk of not living long enough. If you don’t, the life insurance company will pay money to your loved ones so that they are cared for financially in your absence.  This means that insurance companies need to be cognizant of their customers’ mortality so that they don’t overextend themselves. If companies insured anyone and everyone, they’d quickly go bankrupt paying death claims on people who died too soon. Since death is guaranteed, the insurance company is insuring people who are unlikely to die too soon. That way death claims become manageable because they’re more likely to be accidents or surprises in the early years.  To ensure that policyholders are likely to have a long life ahead of them, insurance companies require underwriting. This includes a health exam and lifestyle questionnaire that companies can use very accurately to predict longevity. You’ll get a rating, which determines your eligibility. The better the rating, the better the premium you can get for your death benefit.  [19:50] “They know how many people of certain health will pass away at certain ages. They do not know who. So [your rating] is in no way the insurance company saying ‘I’m God and I know exactly when your days are numbered and here’s the day that you’re going to pass away.’ They do not know about your life.” Longevity and Life Insurance Many people think of retirement and life insurance as related. If you stop working and earning an income at age 65, then you don’t need insurance to protect your income anymore. While this may satisfy some people, the truth is that your need for insurance doesn’t stop at retirement, nor should the retirement benchmark really be 65. If you live to age 60, your life is likely going to be much longer than you think. That’s because the longer you live, the longer you can expect to live, thanks to actuarial science. And because you can expect to live many more years, you still have a need for insurance, even if you don’t earn an income. Or at the very least, you probably still want it.  That’s because permanent insurance, like whole life insurance, lasts for your whole life. As long as it’s in good standing, you’ll have it until you die (or if you live to age 120, you’ll just get the death benefit). This means you also get the living benefits—like the cash value and policy loan provision. If you have that, why would you want to stop it? It can help you create income solutions, as well as provide for your surviving spouse and/or children. They can even use it to create their own banking entity.  We also want to challenge your idea of retirement. If you knew you were going to live to age 100, would you really want to be unemployed for 40 years? Do you think you could afford to be? Instead, you could find meaningful work, you could invest, or you could offer your services as a mentor in your industry. There are ways to stay involved that will keep you mentally sharp and financially stable.  Buy, Don’t Rent: The Cost of Life Insurance [47:17] “Why would you want to purchase life insurance for a short time, when you’re least likely to die, only to not have the product around when you’re most likely to pass away? Insurance, in every other case, is insuring an ‘if’ event… Well, life insurance is not an ‘if death happens’ situation. Death will happen to all of us at some point in time.” Since death is a certainty, you want your insurance premiums to contribute to something real and solid that pays out to your heirs. Buy your insurance by getting a permanent policy, don’t rent it with term insurance.  Over the course of your life, the cost of life insurance is far less with whole life insurance than with term insurance. While life insurance is not an investment product, you ARE investing your dollars into an outcome: the death benefit. The only way for the money you put into the product to pay off is to have permanent whole life insurance.  Book A Strategy Call Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster. That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to https://privatizedbankingsecrets.com/freeguide to learn more.

Ready to gain a new perspective on how interest rates affect the economy? What about how interest rates and whole life insurance relate to each other? Let us illuminate Nelson Nash's wisdom on adopting a lifestyle that resonates with the Infinite Banking Concept without stretching yourself too thin. We also stress the need to take a panoramic view of your financial situation and the significance of long-term thinking. https://www.youtube.com/watch?v=LLz8bJJh4iA Finally, we will be your sherpa as we climb the mountain of financial control and self-education. We'll explore why people often settle for financial misery and resist investing time to learn wealth-building techniques or modify their habits. We'll also highlight the value of understanding the concept of Whole Life Insurance to maximize its benefits. Prepped for this journey? Join us and be prepared to expand your financial knowledge and planning prowess. How Does Whole Life Compare to Other Assets?What Nelson Says About Whole LifeAre You Afraid to Capitalize?Dividends, Interest Rates, and Whole Life InsuranceLife Insurance IllustrationsBook A Strategy Call How Does Whole Life Compare to Other Assets? [02:02] “The thing that people don’t realize is that as you devalue currency, interest rates tend to go up. And when interest rates tend to go up, then dividends follow. Historically, they’ve always followed.” So, while people expect their assets to be devalued in such an inflationary environment, life insurance does the opposite. This is mostly because insurance company’s investments are heavily driven by bonds, so their profits follow the Federal interest rates. And even if insurance policies are slow to adopt these high interest rates, you can rest assured that the mutual insurance companies will get your money to you. And in the meantime, you’re not losing money.  It’s important to remember that the value of whole life insurance is going to unfold over your whole life. In other words, it’s not an asset you buy today and get rich from. It’s an asset you buy today that allows you to have more peace of mind, and make more strategic choices over the course of your life, all while building your cash reserves. Twenty years from now, you’ll be glad you started as soon as possible, and may even wish you started twenty years sooner.  The best time to get started was years ago, but the second best time is today. We don’t have time machines to change the past, but by starting the process today, you’re going to get the maximum benefits possible from this point forward. So don’t be afraid to just make the choice. Your future self will thank you. What Nelson Says About Whole Life Infinite banking is simply a concept or a strategy that you can apply to your usage of whole life insurance, in order to be a more efficient steward of the asset. That being said, Nelson Nash knows what it takes to be a good steward and a good IBC practitioner, so it’s important to look to his guidance when in doubt.  One of the most important things Nelson says is to think long-term. If you apply short-term strategies to a long-term product, you are not going to get the results that you desire. Instead, you’ll end up burning through your money and you won’t have it when you really need or want it.  That being said, Nelson also says not to be afraid to capitalize, or use, your cash value. It’s there for you to use. The balance is in making decisions based on long-term benefits, like having a repayment strategy in place and/or capitalizing on cash-flowing investments that will create more wealth for your family.  Are You Afraid to Capitalize? If you’re going to capitalize on your policy, you’ve got to have capital. You build capital by funding your policy. And while PUAs are a part of that, you don’t want your ratio of base premium to PUAs to be too low. This can often be an excuse for people NOT to fund their policy each month, which makes it harder to capitalize.  [11:34] “When you do a policy that is a 10/90 policy—10 percent base, 90 percent PUAs—to me that’s [saying] you’re afraid to capitalize.” The argument for having a premium structured this way is that people think, “What if I can’t pay my premium that month?” After all, the base premium is the amount you must pay, the PUAs are optional with a PUA rider. In other words, this is a decision made from fear, because someone is concerned that they won’t be able to make payments. It’s short-term thinking.  [19:00] “Wealth is grown.” Dividends, Interest Rates, and Whole Life Insurance One reason it’s advantageous to have a healthy base premium is because the part of your cash value that grows due to base premium earns more dividends. So you want your cash value to grow from base premium as much as you want PUAs.  Now, PUAs do earn dividends, too, yet insurance companies have their own proprietary calculations for how the dividend is distributed across cash value from base versus PUA. And when you earn dividends and you apply them to your cash value, they’re considered a single premium PUA. So every time you earn a dividend, you’re earning it on your full cash value: the base premium, the PUAs, and all the dividends you’ve already received. This compounding interest is the most powerful part of your policy apart from the loan provision, which only makes the compounding more meaningful. The other benefit of dividends is that they follow Federal interest rates. Right now, the average dividend is about 6% Gross. Which is far better than you can get with a bank. And while the rates may go down again, they can also go up. The advantage here is that you never experience a down year, and once your cash value increases, that’s your new guaranteed floor.  Life Insurance Illustrations Life insurance illustrations are a snapshot in time. They’re only accurate until your cash value increases, and then everything changes. After all, the illustration shows you a projection based on the current declared dividend. When you actually receive the dividend, you may find it’s a slightly different number than the projection, at least on the non-guaranteed side. (Sometimes it’s even better than projected!) At this point, all future calculations must be based on this new and accurate number—on the guaranteed side (your minimum guaranteed cash value) and the non-guaranteed side (what you can expect from dividends). Since a new dividend is declared each year, illustrations will also change based on the new and updated dividend.  This is to say, an illustration gives you a good idea of how things will go, though it’s only a projection. You can expect everything to move upward on a similar curve, though your exact numbers can vary. [27:40] “It just so happens we’re coming out of a low interest rate environment. So if you’ve been on the fence [about] whether to start a whole life insurance contract right now, you are at a unique time in history to take advantage of rising interest rate environments.” Book A Strategy Call Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster. That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to https://privatizedbankingsecrets.com/freeguide to learn more.

Ever wondered how the Infinite Banking Concept (IBC) can protect your family and boost your business? That's exactly what our client, Marcus, shares in this enlightening episode about using IBC for business. Since 2017, Marcus has leveraged the IBC to support his ventures, from real estate and flipping properties to running two unique franchises - HOTWORX and Destination Athlete. Get inspired as he lays bare his journey from the Navy to becoming a successful entrepreneur. https://www.youtube.com/watch?v=gCU8diqIspU While we navigate Marcus's intriguing IBC journey, we'll also dive headfirst into the world of franchise ownership. Marcus gives us a front-row seat to the realities of owning two franchises, the challenges he faced, and how IBC has been an invaluable tool in his business arsenal. He shares insights about thinking long-term when using IBC and the significance of Key Performance Indicators (KPIs) in pinpointing growth areas. An intriguing highlight is how he cleverly utilized the death benefit as collateral for an SBA loan! Wrapping up our conversation, we explore the nitty-gritty of insurance policies. Marcus weighs in on the age-old debate between whole life and term policies, stressing the importance of understanding the risks and benefits of each. He also shares his experience with buying additional PUAs and how these steps have maximized his benefits. Listening to this episode will equip you with a wealth of knowledge, not just about the IBC and its potential, but also about the ins and outs of entrepreneurship, business growth, and smart financial planning. Tune in to find out how IBC for business works! Getting Started Using IBC for BusinessMaking Your Own Terms with IBCThe Death Benefit is CriticalWhole Life vs. Term InsuranceOne Multi-Purpose AssetBook A Strategy Call Getting Started Using IBC for Business Many roads lead Marcus to where he is today, though most notably, his IBC journey began when he decided to look beyond the insurance offered to him through the Navy. He wanted something more than term, and maybe even something that would be advantageous on his wealth-building journey as a real estate investor as well.  He stumbled across IBC and some podcasts on the matter, and began to research what a whole life insurance policy could do for his family. In 2017, he began his first policy and has used it many times since then. So even in the early accumulation phase, his policy has created value for his family.  While he hasn’t yet used his policy for long-term rentals, the first two moves he made were fix-and-flips. He’s also used the cash value as collateral for an SBA loan to franchise a HOTWORX, a vehicle for his wife, and even funds for a Destination Athlete franchise, demonstrating the breadth of options cash value can provide.  [05:37] “I’ve always paid it back as soon as that equity comes back in. So pay it back, then reuse it again. But if any bit is deployed, I like to pay it back down to zero before I use it for anything else again.”  Making Your Own Terms with IBC What makes IBC function well, and what Marcus demonstrates so avidly, is being an “honest banker.” In the same vein, you might hear us say, “Don’t steal the peas.” The sentiment behind both phrases is that you’ve got to be responsible with your money. And when you take a policy loan, you want to repay it. This is the best way to replenish your capital and use it again.  While you certainly don’t have to, it’s this mindset of good stewardship that prevents problems down the road and ensures that your policy keeps running smoothly. Marcus’ own family uses their cash flow from the assets that they purchase in order to replenish their capital first, then they experience the benefits of that cash flow second. This allows them to accelerate their asset base early on because they’ve got the cash value free to re-invest.  [08:33] “That’s one of the things I love: you can make your own terms.” Marcus shares that in busy seasons, his Destination Athlete business does so well that he can make additional payments on his policy loan. While that means there’s cash flow he’s not seeing right now, it also means that his loan will be paid off that much sooner. Then the cash flow from Destination Athlete can be pure cash flow for his family, and he’s got cash flow ready to be deployed elsewhere.  [09:00] “I don’t let it bleed over into what our personal [income] is, and my income from the Navy, or rental. So I keep it all segmented into what I’m using it for at the time, and let that actual asset pay back the loan.” The Death Benefit is Critical For Marcus, part of the initial draw to IBC was the death benefit. As life insurance kept coming up in his research, this was one of the critical elements that drew him to the concept.  [29:55] “[The death benefit is] a huge part to me because I want to leave something to my children, and to my wife if she’s still here whenever I pass. I did about six months' worth of reading and listening to that podcast, and that’s when I found The Money Advantage podcast.” Whole Life vs. Term Insurance Somewhere along his journey, Marcus was told by another advisor that whole life insurance is bad, and agents only sell it for the commission. He was baffled when Marcus shared his experience. The thing is, there are bad apples in every industry. There are a few who give the whole profession a bad name, and unfortunately, whole life insurance has a poor reputation–especially when it’s lumped in with universal life insurance.  The truth is that whole life insurance and term insurance are both assets that have their place in your financial portfolio. Convertible term insurance, for example, can help you lock in your insurability now, so you can convert to whole life insurance later. This is great if you’re not yet ready to commit to whole life, yet you want the coverage and peace of mind that a policy provides. Term insurance is also ideal for getting more death benefit if you cannot yet afford to buy the amount you want in whole life insurance. But whole life insurance is the permanent, safe solution that gives you a place to store cash. Term insurance just doesn’t do that.  Many people who sell term insurance only advocate for a “buy term and invest the difference” strategy. However, many people don’t make it to the “investing” part for any number of reasons—they don’t know how to invest effectively, they lack the capital to invest significantly, they don’t have the discipline, etc. Whole life insurance allows you to do both–create a savings discipline that builds capital so you can invest outside the stock market, as Marcus brilliantly demonstrates with his own investments.  One Multi-Purpose Asset The advantage of whole life insurance over most other assets is that it can provide many benefits and results from a single premium payment. Rather than splitting your dollars between many different buckets, you have one large pool that can be leveraged for any purpose. Meanwhile, your money is protected, growing, and liquid. And at the end of your life, you’ll leave a death benefit to your loved ones.  It’s an asset that streamlines your money to make it more efficient for you. Marcus’ family is proof, as they’ve leveraged cash value for real estate, personal purchases, business franchises, and more.  [40:35] “Yes you have to pay it back, and yes you’re going to pay interest on it, but it’s being treated and earning dividends uninterrupted while you’re also simultaneously using it… Then if I can do that and also secure a death benefit while doing the same leveraging with those funds, it just makes sense.” Book A Strategy Call Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster. That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to https://privatizedbankingsecrets.com/freeguide to learn more.

When planning for retirement, one of the biggest fears people face is outliving their money. What is a lifetime annuity? Simply put, it's a financial contract that guarantees you'll receive income payments for the rest of your life, regardless of how long you live. By popular demand, we will be continuing our conversations from last week on annuity strategies! This time, we are joined by special guest Joseph DeFazio! Joe is a seasoned financial educator and will bring a fresh perspective on lifetime annuity income and how annuities can benefit your financial life! https://www.youtube.com/watch?v=YtZbQx8qVXc If you're interested in guaranteed lifetime income, then this video is for you! We'll discuss the different types of annuities and explain the basics of lifetime annuity income. Annuities as a Form of Risk TransferHow to Structure Your AnnuityImmediate vs. Deferred StartPayment Structure OptionsSingle-Life vs. Joint-Life CoverageAdditional Guarantee OptionsReal-World Example: Single Retiree vs. CoupleWhat is a SPIA? (Single Premium Immediate Annuity)The Appeal of SimplicityWho Should Consider a SPIA?Who Should Consider Annuities?When Annuities Don't Make SenseLifetime Annuity IncomeReal-World Example: Kathy's AnnuityLifetime Income Annuity Pros and ConsThe UpsideThe DownsideLifetime Annuity Income — How Payments WorkHow a Lifetime Annuity Fits into Your Retirement PlanBook A Strategy Call Annuities as a Form of Risk Transfer [11:10] “An annuity is a private contract that completely transfers the risk of outliving your money to the insurance company in exchange for a premium payment. The insurance company uses bonds and [then] layers on actuarial calculations, actuarial science, that pools the risk so they can guarantee an income stream for as long as your contract specifies.” When you buy a lifetime annuity, you're basically handing over your biggest retirement worries to the insurance company. They take on the risk, and in return, they promise to pay you for life. In other words, an annuity is the inverse of whole life insurance, which transfers the risk of not living long enough to the insurance company (in exchange for a premium). Because insurance companies manage the risk of living too long AND not long enough, they’ve created balance. So what risks are you actually transferring when you purchase a lifetime annuity? There are three big ones that keep retirees up at night: Outliving retirement savings - What if you live to 95 and your 401(k) runs dry at 85? With a lifetime annuity, that's the insurance company's problem, not yours. Market volatility impacting income - Market crashes don't care if you're 75 and need your monthly income to pay for groceries. Your annuity payments stay the same regardless. Inflation erosion - This one's trickier with fixed annuities since your payments won't increase, but some annuity options do include inflation adjustments.  How to Structure Your Annuity There are two phases to an annuity: the accumulation phase and the annuitization phase. During the accumulation phase, you’re funding the annuity, and you can choose either a fixed rate or variable rate, both of which have their pros and cons. When you're looking at a life income annuity, you'll find there are several ways to set it up depending on your situation. Here are the main choices you'll face. Immediate vs. Deferred Start In the annuitization phase, one of the choices you must make is whether you want your benefit now or later. If you choose to start receiving your benefit within 13 months, that’s called an immediate annuity. Any time after that is considered a deferred annuity. Think of this as the "when" decision. Need income right away because you're already retired? An immediate annuity starts paying you within a year. Still working and want to let your money grow? A deferred annuity lets you wait and potentially get larger payments down the road. Payment Structure Options Then, you choose how you want to receive your benefit. You can get a level payment, and increasing payment, or even a variable payment stream that would be tied to an index. The choice will likely depend on how long you expect to take income, compared to how large your annuity is. Here's where you decide what your payments will look like: Fixed payments - Same amount every month, simple and predictable Inflation-adjusted payments - Payments that increase over time to help keep up with rising costs Variable payments - Tied to market performance, which can mean higher upside but less predictability Single-Life vs. Joint-Life Coverage And finally, you can choose what types of guarantees you want on that benefit. If you choose to have no guarantees, then the income benefit stops as soon as you pass on. You can also tie an annuity to someone else with a survivorship rider, which would continue to pay the income to a spouse or partner for the remainder of the annuity term. This is a big one if you're married. A single-life annuity pays higher monthly amounts but stops when you die. A joint-life annuity pays less each month but continues paying your spouse after you're gone. Additional Guarantee Options Another way to structure it is placing a guarantee on the term, like 10 years, where it pays to someone for that term no matter what. You can also choose to simply guarantee a return of premium, so if you pass on before you’ve earned back your initial premium, it will pay a beneficiary until that benchmark. Real-World Example: Single Retiree vs. Couple Let's say John, a 65-year-old single retiree, has $500,000 to put into an annuity. He might choose a single-life immediate annuity with level payments, getting around $2,500 per month for life. Now consider Bob and Mary, both 65, with the same $500,000. They might opt for a joint-life annuity that pays $2,200 per month while both are alive, then continues at $1,650 per month to the survivor. Less money each month, but protection for whoever lives longer. What is a SPIA? (Single Premium Immediate Annuity) [15:01] “A person’s idea of an annuity is often tied to a SPIA because this is the description that most people have of an annuity.” SPIA stands for a single premium immediate annuity. In other words, you pay for the annuity in one lump sum and begin receiving an income within the first 13 months. Since it has its own acronym, it’s what many people are familiar with when the topic of annuities comes up. The Appeal of Simplicity That being said, a SPIA isn’t for everyone. As you can see above, there are many ways to structure an annuity to work for your particular set of needs and goals. The main appeal of an SPIA is its simplicity. You know exactly what you're getting - no market risk, no investment decisions, no surprises. Once you buy it, you're done making choices. The insurance company handles everything, and your checks show up like clockwork. While the immediate nature of the SPIA may be beneficial to some, there are some things to consider. One of the major benefits of the SPIA is that you’re going to get a much higher rate of return on this than any other annuity. The Trade-Off: No Liquidity However, these annuities are designed to be more short-term, and any remainder goes to the life insurance company, not a beneficiary. But here's the trade-off: once you buy an SPIA, that money is locked up. Unlike other investments where you might be able to get some of your principal back, an SPIA is all-or-nothing. You can't change your mind or access a lump sum if you need it later. Who Should Consider a SPIA? Generally, the best candidate is someone who is running out of money, is over 85, and wants to create the best possible end-of-life income. It’s certainly not right for everyone, nor is it the only option when it comes to annuities.  Who Should Consider Annuities? Almost anyone can benefit from looking into annuities, even if they don’t choose to buy them. That’s because most people will find themselves wanting to protect against either longevity risk (living longer than your money) or sequence of returns risk (when you have to take an income, even in a bad market). Annuities can solve both issues by creating guaranteed income without the fear of loss. Additionally, if you have CDs or bond funds, you should consider annuities. This is because, with bond funds in particular, things can get a bit bumpy. As we’ve seen in the last few years, bonds have dipped as much as equities in some cases. Annuities won’t do this, because they’re designed to support your lifestyle. When Annuities Don't Make Sense But lifetime annuities aren't right for everyone.  If you need access to your money, annuities probably aren't for you. Once you hand over that lump sum, it's gone. You can't get it back if you need cash for an emergency or unexpected expense. Also, if you're still chasing high growth potential and willing to accept the ups and downs that come with it, the steady but modest returns of an annuity might feel too conservative. You're essentially trading potential upside for guaranteed income. Lifetime Annuity Income When you choose to purchase an annuity, one thing to remember is that there’s an account balance, and there’s a balance that the insurance company calculates the income on. This can get confusing. However, think of your account balance as your actual money. On the other hand, the income account value or benefit-based account value is a phantom number that the insurance company has calculated to guarantee you income off of.  If you choose to have a lifetime benefit income rider, then you really are guaranteed income for the remainder of your life, no matter what. So this phantom number the insurance companies create is based on actuarial science and your personal longevity.

Are you interested in knowing the truth about generating guaranteed cash flow with annuity strategies? Learn about the benefits and drawbacks of annuities, as well as some annuity strategies that will help you create guaranteed cash flow. Are annuities the unsung heroes of guaranteed retirement income flow, or are they just another intricate financial product that's more trouble than it's worth?  https://www.youtube.com/watch?v=gvmideJqIdQ Join us as we crack open the world of annuities. We'll be discussing how these financial tools, often misconstrued as a bad choice, can actually work in your favor to provide a stable income stream during your retirement. Hold on to your hats as we dissect the differences between variable, fixed, and fixed index annuities, revealing the various fees that come with each type.  Annuities can be a great way to secure your financial future – but make sure you understand the pros and cons of annuities (fixed annuities, deferred income annuities, single premium immediate annuities, and variable annuities) before signing up.  Tune in, whether you're an annuity advocate or skeptic, and let's debunk the myths together.  What is an Annuity?Immediate Annuities vs. Deferred AnnuitiesAnnuity Strategies for Guaranteed Cash FlowCons of Annuity StrategiesWhy Buy an Annuity? What is an Annuity? Annuities are a lesser-known insurance product that can provide cash flow in a way that’s guaranteed. These are typically intended for income later in life. To buy an annuity, you can pay a lump sum or in monthly premiums. That sum then earns interest and distributes an amount of monthly or annual income either for a specific term or for the rest of your life. This is why it’s generally a product for retirees.  In other words, you can give the insurance company money, which is guaranteed to grow as outlined in the contract. After that accumulation phase, the company then distributes your account as income to you over your specified time period.  This can be beneficial in a volatile market when you don’t want to lose money in your portfolio.  Immediate Annuities vs. Deferred Annuities When you purchase an annuity, you an either choose to receive income immediately, or you can defer that income to a later time. If you’re 75 and want an income stream now, you might choose an immediate annuity. However, a deferred annuity might be beneficial if you come into a windfall and don’t yet need an income. You can then specify at hat age you’d like to start receiving payouts. If you choose to go with a deferred annuity, the insurance company may incentivize you to keep your account with them by offering step-up credits. If your annuity is tied to an index and doesn’t increase that year, you may get a step-up credit if you don’t take any income that year. This is meant to encourage you to keep your annuity in place, rather than liquidating it and taking it elsewhere.  Annuity Strategies for Guaranteed Cash Flow [05:16] “Not only [can] having annuities enhance your equity portfolio, your investment portfolio, but it can also enhance the happiness of how a person spends their retirement.”  The advantage of an annuity is that you can sleep at night, knowing that you have a guaranteed income in retirement. There are, of course, many types of annuities with their own advantages and disadvantages. If you do choose to purchase an annuity, it’s important to have a grasp on what’s available that fits with your existing portfolio and income needs.  Below are just a few examples of annuities. Fixed Annuities The first type of annuity is a fixed annuity, which means it has a fixed interest rate upon purchase. It lasts for a designated time period, but it can be renewed. For example, if you buy a fixed annuity for $100,000 at a rate of 5.4%, you’re guaranteed to earn that rate for the stated period of time in your contract. This does compound, so you’re getting an increasing volume of interest each year. This rate won’t change unless the contract specifies that it may change under a certain period or circumstance.  Fixed Index Annuity This type of annuity is becoming increasingly popular right now, because it’s actually fixed to an index. Most commonly, it’s fixed to the S&P 500. With this type of annuity, you’re guaranteed not to lose money. So if the S&P or other index is positive over a given year, you’ll get a percentage of that. If the index is negative, nothing happens. The exact calculations are of course more complicated, yet you can count on not losing money with a fixed index annuity.  On the flip side, this also means your “upside” is limited. So you’re not going to make 20% if the index makes 20%. This is how the insurance companies are able to afford not to reduce your balance for a loss.  Cons of Annuity Strategies While there are many advantages to annuities, it’s important to be aware of the cons as well. One major con is that because the income you create with an annuity is designed to be paid over a specific time period, it’s not very liquid. If you want to pull more money than the insurance company has decided to give you, you can’t do that. The reason you can’t do that is because the insurance company either designates an income schedule based on the term you set, such as 10 years of income, or by actuarial calculations if you want “income for life.” So what happens if you buy an annuity and die? Well, that's one of the costs of an annuity. The insurance company generally gets the remaining balance (although there are some instances when they may pay some to heirs). While this can be a con, it's also the cost of doing business. And in most cases, the insurance company is calculating your income so that if you live, you pretty much get to use it all. If you have a Fixed-Index Annuity, another con is that you might not get the same returns as simply investing on your own. The problem is that you don’t know what the market is going to do, so it really is a gamble. You may find that your annuity is capped at 7%, and the market keeps earning 10%. Of course, things can always take a turn, and you might be glad you’ve got a 0% floor. Ultimately, it’s up to you and what you’re willing to risk. But if peace of mind is your goal, an annuity can be worth it.  Why Buy an Annuity? [36:01] “The emotional reason why people would do this is for the certainty of this. The reason they wouldn’t want to do it is because they are afraid that they would buy it, walk out of the insurance company’s office building, and then get hit by a bus so that nobody ever gets paid.”  Ultimately, an annuity, like a life insurance policy, is a trade-off between cost and risk. If you want the peace of mind that you’ll have an income stream for life, the trade-off is that you give up some liquidity. This can be really powerful, and allow you to structure and use your remaining assets in a more advantaged way.  Annuities won’t be for everyone, yet they can be a critical part of your distribution phase in retirement.  Book A Strategy Call Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster. That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth… plus boosts your investment returns, and guarantees a legacy, go to https://privatizedbankingsecrets.com/freeguide to learn more.