Is “Retirement” a Bad Word? Passive Income, Nelson Nash’s Philosophy, and the LSL Team’s Take

Welcome to the Life Success and Legacy Podcast. We're glad you're here and we hope you enjoy the episode.

Hey everybody, we want to welcome you back to the next episode of the Life Success Legacy Podcast.

My name is Chris Bay and we've got two of the mics today. Mike Gevert is out. We kicked him out of the club today.

Yep. We're going to talk about retirement and since he's the only one that's traditionally eligible for retirement or like, no, you don't get to talk about this.

No, no, no, no, other other other obligations. How are you gentlemen?

So, you know, I like to stick my four fingers up and talk about the four things that I BC does, right?

If anyone watches this podcast, they've seen that a time or two. And today, what we want to do is talk about the third one and the language around that.

So number one is eliminating outside debt. So that's things like credit cards, car loans, student loans, etc. When we have to, when we owe that money to somebody else and they get to control the terms, that's that outside debt.

Secondly, is building our warehouse of wealth, which we'll talk more about probably today in this conversation.

The third one is what we're going to talk about today and that is passive income, aka retirement.

Yeah. Okay. And we want to dig in deep and unpack that. And then the last one is tax-free wealth transfer.

So, Mike Crawford last night, we were doing our front porch with our community. And we're having a good conversation. And this topic actually came up. Do you remember how it was phrased or how it was asked?

Yeah, I think the long and short of the question was, we talk a lot about using your policies for investments. We talk a lot about passive income, but we talk a lot about wealth transfer and getting out of debt.

But everybody kind of gets, you know, sheepish around the topic of retirement. And it's not so much. And I think we've had an old podcast about this topic, not only just when we did our BYOV book walk, which you guys can all find on our website if you're curious about that series that we did.

But also, you know, we did, we have spoken about this, but it's definitely the one that when Chris raises his four fingers is the one that we sort of, we talk about, but we then we move on, you know.

And I think it's because there's a lot of depth to it. And we're going to get into that. But I think that there's, there's a, that's a multifaceted approach.

Like part of it is, what is, what was Nelson really meaning when he said passive income? What was he, what was his philosophical approach to the word retirement?

And then maybe furthermore, like how do we, his life success and legacy help support our clients as they, as they journey towards the next phases of life?

Whether those are, you know, continuing to do the job that you have now or adventuring into careers or things that are more passion projects that you want to endeavor into.

So yeah, I think that's where the gist of that conversation started last night. We definitely didn't have a chance to dive into it, which ultimately led us to this this morning.

Yeah, it was kind of a request, you know, yeah, we actually were discussing topics for our mastermind at the, at the live event that is coming up April 11th in Houston, 10th and 11th.

And, and, and one of our, one of our clients was like, man, I'd really be curious if we could really dig into the old concept of retirement.

So this morning we are, yeah, jump into it. So yeah, I think we can talk about as you kind of outline kind of historically what is retirement pensions, all those kinds of things.

How did they come into play? We can talk about Nelson's philosophy, personal views of retirement.

And then let's get into the nuts and bolts about how does IBC actually play a role? What role does IBC play in people being able to create passive income?

And you're going to hear us use retirement and passive income interchangeably.

But I think let's talk about that part because that's the historical and philosophical piece with this.

Let me go back in time.

And Nelson talks about this actually in his book. If you go to page 66, the chapter is called the retirement trap.

He doesn't mince words, does he?

Never.

He calls it a trap.

Quang, why do you think Nelson chose that language? Why I'm putting on the spot here, but why do you think Nelson chose the language the retirement trap?

Obviously, it's not a good thing, right?

I want the retirement golden years, right?

So that kind of spurs to mind like, oh wait, let me rethink this topic.

And in this vein, I think there's kind of an expectation, let's say, societally made or even the government kind of put it upon as we can talk about that.

Or at retirement or whatever that age is that they kind of deem arbitrarily.

We just, you know, we should be comfortable. We can relax and enjoy.

And that's the trap, right? You're lulled into this. So put your money aside, put it into, you know, maybe these qualified accounts and let us invest it for you.

And then, you know, fast forward to, you know, that age, you realize too late, the trap shuts, you're done. You know, that money isn't what you expected or what they all touted.

You're out of time, right?

You know, other things to kind of shore that up and supplement it. So that's what I think, you know, he may have.

Yeah, I think so too. And, you know, I think historically, Nelson talks about this of, you know, back in Germany is in Bismarck back in the 1890s and they were losing citizens.

Yeah.

And so they wanted to create some incentive for people to stay in Germany during that time.

And so they created basically a pension or social security when people reach the age of 65, I believe it was at the time somewhere around that range.

But what was fascinating that Nelson uncovered is, oh, they didn't have penicillin back there back then.

And most people didn't live past that age. And so the government knew this. They weren't ever going to pay it out.

But it was an incentive to keep people in there. And that was the, the seed of this idea of social security, pensions, retirement, etc., eventually it transferred into the United States, right?

And we had this temporary plan of social security. Well, how temporary is it now, right?

And then, yeah.

And then we had the idea of pensions, which was on the responsibility of the businesses or the government, right, to pay out for people.

And then, and I'm fast forwarding through the history part of this, then we got into 401k, which was this loophole when people had, you know, done everything they can with their investments and things like that and all.

And they said, oh, but you can put additional money into this 401k. Well, businesses saw that as an out.

So what they did is they shifted all that responsibility of investment to the individual employee rather than the businesses being responsible for that, right?

So now we have all these tax-qualified plan options that we put money in. We have to live by all these tax rules.

And we're going to build it up. It's the accumulation model, right, Juan?

Yeah.

We got this accumulation model.

And then we start taking pieces of it and interrupting the compounding interest, right?

So you got the accumulation model and then you've got the passive income.

So you're going to hear us talk about retirement and probably not in a positive light because of that concept.

But we tend to lean more towards the idea of passive income.

You want to unpack that a little bit, Juan, just the difference for people between that accumulation model and passive income?

Yeah. So like you said, starting with the traditional model, right?

You work for, you know, 40 hours a week for 40 years and then retire at 40% of your, you know, active income, the 40, 40, 40 rule.

Yeah.

Additionally, they sell that to you and that's part of that trap, right?

And I talk about it in my book, Gibbs, it's kind of like the hamster will kind of stuck in.

Before you know it, you know, you're there and it's like, oh, there's no off ramp.

But marketing plug.

Yeah.

So, so the idea is with accumulation, you're just setting aside an X amount, maybe five or 10%.

If you're really good, depositing it into an account to save up and build up that nest egg.

We talked, we call it a nest egg, right?

And then at retirement, whatever that age is for you, right?

Presumably you'll have enough of that nest egg that you can kind of start feeding off of it, you know, like you say carving that amount.

And then you kind of hope that you, you know, don't outlive what, you know, that amount will provide for, right?

And that's a daunting task, right?

Because you can back calculate to some extent, you know, now it's like $2 million you need to save up, right?

For somewhat multiple retirement.

And most folks just never will get there.

I mean, let's just put it there, right?

That's the trap.

Whereas the cash flow model or the, you know, the passive income model focuses on what you can do on a monthly basis or an annual as opposed to looking out 40 years and hoping for that $2 million.

And what can I do today?

Maybe that can build up a couple hundred dollars a month, right?

That you can do in perpetuity and build up quickly so that it's no longer about saving the $2 million, but building up that cash flow equivalent of what that $2 million would otherwise provide for.

And, and I think of it like having the golden goose that's laying these eggs in the beginning, it's not a big egg, but over time this, you know, production grows.

And as opposed to the accumulation model, when you get there, you start carving on the goose, the feed off of versus if you did it the cash flow passive income way, you're just taking these eggs that continue nonstop, you know, providing for you.

Yeah, on that, on that mindset of analogies or word pictures for people, I almost think about in the gardening world where you have annual plants and perennial plants, you know, the annual plants, you are planting them, you get this beautiful color for the season.

But then they die off and you've got to reinvest, you got to continually reinvest, whereas with your perennials, they come back year after year after year.

And so that's kind of the, the idea of sort of, are typical what we hear about retirement investments, you're investing in stocks, you're investing in Wall Street, you know, you're doing these things.

And then one, those things are at risk.

And two, it may, when you need it, you're going to actually liquidate those items, you're going to sell off pieces of it.

Like Kwong was talking about like you're harvesting the animal, right?

You're not just taking the eggs, you're harvesting the animal.

And so as you're selling off those pieces to gain that income, you are cutting into that ongoing compounding growth, which is the beauty and why Nelson landed on specially designed whole life insurance is as the foundation of everything we do financially.

We control it.

It is liquid and we're, we're using loans against it. We're using collateral, so we're not killing the animal.

We're just harvesting the eggs along the way.

So let's talk a little bit about, I know in Nelson's book, he uses several examples where he actually is using loans from the policies, right?

He's using cash from the policies to supplement passive income.

I want to talk, and then Kwong maybe you could talk a little bit about an illustration, but when people ask me if they come to me in their 50s, and they say, hey, I'd like to start a $10,000 policy and in their dream conversation, they're expecting that to serve as their whole passive income for retirement.

I'm like, that's not going to happen, right? It goes back to two Nelson's principles, number one, think long term, what, you know, when you start your 50s is going to be tough to build up the kind of passive income you need, capitalize your system generously, which means if you want a little out of your system, put a little in, if you want a lot out of your system, put a lot in.

So, and then don't steal the piece, of course, if you think about a person who started in their late 20s or 30s, and they capitalize their system and didn't steal the piece, could they potentially use the cash value as loans to supplement their their passive income.

And the policy continue to grow and compound the answer to that is yes, right, even with dividends being different now, being lower than they were when when Nelson wrote the book.

The answer is yes, but if we're starting this later in life and we're not willing to capitalize generously, it is not going to it is not retirement, it is not that investment tool, right.

But it can be the warehouse that you use as leverage as collateral to invest in other things that can build that passive income.

So, absolutely.

Mike, when you want to talk a little bit, I think you ran an illustration just talking generalities for people.

Yeah, sure. So, you know, I'm no spring chicken, right. So, I before this, you know, I really aren't golden goose though.

Golden goose.

No, but I ran one of my illustrations from my actual policy. This one I opened when I was 48.

And at standard, right, I looked ahead to it and at 65 or at that arbitrary number, I'm sure I'm still be busy by then, but my base premium will net me, you know, 93% right.

So, so literally the, and not to get in the numbers because it's a it's a big policy, but 93%.

So, imagine if you put in a dollar, right, it's a dollar 93 that I get a additional cash value.

And that's 65 jumping ahead at age 75 when this policy drops off the base altogether when it's fully paid up.

And I no longer even owe the base premium. I put nothing in the next year and it's growing by, you know, 82,000 in this one, right.

And the dividend alone is, you know, 38,000, right. So, there's different components to this growth that also people think about where a lot of folks will ask me, well, what's the dividend look like, right.

That's just one component to the growth because Nelson talked about, you know, using the dividends, you could, you can take the dividends and earn it or you could let them result in the cash value, which is quite a bit more than that and live off of that.

Or that, like, as the leverage source, the continued leverage growing leverage source to start, you know, or continue your passive income, stacking or whatever it is, which is even a whole other, you know, level of awesome.

So does that help. Yeah, yeah, absolutely. It's

Nelson, I mean, he uses several examples in the book and in some of them, he doesn't even show love for passive income and part of that. And we know this because of our relationship with Nelson, Mike,

and his relationship with Nelson is Nelson didn't always write in the book, becoming your own banker, how he would, how he would coach people.

I mean, it was a matter of he was trying to meet people where they were and people had such an aversion to debt that loans against their policy would be a turn off.

So a lot of times he would use other methods, other ways to use the policy. But if you ask Nelson, he's like, oh, for sure, I would use loans, right.

Because I don't want to cut into, I don't want to cut off a limb off of the animal. Right. I want to keep that compounding interest going. I just want the golden egg. Yeah.

That's a great point because he's back to the financing, you know, example where a lot of his different scenarios were not optimal. And he admits it later on.

That's where he was. And it was still amazing. Right. So imagine if you don't cut out from, you know, the dividends or take away from its growth.

Yeah. And let it grow into the cash value and use that in a more optimized manner. Wow.

Yeah. No, he used to say, Everett and I called him one time. This is, you know, 2017, probably.

We called him from his basement, his house. And we were asking a question about a particular part of the book. And he goes, oh, you caught that, did you?

It was almost like he was laying Easter eggs, you know, like in like video games, they always hide things in the game to like you find it. It's like a little prize.

And that sort of felt like dealing with Nelson sometimes in a good way, like he was such a, he was trying to straight shoot you, but he also knew that people were not only just skeptical because he had been going around for years trying to promote this concept to banks, investment groups, schools everywhere.

And they just kept laughing him out. You know, they were like, you're a clown. They're never going to disrupt what is the norm as we've been discussing.

And so I think that sort of hardened his resolve towards this not only concept, but like the philosophical aspect that he approached, you know, passive income retirement with.

And then furthermore, Chris, you know, you were talking about like a client who comes to you or a potential client and they're saying, hey, in my dream conversation, I really want this policy to be my.

And I'll use my effort as an example when he started, he would have told you and he has told this story hundreds of times, I did not think this would be for me.

I was thinking about my kids and my kids kids, but he goes, he's been doing it now for what 20 plus here just over 20 years.

And guess what? It's working, but you know the difference is not only did he screw up so catastrophically in the first two years.

I mean, if you haven't heard that story, go back and listen to some of Mike Everett's stuff.

But furthermore, he then turned on that life switch, right? That thing clicked where he was like, ah, policy loan repayments, that's the key.

That is the secret sauce to infinite banking to so many ways is always be an honest banker as Nelson taught us, but then guess what he started doing.

He started strategically and purposefully find more policies on his family, his business partners, those he was, you know, and had an insurable interest in because the other thing that Nelson taught us throughout the book is that it requires a system of policies.

That doesn't mean you need to have 49 like Nelson did. That's Nelson was, uh, Nelson.

But being said, you know, we have clients who do come to us and, and I think it's a common misconception because you know, you have one for a way, one K-plane with your employer.

You don't have multiple investment buckets within that company necessarily, right?

Now, you may venture off on your own, right? And maybe you buy some stocks or some Bitcoin or invest in real estate and you're kind of diversifying yourself.

But like, I think we are so trained as a society because of the way the government has structured it.

We walk into our employer, Mr. Employer says, hey, during open enrollment, here's your one option.

You get to work with this company. Here are the four buckets that you can put your money in less aggressive, most aggressive.

Go.

And so I think it's easy for us to sort of get lost in the idea that, oh, one policy ought to sustain us.

And, you know, again, if it's a massive policy, maybe, maybe you have a better chance at it, but I believe Nelson's principles say capitalize generously, which I don't mean, I don't think means necessarily put more money into one policy.

I think it means to, to plan a system of policies throughout your life that will then be something that sustained you and your family moving forward.

Yeah, I mean, Mike, Everett's a great example is not only do you start late, right, but for the first couple of years, you know, just being honest, banker, paying himself first, you know, policy loan payments and franchising strategically, right, where they're appropriate.

He's able to get himself out of that. And now he's enjoying it well before, you know, the past on the next generation. So, great example.

So I talked about this before, Maslow's hierarchy of needs, just as a human, we need these basic essentials, right, we need shelter, food, water, right, and then we move up in the triangle into things like purpose, connection, important things like that.

I think of the Maslow's hierarchy of needs when it comes to finance, and I think of IVC as one of those foundational months on the first level.

And I'm going to call it my warehouse, right, our warehouse of where we store our dollars and those dollars are always growing.

They are not at risk. There are guarantees and we get multiple purposes of those dollars.

That's a pretty good thing. And oh, by the way, if I need to finance a car, a kid going to school, I want to do some investments.

I want to do a vacation. I want to do passive income. Whatever those things are, I'm not actually taking my dollars from my warehouse.

That's so important for people to understand. I'm using my warehouse of cash as collateral to then finance these things.

I'm actually using the life insurance company's money, right?

And I'm using my policy as collateral, which means if you have a chart, it's just continuing to go up because we never touched it.

That piece right there is the most important in my view, the most important piece to understand about why Nelson landed on specially designed whole life insurance is because we're not taking from that asset.

We're not having to sell off assets like we do with stocks or other things, okay?

So with that as a foundation, now let's get our thinking into scenarios, whether they are just examples hypothetical examples or examples from clients.

All this to mountain, we could talk about them in detail. So one example in the book that Nelson shows is actually using cash values from your policy to supplement your passive income.

Another example might be using your IBC system to build real estate, okay, real estate investor.

Another one might be a business owner who uses their IBC system to finance their business, maybe even self finance the sale of the business or portions to somebody else or just building up the business where it provides that income for them going forward.

And then income stacking is another option, right? So in those cases, you guys pick one, we can unpack it a little bit.

In those cases, we're using our IBC system as collateral to do those things, right?

So Mike Crawford, I'm going to ask you, you didn't know about IBC back when you were a business owner at the shop.

Had you been, had you had IBC back then?

Can you imagine ways you would have used IBC both just to function the business, but then also going forward in a career if you maintain that business going forward?

Yeah, you know, I owned a lot of repair shop for handful of years and we definitely could have benefited from the liquid asset that was, there it is, infinite banking.

You know, after the oh eight market crash, we have just opened our second location.

And so money was not only like tight because of, you know, this huge investment to start to open up a brand new building. I mean, we built it from scratch, but also, you know, the economy shifted dramatically almost overnight, right?

You know, people lost money in their retirement accounts. We, you know, businesses shuttered.

There was just a massive shake up, you know, it caused a ripple. And funny thing is is that when, when money gets tight, the last thing you want to put it into is your car.

Even though, you know, we definitely in our country need our car to get around a lot, but all that to be said, I think at that time, we could have potentially had we had established capitalized couple of big policies.

On the business or through the business for me and my business partner, we could have definitely capitalized on or not capitalized, but use that as money to inject into the business to keep us moving.

But then made those policy payments back to ourselves versus the banks that we borrowed money from to to continue doing that type of work.

We funded the whole building now, you know, that that would have taken years and maybe generational transfer of wealth from, you know, previous generations, which definitely could have been something that we aimed for in the transition down the road.

Had we decided to sell off the business or one of us passed away and that lump sum went back to the business to inject cash and capital into it.

That could have definitely worked, you know, so yeah, I mean, I think about that all the time. I mean, heck, I even think about, you know, how I used, you know, IBC for real estate for the property that we own into Mexico.

It's, you know, it was, it was a simple decision to use down like money from our policy as a down payment.

I wasn't going to buy the whole building or the whole, excuse me, the condo with cash money, but putting money out of my policy as a down payment.

I didn't have to borrow from the bank for that part. I was able to put a larger amount down that knocked us out of the PMI that kept that kept everything like on the level.

And now we had instant equity in the system. We paid ourselves back within about eight months into our policy loan that we had borrowed.

That's what we're money ahead at the end of the day. Absolutely.

You're using that cash value loan function to pay more rapidly pay off the conventional part of the world.

Absolutely. We hope to do it within the next two years actually.

So,

back on your automotive shop. Yeah, I'm fast forwarding.

Because you were quite a bit younger than your business partner.

I could imagine a time when you might have wanted to buy out your business partners.

Yes, that was originally the goal, you know, you know, the stress and the things that occurred during the fallout from the market crash and all that stuff.

We we didn't end up selling until 2015, but I think we were both burnt out at that point.

But the goal was to actually our goal was to open a total of four businesses before he retired.

And then that would be the buyout would be his retirement is what the hope was at that time.

And all that to be said, you know, whether or not it didn't work out the way we hope, you know, I mean, that's just life.

But absolutely, IBC would have been a very valuable aspect to all of this.

Yeah, we had it.

Could you use the IBC to expand the business to make purchases by our partners?

Yep.

I mean, all those things can be a way that business owners think about IBC is it is again, it is that warehouse of wealth from which you can then leverage for all these other things.

That's not your creativity.

Yeah, you kind of helped a segue with a little bit with your condo right into the real estate.

And quang you you and pay have had some you you dug into real estate a time or two, right?

Yeah.

How paint a picture of how would someone interested in passive income for their future use IBC in conjunction with real estate investing?

Okay, well, great.

So typically, right, when when you think of real estate and invest in the real estate, you need to bank, right, you need to go to the bank and supply all this, you know, documentation apply for it through your credit, get a loan or a mortgage, you know.

And then you're often running essentially, right.

Well, the easy answer with IBC is that bank could be your own right through the policies cash value loan function.

And you're still leveraging, you know, you're doing all the things.

But when you have a policy, you know, as the backstop as your source of guaranteed leverageable capital that no credit score required to have to grow every year, that's a game.

Right, because a lot of times, you know, you're going to be extended X amount of credit and you might be able to buy so many properties, maybe, you know, but then you're kind of topped out.

And you're having the one policy or a system of policies that's never going to be a problem, right.

So you can continue on that cycle of using.

Yeah, the interest isn't going to Wells Fargo or country wide or whoever the mortgage is.

It comes back to the insurance company who we're the part owners of, right as mutual ones.

So there's a lot of vested interest in, you know, having your own bank capital to again, if you want to do investing in real estate, go crazy.

You're not crazy, but right.

The policies have that money come back, right.

The financing costs because we always go, what's the most important?

What's the most expensive, you know, aspect of real estate, right? Is it the roof? Is it the, is it the realtor fees?

No, is it the taxes even? No, it's often the interest. It's the financing.

The financing is the most expensive. When you look at that mortgage payment every month, how much of that is going to interest?

Right. So again, when you have a policy, not only can you self-finance and come up with that cash or the down payment, like Crawford explained, but over time and in a short time, you can even pay off that remaining balance of the mortgage that eventually have.

So, yeah, it's pretty cool.

It's amazing. I've talked to, you know, several people that, you know, are realtors or that do real estate investing.

And I've explained to them with real numbers, the speed at which IBC can actually help you become a more efficient real estate investor.

And the number of people who look at me like I just told them something in a foreign language is insane.

And I'm not, it's just that's how I'm ingratiated. We are with the system that we understand, right?

The, you go to the bank, you borrow this money, you do it this way, you pay it off in 15 or 30 years, you know, all these like traditional methodologies.

And it just, to use an effort thing, it just seems too good to be true. It just, it is really tough at times for people to see the force for the trees and that type of an example.

So, and I would imagine that if we lined up 100 real estate investors in front of us and we did a quick quiz and we asked them, tell us what OPM stands for.

What percentage do you think would be able to answer OPM and why it's important to use other people's money for their real estate investments, pretty high percentage.

I mean, real estate investors get that. And yet, with IBC, we're using OPM. We're using other people's money.

We're not touching our warehouse. We're just using it as collateral, right?

And how many real estate investors would say, oh, you can use the equity and one property to finance another one all the time.

That's what we're doing. That's exactly what we're doing. Plus, there's a death benefit attached to it for good measure.

I love this phrase. And then I want to transfer, give you a heads up. I want to transfer it into how IBC can be used in conjunction with the income stacking model for passive income.

I love this phrase. IBC creates a lifetime line of credit backed by a compounding asset.

It creates a lifetime line of credit that is backed by a compounding asset.

Isn't that beautiful? I would say what an nerd I am. Yeah, an increasing line of credit.

An increasing, ever increasing line of credit backed by a compounding asset. I mean, it's just beautiful.

Okay, Professor Kwong. So we've talked about, okay, you can take loans against your policy to supplement your passive income.

You can use IBC, a system of IBC to use your business to create passive income, whether that's income from the business itself or selling out portions of the business to someone else.

That's an option as well. You can use IBC in conjunction with real estate investing, but and we've talked a little bit about this another podcast, but income stacking now.

How, how can IBC used with income stacking to create passive income for the future?

Great. So just, you know, as a, as a primer for what income stacking is for folks that don't know, simply that when you have access to a leverageable line of credit, a simple interest revolving line of credit.

Okay, and most comes to mind, you know, for most it's a, it's a personal line of credit or a he lock, right, simple interest.

And then with some cash flow contribution every month, you borrow an X amount of money, okay, and then you deploy it into a three year note or, or some investment that pays back over 36 months, okay.

Now, once you borrow that amount, say it's $10,000 with your, you know, contribution and the new income for the next 30 month of then.

Essentially, you pay off that original leverage in four or five months, let's call it, okay.

You paint it off and then you just redeploy, you borrow it again and you send it out for a second 36 month income stream.

And quickly, you know, over so many months, you start to build stacks of passive income streams that are 36 months or three years long apiece.

Okay, so that's just generally how that works and you're forcing that yield because you're paying off every borrow for each of those stacks within short months while they're earning, okay, amortized by the way I forgot to mention amortized income for the 36 months.

So that skew is tremendous. Again, in my book, I talk about not just interest rates, you don't need a pair, you know, the rates to be at parity, you can even do this at a negative skew where the interest borrowed is much higher than the interest earn, but because it's simple interest and the compounded, you'll come out ahead.

So that's income stacking, but with IBC now imagine, hey, I have my own bank again, where I can leverage from it instead of paying 8 10% for, you know, to the Wells Fargo right and having all that interest leave your system in control, you can pay four to 6% maybe through your policy loans and that interest comes back.

Hey, our mutual insurance company, so there's that to it that really super charges things because now you have a secured and again, not just lower interest, you know, source of leverage, but ever increasing, whereas, you know, that bank line of credit, you're topped out at a certain amount and then as your stacks continue to compound and they'll grow and you'll need more and more leverage that you wouldn't have otherwise if you feel commercially and you don't have this.

This is the set up for yourself. So one of the things that I really find beneficial with income stacking because we talked about real estate, real estate has a higher entry point, right.

I mean, if you're looking to finance a property, you're going to have to have some some capital, right, that you've built up over time.

And one of the nice things about income stacking is that it has a lower entry point and you can get started with with quite a bit less and you can start building now you could grow into real estate if you chose to right or you could just keep going with with income stacking.

You have choices and flexibility as Mike Kwong has said this whole thing is it's not a tightrope right it's a path you can wander a little bit and try some different things you don't have to get it just dialed in perfectly.

But yeah, that entry point for income stacking I think is is a very favorable trade for people who are wanting to build that passive income.

Can you now take it to the end game because people always want to know how do I get passive income. So if you do income stacking am I pocketing that money right away.

Oh, tea and you got.

Yeah, good question. No, you're not right. You have to pump prime the pump as I call it and it's the same thing with high policies for those first three, four years.

We're priming the pump like a farm pump in the you know on the on the orange you're kind of given that the three or four good wax to get that back pressure going once it hits your five right with our policies.

A lot of times you'll see positive back pressure where you can just stop and that it's already flowing and growing every dollar ends more than it all around.

Similarly with income stacking for the first couple of you know maybe years right but certainly iterations.

We take that monthly income from each of those stacks and it goes right back to pay off that original borrow.

Let's be clear. We're not enjoying it from the get go and even for the first, you know, couple of stacks. Certainly we're re deploying that money to pay off the borrow to redeploy again.

So you have to go back and so you have to go and grow but it's certainly done when you're when you're disciplined on it and again you're also injecting your own contribution.

Okay, a cash flow, but that is essentially what starts it off and as it gets bigger and bigger and faster.

You can start like you said the end game and it could be you know zero your five or seven but for a lot of folks.

You're you're able to spend off that flow maybe it's 50,000 a month that's coming in at that point.

You can certainly spend you know 20 you know 15% of that.

We're talking up to 10,000 a month that you could be enjoying and the rest for members continuing to flow forward.

But yeah, so it does take time, but we're talking to a couple years as opposed to 40 years to retirement right and going back to the real estate analogy.

You know that priming the pump period for real estate is you're using the rent oftentimes to cover your mortgage right when it really gets good is when the mortgage gets paid.

And then that rent is just coming to you 100% right that's right.

So within comes stacking it's a much shorter time frame that we're talking about really cranky that you know that build up.

Okay, so we have done we've talked about how IBC is the warehouse of wealth and it is that ever increasing line of credit.

That is backed by collapse it's collateralized by a compounding asset, which is amazing for all these things so I can use it for real estate.

I can use it for income stacking I can use it for business and all of those with if your strategic can provide that passive income in life and we have clients that are doing that.

Clients that are in their 30s or 30s and early 40s that their work is their choice right they're doing it because they want to because they have purpose but not because they need the income.

And it's because they've gotten very smart about how to use their IBC to build passive income in their life.

Okay, what have we missed that we need to touch on before we we tie a bow on this good.

I think go ahead I think again you know what's important and often overlook people obsessed about the numbers but think about what you're doing you know the philosophy like you.

What do we offer said about retirement how do we think about that into the future right what do we want to be doing that just what do I want to stop doing.

I think I think IBC allows us to really be creative and start thinking what else what else can I do you know in addition to that when I we know of the hours maybe or I can shift all together when you have that financial leverage or or you know means essentially right to to make those choices.

That's super exciting and motivating because you want to stay motivated and engage along the way because we're building this up from the you know every year.

I like the idea that it's not about retiring from work it's it's more about retiring from financial stress right it's like I'm going to be done with that because I have control.

I have access I have liquidity I have compounding I have collateral yeah those all pieces having that control of the banking function is no since said.

The problem is retirement it's not having control of your banking system that is it's kind of like going to the doctor right are we treating the symptoms or we are we treating the root cause yeah.

Wilson would say is the root cause of our financial stress is that we are not controlling the banking function yep.

All right gentlemen great conversation thank you for that to our listeners if you would like to learn more about any of these topics or engage with the community we invite you to our website at life success legacy.com you can jump on you can register for a webinar.

You can register for a boot camp we recommend you read Nelson's book at least the fit first 50 pages join us for a webinar once you've done those we then do the deep dive it's about two three hours long of the boot camp we have a live event coming up April 10th and 11th in Houston and we would love to see all of you there we will take good care of you you will have a wonderful time you'll learn a lot meet some amazing people as well.

And join us again for our next episode of the life success legacy podcast thanks everybody thanks gentlemen thank you awesome.