Infinite Banking and Passive Income Strategies

I have a high yield savings account with a little bit in it, but my lion's share of my 400,000 emergency fund is sitting inside my life insurance because I can get to it in about a week and I can get that access to that money at any time.

And so I actually have people move a lot of their emergency funds into there first.

Don't even invest with it in the beginning.

Then after it's already self funding by the third year or whatever.

Because if you throw in say 10,000 a year, it's growing by at least 10,000 a year.

You can invest all that money right off the bat.

They don't even worry about the fees because there's no net cost because now the dividends of the policy is paying for the cost of the premiums coming out.

Right.

And the insurance.

So now it's like free insurance at that point.

Welcome to Truly Passive Income.

I'm Neal Henderson.

And I'm Clint Harris.

And today Chris Miles joins us.

Chris is the founder of Money Ripples.

He's the host of Money Ripples podcast and author of Work Optional Blueprint.

He calls himself an anti financial advisor because he pushes back on the set and forget model and, and focuses on creating cash flow now.

He also retired twice before 40, including digging out of a $1 million debt hole after the last recession.

Chris, we were excited to have you here and to dig into all this.

How are you, sir?

I'm doing well.

I'm excited to be here too.

Appreciate that intro.

It makes me sound like I'm an awesome loser, which I love.

No, you know what I think is, I think that it's, it's candor, it's straight shooting.

And this is how we all get better is just by, by being open and honest.

And obviously you've had a lot of success since then.

I think it makes people pay more attention to the success and value your story because you're willing to be vulnerable and self deprecating and to, to a degree.

And I, I love that.

So thanks for your honesty.

Yeah.

And I'd rather take advice from people who got some scars, so.

Yeah, exactly.

And some wrinkles.

You know, me too.

That's right.

Neil's got a lot of advice to give.

I've got scars.

Wrinkles.

There we go.

Yeah.

Listen, Chris, for those that don't know about you, give us a little bit about your background and, and everything that led you here.

Yeah.

So obviously not the way I intended.

I was talking to somebody earlier today at breakfast and, and talking about how I was a Sociology major, because I was intending to go into that field and even move into business consulting.

But I figured if I'm going to do business consulting, I should have real life business experience.

So I was trying to find some business to start.

And so I can get more experience than beyond just an mba, right?

And the first business that came up that was intriguing to me was being a financial advisor.

Because I thought, worst case scenario, not only do I learn about business, but I learned about money and investing.

So that's the place to go, become a financial advisor.

So I did it, not knowing they'd take anybody off the street.

As long as you could pass a test with 70% and not be a criminal, you can basically become financial advisor, you know, no previous experience needed.

And so that's what I did.

I actually loved being an entrepreneur so much I never finished my degree in college.

And I went down that path and I was doing that for four years, drinking the Kool Aid, you know, telling everybody to set it and forget it, as you just said in the intro, right?

And telling people that, you know, you should be diversified, which is, means mutual funds only.

So kind of an ironic statement when you think about it.

And I was, I was, I was doing it, I was drinking the Kool Aid, living it myself, and I thought, this is the path to freedom.

Well, four years in, my dad reaches out to me and says, well, Chris, when are you going to advise me?

At some point now, my dad at the time was 61 years old.

The guy had already had heart attacks and strokes, you know, and had lots of stress in his job.

He was ready to be done.

He was also the penny pinching saver.

So he was the guy that was the post depression era mentality.

You never throw anything away.

And trust me, we just went through his estate recently.

He did not throw anything away.

This guy was all about saving.

He was like the guy that Dave Ramsey says, I want to be like Ron Miles when I grow up.

That's kind of what it was like, right?

Well, I sit down with him, I look at his finances for the first time, and I noticed that he's debt free.

Even when his house was paid off free and clear, he had stuffed money in his 401k, got that good old company match like every good boy should.

And yet at the end of it, I had to say, well, Dad, I mean, if you try to retire right now, you basically have enough money to last you five or six years and then you'll have to die.

He's like, all right, well, thank you Mr. Sunshine.

That's not exactly what I wanted to hear.

What do I do?

I don't know.

Save more, work longer.

That's all I can say.

You know, I'm like, you got this paid off house, but you can't put that in the stock market.

That's illegal.

So I don't know.

I don't know what to do.

And that's kind of where I left it.

And it really discouraged me to the point where just a month later, I call up a friend of mine that I had trained to be a financial advisor, but then he left to go do this stupid thing called real estate investing.

You might have heard of it.

And so he goes do this real estate investing thing, and I'm asking him how things are going.

He's like, man, my life is awesome right now.

My dad and I have partnered on some real estate deals.

We've now doubled his income as a professor at the local university.

I said, hold on a second.

You've only been doing this for, like, what, five months?

And you're saying your dad is already at the point where he could retire right now?

It's like, yeah, like, bull.

Come on, That's.

No way.

That's too good to be true.

That's.

That's impossible.

That doesn't fit my little financial advisor brain and my narrative, right?

And it's.

It's kind of like, liar, liar.

You know?

He's like, objection.

He's like, based on what grounds?

It destroys my case.

You know, that's pretty much what it's like for me, right?

It's destroying my case here.

And.

And he finally stops me.

He's like, chris, listen, how many of your clients are truly financially free where they don't worry about money?

None.

I don't know.

Yeah, none.

Because they all worry about money.

Even if they are retired, they still worry about outliving their money.

Okay, Kris, how about this?

How many of you guys, as financial advisors, are financially free, not off the commissions you're earning, but actually doing the investments you've been recommending?

They don't seem like they can quit anytime soon.

So I don't know, maybe none.

There's your problem, Chris.

And so I started taking the little matrix red pill for real estate investing and started going down that rabbit hole, realizing that all the stuff I was teaching as a financial advisor was BS Cause obviously the proof was in the pudding, it wasn't working.

And it wasn't just because of me, you know, it wasn't.

Cause I was a bad advisor.

I would inherit, you know, decades of people.

People had been investing for decades with other advisors that I inherit them as clients.

And they still weren't any closer either.

And so the Tony Robbins says success leaves clues.

Well, it's also true that failure leaves clues.

I'm out.

I gotta keep my integrity intact rather than worrying about my own pocketbook.

I gotta get out of this profession.

And so I quit.

That would never teach about money again.

I was just gonna teach ballroom dancing on the side and be a mortgage broker.

Like 20, 21 mortgage brokers.

So that's right.

Stated income, nothing down, you know, it was awesome.

So I was doing that.

But obviously I was starting to learn about all these things.

Like it wasn't just about the fix and flips.

I mean, I was learning about that too.

And I even did my own version of wholesaling, you know, kind of a on off to the side.

But I.

The thing that really got me was the fact that I could become the bank.

That I could literally lend my money to investors and get paid on like hard money loans and things like that, and get paid income versus just accumulating money to then hoard it like a squirrel and hope that you don't outlive that winter of retirement right now.

I was like, no, I can actually get instant cash flow.

And so when I started to do that kind of stuff later that next year when I'm 28, almost 29 years old, I was able to retire that first time.

And that blew my mind.

It was even possible that I could literally have income coming in from my investments.

Whether I'm doing hard money lending, you know, rental property, I turn my start home into a rental and things like that.

It was, it was kind of mind blowing because it was all based on income.

It was about passive income, just like Kiyosaki had taught and I'd read in the book several times.

But then it finally like clicked, you know, it wasn't just about accumulating money and trying to live off this nest egg.

So.

So naturally, because I did it, you know, some of my friends and family are like, well, how'd you do it?

I mean, the next thing I know, like I'm now a million dollars in debt and I'm no longer financially independent.

Like I'm on food stamps and everything trying to take care of my, my young family I had at the time.

And, and eventually I was able to dig out that hole.

Eventually I pivoted my business to teach about how to find money versus just get out of the rat race because I was back in it.

I can't teach them, I don't do.

So I started doing that instead.

And next thing I know, the business started to blow up again and, and I was able to dig out of that hole.

I even launched Money Ripples during that time.

I could say, here I am again, I'm work optional.

I have enough passive income coming in that I work because I want to, not because I have to.

And when I talk about passive income, because this is the truly passive income show, I mean truly passive income in the sense that I'm a hands off investor, I'm not actively investing, I let other people be the operator.

Right.

That being said, as we all know, there's still stewardship involved.

So it's not like you just said it and forget it and you turn your brain off, it's brain on investing.

But you don't have to be the one doing all the work.

So there you go, a lot to unpack right there.

Yeah, yeah.

One of the, the things that I always key in on when we have conversations like this is that it's a mindset shift between sort of the nest egg approach to retirement planning versus the income approach.

It's like, you know, you've got either the option of all right, I'm going to build a nest egg, it's going to grow to, you know, 25 times the annual income that I'm going to need to survive on in retirement.

And at some point I'm going to turn on that spigot and I'm going to start spending on it and, and draw it down, but hopefully, you know, you know, die with zero.

I'm going to die on the day that I spend My last penny.

If I'm absolutely, you know, if I just plan absolutely perfectly or you build up enough assets that are producing enough cash flow that you live off of.

And ideally, in a perfect world, you never touch the principle at all.

In a perfect world, obviously, you know, I mean, there's, there's, there's different, you know, different levers you can turn.

And what I like that you just said, and it's one of the options that I love so much about this approach, is that there becomes a point where you become work optional.

You don't have to, it doesn't have to be this like, you know, date where you say, hey, today I'm financially free and I no longer need to work.

And it's kind of the, it's kind of where I got to.

I, I always tell people because, you know, I'll go on podcasts sometimes and they, the host will introduce me as financially independent.

I'm like, whoa, I am not financially independent.

I got, I built up enough income, passive income, and it was not completely passive, not truly passive, that I got to a point where I was able to kind of take a leap and make a change of career.

And that's one of the things I love so much about your approach, is that it creates optionality.

It doesn't, it's not about like full on retirement unless that's what you want, but it just, it's getting to the point where you have enough income coming in that it creates optionality.

That's exactly it.

Yeah, that's.

I mean, that's why I named my new book the Work Optional Blueprint.

Right.

Is, is I find that most people are kind of like me in a lot of ways.

Where, you know, because most people talk about retirement like, hey, this is where you can go, go sit on the front porch drinking lemonade.

But they, but they don't tell you is, of course, the reason you're sitting on your front porch drinking Country Time lemonade is because it was on sale at Costco and, and you're sitting on that front porch because you can't afford to go anywhere.

Right?

That's the traditional, you know, retirement model that you see in the financial advising world.

But it's true, like, most people do want to do something with their life.

They just want to do it on their own terms.

You know, give you an example.

I had a guy that reached out to us just a few months ago, and he was talking to me.

He's like, you know, I'm getting kind of frustrated because I just turned 59 and a half.

I've got almost $2 million sitting in my retirement accounts right now.

So this guy was like the Dave Ramsey poster child, right?

Like, he did it.

He did it all.

Paid off.

His house, you know, has lots of equity.

He even said he's like, I got $3 million net worth, but only 300amonth of passive income.

That's all I have.

And I.

He's like, I asked my financial advisor at Vanguard said, well, when can I actually retire?

I want to live on $200,000 a year.

He said, my advisor wouldn't give me an answer.

He's like, I don't know if he can't or he won't.

I'm not sure, but he wouldn't give me an answer.

I said, well, that's pretty easy, because having been behind that curtain, you know, I already know what's going on.

I'm like, it's possible he doesn't have the answer.

That's true.

If he does have the answer, he's probably too scared to tell you the answer.

You mentioned, like, 25 times somebody's income that's based on the old antiquated 4% rule, that.

Inflation has roared up higher, too.

And so the new rule, quote unquote, for the 60, you know, those in their 60s trying to retire is a 3% rule.

4% If you're in your 70s now, which is what Jamie Dimon said, right?

Oh, as a result, you know, if you think about 3% means you need 33 times.

So I told him, I said, well, if you want 200,000 a year, that means you need about 6.7 million in today's dollars.

But the problem is you've got $2 million, which, by the way, is an incredible feat.

I was like, don't.

You shouldn't be ashamed of this.

Because in truth, very, very small percentage of people even have $2 million saved up.

Which means if you have a million dollars, you live on 3%, that's 30,000 a year.

Which is also why when Transamerica polled these same people, Trans America found out that 35% polled said it'll, quote, take a miracle for me to re retire because they realized even with a million bucks is not enough.

So I told them, I said, you got $2 million.

3% Means you're living on 60,000 a year.

That's a third of what you want to live on, but definitely even, even less than what you need to live on, even though you're not a big spender just because of inflation alone and, and how it's been creeping up on us, living on 6,000amonth is nothing, right?

So I told him it's like, yeah, the reason he won't tell you the answer, if he even knows the answer, is because he's scared to tell you that you need to triple your money or more, really three and a half times your money in the next 10 years.

And you know what he said?

He said, he talked.

He said the same thing you said about optionality.

He said, he's like, you know, Chris, I don't mind working until I'm 70, so I just don't want to have to feel like I have to work until I'm 70.

And so I told him, I was like, well, let's reverse this mindset because you were taught this whole thing of living on 3%.

And yeah, it's pretty depressing because you have to hope and pray the market doesn't all of a sudden poop out on you.

Which, by the way, we've had the longest bull run in 17 years.

These last 17 years, we've had a bull run in the market that we have not seen in history.

This is probably the best you'll ever see in your lifetime.

And still about 2% of people in Fidelity have a million bucks or more, which is barely enough to live on.

Right?

That tells you something.

And so I told him, I said, well, what if you had that $2 million, but instead we invest it for income, for cash flow?

Like, for example, like, there's plenty of options out there that I know about, that we even have connections to.

They'll pay you at least 10% a year on your money.

So 10%.

What's 10% of your 2,200,000 a year?

Bingo.

What's your goal per year?

200,000.

Like, right?

So you're going from you hope and pray that by the time you're 11 years from now that you have enough to finally retire based on you know, whatever the market may or may not do, or you could probably do it this year, that's the difference.

And that's the biggest gap, you know, the real, the biggest, like you said, the mental gap between that accumulation theory, which doesn't work, and the reason they teach you this, by the way, is not for your benefit.

It's because really it's the institutions that they're really the, it's financial pharmaceuticals is what it is.

They're paid to sell you, to keep your money with them, to live on less than the interest, so that they continue to get paid a percentage of the money under assets, under management.

That's how they make their money.

So they don't want you to pull out more.

And of course, if the market does drop, if you pull out money and the market drops at the same time, you're disinvesting.

This is why Dave Ramsey is full of crap.

When he, when he says, in fact he even argued with one of his own co hosts, he actually contradicted his co host and said no.

In fact, the co host said 3% by the way, and Dave said no, you should be able to pull out 8% because if you make 12 in the market, which by the way, the market's never averaged 12 for long term, it's even right now.

It's 8.3 for the last 30 years with the 17 year bull run.

Right.

So it's 8.3 average.

He says 12.

He's like, you should be able to pull out 8% a year, leave a 4% buffer.

But, but I actually showed on my own podcast, said, hey look guys, if you have an 8% average return, you know, where it's two years up, one year down and average to be 8%, guess what, you run out of money in 15 years, you burn through all your cash because of that disinvesting.

That happens.

So all this stuff, this is the stuff that we're having to battle, especially in my end, every single day and have to unwind and untrain people.

That's the very crap that I was trained to teach too, to get them away from this stuff.

Yeah.

And that's a really tough time to figure out that you can't save your way to retirement when you're Almost there or 2/3 of the way there.

Right.

Like I believe that my grandparents generation, I, I say this a lot actually on this podcast and for those that listen, I apologize, I'm a broken record, but I think that my parents generation could save their way to retirement and that for my generation it largely has been taken away because as fast as you can put away those dollars, the value of those dollars is often being eroded out the back door called inflation, faster than you can put them away and compound them.

That was their plan.

Talked about it for several years leading up to that.

And when you have those paper assets and then that market corrects, all of a sudden so much was wiped off their balance sheet that they all found out that they had to work for another five years just to try to get back to where they were.

And for me that was a light bulb moment.

It's like, oh, a defensive strategy and hoping that you can earn enough that the value's gonna go up high enough and hope that the market is where it needs to be when you need to take that money out.

That's a very scary place to be.

And it made me realize that it's hard to practice defense and get ahead.

You kind of, especially my generation, you have to practice offense because of the cost of living, the cost of housing, the cost of everything else, the value of the dollar, the inability to save at a rapid enough rate when the value of the dollars going down associated with also the cost of living going up.

It's a really scary gamble to take.

That's a 40 year gamble that, and you only get to do it once.

So for me, that's why I believed in just like you.

I read the Purple Bible, Robert Kiyosaki and then got into it after that, single family homes and then Airbnbs and now Neil and I and our partners, we, we do self storage, we buy old Kmart buildings and we convert them into climate controlled self storage facilities because those are cash flowing assets that are inflation resistant, pandemic resistant, recession resistant.

Not proof, nothing is.

But that's the difference is we're trying to force appreciate through asset class conversion and, and convert to that cash flow mindset.

And I love that because then you're not, it gives you that optionality and you know, you're talking about financial independence.

And I replaced my income before and I did it the wrong way.

And after I did it, I realized that I had only focused on the financial component.

And really I needed a, I wanted a location independence component, I wanted a time independence component that wasn't part of that.

And I Kind of had to start back over.

But I love the way that you're doing this is that you're focusing on, on giving that money a different purpose to focus on cash flow in certain terms of, instead of just long term growth that honestly can kind of have the rug pulled out from underneath it, you're focusing on that cash flow.

And my understanding is that one of your ways that you're doing that is by giving $1 multiple jobs.

You're taking cash and you're, you're recycling that cash or you have the ability to use it a couple different times.

And that's why I think this would be a great time, I'd really love to, for you to tell us more about Money Ripples, the work optional blueprint and what your anti financial advisor thesis is and the way that you're now focused on, you know, you're creating that cash flow.

But how are you creating that cash flow?

How are you using leveraging those dollars to get the highest value cash flow that you can?

That's going to change the financial velocity of somebody's life now and not 10 or 15 or 20 years from now.

Yeah, exactly.

Kind of like my sciences back there, right?

Live your life now, not tomorrow, you know, and that's, and that's the biggest thing.

So we mentioned, you know, you mentioned alternatives.

You know, self storage is a great example.

You know, there are so many ways in the alternative space that a financial advisor will never tell you about.

And the reason they won't is because they are literally licensed to sell.

Not licensed to make you money, they're licensed to sell you mutual funds.

If they have a Series 6 and Series 63, they can sell you mutual funds and that's it.

If they get a Series 7, they can even do some stock investing with that.

Right.

But it's always based on the stock market.

But alternative investment wise, you really don't find financial advisors in that space that say yeah, you should do that even.

I was talking to somebody today and she was telling her parents about, you know, investing in like some short term rental partnerships and whatnot.

And, and, and they're like, hey, we can even do hard money lending and get paid 15% a year.

And they were excited about it.

You know who wasn't excited about it?

Their financial advisor who naturally said, I don't know.

I was like, well why?

Because he's going to get a pay cut.

Right.

So at Money Ripples, that's what we try to do is try to open up those options.

We're not investment advisors.

But we do work with people one on one to say, how can we create a little roadmap here?

How can we actually map it out and even potentially connect you with good deals of reputable people to say, hey, here's ways you can actually do this.

So again, we never investment advise.

We don't even get paid, you know, from the different people that we know of, of or invest with and things like that.

But definitely help them really strategize to say, how do we get away from this Wall street only mentality to something where alternative investments can actually generate real income.

You know, give you example.

I had a guy that was in California, he had a million bucks.

His retirement plan advisor says he can live on 30,000 a year, which he says not in California, you know, that's like homeless people live on 30,000 a year, you know, so he's like, I gotta do something else.

And so, you know, when we, he came to us, he found us on the Money Ripples podcast and whatnot.

And then as we're working with them, you know, he decided he was going to buy a couple of duplexes, you know, that were turnkey rentals where he wasn't managing the property.

He got some oil and gas, he got some syndications like what you guys do, right?

And he did some of that as well.

And after all was said and done, his million wasn't kicking off 30,000 a year anymore and now it's kicking off 130,000 a year.

Right?

And that's the big difference is how do you actually have somebody to help really map that out for you to see, see how that can actually become a real plan and it's through a real system.

You know, we have a whole five step process to teach people how to do that.

You mentioned about getting your money to pay you twice.

You know, another strategy we use within that, it's not required because we can get people financially independent without the strategy, but we want to throw a little extra fuel in the fire.

It's kind of like the, it's the Boy Scout campfire, right?

It's like, where's that little kerosene can we can spray on the fire to make it blow up a little bit more?

Now that we use like infinite banking as an example, but not the traditional infinite banking stuff you see out there, if you haven't heard about it.

Infinite banking is leveraging using the cash from your whole life insurance policies, right?

So you buy a whole life insurance policy and besides the death benefit, you can actually build up this tax free Savings account inside of it.

It's like a tax free high yield savings account paying about 6% a year, tax free right now, but it's also a hundred percent protected from lawsuits and creditors in most states.

So it's a great, safe, guaranteed place to store your money.

But from an offensive standpoint, beyond the defense, which is a great defensive strategy too for keeping my emergency fund there and things like that, from an offensive strategy, I can also use it to make money in two places at once.

Because if you design them the right way, which the.

That's one thing I had a hard time as an investor was every time I would try to find somebody who would help me lower the costs on these policies.

That's the biggest objection you have to these things.

Every time I'd say give me the lowest cost possible, they wouldn't give me the lowest cost because they didn't want to cut their commissions that much.

And then we borrow that money from them and yes, we pay them back.

You don't pay yourself back as they.

There's a lie out there that claims that you do, that you pay them back just like you would pay back a home home equity line of credit.

But the good news is there's no minimum monthly payment.

You pay it back however, whenever you want the deadline for paying back those loans or your death.

The reason that you don't have to pay back monthly is because although you're borrowing at a low interest rate from them, they're also paying you interest on that money too.

So literally, literally, like in many cases, it's already washing out the interest that you're paying them because they're paying you money on the money that you, you were borrowing from them.

They're paying you money because your money was never pulled out.

So they're still paying you compounding interest while you pay back simple interest.

And the thing that's beautiful is that if you use that specifically to invest, especially in cash flowing investments, what happens is that you take the cash flow from those investment, use it to pay back towards the line of Credit.

All of a sudden now the interest you get charged goes down, down, down, but the compounding interest goes up.

You create a net profit of the interest that you earn versus what you pay while you're also still making money in the investment.

So it's not about the either or type of standpoint where so many people say, hey, throw all your money in this life insurance.

No, we don't agree with that.

It doesn't mean you just throw all your money investment.

That's like, no, I can actually do both and actually pick up some extra interest dollars along the way.

So I would normally make 10%.

I might be able to now make about 11 or 12% net on my cash.

Just making it accelerate my, my path to freedom faster.

Yep, it's a whole nother bucket.

There's a scenario here that, and I use infinite banking, I'll say that first, but there's a scenario here.

It kind of reminds me, my wife and I also have a real estate team and she's a full time real estate broker.

And if you ever go to any real estate agent, you say, hey, do you deal with investment properties?

They're all going to say, oh yeah, absolutely, all the time.

And then oftentimes behind the scenes, they're going to another agent be like, hey, can you help me with this?

I don't know what I'm doing over here.

This is not what I do.

If you go to any life insurance agent and you start talking about infinite banking and you ask about it like, oh yeah, we can do that, we can structure it this way, we can structure it that way, that way.

What I have learned is that this is one of those things that you either do it or you don't do it.

You don't really dabble because the way that you set this up has to be very specific.

You want to do it in a way that the right commissions are stripped out, that you're putting riders in place that you, yes, there's a death benefit, but you, you have a lot of different structures and riders that you can put in place for long term health benefits or different things or access to capital, the different loan structure that if people say that they can take a life insurance policy and tweak it to kind of make it work in this, and it's more of like a Frankenstein policy.

That's not what you want.

What you want is somebody that specializes in this type of product that is very well structured the right way, from top to bottom, with very specific companies that offer the right type of product, that you can use for that or you shouldn't do it.

And it's one of those things that you don't dabble in this.

You either do it and you don't do it.

It took me several years of looking at it and reviewing it before I decided it was something that I wanted to incorporate.

Exactly.

For what you said, Chris, it's not an all in strategy.

It's just an extra bucket.

It's a bucket that you can place over here that yes, it has a death benefit, yes, it protects your family, but it's also capital that you have access to earlier that you can build up tax free or deferred depending on the situation.

But it's one of those things that it's really.

It's a veteran move.

This is a veteran move.

And if you're going to do it, you need to do it with a veteran that can give you the guidance and walk you through.

Because my imagination is getting the best of me here.

But I have a feeling there's a lot of people that do it the wrong way.

And I'm sure you probably have examples of that or have seen that a lot.

How, how often are you fixing things when people started out with a misstep?

All the time.

Yeah.

I mean, even in infinite banking, that's the problem is that there's a lot of people teaching infinite banking, even the real estate space, and they're easily charging double the fees you should be paying.

You know, in fact, just yesterday there's a guy, and again, these most.

These guys are all good people, I mean, friends with a lot of them.

But just yesterday one of the guys that's heavy in the real estate space reached out to me personally and said, listen, like I've got a client who's nickel and diming over these costs and fees and, and I know you work with a specific company that I'm not that familiar with.

Can you run numbers for me with that company?

And so I did.

And it came back, he's like, how are you getting numbers like this?

Now understand this guy is working with a lot of centers influence in the real estate space and he doesn't think it was possible that you can get as good at numbers as I was getting.

He's like, how are you getting these numbers?

There's gotta be something you're doing wrong, Mike.

I'm not.

It's just I've spent the last 20 years perfecting this to the point and, and I just don't give a.

Because I'm already financially independent.

I don't give a crap about the commissions, which unfortunately, most infinite bankers, quote unquote, or any insurance salesman for that matter, they do rely on those commissions.

And so they're not.

Even if they do the very.

The less than 1% and even know how to do this, even that 1% often won't do it because they don't want to cut their commissions back that much.

And so that's the hard part is I get so many people are like, oh, I've already got an infinite banking policy.

They're like, hey, would you review it, Chris, to see what it's like?

I'm like, sure.

I was like, it might be good, it might not be.

And I'll tell you, over 99% of the time, it's like for almost pretty much a hundred percent of the time, I'll say, this could have been done better.

Now, does that mean we change things?

Maybe not, because maybe you're already deep into it and it doesn't matter at this point.

But, but every time, I mean, every single time.

That's one thing I keep running into, is that I've never once seen somebody who beat our numbers legitimately, you know, and how we do it.

And that's not to brag, that's just to let you know that, you know, just because somebody's on social media and talking it up and sounds like they know what they're doing doesn't mean that they are doing it either.

Either they know what they're doing, or they're even giving you the best, like, lowest cost possible so you can maximize your roi.

And that's why we even trademarked the phrase max ROI infinite banking, because there's just, there's just too many infinite banking people out there that are kind of screwing people over a little bit.

All right, so I'm the only one in this conversation that has not utilized infinite banking yet.

And I want to give something for our listeners to kind of take away, which is walk me through a typical use case scenario.

If someone comes to you and says, all right, I've got, let's say, $50,000 that I want to put to work and infinite banking, what does that process, what is the setup cost process look like, and what's their typical use case?

Yeah, it's if somebody just wants to put a lump sum in, I usually recommend against it.

So let's just go with that $50,000 example, right?

Someone's like, Hey, I got 50,000 bucks I could throw somewhere.

Should I just throw it in at 1.

One lump sum?

You could but remember, the more you throw in, the, the bigger the policy has to be.

And this is why with life insurance, the reason it's tax free is because the US government and the IRS has allowed it, right?

For many, many years.

It's been over a hundred years, it's been tax free.

Even though they threatened to get rid of the tax free status, they won't because too many politicians also have the same strategy for themselves.

Right.

But what's happening though is that the bigger the death benefit, the more money you can stuff in.

And so if somebody says, hey, I was talking to this guy, he says I can throw in 50 grand into this thing and then I'll pay like maybe 10,000 a year thereafter.

Cool, you could do that, but your ROI is going to drop because those costs are going to be higher because for that 50,000 to go in, you have to allow X amount of dollars of death benefit, you know, going to be a part of that.

So what I do instead is I might say, cool, we could throw in 50,000.

Or what we could do is maybe we do 10,000 a year or 20,000 a year as a max contribution.

Right.

So the way I set up is different.

Most people set up a life insurance policy, they say this is what you have to pay every year.

If you don't pay it, you lose the policy.

But remember I mentioned that whole life can be designed, you can pull different levers to where more of your money goes to that tax free savings account.

So when I set up a policy, say that the max is $10,000 a year.

The minimum depending on your age might be two or $3,000 a year.

That's the minimum you're actually required to put in.

But you're allowed to contribute up to that 10 grand.

Same thing.

If you want to put, throw in 50, up to $50,000 a year of contribution, the minimum might be 10, 10, 12, maybe if you're older, $15,000 a year.

Right.

So I always reverse engineer it.

Rather than worrying about what the death benefit is, people want, I just ask them what's the max you want to be able to contribute each year.

Right.

The nice thing is unlike 401ks where you're capped with life insurance, you can pay in up to 25% of your stated gross annual income.

So you know we're kind of joking about stated income mortgages, right?

Well, you can actually state your income on life insurance applications.

They don't verify it unless of course they think you're fully on BS because you say you work as a Part time assistant, but you're making a $2 million a year, they're going to call bull, right?

But if you say I'm a business owner, real estate investor, and he's like, hey, I make $1 million a year, cool, they'll let you put in a quarter million dollars a year, right?

That's one thing that's really awesome.

And again, like I said, in most states it's 100% shelter from, from lawsuits accreditor.

You cannot get that anywhere else.

So long story short, you know, yes, I can throw my money in, you know, and, and I can immediately pull it back out to use.

And that's true.

Let's use that 10,000 a year example.

If you throw in 10,000 in our policies, you will probably have at least seven or eight thousand dollars in cash upfront.

There's always upfront fees.

Whole life insurance is different than term.

Term gets more expensive as you get older.

Whole life gets cheaper.

Whole life actually starts out more expensive up front.

Which is why guys like Dave Ramsey poo poo all over it.

And he's right to.

It's expensive upfront, but then gets cheaper over time.

So most.

And a typical policy and give you an example, we'll take away the, erase the 10,000 for a second.

I had somebody that, another agent that came to me saying hey listen, I know you use this company, this woman sent me this policy.

She's putting in 60,000 a year as a neurosurgeon, right?

She's putting in $60,000 a year.

Can you analyze it for me?

And year one she puts in $60,000.

Guess what?

All of it, like any normal whole life policy, all of it goes to pay for the insurance costs.

Year two, she pays in $60,000.

Guess what?

All of it goes to pay for the insurance cost.

This means there's zero in that tax free savings account.

All of it's paying for the insurance upfront.

Year three, she puts in another $60,000.

She's now paid $180,000.

Now half of it goes to the cash.

Now she has $30,000 in there, right?

And then finally by about the fifth year, she's putting in 60,000.

It's growing by 60,000 or more.

And I showed him, I said, here's the difference.

I'm like, see how she paid in 180,000?

She has 30,000 bucks.

Watch mine.

Year one she puts.

And by the way, this is the same exact insurance company as the one that she is already using.

But I was using how we do it.

Year one, she puts in $60,000.

She's got 50,000 in that tax free account, meaning only 10,000 comes out in cost, not all 60.

Year two, she puts the money in, it goes from 50 to $108,000, right?

So even though she's paid 120,000, she's got 108,000 in there.

Most of it's all in that cash account.

By year three, it's now paying for itself.

Year five, she has more than what she paid in.

So she, she paid in 300,000.

She has like 311,000 by year five.

That's the difference.

Right?

Again, same company.

So you mentioned you have to have the right company.

That's true.

But it's the same company, right?

It's all about how you lower those costs.

And the great thing is she's not required to pay 60,000 a year.

Her minimum was like 11,000 a year.

You know, so if she need, she ever has a situation where she can't pay her premiums.

Good news is if you have at least 11,000 bucks, you just pull it out of that account and put it back in.

It's almost like pulling from savings to put it back into savings.

So the likelihood of it losing goes down.

Now here's the cool part.

Because she has cash in there from day one, can she use it?

The answer is yes.

She can literally access 95% of whatever cash is in there at any time.

So rather than waiting till that third year to finally access, you know, 27 grand or whatever, now she's got like, you know, year one, she's got 45 grand or so that she can access right off the bat from day one.

So it just gives you access to more cash.

This is why I have people now, the strategy.

I'm not having people invest with it right away.

I'm telling people, just take your emergency fund and start diversifying it.

You know, just like when people move from a crappy bank Savings account earning 0.8% into a high yield savings account, do the same thing.

You know, I, in fact, I have a bank savings account because if I want money today, I'll keep money there.

I have a high yield savings account with a little bit in it.

But my lion's share of my 400,000 emergency fund is sitting inside my life insurance because I can get to it in about a week and I can get that access to that money at any time.

And so I actually have people move a lot of their emergency funds into there first.

Don't even invest with it in the Beginning then after, it's already self funding by the third year or whatever.

Because if you throw in say 10,000 a year, it's growing by at least 10,000 a year.

You can invest all that money right off the bat.

They don't even worry about the fees because there's no net cost.

Because now the dividends of the policy is paying for the cost of the premiums coming out.

Right.

And the insurance.

So now it's like free insurance at that point.

So it's very kind of specific that way.

But I tell people like, you know what, don't even use it all the time.

Don't use like a bill pay account.

Like some people will talk about infinite banking where you try to pay everything with it.

That's bs.

That's just somebody trying to sell you more insurance so that they get paid more.

Like I just, I always design it based on what their cash flow is.

Like if they're putting away 20,000 a year into their bank savings account, cool.

Maybe we set the max on a policy at 15 or 18,000 a year, but they're only required to put in like 3,000 or 4,000 a year, you know, so it creates a lot more flexibility and utility that you can use that way.

And it just works in coordination with becoming an emergency fund and also can become a funding source for your deals.

And then of course, using that to fund inside those deals and then pay back with the cash flow and rotating that money, just flowing it through back and forth just like you would a savings account or checking account.

But now you're actually picking up more interest dollars than you would using a bank.

Yep, it's one of those things.

Again, I stand with.

That was a very long answer to a very easy example you asked for.

It was a thorough example and that's what it leads right into.

What I'm about to say is what I said earlier.

You don't have to understand all this right away.

This is a who, not how situation.

You don't need to know how to do all these things.

You just need to know who you've got that can explain it to you in a way that you can metabolize the information.

Because it's a veteran move and it takes some time.

Now listen, for the sake of your time and the listeners, we do have to wrap it up here.

This is a great conversation.

I had to listen to this concept several times over a period of years before I started implementing it.

And there was a light bulb moment and it clicked for me.

And I'm sure that you see that light bulb?

Come on.

With a lot of people that you educate.

But before we go ahead and wrap things up here, I do want to ask the last question that we ask all of our guests.

I hope it's.

It's something affiliated with this topic, but it doesn't have to be.

Is there a book or an educational resource that you find yourself recommending to friends, family, or people that you're working with more than any other?

I mean, I'm gonna bypass Rich dad, Poor dad, because I imagine almost every guest brings up that book.

Right.

I do believe that is a must read.

If I were to go, probably go with another one, you know, one I actually do like, even though I hated it in the beginning, was I just about called it a different.

By a different name here.

The richest man in Babylon.

That's old.

That's old school.

Yeah.

Even though it's in story format and it's very old school, and language wise, it's kind of difficult to understand.

But I'll tell you, that book has got such good truths from everything from what I just talked about with.

Make sure you have the cash reserve on the side, which is really your defense, but also having your investments work for you on the offense side, too.

And, and really, it is timeless.

They teach really good principles.

In fact, if you adhere to it, you would actually say, you know what, most of the financial education, the gurus out there are giving me BS because you listen to Dave Ramsey, like, he's not teaching by those principles.

He'll.

He might take one or two of them he'll kind of cherry pick, but he, he'll bypass a lot of them now, which, by the way, Dave Ramsey, I mean, if you're listening to him, I mean, good guy, but, but if you're going to do something, do what he did, right?

Which he actually invested in his business first and foremost, made profit there, and then put it into real estate.

He did not make his wealth putting any mutual funds like he's always recommending.

So again, when I look for things, even when I look for other education sources like podcasts or whatever, I look for those people that actually are walking the walk that they're talking about, Right.

They're not just talking it, but they're walking that walk.

And, and they're aligned with what they teach.

And so that's why I'm, I know you guys are all about that.

It's like truth telling, right?

It's like, just be honest, be vulnerable, and, and talk about the good, the bad, the ugly.

So, so Yeah, I would definitely say the book that I would pick, Beyond Rich Dad Port.

I would be the richest man in Babylon.

Yeah, I'll say about Dave Ramsey.

I always recommend to him to people like, look, if you're looking to get stabilized, your financial life stabilized, Dave Ramsey is a great place to start.

But don't stay there like that's grow beyond that.

Because Dave Ramsey, he, he is good for a certain demographic that has not.

That didn't get a, a great financial education in either growing up or through school, which most people don't.

Um, to just get stabilized like that, you can, you know, have a good foundation and then you've got like, if you really want to start to grow and build wealth, you've got to grow beyond Dave Ramsey, because even Dave Ramsey grew beyond what Dave Ramsey teaches.

Yeah.

All right, Chris, well, listen, this has been great.

We really appreciate your time today.

We'll have to wrap it up there.

But listen, if any of our listeners want to hear more about you, any more about Money Ripples, the work optional blueprint or anything like that, what would be the best way for them to connect with you and do that?

Yeah, we mentioned the work optional blueprint, which is on Amazon.

You can find it on there, of course, or look up anything that's Money Ripples, whether it's at Money Ripples on social media, money ripples.com or the money Ripples podcast is on all platforms, including YouTube.

That sounds great.

Thank you, Chris.

We appreciate your time.

Thanks for educating us today.

Same appreciate having me on.

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