
How to Become Your Own Bank | Chris Naugle | EP 29
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We help you save. Hey guys, Justin Colby here.
If you're liking the entrepreneur DNA and you have an interest in real estate, I'd encourage you to go over to the Science of Flipping podcast and start checking some of those episodes out. I've been doing it
now for over 11 years, and we have over 400 episodes. So if you have any interest at all in real estate investing, whether it's single family flips or apartment rentals, go over to the Science of Flipping and check out some episodes on that podcast on Apple and Spotify as well.
See you over there. What is up, entrepreneur DNA family? I have a very close friend of mine someone who is a incredible business owner he has done a ton in the real estate space he's had his own tv show and right now i brought him on because what he does today is teaching thousands of individuals on how they can be their own bank they no longer have to go buy money and because of it he's a mentor fact, you, Chris Noggle, just showed me how I can go buy my brand new Range Rover, which I did not going to the bank, but actually becoming the bank myself.
So I took your advice and went and did that and got my new Range Rover using the be your own bank model. Chris Noggle, happy you're here, dude.
And I'm pumped to be out here in Miami. Thanks for having me.
I'm sure you are. What's the weather like in Buffalo right now? Nice.
Way nicer in this actually. I'm upstate.
So it's, yeah, it's actually way nicer than this. Buffalo is a very unique city.
I will say that. Very unique.
Yeah. Yeah.
I wouldn't really recommend it to anybody. It's not really the place you want to go to live, but if you live there, it's very beautiful.
Yeah. So, dude, I'll tell you, and I think this is the first time you've heard this from me, but everything you have advised me to do for the last several years, and we'll get into what that advice is here on this episode, but I literally used it.
I went in to go get a new Range Rover and I thought of you immediately because they said, Hey, we'll give you a hundred percent financing because I have good credit and high income and whatever so they were gonna literally nothing down finance the whole thing and the payments i was just like i don't know if i love those payments right and uh so i just said well if i'm going to pay the bank i think they gave me like a 6.8 interest rate or something like that why wouldn't i pay? And shocker, that's exactly what I decided to do. Yeah.
I mean, why wouldn't you want to pay yourself? This is the thing. When I tell people about buying vehicles using their own bank versus using somebody else's bank, I often don't understand what part of this don't you understand? You literally, by changing where the money goes first and applying the process that you just mentioned, you always get all the money back for every car you buy, drive, and own.
And it doesn't matter how much your vehicle depreciates. Right.
Well, the coolest thing that I thought that made it easy for me is the way the system works, and I want to dive in so people are like, well, tell me why. I literally just make monthly payments in the same way I do to the bank.
I set up already the second i got home i went into my account set up monthly payments every single month to pay the loan back because it also gives you like i saw next to it they give you an interest only payment right where you can just pay back the interest on it i just said i want to pay back the whole loan adding a uptick of whatever the interest is right and it's that's that easy. And I don't have to think about it.
And auto withdraws every single month. And it's the equivalent of me going and paying a bank auto withdraw from the bank of Bank of America or Chase or wherever.
I love the way you explain it because you're changing nothing. Really, nothing's changing from how you would buy a car normally.
Most people go into the dealership, they find the car, and they're like, yeah, that's fine. And they make monthly payments.
Nobody even thinks about it, but who those monthly payments go to is what matters. You just decided, or you kind of picked up what I was putting down and you said, wait a second, I don't like that payment because I lose that money every month I make the payment.
But if I pay myself that exact same payment, that exact same interest rate the dealership or the finance company came up with, I keep all that money. So every month you make a car payment to drive this Range Rover.
But every month, the money you put into your account is there as soon as your check clears. And you can use it the next day.
So let's bring this down a little bit to describe what we're talking about, because think there's enough people that aren't that familiar. But also, maybe let's not use a $150,000 car.
Let's maybe talk a little bit more, you know, how people could use it in a little bit more of a day-to-day lifestyle. Because I know there's not everyone listening to this that can afford that car.
And then there's people out there could go buy 10 of them right now. So let's talk about what is this? What are we even talking about right now? Yeah.
So it's actually so simple that it's actually confusing. And I always tell people that.
But I mean, let me just do this because people are going to be watching this. Let me just pull out some money.
We all understand how money works. You go out and you work or do something to earn this.
But what you've been taught your whole life is to take the money you've earned and to put it in a bank, a traditional bank. And when you put the money in the bank, you don't even think anything of it.
You don't think about what the bank's gonna do with that money, but what you're actually doing is you're giving up control of that money. You are giving the bank full control of that money.
And people are like, no, I'm not. I can go there and take it out.
Okay, put 100 grand in the bank, go back to the bank the next day or when your check clears and try to take that hundred grand out. You'll get some pushback.
They might even tell you you can't take it all. So when you put money in the bank, the bank takes your money and they lend that money out at a higher rate than what you're getting paid for putting the money in the bank.
If the bank gives you three, they're lending it out six plus percent. They're making a spread.
Keyword, folks, spread. Just think that word.
That's key. So if the bank makes a spread, but they don't have to ask you who they lend your money to, how much is the bank actually making? And I found this website called BauerFinancial.com, and this was a long time ago.
And you can put any bank for any period of time, and it will tell you how much a bank makes more than you on the money you leave there. Do you know how much that is? How much? 400 to 1300% more than you make.
If the bank pays you three, they're making 400 to 1300%. So when I heard that, I'm like, come on, no way.
I didn't believe it, but that's the fact. So now imagine this, imagine you take your hard-earned dollars and instead of putting it into a traditional bank where they're in control, you take that money, and you just change where it goes first.
You don't put it in a bank. You put it in a different financial institution, which we're going to get to in a second.
Now, I want to also preface, this isn't something new. I didn't come up with this.
This has been around for hundreds of years. It was actually pioneered by the Rothschilds and the Rockefellers.
And the Morgans and Stanleys, I found a bunch of articles where they use this too. Ray Kroc used this with McDonald's.
Walt Disney, started Walt Disneyland using this. I mean, we can go up right up to the sitting president.
All of them use this system and it's just changing where your money goes first. But before I tell them, because everybody just wants to know, where do I put it? Hang on a second.
Everybody wants to know where they're going to put it, but let me just talk about why you would change where your money goes. And I'm going to tell a story.
So I read, and you know this, this gentleman, Greg and Mike. Okay.
Mike used to lend me money when I, me and my wife were flipping a lot of houses. And because I was an ex-pro snowboarder, I was in Utah snowboarding and that's where Mike lives.
So I called Mike up and I said, Hey Mike, I got a deal. Can we meet so I can show you this deal? He says, sure, meet me at Cheesecake Factory.
So I go there, and I just asked him the question. I said, so how do you lend all this money? I don't know why I asked.
I was a financial advisor, so I always want to talk about money. And he just, without even questioning, he says, I lend for my private bank.
Now, what would go through your head if your friend said this to you? Really, until I knew what you know, I would like, wow, you have a fucking bank. Exactly.
I'm like, holy shit, Mike, you got a freaking bank? Why are we at Cheesecake Factory? Let's get in the car and go to your bank. And he's like, no, Chris, I don't have a bank.
I just changed where my money went first. I act and I mimic what a bank does.
And I said, go on. And he says, well, where I put my money, I earn guaranteed interest.
So being an advisor at that time, I was like, okay, guaranteed interest. I had kind of a menu of things that pay guaranteed interest.
But then he tells me I get the same interest rate for the rest of my life. And I'm like, I don't know what the heck that could be.
Then he says, I get dividends every single year and the interest and dividends grow tax free. So in my mind, I'm still, I'm going through that process of elimination like Roth, what is this thing? And then he says, so when you come to me to borrow money, what I do is I take a loan from my bank, just like you would take a loan from a traditional bank, and I give you the money.
And then you start paying me interest. But what I, or he said, what you don't understand is the money I gave you never left my account.
So I'm getting guaranteed interest plus dividends. That money's compounding uninterrupted.
And then I gave it to you and then you were paying me interest. So effectively, Chris, I found a way to make money twice on the same dollar.
I'm like, oh my God, Mike, you got to tell me what this is. At that time I was a financial advisor.
I'm thinking I just tapped in to the holy grail of I'm going to print money in my practice. And I'm like, what is this? And he says to me, he says, Chris, you know exactly what this is.
You're an advisor.
He says it's nothing more than a specially designed whole life insurance policy
from a mutually owned company that pays dividends.
Now, I was in Cheesecake Factory, a loud place.
I didn't hear anything other than whole life insurance.
And I'm like, whole life is probably the worst place you can put your money. It's exactly what I thought.
And I'm like, this dude has gone off the rails. And I just said to him, I said, whole life doesn't work the way you just described it.
And he says, it does. But you got to understand this is designed to do that.
So now let me come back to your question. So what you do is you take your money that you'd normally save in a bank, not all your money, but the money you'd save, you change where it goes and you deposit it in a specially designed whole life.
And it is very different than a regular whole life that your broke ass brother-in-law tried selling you. Now the money's in the whole life.
Okay, so let's go back to your car, but we'll just pick a $30,000 car. I mean, we can do any dollar amount.
I don't know if that exists anymore. Let's go 50.
Let's go 50. Yeah, I don't think you can get a 30,000.
I don't think so. It's crazy.
Yeah. All right.
We're going to do a $50,000 car. So here's the bad news about using your own banking system, buy a car.
First off, you'd have to save $50,000, but I, listen, I have 13,000 clients that I helped do this and I can't even count the amount of people that have a ton of money sitting in a bank. But then over on the other side, they got a ton of debt.
And I'm just like, wait a second, you got all this money in the bank earning 3%, you got all this debt over here paying 20, like why not take the money out of the bank and pay the credit cards down? But that's not the way people think. So there's a lot of people that have cash that just won't pay cash because they've been taught to finance it.
So you got 50 grand saved up. You take a loan from the whole life.
So folks, I just want you to envision a circle here, okay? Your money, your savings starts on the left side of the circle. All we're going to do is we're going to move the money from the left side to the right side of the circle.
Left side is the whole life policy designed and engineered to be your bank. Right side is whatever opportunity you want.
Here we're talking about buying a car because everybody buys cars. So now you bought the car.
But let's talk about that first part, the money, the $50,000 that was in the account. Let's say we bought a $50,000 car.
If we took 50 grand out of the account, how much is left in the whole life policy? Zero. That's what most people would think.
You still have 50 grand in the account. And this is where, you know, a lot of people hear this concept.
It's called the infinite banking concept. They think, oh, this is a scam.
There's no way that's even possible. Hold on.
Let me tell you how it's possible because it's so simple. You had 50 grand in and you took 50 grand out to buy the car.
So most people are like 50 minus 50 is zero, like you just said. But the 50 that you took to buy the car wasn't your money.
It was the insurance company's money. They've got tons of money, hundreds of billions of dollars in their general account.
So they're happy to lend that money to their policyholders because that 50 grand in cash value that's in your account
earning guaranteed interest and dividends, that's collateral for the $50,000 loan they just gave you.
Now they do charge you interest on the loan. And a lot of people get hung up on this.
Oh,
see, I knew there was a catch. They're going to charge me interest on that loan.
Yeah. But let's just do some math.
If you're making 6%, because your policy pays 6, actually you're at 6.2% now. It was six when you first started.
It's gone up. So you were making six and it cost you five to take the loan.
How much did you make? 1%. Right.
A spread. Remember how a bank makes money? A spread.
Right. But see, here's where most people think, oh, 1% is not even worth my time.
If 6% is compounding every year, next year you got the money, the 50 grand plus the 6% interest. So now you're compounding on a higher amount.
Every year that goes by. If you do the math on that, you start to understand the power of compounding interest.
So now every year your spread's actually going up, not because of anything other than mathematics. So the loan that the insurance company gave you, this is the part that I want to preface.
You don't ever have to pay the loan back. You do, but you got to die and then it gets paid back.
But you don't have to pay it back. The insurance company will never ask you for that 50 grand back.
And most people are like, well, why? Because they made you two promises. They promised you a guaranteed interest in the contract and they guaranteed you a death benefit the day you die.
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But when you take a loan, the 50 grand, the 50 grand comes away from the death benefit that they're going to pay the day you die. So they don't care whether you pay the 50 grand back or not.
They're getting it because they know one thing, that you're going to die. We're all going to die.
So now, if you just understand what I unpacked, you found a way to change where your money goes first into a stupid specially designed whole life. You found a way to use that money without interrupting the flow of interest in compounding.
Okay. And you also found a way to make a spread, spread one.
But now you had mentioned the car payment. So when you went to buy that car or anyone goes to buy a car, they're going to look at what the car payment is.
Now, 50 grand, 800 bucks. You think that's about what a $50,000 car would be? Give or take, yeah.
We're going to call it $800 payment. Most people would just make an $800 car payment or an $800 lease payment and think nothing of it.
But that $800, if you did it that way, is gone forever. And then there's the people that are like, well, I'll just pay cash and I don't have to make payments.
Yeah, 50 grand will never, ever work for you ever again if you pay cash for a car. It'll lose its opportunity to earn for you.
This way it doesn't. But now, all you did and all I would tell your audience to do is figure out what the car payment is.
You did it the same way I do it. I go to the dealer and I just say, hey, what would be for a five-year term at the best rate? Great.
It's $800. Perfect.
They just figured out your rate. And all you got to do is ask for the amortization schedule and you know what your payment schedule is.
So when you buy the car this way, what you do is you set up an $800 bill pay or just check how are we going to do it? But that bill pay goes back to the policy now let's do this again the circle money started on the left where it's earning interest compounding goes over to the right buys the car you figured out the car payment you take the car payment and that's the bottom part of the circle every single month the car payment is coming back into the policy as a loan repayment everybody's got that what you've effectively figured out how to do by being your own bank that way is you 100% control the flow of your money. You leak no money anymore.
Secondarily, you found a way to make a spread, not just once, but twice. Make a spread between what the insurance company pays and what they charge you.
But you also make a spread because the interest that the bank would have charged you right now, what did you say your rate would have been? 6.8. 6.8 minus 5.
So now you've got a 1.8% spread. You effectively really make two spreads.
But the $800 payment you put back in the policy, that's your bank. That $800 is available the next day.
And it's accruing again. The second it goes back in, it starts to accrue again.
In my world, 6.2%. For others, it may be a little bit different.
Absolutely. And every payment you're making back to your bank, which you fully control, you lose none of it, you're paying down the loan to the insurance company.
So if the loan's getting paid down and the insurance company's charging you a fixed, simple interest rate, aren't you paying a lower annual percentage rate? That's right. You are because you're paying it on a lower balance every month.
So one is going down, one is going up. Listen, I'm not smart.
Don't give me so much credit. This is just math.
And people don't learn this. Nobody understands this because they've been told that whole life insurance is the worst place they can put their money by Susie Orman, Dave Ramsey, and all the other gurus out there who sell term insurance, which term insurance happens to be the most profitable life insurance fact.
Profitable life insurance policies insurance companies ever sell, ever, because less than 2% of them are ever paid out on. That is crazy.
Give me that product to sell my client. Now, this is a little bit more personal because how I set it up.
So now I'm just going to see if the audience follows me here. So how I set it up is I'm paying it back.
There's a way that you can set it up in the database, whatever you want to call it. And it says interest payment or loan payment.
All I did was click loan payment. I didn't click interest payment.
Am I still paying myself interest on the payment that I set? The amount that you're paying, so the interest that you click, that's with the insurance company, right? Or are you talking about interest only loans on the car? The insurance company gives me two options to pay a loan payment or an interest payment. So you're just paying just the interest every year for the insurance company.
So the 5%, you're just paying that. But that's fine.
As long as you're making the same car payment you would have made originally yeah it's all going to net out so that's all i did i did the math and i said how much would i be paying and obviously they gave me the quote so i knew exactly how much i'd be paying so i just said great i'll pay that to myself it's fine this is the thing like you don't want to over complicate how much should you pay should i do interest only or hey it's because it's your bank yeah, let's just, to your previous point, if someone pulls out, and I'm making up numbers for everybody, $100,000 because they want to go buy whatever the hell they want to go about, who cares, and they never pay it back, you're still accruing 1% interest on that $100,000. It's actually going to go up.
It'll be at the beginning years, you'll lose money lose money because remember you got it got to get the compounding going but then after that remember every year your compounding rate's gonna you're gonna make one percent so you'll so right and so but effectively if you say fuck it like i'm never i don't feel like cutting a check for a hundred grand that's why i use my life insurance policy they just take a hundred grand off your death policy and that only matters when matters when you die. Correct.
So it really never effectively met. Like if you have as much money, you would hurt yourself.
You'd be robbing your bank. When you die, you wouldn't have as much.
Well, while you're living, you wouldn't have as much cash value either. That's right.
And so you wouldn't be able to do it as much and as frequently with as much money. But in the case of someone just like F it, then you just go, well, won't kill you.
I mean, you still got the policy and you still have interest accruing and i mean like i just don't see the downside so that's why i want to make sure that everyone watching you're listening to this it doesn't have to be 150 000 range rover let's let's bring it into a little bit more practical right could it be debt let's talk debt let's talk grocery shopping or or something that someone use a credit card for gas or is there is there something debt i mean we could use debt at any Let's start grocery shopping or something that someone used a credit card for, gas. Is there something, debt? I mean, we could use debt at any level.
Let's start with groceries and diapers and all that stuff. First and foremost, a lot of people ask me that.
Should I, could I use this system to pay for my groceries, my rent? You could, but I certainly don't teach that and I wouldn't recommend that. Because here's the reason why.
Paying for your groceries has no economic benefit. Buying a car, you would have given up that 7 point whatever percent interest.
Buying groceries, you're not giving up any interest unless you're using a credit card, which will bring me to the debt question next. So I don't think people should use the infinite banking concepts for regular expenses.
What about a house? Yeah, for sure. We have some friends that have enough money that they could justify throwing down a huge chunk.
Now, even the down payment of the house, you go buy a million dollar home, you have 200 grand sitting in your life insurance policy. People do that all the time.
Take the 200 grand from life insurance policy. Don't take it out of your check and just whatever the bank's going to give you.
And you just say, great, I'm going to pay that back to myself. Same idea.
If you did it with a house, and a lot of people make this mistake, they take a loan from their policy to put it down on the house and they won't repay their policy. But if the bank would have given you that down payment, you absolutely would have financed it.
If the bank would give you 100% financing, you would take it. So if you take the money from your policy, because remember, you're taking a loan from your bank, you always got to think like a bank.
Banks don't give loans to the owners of the bank and just say, hey, we're cool. You don't have to pay the bank back.
The owner of the bank or the principal or the CEO of the bank always pays their loans back to the bank. You can't steal from your bank.
So if you took 200 grand out for buying a house as a down payment, figure out what the bank would have charged on that 200,000 and just pay yourself the exact same amount because it's no different. Yeah.
And there's calculators, by the way, for anyone doing an auto loan or a home loan. You can go online and you can see a mortgage calculator, right? Or you could do an auto calculator, I think.
It's all the same stuff. Essentially, you're around the same number.
We use bankrate.com. It's super easy.
Bankrate.com. It's right there.
Right? Okay, so let's just talk about debt, credit cards. People are starting to rack up some credit cards.
They have some savings, but they're scared to pay off the credit card because they don't want to get rid of their savings. Let's just talk about that.
This is my favorite thing to talk about because in the United States right now, we've got a major debt problem, major credit card debt problem because people are just racking up credit cards. So credit card debts have gone through the roof.
So this is easy because almost every one of your audience probably has credit card debt. And with interest rates being higher right now, credit card companies have raised rates.
So the average credit card, we just looked this up, might be a bit dated, was 24%. So think about that, 24%.
When you do a real estate deal, would you be happy with a 24% return? I would love it. If you invested in a 401k or into a stock, would you be happy with a 24% return? Great.
So I think everyone of your audience would love to make a 24% return, but what if you could make it guaranteed? Would that be even better? Yes. Okay.
So everything's the same circle, but now what we're going to do is we're just going to put money in the policy, the left side of the circle. We're going to identify the debts that we have in our life, but we're going to organize them from the lowest balance to the highest.
A lot of people would know this is a snowball maker. And then what we're going to, and don't make it, don't look at the interest rate, just lowest balance to highest.
We're going to put the money in the policy. And when we save enough up in the policy, we're going to take a loan from the policy.
We're going to pay off the lowest credit card. Let's just pretend it's a visa that you owed five grand on and it was 20%.
Okay. We're just going to use that number.
number. So now every month you were making payments on that visa, which is interest, usually interest only, at 20%.
So you're giving away 20% and that cash flow leaves your family forever. But you saved up enough and you take it out of the policy, you pay off visa.
So you were already used to making visa payments, let's five grand, let's call it 100 bucks. So what you're going to do is you're going to just change the name on the check.
You're going to erase visa and you're going to write your name and you're going to have that check every month go back into the policy. So everybody remembers from the car example, we were making a spread from what the insurance company pays and what they charge.
Okay. But now 20%, 20 minus five, now we're 15% spread there.
Okay. So now you just made effectively 20% risk-free because you were just giving 20% away.
But now you also have the cash flow that you were giving away. So now that $100 is going in the policy plus the savings you're putting into the policy.
We call them premium deposits. So now you're building up money at a higher velocity.
So when it gets to enough to pay off the next debt, you just do the next one and the next one and the next one and the next one. And eventually the only thing that's left is your house.
But now you've got all that money that you're recycling and recapturing that you used to give away to the credit card companies that you're now saving. The only thing that can screw this up is that people pay a credit card off and then they go rack the credit card back.
I was just going to say, and don't use a credit card for all of you out there. Right.
I mean, here's what, listen, you and I both know Daveave ramsey isn't our favorite he doesn't talk to the same type of people typically either right and so what i would tell you is if you are on a stuck income let's just call it a hundred grand or less you probably shouldn't have credit cards would you agree to that i would i think that's the one thing i would tell dave ramsey good for you because that's the reality they're on a stuck going to go make $350,000 next year to go pay off the debt that they accrued. So they probably just shouldn't go accrue debt, right? Totally agree.
But they can still use this policy whether they have debt or not. Well, here's the thing that we haven't really even talked about.
We haven't talked about the debt benefit outside of when you're borrowing, you're actually borrowing your debt benefit and lateralizing with your cash value. I mean, listen, I have a four-year-old.
I have two kids now. Your kids are world.
I know. But they're world.
We just talked about this offline. Like anyone that's listening to this, if you have kids, you will understand that there's nothing more important than your kids.
So when I go, okay, we're all going to die. And I take a lot of risks.
So I might go a little earlier than some others. But when I go, I want my family to live a better life.
I want my family to not have to worry about money. I want all the things that they would need to be taken care of.
That's just what I want. Now, I have trust to control that so that, you know, I don't think my daughter would, but maybe her kids would squander the money like the Vanderbilts.
But the thing is, is like you have to want the protection, the death benefit. And I totally do.
And all of our clients do i mean because there's a value to that and there's there's a cost for that death benefit so when we build these policies we're going to put the lowest death benefit on the highest amount of money in so we're going to that's why it's so efficient because they're designed and engineered but that death benefit is so vitally important and anyone that ever tells me i don't care about the death benefit like, they can figure it out themselves. Like I had to, I see you selfish son of a bitch.
And it isn't even about the money. It's about the mindset of how people think sometimes, because I'll tell you this, I've delivered hundreds of death claims in my career.
I've been doing this 21 years and I'm going to talk about one. There was a woman and her husband, I don't think he told her that he had life insurance, but he did.
He bought it from me back when I was an advisor. He passed away unexpectedly.
He was like 63 years old. He had just retired.
And that's a common thing. People retire, and then they go a couple of years later.
And I remember driving all the way out. There was a two-hour drive.
And I thought, this is a waste of time, but this is what the company wants me to do. And I knocked on the door, and the woman answered the door.
And she knew I was coming because I'd call her. I said, I have something for you.
I didn't tell her what it was. I said, I have something for you that your husband left.
And she opened the door, but then behind her were two little kids. I came in and I didn't even get into pleasantries.
I just say, Hey, listen, you know, while your husband was alive, you know, we did some planning and he took out life insurance and I'm bringing you the check. I hand her the envelope.
She opened it and instantly burst into tears. I mean, of course.
I didn't know what was going on, but she then we sat down, we had coffee and she shared with me. She said, I thought I was going to have to sell the house.
I didn't know how I was going to tell my kids we were going to have to move to a different house and they would have to be uprooted from their kids. I mean, that's one of hundreds of stories.
And anyone that ever tells me, oh, I don't care about the death benefit. Building a business may feel like a big jump, but OnDeck small business loans can help keep you afloat.
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So there's a value to that. And I always tell people, like, listen, as good as it sounds, how we just explained it, like the first year, two years, and every policy we design, no matter how efficient we design it, you're going to lose money because there's a cost for that insurance.
So if you put $100,000 in, you're only going to have probably $90,000 to $92,000. So that $8,000, like that pays for the cost of insurance.
And some people are like, I'm not doing that. I don't have to do that at the bank.
Yeah, but next year when you put, let's say, another $100,000 in or another $10,000 in next year. Let's use $10,000.
It's a nice easy number. You put $10,000 in the next year, and then you can take $10,500 out.
And the next year, you put $10,000, and you can take $11,000 out.
And you put $10,000 in the next year, and you take $11,500 out.
Would you give up the $8,000 in the first year to be able to make money for the rest of your life?
Because that's exactly what it is.
You might give up for the first year to maybe three years if you're older to make money for the rest of your life because that's exactly what it is you might give up for the first year to maybe three years if you're older to make money for the rest of your life guaranteed that's the part that like most people don't understand like that's the trade-off because that's going to provide protection and security for your family when you're gone well and i don't know if you necessarily speak too much to it but you could even look at this as a retirement plan when you do want to retire right like and you maybe talk more about it i just you know i know you and i talk about this side of it but like you hit an age that you want to retire and you have whatever the amount of money in there this can be your way to for the next 20 years pay yourself an income replace your income because for 20 years you kept investing into it it's always your money but it was accruing and compounding which increased your money at such a faster rate you thought you were going to have i'm making up numbers a million dollars but you have 1.6 million dollars in there and you have that extra 600 because you put it into this in versus putting into a savings account or a bank cd or whatever it may be or a 401k or anything else because all those things have, you know, 401k as risk. They also have rules, 59 and a half or later is when
you can take the money out without paying a 10% penalty. But I do tons of videos on my YouTube.
I mean, everything, how you can use it. What's your YouTube?
At the Chris Noggle. So it's just my name with the.
Yeah. And I've got right now,
1200 videos all about be your own bank. So go to go to at the chris noggle also uh chris noggle.com is a great website where you can learn more about him what he does um but also go check out all his videos I mean this is I'm using it so if you're listening to this podcast watching this podcast whatever it be reach out to chris right he will make sure that regardless of where you're at whether you make more money and you can use a policy a little bit more like me or maybe you're like justin where's the minimum how can i start with the minimum what is that like get to chris get to his team he's going to be the one chrisnoggle.com and at the chrisnoggle on youtube instagram the chrisnoggle all my social is the same the chris not perfect make sure you follow him but let me ask you this question i didn't mean to cut you off but i do want to talk to like what are some of the minimums like what if someone's out there saying like i love this concept i just don't make quite as much money as as i would like to but like i want to get involved i want to get started are there minimums are there thresholds are there like you can't really do it unless you have this much saved or anything like that? It's a great question.
Yeah.
So the minimum is easy.
It's 10 times your age monthly.
So a lot of people are like, can you say that in English?
Great.
I'm 46 years old.
Add a zero to my age.
That's 460.
That's my minimum monthly for this. That you'd happen to deposit.
Correct.
So if somebody's 30, 300 is their minimum.
If someone's 60, 600 is their minimum.
And that's monthly.
There you go.
The easiest way to do it. And we've done this thousands and thousands and thousands of times.
So we found that sweet spot. And the other thing too, that is very important.
So a lot of people think that they're locking into something with this, that once I started, oh my God, I got to, you know, it's gotta be this, but like, let's just use another $10,000 because it's easy math for me. Somebody says, Hey, I want to build a policy, Chris.
I want to save $10,000 a year. Great.
When we build the policy, we're going to build it under IRS rules. It's called the MEX 7 payroll.
Don't want to get too technical, but $10,000 is going to be the most amount you'll ever be able to put in that policy because we're going to build it to the threshold. If you want to put $10,000 in per year, we'll build it to that, but you can never put more in.
However, let's just say you set up a policy for 10,000, you lose your job. And you're like, Hey, Chris, I can't do 10,000.
Great. How much can you do? I definitely could do like four grand, you know, easily.
Perfect. Then do four grand.
You see, when we build them, there's going to be a high and a low, 10 being the high, the low is going to be anywhere between 60 and 90% less. So it could be as low as a thousand per year, but usually it's going to be about two to $3,000 for every 10 you put in as your bare minimum.
So there's lots of flexibility. So when people set this up, like they get nervous, oh, I don't want to commit to that.
You're really not. Tell us how many you want us to build it.
You want the the max of this and you want the minute this we'll design it. I love that.
Cause I don't even know what mine's at, but you know, all I know is I pay into it monthly and it works for me and it gives you, let's talk about another question I thought of that. I don't know if I've asked you, but I think a lot of people are thinking as I'm listening to you right now, like even, even if I just want a different place to put my money in a general sense, isn't this just a better actual vehicle than anything else? Because a lot of people say, like you and I are both multiple entrepreneurs.
We own a lot of companies together. We've done a lot of business together.
We're likely going to be doing something here very shortly in real estate again. Like there's always different ways to look at money and everyone says you should have a six month you know oh shit factor well wouldn't you rather have this in this type of policy in this vehicle than your bank account yeah i mean your emergency fund your oh shit factor i mean why not double down on your oh shit factor and make sure that your oh shit factor happens if things go bad and oh shit you know i died like let's let's pretend well yeah so if things go bad and you lose your job well now you have this vehicle that's been paying you call it six percent just i don't know if i can quote that but let's just call it six percent that's what you're starting that right so i started at six now i'm at 6.2 great and if i don't use it because the oh shit thing didn't pop up well now it's still accruing and i'm still paying into it and it's just growing bigger and now all of a sudden i don't have to worry about this do i have six months reserves because all of a sudden it's the equivalent of nine months reserves and all of a sudden it's the equivalent of a year reserves i now no longer even have this thought process this worry this like what happens if because it's there and it's been accruing the whole time and the more money i pay into it hundred dollars a month two hundred dollars a month five hundred dollars a month the more that five hundred dollars a month accrues each and every month yeah even on the basic like again i'm just kind of saying even on the basic like oh shit factor like it's just a better vehicle 100 and so like i know we're talking about being the bank and the circle and everything, because that's how you make more money.
The policy is never going to make you wealthy.
Okay. But if you use the policy with the process, we just talked about the circle, which is called
the infinite banking concept that will make you wealthy and keep you wealthy because you leave no
money. But let's just talk about it as an emergency fund or as a, just a different savings account,
right? Where to save your money. Why wouldn't it be better? Because you're getting much higher rates.
The lowest, the insurance companies we use,
we use five insurance, different insurance companies.
There's hundreds of insurance companies,
but there's really only five that we have found
that really are optimal for using,
or for this concept and this type of design.
But the lowest is five, I'm trying to think.
I think it's 5.65% right now, dividend crediting rate.
I think that's our lowest right now. Dividends just went up, which is why I'm not remembering the amount.
5.65. How many of you right now are getting 5.65 on your savings, your high yield savings, or your CD? Any? Maybe one or two people, right? So if you're getting 5.65 on this account, but it's growing tax-free, do you realize the tax equivalent yield you'd have to earn in a taxed savings account? 10%.
Well, depending on your tax rate, it could be seven to 10%. I mean, so you're making a much better return.
It's growing in a tax-advantaged account. It's protected against judgments and liens.
So we're in real estate. So there's a lot of judgments, a lot of lawsuits for real estate, you know, developers and real estate flippers, whatever you do in real estate, we get sued.
That's it. So this money, and we're in Florida here right now, this is unlimited protection.
So people always ask me about that. Like, what do you mean? Well, okay.
You ever hear of OJ Simpson? Like, I know he may or may not have done some bad things, but the one thing that remains fact, when OJ Simpson went through all those lawsuits, he got sued probably more than any other human being on earth. He still was a millionaire.
And people don't understand how. His money was in protected accounts called life insurance.
That's why it was protected against judgments and liens. So you're getting guaranteed interest, dividends, tax-free environment, protection against judgments and liens, the ability to access and use the money anytime you want.
How long did it take you to get the money for the car? A day? Yeah, a day. The longest I've ever seen it take is three days, 36 hours.
You add immediate access to your cash and protection for your family. Why wouldn't this be a better place to save money? The only reason people don't is they don't understand it can be used this way i hope you guys rewind this small little section because if you are just thinking why wouldn't i like what is the deal like why wouldn't i do this for then reach out to chris because i i'm thinking the sound like i'm sitting here thinking like how many more policies do i need to be creating what does that all look like right is the same thing that you guys are going through listening to this or watching this I'm thinking on a bigger level like how many policies for how much and things of that nature and at some point it may not necessarily be about the death penalty if I have four or five policies or death benefit but about how I can leverage it right because I am a real estate investor because you're a real estate investor because we understand how to move money and how to make our money work without us having to go do much it's's like imperative, right? I mean, for those of you out there that are in real estate, this is a great place to find private lenders.
It's a great place for you to have money for your own deals. I mean, it is literally everything.
It really is. And, you know, I'd be remiss to go back to that retirement because a lot of people are thinking retirement.
Most people put money in 401ks. I don't particularly like 401ks.
I spent 16 years as an advisor. I sold hundreds of millions of dollars worth of deposits in 401ks, and I hate them.
There's too many rules. They're just so limited and restricted.
So how do you use this for that? Well, let's just give an example. First off, you're putting money into a specially designed whole life that in the future, if you just used it for retirement, just saved and then used it, when you take the money out to fund your retirement, it's tax-free.
So it's a lot like a Roth. People love Roth IRAs, but they don't use them much because they can't either, either they're phased out income-wise, like we would be phased out with our incomes and a lot of other people are, but even if they're not, you can only put so much in each year.
It's not enough to really get traction. So think of the whole life as just kind of almost like a Roth.
I can't call it a Roth, but it works like it because it's tax-free. So you put money in, you get to retirement age.
Now you no longer need to wait till 59 and a half to retire. You can go at 50 and then you just draw out from the policy, the money you need to live until 60, then take money from social security, from 401ks, retirement accounts to supplement it.
This is a great supplemental retirement, but let me go one step further. I made a great YouTube video on this.
What about a volatility buffer? The markets are up, down, up, down. Okay.
So if you've got money in a 401k and you're planning on retiring next year, 2025, it's going to be right after an election. Research the last five elections because every single one of them, after the election, the
market tanks.
So if you plan on retiring next year, you better have your money sitting on the sidelines
in your 401k or get ready because your money is going to go down.
So what if you had money in a 401k, you retired next year, the market tanks, and you need
income because you just retired?
You're screwed.
If you start taking money from your 401k, you're taking it on a declining balance. You'll never recover from that.
It's called the drawdown effect. Look it up.
You'll never recover. But now you got this little side fund, okay? This whole life policy.
So the market tanks, you need that income because you need to live. Great.
We flip over here and now we start taking income from the whole life policy until the markets come back. Then we flip back over to the retirement account.
But let's kick this into overdrive and really make this make sense because we're in real estate. What if when you got to retirement, we took a loan from the whole life and we went to a site called privatemoneyclub.com, which is just like a dating site for money.
People with money meet people that need money for real estate deals. And right now there's hundreds of deals, hundreds of borrowers on there paying anywhere between 12 and and 20% interest rate.
So I take a loan from my policy. I lend it on a real estate deal that I've researched.
Because you've got to know, like, and understand what you invest in. And you've got to know how to do it.
But I lend in a first lien position. You know that.
That means that I'm number one. It's like Talladega Nights, right? Ricky Bobby, son, if you wait first, you're last.
I like being first. So I lend on first lien positions.
Now I got a piece of property if they stop paying me that I'm just... Building a business may feel like a big jump, but OnDeck small business loans can help keep you afloat.
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We help you save. So I lend that money out to somebody in my retirement account or from my policy, and now they're paying me 15%.
What kind of income is that? A lot more than that 401k is giving you. Plus, I'm getting that check every single month.
And it's tax-free. Yeah.
Well, the income from the interest that I'm being paid isn't, but the interest that I'm earning on the compounding interest and the policy is. But it's just now I'm making money twice again.
And now all of a sudden I've got a much better way to produce an income at a lower risk because now I've got a tangible property backing it. Stocks don't have any tangible asset backing the stock.
If the stock goes down, you go down with it. If that person stops paying you, you foreclose on the property, you take the property, you probably make more money.
I know I went fast with that, but there's so many ways to use this. That's why it's called the infinite banking concepts.
Again, even if I just boil it down to it's a better vehicle than if you're saving your money every month for the, I call it the oh shit factor, like you lose your job. Like it's just a better vehicle and there's more utility to it, right? And so I just want everyone to understand like Chris is educated and I'm probably educated enough to overcomplicate it for most of you guys.
He definitely can if he needs to. But like reach out to him on the simple like boil it down to your scenario i think that's a big takeaway that people need to understand is you and i i've been educated by you so i know enough to talk pretty in depth but i think there's a lot of people that like you guys should just be reaching out to ask your questions what are you specifically thinking of what would you be utilizing it for how much could you be doing it that's why you want to reach out to chris regardless is because you could do it in so many different there's so many reasons to do it you can use it for? How much could you be doing it? That's why you want to reach out to Chris regardless is because you could do it in so many different, there's so many reasons to do it.
You can use it for so many different things, but it comes down to just let your money work for you at the end of the day. Isn't that all we want anyways? That's why people buy rental properties is let their money get an ROI.
And it's still not passive income in the way this is. But that's a really good, of thing as we get to the end here is people have only been taught to work for money.
They've been taught that their hour is worth X amount of dollars. We go through our whole lives like this.
Oh, wow, I'm making $15 an hour. Oh, this person just offered me 20, then it's 25, then it's 50, then it's 100.
And we never seem to be satisfied. It's because we're trading the wrong things.
Your hour is priceless no matter what you think your hour is worth because you can't get it back. Your hours are the most precious thing you hold, but yet we've been taught to give our hours up for dollars.
We have not been taught, and we're never going to be taught how to make our money work for us, and that's what the wealthy do. When people ask me, what's the difference between a rich person and a wealthy person? Wealthy people have learned one thing rich people have not.
Wealthy people have figured out how not to give the money back because they have learned how to make their money work for them and how to close all the holes for leaks in their boat or their financial plan. So when we talk about that, like just think about that.
If we just spend our whole life working for money, we will never truly be wealthy because wealth in true wealthy people have freedom of time. You can't rely on trading hours for dollars and become wealthy.
But if you learn how everything we just said, how to make your dollars work for you, your dollars to have no restrictions, they can work 24 seven, they don't take vacations. They don't need to be fed.
They just do what you tell them to do. So when we start learning how to be the bank, when we start learning how to make our money go work for us, which we've been doing for many years, it's endless how much money you can make.
There is no cap. So when people ask you, you know, when's enough enough? I don't know if you've ever heard that, but I seem to get that a lot from my family.
When's enough enough? My answer is always the same. There's no amount that's enough.
And it's not because it's not enough for me. I mean, money is a diminishing return.
The more you make, the less important money is. But what money is, is a tool.
And the more we make, the more we can give. I have a foundation, a private foundation, me and my wife do.
We give lots of money. And I can tell you this, I get more joy out of giving than anything I can ever do with money.
I get more joy giving than I do with buying the new Porsche. I just did more joy with giving than going on vacations.
It is single-handedly one of the most fulfilling things as a human being you can do. And people aren't taught that.
If people would just change their focus and they would start with giving first everybody would live a lot happier it's a lot easier to give when your money is actually making money versus you having to work to money you don't have the connection to it right you work for money you want to use it for yourself because i work for it i deserve it your money makes a self compound of six percent every month every year forever and you're like i have an a hundred grand here that I could probably do something with. Let me go donate it to the boys and girls club or the whatever charity of my choice.
You didn't work for it. So you don't have the same connection.
Absolutely. So one thing I just did is I set up a policy inside of one of our trusts and the beneficiary of that trust is our foundation.
So when I die that right now, the death benefits, 800,000, 800,000 tax free will be paid to my foundation, which means $800,000 can go to help people in need to help animals that, you know, need shelter or need whatever. I mean, it just goes to good.
And all I had to do is one thing different. And that was where my money went.
Ladies and gentlemen, I'm serious. If you're even considering and wanting more information, just understanding this and how you can use it, whether you're going to put a hundred dollars a month into your policy, you're going to put a hundred thousand dollars a month.
I don't care. You just need to understand what Chris and I know, what the rich and the real wealthy actually know, and that's allowing your money to work for itself.
So you don't have to, by all means, don't be using the bank, right? I have a very, I mean, quite literally, I say this all the time the time if people are to audit my bank account it does not look impressive because i would rather put my money in whole life policies and i invested a lot in real estate obviously um but in to to end on this to me this is an and it's not an or i have a crypto account i have an e-trade account I have a whole life policy. I know this is a dirty word to you.
I have a...
IUL. IUL.
I already knew what you were going to say. That was dirty.
I have an IUL life policy, which is you can kind of use the same, kind of not. It's totally different, but right.
So I have two different life insurance. I have a term life policy.
My money goes in different directions. This isn't an and.
It's not an or. This isn't the only thing I do with my money.
I'm pretty sure it's not the only thing you do with your money. But it isn't it's a way to diversify.
But it's also a way that again, people always wonder about how you say how do you have all this money? How are you able to do these things? How do you because these are the little things that a lot of people don't know, and or they're not willing to at least ask the questions that they want answered. That's why I'm really forcing people.
Look up Chris, the Chris Noggle. Go to his website, chrisnoggle.com.
Go to his YouTube. Go to Instagram, Facebook.
Because at the bare minimum, his team or himself are going to answer your questions. So you're more informed.
But I would make anyone that makes any amount of money, period, this is a better utility than the bank. You couldn't have said that any better.
And there's a book called The And Asset written by my friend Caleb. And it talks about, don't say, well, should I do this specially designed whole life or stocks? It's do this and the stocks, this and crypto, this and real estate, this and lending, because you can't.
You're just changing where the money goes first, and then the money's doing exactly what you would have to do dude this is a blast we've gone for a long time go look up chris nagel you've heard everywhere chrisnagel.com the chris nagel all over social media youtube uh he's a wealth of information he's the one i get my advice from i'm constantly pinging him hey should be doing these things uh i just bought the range rover go Go make sure you get into his world. He is a wealth of knowledge,
ton of business experience.
Thank you for coming here on the Entrepreneur DNA, bro. Thanks for having me, man.
Appreciate it. All right, y'all.
If this was pretty good, you got something out of it, make sure you share this episode with at least two of your friends. I will see you guys all on the next podcast with another great guest.
that's right for your business. As a top-rated online small business lender, OnDeck's team of loan advisors can help you find the right business loan to fit your needs.
Visit OnDeck.com for more information. Depending on certain loan attributes, your business loan may be issued by OnDeck or Celtic Bank.
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