Is Infinite Banking Right For You?

[00:00:00] Speaker A: Imagine that you are the family patriarch standing watch over your camp. At night, everything's quiet. Your family's sleeping under the stars. Your olive shoots are growing strong. Your five capitals are being stewarded like good soil. And then you hear rustling in the bushes. Out steps a character looking like an old college buddy of yours wearing a sharp suit, flashing a Rolex and he's got a whiteboard under one arm. And he whispers, hey man, what if you could become your own bank? Tax free growth and tax free loans and guaranteed returns. Multi generational wealth, just like Abraham. Sounds pretty good, right? Sounds shrewd, sounds generational. Sounds kingdom y. Except it's not Abraham approaching you. It's not even your old college buddy approaching you. It's the same same old grizzly bear we warned you about years ago. Whole life insurance and he wears a new costume. And that costume that looks slick and respectable is called Infinite Banking or Bank on yourself. Today we're going to drag that bear into the light. We're going to walk through what it actually is, why that pitch feels so compelling, where it quietly fails most families and when rarely, it might actually make sense. Because as Abrahamic family leaders, we don't fall for complexity that masquerades as shrewdness. We keep it simple, faithful and fruitful for generations. So let's expose this grizzly bear today. Also, you might notice that I, purely to keep myself interested, am going to sprinkle 80s song titles throughout our time together today. I thought that'd be kind of fun. That's Abraham's Wallet for you today. Run your home and your dough like a biblical boss. Mark, how are you today? [00:02:02] Speaker B: I'm hanging in there, Steve. Some, some days I'm just doing awesome and excited about life and other days I'm hanging in there. But it's good to be here at the Abraham's Wallet podcast with you. That's a good part of my day. [00:02:17] Speaker A: Yeah. As Roger Manual used to say, some days chickens, some days feathers, you know. [00:02:25] Speaker B: Oh, yeah. [00:02:27] Speaker A: I was going to throw something out here at the outset because just a little personal vignette that might, I don't know, encourage some dads. I did something today which is a normal part of my schedule, took a little gumption, you know, a little nerve wracking to set up, went in and it turned out well, which was that I went and talked to the principal of our Christian school and voiced some concerns. Some things that I was not happy with that I am seeing around the school and they were well fielded. It went very well. He was receptive, et cetera. And I just came away thinking, you know, if you. If you are the leader of your home, you need to take those meetings with the principal or the teacher or the pastor, because you represent your family out in the world, and sometimes you need to insert yourself. And I didn't bow up on the guy or anything. We had a very nice conversation. He heard me out, and it was kind of funny. I was. I was especially nervous because one of the things I was going to say to him is, there's a little too much DEI that I see at the school. And of course, the principal is a black guy. So I was like, okay, I'm just gonna say here. You know, technically, my. My family is a family of color. And I just want you to understand where I come from, this issue as a Christian, et cetera. So anyways, it went just fine. But I just left feeling like I've protected my family here and I've voiced some concerns, and the guy acted great and said, we can do better. We can do better. So anyways, throw that out to the guys. You might have seen stuff at your church that you think, boy, somebody ought to talk to that pastor, because he's not really considering the family angle, or you hear stuff going down with the teacher at the school or whatever, and you think, is that really my place to really stick my nose in? I would like to go through the airwaves to all of our guys and go, yes, stick your nose in. Be part of the solution to the problems that you see. [00:04:47] Speaker B: Dude, I long for the days of being the parent that pops into the administrator's office and just has a conversation and then goes home and goes, that went great. Because I am, like, waist deep in the sausage machine right now trying to work on school stuff. So you're on your school board. I'm on the board. And it's a small enough school that that means, goodness, you are fielding your own concerns and the concerns of concerned parents and the concerns of teachers and the concerns of the administration. And it's, like I said, can be messy, but honestly, I just don't. I can't really imagine. Maybe I'll do this when our kids go to college. I'm sure I will, because they don't really care what I have to say. Probably. But for this level where we're at high school, middle school, and elementary school, I can't imagine not being as involved as possible. You know, homeschooling is great, and then you're real involved, but if you're going to Do a school goodness. Get as involved as possible. Even when it's really hard, I still think it's worth it. [00:05:55] Speaker A: Yeah. Well, Mark, before we start into the topic that I've already set up, we. Would you tell us how you came across the latest iteration of whole life insurance and the banking on yourself idea? [00:06:13] Speaker B: Yeah. So this is not new. You might hear this and go, well, I've known about infinite banking for 10 years, sure. But it's one of the benefits of the fact that we do this show. This is our little nonprofit to help people with money, money learning. And I have a day job where I work with people as a financial planner. And so I kind of have my ear to the ground. Well, what are the. What are the questions that are being asked? We did an episode a couple weeks ago because I was getting four questions a week about Trump accounts. And so we just got an episode. Can we help explain what we know about those? This one is just. Maybe it's relevant, particularly at the moment. But you know, we've talked about whole life insurance in the past and kind of warned people about some of the pitfalls there. There is a newer and I think it's increasing in popularity, especially amongst families that tend to gravitate towards Abraham's Wallet because they might own a business and they want to kind of have multi generational assets. And that's this idea of infinite banking. And that's where you use whole life insurance for more than just what maybe it was sold to do 20 years ago. And I've had a couple of those questions in the past couple weeks. So I thought, eh, it's probably worth us covering. And if it's relevant, great. If it's. If you're going. I've never been trying, so no one's tried to sell me this stuff. I still think you'll learn a little bit about, well, what is insurance for, what is investing for? And what is my duty as a father? Or dirty secret? We know there's mothers listening. What is my duty as a person who is responsible for my family's money when it comes to due diligence? And how should I respond to sales pitches of all sorts? So we'll cover some of that stuff today. [00:08:09] Speaker A: Okay. As I said in the intro, I have decided that I'll put an 80s song title at the beginning of each section. So part one is. So everybody's gonna hear my bad impressions of these. My memories of these songs. Part 1, Every Breath youh Take, I'll Be watching you. Okay. What is whole life insurance actually what is it? [00:08:38] Speaker B: Well, first I gotta talk about what it isn't. I guess the thing that we've recommended for a long time is called term insurance. You can call it pure insurance. That's where you pay a premium for a term. 20 or 30 years is pretty common, but you can get all sorts of terms and the insurance company will say either every year or every month you pay us this much money and if you die during that time while you have this policy, we'll give you this much money. So it might be a 20 year term for $1 million. And for the next 20 years, if you die, we will give you a million dollars or we'll give it to your beneficiaries. That's pure term. Now whole life insurance is a permanent policy and it's different because it blends insurance with investment and the premiums. So a term insurance policy, if you're listening to this, you're a 25 year old guy, you could probably go find a million dollar Premier 20 year term policy for like $28 a month. I mean it's not particularly expensive. Whole life insurance is where you have a higher premium and I'm talking like 15 times higher. And a portion of that goes into a special account which builds in value over time and it grows. And usually there's different, there's all. Go back and listen to the one we did on all the different types of permanent insurance if you want the details. But it might grow tied to the market indexed universal life, or it might grow at a fixed pace. But traditional whole life insurance, they'll just say this is the rate of return that that's going to gather. And so after say 30 years, your policy has cash value to it and you can take that money out, you can actually take it out as a loan. And then if you, let's say you build up $500,000 of cash value in your policy, you take it out and it's a million dollar policy and then you die. Well now they're going to pay you $500,000 benefit. And the other 500,000 you already took out as a loan. So you're basically just borrowing against your future death benefit. And the only thing to know with these, that really, really is important is most whole life insurance policies, they have that really high premium, you gotta pay that until you die. So you're gonna be paying and paying and paying on a whole life policy from day one until day ultimo, the final day that you got. And if you stop paying, that's when these things break so this is part of why they're really expensive. You have to pay forever. It's something like 80% of whole life insurance policies get surrendered before somebody actually claims the death benefit. That's the difference in whole life and term life. I'm trying. Maybe I'm a little bit slow with my wit today, Steve. I'm trying to think of 80 songs. You didn't tell me about this theme before we started. So I'm having to like on the fly, Scroll Through My White Snake. [00:11:54] Speaker A: Oh, no, no, you're doing fine. You're doing fine. You're doing fine. [00:11:56] Speaker B: And try to think of song titles to see if I can slip one in without you catching it or something. [00:12:01] Speaker A: Oh, I see. I see. Well, um, my. I. My first thought would be, well, then why would you ever want to do this thing? Why. Why did you take these? Frankenstein. That's a combination of two good things that are helpful into something that seems less helpful. But I'm sure you're going to get there. So let's go to part two. Don't you want me, baby? Don't you want me? [00:12:25] Speaker C: Oh. [00:12:27] Speaker A: What's the sales pitch that they give you so that you want whole life insurance, which is also called infinite banking, or bank on yourself? [00:12:39] Speaker B: Yeah. So with this infinite banking thing, the traditional whole life, we'll get at the end to some cases where we actually think it can be useful. But for most people, as soon as somebody pulls out their little whiteboard and starts giving you the pitch on whole life, you just stand up, you don't even say anything. You just run out of the office, get away. [00:12:59] Speaker A: Oh, okay. [00:13:00] Speaker B: All right. For most people, this infinite banking thing, we actually here at Abraham's Wallet, don't hate it as much as traditional. So here's how it works in a nutshell. What you do is you have to have a very specially structured whole life policy. I'm not going to bore you with the details of that, but there's something called a MEC Modified Endowment Contract. And if you break these long, complicated rules, the whole thing falls apart. And the IRS says you don't get to do any of that you were trying to do. So it's very important that it's somebody who knows how to build the specific structure. I wish I could tell you how many times I've seen someone buy a policy thinking they were going to do infinite banking. But it wasn't set up properly, so they couldn't. But let's assume you did. It's loaded up with paid up additions, meaning a lot of times those premiums get paid up, upfront. And so unlike a traditional whole life policy that takes sometimes 10 to 15 years before it's even got as much money in it as what you've put into it so far, these can break even in like four years. So after four years, it has positive cash value. And, you know, rather than once that happens, now I've got cash value in my policy. The idea is instead of when I need a car loan, going to the bank and saying, can I get a loan? Or even I want to expand my business, I need a million dollars. You know, if you have enough cash value in the policy, you can access that without going through an underwriting process, pull it out of your whole life insurance policy without tax, because again, it's a loan. And then the dividends from the policy, which are the amounts that it's accumulating, remember it's paying you some rate of return over time, offset some of the loan interest that you pay. And a lot of times it gets sold as like. The great thing is you're paying loan interest back to yourself, so you get to keep all of that money. It's not a scam. It can work in limited circumstances. And if you do every single step perfectly, it's kind of like a way to earn a little bit of extra return. And I'm talking like an extra 1% on what would otherwise be sitting in a cash reserve or an emergency fund. It is not some mystical secret to unlocking free money to grow your business and bless your multi generational family. If you start hearing somebody talk like that, and I, there are companies out there that specialize in preying upon guys who want to do like biblical family asset building. [00:15:40] Speaker A: Yikes. [00:15:41] Speaker B: I don't like it. And, but, but again, if everything's done right, this could even be a slight but not nothing benefit for you. If you had the right policy, the right needs to use, wouldn't necessarily bite you in the butt. Okay, okay. [00:16:02] Speaker A: All right, part three. Yeah, that's the way you do it. Money for nothing. And the chicks are free. Why? Paying yourself, quote, paying yourself instead of the bank doesn't quite add up. And while you're not really borrowing from yourself, et cetera. You talked about the car loan. Tease that out a little bit more. [00:16:27] Speaker B: Right. So I've been paying on my whole life policy for 10 years. I've got $200,000 of cash value in there and I want to go buy like a budget SUV. So I need $60,000. [00:16:39] Speaker A: Yeah, [00:16:42] Speaker B: well, if I go to Toyota, they're gonna say, we can finance it for 7%. I don't like that. Hey, I've got this whole life policy, and when it's set up, there's an interest rate that's defined, so you'll know what that interest rate is and you can go and get a loan. And they'll say, yeah, we'll give you 60 grand. You don't even have to tell us what it's for. It's always there for you. The problem is, when you take a loan against your whole life policy, you're not actually borrowing from your own cash value. You're borrowing from the insurance company's general fund, using your cash value as collateral. Nobody understands that unless they're an insurance salesperson or really understand this industry. But the interest that you pay goes to the insurance company, not back to you. And the reason that that works that way is because, like I said, your cash stays in the policy. So your 200 grand is earning a dividend for you at whatever the predefined rate is if it's a typical whole life policy. And that is where it actually does offset. So if it's growing at 3% and your 200 grand is in cash value is sitting there getting a 3% return, that's $6,000 of interest that you're gaining in that policy just from the money you've got in there. Now, if you borrow 60 grand, you owe $3,000 of interest per year. If it's at 5%, let's say that's what the rate is. Well, you can do the math and go, oh, I've got this 200 grand, and it's generating a dividend for me that covers double what I'm paying in interest to the bank or to the insurance company, where they told me I was actually paying myself. But as we've now discovered, I'm paying them and then they're paying me, and it kind of offsets. That's why it's not really paying yourself back. You're paying them, and then they're paying you on a different pool of money that they get to keep in the event that you don't make good on your obligations. I think that the reason that this is so appealing to people, though, is because the concept of being your own bank sounds like a big financial win. You go, like, I get to make the decisions. I don't have to go to some dweeb banker and ask him for money. And there's no. No underwriting hoops. One thing I said, we published an article about this on the site, one thing I said is there have been many times as a financial planner where I have been so thankful that some dweeb told my client, we're not giving you a loan for that much because it would be unwise. You can't afford it. So sometimes underwriting is a good thing. But I understand that this feels like, hey, I'm totally independent. And the pitch. The reason this is dangerous for some people is it all sounds like this is a good thing and there's truth to the pitch. Right? Right. But I think the. The thing that is sold to you to be able to accomplish this carries gigantuous fees, low returns, and all sorts of fine print and even pitfalls where if something's not done perfectly, the whole thing falls apart and you owe taxes on all of it. So that's why we tend to look with side eyes and at these infinite banking concepts. Or whole life insurance. Again, if you're doing it and you're like, I'm a pro on this, fine. More power to you. And I'm not saying it's impossible to pull it off. I'm saying for a lot of families, the. What did they say? A lot of sizzle, but no pop to the way this actually plays out in real life. [00:20:22] Speaker A: Yeah, it sounds like a bit of a fantasy. Which takes me to part four. Sweet dreams are made of this. I like that song. I know I'm doing poor Annie Lennox. But if it's a fantasy, what are. What do they not put in the pamphlet about whole life insurance or so called infinite banking? Tell us what it's. What's. What's it really like? What gets put in the sausage? [00:20:51] Speaker B: Yeah, I mean, anytime somebody is kind of pitching something with the idea that there could be money for nothing, that's a problem. Like you could even find yourself in the danger zone when. [00:21:05] Speaker A: Oh, wow. You sure could, Mark. [00:21:08] Speaker B: That was a double. [00:21:09] Speaker A: That's amazing you could find that. That could happen to you. Man, I'm so glad you're here. [00:21:16] Speaker B: You're sitting there, somebody's pitching this thing to you. You're under pressure and you gotta discern what's good and what's bad. [00:21:27] Speaker A: Way to go, Mark. Mark, did you pull up a website that's feeding you some of this stuff? Is that what's happening right now? [00:21:33] Speaker B: I'm not going to admit to anything. [00:21:37] Speaker A: Okay, well, you're entertaining me. That's doing it for me. [00:21:42] Speaker B: One, the returns are low on these policies for a very long time. [00:21:46] Speaker A: I have heard you say 3% repeatedly and my feathers got quite ruffled when you said that. [00:21:53] Speaker B: A well structured whole life policy that's optimized for cash value growth. So again, it's set up really to optimize for this infinite banking scheme. Usually in the best case scenario, I was being generous an internal rate of return of under 2% over five decades and a projected total return of 3 to 5% over the long haul. So again, this is unacceptable. Even in the policies that are structured correctly, you're losing money in the short term. Like if you did this and then something changed in life and you had to unwind it, you're losing a ton of money. If that happened in the first, say two years. So if we think about this, hopefully we have discipled you listeners in the compound interest understanding for a while. But if you invest $10,000 a year at 8%, which is not unreasonable, and you put it into just a stock market account over 30 years, you have $1.2 million. After 30 years, okay, if you put it into an absolutely safe treasury bond account, you end up with $560,000. But that big difference of over half a million dollars can be the difference between kind of multi generational wealth and a stressed out family. So saying I have the opportunity to get market rates of returns, but I would rather lock in a 4% rate of return. We don't like that. And so the returns on these policies are low. And you know, we could get into, everybody has a specific circumstance, but for most people you're going to do better just getting market rates of returns, borrowing for a short period of time if you really need to borrow and you know, keep your money in a place where it's growing for you, usually at a rate that's far higher than whatever you're paying to borrow money. Yeah, number two, the whole tax free thing, I told you, you know, you can get that money tax free. [00:24:01] Speaker A: Yeah. [00:24:03] Speaker B: So I laugh because tax benefits all the time get sold to people who just don't need to worry about tax benefits. It's like we talked about this with the estate tax stuff we were talking about a little while ago. Everybody's, I'm so worried about estate tax. And I go, right, right, right. Is that because you have $100 million? Because I don't think you do. And most people in your bracket have no estate tax worries ever. So it's really just kind of a fear tactic. But if you make $150,000 a year, you're on the path to greatness. You have what you need to succeed financially and you do have some concerns and challenges, but taxes aren't top 10 at that income level if you have a family and are making 150 grand. So a, should we even be that worried about taxes? But I think the comparison that really matters is if I've got all this money and I'm putting it away for the long term, you know, what are the alternatives that are also tax advantaged? And we've Talked about Roth IRAs here that grow tax free, just like your whole life policy. And you can withdraw contributions at any time without penalty, which is more flexibility than whole life insurance offers you. And your investments are likely to earn 7 to 10% annually rather than 3 to 5%. So that's a win to me. You know, you might have an employer who offers you a 401k, well that gives you an upfront tax deduction, which whole life can never do, plus tax deferred growth, plus maybe your company's kicking in a few bucks for you, plus compounding on dollars that would have otherwise just gone into the tax coffers. So the whole life pitch of like tax free assumes you're already maxing out every single thing you can do before you get there. And if you haven't, meaning there's some room left for you to do a Roth IRA or a 401K or an HSA or, or other individual retirement accounts if you're self employed, things like that. If you haven't done all of those, then whole life insurance is almost never the right next step from a tax perspective. [00:26:17] Speaker A: Okay, well then tell me how many people that you run into on the sidewalk, Mark, are maxing out all of those things. [00:26:24] Speaker B: You know, once in a while I get a smug, a smug listener who comes in tapping his toe and says, you know, I, I do it. I Mac, I put 24,500 into my 401k on January 1st this year, sucker. And I go, well, the IRS says you can put almost $80,000 in. Have you done a mega backdoor Roth contribution? And they go, you zing them right [00:26:48] Speaker A: back, don't you, Mark? [00:26:50] Speaker B: So again, I'm not saying you should be doing that. You don't have to do that. But it's rare that you've actually exhausted every opportunity to save on taxes. And that gets us straight into point three, which is you have to borrow that money and pay interest on it. So if you heard pitch number one, you went, nope, don't like it, returns are low. And then you heard the tax thing and you're like, buddy, my blended tax rate's 9%. It's not that big of a deal. And you got down to this, well, you can borrow and it's basically free because the dividends offset the interest. I think that this is really the infinite banking pitch. And it's a loan. You're borrowing your own money and paying interest of typically 5 to 8% to an insurance company for the privilege. So I mentioned that I don't hate these policies always, but the math, you know, if you're managing loans against an insurance policy in retirement, as opposed to just drawing income, which is what I typically want for people in most situations in retirement, and those loans start to compound, you've started pulling out a ton of money, the policy can collapse. And then, like I said, this is another situation where the whole thing breaks. And the IRS doesn't just go, oh, you're out of money. They go, yeah, we want taxes on all of that money because you broke it. So we've seen more than a couple of policies that get sold under the auspices of infinite banking that end up just kind of being improperly constructed and create a big mess. And that's not what you want when you're 84 years old and you thought that you had just taken tax free money out of this investment you made. And then they come calling and go, you owe us a lot more than you thought. So don't fall in that step. The last thing I'll say is that this is true of all things that are sold, period. I don't care if you're buying a Toyota or an insurance policy. There's always a conflict of interest when somebody's trying to sell you something. Those can be big or little. They can be managed or they can not be managed. But with a whole life policy, it is not unusual for an agent who sells you the whole life policy that has $40,000 in annual premiums. That's not an unusual annual premium number. They can earn a first year commission of $44,000. Okay. And you go, well, that's a lot of money, but people deserve to be paid. And these insurance sales guys, I mean, they're rich, they don't probably even care about $44,000. [00:29:39] Speaker A: Yeah, right. [00:29:39] Speaker B: Interesting statistic for you. The median income for an insurance agent in the US is, is around $50,000 per year. [00:29:47] Speaker A: Wow. [00:29:48] Speaker B: Now I assume that that includes a bunch of part timers and stuff like that. So if you're listening to this and you sell insurance, I don't think that makes you a bad person at all. I think I was talking to a brother in Christ who's an insurance sales guy today, and I'm super thankful for his being honest and helping our clients with insurance when they need it. But, you know, if you think that they are always able to nobly decline a, in some cases doubling of their annual income to avoid selling you a product you don't need. I would also like it if they sold bluebell ice cream, is what I said in my article here in the mountains of Utah. But they don't. And we don't always get the things we wish for. And I think when you see really misaligned incentives where commissions are being paid and things like that, you should be asking lots and lots of questions. That's why, as a financial advisor, you can do this job that I do and do it on a commission basis. I don't think that those people are evil, but I think it's real hard to offer truly objective advice when it matters to your paycheck. If they choose option A or option [00:30:56] Speaker A: B. I have to throw out a personal anecdote here that when we started working with you, Mark, and talking through my family's money and getting your professional thoughts on things, we had been sold a whole life policy way back in the day. And it grieves my saving heart. You know, think of the sacrifices we made as a young family and all of the. That giant fat commission check was made right in the first year and it went right into the pocket of the guy that sold us the policy. I think of all the sacrifices we were making as a young family to try to put some kind of retirement savings together. I was a dumb, dumb songwriter. And this here's a pro that tells me, oh, this is gonna be great for you in the long term. I thought, oh, great. And then we became one of the statistics of, let's close this account out, let's put this in something that will actually get market returns and grow. And yeah, I mean, I've, I've. I've paid the price on this, on [00:32:08] Speaker B: this idea I will never forget. I don't know why it sticks out so much in my mind, but I was on vacation with my wife. I think we were like, I don't know where we were. We were on the beach. And I remember distinctly sitting by the pool with my laptop going through your policies and, and analyzing them and getting so riled up because you didn't surrender them in like, year two, you surrendered them in like year 11. And I hope it's okay that I share that. [00:32:38] Speaker A: But it's yeah, you can say it. [00:32:42] Speaker B: I thought, okay, they've had this for a long time. And there is a point for almost all of these where you kind of go, well, this wasn't the best idea, but at this point, we're going through. [00:32:52] Speaker A: You're in it through. [00:32:54] Speaker B: Um, you were still like eight years away from that break even where the recommendation was to cancel it. And I just remember how I was so fired up about it that I just took three hours out of my vacation and worked on analyzing these policies in a beach chair. Cause it was so I. I had my righteous anger kindled. [00:33:17] Speaker A: God bless you. It was. It was painful. We got out of it. Now we're making money with that money with whatever's left. [00:33:23] Speaker B: You know, if you've been in one of these policies, though, for like 10 to 15 years, one question you're probably asking yourself is, should I stay or should I go? [00:33:36] Speaker A: I knew that was leading somewhere. [00:33:39] Speaker B: Great. [00:33:40] Speaker A: Well, this takes us to part five, which is, it's a rare occurrence, but sometimes it's as unusual as this is. What it says, sounds like when doves cry. So what happens when the doves cry? When will whole life insurance actually make sense? What are the scenarios when this is not a dumb idea. [00:34:04] Speaker B: Yeah. So we use them for estate planning. So you combine them with a type of trust called an irrevocable life insurance trust. This is for those blessed folks who have more than $30 million that is going to be left over after they die. And we don't want to hand over 40% of it to the federal government. I'm not going to go into the details, but there is a way to use a whole life insurance policy to move a bunch of money out of your estate without paying estate tax. It can be useful in business succession planning. So let's say you got a business partner and you want to say, well, if one of us dies, our business is worth a ton. We don't want to have to pay cash to buy out the other partner. So let's have insurance policies on each other that just last permanently. Um, you know, if there's a truly permanent death benefit need. So if you have a special needs child who you go, actually, they're going to need extremely expensive care for their whole life and more than I will be able to leave behind in assets that I've saved. That could be a scenario where you go, I actually need this death benefit to last my whole life. And then lastly would just be those super high earners who have exhausted every option. At least you could Talk about it. I would tell you goodness, there's other ways to save on taxes. So I don't like that one as much but it's probably on the list. I think about the Matt Damon movie Rounders which is in my my favorites list. It's a poker movie but repeatedly the concept the really is true to poker is mentioned that when you sit down at a table and you look around and you see a bunch of people that are excitedly playing poker and maybe you're in Las Vegas at a conference and you set up and you just say these all look like professionals. I don't see anyone here who looks like a sucker. The bad news is that it's probably you. And so with, with the whole life policies, if you think somebody has blown some smoke up my rear end and told me that I'm a special, a special guy that and I sat down at this table and I'm like looking at the other players and there's some, some 30 million plus families and there's some business owners and some special needs parents, but I don't have those. I have bad news. You might just be the sucker at the table. So say no. [00:36:30] Speaker C: All right, the final countdown. [00:36:34] Speaker A: All right. This is the bottom line, brothers. Whole life insurance isn't a scam per se, but for the vast majority of Abrahamic family leaders it's an expensive, complex, commission heavy product that underperforms simpler tools over decades. And was your stat mark that over 80% of policies get surrendered before death anyway. [00:36:59] Speaker B: Yeah. [00:37:00] Speaker A: Abraham did not need a fancy insurance wrapper to build a multi generational household on mission. He was patient, diligent and shrewd with real assets that could grow and reproduce. Your job as the patriarch is to protect the camp, not let clever salesmen sneak in products that quietly transfer wealth from your family's five capitals into someone else's commission check. So my math on what you said Mark is basically keep it simple. Do term life for pure protection, for insurance protection, max out your 401ks, your IRAs, use those HSAs which we talked about at length recently and taxable investing for growth. Build real relational spiritual physical capital at your dinner table. That's the plotter's path that actually compounds into families who rise up and we'll call you blessed. And if someone shows up with the latest bank on yourself pitch, you grab the billy club and get a fee only second opinion so that you can run your home and dough like a biblical boss. Any closing thoughts from you, Mark? [00:38:12] Speaker B: Nope. I think that the truth of this particular topic is kind of true in a lot of areas, probably way beyond just investing, but which is that you probably shouldn't invest in things that are sold and not bought. Meaning if somebody comes to you and has this super complex structure. I was dealing with this the other day. Somebody was selling me on a very complicated investment product. And I said, you know, I don't doubt that this could be an awesome investment. I don't understand it. And I think I would need expertise in like three specific areas of. Of the oil and gas industry to understand what you're doing. Exactly. And that's not me. Doesn't mean it's a bad investment. It means it's a pass for me. I think whatever it is, when it comes across your desk, if it's like, this is really hard to understand. And somebody. I was nodding along and feeling really sharp in the sales pitch, but then I got home and my wife was like, what? What is it that you think we should buy? And I couldn't even really repeat how it works to her. That's probably not a place to commit yourself to $3,000 a month for the rest of your time on Earth. So in general, whole life, permanent insurance, sold, not bought. We generally don't like that, and we think there's just better solutions to the types of problems that it's typically trying to solve for. [00:39:44] Speaker A: Great. If this episode saved you from a bad decision or clarified your thinking, you could do one of two. First one would be to share it with a dad who's getting pitched this kind of stuff to protect him. You could Also head to abrahamswallet.com support and help keep this content free and uncompromised. Here's how we're going to finish today. Mark. I did this earlier and the episode came out recently and I personally had fun with it. So here's what I did. I went back to Lyrica 3 by Gemini and we worked together and we created an 80s synth song Pop song that's going to summarize some of what you've told us today. It's going to be fun. Now listen, let me. I'm about to. I'm about to kick it over to it, so let me just warn everybody. First of all, there's two. There's kind of glitchy things first or early on in this track, all I can say is AI is not perfect yet. There's nothing wrong with the way your podcast is playing. And secondly, if. If we don't let us lose you in the verse because the chorus is really good, just Just hang on to the chorus. Chorus is really fun. All right, I'm going to throw it over to to our 80s song that we had made and we'll see you next time. On Abraham's Wallet. [00:41:16] Speaker D: Fancy lingo on a polished card Banking on yourself is playing it hard they promise equiqui inside the vault but if the math fails it's all your fault Whole life dreams and high commissions Built on the back of flawed projections don't [00:41:40] Speaker C: get pulled off sides by a silver tongue we believe in funds that last for the young investing in the index steady and deep A promise for the generations we keep reasonable interest and the simple truth Growth for the elders and [00:42:02] Speaker D: the bright you simple eyes see through the smoking glass Watching the high cost predators pass Grizzly bears in ill fitting ties Selling the policy with hungry eyes Staying faithful to the loafy lines while they chase the flash and the neon [00:42:27] Speaker C: signs don't get pulled off sides by a silver tongue we believe in funds that last for the young investing in the index steady indeed A promise for the generations we keep Reasonable interest and the simple truth Growth for the elders [00:42:50] Speaker D: and the bright youth simple wisdom clear as day no complex games to get in the way Just the market and the compounding hand Building a base on solid land don't get pulled off sides [00:43:10] Speaker C: by a silver tongue we believe in funds that last for the young investing in the index steady indeed Growth for the elders and the bright hue steady [00:43:25] Speaker D: growth simple truth Generational offsides no more.