if you are a brand new real estate investor and you're still struggling to get your first deal because you don't have the funding or if you're a wholesaler in real estate and you've collected some assignment fees but you want to stay in some deals but you haven't been able to because you don't have the money to do your deal or let's say you're a seasoned real estate investor and you just want more money to fund your deals without relying on hard money lenders or traditional lenders well if you answered yes to any of those three questions don't go anywhere because i'm getting ready to plug you into the money right now [Music] well hello and welcome to another episode of the private money academy podcast i'm jay connor your host also known as the private money authority and what happens here on this podcast is we always have an amazing show because i always have amazing guests and today is no exception but before i introduce my guest i want to plug you into the funding as i said let's say you're a new real estate investor but you can't get your first deal done because you don't have the funding or you're a wholesaler and you want to stay in some deals or you're just a seasoned real estate investor and you want to get more funding for your deals without relying on traditional funding sources or hard money lenders well i've got a gift for you for just being here on the private money academy podcast and that is i just recently released my brand new book which is titled where to get the money now subtitle how and where to get money for your real estate deals without relying on traditional or hard money lenders in this book i reveal exactly how i went from no funding to over 2 million dollars in funding in less than 90 days so if you're in this world of single-family houses and you want some funding for your deals you can go to amazon and spend 20 bucks or let me just give you the book for free all you got to do is just spend a couple of bucks on shipping and handling and we'll ship the book right out to you and here's where you can get the book for free go to www.jayconnor j-a-y-c-o-n-n-e-r.com forward slash book that's jay connor j-a-y c-o-n-n-e-r dot com forward slash book b-o-o-k and we'll rush it right out to you well as i mentioned my guest today is an expert and he's an expert in the field of financial planning now the way my guest does financial planning is different from anybody else that i've ever had here on the show he's a member of this organization that's called bank on yourself so my guest helps real estate investors business owners even full-time employees to grow safe and predictable wealth regardless of what the market is doing and the way he does this is he uses a financial strategy that's actually been around for check this out for over a hundred and sixty years when my guest started this journey way back i say way back he's not that old in fact he's rather young when he was in graduate school and he was working on getting his mba well he's worked for companies like allstate blue cross blue shield before founding his company which is called financial asset protection which is a financial services firm that focuses on one primary concept and strategy and that is the bank on yourself concept which is also known as the infinite banking concept i'm so excited to have my guest here on the show with me today so welcome to the show sari ibrahim welcome sari hi jay thank you so much for having me on and thank you so much for that awesome introduction it's a pleasure to be here and i'm excited to chat with you well i'm excited to chat with you sari so first of all why don't you take a moment and tell folks how in the world it is you're qualified to talk about what you're going to be talking about yeah definitely um so i um i started my journey my financial services financial planning journey when i was doing my mba and i was about halfway through the program i started working for different insurance companies and financial services institutions i worked at allstate and blue cross and humana i mean i started to enjoy working with clients originally i thought i thought i was going to get into project management that's what i got my mba it was a concentration in project management but i quickly quickly realized that i love talking to people i love problem solving i loved listening to people too um and i started to notice that people became more comfortable speaking to me about their financial problems and things that they wanted to accomplish financially so then kind of a light bulb went off and it was like maybe i can make this into like a long-term career where i'm just helping people um plan financially and solve money problems either too little like too much debt or too much not sure how to position real estate deals and things like that but i wasn't really sure of a type of career like that so i i stuck through the insurance world and mostly in medicare i was a medicare consultant too and helping people in retirement plan for retirement for medicare in their retirement and um i i kept my eyes open for financial planning and just read a lot of books i read about three books at the same time um for the last 10 years and i came across a book called the bank underself revolution by pamela and the book talks about the strategy that we're going to talk about today the bank on yourself strategy what it is how it works why it was even invented why it was even created to begin with and i love the book i love the content in the book and then at the end of the book there was a section that said you know if you want to join our program as an advisor um i i applied to the program got accepted and went through an eight-week rigorous training program on how to structure these policies how to understand kind of different financial vehicles out there like mutual funds etfs stocks and all these different other types of conventional types of investments and we went through the problems with them the pros and cons of all of them um and then most importantly was how to structure bank on your self-type whole life policies and and really and i started a company called financial assets protection and that was kind of the overall point of the company is to become a bank underself organization where we can help clients use these policies especially a lot of our clients are real estate investors and private money lenders and hard money lenders so really you know i'm excited to be on your show because i think it's going to really connect really well with you and the audience that's super so i know you have a way or ways in which you can actually help real estate investors uh and private lenders but before we get into that let's start from ground zero here my guess is i probably have hardly anybody that is uh listening in to the show that even knows what the bank on yourself concept or the infinite banking concept is so where did this come from i mean you you know it's been around for over 160 years but what is this concept why did it originate and how does it work and and take your time go nice and go nice and slow because i want to make sure we understand what this is all about because quite frankly this is probably a brand new concept to a lot of people that we've got tuning in yeah absolutely so this concept really started about let's say about 20 years ago by nelson nash and nelson nash wrote the book becoming your own banker and he's kind of the godfather of the infinite bacon concept he invented the infinite banking concept and in his book becoming your own banker he starts off talking about some of the problems he had like at one point he had about 500 000 in debt and back when interest rates were like 20 percent he was paying about 67 000 a year just in interest payments alone on that outstanding loan and he started to realize that you know a lot of other people have this problem a lot of people you know the average american spends one third of their income on servicing debt so you know this realized you know he realized that this is a common problem and then kind of went through the technical details of whole life insurance and kind of for those who don't know whole life insurance isn't just life insurance it also has a cash value component to it like a savings account portion to it that grows over time and you actually earn compound interest on that money and and the point of it isn't just necessarily from an investment standpoint it's it's more of a savings standpoint and a way for you for you to become your own source of financing so nelson nash throughout the book is talking about structuring dividend paying high cash value whole life insurance policies so that way you could become your own source of financing and then you could pay the interest back to yourself so originally it was created to address the interest part of the interest problem instead of paying out interest to other lenders you would pay interest to yourself and become your own banker or you would bank on yourself now the actual asset dividend paying whole life insurance that's been around for over 160 years families and financial institutions have been using you know dividend paying whole life insurance policies for over 160 years you know but really the the concept of the infant and banking concept and it being used by more people than just banks and financial institutions and family offices it's being used now by more um everyday people people who make a hundred thousand dollars a year to 200 000 a year real estate investors who have like 10 properties you know who are on their way to becoming financially free but not just for the billionaires if that makes sense that does make sense so how does the concept work so the concept so the first step is you want to work with an advisor who understands this from a conceptual standpoint standpoint and not just a product standpoint so using infinite banking is not just going out and buying a whole life insurance policy and that's it you've already checked all the boxes you need to work with an advisor who understands the high cash value use of whole life insurance there's only a limited set of companies that could actually do these policies and a limited set of advisors who actually know how to structure and design these policies so that way you have high cash value in the first few years and you also have access to it there's also a lot of tax benefits when it's structured the right way so i guess step one is you wanna you wanna find that advisor that really knows this and does this full time and has a track record of actually working with clients and the second step too is you wanna make sure that your advisor is going through your financial analysis making sure that that you are um you're doing all these other things for the right reason so for example we do a financial analysis to understand the client's financial situation number one to see where they're at what they're doing are they invest in the stock market are they full-time employees do they have their own business we want to understand their financial life their financial health and then we also want to understand their objectives and what is it that they want to accomplish do they want to retire in the next 10 years 20 years do they want to buy more real estate do they want to loan out their money as hard money lenders or private money lenders what is it that they want to do with their money so we want to identify those objectives and then we would structure a design maybe one policy maybe more than one policy to address their objectives and also based off of their financial situation based off of their tax rates based off of all these other intricate parts that need to be taken into consideration um from there yeah and again it's important it's not a commodity this isn't a product it's a it's a way of living it's a way of kind of understanding how the financial system works and for you to become your own financial system not literally starting an actual fdic insured bank but but having the banking principles in your life where anytime you need to finance something you can go to yourself go to your whole life insurance policy leverage that borrow against that and then use it for other investments so i'm still a little confused so what's the benefit of this strategy and what pain or problems does it fix and solve yeah so there's a couple so number one so the number one benefit of this is guaranteed growth so this is based off the whole life insurance policy is based off of growing guaranteed wealth um when you start a policy there's kind of two sections to the policy there's the guaranteed growth the projections that the insurance company says for example if you're going to fund a policy over 30 years they say if you put in 10 000 a year for 30 years we'll guarantee you x amount of dollars during this duration of 30 years plus more in the future plus we'll guarantee you the life insurance and then also if everything goes well we'll also give you dividends on top of your cash value dividends are not guaranteed but we only work with insurance companies who have a proven track record of paying our dividends for over 100 years so in other words so the first benefit is the guaranteed growth and the high certainty of dividends being paid over time number two um there's a lot of tax benefits behind this so number one the the the way the policy grows and accumulates with interest and dividends it's growing tax deferred so for example you have a hundred thousand dollars in cash value year one year two it grows to a hundred and five thousand dollars you don't pay taxes on that growth it grows tax deferred also in most situations when you go to take money out of the policy either through loans or withdrawals that's also going to be tax-free because if you use after-tax dollars to fund the policy and under current tax law loans and withdrawals on life insurance policies that are non-modified endowment contracts non-mec policies are currently tax free so a lot of tax advantages also the death benefit is income tax free to your beneficiaries it could be exposed to estate taxes but it's income tax free to your uh beneficiaries either your family or if you want a business the business would get that income tax free um the fourth it's not effective which kind of goes with number one is not affected by market conditions so that means if you have all this money and whole life insurance and then there's a major market crash or a recession it's not going to affect the cash value of your policy um the way the whole life insurance company pays out interest and dividends is not correlated with market conditions with the stock market it's they're mostly invested in private loans and button in the bond market so um it's not going to be hindered by market conditions and then also you have guaranteed access to the policy loans and withdrawal so for example let's say um you've been building up the policy you have a hundred thousand dollars in cash value next thing you know there's another 2008 that happens another market crash happens banks aren't giving out loans um market values have dropped you can go to your policy that didn't drop in value based on market conditions and the insurance company will guarantee you your ability to borrow against your money uh they'll give you it's guaranteed to take out a loan against it the only collateral you need is just the policy itself you don't need any other collateral no credit check no credit scores um no other property to put up nothing no other collateral but the policy itself so this kind of opens up the doors when other people can't take out loans in in poor economic times you would be still be able to do that in your policy it wouldn't be affected by market conditions and you wouldn't need any other way to uh take the money out and then also i guess the sixth benefit is in most states the cash value of the whole life policy is protected from creditors and judgment so this means you know if you've been building up cash value in a policy somebody sues you for whatever happens you know check with your lawyer about this but in most states you could look this up the cash value is outside of kind of it's an exempt asset so it doesn't really count when you're being sued again i'm not a lawyer so um check with your lawyer about that but in most situations there's a lot of asset protection behind the use of dividend paying whole life insurance so since a person can borrow using that whole life policy as the collateral they can borrow against it no credit check or whatever that's one way that through this strategy you can help real estate investors is that right absolutely yeah and we can help them a couple different ways so one way we can help them is literally instead of go if they have enough cash value in the policy um they need to for example use for the dom payment they can go to the policy borrow against that for the down payment and then they could and then banks also allow this so if the bank asks you hey where did you get this 20 down payment from you could say i got it from my whole life insurance policy they actually like to see that in portfolios because it's because when you borrow that money it doesn't decrease the value of it your your money actually keeps growing even when you've borrowed that money so you can use it for down payments now if you have a lot of cash value in the policy you could actually use it to finance the entire deal so you're becoming your own mortgage you go to your policy you borrow against it you buy a deal as a cash buyer and then you finance it to yourself instead of paying monthly payments to a lender you pay it to yourself back into the whole life policy and then when you do it the reason why that's that's important to do it that way is that when you do it that way you have two assets now instead of just one instead of trading cash for another asset you have to you have the whole life policy accumulating in value and you have the real estate you that you buy that's also going to appreciate value hopefully over time so you have these two assets now that are growing and there you leverage one for the other assets and that's awesome so uh sari just for the sake of those it may have to leave the show early i want people to go and get your contact information right now and then we'll continue the interview so i know you've already peaked curiosity with um some of our listeners uh what's the best way for them to connect with you yes so the best way is to go to our website it's finn asset protection.com it's fin asset protection.com and then you can schedule a free consultation there you can also download a free book that talks about this concept awesome so again everyone you can connect with sarri at www.finn that's efficientfarmer in asset assct protection.com finn assetprotection.com and you can schedule a call so um back to this concept sir so let's let's talk about some hypothetical numbers all right so i'm thinking one question that some of our listeners may have is okay if i get to borrow against my um whole life policy uh that you can help them get set up and structured and all that let's do some real numbers here so let's say so so let me give you the blanks to fill in and you can give us a hypothetical situation give us a hypothetical whole life policy the words someone's going to take out 100 you decide in this hypothetical scenario they're gonna take out a hundred thousand two hundred fifty thousand five hundred thousand million dollar whatever whole life policy how much money have they got to pay in to that whole life policy to where they can actually start borrowing against it for in other words in other words have they got to pay in 50 000 to where they could borrow 50 000 back or are they able to pay in a smaller amount of money into the policy and they could use that as an asset and borrow a higher amount of money that's question number one question number two is how long before they would open or establish a whole life policy before they could start borrowing against it okay so i'll start with the first one so number one typically um in the first couple years you won't be able to put in for example uh 50 000 and borrow a hundred thousand typically you'd be able to borrow out less than what you put in the first couple years eventually it's going to grow it's a long term strategy it grows over time and that's really where you can borrow more than what you put in in the future but to answer clearly num you know the first one is that no you wouldn't be able to put money in and then borrow a higher amount typically less than what you put in the first couple years and then you could actually borrow right away so for example um you know to give you numbers i worked with a client who put in you know uh 200 000 in cash value in a single premium whole life policy she put in a one-time payment uh 200 000 and then is able to borrow right away like probably i would give it two weeks until the policy gets issued you get your online account that you can access and see the cash value about two weeks after that she can access 90 as a loan out of the policy so about 180 000 can come out to her and then she could pay this back whenever she wants she's actually going to use this to become a private money lender she's going to loan this out to another real estate investor and then he's going to give her of course you know she's expecting between like 10 and 15 percent um as her roi on that interest and then she's going to take that her profits and then pay the policy loan back and then also the way we structured this policy was that she could pay she could put more into the policy than she borrowed so for example she takes out 180 000 dollars and she invests it she ends up making that 180 into 200 000 she can then take all of that 200 000 put it back into the policy paying the loan first some of the interests of the insurance company and then whatever's left over from her profit her true profit she could add it on top of the policy and then now her cash value is like you know uh 210 or 220 whatever the cases might be so it's going to go up when you've added more into the policy got you so of course over time uh interest rates are going to fluctuate yeah but but as of today on the re on the recording of this show about what are interest rates hanging around when someone borrows using their policy as collateral yeah when they borrow it's typically five percent simple interest so if you took out a low and paid it off in four years it would be about 1.9 apr 1.9 compound interest that you paid to the insurance company and then while that's happening typically you're earning four to six percent in your policy over time so that's how you can kind of have an arbitrage a split between um how much you paid in interest and how much you earn so it's very common for somebody for example to in one year have earned you know took out a policy loan paid it back in that time in that one year they earned like ten thousand dollars for example an interest in dividends depending on how much cash drive they have and they've paid like five thousand dollars in interest um to the insurance company so there was a there was an arbitrage there was a split between how much they borrowed and earned and how much they paid back to the insurance company so really when you connect this with real estate you you have a double compounding effect on your money like in this case with this client she's going to make money in her whole life policy through the interest and dividends and she's going to make money with the private money lender with the real estate investor who's who's borrowing her money she has two sources of growth in her policy that's amazing so from your experience sari um in working with people what's your overall advice um or opinion and that is is it best to uh invest in your business is it better to save cash uh which way to go and why definitely and i think that both of them have their reasons right it's important to have cash for emergencies and to to kind of grow your your wealth over time your actual cash um and at the same time there's downsides to that right it's like when you have money sitting in a bank account it loses opportunity costs you could have earned head you invested that money somewhere else you lose it to inflation and you never i think as an entrepreneur and as a business owner you never want cash you're sitting around because you're probably just going to spend it so i think that investing is really important but really that's another advantage of infinite banking is that you have the opportunity to do both you could um fund the save cash and then anytime you need to access that cash you borrow against it and i'm seeing these weird these words clearly jay that you want to borrow against it so that way you kind of um you're not interrupting the growth of your money so for example if your goal is to save for the next 20 years um and you're accessing that money in the middle of those 20 years it's not going to interrupt your overall goal you're borrowing against it you're leveraging that asset and your and your you have the ability to keep growing that asset that cash assets while still being able to invest in your business in other areas so uh i just want to make sure all of our real estate investors or those that are interested in real estate summarize for us one more time how you can help real estate investors yeah okay i can help them become their own sources of financing instead of having to rely on um banks and hard money lenders and private money lenders they can become their own source of financing i can help them do that that's awesome uh what's the minimum age uh that someone needs to be in order to deploy this strategy so there's many ways you could do this so there's you know for you to own your own policy technically it's typically the adult age 18 years old to own your own policy to be an insured i've insured the clients who were newborns that's a whole nother that could be a whole other podcast it's how you could use this as a how you can use infinite banking as a college savings funds for a college saving fund for children so i've insured children as they were newborns um where the parents own the policy they paid into it by the time the child is in college by the time they're like 18 years old they'll have like a hundred and fifty thousand dollars in cash value for example just from putting in a few hundred dollars a month into the policy so um to be the owner typically 18 um the youngest clients i've had that are the owners are probably about 23 24 years old where they're the owners of the policies that's kind of the the youngest age i've seen but technically it could be 18.
Um usually typically we're looking for clients who are kind of not really you know they're starting their careers they have some income they have you know a thousand dollars at least a month they could save or 500 a month they could save um but we also do work with clients who are in a tough situation where they're they have a lot of debt for example and they kind of want to figure out a way to pay it down we also work with clients who you know it's not just wealthy clients but we work with all types of clients that's that's awesome uh folks one more time i'm visiting here with sari ibrahim and his company uh uses this concept called infinite banking concept also known as the bank on yourself concept uh to connect with sarri and get a consulting call uh you can go to www.fin asset protection that's fin short for financial finn assetprotection.com and connect with sari and if you're listening sarri is like larry but with an s very like larry so siri of parting comments and final thoughts yeah yeah definitely so i have a show called thinking like a bank and you know i um the reason why i mentioned is because you know one of our our ideas or theories is you want to think like a bank you know banks are the largest purchasers of whole life insurance because they're doing it for a reason because of the guaranteed growth the tax benefits the asset protection all the benefits we mentioned they're using it for that so kind of you know as an entrepreneur think like a bank you know think how you know instead of just you know um we see this a lot with real estate instead of just thinking about how to always actively manage real estate think about what if you become the bank where you are actually loaning out your money to other people um and in the sense that you're now a banker not just a real estate investor um and that's kind of what the show we talk about we talk about how to do that how to become your own banker how to become you know how to save on taxes how to save overall in your life and be able to find financial freedom by applying the same strategies that banks use that's awesome well i appreciate so much sarah you're taking the time to be here on the show and again folks you can connect with sarri at www.finnfin that's short for financial evidencenfrank i n asset assct protection.com siri thank you so much i appreciate you my friend thanks jay thank you and have it folks another episode of the private money academy podcast real estate investing with jay connor i'm jay connor your host also known as the private money authority wishing you all the best here's to taking your real estate investing business to the next level and we'll see you right here on the next private money academy podcast [Music]