Podcast Episode 163 Transcript

Episode 163: Debt-Free Life: Mastering Self-Banking Strategies w/ Mark Willis

hey folks this week we're joined by Mark
Willis on the pre-real podcast Mark is a
three-time number one best-selling
author he's the owner of Lake growth
financial services out in Chicago uh
he's a certified financial planner and
the episode focuses on taking all of the
the hard earned money that we've made in
the real estate industry and in the
business over the years and putting it
to work on the back end he has a be your
own Banker philosophy uh centered uh
significantly around whole life policy
something that I've personally invested
in over the last 20 or 30 years it's a
great episode it really gives you some
interesting exercises if you're going
through that piece now where you're
re-analyzing or analyzing for the first
time the portfolio and you're looking to
have the money on the back end work for
you which is something I have not done
candidly to the extent that I should
have it was a refreshing and as it was
describe kind of a cold water splash to
the face episode Mark Willis owner of
Lake growth financial services this
week's episode it's a great one folks
tune in are you ready to bring your real
estate game to the next level my name is
James Prendamano I'm the CEO and
founder of pre
25 years I've closed over a billion
dollars in transactional real estate
each week a meeting with outstanding
investors High performing individuals
and Visionaries operating in the real
estate space these are the people that
are actually out there in the real
estate game right now getting it done
this podcast aims at bringing anyone's
this is the pre-real podcast
we're joined by Mark Willis he's the
owner of Lake growth financial services
he's a certified financial planner who
has a different approach and a different
outlook on financial planning a heavy
background in real estate very excited
to have this chat today we were talking
offline a little bit I'm going through
this process now it's not my favorite
thing to do so I thought it was a great
time to have Mark on the show and with
that Mark thank you so much for taking
the time James glad to be on the show
thank you yeah look you you describe
yourself as being a man on a mission to
help you think differently about your
your money and your economy and your
future what does that mean
well
I think the biggest investment we can
make is in our own thoughts
I believe that if you have a clear mind
Singularity of purpose you can succeed I
think most people
have their financial lives sort of like
a bag full of pebble rocks in their hand
they've been collecting these little
bags of this little bag of rocks over
their lifetime they get their 401K
because they feel felt like they're
finally an adult they got their first
credit cards through college they got
their Roth IRA because someone said it
was cool someone told them to get into
crypto so they got some of that and they
got this little bag full of Pebbles of
rocks
and now they're trying to break through
that glass window to get to success on
the other side
so they take that Pebble a bag full of
pebble rocks throw it at the window and
nothing happens why because the energy
is dispersed there's no Focus
but if we have another rock in our hands
that's similar in weight to that bag of
Pebbles
we got one rock and we launched that
thing at the glass window due to focus
will succeed so yeah when I say thinking
differently with your money your economy
your future it starts with thinking it's
the three pound uh knot of neurons in
our heads that will make all the
difference here now don't get me wrong
we're gonna get down to some strategic
ideas some tactics some products some
approaches to the financial realm that
matters we're going to take it way up
the ladder and way down the ladder
hopefully on this episode and certainly
in my one-on-one conversations I have
with clients we work with folks all over
the country
Real Estate Investors Business owners
even NFL Super Bowl champions James but
most people I work with are just trying
to have more control over their lives
and they feel like they're um I'd say
most people would say if they were to
really speak honestly they'd they'd say
hey Mark I feel like I just walked into
a movie 45 minutes late this money thing
feels like I don't know what's going on
where why did that guy just punch that
other dude why did that guy just lower
interest rates over there
I think most people just want the
narrative you know tell me straight how
does this thing work you're you're
talking about a number of different
things here so first off
um you're describing someone that either
understands or has a desire to
understand
the value of being intentional and being
focused as simple as that sounds it's
not so is that part of your program or
are you looking to work with individuals
that have gone through that growth
already they understand what it means to
be intentional they understand how to
focus uh and they've got their Mind Set
On Now applying that Focus to this piece
of the portfolio are you looking for
that kind of seasoned investor and that
seasoned person if you will well let's
think about it in this way one of the
key conversations I have with clients
and we have a one-on-one advisory
consultation with everyone we work with
and before I jump to any kind of
products or strategies or conclusions
like a doctor I want to make sure that
this is going to be in your best
interest I am a fiduciary I'm a
certified financial planner so that's a
key piece to this puzzle one of the
conversations I have and I don't care if
they are a seasoned investor or just
getting started is what do you want your
money doing for you
and it's a great thought experiment in
fact it's free you can do it right now
we could even have this conversation in
five minutes or less right now James in
fact let's have a little fun do this
let's do it all right so let's create a
brand new Financial vehicle poof you got
the magic wand you're the pope of money
you know wave the magic wand and poof
you got a brand new Legal Financial
vehicle that can do anything you want it
to do
what are the characteristics what are
the attributes that this new Financial
product or vehicle can do and I'll get
us started with one how about this
um let's say it's tax free that's one
characteristic tax-free when we get the
money out there's not a bunch of red
tape or taxes or penalties to get the
money out tax-free when we want to get
the money I'll pass the ball over to you
what's what's another one yeah so in in
my Realm of the business I want the
money to be accessible from time to time
right because real estate is very
non-linear in that regard I want to be
able to access the capital I want the
capital to work for me not just work
against me I want the ability to access
the capital in a reasonable manner that
does not require like
a full-blown examination every single
time that you want to unlock it right
right a lot of the impediments that we
we face I want the capital to be
available
based on uh asset and portfolio value
not based on acquisition numbers uh so
much of what we do is predicated on
finding
undervalued real estate
uh as it is currently visioned and we
optimize the real estate in its current
Vision as step one but step two is we
revision the asset right where others
may look uh we're doing a deal right now
um it's a shopping center 80 000 square
feet and others saw a tire shopping
center that had a lot of vacancies and
it had uh challenging leases
um and it had uh really no laddering at
all to the lease structure
we saw an asset that out positioned
Walmart on the main drag we saw an asset
that had another 15 to 20 000 square
feet of floor area available to expand
the center uh we saw an asset that had
some new infrastructure improvements
that were approved by the state about to
basically dump all of the traffic from
this main thoroughfare directly into our
Center we saw the only neighborhood
anchor right so it's let's reposition
those 80 000 square feet let's fix the
leash structure that's there let's find
the right tenants but then let's add
another 25 percent of gla to the asset
right now the the challenge is people
will look at that asset and say oh well
you you paid 2.7 million for it yeah uh
but based on cash flow when this is
stabilized it's worth 15. right so right
bridging that Gap making the capital
available to execute that business plan
um it becomes a challenge so right did I
get too far what I wanted what I want to
summarize from what you've said so well
is you need access to cash for whatever
you need and you need the value of that
asset where we're accessing it to grow
and be accessible in a predictable way
where you're not being constrained on
the growth because of some banks saying
that you can only get you know the you
know 90 percent of the acquisition value
or something like that is that a fair
summary of what you said so far spot on
awesome man yeah that's those are great
how about
um I'll I'll take one or two here how
about private uh where it cannot be
accessed in a lawsuit if someone sues us
and unfortunately if we're in the real
estate World we're going to need that
money off the radar of the courts uh
again we're just painting with a broad
brush we're just trying to be
um you know Wild and Free here man no
constraints Blue Ocean Thinking right
again the thought is the the concept of
this exercise is creative thoughts can
lead us down a different path if we only
ever think the 401K
or the self-directed IRA we're going to
be stuck in the dead end of our old
neurons so we need to be thinking
outside that box so privacy is another
one uh you mentioned collateralization I
think I heard you kind of get to that I
want to be able to use this asset as
collateral for leveraging into other
assets so I can multiply my wealth
without it collateralizing against me or
leveraging against me I want it to only
leverage in the right direction not the
wrong direction as we all learn leverage
Works in both ways so how about any
others any others that come to your mind
sure uh I I would certainly want there
to be reasonable interest rate controls
um I would want there to be the ability
to not not approach it in such a linear
way where real estate is it the markets
always report in a lagging manner but
because we're on the ground we see
everything three quarters ahead of
everybody right so uh back in 2000 late
2005 early 2006 we had our weekly
Roundup with the team and and you know
we were saying it's over like you know
that's not what being reported but we
saw the things that we saw and we knew
this was done so being able to take that
vision and execute on what we know is
happening although it's not necessarily
what they're saying ahead of the curve
right so I don't know how you how you
describe that but a more malleable
system that doesn't tie you to the
confines of what's being reported today
it allows you to trade off of the
indicators that you see if you pay
attention Mark it's all there for you
right yep they have a way of convoluting
the message and
um you know candidly folks don't have
the tools we're not given the financial
literacy tools that
kiyosaki's famous book Rich Dad Poor Dad
so eloquently captured
um you know where we're kind of taught
this and we're not taught it at all and
the elements that we are taught are
completely counter-intuitive right so we
want to be able to take that knowledge
and take this you know lifelong learner
approach and we're constantly adapting
and we're constantly finding these
Emerging Markets we've been on the
record for the better part of two
decades being ahead of market trends we
want to leverage that now into Financial
vehicles that offer us the freedom to
execute the business plan in real time
I'm hearing again the immense need for
freedom to access so that we can take
advantage of opportunities you know
banks are tremendously great at giving
us money when we don't need it and then
they love to take it away right when we
need it the most you know Mark Twain
said a banker is a fellow who will lend
you his umbrella when the sun shines and
wants it back as soon as it starts to
rain so what you're saying again I think
is just important whether we use real
estate or what I mean again I like to
get rid of all the nouns and just talk
about the verbs we've talked about
access
tax-free collateral realization freedom
of use predictable growth I'd also throw
in there uh guaranteed growth why not
yeah right let's let's throw guarantees
into this thing how about a legacy
creating event how about we talked about
privacy so as you can see this could be
a thought experiment that could last an
hour several days with folks but we've
just sort of scratched the surface
most people go their whole lives and
never even stop to think this one
question through which can be a
breakthrough conversation for a lot of
folks because when they start to line up
what their money is doing for them now
they look at their 401K it's not
tax-free it's not guaranteed there is no
access to the money you can't leave it
as a legacy it's not private basically
the exact opposite of everything we just
said yeah and I've talked to over a
thousand families across this country
almost all of them have a very similar
list that you and I just compiled there
now why is it that most Americans have
their money in things that are counter
to everything they want
now that that creates stress
that creates dissonance right when we
act against our thinking I do this all
the time I want a six pack of ABS but I
also love ice cream
so the key is waking up to our actions
are acting against our beliefs so if we
want Focus if we want sanity in our
financial lives realigning our
portfolios to match what we really want
is crucial
so that's the first step we have that
conversation then we get into some
particular we bring it down the ladder a
little bit and we get into what what is
out there what Financial tools exist in
the real world that are legal that can
do everything we just talked about and
most folks think it's not possible I
have found strategies that make all of
what we just said totally possible in
people's lives without it costing them
you know a team of attorneys and an arm
and a leg and legal fees and
um and it helps accelerate the real
estate deals and that's what I stumbled
across myself I was knee-deep I was
probably eyeballs deep in student loan
debt when I graduated college we had a
hundred and twenty thousand dollars of
student loan debt it was 2008 James
there was no plan for me to pay that off
which was the worst part of the whole
problem it wasn't the debt
it wasn't the recession it was that I
had no plan to pay it all off and
finally I kind of woke up to it when
they started calling me at dinner time
saying you need to pay us because back
then folks still had to pay student
loans off so we
go figure so we uh we got on to it and
we started doing the whole debt snowball
thing doing Dave Ramsey stuff all that
and that was fine that was good but I
started realizing a really empty feeling
in my stomach uh started to creep in and
I realized that I was losing the best
dollars of my life when you're I was in
my mid-20s when you're 26 7 years old
and you're throwing money into a hole
that's also money you'll never see grow
for you ever again yeah and that's the
most valuable dollar is the dollar you
have right now in your pocket that
you'll ever have again so I I stopped
paying off the debts and I said I need a
better way to be debt free I want to be
more than debt free
and around that time a mentor of mine a
professor from my college he came and
said well Mark let me tell you about
something called Bank on yourself
and it was a strategy he was just a
professor he had no skin in this game he
just he wanted me to know about it and
it's a strategy funny enough of all
things uses a little-known variation of
a 200 year old asset called dividend
paying whole life insurance
and I'd never well the little I had
heard about whole life I hated because
Dave Ramsey told me to hate it
and I didn't know why I was just told to
hate it and so I did so I was very
skeptical when I first heard about this
but the more I dug into it and the more
I started reading on this I was more and
more compelled that this could be not
only a strategy for me to pay off my
debts but could be the foundation of a
financial tool portfolio for a lot of my
of our clients so I started a financial
Firm Lake growth financial services and
we've helped clients a thousand plus
clients around the country set these up
ever since it's not all we do at our
firm and
and before I jump into all the like why
this tool was so compelling to me any
any experience with whole life or ever
seen it before
so my my biggest Financial regret

and that's a pretty bold statement
is that I did not invest more heavily in
My Whole Life policies 20 years ago I
was turned on to them and I did invest
what at the time felt like the maximum
amount right because to me there was
there was risk to it if you if you
missed the mark you kind of lose the
whole pot and I don't know how true that
was or is or or is today but I have over
time uh steadily increased them but
again because there's not a
um
a linear approach in real estate that
allows you to access reliable income
until you've arrived and you've got the
cash flowing assets but that that's
taken a decade for me to put together
but during that time it was a very scary
proposition and what prompted me into it
uh to Double Down onto it was in 2008

I thought I was positioned beautifully I
had a bunch of real estate that I owned
debt free I had taken helocs out on them
first position he locks not second and
third Mez debt none of that garbage and
I thought I was going to have access to
back then it was a lot of money it was a
million two a million three and the
banks shut them off zero balance and wow
to me that's when you do your damage
right there was fire sales and it was
all this opportunity the banks shut them
off would not release the liens even
though they wouldn't lend on these
helocs and I lost a whole cycle because
I didn't build up My Whole Life policies
at that point to a place where I could
have accessed that cash I didn't have a
financial advisor that explained to me
that you could actually pay the premiums
from dividends once you get to a certain
point I didn't know any of that there
was a it was an instrument that was
brought to me and I was like oh that
sounds good when I'm 60 I'll have access
to x amount of dollars and I could pull
it out cash free tax-free right right
but I didn't understand all the Nuance
of it so it is my single biggest regret
in my financial planning world that I
did not go heavier into that product
that's a an impressive statement I hope
everyone pauses and listens to that
again and again because that is a big
statement and I have honestly I've heard
people regret many things their mutual
funds they bought their the house that
they sold at the wrong time I have never
heard anyone say Mark I regret putting
too much into my whole life never heard
them say that too little Yeah well yeah
they usually say right yeah they say
they say I didn't put enough in just
like you did and
so for those that are not familiar with
it I'll quickly run down sounds like
you've got quite a bit of experience
with it I'll quickly run down how this
thing works what it is and what it isn't
because it's not a good fit for
everybody is is a dividend paying whole
life insurance policy generally we like
to encourage folks to get it from a
mutually owned insurance company usually
we want it to have dividends paying into
the paid up additions we also want to be
able to add more policy premiums through
paid up additions
we also wanted to have a non-direct
recognition loan all this vocabulary you
don't have to remember a piece of this
what I like to say is what does it help
us do first of all it grows on a
guaranteed basis every single year
outside of the stock market outside a
real estate market guaranteed growth
usually keeps up with inflation nothing
crazy it's going to improve as we go
through higher inflation rates like
we're going through right now these
policies will get better over time
second it's accessible money access for
whatever we need there's no required uh
forms to fill out you don't have to get
a credit check you know it's just your
money you have access to it there's no
prohibited transactions it's your money
and there's no taxes due if we've
designed it properly we can at least put
it in so that there's no taxes due when
we access the money so it's like an
unlimited Roth IRA in that regard third
it is life insurance so we'll always
leave our family more than we've saved
in the contract again guaranteed that's
just how Insurance works except for
being a famous artist I can't think of
any other way to just automatically be
leaving my family a giant pile of money
like that automatically when I pass away
and then finally the fourth is you can
borrow against it you can become your
own source of financing and before we
hit record James I said the biggest
specialization if I have one is helping
people take back control of the banking
function in their life I believe that if
you control the banking function in your
life you'll win
whoever sits behind the Banker's desk in
your life is going to win the money game
I don't care what you made in your
mutual funds last year I don't care how
your crypto is doing if you're not in
control of the banking function then you
will ultimately be under their thumb but
if you can sit behind the Banker's desk
then you'll control the environment in
which your money lives and you'll win by
default so you can borrow against the
life insurance cash values and if it's
designed this way this we call it Bank
on yourself for short if it's designed
the bank on yourself way the policy will
keep on earning interest and dividends
as if you had not touched the money
so if I've got a hundred thousand
dollars of cash value
and let's say I borrow out 80 grand to
go to go get a real estate deal
my policy will still earn interest on
the full one hundred thousand dollars as
if I hadn't touched a dime of the money
even on the capital I borrowed it
continues to grow so to me this
overcomes opportunity cost and it
defeats the problem of always having to
break compound growth to spend money now
I can buy my asset and it still earns
interest for me and my policies if I
hadn't you know used the cash
so at what point mark is there a point
where it's too late to start
this process with whole life
well we just talked to a guy he's 83
years Young
and he's getting started
now he is a different kind of caliber
guy he's a guy that knows that every day
counts
and he's still in reasonably good health
but even if you're you know 85 you can
still be approved for the policy now if
folks have got some major health issues
we may not be able to get insurance on
them
but they can still own the policy I'll
give you a quick story I had a gentleman
who had just had open heart surgery when
I met him he loved this concept of Bank
on yourself
so we applied for life insurance on his
wife and his adult children and his
grandchildren he's the owner of 12
policies he owns all the cash in those
policies he uses them for borrowing and
investing in this real estate he has
several rental properties what he does
is he's the owner but he's not the
insured and when he passes away he'll
leave the policies as a gift to his
spouse
so
there's a a process and again correct me
if I'm wrong here but there's a process
of building up through the premiums this
cash value right that that you can
access when you need it
the process as I understood it took
decades to get to a point where it was
sizable absent of course having the
ability to just write the check for
massive amounts out of the gate which if
you had that ability this isn't as much
of a need
so how do you bridge that Gap well some
people first of all
the money in the policy is much more
efficient than what you just described
if it was engineered properly you know
you can buy a Model T car I'm sure today
somewhere they'll still sell you one
somewhere or at least something from the
1970s that can get you from A to B you
know an old you know clunker
or you can get a super efficient you
know sports car
both are cars
just like both our whole life insurance
but if it's engineered the bank on
yourself way generally speaking we'll
cut the commissions and the insurance
expenses down somewhere between 60 and
75 percent of the commissions are cut
out of how we design these policies that
floods the policy with a lot more
capital and cash on day one
I've seen policies that have zero cash
value in the first year
uh and really the first several years
you can't touch the money and it might
take 20 years for it to break even like
you said generally I just got off the
phone with someone I'm looking at his
numbers right here uh he's putting in 66
000 of premium in the first year he'll
have 43 000 of cash value right away and
a 2.2 million dollar death benefit now
that still cost him a little money
didn't it
still cost him a little bit of money but
by year five he's only putting he's he's
putting in a little less every year but
he's now got over three hundred thousand
dollars in capital in year five and all
along the way even in the first year
he'd still have 43 000 of money he could
be accessing and what could you do with
43 Grand if you're just getting started
maybe that's a down payment on a house
you know even in the first 30 days of
this policy he's got a big bucket of
money he can use I always tell folks
though this is not a get rich quick
scheme uh just if you need every last
penny right now and don't want your
money to grow in the future just get a
savings account you know but this guy
he's 34.
by the time he stops funding it he's 70
as he wants to he could have stopped
five six years in but he decided he
wanted to fund this thing well into his
60s by that point he's got 4.5 million
dollars of cash value
4.5 million dollars and his death
benefits 8.1 million bucks he's able to
pull out at that point 230 000 a year of
tax-free money
for the next 25 years
which is way more than he paid in
and he still has a six hundred thousand
dollar death benefit when he passes away
and that is a very efficient way to just
store wealth remember this is just this
is not locking the money up
what I just described is you know just
the policy itself but James what about
all the rental properties he bought what
about all the syndication deals he did
borrowing against this Capital means
he's able to do so much more than just
saving money in a whole life policy
that's what it is but it's not it's it's
it's more like a um a reserve for your
opportunities and emergencies that you
have in life what was the cash value at
70. 4.5 million dollars so against
essentially
2.4 2.5 million dollar investment
uh
2.2.2 yep okay he'll have 4.5
uh of
tax free as you pull the money out
available at the age 70. yep and the
death benefit on the policy was what
well at that point it was 8.1 million
dollars also income tax free
and over his retirement years from 71 to
95 he pulls out 230 000 a year which my
math here says that's a total withdrawn
and enjoyed
5.75 million dollars remember he did put
in what was it 2.2 million
but he enjoyed 5.7 million and he still
has another 700 Grand to leave his
family when he's 95. wow now where was
Wall Street with any of that
incredible right it is incredible and
that does not count the hopefully he
buys 20 different syndication deals or
rental properties or multi-families or
whatever else he wants to do with that
money which is not even being shown here
I view my policies less as an investment
because they're not they're just an
insurance contract but if we can design
it as efficiently as I just described
for that gentleman there
then it's more like a garage for our
money the my car does not stay in my
garage forever I usually take it out and
go go places with it I'll go invest or
I'll go on a family trip but I'm always
bringing my car back to my garage and
that's kind of how these policies are
they're regularly being used and then
put the money back use the money put the
money back and it brings a lot of Sanity
when we have that kind of focus with our
cash so if I could just bring that down
here and kind of connect a little bit
for the audience
the idea folks and the way that I've
used the policy not nearly to its
potential
is if you're in real estate and you're
you're putting this money away you've
got the death benefit God forbid
anything happens but you get to year
three four five you have several hundred
thousand dollars in this scenario that
you're able to take out as cash you use
that money as a down payment you get
your traditional debt for the balance of
the deal as you normally would you
execute the business plan you either
liquidate or through whatever liquidity
event your refinance you take that
initial cash out you put it back into
your whole life policy you own the asset
or you own the uh or you've taken the
profits above your debt service when you
have that liquidity event and you either
keep the cash flow or you pull that cash
out and you go do the next deal it is a
remarkable vehicle and as we're talking
here I'm wondering why I haven't gone
back and Revisited this and and really
leverage these things
um in a much more efficient way but you
it
what what people forget I think Mark is
time goes by real fast man and you know
I've got some policies now
for 24 or 25 years and that money
accumulates and you do wake up 10 years
later and go oh you know so when that
2008 incident happens or you know what
we've gone through over the last couple
of years and the banks are are shutting
the spigots off you have
um and it's essentially unfettered
access my experiences I've put in
requisitions within two or three days
you've got the money there's no sources
and uses there's none of that it's your
cash the money comes it goes into your
bank is cash it goes on your statement
you go execute your business deal and
you do have freedom and access to that
money and it time goes by Boy and it
goes by quick
um and I did a similar thing as my
children were born I started them with
policies straight away awesome my wife
has policy but I I have not uh used this
vehicle nearly to its potential so is
there an opportunity for folks that have
some insurance in place already to move
that portfolio over to someone that's a
bit more of a free thinker like you are
that's going to give
unfortunately in the business uh you
come against a lot of cookie cutter
Solutions and real estate is anything
but cookie cutter right right right yeah
so if I wanted to move my portfolio over
do you have the ability to do that or is
it locked in from from the initial
investment how does that work well yeah
every person is different of course but
yes to answer your question we uh we
regularly review people's existing life
insurance at our firm and if it's in
great shape we don't mess with it but
we'll still help give you advice
feedback guidance on it if we think we
can help improve your situation there's
something known as a 1035 Exchange which
Probably sounds familiar to you it's
just like real estate 1031s except it's
life insurance we just simply do a
tax-free transfer from one company one
policy to the other you get to keep all
of your equity in the new contract on
day one
and that money is now liquid and built
properly into a true Bank on yourself
design policy a lot of people have come
to me and said Mark I think I might have
one of these you know my agent my guy my
gal you know they set this up for me X
years ago and I'll look at it and it's
unfortunately it's riddled with fees
commissions might be tied to an
increasing cost to it like a universal
life contract I don't recommend uh folks
use universal life or variable life
insurance for these particular purposes
they have their own place but they are
not designed for banking so yeah if
they're designed improperly we'll do a
1035 Exchange and get that money rolled
into something more proper for them
again if it's in great shape though
we'll just you know we'll wish you the
best or we'll service it help you out
make sure that you're getting good
guidance you know and and mentoring and
strategic thought on how you can use
your policies whether it's with us or
with someone else for Real Estate or
anything else
so I'm curious personally
was it the experience back in 2008 that
set you down this path of you know
Financial Services is that what you went
to school for has that always been your
passion or how did that come about yeah
it's a fun story and I'll keep it brief
um but I was actually going to school
for something totally different I was in
um I was going through a masters of
divinity degree which is like Theology
and church leadership I never thought
I'd be like leading a big church that
wasn't really my calling uh I just
jokingly tell folks I I really love the
book of numbers so I started getting
into numbers after
um graduating but it was actually the
Great Recession that clued me in that
money was a big missing piece to my own
theology but also just my life man I
didn't know anything about this money
stuff I just didn't pay attention to it
much
so I became financially conscious I
guess when I graduated a master's degree
and you think that a master's degree
they'd finally get around to talking
about budgeting
or money management but I never really
had that experience and or I'd never
paid attention to it they may have been
teaching but I just wasn't listening
so it was it was the pain of all that
debt that got me clued in on this money
thing uh which is a fine way to wake up
I suppose if if you're being forced to
wake up a world wide recession
unemployed my personal unemployment and
all that debt was like a tornado of
trouble that got me very much aware that
I needed to pay attention to this money
thing
and that's what got me focused no I was
working at the time for a CPA and the
CPA was having those phone calls hey Mr
client I know you're 63 but I've been
putting your money in a in the market
for the last 25 years and you can't
retire anymore
yikes you know I just lost you a 30-year
money yikes I didn't want to ever have
that call
and so I almost got out of the industry
the financial industry until I stumbled
across this strategy which guaranteed
that there would never be a lost year or
lost decade for my clients or myself
ever again which is you know what we
eventually going to the well Pamela
Yellen is the founder and and she coined
the phrase Bank on yourself but that's
why I was able to you know really
transition to that as our primary
objective for clients is to make sure
that they never took unnecessary risks
and they never gave I never had to make
that phone call to them saying hey man I
just lost you all this money I never
wanted to make that call so that's sort
of my story and how I came through from
debt Zone to being a certified financial
planner and working with clients all
around the country
could you could you talk a little bit
Mark about that guarantee that you're
talking about you know there was a
period of time long period of time where
bear Stearns was a guarantee right
um these
these policies pay dividends based on
what what is the guarantee what's the
backstop I think it'd be helpful if the
audience understood that yeah well
that's a great question and bear Stearns
being one example
there was never a written guarantee
contractual obligation for them to do
anything you know they felt safe but
feelings aren't a contract uh just ask
any person who's dating somebody unless
they're married there's no contract
right so um
there is a contractual guarantee that
your money will grow and increase in
value every single year for as long as
you have that contract now folks say
well Mark how the heck is that possible
and what is ultimately guaranteed in
life I mean I suppose if you really push
me nothing is ultimately guaranteed
right there's nuclear war whatever we're
all done that's fine
use your policy as firewood
but if it's if it's a financial
guarantee from a unilateral contract
then we can't really get out of that
guarantee I mean the insurance company
that is can't get out of that guarantee
they wrote the contract so how are they
doing this the best answer I can tell
folks over a podcast obviously we'd look
at the numbers but you want to make sure
you're working with a company that's
been around a long time and has been
paying that guarantee
I generally only work with companies
that have been around for over 100 years
and have met their guarantees and
obligations for that period of time and
have thrown dividends on top of that
guarantee
so the the guarantee and I'll keep this
again as simple and as quick as I can
the guarantee is simply you getting a
piece of your death benefit while you're
still alive
the insurance company has this giant
pool of money let's call it the pool
it's a general fund where they have to
keep a lot of that money liquid
meaning like in cash in case I croak
today
in fact if I've got a fifty thousand
dollar cash value and a 500 000 death
benefit they need to keep something
closer to that five hundred thousand
dollars in cash
in case I croak today and give it to my
family within a week or two so far does
that make sense absolutely all right so
if I don't die and I'm hoping not to by
the way if I don't die this year I'm a
year older now I'm a little bit more
likely to croak next year
so they're going to give me a little bit
more money incentivizing me to go away
it's like a game of chicken with the
insurance company so instead of a 50 000
cash value they're guaranteeing me sixty
thousand for example that sixty thousand
represents my cash surrender value if I
was to surrender this thing and just
walk away
instead of paying my family 500 Grand
they'd give me 60 Grand a day so that's
the incentive they're raising the stakes
as long as I live they're going to keep
raising the stakes because they've got
my death benefit on their books it's a
guarantee right it's not like they're
they didn't find some magical unicorn
bond out there paying some guaranteed
interest no they they've got my death
benefit on the books and if I live today
and make it to my next birthday they're
going to increase my cash value on a
guaranteed basis to to eventually equal
my death benefit by the time I'm you
know 100 years old or 120 years old so
that's the guarantee if they do better
than the worst case scenario in their
portfolio bonds mortgages then they'll
throw dividends on top of that guarantee
and uh so hopefully I didn't confuse
everybody but that's sort of the inter
machinations of how these policies grow
so they're essentially backstopped by
companies that you're as a professional
vetting that have hit their dividends
and hit their marks for 100 plus years
I can tell you that was one of the big
reservations for me
um and having been through
three Cycles now
um where gosh the market was Rife with
uncertainty and and people missing the
marks uh I could say that
you know knock on wood right yeah our
policies have endured unscathed and they
have in fact at their marks every time
so well I'll just add on to that yes I
think the um the the pieces that's the
that's the how they do it but the the
why is they'd be out of business if they
weren't keeping their guarantee and you
do want to work with companies that have
significant third parties reviewing
their books auditing them regularly
check being checked out and giving you a
plus ratings from Better Business Bureau
from am best from Fitch standard and
poor all the third party rating agencies
make sure you're doing your due
diligence or you could just work with an
advisor who specializes in this to pick
the right companies for you for sure and
that's obviously part of the diligence
you're doing right exactly vetting that
out and making sure our money is going
to the the best bet that's right in in
2008 there were I think if I remember
right 437 banks that went bankrupt in
2008 437 entire Banks not just the
branch the whole Bank
no life insurance companies that were
mutually owned went bankrupt in that
year or the next year
there was one little company that wasn't
mutually owned that went bankrupt and
the state insurance commissioner just
stepped in and the company policy
policies just went to another company so
instead of it being XYZ insurance I
think it was a Lincoln Memorial went out
of business one company instead of 437
and the one little company that went
belly up I wouldn't have worked with
anyway because they were only around for
20 years and you know they're not one of
the companies I'd recommend to do Bank
on yourself so you do you're right you
do need to pick wisely or work with a
bank on yourself professional like
myself or one of my colleagues to make
sure we're picking the right company
so I'm like you're you've got an
extensive resume or a three-time number
one best-selling author you've got
amazing content
um
where do where do people start give the
audience like the first steps if they
want to start taking control of their
financial future they want to start
leveraging their their money in in the
most appropriate and best way for them
um often so many of us work so hard
on
getting to the point where you're
actually acquiring the wealth that we
fail miserably in putting it to work for
us if it's not a generational thing and
you don't come from a lineage of
um this is the way it's done in the
family which we didn't you know many of
us had very humble beginnings uh we we
don't have that pedigree
um where do we start Mark where does
someone you know
literally what what's the Adam and Eve
moment what do they do to get to a
professional like you well you know
thank you and you're right I think there
is kind of a well this is sort of a cold
splash of water how do we even get
started with something like this the
very first thing to do is just to pause
and think what do I want my money doing
for me that's free takes you five
minutes at least
make that little list everything we've
talked about can be done through a bank
on yourself policy as I've designed it
the next thing you'd want to do is find
an advisor a bank on yourself
professional there's there are 400 000
life insurance agents in the country
James and as you know not all of them
just like there are hundreds of
thousands of real estate agents or
whatever you may not want to work with
just any agent let's just say it that
way so finding a professional who knows
this as their specialty and makes it
part of what they do and incorporates it
into the real estate
portfolio that you want to have is so
important it's it's like can can't
overemphasize it's like getting into an
elevator that wasn't engineered properly
you don't want to do that
so reach out I'd be happy to work with
folks I can help with this particular
strategy
I think we're pretty good at it here at
our firm the best website is
kickstartwithmark.com that's Kickstart
with Mark with a k.com uh reach out and
we'll do a 15-minute phone strategy
session it's free we'll go through your
conversations your questions see if this
tool or other tools are a right fit for
you that's kickstartwithmark.com
uh mark this was a a wonderful episode
it's it's exactly what you described it
is kind of that cold water splash in the
face
um moment that many of us need to work
on the back end you know you get so busy
working in the business you often forget
to work on the business never mind
working on the back end of the portfolio
um I really appreciate the time this is
again folks something that uh I wish I
spent more time and energy and did my
diligence earlier on in my career and
and really put a lot more intention and
effort into this process and it's
something that I'm going through now and
I've kind of kicked the can down the
road again because it's uh not something
that um very proficient in it's not
something that I understand well
um it's not my discipline but that's why
they've got the mark Willis's of the
world right so I really do appreciate it
uh folks I would encourage you and urge
you to go through that exercise think
about how you can put your money to work
for you uh in a far more efficient way
the stack the the the deck is stacked
against us it always has been but we
live in a world and in an age now where
through through means like this you can
access
professionals you can access information
and you really can take your portfolio
and optimize it from top to bottom not
just the real estate which is what we've
specialized in but the the rewards from
that real estate you know we owe it to
ourselves we owe it to our families to
to complete that Circle uh Mark Willis
again really appreciate the time this
was a great episode thank you thank you
James appreciate all the help absolutely
as always everyone please stay safe