Wall Street and Private Real Estate Investing - Duane Fossyl - (BWL POD #0015)

In today's episode I have a casual conversation with my friend Dwayne Fossil, he and his wife had a unique background, she is a CPA, he comes from Wall Street in the financial services industry and

private

banking, and they are both active

real

estate

investors . I had a lot of Fun. I hope you enjoy it and thanks for listening. Well, this is my friend Dwayne Fossil. Well hello, this shows who you are, your background and what you know how to get to this point. My name is Dwayne. It's a pleasure to be here with you, James. I appreciate it, I have been in banking and financial services for over 20 years.

I'm 45 now so I only say 20+ years instead because I lose count after a while, you don't look a day later. 37 I'm just saying thank you, so I started in the investment world with a couple of companies and when I finally got into banking and the banking sector and

private

banking, commercial banking and the last role that I had within the banking world. As a mortgage lender in the residential sector, I have seen both sides of the credit equation. I have been quite involved in banking so for me numbers were always something interesting and then you know when you are in the banking world you are fulfilling your role for that job, it is not up to you to have a macro view, it is up to you to do your work within that confined space, so I guess very quickly in my opinion. wife she has also been a CPA for over 20 years and all with the same company so she is the hardest worker I know so she has always been in that company and she does very well in our family so that's it That's who we are and we may be the most boring family in the universe, but we are both interested in numbers.

I've always had a kind of macro view of things and that's why I like the big picture. things and then we're a good team because she's more of a day-to-day person, so yeah, in that sense, sorry, go ahead, no, it's not good, I was going to say, so it just gives you that background of my mentality and where my interests are and where my wife's interests are, you know we always want to improve and do well and we have always believed that we should stay in control of our finances, our money and try to do better for ourselves. and that's why I'm always trying to learn.

I find it interesting to learn. No, no, no, I don't remember the last time I read a fiction book, but I read nonfiction books almost every day, at least a few pages are amazing about what you can learn with certain video apps like YouTube and, if you try to educate yourself better sometimes it's hard to filter out the noise but at some point I had it, it wasn't through you stream your YouTube podcasts it was through someone else and I couldn't tell you who it is and I heard the name of the book becoming on your own banker, so I started looking into it a little more about Jenna Rabbit Houghton. rabbit hole, right, you can tend to do any number of nuanced ways, especially in the financial world, but a lot of times you know that if you use your common sense you'll get to a point where you'll say yeah, that's not

real

ly going to work. someone or that's something I need to look into a little bit more so you can separate the weak from the Shak pretty quickly if you know if you're trying I think, but you know your background is in financial services, I mean, what? can we go a little?

Know? Expand that little word. What I remember is that you were a wholesaler for the mutual fund industry at one point. Is that so? Or wasn't exactly a wholesaler to have a little color in that, maybe for people who know, a wholesaler is hired by a mutual fund company to look for institutional clients to sell their mutual fund work, it could be finding a retail price to sell your mutual funds. I didn't do that, but I worked with those people in the private wealth management space and before that, I actually worked for a mutual fund services company, so I'm very aware of all the fees of a typical mutual fund , you already know.

I'm aware that I don't know if everyone knows how many fees there are on the typical, we'll call it stock mutual fund, stock mutual funds, stock mutual funds, the fund that invests primarily in stocks, you could have hybrid funds. It doesn't matter, they all have very high rates and many of those rates are not required by law to be disclosed in the same place. Well, I mean, they can be on the front end of the prospectus that you, the investor. receive annually, they may be in the quarterly statements, the annual statements and then your esoteric summer rates, but they are in bed, so you know, they are integrated, so when you receive your statement, your statement 401k account. or wherever you're invested, you just look at your balances and you know that most people have to take on as much responsibility as they should because they assume that everything is fair and everything goes up and up within that. world, so typical people could invest in a 401k if they have surplus funds to do so, those 401ks weren't designed for the average person anyway, but that's what I'll say we get involved in as a society, as you know, pensions and the things in our car fall by the wayside, don't they, you have to save more, put away your own money and make that decision, and the companies make that decision for you in the first week, when you sign all the documents of human resources, them.

Well, if you want to automatically sign up, oh, now it's being automated, yeah, yeah, now you have to opt out, although, right, it's not opt ​​out right, and then you're automatically signed up on the target date. of funds, which may have the high level. speeds of everything very documentary and yes, no, there is no doubt about many things. I should say that you know that many of the fees are fully disclosed up front, but we are referencing and talking about some of the fees that might not be fully disclosed easily. for the right of the investor, but then why do we want you to joke?

Most people who invest in a 401k plan are not reading the prospectus of the mutual fund they are

investing

in, they will see which one is the right one. three five and ten year returns that are misleading in themselves and I guess this all goes back to your original thought or my original thought, taking more responsibility for your money and as I was researching the process of becoming your own banker, it wasn't both a hope. or a wish or desire to get a return on my money was to take control of my money and use it become your own banker think about that phrase become your own banker if you become your own banker if it is possible that you can do that first What I do What I thought is, oh, I'm going to need a lot of money to do that.

You know I'm going to need capital and you do need capital, but it's really a concept that I had to learn. I was not here. I've been in financial services for over 20 years and had never heard that term until about a year ago when I started accidentally encountering it on my own, and once I read Nelson Nelson Nash's book three or four times, I started a You understand the concepts and I don't have them all yet, but it's an eye-opener to controlling your own money in your own process and the various phrases that it says in there, every time you read the book, there are a couple more phrases that you would say, well, light bulb, you know, and it was, it was something that I really enjoyed because I really wanted to become my own banker and that meant I had to get serious about learning more and more about You don't know and that's when we talked, but then you helped me educating myself on some of those details and we're excited, so we started implementing this process last year, so you're swimming against the current. and go against the grain, go against the norm, yeah, you know, breaking one can't get you with your gun strap, yeah, if you say this phrase to someone, they won't know what you're talking about, right, no, yeah you think about that. with her experience in the financial world in Allison's experience as a certified public accountant and never heard the phrase become your own banker until a year ago, I mean, Wall Street doesn't know about this, mutual fund companies don't know about this the commercial banks don't know about this well there's a line about the cities they don't know about the banks they know it well because what is that phrase Boley my own life insurance absolutely the bank executives know it because if you look at their balance sheets maybe they are the most of their balance sheets and I don't know, but I'm speculating, but I had read, seen and heard, etc., the banks themselves buy life insurance, but they don't.

Don't teach your employees that there is no such thing, I don't know of any B-schools in business schools that teach this to their students, you certainly won't learn it in high school, in high school, you won't go. To learn at the college level, you'll learn it when you start trying to delve into this stuff and you'll only learn it if you stumble upon it because I don't think I'll go to a gathering of my friends. I probably won't mention this. I'm on this, you'll learn if there's anything else if you're asked about it, maybe it's true, but it's a topic that's sometimes pretty awkward to bring up, you know, with your friends and family. and since no one wants to be the odd one out, you know you don't want to be the only one in the room talking about something that no one knows and that everyone already knows or has heard all their lives about insurance in the worst place in the world to invest money, so They come from a preconceived idea, an insurance of failure, making it a difficult and uncomfortable conversation.

I mean, unless you're just trying to activate people, then it can be fun to bring up, there are several obstacles to I'm overcoming becoming your own banker and one is what does that mean, so you have to explain that you have to explain. Well what vehicle should I use to become my own banker, should I use a savings account or a checking account or a mutual fund or gold or what should I use? There is life insurance. Well, I've heard of life insurance. A lot of people think you know term life insurance is the cheapest and it's the best name for me.

They don't teach you that when you listen all your life. I'm sure what they teach you has a connotation with getting away from it being expensive it's a scam because certain people say it's not the time so it gets into your head and that kind of common lexicon so when I say you have to learn About To become your own banker, you have to learn what type of vehicle you will want to use to become your own banker, because you can become your own banker. I guess with a checking account, if you really want it, it's not the most efficient.

Can you do it with a mutual fund? It's not the best or ideal, but whole life insurance structured for all of this like you say and I could steal a couple of sentences that you said, but that's no, that's what you need to know. You have to know about high cash value life insurance that pays dividends and interest, that's what you'll want to use for these things and once you realize that you can borrow from yourself and use this whole life policy depending your needs. as your primary vehicle that comes with a death benefit, which is an important part, but then you forget about it when you start thinking about how to use this on a day-to-day basis, but you shouldn't know that.

It should always be back there, here mine. I have to say I'm going to go on and on, but you know, I mean, I have to say how do you get your friends there? I mean, you give them or sell them. by Nelson first, but becoming your own banker, that's my right, you know, I'm just saying that education is hard because we really have to unlearn and adjust, that's actually more challenging than learning sometimes, but I think everyone, if this idea Sam, the entry of this concept or text them, you should read a 92 page book, just take it for yourself and then travel down the rabbit hole to where you want to go and the people you know, like I said before , with which they can carry out banking operations. anything margin account farm equipment CD mattress money gold you weak banking as a process is a movement of money it just so happens that dividend paying whole life insurance has all the features that are required for a personal banking system in Nelson, right, really discovered that everyone knows, I mean the idea of ​​cash value and the ability to secure that cash value is over 200 years old.

Nelson, you know, brought a scale to that idea, you know, scale, so I appreciate the work that he did, certainly, but yeah. I know that only you have to want to do this you have to want to educate yourself. I've probably spent I don't know how many hours trying to learn about this, going over what I've tried to learn about this and then you just and then you have to implement it, but the worst thing that can happen to you when you implement all of this is that you're saving more money, you just you're saving it, you're saving it on this vehicle here as opposed to that vehicle over there, so it's something that I would like you to know that continues and will continue to build over time and it takes time and discipline and it takesa lot, a lot of willpower to achieve it. you yourself go ahead and set up and it's a part, it's not difficult, but you're just doing all these things in life and if you're 45 and you have 2.3 kids and a house and all these things and a family you know you have a lot of important things to do, so you have to do, you have to educate yourself to the point where you know that you can't just invest in a 401k, you can't just have a bank.

Mind you, you can't just get a car loan at a bank, you can't just get a mortgage at a bank, if you could figure out how to become a lot more efficient than you currently are, you'd realize you need to do it. down this path and that's how adamant I am about it and I just, like I said, I just started using this in the past, you know here and I'm excited about the opportunities for it, you can take advantage of your opportunities. in the stock market just throw your money at

wall

street

and so on and then hope for the best, that's what most people do, it's too much work worrying about your money for most people, I'm sure you mentioned the word , listen, no, no, I mean.

I agree with you, it's not your opinion so it's invalid. I don't completely agree with you, most people don't have proper discipline, so you have to have discipline, but you have to have discipline in anything worth doing well. I did it. You know you mentioned savings? I just read or just looked at Fred's review of a chart of the Fed's economic data from st. Louis and showed that the average savings rate in America today is 6.2 and I'm reviewing it with young Ryan Griggs. I don't like it, right? I don't even believe those numbers. No, I don't think the average savings rate today is six point two, although that's what it was, you know, that's what the Federal Reserve says, but you mentioned savings right, most people don't have discipline, most people don't have savings you said before the worst thing that could happen is you're saving money and you have a death benefit so I agree with your opinions and appreciate you sharing them and then I want to back it up a little bit your wife is an established and experienced chartered accountant with a major firm. right, you have banking in the financial background for over 20 years in that year, which is commendable, you know, as far as you know, not staying within that construct, you know, looking forward, thinking outside of the box, true, but when he moved. of Finance, you guys moved into real

estate

and that's right, that's right, could you talk a little bit about that because what you've done, what you've done with the innovative concept, you know, properly structured life insurance.

I mean, and I know we're new, but you know, just expand how you see the integration, you know beyond cars and beyond retirement, but with what you're currently doing because you're all very active, so yeah , spend some time on that. Yes, you mentioned Allison. I think as a family we know that if you stop and think about your world, I think no matter who you are, you are number one in spending, taxes for everyone, half of every dollar you have will go to taxes. they kind of shape local, state and federal sales and all these embedded taxes and we talk about embedded, oh my gosh, that's deeply embedded so it's probably more like 60 70 percent.

I think you become more like more like around once read more like around August 1st or August 15th that's the date after which you start making money until August now it used to be May or something like that until then you're working in the government now, well now we're in August and that's what taxes impose as they are now, yeah, without government benefits, right, you're working for the government without the benefits, that's right, yeah, I got it, let me tell you that when we go through the airports, you know, at the TSA now They've all been federalized and I can't help but think every time God bless them.

You know, I love the freedom of travel, what we have in America, and I love America, it's like the only thing better than welfare is a government. I work with benefits so yeah I'm just saying we work for the government we don't even get benefits. I think that, apart from roads and borders, I understand wars. I mean, I understand that for the listener there is a certain amount. of smaller government benefits that you know are useful and that we need and there are a lot of them that most of us probably don't do well, I mean, they take you off track that we can spend, we could spend three hours on that and we couldn't. wait, how can we do it, we can do a couple, yeah, you're the type of yeah, you know, I love all of our clients and you know, absolutely, we could do two or three podcasts, we can go right down the rabbit hole.

You know, yeah, it's just the point of connecting the house and mentioning taxes, mentioning your world, but really for the general public and I'm really just looking at our family, we know that the biggest expense we're going to have is their taxes, so these life insurance. Policies helped tremendously with that, so you know, along with compound interest, etc., but how do we integrate? Going back to your question, how do we integrate with real estate? Yeah, so I left the banking world to invest in real estate and stuff, and don't you know that our main focus is

investing

in apartment complexes?

That's what we do as a family and that's it. It's just a set of skills. You know, you learn from other people with a group or a group of educators and mentors, and it's a great A group of anyone can be a part of that group, but again it's about discipline and self-motivation to educate yourself on this and I think a big mantra of that group is real estate is not hard people are right so if you can learn the skill set and do what these type of educators and mentors in this group is a tremendous group and you learned quite a bit if you can do what they say and just implement these disciplines, you can be disciplined and you can invest in these things and be successful, so how do you implement becoming your own banker by investing in apartments or, I guess, investing in anything that you can use because you can borrow yourself here from this lifetime policy on which We're still getting interesting dividends because they're the insurance company, as it turns out if it's the right kind, we'll put a lien on your money, but they'll certainly lend you their money, so you'll think they're your money and it's hard for you to get a loan from your own policy, it takes a signature in about three, four or five days and you have lunch, so I say it sarcastically, it says I'm coming from the bank and I come from the banking world. where every year I always say about ten more pages are added to those mortgage loans, not to the applications, but to the closing documents.

I mean, they're that thick, oh yeah, no, wait and when you get three or four investment properties now you're going to have to cough. some two years pro forma k tax returns, all of that has to be up to date so you know the following and you better have two years of two years of overall cash flow positive real estate before they use it for your income or not You don't even show it to them or anything like that and you got it and you have to have proof of it so you can take if you're going to invest in something that you can, you can look at it as your own business.

Know that when you invest in real estate, you should see it as your home business, it is a business, whether you are owned by a single family or invest in a commercial building or if you invest in the universe and apartments, you could also invest in the someone. a new business or your own new business, you know his fund of mischief, yes, the banker can do whatever he wants when you have access to capital to capitalize them and I think that is a benefit or even a discipline that comes along with infinity. banking concept over time when you have access to capital and easy access to capital, those types of puts help you hone your skills, you, the investor, hone your skills in evaluating investments, think about this for a moment, if my capital is here and it is working. very well where it is and I had access to it.

You know, any investment appears because capital attracts opportunities, so all these opportunities appear, so I have the ability to hone my skills and examine an opportunity correctly if capital cannot do better. at that opportunity from where you are currently, I'm not going to take advantage of that quote unquote air quotes opportunity, does that make sense? You have to be educated enough to understand an investment opportunity and will you educate yourself? If you're going to fund that on your own, no, and I don't know if I heard this either or that's how I think in terms of when you have capital that you can invest in opportunities, you're going to run out. money before you run out of investment opportunities there are always opportunities when you have capital how do you position yourself to take advantage of this well once you do it once you know?

I've heard I've seen and heard people who could finance sell finance Okay, so in theory I could take money and borrow from my policy and I could lend it to someone who will use it to buy a house. Hard money Linden, huh? Private loans, right? Do you really want to do that? I don't know how to do a criminal credit check on that person or is it a friend, is it family. I don't know, I don't know what he wants to do with it, but he's going to take further steps to examine that situation because he wants it back.

It depends on his investment, but he will run out of money before he runs out of opportunities, so what I have implemented for us and our family is that we have to take steps to fund and capitalize it. It simply means putting money into our life insurance policies to have the ability to take advantage of these investment opportunities. The investment opportunity can be anything, but if we do not have that capital, we will not be able to invest in that opportunity. You will be stuck at the mercy of the outside lender, right, right, please be right, that's right, you will be at the mercy of the outside lender and no one reads that fine little piece of writing that you, no one that sees this reads that paperwork that a bank.

You have your son because most people get nervous when they sign loan documents and just want to go through everything, but anyway, having been told by that whole life insurance company that you're borrowing money from yourself, it's a single page document or you just do a signature and you have your money in two days or a week or two weeks and it's yours and you decide what schedule you pay it back for the most part and then you know I don't see any better opportunity, but you have You have to have the discipline to capitalize on your own system, your own bank, treat it like a business, you have to treat your own family budget like a business, so that's not going to be very good either, so you can be indifferent about it. and you find yourself with the wrong kind of debt or you can treat your own family budget like a business and then create opportunities for yourself because word of mouth is powerful once you are involved in opportunities, people find you to create opportunities, so yes, that's how it is.

It's how we integrate it with real estate, we wait for the right opportunities and I don't know if today is the right day to invest in real estate. I don't know what type of real estate is the right opportunity for most people. we just know what's right for us, what we like and we look at the big picture, we look at the small picture, we look at the people we're investing with, you can use these policies for that kind of thing, for anything you want. right, I like to think and not oversimplify, but you know we all have cash flows, right, we all have cash flows of some kind, if you don't know, God bless you, you should do something to change that, okay, but most of us have cash. flows and the idea is to put a properly structured life insurance policy right in the middle of those cash flows because in the example, you know in the case of all of you you are investing in those apartments anyway, no, anyway ways they are doing it.

So if we put the life insurance policy right in between that cash flow, you know your savings are checking out or wherever you're getting the money to make the investment, the investments have a return which is a cash flow coming in. and it comes out correctly. and all we're trying to do is put in a life insurance policy or several or whatever makes sense and put them below that cash flow and if you know, it's a slow start, it's a slow process, there's loss liquidity in the first years. You have to have the discipline to do it, you are taking advantage of the cash flows, well, you are taking advantage of the cash flows in real estate anyway, so you have to be a, you have to have the discipline, you have to understand the cash flows and you have to getting comfortable on some level with leverage and then it's Katie close the door okay, you can't do it enough so we're adding speed to itinfinite banking world for ten years and in the past, I just have to learn how to manage that outstanding loan, which is actually not that complicated, right?

If my outstanding loan is going to be capitalized or exceed compounded cash value, then I may have to make a loan reduction payment or I may have to pay more than just interest. alone or will I have to take less on the next loan it's simple right it's just you know life insurance is structured this way and then it's used and integrated into everything you're doing in your personal and financial economy it's different , We are not. taught so we have to learn, but it's simple, it's harder, yes, if you use it, yes, I agree, yes, if you know a lot more about this than them, you've been implementing it for a lot longer and it's the only one way you will be successful.

From a loan perspective and a financial perspective, you have to control it, you can't let this slip away, you have to be able to set yourself whatever your plan is, it may be if you are a business owner and you have periods of choppy income. you know you are making a quarterly profit and you can pay yourself this quarter but not the next as there is a long gap it may be six months before you earn what you are earning so maybe it is seasonal and you are earning money. the final part that you pay, you may not pay interest only until then, you may pay the beginning, some beginning down when you do, so I think at a minimum, every year, you should pay any interest accrued on that loan, if you look at it. a year from the day you bought it or received it and then and then, if you can, then you need to know how to reduce that part of those principal payments and the beautiful thing is that if you're breaking up the principal payments and you think Well, I'm not putting too much into this.

I need to keep it, but we'll just borrow it if you're really right. If you need it right, I mean, you can even implement what you divide in principle for three months in a row. you say I think I need that, what you have done is you have reduced the interest that has accrued if you have interfered with it. By the way, you always want to interfere if you have someone out there. like the amortization of your house, your mortgage interferes with that, that's really the worst thing for you and the great thing for the banks is like an amortization schedule coming from a previous cylinder of the banking market, right?

You know these policies, That's why they're great. To the extent that they allow you to create your own discipline, but you have to pay for the discipline, you can't just borrow it, Willy, no it's not magic, the nice thing is that you can borrow from them at your discretion and you can borrow. You can use them however you want, you can be a person who doesn't want any love, you just build these things right, there's nothing wrong with having too much capital, right, I'm not talking about stealing your Lango, but if you had a certain interest and knew ten people in the that you had an interval interest, you could have ten policies if you have the capital, if you get something amazing, you'll probably want that over time, you'll probably have to start thinking about people you know that you have problematic interests in, so yeah, you know how you treat them, you know, if you treat debt, if you use debt the right way, you can get richer, most real estate investors use debt, not all.

Some people know I'm not going to touch that, but most apartment investors, I know everyone uses it, they have to make sure it's hard to buy a twenty million dollar apartment complex with cash, you don't even want to , We are not. Aren't you going to have the cash flow you would like? Things that are you, that are part of education, that are part of the educational process, you know that you are not going to learn this, there are all kinds of these things, you can go out and look at them all. types of apartment investors on YouTube, all types of good people who tell you their story and how they did it and it all comes down to a skill set that your skill set you needed to manage your own function and your own loans and and you can No It's so hard, but you have to do it.

Yeah, you know, you mentioned the business owner before or the apartment complex investor, and in the cash flows with the business owner, you know, cash flows with the investor, leverage with the investor, most companies use leverage. You know it somehow and when there's never a problem, there's no problem, as long as the economy is doing great, the real estate markets or the stock markets, you know everything's fine when there's no problem, but when problems appear and you are leveraged or over leveraged that is when bad things happen that is when the external lenders appear and you know that you signed personal guarantees on all those loans all that leverage goes wrong, you know that you back that loan with its assets and the asset look what you personally guarantee, oh my gosh, and I know there are loans out there, you know, non-recourse loans.

I get all of that, but that's not the majority of the loans that are available and all the loans are callable. Okay, good B's do the wrong thing, everything, everything will be a call, but you know, and you mentioned that if things are going well, it's fun to take advantage of it, so throughout the race, maybe I can run the can of worms if you talk about the Federal Reserve, well, you mentioned it, so let's talk about I know right, so their goal is to take advantage of leverage, keep providing, keep printing money, keep devaluing the dollar, so it's hard for people to understand the concept that the more money they print, the less valuable the dollar in your hand is that they have to create debt this is how they create money and are in our economy the Federal Reserve is not a federal institution of the United States it is like a hybrid hospital true it is owned by the largest banks in the world privately owned entity privately owned not a US government organization I'm not saying they don't do things right wait a minute the president appoints the entire board of directors , yeah, you know, I don't have any. reserves, so you have 12 white branches and seven board members, but they are not busy.

I mean, I think there are only four or five board members busy right now. You have the head of the Federal Reserve, Chairman Jerome Powell, if they can. everyone comes to me as far as I'm concerned, what are we at 21? Are we at 21 billion in the United States? They're not knocking on the door or 22 and I think China has half of our economy, but they have 40 trillion in debt, so I don't know, I don't know how much longer the US government and the Fed can keep things going. on going. You could have the best president in the world with his business skills like Donald Trump.

I don't think so. What matters is really the Federal Reserve that is going to determine and it will be their problem if things fall or how deep we go. We look behind the numbers. I think it sounds like it's probably a lot worse than it feels right now. It's dangerous so don't get carried away with leverage Don't get carried away with things It's easy to get credit right now from a bank or even a non-banking right non-banking financial company What are these right? The banks, the finance companies, they just follow up with money from a bank, so it's actually through a bank, so your big local bank you don't go to them for the loan.

You say you know what I'm going to do. I won't do it. I will not do it. I'm going to go to this non-bank lender. I'm going to borrow from them. All they have done is borrow money from the big banks and you didn't go to it yourself. I believe it and they just repackage it. I sell it to you and you are the one reading the other one, but you can get credit right now, so there comes a certain point where the banks are not going to lend money easily and that leads to too high a cost of funds.

We're at that point, we're at that point, you know the federal funds rate is two points, so 32.4, and if you look closely at the 10-year yield, I think it's down about two percent as we speak. , but yes, important tons. bar, they borrow a bank borrow short glasses, long glasses, long ones for you and me, right, and then they don't tell you anything in your checking and savings accounts, so there you have it, they pay you half a percent and They lend you five percent, no, it's worse than that, you know, I think it's worse than that, so I put money in the bank, it's a deposit, well, they're there with the fractional reserve system, they're lending nine times the At least more than they came out. ten dollars you deposit one dollar they can lend you ten right now they are charging they are charging interest on money and digits that did not exist until you signed the loan contract then your actions refer to all of us you in the big white world, you created it, that It's your hand, you, your part in this inflationary system, right, money didn't exist until you promised, you know, the real value, your time, effort, energy, assets, future production, so, the money or the digits that don't existed until you promised real value and then it is created and then they charge interest on that money that did not exist, so the banks make more money, not only with the spread, that's all I'm saying, the fractional reserve system is worse than what it seems like and Yes, easy money, interest rates are low, well, no wonder the stock market is up, no wonder real estate markets are up.

You know what creates these bubbles and I'm not saying that this depends solely on the interest rate set by the federal government. Reserve, but that's the biggest part of it, you know, that's the crux of the matter. I'm talking about using loans from your policy to invest well when you borrow from a policy, they have the money, the insurance company has the right money, they can't. leverage, they can't be leveraged, so when you borrow from a policy you could buy an apartment or a business, that's a real system of how it should work, in my opinion, because we're only going to work in the free market, those assets are just We're going to go that far, right?

But what happened? You have, as you said, a fractional reserve system, so by virtue of the fact that we all make a deposit in a bank, you have automatically devalued the dollar that you just deposited. Because? Because the bank is going to take that dollar now they can lend nine more to someone somewhere out of nowhere and that's what the Federal Reserve does the Federal Reserve lends money they print money out of nothing they have infinite returns every year I think I think They are stated The goal is or what they normally get paid about six percent annually, but that is not the correct six percent.

That is infinite. It didn't cost them how much it cost them to print all that money. You know it doesn't matter when you can win an infinity. come back, I'll call it done, right, they're not infinite, yeah, so your friend Ryan knows more about this stuff than I do, but anyway I think we're headed for a, you know, probably a lot. many inflation rates are going to continue to go down, in my opinion, the Federal Reserve, the United States government cannot afford to have them go up, they have too much debt to pay, so if interest rates go up for the government of the United States, they can I can't afford the debt, not even the interest payments.

I think we're getting to a trillion a year and just the interest payments, so you increase the rate to a tenth and basis points to a tenth. Think how many, I don't know. math on what that does to increase what they have to pay and that's before all the federal programs yeah we're on the money Joe we're not the money to raise rates rates have to go down they have to go down so The federal reserve funds rate is probably going to 2-0. You want me to keep it on this podcast. Let me edit it in the future.

Yes, I think they will chase me. Yes Yes. You can edit it, whatever it is. I'll leave it there. I don't know, I don't know what they're going to do, they'll do what they want and you're right, you know interest rates go up, that's an exponential increase in your debt service costs, okay, I get it, But have you ever heard before being exposed to the concept of infinite banking that life insurance is a hedge against inflation? Have you ever listened to that book? No, no, I think it occurred to me. Go ahead, no, Go ahead, I didn't know that either. 14 years in the life insurance business never made sense to me.

You know, you buy a death benefit for pennies on the dollar. You know in the past that's pretty easy. Can you understand it. that but life insurance turns out to be life insurance I discovered that life insurance is the best hedge against inflation in a cash flow it is a hedge against inflation true but it is the best hedge against inflation in a cash flow I've been exposed to is incredible when you consider what you can do with life insurance, not just the death benefit, the access to cash values ​​to capital through the appreciation of cash-flowing assets, but the hedging against inflation in a cash flow isextremely powerful, but I just wanted to throw that out now because That was kind of an eye-opener for me, since oh my gosh, I don't even believe in these numbers.

You know, you look at an illustration of life insurance. It's like, oh my God, I don't believe them, but what do you do? you can get out of this, yeah, once you can get out the doors with this and get through some of the, you know there are costs associated with implementing these policies within the policy, but you know I don't know how many people if If you have fifty thousand dollars saved, will you use it all tomorrow? The answer would be no, so if you put fifty thousand into a policy and you get this exponential benefit from the automatic death benefit, there you can borrow the thirty you know, sixty seventy. percent within one or two years usually in the first year yeah, it just gets better in the second year, third year, fourth year and it continues to improve, and it's a hedge against inflation because what's the inflation rate?

Well, the CPI is a correct thing. That is what is stated, but you already know how these policies are applied. executives these insurance executives best where you have your policy the way they invest in these you know the cash they have to invest in a certain way that meets all the things that they will have to pay for in the future, so they have to invest themselves they invest in commercial real estate and high quality, etc., so you know you have your head there, so you have to do something that will make you ten thousand dollars on your kitchen table next year and those ten thousand dollars are worth less than they were the day you put it on that table because each year the value of the dollar goes down more and more thanks to the total debt total debt money money supply then prints money debt is created and those two and you get and you get more dollars in the system, therefore, you put your dollar on that table, those ten thousand dollars that are worth less than a year, you know it, okay, you know it, so , what are you going to do to make money on that $10,000 so that it's at least worth it? buy what you could buy last year this year it's okay, don't leave out taxes, right, don't leave out taxes because you know it's just another, we're all fighting the headwind of taxes and inflation, devaluation, purchasing power, the losing bag. purchasing power of the dollar, there's no doubt about it, so I'm glad you brought that up, that's the number one reason you know, you think about this, the typical first person that knows what a Roth IRA is, you can think about these policies. life insurance as unlimited insurance.

Roth IRA the cutter has been a Roth IRA because a Roth IRA if you make okay, that's right, so you don't get a death benefit with a Roth IRA either, but if you are a rich person and you make two million dollars a year, which I am NOT and no No, but if you are that person, You can buy a life insurance policy that is much higher than the six thousand dollar annual limit right now. Generally, these policies act like a Roth IRA, but with many more benefits. you can't borrow from your Roth IRA you don't have a death benefit with Roth IRA well, now you can lift us up you let yourself hang around real estate groups and they talk about the individual 401k entitlement and then they talk about the self-directed Roth IRA, you put, you know, six thousand eighteen thousand plus six thousand a year for three years, $18,000 balance in a Roth IRA and you're going to get into the real estate business, okay, parsley, maybe some options or whatever.

How long does it take to reduce the bill? You can't put $100,000 into a Roth IRA through contributions. I understand there are backdoor conversions, but you already know the right traditional plans. I understand all that, but fundamentally you know if you have the two million dollar example. mentioned man. I can pay a five hundred thousand dollar life insurance premium pretty easily if I'm disciplined right now. I know what's going on and I understand the leverage and the cash flow and now I'm passing it on to the underwriter. What I can do? I know 70% of 500,000 in real estate, you can do a lot, yes, I can do some damage, okay, you can't become your own banker with the gross right, so that's very difficult, let's say yes, yes, they Although all options have challenges and features and none, to my knowledge, favor the owner or the participant.

You know qualified plans, life insurance policy owners, certificates of deposit (CDs), margin accounts or whatever. I don't think you have the most control. correct with life insurance and when structured correctly it has all the characteristics that are required for a private banking entity and is based on contract law qualified retirement plans all traditional in the Roth IRA 401ks 457 403 B only 401 K all they are exceptions to the Internal Revenue Code, so the Internal Revenue Code was born in 1913. Okay, qualified plans came after pensions. Pensions include. They are really the genesis of this idea of ​​qualified plans. There are exceptions to the Internal Revenue Code.

Life insurance. it predates the federal income tax, the Internal Revenue Code, by over a hundred years, so I'm just pointing out well, you know, I want to, I don't want to make a tax scheme out of that, I want to use after-tax dollars and I understand . The life insurance industry has created all kinds of cells, tools, products and ideas, you know, the cash balance plan to get a deduction on your premium, the executive bonus, splitting the dollar, they have created all these concepts of sales to integrate and participate in the tax code. Basically, if I fund life insurance policies with privately held after-tax dollars, I'm not building the tax plan around it.

I'm not trying to improve it by making the tax plan out of it, it's good in and of itself period for its existence how I improve it is me the owner using through leverage collateralization borrowing against the cash value to go do what I was going to do anyway whatever in vacations, real estate, car deals in and now I don't have to worry about the tax code I don't have to worry about the market I don't have to worry about interest rates I like it worrying about performer taxes Katie two years later the bankers approved my credit score I'm just doing what I'm doing and gosh, that's liberating, you know, that's, think about that, think about this, but If you just simplify, you just simplified all of this, I'm just an individual and maybe people say bad things about me, but it doesn't matter what they say about these life insurance policies, these policies, let's say you had one and it was your foundational policy. , in my opinion you don't need 401, I'm not an advisor, right?

I realize I probably have to be careful what I say James, but I don't know, I'm not saying anything that you know, say what I believe and call it what it is, let's say you had the life insurance policy properly structured with the right mutual company, you don't have to have and it's not, in my opinion, it's not beneficial to have a 401k or 403b, a 457, an individual IRA, a SEP IRA, a loan from a bank and all of this is being built to Me, this is where I'm not at all. I haven't done it at all.

It's going to take us a couple of years to get where we want, but you don't need all these other vehicles, you don't need the savings account, the checking, you know, yeah, a bank account where you have quick access to cash. Well, yes, we will always have it, you know, but it's not the primary source, it's certainly not a savings account and it's certainly not a retirement mutual fund or a stock account. These are not the main vehicles, so you can take them all except a small checking account. that you need for your daily expenses, I guess, and use that back and forth with your policy, you can have a great foundational policy and over the years you'll roll out more policies like your cash and your income as you can do that and need.

To do that, keep expanding your business, keep adding branches to your own bank. I guess you know it's interesting control, it's control and it's interesting, and I appreciate you saying that, I mean, that's really the position that you've grown up in. right and I think this is extremely important the background of your wife Allison CPA her background on Wall Street at different levels right in the financial world her background currently active in real estate okay the background and her current activities in real estate and that I think what I'm hearing is what you're saying, that's your perspective, you don't need all this stuff, this infinite banking replaces a lot of that gives you more control, okay, that's what I'm hearing . what we're hearing is exactly right, yeah, okay, and then let me say yes, control that note, simplification and control right and then I want to say some kind of disclaimer disclosure here that we're not telling anyone that do anything right. until they have sought advice from their professionals, but whatever the level, tax lawyers, investment advisors, whatever it is, we are encouraging people.

I want to encourage people to consider this ability to become your own banker, you know, I don't want anyone to do anything until they've done their research and their due diligence and sought out all the advice and tips they need before they make a decision. Right decision, but I agree with you. I just want to say that because I don't want people to do anything. hoping they like it you know tomorrow you're going to become your own banker or you know you may not be able to qualify for life insurance you may not be whatever your situation is and then if I continue I would encourage everyone who listen or watch to read Nelson Nash's book first. book become your own banker the second book build your house of wealth and then there are other books and resources so you should do your homework before taking any action, that's my encouragement, okay, so you know.

I agree. I agree. You already know. The only reason I came to your podcast is because I like talking to you, I have a lot of knowledge about what you do and you focus on this and this is the reason why I have implemented and if I started implementing and I will continue to implement all of this, but you didn't call me or pressure me or tell me Duane, you should do this, you're crazy if you're thinking about doing anything else, no, this was, this is something that I feel like I came up with because I'm the average guy.

In America I think I'm below average and in many categories, no, it's okay, but it's okay, you know, I appreciate your humility, well, you know I'm like that for a reason, but it doesn't matter if someone knows me very well or No. I feel like I'm the average person I feel like we have the average family I feel like the average person in this country I'll simplify things and get down to the right map a lot of people are getting down here on this map or this map or this map and you can be a manual laborer and you can be a guy on an assembly line you can be a guy who works in a car factory you can be a guy on Wall Street you can be a real estate investor you can have your own YouTube channel you can be an Amazon seller you can work for the Amazon company you can do whatever you want in each of those types of professions that you can implement that is becoming your own banking strategy because it is not about What will it be in four months?

How I look? I'll be rich? No, no, it's not about that, it's about you don't have to worry about investing in mutual funds or 401 K mutual funds within a 401 K. You don't have to worry about investing and picking the right stocks, you don't have to , you don't have to buy a ten-year bond, you don't have to buy a Treasury note, if you can get the right company, you'll get the right policy. someone like you, I mean, you're the first person qualified or licensed, or I'll say person certified at the Nelson Nash Institute, what that means to the average person like me, is that James really knows this thing about becoming your own banker. and become your own banker. banker is about taking control of your finances and your world and it takes a lot of stress away from you, you know it's not necessary, maybe people who are not stressed, who are not, who just invested in 401k or who have a lot of a lot of debt out there during the winter, that's why the big farm is going broke the big farm is going broke because no one's stressed, yeah right, so I just released you and everyone's releasing a lot of cortisol these days, it's a high stress world. right, I mean you know Facebook exists and you have to keep up with the neighbors.

This isn't about keeping up with the neighbors. This is just your own family. Do your thing. You can do your thing no matter the level. you're on and you can talk to the right person and Jane Juris here is kind and humble but very knowledgeable and thank you on the phone, assuming and I already know that, but all that said is that we are doing this where the average people were implementingThis won't make us rich, right? I don't know what the future holds, but I know that by having this type of deposit at least we have simplified control and we will do better in this policy than the average. a mutual fund will do, that's my opinion, that's what I think will happen well and I appreciate you saying all that and I appreciate that you know, the praise, the support that you have and I don't want it to be a commercial.

Not really, but you know, I see you Duane with your lovely wife Allison and I really hope to meet you one day. You know, face to face, press the flesh, right? I see that no, no, I think we are all average. I know we are all above average. I don't even like that average, but you are a quality person, you are knowledgeable in many areas and you have experience in real estate and so far you have nothing to do with the game. like life insurance or infinite banking, you don't get paid here anyway, no you don't know, no and I asked you if you would do a podcast and you kindly accept it and I think the value is exactly you and your background and what you are.

What we're doing in the thought process that you had to go through to get to the point of implementing this concept and I think there are hundreds of thousands of American people who are not aware that they just had it and have never been exposed to this concept. . We are not aware of the power we could have when we control the banking function at the level of you and me, just when you get above the built noise, the IRA 401k tax schemes. and go down to the level of you and me, we need access to capital and then we need discipline, there's no doubt about it and then we just access that capital collaterally to do whatever we were going to do anyway and the end result of that over time is more powerful. and I think that's what you're referring to before is going to be more powerful than depending on something that you have no control over whatever market there may be, so it's true, it's true, no, that's well said, you know, I would not do it.

I wouldn't have done this or moved on if I didn't think that this was the right thing to do and that people could continue if a thousand people see this, two or three will take action and do something that is right and that is nothing. It's going to happen unless you do something right, so it doesn't matter, I guess whatever Bill you and I finally say, I hope someone can take one, just one or two people maybe can get a little confidence to at least make the book become your own banker and read it once or twice, the second thing might be to call your favorite underwriter, they won't know how to become your own banker, just like 99.9% of bankers don't know what it was from his own banker. that world for a long time and I've never heard this said once, not once I've heard it, and this has been around for how long since they wrote the book in 2001 or something like that, you printed the book in 2000 and you discovered it in 1980 and had been teaching the concept for 20 years.

Well, I had actually been practicing this, you know, before 1980, but it required training since 1980, then the book was printed in 2000, so the first step was. I read the book a couple of times while watching YouTube. I came across you, you make great educational podcasts. I'm the one who says that's not James. Rangefinders have arrived, but not just for you. I looked at others who may or may not be financial advisors or agents. and I looked at what they had to say and then I picked up the phone and I called you and we talked all we had was one conversation and then we had another conversation and another one so that was step two and then step three is after you look in a couple of examples of what you might think about what I could see after looking at a couple of examples that you created for me, I can make that decision and I may or may not have done it, but I think it's extremely beneficial in a lot of ways. and then and then we went ahead and implemented it and now when we implemented it and set the policy, now we have a fund, the policy capitalized on the policy, then we got a Are we going to get the car anyway?

Are we going to finance it? Are we going to pay in cash? No, you will learn it in the book. That's not the smartest thing. Are we going to borrow from the bank? No, we are going to fund it ourselves by borrowing from the policy and repaying the policy loan at our discretion, simple interest on these things, it is not amortized interest, it is a big nuance that everyone should be familiar with if they are not already and then we will finance some real estate investments here in the near future with that policy here on the side that we have.

We are going to teach how to save every month and how to finance and capitalize that policy here, when it gets to the point where it is capitalized to the maximum for a given year, if we have more cash, start a new policy, put it on another person in our family. I know we put it on our children, whoever we have an insurable interest with and we will continue to build our bank and we will continue to try to use it to do whatever and if you are someone who wants to go out and invest in a business start your own business I can't think of a better way to launch it in the fund of your own policy and use it to start your own business no, I agree thanks for saying that any other any other comments and in closing, I don't know how long we've been like this, but This may have to cut this in half and turn it into a party.

I know, I know I rambled, it's the first podcast I've ever done and I was pretty terrible, but I thank you, so no, I had fun, I always enjoy talking to you, join in and I thank you for talking, you know, and recording it on a podcast, but I think there's value here. I'm not trying to sell anything to anyone. We are not trying to convince anyone of anything, we are just talking, having a conversation, you know what we know, what we have done and what we are doing, and I think there is value in that, you know that 15 years ago when I was. exposed to the concept was page 92 of Nelson Nash's book, that was it, you know there was nothing on YouTube, there was nothing on Soundcloud, I tune in and you know he had to travel across the country to listen to someone who I had some knowledge to learn. and so I think there's value in, you know, if someone is interested in learning, they need to listen to people like you of your caliber, you know, the background of your thought process, what are you doing?

Because we all have the same feelings, you know, we all think the same. Whenever we are exposed to things, it is difficult to overcome some preconceptions or obstacles, so I think there is value. I don't care, five people listen to it or 500, that's right, if one or two people get something. I think this is great, you know there's a reason why rich people use this structure rich people, families, families, if you don't know what a family office is, that sounds very mundane, doesn't it? A rich family's money and that family may be very involved in the day to day life with it or they may not be the peace that rich families use.

These banks have huge life insurance policies and it's because of the security and the word you can identify with, yes, that's it. where they put their tier 1 capital buried in my friend a friend of mine Barry dot author has written three published books and is working on the fourth his first book powers of the powers of Manhattan he documents the reserves held by banks in bank-owned boli Life insurance, you know so boldly, yeah, yeah, right, bowling, it's a pretty good resource, you know, you can go online, you can call our office, go to our website. I think we sell them.

No, I'm not sure. I think so, but nice. good read, but anyway, what else does Young want to say? What else don't you do? Yes, I will do another one with you. You know, we'll talk about people behind their backs on YouTube, but you know it's going to be fun, at least not. institutions, right, no, no, yeah, I'll beat up the industry, they'll beat up the industry all day long, you know and you know, I think it's just fun, I think the most important thing is that people will say or you will think well if this works, why?

Isn't everyone doing it? And I always say that exercising and eating well works, but are you doing it? And so has everyone around you. We know it works. You're doing it right? I know English. I know it's kind of direct. Isn't that right, but I'm just saying yes, it works. I think it works. I know it works. I think it will get there. It's working for us. Remember, yes, but I would love to do it. Yes, that's how it will be. fun and maybe one day I'll make the audio work on my side so yeah man I'm going to polish the sound engineer by producing this thing I mean the audio playback you just cut out half of what I said from anyway.

That'll be a good start, probably look, he's young and he'll recover, okay, yeah, okay, thanks. I really appreciate you sharing with us and coming to talk, and I'd really like to have you back and you know, talk some more, okay? At least we can go down a rabbit hole, yeah let's go down a rabbit hole, sounds good, okay, have a great day, thanks James, I'll be there soon, bye.