94: Introducing IBC to Your Partner

094 - Together in Finance: Introducing IBC to Your Partner

[00:00:00] Hello, everyone. I'm John Montoya, and I'm John Perrings. We're authorized Infinite Banking Practitioners and hosts of the Strategic Whole Life Podcast.

John Montoya: Hello, everyone. Welcome to the Strategic Whole Life Podcast, formerly The Fifth Edition. We are on episode 94, How to Convince Your Spouse About IBC. Now, before we get started here, I wanted to share an email that I received from a client and listener of the show. He wrote, Good morning, John. On a lighter note, I want to share a laugh I enjoyed from your latest podcast.

I don't know if it was intentional by your co host or not, But as you both seem to be like fellow nerds, it's a distinct possibility. He explained, referring to you, Perrings, he explained, like Montoya said, go back to the beginning, principles, which was straight out of the classic, The Princess Bride. Enjoy.

And that's from Marvin. And he included a clip, which I wish I could play [00:01:00] from The Princess Bride. It's one of my favorite movies ever. My last name is Montoya, so you can probably guess how many times I've heard the famous quote from that movie. But, yeah, I I gotta share this because this is perhaps the first time I've ever been called a nerd in my life. And I think we both grew up in probably the golden age of bullying Revenge of the Nerds was a popular movie in the 1980s, and the connotation of what a nerd was then and what a nerd is now is certainly different but I'll take this as a compliment. Because, what we're doing with the podcast and educating people and, the theme of continuing to learn, Nelson used to talk about the arrival syndrome and it's very real.

Most people will never pick up a book after they graduate from high school and. It's too bad, but yeah, first time being called a nerd and I like it because we're, our aim is to improve our lives and help [00:02:00] improve your lives. And you can't do that without learning.

So thank you, Marvin.

So this episode, how to convince your spouse about IBC. To tie into Marvin's message here it's in, in how I see things with whole life. And tell me if you agree, John whole life and IBC, it's a common sense test. It's not an IQ test. And when it comes to convincing, if that's the right word to use your spouse about whole life and IBC there's some requisites that we want to make sure we hit on first.

Number one. They have to have an open mind, have to be curious, willing to learn Understanding Nelson's Arrival Syndrome, which I just mentioned, clearly important because if you think that uh, you've arrived at the destination and you've learned all you need to know you're never going to get to the next level.

And number four is spouses should really be In on all the [00:03:00] appointments that that we're having when discussing and learning about IBC because without their actual input as a professional, we're basically having to do two jobs on the first time we meet with people and then having the same conversation over again, in large part, because the spouse isn't included, all the way through the process.

So it's very important that spouses be included. As much as possible, if not uh, you know, our wish every time we meet with someone. So yeah that's what the show is about and we're going to get into it. But John any thoughts before we get started?

John Perrings: Yeah, it's a, it's super important just to reiterate by the way, I just want to acknowledge the this is a this is not an IQ test. It's a common sense test. So that's another golden golden quote from Montoya there. But the importance of having your spouse involved from the beginning, it can't be overstated because imagine learning [00:04:00] something for the first time and you, you know, Talk to someone you're just getting into your, starting point of really digesting all of this information because it really is a paradigm shift from the typical financial planning.

We're going from, trying to grow a big account to looking at the concept of economic value added. And that is not an easy shift to make and imagine learning something for the first time and then trying to. Explain it to somebody else. Like it takes some time to, get this going, but the.

The best thing is, you know, one of the best things about what this process is, is you're starting with a guaranteed bedrock asset that really can only go up and can never go down as long as you pay your premiums. You don't really have to worry about getting started. You can get started, but if you make decisions together.

You both need to [00:05:00] be a part of that learning process to understand why you're getting started. All great points, John.

John Montoya: Yeah. And there's really three main points that I wanted to hit on for this episode. Because again, this is a common sense test when you're sitting down with your spouse and you're discussing your finances and you start to bring in whole life and IBC. Let's key on three things. Number one, protection, right?

You have someone that you love in your life, and if you're not there anymore, you need to provide protection for them, financial cover. So whole life. What does it do? It does a lot of things, but number one, it provides a permanent guaranteed death benefit. That's protection for your spouse, for your kids, if you have any.

 It does something that no other financial product can do, and it does so with a [00:06:00] guarantee. So that's number one. Number two safety. I heard it said recently that you don't build a house by starting with the roof. And I thought that was brilliant. You start with the foundation.

And I think last week I said whole life isn't a pet rock. It's a bedrock. That's the foundation and safety first. And when you think about where money needs to reside. You start with the foundation. We'll talk more about that. And then the last key principle is that we finance everything and most people don't realize it because we're just not educated.

We're, I guess we're not nerdy enough to learn this on our own. We have to be guided by someone. So, uh, you know, We, we finance everything that we buy that's one of Nelson's key points. So protection, safety, and solving for the banking function. Those are three key components that you and your spouse should be on board with.

John Perrings: Yeah, the [00:07:00] protection component is You know, really glossed over a lot of times, especially, hate to say it, in the infinite banking world, not necessarily by infinite banking practitioners, but by people who are learning about IBC for the first time. And of course Nelson says our need for finance is greater than our need for death benefit.

However by saying that he didn't mean you don't need the death benefit. If you think about your greatest asset, your greatest asset is your ability to earn an income, hands down, your ability to earn an income will bring more financial value to you and your family than any other thing you can possibly do, so I just wanted to touch on that and it really needs to be appreciated more, I think, especially for those evaluating whole life insurance for IBC.

John Montoya: Yeah. And as a professional who had to work with three families last year and paying out a claim. I mentioned it before in a podcast it's [00:08:00] probably the worst thing that I have to do as an advisor but it's at least it's at least something that provides some peace of mind over what's going to happen next financially and, you There's an old saying that I'm going to butcher and it goes something like, a grieving widow never turned down a death benefit claim.

Something to that effect. And I believe it to be true. This is absolutely the worst experience that we can go through. The grief of losing someone that you love so much and when you're bringing your spouse in to discuss finances having that protection in place, I don't know how you can put a price on it or not value it as highly as it should be.

And, there, there's, [00:09:00] something we talked pre show that gets mentioned by quite a number of people who are looking into whole life is they'll bring up the fact that their spouse is traditional and they like to have money in the bank.

And it it's. It goes to show the mindset that people have been conditioned to have over multiple generations over the past hundred years, where people Have this trust in the banking system that really is undeserved. And if we look at all the economic value that you get for parking wealth and a whole life policy compared to a bank, it's not even close, but because people are, and I was conditioned to think you put money in the bank because that's what my mom taught me.

Any birthday money any money that came my way, it all went into a passport savings account. You put in the bank, that was a safe place, so I get it. But we're not taught [00:10:00] about all the extra benefits that we get by parking wealth and a whole life policy. At any age and so this thought of banks being more traditional than a whole life policy.

It's actually not true. You want to talk about that, John?

 obviously banks have been around for a long time and so they are traditional. But I think people, if they're comparing, being conservative or traditional and they're comparing a bank versus whole life insurance well, whole life insurance companies have been around for a long time as well.

John Perrings: And so they're every bit as traditional as a bank and not only. Are they traditional and safe, and I would say safer than a bank the value that you get from a whole life policy, it's just a completely different asset class.

And I'll talk a little bit about asset classes as we go through this episode, but it's just another asset class that has the [00:11:00] same or better guarantees than what you have at a bank because of their, the insurance company's capitalization. But it also. It has growth factors that are much better than a bank.

It has the ability to leverage it. I mean, we've, We've gone through the benefits of whole life insurance a million times on the show, but there are so many things you get from whole life insurance that you just don't get from keeping your money in a bank account. And. To add onto this, when I talk to people and they tell me that their spouse is, conservative or more conservative than they are.

And so they, they're saying they have concerns, but actually I actually, I hear it from. Almost the other angle where they say they're more conservative. So they actually like to keep their money in the stock market or real estate. It's the same kind of objection, but it's, it's coming from a completely different place that I think is even more dangerous than wanting to keep your money in a bank, because it's like [00:12:00] somehow, uh, these spouses have been convinced that.

Keeping your money in the stock market is the conservative approach. Like the stock market was never a conservative thing when it, when the stock market first started, it was like, that was the only something that rich people did, so it's like the, this idea that being conservative and keeping your money in the stock market or putting your money into real estate.

Real estate has risk, by the way this idea that that's the conservative approach is interesting to me because whole life insurance is head and shoulders above those other asset classes from a conservative perspective. These other things have no guarantees. You're still beholden to, banks and other people.

You need permission to access the value of them, you know, there's no control over any of these things. You take all the risk. There's no control. There's liquidity based on the permission of other entities. And so this idea that [00:13:00] somehow putting your money in a 401k or something like that is more conservative than whole life insurance.

We really need to do some education there on, on different types of asset classes.

John Montoya: Yeah. And I think to just really simplify things too if you're thinking that banks and 401k is that's the. Conservative traditional approach. I'd come at it from a different angle. If you have a family, what are you putting first? Are you putting your family first or are you putting the bank's shareholders first?

Because whether you realize it or not, and you probably don't at this point, if you think banks are the traditional conservative place for money that money that you keep in a bank. It's not yours. What you have is a claim. And once you realize that, it you start to get a little bit more inquisitive about how safe are those banks?

And. [00:14:00] Sure enough, if you ever go into a bank, you're going to see like a gazillion FDIC stickers, and it's all there to give you confidence that bank is strong and secure, but the reality of the situation is those banks, when you deposit your money, you're basically lending them your money so that they can go out it's And now there's nothing wrong with turning a profit, but if you take it to even the next level are you a shareholder of your bank?

Does your bank pay you a percentage of the profits every single year for you lending them your money? No? Wouldn't you rather be part of a banking system that you participated in the profits of that company? And What are we doing with Whole Life? We're choosing to partner at the individual level with a private entity.

Nelson used to teach this. This is banking at the you and me level. And these Whole Life insurance companies, these are mutual [00:15:00] based companies, not stock based companies. We get to participate. In the growth and the profitability of these companies, right? So we're participating in a system that is not fractional, right?

This is a full reserve system by law has to maintain a hundred percent solvency. Every day of the year, and we get to participate in the profitability the performance of that insurance company, those dividends that as long as these insurance companies meet their worst case projected earnings.

They get returned to the policyholders, you and me, again, you and me. So I would rather participate on that level than build fountains for fractional reserve banks.

John Perrings: Yeah. Carlos Lara, one of the managing directors of the Nelson Nash Institute, has a great way of explaining this. He tells the [00:16:00] story of.when we used to go to banks, you could go to the drive up window and they would have those little containers that you put cash in or checks, whatever it is.

And you put it in there and then you put it in the tube and it sucks it up and goes to the teller inside the bank. And he explains it like, the minute that. That tube gets sucked into the bank. That money is no longer yours. You become an unsecured creditor uh, of the bank. And yeah, you might get your, whatever your interest rate is, but you're not participating in the profit that they're making off of that money. It's a very important distinction to understand where with a mutual insurance company, we're working in conjunction with other policy holders and we're pooling all of our capital to provide value that can't be created on an individual basis.

The Law of Large Numbers or the [00:17:00] actuarial science behind how insurance works allows us to use our money in ways that you just can't do on an individual basis.

John Montoya: Yeah, absolutely. And to finish my thought on FDIC FDIC is supposed to be there to ensure all bank accounts up to 250, 000. And just something to point out FDIC is insolvent. There's, I forget the amount of bank money in the system, but it's easily over 10 trillion. How much in assets does FDIC have?

I think it's around maybe a hundred billion. The reserve ratio there, there's insurance and FDIC and it's a bad joke if you think about it, because FDIC is completely insolvent. And of course, who backs up FDIC? We found out a year ago it's ultimately the Fed and the money printer, because when when the three banks failed last March, 2023 it was the biggest banking [00:18:00] failure in the history.

of this country and who was there to bail out depositors. It was really the federal reserve and the programs that they came up with, which is all basically different names for adding liquidity to the system which means adding more money and adding to the inflationary problem that we're all suffering through.

And, on that level too. It should be pointed out that these whole life policies, full reserve systems if you study Austrian economics, you'll understand how important this is and how it doesn't contribute to the problem of inflation. At the level, you know, where you're talking with your spouse that it that part of it may not be as important, but big picture, it is because every single person in the world suffers through inflation.

And that's a monetary event that is in part created by fractional reserve banking systems. And thinking that banks are the place to park [00:19:00] wealth, for me, no more than two to three months worth of expenses, anything more than that, it's got to go to the whole life policy to a full reserve system that I can count on and doesn't contribute to the overall problem.

John Perrings: I wanted to, just before we move to the next point, I wanted to just touch back on conservative. Another way to think about this, if you're into real estate, for example, and that's your approach and that's your comfort level. If you're into real estate, you've probably heard of Robert Kiyosaki who wrote Rich Dad, Poor Dad has a big, real estate presence and educational system.

In Rich Dad, Poor Dad, he talks about how the rich buy assets, the poor buy liabilities. And so. another way to think about whole life insurance, I mentioned it before, whole life insurance is just another asset class. Just like stocks are an asset class, bonds are an asset class, real estate is an asset class, cash is an asset class and permanent life insurance is an [00:20:00] asset class.

If you're thinking of like, uh, well, I'm just going to invest in real estate and the stock market and I'll buy term insurance to cover that death benefit, nothing wrong with term insurance. But that is most likely a liability because only like less than 1 percent of those actually pay out.

And so what you're doing is buying a liability when you could be buying another asset and that's just all, that's all whole life insurance is. It's another asset that you could be adding to your overall financial picture.

John Montoya: Yeah. And we recommend convertible term because you want to make sure that the term insurance if you're adding that to your overall protection, you want to make sure you're thinking long term and you can convert it to. A whole life policy when you're able to do so. so moving to the final principle that we wanted to touch on we finance everything that we buy.

We really. [00:21:00] Talked about this in a previous episode, just recently solving for the banking function, which was episode 92, but this is really important to discuss with your spouse because, and especially um, if uh, debt is, is um, something that you either use as a financial tool to build wealth.

Or, if you're struggling because you're relying on finance companies credit cards to just stay afloat the reality is we finance everything that we buy. And again, this is something that really isn't taught. It, it really takes reading Nelson's book, Becoming Your Own Banker, to really have it crystallize just how important this principle is.

But it's really common sense. We either earn interest or we pay interest. And when you have the ability to take control of the banking function , you're able [00:22:00] to root out the, there's this, there's that word again, traditional banking system, you're able to root out the banking middleman out of your life.

You can keep them as an option. And I think it's certainly good to have options. Anyone who tries to convince you that having fewer options is the way to go is probably not a good advocate for you. But if you could have in your back pocket control of your own banking function within your life.

You're going to have much smoother sailing for the rest of your life because you're never going to be reliant on just one source of finance, which comes from, the banking system, which is there to lend you an umbrella when you don't need it, but pull it back as soon as it starts to rain, you want the ability to have it.

Access to to money, liquidity whenever you need it for any opportunity. So yeah, John, [00:23:00] I'll turn it over to you.

John Perrings: Such good points regarding options. I'll just reiterate it. How can you possibly be in a worse place having more options? IBC isn't about completely replacing everything, not necessarily, I think it took Nelson over 20 years to completely transition to his own, becoming his own banker.

I can't remember the exact number of years, but it was something like that. It takes a while to do this and you may never want to completely replace everything. It's like having options is a good place to be. The fact that you finance everything you buy is such a crucial core principle of IBC, and it's actually one of the most helpful ones when it comes to explaining this to someone else and getting them on board.

And one of the ways if you've We'll post a link up here to a video of one of us doing it, but it's a very simple discussion where [00:24:00] you draw a graph and there's, money on the Y axis and time on the X axis, and you draw a compound curve. And when using money in the typical way.

You either save up money and then you spend it, thereby losing the growth you could have earned on that money, or you borrow money and you pay it back, thereby paying interest to someone else. So you finance everything you buy. You either give up interest you could have earned or you pay interest to someone else.

No exceptions. With IBC, you can draw that compound curve out and having the leverage against the cash value. Every time you use policy loans, it tracks back up to the compound curve and you don't lose all the growth that you had because you're never pulling money out. You get uninterrupted compounding on your money.

I think this is one of the best ways to convey what we're doing with IBC, and then it's just a matter of understanding all the other things we talk about, like not [00:25:00] overdoing it and, maxing out your policy loans and all that other stuff. But that's the gist of it. You can never get rid of lost opportunity cost, but you can minimize it if you have a strategic way of storing capital.

John Montoya: I concur. Uh, So yeah, hopefully this is all making sense. Again, this is, should be a common sense test. These are just some basic things that you and your spouse should be on board with, protection. Safety, liquidity the ability to have control over your finances. These are just basic building blocks of every household in order to better prepare and plan for your future.

So hopefully this is all resonating with everyone.

John Perrings: Yeah, now, and I would just say that we're talking about spouses, but spouses aren't the only ones we have to sometimes, try to get on board with [00:26:00] this, talk to so many people that, their brother comes along and tells them this is a bad idea, or, they try to explain it to a friend and they don't get it, or a business partner and, there, there are all kinds of people in your life that are more than happy to share their opinions about whole life insurance and IBC.

And, most people, when. They learn about really life insurance in general. Life insurance is not really a well known topic. And so most people's understanding of life insurance is based on someone else's opinion. And very rarely is it understood from their own education. And so I would just say.

You got to ask yourself can you think of any reason you shouldn't know about this or find out about it for yourself? And I'll I guess I'll leave it at that.

Well, Thanks everyone for listening in. If any of these ideas or principles are resonating with you and you'd like to learn how The Infinite Banking Concept could [00:27:00] apply in your life specifically, you can head over to strategicwholelife. com. You can book a free 30 minute consultation with us right there.

Or if you're the type of person that likes to just learn everything they can before talking to anyone, just like I was, you can head over to the same place, strategicwholelife. com. And there's a link right at the top there to our online course, IBC Mastery, and you can get a lot of info right in that course. All right. Thanks everybody. Thanks, John.

John Montoya: Yeah. Thank you to all the fellow nerds out there too.