By the early 2000s, I became a pro snowboarder. I started a clothing line in my mom’s basement called Phat Clothing Company, which by the time I was 17, had turned into the dream of having my own skateboard snowboard shop called Phatman Boardshops. It required quite a learning lesson but my mom put our house up on the line so that I could get a loan for this store.

By the time I was turning 18, Phatman Boardshops was the thing. At 17, you got a $70,000 loan. Your mother’s house is at risk. That’s a lot of pressure. I’m a kid. I guess I was a kid at that time so I took things seriously.

I remember it was really tough, but we made it through those tough times. I’ll never forget the early 2000s when things were rocking and rolling. I was a pro snowboarder. I had my shops going well. I was kind of living the life and then the first recession hit. I’ve been in the dot-com crash in the early 2000s. It forced me to get a job and that job could have landed me delivering pizzas for Little Caesars, but I landed in Wall Street, of all places. I am a pro snowboarder who got a skateboard and snowboard shopping, where do I land? On Wall Street.

I thought it was a temporary thing but it ended up being a very permanent thing that I loved. I ended up becoming one of the top financial advisors in the firms I was at. I was crushing it by 2008. I flipped two houses. I was making high six digits and just absolutely at top of the world. I was still snowboarding.

I took another big leap in 2008. I bought a strip mall, a dilapidated one and I converted it into three spaces that I was going to rent out. Though, as many of you know, 2008 wasn’t exactly the right time to do much of anything.

The great recession hit me like a truck, brought me to my knees, one month away from bankruptcy. I’ll never forget my girlfriend at that time, who is now my wife and the mother of our little girl. She ended up helping me pay the mortgage and ended up helping me pay the utilities on my house. We rented some bedrooms out in the house to make it through those times.

From 2009 to 2014, I jumped into real estate. I am still doing the advisory and I bought apartment buildings. Everything was going great. I got 36 units by 2014.

Then in 2014, the bank pulled a fast one on me and said my debt to income ratio wasn’t good. They pulled the rug out from underneath me, froze my lines of credit and called one of my mortgages. It was game over for Mr. Naugle.

I had to sell all 36 units, the dream house, me and my now wife, Lorissa had bought. I was literally at the lowest point in my life.

That was that point where in life you start really questioning everything because I’d had money and I lost it all. I had it back again and here I was losing it all again. That’s the point when I really realized there was a problem, because I went to a three day event to learn how to flip houses because they were giving away free iPod shuffles to all attendees. I met two people. I met a guy named Greg and a guy named Mike. They were my first two mentors.

What was so unique is Mike had a TV show. Greg was the bank. He was the guy that lent the money on all Mike’s deals. I remember listening to them talking about money, how they use money and what they did with money.

I remember a couple key things being an advisor: you pick up on money quickly when people are talking about something you’ve never heard about. They’re talking about things as an advisor up to that point that I’ve never heard about my life. It literally was 180 degrees different from everything that I’ve been taught in Wall Street.

At that point, I dove in and I started deciding that I had to learn what these two gentlemen knew and what all their friends knew. That was my first journey into understanding what the wealthy do with money that everybody else is not taught.

That journey began in 2014. It still hasn’t ended. That period of time has been just an awakening. I’ve learned the secrets of the wealthy: what they do with money and how they use money.

How they use money is very different from all of us. I mean, all of us. Literally, the secret sauce is what we’ve talked about in a lot of the other podcasts we’ve been on, that one magic change, that one thing that we have to change in our life and that will change everything. That is where your money goes first.

That place goes by many names, but Infinite Banking is a common name by today’s standards. Privatized banking, if you go back and look at the Rockefellers and the Rothschilds, that’s what they called it.

That one change is that we no longer use banks to store capital. We use mutually owned insurance companies in a way that no one has ever taught most people that I see.

Robert Leonard  7:59

We’re going to spend the majority of our time today talking about specifically buying cars and how there’s a better way to do that than the traditional ways that most people use.

However, before we get to that, I want to talk a little bit about what Infinite Banking is and lay the groundwork for the rest of the conversation that we’re going to have. What then exactly is infinite banking?

Chris Naugle  8:18

A lot of people don’t know what Infinite Banking is, because when they hear it, maybe they’ve heard of Infinite Banking, they think, “Oh, that’s specially designed and engineered for their whole life.”

All the gurus I’ve heard from said life is a terrible place to put my money, but Infinite Banking is not about the specially designed and engineered whole life. The whole life insurance policy that we designed to move our money, that’s all it is.

That whole life vehicle is nothing more than a machine. It’s a machine that moves our money in the most efficient way possible by all financial standards. I’m truly saying that it is the most efficient vehicle to move money through.

The whole life is what people think Infinite Banking is, but Infinite Banking is not the whole life. It is the process of taking back control of your money. It is essentially the method of becoming the bank and taking back the banking functions in your life.

I don’t want to go too deep into that, but Infinite Banking is nothing more than a process that allows you to do exactly what the banks do day in and day out. It’s exactly why the banks make 400% to 1300% by BaueFinancial.com. You can look it up yourself. [They make] 400% to 1,300% more money than we make on our money at the bank. We literally give up control of our money, and the bank takes over control and makes a ton of money.

All we need to do with Infinite Banking is take and mimic what the banks do and do it over and over. Infinite banking is a process that involves banking concepts and is really just moving your money from one place to the other and then taking it back.

Robert Leonard  9:54

If this is your first time hearing this concept, definitely go back and listen to Episode 60. Chris and I did a deep deep dive into this concept where we talk about this in general.

This is going to be part two, like grad school, if you will, of Infinite Banking. Go back and check that out if some of this is new to you.

Other than just buying cars, which we’ll talk about in just a minute, what else do people typically use Infinite Banking for? Things like real estate and other things like that?

Chris Naugle  10:17

Infinite Banking is some miraculous thing, you can pretty much use it for anything, but some of the common things that I teach and that I work with our members on is buying real estate.

When most people buy real estate, they go to a bank, a hard money lender or a private money lender. We give up a lot of interest in doing that. We went to a bank. Our interest rates can be pretty low, but the bank makes and takes between 80% to 85% of every single mortgage payment that you make in the first seven years. 80% to 85% of that is going to interest. Just look at your mortgage statement. It’s right there in front of you.

It’s called Velocity of Money. The bank understands and figured out how to beat you, even though you think it’s about the interest rate. It’s not. It’s about velocity. The banks are always winning.

Private money and hard money, I use it and I lend on it, but it’s also very expensive, 10-12%, sometimes more percent interest that you’re paying.

To use this in real estate involves just changing that one thing and putting your capital in this specially designed and engineered whole life and then using that money to buy real estate.

Today, I flipped a lot of houses. 263, to date. Now I don’t really flip as many houses. I lend a lot of money. I have become what Greg was back then. I became a bank. I use these banking policies, this Infinite Banking concept to lend money.

So what else can we use it for? Well, a lot of things.

I did a case study today with Shauna and she uses it every year. She puts money in this policy to fund her Disney vacations. She goes to Disneyland with her daughter. By doing it, just that one change, changing where the money goes first, she gets all the money back every single year for each and every Disneyland trip she takes.

You can buy boats this way. You can use it to cash. There’s nothing you can’t do. There’s really not paying off debt. If someone’s in debt, we could show you how to erase your debt very quickly using the same thing the bank does, that velocity. We do that using the Infinite Banking concept.

It really is infinite in what you can do, but today, we’re really going to focus on the one thing that I love and that’s cars. When I learned that I could get all the money back for every single car I would ever buy driving on, I immediately said, “That sounds too good to be true.”

Well, today, we’re going to show you how it works.

Robert Leonard  12:28

Let’s talk about that idea quickly about it being too good to be true, because a lot of people that have heard our previous episodes together have been intrigued by this concept of Infinite Banking. I’ve been super intrigued by it. I’ve had a lot of people reach out to me. I know you have too.

However, there are also a lot of people that listen to the show who are there on the web that are very skeptical of Infinite Banking. Some even go as far as calling it a scam. Tell us how and why Infinite Banking isn’t a scam and why these people who are critical of it are actually wrong.

Chris Naugle  12:58

It boggles my mind when someone says to me, “Oh, that’s a scam,” because it’s been used for hundreds of years. How can someone tell me something’s a scam if the Rockefellers, the Rothschilds, the Walt Disneys, the Joe Bidens, the McCains… I could keep going on. The Warren Buffetts all use this. They’re all using this.

Then somebody says to me, “Oh, that’s a scam.”

I say to them, “How in the world can something that’s 100 plus years old be a scam, if it has never once failed anyone?”

Not only that, then I go into all the books. There are books upon books that talk about these people like Tony Robbins and Robert Kiyosaki. They talk about this in their books. I think it’s the “Four Day Workweek.” He talks about it in his book.

When I hear that I just simply know one thing, I know that the person that says that has no idea what this is. The other thing too, though, that I’ll go into is, it sounds too good to be true. I wholeheartedly understand that because I remember sitting in Salt Lake City in the Cheesecake Factory with Mike, looking at him when he told me about this thing, leaning in…

I was an advisor of a high level financial advisor leaning into him and saying, “Mike, there’s no way it works that way. That sounds too good to be true,” but that is sort of just that answer. We want to tell ourselves when something does seem too good.

The next thing I did though is I took a leap in. I started researching and I started understanding it. I started doing the same thing that all your listeners will do. Google it. Look at the books from Tony Robbins and Robert Kiyosaki. What you will find is, this is not a scam. This is not too good to be true, not even close. This can never fail.

The only thing that can fail about the Infinite Banking concept is the person on the other side. The person that does not apply this in their life. That is failing, because you never try. You never applied for it. That’s really the big difference.

Some people will decide to take that leap and that leap will change their life. That much I promise them. Other people will stand on the other side, look at it and say, “Oh, that sounds too good to be true. That must be a scam.” They will never understand what true financial freedom can mean, because they were too scared to take that leap.

I always say that… You’ve heard me say this, but the quote by Will Rogers, I think sums it up perfectly. Will Roger says, “The biggest problem in America is not what people don’t know. The biggest problem in America is what people think they know that just *inaudible*.”

When you think you know something, that’s the biggest problem. You have to be careful what you think you know. You really need to find the truth.

 

Robert Leonard  15:32

What is interesting is that you and I actually have a bit of a similar background. Mostly, we have similar interests. We both have, or do ride their bikes. We like things with motors, cars, and specifically nice cars.

Tell us a bit about how your snowboarding led into cars and how that has impacted Infinite Banking.

Chris Naugle  15:51

Now, it’s a profound story, and I very rarely get to talk about it.  I’ll never forget it. There was a pro snowboarder by the name of Terje Haakonsen. He was from Finland. He was one of the best snowboarders of the days when I was a pro rider. Today, he’s a legend.

I’ll never forget. There was this video that was produced by Volcom. It was one of his sponsors. It was black and white. Now, I remember I was just a young kid and it flashes through his garage, okay? It shows his three cars in this garage. All three of these cars were Audis.

Now up to this point in my life, I didn’t even know what an Audi was. I knew what a Chevy was, a Ford was, and a Dodge. That was it. I saw these four little rings on the front of these cars and they were beautiful. Because he was my idol, and like somebody I really looked up to… Now he had these cars. I had to research it.

I looked into what an Audi is. What are these Audi S4s that were in his garage? I found out they were an all-wheel drive, German engineered car. It was unbelievable in snow. They rode him up Pikes Peak. Instantly, something came over me. I became infatuated with these cars. All I could think about is how do I get one of these?

Now remember, I had no money as a kid growing up. Even as a young snowboarder, I still had no money. An Audi, a German engineered car, just had a big price tag. I’ll never forget. That’s where the journey began.

The first Audi I owned, I don’t remember what year it was. Early 80s. I bought a 4000 CS *inaudible* garbage, but it had the four rings in the front. At that moment, everything changed. You’re going to see some of the Audis I own tonight, but that one moment started that love for automobiles. Not just automobiles, but all-wheel drive, German automobiles.

Robert Leonard  17:38

For those listening to this episode right now, I realized that podcasts are in audio form. They don’t generally make for a great medium to share a bunch of numbers, so Chris and his team have put together an eight slide presentation that walks through this next discussion we’re about to have. It really paints a good picture of it and it makes it easier to follow.

I’ll put a link to the presentation in the show notes below. You can just click the link in it, you should be able to access it instantly for free. You can check it out after the episode or you can pause the episode right here, open up the presentation, then play the audio while you flip through it. Really whatever works best for you.

Chris, we’re going to walk through these three different scenarios and the three different cars. Walk us through the first scenario.

Chris Naugle  18:22

All right, so you know, and I have visuals for those of you that are just listening, I’ll do a really good job of explaining this. Anyway, there are visuals that you should check out because it really just brings it and makes it all together real.

This journey of these three cars that I bought, these weren’t the only cars I bought this way. However, these are just three of them that I chose to explain. The first car was a $20,000 automobile. By today’s standards, you can look at it and you can say $20,000 that’s not a very expensive car. But back when I did this, that was a very expensive car for me. That was a car that was so unobtainable, that I didn’t know how I was going to make it happen.

The second car is a $45,000 car that I bought. It was my icon, my dream car that goes back to that Terje Haakonsen story. It was the car I saw in that garage that I always wanted and never thought I could have.

The third car is the vehicle that I just bought my wife when we had our daughter who is now seven months old. That was her gift, but what we’re really going to talk about specifically is not so much the cars. It’s the method of how I bought the cars.

You see, the Infinite Banking concept, like I said, involves you making one change in your life or adding one step to your life and that is where your money goes first. You all put your money in a bank or other sources that are traditionally known and that’s where you hold your capital.

If you want to buy a car, there are three ways to buy a car. First you could buy a car for cash. You could save enough money in your bank account or in some other traditional accounts. Take the money out which stops the flow of interest or the flow of growth and then give it to the dealership and exchange your money for this new automobile. You can do that.

In doing that you have no monthly payments. You don’t owe anyone any money, but you just exchanged your best dollars that you’ll ever have, your most valuable dollars today, for a car that is guaranteed to depreciate. You gave up the earning potential on that money.

So the first car that we’re talking about is a $20,000 car. If you bought this car in cash, you’d give up $20,000. You’d give up the right to earn interest or beans on that $20,000, but you’ve got the car to drive.

The second way you can buy a car is you could finance the car through a bank or finance company. In that you exchange monthly payments to the car dealership in exchange for the right to drive the car. Over a period of time, let’s call it five years, that car is paid off. You now have a car that is significantly depreciated, but you’ve paid all the money to the bank. You now rightfully own that car.

Most people, when they rightfully own the car, what do they do? They go buy another car, because that car that they rightfully own starts breaking down. It loses that new car smell. We know we all love that new car smell.

The third way you can buy us cars is very popular today. It’s leasing. Leasing is nothing more than you exchange a monthly payment for the right to buy or to drive and essentially rent a car for a period of time. Let’s say it’s three years. You’re making monthly payments to the dealerships or finance company and they give you the keys and you drive the car. When you’re all done, after that lease, you hand them back the car keys and the car. You walk away with nothing or chances are you released a car. The only person winning in leasing is the dealership.

There is a fourth way but I don’t suggest it: you could always steal a car, but we’re not going to talk about that.

The first car that we’re going to talk about is a car that I bought. It was a $20,000 car and how I normally would have bought this is I would have taken and bought it by taking a car loan from a traditional bank.

I remember when I actually went back the car loan would have been 5% back in this year, which was 2008, when I bought this car. The payment would have been $416 a month. Today, I look at that and I say that’s not a very big payment. Though back then $416 a month for a car, that was a huge number for me.

That was a number that I looked at because this is during that 2008 crash, that I didn’t know how I was going to do it. However, where there’s a way there’s a will. That roughly works out to be $5000 a year. So if I were to finance this car through a regular bank, I paid $2,917 in interest to the bank, but I’d have the car.

Car number two, and I’m just going to kind of sum up these three different cars. The first car, just so you know what it is, was an Audi A8. Okay, it was a beautiful automobile, a big luxury car. Okay, the second car was an Audi S4 Avant, all black with custom wheels lowered. It had all the trim outs. I paid $45,000 for that car.

Now, again, I would have financed that at the bank. But in this year after the Great Recession, interest rates are lower. I could have financed this at 3% with the bank over five years. That means my payment would have been $875, ouch. Meaning I would pay $10,500 a year for the right to drive this $45,000 car. If I did pay the car off, after five years, I gave the bank $3,806.

These are just the ways that we buy cars, folks. I’m just putting the numbers in front of you.

The third car is my wife’s Porsche. It’s a Porsche Cayenne hybrid, okay? $63,000 is the price, a five year loan at the rate of 4.5% would be $1,084 a month. That’s a heavy car payment, but if you want a Porsche, that’s just what they cost. That’s $13,000 a year. Total interest that you would pay over a five year period at 4.5%. The bank would make $9,758 two years from you.

If you look at that, really, this is just how we buy cars. This is how I bought cars for years and years and years. I never thought about how much money the bank made on me. I just thought about wanting that car.

The bank is willing to give me the money so I exchanged monthly payments to the bank for the right to buy it and drive the car.

Then I heard about this system and this system allowed me to completely change the dynamic of where and who gets those interest payments. It also allowed me to participate in something that Albert Einstein called the Eighth Wonder of the World. That is uninterrupted compound interest. Well, he calls it the most powerful thing in the universe. I say it’s the most powerful thing in the financial world. Those that understand it, earn it. Those that don’t pay it.

For many years, I was on the other side of that coin that Albert said those that don’t, pay it. Well, you can see if I paid interest to the bank for all these cars that I just told you about, I would have given the bank $16,481. Now that’s a lot of money that I want in my account.

However, if all I did is just change one thing, and that one thing is where the money went first, I then could change the dynamic of that.

Let’s now look at my way of buying cars. These are my numbers and I want to be clear about this. The numbers I’m going to talk to you about and give you, these are the amounts I was depositing. I was always a good saver. I was always saving good money, just like Robert, you’re a good saver too.

We’ve talked about this and this is one of the many similarities. I was always willing to give up a little bit today to save so that I could do the things and have the things that I wanted.

Well, my number that I was saving at this point in time was $18,000 a year. Now where was that money being saved prior to when I started the Infinite Banking concept? Well, some of it was going to my 401k, some of it was going to a savings account, some of it would go to my mutual fund investment account. Between all of those, I was putting $18,000 of what I was making.

Now, it’s not a lot of money, but for me, it was. All I did is I took and I changed where I put that money. You see, when Mike told me about this, and I learned what Infinite Banking wasm I changed just one thing. I changed where that $18,000 was going. I stopped putting money in the mutual fund account. I stopped putting money in my 401k. I stopped putting money in my savings account. I changed who held that money and where it went first. I put it into this specially designed invention, your whole life, all privatized banking.

The numbers on the screen whether or not you can see them or not, it shows me putting $18,000 a year away for seven years. I’m just showing it in the future. What I did is, for the first two years, all I did is I just put $18,000 into this vehicle, and I saved it. But by the third year, I didn’t just keep the money in there. I actually took $20,000 out. How I took the money out was through what’s called a loan.

You see the insurance companies, at any time you have money in your account, you can take that money out. The first year, I put $18,000, I could have taken $10,900. The second year, I put 18,000 and I could have taken $22,000. The third year I put $18,000, I could have taken $40,000 every year. The compounding works in my favor and I have more money to use.

In my third year, I bought this car, this Audi A8. I took $20,000 from my especially designed and engineered whole life. I took it as a loan. Now when I say that most of you think of a loan as something that has to be paid back, but what if I told you that the insurance company will never ever ask me for that $20,000 back? I probably would confuse you.

You see the insurance companies that provide these products and these vehicles for the Infinite Banking policies, when you take this loan, you’re actually not taking your money. You’re taking the insurance company’s money from their general account. They’re making you a loan from the general account.

However, the loan never needs to be paid back because the insurance company promised to pay a death benefit: someday when you graduate. It’s just a nice way of saying the day you die.

The day you die, they’re going to pay a death benefit to someone that you choose as your beneficiary, but if I take $20,000 as a loan, the insurance company just takes $20,000 off of that death benefit. I’m literally just leveraging the death benefit that they have to pay anyway.

Then, I now have $20,000 in my hand. The choice that I’m going to make now is what to do with that $20,000. What should I do? I bought this Audi A8. The Audi A8 that I buy, what I’m basically going to do is I’m going to use that $20,000 to buy the car. Though instead of paying that $5,000 per year, remember that $416 a month, to the bank, I’m going to pay it to my bank.

The same $416 a month I would have given to any bank in the United States that would have financed this car, I’m now the bank. I saved the money. I paid cash for the car with my banking policy. Now I’m going to pay myself back the same amount I would give to the bank. It’s the same thing. You’re going to exchange dollars to someone else, you’re going to give it to your bank, I’d much rather pay it to my bank.

In doing that, here’s the result for this very first car that I bought. Okay, this first A8. You can see the date stamp, I intentionally put that on there 4/62008. I think that’s June 4, 2008. I’ll never forget it sitting in the driveway of the house I lived in. That was my pride and joy.

Over the period of five years, I continued to save $18,000 per year into this plan. It wasn’t new money. I didn’t have to work harder for that. It was just money that I was already saving, but then what I did is instead of making $416 a month payments to the bank, I made them to my bank. I put them back in my policy.

What happened is over seven years, I put $126,000 into this banking policy, but I also paid myself $25,000 which is the same money I was just going to pay to a bank for the same car payments. But then, if you really look at the numbers, what ended up happening, and I got them up here on the screen, but I’m going to read them to you.

Here are the results of how I did this. The total deposits plus the car loan payments that I made to my bank, were $151,000. $126,000 went into the policy. $25,000 went to repaying myself for the car loan.

Remember when I paid myself back for their car loan, I paid myself the exact same amount I would have given the car dealership which included interest. That’s $25 grand. So $151,000 total was the amount that I laid out. Then I bought a car for $20,000. We subtract 20 grand from that. My net deposits were $131,000.

My cash value, after all this was done, the amount of money I had in my banking policy was $116,343. These are actual numbers right off of that. If we really did the math, because this is a lot of numbers, here’s the main thing you need to understand. For this first Audi A8, buying the car with my bank instead of using someone else’s. When I had this car fully paid for, in the fifth year, I literally had gotten back 89 cents of every single dollar that I spent on that car. Now it’s not 100%.

However,  I don’t know many people, I don’t know many at all, they could go buy a car, and five years later get 89 cents back for every single dollar they paid for that car. But it’s right there in front of you if you watch this video. There indeed I did. But you know, that’s not exciting.

Let’s get on to the real fun part. Robert, you’re into cars, right? Do you like fast cars? Alright, so do you know what this beast right here is? An Audi S4 Avant. This thing was done to the max. It had a growl to it that basically, when I revved that thing up in the driveway, every neighbor came out somewhere mad.

This car cost me $45,000 bucks. Remember, this is now year eight in my savings program in my Infinite Banking policy. The Audi A8 that I already had, okay, I sold that car, but I’ve gotten 89 cents back. When I sold it, it was pretty much like getting pure profit.

What I did then is in year eight, I took another loan for my banking policy for $45,000. Now at this point, I had the remaining balance in cash that I had in my bank was $130,000, but I took $45,000 out. I bought this gem right here that you, me and Robert are looking at. You all should look at it because it’s a beautiful automobile.

My car payments are steep and how I figured out my monthly car payment to pay my bank back was I just literally went online. I said, “How much would a bank charge me to get a $45,000 loan over five years?”

Right there, it would have worked out to be about $10,500 a year. So if that’s how much money I would have given any other bank, I’m going to pay that $10,500 back to my bank.

Now here’s the interesting thing, too, I want to point out now that we’re in car two is if you’re making monthly payments back to your bank, and if you’re in control of your terms of your loan, if something came up, you lost your job, things hit, got hard times like what I did… If I couldn’t make those $10,500 annual payments, what would happen?

Will some repo guy come and take my car? No. It’s my money. I’m simply treating my money the same way as I would treat the bank’s money. But the thing that’s different is if you didn’t pay the bank, the real bank, your car payment, guess what happens? They will come take your car and take your credit score from you too.

Now all of a sudden, you have a lot of climbing to do just to get back where you were. When you can’t make payments to your own bank, the only person that loses is really you. You don’t even lose, you just don’t make as much money.

I just wanted to be clear about these $10,500 payments. I set them up. I just treated my money the same as I treated the bank’s money. That’s what I would have paid the bank.

If I then continue to pay for this car for five years, okay, so I’m in year 12. Now, you see on the numbers here, if you’re looking at this video, in year 10, I was putting $18,000 away into this banking policy. However, in year 11, I was no longer allowed to put $18,000 away. I could only put $7200. So in year 11, I’m only putting $7,200 away.

The reason for that I’m not going to get into but it involves the IRS. It’s the net 7-pay rule, an IRS rule. You can’t fund these forever the way that we’re doing them. They’re built for banking. The IRS knows that we’re doing this. The IRS knows that all the money that I’m making in this is tax free so they limit the amount that I can put in, which is exactly why I have seven of these banking policies. Not just one. I have seven of these. I’m just showing you one.

However, that $10,500 that I paid myself back every single year, the results after the five years of that is years eight through 12, I put in $68,400. That’s how much money I deposited in my banking policy. $8,000 years, eight, nine and 10. $7200, years 11 and 12.

Then I also put 52,500 back into my bank, which just was me repaying myself for the car loan that I took from my bank. Though if we run the numbers here, in this five year block, I put $120,900 into this banking system, $68,400 went in deposits. $52,500 went as repayments for the car. I bought the car for $45,000. So we got to subtract that which means my net deposits into my banking system are $75,900. That’s how much money I put in after buying the car.

If we do the math in year 12, if we look at how much cash money the bank now has, which is $219,719. If we ran that, and we figured it out, that means that for this Audi S4 Avant, I literally just got back $1.53 for every single dollar I paid for the car.

In other words, for every dollar of that 45 I paid for the car, I got back $1.53. How many of you would be okay buying an Audi S4 Avant, knowing that you’re going to get for every dollar you spend on that car? Five years later, you get $1.53 back.

Folks, welcome to my world and welcome to the world of privatized banking, because this is how it worked for Walt Disney, Ray Kroc, for the Rothschilds, the Rockefellers, for Joe Biden, for McCain,. They all use this. They use it because of this.

Maybe they’re not buying cars. Maybe they’re funding political campaigns or funding the opening of McDonald’s payroll. Maybe they’re funding Walt Disney World, whatever it is, it doesn’t matter. I’m just showing you cars.

Anyway, that’s the second car. Now that car was an amazing car. I had a lot of great experiences, but you know what? I had to grow up. The cash value in that plan grew by $116,000 during that period of time, but this is the fun one.

This is my third car. This is up to today’s time. So just this car was bought last year. I think it was for credit. It was like right around Christmas time was right when we found out that my wife was pregnant with Viviana. That’s a Porsche Cayenne, a Porsche Cayenne S hybrid, all blacked out with black wheels. It’s a pretty nice looking car. It’s not my car. It is my wife’s. She wanted this car so bad. She never had a car like this.

I said, “You know what? Let’s buy it.” So we went into the dealership and we played the game of negotiating with the dealership on the car. We all have done that.

Robert, have you ever played the game of negotiating?

Robert Leonard  36:46

I have.

Chris Naugle  36:46

It’s fun, isn’t it? Like you sit down and you find the car that you like and talk about it. You slide your number across the table, they take that number to their finance department, they come back, they slide the number back over. You’re like, “Ah, we’re not there yet.”

So you write a number down, you slide it back over, they take it to the finance room, they come back, they slide it back over, you’re like we’re close, but we’re not there. We have to get to this number. If you want to earn my business. This is a number we got to be at. Slide it over and say this is it, final chance. They go into that little room. They come back, they slide it back and they say it’s your lucky day, Mr. Naugle. We’re going to make an exception. We really want your business and we’re going to make that happen. Great.

So once you get that monthly payment that you just negotiated. Now with this car, what I said is I said, “All right, well, let’s let’s do this.” They slide over all the financing paperwork.

I said, “I don’t need the financing paperwork.”

“Mr. Naugle, why not? We just went back and forth. We thought we were financing the car.”

I said, “I am but I am financing it with my bank.”

Then the car guy says, “Well, why did we go through all that?” I said, “Because I simply needed to know how much to pay my bank back. And if I didn’t know how much you charge me, how could I know how much to pay my bank back?”

True story. I mean, that’s what I did with this car over at Northtown Porsche. So how this car works, $63,000 car, I took the money as a loan for my banking policy. I paid myself back where I just started paying myself back as a matter of fact, $13,000 a year.

If I end up keeping this car for five years, here’s the result of the third car that I bought into my policy… I still am making deposits, but only $7200 deposits. I can’t put $18,000 anymore because of those IRS rules.

So I clicked the max, which is $7200, meaning over five years, I put an additional $36,000. If I keep this Porsche for the next five years, I should say Lorissa does. We’ve paid $65,000 with interest for that car over those timeframes.

If we run the numbers, just like we did the last time, my total deposits and car payments back to myself are $101,000. Okay, but I bought a car for $63,000. So my true net injection into my banking system, which is the total amount of deposits and car payments, minus the car is $38,000. So I put a net injection of $38,000 into this, if you look at the numbers right there in year 17, if I make it that long, I have $370,000 in cash today.

If we really just run the math, my plan grows by $122,354. I know some of you are just listening to this. It’s a lot of numbers. But here’s the number you should pay attention to for this portion. If I keep this thing for five years, at the end of the fifth year, I will have gotten $3.22 back for every single dollar I paid.

In other words, I paid $1, I got back $3.22 I got back $3.22 for every dollar I paid for that portion. If that doesn’t help you understand why this concept and why the Infinite Banking concept is something you need to learn whether you’re buying Porsches or Audis, it doesn’t matter. It works for Ford Focuses all the way up to Ferraris. We just have to add or subtract some zeros.

This was my story. These were my cars and what your cars are, that’s to be determined.

Earlier today I did a case study with a guy who’s buying a Silverado. It’s a $52,000 truck. We show them how to get all the money back on that Silverado purchase. All we did was change one thing. He didn’t work any harder. He didn’t work any longer. He didn’t give up control of his money and he didn’t take on any additional risks.

I got one final slide. I just thought this was a funny one to put up there, but my way of doing these car purchases means that I paid zero money to the bank for all three of these car purchases.

It means that I paid $16,481 to my bank. Now anyone that would have a problem paying themselves or putting $16,481 in their bank, then you really need to look at yourself in the mirror and ask yourself, “Do I have something wrong?”

Because no one should ever complain about paying themselves interest. You should complain when you’re giving all your money away to somebody else. The net result of these three cars is that all the money, every penny, of all three of these cars is now in my bank, not somebody else’s.

Once I realized that, it brought up this movie called Dumb and Dumber. You guys remember where they’re on the little scooter driving he’s got that goofy look. He says, “Just when I thought you couldn’t be any dumber, you’d go and do something like this, and yet, totally redeem yourself.”

Well, when I learned how to do this, that’s what I thought. I just redeemed myself, because I went through a lot of hard times. This system, this Infinite Banking process has completely changed everything I do from buying real estate, to buying cars, to lending money, etc.

It also helped me climb out of debt. I know I’ve talked to a lot of your viewers from the prior one. A big thing that we’re helping them do is erase their debt in a much, much faster way than they ever could possible. Again, the thing everybody loves about it is it’s just adding one additional step to your life.

Robert Leonard  41:50

Those previous examples when you’re talking about getting the money back is that because of that last car example, you had a net addition to your banking policy. I think it was like $38,000 or so. Your cash value growth after purchase grew by about $122,000. Is that where that $322 comes from? Is that you’re gaining… the value of your cash grew to $122,000 while your net deposit was only 38 so the difference is times 3.22?

Chris Naugle  42:17

That is correct. So the thing you have to understand is that we didn’t really cover and in this process of all three of these car purchases, every dollar that I put into these banking systems was earning a guaranteed 4% plus dividends.

In this policy, it was about 6.2% I was making that was 4% guaranteed. The rest of this is the dividends the insurance company paid me.

But you see, every time I took money out whether it was that $20,000 car or the $63,000, every time I took that money out, I never stopped earning interest on all of my money. So if you did this with a regular bank account, you’d make deposits in your bank and your bank would pay you whatever the interest rate is.

However, the second you take the money out of your bank, the interest stops. The insurance company, remember what I said earlier, when I take the money out, when I take these loans, I’m not taking my money. My money stayed in the account earning that 4% plus dividends the entire time. That’s what Albert Einstein talked about with the eighth wonder of the world, uninterrupted compound interest.

This is the effect of uninterrupted compound interest and money growing. This is the third car money growing over a 17 year period without ever being interrupted. Never ever having to be interrupted, or having withdrawals come out that stopped the flow of that interest results in no. It’s just simple mathematics, folks.

We’re just not taught how this works because teaching somebody how this works, when I was an advisor, meant I didn’t get paid as much. True story. In order to have a banking policy build a specially designed and engineered whole life like this, the advisor has to give up between 60% and 90% of their commission because in order for you to have access to all of your money, somebody has to get for somebody else to get.

That $3.22, yes, you explained it, but how that happens is two things. Number one uninterrupted compound interest on every penny of the money I put in. Number two, remember I was paying myself back for those cars with interest. So now I was getting all that money from the interest that I used to give away to the banks. Now I’m keeping all that. Now I’m making money twice, making money on the policies interest. I’m making money by paying myself back with interest.

Robert Leonard  44:19

One of the things that I’m still trying to fully wrap my head around with this Infinite Banking policy is let’s take this last car as an example. You put in $63,000 each throughout the years. Just for simple numbers, we’ll say you’ve put in a total of $63,000.

You’ve saved up that money and you’ve made those deposits into your policy. Now you take that money out to buy the car, and then you have to put that money back. So to me, it almost seems like you’re paying that $63,000 twice into your account just to get the money out once. How is that working? What is the mechanism there?

Chris Naugle  44:52

It’s not a mechanism. You’re correct. You’re treating your money the same as the bank’s money. So you’re saying you’re putting that money in twice. Once you deposit $63,000, for your regular savings, your regular deposit. Now all of a sudden you take it out and you buy a car, and then you pay it back into your policy again.

You’re thinking you put it in twice. But let’s think of the alternative, what is the alternative way to buy a car? Well, you could keep all the money, the $63,000 in your account, go to the bank, finance the car, and exchange monthly payments to a regular bank.

In that turn, the bank makes all of that interest. If you remember earlier in the slides, I’ll go back to it. But in the beginning of this, we showed all the interest that you would end up paying on each one of those cars.

On that last car, if we had done that, if we didn’t take the money out of our banking policy, and then pay it back to ourselves, we would have ended up paying $1,084 a month to a car dealerships finance company, which means over five years, they made $9758.

I just decided to change who gets that $9758 and pay it back to myself.

Now, here’s the thing that I’ll say to Robert, it’s important to understand: do I have to pay myself back for that car? I don’t. It’s my money. I saved that 63,000 for that third car.

If I took that $63,000 out, like I said earlier, that was a loan. I don’t have to pay that loan back, the insurance company subtracts that from my death benefits. It’s my choice because if you’re going to be an honest banker, you need to treat your money the same as the bank’s money.

If I took $63,000 from a bank, I’d have to pay that bank back. I treat my money just like the bank, and I take a loan from my bank. I pay my bank back. So it’s just my choice.

Now it’s what we teach and I tell everybody, it’s your option. It’s not your obligation. That monthly payment right there, $1084 for that portion, that’s my option to pay that back to myself. I don’t have to.

If times get tough, and I didn’t have $1080 for one month, and I don’t pay it back to my policy, it just means that my policy has $1084 less money in it than it did before. That’s all it means.

 

Robert Leonard  46:58

A lot of people will save cash for a car, say that $63,000 that we initially put in, in hopes of not having to have a car payment. I feel like it could potentially hurt some people where they put in the $63,000 and then they withdraw it to pay cash for the car. Then they still have to make payments after they’ve already saved it up. So what happens if we decide we don’t want to make those payments? How does that impact the policy?

Chris Naugle  47:19

Great question. It just wouldn’t grow as fast. So you could and it would still work because let’s just do the math. How much money are you earning on this specially designed and engineered whole life?

Remember, it was 4% guaranteed plus the dividend in 2021? That’s 6%. But if you take a loan from the insurance company, they charge you 5%. So if it was just the first year, how much money are you making? You’re making 1%.

Right now, if you put $63,000 in your bank account, and you went and you bought that Porsche, you took $63,000 out of your bank account, is your bank agreeing to still pay you 1% on money that’s not in that account? No.

So is it still better to buy a car my way versus buy a car using a traditional bank? Yeah, 1% better, because that’s the spread.

Let’s see, here’s the part that is complicated and hard to explain. In the course of the time that we had today, you have to understand uninterrupted compound interest, because if I deposit $63,000, and that $63,000 sat in that account over five years, just hypothetically, doesn’t matter any period of time. The $63,000 isn’t how much I have in the account, the $63,000 grew the first year by 6%. Then whatever that amount that it grew grew by another 6%.

You see, it keeps compounding up. When I take the loan, the 5% loan that I took from my policy, that five percent is never going to go up. It’s not compounded. It’s simple interest.

One stays level and the other keeps going up. Even if you never paid these loans back to yourself, you’d still keep making more and more money. Would you get all the money back for all the cars you’re gonna buy? No. Would you’ve been better off than you are now if you just took cash from your account? Way better.

Robert Leonard  49:01

If we were to deposit the $63,000, take that back out to buy the car, and then not pay it back, are we still earning that 1% interest spread on the $63,000?

Chris Naugle  49:11

Yep, on the full amount. Now that’s not… I want to be clear. Not every insurance company will do this. We’re talking about very specially designed policies with specific companies.

The companies we use are what are called non-directly participating companies, which means they will pay interest in dividends on the full amount even if you take all of that money out.

I just want to be clear. I don’t want somebody running out to Allstate, or to New York Life, or to Northwestern Mutual and taking out a whole life policy then thinking it’s going to work this way. You will be very mad at me. These are very different from a regular whole life that you would buy at the life insurance store. They’re completely different actually.

Robert Leonard  49:47

As we go through this pandemic, there are a lot of people that are using this time to slack off and be lazy, but there are others that are using it to get better. I know personally, I’ve had some peaks and valleys times where I’ve been a bit lazy and other times where I’ve really gotten after it. What have you done during this time to better yourself?

Chris Naugle  50:05

I’ve used this time and I call this the big pivot. I’ve pivoted everything I’m doing because I couldn’t do the same things I was doing prior to the pandemic.

Now in the pandemic, I’ve used the time to learn, read a lot of books, read books about history, so I can understand what’s coming. But the biggest thing I’ve done is I’ve used this time and zoom to really get in front of more wealthy people that are doing this and using this, to learn better ways to do things that I don’t yet know how to do.

I think everybody should be using this time wisely for that. This is that time where some of us don’t have all the things that we had to spend time o.n. A lot of us have extra time. If you’re not using that extra time wisely, I think you’re giving up a great opportunity that is right in front of you.

Robert Leonard  50:49

Chris, thanks so much for joining me again. Truthfully, my brain hurts, it always does. This is the third time we’ve chatted. My brain hurts again, just like it did last few times. I’m sure it will be the fourth time we talk. There’s just so much in here that I love. It’s new to me, I’m learning it. I know everyone in the audience is learning too. I’ve gone back and listened to all our episodes, multiple times, just to fully wrap my head around it.

As a reminder, for everyone listening, I’ll put a link to the presentation that we discussed in the show notes below. You can just click that link in your favorite podcast player to get that for free.

You can follow along as Chris and I talked through those three different car scenarios. We also have this going up on YouTube as a YouTube video so if you’re listening to this in your podcast player, there is a companion YouTube video where we show the presentation as well. You can check that out if you’re interested.

Chris, where can everyone listening go to learn more about you and what you’re working on?

Chris Naugle  51:39

Yeah, so the best place to learn about me is my website. It’s ChrisNaugle.com. I’ve got my book there. All of you can get the book, “Mapping out the Millionaire Mystery” for free.

All the videos, I truly believe that you got to give your best stuff away for free so you can learn about this concept. You can learn a whole bunch of different ways to use infinite banking in your life. It’s all right on the website. Everything’s for free so please use it and enjoy it.

Robert Leonard  52:03

Those links will be below in your favorite podcast player as well so be sure to check those out.

Chris, thanks so much. I’ll talk to you again soon.

Chris Naugle  52:10

Thank you so much.

Robert Leonard  52:12

Alright guys, that’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week.

Outro  52:18

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