17 November 2023

In this MI Rewind episode, Robert Leonard chats with Chris Naugle to talk through the concept of “infinite banking” in-depth. Chris is an accomplished entrepreneur, real estate investor, and author. He is the CEO and Founder of FlipOut Academy and The Money School, while having also participated in an HGTV show “Risky Builders” with his wife Lorissa.



  • What is infinite banking?
  • Why it may, or may not, be “too good to be true.”
  • How to use infinite banking to get out of debt.
  • How to use infinite banking to build wealth.
  • Who uses infinite banking successfully right now?
  • And much, much more!


Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Robert Leonard  0:02  

On today’s show, I sit down with Chris Naugle to talk through the concept of infinite banking in depth. Chris is an accomplished entrepreneur, real estate investor, and author. He is the CEO and Founder of FlipOut Academy and The Money School, while having also participated in an HGTV show Risky Builders with his wife, Lorissa.

If you listen to my other podcast, The Real Estate Investing Podcast, you might be familiar with Chris, as I had him as a guest on that show just a few weeks back. That episode got a lot of attention and I received a lot of direct messages on Instagram, Twitter, and even emails about the episode.

I then decided to bring Chris back for an even more in-depth conversation about this concept of infinite banking and the money multiplier. A lot of you were skeptical of the concept so I wanted to bring Chris back to really dive in and talk about the nitty-gritty of this idea. 

You’ll hear throughout the episode that I’m skeptical as well, and I’m no expert so I hope that I was able to ask many of the questions that you guys have as well. Without further delay, let’s get into my conversation with Chris Naugle.

Intro  1:09  

You’re listening to Millennial Investing by The Investor’s Podcast Network, where your host Robert Leonard interviews successful entrepreneurs, business leaders, and investors to help educate and inspire the millennial generation.

Robert Leonard  1:31  

Hi, everyone. Welcome to this week’s episode of The Millennial Investing Podcast. As always, I’m your host, Robert Leonard. With me today, I have Chris Naugle. Welcome to the show, Chris.

Chris Naugle  1:40  

Hey, thanks for having me on.

Robert Leonard  1:42  

Welcome back. I’m excited that we’re talking again. We talked recently on Episode 31 of my other podcast, The Real Estate Investing Podcast, and the audience seemed to love it, based on all the feedback I received on Instagram and Twitter. I then had to have you come back for more. 

For those listening to this episode, who haven’t heard the episode we did together on the Real Estate show, tell us a bit about yourself and how you got to where you are today.

Chris Naugle  2:03  

I’m just an average guy that grew up in a very lower-middle-class family and my mom always taught me to dream big and don’t ever not dream. That’s what I did. It’s gotten me quite far. 

As a young kid, I have always wanted to be a pro snowboarder and coming from Buffalo, New York, that’s a tough thing to do. Though age 16, I was an ambitious kid. I was always going out there hustling and trying to get the things that I wanted and started working. I hated working for someone so I decided to go independent or entrepreneur-wise. 

I started a clothing line in mom’s basement and all that clothing company, Phat, and a lot of things happened from that point. A year into having Phat Clothing, I got my next big idea of having a skateboard and snowboard shop. I then have the clothing line, which I was actually literally taking my clothes, making them in my art teacher’s classroom after school. We were screen printing them.

Then I would take them in school and sell them in school. It was a wild time and my friends were doing the art. We were just having a lot of fun with it. That turned into Phatman Boardshop. 

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With Phatman Boardshop, I started a store at 17 years old. You don’t really realize what financial commitment that takes and at this time, I think I had 1986 Buick. I had a KX125 dirt bike and a baseball card collection. I guess about all I had and then the shirts. I needed $70,000.  I went around and I asked everybody for money. Everybody said, “No, you’re crazy.” 

My dad said, “Come get a job at the factory.” I didn’t talk to my dad for almost two years. My dad and I are good now. That was then.

My mom saw this happening and almost watched my dream dying. She put her house up on the line so that her crazy punk snowboard kid could chase his dream and create Phatman Boardshops. That was November of 1994. I will never forget that day. That’s when we opened. The store was there. I became a pro-snowboarder and all was good up until the early 2000s when the dot-com crash hit. I was welcomed into whatever recession was.

During that time, I had to get a job. I literally was applying at Little Caesars, which I don’t think they’re even around anymore. Maybe they are, but maybe a pizza place to deliver pizzas. I ended up getting my resume accepted for a financial firm.  

I’ve watched the movie Wall Street and I thought, “I could do that. I can do that temporarily until my shops come back.” So I went and I worked in Wall Street, if you will. I absolutely loved it. That was the early 2000s.

By 2008, I was a top advisor at the firm I was at. I was absolutely crushing it. I had flipped a couple houses because just like so many people in real estate, you see it on TV, you think, “23 minutes, I can flip a house? Sign me up.”

In 2006, I did my first flip. I made $8000. There’s a chance. In 2007, I did another. In 2008, I had big ambitions. My lease was coming due for my main store and I bought a dilapidated paint store down the street and didn’t have the money to close on it. but I got resourceful and I ended up finding a hard money lender to lend me $340,000. 

You heard when I said it did this, they always say timing is everything. Man, *inaudible* that was the Great Recession and it brought me to my knees. At that point in my life, I almost went bankrupt. I literally was one payment away from being completely bankrupt. Then this hard money lender who I nicknamed Knuckles wasn’t okay with just taking the strip mall back. I think he would have taken a couple things like my fingers. 

However, we ended up paying him off because I went home that night in dire straits, I said to my girlfriend who just moved in, I said, “Sweetie, I need your help. I need your help paying the mortgage. I need your help paying utilities. My friend Pete is going to move into that bedroom down there. My other friend Jessica is going to move into the bedroom upstairs.”

I paused and I’m thinking, “Okay, she could beeline for the door and I’ll never see her again.” I waited and that was history because she stuck around, I guess she kind of liked me. 

We got through that in 2009 to 2014. We just started buying real estate again like a fool and was doing well. In 2014, I had 36 units. Then all of a sudden the bank decided to say, “Hey, Chris, you don’t fit in a little square box anymore.” They froze my lines of credit. They called my mortgages. I was done. I had to sell all 36 units. I mean, she’s my fiance then, Lorissa, had to sell her dream house. We split. I moved into one of my last apartment buildings that I still had. 

At that point in your life where you’re like you’ve had money and you’ve lost it. Then you get it back again and then you lose it again. Something was very wrong. 

What was wrong is I was following the same system that they had taught me as an advisor. I was taught how money worked a certain way and it was wrong. In 2014, I started my journey of following multimillionaires and billionaires around. I started learning the secrets of what they do differently, why they do the things they do, why we’re not taught what they know. 

Today, a lot has happened. I mean, for the audience that hasn’t heard it, my wife and I had a show on HGTV called Risky Builders. We flipped 260 some houses. We still do some real estate. 

Today, I didn’t come up with this name, but I’ve got the nickname of America’s number one money mentor. I go around teaching people how to take back control of their money and teach them how money really works.

Robert Leonard  7:01  

Throughout this episode, I want to do a deep dive into this concept of infinite banking created by Nelson Nash, or what you and Brent Kesler call the money multiplier. 

After our last episode on the real estate show, a lot of people reached out to me and asked what my opinion on the concept was, or if it was too good to be true. 

Chris, you know this, I felt it was too good to be true, since I first heard of it a year or two ago. You even felt it was too good to be true at first as well. I also don’t feel like I know enough about it to really explain the concept or even make an educated decision about it. Tell us in simple terms what is infinite banking or the money multiplier.

Chris Naugle  7:39  

In the simplest form of what is infinite banking and it’s essentially it’s a concept that allows you and or your business to become financially independent by becoming your own bank. What do I mean by that? I mean, it’s essentially a very simplified way of controlling your own money by taking back the banking functions in your life.  

I know that probably doesn’t mean a lot to people hearing this, but essentially, what if there was a place where you could put your money? Not the bank. What if there was another alternative and where you could put your money, but where this place was paid you a guaranteed 4%? Then when your money was there, you still had control to go in and take that money out. 

When you took the money out, you see, you weren’t taking your own money. You were taking the company, or in this case, it’s a mutually owned insurance company. You were taking their money. They were gladly giving you their money, because your money was there and they were using it as collateral. 

Here’s the difference: what if your money never stopped earning interest? Remember, I said you’re earning a guaranteed 4%? What if it never stopped earning 4%? You’ve then got to take that money out and go make more money on that. What if you just took that money and you paid off your Visa? Your visa was charging 19.99%, very common. 

So your money is over here making 4% plus dividends. You took the money out because the insurance company loaned you the money from their general account at a lower interest rate than what you’re making. Then you paid off Visa, which was charging 19.99%.

Now, if you just did one additional thing, and you took the amount you used to pay to Visa and you put it back into your account over here, you essentially just made yourself 19.99% without changing anything. 

The other thing you did is your money never left the account. It never stopped earning interest. It is literally the single greatest way for you to understand uninterrupted compound interest and earn that on your money. This is exactly what the wealthy know. This is why they’ve used this.

Robert Leonard  9:28  

So why was it even created? What is the problem that it’s solving? 

Chris Naugle  9:31  

It solves the problem of control. I guess when you really take this back, there’s really two different schools of thought for where and how this was created. The Rockefellers far back, and you can trace it way back to the Rothschilds and the Rockefellers if you really dive in… But they had so much money, they didn’t trust banks. 

Back then banks weren’t strong. They were worried about losing money. They want to find a safer place to put their money. They looked at all the institutions and they said, “Okay, giant mutually-owned insurance companies are their safest place. So how do we create a banking system using these insurance companies?”

Well, there’s only one way into the insurance company’s general account on these mutually owned companies and that was through a product called a whole life insurance policy.  

What they did is, unlike the whole life, you buy for death benefit for life insurance, what they use is very different. They found a way to create a banking system using this product and it’s used very differently than what you know of it. That’s one school of thought. 

The second school of thought is the thing called BOLI, bank owned life insurance. You see, a lot of people say this sounds too good to be true, but if it’s too good to be true, then why are banks and conventional banks, the number one purchasers of whole life insurance in the world, they own more whole life than they do on the land and the building’s combined. 

That right there should just kind of perk you up and say, “Well, if the banks are doing it, what am I not being told?” Well, that’s because banks understand things we don’t. They’re not stupid. They just know some things we don’t know. 

Then you track it straight through, and we’re gonna get into this, but when you start looking at some of the people that have used this, you really have to ask yourself, “If I think this sounds too good to be true, but if it’s too good to be true, then why are they using this? Why are all these people throughout history using this exact concept?” 

Not only that, why are people that we admire and look up to writing about it in their books? People like Robert Kiyosaki and Tony Robbins… I could go on for days with books, but it’s in all their books. They talk about it. 

When I first heard about this, I thought this sounds too good to be true. Yet remember, folks, when I heard about this was in 2014. I knew all about it my whole life. I was in the financial industry at a high level. I knew exactly what my whole life was. I knew how it worked. I thought I did and then all of a sudden, I sat down with one of my lenders in Salt Lake City at the Cheesecake Factory, and he started telling me about this thing that he’s using. 

I asked him, I said, “Hey, how do you lend money to me? Where’s the money coming from?” He starts telling me about this system he uses. All of a sudden midway through, I said, “Whoa, whoa, hold on a second. You’re talking about whole life insurance man and whole life insurance doesn’t work that way.” 

He looks me right in the eye and he says, “Well, Chris, if it doesn’t work that way, then how have I been lending you money the way I have? I’m not the expert, you are. But I’ll tell you something, it works exactly how I explained it.”

Right then and there, I felt like the biggest idiot, because this is my lender. It was somebody who I knew was very wealthy. They had a TV show and everything. Then here I was telling him that he’s wrong and I’m right, because I thought I knew something that I didn’t know. That began that journey of really diving in and learning all these things that we’re going to talk about tonight.

Robert Leonard  12:27  

Before we start our walk through this strategy and product, just to clarify, so you’re saying there are two separate products. There is a whole life insurance but then there’s also another whole life insurance product that is mutually owned. Those are two separate things?

Chris Naugle  12:41  

No, no, when you look at creating an infinite banking concept you need to find an insurance company that supports this. You can’t just go to any insurance company that sells life insurance and get a plan that’s going to work this way. Actually, it’s quite the opposite. 

I might be wrong on this, but there are about 10 companies that do this in the entire country… Of the 10 that I know, there are only about four that we use. When I say mutually owned, mutually-owned is the actual insurance company, the old school insurance company. They have to be mutually owned. 

The difference between a mutual owned insurance company and a publicly traded is nothing more than publicly traded, stocks in Wall Street, right on one of the indexes. Their company stock is traded with a mutually owned company. There is no stock that’s traded. They are owned mutually. The only owners of mutual and insurance companies are technically the policyholders. 

Therefore, because the policyholders are the owners, they share in the surplus called dividends. But publicly traded insurance companies, the dividends go to the stockholders. That’s kind of what I meant by that. 

Robert Leonard  13:39  

The products themselves are more or less the same, but is it the ownership structure of the company that’s offering the whole life insurance?

Chris Naugle  13:47  

And you need that mutually owned, because you need them to basically pay the dividend. There’s way more to the way that the plan is built than just that but I don’t know how deep we want to go down into that rabbit hole.

Robert Leonard  13:58  

It’s also important to note that these insurance companies are privately owned either by a small group of owners. It’s owned mutually by everybody that has a policy, like you said. It’s similar to a credit union, if you’re familiar with that structure. Everybody that’s a member of that credit union, they technically are an owner of that organization. So think of it that way, if you are familiar with it.

Chris Naugle  14:19  

That is correct. These companies are massive. You got to look at a lot of people thinking, “Oh, these are smaller little hybrid dangerous insurance companies?” No, no, these are insurance companies that have been around for well over 100 years that have paid dividends consecutively for every year they’ve been around. 

We’ll get into some of the names but once you start looking at the size of these companies, then you’ll understand why banks use these. Why do the Rockefellers use it? Because these are the most sound financial institutions in this country. Actually, probably in the world.

Robert Leonard  14:47  

Let’s walk through it from the very beginning to the end. If someone decides right now that they want to give this a try, what is the very first thing that they need to do?

Chris Naugle  14:57  

Do a call with me to understand what it is they’re trying to accomplish, because this isn’t just some magic bullet, right? This isn’t like one thing that solves everyone’s problems. 

We have to understand what it is that you’re trying to solve. Are you in debt or you are trying to pay off your debt? Are you trying to get all the money back for every car you’re going to buy driving? Do you want to buy real estate? What is it that you’re trying to do? 

We have to understand the individual’s needs. Once we understand their needs, and where they’re at in their situation, the other thing that I’ll do is always ask them, “Where’s your money going today?”

Everybody makes money. They have income coming in. So where does your money go? We’ll dissect where their money goes. Right then in there, I can kind of give them an epiphany moment, because I can say, “Here’s the way you’re going to build your wealth, it’s not going to be about you working harder, or going out hustling and doing more deals. It’s simply going to start with you taking back the money that you’re giving away.”

Think of how much wealth we could all build, if all we did is focus on that one thing. That one thing is to take back the money you’re giving away to everybody else. You get credit cards every month you write a check for interest to that credit card. What if you didn’t have to write that check to the credit card company? You can write that check to yourself. Cars, we finance cars. If you finance a car, you pay the car finance company interest plus principal, what if you could write that check to yourself? What if you could take back all the interest that you pay to everybody else and you could pay it all to yourself? What would your financial picture look like? 

Well, right then and there when I say that, people say, “There’s no way I can do that.” You are absolutely wrong. You know why I know you’re wrong? Because I did it. You kind of heard my story. I wasn’t exactly like the perfect picture of finance. I was a bloody mess. I was so in debt. I failed numerous times. Here I was a financial advisor advising people what to do with their money and I’m failing myself, folks. 

That’s why there are statements that say, “People take a Rolls Royce to Wall Street to get advice from people that took the subway.” No disrespect to financial advisors, but let’s just put things where they are and let them fall for themselves. That’s the whole idea. 

People need to understand that the people we get advice from sometimes are not the right people we should be taking advice from and I learned this the hard way. When I finally learned that the people that had all the money were who I should be getting advice from, everything started to change. I used this system to clot off well over $100,000 in terrible debt. It happened so fast that nobody would believe me if I told them. 

Robert Leonard  17:08  

Let’s assume somebody calls you and they set up the call. They’re going through it. They have let’s just say maybe some student loans, that’s usually pretty typical, maybe a little bit of credit card debt. Nothing excessive. Maybe a small car loan, maybe a mortgage, maybe not. Let’s assume your average debt that a typical consumer has that’s between 25 and 40. What types of things are you telling? 

Chris Naugle  17:30  

I’m basically looking at where that money is going. A lot of times people are trying to get out of debt by making extra payments to the credit card companies or extra payments to their student loans. I always tell people, “Well, hold on a second, let’s build a system for this.”

The first thing I would tell them is I would say what if we just changed one thing and that was where the money went first. Let’s just say you put your money over into this specially designed and engineered whole life plan, for the rest of this call let’s call it the infinite banking policy. You put your money there first, instead of putting it in your bank first. Then once it goes there, the interest clock starts ticking. You’re going to start earning uninterrupted compound interest of a guaranteed 4% plus dividends. 

Let’s pick one company, MassMutual. Now I’m going to call a company out. It’s a ginormous mutually owned insurance company. Right now their dividend is 2.2%. So 4% plus 2.2 is 6.2%. 

We then put your money over there, now it’s earning 6.2%. Then what we would do is we would immediately take out some, not all of that money, we would take some of that money out, then we would start applying that in a very organized fashion called snowballing and we’d use the velocity of your money to pay down those debts. 

You put it over here, we take it out. Then we just pay the bills that you’re paying regularly. Maybe not your brands and your groceries but your debts. Let’s get rid of the debts first. 

When we pay your credit card down, the monthly minimum payment that has to go to that credit card decreases. If we just took the difference between what you were paying and what it decreased to, and all we did is we recapture that money back over as a loan repayment to your banking policy, your infinite banking policy, what you just did is you just recaptured the interest that you used to give away. 

What if you just kept doing that every three months, you’d make monthly deposits over here to this infinite banking policy, then you took the money out, you pay down your debts, your student loans, your whatever it is, then whatever you freed up, you just recapture that same amount. 

So the amount you spend every single month is exactly the same. The difference is how much of it you get to keep while this whole thing is going on. This is just paying off debt. There’s a lot of other ways to use this. 

While this whole thing is going on, your money over here in this infinite banking policy, remember, has never ever stopped earning 6.2% on the full amount you deposited in it, not the amount that’s left after you took loans, but the full amount, because your money never left your account. 

The insurance company has been loaning you money from their general account the entire time. This is the part where people say, “Wait a second, I’m taking loans to pay off loans? That doesn’t make any sense.” 

You see when the insurance company loaned you money, they don’t care if you ever pay them back because the insurance company also made a second promise. They made a promise that someday when you graduate, the day when you die that’s just a nice way of saying die. I call it graduation day. The day you graduate, there’s going to be a death benefit paid out to your heirs and to your beneficiaries. 

The insurance company just says, “Okay, well, these loans we’re giving you, which is basically the money that you deposit, we’re just making you loan so your money can continue to earn interest, we’re just going to subtract that from your death benefit.” So essentially, your death benefit is literally just the leverage you’re using when you’re taking loans. You don’t have to pay the loans back. 

But I just said a second ago, we’re going to take the money that we free up over here on these credit cards and student loans, and we’re going to take that money and put it back into the policy, because you have to treat your money the same way you treat the bank’s money. 

If you’re the bank, and you’re taking money from your bank to pay off things, or buy things, shouldn’t you take and put that money back in your bank, because if you borrowed money from your bank, your real bank right now, you would pay your bank back principal plus interest, because that’s what you’d have to do. There are consequences. If you don’t… Well, you should treat your money the same way you treat the banks, because you should be an honest banker and it’s just logical.

Robert Leonard  20:53  

Why would anybody pay it back? I guess that’s my biggest question based on what you’ve said so far. If we’re going to just essentially net it against our life insurance payout at the end, why even pay it back?

Chris Naugle  21:02  

It makes good sense because every dollar you pay back is money that goes into your account that you can use again. Remember, the insurance company is charging you interest. They’re paying you 6.2% as of 2020, but they’re charging you interest. 

Right now, MassMutual charges 5% on those loans. If we take the money that you free up over on the right side, from the student loans and the debts that you’re paying down, and we put that back as a loan repayment, what’s happening is every single dollar that you put back into your policy as a loan repayment, means you have more money available the next day. It also means you’re paying the insurance company less money. 

If you were paying them 5% on $10,000 and you pay back $1,000 every month, the next month you’re paying 5% $9,000, $8,000, and $7,000, but your money always continues to go up over here because it’s compounding. That’s the magic and it’s very difficult on a podcast without drawing it to show this. 

However, it is literally something that most people don’t understand. They don’t understand how compound interest works. Albert Einstein did. He called it the eighth wonder of the world, the greatest thing. He also said those who understand it, earn it. Hence the people that use these vehicles, they’re making uninterrupted compound interest, so they understand it and they’re earning it.

Those who don’t pay it and that is everybody over here who’s paying their debt every month, just keep doing it, just because we think we have to. Why would you pay those loans back? Because it just makes logical financial sense. It’s mathematically going to work in your favor, because the more you pay back, the less money you’re paying the insurance company and the more money you’re making and keeping. 

If you had it, you freed it up over here paying off your debts, and you’re used to giving that money to these debtors, but now all you’re doing is you’re just putting it back in your plan and you have access to that money immediately the moment you deposit it there, why wouldn’t you?

Robert Leonard  22:39  

Well, I guess for me, the way I would think about it is just let’s assume there’s a million dollar payout upon my death, just say as a round number. If I owe, say $100,000 in debt total, that’s a lot of money in today’s terms. That’s a lot to repay. Whereas if you just net $100,000 grand against a million, you will think, “Oh, well, I still have $900,000, right?” That’s not so bad. I’d rather just not pay that back now and then just deal with my heirs getting $900,000 instead of $1 million. So why even pay back?

Chris Naugle  23:07  

Oh, it’s not about paying the death benefit back. Who cares about that? Actually, in a perfect world of infinite banking, if you could do this, it’s not possible. But if you could, you would make it so that nobody gets any money upon your death. That would be the perfect world because you want to use all your money. 

I’ve never met a single person in my life that cared more about the money someone’s going to get the day they die than they do about the money they have to use today. So you’re getting off the main goal of why we’re repaying these loans. 

The number one thing and we haven’t got into what the wealthy do different, but the number one thing the wealthy do, and that they understand is they understand that to make and build wealth and to keep wealth, your money has to move. It has to be in motion. 

Think about it. Let’s take it back and talk about a bank, right? What does a bank do? You go to the bank, you deposit money in the bank. What does that bank do immediately when you deposit it? Are they lending it out? There’s those little cubicles right behind you. They’re lending all of that money out. 

The moment you’re making those deposits, they don’t take your deposit and put it in your little box in the back with your name on it. They take your dollar, even if it has your name on it, and they’re lending it out to Jimbo over there in that little cubicle. They’re lending it out at between 400% and 1300% percent more than what they’re paying you. That’s how much banks make with the money you leave there. 

In order for banks to make money, they have to move money. Their money has to be in constant motion. Well, okay, so now let’s take that same principle and apply it to you. If you have money, the number one thing you can do with your money to make more is to move that money. You’ve found a better place to park your money and to put it because now you’re making 6.2% versus less than 1% in your regular bank. That’s a win. 

You figure that part out. That makes logical sense. In order to make that money grow, we want to move it because I wouldn’t be happy making 6.2%. There are people that would be fine with that, but to me, no. If I’m making 6.2%, but I can take it out and still make 6.2% I want to pay off the things that I’m going to get the biggest return on like  student loans, credit cards, car payments. I can also lend it out or buy real estate. I take it from this side and I put it over on this side. Then I pay off things.

If your credit card charges 19% and you just pay your credit card off, and you’re making money over here at 6.2%, your credit card just got paid off. That was 19% you were giving them but you can’t recapture that 19% unless you take the money you gave the credit card and put it back over here in your account. You have to move the money. It goes from left side to right side back to left side continuously until all the debts are gone.

Then what do you do when the debts are gone. Like some people listen to this and when I teach this, they say, “Yeah, I don’t have any debt.” Great. Now we can have some real fun, because now we can buy real estate. Now we can go learn how to be a lender and do exactly what banks do, and start lending money. I lend my money for my banking policy at 12%.

However, all of this stuff that we would basically talk about you see, when we get back to the process, when I found out what you’re doing with your money. When I asked you those questions and you showed me, the next thing I would do is I would design a custom plan. I would engineer and design one of these banking policies, because there’s not one that’s the same. 

Here’s the big misconception, people think that this is just any other whole life. So they run out and they go to their life insurance store and they buy a whole life off the shelf. They say when they get the illustration, “This is nothing like what Chris was talking about on Robert’s show. Nothing at all, this is a scam.” That’s because you didn’t listen, this is not a regular whole life. This is not designed like a regular whole life, it’s completely different. We would then design it for your needs. 

Now, once it’s designed to solve your problem, then we got to get you approved. Not everybody can qualify for this so we get you approved. Then after you’re approved, you make your first deposit. That’s when the fun really, really starts because then we’ve got a whole team called the mapping team.

The mapping team is going to meet with you and design that plan to pay off all your debts, or that plan to basically move this money for you because most people don’t know how to do this. That’s the biggest problem we found is when we set these up for people, we gave them the magic machine right here. They could move your money, but they don’t have to move it. That’s what we do. We build the map for you that shows you step by step how to basically take this money from the left im the infinite banking plan and move it over to the right, which is your life, your situation, your debts, and how to then move that. 

We show you, two years into the future, what this will impact what the impact will be for you. When we do that, you all of a sudden will see very quickly why you would repay those loans because by repaying those loans, you’re going to make double or triple the amount of money you would if you didn’t pay those loans back.

Robert Leonard  27:23  

What I like about this so far is that I don’t know anything about this. I’m asking these questions that are a little bit out there probably. They’re a little bit off the beaten path, if you will. But I think it’s a lot of the same questions that the audience is probably thinking about themselves, because I think they’re in the same seat that I am.

One thing I want to go back to really quick… There were so many questions I came up with when you were just talking about that so much good information. One thing I want to go back real quick and not gloss over, because I think a lot of people probably heard it, and their ears perked up and probably think, “Whoa, whoa, whoa, wait a second, you said that banks were earning over, 1300% or 1400% on your money?” 

Where are those numbers coming from and how is that possible? I think a lot of people and myself included are saying, “Well, they’re only lending it out at 3-6% on some consumer debt.” Where are you getting these return numbers from? 

Chris Naugle  28:06  

It’s factual data, go to BauerFinancial.com. You can pull up any bank for any time frame and you will see there is not a bank out there that makes less than 400% on the money that you leave there. 

Now, when we talk 400% to 1300%, what am I talking about? People are like, “No, no, they’re not making that much.” I said 400% to 1300% more than you make. It’s not how much they’re making. It’s how much more they’re making than you. It’s very simple to understand if I drew a circle and I showed you depositing $100,000 in the bank. Let’s just pretend that the bank pays you 4% because you found yourself a really, really good bank. 

Well, the bank has to pay you that 4%. The bank is going to go out and lend it to your neighbor to buy his house and they’re going to charge your neighbor 6%. Then your neighbor gets the keys to the house, he now exchanges that mortgage for monthly payments. So the money gets deposited back in the bank by the seller of the house. 

He makes that deposit. The bank immediately loans that money back out to you to go buy that BMW-M 3 and they charge you I don’t know… Let’s just say 8% on that loan. 

Then the car dealership deposits some money back in. Then all of a sudden the bank loans that money back out to someone to do a house remodel, a new kitchen. They charge 9% on that home remodel alone, okay? Contractors deposit the money back in and then that money gets loaned back out to… 

Let’s just pick on your other neighbor, who is a gambler and lost all of his money in Las Vegas and racked up his credit cards. He needs a debt consolidation loan. They charge him 12%. 

Now, if you took the 4% minus all those numbers, because you’re making 4% from the bank, but the bank lent it out at 6-12%. I think I did my math right there but that would basically work out to be a difference of roughly 20%. That’s how much money the bank made. 20% is how much the bank made on your money that you deposited there, but that’s not right. The bank’s paying you 4% and they’re making 20%. So did the bank make 20 %or did they make five times more than you made? The answer is five times more which is 500%. 

I’m telling you, the banks make 400-1300%. It’s factual data, just go to Bauer Financial. Then don’t get mad at the banks. They just have learned how to do this and you can duplicate exactly what they do. While you can’t borrow other people’s money and do this, maybe it could… I don’t know, but you shouldn’t. You could do it with your own money, though. 

That’s a great question and a lot of people get tripped up with that, because they’re like, “No, no, no, the banks are only charging at most 10%. So how did they make 400-1300%?” They do, but it’s 400-1300% more than you.

Robert Leonard  30:33  

Yeah, that was exactly what I was thinking. I said, “No, banks are only charging 6% to 12%. How can that math work out?” But how you just explained it and makes total sense.

Chris Naugle  30:42  

A lot of this stuff when I present it, I draw pictures. I show that little wheel of how a bank works. So it’s tough to explain it but hopefully that helps.

Robert Leonard  30:49  

Yeah, totally makes sense. You also mentioned that as we pay back this loan that we get, more money becomes available. It sounds to me like a revolving line of credit, if you will. You use it, as you pay it back, it becomes available again. How does that mount become available in the first place? Does somebody buy a whole life insurance policy and now they have $100,000.00  they can withdraw and essentially, do whatever they want with it? How does that work? How does that money even become available in the first place?

Chris Naugle  31:16  

Think of this no different than what you do with your bank accounts. You make deposits in your bank accounts. You go out, you earn a living, you make an income and you deposit that money in the bank. Well, we’re going to change one thing and we’re going to change where that money goes first.

Therefore, instead of it going to your bank, or to the 401k or to your IRA, we’re going to change where it goes first. That’s it. We just want the money to go over to this specially designed and engineered whole life first.

Once it gets there, and it gets deposited, the interest clock starts. You’re making 4% plus the dividend. Now, once it’s over and they’re earning that, we can take that money back out. Now a lot of people will kind of ask, “Well, how much can I take out immediately?” The answer is 60% to 90% of the money you deposit can come out immediately. When I say immediately, I mean in the first 30 days, as soon as your check clears. 

What’s the difference between 60 and 90? Plan design, that’s it. It’s just the way we designed the plan for your needs and goals. Don’t get hung up on the 90% axis, that’s only the first year. It gets to be more and more after that, literally, by the third year, if you deposited, I don’t know. Let’s just say you deposited $1,000 every month into your banking policy instead of your bank, that thousand dollars becomes available immediately and you can take that money back out. 

It’s not fake fictitious money that’s just appearing out of nowhere. It’s your deposits. So you deposit the money in the account and then when you want the money, you take a loan, which you go online, you click a button, or you call us and we do it for you. 

Then that money comes out of your account, because the insurance company loans the money to you, and it just gets deposited into your account. It will just take 36 hours. That’s how long it takes for you to get your money if you need it the next day, pay for a wire just like you would with a bank. That’s kind of how that part works.

Robert Leonard  32:51  

You’re essentially saving the money up front and then using it again, in the backend?

Chris Naugle  32:55  

You’re doing the same thing you’re doing today. You’re just changing one thing, and that’s where your money goes first because your bank, I can guarantee you, is not paying you a guaranteed 4%. Even prior to COVID where in Allied Bank you might have been making I think it was about 2%. 

What happened when COVID hit? The interest rate plummeted. Now you’re at 0.8% and I bet you that will drop even lower. Overnight that happened. The insurance companies guarantee you 4%. The dividend can change but the interest rate cannot.

Robert Leonard  33:25  

You also mentioned that not everybody qualifies. What does that look like? What is the qualification process? Who qualifies and who doesn’t?

Chris Naugle  33:32  

The insurance company wants to make sure you look as good inside as you do on the outside. It’s medical. They’re going to qualify you based on your medical condition. Now, I know these are the millennials. Most of you are healthy. 

However, let’s just say you’re a 70 year old and you want to start a banking policy you can, but if you’re insulin dependent diabetic or you had cancer, you had a stroke, there’s no way you’re going to get qualified. But that’s okay because if you don’t qualify, you could still be the owner. Then you just find someone’s life to insure. It could be a spouse, child, or grandchild. Someone who you have an insurable interest in, you basically go and you borrow their life. 

Let me unpack that just a bit, because this is very important. Let’s talk about banks. Remember, I said banks are the number one purchasers of this. Banks use tier one capital, which is their most secured capital, capital that they can’t risk. They need to find a place to make more money on that. 

What they do is banks basically find lives to promote or find lives to insure because a bank is an entity. A bank can’t just go out and buy one of these. They have to have a human life to ensure. Who do they insure? 

Well, have you ever walked into banks and not seen a bunch of different vice presidents running around. Seriously, like the little black or gold badges? How many of them do you see at the bank? A lot. 

Why are there so many vice presidents at banks? Well, the answer is very simple. The bank needs to have somebody that they can insure and they need an insurable interest. When they make them a vice president, they become an insurable interest for the bank. 

That way if the bank loses that Vice President, they hypothetically lose $1 denomination and they lose some type of monetary value by losing that employee because they’re an executive. 

The bank says to the Vice President, “We’re going to give you a raise, and we’re going to give you a fully paid up life insurance plan for 100,000. We’re going to give you a deferred compensation plan, Mr. Vice President. That means that you don’t have to put any money into this deferred comp and someday later, 20 years down the line, if you actually make it that long at this bank, we’re going to start paying you an income for the rest of your life.”

The vice president’s like, “Oh, my gosh, this is so great. I will never leave this bank.” Then the bank says, “Great.” 

What they do is they go out and buy themselves a big old fancy, specially designed whole life policy, which is called the BOLI, bank owned life insurance, on that employee. That employee lives their whole life, retires, gets their deferred comp. The bank’s been moving this money the whole time. 

Then all of a sudden that vice president dies someday. The insurance company pays $100,000 to his family. They’re so grateful. But then the second check gets paid. And who do you think it goes to? The bank. How much is it? $1 million? $2 million? $3 million? I don’t know. It’s a big old payout. 

The bank literally had this money. They moved this money, the entire team, they made 4% guaranteed on that money the entire time that this employee was there. AThen when that employee died, they got all their money back and then some. You know who else does this? The Rockefellers, the Rothschilds, every wealthy family you’ve ever seen. Probably right down to the Bidens. the McCainss, they all do this. This is why they get wealthier and wealthier as time goes by. 

But yet, nobody ever asked the question of how do they do what they do? They just think, “Oh, these people, they just have so much money. They can just keep making more.” No, they just use things different than you do. I get so passionate about this.

Robert Leonard  36:37  

I want to dive into what the rich do and how they do it a little bit differently, more tactically, and more in depth. Before we do, I have another question about the loan that you’re receiving from the policy or the mutually owned life insurance company. How does it impact your credit report and your credit score, or does it at all? 

Chris Naugle  36:58  

You don’t have to qualify for a loan. They’re never going to ask any questions. You don’t fill an application out. You click a button or you call them if you don’t want to log into your account. There is no credit check. It doesn’t ever hit your credit. You’re the bank. It’s your money. You’re just basically using your money. 

However, the thing is your money never leaves the account. So your money that’s in your account, is just collateral for the loans that the insurance company lends you. But then the insurance company lends you these loans. They call them loans so that you don’t have to pay tax on them. Then those loans are just subtracted from the death benefit. That’s all it is. It’s literally just the ultimate way to move money. That’s why we don’t even call it a whole life. 

When we talk, we call it the machine because that’s all this thing does. Don’t make it out to be anything it’s not. All we use this for is a machine that will move your money in the most efficient way possible. 

If anybody ever came to me and said, “I have a better way to do this,” I would be all ears. If they truly had a better way to do what we do with this silly specially designed whole life, I would change all my presentations, all my YouTube videos. I will change everything.

However, the thing I can say that for is because there is no other vehicle and there hasn’t been for hundreds of years, because this has been the only vehicle that works this way, and probably always will be.

Robert Leonard  38:12  

Before we get into the rich, let’s talk about the typical middle class person who’s going to use this policy because I read this in your book with Brent Kesler over the weekend, like we were talking about before the show. Through our conversations in the past both on the episode and offline, I’ve heard you say that people can use this strategy to get all their money back for their purchases. 

The biggest example that I’ve seen is using cars. People love to finance cars in America. Some of our audience that is outside the US, they send me direct messages on Instagram and they say, “I can’t believe you Americans borrow money for cars. We would never do that over here.” So it is an American thing. It seems like a lot of us like to do that. How then can somebody use the strategy to get their money back after buying a car?

Chris Naugle  38:52  

Robert, I mean, you can see me so that your audience can. I’m lit up like a Christmas tree smiling right now because this is my favorite thing. This is the one thing that got me so fired up when I learned about this. Somebody told me you can get all the money back for every single car you will ever buy driving on. I like cars and I like getting all the money back. So how? It’s so simple. 

We’ve already explained most of it.Remember, all we’re doing is changing one thing, and that’s where the money goes first. So if you are going to buy a car, there’s three ways to buy the car. 

Number one, you can pay cash for it, which means you take money out of your bank, which stops the interest earning potential if you’re using a regular bank or investments. As soon as you take it out, you stop that interest flow, and you go and you buy this depreciating car. That’s cash. 

Number two, you could lease a car and that you just exchange monthly payments for the ability to drive the car and then you have to give the car back at the end. So you literally gave the car company all the money every single month of every year you lease it for nothing more than the ability to rent a car. Terrible idea. 

But anyway, the next way you could take a loan out from the finance company, pay monthly payments to the finance company and then own the car after five years. So what if there was another way? 

And that other way is what if we went to your bank? What if over three years you decided you want to buy a car, because your car is getting old? So you started saving the money that you already saved in your bank account, but you put it over into this infinite banking policy. 

Then three years later, you took a loan from your infinite banking policy, and you went and bought your car. Then instead of just saying, “Okay, I’m done,” like you would if you paid cash. You added one step and instead of just paying for the car, you said, “Well, how much money would I have paid the finance company, if I were to have taken a loan?” 

Well, let’s just say your monthly payment would have been $483. That would be 6%, on a $25,000 car over five years. Take that $483 that you would have been okay given to the bank for the car loan, and take that $43 and put it back into your banking policy. 

Essentially, what you’re doing here is now you’re paying yourself first by changing where the money goes first. Number two, you’re paying yourself back with interest, like you would have done for the bank. Then number three, you’re recycling and recapturing all of the money that used to give away.

If you did this, for five years, I will tell you the numbers. You will have gotten for your very first car you bought, you will have gotten 92% of every dollar back that you paid for that car. Then after five years, your car gets old, you gotta go buy another car, because you want that new car smell. So you go and you do the same thing. 

You take money from your banking policy, you buy the car. Now your other car is still in the driveway. You haven’t sold the car. You buy the next car and you do the same thing. Instead of making $483 payments to the bank, you make them back to yourself. Nothing’s changed. You would have already done this anyway. 

Now after the five years of owning that second car, you will have gotten every single penny back for that second car that you ever paid for. You will have also made, I think the math and the one we do shows $10,000 a year of deposits, you will have made I think $11,000 for buying that second car. Plus you have two cars in the driveway that you could sell for value. 

I’m so passionate about this, because I buy my cars this way. I don’t drive $25,000 cars. I had to work up to that. I bought cars this way for a long time. I started with used cars and I’ve kind of graduated through. Most recently, I bought my wife a Porsche. She always wanted this car. I did exactly that. I took the money from the banking policy. I had some fun. 

Let me explain how I did this. I went into the Porsche dealership and we found the car we want. We did that negotiating thing that men love to do back and forth with the finance manager. We slide the paper backs. It is not good enough. Go see if you can do better. They just play this game for hours, right? Then finally they slide the number over and you say that’s pretty good. All right, well, let’s do this.Then he gets all excited and gets the finance paper. 

I said, “I don’t need the finance paper.” “Well, what do you mean? Why did you have me do all that?” I said, “Well, no, I’m going to pay cash for the car.” “Well, why did you have me go to the finance manager for all this?” My answer, “Because I needed to know how much to pay myself back and I wasn’t going to do the math when you guys would do it for me.”

I literally took the money from my policy and I paid for the portion. Every month, I paid $963 from my bank account to my banking policy. That is a rate of 5.63%. I’m literally getting all the money back for that car. I had a ton of fun doing it. 

Fols, I want you to really visualize this when you’re hearing me say how much fun would it be if all the checks that you write every month for your car payment, if the checks you write to the credit cards, the checks your right to your student loans, wouldn’t it be way more enjoyable if you wrote those same exact checks, but you deposit them in your bank, the bank that you own, the bank that you make interest on?

I’ll tell you something, if you’re thinking in your mind that that wouldn’t be more fun, because it is a blast, because every payment I make back into my bank means I have that much more money in my account. I literally love it because every single month, I have more money than I did the month before. Not just because of the money I’m depositing, but also because the money I’m recapturing that I used to give away. Plus my money never stopped earning interest.

Robert Leonard  43:35  

When your money is earning interest, are you technically still having more become available over time, because every month you’re earning an interest? So technically the amount you have available, even if, let’s assume you didn’t pay anything back. Say you had $100,000 in there that you could withdraw. So you earn, I don’t know $1,000 that month in interest. You’ll take 90% of that. So you now have an extra $900 that you could withdraw?

Chris Naugle  43:54  

You just said it. It’s just mathematics. So think about it, you put $100,000 in the account. Let’s say you’re in the third year, you took $100,000 back out. You’re making 6.2% on your $100,000, because you’re three years into it. You’ve capitalized your system.

What I want you to understand is that there’s a capitalization phase. In just any savings, there is this. You start with zero and then you capitalize your system, whether it’s your 401k, your IRA, or your bank account. Well, you have to capitalize this too. 

For three years, we’ve been putting money into this account. We’re building it up, then once it’s built up, let’s just say this is the third year. If you deposit $100,000 in the third year, you’re going to have more than $100,000 you can take out. So you put 200 and you take 100 out, 86.2 minus 5% is what? 1.2, right? You’re making 1.2% on money that you just took. 

Would your bank pay you 1.2% on money that’s not in your bank account anymore? Would Wall Street pay you 1.2% on money that’s not in your account anymore? No, but that’s how this works and it only gets better over time because if you understand how compounding works, that $100,000, let’s just use your number, every year makes 6.2% with dividends. 

Next year, you’re not making money. 6.2% on 100, you’re making 6.2 on $106,500 versus $200 because it’s compounding. The next year, it’s compounded on top of even a higher number and an even higher number the next year. You see what I’m saying? 

It’s the old thing. Would you take a million dollars or a penny doubled every day for 30 days? People have already heard this. If you took the penny doubled every day, for 30 days, you’d have about 5.3 million, which is far more than 1 million. That’s compounding. That’s what Albert Einstein understood. That’s why this works.

If you did that, you took that $100,000 out, you never put that $100,000 back. You would continuously make more money. 

Let me do this because this is a podcast and just people are just listening, I want you to envision this. I want you to all take a second, I want you to visualize what I say. In your garage, you have a vending machine. You walk out to your vending machine for the first time. It’s old. It’s beat up and you look at it and say, “Alright, let’s see if this thing will give me a coffee.”

So you take your dollar bill, and you put it in your vending machine, and then it gives your dollar bill back. You think that the machine is broken. Then all of a sudden, you hear the cup drop and it pours a beautiful cup of Starbucks coffee.

You got your dollar bill back and you take the coffee. Now, that’s a cool vending machine. Then all of a sudden, you’re about to walk away into here to ching ching, and there’s money that falls and you grab the money. What would you do? You try it again, you take that same dollar, you put the same dollar in the vending machine, and it gives your dollar back. Again, you hear the cup drop and it pours your coffee again the next day.

Then all of a sudden, instead of that, you think, “Alright, is it going to give me money?” All of a sudden it goes ching. More money than the day before. You do this every day, every single day for weeks and months. Every day you do this with this vending machine, it gives your dollar back. You get your coffee and more money falls on changing things. You would think you found the holy grail of vending machines? 

Well, you know what you just found? You found the infinite banking policy that I’m talking about because there isn’t a day that will ever go by that you won’t have more money than you did the day before. It’s impossible mathematically for not to have more money. That vending machine is what we’ve been talking about this whole time. 

The dollar bill you’re getting back is after your plan has capitalized. Every penny you put in, you’re going to get more money back than what you put in. The coffee is what you’re basically… That’s the benefit of what you’re going to use the money for. The change is the compound interest.

Robert Leonard  47:05  

I keep wanting to talk about the next step and what the rich are doing to build wealth using this. However, we can’t go there yet, because I keep thinking of all these different questions that I know that the audience is thinking of, because I know I’m thinking of them. I know we’re all coming from the same point of view. 

What happens if this insurance company fails? We think back to 2007 to 2008. We are going through some turbulence right now. I’m not saying banks are undercapitalized or poorly capitalized, or even insurance companies or anything like that like 2007-2008. But we saw AIG and that wasn’t necessarily mutually only publicly traded. It’s a different type of organization.

Chris Naugle  47:38  

Let’s just focus on AIG for a second. AIG fell. Did any other insurance policyholders lose money? Not one. Nobody that had money at AIG lost money. Why is that? And this is a publicly traded company. I don’t like AIG. I’ll be openly honest, it’s a terribly run insurance company. If you put your money there, you’re just begging to lose it. 

They didn’t lose money because insurance companies are backed by the state and the federal government. Insurance companies, if they go down, it’s worse than banks going down in. 

In 2007 and 2008, they let Lehman Brothers fail. They let a bunch of banks fail, because they can let a bank fail. You can’t let an insurance company fail. If an insurance company fails, it ensures just about everything or everyone. That would create a massive problem.

Yeah, so number one, insurance companies are solid on their own. I’ll give you an example. MassMutual did a study and I might have the numbers off a little but they did a study recently because of COVID and the pandemic. They said if we had to pay out every death claim on the books, how much money we have left in surplus? I bet you know, people will give all different answers. Some low and some high but the answer was right around $40 billion. 

That means everybody that they insure dies. They pay out all the death claims. They have 40 billion left. Then I don’t know how they’d fail. But if they did fail, secondarily, they basically would have state insurance, that would back them up. Then the federal government also has some type, which I don’t know what it’s called, kind of like FDIC, but way better. 

The thing is I urge any of you to go online, go to Google and ask what mutually owned insurance companies have failed. If you find any big mutual insurance companies that are over 100 years that have failed, I’ll give you five bucks for each. I’ll give you 50 bucks for each one. 

You won’t find any.They don’t fail, because they don’t do what banks do. They don’t use fractional reserve banking, where they only keep 10% of your deposits on hand at any time to back up all the money.

You see, insurance companies have always operated on things called Austrian economics. You guys can look that up. In the simplest form, it means $1 is $1. If they promise you $1, they have to have $1. Isn’t that a novel idea? 

Holy cow, Robert, I’m going to make a promise to you for $1. Wouldn’t it be nice to know that I have that dollar sitting somewhere in surplus? That’s what insurance companies do. They have to because they do Austrian economics, and that’s why they’ve always been safer. But if they did fail, state and federal, look at AIG, it’s the worst example because they’re not even close to what we use, but they failed miserably and they got rescued

Robert Leonard  50:00  

How does a mutually owned insurance company like this guaranteeing that rate of return that you’re saying, 4%? 

Chris Naugle  50:07  

Really good question. You got to remember insurance companies, they don’t invest like we do. They don’t invest like banks do. They don’t invest like Wall Street does. They invest for like hundreds of years out or 30 year blocks. 

So 30 years ago, insurance companies were buying 30-Year US Treasuries. They always are buying treasuries into the future, because they can go further and further into the future than we could ever dream of doing, because we’ll die well before the bank’s investments ever start to pay dividends and royalties on what they’ve done. 

Insurance companies just hedge their investments for very, very long term bets. Insurance companies also do a ton of lending. They lend a lot of money and they lend large chunks of money out in first secured positions.  

Insurance companies are well known for owning lots and lots of rental income, or rental properties, and big commercial buildings. They also don’t take risks. They don’t go out and roll the dice like Lehman Brothers and do risky stocks, mergers or anything like that. They’re just old fashioned, slow and steady. The turtle winning the race is how insurance companies invest their money. 

Insurance companies literally print money, because think about it, they’re in the risk business. They can tell Robert and me, within a group of people, when we’re going to die with a very finite science. They literally know when we’re going to die. It’s freaky, but that’s what actuaries do. They know when we’re going to die. They know exactly how to price their products, how to price the cost of insurance, so that they never, ever have a mistake.

The only mistake they can ever have is a pandemic like COVID where mass amounts of people die. An insurance company had to factor that in, but they factored those numbers into, which is why they do these stress tests. So very unlikely that large mutual insurance companies go belly up. Banks will all go down before the insurance companies do.

Robert Leonard  51:48  

Alright, so let’s take the next step. We’ve been talking about getting our personal finances in order paying off debt, getting that ease taken care of. I think that’s really good. I think that’s where it’s going to be really beneficial for a lot of people listening. 

Now let’s take the next step. Let’s look into the future and see what we could do with this going forward. So what are the rich doing with this type of strategy or policy to really build wealth once they were done with securing their personal financial position?

Chris Naugle  52:12  

That’s where we can really just start using some other names of people that use it. Walt Disney, okay. Walt Disney World was created using a loan from his life insurance policy, not just a life insurance policy, a whole life policy, because back when he was starting that, there wasn’t money. He couldn’t get loans from banks. So that’s what he did. 

How about McDonald’s? It’s very well noted and documented. You can Google it, Ray Kroc used his whole life to launch the Ronald McDonald marketing campaign. He also used it to help pay employees.

Who else? Pampered Chef, Doris Christopher,. She started Pampered Chef, which was later sold to Warren Buffett for some… It was disclosed at some couple billion dollars. She started that with her whole life. 

Foster Farms in 1939 started from a whole life because during the Great Depression, people didn’t have money. JC Penney was started during the Great Depression using the whole life policy and also used that whole life policy to support and pay employees during those hard times. 

When you look at all these different people, and I could even go into Stanford University and Oprah, they’re all using this… Biden and McCain, they’re using it to fund their campaigns for their political things.

McCain’s no longer with us, but he openly used his whole life policies to fund his campaigns. I’ve done the same thing. I wish I knew if Trump did because it would be more of a level playing field. He probably does, too. 

What these people are using it for and what the Rockefellers used it for is far more than paying off debt. Those guys aren’t paying off debt. Man, they’re using it to start new businesses. They’re using it to lend money, right? They’re going out there and lobbying with the money. 

I use mine, because I don’t have debt. I don’t pay off debt with it… to buy my wife, Porsche or my wife’s Porsche. I also loan a lot of money to real estate investors. So the ultimate in real estate is to be the *inaudible*. Well to be the bank, this is the ultimate tool to use as the lender because now when I’m lending it out at 12%, am I only making 12? No, I’m making 12 plus the money my policy is making. I’m making money twice. I’m doing a flip, I can make money three times. I can make money on the policy. I can make money on the flip. AThen I can also loan the money to my LLC at 6% or 8% and make money as a hard money lender to my own real estate deal. 

You see, there’s so many ways to use it. That’s why it’s called infinite. There’s no cap on what you can do with this. A lot of people don’t like paying quarterly taxes if they’re self employed. So why don’t we use your policy to pay your quarterly taxes? You can get all the money back for that. How about boats, people like boats? What if we can get all the money back for all the boats we’re ever going to buy? There’s no cap on what you can do. I focus on real estate. That’s my thing. That’s what I do. 

I use my plans primarily for real estate. To buy real estate and to gap fund rental deals when the bank won’t give me all the money to lend money primarily lately because I’m not buying as much real estate. I just think it’s too overpriced right now. But those are the ways that you can use this and the ways I’m doing it. 

There is no wrong way to do this. My mentor uses this for every month, he uses his credit card to pay all of his bills, all of his household bills, and he lives a pretty good life. Then every month he goes to his policy, takes a loan, and pays off his credit cards. He flies for free, clearly because he’s got airline points. He’s just using his policy to fund all of his expenses. 

Now, I don’t want anyone listening to be like, “Okay, I’m going to start one of these and pay my rent.” No, he has had his plans for many, many, many years. So they’re capitalized, they’re efficient. In the beginning, these plans are not as efficient as his are. So you wouldn’t want to use them for that but you can. It just goes on and on.

Robert Leonard  55:33  

I put a poll out on Twitter, after our first conversation on the real estate investing show, asking people if they thought that there are secrets that the wealthy know that the financially educated, non-wealthy person, so somebody who isn’t rich yet, but they’re well educated on personal finance and investing. They know a thing or two.

Are there things that the wealthy know that they don’t know? Almost everybody said that there is not. I put a similar poll out on Instagram, same results. Why do you believe this concept isn’t more popular in the financial media? Why aren’t more people using it?

Chris Naugle  56:04  

There’s a two part question. Let me go back to the Twitter and the Instagram poll you put out there. Most people truly believed… they didn’t even think about it. They all said, “No, the wealthy don’t do something different than we do with money.” They are completely wrong and it doesn’t surprise me in any way that that is what the poll came back because every single person is trained really well to not be in control of their money. 

Therefore, when they’re posed with a question that says, “Do the wealthy do something different than you do with your money?” They said, “No.” Well, the easiest way to sum up that question is literally a famous quote by Will Rogers.  

Will Rogers said, “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 ain’t so.” Who are you getting your advice from? The people that all said no, who are they taking and getting advice from? Is it their banker? Is that their financial adviser? Is it their circle of friends that do nothing but complain and complain about the world that they live in because they can’t find positivity in today’s world? 

Who are you getting your advice from? Are you getting your advice from the people that are living your perfect day? Or living the life you want to live? Probably not. 

Therefore, it doesn’t surprise me at all, that every single person that was asked that question doesn’t think that the wealthy do something different. When in fact, and in reality, they absolutely do. 

Then the second part of that question, why is it that this is not more popular in the financial media? That is the easiest question to answer. It comes down to follow the dollar. Why is it that if this is such a great concept that not every banker that you speak to, not every financial advisor you meet with isn’t talking about this… And I’ll tell you exactly why, because I was that guy for 16 years. High level financial advisor who never wants to learn about this and never wants to talk about this. 

Even if I did know about this, let’s just say I was gifted. I learned about this while I was an advisor, which I did, why wouldn’t I have gone out and done this? Because I would have made 60% to 90%, less money than I was. 

In order to do this, the way that I just described, the way that we’ve been talking about this the whole time requires the adviser, me, the IBC practitioner to take 60% to 90% less in compensation in commissions from the insurance company so that you can benefit more. 

In other words, if you had access to a plan that gave you access to 90% of your money immediately in the first 30 days, why would that be? It’s because I gave up 90% of my commission, so you have access to 90% of your money. 

Folks, listen, the biggest thing that most people will never understand because they want to sit there and put that barrier up and say, “Oh, that sounds too good to be true. Oh, that’s a scam. Oh, that’s not real.” Great. You fit right into what Will Rogers said, and that is exactly why he said that, because the people that actually took one step and learned that, that in life, it’s all about if somebody gives, they get. To do this, somebody has to give.

The bank does this because they don’t pay advisors to do this. So it works for them. The Rockefellers didn’t pay advisors for this. They had so much money that they did not need to pay commissions. 

However, you and I and most people out there, have to use somebody like me, and I don’t work for free. But am I willing to give up 90% of my commission so that you have 90% of the money? Well, ask our 3,300 members, and you’ll get the answer to that. The answer is absolutely because we believe that the power of this comes in numbers. The more people we can help, the more money we can make. It’s about volume.  

I’m trying to get a quote but if you help enough people get what you want, you get what you want. Zig Ziglar, exactly true. We are wildly successful with what we do here but that’s because we’ve helped a lot of people get what they want before we get what we want. That’s the answer, man. There’s no other thing I can tell you that is more true than that statement right there.

Robert Leonard  59:41  

Outside of the infinite banking, or money multiplier concepts, there are two other personal finance or just general money management concepts that you talked about in your book that I want to spend some time talking about. 

The first one is this idea between the difference in interest rates and we briefly talked about it before, but I want to dive into it a little bit here. As you noted in your book, people often think that just because they’re borrowing money at 6%, and earning 4%, in a savings account, that they’re losing money, when in reality, that’s not necessarily the case. Explain how this can be.

Chris Naugle  1:00:13  

I do this all the time and I do it from stages of thousands of people. Is it possible for you to earn 4% when you’re paying 6%? The entire audience immediately will say no, and some people will probably be thinking, “Man, you’re an idiot, I thought you were America’s number one money mentor, six minus four is negative two. I’m losing 2%.”

Well, that’s because you simply just don’t understand how math and money works, period. So what is the difference? It’s very simple. We’ve been talking about it this entire time, compound interest versus simple interest. 

See, what if we took $100 and you made, let’s just do 4%, you made 4% on $100. Okay, you have $104 next year, so that hundred and four then earns 4%. So 104 plus two times 4%, is what? Then we keep doing that. So that number just keeps getting bigger. That’s compound interest. You can do any math with that, right? 

The rule of 72 is all about that. If you’re in 7.2%, your money doubles every 10 years, it’s compound interest, simple interest. We take that same hundred dollars and we charged the same 4%, every single year. It’s going to be that 4%, which is $4 every year. It’s never going to be more than $4. When you have a loan, that’s 6%, you’re paying $6. Okay, it’s 6%. Every year, I think if I’m doing my math, right, I’m pretty sure am, $6 every single year.

However, over on the other side, you’re earning 4%. That 4% isn’t just 4%. The next year, it’s 4% of what your company just keeps going up. So eventually, you can make significantly more earning 4% compounded interest, when you’re paying 6% simple interest. I do a really cool example of this, that just blows people’s minds. It is just math.

Robert Leonard  1:01:54  

The other component is usually you have a declining balance. Therefore, your interest rate that you’re paying, which may look higher on the surface is actually on a smaller balance as it’s declining. That’s also playing into the component of it.

Chris Naugle  1:02:07  

You’re paying attention but that goes right back. Remember earlier you were saying, “Well, why would I pay the loan back up? I don’t have to.” You just answered your own question. Why would you not pay that loan back? Because now you’re decreasing that loan balance, which is being charged simple interest, while your balance is going up.

You’re just making more money unless you don’t like making money, well then find don’t pay the loans back. Because you think that paying a loan back is a bad thing, because you hate paying loans. This is your bank, your money, your loan. You’re just paying your bank back, that’s all. It doesn’t matter anything else. It’s just a way to make more money. 

If I show people the math on this, which I can’t do, people would fall out of their chairs, they would literally not even believe it. I would show them my plan, which I’m putting $10,000 in. I’d show them in the fifth year, I made 11.6%. And they’re like, “That’s impossible. You said you’re only making 4% plus dividends.” 

Correct. Compound it. In the fifth year, I’m making 11.6%. Want to take a guess at what I’m making the 10th year? Drumroll, 96% Shall we keep going? Because the further down that line I go, the more time that elapses, remember, I didn’t just park my money and leave it there. Every year, I’m taking that money out and I’m making more on it. So I’m only talking about the money that my plan is making, not what I’m making on the outside. I’m loaning that money out at 12. So that’s on top of all this.

That is the power of what we’re talking about. Unless I can show people the numbers, they understand the concept, but they can’t really fathom it until they actually see it.

Robert Leonard  1:03:28  

Chris has some great YouTube videos that go over this. I’ll be sure to put links to those in the show notes. I highly recommend you guys go check that out. Check out his website, read a little bit more about this. I think this concept, I don’t think it’s overly difficult to understand. I think it’s something that a lot of people can understand. They just don’t put in the time, or, frankly, they probably just don’t even know that this discrepancy or dynamic even exists. That’s why I wanted to bring this up, because I think it’s important for you guys to understand and learn. 

Even if you think you know, finance and investing well, this might be a concept that you just haven’t heard of yet.  I wanted to bring that up. 

Another one that’s similar is this idea of the rate of return, the net return that you’re actually receiving on your investment and the average rate of return. Provide an example and explain why it’s important to look at the net gain you earn, rather than just your average rate of return.

Chris Naugle  1:04:14  

This is where I can really kind of teach people that what they’ve been taught is really one big lie because as an advisor, we were always taught about the average rate of return. This mutual fund pays an average rate of return of 25%. So if I showed you an investment, they paid you an average rate of return of 25%, you’d probably say, “Man, that sounds awesome. Get me into that.”

Everybody would say that sounds great. Well, how about I just dissect that for you because let me pull the curtain down and take you behind the scenes to show you what that actually is. Let’s just say I’m your advisor and you give me $100. Robert gives me 100 bucks, and I’m a good advisor so I make you 100% I invested in Apple or something right? I made you 100%.

Your $100 just made 100% so it’s 200 bucks. You’re excited, right? Yeah, you’re like “Alright, man, Chris, do it again.” But the next year, I just bet on the wrong one and I lost you only 50%, but I made you 100% the first year. I lose 50% the next year. How much is your balance? Or how much is your balance? 100. 

Okay, but then you say, “That sucks. But Chris, do it again.” So I make you 100% again. Okay, so now you’re up to 200 bucks. But then the last year that you have me as your advisor, I lose only 50%. I made you 100, I lost 50. I made you 100, I lost 50. How much money do you have left? $100. How much? Did you start with? $100. Plus, you had to pay me a fee. I charge 1% as an advisor. Plus, you had to pay tax on all those gains if it’s not in a deferred account. So did you actually make money? Or did you lose what you lost? 

But not according to the average rate of return. How much did you actually average there? 25%. Folks, take off the rose-colored glasses, I had to. When I learned this, I was so mad because this is what I was fed as an advisor. This is what I was taught to talk about. This is what I was taught to sell. There’s nothing wrong with that. That is actually the math behind that is an average rate of return of 25%. But you made nothing, you have to understand how money works and unless you do, then you are doing nothing but conforming with what they want you to know.

See, the wealthy, and I think we’re going to go there. But the wealthy don’t conform, they create. In creation is wealth.

Robert Leonard  1:06:17  

We’ve talked about the infinite banking policies, we’ve just talked about these two personal finance concepts that I’m assuming the wealthy probably know and take advantage of. So what else are the wealthy doing that we might not be doing?

Chris Naugle  1:06:29  

Like I said a second ago, the wealthy create, they don’t conform. So we’ve been taught to conform, just go along with the flow. That’s basically created the destiny that we live. But if you really were to dissect the poor, the middle class and the wealthy, you really have to understand what they do with money. 

This is interesting, the poor make money, but then they spend the money on expenses. There’s very little to say it, that’s what classifies that. 

The middle class is different. When I say the middle class, I mean, people that make millions of dollars, they make money, they spend money on expenses, and they in turn, then turn their money over to advisors or banks and put their money in retirement accounts. Essentially what they’re doing is giving up control of their money. 

Then you got the wealthy, the wealthy do something totally different. This is kind of the one thing. The wealthy do make money, they have income, but they take that income first, and they change where that money goes. They put that money into assets, assets that create passive income. Now that might be loans that might be real estate, that might be these infinite banking policies. 

The wealthy don’t work for money, their money works for them. They have found ways to make their money work for them. Most people don’t work for money, they haven’t learned how to make their money work for them. 

The biggest thing wealthy people do is they make their money work for them. They understand the velocity of money. They understand how to control their money, and how to always have their money in motion. They also understand how to create things, other businesses or opportunities. That is the single handed, the biggest thing and if you just change your habits, you can change your results as well.

Robert Leonard  1:07:52  

Chris, thanks so much for coming on the show today. Just like our last conversation, I learned a ton throughout the episode. I’m looking forward to diving in more myself.

For those listening that want resources to study the concepts that we’ve talked about today and they just want to dive in further or they just want to connect with you directly, where should they go to find these study materials and where should they go to connect with you?

Chris Naugle  1:08:13  

My firm believer in giving everything away for free. So if they just go to my website, ChrisNaugle.com, they can go in there and they can get my books for free. They can get all these training for free. They can learn about everything we discussed, but see the videos and the visuals behind it. It’s all free. Just go to ChrisNaugle.com. For those that want to communicate with me, Instagram, @TheChrisNaugle on Instagram. That’s the best place to find me and I’m very active.

Robert Leonard  1:08:35  

If you guys follow me on Instagram, I have a similar username, @TheRobertLeonard, and I post about Chris. I post about his book. You followed me over the weekend posting all of my stories about different notes from the book and all kinds of different information there. So you guys can follow us both on Instagram.

I’ll be sure to put links to all of the resources to connect with Chris in the show notes. I’ll also put links to all the different topics and concepts that we talked about throughout the episode in the show notes. You guys can go read up on that as well. 

Chris, thanks again so much. I really look forward to doing this again.

Chris Naugle  1:09:05  

Me too. It was my pleasure. I can’t wait for round three.

Robert Leonard  1:09:09  

Round three. All right, guys. That’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week.

Outro  1:09:16  

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