Introduction
Kris Krohn do you invest in whole life insurance what is life insurance do you use it for your real estate investments do you use it in business do you recommend it is it good is it bad listen i hear you today i’m making an article i’m not just going to tell you what whole life insurance is i’m going to show you how i’ve used it the last 15 years to make a lot of dreams into money.
You know there’s one person i really trust to set the record straight his name is Rob Gill the man has written over 2 000 life insurance policies and i’ll tell you there’s things that i hate about life insurance and then there’s a rare type that i really love and Rob’s the only person i’ve met over all these years that i actually trust to use life insurance the right way now he just came in town let’s meet him Rob Gill how we doing my friend did glad to have you here dude i got you here on youtube today we’re gonna set the record straight on this whole life insurance thing you ready i’m ready to rock let’s go.
What Is Whole Life Insurance
I am not the guru on life insurance but if there was one it would probably be Rob Gilrobb what’s your claim to fame in this whole insurance world you know we’ve written over 20 million in premium and what that really means Chris at the end of the day from a president’s council chairman’s council MDRT all since 2008 consecutive year after year top performers top of the council i don’t know what any of that means but i do know that i trust Rob above anyone else when it comes to the game of insurance.
Rob this is the question i want to answer today how do you actually use whole life insurance to a positive financial benefit to a positive effect to actually make money and i think for us to do that we actually have to discuss what actually is life insurance what is whole life insurance according to Investopedia.
Whole life insurance provides coverage for the life of the insured in addition to paying a death benefit whole life insurance contains a savings component in which cash value may accumulate these policies are also known as permanent or traditional life insurance.
What does that mean to me it means if you use whole life the way the bank does like a swiss army knife where you can get a guarantee rate of return with the savings account while then taking the money out for other investment opportunities i.e real estate now you could become independently wealthy by understanding the magic of the guarantee savings account inside the whole life policy.
Why People Want Financial Freedom
So listen i’ve asked Rob to go super deep today on the answer to this question how can you use life insurance policy to actually make money and that’s what we’re about to cover but more importantly at the very end of this article i’m going to share with you how you can get a free 9 000 bonus i ask Rob from time to time to actually give this away to people on average he helps people save nine thousand dollars which is super dope hang tight.
So it’s actually strange to me that i’m making this article about what is life insurance i mean is there a more boring topic on the planet but it does turn out that life insurance answers this question what is it that people actually want Rob what is it that people want.
People want the freedom Chris to do what they want when they want how they want without financial or time constraints and believe it or not life insurance is the vehicle that’ll get you there faster and in a more efficient manner.
For me the bigger question is why aren’t more people becoming financially free and why don’t they know about what we’re talking about right now here on life insurance because of social media the so-called experts and the fake news that’s out there it creates a lot of noise aka leads to confusion and frankly if you want to understand whole life insurance and how people smart people the rich are using it to actually make money it’s because of what you teach Rob like you you’ve created this this map a financial freedom map.
The Financial Freedom Map
You know Chris over the years i’ve helped thousands of people understand money and as a result i created this financial freedom app that focuses on three things number one mastering the rules of money number two the formula of money number three the velocity of money dude i’m so excited about this because most people don’t understand that in fact a lot of that’s like oh my gosh that’s going right over my head it’s not going to check this out now real quick before Rob actually breaks down this financial freedom map will you just take a second and talk about the elephant in the room don’t think about elephants everyone thinks that life insurance is about the death benefit and we’re clearly talking about what are benefits i get every day right now by having this policy everyone always thinks it’s about death is that the case.
You know Chris this is actually my neighbor’s house when i first moved into my neighborhood back in 2005 right as we started our financial planning practice and what i remember the most about this beautiful soul is he came up to me so friendly asked what i did wanted to get to know me and in the middle of the conversation he realized that i was doing planning and part of the planning was life insurance and as a result of that we discussed that he had crohn’s disease and i said do you have any insurance and he said yeah i have a 200 000 term policy and i talked to him about the virtues and the strategies of whole life yeah dude that guy needs way more insurance right yes if i had a financial problem i would need a lot more insurance i know that’s what i was thinking his family talked him out of it and four years later he died.
Jeez that’s a tragedy horrible and there was no full replacement value of his lifetime income and he had two kids two boys one in high school one in grammar school and his wife was in her mid-40s 20 years away from retirement so there is a place 100 percent for like the death benefit of life insurance absolutely but you know what we’re gonna do right now we’re going to actually talk about the living benefit.
Rules Of Money
All right Chris we’re going to talk about the rules of money and how it pertains to the financial institutions who want your money on a regular and ongoing basis they want to hold it for as long as they can and give you back the least amount as possible through taxes and through penalties.
Well i’m going to get nine now by the way this is one of the reasons why Rob and i really see eye to eye when we talk about taking your money out of your world and putting it in their world i’m talking about 401ks and iras and annuities and all of these wealth plans that are basically hey you go to work and make the money and then give it to these other people to control and if you try to touch it you’re going to get penalized instead you’ve got to find a way to say wait i’ve got to keep some of that money for me i got to be the financial ninja in charge of investing and making choices with my money.
If you keep the money in your world very simply if you pay yourself every single month and get used to doing that you could then invest it and then once you invest it you can then leverage it and have more control over it.
Simply said pay yourself first.
Formula Of Money
The second element of the financial freedom map is understanding the formula of money now i love this because Rob this is where you talk all about opportunity costs and you may not know what opportunity cost is but it’s super important that you do.
Opportunity cost is basically what is the next best option that you’re missing out on because of the current choice that you’re making.
For example if i put my money in a 401k or an ira then i can’t now take that money and actually invest or do anything with it because it’s out of my hands so i’m missing that next opportunity because of the choice that i’ve made.
How does that apply though to this initiation with like uh this dope looking car and this house let’s say if you had twenty thousand dollars and you want to see the opportunity cost of either purchasing a car or purchasing a house for example a car is non-preferred debt twenty thousand dollars at six percent interest are you calling that bad bad okay so it’s worth less non-preferred debt is like i don’t prefer this debt exactly and why don’t you prefer it because you can’t write it off and it’s worth less.
Versus this is preferred that not only can you write it off not only can you get 20 roi on it through proper planning strategies oh it’s going to increase in value over time historically.
So if you get opportunity cost let’s actually dive into what financial opportunity cost is very simply it’s somebody else earning a rate of return on your money that you’re not earning because you didn’t put into a proper place.
Do this crazy this is like the bank right you take money you take it to the bank and the bank pays you 0.01 but guess what they’re doing with it they’re lending it out and they’re making tons of money.
Velocity Of Money
Which brings us finally to whole life insurance and what it is because on the third part of your map Rob you’ve got my favorite topic the velocity of money.
Let me tell you what financial velocity is what if you could put money in an account that paid you three to four percent tax-free while allowing you to borrow the money to do additional investing and earn money in two sometimes three places at the same time.
This is the part that gets me maximum excited Rob like the idea that i put my money here pull it out and earn also over here pull it out or bottom line is if i’m earning money in multiple places on the same dollar i’m feeling like a financial genius.
Show us how we actually do that through these life insurance policies yeah you know this is by the way this is what banks do it’s called tier one capital as they loan money out to you over and over again they’re making that guarantee rate of return.
If you get the right kind of life insurance policy where you get three to four percent guaranteed by state law and by contract and they’re going to give you a dividend depending on the carrier of course it grows and comes back tax-free the beautiful part about it though is while it’s growing you could take it out leverage it for other investment opportunities.
Using Whole Life Insurance For Real Estate
So i’ve been leveraging these kind of policies for years and i’ve been basically dumping money into policies and then as that money is built up i’m pulling them out and using them for doing things like this in fact you guys if you’re subscribed to my channel you see deals like this all the time.
This is a house in florida and there’s the address right there i won’t even blip it out check this out 35 annual roi do you know what that means that means that you’re making all your money back in three years.
I’ve got one right here where i’m earning a 27.84 roi i’ve got one right here where i’m also earning 28.65 guys i put my money in these policies so that i become the bank on pulling that money out to buy other assets and now my money is earning in two places at once.
So by the way all these benefits they are real and they’re legit my friends personally this is what i call a life insurance bank account Rob will call it a cash value dividend paying life insurance policy and i’ve set up several of them.
Financing Through A Life Insurance Policy
Here’s a quick example on how to use the velocity of money when it comes to financing a car instead of through the car company you do it through your life insurance bank traditionally if you were to buy a car put twenty thousand dollars or borrow twenty thousand dollars at six percent over five years it may cost you hundred and 22 five dollars now that car five years later is worth about ten thousand right.
When you finance it through your life insurance bank and this is based on rating and gender and everything else but conceptually speaking if you borrow 20 to pay the car off and made those same payments over five years into your policy the car will still be worth 10 the money will be worth 23 400 so you would have gained dollars of recovering the lost opportunity cost of finance in the car versus doing it through your own life insurance bank.
Bottom line is the life insurance policy it’s almost like it becomes a bank that you can leverage from from making different financial choices and you’re always going to be better off doing that in most situations really rather than actually doing traditional financing or working through those financial institutions that want to keep your money captive.
Final Thoughts
Yes you just got to own the process everything you do is long term but staying specific to the process all good things begin to happen and now you can begin to make money on money while you’re buying different assets in different asset classes.
Listen i want to thank you for watching today’s article if you’re not a subscriber and you enjoy this information make sure you do subscribe and let’s just bring it home if you want to understand how to use life insurance to grow your life financially number one open your own life insurance bank account it’s free it doesn’t cost money put your money and save it there versus a normal savings account.
Number two find a business deal find a real estate deal find something that makes sense number three borrow money from that policy use it to support your investment step four make money and then pay the policy back and boom you’re now doing something that some of the wealthiest and smartest financial people on the planet are doing today.
Friend i hope that you have a greater understanding of what life insurance is and how you can use it to your own personal financial gain mad props to Rob for taking something super complex and making it super simple.