Ep. 311 – Farm Progress: Nebraska Farmer Got it WRONG

“The moral of this story is that these type of articles continue to be printed about the infinite banking concept with people that do not do their research. Their research consists of TikTok, Instagram, all the people that we at the Nelson Nash Institute are constantly trying to correct ourselves. If we are to have magazines and publishers and authors out there that we cannot trust, how are we supposed to know who to trust? I have said it before and I’ll say it again. I feel extremely bad for you as the consumer because who do you believe?”

Hello, hello, hello, and welcome back to the podcast. Thank you very much for being here. Okay. Today we have more myths to bust, more corrections to make because people don’t do their research. So I have been sent the article a couple of times now from numerous different people that Farm Progress, the Nebraska Farmer, I’m assuming it’s a magazine, Farm Progress, it’s on Farm Progress website. Nebraska Farmer did an article. From what I can tell in the article, there are three authors and the article is titled “Inside Viewpoint: Risks for Farmers and Ranchers Using Infinite Banking.” Okay. They don’t mention Farming Without the Bank in any of this, but they’re going to talk about infinite banking.

Three authors that did not do their research correctly. How do I know that? None of them show up in my database that they bought the book. You can tell by the article, which we’re going to break down line by line and tell what’s correct and tell what’s incorrect. It’s disheartening to see that three different people wrote an article and could not get information correct. They couldn’t read a book. They obviously didn’t read a book. Like maybe read Becoming Your Own Banker. The Bible of Infinite Banking, the founder of the infinite banking concept wrote that book. And yet again, we have people talking about stuff they don’t know about.

If I’m going to talk about something, first of all, I’m not going to talk about something I don’t know about. But if I’m going to, I’m going to maybe have the expert on and talk about it. Or I’m going to go to a source and do as much due diligence as I can. I’ve had other people interview me so that they can get the infinite banking concept correct. Because there’s a whole bunch of myths. There’s a whole bunch of misinformation being spread. And guess what? They don’t want to spread any more misinformation. That’s not what’s happening here. And so let’s break it down. And I have three pages of stuff. Three pages on their one little article of what is wrong.

Okay. So first, they say, given how often the concept is misunderstood and how aggressively it’s marketed, we decided to take a closer look. Misunderstood. Absolutely. This is misunderstood. And based on the information they’re providing in this article, it is going to continue to be misunderstood because they gave misinformation. So you would think that they would do their research to say, oh, you know what? We are going to make sure that we are providing the best information we can to our readers. Not providing more misinformation.

And then it’s aggressively marketed. I think that’s funny. Isn’t that what you do when you want to share your message? Is you market your message? So I wonder if they’re walking around saying, hey, it’s aggressively marketing John Deere. They’re aggressively marketing Case IH. Really? One of the authors is a estate planner. She helps people plan her estates. I see she has a website. Is she marketing? Is a financial advisor that also chimed in on this article? Marketing? That’s what people do. So that the message can get out. Because there’s a total incorrect message being spread. Right? Aggressive marketing. Aye, aye, aye.

Okay. Then they go on to say, IBC involves purchasing permanent life insurance, such as whole life, variable universal life, and indexed universal life. Can you guys already see my head exploding? This is like, I don’t know, second paragraph or so. Infinite banking is not universal life. It is not variable universal life, and it is not indexed universal life. It is dividend-paying whole life. Not once in this article did they mention dividend-paying. Not one single time. If you are not going to mention dividend-paying whole life, and you’re not going to talk about dividends in this entire article, that means that you have not read any books written on the infinite banking concept. You probably went to TikTok. You most likely went to AI and tried to find some information there. Even AI, let’s be honest, even AI has pretty decent information on the infinite banking concept, and that it’s dividend-paying whole life. I mean, we are three paragraphs in, and they are so incorrect on what the infinite banking concept is, that credibility is already lost in my eyes. It’s mind-boggling.

They then go on to say, policy has two components, death benefit and investment component called cash value. Cash value is not an investment. Dividend-paying whole life is not an investment. The infinite banking concept is not about an investment. In fact, the infinite banking concept isn’t even about life insurance, right? The last statement, they made it about life insurance. It’s a concept. It’s a thought process around money and utilizing money correctly, so that we can create cash flow and get ahead. The policy is the tool that helps the thought process. It’s not an investment. It’s not an investment. And so if we think it’s an investment, then we’re talking about a universal or an indexed product. That’s not what we’re talking about at all in any way, shape, or form.

I mean, you guys know. You’ve been here. You’ve listened. But if people are reading this article and they’ve never read Farming Without the Bank, they’ve never read Becoming Your Own Banker, they’re taking this and going, oh, these people know what they’re talking about. No, they don’t. I’ve lost respect for the whole magazine. If these people are writing incorrectly on this, what else are they writing incorrectly on? What other teachings? One of them is a farm business teacher. What other teachings are maybe incorrect? I’m not saying they are. I’m just asking, what are they? Because now I’m questioning legitimacy of everything that I’m reading from these three authors.

Okay. It’s an investment component. So at least I got the death benefit piece right. There’s some death benefit. Fantastic. It’s not a, it is not an investment. Cash value is technically the current portion of the future death benefit. Okay. Current value of the future death benefit. In English, that means cash value is a portion of the death benefit they allow you to borrow against today while you’re alive. Let me say that again. Cash value is a portion of the death benefit they allow you to borrow against while you’re alive. It’s not an investment. They have, they take your premiums and they put them in with a mutual company that pays dividends. We are not talking about universal variable or index. Mutual companies will take your premium and they’ll buy bonds, real estate, those sort of things. That’s a majority of their portfolio. Okay. Okay. This is not an investment. This is so unbelievably wrong.

Then they say this tactic rarely works. How do they know that it rarely works? Did they talk to anybody that is doing it? Because if they did talk to somebody that’s doing infinite banking correctly, according to Becoming Your Own Banker, they would see that it works. Why does it work? Because it’s a guaranteed product. It is guaranteed to earn interest every single year until the day you die, regardless if you’re borrowing against it or not. When you turn 121, your policy must endow. Meaning cash value and death benefit has to equal one another. Okay. Guaranteed. Guaranteed. By contract. Not universal life. Not indexed. Not variable. None of those are guaranteed products. Plain and simple.

So this tactic rarely works. Why would it rarely work? I have over 1,500 clients using this. I have colleagues with thousands of clients. There are hundreds and hundreds of us across the country teaching this concept. And all of our clients are succeeding. And it does not matter at what income level. Okay. Don’t tell me, oh, it’s only for the rich. No, it’s not. I talked to a client yesterday that was delivering pizza. She started her premium and it was $2,000 a year. She now is selling chickens. And she said, I am so glad I started my policy when I did. Because when my transmission went out on my vehicle, I use that to replace it. Hmm. So it’s not working. It’s working for somebody that has a $2,000 a year premium and delivering pizza. It’s not an income. It’s a mindset around money and utilizing money and a future long-term look. Which I’m getting into.

Okay. Continuing. Then they say there’s four reasons that this could be risky. Okay. Number one. Premiums must be paid or the policy will lapse and loss of premiums and death benefit. You don’t say. What happens if you don’t pay your term premium? Oh, there’s going to be a loss of death benefit. Right? And you’ve lost all your premiums. What happens if you don’t die in the length of the term? What happens if you have a 20-year term and you don’t die during that 20 years? Oh, you lost your premium. And you lost your death benefit. You don’t even have a policy. So, I’m not understanding. Like, that’s common knowledge. You have to pay your premiums. Common sense.

Then they go on to say, once, if you don’t pay your premium and you lose your policy, your gains are going to be taxable. Yes, absolutely they are. That is good information. However, that is why you don’t cancel your policy. That is why you work with somebody so that you know that you can pay that premium forever and you don’t buy a policy that’s too big and you can’t afford it. And if you close out your 401(k), you close out your IRA, you’re going to pay tax on the gains. Right? The only thing that is not subject to tax on gains is going to be a Roth.

And I’ve come across this where I’ve talked to people and their accountants will tell their dad, oh, you’re 80. You don’t need that whole life insurance policy. Just cancel it. I’m like, you’ve got to be kidding me. That hurt them on taxes. Yep. Accountant didn’t care. Why wouldn’t you just, why wouldn’t the accountant just say borrow against it? Because he doesn’t know. So, here, why not just say, okay, yeah, you’re going to lose, you got to pay your premium. That’s common knowledge and common sense. You need to pay it every year. But there’s ways to make sure that you’re not taxed. And that is borrowing against it. That is not, you don’t cancel. So, I shouldn’t put money here. And this is a big risk. Because if I don’t pay my premium, I have to pay taxes. So, is the same risk applied to my IRAs and my 401(k)s? Don’t put money there because when you retire, you have to pay tax.

They, again, at the end of that paragraph, warn you that you have to pay premiums. Yes. You have to pay premiums on your term insurance. You have to pay premiums on your home and auto or you don’t have coverage. You have to pay premiums on your crop insurance or you don’t have coverage. You have to pay premiums on insurance or you don’t have coverage. That is such a minor risk. That’s what we’re going to pick up here. So, we’re warning people, maybe don’t buy a whole life insurance policy because you’re going to have to pay premiums. Are we warning them not to buy term insurance, crop insurance, property and casualty insurance because they’re going to have to pay premium? No. Like, I get that the article is about risk. This article could have been so much better and so much more informative. But instead, it’s fear-mongering and more misinformation.

Okay, let’s continue. Second issue. Premium in the early years goes to death benefit and a little to cash value. Cash value increases slowly over time. It takes years. Did you guys catch that? Premium in the early years goes to death benefit and little to cash value. Here is another reason why I can tell that they have not done their due diligence. And they talk about paid-up additions riders a little bit later. But if you understand how a policy is structured for use of infinite banking, you understand that most agents are going to do 60 to 75% of premium is going to go to cash value immediately. Immediately. Immediately. Year one. I typically, typically, not every case is exactly the same. The majority of the time, I am doing 75% of premium to cash value.

That 75%, you’re able to borrow against that in 10 days. So we’re paying our premium. We’re turning around and we’re borrowing against it to use it for operating, buy cattle, buy inputs, whatever. Down payment on land. It doesn’t matter. Want to put a new alternator in your vehicle? Whatever that happens to be. I’ve had people use it for teeth implants. You can use it for whatever you want. But the policy is not set up like traditional whole life, which there’s nothing bad with traditional dividend-paying whole life either. It is not set up like universal life, variable life, index, where it’s all going to the base portion of the policy that’s buying death benefit. That takes 20 plus years and it takes many years to get going. But that is not a policy set up for infinite banking. That is traditional whole life insurance. That’s traditional universal life, variable life, whatever that might be. Okay?

Then they go on to talk about the MEC and that putting money where when we create a policy for infinite banking, we’re putting money into paid-up additions. Beware. That could MEC the policy. And then everything is going to grow taxable. Yes, they are correct. Not a reason to avoid it, but a very good reason to make sure that you are finding an agent that understands that. That is structuring a policy in such a way that it won’t MEC on you. But guess what? My policies don’t MEC. They might MEC 25, 30 years down the road. Yeah. But guess what? You quit putting money into PUAs. You fund it as much as you can up front. And then you just pay what you need to to keep it going, which is typically the base death benefit portion.

And another thing, the insurance companies run every payment through a MEC test. So when you send a check in or you submit payment, they’re going to submit it through a MEC test so that if it MECs, they send you a letter, you have 30 days to respond and say, nope, I don’t want that to MEC. Send me my money back. And they’ll send you your money back to avoid the MEC. We’re so scared of a MEC that we don’t want to do anything. And these people are talking about, oh, then it’s going to grow taxable. You mean, Mr. Financial Advisor that helped write this article, you mean like the IRAs that you sell, like 401(k)s, like annuities, all of that stuff grows taxable. So if this did MEC, is it a big deal? It’s only a big deal if you utilize the money. If you never borrow against it, if you never cancel the policy, you’re not having to worry about it. If the policy MECs and you borrow against it, yeah, then you’re going to have to pay tax on the gain, on whatever portion of the gain you borrow. But then when you pay it back, that becomes your new basis and you don’t ever have to pay tax on that again. That’s not told here. The finer details of the MEC are not disclosed here. We’re just warning you, red lights, that this might not be the best option.

Then they talk about rate of return and loan interest. Oh, if you guys are watching that video, can you see how excited I am to talk about rates of return? They’re saying the rate of return, the only way that this is going to work. First of all, they’re warning you that the loan is not free. You have to pay interest on that. And I am thankful that they are doing that because there is this huge misconception that you can just take a policy loan and you never have to pay it back and it’s not a big deal. It is a big deal because it compounds from year to year. It is a big deal.

Does the interest that you are earning have to be more than what you are paying? That is the only time this works. That’s what they’re saying. You have to pay less than what you’re earning. So they’re looking at two rates right now. Well, first of all, they went on to say they can’t find a company that talks about their rate of return. Well, it’s in a contract. Every company has their gross rate of return in the contract. OneAmerica’s gross rate of return is 3.25%. Some companies are 3%. Old contracts are 4% gross rate of return. Not hard to find. Mr. Financial Advisor that helped write this article should have had information on that, right? Because he has accessibility to this stuff. Or they could have called. They could have called an agent. In their due diligence stage, they could have called an agent. They could have called a company and asked a company, what is your rate of return in the contract?

Now, that’s a formula. You guys know that. I’m not going to. It’s 3.25 gross, but that’s only one part of the formula. So they want to look at a rate of return based on what we’re earning versus what we’re paying. But what we’re earning is different for every single person. Because it’s going to be based on their health. When they’re likely to die. How long before they turn 121? The contract amount. So what is the rate of return? I don’t know. Everybody’s is different. It is lower than what we’re paying in interest. Yes, it’s going to be lower than what we’re paying in interest. But if they would have actually read Becoming Your Own Banker, they would have seen that Nelson talks about thinking like a forester. You need to think long term.

Because we are earning uninterrupted compound interest and dividends. They don’t address dividends because they don’t know about dividend-paying whole life. Or they know about it and they’re not talking about it. So we’re earning compound interest and dividends. And yes, I’m going to look at the dividends because these companies are 150 plus years old and they’ve always paid a dividend. So I’m going to look at the dividend. So we’re earning uninterrupted. It’s constantly going up. As long as we pay our interest, as long as we pay our loan back, if we pay interest only, the interest stays level. If we pay the loan down, we have amortizing. Long term, we will earn more money in compound interest and dividends than we are ever going to pay the life insurance company in interest to borrow our money. Okay, that is not talked about in here at all. There is no conversation in this article about types of interest. Instead, it is rates of interest. That’s not what we’re talking about here. We’re talking about types of interest.

Can the policy blow up on you? Yes. If you don’t ever pay the interest, you just keep taking loans and keep taking loans and never pay interest back. Yeah. What am I preaching 24-7? Pay your interest. This is not free money. So that’s great that they said that, but they’re not right in the context of why it’s working and how it’s working. Again, we pride into our due diligence. Clearly.

Number four reason. Monitoring the insurance company. They’re saying guarantees are only as good as the company. True. That is why you want to do your due diligence on the company. That is why I do my due diligence on the company. Because it’s a guarantee. They’re saying it’s only as good as the company because they’ve seen companies. They talk about PHL Variable Insurance. What? Variable universal life? Not a dividend-paying mutual company? Yeah. You shouldn’t have had life insurance with them in the beginning. Universal life products across the board, in my opinion, should not be legal to write. And there are nonstop companies getting in trouble for IULs, VULs. Agents are issuing IULs with some huge rate of return on them. That’s not happening. They’re not getting penalized for that. They’re not getting reprimanded for that. Oh, no. Now they’re passing it off to the insured. And they should have known better. And they should have asked more questions. No. The industry needs to quit writing that crap. And nothing is guaranteed in those products.

So do we want a company that is stable? 100%. But then they make another statement that is so, like, it doesn’t even make sense to me. You want to make sure that the company has good underwriting. Yeah. But you missed the whole point. You want to make sure that your agent understands infinite banking. Maybe even go as far as to say, hey, you should be authorized through the Nelson Nash Institute as a practitioner for infinite banking so that we know that you know what you’re doing. That agent will then understand the infinite banking concept. They will understand the MEC. They’ll understand how to structure it correctly. They’ll understand what companies are good, what companies aren’t good. If your agent is not looking at the vital signs of the company, then do they even know anything about their company?

I am looking at vital signs of the company. I sat at dinner two weeks ago with the chief investment officer of OneAmerica. I can call him. I can say, hey, where’s the money? I do. For over an hour, I was like, what are you investing in? Well, what about this? Well, what about this? My clients have questions. What about this, this, and this? And I made sure that the clients that I have that have questions about what’s going on, those questions got answered by him. Do I want to make sure that my company is viable? Yes, because I have policies there. I don’t want those policies to go away. Did we talk about how many banks go under? How many people are hurt from banks? The best they could find is a company that was put on rehabilitation. So we’re going to fear monger around that. I feel like this whole thing is not just warning you of the risk, but it’s fear mongering you into saying, hey, don’t do this infinite banking thing. I wouldn’t want to do it after I read this article because there’s so much misinformation.

So the moral of this story is that these type of articles continue to be printed about the infinite banking concept with people that do not do their research. Their research consists of TikTok, Instagram, all the people that we at the Nelson Nash Institute are constantly trying to correct ourselves. It is not about universal life. Again, if you read Nelson’s book, he talks about universal life and how you cannot use a universal life product for this. And so if we are to have magazines and publishers and authors out there that we cannot trust, how are we supposed to know who to trust? I have said it before and I’ll say it again. I feel extremely bad for you as the consumer because who do you believe? Do you believe them? Which one of them is a financial advisor? The other one is a farm business management teacher. You know, she does some succession planning. The other one is just a farmer. I think I’ve seen his name on a few other things.

So those are the people we trust whom have never purchased a book from me. I’m talking to the Nelson Nash Institute today. I will ask if they’ve ever purchased a book, Becoming Your Own Banker, from them. I will stake money on the fact that he’s not going to find them in his system either. And he sells them on Amazon so he could look through his Amazon list. How do these three people not know that Mary Jo Irmen exists? Chances are they do. Did I get a phone call? Did I get an email to be interviewed to talk about, hey, what are the risks? Are these risks 100% their risks? Are they the biggest risks? No. No.

The biggest risk is the one they didn’t even talk about, which is buying the wrong product. Buying a universal life, a variable life. Working with an incorrect agent that doesn’t understand how to implement it. Another risk is a client that doesn’t become the banker. In their head, we’re not becoming the banker. We’re going to build the bank and then we’re going to lock the doors and we’re never going to use it. They’re not getting the correct information. The article should have been the truth about infinite banking and what you don’t want to do when you’re talking to a local agent. It’s just so fascinating to me. So fascinating to me that so many people are sitting in this industry trying to sell life insurance or they’re writing articles like this, not educating themselves or not allowing me to have a voice in the matter.

I don’t know that they know me. There’s a farm forum online that they’re always talking about Farming Without the Bank. So one day I signed up and said, well, it’s time to correct some of this misinformation. In that farm forum, there are people that are financial advisors. I signed up. One of my clients signed up. He got approved immediately. I had to wait 24 hours and then they approved my username and password. But I was not allowed to go to that topic in the forum. They blocked me from it. I didn’t use a fake name. I could have used a fake name. Nope. I’m going to go in there with a set of you know what’s so I can just share information and correct what’s incorrect. Nope. Immediately we’re going to block you. Whoa. Well, why are we shutting the voice down that can actually provide the correct information? Because the financial advisor that is the pet student in that forum, we can’t prove him wrong because he thinks he knows everything so correctly. When my clients respond in that forum, they get attacked. They don’t want to learn.

Similar. No, nobody’s attacking me here. Similar. Are we attacking the infinite banking concept without actually knowing the truth about it? We’ve written to Farm Progress and we’ve told them this article was not correct. We’ll see if they reach out so that we can correct it. They’ll most likely hear this. And all I’m going to say is I’m disappointed. I’m disappointed in the misinformation. There’s good stuff in this article as well. But there’s a lot of stuff in this article that is going to tell people not to do this, which is then not going to save a family farm with a discounted dollar. And we’re not going to create generational wealth. Instead, we’re going to continue to do succession planning like we’ve always done it. We’re going to continue to go to the bank. We’re going to continue to lose liquidity. We’re going to have somebody else control our entire monetary system going through our hands. That’s what we’re going to do. Because we’ve scared them because they’re maybe going to read this, but they’re not going to read Farming Without the Bank. Because nope, we’ve all… No, no, no.

The podcast that you may listen to before or after this, I talk about a client or not a client, but a reader that wrote in and said, Mary Jo, these are all the things I hear from the people around me about why this is a scam, why they don’t need to do this, why they don’t need to read the book. All this article did was provide more of that content for them. Instead of encouraging people, instead of providing the right information, it’s disheartening.

There are farm organizations and associations that want me to speak on their podcasts. And then as soon as they know I’m not going to back their life insurance company, they go silent. They won’t let me speak on their stages. And many of you are paying fees to belong to these organizations. And they are holding the voice of you getting ahead and giving you options because they want their life insurance sold. And they can’t do the infinite banking concept with their life insurance because they’re not dividend-paying whole life. They’re not mutual. They’re not paying dividends. They can’t structure it like I can. They can’t do it. But instead of spreading the message and helping you, they are what? Trying to shut my voice down. Because there’s something for them on the back end.

All it does is make me louder. I’m not somebody that you tell no. And I’m like, okay, no. It’s not how I operate. You are going to tell me no. And I am going to get louder. And I will put more money behind my aggressive marketing so that people know that this is an option. We are sitting here crying on a daily basis about agriculture and how nobody wants to come back to the farm and we’re losing farms and nobody’s passing it off correctly. And nobody is succession planning. It is a non-stop whine fest about all of that. And yet when there’s something that can help, we have alarms around all of it in such a way that is not encouraging them because they didn’t go to the source.

And I don’t even have to be the source. There are many authorized practitioners in this country and they chose to not talk to any of them. They chose to not go to Becoming Your Own Banker, the source. If they had, we’d be talking about dividend-paying whole life. We wouldn’t be talking about universal life. We wouldn’t be talking about rates of return. We’d be talking about thinking like a forester. All the concept things, not just the life insurance things. I welcome a conversation with any three of these authors. If any of them want to say, hey, Mary Jo, I would really like to know the full reason. First, you read the book. I’m not going to talk to you unless you read the book because I’m not going to convince you that this is good. You’re going to read my book or you’re going to read Nelson’s book and then I’m happy to have that conversation. All three of you are in positions to help or hurt people. And this was about a 50-50 split.

All right. I had a loss for words outside of that because it’s disappointing. Disappointing in the agriculture sector. Every time I come across this kind of stuff in anything ag related, it’s disappointing because we complain about suicide rates. We complain about handing the farm off. We complain about losing farmers and losing farms and losing family operations. And then we don’t do anything to provide them information that can truly help them.

All right, you guys. You know the routine. Go to farmingwithoutthebank.com. Grab the book. If you have comments, questions, concerns, email me. maryjo@withoutthebank.com. If you’re the author, happy to talk to you after you read the book. If somebody gave you the book and you read the book and you wrote this, you might want to read it again. All right, you guys. You have a fantastic rest of your day.

Thanks for listening to the Farming Without the Bank podcast. We hope today’s episode has inspired you to take control of your finances in new ways. Don’t forget to check out our website, farmingwithoutthebank.com, and engage with us on our Facebook page, Farming Without the Bank. Join us next week as we smash more financial myths and empower you to accomplish your financial goals.