You Don’t Need $100,000 to Start Infinite Banking – Here’s Why (Ep. 365)

"Don't read the book and sit in those numbers of the book and say, 'There is nothing I can do 'cause I don't have this kind of money,' or, 'This isn't enough money.' Either side of that coin is bad. We have to make the appointment. We have to sit down and look at the numbers. If you can't do $12,000, $50,000, $100,000, $20,000 — whatever numbers are in the book — if you can't do that, remember, we can go down to three. Now, there are some agents that are gonna say, 'No, I won't do that 'cause it's not worth it.' Well, it might not be worth it for that agent, but that doesn't mean that it's not worth it for you. At least it gets you started. You understand how to use the policy. You're borrowing against it. You're paying it back, and then the next one is a lot easier to start, because it is a system of policies. A bank does not have one branch. They have branches all over town so that people can be depositing money. You want to do the same thing."

Hello, hello, hello, and welcome back to the podcast. Thank you very much for being here. All right. Today we are going to talk about: at what point do you have to have a lot of money? When are you ready to get started?

I had a meeting this week with somebody that read the book seven years ago. This is actually happening quite often for me, where I'm meeting with people that read the book maybe two years ago, three years ago, five years ago, seven years ago. I had a meeting in the last year where the guy read the book — or he bought the book — like, in 2014, when the book was just out. So what's that, 12 years ago? Geez, that book's old.

And so people are reading it, and in most cases they will come back to me for one of two reasons. One, they finally get it, or they heard somebody else talking about it and maybe it finally registered. Or two, they think now they have the money.

So let's talk about the money piece, because the getting-it piece is just a matter of continually educating. Maybe it's continually talking to people, or rereading the book. Because you shouldn't just read the book one time. You should actually be reading the book multiple times — especially if you don't get it right away, read it multiple times.

But they came back to me and said, "Hey, you know what? Now I think I have the money, 'cause I reread the book and it makes sense." Here's the thing. This particular person said, "I didn't think I had the money to start, because the illustrations in the book and the scenarios in the book were much more than what I could afford."

One: how do you know what you can afford? Because you're not thinking about utilizing money the same way that I'm thinking about using money. You might have something paid off.

I had a meeting just this week with a couple where he's ready to go, he gets it, and she thinks they don't have any money — because she wants all of her debt paid off before they start a policy. She doesn't ever wanna use the policy. She wants the policy to be like a savings account. And so in that scenario, you're never going to be ready to start a policy, because you're using it as a savings account. It's not meant to be used as a savings account.

The money is liquid. You have access to use it. So we want to run money through the policy. How much we run through the policy is what I'm here to help with.

There are times where I'm going to say, "You know what? You might not be ready right now." I had somebody just recently with a whole bunch of credit card debt. I'm like, "Okay, you're going to be ready if we can figure out what to do with the credit card debt. But because there's all this credit card debt, let's first get that taken care of, and then we can start the policy." And this is what that policy could look like.

So in this case, the guy read the book seven or eight years ago. Now he thinks that, "I'm gonna have this conversation," 'cause the bank's maybe giving him a little bit of problem, or he thinks he's got some money freed up, whatever. So I showed him a policy that is a $4,000 a year premium.

Now, not everybody can do $4,000 a year. This person was in their 40s; they can still go as low as $4,000. If you're 60 — like I had somebody that's 60 years old come to me today and say, "Hey, Mary Jo, can I do a $5,000 a year policy?" No, you can't. I have to have enough death benefit to issue a policy. But something is better than nothing. We'll try to go as low as we can. We're not gonna shoot for the stars and do $100,000 when you don't have $100,000.

And it doesn't mean that you can't get started. 'Cause I see the opposite side of that too, where they're like, "Well, I can't put enough money in, because the book illustration only shows $100,000. I'm gonna need to put a million a year." Just do the math and take that illustration times 10. All the numbers are gonna be the same. Yes, you can do that if you have the funds to do that.

When you guys read my book, or you're reading Nelson's book, or whatever it is that you're reading, and you're thinking about numbers — don't think, "I can't do that because I don't have $12,000. I don't have $20,000. I don't have $100,000." In the book, I even say all the numbers are relative. Subtract a zero if you need to, because the numbers are going to be the same. So just do a little bit of the math. Don't get so stuck in your head that you can't do it because you don't think that you have the money.

In this particular case as well, he has two loans that are going to be paid off next year. After next year, which is in two years, right, he will have $11,000 that he no longer is paying to the banks, because those pieces of equipment are paid off. He could start a policy today for $4,000 a year, and in two years he can start another one for $11,000 a year, because it's a system of policies.

We also have people misunderstanding, where they think it's one policy and you're done, and you better do it perfectly right the first time because you're not gonna get to do it again. You can have as many policies as your human life value allows. Okay? So if the insurance company — they have a bunch of factors of how to figure this — but if the insurance company says you're worth $10 million, then you can have as many policies as you want up to a $10 million limit. Does not matter. So long as you can pass underwriting, in your health exams, you can keep getting policies.

Here's what we cannot do. We cannot have one policy and then add money to it every single year without it causing a modified endowment contract, which is causing it to grow taxable. We can't do that. Because of that MEC — modified endowment contract — that means we have to start multiple policies. So the first one you start, we're gonna start where it's comfortable. The second one, where it's comfortable. But now you have two premiums, so we have to take that into consideration. The third one, where it's comfortable. Now you have three premiums. We keep adding them as we go.

I talked to an existing client this week. She was talking about how she has excess money. How should I borrow money? What should I buy with it? How should I pay it back? All the things. And she's buying land from Dad. Well, we have a sibling that is entitled, and the sibling — we just keep giving them money. Mom and Dad just keep giving the sibling money.

And so in that situation, she is concerned that if I don't buy Mom and Dad out before they die, I'm gonna have a holy war with the sibling, 'cause she's gonna want everything. So I wanna buy them out now. So she said, "You know, I really need a policy on my dad."

Well, how old is Dad? Well, he's 50 — he was like 57 or 58. Now is the time to be doing that, because he's not 70. Why are we waiting? You have this excess money. You have a business, you have a job, and you farm. We had to walk through how is this extra premium gonna get paid, what does that look like, and some strategies around that.

Because in that scenario, I'm gonna say, "Hey, let's do a 10-pay policy on Dad. We're only paying premium for 10 years. If you need to borrow money against that policy, then let's borrow the cash value, but pay interest only. When the premium is done in 10 years, at year 11, you can start paying that loan back."

But it is important and imperative we get a policy on Dad before some kind of health challenge comes along, because the strategy is: hey, we're gonna need the death benefit to either buy out the sibling, or to use it to buy equipment, take over operating, whatever that looks like. But we need to start that now. If we start in two years, the cost of the death benefit is going to go from 45 cents or 46 cents to 50 cents or 55 cents — or maybe no cents, because he's not insurable.

We want to sit on our hands sometimes and go, "Well, I don't know. I don't want to make an appointment with Mary Jo and John because I don't know if I can get started." We're here to help you figure that out.

Now, the guy that I met with that waited seven years — could have he maybe started seven years ago with $4,000? Yeah, probably. And he would already be at the point in his policy where he would be at breakeven. Everything he put in for premium, he would have in cash value. He'd be cash flowing already. Now we're seven years behind the ball, and we're trying to figure out where we're going to get started, and it's probably the same level of where he would have gone before.

The other thing is, is he farms. He had an off-the-farm income at that point, and he's a diesel mechanic. So if you're a diesel mechanic and you're helping out neighbors, do you think you could pick up $4,000 of work a year? If you could — because you really want this premium, and you're going to figure out a way to get it — or could you flip some equipment? We were talking about that. He's been buying some equipment, fixing it, selling it. Doesn't always work, but sometimes it does.

So how are we going to start the system? Again, if you're not thinking outside the box and you're not around anybody thinking outside the box, guess what? You're going to stay in the box. So let's figure out how we can get those things started.

If you've got $40,000, $50,000, $60,000, $30,000 of credit card debt, I'm probably not gonna start anything unless we know we can get that paid off right away. Maybe we're gonna do a HELOC, maybe we have money in investments. I don't know, maybe you call and ask them to — "Hey, I can't pay this" — and they'll decrease your amount that you owe. That happens. If you can do some of those things, then the scenario changes.

But even for John and I to give you ideas of how can that get paid, what can you do to eliminate some of that debt? I mean, we're not debt counselors, but what can you do to eliminate some of that debt? What can you do to create cash flow?

This particular potential client — we talked about flipping equipment. We talked about, hey, he has land on a major highway and people always wanna set stuff there for sale. Okay, do you do that for free or do you do that for a charge? We want to be nice and do things for free, but then we struggle while everybody else is doing okay. Well, then why are we struggling? Why are we not figuring out how to make money and what to do to create some cash flow?

I mean, I got lots of ideas. That doesn't mean that they all work, it just means I have lots of ideas. But I've seen people do a lot of different things to make money. I just talked to this client this week. I have a client that details equipment for one of the auction companies. If you're a clean freak and you like detailing equipment, why are you not providing that service to farmers to detail equipment? This guy details equipment; he's starting an excavation company. He'll do just about anything for money. Now, should he maybe focus on something? Yeah, maybe. But he's gotta figure out what that one thing is, and then he can go and focus on that.

But so many of us just go, "Oh, we can't." Well, you can't because you think you can't, and you never talked to anybody that figures you can, 'cause everybody just figures you can't.

So don't read the book and sit in those numbers of the book and say, "There is nothing I can do 'cause I don't have this kind of money," or, "This isn't enough money." Either side of that coin is bad. We have to make the appointment. We have to sit down and look at the numbers. Can it be $4,000 of premium a year? About the lowest that I can go that makes sense is $3,000 a year of premium. $3,000 up to millions, okay? The sky's the limit.

If you can't do $12,000, $50,000, $100,000, $20,000 — whatever numbers are in the book — if you can't do that, remember, we can go down to three. Now, there are some agents that are gonna say, "No, I won't do that 'cause it's not worth it." Well, it might not be worth it for that agent, but that doesn't mean that it's not worth it for you. It's not gonna be some astronomically massive numbers that are gonna be life-changing, okay? But $3,000 into a 401(k) is not life-changing either. You're going to retire broke. It's not enough money.

But at least it gets you started. You understand how to use the policy. You're borrowing against it. You're paying it back, and then the next one is a lot easier to start, because it is a system of policies. A bank does not have one branch. They have branches all over town so that people can be depositing money. You want to do the same thing.

All right. If you have read the book and you've not scheduled your appointment because maybe it was five years ago, 10 years ago, whatever — pull the book out, reread it, okay? You should reread it, and then schedule your appointment, so we can kind of figure out where to get started. We can at least explain it, but I want you to reread it, so you don't come in and you don't even know what we're talking about, okay? You're gonna have to do a little bit of homework in the process, so we're still both on the same page, and you've been refreshed.

If you have comments or questions or whatever, email me: maryjo@withoutthebank.com. You can also email John at john@withoutthebank.com. Schedule your appointment with each one of us. We're happy to sit down and visit with you, and then we can go from there. All right. You guys have a fantastic rest of your day.