Why Farmers Stay Broke & How to Actually Keep More of Your Money (Ep. 369)

"Managing that money is important. How we use money is important. And I talk about that, and I call it utilization of money, and apparently people don't know what the word utilization means. But how we use money is so important. So important. It doesn't matter how much money you make, how you're using it is what's gonna be important."

Hello, hello, hello, and welcome back to the podcast. Thank you very much for being here. I've got an assortment of topics today.

First off, I just got back from OneAmerica's home office in Indianapolis, and I'm tired, you guys. You can probably see it. I had a day of recovery yesterday. And it was a rough trip. I don't know what the deal is. I don't know what you guys are like, but, you know, when I go on those things I'm very busy when I get there, and I'm very busy until I get home, and for whatever reason, I didn't sleep good. I normally sleep pretty well in hotels, but I didn't sleep good. So forgive me if I'm a little more spacey today than normal.

But I did get some answers. I have had three clients thus far that have emailed me about the private equity stuff that they're seeing. Apparently, MassMutual is in the news for private equity, and that they're investing in private equity and that this is bad.

And so because it's recent news, when I was at home office, OneAmerica in particular — 'cause that's the company that I write the majority of my business with — they did address it because I asked the question for you guys. And private equity is something that they've done forever.

There's two different kinds of private equity. There is, like, a short-term — this is my understanding from what they explained — there's, like, a short-term, higher-risk private equity, and then there's some long-term stuff that, you know, it's kind of a long game. Which again, that's what they've done forever. And so that's the safe stuff.

Some of these companies are getting in some of that short-term, looking for higher rates of return, a little riskier things. That is not something that the company I work with does. I don't know about the other companies. I do write with other companies. I've not asked them because they're not the majority of my business.

I did see that there's a product — Bobby Samuelson has a company, and it's The Product Review, I think it's called, and I do subscribe to that. And he just recently did an article on private equity stuff too, and he kind of listed out which companies have the majority of it. It sounds like Mass is just kind of on the hook, like they're gonna be okay. It's not the end of the world. I don't know if it's just blowing up because people writing about it don't truly understand it. I'm not sure.

Anywho, if you are looking for information on anything really life insurance-related, The Product Review or Bobby Samuelson — just Google that, and his stuff is so good. He's unbiased. All he does is write about life insurance. He reviews every company, reviews every product, doesn't work for a company. He doesn't get paid for a company. I really like Bobby. He's ridiculously smart, and so it is hard to sometimes decipher some of his stuff, but he's very thorough, and he's a super, super nice guy.

You know, I do have a lot of clients that are paying attention to what's happening in the life insurance industry, which that's awesome. That's fantastic. And so if you are one of those people that are really wanting to dig deep and get more information, that's a good spot to go. But as far as private equity kinda things, we're good on this side. So if you're a client of mine, we don't have to worry about that kind of stuff.

The other thing that I got sent an email just this morning actually of — and it's interesting because there are people out there. For a long, long time, I've been kinda the only one in the life insurance/farm world, and so there's not been a lot of other people in this market targeting farmers. And as of recent, there have been a few more people that are really targeting the agriculture industry.

I just got an email from a client of mine that said he is seeing somebody posting on Instagram, and he's targeting farmers. And he is saying that you don't need a medical under $4 million a year. And so he's just trying to hook people that way to just sell life insurance.

Well, almost every carrier is doing that in today's world. It's called express underwriting, various other things people are calling it. And every company is doing this because it's so expensive to underwrite a client. And so what they do is they have you fill out your medical questions, and if there is nothing that you would answer to that would be alarming — we don't have any family history, we don't have any of that stuff — you can skip the medical. And every company has a different threshold. I know our company just increased that threshold.

Here is the thing. If you're reading that and you're like, "Oh, I just had skin cancer. I just had a heart attack or stroke. I can get up to $4 million and I don't have to go through a health exam" — yes you do, 'cause you're going to answer the question, "Hey, I had a heart attack three years ago." Well, you're going to have to go through a paramed exam.

And so it's a really nice hook to get people in to talk to them and apply, and then they can do their little sales tactic or whatever it is they're gonna do. But it's interesting because they're targeting farmers as well, and so chances are somebody's going to see that and go, "Oh, well, I can do it with this company without any medical."

Now, I have a different side to that. I get that it saves the company a bunch of money, but I also look at the risk. If we have an insurance company that's not having people go through medical exams, what if somebody lies on their application?

Now, granted, if you lie on your application, the insurance company does not have to pay out your claim. So you guys all need to understand that. Some people may say, "Well, I paid for my premium and my claim never got paid." Did you lie on the application? I have had colleagues where people have said, "Nope, I have never done illegal drugs," and they die of an overdose. That claim's not gonna get paid. The premium will get returned, but the claim's not gonna get paid because you lied on the application.

So A, you don't lie on an application. And if an insurance company doesn't do the medical, now we have more risk to the insurance company that they're gonna pay out claims they did not anticipate paying out. They have such a huge buffer that it should not matter, and actuarially, they know what they're doing, right? They've already figured that in.

But keep in mind, I came from the world a long, long time ago where every single person went through a medical exam. It's just how it worked. You went through a medical exam. And so if you're not going through a medical exam, I'm just looking at that and questioning that.

And so a lot of people do like that, and that is one way to get things done faster. Agents like that, because they can get paid faster. I don't care. I actually ran into somebody at the conference that I was at, and they were talking about, "As an agent, how do we get paid faster?" And I said, "Why are you worried about it? If you don't have enough business coming in, or you don't know how to manage your money, that's not the insurance company's problem."

Some of these people use that as a tactic — they wanna get paid faster, but I wanna make sure my company's gonna be there for the long haul. So there's a Catch-22 on that.

We have to remember that these are mutual companies, especially if you're working with a mutual company that pays dividends. Okay, some companies are mutual, they don't pay dividends. But if you're working with a mutual company that pays dividends, you're an owner in that company. Why are you trying to screw your own company?

You're trying to get a life insurance policy with this company, and then maybe saying, "I'm not healthy," or, "I'm gonna lie on an application," and then they have to pay out a death claim sooner than they had anticipated, which is a loss to them. If a ton of those things happen, that's an issue. That's a loss to them. And so why are you trying to do that? You're stealing the peas, as Nelson would say. Why would you do that?

We have to remember, if we do infinite banking and we do it correctly with a mutual company that pays dividends — I don't care what mutual company it is — you're a part-owner of that company. Why are you trying to screw your own company?

Even if you don't pay interest on a loan, if you don't pay a loan back, whatever, the company is taking your money for interest. Let's just use that as an example. They're taking your money for interest. Why are they taking my money in advance? Because they wanna make sure they're made whole. Why wouldn't they be taking your money in advance? The bank is actually taking more risk by not taking your money in advance for interest. Because what happens if you don't pay? Now they don't make any interest on their money, and so it's hurting the bank. Well, you're not an owner of the bank, so you don't care. But I'm an owner of the company, so don't be screwing the company.

Think about that, people. You can't take things from your business. If you own a business, the more things you take from that business and don't pay for is hurting the business. And people do that all the time. And they're like, "Well, I don't know why this business isn't working." Well, the business isn't working because you're just driving the vehicle around, and you're letting the business pay for cash, but it was personal. So now the business is paying for the gas, but you weren't actually on a job to make the money. So did you even bill accordingly for that job? Because you're gonna be doing all this personal stuff with your vehicle.

We have to think about things. It's super fascinating to me when I hear people talk about the fact that they lost everything and they came back again, right? Oh, I built my business and I lost everything, and now I rebuilt. And that's great, and that's fantastic. But I always question — and it's not me being judgey, but I always question: how did you get to the point of losing everything? Was it a mismanagement of money?

I was listening to Myron Golden this morning, and I love Myron Golden. If you guys don't listen to him, and you have a business, he's great. Even if you don't have a business, he's great on just mindset of money. I don't necessarily learn anything, but I get — like, he's a really good teacher, so you're getting a lot of tips and tricks. But he said, "You can work at McDonald's and still be a millionaire. It's not how much money you make, it's what you do with the money you make."

And I've talked about that before. If you can't manage a — dollar, you can't manage a million. But the way he said it was so good, because there are people that cannot manage money, and it doesn't matter how much they make, they're gonna go broke. And I don't know if it's just that they're too risky. I don't know if it's just that it's a mismanagement of money.

I heard somebody talking on a podcast that they had no money six months ago — not on a podcast, but on a video. They had no money six months ago. These particular people that I was listening to, I have known for several years, and I'm like, "Well, that's interesting. You had no money six months ago. You had to let employees go because you could not make payroll. But yet you dressed, you had the persona, you lived and you showed everybody you were living as if you had a shit pile of money."

If you're portraying that you have all this money, and you're going out to eat in all these fancy places, and you're doing all these things, and then you don't have money for payroll — what?

I cannot say I am one of those business owners that wasn't sure how I was going to make payroll. I knew — when I hired my first assistant, I knew that I had X amount of dollars for payroll, and I knew that I had that for the next three months, and I was very honest with her when I hired her. "This is what I have. We've got people coming in. If that doesn't turn into business, then I don't know what I'm gonna do." But once that system started rolling, then I was okay. I knew how to manage my money. I was not overspending. I was still managing my money.

And so it's super interesting to me that we're going to pretend like we have a lot of money. We're gonna do a lot of these things. We're gonna be fancy about it, and then we're gonna not be able to make payroll. And then when we do make money, because now we're in a better position in six months — when we do make money, now all of a sudden we're spending it and we have the same luxury, the same life luxury. We're still flying first class. We're still renting yachts. We're still doing all of these things.

Why are we not saving or putting enough money back so that if something catastrophic happens, we still have enough money? I always have enough cash value not being used so that I can make sure my staff is taken care of and I can make payroll. I can go without. I will figure out how I can go without so I can make payroll.

But managing that money is important. How we use money is important. And I talk about that, and I call it utilization of money, and apparently people don't know what the word utilization means. But how we use money — Myron Golden is 100% correct. How we use money is so important. So important. It doesn't matter how much money you make, how you're using it is what's gonna be important.

And then the final topic today is, you know, I did a podcast, I don't know, a few weeks ago, and there's a clip running about me saying, "Hey, why don't you allow your hired man to have some cows? Run some cows on your ground so that they can, you know, build up some cash, they can build up some equity in their cows, and then they can go ranch on their own."

Holy moly. The comments on that are astounding. And I'm gonna call it a broken thought process. Those people are gonna tell me I have a broken thought process, but it's all relative to how we think, I guess.

But there's one comment that just won't leave my head, and it is the guy that said, "If I let my hired man have cows, then he won't be my hired man anymore." Yeah, that's the point. There's always somebody that's going to be able to do that job or that you can find to do that job.

But in the past, I have had two employees that I have encouraged to go do their own business, helped them, taught them marketing, all the things. And all the agents that work with me have, all of them, including John. And you guys know John. Including John. If he wanted to leave tomorrow, I would be ecstatic for him that he wants to go out and do his own thing.

The scarcity mindset — and I have read a number of books on this of how companies have built their culture by helping their employees get better. If I have employees that wanna get better, anybody around me, I want to make sure that I can help them as best I can. Because now I have somebody else out in the world that I have a relationship with and we can work together outside of that.

It's no different than — let's just take Michelle. You guys have seen her on the podcast a couple of times now. I could say, "You know what? I'm not gonna send anybody to Michelle because I want that income. Why would I give up the ability to write my own long-term care?" That is what the majority of agents do out there. They are not going to send their business to Michelle. No, no, no, no, no. They are going to write their own long-term care without knowing exactly how to do that, because they don't wanna give up the money.

No, I want to see Michelle succeed. I want to make sure my clients are taken care of. And so the scarcity mindset is not — it's not that I don't have it, it's that I don't have a problem with it, okay? I have it, but I have to fight my brain to say, "No. No, no, no. If I write long-term care insurance, then I'm not serving my clients on the life insurance side."

If I can't help an employee advance, then what? Then that karma's coming back to me. I want to see people succeed because then they will want to see me succeed.

This mindset is crazy. I have so many clients, and so many of them are either they own ranches and farms, or they are hired men. And there are a lot of people out there that are giving their hired men an opportunity to start farming, to teach them that, to have some cattle.

And who said they have to be run for free? Somebody said, "Well, why would I let them use my land for free?" Who said they're using it for free? Be dumb. Why aren't you having them compensate you for that? They're paying fees, custom grazing fees. They're paying equipment rent, whatever that looks like. Let them get started, and you're always gonna have somebody that's willing to help you out.

But just like we tell employees, "Don't burn bridges when you leave an employer" — you're burning bridges as soon as you let somebody… You have an upset hired man, and now all of a sudden you need somebody, you can't call that guy and he's not gonna come back and help you ever.

It's just mind-boggling to me, this mindset, and I don't honestly even know why it's mind-boggling to me. 'Cause I understand the industry. I understand how farmers and ranchers think. I understand that the majority of this industry is just absolutely the most negative thinkers on the planet. But it just still blows me away all the time. All the time! Oh, my gosh. I gotta quit reading the comments is the moral of the story here.

'Cause I guess I would — if I was a rancher and I had the ability to let somebody have a couple head of cattle, why wouldn't I? 'Cause you know what? That person might know somebody that has land for rent, and that person, they may say, "Hey, my boss is looking for more land to rent." And you may get land just because of how you treat your employees.

Man, I feel like that scarcity mindset — and we make our own struggles. I really do believe that a lot of times our mindset creates our own struggles. And if that is what you're doing, it's gonna be a tough world. It's gonna be tough. It doesn't need to be that tough. Absolutely not. Absolutely not.

I mean, you guys all know how ornery I am and that I'm a fighter. I just naturally am a fighter and I have to fight that. I have to fight being a fighter because sometimes it just does not make sense for me to expel that energy to fight something that is not worth fighting. But I believe there's a lesson in everything and that I'm the one that needs to be teaching the lessons. That's not the case.

So anyway, those are my three topics today. If you guys have something that you want to hear or something I've not explained or whatever, just email me, maryjo@withoutthebank.com. I'm happy to go over it. For today, that's it. You guys have a fantastic rest of your day and make sure you go get the books. Talk to you in the next podcast.