MLM 282 | Truth About Money

 

A lot of the things you’ve been taught about money truly aren’t the truth. In fact, the wealthy and successful have known this for a long time, owing to what they are now. It is time to let go of some of the things you thought you knew about making money as Jen Du Plessis invites Chris Naugle, the Co-founder and CEO of FlipOut Academy, Founder of The Money School, and Money Mentor for The Money Multiplier. All our life, we’re told to keep working hard for the money but never how to make our money work for us. Chris reveals this fact in this episode, diving deep into where you should and should not put your money in and how to take back the money you are used to giving to everybody else. He also taps into IBC (Infinite Banking Concept), getting your loan officers involved, and more. Join Chris in this episode to learn more about how to put your money to work and not lazily sit on the couch.

 

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The Truth About Money Only The Banks And The Wealthy Know With Chris Naugle

I’m excited to have you here with us. I want to say thank you so much for taking time out of your day to read and to gain some more knowledge to help expand your practice. Whether you’re a real estate agent or whether you’re a loan officer. I am excited to bring our guest on, Chris Naugle. It’s funny how we met. We’re just meeting but I know a lot about you because you have a business partner who you have been working with and he happens to be in one of my masterminds. It’s fun how that all came to fruition.

Let me tell you a little bit about Chris. He has dedicated his life to being America’s number one money mentor. His success includes managing over $30 million in assets in the financial services industry and millions in real estate businesses with over 200 transactions and an HGTV pilot show, which I can’t wait to know about. Over the years, he’s built sixteen companies. He’s been featured in Forbes Magazine, ABC and House Hunter.

We're told to keep working hard. We're never taught how to make our money work for us. Click To Tweet

He is the Cofounder and CEO of FlipOut Academy, Founder of The Money School, and Money Mentor for The Money Multiplier, which is funny because I have a program called The Momentum Multiplier. It’s good. We’re excited and delighted to have him here. He also has a book called Mapping Out the Millionaire Mystery, which I promise you I’ve been through. Hopefully, everyone can see. I’ve got dog years and comments all through the book. It was a great read. I read the whole thing, end to end. I’ll share it with everyone. I’m excited to have you here. Thank you so much for joining us.

It’s my honor and my privilege to be here. Thank you.

I’m happy to have you. I got lots of comments to make for that. As mortgage advisors or you can call yourself a mortgage broker or loan officer, you have a fiduciary responsibility to look after the overall wealth and health of your clients. This is not about quoting rates, selling a product, never showing up at closing, and never being heard from again. It’s not about that. If you want any length of time and sustainability in this industry, you have to learn how to dig into the financial aspect of what we do in mortgage lending. That’s looking at the application and going through it and saying, “Where are some holistic areas that we could approach, help, and partner with financial planners?”

The reason I brought Chris on is that he does something unique. Andrew must have sent me some video or maybe I saw it. I saw you walking through the sample with someone and it was showing you talking to him online and then writing notes down. As you were taking your notes, I thought, “This looks a lot like a loan application.” When we take applications or have discovery calls with our clients, we’re taking down the exact same information. In the end, where we go is different in lending as opposed to where you go. We need to be able to see that structure in there. What I want to do is I’d like to start from the beginning and ask you how you got into this. Why did you get into the financial piece of it? We don’t go to school to be a mortgage lender. Realtors don’t go to school to be a realtor. We all end up getting licenses like you but we don’t do that. What brought you into the business?

MLM 282 | Truth About Money

Truth About Money: Sometimes in life, when we hit the lowest point, it’s when we’re willing to receive the information that we should have been receiving the entire time.

 

I was a pro snowboarder in my younger years. I also had my own skateboard snowboard shops. I remember how I landed in Wall Street as an advisor, it was the dot-com crash. In the early 2000s, when we were in the dot-com recession, my businesses took a big hit. I remember I had to find something to get me through those times because I couldn’t take a paycheck from my store. I had to find a job. I was either going to deliver pizzas and then I put my resume out. I remember I got a call from a firm and they had me come in for an interview. I remember them talking about it. I had two of these companies but they were talking about all this stuff, stockbroker, and everything else. I had probably watched Wall Street to get myself in the mood and I was like, “Sign me up. Let’s do this.”

The Pursuit of Happyness.

It was such a great movie. I love that one. We could do a whole show on that movie and the lessons that were taken from that. I ended up taking the job and it was supposed to be a part-time thing to get me through this little rough time so I could get back to my world of snowboarding and running my shops. What I found is as soon as I got into it, I loved it. I focused so much on the clients and their goals, needs, the sheets, and the fact-finders. I fell in love with it and I got good at it. I remember my first year I was a rep. I was the number one new guy, the rookie. I fell in love with it that I started working all of my time on Wall Street instead of spending all my time in my shops. I started working on my business and not in it. That was an important takeaway from my life. That’s how I landed in the financial advisory world.

There are a lot of things that happened from the early 2000s when I entered right up to the point where I learned about privatized banking and how to become your own bank. A lot of failures, I’ll tell you that. I completely crashed and burned in real estate. I had to rebuild myself. It was a tough time. If it wasn’t for my girlfriend, who’s now my wife helping me pay the mortgage, utilities, and allowing two friends to move into my house, I never would have made it through that.

Pre-Airbnb thing. From 2009 to 2014, I started doing what Warren Buffett said, “Buy low, sell high, and don’t lose money.” I bought a whole bunch of real estate, pennies on the dollar. By 2014, that all crashed and burned on me too because the bank I was borrowing from ended up freezing my lines of credit and they called one of my mortgages. There’s more to that story but that’s what happened. I had to sell off all 36 units that I built out. Sometimes in life, when we hit the lowest point, it’s when we’re willing to receive the information that we should have been receiving the entire time.

As an advisor, I will be the first to say that I was making great money. I had a little bit of an ego. I’m thinking, “I know all there is to know about money. I’m a financial advisor, all these licenses, all these certifications.” What I didn’t know was what hurt me. What I didn’t know is how the wealthy use money and how different it is from what I was doing. I learned that at a three-day event that I went to because I wanted the iPad shuffle. Mike and Greg were talking about money and being their own bank. I was a sponge. I’m like, “This is different.” They started explaining what they were using and how they were doing it. I’m like, “No way. I’ve never been taught that in the advisory world.”

Those checking and savings accounts never seem to amount to as much. Click To Tweet

I flew out to Salt Lake City to meet with Mike at The Cheesecake Factory down in SLC. At this point, I was borrowing money from Mike. I remember asking him, “How are you lending me all this money? What are you using, self-directed IRAs? What’s going on?” He says, “No. A lot of the money I lend you, Chris, comes from my private bank.” I’m like, “Private bank, that sounds fun.” I was like a kid in the candy store. I’m like, “Give me the candy.” He starts telling me about it. At that moment, when he explains all the pros and all the things, I’m like a kid in a candy store and a sponge. He starts to tell me what this machine is. I sit back with a frown and I’m like, “No. It doesn’t work that way.”

Didn’t you have your arms crossed at the same time?

I was like, “Mike, I’m a financial advisor. I’m the guy that knows everything. What you’re telling me, this vehicle, this whole life insurance policy, they don’t work that way. I know. I’ve been in business a long time.” I’m sitting here like a big advisor and he leans into me with a serious face and he says, “Chris, if it doesn’t work this way, how have I been lending money to you exactly how I explained it all these years?” He sits back and I’m like, “Touché. How do I do this?” That’s where it all began. I started learning and applying. There were many years that I applied this. I used privatized banking and the infinite banking concept in my life.

It wasn’t until late 2018 that I started thinking, “I should be teaching people this. This is my calling. This is what transformed my life. I should be telling people about this.” That’s when I started doing it. Before that, I was having Brent fly out, do presentations for my REIA in different associations I was in. I watched this whole thing happen because I was excited at what it had done for me and I wanted other people to know about it.

After 2014 when you sold up a bunch of properties, you were able to then go back and accumulate some more properties. Correct?

Yeah, we started flipping.

I’m a member of something called Flip Out America. I don’t think we might use money the same way. We’ll have to figure that out when you and I talk. I do the same thing. I don’t flip properties. I buy properties with cash and then have receipts coming in every month as seller owner financing.

It’s a cool concept. It’s different but I don’t like where the money is coming from to pay for it. We’ll talk about that too. As I was reading the book, I already knew all this. I knew this concept because I have had a term life insurance policy. Especially in the lending industry, we have many years that are up and down. I’ve been cautioning people about the short-term gain for the long-term pain because everybody’s raking in the money and having great years and stuff. If you’re buying watches and you’re buying crazy stuff, monetary items, I’ve been through eight of those. I know what it’s like. It takes a long time to understand.

To your point, when someone hits that low, that’s when they’re ready to receive. There are a lot of people that are reading this blog and they aren’t at the low. They may not be receiving it the way that they would receive it when rates start going up and the market drops out from underneath them. Part of the reason why I wanted to bring you on is that I want people to understand that while you have as much cash as you have available and you’re raking it in, do something better with it.

My gift to everyone is to hear us because this gift is the gift that keeps giving. That’s why you call it infinite, it keeps giving and giving. It’s your own money that does this. However, I didn’t do a great job with mine. I was told to get the term life insurance. It gives me a little cash. I wanted to be able to have cash available in the downturns but it was cash that I withdrew like an ATM. It wasn’t reusable, which is what you talk about doing and help share with people. I’d like for you to walk us through in the easiest format. If somebody’s sitting with a client, you’re going to walk through what that client scenario might look like. When you’re reading this, think about you being that client. You need this as well. This will change your life but change the life of your clients and make you something different in the marketplace when we’re all such a commodity. I’m going to let you go for it.

MLM 282 | Truth About Money

Truth About Money: We’re taught to do things with our money that we would never do with things that money buys.

 

The way you said that is great. What I’m going to talk about is something that’s going to be simple. What I do and what I teach are simple. Here’s the problem, it’s the complete opposite of every single thing you’ve been taught your entire life about how money works. Although the concept is simple, it’s something that the banks and the wealthy have done for hundreds of years. This concept and how I’m going to explain it may seem foreign. You have to let go of some of the things you’ve been taught because a lot of the things you’ve been taught about money truly aren’t the truth. They’re not how money works.

Think about it. We’ve been taught to take our money and go work hard. That’s what we’ve been taught to do, go work hard, work long, put in that over time, and make a lot of money. There’s nothing wrong with that. What we’re told to do is we’re told to keep working hard. We’re never taught how to make our money work for us. We take our money that we make and what do we do? We give up control of that money. We go and deposit that money in the bank. What does the bank do? Did they take my $20 to the teller and say, “Mr. Naugle, we’re going to put this in your little box in the back until you’re ready to come back and take this?” Is that how banks operate? It’s not.

They take my money and they put that money in motion. They go out and they lend it out in those little glass cubicles. They’re moving money. That’s what we’re not taught to do. We’re taught to take our money and park our money and leave it to sit. Money that sits is like a fish in a stagnant pond. It slowly dies. You want the fish in the raging river. You want your money moving. I’m not saying there’s anything wrong with this but before we even take and put the money in the checking account, we’re taught to put this money into those fancy-dancy 401(k)s or employer-sponsored retirement plans. I take my $20 that I made that I’m going to contribute to the 401(k). I’m giving up control of the best, most valuable $20 I’ll ever have.

They keep it there for 30 years.

Let’s put it in the 401(k) where it sits and it rides the market. Over a long time, it goes up. What do we do? Fifty-nine and a half and we take that $20 back. What am I taking back? Number one, $20 is 30 years weaker. That has been taxed at the higher tax rates, 30 years from now.

Even when you’re making less money.

Unless somebody doesn’t think taxes are going up or they’re going to tax us on more stuff, then we got a bigger issue. We’re taught to do things with our money that we would never do with things that money buys. You’d never take your money to go buy a car and then before you get in it to drive it, you’ll be like, “I can’t drive that for 5, 10, 15 years. I got to treat that like I treat my money.” You and your spouse, your significant other, you buy your dream house and the seller hands the keys to you and you’re about to unlock the door and you look at your significant other and you say, “We can’t move in yet. We have to wait 5, 10, or 15 years.”

The value will go up.

We do things with money we would never do with things that money buys. What the wealthy do and what we’re talking about with BYOB or Be Your Own Banker is that $20 that we’re going to save, we’re going to leave in a checking account with the bank or we’re going to put it in a 401(k). What if all we had to do was change one thing with our money and that one thing is where our money goes first? What if that was all that it required? What if that’s all you had to do, change that one thing? Could you do that? I thought I could.

We’re told to pay ourselves first.

We don’t it.

What it also means is that when we pay ourselves first, we’ll put it in the savings account that’s attached to the checking account at the same bank.

Most people as they make more, spend more. Those checking and savings accounts never seem to amount to as much. Let’s go back to that one change and that’s where our money goes first. Let’s compare a checking or savings to this new private bank that we’re going to create. Your bank where you put your money in, let’s pretend that you found yourself a good bank and it was paying you 4%. I know that doesn’t exist but let’s pretend.

We've been taught to give all our money and give up control of it to someone else. Click To Tweet

That’s a natural number that we use.

You could deposit your money in that bank account and make 4% or you could change and take that money. Let’s pretend I’m holding $100. I take that $100 and I put it into my bank, the privatized bank. What is this privatized bank? It’s the same place where people of wealth, the Rockefellers, the Rothschilds, Ray Kroc, Walt Disney, Biden, and McCain. I can keep going on and on. It’s where they store their wealth. It’s not a bank at all. It is a giant mutually owned insurance company. How we deposit money in the insurance company is not by walking through the doors of the insurance company and saying, “Can you take my $100 and put it in your account? I might come back next week and get that out.” That’s not how they work. You got to find a way in. The Rockefellers did this by creating a banking system using a specially designed and engineered whole life insurance policy.

Let’s not confuse this with the whole life policy that you walk into the insurance store and buy or the whole life policy that you go to your advisor and they build for you. This is different. This is built the same way banks build them for a strategy called BOLI, Bank-Owned Life Insurance. When we design this whole life to work as a banking system, they look, feel, and perform differently than regular whole life. Remember, option A is your bank account at 4%. Option B is a specially designed and engineered whole life. We’re going to call it your private bank. If you put the money in that private bank, the insurance company is going to guarantee you 4%, contractually. Your bank, although they’re giving you 4% because we found a good bank, that bank can change that rate anytime. They can change that and the insurance company cannot.

Now I’m making 4% but the insurance company is mutually owned. It’s because of that, they pay dividends every year to policyholders. If we pay one company that we use for infinite banking, your dividend can be 2%. Now we’re at 4% guaranteed plus a non-guaranteed dividend of 2%. My money is now making 6%. I would take 6% over for any day. I would take a guarantee over a non-guarantee any day. Already, this private bank is sounding pretty good but “It’s a good stuff.”

The good part is let’s go back to your regular bank. Let’s say that in my regular bank I got $100. What I’m going to do is I need some money. I need to take $50 out of my regular bank. Somebody told me that it would be smart if I pay off my credit card and I owe one of my credit cards, Visa, $50. We’re going to take this $50 from my regular bank account. If I had $100 and I take out $50, how much money is the regular bank paying me interest on? Is it $100 or is it $50?

$50.

I’m holding the $50 in my hand. How can the bank pay me interest? It wouldn’t make any sense because you’ve been taught that there’s no way that can ever happen. Let’s go over to my bank, the private bank. I had $100 sitting there and I need $50 to pay off Visa. I go in and instead of taking a withdrawal, I take a loan. I have $100 and then when I take the $50 loan, what’s happening is I’m not taking my money. My $100 is sitting nice and cozy warm in my account earning 4% plus that dividend. The $50 loan came from the insurance company’s general account. The insurance company will give me a loan anytime. I don’t have to qualify. I don’t have to apply. I click a button and the money is in my account 36 hours later.

Now I’m holding $50 but I’m feeling uneasy because the insurance company called this a loan. I’m trying to pay off debt and not get into more debt. What if the insurance company said, “Chris, you don’t have to pay this $50 back, well never ask you for the $50 back?” At that point, all your mind should be like, “Okay. This is starting. Come on, Chris, this can’t be real.” You have to understand one more thing. The $50 loan that they gave me, remember, it’s collateralized by the $100 that I have in my account. That loan, all it is, is the insurance company giving me an advance of another promise that they made. That promise is called a death benefit. That contract, that specially designed whole life also has a death benefit that’s paid out the day I graduate. I don’t mean college or high school.

I love that you said that in your book, by the way.

I hate talking about that. I called it graduate. What the insurance company does is it takes my $50 I took out as a loan and they subtract it from my death benefit. They say, “We’re all good, Chris. If you don’t pay that $50 back, your beneficiary will receive $50 less.” I’m like, “Cool. Now I got $50 and I don’t even have to pay it back.” The insurance company will charge me interest on this $50 of 5% simple interest. If I’m holding $50, the insurance company is charging me 5%. Remember, I have $100 in the account.

It’s growing exponentially.

It’s never being interrupted. It’s growing at a rate of how much? 4% plus the dividend, which is 2%. It’s 6%. 6% minus 5%, I’m getting paid a percent gross for having $50 in my hand. That’s sweet. I’m great. Follow me with this. This is the most important part and this is how you should look at building wealth and how you should look at helping your clients that are doing mortgages. When you see this, this is the best way you can help them. I have $50. I’m going to pay off Visa. I take this $50 and I send it to Visa. I no longer owe Visa.

For years, I’ve been paying Visa $10 a month at a rate of 26.99%. That’s what my Visa charges me so everybody knows. I don’t owe Visa that $10 anymore and I’m not paying Visa 26.99% anymore because I paid them off. If I stopped right there, what I’m not doing is I’m not treating my money the same way as I would treat someone else’s bank money, am I? I was okay paying Visa $10 a month at that exorbitant rate. I was fine doing that.

Now that I paid Visa off with my bank and I took a loan from my bank, I should go one step further and I should recapture and recycle that $10 that I used to get the Visa. Why not deposit that $10 in my account? If I did that, what I’m doing is now I’m making money twice. Remember the 6% minus 5%, I’m making a 1% spread over here in my banking policy. By taking that $10 that I used to give to Visa and changing the name on the check to say, “Chris Naugle’s bank account or Chris Naugle’s banking policy.” What I did is I recaptured and recycled 26.99% that I used to give away.

If all of you can envision this, draw a big circle. My $100 in that specially-designed whole life is on the left. Visa was on the right. All I did is I moved $50 from my bank over to pay off Visa. On the bottom part of the circle, I draw another arrow back to my bank, which is the $10 a month I used to give to Visa. If you did that with Visa and then you went and you said, “That worked well. Now I have more money to pay off AMEX.” You do that with AMEX. You do that with Discover. You do that with Amazon cards. All of a sudden, you’re like, “All my credit cards are gone.” We then move on to your car note.

MLM 282 | Truth About Money

Truth About Money: Instead of making those extra payments, let’s change where the money goes first, and then we can make all the extra payments later.

 

That’s $600 a month.

Let’s not pay BMW $600 a month. Let’s change the name on the check and pay my bank $600 a month. If you did all of this and you did this with all the things you do in your life, you would build wealth faster than you probably could by taking excessive risk in the markets or going out there and working harder. It’s taking back all the money you’re used to giving away to everybody else. Now, you no longer have to give it away to everybody else. You control all of the money that you make and all of the money that you gave away. It’s a phenomenal concept. I’m only touching the surface. This is the pimple on the elephant’s butt that I’m giving you. There are many possibilities to this. I wanted your audience to understand that circle. All we’re doing is taking back the banking functions in our life that we have been taught to give away to somebody else. In other words, we’ve been taught to give all our money and give up control of it to someone else. All we’re doing is taking it back.

You explained it well. When my kids turned eighteen, I had already read The Latte Factor. Because I read, it didn’t mean I lived it every single day. I did a good job for a while. It’s a product of what we were part of. Of course, we’re big Dave Ramsey fans as well. They turned eighteen and I handed my son The Latte Factor. I handed my daughter, Smart Women Finished Rich, which is the women’s version of The Latte Factor, along with a $250 gift certificate from AMEX for them to start something or spend it. It’s their choice. Both of them saved it, which is good. They both have it in whatever they have it in. I can’t wait to tell them about this next level of putting their money where their mouth is, especially my daughter. She’s closing on one of her investment properties. They’re going to have a windfall of $200,000.

After reading this book, I’m chomping and going, “Don’t put it in the bank. Don’t give it to your investment advisor who’s going to put it in some 30-year thing. I don’t want that to happen, either.” I’m honored that you’re here. I hope that everyone is understanding what we’re talking about. This is a massive shift in your thinking. It can be a massive shift in your business as well. My whole point is the younger you are, the more you can amass or you can accumulate from this. The stories you tell in your book about how people are using their money to create wealth for themselves are incredible, especially Cynthia’s story.

That one is incredible. That is probably one of my favorite stories. There’s also the story of David.

I have a photographic memory.

That’s pretty good. I bet you I could get right to that story.

I probably could get to it, too. These stories are good. I’ve got two questions for you. We may have to answer them independently. One of the questions I have here is I’m listening to this podcast and I’m going, “This is cool. Can I get Chris? Can Chris be my person or do I have to go to someone locally? Is he licensed here or there? Do I have to teach my financial advisor and my insurance agent this stuff because I don’t want to teach them?” Give us some advice on how we can seek out people that understand this if it’s not you. We’ve got a little over 20,000, maybe 45,000 people who read my blog. We’ve got tons and tons of people, thousands of people. I know that you want it but you can’t be inundated. How do we do this from a local perspective so that we can send clients to our partners so that our partners send us more business?

We are licensed in every state. We have a team here that can handle it. Could we handle 40,000? No. We would try to handle anybody we can. People have access to me, 100%. There is a gateway to get me. That gateway is you have to watch the 90-minute video before I will speak to anybody. Once you get to that point, if we can’t handle the call, here would be the second thing and this is important. Your financial advisor or your insurance agent, I almost can guarantee you will not understand how this works. They might say they do but they probably don’t. What you’d want to do is seek out somebody in your area that is a specialist in this. There’s a certification, it’s called IBC practitioners. You could go on and google IBC Practitioners in my area and it’ll pull up Nelson Nash’s page. It will show you all the IBC practitioners in whatever area.

What does IBC stand for?

It stands for Infinite Banking Concept. That’s the whole process. Infinite Banking Concept is not the whole life. It’s not a product. It’s the process that I explained and how to use that. That would be my suggestion. Start with us if we can service anything you need. I’m not saying that selfishly because we want all the business. It’s not even about the business. It’s about I want more and more people to learn this because this will change people’s lives. If it’s not me helping you, some people can and will. Even if you’re in Canada, we have IBC practitioners in Canada that we work directly with. That’s not off-limits. You need to find somebody that practices this and knows this. Anybody can sell you a whole life but I promise you, it will not work anything like what I explained.

I started my career at New York Life, one of the largest insurance companies there is. In all years I was there, they never taught me about this. They knew what it was but they won’t teach it and here’s why. The advisors are the agents that do policies the way I’m explaining it, especially designed and engineered. They have to give up something that they don’t like to give up. That gives up is a large portion of their commission, up to 90% of their commission. Unless your financial advisor agrees to take 90% less income, you probably are going to have to find somebody else. For this to work, for you to have access to 60% to 90% of your cash, immediately, somebody had to give something up and that is the advisor or what we call ourselves IBC practitioners. We have to give up our commission so that one gives and the other gets it. It’s a novel idea. More people should learn about that.

Infinite Banking Concept is not the whole life. It's not a product. Click To Tweet

With the accumulation of the assets that you have, it’s not just the whole life where people dabble in and drop a little bit of money here, they’re actively involving themselves in growing this fund. As a result, your 10% exponential increases anyway. It’s a win-win for everybody.

The more people we help, the more we make and that’s the name of the game. I always need to reiterate this. Remember, this isn’t about the whole life. This isn’t about the machine.

It’s not about the actual insurance.

It’s about the process. It’s about moving the money and that’s where we’re good with The Money Multiplier. We’ve got an entire team. Picture a regular bank. You take a loan from the loan officer but then after the loan is done, that loan officer never looks at that again. It goes to a back office that tracks your loans, payments, interest. We created that back office for all of our clients. We don’t even charge them for it. You’ll never pay me or The Money Multiplier. We get paid that terrible commission from the insurance company but we do it for thousands of people. We created the whole mapping team to do all the banking for our clients. The coolest thing about that is it predicts everything out two years into the future. That’s the advantage of what we do that maybe somebody else doesn’t. There are several great IBC practitioners out there that I talk to weekly that can help you do this.

The distance here, I’m fine with it. I’m used to it. Some clients, they’re first-time homebuyers and they’re struggling, they may not understand this concept and need to sit down and talk to somebody and understand it. They might think, “This is some funky thing that’s out there.” It’s not. It’s completely accredited. You have securitization. You have licensing. You have certifications. There are all kinds of pieces behind here. You can’t offer this unless you’re a legit person. I want to make sure everybody understands that as well.

Realtors, if you want to send your clients to Chris, then send your clients to Chris. Get your loan officers involved in this so they understand it too because they’re seeing the application. You don’t know what they have for 401(k). The 25 401(k)s are $1,600 each because they keep moving their job and they’re not working. They’re not working for you because they’re not pulled into, at minimum, an IRA. It’s something that accumulates better than that. I’m a loan officer and I’m talking to a client. How and what is the best way for me to introduce this concept to them without going into your lane, without selling them out of it? It’s not even a sell but getting them afraid of this. What is the best way for a loan officer to introduce this?

We also have a lending division. I know a lot about this. The cool thing about a loan officer is you understand all the client’s debts. A lot of times, you’ll look at somebody and you’ll see their income and you look at their debts, you’re like, “You got a lot of debts going on there.” What if you had a discussion with them and you gave them some kind advice and said, “We got to get a handle on some of these debts. I’ve noticed that you’ve got all this money sitting in a bank account. You’ve got a bunch of money sitting in the old 401(k) equity or you have no money.”

It doesn’t matter either way. You can have that discussion with them about how they can pay off their debts in an efficient and guaranteed way using what we talked about, using this Infinite Banking Concept to pay these debts down. That’s a great way to introduce this. The other thing I’ve found is because traditional conventional banks are the number one purchasers of whole life in the world, they own more whole life than they do on the land and buildings combined, they understand these products and these vehicles. When somebody is qualifying for a mortgage, the personal financial statement usually goes, “Cash on hand at banks.” Number two, a lot of times it says, “Cash-value life insurance.”

The banks understand cash-value life insurance is almost as liquid as your bank accounts checking. That’s a great position to be. Your number two underneath cash on banks and down the rest of that. It puts your borrowers in a stronger position because now they’ve got more cash. It’s a psychologically forced savings for them. It’s because they’re making premium deposits monthly or annually, that money builds up and builds up. If they do what I said by recapturing it, that thing gets out of control and starts going up more and more. It’s like fine wine. The older it gets, the better it is.

It’s interesting because in the book, you have some charts and things like that. It’s interesting how it hits a certain place and blows up in a good way. In the book, you said it’s 3, 5, 10 years. Once it hits that one point, it’s out of control. No wonder the wealthy keep building wealth instead of having it be in someplace. We are going, “How do the rich get richer? We want to get richer.”

That’s an interesting observation. It’s year 3 or 5, depending on what plan and how much you’re putting in, that thing explodes. It doesn’t explode because it’s like a rocket that has a booster that goes off. It explodes because of something that Albert Einstein understood well. It’s called compound interest. Albert Einstein called it the eighth wonder of the world and the greatest thing in the financial universe. He said, “Those that understand earn it those that don’t, pay.” You got to look at yourself in the mirror and say, “Do I understand compound interest or am I paying everybody else compound interest?” Most people are paying. If you understood it, you’d understand why in year 3 or 5 this thing explodes. That $100 example, remember that $100 never left that account. Every year, it was growing 4% plus dividend on a higher amount each year. Of course, it explodes. It’s mathematics at work.

As lenders, we should all know the mathematics behind this. That’s what I love about it. We’ll talk about that in paying off your debt, putting $100 extra in your mortgage payment, and you’ll pay that down all the way. I’d rather put the $100 someplace else. If I needed it, I could grab it and have it. We would exponentially compound interest, be able to give you even more equity than if you had put $100 extra into the mortgage.

You’re grasping this.

I’ve done it for a long time. When we had the credit crisis and the big recession, I had someone call me, not my client, and say, “I’ve been paying an extra $100 on my mortgage for the last seven years and I lost my job. Don’t you think that they’d give me a little wiggle room because I paid that extra $100?” I’m like, “No. You, under no obligation to pay it whatsoever. Now you’re in a position where you’ve lost your job. You’ve already missed your payments. You’re threatened to go into foreclosure. Had you put that $100 in the bank, you would have money to be able to make your payments so that you can find a new job, and then you’d be fine.” What you’re suggesting is don’t put it in the bank. Put it over here and, exponentially, you would maybe even be able to pay off that mortgage in those seven years.

It goes back to what we were talking about earlier. We’re taught to work and we’re taught all these things to do with our money but we’ve never been taught to make our money work for us. We’re taught everything but that. Instead of making those extra payments, let’s change where the money goes first and then we can make all the extra payments later. Let’s have that money working for us. I hate it when money sits lazily on a couch at my house. I come home after a hard day of work and my money is lazy, sitting on the couch, eating my potato chips, and watching my TV. I marched over and I say, “It’s never going to happen again. I’ll make sure that you’re working every day for the rest of your life. You’re never getting breaks. You’re never going on vacation.” My money stands up and hugs me and it says, “Thank you. I’m getting bored sitting here.” Your money doesn’t want to sit. You’ve been conditioned to have that money sit on your couch. Put it to work.

There are many people I’m going to refer to you.

I have so much fun with this. I tried to make a topic that can be complex and fun.

This is my bailiwick. This is what I love doing as a lender, contemplating and pulling a holistic step. I wish that I had the knowledge then to have put this into play. I had thought I had half of it with what I invested in but I was missing this other half that has so much more power than that first half. if I were someone reading this, I’d be all over this to help my clients. This is a game-changer for not only yourself but also your clients. Walk yourself through it. Get this going for you first and then bring your clients through it. Once you’ve experienced it and seen how it works, bring your clients through it. Chris, is there an additional anything that you’d like to share with us in the time that we’ve been spending together?

To wrap up, let me tell you a quote that changed my life from Will Rogers. Will Rogers made a comment and a quote and says, “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 isn’t so.” Unfortunately, with this concept, the biggest problem I had is when I told people about it, I was excited. All of a sudden, they bashed at this. They said, “That’s a scam. That can’t be real. That sounds too good to be true.” When more and more people tell you that, you start questioning, “Who’s right here?” My answer to that is that Will Rogers quote.

Be careful who you surround yourself with. If you’re not surrounding yourself with people that are living the perfect day or a perfect life that you want to live, why are you surrounding yourself with them? For me, it was all of their family. You can put your family in timeout for a little bit if they don’t support your dreams and your goals. Do you know what always happens? Everybody knows this. When you get to your goals, they come back and they’re like, “I’m proud of you.” Where were you when I was saying I wanted to do this? Everybody knows I’m saying that. That statement or that quote rings true to that, “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 isn’t so.”

Further from there, the biggest problem in America is when people know and as readers do know, and you don’t put it in go.

I love that. You know and you don’t go. You’ve got to take that leap.

Be your own banker. Chris, this has been fantastic. Of course, I’ve had fun because this is something I love. I hope that our readers understand the gift that they’ve been handed. This is a pay it forward. Keep this blog to share with your family, to share with your friends, to share with everybody in your community. Let Chris explain it to you if that’s what you need to do. Chris, thank you so much for spending time with us. We appreciate it. You have to watch the 90-minute video, which I’ve already done. It’s a good video. Take that and you’ll learn more from that as well. Thank you so much, Chris, for being with us.

Thank you for your time. I appreciate it.

Everybody, thanks for taking time out of your day. I hope it makes a difference in your business and your practice and your life most importantly. We’ll catch you next time on Mortgage Lending Mastery.

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About Chris Naugle

MLM 282 | Truth About MoneyChris Naugle has dedicated his life to being America’s #1 Money Mentor. His success includes managing over 30 million dollars in assets in the financial services and advisory industry and tens of millions in real estate business, with over 200 transactions and an HGTV pilot show since 2014. In 20 years, Chris has built and owned 16 companies, with his businesses being featured in Forbes, ABC and HGTV.

As an innovator and visionary in wealth-building and real estate, he empowers entrepreneurs, business owners, and real estate investors with the knowledge of how money works. Innovating what it takes to break the chains of financial slavery, Chris is driven to deliver the financial knowledge that fuels lasting freedom. To date, he has spoken to and taught over ten thousand Americans.

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