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Highlights from this episode include:

  • Why life insurance can be useful even when you’re still alive (5:35)
  • The shocking effect the current crisis had on life insurance policies (9:15)
  • Why whole life is the best place to store “safe” cash (10:38)
  • Why the banks will turn their back on you when you need them most and how to prepare yourself (15:44)
  • Life insurance is basically worthless for this type of person (20:45)
  • Ask yourself this question to determine if life insurance is right for you (21:10)
  • These are the worst places to put your cash reserves (26:07)
Read Full Transcript

Do you hate the thought of working past 55 or 60? Do you hate not being able to live the life you deserve today? Do you hate not knowing what your financial future looks like? It's time to stop doing what you hate, here's your host, Mr. Harold Green.

(00:20): Hello. Hi everybody. This is Harold Green of Brightree financial and it is time to stop doing what you hate. How's everybody doing today? I'm doing great. I am so super stoked, so super excited to have my friend certified financial planner, Marvin Beulah's, O D Troy, Michigan. How are you doing Marvin? I'm doing great Harold. Thanks for the awesome introduction, man. It's so good to have you on the show guys. Marvin is like my brother from another mother and I mean that seriously. Every time I get a chance to hang out with him and his family in Detroit, I definitely take the opportunity to do so. When I started real quick, Marvin texts me of the nine. He said, Hey, did you get your package? And I was like, what package? And so I went downstairs, check the mail, and had a package in there, came home, opened it up, and it was a tee shirt from my man and that said Detroit surf shop.

(01:15): I'm like the Detroit surf shop. I, I just, I just had a laugh at that man. So you really made my day. You make my days a lot. And so I'm just so glad to call you my friend. And then a counter counterpart and all of this. So today's show is titled why life insurance sucks for some people. And so we're going to get into a little bit about the different types of life insurance, the different uses of life insurance. We're going to talk about it inside the rapid retire program. And if you guys could go to my website, www retired now, retire wild.com go to the rapid retire section of the program, scroll down through that, download the brochure, and then also look at the disclosures regarding the rapid retire program and investing. And so we're going to talk a little bit about how I use life insurance inside the rapid retire program.

(02:07): So Marvin, I wanna start off by talking about the two different mindsets that people have towards life insurance in general, whether it be term life insurance, whole life insurance, universal life insurance, index UL and all of that in between. So, you know, we may even go a little bit into the different types of life insurance as we go into the story. And so the conversation, but there's generally two mindsets that people have towards life insurance. Either it's a positive experience or it is a, it is a negative experience. So Marvin, I want you to talk to me a little bit about why you got into the financial planning world and what you've seen in regards to the negative and positive mindsets of life insurance. Well, thanks Harold. Thanks again for the cool intro. And you are my brother

(03:00): Too. I love you very much. And, and our relationship goes back all the way. We're coming up on close to 20 years. I want you to, I want you to think about that. Holy cow. Wow. We've both come a long way. You know, I remember when I started, I had just gotten out of a bank job. I'd been in the financial industry for a few years with a local regional bank AF, just getting out of college, trying to find my way in the world. And I got a job with a local bank and started as an assistant manager of a branch and moved up from there, kind of hopped from position to position in that bank looking for my home. Could never really find it. Nothing really sat well with me. And then my dear friend Tim called and said, I'm starting up a new division with my company and I think you're going to be the guy that's when you met me, Harold.

(03:54): That's when I decided to take that jump work with a friend. And he revolutionized my thinking of how money works. So I got into the industry in the traditional way. But what ended up happening was Tim brought me in and showed me the whole world of life insurance. And most people think about life insurance as something that you need. Just like car insurance, just like homeowners insurance. I have life insurance. Yeah. I guess I need that too because I'm a responsible adult and I, if I'm, if I didn't wake up this morning, I always say that because you know, if I don't wake up tomorrow, then it's bad Juju on me. Right? But if I didn't wake up this morning, I want to make sure that my wife, my husband, my kids, whoever is important to me is taken care of and the money that I should have earned is going to be given to them anyway.

(04:46): So people think of it that way. And they think of it as a bill, right? Right. They would think of it as something that they have to pay because they're being responsible and they're doing it as a gift for others. And that's still a positive thing, but it's somewhat of a negative connotation from the terms of it being a bill. You know, what do I get out of it? Well, I get that good feeling, but I'm not really getting anything back myself, you know? So you have some negative connotations with whole life and term life and universal life. And all the different types of life insurances that are out there. And that's what Tim taught me. He showed me that you can use life insurance as a living benefit as well. And so many people here all day. I know I'm preaching to the choir with you, but so many people don't understand well, life insurance can do for you while you're alive.

(05:42): Right. I'll tell a personal story. You know, I, when I, when I met you, I think it was back in 2000 and what is it, 2002, 2000, I don't know, what is it? 2003, probably three, three, somewhere around there, man. You're right. It's almost 20 years. And so I, I had found some sort of reading material on life insurance and I've worked at a life insurance company at the time and the home office of a life insurance company. And I had, I had got promoted as far as I could pretty much go inside that life insurance company. And they said, you know, the only way you're going to make it any further is to start your own company. And so at the same time I was looking at quitting. I had found this program, infinite banking is what it was called back then.

(06:23): And it was so interesting that, you know, I couldn't implement it with a company that I was with. So, you know, I quit, started my own company, flew up to Michigan and began to get training on this concept of infinite banking. And then the personal uses that come along with it. I mean, I've been a fan of life insurance since I was 25 years old. I think that's when I started my first policy 46 right now. So I've had, I have about 10 to 12 different life insurance policies, you know, on me, my wife, my kids. And so, and that's how my business guy started. It was a loan from a life insurance policy. I think it was a 30, $40,000 loan from a life insurance policy. And you know, we've, we've used it to pay for college and college and different things like that.

(07:09): But right now, you know, we're in the middle of this COVID 19 crisis. And so it looks like we're not really on the tail end of it, but things may be opening back up. But Marvin, I want you to talk about, had people had, I know, I know 2020 hindsight, whatever they say, you know, hindsight is 2020 whatever it is, but let's just imagine if if people had begin to put money into a dividend type thing, life insurance or any type of life insurance policy that that has value, what do you think people's mindset would be like today? How do you think people would be reacting? Interesting question, Harold, and I know the answer as far as my clients are concerned. Yup. Because my clients don't, just not, well not all of them I should say, but my clients don't just buy whole life insurance and nothing else.

(08:03): They have investments, they have market related investments, they have things out there that are subject to market loss and that's fine. Yup. My job as a certified financial planner is to do what's in the best interest of my client. So I educate them as best I can and I teach them the benefits of every financial tool that they have available to them. And I would make recommendations based on their preferences and their understanding of everything where they should be. But at the end of the day, Harold, it is up to them to make that decision. Now, the people that decided to have whole life insurance built, the way that we build it is appropriate for them are sitting in a very interesting place right now. None of the value, cash value and cash value for this conversation should be like cash in our pocket. None of the cash values of these policies eroded when all of this happened.

(09:08): So when COVID hit, when this whole economic slide happened and people lost their jobs and people started to be worried about what happened to a lot of these market investments, they went, they started to pull back. Yup. And in the grand scheme of things, it's, it's horrible. But at the same time it's expected that that can happen, right? So you should, any good financial planner is going to draw a pyramid and show you at the base of that financial pyramid, you should have things that aren't affected by markets that are there for you in the event of such emergencies so you can live so you can survive and seal. You could actually thrive. So my clients, what's happening right now, there are a lot of opportunities opening up. There are people who are selling things at a great discount and guess who's got the cash to buy him that, right Marvin?

(10:05): That's absolutely right. Yeah. And it's just these things that they're never designed to grow your wealth the way the market would when you park money in a desk drawer, here's my desk drug is slamming. When you park money in a desk drawer, do you expect that money to grow at all? Unless you put more in there, right? Nope. However you expect it to be there no matter what. That's right. That's what it's for. And that's what we've created our whole life is a place, the best desk drawer possible to store your safe cash, your opportunity cash when everything else falls out, you've got this cash, you know? That's amazing. You said that.

(10:49): Where does opportunity, and I've been real big on opportunity. I've been preaching on opportunity here. I, I just, I live, breathe, eat, sleep, drink, wake up. The word on my mind is opportunity. How can I take advantage of this opportunity that we are in right now? Although it's a crisis for some people and I, I, I feel for them. My heart goes out to them. At the same time I'm talking to people who are, who may have been in these types of situations where things are not okay and it's kind of like saying, Hey, all right, I know things are down right now, but look around for opportunity. Maybe it's a new job, maybe it's a move to a different state. Maybe you can buy that house that you've always wanted to buy and if you have opportunity, money, cash, reserve, sitting aside, it's a phenomenal thing.

(11:40): So I want to break something down real quick. Marvin, I want to talk about this pyramid, this financial pyramid, and I don't know if you have a copy of it in front of you, but at the bottom it talks about the different types of insurance like health insurance and so on and so forth to make sure your family's protected that way. Disability, property and casualty, and then it gets into the life insurance as far as cash reserves. But you know some people use their credit cards as cash reserves and their home equity line of credit has cash reserves. Can you talk to people real quick about why you don't want to put yourself in a position where you're relying on credit to be your cash reserves versus some other type of opportunity fund?

(12:22): Well Harold, there is a pretty well known quote out there and I believe it might even be my Mark Twain, and that quote is a banker is the type of fellow who will lend you his umbrella, but demand it back the moment that it starts to rain. Yeah. So what happens in those situations is that you are in a situation where you're relying on the banker for your emergencies. We saw it happen in 2008 and 2009 during the crises. That's right. Where we had some pretty awful stuff happen. We had people going down and, and failing in records because, because the stock market crashed because the real estate crash because everything crashed out. And we found out that some of the business owners who relied on their lines of credit and they never missed a payment and they were very good high credit score people and they even had cash in the bank.

(13:27): Yup. People would close out those credit lines. I had individuals whose lines of credit, their home equity lines of credit or canceled. Yup. Happened to me. No kidding. Happened to me man. Learn something new about my friend today. Yup. Bank of America never missed a payment. Cancel my home equity line of credit. Shut it down. Said I can't use it. Didn't miss a payment. Credit score was pretty good. And you know, I, I, I've, I've, I felt jaded because of that. So I'm going to tell you guys, sorry for cutting you off, Morgan. I'm going to tell you guys what I did.

(14:05): I took on a new line of credit on my house and you guys know what I did. I rated the equity in the house and you know, you know where I put it. I put it in my life insurance policy. I'm not advising you guys to do that, but because I got burned by my bank, right? I no longer have any trust in them whatsoever. I only use them because it's necessary, right? Run all my deposits through there and my bank. I mean, running a business and never, and never missing a payment from my business. Never missing, thankfully never missing a payment for my employees. And when I wanted to extend my business line of credit, they wanted me to bring in my entire financial plan, all my business strategies. And you know what? We compete with banks because banks have financial planners there as well.

(14:49): And I'm sitting here thinking, why I go show my secret sauce to the bank just because I want an extra $50,000 from Alana credit and you know I didn't need the money, but I wanted to go and get the line of credit at that time and this is after the crash and all of that credit crisis. When things recovered, I wanted to go and be prepared and just have an extended line of credit and they said, unless you bring this stuff in, Mr. Green, I know you've been a loyal customer for darn near 30 years, we're not going to give you this extra $50,000 unless you can show us what we want to see. And I said, you know what? Sorry, I'm not doing it, not doing it. And you know what? I was okay with that because I had a home equity line of credit and I took the cash out and I put it in my policy.

(15:28): I also had a business line of credit. And so I'm just appalled by what happens with Dick business when the people who have been supporting them for many, many years. When things go bad, they run away. And that's Sen. And so you're going to have to figure out how to take care of yourself, put money aside for yourself. So Marvin let's go back to talking about the, the, the negative mindset in regards to the conversation of having money in the stock market versus having money in life insurance policies, buying term and investing the rest. Talk to me a little bit about the fallacy that you see in human behavior when they talk about buying term and investing the rest. What do you normally see people do with the rest?

(16:16): That's interesting that you should mention that because I work with a gentleman who was very, very heavy into life insurance early on in his life. And his dad owned a firm, a brokerage firm, and his dad would give him clients, you know, and just kind of softballs here, you know, and then tell the client, Hey, put some money with my son and some, or put some life insurance together and show them basically how we do it. Hey, let's put some cash here. It's a safety bucket and you're going to do all this other stuff with all your other investments, but let's do this here. And they would do it. Well, he got to a point where some of these clients started to come to them for retirement. You know, they were in their sixties mid, late sixties it's time to retire. And he says, okay, let's say you know, here's your stuff.

(17:03): Here's this stuff that I did with ya and it's good. Still good, no problems. Now show me what else you have. And they said, well that's it. And he said, what are you talking about? He goes, all the investments, all the other stuff that you did, all the, all the business things, everything. And they're like, yeah, that's gone. It's just all gone. Wow. So all of the stuff that he did for them gave them their only lifeline. And I'm not saying that this is widespread. Okay? It, sometimes it happens, sometimes it doesn't. I'll give you the exact opposite example, but first, let me finish that thought. The thing that these people didn't want to do, but they did it as a favor to their friend for their son or his son ended up saving them, right? Right. I ended up saving them and giving them guaranteed income on a tax advantage basis for life.

(17:52): Right? And so that's that. Even though they didn't have a great idea and they didn't really want to do it, they did it anyway and it paid off right? Now, let me give you a, an exact opposite example, and it's my dear uncle, and I'm not gonna, I'm not going to name him, but you know he, he's done very, very well. He's worth millions and millions of dollars and I try to help him out. I try to, Hey, why don't you just take some of it and put it over here? You know, why don't you lock it up? Why don't you, and he's like, well, is it going to give me 10% or not? I'm like, no, this is never going to get you 10% and it's never going to get you to a negative 1% either. Okay, why don't you lock some of it up? He goes, cause I don't care.

(18:41): He says, if I lose $5 million, I've got, I've got more. I've got more than enough to live out my life. Wow. I found out Harold by, by talking with my uncle, that what we do with a specific type of life insurance, even though it's wonderful, even though every dollar that you put in fulfills multiple needs of most clients, it's still not for everybody. Right? It's not for everybody. So let's talk about who might not it be for who does life insurance, quote unquote, suck for. Talk to me about those people real quick. Marvin. Oh geez. Well my uncle, he didn't love them. Right. It's so funny because I can see the advantages myself, but just like you know, and just like everybody knows at the end of the day, it's the individual with the information that that individual has presented to them. They have to weigh it against their own individual beliefs, concerns, wants, needs, desires, and they have to make that decision.

(19:45): That's why people like you and I, we have to lay it out as best we can for them. We have to show them what it is, what it can do, the benefits, the negatives really of of whatever we do. We have to let them make their decision and be okay with that. Right? It really is. Okay, but what life insurance would suck for a person is the person that sees things as they're laid out and decides that it's not for them. Right. My dear uncle, he's again worth millions, doesn't need insurance, doesn't need the life insurance aspect, even though it goes tax advantaged to his estate or as beneficiaries or or whatnot. It's got a tax advantage. Everybody doesn't care, right? He doesn't care about tax advantages. So it would suck for somebody who doesn't care about tax advantages, right? It would suck for somebody who has so much money and a lifestyle where they'll never spend it less. Let's, let's, let's

(20:48): Compare and contrast that because there are some really wealthy people that do have life insurance and they have tons and tons and tons and tons and tons of life insurance. And so I ask my clients this question, okay, if you had $10 million to leave behind, how much of it do you want going to your kids? And how much of it do you want going to the IRS? And you know what? They tell me, Marvin, every single time, man, I want 100% of my money going to my kids. I want zero going to the IRS. And I said, but wait a minute. You're going to be debt, okay? And who's going to be left behind to make sure your kids get 100% of everything you leave behind to them? And that the IRS gets as little as possible. And they look at me and they say, you Harold, you're going to make sure that happens.

(21:39): And I'm like, Whoa, Whoa, Whoa, Whoa. I'm not your life insurance policy. I'm your financial advisor, fiduciary advisor, but I'm not your life insurance policy. And so I said, well, you know, if you're going to be passing on tons and tons of money behind it, if you're working with me, the goal of working with me is for you to die wealthy or with as much as possible versus nine broken. They said, well, do you want to die broke if you're gonna die broke the you don't need life insurance? And they say, well, you know, why would I want to have life insurance to leave behind to my kids? And I said, well, you want to make sure you get the tax free death benefit. It's 100% tax free. It goes to your kids. And so if we're growing your wealth, unless you make a hundred to 200% over the next, you know, 10 to 15 years in your portfolios and God forbid you dies, you both die at the same time and now, your kids are gonna inherit all this money and guess what?

(22:26): They're going to inherit this money at their earned income tax rate. Correct me if I'm wrong, Marvin, but not the deceased person's tax rate because this money is still consider earned income and taxes on earned income are extremely high. So talk to me real quick, real quick about your experiences and having this conversation about people in regards to leaving behind the type of policies that we build that are permanent, that are lasting and the fallacy and thinking that they'll have enough in their investment accounts. And so they, you know, the term, when it runs out, it's not going to be a problem. Talk. Talk to me about that real quick and talk to my listeners about that real quick.

(23:09): Thanks Harold. You know, it's been said that some people plan for three generations and some people plan for Saturday night. Yup. And it's everywhere in between that yeah. Depends on, and everybody's time horizon and everybody's needs, wants, desires. I've worked with clients that absolutely want to craft a legacy, something was given to them and they want to pass it forward and make it as strong as possible so their kids and their grandkids and those kids, kids can have something. And so that's how they're thinking. They're thinking that the really, really wealthy people, the Rick stream, high net worth people that I've been working with. Yep. Those people will plan like that. They'll figure out a way to establish some type of concrete system that's going to project their wealth in future generations. And what happens is we lose sight of it sometimes. Even if you don't want to do that.

(24:12): Even if you say, I've got no kids, I've got no grandkids. I'm not married, I'm just rich and, and I, I want to spend it all on burn. I want to burn it out. I want to go into the into the grave. And sign that last check and make it bounce, you know? Yep. You, you, you've talked with people like this too and that's fine. That's, that's a desire that some people have. We train for it. Yup. But what if they're wrong? What if they do run out right? What if, what if three checks prior to that? They're bouncing, right, and they're still alive. You have to make sure if you're going into that approach, honestly, life insurance, the way that we design it and, and things that have guarantees and guaranteed increases in value and guaranteed accessibility and tax advantages are going to be that person's friend. Right. You know, inside of the rapid retire program, we talk about,

(25:13): You know, having the cash reserves and one of the vehicles I do use is dividend paying whole life insurance. And the reason why I use dividend paying whole life insurance because it's stable, it's steady, the, the cash value is guaranteed to grow every single year. It's not based on, it's not interest sensitive. It's not based on what happens in the market. And I use companies that have paid dividends for over a hundred years. And these companies are very, very, very stable. And so I use it as part of the rapid retire program because it satisfies one of my core beliefs. I believe that cash reserves ought to be adequate. They ought to be accessible, they have to be after tax and they have to always be there. So that part of your money can't be in the stock market. You cannot be putting cash reserves and the stock market, you should not be putting cash reserves and your home equity line of credit, your 401k should not be cash reserves.

(26:13): And so you need to build out the type of plans for your financial system and it's all going to have to be based on your long term financial plan and what your needs are. And so if you, if you haven't built a long term financial plan and you know, you want to make sure life insurance is for you or maybe it's not for you, I'll tell you, you guys download my game changer form. Get in contact with me and I'm going to get in contact with you guys to help you stop doing what you hate. So Marvin, we're, we're coming up on our close here and so if you could just talk to my listeners real quick, give them a parting word and regards to, you know, just the whole mindset that they probably should have, the type of eye they should have when looking at different types of life insurance.

(27:06): Just real quick for me, I guess the best thing I could say, Harold, is don't dismiss something you know nothing about. Amen, bro. That's the only thing I could really leave you with. You know, especially in this environment that we're in right now. If you're looking for a lifeboat, if you're looking for something to prevent any type of financial losses from truly affecting your life, wouldn't you want all options available to you? And right at the very last thing I want to say, it's one Godzilla's foot comes down. It's always on the guy who was too afraid to move. That's right. So don't be afraid to move, right? The squirrel that sits in the middle of the road usually gets ran over, I guess, sir. Sorry, but folks, there you have it from my friend Marvin Beulah, certified financial planner. Get in contact with me. If you have any questions, go to the website, retire now, retire wild.com or give me a phone call at (808) 521-4401 and I will help you stop doing what you hate. Until next time, everybody, thanks again, Marvin. Here we go. One, two, three. Let's get it.

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