102: Ian King's IBC Blueprint: A Real Estate Investor's Perspective

102 - Ian King

[00:00:00] Hello, everyone. I'm John Montoya, and I'm John Perrings. We're authorized Infinite Banking Practitioners and hosts of the Strategic Whole Life Podcast.

John Perrings: Episode number 102. Welcome to Strategic Whole Life. Today, we have a special guest, one of, one of our clients, Ian King, who is a young go getter out there in Minneapolis, Minnesota area. Where he is a tech employee, a real estate investor and business owner and avid IBC practitioner. And so we wanted to have him on today, to talk about his experiences and what he's seeing out there in the marketplace from a real estate and business aspect. And talk about how he's using. The Infinite Banking Concept in his life. Ian King, welcome to the show. Really glad to have you on. Could you, we can just kick things off and maybe you could tell us a little bit about yourself, your background, how you got into IBC, all [00:01:00] those good things.

Ian King: Yeah, absolutely. So first of all, I, I appreciate you guys having me on. I've been a long time listener, so it's, it's very cool to actually be here, talking with you both on the podcast. So as you mentioned, I live in the Twin Cities area of Minnesota. So I'm just, a suburb here outside of Minneapolis, and from a little bit of background.

So I've worked in the tech sector pretty much my entire professional life. so I kind of work in enterprise tech for those listening that are familiar with that. but in addition to that, I've always had really an entrepreneurial side. So I've always been really interested in investing, personal finance, business, things like that.

And, really since, you It's the entire time that I've been working professionally, I've always done things on the side. one of those things is the real estate space, so I've been buying rentals. pretty much since I graduated, I think I bought my first rental maybe four or five months out of college and have been steadily buying since, I've sold a few, which I'm sure we'll get into later, but, I think at the peak I had somewhere around 30 rentals or so that, [00:02:00] both in Minnesota and then Michigan as well, that, were just full rentals, single family things all the way up to some small multifamily stuff.

nothing huge compared to some folks out there, but, it was definitely a lot for me while still working a full time job. And then, over the past few years, I've actually started and purchased a couple of businesses as well, so I've got a commercial cleaning company that really focuses in cleaning, medical, school, manufacturing, office, pretty much anything you can think of on the commercial side, we do from a commercial cleaning perspective.

And then I also own a transportation business that I've purchased within the last six months or so as well. so both of those businesses, I've got partners in and the, the partners in those businesses are the full time operators and CEOs. but it's been really cool for me to get into business ownership from that side as well, both starting and then, learning all there is to learn about acquiring businesses and all the stuff that comes along navigating that as well.

So that's been a bit of my journey and focus, on the [00:03:00] professional side here.

John Perrings: Maybe we could just start a little bit with the IBC journey side of things. how did you hear about IBC? How'd you get involved in, what was it about IBC that piqued your interest enough to, really start looking into things and doing your research?

Ian King: Yeah. So I think the first time I ever heard about anything around insurance was not even the words IBC, just around whole life insurance. I met with a financial advisor probably back right when I was right out of college. And one of the things that they really pushed on me was, Hey, you should be putting money into this insurance thing.

At the time I had no idea what it was. I just knew that, at the time I was maybe making 3, 000 a month after taxes and they wanted me to put 2000 in. And I thought, there's no way I can do this. And. I forgot about it and I, yeah, I really pushed that thinking aside. And I, to be frank, I didn't think about it again for probably another five years from there.

and I, was, [00:04:00] to be honest, I just had a gross feeling. It was a slimy push. It was, something that. We spent the entire, meeting that I was in there talking about and, it was, I just didn't walk away with a good feeling. So I really pushed it out of sight, out of mind for a few years.

and then, one thing about me is I'm a, big learner. I'm a nerd for podcasts and books and things like that. And I'm always listening to something around personal finance or investing in businesses. And, as I was listening to, one of the real estate podcasts out there and even some of the business buying podcasts out there, I heard some folks that I really admired in this space.

Talking about IBC and leveraging cash value and kind of doing that to buy, whether it be rental properties or even buy businesses and things like that. And so from there, I really went on a kind of an education binge and I found every book and podcast and, everything that I could find.

And, that's when I happened to find you guys and I think I listened to every single episode that you had at the time. In a, maybe a [00:05:00] three or four day period, so I was just listening nonstop, trying to get all the information I could, and from there, I, I bought Nelson's book, so I bought Becoming Your Own Banker, and then I bought, Building Your Warehouse of Wealth, read both of those.

to be honest, they were way over my head. I think the first time I read Becoming Your Own Banker, I Got way too lost in the illustrations and I was trying to pencil out the math and try to learn everything that, that I could. And, I'm somebody who really likes to act. So I think after reading through the book and listening to the podcast, I reached out to you guys website, got in touch with John Perrings and, we were on a call and I think within maybe two weeks I had my first policy in place and, have been running with IBC from there.

I think to maybe go back to your question around what really intrigued me, I'll say that it was, A, having, control and access to my own capital, but, the other thing was just to have some reliability. A lot of things I touched on in the beginning. Our spaces that have some volatility, they, [00:06:00] they're not super reliable areas at all times.

I certainly have months in my businesses where I'm way up and then we're way down. I have real estate deals that have gone really well, and I've had real estate deals where, I've lost a Tens of thousands of dollars. And so I really liked being able to have something that had, a guaranteed side to it where I knew if I were to look out five, 10, 15 years later, and I was diligent about paying a premium and, making sure that as I take loans, I'm paying them back and I'm being an honest banker that, I would be in a strong financial position.

and it was really a mindset shift for me to build my foundation first. I think I've always jumped into a lot of things without, maybe earlier than I should have, or without maybe being properly capitalized, and I've gotten burned by that a few times. And so I think I really saw the power in IBC and just, to be honest, really being able to build out my foundation.

It was something that was really important to me.

John Montoya: I think it's interesting that, you had a whole life policy that you started and, for your own reasons, you said, you [00:07:00] didn't really pay attention to it or look at it for maybe another four or five years. In a way, you really had the, have had the benefit of hindsight, even though you may not have looked upon it that way.

I'm curious, once, once you did read, Nelson's book and you listened to the podcast, what were your feelings going back to this whole life policy that you had started five years ago? How did your, impression of what you did change with what you learned?

Ian King: Sure. And I may make one correction there, John. So I actually did not start it when,

John Montoya: Oh, you did not start. Okay.

Ian King: No. So I walked out of that meeting and thought, ah, this is not for me. And unfortunately, it ruined, I think, the notion of insurance for me for a few years from there. And I really pushed it out of my head.

But I will say when I read the book, I thought, man, I wish I would have done this five years earlier. Even if I had done whatever the policy was that they had put in front of me at that time, I think it still would have had benefits that at the time I just couldn't understand. [00:08:00] And so I think reading the book.

Really just clicked for me in terms of, Oh, I think this is what the guy was trying to say. Now they weren't affiliated with the Nelson Nash Institute in any way. they were a big, financial planning and insurance house that was just trying to push insurance products. But I think really being able to tie it back and the book really just opened up my eyes to see wow, I really wish I would have understood this earlier and I wish I would have acted on it.

But, but I didn't have that initial policy. the first one I did was through you guys a few years ago.

John Montoya: Okay. Okay. Got it. interesting, that, your regret is you wish you would have started five years ago because the most common, regret we hear from people is, they, say, we wish we would have started 20 years ago. you're definitely, in better position.

and the fact that you have gotten started and you have gone down the rabbit hole, it's tremendous and it, only gets better. As we age, [00:09:00] right? Because whole life policies, they lock in your age and, you start to capitalize and with your entrepreneurial, mindset, you need to have capital allocated someplace.

maybe, it would be helpful to listeners to, hear from you how the capitalization of your whole life policy has helped you, in your businesses and, in real estate investing.

Ian King: Yeah. and I'll be transparent. So I'm, I just entered my third year of the first policy that, that you guys helped me put in place. And to date, I actually have not taken any policy loans. So I have been really focused on the capitalization phase. I think, you guys talk a lot about that in your podcast and something I really took to heart, which was not rushing in to leverage the money just because it's sitting there and really being patient to build up.

My foundation, really build my system and put it in place and I'll say I took your advice and I did do a little 200 policy loan just to [00:10:00] get through the scaries of making sure that I could take the loan and it's real and I knew how to use it. and but I've really been focusing on that capitalization phase and so much so in fact that I've actually started selling off a number of my rental properties.

And as I really got into this, one of the things that I was really evaluating was, and it's something I know is talked about, but I don't know, at least in the real estate circles, I hang out and not something that's a huge metric, which is return on equity. I was looking at some of these houses that I had bought and I had, 50, 60, 100, 000 worth of equity on, and yet I'm making 20 in cash flow on them because of, whether the financing or just, hey, stuff breaks and stuff comes up and, the cash flow wasn't crazy. And so I've been looking at, I've been selling those. I'm in the process of doing so right now. I've sold a few and I've got, a few more on the market and I'm going to continue to do this exercise.

And what I'm doing with that money is I'm taking it, I'm buying additional policies, and I'm using it to buy PUA as well and really building out and capitalizing that system. To answer the first part of your question, I can [00:11:00] go back and as I start to look at other opportunities, whether it be private lending, whether it be investing in syndications, buying or flipping homes of my own, buying more businesses, I'm doing that with a well structured foundation that I know that, can help propel me and again, be there to build on and make smart investments going forward.

So maybe not as, as sexy of an answer, but again, I've really just been focusing on the capitalization and really trying to not. Rush into investments and really build that foundation first, and then, go back and really make investments from there.

John Montoya: Yeah, I think you're doing it right. And, in this case, I want to say boring is, is doing it right because, you'll never be in a worse position by having access to cash and having access to the cash value in your policies that just puts you in a better position longterm. and, a takeaway for me in how I'm hearing you, [00:12:00] redirecting money.

You, you're choosing to redirect money from one asset class property, real estate property, and you're redirecting that money into another asset class, which is also property. And I think what people sometimes, don't understand is that when you have a guaranteed cash value contract, that is.

property, much like real estate property. It's a different asset class. but this is an asset class that comes with a contractual guarantee that it's going to increase in value every single year for the rest of your life. and it's great to own real estate, but I think it's, even greater to have Whole life contracts, because that's another form of property that comes with a ton of benefits that, maybe for, speaking to, real estate investors out there who quite aren't up to par with, their life insurance knowledge to [00:13:00] where you are at today, this is really important for those people to better understand life insurance as an asset, as property.

So I think what you're doing, I think it's tremendous and I think you're doing it the right way.

Ian King: and you bring up a couple of interesting points there too, John. And I think one of the big things for me, to be honest, as I was really looking at this is, I had to overcome a little bit of an ego thing when it came to this. I always loved, and I even said it at the beginning of this podcast, I hate when I say it, oh, I own whatever, 20 doors, 30 doors, 100 doors, whatever it is that somebody may out there may own.

And so I think as I was really starting and debating on going down this route, part of it was me overcoming that to say, I always said there's this ego thing about owning so many doors, but really what I'm focused on is, Building my foundation, building my wealth, having access to cash, and being able to have cash flow.

And it's cool to say you own 30 real estate doors, but if those 30 doors are producing less cash, or aren't giving you access to capital when you need them, where's the benefit? [00:14:00] and I figured, hey, I can have more benefit. I can have the same equity that I have putting 'em into a life insurance contract, which is growing for me, as you mentioned, which is, In most years paying a dividend and is continuing and then that I can borrow and use to put into other assets that are paying me cash while that cash is still growing, uninterrupted in my life insurance contract. And so I think once I was able to make that mental switch and get over some of the vanity or the ego piece that comes, I think that was the biggest thing I had to overcome when I was really debating this.

Because as I run the math and I look at the numbers. It's a no brainer to do it the way that I'm doing it now. It just took a little bit of, really being able to get out of my own way to do it.

John Montoya: Yeah, said.

John Perrings: I would like to dig into that a little bit more. so we've mentioned building the foundation a couple of times now. And one of my favorite quotes from Montoya is you can't build a house by starting with the roof. So you gotta start with the foundation. And you've mentioned that a couple of times, Ian, and you also, you said a couple of things [00:15:00] that, One, you got burned a couple times by not having the foundation set up.

Would you mind expanding on anything?

Ian King: Yeah, I can give you a couple examples. as I was building my portfolio in real estate, I did it without always a lot of access to cash. And so I've borrowed private money. I've borrowed, from hard money. I've borrowed friends and family money. I've used lines of credit off houses.

I've used lines of credit off stock investments. And so just off those examples alone, I had one time where I was borrowing. Money from a stock portfolio and I was borrowing maybe 60% of the value of that portfolio and the market tanked and I got a margin call, and all of a sudden I owed $10,000 into the account and I had maybe $8,000 in cash at the time.

And so I was scrambling trying to figure out how I would pay this. saying, Oh, shoot, I'm now I got to pay this. I got to figure out then how I'm going to be able to keep this alive. And if the market continues to go down, the broker's you're going to get another call tomorrow [00:16:00] and the next week and whatever, until the market rebounds and you get to a place where, it meets your lending threshold.

And that's happened to me a number of different times in situations like this, I did a similar thing where, we borrowed hard money and at least all my projects do, I'm sure there are better real estate investors and flippers out there than I, but whenever I do a project, I think we're going to be done in six months and it takes 10 months.

and, after that six month, My interest rate shot up from, I was paying 10 percent on hard money. I went up to 14%. I had to pay all these fees to keep the money going. And, the hard money lender was, knocking on our door every day, making sure that, everything was in line, getting updates and everything like that, as he should be.

But just, it was another, hoop I had to jump through and just, again, something that. was a really difficult place to be in because we didn't have access to that capital. And I was leveraging the ways of financing in front of me, which are great ways when you don't have anything else, but they're not always super reliable ways.

And they're, ways that, where you're really in second or third position sometimes, and those [00:17:00] things can change should the market shift or the environment shift. maybe one more example I'll give you just a quick one, and then we can move on if you want is, I have a commercial loan.

So I've got a small apartment building right now that I'm in the process of selling and we were on a commercial loan. It was a 15 year fixed rate, which in my book, I thought that meant it was fixed for 15 years. about a year and a half ago, as rates really spiked up, the bank came back and had all these loopholes in their contract and basically said, Hey, you set up this operating account, you're not using it like we thought you would, so we're going to increase your rate.

And I went back, and we went back and forth, and I said, Hey, I'm using it. I just didn't know that you had to be putting a certain amount of money through it each month. And they said, yeah, we decided that, you need to have certain thresholds in order to meet. And so just like that, they increased my rate.

My payment went up a thousand bucks a month. And this was a property where, you know, that pretty much ate into my entire profit. And again, it was just another example for me of, I'm really not in control. I'm at the mercy of a lot of these factors that I have no [00:18:00] personal, influence on, and, unfortunately, in those situations, I just had to roll with the punches and, take whatever it was in terms of those outcomes.

I definitely have seen a lot of examples of it, and I know those are maybe just a couple that come to mind right away.

John Perrings: I think this is huge and I really, we talk to a lot of real estate investors and a lot of times, people, especially real estate investors, they have a hard time getting their head around, you Why they would want to put money into a whole life insurance policy when they could be putting that money, towards their next, acquisition, real estate acquisition.

And so a few things I'm hearing from you from the real world, are access to capital And the fact that the way you finance a, the way you finance a real estate deal in the conventional way, you give up a lot of [00:19:00] control. Number one, I hear stories all the time where there are always surprises somewhere in the lending agreement.

like things that they weren't expecting, powers that can be, Implemented, to, call a loan or increase the rate or, stop the loan or stop the line of credit based on different stages. we've talked about a lot of those stories, but they're always third hand coming from our mouths.

So it's interesting to hear, your, direct experience, with some of these things and how do you feel You know, as you mentioned, you've been focused on the capitalization phase. how do you think IBC will help with some of this? Do you think you'll completely stop using third party finance or bank finance or, hard money finance?

or [00:20:00] do you think, what is it about IBC that you think is going to help with some of these? situations.

Ian King: Yeah. I certainly would love to get to a place where The need to use a third party finance company is no longer there. I know that, obviously, especially if I look at kind of the scale that I had been buying, it would be, take quite a while to do that. But I really see myself, to be honest, starting to play a little bit of a different role.

I think one thing that IBC has changed my mindset on a bit is the power of cash flow versus net worth. And I think, honestly, with IBC, you get both. A lot of the net worth, in my mind, I'm not using up until my goal is to have it there for my wife and my future family. and I get that with IBC. I also get the access to cash, and I can leverage that to use, to buy more things and invest in more things.

It gives me cash flow. But I can also, use IBC as a retirement plan down the road, where I can take, multiple different ways to really take cash flow and take income from IBC down the road, which I know will be there for [00:21:00] me. but in terms of real estate specifically, John, I think I'm shifting my mindset a bit to really look at to say, hey, instead of maybe buying a house and leveraging IBC, I'm really almost looking at it from like a private lending and a syndication perspective where I make these investments, whether they be whatever the number may be and I get a consistent return.

So if I look at private lenders, when I borrow private money, I see the statement at the end of the deal. 50 percent of the time, the private lender makes more money than I did. So that had me thinking, maybe I'm doing something wrong. I'm taking all the risk. I'm the one signing the guarantees. We're doing all the work.

At the end of the day, we're making the same amount of money. and then on the syndication side, really looking at it at a way to say, Hey, I still have my, I'm leveraging, IBC. I'm making an investment in a syndicator. I'm getting cashflow from that syndication. And at the end, I'm getting a payoff for my initial investment.

And then some, obviously if the syndication goes well, all the while I'm continuing to service that loan. my, my IBC policy is compounding and continuing to grow and pay dividends in the [00:22:00] background. and so again, I think IBC, more than anything, has really just changed my mindset around things.

And again, it's really had me have more of a focus around cash flow, access to cash, less on net worth and that phantom number that I was so focused on, throughout my 20s and even up until a few years ago.

John Perrings: And so just speaking of syndications real quick, are, what are, do you see any risks with syndications? so you, it sounds like you're seeing an improvement in the process there where it's more focused on cashflow. You don't have to, sign away all these guarantees, but what are the, risks, if any, that you see with syndication type deals?

Ian King: Yeah, so obviously, I think from my perspective, and I'll, again, be transparent, I have not invested in a syndication before, but I certainly have done my homework on them and met with a number of syndicators, so when I'm ready, I, know what I'm getting into, but I think, obviously, the operator is really the big thing.

when you're looking at a syndication, you're really vetting the operator. You want to make sure that operator has a track record, that [00:23:00] operator is reliable, that operator can, knows how to buy, reposition and manage assets, in that particular area that you're looking to buy.

And so I think obviously the big risk is the operator and, the big risk is, hey, the money that you put aside, if you invest 50, 000 into a syndication deal, that money is not guaranteed to come back to you. But to take it back to IBC, one thing I, that gives me a little bit more peace with that is I know that, hey, that 50, 000.

In theory is still growing and compounding inside of my life insurance contract. And so if I lose the 50, 000, yes, I'm going to be an honest banker and I'm going to pay back that 50, 000, but I know that I'm not losing the velocity on that money, even with an investment like that. And so I think, again, John, that the big risk would really be around the operator itself, and again, making sure that you vet the operator and that you know who you're investing with is somebody that you can trust and that, again, is going to be there and be a reliable, solid operator for the asset that they're purchasing.

John Perrings: And then. Out of this, you said one other thing that, [00:24:00] that, hit me and I never thought of it this way. So this is pretty awesome. you mentioned you're selling some of your real estate assets and you're. You said something to the effect of your, you have the same equity moving from real estate to whole life.

Can you talk a little bit more about that? Because I liked how you said that.

Ian King: Yeah. So I think, when I look at a piece of property and I use simple numbers here, if I have a hundred thousand dollar property that I have 50, 000 worth of equity in, Essentially, my net worth goes up 50 percent or sorry, it's 50, 000. And so what I'm looking at doing is saying, Hey, instead of hanging onto it in that asset where it's a very hard to access, if I actually needed it, I would either have to refinance, take a line of credit or move to sell it, which as I'm going through the sales process, I can tell you it's taken longer than I thought it would.

And had I needed that money and been in a position where I was in a crunch to get access to that cash, I would have been in, I would have been out of luck. [00:25:00] And so I'm really looking at that to say, hey, as I move this money, what I want to do is I want to take it and put it into a vehicle where A, I have access to it and B, where I know it's growing and I know

I'm also able to take that money and leverage it into things that to be honest will pay me a better cash flow than I'm getting in those deals. Now that's not every real estate deal. I will say there are deals I have where the cash flow is such in the equity position is such that I'm still hanging on to those and I see them as a good investment.

as a good asset to still hang on to, but a lot of those things where my return on equity, as I mentioned, is really low, that's where I'm looking at getting that equity out and I'm moving it into, a life insurance contract or buying PUA, et cetera, to really have better access and better use of that money.

And I know an objection I hear when I tell my friends, this is, wow, I can't believe you're going to pay those taxes. And I have maybe an unpopular opinion here, which is if I'm making money and I'm getting a gain, I'm okay to pay the taxes. It's money that I didn't have. And so I'm okay to pay [00:26:00] the taxes, and when I run the math and I look at the long term use of putting that money inside of a whole life insurance contract versus leaving it in, in a B class home, which a lot of these are, that's going up maybe 2 percent a year and I'm making minimal cash flow on, it's a no brainer for me that the money is better used and I have better uses for it down the road in my insurance contract.

John Perrings: that's a great explanation. And, we talk a lot about in the, in this industry, different asset classes and the control you have over those different asset classes and, real estate is very popular right now. And one of the things that I think people miss is when you put money into a real estate The money, we, call it having the money locked up in the walls of the house.

And you just hit the nail on the head there where you said, if you had needed access to that capital, [00:27:00] it took you longer to get to it than what you anticipated. And I think a big problem out there is, people look at, real estate equity. They look at, home equity lines of credit, different ways to source capital.

And They really are not putting enough emphasis on the fact that they're not in control of whether or not they can actually get to that capital when they need it. lines of credit can be called, lines of credit can be canceled. it takes longer to sell a property than what you think it might.

you're, really speaking the language of, what we talk about all the time. no, no big surprise there, but it's, just the control that you have, comparing different sources of capital, there really aren't, there really aren't too many that, that stack up [00:28:00] to whole life insurance from a liquidity and control, aspect.

Ian King: And John, I think I'm still very much a proponent as I know you guys both are that real estate is a great place to put your money and is a great place to build wealth. I just really looked at the mechanics of the order of operations. When should I put that money in and where should that money go first before it goes into real estate?

and you've got a great illustration that really sold me on it in terms of really seeing and running the math on how that would actually work. And I think it's really that mindset shift for folks that, we're not saying that real estate is not a great place to put your money. I am. I agree.

made and lost money in real estate, and real estate has been a huge foundation for the wealth that I've built to this point, but I think, wow, had I been able to put it in my insurance contracts first and then leverage it from there, I can only think of how much farther along I would be, and so I think it's really just that order of operations and getting people to understand that.

versus saying, hey, I want to buy that property right now, have one use for that [00:29:00] money, and then have to start over again, save my way up to my next down payment, buy the next property, and start all over again. It's just a perpetual cycle where you're saving down to zero, saving down to zero, versus taking a step and saying, hey, I'm just putting one step in between those actions, and that one step can make a huge difference, especially when you look out over the longevity of, 5, years.

John Perrings: And, you mentioned liquidity. So another thing to think about is a lot of times real estate investors, in their mind, they're always thinking of, okay, I've got to put money in whole life insurance or I could buy this asset. And they're looking at it as either or. So number one, life insurance is the and asset.

So you can put it in life insurance first and then use it to buy real estate. So that's the first thing, which you just, have been alluding to. But the other thing is, would you agree that, real estate investors need to, really just be sitting on a significant amount of [00:30:00] cash in order to just run their real estate investment businesses?

Ian King: Yeah, I think access to cash in real estate is huge and people that don't think other people that don't think so, in my opinion, haven't been around real estate long enough to know because it's not a matter of if it's when you're going to have to replace a roof, you're going to have a furnace go out, you're going to have a tenant destroy your home, or all the above.

And so having access to cash is always there. And I think regardless of what endeavor you do, I can speak for my businesses as well. TheFifthEdition. com We always have an unplanned expense, people think those unplanned expenses come around once in a while. But I think the more stuff you do and the farther you've been in those games and investing, those things happen constantly.

And so being prepared and being able to weather those storms is oftentimes the difference of what people, what keeps people in business and what puts people out of business.

John Perrings: That's amazing. And, we had an episode 100, we had a couple of business owners on, to, celebrate our 100th episode. I was saving you, Ian, for this one, so that's why you didn't get invited to that [00:31:00] one. The, but they both mentioned several, instances where, their whole life insurance saved their bacon.

And, what's the rate of return on, keeping your business alive. the, and, Just going back to the sitting on cash, I just wanted to point out to the listeners, especially the real estate investor listeners who are exploring this and they're having trouble, justifying paying a life insurance premium when they could be, putting their money into the next real estate investment.

It doesn't have to be that. What about just the cash that you absolutely need to have on hand? What if you just made that your whole life insurance policy? And then you kept all your cashflow, for all your real estate, you don't have to interrupt the real estate investment process.

Although, Ian alluded to a talk that I have, I can show you the math that if you do interrupt the process, you'll long term, you'll come out way ahead. But if you don't want to do it, you don't have to, but what if you just kept. [00:32:00] The cash that you need instead of spending that cash, you never interrupt the compounding process on just that cash that you need to have on hand to run your, real estate investment operation.

John Montoya: Yeah, pretty powerful. And I, think the main thing I'm hearing you say, Ian, is that, you really need to prioritize savings, before investing. and too many people, they get out over their skis and, they Just jump right to investing right away. And to get back to, building the foundation before the roof.

that's exactly it right there. And like we've said on the podcast over and over again, you'll never be in a worse position by having access to cash and, you're, you're. Given examples that hopefully listeners can relate to. I think they can. I think we all can, to be honest, because life is challenging.

And how many times, have we all wished, [00:33:00] if we didn't have access to cash that we did have access to cash and under our own terms where we can control it and control our own destiny. And the. just getting back to fundamentals, you start with savings and, you'll never be in a worse position by having access to cash in a whole life policy.

it's, kind of one on one stuff.

Ian King: And, I think that's a great point. And I think one thing too, for people to think about that are listening is, Putting your money in a whole life insurance contract is doing something. I think, when I was younger, and I have this problem today, I still am the same way today.

I always feel like I need to be doing something, whether it's buying the next house or the next business or buying the next stock or whatever the case may be. And, I have a lot of shiny object syndrome as I know a lot of folks out there do. but I think one thing that I've really has helped me with that is, You know, putting money into a whole life insurance policy is doing something, you are bettering yourself, you're putting that money into a place where you know you're going to get guaranteed growth, where you can access it, [00:34:00] and if you can set aside and know that, hey, you're not missing out, this is still doing something, you're very much putting yourself in a better position, and I think when I look out 10 15 years from now, I'm going to really thank myself that I spent the time to do this and that I put my money into it.

Inside of my whole life insurance contracts first, and again, and that I didn't get over, over eager or get rush things and not have the patience to, to really be methodical about how I'm going to go about this approach. And again, I would just say that to anybody listening that putting your money in a whole life insurance contract is doing something.

and again, I think that has been something that's really helped me get over some of that shiny object syndrome. And I'll tell you now that I have. Money in my insurance contracts and I've got a foundation that's really starting to be built. I'm thinking twice about investment opportunities.

I had a house that was brought to me the other day and I passed on it. Five years ago, I would have invested in that house all day long. But now I think twice about, the uses of my capital and really where I want to put it. And that [00:35:00] extra step is something that I never had that, I never really had that visual before.

I never had that, eye on things. And I'm so eager to jump into things. And this has really given me a second place to say, okay, actually, let me look, let me make sure that this is really the best use of my capital. And this is an investment I want to make.

John Montoya: I love that. I was actually going to ask you, has owning a whole life policy made you more discernible in how you choose your investments? And yeah, you beat me to the punch. That was perfect.

John Perrings: Yeah, that's great. And that's actually what you just said is so much more important just from a general principle and personal finance Having a little bit of an, you called it an extra step or a beat in time to think about, what we're actually spending our money on. And so much of what we do in these, in this day and age is unconscious.

And unfortunately the spending is what Typically becomes an unconscious, [00:36:00] decision rather than saving. And so I think, what we try to talk about here is let's figure out a, a system or a process to make the savings unconscious. and you also mentioned that as well, where once you have your whole life insurance policy in place, like it, it helps with our FOMO or the shiny object syndrome where, we make this commitment.

You got to take a little bit. There, there's a little bit of a leap of faith, but not even much because it's all just guarantees. So it's okay, I guess I, I guess I'll, I guess I'll go ahead and take this leap of faith into 100 percent guarantee. but you have to do it because of the shiny object syndrome and FOMO.

It feels like a leap of faith, but once you have it in place. Every single one of my, I shouldn't say every single one of my clients, because I have had some clients that get over their skis. They don't listen to what I'm saying. They borrow all their money and then something happens and they can't, they can't keep, paying a premium.

[00:37:00] That's an unfortunate thing, but the ones that, I had to really talk to about the strategy that we're doing. I have one, who's one of my best friends from that we grew up together and he was just super into Bitcoin. He was super into putting his money in his brokerage account, cause everything was going up and up at that point.

And I really had to. Talking, almost convince him to say, Hey, why don't you just put some of that over here into life insurance? And so he bought a whole life insurance policy with me and he called me, I don't know the other day. He's Hey, I just really want to thank you. I feel like a responsible adult when I, just knowing that I have this in place and knowing that on autopilot, I'm putting it somewhere.

That's not part of the shiny object thing. It's it's forcing me to just have one little area of my life. That's like responsible, going into safety as opposed to just putting money out there into the unknown and hoping for the [00:38:00] best. Man, that, that really, that hit the nail on the head, Ian. What's, as far as people looking at infinite banking right now, maybe let's talk about it from two ways because you do both. You're an investor and business owner, but you're also a W2 employee. So we talked a lot about the real estate. Why don't we wrap that up?

Component up and just say what, and we're wrapping up the episode as well. what would you say to someone evaluating infinite banking? maybe they're a real estate investor and they're just really, they're like, man, I don't know, should I, is this something that makes sense? what would you say to that type of person right now?

Ian King: Yeah. So I think the first thing is, You got to dive in and learn. I think that was the biggest thing for me, and I'm a firm believer that the learning has to come from the individual, as great as is listening to the two of you and consuming content from other peers in your guys [00:39:00] world, you have to be dedicated to learning and understanding it, and really, it's on you to learn that, and then I think from there, it's listening to the right sources.

I'll tell you one thing that I do for every piece of content that I consume is I, whoever the author is or the published poster of the LinkedIn post or the YouTube video or whatever, I go to the Nelson National Institute website, I look at the practitioner finder, and I make sure that who I'm listening to is somebody that's been through and is a part of the NNI.

I think there's so much information and IBC seems to be a huge buzzword that John, I know you and I have talked about it before that, just in terms of there's so much noise out there for it, good, bad, everything in between. But I think, really. vetting and making sure that you're listening to the right sources.

But then for me, the big thing was acting. I didn't know everything. I still, no means do I know a lot. I'm learning every single day. There's, and I don't know that I'll ever be done learning. But I think when I felt like I had a good enough grasp to feel confident about what I was doing, [00:40:00] I went all in and I said, okay, I'm going to do this.

when I worked, John with you and you helped me set up a policy that was, a good policy for me at that time in my life and was, something that, definitely was. Saving a good chunk of money and, but it wasn't something that made me uncomfortable or that I was scared about, if I regret this, I'm really going to be in a bad position.

And so I think that, between doing the research and then. Acting. I think those are really two big things that, I'm happy that I was able to do pretty quickly. And I think for anybody getting into this, that being undecided is something I think that is really challenging and there's always going to be questions that you're going to have.

But I think as you get into it and you really start to learn, there's always going to be things you're going to pick up. You're going to learn more. You're going to feel more confident about your knowledge. and every podcast I've ever listened to around IBC says they wish they would have started earlier and I have to echo those sentiments in terms of, getting started.

John Montoya: Do you have, friends your age, maybe that you're invested with or just [00:41:00] people that, you know, your age that have asked you about whole life and what you're doing, and, if so, what are some hangups that they have that maybe you have to try to dispel?

Ian King: Yeah. So I certainly, I talk about it a lot. I think my friends and my wife probably hate how much I talk about it, but I do really bring it up a lot. I think,

John Perrings: You'll be in the business soon enough. That's how it starts.

Ian King: know who I'm coming to for a job, But, it's, John, to answer your question, it certainly is something that I talk a lot about in the circles that I'm in, and I've, really tried to, push gently on friends and business partners and others.

And I think, I hear a couple of hangups all the time. One is, I can only put in a few, maybe 500 a month, and I don't know if it makes sense to start with that. And, I can tell you that it does. getting started is the, important thing, and I think whether your first policy is 500 a month or 50, 000 a month or anything in between, I don't [00:42:00] think there's such a thing as too small.

I think getting started and being familiar with the mechanics is really the key thing. So I think that, that is one hang up I always hear. and the other one that I hear, and I have a challenge Explaining this, I'm not as technically sound as you two, but is why would I ever pay interest to borrow my own money?

And I've tried to explain that and really, offer some insight on really what you're doing there. But I think that is something that I've found that people really have a hard time getting over, which is they can't fathom paying money, paying interest to borrow their own money. even though I know that's not technically what's happening in their mind, that's capital they've set aside that they have and paying interest on it is something that doesn't make sense when they're like, I can just borrow from my Chase bank account.

And not have to pay any interest, although losing the compounding on all that, and again, everything in that goes along with that, goes out the window, but I would say those are really two of the big objections that they've had. I think one of them I've been able to talk through and help people understand, but the other one I think is a challenge, and even with [00:43:00] explanations I've given, that seems to be a tough pill for people to swallow, paying interest to borrow that money.

John Perrings: That's pretty good. I haven't actually heard that one in a while. Should we just tackle it real quick?

John Montoya: Yeah, I think we should. Why

John Perrings: the, the, short answer is you're not borrowing your own money. what you're doing is you're, creating a present value and a life insurance policy that's known as the cash value.

And what you have is a guaranteed loan provision Collateralized by that cash value to borrow the insurance company's money. So it is 100 percent not your own money that you're borrowing the money and the cash value that's created in the life insurance policy just acts as collateral. And it's really the death benefit at the end of the day, especially with whole life that ends up being the collateral, that.

allows you a guaranteed source of capital that the insurance company lends [00:44:00] you. And it comes from the insurance company's general fund. It does not come from your policy. so that's probably the, unless Montoya has, anything to add to that. I think that's probably the shortest way to answer that is that you're not.

So that's, that's what's going on there.

John Montoya: two ways, that I just thought of how I would answer that, for the real estate investors out there, when you go to refinance or take a loan from a property, what is the collateral for that loan? it's the property, right? And who determines the value? an appraiser generally does.

If you're selling it to the market value of whatever someone, the next person's willing to buy it. But, you have property values that are the underlying collateral for that loan, and there's a cost for that capital that you're going to pay to a bank. but that value is, it's going to [00:45:00] fluctuate.

And when you borrow from a policy. What is the collateral to your cash value? And that's the present value that Perrings was talking about. but it's also tied to a future death benefit that's guaranteed. you're good for that loan no matter what. There's, understanding that, what is the collateral, and knowing the difference between, asset classes that you may be utilizing, but for the, people who just have, any, objection to paying interest, I would point this out that when, when you pay cash for something, you're giving up the ability To earn interest on that money forever.

It's gone, that you're constantly having to start over from zero. Let's say you save 20, 000 or 50, 000, whatever that number is. And then you use that money [00:46:00] someplace else that money is, it's one use and then that's it. And then you're having to rebuild that savings account all over again.

And the thing that people miss when they do this is that not only the, uninterrupted. Compounding of that money, had you had it in a whole life policy, but you also not only have to replace that principle, but people forget that they also need to, replace the interest that they otherwise would have earned on that money.

And then the compounding interest on top of that, and people never make that connection. And I, think this. The second way of explaining it is probably more powerful because people completely don't think about the second order effects of paying cash for something. And then the third or third order effect, which is the compounding interest that you're also going to lose by never, having access to that money again, and the interest on interest.

[00:47:00] And here all along, you've had, you have this whole life policy giving you complete, access. To, to the cash values, and always growing uninterrupted, even while that money is being used someplace else. it's why I call it a financial unicorn. it just gives you so much, clarity and, if your vision is clear about how you're managing your money, the decisions are quite easy.

and. that, that's, something that I think, for most people, just think about it, spend a little bit more time thinking about how, money compounds over the long run and does it behoove you to, manage your money better? And if so, what is a better way? if you're listening to the show, I think you're, taking strides to coming to the same conclusion that I think the three of us already have.

John Perrings: Nice. Yeah. Nelson, just to sum it up with, [00:48:00] from the book, you finance everything you buy, you either pay interest to someone else when you use their money, or you give up interest you could have earned when you use your own. And, that's, that's, that's a core, principle of The Infinite Banking Concept.

And it's really, it's not, The it's not specific to The Infinite Banking Concept. the concept of economic value added, it comes from that. So this is like basic corporate finance, economic value added. So it's not a, it's not an unknown thing or a new thing that, only we know about, but it is a fairly unknown concept in the world of personal finance because there's so much information out there. Misinformation out there about staying out of debt and, never paying interest or minimizing the interest. And it's the wealthiest people in the world, they absolutely use debt [00:49:00] as a tool. So you've just got to look at the right way to, to use debt. and if you're. If you're looking at it that way, The Infinite Banking Concept and having this guaranteed loan provision that, Montoya said, the underlying collateral is guaranteed, it doesn't get much safer than that in terms of using debt in a, correct way. this has been a great talk guys. we'll, we'll wrap up the episode here and Ian, just want to thank you very much for coming on and sharing some of your insights and how you've been using IBC in the real world and some of the real world things that you're coming up against. Because as we know, money is not necessarily just the math that goes along with it.

There's, things that happen in real life that change the way that the math works. this has been, I think, hopefully super eye opening to, some of the [00:50:00] listeners out there. If any of this is resonating with you guys out there, head over to strategicwholelife. com and you can schedule a free 30 minute consultation with Montoya and myself.

And if you're one of the type of. People like I was that just likes to keep learning as much as you can before you actually, talk to someone. We have an online course, IBC Mastery, just for you. And you can get that right at the top of the homepage of strategicwholelife. com. All right, guys. Thanks again.

John Montoya: Thank you. Thank you, John.

John Perrings: See you next time.