Not Your Average Financial Podcast™

Think different about your money, your economy and your future. Be curious. Be stable. Be sane.

Episode 35: Structuring Insurance: It’s All About How You Think

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In this episode, we ask:

  • What are the biases with insurance?
  • What misunderstandings exist?
  • What’s the truth?
  • Why does anyone have a bias against anything?
  • Where do we hear information?
  • Is this information in line with reality?
  • What about my family member’s experience?
  • How many mutual funds are out there?
  • Why do people have completely different experiences with the same vehicle?
  • How can life insurance help you while you’re alive?
  • How is a whole life insurance policy more than just a death benefit?
  • Why is old fashioned whole life a terrible place to save money?
  • Is a model T car a terrible way to drive across the country?
  • Is an airplane an effective way to get to the grocery store?
  • Is this an investment?
  • Should insurance compete with a mutual fund?
  • How will you feel when the market crashes to the depths of the ocean?
  • When do you want your money growing the fastest?
  • When do you want your money in a competitive position?
  • Why is whole life insurance so expensive?
  • Why is term life insurance so cheap?
  • Is term really cheaper?
  • What’s a better deal?
  • When would you want to buy term?
  • Why is term insurance designed to become too expensive?
  • Have you seen your term premium quadruple yet?
  • What do you have to show for a dropped term policy?
  • Do you want to buy term?
  • How are the benefits in whole life stronger than term?
  • What guarantees do you have with whole life insurance?
  • What guarantees do you have with term life insurance?
  • How many term policies actually ever pay a claim?
  • What’s the difference between buying a house and renting?
  • Which one will provide the greatest value to you and your value?
  • How is this unlike most whole life insurance that most people have heard about?
  • How much of a pay cut do advisors take?
  • How quickly can you use the cash value?
  • What are the benefits?
  • Would you like tax free access to cash?
  • Would you like guaranteed growth every year?
  • Would you like the ability to leave your family more than you could ever save?
  • Do you need to finance a big purchase?
  • Why aren’t insurance companies letting everyone know about this?
  • Why are there entire cable channels dedicated to Wall Street?
  • Why aren’t we hearing a whole lot about this?
  • Where did the term buy term and invest the difference come from?
  • How are high net worth clients and leaders allocating their assets?
  • What’s too good to be true?
  • Is whole life premium payments only for the affluent?
  • What if someone can’t afford the premium?
  • What about getting “locked” into a premium payment?
  • What happens if I miss a premium payment on a whole life insurance policy?
  • What flexibility exists?
  • Who decides how much goes into premium?
  • What happens if I lose my income temporarily?
  • Is life insurance a safe place to put money?
  • Is a life insurance policy safer than the banks?
  • Are life insurance companies FDIC insured?
  • What is FDIC insurance?
  • What safeguards are on the insurance companies?
  • What third parties are involved?
  • What happens if a life insurance company goes down?
  • What about AIG in 2008?
  • What happened to the life insurance subsidiary of AIG?
  • Does the FDIC have enough money to cover all of the nation’s banks?
  • What percentage of our money is backed up by FDIC?
  • In 2008, how much did the FDIC ask for in bailout money?
  • Who pays for the bailout?
  • If the FDIC raises limits to 1 million, what happens?
  • Are banks legally required to keep safe assets?
  • How much life insurance do the banks have to purchase themselves?
  • What is BOLI?
  • What did Nelson Nash say?
  • What happens when you change the way you see things?

Episode 34: Shock and Awe: The Firsts

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In this episode, we ask:

  • Do you have a question on every single page of a new policy?
  • How many pages are in your contract?
  • What is the guaranteed values table on a life insurance contract?
  • Wait, so you’re saying there are zero dollars in cash value the first five years?!
  • What’s going on here?
  • Why the shock?
  • What’s the whole story?
  • What’s a paid up additions rider?
  • How does that affect the data table?
  • What parts of the design are in the paragraphs? What parts of the design are in the guaranteed tables?
  • What information in the contract describes the actual performance?
  • Are you in awe?
  • What do we know about the track record of each company?
  • How does the company’s track record affect the data table?
  • Has the company already declared their dividend?
  • What’s the worst case scenario?
  • Why is there a difference in an illustration and a contract’s data table?
  • What is it like when you pay your first premium?
  • How do you manage your cash flow adjustment?
  • What does behavioral economist Richard Thaler say about forced savings?
  • How is a premium payment a source of savings vs. a bill?
  • What is it like to login and see your cash value online?
  • What does it mean to see expenses come out in year one on a life insurance policy?
  • Am I better off doing something else?
  • Do you have the patience for a long term strategy?
  • What is the cost?
  • When does the cost come out?
  • What does Nelson Nash say about thinking long range?
  • Why is there a cost?
  • What does the cost buy?
  • What happens on Day 1 of a policy?
  • When does your death benefit go into effect?
  • How much is your death benefit?
  • What happens as you continuously check on your cash value?
  • Will your policy ever decline in value?
  • Which is more affordable – a life insurance policy or an account with a 1% assets under management fee (like a ETFs, a mutual fund, 401(k) or IRA)?
  • When do you want your money growing the fastest?
  • When are you ever not going to need this cash?
  • What are the contractual guarantees?
  • What are you in awe of?
  • What is it like to request a policy loan?
  • How much do you want? Where do you want the insurance company to send it?
  • Is taking a Bank on Yourself life insurance policy loan easy?
  • Are there any limits on taking a policy loan?
  • Why is 80-90% (or higher) of the cash value available as collateral for a policy loan?
  • Why shouldn’t you drain your checking account down to the last penny?
  • When should you set up a loan repayment plan?
  • Who decides what the payment amount is going to be?
  • Who can help you decide how to structure the loan payback?
  • What’s the APR on the loan payback?
  • Who decides what the timeline on that payment will be?
  • Can I have my loan repayment coupled with the premium payment, so it’s one draft a month?
  • Do you have to know all of the technical details?
  • What happens the first year?
  • Does your annual statement look like it was written in hieroglyphs?
  • What do the numbers behind the numbers mean?
  • Are you feeling angry / frustrated / jipped?
  • Who can help you navigate your annual report?
  • What about when there is a market correction or when the market takes a nose dive? How are policy holders affected?
  • Why is the annual statement full of jargon?
  • What is it like when you get that first dividend?
  • What happens when the benefits outweigh the cost?
  • Do you have the patience to see money grow over time?
  • Do you have a question? Schedule a quick call with us here.
  • Do you feel relieved?
  • What happens when you get your first dividend?
  • What happens when your cash value exceeds what you put in?
  • How huge are the rewards?

Episode 33: Bank On Yourself Loans & Getting Out of Debt

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In this episode, we ask:

  • Shouldn’t we pay down our debt first before doing anything else with our money?
  • How did Pamela Yellen’s husband “make a profit” on his heart surgery?
  • How can you reduce or eliminate your debt and increase your savings at the same time?
  • How can policy loans help you get out debt?
  • What is the first thing you should do to get financial freedom?
  • How can money keep growing as if you didn’t take a loan?
  • Should I wait until I’m debt free to start a Bank On Yourself designed policy?
  • What’s the snowball method?
  • What is the bomb cyclone method?
  • How does lost savings affect long term financial goals?
  • Are you missing out on retirement income?
  • How does this affect a mortgage timeline?
  • How can you eliminate student loans?
  • How can you supercharge your debt payoff?
  • See the Tale of Two Brothers Part 1
  • See the Tale of Two Brothers Part 2
  • What happens when your available loan value equals the loan balance?
  • What is better than paying cash to pay off a house?
  • What happens when you pay a policy loan back?
  • How can you pay off debt without losing the growth on your money?
  • How can use this strategy for student loans?
  • How can use this for financing a car?
  • How can use this for mortgage acceleration?
  • How can you get out of credit card debt?
  • How can you start saving?
  • How many applications are there with this strategy?
  • How can you get out of the debt without starting “at ground zero”?
  • What do you get after you’re debt free?
  • How do you keep the loan company happy?
  • In what ways can you utilize the snowball method on steroids?

Episode 32: How do Bank on Yourself Policy Loans Work?

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In this episode, we ask:

  • What is a life insurance policy loan?
  • If I’m trying to be debt free, why go back into debt with an insurance company?
  • Are life insurance loans just like a credit card or a mortgage?
  • Isn’t a life insurance loan just like a personal loan?
  • How does your cash value collateral continuing growing, even when you have a policy loan outstanding?
  • How is this different from a HELOC?
  • Is your house guaranteed to go up in value?
  • What about contractual guarantees with a life insurance policy loan?
  • What are the limits with a life insurance policy loan?
  • Could the loans lapse the policy?
  • What is the best kind of investment to a life insurance company?
  • Can you be “underwater” in your life insurance policy loan?
  • What are the requirements for this type of life insurance policy to work in a Bank on Yourself design?
    • Is it whole life insurance?
    • Is it a non-direct recognition loan?
    • Is it flexible, so you keep it for your entire life?
    • Are you repaying your loans?
    • Are you working with a knowledgeable, authorized advisor?
  • Do you have trauma from a previous bad experience?
  • Why do so many advisors not know how to design these properly?
  • Does your existing whole life insurance policy penalize you when you take policy loans?
  • Does your advisor know what they’re doing? Do they frantically google in front of you?
  • Why did the Titanic sink?
  • Do you know an advisor who has a skillful knowledge of Life Insurance contracts?
  • Of what red flags should you be aware?
  • With non-direct recognition policy loan, how is the dividend credited on a whole life policy?
  • If you don’t have a non-direct recognition policy loan, what happens?
  • When you take a policy loan, where does the money come from?
    • See The Bank On Yourself Revolution by Pamela Yellen, page 256
  • What is the collateral for that loan?
  • When do life insurance companies get a profit?
  • How do you benefit from the interest you paid on the loan?
  • If the insurance company’s yield is better than their worst case scenario, what happens to your dividends?
  • Who’s allergic to paying interest?
  • What are some financing strategies when buying a car?
  • What interest does an insurance company charge on the loan?
  • Who are the owners of the insurance company?
  • Do you love that you are charged loan interest?
  • What is simple interest, compounded annually in arrears?
  • When is 5% not always 5%?
  • Why would you willingly pay extra for something?
  • What type of interest would you like on a savings account? Simple? Compound?
  • How can you calculate the growth you receive?
  • Is the method of banking on yourself better or worse than paying cash for things?
  • Don’t you wish more people knew about this?
  • How can you make a profit on buying a car?
  • How can you use a life insurance policy with non-direct recognition policy loans for income in retirement?
  • What’s the problem with the direct recognition policy loan design for income in retirement?
  • What design features have a tremendous amount of impact on how long money will last in retirement?
  • How do banks use money in more ways than one (at the same time)?
  • What does the fine print in your contract say?
  • “Ignore what banks tell you to do with money, and instead, watch what they do with their own money.” – John McCarthy
  • How much money do banks keep in life insurance contracts?
  • What’s a tier 1 asset?
  • How can you change your family tree?

 

 

Episode 31: How Do Bank Loans Work?

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In this episode, we ask:

  • What is debt?
  • What are some of the common judgement calls about debt?
  • What are some religious thoughts around debt?
  • What did Solomon say about power?
  • What is the year of Jubilee?
  • Does debt lead to intergenerational slavery?
  • Are you more likely to be in debt if your parents are / were in debt?
  • Is debt evil?
  • Can debt cause trouble?
  • How can you severely limit your options?
  • Should we avoid all debt? Is it a black and white scenario?
  • What kind of debts do typical Americans carry?
  • How many people know that the first credit card wasn’t issued until 1951? How did people survive before 1951?
  • What is the average credit card balance and percentage?
  • Why is credit card debt so nasty?
  • By how much has Student Loan debt surpassed Credit Card debt?
  • How many people are supposed to be paying 100% in their annual salary to student loan debt?
  • What are some of the gotchas with student loan debt?
  • What are the implications for parents who have cosigned loans on their child’s debt?
  • Can you bankrupt student loans?
  • What about mortgage debt?
  • What is a good rule of thumb for housing costs?
  • Why can’t people save?
  • Why can’t people afford things?
  • What’s in the fine print?
  • Who can provide a second set of eyes for you, when you encounter fine print?
  • What about car loans?
  • Is vehicle debt going up or down?
  • How long does it take to pay these loans off?
  • What is the average savings rate?
  • What about vacations?
  • Why don’t most financial planners have a plan for life’s cashflow?
  • Why do you have to pay a bunch of penalties and taxes to access money?
  • Why do most financial advisors suggest that you eat rice and beans?
  • Why do financial advisors say to “not touch your money”?
  • Why are we forced into this crazy cycle where everyone is benefitting from your money but you?
  • How much cash will flow through your accounts in your life?
  • How will you work with your cash flow?
  • Can you avoid buying stuff?
  • Can you find a way to have uninterrupted compound growth and still be able to afford the stuff of life?
  • What is the bank doing with your money?
  • How do banks do more than one thing at a time with a dollar?
  • What is fractional reserve banking?
  • How do banks find the money for loans?
  • How do the banks get so wealthy?
  • How do you learn from the banks to harness your personal cash flow?

 

Episode 30: Will You Pay Tax on the Seed or the Harvest?

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In this episode, we ask:

  • What is the “Rich People’s Roth?”
  • Are there required minimum distributions (RMDs) on ROTH IRAs?
  • What other elements make up a ROTH IRA?
  • What accounts have contribution limits?
  • What accounts can you contribute to tax free and take distributions tax free?
  • What’s smaller? The seed or the harvest?
  • Would you like to defer your taxes?
  • Would you like to pay your taxes now?
  • Are taxes going up?
  • How can you get access to a death benefit while you’re still alive?
  • How do Long Term Care policies work?
  • Do you need Long Term Care?
  • What is the average cost of a nursing home today?
  • Do you know how much your taxes are going to be this year?
  • Will you get a refund? What happens to the refund?
  • Can you use a Bank On Yourself policy for taxes?
  • What about Self Employed individuals?
  • Would you rather prefer a dollar today or a dollar tomorrow?
  • Do you have to prove to the IRS that that’s your money?
  • How will your bigger paycheck affect your taxes?
  • Have you gone to the IRS website to see what your estimated taxes will be?
  • Are you giving the IRS a no interest loan?
  • Are you proud when you receive a tax refund?

Episode 29: Tax Advantages with Bank on Yourself

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In this episode, we ask:

  • Is there someone at the IRS who you’re particularly fond of?
  • Do you have more than one beneficiary on your IRA or 401(k)?
  • What did we mention over and over in our last episodes?
  • Are taxes likely to go UP or DOWN in 2025?
  • What changes can we anticipate?
  • What are the tax advantages from Bank on Yourself?
    • How are distributions taxed from Bank on Yourself policies?
  • Would you like Tax Free Retirement Distributions and Withdrawals?
  • Would you like to take the anxiety and guesswork out of retirement?
  • Do I have to hold on to the S&P with white knuckles?
  • What are the two key unknowns in the government-sponsored qualified plans?
  • How do Bank on Yourself policies grow?
  • How are Bank on Yourself policies like ROTH plans?
  • How do dividends affect policy performance?
  • How do you access cash value tax free?
  • How do you pay your taxes now on life insurance premiums?
  • Will you get a 1099 for the growth in your life insurance policy?
  • How many withdrawals can you take from a policy without any tax consequences?
  • Once you’ve exceeded the cost basis, how can you get money from the policy tax free?
  • What about the possibility of a policy lapse?
  • What about the horror stories?
  • How do you know you’re working with the right advisor?
  • What are some ways we can avoid lapse?
  • What happens to couples who earn over $44K annually?
  • What’s the problem with required minimum distributions (RMDs)?
  • How does a Bank on Yourself plan affect your capacity to apply for student aid?
  • How do business owners use Bank on Yourself policies for paying taxes and financing big purchases?
  • What is the tax treatment for a death benefit?
  • What are the tax implications with an inherited IRA?
  • How are life insurance death benefits treated in probate court?
  • Can creditors and predators come after money in probate court?
  • Can creditors and predators come after death benefits?
  • Can you save as much as a death benefit?
  • What inheritance options are drama free?

Episode 28: Hug Your CPA and your IRS Agent

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In this episode, we ask:

  • What is going on with the new tax law (the Tax Cuts and Jobs Act)?
  • What’s new with personal taxes?
  • What does the tax code encourage?
  • Where are the tax breaks?
  • How is the effective tax rate different from the marginal tax rate?
  • How does this affect the Mortgage Interest Deduction?
  • How much will this raise the federal deficit?
  • What about the Affordable Care Act / Obamacare tax?
  • How does this affect the socioeconomic structure in the U.S.?
  • What is the hope of the tax law?
  • What about the Estate Tax?
  • What about the Child Tax Credit?
  • What’s the difference between the credit and a deduction?
  • How do we stack up compared to the rest of the world in corporate tax rates?
  • What’s new with corporate taxes?
  • What are the updates with pass-through income?
  • What happens to the net interest deduction?
  • What about the carried interest loophole?
  • What are some of the areas where it’s all stayed the same?
  • Tax handling of Qualified Plans will continue unchanged (529s may be accessible for K-12 tuition needs, this varies by state.)
  • Will more people choose the standard deduction over itemized deductions?
  • Will people continue charitable giving?
  • Did the new law simplify the code?
  • Does the new tax law truly provide cuts?
  • Are you seeing an increase in take-home pay with the tax shift?
  • Why is the word “Jobs” in the title?
  • Are we in the lowest tax brackets of our lifetimes right now?
  • When do most of these changes expire?
  • What should we be doing with our money in light of these temporary changes?
  • Is this the best time to be deferring taxes?
  • How is every 401(k) being taxed?
  • What is something we can pay the tax on TODAY, so we don’t have to pay tax on it in the future?
  • How many trillion dollars is currently sitting in qualified accounts?
  • What is the amount of the government’s unfunded liabilities?

Note: We are not tax experts. Please consult your CPA, your attorney and your tax specialists as you navigate the new tax law.

 

Single filers, 2018-2025
Taxable income over Up to Marginal rate
$0 $9,525 10%
$9,525 $38,700 12%
$38,700 $82,500 22%
$82,500 $157,500 24%
$157,500 $200,000 32%
$200,000 $500,000 35%
$500,000 And up 37%
Heads of household, 2018-2025
Taxable income over Up to Marginal rate
$0 $13,600 10%
$13,600 $51,800 12%
$51,800 $82,500 22%
$82,500 $157,500 24%
$157,500 $200,000 32%
$200,000 $500,000 35%
$500,000 And up 37%
Married couples filing jointly, 2018-2025
Taxable income over Up to Marginal rate
$0 $19,050 10%
$19,050 $77,400 12%
$77,400 $165,000 22%
$165,000 $315,000 24%
$315,000 $400,000 32%
$400,000 $600,000 35%
$600,000 And up 37%
Married couples filing separately, 2018-2025
Taxable income over Up to Marginal rate
$0 $9,525 10%
$9,525 $38,700 12%
$38,700 $82,500 22%
$82,500 $157,500 24%
$157,500 $200,000 32%
$200,000 $300,000 35%
$300,000 And up 37%

Source: Joint Committee on Taxation.

Episode 27: A College Degree from Bank on Yourself

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In this episode, we ask:

  • What does the Wall Street Journal say about qualifying for student aid?
  • What is a 529 plan?
  • How does it affect aid on the Federal level? When colleges set up their own aid?
  • How do financial aid officers look at 529 funds? How do they treat it?
  • Do you know which college your kids / grandkids are applying for?
  • What are some ideas for managing the 529 plan as you approach paying for college?
  • How are the 529 plans like other qualified plans, for example the 401(k)?
  • What is one of the most predictable and reliable ways for saving for big purchases?
  • How do you maintain control of the money, so you can spend it without strings attached?
  • How do you eliminate the opportunity cost with this large amount of money?
  • Who does the money ultimately benefit with a Bank On Yourself college solution?
  • When do loans kick in for kids?
  • Who’s in charge of the loan payback schedule?
  • What about a parent matching program?
  • Who wants to leave an inheritance to Sallie Mae?
  • What about kids that don’t pay the parents back on these loans? What recourse do the parents have?
  • How do Bank On Yourself policies get reported on the FAFSA forms?
  • Where does your money live?
  • What if your money lives in a 529 plan? A savings account? A checking account?
  • What are the restrictions on a 529 plan?
  • What if you or your kid needs a laptop? To get married? To buy a car?
  • How does the money work double duty?
  • How can you pay for college tuition and long term care?
  • How can you pay for college tuition and retirement?
  • How can you pay for college tuition without going broke?
  • How can you pay for college tuition without being a burden on your kids, financially, as you age?
  • How can you get federal student loans that are subsidized?
  • How do subsidized loans work well with a Bank on Yourself policy?
  • Would you like 0% interest for four years?
  • How can you wipe out student loan debt with a Bank on Yourself policy?
  • What happens to your plan at the end? Do you have to work on it or does it self complete?

Episode 26: Paying for College? What are my options?

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In this episode, we ask:

  • If college aid is so complicated, why are we expected to do this on our own?
  • Can an accountant help with college planning?
  • How do I find a college funding specialist?
  • How is paying for college like flying on an airplane?
  • What’s Holly’s story with flying?
  • What key questions should you ask a potential college specialist?
    • What exactly are you going to do for me?
    • Can you make this problem go away?
    • Are you going to help me with my income and asset allocation?
    • Will you help me pick a school?
    • Will you help me fill out forms correctly?
    • Will you help me negotiate?
    • Will you make sure that I get a fair offer?
    • Can you eliminate the administrative errors?
    • Will you integrate sound financial strategies?
    • Do you offer any guarantees?
    • Do you offer a refund if we’re not happy?
    • Will you coach my student?
  • How do the test results matter?
  • How old do my kids need to be to start considering college planning?
  • What years in high school do the financial aid offices look at potential students?
  • How can we get the lowest EFC (expected family contribution) possible?
  • How can we know the chances of a student getting into a certain school?
  • Does your student need an objective third party to talk to (other than parents) about college planning?
  • How can we get more merit-based aid?
  • What’s the difference between a full-ride and having to pay for college?
  • Do you have a negotiator in your corner?
  • Are you interested in knowing what your financial aid package is before you even apply to a certain school?
  • What questions do you have?
  • Would you like to meet with Holly to talk about your college planning needs?
  • How much does the average family receive in financial aid?
  • What is the quote from T. Boone Pickens? “A fool with a plan is better than a genius with none.”
  • Is there life after college?
  • How do you get the best college aid plan possible?