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Mark Willis: Creating Your Own Personal Economy

My guest is Mark Willis. He is a cool Certified Financial Planner, a number one bestselling author and the Owner of Lake Growth Financial Services.

We're going to talk about creating your own personal economy. We’ll also discuss how do you take yourself upstream financially and what does that mean? In addition, we talk about what's wrong with traditional financial planning and the two most important questions, these are million-dollar questions that you need to ask your advisor, your expert when consulting them for advice. These two questions alone are worth the price of admission for this episode.

Dustin
Mark, you’re bright, young and eager to make your mark on the world and like so many students graduating, you find yourself saddled with six figures in student loan debt. How did this hinder you early in your career? Did you have to take a job or pursue a path that maybe you wouldn't have if you hadn't had this debt? How did that really impact you?
Mark
It was not just that we had all that debt. It was that we graduated in the midst of the Great Recession with no job and no plan to pay it off. We moved to the very expensive city of Chicago. Talk about a leg up in life.
Dustin
Did you know going in when you were in school that you were going to accrue this debt and that you would pray and hope that you'd get a job on the end of it? What was your mindset going through?
Mark
The mindset was basically not there. Who gets into at eighteen or twenty years old into all that debt and truly understands the weight of it? We've had about several years since that graduation, and we've certainly learned the value of a dollar since then. My wife and I, we had three private school degrees between us and what felt like a mortgage payment hanging around our necks but without a house to live in, that was our student loan at the time. It was a tremendously impactful decision that we were too young to truly understand when we jumped into that tar sand.
Dustin
Many people are in that situation. I graduated the same thing with debt. I didn't have six figures at that level but when we get in, we get rosy and it will all work out in the end. Do you think this will ever change for schooling or the system? Don't you think one day people are going to wake up to this, get wiser and the system is going to collapse?
Mark
I have some good news about all this too but at the moment, the trend only seems to be getting worse. We do see the total debt has exceeded credit card bills in this country. We're at $1.5 trillion in student loan payments. I have seen a real uptick and a surge in Social Security checks being garnished on our seniors because they still haven't paid off their student loans. Maybe they went back to school, for example, in their later life and they have trouble even coming up with the money to pay off the bills to the student loan companies. That's how truly ravaging this is. It's a non-bankruptable debt and we've all been told that it's good debt. There's some truth to that but at the end of the day, it's a debt that cannot be washed away with bankruptcy and that to me seems like a big problem.
If there's no intentionality on the forefront going into college with a plan for example, “What's my college degree going to be? How am I going to get out of this in four years, not six or seven?” That can be half the battle right there but I do still see it as a benefit. I don't regret anything from our past there because it truly put my wife and me on a trajectory to get laser-focused on our own passion, our own goals and to help other people make smart choices about their relationship that they have with this thing called money.
Dustin
You have to be a certain age, typically an older age, to get Social Security and they're being garnished. I'm glad you said something to the effect of maybe these folks went back to school but immediately, where my mind went was people are arriving at that age with a bunch of student debt still. It blows me away at the kind of money they're paying interest and being saddled with. You talk about going upstream financially and I get it on a whole but I want to make sure we fully understand this. What do you mean by that? How did you go upstream financially from you and your wife being six figures in debt?
Mark
The basic premise is we sometimes find ourselves in the cesspools or the tar sands of the financial universe where we have to really like a salmon go upstream. Sometimes that means going against the current of what has mainstream taught to us by either our family, our social circles, our general financial media and doing things counter to what we've been taught all our lives. If believing what we believed and following the advice we've been given has gotten us to where we are, maybe it's time to explore outside of the common ways of thinking about money, finance, your own personal economy, your own future. Deciding for yourself, “Is what I am doing going to get me toward the goals that I wished to have several years from now? If not, what's going to have to change to help me go upstream?”
There are lots of tributaries upstream. Let me give you a few examples. You could start as a renter, go to a homeowner, go to a real estate investor and finally, go to being a mortgage company for other real estate investors. That's one way to go upstream financially. You could also go upstream financially by living within your means and beginning to store up a warehouse of wealth for yourself so you can make smart investment decisions. Finally, have not just a protected income for the rest of your life but an increasing income for the rest of your life to keep up with inflation and even double your income over a 30-year period. Those are several different ways. You can make smart choices no matter what your age to go upstream and to leave the cesspools or the swamps of your financial life that you might be in. If you aren't happy with where you are, ask yourself, “What's going to be the first thing I do to help me move to the goals that I wish to have in the future?”
Dustin
This is the WealthFit message. I don’t know if you went and read WealthFit, but you are the most aligned guest we've ever had. You've hit so many of the things that we talk about here. If you do the same things, you're going to stay where you're at and it probably got you there, and that's okay but do different things and you’ve got to go upstream. You're not a big fan of traditional financial planning. Will you do a favor and define what you believe traditional financial planning is and what is wrong with it?
Mark
I am a Certified Financial Planner, Dustin. That means I've been classically trained in the traditional financial model. There are a couple of common advice pieces you might hear. There's some truth in everything that I'll say and maybe some are not true, maybe some common misperceptions in here too. Live on less than you make, take a job and keep a job, have one stream of income from your day job, put all your money into a 401(k) or in your house and then take 4% of your money out of that 401(k) for the rest of your life once you retire.
Those are a common set of assumptions that a lot of people, whether they realize it or not, believe in or are subscribed to. You might also have other myths abounding like buy term and invest the rest. That might be something you've been taught. The stock market always does 10% on average every year and you can fall off a log and get 10% in the stock market. Those are some of the things that I think of when I think of traditional financial planning. Are there things maybe that I missed or you'd want to add to that list?
Dustin
You don't necessarily believe that you can fall off a log and get 10%. What's making you want to say that?
Mark
I believed that for a long time. I cut my teeth as we were getting out of our college degrees and facing this monthly student loan monster payment. I jokingly say I've married two women in college. One was my gorgeous wife, the other was Sallie Mae. Sallie Mae demanded more money than I think than any of the rest of us in the family. That was our first attention-getter to our own personal finances and the stock market’s seemed to be the knight in shining armor. If we could put enough money over there, maybe we could find a way to wipe out our debts or even comfortably retire someday.
It was radio hosts, who shall not be named, Dave Ramsey, who would regularly say that you could get easily 12% a year in your mutual funds for example. It wasn't until I started actually doing the research as a part of my CFP designation training. It floored me. There are third parties, people who aren't selling mutual funds or endorsed local providers as certain radio hosts do. There are third parties like DALBAR. DALBAR is a well-respected research firm. If you're all invested in mutual funds, the real return is only 3.9% per year over 30 years. That's only beating inflation by 1.3%. How is that possible? Mutual funds are advertising some of them 8% to 12%, and here's how it's impossible for us to equal what the mutual fund itself is advertising.
Average rates of return are meaningless and here's what I mean by that. Let's do a little thought experiment. Let's say that I have $1,000 and I want to put it into the stock market. This year, that $1,000 goes up 100%. We're up to $2,000 and I'm feeling pretty good. Let's say next year, my $2,000 gets cut in half negative 50%. My $2,000 goes back down to $1,000. Two years have gone by and I have the original $1,000 I started with. However, if we do the math there, the average rate of return was 25%. 100% minus 50% divided by two years is 25%. That is what mutual funds are allowed to advertise. Who made money in that scenario? I didn't, you didn't.
None of the investors reading to this did. The investment advisors who take a 1% fee certainly got paid. The mutual fund got paid, the load costs inside that mutual fund got paid but we got nothing more for our money. The mutual fund in their brochure got to advertise a 25% rate of return. Not only is that wrong but it's also a lie and people are living on a lie. I hate to be that bold about it but we have to read the true research here, third parties that don't have a dog in the fight like DALBAR and Morningstar, people who have done the research on this. The real return of actual investors was more like 3.9% over the last 30 years. That includes the bull market that we've come through over the last several years and the 1990s.
Dustin
You're a financial planner and you're saying traditional advice. With that context and understanding, people are so busy. People were busy decades ago but are increasingly busy now. We have a lot of entrepreneurs that are busy running their business as well. If we can't trust our financial planner or folks that are selling mutual funds, what is one to do? What's your advice for folks that want to get a return but maybe don't have all the time?
Mark
It's hard to know where to find yield. The best returns are not always found in common places. The Wall Street machine is pretty well full of fear and greed. We typically buy and sell at all the wrong times even if you’re dollar cost averaging. That means you're buying up the most expensive and selling at the worst times over a long period of time. Where is it written that Wall Street has to be the only place that you keep your cash? Even real estate, there are some awesome places to park your money to get some nice yield in real estate but even that is getting hot. The real estate's a very local investment because you're buying usually one property, maybe it's a big apartment building but it's located on one address, so to speak. If you're looking for good opportunities, that's a local decision to make for sure but overall, I'm seeing more and more markets in the real estate space get tougher and tougher to seek some yield.
You have to be a very savvy investor and you have to really know who you're dealing with. For example, do you trust the folks that are offering you a fund or getting into partnership with another person with other real estate investments? You have to expand your horizons and think differently about where you might be able to put your money. The most important thing to say is it's all one wallet. For example, if all we're focused on is the rate of return, we might miss out on some bigger picture hinges that could swing some pretty big doors. Here's what I mean by that. Most of my money sitting in a cash allocation in my portfolio, I'm not getting a ton of yield on that but I'm aware of and ready to pounce on opportunities whenever one should present itself to me.
It's not always about the rate of return this moment. It's about what's the big picture rate of return. It's all one wallet. For example, if I'm making 10% on a mutual fund, which is not guaranteed and I'm spending 20% of my income on credit cards, mortgages, auto loans and student loans, that's a leaky bucket. I had a gentleman one time who made about $250,000 a year and he was very pleased with his stock market portfolio. It was doing very well somewhere in the 8% to 9% over the last two or three years. At the same time, we totaled up his numbers and he was spending 33% of his money, his income, $80,000 a year, going to interest payments on his two houses, his boat, his cars and his student loans. That's a leaky bucket. The bottom of the bucket is losing more than the top is earning. It's all one wallet is what I tried to introduce to our clients and folks that we work with. Understanding that fact that there's only one rate of return can really help you make some smart decisions in your overall portfolio.
Dustin
I love that term, the leaky bucket because I've had that. I probably do need to go back in and keep looking. It's really easy to say, “I fixed it,” and then a year goes by or a couple of months go by and there's that subscription or there are those interest payments. I want to attack this because for a little bit there I almost felt you are advocating self-directing a little bit, taking your own control. However, you're a financial planner. I'm sure you want to advocate having advisors on your team. What am I hearing here? Self-direct? Have some advisors?
Mark
It's important to ask your advisor, “What do you have in your portfolio?” Ask that question to him or her. Learn what it is that motivates them to recommend a certain asset class, a certain mutual fund, real estate or annuity product or whatever it is that they're recommending to you. Ask them the question, “Do you have this in your portfolio?” Ask yourself this question when you're looking at any decision you want to make financially, “Who besides me profits from this financial decision I'm about to make?” Self-directing is a great option. I do have a bias toward this as an entrepreneur myself but one of the things that we focus on with our clients is helping them reach their financial milestones without taking unnecessary risk.
I'm a big believer in risk as a business owner. I'm sure you would say the same. Risk is an important part of our life. It's the salt of life. It's what makes us get out of bed in the morning, but it's the necessary risks that I want to take. The unnecessary ones are driving way too close to the edge. If I can find things that I can control, understand and believe in, get behind and passionate about like my business or a piece of real estate that I can see and understand, that's awesome. It cuts out a lot of the third-party fees. The compounding nature of fees in the investment space is egregious.
There are a few plan fees, wrap fees, soft dollar costs, account charges, revenue sharing, expense ratios, redemption fees, I could go on and on. These are all permitted fees that generally range from about 1% to 3% on somebody's portfolio every single year. These are compounding fees and it's super important to pay attention to. In fact, the Department of Labor came out with a study that said, if you have a 1% fee on your portfolio, it’s pretty low but if you have 1% fee on your portfolio that's going to slash the value of your savings accounts, investment accounts or 401(k)s by 28% over the next 35 years. That's 30-year life savings gone to fees. The average small 401(k) plan is more like 2% a year in fees.
Dustin
I want to go to real estate. I've self-directed myself. I'm making an assumption that I'd love for you to validate or clear up. Typical financial planners don't advocate going and flipping property because there's no fee that they can get from it. Is that right?
Mark
That's the truth. I hate to be that bold. There's no credential around that word, financial planner. It doesn't mean anything. It's the word natural on your granola bar. What you want is some certification label and that's partly why I went through the rigors of becoming a certified financial planner. That's a registered trademark and a litmus test. You have to pass a series of tests. It took me about three and a half to four years to get through it. That is the highest ethical bar you can pass. Part of it is being a fiduciary for your clients but more importantly, when you're being recommended an investment, whether it's real estate or anything, ask who's the one that is profiting from this decision. That's an okay thing. Profits aren't bad but is that an appropriate fee or am I being having the wool pulled over my eyes? You're exactly right. Most investment salespeople are going to recommend the things that they sell. If you ask a barber, if you need a haircut, you can guess what his answer is going to be. Self-directing is not often part of the overall portfolio but it really should be. What do you think about that?
Dustin
I love your question. It hit me right in the gut. What do you have in your portfolio? I can imagine asking that question to a couple of folks in the space and them back peddling and not having a great answer. That's a million-dollar question right there. I love the secondary question. Who besides me profits from this transaction? It really forces you to think. I'm one of those guys. I want to create in this world. Let's go make it happen and figure out all the details and the fees later and that chew oftentimes. You put a lot of effort out into the world and then you're like, “That didn't pan out like I thought it would.” Those were incredibly spot on, which often leads me to self-directing because I used it as education. In real estate, I always love to ask about the first deal. What was that first deal that got you into real estate? Was it a flip? A rental?
Mark
It was our very own business. Talk about getting into something that we understand. Our office needed to expand and we put some money into our own business space, built it out and have several other offices that rent here in the building with us. That for me, has been phenomenal. Commercial real estate has been simple and understandable. It’s not about markets as much as it is about the formula. The cap rate is something that's fairly simple and understandable, can be used and enjoyed by me and by my business. It was our first opportunity to participate in real estate investing.
Dustin
For those that are in business already, what should they be thinking about? When is it time to actually buy a building versus rent? What's your advice here?
Mark
As a business, the general notion is that renting is okay. It's not exactly the best thing to do long-term. Here's one thing you could think about. If you have a business that you want to grow someday, you have to ask yourself, “What's my exit strategy from this business?” Someday we'll either intentionally leave the business, sell it or be forced out of it due to a health issue or other financial issues. The business may or may not always be there but that building, if you have one, might always have the opportunity to provide you an income stream. Even after you've sold your business, other folks might move into that building and provide you a retirement stream of income. Not to mention while you're operating your business inside that building that you own, that's something possibly that your business could either own itself or you personally own and your business is writing you a rent check every month.
I've got a lot of our clients that do this. One gentleman, he owns the building and inside is his Go-Kart business. That's a pretty cool strategy because he owns the property and the business pays him a rent check, which is not a part of his wage inside the business. There's a number of factors you can use like the depreciation of the expenses in the property and so forth. There are so many tax advantages and income advantages and the protection of your income after you sell your business. To me, it makes a lot of sense to think long-range and decide for yourself, “What am I going to do with my property once I sell my business?”
Dustin
I wish I met you years ago because one of my first ventures, we rented and in the last year before I exited. We bought a building and I wished we had done that at the get-go because it would have been paid off and I would have made even more.
Mark
How many people have paid off their business landlord’s properties many times over with the rent checks?
Dustin
That's why I got excited to do this show is to bring that awareness to folks. Don't make those mistakes that I did or we did.
Mark
More than my fair share of bear traps and two by fours across the forehead, that's for sure.
Dustin
Mark, you're into the bank on yourself concept. Would you share exactly what that is?
Mark
It's a financial mindset with a tool that helps you accomplish maybe the biggest financial decisions you'll make in your life. These are bold claims but let me explain what I mean. How many cars, how many vacations and how much in taxes do we all spend over our lifetime? All the big expenses, your kid's college fund, medical emergencies, real estate investing, all that costs money. The biggest decision I believe in our financial life is, “How will we buy the things that we have to buy to operate the life we want to live?” Adding up how many cars we might buy could be a six-figure sum right there. A kid or two in there with $250,000 college funds in a few years, throw in a house or two or three and a couple of real estate properties and we're talking about millions of dollars slipping through our fingers if we buy things incorrectly.
Think of it this way. A dollar I spend is gone forever even if I pay cash for something like a cup of coffee. If I spend $3 on a cup of coffee, that's not just $3, is it? That's $3 plus whatever that $3 would have grown to had I invested that $3 instead. The truth is we finance everything we buy. Either we're sending money to a bank to operate our auto loans and our student loans or we’re passing up interest we could have earned on our dollars had we invested them instead. We're all tethered to this thing called banking and it’s not just an industry. It's not just JPMorgan Chase and Bank of America and those guys. It's not just your local bank or credit union. It's a function. It's a verb. Banking is a function in your life. We're already in the banking business. Even if your day job is as a real estate investor or working in another industry, if you're a dentist, you're not just a dentist, you're also in the banking business. The question is how could we take that banking business and bring it in-house? What if you could become your own source of financing? What if you could take back the control that banks typically have on our lives?
This was another statistic that floored me. I was reading from the US Commerce Bureau that 34% of our average incomes in this country go to servicing our debts. If time is money, what's a third of your day? We’re slaves to a bank and we're only saving close to 5% to 6% of our income. That's where the leaky bucket comes into play. We're saving 5%. We're spending and financing 130% of our income. That's a losing proposition. If you could become your own banker, if you could bank on yourself and recapture the interest that you're sending to credit cards, mortgage companies, private money lending institutions, you would become not only financially solvent but you'd become much more competitive in the real estate space. Preparing yourself for whatever life throws at you like kids who need to send to college or cars you need to buy.
Dustin
How do we execute on this tactically?
Mark
Part of the way my wife and I decided to get out of debt was to think differently about money. I'm going to describe what we decided we needed in our cash and then I'll get into some specific tactics and tools. For us, we said, “What do we want our money to do for us?” That's another question I'd say your audience might want to ask themselves because I can't answer that on this podcast. We're not giving any specific financial advice here but what I can tell you is I needed my money to do a couple of things really well. I needed my money to be safe. I wanted it to grow on a guaranteed basis. I wanted some tax advantages like tax-free access to my money. I wanted that money to be accessible. I wanted it to be liquid and accessible to me without costs or taxes or early withdrawal penalties or any of that mess to get my money out. I wanted it to be private and outside of bankruptcy risk and privately owned where creditors couldn't attach themselves to my net worth if I had a problem or went through some financial difficulty. I wanted gains on this thing to outpace inflation.
That was my parameters, I looked and looked. That's partly what got me laser focused. I was working for a CPA at the time of the financial crash and I was listening to her call our clients to say, “I'm sorry Mr. Client, but I lost you half your life savings in the midst of the Great Recession.” These folks might have been sometimes 61 to 62 years old. I knew that Wall Street didn't have what I was looking for my own portfolio. I had to ask myself, “Is there anything out there that fit that financial personality test that I listed?” Accessibility to cash, guarantees and so forth. The only thing that met the criteria was something we call bank on yourself, which is using a financial vehicle from many years ago. It's using dividend-paying whole life insurance, but it's not the whole life insurance that maybe our parents had. This is a mutual dividend paying life insurance policy that's designed not for the death benefit at all, although it is there it's really focused on packing money into the cash value. It's designed with massive cash values in mind.
These cash values that are in the policy is liquid cash. You can access that money for any reason and it grows on a predictable schedule. Every single year, the policies that I have in my portfolio are worth more this year than they were last year guaranteed. That's a nice feature but more importantly, I have access to that cash for investments or for paying off our student loans for example. Usually, that's what we've seen work in the real estate space. It couples with big cash value in these policies, coupled with investments in things like real estate, self-directing, of course. That gives folks a little bit more control and predictability for their investments or for buying their cars. We'll talk a bit about how you can use this for even your own kitchen repair or sending your kid to college if you'd like.
Dustin
You mentioned this is different than what some of our parents or our grandparents had and the keyword there was dividend paying. Will you break down what people are used to and how this is different?
Mark
As soon as I stumbled across this concept and found out it was whole life insurance, my mind almost shut off and I almost didn't keep pursuing or investigating it. There are a few key things that make this different than what maybe I had been studied up on in my CFP and heard about from on the radio. The first is this is a dividend-paying whole life policy. You own the profits of the company that you have a policy with. In other words, it's a mutually owned company, not a company that's traded on Wall Street where shareholders take the profits. In this case, we are the owners of the company we have a policy with. If the insurance company is profitable, they'll return premium to you in the form of dividends and you get to plow that money right back into your policy.
Another key difference is that the cash value grows somewhere between 8 and 40 times more cash value in the first few years, especially to rocket boost this thing into the stratosphere and be a big pool of capital for whatever you might need. Use it as a financial management tool from the first year or the first month that you have it. You would have this policy if you had to. The other key thing that is categorically different than the whole life I read about anyway, is that when you access the money when you borrow from this policy, the policy will continue to grow as if you had never touched a dime of it. I'll say that another way because that's mind-numbing to a lot of people that I talked to. When I access the money in this policy, it will continue to grow even on the capital I borrowed. I'll give you an example. Let's say you've got $100,000 in this policy. You've got a $100,000 in cash value. If I was to borrow against the policy and buy a car for $30,000, my $100,000 would still grow and I'd still get the exact same growth and dividends in the policy as if I had not bought the car.
Dustin
Why aren't more advisors telling us about it? Is it not an attractive product to sell? Why isn't this more prevalent?
Mark
The honest truth is most people were taught the old-fashioned advice of buying term insurance and investing the rest. That's probably helped flood trillions of dollars into the stock market. It was several years ago when the first 401(k) was issued. That's when a lot of money left whole life insurance policies, pensions, annuity contracts and into the stock market. It was a part of RISA, which back in the ‘70s, we all became speculators and we used to keep a lot of our money in whole life insurance. Back in the ‘40s, we used to save 30% of our income and according to the US Census Bureau from the 1940s, half of that money was going into whole life insurance policies back in the day. I don't know why is the short answer but I also can tell you that typically these kinds of whole life policies, we're cutting the commissions to the advisor that designs it by about 70%. That's probably the real reason why you've not heard of this before from your investment advisor.
Dustin
We are big believers in this concept here at WealthFit, however, we differ on the vehicle. I actually do favor where you're coming from. However, there are other and there are different vehicles for different folks. I want to bring this up because this is coming up here at WealthFit internally. You've got the participating or dividend-paying whole life insurance policy. However, there are fans, even here, of the index universal life. Will you explain the difference between the two and why maybe you favor whole life participating or dividend-paying over that?
Mark
It's an incredibly attractive tool, the index universal life. I don't want to waste time if they're already familiar with the concept but in three sentences, index universal life insurance is a permanent cash value life insurance like dividend paying whole life, the bank on yourself concept we talked about. The categorical difference is, the underlying chassis of index universal life. There's no bad or wrong financial vehicle out there. It wouldn't exist. It wouldn't make it to market. There's a purpose for every financial vehicle that's out there in existence, even things like 401(k)s and mutual funds. The issue I take with index universal life is that the internal component of IUL is that it is annual renewable term insurance chassis.
That means every time I have a birthday, I'm getting more and more expensive to insure. That chassis is designed to get more and more expensive inside that policy. The hope, there's the keyword, is that the index of the stock markets index will help keep up with my aging body. Unfortunately, too often, I see over promises on the hypothetical returns of the market. We can go back to that conversation in DALBAR’s results in what the real index returns are. Most people are illustrating these IUL contracts. 7% even 6% is too high in my opinion since we're looking at real returns closer to 3% or 4%. What happens is, unfortunately, I see those hypothetical illustrations running out or lapsing when folks need the cash the most, which is in retirement.
There are a real purpose and a gift that we've been given with this vehicle, the IUL. It has some real purposes that can be solved. For example, the highest death benefit with a guaranteed UL. I wouldn't recommend it for the banking function because it does not offer us that non-direct recognition loan feature where the money keeps growing inside the whole life policy like bank on yourself policies described. It's not like one is right or wrong. It's about what is it you want your money to do for you.
Dustin
Every vehicle exists for some purpose. It's a matter of are you using it for the right thing versus are you getting prescribed it because it's in Vogue, the salesperson or advisor makes a commission? Back to bank on yourself, is there any anybody out there this strategy isn’t for or would you recommend to some people to not get into this?
Mark
Yeah, there are some considerations. This is a nuanced custom design solution and it has to be someone who's already saving or investing. You cannot do this without being able to put away. If you're in debt up to your eyeballs and cannot save two pennies, you're not going to be able to do this strategy. It still is your own money. That's a key consideration to make. It's also not an overnight rate of return success story. There is a cost to this insurance policy like there would be with any investment you might make. Even real estate has closing costs, property taxes and so forth. You have to weigh the cost of anything against what it can do for you.
For folks that are looking for overnight rate of returns of 30%, let's point them back to the stock market or to the next cryptocurrency. This whole life contract is going to be steady, predictable, middle, single digits, somewhere between 4% and 6.5% in that range after tax. That is the slow and steady part of your portfolio. It should not be every last penny in your net worth and it gives you the ability to do other things with your money. It's the folks that are looking for a velocity of their cash that see the most benefit here. It's not supposed to be where you let the money sit, soak and sour.
The policy itself is more like a garage where you're pulling that money out of the policy, putting it to work like you take your car out of the garage, put it to work every day and bring it back home every day. You're using it as a receptacle, you might say, to recycle your money in and out over and over again for your real estate deals and whatnot. If you can view this more like a cash allocation in your portfolio and not so much investment, it's not an investment actually, then that's the best mindset to come at this with. Like a bank, you want to keep that money in the vault and then deploy it for loans to your customers, which happens to be in this case, you and me. We are our own banker with the strategy.
Dustin
This is a life insurance vehicle or a policy, so people actually have to qualify this. What happens if you're sick or maybe you've had some health challenges? How does that weigh into this equation?
Mark
This is life insurance, however, don't count yourself out if you've had a couple of extra birthdays under your belt or if you've had a health challenge or whatever. I've found a lot of folks who are able to get the policy on family members or business partners, you are the owner and you control the cash and the policy as the owner of the policy. The insured might be a different person as long as you have a connection to them and insurable interests as they say. If you're connected to them like a family member, a business partner or a spouse, for example, you control every part of that policy. They just happen to be the person that the insurance is tied to.
Dustin
You started a podcast, Not Your Average Financial Podcast. What have you learned in interviewing folks and doing close to a hundred shows and what has surprised you about starting your own show?
Mark
The incredible power of the who. Who is more important than almost any other question because who you have around you will help you toward your journey of financial independence, transcendence, whatever you're trying to do. What I love about your show and the opportunity, the gift of being a guest on your show and being able to have guests on our show is we get this incredible chance to learn from people who've gone through so many different experiences in their life financially and otherwise. I feel like I'm privileged in the personal one-on-one space, when we sit down one-on-one with our clients to have a consultation with them to see if this or other strategies are a good fit.
I don't come with any presumption. We always have an advisory listening conversation to see what's a good fit for our clients but what I love about both being a podcast host and being a certified financial planner is I'm sitting down with people and listening to their stories and learning what worked, where the bear traps and the two by fours are to avoid. It's been a tremendous journey. I'm sure it's been similar for you where you're blown away by the who and learning to grow and benefit from the things that you've seen other people accomplish, fail out or whatever, and move on from there financially.
Dustin
The who on the show, the stories but the who in your life. Who you surround yourself with can elevate, I'm grateful to be able to do this, learn myself and share it with others to learn. Mark, what are you working on these days? What's got you most excited?
Mark
We finished up a book for folks who are running eCommerce businesses. We've talked some about how this bank on yourself strategy can fit the real estate investor, but imagine how this fits into the business owner context where you've got a big pool of cash, a contingency capital, that does not go away when banks stop lending. If the next recession comes and that could be several months or several years from now, nobody has that crystal ball, it will be the people with six or even seven figures of liquid money that is able and ready to be deployed out of the policies in about three to five business days, which is how fast you can usually get the money out of these policies. We wrote this book for the business owner, specifically folks who are selling online, eCommerce strategies. The book is called How to Be an Amazon Legend and Fire Your Banker!. That's really got my attention and it's been providing a lot of fun and interesting strategies for folks. We've even been learning how to use this for big, regular expenses like the dreaded tax payment each year.
Dustin
That’s incredibly savvy. You've niched down because there's no shortage of folks that are educating people. It's still small but you have other people out there doing what you do. To niche it down to eCommerce is a very powerful lesson for all the entrepreneurs, even professional service folks are to go find a niche and figure out how do you speak directly to them.
Mark
If you can niche down until it hurts, keep niching until you're weird.
Dustin
Mark, I truly appreciate you being on the show and bringing awareness to this concept. I love the approach of asking those hard-hitting questions, also realizing self-directing and keeping your eye on your own wallet is incredibly powerful. I appreciate you bringing it like other folks wouldn't on the show and giving people awareness. If people would like to get more Mark, where can they do so? What's the best place for them to find out what you're up to these days, the book and social media?
Mark
You've mentioned our podcast, that's been a lot of fun for us. We drop a brand-new episode every single week and we do have a back catalog of some interesting concepts and how you might apply the bank on yourself strategy and other weird financial strategies, not your average financial strategies. Our podcast is Not Your Average Financial Podcast and anywhere you're listening to this show you can listen to ours but our website is NotYourAverageFinancialPodcast.com. The book is on Amazon. It’s a bestselling book on Amazon, How to Be an Amazon Legend and Fire Your Banker!. If you'd like to talk to me about this, I'm happy to speak. I've got a calendar on our website. If you go to NotYourAverageFinancialPodcast.com, click on Request a Meeting, if you type WealthFit into the notes of our event, I'll be sure to send you a free copy of that book, compliments of Dustin.
Dustin
I appreciate you being on the show first and foremost and more importantly, your drive and your mission to really empower others and show them there are nontraditional ways of building wealth and oftentimes, those are the ones that you absolutely want to be paying attention to. Thanks again, Mark.
Mark
If you follow the herd, you're going to get slaughtered. Being weird might be the best decision you ever make.

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