Money is important to everyday life; you just need to not let it run you. Be the boss of your financial life. Stop spending all your retirement funds or getting crippled by your student debt. Learn the best financial strategies custom-tailored for you by our guest today, Mark Willis. Mark is a CERTIFIED FINANCIAL PLANNER™, a three-time #1 Best Selling Author, and the owner of Lake Growth Financial Services. Understand what the term infinite banking truly means and discover how to bank on yourself. Learn more about the whole life policies that will help you get rich over time but not overnight. Join Jamie Bateman as he talks to Mark about being the boss of your money so that you can live a life of abundance.

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Bank On Yourself: Be The Boss Of Your Money With Mark Willis

I am joined by Mark Willis of Lake Growth Financial Services. He has a wealth of knowledge about all things financial and infinite banking and all kinds of things that we’re going to get into. Mark, how are you doing?

I’m doing well, Jamie. Thanks for having me on.

Mark, where are you? Are you in the Chicago area?

Yeah, that’s right. We’ve had the privilege of living in Chicagoland for the last several years. I’ve seen different phases of life. When we first moved to Chicago, the skyscrapers were going up, scaffolding everywhere and then boom, 2008. Everything came down and then it’s coming back up again.

That was an interesting time for sure. If you would, for our readers who are unfamiliar with you, why don’t you say a snapshot of what you’re doing right now, what your business looks like right now and then we’ll back up into more of your background.

We work with clients all over the country. We are a part of the Bank On Yourself Professionals program, which is a 200-plus member professional organization. It’s the only credentialed program in this specific niche. It’s both across the United States and Canada, but we have clients all over the world, although our focus is in the United States. We work with folks one-on-one in an advisory way to sit down and review their overall financial goals and objectives as certified financial planners. That’s part of my duty, but it’s also my privilege. It’s so cool to get to meet people. Understand that at the end of the day, it’s about the deepest stuff you can talk about.

Money is not important intrinsically, Jamie, but I found that money seems to get into all the important areas of life, marriage, children, legacy, purpose. When you allow yourself to let money only be the conduit to that great conversation, my job, in this case, is tremendously valuable and rewarding. I get to see transformation almost every day. What better thing could we spend our time doing all day long?

I get excited about these kinds of topics. Chris and I and most of our readers are pretty heavily focused on mortgage note investing, which is fantastic in and of itself, but there’s so much more to personal finance and investing and wealth building. I view money as very powerful but not the end goal in and of itself. It works its way into all facets of life. It’s a critical topic that we talk about and educate each other on.

We were talking before we started a little bit about how we’re both in the bank on yourself or infinite banking space. I’m going to have to force Chris to listen to this one because I’ve been in his ear a little bit about this topic. We had Russ and Joey from Wealth Without Wall Street on previously. They’re in the same little inner circle in the infinite banking world. How did you get to where you are now?

You’re among pretty rarefied air to be talking about that specific strategy with two different groups. That’s pretty awesome. It certainly wasn’t introduced to me as a kid, growing up, or even as a young adult. The student loans were piling high when I graduated. We were up to six figures, $120,000, when we graduated. With the inflation, that would be close to about $250,000. We graduated in 2008, which was a wonderful time to be looking for work. I had no real marketable degrees between my wife and me. We were really starting off life just fine. We had no plan and budget. I remember our first couple of budget conversations, it was so difficult for us to talk about money that we had to go to a public place so that there would be witnesses just in case they’re needed to be some sort of witness to the crimes committed.

What were your degrees?

I got a Master’s in Divinity and my wife got an Arts degree. It’s great to be looking for work in the Great Recession with two degrees that may or may not be not exactly engineer degrees or medical doctors or anything like that.

The truth is my degree was in Sports Management. Half of it was Business Management, which I think is somewhat applicable. I can relate to getting out of school and saying, “Now what?”

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My wife jokes and says that, “As a Master’s of Divinity, you can make great chocolate.” I like to say that my favorite book of the Bible is the Book of Numbers because I got focused on money mainly because it was never taught. It’s strange. Maybe a lot of folks can listen, even if they didn’t get a Master’s of Divinity, a lot of these management degrees, leadership degrees type deals, I was never taught how to balance my own checkbook, much less help a nonprofit or a church manage a large budget and yet we’re given this whatever leadership degree. The idea would be to go down and to lead a church or a nonprofit or something. That’s the end result of a Master of Divinity.

I didn’t feel called to do that. It’s fine for folks that do, but I never really saw myself doing that. I just wanted the experience of learning and going deep with my faith and so forth. That was the most direct way to do that for myself for my seven years in the desert of West Texas, where I got my degree. What I realized was I had no clue how to do this thing called money and neither did most churches. As it happens, churches either never talk about money or that’s all they ever talk about. As it happened, I never got much of an education on money. It seems like Jesus talked quite a bit about money, but I never got trained on what it meant and what my philosophy was toward it.

It was just happening to me. Either you’re going to happen to money or it’s going to happen to you. Whether you get a sports management degree or an MDiv or many other degrees, many of us are handed this bag of rocks called a financial life, “Here’s your 401(k). Here’s your credit card. Here are your student loans.” You’re supposed to know what to do with all that stuff. You start putting this bag of rocks on your back and you’re lugging it around, wondering, “Am I doing the right thing here?” People often go their whole life and never stop to say, “What do I want in that bag behind me here? It’s dragging me down.”

They lived their entire life case in point. Many people I sit down with and talk to say to me, “Mark, I want to put my money where it’s going to grow consistently. I want some ready access to my money. Taxes are likely going to go up in the future, so I don’t want all my money in a tax-deferred vehicle.” They don’t maybe understand that a 401(k) runs counter to everything I just said there. There’s no consistent growth. You don’t have access to the money. It’s all taxed in the future when you believe taxes will be very likely higher. When we act against our beliefs, even subconsciously, it creates stress and emotional conflict. For many of the conversations we have with folks, it starts with, “What do you want your money to do for you?”

“At the end of the day, we have agency over our money. It’s not like money is our master. If we can be master of our money, if you were the boss of your money and your financial life, what would it look like? What would success look like for you?” That’s where my wife and I had to start. We had to say to ourselves, “Let’s take the labels off, savings account, 401(k), brokerage account, real estate and say, ‘What are the attributes that we want our money to have? Are we doing what we say we want our money doing for us? Is it actually doing that? Are we tirelessly running after the all-mighty dollar?’”

How did you approach that question there? It’s a lot to unpack. 2008 and going forward, how did you approach things as far as taking control of your money and being the boss of your financial future?

It’s certainly a process for sure, but we had a couple of great conversations with great mentors, too, and long outings to the ice cream shop where those witnesses would be just in case. We started creating a little list for ourselves. If we were Pope of money, what would the list of characteristics look like? We started making our checklist. In fact, your audience and anybody, I would suggest, take ten minutes, grab a legal pad and someone you can talk to about it and write down, “If we could design a perfect financial vehicle out of nowhere, what would it look like? How would it act? What would it do under the circumstances?”

If your savings account acts differently than a 401(k), a brokerage account, a REIT or a mortgage note, what are the functions of the money where you put it? Where you put your money makes it act differently. We started our little list and we said we wanted a good competitive rate of return. We wanted ready access to that money without a bunch of penalties or red tape. We wanted it to be accessible tax-free. We wanted it to be always growing with guarantees. We wanted it to be able to absolutely have a bottom line that we would know for sure, “Here’s what we’d have at certain ages, 5 years, 10 years, 20 years.” We wanted to solve for our kids’ college even before they were born. We wanted to solve for our retirement, even before we started funding it. We knew that this was probably not legal, whatever we were thinking about. We wanted to blue sky it for a minute.

Almost too good to be true.

We wanted to be outside of the reach of people who, if we ever went through a bankruptcy or got sued, God forbid, we want it to be protected from that stuff. Paint it with me here, Jamie. What else would you want to do? What would you add to that list?

Something that’s also outside of FAFSA stuff, student aid and that kind of thing. Probably a slow-growth type, guaranteed growth type vehicle that you could access to capital. I am somewhat in this world myself. To me, what I love about infinite banking and using a specifically designed whole life policy for infinite banking is options. It gives you options and control. The truth is you don’t know what your life’s going to look like in ten years.

Yes, you’re planning for your kids’ college education and I don’t know how old your kids are, but maybe your kids won’t go to school. We socked away a good bit into our 529s because that’s what we were supposed to do. I’m honestly regretting that a little bit. We’ll probably end up using most of it, but my son may not go to college. I don’t know. We’ll see. We’ve got two kids. It’s a vehicle that allows for flexibility and control. Those are important factors for me, for sure.

I had never heard of a bank on yourself, infinite banking. I was making my list at the time. The degree is angry at all that student loan, debt and feeling miserable about having to pay it all back. We were doing Dave Ramsey’s snowball method at the time. A professor of ours came and sat down with us and said, “Mark, you need to write this little list down.” We did that. He was feeling bad because he had contributed to the problem of all of our debts, but he was a great friend. He was a great guy. As we started making our list, we also added things like we wanted to be able to access the money as leverage for other investments we wanted to make.

He helped give us some creative thoughts without us getting into the bias of the word savings account or whole life insurance or real estate. Take the labeling off and just talk about the function. He brought up, “Mark, is it possible that Dave Ramsey could be wrong about something?” He said those words to me. That hit me like a ton of bricks because I followed that guy like he had written the Fifth Gospel or something. As I got into my CFP training and started diving in, I could not turn away from this compelling idea of whole life insurance, meeting all of what we had told him. He shared bank on yourself with us. We got it confirmed as I went through my CFP training and I’ve never looked back. It does all of what we talked about.

You got it confirmed.

I went through three and a half years of CFP training. It took me a good chunk of time to go through that training process, but it verified what he told us that day. We found out ourselves over time. I’m beating my head against the wall, trying to prove it wrong, to be honest with you.

What is infinite banking? How does it work?

The reason why we distinguish there, just so you know, Jamie, there are 400,000 life insurance agents out there, and there are about 10,000 people that I’ve been able to find, meaning search results on YouTube and Google that say the words infinite banking, private wealth banking or 7702 accounts. It’s like when you say Xerox or Kleenex or something. Nelson Nash, who started this whole thing years ago, wrote the book on the topic. He was the evangelist of the topic. He was not the pastor of the concept. What I mean by that is, very late in life, he finally trademarks some things, but the horse was already out of the barn, unfortunately.

A lot of people have unfortunately used his awesome mind and heart to promote things like, I’ve seen people who thought they had infinite banking, it turned out they had some jerry-rigged Frankenstein of financial products that were still putting the risk on their shoulders and the costs were mounting and it was going to be taxable in the future. It was a huge mess. A joint venture with Pamela Yellen and Nelson Nash stopped that years ago.

Bank On Yourself was trademarked as a way to quality control this whole thing. Pamela and Nelson saw it happening. They went through and created a training program called the Bank On Yourself Professionals program. It’s almost like the difference between all-natural granola bars and USDA organic. You can still have some really good all-natural granola bars, but if you want to make sure it’s USDA organic, you might want to look at Bank On Yourself Professionals. That’s the distinction. There are all good people and there are bad people on all sides of this. If you want that QC, that’s what you’d look for.

That’s entirely separate from your CFP.

That’s right. We got both for that purpose. Behind all the scenes there, let’s get back in front of the concept. What it is it’s using a modernized form of dividend-paying whole life insurance. It’s usually going to be front-loaded with a massive amount of cash and the minimizing of the commissions allows you to fully fund that policy, so you’ve got money in the first month, the first year, the first couple of years and it’s compounding for you on a guaranteed basis for the rest of your life. This means that you can count on a certain amount of money in the 1st year, 5th year, 10th, 20th, whatever. For every year in between and you know on a minimum basis exactly what your net worth is going to be on a larger basis every single year. That’s awesome. We can stop the show right there.

Especially now, with all the uncertainty that’s going on in all the different markets, stock market inflation, we don’t know what to count on. In and of itself, the whole life policy, these are created with, correct me if I’m wrong, but lower death benefit and higher cash value. Lower commissions upfront, which is probably one reason why there are so many bad policies out there because the agents are incentivized not to set them up correctly, but it’s a pretty slow, boring, stable vehicle in and of itself. Where the magic happens is after you set that up. As a quick example, how does it work? Say you’re working with a client that has $25,000 a year they can put into a whole life policy. How would that work?

Boring is the right word. A lot of folks come to us looking for a little bit of boring after the headlines they’ve been reading lately. You’re right. That’s a good word for it. I never consider this an investment per se. It’s an insurance contract that you put money into. It has a savings component to it that builds significantly. There’s some magic that begins to build over the years, but it’s a long-term deal. I always quickly tell folks, “Don’t just jump into this for getting rich overnight or whatever. It’s more of a get rich for sure.” In that regard, you throw $25,000 into a policy. You’re going to have less than $25,000 in the first year, somewhere between 65% and 80% of your money would be available in year one.

It’s available to borrow against it.

You can access that money. The cash value can either be withdrawn or you can borrow against it. The first piece that I mentioned was it grows guaranteed. The next piece is its accessible money with no taxes due. That $15,000, $20,000, whatever you’ve got in there in the first year, usually you can access it within 30 days and that can be used for any purpose like buying your next car or investing in some basket of notes or whatever you might decide to use it for, sending your kid to college. Life insurance does not get counted on the college forms for financial aid like FAFSA.

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You’ll look as poor as you can on paper. I would say like, “If I had the big fat juicy 529 for my daughter and you had a bunch of whole life policies and nothing else, who do you think the college department is going to offer the scholarships to? It’s going to be you. That’s a key piece to it. When you borrow against these policies and what’s so intriguing to me about this and why I did this for myself and for a lot of our clients, if it’s designed specifically the bank on yourself way, you can borrow against the policy. When the loan is out, the policy grows and compounds as if there was no loan.

I heard of this concept quite a while ago. I did what everyone else does. I google it and realize it’s unnecessarily controversial, in my opinion. I didn’t devote the time to research. I had the time, but it wasn’t a priority. I dismissed it. Some gimmick or something, maybe I came across a Dave Ramsey video or something, not sure, but I dismissed it, unfortunately. When I finally took the time to circle back and read Nelson Nash’s book and actually take the time to let it sink in, it took me a couple of months to understand it. It was not a day or two. The part you mentioned where it’s uninterrupted growth, that’s the aha moment for me because I’ve never done a 401(k) loan, but, correct me if I’m wrong, I don’t think you have uninterrupted growth there. As far as I know, these policies are the only vehicle that operates that way.

Maybe I’ll surprise you, maybe not. I’m sure you know this, but saying it this way surprised me when I first heard it. Every mortgage works exactly like these policies do. You think about it. Let’s say your house is $300,000 or whatever and you have a mortgage for $200,000. You’ve borrowed against that house. The house is still growing as if there was no mortgage. Zillow, whoever, they don’t care that there’s a mortgage.

HELOC would be another great example. You have liquid access to the equity in your home and the home still grows like there was no HELOC on it. Here’s the difference. With a whole life policy loan, you don’t have to repay the loan on any schedule. We recommend that you do. If you never pay off the loan, it’ll just get deducted from your death benefit when you pass away.

With a HELOC, there is at least an interest payment due. Oftentimes, there’s a balloon payment and some other things going on there with the HELOC. Also, banks can take away HELOCs. “What they giveth, they can taketh away.” With policy loans, it’s baked right into the contract. They may not take it away from you. You have first rights to your cash value via the policy loan. To me, that sounds like freedom. What’s that old quote about Mark Twain? He says, “A banker is a fellow who will lend you his umbrella when the sun shines but wants it back as soon as it starts to rain.”

Those are some of the key differences between HELOCs and mortgages. I’ll mention on 401(k) is a lot of folks do come to me and say, “Mark, I can do this in my 401(k).” I say to them, “Let’s think it all the way through.” This blew me away again until I dug into this. I saw 401(k)s as similar to bank on yourself-designed policy loans because when you borrow against your 401(k), they’ll give you 1% or something on that money while you’ve borrowed against it in a cash account or something. Let’s say you’re making some income at your W-2 job and you’ve got a 401(k) and you get a loan against that 401(k) to go invest in real estate or something or just to go to Disney World or whatever you want to do with the money.

Now you’re going to repay that loan according to the 401(k) company’s own schedule. They’re in control of that. They’re the boss of your money in this case, but at least you got your money working for you at the same time and earning a little interest. That’s cool. Are your loan repayments to the 401(k) going to be pre-tax dollars or after-tax? Usually, the paycheck pays back the 401(k) loan. Think about it. There’s an extra $700 leaving your paycheck. After-tax money goes to repay that 401(k) loan.

That’s the first time you’re taxed on that money. Fast forward ten years, whenever you’re in retirement, you’re taking that money out of your 401(k) to spend at the grocery store and you’re taxed again. If you’re in a 25% tax bracket on both situations, there that’s 50% tax on that single dollar. It’s the highest interest rate loan I’m aware of. It’s not my favorite way to get access to capital.

Our example, say I have $25,000 a year. You set up a policy with me. We don’t have to get super specific with the numbers, but just so our readers have a general idea of what this looks like over the first five years, what would that look like?

That’s the worst part of the policy right there. I’d love to talk about that because honestly, if folks can get past the first couple of years, the rest of it is gravy.

Chris and I like to keep it real on the show. People enjoy that because notes aren’t perfect. There’s no perfect asset class as far as investing. Everything has pros and cons. To me, this is one of the downsides to doing this. It’s a little bit expensive up front, not so much to the commissions, but it’s a slow-growth thing. The first five years, how does that look?

I believe in being fully transparent about it too. One, I have to be a fiduciary, but two, I think it’s the right thing to do. Folks go to our podcast, just search Not Your Average Financial Podcast and then How Much Does That Truly Cost? Search that into Google or wherever you’ll find Episode 36 and you’ll see a spreadsheet of all of this. To your point, in the first few years, that’s where you’re overcoming the cost of the policy. In your example, I hate doing numbers, but I’ll try to keep it simple. Folks throw in $25,000. They might have, let’s say, $18,000 of cash value available in the first year within 30 days. That’s $7,000 of expense.

Where did that $7,000 go? It went to go buy a $600,000 death benefit. That costs something. They don’t think you’re going to die, but if you did, that’s a big liability that they got to come up with at the insurance company. They don’t think it’s going to be you, but they know 1 out of 10,000 of us or whatever is going to probably keel over this year. They got to hold some of that money back to cover that eventuality. In the next year, you throw in your next $25,000. Remember you had access to $18,000 and maybe you were doing some deals with that or whatever, but now you’re throwing in your $25,000 and now the cash value grows by $21,000.

That year, it only costs you $4,000. It’s $25,000 minus $21,000. It’s getting more efficient is what I’m trying to get at here. It’s somewhere around the 3rd to the 4th or possibly 5th year. The policy grows faster than you can contribute to it depending on your health. At that point, the insurance company is, in effect, paying you. They’re not writing you a check or anything, but you’re putting in $25,000 and the cash value is increasing by, let’s say, $28,000. At that point, who paid who for that policy?

That’s when things get exciting.

Plus, you’ve got six figures of money that you’ve got sloshing around in your policy. Jamie, is there anything you know of that maybe you deal in that possibly people could be using six figures to maybe invest in?

Maybe mortgage notes. One thing that’s great about this concept, too, specifically for note investors, is ultimately, when you buy a mortgage note, you become the bank. You’re not technically a bank, but you become the lender and you act like a bank. We have readers who are into institutional notes rather and then others who are more into seller financing, but you become the lender. Bank on yourself fits perfectly with note investing, actually. I have a blog post myself as to how you can set this up and fund your note business through yourself, through your infinite banking system. It works synergistically. On the one hand, you’re becoming your own banker. On the other hand, you’re becoming someone else’s banker as a mortgage note investor. I love their concept and how those two things can work together.

Many great folks like Russ and Joey have figured out that this works. The real key here is what Nelson Nash, who again, the grandpappy of this whole thing. He says banking can come back down to the you and me level. There’s a great book out there by David Graeber called Debt: The First 5,000 Years. The history he takes you through in that book is pretty cool straight back from caveman days to now. In his maybe opinion, banking is about as fundamental to human civilization as friendship is. Banking will always exist. The question is, who holds the purse strings? If some banker down the street owns the banking function in your life, you’re out of luck.

Jamie, if you’ve got the banking function covered for yourself, your family, your kids’ college, you’ve also got the business banking thing figured out. If you’ve got the banking function brought back down to the you and me level again, banks are out of luck. What gives me goosebumps is how many marriages can be saved as a result of this? How many years of one’s life are you not working as a slave to pay off those student loans or those credit cards? Can you reclaim 1/10 or 1/3 of your life because you’re not working as a slave for a bank? That’s what we’re doing when we’re paying off our credit cards or my student loans.

It leads me to think like, “Do you think this is for everyone? Is there a segment of the population, maybe banking on yourself, is not for?” Our audience tends to be people who like to take control of their financial future. On some level, I do think that maybe some people are better off socking away money into a 401(k). I do think Dave Ramsey, honestly, not that he cares what I think about him, but I think he’s done a lot of good for people who are heavily in debt and maybe need to get out of debt. You can take that wherever you want, but what would you say to maybe the critics out there? Do you think there are people out there for who this is not for?

The first large group of people, I would say, look elsewhere, are the people who are absolutely necessarily needing a double-digit rate of return in the first year. These policies will bore you to tears. They’re not investments. They’re middle single-digit returns if we do it right. They’re going to improve under this inflationary world that we live in, with dividends being tied indirectly to interest rates.

I still wouldn’t consider this like your high-octane investment pool. Look elsewhere. If you’re needing double-digit returns in the first year, that’s probably the first group. Even if you’re not healthy or if you feel “old” or got too many candles on the cake, you can still own policies and ensure others. I had a guy who had open-heart surgery. He wanted a policy, but he was uninsurable.

I spoke with someone. We were at two note conferences in Florida. It’s a similar thing where this guy was speaking with a major incident on a treadmill. He essentially died and has got some health issues. I know other people who make very good money who have health issues. Sometimes I hear that they stop right there. They say, “I can’t do this banking on yourself thing.” I’m not insurable. Are you saying there is still an option for them?

Yeah, absolutely. This gentleman with the heart attack, I don’t know what happened at the end of that story with that treadmill. I hope he’s recovered.

He recovered. I had a great time hanging out with him at the conference.

You said he essentially died. I’m like, “Was this a ghost?”

A banker is a fellow who will lend you his umbrella when the sun shines but wants it back as soon as it starts to rain. Share on X

He said he died. I wasn’t there, but it’s scary, obviously. He’s had a big health scare. I was looking into this concept. He, at least for now, determined that he can’t do infinite banking because he can’t insure himself.

That is a major misconception I’ve found. This gentleman with the heart attack got a policy on his wife, adult children, and grandchildren. He’s the owner of twelve high cash value policies. Now he’s a pound-on-the-table kind of guy. He gets his whole family around the table at Thanksgiving or whatever and he’s like, “I better never hear you go to the car dealer down the street and get a loan. You come to the bank of mom and dad.” He’s got it figured out that he’s bringing the family banking system, if you will, back to the table. He’s got his whole family participating. They know that they are the eventual beneficiaries.

They’re going to be the contingent owners once he and his wife pass on. They get these massive gifts. Let’s say that they live another 10, 20, 30 years. At that point, the policies will be doing three times their contributions, at least. What kid is going to put money into a 401(k) that could go up or down if they’ve got $10,000 in their pocket and they put it into the policy thirty years in to the policy’s life? It might be doing as much as $30,000 a year of additional cash value. Why would I put money into a 401(k) if I can put it into that? Each person’s going to have their own risk tolerance and goals, but I would say definitely it’s worth a look. I was very skeptical, but it came out to be true.

Let’s say I have health issues and it just doesn’t make sense for me to get the policy on myself. I can get the policy on family members or anyone I have a financial interest in or that I’m financially relying on. Is that how it is?

Financial interest or reliance, yes. That would include business partners as well. I spoke with a client. He’s being courted by a pretty nice small business here in the Chicago land area. They’re a small enough business that they’re like, “What do you want for your retirement bonus?” He said, “Let’s do a 162(a) plan.” They’re like, “What’s that?” It’s the same part of the tax code as the 401(k). It’s just at 162(a) section. It’s executive bonus life insurance. The company, his small business, will pay his premium for him and even double bonus him any taxes due on that premium.

He gets to keep and own the policy. They put a little vesting schedule on there because they want to keep them around a few years. They don’t have to do that, but he has access to the money. He can use it for his real estate or for his kids’ college. He can do anything he wants with it. It’s his money. It’s just a special way, a non-qualified way to incentivize the best employees to stick around in your business. If you’re a business owner reading, that might be a strategy look into, because on top of your SIMPLE IRA or your SEP IRA, look into the 162(a) and give it to your best sales gal or best sales guy or whatever.

The thought crossed my mind that these life insurance companies, most of them, they’re mutual companies that you are a part-owner of technically. They’ve been around since before the IRS was even a thing. We only think of the last ten years. We think 401(k) is the way to go. These policies in these companies have been around since before the IRS since way before the 401(k) was a thing. I’ve heard a podcast with the guy who essentially created the 401(k). I may have heard a couple of podcasts with him. He said that he never intended it to be the solution for retirement.

It was a good idea that just blew up into this huge thing that’s on the default that is somehow our “savings plan” for retirement. It’s not really a savings plan, but we should question things, everything that we’re taught. I love all this stuff. Tell me, what else do you focus on besides the infinite banking and whole life? What other types of products or services do you offer?

Our website LakeGrowth.com goes over everything, our comprehensive plan. I always want to ensure folks know that we never want to be general practitioners. I do believe in being a specialist. We have a handful of strategies that we absolutely think we’re top-notch at and then we can give you input on your investments, your taxes, your estate plan, your business succession strategies, college planning. For that reason, we have a full financial firm and calculators and guidelines and strategies and maybe most importantly, connections to other estate planning attorneys, property and casualty guys or gal. One of the strategies that we’ve been fond of lately is something known as the income maximization strategy.

I want you to imagine, what is all this for, mortgage note investing? Whole life insurance, packing money into a 401(k), what’s it all for? At least part of the answer for a lot of clients that I talked to is, “Mark, even if I run out of money, I never want to run out of my income.” The income for a lot of people is the reason why they’re putting money into a 401(k). It’s the reason why they’re getting all this.

It makes no sense.

I know. You’ve been hearing the stuff with Ted Benna, the Father of the 401(k)s. It was pensions that the 401(k) replaced. Pensions have been around since the Roman Empire. In fact, I went to a museum. I was just there with a buddy because, again, I’m a Bible nerd. There’s this museum in Downtown Chicago. It’s called the Oriental Institute. It’s the largest collection of Mesopotamian archeology in the Western hemisphere. For nerds like me, it’s pretty cool. Alongside all these old clay tablets and other cool mummies and stuff, this annuity contract was on the wall from 365 BC.

Again, Dave Ramsey would be upset at us for talking about this, but annuities work. They really do. Private pensions, that’s what annuities are in essence. If you like the idea of guaranteed predictable income that you cannot outlive, you want to look at modernized annuities. The kind that they don’t keep your money if you pass away. The old kind did. This kind, if you pass away, your family gets the rest. You can still access a good chunk of it, even if you need it for emergencies, whatever.

These new, more modern annuities can provide what we call the income maximization of your retirement. Case in point and then I’ll hush and get your thoughts on this. Let’s say you got $1 million in a 401(k). What do you think is the best research that’ll give you, let’s say, a 90% success rate to get that money to live on for the rest of your life these days? What’s the withdrawal amount? How many dollars should you take out of $1 million?

I know the 4% rule, which is probably not enough.

You actually brought up something most people don’t know about. In the 1990s, they came up with 4%. On $1 million, you’d be able to live on a lavish lifestyle of $40,000. Twenty-five whatever years later, it’s 2.8%. That’s $28,000. $28,000 is how much they’re telling us, Wade Pfau and Michael Blanchett and several other retirement researchers at The American College and at Morningstar. Dr. Wade Pfau among them says, “You should not take more than 2.8% of your money out each year.” This means the millionaire lifestyle is living on $28,000 a year. That’s a 401(k). That means you got to pay taxes on that. $28,000 minus taxes might be, I don’t know, you tell me, $22,000, $23,000 a year.

That’s come down partially because people are living longer.

Living longer, bond rates have fallen, volatility, beta on the market has gone up. That only gives us a 9 out of 10 success. Would you get in an airplane if there was a 9 out of 10 success? Annuities give you three times as much as that most of the time. It depends on the annuity, but you can get three times as much income with a lot less risk because you’re using something called mortality credits, which we don’t have time to get into, but it’s another insurance contract. I believe in this idea of contractual wealth. Bank On Yourself uses contractual wealth, a contract with you and the insurance company. The income maximization strategy uses contractual wealth, not paper wealth, like Wall Street gives you, but contractual wealth, which gives you an absolute guarantee.

Why don’t I take that money that’s in the 401(k) or wherever else I have it and put it back into the whole life policies? Why would I go the annuity route?

401(k) money typically cannot go into life insurance unless you’re funding it after tax. You’d have to take the money out of the 401(k), pay your taxes.

You are saying I can invest in the annuities in my 401(k), but that doesn’t really help with cashflow unless I’m retired. Is that right?

Whenever you’re ready to retire, you flip that switch and it’s a permanent stream of guaranteed income that you want to live.

I hadn’t heard that concept yet.

It’s mind-boggling. My wife and I have several of those annuities. We have several Bank On Yourself-designed policies as well. They work well together. The annuity is like a river of money. The ocean of money is your policy.

That’s one thing I love about the infinite banking or bank on yourself practitioners that I’ve come in touch with, like Russ and Joey and Anthony Faso. I was on their podcast with Cameron, but the people that I’ve dealt with, they practice what they preach. Russ has some 20, 25 policies, if not more. You believe in it if you’re doing it.

You say to your investment advisor, “What do you have in your portfolio?” and sit quietly for a minute and see if he or she even answers the question. If they do, figure it out and then go do that because you’re right, we need to eat what we’re cooking, especially in the financial space.

Everyone either has to get good at planting a seed in the springtime or begging in the fall. Share on X

I know Russ is a former financial advisor. Anthony Faso is maybe a CPA or recovering CPA, he says. I’m just curious why you have kept your CFP designation. It seems like maybe that’s one way that your business is structured slightly differently. Is that fair to say?

That’s right. On a podcast, I can talk all about things I love, but I never give out recommendations over the podcast. Partly, what we do is we follow the CFP process, Certified Financial Planner designations. It’s the right thing to do. Help people through step-by-step and make sure whatever we give them in terms of recommendations is in their best interest.

As we wrap up here, can you think of an example of how you’ve done a good deed through your business or how one of your clients or someone else has benefited through your business?

We keep a lot of our good deeds private under the radar for our personal charity and everything. In the business, it’s a daily thing. In the conversation I had with someone, we helped him. He’d built enough money in his policy. He’d been paying down his mortgage to a certain point and he’d been building up his cash value in the policy. He took a loan from the policy and wiped out the mortgage. I cheered with him on the phone. I said, “Take a picture of that mortgage when you’re throwing it in the fireplace. I want to see that thing burn.” I don’t recommend everyone pay off their mortgage, but he was this kind of guy that wanted to do that. He was proud and happy to do it. It’s a life-changer for him. He can do things now with his cashflow that he couldn’t do before. It’s fun to see that thing happen again, almost on a daily basis.

I say this almost every episode. That’s what I love about real estate notes and small businesses. There are so many ways to approach it. Everyone’s situation is different. It sounds like in your business, you take the time to listen to your clients and actually tailor the solution or the strategy, if you will, to their situation. Everyone has different backgrounds and circumstances and a different future and different goals. You can’t just slap a one size fits all solution onto everybody. That’s good. Lastly, how about a Note and Bolt? It is a piece of wisdom or information for our readers that they may not get in a training seminar or a book.

I have been gobbling up the Jim Rohn library lately. Forgive me if this is one you’ve heard before, but here’s the quote: “Everyone has to get good at planting a seed in the springtime or begging in the fall.”

I had not heard that one. This has been really good. Is there anything else you think we should’ve covered that we haven’t touched on?

Folks, if you love podcasts, check out Not Your Average Financial Podcast. We did an episode on what we’re calling The Periodic Table of Abundance, where we go over the big picture, like what’s the periodic table in your financial life. Are there elements missing? If you don’t have oxygen in your financial life, things are not going to go well for you. We put it all together on one episode with liquidity, business, real estate, and estate planning. It came out as of March 18th, 2022. It’s episode 237. Go to NotYourAverageFinancialPodcast.com if you want to learn more about how to become your own source of financing without taking a bunch of unnecessary risks. There’s a big button there that says request a meeting. If you want to say hi to me for fifteen minutes, we can answer any questions you have.

Your website is LakeGrowth.com.

That’s right. LakeGrowth.com if you want to just learn more about our firm.

A couple of things come to mind. One is I refused to memorize the periodic table when I was in high school. I said, “Isn’t that the point of having the table?” Look at it and refer to it and use it as a tool. That was me being a little stubborn. Secondly, on a serious note, I can relate to this. I’ve done a lot of thinking about my own financial situation, my family’s situation, but I think everyone could maybe take a step back and look at everything as a whole. We’ve done some estate planning. We do notes. We have certain things, but maybe are a little bit disjointed. I liked that approach. I’m going to have to listen to that episode myself. That’s good.

It’s funny that we still tell our kids to memorize all the capitals of all the 50 states when they could just grab the internet anywhere in their pocket or the periodic table. Thank goodness this one’s got twelve elements. That’s all it is so far.

I can probably do that. One per month, maybe.

In fact, that’s what we do. We have a membership site that we’ve put together. Once a month, we go over each of the elements that have helped folks with daily bite-size action items on it. You can get to that through the podcast website as well.

We will have to have you back on, if you have time, Mark. There are so many rabbit holes we could have gone down that we glossed right over. I know there’s a ton of information that you have and that could benefit our readers. I definitely recommend our readers to reach out to you if they think it could benefit them. I appreciate you coming on and hearing your story. We don’t learn this stuff in school. It’s important. Money is not the end goal, but it’s not something we should ignore for sure.

Money’s been around for thousands of years. Whole life insurance has been around for several hundred years, yet they still don’t tell you about it. Why do you think that is? That’s interesting. We sure learn a lot about the stock market. If we’re going to be taught anything in school, I know that I had in fifth grade, they gave me some Coca-Cola stock and clipped it out of the newspaper, but that’s about as much as I learned about money and investing and yet where was all this in our grown-up days? I’m with you on that.

Jamie, mortgage note investing, given that you are now teaching folks this, what could our kids and grandkids possibly see happen in their lifetimes with the kind of information you share on your show? The last call to action for everyone reading, give Jamie and his team a five-star review because you guys do a great job. I’ve read a few of your episodes.

I appreciate that. Thanks a lot for joining us, Mark. Don’t forget to go out and do some good deeds to the readers out there. Take care, everyone.

Important links

• Lake Growth Financial Services
• Bank On Yourself Professionals
• Russ Morgan and Joey Mure – Past Episode
• Episode 36 – Not Your Average Financial Podcast
• Debt: The First 5,000 Years
• The Periodic Table of Abundance – Not Your Average Financial Podcast
• NotYourAverageFinancialPodcast.com

About Mark Willis

Mark Willis, CFP® is a man on a mission to help you think differently about your money, your economy and your future. After graduating with six figures of student loan debt and discovering a way to turn his debt into real wealth as he watched everybody lose their retirement savings and home equity in 2008, he knew that he needed to find a more predictable way to meet his financial objectives and those of his clients.

Mark is a CERTIFIED FINANCIAL PLANNER™, a three-time #1 Best Selling Author and the owner of Lake Growth Financial Services, a financial firm in Chicago, Illinois. Over the years, he has helped hundreds of his clients take back control of their financial future and build their businesses with proven, tax-efficient financial solutions. He specializes in building custom-tailored financial strategies that are unknown to typical stock-jockeys, attorneys, or other financial gurus. As host of the Not Your Average Financial Podcast™, he shares some of his strategies for working with real estate, paying for college without going broke, and creating an income in retirement you will not outlive. Mark works with people who want to grow their wealth in ways that are safe and predictable, to become their own source of financing, and create tax-free income in retirement.