E99: Beating Three Financial Barriers Keeping You From Wealth

In this episode, we break down and discuss three financial barriers that try to keep you from becoming wealthy. We also share how you can put hundreds of thousands of dollars back in your pocket, merely by making a few changes to your financial plan.

In other words, there’s some simple changes and you can immediately start becoming more successful with your money.

Topics Discussed:

  • Identifying and overcoming the insidious “status quo syndrome”
  • How conventional retirement programs (IRAs and 401Ks) keep you in financial status quo
  • The best tools for passive income
  • How passion for your financial wellbeing drives forward movement
  • Keeping control of your money instead of turning your future over to someone else
  • Using systems to build wealth today and generational wealth
  • What it means to think like a banker
  • How banks view money and keep it moving

Episode Resources:

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Podcast transcript for episode 99: Barriers Keeping You From Wealth

Nate: In this episode we will discuss three financial barriers that try to keep you from becoming wealthy. And we’ll also discuss how you can put hundreds of thousands of dollars back in your pocket, simply by making a few changes to your financial plan. She’s Holly and she helps people find financial freedom.

Holly: He’s Nate. He makes sense out of money. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered

Nate: Well, it’s great to be back. And another fun episode today, all of our episodes are fun, but another fun episode today, we’re going to dive into a few financial barriers, a few financial obstacles that we’re kind of put into, or we find ourselves in that certainly try to keep you from becoming wealthy. Now, Holly, we could have named way more than three, but these three, we decided on to keep it nice, easy number, but also because we felt that all three of these things that we’re going to mention today are things that happened to many people. And they’re actually fairly easy to change.

In other words, there’s some simple changes and you can immediately start becoming more successful with your money. I could easily say one barrier to getting wealthy is that you don’t make enough money. If you made more money, you could become wealthy. That’s true, but it can be difficult. I mean, it’s not impossible, but it takes a big change, changing career, starting a new business, expanding your business. Those things are difficult. Not something simple, I guess what I’m trying to say. So we tried to make three things that happen to a lot of us, almost everyone, one of these three and easy ways to get out of it is really what we’re going to focus on.

Holly: The reality is a lot of us always say, “Oh, I wish I had more money.” Or we feel like we’re doing all this hard work. And yet we don’t feel like there’s ever any results of it. And oftentimes that’s because it’s kind of our first point we’re doing what everybody else is doing.

Nate: The first thing that keeps you from becoming wealthy is the status quo syndrome. And if you do what the average person does, you’ll get average results. We know that deep down, I don’t know if we give it enough credit, but what we’ve found through working with thousands of people is that the vast majority of people don’t even really know why they’re doing it. And they don’t have a passion for it. If you develop a passion for what you’re doing in the financial world, you’ll automatically start achieving greater results. We become better at things we’re passionate about. If you are not passionate about building wealth through retirement programs like IRAs and 401k and if you’re not passionate, every time you make a deposit there that is getting you closer to your goal, then you probably are going to limit yourself. You’re just status quo. I’m going to do the average Joe thing, get average Joe results.

And what we’ve found is that things that you can be compassionate about automatically will achieve greater results. So things like we found so many people who stop doing the 401k that they’re not passionate about. And instead they become passionate about the infinite banking concept. And then from that, they become passionate about finding other opportunities in the world of real estate or something like that, where they can start taking advantage of things that they have more control over. And suddenly they start receiving all this passive income, all this compound interest on their policies.

And they start building wealth on a way different trajectory that they didn’t change how much they were saving. They just chose to do the things that they became passionate about and immediately started to achieve greater results.

Holly: The reason why we’re doing it, we fall into the status quo syndrome is because everybody else is doing it. And so because we have that mentality, “Well, everybody else at my work is putting into the 401k. I should put into the 401k.” We never stopped to think, why are we doing that?

Nate: Yeah.

Holly: Like Nate said, often you won’t even know your deposit is going into the 401k. You never see the money, which means you’re definitely not passionate. Because you didn’t even know the money existed. So when the stock goes down or up or you lose thousands of dollars, well, it doesn’t have that much impact. Because you’d really didn’t even know what it was they’re doing and how it was working.

Nate: You have to make sure that what you’re doing with your money, the tools you’re deciding to put your money to work in are actually there to achieve the result that you want. A lot of people don’t understand that the 401k is not really the best tool to produce passive income to live off of, but yet it’s sold as a retirement program. But if you really look at it, it’s horrendous. When you actually decide to retire, the amount of money you can pull out of it is terrible. It’s not very easy to be passionate about stuffing money in the 401k, unless you just love the stock market and you’re working inside the 401k, finding the funds you think, I mean, you can develop somewhat of a passion in there. And I think you’ll do better than the average guy, but it is difficult to really be passionate, which is why you don’t see a lot of people become wealthy because they funded their 401k.

Then you might have a million or $2 million, but ask a guy who retired and he’s got $2 million in his 401k, ask him how much his advisors said he could pull out in income from that. My guess is somewhere between 60 to $80,000 a year for $2 million. You can take that 2 million in a policy and pull way more out in income. Or you put that 2 million in real estate and pull even furthermore out. So you got to make sure that you become passionate about what you’re doing and if you don’t have a passion for it, figure out why. It very well could be that you’re putting your money to work in a place that does not align with your goals, align with your interest. And you’re really just doing it because everyone else’s and your financial life will look like everyone else. If you just do what they do.

Holly: I just want to say the one reason think we’re so passionate about infinite banking and telling you guys continually to find your passion is I wouldn’t have just said, “I want to go do this.” If I wasn’t passionate about it, I wouldn’t do what I do every day. If I didn’t truly enjoy it and watch the growth and change, not just in my life, but other people’s lives. So, that honestly just find what you’re passionate about and what you know you can go out and be excited for when you get up in the morning, if you’re not excited to use the system you have, then there is something missing. And unless you change that, you are just going to keep following the herd and then you’re not going to have anything or you’re not ever going to achieve that wealth you wanted.

Nate: Exactly right. And by the way, one of the things that Nelson Nash would say on this same point, I know we’re going to move on to number two, but just this last little point I guess is, Nelson Nash would say, “Everything…” And he’s the creator of the infinite banking concept that we follow. He would always say that in the financial world, “Everything you do is compared to everyone else.” So wealth is relative. In other words, if you want to become wealthy, what you really mean is I want to have more money than what I’m currently on the trajectory to have, or than other people. It’s pretty easy to become wealthy if you lived in Nigeria or something like that, or in central America. I mean, it’s the amount of money you have today might make you wealthy there.

But what I’m trying to get at is everything is compared to what everyone else is doing. So if you do what everyone else does, yeah. You might end up being coming comfortable, but it’s never really wealthy. You have to break out of your class there, you got to get into the exceptional class. If you really want to achieve what you want to go for it. Because everything is compared to what everyone else is doing. The second point we wanted to make here that keeps you from becoming wealthy is that many of us, we start building wealth. We start putting money away. We do things, but we don’t have a system. We don’t have a vision or a goal to hit or an idea of how much we need. We just start putting money in places. We just hope things work out. And many times hope is not a very good plan.

Holly: It’s kind of like when Nate, I hope that by throwing a little bit extra money into my savings account, every time I have something I’m going to do okay. And I’m going to create wealth when you don’t actually have a system of, “Hey, I’m going to put aside this amount of money into my savings account or my IVC program.” It’s like haphazardly saying, “Okay, I think I’ll just put a couple dollars here this month. And then next month I might put more.” That you don’t get anywhere by having a system. It’s kind of like Ray always says, “Do you want somebody that is going to operate on you that went to med school? Or do you just want somebody off the street that comes in and says, ‘I think I know what these tools are for.'”

There’s a systematic approach. What do you have to do in order to be successful at an operation that a doctor has gone to med school for yet, we are hoping with our money that if we just put it haphazardly here or there we’re going to be wealthy instead of having a system in place, it’s we often talk about the debtor versus the saver. And the one that’s borrowing for a car payment has a systematic approach because he owes somebody money. And the one that pays cash basically saved up for that vehicle. But more often than not, once they pay cash, they don’t pay themselves back. They just are saving for the next item to purchase. But there’s not a system in place to save for that money or to pay it back.

Nate: Yeah. I see that all the time and Ray and I will ask that and I think you will too. At times when we’re meeting with somebody who says, “Man, I paid cash for every car I bought.” That’s great. And why did you do that? He’s like, “I can’t stand payments.” Oh, so you don’t have a payment? No. If I pay cash, I don’t have a payment. Well, when you really look under the hood there, you do have a payment because if you don’t save up money for the next car, then you won’t be able to buy another car or you’ll have to go in debt to get it. So to be able to pay cash for cars, you got to be paying you. You got to be putting money away. The problem is most people don’t have a system. They just happen.

They’re living on less than they make. They end up having enough money to buy the next car in their account, but there was no systematic way of doing it. Man. I’ll tell ya. If you put a system in place, you’ll end up with a better result. If you just do it haphazardly, don’t believe that it’s going to work out better for you. That same thing applies to retirement. I talked to a lot of people in their fifties and sixties. They have some year in mind, I want to retire when I’m 65 or 67 or 60, or I want to retire early and they have these ideas of what they want to accomplish. But there literally is no steps at all. They have no idea where they’re at. They don’t even know if they’re in a good place right now to achieve that.

They don’t know what they need to do to achieve that. They don’t even know what retirement looks like, how much they’ll need. They literally know nothing about where they are and where they need to get to and how to get there. They have no clue, but yet they’re saying, “I want to be able to do this.” And ask them, I help. I say, “We’ve got to create an entire plan to get there. You got to know where you’re at now, how much you need to be saving in what places, how much income you can need to get, to be able to be to do what you want to do. I’ll tell you if you make a plan, it’s probably going to work.” Now, there could be some other variables that keep you, but at least we have a general idea. Hope is not like, “I hope I can retire at age 65.” Based on what? You got to actually focus and make a plan.

And that’s really one thing I love about IBC, Holly, infinite banking. Is that not only is the system good and the participating whole life insurance policies that is used, not only are they good wealth building tools in general, which we talk about all the time and you can ask so many people who are our clients. What we really love about it is that we just to do it you have to adopt a set of principles to live by. And we all know that if you do the things you’re supposed to do with infinite banking, if you pay yourself first, if you borrow money and recapture the money that you borrowed, pay yourself back, that you are going to build wealth. There’s no question about it. Especially when compared to the average, Joe, who’s not doing the things that infinite banking teaches. So I love that it adds structure.

I know exactly what I need to do. When I buy a car, I know exactly how I need to pay myself back to get all the money back. I know how much money I’m going to make on the car. I know how much money I’ll have for the next car. I can just make an easy plan. It just takes minutes. And I know exactly what to do and how I’m going to get the money back and where I’m going to be once the money is all back and so forth. And that is empowering to know and have a plan.

Announcer: Are you still stuck in insecurity and uncertainty? Do you want to feel like a financial genius and confident about your future? Holly and Nate have prepared something exclusively for Dollars, and Nonsense listeners it’s called The Secret Banking Masterclass. You can gain free access to this course by visiting livingwealth.com/secretbanking. That’s secret banking, all one word, the course will share with you how the conventional system stacks the deck against you, and exactly how to break free from their system. We believe in challenging the status quo. We believe in defying conventional wealth tools while maintaining traditional values. After all, most of those conventional tools only ever seem to make someone else on the inner circle rich. Visit livingwealth.com/secretbanking. That’s secret banking, all one word. Ease you worry, and start your journey towards security today. Visit livingwealth.com/secretbanking. Now back to the great episode with Nate and Holly.

Holly: I’m going to go back to the you got to have a plan. I meet with so many people who their plan is the 401k yet, even like with what’s happened right now with COVID, they have this 401k, but yet their plan is I’m going to retire, but I have no idea how much money I’m going to have to live off of. And well, I lost all this much money and I asked, “Well, how much time is that going to take you? How long did it take you to get to that money?” And they were like, “I don’t know.” Or, “How long do you think is going to take you to recover the money you lost?” And they literally have no idea because they don’t know how the plane works. So at least with a system, you know how the plan works, you know what’s going in you know what’s coming out, you can see what is happening as your money grows. And you actually have control of it. Create a system where you actually can control the money.

Nate: So many systems are out there to essentially just give up control of your money? Hey, you really don’t know what to do with this. So give it to us. The 401k is not a plan. It’s, “Give us control of the money for a long time and just hope that there’s enough in there to do what you need to do in retirement and so forth.” It’s very hard to build a plan around a 401k because there’s no structure to it. Whenever you go out and buy a policy, we have a very good idea of how much money we’re going to have at whatever point in time in the future we need to look at. And the same thing goes for real estate. I mean, there’s things that can happen in real estate. There’s renters that don’t pay, unexpected repairs. There’s some things, but those contingencies are prepared for.

If you’re a good real estate investor, looking for cashflow, those are prepared for, we have contingency funds as part of the plan. And so, and that way we know we’ve got a set stream of income and we have cash on the side to cover any shortages or any unexpected expenses or renters that don’t pay or having to have it unrented for a period of time and so forth. So you’re exactly right. Everything that you can make a business plan around essentially is going to be a lot more profitable to you than just hope. So the first one was status quo syndrome. If you’re not passionate about what you’re doing, stop doing it because you won’t be very successful with it. There’s other people who are passionate about other things who are going to make a lot more money than you. It’s a simple fix. Find something to be passionate about and get out of the status quo, get off of the average returns that you can make.

The second one is put in a system. If you don’t have any system, you don’t have any hope. You don’t have any vision. You don’t have any goals to hit. You don’t know how you’re going to get there. Then you really are just setting yourself up for failure. And the last one, Holly, is a sneaky one. It affects almost all of us, but we may not exactly realize it. This affects almost everybody. And that is having idle money, having money that is not doing anything. And that can be in many different places. I mean the most common, the one that we see is people afraid of the stock market. They don’t really know what to do until they’ve got a lot of money in cash in a bank account or something like that because it makes them feel good and it’s nice to have cash.

But the problem is, and we’ve done this before in an emergency fund podcast. If you build up $50,000 in cash in an emergency fund, as opposed to let’s say, putting that money to work, let’s say in a policy which can meet that same goal. That’s worth probably close to $200,000 over time. So, we’re talking about $150,000 of what is known as opportunity costs just from that. But it’s not just cash either. It’s also, there’s so many people who say, “Man, I’ve been putting money in this IRA, this 401k, but it just doesn’t seem to go anywhere. It goes up and it goes down and it goes sideways and there’s some fees in it. And I know I’m going to pay taxes in the future on it. And so I don’t think I’m actually getting ahead at all.”

So in a sense the average person is leaving hundreds of thousands of dollars on the table. Just simply having money in places that are doing nothing and the rich, they don’t sit around on money doing nothing. That’s the biggest problem. A corporation, they don’t want to sit on money. You don’t want to have money just sitting around doing nothing.

Holly: The reality is that that same money that is in a life insurance policy. Number one is growing tax free for you. Everything that’s sitting in your bank accounts idle money. If it’s in a money market account, a CD, a savings account, you’re still paying taxes and fees on that money in some way, it’s your money that you’re still paying to use, number one. For any growth, you get taxed on it. But number two, with the policy, at least if something happens to you, there’s not just the emergency fund of the cash. There’s also the death benefit that is more than what the cash brings in. And so I think that we often miss understand the fact of, “Oh, I’m just going to keep throwing money in a bank account. And then I’ve got all this money stored and it’s not yielding any good rate of return. I’m paying taxes on it. And then I don’t even know what to do with it.” You’ve saved the money. You’ve got the idle money, but then you have no system to put in place to use the money. If you want to.

Nate: It’s pretty easy to fall into that trap because we feel like, “Oh, I’m saving up money. I’m doing things.” But we always have to see the opportunity costs missed by having idle money can become huge over a lifetime, huge money, hundreds of thousands, maybe millions of dollars from people who have inefficient use of their money and various places. And that is a huge prohibitor for a lot of people because there’s really only two ways to make money. It’s either people at work or your money at work. It’s the only two ways. You can go work or your money can work.

If you’re having money that’s just really not working, it’s just sitting around. It’s lazy money. Then you just got to work. You’ve got to keep on working for a long time. We got to have as much money as possible earning for us at all times in order to get to the point where our money can work for us even faster and infinite banking plays a great role in that, because every dollar can work, even when we borrow against it, it can still work and earn money for us. It’s very powerful in this way to help get item money out. But if you do have money sitting around and bank accounts, if you do have it sitting around in some sort of mutual fund or savings plan, that’s just not going anywhere, it’s costing you more than you think because it’s not only is it not growing, but on a compound interest curve, the longer it sits there, the more money you miss out on.

And that’s why we say easily a couple hundred thousand dollars the average person is missing out on following the conventional advice of build up emergency funds and savings accounts and checking accounts and go into target date mutual funds that really suck and way underperformed the market and with fees in them and so forth. You just don’t get ahead. I mean, all these things that just mathematically are keeping you down. It’s time to get rid of the idle money and help get rid of that barrier and start becoming wealthy.

Holly: And think like a banker. We say this a lot, but banks are in the money business. They want your money. Banks don’t leave idle money sitting in a vault. Okay. Money is always in motion. On the same hand. When Nate talks about making the money work, right. You’re working or your money’s working well, if you could do both, you’re going to be even better off because you don’t want that idle money sitting there. The bank doesn’t let money sit. Why are you sitting there letting your money sit? You want to keep that in motion. You want to keep it working for you all the time, 24/7, just like the banks are doing 365 days a year. So if a bank wouldn’t let idle money set, then ask yourself, “Why are you letting that money sit in a bank if a bank wouldn’t do it and they’re in the money business?”

Nate: And assign your idle money a real cost. What’s amazing to me is it’s not free to get a banking policy. There’s real costs to getting involved. Now, obviously we’re doing it to make money. So we ended up making a lot. But what I’m saying is what most people don’t see is they say, “Well, my checking account is free. I don’t have a fee on it.” Or my saving accounts free, it doesn’t cost anything to put it in. No, it really does. It does cost you money. There’s a real economic cost to having idle money. It exists. And so every dollar that you have that’s not doing anything is actually costing you money, real money. Every economist would say, “Yep. having capital that is not doing anything is missing out on opportunity costs. And that’s a real cost. It’s not pretend.” And so banks understand this.

And we had a banker in one of our workshops and we asked him, “How does the bank view money?” And he posed us a question. He said, “What is the most expensive money we have?” What he said was it’s the money in the teller’s drawer and the cashier’s drawer. That’s the only money they can’t move that they can’t earn anything on. That’s the most expensive money that a bank has. Because it’s the only money that can’t be put to work. People need to adopt that. What is your most expensive money? Chances are it’s the money sitting in the bank that’s doing nothing for you. There’s a real cost and a real economic cost to having idle money and over a lifetime, it can become huge.

Holly: There are many things we can do that will not make you wealthy. We just focused on three that we thought were essential. I think you have to overcome, or even get your money in motion I want to say in order to do that, and like Nate said the number one status quo syndrome, you’ll never be successful without passion. If you have no system in place paying cash for everything, you don’t have a system, you’ve got to save up for the next thing. And then idol money. Is your money just sitting there doing absolutely nothing?

Nate: Yeah. Those are three barriers many of us have or have had. And then they’re actually fairly easy to change. They’re very easy to get off track and start a new track. With that being said, this is Dollars and Nonsense. If you follow the herd, you will get slaughtered.

Holly: For free transcripts and resources. Please visit livingwealth.com/e99.

Announcer: Dollars and Nonsense podcast listeners, one more thing before you go. Ease your worry and start your journey towards security today. Visit livingwealth.com/secretbanking. You’ll gain instant free access to the special one-hour course holly and Nate made for you. Again, that’s livingwealth.com/secretbanking.