E104: How to Determine the Best Way to Invest Your Money

In this episode, we discussed and share our insights into the common question, “what is the best thing I can do with my money?”

All of us want to be good stewards of our money and want our money to be working hard for us. But in the financial world, there is no one-size-fits-all strategy.

Everyone wants to figure this out; it’s a huge question and concern for most of us. Today, we dive in to share our experience and insight.

Determine the Best Way to Invest Your Money Topics:

  • 401ks, the good, the bad, and the ugly
  • IRAs and how they can benefit you or fail you
  • The stock market
  • Dispelling and breaking down the one-size-fits-all financial strategy (one-size-fits-no-one well)
  • How to determine what you really want your money to do for you
  • How policies can fit into your strategy and when they make sense
  • The level of control various strategies afford you
  • Comparing and contrasting the level liquid (i.e., easily accessible) of different options
  • Making more work more than one job for you
  • When infinite banking adds up for you

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Podcast transcript for episode 104: Best Way to Invest Your Money

Nate: In this episode, we discussed the question, what is the best thing I can do with my money? All of us want to be good stewards of our money and want our money to be working hard for us. But in the financial world, there is no one-size-fits-all strategy, so today Holly and I are going to share some ideas that can help you discover the truth about what you should be doing with your money. 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: All right, well, welcome back to the show, everyone. We’re so pleased to have you here. And once again, it really does help us get this message out to the world if you would spend just five seconds and write a review or give us a five-star rating or something, it just helps boost our listenership and viewership to get this out to more people.

But today, Holly and I are going to tackle a topic. We’ve hit hinted at it before in other episodes, but today we’re going to dive in and really discuss a question that I think is on everyone’s mind, that many people ask calling me about, and it comes up in different ways I think. This question of, what is the best thing for me to do with my money? Everyone wants to figure that out. That’s a huge question. That’s a huge concern for everyone. The question is, Holly, what is the best thing to do with that money? Let’s start off, where does this even come from? What are the ways that people can even be asking this question, whether they realize it or not?

Holly: I think they ask it with, should I get started with this? Should I keep investing in my 401k? Should I take this money and put it in the stock market? It’s all different ways of that same question being asked. But in reality, what they really are wanting to know is, what is the best place for my money, even if that’s not the words they’re using, Nate.

Nate: I think so. I think you’re right. I think that is the question financially, what should I be doing? And you’re right. I think the most common way it shows up in our business when we’re talking with our clients is really, “Hey, Nate, should I stop contributing to my 401k or I should I keep contributing? Or would it be better for me to just put money into policy instead of retirement program? Should I even take money out of retirement programs, go do something else with it? What should I be doing with money? What’s the best thing I can do? I want to make sure I’m doing the best thing.”

I think there’s good news and there’s bad news with that. I mean, as far as how we’re going to answer this question. Because the good news is that I think you can discover it. The bad news is it might not be simple to figure out. There might be some complexities there, and that’s why there is no one-size-fits-all strategy in the financial world. There’s not just one thing that everyone could do that would be best for everyone. That just doesn’t exist in the financial world because people want their money to do different things. Not everyone wants their money to do exactly the same thing, and not everyone has the same strengths and weaknesses as each other.

To discover what’s the best thing for you to do, that’s what Holly and I are going to try to uncover today. Asking some questions, giving some ideas and thoughts to help you figure out what is the best.

Holly: And I want to caveat that with, we might not hit on what you think is the best, but that’s what Nate said. There isn’t a simple solution or simple answer to say, everybody should be doing this, because everybody’s life is different as well. And so because our lives are different, it’s how we use that money and what we want to be able to do with that money that is how you can determine what you want to do. Nate and I often say whatever you’re going to put your money into and use for, you need to be passionate about that. Don’t just do it because somebody told you it was a good idea.

Nate: Exactly right, and we can throw out some examples really quick just to get an idea of what we’re talking about. If you come to me and say, “Hey, Nate, should I keep putting money into my 401k?” I’m going to say, “Well, that depends. It depends. What do you want your money to do?”

And so if you come to me and you say, “Nate, we’re putting some money into our 401k, but we also have $30,000 of credit card debt. Well, we’re paying 20% interest on it,” what do you think my answer is going to be? I don’t think your 401k’s rate of return is going to be 20%. I really don’t. I think you would actually make more money, you in your specific situation, I don’t think it’s wise to keep throwing money into the 401k while you’re still paying the credit card company, outrageous interest rates. I don’t think that’s a good idea.

But if you were in a different position and you asked me, “Hey, Nate, should I put my money in 401k? I don’t have any debt or I don’t have that?” It’s still not an easy answer because the question is, what else could you do and what do you want the money to do? As Holly and I have talked about before, you’ve got to figure out the end game for you. What do you want your money to do?

Holly, may be right now, what we could do is just say, here’s why we have chosen Infinite Banking and then we can kind of compare and contrast that to some other things. You can get a vibe for really what we mean by this. The reason why I put such a vast majority of my money and overall wealth that I’ve built into policies through this Infinite Banking concept is because I decided, and I didn’t just decide this because I’m an idiot, I decided that the things that Infinite Banking allows me to do are what I want my money to be doing.

And I’ve looked at other things and I said, “Well, those things sound good, they sound nice, but they just don’t fit what I want.” The things that I really love about Infinite Banking is I want to be in control of my money. I don’t like giving up control of it. I’ve been pitched investment ideas where you got to let money sit and someone else manages it and works with it, and you’re hoping that they do a good job with it. I don’t like that. I don’t like being put in the position where my success is 100% based completely on some other guy putting the money to work.

I love the control of the policy. I love how it grows guaranteed every year no matter what. That I’m going to be wealthier than I was the year before. I love how the money can be used twice. I can put money into a policy and borrow against it to go do other things, which I love to do. I love how all of my money can be working for me at all times because I can keep all my money in a policy. Because it’s liquid, it’s available to me, so I don’t have to keep money stashed on the side in an emergency fund or something like that to be liquid. All my money is accessible to me at any time whenever I want it to.

I love the fact that there’s a legacy aspect. That even if I was to die early, my family is going to get a huge check, can be taken care of generationally. All these things I’ve decided, you know what, this is what I want. This is what I want my money to do. And also last thing, I mean, I love the fact that I don’t have to pay taxes on it, on any of it, and I can use it the whole time. That’s just Infinite Banking in a nutshell, Holly. But what I’m saying is I’ve decided, for me, this is what I want. And I assume yours is similar, Holly.

Holly: Mine is very similar, Nate. And I’m going to say, it’s not just about the control of the money. For me, it was that I knew if something happened to me, the legacy part of it would still benefit my family. But also on the same hand, the way we had put the money in there, they’re not going to be taxed on it. And, what we owe, we owe to ourselves.

And I think the power of that is I know I’m never going to foreclose on myself, on my house. I’m never going to come and take my car away, but we’ve been able to use that money and pay it back in the future. And we are the bank. And I guess once you see the power of being your bank and controlling your money and the growth that happens, it’s a weight off your shoulder instead of living paycheck to paycheck wondering if what I’m doing is okay.

The future dollars are the weakest we’re going to have. Like you said, I want to use those dollars today. I want to use it for multiple things, and the ability to be able to do that and the freedom to do it and not have to go through a conventional bank to borrow money, to take money. I just know that if I put it in a 401k or I put it in a savings account or a mutual fund, like you said, it has to sit there. Somebody else is controlling it. Somebody else is working with it, and yet I can put it in my policy and then take it back out and use it for something else.

The biggest key is that your money does more than one thing. It doesn’t just have to be in a policy. I think that that’s what a lot of people miss is, okay, I want to start the system, but what about the 401k? What about the stock market? What about this? And not realizing your dollar can do more than one thing in this system.

Nate: Yeah, that’s a great point. And that kind of plays into, what do you want your money to be able to do? You’re exactly right. Holly, you’ve decided this is what I want my money to do and this is what I like about it. Once you’ve found this sweet spot… This is what I hope everyone who’s listening to this, I don’t care if you do the Infinite Banking concept or not, and you can go do whatever else do you want to do. I just want you to find the sweet spot for your own self. What are you just excited about? You’re putting your money in something and you just love it. You just love what it’s giving you, you just love what it’s producing, you love the idea behind it, you love the principles behind it, and you’re just passionate about it, that’s the sweet spot for you.

And it doesn’t have to be Infinite Banking, but we find that a lot of people, when they taste and see this Infinite Banking concept, they don’t really want to get rid of it. I mean, they don’t want to jump out. It’s like, this is a lifelong concept that you just grow and love with. All the things it offers are things that most people do want, whether they thought about it or not.

But Holly, I think a lot of people are concerned. You know, what’s going to produce the highest rate of return. I think that’s a lot of what comes into this question. What they’re really asking is, “Hey, Nate, I see this, I see the value of the policy. I see all of these things. I see how you’re using it. And it sounds creative, it sounds exciting, it sounds like it’ll work. But the question is, does it really produce more money for me doing the banking strategy, living my life that way? Or does it make more sense for me just to put money in retirement programs and my 401k and my IRA? Which one’s going to actually produce more wealth?”

And once again, it’s going to be impossible to come up with an objective answer for that, because none of us can tell the future. And if you can tell the future, you don’t need me. You’re going to be doing really well by yourself. It’s a question once again, we don’t know. And it comes back to this, Holly, too, that there is not one investment that’s better than another. The stock market is not better than a policy. A policy’s not better than the stock market. The stock market’s not better than real estate, bridge loans.

In other words, there’s all these different opportunities out there, one of them is not objectively better than the other. The question is, what do you want your money to be doing? And what are your strengths? In other words, if you’re comparing the stock market and real estate, you have to ask yourself, which one of these is going to produce what I want? The stock market doesn’t produce very good cash flow. I mean, maybe if you’re trading, but you’ve got to be good at it. That’s what I’m saying, if you’re not good at it, it’s going to suck for you and it’s not going to produce any cash flow. But if you just want to let it sit for a long time, well, yeah, I mean, it can do that. Hopefully it produces, appreciates in value and you earn some money.

But if what you really want is to get steady checks for the rest of your life, well, maybe buying some rental properties is better. Do you know what the rate of return is before you get it? No, you may have an idea. But at the end of the day, you need to decide this is what I want to achieve with my money and I’m going to align where I’m putting in to give me that end game. And there’s not one that is better than another. It just depends on, once again, where you’re at.

If you’re in 20% credit card debt, that’s a great place for money to go. Especially if you put into a policy first and then pull it out to take out the credit card debt. Now you can kill two birds with one stone. But as far as where the money should go, it’s going to be different depending on the person, their strengths and what they actually want to have their money accomplishing. That’s where you find the sweet spot.

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 secretbanking, 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 secretbanking, all one word. Ease your worry and start your journey toward security today. Visit livingwealth.com/secretbanking. Now, back to the great episode with Nate and Holly.

Holly: I had a client ask me, “Should I put this cash into my policy, yesterday? Or should I put it into a mutual fund?” Right? And the reality is, is I was like, “Well, what do you know about mutual funds versus what do you know about your policy?”

The reason she wanted to do it was, “Hey, somebody told me mutual funds are making really good rate of return,” right? And I said, “But what do you know about the mutual fund?” “Nothing. I don’t know anything. I just, somebody told me to do it,” right? My suggestion is, are you doing it because it is, like Nate said, you’re passionate about that?

I have another client. He likes playing in the stock market. Great. He has his set amount of money he enjoys playing in the stock market. That’s his money he plays with, right? But he actually put it into a policy first and now he’s playing with it.

The answer is, it’s not that you can’t do both. You could do both, but you do have to find something that you’re passionate about and how much risk you want to take, or is it for passive income and what is it for? Like Nate said, if you’re trying to create passive income or retirement income in the future that you know you’re going to get X amount of dollars, it probably isn’t just putting it in the stock market.

Nate: I think some people think that we’re anti-stock market, and we might be, okay. I don’t really have any money in there. I know Holly doesn’t have any money in there. We’re not really interested in putting money in there.

Holly: I’m not anti-stock market. I don’t know enough about it, Nate, number one.

Nate: And I don’t want to. I don’t care it, yeah.

Holly: And number two, I don’t care. I don’t want to have the yo-yo effect of up and down every day. That’s really my bottom line. I don’t want to have to feel like a yo-yo with my money and what’s going on.

Nate: Yeah, I like to have the feeling that the money I have is actually there and is real. With the stock market, you have this value on a statement and it’s there right then. And then the next statement it’s completely changed dramatically up or down and so forth. And it’s like, you never really feel that it’s real. It’s a valuation of a snapshot in time, and the only way to make it real is to sell it. I prefer to deal with things that are a little bit more real.

I’m not exactly anti-stock market. What we are anti is just doing what everyone else is doing without having thought it through. As you already said, I also have clients that invest in the stock market and they love it. That’s their sweet spot. They love to trade. They love to play with the money. They love to think what stock is going to take off and they love the thrill of that. And I’m all for it. Go for it. That sounds great.

Now, of course, we can show you how to use the banking concept to accelerate that and produce more profit. But regardless, we’re not going to try to compare, should you use a policy and stop doing that? That would be foolish. We could show you how to use a policy to help you do that, but we would never… For you personally, I feel like you’re in your sweet spot whenever you’re doing what you do best and what you like to do. And so for them, the stock market is probably better than buying real estate.

But for those who don’t want to spend the time it takes to get good at picking stocks and trading, then maybe the market’s not the best for them. Maybe what you would actually rather want is guaranteed growth on a tax-free basis with all the money available to you at all times. Be able to do things like go on vacation, pay off debt, purchase properties, invest in the opportunities that come your way, buy cars, and never have to go to a bank again. Maybe all of that. Well, what the Infinite Banking offers is exactly what you’ve always wanted. You’re like, that’s what I want and I just didn’t know that it was there.

When you come to me and ask me, “Hey Nate, should I stop contribute to the 401k so I can do a policy or invest more [inaudible 00:17:26]?” Once again, I wish I could answer objectively. I can say I personally don’t, for these reasons. Do you also want those reasons in your life? If so, then that probably mean you don’t. My reasons don’t have to be yours. My goals and objectives, what I want money to do, does not have to be yours.

You need to come up with what you want. And then you can come to me and say, “Hey, Nate, can Infinite Banking make me help me achieve this?” And that can be a yes or no answer at the end of the day. Most of the time, it’s a yes, because it is a strategy where money can do more than one thing. That’s what we’re teaching. That’s why we think it’s so powerful. Regardless, you need to decide that first, and that will help guide every decision you make.

I think if you have that clarity, this is what I want, then you know how to go get it. Otherwise, you’re just letting your ears get tickled by rates of return and all these sorts of things. You’re just jumping into investments, hoping that they work out, having no idea if it really is but just because a buddy said he’s earning a high rate of return. That’s when you lose money and you hate it, and you’re not in your sweet spot and you’re not successful. And you just feel discouraged.

Get out of that. Figure out what you want. There’s a lot of ways to make money in this world. Find out what your goals are, what you actually want your money to be doing, and then accomplish that with reckless abandon. Go for it. Get serious about it. Get passionate about it.

Holly: We’ve said this before, the Infinite Banking concept is a system that goes into place. It’s not the end all be all. It’s the system that you put in place to be able to use it to do different things. And when you’re looking at comparing your life insurance policy to what you can make in the stock market or this or that, your life insurance policy is not the investment, okay? It is the system you’re putting in place. And so it’s really not a rate of return question. Yes, there’s guaranteed rates. Yes, it grows tax free. All the things that Nate and I love about it allows us the freedom to be able to use our money for how we want to use it and how we want to create future dollars or money today.

But the reality is when you’re asking us which is better because this might yield a higher rate of return, you’re really asking the wrong question. It really goes back to exactly what Nate said, what do you want to create and what investments are you passionate about or things you want to do? If somebody comes up to you and wants you to invest in oil and you really like that, then great go for it. But if that’s not something you have any interest in, just don’t go jump in because somebody else told you to do it or it’s the best thing you’ve heard. Or this person just gave you a really great opportunity, you got to get in now. You really have to be interested and passionate about what you want to do, like Nate said, with that reckless abandonment. If you are really excited about this and that’s what you really enjoy doing, then go for it. But if you don’t have any desire for that, then don’t just go invest in something because somebody else told you it was a good opportunity and you should do it.

Nate: Exactly. Investigate it. Increase your financial IQ. any deal that you got to make right now or in the next couple of days or before the window closes, just avoid those. There’s more horror stories than there are success stories in that type of world. It’s not that we don’t want you to take advantage of opportunities. We just want you to become wiser financially. And that we think that Infinite Banking allows you to do that because you’re earning a steady, guaranteed growth that’s always going to be there. You don’t have to feel this pressure to go put your money to work in things to earn some yield or some return. Because as you know, this money sitting around doing relatively nothing is not a good stewardship.

That’s why we said there are some things that I honestly do feel are objectively better than others. I think it is objectively better to use a policy as your main banking tool, as opposed to a checking or savings account at a bank. I think it’s objectively better to use a policy as your emergency fund than to build up an emergency fund at a bank. I think there are certain things that are just truly objectively better. They’re going to be better because of the system behind it.

But there are many things in the financial world that are very subjective. You can’t tell for sure how things are going to turn out or whether it’s going to be best for you. And partly because you don’t know what opportunities are going to come your way. So you have one opportunity now, you asked me, “Is this a good opportunity?” Well, maybe, but also there may be one that comes six months from now that would have been better if you’d had the money.

In other words, just make sure that it’s aligning with what you want your money to do, and then opportunities will come your way. They will. Once you have an idea of what you want to accomplish. You’ll start to see things. You’ll become better at it. Once you have a vision for what you want your money to do, things just start to fall in line. And there’s opportunities that come your way that you can take advantage of that will produce good results. And even if they go South, you don’t feel terrible about it because it fit in that sweet spot. And you’re like, “Yeah, we win some, we lose some, but at least I’m doing what I want to be doing.”

What really sucks is if you’re out of your sweet spot. You’re just chasing returns and getting your ears tickled by people saying this is the next best thing, and then those lose money and you never really knew why you should be doing anyway. You just took somebody’s word for it. When you’re operating out of your sweet spot, every loss is way more dramatic. You feel way worse and you feel lucky when it works out. In other words, you got to take the luck out of the equation, you got to take disappointment. Just have a system. That’s what we believe in. Infinite Banking is a system that works very well to achieve the things that it sets out to achieve. That’s what we love about it.

Holly: It gives you so much freedom. I think that’s the one thing that you’ll walk away with is a freedom or peace of mind of knowing that it’s there. And for me, Nate, it’s that cash you get to use. But it’s also, I’ve never seen another system or product where I get to use that cash that I put and it’s still earns interest tax free, but I also am guaranteed a death benefit should something happen. I think that both of those work hand in hand, the death benefit is a bonus, I like to say, but you get both.

Nate: And it does so many jobs for you, as we’ve already talked about, including the death benefit job that we don’t even mention too much. But you need to figure out what you want your money to be doing at the end of the day and that will point you in the right direction about what you should do. Without further ado, this has been Dollars and Nonsense. If you follow the herd, you will get slaughtered.

Holly: For free transcripts and resources, please visit livingwealth.com/e104.

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.