E122: How to Find Genuine Financial Certainty and Crush Sneaky Wealth Destroyers

Nate: In this episode, we discuss the power of certainty in your finances and how important it is to limit the external factors seeking to destroy your future. 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 this week’s show. We’ve talked about this before Holly, the concept we’re going to bring up today in various ways, but it’s just becoming more and more apparent to me as I live my life. I practice IBC. I look for other opportunities to invest and do things financially that there’s this value of being in control or this value of certainty in your financial life that most people don’t have that I do. And I think it puts me in a position to be ahead of the game. Because I’m practicing infinite banking, I have a huge amount of certainty of what my future is going to look like no matter what happens and other people don’t have that. So, I mean, we just really wanted to discuss how we operate with certainty and really maybe just encourage those who are looking to do IBC, or was already doing it to realize what they actually have. The power that they have through this process.

Holly: It’s not just the process, but once it become part of your life, it sets a foundation, a solid foundation, really for the future and what you can see happening in the future. And it’s not based on such volatility of, is it going to go up and down and up and down, but really to be able to see your plan for the future and know that because you have these tools, because you have this IBC concept and you implemented it into your life, it actually allows for a lot more freedom. And even in a way, flexibility to do things that if it’s not in a solid foundation or something that’s more volatile or just goes up and down, and it depends on the way the economy’s working and how the world’s going, that you don’t have that certainty. And I think that certainty that you have with IBC is really what brings such peace and that solid foundation.

Nate: Yeah, exactly. So I mean, the difference between certainty, uncertainty and uncertainty is mainly whenever you are doing things that you expect something to occur for you, but you have no control over it and you have no idea if it’s actually going to come true. Like, “Yeah, I think it’s going to work. I think I’m doing the right thing, but I don’t know. I’m uncertain if it’s actually the right thing. And I don’t really know if it’s going to pan out.” Whereas certainty’s obviously the opposite of that. I mean, in certainties, I know it’s A plus B equals C every time, right? That’s what certainty is. Certainty is I push this button and this thing happens and it does every time. Uncertainty is, A plus B sometimes equals C. Sometimes it doesn’t, I don’t know. I don’t think people see their life this way, or especially financially that there is so much uncertainty. The entire financial environment that most people find themselves in when they’re trying to invest and save for the future is based on uncertainties.

They think they might be saving enough for retirement, but it actually has nothing to do with them. It has to do with all these external factors of which they control nothing. So they’re not sure. And I think I have enough money to last until the day I die in retirement and it won’t run out, but I don’t know because it’s based on uncertainty. So what I’ve found Holly, the presence of risk is the presence of uncertainty. They’re one and the same.

Holly: I like that.

Nate: If you’re uncertain about it, that means there’s risks. The risk is the presence of uncertainty. Uncertainty is here and I have to deal with that and I don’t know what’s going to pan out. And so suddenly I’m going to take a risk and hope it pans out, I think is going to be okay for me. I think this investment is going to work well. So the presence of risk is equal to the presence of uncertainty and the more uncertainty, the more the risk that’s involved. So as you said, Holly, when we were talking about this, typically the number one indicator of your lack of certainty, of your lack of control over things is found in a lack of peace that you probably have about the situation you’re in. I agree with you there, absolutely, that lack of peace is a huge byproduct of building your life upon uncertainty as your main financial foundation.

Holly: It’s that lack of peace, as well as the fact that there are things we do with our money or when we’re thinking of planning for the future and stuff. But oftentimes even when we do that, we don’t always know the rules, right? We don’t always know the game that we’re playing or how we’re supposed to play it. We just know that if everybody else is doing it, maybe it’s a good thing. And in reality, we don’t necessarily have that piece about even doing it, but because everybody else is doing it, we just go along with it.

Nate: Yeah, you’re right. And maybe that makes us feel good. That’s the herd mentality. “It feels pretty safe in here.” But you know, the herd’s going to the slaughter house. So I don’t know how safe you should really feel just because the herd’s doing it.

Holly: We think we have peace because there’s a safety in numbers when that’s not always true.

Nate: That’s true. Yeah. You’re exactly right. And so one thing that we’ve noticed, that’s quite obvious, and if you boil down, practicing the infinite banking concept to one benefit, what is objective of it? I really found that it all comes back to control and certainty. I mean, “What’s the one thing about IBC, Nate, that you just can’t live without now that you’ve tasted it?” And I’m like, “Oh, it’s got to be the certainty behind it, the control behind it.” And I found that the more certainty I have of the future, the more control I have of the outcome as well. So if I’m certain that A plus B equals C, that’s a true fact. In other words, if I pay this premium into this policy, it’s going to produce X amount of cash value and I’m certain of it.

That’s a lot different than if I deposit X amount into the stock market, into my mutual funds, C can be a huge range of things from zero to a billion. I mean, you have no idea. You have no idea what it is, but so the math… You don’t really feel certain about what the future’s going to hold, which means you don’t really have any control over your success. Someone else has control over your success. And that’s what we love about IBC is that you’re the main controller of your success. In fact, IBC, [inaudible 00:07:07] even making concept starts as part of its system. Remember IBC is a process, not a product.

And the beginning of the infinite banking concept starts a discussion on personal responsibility. Part of being an IBC or being someone who practice infinite banking is, I am committing to managing my money in a certain way. And the nice thing is, A plus B equals C in that environment. If I do these things, I will get this result. And there’s nothing outside of me that’s going to change this. And that’s what we love. That’s what we love about it. The onus is on you. The onus is not on somebody else or some money manager or the stock market or the economy or tax rates or anything like that, which we may talk about. The onus is on you. And if you do what you’re supposed to do, if you follow the rules, wallah, you’re guaranteed to be successful, that’s awesome.

Holly: You are no longer dependent on somebody else to tell you what to do and how to do it. You actually are given the proper tools, the proper rules, the explanation so that you own this a hundred percent. It’s you controlling your money and in a way controlling your life, but you have to be willing to follow the rules. If you’re not willing to follow the rules, you won’t have success.

Nate: We had talked about this too, a little bit, Holly, there are specific rules simply to make, which is pay yourself first. That’s rule number one, that’s what we mean by personal responsibility. That means to live on less than you make. Rule number two is, pay yourself back with interest when you use your own money to finance the things of life. And rule number three is to focus on recapturing money that used to walk out the door and recycling money. And we don’t really have time to go into all of these three, but all we know is that if you do these three rules, you win. There’s no way around it. A plus B equals C. You follow these rules as closely as you can, and you are guaranteed success. The problem with the regular financial environment is there are rules actually. They’re just unspoken.

And they’re off in the ether somewhere, floating around where you get this vibe that I’m supposed to be doing certain things. And if I don’t, things may not work out for me, but I don’t know what those things are. So even if you follow the rules… I talk to clients like this all the time. They say, “I felt like I was doing everything right, but here I am. And I’m in this bad financial shape. I thought I was doing everything right.” That’s because first off they’re unspoken. We don’t really know what the rules are. And even if you follow the rules, you may not actually be successful because there’s no certainty. I mean, my dad had invested money in the stock market through this retirement program.

For 20 years, he was a part of this deal. And what he thought he was going to have, and what he actually ended up having was a huge difference. Partly because the return that he received was not even close to what he thought he was going to get, or what was pitched to him when he bought into the mutual fund and everything like that. But his shortfall was huge. And all I had to say, I mean, I’ve seen that myself, but it’s the lack of certainty that most people live their life by that causes the biggest problems. And the biggest hurts as well. The biggest emotional pain. You can’t go back in time. If you’re 65 and you’ve made the decisions you’re going to make to get you to here, it’s hard to pivot that ship. And suddenly you realize, “Wow, my entire financial life is built on something that is not a steady foundation. And I may not have enough. And there’s no way for me to know. Time will tell. And it has nothing to do with me.”

That’s a scary place and a lot of people are finding themselves in that. And they’re searching. That’s why infinite banking is becoming so popular. Like, “Wow, this seems like the way out of this uncertain lifestyle.”

Holly: Because it’s uncertain because you don’t know the rules. You really don’t know how to play the game. And we say this a lot of times, because most of the time, because you don’t know the rules, you don’t know how to play the game to be successful at making that money. But there’s also that risk and uncertainty, but on the same hand, because we don’t know the rules, we actually have turned over our controller power to somebody else to manage that money or to create that wealth for us. And you and I say this all the time, the only time you typically lose money or lose is when you lose control of that money and you thought somebody else could do better with it than you could. And if you are able to be in control of your money and you’ve implemented the system, the unspoken rules don’t exist.

You know exactly what you’re supposed to do and how to do it. There’s a lot more certainty when you know the path or the trail you’re on, like following a GPS to get you where you want to go. Instead of just blindly saying, “I think I’m supposed to turn up here somewhere, but I’m not sure if I’m supposed to go left or right.”

Nate: Yeah. That’s exactly right. That’s exactly right. And it’s not to say that we are against all form of investments that come with certain risks and certain uncertainties. That’s not true. What we are for though, is there’s a truth in here that you can get more certainty, even in things that would typically be uncertain to someone else. You can get more certainty through your experience and education, which is, I think what you were going to a little bit there, Holly? Education is the way out. So that’s why we talk about investing in the stock market is more uncertain for the average Joe investor, who has no idea what’s going on than it is for the investor who does it for a living like the institutional investors and different things.

They understand the game better. That does not take away all uncertainty. They still get blindsided all the time. They still mess up. They still do things wrong, but there’s just less uncertainty there. And honestly, the uncertainty is defined, I would believe. In other words, the better you get at investing in certain assets and on the other side of things, any uncertainty that exists, you understand fully what it’s going to be. That’s the problem I find with a lot of people who are just chasing rates of return, hoping to find assets that pay out high rates of return and things like that. They don’t really understand the game. So they don’t know what’s at risk. They just hear the rates of return. And they’re like, “Okay, that sounds really nice. I’m going to go throw some money in there.”

And they don’t understand fully what the uncertainty is. And so what I’m trying to say is uncertainty can go by the wayside to some degree. You’re never going to be able to control everything in that type of investment, but uncertainty can start to decrease, the more you understand about it, the more experience you’ve had in it and any uncertainty that remains is understood, which can help level expectations. And you don’t get blinded. The worst stories are when people are like, “I had no idea that this could happen to my money and then suddenly voila, I lost my money.”

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: And there’s so many people that that’s happened to Nate. They really trusted the program that they were putting their money into for retirement or for the future. And they trusted it. And yet they didn’t know the rules, and it ended up exploding or imploding on them. And they had very little or nothing left to show for it. And we’ve talked about this, because of that uncertainty, you want to have a system in place that actually gives you that peace, that gives you that certainty, that allows you to make those decisions. Should you, like we said, investing, we’re not saying you don’t invest at all, but what we’re saying is put a system in place first that you know. You can see the guarantees or you can see the growth taking place. And even if you invest, there’s still a system in place that allowed you to control your money.

Nate: Exactly, right. Yeah. Absolutely. Education is expensive they say. It’s not that it’s even a big deal to lose money. It’s just, you want to understand what’s at risk. Where the uncertainties lie so you don’t get blindsided. There’s some people who are more entrepreneurial, more risk oriented. And so they’ll put money into things that other people would be scared of. And that’s fine. As long as they understand the risk. What you don’t like is uncertainty that you don’t understand. A lot of people don’t understand what uncertainty they’re accepting, what risk they’re accepting when they choose to plow money into tax deferred programs like 401Ks and IRAs and things like that, where the benefit, the tax benefit is pushed down the road. And they don’t really know the uncertainty there, except what they’re accepting is the fact that tax rates might go up.

They have no control over what the tax rates are going to be. They don’t control inflation and how much money is actually going to be worth then. And so they’re putting money into a tax deferred program to reduce taxes today. But in exchange for that, they’re accepting a high tax bill in the future. They just don’t know what it is. It’s uncertainty. And many times we just don’t even realize that we get so focused on the, “Okay. If I put money in here, I get to defer the tax into the future. That means I can save some money from not paying uncle Sam as much and have it be in this program. And hopefully it earns a good return. And when I retire, I hope I’m in a lower tax bracket.” Once again, that is not a certainty. A lot of people are finding their retiring and their taxes are not any less than they used to be.

In fact, it could be more and the amount of money that they think they have. They just look at this big number in their 401K log-in or statements or something like that, a million dollars, $2 million. That sounds great. Not all that’s yours. It belongs to uncle Sam and he decides how much he’s going to take. And it can change with the stroke of a pen, how much is actually yours and how much is his. It’s okay to accept that uncertainty, if you feel like it’s going to work on you, it’s okay. Just you have to come into it, knowing that that’s the case, because there’s ways to do it where that’s not the case. So the certainty that I love about my policies is that due to life insurance, I can access the money through a policy loan tax-free at any time and can essentially draw income from it, with no tax.

I have to pay the tax today. I don’t get to deduct my premiums, but I don’t have to pay the tax in the future when I’m drawing money out or anytime in between. That is a level of certainty that I feel puts me in control of the future. It’s like, “Okay, I know what tax rates are today. They’re today. I know what they are. I’m okay paying that and in exchange I’m going to get tax-free growth in the future. And if I choose to do it the other way, it may work out for me. I might be in a lower tax bracket later, but the level of uncertainty makes me uncomfortable. So I choose not to. I don’t like the lack of peace that that brings.

Holly: And it’s that piece, Nate, that is key with the future we don’t know. You truly don’t know if you’re going to be in a lower tax bracket. You don’t know. You don’t know what the tax rate is going to be. You don’t know how much your money is going to grow or how much you’re going to lose. There’s so many uncertainties you could go with in retirement programs that there’s not a clear answer to. And I think that’s what you have to start asking yourself is like we said, education is expensive. How much education do you want it to cost you in order to gain peace of mind and security and be in control of your money in your life. Because if you can control your money, really, you are able to really be able to control a lot of different areas of your life and the future, because you’re, irregardless of what the taxes are in the future, Nate, we know we’re going to have something there.

We’re not like, “Oh, I hope I have maybe half of it, maybe I’ll have half of it. Oh, well I might only have 40% of it.” Well, we don’t even know what we will have. So when you’re looking at that large number in their retirement program, and you don’t honestly know how much you’re going to have access to, that’s a big uncertainty.

Nate: It feels like a gamble. That’s what it feels like, because we just hope the stock market’s going to keep going up. And it’s true. It may work out for you. It may be awesome. But that level of uncertainty is the risk. The risk is, “Oh, it might not.” And what are you going to do if it doesn’t? There’s nothing to fall back on. You’re already there. You already at 65, you’re already at 70 and you trust in something that didn’t pan out. And now you’re stuck. There’s a value to the certainty. There’s a value to the certainty. And you even see that in the rule of life insurance policies, by the way. We do a specific one that works really well. And we can talk about that. And you can listen to the podcast to talk about how this works for IBC, but there’s these things called universal life policies and indexed universal life policies and these different things where the life insurance companies have created these monstrosities and these deformations of what they should be creating.

And the whole goal of those policies is to produce more uncertainty for the client in exchange for the possibility that it might perform better than the tried and true. If that makes sense? And with an IUL policy, there’s so many moving parts of which the company is in full control over all of them and they can change them whether you want them to or not to your detriment. And you’ll look down the road and you have no idea how much… There’s no guaranteed cash value in existence. If they followed the guaranteed schedule, it would guarantee to implode at some point. All I’m saying is you’re accepting a lot of uncertainty in these types of policies if you purchase them, in exchange for the possibility that if the stock market does really well, your policy might end up with more cash value than a traditional participating whole life insurance policy.

And no one understands the uncertainty they’re accepting when they open those. Nobody understands it. I’ve talked to a lot of people who bought universal life and they had no idea what they’re actually getting themselves into. That’s a problem. The whole purpose of infinite banking and IBC is to bring certainty to your life and to bring a firm foundation of control of your money and a process that’s guaranteed to work. And then from that, you can branch out and choose to take risks in the various things that you want to. And the policy itself, the tool that we’re using to practice banking was not supposed to be the uncertainty. It was not supposed to have that with it. 

And so that’s what we find with universal life policies though, while on paper they may look good. Or on the paper you might like some of the features, at the end of the day, you’re giving up certainty in exchange for possibility. You’re taking the risk with it. It could wind down to nothing. You lose all your money you’ve ever put in. You could end up losing money in other ways, they could change the expense factors. All this to say, there’s a lot of moving parts in those. You have to really study the contract to even understand what you have. Obviously, most people don’t. So they don’t know what they’ve got. They don’t know what the uncertainty is. They don’t really know how to work with it.

And that’s a shame, even in our… Some people are trying to do that with IBC. They’re trying to use them. Go for it, I guess. It’s just why build your foundation on another tool that’s uncertain? That’s what we’re trying to escape from.

Holly: And sometimes it’s this instant gratification. “Oh, I think this is so much better because right here, right now today, it feels, or it looks better than looking at it long-term.” And they might be great for right now when you just get started. But down the road, there’s all these unspoken rules that go with those as well. And you can blow it up and have nothing just because you thought you did something wise, or it was that, “Oh, look at how much I was able to gain right now.” And you have to look at this as a plan that is not just for today, but for tomorrow and in the future. So irregardless of what you do, you have to have a plan in place that provides peace and certainty, not just today, but also in the future, because only two things are going to happen, Nate.

We’re going to live or we’re going to die. Really. That’s the reality. But do you want to live this life with peace and certainty knowing what can happen in the future? Or do you want to go through life, waking up and reliving the Groundhog day over and over again? Or if you don’t live it over and over again, you just make a different decision and really, you don’t know what that decision’s going to do 10 years down the road, 20 years, 30 years. There’s so many people that I hear, “Hey, we put it all in our retirement program because we believed in that system.” And they’re retired and they have very little or nothing to live on because of what’s happened in our economy today in the last 10, 15 years. And so because of that, they worked their lives somewhere and don’t have anything to shell of.

Nate: “I’ve talked to so many. I thought I was doing everything right. I felt like I was doing everything. I thought so.” But because you were putting your money only in places that produce uncertainty that incorporate some sort of risk, there’s external factors that can completely determine your success or your failure. There’s very little in life that you have total control over. In fact, there may be nothing in life that you actually have 100% total control over. But the goal would be to limit uncertainty as much as possible. That’s just a good way to live life. The more certainty you can have, the more you can understand about what you’re doing, the more you understand about the risk, the more you understand about your future, the better your life will be. Just period. I don’t know of pretty much any other system in the entire universe that provides the amount of certainty that infinite banking provides.

It’s the only place in the financial world where A plus B still equals C, every time. It’s impossible to blow it up if you do what you’re supposed to do. If you do A plus B, you will get C and there’s nothing you can do to stop that. And that might be the only place left in the universe financially, that allows for that type of thing to happen. That’s one of the things that if we boil it down to, this is one thing I’ll never take for granted anymore. Because I was thinking, “What about IBC could you just never live without now?” And it has to be the certainty. I don’t want to go back to the old way of doing things where my entire success is based on external factors. Not that I’m afraid to take risks by itself. It just, I’m going to take calculated risk.

I don’t want to have what’s called systemic risk, which is just a risk I’m accepting and I have no control over and I haven’t calculated it. And it’s just a thing that I’m going to live with. All that to say, there’s a value to certainty and we need to understand what that value is to really appreciate what infinite banking offers.

Holly: And with that certainty, what trickles down in your life is peace, really peace, and the ability to plan for the future. And I would not trade IBC for anything, just for the peace it’s brought into my own life and to my family’s life. Just knowing that this is a system we can use and be successful at and be able to know what we’re going to have in the future, not just today, but what we’ll have tomorrow.

Nate: And when we got a game plan to implement that has success practically guaranteed as close as you can get. And for those of you who are listening, who haven’t started IBC, what are you waiting for? Just come join us. The Kool-Aid is great. We can drink around the fire and enjoy it together. But all that being said, 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/e122.

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.