E58: Ray Poteet on How to Build and Leave Wealth

Ray Poteet joins us to share strategies and tactics for building and leaving a legacy of wealth. A must listen for any parents, grandparents, and expecting grandparents who are wanting to build and leave wealth.

If you’re a new listener, Ray Poteet is the founder of Living Wealth and author of The Tree of Wealth. Join us as he draws on and shares his vast experience in teaching future generations about money and helping them achieve financial significance.


Build and Leave Wealth Topics Discussed:

  • Lessons learned on teaching the next generation about money
  • Teaching by example
  • The ease with which you can get sidetracked and how to find your way back
  • How IBC works for grandparents wanting to build and leave wealth
  • Using policies to protect an estate between generations
  • How keeping and recirculating money in the family helps you never to lose control


Get the transcript here

Episode Takeaways:

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Transcript for Episode 58: Ray Poteet on How to Build and Leave Wealth

Nate: In this episode we interview our mentor and the founder of Living Wealth, Ray Poteet as he passes on wisdom, teaching parents and grandparents how to build wealth the next generation. 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: Welcome to the show again, Ray. It’s great to have you back and I know the audience is always looking forward to hearing from you when we get a chance to interview you, so. Welcome back to the show!

Ray: Thank you very much. It’s totally a privilege.

Nate: You know Holly and I are excited. We’ve heard you speak many times. Whether it’s in a workshop or webinars, or whatever it is on. What you’ve done for your kids, and your grand kids with wealth and with raising them up with the wealth mentality, teaching them the principles, and everything like that.

So we wanted to give you an opportunity here to share with our audience some of the advice that you may have and wisdom you may have from going through it. Feel free to mention some mistakes as well as some of the pluses.

How has Infinite Banking kind of helped you I think in teaching, and in raising of your grand kids and your kids, to build wealth? Was there a difference for when you learned about IBC and how you went about things with them as opposed to before IBC?

Ray: No. There was a change I think prior to IBC. I did no teaching, I just did something for them and at some point in time I say I’ll hand this over to them. They really were unaware of what I’d done, when I did it, or anything. But when IBC became a part and it’s actually your wife was one that got me involved with it. She read Nelson’s book and she said, “Well, why shouldn’t I put my whole paycheck into the policy, Nate?” She just read it once. I think she was 12 or 13. She wasn’t that old but she read the book and she got it just like that. She had it from that point on. She … it didn’t matter how it worked, she just like … it was her bank. And I could put my money in my bank.

To get that across to a young age I think is amazing. To be able to live it and then let them catch it because kids really catch. It might be easy to teach we say your father. Not real easy, they imitate us. You know, to sit down and try to teach them on principle, that I believe is more difficult.

Nate: Yeah, you can tell them you know it’s important to save, it’s important to think about the future, it’s important to do all these things, but if you personally don’t and they can see that, I think you’re absolutely right. But it’s not going to be relayed. Actions speak way louder than words to kids.

Ray: Kids are … under God’s eyes we’re all kids. I mean I had an example yesterday of a lady that called and wanted to do more with her program. And I looked at her GPS, and it said, “0, 0, 0, 0.” She didn’t know, I mean … she had taken a vacation with her entire family to Greece. They had … went on another ski trip. They had bought a couple of cars, and she says, “Why can’t I do more?” And I was thinking, “Wow.” And she said, “Could we attack her house mortgage.”

It was really neat as we shared she was really getting excited about all the things that she had done that we had shared with her. I didn’t realize it was that many. She’d been working more closely with Paul. And she says, “And I wanna come to your workshops. I wanna learn how to do more. I wanna do this.”

It’s sorta like … I was watching your son last night picking up glass pieces and putting em back in the bucket. I asked Daniel what he’s doing, and he says, “I’m cleaning up.” And so they imitate and will do that. And I think if we can get it with money because they’re really no classes on money. We see it, we get it, we have it, but we have not really been taught, or I was not taught. Even though I was into the industry, did marketing, had all the designations after my name … there was no real classes on money. Started learning about it from Nelson and really got into it with Rabbi Lapin. And one of the things that he says that I would really like to emphasize, “Jews do not have a money gene. But they do know the rules on money. And if you know the rules and follow the rules, it comes automatically.”

Nate: I think we’ll get to that in a moment. I might ask you a question on-

Ray: Okay.

Nate: The rules, for sure, and how that can … IBC can help with that. But I was curious … I’ve heard you talk … for those who have kids and grand kids who listen to this … what have you done for them? And for you know maybe give some ideas for other parents to model both … mainly with the policies and what you’re thinking of taking place there?

Ray: With my children, because they’re all in their 40s and I learned about Infinite Banking right when they were 30, I actually put a $30,000 dollar policy on each one of my daughters. And funded it the way we told people to do and I’m still funding it. Have borrowed a couple $100,000 dollars from each one of them. If I were to turn those policies over to em today, the funding is $12,000 dollars.

Nate: So you started at 30 … and the pay of addition drive for those who know a little bit of the details about IBC who are listening. [inaudible 00:06:15] dropped off, so now they’re paying just the-

Ray: The 12, the base.

Nate: The 12. The base premium on it.

Ray: That’s correct … I’m paying it.

Nate: Or you’re paying it right now … still paying it.

Ray: I’m still paying it right now. But if I were to turn those over … they’re making 85%. They’re- [crosstalk 00:06:31]

Nate: With the 12, or 20- [crosstalk 00:06:33]

Ray: Last year, 23 that’s coming-

Nate: In growth?

Ray: Yeah, so it’d be over 100% before they’re 15 years old. That seems strange but that’s 15 years that’ve flown by. I mean just flown by. I can still remember 2004 and that seemed like eons ago. Holly wanted to make sure she got married before she was 30. And she made it by a few days.

I think now that what I gave them for their wedding … and I used Infinite Banking and she got the … more money, almost twice as much as her older sister, but not nearly as much as her twin sister … and I thought it was a fortune back then. And I look back and it wasn’t, but it was very profitable.

Paying for a wedding I think as a parent … and you have daughters … it’s always something you wanna do and up until I knew about banking it was something I dred.

Nate: They have this vision of this glamorous wedding and you wanna give it to them, but you don’t want the price tag so you- You’re torn and you’re stressed out. It’s changed since IBC … for some things I’ve purchased that normally would have been a dred.

Ray: You grow up and you have kids and you happen to have daughters and you know by the tradition the parent of the daughter is to pay for the wedding. And God didn’t give me any sons, He just gave me daughters. So I said, “Well I’ve got three of em.” And I did pay for three of them and I can say they got more elaborate and easier to fund, and happier to fund as they got married, you know from the first one to the last one. If I could put that joy into parents’ hearts to know that this is something that they wanna do and not be fearful of it. A matter of fact, we had a very good friend who allowed his wife and daughter to fly to New York to get her wedding dress, you know and try em out and various things. And he says that the only reason he was comfortable in doing that is he knew that it wasn’t gonna cost him anything, that he was gonna recapture the money.

Nate: ‘Cause he had the system?

Ray: Yes. And he’s using it.

Nate: And he’s using it?

Ray: Very effectively. Very, very effectively. Probably as much as anyone we’ve worked with. He’s on it on a daily basis. I’m maybe every other day, or every third day. I’m not on it every day like he is, you know.

Nate: And then your grand kids, Ray-

Ray: Yeah.

Nate: So you’ve got policies on your kids. Is that the only one you’ve got on-[crosstalk 00:09:07]

Ray: No. I’ve got … actually I’ve got four policies on each one of my children. Four policies on each one of my grandchildren and just one policy on each one of the great grand kids. But it’s as substantial as the four policies is on the grandchildren.

Nate: Yeah, I noticed just from the time I’ve been here, the policies you use to buy were … you were still getting smaller ones and it’s only been … we talk to clients about this. Holly and I do and I’m sure, you know about just getting started.

Ray: Right.

Nate: And it is true I’ve seen with clients, I’ve seen it in your life, I’ve seen it in my life … the policies do seem to get bigger. There’s just a level of comfort that increases in Infinite Banking that I don’t think is anywhere else, as you go … desperately wanting more ’cause there’s no risk to it and there’s freedom in it.

Ray: I think the other thing is that you really discover a lot of money that you didn’t feel comfortable in spending previously, that once you understand the system that you’re just recycling it.

I’ll give you a great example. This morning I was in my car, got outta the car, come into the office … it just hit me … before I spend any money … and I was thinking about spending quite an amount of money … oh, I’ll put that through the policy. What are you thinking of? I came in, I ran to … I didn’t run, I got to the computer, I brought up Truth Concepts, did some calculations. And if I did it the way I was thinking-

Nate: Just paying, paying for it’s … without having like a policy-[crosstalk 00:10:40]

Ray: Paying it off [crosstalk 00:10:41] without … it would have been in six figures, what it would have cost. And I believe it was only God, the Holy Ghost that says, “There’s a better way to do this. You know it. Why don’t you do it. You teach it.” And yet, here I am an individual that is very active with the system that got side tracked, and-

Nate: Yeah, it’s easy to do-

Ray: And it’s easy to do. Very easy in the world we live in. So, anything you can do … prompting of the Holy Spirit and God’s grace that I didn’t follow through with it.

Nate: You’ve seen what the policies that have been around for a little while do.

Ray: Oh yeah.

Nate: I mean having done this for 17 years … you know IBC. You know you’re at the stage now where you’re still doing more policies partly because the old policies you’re just seeing how effective they’ve become. And that’s when I wanted to give you an opportunity to say about to on … as a parent being able to buy policies on children and grandchildren so that they can start. As you’ve mentioned if you were to give the policies to your daughters already, those first ones … and they’re almost doubling the premium each time you make a deposit. Who wouldn’t want that? And then the grand kids could even be on a larger … so you’ve seen that happen and that helps you and I think you even had … wanted to mention, you know-

Ray: I do. Yeah.

Nate: What you have done for your grand kids and where those stand.

Ray: Well these are some that I started on the same date for all three of Holly’s girls. They were zero, one and two, you know when I started them. At that time, maybe my thinking or whatever, but this is nine years ago. These policies are nine years old now, okay. That I thought $10 dollars a day, $300 dollars a month was a lot of money. And so I started these programs on all three of these grandchildren and they were the largest grandchildren policies that I had started at that time. No problem with them, you know. Paid em, paid em annually.

Ray: Not only did I start the three children, I started one on Holly and one on her husband, Charlie at the same time too. So it was a whole family that I started at that time. And I’ve been paying em and it was through these policies in a dream I had that we changed things. These are setup the old way, in the 40/60 split … you know what I’m talking about. But the new way would even be better. But I’m now paying these annually and let me just explain. 40% of $300 is $120. $120 x 12 is $1440 a year. And that is what I’m paying in annual premium on these-[crosstalk 00:13:27]

Nate: On those three policies on your grand kids?

Ray: On these three policies right now. I did this because I knew you’d asked me to be a part of this podcast and I pulled em up and this is true of all three policies regardless of the kids’ ages. This last year they grew $2693 dollars, on a $1400 dollar contribution. That is a $1221 dollar growth on $1400 dollars, which is 74%. Now that’s the way I think. Wow! 74% on $1200 dollars immediately. And what I said was, ‘Well why didn’t I do $600 a month? Or $700 a month?”

Nate: Right.

Ray: I mean that’s … you’ve heard me say that. But I wanted you to also know that when these kids … when they’re 20 years old this policy grows by $5401 dollars.

Nate: Wow.

Ray: I’m going, “Wow!” That’s exactly what my wife said and you know … and let’s just say that things are normal. They buy a used car for $25,000. That car can be paid for, from the growth on this policy in the normal five year period. And they have the car and they’ve got their money and I’m going, “I don’t think as a grandparent … and I pray that I’ve thwarted it into my children, but I hope that I get the opportunity to sit down with them and share with them my thoughts. When they go to get that car or they buy a graduation present, or they get an engagement ring … all the things that I hope I get to see them do.

Ray: I wasn’t fortunate enough, or have the income to buy my bride an engagement ring. Now I think back about some of the things that people have struggled. I mean I remember Charlie and coming up with money and how hard it was for him to let go of Holly’s engagement ring and various things. And that you can just … not that you shouldn’t do that, but that money is a tool and if you understand how to use that tool properly it brings an ease to you rather than a stress. It brings a comfort, not to be ‘know it all’ or be above it, but that you’ve learned how to use this tool just as you see a good athlete using his tools, his athleticism in the sport, or you watch someone who’s a good engineer, or a good artist.

Ray: That’s what my prayer, my hope, my desire is for the clients and people we work with is we’ll teach em how to be Picassos with banking that they can draw with and bring out their dreams and things. And that we are used as coaches and mentors to help em get there … to move faster, more efficient. And the only difference is they know the rules.

Holly: Now, for some parents out there … even grandparents, a lot of questions I get asked is, “How are we able to buy a policy on our grandchild or even a great grandchild because we’re not the parents. So why can we do it and how is that possible?” Can you tell us a story you might have?

Ray: Well I’ve got a number of stories, but I think the one you’re looking for is on our latest great grandchild, Daniel. I was third in line because at this point the parents, who the father sitting in the room, they got the first choice of policies. And then the grandparents got the second choice. And of course I was at the tail end as the great-grandparent. Those parents and grandparents bought larger policies than I started with on our children and then of course then I wanted to buy a larger, as large a policy on that child. And the insurance company really didn’t see the reason that a child just born would need 3 million dollars of life insurance on him. [crosstalk 00:17:29]

Nate: Of life insurance.

Ray: And I agree with him. What I did is the president of the company I was able to work with … I know personally, he’s a grandparent. He’s not a great-grandparent, but he’s a grandparent. And I just called him and asked him, “What’s the greatest gift you could give a grandchild?” He said, “Well life insurance policy.” And I said, “Well you company isn’t allowing me to do that with my great-grandchild.” He said, “I’ll make it happen.”
Ray: And he did. I pray that when I give this to Daniel, or my wife gives it to Daniel, or Nate gives it to Daniel, when it’s passed down to him that he will see the value of it for what we wanted it to be. I’m confident he’ll know how to use it. And if he doesn’t use it right, I just will tell him the hounds of Heaven will haunt him when he gets there. And you know because-

Nate: True.

Ray: This tool, if used properly, can fulfill dreams that we only dreamed about and become a reality rather than a vision that doesn’t take place.

Nate: You had one client … and I’ve heard you mention this. Where you also kinda had to get the president of the company involved. Where that he had a fairly large estate-

Ray: Huge.

Nate: And wanted to make sure that the second generation wouldn’t gobble up all the money.

Ray: Right.

Nate: And he wanted the money to pass down to the third generation. So, correct me if I’m wrong, what he did was actually had … gifted money to his grand kids that was used to buy policies on the parents.

Ray: That’s correct.

Nate: That way when the parents died the death benefit would automatically be passed to the third generation and there was no way that the second generation could mess with those because they didn’t own the policies on them. And so it was a way to guarantee a generational transfer too.

Ray: Yes. That parent had seen one of its children blow through a huge amount of money, in the seven figures. And his concern was his grandchildren’s … he guaranteed them an estate is the way he said it.

Nate: Right.

Ray: So it had never been done according … I mean I’d been in my class and everything. It’s being taught now because this gentleman thought of it. The insurance company didn’t think of it. And he is still real pleased with that, and is still gifting money to his grandchildren to not only buy a policy on one parent, bought em on both parents.

Nate: Right. Yeah.

Ray: So he didn’t care which way he wanted to guarantee that his grandchildren would have an estate.

Nate: An observation from me is we kinda maybe wrap things up a little bit here was … what we wanted to kinda mention what the rules of money that you mentioned that the Jews have been raised up knowing … and Rabbi Lapin now on the podcast has taught about sort of the ten commandments of making money and things like that.
Nate: With that being said, one observation I’ve had that has helped I think in your family, and all of us learn from is that in banking as you’ve built up large policies and been able to lend money to your kids and myself and grand kids and so forth and had us repay you for it as a banking tool. To me it’s modeled how money’s suppose to work and that how that it really modeled the banking practice. So instead of getting into the spending mode like I feel like a lot of American is in, whereas, my money I can spend it to more of a banker’s chair where we actually see ourselves as the banker and we always repay where we’ve taken the money from.

Nate: I think that’s been a great way to model and I thought that would be a good thing to mention for the audience. As well as, they’re trying to incorporate their kids and their grand kids and it potentially have you be the bank for them a few times and they will certainly get into that flow of, “Hey we’ll use a policy to get money. We’ll repay it. Even if it’s on mom and dad’s and it’s their policy. That way when it does happen hopefully that flow will transfer to the method, the rules of money will transfer too.

Ray: And it does. I’ll mention two things. One, my oldest daughter was first one we started with, so we started with a house. But that sounds a little strange but it didn’t, it was a $200,000 dollar house. And we’d been doing that since 2001 and this last year 2018 because of the value of that account, it is on my account but they have full access to it. With my permission, she bought a very valuable, or very expensive car with it because she saw that the money she had put in was growing and that there was plenty there and it hadn’t been wasted away. And she picked the repayment on the car and everything and that’s going back in the policy again. So it’s just multiplying, going larger.

Ray: What I saw in my own life was that by being able to teach the children, grandchildren that we keep the money in the family and that it recirculates within the family the same way it would in a conventional bank that we never lose control of it or the amount of it. And the tax regrowth is now becoming quite substantial so we can do some unusual things in the way of gifting houses and things like that. That again we had never dreamed of.

I had the privilege of just loaning a church a huge sum of money just with that concept in mind that I’ll get it all back even though I’m actually paying a loan on it through my donations. They were sort of amazed and I’m not amazed. I’ve done that now with about seven, eight charities and it seemed like they’d get a line and wanna know if there’s anymore coming like that. Which is good, you know. You love working with ministries that out there to serve mankind. And that’s what God’s allowed me to do.

Nate: That’s great.

Ray: I would say that they know that they’re gonna get every penny back. And I can tell you when I learned that and went and did my own homework and found out how much money I could have had that I didn’t have, because I didn’t know the rules. I owned a product but I didn’t know how to use it. It’s sorta like having a computer with Excel and Word and PowerPoint all on it but you don’t know the program so what good did it do ya?

Nate: Yeah.

Ray: None. I had that with life insurance. I was paying big premiums and no one had taken the time to tell me how to use it properly. And I was just blown away. I’m still blown away even when I looked at this policy yesterday and the policies I’ve had. I’m sorta say, “I’m glad I got em. My girls will have em.” This is … you know if you really stop and think about it, it’s about $3 dollars a day which by the time they start using it, it’ll be a can of pop or something, a bottle of water. And it’d be better for us to put in here and then go buy the water because what’ll happen-

Nate: Then $10 dollars-[crosstalk 00:24:48]

Ray: Then go buy two bottles … they can buy one for their friend-
Nate: Yeah.

Ray: For their friend for the same amount. I am absolutely blessed and privileged to work with you and Holly. But also to work with every person that God’s brought to Living Wealth and share this truth with. And hope that we can put it in a word, a document … some form … podcast that we can get the point across that there is a dream that can be filled. There is hope where there was none. That the promises that God made are, “Yes!” And “Amen.” And that we can help show that in the area of money.

Nate: And we do and it’s through your mentorship. So it’s been great to have you on this show and I hope those listening got something that they can take home with and they’ll model after. And actually for those who are listening, next podcast we’re gonna bring Ray back on again and have him discuss some of his history and some of the mistakes that he’s made that have kinda brought him to where he is. Hopefully have you guys not make the same mistakes.

Announcer: This has been another episode of Dollars and Nonsense. If you follow the herd, you will be slaughtered. For free transcripts and resources, please visit LivingWealth.com/e58