Using The Infinite Banking Structure To Invest In Real Estate With Lesley Batson

 

How do you leverage the infinite banking structure for investment profit? Our guest in this episode will show you how! Lesley Batson of Rebel Rock Wealth joins Lisa Hylton as they tackle infinite banking, and it is strategic to use as an investment tool. Lesley discusses the pros and cons of infinite banking and why it is an investment strategy you should consider. If you’re looking to leverage your life insurance as an investment asset, then you must listen in. 

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Using The Infinite Banking Structure To Invest In Real Estate With Lesley Batson 

I have Lesley Batson on the show. She launched Rebel Rock Wealth, a strategic financial consulting firm to teach independent thinking professionals, investors and small business owners the whole truth about money. She helps them implement strategies to design, control and build the wealth they desire. She’s licensed in several states and serves clients across the country. She loves Hamilton the musical, playing golf, downhill skiing and taking up space on sandy hot beaches. I love to have you here. Welcome to the show, Lesley.  

Thank you so much, Lisa. I’m glad I could be here.  

I’m super excited to have you on. One of the things I realized when I was reading your bio is you’re a strategic financial consulting firm. We’re going to get into that in the show about some of the ways and strategic financial work that you do helps real estate investors. I know people reading are probably like, “How does this connect to real estate?” We’re getting there, don’t worry. Everyone knows the show is broken into three parts. We’re going to get into the background, the meat of the episode, and then wrap things up with the level-up questions. To kick things off, can you tell us where in the US do you live? 

I reside in sunny Orlando, Florida. I’m originally from Toronto, Canada. I came to the States for school on a track scholarship. I lived in Chicago for a while. I got sick of the cold and I made my way to Florida. I’ve been here ever since. 

I didn’t realize that you’re from Canada originally.  

Born and raised.  

What do you like to do for fun? I did rattle off some of the things that you like to do. Please feel free to share again. 

It probably seems like, “How is that possible? She likes the beach and she likes to ski?” I do like both. I like to be active. I love golf, travel and family. I love being around funny, happy and positive people. I like to do things that put me in that space. 

For the purposes of real estate investors wanting to do infinite banking, the higher the premiums you're able to put in, the better. Share on X

One of the things that attracted me to having you on and talking to you is insurance. Before we get into the insurance, can you talk to us about what exactly do you do? I know I did introduce you as a strategic financial consulting firm. Can you talk about what services you provide? 

I like to refer to myself as a wealth strategist. Maybe some people might think of it as a wealth coach. My role and the services that I provide with Rebel Rock Wealth is to help people understand the truth about money. We’ve all heard different messages, whether it’s from the banks, investment houses or commercials, which is where a lot of us get our financial education. Unfortunately, it’s through commercials. We’re told to get a job and max out your 401(k). We hear these same messages over and over so that’s what we believe and those are the steps that we take.  

However, I don’t think that most of us as customers and consumers understand the cost of a lot of the advice that’s given to us. We’re told to put our money into places that are great for Wall Street, banks and even the IRS, but it’s not always the best option for us. At Rebel Rock Wealth, we help people to understand how that all works, and the fundamentals to be thinking about so that you can make smart financial decisions, and then implement strategies that will help you build not just financial independence but wealth over time. 

Diving into that, I know that you help a lot of real estate investors invest in real estate and real estate syndication. Can you talk about some of the ways in which you help them to do that? 

Some of the most important things for real estate investors is number one, being able to have somewhere to put their cash. Number two, being able to have their cash somewhere safe and accessible so when the next opportunity comes, they can quickly get to it and deploy it. Number three, they want to make sure that they are optimizing the taxes that they need to pay. They want to make sure that in any of their money, whether it’s specifically tied to the real estate investing or their overall portfolio, they want to make sure that they’re keeping up with inflation and managing opportunity costs. I threw a lot of terms out there.  

The main thing is that real estate investing is, hopefully, one thing that you’re doing within your whole financial portfolio. It‘s one way that you’re growing your money. Ultimately, you want to make sure that you’re going to get the most out of that money. One of the strategies that I use a lot with real estate investors is helping them understand how whole life insurance works, and how they can use it for those purposes. It’s a place where they can store their cash. It’s safe, accessible and going to grow. It’s an uninterrupted compounded growth in that vehicle. 

Also, it’s a place where they can put the cashflows that are coming in from their deals, whether it’s quarterly or monthly, whatever frequency it comes in. When they get their property sold or however the deal is structured, when they get the lump sum back, where do they put that cash? It’s helping them to understand what’s the best vehicle to put their money in so it gets the most tax advantages, it’s most accessible, it’s safe, it’s not exposed to the risks of the market, and has additional living benefits.  

To quickly explain, a whole life insurance policy has two components. There’s the savings account portion, which is what we refer to as your cash value and then there’s the death benefit. That’s what most people think about when they think of life insurance. They say, “When I pass away, that’s the money that I leave to my loved ones.” It is and it’s important. We think of basic things like asset protection and generational wealth. When you pass away, that death benefit does go to your loved ones completely free of income tax. They pay $0 in income taxes when they get it.  

When you think about the money that’s in a 401(k), SEP-IRA or any type of qualified plan, if you pass away, that goes to your loved ones and they have to pay taxes on it when they withdraw and use it. There are those different advantages on the death benefit side. The part I like people to understand is while you’re living, this is how you maximize and use the cash that’s in your policy to leverage for your investments. As you’re making premium payments like you would make annual or monthly contributions into a qualified plan, you would make monthly or annual premium payments into a whole life policy. That money is growing over time. You’re able to leverage it. You can take out a loan. Just like you can take out a loan in your 401(k), you can take out a loan for your policy.  

One of the key differences here is that when you do take a loan out from your 401(k), eQRP or whatever qualified plan that you have, your balance is going to go down by that amount. Let’s say you take a loan out for $50,000 from your 401(k) and you had a balance of $500,000. Your balance is going to go down to $450,000. There are also going to be rules around that money has to be paid back within five years or how much you have to pay when you have to pay that type of thing.  

If you borrow money against the equity in your whole life policy, so the cash value that’s in your whole life policy, you’re not withdrawing it. You’re using it like equity in a home. You can get a HELOC on your home based on the equity that you have in your home. You’re getting a loan against the equity in your whole life policy. Your money is still sitting in there growing when you take out that $50,000 loan. You’re getting the insurance company’s money and they’re using the equity in your policy to underwrite it. It’s not an underwriting process. You do that upon application but you simply would call up the insurance company to request a loan for $50,000. The insurance firm confirms that it’s you. They will confirm where you’d like that money sent.  

There’s a cost. They’re not going to lend the money for free. They will charge you the interest upfront so you will pay for the one-year interest upfront. Each year, you’ll pay the interest for the remaining outstanding balance but you’ll get that $50,000 and you determine when you want to pay it back and how much you want to pay it back. I can even go as far as to say if you ever want to pay it back. Technically, you don’t have to pay it back because they don’t require that. As a financial professional, I would never advise you to do that. I would always encourage you to make those payments back because, number one, you’ll have to keep paying interest on the outstanding balance each year.  

You want to make sure that you continue to have more money available to deploy for that next investment or it might not even be an investment. Just because you’re a real estate investor, it doesn’t mean you don’t have real-life situations that go on. You may have a medical emergency, kids getting ready to go to college, repair a roof on one of the properties or your own property. There are different things that come up throughout life where you need to tap in and get access to cash. There are strategies, one is specifically called infinite banking that I like to show people on how they can tap into their equity, tapping into their cash value, leverage it, and be able to grow their money at the same time as they’re being able to borrow against their own asset. 

 

Infinite banking is one of those things that is very popular. Is doing a whole life policy the same as infinite banking or is that just a tool in the infinite banking process? 

You hit the nail on the head. The whole life insurance policy is just a tool that you would use. With infinite banking, the strategy simply is leveraging an asset. It’s borrowing money and using it towards something. If it is an investment, it’s going to make money. If you need to use it for a car or some other type of asset that doesn’t generate income, you could use it for that as well. The infinite banking strategy is essentially leveraging money. You’re borrowing money, you’re using it towards investment, and you’re paying back the loan to the insurance company but you’re also paying back a little bit more.  

Let’s use this as an example. Let’s say that you did not have a whole life insurance policy and you wanted to do some investing, maybe you could get a personal loan or personal line of credit from the bank at 8%. Let’s say that they would lend it to you for 8%. In your policy, you could get a loan, let’s say, for 5%. If you were to use that line of credit from the personal loan for that same $50,000, you’re going to owe 8% per year on that particular line. If you were to use your policy, you will only be charged 5%. What you could do is pay back the insurance company at the 5% that you owe them, but then also put in that extra 3.5% for yourself. You’re paying the same rate that you would market-wise but you’re putting that extra money into your policy. Instead of the banks or the finance companies making that extra interest on you, you’re putting that into your savings in your whole life policy and your policy is going to grow even more.  

The thing to understand also about whole life insurance is that there’s a guaranteed interest rate. Just like your savings account at the bank, they’re guaranteeing to pay you that 0.1%. There’s a guaranteed rate in your whole life policy that will be substantially more. It might be 1% or 2%. It will vary depending on your age and how much time you have that you’re putting into the policy and that type of thing. Let’s say it’s around 2% compared to 0.1%, it is already substantially more than you get in the bank. I specifically use mutual life insurance companies that have been paying dividends for over 100 years. They have consistently paid these dividends. The 2% is the guaranteed rate but you’re more likely to have a much better return on that money each year, the equivalent of anywhere from 3% to 5% each year.  

Would you want your money to be sitting in the bank earning 0.1% or potentially earning up to 3%, 4%, or 5% each year in a whole life insurance policy? You have that same security as the principal. You have access to it. You have all these different advantages in addition to some additional features. These are things that we call riders. A rider might be the waiver of premium rider. What this means is if you were to get diagnosed with an illness or sickness, you get injured or something happens where you can’t work for a period of time, if you have this rider on your policy, the insurance company will waive the premiums for you. They will waive you from needing to make the premium payments. They will make them for you for that period of time. There will be some rules around that but they’ll make those premium payments for you. If you’re putting money into your 401(k), if you stop working, that money stops going into that account. If it’s going into savings, that contribution would stop. With your insurance policy, if you have a waiver of premium rider, those premium payments will continue and your policy will continue to grow.  

Another rider or feature is what we call an accelerated death benefit. It’s also related to either chronic illness or terminal illness diagnosis. This is what I call a long-term care alternative. Some insurance companies have a long-term care insurance rider that you can add to it. This is more of an alternative to the insurance policy. This would give you some ability to tap into the death benefit of your whole life insurance policy and use those funds towards long-term care if you needed it. If you need to go to a nursing facility or bring a nurse to your home. For some reason, if you have this chronic illness or terminal illness diagnosis, these are additional features that you get with your whole life policy.  

Wealth isn't just about money. It's really a whole lot of different things. If those things are out of order, you can't always enjoy them. Share on X

Another one for those who are under 40 is a guaranteed purchase option rider. This is where you go through underwriting that first time, but then you have an opportunity to get additional policies without having to go through underwriting again. There are a lot of different living benefits in addition to the huge savings difference, growth in your money, and the uninterrupted compounding of that money but there are also these additional features.  

For my readers who are specifically interested in investing in real estate, one of the things that I’m pretty sure many of them are thinking as they learn about the infinite banking possibilities is, what is the minimum amount that they would need to put in? I would assume maybe $50,000 or $75,000. How soon are you able to access that money to make an investment? 

For the purposes of real estate investors wanting to do infinite banking, the higher the premium you’re able to put in each year, the better for you. It depends on your particular situation. For example, if I have clients who have $100,000 sitting in a bank account earning 0.1%, we’re going to try to move some of that over into the policy as well as think about, what are they going to annually put in? How I would structure the policy is I would have that minimum scheduled premium that would go in, but I create some room in there for them to be able to put in more. It’s hard to put a number out there because I could say, “You could do $10,000 a year. You might have to wait a few years before you could tap into it to do a $50,000 investment.” If you have $25,000, $50,000 or $75,000 and you’re able to put in consistently each year, by all means, we would structure the policy to support that.  

The other thing to keep in mind is I can design a policy where you make premium payments for ten years or I could do it to where you have premium payments scheduled to go all the way to age 100. I know that might sound overwhelming, but the reason I do that is if you are going to continue to have investment income coming in, you want to have a place to put that money. If you don’t have premium payments scheduled or you don’t have the ability to make premium payments, you won’t be able to put additional cash into the policy. Either it needs to open an additional policy or you’ll have to put those funds in other vehicles. 

It’s important to think about these different things. One of the other things that you talked about is your policies are mutual life insurance companies. Can you talk about why that’s important to know and what are some of the alternatives that might be out there? 

A mutual life insurance company means that the policyholders themselves are the actual owners of the company. If and when dividends are declared, you’re getting all of that net profit that’s going to go back to the policyholders. Just like in any corporate stock, the company with shareholders, the management of that company is going to be focused on profits to satisfy shareholders. One thing you want about an insurance company is longevity. You don’t want to risk being taken. You still need money to grow and earn interest but you want it to be done in a conservative way looking long term.  

You don’t want someone who’s looking at it like, “What it is going to look like this year? How are we going to pay out dividends this year or these couple of years coming up?” I’m not to say that an insurance company that is not mutual isn’t taking that long-term approach. From my perspective, it’s safer to use a company that is mutual because the policyholders are the ones who are driving the decisions on how those dividends get paid out.  

The ones that I use have been paying dividends for over 100 years. They have that longevity. They’ve been around a long time. A couple of these companies have been around since the 1800s. They’ve been paying dividends through The Great Depression, World Wars, recession 2008, COVID. These are companies that know how to manage their money. None of us likes to think about death. When that time comes, 10, 20, 40 years from now, we want to make sure that there’s going to be money there to pay out to our loved ones after we’ve been making these premium payments over this time.  

 

There are a couple more things that I wanted to touch on. Going back to infinite banking, someone who’s earning enough where they could put away $50,000 every year into a whole life structure with the plan of doing infinite banking. They’re putting $50,000 in and they’re then taking a loan out for that $50,000 to then invest either buying actual real estate properties themselves or investing in real estate syndications. Syndications are fairly easy because you know what the return profile because the syndicator is telling you, “This is what the return profile is.” Let’s say the preferred return is 8% and the premium for that insurance is maybe 2%, 3% in terms of the amount that needs to be paid every month. That’s where the money comes off of that investment. The investor could choose to put all of that cashflow that’s coming off of it into the policy.  

They could use some of it to pay the premium and then put a portion additionally as you said with the example of 5% and then the additional 3% inside of the policy as well. If someone is thinking about using it in this way, they would want to make sure that whatever investment that they’re planning on putting that money in is kicking off sufficient returns to cover the premium and to enable them to continue to grow their wealth in terms of putting additional money to continue to grow their plan. 

I would say yes and no. Here’s what I always say to people. One of the other reasons why it’s good to leverage your whole life policy for investing in real estate or anything is because when you invest from cash, you deplete your balance by that amount. It’s gone. God forbid this would happen. What if the investment goes sideways and you lose all your money? What if you invested from cash and that $50,000 is gone? As opposed to if you had leveraged your whole life policy and that investment went sideways, at least your money is still there. The loan is still outstanding. You still need to make those payments but at least your money is still safe in there. 

When I talk about using infinite banking, using the cashflows coming off of the investment, I would use those to pay back the loan and put in the extra money. To me, the premium payment should be made from funds that you know you are going to have. The loan payments or the loan repayments should be made from money generated from what you leverage. It’s two separate things because the premiums are going to be scheduled, therefore, it is required each year, monthly or however you do it. They’re going to be required to keep the policy in force. You don’t want to be reliant on the investment money to make that payment. What if those cashflows don’t come in?  

If you normally put aside $1,000 a month into your savings, you want to redirect that into your policy. If you’re maxing out your 401(k), you want to seriously consider what is it costing you to have that money in there delaying paying taxes. In your whole life policy, your cashflow is growing uninterrupted compounding growth. A tax-deferred or qualified plan from the IRS is uninterrupted compounding tax liability. If you keep putting off that tax bill, year after year, you’re going to be paying significantly more in taxes later than you would, had you just been making those tax payments each year. That’s something I show clients what that looks like, especially for folks in California where the tax rates are high. It’s a significant saving for many people when I show them redirecting that same money into a different vehicle that’s more tax efficient and how much money they would save. 

There are a lot of different nuances to this process, for sure. I was also going to ask about not paying. You said that people can take that loan and some people might choose to not pay it back. What about if they don’t pay it back? What is the impact on the death benefit at the end? 

That is where it is impacted. The insurance company is going to deduct any outstanding loan amounts from the death benefit before it gets paid out to your loved ones. That’s why there’s no due date because they know they’re going to get that money back at some point. They’re willing to wait. They’re going to charge you interest each year while there’s an outstanding balance. For you, as the policyholder, that same loan will keep costing you money if you don’t pay it off. 

If you implement infinite banking where you're actually putting more money in, you'll see that cash value increase much sooner. Share on X

When I say that, I don’t mean that you need to pay it off in a year. There are times when it might make sense. Maybe you did a larger loan like $100,000. Just like in any syndication, if were looking five years out, some people might wait five years and pay it back when they get that lump sum back. Some people do like to pay it back with some of those cashflows, they may not use all of the cashflow. They may only use half of it to put towards the loan and the other half they’re using for whatever else they need. There are different strategies. There’s no right or wrong. As a financial professional, I would not encourage you to leave that loan outstanding for years because it’s costing you in the end. You’re earning dividends but then you’re paying it back in loan interest.  

As I think about this, I feel like I have to get a little bit more clarity. When someone decides to take a loan, let’s say they take a loan for $50,000. They now have principal and interest that they should be paying to repay that loan. Separately from that is the premium. Three things are going on here, there’s the premium, the interest on the loan, and there’s repayment of the principal of the loan that was taken out. If you start a policy that you’ve contributed $50,000 to, that would be your “premium,” correct? 

Yes. Premium is the same as your contribution. Your premium is the amount that you’re putting in whether it’s monthly or annually. That’s your premium. 

You could take the approach of saying, “I’m going to contribute up to $50,000 maybe in this annual cycle.” $50,000 divided by 12 would be your typical premium. By the end of the year, you would have $50,000 “saved” in this insurance policy, which you could then take a loan against. Once you do that, you’ve put that money out there to work into another investment, real estate or whatever you choose to do or maybe it’s not an investment. It’s something else. At the end of the day, when you’re in year two, you are continuing to pay premiums and then you have the loan so you need to be paying the interest and the principal repayment. You want to make sure that you’re in a position where you can make those payments, all three of these, either through the income that you’re already making on your job or businesses. As you said, you can use the money coming off of the investment but we also know that investments can be unpredictable so you want to make sure that you have other streams as well. That was good for me to clear up my mind.  

I try to help people equate it to a HELOC. If you get a line of credit against your home, the bank is granting you that line based on the equity that you have in your home. If you choose to use it, they don’t charge you anything until you use it. If you’ve decided to use those funds to invest in a home, now you have to start with them. They are going to have a minimum monthly loan amount that needs to be paid back and whatever. This is the same thing. You still have your mortgage payment but you’ve now taken out this loan and you will need to make repayments on that loan.  

It’s the same thing with your policy. You’re still going to have the premium payments. You have this loan and you want to start making loan payments. The only difference is that you get to choose when and how much you want to pay back that loan. For some people, to be disciplined, they’ll ask me and I can create an amortization schedule for them. They’ll use that to pay it back monthly. Others might pay back a chunk each year. They might pay it back as they start to get the quarterly returns. It is up to you. You have full control over that part.  

Another thing I want to clarify because you touched on it. In year one, let’s say your premiums are $50,000. In year one, you make a premium payment of $50,000. You’re not going to have that full $50,000 available to you in year one. I want to explain why that is. In your whole life policy, there are three components that make up any costs that are part of the policy. There’s the cost to operate the business like any other company. You are in full transparency. There will be any commissions that are paid out to the agent. The main thing is the actuary, through actuarial science which is how these companies have survived all these decades, they look at all these different things. They factor and they know, “In this year, we know we’re going to pay X number of death claims.” They are putting money aside. As a policyholder in those first few years, some of those costs are coming out to support those three different things.  

If you put in a $50,000 premium in year one, you’re not necessarily going to have $50,000 available to you in year one. The amount that you do have available will be different for each company. One of the factors will be your age, your health or the rating of your policy. If you’re super healthy, you can see the projections of your cash value to grow at a higher rate or faster rate than if you’re at a lower rate in your policy. There are different factors that come into that but it is important for you to understand that in year one, if you put in $50,000, you’re not going to have $50,000 available right away. You might have like $35,000 or $40,000. It depends on how the policy is set up. You want to think about that.  

That’s another reason why some of my clients, especially if they have cash sitting in their bank, will dump some of that additional cash into their cash value so that they would fill in that space and fill in that gap. They’ll have more money available that they can tap into in that first year. You have to also remember that whole life insurance is a long-term saving. It’s not something I want people to confuse as an investment. It is a savings tool that you should couple with your investing. You leverage your policy to do your investing. It’s where you keep that big bucket of money that you want to deploy for any reason. It could be for real estate investing, college funding or retirement. You can use these dollars for anything because you’re recycling and you’re able to reuse these dollars over and over.  

That’s such a key distinction. I am familiar with other insurance policies. Many of them usually take about 10 to 15 years before the cash value and what you’ve put into the policy equals the same thing. The cash value is what you can borrow, whereas the value of the policy is just a value. It takes about 10 to 15 years for those to be the same thing. You could borrow all this time leading up. It’s smaller amounts like $5,000, $6,000 or something dollars as it’s continuing to grow. 

It will depend on how the person designed the policy. It certainly could take fifteen years. Hopefully, it will take a lot less. With the ones I design, it’s less than ten years. It always depends on age or how much the premium you’re putting in. There are lots of different factors. If you implement infinite banking where you’re putting more money in, you’ll see that cash value will start to increase much sooner. That break-even point, if you want to call it that, will come a lot sooner. It depends on how you use your policy. There are a lot of different ways. 

It’s fascinating. Some of the key things I took from this is the fact that with insurance, it’s better to start early than it is to start late. It’s hard for people to grapple with starting early. Generally, when you say start early, people don’t have dependents. They’re not married. They don’t have any kids. They don’t have houses. They don’t have anything that they “feel that they want to leave money for.” That’s the time when your premiums are the lowest, you’re most healthy, and you can get the best type of coverage and the whole nine yards.  

That’s why I like to emphasize the savings portion because there are single women in their 40s and they’re like, “I’m not going to have kids anymore.” That has nothing to do with it. If you think from the most basic premise, do you want your money to be in a bank earning 0,1% or do you want it to be in a vehicle where it’s earning at least 2%, more likely 3% to 4%? From that basic level alone because people are focused on the death benefit. They’re like, “What happens after I die?” Through marketing commercials and the lack of financial education, we only understand life insurance to be for the purpose of once we pass away. We are never taught about how you use it while you’re alive. From that basic reason alone, from a savings perspective, I try to help people understand the cost of putting your money in other places as opposed to the policy. 

 

That is powerful. I love it. This was good. I learned a lot of different things. I hope it’s been a beneficial episode for everyone who’s reading. Anything else on insurance in real estate that you would like to touch on before we move into the final round, the level-up questions? 

One thing I would add is that some people say, “I’m maybe not the healthiest person. I had something in the past. I had breast cancer.” They’re concerned that they may not be able to get a policy. Don’t assume anything. Reach out to me or reach out to an experienced licensed life insurance agent. I know that there are plenty of websites where you can go online and get insurance, but you want someone to educate you and understand what you need. You want a policy designed properly for you. Even if you can’t qualify for yourself, you can get a policy on your kid, your spouse. If you’re a business owner, you may potentially be able to get it on key employees and grandkids. You may not be able to get it because you may not qualify but you may still be able to do this by getting a policy on someone who you have an insurable interest, which could be a spouse, child, grandchild, that type of thing. 

This is so much good information. Into the level-up questions that I ask all of my guests, the first one is, what are you grateful for in your life right now? 

Making it through this pandemic healthy and all my family made it through it healthy. I’m grateful for that. I can’t wait to finally get to see them. The borders haven’t been open. I’m hoping I get to see them.  

What part of Canada are you from that you grew up in?  

The Toronto area. 

I’ve been to Toronto many years ago. It’s a beautiful city.  

You have to go back. 

I’m way overdue for a trip. What has attributed to your success and continuous growth? 

I’m a nerd. I like to read and study. I want to make sure I know that I’m up to speed on everything that I’m teaching my clients. I love to immerse myself in reading, understanding and learning all these different things. That keeps me motivated. Helping real estate investors. Whole life insurance or life insurance, in general, is something that helps families preserve their wealth and be able to pass it on from generation to generation, especially families who’ve never even had it before. For me, it’s a fulfilling practice that I have. It almost doesn’t feel like work because I’m a little bit nerdy about it. I’m grateful that I have this business and I’m able to help many people. 

Remember that whole life insurance is a long-term saving. It's not something people should confuse as an investment. Share on X

What do you now know that you wish you knew at the beginning of your journey? 

I wish I had brought on an assistant sooner. I’m grateful for all the people who have reached out and I love helping them. I wish I had reached out a little bit sooner to get some administrative help. That’s in the works. That’s going to make my life a little bit easier. The power of delegation, I wish I understood that better. 

Before we wrap up, can you touch quickly on what the six wealth destroyers are and why they’re important for people to know about? 

I touched on a few of them earlier. Most of us only focus on income taxes but there are a lot of different types of taxes like sales tax and property tax. When you go stay at a hotel, there are resort taxes. We pay all kinds of taxes and we need to be mindful. It’s not that there’s anything wrong with paying taxes but you don’t want to pay more than you need to. Perpetual fees, I would say be mindful of fees. There are costs that are built into whole life insurance but you do get it back. Whether you “breakeven” in your 8, 10, 20, or whatever it is, you do make up those costs. Any type of account that is managed, there are fees. There is this flat fee or a percentage that’s taken out. Whether you like it or not or no matter how well you perform, there’s that cost to operate that account. There’s nothing wrong with that. You should be aware of what is costing you. You’d be shocked at how much that’s costing you over 10, 20 or 30 years.  

Inflation is something that we don’t think about. If we think at a basic level, what is your lifestyle with $100,000 income now compared to ten years ago? What do you think that’s going to be like ten years from now? We do not think enough about inflation. We use 3% as a consumer price index. If you think of how much college has gone up over the years, how much has the cost of health care gone up over the years? The real costs or the real inflation rate is higher than the 3% that we use. We need to be thinking about how much money are we going to need to live in those later years. We might think $100,000 or $200,000 is a lot but that might not be anything. $200,000 twenty years from now might be the equivalent of $40,000 today. We need to think about inflation.  

Number four is opportunity costs. If you’ve chosen to put your money in a bank account versus a whole life policy, what does that cost? If you’ve chosen to do X over Y, what is the actual cost? Sometimes it’s a negative cost and sometimes it‘s a positive cost. You want to understand what is the cost of making certain financial decisions. If you don’t have all the information, you don’t know what it’s costing you. The next two are a little bit different. I call it knowledge or mindset. If you don’t continue to educate yourself around money, how it works, and the real truth around money, you may be deceived. You may continue to make decisions that are not in your best interest for your finances because you don’t have that knowledge.  

 

When we learn this knowledge, how are we teaching our kids? How are we teaching them to be able to be responsible with money and manage it moving forward within our family unit and our household that we are preserving wealth? It’s not going to get lost because we are teaching our kids about money. The sixth one is health. Whether that’s physical health, mental health, spiritual health, if those things aren’t in order, your life won’t necessarily have the quality that you want. It may not have the lifespan that you want. You want to make sure that you’re optimizing and maximizing your health in those different areas so that you can enjoy the financial wealth that you’re building. Wealth isn’t just about money. It’s a whole lot of different things. If those things are out of order, you can’t always enjoy them. You want to be mindful of those six things and how they can impact your ability to grow your wealth. 

That’s good and powerful. I can see how they can be wealth destroyers if not dealt with correctly. Thank you so much for coming on the show. It was good. If my readers want to learn more about you, what is the best place they can go? 

You can go to my website RebelRockWealth.com, which will take you to my podcast. You can sign up for my newsletter. You can schedule a time if you want to have a discovery call to see how I can help you. Go to my website and you’ll get everything there. 

Thank you again, Lesley. I appreciate it.  

Thanks for having me. 

Important links: 

• Rebel Rock Wealth 

About Lesley Batson

Lesley Batson launched Rebel Rock Wealth, a strategic financial consulting firm to teach independent thinking professionals, investors, and small business owners, the WHOLE truth about money.

She helps them implement strategies to design, control, and build the wealth style they desire. Lesley is licensed in several states and serves clients across the country.

She loves ‘Hamilton the Musical’, playing golf, downhill skiing, and taking up space on a sandy hot beach.

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