In this episode, Brandon Neely introduces you to the infinite banking concept – a powerful way to grow wealth using insurance products and strategies. If you’re looking for a more innovative way to save and invest your money, this episode is for you!
About Our Guest
Brandon Neely is an entrepreneur, Profit First and Bank On Yourself Professional, and the co-host of Wealth Wisdom Financial Podcast with his wife, Amanda Neely.
They founded and managed Overflow Coffee Bar, L3C, from 2008 through 2018. Now, they share their experiential knowledge through podcasting, developing personalized financial strategies for individuals and couples and profitability strategies for businesses.
Connect with Brandon
Instagram – @wealthwisdomfp
Facebook – Wealth Wisdom Financial
- Brandon Neely discussed infinite banking, a high cash value, whole life insurance policy that pays dividends and can be used to build a line of credit.
- It is not an investment but a savings vehicle; the critical indicator is finding someone specializing in it.
- One can access capital with it at a low-interest rate to pay off high-interest debt, cover emergency expenses and taxes, or purchase an asset without going to a bank.
- Monthly payments are subject to your budget, and if you cannot afford them, options include reducing payment or lowering policy premiums.
Intro/Outro: You know what it is. That’s right. It’s time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It’s the Money Talk with Tiff podcast.
Tiffany Grant: Hey everyone, I am so excited because I have Brandon Neely on the line. Now, Brandon’s here to talk about. Which I honestly, um, wanna learn more about.
Uh, and also, you know, I have some friends and stuff that do it, but I never quite understood it and that is infinite banking. So thank you so much, Brandon, for coming on the show today.
Brandon Neely: Hey, thanks for having me, Tiffany. I’m excited to share about this. Amazing. Concept.
Tiffany Grant: Yeah. So first and foremost, let’s just start at the bare basics.
What is infinite banking Like? What does it mean? Like, you know, I’ve heard it being thrown around as like a buzzword, but what exactly is
Brandon Neely: infinite banking? Yeah. This is where a lot of people. I, I, I think they get it wrong. They think that it’s, um, they’ve listened to Dave Ramsey and they say, oh, it’s horrible.
It’s a scam. It’s evil and really what it is, and you wanna find the right person to design the right policy. It is a high cash value, whole life insurance policy that is worth a mutually owned company. Non-direct recognition company that pays dividends and has paid dividends for over a hundred of years.
Right. And what it really is, is as I think about infinite banking, it’s building my line of credit through my life insurance policy, kind of, uh, kinda like a heloc, and I’m able to access that at a low interest rate, uh, deal. Right? And so it’s really, A really amazing and efficient way to have your emergency funds and medium term expenses, right?
So those kind of things is really what it is at its heart, uh, and a lot of people get all of it’s, is it a investment? I’m like, it’s not an investment, it’s a savings vehicle. It’s just a really efficient way to save and leverage. As you’re going through life. So,
Tiffany Grant: okay, let me just make sure I have it correctly.
So it is a whole life insurance policy where you are pretty much borrowing against it, um, in order to kind of create, uh, you know, cash flow. So like savings or, um, if you need to buy something or what have you, you’re just borrowing against that life insurance policy. Yeah. Okay. Gotcha, gotcha. Okay. That makes sense.
And then, um, you know, I know with typical whole, whole life insurance policies, um, and I, I noticed that you mentioned it was a high, um,
Brandon Neely: cash value. High cash value. High
Tiffany Grant: cash value, yep. You know, typically when you look at life insurance, whole life insurance policies, it’s like you’ll pay on it for like 3, 3, 4 years and it’s only like, like a hundred dollars.
So how do you, what’s the difference between, or how do you know if your life insurance. Policy is the one that you’re talking about versus just the one that is just, uh, you know, you didn’t, you barely
Brandon Neely: get anything. Well, I think first is you wanna have worked with people like me who are specialists in it, right?
Because it’s kinda like, uh, different term insurance, different, I don’t know, uh, ETFs and different things like that. You wanna find somebody. Like a business owner who really understands and knows the concept because really the reason that a lot of agents don’t do this is because we get paid on the base premium.
Right? And so it isn’t, and I even talked to my massage therapist, uh, at one point and he is like, well, this is what it does. And I’m like, uh, you’re wrong. Uh, and he, he, he never fully went through the process with me, and he is like, this is what I thought it was, and blah, blah, blah. I’m like, well, you’re just watching YouTube videos.
That’s not right. Uh, I know because I’ve done it in different ways. So what I think about is, uh, as a, as an agent, I take a big commission cut because I get, I get paid on the base commission, not the paid up additions, which is the writer with the cash value, right? So a lot of people don’t really talk about this because, uh, there’s not as much money in it, right?
Um, and, and frankly, that’s, that’s why there’s not a lot of people in there and, and why Wall Street wins over us, right? Because you. Who’s really getting into finance to, to be an activist except for crazy people like me.
Tiffany Grant: Gotcha, gotcha. And so, okay, if we’re, okay, let’s say for instance we get the concept, what can we use these funds for?
Like are there any drawbacks or what have you used it for in the course of, you know, how you’ve been using it? Yeah,
Brandon Neely: so I will tell you in my old business, I used to own a coffee. My biggest investment and my biggest risk was. Right. And so we were saving, we put $400 a month each into this policy, into two policies.
And we used it to take care of high interest debt, right? Because what I tell people is it’s all one wallet. You could make a great rate of return over here, but your credit cards are 25% over here. Uh, it’s all one wallet, right? So I want to think holistically, and that’s where when I work with my clients, I’m like, Hey, I want to ask all kinds of things.
It’s not. Life insurance policy. It’s how you use it, right? So I’ve used my policy to take care of high interest debt. Then I, what it they say is, uh, you’re banking on yourself, right? I pay myself back instead of the banks, right? Kinda like, uh, um, instead of a, uh, HeLOCK or, uh, you know, you take the equity of your house.
And the house is the collateral. I, I’m the house. So I take a loan against myself, right? I’m the house and I’m using it for this stuff of life. I’ve used it for, uh, taking care of that. I, I had an emergency in my coffee shop that literally a flood happened. Uh, it sucked. I don’t recommend having those kind of things happen, but it happened, uh, and I needed access to cash real fast to overcome that obstacle.
Uh, was able to sell the business versus close the business key indicator because of access to capital on a quick without having to go to a bank or things like that. I used it for 20% down on my house and I paid it back, right? Um, I self escrow, right? So everything is savings. I’m always thinking through future expenses and, uh, I use my policy.
To pay my taxes right as I think through taxes. And then I used my policy most recently to buy an office condo. So I’m a business owner. Uh, I own these policies, right? Personally. I, uh, bought the building personally, uh, with part of my, um, cash value on my policies. My business is now paying me rent, right?
And, uh, I now have two property or two assets happening, right? And that’s also great for, um, taxes because now I’m a, a real estate investor, right? Uh, and so I’m thinking strategically, holistically, but my cash value, uh, is at a low interest rate at 5%. Simple interest. I can clearly in this environment, right?
I don’t know what’ll happen in the future here as we are recording. Right. But I know we’re in a high interest rate environment. 5%. Simple interest is really good right now. Uh, yes, that is excellent. All right. But I’ve been thinking about it long range, uh, and access to capital is really what it’s about.
Tiffany Grant: Absolutely. And so I heard you say that, um, for the policy that you have now, two of you all put in $400 a piece, so that’s about $800 a month. Are these policies generally very expensive or, um, can someone get one you. Yeah. Within their budget, if they don’t
Brandon Neely: have much. Yeah. I think that that’s, uh, subjective on what’s expensive.
Right. Uh, because when I started the, uh, 400 bucks dollar a month policy, uh, that was a lot of money for me. Right. And we wanna, that’s why doing the full financial analysis is so important. But, uh, now I’m in a different tax. You know, and I think about, you know, Jeff Bezos, uh, he might think what is expensive is very different than what I think is expensive, right?
Uh, and so I have another policy that’s, uh, quite larger. You know, cuz I, I run a, uh, financial firm and so my, my, uh, ceiling is $50,000. Never would’ve thought eight years ago that I would. Doing that amount, right? And now I’m like, oh, that’s not that bad. Right? And so it’s all like doing what works for you and knowing that we’re kind of.
Building into it. Right. And so I have actually, between the family seven policies that we have, I, I am a caretaker of my mother-in-law. Uh, and so she has a policy on her that we use, uh, if we need to, uh, and we call it in case mom gets sick fund, uh, for the cash value, and we’re gonna have that death benefit and long-term care associated with it.
And then she’s buying a policy. Uh, for my son who’s four and she’s, it’s called his adulting fund. And so she’s paying for that. I’m not paying for it, which is amazing. Uh, and it’s a great legacy that she’s creating. And I’m thinking three generations. I’m thinking about personal for me and, and my wife and business.
And so as we think through this, it’s just, um, using the policy is just a, a really amazing savings account because things are flowing, money is always flowing through us, and our need for finance is way more important than even our death benefit.
Tiffany Grant: Gotcha, gotcha. Now, is there anything that you can’t purchase with these policies or with the money you get from the policies?
Brandon Neely: Yeah, so that’s the cool thing. As you’re using the cash value, no one’s gonna come as you’re saving, right? Because I, I’m thinking, again, long range and I am saving for things. No one’s gonna come and say, oh, well, You can’t use it for this or, or the banks may tell you what you can and cannot do. You make a policy loan from the policy, it doesn’t matter.
You can go to Vegas. I might tell you as a, uh, friend and a, as an advisor, hey, maybe that’s not a good idea to go to Vegas and go use all your cash value to go hopefully win. Probably not a good idea. You could do it. No one’s gonna tell you not to, but then you’re gonna have a loan that you need to pay back.
So, uh, what I like to think about is use and think it holistically and as a business owner, I know how marketing works as, you know, the 80 20 rule and those kind of things. Access to capital in something that, you know, is gonna be a bigger rate of return than, I don’t know, Tesla stock or something like that.
Tiffany Grant: Gotcha, gotcha. And then also, I’m just thinking through questions that I have. Um, and so let’s say for instance, If your policy, if you can’t afford to pay it anymore, then what happens?
Brandon Neely: Yeah. So there’s a lot of different ways that you can think through it. So, uh, there, there’s different options, right? So you might, what they call reduced pay up, right?
You, you’ve done it for several years, uh, and you reduce pay up. That means it’s, you’re not making premium payments anymore. It’ll stop the growth of it. It won’t grow as, as fast. Um, So sometimes I, I, uh, will say that’s what we need to do. You can lower the policy’s premium amount. So if, and, and I tell people like this, um, it’s, it’s kinda like a house, right?
And let’s say you’re experiencing a hurricane. Well, what we need to do a loss of a jab, we’ll lower it. And you’ll go into the basement. Hopefully you don’t stay in the basement forever. That sucks to be in the basement, you know, uh, in that, that kind of thing, right? But, Things happen. Life happens, right?
And so then you have access to cash, the emergency fund that you can still use to either pay the premium or you know, pay for groceries. Right now, if you stop. Altogether. Right. And you’re not budgeting and you’re, you’re not, you know, eventually you’re not, not getting a job right. Or something. Well, eventually things just break down, right?
So there’s, there’s levers we can push to go down to the basement and ways to get up to the penthouse of the policy, right? And so I like to be in the penthouse. I don’t know about you, but business is not always up until the right, you know, things happen. And so I like to have that flexibility in case.
That’s why you want to have a, a person who understands how the policies work and understands how business works. You know, because again, owning a coffee shop, Shoot. I, I definitely don’t recommend, or if you like it, go for it, but, uh, it’s a, it’s a, it’s a hard business. Yes,
Tiffany Grant: yes. I can imagine. Um, okay. So I just wanted to make sure that people understood that there were options.
You know, if it becomes a time where you can’t afford the policy anymore, there are options to kind of, you know, keep it, but, you know, adjust different things. So that’s good. And then also, um, I wanted to. Since this is your life insurance, if you were to pass away, then what
Brandon Neely: happens? Yeah, so that’s the cool thing, right?
So it’s a li as I’m accessing my policy, right? So here’s the cool thing. My policy loan value, and I, I use it a lot. You know, I use YAP for budgeting and I budget for my cash value. I think about, you know, I just had an e. A flood, you know, or not a flood, but a, a plumbing issue on my house. I can access the policy real quick if I need to.
Not that I need needed to at this point, but, uh, if something happened and I took loans out, which I do have, you know, I, I just bought a office condo, right? Um, so if I were to die, what they would do is just subtract that loan amount. That I, that I took from the death benefit. So instead of my wife getting 2.1 million, she gets 2 million in the death bene.
And the cash value, or not the cash value, the loan outstanding is, is subtracted. So then my wife doesn’t have to pay the mortgage on that because it’s done right. And she got 2 million tax free. Right. Uh, that’s pretty awesome. In my case, and, and some people will be like, yeah, but you’re borrowing the insurance company’s money.
I’m like, if you’re borrowing it from a bank, what’s the difference? Right. It’s, there’s, I don’t understand why that arguments, but, um, it, it’ll be just subtracted. And, uh, my wife is now set for life. Uh, but unfortunately I have to die for that, but, you know. Right.
Tiffany Grant: But yeah. Um, so I completely get it now and hopefully the audience does it as well.
And just to recap, this is just another way you can use your finances. I have friends, um, that buy hotels this way. Uh, so they’ll pull their money with some other people that are doing infinite banking and then. Um, they’ll buy hotels and, you know, all types of stuff. And so there’s definitely, um, quite a few people that do this.
And thank you so much for educating us on this. And actually, just personally speaking, this is what happened with my grandma. She just passed away recently. Um, so I knew the answer to the last question, but I just wanted, you know, the audience to understand. And, um, she had loans out on a couple of her policies.
Uh, and so all they did was subtract the loans and then we were able to get the rest. And so, um, yeah, it’s definitely a thing. So thank you so much, Brandon for coming on the show today. Um, if people were interested in finding out more about the infinite banking concept, Or just learning more about you?
Where could they find
Brandon Neely: you? Yeah, you can find me pretty much everywhere. We have our own, uh, podcast and YouTube channel. If you go to Wealth, wisdom Financial, uh, you know, put that in Google or put that in YouTube or put that in po I don’t know, podcast platforms, uh, you’ll find us at Wealth Wisdom Financial.
And if you go to, uh, www dot wealth Wisdom. P, that’s financial partners.com. Uh, and then if you do slash report, I have, uh, a thing that is, what we’ve created is five simple steps to secure your future outside of a w2. I know we’re in a world of everybody’s a. Uh, uh, 10 99 and all of that. It’s like, how do we build this stability, uh, in the midst of this chaotic world?
And so we created a special report there. So go to the www.wealthwisdomfp.com/report and get that. Uh, great resource. Awesome.
Tiffany Grant: Thank you so much Brandon. If you did not catch that audience, I will have it in the show notes. So don’t worry if you didn’t catch all of what Brandon just said, um, just check out the show notes and there’ll be a direct link there.
So thank you so much again for coming on the show and I appreciated you dropping all of this knowledge on us.
Brandon Neely: Awesome. Thanks for having me, Tiffany. All right, bye.
Intro/Outro: Thank you for listening, joining and being a part of the Money Talk with Tiff podcast this week. You can check Tip Out every Thursday for a New Money Talk podcast, but if you just can’t wait until next week, you can listen to previous podcast episodes at Money Talk with t.com or follow tiff on all social media platforms at Money Talk with the T.
Until next time, spend wise by spending less than you make a word to the money. It’s always sufficient.