Financial Planning Strategies

Episode 959: Financial Planning Strategies, with Mark Willis

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Financial planning strategies can help change your perspective on money. Learn from Mark Willis how to implement the best financial planning strategies.

Mark Willis is a man on a mission to help you think differently about your money, your economy and your future through his financial planning strategies. After graduating with six figures of student loan debt and discovering a way to turn his debt into real wealth as he watched everybody lose their retirement savings and home equity in 2008, he knew that he needed to find a more predictable way to meet his financial objectives and those of his clients.

Mark is a CERTIFIED FINANCIAL PLANNER, a two-time #1 Best Selling Author and the owner of Lake Growth Financial Services, a financial firm in Chicago, Illinois. Over the years, he has helped hundreds of his clients take back control of their financial future and build their businesses with proven, tax-efficient financial solutions. He specializes in building custom-tailored financial planning strategies that are unknown to typical stock-jockeys, attorneys, or other financial gurus.

As co-host of the Not Your Average Financial Podcast, he shares some of his strategies for investing in real estate, paying for college without going broke, and creating an income in retirement you won’t outlive. Mark works with people who want to grow their wealth in ways that are safe and predictable, to become their own source of financing, and create tax-free income in retirement.


What you will learn from this episode about financial planning strategies:

  • How Mark and his wife entered the 2008 recession with six figures of student loan debt and how Mark recognized the urgent need to make some big financial changes
  • How our financial habits have turned upside down as we stopped saving money and instead went into significant debt
  • How our need for new financial planning strategies resulted in Mark’s “Bank On Yourself” strategy, and how Bank On Yourself works
  • Why one of the most important and fundamental realizations Mark came to is that our money behaves differently depending upon where we put it
  • Why liquidity is critical to help you get through challenging times, and why keeping your capital in the right place can help you prepare for the next economic crash
  • Why high cash value, dividend-paying whole life insurance is the secret ingredient in steady, predictable growth in your portfolio and can give you immediate access to cash
  • How you can borrow against a policy and it will continue to grow as if you hadn’t borrowed funds from it, allowing your money to do two things at once
  • Why borrowing money against your insurance to pay for something is actually better than paying cash
  • What key considerations make an insurance policy a powerful financial asset for your business and your family at the same time
  • How your policy can be a “warehouse for your wealth”, housing your money outside of your business but not away from your business
  • Implementing financial planning strategies to allow your money habits a restart


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Financial Planning Strategies: Full Episode Transcript


Get ready to find your recipe for success in financial planning strategies from America’s top business owners here at Onward Nation with your host, Stephen Woessner.


Good morning. I’m Stephen Woessner, CEO of Predictive ROI and your host for Onward Nation, where I interview today’s top business owners so we can learn their recipe for success, how they built in, how they scaled their business. Speaking of scaling, as you’ve probably heard me say over the last several weeks, maybe the last several months, that’s exactly what our Predictive ROI team has been doing to our free resources section on predictive


So we’ve actually turned it into a free resources library. So you can download free practical and tactical guides for everything you might need to build your own authority sales machine, everything from how to create your ideal client avatar, how to build out your value ladder, a sales funnel, how to make sure your content strategy aligns with the ten truths to what makes someone in authority within their niche.


So just go to It’s all free and as always, everything you request we will send it right to your inbox before we welcome today’s guest. His name is Mark Willis. I want to share some additional context on where and why. When Mark and I, when we first had our kind of introductory call in in Chris Prefontaine, if you’re listening.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: How Stephen And Mark Got Acquainted


Thank you so much, my friend, for, introducing Mark and I. So we can have this conversation on this February call that Mark and I have this is one of those, like, mind blowing calls. I mean, literally, I’m not trying to sound like hyperbole here. So when Mark and I called or had this call like, okay, so, you know, once you get past Steve, so what do you do?


And this is what I do, and you know, that kind of thing. And going through the, the what, what could you share with Onward Nation that would be really helpful to our business owner audience? He told me about this strategy, this financial strategy that he and his team use within their firm that he calls Bank on yourself. And I’m like, okay, well that’s interesting.


So tell me more about that. And he goes, well, wouldn’t it be interesting you as a business owner, let’s use you as an example, Steve. And I’m like, okay, wouldn’t it be interesting if you never if you never, ever in the future, no matter how good things were in the economy or good things were, was in predictive ROI, or maybe the reverse of that.


Wouldn’t it be awesome to never have to sit on the wrong side of the bankers desk? I’m like, okay, you have my attention. What does that mean? It’s like, well, wouldn’t it be interesting? And by the way, most of Mark’s clients happen to be business owners, just like you and me on ruination. He’s like, well, wouldn’t it be interesting if you had access to, let’s call that contingency cash?


I’m like, okay, now you have even more of my attention. He’s like, well, wouldn’t it be interesting if you had cash available for emergencies? You know, because there’s always a rainy day, as we’re learning right now, obviously, as we’re going through Covid and thinking about how we’re going to transition out of it and how we’re going to come roaring out of this recession, wouldn’t it be awesome to be able to have additional cash available, but then also to be able to have contingency cash that you can invest in opportunities?


I’m like, yes, of course. And so we’re going to talk about that and how to actually structure that in how to be proactive in doing that. Because the reality is whether we’re talking on our nation about emergencies or having contingency cash for opportunities, there’s another side to this bank on yourself strategy and that is we know that most business owners have this idea, this ideal, this dream that at some point they’re going to build and scale their business, and then somebody is going to walk in one day and say, hey, how’s about I give you this big briefcase full of money, and I want to take this business off your hands.


And the ride off into the sunset, into retirement. But unfortunately, that only happens for a very, very, very, very small percentage of the 28 million small business owners in this country. A very small percentage. So part of this strategy is also how can you then create a sort of golden parachute at the end when you’re ready to transition out of the business and maybe you have a buyer?


Awesome. But if you don’t, you and your family are protected. So that’s what we’re going to talk about in. Mark’s going to share a great story. There’s really going to be super impactful for any business owner. Okay. As you can tell in probably in my voice, my enthusiasm, I am very excited for this conversation because I think it’s going to be super, super helpful for you.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Mark Willis’ Introduction


So without further ado, welcome to Onward Nation, Mark. Thank you, Steve and I appreciate it. Well, I appreciate you taking the time out of your compressed schedule and in being so generous with your insights, wisdom and smarts and sharing those with our audience. So thank you for that. But before we dive into this litany of questions that I’m going to be firing your way before we do that, actually take us behind the curtain and tell us more about you and your path and your journey.


And then we’ll dive in. Sure. The journey began in a dirty hotel room in central Texas, in the midst of the last tech bubble bursting. when I became a, a debtor for the first time, and I took out some student loans and signed on the dotted line, waiting for, my first days of college.


Fast forward a few years now. I, my wife and I, beautiful wife. And I graduate with three private school degrees between us and $120,000 of student loan debt. And we’re in the next recession. Okay, so we went from 2001 to 2008, and we just seem to, like, ride the camels back to the recessions, you know, going in and coming out of college there took us seven years to get three degrees.


I guess we had, six figures of student loan debt in the midst of the Great Recession, or, I guess, Stephen, I guess I’ll call it the less Great Recession. as of today, but we were we had no plan to pay off the debt. We had no jobs because it was a recession after all. And, you know, really?


No, no awareness that this was a major problem until we get that first student loan payment. And it’s almost like we had blinders on, and not we really didn’t understand the severity, the importance of the debt we were taking on. But I kind of joke with folks, and I say that I married two women in college.


I married my beautiful, gorgeous wife, and I married Sallie Mae. And Sallie Mae was not leaving our our relationship until we figured out a way to break free. And that’s sort of where our story began. I began working then at that point with a CPA, getting personally very interested in my own finances as I started to see this massive, you know, monthly payment, leave our bank account every week or excuse me, every month.


And the CPA was doing pretty significant investment packages for her clients all over the country. And I was mostly there to help her prepare tax documents. And she was doing tax returns. And I was getting very interested in the financial services industry as the Great Recession began to unfold. So I was overhearing some of her phone calls, Stephen.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Life-Changing Strategies


And some of these calls were something like, hey, Mr. Client, I know you’re 63 years old. I know I’ve been working with you for 20 years. But you can’t retire anymore like we thought you could before 1k just became a 201K. Yeah. And all of a sudden I realized, wow, this is a career that ends in disaster.


I don’t want anything to do with this financial services job. And so I was looking at ways to get out. And it was in that context that I stumbled across some strategies that changed my life. My wife and I, our family’s life, and the lives of hundreds of our clients. Now, since we’ve started our firm like Growth Financial Services, this is going to be so great.


And thank you for sharing the personal context because that really cements it into place and also gives us a lens into your point of view and how important family is to you and and how it all ties back to that. So when we think of that, let’s start high level with. So if we want to go sort of the cliche of 30,000ft or 50,000ft view, give us a high-level overview of bank on yourself that strategy as it relates to business owners.


Okay, great. Yeah. Let’s zoom way out. So let me give you a couple of key numbers as we look high above the landscape of things, I really think that we are in a world of hurt. And I won’t spend too much time here because we don’t need really any introduction to our current context, but I think it bears some emphasis here.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Every Dollar Matters


So in 1940, the US Commerce Bureau said that we saved about 30% of our income, 27%, to be precise, and we only service debt out of our income. Only $0.11 on the dollar went to debt. So 11% of our income went to debt. We saved 30% of our income back in 1940. Well, as we entered before we started 2020.


So at the very end of 2019, those numbers were upside down. We were only saving about 4% of our income, 4%. That includes 41K contributions, emergency funds, kids college funds and the like. Right. And we were spending 137% of our income, meaning, $0.37 on the dollar was going just to service the interest on our debt. What does that mean, Stephen?


I mean, what that means to me is a third of my day. If time is money, a third of my day is going just to pay some bank for the privilege of being in debt to them. Wow. You know, and through taxes on top of that, and now we’re looking at half of our day gone before we’re in business for ourself.


And as business owners every dollar matters. Now if half of my money is leaking out the back door, that’s a problem. That’s a big problem. And by the way, if we can figure out a way to not only stop that, but to take advantage of that concept, not just to get rid of the debt, but actually to use debt to our advantage, all of a sudden we become a lot more competitive in the marketplace.


But I’m getting ahead of myself. So the big problems, in my opinion, are threefold. We stopped being a nation of savers. We became a nation of debtors. We started to have to speculate with the money we could still save. Okay, Mark, I can’t. These would be the words. So sort of speak for my clients. They would say, Mark, I just can’t save as much.


I got two cell phone payments. I got two car payments. I got kids in college. I got a big house. I can’t save 30% of my income. So I have to save less, put more at risk into speculative instruments like the stock market, and hope and pray that my rate of return will go up. And that’s been kind of our mantra for the last 40 or 50 years.


Most financial planners, God bless them, and I’m one of them as a certified financial planner. But most of us are only concerned with helping you get just a little bit higher rate of return this year in your mutual funds. I would say that has well, it has a part to play. It is one of the least efficient parts of our discussion when it comes to creating a financial life you can count on.


You know, it’s sort of like saying, hey, hey, I can get your airplane to go from 100 miles an hour to 103 miles an hour. What do you think, Steve? Meanwhile, there’s a 300-mile headwind coming right at your face. You know, it just doesn’t matter what your rate of return and your mutual funds were when you’ve got, you know, a third of your income servicing debt.


So we have to find a way to solve the biggest problems in our financial life first. That’s sort of where my journey began. And honestly, the vast majority of the clients we meet, it’s not so much the debt is a problem. It’s just that we don’t see it as a problem until we see what banks are doing to businesses all across this country.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Bank On Yourself


Okay, so let’s now peel one layer down. So how does that then, and the reason why I’m using that sort of metaphor on our nation is because as we step through this, you’ll see that there are more and more layers, very interesting layers to this financial strategy and how it absolutely, without a doubt, sets you up and you and your business and you and your family, depending upon, the way the strategy is constructed, how that can be super helpful for, you as a business owner.


So let’s continue to go deeper, with the bank on yourself. So now how does that help with the debt piece, Mark? Sure. Okay. Yeah. Well, again, for each of our listeners, I don’t know everyone individually. Of course, I’ll tell you my story. It was a moment where I realized that money acts different when you put it in different places.


And that seems like such an obvious, obvious statement. Stephen. I know it does, but I mean, take a moment. Just think about it. You know, our 41K is make our money act different than our savings account or our real estate when we pay our mortgage, for example, when in a real estate, it’s different than say, a CD at a bank.


So it was important for me as I was starting to look at my own financial life, and as I was going through my CFP training to sort of keep a ledger almost of exactly what I wanted my money to do for me. I mean, if I could wave a magic wand and if you and each person listening could wave a magic wand and just say, hey, I’m going to create a brand new financial vehicle, here’s all the characteristics, here’s all the attributes I want to have in this perfect financial instrument.


You know, I think that would be a helpful thought exercise, if nothing else. And remember, I think the bank on yourself concept is a process of learning to think with new eyes, to have a new imagination of what’s possible with your money. Now there are some practical products and tactics we can talk about, but it starts with asking yourself, what do you truly want your money to do for you?


Is that great focus and question? You know that has become popular recently. It’s the one thing I can do with my money? And I’m adding that phrase for emphasis. What’s the one thing I can do with my money such that by doing that one thing, everything else becomes easier or unnecessary? And to me, that was the sort of the focusing question as I went through my CFP.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Protecting Your Money


So here’s some of the things that were important to me one, I wanted my money to have a good competitive rate of return because that was important to me. I wanted it to be accessible, meaning usable for my business anytime. I needed it for any reason, without penalties or taxes. And for my family, I wanted it to be accessible without any taxes.


That was important to me, so I want it to be tax deferred and then available to completely tax free. I wanted it to be flexible so I could raise and lower contributions. When I had good years and bad years in my business, I wanted to be able to actually help me pay off my student loan debts because that was an important chapter of my life.


When we were looking into options or for any other major purchases that we had in the future. Because, you know, honestly, we don’t stop needing money just because we paid off our debts. Now we have cars to pay and houses to buy and businesses to invest in and in the like. So, you know, we continue down the list.


We had a few more. We said, hey, we want it to be creditor protected, meaning I want it to be, you know, outside of the reach of lawsuits or bankruptcy proceedings. God forbid if something like that happened. And, you know, the list kind of went on and on. I wanted to be able to make sure by law it would go right to the people I cared for, not to the government or to other, you know, people looking to to sue or to lawsuit or that sort of thing.


So those were some of my key elements I wanted my money to do for me. Does that spark anything and use Steve? I’m curious, any other kind of like characteristics or attributes you’d want your mind to have? Yeah. I mean, as I’m thinking about, you know, the current context to where we’re at and Onward Nation knows that, you know. 


We’ve shared a lot of resources around how to really two fold how to market your way through this crisis and be able to come roaring out the other side, come roaring out the recession. So when I think about, okay, heaven forbid, if we were to enter something like this again, and we’re by no means on the other side of it yet, but me as a business owner and the team of that, we have a Predictive ROI.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Have Enough Resources to Double Down on Important Areas of Your Business


Next time we face something like this, or as we continue to face something like this, wouldn’t it be awesome to be able to say, okay, this is how we’re going to keep the team in place with or without a government stimulus? And then this is how we’re going to make progressive decisions by doubling down on R&D, doubling down on marketing, doubling down on new markets and or service opportunities because we have the cash available to do that.


Whether we can get BP or Eidl or some other acronym. And so when I think about like when you’ve shared with me before the bank on yourself, I think, okay, this gives us the opportunity that despite what’s going on in the environment, that we can keep the business moving forward and making progressive decisions and steering it toward calm waters. That doesn’t mean that it’s all going to be rosy and that things aren’t going to be rocky.


That’s not what I mean, but being able to have that confidence of knowing that you have resources available to you so that you can double down in the right areas, I think removes a lot of stress, in my opinion. Absolutely. I couldn’t agree more. I think the power of liquidity, it’s just like when you get a fever, you know, we’re all experiencing and my concerns and my prayers go out to anybody who have been impacted by Covid 19.


When you get a fever, what’s one way to help mitigate that symptom? Well, you lower your temperature by taking in a lot of fluids. So you need liquids to get over a cold or flu. Well, you need liquidity in your money when your money is experiencing a pandemic, a financial pandemic. So how do you pandemic-proof your cash?


Well, just like you said, you need plenty of liquid capital contingency cash that helps you get through good times and bad like we might be going through now. And unfortunately, many people were caught, ill-prepared. And so, you know, we couldn’t have handled the financial drizzle, but we got not just a rainy day, but we got a flood.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Crisis-Proofing Your Cash


So wow. I love, by the way, just as an aside, sorry to interrupt you. I love how you just said, pandemic proof your cash. You just gave me the title of this episode. All right. That was really cool. That’s great. Okay. Sorry. Yeah. Well, hey, you know, it’s all good. 


Do we think this is the last time we’re ever going to have a major market correction, whether it’s a pandemic? I couldn’t have told you on Valentine’s Day what would be doing Memorial Day or even now as we’re releasing this in middle summer. So, you know, we’ve had three major market crashes just since the year 2000. Is this really going to be the last time we go through this mess?


Of course not. Right. So what are we going to do next time that’s different than what we had to go through this time? Okay. And one of the answers to that in my opinion is having lots of capital. And where’s the right place to keep that capital in between your opportunities? So we can talk some about that if you’d like that.


Yeah, that would be great because it’s so important Onward Nation, that you get the cash like no matter. And of course this this does matter how the legal entity of your business is structured. If you’re an LLC, if you’re filing as an S Corp, if you’re a C corp and that. So all of that, obviously you need to talk to your tax advisor and your financial advisor and so forth, because there are some differences.


But the key is to make sure that you’re getting the cash out of the business. That doesn’t mean that the business is going to be, cash strapped or something like that. Mark is going to be talking about, okay, get the cash out of the business so that it can be serving you outside of the business, but it’s available if the business should ever need it.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Become Your Own Banker


So, yeah, Mark. Sure, your insights, they’re very articulate. So true. I would say, you know, again, putting your money in the right buckets will help you become more dynamic and more resilient. No matter what the world throws at you. So let’s talk about the concept and the problem at 30,000ft. Let’s talk some about why banking is such an important part of our financial picture.


And I think many financial planners forget or just aren’t aware they don’t have that lens to see your financial life. They’re looking at the mutual funds, they’re looking at your bond portfolio. But banking is something that is fundamental from day one of your life. When I was a little kid, we walked. I had saved up all my money in a little brown paper bag, and my mom took me to the bank to go deposit it at the bank.


No, I was a little nervous. I didn’t want to give this stranger my 25 bucks or whatever that I had saved up, and I didn’t think it was safe over in his hands. I thought it was safer in my paper bag. Now, Stephen, you know how close to the truth I was as a little kid. Now learning about wild things like fractional reserve banking, where banks multiply the money in thin air and and so forth.


But the key here is banking exists whether there is a bank in your town or not. In fact, even if you took all the institutions of banks out of this world, somehow they got, you know, vaporized. For some reason, banking would still exist because banking is a function. It’s a verb. And the question is, who is doing the banking in your life?


You’re already in the banking business. You’re just sitting on the wrong side of the banker’s desk. So I’d like to talk a bit about how you can become your own banker, become your own source of financing, and actually recapture that $0.37 if you’re the average American on the dollar. and actually use that as fuel for profit, for your business, for your family and for anything else you might need.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Saving Money Through a Life Insurance Contract


So let’s talk about a tool that I’ve discovered that blew me away when I was studying as a CFP. It was part of my overall studies. And, you know, we looked over about 450 financial vehicles. We came across a book called The Bank Under Self Revolution and another book called Become Your Own Banker. and those two books kind of opened my eyes to something that had been around for over 200 years now, of all things in the financial universe, it’s a modernized form of a very old financial asset that’s grown, guaranteed for the last 200 years.


We’re talking about high cash value, dividend paying, whole life insurance of all things. Now, this is an old-fashioned insurance contract and most people like myself anyway, I was not aware that you could save money in a life insurance contract. It was almost like saying, hey, Mark, you know, here’s your retirement account. It’s an automobile insurance policy, you know, have fun.


It just didn’t make sense to me. I didn’t know that you could keep cash. It’s almost embarrassing to say it, but I didn’t realize that you could pour money into a life insurance contract and have that be a savings vehicle for different purposes. So I’ll quickly explain what high cash value, dividend paying whole life insurance is. I use the words bank on yourself for short, which you know, kind of helps that paragraph out.


But here’s how it works. So it’s not your dusty old, your grandpa’s dusty old, whole life policy. It does grow on a guaranteed basis. Every single year, no matter what the stock market does. It also beats other cash equivalents in your portfolio. What do I mean? It’s going to be a lot faster growth than your CDs, your money market accounts, your savings bonds.


But it’s never going to beat the best year of the stock market. So it’s nice, steady, predictable, as you say, Predictive ROI. So it’s a nice, steady, predictable growth that is never going to wells, but it’s never going to be less than we had last year. It’s always going to be a higher net worth every single year.


You look into it, also you have early and immediate access to your cash or anything you might need. Maybe it’s real estate investing, maybe it’s your business, maybe it’s to fix up the kitchen. maybe it’s to send your kid to college someday. And of course, it is. Life insurance. So guaranteed on an immediate basis, you’re always going to leave your family more than you ever save inside this policy.


That’s just how the nature of that contract works. I mean, I don’t know anything else that automatically leaves my family more money than I could save for them. Unless maybe, oh, maybe I’m a fine artist till I die. Then I’ll automatically be wealthy. I guess as soon as you die. That’s the only other, but only other strategy I’m aware of that automatically makes me more wealthy when I pass away.


The final thing, and this is maybe the most relevant here. not that the others aren’t. I mean, all those seem pretty amazing right away to me. But for our business owner clients, it’s especially interesting when we start using the loan feature on these policies. So what this means is you can use your policy like a bank and use the capital, the cash value, the living benefits, not the death benefit, but the living benefit.


Listen to this podcast with Tim Austin for more financial planning strategies


Financial Planning Strategies: Making Your Policy a Source of Fund


Your equity, your cash value in the policy, like a source of funds, like a bank and borrow against it. And the policy will continue to grow as if you had not borrowed against the policy. So I’ll say that one last time, then I’ll whoosh, because it’s just such a crazy concept. So let’s say, for example, I’ve got $100,000 in one of my policies, okay?


And I want to borrow out 30,000 to do some, internet marketing. Or maybe I want to buy a car for my business or my family. So I take a loan against my policy for 30,000 bucks. Okay. That year, I’ll get the entire guaranteed cash accumulation and the dividends paid on top of that, as if I still had the full 100.


In fact, I do still have the full $100,000 in the policy, but I also have my 30 grand out there in the real world. Maybe I’m driving that car around every day, right? So I’ve got my money doing two things at once, and I’m the one that controls the repayment to the policy that I own. So nobody, no banker is in the way of this transaction.


You are participating as the banker for yourself. And I understand correctly that. So let’s say that, somebody takes, but let’s continue down the example here of the 30,000. So you got 100 grand and you take 30,000 out. And again, if I’m a business owner, I take 30,000 out to, I don’t know, make some sort of investment into the business.


Then I pay that $30,000 back, and then I do it again and I pay it back and I do it again and pay it back and do it again. And I continue to do that over and over and over again by loaning out and paying myself back and paying myself some interest back. Doesn’t that the am I correct in understanding that that helps?


Actually, the cash value within the policy grow faster than just leaving the money in because it does something to the dividends, doesn’t it? You’re on the right track there. Yeah, very well said. so there’s some clarifications I’ll make there, but the concept holds true. If you’re your own source of financing, if you are the banker, let’s kind of keep it less.


It can get a little schizophrenic when you think about yourself as the banker and the borrower. So let me take a moment. Just sort of imagine for a moment that you are the bank, and I need a loan, Stephen. Okay. And so I walk into your office and say, hey, I need some cash for my business or whatever, and you lend me some money.


Are you going to want me to pay you back with interest? I hope so, yeah, I hope so. Are you going to profit from that? Yes you will. Right. So when it’s yourself walking in the door as the borrower to the bank that you own, then yes, it actually benefits you to pay yourself market interest rate. How do you do that with these policies?


The policy loans do charge a loan interest. The insurance company that issues one of these policies isn’t doing this for charity, so they’re going to charge an interest rate on the cash when you borrow against it. Okay. Now some people will pull over right there and say, well, wait, why am I paying interest on my own money? You know, that’s what maybe some popular radio host would say this topic.


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Financial Planning Strategies: Be Greedy as a Banker


But I would like to just say, you know, who owns the insurance company that’s charging me interest in this case? Well, if it’s a bank on your self-designed whole life policy, it’s a mutually owned life insurance company. That means you and I and all the other policy holders are the only shareholders in that insurance company. Meaning there’s no no other profit takers, no shareholders on Wall Street.


So when there’s loan interest charged, it’s returned as a part of the overall dividend that’s paid to all the policy holders at the end of the year. So back to your question. You will be charged a loan interest rate when you borrow against a policy. And it’s pretty competitive. Give you an idea. And it might be about 2% Apr over a four year period since they charge a very low, simple interest schedule on their loans.


So 2% is not bad for borrowing money now. Now the policy continues to grow at a faster rate than that over, time and on the entire cash value. So again, you know, you borrowed 30 grand, now you pay back, you know, with some interest. But the policy continued to grow on the entire 100 grand, as if you had not touched the money.


So there’s what the fancy word there is arbitrage. You get positive growth. It’s a better way to use your cash than even paying cash. Because when I pay cash, when I withdraw money out of my savings account, or for one K or anywhere else, it immediately stops the growth on that money. You know, if I withdraw money out of a bank account or CD rate, I was earning 1%, you know, on a good day in a savings account these days.


But when I withdraw money out of a savings account, how much interest am I now earning on the cash? I took out on nothing? Right. And so the power here is when I pay cash for things, I’m breaking compound growth. I’m actually still paying interest because I’m losing the growth of that money and paying interest by passing it up.


I’m not going to see that money ever again. Never will I see that 30 grand ever again out of a savings account. But I’ll never see what that 30 grand might have grown too had I not bought the car or invest and kept it invested instead. So the truth is, paying cash is not the answer. And we finance everything we buy either.


We pay cash, pay interest to a bank, or we pass up interest that we could have earned on that cash had we left it there instead. So you’re right, you can pay yourself extra interest. It’s a good way to put it, I guess. Paid up additions premium into your policy and be a greedy banker. So even when you’re banking on yourself, you want to be as greedy a banker as you can because that’s just extra profits for your retirement or for future capital purchases.


Yeah. I think it’s really potentially, a powerful strategy, depending upon how somebody leverages it. So let’s also continue the 100,000, $30,000 strategy, or, excuse me, scenario and then let’s also think about that from a death benefit. 


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Financial Planning Strategies: Be A Good Banker with Yourself


So let’s say that a business owner has 100,000. They loan out $30,000 into their business. Death benefit is something separate from that 100,000. And then unfortunately, that person passes away. And so now that loan hasn’t been repaid back to the policy. I think if I’ve understood this correctly, the $30,000 is essentially just subtracted off the death benefit. And then whatever that death benefit is less the 30,000 was paid to the family.


Please correct me though if I’ve understood that incorrectly. No, you’re right on the mark. That’s exactly right. So let’s use for sake of example, the death benefit is half a million bucks. It’s always going to be larger than your cash value by, just the nature of the insurance contract. So if our cash value was 100 grand, our death benefit is 500 grand, and we borrow from the cash value against the cash value, 30 grand.


Okay, so if all those numbers are in our mind as we’re driving down the road and we pass away, then the next day, then the car that we purchased with that 30 grand is left to the family with no loan against it. They’re not going to repo that car. It’s yours. You have the title to it, but the death benefit is reduced by any loan outstanding.


So the family wouldn’t get 500 grand. They’d get 470,000 bucks. Income tax-free. They’ll have to struggle along on that, I guess, rather than the full 500,000. And of course they get the car. Wow. So, you know, if that is why there is no required loan repayment schedule in your lifetime, it’s not like the insurance company starts calling you a dinner time or wrecking your credit.


If you don’t pay that loan off now, it’s in your interest to pay off these loans. Don’t steal from your own bank because you know what? Heck, we might have another car to buy a few years from now that we might like to have in the cash value of our policy for the next car, or the next kid’s college or whatever.


So it’s always in your interest to be a good, prudent banker with yourself. Don’t steal from your own bank, but the insurance company actually is happy, when you take loans, when they’re getting a guaranteed interest rate on the cash and two, they’re relieved of that large death benefit liability to your family, at least in the amount of the death benefit reduced by the loan.


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Financial Planning Strategies: A Story About Doubling Down


So I hope I didn’t lose anybody there. But the key is you control the environment, with where your money is living, when it’s in these policies. The the insurance company has no claim to your cash. You have first rights to the cash value. You have first rights to withdrawing or loaning against that policy’s cash value. And you control how you get the money back in the policy.


And if you never pay it off and there’s a cash value when you pass away and a loan balance when you pass away, they deducted from your death benefit. Wow. Okay. So here’s another clarification. I think if I’ve understood it correctly, I’ve heard that. Let’s say that, again, one of our Onward Nation business owners, listening to you has some cash in their business and they know that they need to get it out of the business so that it doesn’t just kind of fall through the cracks in the operating expense account.


They need to get it out of the bank. So they’re just not seeing it. And they don’t just kind of like let it fall through the fingers. They need to get out of the business and then they do this. The policy itself, I think, can be a business asset, even though the owner might be the insured is and then the owner as the insured, their family could be the beneficiary, but it’s still a business asset.


Do I understand that correctly? You’re exactly right. Yes. There’s some important points you brought up there. I want to start with a quick story, if that’s okay. You promised at the beginning, so I’ll bring that up now. Okay. As the gentleman that had $1 million line of credit with a local bank for his business, he had a nationwide business.


He had sales guys going around the country. Had a regular use of this line of credit for a million bucks. And, you know, 2008 and nine come and go and he gets the phone call. We all know what we’re talking about. The bank has called this loan, and they first brought it from 1 million to 500,000. Then they dropped it to 250,000.


And then within two months they were exiting his business and they termed out his loan, meaning he had to come up with $1 million to pay them off over five years. But he also had his business to run, so he still needed that million dollars line of credit to operate the business. so the bank essentially was saying, you know, hey, we’ve been suckin on your back for the last umpteen years, but we’re done.


We’re going to bleed you dry and good luck getting that million dollars anywhere else. So what did he do? Well, he doubled down, right? Just like you talk about on your podcast. He doubled down. He said, I’m going to start. I’m done with banks. I’m going to pay these suckers off. But I’m also going to set up my own line of credit to myself using one of these policies.


So he had to kind of double dip there for a few years. But he paid those guys off the vampires off, and he set up a brand new line of credit using his policy. And in five years, he had $1 million line of credit that he used every year along the way. All five years. And now beyond that, to use as a permanent source of capital.


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Financial Planning Strategies: Hedging Against Business Risk


You know, there’s an old quote by Mark Twain. The quote says something like this. You know, a banker is a fellow who will lend you his umbrella when the sun shines. But once it back as soon as it starts to rain. And we all know how banks work, right? That’s exactly how they work. So if I mean that’s their job, they have to be profitable, right?


So why not do what banks do? Don’t listen to what banks are telling you to do with your cash. Instead, watch what they do and go do that. And what do the banks do? By the way, banks are some of the largest purchasers of these life insurance policies. You know, somewhere in the ballpark of 200 billion with a B in cash values in their safe tier-one capital assets.


So that should tell us something. Okay, now let me back away from that story until you answer your finally answer your question, Stephen. So, yes, you can own these policies inside your business. That is totally fine. And there’s some good reasons to do that. You can also personally own the policies. And I usually do this with my own business and my own policies.


All of my policies are currently held outside of my business. Why? Well, I realize that my business is my greatest investment tool to yield capital, income, etc. and so many businesses would say the same that you guys are getting a better rate of return in your business than probably your mutual fund or your Sapphire IRA or anything else.


So why not use some of your policies, some of your profits, and your business to fund your policy to make sure that you can sort of hedge against business risk, you know, if there’s going to be a down year the year before you retire. Let’s say that you’re selling something in 2019 and you plan to retire in 2020.


And all of a sudden the pandemic hits and your business is worth half of what you thought it was going to be when you hope to retire in 2020. Well, Waps, you know, the business had a major market risk, and all of our cash was tied up in that speculative asset. And then unfortunately, businesses, even well-run businesses, are going to be called speculative assets in your portfolio because they’re just so risky.


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Financial Planning Strategies: Borrowing Money from A Policy 


So by using the policy as a warehouse for your wealth, constantly shoveling money into that policy, you’re getting that money outside of the business, but not away from your business. And here’s what I mean. Every time my business needs a business car, or if we need an investment in marketing or if we want to expand our business, we borrow from our policies to invest in our business.


Guess what? Our business is my favorite customer at my bank because the business can pay me back. And, I get to get to charge my business a little interest, on my own leasing company, from my cars to my business. Okay, so the business all of a sudden is now beholden to me and my family. And we’re constantly revolving cash between the business and the family.


Of course, keeping the accountant happy. We have nice paper trails and everything, but now we don’t have to rely on an outside bank. We never have to worry about the bank cutting our line of credit or trimming out our loan because we are our own source of financing for our business. This is phenomenal and it goes back to so.


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Financial Planning Strategies: Story Wrap-Up


So thank you for the stories. Thank you for the tangible examples. I’ll go back to the thing that I, the statement that I felt was really profound and that we’re going to make the title of this episode when you said how to pandemic Proof your Cash. I think you just illustrated that, with those examples, real, I don’t know if it’s inappropriate for me to say I love the million-dollar line of credit example because, as you were telling it, I certainly felt the pain of that business owner.


But then also, it was kind of like the act one, act two, sort of act three of storytelling. I saw then the act three of of him coming out of this five years later and then being so much stronger than he was in the beginning, even though he had credit at the beginning line of credit and probably felt pretty good until the pain of act two in the, you know, the pain in the climax of that then into three.


But then, being on the other side of it, having this rock solid asset that he knew that he would never, ever not have money, that he needed for the business. Amazing. Amazing story. So this is great. I know that we’re quickly running out of time here. Mark and I want to be respectful of your schedule. So I know we covered a lot.


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Financial Planning Strategies: Final Advice


But before we go, any final advice about financial planning strategies? Anything else you think we might have missed? And then please do tell Onward Asia business owners the best way to connect with you. Well, thank you. Yeah. I would say again, it’s not a get rich overnight scheme. You want to really be patient with this strategy. It’s also not just, you know, pull it off the shelf and set up one of these policies.


I’ve met way too many insurance agents that just read a book or two and thought they knew what they were doing, and the policy itself was engineered incorrectly. It’s a lot like a smartphone, you know. I have no clue how they squeeze a camera and all these sensors into this phone here, but all I know is it was engineered well from the beginning.


So all I have to do is swipe up and it all works. You know, it’s the same with these policies. If the advisor knew what he or she was doing. That’s why I really recommend working with a bank on yourself, professional. They’ve gone through a credential process that’s monitored and tracked, and they have to keep up with ongoing continuing education credits.


This is the standard bearer for this concept that I’ve been able to discover over the years. and so I would highly recommend making sure you do your due diligence to make sure this is what you want your money to do for you. It’s certainly not something that you just jump into. It’s not a good fit for everybody, which I know we don’t have time to get into all those details today, but we’d be very honored to sit down and chat as bank on yourself.


Professionals would be happy. Me and my team would be happy to chat for 10, 15 minutes just to answer any other questions. If you want a data first, you can check us out at Not Your Average Financial podcast where you. Wherever you find this podcast, you’ll hear us there. Not Your Average Financial Podcast where you can go to


That’s Awesome. Thank you for that, Mark. And on amount matter how many notes you took and I took pages of them or how often you go back and re listen to Mark’s words of wisdom. The key is you have to take what he so generously share with you, continue your education, take what you’re learning, and apply it into your business right away and accelerate your results and Mark, we all have the same 86,400 seconds in a day.


And I’m grateful that Chris Prefontaine thought to, you know, kind enough of both of us to to make the introduction so that you and I could meet. But thank you so much for saying yes. Coming onto the show, sharing stories, sharing insight, wisdom, expertise to help us move our businesses onward to that next level. And pandemic proofing your cash. That was awesome. Thank you so much, my friend. Thank you. 


This episode is complete, so head over to for show notes and more food to fuel your ambition. Continue to find your recipe for success here at Onward Nation.


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