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jethro-host176_1_06-17-2024_143640: Welcome to the special episode. This is a simulcast episode of My Bonus Money and Transformative Principle. And if you haven't been listening to my bonus money I want you to go check that out. Lots of good stuff over there. Talking about how educators can earn some passive income and do some different things with their money. 

So what. Here's what we're gonna talk about today. We've been talking about this idea of how to [00:01:00] make your money work harder through options trading. That's what's been our focus. We've talked about some other things also, but really that's been a big part of it. And one of the ways that you can look at that is that is risk on money. 

That's money where you are taking risks on it. And then you have risk off money which I learned from our guest today Hutch. And so we'll get to him in just a second. But that idea of having risk on versus risk off money and what you do with money that's in those different piles is, is important to what we're chatting about today. 

So we are going to invite Hutch on. Hutch is the founder of banking truths.com. You can search for him online banking truths.com or just look for Hutch Hutchinson and you'll be able to find him. Lots of really great stuff. Tons of really informative YouTube videos. So, Hutch, welcome to my bonus Money. 

Great to have you here. 

squadcaster-hig6_1_06-17-2024_143640: Yeah, thanks for having me Jethro. And my mother did not name me Hutch Hutchinson. It's John Hutchinson, but [00:02:00] John is such a forgettable name and I like, if I'm in any kind of group situation, they say, John, there'll be three of us looking over. So, in many circles I was already going by Hutch and it just works and people 

jethro-host176_1_06-17-2024_143640: Yes. 

squadcaster-hig6_1_06-17-2024_143640: So 

jethro-host176_1_06-17-2024_143640: Well, and I have interviewed a couple people lately who had double first names like Jennifer Jennings for example. And so that can be, that can sometimes be confusing, Hutch, welcome. Glad to have you. So let's talk first about this idea of risk on versus risk off money, and give me your perspective on that. 

squadcaster-hig6_1_06-17-2024_143640: Yeah, sure. So in general, like if you go look at a hedge fund, you look at banks themselves, what gives them the opportunity to earn those greater rates of return is usually some kind of pool of reserves. I. Like a bank is able to do lending because they have a certain amount of reserves, there's actually reserve requirements. Most traders, whether they be institutional, professional, or even whatever [00:03:00] recreational traders, excuse me, they're able to take risks. In strategies where there's a lot of volatility, a very high risk, high reward because there's a bigger pool of money that if they fail they can pull from and try again. Same thing. I actually just got back from Las Vegas. I was playing some smaller world series of poker tournaments, poker players, they, the function of how big of games or how big of tournaments they play is a function of how big their bankroll is, which is usually a lot of money. Part in cash, not in a mattress, but usually in a bank these days, there's a high yield saving. 

There's something called a high yield savings account, but for the last 15 years, a high yield savings account, the rate of return started with a dot. And so. One of our flagship videos@bankingtruths.com. In fact, if you go to banking truths.com/banks, I'm sure Jethro will have it in the show notes as well. As we have a four minute video where we actually look at the balance sheets of major banks to see, well, where do they put their safe and liquid [00:04:00] reserves? And although they do have some money in cash or bearing accounts they have quite a lot of money in. Life insurance policies on their key executives. 

And what we do is we take that big institutional thinking and bring it down to family, fiscally responsible families, small businesses. My wife is an educator. She teaches tk. They've asked her to be an administrator before, but she has a gift. She loves doing what she does. When we're in the grocery store, like. 

Little kids and babies will always be looking at her. She just has that energy, so she's right where she needs to be. And when I actually started in the life insurance industry. I actually, before I learned about infinite banking, I learned about something called pension maximization, because that was the biggest crux of our retirement plan was this state funded pension. And there actually is a strategy where you can pair it with life insurance to make sure you're able to get the highest possible pension payout. Now, what we can talk about today is how we can [00:05:00] pair all of those things. Together because the educators that are listening to your show and learning how to use Robert Robinhood excellent interface, by the way, I trade options myself. Again, they're only gonna do that for a small fraction of their money to try and earn that extra alpha. Meanwhile, they're gonna have an emergency fund in cash or a certain amount of money in cash. And meanwhile, they had this massive part of the retirement fund sitting in stirs or pers or whatever it is. That is promising them income for the rest of their life and there's a way to weave life insurance product designed a certain way and a way to funnel money through there to work, enhance all of those efforts. 

jethro-host176_1_06-17-2024_143640: so let's look at this from that perspective and there's a lot of different paths we can go down to talk about this, but we wanna talk about that pension thing today. 

Pretty much everybody listening to this probably has I have a pension in the state of Utah. 

jethro-host176_1_06-17-2024_143640: I only taught there for eight years, but it exists. And so [00:06:00] what can we do with that pension? How can we maximize that so it'll be as beneficial as possible to us? 

squadcaster-hig6_1_06-17-2024_143640: Yeah, so let's talk about that and we can weave it back into, because really a life insurance policy that's designed for pension max or infinite banking is kind of like a now and later. Remember those candies now and later, right? They taste good now and they taste good later. They last forever at one point. 

I thought about using that as part of my branding, but it's copyrighted even though they don't exist anymore. But really it should work. Something like that, right? Like one of these now and later candy. It can be there in its existence and the fact that it's there can help you maximize your pension whenever you decide to take it. 

You're a young guy, Jethro, I assume it'll be another 10, 15, 20 years before you do that. Obviously, the longer you wait, the more you get as a lifetime payment, but you can actually use the equity in that policy to help support your, whatever ventures you're doing, to build wealth, whether it's investing in real estate or trading options or whatever that is. So the biggest, 

jethro-host176_1_06-17-2024_143640: What does that mean? You can use the value, is that what you said? You can use the [00:07:00] value in that pension. 

squadcaster-hig6_1_06-17-2024_143640: No, you can use the value, the cash value of the life 

jethro-host176_1_06-17-2024_143640: Okay. 

squadcaster-hig6_1_06-17-2024_143640: to enhance those other 

jethro-host176_1_06-17-2024_143640: Okay. 

squadcaster-hig6_1_06-17-2024_143640: So let's talk about that for a second. A life in a permanent life insurance policy always has two parts. It has a death benefit and it has a cash value now with a whole life insurance policy, which I realize with some media celebrities is a dirty word. But when you design a whole life policy properly, there is a way to actually compress those commissions to actually overfund it to where instead of saying, what's the least amount of money I can pay for the most amount of life insurance, the way we solve it for our clients is we're saying, what's the least amount of insurance we can wrap around your cash that the cash performs well? Because the costs, the commissions, the fees, so to speak, contrary to popular belief, are not based as much around how much money you're putting in the policy. It's more so based on how much death benefit it's 

And so you have [00:08:00] a permanent life insurance and it has these two parts, benefit part is what will actually help you enhance your pension, and we'll get to that. But there's always a cash value. Think of it almost as like the equity in your home. Like if you sold your home right now, it would go for a certain purchase price, you may not have that much equity in there if there's a loan against it, right? So the equity is the difference between what the purchase price would be and how much how much that loan is. 

But life insurance policy with no loans really, you're prepaying for a future death benefit. And so you actually build equity in the cash value that you can use along the way. And so let's just go back to the death benefit portion for a moment. We'll get to the cash value part. When we talk about the options, existence of a permanent death benefit, a death benefit that doesn't go away is contractually guaranteed, actually allows you to get a higher pension payout [00:09:00] if you didn't have 

jethro-host176_1_06-17-2024_143640: Okay. Wait, how does that work? So, so having a death benefit allows me to get a higher pension payout from TURs or PERS, or whatever it is 

squadcaster-hig6_1_06-17-2024_143640: Yep. 

jethro-host176_1_06-17-2024_143640: I retire. 

squadcaster-hig6_1_06-17-2024_143640: Yep. 

jethro-host176_1_06-17-2024_143640: Tell me about that. 

squadcaster-hig6_1_06-17-2024_143640: When you go to retire, and maybe you've already seen some of these estimates, they're gonna give you different options. Like they'll call it option A, option B, option C, option one, option two, option three, or the a hundred percent option, the 75% option. The 50% option is maybe a lot of people are familiar with, which basically the a hundred percent option basically says, Hey, you can have a hundred percent. what you're vested in this pension, let's just call it, let's just call it 10 grand a month, right? For just 

jethro-host176_1_06-17-2024_143640: Okay. 

squadcaster-hig6_1_06-17-2024_143640: You could have 10 grand a month for the rest of your life, but if you die, your heirs get nothing. And a lot of people are married and so they're not gonna choose the a hundred percent option or option A. 

They're not gonna check that box. There's gonna be a box below it that [00:10:00] says, look. Instead of a 10,000 a month, we'll give you 9,000 a month. But if you die, your wife will get half. She'll get 4,500 a month, and a lot of people will choose that, right? If they say, I want my wife to have the whole thing, they'll say, okay, we'll give you 8,500 a month. And if you die, your wife, your husband, your surviving spouse will get all 8,500. And so obviously the more you promise to other people in the future, the less you get now. Right. 

jethro-host176_1_06-17-2024_143640: Yep. That makes sense. 

squadcaster-hig6_1_06-17-2024_143640: Let me ask you this question, Jethro just think of this like an educator right now. Don't think of it in terms of product, but if you are gonna give money to an institution. TURs or purrs to promise you to promise somebody else who you love money when you die. What would that product be called out on the free market if you're gonna give an institution money [00:11:00] to make sure somebody else gets money when you die? What's that 

jethro-host176_1_06-17-2024_143640: called life insurance. 

squadcaster-hig6_1_06-17-2024_143640: It's called life insurance. And what's interesting is educators. Always have a very significant life insurance decision they have to make when they retire, which is arguably when life insurance is the most expensive it will ever be and the hardest to 

jethro-host176_1_06-17-2024_143640: Yeah. Well, and this is why I wanted to talk to you because after watching the video about this, it became very clear that you can make this decision it in your twenties or thirties or forties, and it seems like it would be a lot cheaper. To make that decision now than to make that decision when you retire, when you may have other health complications or you were a cancer survivor, or any of those kinds of things that really affect your ability to get that kind of life insurance later in life, or you're obese. 

squadcaster-hig6_1_06-17-2024_143640: [00:12:00] Absolutely. I'll take it to a different level with you. It even still pencils if you're in your mid fifties. And here's why. any actuarial assumptions and actuarial just means any insurance company has actuaries. I. They're math geeks that figure out exactly how many people die. Like the joke is, insurance companies already know when you're gonna die. 

Maybe not your date actu Exactly. But they already know with given your health today, when you're gonna die on average. And those same actuaries are who work forts and pers and stirs, they hire actuaries to figure out what kind of pen pension you're entitled to. And so. reason why it's still pencils for people in their fifties as long as they're healthy is because with any kind of major sweeping, actuarial assumption, pricing in the good, bad, and the ugly health wise. So if you're average health or above average [00:13:00] health, can, and you can qualify for that in the free market. With a private insurance policy, you actually get, call it better pricing than when you just get lumped in with the good, bad and the ugly because the actuaries for tourism and pers, they don't know what your health is. 

And so they have to av give you the average where probably some of the, your listeners right now, the people they work with aren't in the best health. But they can qualify for their own health and just naturally get better pricing long as people can get a standard rating or better if they get a preferred rating or preferred. 

Plus, we found that at pencils almost right up until retirement. 

jethro-host176_1_06-17-2024_143640: Now that, okay, so let's take a step back again. You said if you it, your death benefit upon retirement your death benefit. Having this life insurance policy actually helps you get more money from. From your retirement, your pension, what is which one of those does that work? Does that mean you get the a hundred percent option where you get all and your spouse gets nothing? 

Is that [00:14:00] what you mean? 

squadcaster-hig6_1_06-17-2024_143640: So it could be, and this is the math that we help our clients do. we would have them run the printouts from tours per stirs and show the different options, and then they can clearly see how much they'd be giving up in retirement. we show them like, look, as long as you have X amount of death benefit. can exist and we can actually, we pair that with another calculator. It's actually an annuity calculator, which is another insurance product. They use actuaries. We're not saying to buy an annuity now, but we're saying like, look, if you died the day after you retired, could we take this death benefit that your family would get put it into an annuity, a guaranteed annuity that would create the same after-tax payment, if we can do that. Then yes. Having the existence of a whole life insurance policy with a guaranteed death benefit actually gives you the confidence to go in there and check the a hundred percent box. 

jethro-host176_1_06-17-2024_143640: Because [00:15:00] the reason why we don't check the a hundred percent box is because we're afraid that if we die, our families are gonna be left destitute. Our spouses are gonna be left destitute, and so we don't want that to happen. So we choose the 50% option, and that makes it so that we are sure that after we die. 

Then our beneficiary is going to continue on and have money coming in, which is your spouse. 'cause your kids don't get anything from the pension, right? 

squadcaster-hig6_1_06-17-2024_143640: Well, it's just so everybody knows Jethro, and I did not script this because I wanted Jethro to be 

jethro-host176_1_06-17-2024_143640: Yes, I'm very raw. 

squadcaster-hig6_1_06-17-2024_143640: really 

jethro-host176_1_06-17-2024_143640: I'm sweating more in this interview than I have in months. 

squadcaster-hig6_1_06-17-2024_143640: Well, 

jethro-host176_1_06-17-2024_143640: Yeah. 

squadcaster-hig6_1_06-17-2024_143640: warm. We're gonna give you that too. Jethro. So, so here's the deal. What you just said is gold, and here's why. Here's why. Owning your own life insurance policy is better. Not only from a numerical standpoint, can calculate that, but you brought up something else. What happens if you check the 50% box? 

You never heard this podcast. You didn't know us, [00:16:00] you and your wife constantly check the 50% box to make sure that she's taken care of. And the day after you retire, you're driving off on vacation, and you get into a car wreck you both die. How much do your kids 

jethro-host176_1_06-17-2024_143640: Well, they don't get anything. 

squadcaster-hig6_1_06-17-2024_143640: All that money, all that equity that you paid in and was contributed on your behalf now gone. So it's not gone. It just gets disseminated amongst the other educators. It's kinda like the old Roman soldier, this is how life insurance was started. A bunch of Roman soldiers were going off to battle and one of the Ys went around with a cup and everybody threw a coin in the cup and whoever's husbands didn't come back from war split up the cup. That's the origins of life insurance, and that's basically what happens when you choose the 50% box. But let's just say on the other hand, you listen to this podcast, you did some calculations. You knew that your wife would get, or your wife or husband would get the after the same as the 50% box. But you could take the a hundred [00:17:00] percent box and let's just say you did it early enough to where your policy's totally paid up by the time your retirement. 

So you don't have even have a bill, but then you go off on vacation. You die that first day. So you wa you die, your spouse dies. She's the primary beneficiary who's the secondary beneficiary is gonna be on that life insurance 

jethro-host176_1_06-17-2024_143640: Probably your kids 

squadcaster-hig6_1_06-17-2024_143640: So would they get something? 

jethro-host176_1_06-17-2024_143640: if through the life insurance policy, but not through the pension still. 

squadcaster-hig6_1_06-17-2024_143640: That's right. Yeah. 

There's only four possible things that can happen. So after you go in, in whatever box you're gonna check. It doesn't matter. Like let's not even talk about a hundred percent, 75, 50% box. Whatever box you check, there's only four possible things that could happen. You and your spouse can both live to life expectancy. That's the most common and the best possible outcome. So if both you and your spouse live to life expectancy, would you have been better off checking the a hundred percent box, the 50% box, 

jethro-host176_1_06-17-2024_143640: hundred percent for sure. 

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How about this, [00:18:00] and this depends on jurisdiction. You check the 50% box to make sure, in this case, we'll just say your wife, Jethro, your wife is protected. 

squadcaster-hig6_1_06-17-2024_143640: You check the 50% box. She goes on a girl's trip, and then she dies. The day after you check the 50% box. There are some jurisdictions that will let you choose a new beneficiary. Many of them don't. You just kind of lost those coins to the tin 

jethro-host176_1_06-17-2024_143640: Yeah. 

squadcaster-hig6_1_06-17-2024_143640: Right? So if you check the 50% box and then your wife dies early, your beneficiary, would you have been better off checking the a hundred percent box? 

jethro-host176_1_06-17-2024_143640: Yeah. 

squadcaster-hig6_1_06-17-2024_143640: Yeah. The other one we talked about is both you and your spouse di early. That's the real risk of not checking. That's the risk that's there, but we can actually calculate it to where we make sure that everybody's taken care of including the kids. And that's not the risk. The risk is with this last one, the risk is you check. [00:19:00] It's a hundred percent box, but then you die early and your wife's less left with nothing. we can calculate it to where we make sure the policy will do at least, that, at least that. And the fulcrum point, the point of testing is the day after you retire, what's great is every year you live past that. Now you actually have too much death benefit because you don't your wife isn't gonna live as long. Meaning if you died five years after you took out the life insurance policy, the amount she needs in an annuity five years later when she's five years closer to the grave, we don't have to put as much an annuity. 

So therefore you don't need as much death benefit, which means you as the educator with the pension, get to spend a little bit of your cash value along the way as a supplement, will lower the death benefit, but you don't need as much. year you live, you don't need as much death benefit to make sure that the 50% option is provided for your [00:20:00] spouse. 

Does that make sense? That was confusing a little 

jethro-host176_1_06-17-2024_143640: Yeah, so, 

squadcaster-hig6_1_06-17-2024_143640: but does 

jethro-host176_1_06-17-2024_143640: so the question then is. If you have the life insurance policy, then your heirs, your kids are taken care of, regardless of which of those scenarios happens. Right. 

squadcaster-hig6_1_06-17-2024_143640: True. Going back to the four options the, one of the major benefits of this situation is you get to pick and choose your beneficiary, and you get to change it as you go. So obviously if you ex you, when you have a life insurance policy, the more you spend with the cash value, the less death benefits there for your wife. 

But as you get older, she doesn't need as much death benefit. And then obviously if you die or whenever you die and she gets the death benefit, that's for her. But if both of you die at the same time. Yes, the kids are taken care of. They're just next in line. You're not sharing it with a bunch of soldiers in the tin cup of the pension. 

You have your own private life insurance policy that goes to your heirs based on your health, your premium at 

jethro-host176_1_06-17-2024_143640: Yeah. Okay. [00:21:00] So ha, having this set up then makes it so that you have. Better options at your retirement because then you get to decide how you want to do that, and you may still choose to do the 50% because you, even though you feel like you're taking care of, you may want your wife or your spouse to have even more money after you're gone for whatever reason. 

Right? So, but you get to choose that. Whereas otherwise you just you have. 

squadcaster-hig6_1_06-17-2024_143640: You painted yourself into a corner, you get to that meaning you painted yourself into a corner. That's the only option. And we get the bulletins from the stirs and it's like, oh, well we changed the assumptions with inflation and everything else. You're totally at the mercy. And so I think it, I. you and I were talking about your podcast when I thought this might resonate with your listener, it seems like what you're teaching them is to take more control of their situation, right? Their educators, their specialty is in educating children, but to educate yourself about your own money [00:22:00] options. 

Not to the point where it's like another full-time job, but this is something that you can do to exactly give you that, to give you more control and more optionality. For when you go to check that box. Not to mention as you're paying for this life insurance policy, there is actually cash value that builds up along the way that you can use for whatever you need, 

jethro-host176_1_06-17-2024_143640: Yeah. 

squadcaster-hig6_1_06-17-2024_143640: If the bottom falls out of the real estate market and there's right opportunity abound, or now all of a sudden some of the stocks that you were looking at valuation just got cut in half because you know the sky's falling and right, and you wanna own these companies, you can actually use the cash value in your policy. to acquire some of these 

jethro-host176_1_06-17-2024_143640: Okay, so, so that I think is gonna be a question for our next conversation, but I have another question about this building up to it. What you are talking about is essentially going to require me to have another payment that I'm putting something into over the course of my career. Right? So what does that [00:23:00] look like and. 

Like we hinted at that a little bit, but you can use that money for other things leading up to that. But what does that look like? How much is that going to be? Because my tour's contribution that the district pays is typically like seven to 15% depending on where you're at in the system, what your level is. 

squadcaster-hig6_1_06-17-2024_143640: it's a big number. So let's talk about that. Where nobody likes a new bill. And so whenever people hear about any kind of insurance, they just automatically equate it to like, I don't need another bill. Right? I only got so much coming in. I got my own kids I want to put through college, right? We wanna do stuff. 

We want to go on vacation. I'm not saying to just stop your life. However, a strategic redeployment of cash flows is possible. And what I mean by that is. A lot of money is passing through everybody's hands, six figures a year through Everybody on this call is just passing through [00:24:00] our hands and where the infinite banking comes into play, and I realize we'll talk more about this, is you can redeploy some of the money that you're normally just spending for your predictable inflows and outflows and pump it through a policy designed to be your own bank, and it will naturally have its own velocity and momentum. is gonna require you to carve off a certain amount of money you get to choose what that is where we typically help find it for people. Like some of the places we find people, money is places like this when people are overpaying on mortgages. That are 3%. I understand if you're overpaying a mortgage that's seven or 8%, but overpaying a mortgage that's 3% in spite of what you've heard, has not been tested, measured mathematically that's a good idea. any overpayments of mortgages at that low money, it's almost like getting free money. [00:25:00] You're borrowing below inflation and if the rate of return that you can get on this policy, just the cash value. Long term can beat the hurdle rate the debt you're trying to knock out. This is an easy place to redeploy money that's really not serving you because as soon as you overpay the mortgage, it's out of your control. If you want it back from the bank, they have to give you some other kind of 

jethro-host176_1_06-17-2024_143640: Right. 

squadcaster-hig6_1_06-17-2024_143640: I just got approved for a HELOC today. They approved me today. But if the sky started falling and I wanted to buy stocks they lost 30 or 50%, that's usually the time they don't 

jethro-host176_1_06-17-2024_143640: Yeah, exactly. Yep. 

squadcaster-hig6_1_06-17-2024_143640: So that's one place. Another place that's really easy is when they're contributing to a 4 0 3 B or a 4 57. What's that money for? Why would your audience be contributing to a 4 0 3 B or 4 57? For what purpose? 

jethro-host176_1_06-17-2024_143640: That's because we don't have the pension. Or we want an additional retirement support. 

squadcaster-hig6_1_06-17-2024_143640: That's it. So in, in my [00:26:00] wife's district, they call it pension two. You have your pension, but they, you con you, they advocate and suggest that you should contribute to a 4 0 3 B and or 4 57 for supplemental retirement income. Well wait a second. Well, let's just think about this for a moment. me, that's almost like having one foot on the gas and one foot on the brakes because the foot on the gas. The foot on the gas is putting money in a 4 0 3, 4 0 3 B, and 4 57 to get extra money in retirement. then if you have a strategy that's going to cause you to paint yourself in a corner and check the 50% box that lowers your pension, the foot on the brakes that they don't even know they have on it. And so if the purpose of whatever cash flow, whatever financial energy you're pumping into a 4 0 3 B, 4 57 is to enhance your pension. We don't know what the stock market's gonna do between now and then it will probably enhance your pension to [00:27:00] some degree, but we don't know how much. But we can predictably say, let's just make sure you get 100% of your pension. 

Or even if you go from 50 to 75, maybe you can't afford a policy big enough for the a hundred, but you can get from 50 to 75. Isn't that a better way to get supplemental retirement 

jethro-host176_1_06-17-2024_143640: Yeah, for sure. So, so let's talk about that cost piece because you, there's gonna be the cost to it and so. Do you need to be super wealthy to start this? Like, can you start with a lower insurance policy and maybe it's just, it's not even to the 50% level, so you still have to start with 50%. Can you adjust it over time? 

Is it something that you can say, when I'm a first year teacher, I can do a policy that's this big and then after 10 years of teaching, I can change the policy and make it bigger? Can that kind of stuff happen until you start figuring out. How you can actually afford it. 

squadcaster-hig6_1_06-17-2024_143640: It's a great, it's a great question. There's a lot 

jethro-host176_1_06-17-2024_143640: Yeah. [00:28:00] Yeah. 

squadcaster-hig6_1_06-17-2024_143640: Let's hit 'em all. So the truth of the matter is, once you start any kind of permanent insurance policy, you can't increase it without underwriting again. means like getting medically tested and all that stuff. And by the way, thankfully, like a ai, AI is all the buzz these days. There are multiple companies now that are doing AI underwriting that if you're pretty healthy and aren't on prescriptions and everything else, a lot of times you fill out a DocuSign application. For 15 minutes, they, you give them permission to go scan your health records, scan your prescription record, scan your driving record, and they go out to the web and like we're getting like 24 hour approvals at the best rating. So you may not even need that. So the answer is cannot increase it without re-underwriting. However, we have workarounds for that. So most people know what a term insurance policy is. Have you ever heard of [00:29:00] convertible term 

jethro-host176_1_06-17-2024_143640: I've heard of it, but I don't totally understand it. 

squadcaster-hig6_1_06-17-2024_143640: Yeah it's pretty simple. Like I liken it to renting with the option to buy. First of all, when you have term insurance coverage, that's like, it's like a renting, right? You're renting coverage for 10 years. You're renting coverage for 20 years, right? And you have this rental agreement, whatever it is, when as long as you pay rent, you have coverage, you stop paying. You you get evicted, right? And when the lease is up, you're done. Unless you renegotiate a new lease. Obviously with life insurance, the older you are, the terms will be worse, right? You're not as good of a tenant. It's a life insurance company. And when you buy whole life insurance, it's almost like buying versus renting. 

Now you've bought. The property you've bought the right to that million dollar death benefit or $500,000 death benefit or whatever it is. And again, your cash value accrues equity over time. just going back to how we use convertible term. Convertible term is renting with the option to [00:30:00] buy. So there are such contracts out there, like in the real estate market, you can rent or lease with the option to buy. You can actually do that with convertible terms. So most of your listeners probably have a term policy. They have a million dollar term policy or $2 million term policy. We can refinance that term policy or just add on to it. And that not only gives them. More coverage that just temporary rental coverage now, but whatever rating they get on that term policy, they can actually convert that to permanent without having to retest. The pricing will adjust according to the age of that time. But that gives them the guaranteed right to lock it. They get the best rating, they can lock that in and whenever they get a raise, so like my wife just got like an 11% raise 'cause they didn't get raises for like the last three or four years and the union. So when they get something like that and all of a sudden there's extra cash flow they can take whatever convertible term they have. And with the convertible term, it's almost like a plot of land. You [00:31:00] can bifurcate the land, you can carve off a piece of it. Convert some of it and keep the rest as term. 

jethro-host176_1_06-17-2024_143640: So the reason why I asked that question is that it, my impression has been that you have to make this decision. Early on and then you're stuck into it for the rest of your life, unless you want to go through this big hassle and it sounds like there is a way to structure it so that you make the decision early on and then you work towards that throughout your life and you adjust as time goes on rather than saying, well, I made the choice when I was 21 and my first year teaching, and now like, I'm just stuck with it. 

And that's no good for anybody. 

squadcaster-hig6_1_06-17-2024_143640: So you're right. The misconception you had is probably pretty common. Probably a lot of your listeners have the same mis misconception when you're working with knowledgeable agents. There's a way to structure a combination of products to where it gives you, again, a lot of optionality and it, you can layer into it. You can layer into it as cashflow allows.[00:32:00] 

jethro-host176_1_06-17-2024_143640: Yeah. I like that. Okay, so we've got a lot that we've talked about. We've got a lot to think about in preparation for another conversation. One of the things that we wanna talk about next time is why making this decision allows you a benefit later, but then also allows you to do things with that money. 

As you're getting towards retirement, rather than waiting to have access to it when you do retire. Now, we all know with our retirement plans, we can't access 'em until we are, I think it's 57 and a half at the very early, 59 and a half, thank you. 59 and a half at the very earliest. And so if you need access to new money before then, for whatever reason you can't touch any. 

Retirement policies. So, so we're gonna talk about next time how to access that money that that will benefit you later before you get to that point, so you don't have to wait till you're 59 and a [00:33:00] half. That's more about the infinite banking type stuff that that you teach about. So where can people go to learn more about what we've talked about today, like maximizing the pension. 

squadcaster-hig6_1_06-17-2024_143640: Sure. So I have a video that's been on YouTube for a long time. When you look at the cover, it's actually a picture of my wife with her a hundred percent, 75, 50% option right there. If you go to banking truce.com/pension or pensions, I'm gonna have that redirect. Straight to that video. 

It's like a little Easter egg because it doesn't necessarily have to do with infinite banking. It's really a niche strategy amongst educators that has been around forever. Like if you just look up pension maximization online, you'll see it's been ar been happening forever. But again, it just makes sense. 

So it's like a little 11 minute video that I made and I think. this podcast, it, I realize how many people are in the dark about this, and since then, our clients have not, excuse me. Our agents have not only helped teachers, principals. Firemen, police officers, [00:34:00] FBI agents we've helped a lot of people that have this similar thing, but it's really just a niche thing for people with government pensions and it is the crux, the core of your retirement. 

So. Putting the most energy. I think it's great learning. The option strategy and the stuff you're teaching 'em, I think will really help. I enjoy it too. It's fun, but making sure that the base, the core part of their retirement is increased on a guaranteed basis, I think is so important Where it'll help you to look at the video just to understand the concept where the rubber mill, me, where the rubber really meets the road is to have your numbers modeled out. 

And if you go to banking truce.com/schedule. You can actually put something in there or on banking truth.com/pension. There'll be a link to schedule and to really do this well, it is definitely more science than art where we not only need the pension numbers, but we're gonna stress test that and cross-reference that with not only insurance rates, but [00:35:00] future annuity rates on the age of your surviving spouse to really stress test and to make sure at no point. Are you worse off than if you check the 50% option? What most people find though, is that not only are they protected at least to the level of that 50% option, but that every year they live, they have all this equity in the cash value that yes, you can use along the way now, but when you retire, what's so powerful about that cash value, and I don't know if you knew this Jethro, but it's actually tax free. can take it from life insurance tax free, almost like a Roth. it's because life insurance is afforded special tax treatment because they do so much for widows and orphans. The government basically incentivizes that people put money into life insurance policies that don't go away because it does provide a social good that's less widows and orphans they need to take care of. 

So they give you this ancillary Roth like benefit in your cash value. And why that's so important is every educator [00:36:00] that's listening here, all their pensions are gonna be fully taxable. Fully susceptible to future tax changes. I don't know about you, but I could think of a reason or two or 35 

jethro-host176_1_06-17-2024_143640: Yeah. 

squadcaster-hig6_1_06-17-2024_143640: and I'm talking trillion dollars in national debt. 

Why? Taxes need to go up for everybody and the money that's in your life. Insurance will be immune from that. So having a retirement supplement is important, but having a retirement supplement that's also tax free is also very 

jethro-host176_1_06-17-2024_143640: Yeah, very good. So two actions from today. Number one, banking truce.com/pension. Go watch that video so you can see what it all looks like. And then banking truce.com/schedule to model it out for yourself and see what it could look like. And, I think if you are interested in this, if this sounds intriguing, definitely go do both of those things. 

And if you have more questions send me an email mention me on social media, reach out to Hutch as well. [00:37:00] Hutch, thanks so much for being part of the show today. I really appreciate it. 

squadcaster-hig6_1_06-17-2024_143640: Was great. Thanks for having me