Paul Fugere (00:00)

Dave, do you think people realize that when they put money in a 401k, they're actually signing a contract to lock their money up until they're 59 and a half with very few opportunities to get that money out without any penalty? And of course they're gonna pay income tax on it eventually.

David Befort (00:16)

Yeah,

called a 401k and the warden or in this case the IRS charges you a massive penalty just to access your own money.

Paul Fugere (00:23)

who came up with this idea to put your money away and be in cahoots really with the government? The government came up with it. And why? Because they want your money under their control for as long as possible.

David Befort (00:38)

and you might be allowed to post bail and take out maybe up to $50,000 for certain circumstances, but that's about it.

Paul Fugere (00:47)

Yeah, so this comes up a lot, Dave. We've had it with countless clients where they're like, you know, Paul, during 2020, I really had this emergency where I needed cash. And I went to my 401k custodian and said, hey, I need to do a loan or withdrawal or something. They're like, sorry. And then of course, later on, the government came out with some exceptions, right? Some limited window where you could do that for emergencies and other things. But by and large,

You're locking your money up and you don't make the rules.

David Befort (01:22)

So in this week's episode, we're gonna plan a jailbreak. You coming along?

Paul Fugere (01:26)

sign me

David Befort (01:27)

Hey Paul, the holidays are over. I think we're actually taking down, I think, you know, this is probably recorded a week prior to this coming out, but we're taking down decorations today and getting back into the normal routine of things, but I hope everybody had a great holiday, had a great break, got some time off. Did you get enough time off, Paul?

Paul Fugere (01:48)

I've been sprinkling work in here and there. bonus, we didn't really put up any decorations, so we just left them in storage and we put up our tree and probably 28 % of our ornaments, which I think is the appropriate amount considering we have, you know, probably 4,000 ornaments to put on a tree.

David Befort (02:10)

Yeah, I actually saw a great picture, something on Instagram. A dude just took his Christmas tree. Before he took it down last year, he just wrapped it in cellophane and plastic wrap and stored it like that and brought it out the next year, set it up and just unwrapped it, boom, decorated.

Paul Fugere (02:27)

That's a good idea. Mine is, you know, I, gosh, I might do that. it, mine's, yeah, that's, I might do that.

David Befort (02:35)

Cheat code.

Alright, take a photo. I'm gonna see if you actually do it. I don't have any storage space to do that. I gotta take it down and pack it up.

Paul Fugere (02:45)

Yeah, I could technically leave mine up all year and just put it in our our gym in front of the window and just have a decorative tree there, but I won't do that. She would never go for it anyway. It's much too practical.

David Befort (02:54)

There you go, Christmas. Christmas all year long. Yeah.

Well, hey, we wanted to get some feedback from everybody watching. If you're watching on YouTube, give us some feedback on this setup. So Paul and I are still messing around with the setup here, the cameras and lighting and all that stuff. So if you have any suggestions, any of you professionals out there, or even non-pros, ⁓ good, bad, ugly, whatever. I mean, if you're going to say we're ugly, don't, you're going to hurt our feelings, but whatever.

You can if you want. But yeah, we appreciate any feedback. Yeah.

Paul Fugere (03:26)

You could say that I look like Alf. Yeah. Yeah,

it's not something that we're used to doing. We used to just use our static iMac cameras and now we've got a different camera set up. We've got lighting and yeah, it's a little tricky, but it's interesting to play with it, play with some software to get the lighting dialed in and same microphones that we have been using the whole time. So hopefully we sound the same. anyway.

David Befort (03:52)

All right, man. Well, let's move on. in the beginning, in the intro, you talked about signing a contract. And you were talking about the 401k, which is what most people understand, which is what we're going to talk about today. And maybe, well, we'll hit on a lot of the problem, right? Because Nelson says, you got to know the problem if you want to know the solution. If you don't know the problem, the solution doesn't matter, right? So tell us more about that contract.

Paul Fugere (04:20)

Yeah, absolutely.

Yeah, well, it seems to me, having talked to hundreds of people at this point in the last few years, that a lot of people don't understand their 401k. They don't understand the rules, they've never looked into them, even though they're readily available. You can Google, hey, what are the 401k withdrawal rules? And you'll get a pretty comprehensive list, easy to read, easy to understand. But most people,

They really didn't understand how restrictive ⁓ some of the rules are before age 59 and a half. So generally speaking, before that age, you're in a penalty box. You're in a window of time where if you want to access that money, if your 401k custodian allows a loan feature, you can do that. You're to pay interest. You're going to have a monthly payment. And you have to pay it off within five years or less.

⁓ If you can only borrow a certain percentage of the balance which is up to 50,000 or 50 % of the balance which is ever but no greater than 50 grand So there's just all these constraints right and beyond that if you wanted to do a permanent withdrawal before that age You have a 10 % penalty and if it's traditional account, you're gonna pay income tax on top of that So you get slapped in the face? for using your own money, so it always

David Befort (05:47)

Right.

Paul Fugere (05:48)

You know what I mean? So it always boggled my mind after I discovered IBC, really started to think critically about money on why am I putting money in there? Right? And I know for some people, again, we've talked about it on the podcast a lot. It makes sense because they're getting employer match or the employers and putting the, you know, for an airline pilot, putting it in there, quite a sum of money, right? So they don't have to put any of their own money, which is great. So that's obviously a no-brainer and it's automatic. you know, for a guy like, guys like us, like it doesn't make

It didn't make any sense for me to put money in the military TSP. Made zero sense.

David Befort (06:23)

Right, so I started my infinite banking journey in 2010. I opened up three cash, you know, cash value, dividend paying, whole life insurance policies to practice infinite banking. And then in 2014, I left the military, entered corporate America. And what did I do? I enrolled into the 401k. Nowadays, you're probably automatically enrolled with a lot of companies, and you have to actually take a step to say no and disenroll.

Back then, it was you had to sign up and enroll to make that choice. ⁓ So I did that, even though I was like, know, this is the whole thing about infinite banking. It's a journey. It's a learning process. And at that point in the process, I was like four years in, but I still wasn't all the way in. You know what I'm saying? So I signed up, and I did it for about two months. And then,

I started another policy on myself and I decided I'm done with the 401k. I'm not doing it. And I even wrote an article and we'll post it in the show notes here that why I quit my 401k. We'll post a LinkedIn article that I wrote. And I used to refer back to that article like every, I don't know, maybe every six months or so when I started feeling like, man, am I making a mistake? Am I stupid? I should be doing this. Everybody else is doing this. And I would read that article.

And point by point, it would tell me exactly why I quit my 401k and gave me the confidence I needed to continue on my path of just capitalizing myself and not locking my money away into that system. Now, we're not saying don't invest, right? That's stupid. You should be investing. You should know what you're investing in, And what we want to do here is kind of uncover some of those things that maybe you don't know about.

Maybe you've just done it because that's what everybody does. So Paul, you and I were talking before we hit record. I had a conversation with a guy I worked with once and we got an employer match 3 % or whatever. And that was a monthly match, right? But he was max funding his 401k and he maxed himself out in like September. So he could no longer put any money into a 401k. Which means he left October, November, December.

on the table, didn't get a match for those months because he thought it's such a good idea to just max one, put everything I can into this until I max out. But you left money on the table, pal. So we're not saying don't do it. We'll just talk about something you should be doing in addition to investing or maybe like you and I prior to investing. So tell us more about these, you know, the constrictions, restrictions on your money.

when it's in a 401k. Like if you wanted to, you had an emergency that come up, know, there's hardship withdrawal, like a safe harbor rule with the IRS where you can actually access some. So what does that look like if you were to take a withdrawal, not a loan, you already talked about the loan, but a withdrawal. What does that look like?

Paul Fugere (09:34)

Yeah, right. if your custodian allows that, and a lot of them do, and we don't have a list of every employer in America in their 401k rules, but generally if you have a hardship withdrawal, they're gonna allow you to tap into some of that 401k and access that money now. But again, you're going to pay income taxes on it now, ordinary income taxes.

But I believe, right, they're gonna waive that 10 % penalty on top of that, so that's nice. But it's still constrained to the amount you can get at, right? How many times can you do it? I don't know, I don't keep up with the rules really. You it's a great question for you to ask chat GPT or Google or something. But it could be a one-time thing where you get this one-time hardship withdrawal and that's it. know, if have another hardship three years from now, well, sorry.

So that's one aspect.

David Befort (10:30)

Yeah.

So, you know, have you ever tried to take money out for a business deal or an opportunity or maybe an emergency that didn't fit those, the safe harbor guidelines that the IRS says this is when you're allowed to take money out penalty free. Now, when you do that, let's say you needed, I mean, there's plenty of people who have done this right during the pandemic in 2020, I found a,

a stat or it was a study, I believe it was from a Kiplinger survey from early 2021 revealed that 60 % of Americans access some of their retirement funds during the first year of that pandemic, which did what it interrupted the compounding. It restricted the long term growth and the return that they were going to have. But it also, when you had to take those withdrawals,

Prior to the CARES Act, were some caveats. They actually made it possible for you to take money out without being penalized. today's rules, current situation, if you want to access a $10,000 of your own money in that 401k, one, you're going to be taxed on the full $10,000. And then they're going to take 10 % of that or $1,000 out as a penalty. So now you only have $9,000.

But you pay taxes on 10, which is going to reduce that to, I don't know, $6,500 or less. If you're 28 % tax bracket, it's probably going to be about $6,200 that you net from a $10,000 withdrawal. So how's that for having access to your own capital when you need it or when you want it for an opportunity, which otherwise is going to pass you on by?

Paul Fugere (12:21)

Yeah, brother, it's amazing how the programming has convinced us. And again, I was guilty of it for years. I didn't come from, don't come from money. And I remember an older warrant officer telling me you should max out that TSP every single month, whatever. And that wasn't terrible advice, but looking back, set me up for discipline, right? So it set me up for the right behavior. Pay yourself first.

But in the end, I severely constrained what I was able to do. And I think I talked about it on the episode that'll come out next week, we're recording actually in a few days, where I was talking to a prospective client and he asked me, what did IBC enable you to do? And I tell you, it fast forwarded what I was able to do probably 15 to 20 years, right?

If I hadn't, Dave, if you had not sent me the case for IBC and becoming your own banker, I would not be sitting where I am now for sure, because I would have just kept pumping all that money into the 401k and the TSP every single month, year after year after year. I would not have had the capital, the free liquid capital that I could access without penalty to do what I wanted to do and build this home. just can't bring up that example enough.

David Befort (13:44)

Yeah, and it really goes back to one of the other episodes and things we've hit on in the past a lot, which is the unseen advantages. So before we start talking about those advantages of infinite banking, still going back to the 401k, you know, if you think back to 2020, that was six whole years ago, right? What has happened? What's transpired in your life over the last six years that you did not expect? That was kind of unforeseen, where having access to capital was required.

Paul Fugere (14:02)

Yeah.

David Befort (14:14)

And maybe that access to capital you had was a withdrawal from a 401k or maybe it was credit card debt or maybe it was spending cash that you had saved up for that, which, you know, again, that's that kind of traditional mainstream advice, save cash and pay cash. ⁓ I mean, I'll tell you guys what happened in the last six years. I can just name a lot of things that really weren't on the table six years ago. And then they happened over this last six years. I got remarried, bought a new house, bought four cars.

I had to replace a couple of cars, had to get a couple of new cars because now we got more drivers in the family. I retired from the military, I lost my tri-care insurance, so now I'm doing, now I'm a cash payer when it comes to health care. ⁓ I quit my flying job that I had at the time, so I had no more regular income, fully self-employed. ⁓ I started building another business that

takes roughly half of my time every single week and provides zero income, my payday is going to come. I know it is. Otherwise, I wouldn't be doing this for five years. ⁓ like all of these things have occurred and I need access to capital for those things. never, five, six years ago, I would never have seen any of that on the horizon. Right? And I mean, how many people out there, what's happened to you in the last six years that you haven't?

that you didn't plan for or didn't expect but it happened anyway. mean mine are fairly mild. Other people have some major life events, big medical emergencies, deaths, lost a job, things like that. Pretty much everybody went through something in 2020 that they didn't expect, right? A reduction of income for most people.

Paul Fugere (16:03)

Yeah, for sure. I think the biggest unexpected thing, because most people don't understand the Austrian business cycle, is that people didn't expect the price of real estate to nearly double in a small amount of time. when you look at, I talking about this yesterday, just in this neighborhood, and most places around the country, maybe not Florida, because Florida is starting to kind of regress now again, because they overbuilt. Surprise. But anyway, ⁓ when you look at the

David Befort (16:17)

Wow.

Paul Fugere (16:32)

what people paid in this neighborhood in 2017, 2018, 2019, pre-pandemic, you know, it was actually fairly reasonable price per square foot. And the prices in this neighborhood have doubled for construction, literally doubled in six years.

David Befort (16:42)

Mm-hmm.

Yeah, yeah, I don't see a crash coming. I'm no, you know, soothsayer and I'm not. Yeah, I know, right? You know, I was back in 2022 when I started looking for a house. I was like, I'm just going to wait for the crash, you know, and luckily in 2023 I was like, you know what? I don't think there's going to be a crash because this is just the way it goes. And if it crashes, it comes back anyway. So that's, that's a huge one, man. And I see prices going.

Paul Fugere (16:56)

Kept waiting for it. ⁓

David Befort (17:21)

up even further next year or this coming spring when we get a new Fed chair and they drop the rates if Trump wants that and ⁓ if he gets what he wants, you're going to see prices skyrocket again. ⁓ again, we're not saying you shouldn't be investing. And ⁓ 401k, there's an argument to be made if you're getting the match, why not? That's somebody else giving you money. People call it free money. There's no such thing as free money. But you're getting

Paul Fugere (17:28)

Ugh.

David Befort (17:50)

You're getting a match. I'm not going to argue against that. And again, you know, we don't give investment advice. We're not investment advisor advisors. But we are saying you need to be educated on what you're doing, where you're putting your money and not just doing it because that's what everybody else is doing. Now, there is something you should be doing with your money that very, very few people are doing. And that's putting it somewhere safe and guaranteed where you have access to it.

And that's where infinite banking comes in. So, what if you could be your own bank? What if you could use your own money today and still at the same time, let it compound and grow interrupted for the future, while you're accessing it?

Right? Uninterrupted compound growth.

Paul Fugere (18:39)

Well, think that's,

yeah, and I think, Dave, that's the real trick, and that's why the infinite banking concept is worth exploring. Like give that 92 page book a read, Becoming Your Own Banker, fifth edition. Give that book a read. And the trick is this, and I think Ryan has said this in his own book, and I really liked the way he put it, is basically, where you originate your lending from matters.

Where you put your savings matters, right? So most people, and we've talked about it, we've talked about it many times in this podcast is that, and I'm talking to you podcast listener, you have savings, you're putting your savings somewhere. My question to you is that do you wanna interrupt the growth of that savings? Well, no, you don't. You would like it to be in a continuous, nice steady path, right? Well,

in a traditional banking product like a savings account or a CD or a money market, whatever, you're going to, when you wanna access that money, let's face it, you're gonna do a withdrawal, you're gonna take $10,000 out and go on your annual vacation or something, permanently interrupting the growth and the trajectory of that money forever, right? There's a better way, right? We have 100 hour, 100 plus hours of content on the infinite banking concept, explain to you why.

Dividend paying whole life insurance is a superior, far superior savings product than traditional banking products.

David Befort (20:17)

Yeah, let's go back to some of the basics that Nelson talks about. So there's two ways that most of us are taught to purchase a car. You either borrow and finance the purchase or you pay cash. But as Nelson explains in his book, Becoming Your Own Banker, no matter how you do it, you're still financing that purchase. You're either paying interest to somebody else or you're giving up the interest that you could have earned on that cash. So you have, we like to talk about the debtor and the saver.

The saver, you know, here's your baseline. The saver builds it up until they get here and then drop back down to zero when they go trade that cash for a car. Right? So you saved up $10,000 over five years or two years, whatever it is, and then you got rid of it for a car and now you're back at zero. Well, the debtor who has less discipline and less of a long-term horizon starts at a negative 10,000.

and then slowly builds back up to zero. But where do they both end up at the end of the day? On that zero line, right? Now, then there's the wealth creator. The wealth creator has the discipline of a saver and has that long-term, long-range thinking, that mindset that I'm doing something that's gonna benefit me for life, not just today. So a long time horizon in mind. So they build it up and then they borrow against it

Paul Fugere (21:21)

The Zero Line.

David Befort (21:44)

But as they borrow against it, yeah, it comes down what they have available and they got to build it back up again. But once they've repaid that, it's higher than it was. And that curve starts to look like this. And eventually it's kind of like a hockey stick, right? Everybody talks about the hockey stick. It grows real slow and then boom, like that. Just like Warren Buffett has made most of his money, like in the last five years. But he's been investing for 85 years or something like that, 80 years. I don't know. You know, the guy's 90 something.

Yeah, it's that hockey stick because you had the discipline to save in the first place and you had a long-term horizon.

Paul Fugere (22:23)

Yeah, exactly right. And I think most people, if you traded out the name dividend paying a whole life insurance with some fancy like Wall Street name product that operated in the exact same manner, except it was called something else, we'd have 500 phone calls a day, people lining up to buy this stuff. But the minute they're like, it's a whole life insurance. this guy says it's a terrible thing. Well, sorry, can't.

Can't help you. I'm sorry that it's whole life insurance. You want everything that the product can do, you just don't want it once you discover, it's that. Okay.

David Befort (23:00)

Yeah,

yeah, maybe you could think of a different name and a lot of people do, right? A lot of people say, you know, they, they classify, they take infinite banking and make it. Yeah. Money multiplier, whatever. ⁓ you know, make money buying cars, blah, blah, blah. All this other, this, you know, financial entertainer guru BS. ⁓ but

Paul Fugere (23:06)

Cash flow accelerator.

David Befort (23:24)

You know what they're doing is rebranding it under something that's not whole life insurance which appeals to more people because like you said a whole life insurance is an immediate turnoff to a lot of people because they don't understand it. Your understanding of a whole life insurance comes from somebody else's misunderstanding. Right. You've said that many times. So thank you Paul Fougere for the quote.

Paul Fugere (23:48)

Yeah, well, you know, I try. But it's true. Gosh, including my own misunderstanding. I hated the regular whole life insurance that I had for many years. I thought it was just a suck and a drag on my, just what I was, you know, I probably would have spent the money anyway or something, but I hated paying those premiums every month. And now I can't wait to pay the next premium. So that mindset shift is quite,

It's quite dramatic ⁓ once you understand the problem, once you understand what's going on. And as Nelson Nash would always say, right, once you understand the problem, you know what's going on, you'll know what to do. It's quite, and it's ridiculously simple. That's the beauty of it.

David Befort (24:33)

Yep.

And there's a whole lot of problems. We didn't even list all of them, but, you know, there's ⁓ hidden fees. There's government control. Here's a big one for me is, do you want to control your own capital or do you want the government to control it? Because that's what's happening with a qualified plan. It's a qualified plan because you get a little carrot today hanging on a stick and guess what?

Everybody's heard of compound growth, but with compound growth comes compound taxes. So that's another problem. You get to those retirement age or as we like to call it your passive income years and every dollar you receive in those years is taxable. What if you could build something right now that creates a tax free bucket of capital that you can access during those years? You know, it's really a volatility buffer.

Right, we talk about this quite a bit. If all your money is in the market, where's your volatility buffer? What are you gonna do when the market takes a dip? Well, if you've started this process, the process of the infinite banking concept and the process of banking and capitalizing yourself, you've got somewhere you can go to. If the market dips, great, you're doing both, right? You got your qualified plan, your investments in the market, you got your safe guaranteed capital. Well, if the market dips over here, stop.

stop selling shares to get money. Right? That's the dumbest thing in the world. That's how you lose is you sell low. So don't sell low. Give yourself time to let the market rebound and go over here to your volatility buffer and start taking tax free income by borrowing against your cash value in your policy.

So Paul, some people may say, hey, Dave, Paul, I can do the exact same thing and I do. I talk to people who do this. They have their own stock portfolio. And what do they do? They go get a margin loan. They leverage their collateral, which is their stock portfolio, for cash from the bank to go do whatever it is they want to do. And then they pay that back, and then they have access to their full portfolio again. So their collateral is actually their stocks.

How does that compare with when you go borrow against your whole life insurance policy, your cash value you have there, if you're borrowing against that, what's the collateral over on that side?

Paul Fugere (27:03)

It's just, it's so different. you know, the word that comes to mind, Dave, is just risk, right? Doing margin loans, if you're sophisticated and you're doing all those things, that's fine. And it will be fine until it's not, right? With a cash value whole life policy loan, it's completely different. The life insurance contract is the collateral.

The difference, the critical difference is the life insurance contract has never, has no chance, has zero chance of decreasing in value. In other words, there's no risk. The risk is owned by the life insurance company, right? That's very conservative, been doing this over 100 years, has paid a dividend 120 years in a row, 130 years in a row, 150 years in a row, right? So that's the difference. On the other side, you know,

If all of a sudden those share prices take a crap, well, you have to bring up the delta. You're gonna have to make up the difference, right? So, and there's other things like you're not controlling repayment schedules and all of those things. And again, you have no idea what the share price is gonna be. You hope it's going to keep increasing. You hope that the deal that you invested in using that margin is going to succeed.

Well, what if it doesn't? Dave talks about it, talked about it pretty early on in the podcast, at least a few times about his first house flip. It was a complete disaster. I don't know if I lent him money on that one or not, but it was a complete disaster and it took like nine months or 12 months. He lost money. Well, that would not have been a good place for a margin loan. For margin loan money, would it have? So luckily it was life insurance cash value money and he controlled the repayment schedule and

didn't have to make a repayment for until he could. And that's control and that's power and that's controlling the banking function is what Nelson Nash wants us to do.

David Befort (29:04)

Right, and yes, you're performing the banking function. You can bank with a variety of different products. You need a product to bank with. So if somebody says, yeah, I do this with my portfolio. I get asset loans or margin loans. I do this with my brokerage account. You are doing the process of banking. But where's the risk lie? The risk is 100 % on you. If your collateral goes down, the bank is going to call that loan.

Right? And if you can't repay that loan, they take the collateral. So there's a higher degree of risk and a much lower loan to value you're probably going to get on those on that collateral than you will on your whole life insurance. So there's a big difference. So yes, you can perform the process of banking in many different ways. This, however, and this product by utilizing properly structured whole life insurance designed by somebody who actually knows

what in world they're doing. Because there's plenty of people out there who say, yeah, I know how to do infinite banking. ⁓ I'm licensed in life insurance. I know how to do that, right? ⁓ They don't know what they're doing. ⁓ So there's a, no, no, they really don't. They couldn't tell you the basic tenets. They couldn't tell you, they probably don't do it themselves. That's probably the biggest flag.

Paul Fugere (30:07)

Ha ha ha ha.

They don't even know what it is.

I have no idea.

The people who do infinite banking and practice the concept tell everyone they know about it. That's the difference. So if your guy hasn't said anything, he ain't doing it. I guarantee it.

David Befort (30:36)

Yeah. You know...

Right,

right. That's a good point. He ain't doing it or he would rather be controlling your capital than allow you to control your own capital.

and there may be people out there who do understand that they just say, I don't need that. I can do without it. I don't need life insurance. And maybe that's the case right now. I don't know. But again, going back to what we talked about earlier, the next five years, what's going to happen unexpectedly? ⁓ That you need access to capital risk free. And you know what? The old saying, everything's great until it's not.

just like all these commercial real estate investors discovered, everything's great, right? That hey, look at these returns, look at the IRR on this, we're paying you these quarterly dividend, like these returns, it's so great. And then boom, interest rates change and now it's not, because they have zero control over the interest rate. And now things are not great, you're getting a much lower return on your money, if you're getting a return at all, right? Paul, you can talk to this firsthand.

Paul Fugere (31:18)

That's right.

Yeah, I had a client lose 100 % of their principal investment, ⁓ six figures, and ⁓ a well-known syndicator or operator who I still see out there. What's interesting to me is how these people can go out there and chat about stuff and nothing's happened. ⁓

God, it feels kind of dirty, right? You just want to rinse yourself clean of it. Oh my God.

David Befort (32:17)

And they're always the smartest guy in the room. The real estate

syndicator investor pitching the deal is always the smartest guy in the room. And if that's the case, why'd you lose money? Why didn't your investors get their money back?

Paul Fugere (32:25)

Yeah.

Not even the, like how could your underwriting be that far off? ⁓ I don't know. But I was going back to what we were just talking about, you know, I don't need this right now. I don't know what that means. ⁓ This isn't about, I mean it is life insurance, but this is about banking.

Everybody, everybody needs to control the function of banking from blue collar guy making 50 grand a year to investment banker making $500,000 a year, whatever. Everybody should endeavor to control the banking function in their life. So that, I think that's the point that people don't get. They don't understand.

They're still thinking of this as I'm buying life insurance. Yes, you are. That is the vehicle through which to practice IBC, through which to control the banking function. This is about banking. That's why it's called the infinite banking concept.

David Befort (33:34)

It's a process. ⁓ One of the biggest arguments a lot of people have is ⁓ return on investment, ROI. Hey, I could get a better ROI in the market. mean, look at the S &P. Since 2020, the S &P has gone up pretty significantly.

If you had money in the S &P and you let it go from beginning of 2020 till now, you made a pretty good return. know, something like 14 went up like 14 and a half, 15 % annually. Now that's what the market did. Is that what your portfolio did? Because maybe you took something out, you interrupted that compounding or there's taxes, there's fees that you paid somebody on that. So you probably didn't do as good as the S &P. 500 did. But so you can, yes, you can get a bigger ROI.

But again, what does Nelson say in the introduction to this book? It's not about return on investment. It's about controlling the banking function. The only question is how much of the banking function do you want to control in your life? Or maybe how much can you control right now? Because nobody can start by controlling 100 % of it. It's going to take a while to climb that hill. So maybe you start by controlling 10 % of the banking function by putting 10 % of your income.

into something you control. And then you climb from there. It's a gradual process. It's a journey.

Paul Fugere (35:00)

Yep, I just like to point out also that yeah, the S &P might have done that or did do that but also asset prices went up as well. So the real rate of return, know, the purchasing power of the dollar went down. So, sorry. Yeah, sorry.

David Befort (35:17)

Right, you got to level that with the inflation, so the cost of living. The cost of living has gone up significantly too. Exactly.

Yeah. Yeah. So, I hope that helps. ⁓ People understand, yes, you should invest, you don't have to do either or. It's not, I'm going to put money here or I'm going to put money into something that's safe.

guaranteed compounds uninterrupted. and I still have access to it liquidity, right? And it's a volatility buffer. All these things you can do both is a both and for Paul and I ⁓ it's simply where's the first place we put our money. What's the flow? We call it velocity of money, right? Your money needs to keep moving. It needs to keep moving, keep churning. That's how money makes money. That's how the banks make money. They bring money in, they pay a tiny bit to you. They take your money. They loan it out to back to you at a higher rate.

and they double it, what they're earning, something like that. So again, read this book and get ahold of us. Let's have a conversation.

Paul Fugere (36:24)

Yep. So here's my

prop. One thing that really, was rereading this book for like the 10th time or something. And one of the things that Nelson says that it's very simple, but when he was on his knees praying in 1982, 83, when interest rates, when prime went to 21 and a half percent, Nelson realized that all he had to do was revise his spending pattern.

revise where money was going first.

Think about it.

David Befort (37:01)

Yeah, because by putting it first into his policy, like you and I do, we always have access to capital at, mean, rates could go back up to 15%, 20%, like the 80s. We've got access to capital at 8 % or less. You know, like that? Right.

Paul Fugere (37:18)

right, with no repayment schedule.

And to put it even simpler, and all of our clients, we still do everything everybody else does with their money. We buy and sell real estate. We buy and sell investments. We finance things. We buy cars. We go on vacation. Dave just came back from vacation the other day. We still do all of the same things. The difference is we keep more of our capital.

because we use the infinite banking concept and we flow our money through a series or a system of dividend paying whole life policies. That is the difference. Don't worry about the mechanics. We will fill in the blanks for you, but read that book, get on our calendar, and we'll see you next week.

David Befort (38:11)

Yeah, you shouldn't have to ask permission to use your own hard earned money. So until next week, control your capital.

Paul Fugere (38:19)

or somebody else will.