The episode features Brad Raschke, Vice President at Key Retirement Solutions, who specializes in managing insurance policy and cash flows for small businesses. He frees up cash flows and provides better coverage for employees by transitioning 65+ employees to Medicare when appropriate. Brad has seven years of experience in the insurance industry and has found the Infinite Banking concept. He graduated from the Nelson Nash Institute, mentored under James gnarly, and now practices infinite banking with his clients.
Life in Real Estate
[7:45]
Brad describes the Infinite Banking concept as a mortgage where the value of your home is guaranteed never to decrease. Every time you make a loan repayment, you see your equity steadily increase. You can take out a second mortgage or cash-out refinance anytime you want. You can take a HELOC against your rental house anytime you want. With the HELOC, the interest rates are locked between zero and 8%, and there's no loan repayment schedule. You never have to repay the loan if you don't want to, as long as your principal plus interest doesn't exceed your equity stake. You could float that HELOC loan forever.
Loan and Policy
[11:12]
Brad explains that you can float a loan forever if your principal plus interest is within your equity stake or your cash value. Some companies allow you to take a loan and earn interest on your full equity stake even with an outstanding loan. The value of cash value is the net present value of the future death benefit. You could completely cash out your cash value, take and walk away with it, or take a loan against that cash value.
Leverage in Insurance
[21:19]
Brad also discusses the leverage in insurance policies. If they are structured correctly, there will be significant cash value there in year one. You can take a loan from your policy to buy your Christmas presents and start an uninterrupted compounding interest curve on that money. Over the next 50 years, that $850, with a compounding interest of 5%, will turn into over $10,000 of capital you have access to.
People Should be Aware of
[29:37]
Brad emphasizes that capital attracts opportunity. The fact that you have a pool of capital will open your eyes to possibilities that didn't previously exist. Millions of Americans lose 34 and a half cents on every dollar they spend because they use banks to finance their purchases. Brad uses Nelson Nash's analogy of flying a plane to describe capitalization. If you fly a plane into a 345-mile-an-hour headwind at 100 mph, you're moving at 690 mph. That's 690 miles an hour faster than someone flying into a headwind. Becoming your banker by using dividend-paying your whole life to create your bank is not investing. Capitalization is capitalizing an asset you can leverage against down the road.
Connect with Brad Raschke:
LinkedIn: https://www.linkedin.com/in/krsbrad
Instagram: https://www.instagram.com/local.liberty.dad
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Website: http://legadoinvest.com/invest
