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Buying taxes at 50% OFF?

You're an asset podcast with @Caseythedollar and @taxfreemike

Mike: Why would you not want to put as much money as you possibly could into that

account when taxes have never been this low in 50 years and you're basically buying your taxes at 50 percent off?

Casey: Hello, and welcome to the You're an Asset podcast. I'm your host, Casey the Dollar, and on this podcast, we find out who is an asset in the financial industry and who is just an ass. Thanks so much for joining me today, everyone. I have a special guest on our show today. He happens to be an insurance agent, just like myself. I'm really excited to have this person here. I think it's going to be a great episode. We're looking forward to getting to know him and know about his experience in the industry and what he knows or does not know.

But I do have faith and without further ado, please welcome Mr. Tax free Mike. Hey, Mike, how's it going?

Mike: doing well. Thanks for having me. I'm happy to be here. It's a pleasure.

Casey: Amazing. Amazing. No, I'm stoked to have you here too. First off. I. know of you because we happen to do a lot of the same business. We work with some of the same insurance carriers and we have some mutual friends in common. Mr. Ron Sneller. I believe he's more of a close friend to you than he is to me, but some mutuals out there.

Mike, I want to start off. Just how old are you? Where are you from? How long have you been licensed?

Mike: I'm in my early 30s. I'm from Michigan. Just like our aforementioned acquaintance there, Ron Sneller. I've been in the business six, six years. Ron Sneller is the one who brought me in. We started in the fraternal world with a fraternal insurance carrier, and then we started learning a lot more about LIRPs, life insurance retirement plans, becoming your own banker, infinite banking concept, more complex specialty uses for life insurance.

Casey: Amazing. Okay. I want to back up here a second because I want to know more about how you got into the industry. What were you doing before you got your life insurance license? What was your experience work wise before

Mike: Yeah, so I was, I was kinda one of the stereotypical, not like, failure to launch, so to speak, but the stereotypical underachieving millennial, where you're kinda, you come out of high school, you're told to go to college and get a degree, which was already the wrong thing to do. And so, I'm kinda hampered with this worthless college degree. I thank God wasn't too much in debt to get it. And I'm working some corporate nine to five type job that I'm not too terribly passionate about and I'm like this cannot be my life like Go to school work at this company that doesn't care about me make this corporation a bunch of money I just felt like a sense of meaninglessness and purposelessness Where I'm like, I'm just a, I'm just a number on a piece of paper, like, what impact am I having on the world?

It was a job. That's all it was to me. I always felt like I was destined for greatness and, like, part of becoming that person was getting out of where I was. Like, the nine to five area was not where I was gonna have that level of impact. And so I Ron Sneller, we'd known each other for years.

Casey: Yeah. Yeah. 

Mike: so he posted a thing on Facebook. So I figured out, what the heck, I'll see what he's got.

Casey: The rest is history.

Mike: And that's yeah, that's where it was. I was already a self starter, but I just, followed Ron's instructions on, hey, this is how the financial services business works, this is what you need to do, and you'll have that level of impact on each family you talk to.

You're helping people, you're, they're in a much better position after they talk to you compared to before they, before they met you, not to sound arrogant or anything, but the best financial decision someone can ever make in their entire life is, is talking to me because I will be able, I will be able to help you do the things that you can't do without me, I'm going to help your family.

Like if you die, if you're disabled, if you go into a nursing home or you need longterm care, I'm going to be the only one in your life that actually gives you a check to, okay. cover for all of that and I'm the one of the only people in your life who's Gonna be able to call you during the next financial crisis when your 401k is down 50 percent that oh by the way You didn't lose one nickel with me things like that that really add up to be Significant levels of impact in that person's life.

Like we're the only people who can do that.

Casey: Okay. You just added the word we and saying we are the only ones that can do that for someone,

Mike: Oh Yeah, I when I when I say we I'm I guess I'm referring more to as like us in this industry as a

Casey: in the industry

Mike: But yeah, I, I don't have people who I'm mentoring quite yet. I, I do a little


Casey: going back to the recruiting.

Mike: I don't really do a lot of recruiting. I, I probably will eventually, but my, my passion is being out in the field and like actually meeting with the clients and, and, building those relations and not that you're not building relationships, if you're recruiting, you absolutely are, but.

Casey: Just different kinds of

Mike: Yeah, it's just different, like I, I like, I like actually meeting with the clients and, building them a, a plan and 

Casey: So do you own your business or does someone else own a business that you're working


Mike: Yeah, I, all, all, all the people who I talk to, they're like, they're my clients and

Casey: But like, do you have an LLC, an S Corp, or are you working under somebody else's? You have your own S Corp. Amazing. So then how many people do you have working with you?

Mike: And, I have a guy that edits my videos,

Casey: Okay. Okay.

Mike: Yeah, I try to automate as much as possible, like, automated emails and stuff like that. I'm about to bring on an assistant just to help with, like, administrative type stuff, but I'm pretty,

Casey: You're a one man band

Mike: yeah, I'm pretty organized. Like, I can do, I can do a lot of my own.

Casey: So then, why do you think that you've been so successful?

Mike: I would say a lot of it is my, my work ethic. I am a self starter. I, I always felt like I was destined for greatness. I always felt like I was destined to do more than where I was. I always felt like I was going to, going to have a level of impact. And that was like my, my fuel and my motivation to keep making the phone calls or, go to that networking meeting or, stay up late doing that live stream on Tik Tok or

Casey: You can't be an entrepreneur without having that, that constant, constant hunger of like, it's not hunger for money, it's hunger for success

Mike: Oh, yeah.

Casey: helping people, for actually making a difference, like you said, which is, which is really awesome. Do you have a favorite book or a favorite person in the industry that you've learned from?

Mike: I like I really like David McKnight The Power of Zero, of course, is a classic. I like Indexed Universal Life and Whole Life Insurance for the Infinite Banking Concept, so another book that I really enjoyed Patrick Donahoe, and the book is Heads I Win, Tails You Lose. He talks a lot about the Infinite Banking Concept.

That's a really good book. That was, that was, that was

Yeah, that one's good. That was actually my like, aha moment where I was like, oh I get it now. That's

Casey: Oh, amazing.

Mike: Yeah, that's how all this works and that's why this is such a good idea.

Casey: Okay. So now are you doing just as many whole life policies as you're doing universal policies with clients? You want to, it's pretty close?

Mike: Yeah, I probably do a little bit more IUL, but it's it's almost 50 50 this year just because of the banking failures earlier on this past spring

Casey: yeah, that'll bring people to life insurance, especially whole life insurance because of the guarantees of the

Mike: Right, yeah, and that's

Casey: complete sense. 

Mike: For sure. I like both. I know there's a lot of debate out there in social media about, Oh, you should never do a whole life policy, they're terrible, or, Oh, you should do IUL because there's too much left to chance, and there's no guarantees, and As long as you're with a good carrier, cause you could say, Oh, well what if the whole life And, now you're screwed because you're not getting your dividend anymore.

That really does blow the whole thing apart if you're not getting a dividend. But there's, there's never one perfect financial product. I like both. I actually have both myself. I have a large whole life policy and a large IUL. And I like both and I just educate the client on how they work and they'll

Casey: They'll tell you what makes more sense to them. Yeah, it's all that's the way that most agents should be handling this situation I came into the industry the same way with you know Working with IULs and hearing all of this backlash about whole life products And it was maybe just a couple months until I was like, you know what?

Why don't we be knowledgeable about both products? People are always gonna want one over the other, right? And so if we close ourselves off and say we only do one product, we just pushed a bunch of potential clients out of the way. So it doesn't, doesn't make sense to me, these creators who are like, Oh, IUL's awful, only Hololive.

Yeah, it doesn't make sense.

Mike: Yeah, I agree. All it is is a tool, and if you're hammering in a nail, you need a hammer. If you want to screw in a screw, you need a screwdriver. You need to determine what task the client's trying to accomplish, and that's going to determine which tool is going to work best for them.

Casey: Mike, I would love to know about a client or, a couple clients that you either really enjoyed helping or was just a really fun case

Mike: Yeah, there is a guy in, in, in the Atlanta area who I really have, I guess I would consider him a friend even at this point did a good size IUL with, on, on him, his wife, and we're working on getting something set up for his two kids but he, he was really fun to work with just because he was like one of my biggest fans on social media, like he would come and He would like comment on my videos and he would come in on the live streams and be like, oh, hey I just set up a policy, everybody's got a book a meeting, he was just like like a really good cheerleader but he he like desperately needed something because he you know, very high net worth He had a lot of money in the bank and he had no life insurance like at all and and so he was married He's got two his kids are Younger and he was in his like early 50s, he's running like a multi million dollar business, but no no insurance at all nothing that's guaranteed everything's tied up in his business or stocks and Cryptocurrency and it's like if one thing goes wrong in the economy You could lose everything like and you have no life insurance.

Like what if you die tomorrow? Like what's your wife gonna do?

Casey: Tell me, tell me about the policy. What was the end of the policy ended up doing? I want to hear all the numbers. I'm sure listeners would love to hear

Mike: Yeah, we, we did a single deposit lump sum into the policy to bump up that death benefit, because he did need the life insurance, so it was like a dual play. He needed the life insurance, but he also, we also wanted to move cash out of the bank and, and get it. funneled into this policy to use as a tax free income in retirement and, long term care protection and also intermittently borrowing against the policy to use as seed money for his business.

So basically it's split between two main pile, one on him and one on his wife, but we We put in 100, 000 up front, a single deposit, on him and his wife. So 200, 000 total there, and then like a recurring premium of, of 60, 000 a year on each of them. So, minimum death benefit to get that cash account to grow quickly.

Casey: Which death benefit option?

Mike: We did return of premium.

Casey: Amazing. Are they planning to fund the 60, 000 for 10 years until retirement age?

Mike: 10 years. He's not exactly sure. That's the one thing he liked about the IUL is You know, it's a little bit more flexible to do that than with a whole life policy, especially if we've got enough cash in there and he decides I actually want to stop paying it after, year, year eight, he probably could, probably could if you, if the policy is performing okay, but he, we didn't want to do a whole life policy where, let's say we're doing a 10 pay and what if he wants to add into it for, 15, 15 years and he can't, the IUL was a really good fit for what he was looking to do.


Casey: Now that sounds like a fun case, you're getting to play with big numbers, you, it's, it's always fun to work with people who have that extra money to spare and you can really set them up nicely. Through all of your playing with numbers for this family, for the, for the case, did you try using a level death benefit and if you did, why didn't you go with a level death benefit?

Mike: yeah, I did. It looked like the return of premium was the way to go. At least from what I could see, it didn't really make a huge difference.

Casey: Mhmm.

Mike: Because his business is growing we wanted to do the return of Return of premium because it does bump up that death benefit a little bit each year as we as we're paying in Whenever we want to stop paying in we're probably gonna switch it over to level to lock it in if we're gonna get income distributions out of the policy.

And that's the thing, we might not even need to do that, cause he might just be okay living off of the income from his business. We may not even end up using the cash value, so we're kind of like, you might just want to leave all the money there, and then pass it on to your kids tax free when you die. So, or you might need it for long term care.

Casey:  I would have used return of premium just based on what you're saying, but return of premium, Mike, will level out when he stops funding the policy. So you don't have to worry about 

Mike: Yeah, we might not, yeah, it might not be a big deal. When you change it to level, it did Reduce a little bit of death, like it took some death benefit off, um, which can help with the efficiency of the policy, but yeah, you're right. It might, it might not even be necessary.

It's such a small, nuanced detail that I mean if, even if it takes off like a hundred thousand in death benefit, might not even matter.

Casey: Well, and if he pulls the income, then the policy is set up to return him the premium, so you're

Mike: Yeah, yeah, that's a good point.

Casey: I love, I love return of premium. That is the death benefit option I'm gonna use. I would love to know if there is an instance where you're gonna use a level death benefit. Because you may or may not know that I talk a lot about how a level death benefit usually doesn't perform the same way.

Mike: Right.

Casey: But of course there are instances where a level death benefit does work well for a client. When would you use a level death benefit?

Mike: I have in some cases, in my experience, it has seemed to make a little bit more sense when someone's a little bit older, in their 60s, I've noticed that a level death benefit can work better. If you do an increasing death benefit, it can really just, blow the whole policy apart because the costs of insurance go up too much.

And then of course there's the insurance need too, ultimately if someone has a need for, for life insurance, then the level death benefit can start them out. With a higher amount of death benefit, that could still be appropriate, even if they don't have that much cash value available in a few years, too.

So I guess, there's always that conversation to be had, like, how much life insurance does this person actually need?

Casey: Of course, right? That's supposed to be priority number one. Right? We focus on cash value so much that it becomes, the next priority underneath that. But I, I 100 percent agree. Level death benefit, older person, five year funding period. That's when I would use it. I I'm curious about like a, like a very typical whole life policy.

Like, who do you see that likes whole life? What are the strategies you're doing? How old are the clients?

Mike: yeah, generally, most of my whole life clientele are more, like, real estate investor type people. They have a high cash, or a high liquidity need and for the IUL, sometimes it just doesn't work. Like, if you put a lump sum in there, and then 30 days later, you need to borrow against it to go buy your next rental, or fund your next flip.

They, they, they have a higher liquidity need. And so a lot of times most of my clients who do whole life are those infinite banking type people who are like, Hey, I can put this single deposit into the policy. I can get like 80 percent of it. I can borrow it right back out within 30 days. I don't have to wait for, two or three years to have like eight 85 percent of my money available.

It's available like right after I open it.

Casey: So are you doing one Are you doing like a two pay? Are you doing a five pay with Whole Life? You're not just doing one lump sum.

Mike: Yeah. Well, normally we're doing like a single deposit. Paid up addition, which is like a one time upfront lump sum. And then we're funding it until they don't want to fund it anymore. So usually trying to have it paid up at 65 or just paid up at age 100, because if they're, even if they're 65 years old and they have 30 rental properties.

Casey: They should be able to.

Mike: Yeah, they're still gonna want to put money there. Just because they magically turned 65 doesn't mean that they're just, all of a sudden, those rental properties aren't gonna cash flow anymore. It's kind of like, okay, well, what would you rather do? Put all that cash flow into Bank of America, where you're not even getting 1%, and oh, by the way, that's income taxable?

Or would you rather put it into this whole life policy, where you're getting a 5 percent dividend, income tax free, and you're building up your death benefit to pass on to your family, tax free? You got money for long term care, it's protected from market downturns, so a lot of my clients who are real estate investors, if they have rentals, they're probably gonna fund the policy till the day they die.

But generally, we're just moving that from their left pocket to their right pocket. We're moving it out of the bank, putting it into the policy, and then we're putting like a smaller residual amount each year. So they might say, put 50, 000 upfront, and then put like 000 a year after that to just keep, keep feeding the machine.

Casey: And that would be a good strategy for whole life to do that higher lump sum in the beginning. Would you do that with an IUL? Allow someone to put 50, 000 on year one and then go into just 12, 

Mike: I probably wouldn't. It's sometimes. I guess it would depend on the insurance need, but I always run the numbers and look cause I know there are some IULs that you can do like a waiver of surrender charges where you can still have some early liquidity and that can, it can still make sense but if you put it up against a good whole life policy 90 percent of the time the whole life policy wins.

Casey: Oh, I agree. I would not, I, I tell people, I told someone today, hey, a lump sum on year one of 25, 000 and then paying 5, 000 a year. It's not, it's not as exciting as you think it is. And it's not going to grow that immediate cash value like you want it to. It's just not. Now, a whole life policy, 25 grand year one, five, six grand after that, would be a lot better.

Mike: Yeah, you could probably, you could probably make that work. Yeah, you probably could.

Casey: The IUL just wants that consistent balance, 25 grand again, and again, and again. So yeah, I definitely, I, I agree with you there, for sure. And that's good to hear. Because, as insurance agents, we know that if a client says, Hey, can I put a hundred grand into the policy on year one, and then go and pay, a thousand bucks a month, they could do

Mike: Right. You can.

Casey: make a huge commission off of it, and they're not gonna end up happy later, and they're gonna be going, why don't I have the results?

Well, remember

Mike: is my policy lapsing? I got this nasty letter in the mail that says I'm going to lose all my money. What's going on here?

Casey: What's going on? Well, that 100 grand bought 100, 000 worth of coverage and then you only paid 12 grand towards it.

Mike: Right, right,

Casey: work. But a whole life policy can be designed where that does make sense. So if anyone listening, that is a perfect example of how to figure out if you need an IUL or a whole life policy.

Just really depending on that first year and what you wanted to use to build that policy.

Mike: and how quickly they want to borrow against it. Stuff like that, too. Where, yeah, if they really, really want the IUL and they don't want the whole life policy, then, maybe we just do a little bit of a smaller policy and we can always open up a bigger one in a year or two, or whenever.

Casey: Do you ever take advantage of term policies to help people supplement or use convertible terms?

Mike: Sometimes, if there's that level of insurance need, you could supplement the gap with term insurance and then have options to convert it going into the future. Especially if they're young, if they're in their 20s or 30s and, they're just getting married or, they just had a baby and, they have an obvious insurance need and the term insurance could do that.

And then, 10 years later, if they want to convert it to an IUL or convert it to more whole life, it's just A little bit easier on the client because they're locking in that health rating that they had when they were in their 20s.

Casey: Yeah, exactly. You mentioned pay till you're 100 in the whole life policies and this would be something that I haven't talked about on the podcast yet is that there are whole life insurance policies where you pay till you are 100 years old. Like that is the commitment you have to pay until you're 100.

I get these policies a lot and I'm curious what your thought is if you were to have someone say hey Mike, can you review this policy for me? I'm 30 years old. I'm paying 300 a month, and it's a whole life policy, pay till 100. What is your reaction to that? What do you think about that situation?

Mike: depend on what they want to do with that policy. Like if they're, if they're doing it more for the life insurance, if it's like, hey, this is before I met you, or this is before I saw your videos on Instagram or TikTok about, tax free retirement and life insurance retirement plans. So I had this policy from, two years ago.

I told my insurance guy that I wanted whole life because I don't like term because it expires. That, that policy could still very well be appropriate for them. But if they're like, Oh, wow I didn't know you could use this as a retirement plan. Can I do that with what I have? So, if they're 60 or 65 and they just don't want to pay until age 100 they can do a reduced paid up.

Which is basically like freezing in the value of that whole life policy. Basically buying like, like, like a paid up policy. So, at age 65, let's say they have 200, 000 of cash value in that policy. And basically the insurance company's gonna say, Okay, well, 200, 000 of cash value is gonna buy a 65 year old man 250, 000 of death benefit.

Casey: Okay.

Mike: And that'll be paid up. It'll be guaranteed paid up. So no more premiums. All those premiums at age 100 are gone. So that would be basically no different as like a paid, like a 10 pay policy that's paid up in year 10. So they can do a reduced paid up. All those future premiums are eliminated. The policy's paid up.

The cash value is still there. The death benefit's gonna go down dramatically though. So if they don't really care about the death benefit at that point and they just want the policy paid up so they're not paying, 300 a month going into their retirement because they want to use that cash value as income, they don't want to put money in, now they want to get money out, cash value still earns dividends, and they can get income out of the policy into their retirement.

So there's still options going into the future.

Casey: hmm. Would, would you sell a 30 year old pay till you're 100, if they were doing 300 bucks planning for retirement?

Mike: You could. I've done it before. With the whole life policy, if someone likes whole life better than IUL, you can, depending on the insurance company, you can blend it with what's called paid up additions, which basically just makes that cash value grow faster. Because normally with the whole life policy, the first like one to three years, that 300 a month is going straight to the cost of insurance.

So there's zero cash value. If they're wanting to do it as a retirement vehicle or they like the life insurance retirement plan idea, but they just don't like IUL.

Casey: If they don't like IUL. So everything is hanging on. Like they don't like the IUL because that would be the better choice for

Mike: I think so. I, I, I think so. I think the IUL is gonna be a better fit. Like, I just had a conversation with a guy. He hates universal life chassis policies. He wants nothing to do with them. He likes whole life insurance, and that's all he wants. And I'm like, hey, a guy comes into my store and wants a blue suit, I'm gonna give him a blue suit.

I'm not gonna try to give him a black suit, cause he doesn't want a black suit, he wants a blue suit.

Casey: yeah, of course. Of course.

Mike: mean it, because it, it'll still work. The whole life policy's still gonna work. It's just probably not gonna be as much cash value there long term. 'cause, long term the I l's likely gonna perform one to two points average higher.

Casey: A big pro to the IUL is the flexibility of the premium, too. Because you don't, you're not gonna get that with your whole life policy in the same regard as, hey, if your max is six grand, your minimum's 800. You're not gonna get that with whole life. You're, you're gonna throw off the entire projection of your whole life policy by underfunding it or skipping payments.

Which I think is a big draw to young people, right? Who are starting to build wealth, start a family, buy property. They need that kind of flexibility. I've just found that my reaction to whole life policies that pay till a hundred when someone, 30 year old, 300 a month, I'm like, what was this agent thinking?

Right? Because now they're coming to me saying, Hey, I don't really know if this is the right policy for

Mike: Can, can I use it the way in your videos? And most of the time it's like, eh, maybe, maybe not. It might not work.

Casey: might not work so well, and just, of course, yes, they can, they can have it paid up at a certain time, fund it till 65 and stop that, but like going through all of this instead of having flexibility, oh, I want to be done at 61, I'm done.

I want to fund it till 67, I think that's a big deal. I wish more agents thought about the policy, and the person they're working with just in more detail. It sounds like you, it sounds like you are doing that though, which is amazing.

Mike: It's, it ain't my first rodeo, I've been in the business six years. I had to earn my stripes. Like, you could post a video on TikTok or Instagram, get hundreds of thousands of views, and people can see, see your profile, and they can fill up your calendar for a month. Oh wow, I made one video, I have enough appointments for a month.

You can be someone who, just got your license six months ago. And, and, and have that, have, have, have a calendar, and, and cool, good for you, good, good for you for being smart, like that, that's fine. However, a lot of people on TikTok and Instagram, I've noticed, are people who are relatively newly licensed.

They don't really have the industry experience, they don't really have retirement planning experience, they haven't been in the industry long enough to see the pitfalls of a whole life policy done badly, or an IUL done badly. Or how, variable universal life policies were the greatest thing since sliced bread and they all blew up in the 2008 financial price.

Like none of

Casey: Wait, wait. Say it again. Say it again. V U L's.

Mike: right. A lot, a lot of people who are on social media now, they've just gotten licensed fairly recently.

Casey: I was one of them three years ago, three and a half years ago. I was brand new agent, jumped on TikTok, viral. And my first episode of this podcast was like, listen, I had 300 people on my calendar. I had my license for four months and they. The my people above me were trying to tell me just go find people just go find people and I was like I don't know what I'm doing.

How am I gonna find people train them and do right by all these people? Are you kidding me? And Last week I talked on the episode about how I maybe did business with like 10 percent Those maybe because I was like I I'm not going to pretend I know something I don't and I'm also not going to put somebody in policies just because I can

Mike: Sure. Yeah.

Casey: doing business, a couple of months were spent of like literally just spending half an hour on the phone with someone, an hour on the phone with somebody.

And that experience in itself, because I don't look at it like I didn't, I didn't make money during that time. But I got to hear so many different perspectives from individual people that just gave me so much perspective on how people are feeling about their money, about retirement, about the world. And I got to take all of that and Use it, and I left the other company and I started my own thing.

It was like, people are going to wait for the right thing. And they would rather me, know what I'm doing than just pretend that I do. So it was great to have the, lucky video, but it didn't result into money. But I know that there are agents out there that they did take that opportunity and just like anything we can do, sign them up, sign them up, which is, word of mouth is going to spread when you screw someone over with their money.

Mike: yeah Especially some of the heavy hitters out there, they they don't take getting ripped off lightly. I mean they they did become successful by being complete idiots and letting people who You know slight them just walk away without a bruise like they're some of those guys who have money.

They'll come after you

Casey: Oh yeah, I 

Mike: For good reason though. I mean if you ripped them off that badly, shoot I would I would sick my attorneys if I had those kinds of

Casey: Yup.

Mike: send my whole team after someone if someone, ripped me out of money like that.

Casey: Do you have any creators that you just, either, like, bad vibes, or you know that they're shady? 

Mike: Some of the, nothing like big red flags, but there's just been a few like small things that they say where it's like, that's not quite how it works. Yeah, it just calls into question their credibility, 

Casey: Yeah. Do you have something in mind?

Mike: I've seen some creators say about IULs, Oh, this is what the banks do, which is true.

The banks do life insurance, but they'll say, the banks put their money into one of these insurance policies. And the reason why is you can make a an average return of like, 12 percent or 15 percent Which is not true at all. An IUL is by nature a conservative asset class.

It's more It's like between a stock and a bond. Can you get 10 percent one year? Can you get 12 percent one year? Yeah, sure. You're not going to average that. And I'll hear some people say stuff like that about IULs like, Oh yeah, you can average a 12 percent return. Like, no, you can't. You're just getting a piece of the action from the market indexes.

You're not getting the full upside. But the trade off is we're getting none of the downsides. So whenever I see people say stuff like that, it makes us look bad because it's basically like everyone who doesn't do this as a complete idiot. Cause why? Would you even bother buying stocks and bonds and mutual funds and index funds when you

Casey: If 

you could just, it's a very good way to explain it. It's a very good way to explain it. Like,

Mike: It's like, why even have money in the stock market at all? Because if you can get a 12%, 15 percent return with literally zero investment risk, everybody else, like, especially people like Warren Buffett, like, they, they would know about this and they'd be,

Casey: Yeah, they, haha.

Mike: but it is a, kind of important thing.

Casey: No, it's, no, it's huge. Huge red flag. On that, Mike, what do you run your illustrations

at then? If you're gonna show a client an illustration, what's the interest rate gonna 

Mike: No, your average is probably going to be somewhere around 5 7%. It's going to be a little bit more than a bond, but not quite as high as a stock. So I usually show somewhere around 5.

Casey: Me too. 5.

Mike: Yeah, depending, depending on the carrier.

Casey: And the products, some products will allow you to only illustrate to 4. 7. So, when you do your illustrations, where are you allocating your client's money to? Because you know we have lots of different options as far as where money can be allocated. Do you have a strategy that you use? Do you usually put all of the money into, like the S& P 500?

Do you split it up? What's, do you have a strategy there?

Mike: I like the S& P indexes. I did illustrate a little bit of some of the proprietary indexes in 2022. I actually regret doing that. It just, it doesn't seem like some of the proprietary indexes are gonna perform close to what the carriers were originally projecting over the last few years. So I feel like that was a little bit of a mistake on my part.

So I've been, lately I've been Switching a lot of my clients index allocation into the S& P 500 indexes because it's it's pretty cut and dry I mean There's not a whole lot of manipulation going on behind the scenes that we can see with some of the proprietary Indexes you have a lot more data to go off of IULs are I mean they're not new financial products by any means but in the grand scheme of like Retirement planning and investing and all that they are relatively new, but you can look at the

Casey: 27 years, barely.

Mike: You can go all the way to 1920 and there's data for the S& P 500 so you can say hey look You know, even if the IUL itself is a relatively new chassis for personal finance We're all we're doing is we're just tracking the performance of the S& P which goes back to 1920 So is the IUL really that new?

A little, but like, not really.

Casey: Not if you use historic indexes, like you're saying. And for anybody listening who's wondering what proprietary index is, it's just there will be historic indexes and there will be newer indexes that are special to the insurance industry, right? They don't have data all the way back to 1920. And so I like what you're saying, Mike, that you, you are very careful about what you do with your client's money.

You want to put it in historical indexes and you are watching that, paying attention. So very nice. Can I let you in on a secret though?

Mike: Sure, yeah, go ahead.

Casey: My illustrations and what I do with my clients when it comes to allocations, I am using three different indexes always and the fixed 

Mike: I think that's probably a good idea, because interest rates are high right now.

Casey: Yes, sir. I have a, an IUL product right now.

That's, that has a 5. 3 fixed rate.

Mike: It's pretty, that's pretty good. We haven't seen that in a long time.

Casey: My clients would know what I'm talking about, right? I put 20 to 30 percent of all of the money going into the policy to allocate to the fixed account get guaranteed interest. So if all the other indexes do crash, can hedge against the cost of insurance, right? And imagine the performance of the IUL if even on those zero years, 30 percent still earned 4%.

It's huge, right? So I like to use S& P 500 point to point. Either, a trigger S& P 500, the spread S& P 500, the monthly, some other combination, two different S& P 500s, and I'll try to use one of the newer indexes only because we want to get the bonus or we want to take advantage of the participation, but I like to stick with about 20 percent there so that I don't feel like I'm putting my client's money into something that's new.

Right? I want to feel like the indexes are consistent. So if you want to steal my fixed index strategy, please do. Because I, I, clients love it. They, they love that idea. When clients are looking for life insurance for their money, I, it only makes sense to me that we use every feature we can to make it as consistent, as reliable as possible.

Well, Mike, I wanna I wanna ask you one more thing. What made you want to come be on the show? Because I didn't have to, I didn't have to ask you very many times, just the one time, and you were like, Yep, I'll be there. What made you wanna come?

Mike: mean, I've seen your content before and I like it. I think, I think you're one of the good ones, too. Which I think is good. It's helpful. You learn something every time you talk to another advisor, I think. And if you don't, it's It's probably because you weren't listening good enough, but,

Casey: Yeah. I

Mike: I think it's good.

I think it's good to network with people and have those professional associations and build those connections. And, you never know. You never know where that will, will take you and your business and maybe you learn a new idea for me and I learn a new idea for, from you and we take that into our practices and we're able to help more people.

But ultimately. I don't know. I just, I think, I think you're doing good work for your clients. You're, I get a professional vibe from you about that. So yeah, that's 

Casey: I appreciate it. I have learned things from you today. I, I've learned things about whole life insurance that I did not know. I learned things about you too. So we both, we had a trade off today and it was great. If you could tell the world one thing about life insurance, what you just wish you could just drill into people's head, what would it 

Mike: Probably about related to taxes. That's our number one competitive advantage is there aren't too many places you can put money into where it can grow tax protected. and is accessible income tax free. There's not really anything else that can do that, unless you're looking at a Roth IRA, but then you've got contribution limits, it's a qualified retirement account, so there's liquidity limitations until 59 and a half, it's in the stock market, so there's not as much guarantees, and the government can just say tomorrow.

Sorry, nobody can add to a Roth IRA anymore. There's no contract that says you can keep adding money into it. Now, they can't say that the money that's in there isn't tax free, because once the money's in there, it's tax free. But they can say, well, the contribution limit is zero now. Nobody can add in any more money.

They could do that tomorrow if they wanted. And, but with life insurance, they can't do that because life insurance is a contract. And you can't overturn a contract, and that would go to the Supreme Court immediately. So, because in the United States, we have a legal precedent called Sanctity of Contract. A contract that's signed at the time when those terms and conditions were met, that is a valid contract.

And you can't just retroactively go back and change the contract. We don't allow that in our society. And so life insurance has that advantage. Because, if anything else changes with any other financial products, if you're putting in 1, 000 a month into your IUL, guess what? That's your premium on your life insurance.

And that money is still being piped into that policy and growing tax free, even if you're not able to add to a Roth IRA anymore. And when you look at taxes, they're actually some of the lowest they've ever been in 50 years. So, our national debt's way up here. Taxes are way down here. They have to pay for all that somehow. The debt has to come down, and the taxes have to go up. If taxes have never been this low in 50 years, and there's this one financial product that you can put money into that grows income tax free forever, that IRS can never get it ever again, you can put an unlimited amount of money into that policy, you can access it whenever you want and pass it on to your family income tax free, Why would you not want to put as much money as you possibly could into that account When taxes have never been this low in 50 years and you're basically buying your taxes at 50 off

Casey: Mic drop. Yeah.

Mike: We have the one thing you can put money into that grows tax free everything else is like The cherry on top that sweetens the whole deal

Casey: I love it. It's, it's so important. So important. You just dropped a lot of information, a lot of knowledge on, on everybody listening, so I appreciate that as well. It feels like you, you've done your homework, you've done your research, you read up on what's going on, you're watching trends, and you're doing this all.

To make sure that you're doing the best by your clients, and that's a huge, a huge deal, and Considering that, right, considering the state of the world and the economy and the amount of debt that the government has, I come back to Just about the first thing that you said on the podcast was that insurance agents or insurance brokers We are the only ones that really can save somebody in that situation and help them prepare So you brought yourself all the way back my friend

Mike: Yeah, that that's a really good point. And that's that's the way I see it

Casey: Tax Free Mike. It's in the name, right? It's in the name. I

Mike: Yeah, that's why I named myself tax free


Casey: Tax Free Mike. It has been, it has been a pleasure having you here. I'm so glad to get to have this conversation with you and get to know you more. Casey the Dollar is officially going to say that Tax Free Mike is an asset. From what you told me, it seems like you've covered all of your bases.

You're not just willy nilly about this stuff. How, how serious, how important it is as far as we are concerned here at the you're an asset podcast, a tax free Mike, you're an asset gold star, a plus, whatever. So tax free Mike, tell us where can we find you online? How do people get in contact with you?

What's the best way to reach out?

Mike: it's just Tax Free Mike everywhere, and if they want to work with me after chatting, then, we'll talk some business.

Casey: Alright everyone, that's it for today's show. Thanks for listening and we'll see you next time. Bye!

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