“The Problem is the Problem. The Solution is the Premium.”

A note for inquiring financial planners, advisers, and agents

The title of this post is a quotation from James Neathery.

I’ve been contacted by several agents recently — new agents, established agents, captive agents, you name it. I want to address some of what they’ve asked about and convey a short summary of what I tell them.

The fact is that the members of the financial advisory industry — the executives who make decisions about sales concepts and strategy in particular — do not address the single, greatest problem confronting the average American. That problem is the cost of dependency on third-party, conventional lenders. I’m talking auto lenders, mortgage lenders, commercial banks, credit unions, and so forth. In precisely none of your company-approved marketing material is this problem addressed. The client, who is unfortunately unaware, doesn’t even know to ask about it.

Imagine doctors not addressing diet. Imagine auto mechanics who ignore oil systems. Or teachers who can’t perform algebraic calculations. This is the state of our industry.

Yes, it’s about interest payments and finance charges (particularly in the mortgage world), but it doesn’t end there. Your clients’ most valuable asset — their time — is totally, completely neglected. There is a dollar value on every hour — every minute — of that time, and it goes entirely unaccounted for. It doesn’t appear on balance sheets and it isn’t tracked on income statements — no matter how allegedly sophisticated the CPA’s spreadsheet is.

That precious, irreproducible time is bled dry by the conventional lending industry. A dear friend who is CFO of an investment group in the restaurant franchise business has spent the balance of all of 2019 negotiating contracts with commercial banks. Sure, he’s doing his job — and very well at that — and is paid accordingly. That is not the cost. The cost is all the value he otherwise could have produced had contract negotiation not demolished his available work time. What that value could have been — and therefore the cost of not creating it — will be forever unknown. But one thing is for certain — it could have been but wasn’t. Consequently, everyone — him, you, me, society — is worse off.

Certainly, the more money an individual makes, the worse this problem is. In general, highly productive people do not value their time. But the cost of dependency on conventional lenders plagues Average Joe too. If you own a home, if you pay rent, if you own a car, if you have a job, if you’re unemployed, if there’s blood flowing through your veins, this problem persists. It will continue to persist until you take back control of capital.

This post is not primarily about the Infinite Banking Concept (IBC), but as it turns out, the IBC is the best way to reclaim control of capital. I explain why here.

Instead, I want to suggest that you have an opportunity to help people fix this problem. Once the lightbulb flashes on, your client will understand that it is literally next to impossible to pay too much premium into properly structured, dividend-paying whole life insurance. That’s a strong claim, and I mean every word of it. The only factor inhibiting how much premium can and should go into a well-designed life insurance policy is the individual’s own ability to generate income.

Once this realization sets in, the individual will begin to redirect their cash flow in order to take control of capital. Not only will you solve the problem of the extreme cost of dependency on conventional lenders, but you will position your client to profit from the laws of attraction that dictate the flow of opportunity and money.

Nelson Nash says “if you have control over a large pool of financial value [read: capital], then opportunity will hunt you down.” Capital (financial value) attracts opportunity — not the other way around. 99.98% of the American population is attempting to invest from a position of severe under-capitalization. They have been intentionally, strategically, explicitly told time and again by members of our industry to divorce themselves from control over financial value. A tax-qualified plan is nothing but a tool to erect a mammoth, Trump-esque wall between your client and control of his or her money. And that is what nearly everyone in this business tells the individual to do once they have bought (what is truthfully a meager, insufficient amount of) life insurance. Tragic.

Alternatively, if you’re life licensed and contracted with an appropriate, well-run mutual life insurance company (that’s been around and paying dividends for more than 100 consecutive years), you have access to the tool your all of your people need in order to reverse this catastrophe.

I met recently with another dear friend who works for a recognizable financial company. Her colleagues encourage her to sell a product called Variable Universal Life — a product that is “built to fail by design” (my business partner James Neathery’s words — and there are none truer). Since she knew some of what I do, she inquired for fuller detail over dinner and drinks. I explained how this particular product (VUL) is pushed so hard by the marketing departments of major financial institutions because it’ll never pay out — exponentially rising cost of insurance will eat the death benefit alive (pun intended). Of course companies want to sell it! Now, the marketers and executives don’t do this on purpose (I have a strict policy: always assume angelic intentions). The client wants market exposure! The academic “experts” want to break up life insurance into something they can understand! UL and all its various mutilations satisfy these demands — no question. But the fact remains, and the point is, that universal life is not the appropriate tool for optimal financial performance.

This is one small example. There are many more. The list of inferior sales concepts and tools can fill a library. My encouragement is that you consider opting out of all these ploys to separate the individual from control of financial value.

A signature consequence of the typical financial planning approach — strategically divorcing the individual from control of his money — is extreme compartmentalization. College planning, old age planning, retirement planning, vacation planning, business planning, saving planning, estate planning, and on and on. Every one of them is a new, ostensibly wise and advisable, avenue for further divorcing the individual from control of his money. All of these expertly designed plans appear “diverse” — the patron saint of the modern financial lexicon. Like nearly all conventional wisdom, this approach is essentially never questioned.

Yet it is an unmitigated disaster.

The planner can’t even keep up with all the plans himself! That’s why there’s an entire niche (read: parasitic) software industry to keep it all in order. The natural human desire to complicate the fire out of anything and everything has manifested in full form in the financial planning industry. All at the cost of optimal financial performance.

In contrast, it is concentration — not compartmentalization — of capital that will produce the greatest financial results for the client. Concentration, that is, in properly-designed, dividend-paying whole life insurance. This means greater control, greater growth, greater compounding, greater opportunity. It’s just greater.

As one client reported to me with an audible sigh of relief, this program also dramatically simplifies the individual’s approach to the financial world. I don’t know what your unique, God-given talents and abilities are, but my goodness you ought to be out there leveraging them to the fullest extent in order to provide as many truckloads of value to as many people as possible. You can’t generate enough income doing whatever that is, and you can’t channel enough of it into properly-designed, dividend-paying whole life.

As another conventional adviser asked me once, “what about full financial planning?” That is code for: “what about investing?” There’s another darling of the conventional financial lexicon. For some reason, everyone is supposed to become a stellar investor.

Of course, that reason is that they’re severally under-capitalized. Consequently, they are intimately aware of how close to rock bottom they are. The idea has been allowed to circulate that the way to fix this is with achieving some sort of annual return in the stock market. That is false.

The problem, again, is under-capitalization. The problem underneath that problem is a lack of intellectual precision around the idea of capital. It’s problem stacked on a problem and the result is a discussion about investing that is terribly incomplete. A complete, thorough approach to investment does not exist without a primary, initial, antecedent discussion of capital. Everything else equal, the well-capitalized will always outperform the under-capitalized in the investment world. Therefore, the client is disserved by advice that suggests leaping into investing without an initial discussion of capitalization.

Fortunately, in the incomparable words of James Neathery, “the problem is the problem. The premium is the solution.” The problems are effectively innumerable. But the solution remains the same to all of them: premium payments into a well-designed, dividend-paying whole life insurance policy.

If what I’ve shared here speaks to you, consider exploring the Nelson Nash Institute’s Practitioner Program. No, I don’t get any bonuses or commissions for pointing you there, but it’s the place to go to learn more about getting the training to provide the tool your people need so they can fully indulge in the solution. Let them know who sent you.