How The Banks Are CHEATING You / Garrett Gunderson

and what's crazy is it wasn't their money it's your money right right so you know out of curiosity you have a toaster in the back in the old days yeah to let you know you're gonna get burned and then last time i went in they're like here's your lollipop sucker oh like but [Music] they're in the business of cash flow that's what banks do they're in the business of cash flow and think about their returns it's pretty substantial because just next time you walk into the bank look at what the rates are that they're paying you and then look at the other side of the wall and they'll tell what they're charging you so they're saying cool we're paying you one percent and we have a great deal on a four percent mortgage today right but check right i don't want to get too down yeah yeah but so so that's that's not a three percent return by the way if you're buying supplements for a dollar and selling them for four dollars what's your rate of return on that hundreds of percent now if if they did the same thing that they tell the average investor to do they would go bankrupt quickly which is put money in a 401k an ira or a simple because there's zero cash flow mechanism to that what they're doing is trying to convince you to pay them back quicker buy weekly payments a lower like how insane it's a lower interest rate on a 15 year than a 30-year mortgage typically right but they just told you it's better for you because you're going to save all this interest but see we always are financing whether you pay cash or whether you borrow if you borrow you pay them the finance charge if you pay cash you forfeit the right to earn interest either way there's always an interest cost it's easier to see what the interest we pay rather than the interest we lose but this is where a lot of wealth is transferred and where there's a huge amount of wealth lost and what if you could only you know earn four percent but you only had to pay three percent this is why banks are in business because they're saying hey stova i'll give you one percent if you put money in here and on the other side of the wall they go and if you want any money back we're just gonna charge you four percent to borrow it i mean that's a really good rate of return for them because it makes me so uneasy hearing this every time we talk about it we just spoil your life every day this is why you need to go to paris for a vacation i'm ruined and what's crazy is it wasn't their money it's your money right right so you know out of curious toaster in the back in the old days yeah to let you know you're going to get burned and then last time i went in they were like here's your lollipop sucker exactly because you're a sucker well the bank tells you it takes money to make money what they really mean is it takes your money for them to make money if you follow the advice i'm about to give you you can cut out the bank as your middleman and you boost your returns 400 800 percent all while saving on tax so you're tired of the bank telling you one thing while they do the exact opposite and make money on your money you know that you can cut out the bank right now where they're taking your money they're earning interest on that money because they pay you a small amount and then they rent that out for a lot more and even where they put their reserves so they get better returns than kind of the reserve accounts but they have different insurance structures but you can do the same thing with your reserves and with your cash this means it doesn't take their money to make money the markup is so substantial if they're renting it for two percent let's say you can go to the internet bank get two percent of your money and they sell it for four percent that is a 100 markup if i get a hammer for two dollars and i sell it for four bucks that's 100 markup so it's not a two percent rate of return they're paying let's say two dollars for every hundred dollars they borrow and they're selling that money for four dollars that's amazing right that's a great return not trying to go from seven percent to ten percent by taking more risk but looking at these rules completely different you know when all of this was happening um with the economy and interest rates were being loaded or lowered by um the government i called the bank fed it which is not the government it's a private entity but yeah brilliantly named yes so we feel like it's the government so with the interest rates being lowered i called the bank because i'm like it's zero percent i wonder how that's impacted the percentages and they became more profitable it was like eight nine ten percent and i was like they're not transferring that quote unquote discount to the people what why i they don't they just got to get they got access to money at a much cheaper rate and they're charging everybody else and ask the nine percentage still mo not everybody but i moved into an infinite territory the fed rate is 0 to 0.25 percent if i can get if you'll give me an asset for zero dollars and i can charge someone four percent profit on that what's my rate of return where's the accountability to the system it's infinite we're gonna get you drinking by the end of the day you're gonna have to do wine tasting for you or something i need a glass of whiskey by the end of this no i'm kidding so bank when they look at loans are more student cash flow than they are in interest rates they want us to be focused on the interest rates not the cash flow so they'll say you know we'll see that all the time right 30-year mortgage 3.75 or and then a 15-year mortgage three and a half percent so they want us to give them their cash flow back faster we need to kind of flip the table on them and do it opposite so a quick way that we've developed to do that is to take the total amount you owe on a loan divided by your minimum monthly payment that will give you a cash flow index score any scores that are 50 or below are really in the bank's favor they're kind of destructive to you on your cash flow it means you have not leveraged very much cash but it's costing you a ton of your monthly cash flow to keep that leveraged any loans that are kind of 50 to about 100 we say usually you can refinance or do something about that loan restructure it find a different way to borrow that money and be more efficient any loan that scores better than 100 we consider to be a very efficient loan a lot of people collapse two terms loans and debt yeah that any time we owe something most people just refer that to his debt and and when we have a notion that do everything you can to get out of debt or avoid debt like the plague like wrote about and killing sacred cows well if you owe money that doesn't necessarily mean you're in debt if you have an asset attached to it that's worth more like he does in both cases he's got a home that's worth more than the loan so he could liquidate both of these and end up with money in his pocket that's called equity yeah but most financial people say well you're in debt no you're not you're in equity but you have a loan so there's a difference between efficient loans and inefficient loans and destructive loans destructive loans are you owe something like a credit card there's no asset attached to it or no hope for future income from it but then you have you know assets that might have a loan against them that create more cash flow than that loan cost that's actually a pretty efficient and very productive type of loan but not a lot of people can handle having a loan and create production with it because we've been trained taught and educated to consume to borrow to consume and banks don't borrow to consume if they were to borrow to consume they'd go out of business very quickly look you can either make the bank more money or make that money yourself that's what cash flow banking is about using a bank to save your money isn't making you wealthy the banks put their reserves or a portion of their reserves in cash value insurance that's designed with high cash and low commission don't stay poor don't make them rich if you cut out the banks as the middleman you get to earn that interest you get to keep that you get the tax advantages without locking your money away it's time for you to earn interest rather than pay it don't rely on banks to lend you money build your own family bank for those who haven't read your book what is a family bank okay so what the rockefellers do um is looking at what banks have been doing with their reserves for a long time there's something called bank owned life insurance and so they take their reserves and they put a percentage of those reserves into cash value insurance plans but these are high cash low commission types of plans and they do it with their executives and that way they're earning interest without paying tax on that well it's inside of that plan it's higher interest rate than what they're getting in their savings accounts through dividends and so the concept here is how can you create a minimum guaranteed interest rate how can you have access to your money before 59 and a half with zero penalty as a matter of fact get access to that money very quickly right how can you add a multitude of benefits that if you became disabled the payments would still happen into this cash plan without you making that payment after six months or if you needed to go to a long-term care facility in your later ages that you could tap into the death benefit while you're alive not just after you're dead and ultimately the goal for me is how do we help you build more cash flow and buy your net worth that's why i call it cash flow banking because we're looking at you could start financing things yourself and and paying interest you could pay for uh you know kids education um instead of going to getting a student loan you could you know finance their their mortgage and you get paid the interest rather than a bank and so it starts to be ways that you can operate and act like a bank and you're not you know you're not subject to oh well right now lending is is really restrictive because it's a recession or you know having access to your money versus having it all tied up in plans that have a whole bunch of fees and and have a ton of i don't know just make it onerous to get access to can i really leave my own bank and set up a family bank for the future well if you live in the united states or canada here's some tricks you can use this is going to help you create more liquidity it's going to help you recover more cash and it's completely legal as a matter of fact it's not only legal it's like a moral obligation if you want to keep more of your money so i call it cash flow banking cash flow banking is a banking alternative that actually pays interest it's a structure to save you on insurance costs for example people are paying for term life insurance and only 1.1 percent of that ever pays out so if they don't die money's gone long-term care people paying for these policies and then if they have two activities they can't perform with daily living they can go into a facility and there's an insurance cost of that you know what there's other things like there's ways you can save taxes without locking your money away for years like retirement plans there's other benefits from cutting out the bank and doing exactly what they do with their reserves you can easily outperform the measly interest paid by the banks the way you do this you can save money in a permanent overfunded whole life insurance product and coordinate those savings with all of your money making decisions you can use your own money instead of the bank's money you can set up a loan scenario where you're in control of your payback periods and you can use your cash the bank is making bank from your money they're getting triple digit returns you'll never see yourself if you continue to invest through them you know rather than being used by the institutions use the institutions look at what their rules are they want your money all the time they want to hold on to it for as long as possible and give back the least possible they want you to accumulate while they create cash flow first off with cash flow banking you have tax benefits which are called fifo first in first out the first dollars you put in you're going to take back out tax free first they give your interest last not many things do that it's tax deferred and when you go to take it out you can borrow that money to avoid tax or if you take withdrawals you get your first dollars back tax-free and if there's an outstanding loan when you die it's subtracted from that death benefit and remains income tax free so that's a myriad of tax benefits the next piece is there's provisions on cash flow banking and cash flow insurance called waiver premium if you're disabled longer than six months they keep making the deposits for you the accelerated benefit where it allows you for long-term care you can tap into that that means you might eliminate those other costs and boost your returns the cash value is protected in over 40 states from lawsuits and bankruptcy completely and in all states partially and one of the hacks is just sign in the state that's fully protected and go there when you get your policy you don't have to pay for term insurance because you now have a permanent death benefit policy that will be around one day longer than you which means you have tax free money coming in i call that buying your net worth rather than trying to build it once you find that money let's move it from a one to two percent taxable and double or maybe quadruple what you're getting inside of cash value so you take the money that's going to the wealth capture account and automatically have it moved or transferred to what's called an overfunded cash flow insurance policy there's a lot of crappy insurance policies out of there it takes years before you start seeing your cash they're high commission and they're low cash you got to eliminate those you got to find the certified specialist see because once you get the policy designed right and you've got money in your control you can now invest in the right opportunities when they come up you can use your cash to invest in yourself i did this multiple times with my cash value uh with killing sacred cows my book i took 66 thousand dollars out and bought remnant rate so i could have wall street journal ads and new york times ads which those would have been a six figure cost but because i had access to cash early save me money or i put in a production studio like what you see here so i get filmed videos i used real estate down payments for my cash values and paid them back with the cash flow from real estate i bought a business back in 2014 with my cash values and even in 2010 right after the recession i paid off high interest rate credit cards because i had a pr firm and a lot of expenses were coming up with killing sacred cows from my cash value saving interest and utilizing my own cash flow banking system if you utilize cash flow banking and you get everything properly set up you'll be able to pay for your kids college or pay off loans and debt see remember to consider the risks and only invest in things you know when you're investing in things that are highly speculative and volatile you know that may or may not work out this has a lot more stability find companies that are over 100 years old i prefer mutual companies meaning they're not they're not traded on the public stock exchange so they're not spreading dividends amongst policyholders and stockholders and i'm going to make you really short-term decisions i want to see a minimum guaranteed interest rate of somewhere around four percent um i want to see multi multi multi billion dollar companies i'm going to see all rate a ratings i want to see where i can put flexible amounts of money above the minimum that's the over funding that can help fuel the cash to be you know over it doesn't pay as much commissions so it might not be as enticing to some of the agents that are selling it but it's going to be a great situation for the individual because what we're trying to do is mimic how is bank owned life insurance work how does how would the rockefellers have designed it you know they didn't have to go and pay commission they just get privately built there's another thing called private placement life insurance but usually you got to have a million dollars a year that you're putting in for private placement yeah that's why it means not a lot of people right you know are going to be able to do that so we're trying to mimic what's the closest thing we can do with something that's available to pretty much everybody and it's just in the design so i've given a little bit of criteria the over funding is what's called pua paid up additions that you're putting more cash in it's available as soon as it's in there you can borrow it which means that they use your money as collateral and give you their money and then you still earn interest right but you have to pay interest to get access to that cash or you could take a withdrawal i usually borrow because i want to pay it back yeah if i don't pay that loan back it just gets subtracted from the death benefit and the rest comes back into the family bank into the family estate plan so have the family office i look to be really efficient instead of overpaying tax i'm putting money in my cash value instead of speculating the market i'm putting money into cash value when there's you know distress or opportunity i can pull the money out of the cash and invest and then put it back in i can finance things you know um if i just take it withdraw or i could borrow and i'm still earning versus what i'm paying and i just you know i have a lot of options that way and nobody's going to deny me the loan because it's my money that's set up as collateral when you give the bank your money they turn around and lend it out so the first thing you could do is you can get a guaranteed rate of return paying off your loans that have a higher interest rate than what you're earning so where could you get this number one maybe you could look at your 401k your 401k gives you some borrowing provisions that if you borrow that cash at a lower interest rate than what you're currently paying to a bank then that's going to save you money or maybe you have cash values of life insurance a lot of times you can get that money out pay off a loan that has a higher interest rate once again guaranteeing a better situation for you or like my buddy mike you can look at your savings accounts your certificate of deposits or any other type of savings vehicle cash those out to pay off higher interest rate loans we're talking about guaranteed improvement the second thing is something called cash flow banking so if we look at the world of banking there's something called boli b-o-l-i bank owned life insurance bank owned life insurance is where they put part of their reserves now the reason they put their reserves in bank owned life insurance is because it has really high cash value it's properly designed for the banks where when they put their reserves there it's going to earn a higher interest rate than the normal reserve account it's going to have tax advantages over the normal reserve account so it's going to improve their situation but if you're going to do this individually you have to design it properly unfortunately a lot of cash value type policies out there have far too much commission and not enough cash you have to make sure that there's flexibility that you can put extra cash into it that there's less commission so ultimately you get a situation where when you're putting money into here it's going to be a much higher rate of return than your savings account your cds or those types of things but you still have access to that money over time and it's something put more or less than if you design it properly to be flexible and once you earn a dividend inside of there it becomes guaranteed so it's not subject or predicated to what happens in the stock market you have access to that money along the way and if you take it withdraw there's something called fifo first in first out so if i put money into a cash value policy i've over funded it be above what the minimum premium is that's all commissionable so it has more cash richness to it i can take the money out tax-free just in a withdrawal for every dollar i put in fifo is first dollars in first dollars out i don't have to pay tax until i got all my principal back and i'm into the interest but even then i can borrow based upon how much is in the cash value it doesn't matter my credit that company will give me that cash based upon my cash is collateral it's going to charge the same interest rate or a similar interest rate so i could still earn interest in there and if i never pay that cash value back the debt benefit would come in tax-free and pay it off when i die because there is no specific payback provisions so number one i've got tax benefits number two i've got minimum guarantees on the interest that i'm earning in there just like the banks are on their reserves right i can use that money along the way if there's better opportunities that come along which is great and it can be protected from liability and bankruptcy this is something you do in canada this is something you do in the united states and in 40 plus states in the united states it's fully protected from bankruptcy and liability so it's got a great structure of where you're saving your money you can utilize it along the way and if you fund it properly you're going to see high cash value really early on now if you want to figure out how to do this for yourself there's a great resource at cashflowbanking.com you can read up on it you can even schedule a complimentary meeting with it and you'll see i even endorse on that side i'm talking about what i've done with it in my own life because i started out with a mere 50 a month going into this when i was 19 years old 50 bucks a month and then a couple years later i was doing 262 a month and now i'm doing a lot more than that so you can set up more policies as time goes on i've even got policies on my kids i've got a policy on my wife i've got policies on employees and i'd use this cash to put down payments on real estate put in a tv studio where i could do filming put in full page ads for wall street journal new york times i did killing sacred cows pay off high interest rate you know loans and you know even buy a company with it so that money is available it's not locked up like other retirement plans and now you're building your own bank now the third thing to mention here is you could make money on the buy so the first thing we talked about was what i call reallocation taking underperforming assets and paying off higher interest rate loans if that applies to you that's a guaranteed return number two is building your own cash flow banking system go to cashflowbanking.com but third is when it comes to investing how can you make money on the buy this is more active investing but let's look at it how can you lend money like the bank i have a friend i went to college with them we actually roommates and his mom and dad when i was first starting in financial services decided to meet with me just to do him a favor he was going to buy a home his older brother was going to buy a home and his parents had a bunch of money in cds that weren't paying very much and they were taxable so what we ended up doing is have them become the lender and they actually bought the homes and they charged an interest rate to their sons they were actually higher than what they were earning from the bank but for their sons was lower than what they would pay the bank once again cutting out the middleman so they had the collateral of the home they're helping out their kids and they're seeing a higher return for them and saving their kids money that's a win-win-win so that was really cool so there's even situations where i've had some clients where they were buying a home for their mom right and what they did was they used their credit in order to get it because they had a private bank or a portfolio bank where they were able to get 2.6 interest where their mom would have to pay 4.5 so what did they do they split the difference they charged her three and a half the loan was in their name she paid a little bit more to them so they cash flowed every month she saved money going through them versus going to the bank they made money just using their credit now there's other ways you can act like a bank here um there's things called hard money loans or bridge loans where there's people that are going to acquire something and they haven't secured long-term financing because maybe they're buying it it's a really good deal and they need cash really quick so you could charge them points when you lend to them maybe you're buying a piece of real estate you charge them something right up front plus charge them a higher interest rate than from the bank and then they refinance that with a bank once they've secured that when i bought my cabin a year ago by having the cash i was able to negotiate a better price that happens a lot of times so i was able to just pull this for my cash flow banking system and buy it and save a little bit of money plus get the home when two other people are trying to get loans right i already had secured the cash i used to have a hard money lending fund back in the day where we'd go in and we would finance projects in the interim until they could secure long-term financing so what you might consider doing is using cash flow banking sitting in cash and the way you make money on the buy is you look for people in a distressed situation people that need to sell a business quickly or people that need to sell a property quickly because they have a cash flow crunch or they're moving somewhere or for whatever reason those are the people that are usually willing to sell at a deep discount because it helps them solve that problem quickly that's what i mean by making money on the buy part of the way you can do that is you wait for recessions to come and then during those recessions companies get a lower valuation even though they might still be an amazing company but the entire market takes a hit or you look at when the real estate market goes down and you can buy something that's going to cash flow from day one versus a time where it just runs up and it's a lot more expensive so what could you do to get something at a discount because you have buying power maybe using your cash flow banking system or a crazy situation where someone's distressed or a type of recession where now cash becomes amazing to get the return from day one that could even be buying a business that cash flows from day one want to master your money want to figure out the things that you could do to improve your finances click here and check out more videos like this on money matters

Channel: Garrett Gunderson

Views: 5,678

Rating: 4.9386973 out of 5

Keywords: Garrett Gunderson, Wealth Factory, Wealth Building Strategies for Entrepreneurs, Financial Freedom, Financial Independence, Getting to economic Independence, what would the Rockefellers do, business, success, entrepreneurship, How The Banks Are CHEATING You / Garrett Gunderson, How the banks are cheating on you, How banks make money, how banks make moneyow you should invest your money, Investing Your Money

Id: TSlv7VBAXwk

Length: 23min 1sec (1381 seconds)

Published: Wed Feb 24 2021