How to Become Your Own Bank?

hey what's going on everyone in this video we're gonna show you guys how to become your own bank paying your self interest whether you're looking to pay off your debt or getting into real estate investing hey what's going on this is Sam Kwak and we have a special guest mr. Steve Ross all the way from Utah and he's gonna share some awesome information about how to become your own bank creating your self interest paying yourself interest not to the banks whether it's through to pay off your mortgage or to get into real estate investing but before we dive in be sure to go and hit the like button on this video it does help us a lot with our YouTube algorithm and gets this video out to as many people as possible the opinions expressed in this video are my opinion and not don't necessarily reflect the opinion of any one particular insurance company or my company in particular each situation is going to be different each individual situation and what they're trying to accomplish and each strategy that might be proposed is either applicable or not applicable depending on on the circumstance and so the ideas and things are there isn't necessarily one right or wrong answer and an option it's the but the right one for you is the one that applies best for your situation and that's where we're gonna focus and so as you reach out and if you were to work with me that's where we that's the direction we would go I've known Steve for about a year now right close to it and I mean I've been working with Steve also turning my life insurance to a bank and honestly before I got started I didn't know what this whole concept was so Steve go and tell us about your background where you're from and you know what you've been up to yeah so I actually been in the in the financial industry for about 18 years I've experienced it all I've seen it all and this banking concept is really really something that's that most people don't know about they don't even really think that raw life insurance could be used this way it's pretty cool when people when people hear about it their mind just kind of gets blown and they're opened up to a whole new world of possibility of how money works and what type of interest they can get sure so it's you know because what I'm gonna I can show you here little bit of the kind of the history of of this and and the question I always ask is you know if you could make money like the banks you know but would you want to know about that right and that's what this concept is yeah make money like the banks do right so just giving people I guess the 30,000 feet overview so what can someone expect using this strategy or this concept if you will the main thing I guess is really that you can if there was a way to be able to use the same dollar twice or multiple times or make interest on the same dollar twice or some people call it double dip hmm right that's what we're really able to do and I can show you that real quick yeah of kind of what we're talking about when we talk about this double dip on interest yeah and but that's really what you can expect or why it's a valuable tool to use right and in wealth building process and then there's a real estate application which is what this channel is all about right right you know is - a real estate application that you can use for this to be able to help fund your projects or get different things and and and whatnot so right yeah so if you're watching this and you're a real estate investor and you're thinking well how do I create how do I create a sustainable way to fund my projects in the future as in how do you become your own bank so that you are self funding your your projects you know whether it be a fix and flip or be rental property right buy-and-hold how do you do it in a way that you're paying yourself interest because right now if you're borrowing money from a bank 30 your conventional or you're going down the street and getting a hard money loan for a flip your your ought to ultimately paying someone else the interest to borrow that money so we're going over what Steve's going to show you guys is a way to turn your yourself into banks so you're paying yourself to Bank and ultimately you're you're making yourself rich essentially it's what what the bottom line here so yes Steve tell us more about this yeah yeah so you know this is just a concept an idea and it like said the 30,000 foot right you know type of a thing but but here's the idea here is that if you if you put your money in when you deposit money into the bank right it really builds kind of there it becomes their money let's say you have this local bank here let's just throw out a number let's say they have a hundred million dollars sure okay instead of lending out that hundred million in the way of mortgages car loans credit cards things like that what typically happens is they actually go to the Federal Reserve right and they say hey can I use my money to back up a loan from you guys and they say sure and and the Federal Reserve just sends them over the money yeah so now even though you know this is typically called fractional banking and there's more details to it but let's just say they have now have two hundred million 100 million they borrowed hundred million you have on reserve well they still don't lend out their money because they need it in case you and I go to the bank say hey we want you know we want to take money out of our account so they have to keep their reserves so what they start lending is this money that they've borrowed okay and as a result they that's why when we borrow from the bank you get money with interest but you get a structured payment plan that you have to qualify for and all this kind of stuff because they need to make sure that you can make your payment so they can make theirs right but most people would agree that this is a very lucrative way to make money for sure right right yeah that banks don't have a problem making quite a bit of money doing this oh okay yeah so then the question becomes you know are there companies willing to lend us money like the Federal Reserve does with the banks and the answer is yes insurance companies are willing to do that okay and so the idea here is that you're able to put money into your own accounts start building up your own reserves right as you build up your own reserves then you have kind of your you have the insurance company your account let's say you want to make a purchase or let's call this book these books of student loans right so you want to pay off a student loan so if this is a normal bank account you could the and you wanted to pay off this loan you'd have to drain the money out of the account and pay off the loan so you no longer have the loan but you're no longer money in your account right which is pretty straightforward that's just how it works yeah but what if you could keep the money in the account and still pay off the student loans right that's that's the the question right all right well just like the bank says hey Federal Reserve you could say hey insurance company can I use my money to back up a loan from you guys and they say sure and they send you the money out of their own pocket you pay off student loan while a hundred percent of your money stays in the account continuing to grow compounded generate interest right right the gotcha is similar to like if you were to put a mortgage on your account right whatever they gave you here is now unspent obihiro key to the principal is that there's a hundred percent of the money's still there still growing in compounding generating interest so so let me back it up so I just wanna make sure everyone understands the insurance companies pays whatever right item okay let's say real estate project or in this case student loan well technically they're paying you but the money is generated from them sure the source of source of money is coming from the insurance company of all tomates paying whatever yeah for a lot of artists listeners it could be a mortgage or it could be you know whatever the case might be so essentially that money that you have let's say a fifty thousand dollars right that essentially it becomes quote-unquote on spendable cuz obviously something has to back back whatever you just did there yeah but ultimately that money is generating interest yeah is that right yes let's use the homeowner mortgage as an example right so so you know if you had and there's probably none of this around here but you know let's say you had a hundred thousand dollars or your home was worth a hundred thousand there's plenty of those here so yeah if there's a hundred thousand dollar home but you have a fifty thousand dollar mortgage on it right obviously if you're gonna sell that house you're not gonna get a check for a hundred thousand dollars you're gonna get a check for fifty same thing here right I think if you had a hundred thousand your account but you had a fifty thousand dollar loan right and you cash it out right you they're only gonna give you fifty but the difference is that the full hundred thousand is in there growing on compounding generating interest even though you don't have access to the full hundred right similar to a home your the value of your home has nothing to do with your mortgage no definitely not right so it's the same thing here you're kind of you know in a sense putting a mortgage on your on your account yeah and but but the value of it grows independent of what the mortgages right so essentially what you've done is you know if you have for example your fifty thousand dollar student loan you pretty much just replace that with your own money but it's growing you're paying yourself interest and it way and so I'm guessing and I'm gonna do a little bit of a mind reading here I know a lot about are people gonna ask so when do we get to access that money is it when we pay back ourselves to 50,000 or is there is there time limit as to when we can unlock that money or think of it like a home equity loan right right so so as long as there's equity in if you have a mortgage in a home right as think of it in that sense as long as you have equity in your in your account or in your home you have access right right and so so in the case of a hundred thousand dollar home fifty thousand you still have access to fifty thousand all right if you wanted to pay down that fifty thousand dollar loan that would just give you what more equity right you have more access to money sure I don't know if that totally untrue your question so essentially the fifty thousand dollars that is now in the hostage of the insurance company I mean I don't want to call it hostage but I mean you know it's unstable but it's generating money it's doing work that's important because it's not eroding away and in 0.25% interest right nothing like that and that's something that I think Steve's gonna talk about next is interest rate but just kind of clarifying for a lot of our listeners because I'm also a user of the strategy I'm not here to promote this and not use it but essentially $50,000 cash that's sitting your insurance company it's kind of like the equity that you're alluding to you were able to borrow that $50,000 from the quote unquote equity to pay off some of the other things the only difference is you're not paying the bank the interest you're paying you you know yours truly the the interest that obviously making money from the main thing is here is that borrowing from an insurance company is different than a bank right when we say the word loan we automatically jump to you know sometimes sometimes we jump to Oh debt is bad and this is not a good thing right so why would I ever do this this is you know I don't want that I don't want to have loans well this isn't alone in the traditional sense of that as soon as you take it you have to start making payments borrowing from the insurance company is different in the fact that they still give you money with interest but you have this unstructured payment plan yeah you have to qualify for that you don't have to qualify for there's no credit it's nothing to do with anything like that right and as long and and in fact there's no required monthly payment as long as there's quote/unquote equity in your account there's no actual required payment that's up to you voluntarily paying that back if you want to if you don't technically if you do it the right way in structure I fund it and do all the things that we teach it could pay itself back automatically when you pass away right so I'm getting creative here I'm gonna speak in the the more of the real estate side of things cuz I know a lot of you guys want to get into roasting investing whether it's fixed and flip so if I have that's a large amount of money and and I I'll get to the creative side next but this this might be a longer conversation but let's say I have a hundred thousand dollars and I know a lot of you guys don't have a hundred thousand dollars but let me get to the part where you will have a hundred thousand dollars in just a sec a hundred thousand dollars I have I put it in the insurance company it's growing interest in a set amount and I can go and take that money out and let's say I buy a fixed and foot project you mean to tell me and and people watching there's no monthly payment where that's due that's one of the huge real estate applications like that if you go and buy a flip and you say you need twenty thousand to rehab it right and you and you go to a hard money lender to borrow that yeah right thirty or or a bank or any blending right in thirty days you're gonna need to bank a payment on that loan and that's one of the reasons why profitability and the flip is you have to do it fast right because you could you are losing money because you're making payments to to some lender well because there's no required payment if you took the loan from your policy now then that that project could go six months and you haven't have to make any pain right you know so you don't you don't dip into your profitability yeah because you have to make these payments to some lender right so here's the creative part and you can shoot me down cuz I by the way none of this is rehearsed folks yeah so let's say you guys went and watched our some of our videos on how to raise capital and let's say for example I go him and I I create a relationship with Joe snow my Jewish male and Jewish male was me likes me wants to do business with and ultimately he lends me $100,000 for example can I take that hundred thousand dollars on a promissory note let's say give them six percent whatever 12 months promise train or six months Prime Minister or no can I take that and do this life insurance and then fund my project so that I'm not on anything but my life insurance company is ultimately paying the interest for my partner can I do that yes and no yeah right and I'm asking this because you have 18 years of you know your finances and so that's a great question and and the reason why it's yes or no is because because the the insurance companies and things they don't want you to be borrowing any money to fund these pause ah right gotcha that's a that's kind of a no-no per se sure with the caveat that's saying that you know could you do it yeah you don't mean like I'm not saying as a I would never advise someone to do that sure but but it's but if someone wanted to do that yeah not like they couldn't is what I'm saying like sure I can't I'm not good I would that's not my advice right oh so I mean you have a fiduciary duty not say that but I'm just think as a creative person right and just thinking ahead because most of us don't have hundred thousand dollars laying around you know that's the the reality of a lot of us especially for those you know you guys are getting started so I'm just thinking wait so if I can get Joe's hundred thousand dollars to be invested in my company for example I have you know the best LLC whatever and do a promissory note take that hundred thousand dollars and fund the the life insurance and ultimately obviously the life you know is paying out and your interest on that so can I hit a par where you know what the life insurance is paying me is also me gonna pay for Joe's put interest if you were if you were to do that yeah yeah there is that potential okay that way the money I borrowed is essentially this is her percent interest you know there's an implicit net there's no structure payments yeah I mean there's obviously more details to that whole kind of idea but in concept in theory yes that's possible it's possible okay there yeah I mean right by the way a real quick be sure to so licensed attorneys right yeah yeah so a license people because these are our opinions of my company or the insurance company right yeah I want to get that out of the way we're just you know in concept and theory and ideas these you know these things are possible right right absolutely whether or not it's right for you or that you that we're actually promoting that and saying we should do that or should do that that's not what we're saying we're just saying right what what might be possible in every video we have we want to make sure that you guys obviously apply each of these strategy in the right context right if it's time to hammer a nail on the wall we're not gonna bring a screwdriver right you're gonna want to use a hammer so make sure you guys consult with your financial professionals you guys consult with your attorneys your even your accountant because there's a lot of tax ramifications to this as well yeah but you know what let's let's transition into that what are some of the tax ramifications of using this if there are any yeah you said I'm not attacked advise not a tax advisor but in the sense in the sense of knowing some tax right of guidance there in the in the sense is that because anything that you're using we use the language of take money out yeah but we're not really taking the money out right we're loaning against sure and so as a result the only time that there's really a tax on an investment per se is when you take money out and get and receive a gain ah right so so whether that's like a stock or mutual fund or if you're a 401 K or a real estate you know you've made some profit on real estate you actually bring that money to you into your you know personal thing and you make money so there's a tax right right well if you're taking a loan against an account and you're not actually ever taking money out right there's no game there's no gain T so there's no tax yep right so this will also be phenomenal for individuals obviously high net worth you know for those who are obviously a small percentage of you guys watching this may have millions of dollars and you guys need to figure out what you need to do obviously again talk to your tax professionals but you know from from what I understand this would be a great tax you know way to avoid tax not not of hate but avoid taxes right it can be a shelter yeah for sure you know a lot of people utilize in life insurance as an estate planning tool to chara state tax issues and things like that so it can be a great great vehicle yeah and obviously we also have to point out the obvious that because it is a life insurance even in events let's say someone dies you the person who's got the the insurance policy get it I'm guessing there's death benefits right absolutely which is the the perk that we don't really talk about even though that's the whole rights all purpose it really is a first first of all life insurance policy with but what we we're focusing on the savings side of it the then the potential it has there because so unique and different but at the end of the day it is first a life insurance me out over lunch you talked about borrowing so instead of vaping your end goal what happens if you borrow against the life insurance companies or you're essentially your money cuz it's it's being held in the insurances company but you borrow that money what if you put that back in the equity sort of speak yeah well what happens that that then you have the potential to do that that's all yeah you know once again that's one of the things that that you're in can typically advise that why is that okay but but at the same time that is a you I mean it's not it's not unrealistic surely you could do that right all right so the idea behind that obviously is taking money out and then hopefully I hope I'm not like over over stepping in any of your financial duty or your fiduciary duties by by mentioning all this yeah and then and I it's obviously coming about coming out of my mouth right now yeah but again I mean have a heavy emphasis on and make sure that you guys talk to fresh anoles for doing this but I have I have seen people use this concept where they borrow against their life insurance yeah it's called cash value right yeah cash value and they stick it back into the the equity they're borrowing again thus doubling what they have essentially yeah and then what that ends up being is that the interest is basically applying to what they have been able to double essentially which is a pretty cool concept so what are some applications to to real estate I mean obviously you can't share the details of some of the people that you you better help but what are some of the common applications in real estate for this the great thing about these types of plans is that they're super flexible hmm the bad thing about these plans are super flexible okay you know how meaning that there really is no real right or wrong or one way that has to be done or another and so a lot of times a lot of times people especially many viewers here they're just learning they're saying hey just tell me how to do it and sometimes there isn't really this one way that has to be done right which can be a pro and con at the same time right so sure so as far as the real estate goes the you know the idea that you can it's a cheaper way to borrow money mm-hmm you know and with more flexibility so if you if you have a and I mean I have I have clients who put money in this place borrowed against it put against it in another place another policy and borrow put in another policy ow and they basically thought they basically funded multiple policies mm you know and you know I didn't advise them to do that but that's what they decided to do right and it's working you know yeah and it all comes down to your education right your ability to understand these tools and how to move the right pieces in a legal and ethical way so that's a huge emphasis all the time we make here in the quad for this channel is get educated right learn what these tools can do cannot do you know as Steve mentioned the word flexibility but that comes with the responsibility of making sure that you don't you know overstep you know some of the boundaries that are set so yeah I mean this is a cool cost did you have anything else that you would like to show us or well just expound on the real estate thing so yeah you know the fix and flip thing gives you a huge opportunity the other thing too is it can be a source of liquid cash that is that you may not necessarily use but because it's it's accessible at any time kind of a thing for the most part you can build it build up a policy instead of filling up like a policy sitting in the bank getting no interest you know as you're kind of your liquid reserve you can build a liquid reserve here and at any time you utilize it but but instead in that but the big difference is at the bank you have you have a half a million sitting in reserves and you take 200,000 well now you only have 300,000 in your account right here you do you utilize it you still have the half a million growing compounding generating interest yeah while you've used the 200,000 right right and so it can be so you can use it actively for a real estate deals or to pay off debts or did purchase make purchases and do all those kinds of things or it can just be build up you know an account that's going to get way better interest than the bank right and accessible unlike say your traditional retirement plans like IRAs and 401ks and and those types of things which have the aid stipulations and penalties so yeah you know there's lots of different applications yeah how is it this is probably the question that you guys are probably begging right now is so what is what is a I mean obviously I I don't I'm not gonna ask you I'm not gonna ask you to quote but what is the what is a typical return or the percentage of interest you would get on a on them because obviously it's not worth doing it if it's like 1% right it really depends there's different types of policies right so it depends on the policy there's and so you but you know some are fixed returns and you're gonna get three to six percent right that's more of like a fixed return then there's others that have more that that kind of followed follow market the market a little bit and you have even though there's some guarantees you can still get the upside and and you might you might get depending on that particular thing that you're following you know you're gonna get more more of a market based type mentoring right yeah and so it really just depends on the type of policy yeah but for sure but for sure no matter what one you do you know worst case is like three or four percent which is like three times as much as the bank Nick right yeah that's the time I check I check some of the money market accounts that I have and the reason why I have it is for my security deposits from attendance I have to Illinois law I think it's law from four for a lot of the different states but I have to put them in a separate money market account but they only produce point one to five percent right yeah or something like that so but obviously people watching this might be well what is really what are they really pain though you know that would substantiate obviously doing this and something else so yeah that's always a question how I would see for sure no matter what way you do it no matter what Paul she dude yeah you're gonna get significantly better than definitely the money sitting in the bank sure absolutely yeah so guys just giving a little preview of what's possible obviously we can go into a rabbit hole of man this information after information so if ya if you guys want more information for sure can we put your content information down below is that yeah that okay Pam absolutely yeah okay so below is going to be the contact information for Steve if you want to work with them or if you just contacted for general enquiries yeah well the reality is is is we're not being super specific and so yeah the right advice for you is gonna be based off of you in your situation right so so reaching out and and us having a conversation it's not going to cost you anything or whatever we can sit down and and these kind of these ideas that Sam's thrown out there they may or may not work for you but we but through my experience and whatever we can we can narrow down what it is you're trying to accomplish and get you where you want to go right and you know type of a thing that's gonna be a case-by-case so for sure yeah feel free to text me that's probably the easiest way to reach sure you know email I get my emails but I respond to texts a lot fast for sure else you know down below there's give me information on Steve's information and how I can contact them and just even have a conversation you know it doesn't necessarily mean that you have to work with Steve or you're obligated to and also another note be sure to click like on this video as well as subscribe to your channel if you found this to be helpful and it does help us a lot with our YouTube algorithm again and again stay yeah stay tuned for our next video coming up about the finances real estate and lots of different things guys thank you so much for watching and we'll see you guys in the next video

Channel: The Kwak Brothers

Views: 44,896

Keywords: become your own bank, infinite banking concept, infinite banking, infinite banking system, infinite banking real estate, infinite banking 101, infinite banking explained, how to become your own bank, whole life vs universal life, Infinite Banking Dave Ramsey, Dave Ramsey, vip financial education, Infinite Banking Simplified, The Infinite Banking Concept for Real Estate Investing, Paradigm Life, Be your own bank, be your own bank whole life insurance, be your own banker concept

Id: KwCDyGPcT0w

Length: 26min 25sec (1585 seconds)

Published: Tue Nov 26 2019