Listen Here
Jeff Huston is a business leader who understands the world of growing and protecting wealth. As a visionary, Jeff developed 3D Money with the investor in mind, drawing from his vast experience in the financial world.
For 30 years, Jeff has owned and developed businesses, from insurance and financial services to raising money for REIT investments to leasing companies and note offerings.
Jeff’s story is one of passion, drive and innovation. He began his career in the insurance industry before moving on to financial services where he raised money for REIT investments among other things over 30 years ago – but it wasn’t until 2002 that this day turned into something red-letter!
That year introduced him not only to alternative investments but also an entire new world with all its opportunities at every turn imaginable. Jeff uncovers how financial success started for him by being aware of the micro-economic terms around him.
This is one of the most informative episodes we have ever had! Jeff provides tons of information about investing strategically in alternative assets, along with a process that will help you get started today!
In This Episode
- Jeff’s red letter day and how he transitioned from traditional financial planning to alternatives.
- How alternative investments bypass wall street.
- The awareness of micro-economic terms.
- Jeff’s personal wealth strategy & portfolio allocations.
- Jeff’s philosophy on leveraging whole life: infinite banking.
- Jeff’s wealth strategy sentiment
Today, we’re joined by Jeff Houston. Jeff is a business leader who understands the world of growing and protecting wealth. As a visionary, Jeff developed 3D Money with the investor in mind, drawing from his vast experience in the financial world.
For 30 years, Jeff has owned and developed businesses—from insurance and financial services to raising money from REIT investments to leasing companies and note offerings. In 2002, Jeff had a red-letter day when he was introduced to the world of alternative investments, and he hasn’t looked back since.
He has won several national achievement awards, has been a featured guest on podcasts, is a sought-after keynote speaker, and has presented at numerous conventions.
Jeff is a Minnesota native who resides in a small countryside community with his wife, Carol. Together, they have two daughters and six granddaughters. Jeff and Carol play a vital role in the community and actively serve at their local church. Jeff also holds his pilot’s license and enjoys flying his small plane as much as possible.
Jeff, so good to see you! Welcome.
Good to see you, Dave. Thanks for having me on.
Yeah, awesome to have you here! Really looking forward to this conversation. Maybe we can get started with you telling us a little bit about your background and your journey. How did it all start for you?
Yeah, I appreciate the question. The introduction already covered a little bit, but I’ll fill in a few gaps without being too repetitive.
I started as a financial advisor in the mid-’80s and spent 25 years building a financial services practice. If we have time, I’ll get into some of the details about why I transitioned out of it. In 2010, I ended up selling my practice. I was in my mid-to-upper 40s at the time, and from that transaction, I had some money to invest.
I have a son-in-law who, at the time, was a youth pastor and really felt that God was calling him out of the ministry. He had been raised as a pastor’s kid, and his family followed what I’ll call a tent-making approach. Since his parents didn’t make a lot of money, they would buy fixer-upper homes, renovate them, and sell them to supplement their income.
Because of that, Gabe gained a lot of experience in everything from roofing to drywall, cement, plumbing, and electrical work. He had a particular skill set in that world, and I had some capital. If you remember, in 2010, the housing market was in a downturn—it was bad for some, but a great opportunity for others.
We started buying foreclosed houses. Our initial goal was to purchase 40 single-family homes. I put in the money, he put in the work, and we planned to split the profits. Between 2010 and 2012, we successfully bought our 40 houses. Then, in 2012, we had the opportunity to purchase our first multifamily project, and we haven’t looked back since.
Since then, we’ve focused on the multifamily marketplace. We currently own about 1,000 units, all located in Minnesota. While we’ve explored opportunities outside of Minnesota, we haven’t found any that fit yet. We also have another 300 or so units under contract, and we continue to grow that part of our business.
When we transitioned from single-family homes to multifamily, I was originally funding the houses with my own balance sheet. But as we started purchasing multimillion-dollar apartment complexes and undertaking significant renovations, we needed additional capital. So, we took a page from my financial services background, retained securities counsel, and began the process of becoming a sponsor for our own Reg D private placement.
Our company now operates in three divisions:
- Asset Management – Owning real estate and managing our portfolio.
- Property Management – Renting units, collecting payments, and maintaining properties.
- Capital Management – Raising and managing investor funds.
Right now, we have about 400 individual investors and approximately $90 million in investor capital. We use that capital to grow our real estate investment endeavors.
Yeah, that’s excellent! Let’s talk about your red-letter day, Jeff. A lot of the folks in our audience—I think we were all a bit brainwashed, if you will, by Wall Street and corporate America. We’ve been told that the safest thing to do is invest in stocks, bonds, and mutual funds.
I really want to peel back the onion here and get your expertise. You were a financial planner—how did you transition to alternative investments? What was that red-letter day for you?
Yeah, there are a couple of red-letter days I’ll point to.
First, for context, when I started in the mid-’80s, I didn’t know anything about being a financial advisor. The way that business works is financial institutions have training programs that teach you how to do the job. Now, with 30-plus years of hindsight, I can see that those programs have an agenda.
The reality is that everyone has an agenda—your bank, the mutual fund company, your broker. I think people tend to assume, Hey, they know what they’re doing, so I’ll just trust my broker or banker to tell me what’s best. But in reality, people need a certain level of financial IQ themselves to navigate successfully.
I came into the industry knowing nothing and was trained by financial services companies. In 1985, they essentially told me there were two places clients could put their money.
- The Safe and Secure Bucket – Bank CDs, fixed annuities, and life insurance policies with little or no risk to principal.
- The Risk Bucket – Stocks, bonds, and mutual funds.
For the first 15 years, I spent my time helping clients allocate their assets between these two buckets.
Then, in 2001, I had one of those red-letter days. A representative from the broker-dealer I was working with came into my office and introduced me to the world of alternative investments. I was a little embarrassed, to be honest. I had been a successful financial advisor—performing in the top 5% of my peers for over a decade—but I had never even heard of alternative investments. No one had ever told me about them.
But I quickly saw how they could play an important role in my clients’ portfolios. I spent a year doing due diligence because I didn’t want to just jump in based on one person’s recommendation.
Between 2002, when my firm started offering alternative investments, and 2010, when I sold the firm, we placed over $100 million of client money into various alternative investments. I learned a lot during that time—both the benefits and the challenges.
The biggest disadvantage from a financial advisor’s perspective is that alternative investments are illiquid. There’s a reason for this within securities regulations, but there’s no secondary trading market for them. That means investors are typically locked in for a period of time. For our firm, we structured our offering as a three-year investment. Investors could either exit or renew at the end of that term.
On the other hand, the biggest advantage is that alternative investments allow Main Street investors to invest directly in Main Street businesses.
Typically, when a business wants to expand—say Tesla wants to build a new plant—they go to Wall Street. Wall Street packages the deal, takes it to Main Street investors, and collects capital. But that process runs through Wall Street’s middlemen, who take their cut in the form of penthouses, limousines, golden parachutes, and, unfortunately, fraud.
In fact, that realization led to my second red-letter day—the one that made me exit the financial services industry altogether.
Every year, licensed securities professionals have to take an annual competency exam. I was in Bloomington, Minnesota, taking my test, and one of the questions was:
True or False: Ethics is always changing.
I answered False. To me, if something was wrong yesterday, it’s still wrong today, and it will be wrong tomorrow. But I got the question wrong. Wall Street sees ethics as a moving target.
That was the straw that broke the camel’s back for me. When I was a kid, we had a game called Break the Camel’s Back. It was a plastic camel hinged in the middle, and players took turns adding straws to its back until it finally collapsed. That ethics question was the final straw for me.
That’s why I love alternative investments—they bypass the Wall Street mechanism and allow Main Street investors to go directly to Main Street opportunities.
Yeah, and that’s a really great perspective, Jeff. You’ve seen it from the inside, made the transition, and experienced both worlds.
For me, when I started this journey in 2000, it was really the entrepreneur in me trying to solve the problem of how can I create true wealth? I wanted to build legacy wealth, but every time I met with financial planners, it was the same story. Every company, every advisor—it was always the same.
One of the biggest insights I gained early on was learning how money actually works. Understanding money changed everything for me. I realized that some of the biggest obstacles to creating real wealth include taxes, which are your number one biggest expense, stock market losses, where the periodic ups and downs compound over time and eat away at returns, and qualified plans, which have limitations that prevent real wealth-building.
Once I started investing in alternative investments, I developed what I call the trifecta of investing, which has become our core investment thesis. When you invest directly, you gain tax advantages. You’re essentially partnering with the government. For example, investing in real estate provides housing, so there are tax breaks. Investing in oil and gas provides energy, which also comes with tax incentives. Whether the investment performs or not, you get tax benefits right out of the gate.
Alternative investments generate predictable income and consistent cash flow, which reduces overall risk. This creates multiple streams of income instead of relying solely on the market’s performance. In real estate or other investments, we drive value just like a business owner. By improving assets, we create upside potential on the back end.
I believe that with this approach, you can triple your money over time. In contrast, when you’re investing in traditional securities, you’re really just hoping the market will go up.
Yeah, yep, I agree and I think you bring up something important about the misnomers or the way people view money. I was recently asked, “What’s the worst financial advice you’ve ever received?” It’s an interesting question, but my response was when I was taught that money is math. I think that’s really bad advice because money is not math.
Math says that if you take six oranges, eat one, you should have five left. That’s simple. But money doesn’t work that way. Let me give you an example. Say you have six oranges in your kitchen, and you decide to take them outside to your picnic table. You eat one, and then the phone rings. You get called away, and you leave the oranges there overnight. Now, if this were just math, you’d come back and still have five oranges. But in reality, when you return, you don’t have any oranges left.
What happened? Overnight, the neighborhood kid came and stole two—that’s taxes. Two of them rotted—that’s inflation. And the last one? The squirrels ate it—that’s planned obsolescence. This is how money actually works. Taxes take a portion of your wealth, inflation erodes its value, and things wear out over time.
I saw this play out for years in financial services. People would retire, and at first, their plan seemed solid. They had their numbers worked out, their income looked stable, and everything added up. But five, maybe ten years in, reality hit. The cost of living rose, taxes took their cut, and the money they thought would last started to shrink. At first, it’s small sacrifices—skipping a trip to Florida, holding onto a car longer than expected. Then, over time, lifestyle starts to shrink.
In my financial services business, we used to call this the “Kal Kan Curve,” the idea being that as your money loses value, you slowly start adjusting your lifestyle downward. At first, maybe you mix a little Kal Kan dog food into your ground beef. Eventually, when the money runs out, you’re eating it full strength. It’s a harsh example, but for a lot of people, that’s the reality.
The problem is that traditional financial planning treats money like a math equation. When I first started as a financial advisor, I was taught needs analysis. We would map out everything—how much you’d need for retirement, college for your kids, future expenses—and then package it all into a nice, polished financial plan. You’d take it home, feel great about it, but in three years, that plan wouldn’t be worth the paper it was printed on.
Why? Because it doesn’t account for the eroding factors. The government is taxing your money. Inflation is eating away at its value. Planned obsolescence means your car, your appliances, your technology—everything is wearing out faster than you expected. But people still believe that money is just math, and it’s not. It’s way more dynamic than that.
Yeah, really great analogy there, Jeff. And, I mean, let’s talk about that for a second—peel this back—because it took me some time to really dispel this myth. But I believe that traditional financial planning really advocates a nest egg accumulation theory, where you’re going to build up a particular nest egg.
Let’s say you build up a nest egg of $4 million, and you turn 65. Then you’re going to run it through the Monte Carlo simulation, figure out your lifespan. I know it’s even less than this right now, but let’s just say 4% a year so you don’t outlive your money. Now you’re taking 4% on $4 million, so you have an income of $160K. But take out taxes, inflation, and some of those things you’re talking about—it’s probably more like $110K that you’re living on.
Each year, you just keep knocking that back 4%, taking that money out of your pot and reducing it. That’s really what’s advocated. However, I believe that when you invest in alternatives and use a different strategy—one that is actually completely contrarian—you’re building passive income and asset values.
Let’s take that same scenario and say you had $4 million across multifamily properties and some other alternative investments that were paying you 8% cash flow. You’ve actually doubled the amount that you’re taking home each year. Likely, it’s much more tax efficient because you’ve been smart by investing in tax-efficient alternatives.
In addition to that, you’re able to keep up with the devaluation you talked about and the cost of living increases over time because your assets are actually increasing in value, in addition to the cash flow you’re getting. I think this is ultimately how the ultra-wealthy are really creating generational wealth.
Yeah, and so the idea that I think the mistake that a lot of times people make with their finances is they tend to think microeconomically. In other words, you know, I’ve got a guy that I work with at car insurance, I have somebody that has my health insurance, and then I got my retirement plan at work and somebody there, and then I’ve got a banker and maybe a mortgage person or a real estate person. You know, so I have all these different people. I have an attorney, I have an accountant, so I have all these different people.
And, you know, we tend to compartmentalize our decisions financially and economically. But the reality is that we don’t live our financial life microeconomically. You know, it’s kind of like we could say, well, you know, in life, I have different parts of my life. You know, I have my faith, I have my family and relationships, you know, I have career and education, I have health and fitness. So I’ve got these different quadrants in my life.
And, you know, somebody could say, well, hey, you know, friends as friends, church is church, and business is business. Well, yeah, but that doesn’t work that way, right? It because we’re a whole person, right? You can’t compartmentalize. I mean, we’ve all seen people who, you know, let’s say they’re having marriage problems. And nobody who knows anybody who’s either had marriage problems or who knows somebody who’s had marriage problems would ever say that, well, you know what, the only effect it only affected the relationship between the spouses. No, no, I mean, it affected the other areas too. I mean, it affects, you know, other relationships. In fact, sometimes it affects their career, certainly affects them financially. You know, sometimes it even affects people’s health-wise, right? You know, enough stress and all of that.
So, you know, we’re a whole person. Well, the same is true financially, Dave, is that we’re whole people financially. You know, so microeconomics is like you’re standing at the gas station, you know, pumping gas, wondering and trying to figure out why in the world is it costing me so much. You know, or you’re chewing on a chicken leg, you know, thinking about, holy smokes, this chicken is expensive, right? That’s microeconomics.
Macroeconomics is harder, though, because it’s like a fish in water, right? You know, fish doesn’t know he’s in water because it’s his environment. But I think it’s really important for your listeners to realize that to be successful with finances, you have to be aware of what the macroeconomic trends are around us.
So, there was the early 2000s when I first heard the term “Don’t fight the Fed.” I had no idea what that meant. And then I started reading some books. You know, I read G. Edward Griffin’s book Creature from Jekyll Island, or I read Richard Duncan’s book The Dollar Crisis, and it’s like, holy smokes, there’s more out here. There’s a bigger environment that’s happening. I’m just, you know, I’m like the fish, I’m swimming in the water, I don’t even know water exists, right? But I’m really beginning to realize as I start looking at some of these other things, is, oh, I start becoming aware of my environment.
And I started becoming aware that, hey, what did it mean on August 15 of 1971 when Richard Nixon went on national television and took the dollar off the gold standard? What did that mean for us economically? How did that affect the water around us, the environment around us? You know, because that really, that one decision is really what put us on a path where cash has become trash.
And where physical hard assets are a much more, can be a much better place economically, macroeconomically, because you have increasing asset values. You have, if you couple that with fixed debt, you know, I know people who have, you know, let’s say 25 years ago, they bought a house and they financed it on a 30-year mortgage. And today, their payment looks really small. You know, their payment looks really small today because inflation has worked in their favor.
And so I think it’s really important for us to recognize that it’s important to look macroeconomically at things.
What if everything you thought you knew about investing was wrong? Would you like to create a wealth strategy like the top one percent have and get exclusive access to top private equity deals that provide downside protection, tax efficiency, predictable cash flow, and have a lucrative upside? Discover how with the Pantheon Advantage and join our investor club today at pantheoninvest.com.
I think trying to be on the right side of the equation in terms of macroeconomics and really, you know, where is the puck heading in the future is really key. That’s what savvy investors are doing, and I really, I love to do that. It’s part of our investment thesis as well.
And really looking at, you know, the supply-demand imbalances, you know, that’s why multifamily has done so well in the past decade because of that imbalance in housing and the demand that’s needed—it’s just not there. And now we’re hitting the same exact thing in the energy sector, where the demand continues to grow and the supply is just not there.
So, the forecast is very imbalanced, which creates problems for some but opportunities for others. So, we definitely track those macro trends as well.
Jeff, do you have a particular wealth strategy personally that you’re focused on?
Yeah, I would say that hard assets, you really have to make a decision. Richard Duncan, in his book The Dollar Crisis, he takes, you know, 350-400 pages to talk about why the dollar and our, you know, this paper currency is on a dangerous path. And so, towards the end of the book, he says the demise of the dollar is imminent. He’s just taking the last, you know, 400 pages to lay out the case for why that statement is true.
So, he says, but the demise of the dollar is imminent. He says that fact is not in question. He said the question is, will it be death by fire or death by freezing? So, death by fire is hyperinflation, death by freezing is deflation.
Then he finishes the book with a powerful statement. He says fortunes will be made and lost on the answer to that question. So, when I read that, it had a profound impact on me because what I realized is that I have to make a choice. Because if I believe deflation or if I believe inflation, those strategies are polar opposites.
So, if I believe that it’s going to be death by fire, which is inflation, then what that means is that I want hard assets. Cash is trash. I don’t want cash laying around because it’s getting worth less all the time. I want debt, right? And I want low-interest, long-term debt. That’s the story with what inflation future is.
If I think it’s deflation, the polar opposite is true, right? Because now I don’t want hard assets because they’re going down in value. I don’t want debt because now I’m paying back debt with more expensive dollars, you know, or what I should say is I’m paying off my debt with dollars that have gone up in value, right? And so, it’s the polar opposite. Cash is king in a deflation story.
So, what I realized 20-some years ago is that I needed to make a choice. And I just looked at what I knew to be true. I looked at history a little bit and I asked myself a couple of questions. Number one, you know, do I think that politicians will ever do the fiscally responsible thing, where we’re going to balance the budget, we’re going to tighten our belt, we’re going to reduce, you know, social programs?
I think it was Thomas Jefferson who said, “A democracy will only survive until its people figure out that they can vote themselves entitlements.” Right? And so, tell me we’re not there right now.
And so, that was the first thing. You say, no, you know what, I think the politicians are probably going to continue to be fiscally irresponsible and they’re going to continue to not be on a path of reducing expenses.
The second thing is, do I think the central banks will continue to print money or not? And, you know, will they allow the currency to deflate in value? And, you know, then you’ve got people like Ben Bernanke who, you know, famously said that, you know, “Hey, a motivated central government can always create inflation because they have a printing press at their disposal, or it’s modern, or a computer key, you know, it’s modern, it’s contemporary.”
And so, he said no, a central bank can always create inflation. That was before he said that when he was a professor. I mean, that was before he was ever chairman of the Federal Reserve.
So, I just looked at those things and I said, “Look, I’m going to play my game that this is going to be and it’s going to be death by fire.”
So, philosophically, that’s where I believe. So, do you know, I push you, you take Dave Ramsey, Suze Orman, some of, you know, those, and I want to say, I think those, I have seen their advice do some really good things for certain people. It would not be the advice that I’m following, but I’m more of an active type of investor, right?
And, you know, I understand that, you know, debt is a two-edged sword. I think it was Warren Buffett that said, “Debt accelerates returns and it also accelerates losses.” Right? You know, it’s like a hand grenade, right? You can either, you know, use it to blow everybody else up or you can blow yourself up, right?
And so, debt is something that you have to really understand if you’re going to use it. There’s good debt and bad debt. And, you know, good debt, very simply put, is good debt that’s outsourced to somebody else, meaning somebody else pays it.
So, when we buy an apartment complex and people pay us rent, that rental income is what makes our mortgage pay. So, we have debt, but it’s outsourced to somebody else that’s paying it. That’s good.
Bad debt is, you know, I go on a, I want to go on a cruise and, you know, have a really fun time, but I don’t have the money, so I put it on my credit card. And then when I get home, then I’ve got to, you know, work for the next six months to try to pay that off. That’s bad debt.
And so, I think understanding how debt works because ever since Richard Nixon took the dollar off the gold standard, our currency, this is the brain, I want to tell you, I still struggle getting my head around this concept about what I’m going to say is true. But our debt, our currency, our dollar is debt.
We think of it as an asset. “Hey, I got, you know, a hundred thousand dollars there, I got ten thousand dollars in my checking account, I got ten thousand in my checking account. Oh yeah, you know what, that’s an asset.” But what that asset is is actually debt. It’s actually a debt-backed asset. It’s a debt-backed currency.
I mean, people say, “Oh, one payoff that we should pay off the national debt.” Hey, if we paid off the national debt, our economy would implode. It would fall apart. You can’t pay because the actual currency, the dollar, is a debt instrument.
It’s really hard to get our heads around that because, you know, we got people, I was right, hey, debt is bad, you know, get it all paid off, you know, don’t have any debt. But if you can successfully outsource your debt to other people, so that other people are paying it, that’s a really key wealth-building factor.
Right, so where does that put you, really, tactically, then, say, for portfolio allocation right now?
Yeah, so for me, I mean, I have some money in the market. I’m pretty cautious. I’m a little more internationally invested in my market allocation. But, you know, when I say I’ve got, it’s probably 10 percent of my total portfolio. My total assets are in the market, and 90 percent is real estate, farmland, apartment buildings, different real estate projects.
I mean, and what you have to understand is you could look at that and say, you know, that’s really foolish to not be diversified. But Warren Buffett famously said, “Diversification is for people who don’t know what they’re doing.”
Right? So, there are people that should be diversified. If you’re not a student of what you’re investing in, I happen to know real estate. I happen to be a student of real estate. I’ve got tens of thousands of hours of experience in investing in real estate, and so I’m very comfortable being heavily invested in my portfolio in real estate.
And real, with real estate comes the use of debt. So, real estate is just a, well, there’s real estate. There are those who would not call it an asset class, but for the sake of this discussion, we’ll call it an asset class. But real estate has produced more millionaires than any asset class, period.
When I was a financial advisor, the people that I worked with that had money, they didn’t make their money in the stock market. I can say without exception, they did not make that. Nobody that I worked with made their money in the stock market. They made their money one of two places.
They either made their money in real estate or they made it in a business. You know, and I’ll put under a business, maybe they got a big stock option thing or there was a corporate, you know, a golden parachute or something like that, you know. But that was all in business or it was in real estate. That’s where the money came from.
Now, people still may store their wealth or a portion of their wealth in the markets, but generally, they’re making it elsewhere. And so I’ve just focused on my wealth-building in the real estate sector because I like the idea of thinking in terms of there’s tier one, tier two, and tier three wealth.
You know, tier one wealth is, you know, the raw real estate. Tier two wealth would be, you know, like tier one wealth would be, yeah, you’ve got mineral rights, oil and gas rights, that type of thing.
Tier two is, you pull that, you extract the product out, and now you’re going to convert that to something. You’re going to take the petroleum, and you’re going to convert it to aviation fuel or, you know, anhydrous ammonia for farmers, for fertilizer. You’re going to get that. That’s tier two wealth.
And then there’s tier three wealth, which is really, you know, that’s the stock market. It’s, you know, derivatives, right? Derivatives are a fancy way of just saying it’s a derivative of something else. It comes from something else. And that’s what really the whole stock market, mutual funds, stocks, bonds, all of that, are simply derivatives of tier one and tier two wealth.
So, I just am focused, my portfolio more in the tier one and tier two side of things.
Makes sense. And then I know you have some background in life insurance as well, and we’ve been a huge proponent of this strategy of using whole life for the infinite banking type strategy. So, can you really comment on your philosophy around leveraging whole life?
Yeah, I think whole life is—this is where one area where, let’s say, what Dave Ramsey would say and what I would say, we diverge. But I think that permanent life insurance should be the foundation of every financial home.
If you think of, when you’re going to build a financial home, when you’re going to build a home, what do you do? You go and first get a plan together. But then once you start digging, you’re going to dig a foundation, right? You’re going to dig into the dirt, you’re going to dig a foundation.
In your financial home, your foundation is basically asset protection. That would be things like protecting your assets, your car, your home, the physical assets. And then there’s income protection, which would be some of your health insurance, disability insurance, life insurance, those types of things. So, asset protection, income protection—that’s the foundation of your financial home.
And then when you get up, you get up into the room—in this example, let’s say there’s two rooms in your house. You have your short-term savings, we’ll say, five years or less. And then you’ve got long-term savings, which would be five years or more.
Then the roof or the peak is really your risk investments. And what happens is, we’ve kind of been conditioned by Wall Street and the financial institutions. We’ve been positioned to build our financial home the other way—upside down.
When I say that, you know, permanent fixed whole—I own permanent fixed life insurance, I do infinite banking. I think it’s a great strategy. Is that the only thing I do? No. But it was the first thing that I did. And, as a financial advisor, I sold a lot of financial products, but we always used permanent fixed life insurance as the foundation in the household.
I can tell you, when times got bad—I went through the farm crisis of the 80s, the stock market meltdown in 1988, the tech boom and subsequent bust of the 90s, terrorist attacks in 2001, the real estate boom and subsequent bust in 2008, and the pandemic. So, I’ve seen the gamut.
What I can tell you as a financial advisor is the people who had permanent fixed life insurance in their portfolio—that was the one thing they weren’t complaining about.
It’s like just this mainstay, this anchor that, okay, the storms are raging all around me, but the anchor holds.
It’s a good financial tool. It’s very misunderstood.
Dave?
Highly misunderstood. Very misunderstood. There’s so much misinformation about it out there.
If people really understood what that asset could do for them, they wouldn’t be able to print enough of those policies. The insurance companies would have the printing presses going non-stop because it’s a really good product. When you understand it and use it properly, it’s a great asset.
Yeah, exactly. I think it’s interesting because we’re conditioned to look at particular products from Wall Street or wherever they come from. It’s a product, so we want to solve a situation with one product. But when you really think about investing strategically, as you’re pointing out, a lot of these macro trends, the environment, and everything going on, it’s really more than just one product. You’re actually implementing a process. Once you figure out this process, it can be a rinse-and-repeat, and you can have discipline over time. With that, you get the compounding effect.
Another really beautiful thing about life insurance is that it’s multi-dimensional in nature. You’re doing multiple things with one dollar. You’re getting life insurance benefits, it’s in a tax-free shelter, compounding tax-free, and you can give it to your heirs tax-free. It has asset protection. There are so many different dimensions to how you can leverage it. It’s very powerful. But typically, we’re conditioned to think of things in a one-dimensional nature, asking, “What’s the ROI on this?” and looking at it just from that perspective.
Yeah, I mean, I’ve always looked at it as there’s an internal rate of return. That would be what is the return on my cash value.
Then, there’s an external rate of return, and that would be, okay, if I take that money and take it out of the policy, borrow it out of the policy, and deploy that in another strategy, right through your terms, the infinite banking strategy. I’d be my own banker. That’s an external rate of return.
And then there’s an eternal rate of return, and that would be the return on the death benefit, right? So, return to my estate or to my heirs. That’s the eternal.
So, there’s an internal rate of return, and here’s the challenge: most people, and the Dave Ramseys of the world, only think of life insurance and they only measure it based on the internal rate of return. But they’re missing two other massive opportunities for return. Absolutely.
Jeff, if you could give just one piece of advice to listeners about how they could accelerate their wealth journeys, what would it be?
Well, certainly education. As a financial advisor, I used to have people who would say, you know, they’d make this presentation to them and they’d say, “Wow, you know what, Jeff, I trust you. You know, just do whatever you think is best.”
When they would first say that, I didn’t really know how to respond to it. After a few years, I kind of got a little perspective on my thinking, and my response would be, first, thank you. Right, thank you. I mean, literally, there is no greater compliment that you could say to me than that.
But secondly, don’t do that. Because I understand you might not love finances as much as I do. You might not be that interested in it, but we all have to have enough financial IQ that we’re making decisions for ourselves.
What I said earlier in our discussion is that you have to realize everybody in the world has an agenda. I have an agenda. Dave has an agenda. You know, the oil and gas people have an agenda. Your bank has an agenda. The mutual fund people, the insurance company, they all got agendas.
You have to have an agenda. You have to have your own agenda. You’ve got to play your own game.
And, you know, my goal as a leader of an organization is that I want to be the dumbest person in the room. I mean, what I’m saying is I want to surround myself with people who are smarter than me. So I’m not saying that you should know everything. You’ve got to know how to allocate and you’ve got to understand insurance. I’m not saying that at all. I’m saying you can surround yourself with really smart people.
You can be—it’s all you. You’ve got permission to be the dumbest person in the room, but you still have to have an agenda.
Carol and I—my wife and I—we do quite a bit of coaching and mentoring to young couples, and a recurring theme for us with them is intentionality.
Because people, by and large today—I don’t know if it was different years ago, but I’ll say today, by and large, people are not intentional.
I think it was Jim Rohn who said, “If you don’t have a plan for your life, there are plenty of other people who will have a plan for your life. And guess what they have planned for you? Not much.”
That was Jim Rohn that said that. So, you know, intentionality is important. Education is important. Play a game to be smart. Be smart about this. Because, yeah, you need to have your own agenda, and you need to have enough thinking so that you can be the dumbest person in the room and still be coaching your team.
Excellent, I really appreciate that sentiment, Jeff. I really appreciate you coming on the show today. I think we could go for hours on this topic, right? There’s just so much to uncover here, and I know we’re geeking out, but I know a lot of the audience is really going to love the value that you provided today. So, really appreciate that.
If folks wanted to reach out and learn more about what you’re doing, connect with you, what’s the best way to do so?
3DMoney.com is probably the best way to reach out to us. 3D Money. The number three, the letter D as in David, the word money—3DMoney.com.
Awesome. Thanks so much for coming on, Jeff. Really appreciate it.
Thank you, Dave. Appreciate the opportunity.