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Today we are joined by MC Laubscher as we delve into another wealth strategy secret of the ultra-wealthy, the Infinite Banking concept. This strategy is extremely powerful and can become a cornerstone to your wealth strategy.
Join us as MC shares his personal investing strategy of how investors and business owners can create, recover, warehouse and multiply cash flow through advanced strategies including infinite banking.
“What’s not working in America today is typical financial planning advice, 401k’s and other qualified plans” says MC.
MC further points out that Infinite Banking is a comprehensive approach that has a multiplier effect in:
- Gaining back control of your financial future
- Creating a tax free income stream for retirement
- Creating a liquidity vehicle that can be accessed for virtually anything
- Amplifying your real estate investment returns
- Providing asset protection for your family
- Avoiding taxes & probate when transferring your wealth to your heirs
If you are interested in learning more about how this Infinite Banking Strategy can be incorporated into your wealth strategy please visit: www.pantheoninvest.com/banking
Hey everyone, and welcome to another episode of Wealth Strategy Secrets. On today’s show, we have a very special guest joining us, M.C. Lobster, the Cash Flow Ninja himself. Today, we’re going to delve into the Infinite Banking Concept and how it can be a cornerstone to your wealth strategy and invest like the ultra-wealthy.
M.C. Lobster is a husband, dad, entrepreneur, investor, and educator. As an educator, M.C.’s passion is to share how investors and business owners can create, recover, warehouse, and multiply cash flow through advanced cash flow strategies. Having figured out how to escape the rat race and replace his income through cash flow investing, he shares how you can do the same through cash flow investing strategies. M.C. is also the founder of the popular Cash Flow Ninja, which is one of the top-rated podcasts, and he is also the author of “The 21 Best Cash Flow Niches.”
M.C., my friend, so good to have you on the show.
Fantastic to be here. I’ve been looking forward to this. I’m always excited to have a conversation with you, Dave.
Awesome, M.C. So maybe we can start, you know, you have such an interesting background, and I think that just gave you such a unique lens and perspective on life growing up and what you’re seeing today. Could you tell us a little bit about your background and journey?
Yeah, I’m originally from South Africa. That’s where the accent comes from, and I’ve been in the United States since 2001. I grew up in South Africa during a very interesting time in its history, which really shaped who I am today. One of the biggest things it taught me is that not everything is as it seems. I started to question everything, think critically, and study different ideas, viewpoints, and concepts.
Growing up in South Africa, a lot of information was withheld from the people living there. When the country transitioned from an apartheid government to a new democratically elected government, things changed. I really started to question everything at that stage, and it has helped me a lot in every part of my life. I came to the United States in 2001 after university. I studied economics and history and have an MBA in finance.
I traveled to quite a number of places before coming to the United States and was just blown away by this incredible country. The opportunities here are amazing, and the upward mobility available for anyone willing to produce and create value for others in the marketplace is incredible. I couldn’t believe it. Most people take this for granted in the United States, but for someone like me, the opportunities were astonishing. Many foreigners see Americans as having won a lottery ticket just by being born here.
I ended up playing competitive sports until 2007. While I was doing that, I pursued a career in investing part-time because sports took up so much of my time, and I traveled a lot. I tried to use my time wisely. When you play on sports teams that travel frequently, there’s a lot of downtime. I chose to dive into books instead of picking up bad habits or playing video games. I was that guy on the team bus or plane, reading as much as I could about economics, history, and investing. I came across Robert Kiyosaki’s “Rich Dad Poor Dad,” which really changed my paradigm. I wanted to learn everything I could about this whole other world of investing.
I bought my first investment property in 2001 after finishing the book. I continued to study real estate, and one of the light bulb moments for me was realizing the power of cash flow. After purchasing that first property, getting tenants, and collecting rent, I paid all the expenses associated with it. There was still money left over, and I realized that was cash flow, just as described in “Rich Dad Poor Dad.” I thought, “How many times can I do this? This is incredible.”
Through my sports career, I met several people, including a friend whose family owned a large portfolio of multi-family units on the north side of Chicago. They had a family business generating massive cash flow, which they deployed into real estate. I started working for them part-time while traveling and playing sports, starting at the bottom, picking up trash, doing maintenance calls, and helping with apartment turnarounds. It was actually a lot of fun looking back.
I eventually went into property management, leasing apartments, working in the office, handling capital expenditures, and budgeting for multi-family properties. I got my broker’s license and joined their acquisitions team. During this time, I learned a lot from my friend, who invited me to lunches with his accountant, tax strategist, legal advisor, and other team members. I was always fascinated by their warehouse, liquidity, and capital.
I realized how banks operate and how this family applied similar principles to their personal and business economies. That was my second light bulb moment: I needed to set myself up like a bank. The first light bulb was cash flow, and the second was the need to adopt the strategies of a bank. I also learned about the different levels of the game and started calling them cash flow ninjas. They were the key players in their market, and nothing moved without them knowing. It was tough to compete with them, especially as a part-time investor.
I realized that instead of competing, I needed to collaborate and partner with them, bringing value to the table. This led me to share what I’ve learned through my journey. Today, I have a company called Producers Wealth, where we help people set up cash flow management strategies based on the Infinite Banking Concept. We help clients across all 50 states. I also run Cash Flow Ninja, a podcast and educational platform that started in early 2016. It began as a passion project and has now grown into a full-blown platform where I interview the best minds in business and investing.
It’s incredible how time flies when you’re having fun. I’m grateful for the opportunity to share my experiences and learn from others, including amazing people like you, Dave.
Yeah, no, that’s awesome! I mean, there’s so much to unpack and I know we can probably talk for days on this topic, so we’re definitely going to have to have you back on the show to talk more about that. It’s such a unique background, and I think just coming to the U.S. with that perspective—a lot of us do take these things for granted that we have today. So, M.C., one of the things that I know we share a lot in terms of philosophy together and everything, but we’d like to also talk to our guests about is personally, what is your personal wealth strategy?
What has been able to get you this far and what have you deployed? Because I know you’re practicing what you preach, right? A lot of this has been developed from what you’re doing yourself, right? Because you are the original Cash Flow Ninja. So, can you share with us a little bit about your personal wealth strategy?
Absolutely, I love that. I love folks that practice what they preach. I always call it eating their own cooking, without getting sick and throwing up.
But the philosophy of how I approach wealth and that’s where the name Cash Flow Ninja comes too is my dad is actually a ninja. He’s a ninth dan black belt in karate. One of the things that I’ve learned from my dad, and how do we learn as children? By observing. So my dad pursued excellence in his craft daily. He’s in his early 70s and can still do a clap push-up, can still beat me up if he wanted to, because he literally just tries to get better every single day and pursues excellence in his craft. I took that mindset and philosophy to wealth.
I love frameworks and models. I like to simplify things, especially when you’re in chaotic environments, which we’re all living in today. Control the things that you can and simplify the things that you can within your own personal, business, and investing economy. What I’ve learned from and adopted and implemented myself is using a framework of cash creation. There’s a way that you have to generate cash. So, I generate cash actively still through my businesses and also passively. Most folks, and the blueprint is out there, can generate and continue to create stuff and generate more cash every single year.
The first pillar in my framework is generating cash through my businesses and the several businesses that I’m invested in, and then also passive income, which I’ll get to in a second. The second part of my wealth strategy is capital positioning, or what I call cash capture. Essentially, it means positioning and allocating assets or capital in a manner that is as efficient and effective as possible. How can they do more than one thing for me in my wealth strategy? After I make cash in my business, I have to put it somewhere. One of the places I warehouse my capital and cash is inside a dividend-paying whole life insurance policy with a mutual insurance company, for many reasons, which we’ll get into.
This allows me to position capital that’s guaranteed to grow tax-free and earn dividends, which is profit sharing from the mutual insurance company. I also get to collateralize it, which means placing an asset as collateral for a loan or line of credit backed by that asset. The cash value in a life insurance policy can be used as collateral, which an insurance company will then lend you up to 90% of your cash value. If you have $100,000 in cash value, you’ll probably get a loan for around $90,000.
I position it there because the money continues to grow and compound, and then I can deploy it elsewhere. I had a mentor 20 years ago who did this with CDs in the 70s when they earned double-digit returns. He would position it there, borrow against the CD, and buy real estate with the money. The CD still earned double-digit returns, and he could buy real estate with the money too. You can do this with a lot of different assets like gold, silver, and art. You can get loans secured by the value of these assets.
For example, gold bugs can have their gold and borrow against it to buy real estate. Business owners can place the asset of the business or receivables as collateral for a business loan to invest and grow their business, or like someone in our network did, they bought the real estate from which the business operates. Real estate investors can get a home equity line of credit secured by the equity in the property to buy another property. You don’t have to sell one property to buy another one; you can have two. Elon Musk did this with Tesla shares as collateral for asset-based lending.
I prefer the life insurance strategy for many reasons. I’ve used some gold, silver, and crypto too. The second portion is the cash flow portfolio, which generates my passive income. I make money in my businesses, position it effectively and efficiently, collateralize it, buy more assets that produce income to pay off loans and provide passive income. I also have a growth portion focused on industries with good upside potential over the next five to ten years, like crypto and blockchain, businesses, tax services, and legal services.
The final pillar is tax strategy, asset protection, and estate planning. You should definitely protect everything you’re producing, creating, positioning, and deploying through proactive tax planning, proper asset protection, and estate planning. That’s my framework, with certain portfolio allocations. In a nutshell, that’s what I do from a wealth strategy perspective.
Yeah, I love that, M.C., and I think not enough people look at this whole thing in respect to a strategy, right? Because this is an overall strategy, and you have many different components to it. A lot of us are trained, probably from Wall Street, where all we’re looking at is a very single-threaded view, like what’s the ROI on that? You know, my 401k is doing 9% or 11%, and that’s all you really think about.
But what we’re really trying to talk about here, which you articulated well, is having a comprehensive strategy in place, and how you move all these things together to get exponential results with building your wealth and living the life you want to live. So, that’s great. Tell us a little bit about what is wrong today, M.C., with things like 401ks and typical financial planning advice you see out there. What’s wrong in your view?
Yeah, and that ties into one of the comments you made that’s so important: where you bring all these things together. We’re programmed and conditioned to see things one at a time, but they all fit together. Think about health. If you have a conversation with anyone about their health, everybody knows we have to eat healthy, exercise, hydrate properly, and get decent sleep—sleep is very important for recovery to enhance our health. If one of those things is missing, it throws everything off. If you’re eating horribly, just consuming junk food, but still exercising, hydrating, and sleeping, something’s going to be off and you won’t get optimal results. It’s the same thing with an overall wealth strategy.
Bringing that to your question, what’s wrong with the planning done today is everything is seen in a vacuum, not as part of everything else. Most Americans, and this is true globally to some extent, essentially have a 401k (stocks, bonds, and mutual funds) and a primary residence, and that’s it. That’s where the majority of wealth is kept in the United States. You’re literally looking at just two areas: a house and something you have no control over—stocks, bonds, and mutual funds managed by someone else.
Number one, I would say the big problem is that it’s not seen as part of your ecosystem or economy (personal, business, or investing). Number two is the approach, which is a philosophical issue. Most people think that someone else cares more about their money than they do, which folks often find isn’t the case. People think there are smarter individuals to whom they should outsource this skill. I would argue, no, if I’m going to a dentist to pull a tooth, I’ll sit in the chair. But if I’m going to brush my teeth, I’m not going to get someone else to do it. Taking care of your wealth and money falls into the brushing-your-own-teeth category. You bring in specialists like a dentist or orthodontist for certain things, but you’re still in control of your oral health. It’s the same with your health—you’re responsible for it. Get a personal trainer, dietitian, or doctor, but guess who’s responsible for their health? You are.
Money should be the same. The biggest problem is we hand over our money to Wall Street or a financial advisor, thinking they have our best interest at heart, which isn’t always the case. There are great folks in the industry, but you should be in control and responsible for your wealth. Another issue is that retirement plans and pensions are vehicles where the rules can change at any time. Taxes can change with every administration, and the rules regarding vehicles like 401ks and pensions can change too.
I don’t want to be in a position where I have no control over something so important. Your wealth affects everything—quality of life, experiences, and more. Relinquishing control over that is problematic. Your strategy of buying a primary residence, paying it off, selling it for retirement, or maxing out 401ks relies on the market going up. However, markets can go up, down, or sideways. Betting on one scenario for your dream retirement or vision is risky. I don’t like the concept of retirement. If you find something you love to do, you would never stop doing it. There’s a lot wrong with the approach and system, but the biggest issue is control and accountability with the way they’re set up.
Yeah, so many good points there. There’s so much to unpack, and I love the analogies. I think that really simplifies the concept for many people. We’re really taught, based on conventional wisdom and Wall Street—this $30 trillion industry—to think the way they want you to think. So, it becomes ingrained from an early age to start thinking that way. To challenge that norm really takes some courage and thinking outside of the box.
I really love and resonate with your concept of control. Having control over your future and your financial well-being for your family is absolutely critical. Why would you take that and then just completely outsource it and say, “Oh, you know, I’m following that strategy, it’s good to go”? Whereas if you can put in place this strategy and have complete control, complete downside protection, and multiple layers of downside protection to handle any scenario, as you pointed out, they’re making that faulty assumption that the market is just going to go up. But other things like taxes are going to go up, and government controls can completely change and throw you off.
So, M.C., tell us now, having that as a little bit of backdrop, what is Infinite Banking anyway? I think a lot of people are confused about the concept. Sometimes it’s referred to in different ways, but from a 101 perspective for someone new to the concept, tell us a little bit about what it actually is.
It’s a way to reclaim the banking function back into your own personal, business, and investing economy. One of my mentors, Nelson Nash, wrote “Becoming Your Own Banker,” and he shared this analogy which I think would be helpful for folks.
He said to me one day, “M.C., if you think about it, all of the water in the world is connected in some way. There’s one big pool of water because all the different oceans are connected. You have rivers connected to the oceans, and underground water connected to the rivers, which is connected to the ocean. When the earth heats up, condensation forms, clouds form, they get heavy, and then it starts to rain. The water returns back to earth. Where does it go? It ends up in the oceans, rivers, or underground water. It’s all connected. So, it leaves the pool of water but always comes back.”
If we think about banking, especially commercial banking, in the same manner, there’s one pool of money because of how money is created. It goes to the commercial banks, through the commercial banks to the retail banks, and so forth, throughout the economy. If we go out for lunch and one of us pays, the money goes from our bank account to the restaurant’s merchant bank account. They pay their employees, who then put the money into their bank accounts. Money circulates but always seems to end up back in the commercial banks and the banking system.
You can create that for yourself by creating your own little pool of money. Position capital effectively and efficiently so money leaves your pool, goes into the economy (whether in your business or investments that produce cash flow), and then returns to your pool. You stay in control of the cash flow and cash flow management in your personal, business, and investing economy. This has a multiplier effect and compound interest effect, which is very powerful. Infinite Banking is you becoming the banker and reclaiming that function, which we’ve relinquished to banks. Banks play this game with our money; why can’t we play that game with our own money ourselves as the bankers and in control of our cash flows?
That’s a great analogy. Can you give us an example of what that means? If we’re reclaiming that banking function and doing something in our lives to support that, give us a specific example.
On the banking side, there’s a deposit side. We put money in a bank for some reason; there are still benefits like e-bills or bill pay, although you don’t earn a lot of interest anymore. So, let’s say we deposit $10,000 into a bank. That’s the deposit side. But there’s also a lending side. What does the bank do on the back end where all the money is made? On the back end, banks take that same $10,000, pay you 1% interest, and lend it out at 10%. There’s a spread there. If the bank collects $1,000 in interest on a $10,000 loan and pays you $100 (1% interest), there’s actually a much larger spread than just 9%; it’s 900%.
A practical application is using a dividend-paying whole life insurance policy with a mutual insurance company, specifically structured for maximum cash value. The majority of your premiums go towards cash value. Let’s say 70% of your premiums go to cash value. On one side, you deposit premiums into this policy, building equity quickly. On the other side, just like a bank, you get to collateralize the cash value and borrow against it, becoming both the depositor and lender.
For example, with $100,000 in cash value, you take a $90,000 loan at 4% interest and repay the principal and interest. You’re the owner of this bank, in control of the cash flows, and benefiting from your own pool of money, unlike commercial banks that control the larger pool. This way, you play all the different roles: depositor, borrower, and owner of the cash flow management system.
Yeah, absolutely. To give some practical examples, I’ve been using this strategy for about 10 years now. There have been times in my life where we’ve reinvested in the business, or the business wasn’t going as well from a cash flow perspective, and we needed liquidity right away. Within a few days, you can have access to these funds. I think that the concept of liquidity is really powerful. For things like business, you can also think of it from a protection standpoint. If you want six months or a year’s worth of living expenses for a rainy day fund, that’s a very efficient place to store your funds in your personal economy.
Another way we’ve been using it is to amplify investment returns. By having dry powder to act on a good opportunity, you can borrow against the policy to invest in an opportunity like a multi-family syndication and amplify your returns. Any other layman’s examples you’d like to share?
There are so many great examples of how to utilize this strategy. You’ve touched on business owners accessing liquidity to grow their businesses. I’ve personally done that too. This vehicle is like a Swiss Army knife of financial vehicles, with so many different things it can do for you. Let’s stay on the business for a second. You can access liquidity and grow your business while being in full control of the cash flow management cycle.
I actually started my firm, Producers Wealth, with a policy loan from one of my policies. Eating my own cooking, as I said, I didn’t make a payment back right away. I waited about seven or eight months until the business was producing nice cash flow and was profitable, then repaid the entire loan within 12 months. There’s no bank where you can walk in and say, “Can I please get a line of credit or loan? I won’t pay you anything for seven months, but I’ll pay everything back in 12 months.” You’d get laughed out of the bank.
Another thing that provides a lot of certainty in uncertain times is that business owners can set up these policies, access capital when needed, and set up their own tax-free retirement with these policies. For investors, they can utilize the liquidity and leverage it to acquire more investments. The cash flow from the investments pays down the policy loans because that’s where they warehouse their capital.
A lot of folks over 59.5 can access some of their retirement funds without penalties. Many have moved money from uncertain and unpredictable places into these policies, producing a tax-free retirement in five years. We work with clients from their early 20s up to 70s. There are many liquidity events for those aged 50-70, such as inheritances, business sales, and asset sales. These policies provide a great place to fund in uncertain times.
You can also set up a family bank, as I’ve done with my family, using our different policies. This is a fantastic strategy based on the Rockefeller method. You don’t have to be a Rockefeller to implement their framework on a smaller scale within your personal and business economy.
People are attracted to this vehicle for the guarantees. The principal is guaranteed and won’t go down, regardless of market chaos. The growth is guaranteed, and dividends, though not guaranteed, have been consistently paid by companies for over 100-150 years. These companies are solid institutions, not stock insurance companies listed on stock exchanges.
The growth is tax-free, and while you can’t deduct the premiums from your taxes, the money grows tax-free once inside the policies. The death benefit is tax-free and transferred to the next generation. Policy loans are also tax-free, allowing you to use them in your business or invest elsewhere.
Depending on your state, the policies may provide asset protection, even if not in a trust. States like Florida and Texas offer this protection. This vehicle is incredibly powerful and versatile, like a Swiss Army knife, with many different uses.
Family bank setups are also very powerful. I’ve set up policies for my children to teach them the banking system and how we finance things. If they need a vehicle or funds for education or starting a business, the money will be there in the policies. There are so many different ways to use this strategy.
Yeah, that is just gold, M.C. I think that really helps to provide some clarity in terms of the concept and ties back to some of your original comments around having a strategy. I mean, this is a comprehensive strategy. You called it a Swiss Army knife, and I think it’s that and more. I’ve talked to a lot of CPAs and some very professional level investors, and sometimes they’ve said to me, “Hey, this isn’t growing as fast as my mutual funds. It’s got a lower rate of return, and the costs seem high. Why would I do this?”
As you’re pointing out, you have to assign value to all these different tactics because it really starts to become exponential. What are some of the other things you know of why people might not be interested in this or objections they might see?
That’s a great question, and I always share the good, the bad, and the ugly. What are some of the things that folks look at and say, “I don’t know”? One of the first things is it all depends on your approach and how you view this from a comprehensive strategy perspective.
I think long-term, 20-30 years from now, and I’m also starting to think in different generations, leaving something for my children and their children to ensure everything is in alignment. When you think short-term, unfortunately, that’s how we’ve been programmed and marketed to—shiny object syndrome and get-rich-quick vehicles. Insurance is a long-term view; it’s powerful within five years, very powerful in 10 years, and extremely powerful in 15 years. If you only look at one or two years into it, it won’t be a good fit for you. You need to think long-term and big picture for it to make sense.
Insurance is a savings vehicle, not an investment. It needs to be compared to other savings vehicles, not a stock portfolio. Most people say they save for retirement in a 401k, but there’s a difference between saving, investing, and speculating. Most people speculate their retirement in those vehicles, whereas a savings vehicle guarantees the principal, has a conservative return, and provides liquidity for other areas.
Philosophically, know that it’s a savings vehicle in a comprehensive strategy. Know what you have, why you have it, and what it’s supposed to do for you. I have this because it’s a savings vehicle where I warehouse my savings to provide certainty. It’s a foundational asset in my overall wealth strategy, something I can bank on in times of uncertainty.
For example, back in 2020, when chaos hit, most folks were scrambling as the equity markets pulled back globally. I needed a policy loan, and despite the insurance carrier going virtual, I accessed capital within 48 hours of submitting a policy loan. None of my values in my policies went down. That’s why I have it; it’s not supposed to deliver the returns I get in real estate or other areas of my strategy. This is foundational, at the core, something I can fall back on.
Another concern is the cost. Everything has a cost, benefit, and value in life. Insurance policies are structured differently, optimized for cash value, reducing insurance costs and commissions paid to agents. The value of it is in the certainty it provides. Just like paying a storage fee for gold and silver in a vault for peace of mind, the insurance policy offers similar value. It’s a vehicle where you warehouse capital, and upon your passing, it pays a multiple of your account value, tax-free, to your beneficiaries.
Building up these policies takes time. The first year, the amount of capital you’ll have won’t match what you put in due to insurance costs. But over time, with long-range thinking, you’ll build up more capital and start borrowing against the cash value for your business, other needs, and investments.
Yeah, so well said, and I think part of that is mindset as well. Do we look at something as a cost or as an investment? As you articulated, this is really an investment because it can do multiple things for you when you look into the future and the uncertainties that life throws at us. If you can create some certainty with these uncertain events, there’s huge value in that. It’s a huge investment.
M.C., I know we’re running out of time here, so I think that was super helpful in terms of giving listeners a sense of what the policy is, how it could be structured, and some of the benefits. If you could give one piece of advice to our listeners about their wealth trajectory, what would it be?
I think clarity and intentionality are the two biggest drivers in my journey. Clarity means being very clear on the game you’re trying to create. Most folks love to play games, especially in the United States, so why not have a little fun with it? What’s the vision you have for your life and family? Be very clear on that. Create a game that’s fun to play and worth winning. We don’t want to win games that aren’t worth winning. Intentionality means being very intentional with everything you’re doing. It’s hard, but I make sure I’m aligned and focused every day. If I’m not being intentional, I get back on track. Emotions play a big role in money and investing, and how you deal with them increases your emotional IQ. Successful investors are intentional about their vision, strategy, and strengths, staying focused and not chasing shiny objects.
Dave: Yeah, absolutely love it. That ties to the origination of a strategy. You’re creating a strategy for a particular outcome. If you don’t have this outcome, you’ll miss. Being intentional about creating your wealth strategy and plan will take you places. M.C. and I have been collaborating on this Infinite Banking Concept and created a special landing page at pantheoninvest.com/banking for you to learn more.
CashflowNinja.com is where all our podcasts, tools, resources, programs, and books are. If folks want to see other things we talk about, they can check us out at CashflowNinja.com.
Awesome, thanks so much for coming on today, M.C. Always enjoy the conversation, and I know there’s a ton of value here for our listeners.
Thank you so much. This was a blast.
Dave: Hope you enjoyed the show with M.C. If you’d like to learn more about how you can set up the Infinite Banking Strategy with myself and M.C., please go to pantheoninvest.com/banking and sign up. Thanks for tuning in, and we’ll see you next time on the Wealth Strategy Secrets of the Ultra Wealthy show.