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We are back with M.C. Laubscher, the President of Producers Wealth, a leading wealth creation firm. With clients across all 50 states, M.C. and his team specialize in implementing holistic wealth creation strategies. Their mission is clear – to assist producers and creators in building, safeguarding, and multiplying their wealth, regardless of the economic climate.
You may already be familiar with M.C.’s highly acclaimed podcast, Cashflow Ninja, where he dives deep into the realms of business and investing. But that’s not all! M.C. has recently launched a brand new podcast, Cashflow Investing Secrets, to provide even more value to his dedicated audience.
M.C.’s purpose goes beyond just financial success. In this episode, he talks about challenging the conventional beliefs and misinformation surrounding money, saving, investing, wealth, and retirement. By breaking down societal belief systems, M.C. empowers the listeners to question the status quo and adopt new strategies that align with their goals.
Join us in this captivating conversation as M.C. shares his wisdom and experience, unveiling strategies that can accelerate your path to financial freedom. It’s time to take control of your legacy and live life on your own terms.
Get ready to transform your financial future with M.C. Laubscher’s revolutionary insights!
In This Episode
- His prevailing viewpoint on the current state of the economy
- The cash flow strategies he is implementing in the uncertain future
- Unprecedented amounts of capital pouring into life insurance policies
- Infinite banking concept as a continuous process
- Creating opportunities with the unpredictable economy
Hi, everyone. Welcome to another episode of Wealth Strategy Secrets. Today, we are joined by a returned guest, M.C. Laubscher. M.C. 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 cashflow strategies.
Having figured out how to escape the rat race and replace his income through Cashflow Investing, he shares how you can do the same through cashflow investing strategies. M.C. is also the founder of Cashflow Ninja, the creator, and host of the top-rated business and investing podcast. Cashflow Ninja, has been downloaded millions of times in over 180 countries.
M.C. is also the president of Producers Wealth, a wealth firm that assists investors and business owners in implementing advanced cash flow strategies. M.C. is the principal at Producers Capital Partners an investment firm that helps investors to invest in alternative cash flow investments. M.C., my friend, good to see you.
As an investor, success lies in realizing and recognizing cycles.
Great to see you. I’ve been looking forward to this conversation.
Me as well. Investors had a chance in the audience to listen to you. If anyone hasn’t, we had a great interview back in Episode Six (How Infinite Banking Can Exponentially Multiply Your Wealth). Please go back and listen to that, which has a full background of M.C.’s story. As a quick summary of your background, which is fascinating as to how you got into this space, and how you’ve evolved. I think you have a global and macro view of economics, politics, and cash flow. That’d be a great place to start.
I grew up in South Africa during an interesting time. As a young man, I saw the world in front of me flip upside down. I realized during that time, that there were a lot of things that I wasn’t aware of and that I should become aware of because I even saw adults as a young man completely; couldn’t make sense of what was happening.
I also grew up on a homestead in South Africa; would be qualified as a homestead, which is a huge advantage in the investment world, believe it or not. I started to realize it become a strength because you know how things work, where things come from, and how everything is connected. If you don’t plant your seeds at a certain time of the year and you don’t nurture it, take care of it, and manage it well and properly, there’s not going to be anything to harvest – during harvest season.
Coming to the United States, I played at a high level in sports here. As I was traveling, I was reading history and economics books; that was my passion. That was my major in university. I started to read Rich Dad Poor Dad, which led me to discover this incredible cash flow investing. I took action and bought my first investment property.
After collecting all of the rent, I’m paying the fees associated with it and expenses in cash flow. So the light bulb moment was, “Wow! This can work.” I read it in a book – my paradigm shifted, my thinking shifted, I took action, I implemented, and executed. Now, this property is a cash line. I asked myself, “How many times can I do it?” I became passionate about cash flow investing.
As an investor, I’ve always tried to educate myself on what’s going on because I’ve realized how connected everything is, especially the global economy on a macro level. I became a student of Macroeconomics. I also try to sharpen some of my technical skills of being Board of Trader Communities. I don’t trade personally, and I don’t own any equities but I felt like a well-rounded investor. This is a skill set of how you can identify things in a shorter-term time frame.
As my cashflow journey evolved and grew, there were lots of lessons, there were a lot of great times and successes, and there were a lot of challenges, and failures, which helped me grow as an investor and also as an entrepreneur. I discovered the strategy; this advanced cash flow management strategy. This was as early on as a Real Estate investor, I had a friend who came from a wealthy family, and they operated their own Family Office structure. I realized how cash flow was managed within their Family Office structure, it was completely different than what anybody else was aware of. This is where I discovered Infinite Banking and brought that into what I was doing, which amplified and put a bit of rocket fuel on my Real Estate investing.
Around 2014, and at the beginning of 2015, I started Producers Wealth to help other investors implement and execute the Infinite Banking strategy, too. There was a huge disconnect in financial services between the business owners, investors, and the providers of it. As an entrepreneur, when you see a disconnect or you see a gap in the marketplace, there’s an opportunity to provide a solution and start a business. I did that. We’re still active in 50 states in the United States helping all business owners and investors implement and execute Infinite Banking.
Then with Cash Flow Ninja, my journey of learning continues. It’s great. I learned from the best minds in business and investing every week by doing a podcast. The podcast has turned into a full-fledged education company where we have a book, ‘The 21 Best Cashflow Niches™’ – sharing the best niches that folks share on the show. We also have a newsletter where we share every single month a new cashflow niche that was shared and also have a mastermind, but it’s been a fun ride, Dave. It continues to be a lot of fun meeting incredible people and getting to work with a lot of incredible business owners and investors.
I appreciate your wisdom and insights, M.C. It is a unique perspective, having that global view and being brought up outside of the country, then coming to the U.S., and understanding the merits of what this country stands for. Which at the fabric of it, it’s all about freedom. And as an entrepreneur, you’re trying to seek freedom in your life. Wealth, having money, and the financial means to do things is part of achieving that freedom.
That’s a unique look at things. A lot of the audience can learn a lot from you in terms of how you see the world. Segueing from that as well, I love that you’re able to study history, always look at becoming a better investor, and you’re understanding everything at a macro level of what’s going on in the world – geopolitically, politically, economically. There are many different sources out there which makes it confusing for investors to say, “How do I make the right decisions? What is best for me in terms of allocating capital, in terms of building wealth?”
Especially right now, we’re in this environment where everyone is pushing fear; it’s what people are doing. There is a lot of fear and that can be scary. It can put you in the mode of being paralyzed ride, the deer in the headlights, not doing anything. Or it can make you irrational, and then you make an emotional decision. That’s where investors always lose when they tie in the emotion. It’s great to create a system and a strategy around your wealth.
Talk to us about it from a macro perspective. We’ve got a lot of failures in the banking system right now, it’s one thing that’s prevalent. But can you give us your 30,000-foot view of how you’re seeing the worldview, and the economy right now in 2023?
To your point, one of the things that I learned as a young man in South Africa was there was a lot of uncertainty. I feel the gift that I received early on in my life is there was so much uncertainty. Nobody knew what was going on, which then, the ‘Herd Mentality’ kicked in. So if there’s much uncertainty, then the fear starts – it becomes hysteria; it’s a chaotic environment.
Having lived life through that, I can see that the people who have great frameworks and models of how things work and how the world works, stayed. They don’t get sucked into every single issue and become emotional about it. They stay focused. They’re going to have a huge competitive advantage.
If you don’t plant your seeds at the right time and nurture them with care, there will be nothing to harvest when the season comes.
Also from an information standpoint, you have to, as an investor, read everything in wide. So, I look at it as, “What’s going on in the mainstream media?” That gives me an idea of what the official narrative is. Then I read opposing views of people around the world. That makes you see things from different angles. It gives you a better picture of what’s going on. On a big macro level, there’s been a world order in place with the U.S. at the forefront and the U.S. Dollar as the world reserve currency.
That’s how the world is operated coming out of the World War II. In 1944, Britain’s agreement was put in place, the United States dollar was put in as the world reserve currency. The U.S. came out of that war as an established superpower, unchallenged because the Soviet Union at that point was badly bruised from the war. The U.S. was a huge producer and creator of goods, which made their way to the warfront in Europe. A lot of capital came back to the U.S. and made the U.S. wealthy.
This is all cyclical. At the point we are at right now, globally, there are a lot of different themes. We could talk about that for hours, but the one thing that I want to drive home is, the world order is slightly changing. It’s not in one way or another, it’s still figuring itself out. You’re going to start to see a lot of different moves made by different countries, not just on the war front. Most people think, “This war theme that’s going around, there’s a war coming.” Wars are different from what the average person perceives them to be. They can be economic, they can be financial, they could be psychological, and eventually, we think of war as the kinetic form of that.
There’s always psychological, financial, and economic warfare going on. That’s how the balance in the world order is established. This has been going on and it’s been taken to another level. The other theme that you refer to is the banking crisis. This is interesting because of the world order that was established, the US dollar was the world reserve currency. And the world’s monetary system is a debt-based monetary system. It has been.
The world operates on cycles, and so does the financial world.
Because of all those things changing, and especially in the system in the way that it is, this has impacted a lot of the centers of finance where banks are in the middle. For example, because it’s a debt-based monetary system, you can see every single country creates more and more debt. Debt keeps increasing. It’s the nature of the system. The system depends on it.
Over the last couple of years, interest rates have dropped low all over the world. We’ve heard the terms, ‘free money’, ‘cheap money’, and ‘low rates’. People might have seen their mortgages that they could have locked in at one stage under 3% if they were fortunate to. This results in a lot of exuberance, a lot of asset prices being inflated, and inflation; which has become a huge political problem, not just in the United States, but all across the world.
Central banks across the world then started raising rates. Back to the banks, where do banks put a lot of their capital and warehouse a lot of their capital that they use as collateral? You and I will chuckle at this, but a lot of ‘Risk-Free Assets’ for collateral are government bonds. A lot of banks, for example, Silicon Valley Bank, you have Signature Bank and even Solar Gate Bank, have a lot of bonds that they bought at a low interest rate.
When interest rates double in almost six months, the value of the collateral that the banks have; is one thing if a bank can hold a bond to maturity and collect the full amount. But when they cannot do that, they have to sell the bond at a loss when depositors win capital. That’s what happened with those three banks, specifically Silicon Valley Bank where there was essentially a run on the bank for many different reasons, and they had to sell it at a loss.
Those who have strong frameworks and models for understanding how the world works remain focused and avoid getting caught up in every issue. They maintain their composure and will have a significant competitive advantage.
It resulted in other banks, which were in business with Silicon Valley Bank, selling their collateral too. All of a sudden, they were all insolvent. Then it turns out that a lot of the banks were in the same situation. Now there’s fear, there’s panic, there’s hysteria, there’s a run on certain banks now. This is where a lot of banks have found themselves to be insolvent.
What I see happening in the banking industry is, if you look at it, there are 4,800 banking licenses in the United States currently. I’ve had conversations with insiders in the banking industry where there were banks already by the end of last year, over 700 technically insolvent banks. The insiders knew that a lot of this was coming in this year. Of course, when the first three banks went under, there was now a contagion and we saw First Republic Bank go under.
The hearings that have been held so far and questions that have been asked to the FDIC, and the secretary of the treasury, Janet Yellen, have not produced confidence at all. I know they’re coming out and saying, “The banking system is sound and resilient.” We’ve had the president come out and say that, we’ve had a Jerome Powell from the Federal Reserve come out and say that – everybody comes out and says that. You know there’s panic behind the scenes.
What’s happening? Janet Yellen went on to Capitol Hill. She was questioned by a senator. I believe it was from Oklahoma. He asked her point blank, “We have smaller banks. We have regional banks. Are the deposits in those smaller and regional banks, even the uninsurable accounts or the amounts over the insured amounts as put aside by the FDIC and insured by the FDIC, will they be protected as in the case of Silicon Valley Bank?” The response was, “They’re not insured.” He then said, “So you’re telling me that Silicon Valley Bank, their depositors were being made hold?”
Side note, there were a lot of politically connected people that bank with Silicon Valley Bank, but the other depositors wouldn’t. She said, “They’re not insured”. He said, “Do you understand that in smaller banks and regional banks, the deposits will move from these banks into larger banks?” And she said, “We certainly wouldn’t want that to happen.” But that is exactly what’s happening. For folks, the big takeaway, if you’re wondering what’s happening in the banks, deposits are fleeing smaller, and regional banks are going to bigger banks because people are now afraid that all these smaller and regional banks are the next to fall.
The best place for a business owner and investor to keep their capital is where they can access it to grow their business and investment portfolio.
You’re going to see a lot of the smaller banks disappear and go insolvent. You’re going to see bigger, medium banks and regional banks disappear and go insolvent. This is going to continue as deposits flee. Nobody’s doing anything to stop it at this point. That’s what’s happening there. It’s going to play out interestingly. It’s the one thing that investors should know. I jokingly said I grew up on a homestead so I figured that everything was connected. I know where eggs came from. I know where the chicken wings came from. I know where milk, butter, and all those things came from.
If you think about how things work in the banking world, who are some of the biggest lenders to small businesses and smaller investors? It’s smaller and regional banks. Investors are going to be affected by that because most of the lending is done by the smaller and regional banks. So it’s going to have an impact on small businesses, smaller investors; it’s going to have a profound impact on the economy. We’re seeing what’s coming from a macro perspective and looking at what’s happening inside there. It’s important to know this is happening. And it’s also important to know that there are things that you can do to protect yourself from any of the chaos that’s happening in the banking system.
That’s such a great backdrop. I know that we are aligned in terms of how we share our viewpoints. Because a lot of the things you hear in the media are mainstream – there are always agendas hidden beneath. Everyone is trying to push you to think a certain way. One of the things we’re trying to do is objectively look at what’s going on with these different types of things. Then also figure out, “How can we help the investor make better decisions about allocating portfolio, about insulating themselves, whatever it might be?” Just remove the emotion from the situation. Then let’s try to figure out where are we going. Where do we want to be? It’s taking that uncertainty and creating certainty with it.
For people out there, if you’re concerned about your bank, there are multiple things that you could do to redeploy that capital. Also from an overall economic standpoint, what could you do with all of this certainty? The way I like to think about it is, “If you lost your source of income, whether you’re a business owner, or W-2, are you going to be impacted? Do you have enough runway to get you through this until you can figure out the next thing?” Whatever that might be for you, maybe six or 18 months.
I know Family Offices, ultra-high net worth, they have three years of liquid capital to move through an entire cycle of liquidity. A lot of this is around how you manage your liquidity. No one talks about that. From a portfolio standpoint, what is the best way to manage liquidity? As you discovered, we came into Infinite Banking; me and my wife 10 years ago found the merits of that.
A good rule of thumb is to keep three to six months of operating capital for your business, and then consider positioning all other capital in areas with guarantees.
I wish I had known that even 20 years ago because one of my inflection points was having a pretty significant crisis in my business, and I had all my eggs in one basket. I wasn’t diversified enough and I didn’t have that liquidity to get us through, so it caused us to scramble. What can you share with the audience about trying to create certainty, about uncertainty, and how does that tie into some of your cashflow strategies with Infinite Banking and others?
What folks should be thinking about, and you stated it well, is where you warehouse liquidity. Because if you’re listening to this, and you’re a business owner and an investor, you do need access to operating capital. So you have to have some sort of a diversification strategy in place with regards to warehouse and capital – it could be a couple of banks and different accounts, it could be some credit unions.
You need in some cases, three to six months at least of just operating capital in a bank. That’s one thing that I would highly encourage people to think about. Don’t have all of your eggs in one basket. There were a lot of folks in our network that had everything – all their money in the First Republic or one bank. They were nervous. Again, this brings in a lot of anxiety and fear, it distracts you and takes you away from your business, and your investments.
If you have some diversification strategy in place, from an operating standpoint, that’s already going to serve you well. Then with the Infinite Banking concept, this is using Mutual insurance carriers as a vehicle and more specifically, dividend-paying, whole life insurance policy with a mutual insurance carrier as a place to warehouse large amounts of cash. One theme that I spoke about, Ad nauseam, last year, was counterparty risk. I said, “One of the biggest lessons that investors are going to learn either by listening to me speak about it ad nauseam now, or by learning the hard way in the coming months and years—is what counterparty risk is.”
That is, the counterparty is on the opposite side of a transaction that has to make good on contracts. For example, when you put your money in a bank, the bank is a counterparty to your capital. If they don’t allow you to access your capital, if they default on let’s say, their contractual obligations, then you’re going to lose your capital.
Unlocking the secrets of the Infinite Banking concept is an ongoing process of continual learning and growth. It’s an integral part of your holistic wealth strategy.
Of course, there are a lot of different things in place with banks that people should know about. When you put your money in a bank, it’s no longer your money legally. Those are already on the books. That’s why folks said, “How can bail ends be legal?” That’s already legislated after the last crisis. It’s all over the world, not just in the United States. It’s also not there because of the fractional reserve banking model.
You should know about this in analyzing a counterparty. When you look at where to position capital, look at the counterparty risks and do your research on every single one of them. When I look at other places where you could warehouse cash; I’ve mentioned banks, but how about bonds? There are counterparties there. A bond is a debt instrument. The issuer of the bond is the counterparty by definition.
If you have municipal bonds, if you have even state-specific type bonds, if you have federal bonds, let’s say U.S. treasuries, which a lot of folks do; the counterparty is the government entity on the other side of it. There’s a default risk. The risk there too, of course, is the interest rate risk, which we don’t have a lot of control over. We don’t have a lot of control over what the Federal Reserve’s going to do and what the market’s going to determine that way.
Look at different risks. With Mutual Insurance Companies, when I look at counterparty risk, they’ve been around since the mid-1800s. They have been profitable and kept their promises every single year since the mid-1800s. If I look at it from a historical perspective and economic perspective, what storms have these carriers weathered?
If you’re in the United States and you’re a mutual insurance or Life Insurance carrier, you have experienced several wars – the American Civil War. Most people are unaware of this. There were two types of currency circulating in the United States: you had greenbacks and greybacks, and they still provided a profit during that time. Time of massive uncertainty, chaos, disruption, panic, and hysteria.
Then you go into the creation of the Federal Reserve in 1913. You look at World War I, and World War II. You look at recessions, market crashes, the Great Depression, all of these things that went through. When I analyze counterparty risk too, how are people going to behave in the future? That’s a tough one to predict, but there’s a high probability that people, institutions, and organizations will behave in the future as they have behaved in the past.
That’s why we look at, “Where do we wear our set?” Infinite Banking is what it is for folks that have never heard this term before or if this is your first time hearing of the strategy; use a very specifically designed life Insurance policy. This is how they design it in Family Offices. And it’s designed to increase the cash value, not just for the death benefit. Most people think that life insurance is death insurance; somebody has to die for someone else to benefit.
You’re using the vehicle of life insurance, and it’s specifically tailored and structured so it becomes a vehicle where you can warehouse capital and with guarantees; guarantee a tax-free growth in the policy. The dividends that you will earn in the policy are not guaranteed, but these companies have paid them since the mid-1800s. There are guarantees, tax-free growth, and tax-free access, the dividends are tax-free.
Then from a wealth preservation standpoint, this is why people might have heard of ‘The Rockefeller Family Banking Strategy’ where they’ve used these life insurance contracts because the death benefit is also tax-free and it goes tax-free to the beneficiary, whether it be a trust, a spouse, or whether it be children.
This has become a great vehicle to warehouse cash because it’s outside of the banking system. I mentioned to you in a previous conversation that I saw last year many capital flights from Family Offices with some of my colleagues that I’m friends with; they saw how a ton of capital went out to banks into these life insurance contracts at the end of last year. Full disclosure, I set up a policy for another policy for myself last year too, because I went through this same exercise of where would I sleep well to warehouse cash.
I just came back after going through – looking at banks, bonds, 401(k), and IRAs, which completely take control away from you over your capital. I couldn’t find a better place. So when the crisis started hitting, a lot of folks in our network smirked and smiled because the majority of their cash reserves were outside of the banking system in these life insurance contracts with mutual insurance companies.
Great point. Can you also comment on what you mentioned the other day, which I found interesting? You were in a group with some of the executive teams of one of the large Mutual insurance companies that was talking about record inflows into Life insurance in the past two years.
The executives in a lot of these mutual insurance carriers, have seen it too, where a lot of folks – the Smart Money have realized where we need to go to position capital where it can be protected from a storm, regardless of what that storm is, so that we can eventually access it to capitalize on opportunities.
These companies have had record profits since 2020. They continue to have record profits because it’s become a haven to warehouse capital effectively and efficiently. If you look even where banks themselves buy these same bank-owned life insurance, there’s only a certain amount of their tier-one capital that they can put in there. Corporations use a ‘Corporate Ownership of Life Insurance (COLI)’; Family Offices and so forth.
By taking necessary precautions and diversifying your liquidity into banks and strategies like Infinite Banking with a Mutual Insurance company, you ensure access to capital with guarantees and tax-free growth, positioning yourself to capitalize on opportunities.
The insiders and the Smart Money know where to warehouse it. If you look at what banks and corporations, if you look at what Family Offices are doing, wealthy individuals and so forth, where they’re warehousing capital, this has become a place for them and they’re seeing it. For folks, this is interesting too, from some of the meetings and insights that I’ve had with these carriers, they have billions of dollars of excess cash reserves.
Over the amount even when they need to pay out death benefits. They’re financially strong. They’re sound. Mutual insurance companies, too. This is also an interesting tidbit: their mindset. They think in terms of 50, 100 plus years. One of the things that I learned is interest rates doubled – It was almost six months or maybe a little bit more, but around there. These mutual insurance carriers don’t have to make sudden movements to adapt to that because they have a long runway and they manage their organizations, and their companies on behalf of the policyholders.
So they don’t have to make any sudden movements to make their stock appetizing for Wall Street and all of the Wall Street media to promote it. They can do what is in the best interest of their policyholders so they can wait another 12 to 18 months, see if this is a trend, and then make adjustments. That’s why they’ve been in business so long. Try to find a company that’s been listed on the Stock Exchanges. How many of them are over a hundred years old and have been profitable for a hundred years consecutively? It’s a little bit of a different mindset.
When I started this journey myself, about 10 years ago, I had first heard about this concept. And studying the ultra-wealthy and figuring out how they’re managing the liquidity of warehousing capital; I learned about this strategy, but I found that there was much confusion in the marketplace.
Recognize where you are in economic and financial cycles, and invest accordingly.
If you talk to your financial planner who might have a life insurance division if it’s a larger organization, or if you call in and talk to different people, why do you think there is much confusion in the marketplace in terms of carriers who can provide the vehicle to support this? Also, why is there a misunderstanding in the marketplace of the Infinite Banking concept versus a cash-value life insurance policy?
There’s a lot of confusion. When you look at the financial world, there are different incentives. So the asset under management incentive is what drives most financial services, which is not a product or a vehicle where the financial professional has that incentive of asset under management.
I found in my journey when I saw a huge disconnect between financial services, business owners, and investors, I saw that the best place for a business owner and an investor to keep their capital is where they can access it to grow their business and their investment portfolio. That is the best place to warehouse it, whereas, the incentives in the financial world are, “No, your best place is; give me your capital and I’ll invest it for you in a diversified portfolio, stocks, bonds, and mutual funds.” You’re investing in other people’s businesses and ventures, which is crazy if you look at it that way.
You should put it in a place outside of the banking system with guarantees, within a tax-free bucket where you can access it through policy loans or life insurance lines of credit to grow your business and your investments. The confusion in the marketplace and this is where you get a lot of different commentators with such strong opinions, which is funny. In most topics in life, people don’t have strong opinions. With pit bulls and life insurance, they have strong opinions. It’s the way that life insurance itself is misunderstood asset clause.
There are different levels of strategies. You have your basic retail strategy. That is all the majority of the public, unfortunately, buy life insurance. 99% of the public buys retail life insurance. They’re going to overpay for it, it’s not going to be effective and efficient. Some of it could have some products that could fit the need like a good solid term or a convertible term policy for a while. But that’s about it.
When positioning capital, assess counterparty risks and thoroughly research each one.
Most folks don’t talk about the advanced life insurance strategies that do exist. I’ll give you an example; we have commentators, everybody’s favorite financial commentator, Dave Ramsey who talks about ambassador’s life insurance all the time. A lot of the things that he says are great points when you look at how retail life insurance is sold. What Dave then fails to the question to ask himself or his audience is, “If this is bad, and I’m laying out all the points and bullet points of why this is bad; why do banks, corporations, Family Offices, and very wealthy individuals buy as much life insurance as life insurance carriers would sell them?”
Because there’s a different type of strategy, it’s an advanced strategy or it’s a warehousing strategy. Then we talk about a lot of different advanced life insurance strategies from a cash flow management perspective, from a legacy planning perspective. Then also where you get to leverage third-party capital to fund life insurance strategies creatively through premium financing.
That’s why there is much misinformation. It’s misunderstood because of the industry itself, there are many noises just on the retail sales side of it and there’s not a lot of information about advanced planning when it comes to life insurance.
I appreciate that clarification. It’s important to objectively look at these things. What would you say about capital allocation? If someone was looking at a policy, what’s the best perspective you could give them in terms of, “Do I set this up and pay it over time for the next five or twenty years, or maybe when I have a liquidity event.” What’s a comfortable number or process they should look at?
That’s a good question because everybody’s in a different situation. This is very customizable. We’re creating a custom strategy specifically tailored for every single individual. There’s no one-size-fits-all. There’s no cookie-cutter in the advanced planning space. So we will see what liquidity you have that you would want to move to safety.
Like I’ve shared right now, a good rule of thumb is if you have three to six months of operating capital for your business, you should probably then look at positioning all other capital in different areas and look at moving it into a place with guarantees.
There are steps you can take to protect yourself from the chaos happening in the banking system.
Some people that come into liquidity events, whether it be inheritances, whether it be businesses that they sell, whether it be investments that they sell, there are strategies that you can quickly fund a policy within five years; completely funded, paid up. There’s no more funding needed.
Then there are ‘ten pays’ where folks, let’s say, want to pay a certain amount of their capital into policies for 10 years or in 20 years. Then some people want to continue to buy into that with flexibility of when they can stop. We can do that too.
The other thing that people should know about – if you have a 401(k) or an IRA, for example, one of the biggest threats that we talk about in our network is taxes in the future. So if you have money and qualified plans, you’re over 59 and off, you can make money strategically with the help of a tax professional out of those plans, fund these policies, and create a bucket that produces a tax-free retirement for you – an income stream. You can do that too.
One thing that I didn’t touch on earlier when it comes to some of the things that people do. It produces a tax-free income stream for you, for retirement, or to supplement retirement in the later years. If you have assets that are allocated in buckets that are taxable and that are subject to market forces, you want to look at diversifying and at least putting capital in a different place where it’s protected from market forces and taxes.
Because, as I mentioned, this banking crisis that has started is going to continue. It’s a contagion that’s going to spread, it’s going to pick up steam. And eventually, this is going to lead to a bigger banking crisis, which could then go into the financial markets. There’s a high probability that if I look at the world right now, I can see that scenario playing out. You don’t have to be a victim of that.
You can see this coming a mile away. You could take necessary precautions, diversify your liquidity in banks, and diversify your liquidity into things like the Infinite Banking Strategy, in a Mutual Insurance company that has a Life insurance policy with guarantees and tax-free growth so that you have capital to access to capitalize on opportunities. Because with all the chaos that I think that’s coming, there’s going to be many opportunities for folks.
We could do an entirely another episode on this because I’d love to talk about some specific use cases. I’ve seen examples of how people are using this in their overall strategy, which is powerful. The other thing we talked to with folks is, this is a process. Infinite Banking is a process. If you’ve read Nelson Nash’s book (Becoming Your Own Banker: Unlock the Infinite Banking Concept), you understand that you have to work on that process. You have to work on that in your wealth strategy to get maximum advantage of it.
We’re constantly inundated with thinking that one product is going to be the solution for something. You might have the vehicle to do something, but you need to understand the process, and how it works to be able to maximize it. I think the next time you come in, it’d be great to walk through some specific use cases of how people are leveraging that. And then one quick question I wanted to ask in terms of age. You’re talking about 401(k) at 59 and a half. Is there a certain point where this becomes too cost-prohibitive based on your age?
That’s a great question. Just a comment on Nelson Nash’s book where he discusses the concept of becoming your own banker. He’s the discoverer of the Infinite Banking concept, and he talks about unlocking and ‘become-ing’. These are all process words and he was a stickler for words, that’s why it’s ‘become-ing’ your own banker. Not ‘become’. It’s not a one-off thing that you put a policy up and that’s it.
And unlocking the secrets of the Infinite Banking concept because you keep unlocking them, you keep learning, and you keep growing. This is part of your overall holistic wealth strategy. When it comes to age, we’ve even had policies for folks in their late ‘60s. Every situation is different, we’ve seen that. When folks are in their late ‘60s and ‘70s, there are children, there are grandchildren.
You can set up a family legacy and a family bank, which is something that I’m passionate about, talking about because you can change the trajectory of the financial future for your entire family by structuring and setting this up correctly. You can be the person who has changed the entire trajectory just by establishing the strategy and establishing a structure for future generations to implement and execute.
Excellent. If you could give one piece of advice to listeners about how they could accelerate their wealth trajectory, what would it be?
As an investor, it’s about realizing and recognizing cycles. Somebody asked me the other day, “Do you believe in cycles, M.C.?” I said, “Last night, the sun went under. This morning, the sun came back up. And we just had winter and we’re into spring, summer is coming pretty soon. The world operates on cycles and so does the financial world too.” The one thing that I would share with folks is to recognize where you are in economic and financial cycles, and then invest accordingly.
It’s a great time to establish strong legal structures, including asset protection, estate planning, and Infinite Banking policies. By warehousing capital now, you’ll be better positioned to weather future chaos and capitalize on emerging opportunities.
There are different strategies at different parts of the cycle. There are times in a cycle when it’s time to deploy as much capital as you possibly can. Then there are other parts of the cycle where you build up as much capital as you possibly can because pretty soon you’ll be able to use that. If you were in 2007 & 2008, in a capital allocation mode and set up in position capital where you can access it lighter, you would be in a fantastic position to keep capitalizing on opportunities that became available. If you think about it, the bottom was around 2011 or 2012, but you would have had three or four years of just capital allocation and accumulation that you can now deploy and buy at rock-bottom prices. Then keep buying up into the cycle.
I would also recommend for folks that it’s a great time to set up good proper legal structures, whether it’s asset protection, or estate planning, it’s a great time to set up Infinite Banking policies to warehouse capital so that when the chaos arrives—which we could see coming from a mile away—then you’re not going to be that affected by it and you’re going to be in a position of strength to capitalize on opportunities.
I appreciate those insights and everything that you’ve provided today. It’s been super valuable and relevant to the times that we’re in. Thanks again for your time, M.C. I always appreciate the wisdom, and always learning from you as well in getting together. I’m grateful for the opportunity. If people want to reach out and learn about what you’re doing at Producer’s Wealth or anywhere else, what’s the best place?
Cashflow Ninja is where the education things are about Cash flow investing. For people who are interested in Infinite Banking, go to yourownbankingsystem.com, there’s a video there for about 30 minutes where we explain the entire strategy—give you examples, case studies, and more. That’s how folks can learn more and get in touch.
Awesome. Thank you so much for coming on the show, M.C.
Thank you so much for having me.
Important Links
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Books Mentioned
People
Further Resources
Your 10-Step Actionable Checklist From This Episode
✅ Be aware of the current challenges in the banking sector, especially with smaller and regional banks. Consider diversifying your banking relationships and ensuring your deposits are within insured limits.
✅ Spread your investments across different asset classes and geographic regions to mitigate risks associated with economic or political instability in any one area.
✅ Consider the potential impact of a banking crisis on your finances. Diversify your investments and banking relationships, and stay informed about the stability of your financial institutions.
✅ Ensure you have 3 to 6 months (or more) of operating capital readily accessible in a bank account to cover unexpected expenses or income disruptions.
✅ Explore the concept of Infinite Banking by utilizing dividend-paying whole life insurance policies with mutual insurance carriers to warehouse capital outside of the traditional banking system.
✅ Review the historical performance of potential places to warehouse your capital. Mutual insurance companies with a track record since the 1800s may offer more stability.
✅ Study how ultra-wealthy individuals and Family Offices manage their liquidity and capital, particularly their use of life insurance policies as a haven.
✅ Tailor your life insurance strategy to your specific financial situation, considering options like funding a policy over 5, 10, or 20 years, or creating a policy that is fully paid up within a shorter timeframe.
✅ Consider reallocating assets from taxable, market-sensitive buckets into safer, tax-advantaged vehicles like the Infinite Banking Strategy within a Mutual Insurance company.
✅ Continuously educate yourself about cash flow investing and advanced financial strategies by visiting resources like Cashflow Ninja and Your Own Banking System to stay ahead of market changes and opportunities.
About M.C. Laubscher
M.C. Laubscher is a husband, father, business owner, and investor. He founded Producers Wealth to help business owners achieve financial freedom through advanced wealth strategies. He hosts the top-rated Cashflow Ninja podcast, with millions of downloads worldwide, and is a best-selling author. M.C. is also a Forbes Finance Council member and a sought-after speaker in the business and investing community.