StackedLife - Authorized Infinite Banking

028 Inside Trent Fortner's Playbook
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John Perrings: [00:00:00] Hello everyone, great to be with you today. We're gonna have a little bit of a different format as I normally record the solo and just try to share as much information as I can with you today though, we are doing something a little bit different 'cause I have a very special guest on with me today who has been my coach in this business for, since I got started from day one and has really been instrumental in my, development and understanding this business, getting a quick start and being able to, help clients to the level that I'm able to help them.

I really, have a lot to thank for with our guest today, Trent Fortner. And today we're going to talk about, we're gonna talk about people's financial lives. We'll talk a little bit about whole life insurance. We'll share some ideas with you about. Some ways to look at this, but the, theme of it is like thinking about things that [00:01:00] people don't think about in their financial lives.

And so that's what we're gonna talk about. And then also I wanna say that this episode is a great one to listen to if you're also an advisor. So I know, I think most of the people listening are, consumers and potential, clients or existing clients, but I know there are a lot of advisors out there who also listen to this. So definitely stay tuned on this one, guys, because we're gonna have some great information and invitation to give you as an advisor to, some of what Trent is working on in helping other advisors elevate their business.

Okay? So that's my intro, Trent, welcome to the StackedLife podcast. This is our second go around. So really happy to have you on here. Maybe you could just give a quick intro for everybody and we can dive into some stuff.

Trent Fortner: first John, thanks for having me. And you mentioned that I've been your coach. You make coaching easy when you go out and do the work that we learn and, apply it. And, it's been a lot of fun watching you grow your business and your family and, [00:02:00] I'm just honored to be here, so thank you.

John Perrings: I, appreciate you. let's talk a little bit about, maybe just start with some things that, aren't completely obvious to people when they're looking at their financial lives. And, I think you're one of the best people you know, in this business to talk to about stuff like that, because this is what you do every day, and this is really what you help me understand. What do you think the number one thing is that people don't think of when they're, looking at their financial lives, trying to get ahead, trying to succeed, all that stuff.

We All Live Until We Don't - Planning Beyond Retirement
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Trent Fortner: There's a few things. you and I had an idea or two a moment ago, but. Things always pop in my mind because of experience. So one of the things that, that I would start with both as a consumer and as an advisor, is this one statement is "we all live until we don't." And most of our planning that I see with advisors and how they approach clients is they [00:03:00] only plan to a certain point in time, like maybe to retirement or maybe for a specific purchase of a real estate or business or something.

And when they do that, they are ignoring the remainder of life. And you're in the world of life insurance and I have been for 37, 38 years as one of the tools that we use. And there are two paths to the end of life. You're either gonna protect for the, if you were to pass away during that time, which would be a term insurance conversation where people only protect up until maybe retirement.

And then there is, we live until we don't. And if you have a death benefit that is in place that's guaranteed, a guaranteed event is now matched with a guaranteed product. And if that guaranteed product, let's say is just make something up here. [00:04:00] Let's say you, your estate value when you're 80 years or when you're retired, when you're retiring is a million dollars and your death benefit is a million dollars, then the death benefit takes all the pressure off the million dollars you accumulated so that you can live freely with permission to use all of your money with different strategies instead of just the earnings of the interest or the returns that you would get off the portfolio.

'cause you're taking pressure away from it having to do so many jobs. You're guaranteeing the replacement when, your life is over. For whoever you leave behind to continue drawing a, income for life with no fear of running outta money. One of the biggest risks, here from the marketplace and advisors is that people fear running outta money during retirement.

The only ones that seem to do that are the ones who followed traditional, typical [00:05:00] planning and dropped any form of death benefit that would be there the day they retire.

John Perrings: I think that's massively important because if you, look at any typical financial planning advice, they're really just planning to age 65 and then maybe to age 85 or something, or age 90. And so there's always this like complete guess at how, long you're gonna need whatever you need.

And then of course, from that model, we can never even figure out not only how much we need, but how much we'll even be able to get.

there's just so many variables there. But

The Case for Life Insurance Protection
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John Perrings: what are your thoughts on also just having the protection in place to begin with? Even if you're not looking at the longevity piece?

I talk to people all the time who either have, no life insurance or maybe, the $50,000 you get from your company's group plan, or maybe they have, whatever, a million [00:06:00] dollar term insurance policy. usually it's not even close to that amount. And a lot of. Times, like I'll talk to people who are making good money here in the tech sector, and they'll just have this idea that if anything happens to me, I have enough money that my family will, be okay. And obviously the, depending on your situation, there's some truth to that. But my thought is always what's that money for? I'm sure it's not, you're, putting it somewhere today for the future. Why would you want to have a circumstantial event happen? And now everybody has to, the, your family ends up having to spend that money today just to maintain your, standard of living. I don't know. I covered the, covered it there, but do you have any additional thoughts that I'm missing on that piece?

Trent Fortner: I have questions. So that's what I, that's what I'll bring to the table with our [00:07:00] clients as well as the advisor. So if that person says, if I were to pass away, my family will be fine because I have money. My question is, why are you working now? Then

have you sent that letter to your employer, your broker, your all your investments, and say, Hey, don't send me anything else. I'm fine.

John Perrings: right.

Trent Fortner: Yeah. that, that makes no sense to me. The other thing is if they are earning and they're working and they're trying to have a better future so that they can have a really comfortable and ambitious life, most people who continue to work wanna have an ambitious life, always want to improve, raise the standard, enjoy more.

if that's to occur, then think about this for a minute. Go back to that term insurance example. If your coverage, I'll make up an age. Let's say you, you bought insurance at 35 and it was term insurance, and at 65 it, it expires. And let's say it would have to be more than a million dollars [00:08:00] for somebody to say, I'll have enough.

So let's say their, estate value is, is $5 million. And while they are working up till age 65, and as long as that policy's enforced, they have a term policy of 5 million. So now they have a estate value. If something, if they were to pass away. Between while they have the coverage, they'll have a $10 million state back.

But by design and by choice. And because quote unquote, my family will be fine at the end of year 30 of that term coverage. So on 30 years times three, you know they're age 65 and now they turn age 66. So they're on their last day before they turn age 66. And their estate value, if they're gone, is cut in half.

Where else in their financial positioning are they planning for that? Why would that make sense? Where is that ambitious?

John Perrings: Yeah, it's strange. It's like [00:09:00] whole idea of saving, investing, accumulating, growing for some reason when it comes to, the protection side, everyone eyes comes off the ball, their eye comes off the ball. And I don't know what it is about that. Do you think it's just the popular opinions out there about, from some of the, what we call financial entertainers who minimize the value of having the protection piece in place because no one really feels that way about health insurance.

We have debates in Congress about health insurance, and meanwhile when it comes to life insurance, I, would say the majority of people just write it off,

Disability vs. Life Insurance - A Revealing Comparison
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Trent Fortner: A lot of people do write it off. here's questions I would ask around that too. So you mentioned health insurance, what about disability insurance?

John Perrings: right?

Trent Fortner: while you're working, whether you think you're fine or not while you're working, [00:10:00] if you became totally disabled and could not work another day, how much of your current income would you want replaced?

And for how long?

John Perrings: All of it.

Trent Fortner: Yeah, as much as I can get for

John Perrings: Actually, double. I'd like double my income

Trent Fortner: Okay, good. It could be possible if you build all your other assets. Here's what I've learned though. I've asked that out over 50,000 times in 37 years,

John Perrings: Yeah.

Trent Fortner: and every time they answer the way you did, I want all of it for as long as I can get it. Now, that's if you're disabled, but if you die, you lose exactly the same amount of income for your family.

John Perrings: right.

Trent Fortner: So why would we want less for our family if we're not here than if we are here? So I think it's because people haven't really thought through that answer. They immediately think that they're gonna be sold something and they're worried about what they have to give up. To take care of someone else.

John Perrings: Yeah. it's like people talk about giving up something to take care of [00:11:00] somebody else. That's a great, way to think about it because. If you're putting your money into other investments, aren't you giving up something to put your money into those investments anyway to take care of somebody else and yourself,

What Your Financial Statement Says About Your Priorities
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Trent Fortner: let's talk about that for a second. That's important. That's a great statement. So you give up time to go do whatever it is you do to create an income. So you give up time from the people you care about to go do that. And there's lots of times that you're late coming back. I'm not talking about you specifically.

All of us. You're late coming back, you miss games, recitals, school functions, family dinners because you're giving up time to go produce. And then the money that you earn, you try to save some of it and invest some of it. So you give up control, you give up liquidity, you give up flexibility, you give up taxation, you give up fees, you get hit by inflation because you're having to wait.

And then you might give up some health because you're stressed. 'cause you have to go work more to make sure everything works. [00:12:00] And you have lifestyle money while you invest this other stuff. Maybe the markets aren't that kind to you and that causes some stress. And then health is a problem too. And then maybe we get down the road a little bit and we think, oh, I should be mu much further than where I'm at in my savings and investment.

And then what we do is we take the typical planner, says, man, you just gotta throw more money at this. You gotta get a higher rate of return. All that means you got to, you gotta work more, give up more and take more risks. To me that's not a winning plan. Why are you working to begin with? You said, you mentioned the people that you care about.

Do you want to spend time with the people you care about? Do you wanna be healthy enough later in life to be able to spend time with the people you care about? Do you wanna have freedom and flexibility to go where you want, when you want, how you want? and to do that, you gotta have the right, we'll call it pieces on the board.

I'll give you something else on that. So

If we were to look at people's complete financial position, those that think they're doing phenomenally well and those that are getting by, who would their financial statement [00:13:00] say they love the most? Would it be their family? Would it be the government? Would it be their occupation?

And that's, it's very revealing. When we look at their cash flow, it's very revealing on where they put their priorities and who they love the most. Everyone at the end of their life is gonna leave money to and throughout their life is gonna leave money and give money to the government for taxation.

But most people don't study enough ways to give them less than what is required. And what most people are doing is giving them more than is required. They're tipping the government, they're giving them more than they have to because they haven't studied the strategies that allow them to give that money to their family or to create more with.

I find that fascinating and everyone that I've worked with over the years who is open-minded enough to study that wants the strategies that allows them to keep more of what they earn so they can earn more of what they keep with certainty to enjoy a better life.

The 401(k) "Partnership"
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John Perrings: That made me think of [00:14:00] 401(k)s and qualified plans. And one of the common things that people talk about with qualified plans, 401(k)s, et cetera, they, so you put your money in there, tax deferred, and so then people will say, I'm getting to. Use the government's money, to do all this stuff, or I get to be in partnership with the government, to create whatever rate of return you think you're gonna get over the next whatever, 20, 30 years.

And it, I'm always surprised, like, why, do you care about what the government gets? Like why do you care about the government's partnership side of things? What about, your side? And, and also is that your, are you really using the government's money? who's actually using that while it's locked away from you for 20 or 30 [00:15:00] years?

Who's actually getting the benefit of that money? 'cause I'm telling you right now. Someone is earning off of that money. Like for us, during that runup until we turn 59 and a half, that's just a number on a piece of paper. I learned that phrase from you. That's a number on a piece of paper, but that's actual real money that someone is getting to use while you're just sitting there looking at it, hoping for the best.

Trent Fortner: Think about this for a minute. That statement you said of partner, I get to partner with the government. I get to use their money. First of all, you don't get to use any of their money while the money's in the plan. You don't even get to use your own money while the money's in the plan. You have to terminate employment to be able to access and enjoy the full value of what is your portion of that account to, if I said today, Hey John, I got a great idea.

Let's start a business together. And while we're working together, you get to pick what we do. Work as much as you want, hard as you want, man, I hope you do [00:16:00] fantastic. At the end of our agreement, I'm gonna tell you how much I want. You take all the risk, you earn the money, you saved the money in our company, and then I'll just let you know what I want at the end.

How? How good do you feel about that?

John Perrings: No deal. No

Trent Fortner: No deal. Here's another side of that. What about, okay, John, here's a better one. How about this? How about today? You go work and we'll still be partners. But let's say you earned a thousand dollars today and your check's gonna be a thousand dollars, but because we're partners, you have to pay my share of the partnership.

I only want 20% today. So you get to keep 80 cents or eight, $800 and I get $200 up in our partnership for what was earned. That's one option. The other option is you don't have to pay me anything today, but you don't get to use a thousand dollars today. You're gonna get the a thousand dollars later, you're gonna earn it this year and you're gonna put it away for the next 20, 30 [00:17:00] years.

But when it's time for you to get it, and you get your portion, I get my portion because we invested it and it's worth more now than it was when you earned it. You're gonna pay me more than you would have had you received it and earned more be just because of the earnings in the market.

So my $200 might be $500. Your portion will have grown too, but you'll end up paying me more than you would have before, which means you get to keep less. But the option there is, hey, don't take it then either take it over a longer period of time in smaller increments and stay locked up forever. And if I wanna change the rules along the way,

I can do that.

You can't, but I can

John Perrings: Your rules are the same. that's the defined contribution part. That's the only part that's defined, and everything else is subject to change, and it definitely will change [00:18:00] whether

Trent Fortner: your. Without you having to approve it.

John Perrings: Exactly whether it's the taxes that end up getting changed by the government or just the market returns.

Whatever happens in the market, you're subject to so much.

Trent Fortner: Yes.

Save Up Spend Down vs. Ever-Expanding Cash Flow
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John Perrings: I on my website, I talk about the save up spend down lifestyle where like you just spend all this time saving up only to get to a point where you have no idea what you'll get to. You have no idea how long you'll live. You have no idea how much you'll have available to spend.

You don't even know how much you'll need to spend when you get there. And so you're subject to just spending it down at whatever rules and opportunities are available to you at that time. So much is missed out on. With the save up, spend down lifestyle where what we try to focus on is the life of ever expanding income and cash flow.

[00:19:00] And if you think about when you get to retirement, you're always worried about, not running outta money, but if you create a, financial system where you're just cash flowing and bringing in income outside of your job, it doesn't even matter. You probably don't even need to spend down at that point because you've just got enough cash flow coming in, to support whatever you want to do.

And those assets could just be there to, do something big if you want to in retirement, whatever, it is you wanna do.

Trent Fortner: That's a great statement. So I've seen over and over again where people make those decisions of the spend down before they know they're rate of return, before they know what they'll owe in taxes and before. But they, know how much can come in. They make a decision in advance of something that, where all the variables are changing and, if they're unlucky enough to retire at the time where the markets are coming down and they will, it'll happen.

Then they have the fear of whether that money will last or not [00:20:00] because of what you said the other way on, on ev ever expanding. I, like to call it canna, like the Japanese term canna, which is constant, never ending improvement. I heard Tony say that as well. Cashflow planning early can create that canna concept constant.

Never ending improvement. Because if we start creating cashflow while we're working, when we're younger, while we have less risk, 'cause we know another checks coming in 'cause we're working and we create cashflow off of other assets, now we don't have to be constrained to budgeting. Minimum lifestyles required minimum distributions, fear of running out.

Now we live an optimum life now. We have permission to live today knowing we're not gonna run out later. 'cause we built in structures, we built in processes, we built in assets that will last and will give us guaranteed contracts that allow us to then spend down without risk those other assets that we accumulated.[00:21:00]

that's a very powerful place to be.

John Perrings: Yeah. It's do you wanna squeak by and live on as much as you have available, or do you wanna max everything out and live on as much as you want? it's a pretty easy dichotomy, but I, I don't know. It's, so we're in the life insurance business and, life insurance is weird.

young people don't think about it, that they just write it off. I did too, by the way. but then young people also write off what's gonna have to happen once they do all their accumulating and they get to the point where they need to spend it down. So there's a general problem of, just, I don't know if it's like our culture or whatever, maybe it's just youth, and that could totally be it.

But there's this kind of like ignorance of what will happen in the future and some of it's willful ignorance, but others it's just not on their, radar for a while. And a lot of times it stays [00:22:00] off their radar and until a point where they can't ignore it anymore. And then a lot of times by that point, it's too late to make any changes, especially with life insurance, where you have to qualify for it, where it could do all these things, later in your life.

Not only, protect your legacy, protect your family all the way through, give you an a built-in estate plan to cut, if you, end up making a lot of money like you want to, and you end up owing estate taxes, you've gotta a built-in estate plan even without any fancy strategies. You just have the death benefit that can, help cover estate taxes and that kind of stuff.

All these things. And then by the time that it actually becomes important for a lot of people, they can no longer qualify for it.

Trent Fortner: Yeah, I look at my hair. My hair is almost

John Perrings: white

Trent Fortner: now, right? So I'm a little older than

John Perrings: Mine's filling in.

Trent Fortner: I got light everywhere. I'm 61 now. My wife is. Soon to be 61. [00:23:00] And we're, we have a lot of friends who are 65 to 55 and, not by our prompting, but just in conversation. When people ask us what we do and what Brock does, my son, we get told over and over again, my term insurance is gone.

John Perrings: Yeah.

Trent Fortner: I really wish, these are the words. I really wish I had gotten some of that permanent stuff that, that whole life and now I feel like I'm gonna live longer. But the problem is I'm much older, this is what they're saying. I'm much older and I got some health issues. I got two or three people I'm around who have defibrillators and stents in their heart who on the outside appear to be good, but on the inside have things that are life threatening going on.

And you got years of history of how you eat and how you drink and all these kind of things. And people my age and older I've heard, [00:24:00] I thought this was just somebody saying something to me when I was younger to say, you need to take care of yourself. Now I see that this is real. We're at this stage in our life where we say, if I knew I was gonna live this long, I would've taken much better care of myself.

That's amazing.

John Perrings: Absolutely. And I, just speaking from the same personal experience, just me, having some older, relatives in my life. I definitely remember hearing, my term insurance just expired. It's the same its story. No one's ever happy that their term insurance is gone.

But meanwhile, it's the main thing that people will buy. And then when it's gone, it causes a lot of concern and, a lot of stress really. In one, example, the only other asset they really had was their house. And so if anything happened, that was a massive, financial asset that just disappeared overnight, that they wish it wished it didn't.

Trent Fortner: in today's [00:25:00] economy, what I'm seeing a lot of is, and it's been this way for the last 25 years, is that there were three major assets that people had when they got to retirement. One might have been social security, one would've been their house that you mentioned, and then maybe some type of retirement plan,

and then they usually take two income streams, the income off of their retirement plan and the income from Social Security, and that's how they planned forever.

Today, what I'm hearing. Because the purchasing of homes is much harder. The price is higher. The rates are higher at the moment, and there is this, conversation. Don't buy rent, so you're not tied down anywhere. You can make lots of money renting. You only make the money if you invest and save the money someplace else.

And I don't see that happening. There's a few, there's there is a few, a handful. It's always just a few. But if all of those people would consistently create real assets that create [00:26:00] cash flow, then their lifestyle could continue to grow and all of their expenses could also be covered without having to work all the time.

John Perrings: Yeah, that's right.

Trent Fortner: I think you'd be

John Perrings: is a good segue into what we were talking about earlier. 'cause a lot of times people don't want to buy the permanent life insurance type of product because, they like the idea, but they just don't want to pay for it because they, look at it as an expense.

And I think you, you mentioned, you, you had a, something you wanted to walk through that might help, explain the real expense of a whole life insurance policy compared to term insurance.

Term vs. Whole Life - Unbundling the True Cost
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Trent Fortner: Okay. So I just ran an illustration for term insurance with, and this is Penn Mutual. and there's lots of companies that underwrite life insurance. There's really two types of, in life insurance, there's different versions of it.

Type number one is called [00:27:00] term insurance. And what that means is you are underwritten by an insurance company who says whether they wanna take the risk of how long you'll live or not, what's your health and your wealth. And so if you're a healthy, in this example, 35yr old, they said this person was approved for a million dollars and I just called him Richie Rich.

That's his name, Richie Rich. It's a real case, but I changed the name. So a $1 million term policy that is, can be, converted to some type of permanent in a moment, has a premium of $1,201 a year. That's a hundred dollars a month, very "inexpensive." And this is a 30 year level policy.

That means that the death benefit and the premium remain the same for 30 straight years. Now look at year 66. For them to keep that same policy at age 66, 31st year, [00:28:00] that same policy, the premium's $35,890. And it gets more the next year, more the next year. The reason for that is because they're much closer to the end of life.

If they can get it, they still have to be re underwritten. That's not automatic. So John, if you'll write this down so we can come to this conversation in just a second. If I paid $1,200 a year for 30 years, how much money did I spend out of my pocket over the 30 year timeframe?

John Perrings: $36,000.

Trent Fortner: $36,000. So we made it to, we, lived, we made it to age 65. If I continue to live and I've canceled the policy 'cause it expired, I'm not gonna pay that bigger premium at that time. Did the cost for the term insurance go away?

John Perrings: Yes.

Trent Fortner: The ongoing premium went away. I canceled that, but the [00:29:00] cost has not, and the reason it has not is because I'm still here. I lost wealth for those $36,000, which means had I been able to keep. That $36,000, I probably would've saved it at some better rate. And that's called opportunity cost. We'll, look at that, what that might be in a moment.

But what do I have at age 66?

John Perrings: A huge premium relative to what you paid for the last 30 years,

Trent Fortner: Yeah, if I'm keeping it and if I qualify. But what most people do is they don't renew it. They, don't even try because it's way too expensive. So I had a million dollar protection for 30 years. And what's my, if I don't renew it, can't renew it. What's the amount of protection I have in the 31st year?

John Perrings: Zero.

Trent Fortner: By design and by choice. So I'm gonna spend money for, to protect my family, which is great if I die during those 30 years. But most people aren't [00:30:00] planning to die during that time. In fact, only 2% of all term policies in the world pay claims, not because they deny claims, but because most people outlive it or they convert it to something else, or it gets so expensive that they decide to cancel it.

But I do want you to keep up with that number $36,000. And I'll come back to that in a moment. Now let's go to another policy. This is the second type, and I'm putting it under the term of permanent. And then, and this one is whole life insurance. And I'll then I'll give you a variation and then I'm gonna tell you, this is the only guaranteed permanent policy that I've seen work.

So here are the three types of permanent policies that the industry claims are permanent whole life, which is the oldest life insurance form in the industry. It's been around before the stock market was here. [00:31:00] The other one is called Universal Life. There's two forms of Universal Life. There's what's called guaranteed Universal Life, and there's what's called index Universal Life.

They're called permanent insurance because they build cash value and if you fund them and if you get the right returns and if everything works out, then they will be there hopefully as long as you are. And that's, there's always a hope for in there because there are moving parts and then there's whole life.

Or the other one is variable life. Variable life. By the way, the cash values in the stock market, usually through mutual funds. So you put the death benefit and the cash value at risk every day and you could lose value, and you may not have a policy at the end of your life. The whole life policy has guarantees.

And now we're gonna look at that, and then I'm gonna ask you to do some calculation for me here in just a second. What I'm about to do is [00:32:00] called unbundling the product, because most people never, not agents and not clients, hardly ever get to have this part of the conversation.

Whole Life's Three Guarantees Explained
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Trent Fortner: All right, so the, whole life policy has three guarantees. Guarantee number one is a fixed contractual premium. The contract between you and the insurance company, a unilateral contract. This says your only obligation, once you give them all the true information of who you are and how healthy you are, and your income is that you'll pay the premium.

That's your obligation. The company's obligation is for these other pieces. Number one, they cannot change the premium on you. Once you say yes to this, it will not go up. In fact, this one actually goes down and you can do things. You, the consumer can do things to actually eliminate the premium and keep the policy.

The next thing is there's something called a guaranteed cash value. And cash value is similar to a savings account at a bank. It's not exactly the same, but it's money [00:33:00] that's held at, in the general fund of the insurance company. And in the first few years, there's very little or no life, no cash value because the, that dollar goes towards the cost of the ultimate death benefit.

We're gonna see what that means in just a moment. But when cash value starts accumulating and starts growing, you'll see that there is a guarantee that it will always go up in value. It never goes down in value. It's not in the stock market. And that's the guaranteed part. That means if this company never makes a profit, if they never.

Return dividends to the policy holders. You can count on these numbers. It's also a guarantee that the death benefit will not be lower than what you see right here. That the initial death benefit is what they would pay out. And if there are any loans against the policy, it would just, that aren't repaid.

They'd just reduce the face amount by the loan them out to the beneficiary.

John Perrings: One quick thing about the guaranteed [00:34:00] cash value? You said it's guaranteed never to go down, but I just want to, and I know this is what you meant, it's actually guaranteed only to go up. So it'll never be a zero, like what you hear with some of the other, quote unquote permanent type products like UL based products.

So just throwing that out there. The other thing I'll say is just because this is an Infinite Banking focused podcast, there might be some people looking at those two goose eggs in the first year and having some like heart palpitations. Don't worry, this is just an example illustration that Trent's gonna show some stuff and it's a straight whole life insurance policy.

That's why you see those two zeros in the guaranteed cash value, and one zero in the non-guaranteed. but this is just an example so that Trent can explain the unbundling principle, as we go through. So it only gets better than this really.

Trent Fortner: yeah. It gets a, it can get a lot better than this. I was trained also, I was trained by [00:35:00] Nelson Nash with Infinite Banking. I spent a lot of time with him. In fact, Carlos Lara, I'm the one that introduced him to Nelson. He, Carlos was in my office at the time, so I'm very fond of that system.

But what we learned is if you don't know how the base policy works, then you won't really understand how everything else works.

John Perrings: Right.

Trent Fortner: and when we first started running these illustrations. Yeah, we weren't with Nelson, we weren't doing a lot of overfunding back then. The policies were different and we focused on how strong the base policy is in the return.

So you would wanna put more premium in, so you got greater returns and dividends and when back then you might have three years. There was two things. One, when I first started, I would have maybe 50 to 70% first year cash value in those policies. So we didn't have to overfund them. They were pretty doggone strong on their own.

And then you could have what would call limited pay policies where you could have a paid for 20 years or pay for 65 years or something like that, that was guaranteed [00:36:00] not by Overfunding, but by contract. So they compressed the premium and created earlier cash values. Some companies still offer some form of that.

As we get back to this, the reason I said it's guaranteed to never go down is because those two other forms of permanent insurance. I don't have that guarantee. They say you won't lose principle, but that's not true. And the reason that is not true is in an index, Universal Life, if you have two down years in the market and the floor is zero, meaning you get a zero rate of return on the cash value, you still have all the administrative charges, mortality charges, and insurance charges in the policy.

And if there was no return, then guess where that money comes from? Cash value, which means it goes down, in value. This one doesn't have those charges. It's all priced in. There's not an indexing. It's, all going up, guaranteed to go up, as you said. I like, that terminology as well.

[00:37:00] The only thing that's not guaranteed here is the dividend. Now, why is it not guaranteed? the reason it's not guaranteed is a dividend by definition is a return of premium. That's why it remains tax free.

And it remains tax free depending on how you use the dividends, how long you use the dividends, and in what form in the policy you elect to use it. But the dividend hasn't been declared yet because the company hadn't had a profit yet in that year. These are years ahead, so the operating year hasn't occurred, so they can't guarantee something into the future in the form of a return from profits.

That has not yet happened. But this is important to know once that dividend is paid like for in year two and a dividend of $420 is paid here to Richie Rich because of what you said a moment ago, they cannot lose this dividend. It is now posted and guaranteed to be there.

John Perrings: It becomes part of the guaranteed ledger.

Trent Fortner: That's right. It becomes part of the guaranteed ledger. Now you can take [00:38:00] the dividend in cash and it is tax free until all the dividends that you receive are greater than. The amount of deposits you've made in the policy. So as long as it doesn't exceed your cost basis, then the dividends are income tax free.

That alone is powerful because if you use that and took that as cash, you could use that to pay for other insurance products like auto, homeowners liability, disability, medical insurance. You could use it to pay down debt if you wanna do that from other institutions, you, and which would then allow you to save more money for having no debt payment.

It could allow you to put some risk on that money if you want to use it to go make investments in the market. But you get to choose. Nobody's gonna say, oh, wait a minute, tell us what you're going to use this for before we give it to you. It's yours. The death benefit would remain more level if you did that, but it wouldn't take away from the policy.

Here's what I wanna do next though, John. I want just go over the cost because that's what we were talking about earlier. So I'm gonna use these gray columns and I'm gonna go, I want you to [00:39:00] look at two things. There's two columns we're gonna look at. We're gonna look at 14,162. That's the annual premium.

And this, by the way, included something called Disability waiver Premium that says if you got disabled prior to age 60, then the insurance company will pay this premium for you, just as if you had. Can you imagine your bank doing that on your deposits? What a line the, bank would have a rush on. They wouldn't even have to advertise anything it, it wouldn't matter if they paid 1%, 2%, 10%.

There would be a line of people showing up say, this bank loves me so much, they're gonna make my deposits if I get disabled, can't work to produce it. That's a powerful, piece. But here's where I'm going with this, John. If you look at year one, and I put in 14,162 on the base policy, by the way, every policy has a base component, including the PUA.

[00:40:00] Overfunded policies you guys talk about, there is a base portion that is required. So they all work the same way. The company that says they're the number one performing and the one that says they're number 30 has about a quarter point difference in the performance of their cash value or death benefit.

And at some point, they're gonna get real close to even over the 20, 30 years I hold it. But if in year one I pay $14,162, how much cash value do I have at the end of year one?

Let's go over here that says increase in total cash value.

So now I'm gonna ask you, so if I, if you paid $14,162, how much cash value do you have in year one?

John Perrings: zero.

Trent Fortner: Zero. So that means 100% of that year's premium went to the acquisition of the death benefit and the policy of at least a million dollars, whatever it costs to start the policy, to pay whoever has to get paid to underwrite it.

The expenses. 100% of that first year's premium went to pay for the ultimate death benefit.

Year-by-Year Cost Breakdown
---

Trent Fortner: Year two, I [00:41:00] pay the same premium, $14,162. And in that year for speed here, I'm, gonna give you the answer. $420 shows up in cash from the dividend. Now that, let's just say that's zero, it's very low.

Year three things change a little bit.

I have half of the cash in year three, when I put in my third year's deposit, $14,162, I get some guaranteed return, I get a dividend, and $7,341 is my increase. So that's roughly 50% of the premium I paid. That means 50% or 45%, whatever that number is, went towards the cash value that I have access to, and the remaining 55% went to the death benefit.

Year four.

Here's where I need a little calculation. So in year four, the cash value goes up by $13,600. So John, if you will, I want you to take that number, [00:42:00] $13,600 and divide it by that year's premium of $14,162, and tell me what the percentage rate is. I'm gonna guess it's around 93, 94%

John Perrings: 96%.

Trent Fortner: I was wrong. So it's better than what I said. So 90%, 96% of that year's premium went to the cash value and 4% went to the remaining cost of the policy. What's unique about year five?

John Perrings: In year five, the cash value growth is greater than the premium you paid.

Trent Fortner: That's right. And every year thereafter,

and in year, what is this year? Year In year 15, the actual

increase is twice that year's deposit.

The Term Cost Equivalent Revealed
---

Trent Fortner: So what we want to do now is we wanna determine, what is that term cost equivalent? And here's what I mean by that. If from your five on [00:43:00] every dollar that you put in grows, the cash value grows by more than your deposit, then is there an ongoing cost for the insurance or has it already been paid?

John Perrings: It's already been paid,

Trent Fortner: That's right. And if everybody could start at your five, they would,

John Perrings: right?

Trent Fortner: but there it is not free. So there is a cost. So let's see what the cost is.

So if you'll take $14,162 and multiply that by four years, that's the first four years premiums. Tell me what that number is.

John Perrings: $56,648.

Trent Fortner: that's right. Now let's find out how much cash do we have in year four.

Cash value, it's $21,361. So what I'm gonna do is I'm going to subtract the cash value that's in the policy from the premiums that I have already paid, and that's my cost.

So tell me what that number is.

John Perrings: Okay. So the difference between what you paid, which is [00:44:00] $56,648 minus the year four cash value $21,361, that is $35,287. So that's how much that was your cost by year four, correct?

Trent Fortner: For the, death benefit. That's correct. And I have no more costs going forward. Correct. 'cause now it's a saving savings account with death benefit,

John Perrings: So $35,287 is the premium you've paid over four years. That did not create cash value. So we're just calling that a cost.

Trent Fortner: Correct? Correct. And I'm going to compare this two ways. So number one, I want to compare this to the 30 years of term insurance.

So in term insurance, I had to pay 1200 a year and it cost me 36,000 of outlay and I get nothing back. In fact, I'm guaranteed [00:45:00] to have a zero if I outlive it. Here. I have a cost feature that I absorbed all the cost in the first four years, however, because it's whole life insurance. I've got a smaller screen there because it's whole life insurance.

It's gonna be there when my life is over, if I continue to fund the policy, which I would do that and at some point I could have the policy pay for itself if I wanted to. But this person was a preferred non-tobacco. So that means that the insurance company says they are a preferred risk. They expect them to live beyond normal life expectancy of 83, let's just say age 90, and we could go to any number.

But if I go to age 90, what I would have to do is now I'd have to divide that cost of 35,287 by the 55 years that the contract was inforce.

And that's gonna gimme what's called my term cost equivalent.

John Perrings: Which is 640 bucks by the way.

Trent Fortner: [00:46:00] 640 bucks. That's half of what the term call term premium to get a guaranteed zero was. And here what I'm gonna get if I follow through on this at age 90 is I have a policy in force that's $4,261,000 of value on the death benefit and AC accumulated through the cash value. And it could have used it along the way, could have turned it into a lot more.

I'd have $3.7 million of cash.

John Perrings: Since we have four times the death benefit, couldn't we divide the premium by four and get an even higher equivalent cost, which is 160 bucks. So about a 10th of the cost of the term insurance policy.

Trent Fortner: That's right. Now I should probably, I use cost because that's what the industry consumers think of as, but technically there's no cost there because you get all your premiums back. You get earnings on all those premiums, you get used to the money along the way, but to me, a cost is something where you have an outlay and you never get anything back.

[00:47:00] It doesn't create a return for you. The only way to get a return on term insurance is to die during the term. I don't know anybody who wants to do that,

John Perrings: right.

Trent Fortner: right? Everybody wants to live along your life.

John Perrings: Now I'm gonna say something because the people that are watching along might be looking at this screen right now, and we just went to age 90. And they might be saying, yeah, but you're still paying $14,162 for 50 years, 55 years. What about that money? and so the way that, that I would encourage people to look at that is the reason we're not counting that money is because every single dollar of those premiums after a year four, is creating more than one new dollar of cash value, which you can get to and use to buy other assets, pay for large expenses, whatever it might be, and

Trent Fortner: Without liquid,

John Perrings: without liquidating it.

Yep. And so you can always get that money back. [00:48:00] So there's no. If you can pay $14,162 and it creates more than $14,162 in cash value, which is liquid guaranteed, then technically or functionally speaking, there's no more cost to that. So we're not including those premiums because it's right there for you if you want to get to it.

Trent Fortner: Yeah, you just said it's just like putting money in a savings account at that point. 'cause you don't say it costs you $14,000 when you put the money in a savings account. It's yours, you use it.

John Perrings: if you take $14,000 from your left pocket and then put it into your right pocket to that cost you anything. Yeah,

exactly.

Trent Fortner: right. And the other, the, let's, raise two other thoughts on that though. So at the point where the dividend by itself is equal to the premium, which here is around year 20,

just the dividend. You could stop paying outlaid for premiums there. If you wanted to, you could [00:49:00] let the policy pay for itself still have cash value.

It still grow, but you don't have to put any more out of your earnings to do it. Another thing that we see a lot of people to do is sometimes they'll skip premiums if they need to, not 'cause they want to. Maybe they had some kind of cash flow issue where they didn't have the cash flow to fund it. That's only if they took other risk outside of this that caused them not to have cash flow. So what we're looking for are ways to get, put them in a better position throughout their lifetime and the, dividends and the growth in the policy is all tax free. So if I had been putting the premiums into, say, a savings account or money market account, and I'm getting taxed on the interest of that account, the high yield savings account right now is like 4%, but it's taxable.

So that's gonna bring it down to about three, maybe two and a half, three, but no other benefits. So I'm getting a guaranteed minimum of [00:50:00] three after the cost of insurance with no taxes, and I get disability waiver premium, and I get long-term care protection, a feature on the accelerated death benefit and critical illness and terminal illness.

So I don't have to go spend my other money. So if I was putting money away in a savings account that was taxable before and now I move that money and I put it someplace where I'm not having to pay tax, that means where I was paying tax from my checking account. I can take that money that was at a guaranteed 100% loss and put it anywhere and have less risk than giving it to the government.

Tax-Free Growth & Built-In Benefits
---

Trent Fortner: So everything we do through this process and building these types of contracts is to create freedom, control, flexibility, and protection for our consumers, for our clients, for our members, so that they will always be in a better position.

John Perrings: That's really what we're supposed to be in the business of doing. And that's what I've, I'm really appreciative that I, I learned early on from you [00:51:00] Trent. by the way, I just about a month ago gave a talk to, I don't know, 200 other Infinite Banking authorized agents at the annual think tank.

And one of the things that I talked about was, how important the base premium is. A lot of people get super, overly focused on, maxing out the PUA rider. And what they don't understand is that base premium starts to create every bit as much cash value as the PUA rider after, maybe year four or five, whatever the year is, depends on the policy.

And I learned that from you. like a lot of people when you first get into the, Infinite Banking, if you do, if you're an agent that gets into it, everyone's. Of course, like very focused on that because that's just what, that's how they think cash value is created, and that's how take over the banking function.

But what I'm grateful for in working with [00:52:00] you from day one is you very quickly helped me understand the value of just the base premium. just having that in place. And then, from that, because I'm a, I'm an Excel nerd, I got in there and, really started looking at everything and I'm like, wow, this, it's, even better than, what Trent stated.

Now that's not to say we don't use PUA or anything, but it's just to say that really it, the PUA is really only super important for building cash value in the early years of the policy. It builds cash value every year, but it's really only super important in the early years after that. The base premium, likely does a better job at building cash value after year four or five than the PUA does.

So what we see a lot of times is people overdo the PUA rider, they have to get rid of it, or else they'll MEC the policy, which means it'll become taxable. And then they just have this tiny little base [00:53:00] premium leftover when they could have had a giant base premium and it would all be building, it would all be building cash value.

So I'm saying all this as a preamble to lead up to, I'm, hoping Trent can talk a little bit about, what he's doing in working with agents. So this is the part if you're an agent, listen up, because Trent has a workshop coming up that I think you'll be interested in and maybe Trent can talk a little bit about, what he's doing with it, with, all of us as agents and what this workshop will be, how to get involved with it and all that.

Advisor Workshop Invitation
---

Trent Fortner: I appreciate you giving me the opportunity to, talk about that for a moment. I've been doing what I call mastermind groups and workshops, for the last 19 years. And what, we do in these workshops is we bring together about 50 advisors. there's a, tuition, the tuition, $750 that's worth all the food we give you, all the information's free. [00:54:00] What we do at this meeting is we have advisors share, we'll do role play on what you may see in a real live case in your client, and I'll walk you through questions to be more effective.

sometimes I've done this about six times over 19 years, we'll have an actual client come in and share their experience on what they learned through this process. We'll, I'll teach a lot of questions. We'll use a modeling process that I use, that I've been teaching for a while called the LEAP System.

We'll talk about Infinite Banking. We'll show policy illustrations like we just did, but we're gonna help every advisor be more effective while they are there. That they can immediately use from the room if they want to obtain new conversations and appointments with their prospects, and then be able to deliver with truth and evidence how they can improve their client's lives with certainty.

The partial real important with [00:55:00] certainty and we'll load you up with the tools and the resources to be able to do that. And we will make sure you meet the other advisors who are there and there'll be, several who are million dollar income earners who will be there, been doing this a while.

John Perrings: I will just, I'll jump in real quick. What's the record for the number of appointments set in the room, going through the process of this, of your workshop?

Trent Fortner: Yeah, that's a great question. We've got a 40% response rate of getting appointments. So you take, let's say we have 50 advisors and they all sent to five people.

That's 250 people. Multiply that by 40%. That's gonna be real close to the number of appointments that were set in those two days. We have people raising their hands saying, I got an appointment. I got an appointment. I got an appointment. Just because of some of the language and the approach that we create there

John Perrings: So I, I would say that, this workshop is great, whatever level you're at. when I've been to your workshops, I've met people in the business 30 [00:56:00] years. And then, for me personally, and I've met other folks and became friends with some of them because we were just getting started in the business.

And I would say right now, I, think a lot of the times the, if you're an advisor listening to this, you're probably a newer advisor trying to, learn, some of the things that are being put out there from my podcast and other podcasts. If you're a new advisor, if you're newer, you have to go to this workshop.

it will level everything you're up because it's a, it's not just a whole life workshop. It's a business workshop. And, one of the things that, I'll just mention a couple things. I learned how to run my calendar at this workshop. I learned how to, structure my week and what kind of appointments and when. What, should you, start saying to clients?

Like, how do you even introduce yourself? all of these things that, you know, Trent's kind of given like the more advanced, but I'm just saying if you're a new advisor, [00:57:00] come to this thing, you're gonna, it will level your. It will level you up in a way that you just won't be able to get on your own, and you probably won't be able to get just doing your typical, like agency training or, whatever IMO training.

So that's what I wanna say to the, especially to the new advisors out there who might be listening to this.

Trent Fortner: Thank you, John. You have been to several of those. I like to say that approach is whether you've been in the business for 30 minutes or 30 years, you're gonna learn something that would advance your practice right now.

John Perrings: Yeah,

Trent Fortner: that's what we really try to do with that.

The event is April 29th and 30th.

It's in Nashville. I, just put in the chat, the registration page. They can link the, they can get their room at the hotel and register with $750 tuition, through PayPal.

John Perrings: Yeah.

Trent Fortner: and I would love to have them.

John Perrings: Yeah. Excellent. like I said, I'll post links to those, in the description. I, [00:58:00] highly recommend it. I really, I'm, not, exaggerating when I say Trent really helped me get started in this business. From, pretty much every year, except for the very first year I got into the business, I qualified for all the trips because I just, I also had a sales background, so I was able to talk to people.

So I had that going for me. But getting into this business is not easy. I think it's 90% don't make it five years, something like that. but I'll, share a line that I learned from. the first agency director that I worked for, Steve Levy, he said, this is the hardest business in the world to make $30,000, but the easiest to earn $300K.

and, that's just a way of saying once you can get through and learn this business and learn how to talk to people about it, because that's the most important thing. it's a great, career. I'm, the happiest I've ever been career wise doing this. And I love what I do and Trent's the master at learning how to explain [00:59:00] and talk to people and, language you can use that connects with people in a genuine, authentic way, without being, salesy and hypey and all that stuff.

Trent Fortner: Thank you, John. That's And again, it's been my joy to see you excel in this business. I'm proud of you.

John Perrings: Oh yeah. About, hey. Did it together, Trent.

Trent Fortner: We'll keep doing that. We'll keep doing that.

Closing & How to Connect
---

John Perrings: all right everyone. thanks for listening. And Trent, thank you for joining. if any of these ideas are resonating with you or you'd just like a personal introduction to Trent, or you wanna talk to me about, how this stuff is working, just head over to StackedLife.com. you can book a free 30 minute consultation with me right there, and we'll talk about what's going on with you.

If you're an advisor though, just check out the link in the description of, where you're getting this and that's where you want to go, to just, schedule some time with Trent, and, register for his workshop.[01:00:00]

Trent Fortner: Thank you. This was fun.

John Perrings: Yes, thanks everybody.