Mark Willis is a CERTIFIED FINANCIAL PLANNER™, a three-time #1 Best Selling Author and the owner of Lake Growth Financial Services, a financial firm in Chicago, Illinois. As co-host of the Not Your Average Financial Podcast™, he shares some of his strategies for investing in real estate, paying for college without going broke, and creating an income in retirement you will not outlive.  Mark works with people who want to grow their wealth in ways that are safe and predictable, to become their own source of financing, and create tax-free income in retirement.  Book “How to be an Amazon Legend and Fire Your Banker.”

> Here’s a glimpse of what you would learn…. 

In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley interviews Mark Willis, a certified financial planner and owner of Lake Growth Financial Services. They discuss financial strategies for e-commerce entrepreneurs aiming to scale their businesses. Key topics include overcoming reliance on traditional banks, using dividend-paying whole life insurance as a financing tool, and implementing effective tax strategies. Mark shares insights from his book, "How to Be an Amazon Legend and Fire Your Banker," emphasizing the importance of financial control and independence. The episode provides actionable advice to help business owners manage capital and achieve greater financial security.

Here are the 3 action items that Josh identified from this episode:

Action Item #1: Invest in the Right Places: Business owners should ensure they are putting their money into vehicles that will grow and provide liquidity when needed.

Action Item #2: Implement Tax-Saving Strategies: It's crucial to work with a certified financial planner to identify and implement effective tax strategies.

Action Item #3: Execute Financial Strategies: Taking action is essential; business owners should not just learn about strategies but also implement them to see real results.

Special Mention(s):

Related Episode(s):

Sponsor for this episode...

This episode is brought to you by eComm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures. 

I started my business in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

If you’ve hit a plateau and want to know the next steps to take your business to the next level, then email me at josh@ecommbreakthrough.com and in your subject line say “strategy audit” for the chance to win a $10,000 comprehensive business strategy audit at no cost!

Josh Hadley 00:00:00  Welcome to the Ecomm Breakthrough podcast. I'm your host, Josh Hadley, where I interview the top business leaders in e-commerce. Past guests include Kevin King, Michael Gerber, author of The E-myth, and Matt Clark from ASM. Today, I'm speaking with Mark Willis of Lake Growth Financial Services, and we're going to be talking a lot about how you can bank on yourself and become your own source of financing in your business. This episode is brought to you by Ecomm Breakthrough, where I specialize in investing in and scaling seven figure companies to eight figures and beyond. If you're an ambitious e-commerce entrepreneur looking for a partner who can help take your business to the next level, my team and I bring hands on experience, strategic insights, and the resources needed to fuel your growth. So if you or someone you know is ready to scale or looking for an investment partner, reach out to me directly at Josh at Ecomm Breakthrough. Com that's ecom with two M's and let's turn your dreams into reality. But today I am super excited to introduce you all to Mark Willis.

Josh Hadley 00:00:46  Mark is a Certified Financial Planner, a three time number one best selling author and the owner of Lake Growth Financial Services, a financial firm in Chicago, Illinois. As co-host of the Not Your Average Financial podcast. He shares some of his strategies for investing in real estate. Paying for college without going broke and creating an income in retirement that you will not outlive. Mark works with people who want to grow their wealth in ways that are safe and predictable, to become their own source of financing and create tax free income in retirement. He specializes in working with e-commerce entrepreneurs, and he actually wrote the book, How to Be an Amazon Legend and Fire Your Banker. So with that introduction, welcome to the show, Mark. Hey Josh, thanks for having me on. Mark, I'm genuinely excited to speak with you because I nerd out on everything like tax planning, retirement, how to, you know, bring in more income, save more money on taxes, how to take some chips off the table. And, I love, you know, before we hit the record button, you said, like, I've been working with a bunch of other e-commerce businesses.

Mark Willis 00:01:43  I actually wrote a book dedicated to e-commerce entrepreneurs. So I'm super interested to hear from your perspective, Mark, how did you begin working with e-commerce entrepreneurs? Sounds like you have a long history there. How did it come to writing that book about how to become an Amazon legend and fire your banker? Yeah. It's a strange, twisted tale. As many of us, I'm sure listening to this could relate. We didn't wake up as little five year olds growing up to wanting to be the person that you are now, in terms of your profession or how you make your income. It's sort of as a long, fun and exciting adventure along the way. So we've had the great privilege at our firm of working with business owners, real estate investors, even some Super Bowl champions in their finances, and we work as an advisory role with them. I'm a certified financial planner, but most of the folks that I work with just want to have more certainty, more control, more, you know, agreements with their money that they know that it's going to do what they want it to do.

Mark Willis 00:02:30  You know, most people I work with feel like when they meet me for the first time that they're just a tennis ball floating down the gutter of life, and it's just being sort of dragged along and that they really don't have much agency or control. And their interest is in, you know, really swimming upstream and going against the conventional current. So Mark, tell me a little bit more about yourself. How did you start working with e-commerce entrepreneurs and writing that book? Yeah, the journey is one of most of us. You know, it's a twisted adventure that, you know, didn't start with the end in mind. I guess it's sort of been surprising for me as well. I didn't even get my original education in finance, but now we've had the great privilege since 2011 of starting our business of working with business owners, real estate investors, even some Super Bowl champions. But most people I work with just want more freedom, agency, certainty in their life. When they first meet me, they say, hey, you know, it feels sort of like I'm just a tennis ball sort of floating down the gutter of life.

Mark Willis 00:03:16  And there's not a lot of certainty of outcome. You know, a lot of us, especially business owners in the e-commerce space, there's a lot of risk. There's a lot of uncertainty. What's Amazon going to pull out from under us next? What's the new rules and regulations coming down the pipeline? Inventory costs, borrowing costs. There's a lot of uncertainty. And so I've had the great privilege of working with these business owners, especially in the e-commerce space, over the last many years, to help them take back control of their finances and do it in a way that's safe, predictable, without taking a bunch of unnecessary risk. So that's a bit about me and my background. I started really. I grew up in Indiana, went down to Texas for college, where you're at. And so thank you for the Lone Star State, save some room down there for us. Like I said, we may be needing to get down there again soon. We now live in Chicagoland area. So there's a lot of back and forth, especially in the winter time of getting down to warmer places.

Mark Willis 00:03:59  But we've had a great, exciting adventure, and we now work with clients in all 50 states, helping them not just take back control of their finances, but become their own source of financing. I love that, and I think that's that's definitely why I kind of like, want to jump off the deep end here and do a real deep dive here. Marcus, you wrote the book How to Fire Your Banker, right? And become an Amazon Legend and fire Your banker. Tell me more. What does that actually mean? Because I know for our audience, you know, financing is one of the biggest constraints, and especially for somebody who wants to scale from 7 to 8 figures, that's great that we want to grow, but you need capital in order to continue that growth. Josh, you're exactly right. Some of the biggest problems I see with, unfortunately, the e-commerce business owner crowd and industry is that they are being sucked dry. It's like vampires on, on a buffet table, right? There's just plenty of money to go around when it's the retail arbitrage or online arbitrage or whatever strategy might be doing, or personal private label, whatever it might be.

Mark Willis 00:04:53  If you've got money, the banks can smell it. And of course, there are plenty of good people out there who are going to give you lines of credit when you don't need it. What's that old quote by Mark Twain? He says, A banker is a fellow who will lend you his umbrella when the sun is shining. But once it back, as soon as it starts to rain. And so this ultimately becomes the solution of the bank, becomes the problem of the bank, and they end up sucking your business dry like a parasite on your back. And for many of us, that's the end of the business. The last stages of a gasping business is the bank sucking all the assets, or taking all the assets, and even even the better options like, you know, asset based lending and some other, you know, reasonable strategies. That's that's your business livelihood right there. If they take your inventory, that's the end of your business. Right. And who I guess the ultimate question is who is really in control of your own business.

Mark Willis 00:05:37  And for too many business owners, it's not even them. They're slaves. They're slaves to the bank that they lent their equity to, their assets to their their promissory notes to. And so, unfortunately, it's banks that end up becoming the profit holders of all your hard work. And part of our work again, is, as financial planners at my firm is to think, well, what would be different? How could we not just get away from banks, but how could we mimic their strategy for your own benefit? How could we actually do what the banks do? Don't do what they tell you to do, but watch what they do and go do that instead. That's the ultimate wealth building strategy, in my opinion. If you can think like a bank thinks, if you can act like a bank, you can profit like a bank profits. And I'll just say this is I'd love to get your thoughts on this. So I read a book recently. It's called Debt the First 5000 years. Great title, scary title because it means there's probably more coming.

Mark Willis 00:06:28  But it's the human history of our relationship to this four letter word called debt. And if you really think about it, it goes back as far as any other human institution. It's as old as marriage, it's old as friendship, it's as old as really anything else. You can imagine this concept of debt and banking. If I could just do what banks do, then I can follow in their footsteps and use their banking problem to my advantage. And that's, I think, the idea of Jiu-Jitsu, right where you take the problem or your opponent's energy and redirect it back at them. So what if you could become your own source of financing rather than leaning on the the ultimate bloodsuckers of your business, the banks, the banksters as I call them? What if you could become your own source of financing and actually profit from your need of access to capital? Because every business needs access to capital, it's the oxygen that fuels the business's growth. But what if you could use that need for access to capital as a means of generating income and revenue, rather than watching watching it leech away to some banker down the street? Yeah, I'm I'm genuinely interested.

Mark Willis 00:07:24  And I think that's the unique thing about ecommerce businesses is they're very inventory intensive. So you make all this money and it looks great, but then you take that money and you have to go back and reinvest it all over again into more inventory. And it's this vicious cycle. And I think that that's where a lot of people, when they start growing their business, if they don't have healthy profit margins. Right, it's really challenging for them to just take all of that cash, go reinvest it all over again into more inventory. How can we actually do this thing in the legal sense in our business today? And does it take 15 acts of Congress and 100 years of waiting for revolution, for a 5000 year old industry like the banking industry, to be overturned so that we can bring banking back down to the you and me level? That's sort of the the ultimate question that most people don't really have the words to ask, but they're like, yeah, great, Mark sounds great. Nice falutin idea, but bring it down the ladder to something I can actually use.

Mark Willis 00:08:12  And here's the good news. This has been a strategy that's been in place for hundreds of years, and individuals and business owners are using strategies like this all over the country. It is perfectly legal. In fact, it predates much of the tax law in this country. So it's been grandfathered in to retain a number of significant tax advantages, which I know you and I are keen to talk about today, but the asset that it's built upon is very counterintuitive, and I'd say even there's some bias out there in the marketplace. Now, you have to understand, before I let the cat out of the bag as a certified financial planner, I never thought I'd be talking about this one weird old financial asset. But the more I look into it, the more I'm compelled that I need to at least let business owners know about it so they can make their own minds up. Because there's so much, I guess, misinformation in the marketplace. And there's been plenty of people who have who put it in the on radio shows and, you know, radio gurus like, I'll call them, say, raves, and we'll just call them that.

Mark Willis 00:09:03  So what is it? Well, it's a little known variation of a 200 year old financial asset that's grown, guaranteed in the marketplace every year in value. It's known as dividend paying, whole life insurance, whole life insurance of all things in the financial universe. I mean, I it took me three and a half years to get my CFP and yes, I studied it, but it never clicked. I never saw the puzzle pieces come together as I was getting my designation, and I was too busy talking about other things that had no guarantees were riddled with fees. We're going to be taxed to high heaven in the future, and there was no access to the money for the 15 to 30 years while you waited. Take, for example, for one day. No guarantees on that except the fees that you pay. There's no access to it for 20, 30, 40 years until you're 59.5. I jokingly say it's like when you get a 400 K, it's like buying a car when you're 21 years old, but you can't drive it until you're 59.5, and so there's no access to it, is what I mean by that.

Mark Willis 00:09:50  What's the point in buying something you can't use for 25 or 30 years? And of course, it doesn't help you at all with your business. When you own a 400 K or IRA or any of these other conventional retirement accounts. On the other hand, bank on your self-designed whole life insurance, and we'll talk about what that means in just a minute, has several different, I think, unique advantages for the business owner. Now, it's not without its considerations. We'll get to that too. But here it is in a nutshell. Number one, when you put money into a bank on your self designed whole life insurance policy, the policies cash value grows guaranteed every single year. So regardless of market conditions, whether you're listening to this and the market is up or down or sideways, I know that every one of my clients cash values will grow this year on a guaranteed basis. It's a it's a contractual guarantee between you and the insurance company. So that's an incredible advantage when nothing else has any sort of predictable increase, you know that you'll have a higher net worth in your policy every single year.

Mark Willis 00:10:40  Number two, the money is available and accessible to you today, meaning you don't have to wait till some magical age. When the government finally says that you're old enough to enjoy your own money, you can use it today for any reason. There's no red tape. There's no prohibited transactions. You can use it to fix up your kitchen, send your kid to college, or buy some inventory for your business again. We'll come back to that in a minute. Third, when you borrow against the policy, there is something called a loan feature. And again, if it's designed properly, if it's a bank on your self-designed policy, the policy will continue to compound and grow with this, even on the capital you use to borrow the money. So if you had $200,000 in cash value, and let's say you borrowed out 150,000 bucks for some inventory for Q4 next year, you'd still be earning interest and growth and guaranteed growth as well as dividends on the full $200,000, even though you'd access 150 grand for your inventory.

Mark Willis 00:11:28  Now, think about how that might help you as a business owner, become more competitive if everybody else selling the widgets and gizmos online are using, you know, Amazon Payables or any of these other, you know, major credit sharks out there that are offering close to usury laws, and you happen to be the only guy in your town or your industry selling on Amazon or on Walmart or any of these other online stores. And now you've got your own line of credit to yourself, and you're actually profiting from when you need to access that money. And of course, it is life insurance. So the last thing in my little list here is it is creating a legacy for your family, regardless of how your business does. You need to make sure that you're doing something to help your next generation pick up the torch and carry it forward. So Josh, I just ran through, you know, litany there. There may be a couple of comments or feedback questions. yeah, I love that, Mark. And I think it's such a smart strategy because I feel like you're hedging your bet in the long term future as well, because you're building that, you know, the cash value of your policy, all along the way.

Mark Willis 00:12:24  And then you obviously have kind of like the, the whole life insurance, like a death benefit as well. Right? So heaven forbid, you know, you pass away unexpectedly or anything like that, you're also able to take care of your family. Now, I think what our listeners will be really interested to hear is like, tell me how the ins and outs work about with this. How in the world can I continue earning money on my money even though I just took a loan out for it. So maybe give us some examples like what's the you know, how much does my, does my cash value of my policy increase each year? What's the contractual rate? And I think it varies by policy. But then also what is like, how much am I paying to access that capital? Good. Okay. This is great. And I can even give some examples with real numbers. So if your listeners are or are able to keep up with a few numbers, be ready. I'll take give you a few notes.

Mark Willis 00:13:08  So you're right, this seems crazy that you could use the money and it's still compound and grow. This is antithetical to almost every other asset. I mean, whether it's a savings account or a brokerage account or a cryptocurrency, where else can you access the money and it still grows for you. The biggest problem we all have is that we are breaking compound growth every time we buy an ice cream cone or a car or anything else, we lose that money forever and it's gone. Also, what's gone is what it could have grown too, had we not bought the ice cream cone of the car and just let that money grow and invest instead. This is the problem of opportunity cost And all of us. If we use traditional purchasing methods like buying with cash. Financing it or paying for a lease, let's say on a car. All those options were losing compound growth on the money or were paying interest to some other institution like a bank or finance company instead. So how the heck does this work with a policy like I've designed? Well, I do need to make mention.

Mark Willis 00:13:58  It must be designed properly. It's a lot like an airplane, you know, unless that airplane is truly and nuanced and perfectly designed, it will crash. I'll give you a quick example. I had a guy who met me. He's a farmer here in the Midwest. He had four policies, whole life policies that were designed with a mutual company. It was a dividend paying, whole life insurance policy. It had paid up conditions. It had all the right features that we get into when we talk about these type of policies. But the insurance agent that sold it to them called it something else, and he said, oh yeah, I can do that for you, I promise. I designed it right. You know, it's an infinite, we'll call it infinite wealth, family banking. You know, there's lots of nicknames out there for this. And the agent swore up and down he designed it. Right. So he had about $800,000 across four policies, and he significantly borrowed all of it out to buy a combine for his farm.

Mark Willis 00:14:42  And after that happened, he looked it up and he found out that the policy was not designed to continue to grow on the amount that he borrowed. In fact, the contract itself stated very clearly that the compounding would stop and he would be penalized if he accessed the policy cash value via a loan. And of course, he was furious and the agent was long gone by then. So you want to make sure you must make sure that these policies are designed by someone who knows what he or she is doing. we'll get to that later. But the key thing to remember is it must be a non direct recognition policy loan. That's the fancy phrase for this. So what's it like? Well, if anyone here listening is familiar with how mortgages work or even home equity lines of credit, you're already aware and familiar with how this dual growth strategy works. Think about a home equity line of credit. Let's say you have a $1 million house, and let's say you have a $200,000 line of credit against that house.

Mark Willis 00:15:27  Josh, when you borrow the $200,000 out of the House line of credit, does your home lose value or does it still is it still worth a million bucks? Nope. Still, they're still worth it. That's right. And you got your 200 grand in your checking account, and you can buy some inventory with it. Or you could go to Vegas with it if you wanted to. Right. Not recommending that, but you could. So the same is true with these policies. If they're non direct recognition, were merely using the policy's cash value as collateral for the loan from the insurance company. So that's how they're able to give you growth on the money and liquid access to it at the same time. Now that's where the metaphor breaks down because home equity lines of credit are back in the banker's pocket, aren't they? The banker controls the repayment plan. The banker controls the interest rate. The banker could foreclose on you or make that callable to you right away. If you lost your job or something, you'd be in big trouble with that bank.

Mark Willis 00:16:13  It's not that way with bank on your self-designed policies. When I borrow from my policy again, the money continues to grow as if I hadn't touched a dime of the money. And I'm in control of the repayment process. It's a non-recourse loan because unlike a house, the death benefit is guaranteed to be of a certain value. And the death benefit is what I'm borrowing against. Okay, so that's the key difference there. Home values don't always go up. Just remember 2008 as an example. But a policy is contractually designed to grow each year. And so I know that I'll never be underwater with my life insurance, cash value or my death benefit, and I can borrow against that policy, and it will continue to grow, and I can take my entire lifetime to repay that loan if I want it to or never repay it. Josh, if I don't repay the loan, then my death benefit is just netted out by the loan balance and the remainder is paid to my family income tax free. Now, wouldn't that add some security and peace of mind to most businesses that you work with? Oh yeah, 100%.

Mark Willis 00:17:02  I like the strategy, so give me some more. Let's let's talk some more number examples then. Like do you have to pay interest on that money back? I mean I know it's yours, but is there interest involved in that. Yeah. Let's use a regular example. We can get to e-commerce if you want, but let's say that you wanted to buy something like a car for yourself. Even so, let's say the car was worth 50,000 bucks and let's say you had 50,000 available to borrow within your policy. Okay. So keep in mind everybody's numbers are going to be different here. But in this example we borrow against the policy 50 grand. And within about 4 or 5 business days that money is directly deposited into your bank account no questions asked. So keep in mind there's no credit check. There's no approval process, there's no loan underwriting. It's just directly deposited within about three or 4 or 5 business days right into your bank account. So then you walk into the dealership and you write the check and buy the car with cash.

Mark Willis 00:17:45  Now you're driving your car around. But remember, the policy is still earning and growing on the full cash value. In our case, $50,000, as if there was never a loan taken. Now there is an interest rate applied to any policy loan. It's a real loan. So they charge they, meaning the insurance company charges an interest rate. Just to keep the numbers real simple. They charge a literally a simple interest rate all year long. So Josh, you probably can tell our listeners this, but I can fill them in two if you need. Is it better to be charged compound interest, or is it more affordable for you to be charged a simple interest rate? What do you think? Simple interest all day long. Why is that? Oh, because your money is not compounding. Every single month like that. Interest rate doesn't continue to add up over and over. Well said. Yeah, that's exactly how it works with these policies, which has the net effect of lowering your cost of borrowing.

Mark Willis 00:18:29  So the annual percentage rate let's say you took four years to repay the loan. Okay. So you borrowed 50 grand. You've repaid it over four years. What was your cost of borrowing? It was about 3000 bucks. Okay, that's about 2% annual percentage rate over that four year period. Is that a good deal? First of all, is that a good deal to borrow money at 2% Apr these days? Now that's great. Absolutely. Now the Dave Ramsey fans would be saying, wait a minute, we could just pay cash for this car and avoid the $3,000 of interest. Why are you talking about this policy piece? Right. Why why not just save up our money and pay cash for the car? Josh, I'll let you take a stab at this one, man. What's the problem with just paying cash out of a savings account for a car? Yeah, so if you do that, that cash walks out the door immediately, and now you're not making money on that. Whereas I believe with the your the whole life policy that 50 K is still going to be earning interest on it, not from the interest you're paying back to the policy but interest.

Mark Willis 00:19:19  And it's targeted towards the market. Right. So you'll have if it's 5%, whatever the gain is 6%, you'll still gain that 6% in interest. And so now you're just it's basically an interest rate arbitrage at this point. Right. That's it. You know about arbitrage, right? any e-commerce business owner gets this intuitively. You're exactly right. Where does the interest I paid the three grand go? It goes back to the insurance company, right? That's the one I borrowed from. Who owns this insurance company? Well, if it's a mutually owned life insurance company, you and I and all the policyholders are the owners of the company that I borrowed from. So you're right. The policies, cash value continue to compound and grow. It's going to be in the five, five and a half range. That's an after tax return of 5 to 6% tax free. That's that's pretty darn good for safe money anyway. So over four years, the same period of time we borrowed the money out, that 50 grand has maybe grown to $62,000.

Mark Willis 00:20:08  That's a $12,000 gain in just four years. So, Josh, you don't have to be a genius at math to figure this one out. If I earn 12,000, I only spent 3000. I have an arbitrage there, right? Of 9000 bucks. And that's if I just stop the clock after four years, how many times might I buy a car in my lifetime? And that 50 grand, 62 grand, 75 grand, 95 grand. That continues to compound as I recycle the purchase over and over again. I might buy 10 or 12 cars between me and my wife and my kids over my lifetime. That could be $1 million. Just poof. Gone to opportunity cost. Now translate this into your annual inventory expense. Now translate this into your annual tax bill. Anybody here pay taxes? I bet so. Now translate this into your kid's college fund. Every major expense, if you think about it like a bank, should be borrowed from the family bank before you make the purchase. So there's a lot of strategy and story here.

Mark Willis 00:21:02  But, Josh, I'll pass the ball back to you. Where should we take this next? Yeah, I love this strategy. So ultimately my question would be how do you how do you get that that cash value in there. Right. You have to put in $50,000 first in order to be able to loan against that. Correct. So and I believe that you're only able to really put in like after tax dollars right into this policy. Like you're not going to get a tax deduction to put it into this policy area. There's a couple ways you can, but 99% of the time you want to put it in after tax. And here's why. in the realm of the legal possibilities, we are either taxed on the seed or the harvest with any tax tool that could be a savings account a 401 K. Think about it for one K for a minute. You get a tax deduction now but the government gets their piece later on in retirement. Roth IRAs are the opposite. You pay your taxes today to get it in there so that it's available to you in the future.

Mark Willis 00:21:50  Income tax free. That's how Roth IRAs work. Life insurance actually is more like a Roth IRA, but without all the puppet strings and restrictions of a Roth IRA. In fact, if folks look this up, you can look up the rich man's Roth or the rich person's Roth. and it's describing life insurance. And so in this case, the only way you can do this, one of the considerations of this whole cool strategy is, yeah, you still got to save you still got to pack it in. What banker can open up his, his bank branch with nothing in the vault to borrow out or to lend out. So you do have to be a real banker. Don't be afraid to capitalize your bank. You know, if you have nothing in the vault, you can't lend it to you. Your customers in this, in this sort of crazy metaphor, you are both the banker and the borrower in this scenario. So the more you have in the vault, the more your borrower, which is you can walk in the front door of your bank and borrow from you.

Mark Willis 00:22:34  Right? Sorry to sound a little schizophrenic, but that's the idea. You know, why not be both banker and borrower from the same institution, which is your policy? So yes, how do we do that? There's lots of ways to do it. Some people, they take profit margin and put it into the policy in a regular way. Just got off the phone with two business partners that felt like on a regular basis, they could set aside several thousand bucks a month. That's easy. Easy to drop that into a policy. Other people, it's just getting started in their business. Maybe it's 3 or 400 bucks a month. we have another couple of business owners that are doing several hundred thousand dollars a year, even several million dollars a year into these policies. Other people, maybe it's a one time lump sum once a year. You know, if you may be listening to this as this episode drops, you may have just come through a great Q4. Congratulations. Your money has to live somewhere, right? Profits have to reside somewhere.

Mark Willis 00:23:17  And where you put your money makes it act differently. If you're putting money into a Sep, IRA, or some sort of other government sponsored retirement account. I just ask you, is that doing what you really want it to do for you? Or is it helping other entities like the financial institution you have it with, or the government, for example? More than it may be helping you to put your money in these traditional retirement accounts. So again, Josh, to your question, money has to live somewhere. Is your tax bill sitting in a checking account every quarter? Is your profit sitting in a checking account or savings account every quarter? Could those be redirected into a policy as a better warehouse for your wealth? Yeah, I love that. And I like that this almost becomes like forced savings in a way, right? That I think you, as a business owner, need to be able to say, hey, I need to make sure I set aside X amount per month that I could bank on.

Mark Willis 00:24:01  Right. That's like, surely you're you've got to be making some profit in the business to be in business. So take some of that profit and put it into these policies. So I'm an advocate. I have one myself. Mark, with our remaining time, I'm curious, like if there's anything else you want to double down on that topic, we can do so. Or I think it would be fascinating to hear, what are some other, like, smart tax strategies to save more on taxes so that we can put more, maybe that tax savings into a policy like this. Well, actually, yeah, there may be some integrated strategy here between these two concepts, a bank on yourself and some of the tax strategies that you were just referring to. But yes, exactly right. I mentioned that, you know, we are a full financial firm. So part of our work is evaluating whether this bank on your self idea is even a good fit for you. If it's not, we tell you up front and we look at other options instead.

Mark Willis 00:24:48  Some people ask me at this point, well Mark, what's the downside? What's the catch. So I might say a few things. One, it does require you to save. Like you just got done talking about Josh. Now, I've had a lot of people who came to me and said, Mark, I've got an old I've got an old CD that's earning me, you know, not as much interest or I've got a, you know, tax refund I just got or I just, I had a guy this morning who just sold his rental property and had moved out of state. So he's taking that windfall and using it to start a policy. So it could be any, any number of different ways. You could start by finding these policies in that regard. But once it's in there, you can use it for any number of strategies within your business or personal. So let me go over a couple of tax reduction strategies and then an extra credit option, and with some real numbers on how you could even get wealthy while paying your taxes.

Mark Willis 00:25:28  So something I think no CPA I've ever heard of has mentioned. So getting wealthy while paying your taxes. But first, let me bring some simple strategies to lowering taxes as a CFP. And again, I'm not a CPA, but I do work with our clients on tax reduction strategies that that they then bring to their CPA so they can reduce their taxes. So first of all, you got to write off every business expense you can. You can pay for your cars, your, you know, expenses, any business you can business expense, you can run it through your business. Section 179 deductions. If you buy a car heavy enough, you can get a bigger tax deduction. You know, this is why you see most of these businesses purchasing large SUVs. Because if it's over £6,000, you could finance that larger purchase through your business. I asked my CPA if I could just throw some like cement cylinder blocks in my trunk if that would count. And they said, no, it has to be.

Mark Willis 00:26:11  It has to be a new purchase. So what about some tax advantaged retirement strategies that don't just postpone your taxes, but actually eliminate your taxes? So this is where investing in some alternative assets really come into play. A lot of our clients are using some of their policy money actually to invest in energy credits, ATM machines, mobile home park funds, all sorts of real estate syndication deals, lots of creative ideas that we sit down and look at with our clients on a one on one basis. Next up is the business 199 A deductions. I would say definitely look this one up. It's not going to last forever. But you can get an extra deduction on your pass through business entity. If you're, you know, an LLC or an S corporation, you can get an extra deduction equal to 20% of your business income. That's up to $415,000 of profit if you're married filing jointly. So there's a phase out there. why don't I stop? There's two more, but I want to get your thoughts on anything I've said so far.

Josh Hadley 00:26:59  No, I'm liking it. Keep keep going there, Mark. I think these are great strategies. And again, they're so important to, you know, you've got to I think that it all comes down to like, preparation and planning. Like these aren't things that you just execute on a whim. These are things that like, you sit down and you methodically like need to plan for where your capital needs to be going. Absolutely. Yep. 100%. Where your money lives makes it act differently. Such a simple concept, but that's something most people never think about, and they live their whole life plugging money into things that don't align with their values or their beliefs. I'll ask somebody, well, great work, great work. Maxing out your 41K. Hey, just curious, what do you think about where taxes are headed in your lifetime? Are they going to go down or up? Oh Mark, they're going to go up. Okay. That's interesting. So are you aware of the implications of maxing out your 41K, which is going to be taxed in the future.

Mark Willis 00:27:44  Whoa. Oh man. And that's when the conversation happens. You know, these moments are what I live for. It's a lot of fun. Okay. Two more really quick ones. if you can employ your children, if you have children in the business, it's a, it's a chef's kiss in terms of a tax strategy here. You can put some you can pay them. And up to the kiddie tax deduction they get that money income tax free. You as a business owner get to deduct that tax okay. So so so that payroll expense becomes tax deductible to you. They receive it income tax free. So there's two benefits right there. Now Josh their money has to live somewhere too. And of course they're probably gonna buy some video games and candy and whatever. but try your best to put some of that money somewhere where it never gets taxed. Okay, so where in the world can we put money where it never gets taxed? Well, savings account is taxed every year, isn't it? Every year, even though we don't see much interest these banks, they don't pay us much interest.

Mark Willis 00:28:33  It does tax you. The savings account will tax you every year for the rest of your life. CDs are the same way. Brokerage accounts. They'll tax you on the gains. If you have gains in a brokerage account on a child or anybody. IRAs, certainly. You know, but what about a Roth IRA? Well, if you put that money in which they never got taxed on and it goes into a Roth IRA, awesome. They get that money out of income tax free when they're 60. But what if we got policies on our children, these bank on yourself policies I've described? Again, you don't have to wait till some magic future age 60 to use this money. What if you dumped money into a life insurance policy insuring your child? Hopefully you'd never see the death benefit. God forbid that should happen. But think of it this way. That's a gift to your grandchildren someday. And the child? Your child can use the policy's cash value any time they want. What if they want to start an Amazon business or e-commerce business someday? What if they might want to go to college someday? You can use the cash value in these policies for their wedding, for their first car, for their college or their business, for their real estate investment, for their children or grandchildren's college.

Mark Willis 00:29:27  And oh, by the way, life insurance cash value does not get counted against you when you apply for financial aid through the Fafsa forms. So just some thoughts to think about here. One last thing, and then I'll hush and pass the ball back to you. Josh, the Augusta rule you probably heard of, you can apply for you know, let's say you want to do a business meeting. You can look around your town and you can find out what what would the Hilton cost or what would the highest end hotel cost for me to have a business retreat at, you know, the the, you know, the Augusta Golf course, let's say. Well, then you can as long as you've got a copy of what the comp rate would be, you could have that business meeting in your living room and charge your business to have that meeting in your hotel or in your business lobby, which is your living room. And again, deduct that expense against your income. so there's so many I mean, we can talk about the short term rentals loophole.

Mark Willis 00:30:09  There's there's probably more time than we have time for today that could give you and your business owner listeners a huge boost and making sure you pay your fair taxes but don't have to leave a tip. Yeah man, this mark. I love all of these strategies and I think like anybody that has children, I love that strategy. Make sure you're maxing out all of that. Put is put the maximum amount into that Roth IRA every year because that that just will compound tax free forever and even pull it out tax free. Love that strategy. The Agusta rule, a very simple, overlooked rule that I think most people do a very lazy job of. They're like, my house would rent for like 200 bucks a day. And it's like, okay, like, sure. And you can do that times 14. That saves you a few thousand bucks. That's not exciting. But what you just shared, which is like, okay, you're going to go to a high end resort. What's that going to cost you? Right.

Mark Willis 00:30:54  That may cost you two, three, five grand a day. Right. And so as long as you have comps and you have an actual quote, like if you're ever audited, you have that proof, right, to say, no, this, this is why I charged myself this much. And it comes out as a tax deduction. Totally. So I love those strategies. Now you talked about how how do we make money while paying taxes, then. Yeah, yeah, this one's gonna blow your mind. But I've got some numbers pulled up here, so I'll read a few off. Share. Share my screen if you want me to, but let me do some of this. so it's really simple. We talked about the power of uninterrupted compounding. And there's also an inevitability that if you're going to be profitable in your e-commerce business or any business, there's going to be some taxes do no matter how many little dance moves we make with the with the IRS, they're called the IRS. And when you spell that word out the IRS, you get the word theirs because they think it's all theirs.

Mark Willis 00:31:43  So what are some ways we can pay them what they think they need to take from us, while still compounding the wealth that we saved to pay them that tax bill. A real simply three steps. Step one pack your tax payment into your policy, the one that we've been describing in this episode. Second, borrow against the policy to pay your taxes as you normally would. So after you've sat down with me or your CPA to lower your tax bill, what's still owed, it's got to come from somewhere. So borrow it from your policy. If it's designed properly, it's a non direct loan. We can make sure that it is. And that money now is going to be growing in your policy and the IRS is happy. You stay on the right side of the of the jail cell that way. And then finally, over the next 12 months, you pay off your policy loan with the business profits to get ready for next year's tax bill. I've been doing this for many years. It's completely fine.

Mark Willis 00:32:28  The IRS does not care where the money comes from as long as it's your account, of course. So these policies can now become a reserve pool for your major annual annoying expenses like taxes and property taxes and income taxes and payroll taxes and the list goes on. So here's an example of a guy named Tommy Taxpayer, and I'll just use his name. It's a real client, but I'm going to change his name here. He is 45. When we got started on this strategy, he felt like he could save about 50 grand a year. He was going to put it into a Sep IRA. And I said, well, wait a minute, what if you put it into this instead? So he took his 50 grand and he put it into a life insurance policy, and he combined it with $90,000 of tax problem. Right. He had a $90,000 a year tax bill. So 50,000 plus 90,000 is 140 grand a year. That's what went into his policy as premium. Okay. So right away he's got more than $90,000 to borrow against from his life insurance cash value.

Mark Willis 00:33:15  So the next April he borrows out 90 grand pays tax bill. IRS is happy, he's happy, but he has a loan and he does this. In our first scenario, I showed him two different scenarios. The first scenario, he just takes 90 grand a year out of this policy as he pays in 140 grand a year. The policy continues to compound and grow. Even though he never pays off the loan. He's just ignoring that policy loan and dropping money into his policy every year at age 65. So 20 years after starting this experiment, even though he's got a major loan against the policy, a little over 2 million bucks, he still has a net cash value of $1.2 million of tax free retirement money that he can enjoy after having paid 20 years of taxes. He still has 1.2 million that he can now spend in retirement. Now some people say, well, Mark, what about that massive $2 million policy loan? Okay. Yeah. If he died, that loan would be wiped against his $5.8 million death benefit.

Mark Willis 00:34:05  All right. But maybe we want to pay off that loan now before I move on. Josh, do you have any questions around that, that strategy and what what's going on there with Tommy taxpayer? No, I'm tracking with you I like it. Okay. All right. So this is a guy who for any reason, he he had all the profits. I mean, I know he had profits because he had taxes due on those profits. Right? And yet in my first scenario, he never pays off the loans that are accumulating. Right? He's borrowing and borrowing and borrowing and ignoring the loan balance. Now, a savvy business owner, coupled with a good CFP like myself will be encouraging him. I would be encouraging him to take regular steps to pay down that policy loan as he has major windfalls. So in this guy's case, he was into real estate, but it could be an e-commerce business or anything else. In my second scenario for the same gentleman, Tommy taxpayer, every five years I show a scenario where he pays off his policy loan with a big windfall.

Mark Willis 00:34:53  Maybe he sells a piece of real estate, or maybe he, you know, patents something that really takes off. It could be really whatever, any kind of windfall it could be. Dear aunt Sally, leaving him a windfall inheritance does not matter. He pays off his loan every five years in this second scenario, still paying the exact same end of the policy. But in this scenario, he just finds money laying in the couch cushions, and he uses that to pay off his his accumulated policy loan at his discretion. It's his policy. He can do what he wants after 20 years. Again, same story, same policy. Still put in 140 grand a year. He instead of only having 1.2 million in retirement. Josh he has $4.1 million of tax free money in cash value that he can now spend for as long as he wants. And oh, by the way, that can translate into a $226,000 a year tax free income from age 65 till age 90. If he lives that long and he still has an $8 million death benefit at retirement time as well, that he can leave his family if he decides to graduate on them too soon.

Mark Willis 00:35:43  Now, that to me, seems like the best possible way to pay your taxes if you're going to be forced to pay him. And I certainly want to be on on the legal side of history here and pay my taxes if I have to pay him, reduce them down as small as they can legally go, and then use my policy to make the payment beautiful. I love that strategy, and I think that is one well worth noting. That's something that I'm going to be having to implement. So Mark, this has been fantastic. So I'd love to leave the audience with three actionable takeaways from every episode. Here are the three that I noted. You let me know if I'm missing something. Number one, I think you, as a business owner, need to make sure that you are putting your money in the right places, and I like the idea of having this whole life policy become a forced savings vehicle for you, and determining whatever amount it is that you can afford on a monthly basis, putting it into this policy, knowing that this money is going to continue to grow, and if a rainy day happens, you can come in and loan from that policy.

Mark Willis 00:36:37  So I think that part is so important. So that's step number one is make sure you're putting your money in the right buckets. Step number two. And action item number two is to I would say make sure you implement tax saving strategies. So if you do not currently work with a CFP or you're not taking if if the things that we talked about today are new to you, such as the two Ada hiring your children, there are more strategies that we didn't get the time to share, but if those are new to you, then my recommendation would be like an action item. You need to go sit down with the CFP because you are leaving hundreds or hundreds of thousands of dollars on the table. Probably that the IRS is scooping up that you could legally, deduct in one form or fashion from your in your business. And then step number three, my final recommendation is to actually execute one of these strategies. So at the end of the day like the rubber needs to meet the road. And we could talk about all this stuff all day long.

Mark Willis 00:37:31  And I think a lot of people like to think that they do these things. But until money actually moves nothing actually happens. So again, work with somebody that you trust so that you could actually then execute on these strategies. So mark anything else that you would add. Action item. Oh I love what you said there. I kind of tell folks all the time, if you want to change your tax, you got to change the acts that you do all year long, which means you got to redirect where money's going and you got to take the moves that we've been describing here. We say that the tax law is just a series of incentives. It's like a dance book with the IRS, and you got to dance with your partner if you want to live in this country. So I'd say follow their dance moves and, and a lot of the incentive structures around business ownership, real estate investing, and insurance. Funny enough, life insurance predates the IRS. Think about that for a minute. That's how old this tool is, and that's how long the wealthy have used it.

Mark Willis 00:38:15  Corporations and banks are some of the biggest purchasers of dividend paying whole life insurance. You can look that up, look up bank owned life insurance, just as one example. They own as much as they can legally hold and still be FDIC certified. So some of the biggest risks in this, and we didn't have time to do much of this, but I will briefly mention, is working with someone who tells you he or she can design one of these policies. I've had a number hundreds, maybe of people come to me saying over the last 12 years of doing this, hey, Mark, I got one of these. And then we look at their numbers and it's a it's a tax mess. It's riddled with commissions. It's tied to markets. It does not grow when you borrow against it. Like like we've been describing here today. All of those are deal breakers. If we're wanting to do this for the banking function now there's plenty of good, you know, people out there. There's plenty of financial professionals out there who are trying to do the right thing.

Mark Willis 00:39:01  I would just say this unless you have a bank on your self professional who's helping you set this up? You want to make sure that that policy is designed properly, much like an airplane of being flown by a certified pilot. There's a lot of nickname brands out there and knockoff brands out there. Make sure you're working with someone that did this right. The rest becomes easy. You know, it's kind of like an airplane to, you know, sit in the back seat and just let the guy fly the plane. It's easy for the customer. So very complicated for the engineer in the pilot. Once it's designed properly, though, you get to enjoy the ride. So that's my final words I'd say as we're wrapping this up. That's perfect. Well-said Mark. Now, I'd love to ask each guest the following three questions. So, number one, what's been the most influential book that you've read and why in life? Wow. Well, you know, man, I was going to say something else, but in life, I'd say the Holy Bible.

Mark Willis 00:39:41  Man, it's every day given me something brand new to change my life on. Even this morning it was first Peter four and five. Unbelievable stuff right there. But if I was to say kind of a more down to earth book, let's say, man, it's hard to hard to boil it down to just one, but I would maybe say the Lord of the rings, another great, incredible story of resilience and overcoming obstacles. Love it. Great recommendations. Question number two what's your favorite AI tool that you've been using and why? Yeah, I was thinking about this one. You know, I think there's one there's one that I think that is beats them for me, which is the one that tells me all the other places to go looking for AI. It's an AI tool that searches all the AI tools. And you might just look up future tools, IO future tools. IO gives you a high level overview and searches and gives you recommendations for new AI tools. Very cool. I love that recommendation.

Josh Hadley 00:40:26  All right. Final recommendation or question for you here, Mark, is who is somebody that you admire or respect the most in the e-commerce space that other people should be following and why? I'm a huge fan of our good friend, Jimmy Smith, who runs the mastermind group, Amazon Legends, and he's just a great guy and has worked with him for many years. So check him out. And, there's a number of others. Too many to count. There's, you know, Kate Chadwick and Danny Stock and so many more love that. Well, Mark, this has been an excellent episode. If people want to learn more about you, they want to reach out to you. They want to pick your brain further on. A lot of these deep topics that we talked about today. Where's the best place people can find you? You know, if you're looking for more information on this strategy, then check out our podcast. If you're ready to take the next step and actually see how this might work.

Mark Willis 00:41:06  Like you said, rubber meeting the road rather than just spinning our tires. I would recommend going to kick start with Mark. Com in fact kick start with Mark. Com has a place where you can sign up and we can do a 15 minute phone strategy session. It also has links to our podcast which is not your average financial podcast. So you can check out our podcast, our YouTube channel, and get a free copy of the book. If you write down that you heard about this through the e-commerce business, through this podcast. Hold on just a minute. I'm blanking on my, hold on e-commerce Ecomm Breakthrough. Pardon me. All right. Let me start this again. So if you're interested in learning more about this you can go to kickstart with Mark. Com and if you say in the notes of that show that you heard about heard about me through the Ecomm Breakthrough podcast, I would love to meet with you. Put it in the notes and I'll give you a free copy of my book, best selling book, The Amazon How to Be an Amazon Legend and Fire Your Banker.

Mark Willis 00:41:48  If you mention Josh's name or the name of the show, then I would be glad to send you that ebook free of charge. So again, that's kick start with Mark. Com. Love it. Mark, thanks again for joining us on the show. My pleasure. Thank you. Josh.