00:00:31.356 --> 00:00:33.516 jethro-host176_1_06-17-2024_143640: Welcome to the special episode. 00:00:33.546 --> 00:00:38.256 This is a simulcast episode of My Bonus Money and Transformative Principal. 00:00:38.256 --> 00:00:41.546 And if you haven't been listening to my bonus money I 00:00:41.846 --> 00:00:43.196 want you to go check that out. 00:00:43.196 --> 00:00:44.576 Lots of good stuff over there. 00:00:44.576 --> 00:00:49.586 Talking about how educators can earn some passive income and do some 00:00:49.586 --> 00:00:50.966 different things with their money. 00:00:51.056 --> 00:00:52.464 So what. 00:00:53.561 --> 00:00:54.971 Here's what we're gonna talk about today. 00:00:55.521 --> 00:01:00.651 We've been talking about this idea of how to make your money work 00:01:00.651 --> 00:01:02.611 harder through options trading. 00:01:02.721 --> 00:01:04.191 That's what's been our focus. 00:01:04.381 --> 00:01:07.536 We've talked about some other things also, but really that's been a big part of it. 00:01:07.986 --> 00:01:12.986 And one of the ways that you can look at that is that is risk on money. 00:01:13.361 --> 00:01:15.191 That's money where you are taking risks on it. 00:01:15.461 --> 00:01:19.911 And then you have risk off money which I learned from our guest today Hutch. 00:01:19.971 --> 00:01:21.577 And so we'll get to him in just a second. 00:01:22.071 --> 00:01:26.271 But that idea of having risk on versus risk off money and what 00:01:26.276 --> 00:01:30.391 you do with money that's in those different piles is, is important 00:01:30.391 --> 00:01:32.251 to what we're chatting about today. 00:01:32.581 --> 00:01:36.031 So we are going to invite Hutch on. 00:01:36.061 --> 00:01:39.061 Hutch is the founder of banking truths.com. 00:01:39.351 --> 00:01:43.221 You can search for him online banking truths.com or just look for Hutch 00:01:43.221 --> 00:01:45.201 Hutchinson and you'll be able to find him. 00:01:45.611 --> 00:01:46.721 Lots of really great stuff. 00:01:46.781 --> 00:01:49.691 Tons of really informative YouTube videos. 00:01:49.901 --> 00:01:52.331 So, Hutch, welcome to my bonus Money. 00:01:52.331 --> 00:01:53.141 Great to have you here. 00:01:53.991 --> 00:01:55.431 Hutch Hutchinson: Yeah, thanks for having me Jethro. 00:01:55.741 --> 00:01:58.051 And my mother did not name me Hutch Hutchinson. 00:01:58.051 --> 00:02:02.671 It's John Hutchinson, but John is such a forgettable name and I like, if I'm in any 00:02:02.671 --> 00:02:06.331 kind of group situation, they say, John, there'll be three of us looking over. 00:02:06.571 --> 00:02:10.986 So, in many circles I was already going by Hutch and it just works and people 00:02:10.986 --> 00:02:11.526 remember it. 00:02:11.526 --> 00:02:11.796 So 00:02:12.101 --> 00:02:13.601 jethro-host176_1_06-17-2024_143640: Well, and I have interviewed a couple 00:02:13.606 --> 00:02:17.891 people lately who had double first names like Jennifer Jennings for example. 00:02:17.891 --> 00:02:18.341 And 00:02:18.761 --> 00:02:22.321 so that can be, that can sometimes be confusing, Hutch, welcome. 00:02:22.326 --> 00:02:23.088 Glad to have you. 00:02:23.411 --> 00:02:28.181 So let's talk first about this idea of risk on versus risk off money, 00:02:28.331 --> 00:02:31.181 and give me your perspective on that. 00:02:31.481 --> 00:02:32.071 Hutch Hutchinson: Yeah, sure. 00:02:32.281 --> 00:02:37.531 So in general, like if you go look at a hedge fund, you look at banks themselves, 00:02:37.891 --> 00:02:44.281 what gives them the opportunity to earn those greater rates of return is 00:02:44.281 --> 00:02:46.351 usually some kind of pool of reserves. 00:02:46.351 --> 00:02:46.381 I. 00:02:47.461 --> 00:02:51.001 Like a bank is able to do lending because they have a certain amount of reserves, 00:02:51.001 --> 00:02:53.161 there's actually reserve requirements. 00:02:53.461 --> 00:02:57.631 Most traders, whether they be institutional, professional, or 00:02:57.631 --> 00:03:03.771 even whatever recreational traders, they're able to take risks. 00:03:04.116 --> 00:03:07.866 In strategies where there's a lot of volatility, a very high risk, 00:03:07.866 --> 00:03:12.606 high reward because there's a bigger pool of money that if they fail 00:03:12.606 --> 00:03:14.376 they can pull from and try again. 00:03:14.686 --> 00:03:15.106 Same thing. 00:03:15.106 --> 00:03:16.966 I actually just got back from Las Vegas. 00:03:16.966 --> 00:03:21.076 I was playing some smaller world series of poker tournaments, poker players, 00:03:21.136 --> 00:03:25.756 they, the function of how big of games or how big of tournaments they play is 00:03:25.756 --> 00:03:28.786 a function of how big their bankroll is, which is usually a lot of money. 00:03:29.191 --> 00:03:32.701 Part in cash, not in a mattress, but usually in a bank these days, 00:03:32.701 --> 00:03:33.691 there's a high yield saving. 00:03:33.691 --> 00:03:36.871 There's something called a high yield savings account, but for the last 15 00:03:36.871 --> 00:03:40.381 years, a high yield savings account, the rate of return started with a dot. 00:03:41.276 --> 00:03:41.616 And so. 00:03:42.571 --> 00:03:45.001 One of our flagship videos@bankingtruths.com. 00:03:45.001 --> 00:03:48.721 In fact, if you go to banking truths.com/banks, I'm sure Jethro will 00:03:48.721 --> 00:03:50.082 have it in the show notes as well. 00:03:50.321 --> 00:03:53.861 As we have a four minute video where we actually look at the balance sheets 00:03:53.861 --> 00:03:57.761 of major banks to see, well, where do they put their safe and liquid reserves? 00:03:57.881 --> 00:04:02.311 And although they do have some money in cash or bearing accounts they 00:04:02.311 --> 00:04:04.141 have quite a lot of money in. 00:04:04.476 --> 00:04:07.176 Life insurance policies on their key executives. 00:04:07.236 --> 00:04:11.466 And what we do is we take that big institutional thinking and bring it 00:04:11.466 --> 00:04:15.516 down to family, fiscally responsible families, small businesses. 00:04:15.786 --> 00:04:17.496 My wife is an educator. 00:04:17.496 --> 00:04:18.966 She teaches tk. 00:04:19.246 --> 00:04:22.371 They've asked her to be an administrator before, but she has a gift. 00:04:22.461 --> 00:04:23.931 She loves doing what she does. 00:04:24.351 --> 00:04:25.671 When we're in the grocery store, like. 00:04:25.686 --> 00:04:28.386 Little kids and babies will always be looking at her. 00:04:28.386 --> 00:04:31.566 She just has that energy, so she's right where she needs to be. 00:04:31.566 --> 00:04:34.026 And when I actually started in the life insurance industry. 00:04:35.176 --> 00:04:38.746 I actually, before I learned about infinite banking, I learned 00:04:38.746 --> 00:04:41.746 about something called pension maximization, because that was 00:04:41.746 --> 00:04:46.696 the biggest crux of our retirement plan was this state funded pension. 00:04:47.026 --> 00:04:50.536 And there actually is a strategy where you can pair it with life insurance 00:04:50.536 --> 00:04:54.706 to make sure you're able to get the highest possible pension payout. 00:04:55.126 --> 00:04:59.356 Now, what we can talk about today is how we can pair all of those things. 00:04:59.666 --> 00:05:05.276 Together because the educators that are listening to your show and learning how to 00:05:05.276 --> 00:05:09.176 use Robert Robinhood excellent interface, by the way, I trade options myself. 00:05:09.536 --> 00:05:12.326 Again, they're only gonna do that for a small fraction of their money 00:05:12.446 --> 00:05:14.003 to try and earn that extra alpha. 00:05:14.336 --> 00:05:16.616 Meanwhile, they're gonna have an emergency fund in cash or a 00:05:16.621 --> 00:05:17.876 certain amount of money in cash. 00:05:18.146 --> 00:05:22.346 And meanwhile, they had this massive part of the retirement fund sitting 00:05:22.346 --> 00:05:25.256 in stirs or pers or whatever it is. 00:05:25.621 --> 00:05:28.261 That is promising them income for the rest of their life and there's 00:05:28.261 --> 00:05:32.881 a way to weave a life insurance product designed a certain way and a 00:05:32.881 --> 00:05:37.531 way to funnel money through there to work, enhance all of those efforts. 00:05:38.281 --> 00:05:40.621 jethro-host176_1_06-17-2024_143640: so let's look at this from that perspective 00:05:40.626 --> 00:05:44.071 and there's a lot of different paths we can go down to talk about this, but we 00:05:44.076 --> 00:05:46.261 wanna talk about that pension thing today. 00:05:47.634 --> 00:05:51.594 Pretty much everybody listening to this probably has I have a 00:05:51.594 --> 00:05:52.837 pension in the state of Utah. 00:05:53.274 --> 00:05:56.304 I only taught there for eight years, but it exists. 00:05:56.304 --> 00:06:00.024 And so what can we do with that pension? 00:06:00.024 --> 00:06:04.794 How can we maximize that so it'll be as beneficial as possible to us? 00:06:05.094 --> 00:06:07.084 Hutch Hutchinson: Yeah, so let's talk about that and we can weave 00:06:07.084 --> 00:06:10.654 it back into, because really a life insurance policy that's designed 00:06:10.654 --> 00:06:13.414 for pension max or infinite banking is kind of like a now and later. 00:06:13.414 --> 00:06:15.844 Remember those candies now and later, right? 00:06:15.904 --> 00:06:17.674 They taste good now and they taste good later. 00:06:17.700 --> 00:06:19.394 They last forever at one point. 00:06:19.394 --> 00:06:22.094 I thought about using that as part of my branding, but it's copyrighted 00:06:22.094 --> 00:06:23.504 even though they don't exist anymore. 00:06:23.714 --> 00:06:25.004 But really it should work. 00:06:25.004 --> 00:06:26.594 Something like that, right? 00:06:26.594 --> 00:06:27.854 Like one of these now and later candy. 00:06:28.229 --> 00:06:31.709 It can be there in its existence and the fact that it's there can 00:06:31.709 --> 00:06:34.079 help you maximize your pension whenever you decide to take it. 00:06:34.079 --> 00:06:37.079 You're a young guy, Jethro, I assume it'll be another 10, 15, 00:06:37.079 --> 00:06:38.729 20 years before you do that. 00:06:38.969 --> 00:06:42.559 Obviously, the longer you wait, the more you get as a lifetime payment, but 00:06:42.559 --> 00:06:46.609 you can actually use the equity in that policy to help support your, whatever 00:06:46.609 --> 00:06:49.249 ventures you're doing, to build wealth, whether it's investing in real estate 00:06:49.249 --> 00:06:50.839 or trading options or whatever that is. 00:06:51.169 --> 00:06:52.339 So the biggest, 00:06:52.819 --> 00:06:53.659 jethro-host176_1_06-17-2024_143640: What does that mean? 00:06:53.659 --> 00:06:56.899 You can use the value, is that what you said? 00:06:56.899 --> 00:06:58.539 You can use the value in that pension. 00:06:58.839 --> 00:07:01.089 Hutch Hutchinson: No, you can use the value, the cash value of the life 00:07:01.089 --> 00:07:02.789 insurance policy to enhance those other 00:07:02.789 --> 00:07:03.299 things. 00:07:03.615 --> 00:07:05.069 So let's talk about that for a second. 00:07:05.429 --> 00:07:09.779 A life in a permanent life insurance policy always has two parts. 00:07:10.679 --> 00:07:16.799 It has a death benefit and it has a cash value now with a whole life 00:07:16.799 --> 00:07:20.729 insurance policy, which I realize with some media celebrities is a dirty word. 00:07:21.149 --> 00:07:25.499 But when you design a whole life policy properly, there is a way to actually 00:07:25.499 --> 00:07:29.639 compress those commissions to actually overfund it to where instead of saying, 00:07:29.849 --> 00:07:33.479 what's the least amount of money I can pay for the most amount of life insurance, 00:07:33.719 --> 00:07:37.529 the way we solve it for our clients is we're saying, what's the least amount 00:07:37.529 --> 00:07:43.139 of insurance we can wrap around your cash so that the cash performs well? 00:07:43.339 --> 00:07:48.379 Because the costs, the commissions, the fees, so to speak, contrary to popular 00:07:48.379 --> 00:07:52.129 belief, are not based as much around how much money you're putting in the policy. 00:07:52.429 --> 00:07:55.159 It's more so based on how much death benefit it's 00:07:55.269 --> 00:07:59.529 And so when you have a permanent life insurance and it has these two 00:07:59.529 --> 00:08:05.259 parts, the death benefit part is what will actually help you enhance 00:08:05.259 --> 00:08:06.819 your pension, and we'll get to that. 00:08:07.584 --> 00:08:09.774 But there's always a cash value. 00:08:09.774 --> 00:08:12.054 Think of it almost as like the equity in your home. 00:08:12.354 --> 00:08:18.054 Like if you sold your home right now, it would go for a certain purchase price, 00:08:18.594 --> 00:08:22.734 but you may not have that much equity in there if there's a loan against it, right? 00:08:23.559 --> 00:08:27.069 So the equity is the difference between what the purchase price would be 00:08:27.279 --> 00:08:29.909 and how much how much that loan is. 00:08:30.149 --> 00:08:34.979 But life insurance policy with no loans really, you're prepaying 00:08:34.979 --> 00:08:36.329 for a future death benefit. 00:08:36.359 --> 00:08:41.069 And so you actually build equity in the cash value that you can use along the way. 00:08:41.619 --> 00:08:44.889 And so let's just go back to the death benefit portion for a moment. 00:08:44.889 --> 00:08:46.179 We'll get to the cash value part. 00:08:46.179 --> 00:08:50.169 When we talk about the options, the existence of a permanent death 00:08:50.169 --> 00:08:54.087 benefit, a death benefit that doesn't go away is contractually guaranteed, 00:08:54.939 --> 00:08:59.019 actually allows you to get a higher pension payout than if you didn't have 00:08:59.064 --> 00:08:59.394 jethro-host176_1_06-17-2024_143640: Okay. 00:08:59.399 --> 00:09:00.024 Wait, how 00:09:00.159 --> 00:09:00.669 Hutch Hutchinson: here's why. 00:09:00.834 --> 00:09:01.344 jethro-host176_1_06-17-2024_143640: So, 00:09:01.824 --> 00:09:07.854 so having a death benefit allows me to get a higher pension payout from 00:09:08.154 --> 00:09:10.314 TURs or PERS, or whatever it is 00:09:10.914 --> 00:09:12.024 when I retire. 00:09:12.224 --> 00:09:12.734 Hutch Hutchinson: Yep. 00:09:13.024 --> 00:09:13.534 jethro-host176_1_06-17-2024_143640: me about that. 00:09:13.734 --> 00:09:15.954 Hutch Hutchinson: When you go to retire, and maybe you've already 00:09:15.954 --> 00:09:19.164 seen some of these estimates, they're gonna give you different options. 00:09:19.224 --> 00:09:22.674 Like they'll call it option A, option B, option C, option one, option 00:09:22.674 --> 00:09:26.304 two, option three, or the a hundred percent option, the 75% option. 00:09:26.304 --> 00:09:30.114 The 50% option is maybe a lot of people are familiar with, which basically the 00:09:30.114 --> 00:09:34.194 a hundred percent option basically says, Hey, you can have a hundred percent. 00:09:34.749 --> 00:09:37.479 Of what you're vested in this pension, let's just call it, let's 00:09:37.479 --> 00:09:39.279 just call it 10 grand a month, right? 00:09:40.389 --> 00:09:40.749 For just 00:09:40.749 --> 00:09:41.468 round numbers. 00:09:42.009 --> 00:09:46.689 You could have 10 grand a month for the rest of your life, but if 00:09:46.694 --> 00:09:48.929 you die, your heirs get nothing. 00:09:49.129 --> 00:09:52.549 And a lot of people are married and so they're not gonna choose the a 00:09:52.549 --> 00:09:53.989 hundred percent option or option A. 00:09:54.049 --> 00:09:55.669 They're not gonna check that box. 00:09:55.999 --> 00:09:58.789 There's gonna be a box below it that says, look. 00:09:59.539 --> 00:10:03.979 Instead of a 10,000 a month, we'll give you 9,000 a month. 00:10:04.890 --> 00:10:08.019 But if you die, your wife will get half. 00:10:08.169 --> 00:10:12.101 She'll get 4,500 a month, and a lot of people will choose that, right? 00:10:12.469 --> 00:10:15.949 If they say, I want my wife to have the whole thing, they'll say, 00:10:15.949 --> 00:10:17.989 okay, we'll give you 8,500 a month. 00:10:18.814 --> 00:10:24.994 And if you die, your wife, your husband, your surviving spouse will get all 8,500. 00:10:25.324 --> 00:10:29.374 And so obviously the more you promise to other people in the 00:10:29.374 --> 00:10:31.504 future, the less you get now. 00:10:31.504 --> 00:10:31.924 Right. 00:10:32.824 --> 00:10:33.214 jethro-host176_1_06-17-2024_143640: Yep. 00:10:33.334 --> 00:10:34.114 That makes sense. 00:10:34.144 --> 00:10:36.304 Hutch Hutchinson: Let me ask you this question, Jethro just think 00:10:36.304 --> 00:10:37.714 of this like an educator right now. 00:10:37.714 --> 00:10:42.154 Don't think of it in terms of product, but if you are gonna 00:10:42.159 --> 00:10:44.644 give money to an institution. 00:10:45.484 --> 00:10:50.764 TURs or purrs to promise you to promise somebody else who 00:10:50.769 --> 00:10:52.294 you love money when you die. 00:10:53.104 --> 00:10:56.034 What would that product be called out on the free market if you're gonna 00:10:56.034 --> 00:11:00.084 give an institution money to make sure somebody else gets money when you die? 00:11:00.469 --> 00:11:01.009 What's that 00:11:01.104 --> 00:11:01.209 called 00:11:01.404 --> 00:11:01.914 jethro-host176_1_06-17-2024_143640: life insurance. 00:11:02.214 --> 00:11:03.479 Hutch Hutchinson: It's called life insurance. 00:11:04.259 --> 00:11:07.159 And what's interesting is educators. 00:11:07.359 --> 00:11:12.699 Always have a very significant life insurance decision they have to make 00:11:13.629 --> 00:11:19.749 when they retire, which is arguably when life insurance is the most expensive 00:11:19.749 --> 00:11:21.599 it will ever be and the hardest to 00:11:21.709 --> 00:11:22.039 jethro-host176_1_06-17-2024_143640: Yeah. 00:11:22.189 --> 00:11:26.879 Well, and this is why I wanted to talk to you because after watching the video 00:11:26.879 --> 00:11:33.299 about this, it became very clear that you can make this decision it in your 00:11:33.299 --> 00:11:39.269 twenties or thirties or forties, and it seems like it would be a lot cheaper. 00:11:39.564 --> 00:11:45.264 To make that decision now than to make that decision when you retire, when you 00:11:45.264 --> 00:11:49.914 may have other health complications or you were a cancer survivor, or any of 00:11:49.914 --> 00:11:54.204 those kinds of things that really affect your ability to get that kind of life 00:11:54.209 --> 00:11:56.724 insurance later in life, or you're obese. 00:11:57.534 --> 00:11:57.774 Hutch Hutchinson: Absolutely. 00:11:58.274 --> 00:11:59.774 I'll take it to a different level with you. 00:11:59.974 --> 00:12:03.784 It even still pencils if you're in your mid fifties. 00:12:03.844 --> 00:12:04.684 And here's why. 00:12:05.194 --> 00:12:09.184 With any actuarial assumptions and actuarial just means any 00:12:09.184 --> 00:12:11.404 insurance company has actuaries. 00:12:11.554 --> 00:12:11.584 I. 00:12:11.734 --> 00:12:15.844 They're math geeks that figure out exactly how many people die. 00:12:15.874 --> 00:12:19.131 Like the joke is, insurance companies already know when you're gonna die. 00:12:19.234 --> 00:12:21.694 Maybe not your date actu Exactly. 00:12:22.004 --> 00:12:26.024 But they already know with given your health today, when 00:12:26.024 --> 00:12:27.254 you're gonna die on average. 00:12:27.434 --> 00:12:33.344 And those same actuaries are who work forts and pers and stirs, they hire 00:12:33.344 --> 00:12:37.154 actuaries to figure out what kind of pen pension you're entitled to. 00:12:37.454 --> 00:12:38.204 And so. 00:12:38.894 --> 00:12:43.574 The reason why it's still pencils for people in their fifties as long 00:12:43.574 --> 00:12:50.384 as they're healthy is because with any kind of major sweeping, actuarial 00:12:50.389 --> 00:12:54.104 assumption, their pricing in the good, bad, and the ugly health wise. 00:12:54.809 --> 00:12:59.339 So if you're average health or above average health, you can, and you can 00:12:59.478 --> 00:13:02.069 qualify for that in the free market. 00:13:02.189 --> 00:13:06.779 With a private insurance policy, you actually get, call it better pricing 00:13:07.079 --> 00:13:10.259 than when you just get lumped in with the good, bad and the ugly because 00:13:10.409 --> 00:13:13.859 the actuaries for tourism and pers, they don't know what your health is. 00:13:13.949 --> 00:13:18.369 And so they have to av give you the average where probably some of the, your 00:13:18.369 --> 00:13:21.159 listeners right now, the people they work with aren't in the best health. 00:13:21.924 --> 00:13:24.984 But they can qualify for their own health and just naturally get better 00:13:24.984 --> 00:13:28.674 pricing as long as people can get a standard rating or better if they 00:13:28.674 --> 00:13:30.054 get a preferred rating or preferred. 00:13:30.054 --> 00:13:33.824 Plus, we found that at pencils almost right up until retirement. 00:13:34.124 --> 00:13:36.194 jethro-host176_1_06-17-2024_143640: Now that, okay, so let's 00:13:36.194 --> 00:13:37.394 take a step back again. 00:13:37.394 --> 00:13:43.014 You said if you it, your death benefit upon retirement your death benefit. 00:13:43.044 --> 00:13:46.915 Having this life insurance policy actually helps you get more money from. 00:13:47.994 --> 00:13:53.114 From your retirement, your pension, what is which one of those does that work? 00:13:53.114 --> 00:13:55.304 Does that mean you get the a hundred percent option where you get all 00:13:55.304 --> 00:13:56.534 and your spouse gets nothing? 00:13:56.934 --> 00:13:58.104 Is that what you mean? 00:13:58.404 --> 00:14:02.054 Hutch Hutchinson: So it could be, and this is the math that we help our clients do. 00:14:02.684 --> 00:14:07.304 So we would have them run the printouts from tours per stirs and 00:14:07.304 --> 00:14:10.154 show the different options, and then they can clearly see how much 00:14:10.154 --> 00:14:11.474 they'd be giving up in retirement. 00:14:11.674 --> 00:14:15.364 we show them like, look, as long as you have X amount of death benefit. 00:14:15.874 --> 00:14:21.304 That can exist and we can actually, we pair that with another calculator. 00:14:21.304 --> 00:14:24.244 It's actually an annuity calculator, which is another insurance product. 00:14:24.484 --> 00:14:25.714 They use actuaries. 00:14:26.054 --> 00:14:29.734 We're not saying to buy an annuity now, but we're saying like, look, if you 00:14:29.734 --> 00:14:36.034 died the day after you retired, could we take this death benefit that your family 00:14:36.034 --> 00:14:40.744 would get and put it into an annuity, a guaranteed annuity that would create the 00:14:40.744 --> 00:14:44.764 same after-tax payment, if we can do that. 00:14:45.184 --> 00:14:46.024 Then yes. 00:14:46.264 --> 00:14:50.134 Having the existence of a whole life insurance policy with a guaranteed 00:14:50.139 --> 00:14:54.664 death benefit actually gives you the confidence to go in there and 00:14:54.664 --> 00:14:56.434 check the a hundred percent box. 00:14:57.004 --> 00:14:58.804 jethro-host176_1_06-17-2024_143640: Because the reason why we don't check 00:14:58.804 --> 00:15:02.074 the a hundred percent box is because we're afraid that if we die, our 00:15:02.074 --> 00:15:03.574 families are gonna be left destitute. 00:15:03.724 --> 00:15:04.654 Our spouses are gonna be 00:15:04.654 --> 00:15:07.504 left destitute, and so we don't want that to happen. 00:15:07.504 --> 00:15:11.734 So we choose the 50% option, and that makes it so that we 00:15:11.734 --> 00:15:13.504 are sure that after we die. 00:15:13.864 --> 00:15:17.794 Then our beneficiary is going to continue on and have money 00:15:17.794 --> 00:15:19.594 coming in, which is your spouse. 00:15:19.624 --> 00:15:22.834 'cause your kids don't get anything from the pension, right? 00:15:23.134 --> 00:15:26.239 Hutch Hutchinson: Well, it's just so everybody knows Jethro, and I did not 00:15:26.239 --> 00:15:28.069 script this because I wanted Jethro to be 00:15:28.204 --> 00:15:29.434 jethro-host176_1_06-17-2024_143640: Yes, I'm very raw. 00:15:30.004 --> 00:15:31.744 I'm sweating more in this interview 00:15:31.744 --> 00:15:33.214 than I have in months. 00:15:33.514 --> 00:15:33.624 Hutch Hutchinson: Well, 00:15:33.624 --> 00:15:34.434 it's quite warm. 00:15:34.434 --> 00:15:35.304 We're gonna give you that too. 00:15:35.304 --> 00:15:35.754 Jethro. 00:15:35.959 --> 00:15:37.254 So, so here's the deal. 00:15:37.434 --> 00:15:39.714 What you just said is gold, and here's why. 00:15:40.104 --> 00:15:41.184 Here's why. 00:15:41.244 --> 00:15:44.964 Owning your own life insurance policy is better. 00:15:45.789 --> 00:15:49.389 Not only from a numerical standpoint, we can calculate that, 00:15:49.869 --> 00:15:51.309 but you brought up something else. 00:15:51.669 --> 00:15:54.639 What happens if you check the 50% box? 00:15:54.639 --> 00:15:56.229 You never heard this podcast. 00:15:56.439 --> 00:16:00.519 You didn't know us, you and your wife constantly check the 50% box to 00:16:00.519 --> 00:16:02.019 make sure that she's taken care of. 00:16:02.319 --> 00:16:07.179 And the day after you retire, you're driving off on vacation, and you get 00:16:07.179 --> 00:16:09.669 into a car wreck and you both die. 00:16:09.879 --> 00:16:10.659 How much do your kids 00:16:10.719 --> 00:16:11.849 jethro-host176_1_06-17-2024_143640: Well, they don't get anything. 00:16:12.149 --> 00:16:15.869 Hutch Hutchinson: All that money, all that equity that you paid in and was 00:16:15.869 --> 00:16:19.079 contributed on your behalf is now gone. 00:16:19.859 --> 00:16:20.690 So it's not gone. 00:16:20.759 --> 00:16:23.399 It just gets disseminated amongst the other educators. 00:16:23.579 --> 00:16:27.269 It's kinda like the old Roman soldier, this is how life insurance was started. 00:16:27.599 --> 00:16:31.949 A bunch of Roman soldiers were going off to battle and one of the Ys went around 00:16:31.949 --> 00:16:35.909 with a cup and everybody threw a coin in the cup and whoever's husbands didn't 00:16:35.909 --> 00:16:38.129 come back from war split up the cup. 00:16:38.474 --> 00:16:42.104 That's the origins of life insurance, and that's basically what happens 00:16:42.104 --> 00:16:44.204 when you choose the 50% box. 00:16:44.324 --> 00:16:47.684 But let's just say on the other hand, you listen to this podcast, 00:16:47.834 --> 00:16:49.364 you did some calculations. 00:16:49.514 --> 00:16:52.784 You knew that your wife would get, or your wife or husband would get 00:16:52.789 --> 00:16:56.114 the after the same as the 50% box. 00:16:56.384 --> 00:16:59.893 But you could take the a hundred percent box and let's just say you did it early 00:16:59.984 --> 00:17:03.284 enough to where your policy's totally paid up by the time your retirement. 00:17:03.284 --> 00:17:06.914 So you don't have even have a bill, but then you go off on vacation. 00:17:07.114 --> 00:17:08.333 You die that first day. 00:17:08.854 --> 00:17:11.854 So you wa you die, your spouse dies. 00:17:11.854 --> 00:17:15.334 She's the primary beneficiary who's the secondary beneficiary 00:17:15.334 --> 00:17:16.774 is gonna be on that life insurance 00:17:17.074 --> 00:17:18.064 jethro-host176_1_06-17-2024_143640: Probably your kids 00:17:18.264 --> 00:17:19.194 Hutch Hutchinson: So would they get something? 00:17:19.494 --> 00:17:21.264 jethro-host176_1_06-17-2024_143640: if through the life insurance policy, 00:17:21.264 --> 00:17:22.479 but not through the pension still. 00:17:23.544 --> 00:17:24.084 Hutch Hutchinson: That's right. 00:17:25.164 --> 00:17:25.494 Yeah. 00:17:25.694 --> 00:17:28.424 There's only four possible things that can happen. 00:17:29.534 --> 00:17:32.144 So after you go in, in whatever box you're gonna check. 00:17:32.159 --> 00:17:33.089 It doesn't matter. 00:17:33.089 --> 00:17:36.659 Like let's not even talk about a hundred percent, 75, 50% box. 00:17:36.839 --> 00:17:40.109 Whatever box you check, there's only four possible things that could happen. 00:17:40.309 --> 00:17:43.429 You and your spouse can both live to life expectancy. 00:17:43.939 --> 00:17:46.669 That's the most common and the best possible outcome. 00:17:47.149 --> 00:17:51.139 So if both you and your spouse live to life expectancy, would you 00:17:51.139 --> 00:17:53.999 have been better off checking the a hundred percent box, the 50% box, 00:17:54.299 --> 00:17:55.279 jethro-host176_1_06-17-2024_143640: hundred percent for sure. 00:17:56.866 --> 00:18:00.101 Hutch Hutchinson: How about this, and this depends on jurisdiction. 00:18:01.296 --> 00:18:05.681 You check the 50% box to make sure, in this case, we'll just say your 00:18:05.686 --> 00:18:08.831 wife, Jethro, your wife is protected. 00:18:09.026 --> 00:18:10.631 You check the 50% box. 00:18:10.831 --> 00:18:14.421 She goes on a girl's trip, and then she dies. 00:18:14.481 --> 00:18:16.581 The day after you check the 50% box. 00:18:17.721 --> 00:18:21.261 There are some jurisdictions that will let you choose a new beneficiary. 00:18:21.461 --> 00:18:22.601 Many of them don't. 00:18:22.671 --> 00:18:24.711 You just kind of lost those coins to the tin 00:18:24.786 --> 00:18:24.946 jethro-host176_1_06-17-2024_143640: Yeah. 00:18:25.791 --> 00:18:26.181 Hutch Hutchinson: Right? 00:18:26.811 --> 00:18:31.701 So if you check the 50% box and then your wife dies early, your beneficiary, 00:18:32.181 --> 00:18:34.361 would you have been better off checking the a hundred percent box? 00:18:34.661 --> 00:18:34.721 jethro-host176_1_06-17-2024_143640: Yeah. 00:18:35.021 --> 00:18:35.371 Hutch Hutchinson: Yeah. 00:18:35.571 --> 00:18:39.321 The other one we talked about is both you and your spouse di early. 00:18:40.086 --> 00:18:42.816 That's the real risk of not checking. 00:18:43.002 --> 00:18:47.396 That's the risk that's there, but we can actually calculate it to 00:18:47.401 --> 00:18:51.686 where we make sure that everybody's taken care of including the kids. 00:18:51.686 --> 00:18:52.646 And that's not the risk. 00:18:52.646 --> 00:18:57.386 The risk is with this last one, the risk is you check. 00:18:57.806 --> 00:19:01.076 It's a hundred percent box, but then you die early and your 00:19:01.076 --> 00:19:02.666 wife's less left with nothing. 00:19:03.236 --> 00:19:07.166 So we can calculate it to where we make sure the policy will do 00:19:07.171 --> 00:19:09.376 at least, that, at least that. 00:19:09.436 --> 00:19:13.296 And the fulcrum point, the point of testing is the day after 00:19:13.296 --> 00:19:17.286 you retire, what's great is every year you live past that. 00:19:18.366 --> 00:19:22.716 Now you actually have too much death benefit because you don't 00:19:22.816 --> 00:19:24.256 your wife isn't gonna live as long. 00:19:24.931 --> 00:19:29.221 Meaning if you died five years after you took out the life insurance 00:19:29.221 --> 00:19:33.601 policy, the amount she needs in an annuity five years later when she's 00:19:33.601 --> 00:19:37.831 five years closer to the grave, we don't have to put as much an annuity. 00:19:37.908 --> 00:19:43.531 So therefore you don't need as much death benefit, which means you as the educator 00:19:43.531 --> 00:19:47.551 with the pension, get to spend a little bit of your cash value along the way as 00:19:47.551 --> 00:19:51.661 a supplement, which will lower the death benefit, but you don't need as much. 00:19:52.246 --> 00:19:55.816 Every year you live, you don't need as much death benefit to make sure that the 00:19:55.816 --> 00:19:58.276 50% option is provided for your spouse. 00:19:58.516 --> 00:19:59.176 Does that make sense? 00:19:59.226 --> 00:20:00.126 That was confusing a little 00:20:00.171 --> 00:20:01.476 jethro-host176_1_06-17-2024_143640: Yeah, so, so 00:20:01.476 --> 00:20:02.731 the question then is. 00:20:03.061 --> 00:20:08.411 If you have the life insurance policy, then your heirs, your kids 00:20:08.411 --> 00:20:12.311 are taken care of, regardless of which of those scenarios happens. 00:20:12.341 --> 00:20:12.761 Right. 00:20:13.061 --> 00:20:13.441 Hutch Hutchinson: True. 00:20:13.561 --> 00:20:17.116 Going back to the four options the, one of the major benefits of 00:20:17.116 --> 00:20:20.986 this situation is you get to pick and choose your beneficiary, and 00:20:20.986 --> 00:20:22.846 you get to change it as you go. 00:20:23.791 --> 00:20:28.591 So obviously if you ex you, when you have a life insurance policy, the more 00:20:28.591 --> 00:20:31.531 you spend with the cash value, the less death benefits there for your wife. 00:20:31.561 --> 00:20:34.261 But as you get older, she doesn't need as much death benefit. 00:20:34.591 --> 00:20:37.621 And then obviously if you die or whenever you die and she gets the 00:20:37.621 --> 00:20:38.791 death benefit, that's for her. 00:20:38.791 --> 00:20:40.681 But if both of you die at the same time. 00:20:41.071 --> 00:20:42.691 Yes, the kids are taken care of. 00:20:42.691 --> 00:20:43.951 They're just next in line. 00:20:44.131 --> 00:20:48.031 You're not sharing it with a bunch of soldiers in the tin cup of the pension. 00:20:48.271 --> 00:20:53.671 You have your own private life insurance policy that goes to your heirs based 00:20:53.671 --> 00:20:55.771 on your health, your premium at 00:20:55.936 --> 00:20:56.326 jethro-host176_1_06-17-2024_143640: Yeah. 00:20:56.526 --> 00:20:56.946 Okay. 00:20:57.396 --> 00:21:02.046 So ha, having this set up then makes it so that you have. 00:21:02.601 --> 00:21:07.971 Better options at your retirement because then you get to decide how 00:21:07.971 --> 00:21:14.151 you want to do that, and you may still choose to do the 50% because you, even 00:21:14.151 --> 00:21:17.451 though you feel like you're taking care of, you may want your wife or 00:21:17.456 --> 00:21:21.921 your spouse to have even more money after you're gone for whatever reason. 00:21:22.101 --> 00:21:22.461 Right? 00:21:22.461 --> 00:21:24.171 So, but you get to choose that. 00:21:24.201 --> 00:21:26.901 Whereas otherwise you just you have. 00:21:27.291 --> 00:21:30.051 Hutch Hutchinson: You painted yourself into a corner, you get to that meaning 00:21:30.051 --> 00:21:31.371 you painted yourself into a corner. 00:21:31.371 --> 00:21:32.481 That's the only option. 00:21:32.751 --> 00:21:35.836 And we get the bulletins from the stirs and it's like, oh, well 00:21:35.836 --> 00:21:38.656 we changed the assumptions with inflation and everything else. 00:21:38.886 --> 00:21:39.996 You're totally at the mercy. 00:21:39.996 --> 00:21:40.806 And so I think it, I. 00:21:41.346 --> 00:21:44.106 When you and I were talking about your podcast when I thought this might 00:21:44.106 --> 00:21:47.736 resonate with your listener, it seems like what you're teaching them is to take 00:21:47.736 --> 00:21:49.746 more control of their situation, right? 00:21:50.136 --> 00:21:55.416 Their educators, their specialty is in educating children, but to educate 00:21:55.416 --> 00:21:57.726 yourself about your own money options. 00:21:57.726 --> 00:22:00.426 Not to the point where it's like another full-time job, but this 00:22:00.426 --> 00:22:03.276 is something that you can do to exactly give you that, to give you 00:22:03.276 --> 00:22:05.766 more control and more optionality. 00:22:06.651 --> 00:22:08.301 For when you go to check that box. 00:22:08.301 --> 00:22:12.531 Not to mention as you're paying for this life insurance policy, there is actually 00:22:12.531 --> 00:22:16.131 cash value that builds up along the way that you can use for whatever you need, 00:22:16.551 --> 00:22:16.941 right? 00:22:17.331 --> 00:22:21.268 If the bottom falls out of the real estate market and there's right opportunity 00:22:21.441 --> 00:22:25.371 abound, or now all of a sudden some of the stocks that you were looking at valuation 00:22:25.371 --> 00:22:30.081 just got cut in half because you know the sky's falling and right, and you wanna 00:22:30.081 --> 00:22:34.551 own these companies, you can actually use the cash value in your policy. 00:22:35.106 --> 00:22:36.396 Right to acquire some of these 00:22:36.696 --> 00:22:38.631 jethro-host176_1_06-17-2024_143640: Okay, so, so, that I think is gonna be 00:22:38.631 --> 00:22:42.771 a question for our next conversation, but I have another question 00:22:42.891 --> 00:22:44.811 about this building up to it. 00:22:45.401 --> 00:22:50.891 what you are talking about is essentially going to require me to have another 00:22:50.891 --> 00:22:55.391 payment that I'm putting something into over the course of my career. 00:22:55.481 --> 00:22:55.901 Right? 00:22:56.321 --> 00:22:59.081 So what does that look like and. 00:23:00.221 --> 00:23:05.051 Like we hinted at that a little bit, but you can use that money for 00:23:05.051 --> 00:23:06.731 other things leading up to that. 00:23:06.731 --> 00:23:08.177 But what does that look like? 00:23:08.261 --> 00:23:09.671 How much is that going to be? 00:23:09.671 --> 00:23:14.201 Because my tour's contribution that the district pays is typically 00:23:14.206 --> 00:23:18.871 like seven to 15% depending on where you're at in the system, 00:23:18.871 --> 00:23:19.671 what your level is. 00:23:19.971 --> 00:23:20.621 Hutch Hutchinson: it's a big number. 00:23:21.046 --> 00:23:22.101 So let's talk about that. 00:23:23.206 --> 00:23:25.216 Where nobody likes a new bill. 00:23:25.636 --> 00:23:28.576 And so whenever people hear about any kind of insurance, they 00:23:28.576 --> 00:23:31.786 just automatically equate it to like, I don't need another bill. 00:23:32.596 --> 00:23:32.986 Right? 00:23:33.226 --> 00:23:34.666 I only got so much coming in. 00:23:34.816 --> 00:23:37.456 I got my own kids I want to put through college, right? 00:23:37.486 --> 00:23:38.326 We wanna do stuff. 00:23:38.331 --> 00:23:39.466 We want to go on vacation. 00:23:39.796 --> 00:23:41.806 I'm not saying to just stop your life. 00:23:42.106 --> 00:23:48.526 However, a strategic redeployment of cash flows is possible. 00:23:48.526 --> 00:23:49.846 And what I mean by that is. 00:23:50.686 --> 00:23:54.706 A lot of money is passing through everybody's hands, six figures a year 00:23:55.126 --> 00:23:59.586 through Everybody on this call is just passing through our hands and where the 00:23:59.586 --> 00:24:02.766 infinite banking comes into play, and I realize we'll talk more about this, 00:24:03.096 --> 00:24:08.076 is you can redeploy some of the money that you're normally just spending for 00:24:08.076 --> 00:24:12.426 your predictable inflows and outflows and pump it through a policy designed to 00:24:12.426 --> 00:24:17.766 be your own bank, and it will naturally have its own velocity and momentum. 00:24:18.411 --> 00:24:24.501 It is gonna require you to carve off a certain amount of money and you 00:24:24.501 --> 00:24:29.391 get to choose what that is where we typically help find it for people. 00:24:29.391 --> 00:24:35.721 Like some of the places we find people, money is places like this when 00:24:35.721 --> 00:24:38.121 people are overpaying on mortgages. 00:24:38.321 --> 00:24:39.791 That are 3%. 00:24:39.881 --> 00:24:42.731 I understand if you're overpaying a mortgage that's seven or 8%, 00:24:43.331 --> 00:24:48.011 but overpaying a mortgage that's 3% in spite of what you've heard, 00:24:48.011 --> 00:24:51.611 has not been tested, measured mathematically that's a good idea. 00:24:52.151 --> 00:24:56.201 So any overpayments of mortgages at that low money, it's almost 00:24:56.201 --> 00:24:57.221 like getting free money. 00:24:57.551 --> 00:25:01.631 You're borrowing below inflation and if the rate of return that you can get 00:25:01.631 --> 00:25:03.761 on this policy, just the cash value. 00:25:04.406 --> 00:25:09.086 Long term can beat the hurdle rate for the debt you're trying to knock out. 00:25:09.626 --> 00:25:12.926 This is an easy place to redeploy money that's really not serving you 00:25:13.002 --> 00:25:17.186 because as soon as you overpay the mortgage, it's out of your control. 00:25:17.386 --> 00:25:21.016 If you want it back from the bank, they have to give you some other kind of 00:25:21.031 --> 00:25:21.391 jethro-host176_1_06-17-2024_143640: Right. 00:25:22.096 --> 00:25:24.046 Hutch Hutchinson: I just got approved for a HELOC today. 00:25:24.166 --> 00:25:25.066 They approved me today. 00:25:25.066 --> 00:25:29.296 But if the sky started falling and I wanted to buy stocks when they lost 30 or 00:25:29.296 --> 00:25:31.636 50%, that's usually the time they don't 00:25:31.731 --> 00:25:32.956 jethro-host176_1_06-17-2024_143640: Yeah, exactly. 00:25:33.076 --> 00:25:33.406 Yep. 00:25:33.956 --> 00:25:35.156 Hutch Hutchinson: So that's one place. 00:25:35.576 --> 00:25:40.466 Another place that's really easy is when they're contributing 00:25:40.538 --> 00:25:43.346 to a 4 0 3 B or a 4 57. 00:25:44.471 --> 00:25:45.701 What's that money for? 00:25:45.761 --> 00:25:49.811 Why would your audience be contributing to a 4 0 3 B or 4 57? 00:25:49.811 --> 00:25:50.371 For what purpose? 00:25:50.671 --> 00:25:52.511 jethro-host176_1_06-17-2024_143640: That's because we don't have the pension. 00:25:52.901 --> 00:25:55.691 Or we want an additional retirement support. 00:25:55.991 --> 00:25:56.431 Hutch Hutchinson: That's it. 00:25:56.641 --> 00:25:59.791 So in, in my wife's district, they call it pension two. 00:26:00.871 --> 00:26:05.611 You have your pension, but they, you con you, they advocate and suggest that you 00:26:05.611 --> 00:26:11.701 should contribute to a 4 0 3 B and or 4 57 for supplemental retirement income. 00:26:12.601 --> 00:26:13.711 Well wait a second. 00:26:14.009 --> 00:26:15.451 Well, let's just think about this for a moment. 00:26:16.051 --> 00:26:18.901 To me, that's almost like having one foot on the gas and one foot on the 00:26:18.901 --> 00:26:22.801 brakes because the foot on the gas. 00:26:23.926 --> 00:26:29.146 The foot on the gas is putting money in a 4 0 3, 4 0 3 B, and 4 57 00:26:29.146 --> 00:26:30.646 to get extra money in retirement. 00:26:31.186 --> 00:26:34.456 But then if you have a strategy that's going to cause you to paint 00:26:34.456 --> 00:26:38.656 yourself in a corner and check the 50% box that lowers your pension, 00:26:39.226 --> 00:26:42.046 that's the foot on the brakes that they don't even know they have on it. 00:26:42.826 --> 00:26:47.476 And so if the purpose of whatever cash flow, whatever financial energy 00:26:48.537 --> 00:26:52.666 you're pumping into a 4 0 3 B, 4 57 is to enhance your pension. 00:26:52.866 --> 00:26:56.466 We don't know what the stock market's gonna do between now and then it will 00:26:56.466 --> 00:26:59.047 probably enhance your pension to some degree, but we don't know how much. 00:26:59.526 --> 00:27:05.016 But we can predictably say, let's just make sure you get 100% of your pension. 00:27:05.256 --> 00:27:09.726 Or even if you go from 50 to 75, because maybe you can't afford a 00:27:09.726 --> 00:27:13.176 policy big enough for the a hundred, but you can get from 50 to 75. 00:27:13.956 --> 00:27:17.066 Isn't that a better way to get supplemental retirement 00:27:17.366 --> 00:27:18.236 jethro-host176_1_06-17-2024_143640: Yeah, for sure. 00:27:19.161 --> 00:27:24.386 So, so let's talk about that cost piece because you, there's 00:27:24.386 --> 00:27:25.981 gonna be the cost to it and so. 00:27:26.181 --> 00:27:29.571 Do you need to be super wealthy to start this? 00:27:29.571 --> 00:27:34.451 Like, can you start with a lower insurance policy and maybe it's just, 00:27:34.541 --> 00:27:38.501 it's not even to the 50% level, so you still have to start with 50%. 00:27:38.891 --> 00:27:40.541 Can you adjust it over time? 00:27:40.541 --> 00:27:44.181 Is it something that you can say, when I'm a first year teacher, I can 00:27:44.181 --> 00:27:48.711 do a policy that's this big and then after 10 years of teaching, I can 00:27:48.831 --> 00:27:50.301 change the policy and make it bigger? 00:27:50.351 --> 00:27:53.201 Can that kind of stuff happen until you start figuring out. 00:27:53.771 --> 00:27:55.061 How you can actually afford it. 00:27:55.261 --> 00:27:56.391 Hutch Hutchinson: It's a great, it's a great question. 00:27:56.391 --> 00:27:57.231 There's a lot 00:27:57.231 --> 00:27:58.751 in there, but Let's hit 'em all. 00:27:59.091 --> 00:28:04.596 So the truth of the matter is, once you start any kind of permanent 00:28:04.656 --> 00:28:10.116 insurance policy, you can't increase it without underwriting again. 00:28:10.741 --> 00:28:10.881 That 00:28:10.881 --> 00:28:11.101 means 00:28:11.101 --> 00:28:12.981 like getting medically tested and all that stuff. 00:28:12.981 --> 00:28:16.761 And by the way, thankfully, like a ai, AI is all the buzz these days. 00:28:17.126 --> 00:28:21.801 There are multiple companies now that are doing AI underwriting that if you're 00:28:21.801 --> 00:28:26.751 pretty healthy and aren't on prescriptions and everything else, a lot of times 00:28:26.756 --> 00:28:28.941 you fill out a DocuSign application. 00:28:29.286 --> 00:28:33.876 For 15 minutes, they, you give them permission to go scan your health records, 00:28:33.876 --> 00:28:36.996 scan your prescription record, scan your driving record, and they go out 00:28:36.996 --> 00:28:41.496 to the web and like we're getting like 24 hour approvals at the best rating. 00:28:42.126 --> 00:28:43.896 So you may not even need that. 00:28:44.166 --> 00:28:50.106 So the answer is you cannot increase it without re-underwriting. 00:28:50.286 --> 00:28:52.026 However, we have workarounds for that. 00:28:52.446 --> 00:28:55.746 So most people know what a term insurance policy is. 00:28:56.106 --> 00:28:58.056 Have you ever heard of convertible term 00:28:58.061 --> 00:28:58.401 insurance? 00:28:58.701 --> 00:29:00.711 jethro-host176_1_06-17-2024_143640: of it, but I don't totally understand it. 00:29:01.641 --> 00:29:02.691 Hutch Hutchinson: Yeah it's pretty simple. 00:29:02.691 --> 00:29:06.110 Like I liken it to renting with the option to buy. 00:29:06.166 --> 00:29:09.110 First of all, when you have term insurance coverage, that's like, 00:29:09.256 --> 00:29:10.576 it's like a renting, right? 00:29:10.576 --> 00:29:12.196 You're renting coverage for 10 years. 00:29:12.196 --> 00:29:14.236 You're renting coverage for 20 years, right? 00:29:14.241 --> 00:29:17.086 And you have this rental agreement, whatever it is, when as long as you pay 00:29:17.086 --> 00:29:19.126 rent, you have coverage, you stop paying. 00:29:19.516 --> 00:29:21.196 You you get evicted, right? 00:29:21.650 --> 00:29:23.746 And when the lease is up, you're done. 00:29:23.746 --> 00:29:25.456 Unless you renegotiate a new lease. 00:29:25.726 --> 00:29:30.586 Obviously with life insurance, the older you are, the terms will be worse, right? 00:29:30.946 --> 00:29:32.236 You're not as good of a tenant. 00:29:33.106 --> 00:29:34.246 It's a life insurance company. 00:29:34.456 --> 00:29:38.056 And when you buy whole life insurance, it's almost like buying versus renting. 00:29:38.061 --> 00:29:40.006 Now you've bought. 00:29:40.441 --> 00:29:44.251 The property you've bought the right to that million dollar death benefit or 00:29:44.251 --> 00:29:46.621 $500,000 death benefit or whatever it is. 00:29:46.801 --> 00:29:49.531 And again, your cash value accrues equity over time. 00:29:50.041 --> 00:29:53.401 So just going back to how we use convertible term. 00:29:53.701 --> 00:29:57.871 Convertible term is renting with the option to buy. 00:29:58.531 --> 00:30:02.011 So there are such contracts out there, like in the real estate market, you can 00:30:02.011 --> 00:30:04.171 rent or lease with the option to buy. 00:30:04.501 --> 00:30:06.271 You can actually do that with convertible terms. 00:30:06.271 --> 00:30:09.451 So most of your listeners probably have a term policy. 00:30:09.451 --> 00:30:12.301 They have a million dollar term policy or $2 million term policy. 00:30:12.751 --> 00:30:17.011 We can refinance that term policy or just add on to it. 00:30:17.341 --> 00:30:18.526 And that not only gives them. 00:30:19.276 --> 00:30:23.807 More coverage that just temporary rental coverage now, but whatever 00:30:23.836 --> 00:30:28.606 rating they get on that term policy, they can actually convert that to 00:30:28.611 --> 00:30:30.766 permanent without having to retest. 00:30:31.846 --> 00:30:34.816 The pricing will adjust according to the age of that time. 00:30:34.816 --> 00:30:38.146 But that gives them the guaranteed right to lock it. 00:30:38.146 --> 00:30:42.016 They get the best rating, they can lock that in and whenever they get a raise, so 00:30:42.016 --> 00:30:46.336 like my wife just got like an 11% raise 'cause they didn't get raises for like the 00:30:46.336 --> 00:30:48.016 last three or four years and the union. 00:30:48.286 --> 00:30:50.446 So when they get something like that and all of a sudden there's 00:30:50.446 --> 00:30:53.866 extra cash flow they can take whatever convertible term they have. 00:30:54.106 --> 00:30:57.346 And with the convertible term, it's almost like a plot of land. 00:30:57.406 --> 00:31:00.016 You can bifurcate the land, you can carve off a piece of it. 00:31:00.346 --> 00:31:02.476 Convert some of it and keep the rest as term. 00:31:02.956 --> 00:31:05.086 jethro-host176_1_06-17-2024_143640: So the reason why I asked that question 00:31:05.086 --> 00:31:09.981 is that it, my impression has been that you have to make this decision. 00:31:10.801 --> 00:31:16.141 Early on and then you're stuck into it for the rest of your life, unless you want to 00:31:16.141 --> 00:31:20.821 go through this big hassle and it sounds like there is a way to structure it so 00:31:20.821 --> 00:31:25.561 that you make the decision early on and then you work towards that throughout your 00:31:25.561 --> 00:31:30.811 life and you adjust as time goes on rather than saying, well, I made the choice 00:31:30.811 --> 00:31:35.521 when I was 21 and my first year teaching, and now like, I'm just stuck with it. 00:31:35.581 --> 00:31:37.591 And that's no good for anybody. 00:31:37.891 --> 00:31:38.971 Hutch Hutchinson: So you're right. 00:31:38.971 --> 00:31:42.091 The misconception you had is probably pretty common. 00:31:42.091 --> 00:31:46.021 Probably a lot of your listeners have the same mis misconception when you're 00:31:46.021 --> 00:31:47.611 working with knowledgeable agents. 00:31:47.731 --> 00:31:50.581 There's a way to structure a combination of products to where it 00:31:50.581 --> 00:31:54.931 gives you, again, a lot of optionality and it, you can layer into it. 00:31:55.561 --> 00:31:57.601 You can layer into it as cashflow allows. 00:31:58.276 --> 00:31:58.566 jethro-host176_1_06-17-2024_143640: Yeah. 00:31:58.766 --> 00:31:59.516 I like that. 00:31:59.756 --> 00:32:03.026 Okay, so we've got a lot that we've talked about. 00:32:03.026 --> 00:32:06.954 We've got a lot to think about in preparation for another conversation. 00:32:07.556 --> 00:32:12.566 One of the things that we wanna talk about next time is why making this decision 00:32:12.596 --> 00:32:18.236 allows you a benefit later, but then also allows you to do things with that money. 00:32:19.091 --> 00:32:22.631 As you're getting towards retirement, rather than waiting to have 00:32:22.631 --> 00:32:24.491 access to it when you do retire. 00:32:24.912 --> 00:32:29.631 Now, we all know with our retirement plans, we can't access 'em until 00:32:29.631 --> 00:32:34.311 we are, I think it's 57 and a half at the very early, 59 and a half, 00:32:34.311 --> 00:32:34.821 thank you. 00:32:35.211 --> 00:32:35.721 59. 00:32:35.726 --> 00:32:37.221 and a half at the very earliest. 00:32:37.461 --> 00:32:41.901 And so if you need access to new money before then, for whatever 00:32:41.901 --> 00:32:44.441 reason you can't touch any. 00:32:44.936 --> 00:32:46.106 Retirement policies. 00:32:46.106 --> 00:32:51.086 So, so we're gonna talk about next time how to access that money that 00:32:51.356 --> 00:32:55.916 that will benefit you later before you get to that point, so you don't have 00:32:55.916 --> 00:32:57.536 to wait till you're 59 and a half. 00:32:57.856 --> 00:33:01.746 That's more about the infinite banking type stuff that that you teach about. 00:33:01.776 --> 00:33:05.106 So where can people go to learn more about what we've talked about 00:33:05.106 --> 00:33:06.906 today, like maximizing the pension. 00:33:07.206 --> 00:33:07.616 Hutch Hutchinson: Sure. 00:33:07.736 --> 00:33:10.286 So I have a video that's been on YouTube for a long time. 00:33:10.286 --> 00:33:13.676 When you look at the cover, it's actually a picture of my wife with her a hundred 00:33:13.681 --> 00:33:16.736 percent, 75, 50% option right there. 00:33:16.866 --> 00:33:22.716 If you go to banking truce.com/pension or pensions, I'm gonna have that redirect. 00:33:23.021 --> 00:33:24.011 Straight to that video. 00:33:24.011 --> 00:33:26.441 It's like a little Easter egg because it doesn't necessarily 00:33:26.441 --> 00:33:28.151 have to do with infinite banking. 00:33:28.151 --> 00:33:32.891 It's really a niche strategy amongst educators that has been around forever. 00:33:32.951 --> 00:33:36.251 Like if you just look up pension maximization online, you'll see 00:33:36.251 --> 00:33:37.811 it's been ar been happening forever. 00:33:38.021 --> 00:33:39.426 But again, it just makes sense. 00:33:39.426 --> 00:33:43.206 So it's like a little 11 minute video that I made and I think. 00:33:43.806 --> 00:33:48.576 Given this podcast, it, I realize how many people are in the dark 00:33:48.581 --> 00:33:51.216 about this, and since then, our clients have not, excuse me. 00:33:51.276 --> 00:33:54.876 Our agents have not only helped teachers, principals. 00:33:55.641 --> 00:34:00.411 Firemen, police officers, FBI agents we've helped a lot of people that have 00:34:00.411 --> 00:34:03.831 this similar thing, but it's really just a niche thing for people with 00:34:03.831 --> 00:34:07.841 government pensions and it is the crux, the core of your retirement. 00:34:07.841 --> 00:34:08.141 So. 00:34:08.551 --> 00:34:09.906 Putting the most energy. 00:34:09.906 --> 00:34:10.836 I think it's great learning. 00:34:10.836 --> 00:34:13.806 The option strategy and the stuff you're teaching 'em, I think will really help. 00:34:13.836 --> 00:34:14.946 I enjoy it too. 00:34:15.126 --> 00:34:20.016 It's fun, but making sure that the base, the core part of their retirement is 00:34:20.016 --> 00:34:25.056 increased on a guaranteed basis, I think is so important Where it'll help you to 00:34:25.056 --> 00:34:29.496 look at the video just to understand the concept where the rubber mill, excuse 00:34:29.496 --> 00:34:33.846 me, where the rubber really meets the road is to have your numbers modeled out. 00:34:33.846 --> 00:34:37.176 And if you go to banking truce.com/schedule. 00:34:37.726 --> 00:34:42.136 You can actually put something in there or on banking truth.com/pension. 00:34:42.316 --> 00:34:47.116 There'll be a link to schedule and to really do this well, it is definitely 00:34:47.116 --> 00:34:52.916 more science than art where we not only need the pension numbers, but we're gonna 00:34:52.916 --> 00:34:57.086 stress test that and cross-reference that with not only insurance rates, 00:34:57.326 --> 00:35:01.976 but future annuity rates on the age of your surviving spouse to really stress 00:35:01.976 --> 00:35:04.076 test and to make sure at no point. 00:35:04.886 --> 00:35:08.066 Are you worse off than if you check the 50% option? 00:35:08.066 --> 00:35:12.326 What most people find though, is that not only are they protected at least to 00:35:12.326 --> 00:35:16.766 the level of that 50% option, but that every year they live, they have all this 00:35:16.766 --> 00:35:21.836 equity in the cash value that yes, you can use along the way now, but when you 00:35:21.836 --> 00:35:25.256 retire, what's so powerful about that cash value, and I don't know if you knew 00:35:25.256 --> 00:35:27.746 this Jethro, but it's actually tax free. 00:35:28.316 --> 00:35:31.706 You can take it from life insurance tax free, almost like a Roth. 00:35:32.351 --> 00:35:36.851 And it's because life insurance is afforded special tax treatment because 00:35:36.851 --> 00:35:38.831 they do so much for widows and orphans. 00:35:39.491 --> 00:35:43.271 The government basically incentivizes that people put money into life 00:35:43.271 --> 00:35:46.571 insurance policies that don't go away because it does provide a 00:35:46.576 --> 00:35:49.841 social good that's less widows and orphans they need to take care of. 00:35:49.841 --> 00:35:54.071 So they give you this ancillary Roth like benefit in your cash value. 00:35:54.161 --> 00:35:58.901 And why that's so important is every educator that's listening here, all their 00:35:58.906 --> 00:36:01.331 pensions are gonna be fully taxable. 00:36:02.501 --> 00:36:06.131 Fully susceptible to future tax changes. 00:36:07.241 --> 00:36:10.826 I don't know about you, but I could think of a reason or two or 35 00:36:10.826 --> 00:36:14.266 trillion, and I'm talking trillion dollars in national debt. 00:36:14.266 --> 00:36:14.416 Why? 00:36:14.416 --> 00:36:17.416 Taxes need to go up for everybody and the money that's in your life. 00:36:17.416 --> 00:36:18.856 Insurance will be immune from that. 00:36:18.856 --> 00:36:21.996 So having a retirement supplement is important, but having a 00:36:21.996 --> 00:36:25.386 retirement supplement that's also tax free is also very 00:36:25.566 --> 00:36:26.586 jethro-host176_1_06-17-2024_143640: Yeah, very good. 00:36:26.591 --> 00:36:28.686 So two actions from today. 00:36:28.686 --> 00:36:31.596 Number one, banking truce.com/pension. 00:36:31.866 --> 00:36:35.201 Go watch that video so you can see what it all looks like. 00:36:35.406 --> 00:36:40.656 And then banking truce.com/schedule to model it out for yourself 00:36:40.746 --> 00:36:42.936 and see what it could look like. 00:36:42.966 --> 00:36:47.236 And, I think if you are interested in this, if this sounds intriguing, 00:36:47.596 --> 00:36:49.546 definitely go do both of those things. 00:36:49.546 --> 00:36:54.656 And if you have more questions send me an email mention me on social 00:36:54.656 --> 00:36:57.146 media, reach out to Hutch as well. 00:36:57.456 --> 00:36:59.831 Hutch, thanks so much for being part of the show today. 00:37:00.006 --> 00:37:00.846 I really appreciate it. 00:37:01.046 --> 00:37:01.676 Hutch Hutchinson: Was great. 00:37:01.676 --> 00:37:02.396 Thanks for having me