Dave Ramsey's HEATED Debate with Infinite Banker - My Response 

The question is .. Knowing what you know about your dad.. What are you doing? Have you tested this theory in your lifetime and are you now on track to "easily have 4x-5x" more value than your dad did?. Fact is the majority of term insurance policies never pay out (especially to insureds age 80+) and you have not factored taxes, losses, inflation, fraud, litigation, etc...into your estimates of invested values. How many people lost money to FTX, Emron, Bernie Maddoff, AMC (just to name a few) who never recovered their life saving? IF your Dad's policy was a paid cash value life policy and remained in forced for his lifetime..then either he got to use the money or the money was paid out to his beneficiary. By the way if it was a PAID UP Policy, he also did not pay premiums from the time it was paid up (typically 10-20 years).. and could have also redirected those funds into investment areas, such as mutual funds too. A Term insurance is NEVER PAID UP and just gets more expensive as you get older. That is why eventually most people drop it older ages mainly due to the expense of renewing at much higher premiums.(not because they are suddenly rich and can self fund...because their investments are so substantial). Even if you are wealthly, it is very likely a better business decision to pass the perils of life on to insurance companies rather than self fund those events. Economics 101 will teach you to use OPM & Leverage for cash flow...which leaves your capital available for business & investing opportunities. Lastly , there are generally no income taxes on life insurance death benefits and properly structured loans taken against the policy. So sorry you and possibly your father were not presented with the ways to use his policy (while he was alive) as an addition financial tool for your family's benefit. Maybe you can be open and learn more about how it could benefit you and your family moving forward. It is not a one way or the other conversation. It IS a learn to use EVERY TOOL available discussion. You can have Mutual Funds, Stocks, Real Estate, Pension, CrytoCoins, Art, Precious Metals, a Business, and Cash Value + Term Life Insurance too. Hope this helps you.

Bingo - there is no optimal situation for these bogus policies for 99% of people

That completely depends on what he would have invested in.

@@renegadetherapper he literally could have left it in a savings account and did better. But for argument sake let's say he invested it in an S&P index fund. 5x easily.

@@KP-hi1om savings account only gets half a % if that. Whole Life insurance gets 4%. Insurance companies have never failed to pay a dividend in all its existence. And its tax free.

And the tax advantages.

If you research your mutual funds and diversify, then, on average, you will get a better rate of return with mutual funds. The stock market has been around over a 100 years. If some event comes along and destroys or changes that, that same event will destroy everything else too.

any S&P 500 mutual fund has an average annual return of 10% since inception. The stock market as a whole has had an 8% return in its over 100 year existence. So yea, rate of return is leaps and bounds better than a “paid up” life insurance policy.

That's all fine & dandy. I have multiple positions in the market myself, including mutual funds. But let it be known that No bank, No brokerage, No LLC or Corporation, No investment account will protect your money from a judgement (meaning a lawsuit or court order) like a whole life policy will. Even the IRS would have trouble getting anything from a policy. I personally know family businesses who have been ruined by ADA lawsuits and their Business entities, 401ks, 403b, even pensions were all cracked open in court and the spoils were dissected among the plaintiffs. The defendants LF policies were completely intact, untouchable.

@@clkouthe event need not take down the entire market. It can be a personal event, lawsuit, divorce etc. it may grow faster but it is more exposed to loss.

He made his money selling advice. If that is what you are looking to do, def listen to Dave. In investing in general…he is not the GOAT at all.

I feel bad for people with this overly simplistic mentality… as if rich people are always educated and never scam or dupe their audiences. Very naive mindset to have.

well put.

This was explained very well! Thanks for the comment!

Well said 👏🏽👏🏽👏🏽👏🏽

I'm soo new to this. I'm slowly but surely kind of understanding the pros and cons to whole life insurance/term life insurance policies. I have both and I'm trying to figure out what's the best fit for me and my budget. I can say this, everything is risky and we have to be careful who we listen to. As consumers, we have to do our own research and ask financial advisors to see what's best for your life situation. Sadly, I'm learning this later rather than sooner. That's what happens when you don't listen to the advice from your parents and try to do things your way blindly. You live and learn, right??😂😂😢😢

Start with Becoming Your Own Banker by Nelson Nash!@@lynf5562

It's worse. It never even exists.

I love the spending therapist term!

@@jeffreykamke the thing about it is I have never heard of a millionaire or billionaire say i built wealth using my insurance infinite banking strategy

@@HazardonerFTR I agree with you. I want to follow and duplicate what sucessful people have done. That's my issue.

well I think that going with your gut is always the right thing to do common sense is not so common everyone is different but for the most part if your talking about financial success try to get more skills for a high paying job live bellow your means and constantly buy stocks snp500 index etf or mutual funds overtime and buy real estate and pay it off early simple method but it works@@KP-hi1om

oh yeah and try to stay away from credit cards@@KP-hi1om

They’re actually really simple policies. Whatever agent or agents you spoke with were probably just bad agents. A good agent can explain the gist of it, benefits & risks, in simple terms, in under 5 minutes. And they SHOULD go over both the benefits & the risks with you. And who said anything about a vacation? The agent you spoke with has gotta be a bad apple. The main point of the cash value of the policy shouldn’t be to fund a vacation……. That’s not infinite banking. Sorry whoever you spoke with about this was such a scumbag!

But he's a Christian so it makes it all ok. Even though he's good a God complex around money and is condescending towards callers,

Once you've "graduated" from FPU (i.e. become fiscally responsible and obtained a positive cashflow), it's time to move on to greater masters. Dave's like a high school teacher that will help you get your GED, but that's the extent of his expertise.

but when you sell your house , Justin will take a good share . look out.

Investing in the s and p 500 index isn’t “risky” lol this is insurance salesmen propaganda and stupid. It averages 12% returns YoY since 2000 - including the huge downturns in 2008-09 and COVID. Are there down years? Yes, but if you long it you will make out exponentially better than a life policy lol why would you ever do that

Interest compounds

Whatever outstanding loan (and accusing interest) there might be would simply be deducted from the death benefit. The remaining death benefit is then paid out tax free to your beneficiaries.@@mrstinky2421

IULz = minute nterest on $ borrowed from urself - no taxation - u don't pay nterest on loan back, til death - IUL policy continuez 2 grow, azz u nvest ( or do whutever it iz, u lent urself $, 2 do. )

Not true. It's just endowing.

lol just making shit up now eh

@@admiralmurat2777 if you put in 50k of premiums but get a million at death you tell me.

@@DoctorMcFarlandStudios not so bro. When my dad died moms got the face value of his policy. Not face value plus what you paid into it. If you take out what he paid for decades the net was really about 62% of the face value.

@@KP-hi1om Not all insurance is created equal. For instance you could have a 15,000 policy but the premium could be such that you actually pay more than the 15k. That is pretty rare though. Insurance companies look at the actuary schedule and have a pretty good idea of how long people will live. The money paid in should be way less than the actual face value so if you paid 10k for term insurance but it bought you 500k of death benefit then who cares if you that you paid the 10k and technically didn't "get it back". No one said you get back the cash value. That is what the death benefit it for. Now for Whole Life Insurance through a Mutual company the cash value you get when putting in the premium can actually be borrowed against and paid back at your leisure or never paid back. At death the death benefit will be paid out minus the outstanding loan. Walt Disney used Whole Life insurance to fund Disney Land. Even Joe Biden puts money into Whole Life insurance because he knows regardless of when be dies he has a huge death benefit waiting for his family or he can borrow against it to fun deals in Ukraine :)

Not so fast, term is where you start when you’re young and in good health, so no matter what happens to you healthwise you can always convert it into a whole life policy. But too many people wait 20 years with no coverage then don’t qualify as well as they would’ve with term and what if you died in the first 10 years and your spouse lost the house? You need to talk with an independent and qualified agent to get the truth!! 😘

@@popgoestheweasel95 The goal is to accumulate as much whole (that is, permanent) life insurance as possible. Term can be used as a tool to provide coverage during the accumulation phase, but it's only affordable during that period of your life when you are least likely to need it, thus why maximizing permanent life insurnace is the ultimate goal.

Do you crash your car on purpose to guarantee car insurance pays out? Insurance is for accidents and what ifs. It should have nothing to do with investing. Period.

@@zackphillips6648 Not sure what your point is. Whole/permanent life insurance is a savings vehicle, not an investment, and anybody who understands infinite banking understands this. The owner can borrow from the policy to make investments if they feel said investments will outgrow what that capital would have done had it not been borrowed.

How do you get money out of whole life polices without dying or borrowing? For example. We have $810k in mutual funds and retire in 7 years. We plan to move every thing in to a monthly dividend paying mutual fund. So therefore we will received monthly payments without the principal being affected. How can someone live off whole life policies in retirement? Please keep in mind that we are debt free and do not borrow money. - thanks.

@@KP-hi1om you don’t have to borrow necessarily yet in my opinion it’s more efficient to borrow and I can pay it back on my terms. I like control and mutual funds do not allow that. Lastly, whole life isn’t a retirement or investment plan it’s a tool to maximize my use of money.

Not a fan of either.

I'm growing mine it's like the Golden goose when I retire it'll just keep making me money just don't touch the goose.

I’m a huge of mutual funds❤❤❤. My golden goose will pay me a tax free monthly income in retirement and pay my life insurance premiums.

Was he wrong about the 25 million vs 2 million?

@@vernonrobinson1685 the $25 mil depends on many factors lining up both in the markets and in the life of the individual investor.

yup! BOLI

Highly possible he was wrong.. 1) Let's start with what Mutual Fund does the Average American have access to that earns 11% every year for 80 yrs. The massive market losses (25%-90%) sustained during the covid era and many other points in the last 30 yrs should clearly indicate that 11% is not a reasonable rate to illustrate long term. 2) He doesn't consider taxation of the mutual fund + the escalation $$ cost of the Term Insurance . 3) He never mentions market manipulation, fraud, theft (ex: CTX, EMRON, AMC, Bank Liquidations, Seizure of Assets). Whole life policies are GUARANTEED by contract. 4) How much money spent in a term policy for 80 yrs that is never recaptured ( Have you seen term rates on older people 50+).It would eat the savings in fund alive. 5) Life happens...people get sick, go on vacations, buy homes, college for the kids, loose jobs, get married, divorced, etc. The are many other reason why his scenario is not so clear cut. For the $25 million to happen everything would have to be perfectly ideal for 80yrs . No wrinkles, hiccups, diversions, alterations.. Life never happens that way. Comparing Cash Value Life insurance to a Market type investment is not great idea. They are totally different financial instruments and are designed for different purposes although some of their features & benefits do overlap. It is like a hammer & an axe can both pound a nail, but they are not designed for the same work. Lastly, Mr. Ramsey is absolutely wrong about Banks owning Life Insurance. The largest banks own $$BILLIONS$$ of Life Insurance. Check it out for yourself. Here is a link to the BANK OWNED LIFE Insurance values of all the BIG national banks. You can also look at previous years as well.. www.usbanklocations.com/bank-rank/life-insurance-assets.html. Questions you may ask is: why do banks own life insurance but tell you to put your money in savings ? Do you at any point think they keep "THEIR MONEY" in a vault (or most of yours either)..if not why should you? Why do they have more invested in Life Insurance than they have in the value of all their branches and Real Estate.? I can promise you that none of this Bank Owned Life Insurance is a "TERM POLICY" Must be a reason ..don't you thinK? I believe they see & realize lots of value in "Cash Value Policies" than Mr. Ramsey knows or will ever allow anyone to expose him to. To be clear..Banks do invest in funds, stocks, bonds, real estate, businesses, etc .. But if Life Insurance is so good for Banks, & the Wealthiest Americans, Large Corporations, etc..then maybe it could be just as good for most Americans if they would learn how to use it too. Just a thought.

That's my thought as well.

His assumption was based on historical returns. It depends a lot on what stocks, etfs, mutual funds you pick. Is the stock market going to grow in the same way it has in the past? We’re in a bull mkt right now, but is the mkt nearing a top? Are we going to enter a recession? Is the $32T debt going to cause a mkt crash? Ten years ago I would agree with Ramsey, but in today’s environment I consider long term investment in stock mkt very risky. My suggestion is to do both. Infinite banking plus stock mkt trading.

Also you have to wait until retirement age to access any benefit from the $. With the insurance product he can leverage the funds repeatedly over 60 years to his benefit.

False

Dalbar did the research… There are many other research sources showing the huge mistake of using stock market security based retirement plans. The Economic Policy Institute and Boston College University retirement research studies …. What source are you using…? Ignorance is not a banner to be waved…

@@keithmackey2437#1 insurance isn’t an investment it’s for risk transfer. #2 people have poor investment returns like that when they buy and sell repeatedly and don’t buy and hold. Index funds have essentially zero fees and dividends should almost always be reinvested. #3 Roth accounts have the same tax benefits as permanent life insurance. In retirement portfolio shouldn’t be 100% stock anyways probably closer to 40-60% and the rest bonds depending on other factors. Market securities is what the insurance firms invest the money in. They just charge a bunch of fees. If market risk is your concern invest in govt. bonds instead and you’ll still come out ahead over permanent life insurance. Unless you die prematurely. And that is what term insurance is for.

The cash value is an asset.

Yes it is. It’s not an investment at all!! Think of it like this. You have a whole life insurance policy (NOT A MEC). So you have a premium of let’s say $10,000 a year. So now in your policy you put in $10,000 that is gaining compounding interest at around 5-7%.. in your first year your cash value is not $10,000. Let’s just say it’s $4,500 you can borrow up to 95% of your cash value. So in year one obviously it’s not worth it. But over time (a couple years) once your cash value is equivalent to what you put in you can borrow from that cash value. So let’s say after 3 years you’ve put in $30,000 (plus all interest incurred) so for example (these are just EXAMPLES) you put in $30,000 but with interest your cash value is at $33,000. You can borrow up to 95% of that which is pretty good considering you only put in $30,000 originally. Once you borrow from cash value it lowers your cash value balance but not your original contribution. So let’s say you borrow $30,000 from the $33,000 and there’s only $3,000 left in cash value. You’re still earning interest on $33,000 even though you borrowed $30,000! Why is this? Because your death benefit is used as collateral to your borrowing (loan). So in theory you don’t even need to pay the insurance company back if you didn’t want to. Insurance company charges you around 6% interest. This gets more powerful with more money put in/ more time in. A powerful strategy for whole life is building up policies with hundreds of thousands of dollars. Borrowing from the cash value, then lending that money out at higher interest rates so once you get your return you can put the amount you borrowed back plus interest to insurance agency then keep the spread that’s after that. Did I mention that pulling money from whole life is TAX FREE?!🫡 or you can real gangster with it and throw all of your profits from your lending right back into insurance policies and grow multiple of them faster and over time.

1 Corinthians 15:1-4 KJV Bible [1] Moreover, brethren, I declare unto you the gospel which I preached unto you, which also ye have received, and wherein ye stand; [2] By which also ye are saved, if ye keep in memory what I preached unto you, unless ye have believed in vain. [3] For I delivered unto you first of all that which I also received, how that Christ died for our sins according to the scriptures; [4] And that he was buried, and that he rose again the third day according to the scriptures: Ephesians 2:8-9 KJV Bible [8] For by grace are ye saved through faith; and that not of yourselves: it is the gift of God: [9] Not of works, lest any man should boast. Romans 10:9-13 KJV Bible [9] That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved. [10] For with the heart man believeth unto righteousness; and with the mouth confession is made unto salvation. [11] For the scripture saith, Whosoever believeth on him shall not be ashamed. [12] For there is no difference between the Jew and the Greek: for the same Lord over all is rich unto all that call upon him. [13] For whosoever shall call upon the name of the Lord shall be saved. John 3:16 KJV Bible For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life. John 14:6 KJV Bible Jesus saith unto him, I am the way, the truth, and the life: no man cometh unto the Father, but by me.

​@4XGOTSTICKS But you don't break even after 3 years! People don't borrow money to invest. They pay for life unexpected or expected expenses.