Ekabo Home Financial Freedom Mastermind Podcast
A podcast for those who do not believe they were put on this earth to work 40 to 50 hours per week for 40 to 50 years, to hopefully retire at the age of 65.
Ekabo Home Financial Freedom Mastermind Podcast
127. Escape the Payment Matrix: Tony Manganiello's Blueprint for Lasting Prosperity!
🚀 Transforming Payments into Prosperity with Tony Manganiello 🌟
Welcome to another insightful episode of the Ekabo Home Financial Freedom Mastermind Podcast, hosted by Niyi Adewole. In this episode, we are thrilled to feature Tony Manganiello, a bestselling and award-winning personal finance author, and a highly sought-after speaker on debt elimination, wealth building, and financial independence.
🎤 What You’ll Learn:
➣The Payment Matrix: Discover how to escape the financial systems designed to benefit institutions rather than individuals.
➣Transforming Income: Whether you sign the front or back of a payroll check, learn strategies to maximize your income and keep more of your hard-earned money.
➣Debt Elimination: Tony shares his revolutionary approach to paying off debt while simultaneously building tax-free, generational wealth.
➣Lifetime Income Strategies: Explore how to achieve guaranteed lifetime income and protect yourself from unpredictable market conditions.
💡 Tony’s Journey:
Over the past three decades, Tony has dedicated his career to simplifying financial complexities and empowering individuals to break free from debt. His latest book, Transforming Payments Into Prosperity, serves as both a blueprint and a mindset shift for achieving financial freedom.
Tony’s method combines strategic banking principles with an empowering outlook on personal finance, making it accessible for everyone. Inspired by his personal journey and extensive research, he challenges the status quo, showing families that achieving generational wealth is not only possible but achievable with the right Tools.
📚 Experience and Expertise:
As a bestselling personal finance author, Tony has guided over 3 million people in redirecting their cash flow to prevent their hard-earned wealth from evaporating. With nearly three decades of experience and a track record as a 3-Time Inc. 500 executive, he understands the challenges of managing rapid growth and investing years of hard work into a business.
💰 Reflect on Your Earnings:
Consider the past decade—how much income has flowed through your fingers? It may seem like a small fortune, but how much have you retained? If you don’t change your approach, the same patterns will continue, and you’ll miss out on keeping more of your hard-earned money.
📈 Strategies for Financial Growth:
Tony offers strategies that can help you:
➣Transform Business Wealth into Personal Wealth: Learn how to increase your retirement contributions by over 300%, leading to significant tax savings.
➣Achieve Guaranteed Lifetime Income: Protect yourself from unpredictable market conditions and plan for a secure financial future.
🔑 Dual Benefits: If you sign the back of a payroll check, you can:
➣Pay Off Debt: Discover how to eliminate debt while simultaneously building tax-free, generational wealth with the same dollars.
➣Empower Your Employees: Teach your team that making more money can sometimes lead to financial pitfalls.
📊 It’s All About the Numbers:
Tony’
🗓️ Tune in every Wednesday at 7 PM Eastern! Don’t miss out on our journey toward financial freedom through smart investments.
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Our Links
➣ Financial Freedom Mastermind Facebook Group - https://www.facebook.com/groups/53083...
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Niyi Adewole is a licensed realtor in Georgia, brokered by EXP Realty. Feel free to reach out at Niyi.Adewole@exprealty.com if you would like to work with an investor friendly real estate agent.
Welcome to the Financial Freedom Mastermind Group Podcast. Here we're all about breaking free from the 40 to 50 year work grind and accelerating our journey towards financial freedom. Join us every Wednesday at 7 pm Eastern as we explore different types of investments that can fast track your path to financial independence. We serve as a hub for connecting with fellow members during our sessions so you can share successes, ask questions and keep the momentum going.
Speaker 2:Good evening everyone. This is Niyi Adewale with the Acabo Home Financial Freedom Mastermind Podcast. I'm so excited today to be joined by Tony Manganiello, who is an award-winning author and also a bestselling author that has written many books and has a new bestseller that is called Transforming Payments Into Prosperity, where he's helping a lot of individuals build wealth, get rid of debt and families start to take control of their finances. Tony, thank you so much for joining us tonight.
Speaker 3:Thank you so much for having me. I really appreciate. It Happy to be here.
Speaker 2:Absolutely, absolutely. And when you start talking about financial freedom and helping people break the debt cycle, this is music to my ears and also our listeners. This is what we talk about on a week-to-week and really daily basis, and so the first thing that comes to mind for me is how did you even get started in this space? What did it look like coming up for you?
Speaker 3:Well, when I was a young kid, back in the 70s, my father and my father left our family and there was a lot of reasons why that was. You know why he did that, but the reason that I found later in life that didn't help was the personal financial stress that everybody in the that he was under, and so after college and a number of other experiences as you probably we all have those I really began to figure out, or try to figure out. Why is it that money can have such an impact on relationships? That should go beyond money, and that's when I got into personal finance. I've been doing this for about 30 years now and we've helped people eliminate debt and build wealth, and over the last 12 years, we found a way to do this where you're able to pay off debt and build wealth with the same dollars at the same time, and to me, that was a complete game changer. We totally modified our whole business.
Speaker 3:The books I had written before I had found out about how this plan works they're still applicable, but I wrote the most recent book this year because it was everything I've learned over the last 12 years with got to be over a thousand consultations with consumers and people who are just trying to build a future, and so I decided I'm going to put all this stuff down, because people need to know this, and that's basically what it was about, and I just want to make sure I can do what I can to help families survive. I mean, when was the last time a family sat down and said, hey, with all of our chaotic schedules and everything going on in life, you know, what really helps is being stressed out about money. Nobody ever says that. You know so, but what happens is that other chaos when money problems are circling around. It just makes everything worse. So if we can turn the volume down on the money problems, then maybe families have a better chance of surviving and thriving, which is really what the goal is.
Speaker 2:And Tony, that is an admirable goal and it's needed. When you look at the statistics, they say 50% of divorces are because of something financial. Right, yeah, financial stress is the main thing that leads to arguments, which leads to breakups, which is tearing families apart, and so what you're doing truly is a work that is needed. And so when you look at even now right, this is one of the things that I was so excited to be able to connect with you on is because you are actively out there helping families kind of get their finances in control. And when you look at what's happened even over the last 12 years since you've come up with this strategy, the wealth gap's gotten larger and larger, and it's gotten even more difficult to be able to just have one person working in the house. You really need two, and you really need to have your money working for you as well when you're not working. And so I know you talk about escaping the payment matrix. Can you describe what the payment matrix?
Speaker 3:is Sure, you have your income. These days, money just gets direct deposited into what? A checking account. And what do you use that checking account for? To make your payments. What is the whole focus behind bringing in money? You got a budget right, and what the purpose of your budget is is to say, all right, I got this much coming in, I got to make all these payments. Oh, dear God, let me have something left over, right. And then, if you have something left over, you feel relief. You feel like, oh, I'm making it. That's the payment matrix.
Speaker 3:92% of all hardworking Americans in this country today, according to the National Institute on Retirement Security, will never be able to quit working comfortably. What that means is that the lifestyle you enjoy while you're working, if you want that to continue into retirement, you can't stop working because they've used all of tomorrow's money. Today, when you look at the debt to income ratios, if you've gotten a mortgage or if you've gone to any type of lending situation, they want to know what your debt to income ratio is. And they, they you know the infamous they they tell you that a 35% debt to income ratio or less is healthy. The question is healthy for who? Because when you calculate debt to income ratios, you use whatever your debt payments are and you divide that by your gross income. No one ever stops to think about how much do I have to. You know, because you're not making your payments with gross income, You're making it with net income. So nobody ever stops to think how much do I have to gross to bring home enough money every year to just make my debt payments? And what I've seen over the years is it's up to 50% or more of your gross income is already spent before you've earned it, because you've got to grow so much to bring home enough to make the payments. And then you have these 15% credit cards, 8%, 7% car loans, 5%, 6%, 4% mortgages. Those percentages are only used to calculate your payment, but they never tell you how much of your payment is going to interest. And on average it's up to 50% or more. And so what I come?
Speaker 3:I remember I was at a consultation probably about four years ago, and the thought came to me when I was talking to one of my clients. I said you know, just because you can make your payments doesn't mean you can afford them. And the reason I came up with that was because who can afford to have half of their gross income spent, before they earn it, on payments that are costing them 50% or more in interest. No one can. But the payment matrix makes you think it's okay, and that's why 92% of the people that are working in this country will never be able to quit working and maintain the standard of living.
Speaker 3:And to me, when I'm working with my clients, I like to look at what their needs are today. In the back of my mind, I'm always thinking I call it the vulnerability scale. It's our age the older we get, the more vulnerable we become. And retirement's like a cliff. Everyone's heading for it, and I just want to help people turn and stare away from it as much as possible. The earlier you can start, the easier it is to turn. You get to be up to around my age. You got to start slamming on the brakes, you know.
Speaker 3:But no, that's the point is that the payment matrix gives you that false sense of security, because people budget, and budgeting is one thing I try to teach people not to do. Because budgeting, in my opinion, what it does is it unknowingly applies the wrong purpose to your income. I mean, think about it. You budget because you want to say, hey, I got all this money coming in and I want to be able to make my payments. So what you're basically saying is the purpose of my income is to make my payments. That's wrong. The purpose of your income from your work or your career needs to be to replace the income from your work or career, and understanding how cash flow works is how you get to do that work on that ultimate goal.
Speaker 3:Understand cash flow right now. With a payment matrix, checking account and all this other stuff that people do, it's just flowing through and out of your account and gone forever. We teach people do. It's just flowing through and out of your account and gone forever. We teach people how to begin to redirect some of that cash flow back to you so that, ultimately, you can become your own funding source. You can be the banker, because those bankers aren't doing the stuff we're doing with our money. We need to help people do, and that's what we're here for is to help people learn how to be their own banker, how they do the same type of investing, the same type of savings that banks do, and even finance their own car purchases, their own education, and make a profit on those loans, and that's where the paradigm shift really comes in.
Speaker 2:And Tony, you are speaking my language and the language of all those that are listening with the Financial Freedom Group, and so one of the things that I've noticed as well, and we have some people that are international, that are within our group and this is, at least in my opinion, more uniquely a US thing Outside this country, I don't know that this credit card dilemma exists as much as it does here, and it's really taken over.
Speaker 3:Yeah, well, that's because we're the richest nation in history and the working class people have always been taken advantage of. They are always. I mean, when you think about the gross domestic product, it's something like around $20 trillion a year. That's crazy. Well, where's that coming from? You know, people talk about the rich people, that the 1%. They're not where all that money's coming from. It's the guys like the people I help. It's guys like us who are out there just trying to live a life and they don't know that we're being sucked dry financially, like you know, the matrix in the movie, where you know that you're just this little energy pod, the little battery. Well, all we are to the payment matrix is a little battery of income, cash flow, and the cash flows all to the banks, all to the insurance companies, all in the wrong way. And i'm'm here to say you know what? Let's flip the script on that. Let's teach you how to do what they do, and then you'll see some big changes in your life.
Speaker 2:Absolutely, and we want to dive into some of the nitty gritty here, and so one of the things that you talk about is the dual duty dollar right, being able to save some money while also having those dollars work for you. And so what are some examples, or what do you mean by that?
Speaker 3:Well, first of all, that comes from something I realized a number of years ago. When people are looking at the dollars they have in their possession and they're checking account, for instance, how many things can you do with those dollars at the same time? One thing you can pay a bill today or you could put it away for tomorrow. That's kind of like. If you're familiar with the movie Sophie's Choice, it's kind of like you know, I call it the Sophie's Choice for your dollar, right, it's like well, you know what, today is the nasty now and now I'm just going to kick the can for tomorrow down the road and that's just what happens. That's why 92% of the people can never quit working.
Speaker 3:Well, when you can do more than one thing with a dollar, that changes everything, because now you can take care of today's necessities and needs while those same dollars are working for tomorrow's reality that cliff you're heading for. And so, as an example, when you start to redirect your cash flow, the way we teach eventually over the course of it and it's not something that happens overnight that requires discipline, commitment. Fortunately, it's also flexible and we've got it all figured out to help people get there as best as they can, but you eventually get to a place. So let's say, if you want to buy a car I use in the book an example of buying a $30,000 car Now you can go into the financial interrogation at the finance department at the dealership or you can save up money, right, people will buy cash, buy cars with cash, and that's a slightly better thing. But both ways you wind up with a payment right, because you've either financing it and you got that payment every month, or you got to start replenishing that account you just bought your car with, because cars don't last as long as they used to. Well, I guess they've never really lasted that long to begin with. But so the payment problem is still there.
Speaker 3:When you use the type of strategy we teach, what happens is you go and you borrow the money from yourself and you're able to do it.
Speaker 3:The rate that we are able to get, which we've been doing for about 10 years is about 5%, and the money is also earning 4%. And people will say well, tony, if I'm paying 5% interest but I'm only earning 4%, how am I not losing money? And the answer to that question is understanding how the volume of interest dollars works, because as you make your payments every month, you're paying interest on an ever-decreasing balance and as your money is just growing every month, it's growing on an increasing balance. And in the example I give in the book, in month 13 of the five-year payment plan for a car which is what a lot of people do, month 13, you start earning more interest than you're paying and when it's all said and done, you wind up net profit $2,600 on the car that you bought and you got the car, as opposed to losing all that interest to some finance company or taking the 30 grand out and then starting to put it back. Now the 30,000 isn't working for you.
Speaker 2:So when you can do the same thing with each, you know the two things at the same time with your dollar. It changes your financial trajectory, and this is something that's not talked about. It's almost like a secret that's out there that I'm happy that you are bringing to light, and so I got a couple of questions that pop up with that right. So how are you doing this? What vehicle are you investing in? That's kind of pulling it from yourself.
Speaker 3:And this is the crazy thing okay, because I've been in personal finance since the late 80s and back when I was in personal finance, I started in life insurance. Life insurance if you're sitting on a plane and there's a chatty Kathy next to you, that is really like chatting it up and you're like I really could use some silence. Just say, hey, you know what I do for a living, I sell life insurance. And oh really, you'll see, you know the silence will be deafening. But what I discovered 12 years ago was that everybody's buying life insurance wrong and that's why nobody likes it. And what I mean by that is you buy life insurance. What's the thought in your mind?
Speaker 2:When you die.
Speaker 3:Yeah, what will my loved ones get when I die, right? But and the premise of that is very noble and very important because you're looking to protect your family against loss of income, right? Well, are you the only one in that equation looking to protect themselves against loss of income? You know who else is the insurance company. That's why they don't just hand out life insurance contracts like nothing. You have to go through underwriting, they're going to draw blood, they're going to take samples, they're going to do all that stuff. You're going to get poked and prodded. Why do they do that? Because they want to make sure. If they're going to, especially like with a term policy. If you get a half million dollar term, 20 year term policy where it's 30 bucks a month, how much are you putting up towards that half million? At most, 7,200. You think the insurance company is going to risk a half a million dollars. Unless they're supremely confident, you're not going anywhere, at least with regard to natural causes.
Speaker 4:No.
Speaker 3:So what we do is we say you know what People buy insurance wrong and they say what will my loved ones get when I die? And they're not realizing the insurance company is making sure that you're circling the sun a couple dozen years or so before that happens. You're circling the sun a couple dozen years or so before that happens. So the question you need to ask yourself when you buy life insurance is what will a contract do for me while I'm alive? Since if they offer me a contract, I'm probably going to be around for a while, and that's where the difference plays.
Speaker 3:Instead of buying death benefit and taking the premium dollars, what we do is we transform how you spend your premium dollars and we buy cash value as much as the IRS will allow us to buy. Because the IRS stepped in in the 80s and they passed a bunch of laws because rich guys were saying to their planners oh, I got an extra hundred grand a year. Where can I tax shelter it? They'd be like you know what Put in a life insurance contract? Rich would be like in fact, I need life insurance for him, rich. And the advisor would tell him it's because life insurance is a tax haven. But in the 80s, they found out that this was going on and they changed the rules so that you have to have a certain amount of ratio of death benefit to cash value as it grows. So we do all that math and we make sure that we're buying as much cash value as we can that way. When do you need your death benefit? One time right, and it's usually people are living even into their 90s. Now, have you ever bought? Well, obviously we can't say we bought life insurance at 90 years old because we're not there yet. But if you ever try to, you're not going to be able to buy it or it's going to be way too expensive in the 70s and your 80s. Well, we build a contract that gives you the cash value from day one, because we're buying cash value as much as we can, and it's building month to month or year by year, depending on how you pay your premium and that money is accessible.
Speaker 3:The key thing about life insurance contracts is they tell you you can borrow the money, but you need the right kind of insurance company, the right kind of contract, to make sure it's doing all the things that needs to be done, and explain that in the book, and that's what we focus on. We're like hey, listen, you get offered a contract, you're not going anywhere for a while, unless they T-bone you at the intersection on the way home from work. And if you do, you'll still have a decent. Because we do use term insurance to get the boost of death benefit, to comply with the IRS rules, because it's not expensive. But we're putting the majority of your premium dollars right into the cash value and that the insurance company says, hey, you know what you want to borrow from that. If you have the right type of contract with the right bells and whistles, you can do it. And they don't ask you for an application. There's no credit check. All you do is go online and request the loan and the money shows up in your account.
Speaker 3:And the one thing that blows people away I get this question all the time what will my payment be on a loan of this much? Because when was the last time you took out a loan and you didn't know what the payment would be before you took it out? The insurance company doesn't care if you pay it back. Now there are some people who do this business and they say they promote that, like you know, take out loans and never pay it back. Those are people who really don't understand how this stuff works.
Speaker 3:When you're working, during your working lifetime, as you build up this cash value, it's a recyclable amount reservoir of cash and you borrow it to do what you need to do pay for college, go on a vacation, whatever it might be and then you pay it back like you would any other third-party bank. That way, the money is there. When you want to stop working, you can say you know what, I'm going to turn off my premium if you want, and there's so much cash value it becomes self-sustaining. You can take money off to live in retirement and, just like any other retirement fund, you've got to make sure you don't spend it all in one place, and we teach how to do that. And then, if you pass away at 85 years old, you still have a death benefit and you haven't been paying for it for years because we front load the contract with so much cash value that when you do need it, it's self-sustaining and you don't even have to pay a premium and your loved ones are still taken care of.
Speaker 2:That is incredible, and the way that you've just explained it and the fact that you have resources around to help other people break it down simply is important, right, because I think we've all, to your point, been on that plane or at least had somebody in your network that's an insurance agent. And they start talking through this and they're talking about all these annuities and, hey, we got whole life, we got term. And it starts to confuse you and your eyes glaze over. But the way you've just described it sounds like an awesome benefit. One of the things that you touched on that.
Speaker 2:I've been having a lot of conversations recently and, for those who've been listening for a while, they know that I used to be in medical device sales before moving into full-time real estate as a realtor and real estate professional, and one of the reasons I did that was for tax benefits. Right, there was many years where I was paying six figure checks to the IRS. I was like man, this is nuts, how do I reduce this? And kind of tax haven that way, and so I chose a bit of that real estate path, and also we've advised certain clients to do some of the short-term rental loopholes for tax savings, things of that nature, but this seems like it could be another way to save people taxes. Are there maximum amounts you can contribute and what does this look like from a tax savings standpoint?
Speaker 3:Where the tax advantages come, where what we like to tell people. I like to say we're going to move you from tax me now to tax me never. Because life insurance is tax-free. You can access it tax-free. It grows tax-free when you pass on and you leave the death benefit to your loved ones. That's tax-free. The money you're putting in is after-tax dollars. So it goes into this tax-free environment and for people in real estate.
Speaker 3:What's really cool about using these types of accounts, these types of policies for real estate investing, is, if you had to flip a house, you might need, if you have enough of a reservoir of cash.
Speaker 3:You go online, say I need 30 grand, I need to get into this house, and it's going to take 8, 12, 16 months who knows how long before you flip it, you got to do the work in it.
Speaker 3:A lot of people go get a bridge loan and you're just oh, please, god, let me sell this property, let me get all the work in it. A lot of people go get a bridge loan and you're just oh, please, god, let me sell this property, let me get all the work done before I have to start making too many of those payments the insurance company doesn't even ask you for a payment. You can just take out the loan, get the property flipped and what you'll do is you'll accrue a very small amount of interest every month, but then, when you sell the property, pay back the loan. And when you pay back the loan, it's not money that's disappearing. What you just did is put it back into your recyclable reservoir of cash and you pocket the difference, and you didn't have to worry about stressing out over some bridge loan payment that you would have had to make if you went to the bank down the street.
Speaker 2:Wow, yeah, and to that point that is so real for the people that are listening, because we're doing flips, we're doing rehabs and we're in you know, usually using hard money, that's, charging anywhere from 12, 15, sometimes 20% plus.
Speaker 3:Yeah, to be able to have, you know, this money really coming back to you and be able and you can even do hard money lending with this, with these accounts. You know, if you start building, you can. We teach people arbitrage. You know if you're you're saying people are spending, you're paying 10, 15, 20 percent. The highest I think the loan rate ever got on the policies we work with, I think, was 5.67, and that was just over the last year when all this crazy stuff in the economy was going. Up until then it was 5% for like a dozen years. Now it's back down to 5% and it'll probably stay there where it's been for the most part. So if you want to lend somebody 50 grand, you take out the loan, you charge them whatever the going rate is and you're only paying 5% or somewhere in that vicinity. And if you're charging 15%, that's all profit.
Speaker 2:This is pretty cool. This is definitely something that I'm personally going to export. I know you're going to get hit up by a lot of people from our community, but I wanted to ask just two more questions before transitioning to opening this up to an open session For those that are listening live and throwing questions in the chat. We're going to jump to that here shortly and we're going to give you an opportunity to connect with Tony as well. But the first piece is we talked about it a little bit upfront, but going to that retirement piece, right, what does this look like when you retire? If you've made the right moves, you've built up that reservoir. Now you're retired, how do you tap into this wealth that you've?
Speaker 3:built up. That's really simple. So in the book I give an example of I call the family, the Fortunato family. I'm Italian, so it's got to be a Fortunato. So they're 35, they start young and they have a couple of kids and they're thinking you know, we really need to start planning for our future. And so they have the choice of doing the traditional route with the 401k, you know, putting the money in and you can't access it at all and it's tied up until 50. Yeah, you might be able to take a loan out, but if you do, then maybe it's all kinds of squirrely stuff or you can use this strategy. So the family uses this strategy.
Speaker 3:They make a 110 grand a year as a household. You know, a little above average, but I like to tell people that I talk with everybody I talk with is above average. So they're making a little bit extra, but they only have $600 left over when they pay all their bills, all their debt. They have over $3,100 a month in debt payments that are costing them $1,600 a month in interest of that 3,100. And they have to gross of their income it's 47% of their income is being grossed to just pay the 3,100 and change a month. So, instead of doing the 600 bucks towards the traditional plan, they decide to start working with what we call private family banking. They re-divert that money into this environment and while they're doing it, they're paying off their debts. Doing that, they're completely debt-free in nine years and three months and they have $67,000 inside their policy. So what do you do when you've got the $3,100 freed up? I mean, if you were just going to continue to make the payments, you continue making payments. They decide to double down and take the 3,100 and start another one. By the time they reach age 65, they got $1.4 million in cash value and over $700,000 in death benefit on top of that. They've taken that and they've gotten over $2.1 million in estate value for their family. And they decide well, there's some formulas, you go in and we work some magic in the numbers. They say you know what? What can I get for the next 25 years if I want to start budgeting right From that amount? They could take over $80,000 a year for 25 years. And guess what? That 80 grand is tax-free because it's coming from a life insurance contract. So they could, you know, when they go into the 401ks. We all know what happens with that I mean you've probably.
Speaker 3:I would imagine that you're feeling the same way I do. I used to be one of those mutual fund guys. You know, they say you know, if you put this money on your way and they 12% and they give it. They put that into context of XYZ mutual fund If you put 10 grand in 20 years ago, it would be worth this much. That's 17%. Let's project it just 12. And you're thinking, well, that seems reasonable. Well, that's oh gosh, it's priced something. I can't remember what the phrase is, but they're doing something to make it seem like it's reasonable when it's not.
Speaker 3:Dalbar Inc is a company that has done research on the average investor people like us who put money in 401ks and if they're lucky, they get 7% over 30 years. So if they did get the 7% in their 401k, they would have around 700 grand as opposed to 1.4 million. And then when they start taking it out, guess what? They pay taxes on it and while it was growing they couldn't access it to use things for their daily life and they've been paying debt payments all the time.
Speaker 3:Most people don't understand the importance of entering retirement debt-free Because if half of your income, your gross income, at a hundred grand a year. If half of that you got a gross 50 to bring home, you know your 34% debt to income ratio, debt payments. That means you're living off of half of your income. So if you enter retirement debt-free, you could live on the same standard of living with half the gross income. And then when we get involved, we're talking tax-free income and it's almost like they're getting a step up, because now they don't have to work and they've got almost the same cash value, if not cashflow or more, to enjoy during retirement.
Speaker 3:And that's the thing that gets me is because it's not like people aren't generating wealth. Everybody thinks they have to generate more wealth. The average individual is going to make around $2.7 million during their working lifetime. The only reason they don't have anything to show for it is they've been using all that tomorrow money today. No one showed them how the numbers work and they wind up broke. They wind up at that cliff and they're hitting the brakes and they're swinging the. You know they're pulling the parking brake. They're trying to do everything before they go over the cliff. And that's where this philosophy comes in, because it's not the sophie's choice for a dollar, it's. I can use this today, I can you while it's working for tomorrow, and I can get the best of both worlds.
Speaker 2:And what you just said is spot on right. I get nervous about some of the future generations because it's getting tougher and tougher to even afford just the standard living right Like. It used to be a lot cheaper to just go out and buy gas and groceries and things of that nature, and especially over the last five years we've seen that accelerate in cost and so there's a lot less room. You really have to be hyper-focused and make sure that every dollar that you make is getting put to use so that you can retire right. You don't want to get to age 60, 65, and then start to try to figure it out. And the hardest thing to do is what you just mentioned. It's a little bit of delayed gratification. But this takes some of that off, some of the steam off, because you can still actually use some of those funds. And so what's the major risk here? Right, I always want to get the pros, but also, what do you see as the con or potential risk to doing this method?
Speaker 3:You know that's the funny thing, because we're not dealing in the stock market. We're dealing with a completely different platform Insurance companies, especially the right kind, mutual insurance companies. I don't know if you know the difference, but a mutual insurance company is owned by the policyholders. They don't sell stock and so when they make a profit, guess who gets a share of the profit? The policyholders. So you're like a silent partner in their business. And the companies we work with are multi-billion dollar, highly rated.
Speaker 3:We did our homework to make sure and I'm doing this too I want to make sure I'm not. I like to go to bed at night and sleep like a baby, not worrying about all this stuff. So the focus is to be able to just have a platform. It's not going to get rich quick overnight, it's get rich quick slowly. And if there is a caveat and we've already kind of experienced it with the COVID thing over the last few years, when I had clients that were in the plan and because we spend their premium dollars differently and let's say they're making a $500 a month payment, I've had gosh, probably about half a dozen clients during that time. It was a lot less than I thought it would be, but they would email me saying, tony, I think I got to cancel my policy and I was like, don't forget your $500 payment. It's flexible because the money going into the cash value is technically an optional premium and because 60% or more of that is going into that rider, they could reduce their payment by more than 60% to keep the policy afloat until they get back on their feet.
Speaker 3:I had one client that during the COVID era he had to cancel his policy. It was because he just started building a second restaurant. He had a restaurant going really well in the Chicagoland area and he was putting a ton of money into his policy and COVID hit and he was telling me Tony, they won't even let me have 50, they won't let me have more than 50% people in my. I can't make any money. I think he wound up going out of business. So you know, that's just like with anything. Really, the only limitations are the resources that the client has available and the parameters that we're working with.
Speaker 3:But typically, compared to the alternatives and this is the funny thing is people they'll start learning about this strategy and they start having this fantasy about well, maybe if I did this, would they do that. It's like whoa, whoa. This is put your feet on the ground. It is pretty powerful, but it's not going to make you rich overnight. It's basically saying, over the next 10, 20 years, I have that much gross income coming in, I'm going to bring home hundreds of thousands of dollars. How much of that can I keep?
Speaker 3:And that's really what the focus is, because I tell people the reason you making payments doesn't mean you can afford them is because, if you could, you'd be sitting on a pile of cash. Right now. I haven't met many people sitting on piles of cash because they've been thinking oh, my budget, I'm making my payments. And that's why I decided to call the book Transforming Payments into Prosperity, Because it's not that they have, it's not really so much a payment problem, it's a who gets the payment problem and when you're the one you're making payments back to. That's how you redirect your cash flow. But you can't do that in the traditional means and the traditional platforms that people are used to, and that's why I call it the payment matrix.
Speaker 2:And that's an awesome name for the book. A hundred percent agree. And Tony, before we open it up to the rest of the group and allow others to join and ask questions and throw questions in the chat, where can people get the book? Also, I know you do consultative work with different families and individuals. How can they tap into that as well?
Speaker 3:If you want to get a copy of the book, you go to Amazon and just search for Transforming Payments into Prosperity. Or, if you want, we have an ebook that's a little bit less expensive and you can go to prosperitysmartestwealthcom. And if you're looking to, you know, if you want to talk with me and my calendars on my site, you can go to tonysmartestwealthcom, and you know, I've got some resources out there for you. And if you just want to get on my calendar, it's all set up to you know, hopefully. I mean my calendar is kind of crazy but I do my best to accommodate. I do have a team of people that work with me. So if we can't get you on my calendar, there's people I've personally trained that know how the stuff works.
Speaker 2:Absolutely, and we're going to put all these links into the show notes and we'll make sure we push it out to our group for those that want to connect. But we're going to open this thing up. Is there anybody who is on live? Please feel free to click that join live button at the bottom. I already see questions in the chat that I'm going to kick this off with. But feel free to join live and or ask questions in the chat and we will kick this thing off for the next 10 minutes or so. And so, tony, first question is so we talked about the self-finance piece, so why not just put it into a high yield savings account where you can earn 4% to 5%? Why put it into the insurance piece?
Speaker 3:Well, if you put it into a high yield savings account and then you use it, it's not earning interest anymore. So that's really the reason. That's the idea behind why not pay cash for a car, because once you take that $30,000 out and buy the car, or whatever the amount is, that's no longer working for you. So the idea is that's where the dual duty dollar comes in. It's where you can use the money today while it continues working for tomorrow, and you don't have to look at your dollar like your. You know Sophie's got to pick between her one or her two kids, who she's taken, and you she's going to the camp with. That's. The biggest difference is that you're able to use the money while it's still earning interest and dividends for the future.
Speaker 2:That makes a lot of sense and I'm going to kick it over to Justin. What other questions you got?
Speaker 4:Hey, Tony, First of all thank you for taking the time to do this, man. Great stuff. I was definitely tuned in here. I heard you mentioned family banking earlier. Is that the concept that the Rothschild family invented?
Speaker 3:Well, that's interesting that you bring that up In the book. I have a part where it's myths and realities. The Rothschilds they actually started real banks. Okay, and I actually looked into. There was a time a number of years ago where I realized you know, I want to be a nice bank and I was going to start one. I flew out to the East coast, met with some people and when I got done I was like you know, I don't think I'll have any internal organs left by the time they take them all to get this thing started.
Speaker 3:But when it comes to the private family banking that we teach, using an insurance platform, it's the easiest way where you can mimic what the Roth Childs did. But they used actual banks. I mean they, you know they. That's a different platform, but the idea is the same because it's putting money into a platform that you can access while it's still working for tomorrow. That's the biggest thing. People they think you can work for money or money can work for you.
Speaker 3:Problem is, when you're in debt, money's working against you, and so we got to get out of debt and we can do that simultaneously Pay off debt and build tax-free wealth with the same dollars at the same time, because really, what's at risk is, whatever that debt payment is, that total you're making every month. That's the amount of money I want to see you liberate, because that should be yours Right now. It's the interest and the way the numbers work. It's just totally unfair. So you got to work towards liberating that total amount of cash that you're paying every month. And when you do that?
Speaker 3:I mean, just imagine if you didn't have a car payment, if you have a mortgage payment now. Imagine not having to make that. Imagine no credit card payments. Imagine that when you needed to go on vacation, you went online and, yeah, you put it on a credit card because you know you're getting the points right and you're getting the whatever else they're doing. But when you get back from vacation, you go online, take the money out of your private family bank, pay off the credit card and then just pay yourself back the same payment you would have made anyway. That is allowing you to keep cash flowing back towards your resources as opposed to the bank's. Does that make sense?
Speaker 2:It's always very interesting, right. You meet people from all different walks of life, and there's a lot of people out there, especially on social media. Now you can hide behind like a lens and things of that nature that get so angry at folks for, oh, this person's not paying X amount in taxes. I have to pay X amount. When you realize that we're all in the same game right, that has the same rules across the board you start to want to learn different methods like these, because this is how the wealthy are staying wealthy, right?
Speaker 2:The example I think about in a completely different realm is Elon Musk with Tesla. Right, he could be taking a salary, but he's like no, I want to take it in stock. He did this way back when, and now the stock's going up in value and he's taking loans against stock to live life, but you're not paying taxes on those loans because they're loans, right, and they're loaning because the value of Tesla keeps going up, so he's keeping all that in there going up. And it's similar thing here, right, you just got to start early and kind of build it up over time.
Speaker 3:Yeah, and that's the reason people think they can't do it, because they see people. I'm not Elon Musk, he's like the real life, tony Stark, I can't do that. Well, you don't have to. Just in the second chapter of the book. It's called who do you think you are?
Speaker 3:And what I talk about is most people what they think of themselves as they look at their personal finances through what I call the budgeting lens what's coming in, what's going out, what's left over? You know what the payment matrix looks at you as the multimillionaire you are in the making. They're looking at your life. It's called a lifetime value, how much total income you'll generate during your working lifetime. And they see the two or $3 million and they're like, hmm, how can I get as much of that as I can? And they're doing it really. They're doing a great job of it, and so we have to begin to think of ourselves differently. You got to be thinking of yourself. You know what. I don't feel like it, but I am a millionaire in the making and I think I need to change about the way I feel. Because if I am, why am I allowing everyone else to profit off of my I like to say my blood sweat and years of work.
Speaker 4:And Tony, I have one last question and then kind of a statement so what is it? So once you set this up, does it kind of become automated? Is it something that you have to keep looking back into? Or, once you kind of set it, you can kind of forget it and you just let it continue to grow as you move forward throughout life?
Speaker 3:Yeah, basically it's just like a normal life insurance policy. If you pay an annual, you just make one payment a year. If you're paying it monthly, it just comes out of your account. The difference is we're putting as much cash into the cash value from day one. So the cash value is growing by hundreds of dollars to thousands of dollars a year and as it begins to compound and you get dividends and more interest, you've got tens of thousands of dollars in there and if you ever wanted to access it, I've done it all the time. You know, go online and say you know.
Speaker 3:For instance, you know when I had to put a nuke tires on my car last year, have you seen the price of tires lately? I was like $700. And it was like I'm trying to. You know I have seven kids, so I'm like you know I don't want to. You know, go, I don't. I'm pretty frugal when it comes. I'm driving a 10 or eight year old minivan that has. You know it's paid for and I'm like you know what. I signed up. I'm like you know what. I'm not going to use my money the way everybody else does. I put it on credit, got the tires installed, went home.
Speaker 2:No, Tony, I think that is spot on. We appreciate you for joining us tonight and sharing some of your knowledge. I'm definitely one that's going to be one getting the book, but two setting up some time so that we can talk through this in more detail, and I can't wait for the rest of the community that wasn't able to join live to hear this as well. Tony, thank you for joining us tonight, Absolutely, and for everybody listening. Come on now. Thank you, Tony, and for those that are listening, if you like this episode, go ahead and leave a comment for our guy Tony. Go ahead and like, subscribe and we will definitely put on more, Tony. Thank you, See ya.
Speaker 1:Join us every Wednesday at 7 pm Eastern as we explore different types of investments that can fast track your path to financial independence.
