Today I’m here to share a fantastic conversation with Hannah Kesler. Hannah is an Infinite Banking Concept (IBC) practitioner, and joined us to break down the essentials of the concept and share her insights on financial health. This episode is packed with valuable information that could help you take control of your finances, so let’s dive right in!
Infinite Banking Concept (IBC) Practitioner
Hannah introduces herself as an IBC practitioner. She specializes in a unique financial strategy that leverages whole life insurance policies. These policies offer uninterrupted compound interest and tax-free growth. Though this might sound complicated, Hannah makes it simple for us to understand.
She encourages anyone interested in finding a trustworthy practitioner to use the Nelson Nash Institute's practitioner finder. This tool can be found at infinitebanking.org. She mentions that while her focus is exclusively on IBC, she directs those with other insurance needs to the appropriate experts.
Importance of Financial Health
Hannah emphasizes the significance of taking financial health seriously. She compares it to the time we often spend on entertainment, urging us to allocate the same dedication to our financial well-being. This means making informed decisions and treating our financial goals as top priorities.
Compound Interest
Albert Einstein once called compound interest the eighth wonder of the world, and Hannah explains why. By keeping your money within a whole life policy, you allow it to grow consistently without interruption. This becomes especially advantageous when taking a policy loan, where the growth continues even as you use the money elsewhere.
Policy Loan Details
Hannah breaks down policy loans, describing them as collateralizing the death benefit while money continues to grow in the policy. Joe shares a personal regret of withdrawing from his IRA, highlighting the missed opportunity for compound growth – a mistake that the IBC strategy aims to avoid.
Starting Point in IBC
Regardless of age or financial situation, Hannah encourages everyone to consider implementing IBC. She quotes Rick Warren, emphasizing that how you finish the race of life matters just as much as how you start.
Treat Yourself as Your Number One Asset
Hannah advises paying yourself first by setting aside 10% of your income into savings before covering other expenses. She suggests using Rocket Money to manage your finances, which Joe also appreciates for its simplicity and effectiveness.
Quarterly Check-ins and Resources
Hannah's organization, The Money Multiplier, offers an implementation team that provides quarterly check-ins and additional resources to members at no extra cost.
Whole Life Insurance Benefits
Hannah addresses skepticism around whole life insurance, often fueled by figures like Dave Ramsey and Susie Orman. She points out that commercial banks are the largest purchasers of whole life insurance because of its benefits:
- Uninterrupted Compound Interest and Tax-Free Growth: Policies offer consistent growth without the taxes that usually come with other investments.
- Control Over Finances: Policyholders can withdraw money after funding for 30 days, using it for various investments.
- No Obligation to Repay Loans: Loans from the policy can remain unpaid, with the unpaid amount deducted from the death benefit.
Overfunding and Policy Mechanics
Starting young worked well for Hannah, who began saving $400 a month at 18. Overfunding the policy through Paid-Up Addition (PUA) riders accelerates cash value growth. For instance, in a $250 premium, 40% covers the base, while 60% goes into PUAs, acting like “booster rockets.”
Financial Habits and Family Influence
Hannah learned from her father to keep money, not just make it. Growing up, her family did not teach her about money, leading to initial poor money management habits. She now stresses the importance of tracking income and expenses and saving at least 10% of her income.
Skepticism and the Wealthy’s Strategy
Joe highlights that following financial practices used by the wealthy, such as whole life insurance for uninterrupted compound interest and asset protection, can be highly beneficial.
Control Over Investments
Hannah prefers managing her investments personally, without relying on traditional retirement accounts like self-directed IRAs, 401ks, or Roth IRAs. She values the control, freedom, and uninterrupted compound interest offered by IBC.
Tax Strategy
Hannah discusses her tax strategy, advocating for paying tax on money once, ideally at the lowest rate possible. She uses a system where post-tax money is placed into a policy, allowing for tax-free growth. Her approach involves potential tax deductions if funded by a business and a “1041 trust and tax structure,” similar to strategies used by wealthy individuals like Bill Gates and Warren Buffett.
Trust Structure and Real Estate
Money is moved from policies to a business trust, then to a family trust, and finally to a foundation, with a mandatory 5% donation from the foundation to cover tax liabilities. Real estate investments can also be integrated into this tax structure, providing additional charitable giving benefits and tax reductions.
Resources and Contact Information
Hannah encourages listeners to seek advice from tax professionals and offers to connect them with her contacts. She recommends the book “Mapping Out the Millionaire Mystery” and suggests reaching out to her via email at hannah@themoneymultiplier.com for further information.
- The Money Multiplier Website
- Nelson Nash Institute
- The Money Multiplier 90-Minute Presentation
- Rocket Money App
Conclusion
This conversation with Hannah Kesler was truly enlightening. We delved into the Infinite Banking Concept, discussed the importance of treating oneself as a primary asset, and explored practical strategies for financial health. The key takeaway? Take control of your financial future with the smart use of whole life insurance policies and strategic planning. As always, the Hustle and Flowchart community is here to support you on your journey to financial success. Stay tuned for more eye-opening episodes!
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