Chris Naugle on How to Be Your Own Bank In 2022

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Share this episode right now. That way, we can all grow together. And we are hiring. So if you're interested in working with us, please go to disruptors.com/hiring and be on the lookout for our new Discord channel. So, Chris, we're talking about becoming your own bank.

So first of all, thank you for coming out here.

Chris Naugle: Oh, thanks for having me again.

Steve: Oh, absolutely. So we're talking about becoming your own bank. So you were on our show about, I wanna say, a year and a half Yep. Two years ago. It was a big hit and we opened a lot of eyes.

We talked about Nelson Nash and what was the title of the book?

Chris: Becoming Your Own Bank.

Steve: Becoming Your Own Bank. And we talked about infinite banking, and I think we blew a lot of minds. So I wanted to talk to you about what's changed in the last year or two because if there's anything that's consistent, that things will well, things will change.

Chris: That's true.

Steve: What has changed since you were last on the show?

Chris: So since last time, I would say the biggest change is how we use the plans. You know, that would be the biggest thing. We've evolved the concept. We've evolved the way that the money can be used and the whole become your own banker. But the other thing that changed is this administration and the government changed some rules.

There was the rule called seventy seven zero two.

Steve: This current administration?

Chris: This one right now.

Steve: Okay.

Chris: Just went into effect, for January 1. And seventy seven zero two reason. Yeah. Yeah. Well, every actually, the insurance companies adopted it in November, but what it did and it was needed.

It took the guaranteed levels for these mutually owned insurance companies, and it allowed them to reduce the guaranteed level, which at first, we were really scared. We're like, oh my gosh. What's this gonna mean for what we do? You know, we we went from a 4% guarantee. Now we're down you know, they could go as low as two.

So as it was evolving, we were planning and preparing and trying to figure out how do we get around this. And, actually, what happened when we got the new plan designs, when the companies released it to us, it was actually a blessing. It's kinda weird. Like Yeah. It it lowers the guaranteed rate, but lowering the guaranteed rate didn't change the overall return the client gets because all the insurance companies did is adjusted the dividends.

So by lowering the guarantee, two other things happened that we didn't expect. First off, the the MAC rules, which not to get complicated, but it's the IRS the IRS basically, you know, making it difficult to put a lot of money into these.

Steve: Right.

Chris: That limit just bumped up. So now to design these plans Well, just

Steve: like I said that. Right? So the the MEC rule. Right? Am I saying it right?

Chris: MEC.

Steve: MEC. The MEC rule. Just real quick. Sure. Right?

For someone to determine the formula for it because I think it's important because it kinda determines how much you can invest Yep. In your own bank. Just real quick, layman's terms, what is the MEC rule?

Chris: It's easy. So it's it's called the MEC seven payer, the modified endowment contract seven payroll. All it says is for seven years, the IRS is gonna look at how much money you're gonna put into your premium deposits, into the policy. And based on that, they're gonna determine how much death benefit you have to have in the policy. Mhmm.

Now remember, the one thing that hurts us is the death benefit because the more death benefit we need, the more cost that puts, and it's we call it drag. When they change this rule now, we need less death benefit Mhmm. To run more money into the policies. So that's what happened.

Steve: Okay. Alright. So continuing on. Now you gotta modify your policies to

Chris: Yeah. So now when we started playing with this and doing the plan designs, we found we could put more money into the plans with lower death benefits. So all that means is the plan got a lot more efficient.

Steve: Mhmm.

Chris: So the plans actually performed better long term. In in some cases, significantly better.

Steve: Interesting. Okay. So it's been only, you know, a little bit over a month now. But the clients you're seeing right now that are are investing in this are getting a higher return.

Chris: Yep.

Steve: Okay. Now you're saying the guarantee got down, but all in all, can there be a lower return in the long run with with the newer plans?

Chris: Yeah. It could go both ways because the guaranteed floor let all the comp and here's the hard thing for us. All the companies are at different levels. We used to be four across the board. Now some of them are at two guaranteed, some are three two five, some are three seven five.

So it's it's a weird thing. But for example, before, one of the main companies we deal with was 6% with dividend. There's still 6%. Mhmm. The guarantee is three.

The dividend now makes up the difference. So nothing changed for the client. Gotcha. And, actually, one cool thing that did happen outside of being able to put more money in and make the plan more efficient, the cost for borrowing money out of the policies went down. So because the guaranteed floor went down, most insurance companies, not all, but most reduced the interest rate that, you know, the charge on the loans Sure.

By, in in some cases, a full percent.

Steve: Okay. So you could borrow but pay less interest in borrowing from your own policy.

Chris: And as you know, the whole idea with become your own banker and what we do is we're working off of a spread. Mhmm. We make this much. It costs this much to use money. There's always a spread.

And because of the uninterrupted compound interest we earn, that spread every year gets bigger and bigger. Mhmm. Well, automatically, our spread just like that got bigger because of this rule because now our borrow rate's less.

Steve: So just take a step back where our listeners that may not listen to the very first episode. Sure. What does it mean to become your own bank?

Chris: Alright. So let me explain it this way, and I'm just gonna use a prop. So all of us save money or at least I hope most of us are saving money, and we've been taught and I would say lied to about where our money goes. So you get paid and you trade hours for dollars and you get paid. When you get this money, what do you do with it?

You put it into somebody else's bank, a traditional bank. Then from there, you invest it. You buy cars. You start businesses like this. You do whatever you're gonna do.

So what happened with this concept is back a long time ago, the Rothschilds, the Rockefellers, the JPMorgan's, and all the wealthiest families, they they were bankers, but they didn't trust banks. So they needed to find a better place to store their capital. And the safest place then and now is none other than giant mutual owned insurance companies. So becoming your own banker is take the money that you normally would put in the bank, take the money you'd normally put into a four zero one k or other investments, and change just one thing. Change where your savings goes first.

Put it into this policy, but remember last time we did this, we talked about the machine. Mhmm. This is a specially designed and engineered whole life. Soon as I say that, the red flags go up. Boom.

Boom. Boom. For you, I remember when I was presenting, this concept, and you were about ready to stand up and go to the bathroom. And I'm like, you know, and this is the point where the people that think they know what they don't know stand up and go to the bathroom. And Steve was already standing up, getting ready to go to the bathroom.

Yeah. He sat down because everybody thinks that a whole life is the same. They think that all whole lives are created equal. The whole life that we use is the same way that a bank would use it. It's not the same whole life you're gonna buy from your brother-in-law.

It's not the whole life you're gonna buy from the insurance store. It's designed for banking, not for death benefit and life insurance. So mister Ramsey or Susie Orman, which I admire Ramsey, they think they understand what we do, but they don't because they just understand regular whole life. Yeah. So I first wanna make sure that the machine, which is the specially designed and engineered whole life, is not the whole life that you know.

It's completely different in design. So when we put our money in that machine, the whole life, that money is now earning a guaranteed interest rate from the insurance company plus a dividend. By today's standards, it's about 6%. I put that money there, but that's boring. No one wants to this is what people do.

They put their money somewhere, and to get on interest, they think they gotta leave it there. Mhmm. But this is the one change. I put my money here, and then I can immediately take my money out. And I can lend it out.

I can use it to buy a car. I can invest it in crypto or whatever, and my money actually never left my account. So when you use a bank account, you put, let's just say, a thousand bucks in a bank account, you take 900 out. How much is left in your bank account? $100.

Steve: Right.

Chris: And you're earning interest on a 100. In this, if I put a thousand in this account and I take 900 out, I'm still earning interest and dividends on the full thousand. Because the insurance company lets me take my money out Mhmm. But it's not really my money. They're giving me a loan against my death benefit.

Steve: Right.

Chris: Because all whole life has a death benefit. So all I'm doing is I'm borrowing against my death benefit that's gonna be paid out someday when I die. So now let's give the full circle. Now that I've changed where my money goes, I want all of you to think of a circle. Your money starts on the left side of the circle.

And I'm just saying all you should do here is change where that money goes. Then your money's gonna move over to the other side of the circle, which are gonna be the things you buy, the things you invest in, you know, just wherever your money's gonna go. We're gonna do that same thing, but we're now doing it with our bank where our money starts. And when it's over here, let's I I don't know. Let's go simple.

Right? Debt. Most people have credit card debt or some type of debt. So every month, you're making a monthly payment. So out of this, I've got what what do I got?

A $155. I'm just using it as example. Let's just say $5 every month right now, you're paying to Visa, and Visa is charging you 20%. So every month, you're losing the equivalent of whatever that interest is to Visa. So let's say I did took my money from my bank.

I move it over here and I pay off Visa. Now remember, my money never left, so I'm still earning uninterrupted compound interest. But I just paid Visa off. But I'm not gonna stop there because I've only finished half the circle. I'm now gonna take the $5 that I used to give every single month to Visa, which was the interest I paid them, and I'm gonna move it around the bottom part of the circle, and I'm gonna repay my bank.

So the difference here is you now just recapture the equivalent of making whatever you're paying Visa or AmEx or Discover. In this case, I let's just call it 20%. That $5 represents 20% that used to leave my household forever. Now that 20% is landing back in my bank. If that works for debt, what else does it work for?

Works for cars, works for planes. I mean, my business partner bought a plane using this. Instead of financing it through a bank, his bank financed it. We today use a lot of this for real estate. We take money from our banking systems.

We then lend it out to other real estate investors that need money. We charge anywhere between 812%, and then we take the interest and we circle back over here. It's all the same thing you're doing now. Becoming your own bank is the exact same thing you're doing right now. You're just changing who is holding your capital, And by that one change, you tap into what Albert Einstein calls the eighth wonder of the world, and that's Yeah.

Compound interest.

Steve: You know what's I think there's a lot of, like, bad PR behind this. Right?

Chris: For sure.

Steve: Excuse me. I don't know what's going on. So but I think part of it too as well is that insurance companies pay a very high commission. Like, you know, if you talk about, if you're in the insurance world and you sell car insurance, right, you know, you sell, you wouldn't sell health insurance, but you would sell life insurance. You would sell rental insurance.

Right? Home owner insurance. What whatever. All these policy they sell. But if I remember correctly, like, life insurance is where they get paid the most.

Chris: That's correct.

Steve: And so I think part of the reason why whole life has a bad rap is because people are selling these things, but not understanding how to build a policy.

Chris: That's correct. So let's talk on that because that's that's the biggest misconception. You know, I always quote, Will Rogers quote, the biggest problem in America is not what people don't know. The biggest problem is what they think they know that just ain't. So everybody thinks that a whole life is a whole life is a whole life.

Mhmm. That'd be like saying a Ford Focus is a Ford Focus is is a Ford Focus. But then you watch YouTube and you see Ken Block driving a Ford Focus rally car, a 130 miles an hour sideways around a turn in full control.

Steve: You're gonna

Chris: tell me that that's the same Ford Focus? No. His rally car was designed and engineered to do that task.

Steve: Right.

Chris: These policies are designed for banking. So when you get to commissions, I will be the first one to tell you a regular whole life policy. Let's use $10. Let's say you started a policy with your regular life insurance agent, and you put $10,000 in because you saw this podcast. You're like, oh my god.

That's awesome. Hey, Jim. I need one of those whole lives. And he says, great. How much you wanna do?

$10. And you put $10 in. Mhmm. He's gonna make between 5,500, and depending on how far up the food chain is, he could be making $9,000. Man, that's a good day in the office, isn't it?

Steve: Great day in the office.

Chris: And you know what happens? You have no money. Right. You have no money to use year one, no money to use year two. So how do we change that?

When we design these, remember I said we're gonna flip it. We're gonna design it backwards. We're gonna put the lowest death benefit so that you have the highest money. Now I design your policy the right way for banking. You give me $10,000.

I make a commission of 387 to $438. And we've done the math so many times in this. That's gonna be the range. So we're gonna make, let's say, under $500, but the other guy made 5,500 to 9,000. Who do you think wins in that equation?

Steve: I do. Yes.

Chris: You now have access to 80 to 90% of your money immediately because I took a drastic cut in my commission. The cut is 60 to 90% depending on the design. Right. So when we design these, you gotta remember that's how they're designed.

Steve: So who's designing is really critical?

Chris: Oh, it's it's imperative that you could find somebody that's gonna do it the right way and design it around your needs and goals. Because if they don't, there's only one thing that happens is they make more money and you have less. Right.

Steve: And I'm not opposed to making more money.

Chris: Yeah. Well

Steve: But not at my cost.

Chris: Exactly.

Steve: Yeah. Okay. So you got a lot of buddies on Wall Street. I know we've talked before, you know, privately offline and so on. What are they making right now on this what what are this or take right now?

Because this world seems kinda crazy. There's a lot of hesitation. People are some people are bullish, some people are bearish. All indication is everything is awesome, but it seems like people are keeping their money more. So there's you we're getting a lot of mixed signals right now.

So what are your buddies on Wall Street telling you? What are they seeing on the inside?

Chris: Wow. It's gonna we're gonna go down the rabbit hole. It's not

Steve: a rabbit hole. It's just a question about

Chris: Wall Street. It's a good one. I will tell you right now, and you can look at the biggest hedge funds out there. And I I work with many hedge funds. I work with the, you know, the people in the dark pools.

But let let's let's, I say Wall Street people, then let's talk about economists, leading economists, and then let's just talk about analysts. K? There's Should

Steve: economists really be an industry? I mean, I I kinda feel like that's just one of the it's like a sports, announcer who's, like, for sure, the Bengals are gonna win this game. And the other side is, like, for sure, the Rams are gonna win this game. And, like, no matter who's right and who's wrong, they're still employed. I saw a few economists.

But anyway

Chris: Economists are interesting. We gotta kinda take all the economists and just kind of listen to them and find one commonality of what they're saying, and they are all saying the same thing. One saying gold, one saying treasury bonds, but we can boil it down. So here's the thing. I will tell you firsthand, the big guys in Wall Street, the big money, the hedge funds, and the Warren Buffetts of the world, they are selling and they are sitting on cash or extremely conservative assets.

Like, a lot of them are sitting on treasury bonds. Like, the insurance companies are flushed with treasury bonds. Mhmm. They know what's coming. Ray Dalio's of the world.

I mean, if anyone's not watching or listening to Ray Dalio, he may be one of the smartest minds in the Wall Street world. He runs the largest hedge fund in the world, so he knows a thing or two. And everything comes down to cycles. All markets have seasons and cycles. Mhmm.

There are three dis definitive cycles we need to look at. There's a short term debt cycle. We've all lived through that. 2008 well, you can go back to the.com, then 2008. You can see those cycles.

They're anywhere between five and eight years. Mhmm. This one clearly is pushed, but we can get into why, and you guys can all see that. Then then there's the big one, and this is the most important one that you have to look at. It's the long term debt cycle.

The long term debt cycle is seventy five to one hundred years. The only starting place you can start from for the long term debt cycle is 1933. We can push it to 1930 to make it simple. Right? At the start of the Great Depression.

Why? Because this is when everything changed. It's when the Fed all of a sudden started printing money. It's when everything mimicked and looked just like it does today. Not trying to scare you, but this is what that looked like.

And so if we go fast forward from 1930 or '33 or wherever you're measuring, we arrive at about, depending on how you're counting, eighty to eighty eight years. K? Mhmm. If the cycle is seventy five years and we're eighty eight years in, where are we going? Well, it's not even where we're going.

It's where we're at right now.

Steve: Yeah.

Chris: But people just don't see the signs. The other cycle that you'd have to look at would be the capital market cycle. And that has come and gone, and we are there. Every single sign that you see out there. If you're in Wall Street, if you're an analyst, if you're an economist, you all see the same thing.

I see the same thing. We are at the end of the cycle. The government So

Steve: what is it that you're seeing that you said you're seeing the same thing?

Chris: Everybody is seeing that the weaknesses right now are we're already in this. Okay? And I think here's my opinion, and I can't tell you when this is gonna happen because I don't have a crystal ball. Matter of fact, mine broke. I put it in the shop, and they they can't fix it.

But, anyway, nobody can time the market. I don't care how good they think they are. No economist can tell you when the market's gonna go down. I think we are in for the next great depression. Now that's drastic, but all the signs point to one place.

All the economists point to one place. All the Wall Street guys know that this is going to be a big crash. The first leg of this crash, everybody thinks that it just happened. That was nothing. That was like in California, I'm murmuring.

Like, honey, did you feel that? Yeah. I I think we felt something. The first one that's gonna go down, which is the first dip, will, by the numbers, by the levels, be 50 plus percent. Mark my words.

You guys might not believe me, but just watch because I'll be right. 50 plus percent. And then from there, all the stop losses will trigger. Every single automated feature in Wall Street will trigger, and it will perpetuate the fall. Then the government will have to make a decision.

So do you know how wanna know why and know where we're at? The Fed minutes just came out. Most people probably don't even know what this is and what that means. But they came out and they said two specific things if you've read carefully. Number one, where are interest rates going?

Up. Up. How many times?

Steve: I mean, I I think they're just gonna have to keep going up.

Chris: Right. They said three, four, five. They didn't even really give a number, but it's gonna be more than what Wall Street was expecting. That was one of the reasons the market fell. But everybody's like, yeah.

But interest rates have to go up. The market's overheating. Look at inflation. We're almost at hyperinflation, or we are, whatever way you wanna look at it. So inflation's going up.

The Fed has to raise interest rates to curb this inflation. True statement. But, also, why else? What's the hidden reason why the Fed's raising interest rates?

Steve: Can't tell you.

Chris: Let's go back a year and a half ago when we did that last podcast. What just happened then?

Steve: COVID.

Chris: COVID. And when COVID hit, what happened to the markets?

Steve: Well, it was supposed to go down.

Chris: It did, though.

Steve: It it it did.

Chris: Was 34.

Steve: Yeah. For but it was very short blip.

Chris: Very short.

Steve: It was a very short blip, and then they opened the printing presses.

Chris: What else did they do with there's a lever they pulled.

Steve: I mean, there was all the stimulus money.

Chris: Well, before stimulus, the first lever they pulled was what? Interest rates. Remember, they went from wherever they were in interest rates down to close to zero. Yeah. That was the first lever.

Then they printed money. Mhmm. So that is monetary easing. So, you know, not to get boring, but the first thing they'll always do is pull interest rates. That stimulates the economy.

It makes money cheap. It makes money cheap for institutions. It makes money cheap for you and I to buy cars, refinance houses, everything we do. Then they just printed a silly amount of money Mhmm. Infused it all in.

And when the Fed prints money the Fed is not the government. Fed is a private institution owned by the largest bankers in the world, some of which I've already mentioned. So the Fed prints money. The Fed can't give you money. The Fed can't give our businesses money.

The Fed can only put money into the capital markets, Wall Street. And how they do that is they exchange the printed money that was printed out of thin air. They exchange that for paper debt called treasuries, and they exchange it with the US government. The US government then gets trillions of dollars. The Fed gets trillions of dollars worth of bonds.

Steve: IOUs.

Chris: IOUs. The government, US government, owes the Fed all this money. But then the Fed infuses that money into the markets. And you've heard about this, the bond buying programs. Right?

Well, the Fed now realizes they got inflation. So this is the perfect way that they can start pushing the interest rate lever up. But the thing no one will tell you and the one thing I haven't seen once on the news, I see it in YouTube and places, the hidden reason the Fed is raising interest rates pretty aggressively is not just to curb inflation. Fed loves inflation. Inflation in the well, the government loves inflation because it makes their dollars less.

Everybody understand inflation, you think?

Steve: I mean, we can take a second to talk

Chris: about it. One second. Inflation. Everybody thinks that things at the grocery store just get expensive. No.

Your dollars just got weaker there. That's inflation. It's a hidden tax. It is not groceries and gas gets more expensive. Your dollars just buy less because they're weakened because they printed a whole lot.

Steve: Cost the same. Our dollars are just no longer as effective.

Chris: Bingo. Bingo. A lot of people just think inflation, oh, everything got more expensive. Got more expensive because your dollars can't buy what they used to a year ago or two years ago.

Steve: Right.

Chris: I just wanna get that out of there. So they're raising interest rates because they know what's coming. In the first line of defense, if you were in battle, you know, we'll call it the government and the Fed, the first line of defense is the interest rate lever. Well, we're sitting close to zero. Where are they gonna pull it if the whole market lets loose?

They don't have any ammunition in the gun. They They gotta get that interest rate up so that when this event happens, they have something to stimulate the markets again. That's the first thing. Yeah. But that's not the important thing.

So here's what Wall Street knows. Here's what Ray Dalio knows, and here's what all the people in the no no that most people do not. So I I wanna be the first to tell you. It's not the interest rates being raised that's really gonna hurt it. It's a delicate balance, and it will stunt the growth of the market, but it's not gonna not gonna send it down.

K? What will is the second part. The Fed then said, we're going to unwind the balance sheet. So anybody in business understands what a balance sheet. Assets and liabilities.

We'll just keep it simple. To unwind the balance sheet, what the Fed will have to do is first stop buying as many IOUs because that they gotta slow that down, which they're already gonna do. By March, they're gonna taper the bond purchases. But then they've said that they're gonna start selling bonds into the open market. Jay, you ever remember the movie Spaceballs?

Steve: Of course.

Chris: I want everybody to try to just get a visual picture. In the movie Spaceballs, which was an epic movie, you all should watch it again, there was a part where the bad guys, helmet, rolled up to a planet, which was clearly Earth, and their spaceship turned into a maid and put a vacuum cleaner on Earth or the planet to suck all the oxygen out. When the Fed starts selling bonds in the open markets, I want you to envision that that vacuum is the Fed, and I want you to envision all the trees and the air that they were sucking out is money. It is going to literally erase all the money they've just printed by sucking it straight out of the markets. In doing that, that right there will begin the process of deleveraging.

That right there will change the tide, and everything will go down. Mark my words.

Steve: So explain to me how unleashing bonds into the open market causes the money to get sucked out of the economy.

Chris: Well, they're gonna sell the bonds in the open market. Mhmm. Because bonds are one of the most liquid assets you can ever own. A treasury bond, hands down, is the the most desirable and liquid asset. Because whether you think or don't think The United States is still the greatest country on Earth and we still, you know, take precedence, our dollars, these things are still the reserve currency.

These are still what oil is traded in. This is the almighty. We are the nicest house in a really crappy neighborhood. Mhmm. So therefore, every country wants our bonds.

Every other everyone else wants our bonds. Well, except for most people here. They're like, I don't want those governments doing this. But So

Steve: releasing the bonds. Selling them. Selling the bonds.

Chris: Mhmm. They're gonna sell them

Steve: Mhmm.

Chris: To you and I and everybody else that wants to buy them. In selling them

Steve: We're taking money giving them the money.

Chris: It's an exchange. It's an IOU. They're gonna sell it in the market. They're not gonna sell it. They're not gonna get paid by the government because the government has a long time.

They're not gonna pay it. They're gonna pay it with weaker deflated dollars. But by selling them in the market, the Fed gets all the money, starts reducing that off the balance sheet.

Steve: Gotcha.

Chris: But all the money comes out of the markets, which is where it's all at. Right now, the reason so many people feel rich and they feel like they've got a lot of money is because we're in that period of the cycle. Mhmm. Of course, it's supposed to feel like this. It's felt like this every other period of time in history back to where I've studied 15 hundreds.

It's always been like this. This is where money's easy. Money's cheap. Everybody feels rich. But why do you feel rich?

The value of your house has skyrocketed. So you got all this equity. We can hit equity down the line. Right? True or true?

Second thing, your stocks have done very well. Until just recently, they've been doing very well. Your crypto accounts skyrocketed, right, till recently. But all the things, assets that are controlled by Wall Street or some component of Wall Street, maybe not so much crypto, have all been inflated by two things, Low cost of borrowing debt. K?

And secondarily, massive amounts of monetary printing and money being infused into the markets and into our pockets. Mhmm. Quite honestly, like, money has been very easy to get. Yeah. Banks are flushed with money.

They just need to move it because banks, just like our banking system, the number one thing we have to do is move money. If we're not moving money, money is dying.

Steve: Right. So they sell a bunch of bonds. They're sucking money out.

Chris: They're not trying to suck money out, but that's the that's the

Steve: But that's gonna be the effect.

Chris: That's the effect.

Steve: Gotcha. Because I'm I'm thinking right now.

Chris: Keep this super simple and high level. I mean, we can it can get very complicated very quick. Sure.

Steve: So, I mean, because I'm thinking, right, we're talking about the big, you know, funds. You got Vanguard. You got BlackRock, whatever. And they're basically they've got they're, like, at the craft table. They've got their chips and everything.

Everything. Right? I mean, like, they've got large percentages of every hedge fund and every iBuyer out there. Bingo. So they own all these houses.

So is your speculation your your suspicion that once this happens with them selling all the bonds, everything's gonna crash. This is including the real estate market?

Chris: That's a great question. I would say, yes. Real estate's gonna crash. But let's define crash. Is it gonna be 2008 all over?

No. Depends on what economist you listen to, but I think real estate will pull back just because money will get more expensive. Demand will weaken on it because it costs more to do it, and there won't be as much money in the system for people to just throw it around and pay cash for houses. Somebody just the other day told me, and have you had this happen out here? They made an offer on a house.

And the the other agent calls back and says, hey. Listen. We got your offer, but nothing you didn't write in a price or terms. And the person says, yeah. Put in whatever your number is.

Put in whatever your terms are. We're a cash buyer. Listen. That's just insane. Yes.

But

Steve: We we there's an agent in our office that does that.

Chris: Great. There we go.

Steve: He works with hedge but he works with hedge funds.

Chris: Okay. Now let's talk about who the buyers are. Is it really little miss Mary who's buying her her dream house? No. No.

It's hedge funds, folks. It's BlackRock. It's Blackstone. We already know what happened to Zillow, but Zillow was a Zillow was an ant in a world, just in a whole world. They they were an ant.

That was the size of them. Yeah.

Steve: Because even though they're a billion dollar company or a unicorn, maybe $9,000,000,000 company, they're still

Chris: Dude, that's huge.

Steve: A smaller player.

Chris: Everybody thinks that's a lot of money, but that that is in the grand scheme of a hedge fund.

Steve: You and me is a lot of money.

Chris: Oh, it's significant. I'm not discounting that.

Steve: For a hedge fund, it's like

Chris: this big.

Steve: They're just a small percentage of your balance sheet.

Chris: Right. So we really gotta look at the two that were in the news, BlackRock, which is the almighty and Blackstone. So they are buying real estate. A lot of people are like, why are these iBuyers, BlackRock, Blackstone, hedge funds, buying all this real estate? We already talked about this.

They have analysts. They have economists. They know what's coming. So they have in get they've gotten most, not most, but a lot of their money out of the markets. That money can't just sit in cash.

They understand inflation, so they gotta move that money, and they gotta put that money into an asset that's going to generate a return for their investors. What better asset is there than real estate? And even though they're overpaying for the real estate, it doesn't matter. It's not their money. It's investors' money.

And the investors' money, they really only have to return maybe 3%. So BlackRock and Blackstone are buying all these these houses, neighborhoods. I mean, just blocks. I mean, it's gonna get worse. They're doing it, and then they're renting those houses, turning on a cash flow.

And on their balance sheet, the appraisal's the almighty, that's the value. So from a balance sheet standpoint of a a hedge fund, man, they're they're looking pretty good.

Steve: You know, it's fascinating because I got a chance to listen to see, some of these hedge funds talking about, you know, their process in buying and and their their future. And, like, they're saying, like, you can't compete against us because you, if you're financing it, have to base off sold comps for the last six months. Right? If you're a cash buyer, great. Right?

If you're a flipper, fantastic. But you need to make a profit in three months. So you have to pay what you think this can sell for in three months. But they're here for the next five to ten years. They don't care what it costs today No.

Because they're looking at what's gonna sell for in five to ten years.

Chris: Absolutely correct.

Steve: So it's fascinating to see, like so you can't compete against them because their model is completely different than a model that you and I have to survive with.

Chris: We could never compete against them. Yeah.

Steve: I can never say I'm gonna buy this. I don't care what I pay for today because in five to ten years, it'll be worth this. Like, that no. I need to either profit today or at least be able to survive the monthly payments I can sell it in five so I could still be here in five to ten years.

Chris: Oh, man. You're hitting such a great topic. You're absolutely right. So now we go back to the cycles. Right?

There was a five to eight year cycle. There was the big one, which is seventy we'll call it seventy five to hundred year cycle. So if you look at the just those two, those are the big ones. And when it does go down, does anyone know how long it takes for that period of that decline? K.

And and I'm trying to keep the name simple. There's terminology for this, the decline and then the recovery. How long did you say most hedge funds have a time horizon for?

Steve: Five to ten years.

Chris: Wouldn't you just wouldn't it be funny if you did the research and found out that that cycle is ten years?

Steve: Yeah. I was gonna say that seven yeah. I think the great depression was, like, seven or eight years.

Chris: That was eight years. Yeah. Eight years. But it was actually ten if you really wanted to get back to where you were. Yeah.

So there you go. Hedge funds don't care. They will cash flow that thing just like all of us do with rentals. They will cash flow that entire thing through those ten years, make money, pay their investors, laugh at everybody else.

Steve: Appreciate the asset.

Chris: Yep. And they and they got the balance sheet item. Boom. They already locked it in. So they're good, and they will continue to do this.

The thing that most people don't know unless you really read, a lot those two hedge funds I mentioned, I'm sure there's others, have federally insured monies that they're using to the tune of trillions of dollars. That's what's frustrating.

Steve: That's what's frustrating. Right? Again, you and I, we can't play with this business model. And if we lose, we lose.

Chris: Yes.

Steve: They They can not only play with this business model, but they got their big brother in their pocket that they can always call for a lifeline.

Chris: 100%.

Steve: Totally unfair.

Chris: They are at the top, folks. Yeah. We are way down here, and they have you know, they're the puppeteers. Yeah.

Steve: So you're saying Ray Dalio

Chris: I love him.

Steve: Is got all his money, and he said bonds and what?

Chris: So, you know, if you really wanna look at Ray Dalio, go to economicprinciples.org. Okay? He's got a a great thing. He's got all of his white papers. You won't read them all, but I have.

He also if you Google Ray Dalio's, portfolio suggestion it's interesting. I've been following his portfolio suggestions for years now. His portfolio suggestion just drastically changed. And I'll tell you what it changed. He went from you know, he's an equities guy.

He has to be. So he buys a lot of equities, but now he has shrunk the equity position of his suggested portfolio. And now his bond position for long term bonds, which are US Treasury bonds. Okay? Long term Treasury bonds, if I'm not mistaken, and I might be off a couple percent, is 40%.

But then he has another column, another little piece on the pie chart that is intermediate term bonds. This would be like ten year bonds, ten year Treasury bonds, and I believe that's 15%. So his portfolio suggestion, this is a hedge fund, equity based hedge fund, just went from being heavy equities, alternatives, and other asset classes to now being 55% in long term treasuries and intermediate term bonds. I don't care what you think about treasuries. Sometimes you just gotta be smart enough to follow the big guys.

And I can tell you exactly why and what that is if we want to get into what treasuries are. So treasury bonds are IOUs guaranteed by the US government. So the first thing to understand is who wants treasury bonds because they pay crap interest. Because a bond is nothing more than an IOU. The Fed prints money, trades that money to the US government in exchange for, let's just say, a thirty year treasury bond.

That thirty year treasury bond might have a yield or they call it a coupon, which is the interest that that that you're gonna pay you, me, or anyone else of 2%. I'm just using simple numbers here, folks. Might be one eight, might be two two. 2%. That's the staple.

You're gonna make 2%. How many of you would be really excited making 2% in your money right now when inflation's seven?

Steve: Not excited at all.

Chris: Right. Not at all. So if you went to your financial advisor and you say, hey. Listen. I just heard this guy on this podcast.

He said we should load up on treasury bonds. And your advisor would say, that's the stupidest thing I ever heard, which surprises me. Because as you know, I spent sixteen years in Wall Street at a very high level. And number one thing you will learn when you become a stockbroker, quote, unquote, the series seven exam, is you will learn the inverse relationship of bonds to interest rates. It's kinda funny.

We're going on a journey here. Mhmm. Treasury bonds, or any bond for that matter, has an inverse relationship to interest rates. Draw an x. On one line is interest rates.

Right now, where are interest rates going?

Steve: Up.

Chris: Up. So on one line, you have interest rates going up. On the other side of the x, you have an arrow going down, which is price. When interest rates go up, the price of bonds goes down. It's always been like this.

It's just that's how it is. So right now, we know interest rates are going up. No ifs, ands, or buts about it. Interest rates are going up, which means the price of bonds are going to go down. Now let's talk Warren Buffett for one quick second.

What is the number one thing Warren Buffett says

Steve: to all of us?

Chris: But how do you not lose money? That's three. Buy low.

Steve: Buy low.

Chris: Sell high. High. Buy low. Sell high. So right now, wouldn't you want to take your money and buy an asset class that's going down?

Well, you would. And institutions know this, and so does Ray Dalio and so do insurance companies. So when inch when interest rates are going up, people are buying treasury bonds because that's the smart thing to do. But what's the next thing that happens? This event, this storm, this market correction, recession, depression, whatever you wanna call it.

When that goes down, the first thing the US government will do and the Fed will do is drop interest rates. I promise you it would be the first mode that they will do. When they drop interest rates, remember that inverse relationship. Now on the axis with the arrow going down, we take the price and we replace that with interest rates going down. The axis going up, we replace that with price.

Now your bonds skyrocket. Look at it. Pull up a thirty year treasury bond and look at the performance in every other recessionary period. When the Fed pulls rates, the bond goes up in price.

Steve: Well, you see it. Anytime anyone's uncertain, anytime you're losing confidence in the market, you go away from stocks and you go to bonds. Right? Bonds protect you.

Chris: But it's always too late. Everybody reacts too late.

Steve: Yeah. They get reactive. But generally speaking, right, in a good market, you wanna be in stocks. In a worse market, you wanna be in bonds.

Chris: They call it a flight to safety. So when the market goes to crap, people's money flows to the safest asset.

Steve: Bonds and assets, real estate Hard assets. Minerals, whatever.

Chris: Tangibles, gold, silver. Yep. Right.

Steve: Okay. So, you you touched on a moment ago where you're talking about diversifying. Right? So So we talked about bonds.

Chris: Mhmm.

Steve: And then you mentioned a little bit about crypto.

Chris: Yes.

Steve: So you're you're you're in a crypto at the moment. Sure. So why?

Chris: Well, crypto has zero intrinsic value for so for Wall Street guy like me or, you know, Warren Buffett, like, we really don't understand it because we can't use the typical metrics.

Steve: I'm kinda with you on this. It's it's Yeah. There's no intrinsic value.

Chris: But you know what there is? Let's talk Bitcoin. There's no

Steve: gold standard.

Chris: No. It's not gold. A lot of people wanna compare Bitcoin to gold. Don't do that. You'll you'll be you'll be very sad.

But the the one thing about Bitcoin is there is a finite amount. Mhmm. Okay? There's not a finite amount of gold. There's more gold than we can ever mine, and there's no telling how much There's

Steve: no gonna afford.

Chris: Yeah. But yeah. Exactly. But Bitcoin, there is a finite amount. So when you talk about valuing Bitcoin, it is based on two things.

Number one, the finite value. K? The finite amount of it creates a value, perceptual. But the biggest thing with any crypto is investor confidence. Mhmm.

What are people afraid of right now? They're afraid of this. They're afraid of holding the cash because they know it's losing money.

Steve: Faith in the dollar.

Chris: Right? The faith in the dollar. So what's the alternative to the faith in the dollar? Gold? But gold's pretty high right now.

Silver? Precious metals? Yeah. Maybe. Or crypto?

The new kid on the block. It's not really that new, but it is. So a lot of money is flown to crypto. Mhmm. We have millennials now making good money.

Actually, some millennials are making significant amounts of money.

Steve: Bitcoin millionaires.

Chris: There you go. Yeah. So they're putting money into crypto. And I think crypto so there's two ways to look at this. We all heard recently that the government's going to, in February, do an executive order to start monitoring crypto.

We knew this was coming. So if you think that that was a surprise, you I don't know what rock you've been living under. But here's the thing about crypto that's interesting. You can make a ton of money in crypto if you get rid of FOMO. FOMO is the fear of missing out.

If you stop chasing unrealistic returns, if you stop thinking that Bitcoin's gonna go to the moon. I mean, how many times did I have to hear in 2021, Bitcoin's gonna be a $120 or a 120,000? I I just listen to people and I'm just like, okay. Great. Whatever you say, buddy.

I you know, it's like your Uber driver telling you, oh, you you buying Bitcoin, you buying Doge, you buying, you know, Shiba Inu or one of the other many garbage coins. I don't wanna swear, but we know what they're called.

Steve: And All coins. They're all coins.

Chris: All coins. We'll just call them.

Steve: But we got we got we we have friends that are billionaires and Shiba Inu or whatever.

Chris: I know. And you're going to. I mean, it's that it's that time. You're always gonna have the early adopters that make a bunch. But, you know, for every one person that becomes a billionaire or a multimillionaire on

Steve: it They it's billionaire, but you can't access it. So

Chris: Bingo. That's the problem. Where's your liquidity? You see, when you talk about money, what is money? Money, this, which is the only thing we can call money in this country.

This is a means of exchange. Money is a means of exchange. Money for food, food for money. Money for car, car for money. Money for house, house for money.

Can you take your Bitcoin, Ethereum, Doge, Shiba Inu, whatever one you want, and buy bread? No. I mean, we did have a glimmering hope when Elon said, hey. You can buy your Tesla with Bitcoin. Woo hoo.

We're starting to get there. Now we got an exchange. Then he came back and he said, hey. Sorry. Bitcoin's bad.

Bitcoin mining is bad for the environment. You can't buy a Tesla anymore. Darn.

Steve: Yeah.

Chris: Or you're gonna buy the Tesla, and all of a sudden when you're ready to pay for it, your Bitcoin just fell 30% overnight. Right. It's very volatile. But that volatility can make you rich if you know how to trade the levels. I mean, how I've been doing it is for a while, when Bitcoin was going up and trading, it traded 40 to $50,000.

I'd buy it when it got to 40 or 42, and I'd sell it when it got to 50. And then when it ran through that one time, it got up to 68. I held it a little longer, and I think I got out at, like, 62. And people said I was crazy. Why did you sell?

Because, listen, I'm an investor, and I invest with rules. Mhmm. So I follow my rules. I actually broke my rule there and waited a little longer, and I got out. So now where did Bitcoin just go?

Steve: I think did it hit 28?

Chris: 28. Yeah. It fell down to 28.

Steve: So what are those rules?

Chris: Okay. So you want the rules for investing. It's very simple. Outline how much money you're going to allocate in your investable assets into any one asset class. K?

I don't care if it's stocks, bonds, any treasury bonds,

Steve: Futures.

Chris: Futures, gold, any of those. That's why we build these portfolio models. How much of your investable dollars should go to each one of these asset classes? It's diversification. Secondarily, you then have to establish what is going to be your entry point.

Well, some people just don't know how to do this. And the only answer I can give you, if you wanna know when to buy, the answer is always. Dollar cost averaging. Bitcoin, like, I I buy Bitcoin and Ethereum. Those are the only two I really care about.

Maybe Cardano, but whatever. Bitcoin and Ethereum. Every single week, I put several $100 into each of them systematically. I don't care if it goes to 60. I don't care if it gets down to 28.

But this recent fall when it was falling and it got down to I started buying it about 34,000, and I bought deep. And I was buying and it dropped. And I was buying and it dropped. I was buying chunks. I was dollar cost averaging the whole time, and then I was buying chunks.

Now when it comes back up so my rule is, what is your buy in point? Well, my buy in point, I was actually 20,000 because I think we will test 20 to 23 based on the resistance levels. And I I figured, alright, we might not get that low this time, so I started buying heavily. But you know what I will do? We're now, I think, about 40, maybe even approaching a little more.

I was looking at it earlier. My selling point, I'll start really considering selling that position at about 45. If it's running really solid, I will hold it no more than 50. The rules. Your buy rule, set it.

Is it just dollar cost averaging? Great. Don't defy that rule. Is it I'm gonna buy when it gets to this price, and I'm gonna buy up to 10%? That's your rule.

But don't just buy. That's that's not the most important thing. Where are you gonna sell? What's your exit point? Because there's three rules to investing.

Buy low, sell high, and don't lose money. The third, which you started with, is an automatic if you do one and two. So those are the simple rules. There's more, but set your parameters, set your rules, and follow them.

Steve: I think kinda what you're saying indirectly is make a decision, have a plan, execute your plan, and remove your emotions from it.

Chris: No emotion. It was just tough. Like, for me Mhmm. I have emotion. Mhmm.

K? I don't trade my my portfolios. And I have zero money, zero money in the stock market. We have a private hedge fund, and our private hedge fund invests solely in individual companies that are not public, that have an exit strategy, or will be going, you know, to an IPO.

Steve: So former Wall Street guy, $0 on stock market. Not 1p. Why?

Chris: Because I know what's coming.

Steve: Because you because what you're seeing right now so last year, did you have money in the stock market?

Chris: Very little, but I was I I have a trader, so a full time trader's name, Sodi. He was trading, but we would trade options, and we would trade options intraday, meaning during the day. When the market opened, we would trade, and when the market closed, we were already out of the position. We never wanted to hold overnight, and then we started holding overnight a little bit, but we're hedged. So we would not get into it.

But if the market tanked overnight, we had a hedge, almost like a a position that would make money if it went low, and we did that.

Steve: So it's fascinating. Yeah. So it's just it's just, you know, for someone that's former Wall Street, like, did really well in in Wall Street to say, I have $0 on stock market. Done. I mean, that's great.

Right? Because we're predominantly a real estate show, so I appreciate that. Yeah.

Chris: So I think people that are putting money in stocks right now, you might hate me for this, but I think you're absolutely foolish and stupid. They already said it. You can hate me all you want, but we'll see who's right there later.

Steve: Yeah. Well, I mean, the good thing is you are training it previously certified, but you're actively researching because it's something you're passionate about. Right. So, respect you a lot more than I would any other economist.

Chris: I read all the economists. I get through their nonsense. Oh, this guy's so heavy on this. This guy's on that. You just gotta find the commonality in in economists.

Steve: Yeah. But I just treat them just like weatherman and sportscasters. That's all they are. Yeah. It's all they are.

So your point though about crypto and having no intrinsic value, because that's something I've been struggling with. Right? Like, what are we comparing this to? Like, I mean, the only good thing about it is that, you know, it's unattached to anything else Mhmm. Except a couple weeks ago, when everything else is tanking, it went along with it.

And it's supposed to be decoupled. It's supposed to be decoupled. It's supposed to be unrelated to it. But it certainly didn't act that way.

Chris: Investor confidence. Yeah. When the markets are going up, investor confidence is up. Mhmm. When Bitcoin go into 50 and it's running, FOMO kicks in.

Investor confidence goes through the roof. They pile money in. When it's going down, people get scared. Fear kicks in. They sell.

Steve: But I thought it would be more like a bond. Right? Where, like, you move money from stocks to bonds, and bonds sucks. I thought it'd be like stocks to crypto crypto sucks, but it was like everyone was just liquidating at the same time.

Chris: It is interesting because I I would have been I would have sided with you several years ago saying, hey. This is they they call it a non correlated asset. This is Bitcoin and Ethereum, because I'm only talking about those two, are non correlated to the markets because they should be. They're decentralized. They hold a different set of values.

So why is it that they're trending almost exactly with the markets? Then you gotta ask a question. Are the markets following crypto, or is crypto following markets? I mean, markets are much bigger than crypto. Crypto's a tiny little, you know, piece of it, but you you do have to ask that question.

Steve: So another thing that's interesting, and, you know, I'm seeing listen to I I only listen to one episode of Joe Rogan. You know? And the there's a there's a challenge in that the person that's sitting at the board on BlackRock is super well connected with everyone in in BC. And not only are they on the boards of Big Pharma, they're also on boards of big media, and they're also on the boards of every other, literally, every other important corporation.

Chris: Yes.

Steve: So they kinda control everything and the government. Right? They're all in the same spot. So, you know, looking at crypto is decentralized. And so that is generally if you're a small market or a free market economist or or believe in capitalism and and and federalism and so on, this is a great thing.

However, I'm wondering how far we can go because could this not if we're gonna have if we're gonna decentralize everything, like, right now, we're seeing, these people in Africa, The Philippines. They're making money in the NFT world. Right? And they're just playing games and they're making money. They're making more money playing games because it's a play to earn online than they ever make farming.

They never do working hard, hard labor. So I'm wondering how far we wanna go with this decentralization or we want no government involvement because that's as a libertarian, that's generally what I want. But how far do we wanna allow this decentralization to go?

Chris: So when we got back to the cycles, in the cycles can also tell a big story about empires. Mhmm.

Steve: You can

Chris: go back to the Roman Empire. You can go back to UK. You can go to to Spain. You can go to China. All empires have a rise.

They have a top, and they have a fall. Mhmm. I don't wanna agree with this. I still think The United States Of America is the greatest country on Earth, the land of the free, or not so much anymore, but we are still the greatest country on Earth. And it it would sadden me to think that we're not going to be the world power anymore.

It's scary to see what's going on with these this stupid I don't know. Russian roulette with Russia. Now Putin's a bad he's a bad dude, man. I wouldn't wanna monkey with him. But he's just it's kinda like he's sitting on the border just being like, here you go, Biden.

See it? Put my foot over. Come on. You know, it's it's scary, but or is it planned? Then you gotta really say, is this part of the show?

Mhmm. Because wars create money for the central banks.

Steve: Yeah.

Chris: Because the central banks, the Rothschilds, the Rockefellers, fund wars.

Steve: Right.

Chris: Not only that, if you're looking at a great reset, if we're trying to devalue the dollar because, really, they don't want the dollar anymore, they want some form of a digital currency, what better way than to go to war and then basically use that as the excuse to change to a new world order or the great reset. Listen. I know this is Farfetched stuff, and I this isn't I don't wanna get too deep into it, but as of right now, the US dollar is still a reserve currency. It is still the most most powerful currency, and The United States is still the most powerful country. And I think we can enjoy that while it's here, but the crypto side of things, how far are we gonna push that?

I think what you're going to see is something very much like China with this new executive order. I don't think they're gonna I hope they don't ban mining, but they could. Mhmm. They're definitely gonna put regulation because crypto's like the wild, wild west. Yes.

You're supposed to take pay tax, but there's wallets where they can't track. It is absolutely, undeniably the number one way money is being moved in the black markets, you know, in the cartels, dark web, whatever you wanna call it. So that's what they're trying to stop. But to do that, they will probably have to do the same with Bitcoin. And, again, I'm only talking Bitcoin now because it's a big dog.

They're gonna have to do the same with Bitcoin that they did with gold. They're gonna have to pretty much make it illegal to own and then say you have to hand in your Bitcoin, and we will then give you this new digital currency. And a lot of people years ago would say that's impossible. It never happened. It just happened in China.

It just happened. It is? So pretty much I mean, they pretty much banned it, and now they've created their own digital currency, and they're trying to create means of exchange by allowing people to buy food. I just saw this. Now here's the hard part is what you read in the, you know, well, the news, I don't watch.

But in the media, we'll call it, what's true and what's not anymore. That's the hardest thing.

Steve: What was really fascinating? This is definitely, you know, something that may not be an exciting topic for the listeners. But, you you know, one of the ladies they were, nominating to be part of the Federal Reserve, Federal Reserve was, someone that promoted we should close all private banks. I was like, man, that's a scary thought. Like, this is a person that could be an important person, in in in banking.

And then she says there should be no private banks that the government should we should all have our money.

Chris: Always gonna be one, which is gonna be the central banks.

Steve: Yeah. It's kinda crazy. So, I do wanna talk about the six laws of wealth. K. So you're talking about, you got a baby.

She's, like, two now?

Chris: She's 20 old.

Steve: So almost. Almost two. Because I still remember, like, you know, when when you brought her home. So you're wanting to teach her

Chris: Yes.

Steve: The laws of wealth and her to avoid the big lie.

Chris: Right.

Steve: So what do you what what do you hope in the teacher?

Chris: Alright. So one of the biggest gifts I can give is the gift of knowledge to my daughter. But in a crazy world like this, you can't just use speculation or opinion or a lot of this stuff we're talking about. You have to get down to the core laws. And the same laws, whether there's six or 10 depending on, you know, how what you determine as a law, the same laws of wealth have been in effect all the way back before Christ.

I mean, you can read the book, The Richest Man in Babylon, and you can see that, like, these laws I'm gonna tell you are the same. So I decided to write a book. And I started it. We've got the manuscript partially done. And this book is going to be written in a third person.

It's going to be about a father. It's someone telling a story of a father telling his daughter bedtime stories. And each one of these stories is about a fictitional character who basically disregarded one of the six laws of wealth, and it goes one through six, and the impact of what happened because they didn't follow the laws. By the sixth law, when that father's telling the story to his daughter and his daughter at this point is a little bit older, so she kinda has heard stories about her dad. She says to her father, she says, dad, I love this.

I'm learning so much. But all these stories that you're talking about and all these people, they all sound like things I've heard that happened in your life. Mhmm. And she finds out that every one of these stories was her father's story of the failures he's had because he didn't follow the six laws of wealth. And at the end, when she masters the six laws of wealth and the 10 rules of prosperity, the father gives her a piece of paper that has a picture of a key.

And she's seen the key because the key's on his key chain, and she's always admired it because it's a pretty key. And he hands her that key at that very moment. That key is the key to the inheritance. At that point, my daughter will have learned and mastered those laws, and now she can inherit their fortunes. But the six laws, let's get in it.

They're very simple. I'm just gonna give you the top line. Law number one is a simple one. You must keep one tenth of your gross income. Keep is the same as save, but we make money.

K? We work for this, and we make this, and then much of it leaves to somebody else. I'm only talking about what we keep, what you save. You must keep one tenth of your gross income, not your net, your gross. Law number two, one of the most important ones, and this gets back to the become your own banker.

Your money must work for you. Your money cannot sit. K? We are the only people who have literally been taught to believe that we should park our money somewhere, give up control of it, put it in a bank, put it in a four zero one k, put it somewhere, and just leave it sit. And then we're gonna be wealthy.

We're gonna be able to retire. We're gonna have all this money. Absolutely false. Banks don't do that. Banks take your money, and do they put it in a little black box with your name on it?

No. They move that money in those glass cubicles. They lend it out. Their money is constantly in motion. There's not a business in the world that doesn't keep their money in motion.

Otherwise, they go out of business. We are the only ones that have been lied to you to put our money somewhere and just leave it set. So law number two is your money must go to work for you. And when it goes to work for you, one additional thing, your money will produce offsprings, and and those offsprings are in the form of interest, dividends, and gains. When you make interest, dividends, and gains on your money working for you, you not must send that back out to work as well.

So that's law number two. Law number three is the most violated law right now, and it is simply protect your wealth. Now, in real estate, how I would frame up real estate and how to protect your wealth or if you're a lender lending on real estate is Ricky Bobby in Talladega Nights. His father said, son, if you're not first, you're last. Well, the same is true with lending money and the same is true with investing money.

Be protected. Invest in things you know, like, and understand. Hey, listen. If you know, like, and understand crypto, invest in it. But if you don't, don't.

If you know, like, and understand NFTs or or metaverse, great. Invest in it. If you don't, stay away from it. Secondarily, if you're going to invest with somebody, you know, if I'm gonna invest with Steve, I want to know that Steve is an expert in the field of which I'm investing in in with him. And I wanna know if he's an expert through knowledge, through wisdom, and through time.

Because the only way to get wisdom is to stand the test of time, which includes failing. So that is the third law, protect your wealth. Fourth law, this is another big one right now. If you seek unrealistic returns, your money will flee you. How many of you out there are seeking unrealistic returns?

You're trying to you hear these stories of in, you know, in crypto or anywhere in the stock market, people making $30.40, couple 100%, the staking returns of 50%. People don't even understand staking. You know? You're not getting paid in US dollars. You're getting paid in a token or a coin that has a valuation that really intrinsically is worth zero.

So be careful with staking. They might say they're paying you 20 or 10%, but it's 10% in a coin and whatever that coin's worth. So do not seek unrealistic returns. Remember the tortoise and the hare. K?

The tortoise won. Building wealth is a marathon. It is not a sprint. Anyone sprinting to build wealth will lose their money. Rich, you know what rich means?

Rich is the the person who found money or made a bunch of money who has not yet learned how to keep it. Well, that's one way to keep it. Law number four. Law number four is not just a law of wealth, it is a law of how we should live every single day. And it is you should always spend every single day of your life giving.

And when I say giving, I don't mean you have to give dollars. Spend your time solving other people's problems, and do it unconditionally. Don't ever do something with an expectation of somebody giving you something back. Do it because it feels good. Do it because it's the right thing.

If you just spent all your time Zig Ziglar says it best. Right? If you help enough people get what they want, you get exactly what you want. I am living proof of giving. My success, I will say, is almost solely due to giving.

As I started changing everything when I was in Wall Street, it wasn't giving. It was take. It was make, and it was bigger things, bigger houses, bigger cars. And what happened? My money fleed me.

My money left every time. So give unconditionally is law number five. And law number six is simple. We're here on this earth for a short period of time. And while we're here, we need to spend our time creating a legacy, a legacy that outlives us.

And I'm not talking about a legacy created by life insurance. I mean, a legacy that lives beyond and helps people live a better life in one way or the other. And, hey, I'm not discounting money. Money helps us live a better life. It is a very important tool.

So those are the six laws of wealth.

Steve: Got it. And then finally is what are you doing to prepare for what you feel is coming?

Chris: Great. So let's go back to the beginning. Become your own bank. Those stupid specially designed and engineered whole lives. I I have nine policies now.

I have one on my daughter, two on my wife, and two on or I'm sorry. Three on Larissa and two on my mom. I funnel as much money through my banking policies as I can because my money is guaranteed. And, you know, who who else is doing this? Banks are the you know, banks are the number one purchasers of whole life in the world.

I just looked. Twenty twenty one banks own, I'm gonna try to get this right. I think it was 47 it's either 47 or $94,000,000,000 according to 2021. It's insane. Banks are the number one purchaser of what I'm telling you.

I put my money in these whole life policies, but then what I do is I'm always seeking opportunities. I want people like Steve to call me and say, hey, Chris. I got this real estate deal. I'm gonna do this Airbnb. I need $500.

Can you give it to me in thirty days? Yes, sir. Take a loan from my policy. I give him 500,000. He exchanges interest back to me because my money is now working for me.

I take the interest he gives me. I put it back in my policy, and I find another place for that money to go to work. In doing this, I get all the money back for all the vehicles I ever drive, buy, drive, and own. Heck, my partner bought an airplane, and he's getting all the money back for the plane. Second thing I'm doing, I am heavy on US Treasury bonds.

No secret. I own a lot of US Treasury bonds. I have just bulked up my Bitcoin and Ethereum positions. I'll sell them, but I have quite a bit of that right now. And the only other thing I'm doing right now, which is gonna be contrary to what you're doing, I had a large rental portfolio.

You know, me and my wife have flipped two two hundred well, we have them under the when these three are done, 271 houses. Right now, I'm selling all of my real estate as much as I can. I won't be able to get rid of it all. But we went from 91 doors, and we're now down at, I think, 16 left. And I'll probably sell down to 13 because I don't think real estate's gonna be this expensive for a very long time.

So I'm taking the money off the table, and people are like, oh, you're crazy. You're paying taxes. I also firmly believe that taxes are at the lowest they will ever be for the rest of my life. So, uncle Sam, thank you. Here's your money.

K? And that's what I'm doing.

Steve: Fascinating. Yeah. You're one I haven't heard a lot of people talk about selling their assets right now. But if if you're betting, right, that we're gonna experience this drop and then we're gonna be back in ten years, then taking your chips off the table is definitely right now the best move to make.

Chris: It's hard for me to envision ten years down the line. Hedge funds can do that, but for me, I don't know emotionally if I could handle a real estate dropping in price. Even if I have rental, which is fine. You know, a lot of people understand this. Rental will care of me, but I'd rather take the money off the table, what I think will be one of the better prices I'll ever get, and then redeploying that money back out in short term loans.

Because owning real estate's a pain in the butt. Through COVID, man, tenants, termites, toilets, I'm I'm done. Like Might

Steve: have been because you're in a blue state.

Chris: Very much. I live in New York for any of you that know. It's the worst state you could ever live in. Don't ask me why I'm there in well, actually, you can. Family first.

That's the only thing I'll tell you. Yeah.

Steve: Because in the red state, it wasn't nearly as painful.

Chris: Not even All

Steve: the red states versus all the blue states. Yeah. It was much better to have rental properties in the red states.

Chris: I agree. If you're buying real estate here in Arizona in, let's use Florida, Texas, man, you're good.

Steve: You're fine.

Chris: You're good. You own real estate in my state?

Steve: New York or California? Ones? Or anything anything touching the West Coast.

Chris: Get me started on California. That son of a pup is going down the tank. Yeah. Yeah. So that's what I'm doing.

And I'm redeploying that money out or just keeping it moving through my banking policy so that when the event does happen, it will single hand well, for anyone that's ready for this, it will single handedly be the biggest opportunity of your lifetime. And I intend on being right there in the front row for this show.

Steve: I mean, that was my situation. Right? Like, in 2007 through through 02/1011, you know, being a realtor, like, showing all these really stupid cheap homes. Like, man, I wish I could buy these properties where I would be if I was able to acquire all those properties on sale. Yeah, man.

So, you know, again, if you if you're if you believe that house is gonna be on sale in three in two, three years, whatever, maybe next year, then absolutely taking chips off the table right now is the best thing you could possibly do. K. So, guys, this is we took this a little bit of a different turn, but, you know, I think that money is an absolutely critical component to understand. You know, we talk about business, we talk about hiring, we talk about acquisitions, which is all really important when we're in the business. But money is one of those concepts that most people have a really hard time wrapping their head around, you know.

And, you know, when Chris is on here before, we talk about the creature from Jekyll Island. We talk about Nelson Nash. I think this is a really critical concept that you guys do really should spend a little bit of time at least understanding money because it's a valuable, valuable tool. If someone wants to get a hold well, before we do, sorry, what are your last thoughts when I leave the listeners? I know we talked a lot about money.

What are some last thoughts I'm gonna leave the listeners with?

Chris: It's very simple, folks. And it's not so much a thought. It's just this is something you have to do. It's 2022. The number one thing you better start thinking about is taking back control of your money.

And I know you think you're in control of your money, but you're not. If you're putting your money and keeping it in banks, you are not in control. COVID proved that. If you tried taking all your money out, you couldn't. If you're putting your money in four zero one k's, you are defying all the laws of wealth because you're giving up your best dollars now to get paid back with weaker dollars.

You're getting a tax deduction at the lowest tax rate to pay a higher tax later, and you lost control of all that money for all the years until you're 59. Take back control. Do what the wealthy do. I mean, look at what did the banks do? What do big families do and big wealth do?

I just told you. And I know you don't like the fact that it is a specially designed and engineer whole life. It's not an IUL. I promise you banks aren't buying a single IUL. They're just selling them to you because they're high fees and big commissions.

This is what you need to be doing is control.

Steve: Well, I love that you have what control. Because you saw with the fifty nine and a half years, and we don't think about it a lot. Right? But your money is literally behind a cage.

Chris: A 100%.

Steve: And if you want it, you you got to pay a premium to get access to your money. Another thing too, and we we didn't talk about so much today, but you're talking about, you know, the money has to constantly be moving or else it's gonna just suffocate. Yeah. Right? And so, like, the reason why, you know, free market economists, you know, libertarian, you know, leave me alone kind of thing is the the the more governments involved, the more money they suck out of the economy.

Right? The less the government's involved, the more money is moving. And it's not so much that we don't wanna pay much in taxes. Like, if everyone's doing really well, we actually pay a lot in taxes.

Chris: Mhmm.

Steve: It's a fantastic thing. Right? But the more the government sucks money out of the of of the market, there's less money that's moving. And less money that's moving, the less money we're making, less money we're making. Taxes.

Taxes will Taxes. Be less. So it's just it's a very fascinating idea of, like, what money can do if you really understand it at a high level.

Chris: There's a great video on Ray Dalio's. It's the you know, just go to YouTube and look up, the economic machine. Mhmm. It's thirty minutes, and it's probably one of the best ways to understand where we're at right now.

Steve: The economic machine.

Chris: The economic machine.

Steve: Okay. So how can someone get a hold of you?

Chris: So it's easy. I mean, all my stuff is free. So you can go to chrisnaugle.com. And the first thing I would urge you, if you even liked anything I said, there's a ninety minute video. You owe it to yourself to watch the ninety minute video.

And after you do, jump on a call, and we'll answer all your questions. So that's the first place. Chrisnaugle.com. And YouTube and any social channel, I mean, I'm the Chris Nagle on every social channel. I put so much free content out.

Every day, we have content going out. So get around the campfire. Start learning how money really works. And the best thing and I've told you this day one. You know, we're never trying to sell anything.

We're trying to educate you to be in control of your money. Because if we do that and we can help you get there, we know we've helped save your fine save part of your financial future, and that's the best payday you can ever get.

Steve: Absolutely. Now you and I were talking before the camera start, right, about whether you should invest in a screen like this. So comment, guys. If you think Chris should buy a screen like this, comment. I'll make sure he reads those messages.

Chris: Yes. I do love it. I do love it. It'd be probably a good investment.

Steve: Alright. Thank you so much.

Chris: Thank you.

Steve: Appreciate it. Absolutely.

Chris: Thank

Steve: you guys for watching.