What The Wealthy And Banks Know That You Don’t

What The Wealthy And Banks Know That You Don’t | Disruptors Podcast

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Ference Toth: If you haven't realized it yet, everything has changed economic. Last decade was the decade that was known as easy monetary policy, low interest rates, stock markets, and real estate markets, crypto, you name it, just took off. We are now in the midst of one of the biggest bubbles in history. Look at Warren Buffett. Warren Buffett has sold more stock in his career, both percentage and dollar wise, over this past year than any point in his sixty plus year career.

Pretty smart dude to listen to and follow. You know, last quarter, he didn't buy a single dime of stock. Don't think he's ever done that in his career. Warren Buffett's actions are telling us what's going to happen. By the way, he did the same thing before o eight, o nine.

He did in o seven. He also did in 2000. So everything you thought about that was you thought was good the last decade, guess what? It ain't probably gonna be anywhere near as good this decade I shared earlier. All the analysts, they're all projecting s and p 500 returns between 35% and significant corrections in the next decade.

Steve Trang: Hey, everybody. Thank you for joining us for today's episode of disruptors. Here we have Ference Toth with your personal bank, and Ference is another player in the Phoenix area, and he's here to talk about what the wealthy and banks know that you don't. Now, guys, I'm gonna make sure you create a 100 millionaires. The information on the show alone is enough to help you become a millionaire in the next five to seven years.

If you'll take consistent action, you'll become one. And, guys, if you get value out of the show, please hit that subscribe button. It was a five star review. That way we can create more millionaires. Ready?

Ference: I'm ready.

Steve: Hey, Steve. Alright. So, right now, we're talking about what the wealthy, and based on that you don't. But before you got into this world,

Ference: what were you doing? I was in the financial world working as a, you know, IRAs, four one k's, retirement plans, that type of things. Mhmm. And, I kinda stumbled upon it. I mean, from the blue collar world, grew up on a farm, all that.

Didn't know anything about this stuff. Mhmm. And a guy taught me. I found a mentor. Yeah.

And I learned really quick, worked hard. Mhmm. Working on a farm teaches you that kind of stuff. Yeah. And so I was never afraid to apply.

I was always curious, read tons of books. I'm a huge proponent of reading books. I always say, you're a combination of who you hang out with and the books you read. Right? So, anyway, bottom line is, became one of the top retirement planning annuity salespeople in the country.

Mhmm. Top 10 multiple years. And then the owner of the company, who was my mentor, got killed in an airplane crash.

Steve: Man. Yeah. So Before you so before you meet you met your mentor, you were doing financial planning? Or you

Ference: No. He was the one that taught me that. So before that, I was well, I actually started my very first business. Was a retail plant nursery in Glendale, Arizona. Okay.

And I only did that because I wrote a book that said, I knew I wanted to be an entrepreneur, but I didn't know what. Right? And I talked to my uncle who was the only entrepreneur I ever knew in my family, and I had an agriculture degree. Again, I grew up on a farm. I'm in Phoenix because I like the weather.

What do you do with that? Yeah. And he said, well, you know about plants. Right? What about a nursery?

Steve: Mhmm.

Ference: Seemed to make sense. And I read a book that said if you bought an existing business, at least you had immediate cash flow. That seemed to make sense to me. Makes sense. And so I call I literally this was back in the days when the yellow pages Mhmm.

I literally called plant nurseries around town and just asked to talk to the owner and say, hey. Are you interested in selling? Yeah. And I found one.

Steve: You're prospecting. Found one?

Ference: Found one. Went to work for that, company for six months to get to know it, understand, make sure he wasn't cooking the books Mhmm. That kind of thing.

Steve: It was

Ference: the real deal. Ended up buying the business.

Steve: Got it. So it's cash flowing?

Ference: It was cash flowing until the Gulf War hit.

Steve: What happened with that?

Ference: 40% cut in gross revenue overnight. And I, of course, max borrowed. Mhmm. Did some owner financing, but still, managed to survive a couple years, but it didn't go well. Got it.

And you learn hard lessons through those challenges.

Steve: You learn a lot of valuable lessons.

Ference: I was in my early mid twenties at that point.

Steve: So then you learn something different. So you didn't have a financing background. You just own a nursery. Correct. And then what caught your interest?

Ference: Literally, it was I was looking because, again, after the failure of the business, my credit shot. I don't have any money. What do you and I've got an agriculture degree, and I'm in Phoenix. What do you do with that? Like I said.

So sales was really my only option. Bounced around a couple different sales jobs. Found out I was actually good at it because entrepreneurs Mhmm.

Steve: Are salespeople. Naturally. Yes.

Ference: Naturally. You have to sell your product or business. Right?

Steve: Your dream. Whatever it is. Mhmm.

Ference: Right. And, I quickly realized, oh, hey. This is something I'm good at. I believe in it. And then, the idea well, they were selling estate planning, trust, annuities, retirement plans.

My dad was killed when I was young, in a tragically in a car sorry. In a, drowning accident.

Steve: Mhmm.

Ference: That's always hard for me to talk about. That's admirable. Yeah. When I was seven. And but our family had a trust, and that's actually part of what helped me pay for college along with the military.

So combination of those things. So I knew what trusts were. So I saw this guy saying, hey. We do estate planning, financial planning. And so I applied for the job.

It was a sales job. Mhmm. And, again, figure found out quickly. It was like a duck to water. And in a year within a year, I was the top salespeople in the person in the company.

Gotcha.

Steve: And you were selling specifically?

Ference: Retirement plans, IRAs, four one k's, all the financial stuff. Got it. And one quick story is kind of funny is, back then, we're going back twenty five years now. Yeah. The financial world was the wild, wild west.

I mean, there really were no regulations. There was no compliance. None of that. Mhmm. And I saw a lot of really shady stuff.

Sure. And I remember about six months in after I'd kinda gotten my feet wet, knew what I was doing a little bit, Didn't like what I was seeing. I went to my pastor, and it bothered me. I said, considering leaving this field. He said, why?

I said, I told him I didn't like the shadiness of it. And And he goes, well, you're doing the right thing. I said, yeah, to the best of my ability. Mhmm. He goes, we get two choices.

You can quit and move and do something else, or sometimes, you know, light shines brightest when it's darkest. Right?

Steve: Mhmm.

Ference: Maybe you're there for a reason. Yeah. That struck me. Because in my training, to give an idea, one of the things that bothered me is they would teach us, tell people you're doing this for free. You're doing us out of the goodness of your heart, which was a lie.

Mhmm. And I raised my hand to the trainer, so that's not accurate. Why would I say that? Well, I said I'm getting paid a commission to do this. Mhmm.

And if I if I'm offering a good product and it makes sense to the client and I get paid for it, I don't see why there's a problem. Alright. Well, that's just not how we do it, things. I said, well, I'm not gonna do that. Mhmm.

Steve: And they

Ference: all say, well, you'll fail. Well, again, three months in, I broke a monthly company record. Six months in, I broke the annual company record. Mhmm. Within the first year, I was a top salesperson.

Now they wanted to know what I was doing, and they made me the new trainer. Mhmm. So

Steve: Be honest. Yeah. Just being straight. Was that the only thing that was, like, upsetting you?

Ference: Oh, no. There was a lot of stuff where and that's where you know, I know we fast forward doing my radio show now, you know, with the compliance of these days. I had a compliance off for sort of listening to every show I aired for the first couple of years. Wow. Having an attorney listen to every word you say is an experience that you learn a lot.

So Sure. Well, they so I would air I would record the show. Right? And then they the attorney would listen to it, and then she'd come back and say, well, I know what you were trying to say, but you need to drop this word or this phrase because this somebody might misconstrue that. And I'm thinking, wow.

That didn't even occur to me.

Steve: Mhmm.

Ference: And but it was a great learning experience realizing how you had to clean up your language and all that. So I don't have the luxury of, as I like to say, exaggerate

Steve: Mhmm.

Ference: When I'm on the radio Yeah. Or a podcast, where an individual financial person sitting at a kitchen table I'm not saying they're lying, but, you know, let's face it. Exaggerations are often made. Yeah. Yeah.

Steve: I think,

Ference: Or omission of the truth. Sometimes the omission of the truth is worse than you know what I'm saying?

Steve: Sure. And I think, we have, in real estate school, we had that term. It was puffing.

Ference: Yeah. There you go. Sell the sizzle, not the steak. Yeah. Anytime you were

Steve: you were puffing, that was an actual, violation. I can't remember what the penalties were.

Ference: Okay.

Steve: But they were not good. I think it was criminal. Wow. But I can't remember specifically. I didn't have to worry about that.

Ference: Now the good news is in the financial industry, I can tell you, I've been in it twenty five years. It's way, way better than it was when I started. It's a lot cleaned up, but there's still stuff that happens. Yeah. That's why but, again, from the beginning, I treated people like adults.

I said when I did my workshops, I always would start off with, I'm gonna treat you like an adult. We're big boys and girls here. Mhmm. I wanna tell you the pluses and the minuses of everything that's out there product wise or whatever because there's nothing that's perfect. Yeah.

What we need to find is the best option or the best tool. Mhmm. You need a saw. I mean, I'm sorry. If you're gonna, you know, cut a piece of wood, I'm gonna try to find you a saw, not a hammer.

Right. Hammer is not a bad tool. It's just not good at cutting wood. Not the most effective.

Steve: Right. Sure. So It's

Ference: that kind of thing.

Steve: You found then just having a simple plain conversation Correct. Was the key to sales in selling retirement benefits.

Ference: I was a guy who grew up on a farm. Mhmm. I mean, it's to me, I was used to dealing with good old boys Alright. From Missouri. You know what I'm trying to say?

And you just plain talk. Just give it to them straight. Look. Here's here's what I recommend for you and why. Now here's the catch.

I'm gonna just tell you the catch up front so you don't have to ask me later. Mhmm. Because I

Steve: know in the back

Ference: of your mind, you're always thinking what's the catch. Right. If something sounds too good. Mhmm. But I don't think this catches, like, as as a deal breaker because Mhmm.

Lay it out.

Steve: Sure. And then is that this point then that you said you'd met your mentor?

Ference: Yeah. So that, state planning, financial planning, retirement company that, you know, the owner of the company became my mentor to help me how to Oh,

Steve: the owner of the company.

Ference: Owner of the company. It was a small company. It was a start up, actually. I didn't know it. He'd only been around, like, six months when he started.

Grew into one of the top 10, financial agencies in the country within a matter of a couple three years. Mhmm. We had tremendous rapid growth. And another quick little story about it that's kind of funny, in the financial world, you know, in most places, you do well, you have these incentive trips you get. Right?

So I've been in the business fourteen months now. I'm still in my twenties. Now in the financial world, most guys are fifties, sixties. That's typical. Mhmm.

So I was way younger than anybody else there. Mhmm. I'm in Rome. And they're most of them thought I was the son or nephew or something of one of the one of the qualifiers.

Steve: Right.

Ference: When they found out I was was I actually did it myself. I won't quote what some of them said, but it was it was how in the world did you get here? Mhmm. I've been working at this a decade, fifteen years just to get qualified. How in the world did you get here?

And, frankly, it was just, again, straight talk, just giving people, and not knowing any better. I didn't know I was supposed to not qualify. Mhmm. Yeah. Just went to work.

Right. Talked to a lot of people.

Steve: One of the things and we'll talk a little more about financial literacy, but, you know, just something you're talking about with the shadiness of the industry, you know, for myself. What was eye opening for me was, reading, technically listening, to Tony Robbins' book Sure. Money Master the Game. Right. And I just felt dirty and lied to my entire life about how, mutual funds

Ference: Right. Were. Well, the bottom line, the dirty little secret of Wall Street, and they don't like it when I say this. So I get they get advisors get mad when I say this. Mhmm.

But it's a fact. It's read Snowball, which is Warren Buffett's autobiography. He talks about this also, which was very, impactful for me. It's we all know that if you invest in a Wall Street type investment, whatever that is, they make money up, down, or sideways. Right?

Yeah. What does Wall Street want? Peace. Mhmm. And why why do they always tell you, well, when it gets when it's good or when it's bad or when it's indifferent, they just hang in there.

It'll get better. Just hang because if you go to cash, what happens? They make no money. Mhmm. Right?

And so even in in the book Snowball, like I mentioned, Warren Buffett started out as a stockbroker. Yeah. And, his dad was a stockbroker. Oh, I

Steve: didn't know that.

Ference: Yeah. That's how he got started. So he's involved in the first couple years. This is in the fifties. Of course, back then, people still remember the great depression.

So, you know, as he put it, stockbrokers were kinda spit upon. You know, he said stockbroker and then spit back then. They were not looked on favorably. Right?

Steve: That's right today. Change that there's

Ference: Well, there's some. Yeah. But, his statement was, I just couldn't see he says, my best advice is somebody was buy a stock and hold it for life, which he still tells us today. Yeah. But if he did that, he'd make one transaction and then wouldn't make any more money ever again.

So I didn't wanna put myself, and that's why he started doing the but he the man, you know, developed the model where he makes money if it goes up, and he doesn't if it goes Mhmm. Goes down. Right? Because he didn't wanna be in the position, and neither did I, that if the economy or the markets took a dive, my best advice to you is to get out of the way, avoid risk. Mhmm.

Means I'm cutting my own throat, my my paycheck at a tough economic time too. Right? Yeah. I've got a family.

Steve: So you're very disincentivized. Right. Good at your job.

Ference: It's tough. It and and I'm not picking on those those guys and gals that do it. It's just the model. It's the model. And I've talked to many of them personally behind the scenes.

I know them. And they're like and and the other piece of it is they're they're captive. They if they work for pick a name. They can only offer what that company offers if they go outside of it. So a lot of times, I'll introduce on their personal bank concept, what banks do, and all that.

They love it. And then they'll go, I can't offer that to my clients because it's not in my package. And if I offer another product, I lose all my residuals. Mhmm. So they got them it's the golden handcuff.

Steve: Right. Yeah. It's I feel

Ference: bad for them in some respects when they realize any of them.

Steve: Yeah. And so I think looking at that and then, like, you know, understanding that, like you said, goes up, goes down, goes sideways.

Ference: They make money.

Steve: They make money. And so then you look at, like, fiduciaries or this or that.

Ference: Same deal.

Steve: Same deal.

Ference: I don't care what you call yourself. That's one of the things I say. You can be a a public fiduciary, a voluntary fiduciary. I'm a voluntary fiduciary, which are, in my opinion, better. That's somebody who's volunteered to be that.

Mhmm. It doesn't matter what you call yourself. Yeah.

Steve: You know, if you

Ference: do a money under management model

Steve: Mhmm.

Ference: You're getting paid whether it goes up, down, or sideways, and you only get paid when it's engaged. Right?

Steve: That's why I know

Ference: a lot of people look down on commissions, but I say, you know what? I think that's much more fair. That's how I get paid. If I recommend a product to you, Steve, that makes sense. And I tell you why, you know, like and you understand the limitations of it.

Steve: Mhmm.

Ference: But overall, you think that's the best fit. Oh, by the way, I get paid. I tell people that straight up. Right. I can make my living.

I get paid well, so don't you know, I don't I don't I don't regret that. I work hard. I deserve it.

Steve: Right.

Ference: Company makes money too. If you invest, you want that company to make money. So they make money, I make money, you make money. We all win.

Steve: We all win.

Ference: I like win wins.

Steve: What was it that you, compelled you or attracted you to the mentor you found?

Ference: Well, I didn't realize he was gonna be a mentor initially. I just was answering a job posting of something that I recognized. Mhmm. I said, I understood trust, estate planning. I'd lived it from my dad passing, you know, being tragically passing away young.

So it was something again, I didn't know this at the time, but reading later, you know, Warren Buffett always says invest in things you understand. Mhmm. Well, same thing with careers. You, you know, if you're picking a career, you you yeah. You wanna pick your passion, of course, but you also need to have to have some knowledge about it.

Right?

Steve: So if

Ference: you have some knowledge and some passion, I felt like, hey. That's something I could do. I understand it. I've been a recipient of

Steve: it. Mhmm.

Ference: Which is probably the one of the best education you could have. Somebody's lived it.

Steve: Right.

Ference: Right? So I thought, you know, I could share this with somebody in the in the benefits of why why is life insurance important. I lived it. My dad died died 01/2007. Okay?

I can understand the benefits of estate planning. Part of my college was paid for because of a trust Mhmm. That my parents put in place. Yeah. So it was just me telling a personal story, you know, because I lived it.

Steve: Mhmm.

Ference: And but we quickly, you know, got to meet this guy. I was impressed by it. He was he was young. He was ambitious, smart. You know, all the kind of thing.

He'd been down the path where I wanted to go. And we just we had a real we developed a really strong relationship. And, yeah, he became my mentor. What did you learn from him? Oh, a lot of things.

Obviously, in the financial industry in general Mhmm. You know, all that. But I also learned he was very he was a big dreamer, big thinker, big big visionary guy. And I had a pretty good vision, but his was so much bigger than anything. He he kinda opened up worlds to me that I didn't realize existed or potential possibilities.

And I think maybe that was the most the inspiration that I got from him was probably the biggest.

Steve: So what did you see working with him that you didn't see before?

Ference: What that I could accomplish so much more than I thought I could. Mhmm. I I had limiting beliefs like most of us.

Steve: Even when you were top performer,

Ference: you were Well, I didn't become a top performer until then.

Steve: Gotcha. Okay. So being around him helped you.

Ference: Yeah. Because he would alright. Oh, here's a perfect example. So I remember he, he would get get under my skin. He's so I I was like, yeah.

I just made I remember I made seven sales that week. It was a new company weekly record. Mhmm. He goes, that's awesome. It's but it's Thursday.

You got another day, man. And he was right, and I went and got an eighth sale that week. Okay? Stuff like that. Like or he would say, well, you know, Mike, I did I'm already you know, I did the seven.

He goes, you know, I did that too once. I gotta beat that. Yeah. I had to get the eighth one so he could do better than he had. Mhmm.

You know? Stuff like that.

Steve: It's really good at egging you on. Yeah. You to

Ference: pushing you. Pushing me. Pushing the buttons are right. I mean, some of it was encouragement. Some some of it was, you know, kinda getting under your skin.

Mhmm. Depended.

Steve: Now, before we talk about the personal bank, one thing that, you have, from what I can see, passion about is financial literacy. Yes. And this is one of the things that is really important to me, and I wanna make it, not today, but at some point, a mission to, you know, improve financial literacy across, you know, all ages. Right? I think this is a lot of problems could be solved if we were all more financially literate.

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Ference: It's not taught in school. It's not taught in the home most of the time. Mhmm. I mean and I'm not picking on our parents. I mean, mine either.

No. It wasn't taught to me.

Steve: Mhmm.

Ference: And if our parents knew better, they would have taught it to us in most cases. They just didn't know any better themselves. Yeah. Jobs, careers, they don't one of the things I tell people I say this not to be mean, but if you get an advanced degree, basically, so you're a higher paid worker monkey.

Steve: Mhmm.

Ference: Right? Yeah. That's what it is. Mhmm. And I've said this to people with doctorates, and they look at me and said, you're right.

Yeah. So do they teach entrepreneurship in college? No. Even a master's in business administration doesn't teach you how to run a business, does it? I have

Steve: no idea.

Ference: I know. I have I have a number of agents and clients and stuff, friends who have those degrees and not a word about entrepreneurship. Mhmm. It's one of those things where you either have to go out on your own or as I stated earlier and learn through the school of hard knocks, which I did some of that over the years and or have some mentors along the way. And that's why I'm a huge fan of mentors earlier in my life outside of that first mentor.

And, again, I stumbled upon that. I didn't really understand the value of mentors and shortening that learning curve until a little bit later. Now I'm a huge fan of it, but I forgot where we're going. Financial literacy. Oh, financial literacy.

Yeah. So financial literacy is again, it's not taught, but it's a basic necessity. I mean, let's face it. You should be learn learn how to balance a checkbook in high school. Mhmm.

Everyone should. Yeah. Okay? And one of the things I teach business people, you know and I learned this from Oprah, all places. I'll take something from anybody, but love her, hate her, doesn't matter.

She's a billionaire.

Steve: Okay?

Ference: She she did a show once, and this made so much sense to me well over a decade ago. She said, in your business account, have two accounts. Have a income account and a expense account.

Steve: Mhmm.

Ference: All your income goes in the income account. When it's time to pay your bills, you figure it out. You transfer it to your expense account. Whatever's left over is what you have left what you have. You never have to balance checkbook.

Mhmm. But you always know exactly how much you have. Right. Simple basic financial literacy. Yeah.

I share this with bankers, business owners, CPAs. I've shared this for well over a decade. Mhmm. Almost nobody knows that little simple technique. Yeah.

But it's so valuable.

Steve: So you even have, a certification to teach financial literacy?

Ference: I have taught a college certified, yeah, college certified financial literacy course.

Steve: Okay. So, like, when you're teaching these, like, what are the most important principles that, you know, someone's listening Right. And can go out and use today?

Ference: What a couple of things from that course that I found, and I think most people found, super valuable is when you're running you know, people hate budgets.

Steve: Mhmm.

Ference: I we get it. But understand if you're short on money, there are several different ways. I mean, you can make more. Mhmm. Right?

You can spend less. You can do both.

Steve: Mhmm. Right. Right? And what a lot

Ference: of people do is they get in this limiting thing is, okay. I'm short money. I gotta make more. Well, that might be the solution of spending less or spending less or bullying. Open yourself up to all those possibilities.

Also, it's about balance. Everyone wants balance in their lives. We all do. But sometimes, intentionally, you have to be out of balance on purpose to get back in balance. And what I mean I'll use a quick example.

I had a couple of few years ago that they were struggling financially on the bills and stuff, and we realized that if he took on some extra work overtime for six months, they could get rid of those extra bills Mhmm. And kinda straighten out their financial situation. And he was very much a family man and all that. He's like, I don't think my wife will go for me doing overtime. I said, what if you explain to her why?

Steve: Mhmm.

Ference: And not only why, but this is not permanent. This is temporary. Yeah. He he was amazed what happened. Have a family meeting because he had teenage kids and all that.

Mhmm. The kids, the wife, everybody got on board because that's part of changing part of changing habits. You have to have a support, you know, support partner, you know, accountability partner to really be successful. It was life changing. Holy cow.

Now they were kicking him out the door. Dad, go go to work. Get this done. Let's fix and then they were then they set a goal to do something fun. Mhmm.

Steve: Go I

Ference: think it was a camping trip. They love doing that. Once he got these bills paid off, they were gonna take a camping trip. Well, guess what? The whole family's like, dad, get out the door.

Get to work. How close are we? The the kids started creating a chart. How close are we to getting the bills paid off so we can go on this camping trip? Yeah.

He goes to change his life financially. Mhmm. It's simple little things like that. Alright. The second big one is is a little more advanced, but it's called positive arbitrage.

And I'm sure we'll talk about it a little more, but it's really quite simple is one of the things I see the difference with the wealthy and banks and institutional investors do commonly versus the average American is most Americans get money in the door Mhmm. However that is. We got bills we pay, and then hopefully, there's some leftover. We might invest some of that, and that's what we try to you know, that's how we live our lives financially. Well, most of the wealthy don't operate that way.

In other words, if they get money in the door Mhmm. Before it goes out on bill because they got expenses too, like all of us. They make sure they receive some benefit from that somehow, at least partially, some control of that money, and that's one of the tools that we teach. Mhmm. I tell people this all the time.

If you make one or 2%, let's say, interest on every dollar you spent in your household or your business every day, every year for the rest of your life, would you have more money?

Steve: Yes. Of course.

Ference: A lot. Right. And it compounds over time. Mhmm. That's what the personal bank is.

Got it. Well, when

Steve: you put it that way, it's really it sounds really, really simple. Yeah. So what is your personal bank?

Ference: Basically, the financial concept where we're marrying two, financial products, one from the insurance industry, one from the banking industry to make both better. Mhmm. Okay? Now some people have heard of, like, the infinite banking concept, bank on yourself, all those kinds of things. Right?

It's called a lot of different things. Sure. Your personal bank is another step beyond that. I we call it, like, infinite banking turbocharged. Mhmm.

Here's what I mean by that. What's taught typically with the insurance banking concept is you put money into a cash value policy, whether it's IUL, o life, whatever, and you put it in there to grow cash. It's safe. It's insured. If you do it right, it's income tax free.

Okay? Those are all good things. Highly liquid. By the way, if you're looking at it, it's a better be 50% liquid or bet more day one. If it's not, it's not structured right.

That's something I run into all the time. The idea is you're growing your money. Mhmm. Right? Highly liquid, you have access to it.

Now what's taught is then you take policy loans against it, and you're hoping there's a difference of what you're earning in dividends or interest minus what you're getting charged. Right. Right? So there's a gap. Now if you read some of the books like Nelson Nash, who's sort of the godfather of the insurance banking concept, and he's passed away a few years ago.

I did meet him before. He passed, but he's used it in, like, by past seventy years roughly. He taught using the policies because there was a gap. Well, insurance companies have gotten smart in the last, I'm gonna say, ten, twenty years. Gotcha.

If they pay more, they're also gonna charge you more. Mhmm. There may be a small gap. You might get a half a point if or or a little more, a little less, but you're they're gonna balance it out each year. They're not gonna allow you to have a significant gap between the two for any extended period of time.

Well, this is where the banking side comes in, and I learned this from the banking, from lenders. You can do bank lines of credit.

Steve: Mhmm.

Ference: Very similar to how most real estate investors or, you know, anybody who's ever done a HELOC home equity line of credit understands you're borrowing again. Banks giving you money because it's got value. That property has a value.

Steve: Right?

Ference: Well, same thing here. If you Steve, if you had cash in a policy, does that have value? Of course,

Steve: it has value. Yeah.

Ference: Cash is worth something.

Steve: Mhmm. Right? Will a

Ference: bank loan against that Mhmm. As collateral? Of course, they will. In fact, they prefer it Yeah. Over real estate even.

Steve: It's easier to seize.

Ference: Well, yeah, it's easier access. Obviously, it's guaranteed. It's liquid. Mhmm. K?

It's also so a lot of people don't know this. Are you familiar with the term called tier one capital?

Steve: I am not.

Ference: K. FDIC defines tier one capital as the safest capital a bank can invest in. Okay? They require all banks to hold about 25% of their holdings in portfolio in tier one capital. Yeah.

Every bank in the country. Okay?

Steve: In the vault or wherever.

Ference: What is now what is tier one capital? FDIC says there's three types of tier one capital. Cash, cash equivalents, that'd be checking savings accounts, things like that, and cash value in a life insurance.

Steve: Really?

Ference: That's it. Mhmm. So banks have to invest three 25% or more of their total total portfolio, every single FDIC insured bank. A lot of money, folks.

Steve: It is.

Ference: In one of those three things or all three of those things. Mhmm. They are buying this this these cash value policies by the truckload.

Steve: Mhmm.

Ference: Because they're paying 6% plus guaranteed tax free right now. What are money markets pay? Our cash.

Steve: Not that.

Ference: A lot less. Yeah. You know, put so you see what I'm trying to say? Mhmm. The difference is then banks will loan against this cash in this policy.

Bank lines of creditors, banks that specialize in this. And lending rates are usually prime, prime minus one, and that's typically lower. In fact, 24 of the last twenty eight years, we've done the research. The dividends you're earning are higher than the borrowing rates. Mhmm.

Okay? So you're getting positive arbitrage. Historical average is two to 3%. Yeah. So I'll go back a couple years.

We're making about 6% dividend. We're getting charged about 3% interest. Mhmm. What's your Steve what's your money doing, Steve?

Steve: I mean, it's growing. Right.

Ference: But if you put let's say, just use a number and add a zero, take away a zero. I don't care. Let's say you got a $100 in a policy. Mhmm. Cash.

Earned in a 6% dividend. Yep. Keep it simple. You decide to borrow 50 of

Steve: it. Mhmm.

Ference: Alright? But if you borrow it from the bank, you're taking it from the insurance company or the bank?

Steve: We're talking about borrowing from the bank. Right.

Ference: See, their insurance banking concept teaches take it from the insurance company, which you've reduced the amount of money there. Right?

Steve: Right.

Ference: But if we're actually getting the money from the bank, all that $100 in our examples at the insurance in Mhmm. At the insurance company.

Steve: Right.

Ference: They're gonna pay you full dividends on it. Right? Mhmm. Let's say the bank's charging you 3% interest on that $50 you borrowed. You're still making 6% dividend on it, aren't you?

Yeah. What's happening?

Steve: You're, you get the arbitrage. Right.

Ference: And I

Steve: was gonna say you're eating twice, but, no, you're not. You got You're

Ference: not eating twice. You're not

Steve: eating twice. So you're getting 6% here. You're getting 3%. Really not doing

Ference: Yeah. It's anything. Yeah. It's the difference. The spread, the gap.

Yeah. Positive arbitrage. You're making 6 on it. The 50 you borrowed, you're getting your, you're getting charged 3, so you're keeping the difference. Mhmm.

Steve: Right? Right.

Ference: By the way, insured, guaranteed, tax free, highly liquid, all that good stuff.

Steve: Mhmm.

Ference: So it just keeps growing. By the way, whether you add more money to it or not the next year, there's more money there to borrow, isn't there? Guaranteed.

Steve: Exactly.

Ference: K? Now what hap I mentioned earlier, '24 of the last twenty eight years, we had a higher dividend than borrowing rates. Right? Mhmm. What happened a couple years ago with Federal Reserve?

Steve: The rates went up.

Ference: They went crazy. Mhmm. Fastest increase in their history over a hundred years. Yeah. That's a fact.

They overreact. They're nervous nellies. Mhmm. Drive me nuts. I can play about them constantly on my radio show.

Steve: Yeah. Okay?

Ference: So the borrowing rates went above the dividend rate, which you're earning. Right? Mhmm. Well, guess what? You can still borrow from the insurance company.

Now they're gonna let you borrow about whatever the dividend whatever the dividend or interest rate is. It was kind of a wash. What I'm trying to say is in those bet those four of the last twenty eight years, the years where the Fed went crazy on us Mhmm. Has happened four times the last twenty eight years, by the way. We're currently in that situation, and I'll share in a minute, it's changing dramatically to our favor.

In those four of the last twenty eight years, you could borrow it, but it was kind of a wash. Sure. Okay. So it's not helping you, but it ain't hurting you either. Mhmm.

And by the way, that positive arbitrage, Steve, isn't just for this year. Let's say you borrowed that $50. Let's say we get back to positive arbitrage next year, but you haven't paid it back. Still get the positive arbitrage, don't

Steve: you? You're still benefiting from it. Right.

Ference: And no payment requirements, interest or principal.

Steve: Mhmm. I was told again, I'm not an expert here. Yeah. My understanding is we took the money out from the, your insurance policy Right. That the interest would continue to grow at the full value and not

Ference: Now so what they're talking about there is we're getting technical in the weeds. If you want to, it's fine. It's called direct recognition versus nondirect recognition. Okay? So there are companies that ought to say, hey.

You can borrow from the cash and the policy. Yes. From the insurance company, and they'll still pay you the full dividend or interest or whatever on the money that's there. Mhmm. That is true.

But remember, they're still charging you an interest rate on the borrowing funds. Mhmm. What is that? Again, typically, this is with all companies. It'll be similar, let's say, within a half a point up or down Mhmm.

Of what they're paying you. Sure. That's what you're

Steve: saying with the banks the insurance companies have gotten smarter. Right.

Ference: That was true twenty years ago. There was a gap. It ain't there. It doesn't exist anymore. So where where do you get the positive arbitrage now?

Most of the time, twenty four last twenty eight years from the banks. Gotcha. So I talked about where we were a couple years ago, where we are at the moment, where we headed. We're this is exciting. One of the things I've been sharing on my show now for a year is the, this next decade, you're probably hearing this.

It's gonna be the goal it's called they're calling it the golden age of fixed investments. I don't know if you've been hearing that term. I have not. It's going on everywhere. Wall Street, all I'm talking about.

In fact, analysts from BlackRock, JPMorgan, Vanguard, several others, all in the last month or so, have all come out with predictions, projections for the stock market for the next decade, three to 5% annual average returns.

Steve: For the stock market? Correct.

Ference: S and P 500.

Steve: It's not very sexy.

Ference: No. They're all saying now this is their business. Mhmm. They're not gonna put that out there unless they're pretty darn confident because they want to encourage people to invest with them.

Steve: Right? Their one great skill is getting money into it.

Ference: Big time. Yeah. Why would they put that out there? Why are they saying that? What's the markets what is the S and P and all that done the last couple years?

Steve: It's done incredibly well.

Ference: Incredible. We had 20 plus 20 plus returns in the last back to back years. You know how often that happens?

Steve: Not very often.

Ference: Not very often. No. Like, about eight times in the last hundred years. Mhmm.

Steve: K.

Ference: One time, we've had a third year where it went up 20% or more. That was, by the way, the .com bubble.

Steve: Right. It's not generally a good thing if that happens.

Ference: Every indicator you wanna look at is showing us that the stock market, the S and P, all of it is at extreme levels. Mhmm. Pick an indicator. I don't care. This is the decade.

My prediction and this is not just me. This is all this next day decade will be the decade of fixed assets, the bond market. A lot of people are familiar with the stock market. You need to start learning about the bond market. That's where the all the action is going for the next decade.

There's a couple of reasons why. For real estate investors, one, another point I wanna make on that is too many of you pay pay attention to what the Federal Reserve does.

Steve: Right.

Ference: And most time, you all thought that mortgage rates were gonna go down when the Fed started dropping rates. Right?

Steve: That's what a lot of people think.

Ference: I was saying the opposite. Mhmm. Back to my show, you'll see and there's a reason why. Thirty year fixed mortgages are not based on what the Federal Reserve does.

Steve: That's, how do I put this?

Ference: This is financial literacy.

Steve: This is obvious to those that pay a lot of attention.

Ference: But not to most.

Steve: But not to most.

Ference: Correct. The thirty year fix, yeah, thirty year fixed mortgage is based on the ten year treasury. Right. So take the ten year treasury plus two to three points. Where is it?

Where is ten year treasury right now? About four and a half. Mhmm. Or thirty year fixed mortgages.

Steve: Six and

Ference: a half, seven. Right? Right. And why did the bond market go up when the Federal Reserve interest rates went down?

Steve: Not sure.

Ference: Most people don't know this. Mhmm. The bond market is, by the way, multiple times larger than the stock market. First, yes. At least three or four times larger.

Everybody thinks the action's in the stock market. They don't have a freaking clue. Mhmm. Banks, institutional investors, sovereign wealth funds, and all that do not invest primarily pension funds in particular, do not invest primarily in the stock market. They invest primarily in the bond market.

Why? They want cash flow. Mhmm. See, real estate investors have far more in common with bond investors than stock market investors. Stock investors want appreciation.

Steve: Mhmm.

Ference: Bond investors want cash flow. Gotcha. That's the difference. Take a pension fund. What do they want?

Cash flow to pay their pensions.

Steve: Cash flow and

Ference: a

Steve: high degree of certainty that is not gonna go down. Correct.

Ference: So consistent banks, that's what they want. Insurance companies Mhmm. They all want cash flow with high degree of certainty. Exactly. What do bonds offer?

High degree of certainty. Right. Here's the problem the average American has. You need about a $100 to buy to go to the bond market, you need about a $100 per position.

Steve: Mhmm.

Ference: Most people don't have that. So how do you take advantage? No. You invest in companies that invest in the bond market. Insurance companies are some of the biggest investors in bond markets.

That's where the cash value comes from.

Steve: Gotcha. I didn't know that. That makes sense, though.

Ference: Yes. And why do we why are all the predictions that we're in the golden age of fixed assets and why? I'm I'm sorry to say this, but mortgage rates aren't going down anytime in the next few years. I'll tell you why with a high degree of certainty, and this is why. What is the bond market telling us when the when the Fed was lower in rates?

Well, but the bond market went up. What were they telling us? They are concerned about inflation.

Steve: Mhmm.

Ference: And they don't think what's the biggest driver of inflation? Government spending.

Steve: Mhmm.

Ference: Is our federal government spending any less yet?

Steve: Not yet.

Ference: Not yet. But let's say and I'm a big fan of Elon and all that they're trying to do, and if they get the government efficiency stuff, which would be great, how anybody could be against having the government be more efficient is beyond me. Okay?

Steve: Some hills you're just willing to die on.

Ference: Exactly. I don't care what your political beliefs are, but, you know, they spend too much money and they waste too much money. I don't think anyone can argue that point. Let's assume the Trump administration and Elon and all that, they they do a great job, and they get the government way more efficient. Let's assume they even get to the point where they start paying down the debt, and that'd be wonderful.

Yeah. K? One a

Steve: man can dream.

Ference: A man can I told you, I had some mentors that gave me some big dreams? Let's assume all that for a minute. You don't pay off 36,000,000,000,000 in debt overnight, Steve, do you? No. That's what the bond market is telling us.

They're telling us because there's the last piece of it. So I'll put the last piece of the jigsaw puzzle together. This is something I've been sharing on my show now for the last year plus. I've been doing a lot of education on bonds, treasury bonds, debt. What's going on and why?

When the government spends more than it receives by the way, last year, it spent about 1,900,000,000,000.0 Mhmm. More than it receives. It has to sell a bond. Right. I can't just print money willy nilly.

A lot of people don't know that. Mhmm. They just think there's a printing press. No. There is, but they gotta sell a bond.

Steve: Right.

Ference: Alright. They're selling record at level of bonds. Right? There's record amount of debt, and there's record amount of deficit spending, which are that means they're selling record offerings of bonds. K?

So far, pretty much people are still buying them. Who's buying them? Insurance companies, pension funds, sovereign wealth funds, the big players, the big institutional. When if you understand economics one zero one, when you have a huge supply of something, record, all we're talking human history level stuff. I mean, none.

All time. Nobody's had this kind of saying,

Steve: like, in the last four years, we've doubled the amount of money.

Ference: Doubled the amount of debt. Our double debt is doubled. No country in the history of the world has had this kind of debt. Mhmm. These these levels.

And there's only and this is the scary part, and then we'll get back to you know, there's only one, there's only actually one society in human history that has had over a 120% GDP debt, which is where we're at right now, and survived. You know which society that is? I guess. I mean Human history.

Steve: Human history? I mean, I'm I'm looking at the big ones. It has to be either England or China.

Ference: You're close. It's Japan. Okay. And there's more debt than we do, and they're still operating. Now we'll see if they have

Steve: other problems right now with a lot of birth rates issues.

Ference: Democrat demographic problems. Oh my gosh. Off the charts. Will they survive? We'll we'll see.

Steve: Mhmm.

Ference: But they're the only society that's had more debt GDP wise than we have and survived. Okay? So you have this massive amount of debt, massive amount of bond selling, the bond buyers. Why why does somebody buy a bond? They want income.

Mhmm. A bond this helps people understand it. A bond is very much for an institutional investor much like a CD would be for you and I. Yeah. You buy a one year CD.

They promise you 5% interest for a year. Mhmm. You know, that's what they're doing. They're you buy a two year bond or a ten year or a thirty year bond. The government's promising to pay you x amount of interest for that time period.

Right. Exactly. Like a CD. Exactly. Exactly.

Yeah. Almost exactly. You pick the time frame. They offer the interest rate. Mhmm.

Now when you have record amount of selling, what do they gotta do to how do they sweeten the pot to get more people to buy?

Steve: Lower the price.

Ference: Gotta raise the interest rate.

Steve: Raise interest rates.

Ference: Right. They gotta offer more interest, which they've been doing. Every bond offer, you watch the bond auctions. They're pushing up. They're pushing up.

They're pushing up because You

Steve: get more money in.

Ference: Because they have so much of it. They gotta get unload. They gotta offload all this and get people to buy it.

Steve: Right.

Ference: That's not gonna change anytime soon, is it?

Steve: I can't think of any compelling reasons why that would change.

Ference: Again, until the the when is it gonna change, Steve, was is when our you start seeing our government debt being reduced. Mhmm. Those are paying down the debt to some more manageable levels Mhmm. Which would everything working great will take years.

Steve: Does it have to do we have to bring the debt down even if we just broke even? Right? Like I

Ference: mean, that's a step in the right direction. Yeah. Then my analogy is this. I think that and I've been, again, sharing that I've been railing on this for now Mhmm. Several years.

The best analogy I've seen is is it's like we're on the Titanic. We see the iceberg. Mhmm. It's dead ahead. Now if we can continue on this path, we know what's gonna happen.

Right. We're going down.

Steve: Mhmm.

Ference: We have time to turn the wheel, but not much more time.

Steve: Mhmm. Every day.

Ference: Are we every day we wait, the closer we get to that in that that point where it won't matter. Mhmm. We're close to that point where it won't matter. Are we going to turn the wheel is the big question.

Steve: Yeah. Time. We will see. I mean, if you were to follow Twitter in the last forty eight hours, I think the the the honeymoon's already ending, for for for Doge.

Ference: So Yeah. There's some of that. I've been watching that.

Steve: Yeah. Unfortunately, I think there's some craziness there. So Yeah. Okay. So, I don't even know how we got down this road.

Yeah. But bonds, bonds are going up. Right.

Ference: Or at least gonna stay strong Yeah. Interest rate

Steve: wise. So going back to this, you said something interesting. Tax free income. Yes. I think most of the people that listen to our show are real estate investors.

Right. Tax free is, like, one of their favorite, like, great.

Ference: Golden yeah. Golden goose.

Steve: Yeah. So what what are we talking about when we say tax free tax

Ference: free income? In tax free growth, tax free access, tax free of the heirs.

Steve: Mhmm.

Ference: There are only two investments really that do that. Only one of them has tax free growth and access. That's Roth IRAs. Most people understand if you do a Roth, you pay the tax upfront, you put it in there, let it grow tax free for life. You can access a tax free for life.

Okay? And you can pass it to the heirs depending on what's going on. Mhmm. Insurance works the same way. Yeah.

So you the money can grow if you again, set up properly.

Steve: Mhmm.

Ference: You can grow the money tax free. You can access it tax free. You can pass it on to your heirs tax free. People ask me how. It's really simple.

Two two reasons. One, since the income tax was invented back in, what, 1912 or '13, something like that, Death benefit proceeds from life insurance policies have been tax free. And there's nothing out there to show us that that's going to change because that goes to widows. Alright. That is a political third rail like you wouldn't believe.

Mhmm.

Steve: Okay?

Ference: So that probably will never change. Secondly, when we're accessing the cash from the policy, going back to our example, remember, we put the money in the policy, right, to grow. Grows within the policy tax deferred, like IRAs and all those types of investment, but any qualified plan works that way. Where it's different is when you access it out of if you access it out through a bank line of credit or a policy loan, both of those are loan proceeds. Right?

Steve: Mhmm.

Ference: Are there any taxes on loan proceeds? Nope. Exactly. There's nowhere on the ten forty form for loans,

Steve: is there?

Ference: It's income tax return. Right? Those will consider loan proceeds. How do you tax a loan? Right.

A lot of people don't realize this, but this is how wealthy operate all the time. We we've been talking about Doge. Let's talk about Elon. Yeah. Part of how he bought Twitter.

Yes. He raised some bank money, and I'll be also put up some of his own money. Alright? And some of it he put up, he he had Tesla stock that was valuable. Right?

Steve: Mhmm.

Ference: He didn't sell the stock. That would be dumb.

Steve: Mhmm.

Ference: He took a loan against it. In fact, if you have assets like stocks and various things, I can steer you to banks. That'll borrow a loan against the investment portfolio. Now they'll only loan 50% of a stock portfolio because they banks understand it could lose half its value. Insurance policies will loan you 95% of the cash value.

Gotcha. The risk assessment. They understand it's safe. My point is, as long as his Tesla stock grew faster than his borrowing cost Mhmm. He's money ahead, isn't he?

Alright. This is how, oh, Amazon guy. Bezos. Bezos. How he gets by with not paying any tax every year.

Mhmm. Yet he receives monies to buy yachts and multimillion dollar mansions. He's bar loaning against his Amazon stock, folks. He's not selling it.

Steve: I saw one of those yachts. Yeah. He has a yacht that follows his yacht, I believe He does. To supply

Ference: the main yacht. Oh, the, Zuckerberg does too. Was that Zuckerberg? I think it's Zuckerberg. That was Zuckerberg.

Yes. Zuckerberg has

Steve: a yacht that follows the main yacht. Yeah. And then

Ference: Bezos has four four jets, though,

Steve: private jets. And then Bezos has I'll tell my wife about this. Yeah. This is what I wanna do. She thinks I'm crazy.

It's like, he bought his house, and then he bought the two neighboring houses. Right. And you think typically, when you hear something like that, it's like, I'm just gonna have, like, this gigantic thing. He bought the two neighboring mansions to house all the people that take care of his property. Right.

Man. Dreams.

Ference: That's a big vision. Yeah.

Steve: But, you know, like, seeing what he's done, you know, a lot of people have been paying attention to my story. It's like, you know, I stopped buying houses. I do the sales training. Right. I focus on that.

And my intention here is we were we've incorporated it. Right? And the goal is to, at some point, have evaluation attached to it by private equity firm or VC or whatever. Uh-huh. And now I can start paying myself through loans.

Right? I can avoid paying taxes.

Ference: That's how you do it.

Steve: Yeah. So see what these other wealthy people are doing. It's like, we should do more of what they're doing.

Ference: Do more of what they're doing. If you see 95% of people going one way, go the other.

Steve: Mhmm.

Ference: Okay? And and tying this all to real estate, it's really, again, quite simple. I tell people this all the time where you take any significant purchase, whether it's a property, a a vehicle, college education. I don't really care. You have two choices.

You can take money that you've saved up to buy that asset or that item, whatever it is. Mhmm. Or and and by the way, here's the problem when you do that. Let's say you take the money to buy a house. Yeah.

Yeah. You got the house. That's great. Whatever it's gonna do, it's gonna do. But the dollars you traded out, this is this is called, lost opportunity cost, another one of those financial literacy things.

Okay? They used to teach. When you trade the dollars for the item, what return do you get on those dollars in the future?

Steve: Oh, they're gone.

Ference: Gone. Forever. Right? Mhmm. You pay them on a bill.

Let's say you pay taxes. I get this all the time. I got a I got a tax bill. Okay. You can pay the taxes Mhmm.

To the IRS. Yeah. You paid your taxes. But the dollars you gave the IRS, will you see any benefit from those dollars ever again the rest of your life? No.

You could apply that to a car, to a property, or any other thing you purchased or spent money on. Mhmm. That's what most people do. Smarter way is why not instead put the money in the policy? Mhmm.

Earn dividends. Now using taxes as a great example, when do taxes actually do most of the time?

Steve: April 15.

Ference: Of the next year? Mhmm. Right? So I had somebody the other day had a $4,050,000 dollar tax bill. They had about a $100 they to work with to invest.

What if you put the money in to invest a $100 in April and you're gonna earn 6 percent between now and then. Mhmm. By the way, I told them to do it after January 1 because it was so close. But now they're gonna push it off to 04/15/2026. Mhmm.

They'll earn 6% on a capital gain of fifth. They get a long term capital gain 15%. Right? Mhmm. Dollar property.

They're receiving the proceeds. They had a choice. Let's say take the proceeds after January 1. Right. Right?

So you can delay the tax bill.

Steve: Mhmm.

Ference: Alright. 15% long term capital gains. Right? What if you earn six percent over the next sixteen months before you have to pay the bill? You just shaved your tax bill by a third.

Right. Because you made six on it. Right? Secondly, now you borrow it from the policy. Let's say you pick up one or two or 3% positive arbitrage on that money you pay the tax bill every year the rest of your life.

What happens? You're gonna get interest back. Eventually, the money you pay in taxes come back in your pocket. Exactly. So you can pay the tax Mhmm.

And and wait bye bye to those dollars Yeah. Or put them in a policy, let it work for you and work for you at least partially the rest of your life. What's the difference?

Steve: I learned about these policies, the, whole life policy.

Ference: There's whole life. There's IUL.

Steve: With infinite banking and so on. Right. And for me, when I went down this road, I wanna say in twenty twenty k? I had to make some commitments to, like, hey. Here's how I'm gonna put into my policy Mhmm.

Per month Right. For some duration.

Ference: Some work that way. Not all.

Steve: What you're talking about is, like, I have a 100,000. Boom. I wanna park it, get my and get a return. So you're saying that's an option. Yeah.

Hey, disruptors. I just wanna share that myself as well as about half of the people on the show for disruptors are members of the Collective Genius real estate mastermind also known as CG. Now I've been a member of the Collective Genius for well over four years now along with about 700 other top tier real estate investors that flip a combined over 50,000 homes per year, and I've personally made a ton of money and developed some deep personal lifelong friendships there. If you wanna look behind the scenes of what it's like to be an esteemed member of this organization and how it's helped me scale, please check out cgmastermind.com.

Ference: Yes. So what a lot again, this is education, not only for average Americans. This is something that I've taught to CPAs, agents over the years. Most of them don't realize this. But one of the there's two ways you can invest in these policies.

The one you ran into where you're gonna put in so much so much per month, per quarter, per year, over a period of time Mhmm. Or what we call front loads.

Steve: Mhmm.

Ference: We just dump a bunch in all at once. By the way, your your liquidity on those gonna liquidity on those are gonna be about 85% day one. Mhmm. Now why people don't do those? Even advisors, agents, insurance agents will say, well, that's a what's called a MEC.

If you wanna look at it up, it's modified endowment contract, 1988 TAMRA tax rule. K? The MAC says, if I put the money in, I can grow a tax deferred, but when I take it out in a policy loan or withdrawal, it's taxable. Right? Alright?

Well, here's the first thing I'm gonna respond to that. If you didn't make an investment because it was taxable, would you ever invest in anything? No. Exactly. Almost everything you invest in, stocks, bonds, mutual funds, real estate, crypto, precious metals.

Mhmm. When you sell it, most of that stuff, you got a tax bill. Mhmm. Right? Income or capital gains.

So not doing something because it has a taxes because of gains is a really stupid reason not to invest. Mhmm. Alright? But depending on the situation, you can also access through bank lines and such where you may be able to avoid that tax. You may or may not.

Steve: Mhmm.

Ference: But what's more important, liquidity or tax free? Yeah. So Now the ones you fund over time, yes, those are tax free.

Steve: Mhmm.

Ference: You fund it over usually five years or longer. You have an account where you can access it however you want, through the policy loan, through the bank line, whatever. It's tax free. Okay? That's great.

Here's what I do for most people. I say, look. Which is more important? I can't decide. Well, then let's do both.

Could you put a chunk in one Mhmm. Uses an operating account, high liquidity, you're you're using it. Yes. Your gains might be taxable at some point down the road, but so is every other investment. Mhmm.

And yet another one you're building over time.

Steve: Mhmm.

Ference: It's a tax free bucket of money the rest of your life.

Steve: So and that was my experience. If I remember correctly, the liquidity sucked with the payment over time.

Ference: So this is where the other problem comes in. So think of a teeter totter. Mhmm. Put cash on one side, put the death benefit on the other. Here's a problem I run into constantly.

Insurance agents wanna put in too much death Mhmm. You can adjust that teeter totter significantly. I mentioned earlier, you do a front load, you should have at least at least 80% liquidity day one. Mhmm. You don't, it's not structured right.

The teeter totter's off. Right. If you have a multi premium, we call it, where you fund it over a number of years, your liquidity should be about two thirds day one or more. Yeah. If it's not, what's happening is they're not adjusting the teeter totter most efficiently to maximize cash for you.

Mhmm. Now why would agents do that?

Steve: Potentially the premiums.

Ference: It's about commission. Mhmm. So and the insurance agent doesn't get paid by cash. Cash is cash, basically. They get paid on the amount of death benefit.

Teeter totter?

Steve: Mhmm.

Ference: If I push the if I double the death benefit, I just double my commission.

Steve: Gotcha.

Ference: I cut it in half. I did cut it in half. Mhmm. Where's the motivation?

Steve: The incentive is to

Ference: have a lump

Steve: of death benefit.

Ference: So if I say to people, you're gonna have 80% liquidity day one, that means I just cut my commission at 80%. Gotcha. Why in the world would I do that?

Steve: I don't know. Why would you do that?

Ference: It's simple. Volume.

Steve: Mhmm.

Ference: I'm blessed that I have a radio show. I our company has over 5,000 clients now. We've been around for twenty years. And I have a shortage of people to talk to or reach out to me.

Steve: Significant reach.

Ference: Yes. Most financial advisors, agents, whatever, don't have that luxury.

Steve: So they

Ference: have a handful of clients, so they gotta squeeze as much as they well, they gotta make the money they need to make. Yeah. So what I say to people all the time is if you have a policy where you have less than 50% look. Actually, really, if you have less than two thirds liquidity on it day one regardless Mhmm. It's not structured properly, I'm I'm gonna encourage you to contact me at your personal bank dot com at that point.

Yeah. Because we'll run a head to head comparison. We can do a ten thirty five exchange. Mhmm. Your real estate investors understand ten thirty one exchanges.

Right?

Steve: Mhmm.

Ference: It's a tax free, nontaxable event. Event. We move the cash from one to the other. Now your money grows faster every year and more liquid. Gotcha.

Tax, no harm, no foul. You're in better position.

Steve: And then as far as you're saying the potential tax consequences. Right. Is tax consequences on the money you load or the entire gain?

Ference: Only on the gain. So if you do the front load, remember

Steve: Let's say, hypothetically, I got a 100 k.

Ference: Right.

Steve: I did the front load. Right? And that 100 k turns into a million.

Ference: You're gonna pay the tax potentially on the gains only, not the principal.

Steve: So the 900 potentially in this scenario.

Ference: Right. Gotcha. There's ways there's probably not enough time in this podcast to share, but there's legal ways to to, legally avoid those taxes.

Steve: I mean, I think I I will make time to understand that.

Ference: Well, it gets into some advanced planning and stuff we can do. I mean, there's charitable things that can be done. There's all types of charitable trusts. There's a myriad of thing. There's life in, in, ILITs, insurance, life insurance trust.

Steve: Gotcha.

Ference: There's a whole myriad of things that can be done. So if you let me put it this way, Steve. You say, hey. I got a million I've I've got a $900,000 gain. Mhmm.

We need to talk. Because there's some things we can do to mitigate that tax or at least minimize it.

Steve: Mhmm.

Ference: If not completely eliminate it. Mhmm. But, again, you've gotta talk to the right tax attorneys Sure. And the right financial The professionals. Yeah.

I can steer you that way.

Steve: Yeah. Okay. So we talked about a lot of things so far. Yeah. Anything we've missed.

We talked we titled the show, you know, what the wealthy and the banks know that you don't. Right. Have we missed anything?

Ference: I think it really I mean, the big point we wanna drive home, I don't think you've missed it. It's just positive arbitrage.

Steve: Mhmm.

Ference: The power of compound interest growing over time, even on money you spent. Think about let's say your house how much does your household spend a year? I mean, everybody's listening. Yeah. $50,100 k.

I mean, depends on the household. And what benefit that's what's called flow. It's another financial literacy concept. Banks have flow. Right?

They have deposits coming in. Right? And then they have loans going out. Mhmm. Okay.

That's a flow. And you do they make money on that flow?

Steve: I mean, they have money they make money from lending it.

Ference: Yes. Yeah. Of course, they make money on that flow. Right.

Steve: Do you? No. It's spent.

Ference: Correct. Why would you like to start making some money on that flow? Right. In other words, this is a little more advanced Mhmm. Concept.

I don't usually start people here. We usually get them going, get it up and running. So they operate it, start seeing how this works for them. They say, hey. This is pretty cool.

There's another common misconception. Let's do another one.

Steve: Mhmm.

Ference: I own seven myself personally. I'm in my thirteenth year. Mhmm. Okay? So you build over time.

My doctor, I would just had lunch with him right before Christmas. He started twelve years ago, and he funded five of these policies over his first five years. He now runs every, dime of money that comes into his practice through his five policy. He then pays his expenses out of that. Mhmm.

Okay? And if he picks up just 1% even. Yeah. Think about it.

Steve: 1% per year.

Ference: Per year, per lives.

Steve: Yeah. Very well.

Ference: This is his twelfth year. Mhmm. He's a happy camper. He likes me a lot. Yeah.

I don't get charged when I see him.

Steve: So I'm sure you've talked to people

Ference: Other than supplements, he's a naturopath. Other than supplements, I buy from him.

Steve: That's pretty awesome.

Ference: Yes.

Steve: So I'm sure you've talked to people who wanted to game the system.

Ference: Oh, yeah.

Steve: Absolutely. Like, we take the 100 k. Yep. We buy we front load it. Yep.

We get a line of credit. Yep. I know where you are. 50 k. Yep.

And do it again.

Ference: Yes. Right?

Steve: I'm sure Yes.

Ference: You have a lot

Steve: of people ask you this question.

Ference: I've had some I have some people who have done it, and I've done it myself.

Steve: Okay.

Ference: K. There's sometimes it works, and sometimes it doesn't. What you're talking about is leveraging policies. Mhmm. K.

And by the way, you can do 80% if you wait one year. So let's say you put in using your example, you put in a 100 k. Mhmm. You wait a year. You borrow the 80 k and use the money from that to fund policy two or the second generation.

Right? Mhmm. How many generations can you take that? As you want. Now 80% each time.

Mhmm. Okay? So you're making more and more return on your money each time you do that. Here's the challenge. That works as long as the money you're earning is the same or more.

It actually has to be a little bit more than what you're getting charged to borrow. Mhmm.

Steve: When it

Ference: gets to be the same, there's still some cost, you know, there's some some cost of insurance and stuff. You can get it underwater just a bit. Okay? If your cost of borrowing gets up underwater, you're in trouble.

Steve: A lot of trouble.

Ference: Right. They keep it pretty even, to be to be frank, but, so I know there's 24 last twenty eight years it's worked.

Steve: Mhmm.

Ference: Doesn't work all the time, though. And that's what the people who and I have I have some clients to do that. I've done some of that myself. But you have to go in it with your eyes open knowing, hey. Do you have other resources of other money for those four out of twenty eight years that ain't working?

Steve: Mhmm.

Ference: And how many of the how many generations have you gone? Because you might have to add a little bit more money in there during those years to keep everything afloat.

Steve: Why would you have that money to keep it afloat?

Ference: Because there's still some cost of insurance and stuff like that. So there's still so so you could be losing half a point or something like that. You know what I mean? Gotcha. So you gotta be careful.

What I say is it works. Mhmm. Yes. You can do it. You have to have a little bit of caution or or have go in with your eyes open knowing I've gotta have some reserves elsewhere just in case Mhmm.

Like this last year or two has been, where you kinda gotta feed it a little bit to keep it going. Mhmm. Once the positive arbitrage comes back again, we're off and running again.

Steve: Right. Gotcha.

Ference: Okay. That makes

Steve: a lot of sense.

Ference: Yeah.

Steve: So you were saying that what, your personal loan is you're we're, comparing it to, I think the traditional personal banking we know with infinite banking

Ference: Mhmm.

Steve: And turbocharging it. Yeah. And the the nuance what I'm hearing here, the the the specific difference really is instead of borrowing from the insurance company, borrow from the bank for a larger arbitrage. Correct.

Ference: Got it. Correct. And you got two different entities. Now it doesn't matter. So that's when I I did the workshop a week a month or two ago Mhmm.

Where they were talking about the difference between, you know, direct recognition, nondirect, and all that. It doesn't matter. If the money's all there, it's just gonna get paid. Mhmm. So what do we care?

Yeah. We just want the we just wanna put the money in the insurance company and leave it there and just let it grow. This pile just keeps growing. Mhmm. We peel off of it as needed from the bank.

Mhmm. It's that simple.

Steve: Yeah. Gotcha. And then somewhere along the way, you decided to start a radio show.

Ference: Yeah. So, gosh, about 2018 or so. So well, actually so I guess we gotta back up a little bit further. So, you know, I had this, you know, started my own company. We built it up.

I we're doing the traditional IRAs, four one k's, retirement planning, all that stuff. Like everybody else there, the dinner seminars, all that. Our company was top 10 in dinner dinner seminars here in Phoenix for several years in a row. And then o '8, o nine happened. All that kinda just changed, went away.

And one of my, one of my clients said, hey. You need to come speak talk to my aunt. She's has this real estate group up in Seattle. I didn't know anything about that. I was, why do I need to go to Seattle?

Well, she's got this group. She bugged me for, like, six months. Mhmm. You need to talk to my group. And finally, she says, Farrence, you gotta come next month.

It was, like, February. I said, why do I wanna go to see Seattle in February? I'm in Phoenix. He goes, yes. Next month, I got the self directed IRA guy, and your deal's better, and I know it, and I don't want my people doing your thing or that that.

I want them to do your thing. Okay, Trish. Fine. So I fly up to Seattle really not knowing why or what I was getting into. I got 70 real estate investors in there.

It's the largest real estate investment group in Seattle. Mhmm. She introduces me. She's a client. Like I said, she understood the personal bank, how it worked.

I shared it. I get a standing ovation. I'm not used to that.

Steve: No. No. I'm a financial guy.

Ference: I'm talking about numbers and taxes and boring stuff. Right? A lot of those people in that room are still clients of mine today. Wow. I saw them again just a couple months ago.

I spent some time in Seattle. It was great. But from there, like, hey. I know this group over here you need to talk to in this group. Next thing I know is all word-of-mouth, no advertising.

I'm traveling all over the Western, you know, from Chicago West speaking to investor groups. Mhmm. Ira IRA groups, self directed IRA groups, real estate groups, you name it. Yeah. Got to the point where I was like, I had to back off my schedule.

I have a family. Yeah. I wasn't home. You know? So it started getting pickier.

Somewhere around 2018 roughly, somebody attended one of those workshops said, hey. You should be on money radio. What's that? I mean, I'd heard of it. I listened to it.

So you need a show, and I know the manager there. I I'll get you an interview.

Steve: Mhmm.

Ference: K? So I get on there. They do a ten they wanna do a ten minute interview. It's a business focused kind of thing. The guy says the break says, can you stay another ten minutes?

This is awesome. I'm interested myself. Okay. I get done with that. The owner the owner and the manager of the station said, we heard your interview.

How long have you been on the radio? I said, this is my first ever. No way. I said, well, I've been speaking. Oh, okay.

It shows. How would you like a radio show yourself? Yeah. They had a guy retiring, you know, that kind of thing. He said, we love your content.

It's unique. It's different. They've been there thirty years. In fact, that's where Robert Kiyosaki got started with Rich Dad Poor Dad. Same guy.

The owner of the many radios who still owns it. He told the story. A guy walks in the book with this nobody heard of in the late eighties called Rich Dad Poor Dad and wanted to promote it. That's where he started.

Steve: Gotcha.

Ference: Yeah. Anyway, I've gotten a chance to meet him. He still does stuff occasionally. Anyway, start doing this radio show. At first, I was hesitant.

I was like, where am I gonna find the time? Mhmm. Talking to my wife, and it's like, because I'm traveling. I'm speaking. I've got clients.

I got a family. She goes, it's a whole new audience. So I said, okay. Year and a half later, COVID hit.

Steve: Mhmm.

Ference: All the speaking stuff disappeared. Right. I'm on the radio now, and I'm thinking that was a bit of a shock to the system, to our business, because I understand I'm in the financial world about twenty years at that point. Every single client I've ever met, I'd actually met in person or at least in a workshop before they became a client. Yeah.

I'm thinking, how am I gonna get paying clients without ever actually physically meeting them? The radio came in.

Steve: Mhmm.

Ference: People started calling. The radio numbers just jumped. A lot of people started listening to radio more. Mhmm. They're at home.

Right. Right? And then other stations, they had they added a second hour. They they were, they said at that time, I was their second most popular show. That's phenomenal.

Steve: Yeah.

Ference: And I was at one of the newer shows. Right? And so then other stations started reaching out to me. Hey. Would you consider us on your we heard your show.

Love the content. It's unique. It's different. And so now we're on over 20 radio stations nationwide and 20 of the 30 largest markets in The United States.

Steve: That's pretty phenomenal.

Ference: Yeah. Probably

Steve: getting a little more business from that than Yes.

Ference: Yeah. And I don't travel so much. Yeah. That part's fun. So

Steve: you were saying they asked you to go to Seattle because she thinks it's more important for her investor group talk to you versus self directed IRAs. Right.

Ference: Because there are some limitations with self directed IRAs. So let's not talk. Yeah. I'm gonna step on some you want me to step on some toes?

Steve: Yeah. Let's bring some baseball bats around.

Ference: Alright. Well, as we all know, there's some limitations with self directed IRAs. One of them is, you know, the the prohibited transactions. Mhmm. I'm sure you've gone into all that kind of stuff.

Steve: Very annoying.

Ference: Yeah. There are more fees. Plain and simple. Mhmm. As I tell people, if you're gonna do a self directed IRA, you have to actively use it.

I have a lot of people I see that have them, and they kinda sit on them. And they're just paying a whole bunch of extra fees Mhmm. For no reason. Right? And then regardless of what you do, unless it's a Roth, you're ultimately what are you doing?

You're gonna pay the tax eventually. Yeah. You're doing what the government does. You're kicking the can down the road. Mhmm.

Now one of the things about taxes, I'm not I'm not saying to avoid taxes. I'm saying to limit them and do it strategically. Yeah. Alright. We are forget the politics.

Right now, we are in the third lowest tax bracket in the history of the income tax. Coolidge was the lowest bracket. Reagan first term was second. And the Trump since 2018 Trump is the third lowest tax bracket in history. Mhmm.

When do you wanna pay taxes when they're low or they're high? They're low. Why are you deferring them when they're low? Mhmm. And then later pay them at a potentially high higher level and then certainly unknown future rate.

And, yes, we're fans of Doge and all that, but what if all that doesn't work out as well as we hope? Mhmm. Well, our taxes potentially will be higher in the future with increased debt.

Steve: I think there's only one direction it can go.

Ference: I don't think it's going down No. To be fair. So my point is, why are you paying why are you kicking the can down the road to a potentially higher or worse tax situation you have now? Why not pay the tax now strategically when it's low, but let it grow tax free for life? Mhmm.

Why Ross are so famous? Yeah. So Popular. Popular. Thank you.

So is she and there's no positive arbitrage with self directed IRAs.

Steve: Yeah. And there's a limit to how much you can put in there.

Ference: And limits on how much you can put in. There's limits on what you take out. Mhmm. There's a required minimum distributions. You gotta and the congress changes these rules all the time.

Right? I mean, I do this full time, and I have a hard time keeping track of this rule changes year to year.

Steve: Yeah.

Ference: K? And so every I can tell you just about every single client I know who is 72 plus now, who built a sizable IRA, traditional IRA, they are very unhappy campers. Mhmm. They're getting creamed on taxes. Yeah.

Because now their Social Security is getting taxed higher rates. Mhmm. If they receive in pension or other investment income, guess what? Because of the required distributions, they're getting hit higher tax brackets there. Fact studies show the argument is you're gonna be in a lower tax bracket when you retire.

Steve: Mhmm.

Ference: 85% of the time, do you know that's not true? That's the stats. Yeah. The stats, Wall Street's run these over and over again. 85% of Americans, when they retire, are in the same bracket or higher in retirement than when working.

Because guess what, folks? Social Security benefits are taxable. Mhmm.

Steve: And that's a

Ference: Among other things.

Steve: Relatively newer deal. Right? I think that's, like, the last thirty, forty years.

Ference: Nineteen eighties. That was Clinton administration.

Steve: Yeah. And then we're talking about insurance policies. Now there's a very popular, radio guy. I think he's got a bigger name than you.

Ference: Yeah. Dave Ramsey.

Steve: And he does not like insurance policies. And anytime someone talks about insurance policies He goes off. He flies off a handle.

Ference: He does. Now that should tell you something. He's he's responding emotionally, isn't he? Yes. So when somebody is being emotional, are they being logical?

No. Alright. If you I've read his books. I've read his stuff. If you read the story, he there was his his mom got screwed over by a bad insurance investment.

By the way, I would never have recommended that for his mom to particular invest. So he has colored a paintbrush. The entire industry is bad because his mom had a bad experience with a bad product. It was a bad fit. Now she needed a she wanted to cut wood, and somebody sold her a hammer.

Yeah. Alright? One of my pet peeves, and I've done this forever, there's no such thing as a bad financial tool. They're bad fits.

Steve: Mhmm.

Ference: Absolutely. I see that all the time. Yeah. They all have a purpose. Like, I hear this all the time.

People say, oh, I hate annuities. Okay. Let me ask you a question. You have a a recent widow who her husband had a pension. She counted on that pension.

She now has a chunk of money she can invest in an annuity that'll create a private pension for her, and that's her comfort zone. Oh, well, that's probably a good idea. Yeah. Even people hate annuities say that to me.

Steve: Yeah. That's what I was gonna say.

Ference: Yeah. Exactly. Right? There's there's a time and a place. Yeah.

There's a fit. My point is simple. If you paint if you if if a financial person of or any stripe says, I love this unconditionally or hate that unconditionally, That's not financial advice. Mhmm. Probably doesn't apply to you, and they're responding to some emotional reaction they have.

And as one of my biggest pet peeves with agents, advisors is, dude, yeah, the gal, it ain't about you. Mhmm. It's about the client. Right. It's about them.

Listen to what they want. What do they need? Mhmm. What are their goals? Where and now let's find the tool, the hammer, the saw, whatever Mhmm.

That'll fit them. So sometimes annuities make sense. Yeah. Sometimes life insurance makes sense. By the way, you can buy life insurance far different.

Life insurance will do a lot. There's five different kinds of life insurance. There's five different kinds of annuities. That's the other thing. If you won the lottery Mhmm.

Would you be upset?

Steve: Of course not.

Ference: That's an annuity. If you have a pension from the government, is that a bad thing? No. Not at all. That's an annuity.

Yeah. Okay? My point is there's five different kinds of annuities. Don't paint it all under the same brush.

Steve: Yeah. That makes total sense. Yeah. Yeah. So I guess Dave's got two really, really passionate things that he's really wrong about.

That one and then the debt. Obstacle I hear from newer wholesalers is finding buyers for their deals. Because unless you built a massive buyers list or have a huge dispo team, you might struggle to move your deals. So when we started working with InvestorLift, we've been able to reach new buyers and sell deals faster

Ference: at

Steve: higher prices. We can see buyers in our area, their contact information, and with the new AI capabilities, connect with the buyers most interested in our deals based on the algorithms. We can also see who's clicked on our deals, how many pictures they clicked on, and how long they spent looking at it, and finally, what actions they took after engaging with our deals. We are now connected with thousands of buyers in our markets, and we now know exactly where we are with each deal and what next steps to take. If this sounds like something that would resolve or help your dismal process, I highly encourage you.

Go to the website, put in disruptors for 10% off so you can focus on locking up deals unless I'm worried, stressed, and frustrated about finding buyers.

Ference: Well, here's where I agree with him. For general, do you wanna be out of debt? Absolutely. Mhmm. You know, being Generally.

Yeah. Generally speaking, debt free. I mean, that's a good thing.

Steve: Mhmm.

Ference: But I teach I do a whole thing in my workshops where I talk about the difference between strategic debt versus consumer debt. Mhmm. Here's a bit. If you have to go to work, Steve, to pay the bill I don't care if it's your business, your employee, it doesn't matter, but you gotta go to work. So you're a doctor or you're a ditch digger.

Well, that's the kind of debt you wanna get rid of. Exactly. Because if you can't go to work, you can't pay that bill, you got problems.

Steve: Mhmm.

Ference: But can you buy a rental property? Long buy long term buy and hold, or take a mortgage against it. Yep. And as long as your cash flow, your income is greater than your expenses, can you build wealth? Mhmm.

Of course. Yeah. So I get these Dave Ramsey aficionado.

Steve: That's what I'm saying. Like, that's the other thing where he's

Ference: Yes. I see that to them. So I say what I just shared with you right there. Like, well, yeah. You can do that.

Well, then is all debt bad? Mhmm. No. Right. Stop painting things in broad brushes and saying, this is bad.

This is good. Mhmm. No. It depends on the situ the answer is it depends. Yeah.

Steve: And I think that's what every accountant says is Yeah. Hey. What do I do about this? Well, it depends. It depends.

Ference: And, really, what they're trying to say to you is, well, what are your goals? Right. What's your what's your fact pattern? The term we like to use in our industry, what's the fact pattern? What are your what's what's going on?

What's your goals? What are your dreams? What are you trying to accomplish? Where are you at? Mhmm.

Let's try to find and sometimes I'll say to people who you know, they they hear me on the personal bank show, and they'll contact me. They're all excited about it, and they wanna do they've been listening for months, sometimes years even. And their financial position and situation is not right right now for them. Like, they got a lot of debt, this and that. I said, well, here's what you need to do first.

You're not ready yet. Mhmm. We'll get you there. You should do this or that first. And they get disappointed.

I'm like, well, do you want me to tell you what you need to know or what what you wanna hear or what you need to hear? I'll get you there. You're not ready.

Steve: Yeah. Gotcha. And then you're speaking

Ference: on

Steve: tell me more about that.

Ference: So, John Burley, probably many of you on this show are familiar. A

Steve: couple of times. Yeah. Yeah.

Ference: I was on we've become good friends. We were on a bank board together, got to know John quite well. And he's been on my radio show a number of times too, and I've been through I'm a Black Card member too. I've been through health his training. He reached out to me about a year ago about doing a joint event together.

I was honored by that. So we are doing January 18 Mhmm. 2025. We're doing a Master Your Money. First time ever, the two of us, he's gonna be speaking about seven money secrets for the rich.

Obviously, all about real estate.

Steve: Mhmm.

Ference: K. I'll be talking about the personal bank, how you tie the two together to enhance your real estate investing. We're gonna kinda tag team and then end up the day with a q and a. So nine to five, go to yourpersonalbank.com to register. I would recommend doing it soon.

We got a few more free seats available. And then after that, there's gonna be a cost.

Steve: Yeah. So yourpersonalbank.com.

Ference: Yes.

Steve: And then if someone wanted to find you on the radio, where is that at?

Ference: Well, it's the best place is just can go to my app, your personal bank app or the yourpersonalbank.com website. You can go listen you can listen to current or any of the previously recorded shows anytime you want. Of course, it's on Spotify and everywhere else you can find. Just your personal bank. And then, yes, we're on 20 stations around the country radio terrestrial radio stations around the country, but it's on different times, different locations, and you may or may not

Steve: be in that, space. Spotify is easiest.

Ference: Spotify, but or the website or the app.

Steve: Yeah. And then someone wanted to reach out and do, to work with you. What's the best way to do that?

Ference: Again, yourpersonalbank.com. And as I say on there, yes, you'll reach me. I'm an assistant. Mhmm. I I had 45 people working for me at one time.

And over the years, I've learned how to streamline things and specialize, and I just enjoy talking to people directly.

Steve: Alright. Simple enough. Yeah. Before we end up here, what are some last thoughts you want to leave all the listeners with?

Ference: I think one of the biggest things is if you haven't realized it yet, everything has changed economically. We're in a different environment. Last decade was the decade that was known as easy monetary policy, low interest rates, stock markets, and real estate markets, crypto, you name it, just took off. We are now in the midst of one of the biggest bubbles in history. Take any measurement you wanna take.

We are at extreme levels on all of that stuff. K? That is a fact.

Steve: Mhmm.

Ference: Now, will it continue going up like that? No. We will have will we have a correction? Yes. But no one can tell you is how much, how long, or when.

But there will be a correction.

Steve: Yeah. I

Ference: can with sort of app I can share that with basically absolute certainty. Yeah. And this goes back to the nineteen fifties tulip bulb. You know? You know, there was a time in Holland that you tulip bulbs were more expensive than a house.

Yeah. Okay? This is not new. Alright? Now the the message I'm trying to have people share people is there's not a reason to be scared, though.

Again, it's not new. This has happened before. Mhmm. And it's going to happen again. What do you do when you get a .com burst or an o eight zero nine correction in the real estate and stock markets, which some are predicting?

The numbers are certainly there to could potentially support that. I'm not predicting it. I'm saying it could be. We could have a very severe correction. What do you do?

You diversify. You protect yourself. You start if you've got assets that are investments that are subject to risk, dial it back Start peeling some off. If you've had winnings, let's say you've taken advantage of this great run up in the stock, real estate markets, whatever, crypto, whatever. Does it make sense to take some off the table?

I mean, what do what do successful wise investors do? Look at Warren Buffett.

Steve: Mhmm.

Ference: Warren Buffett has sold more stock in his career, both percentage and dollar wise, over this past year than any point in his sixty plus year career. That's a pretty smart dude to listen to and follow. Yeah. K? You know, last quarter, he didn't buy a single dime of stock.

I don't think he's ever done that in his career. Warren Buffett's actions are telling us what's going to happen. By the way, he did the same thing before o eight, o nine. He did in o seven. He also did in 2000.

Go back in charts and look what happened. 45, 55% drop top to bottom in the markets, top markets, both of those times. Real estate, a lot of it suffered there. Real estate's gonna have a correction.

Steve: Yeah. He's pretty good at, what's the word, the the fundamentals. Yes. Paying attention Pay attention to the fundamentals. Fundamentals.

Right.

Ference: Am I saying get out? No. I said take the winnings off the table, didn't I? Understand. Get into the fixed asset market.

It is the golden age. Get into the stuff that more in the bonds as we talked about earlier. High cash value policies. By the way, you know, it's the best time to buy an annuity in over forty two years because of the higher bond interest rates. They're now paying double and triple they were where they were just a couple years ago.

If you want guaranteed lifetime income, if somebody says, I want a pension check, you know, those are pen now paying two I get companies are paying a 30% bonus upfront for that. So if you put in a 100 in one of those, and they'll pay give you an 8% increase guaranteed per year. So if you put in a $100, a year later, you would have a $140,000 available for a long guaranteed income or pension check for the rest of your life.

Steve: Wow.

Ference: It's the best time in forty two years. Or I have another company that'll roll up the money up to 14% per year that you defer the income. A 14% per year growth is pretty strong. Right?

Steve: Even that part alone is pretty good. Let alone, whatever whatever else is coming with it.

Ference: I got another one. They'll do 20% upfront bonus and 10% a year. Okay? So it depends on when you wanna so if you think about it, in five, six, seven years, you could double the amount of money you would if you wanna defer it a few years, double the amount of money you're gonna receive for a pension guaranteed for the rest of your life. That's called a guaranteed income rider Mhmm.

Or a guaranteed income annuity. Yeah. It's the best time in over forty two years. So everything you thought about that was you thought was good the last decade, guess what? It ain't probably gonna be anywhere near as good this decade I shared earlier.

Steve: Mhmm.

Ference: All the analysts, AP Morgan, Vanguard, BlackRock, you name it, they're all projecting S and P 500 returns between 35% and significant corrections in the next decade. Wouldn't it be ironic? This is the thought I've been leaving with people. Wouldn't it be ironic if you put your money in a personal bank policy or an annuity or something like that, and you made 7%, which is likely what you're gonna those guaranteed, tax free, all that, and you outperform the S and P for the next decade because that's the most likely probability right now. Yeah.

Kinda hard to fathom. You either evolve or you die. Yeah. Right? Whether it's business or investing or you name it.

So I'm not saying it's all bad. What I'm saying is it's changed.

Steve: Yeah. Yeah. I mean, it goes back to what you're saying, the golden age.

Ference: Golden age of fixed assets. Yeah. We evolve. Alright. Adjust.

Perfect.

Steve: Well, thank you so much. I've learned a lot. Awesome. Appreciate having you on.

Ference: Thanks for having me on.

Steve: Thank you guys for watching. See you guys next time.

Ference: Steve train. Jump on the Steve train. Disrupt us.

What The Wealthy And Banks Know That You Don’t

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From Owing $60M To Funding $4B In 2025

What The Wealthy And Banks Know That You Don’t

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