361: Bank on Yourself, Building Infinite Wealth with Cameron Christiansen and Anthony Faso

Show Notes

Cameron was an entrepreneur looking to invest and was having trouble finding a good financial advisor.  They were all cookie cutter and didn’t have solutions Cameron thought were right for him.  So, he went on his own journey where he found “infinite banking” and then started to share it with others.  Four years ago, he partnered with Anthony to focus on helping entrepreneurs with maximizing their finances.  Many of the principles Cameron and Anthony use are from things like Rich Dad Poor Dad and learned to create assets that drive income.  He started to help others and eventually sold his accounting practice to focus full time with Cameron.

What is financial freedom?

When your passive income is more than your monthly income.

What are your thoughts on the financial industry?

People should know what they are investing in.

Typically, financial planning doesn’t come with much education.  People just hand their money over to invest, but don’t create passive income.

People should take control of their wealth and do that by self-educating.

You mentioned “equations.”  What do you mean by that?

An example is wholesaling a home by acquiring with very little out of pocket and then moving it to a borrower.  From the outside, it can sound scary, but it is actually pretty safe and secure.

The equation is if you can find a house (A) and put a little money into it (B), you can sell it for a profit (C).  Once that equation is figured out, you can run a lot of properties through it to find good opportunities.

What is “infinite wealth?”  How do people mitigate risk and build wealth?

People must take responsibility and action.

Learn news ways to create and grow money.

Look at assets that you can have control over that have collateral.

It really comes down to education, so people must commit to educating themselves.

At the same time, you protect your money which is where infinite banking comes in.

What is “infinite banking?”

In the simplest of terms, infinite banking is a cash management strategy.

As people build up money to buy assets, it needs to be stored somewhere.  Typically, that is a bank.

With infinite banking, instead of storing the money in a bank, it is stored in a high cash value whole life policy.

When people first hear “whole life” it causes some alarm bells.

But you want to look at it as your own bank.  You store money there; it has a much higher rate of return that is tax free, and you get asset protection from things like lawsuits.

And when you take withdrawals on from your whole life policy, it continues to compound interest interrupted and continues to grow while you use the money to add assets.

The death benefit is really icing on the cake, but not the main need.

Take us through an example with $100,000 for infinite banking…

Before you put the money in the policy, it is important to pick the company.  There maybe half a dozen that fit.

You want an insurance company that is a “mutual” that has a great track record of paying dividends and that is over 100 years old.

They would also give the ability to “overfund” the policy.

At the 23 min mark, Cameron talks about loan provisions and creating/designing the policy.

You can “one and done” or “make systematic payments.”

For “one and done” with $100,000.  You can then turn around borrow $90,000 to make an investment.

You would take the $90,000 as a loan but not taking it out of the policy – it is coming from the general fund. So, your $100k is still compounding even though you have borrowed $90k of it.

Typical interest rates and costs to borrow the money from the policy?

Typically, policies pay 4-5% or more tax free.

When you borrow against it, you will collateralize it with a bank, but those rates are indexed to prime, so they are more than your interest rate – but if you are buying an asset like a rental property, etc. it should be covering that cost.

What are some of the strategies you teach to build true wealth?

You want to do what you know and what you have experience in.

#1 and #2 are investing in business or real estate.

Real estate is great opportunity with 15-20 different niches that offer great leverage.

Then it is about staying focused and becoming good at it.

What are some of the top niches in real estate that work the best for the most amount of people?

Turnkey real estate is a great opportunity, especially for newbie investors.

If you have experience, finding your own deal is the next step up.

You can wholesale or flip from the privacy of your home.

Syndications are another opportunity.

At the 38 min mark, Anthony talks about the “Hierarchy of Wealth.”

What are some of the secrets you’ve found to maintain a great business partnership?

It’s like a marriage.

You should layout foundations ahead of time with your partner(s).

Make sure there are no conflicts, and you know each other’s why for building the business.  Lay your cards on the table from the beginning.

Having the same values and goals is important.

A process like EOS can help with managing challenges and issues.

Making sure your personalities work well together is important.

Alignment, alignment, alignment!