Moving to the opposite side of the interview, host of the Cashflow Ninja Podcast and the President and CEO of Producers Wealth, M.C. Laubscher, visits to talk about the basics of infinite banking and share the strategies to wealth creation and how it allows us to reclaim the banking function and control over our cashflow. MC also discusses why you should not give your money to a financial advisor nor invest in life insurance and how to stay liquid and get access to your dividends anytime plus get your money growing in different vehicles.

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Create Wealth with Infinite Banking with MC Laubscher

Our guest is MC Laubscher. MC is a wealth strategist, educator and a financial freedom fighter. He is the President and CEO of Producers Wealth. He hosts the Cashflow Ninja podcast, top-rated business and investing show available on iTunes or wherever you get your podcasts. I’m a big fan of his show and I recommend you check it out. MC, welcome to the show.

Thank you so much for having me on. It’s an honor to be on your show and it’s great to connect.

I’m happy to talk to you. I’m a listener of your show. Most of the time, you’re on the other side of the interview and you’re asking questions. I want to have you on to talk a bit more about what you do in your business and get you on the other side of the interview. Can you tell us a bit more about what you do at Producers Wealth?

Producers Wealth is a wealth creation firm that virtually helps clients all over the United States. We have the ability to serve them virtually in all 50 states. We have some partnerships in Canada to help our Canadian audience and clients up there as well. We’re not a wealth management firm. There’s no money that we manage. We help create strategies for investors, for business owners, for entrepreneurs and for busy professionals. We also help them to set up an infinite banking concept or cashflow banking as we call it and integrate that with real estate investments in their businesses and so forth. Investors and entrepreneurs and business owners are a unique breed. We operate a little bit differently. For some reason, the majority of people that are out there follow the advice that everyone else follows when it comes to money and it comes to financial strategies. It’s not through their strengths. It’s not designed or built for investors or for entrepreneurs or business owners. We show them a completely different way of how to invest and how to produce more and create more around their strengths and around their skill sets where they have more control. They know how to protect their downside and then they can multiply whether it’s the value or the money.

In my own investing and entrepreneurial journey, I’ve gotten to meet a lot of very successful investors and entrepreneurs. They have a very different mentality compared to your middle class or average 8 to 5 working stiffs’ mentality of work more hours so you can save more money and stock it away in your 401(k) and buy a house because it’s a “good investment” and all those good things. We’re coming at it from a different angle. I agree with you there. You mentioned the infinite banking concept or what you call cashflow banking. Can you give us the basics on this? I want to start with the basic. I’ve heard this before and I still feel that I’m missing a few pieces so I need to hear things a few times. If we can start at the basics, that would be great.

I’ll start with the basis that it fits into an overall strategy. One of the things that I mentioned is that the number one strategy for an investor and an entrepreneur and a business owner is completely different than the strategy for the average person that goes in and works and earns or gets a W2. A lot of people would say, “MC, what do you mean by that? Give us an example.” One of the low-hanging fruit right there is that what employees and the majority of people do is they work, they earn their money and they max out their qualified retirement funds. They have zero control over it. It’s zero downside protection. It’s a hope-based strategy where the entrepreneur and investor have a specific skill set whether it’s real estate investors, whether it’s entrepreneurs and business owners.

They are generating and producing and creating value in their business and money in their businesses. Then they take their money and then they give it to someone else. It’s going through investors, which takes it out away from them and away from their strengths. It blows me away how people are absolute ninjas. They knock it out of the park as far as production and making money as investors or entrepreneurs. Then they hand it over to a financial advisor that takes it away from their business and away from their investing business. If you have a machine where you can stick in $1 and it spits out $100, how much would you like to put into that? That’s your investing business. The infinite banking ties into that. It’s a strategy that puts you in control of the asset clause. It’s built on a dividend paying whole life insurance investment.

What it does is the infinite banking concept allows you to reclaim the banking function and control over your cashflows. That’s what it comes down to. Insurance is the best vehicle to utilize to do that because it’s a savings vehicle. It’s an asset which allows you to do a couple of things. The first thing is you have full control over it. You control how much money you put in there and how much money you take out of there. The money that you put into these policies is liquid. You can access it at any time. There are guarantees on principle and growth. You have access to dividends because the companies and the carriers that these policies are structured with are mutual insurance companies. They’re not stocks. It’s not AIG or State Farm, which is mostly property and casualty, which also sells life insurance. It’s completely different. They’ve been around for almost 200 years. They’re not listed on the stock exchanges. They are out of that system. They manage on behalf of the policyholders, which are the shareholders of the company. You earn dividends as a shareholder in the company.

The money inside there grows tax-free and then there’s also on-tax distribution. There are no contribution distribution limits like with IRAs. It’s a completely private contract. It’s an invisible financial instrument so nobody knows that you have this. Nobody knows that you’re going to take policy loans outstanding. There’s no credit rank on that. In all 50 states, I know there are 46 states that have complete asset protection. It’s life insurance so it provides a death benefit where your beneficiaries get it income tax-free when you pass away. It’s great to do estate planning and legacy planning. The big thing is that when you build up the cash value of this policy, you get to use this cash value as collateral to borrow from the insurance company. What that means is you don’t borrow from your policy, you just borrow from the insurance company. You’ll get a policy loan that’s collateralized by your policy and your death benefit.

I know people that have used CDs in the past when they paid anything way back when. You would fund CDs in a bank and then you would use the CDs and borrow against the CDs getting a loan from the bank. You still had your CD. What this does is it has your money working in many different areas simultaneously. You integrate it with real estate investing and your business. You’re supercharging it because your $1 in your own personal business economy is doing many different things. It’s very important from a 30,000-foot level to say it’s part of an overall strategy. We tend to think in terms of products, not strategy. I’m from South Africa. I love Ernie Els. He’s one of my favorite golfers. Ernie has got an amazing swing. If you were to offer me Ernie’s swing or his golf clubs to go play to the Masters, I take the swing. I don’t care about his golf clubs. The insurance portion should be seen in the same light where it’s part of an overall holistic wealth strategy and not sitting there by itself.

Let’s say I’m on the younger end and I don’t have children. I don’t have a lot of things and I haven’t thought much about life insurance. I count myself as a newbie as far as life insurance goes. There are a couple of options. There’s whole life versus term and you’re talking whole life insurance. Do I have that right?

Yes. Whole life, which is a permanent life insurance product, and term which is just for a specific term, these are all vehicles. It’s the same as real estate. It’s all about how you use them in the strategy. One guy that is very vocal on whole life, for instance, is Dave Ramsey. People would say, “Dave Ramsey says whole life is a horrible place to park your money.” I would say, “Dave is right. It depends on how you use it.” For the majority of people, it’s a terrible place to park your money. For people that have it as part of an integrated strategy and also has it structured very differently like cash value life insurance, this is not the cookie cutter whole life that’s sold out to the public there. If you use that, that could be one of the most powerful tools that are out there.

That’s why if you look inside of family offices where some of the money and the wealth of the wealthiest families in the country are managed, they all use this strategy of warehousing their savings in these vehicles because it has all of these qualities that I listed. It fits into their overall strategy. From an insurance standpoint, it’s a vehicle term. It’s a 20-year or 30-year period that you can ensure yourself. The insurance company then takes on the risk. If something happens to you within the 20 or 30 years, then they pay out a death benefit. If nothing happens, then the term simply expires. It’s almost like a put option that you use to protect yourself in the stock market. By the way, it’s the biggest asset that you will ever have in your life.

Especially if you have a family and young children, it’s a way of protecting yourself and your net worth and your income potential for a certain period. Permanent life insurance and whole life, in particular, are for your entire life. It means that if you have a policy, it’s going to endow. What that means is that the insurance company will pay out at some stage, whether it’s now, whether it’s 30 or 40 years down the road. You’ll never know. We might even live to 121, which is some of these policies are structured for. They’ll pay out your full death benefit, by the way, if you hit your endowment age. They know that the policy is going to endow. From a legacy planning standpoint of bringing it all together, the Rockefeller families, which a lot of these family office models are based on, they’re huge fans of proponents of this because it’s phenomenal with wealth transfer into the next generation and especially keeping the money altogether in one family trust. There are many different applications. From a real estate investment standpoint, it’s one way of putting a little bit of rocket fuel on what you’re already doing.

I’ve heard this described as policies accrue a cash value over time once you get a policy and you continue to pay the premiums that accrue that cash value. How quickly does that accrue? Let’s say I take out a policy now, how long is it going to be until I can start borrowing any appreciable amount of money against the policy?

It all depends on how you fund it. For people that have funded it with larger amounts, the cash value or whatever you’re funding it with, it’s available relatively quickly. I’m talking within weeks, within months to borrow against. There are a lot of different strategies that we use, but the premium that you put into the policy, you should have about 80% of cash value roundabout. Everyone is different. There are different underwritings, there are different variables that come into insurance underwriting. For the most part, you should have close to 80% of the premium available in cash value and you should be able to borrow close to 90% of that cash value in the first year within months. If you’re funding as a lump sum and paying your entire premium for the year up front, it becomes available very quickly.

At this stage, what you’re doing is you’re putting your money in a place, warehousing efficiently for savings until you deploy it into investments at a higher rate of return and then redirecting it and warehousing it back in there. That’s a question that a lot of people have. They said they don’t understand. They fund the policy. They borrowed it at 5%. It’s common and a lot of carriers allow you to borrow using your policy as collateral. You’re investing at a higher rate of return and then paying your policy back. What you’re doing is you’re replacing the bank. If you put your money in a bank, you would use your money and invest the proceeds and you would put back the returns from the investment in your bank account. You’re doing the same thing. You’re replacing it with an insurance policy because it allows you to become your own banker.

You’ve mentioned a few times that people take money out of the policy or take a loan against the policy to invest in real estate. I’m a fan of real estate and most of the audience are as well. It’s a great way to create wealth and cashflow. Do you make any specific recommendations or point any of your clients in any particular direction as to what assets they should look for? Whether it’s single-families or investing in syndications or maybe for some people with a little bit more money, going and taking down commercial properties all on their own. What direction do most of your people go?

Our philosophy is that you’re your number one asset or the CEO of your own life. We provide a ton of education. We provide resources. We have trusted partners in all of those spaces, but we never ever would say, “Mr. or Mrs., you should invest in single-family or you should invest in commercial or multi-family or mobile home parks.” Most of our clients already have an idea and they already have a knowledge base of certain things that they would like to invest in. Another thing is you had mentioned businesses. Here’s a great example. We have a client and he’s an absolute rock star. He was a former physician, but what he does is he purchases physician practices and he’s got a team that then comes in. These practices are inefficient or running a loss or there are issues with them. They fix up these practices because he has a team. This is his skill set. This is his space and his sphere of strength.

He knows more about this than the majority of people. He’s got a team, he’s got relationships and all those things in that space. Then he turns it around and he either keeps it for cashflow or he sells the practice to another investor, which is now buying a cashflowing practice “rehab” from day one. If that client came to me and said, “I want to invest in real estate,” or something else, I would say, “You’ve got a machine.” They’re back to the machine where you’re sticking in $1 and it’s spitting out $100. More than most people in that space, you have a team, you have the experience, you have a track record, do you want to leave that rather than stay there and keep on putting that $1 into the machine and it spits out $100? We don’t steer or guide them. We encourage education and that’s why we have the podcast to introduce as many people as possible.

It’s all about what they’re interested in. We’ve got people who want to stay with single-family properties and turnkey investments. We have other people who like syndications, especially busy professionals. It all depends on them. I can give you an example too if you’re interested in integrating that of how we’ve used and helped people integrate that. If there’s a 40-year-old male that’s looking to invest in real estate and the end goal is generating passive income, maybe the financial freedom number that this male would have would be around $30,000 per month, which is $360,000 per year. We would then look at the capital that needs to be deployed for over twenty years, which is $4.5 million. There are a couple of ways to do that. Let’s say that there’s $200,000 per year that this particular person would be able to allocate towards funding and going off to this goal aggressively. If they did it without the insurance integration, they’d get to their target in 22.5 years and that’s fantastic.

You would take your money invested in a vehicle that pays 8% per year, for instance, for most mobile home parks syndications. That will get you there in 22.5 years and that’s phenomenal. If you had integrated that with the insurance portion, the infinite banking concept or the cashflow banking as we described it, you would have gotten there by your twenty and you would have an additional $1.46 million tax-free in a vehicle on top of hitting your passive income and your target goal of $30,000 per month, $360,000 per year. That $1.46 million is the opportunity costs of doing things a little bit more efficiently and effectively and paying close attention to that. If you had done it without it, you stole an absolute ninja and you’ve got your target in the approximate time frame. Because you integrated it, you put a little more rocket fuel on what you’re currently doing. That’s a nice sum of money for anyone.

MC, what is the best investment you ever made?

The best investment that I’ve ever made is marrying my wife. It’s truly important the role that the partner that walks on this journey with you plays into your life and where you go and where you end up. The relationship is always been the best investment that I’ve made in business as well.

What is the worst investment you ever made on the opposite side of that best investment coin?

The worst investment that I’ve ever made is when I lead with emotion. A lot of people know about a financial IQ and academic IQ, but they’re not paying attention to their emotional IQ. Every single investment and opportunity that I led with emotions and was too emotional end up as a disaster. I continue to invest in ways to control that little voice in my emotions because it does impact everything that we do in the decisions that we make.

The emotions get in the way. Maybe you get overly excited and you make too risky of a decision where you might not have made before or you’re not as careful maybe with underwriting if it’s a real estate investment. I understand that. What is the most important lesson that you’ve learned in your investing life and career?

The wealth formula that was taught to me by a mentor. Your mental capital times your relationship capital will always equal your financial capital. Invest in your mental capital, which is who you are, what you know, your high-income skill set, what you read, what you learned, what you study, the courses that you take, the skill sets that you learn and so forth. Combine that with who you know, the people that you spend time more with, your network, your mentors, your coaches and your team. If you combine the two of those, that will deliver the financial capital. I always try and reverse engineer and look at the financial capital that I’m off during the cashflow and then try and see who I need to know. Where do I need to hang out with more? Who do I need to hang out with? Who needs to be in my group? Who needs to be my mentor? Who needs to be my coach? What do I need to learn? What skill sets do I need to learn to play at a higher level and reach the next level or reach my full potential?

Always invest in yourself and invest in relationships. MC, where can our audience get in touch with you?

CashflowNinja.com is the podcast that you mentioned. If you want to learn more about creating income streams in real estate, businesses, commodities, blockchain, crypto asset clauses, paper assets and so forth, there are a lot of cashflow ninjas that share exactly how to do that. I also have made a free course available, The Holistic Wealth Creation course that audience can access at YourOwnBankingSystem.com.

Is there anything else that you’d like to add?

I appreciate being on your show and having the opportunity to share with your audience some of the things that we do and share some of the things that I’ve learned on my journey.

It’s my pleasure talking to all the audience out there. Thank you. If you’ve learned anything or you have any questions, don’t hesitate to reach out at PassiveWealthStrategy.com. If you’re enjoying the show, please subscribe wherever you get your podcast. Please leave us a five-star rating on iTunes and a comment. That’s a huge help to podcasters. We genuinely appreciate it. We’ll catch you on the next one.

Important Links:

• Producers Wealth
• Cashflow Ninja
• iTunes – Cashflow Ninja podcast
• CashflowNinja.com
• YourOwnBankingSystem.com
• Passive Wealth Strategy on iTunes

About M.C. Laubscher

M.C. Laubscher is a wealth strategist, educator, and financial freedom fighter. He is the President of Producers Wealth and creator and the host of the top-rated & popular business and investing podcast, Cashflow Ninja.

His mission is to help as many people as possible eliminate the control banks and financial institutions have over their lives by building their wealth in a variety of ways outside of Wall Street.

He believes the best way to achieve this in the Information Age, is by reclaiming the banking function in your own financial life through structuring an efficient cash flow management system and creating and building assets that provide multiple streams of income.

• Here’s How »

• passivewealthstrategy.com