– Welcome, everybody, to today’s Building My Legacy podcast. I have with me today Sarry Ibrahim. He has a company called Financial Asset Services and it is an interesting company because he’s approaching financing in a very different way. And I think probably provides some opportunities for those of us who are trying to become more resourceful with our resources. So, Sarry with that, tell us a little bit, how did you get into this and what is it that you’ve created for people?

– Yeah. Well, Lois, thank you so much for having me on. I appreciate it. So I run a company called Financial Asset Protection. It’s a financial services firm located in Chicago, Illinois, and we help in service clients in all 50 states. And we do this a little bit different from other financial advisors and financial services professionals. We do this mostly on a strategy called the bank on yourself strategy. It’s also called the infinite banking concept. So this is the main strategy that we use to help clients, especially small business owners and real estate investors become their own source of financing. And if you want me to get into more on what the concept is.

– Please explain what those concepts are.

– Yeah. Definitely, yeah. So, with the Bank on Yourself strategy, what it is, it’s kind of a counterintuitive approach. It is the utilization or the use of cash value whole life insurance. So what that means is, I kind of back up a little bit for the audience who aren’t familiar with life insurance. What it means is this, there’s typically three types of life insurance. There is term life insurance, whole life and universal. So term has a set period of time. It’s usually either 10 years, 20 years or 30 years, it has a start date and an end date. And it’s typically life insurance only, there’s really no equity or cash value in it. And then whole life insurance is the opposite of it. It’s for your whole life. And there is equity, there is cash value that’s building up in it. And then universe is kind of in essence, a combination of term and whole life, but mostly infinite banking or bank on yourself involves whole life insurance. And the reason why is because of there’s cash value that builds up, it’s almost like a savings account inside of the whole life policy. And then that builds up and earns interest and dividends. And then you have the ability then to borrow against that, to become your own source of financing. So in essence, bank on yourself is using whole life insurance and using the cash value in it to grow safe and predictable wealth. So there’s a lot of other financial benefits I would say with using it. But one of those is the ability to become your own source of financing, because as you are building up the policy and you go to, for example, take out a loan against it, the only collateral you need is just the whole life policy itself and nothing else. And that means that credit doesn’t factor into it. Your credit score, your real estate collateral, your business collateral, nothing else matters except for the whole life policy. So this is very advantageous in a market. For example, when banks are reducing their lending or increasing the lending requirements, when you have this whole life policy properly structured in place and with enough cash value in it, you have the ability to leverage and borrow it without needing really permission to do so. The insurance company that you’re a part of gives you the right as a policy owner to take out up to 90% of the cash value via loan or withdrawal at any time you want. No questions asked, they just ask you how much you want and where you want it send to, which bank kinda you want send to, or do you want it to be a written cheque to you? So very liquid and very accessible. It provides a competitive advantage for business owners and real estate investors, especially in a time when banks are reducing or are making their loans more strict.

– So, Sarry, what I’m understanding then is what you offer is a financing mechanism through insurance. Am I understanding that correctly?

– Yeah, correct.

– So tell me, how does it work and how does it work in terms if you talk about building profit plus banking on yourself? What does that mean? And what is it that you are creating with that?

– Yeah, yeah, definitely. I would kinda start off by taking a step back. And usually when business owners and real estate investors finance things, they either do it through third-party lenders, like through lines of credit or sometimes credit cards or other forms of financing through third-party lenders. Or sometimes they might do it just out of cash if they have the cash. And this is kind of to add a third layer, it’s where they borrow from themselves to become their own source of financing. And then to do this, you would first have to work with an advisor who knows what we’re talking about, who knows how to use whole life insurance for self banking purposes. It’s important to note that whole life insurance is not an investment. It’s not a good investment, at least, because it’s not an investment, it’s a saving strategy. It’s a way to change the way that you save your money and then change the way that you borrow your money. It’s kind of important to put that out there. And then also you wanna make sure that you’re working with an advisor who knows this stuff. They’re usually called bank on yourself professionals, which we are, we’re a bank on yourself professional organization, part of the bank on yourself group, or sometimes there’s the infinite banking concept of professionals, IVC professionals. You wanna make sure that they know what we’re referring to here, not just simply selling whole life insurance, because if you do that, if you just buy any whole life insurance policy from any company, it could result in a few problems, like number one, like very slow to minimal cash value growth, which could be problematic especially if you’re tying up a lot of dollars to fund the policy. There could also be tax problems. One of the advantages of using infinite banking is there’s a lot of tax advantages like tax deferred growth, tax-free withdrawals, tax free loans, income tax, free death benefit. But if it’s improperly structured, it could result in a tax burden on the policy owner. So you wanna make sure it’s properly structured. And then another thing too is you wanna make sure it’s properly funded for the right person at the right time and the way to do this, it’s kind of really hard to measure, there really is no one product for all. You need to do like a financial analysis. This is where the advisor goes through the assets, goes through income, goes through cashflow. What’s currently happening right now in the financial situation of the client and where they wanna go. So where do they wanna go in the next five years, 10 years, 20 years? All these questions make a difference. It’s like a diagnosis of where to go. And then from there, from that information, then we would build out a solution that would involve using one or maybe more than one insurance company, because each company has different products that are relevant to situations. Like for example, some products are like seven year. You’ll fund them over seven years. Other products, you would fund them over 30 years, some products you would fund them with a large amount upfront, and then you could do small payments every year. And then some products are more consistent. So we need to know, instead of kind of just finding clients for products, we need to find the right ones, the right funding amounts, and then that’ll actually fit their objective. So that means that if a client is saying that they’re more concerned about retirement, that’s gonna be a completely different conversation than somebody who wants to reach a change the way that they finance properties, it’s gonna be two different conversations, two different products, everything’s gonna be different. So it’s essential that the advisor knows the objective of the client, short-term and long-term, and what’s currently happening right now, what are some problems they’re facing and where they wanna go?

– Okay, so what you’re telling me is you work with a number of different insurance providers. You’re not limited to anyone. Is that correct?

– Yeah, correct. Yeah. And with that, it’s a broker insurance broker slash financial planner. I typically right now, we represent about four insurance companies that understand this concept and they’re kind of, they bought into the concept, they understand it. And this is a benefit to the client because we’re not tied down to one company if for example, we find that another company is more suitable for them. We have that option to reposition and then go with that other company. This is the opposite of an independent broker would be a captive agent. A captive agent and a captive agent agent usually works for one insurance company. They usually are only allowed to market that company. And they’re usually known by their company, their website, their business cards, everything is just that one company. And that’s all they can offer their clients. If it’s not a good fit, they would either have to turn the client down or refer them to a broker who can do more than one other company.

– Okay. So let’s talk about who would use this service. So part of what I’m hearing you say is that you could finance your real estate, if you’re buying a home or financing a business, you could use it this way. Is that correct?

– Yeah, absolutely. You could use it to pretty much finance anything you want. Another advantage of it is there are no restrictions on what you could use, the cash for. What you borrow, you never have to kind of, there’s no reason disclose what you’re gonna use the money for. So you could definitely use it any way you want. Who this would be a good fit for is pretty much anybody who relies on financing to grow their business, either through cash on their own or through third-party lending, because here’s the thing. So on average, for the average American, about one third of the money they make goes to service debt. So one third goes to service, credit cards, mortgages, home, auto loans, student debt, all types of loans. And it’s important to note that when it comes to compound interest, the amount of money we spent to lenders, it’s almost like we’re working for the lenders. Especially business owners and real estate investors, because the more they grow, like for example, if a business owner goes from having $100,000 in line of credit to $250,000 line of credit, let’s say that both of those situations were at 5% interest, they’ve just paid more interest to the lender, even though it’s the same rate, it’s the volume of interest that people have to consider. It’s that how many times are you using lenders? And how many times are you paying them interest? That’s more important than the actual interest rate. So many people are focused on low interest. They wanna be in a low interest environment. They negotiate for low interest rates. But it’s about the amount of times you’re using. And it’s almost like as business owners and real estate investors are growing, they’re almost like representatives of banks where they’re just making them more passive income without the banks essentially doing anything. THe banks are borrowing from other banks and loaning it out at higher interest rates to real estate investors and business owners. So I think that it’s important for real estate investors and business owners to be on the other side of that table, where they are borrowing from an insurance company in which they are mutual owners of and in which they get dividends from and in which they can grow their wealth without interrupting it, and then recoup that interest they would otherwise pay because it’s important to look, like, for example, to make like a projection of the next 30 years, how much you’re gonna finance, how much interest you’re gonna pay, and then compare that to, if you use a whole life insurance policy the properly structured way and see how much interest you can recoup back in your pocket by constantly, by going to yourself for financing and then recouping that interest back into your pocket.

– Got it. So is there anybody for whom this would not be appropriate?

– Yeah, I think this would be difficult for somebody who is way more concerned on like very short term return. Somebody, for example, who’s stuck on returns. This would not be a good fit. For somebody who’s constantly looking for that eight to 10 to 12% return every year, I don’t think that’s possible by the way, but I think that somebody who’s commonly short-term aggressive high returns would not like to do infinite banking or bank on yourself. And just to be clear, bank on yourself, it’s not meant to replace investment. So it’s not an either or situation. It’s not either I do, this whole life policy thing or I go invest in cryptocurrency or other investments. You could do both. You could fund the whole life policy and then borrow against it and then invest wherever you want at that point. But some people who are constantly stuck on returns, if that’s the investment number one metric they look at, this would not be a good fit for them because to put it out there, infinite banking has very conservative returns, we’re talking 3%, 4%. So you could use that money in there to invest someone that’s eight to 10%, but somebody who’s stuck out only on at three or 4%. And I’ve seen this a lot with clients. We explain everything and they’re just like, yeah, but it’s only 3%. I’d rather, eight to 10% somewhere else. And I think you could still do that, but I guess it wouldn’t be a good fit to answer your question for somebody who’s consistently stuck on rates of return.

– So insurance is always an interesting thing. You’re looking at something that’s for protection and for when you need it. But there’s always the issue of how much is too much, when you’re looking at this from a lending perspective, are there any formulas or things that you should look at in terms of how much life insurance you should, whole life insurance you have so you could really use it wisely? Because really, if you do this smartly, one should not have to take out loans.

– Yeah. Good question. And as an insurance broker, I’ve offered clients every type of insurance from auto homeowners, term-life, commercial insurance, every type of insurance there is. And the situation is with every single type of insurance, there has to be a balance between having the right amount of insurance, having little would be under-insured, which is a problem. And then having too much would be over-insured, which is also a problem because a lot of insurance companies when it comes time to pay a claim, they tend to pay based on that situation, not based on how much the client has paid into it. So it’s important that your insured at the right amount. And I think that these general insurance rules apply to all types of insurance out there except for infinite banking. And the reason why infinite banking doesn’t apply to other types of insurance is because we’re not using it simply as an insurance policy. We’re not using it as an if then state, like an if then situation. Like if I get into an accident or if my home burns down, then I’ll use it. Infinite banking is more of, I am gonna use it. And it’s a matter of time until I could start leverage with the cash value. And then with that kind of mindset that clients have, almost every 99% of situations with clients, once they understand the concept and then once we understand their financial situation, and then we put those together and then we come up with a solution, 99% of the times, clients are asking, what is the most money I could add into these policies? Because the growth of it is tax deferred. It’s guaranteed liquidity. You’re guaranteed to be able to borrow 90% of the cash value at whatever rate that is. It’s guaranteed to grow. Insurance companies are not tied to the stock market or other volatile markets. So, the growth of it is guaranteed to be there. The insurance companies, we used to have a proven track record of paying dividends for over 100 years. The funds in the policy are usually in most states protected from creditors and outside legal risks. Check with your attorney about that, but in most situations, it’s protected from outside risks. Number six, there’s a guaranteed death benefit that’s guaranteed to grow its income tax free. So when clients look at, and then we could of course leverage it for other investments. So when clients look at all these other things, they’re like, it would only make sense to have my money sit here than it does to sit in a bank account. Because again, with all the other types of insurance out there, clients are thinking about their bank account, and they’re thinking about that commodity. The commodity and how much they could limit to spending towards a commodity and how much they can keep in the bank. With infinite banking, it changes. They replace their savings account and checking, usually their savings account and their wealth with infinite banking. So now they’re thinking about what’s the maximum amount of money I can have sit in my whole life policy and then budget everywhere else?

– Got it. So if a person is thinking about this, what they should do is find a broker who does infinite banking have their various policies reviewed. Am I hearing you correctly? And then look at it, does the strategy they have in place meet the financial needs that they have that have been set up for their life? Is that correct? Am I understanding you correctly?

– Yeah, definitely. Exactly.

– So Sarry, if somebody wants to get started, let’s say somebody already has a life policy, maybe several life policies in place. Where do they begin in looking at what to do?

– Yeah, so if they have several life policies already in place, they could reach out to us to take a free look at it. They could reach out to another advisor who knows infinite banking. And what you wanna do is you wanna get a look at the policy documents that show the name of the insurance company. They show if you have cash value, how much the cash surrender value is, the types of policies, whether they’re whole life term or university, you wanna get these things in order and then have an advisor look at them. And I would have an advisor who’s familiar with this stuff. Who’s familiar with whole life insurance, mainly for cash value build up or self-baking purposes. And I would even, and here’s the thing too, is that there’s a lot of insurance agents out there who will say like, yeah, I’m an expert in self-baking, whole life insurance or infinite banking or bank on yourself or any of these things. When in reality, they’re not, they’re just insurance brokers that could learn about it. And the way that usually insurance brokers think is that they have the customer, the customer tells them what they need and they can go out and get that contract with an insurance company. They could just in the moment, figure it out and do it. And that’s typically the case with all the other types of insurance. They’re really not that complicated. The paperwork to get contracted with different insurance companies usually takes about two or three business days. So, usually, brokers are usually looking for any opportunity they can get. So when you come across them with whole life insurance, they’ll say, yeah, I can go do the research and get back to you on that. But the problem with that is that this is a whole separate topic aside from all the other different types of insurance. And it’s really important for the client to know that this is not something that somebody could just kinda figure out in a few days and then help you out with it and just start funding the policy. It’s something that you wanna make sure that the advisor does full-time and the way to do that is simply asking them. Which products do you do full time? What specialty do you have? And then I would even give them like a pop quiz, like, hey, explain to me paid-up additions rider. The paid-up additions rider is a part of the policy that increases the cash value. Explain to me non-direct recognition. That means non-direct recognition means that the policy keeps growing, even when you borrowed the money. So you wanna ask them these questions to see if they actually know what they’re talking about. They’re not gonna just go and find any whole life insurance company, get a contract with them. And then just come back to you with an illustration and say, all right, this is what happens. If you fund it over the next 30 years, you put in $10,000. It’s not that simple. You need an advisor who knows what they’re talking about and who does this. I would only deal with an advisor who does this specific thing full time and nothing else.

– Got it. So tell me something also relative to this. In a downturn economy, if we have one, how is this impacted?

– Yeah. So at a downturn economy, definitely. So I think the benefit to infinite banking is whether you’re in an upward economy or downward market. And it helps you whether the market’s up or down, because usually when the market goes down, your cash value and the death benefit and the policy are not affected by market conditions. They don’t go down when the market goes down. And then of course, when the market is high, it’s not like your policy can go up high too. So it’s conservative. And it’s guaranteed to grow over time. Now here’s the thing though. Let’s say, for example, the stock market is high and your account values are increased whether they’re in mutual funds or 401ks or IRAs. But then of course, just like everybody else, just like all the other cycles we’ve seen, usually every 10 or 15 years, the market takes a hit, and then it goes down. You won’t have to worry about that problem with whole life insurance. So I think that definitely a way to plan for a guaranteed retirement, a way to guarantee that your wealth will be there in retirement safety of principle. I think infinite banking is a really good way to do that. Another thing to consider too is inflation. So the cool thing about infinite banking is usually when inflation goes up and the value of the dollar obviously goes down, things get more expensive. That’s what technically inflation is. So, when things get more expensive, the cost of things go up. And then when that happens, the dividend rates on insurance companies also go up and because you’re a mutual owner of insurance company, or these insurance companies, you’re also like a mutual owner. So you get those dividends back. And then as they’re insured, as everything goes up, the cost of insurance, the cost of real estate, the cost of everything goes up in the country because of inflation, so do the dividends. So it’s a really good way to have a hedge against inflation because you’re on that side that is gonna increase in dividends. And really, I think that in any type of market, whether up or down, this will help you grow more wealth. And of course, back to the whole need to become your own source of financing, for you to always have the ability to borrow against yourself and have the ability to always grow wealth, even when you’ve borrowed that money. So there’s really no interruption in the growth of your money over time.

– Got it. So what have we not talked about that we should have talked about, Sarry, that the audience ought to know?

– Let’s see, we’ve talked about taxes. We’ve talked about how the funds grow even when you borrow them. We talked about the income tax with death benefits. And another thing too is, so look, just to kinda put it out there when it comes to whole life insurance, a lot of people usually think of like Dave Ramsey or Suze Orman. And of course, they have done a lot of wonderful things for helping people with financial things, but when it comes to whole life insurance, they’re kind of, they’re wrong when it comes to whole life insurance, I’ll explain why, because they always position it as an investment. Like instead of using whole life insurance, go to the stock market where you can earn 12% or whatever the case might be, and it’s not an investment to savings strategy. And then you could use it for the stock market. If you want to, you could borrow against it, buy stocks with it, if you want to. Another thing too to consider is that, I don’t know anybody who has made 12% in the stock market, consistently made 12% in stock market. So just these small things to consider. The media definitely has like a negative taste when it comes to whole life insurance. They prefer, I think the country and wall street and banks prefer that people invest in mutual funds, 401ks, IRAs. It’s got more taxes for the government in the long run. So they prefer to have the money sit there. That way, when tax rates go up in the future, which I definitely think they will in the future, there’s the low hanging fruit for the government. So the government prefers the 401ks, mutual funds, IRAs and qualified accountants to stocks, bonds, rather than whole life insurance. So they’re gonna publish, the media is gonna have more of a push towards the stocks and bonds rather than whole life insurance. But it’s important to remember that you can do both. It’s also important that you never wanna just follow market. You never wanna follow the trends in the news or things that are like advisors come on TV talking about. It doesn’t necessarily mean that it’s for your best interest. You wanna think like a bank and think about like, not just a consumer following patterns, but rather, you’re thinking like a banker, you’re thinking like an entrepreneur. And usually entrepreneurs, and correct me if I’m wrong, usually entrepreneurs think outside the box, they usually think differently from other people. So that’s just kind of important. And ironically, the name of our show is actually called “Thinking Like a Bank”. So if you wanna check that out, the name of our podcast is called “Thinking Like a Bank”.

– Very good. You know what? Part of what you’re saying is take a look at your whole life insurance as being a saving strategy rather than necessarily an investment strategy. A lot of times there’s confusion as to what its role really is. So Sarry, our time is up, and it’s been wonderful to have you on Building My Legacy podcast today. And thank you for your wonderful information about how to use whole life for your advantage, so that you can grow your business, you can pay yourself essentially for borrowing money. So thanks so much for being with us. And for those of you who are listening to us today, remember to visit our website at wwbuild2morrow.com, with the number two and our social media sites as well. And we will have information about Sarry in the show notes. So if you would like to contact him, you will be able to do so. And should you have any trouble contacting him, please let us know. Thanks so much for being with us.

– Thank you. Thank you for having me on.