Infinite Banking and Real Estate with Chris Miles

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Podcast Transcription

Dave Dubeau [00:00:09] And everyone, this is Dave Dubeau with another episode of the property Profits Real Estate podcast today zooming in with us. I’m very excited because this is Chris Miles. He is the anti-financial planner. Who happens to be a financial planner who helps people really effectively create cash flow in their lives? So Chris is a very accomplished investor himself. And he achieved financial freedom at a very young age. I believe it was twenty eight, if I’m not mistaken there, Chris. By not following what he was taught, we’re supposed to do in Financial Planner School. And I could get to speak to this from experience because I got a little certificate sitting up on my wall. Canadian securities course because I was looking at becoming a financial planner. Way back in the day, Chris, my big brother Dan was in the business for twenty three years and the dirty little secret in that business is that the vast majority of financial planners barely have two nickels to rub together themselves. They’re here telling everybody else how they should be investing their money. So how did this epiphany come to you? Because I know you were heavily involved in traditional financial planning for a number of years? What was kind of like that breaking point for you where you just said, Hey, this doesn’t make any sense?

Chris Miles [00:01:40] Yeah. Well, to clarify, I’m actually not a financial planner. You know, I quit being financial. The traditional financial advisor 2006, right? I did that for four years and then now I do more consulting work. How many people plan to create game plans in the alternate, you know, alternative investment space and things like that? But back then, you know, after about three to four years, I started to get some doubts, right? Because I like evidence. I like to know that things really work, you know, and you kind of pointed out some of those things that your brother figured out to, right,

Dave Dubeau [00:02:09] which is, you know, he didn’t figure it out. And for years, he was in there for like twenty three years he went through. He went through three cycles before he finally saw the light. So, so you figure it out a lot faster.

Chris Miles [00:02:21] Yeah, I consider myself the quickest learner, but I’m not bad, right? But you know, the thing is, I was listening to because there’s people, I respected people that were, you know, business owners that were making multimillion dollars. They would kind of point out and say, Wait, this doesn’t really make sense. Why would I invest in your fund maybe making 10, 12 percent a year, but I can make more than that my own business. So why would I invest in this place, right? Like what? You should be diversified. You should buy your eggs. One basket, which basically just means I’m a salesman, a suit. I don’t get paid for you investing in your business. Right? And then I remember at the tipping point happened, I realized that mutual funds weren’t the best either. I started to see some weaknesses. So I actually dropped my securities license in 2005 when I became a stock coach. Actually, top people had trade stocks and options, OK? But even in that world, I realized that even the best traders in the stock market, despite what they might sell you right, not tell you, but they’ll sell you on it. The best stock traders maybe make 20. Twenty five percent a year. That’s it. You know, it’s not hundreds of percent a year, because if you do the math hundreds of percent a year, it makes somebody richer than Jeff Bezos pretty quickly. So that’s bull crap, you know? So anyways, so right at the end of 2005, I had a friend who left the industry to go do real estate investing himself. So he partnered up with his dad and he said, Chris, like, things are awesome. You know, he was telling me this in a phone call right before the new year. It’s like things are amazing. My dad and I like we’ve actually doubled his income as a professor at a local university. And I said, you just left four months ago. That’s too good to be true, right? Because my little financial advisor trapped brain was thinking like, There’s no way. That’s impossible. There’s no I know how much money he makes because he was a potential client until he decided to buy real estate, which made me mad. So, you know, and so we got this debate about what’s better stocks or real estate. And so he finally stopped me, said Chris. How many of your clients are financially free where they don’t worry about money, not just retired, but they don’t worry about money? And I thought about the retired ones. I thought, Well, they’re watching the local news, you know, local news or CNN or something like that. Well, they’re pretty much, you know, they’re freaking out because they watch CNN and everybody freaks out about life. You know, your life is going to come to an end at that when you watch those kind of news channels. Yeah, for sure. So. So I was like none. None were financially free. If you if that’s your definition, you said, All right. Well, how about this? If anybody, has it figured out how many of you guys, as financial advisors are financially free, not off the commissions earning, but actually off the mutual funds you’ve been recommending? And I thought about it, I said, Well, none. Maybe this one guy in the offices and know some of these guys. It wasn’t in this guy. I found their guy later on wasn’t either, because once he lost, his job is scrambling for income. He was just, you know, all show. But I mean, there’s guys in our office that have been doing this since the late 70s, and they weren’t financially free either. They were still they still weren’t retiring and they’ll say, Oh, it’s because I’m passionate about what I do. No, it’s because you’re broke. It’s because, you know, you can’t in that model, right? You can’t save up enough money to really live on because you’re always have that fear of what if I run out of money because the returns are going to be high enough? Right? And that got me to look elsewhere. And so, you know, after we start fighting and I kind of, you know, I kind of agreed with them saying, Listen, you got me. Now what? He said, Well, go read this book. Who took my money by Rob Break you saki, which talks about why mutual funds think and then listen? This AM radio show pre podcast days, right? AM radio show where these local guys are talking about real estate investing and other stuff. And I started doing that, and a few months later, March of 06, I quit. I said, I can’t stay in integrity and be a financial adviser because I know it doesn’t work. The funny thing is, when I stopped one of their trainings for those previous few months, my business actually grew. So I left my business at a high versus a low right because I started telling people, Well, here’s the things I do feel comfortable with recommending, but all this other stuff is crap, right? And so I was doing that. But then I said, I’m done. I can’t do it anymore because I can’t live a lie, so I quit. I said I would be a mortgage broker because in 2006, everybody could become a mortgage broker. And then I’d do ballroom dancing because, you know, I used to be one of the nation’s top amateur ballroom dancers back in the day, and that was pretty much my plan until later this spring into the summer, when I realized I had to know what these guys know, I got to learn from them. And so I hired one of them as a mentor. And by later that summer, I found myself financially independent myself, you know, and doing the opposite, not investing in mutual funds, but doing other things, whether it be through business streams of income, whether it be through real estate or whatever. I was doing that and then I was like, Well, what am I going to be when I grow up? I’m 28 years old, almost twenty nine now. What? And that’s where I started coming out of retirement in 2007 to teach what I’m titan and the rest is kind of history.

Dave Dubeau [00:07:11] Awesome. So what we what we discussed before the show, Chris, that we thought might provide our followers the biggest bang for their buck is a whole concept of infinite banking with real estate. So what does what do that mean? What does it look like? How does it work?

Chris Miles [00:07:31] Yeah. You know, so it’s interesting because I learned about infinite banking after I started learning from these real estate investors, right? They were the ones that taught me about it. The thing is, they were doing crappy, infinite banking policies. So for those they don’t know, I mean, infinite banking involves using a whole life insurance policy that has a cash value, tax free savings component side of it versus just a normal term assurance policy, which only covers your death benefit, right? You have to die to get the money. Life insurance actually has life benefit to there’s a living benefit where you can actually build cash. Now what I didn’t understand, you know, before I remember I was a financial adviser telling people that whole life was a crappy product. You make one or two percent a year. Don’t give it to some level. I was right, but I was just spewing out information that I was taught by other financial advisers. I didn’t verify that myself. But what I’ve learned over the years is I start to reject some of the things that the other infinite bankers have talked about, right? Because I got one set up on me, it was as a piece of crap policy, right? With high fees, low return. You don’t want that.

Dave Dubeau [00:08:32] You want for the guy that sold it to you.

Chris Miles [00:08:34] Oh yeah. And actually, we had a two hour debate about it because I was life insurance license. Still, I kept that license throughout, and two years later, I found out that I asked him. I said, Can I over fund these where I can, you know, minimize the costs and maximize the returns, right? I can get more cash in there that grows faster and I can use that money. And he said no, and I found out later I could. And so we went back and forth about the debate. He was like, Well, you need the death benefit, Mike, whatever, you know. And finally, when we did apples-to-apples comparisons, I bet everything he brought up to brought us an objection. I said, Listen, my policy that I just created here beats all yours. And you can say this or that. But as a matter, I’m like, Why did you do this? Why did you give me this? And he finally was left with no answer. You just said because I couldn’t afford to cut back my commissions. And I said, that is why I’ll never Sandy referral again. Screw you. Basically, I’m doing my own thing. And so I started to really dig deeper into how to maximize the return on these things and see what most people do. Most these infant bankers will tell you it’s a supplemental retirement, right?

Dave Dubeau [00:09:37] Because you know, you can go just for a second, Chris, let’s assume. The viewer, the follower doesn’t know what whole life is. Yeah, he doesn’t know what this is. So let’s just start from the beginning.

Chris Miles [00:09:51] Do you think about death benefit with the savings component with it too, right? So it’s more expensive than the typical term insurance death benefit that you pay for because you’re adding more cash in there now. Over time, it’s still cheaper. The term insurers this term insurance is more expensive as you get older, your whole life actually gets has upfront cost, but then it gets cheaper as you get older. Right? So that’s the kind of thing that you have. So it’s got this combination of it’s almost like buy term and invest the difference, right? It’s kind of like that. But now this money is just sitting there is growing, you know, four or five percent type of returns, right? Maybe more than that. But lately it’s been low interest rate.

Dave Dubeau [00:10:26] Nothing super exciting.

Chris Miles [00:10:27] But no, it’s so not sexy. In fact, there’s no way you can financially retire with these things, even though insurance salesman will try to tell you, Oh, it’s a good supplemental retirement because they know it won’t get you there either. And the mutual funds that you already talked about that won’t get you there, either. So it’s got to be used with things like real estate. And so what I teach is, how do you get both? Because most people think either you put money in the insurance or you invest it. And of course, if you compare it to investing, you’ll win every single time, right? Because you’ll make more money there. Cash flow, it’s sexier. Everything’s better. What I’ve learned is that you can actually funnel the cash through there into that savings component, right? And then from there, take the money out and use it to invest

Dave Dubeau [00:11:12] so you can borrow from your insurance policy to invest in real

Chris Miles [00:11:16] estate. Yeah, you can access two ways either just withdraw it like you would a savings account or you borrow from the insurance company. They give you like this line of credit, but the line credit does have a monthly payment or anything. It’s totally, you know, it’s just they charge you interest. You just like five, six percent a year. But when you borrow it, understand that your money’s still all in there. So say you have two hundred thousand you’ve built up in there, you borrow one hundred thousand the two hundred thousand earning all the interest bill. So what’s happening is that the interest you’re being paid from them is more than the interest being charged when you borrow from it. So you get this lower house. Yeah, it’s like arbitrage is like what the bank does when they borrow your money from a savings account to go lend it out again. Right, right. They’re doing the same thing. But here, just from that mere transaction, you still earn more from what they pay you than what it costs you to borrow it. And then you invest in the real estate earning money there, so you end up making money in two places at the same time. Again, it’s a design, right where there’s lower costs, because then you could actually not make that difference, right? If you get the cost design just right that you actually double dip. And so I mean, everybody’s situation is different, but you know, my experience usually say you’re make ten percent a year on your real estate, right, to say, keep that number, even number and head. Well, if you use life insurance to use that to fund that real estate, you’ll add at least another two three four percent a year on top of your 10 percent return versus using a savings account. Use that the money’s gone. You are nothing on that money because once you pull it out, it’s gone. So it’s a way to actually make money in two places. At the same time, you kind of have your cake and eat it, too.

Dave Dubeau [00:12:48] Wow. That’s another fantastic idea. Hold on to that thought for a sec. We’ll be right back. Now, are you a real estate investor? Was ran out of cash or credit to grow your portfolio? Are you looking to grow your portfolio using other people’s money and raising capital? Well, I want to show you how to raise six figures or more in six weeks or less at my upcoming Investor Attraction workshop. You can get your ticket and find out all about it at Investor Attraction Workshop dot com. We’re going to spend a full day taking a deep dove into this road map that I’ve used to raise millions for my deals and help other people. Just like you cumulatively raise hundreds and hundreds of millions of dollars for their deals as well. So again, you can check that out at Investor Attraction Workshop dot com. And as a loyal listener to the podcast, you’ll get 50 percent off your ticket when you use the Discount Code podcast. That’s right, discount code podcast at Investor Attraction Workshop dot com. See you at the next workshop. Very cool. Very cool. So, Chris, I love the fact that you come from this background of financial planning. You’ve seen that side of things. You have leapt into the whole stock market thing because I know that super sexy for so many people and it seems so exciting. The newest version of that is all this crypto stuff that’s going on. And then you kind of stood back and you saw what actually works in this kind of reminds that of that book the millionaire next door, right in the vast majority of the millionaires in North America, you know, are self-made. They are not super flashy. They’re not driving around at flambeaux was a bikini clad babes hanging off their arms all over the place. They’re everyday folks that are exceptionally good and sharp with their money. They’re entrepreneurs, they’re real estate investors. They’re yeah, they’re very, very. Good at doing this kind of stuff, sir, I love the fact that you’ve gone from that you figured out you’ve seen exactly what does work. You put it into play yourself. Primarily through real estate investing versus other investments. So how do you work with people these days, Chris, what does that look like? Because you’re not, you’re the anti-financial, you’re born again financial planner. You’re no longer a financial planner or an antique financial planner. You still help people out with their finances and how to do it right. So what does that look like these days?

Chris Miles [00:15:14] Yeah. So now I work more as a consultant, right? So in addition to doing the life insurance, which is a separate thing, you know, and even for Canadians, I actually have Canadian contacts up there who do that kind of design too. So aside from that, I do consult, you know, so what I really do is we just we dig in and we look at all the numbers. We look at the monthly expenses and income and everything and figure out, is there cash that’s leaking out? We don’t know is leaking, right? Are there ways we can recapture more money to invest more of it? Can we get money locked unlocked at a prison? You know, I talk about, you know, there’s the retirement account prison, where a lot of times I get people that say, Hey, I’ve been saving this much into a retirement account when you want to retire. Forty five fifty. Well, guess what? That’s not going to work in those retirement accounts. You got to wait longer. So let’s not do that. Let’s do a different strategy here. You know, you have that kind of thing. No, are we trying to get cash flow? Most people I talked to, I mean, we’re usually trying to retire them within five to 10 years, and they may not quit working. They might love what they do, but it gives them the option to work because they want to, not because they have to.

Dave Dubeau [00:16:17] OK, well, let’s talk about that for a second, because I know that that sounds very appealing for a lot of people. Hey, be able to retire in five to 10 years, you know, especially if they’re in their thirties or forties. That sounds a hell of a lot better than waiting to 65 or 70. Yeah. But also, they might be thinking, well, God, if I if I’m going to try to do that, that means I’m going to have to be socking away 100 grand a year for the next five years to be able to do that. And there’s no way I can do that. So how are you able to help a regular person? Not, not a super wealthy person actually accomplish that goal in that time frame.

Chris Miles [00:16:56] Yeah, it really does depend on the situation, right? Well, here’s the here’s the reason is because even somebody saves up a million dollars in mutual funds or savings, wherever it might be right now. Even then, if you try to pull out money like I used to advise people to do as a financial advisor and people, there are some people still teaching the old four percent rule, which that doesn’t work anymore. Even when I was a financial adviser almost 20 years ago, we were questioning that rule if because people are living longer. Inflation was higher, you know, things like that.

Dave Dubeau [00:17:24] So remind us, what’s the four percent rule?

Chris Miles [00:17:26] Yeah. So the four percent rule is it says that whatever money you have, you should live on four percent a year and not run out of money. So if you have a million dollars, the four percent rule would say great, I can live on $40000 a year, right? Which is not a lot.

Dave Dubeau [00:17:39] Don’t feel like much of a millionaire.

Chris Miles [00:17:41] No, not even close. So obviously, if their goal was, you know, 100000 a year right, they would have to have two and a half million dollars saved up. And so they would make their little targets based on an average return to the market to say here’s where how you hit two and a half million. Of course you’re chasing inflation, so be higher by then, but

Dave Dubeau [00:17:56] not until you get this into account, especially up here in Canada,

Chris Miles [00:17:59] which, especially the fees. Oh, they’re horrible. So, you know, that drags. So you’re lucky to get six seven percent on your money, right? Well, yeah, maybe. Exactly. But instead, what we found is that really four percent was too aggressive because inflation is more than what the government claims. Right. And we know also that life situations happen. People live longer. So really, two or three percent should be. So instead of having a million dollars living on forty thousand a year, you should be living on about 20 to 30000. Oh, yeah, yeah, exactly. Yeah, that’s something you excited about, right? Yeah, that was another thing. They kind of depressed me as a financial advisor that last year is that I would have to alter the numbers to feel better, to give people hope because I would have to move inflation down to two percent. Just the, you know, show people hope. And these are people I’ve talked to in their 20s and 30s. I was like, If I make this two percent, you’re putting away three hundred five dollars a month, where now you have, you know, couple of million dollars or whatever by that point, which after inflation is less a lot less than a couple of million, right? So that was the stuff I was doing. So the point is that people really, in the most part, don’t have hope, even if they have a million dollars. Yeah, but that’s the million dollars like I know with real estate here in the United States. We go for at least a minimum of 10 percent a year. Right? I mean, usually we get double digit returns, sometimes quite a bit more. I mean, still good double digits like more than 10 percent, maybe 12, 15 percent. Yeah. But I mean, but still, I mean, it’s all about cash flow, right? Like, that’s the big key thing that mutual funds are missing because it’s always about how they not run out of money. But when you’re investing for cash flow, that’s the thing that blew my mind after equipping a financial adviser or by the time I quit, because then everything became hopeful because if I knew, I could make 10 percent a year. So you have a million dollars now I’m making one hundred thousand dollars a year. Not 20, 30, 40, if you’re lucky. And so it changed everything. So for even people are starting out like I was talking to a guy just the other day, he had probably about $70000 to invest. Not a lot. Right? I mean, not a ton to get going. But I said, still like your pack. In a way, he’s packing away about three thousand a month to 2500 to 3000 mothers, where he was able to start pumping in savings. I thought him so listen, you keep that up. You know, it won’t be long and expect monthly expenses were only about fifty thousand a year. So I was like, Man, you’ve kept your expenses low. You’re saving a lot for you. You can hit that number fast. I mean, really, it would not take a. I said, really, you need four hundred five hundred thousand dollars in an equity and or cash, you know, from deals that we do over this period of time that will get you there. And so if you save it, it might take you 10 years just saving. But if we start buying real estate along the way, and that gives the other things the tax benefits and, you know, even like appreciation potential plus the cash on cash returns, you probably do that within about seven years, if not less know which the guy is only 28 years old, now 27 years old. So imagine him being a 35 year old that’s financially independent. I mean, that’s incredible. And so that’s the kind of things that we do is try to figure out how to map out that that game plan to get him there, how to really strategize and then connect him with the people that have the deals, you know, so we don’t offer any investments ourselves. We stay completely more than their consulting role giving options but letting them decide based on what their goals are saying. Here you know, based on all these things you could be doing, here’s a few things that would fit for that objective you have. Now you decide of those which where you want to invest and then we just kind of provide guidance and education along the way.

Dave Dubeau [00:21:30] Awesome, Chris. Well, I’m glad that you come over to the light side for.

Chris Miles [00:21:35] For sure.

Dave Dubeau [00:21:38] And that that that you’ve had success and that you’re really showing people how it really works because you’ve got a very unique perspective on things. You know, you’ve been in that industry. You know what, we’re spoon fed from school, from the government, from everything that we’re supposed to do. You’d understand how it really doesn’t work for people and what actually does. So if folks want to find out more about you and perhaps even start working with you, what’s the best thing for them to do?

Chris Miles [00:22:06] Yeah, they can visit a website money ripples dot com that’s with an s on the end, R.I.P. Lipscomb. Or they can even follow my own podcast, The Christmas Money Show, which of course you’re a guest on, so they can do that as well on YouTube, iTunes, or wherever they use the Follow podcast Kartheiser.

Dave Dubeau [00:22:22] Chris, thanks so much. It’s been a lot of fun.

Chris Miles [00:22:24] Yeah, it’s been such a pleasure, Dave. Appreciate it.

Dave Dubeau [00:22:26] All right, everybody. Take care and see you on the next episode. Well, hey there. Thanks for tuning into the property Profits podcast if you like this episode. That’s great. Please go ahead and subscribe on iTunes. Give us a good review. That’d be awesome. I appreciate that. And if you’re looking to attract investors and raise capital for your deals, that may, I invite you to get a complimentary copy of my newest book Right Back There. There it is the money partner formula. You got a PDF version, an investor attraction book dot com again. Investor attraction, book dot com. Take care.

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