Guide to Being Your Own Bank with Curtis May | #BecomingYourOwnBanker

Curtis May is the creator and owner of Practical Wealth Advisors (PWA) and host of The Practical Wealth Show Podcast. By following the principles of wealth creation, Curtis teaches people that their number one financial asset is their knowledge. The more they know, the lower their risk, and the greater their chance of success over time.

Не feels strongly that financial products are simply tools. What makes the biggest difference in people's lives isn't the product; it's how they use it.

EPISODE NOTES:

[00:00-06:25] Don’t just save

[06:26-12:29] 5 Principles of Financial Success

[12:30-18:05] Cash Flow Strategy

[18:06-28:53] Be The Bank Strategy #1

[28:54-31:51] Be The Bank Strategy #2

[31:52-36:16] Systematize your Success

[36:17-38:43] Be a creative investor

[38:44-41:11] Investor Q&A

Special mentions: Rich Dad Poor Dad

Learn more about this strategy at practicalwealth.net

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Chapters

• 0:00 Don’t just save
• 6:26 5 Principles of Financial Success
• 12:30 Cash Flow Strategy
• 18:06 Be The Bank Strategy #1
• 28:54 Be The Bank Strategy #2
• 31:52 Systematize your Success
• 36:17 Be a creative investor
• 38:44 Investor Q&A

Transcript

Curtis: [00:00:00] Everyone has two businesses, should have two businesses, the ones that make them a living and the banking business, which makes everything you do more efficient. 'cause you are getting to recapture opportunity costs, you minimize your taxes, your credit protected. So there's a lot of benefits to that.

Access to capital. 

Axel: Welcome to the Ideal Investor Show. This is the podcast where we help you challenge your mindset and discover where you are. Let's go. Hello and welcome to another episode of The Ideal Investor Show, where, as you know, once a week we bring you a great guest who can help us explore new things, change our mindset, get into the right frame of mind, or introduce us to something new.

And I know for a fact today's guest, Curtis May could do all of that. But first, let's welcome Curtis to the show, Axel. Thanks for having me. Absolutely. And I know you have so much experience, so many things that we could do. So we kind of, uh, calibrate a little bit of what we're gonna talk about it today.

But before we dive into that, could you do me and mainly the audience a favor to tell [00:01:00] us a little bit how got Curtis to where he is today and what's kind of like the main thing you do on a day-to-day basis? 

Curtis: Got me to where I am today. So I'm actually, I'm, I'm told I'm one of the top people in my field, so my, my coach says, just step into your authority, stop being bashful about it.

Totally. And, um, you know, where our goal is to be the top, what I call holistic, really holistic, not just a bunch of stocks, you know, uh, planning firm in North America, really working geared towards real estate investors and entrepreneurs. Um, because I think typical advice is really bad for them. You know, the Dave Ramsey stuff played basketball in college.

The short answers I, I realized the NBA was not looking for five 11 shooting guards. And, um, I got my, uh, uh, insurance license and a couple years later, later than that, my investment license evangelical about by term and investor difference for about 15 years. And then I read a little purple book called Rich Dad Poor Dad.

And I was like, wait, what he's doing? What I'm talking about are different than I around in [00:02:00] that same three or four month period. I've read, I, I don't even know how I got it, but somebody sent me or bought, uh, becoming own banker, didn't understand it, and then it took me a minute to kind of work through that and just rewire my brain and I just, I worked really, what, what got me here is the fact that I work.

My dad used to always say to me, we were in a supermarket growing up, and he would say, look, your store's gotta be open. Which translation Get up. And go to work. You know, you gotta make stuff happen. There's no check waiting for you. So, uh, a lot of times, um, new investors, I was, I was talked to a guy that started a fund, but he, he had a job, so he was investing in wholesaling on the side.

But it's different when you have no net, like no, you know, you've gotta learn to be what I call a work creator. 'cause now you're living 100% in a performance economy. Uh, 'cause the hours for dollars economy, this performance economy. Fortunately I got, I learned that in my twenties and you know, my dad [00:03:00] told me, you're never making money.

Work for somebody else. But then I had to, what got me here is I realized what business access I was really in, which was the marketing business, right? I had to learn how to let people know I could serve them. I had to get out there. I had to attract my ideal client to me. And I think that rather than chasing people down.

You know, or convincing people, all that stuff. You know, if I tell people, if you love Dave Ramsey, don't call me because I, you know, you know, it's your money, not my money. And you, you know, people that find me, their goal is work optional income. And I try to teach them that to, to kind of lead their wealth.

And you need like, uh, they call it medicine care coordinator. So I help coordinate. I'm like the macromanage, if you look at this, this little, if you're watching this, this little. A tool behind, we call it personal financial snapshot. I can look at, I can get all the people's financial where stuff on one page and then we can break it down and introduce you to specialist.

Do you need a trust? You need this, you need that. You need a good tech [00:04:00] person, so to speak. No, 

Axel: that's great. Thank you for describing that, Curtis. Now just to, to kind of position this a little bit. When people reach a certain level or their businesses, like you said, you're doing individuals and businesses when they reach a certain level.

Then, I don't know if eligibility is really the right word, but in a sense they kind of qualify themselves to um, be ready for like a family office kind of support. Can you kind of position a little bit? Are you that Yeah, I 

Curtis: think I'm trying to bring that concept. 

Axel: Yeah. 

Curtis: To. You know, my average client makes between, I wanna say 150 to half million dollars.

Yeah. So a family office isn't gonna touch them, you know what I mean? You don't, you don't have that kind of capital, but you can operate like that where you're buying assets. We call 'em cashflow engines, right? Things that gen send you a check, right? You know, you're using leverage. You are building. Uh, what I call financial [00:05:00] freedom, which I know is what you teach people.

So we say financial freedom is a capacity, so it doesn't matter what you make is, are you, I don't care. I just got a phone with somebody. I was making 50,000 because I spoke at this school on insurance last week, more my, one of my clients, the principals, he asked me to come out, but she's pretty sharp and.

She saves $20,000 a year or whatever she's doing. It's a household thing. But what happens is it's like, all right, what are you a good steward of your resources? It doesn't really matter where you're at, what you're at. You know, your net worth is, you know, I'm like merril, whatever. Right? Whatever. Well, they don't wanna talk to you unless you have a quarter million dollars of investible assets, not assets, money that you can invest with them.

I was, good luck with that. I mean, that's, you know, you, you, they don't help you build wealth. They, they're what they call wealth managers, but you build it. Through your knowledge, your assets, your experience, and so you, it's really be, do, have, right? So, uh, we're the four asset classes business, real estate, paper, and commodities.

And when you look at people build wealth, [00:06:00] they build businesses and they buy real estate or they're high paid W2 people and they use that cash flow to buy or build cash flowing assets. 

Axel: Actually, I mean, people know me when, and maybe when we get together again. Um, I use the term Henry, you know, I don't know if I'd mentioned that to you.

Like, oh, 

Curtis: high, high income, not yet rich. 

Axel: High earning. Yeah. Iron hiring. One thing that I know, um, and you actually showed it in the background there for those, uh, watching this as a video, uh, is based on five principle. Let's talk about that a little bit. What are those five principles? Why are they so important?

Curtis: So you wanna. Because what people do is they're chasing performance. They're chasing product, they're chasing rates of return. But Ray Dalio says, all successful people operate by principles. Right? So success, these clues, so they're not my principles, but if you look at successful people, you'll see them.

Right? And so the principle number [00:07:00] one, so I'll just give 'em real quick and we can go deeper if, if you want, but they're pre-step before this. So let, let me, I'll, let me give them, I'll tell you the pre-step. So principle number one is save. Right. Save what, 15 to 20% or more of your gross income. See, most people think they should pay themselves first, and that means invest in fund.

Their 401k investing is literally number five. Okay, save. Let me define savings. Save liquid accessible guarantee. So you got to pay yourself first. And savings automatic and systematic. So if you're making 200 grand a year. You should be, Curtis would want you saving $30,000, right? And so if you don't have like three, six months of that, don't even talk to me about a mutual fund or whatever, right?

'cause you need to call a fortress of solitude because everything is not always going up, right? And you got, you have that plan that works no matter what, which is why we teach principles. Principle number two is maximum protection. [00:08:00] Okay? Think Game of Thrones. Anytime you see like a medieval war, there's a moat around your castle.

Right to protect yourself. Right? So you gotta protect your stuff. Like I'll work with actual real estate investors and they'll have, oh, I got four LLCs. Okay. Do you have a umbrella policy? What's that? You know, uh, I had a guy that has eight properties, $2 million worth of assets. We took him through this model on his car insurance, Boly injury 1530.

Of liability covers. That means you understand if you hit somebody and they were outta work a year and it was your fault, boom. I don't care what lcs you got, all the assets are in play, right? So by looking at the model, I always helped him to. What is the maximum coverage? 2 5500 damaged, uninsured, uninsured mode.

So we just take people all the way through that process, making sure that you're bulletproof so that you can protect what you built. See you, I call, I'm the defensive coordinator, right? So I'm trying [00:09:00] to make sure that you Right, right. 

Axel: Yeah. That you 

Curtis: don't lose. Right. For the third one is full replacement of assets at death guaranteed.

So lemme go back to two. Two is proper life insurance, wills, trusts, entities, all that is under protection, right? Yeah. We call that 

Axel: basically the estate. And then how do you protect it, you know? 

Curtis: Yeah. How, yeah. And so that's my principle two, all that stuff. 

Axel: Yeah. 

Curtis: Um, principle three is I want full assets at death guaranteed.

So that's why we build our foundation on whole life insurance. Because I, I'm not a big fan of universal life 'cause there's nothing in it guaranteed. So I wanna make sure what we do is going to be there guaranteed. See, I like certainty and guarantees. So everything I do is built on certainty. 'cause that's where principles are.

The fourth principle is liquidity. See people, so they wanna get property roll into the next property and, and they give, well I got a line of credit. Yes, but that could dry up. You need cash. Cash. Money you could access [00:10:00] that you could control, right? And so our goal is six to 12 months or more. So your, your first three months is your emergency fund, but really everything above that is your opportunity fund.

So when you have capital, I heard, say, uh, Nelson Nash should say, um. He who has the goal, make the rules. So if you have money, opportunities will find you. You don't even have to go looking. So we try to get our people liquid, financially literate so they can tell, tell the difference between the asset and liability.

And then all I want you to do is when you see something you like, you have the capacity to do it wherever you see. And then the fifth principle, which really dovetail in what you're talking about, I like, you know, is we, we call it the. Velocity method over the accumulation theory, right? And so most people accumulation is buy and hold dollar cost average.

Got debt by term investor difference. Um, where is, if you look at, if you took a corporate finance course, they don't teach any of that stuff. It's, it's velocity is velocity of money with some [00:11:00] real estate. That's the bur method that's using leverage. It's cash flow. Because, you know, people focus on the net worth, but that's a, what I call a lag indicator.

'cause you can't eat equity. Right. So you're, well that, and I 

Axel: mean it's only after you have already accumulated it, is it basically added together to say, are you like accredited for example, or stuff like that. Yeah, yeah. 

Curtis: But it doesn't, you can't eat it. Yeah, right. You can't eat equity. Right. And so what if you, I don't know if the chart's probably small, but we tracked.

Uh, we do last assets, liabilities, business liquidity, personal liquidity, uh, but I track cash flow from assets. I track your business income, that the numbers we pull off a, a person's p and l. So I want your net profit, right? Because that's what we wanna grow every year. So we, we review this every, I have a program where I meet with people quarterly and we, we, we really go over to cash flow.

But every year we wanna review this so you. Like Dan Sullivan says, you, you gotta measure backwards, right? So from, [00:12:00] so I want, if you had, uh, $6,000 a year passive income and Oh, Curtis, I want $20,000 a year, but if you, but this time, let's start a meeting this time next year. And it was up to seven. Okay.

That's amazing. Because you're, be, you're, you've, if you measure backwards, you've grown. 'cause you know there's a book, uh, a gap in the game. We stay in the gap because we're always chasing the ideal to hit horizon. So. We're always beating ourselves up 'cause we didn't hit our, our number. Right. So you gotta give yourself a little bit.

Yeah. And 

Axel: those numbers are oftentimes quite ambitious, but what I wanted to just make sure that the audience is aware of that when, when Curtis speaks about the business income, there's obviously two, two different ways to look at it. The one is. When you look at your investing as a business, which I also a big fan of, and basically mentor everybody who comes to us and becomes a client, that's kind of like number 1.5 after talking and getting to know each other, uh, precise the investing.

But then the other thing I want to point, uh, out in and just [00:13:00] to people that listen, watch us. Have that separation when you, when I, and I'm sure it's the same as you working with a business owner, right? So they have their business p and l as well, and their business income and stuff. And most business owners I know, want to grow that too, partially so they can make more investments, but also to grow the business, um, get new people and, you know, produce more product, find new clients.

So there's kind of in, in a case where we, as you and I are. Serving a business owner, they have basically their investing business and their, their other business versus somebody who has a W2 job and then they make the business for investing. Yeah. 

Curtis: Well, and here's the thing, one of the things I, I found is missing also is that your financial plan precedes the business plan, right?

The business is the, in our financial plan, meaning what do you want and why? Yeah. Yeah. Right, right. So the step before the five steps I added on was, spend less than you make. So I teach something called cashflow mapping. The close I saw our own software that we [00:14:00] use. But if y'all have ever read Profit First, it's similar to that.

You know, where you gotta learn how to, you know, if you leave all your money in your business, 'cause you call yourself bootstrapping the business, well eat up all the money you leave there, right? So you have to pay yourself, you have to take profit, you have to. So most wealth is lost by how people manage cash flow.

So I'm really big into helping people create. A, a constructed one, separate church and state. Right? So business accounts. Personal accounts. What I like to do is help people figure out, well, what are your life costs? 

Axel: Right, right, 

Curtis: right. What do you need to, for your kids to go to school where you want 'em to go, to drive if you wanna drive?

All that stuff. And then, because you've gotta tell your business. What it it needs to do for you so you can live your life? See, the business is there to serve you. That's the engine that drives a car. So if you need seven grand a month for your lifestyle and you're only grossing $10,000 a month, well that's a problem.[00:15:00]

Right, but that's your business. Talking to you saying, okay, I need to make more money. I need to, you know, or, or, I can't be full-time in real estate. I need to keep my operating business, or I need to keep my job because I gotta build, let these assets grow so that I can replace my income. And so it's, it's a good measure, the two of them together.

So I probably spend half of my time, I meet people just trying to calibrate their cash flow and then we flow 'em through the model so that we can track. But the game is won and lost at cash flow control. 

Axel: Now when you're speaking about cash flow control from the reserves perspective, are you limiting that?

Are you saying, okay, out of the cash flow, when I'm talking about investment cash flow, you should have X amount, um, liquid available basically for any kind of re uh, repay as, to me, 

Curtis: it's, it depends on the person, how volatile their business is. 

Axel: Yeah. Okay. That's an interesting thing. The way we do it, just for the audience as a reminder, is we're basically looking at.

The number of properties that we are trying to [00:16:00] basically maintain, and I don't mean like in, you know, traditional maintenance, but we have them, they are in investment properties. So from that perspective to say, okay, the way I do it is to say, what is the most expensive thing that might have to be replaced, right?

So let's just say the most expensive thing were a roof. And so then, now obviously you wouldn't want to say, okay, will all, in my case, I have nine properties. Would nine house, uh, roofs fly away or be rotten through all at the same time? No, probably not. But if there's, for example, a cluster of properties like what we have.

There's a storm going through, it's possible that two or three might get damaged. Now, you can always argue about insurance and blah, blah, but for me, I'm just looking at it to say, okay, so risk or probability is, let's say 30%. Right? Wouldn't 

Curtis: depend solely on that. 

Axel: Yeah. Yeah, right. But so if you say, okay, it's 10,000 rules, probability is 30%.

I have 10 properties, so I need to have enough money for three roofs, which then also means in return is [00:17:00] since that's the most important, uh, most expensive thing that can break, I should be fine for everything else. Because ultimately the reason that we are looking at it that way, and I'm curious to hear what you say about that is.

There aren't very many good ways to have a lot of liquidity, basically with a day's notice. And if you have it, then it typically doesn't perform very well. So it's a balancing act and that's, you know, if you say, okay, well I want to have a year's worth for 10 properties, that's a lot of money. Getting like, what, 3% return?

Or something like that. So there's a little bit of a balancing act to say how much do you think about 

Curtis: how much Buffet has. Cash and liquidity. It's not cash. Cash like sitting in a checking account. But so how I do that, so that brings me into, so principle one, save, right? Because you have to, so I equate savings with capitalization.

So you want to capitalize. So that you have money available to invest. And so if you capitalize the [00:18:00] preference, 'cause you're chasing returns, you gotta let go of the chasing returns. What you want is control of a pool of capital. So that brings me into the strategy, which is we teach be the bank, right? So where we store cash, not to get into, I'm not gonna go deep into a product, but properly structured dividend paying whole life with a mutual company is.

Where we store past having like a couple months in the bank operating income, right? Right. Capital. We store it in policy. So now my clients, if they had a roof, you know I got people with 200,000 in cash value, right? So now what happens is you should keep a day's notice in the bank, what I call at TM money.

You have that situation, you, you don't need money tomorrow 'cause it's not gonna happen that fast. But you can get to the insurance money and. Three days, four days. 

Axel: Yeah. I always say a week. Yeah. We 

Curtis: just be safe. I'm, and so, 'cause they'll tell you when you call 'em three to five days, but you can get it. All they're gonna ask you is how much you want, which is predicate about how much you put in.

That's what you have to capitalize. Right. [00:19:00] And then. You want to check, you want us to wire it to your account, so it's no like, uh, let me see your social, let me, you know, what's the purpose of the money? How's your credit score? None of that stuff. This is what it means. You want to begin to, if you've got cashflow, what you want to do is begin to eliminate your dependence on third party capital, right?

But Rome wasn't built in a day, so you gotta put away some money. But what we teach is the, the, the banking system. Process becomes the platform for where you hold your capital. And then what do you need capital for major. We call it two. Two things that you, so my, the framework we teach is earn money, bank it, borrow it, spend it, repay it, okay?

And repeat, right? So earn it, bank it. That means save it somewhere. Let you be the bank. Spend it collateralize your savings. Borrow it. Collateralize your saving spend it. What do you spend it on primarily? Right. Major [00:20:00] capital purchases, meaning anything you can't paying for in full within your cashflow.

Like a roof, like a turnover, like a down payment or, or I got people that can buy the whole house with their policies. They've been doing it with me four or five years and make good money and they're, they're aggressive savers. Uh, and then repay it. So, you know, if you were to, this is where you can now.

Because Nelson was saying you, you, everyone has two business, should have two business. The ones that make them a living and the banking business, which makes everything you do more efficient. 'cause you are getting to recapture opportunity costs, you minimize your taxes. Is there credit protected? So there's a lot of benefits to that.

The magic question is where do you store your cash? You store it. So I'm not looking for rates of return from storage. I want access to capital because I'm going to make money. With what I do with the money, I don't need the thing, the product, there's no product that in of itself is gonna take you to glorious.

I says people are chasing returns, looking [00:21:00] for a rate of return, but what you want is cash flow and what you're trying to build, I believe financial freedom, which is. Capacity, right? You have assets that generate cashflow over and above your expenses. 

Axel: Let's just, uh, before we go a little bit further in, into the question, just from a principal perspective, so somebody says, okay, this kind of resonates with me.

I don't know, either comes to you or can theoretically go to other insurance agents, say, okay, I want to have a whole life insurance policy. No, they can't. 

Curtis: No, but go ahead. No, I'm kidding. Go. 

Axel: Well, for let, let's say there were other people than Curtis May, that do whole life insurance. Um, get a policy in, basically put money into the policy.

Now, basically the policy has, um, like we said, guaranteed. Um, survivor. Survivor. Mm-hmm. That's benefit cash value, yeah, exactly. Whatever that thing is called. So, but what it also means [00:22:00] is. If you wanna take money out without taking it out of the policy, it's basically not just guaranteed to you, it's also guaranteed to any lender.

Right. In that sense. So if I say, okay, I don't want to take the money really out of the policy, I want to just borrow against it. I can go to any lender and they would do, oh yeah, you 

Curtis: can use your you. It's called a collateral as. 

Axel: Yeah, yeah, exactly right. 

Curtis: So you can go to the bank, say, listen, you could, if you don't want to use it.

Let's say there's some companies that people I know have problems with companies that charge seven 8% interest, right? And before, recently you could go, that's high, you know, especially like three years ago. And so you could go and let's say at a hundred thousand dollars or $50,000 in cash value, you could go, there's certain banks or any bank will do it, and you could just assign the policy as collateral.

They'll give you three, 4% loan. 

Axel: Exactly, 

Curtis: just take it out. The policy? 

Axel: Yeah. Well, they don't even take it out. They leave it in the policy. I mean, there's obviously different ways to do it, but with that, what you just described, the [00:23:00] big advantage is that the full amount stays, whatever it is, stays in the policy and their life insurance company is still using it to invest in.

Well, but see, 

Curtis: you don't even have to do that to do that because when you take a policy loan, it is a collateralized loan. So if you had a hundred thousand and you took a policy loan for 50. They're still paying interest on the entire a hundred thousand, right? Well, it's 

Axel: just a matter of you take the loan from the life insurer or do take the loan or 

Curtis: somewhere else.

See? So what happens is you wanna be in the control position sometimes. See, 'cause what you wanna be able to do is you, I what I teach people, you want to be able to borrow out of opportunity, not out of necessity, right? Meaning you have the money and you, what's the best way to get the money? And then the policy become your security or.

Maybe you just want privacy, speed, and unstructured payments because of policy, because yours company won't give you any payments. So if you don't want to have to start a immediate payment right away, then you could use the insurance [00:24:00] company money and it's, it gives you just, it is all about control. And then the other part is when you make payments, so let's say the policy, you get money from a policy at 4%, the rates on the policy.

So what you would do though, we call it being an honest banker. You would create an amortization back to the policy. But I help our clients create that at like 7% or 9%. So now you're recovering, gotta understand the, what I call the financial physics. So you have to treat your money just like the hard money lender or whoever.

And so if you had a bank. You should be your own best customer, right? So, and charge yourself seven or 8%. You're just, you know, get taking the profits you were giving to somebody you're willing to give to somebody else. Now you get to have your cake eat too. You get growing money, you got the asset you bought, and then you have your money in a safe for.

Credit protected location. 

Axel: Exactly. So I think we, we got that pretty well 

Curtis: established. One thing, well lemme make this point, you can't just call somebody that you know in, this is not a self plug, I'm just saying it's a specialty, right? [00:25:00] So I properly structured dividend paying whole life insurers with a mutual company.

So that narrows the feel from about 1500 to fif 12 companies, right? And about four, 5,000 people, I'm being generous that actually know how to do it. So it's not just, oh, so and so works at such and such. Can you get me a whole lot? Because a lot of times I'm cleaning up that, 'cause that's all, that's what they did and it was structured wrong.

And they're, why don't I have any monies? Policy? Because that's not how it was set up. Because you didn't know better. 

Axel: Okay, so I, you just elevated my guy, John A. Little bit because he is been doing this for, for me and, and our clients for 20 years now. And so, yeah, I have to tell him that Curtis said that.

You're one of the few. One 

Curtis: of few, right. And listen, you talks to my And they don't literally hit you, beat you over the head with Nelson's book. They don't do it. 

Axel: Yeah, no, no, I get it. Now. One thing that, uh, I've heard, because sometimes, you know, it's not, not every client, um. Wants [00:26:00] to set it up that way. And I mean, I'm not trying to force anything on anybody.

I'm sure you don't do either, but one of the things where people are kind of, oh, it kind of sounds interesting, but I have heard, and here's, I'm just gonna tell you what I've heard, and then maybe you have a good explanation of what answer you would give that, especially in the life insurance business.

When you initially set up the policy and you say kind of, you know, what the, what the volume overall should be that you're working towards and so forth, and how long you actually need to make payments and all that stuff, that a substantial portion of the initial quote unquote investment goes to pay the company and the agents.

So that people have said several times, and I have never seen the extra calculation where they say, well, the first two years, three years, five years, you're basically just paying the person who is kind of selling you the policy. What's your take on that? 

Curtis: So remember I said properly structured. That's why you just can't go to anybody and do what I'm talking [00:27:00] about because the most policies do work that way.

Yeah. And Uncle Dave and Susie are right with that regard. It's still long term, it's still an asset. It's still better than buying. That's a difference. But for banking, that is a strategy, right? So no, uh, the people that do what, what we're talking about, they literally back out 50, 60% of their compensation.

That's why you get early cash value. So we can get, because you can. Is a cost of insurance. 'cause you're buying life insurance, right? Yeah. Not a savings plan, but there's a, the, so the IRS has a rule called a modified endowment contract. So they actually limit how much you can put into a policy. So when, when they're built properly, they're most efficient when you fund it right up to the IRS limit.

So it's basically, we make it so it's like it's a big Roth. IRA with more benefits. So generally, if somebody puts in, I, I was showing some, my example before we jumped in where, uh, this, [00:28:00] she was like 35. I said, look, if you paid 12 grand a year, you'd have like 7,800 of cash year one. Day one, right. And it would be about 300,000 of death benefit because you're buying insurance.

Right, right. Yeah. Yeah. 

Axel: But 

Curtis: most of the first year. Does go all of the first year bails called base premium goes to the cost of insurance. So where the agents get paid outta that, but again, we backed out half of what we made money on, right, so that you get early cash value. But year two, in her example, that 12,000, well 11,500 of the 12 went into the cash.

Year two, then 11 six, then 11 seven. You put in 12, it goes up by 12. You put in 12, it goes up by 13. So it gets more efficient. The longer that you have it, but it's definitely to that they're, they're not, when you say that they're not wrong, but they haven't got what the practitioner knows what they're doing.

Axel: Okay. They're wrong. Right. And then the last question in this context I wanted to ask is because we had a number of clients and [00:29:00] they basically understood the concept. They really liked it, but what they were looking for, because they would like to activate the money that their employer made them put into a 401k.

Into basically a whole life, uh, policy like you were just describing. We have not been able, even with my friend John, he tried to look into it, but the partner he works with, they don't do it. Is there a way to use your 401k? 

Curtis: Yes and no. So you can't, unless you have like a enforced distribution option? 

Axel: Well, yeah.

If you pay the fine, you can obviously take money off. Well, 

Curtis: no, you can't. Take it out as long as you're still employed there, like you have to separate from service one, two. It's funny 'cause the, the securities people don't like you taking money out of it, of the investments put into insurance. So I never really tell people to do that.

I just show 'em how it works and they may want to do that, but I don't encourage it. I'm not, you know, or same thing when people, I hear people tell people to bargain against their house and [00:30:00] put insurance. Completely bad advice. Okay? Don't do that either because you're listening to this and, uh, so what you gotta do is you gotta get control of it.

So let's say you had a, you left your job. You'd roll it over into an IRA. Right. So it's, it's similar to a Roth conversion, right? So if you converted a traditional IRA to a Roth, you'd have to pay the, uh, the 20% because the money went in pre-tax, right? And so you would do that. So now you could, so I'm not saying you do this, it's just a thing.

You could roll it over into an IRA. So you gotta, so now the rollover out of qualified money is not a taxable event. It's just a moving from one pocket to the other pocket. Yeah, 

Axel: yeah, yeah. 

Curtis: Now, once it's an IRA, you can can control the distribution because you can tell you control the withholding, right? So if you take it.

And you're under 59 directly from the IRA. You're gonna pay 10% penalty for early withdrawal. You're gonna pay the 20% for taxes. So [00:31:00] if you, yeah, but that would basically roll it over. 

Axel: The same if you take, if you're not working for the same anymore, it would be basically the same if you take it directly.

Right. 

Curtis: Yeah. Yeah. Well, so what you do is better roll it. I think it's better to roll it over if you're not, like, it's not, money's not burning a hole in your pocket. And if it's that urgent, you need to take a breath anyway. 'cause there's nothing that deep that where you need to, to, to do it. You need to think.

That means you're not thinking, you just calm down and, you know, make sure No, I mean, 

Axel: the idea or the, the question comes up when you say, okay, so I would like to do this. Be your own bank. I like the concept of working with whole life. I like the idea that I can then also build my basically passive income portfolio and I'm kind of stuck with a lot of money from my previous employment in my 401k.

That is kind of the scenario. 

Curtis: Yeah. So, you know, I never like when I, so here's what I do. I never go with the product. I want to see what's, so you see the thing behind me, principles. Right? Right. So, because it's [00:32:00] not, I don't. Because see what happens is it's not a one-off, right? So why I wanna see people saving 15, 20% because saving is a principle.

I don't care what you make. I don't care if you're retired, you're still have to save. You should actually, you should 

Axel: write a book that is even richer than the richest man in bar. Alright. 

Curtis: I I'm gonna write that down. I, so I'm working on a book, I'm trying to think of a good title. I'm 

Axel: just saying, you know, when you say 20 or 30%, that guy did 10% and got pretty 10%.

Right. Well 

Curtis: you on the gold standard then. You know, when the book came out, I was there twice. I was like, you gotta save more than that. 'cause you're, you know, that's why I. Because it's like, well, you gotta do more because dollar don't buy as much, but you've gotta save and so and so, and the savings piece whips helped.

You have to whip. Parkinson's law, you know, says expenses rising, meet income. And so most people, when they make more, they spend more. That's why we teach cashflow control through a tool. We use call currents and, uh, to help people really do [00:33:00] a cashflow exercise before we even get into all the other stuff to see where your money's going.

What's coming in from your business? Are you paying self first? What does your life cost? And then you want to set a system where you are. Saving is your default position, right? So we put a, we create a, a intermediary account or reservoir account. All your money goes there, and then you move it into your properties, your assets, right?

And then you say, all right, listen, my life costs 7,000. So let's say if you're making 10, we only put seven in the bill pay account. And then at three you are already saving. So we saved from the get go and then, you know, comes with an app and we meet with people, correlated people we do that with. And then every 90 days, like if, if you're not going crazy in three months, there should be nine grand or free cash flow.

Now what do you wanna do? And so then I would teach them to call you, okay, I got this free cash flow. We might be storing it in policies. I got enough to pull the trigger on some asset that I've been researching and, and there, but it's not, there's no [00:34:00] magic. That's why I say principles drive strategy, right?

So if you are not saving, we need to figure out why you're not saving. Like, I don't even wanna talk to you about how to be a bank yet, because, you know, if let's say you moved a hundred thousand dollars in there, what you gonna do next year? Like, how much are you saving? Yeah, exactly. 

Axel: Well, and I mean, the thing is, I, I think we are, we are amazingly aligned because the aspect with the principles drives.

Um, the success ultimately has also to do in, to some extent with systems. I know that people always struggle when they call it, when I call it systems, but in a way, right? Like nowadays, especially where we so have so many things. Everybody has a laptop or basically their, their, their cell phone is kind of like a computer.

They carry around. Um, and those things have systems called apps on it. Right? And I'm not suggesting you have to use an app, but the point is those things like you said, right? How much do you put aside, where do you put it? Where does it go? How do you manage it, how do you control it? All these things is basically establishing [00:35:00] a system on Yes.

Everything, all wealth. Yeah, yeah, yeah. I 

Curtis: heard Dan Cadence say All wealth is a product of systems. 

Axel: Right, exactly. Yeah. 

Curtis: Your point, right? And so you got. A thought process. General Rome says most people don't have a money problem. They have a philosophy problem. 

Axel: Well, and that's the other part where systems is, they have a tendency to become habits, right?

Like if, if stuff is automated, is systematized and so forth, you don't constantly have to think, oh, how was this and how much goes there, and so forth and so forth. It becomes almost like a habit, right? And so that's also what makes it strong because then you have, you know, typically people once as 

Curtis: you got good habits, the principles.

Yeah. Yeah. But also, I mean, 

Axel: yeah, if a habit is working or a system is working, we are just by human nature, much less likely to break it or change it because we're getting used to it. So we have touched on a lot of things, and I'm sure 

Curtis: that's what I try to do. Give people habits, make 'em automated. Yeah. And then, you know, go, uh, uh.[00:36:00]

BB do have, right. So work, you know, 'cause investing is more about becoming and buying and work on becoming, and then when you see something, the money will be there for you to do whatever you wanna do. 

Axel: Yeah, absolutely. And I think anybody who has been listening to us now for the last like 30, 35 minutes understands there's so much more there.

So if, if they want to get in touch and say, okay, show me more about the principles, show me more about this other stuff, what should they do? So I'll give you. 

Curtis: You, I used to give too many ways to contact me, but I'm gonna give you one way. 

Axel: Yeah. 

Curtis: So text, um, this is what I remember. I've got a couple. But text be the bank, all caps, all one word.

B-E-T-H-E-B-E-A-N-K, uh, to 5, 5, 4, 4 4. And then, we'll, you'll bid our mailing list. But what I'll do is I'll send you a free report called The Value of Liquidity. Which is principle four in a different ways of when you're talking about where should I store my cash? And then from there we'll follow up with some other free stuff that we have.

And if you like, we can have a [00:37:00] strategy session and talk about this, nothing but sale because it's. You don't lead with what I call a product, right? It's, it's all about Oh, absolutely. I mean, it's, it's more 

Axel: adopting a philosophy and, and you know, that's, that's not something that happens. So I, 

Curtis: I wanna do is get to know you, right?

Because people say, well, what should I do it? It does, it depends. What do you want? And what you want determines what you do. 

Axel: Right. And it also is driven by where you are right now. Everybody is right, and where 

Curtis: are you now? It's like, yeah. And that, that also, all of that stuff, like you can't even make good decisions until you kind of figure out, we, we, we call it, and we do a thing called a financial GPS, which is PS is like, all right, well here's where I want to go, then it is, where are you now?

And then now what do we have to do to get you from point A to point B? That's kind of the, the, the, you know, the framework of of, of how we teach and banking is part of that, but it's not even step one. 

Axel: No, I hear you. And that could be a whole different show just to talk about, you know, [00:38:00] what is this ever shorter attention span doing to our future that we would like to have but never spend, or very few people spend significant time.

It's 

Curtis: like pulling teeth to give 'em to read a 85 page 

Axel: book. Yeah. Yeah, exactly. So, um, we are gonna put all those, the, the, the term what to type in and the number and so forth. And the, lemme check out the, 

Curtis: uh, practical Wealth show. If you just want to hear more of the, Matt, if you wanna just follow along a little bit and get 

Axel: to know.

Yeah. And then not too distant future, they can even listen to me on that show. 

Curtis: That's right. 

Axel: Um, so Curtis, uh, well they 

Curtis: can go back. I'll look the other show you've been on before, right? Have you been on? Yeah. And then, uh, but yeah, we're gonna be on recently, so, you know, I, I gotta get great people on the show.

So 

Axel: yeah. I appreciate it. I appreciate it. Um. Curtis, totally independent of what we discussed so far. I always ask at the end, if you could meet anybody dead or alive, who would it be and why? 

Curtis: I would like, so I'll, I'll stay in the business realm. Okay. Um, my favorite entrepreneur [00:39:00] is a guy from the fifties.

His name was AB Fuller. 

Axel: Okay. 

Curtis: And, uh, so I read about him in this book by Dennis Kimbro, success Secrets of um, black Millionaires. He had a, like a fuller brush type company, but he was giving away Cadillacs in the fifties. He would do, um, um, see if people making like serious money in the fifties dress. Nice.

I see some of the things he should do a, a Saturday, which inspired me. I do a Saturday, uh, class for all our clients members. Um, uh, it would call the gospel of success and he would just get people. And, you know, teach him about money and success principles. And I would really love to, so this is, you know, in an era where if your skin looked like mine, they didn't wanna, you know, you people say you can't win.

But he proved to me that it doesn't matter. This is your desire to win. And he wouldn't let anybody keep him down. So I would really, you know, somebody that became a multimillionaire was hard, 

Axel: [00:40:00] you 

Curtis: know? 

Axel: Absolutely. Yeah. And I mean, I am, I'm always, because I'm originally from Europe, always don't want to be remiss mentioning there are places in the world where the color of your skin really does matter.

Curtis: Yeah. And 

Axel: it's good to know that, but it's a, 

Curtis: it's a deter. Uh, Myra Golden would say it's a. A contributing factor, but not a determining factor. Right. You know, 'cause there's nothing Curtis can't do when he wakes up 'cause of the color of his skin. So I don't accept that. And uh, so you got, and I, like I said, if you like Dave Ramsey, don't call me.

Like, you ain't not my tribe. 

Axel: Yeah, same here. So I, I wanna thank you, Curtis, for, for spending the time. I know that you have had a pretty tough time recently, very little sleep, so I appreciate that you brought the energy and, and you made the time for us. Thank you. 

Curtis: Thanks for having me guys. Go out out there and make it a prosperous day.

Axel: Thank [00:41:00] you.