Is Dave Ramsey RIGHT?!? About Infinite Banking / Garrett Gunderson
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DISCLAIMER CONT'D: Garrett Gunderson is not a licensed financial advisor. He is an Entrepreneur, Wealth Strategist, and Author of the New York Times and #1 Wall Street Journal bestselling personal finance book - Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity. He is not providing you with financial advice in these videos. This video, the topics discussed, and ideas presented are Garrett's opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.
Garrett should call into the Dave Ramsey show. Let us all know ahead of time and we can grab the popcorn and sit back and watch the sparks fly.
Dave would cut him off and/or over talk him all the time...
He just hits the mute button when he’s getting his butt kicked, then proceeds on a long narcissistic rant without any substantive rebuttal to the conversation, bashing real advisors.
He won't ever, he would be exposed...Because the insurance companies generated the gains off of their policyholders In essence, the dividend payments are treated as refunds by the IRS for overpayment of the premium. This means that the best option is usually taking the cash or check from dividends and reinvesting the proceeds in an investment vehicle that could earn more income.
@@IllinoisShortSales I disagree. The best option is to use the dividends to purchase Paid Up Additional insurance (PUAs), which will continue to grow both the cash value and the death benefit. This will give you uninterrupted compound interest while at the same time you can collateralize those dividends and then borrow against them to invest in other vehicles. Effectively, you can use the same dollar multiple times.
@@maxpruger837 that's not entirely true, pretty sure you know it. Be so kind to show us the section of your contract that states these points...I'm happy to share what the contract does say. Problem is, you want them to believe what you say, and illustrate in a sales piece, but then isn't explicitly stated in the contract. And now that ins contracts will only be paying 2%, there truly isn't a worse way to utilize funds, by bundling life insurance and "savings".
Garrett could do an entire show just reacting to Dave's show and I would watch every minute.
YES!
Why are so many TH-cam influencers triggered by Dave Ramsey's dislike of whole life insurance? Could it be that they profit from the sale of it? I think they are defending the source of their income.
I sold it from 1998 to around 2006. Then I referred it out and was still paid in a few ways. I haven't been paid on it in a few years, but think his dogmatic view hurts people in this specific situation.
Ramsey has a good program and I followed it for years and am debt-free. It was a hard move from "saver" to "investor."
When I was dragging my feet, my mentor said this, "There are basically three big money people in the world. Suzie Ormon, Dave Ramsey and Robert Kiyosaki. Suzie is for the poor people. Dave is for the middle-class and Robert is for the wealthy. It's not where you are at now, it's where you want to be." Best advice ever.
Dave helps you get out of the debt world. Suzie and Robert Kiyosaki are scammer.
Except Suzie Orman has given a lot of horrible advice and a pretty big scammer of a credit card as well.
You forget Warren Buffett.
Your mentor was a fool....
Dave is great for beginners to get you where you need to be to really start your journey to becoming financially independent.
I work for New York life and I personally have a whole life policy with Nyl I purchased at 23 for 350$ month 🙏 by age 65 my cash value will be 800k
In which case if I choose to use it to supplement my retirement I’ll be able to access 75k tax free a year for 20 years on top of any SSI if it exist . My pension with NYL and my 401k . On top of whatever other assets I acquire .
There’s so many strategic things you can do with whole life it’s amazing .
Oh and my face amount was 1 million in coverage which is also only increasing with my paid up additions and dividend compounding.
If I put $350/mo in an S&P 500 and it returns 10% on average, I would have about $2.25M from age 23 til 65. 42yrs total. Yes, I have to pay taxes on what ever amount I withdraw but why wouldn’t I do that instead of going through the hassle of getting a whole life policy?
I’m just curious...
@@jdponce90 1) Will you actually buy term and invest the difference because most people won't? 2) Be careful at finding a compound interest or future value calculator and typing 10% in. That assumes that each and every year, you'll receive a 10% return which as you know doesn't happen. The actual rates of return are usually 1-2% less than the averages over the long-term. 3) Your money is locked up until "retirement age" and you can't access it until then without penalty (unless it's a Roth option in which case you'll hurt your growth by taking out principal early). 4) As you said, you'll need to account for not only taxes but expense ratios and/management fees cutting into your return. 5) Hopefully you're able to invest more than $350/month throughout your 42 years. This makes a GREAT way to save for retirement after tax as a supplement to traditional methods that offers not only tax diversification but offers guaranteed growth not correlated to the market. 5) You can borrow against this policy at any time and the dividends and interest still grow on the cash value as if you hadn't. Mathematically, it's superior than paying cash for bigger purchases assuming you're disciplined enough to replenish your savings. 6) This is one alternative to saving cash in traditional accounts. It's not an investment but it can make your investing more efficient. 7) Your family is guaranteed a death benefit that's much larger than the cash value unlike savings and investment accounts 8) The term policy will expire (if you don't pass). If you still need insurance, or you need more as your income increases, you're not guaranteed to qualify for it. 9) A long-term care benefit rider can be added on for little to no cost. 10) This is creditor protected, usually even from divorce, and is a private contract that doesn't have to be disclosed as an asset.
@@jdponce90 average rate of return is a lie. You need to look at true return, which is CAGR. Since the new millennium, the S & P 500 has done about 6% CAGR, not 10%. Using the real rate, your number decreases drastically to just $850,000.
Moreover, accumulation/net worth doesn't matter. After tax,, SPENDABLE income is what matters. The SAFEMAX withdrawal rate from a managed portfolio is just 3%. Terribly inefficient.
And depending on where you park your money, perhaps fully taxable. Which will also trigger taxation on social security and possibly Medicare premium increases.
There's alot more that goes into retirement income planning than accumulating a large number.
@@jdponce90 averages are misleading. I reviewed a 401k with someone today that showed a 16% "average". Once we broke down month to month, we were able to see he didn't gain 16% over the last year. When the market dips, an opportunity loss is created. You have to gain back almost double to get where you should have been.
oakmontadvisory.com/average-rate-of-return-misleading/
This is a decent explanation. Take losses into account, it wouldn't be 10%
This is my new favorite video from Garrett! Spitting facts!
good to hear!
@@GarrettGundersonTV which is better? Term or cash value life insurance?
@@jenniferazor9814
You know he can't answer that question truthfully! His whole channel is based on the "whole life" is great philosophy. He has a whole network of sycophants that heap praise on him in the comments every time he makes a video. I would bet they are all WL salesmen.
Dave should stay out of investment advise and stick with what made him wealthy ! He's good at that and has helped a lot of people.
You can use IGIC Life Insurance Contract to get people out of debt much quicker than Dave.
I agree. However, I also think insurance salesmen should stay put of investment advice as well.
Dave can't do that. He knows everything, lol
@@dwo356 insurance coverage is not an investment let’s make that point clear that goes against compliance in marketing that product. So in essence we do not give investment advice we offer the safest way to protect you and your money 💵and from my understanding Garrett no longer sells insurance he’s somewhat of a financial strategist. In essence someone that’s not actively practicing in an industry that they are constantly speaking on should not be speaking as an authority on the subject. Financial advisors that are licensed in the financial markets can certainly give and make recommendations of various financial investments 😒contrary to popular belief we have the ability to do both 😉
That isn't what made him wealthy, though.
This will be the ultimate debate!! I can’t wait for it to happen
SN: I’m betting on Garrett !!
Insurance is not an investment. The only people making money are the ones promoting it. I changed insurance companies because the agent wouldn’t stop trying to sell me “investments”.
Ramsey’s advice is great up to the point where a 2 year old can grasp it. Beyond that, he’s full of hot air and a proponent of austerity which can never result in growth.
I’ll give you credit. Your candor with his BS is much better than mine would be
4 minutes in so far. #1, Prudential isn't a mutual company. #2, most of the big mutual companies such as Northwest Mutual or Mass Mutual- many of their reps are fully licensed financial advisors who also sell securities.
His response "oh, that's an insurance guy, not a financial advisor" is a deliberate attempt to ad hominen attack the rep, and disparage the idea, as in "If he was a REAL financial advisor, he couldn't possibly be recommending Infinite Banking or cash value life insurance". What a joke.
Oh by the way, I'm a financial advisor, have my Series 65, and LOVE Infinite Banking. Hell, I like utilizing WL contracts a hell of a lot more than locking your money away in a 401k for 30 years, I'll tell you that!
My personal policy is projected to have $650,000 of cash value at Age 65, yet the policy face amount is projected to be nearly $1 MILLION MORE than my original face amount. So if I died at that point, my family would get the original face amount, the value of the cash account, and much more. Again, as Garrett says, Dave has no idea what he is talking about.
Classic example of a scumbag creating a false narrative with half truths and lies, to try to get you to buy what HE is selling. Terrible.
Preach my man🙏
@@warrenhensley1 sorry, I get a little worked up any time Dave Ramsey is in the mix 😁
Me too. I had an emergency situation during divorce and needed to save house. The only reason I had a 401k is my former employer made 3% contribution of my annual salary. They made the annual deposit and it evaporated before the 7 days it took to take withdrawal. My employer got their tax deduction and i got a statement. People need to read about how and why 401ks were created to prop up stock market. I own my own business now. Tired of fictional pay.
IMO there are a lot of sleazy insurance reps out there that are not CFPs or fiduciaries (but still call themselves financial planners) and lead with what will make them the most commissions. The commissions are a conflict of interest - you can never really trust a salesman to work in your best interest. So while I disagree with Dave on a lot of points, I think it is a good idea to get an opinion from a fee-only financial advisor and take any advice from someone who stands to gain from that advice with a huge grain of salt.
@@travis1240 Dave doesn't say to get a fee only advisor Dave recommends buying front loaded mutual funds which pay more commission than a life insurance or annuity would over time! And he gets a cut of it from a referral! So he's in on it too, open your eyes
I might take "self banking" more seriously if there were actual financial advisors that recommended it. AFAIK the only people suggesting it are selling the insurance, which is a bit of a red flag. "A properly structured policy" is supposed to be ok, (acknowleding that many are not) but these products are complicated. How is the consumer supposed to not get screwed over? I'd rather go with something that doesn't require a double major in law and finance to understand.
Well you’ll only be as free as your own knowledge and level of control of assets. You certainly will never get there via Wall Street. Learn enough to know who to pick as your true advisor and what they do and you’ll be on a much safer path, you are your own key asset.
I know financial advisors that use it as a strategy. It's not actually complex, its just adjusting Your thinking about money to something different and more advantageous at all stages of life
Look up Nelson Nash
Banks use it too. Look up Bank Owned Life Insurance(BOLI).
@@multimeter2859Not really they use single premium UL. They aren't buying it for the same reason. But they are big buyers in Cash Value Life
Garrett i have had a whole life product for 7 years. It has been the best investment ever. I use the cash value all the time and it brings me freedom. The ability to leave a legacy with the growing death benefit is impowering. Spend while im alive and leave a legacy!!! Thanks for your video
Love hearing this, Chris. Here's to living the life YOU love!
Do you pay the interest on the loan annually? At 5% added to premium that gets expensive...
@@sincere355 MANY policies may be designed where the loan interest is lower than the guaranteed interest and dividend.
@@barrydraper215 show us one...never ever have I seen it!
@@inspirepartners370 I leverage a 3rd party IBLoc (Insurance Backed Line of Credit) I borrow at 3% simple interest. There are a bunch of banks who will collateralize the cash value in your life insurance policies allowing you to borrow at a lower rate. Its the safest loan a bank can provide and i use other people's money while the money in my policy continues to earn uninterrupted compound interest.
I've talked to 3 insurance guys about this. not a single one of them can match with a series of investing the same money. I've talked to many high-net-worth friends and not a single one of them do this.
Look at this as asset allocation. Do you have any fixed income? Bonds? Savings? This will underperform that under 10 years but very likely to far outperform in 30 years. Use the cash for good opportunities. Stable. Less risk. Protected.
I would love to see you interview Dave.
Dave would eat his lunch...facts always trump misrepresentations! Happy to arrange a similar conversation, with say, a Harvard trained Law graduate...
Amazing Dave Ramsey making so much money giving out common sense financial advice that anybody over the 18 should already know.
Except several generations of people raised by single mothers we're never taught.
I remember why I dislike these kinds of videos. The reactor gets to have a private discussion with himself and represent who he’s talking about however he wants. Plus, there’s the goofy disjoint between the reactor and the video, if the video is long and gets paused over and over.
Sorry bro but the fees kills any potiential returns you could get from doing Whole Life Insurance and if you want a similar effect you could just invest into a balanced portfolio instead and borrow margin from that.
This isn't an investment. It's more like a savings account on steroids. Also when you borrow from this there are no margin calls.
@@samsciascia4004 LOL, in a way there is a margin call...if you borrow money against your cash value and don't pay the loan back, the interest racks up on the loan eventually eroding your cash value balance without borrowing any more money. Worse case, if there is no more available cash, and your premiums no longer cover the cost of the insurance, your policy will implode and you will have to either pay higher premiums to keep in force OR lose the policy. You lose the death benefit and any/all cash value you think you might have had. May sound extreme, but I've seen this happen more times than I can count!
@@inspirepartners370 😆 sure that could happen but that is more of your call. If you just pay the interest there is no problem. You have more controll of the situation. Even in the situation you mentioned doesn't nessarly mean it will turn out that way.
@@samsciascia4004 Sal, you have no idea what you're discussing. You're as inept as your grammar.
@@inspirepartners370 I would like to see the stats on how successful these policies are. I started one in 1979 when I could least afford it. Lost it all after a few years. 'Term' guy ever since.
Dave's products and business are designed around the majority of people that either do not have the tools for a deeper understanding of finances or do not have the stomach for it. The average person would not want to overcomplicate their finances and he capitalizes on it. Being in favor of stock picking (investments), infinite banking and any other financial tool that requires individual responsibility and control competes directly against his business. He is not stupid - much the opposite - and he know exactly what he is doing.
Funny how he just glossed over the IRS tax rule and didn’t talk about it at all
YOU are a STUD explaining this. I was many times wanting togo this way when I was younger & everyone tried talking out of it. The closest thing was a guy who sold it and knew about it but just said I can sell it but he didn't get paid like he's suppose to on those accounts, blah blah blah.
Dave has always rubbed me the wrong way.
Stay with term and invest the rest. When you get out of debt and have an extra million sitting around then you can play this whole life game.
Preach!!
Everyone has an opinion, here is mine
Take a look at financial services, and ask questions about how things function. Finances should be fairly simple to understand, the more complicated, the more likely something isn't being explained, and that doesn't benefit the client. IF you listen to what Dave says, the IRS says the dividend is a return of capital, if it was a dividend, it would be taxed. The U.S. government can't tax it as any form of income, so it's not a gain of any kind. Agents promote things that make them money, and they use their words a certain way. Of the channels I've seen, agents suggest certain services, not general financial advisors. if someone, anyone suggests putting money into a vehicle that will guarantee a return, isn't looking at providing average returns over the years, accepts being a loaner not an owner for decades, and the seller makes a commission on that service, how does it benefit the client ? IF anyone is thinking of purchasing a cash value type of policy, look at maximizing other vehicles first, a good advisor will suggest different investments and different vehicles. Promoting what people say billionaires do, on any channel, doesn't help the average person. I am thinking that we hear people with that much money buy insurance policies, not because they are a great option, but because they are one of their last options, and great promo for the insurance companies. When someone suggests that letting a term insurance policy expire is bad, and makes it sound like the money was wasted, sounds more like a selling and product idea than anything. IF you are looking at putting some money away, look at tax shelters, and make a decision. You can contribute to a few at one time. Dave makes a lot of sense, because he doesn't talk in lingo, and choose his words a certain way to be in a grey area. He is fairly forward about his opinions and why. He talks about what worked for him, why, and how. Those are things that many insurance agents don't do, because they are paid on a sale commission, so the more grey the better. Try asking an agent what they are paid as a commission for a product you are looking to buy.
Preach!!! You are 100% correct.
@@astroman30 appreciate that. I hope people look for information, and not sales type talk that focus on greed. As soon as someone becomes greedy, and not focused on investing, and insurance properly, the agent has won, and can really try and sell anything, at any commission.
I was just working on publishing this. Thank you for upload this, He is misleading a lot of people
Dave is good for people that needs baby steps 1 through 3 ... after that, you need Garrett Gunderson
You need a psychiatrist
You put extra cash into stock/bonds because you make more money.
I was in whole life and now you are re-naming it infinite banking. Fees and premiums are way too high depleting your initial investment which is a terrible way to start a long term investment. Insurance isn't an investment. You should never be borrowing from a long term investment.
Completely right it is not an investment. Do you know how withdrawals work or what the rules for borrowing are?
@@GarrettGundersonTV It has been awhile so the details are fuzzy, but I do know you should not withdrawal money from long term investing because it defeats the purpose of compounding. And the fees/premiums make it too expensive for short term investments.
@@sudano9958 You're 100% correct, Sudano. Also, the reason the IRS prohibits these low life insurance agents from calling whole life/cash value an "investment" is because you don't get your money back. Letting an insurance company "invest" your money is beyond stupid. Buy term and invest the difference.
@@astroman30 That's not what Garrett Gunderson thinks
You're on the right track.
I do Private Equity investing (apartments, car washes, storage, etc.). The initial investment is scalped by 8-10% on dealer/syndicator/GP commissions. Then the money sits dormant for a few years while a facility is built or purchased. The growth of your money follows the path of a 'J'-curve (loses first) until about year three. Then hopefully it accelerates, and you see 15-20% p.a. over the longer term. Similar to WL except for the 15-20% growth.
Whole Life has a similar principal. Your growth is reflected in the Death Benefit Illustration and the advantage is that the Cash Surrender Value reflects that growth and how you can leverage it. Borrow and make investments. This is good as you can use it and not make payments until your final investment has a liquidity event. There are other tax advantages as well.
If you use it as a retirement income vehicle, it works great. One drawback is the lousy growth rate you see for such a long-term commitment, (similar to bonds in a stable market). If you compare this to investing in a taxable account vs WL, adjust for inflation and taxes (where applicable), the taxable investment will easily surpass any tax-free WL method. Even if you just placed it all in an S&P 500 ETF. Beyond the insurance aspect (for which you should be purchasing), there is not much more offered when a Cost Benefit Analysis is conducted.
For those who use their HELOC to enter the IBC world, (I suspect there are more than a few), you are paying interest on the HELOC and then interest on the IBC loan. It has to be a pretty good end use investment to cover that kind of overhead, (+12% combined today). There are better ways to create & grow your wealth.
This is why Dave advocates to buy Term & invest the difference. I wholeheartedly share that opinion.
Such great information. Garrett we appreciate your wealth of knowledge on Macro Economics!
He made his mind up Garrett because the product is decades-old...are you suggesting there is something new about the product?? Or is it just the spin it's sold with??
The products Dave s talking about is still out there but it's not used for infinite banking.
@@samsciascia4004 again, what "new" product are you using when you sell this concept? I've reversed a few of these situations now, and have seen a couple different policies used...to include the standard whole life crap.
So do the policy contracts mimic the language in your book?? Cuz if they don't, and we both know they don't, your book is worthless.
Preach!!
I'm still not buying it. I understand everything that Dave says. Nobody has been able to convince me that infinite banking actually works. How much interest am I paying? How is that even possible that they will be Paying my policy with the the dividend? What percentage of people does this actually work for and how many
End up making a mistake?
If you use bonds and savings accounts, in the short term they will have more cash. Over time, overfunded policies get dividends that become guaranteed once paid, tax advantaged, not required to borrow, comes with a death benefit and other benefits (protection, guarantees, disability provisions). It takes more knowledge but there is a reason it is a tool of so many banks for their reserves and a huge part of legacy planning.
@GarrettGundersonTV So what you're saying is the money is growing at a low interest rate. Lower than I can get from my savings account. But I would get a dividend. But it's really not a dividend because I overpaid Or like you say overfunded. What banks are using home life policies for their reserves? If the banks are using whole life policies who are the policies on? And I don't understand how much would you have to overpay on a policy for the policy to pay for itself? None of this is making any sense.
Filming today and will address this for you.
If your broken and can’t save money. Listen to Dave
But then stay broke ;)
The IRS language..."a refund of a deliberate overcharge"...I can provide the document from the IRS, what can you provide to dispute it??
Whole life insurance dividends may be guaranteed or non-guaranteed depending on the policy, which means it’s important to carefully read through the details of the plan before purchasing a policy. Oftentimes, policies that provide guaranteed dividends have higher premiums to make up for the added risk to the insurance company. Those that offer non-guaranteed dividends may have lower premiums, but there’s a risk that there won’t be any premiums in a given year. REFUND!
They never Guarantee dividends. They have two sections one non-Guarantee and one guaranteed but dividends are not guaranteed.
Hi Garrett, Dave is correct when he says, run from Infinite Banking. RUN real fast.
If you were ever a life insurance salesman I could see you earning well over a $1,000,000 in commissions per year. You have a solid and persuasive delivery. You would be very good at separating people from their money.
Term insurance like any product makes the company money. The 1% payout is NO indication the company is making tons of money. The low premium from many people is priced into what is to be paid out.
The argument against term policies only paying out close to only 1% is pure 100% nonsense. Every year you pay health insurance and car insurance and you don't get your premium back if you didn't use them. Does that mean you shouldn't buy them? The term policy is simply risk protection for the term. That's it.
At the end of the day, infinite banking is not an investment tool. The overall rate of return from whole life policies, universal policies, etc. is less than 5%. Many are close to 2%. Looking at any kind of life policies as investment vehicles do enrich the company and the financial sales folks.
Raj, one simple statement for you. Explain how a product, returning a long-term historical average of 3-5% tax-deferred (that you can access tax-free), be a worse alternative than the savings account you have at your bank.
I'll wait.
@@joshuatfields do you sell life insurance? 😄
I don't look at Infinite Banking (IBC) so much as an investment vehicle, but rather a way to become my own banker and secede from the traditional banking system as well as create tax free generational wealth.
As for investing in mutual funds, I stopped many years ago because I was personally making almost 0% return (barely breaking even). The fund I was in had a 5.75% front load which at the time I didn't mind because of the advertised 12+% growth of the fund. Well turns out, when breaking down the actual numbers
Meant that I needed a minimum of a 6%return to get my $100/month (only 94.25 was actually invested) back up to $100. Factor in the effects of inflation (1.88%at that time so we'll say 2%for simplicity) then all of a sudden I needed a minimum of 8%to keep the 100$ at $100. Now factor in the expense ratios (which were rather low but all combined equaled .97% so about 1%) then I needed a minimum of a 9%return on my money just to keep that $100/mon to stay at $100.... so a mutual fund advertising a 12% average return doesn't look so good anymore... a 3%growth over the long run with money I really don't have access too until I'm 59 1/2 years old... wonder where I could get a contractually guaranteed roi of 4%and build cash value that I can use at my own discretion tax free and have an ever growing death benefit to leave to my family tax free and become a wealth tool? Enter properly funded cash value insurance. I learned about this by reading economist Bob Murphy's (check out infinitebanking.org )work about 3 or 4 years ago and realized I was led astray by Dave Ramsey (I grew up listening to him all the time on talk radio while driving the tractor) by "buying term and investing the difference in mutual funds". Now I have my own whole life policy and have also taken one out of each of my daughters so they can have a better future from them (I own the policies so I still can practice infinite banking on them) but I'm nearly 8 years behind on it because I was STUPID (as Dave Ramsey often says) and took Dave Ramsey's expertise as financial advise... and even found 2 different financial advisors that practice his methods...
Here is the economist Bob Murphy breaking down where Dave is either intentionally lying about this, or at best completely ignorant on how this works.
th-cam.com/video/V3_wL9bIfKc/w-d-xo.html
@@joshuatfields Who in their right mind would compare a life insurance policy to bank's savings account?
When the whole idea here is about investing, you don't compare to savings.
@@matthewreed7159 So you advocate for IBC because you were invested in one of the worst mutual funds ever?
Why not just switch to a low/no fee sp500 index fund like from Schwab, Vanguard or Fidelity?
You could have been making a 10% or higher annual rate AFTER fees. Now you're stuck making only 4% on a lower amount than what you initially put in due to your insurance policy also front loaded with fees (premiums).
How is that a good deal?
I took Dave’s course, and it works for faith-based couples, and it has helped a lot of people, but I couldn’t finish watching this video. I can’t afford putting rubbish into my head because it might replace some vital information I need. Sorry, Dave. You’re not qualified to speak on infinite banking.
I'm just waiting for someone to actually provide any evidence to support why IBC is better than retirement accounts, let alone even a taxable brokerage account.
Did ya watch the video Dan….. Everyone I know myself included with a net worth of 10M plus uses this concept religiously. Everyone I know that can’t scrape together 100k to save their lives thinks ICB is a scam.
@@chadhewitt5650 I call bullshit.
One thing I've learned in my years as an investor and being part of numerous investing groups is that nobody worth listening to puts out their net worth uninvited.
Whether your actually worth that means very little. Wealthy people don't always make the best decisions. Doing something that technically works doesn't make it better than other options, which is my entire point.
Either way, I never said it was a scam. I simply want someone to actually provide the numbers of their own accounts including fees paid over time so I can simply compare them to what I have earned and would potentially earn based on historical returns in my brokerage.
The issue I have is almost every video and source I've found gives extremely basic and biased information about this and doesn't provide the actual numbers (dividends and fees) of their policies. The fact that I've asked over and over and over again on numerous video, Facebook groups, subreddits posts, biggerpocket posts, etc., and never received that info is a huge red flag to me. I don't just buy what people try to sell me when they refuse to provide an actual reason to do so.
@@dwo356 It's not that difficult to figure out. If they structure it with little base (life Insurance) 10%-40% the rest cash value. Agents are paid on the Life insurance not the cash value.
@@dwo356 That’s why I agree with Dave when he tells people it’s their responsibility to educate themselves, so that they don’t get caught up in scams and other people’s opinions.
I get very leery if people who can’t show me the facts and show me the numbers.
Thank you for this video!! I dont usually comment on youtube videos. But I appreciate your objective opinion.
Thanks for the comment. Sorry. Just seeing this. Keep commenting! I appreciate it.
Insurance companies didn't rich by letting you beat them at there own game.
You hit the nail on the head, Dave’s BIAS…. HE is biased against any life insurance unless it is term.
Bias and ignorant.
How many of you watching this have the estate issues of the Rockefellers?
Bottom line show me the math, I still don't understand the advantages of IB, if I put 100000 in a mutual fund ira tax free growth at 8 percent, or 100000 in a whole life policy, which is better for me 10 years
So everything you just said, as in the ways a mutual company makes money, are opportunities that are available to them because of the premiums paid by the insured...which was Dave's point, which I think you actually know, just won't admit.
But that is not what the Dividend is solely on. The money they invest from the money they receive from you or any other product they sell there invest in different investments.
@@samsciascia4004 I have no idea how to decipher your grammar. Seriously, what did you just write?
Great video! Thanks for sharing your knowledge.
Help me understand....This whole thing boils down to money. I search Dave Ramsey's net worth and 200M comes up i do the same for Garrett Gunderson. Nothing comes up. I follow both of their teachings but lets not get carried away here. Dave Ramsey can't doing all wrong with a net worth of 200M NOW!!! As of 2021 Sheesh...
You are right about that. But maybe Gundersons Net worth is hidden behind this Infinit banking? If he has it all in such insurances, does it even appear as net worth?
@@davecopp9356 Well i would hope so because if you are out here basically contradicting someone's financial views. Then i think you should stack up dollar for dollar or more against the other person. Thats all. He may or may not have a higger bet worth but as it stands. Dave Ramsey's is out there for all to see.
@@arsenal4life26 I love Dave Ramsey and his advice and I am now debt free with a fully funded emergency fund of 6 months and putting away 15% for retirement and 10% for a downpayment. Maybe I am not smart enough, but what Gunderson is saying here still sound like borowing money to me. I prefer less stress and never again something that even smells like debt. All the best.
Eh, many scammers makes a lot of money, like Suzie Orman as well.
I don't agree with everything Dave says, but I think he has a lot of good suggestions. Keep in mind he's addressing people that are in debt and want to get out of it quickly. And he's giving good advice to people how not get back into it once they're out of it. I agree with Garrett when it comes to value for your money. I have said that people have what I call the Walmart mentality. The question should not be how cheap can I get something for, but what is the best value for my money. Feel free to use that phrase Garrett just give me credit for it. 😁
Would you call a whole life policy a great value for your money? Garrett would!
@@markf.2050 It would depend on the individuals situation.
@ictpilot
Please explain that individual's situation that would make WL a good value for the money.
I know that those fortunate enough to have estate tax issues sometimes will buy it as a way to pass non-taxable wealth to their heirs, but that is not the case for the vast majority who get suckered into buying that crap.
@@markf.2050 Call an insurance agent. They could give you a better scenario than I could.
@ictpilot
Ahh. I was hoping someone could explain why WL is a good value for the non-super wealthy. Salesmen will only spew their talking points.
The only way to know who is correct in this debate is to see examples with numbers and with all policy rules. Im guessing Dave is correct.
Would love to run the numbers side-by-side
@@GarrettGundersonTV Go right ahead. Start off with how does one get money out of Cash Value without having to BORROW or taken out of the death benefit.
Dave Ramsey is perfect for beginners. Kinda like when you tell children about Santa Claus, so that you create a bit of structure for kids to behave and eventually we grow up
So are you wealthy from investing in life insurance?
@@chief5981
No. He is wealthy because he got his poor clients to "invest" in life insurance.
@@chief5981 you don’t invest in life insurance! In fact, it’s not the life insurance that makes you rich! It’s what you do with the cash value that’s available to you! You don’t just buy and hold like a stock!
I would like Garrett to interview Doug Andrew. I feel like that would be interesting.
WL vs IUL. It would be an MMA fight. Best to have them in a cage. Online, these two categories cut each other down. What does that say about IBC?
I'm confused, from 7 minutes to 8 minutes you critique Dave on what he's saying, but that's just Dave quoting the IRS. If this isn't a deliberate overcharge why does the IRS say it is? You said Dave is acting like an authority but it seems most of his appeal to authority is to the IRS definition. Any thoughts?
And crickets...
Dividend paying whole life pre dates the tax code. You know who wrote the tax code? Rich people who owned Whole life insurance and didn't want their dividends taxed like a stock dividend.
It's not the whole story Yes correct to a point everything is funneled through the Death benefit where it is tax-free. So any profits they give you back from insurance premiums, Real Estate investment, Bonds or other types of products sold is distributed through dividends which increases your death benefit. Dave didn't mention that part of it now did he?
So, what did the big banks miss that Dave didn't miss? Last I checked, banks like Wells Fargo and B of A own similar insurance products
Banks buy BOLIs to fund employee compensation programs.
Thanks for the information Garrett. I'm an insurance agent and I'm trying to learn this method and products what's the difference between this and IUL's?
Thank you!
Both are garbage, but IULs works as a universal life policy that promises to "invest" your cash value in the stock market. In reality, very little (like none) is invested. Instead your account is much like a savings account within the insurance company that has a capped gain. Your cash value is eaten up by commissions/fees that bleeds out leaving you to pay out of pocket for your own term policy. It's a scam just like this IBC nonsense.
@@astroman30 You must of not watched the video 💀
@@rafizxDx Where am I incorrect, Pedro?
Don't let the southern accent fool you. It's very arrogant of you to assume that you are smarter than Dave Ramsey on financial issues when Dave is far wealthier than you are. He has sold millions more books than you have. He has helped tens of millions of people get out of debt and build wealth. The problem is that you look at insurance policies as an investment and Dave doesn't. Insurance is a risk planning tool. There are far more fees than an actual investment and the historical returns of insurance products are nowhere close to the U.S. stock market. A savings account isn't an investment either. It's to cover short term expenses, like emergencies. Math from the 1950's is still true today. Life insurance policies are terrible investment vehicles compared to the stock market. The death benefit grows because you are buying additional insurance with the "dividend." So you are not earning any money, you are getting a larger death benefit, which you will never see.
They are not an investment, in this I agree. But a great savings tool and alternative to a bond allocation without capital depreciation risk, a myriad of benefits, and a permanent death benefit that can be useful to unlock assets and improve cash flow with coordination.
what is the max year that a policy should break even before it's considered badly designed??
Depends on if you are looking more for cash value or death benefit. Longer than 10 years is problematic. But many will be there in 4 to 7 years. Depends on age. Funding. And other factors.
@GarrettGundersonTV yea I just wanted an educational guess on your part. Thanks!!
You are welcome.
WWRD Audiobook:
garrettgunderson.com/wp-content/uploads/mp3s/MoneyUnmasked.mp3
Money Unmasked Audiobook:
garrettgunderson.com/moneyaudio
Dave is king on how to save $1,000 for the mass public. Infinite banking is more complicated for the mass public. Also, I have an overfunded policy that accumulates my cash value and my family will get ALL OF IT in addition to the base death benefit when I die. Sure, there are other policies where your cash value is not added to your death benefit, but if you know, then you KNOW.
Yeah. For people that spend more than they make, Dave is helpful.
Would you call a whole life policy used for IBC a good investment? How long do most whole life customers keep these policies before cashing them out?
I'd call it a savings vehicle with a ton of benefits. Not really an investment. Maybe an alternative to a bond portfolio or a place to store capital though. Very effective as those things.
@GarrettGundersonTV
My mattress also works as a place to store capital. And it may be better than a whole life cash value.
It doesn't charge enormous commissions or fees.
It breaks even on day one. (No need to wait 'till year 7)
If I want some of my money I can just take it. No need to take a loan.
If I want all of it there's no surrender fee.
If I die it will still be there. No one will take it away from my heirs.
Yes, I think the matress beats a whole life policy as a place to store capital. Now we just have to think of a place that beats the mattress.
Garrett- you right DAVE has never used a Life Ins. Policy to Fund so many Lifes needs or desires. Whole Life is a fantastic forced savings vehicle. Growth is accessed Tax Free via Loans is my preference but can pull your own man out Tax free too. You lose future dividends & interest.
I have bought many investment properties with Loans from my Kife Ins. And advocate it as the BEST way to Invest and grow both. JE
Why not just directly buy the investment properties instead of reducing your initial cash value through premiums when you buy life insurance?
Do while life death benefits pay out if you die from natural causes or old agr?
The policy could collapse and presto your money is no mo
He is on the spot. WL can be a good part of financial plan.
Nah, Bruh......it's a scam.
I swear, every TH-camr that endorses infinite banking are the ones that sell it. They all go make a reacting video to Ramsey to try and hold up the legitimacy of this scheme. People listen up, put your money into real estate or a diversified stock portfolio.
Preach!!
Well, I used to be an agent. Sat down 1-1 with people. Sold policies. Stopped meeting 1-1 with people on it in 2005. I talk about it often, but don't sell it.
Financial planning = series 65 = accredited investor!
Can infinite banking still work for older folks with a little cash sitting in the bank earning nothing?
Yes it can. It's an alternative to a savings vehicle. I'm in the process of taking out a policy on my 70 year old mother. She just sold her house and needs a safe place to store her money. Of course at 70 the death benefit is low but still more than the cash she's deposited.
If you are interested in learning The IBC, I suggest you read the book becoming your own banker by R. Nelson Nash.
Wealth of information!.. Thank you for this!!
My pleasure!
Getting into the industry and SO many people speak like Dave on this subject matter. I'm so confused because to ME it clicks and I can register it. Overcoming these objections is going to be a nightmare
What clicks and what is hard? Let me know and I'll give a better response.
@@GarrettGundersonTV What I'm referring to when I say it clicks is the fact that whole life can actually be beneficial for some. People like Dave just seem to have their minds made up so positively
This guy should be an insurance salesman. Oh wait he was...
And Dave? Never licensed. But his show is sponsored by a TERM insurance agency. Conflict of interest?
@@barrydraper215
Perhaps he just gives good advice and knows that Zander will treat their customers fairly and sell a good product at a good price. Dave Ramsey has his reputation at stake when he gives his advice. WL insurance salesmen do not have a good reputation to defend.
Garrett, I love how you corrected Dave point by point and especially regarding the face value increasing.
I have LIRPs set up for my family. I’ve questions regarding break even. I was advised to make minimum payments on them and pay up wealth fun. Hold the mortgage and we have very little debt.
Infinite banking just seems so unnecessary and complicated. Everyone defends it saying "if it's structured properly it works" well that's the point isn't it? It's not in the insurance company's interest to structure it in the ideal way so why would they?
Also for the average person, how on Earth would they understand whether it's structured properly? Even people with advanced finance degrees find the concept convoluted!
You're exactly right. It's all part of their scam. They over-talk you to get you feeling that you're stupid for not doing this nonsense. It's just borrowing against your own money while they keep the balance. Don't fall for it.
Your policy is not a bank 🏧
BORROWING against your own money having to pay it back (plus 5% interest) to the insurance company while they keep your balance, and you nimrods think this is a good idea?
Once again you are borrowing from the insurance company's general account fund while your money is compounding uninterrupted just like a Heloc where the bank collateralized your equity and they loan you their money.
@@samsciascia4004 Yet, you can only borrow (up to 90%) of the cash value YOU put in. Get your story straight.
@@astroman30 yes and whiles you borrow from the insurance company your money is compounding without any interruptions. No credit approvals needed and you pay it back on your terms you want.
@@samsciascia4004 "...whiles you borrow from the insurance company your money is compounding..." Sal, you can't call it the "insurance company's" money and "your" money at the same time. One, or the other owns it.
@@astroman30 it's called leverage your money is compounding while you use their 💰.
Very helpful Garrett, thank you for producing this video.
No you're lying and it's why FINRA is suing those who sell this for HUNDREDS OF MILLIONS
Thing about investments we can all agree on....there's a lot of ways to put your money to work. Wonder what Hogan has to say
I don’t think Dave wants people to realize this potential because it messes with his bottom line of selling debt free books.
Liar
This comment does not get enough likes! Best comment on here!
1. Does Dave have an insurance license? 2. Is Dave's show sponsored by a Term Insurance Provider? Conflict of interest and HIGHLY unethical. Term has its place. Permanent Life Insurance has its place. A well trained agent knows when to present each one.
Trash value insurance is a bad product. Try harder.
astroman30 Actually there is a time and place for both term and permanent insurance.
Let's say one wanted to ensure their mortgage will be paid if they die prematurely, a level term policy could be a smart addition to the financial plan because it will cover the appropriate time of the mortgage (typically 15 or 30yrs) and will pay out a tax free death benefit that the family can use for said mortgage. If the person ends up not passing away, the term will drop.
There are policies that can be designed to decrease, which means that each year the coverage amount will decrease. This would make sense as each year the person lives to pay the mortgage, the smaller that mortgage becomes. The cheaper the premium as well.
@@dadada396 Yet, in the nonsense you just wrote, you didn't elaborate on the "time and place for permanent insurance." Don't try to fool all of us, Mr. Salesman. A lot of us have seen behind the curtain of Oz and know how this trash value garbage operates. Tread lightly.
@@astroman30 Not going to address the ethical issue? His ethics are bad not only for the reason I disclosed in the comment - but they are also bad because he tries to categorize ALL permanent life insurance under a definition where HIS rules apply to all. It doesn't work that way.
Give me an opportunity with a small business man aged 30 who wants to put his money say ($500 per month) in a good investment grade life insurance contract vs the same $500 per month in a mutual fund, over time and after taxes the insurance contract wins 100% of the time. Now consider there is NO LIMIT to how much you can contribute to the insurance contract - and the IRA does have limits. NOW consider that you don't have access to your IRA without penalties. You ALWAYS have access to your cash value in your Insurance contract. NOW consider - he can take the money out of his cash value (borrowing at 4% and earning 6%) and then use that money to invest in the original IRA (Don't know why he would do that - but it still beats Dave.)
@@bwdraper BORROWING against your own money AND having to pay interest to do it, and you think this is a good plan? Tell you what Sport, open a savings account with me and I'll let you BORROW against your own money (and charge you 6% interest) while I keep your balance. Sound like a good plan to you? It's the same concept. Try harder.
Baby Boomers ALWAYS choose saving over investing AND infinite banking.
Might be why baby boomers own everything and we complain about them
So basically IBC has two parts, life insurance and a loan through the insurance. Regardless of loan or not, your equality in life insurance grows. If that is true, why should one get a loan from the insurance and not from a bank?
Exactly. The insurance company KEEPS your cash value. Hence, you're giving away your money.
Sometimes it makes more sense to get a loan from the bank and sometimes not. Depends on rate and control. On the insurance company, you decide the payment schedule not the insurance company which is not true with a bank loan. On insurance loan you don't have to qualify not true for a bank loan. So it depends on the situation.
@@samsciascia4004 you really mislead a lot! If you separate the "investment" dollars from within an insurance policy, you can set up vehicles where you actually borrow from yourself. This means you actually pay yourself back the interest too. Insurance Agents can't help you with this arrangement, they don't have the necessary licenses.
@@inspirepartners370 name them?
when i am die, my Family got the whole money…. i pay only the cash for the whole life insurance, 30 Years …. 😅 for me it‘s a liability…. ;)
Be cool to watch yall debate
I agree, and I’m betting neither Dave nor Garrett would be intimidated at all by the concept.
Lol debate what? Dave is a novice at life insurance.
David Weidemann Dave is absolutely intimidated! I’ve seen him push the mute button and never address facts he can’t face, and he would NEVER agree to debate Garret, because as a narcissist hypocrite he couldn’t control the narrative.
Nah, waste of time.
Dave needs to ask himself how the Rockefellers used insurance for cash flow...Heelllllooooo!!!
Why should anyone that doesn't have billions care about what billionaires do to KEEP their money?
@@dwo356 So that you can learn how to build a nest egg for yourself.
@@ericafarley2850 facts!
Dave is against Infinite banking because it takes away from his term insurance sponsors
Maybe just maybe the case. But he views it as an expense rather than considering the cash value. And his whole philosophy is about how to minimize expense.
And you might just be spot on and right.
Garrett, tell us how you really feel...😏
I am so confused. I was going to go with the bank on yourself program. Is that program not the right one? 🤯
Bank on yourself works.
@@GarrettGundersonTV thank you 🙏
I am Sooo with you. What is the truth
Whole Life and infinite bank on average will be a losing game compared to just investing in the market. If it wasn’t these insurance companies wouldn’t sell them
Don't compare investing to saving. Liquidity to risk. Benefits to staying exposed. And the market, 84 percent of the returns go to 10 percent of the investors due to hedging, fees, volatility, flash trading, dark pools and simply a lack of reality and responsibility. What is your basis for belief in the market and do you have any fixed income instruments in your portfolio? If so, why not use overfunded whole life as a bind alternative so you can have benefits and remove capital depreciation?
@@GarrettGundersonTV interesting points. My concern is WL companies may start raising interest rates so borrowing money from your policy won’t be a free ride like it is now
They definitely will be changing interest rates. Valid point.
I'm pretty sure that mutual fund stock companies take out huge fees too! What does he have against making money in a cash value account? I'm near Detroit and wouldn't mink knowing who he talked to :)
The insurance company keeps your cash value.
I heard he has a few IULs from someone who knows him but haven't been able to validate. So..who knows?
Liar
I'd be surprised, but who knows. Maybe he even has a credit card? Or a nice streak....anything is possible.
@@GarrettGundersonTV Why are you so obsessed with Dave Ramsey that you have to make a video? You even photoshopped your picture beside him. That's creepy af. No one has ever heard of you and you decide to ride his coattails to get noticed.
Garrett, did this get reposted? I think I saw this about a month ago. I remember at the time I went to find the video you were reacting to.
It's a different Dave reaction video. Maybe you watched this one first? th-cam.com/video/-7-eyRHiwzM/w-d-xo.html
@@GarrettGundersonTV no, I had forgotten how many Dave reaction videos you had done. The reason I remember it was the caller was the same (and Dave never talked about cash flow banking)
@@GarrettGundersonTV found it: th-cam.com/video/ydqYm5ty_MU/w-d-xo.html
Your videos are great by the way. Keep it up!
So is the IRS incorrect as well? Because Dave mentioned something about what the IRS said about dividends but didn't hear you mention anything about that.
Yes correct to a point everything is funneled through the Death benefit where it is tax free. So any profits they give you back from insurance premiums, Real Estate investment, Bonds or other type of products sold is distributed through dividend which increases your death benefit
@@samsciascia4004 Stop lying, Sal. Unless you buy a PUA rider, the DB does not increase. Dividends are just a return of overpayments. Scam.
@@astroman30 when you get the dividen why do they pay more than what you paid in premium?
@@samsciascia4004 that’s a lie…..you pay roughly $400 monthly premiums for a total of $4800 a year compared to a “dividend” of $150….yippee
@@astroman30 are you saying you don't get more than you paid in premium....yes or no very simple question
Watching Dave talk about whole life is like watching a lawyer talk about sovereign citizens. They just turn their brains off and use only cosmetic language to refuse any intellectual discussion.
I like Dave but his style and his bias are not good.
Dave Ramsay is a boomer personified
Waiting for you to get censored for this. Hope you don't.
Dave is for millions of people who piss every dollar away if you can’t float you can learn to swim
Yeah. He is good at helping people who spend more than they make.
LOL I LOVE IT!
Billionaires method. Is this guy a billionaire?
No. No he is not. Nobody that uses insurance as an investment is.
Even the Rockefellers don't use it as an investment.
If you die before the 7 years would the cash value die with you?
Yes you lose it. But the earlier you die, the more the insurance company loses out. Like with mine, if I had died my first year, I would have paid 18k, I would lose my cash value, but my death benefit would have been 800k. So who really cares if lose it?
You are buying death benefit. Not death benefit AND cash value. Cash value is the current value of the contract. It is what you get if you decide to cancel your policy. the cash value will rise to equal the death benefit if you die anywhere between the time the contract was put in force to age 121 when it endows. At which time they will cut you a check for the death benefit. it's actually pretty simple if you think about it.
@@paulstutsman its very simple, only complicated by bundling insurance premiums,, which are relatively low, and a "savings" scheme.
@@inspirepartners370 Very simple is correct. Not sure what you mean by bundling. It is not a "savings" scheme, but it is a great place to build capital you control.
@@paulstutsman Age 121??? It used to be 101. But I guess too many people started to actually live that long.
I have NEVER understood Dave's claim of "when you die, the cash value goes away." First of all, if that was true....you are dead, why do you care? Second, the cash value is simply the portion of the policy you have ACCESS to. It's like having a $100,000 house with a $50,000 HELOC on it, you sell the house and then you whine that your HELOC "went away" even though you SOLD your house and you now have $100,000. I swear, DR could tell his cult to self-amputate a limb and a portion of them would probably do it.
By all means, open a savings account with me and I'll let you BORROW against your own money while you make 6% interest payments back to me and I'll keep your balance. Nimrod.
@@astroman30 obviously you don't understand the product.
@@WFreedomNexus Obviously, you don't understand or you wouldn't have to make vague comments.
@@astroman30 What interest rate are you going to be paying it on a compound basis when you loan him the money? Will he be able to set the payment schedule and if his credit sucks will you still lend him the money?
@@samsciascia4004 Sal, much like cash value, he borrows (up to 90%) of his own money. at 6% interest. The first 4 years of payments will be heavily front loaded with fees/commissions. Around years 5, he starts to accumulate some cash value. In the meantime, I keep his money. Credit is no issue
Does this work in the uk ?
I don't think so.
@@GarrettGundersonTV bummer🤦♂️ are there any alternatives to this available in the uk ?
@@craigwardrop6539 aside from actually buying a bank in the UK, I don’t believe so.