December 12, 2024 • 38 mins
Unlock financial freedom with our latest episode featuring financial guru and best-selling author, Mark Willis. You won't want to miss Mark's fascinating transition from navigating the economic turbulence of 2008 to pioneering new financial strategies tailored for e-commerce entrepreneurs. From managing cash flow to inventory funding, Mark introduces the empowering concept of "bank on yourself," a method that liberates Amazon sellers from the limitations of traditional banking.
Listeners are in for a treat as we break down the differences between term life insurance and whole life insurance, likening it to the choice between renting and owning a home. Mark delves into how whole life insurance can serve as a self-controlled line of credit, offering both flexibility and security. This episode is packed with actionable insights that promise to help you maximize your financial benefits, featuring an inspiring story of a hot sauce entrepreneur who spiced up his profit margins using these innovative strategies.
As a new season approaches, discover how to become an Amazon Legend by leveraging unique financial tools that can transform your business. Mark shares highlights from his compelling book, "How to Be an Amazon Legend and Fire Your Banker," offering listeners the chance to gain control over their financial destinies. Don't miss this opportunity to learn how to build a robust financial foundation and outpace the competition in the dynamic Amazon marketplace.
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The Planet Amazon podcast, brought to you by Phelps United, addresses all things Amazon and other eCommerce marketplaces. In each episode, we talk with Brands, Agencies, and Sellers about Amazon news, new features, policies, brand policies, logistics, marketing, issues, and challenges, among other topics.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Announcement (00:00):
Welcome to the Planet Amazon podcast with Adam
Shaffer, where we explore theworld of Amazon and other
e-commerce marketplaces.
Join us as we delve into thelatest strategies and tactics
for successful selling on theworld's largest online
marketplace.
Adam Shaffer (00:17):
Hello, I'm Adam Shaffer and welcome to Planet
Amazon, where we talk about allthings Amazon.
Today on Planet Amazon, we'rethrilled to welcome Mark Willis.
He's a seasoned financialexpert and three-time
best-selling author with aunique approach to helping
entrepreneurs secure financialfreedom.
Mark is the CEO of Lake GrowthFinancial Services and co-host
(00:39):
of Not your Average Financialpodcast, with a mission to
empower Amazon sellers and otherentrepreneurs to gain greater
control over their finances.
Mark advocates for strategieslike bank on yourself to help
businesses thrive withoutrelying on traditional banks.
He's also the co-author of thebook how to Be an Amazon Legend
and Fire your Banker.
(01:00):
I need to read that one.
Today, we're going to dive intohis insights on alternative
financing solutions, helpingAmazon sellers manage cash flow,
inventory funding and more.
Welcome to the show, mark Willis.
Thanks, adam.
Thanks for having me on.
Oh, I'm excited.
This is a great topic.
In fact, we haven't reallytalked about this in the past on
(01:20):
all our podcasts, but this isprobably one of the most
important topics to talk aboutfunding your business and being
able to fund your business.
If you're selling on Amazon andyou're buying and selling
inventory and you're managingpeople and hiring people, the
costs can grow rapidly and alsotying up your cash in inventory
is a strategy all amongst itself, and now, with interest rates
(01:43):
so high, it's really hard tofinance this stuff and not lose
all the margin you're makingjust paying interest.
So with that, first of all, wewant to know a little bit more
about you.
Tell us about who you are, whatyou do in your Amazon and
financial planning journey.
Mark Willis (02:00):
Absolutely, and thanks again for having me on.
I was just hearing, as you werekind of laying up the ball
there, a meeting I had yesterdaywith a business owner in the
e-commerce space.
She said, mark, as soon as Ipay off the debt, I have to go
buy more inventory.
That gets me back into debt.
And then I sell that inventoryand I pay off the debt, only to
(02:20):
fall back down that staircaseagain.
So over and over and over again, there's this sick cycle where
the only person making profitoff the business is the banker,
but the only person taking therisk in the business is you, the
entrepreneur, unfortunately.
So, as a certified financialplanner, I've had the great
privilege of working with people, especially in the e-commerce
(02:40):
space, who are mostly interestedin cash flow, financial freedom
.
They want agency and control intheir life and they stumble
into the business and whetherthey are just getting started or
they're hitting seven or eightfigures or more, you know it
still can be a upward slog toget past the gatekeepers of true
wealth, which are the bankers.
Adam Shaffer (03:01):
I mean so true, and you know we have a business
and we're in the agency business, but we're also buying and
selling inventory and tying upthat cash with inventory and
growing.
If you want to grow, you got tobuy more.
So it's not just I buy it, Ipay off the debt and I buy more.
You got to buy even more ifyou're going to grow.
So it's hard and and a bunch ofthe sellers on Amazon are small
(03:23):
, you know, small mom and popbusinesses or small medium
businesses, and it's hard tofund all this.
So people wind up plateauingout.
But you have, like this secretsauce, this thing you call bank
on yourself.
Could you explain what thatmeans?
Because I don't know what itmeans?
I'd love to know more.
Mark Willis (03:42):
Well, get ready for the deep dive.
Get ready for grabbing the redpill.
Whatever metaphor you want touse here, I want love to know
more, sure.
Well, get ready for the deepdive, get ready for grabbing the
red pill whatever metaphor youwant to use here, I want the red
pill.
Adam Shaffer (03:48):
Give me the red pill man.
Mark Willis (03:50):
Yes, sir, yeah, this is not where I thought I'd
see my business, all right.
So when I got into financialplanning, it was 2009 and 10,
just the years right out andactually 2008,.
I got started with a taxprovider, tax CPA firm, and I
was helping them with helpingget their paperwork ready for
(04:10):
those who had fallen way behindon their taxes.
So my job was to kind of justprepare the paperwork for the
CPA and I was getting thepaperwork ready.
But hearing the phone calls wasjust, it was heartbreaking.
One these folks sometimes werein debt up to their eyeballs to
the IRS, and that's not a group,that's a bank with a gun,
basically.
So you want to watch out forthat.
(04:31):
But second, those that weren'tin debt with the IRS had plenty
of assets in the stock market.
And what do you remember aboutthe stock market and the real
estate market and the economy in2008, 9, 10, and beyond?
2008 was not a good time, man,not a good time.
So these phone calls I did notenvy my CPA that I worked for
because she was great at whatshe did, but she was making,
(04:54):
unfortunately, these phone callsthat were just heartbreaking.
I'm sorry, mr 63-year-oldclient, but I just lost you a
third of your life savings, or Ilost you half your life savings
or whatever it is.
So that was kind of the start.
I got in finance and I almostleft the industry.
As just a result, I was notinterested in making those phone
calls.
Fast forward a bit and I had myown student loan debt problem to
(05:15):
pay off.
It was student loan debt, notthe IRS, thank God, but the
student loan debt exceeded$100,000.
And again, no jobs, really.
Between my wife and I we hadseveral part-time jobs and such,
but it was just a hard push topay off that debt and all we had
ever been taught was thesnowball method of being
debt-free.
Snowball method and that's madepopular by some radio hosts and
(05:39):
YouTube channels and such likeDave Ramsey where essentially
you line up all your debts andthen you start tackling all of
them one at a time, one afterthe other, after the other,
after the other.
And that was sort of what Iguess was going to do until
someone a mentor, a professorand college professor of mine
(06:00):
came and visited us and lookedat me square in the eyes at him,
and said, mark, is it possiblethat Dave Ramsey could be wrong
about something and my littlemind exploded at that point.
That was the red pill, if youwill.
You know, and I chose to listento the rest of that
conversation.
I mean, what are you saying?
Dave Ramsey doesn't have acorner on truth, you know.
(06:21):
That was sort of what my closedmind was saying at that point.
Well, what did he tell you?
Well, he said well, is theresomething better than being
debt-free?
Which was all that I couldfocus on at that point.
And for the rest of theconversation he explained bank
on yourself to me.
Now, he's not a financialprofessional, he's a college
professor, but a great friend ofmine, and I knew he had my best
(06:43):
interest at heart.
So while I was very skeptical,I kept pushing through.
So let me explain, to answeryour question now.
What is Bank On Yourself?
Well, it's a little knownvariation of a financial asset
that's existed for now severalhundred years and in its
entirety of existence it's grownin a guaranteed fashion every
(07:04):
single year, no matter what thestock market's done, no matter
what the real estate market hasdone.
So every year it gets biggerand bigger and better results.
It's, of all things, cash value, dividend paying, whole life
insurance, life insurance Now,again, I didn't think that this
was a part of the financialuniverse that deserved any of my
(07:24):
attention.
All of my focus as I became aCFP was mostly from my friend
and from my exposure tofinancial infotainers.
(07:48):
I had to get a little moregrease under my wheels to figure
out if this thing was real ornot.
So I'll pause there for asecond.
Any feedback thought?
No, no, I'm really curious.
Adam Shaffer (07:59):
You're saying life insurance is something that
increases in value every year,no matter how the market's doing
or not.
But is it?
Well, tell us the story,because I'm going to say what
kind of insurance?
Because I have life insuranceand all I know is, after X
amount of years, they're goingto kick me out and charge me a
lot more for my next round,because I'm too old.
Mark Willis (08:18):
That's right.
Yeah, you know, when I firstheard the concept, I'm like well
, how do you build up wealth inan insurance contract?
It was sort of like sayingsaving money in your fire
insurance or your auto insurance.
It just didn't make sense, itdidn't compute.
And you're right.
Most life insurance sold todayis term life insurance.
Term means it's temporary.
(08:39):
Think of it almost like rentingan apartment.
You agree to a certain amountof time 10 years or 20 years and
then the landlord can kick youout or they can jack up the
rates on you, right?
If you're not healthy enough,they won't even renew it and you
just kick you out and there'sno equity being built up while
(09:00):
you're renting that apartment.
The same is true with terminsurance.
You're building no wealth orsavings in the contract and the
landlord, the insurance company,can kick you out or raise the
rent on you when the time is up.
Whole life insurance actuallyis altogether different.
It's a lot more like owning ahouse and this will all come
back to e-commerce here in justa minute.
So I promise this has a lot todo with your e-commerce business
(09:22):
.
Adam Shaffer (09:22):
I know I only have seven more years to live before
I'm going to lose my insurance,so I'm curious.
Keep on going.
Mark Willis (09:28):
Okay.
So in this case, a whole lifecontract and I'm going to talk
about it in terms of bank onyourself designed whole life,
because there's a lot of poorlydesigned whole life out there,
but there's some good ones outthere too.
And here it is in fourhopefully simple sentences.
Number one the cash value,which is the stuff you can use
(09:49):
while you're still alive.
There is a death benefit, butthe cash value of your policy
will increase in value,guaranteed, every single year,
and there's really nothing wecan do to stop it.
There's no market that can takeit away from you.
So that's the first thing.
It's guaranteed to grow.
Second, this is a liquid bucketof money that you have access to
for any purpose.
(10:09):
It could be for your businessneeds, it could be for your
personal needs.
You could send your child tocollege with it, you could fix
up your kitchen or you could buya bunch of inventory with your
cash value.
It's liquid cash and there's nopenalties, restrictions or
taxes to get the money out.
That's a big deal.
Third, it is life insurance, sowe're solving for that family
(10:34):
need there too.
Replacing your income,replacing your business's income
.
If you die, I'm guessing yourbusiness would not have a happy
day.
So we need to replace yourability to generate income for
the business.
So that's great for yourbusiness or for your family as
you need it.
So that's a solve right there.
And then the last sentence hereis you can use the policy like
(10:55):
a bank.
It's almost like a line ofcredit you set up for yourself
that never gets taken away fromyou self.
That never gets taken away fromyou.
So you can borrow against thecash in your policy and,
interestingly, you are incontrol, complete control of the
repayment plan to that policy.
So you could borrow 40 grand,let's say, or a hundred grand,
(11:21):
let's say, or 500 grand.
A gentleman just recently frommy one of my clients, just
borrowed $500,000.
No questions asked except howmuch do you want?
Where do you want us to send it?
And he used it for his case tobuy some real estate.
Now it could be just as easilyused for your Amazon business,
and a lot of our clients use itfor that.
You see how this allows him thento have control over repaying
(11:43):
that loan.
This allows him then to havecontrol over repaying that loan.
In fact, another client of oursjust used it for his Q4.
We're recording this in themiddle of Q4 here.
So he pulled a bunch of moneyfrom his policy as a loan bought
the inventory he needs for hise-commerce business in Q4 on
Amazon.
He sells a lot of really greatstuff and because he has no
pressure to repay that loan, hecan sell it at the higher price.
(12:07):
He's not under the gun of thecredit card or the Amazon
payables or Amazon, the lendingcompanies that charge loan shark
rates.
He's going to have a muchhigher margin than the gal or
the guy that is doing thefinancing the old fashioned way.
Adam Shaffer (12:23):
When you repay the loan that you take from your
whole life insurance, is thereinterest?
Mark Willis (12:28):
There is an interest that's charged on your
policy when you borrow yes.
So is that a good deal?
Let's do the math on thatreally quick.
Generally speaking, it's waybelow market rates that you
might find out there on a homeequity line of credit, or
certainly less than a creditcard.
Over six months to one yeartime span, your APR might be 2%,
(12:52):
roughly speaking, depends onwhich company it's with, of
course, but that's typical.
Now some people say well, mark,why should I pay interest on my
own money?
Why wouldn't I just pay cashfor the inventory?
And here's where things getreally interesting.
So, adam, when you access thecash in your savings account
let's say you had 50,000 bucksin your savings account and you
(13:14):
withdraw that money to go buyinventory how much interest are
you earning in the bank?
Adam Shaffer (13:20):
It's gone.
Nothing it's gone.
Mark Willis (13:22):
Yeah, yeah.
Of course, when you access thepolicy vis-a-vis the policy loan
, when you grab 50 grand fromyour policy as a loan, the cash
value in your policy willcontinue to grow and earn
interest as if you had nottouched a dime of the money.
Adam Shaffer (13:39):
So you're earning on the balance of the policy.
Mark Willis (13:41):
Correct.
Yeah, if you had 50 grand inthere, borrow out 50, it's still
earning on the full 50, likeyou had not touched the money,
and your money's in yourinventory being sold online.
So this is where your money cando two things at once.
So I'm an insurance.
Adam Shaffer (13:57):
idiot, then, because why am I buying term?
I pay whatever month I pay.
I hate it, but I do it and Iknow it's going to eventually
end and I'm going to get jackedup because I'm going to be a lot
older.
How do you buy whole lifeinsurance?
Is it the same broker that yougo to?
Is it the same companies?
Mark Willis (14:12):
And what's the cost ?
That's actually one of thebiggest risks of this whole
thing.
So you're exactly right.
You're doing what we're alltold to do.
I mean, I bought my terminsurance just like a good
little soldier was supposed todo.
I listened to every word DaveRamsey would say from his radio
show.
Nothing against him, he's justtrying his best.
His greatest sponsor is a termlife insurance company.
(14:33):
So go figure, 98% of terminsurance never pays a claim.
So that's a very expensiveproduct right there, when you
know that only 2% of yourcustomers are ever going to reap
a benefit.
The rest are just free incometo the insurance companies.
(14:54):
The process is the same.
You have a meeting with afinancial professional, an
insurance agent.
You go through a medical exam.
You get your policy.
That's typical how you get awhole life policy as well.
Here's where the risk is.
Most insurance agents have noidea how to design these things
properly.
In fact, I looked it up a whileback there were roughly 400,000
(15:18):
life insurance agents in theUnited States.
400,000.
That's about one for every 800Americans or so.
If there were 400,000 heartsurgeons, would you feel
comfortable going to just any ofthem?
Adam Shaffer (15:32):
No, but I'd probably get an appointment.
It takes forever to get anappointment, but no, I get you,
man, I get it.
Mark Willis (15:37):
So you want to make sure whoever you work with was
certified and authorized to dothese things properly.
It's kind of like I'm about totake a flight here pretty soon,
next week.
I want to make sure my planewas engineered properly.
I want to make sure the pilotsknow how to run that machine
properly.
All I care about is getting onmy seat, finding my seat, you
(16:00):
know, and just chilling out fora few hours while I fly safely
to my destination.
However, somebody had to do alot of thinking to design the
thing properly and has to keepan eye on things to get me from
point A to point B.
It's kind of like that withbank on yourself.
If it's not a bank on yourself,professional, who's running the
show, who's building that thingfor you, the policy could lose
(16:23):
a lot of ground in terms ofgrowth.
You could actually lose thecash value.
It could become a taxableendowment.
You could pay a lot of fees oreven see the policy lapse if you
don't see this thing throughfrom start to finish with
someone who's been authorized todesign this thing properly.
Adam Shaffer (16:39):
So there are certified bank on yourself,
agents or financialprofessionals.
Mark Willis (16:46):
Yeah, that's right.
It's the only authorization andcertification program in this
little niche in the industry.
So I'm a certified financialplanner.
That took me three years to getthat.
It took me another three yearsto really become a certified
bank on yourself professionalwith similar, you know, focus
and acumen and ability to do it.
I'm not tooting my own horn,but that's the idea.
(17:08):
You want to work with someonewho's been able to do go through
those rigors and is someoneelse's kind of looking over
their shoulder to make surethey're designing the thing
right for you.
That's the biggest risk in thiswhole project.
Adam Shaffer (17:24):
And we talked about term.
Mark Willis (17:25):
There's a term it ends.
Does the whole life end, or itdoesn't?
It's right in the name.
Adam Shaffer (17:27):
It's for your whole life, the whole life.
Mark Willis (17:28):
Yeah, so it's meant to go for your entire life, and
here's what's kind of coolabout that you don't have to pay
for it for the rest of yourlife.
We have folks that fund it forjust a couple of years, one year
, even possibly five, 10 years.
Whenever you're done funding it, it's a conversation with your
(17:50):
advisor and then a simple sheetof paper to the insurance
company that says please pay upmy policy.
Your cash values still growsguaranteed for the rest of your
life.
And for a lot of our clientsthey begin to take spoonfuls of
that money out as a retirementincome stream.
Now I just met with a coupleyesterday and they're able to
pull $101,000 a year incometax-free out of their life
(18:12):
insurance from age 65 to age 95.
That's a six-figure tax-freestream of income out of
something as boring and asmisunderstood as whole life
insurance, on something asboring and as misunderstood as
whole life insurance.
You know, I don't know too many401ks that can do that.
Adam Shaffer (18:26):
What are you paying in?
Like I guess you know I want amillion dollar policy.
What do you have to pay?
Mark Willis (18:31):
It depends on your age and your health and actually
the way you ask that questionis focused.
It's a great question and I'dhave to run a calculator to find
out for sure.
Adam, for each person your ageis going to be different.
But that's actually the otherside of the seesaw.
The death benefit at a millionbucks, that's fine, that's going
to be.
But I would more importantlyask how much do you feel
(18:54):
comfortable saving without itbeing a burden, and where can we
reposition your existingsavings or brokerage accounts or
other existing assets?
Could we pour those dollars in?
And this is the important parthow can I squeeze down the size
of your death benefit to be assmall as possible?
Rather than giving you anexpensive $1 million death
(19:16):
benefit, could we find a way tobring your death benefit down to
400 grand or something, so thatyou have that much more cash
value?
Eight to 40 times is typical.
Eight to 40 times more cash.
To design the policies this way.
If we shrink your death benefitdown, it's like a seesaw.
Either we're going to have asmall death benefit, big cash
(19:36):
value, or the old fashioned wayis to have a big death benefit
and almost no cash value at all.
Remember, for those listeningand just learning the cash value
.
It's the juice, it's the stuffyou're able to enjoy and spend
and use like a bank while you'realive, which is, in my opinion,
the most fun time to spendmoney is while.
Adam Shaffer (19:55):
I'm alive.
It's harder when you're dead,sure, but are you paying this
thing monthly?
Mark Willis (20:02):
Great question.
You may pay monthly.
You may pay monthly, you maypay annually, you can pay once a
year, whenever you're ready,and, as I mentioned earlier, you
might even just have a largelump sum to just drop that in
and that's it.
And then that's it, yep.
Adam Shaffer (20:15):
Okay, yep, so now, if I'm an Amazon seller, I'm a
small business.
Walk me through it.
So the bank on yourself.
So this is obviously foranybody in business or for
anybody anywhere, but I'm anAmazon seller.
I need to fund inventory, Ineed to fund payroll, I need to
grow my business.
So walk me through the steps.
(20:36):
Hey, mark, I'm an Amazon seller.
I need some money.
I'm going to the bank.
It's not that easy to get theinterest rate's really high.
What do I do?
Tell me about this bank onyourself.
Mark Willis (20:48):
Yeah Well, first thing we do is just learn more
about what the individual istrying to do and where they're
at today financially.
When I meet with most folks,we'll have a one-on-one advisory
consultation before we jump tobank on yourself or any other
conclusions.
I just want to hear whatthey're trying to do.
Sometimes bank on yourself isgreat, sometimes it's not.
(21:09):
We are a full financial firm,so we'll look at that soup to
nuts following the CFP processfirst.
Oftentimes people are sitting on401k money, a brokerage account
.
Their brother got them intocrypto, they got a couple of
extra, whatever savings accounts.
So first and foremost, we say,all right, is the money you have
doing what you want it to do?
And most of the time they sayno or I don't know.
(21:32):
And so we really have aconversation around what do you
want your money doing for you?
A 401k, just for sake of example, is not liquid.
You can't access it untilyou're 60, 59 and a half.
It's not guaranteed.
There are no guarantees on a401k.
The only guarantee is that thegovernment's going to get theirs
and that the advisor who ismanaging that 401k is going to
(21:55):
get his or hers their fee.
That is.
So the 401k, I think fails thetest of any entrepreneur just
right there.
So the 401k, I think, fails thetest of any entrepreneur just
right there.
Plus, there's no ability to usethe money like a bank right,
and banks are notoriously themost profitable businesses in
town.
So back to your question.
Once we've had that initialconversation and it's determined
(22:16):
, yeah, bank on yourself wouldbe great for this situation,
then we put some numberstogether and once I've shown the
numbers again, maybe it's 500bucks a month or maybe it's 500
grand a year, and both of thoseare policies that we've done for
clients in the last six months.
You can design policies at anysize, really to spec.
(22:37):
You want them custom designed,and then we go through an
application process.
That application process isreally simple, it's free.
You go through an applicationprocess.
That application process isreally simple, it's free.
You go through a medical exam.
They make sure that it's a goodfit for you and also the
insurance company.
The insurance company needs tofeel good about bringing you on
board as one of theirliabilities.
You might see it that way.
Once they've said yes to you,then you can start your policy.
(23:01):
And, just briefly, once youstart the policy, you fund it
and usually within about twoweeks, you have liquid,
accessible cash value.
You can log into online and seeit, you can request a loan from
it and, literally again, itprobably takes you two to four
minutes to click on this button,click on that button and have
that money.
Begin the process of comingback to your bank account, and
(23:24):
that process hitting your bankaccount might only be three to
five business days.
So usually folks see this as asouped-up, supercharged savings
account with a death benefit toboot.
Adam Shaffer (23:35):
And so I would fund it.
To say, I funded a $400,000policy, but I funded it
initially with $50,000, or say$100,000.
The $100,000 would be availableto me, or more.
Mark Willis (23:46):
Great question, you know again, depending on age,
and health and and do you planto ever add more to it?
Ever again?
Adam Shaffer (23:51):
Yeah, I'm going to , I'm going to pay, but I
started it with a hundred.
Mark Willis (23:54):
Sure, then you might have some.
You'll have less than a hundredthousand because you bought
that $400,000 policy, but if wedesigned it right, you might
have somewhere between 60% and95% of your cash value liquid
right away.
Adam Shaffer (24:09):
And if I want to buy inventory with it, is it
hard to get the money out?
Mark Willis (24:12):
No, literally you can go online and again within a
minute or two be clicking somebuttons, say hey, yes, I want
this money you can wire moneyfrom the account like a bank
account Exactly, it's directdeposit right into your bank
account.
You can buy your money from theaccount like a bank account
Exactly, it's direct depositright into your bank account.
It's not as liquid as a savingsaccount, though I don't treat
this like a debit.
You don't get a debit card withit.
You can't use it at Home Depotto swipe for your lumber.
Adam Shaffer (24:36):
It's about three to five business days to get the
money direct deposited intoyour bank account.
So the benefits of thiscompared to me getting a bank
line.
Well, first of all, it's my ownmoney, so if you don't have any
money to put in, how do you doit?
Mark Willis (24:46):
That's right, you can't you really have to be
thinking about this as your ownmoney.
So start where you can.
A lot of folks start with hey,Mark, I can't replace my
inventory purchase, I can'treplace my typical line of
credit that I use for inventorythis Christmas season.
But I'm going to start mypolicy now at whatever 400 bucks
(25:08):
a month, or a thousand bucks amonth or whatever they can
afford this year.
And they feather the clutch, touse an old car metaphor.
Right, you can kind of slowlymove your way into this.
So over time you're no longerfeeding off of the trough of the
banks which is notoriouslyready to give you money when you
don't need it and then takeaway that line of credit just
(25:30):
when you need it the most.
So, slowly and surely, moveaway from that banking system.
Sometimes it's overnight.
If you got some money in asavings account, we can get it
done right away, meaninginstantly.
Or sometimes it takes a fewyears, but either way, it took
my wife and I four years to payoff our student loans, but we
were so glad to do it.
Rather than paying it off theold-fashioned way, we used our
(25:52):
policy borrowed against our cashvalue, cleared our debts one at
a time bought back our debtfrom the bankers and Sally Mae
and all those crooks and we nowpaid ourselves back to get those
loans paid off to ourselves.
Adam Shaffer (26:07):
So where's the snag when?
Mark Willis (26:09):
can you go wrong?
Well, again, if you're on thewrong airplane or if your pilot
is a clown, that's going to be aproblem.
That's the biggest risk.
Adam Shaffer (26:17):
But outside of the inexperienced folks, they're
dealing with a real, certifiedprofessional.
What could go wrong?
Mark Willis (26:24):
Yeah, if you fully funded your policy and you're
being an honest banker withyourself, it's very hard to
wreck this car.
If you don't fully fund yourpolicy, meaning if you're just
avoiding our calls and you'renot fully funding your policy,
if you're running your gas onempty all the time, and if
(26:45):
you're pulling money out of thepolicy as a loan and you don't
repay yourself, if you'restealing from your own bank,
that will ultimately lapse thepolicy.
Now what does that mean?
It just means the death benefitis gone and your loan is also
gone is gone and your loan isalso gone.
(27:06):
So no loan to have to repay.
Right, you could face some taxconsequences.
If there are gains, we try tosuppress that on purpose in the
first few years to get you upand running.
Now one more thing, and thenI'll hush and get your thoughts.
Let's say that you have aterrible year in business.
Everything's just lights outman, personal emergencies,
business emergencies.
Let's say you've been honestwith yourself and you paid back
(27:27):
your loans.
Let's say you've got $75,000 ofcash value at this point, for
example, and let's say you couldnot pay your premium.
Let's say the premium was 10grand a year, for example, and
you had 75 grand of cash valueand you had no inflows.
You had no income at all.
Adam, where could we possiblypull some money?
(27:48):
$75,000 cash value.
We need 10 grand to pay thepremium and maybe another 30
grand to cover our groceries forthe year or whatever.
Couldn't we pull from thepolicy to cover our expenses,
even the premium?
Adam Shaffer (28:03):
You bet, so you could pay the premium by
borrowing.
To pay the premium you can?
Oh, okay.
Mark Willis (28:07):
I didn't get that, okay yeah, which isn't that cool
because, while it's notsomething you want to make a
habit of doing, when you do this, your policy remember is still
earning interest and growing asif you had not touched the money
.
So, when you pay yourself backand pay the loan off, your
policy has been growing as ifyou hadn't skipped a beat toward
(28:27):
your retirement future.
Adam Shaffer (28:28):
That's amazing.
So you could borrow to pay thenext payment.
That's amazing.
Mark Willis (28:32):
Yeah, yeah.
So how can we mess this upAgain the advisor, if he or she
doesn't know what he's doing,building it incorrectly or with
the wrong insurance company?
I've met too many people whosaid, oh yeah, my advisor said
he could do this for me, noproblem, and then I get a
statement of what they've gotten.
I'm like jaw dropped.
This is a nightmare.
So that's a problem, and we canbe our own worst enemy If we
(28:55):
don't have a strategy forrepaying.
This is why it's reallyimportant for our clients at
Lake Growth.
We do regular onboardingmeetings, training meetings.
We do regular six-month reviewfinancial planning sessions with
our clients.
We want to make sure that theygo all the way from when I meet
them, all the way to dead andpast dead, so that they can have
(29:15):
a great rest of their excusethe pun, but the rest of their
whole life.
Adam Shaffer (29:21):
So this could work for anybody.
I see this as a mass marketkind of thing.
But why Amazon sellers?
Why e-commerce?
Why do you feel like and whyare you getting so much demand
from that particular area?
Mark Willis (29:33):
Like and why are you getting so much demand from
that particular area?
Well, you know we did write thebook how to Be an Amazon Legend
and Fire your Banker with DannyStock, who's a dear friend and
client, and I think the tool ofwhole life insurance fits like a
lock and key to the e-commercespace.
You probably can think of evenmore applications than I can.
You know, like when would ithelp?
(29:54):
How might it help anye-commerce business owner the
most to have guaranteed liquidcapital for any reason?
How might that help theirbusiness?
I could probably think of a fewreasons.
You might be able to think of afew, yeah, so could we become
more profitable?
Could we become morecompetitive?
Might we be creating,essentially a golden parachute
(30:18):
for every business entrepreneurthat sets this up?
I don't know about you, butwhen I started my business and
most e-commerce businesses, Ithink, are the same we're not
just handed a retirement accountus are so preparing for that
final moment when we have tocash in our chips.
Work-wise, having a giant pileof cash value in your policy
(30:41):
could be the golden parachutethat most entrepreneurs wish
they had tell us about it.
Adam Shaffer (30:50):
It's how to be an Amazon legend and fire your
banker.
I love the title, but what wasthe impetus, what was the reason
you wrote that book?
And it was really.
It's an Amazon-focused book.
Give us some takeaways.
Mark Willis (31:03):
Sure, I mean, it certainly could be used with
Walmartcom or eBay or anythingelse.
Of course, any kind ofe-commerce business that you
might have could be even notproduct.
It could be a service-basedonline business.
But we wrote the book because Ifelt like folks need and it's a
simple enough book.
You could probably read it on ashort airplane flight maybe 45
minutes to an hour is all itmight take to read through it
(31:23):
and I'd be happy to give it outas a copy to anyone who reaches
out to me, and we'll give you awebsite at the end.
It's kickstartwithmarkcom.
If you want to go check thatout and get a copy of that book,
kickstartwithmarkcom.
But we wrote the book because wereally wanted to make sure
e-commerce business owners which, honestly, entrepreneurs, I
believe are really the fuse inthis country.
(31:47):
I think it's what could lightup a bright and beautiful future
, or it could be the disasterthat undoes the country that I
love so much.
So I love working with businessowners.
I love working withentrepreneurs.
The majority of our clients arereal estate investors and
business owners.
Most CFPs, like myself, aregoing to point their clients
(32:09):
toward things that theyunderstand the stock market, for
the most part because they cancharge a fee on that investment
account, but understand thestock market for the most part
because they can charge a fee onthat investment account.
But I believe the stock markettakes energy and power away from
the entrepreneur.
Think about it when you'rebuying Apple stock, you're
buying someone else's dream andhelping their future.
(32:29):
When you have a whole lifepolicy that you're borrowing
against to pour into yourbusiness, you're investing in
your own future, and that, to me, just gets me out of bed in the
morning.
I love the idea of helpingbusinesses reach their goals and
dreams without taking a bunchof unnecessary risk.
So that's why we wrote the bookand why we wrote it for the
(32:50):
e-commerce crowd why we wrote itfor the e-commerce crowd.
Adam Shaffer (32:53):
And is it hard?
Are you finding it's hard forthe people you meet to get their
heads around this, like they'relike, okay, that's great, but
they just say I'm going to keepon doing what I'm doing, or is
it an easy sell?
Mark Willis (33:04):
Well, it's sorry to keep using the matrix metaphor,
but once folks really get this,they can't un-get it.
You know it's hard for them tounsee or unhear this idea.
Why would I continue to paycash for my cars, even If I know
that I could use my policy tobuy my cars?
Why would I continue to paycash for my tax bill or my kid's
(33:25):
college tuition or any othermajor, my kitchen remodel, any
other major expense?
Once it's heard, it's hard tounhear.
So I have very few people whojust say, eh, I'm good or it
doesn't really.
There's a very fierce dividingline.
Now some people would say, well, mark, I could get a better
rate of return if I chase thelatest meme stock.
(33:47):
I'll just put my hope andprayers on the latest, you know,
gamestop or whatever the latestone is, and I wish them the
very best.
You know this is whole lifeinsurance is not an investment.
Yeah, you're right, that's aform of gambling or speculation,
and certainly the stock marketcould give you a higher rate of
(34:10):
return some years, but mostpeople realize that markets come
down too.
So for the most part, I'd sayit's not that hard to really
explore this option with folks.
In fact, most people get itthat, yeah, somehow the banks
have been doing this to me foryears, mark, I wondered how they
(34:32):
did it.
This is a simple way that I cando what banks have done to me,
but now I can profit from itwithout having to be an FDIC
insured bank charter with $100million in the bank or whatever.
They can be their own source offinancing and for them, that's
all it takes to wrap their headaround this.
It's not that complicated.
(34:52):
It's just learning to thinkdifferently and to use our
financial tools at our disposalin a way that may not have been
told to us by financialinfotainers.
Adam Shaffer (35:03):
So it's a good time of year to start planning,
right.
You have the new year comingand you have the fourth quarter,
the holiday season right now sowe're all kind of loading up on
inventory and we'll have to payit in 30 or 60 days and so that
payment could be due and youwant to start your off strong.
So I mean, I think everybodylistening and beyond should take
(35:26):
a look at this.
This is a really interestingoption that I never, ever even
knew existed until we just spokeabout it.
Now I better read your book,man.
This is really good stuff.
I do appreciate it.
What are we not talking about?
What other tidbits you want togive to the team?
Mark Willis (35:42):
Oh sure, well, so to your point.
Yeah, you're right, it's Q4 aswe're recording this and as it's
being played.
But there's a guy, he's aclient of mine.
He sells hot sauce online.
That's his business and he'sgot a private label and
everything.
So he was using credit cardsand other things that would have
to be paid off relativelyquickly and he would sell most
(36:02):
of his product right nowChristmas presents and that sort
of thing.
When he set up his policy, hecould only set aside a couple
thousand bucks a year.
That's what he could do atfirst, but he started using the
policy to buy his inventory andover the next three to four
years he completely replaced hisline of credit and because of
that he was able to have hisprofit margins triple over what
(36:24):
he was doing and that allowedhim to pour more money into new
policies.
So now he has several bank onyour self-designed policies on
himself and his wife and hisadult children who work in the
business with him and, what'seven more interesting, he's
become the banker for hiscompetitors.
So he's kind of in the worldwith other guys and gals that
(36:45):
sell online and they're like andhe mentions to them oh yeah,
I'm using my own money to lendand lend myself, and they're
like oh, wait a minute, can Iborrow some money?
So now he's lending money tohis friendly competitors and
they're paying him a cashflow.
That's a stream of income fromwho was once, maybe, his
(37:06):
competitor.
So don't forget if you can bankon yourself, other people might
be able to bank on you as well.
Just do your due diligence.
Don't lend to folks who have noright to pay you back, but
that's a thing that I think moreand more e-commerce business
owners should find out.
We're already in the bankingbusiness.
We're just sitting on the wrongside of the banker's desk,
that's for sure.
Adam Shaffer (37:26):
Amen to that, so final words to the audience.
Mark Willis (37:30):
Oh, just keep listening.
Leave this Amazon.
I mean just this.
This podcast is awesome.
Please leave the planet Amazona five-star review.
They do a great job and gettingset up for the show has been a
lot of fun.
So thanks again, Adam, forhaving me on.
And again, how do people reachyou.
You can go tokickstartwithmarkcom.
Kickstartwithmark with dot com,kickstart with Mark with a K
(38:00):
dot com, you'll get a free copyof the book how to Be an Amazon
Legend and Fire your Banker.
Just mention Planet Amazon inthe agenda of the 15-minute
phone strategy session thatwe'll set up for you.
That's kickstartwithmarkcom.
We'll go over any questionsyou've had about this episode
and help you learn more abouthow to bank on yourself.
Adam Shaffer (38:10):
That is awesome.
Well, thank you for joining.
This is just a great topic.
We're going to have you back on, so thank you very much.
Mark Willis (38:16):
My pleasure, thank you.
Announcement (38:18):
Thank you for watching another episode of the
Planet Amazon podcast, where wetalk all things Amazon.
If you want to learn about howto accelerate your sales on
Amazon, visit Phelps United'swebsite at phelpsunitedcom.
Welcome to the Planet Amazon podcast with Adam
Shaffer, where we explore theworld of Amazon and other
e-commerce marketplaces.
Join us as we delve into thelatest strategies and tactics
for successful selling on theworld's largest online
marketplace.
Adam Shaffer (00:17):
Hello, I'm Adam Shaffer and welcome to Planet
Amazon, where we talk about allthings Amazon.
Today on Planet Amazon, we'rethrilled to welcome Mark Willis.
He's a seasoned financialexpert and three-time
best-selling author with aunique approach to helping
entrepreneurs secure financialfreedom.
Mark is the CEO of Lake GrowthFinancial Services and co-host
(00:39):
of Not your Average Financialpodcast, with a mission to
empower Amazon sellers and otherentrepreneurs to gain greater
control over their finances.
Mark advocates for strategieslike bank on yourself to help
businesses thrive withoutrelying on traditional banks.
He's also the co-author of thebook how to Be an Amazon Legend
and Fire your Banker.
(01:00):
I need to read that one.
Today, we're going to dive intohis insights on alternative
financing solutions, helpingAmazon sellers manage cash flow,
inventory funding and more.
Welcome to the show, mark Willis.
Thanks, adam.
Thanks for having me on.
Oh, I'm excited.
This is a great topic.
In fact, we haven't reallytalked about this in the past on
(01:20):
all our podcasts, but this isprobably one of the most
important topics to talk aboutfunding your business and being
able to fund your business.
If you're selling on Amazon andyou're buying and selling
inventory and you're managingpeople and hiring people, the
costs can grow rapidly and alsotying up your cash in inventory
is a strategy all amongst itself, and now, with interest rates
(01:43):
so high, it's really hard tofinance this stuff and not lose
all the margin you're makingjust paying interest.
So with that, first of all, wewant to know a little bit more
about you.
Tell us about who you are, whatyou do in your Amazon and
financial planning journey.
Mark Willis (02:00):
Absolutely, and thanks again for having me on.
I was just hearing, as you werekind of laying up the ball
there, a meeting I had yesterdaywith a business owner in the
e-commerce space.
She said, mark, as soon as Ipay off the debt, I have to go
buy more inventory.
That gets me back into debt.
And then I sell that inventoryand I pay off the debt, only to
(02:20):
fall back down that staircaseagain.
So over and over and over again, there's this sick cycle where
the only person making profitoff the business is the banker,
but the only person taking therisk in the business is you, the
entrepreneur, unfortunately.
So, as a certified financialplanner, I've had the great
privilege of working with people, especially in the e-commerce
(02:40):
space, who are mostly interestedin cash flow, financial freedom
.
They want agency and control intheir life and they stumble
into the business and whetherthey are just getting started or
they're hitting seven or eightfigures or more, you know it
still can be a upward slog toget past the gatekeepers of true
wealth, which are the bankers.
Adam Shaffer (03:01):
I mean so true, and you know we have a business
and we're in the agency business, but we're also buying and
selling inventory and tying upthat cash with inventory and
growing.
If you want to grow, you got tobuy more.
So it's not just I buy it, Ipay off the debt and I buy more.
You got to buy even more ifyou're going to grow.
So it's hard and and a bunch ofthe sellers on Amazon are small
(03:23):
, you know, small mom and popbusinesses or small medium
businesses, and it's hard tofund all this.
So people wind up plateauingout.
But you have, like this secretsauce, this thing you call bank
on yourself.
Could you explain what thatmeans?
Because I don't know what itmeans?
I'd love to know more.
Mark Willis (03:42):
Well, get ready for the deep dive.
Get ready for grabbing the redpill.
Whatever metaphor you want touse here, I want love to know
more, sure.
Well, get ready for the deepdive, get ready for grabbing the
red pill whatever metaphor youwant to use here, I want the red
pill.
Adam Shaffer (03:48):
Give me the red pill man.
Mark Willis (03:50):
Yes, sir, yeah, this is not where I thought I'd
see my business, all right.
So when I got into financialplanning, it was 2009 and 10,
just the years right out andactually 2008,.
I got started with a taxprovider, tax CPA firm, and I
was helping them with helpingget their paperwork ready for
(04:10):
those who had fallen way behindon their taxes.
So my job was to kind of justprepare the paperwork for the
CPA and I was getting thepaperwork ready.
But hearing the phone calls wasjust, it was heartbreaking.
One these folks sometimes werein debt up to their eyeballs to
the IRS, and that's not a group,that's a bank with a gun,
basically.
So you want to watch out forthat.
(04:31):
But second, those that weren'tin debt with the IRS had plenty
of assets in the stock market.
And what do you remember aboutthe stock market and the real
estate market and the economy in2008, 9, 10, and beyond?
2008 was not a good time, man,not a good time.
So these phone calls I did notenvy my CPA that I worked for
because she was great at whatshe did, but she was making,
(04:54):
unfortunately, these phone callsthat were just heartbreaking.
I'm sorry, mr 63-year-oldclient, but I just lost you a
third of your life savings, or Ilost you half your life savings
or whatever it is.
So that was kind of the start.
I got in finance and I almostleft the industry.
As just a result, I was notinterested in making those phone
calls.
Fast forward a bit and I had myown student loan debt problem to
(05:15):
pay off.
It was student loan debt, notthe IRS, thank God, but the
student loan debt exceeded$100,000.
And again, no jobs, really.
Between my wife and I we hadseveral part-time jobs and such,
but it was just a hard push topay off that debt and all we had
ever been taught was thesnowball method of being
debt-free.
Snowball method and that's madepopular by some radio hosts and
(05:39):
YouTube channels and such likeDave Ramsey where essentially
you line up all your debts andthen you start tackling all of
them one at a time, one afterthe other, after the other,
after the other.
And that was sort of what Iguess was going to do until
someone a mentor, a professorand college professor of mine
(06:00):
came and visited us and lookedat me square in the eyes at him,
and said, mark, is it possiblethat Dave Ramsey could be wrong
about something and my littlemind exploded at that point.
That was the red pill, if youwill.
You know, and I chose to listento the rest of that
conversation.
I mean, what are you saying?
Dave Ramsey doesn't have acorner on truth, you know.
(06:21):
That was sort of what my closedmind was saying at that point.
Well, what did he tell you?
Well, he said well, is theresomething better than being
debt-free?
Which was all that I couldfocus on at that point.
And for the rest of theconversation he explained bank
on yourself to me.
Now, he's not a financialprofessional, he's a college
professor, but a great friend ofmine, and I knew he had my best
(06:43):
interest at heart.
So while I was very skeptical,I kept pushing through.
So let me explain, to answeryour question now.
What is Bank On Yourself?
Well, it's a little knownvariation of a financial asset
that's existed for now severalhundred years and in its
entirety of existence it's grownin a guaranteed fashion every
(07:04):
single year, no matter what thestock market's done, no matter
what the real estate market hasdone.
So every year it gets biggerand bigger and better results.
It's, of all things, cash value, dividend paying, whole life
insurance, life insurance Now,again, I didn't think that this
was a part of the financialuniverse that deserved any of my
(07:24):
attention.
All of my focus as I became aCFP was mostly from my friend
and from my exposure tofinancial infotainers.
(07:48):
I had to get a little moregrease under my wheels to figure
out if this thing was real ornot.
So I'll pause there for asecond.
Any feedback thought?
No, no, I'm really curious.
Adam Shaffer (07:59):
You're saying life insurance is something that
increases in value every year,no matter how the market's doing
or not.
But is it?
Well, tell us the story,because I'm going to say what
kind of insurance?
Because I have life insuranceand all I know is, after X
amount of years, they're goingto kick me out and charge me a
lot more for my next round,because I'm too old.
Mark Willis (08:18):
That's right.
Yeah, you know, when I firstheard the concept, I'm like well
, how do you build up wealth inan insurance contract?
It was sort of like sayingsaving money in your fire
insurance or your auto insurance.
It just didn't make sense, itdidn't compute.
And you're right.
Most life insurance sold todayis term life insurance.
Term means it's temporary.
(08:39):
Think of it almost like rentingan apartment.
You agree to a certain amountof time 10 years or 20 years and
then the landlord can kick youout or they can jack up the
rates on you, right?
If you're not healthy enough,they won't even renew it and you
just kick you out and there'sno equity being built up while
(09:00):
you're renting that apartment.
The same is true with terminsurance.
You're building no wealth orsavings in the contract and the
landlord, the insurance company,can kick you out or raise the
rent on you when the time is up.
Whole life insurance actuallyis altogether different.
It's a lot more like owning ahouse and this will all come
back to e-commerce here in justa minute.
So I promise this has a lot todo with your e-commerce business
(09:22):
.
Adam Shaffer (09:22):
I know I only have seven more years to live before
I'm going to lose my insurance,so I'm curious.
Keep on going.
Mark Willis (09:28):
Okay.
So in this case, a whole lifecontract and I'm going to talk
about it in terms of bank onyourself designed whole life,
because there's a lot of poorlydesigned whole life out there,
but there's some good ones outthere too.
And here it is in fourhopefully simple sentences.
Number one the cash value,which is the stuff you can use
(09:49):
while you're still alive.
There is a death benefit, butthe cash value of your policy
will increase in value,guaranteed, every single year,
and there's really nothing wecan do to stop it.
There's no market that can takeit away from you.
So that's the first thing.
It's guaranteed to grow.
Second, this is a liquid bucketof money that you have access to
for any purpose.
(10:09):
It could be for your businessneeds, it could be for your
personal needs.
You could send your child tocollege with it, you could fix
up your kitchen or you could buya bunch of inventory with your
cash value.
It's liquid cash and there's nopenalties, restrictions or
taxes to get the money out.
That's a big deal.
Third, it is life insurance, sowe're solving for that family
(10:34):
need there too.
Replacing your income,replacing your business's income
.
If you die, I'm guessing yourbusiness would not have a happy
day.
So we need to replace yourability to generate income for
the business.
So that's great for yourbusiness or for your family as
you need it.
So that's a solve right there.
And then the last sentence hereis you can use the policy like
(10:55):
a bank.
It's almost like a line ofcredit you set up for yourself
that never gets taken away fromyou self.
That never gets taken away fromyou.
So you can borrow against thecash in your policy and,
interestingly, you are incontrol, complete control of the
repayment plan to that policy.
So you could borrow 40 grand,let's say, or a hundred grand,
(11:21):
let's say, or 500 grand.
A gentleman just recently frommy one of my clients, just
borrowed $500,000.
No questions asked except howmuch do you want?
Where do you want us to send it?
And he used it for his case tobuy some real estate.
Now it could be just as easilyused for your Amazon business,
and a lot of our clients use itfor that.
You see how this allows him thento have control over repaying
(11:43):
that loan.
This allows him then to havecontrol over repaying that loan.
In fact, another client of oursjust used it for his Q4.
We're recording this in themiddle of Q4 here.
So he pulled a bunch of moneyfrom his policy as a loan bought
the inventory he needs for hise-commerce business in Q4 on
Amazon.
He sells a lot of really greatstuff and because he has no
pressure to repay that loan, hecan sell it at the higher price.
(12:07):
He's not under the gun of thecredit card or the Amazon
payables or Amazon, the lendingcompanies that charge loan shark
rates.
He's going to have a muchhigher margin than the gal or
the guy that is doing thefinancing the old fashioned way.
Adam Shaffer (12:23):
When you repay the loan that you take from your
whole life insurance, is thereinterest?
Mark Willis (12:28):
There is an interest that's charged on your
policy when you borrow yes.
So is that a good deal?
Let's do the math on thatreally quick.
Generally speaking, it's waybelow market rates that you
might find out there on a homeequity line of credit, or
certainly less than a creditcard.
Over six months to one yeartime span, your APR might be 2%,
(12:52):
roughly speaking, depends onwhich company it's with, of
course, but that's typical.
Now some people say well, mark,why should I pay interest on my
own money?
Why wouldn't I just pay cashfor the inventory?
And here's where things getreally interesting.
So, adam, when you access thecash in your savings account
let's say you had 50,000 bucksin your savings account and you
(13:14):
withdraw that money to go buyinventory how much interest are
you earning in the bank?
Adam Shaffer (13:20):
It's gone.
Nothing it's gone.
Mark Willis (13:22):
Yeah, yeah.
Of course, when you access thepolicy vis-a-vis the policy loan
, when you grab 50 grand fromyour policy as a loan, the cash
value in your policy willcontinue to grow and earn
interest as if you had nottouched a dime of the money.
Adam Shaffer (13:39):
So you're earning on the balance of the policy.
Mark Willis (13:41):
Correct.
Yeah, if you had 50 grand inthere, borrow out 50, it's still
earning on the full 50, likeyou had not touched the money,
and your money's in yourinventory being sold online.
So this is where your money cando two things at once.
So I'm an insurance.
Adam Shaffer (13:57):
idiot, then, because why am I buying term?
I pay whatever month I pay.
I hate it, but I do it and Iknow it's going to eventually
end and I'm going to get jackedup because I'm going to be a lot
older.
How do you buy whole lifeinsurance?
Is it the same broker that yougo to?
Is it the same companies?
Mark Willis (14:12):
And what's the cost ?
That's actually one of thebiggest risks of this whole
thing.
So you're exactly right.
You're doing what we're alltold to do.
I mean, I bought my terminsurance just like a good
little soldier was supposed todo.
I listened to every word DaveRamsey would say from his radio
show.
Nothing against him, he's justtrying his best.
His greatest sponsor is a termlife insurance company.
(14:33):
So go figure, 98% of terminsurance never pays a claim.
So that's a very expensiveproduct right there, when you
know that only 2% of yourcustomers are ever going to reap
a benefit.
The rest are just free incometo the insurance companies.
(14:54):
The process is the same.
You have a meeting with afinancial professional, an
insurance agent.
You go through a medical exam.
You get your policy.
That's typical how you get awhole life policy as well.
Here's where the risk is.
Most insurance agents have noidea how to design these things
properly.
In fact, I looked it up a whileback there were roughly 400,000
(15:18):
life insurance agents in theUnited States.
400,000.
That's about one for every 800Americans or so.
If there were 400,000 heartsurgeons, would you feel
comfortable going to just any ofthem?
Adam Shaffer (15:32):
No, but I'd probably get an appointment.
It takes forever to get anappointment, but no, I get you,
man, I get it.
Mark Willis (15:37):
So you want to make sure whoever you work with was
certified and authorized to dothese things properly.
It's kind of like I'm about totake a flight here pretty soon,
next week.
I want to make sure my planewas engineered properly.
I want to make sure the pilotsknow how to run that machine
properly.
All I care about is getting onmy seat, finding my seat, you
(16:00):
know, and just chilling out fora few hours while I fly safely
to my destination.
However, somebody had to do alot of thinking to design the
thing properly and has to keepan eye on things to get me from
point A to point B.
It's kind of like that withbank on yourself.
If it's not a bank on yourself,professional, who's running the
show, who's building that thingfor you, the policy could lose
(16:23):
a lot of ground in terms ofgrowth.
You could actually lose thecash value.
It could become a taxableendowment.
You could pay a lot of fees oreven see the policy lapse if you
don't see this thing throughfrom start to finish with
someone who's been authorized todesign this thing properly.
Adam Shaffer (16:39):
So there are certified bank on yourself,
agents or financialprofessionals.
Mark Willis (16:46):
Yeah, that's right.
It's the only authorization andcertification program in this
little niche in the industry.
So I'm a certified financialplanner.
That took me three years to getthat.
It took me another three yearsto really become a certified
bank on yourself professionalwith similar, you know, focus
and acumen and ability to do it.
I'm not tooting my own horn,but that's the idea.
(17:08):
You want to work with someonewho's been able to do go through
those rigors and is someoneelse's kind of looking over
their shoulder to make surethey're designing the thing
right for you.
That's the biggest risk in thiswhole project.
Adam Shaffer (17:24):
And we talked about term.
Mark Willis (17:25):
There's a term it ends.
Does the whole life end, or itdoesn't?
It's right in the name.
Adam Shaffer (17:27):
It's for your whole life, the whole life.
Mark Willis (17:28):
Yeah, so it's meant to go for your entire life, and
here's what's kind of coolabout that you don't have to pay
for it for the rest of yourlife.
We have folks that fund it forjust a couple of years, one year
, even possibly five, 10 years.
Whenever you're done funding it, it's a conversation with your
(17:50):
advisor and then a simple sheetof paper to the insurance
company that says please pay upmy policy.
Your cash values still growsguaranteed for the rest of your
life.
And for a lot of our clientsthey begin to take spoonfuls of
that money out as a retirementincome stream.
Now I just met with a coupleyesterday and they're able to
pull $101,000 a year incometax-free out of their life
(18:12):
insurance from age 65 to age 95.
That's a six-figure tax-freestream of income out of
something as boring and asmisunderstood as whole life
insurance, on something asboring and as misunderstood as
whole life insurance.
You know, I don't know too many401ks that can do that.
Adam Shaffer (18:26):
What are you paying in?
Like I guess you know I want amillion dollar policy.
What do you have to pay?
Mark Willis (18:31):
It depends on your age and your health and actually
the way you ask that questionis focused.
It's a great question and I'dhave to run a calculator to find
out for sure.
Adam, for each person your ageis going to be different.
But that's actually the otherside of the seesaw.
The death benefit at a millionbucks, that's fine, that's going
to be.
But I would more importantlyask how much do you feel
(18:54):
comfortable saving without itbeing a burden, and where can we
reposition your existingsavings or brokerage accounts or
other existing assets?
Could we pour those dollars in?
And this is the important parthow can I squeeze down the size
of your death benefit to be assmall as possible?
Rather than giving you anexpensive $1 million death
(19:16):
benefit, could we find a way tobring your death benefit down to
400 grand or something, so thatyou have that much more cash
value?
Eight to 40 times is typical.
Eight to 40 times more cash.
To design the policies this way.
If we shrink your death benefitdown, it's like a seesaw.
Either we're going to have asmall death benefit, big cash
(19:36):
value, or the old fashioned wayis to have a big death benefit
and almost no cash value at all.
Remember, for those listeningand just learning the cash value
.
It's the juice, it's the stuffyou're able to enjoy and spend
and use like a bank while you'realive, which is, in my opinion,
the most fun time to spendmoney is while.
Adam Shaffer (19:55):
I'm alive.
It's harder when you're dead,sure, but are you paying this
thing monthly?
Mark Willis (20:02):
Great question.
You may pay monthly.
You may pay monthly, you maypay annually, you can pay once a
year, whenever you're ready,and, as I mentioned earlier, you
might even just have a largelump sum to just drop that in
and that's it.
And then that's it, yep.
Adam Shaffer (20:15):
Okay, yep, so now, if I'm an Amazon seller, I'm a
small business.
Walk me through it.
So the bank on yourself.
So this is obviously foranybody in business or for
anybody anywhere, but I'm anAmazon seller.
I need to fund inventory, Ineed to fund payroll, I need to
grow my business.
So walk me through the steps.
(20:36):
Hey, mark, I'm an Amazon seller.
I need some money.
I'm going to the bank.
It's not that easy to get theinterest rate's really high.
What do I do?
Tell me about this bank onyourself.
Mark Willis (20:48):
Yeah Well, first thing we do is just learn more
about what the individual istrying to do and where they're
at today financially.
When I meet with most folks,we'll have a one-on-one advisory
consultation before we jump tobank on yourself or any other
conclusions.
I just want to hear whatthey're trying to do.
Sometimes bank on yourself isgreat, sometimes it's not.
(21:09):
We are a full financial firm,so we'll look at that soup to
nuts following the CFP processfirst.
Oftentimes people are sitting on401k money, a brokerage account
.
Their brother got them intocrypto, they got a couple of
extra, whatever savings accounts.
So first and foremost, we say,all right, is the money you have
doing what you want it to do?
And most of the time they sayno or I don't know.
(21:32):
And so we really have aconversation around what do you
want your money doing for you?
A 401k, just for sake of example, is not liquid.
You can't access it untilyou're 60, 59 and a half.
It's not guaranteed.
There are no guarantees on a401k.
The only guarantee is that thegovernment's going to get theirs
and that the advisor who ismanaging that 401k is going to
(21:55):
get his or hers their fee.
That is.
So the 401k, I think fails thetest of any entrepreneur just
right there.
So the 401k, I think, fails thetest of any entrepreneur just
right there.
Plus, there's no ability to usethe money like a bank right,
and banks are notoriously themost profitable businesses in
town.
So back to your question.
Once we've had that initialconversation and it's determined
(22:16):
, yeah, bank on yourself wouldbe great for this situation,
then we put some numberstogether and once I've shown the
numbers again, maybe it's 500bucks a month or maybe it's 500
grand a year, and both of thoseare policies that we've done for
clients in the last six months.
You can design policies at anysize, really to spec.
(22:37):
You want them custom designed,and then we go through an
application process.
That application process isreally simple, it's free.
You go through an applicationprocess.
That application process isreally simple, it's free.
You go through a medical exam.
They make sure that it's a goodfit for you and also the
insurance company.
The insurance company needs tofeel good about bringing you on
board as one of theirliabilities.
You might see it that way.
Once they've said yes to you,then you can start your policy.
(23:01):
And, just briefly, once youstart the policy, you fund it
and usually within about twoweeks, you have liquid,
accessible cash value.
You can log into online and seeit, you can request a loan from
it and, literally again, itprobably takes you two to four
minutes to click on this button,click on that button and have
that money.
Begin the process of comingback to your bank account, and
(23:24):
that process hitting your bankaccount might only be three to
five business days.
So usually folks see this as asouped-up, supercharged savings
account with a death benefit toboot.
Adam Shaffer (23:35):
And so I would fund it.
To say, I funded a $400,000policy, but I funded it
initially with $50,000, or say$100,000.
The $100,000 would be availableto me, or more.
Mark Willis (23:46):
Great question, you know again, depending on age,
and health and and do you planto ever add more to it?
Ever again?
Adam Shaffer (23:51):
Yeah, I'm going to , I'm going to pay, but I
started it with a hundred.
Mark Willis (23:54):
Sure, then you might have some.
You'll have less than a hundredthousand because you bought
that $400,000 policy, but if wedesigned it right, you might
have somewhere between 60% and95% of your cash value liquid
right away.
Adam Shaffer (24:09):
And if I want to buy inventory with it, is it
hard to get the money out?
Mark Willis (24:12):
No, literally you can go online and again within a
minute or two be clicking somebuttons, say hey, yes, I want
this money you can wire moneyfrom the account like a bank
account Exactly, it's directdeposit right into your bank
account.
You can buy your money from theaccount like a bank account
Exactly, it's direct depositright into your bank account.
It's not as liquid as a savingsaccount, though I don't treat
this like a debit.
You don't get a debit card withit.
You can't use it at Home Depotto swipe for your lumber.
Adam Shaffer (24:36):
It's about three to five business days to get the
money direct deposited intoyour bank account.
So the benefits of thiscompared to me getting a bank
line.
Well, first of all, it's my ownmoney, so if you don't have any
money to put in, how do you doit?
Mark Willis (24:46):
That's right, you can't you really have to be
thinking about this as your ownmoney.
So start where you can.
A lot of folks start with hey,Mark, I can't replace my
inventory purchase, I can'treplace my typical line of
credit that I use for inventorythis Christmas season.
But I'm going to start mypolicy now at whatever 400 bucks
(25:08):
a month, or a thousand bucks amonth or whatever they can
afford this year.
And they feather the clutch, touse an old car metaphor.
Right, you can kind of slowlymove your way into this.
So over time you're no longerfeeding off of the trough of the
banks which is notoriouslyready to give you money when you
don't need it and then takeaway that line of credit just
(25:30):
when you need it the most.
So, slowly and surely, moveaway from that banking system.
Sometimes it's overnight.
If you got some money in asavings account, we can get it
done right away, meaninginstantly.
Or sometimes it takes a fewyears, but either way, it took
my wife and I four years to payoff our student loans, but we
were so glad to do it.
Rather than paying it off theold-fashioned way, we used our
(25:52):
policy borrowed against our cashvalue, cleared our debts one at
a time bought back our debtfrom the bankers and Sally Mae
and all those crooks and we nowpaid ourselves back to get those
loans paid off to ourselves.
Adam Shaffer (26:07):
So where's the snag when?
Mark Willis (26:09):
can you go wrong?
Well, again, if you're on thewrong airplane or if your pilot
is a clown, that's going to be aproblem.
That's the biggest risk.
Adam Shaffer (26:17):
But outside of the inexperienced folks, they're
dealing with a real, certifiedprofessional.
What could go wrong?
Mark Willis (26:24):
Yeah, if you fully funded your policy and you're
being an honest banker withyourself, it's very hard to
wreck this car.
If you don't fully fund yourpolicy, meaning if you're just
avoiding our calls and you'renot fully funding your policy,
if you're running your gas onempty all the time, and if
(26:45):
you're pulling money out of thepolicy as a loan and you don't
repay yourself, if you'restealing from your own bank,
that will ultimately lapse thepolicy.
Now what does that mean?
It just means the death benefitis gone and your loan is also
gone is gone and your loan isalso gone.
(27:06):
So no loan to have to repay.
Right, you could face some taxconsequences.
If there are gains, we try tosuppress that on purpose in the
first few years to get you upand running.
Now one more thing, and thenI'll hush and get your thoughts.
Let's say that you have aterrible year in business.
Everything's just lights outman, personal emergencies,
business emergencies.
Let's say you've been honestwith yourself and you paid back
(27:27):
your loans.
Let's say you've got $75,000 ofcash value at this point, for
example, and let's say you couldnot pay your premium.
Let's say the premium was 10grand a year, for example, and
you had 75 grand of cash valueand you had no inflows.
You had no income at all.
Adam, where could we possiblypull some money?
(27:48):
$75,000 cash value.
We need 10 grand to pay thepremium and maybe another 30
grand to cover our groceries forthe year or whatever.
Couldn't we pull from thepolicy to cover our expenses,
even the premium?
Adam Shaffer (28:03):
You bet, so you could pay the premium by
borrowing.
To pay the premium you can?
Oh, okay.
Mark Willis (28:07):
I didn't get that, okay yeah, which isn't that cool
because, while it's notsomething you want to make a
habit of doing, when you do this, your policy remember is still
earning interest and growing asif you had not touched the money
.
So, when you pay yourself backand pay the loan off, your
policy has been growing as ifyou hadn't skipped a beat toward
(28:27):
your retirement future.
Adam Shaffer (28:28):
That's amazing.
So you could borrow to pay thenext payment.
That's amazing.
Mark Willis (28:32):
Yeah, yeah.
So how can we mess this upAgain the advisor, if he or she
doesn't know what he's doing,building it incorrectly or with
the wrong insurance company?
I've met too many people whosaid, oh yeah, my advisor said
he could do this for me, noproblem, and then I get a
statement of what they've gotten.
I'm like jaw dropped.
This is a nightmare.
So that's a problem, and we canbe our own worst enemy If we
(28:55):
don't have a strategy forrepaying.
This is why it's reallyimportant for our clients at
Lake Growth.
We do regular onboardingmeetings, training meetings.
We do regular six-month reviewfinancial planning sessions with
our clients.
We want to make sure that theygo all the way from when I meet
them, all the way to dead andpast dead, so that they can have
(29:15):
a great rest of their excusethe pun, but the rest of their
whole life.
Adam Shaffer (29:21):
So this could work for anybody.
I see this as a mass marketkind of thing.
But why Amazon sellers?
Why e-commerce?
Why do you feel like and whyare you getting so much demand
from that particular area?
Mark Willis (29:33):
Like and why are you getting so much demand from
that particular area?
Well, you know we did write thebook how to Be an Amazon Legend
and Fire your Banker with DannyStock, who's a dear friend and
client, and I think the tool ofwhole life insurance fits like a
lock and key to the e-commercespace.
You probably can think of evenmore applications than I can.
You know, like when would ithelp?
(29:54):
How might it help anye-commerce business owner the
most to have guaranteed liquidcapital for any reason?
How might that help theirbusiness?
I could probably think of a fewreasons.
You might be able to think of afew, yeah, so could we become
more profitable?
Could we become morecompetitive?
Might we be creating,essentially a golden parachute
(30:18):
for every business entrepreneurthat sets this up?
I don't know about you, butwhen I started my business and
most e-commerce businesses, Ithink, are the same we're not
just handed a retirement accountus are so preparing for that
final moment when we have tocash in our chips.
Work-wise, having a giant pileof cash value in your policy
(30:41):
could be the golden parachutethat most entrepreneurs wish
they had tell us about it.
Adam Shaffer (30:50):
It's how to be an Amazon legend and fire your
banker.
I love the title, but what wasthe impetus, what was the reason
you wrote that book?
And it was really.
It's an Amazon-focused book.
Give us some takeaways.
Mark Willis (31:03):
Sure, I mean, it certainly could be used with
Walmartcom or eBay or anythingelse.
Of course, any kind ofe-commerce business that you
might have could be even notproduct.
It could be a service-basedonline business.
But we wrote the book because Ifelt like folks need and it's a
simple enough book.
You could probably read it on ashort airplane flight maybe 45
minutes to an hour is all itmight take to read through it
(31:23):
and I'd be happy to give it outas a copy to anyone who reaches
out to me, and we'll give you awebsite at the end.
It's kickstartwithmarkcom.
If you want to go check thatout and get a copy of that book,
kickstartwithmarkcom.
But we wrote the book because wereally wanted to make sure
e-commerce business owners which, honestly, entrepreneurs, I
believe are really the fuse inthis country.
(31:47):
I think it's what could lightup a bright and beautiful future
, or it could be the disasterthat undoes the country that I
love so much.
So I love working with businessowners.
I love working withentrepreneurs.
The majority of our clients arereal estate investors and
business owners.
Most CFPs, like myself, aregoing to point their clients
(32:09):
toward things that theyunderstand the stock market, for
the most part because they cancharge a fee on that investment
account, but understand thestock market for the most part
because they can charge a fee onthat investment account.
But I believe the stock markettakes energy and power away from
the entrepreneur.
Think about it when you'rebuying Apple stock, you're
buying someone else's dream andhelping their future.
(32:29):
When you have a whole lifepolicy that you're borrowing
against to pour into yourbusiness, you're investing in
your own future, and that, to me, just gets me out of bed in the
morning.
I love the idea of helpingbusinesses reach their goals and
dreams without taking a bunchof unnecessary risk.
So that's why we wrote the bookand why we wrote it for the
(32:50):
e-commerce crowd why we wrote itfor the e-commerce crowd.
Adam Shaffer (32:53):
And is it hard?
Are you finding it's hard forthe people you meet to get their
heads around this, like they'relike, okay, that's great, but
they just say I'm going to keepon doing what I'm doing, or is
it an easy sell?
Mark Willis (33:04):
Well, it's sorry to keep using the matrix metaphor,
but once folks really get this,they can't un-get it.
You know it's hard for them tounsee or unhear this idea.
Why would I continue to paycash for my cars, even If I know
that I could use my policy tobuy my cars?
Why would I continue to paycash for my tax bill or my kid's
(33:25):
college tuition or any othermajor, my kitchen remodel, any
other major expense?
Once it's heard, it's hard tounhear.
So I have very few people whojust say, eh, I'm good or it
doesn't really.
There's a very fierce dividingline.
Now some people would say, well, mark, I could get a better
rate of return if I chase thelatest meme stock.
(33:47):
I'll just put my hope andprayers on the latest, you know,
gamestop or whatever the latestone is, and I wish them the
very best.
You know this is whole lifeinsurance is not an investment.
Yeah, you're right, that's aform of gambling or speculation,
and certainly the stock marketcould give you a higher rate of
(34:10):
return some years, but mostpeople realize that markets come
down too.
So for the most part, I'd sayit's not that hard to really
explore this option with folks.
In fact, most people get itthat, yeah, somehow the banks
have been doing this to me foryears, mark, I wondered how they
(34:32):
did it.
This is a simple way that I cando what banks have done to me,
but now I can profit from itwithout having to be an FDIC
insured bank charter with $100million in the bank or whatever.
They can be their own source offinancing and for them, that's
all it takes to wrap their headaround this.
It's not that complicated.
(34:52):
It's just learning to thinkdifferently and to use our
financial tools at our disposalin a way that may not have been
told to us by financialinfotainers.
Adam Shaffer (35:03):
So it's a good time of year to start planning,
right.
You have the new year comingand you have the fourth quarter,
the holiday season right now sowe're all kind of loading up on
inventory and we'll have to payit in 30 or 60 days and so that
payment could be due and youwant to start your off strong.
So I mean, I think everybodylistening and beyond should take
(35:26):
a look at this.
This is a really interestingoption that I never, ever even
knew existed until we just spokeabout it.
Now I better read your book,man.
This is really good stuff.
I do appreciate it.
What are we not talking about?
What other tidbits you want togive to the team?
Mark Willis (35:42):
Oh sure, well, so to your point.
Yeah, you're right, it's Q4 aswe're recording this and as it's
being played.
But there's a guy, he's aclient of mine.
He sells hot sauce online.
That's his business and he'sgot a private label and
everything.
So he was using credit cardsand other things that would have
to be paid off relativelyquickly and he would sell most
(36:02):
of his product right nowChristmas presents and that sort
of thing.
When he set up his policy, hecould only set aside a couple
thousand bucks a year.
That's what he could do atfirst, but he started using the
policy to buy his inventory andover the next three to four
years he completely replaced hisline of credit and because of
that he was able to have hisprofit margins triple over what
(36:24):
he was doing and that allowedhim to pour more money into new
policies.
So now he has several bank onyour self-designed policies on
himself and his wife and hisadult children who work in the
business with him and, what'seven more interesting, he's
become the banker for hiscompetitors.
So he's kind of in the worldwith other guys and gals that
(36:45):
sell online and they're like andhe mentions to them oh yeah,
I'm using my own money to lendand lend myself, and they're
like oh, wait a minute, can Iborrow some money?
So now he's lending money tohis friendly competitors and
they're paying him a cashflow.
That's a stream of income fromwho was once, maybe, his
(37:06):
competitor.
So don't forget if you can bankon yourself, other people might
be able to bank on you as well.
Just do your due diligence.
Don't lend to folks who have noright to pay you back, but
that's a thing that I think moreand more e-commerce business
owners should find out.
We're already in the bankingbusiness.
We're just sitting on the wrongside of the banker's desk,
that's for sure.
Adam Shaffer (37:26):
Amen to that, so final words to the audience.
Mark Willis (37:30):
Oh, just keep listening.
Leave this Amazon.
I mean just this.
This podcast is awesome.
Please leave the planet Amazona five-star review.
They do a great job and gettingset up for the show has been a
lot of fun.
So thanks again, Adam, forhaving me on.
And again, how do people reachyou.
You can go tokickstartwithmarkcom.
Kickstartwithmark with dot com,kickstart with Mark with a K
(38:00):
dot com, you'll get a free copyof the book how to Be an Amazon
Legend and Fire your Banker.
Just mention Planet Amazon inthe agenda of the 15-minute
phone strategy session thatwe'll set up for you.
That's kickstartwithmarkcom.
We'll go over any questionsyou've had about this episode
and help you learn more abouthow to bank on yourself.
Adam Shaffer (38:10):
That is awesome.
Well, thank you for joining.
This is just a great topic.
We're going to have you back on, so thank you very much.
Mark Willis (38:16):
My pleasure, thank you.
Announcement (38:18):
Thank you for watching another episode of the
Planet Amazon podcast, where wetalk all things Amazon.
If you want to learn about howto accelerate your sales on
Amazon, visit Phelps United'swebsite at phelpsunitedcom.
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