Episode Summary:
Many entrepreneurs focus intensely on growing their businesses while neglecting personal financial security. Paul Cook, a veteran insurance professional with decades of experience, reveals how life insurance can serve as more than just death benefit protection - it can provide tax-free retirement income, emergency liquidity, and protection from market volatility. Drawing from real-world stories of families he's helped through tragedies and business owners who've faced unexpected challenges, Paul demonstrates how proper financial protection strategies can make the difference between financial security and disaster.
About the Guest:
- Paul Cook began his career with Metropolitan Life in West Virginia, working with anyone who would meet with him. Over his decades-long career, he's specialized in helping business owners and entrepreneurs who wear multiple hats - managing their businesses, employees, and families. Paul has delivered both life insurance benefits to grieving families and witnessed the consequences when people were inadequately protected.
Key Concepts Explained:
Life Insurance as Wealth Building: Paul advocates viewing life insurance beyond just death benefits. Properly structured policies can provide tax-free retirement income, emergency access to cash, and wealth accumulation without market risk. Unlike traditional retirement accounts, life insurance offers flexibility in when and how much to withdraw without government penalties.
Tax Efficiency vs. Tax Deferral: Paul contrasts traditional retirement planning (401(k)s, IRAs) with life insurance strategies. While traditional accounts offer immediate tax deductions, they create future tax liabilities on larger sums. Life insurance provides tax-free growth and distributions, giving policyholders more control.
Business Owner Vulnerabilities: Paul emphasizes that business owners often have their entire financial identity tied to their companies. External factors like competition, tariffs, or mismanagement can destroy business value. Life insurance provides independent wealth accumulation unencumbered by business risks.
Professional Persistence: Paul's approach involves being "professionally patient" - educating clients about risks and opportunities without harassment or pressure. He uses real stories to illustrate consequences of both action and inaction.
Practical Applications:
Term Insurance Foundation: For those hesitant about permanent coverage, Paul recommends starting with inexpensive term insurance while healthy, with conversion options for future permanent coverage without medical underwriting.
Business Succession Planning: Life insurance can fund buy-sell agreements, providing liquidity when business partners die or retire. Paul shares a tragic example of a family business that spent $70,000 in legal fees that could have been avoided with proper planning.
Estate Liquidity: Life insurance provides immediate cash to pay estate taxes and preserve family businesses and assets that might otherwise need to be sold.
Real-World Impact Stories:
Paul shares powerful examples: a plumber who initially resisted buying coverage but died of a heart attack one year later; a divorced nurse whose policy provided education funds when she died in a house fire; and a business owner who reduced coverage six months before dying.
Connect with Paul Cook:
Email: paul@paulhcook.com
Book: "The Wealth Builder" available by request
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
As entrepreneurs and business owners, we're often so
focused on growing our companiesthat we neglect our personal
financial security.
What if there were financialtools hiding in plain sight that
could give you tax-free income,emergency liquidity and
protection from marketvolatility?
On today's episode of theInfluential Advisor podcast, I'm
(00:22):
joined by Paul Cook, author ofthe Wealth Builder and a
financial strategist who spentdecades helping entrepreneurs
and high achievers createfinancial security independent
of their businesses.
Get ready to discover wealthbuilding secrets that could
financial future.
Paul, I want to welcome you tothe Influential Advisor Show and
(00:52):
I've been excited to have thisinterview with you.
You and I have known each othernow for, I want to say, five or
six years it's been oh yeah,yeah and have had a chance to
get to know each other, andyou've spent your career in the
financial services industry and,for our audience, I'd love to
have you just share a little bitabout your background and what
led you from where you startedto where you are today.
Speaker 2 (01:14):
A myriad of factors.
I started out in West Virginiawith Metropolitan Life, working
with anybody and everybody thatI could sit down with.
You had to make a livingbecause it was tough when you
first get started.
You got to stay active and yougot to stay busy and you got to
be a little bit successful justso you can stay in the business.
I worked very diligently andworked hard and long hours.
I've always been glad that I'vedone what I've done because I
(01:37):
have had a lot of fulfillmentand a lot of satisfaction,
particularly when people areable to utilize my products and
do so in a way that there may bea loss of life because I do
sell life insurance but therewas an opportunity there to hand
somebody a check because I hadcalled on them and worked with
them and the thank yous werepretty significant and I felt
(01:58):
good to be part of that part, tohelp people maintain their
standard of living and continueon with education and paying off
mortgages and things of thatnature.
I have felt very fulfilled inthis business and I've enjoyed
every moment of it.
Speaker 1 (02:11):
Actually, so big question for you is you we help
you publish your book.
I want to say it's been about ayear now.
Speaker 2 (02:21):
Yes, a little over a year, a little over a year.
Speaker 1 (02:23):
Yeah, so what motivated you to write your book
, which is called the WealthBuilder I like the title and who
did you specifically gear thebook?
Speaker 2 (02:33):
to.
I geared it to business owners,entrepreneurs and high
achievers.
That's on the cover of the book.
I've directed the book to andwith emphasis toward them,
particularly business owners.
I've always worked withbusiness owners because they
wear so many hats.
They're a business owner.
They're worried about getting aproduct out or service out.
They're worried about employees.
They also typically have afamily to take care of.
(02:53):
So there's a lot of differentareas in which I can work with
these individuals, and a lot oftimes they're so busy, focused
on their business, that theydon't think about these other
things.
I call them ancillary things,ancillary to their business, but
very important.
And so that's basically how Igot started with that and the
primary reason that I wrote thebook.
I didn't think I had it in me,but you encouraged me.
(03:15):
You asked me a few questionsand I thought, yeah, I could put
that down in black and white.
I'm glad I did.
I've read my book several times, maybe for motivation.
Basically, it just encouragesme also and it reminds me of the
things that I've done in mycareer that you forget about.
You've been at it as long as Ihave.
I'm embarrassed to say how longthere's things you forget about
(03:37):
, good and bad, and so it's goodto be reminded in the book
afforded me that personalexperience Very cool.
Speaker 1 (03:44):
What's been the reaction from the people that
have read the book?
Speaker 2 (03:48):
Very positive and I've had several say to me there
are things you mentioned in thebook I didn't think about.
I never thought that wouldapply to me.
Or the big one is I didn't knowyou could do that with life
insurance.
I like that one.
Tell me more.
Yeah, people will say lifeinsurance is a death benefit.
I like that one.
Tell me more.
Yeah, people will say lifeinsurance is a death benefit.
You got to die to collect.
(04:08):
It's like automobile insuranceIf you don't wreck your car, you
don't collect anything.
And you got to die to collect.
And I've had people say to mePaul, I mean, somebody else is
going to get that money.
I'm not going to benefit fromit.
What if we can structure it insuch a way that you benefit?
To me, that's icing on the cake.
Oftentimes I say you have yourcake and eat it too.
And you can do that with lifeinsurance if you get into the
(04:29):
details of it.
Speaker 1 (04:30):
Yeah, fantastic.
And that begs the question iswhy does life insurance
sometimes get a bad rap?
Speaker 2 (04:36):
Probably because there are those in the financial
services industry that thinkthere's better strategies than
life insurance and the best wayto promote their strategies is
to be critical of life insurance.
And I won't say that I'm notcritical of certain aspects of
the financial services industry,but not against products
necessarily, and maybe againstproducts, but also against
(04:58):
Because a lot of times lifeinsurance, if you've got an IRA,
you get a tax deduction on yourcontribution.
The money grows, tax deferred,typically.
That's as far as theconversation goes.
They don't talk about whathappens when they start pulling
the money out of retirement,because Uncle Sam's going to get
a piece of that and the factthat Uncle Sam give you that tax
deduction means Uncle Samcontrols it.
(05:18):
They tell you if you take itout too early, they're going to
punish you.
If you don't take it out whenthey want you to take it out,
they're going to punish you.
So you're not in charge.
I want my clients to be incharge of their money and I
afford them that opportunitythrough the strategies that I
can implement.
Speaker 1 (05:32):
That's awesome, I guess.
What I'm curious to know isyou've been in the insurance
business for your career.
You've spent your career in theinsurance business.
What has you so passionateabout what it is that you do in
helping people with insurance?
Speaker 2 (05:50):
I think the biggest thing is helping people to
understand the advantages andwhat the pluses are, because a
lot of times they don't.
I guess there's a bit of aneducational process occurs
because I want people tounderstand okay, you buy a life
insurance contract.
If I die prematurely, there's abenefit that's going to be paid
to my widow or to my businesspartner.
But, if I live to retirement,then there's some other avenues
(06:13):
there that I can benefit fromand to me that just excites me
to have the opportunity to dothat with people and to do it
for people, particularly if theydon't understand insurance to
start with, and a lot of timespeople don't, People just don't.
I've never had anybody come inand say, Paul, I've been
thinking about dying, I want tobuy some life insurance.
That's never happened to me Allthe years I've been in a
(06:33):
business it's never happened.
But nevertheless peopleunderstand what life insurance
is.
I think.
Basically they just don'tunderstand all the nuances of it
and all the advantages and thepluses that life insurance can
have.
Speaker 1 (06:47):
Very cool.
Along those lines, in your bookthe Wealth Builder, you share a
number of powerful storiesabout family facing those
unexpected tragedies.
Right To your point, we're allgoing to die at some point,
right?
We just don't know when.
And so how have theseexperiences shaped your approach
to what I would describe asfinancial protection strategies?
Speaker 2 (07:09):
Probably the best thing I could say about what
I've done is to be persistent.
A lot of times people youtypically will hear objections,
people who object to doing whatyou think they should do.
I had a plumber, for example.
I sat down with a plumber andhis wife and she sat on one end
of the couch.
He sat on the other the wholetime.
(07:30):
She had her arms folded and hewould say dear, what do you
think?
And she'd say it's up to you.
The guy was really puttingpressure on himself but he kept
telling me it seems like anawful lot of premium.
I said yes, sir, it is.
But I said imagine you not here.
What kind of financial stressthat would put on the family
because you're here and you canpay the premium now and every
(07:51):
once in a while he would sayit's a lot of premium.
I said, well, you're workingand it's difficult to pay.
Imagine what it's like ifyou're not here.
So anyway, he ended up buying acontract.
A year later the agent becauseI was in management at that
point, the agent that was withme went back, sold him an
additional contract.
The policy got approved and putin the mail to the agent to
deliver to the client.
Speaker 1 (08:10):
And before that happened.
Speaker 2 (08:11):
The boy dropped dead with a heart attack.
So I was always appreciative ofmy effort.
I'm glad the guy took action,and I could have very well have
said, yeah, it is a lot ofpremium, maybe I can check back
with you later on and see ifthings are better.
And that later on may neverhappen, and so I was always glad
(08:32):
of that.
I also had a nurse who bought apolicy.
She was divorced with a12-year-old daughter and she
wanted her daughter to havemoney for education if something
happened to her prematurely.
A year later her house caughton fire and the lady perished.
The daughter got out, but themama didn't, and I was able to
deliver a check in thatsituation, and so I felt these
are sad situations, but thankgoodness I was able to come in
(08:53):
with a check and make things alittle easier for the survivors
than they would have been.
Speaker 1 (08:57):
Yeah, and I can imagine throughout your career
you've had any number of thosecircumstances where you really
see the impact that beingproperly protected can have it
on family?
Speaker 2 (09:06):
Yes, definitely, and then I've seen some where they
were inadequately protected.
To me, that's the stressingpart.
I had a situation where afellow got killed in a car wreck
and he had a $1,300,000 deathbenefit in his life insurance
and six months prior to that hiswife came into the office and
said we need to cut this premiumback, I need to reduce the
(09:28):
death benefit.
We just can't afford it, andwhen they really could, it was a
matter of priorities for them,and so we eliminated the term
part, which was a million, andthe $300,000 was the permanent
part, and that's the check Idelivered to her when he got
killed was the $300,000.
So I felt real bad about it,but in fact I encouraged her to
(09:49):
put it off for another monthbefore they actually made the
decision, and she did, but shestill came back and made it.
So, again, that was a situationthat I handed a check, but it
wasn't near what it could havebeen.
Speaker 1 (09:59):
So you're in the business of really helping
people think longer term and setpriorities for their life and
their family?
Yes, most definitely You'reprofessionally persistent in
getting out the message really,so that you can benefit and
bless the people that you workwith.
That's what I'm hearing.
Speaker 2 (10:17):
Yeah, that's my objective.
One of the things, too thatI've encountered several times,
many times somebody wants towait, Okay.
Several times, many timessomebody wants to wait, Okay,
Say, and maybe I'm talking tothem about establishing a
permanent plan where they canaccumulate cash and help
supplement retirement benefits,and they say I want to wait.
So my objective is which, atthat point, typically, let's go
(10:41):
ahead and get the term insuranceissued.
Term insurance is realinexpensive and then later on,
when your situation is differentor improved or better, a frame
of mind has changed Now that wecan convert that term to the
permanent plan without goingthrough medical underwriting.
So let's go ahead while you'rehealthy, because this is as
(11:01):
healthy as you're ever going tobe, is right now, because it's
downhill from here for everybody, and so let's go ahead and get
the term issued and then you canmake a decision later as to
what you want to do goingforward in terms of accumulating
money.
To me and when people, that'svery frustrating for me when
people say at that point no,I'll just wait a little.
While I've had people wait.
(11:22):
I had one guy came down withulcerative colitis and almost
died after an interview likethat.
I've had several situations.
I've had heart attacks tohappen.
I've had people come down withcancer.
Those are the frustrating onesthat I feel like it's so easy to
have made a decision Lifeinsurance is too inexpensive to
not have really a good bit of it.
Speaker 1 (11:45):
Yeah, the next question I have for you, and
this is specific towards thebusiness owners that you work
with, and I'm a business ownermyself.
You're a business owner and Ithink so often we're so focused
on growing our companies, butsometimes we neglect our own
personal financial security, andthis may be a bit of what we
talked about, but just from thispoint on, feel free to expand
upon it.
How can these business ownersor entrepreneurs or just high
achievers in general that arebusy and doing what they do well
(12:07):
, how can you help them betterbalance these priorities?
What have you found to?
Speaker 2 (12:11):
be effective.
The thing is basically to gettogether with them and try to
encourage them in a way thatgives them peace of mind,
because I think that a lot oftimes in a business there's
there were so many hats andthere's so many situations that
they've got to deal with on adaily basis.
A lot of times, as I'vementioned earlier, a lot of the
(12:32):
things that I do they don't givethought to or they're not aware
of it.
I oftentimes say people don'tknow what they don't know, and
not to be derogatory, but it's afact of life and there are
things that I can bring to thetable that can enlighten them,
can encourage them and, as Isaid, give them peace of mind,
basically help them makedecisions, to implement plans, I
(12:55):
guess you might say, forunexpected events, because
that's what insurance is for.
I like to look at it from theexpected event and that is
retirement.
You get out there, you got abucket of money established and
you got an income source andI've helped somebody to be a
part of that, so that to me,that's important.
Speaker 1 (13:14):
Tell me a little bit more about that.
So from a business ownerperspective, I think it's a
little bit different from, maybe, a traditional employer or
professional, where I think fora typical non-business owner you
think, okay, 60, 65, I'm goingto retire.
I think, at least in myexperience, business owners can
be a little bit more over themap.
Maybe they retire, maybe theycontinue.
What's unique about businessowners in terms of how you help
(13:34):
them set those goals forthemselves?
Speaker 2 (13:37):
A lot of times their standard of living is higher,
perhaps, than their employees.
They want to times theirstandard of living is higher,
perhaps, than their employees.
They want to maintain astandard of living.
They don't want to diminishtheir standard of living.
It takes money to do that.
They have greater capabilitiesfinancially.
In fact, I saw this the otherday, back when our country was
establishing the tax laws.
They did it for business owners, not for the individual, and
(14:00):
one of the advantages that aperson could take advantage of
that owns a business is that thecompany can make the premium
payment for their contracts andthen that passed to the business
owner as an income expense andthe company can deduct it.
And then the business ownershis cost is just the taxes on
the premium and everything'scopacetic.
(14:22):
You pay taxes on it.
His cost is just the taxes onthe premium.
Speaker 1 (14:26):
And everything's copacetic.
You pay taxes on it, so thegovernment's free and clear of
it.
And that leads me to my nextquestion, which is in the book
you talk a lot about what youdescribe as tax-efficient
wealth-building strategies, andso, when it comes, whether it's
business owners or just highachievers in general, what are
some of the mistakes that yousee them making currently?
Speaker 2 (14:43):
I don't know if it's so much a mistake as much as a
direction that I would considernot all that favorable.
The financial services industrypromotes 401k plans and IRAs,
as do accountants, becauseaccountants are looking for
deductions.
An IRA contribution is adeduction, which is good, and
the federal government promotesthese, but the thing of it is
(15:05):
that when you go to retire,you're going to have to pay
taxes on every penny of thatmoney.
Heaven knows what the taxbracket will be.
You pay the money to thegovernment and the other ones
that establish the tax bracket,and I don't know of too many
people that, when they go toretire, want to give up any
money.
I don't know that you can havetoo much money, but certainly if
(15:26):
you're on a fixed income, youwant to maintain that as much of
that fixed income as youpossibly can and not give any of
it to the government.
Establishing a retirement planthat you have to pay taxes on is
a disadvantage to the client.
You can make money or it can bezero, but you're not going to
lose money and as a result, youcan have more money at
(15:48):
retirement and if you can getthat money as a retirement
income stream and not pay taxeson it.
To me, that's the best of everyworld.
Speaker 1 (15:56):
I think you're right.
It's your CPA.
Typically, they're looking forimmediate tax deductions and so
then that, as you said, itreflects in like a IRA or a 401k
, which is oftentimes taxdeferred, meaning to your point
that you're going to pay that atsome point, and often on a much
larger pool of money at thatpoint.
Yes, from my understanding, thething that is closest to life
(16:20):
insurance is maybe like a Rothplan, meaning that you pay taxes
immediately but then it growstax-free.
How would you compare orcontrast maybe a Roth to life
insurance?
Speaker 2 (16:33):
The big thing with a Roth is that you're limited on
your contributions depending onyour income On life insurance.
You're not.
What your capability of doingwith a life insurance contract
from a cost perspective is up tothe individual.
It's not restricted.
Plus, you can have incomestreams set up.
I guess you might say it's muchmore structured.
(16:54):
You can let the insurancecompany retain the money and
start giving you an income onthat money.
You can adjust that income ifyou see fit.
You can stop that income if youhave a period of time in which
you don't need it.
But at the same time ifsomething happens to you
prematurely you get killed in acar wreck or you have a heart
attack, then there's a deathbenefit that is substantially
(17:16):
greater than the amount of moneythat's been accumulated.
So the life insurance and youtie the life insurance with the
tax.
Not only the tax deferral butthe tax-free income aspect of
the life insurance contract Ithink far outweighs the pluses
and advantages of a Roth IRA.
Speaker 1 (17:36):
Next question is cashflow management is critical
for business owners, forentrepreneurs, really for
everybody.
Can you share any examples ofhow proper financial planning
has helped your clients weathersome of those unexpected cash
crunches that we all typicallyface at some point?
Everybody hits them sooner orlater.
Speaker 2 (17:55):
Sooner or later.
It's like wrecking on amotorcycle.
It's not if, it's when.
And it's true about money, yeah.
Speaker 1 (18:04):
So, getting back to the topic of business owners, I
find it interesting and I thinkprobably both you and I might
relate to this is that a lot ofbusiness owners have their
identity intertwined with theirbusiness right.
It's their baby.
I think a lot of businessowners choose to continue
working not necessarily becausethey have to, but just because
(18:26):
they enjoy it.
It's retire from what?
And so when it comes to helpinga business owner plan for their
retirement, how do youencourage them to think in terms
of maybe some of the typicalstandard approaches?
We talked about a 401k, 401qualified plans, 401ks, IRAs, et
cetera.
Maybe those aren't the best fit.
How do you approach thatconversation with business
(18:46):
owners?
First, off.
Speaker 2 (18:47):
Try to communicate the independence of the decision
.
Now, when I say independence,I'm talking about it's not
company related.
A lot of business owners workconstantly.
Any monies that they can makethey put back into the business,
and I can understand that theywant to grow it, but at some
point decisions need to be madeabout.
Okay, what happens to me when Igo to retire?
(19:10):
Where's my money going to comefrom?
Because I have encountered alot of different things from
business owners in relation towhat their expectations were
from the business and yetfactors beyond their control.
Particularly early on in mycareer, when I worked with
people in the coal industry,there were a lot of situations
where they expected wealth andeasy life and they didn't come
(19:33):
out that way.
They didn't turn out that way.
Too many factors come into playthat can affect a business
owner, like tariffs for one.
Speaker 1 (19:41):
Okay, Unexpected, that's correct.
Speaker 2 (19:45):
And so I think it's extremely advantageous and
sometimes it's difficult for abusiness owner to understand it.
If there's ways in which moniescan be moved out of the
business to put into a strategythat he owns and he controls,
basically unaffiliated with thecompany, unencumbered by the
company, then he's far betteroff.
(20:05):
In other words, he's gotanother era in his quiver
financially, rather than havingit all set right in the business
.
Speaker 1 (20:14):
It just comes down to the idea of diversification.
Right, correct, absolutely,because I can relate.
I've been in business formyself now for over 10 years.
And you start I'm going to berich.
I can envision myself on theyacht smoking cigars and
throwing money around.
Speaker 2 (20:28):
Yeah, that can be a person's aim, but a lot of times
I had a person tell me.
He said we're going to operatethis business for 10 years.
We already have a 10-year planand when the 10 years is up
we're going to sell the companyand I'm moving to the Bahamas or
the Cayman Islands or somewhere.
It did not turn out that way.
Speaker 1 (20:49):
I was just reading an article yesterday about a
business owner who's built up acompany it's actually a
competitor of mine and they grewit to, I want to say, about 20
million in revenue and they werelooking at exiting for about
maybe 40 million.
And then, over the course of acouple of years, some
mismanagement happened and, longstory short, he ended up
(21:11):
getting, instead of theanticipated, his share, which
would have been a portion of 40million.
Yeah, he ended up getting lessthan a million.
And there's just life.
Business is interesting, right?
There's all absolutely there'sall these curveballs that we
don't expect, and to be expectedthat these things are going to
happen, not knowing what they'regoing to be, and so just having
(21:31):
that diversification really, Ithink is so important.
I want this to work and at thesame time, I have this other
backup plan or other way toprotect myself.
Speaker 2 (21:41):
Yes, absolutely, and we can see story after story of
companies in America that havegone through some of the things
they've gone through.
The first thing that pops in mymind is Chrysler and what Lee
Iacocca did for Chrysler.
Now, obviously that's on agrand scale, but the same thing
can happen to one personoperating a company with 10
(22:02):
employees.
There's factors that can comeinto play.
Somebody can rest theirbusiness.
Let's take the restaurantbusiness.
We all eat out a lot.
There's restaurants here inthis town that have been very
successful and then all of asudden the Texas Roadhouse opens
up in town and, wow, theparking lot is almost empty.
(22:22):
In these other places In TexasRoadhouse you can't find a place
to park.
So there are so many factorsthat can come into play.
And it doesn't matter what theindustry is restaurant or a
machine shop because I dealtwith machine shops and electric
belt shops and motor shops andall those kinds of situations
that fed the coal industry earlyon in my career.
(22:44):
But it can happen to anyindustry.
Nobody is immune andmismanagement.
It can happen.
In insurance.
I've experienced that withinsurance companies that were
doing fantastic, had a greatproduct, a great compensation
package, great communication,great service and a few
positions at the top, changeWhoa, and in five years you're
(23:06):
dealing with a whole notherkettle of fish.
Speaker 1 (23:08):
Along those lines.
Do you have any tips orstrategies for a business owner
when it comes to them thinkingabout succession or estate
planning?
How do those things factor intowhat you do?
Speaker 2 (23:19):
Answer to that question is yes as far as
succession.
A lot of times people are inbusiness with others and at
different ages, but rarely aretwo people the same age or three
people in a business.
Sometimes you have an the sameage or three people in a
business.
Sometimes you have an olderperson.
I was involved in a businesslike that in West Virginia.
We had older people and youngerpeople and you can again life
insurance can come into play fora business owner.
(23:39):
You have a buy and sellagreement.
In fact I had a situation with afather who had four sons and
they were in the coal businessand I tried to get the father to
sit down and do a buy and sellagreement between the four boys
and himself and he said hisaccountant recommended he didn't
do it.
I said that's pitiful and butas it turned out, unfortunately
(24:00):
the youngest boy got killed on amine site.
He was driving a truck down ahill and the road gave way and
he rolled over about 50 timesand he got killed.
And in fact the dad told me hesaid I've spent about $70,000 on
legal fees and trying to takecare of my daughter-in-law.
He had three.
The boy was married and hadthree children and he said it's
been a can of worms and just anightmare for me and I said I
(24:22):
called him by name.
I said $70,000 could havebought an awful lot of life
insurance for you.
How $70,000 could have bought anawful lot of life insurance for
you.
How easy it would have been.
He could have gotten his son'sportion of the business.
They had three coal companiesinvolved and all five of these
guys the daddy and the four boysall owned a different piece in
each company.
It was a can of worms.
And he could have bought thedaughter-in-law out, give her a
(24:43):
nice big check.
Everybody could have been happy.
Obviously, the loss of the sonand the husband was dire, but
nevertheless, financially itcould have been happy.
Obviously, the loss of the sonand the husband was dire, but
nevertheless, financially itcould have been a whole lot
better off than it was.
So the ways to solve problemsthis way it's so easy to do it
if people would do it, butpeople procrastinate, so a lot
(25:03):
of times in a situation likethat it doesn't get done.
Speaker 1 (25:06):
Yeah, I guess.
To me, that begs the questionis how do you get?
The theme, I hear, is it's yourjob, is to help people make
decisions that are going tobenefit them long term, and the
biggest challenge that you faceand really what your book's
about educating people isultimately helping them to
overcome procrastination.
(25:27):
It sounds like one of thebiggest challenges.
Yes, how do you get people toovercome procrastination?
Sounds like one of the biggestchallenges.
Yes, how do you get people toovercome procrastination?
I think this would be great forany number of areas, right?
Of course, in your case, itapplies specifically to what you
do, but what have you found tobe helpful or effective in
helping people overcomeprocrastination?
Speaker 2 (25:47):
Two words pop in my mind when you ask that question
and I guess it would beprofessionally patient.
Okay, and I say professionally,what I mean is I don't harass
people, I don't pressure people.
I try to paint a picture thatgives them clarity as to their
situation and to the dire needof it.
I can relay stories to people.
(26:10):
You talk about estate planning.
There's Joe Robbie on theMinnesota Miami Dolphins and the
stadium and he died and thefamily had to sell the whole
McGillicuddy in order to takecare of Uncle Sam.
Well now, not everybody'sestate's that big, but somebody
might be worth $10 million, $15,$20 million that big, but
(26:31):
somebody might be worth $10million, $15, $20 million, and
it doesn't take a whole lot tocreate liquidity for that estate
through life insurance becauseit's payable at the exact moment
that it's needed.
And as far as estate taxes areconcerned, you got nine months
from the death of the estateowner.
You got nine months to payUncle Sam, and that life
insurance can just solve a tonof problems help businesses to
(26:54):
remain intact, help the familyto retain businesses and
property.
There may be farms, there maybe a myriad of different things,
so there's just a lot of theavenues in which life insurance
can be a benefit is amazing.
It doesn't matter whetheryou're just starting out.
You're a young man withstarting a family and without a
lot of premium dollars, you canstart with term insurance and
(27:17):
you can build through the years.
One of the things that reallycomes into play is the
discipline.
You've got to have disciplineto do anything and to carry
through with anything.
Maintaining life insurance andacquiring it to start with has a
lot to do with the disciplineaspect.
Speaker 1 (27:32):
Yeah, starting to wrap up, I have a couple of
final questions for you.
Okay, and just reflecting backover your career, what are some
of the changes that you'veobserved in your career, whether
it comes to the industry or tothe way that people invest, or
just your observation?
Standing where you are today,what are some of your
observations about what you'veseen change over the course of
(27:56):
your career?
Speaker 2 (27:58):
The one thing I think could be information.
People have access to moreinformation today and some
people like if you own a cardealership, you don't want
people knowing a whole lot havea whole lot of information.
But in my business I'm gladthey have information available
to them because it can make themmore aware At least it should
you would hope.
(28:18):
But there's still a reluctanceon the part of people, I find,
to a certain degree in takingaction and taking steps.
There's always something elsethat money can be used for.
But I think information beingavailable to people today is the
biggest factor that I've seenthrough the transition in my
career.
Speaker 1 (28:35):
The one thing that information is not going to
solve is the habits.
Speaker 2 (28:40):
That's correct.
There has to be a change.
Speaker 1 (28:42):
If a listener could take away just one message from
your book the Wealth Builder.
What would you want thatmessage to be?
Speaker 2 (28:50):
Be open to ideas you may not have thought of before,
to new ideas, particularly aboutaccumulating money.
I have that on my business cardhelping people accumulate money
, life insurance.
We know what life insurancedoes it pays the death benefit
if somebody dies prematurely.
No, look at it from a differentperspective.
Look at it from a honestly froma selfishly motivated
(29:11):
perspective.
Okay, I own a life insurancecontract.
If I die, the beneficiary isgoing to get the money, but I
bought this contract so I canhave a tax-free retirement
income when I go to retire.
That I control as to when Idraw it, when I don't draw it,
if I draw it and cease to drawit and want to wait to draw it
again.
There's a lot of flexibilitiesthere and it's their decision
(29:33):
and it's they're in the driver'sseat with a strategy like that.
Speaker 1 (29:37):
And what's the best place for our listeners to get a
copy of your book?
Speaker 2 (29:42):
The easiest and the quickest way would be just to
drop me an email.
Okay, it's Paul at Paul H.
Cook at C-O-O-K.
There's no E on it.
I'm a working cook,paulhcookcom.
Paul at PaulHCookcom.
The H is real important.
If you don't put that in there,it ends up to some guy in
(30:04):
England.
Surprisingly, I have my ownwhole story about middle
initials, so I appreciate thatyou said that and also put your
mailing address in there so thatI'll know where to ship the
book to you.
And as soon as that happens andyou read the book, then
hopefully we'll have anopportunity for a conversation,
perhaps a Zoom meeting.
Answer any questions you mighthave.
I'd be happy to do that.
(30:24):
Be thrilled to do it.
Speaker 1 (30:25):
Yeah, and do you work with people?
You're based out of Tennessee,do you potentially work with
people nationwide, or who's thebest fit for your service?
Speaker 2 (30:33):
Typically people in my region, I would say within
100, 200 miles of my area.
Here would be fine.
We can do Zoom meetings.
We can interact in that fashionthrough Zoom meetings and
correspondence.
So yeah, that's another way wecould do it.
So I work basically in probablyanywhere east of the
Mississippi River.
Speaker 1 (30:51):
Okay.
Do you find now, at this point,that people are more prone to
want to meet you on Zoom or tocome into your office?
You have a mixture of both.
Speaker 2 (30:58):
Okay, things can be done quickly with a Zoom meeting
.
Yeah, yeah.
Speaker 1 (31:01):
Yeah, is there any question that we haven't
discussed that you think wouldbe important to this
conversation?
Speaker 2 (31:07):
I put in the book, a quote from Henry Ford Whether
you think you can or you thinkyou can't, either way you're
right.
And a lot of times people saywhat's that mean?
Why is that in there?
It's in there because it getsdown to discipline.
If we think we can do something, we can because we think we can
(31:27):
.
If we think we can't, then wecan't.
And so whatever our frame ofmind is drives and dictates what
we do.
And the same thing when itcomes to financial planning and
strategizing to accumulate money, there has to be the discipline
of knowing I can do it and havethe mechanism and the strategy
in place to do it.
(31:48):
And that's what I bring to thetable.
Speaker 1 (31:50):
And I think a takeaway for me is just the
diversification.
It's especially for a businessowner.
You don't know, while we getinto business with the
aspiration to live the good lifeand to some degree maybe we
make more, hopefully, than notbeing in business, it's still I
(32:14):
know from my own personalexperience.
Risk mitigation anddiversification are a couple key
principles and what you bringto the table I think is a very
helpful awareness for people.
Speaker 2 (32:18):
Yeah, I think so, and I appreciate your observation,
paul.
Thank you very much for yourtime today.
I've enjoyed the conversation Ihave too.
Thank you for your time.
I've enjoyed the conversation Ihave too.
Thank you for your time, I'veenjoyed it.
As entrepreneurs and business owners, we're often so
focused on growing our companiesthat we neglect our personal
financial security.
What if there were financialtools hiding in plain sight that
could give you tax-free income,emergency liquidity and
protection from marketvolatility?
On today's episode of theInfluential Advisor podcast, I'm
(00:22):
joined by Paul Cook, author ofthe Wealth Builder and a
financial strategist who spentdecades helping entrepreneurs
and high achievers createfinancial security independent
of their businesses.
Get ready to discover wealthbuilding secrets that could
financial future.
Paul, I want to welcome you tothe Influential Advisor Show and
(00:52):
I've been excited to have thisinterview with you.
You and I have known each othernow for, I want to say, five or
six years it's been oh yeah,yeah and have had a chance to
get to know each other, andyou've spent your career in the
financial services industry and,for our audience, I'd love to
have you just share a little bitabout your background and what
led you from where you startedto where you are today.
Speaker 2 (01:14):
A myriad of factors.
I started out in West Virginiawith Metropolitan Life, working
with anybody and everybody thatI could sit down with.
You had to make a livingbecause it was tough when you
first get started.
You got to stay active and yougot to stay busy and you got to
be a little bit successful justso you can stay in the business.
I worked very diligently andworked hard and long hours.
I've always been glad that I'vedone what I've done because I
(01:37):
have had a lot of fulfillmentand a lot of satisfaction,
particularly when people areable to utilize my products and
do so in a way that there may bea loss of life because I do
sell life insurance but therewas an opportunity there to hand
somebody a check because I hadcalled on them and worked with
them and the thank yous werepretty significant and I felt
(01:58):
good to be part of that part, tohelp people maintain their
standard of living and continueon with education and paying off
mortgages and things of thatnature.
I have felt very fulfilled inthis business and I've enjoyed
every moment of it.
Speaker 1 (02:11):
Actually, so big question for you is you we help
you publish your book.
I want to say it's been about ayear now.
Speaker 2 (02:21):
Yes, a little over a year, a little over a year.
Speaker 1 (02:23):
Yeah, so what motivated you to write your book
, which is called the WealthBuilder I like the title and who
did you specifically gear thebook?
Speaker 2 (02:33):
to.
I geared it to business owners,entrepreneurs and high
achievers.
That's on the cover of the book.
I've directed the book to andwith emphasis toward them,
particularly business owners.
I've always worked withbusiness owners because they
wear so many hats.
They're a business owner.
They're worried about getting aproduct out or service out.
They're worried about employees.
They also typically have afamily to take care of.
(02:53):
So there's a lot of differentareas in which I can work with
these individuals, and a lot oftimes they're so busy, focused
on their business, that theydon't think about these other
things.
I call them ancillary things,ancillary to their business, but
very important.
And so that's basically how Igot started with that and the
primary reason that I wrote thebook.
I didn't think I had it in me,but you encouraged me.
(03:15):
You asked me a few questionsand I thought, yeah, I could put
that down in black and white.
I'm glad I did.
I've read my book several times, maybe for motivation.
Basically, it just encouragesme also and it reminds me of the
things that I've done in mycareer that you forget about.
You've been at it as long as Ihave.
I'm embarrassed to say how longthere's things you forget about
(03:37):
, good and bad, and so it's goodto be reminded in the book
afforded me that personalexperience Very cool.
Speaker 1 (03:44):
What's been the reaction from the people that
have read the book?
Speaker 2 (03:48):
Very positive and I've had several say to me there
are things you mentioned in thebook I didn't think about.
I never thought that wouldapply to me.
Or the big one is I didn't knowyou could do that with life
insurance.
I like that one.
Tell me more.
Yeah, people will say lifeinsurance is a death benefit.
I like that one.
Tell me more.
Yeah, people will say lifeinsurance is a death benefit.
You got to die to collect.
(04:08):
It's like automobile insuranceIf you don't wreck your car, you
don't collect anything.
And you got to die to collect.
And I've had people say to mePaul, I mean, somebody else is
going to get that money.
I'm not going to benefit fromit.
What if we can structure it insuch a way that you benefit?
To me, that's icing on the cake.
Oftentimes I say you have yourcake and eat it too.
And you can do that with lifeinsurance if you get into the
(04:29):
details of it.
Speaker 1 (04:30):
Yeah, fantastic.
And that begs the question iswhy does life insurance
sometimes get a bad rap?
Speaker 2 (04:36):
Probably because there are those in the financial
services industry that thinkthere's better strategies than
life insurance and the best wayto promote their strategies is
to be critical of life insurance.
And I won't say that I'm notcritical of certain aspects of
the financial services industry,but not against products
necessarily, and maybe againstproducts, but also against
(04:58):
Because a lot of times lifeinsurance, if you've got an IRA,
you get a tax deduction on yourcontribution.
The money grows, tax deferred,typically.
That's as far as theconversation goes.
They don't talk about whathappens when they start pulling
the money out of retirement,because Uncle Sam's going to get
a piece of that and the factthat Uncle Sam give you that tax
deduction means Uncle Samcontrols it.
(05:18):
They tell you if you take itout too early, they're going to
punish you.
If you don't take it out whenthey want you to take it out,
they're going to punish you.
So you're not in charge.
I want my clients to be incharge of their money and I
afford them that opportunitythrough the strategies that I
can implement.
Speaker 1 (05:32):
That's awesome, I guess.
What I'm curious to know isyou've been in the insurance
business for your career.
You've spent your career in theinsurance business.
What has you so passionateabout what it is that you do in
helping people with insurance?
Speaker 2 (05:50):
I think the biggest thing is helping people to
understand the advantages andwhat the pluses are, because a
lot of times they don't.
I guess there's a bit of aneducational process occurs
because I want people tounderstand okay, you buy a life
insurance contract.
If I die prematurely, there's abenefit that's going to be paid
to my widow or to my businesspartner.
But, if I live to retirement,then there's some other avenues
(06:13):
there that I can benefit fromand to me that just excites me
to have the opportunity to dothat with people and to do it
for people, particularly if theydon't understand insurance to
start with, and a lot of timespeople don't, People just don't.
I've never had anybody come inand say, Paul, I've been
thinking about dying, I want tobuy some life insurance.
That's never happened to me Allthe years I've been in a
(06:33):
business it's never happened.
But nevertheless peopleunderstand what life insurance
is.
I think.
Basically they just don'tunderstand all the nuances of it
and all the advantages and thepluses that life insurance can
have.
Speaker 1 (06:47):
Very cool.
Along those lines, in your bookthe Wealth Builder, you share a
number of powerful storiesabout family facing those
unexpected tragedies.
Right To your point, we're allgoing to die at some point,
right?
We just don't know when.
And so how have theseexperiences shaped your approach
to what I would describe asfinancial protection strategies?
Speaker 2 (07:09):
Probably the best thing I could say about what
I've done is to be persistent.
A lot of times people youtypically will hear objections,
people who object to doing whatyou think they should do.
I had a plumber, for example.
I sat down with a plumber andhis wife and she sat on one end
of the couch.
He sat on the other the wholetime.
(07:30):
She had her arms folded and hewould say dear, what do you
think?
And she'd say it's up to you.
The guy was really puttingpressure on himself but he kept
telling me it seems like anawful lot of premium.
I said yes, sir, it is.
But I said imagine you not here.
What kind of financial stressthat would put on the family
because you're here and you canpay the premium now and every
(07:51):
once in a while he would sayit's a lot of premium.
I said, well, you're workingand it's difficult to pay.
Imagine what it's like ifyou're not here.
So anyway, he ended up buying acontract.
A year later the agent becauseI was in management at that
point, the agent that was withme went back, sold him an
additional contract.
The policy got approved and putin the mail to the agent to
deliver to the client.
Speaker 1 (08:10):
And before that happened.
Speaker 2 (08:11):
The boy dropped dead with a heart attack.
So I was always appreciative ofmy effort.
I'm glad the guy took action,and I could have very well have
said, yeah, it is a lot ofpremium, maybe I can check back
with you later on and see ifthings are better.
And that later on may neverhappen, and so I was always glad
(08:32):
of that.
I also had a nurse who bought apolicy.
She was divorced with a12-year-old daughter and she
wanted her daughter to havemoney for education if something
happened to her prematurely.
A year later her house caughton fire and the lady perished.
The daughter got out, but themama didn't, and I was able to
deliver a check in thatsituation, and so I felt these
are sad situations, but thankgoodness I was able to come in
(08:53):
with a check and make things alittle easier for the survivors
than they would have been.
Speaker 1 (08:57):
Yeah, and I can imagine throughout your career
you've had any number of thosecircumstances where you really
see the impact that beingproperly protected can have it
on family?
Speaker 2 (09:06):
Yes, definitely, and then I've seen some where they
were inadequately protected.
To me, that's the stressingpart.
I had a situation where afellow got killed in a car wreck
and he had a $1,300,000 deathbenefit in his life insurance
and six months prior to that hiswife came into the office and
said we need to cut this premiumback, I need to reduce the
(09:28):
death benefit.
We just can't afford it, andwhen they really could, it was a
matter of priorities for them,and so we eliminated the term
part, which was a million, andthe $300,000 was the permanent
part, and that's the check Idelivered to her when he got
killed was the $300,000.
So I felt real bad about it,but in fact I encouraged her to
(09:49):
put it off for another monthbefore they actually made the
decision, and she did, but shestill came back and made it.
So, again, that was a situationthat I handed a check, but it
wasn't near what it could havebeen.
Speaker 1 (09:59):
So you're in the business of really helping
people think longer term and setpriorities for their life and
their family?
Yes, most definitely You'reprofessionally persistent in
getting out the message really,so that you can benefit and
bless the people that you workwith.
That's what I'm hearing.
Speaker 2 (10:17):
Yeah, that's my objective.
One of the things, too thatI've encountered several times,
many times somebody wants towait, Okay.
Several times, many timessomebody wants to wait, Okay,
Say, and maybe I'm talking tothem about establishing a
permanent plan where they canaccumulate cash and help
supplement retirement benefits,and they say I want to wait.
So my objective is which, atthat point, typically, let's go
(10:41):
ahead and get the term insuranceissued.
Term insurance is realinexpensive and then later on,
when your situation is differentor improved or better, a frame
of mind has changed Now that wecan convert that term to the
permanent plan without goingthrough medical underwriting.
So let's go ahead while you'rehealthy, because this is as
(11:01):
healthy as you're ever going tobe, is right now, because it's
downhill from here for everybody, and so let's go ahead and get
the term issued and then you canmake a decision later as to
what you want to do goingforward in terms of accumulating
money.
To me and when people, that'svery frustrating for me when
people say at that point no,I'll just wait a little.
While I've had people wait.
(11:22):
I had one guy came down withulcerative colitis and almost
died after an interview likethat.
I've had several situations.
I've had heart attacks tohappen.
I've had people come down withcancer.
Those are the frustrating onesthat I feel like it's so easy to
have made a decision Lifeinsurance is too inexpensive to
not have really a good bit of it.
Speaker 1 (11:45):
Yeah, the next question I have for you, and
this is specific towards thebusiness owners that you work
with, and I'm a business ownermyself.
You're a business owner and Ithink so often we're so focused
on growing our companies, butsometimes we neglect our own
personal financial security, andthis may be a bit of what we
talked about, but just from thispoint on, feel free to expand
upon it.
How can these business ownersor entrepreneurs or just high
achievers in general that arebusy and doing what they do well
(12:07):
, how can you help them betterbalance these priorities?
What have you found to?
Speaker 2 (12:11):
be effective.
The thing is basically to gettogether with them and try to
encourage them in a way thatgives them peace of mind,
because I think that a lot oftimes in a business there's
there were so many hats andthere's so many situations that
they've got to deal with on adaily basis.
A lot of times, as I'vementioned earlier, a lot of the
(12:32):
things that I do they don't givethought to or they're not aware
of it.
I oftentimes say people don'tknow what they don't know, and
not to be derogatory, but it's afact of life and there are
things that I can bring to thetable that can enlighten them,
can encourage them and, as Isaid, give them peace of mind,
basically help them makedecisions, to implement plans, I
(12:55):
guess you might say, forunexpected events, because
that's what insurance is for.
I like to look at it from theexpected event and that is
retirement.
You get out there, you got abucket of money established and
you got an income source andI've helped somebody to be a
part of that, so that to me,that's important.
Speaker 1 (13:14):
Tell me a little bit more about that.
So from a business ownerperspective, I think it's a
little bit different from, maybe, a traditional employer or
professional, where I think fora typical non-business owner you
think, okay, 60, 65, I'm goingto retire.
I think, at least in myexperience, business owners can
be a little bit more over themap.
Maybe they retire, maybe theycontinue.
What's unique about businessowners in terms of how you help
(13:34):
them set those goals forthemselves?
Speaker 2 (13:37):
A lot of times their standard of living is higher,
perhaps, than their employees.
They want to times theirstandard of living is higher,
perhaps, than their employees.
They want to maintain astandard of living.
They don't want to diminishtheir standard of living.
It takes money to do that.
They have greater capabilitiesfinancially.
In fact, I saw this the otherday, back when our country was
establishing the tax laws.
They did it for business owners, not for the individual, and
(14:00):
one of the advantages that aperson could take advantage of
that owns a business is that thecompany can make the premium
payment for their contracts andthen that passed to the business
owner as an income expense andthe company can deduct it.
And then the business ownershis cost is just the taxes on
the premium and everything'scopacetic.
(14:22):
You pay taxes on it.
His cost is just the taxes onthe premium.
Speaker 1 (14:26):
And everything's copacetic.
You pay taxes on it, so thegovernment's free and clear of
it.
And that leads me to my nextquestion, which is in the book
you talk a lot about what youdescribe as tax-efficient
wealth-building strategies, andso, when it comes, whether it's
business owners or just highachievers in general, what are
some of the mistakes that yousee them making currently?
Speaker 2 (14:43):
I don't know if it's so much a mistake as much as a
direction that I would considernot all that favorable.
The financial services industrypromotes 401k plans and IRAs,
as do accountants, becauseaccountants are looking for
deductions.
An IRA contribution is adeduction, which is good, and
the federal government promotesthese, but the thing of it is
(15:05):
that when you go to retire,you're going to have to pay
taxes on every penny of thatmoney.
Heaven knows what the taxbracket will be.
You pay the money to thegovernment and the other ones
that establish the tax bracket,and I don't know of too many
people that, when they go toretire, want to give up any
money.
I don't know that you can havetoo much money, but certainly if
(15:26):
you're on a fixed income, youwant to maintain that as much of
that fixed income as youpossibly can and not give any of
it to the government.
Establishing a retirement planthat you have to pay taxes on is
a disadvantage to the client.
You can make money or it can bezero, but you're not going to
lose money and as a result, youcan have more money at
(15:48):
retirement and if you can getthat money as a retirement
income stream and not pay taxeson it.
To me, that's the best of everyworld.
Speaker 1 (15:56):
I think you're right.
It's your CPA.
Typically, they're looking forimmediate tax deductions and so
then that, as you said, itreflects in like a IRA or a 401k
, which is oftentimes taxdeferred, meaning to your point
that you're going to pay that atsome point, and often on a much
larger pool of money at thatpoint.
Yes, from my understanding, thething that is closest to life
(16:20):
insurance is maybe like a Rothplan, meaning that you pay taxes
immediately but then it growstax-free.
How would you compare orcontrast maybe a Roth to life
insurance?
Speaker 2 (16:33):
The big thing with a Roth is that you're limited on
your contributions depending onyour income On life insurance.
You're not.
What your capability of doingwith a life insurance contract
from a cost perspective is up tothe individual.
It's not restricted.
Plus, you can have incomestreams set up.
I guess you might say it's muchmore structured.
(16:54):
You can let the insurancecompany retain the money and
start giving you an income onthat money.
You can adjust that income ifyou see fit.
You can stop that income if youhave a period of time in which
you don't need it.
But at the same time ifsomething happens to you
prematurely you get killed in acar wreck or you have a heart
attack, then there's a deathbenefit that is substantially
(17:16):
greater than the amount of moneythat's been accumulated.
So the life insurance and youtie the life insurance with the
tax.
Not only the tax deferral butthe tax-free income aspect of
the life insurance contract Ithink far outweighs the pluses
and advantages of a Roth IRA.
Speaker 1 (17:36):
Next question is cashflow management is critical
for business owners, forentrepreneurs, really for
everybody.
Can you share any examples ofhow proper financial planning
has helped your clients weathersome of those unexpected cash
crunches that we all typicallyface at some point?
Everybody hits them sooner orlater.
Speaker 2 (17:55):
Sooner or later.
It's like wrecking on amotorcycle.
It's not if, it's when.
And it's true about money, yeah.
Speaker 1 (18:04):
So, getting back to the topic of business owners, I
find it interesting and I thinkprobably both you and I might
relate to this is that a lot ofbusiness owners have their
identity intertwined with theirbusiness right.
It's their baby.
I think a lot of businessowners choose to continue
working not necessarily becausethey have to, but just because
(18:26):
they enjoy it.
It's retire from what?
And so when it comes to helpinga business owner plan for their
retirement, how do youencourage them to think in terms
of maybe some of the typicalstandard approaches?
We talked about a 401k, 401qualified plans, 401ks, IRAs, et
cetera.
Maybe those aren't the best fit.
How do you approach thatconversation with business
(18:46):
owners?
First, off.
Speaker 2 (18:47):
Try to communicate the independence of the decision
.
Now, when I say independence,I'm talking about it's not
company related.
A lot of business owners workconstantly.
Any monies that they can makethey put back into the business,
and I can understand that theywant to grow it, but at some
point decisions need to be madeabout.
Okay, what happens to me when Igo to retire?
(19:10):
Where's my money going to comefrom?
Because I have encountered alot of different things from
business owners in relation towhat their expectations were
from the business and yetfactors beyond their control.
Particularly early on in mycareer, when I worked with
people in the coal industry,there were a lot of situations
where they expected wealth andeasy life and they didn't come
(19:33):
out that way.
They didn't turn out that way.
Too many factors come into playthat can affect a business
owner, like tariffs for one.
Speaker 1 (19:41):
Okay, Unexpected, that's correct.
Speaker 2 (19:45):
And so I think it's extremely advantageous and
sometimes it's difficult for abusiness owner to understand it.
If there's ways in which moniescan be moved out of the
business to put into a strategythat he owns and he controls,
basically unaffiliated with thecompany, unencumbered by the
company, then he's far betteroff.
(20:05):
In other words, he's gotanother era in his quiver
financially, rather than havingit all set right in the business
.
Speaker 1 (20:14):
It just comes down to the idea of diversification.
Right, correct, absolutely,because I can relate.
I've been in business formyself now for over 10 years.
And you start I'm going to berich.
I can envision myself on theyacht smoking cigars and
throwing money around.
Speaker 2 (20:28):
Yeah, that can be a person's aim, but a lot of times
I had a person tell me.
He said we're going to operatethis business for 10 years.
We already have a 10-year planand when the 10 years is up
we're going to sell the companyand I'm moving to the Bahamas or
the Cayman Islands or somewhere.
It did not turn out that way.
Speaker 1 (20:49):
I was just reading an article yesterday about a
business owner who's built up acompany it's actually a
competitor of mine and they grewit to, I want to say, about 20
million in revenue and they werelooking at exiting for about
maybe 40 million.
And then, over the course of acouple of years, some
mismanagement happened and, longstory short, he ended up
(21:11):
getting, instead of theanticipated, his share, which
would have been a portion of 40million.
Yeah, he ended up getting lessthan a million.
And there's just life.
Business is interesting, right?
There's all absolutely there'sall these curveballs that we
don't expect, and to be expectedthat these things are going to
happen, not knowing what they'regoing to be, and so just having
(21:31):
that diversification really, Ithink is so important.
I want this to work and at thesame time, I have this other
backup plan or other way toprotect myself.
Speaker 2 (21:41):
Yes, absolutely, and we can see story after story of
companies in America that havegone through some of the things
they've gone through.
The first thing that pops in mymind is Chrysler and what Lee
Iacocca did for Chrysler.
Now, obviously that's on agrand scale, but the same thing
can happen to one personoperating a company with 10
(22:02):
employees.
There's factors that can comeinto play.
Somebody can rest theirbusiness.
Let's take the restaurantbusiness.
We all eat out a lot.
There's restaurants here inthis town that have been very
successful and then all of asudden the Texas Roadhouse opens
up in town and, wow, theparking lot is almost empty.
(22:22):
In these other places In TexasRoadhouse you can't find a place
to park.
So there are so many factorsthat can come into play.
And it doesn't matter what theindustry is restaurant or a
machine shop because I dealtwith machine shops and electric
belt shops and motor shops andall those kinds of situations
that fed the coal industry earlyon in my career.
(22:44):
But it can happen to anyindustry.
Nobody is immune andmismanagement.
It can happen.
In insurance.
I've experienced that withinsurance companies that were
doing fantastic, had a greatproduct, a great compensation
package, great communication,great service and a few
positions at the top, changeWhoa, and in five years you're
(23:06):
dealing with a whole notherkettle of fish.
Speaker 1 (23:08):
Along those lines.
Do you have any tips orstrategies for a business owner
when it comes to them thinkingabout succession or estate
planning?
How do those things factor intowhat you do?
Speaker 2 (23:19):
Answer to that question is yes as far as
succession.
A lot of times people are inbusiness with others and at
different ages, but rarely aretwo people the same age or three
people in a business.
Sometimes you have an the sameage or three people in a
business.
Sometimes you have an olderperson.
I was involved in a businesslike that in West Virginia.
We had older people and youngerpeople and you can again life
insurance can come into play fora business owner.
(23:39):
You have a buy and sellagreement.
In fact I had a situation with afather who had four sons and
they were in the coal businessand I tried to get the father to
sit down and do a buy and sellagreement between the four boys
and himself and he said hisaccountant recommended he didn't
do it.
I said that's pitiful and butas it turned out, unfortunately
(24:00):
the youngest boy got killed on amine site.
He was driving a truck down ahill and the road gave way and
he rolled over about 50 timesand he got killed.
And in fact the dad told me hesaid I've spent about $70,000 on
legal fees and trying to takecare of my daughter-in-law.
He had three.
The boy was married and hadthree children and he said it's
been a can of worms and just anightmare for me and I said I
(24:22):
called him by name.
I said $70,000 could havebought an awful lot of life
insurance for you.
How $70,000 could have bought anawful lot of life insurance for
you.
How easy it would have been.
He could have gotten his son'sportion of the business.
They had three coal companiesinvolved and all five of these
guys the daddy and the four boysall owned a different piece in
each company.
It was a can of worms.
And he could have bought thedaughter-in-law out, give her a
(24:43):
nice big check.
Everybody could have been happy.
Obviously, the loss of the sonand the husband was dire, but
nevertheless, financially itcould have been happy.
Obviously, the loss of the sonand the husband was dire, but
nevertheless, financially itcould have been a whole lot
better off than it was.
So the ways to solve problemsthis way it's so easy to do it
if people would do it, butpeople procrastinate, so a lot
(25:03):
of times in a situation likethat it doesn't get done.
Speaker 1 (25:06):
Yeah, I guess.
To me, that begs the questionis how do you get?
The theme, I hear, is it's yourjob, is to help people make
decisions that are going tobenefit them long term, and the
biggest challenge that you faceand really what your book's
about educating people isultimately helping them to
overcome procrastination.
(25:27):
It sounds like one of thebiggest challenges.
Yes, how do you get people toovercome procrastination?
Sounds like one of the biggestchallenges.
Yes, how do you get people toovercome procrastination?
I think this would be great forany number of areas, right?
Of course, in your case, itapplies specifically to what you
do, but what have you found tobe helpful or effective in
helping people overcomeprocrastination?
Speaker 2 (25:47):
Two words pop in my mind when you ask that question
and I guess it would beprofessionally patient.
Okay, and I say professionally,what I mean is I don't harass
people, I don't pressure people.
I try to paint a picture thatgives them clarity as to their
situation and to the dire needof it.
I can relay stories to people.
(26:10):
You talk about estate planning.
There's Joe Robbie on theMinnesota Miami Dolphins and the
stadium and he died and thefamily had to sell the whole
McGillicuddy in order to takecare of Uncle Sam.
Well now, not everybody'sestate's that big, but somebody
might be worth $10 million, $15,$20 million that big, but
(26:31):
somebody might be worth $10million, $15, $20 million, and
it doesn't take a whole lot tocreate liquidity for that estate
through life insurance becauseit's payable at the exact moment
that it's needed.
And as far as estate taxes areconcerned, you got nine months
from the death of the estateowner.
You got nine months to payUncle Sam, and that life
insurance can just solve a tonof problems help businesses to
(26:54):
remain intact, help the familyto retain businesses and
property.
There may be farms, there maybe a myriad of different things,
so there's just a lot of theavenues in which life insurance
can be a benefit is amazing.
It doesn't matter whetheryou're just starting out.
You're a young man withstarting a family and without a
lot of premium dollars, you canstart with term insurance and
(27:17):
you can build through the years.
One of the things that reallycomes into play is the
discipline.
You've got to have disciplineto do anything and to carry
through with anything.
Maintaining life insurance andacquiring it to start with has a
lot to do with the disciplineaspect.
Speaker 1 (27:32):
Yeah, starting to wrap up, I have a couple of
final questions for you.
Okay, and just reflecting backover your career, what are some
of the changes that you'veobserved in your career, whether
it comes to the industry or tothe way that people invest, or
just your observation?
Standing where you are today,what are some of your
observations about what you'veseen change over the course of
(27:56):
your career?
Speaker 2 (27:58):
The one thing I think could be information.
People have access to moreinformation today and some
people like if you own a cardealership, you don't want
people knowing a whole lot havea whole lot of information.
But in my business I'm gladthey have information available
to them because it can make themmore aware At least it should
you would hope.
(28:18):
But there's still a reluctanceon the part of people, I find,
to a certain degree in takingaction and taking steps.
There's always something elsethat money can be used for.
But I think information beingavailable to people today is the
biggest factor that I've seenthrough the transition in my
career.
Speaker 1 (28:35):
The one thing that information is not going to
solve is the habits.
Speaker 2 (28:40):
That's correct.
There has to be a change.
Speaker 1 (28:42):
If a listener could take away just one message from
your book the Wealth Builder.
What would you want thatmessage to be?
Speaker 2 (28:50):
Be open to ideas you may not have thought of before,
to new ideas, particularly aboutaccumulating money.
I have that on my business cardhelping people accumulate money
, life insurance.
We know what life insurancedoes it pays the death benefit
if somebody dies prematurely.
No, look at it from a differentperspective.
Look at it from a honestly froma selfishly motivated
(29:11):
perspective.
Okay, I own a life insurancecontract.
If I die, the beneficiary isgoing to get the money, but I
bought this contract so I canhave a tax-free retirement
income when I go to retire.
That I control as to when Idraw it, when I don't draw it,
if I draw it and cease to drawit and want to wait to draw it
again.
There's a lot of flexibilitiesthere and it's their decision
(29:33):
and it's they're in the driver'sseat with a strategy like that.
Speaker 1 (29:37):
And what's the best place for our listeners to get a
copy of your book?
Speaker 2 (29:42):
The easiest and the quickest way would be just to
drop me an email.
Okay, it's Paul at Paul H.
Cook at C-O-O-K.
There's no E on it.
I'm a working cook,paulhcookcom.
Paul at PaulHCookcom.
The H is real important.
If you don't put that in there,it ends up to some guy in
(30:04):
England.
Surprisingly, I have my ownwhole story about middle
initials, so I appreciate thatyou said that and also put your
mailing address in there so thatI'll know where to ship the
book to you.
And as soon as that happens andyou read the book, then
hopefully we'll have anopportunity for a conversation,
perhaps a Zoom meeting.
Answer any questions you mighthave.
I'd be happy to do that.
(30:24):
Be thrilled to do it.
Speaker 1 (30:25):
Yeah, and do you work with people?
You're based out of Tennessee,do you potentially work with
people nationwide, or who's thebest fit for your service?
Speaker 2 (30:33):
Typically people in my region, I would say within
100, 200 miles of my area.
Here would be fine.
We can do Zoom meetings.
We can interact in that fashionthrough Zoom meetings and
correspondence.
So yeah, that's another way wecould do it.
So I work basically in probablyanywhere east of the
Mississippi River.
Speaker 1 (30:51):
Okay.
Do you find now, at this point,that people are more prone to
want to meet you on Zoom or tocome into your office?
You have a mixture of both.
Speaker 2 (30:58):
Okay, things can be done quickly with a Zoom meeting
.
Yeah, yeah.
Speaker 1 (31:01):
Yeah, is there any question that we haven't
discussed that you think wouldbe important to this
conversation?
Speaker 2 (31:07):
I put in the book, a quote from Henry Ford Whether
you think you can or you thinkyou can't, either way you're
right.
And a lot of times people saywhat's that mean?
Why is that in there?
It's in there because it getsdown to discipline.
If we think we can do something, we can because we think we can
(31:27):
.
If we think we can't, then wecan't.
And so whatever our frame ofmind is drives and dictates what
we do.
And the same thing when itcomes to financial planning and
strategizing to accumulate money, there has to be the discipline
of knowing I can do it and havethe mechanism and the strategy
in place to do it.
(31:48):
And that's what I bring to thetable.
Speaker 1 (31:50):
And I think a takeaway for me is just the
diversification.
It's especially for a businessowner.
You don't know, while we getinto business with the
aspiration to live the good lifeand to some degree maybe we
make more, hopefully, than notbeing in business, it's still I
(32:14):
know from my own personalexperience.
Risk mitigation anddiversification are a couple key
principles and what you bringto the table I think is a very
helpful awareness for people.
Speaker 2 (32:18):
Yeah, I think so, and I appreciate your observation,
paul.
Thank you very much for yourtime today.
I've enjoyed the conversation Ihave too.
Thank you for your time.
I've enjoyed the conversation Ihave too.
Thank you for your time, I'veenjoyed it.
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