Many of us are in this business to build wealth. However, there has been so much focus on the acquiring front that we forget what we do with the money we generate after. Bridging this gap is Chris Naugle, an outstanding speaker who has dedicated his life to being America’s #1 money mentor. In this episode, he joins host, Kevin Shortle, to tell us all about managing money, controlling money, and using money—not only in this business but also in school and other parts of our lives. He then dives deep into real estate and why it is a stable place to put your money in. Plus, Chris also tackles diversification, financial institutions, self-directed IRAs, and more!
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Taking Back Control Of Your Money With Chris Naugle
I’ve got another great show and guest for my Duly Noted segment. Let me thank my sponsors first. NoteWorthy has a convention coming up. We’re hoping that’s going to be live. It’s going to be here in Orlando, which I am loving because I get to drive home at night for a change and don’t have to fly anywhere. We fully plan on doing that live and in-person. It is from December 3rd to 5th, 2020 Hopefully, we’re able to do that live. You can check it out at NoteWorthySummit.com. They have presale tickets going on. It’s going to be note oriented. I’ll be doing some opening segments. I’ll be there the entire weekend with you as a cohost. We will be combining real estate with real estate notes. It is a great destination to get to if you’re coming from out of the state.
NuView Trust is the company that I use for my IRAs and 401(k) and you should too. They’re a great company, great people. I’ve got to know them well over the last couple of years. They’re the absolute best in the business. All of these investments we talk about, whether it’s real estate, real estate notes, and you’re utilizing self-directed IRAs, 401(k)s, HSA, and all kinds of things. If you’re not, you need to. If you are and you’re looking for another custodian, NuView Trust would be my recommendation. If you don’t have an account, NuView Trust would be my recommendation as well. If you want more information on that, grab your phone and you can text Kevin to 484-848.
Finally, MWMFund.com. I’m proud to be a co-owner of this Regulation A+ fund. It means that you can be an accredited or nonaccredited investor. This fund is open to everybody. It’s a public fund and you can get invested in notes with as little as $200. The minimum amount to invest and open an account is $200. You can invest monthly. You can invest some money in there and you will own a small percentage of the entire portfolio managed by myself and my partners in the MWM Fund. Thank you everybody for visiting our sponsors on those websites and most importantly, getting involved with them as well.
My guest is Chris Naugle. He is an outstanding speaker and able to convey a message. I happened to meet him at a NoteWorthy convention in 2019 and sat in on his session and he ended up sitting in our mind. I think we both learned some things from each other, which I always appreciate, somebody open for information. He’s dedicated his life to being America’s number one money mentor. He goes above and beyond real estate. He goes into whole wealth creation and taxes and everything else that we’re not taught anywhere. He’s got the experience to back it up with over $30 million in assets that he has managing the financial service industry, tens of millions of real estate transactions. He has his own pilot show on HGTV. He’s been featured in Forbes, ABC, and House Hunters. It shows you how to build a true foundation for financial success. He owns several different companies which we’ll get into. I’m interested to know of all the investments that he has knowledge about, why is real estate seems like the cornerstone of where to be within that?
We’re going to have an episode of Duly Noted. In this segment, I want to talk about something that I’ve recognized in the industry. In my opinion, it’s a troubling little trend here. That is, you have everybody coming out of the woodwork. Some people have been around for a long time. Some people are new and offering training. Everybody has a projection on what’s going to happen and telling you to take action based upon that. I’ve looked at all the numbers. It’s something I’ve been doing for the last several years. I’ve made projections over the year at different times. This time around, it’s different. We’re in completely unknown territory here. We have the virus going on the pandemic. We have unknowns as to when the economy will come back. We have people shifting from cities into the suburbs. We have people not knowing if they have a job.
We have some people choosing to not go back to work because they’re making more money on unemployment, which will eventually run out, or will deadlines be pushed back? What about foreclosure? What about forbearance? Are they going to be pushed back? What about the market prices on supply and demand? What about all the jumbo loans that are going unpaid? What about the jumbo loans that are not being underwritten? What about the lower-priced properties and the financing available on those? There are variables in play. I think you can’t make a projection and try to time this market or start to adopt a new strategy based upon what you think is going to happen by the end of the year. Many things can change this time around. The government can pass one thing that completely changes your outlook.Real estate is the number one best investment you can put your money into. Click To Tweet
Look what they’ve done on the forbearance. It can go up to twelve months. Foreclosures got delayed and now that’s on a state by state basis. Many different variables are going on and you have people project, “Here’s what’s going to happen.” That is getting too loose with projections, in my opinion. You got one guy going around each city, “Here’s what’s going to happen in this city.” Are you kidding me? We don’t know what’s going to happen in those areas. There’s too much. Be prepared by educating yourself. Be prepared by reading possibly to things like this, my show, to another broadcast. I attended a webinar about the Coronavirus virus and how it’s impacting real estate and what’s likely to happen.
They didn’t overstep the bounds though. They were pointing out, “Here are all the things to think about.” I am not coming to a conclusion. I guess that’s what I have a problem with is people coming to a conclusion like, “Here’s what’s going to happen.” That’s the prognosis. That’s not the reality here. We do have to prepare ourselves and that prepare ourselves for all things. If you’re thinking back, hold back money and see what happens, you will probably end up losing out because it may not have the big crash as it had before. We’re in a different environment than we were on the last great crash. That was a lending crisis. When you go back and look at the credit availability index, it was high. Highest than we’ve ever seen. We’re not there right now. This crisis wasn’t caused by the same things. Therefore, the outcome’s not going to be the same. Our industry is better prepared. When you think about before the last crash, what our industry looked like to what it is now, there were things in the industry that we didn’t even have.
We moved to spreadsheets for the first time and then spreadsheets to an online trading platform that was unheard of. We had closings and such that used to be mail always and now we have audits and 3rd party closings, all sorts of changes. We have companies that filled in. You weren’t able years ago to make a phone call and get a BPO done in a couple of days. You didn’t have companies that would go out and secure properties for you. All these different things in the industry that were necessary at the time, they were created based upon the last crash. We’re much better prepared as an industry today, and we’re much better prepared as a country to go, “I don’t think we want to go through that once again.” You can see how things reacted, how people were helped in this last crisis was a heck of a lot quicker than it was in the last one. There were a lot of people who needed help when the market crashed in the year 2008. Unemployment was high. You had people who weren’t working, people who lost jobs, they’re losing houses. It took two years before the government got around to various programs to help people out and a lot of people missed out on that help. This time, it is quicker to reach out to help and everything else.
It’s a different crisis. It’s a different time. You can’t compare apples to apples in that measure completely. The point is you should start to look as a responsible investor if you’re in the real estate realm. Learn as much as you can about real property. Learn as much as you can about the note business. In the note business, learn more about the various types of notes. Some people are categorized or have learned or have been trained in nonperforming and some other people in performing Some people in second and some people in first. Myself, for example, I took a course on doing seconds. This is something I’ve never done before. Thankfully, I knew a lot more than I thought about seconds, but there were some pointers in there. There were some subtle differences and sometimes, those little things can add up to bigger things down the road that I learned by going through that process.
Why am I looking at seconds? I think there’s going to be opportunities within there. I can’t project that, but I’m preparing myself for that as a responsible investor. This is a great time, especially if you’re home, attending online courses or training. I have drastically reduced my training costs to help people get involved in this. Those prices are going to go back up. There are things that you can go to. I do a lot of free stuff on YouTube. Other people do the same thing and you can start to prepare for whatever happens. First mortgages, second mortgages are going to be important. Selling on terms, buying on terms or wraparound, mortgages, and things like that. Simple techniques to learn, but very powerful when you start to apply those. Start keeping track of real property prices, what are the opportunities going to be there? I think if you do that and you still find investments along the way, it makes sense to keep investing. If you stop and say, “I’m going to wait. I’m going to time it out because we’re going to have this big crash.”
You may be surprised and they start to leak inventory out slowly because the first inventory is not going to be by the arbitrators, who bought paper using borrowed money and were riding on the float. Those will be the first ones to crash. That’ll be followed by the non-qualified loans in all likelihood because those first notes with the arbitrators are already broke. They can’t sell the notes for what they have in them. Those will eventually start to go. Those are going to go to the creditors and the creditors will probably start to dull those out. If they dump it on the market, they’re dumping their own inventory. They’re going to get less of a price on it. Things have changed in this. Be ready. If it does happen, where there’s a big crash, you’re still prepared for that. If you’re buying safely right now, be sensitive to the investment to value ratio, calculate your risk.
If a property value drops 10%, are you okay? If it drops 20%, are you okay? You can buy inventory that way. With all the projections going on, with all the prognosis from all these experts that are saying, “Here’s what’s going to happen.” I’m telling you, nobody knows. The best thing to do is to be prepared. This is a good time to do it. If you’re home, if you’ve got the time, spend an hour or two a day on doing that. Be prepared. The old boy scout motto, be prepared and you’ll be ready either way when it happens. You’ll be invested the whole time because there’s a lot of people who are going to pass up good deals simply because they were waiting for something that didn’t happen. There is your Duly Noted segment for this episode.
I’ve got our guests here, Chris, how are you?
I’m doing great.
I want to say thank you for coming on and I liked what you had presented when I first met you. It’s great to reconnect and see what you’ve been doing. I mentioned in my intro that you’re all about wealth and wealth creation. It goes above and beyond investing in real estate or doing flips and things like that. It’s how to manage money, control money, even money school if you will. I think that’s important because there are things that everybody can learn. I don’t know why, but it’s not taught out there. In your own words, give us a little overview of the various things that you do. I’ve got some questions for you. Why the real estate of all things is the cornerstone? Go ahead and tell us a little bit more about yourself as an overview.
The first thing to understand is the money problem. I didn’t say your money problem. I didn’t say my money problem. I said the money problem. There is indeed is a money problem in this country and this world. That money problem comes down to one thing and that one thing is we are not in control of our money. Once you understand that that’s the problem, then the question comes down to, how do we solve the money problem? How do you take back control of your money? You then understand exactly what the wealthy do, what the multimillionaires do and the billionaires do. You then understand how do you use your money. That’s the biggest thing I teach people. I spent many years as a high-level financial advisor. I’ve been in real estate since 2016. I flipped over 260 houses. My wife and I owned a large rental portfolio. We do wholesale. We do some flips, not as many as we used to.
What we also do is educate people and I used to take students into FlipOut Academy, which was a real estate education. I have a strong understanding of money, a strong understanding of real estate. Why real estate? The number one thing about real estate is it’s the number one best investment you can put your money into. How did I learn this? When I was an advisor, my job was to raise money for stocks, bonds, mutual funds, ETFs, all the things that we got paid on. That’s what we were trained to do. We were professional salespeople. Don’t get it wrong. I’m not trying to put any financial advisors down, but I was one for a long time. We were taught to go out and sell. In that process, when we were selling, what I’d always see is I would meet wealthy real estate investors. You would then find out when you got into their numbers, you would look and say, “They have hardly any stocks. They don’t have any money in qualified funds. They have these silly self-directed IRA things.” Which I understood, but I didn’t fully understand.
They had tons of money in real estate. Do you know what that always meant? They had tons of income. Their income was off the charts. Their debts were lower than any of my other clients. When recessionary periods hit in 2008 and 2009, they were the last ones to come complain. They were saying, “I’m making more money now that the markets are going down.” That’s what sparked my interest. I was like, “How is it that all these wealthy clients that I’m dealing with, that I’m managing a little bit of their money when I want a lot more of it, how is it that they’re doing this with real estate?” That’s when I began that journey. Real estate is the stable place you got to put money.It's not about your actual resources. It's about how resourceful you can be. Click To Tweet
That’s interesting to me because I come from a different entry into real estate. I had a keen interest in it back even when I was in high school. I remember reading the books, How to Make One Million Dollars in Real Estate in Three Years Starting with No Cash. It intrigued me. I had an interest at some level, but again, I wasn’t taught about real estate. I wasn’t taught about stocks bonds. I grew up in a family that probably a lot of audiences are the same thing. We didn’t know how much your parents made. We didn’t talk about money. We didn’t do any of that stuff. When you grow up, you’re like, “I guess I have to figure it out.” As you were talking to me, “I’ve made mistakes with money too.” You got to learn one way or another. A lot of times with managing money, it’s learned the hard way which is paying the costs.
You are exposed as an advisor to the realm of assets. To then come back and say, “It’s real estate. I find that interesting because I did, at one point in time, get away from real estate, got into financial planning and financial planning very quickly.” I said, “That brings me back to real estate. Why don’t you go back to what that is?” The financial side of real estate is what I focus on with that. If that’s the cornerstone of it in generating profits and having write-offs, are there other things that you recommend to your clients and your students as to, “What do we do with these funds? Do we put more to real estate?” Do you start to look at diversification at some point? What’s your advice on those ankles?
There’re some people out there that don’t want to own real estate. They don’t want the phone calls on Sundays, on Easter, at Christmas. I’m naming all those days when you wouldn’t want to hear that the basement’s flooded with little brown things floating around. If you’re going to be a real estate owner, you’re going to get those calls. There’s a lot of different ways to invest in real estate. You can be passive or you can be active. You can do either one. The other thing too that I started learning in my little journey, not because of my involvement in real estate, but all the other people that I was surrounding myself with that I was bringing into real estate is they all had this misconception that they needed a ton of money. They made it all about their resources.
I kept telling them, “It’s not about your actual resources. It’s about how resourceful you can be.” I wrote the book on it, The Private Money Guide. This is what it was about to get money. The Private Money Guide is the book I wrote all about how to find the money for your deals. I opened up talking a little bit about control, the money problem, and getting back control of your money, but I never explained what that means. Real estate might be where we want our money to go, but you’re not going to get there if we first don’t have the controls in place of our money and we know where to put our money first. No matter what you’re doing, if you’re building a house, the first thing you have to do when you’re building a house is a plan.
You should have a plan, which means it should know where you’re going and to me, architectural plans in our lives are nothing more than understanding what is your perfect day and how are you going to have that perfect day every day? After that, you need a foundation. When we look at a foundation of where our money goes first, what do we do? Most of us have been taught to put money in banks. We pop our money in banks and that’s where our wealth sits. What does the bank do with our money? We don’t go into the bank and give the bank money and then all of a sudden, they put it in a little box in the back with them. No, they move our money. The second our money gets deposited that money is gone forever and it’s out there in motion.
Banks had been taught in our masters at moving money, but what are we learning to do with our money? We’re learning to give up control of our money by putting it in the bank that they can be in control, move that money. The funniest thing is, what do we get paid for doing that? Next to nothing. Maybe 1% in today’s world you’re making and nobody looks at what that means. That means you’re losing at least 2%. That’s if you believe the inflation numbers. You start going to the economist and look at what inflation is. It’s closer to 7%. Let’s pretend it’s only 3% or 2%. You’re losing money every year in your bank account. Not only that, if you wanted all your money back, let’s say you had $100,000 in the bank account. Can you walk into the bank and tell the teller, “I want my $100,000 back?” No, you can’t take your money back. What’s the second thing that we do with the money? I’m not going to pick on them too much.
Understand that the bank is in control of your money and they’re making 400% to 1,300% on the money you leave there and you’re losing money every year. Is that the best place to start with for your money? No. That is why the wealthy, banks and Fortune 100 and 500 companies know differently on what to do with money. You’ve never been taught this because nobody could get paid by what I’m going to teach you in a moment. The second thing we’ve been taught to do is what do we do when we get a job? We put money into their 401(k)s, their employer-sponsored retirement plans. Think about what we’re taught to do. I know when I was young, my grandparents and my mother always said, “Chris, when you get a job, make sure you put money into a 401(k) and ask them if they have a match. If they do put more in than match because someday you want to be able to retire.” My grandma worked into retirement almost to the day she died and my grandma always said, “You don’t want to be like us. You don’t want to be the 95% that have to work into retirement because we have to. Not because we want to.”
What did I do? I started putting money in 401(k)s and so did many of your audiences. They put money into these 401(k)s and they think that someday all this money is going to be there and they’re going to sell off into the sunset. Let’s peel the onion one layer. What are you doing when you’re putting money in a 401(k)? The first thing that you’re doing is you’re giving up your best, most valuable dollars. You’re giving up control of that money and you’re putting it in that account with that financial institution in hopes that it’s going to grow or not grow. You do this because of three reasons. Number one, it’s easy. They make it very easy to put money in 401(k)s. Number two, you got to the pretax deduction. Your money goes in and you don’t have to pay tax on that money. Number three, your hope of making money someday. You want to retire. That gambling instinct.
If I asked all of you, if you want to pay tax on the seed or the harvest, you would all say the seed. We’re doing the opposite. You’re bypassing the tax today to get the ability to pay tax on the entire harvest later. Let’s talk about the control aspect. What you did with your money by putting it there, as you no longer can take that money out and use it for opportunities today. Let’s say Kevin brings you an amazing note and it pays 20%. You’re like, “I wish I could do that. I should’ve, I could’ve, I would’ve, but I can’t, Kevin. I don’t have any money.” You don’t have the money available right now when it’s a short-term deal. It’s because you gave up control of your money. You can’t go to your 401(k) and peel that money back out. You can take a loan, but we’re not going to get into that. You can take that money out of the 401(k), but you’d be penalized and you’d be taxed on that money.
How are you in control of that? We are taught to do things with money we would never do with things that money buys. Would you ever go to the grocery store, buy a loaf of bread, come home, put it in your freezer, close the freezer door, and then wait, 5, 10 or 15 years, come back to that freezer, open the door, pull out that freezer, burned loaf of bread, look at it and say, “Yum?” No. You would never even eat that. Would you ever buy a car and wait, 5, 10, or 15 years to drive the thing? Would you ever buy your primary house, your dream house, and then wait, 5, 10, or 15 years to move into the house? You wouldn’t do any of those, but yet that’s exactly what you were taught to do with your money. Who’s in control? Financial institutions and what do they do? They charge you fees. We need to start taking back control, which means we need to change one thing in that entire equation of what I said. You get paid or you drive income and when you put it in the bank. Let’s change that one thing and that one thing is where your money goes first.
Here’s how you have to look at money. Money is nothing more than a big flowing river. When a river is flowing, if there’s more water, the river can expand. If there’s less water, the river contracts, but that river is always running and your money needs to be like that but your money isn’t like that. We’ve been taught to give up control and leave our money and park it somewhere in hopes of earning returns or compound interest where that money sits. Do you know what that’s like? Take that flowing river and take one of those little streams that go off to the left and it ends at a stagnant, nasty pond. What’s in that stagnant, nasty pond? Death, leeches, and parasites. That’s where your money’s at. Your money isn’t flowing. Would you eat fish out of that stagnant pond? No way. Do you want to eat fish out of the flowing river?
Your money needs to flow like the river, but it can’t if it’s in someone else’s control. If we knew of a place where we could take our money, where we could go first, but we put our money into this place. We need to have control, which means we need to be able to put it there and take it right back out. That’s step number one. Step number two, what you want is at least earn a guaranteed interest rate that’s going to beat inflation. What if this place where you’re going to put your money paid you a guaranteed 4% on your money? What if they also on the upside gave you and shared with your dividends? You receive dividends every year on your money too.Your money needs to flow like the river, but it can't if it's in someone else's control. Click To Tweet
Now, we’ve got control of our money. We can put it there and take it out. We’re earning 4% guaranteed on that money. No matter what, we’re pacing or beating inflation. Number three, this is the part where you’re all not even understand or believe me, what if you could then take your money back out of there, but never stop earning that interest or those dividends? What if you could deposit money in your bank and you can go into your bank 30 days later, take your money back out your bank teller says, “Chris, I know you’re taking all your money out of the bank, but we’re still going to pay you interest on that money.” “That’s nice of you guys.”
“Every year, even though you took that money out, we’re still going to give you a dividend. We’re going to return our surplus to you like we do all of our other members.” You’re like, “This is great. Can I have a sucker too?” “Yes. You can have a sucker.” All our bank is going to ask is that you pay us a little bit of interest on that money. “We’re going to charge you interest on the money you’re taking out, but we’re paying you more interest in dividends on the money than what you’re taking out.” “I give you my money. I can take my money back out. You’re still going to pay me the interest in dividends and you’re going to pay me more than what you’re going to charge me for taking my money back out?” The bank says, “Exactly.” You would feel like you found the fountain of youth. You’d feel like you found something nobody else has ever known about and you would tell nobody or maybe you’d run out and you’d tell everybody, depends on who you are and how much you believe in giving and gratitude and sharing.
Before you reveal to us what that is, first of all, segment sponsored by PaperStac.com if you’re looking for real estate note assets. They are there. On 401(k)s and things like that. That’s why I want to make a differentiator there between a 401(k) company-sponsored plan, where they pick the company and you can pick from a little menu of what they invest in versus things like a self-directed 401(k) and have the raw aspect to that.
I don’t know if you remember earlier when I was talking about the wealthy clients, they didn’t have the traditional retirement plans. They had self-directed IRAs, but I never knew much about those because I couldn’t get paid on them. A self-directed IRA takes your qualified funds, your old 401(k)s, your old IRAs, and it puts you back in control.
Like what your first message was. That got to be in control of that. I want to clarify that for my audiences.
That’s why I seeded earlier that that’s what these wealthy clients had, but not many people know about them. There’s only 4% of Americans that have money in self-directed IRAs and the biggest reason is us advisors couldn’t get paid on them. We never talked about them. It’s a magic thing, how that works you. We followed the dollar, self-directed IRAs. I’m going to get back to this magic fountain. Self-directed IRAs hold a whole another secret because you could make money from qualified plans, your IRAs, put them into a self-directed IRA, and then you can disperse that money however you want. You can do a direct to invest as long as it’s not self-serving. As long as you’re not buying properties for yourself and not following the rules, but you could lend money to Kevin and Kevin could pay you 10%, 15%, 20% on yours.
Self-directed IRAs are one of the secrets of the wealthy that not many people know about. All of you know about it because Kevin’s talking about it all the time. Back to this fountain over here, this magic bank account where you can put money, take money out, still earn interest on every penny of your money even when it’s moving. That is exactly what Albert Einstein talked about with uninterrupted compound interest. He called that the eighth wonder of the world. The greatest thing in the financial world. He was a genius and he believed in uninterrupted compound interest. All of us don’t know how to earn uninterrupted compound interest.
We don’t earn compound interest because that’s what we do. We park our money somewhere and we leave it to sit. The stagnant pond, banks believe inflowing rivers. They take your money and they move your money. They do the same thing with their money, which is why banks are the number one user of what I’m about to tell you this magic fountain is. The wealthy people I’ve met from the year 2014, straight up to when I had an incredibly wealthy individual on my show. Connecting these dots, I asked them that question, where does your money go first? What do you do with your money?
They all tell me the same thing, which is what I’m talking about over here. You’re like, “Chris, stop. Tell me what it is.” Here’s what it is. The problem is you’re going to think you know what you don’t know. All this is a specially designed and engineered whole Life insurance from a mutually owned dividend-paying company. That flowing river I talked about is nothing more than that. Something that was created way back in time. It was used by the Rockefellers, The Raw Child’s, Ray Kroc, Sears, JCPenney, Walt Disney. They all use this. Who uses it today? Biden and McCain. Why would they use this?
When I first met you, that’s what I saw. I was always taught and I’m sure some of the audiences agree. They’re like, “I was always taught whole life insurance. You’re putting your money in a hole.” I was intrigued by the topic and I sat in the back of the room with much skepticism but then to learn. I have an open mind and you did a great job laying that out. Tell us some of the little details of that.
I want to talk about the negatives that you brought up. Dave Ramsey, Suze Orman, all the gurus that talk about whole life being the whole. Dave Ramsey says, “The whole life is the worst investment there is.” I agree with Dave Ramsey if what you used Whole Life for as an investment, it’s the worst thing you can do. Whole life isn’t an investment. It’s a guaranteed place to put your money. The other thing that we’ve missed is when I say whole life Insurance, in your mind, you instantly think of this life insurance policy that’s going to pay money to somebody when they die. It’s got a terrible investment aspect of it because of what Dave Ramsey said. Precisely correct if you use and think of this as a regular off the shelf whole life.
I’m not talking about anything that resembles a regular off the shelf, whole life. This vehicle that I’m talking about, the specially designed and engineered whole life that we call infinite banking or privatized banking looks and is designed nothing like a life insurance policy. It has few characteristics, the only similarity that it has is number one, they’re both issued by an insurance company and number two, they both have a death benefit. Outside of that, there’s nothing else that looks the same. In other words, you can put money into them and then take that money right back out. Maybe not 100% in the first year, but the plans we design are anywhere between 50% and 90% of every penny that you put into them, you can take out immediately in the first 30 days. Many of you are like, “I can put 100% in the bank and take 100%.”Self-directed IRAs are one of the secrets of the wealthy that not many people know about. Click To Tweet
Your bank doesn’t continue to keep paying you money on the money when you take it out. Let’s go one layer deeper. If you found this place where you could put money and you could take that money right back, and then you could hold your money, but your money’s still working for you over here. Remember it’s still earning your interest in dividends. You’re now using that money. You’re holding it. What if you took that money then and paid off the Visa card that you use to pay Visa $200 a month. You took your money from your specially designed whole life. You pay off Visa. If the Visa was charging you 20%, and you paid these off, but then instead of taking that $200 and going and blowing it, you took the $200 and you put it right back over in that specialty design banking policy, that whole life over here. You made yourself a 20% return plus the interest in dividends you’re making go one layer deeper.
Let’s say you took the money from that plan and you invested it in notes. What was your return on your notes? Is it 5%? Is it 10%? Is it 15%? I don’t know. Whatever note you buy, that return you make on the notes plus the interest you’re making money twice. The same dollars are working twice as hard and that is why the wealthy use this. This is why banks use this. Why make money once when you can make money twice and then there are the protection aspects. These vehicles are protected against judgments and liens. That’s the same reason O. J. Simpson is still a multimillionaire is because of these vehicles. They hold the same properties in protections that very few other financial vehicles do where you can’t break that veil. That’s another reason surgeons, anesthesiologists, doctors love these vehicles.
Even in the note business, where most of my audiences come from. I always preach when you’re investing in notes, it’s risk first. It’s not a reward. We can then negotiate our reward if you will, based upon price and everything else there. Your philosophy in what you teach is what the pinnacle of this is controlled. That’s controlling liquid money, but also retirement through the self-directed angle. Then it seems if I’m following you correctly, compounding it would be the second one. Take on uninterrupted compound interest is the second thing that makes sense. That accelerates where you’re going. What about the taxation on these? Is that something that comes into play as well?
If they’re built properly, which means they obeyed the IRS guidelines called the mech guidelines. All the money that you earn inside the vehicle is 100% tax-free. The other thing too, that some of you may have picked up on, remember you put the money in there and you take the money back out, but you still earn interest. You’re probably still wondering how is that even possible? When you’re taking your money back out, you’re not taking your money. Your money is still sitting in your account, earning interest in dividends. You’re taking the insurance company’s money as a loan. Insurance companies have more money than we could ever spend so they give you that money freely and they charge you interest on that loan that they give you but the loan interest is less than what you’re earning.
Now, you’ve got a loan from the insurance company that you’re going to pay these off. You’re going to call Kevin and buy notes from or do whatever. Buy cars, learn how to get all the money back for every car you’re going to buy driving home. Now that I’ve let the cat out of the cage, you’re like, “I don’t like loans. I don’t want debts. I have to pay loans back. They’re bad.” What if I told you that the insurance company doesn’t care? If you ever pay that loan back? That’s even easier to understand because the insurance company made a promise to you to do. They made a promise to pay a death benefit the day you graduate. Someday they’re going to pay a death benefit. While before that death benefit is paid, the insurance company is going to look at how much money did you take from your plan as loans or how much money you took from their coffers. They subtract your death benefit and they wiped the loan out and pay the difference to your beneficiary.
This is the vehicle where you get to leverage the death benefit. You get to earn uninterrupted compound interest. You get to have the protection of your money. It’s all tax-free growth if built properly and you never want to take your money and put it there and leave it to sit because remember that’s the stagnant pond. We want to put it there, take it back out and make that money work harder. That comes back to the whole thing. None of that can happen if number one, you don’t have control of your money and number two, you don’t know how to move your money and make your money work for you. I have many people to talk to.
Most people in their lives, we go to school, we go through college and we are taught how to go out and work hard to make money. We have never been taught how to make our money work harder than we do. That’s what I teach people and I changed that one dynamic by changing when we’re the money that goes first. I teach them about all the things like self-directed IRAs and all the other great ways they can use their existing financial vehicles in a completely different light that no advisor would teach them because they can’t get paid on any of this.
Breaking it down again, control, uninterrupted compounding interest, and then with that money have the proper investment vehicle, which real estate notes. You can do whatever you choose but for reasons that we discussed, real estate is a great place to put a great place to go grow in the note business. We’re simply on the other side of the coin of real estate, which is the financial side of it. That is not a far stretch and it’s a great part of the diversification from the land-lording issues and removing part of yourself. I think it’s a great opportunity for people on all sides to get involved with real estate and real estate notes using this platform. Where can people learn about you and more about what you’re teaching?
They can learn more about what I’m doing on my website. Go to ChrisNaugle.com, the second tab over it’s a resources tab going there. Every single video teaching you, everything we talked about, and then a lot more is there and it’s all free. You can watch videos. You can find me on YouTube. I love giving free knowledge, teaching people how to do that and I’d like to do give your audiences my book. This book is Mapping Out the Millionaire Mystery. I have two books, this one in the private money guide, but based on what I spoke about, this book talks all about it. I’ll give this book to every single one of you for free and all you do is you pay the shipping and it’ll make it to your house. I’ll sign it you go to MoneySchoolREI.com/NewBook. All of you can get the book for free and that book will teach you a lot more about what I talked about.
If you follow along with me, you might be reading to it on the Apple show. I also do a whole transcription of this on my website. You can check it out there and all of the links, all the websites, everything will be there for you, KevinShortle.com. I’ve got the whole transcription. You can even read to it there if that’s convenient for you as well. Chris, thank you so much for carving out some time and being with us. That was enjoyable. It was good to see you again. It’s been a while.
You too, it’s my honor. Thank you so much for allowing me to come on your show.
Thank you everybody for reading. Please share the show with a friend. I do appreciate that and once again, if you can give me a nice rating, if you enjoy the show. I would appreciate that as well. It does help. Thanks, everybody. I look forward to talking to you in the near future once again, and hopefully, be out doing a live presentation before you know it, but I’ll keep you posted. I’ve got a free video there on how to buy real estate notes three ways to buy real estate notes for under $500. If you want that for free download that. All you have to do is put in your name and your email address, and they’ll put you on my email lists. I promise I won’t bombard you with emails, but I will reach out, let you know what’s going on of things that I think you will find of interest.
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About Chris Naugle
Chris Naugle has dedicated his life to being America’s #1 Money Mentor. His success includes managing over 30 million in assets in the financial services & advisory industry and tens of millions in real estate business, with over 200 transactions and an HGTV pilot show since 2014.
Chris knows what it takes to build the foundations for true financial freedom. In 20 years, he has built and owned 16 companies, with his businesses being featured in Forbes, ABC and House Hunters.
Today, Chris is the co-founder and CEO of FlipOut Academy™, founder of The Money School™, and Money Mentor for The Money Multiplier.
As an innovator and visionary in wealth-building and real estate, he empowers others with the knowledge of how money works and how to use that to break the chains of financial slavery. To date, he has spoken to or taught more than ten thousand Americans.
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