Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast.
Josh: So hey, welcome back. What is going on? How’s everybody doing today? Listen, I really appreciate you spending the time today to listen again to another episode of Accelerated Investor, whether you’re in the gym, whether you’re out for a walk, whether you’re hanging out with your family, getting ready for your day or closing out your day. I hope you’re super productive and I hope Accelerated Investor is a big part of your journey and thank you so much to all of you who have been sharing on social media who have been spending time with me. It’s just so much fun to come into your homes, come into your life and share some of these amazing strategies with entrepreneurs and today I have a really special guest for all of you that I’ll be interviewing. His name is MC Laubscher. He is the host of the Cashflow Ninja Podcast.
Josh: He is also a producer of cashflow. His passion is cashflow. He has a training course around cashflow. We’re going to talk a little bit about infinite banking and real estate and how to maximize your cashflow and your longterm wealth using some of the strategies that M.C teaches to his audience. He is also a former rugby player and a coach at Princeton and we’re going to have a great time today talking about his entrepreneurial journey and he has some of his cash flow investing strategies. So MC, what’s going on bud? Great to be back with you again.
MC: Yeah, absolutely. I’ve been looking forward to this. I always enjoy our conversation and I’m honored to be on your show.
Josh: Absolutely. Thanks for joining me. So one of the first things I love to ask my guests is not to necessarily go back and talk about their past or their bio, but to talk about their current money making strategies right now as we sit here today. What kind of things are you doing to either invest or to create more cashflow?
MC: Yeah. So the overall strategy, and this is something that, you know, being a former rugby player and an athlete playing at a high level and coaching, one of the things that I took from sports into my life into business and investing is modeling. Modeling successful behaviors of others and systems and processes. You know, I think it was Tony Robbins that says success leaves clues, right? We don’t have to reinvent the wheel. So a lot of the stuff that I’ll share too, as I always jokingly say, when I talk to folks, I didn’t come up with this myself. I just studied folks looked and saw that there were certain things that they were doing and implement it. So the framework that we use and that we teach is, you know, I call it like the four time CC, there’s four pillars as part of this overall framework.
MC: The first pillar is cash creation. So you have to be able to generate cash somehow, right? So, and what plays into that is cash creation money is just a medium of exchange and a representation of value. So what that means is you have to be able to produce and create value for others through your products or services and to the world, right? And by doing that, you have to invest in yourself first, that’s the biggest driver. So what else, what else falls into cash creation? Because a lot of people ask me, what do you do? Well, I start with the first pillar. I always invest in myself because if I want to generate more cash to fill my investments and create more cashflow, there has to be a main mechanism for creating cash. And this is again, something that I saw all successful, the really very successful entrepreneurs and investors have done.
MC: They have a mechanism for creating a cash machine. Now under this cash machine, obviously my business falls into and that generates cash for me. There’s a lot of ways that folks can do this. They could start a side hustle if they have a W-2, right? They can partner with someone while employed. Like there’s great ways of doing and starting side hustles. Then you could start a business. You can buy business. I know folks that are actively and passively involved in businesses in one way or another. So I always say start with cash creation. Number one, your your biggest asset and all starts right there. Skill up. Increase your mental capital, build relationships, invest in your business right there and build that cash machine.
MC: By the way, that mental capital and relationship capital, is the main driver of financial capital in your life. The cash creation mechanism. And that’s why very successful people focus on those two. And not necessarily just the financial. They know if they invest their mental capital, they skill up, they increase their value to the planet and to the marketplace and they build a soulful longterm relationships. They know that between those two, when you combine that now, stuff’s going to start going down and happening, right?
Josh: You know, what I love about this already, MC is like you’re talking about creating cash and cashflow, but starting with the mental side of it, the psychological side of it, instead of just jumping into a strategy to make more money or a hack or a logistical way to maybe have cost of funds at X and then invest the funds out why. You started with the mental part, right? Skilling up, building soulful, that’s the first time I’ve ever heard that terminology. I love it. Soulful relationships. And that is really the mechanism to create more cash, to start another business, create a side hustle, love it. Because many people just say, hey, give me the tactic, right? Tell me the thing, the way to make more cashflow and what you’re saying is I’m going to tell you the thing, but really where it starts is we’ve got to create more cash, more cash machine, which starts with you love it. Fantastic.
MC: And so, and, yeah absolutely. And first and I, it’s so important that you’ve got to have an overall strategy which incorporates all those things because in the end, you know, what we’re looking for is freedom of time, money, relationships, and purpose, right? So that’s the end game right there. That’s where we’re trying to get to. So we got to start with that in mind. The second part of it is cash capture. So now we’ve created cash. Money has to reside somewhere. You’ve got to warehouse cash somewhere, right? A mattress is not a good place. Maybe a tin can in your backyard, it’s not a good place. And maybe the bank isn’t as efficiently because they’re not paying really anything this year or haven’t done so for a very long time and nor will probably do so in the foreseeable future.
MC: So, yeah. So we have to look at where can we officially positioned capital to protect it from inflation, taxes, the tax man, and then other creditors. So you’ve got to make money and protect money. A lot of folks forget the protection part of it. So under cash capture, and this is something, which we’ll get into when I get to the tactics, but under cash capture, we’re looking at vehicles that we could put money in and also collateralize it. We’re going to get into the infant of banking insurance strategies, one of them gold and silver for example, through commodity finance. If you’re concerned about an economic collapse or a financial crisis, like I see a lot of people, you can actually buy gold and silver and leverage gold and silver to acquire more cash flow investments while you’re holding onto that gold and silver.
MC: There’s a strategy of how to do that. So you have to efficiently position capital. Under cash capture, I’ll also say cashflow recovery is big because there is a lot of folks unknowingly losing money every single day, thousands of dollars, and over a course of a year this could be huge and it might be a couple of minor tweaks in your, in your own life and in your business life. And that minor tweak that you make can free up thousands of dollars. I’ll give you an example. You know, if you have, if you have a certain liquidity saved up in cash capture, then all of a sudden like disability insurance, which a lot of entrepreneurs and investors have to protect their families, you can raise the elimination period because you now do have money to fall back on for the first, you know, two or three months. So you can raise the elimination period, which frees up thousands of dollars.
MC: You think about medical professionals and folks that have high costs of that, that’s just low, very low hanging fruit. But that’s one thing. Because people usually say, when I say I think when I say these things, Hey, what does MC talking about? Like give me an example. There is one example. The other, the third pillar is now we get into the sexy stuff, right? The cash flow creation part. And this is where you can be active and passively in investments. And you know, on my show, we cover everything from you know, commodities, real estate, all the different niches. We look, you know, we look at paper assets, there’s a lot of cash flow strategies, you know, and there’s an art and a science to wealth.
MC: Numbers, we can all figure that out. That’s a science sport. The art is your unique ability, your passion, your interest. You know, there’s some folks that they love what they do. You know, I’ve met surgeons that that’s there sole purpose. They love what they do, because they get to help people through their talents and their abilities as a surgeon, as a medical professional. So for them, they don’t want to create another business and be active, for example, in a real estate investments and have people call them and be involved with that. They’re more on the passive side. So their art and their unique ability and the main driver of their cash is that skillset. And then they partner with other folks with skillsets that are cashflowing ninjas in their spaces to drive it. So, you know, one of the big lessons that I’ve learned in my life, and this is kind of been my background, I started, this is almost two decades ago in a, in a real estate office that one of my friends, they were a very large owner of multifamily units in the Chicago area.
MC: And I saw kind of firsthand how the game was played because there is not a building that moved on that side of the city or thinking of moving that wouldn’t come to them first. Because they had the network, people know that they had the capital to move on it and if they weren’t going to buy that building, they knew of someone else that was going to buy that building. So people would reach out to them first.
MC So I was sitting in that office going like, man, like, imagine you’re a weekend warrior trying to go up against these guys. You have no, there’s no way you know myself as an individual could get the same deals in that area than those guys because they’re in it. So instead of then the world of scarcity mindset, trying to compete with those guys, right? Or feeling sorry for yourself, hey, why don’t you partner with someone?
Josh: Bring them deal flow, bring them money, bring them partnerships, bring them assets, bring them asset managers, contractors, and find a way to just get in, right? Even on a small piece of the action, instead of fighting the behemoth 800 pound gorilla, like partner up with the gorilla, right?
MC: Partner up with a gorilla. There’s obviously a lot of different asset clauses that folks or niches that folks are in right now. You know, unaccredited investors are looking at a lot of single family real estate for passively or, you know, active folks. And then there’s a lot of syndications and multifamily, mobile home parks, assisted living and memory care facilities is one too. And there’s also some really cool other things. One that I’m particularly involved in myself too, which is more of a resort rehab kind of project in this area. So, and again, you know, for me personally, I’m a passive investor in a lot of different areas and in this particular investment I started to be passively involved. Now I’m a little bit more actively involved because you know, what are we in now? This has been a process of about nine months of learning that side of the business and learning more about that. So I feel comfortable and being more involved in that project actively.
MC: And alongside the Cashflow Ninjas in that space that stole, you know, with me in, in the project. So partnering with people is something that I’ve learned personally. And then the fourth pillar from a strategy perspective is cashflow control. So we’ve made money, we’ve protected money, we’ve multiplied money, but now you’ve got to protect this. You got to build a wall around this kingdom. Because unfortunately the world that we live in is extremely litigious. And becomes more litigious, you don’t even have to do anything wrong in the United States, which I love this country, but you don’t even have to do anything wrong here to get sued.
Josh: Perception. Perception is reality. Perception is you got screwed. And I’m going to Sue somebody and it doesn’t cost them anything except for lawyer fees to just come after them. And oh, by the way, they only pay their half of the lawyer fees. So it’s not like, I think in the UK where you know, if you lose, you pay both sides of the attorney fees. You know, that seems to be a lot, more fair in my mind. But that’s not how it is here and probably won’t change. So you got to control your cash and protect it. Especially because you never know when something’s going to come around the corner. I mean, people can wait a long time and then feel like something went bad. And then here they come and they come with a chip on their shoulder can be very, very expensive.
MC: Yep, absolutely. So that’s where your legal team comes in and set up proper asset protection strategies. There’s a proper estate strategies, you know, one thing that I’ve seen from very wealthy folks and family offices is, folks don’t like to own everything and protect it. They like to control it. They like to control everything that they build. They don’t necessarily have to be, you know, Bob or Sarah on the ownership label basically.
MC: So there’s a lot of different things that you can do there. But I think, you know, and again, this framework is this something that keeps, it keeps coming up and I just see it over and then you start to see it in quotes. Hey, I use my business to create liquidity that purchases my real estate. And then you get an insight into family offices that talk about, hey, you know, most people just focus on 10% of the money and this is under the cash capture pillar. Most people just focus on 10% of the money and they try to multiply that. That’s like swimming upstream. Why aren’t focused on 100% of your money and in that process, finding cashflow leaks and reducing taxes?
MC: You know, this was a big aha moment for me, Josh. Like I was sitting in a family office for the first time with three advisors there. And I’m like, all right, I’m going to get the good stuff now. Like show me, you know, show me the magic, like all these crazy stuff that you’re doing. And I was like sitting there and my jaw almost dropped how simplistic they keep things and, and it was like, there was like three CPAs coming in and attack strategists like for a meeting. And they said, this is, this is what we do. You know, and the, and I remember the guy saying to me, think about it this way, MC, If you can reduce the taxes and there’s a lot of zeros with these families involved, but if you could reduce this family’s taxes by 20% this year, or basically wipe out their, you know, for most of the taxes which those do, there is no return in the marketplace that can come close to that.
MC: Now you freed up, you know, if you’re cutting a six figure check every year for uncle Sam, you know, imagine recapturing that and now all of a sudden they’re six figures more to now leverage to create more cashflow and investments. So there’s, you know, it’s a couple of things that are picked up, but this framework kind of just kept coming over and over through the years as I just, you know, studied and interviewed folks,
Josh: So let’s do a deeper dive on some of these pillars and specifically like the cashflow creation. You know the ways to basically create yield spread or yield between cost of funds are an asset and the ability to redeploy. So you mentioned the golden silver owning gold and silver. I’m interested in hearing more about that because I own physical gold and silver and then this infinite banking strategy with insurance. I’m also interested in that because we have cash and cashflow. I also own insurance. So for a selfish reason, let’s do a deeper dive into those two techniques. So tell us more about that. So if you own physical gold and silver, which I do, and I have a lot of friends that are thinking, okay, look at 2008 , 2009, 2010 golden and silver specifically went from $7 an ounce to $48 an ounce, and now it’s back down to like $17, $18 bucks. But I’ve never heard of ways to leverage that or create cashflow from it. So help me understand.
MC: Yeah. So from a cash capture standpoint, so now you’re going to enter the vault of your kingdom. This is something that should be impenetrable, right? So on that side, a lot of folks are comfortable putting at least 5% to 10% of their, their actual, they’re cash on hand in gold and silver as a hedge against inflation and for wealth insurance. The biggest thing that people talk about is they say, man, you know, yeah, I know I got to won some own, some gold and silver, but it doesn’t do anything for me. It just sits there and you’re at the mercy of the market. And because you know, obviously that market is heavily manipulated in some ways. If you look at what’s going on and pay pretty close attention, but it is wealth insurance. So the concept and the principle here that I want to leave with your listeners is collateralizing one asset to acquire another.
MC: This is what very wealthy folks do and that’s how they think. By the way they think like, and real estate investors do this all the time. They buy a property, they rehab and fix it up, they force appreciation in it. What do they do then? They refinance it, get the money out of the property, which is tax free. That’s not income, it’s just the return of capital at that point. And then it’s rolled into the next property. So you’ve used the equity in one property to acquire another one. So essentially took real estate to buy more real estate. Now you can do this with other assets. So gold and silver for example, there are institutions that will give you a loan, a secured loan buy your gold and silver holdings. And it’s also very competitive rates. It’s not hard money rates because there’s collateral, you know, and listeners of yours know that, you know, once there’s a big obviously interest rates, interest rates spread for loans that are hard money loans, loans that are not secured by anything, loans that are secured.
MC: So there’s actually institutions and banks. I don’t know if I would completely jump in with someone like JP Morgan and Chase that does it, but there’s other folks that do this, that allows you to get a loan secured by your gold and silver. Access the liquidity, quote unquote, if you want it that way, to deploy and invest in real estate. So folks that think that there’s a crisis coming and, but there’s other opportunities that come up. This is one way to use one asset to acquire another asset. Now, the collateralization principle, by the way, this, there’s so many ways that you can do it. Stocks, there’s certain institutions that allow you to take a brokerage account and certain stocks in a brokerage account and get a loan secured by those stocks. It’s called asset based lending. Now obviously there’s margin calls if there’s a crash, right?
MC: So, you know, there are certain things that you can do, but that’s one way of doing it. By the way, there’s just a company, you know, for folks that have paid a little bit attention in the crypto space too, they’re rolling out the same thing. There’s a company doing that in the crypto space where you can actually put down your Bitcoins as collateral to get a loan from that to acquire something. So you can use your, if you’re into Bitcoin and audit the gold and solar, you could use that to acquire real estate as well. So that same principle was used actually in the 1970s where a lot of folks, there was actually high interest rates by banks. So someone would go into a bank and let’s just say that $100,000 and they say, hey, Mr. Banker, can I get a CD?
MC: Because CDs paid, you know, double digits at that stage, let’s just say it by 10%. And the banker would say, absolutely, give me that hundred grand and they would pay him 10% but the money’s locked in for a year. Now that same person comes into a real estate opportunity and he’s like, man, I just put a hundred grand in a CD. What can I do? So he goes into the bank and say, Mr. Banker, can I get a loan secured by that a hundred grand in my CD? And the bankers like, well we’re in the business of taking money in for deposits and lending money to people. So of course I’m going to lend you the money. So you can access 90% of that, let’s just say of that CD and get a loan, acquire the real estate, take the cashflow from the real estate to pay the loan back.
MC: That’s what folks did. And this was one of all my coaches did like, you know, he was just sharing this is what he did during that time. And I learned about this, you know, at that time. The insurance strategy and infinite banking, is basic and what infinite banking is, is basically putting you in charge as the banker with deposits and lending and quote unquote reclaiming the banking function within your own system and your own economy. So how does it work?
MC: It’s based on insurance and I mean I came into just for a background for your listeners, I came into this as a real estate investor. I didn’t come from the financial services side at all. So my mind was blown the first time that I saw folks do this, but essentially what, how you structure infinite banking is infinite banking is also known as high cash value life insurance, but they use a dividend buying whole life insurance policy with a mutual insurance carrier. Mutual insurance companies are owned by the policy holders, so they get a dividend distributions from…
Josh: Right, right. I started my financial services career back in 1997 with Northwestern Mutual.
MC: Yup. There you go.
Josh: It was a huge company. Obviously very well respected AAA rated. So this is right in right in my wheelhouse.
MC: Exactly. So you have like New York life, you know, Northwestern, Penn Mutual, Mass Mutual, you know, Guardian. Those are companies that have been around for a very long time. They have a track record of just paying out dividends to their policy holders. So those are mutual insurance companies and again, they’re all different. They’re all unique in a little way. They’re all great. I sometimes see people get lost in the weeds about or argument about mutual insurance companies. I’m like, man, if you’ve been around since the mid 18 hundreds and you’ve paid dividends for a hundred years consecutively and you’ve, you know, provided this value for people, I mean that says that says it all for me.
MC: So that’s who it’s structured with the policies are structured very, very differently. So, people, you know, most people have a bad taste in their mouth when they hear insurance. What I talk about this whole life insurance policy is that seven, will you try again, I just want to state this. It’s different for everyone with age, how all the different other underwriting variables, but most of these policies you try to have 70% or even a little bit more if possible of cash of premiums available as cash value year one and you have this readily available very, very quickly within a week or so. So when you put in $100,000 and I’m just using that amount because it’s simple, nice, easy math for me. $100,000 you’re looking to have $70,000 and maybe a little bit over available in cash value and again it will be different for everyone with age underwriting and all that kind of stuff.
Josh: Yeah. So we’re just talking kind of about the financial piece of it. There’s going to be like, cause I know as a cancer survivor somebody might be rated where more of the premium dollars go towards the cost of insurance. So let’s just assume everybody’s 30 years old and super healthy. Everyone’s getting the same level of premium costs and putting in a hundred grand if $70,000 available year one, then what happens?
MC: Yeah. So then basically then you’re going to build that up. So you know over the, you’re going to have $70,000 available in year one, but let’s just say there’s a couple of years of premium that you fund, you can actually back that insurance policy six months by the way to, to get more premium into the policy. But let’s just, now it starts to build up every year your equity, the money that you’ve put in gets that you have available, gets closer to the money that you’ve put in. Usually by around five years you’re over where you would’ve put in $500,000 grand, you have a little over $500,000 grand available in 10 years, you would’ve put in a million, maybe there’s $1.2, $1.3 available. They’re in their tax free. Why do we use this vehicle? Well the number one, the money’s guaranteed and it’s out of the stock market.
MC: So usually this is a 4% guarantee over the life of the policy. Number two is the growth rolls up every year. So there’s no, you know, you never see the values of a policy dropping like in the markets, right? So it just rolls up and the cash value just grows. And there’s dividends on top of that. Most companies between 6% to 7%. So you’re going to get the between 4% to 5% an internal rate of return, but it’s tax free. So it’s a little bit of apples and oranges to compare that to other things. And this is a savings vehicle by the way, not investment, but we put this into that because of that. And then as asset protection and most of the, you know, 50 States, every state’s a little bit different, but it has as a protection.
MC: And of course the death benefit for estate plan. So ties into cash capture and cash control because there’s a lot of smooth transfer of liquidity efficiently through proper estate planning. So for example, the death benefit proceeds goes tax free to the beneficiary or the trust. So it has all of the other things. And you can add disability riders to this. So there’s surgeons, for example that has something like this or a lot of the medical folks, you put a disability rider on this, something happens to you well the premiums just by then by the insurance company.
Josh: That’s what I have. This disability waiver.
MC: Yep. So there’s a lot of different things that you can add pieces to this policy. But now let’s get to the tactical stuff. So 90% nine zero of the cash value is available at any given time for a policy loan and a policy loan. Basically, here’s the process of it. You fill out a one page sheet you send it in and within a week, usually five to seven business days, you have a check or an ACH deposit depending on their que that they have. So there’s no credit checks. And also this isn’t like a he lock where you know, most folks saw this during the last crash where they had a he lock that they leveraged and kind of use in a similar fashion. But now all of a sudden the values plunge, you don’t have access to the majority of the money in the he lock anymore, if any, right? So this is something where you’re going to be guaranteed at policy loan. So then you take that and the, the, the loan rate at the moment is 5% it’s based on Moody’s Corporate average yield, corporate bond, average yield.
MC: So it’s 5%. So you take that money at 5% and now you invest in something else that produces cashflow. So for me, this project that I’m involved with right now, which is a resort, a rehab project, what I did then, I would, I filled out my form, I took a policy loan at the 5% of the, of the policy loan. I put that money and I put that money into this investment that only uses cashflow and then I would pay down my policy loan number one because this is just where I warehouse my cash. So people would say, well now you’re paying a loan back to yourself. And I would say, you know, here’s the mindset switch right there. If you have a hundred grand in a bank and you take that and you invest in real estate and you get cashflow from the real estate, where do you put the money?
MC: And people would say, well, I’d put it back in the bank. That’s exactly what you’re doing here. You’re just putting the money back in your own bank in this vehicle. So you fund the policy. 90% of the cash is available. Let’s just say there’s $100,000 available if your borrowing. You borrowing at 5%, it’s interest only annually, and then you’re vested at a higher interest rate. So let’s just say you invested it, you know, even at 8% to 10%. Then the cashflow from that project and pays down the policy loan, and you can do it over so you could fund money into this vehicle warehouse it safely. Leverage it to invest back into your business, to grow it invested in your investments. This is your money, by the way. A lot of folks, one of the common questions is, well, what can I not use it for? Well, it’s your money.
Josh: It’s your money use it for whatever you want.
MC: Yeah, exactly. Your asking me for what can you not use the money in your own bank, right?
Josh: And then as you continue to fund, let’s say you don’t have to fund this forever, right? You could fund it for five to seven years. There’s certain rules that are called a MEK Rules where you can’t fund it too much because you can’t just over plow all the money into the cash values there. So there’s an actuarial formula that you can only put, but you usually got to fund this thing for about seven years, then you could stop. But then the cash values continue to go up based on the guarantee. And also based on the dividends from the mutual insurance company continues to grow, which becomes more cash values become available to borrow. And I actually have, it’s interesting, I have a couple of my investor clients who’ve done this. I’m not, so I’m familiar with parts of everything you described, but I’ve never seen all of it come together.
Josh: One of my investors is said to me for years, hey Josh, I’m going to invest $200,000 with you, but I’ve got to get it back on February of next year to, you know, basically pay my premium and put it back into my policy, then I can reborrow it seven days later. So it’s interesting to see him just moving money, cashflow back and forth. But here’s a real example, right? Same exact thing. You started a couple of years ago, plowing money into a vehicle just like this. He borrows money at 5%. He invested in one of our apartment deals. The apartment deal pays 10% preferred return with the goal of within two years, stabilizing the apartment, refinancing the apartment, paying back all the principal and getting cash out refi proceeds, which are tax-free, right? So he then puts the principal back into his life insurance policy. He also gets cat cash out, refi proceeds that he can now spend if he wants to, but it’s tax free.
Josh: And he now owns a certain amount of equity in that apartment deal in perpetuity that he basically obtained through leveraging another vehicle as opposed to just taking it out of his w two income, right? It’s genius because now over the course of the next 10 years, he might invest five or six times or four to six times in various apartment deals and stack up that cashflow through five, four, five, six deals using the same dollars which he pulled from his life insurance policy tax-free. Genius. Love it. Genius. So you help people do this, right? Like your course, your training, your coaching, even your podcast, a piece of it centers around this whole concept, right?
MC: Yeah, absolutely. And what you just mentioned there too is from a tax standpoint, just think of it this way. So if you generate cash under cash creation in your business, there’s a lot of favorable things that you can do tax wise in your business right. Now you put it in this vehicle, which you’re not buying, you know, this is after tax money. So this is not deferring taxes to the future. It’s done. It’s in this vehicle grown tax free. And you could actually through some of these policies, well you could structure it so that it’s a private pension and that’s some of some of the clients that we work with, they do the same thing. They say MC, you know, I’m a surgeon, I do open heart surgery. I just want my money in a place where I don’t have to watch my smart phone constantly and look at my Apple stock.
MC: Basically I can think of that stuff when I go into an operating room and I have to do perform open heart surgery. So where can I put my money for that? And then what are other ways they produce it? So money’s in there. So for him, basically he wants a private pension that you can do that through this vehicle. Then on the real estate side, which you just mentioned in that example, look at that tax favorable income that you get from that real estate. And you don’t own the real estate inside the insurance policies, it’s still two separate things because a lot of folks, that’s a common question that folks have too. So you get all the maximum tax benefits of the vehicle where our single cash tax free and you get the maximum cash benefits of the real estate outside of it.
MC: So, yeah. And I just want to touch on another point that you mentioned there are different strategies for everyone. I mean, no case is vanilla. This is not, you know, oh, I just want a policy and the policy just happens. It’s like, no, no, no, no. It’s again, back to you what you want to accomplish, your goals. You know, when we’re young, we start out, we might not have a lot of money, but we have a lot of time. There’s a strategy for that. You know, if we’re getting to the golden years in our life, you know, if we’re in our sixties and seventies and even eighties, there’s different strategies. You could still implement that. And people say eighties MC? Yeah, there’s grandchildren, right? There’s legacy family, you could structure a family bank actually as part of your overall cash control and estate plan utilizing this.
MC: So there’s different strategies for, and then in the middle, of course, there’s folks that are now in their journey, they’re making good money, they have time and they’re making good money. And statistically your highest income years is 45 to 55 right, for most people. So that’s kind of now you’re making, you’re at the highest income level statistically, and you have some time available. So yeah, so there’s a lot of moving pieces here. But I think you know, yeah, that the principle around the tactics is that you’re using your money more efficiently, doing many, many jobs simultaneously and collateralizing different assets in the process to efficiently create cashflow.
Josh: So MC let me ask you like, why are so many people, you know, average, let’s just call them average Americana. It could be people making $100,000 a year or $800,000 a year, $1,000,005, but so many people are just plowing money into the normal 401k get my company match, I put the money in savings, I buy mutual funds. Like it’s just so boring and more risky and there’s more fees in all that stuff. What do you hear typically from people as far as, not necessarily in objection, but why aren’t more people doing some of these things? Why are so people, so many people I think get so passive about their wealth accumulation strategies and not more actively managing their income, their cashflow, their money. You work with a lot of people who are taking action. So what’s the difference there?
MC: You make such a great point. So the first thing is, we don’t learn anything about money in school. Our universities, we’re not taught anything about money, we’re taught how to work for companies and earn a living and maybe enough skill sets to do that. But we don’t learn anything about wealth creation and money and how to actually go out and make money. And the other thing is we’re taught to be passive and just passively put the responsibilities of everything in our life in other people’s hands. Just look at the health crisis, right? You know, that’s a huge part of it too. So people put the responsibility to someone else’s hand and it’s someone else that should be, but it should take care of me for my health or something like that, right. The same with money. So we’re taught to give our money to people that are potentially smarter than us when they’re not, when they’re absolutely not.
MC: And the other thing is media. I would say financial media and celebrities, you know the inflammation and stuff that they share. I would argue that 99% of it is not only, I guess you would say wrong but it’s very destructive. You know, in the long run for folks. Yes you could, there are certain generations that time markets and guess what some of the promises that are made with them, some of them will be actually met, right? But you have to step back and look at the big picture and say that that was actually by pure pure luck. And I mean that, I mean that’s a podcast in itself. The whole financial media, a celebrities kind of thing where you know, you just looked at my corporations are listed on the stock and stock exchanges. Those stocks are part of mutual funds and their managed by money managers and then the advertisers.
MC: I think financial media is consistently one of the top five advertisers of all media that’s out there. This is according to Nielsen, I just saw a report so people get this information bombarded. So when we talk about strategies like this, this is something that, you know, the 1% is doing a very small amount of folks. So, one of the things, let me give you an example of, of dangerous, dangerous advice or wrong advice. So business owners, we work with a lot of business owners, so business owners, they create a business and some of them are just ninjas. I mean the product services, ideas, it’s phenomenal. So they start their businesses and they start to grow business. So what happens, a financial advisor comes in and he’s like, oh, this is great. This guy is doing really, really well. And he’s like, well, you should give some of that money to me. And what does the financial advisor do? Well he goes and invested in someone else’s business.
Josh: Yeah, he’s investing into typically, you don’t need an advisor, and I’m not going to pick on anybody here. But yeah, a lot of the big financial planning firms are like, okay, I have an advisor who really is a glorified salesperson. And the reason why I can say that is because I used to be that guy, right? I was a financial planner from 1997 to 2004 and I was like, yeah, let me take your money, but let me put that in mutual funds. I’m essentially investing it with another critical money manager and that money manager is then taking it and investing it in someone else’s business.
Josh: Typically a massive corporation that’s publicly traded on the stock market. And I didn’t even realize at that time, like I thought I was a financial planner. Basically I would put the plan together. And I would put all the proforma the numbers on paper, but then I was essentially selling or moving money from my client’s account into their portfolio account, which was really investing in someone else’s business.
Josh: So I was relying on that business to fund my client’s retirement. That was because that was all I knew and was taught, right. Versus like when you look at healthcare, right. So we’ve been through some massive health scares me, my family, and we’ve learned over time to manage our own care. Whereas like if I go talk to a surgeon, the surgeon is going to recommend surgery. If I go to talk to an internist or a gastroenterologist or whatever, he’s going to recommend something that has to do with his part of the body, right? So they’re all going to recommend things that tend to feed into what they know. What we realize is we go talk to a lot of people and figure out like, well this guy’s recommending this for this reason and surgeons want to do surgery and this guy wants to do this or that because it’s what they know.
Josh: If you look at money, it’s the same thing. Like you talk to a financial advisor that sells life insurance. He’s got to sell life insurance because that’s what he knows. If you know somebody who sells mutual funds, there’s some mutual funds because that’s what they know. They’re going to sell annuities because that’s how they make the most money. So it really comes down to the concept of we have to manage our own care, manage our own money. And we work so hard at, you know, 10 hours a day being good at a job, right? How much time are we actually spending managing our own care or managing our own money? A lot of people say, well, I don’t want to do that I’m not good at it, so I’m going to hire somebody else. Well then you’re just relying on their advice, their care to take all the dollars that you’re working so hard to make.
Josh: So I think it really starts with empowering people and giving them the advice first of not just going in and investing with somebody else, but going and learning, educating yourself, getting the information yourself so you can manage your own financial affairs. And the people that I find that are very, very, very involved in managing their money, they’re the best at it. They grow it, they grow it strategically, they make less mistakes, they’re more proud of it. And at the end of the day, I think they have more personal fulfillment from it so that when they’re going on a trip or they’re paying for their kids or their grandkids college education. It’s because they feel really empowered by the fact that they owned it. They grew it, and then now they’re seeing the fruits of it.
Josh: Like, I think about one more comment is this, you know this guy David Swenson, who’s the Yale endowment fund manager says that mutual funds are $13 trillion lie, right? That 96% of actively managed money managers underperform the related index and then they charged fees for underperformance. Yet most Americans, that’s all they do is throw their money in mutual funds. Why again, because of the, like you said, the advertisers, the information, the education, there’s so much money plowed into advertisements. They feel like that’s the norm. That’s actually not the norm. That’s the lazy man’s way of losing money longterm. That’s how I look at it. What are your thoughts?
MC: By the way, the advertising to the people that buy mutual funds is paying for that through the fees that they charge you. The 12B1 fee. Yeah. It’s another one on top of that.
Josh: And it even says in the prospectus, the 12B1 fee is a marketing fee. They even tell you that in the prospectus we’re going to take your dollars, charge you a fee so we can market to the next guy to buy the same crud. It’s amazing.
MC: Yeah. I think the central message is teaching people how to fish and not fishing for them. And that’s the big thing is learn how to fish. There’s a lot of different things. And once you start to learn how to fish, you’ll learn that a lot of the stuff that we’re doing with regards to money and a lot of the advice that they’re actually the complete opposite should be done, right. So, you know, there’s, the bank banking and financial institutions and corporations benefit from the advice that is propagated to the masses. That’s just like, I mean you just have to take a step back and see who benefits from that by looking at a financial statement. That’s one of the biggest aha moments in my life is that when I realized, hey, there’s a debit or in a credit or financial statements and they’re completely different and what’s on my books as liabilities.
MC: You look at personal loans, student mortgages, you know, auto loans, all these things are actually someone else’s asset on another financial stipend. And if you figure that out and you put two and two together, you realize that most of it is geared towards, well forcing profit for these guys. I mean, that’s, I would say is, is one of the central things is, you know, speak to a lot of people get good advice from or get advice from different people and get good advice from good advisors. They cost money. It’s an investment for me, it’s not an expense because advisors, you know, I call it the return on adviser, you know, and I’m a tax guy.
MC: There’s, and I say, you know, I have that conversation too. There’s a return on that advisor. It’s not just the return on the money that you’re making. How much if somebody is charging you a certain fee, for example, for tax strategy, how much of that of your taxes are you recouping with regards to the fee that’s there? And once you start to see that, you know, you’ll actually see that there’s a lot of good, good folks doing some thoughtful stuff out there.
Josh: That’s fantastic. MC, listen, as we kind of round third here and head for home, just two final questions. One, uh, is really about empowerment. So many people, they hear this, they think about these strategies, think about building wealth. They’re learning more, which is what we really want to do is teach them how to fish. Where do you recommend somebody start? So let’s say somebody who’s been stirred up by this conversation and they know they want to make some changes, but they’re not really sure what to do next. What do you recommend? What’s the next step?
MC: Yeah, there’s actually some very good books on this topic. You know, I would actually recommend any everyone read The Creature From Jekyll Island to understand how money works. That would be the first thing. And then the next thing is, and was on my journey and I read, Becoming Your Own Banker. Obviously most of your listeners have probably read Rich Dad, Poor Dad, but Becoming Your Own Banker is a very, very powerful book by Mr. Nelson Nash. Yep, there you go. He’s holding up the book. That’s fantastic. I would recommend that’s where you start because if you’re going to be a student of money and trying to create wealth, you have to understand what money is and what it’s not and actually understand how the game works because it is a game. It’s a game of debt and taxes. You know, as Robert Kiyosaki said, and if you could figure out that game and the rules of the game, by the way, is the tax code so.
MC: So who better to have on your team, professional rugby teams, you know, even teams that I coach at Princeton, we get a referee and you know, during practices to figure out certain gray areas of how people are going to ref and officiate it, right? So the tax guy, that guy coming in telling you this is the rules and this is what you can do and this is basically how it’s going to be officiating. So yeah, so I would say start with those two books. And then, you know, we have some resources as well.
Josh: Yes. So tell us about that. So I know people are going to want to follow up and they hear you. And I love your energy by the way. And you’re obviously like the way you talk, you can just tell you’re really, really know your stuff. So I know you have a webinar, you have your own podcast, like tell us about those resources and we’ll put those in the show notes.
MC: Yeah. So, they could go to Your Own Banking System. It’s a free webinar and then there’s a free course. Um, and that’s my wealth creation firm, I don’t call it a wealth management firm because there’s no money managed, but it is the insurance brokerage part of it. So we educate the courses there, AtYourOwnBankingSystem.com and webinar and folks can reach out to us through, through that vehicle and the podcast Cashflow Ninja. A lot of these things that I just shared, there’s a ton of episodes with different specific things. You know, you put infinite banking in there, you’ll find us talking about infinite banking on there and so forth that we cover cashflow, cashflow strategies, cashflow from all different investments in niches.
Josh: Yeah, fantastic. MC, listen, I have so much fun today, man. I really appreciate you coming on and spending more time with me and my audience. Just been a ton of fun today.
MC Hey, thank you so much for having me and it’s always so much fun to get talking with you. We always have a fantastic time and really appreciate you.
Josh: Yeah, thank you. Thank you so much for being on and taking the time. We really appreciate it.
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Most real estate investors have the same goal when it comes to their money: they want to build long-term cashflow, find ways to strategically protect and multiply their income, and eventually achieve financial freedom.
This is where M.C. Laubscher comes in. M.C. is a cashflow specialist for Producers Wealth, as well as the creator and host of the Cashflow Ninja podcast. He considers himself a wealth strategist, educator, and financial freedom fighter.
In this podcast, M.C. explains how he teaches real estate investors, entrepreneurs, and business owners to use their money more efficiently, in order to create long-term cashflow. His goal is to help people educate themselves on the world of money management, so they can take control of their finances. M.C. also shares insightful information on infinite banking and explains how he teaches people to collateralize one investment to buy another.
- M.C.’s 4 pillars for creating a profitable real estate investing strategy
- How M.C. builds “soulful” relationships that lead to greater cashflow
- The importance of pursuing active and passive investing strategies
- How to protect the cashflow you’ve built (asset protection strategies & wealth insurance)
- Examples of projects that M.C. is involved in currently
- Resources that M.C. offers for people who want to learn more about managing money