Transformative Principal

jethro-host176_1_06-17-2024_143640:
Welcome to the special episode.

This is a simulcast episode of My Bonus
Money and Transformative Principal.

And if you haven't been
listening to my bonus money I

want you to go check that out.

Lots of good stuff over there.

Talking about how educators can
earn some passive income and do some

different things with their money.

So what.

Here's what we're gonna talk about today.

We've been talking about this idea
of how to make your money work

harder through options trading.

That's what's been our focus.

We've talked about some other things also,
but really that's been a big part of it.

And one of the ways that you can look
at that is that is risk on money.

That's money where you
are taking risks on it.

And then you have risk off money which
I learned from our guest today Hutch.

And so we'll get to him in just a second.

But that idea of having risk on
versus risk off money and what

you do with money that's in those
different piles is, is important

to what we're chatting about today.

So we are going to invite Hutch on.

Hutch is the founder
of banking truths.com.

You can search for him online banking
truths.com or just look for Hutch

Hutchinson and you'll be able to find him.

Lots of really great stuff.

Tons of really informative YouTube videos.

So, Hutch, welcome to my bonus Money.

Great to have you here.

Hutch Hutchinson: Yeah,
thanks for having me Jethro.

And my mother did not
name me Hutch Hutchinson.

It's John Hutchinson, but John is such a
forgettable name and I like, if I'm in any

kind of group situation, they say, John,
there'll be three of us looking over.

So, in many circles I was already going
by Hutch and it just works and people

remember it.

So

jethro-host176_1_06-17-2024_143640:
Well, and I have interviewed a couple

people lately who had double first names
like Jennifer Jennings for example.

And

so that can be, that can sometimes
be confusing, Hutch, welcome.

Glad to have you.

So let's talk first about this idea
of risk on versus risk off money,

and give me your perspective on that.

Hutch Hutchinson: Yeah, sure.

So in general, like if you go look at a
hedge fund, you look at banks themselves,

what gives them the opportunity to
earn those greater rates of return is

usually some kind of pool of reserves.

I.

Like a bank is able to do lending because
they have a certain amount of reserves,

there's actually reserve requirements.

Most traders, whether they be
institutional, professional, or

even whatever recreational traders,
they're able to take risks.

In strategies where there's a lot
of volatility, a very high risk,

high reward because there's a bigger
pool of money that if they fail

they can pull from and try again.

Same thing.

I actually just got back from Las Vegas.

I was playing some smaller world series
of poker tournaments, poker players,

they, the function of how big of games
or how big of tournaments they play is

a function of how big their bankroll
is, which is usually a lot of money.

Part in cash, not in a mattress,
but usually in a bank these days,

there's a high yield saving.

There's something called a high yield
savings account, but for the last 15

years, a high yield savings account,
the rate of return started with a dot.

And so.

One of our flagship
videos@bankingtruths.com.

In fact, if you go to banking
truths.com/banks, I'm sure Jethro will

have it in the show notes as well.

As we have a four minute video where
we actually look at the balance sheets

of major banks to see, well, where do
they put their safe and liquid reserves?

And although they do have some money
in cash or bearing accounts they

have quite a lot of money in.

Life insurance policies
on their key executives.

And what we do is we take that big
institutional thinking and bring it

down to family, fiscally responsible
families, small businesses.

My wife is an educator.

She teaches tk.

They've asked her to be an administrator
before, but she has a gift.

She loves doing what she does.

When we're in the grocery store, like.

Little kids and babies will
always be looking at her.

She just has that energy, so
she's right where she needs to be.

And when I actually started in
the life insurance industry.

I actually, before I learned
about infinite banking, I learned

about something called pension
maximization, because that was

the biggest crux of our retirement
plan was this state funded pension.

And there actually is a strategy where
you can pair it with life insurance

to make sure you're able to get the
highest possible pension payout.

Now, what we can talk about today is
how we can pair all of those things.

Together because the educators that are
listening to your show and learning how to

use Robert Robinhood excellent interface,
by the way, I trade options myself.

Again, they're only gonna do that
for a small fraction of their money

to try and earn that extra alpha.

Meanwhile, they're gonna have
an emergency fund in cash or a

certain amount of money in cash.

And meanwhile, they had this massive
part of the retirement fund sitting

in stirs or pers or whatever it is.

That is promising them income for
the rest of their life and there's

a way to weave a life insurance
product designed a certain way and a

way to funnel money through there to
work, enhance all of those efforts.

jethro-host176_1_06-17-2024_143640: so
let's look at this from that perspective

and there's a lot of different paths we
can go down to talk about this, but we

wanna talk about that pension thing today.

Pretty much everybody listening
to this probably has I have a

pension in the state of Utah.

I only taught there for
eight years, but it exists.

And so what can we do with that pension?

How can we maximize that so it'll
be as beneficial as possible to us?

Hutch Hutchinson: Yeah, so let's
talk about that and we can weave

it back into, because really a life
insurance policy that's designed

for pension max or infinite banking
is kind of like a now and later.

Remember those candies
now and later, right?

They taste good now and
they taste good later.

They last forever at one point.

I thought about using that as part
of my branding, but it's copyrighted

even though they don't exist anymore.

But really it should work.

Something like that, right?

Like one of these now and later candy.

It can be there in its existence
and the fact that it's there can

help you maximize your pension
whenever you decide to take it.

You're a young guy, Jethro, I
assume it'll be another 10, 15,

20 years before you do that.

Obviously, the longer you wait, the
more you get as a lifetime payment, but

you can actually use the equity in that
policy to help support your, whatever

ventures you're doing, to build wealth,
whether it's investing in real estate

or trading options or whatever that is.

So the biggest,

jethro-host176_1_06-17-2024_143640:
What does that mean?

You can use the value,
is that what you said?

You can use the value in that pension.

Hutch Hutchinson: No, you can use
the value, the cash value of the life

insurance policy to enhance those other

things.

So let's talk about that for a second.

A life in a permanent life insurance
policy always has two parts.

It has a death benefit and it has
a cash value now with a whole life

insurance policy, which I realize with
some media celebrities is a dirty word.

But when you design a whole life policy
properly, there is a way to actually

compress those commissions to actually
overfund it to where instead of saying,

what's the least amount of money I can
pay for the most amount of life insurance,

the way we solve it for our clients is
we're saying, what's the least amount

of insurance we can wrap around your
cash so that the cash performs well?

Because the costs, the commissions, the
fees, so to speak, contrary to popular

belief, are not based as much around how
much money you're putting in the policy.

It's more so based on how
much death benefit it's

And so when you have a permanent
life insurance and it has these two

parts, the death benefit part is
what will actually help you enhance

your pension, and we'll get to that.

But there's always a cash value.

Think of it almost as like
the equity in your home.

Like if you sold your home right now, it
would go for a certain purchase price,

but you may not have that much equity in
there if there's a loan against it, right?

So the equity is the difference between
what the purchase price would be

and how much how much that loan is.

But life insurance policy with
no loans really, you're prepaying

for a future death benefit.

And so you actually build equity in the
cash value that you can use along the way.

And so let's just go back to the
death benefit portion for a moment.

We'll get to the cash value part.

When we talk about the options,
the existence of a permanent death

benefit, a death benefit that doesn't
go away is contractually guaranteed,

actually allows you to get a higher
pension payout than if you didn't have

jethro-host176_1_06-17-2024_143640: Okay.

Wait, how

Hutch Hutchinson: here's why.

jethro-host176_1_06-17-2024_143640: So,

so having a death benefit allows me
to get a higher pension payout from

TURs or PERS, or whatever it is

when I retire.

Hutch Hutchinson: Yep.

jethro-host176_1_06-17-2024_143640:
me about that.

Hutch Hutchinson: When you go to
retire, and maybe you've already

seen some of these estimates, they're
gonna give you different options.

Like they'll call it option A, option
B, option C, option one, option

two, option three, or the a hundred
percent option, the 75% option.

The 50% option is maybe a lot of people
are familiar with, which basically the

a hundred percent option basically says,
Hey, you can have a hundred percent.

Of what you're vested in this
pension, let's just call it, let's

just call it 10 grand a month, right?

For just

round numbers.

You could have 10 grand a month
for the rest of your life, but if

you die, your heirs get nothing.

And a lot of people are married and
so they're not gonna choose the a

hundred percent option or option A.

They're not gonna check that box.

There's gonna be a box
below it that says, look.

Instead of a 10,000 a month,
we'll give you 9,000 a month.

But if you die, your wife will get half.

She'll get 4,500 a month, and a lot
of people will choose that, right?

If they say, I want my wife to
have the whole thing, they'll say,

okay, we'll give you 8,500 a month.

And if you die, your wife, your husband,
your surviving spouse will get all 8,500.

And so obviously the more you
promise to other people in the

future, the less you get now.

Right.

jethro-host176_1_06-17-2024_143640: Yep.

That makes sense.

Hutch Hutchinson: Let me ask you
this question, Jethro just think

of this like an educator right now.

Don't think of it in terms of
product, but if you are gonna

give money to an institution.

TURs or purrs to promise you
to promise somebody else who

you love money when you die.

What would that product be called out
on the free market if you're gonna

give an institution money to make sure
somebody else gets money when you die?

What's that

called

jethro-host176_1_06-17-2024_143640:
life insurance.

Hutch Hutchinson: It's
called life insurance.

And what's interesting is educators.

Always have a very significant life
insurance decision they have to make

when they retire, which is arguably when
life insurance is the most expensive

it will ever be and the hardest to

jethro-host176_1_06-17-2024_143640: Yeah.

Well, and this is why I wanted to talk
to you because after watching the video

about this, it became very clear that
you can make this decision it in your

twenties or thirties or forties, and it
seems like it would be a lot cheaper.

To make that decision now than to make
that decision when you retire, when you

may have other health complications or
you were a cancer survivor, or any of

those kinds of things that really affect
your ability to get that kind of life

insurance later in life, or you're obese.

Hutch Hutchinson: Absolutely.

I'll take it to a
different level with you.

It even still pencils if
you're in your mid fifties.

And here's why.

With any actuarial assumptions
and actuarial just means any

insurance company has actuaries.

I.

They're math geeks that figure
out exactly how many people die.

Like the joke is, insurance companies
already know when you're gonna die.

Maybe not your date actu Exactly.

But they already know with
given your health today, when

you're gonna die on average.

And those same actuaries are who work
forts and pers and stirs, they hire

actuaries to figure out what kind
of pen pension you're entitled to.

And so.

The reason why it's still pencils
for people in their fifties as long

as they're healthy is because with
any kind of major sweeping, actuarial

assumption, their pricing in the
good, bad, and the ugly health wise.

So if you're average health or above
average health, you can, and you can

qualify for that in the free market.

With a private insurance policy, you
actually get, call it better pricing

than when you just get lumped in with
the good, bad and the ugly because

the actuaries for tourism and pers,
they don't know what your health is.

And so they have to av give you the
average where probably some of the, your

listeners right now, the people they
work with aren't in the best health.

But they can qualify for their own
health and just naturally get better

pricing as long as people can get
a standard rating or better if they

get a preferred rating or preferred.

Plus, we found that at pencils
almost right up until retirement.

jethro-host176_1_06-17-2024_143640:
Now that, okay, so let's

take a step back again.

You said if you it, your death benefit
upon retirement your death benefit.

Having this life insurance policy
actually helps you get more money from.

From your retirement, your pension, what
is which one of those does that work?

Does that mean you get the a hundred
percent option where you get all

and your spouse gets nothing?

Is that what you mean?

Hutch Hutchinson: So it could be, and this
is the math that we help our clients do.

So we would have them run the
printouts from tours per stirs and

show the different options, and
then they can clearly see how much

they'd be giving up in retirement.

we show them like, look, as long as
you have X amount of death benefit.

That can exist and we can actually,
we pair that with another calculator.

It's actually an annuity calculator,
which is another insurance product.

They use actuaries.

We're not saying to buy an annuity now,
but we're saying like, look, if you

died the day after you retired, could we
take this death benefit that your family

would get and put it into an annuity, a
guaranteed annuity that would create the

same after-tax payment, if we can do that.

Then yes.

Having the existence of a whole life
insurance policy with a guaranteed

death benefit actually gives you
the confidence to go in there and

check the a hundred percent box.

jethro-host176_1_06-17-2024_143640:
Because the reason why we don't check

the a hundred percent box is because
we're afraid that if we die, our

families are gonna be left destitute.

Our spouses are gonna be

left destitute, and so we
don't want that to happen.

So we choose the 50% option,
and that makes it so that we

are sure that after we die.

Then our beneficiary is going
to continue on and have money

coming in, which is your spouse.

'cause your kids don't get
anything from the pension, right?

Hutch Hutchinson: Well, it's just so
everybody knows Jethro, and I did not

script this because I wanted Jethro to be

jethro-host176_1_06-17-2024_143640:
Yes, I'm very raw.

I'm sweating more in this interview

than I have in months.

Hutch Hutchinson: Well,

it's quite warm.

We're gonna give you that too.

Jethro.

So, so here's the deal.

What you just said is
gold, and here's why.

Here's why.

Owning your own life
insurance policy is better.

Not only from a numerical
standpoint, we can calculate that,

but you brought up something else.

What happens if you check the 50% box?

You never heard this podcast.

You didn't know us, you and your
wife constantly check the 50% box to

make sure that she's taken care of.

And the day after you retire, you're
driving off on vacation, and you get

into a car wreck and you both die.

How much do your kids

jethro-host176_1_06-17-2024_143640:
Well, they don't get anything.

Hutch Hutchinson: All that money, all
that equity that you paid in and was

contributed on your behalf is now gone.

So it's not gone.

It just gets disseminated
amongst the other educators.

It's kinda like the old Roman soldier,
this is how life insurance was started.

A bunch of Roman soldiers were going off
to battle and one of the Ys went around

with a cup and everybody threw a coin
in the cup and whoever's husbands didn't

come back from war split up the cup.

That's the origins of life insurance,
and that's basically what happens

when you choose the 50% box.

But let's just say on the other
hand, you listen to this podcast,

you did some calculations.

You knew that your wife would get,
or your wife or husband would get

the after the same as the 50% box.

But you could take the a hundred percent
box and let's just say you did it early

enough to where your policy's totally
paid up by the time your retirement.

So you don't have even have a bill,
but then you go off on vacation.

You die that first day.

So you wa you die, your spouse dies.

She's the primary beneficiary
who's the secondary beneficiary

is gonna be on that life insurance

jethro-host176_1_06-17-2024_143640:
Probably your kids

Hutch Hutchinson: So
would they get something?

jethro-host176_1_06-17-2024_143640:
if through the life insurance policy,

but not through the pension still.

Hutch Hutchinson: That's right.

Yeah.

There's only four possible
things that can happen.

So after you go in, in whatever
box you're gonna check.

It doesn't matter.

Like let's not even talk about
a hundred percent, 75, 50% box.

Whatever box you check, there's only
four possible things that could happen.

You and your spouse can both
live to life expectancy.

That's the most common and
the best possible outcome.

So if both you and your spouse
live to life expectancy, would you

have been better off checking the
a hundred percent box, the 50% box,

jethro-host176_1_06-17-2024_143640:
hundred percent for sure.

Hutch Hutchinson: How about this,
and this depends on jurisdiction.

You check the 50% box to make sure,
in this case, we'll just say your

wife, Jethro, your wife is protected.

You check the 50% box.

She goes on a girl's
trip, and then she dies.

The day after you check the 50% box.

There are some jurisdictions that
will let you choose a new beneficiary.

Many of them don't.

You just kind of lost
those coins to the tin

jethro-host176_1_06-17-2024_143640: Yeah.

Hutch Hutchinson: Right?

So if you check the 50% box and then
your wife dies early, your beneficiary,

would you have been better off
checking the a hundred percent box?

jethro-host176_1_06-17-2024_143640: Yeah.

Hutch Hutchinson: Yeah.

The other one we talked about is
both you and your spouse di early.

That's the real risk of not checking.

That's the risk that's there, but
we can actually calculate it to

where we make sure that everybody's
taken care of including the kids.

And that's not the risk.

The risk is with this last
one, the risk is you check.

It's a hundred percent box,
but then you die early and your

wife's less left with nothing.

So we can calculate it to where
we make sure the policy will do

at least, that, at least that.

And the fulcrum point, the point
of testing is the day after

you retire, what's great is
every year you live past that.

Now you actually have too much
death benefit because you don't

your wife isn't gonna live as long.

Meaning if you died five years after
you took out the life insurance

policy, the amount she needs in an
annuity five years later when she's

five years closer to the grave, we
don't have to put as much an annuity.

So therefore you don't need as much death
benefit, which means you as the educator

with the pension, get to spend a little
bit of your cash value along the way as

a supplement, which will lower the death
benefit, but you don't need as much.

Every year you live, you don't need as
much death benefit to make sure that the

50% option is provided for your spouse.

Does that make sense?

That was confusing a little

jethro-host176_1_06-17-2024_143640:
Yeah, so, so

the question then is.

If you have the life insurance
policy, then your heirs, your kids

are taken care of, regardless of
which of those scenarios happens.

Right.

Hutch Hutchinson: True.

Going back to the four options
the, one of the major benefits of

this situation is you get to pick
and choose your beneficiary, and

you get to change it as you go.

So obviously if you ex you, when you
have a life insurance policy, the more

you spend with the cash value, the less
death benefits there for your wife.

But as you get older, she doesn't
need as much death benefit.

And then obviously if you die or
whenever you die and she gets the

death benefit, that's for her.

But if both of you die at the same time.

Yes, the kids are taken care of.

They're just next in line.

You're not sharing it with a bunch of
soldiers in the tin cup of the pension.

You have your own private life insurance
policy that goes to your heirs based

on your health, your premium at

jethro-host176_1_06-17-2024_143640: Yeah.

Okay.

So ha, having this set up then
makes it so that you have.

Better options at your retirement
because then you get to decide how

you want to do that, and you may still
choose to do the 50% because you, even

though you feel like you're taking
care of, you may want your wife or

your spouse to have even more money
after you're gone for whatever reason.

Right?

So, but you get to choose that.

Whereas otherwise you just you have.

Hutch Hutchinson: You painted yourself
into a corner, you get to that meaning

you painted yourself into a corner.

That's the only option.

And we get the bulletins from
the stirs and it's like, oh, well

we changed the assumptions with
inflation and everything else.

You're totally at the mercy.

And so I think it, I.

When you and I were talking about
your podcast when I thought this might

resonate with your listener, it seems
like what you're teaching them is to take

more control of their situation, right?

Their educators, their specialty is
in educating children, but to educate

yourself about your own money options.

Not to the point where it's like
another full-time job, but this

is something that you can do to
exactly give you that, to give you

more control and more optionality.

For when you go to check that box.

Not to mention as you're paying for this
life insurance policy, there is actually

cash value that builds up along the way
that you can use for whatever you need,

right?

If the bottom falls out of the real estate
market and there's right opportunity

abound, or now all of a sudden some of the
stocks that you were looking at valuation

just got cut in half because you know the
sky's falling and right, and you wanna

own these companies, you can actually
use the cash value in your policy.

Right to acquire some of these

jethro-host176_1_06-17-2024_143640:
Okay, so, so, that I think is gonna be

a question for our next conversation,
but I have another question

about this building up to it.

what you are talking about is essentially
going to require me to have another

payment that I'm putting something
into over the course of my career.

Right?

So what does that look like and.

Like we hinted at that a little
bit, but you can use that money for

other things leading up to that.

But what does that look like?

How much is that going to be?

Because my tour's contribution
that the district pays is typically

like seven to 15% depending on
where you're at in the system,

what your level is.

Hutch Hutchinson: it's a big number.

So let's talk about that.

Where nobody likes a new bill.

And so whenever people hear
about any kind of insurance, they

just automatically equate it to
like, I don't need another bill.

Right?

I only got so much coming in.

I got my own kids I want to
put through college, right?

We wanna do stuff.

We want to go on vacation.

I'm not saying to just stop your life.

However, a strategic redeployment
of cash flows is possible.

And what I mean by that is.

A lot of money is passing through
everybody's hands, six figures a year

through Everybody on this call is just
passing through our hands and where the

infinite banking comes into play, and
I realize we'll talk more about this,

is you can redeploy some of the money
that you're normally just spending for

your predictable inflows and outflows
and pump it through a policy designed to

be your own bank, and it will naturally
have its own velocity and momentum.

It is gonna require you to carve off
a certain amount of money and you

get to choose what that is where we
typically help find it for people.

Like some of the places we find
people, money is places like this when

people are overpaying on mortgages.

That are 3%.

I understand if you're overpaying
a mortgage that's seven or 8%,

but overpaying a mortgage that's
3% in spite of what you've heard,

has not been tested, measured
mathematically that's a good idea.

So any overpayments of mortgages
at that low money, it's almost

like getting free money.

You're borrowing below inflation and
if the rate of return that you can get

on this policy, just the cash value.

Long term can beat the hurdle rate for
the debt you're trying to knock out.

This is an easy place to redeploy
money that's really not serving you

because as soon as you overpay the
mortgage, it's out of your control.

If you want it back from the bank, they
have to give you some other kind of

jethro-host176_1_06-17-2024_143640: Right.

Hutch Hutchinson: I just got
approved for a HELOC today.

They approved me today.

But if the sky started falling and I
wanted to buy stocks when they lost 30 or

50%, that's usually the time they don't

jethro-host176_1_06-17-2024_143640:
Yeah, exactly.

Yep.

Hutch Hutchinson: So that's one place.

Another place that's really easy
is when they're contributing

to a 4 0 3 B or a 4 57.

What's that money for?

Why would your audience be
contributing to a 4 0 3 B or 4 57?

For what purpose?

jethro-host176_1_06-17-2024_143640:
That's because we don't have the pension.

Or we want an additional
retirement support.

Hutch Hutchinson: That's it.

So in, in my wife's district,
they call it pension two.

You have your pension, but they, you con
you, they advocate and suggest that you

should contribute to a 4 0 3 B and or 4
57 for supplemental retirement income.

Well wait a second.

Well, let's just think
about this for a moment.

To me, that's almost like having one
foot on the gas and one foot on the

brakes because the foot on the gas.

The foot on the gas is putting
money in a 4 0 3, 4 0 3 B, and 4 57

to get extra money in retirement.

But then if you have a strategy
that's going to cause you to paint

yourself in a corner and check the
50% box that lowers your pension,

that's the foot on the brakes that
they don't even know they have on it.

And so if the purpose of whatever
cash flow, whatever financial energy

you're pumping into a 4 0 3 B,
4 57 is to enhance your pension.

We don't know what the stock market's
gonna do between now and then it will

probably enhance your pension to some
degree, but we don't know how much.

But we can predictably say, let's just
make sure you get 100% of your pension.

Or even if you go from 50 to 75,
because maybe you can't afford a

policy big enough for the a hundred,
but you can get from 50 to 75.

Isn't that a better way to
get supplemental retirement

jethro-host176_1_06-17-2024_143640:
Yeah, for sure.

So, so let's talk about that
cost piece because you, there's

gonna be the cost to it and so.

Do you need to be super
wealthy to start this?

Like, can you start with a lower
insurance policy and maybe it's just,

it's not even to the 50% level, so
you still have to start with 50%.

Can you adjust it over time?

Is it something that you can say,
when I'm a first year teacher, I can

do a policy that's this big and then
after 10 years of teaching, I can

change the policy and make it bigger?

Can that kind of stuff happen
until you start figuring out.

How you can actually afford it.

Hutch Hutchinson: It's a
great, it's a great question.

There's a lot

in there, but Let's hit 'em all.

So the truth of the matter is, once
you start any kind of permanent

insurance policy, you can't increase
it without underwriting again.

That

means

like getting medically
tested and all that stuff.

And by the way, thankfully, like a
ai, AI is all the buzz these days.

There are multiple companies now that
are doing AI underwriting that if you're

pretty healthy and aren't on prescriptions
and everything else, a lot of times

you fill out a DocuSign application.

For 15 minutes, they, you give them
permission to go scan your health records,

scan your prescription record, scan
your driving record, and they go out

to the web and like we're getting like
24 hour approvals at the best rating.

So you may not even need that.

So the answer is you cannot
increase it without re-underwriting.

However, we have workarounds for that.

So most people know what a
term insurance policy is.

Have you ever heard of convertible term

insurance?

jethro-host176_1_06-17-2024_143640: of
it, but I don't totally understand it.

Hutch Hutchinson: Yeah it's pretty simple.

Like I liken it to renting
with the option to buy.

First of all, when you have term
insurance coverage, that's like,

it's like a renting, right?

You're renting coverage for 10 years.

You're renting coverage
for 20 years, right?

And you have this rental agreement,
whatever it is, when as long as you pay

rent, you have coverage, you stop paying.

You you get evicted, right?

And when the lease is up, you're done.

Unless you renegotiate a new lease.

Obviously with life insurance, the older
you are, the terms will be worse, right?

You're not as good of a tenant.

It's a life insurance company.

And when you buy whole life insurance,
it's almost like buying versus renting.

Now you've bought.

The property you've bought the right
to that million dollar death benefit or

$500,000 death benefit or whatever it is.

And again, your cash value
accrues equity over time.

So just going back to how
we use convertible term.

Convertible term is renting
with the option to buy.

So there are such contracts out there,
like in the real estate market, you can

rent or lease with the option to buy.

You can actually do that
with convertible terms.

So most of your listeners
probably have a term policy.

They have a million dollar term
policy or $2 million term policy.

We can refinance that term
policy or just add on to it.

And that not only gives them.

More coverage that just temporary
rental coverage now, but whatever

rating they get on that term policy,
they can actually convert that to

permanent without having to retest.

The pricing will adjust according
to the age of that time.

But that gives them the
guaranteed right to lock it.

They get the best rating, they can lock
that in and whenever they get a raise, so

like my wife just got like an 11% raise
'cause they didn't get raises for like the

last three or four years and the union.

So when they get something like
that and all of a sudden there's

extra cash flow they can take
whatever convertible term they have.

And with the convertible term,
it's almost like a plot of land.

You can bifurcate the land, you
can carve off a piece of it.

Convert some of it and
keep the rest as term.

jethro-host176_1_06-17-2024_143640: So
the reason why I asked that question

is that it, my impression has been
that you have to make this decision.

Early on and then you're stuck into it for
the rest of your life, unless you want to

go through this big hassle and it sounds
like there is a way to structure it so

that you make the decision early on and
then you work towards that throughout your

life and you adjust as time goes on rather
than saying, well, I made the choice

when I was 21 and my first year teaching,
and now like, I'm just stuck with it.

And that's no good for anybody.

Hutch Hutchinson: So you're right.

The misconception you had
is probably pretty common.

Probably a lot of your listeners have
the same mis misconception when you're

working with knowledgeable agents.

There's a way to structure a
combination of products to where it

gives you, again, a lot of optionality
and it, you can layer into it.

You can layer into it as cashflow allows.

jethro-host176_1_06-17-2024_143640: Yeah.

I like that.

Okay, so we've got a lot
that we've talked about.

We've got a lot to think about in
preparation for another conversation.

One of the things that we wanna talk about
next time is why making this decision

allows you a benefit later, but then also
allows you to do things with that money.

As you're getting towards retirement,
rather than waiting to have

access to it when you do retire.

Now, we all know with our retirement
plans, we can't access 'em until

we are, I think it's 57 and a half
at the very early, 59 and a half,

thank you.

59.

and a half at the very earliest.

And so if you need access to new
money before then, for whatever

reason you can't touch any.

Retirement policies.

So, so we're gonna talk about next
time how to access that money that

that will benefit you later before you
get to that point, so you don't have

to wait till you're 59 and a half.

That's more about the infinite banking
type stuff that that you teach about.

So where can people go to learn
more about what we've talked about

today, like maximizing the pension.

Hutch Hutchinson: Sure.

So I have a video that's been
on YouTube for a long time.

When you look at the cover, it's actually
a picture of my wife with her a hundred

percent, 75, 50% option right there.

If you go to banking truce.com/pension or
pensions, I'm gonna have that redirect.

Straight to that video.

It's like a little Easter egg
because it doesn't necessarily

have to do with infinite banking.

It's really a niche strategy amongst
educators that has been around forever.

Like if you just look up pension
maximization online, you'll see

it's been ar been happening forever.

But again, it just makes sense.

So it's like a little 11 minute
video that I made and I think.

Given this podcast, it, I realize
how many people are in the dark

about this, and since then, our
clients have not, excuse me.

Our agents have not only
helped teachers, principals.

Firemen, police officers, FBI agents
we've helped a lot of people that have

this similar thing, but it's really
just a niche thing for people with

government pensions and it is the
crux, the core of your retirement.

So.

Putting the most energy.

I think it's great learning.

The option strategy and the stuff you're
teaching 'em, I think will really help.

I enjoy it too.

It's fun, but making sure that the base,
the core part of their retirement is

increased on a guaranteed basis, I think
is so important Where it'll help you to

look at the video just to understand the
concept where the rubber mill, excuse

me, where the rubber really meets the
road is to have your numbers modeled out.

And if you go to banking
truce.com/schedule.

You can actually put something in
there or on banking truth.com/pension.

There'll be a link to schedule and to
really do this well, it is definitely

more science than art where we not only
need the pension numbers, but we're gonna

stress test that and cross-reference
that with not only insurance rates,

but future annuity rates on the age of
your surviving spouse to really stress

test and to make sure at no point.

Are you worse off than if
you check the 50% option?

What most people find though, is that
not only are they protected at least to

the level of that 50% option, but that
every year they live, they have all this

equity in the cash value that yes, you
can use along the way now, but when you

retire, what's so powerful about that
cash value, and I don't know if you knew

this Jethro, but it's actually tax free.

You can take it from life insurance
tax free, almost like a Roth.

And it's because life insurance is
afforded special tax treatment because

they do so much for widows and orphans.

The government basically incentivizes
that people put money into life

insurance policies that don't go
away because it does provide a

social good that's less widows and
orphans they need to take care of.

So they give you this ancillary Roth
like benefit in your cash value.

And why that's so important is every
educator that's listening here, all their

pensions are gonna be fully taxable.

Fully susceptible to future tax changes.

I don't know about you, but I could
think of a reason or two or 35

trillion, and I'm talking
trillion dollars in national debt.

Why?

Taxes need to go up for everybody
and the money that's in your life.

Insurance will be immune from that.

So having a retirement supplement
is important, but having a

retirement supplement that's
also tax free is also very

jethro-host176_1_06-17-2024_143640:
Yeah, very good.

So two actions from today.

Number one, banking truce.com/pension.

Go watch that video so you can
see what it all looks like.

And then banking truce.com/schedule
to model it out for yourself

and see what it could look like.

And, I think if you are interested
in this, if this sounds intriguing,

definitely go do both of those things.

And if you have more questions send
me an email mention me on social

media, reach out to Hutch as well.

Hutch, thanks so much for
being part of the show today.

I really appreciate it.

Hutch Hutchinson: Was great.

Thanks for having me