Insider Secrets Podcast Season 2, Episode 3
Guest: Doug Peacock
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Doug Peacock: Coaching people how wealth truly works and to grow all the wealth they want to, safely & predictably, for a tax-exempt income without a future tax obligation. We grow wealth safely & predictably, off the radar screen of the IRS, destroy student loan debts without consolidation, pay for college without destroying your retirement, and leave a substantial legacy for your loved ones or charity.
You have got to be intentional about your life if you’re going to win.
If you don’t understand real estate, please do not invest in real estate.
I don’t care that it’s athletics, it could be something else. But you’ve got to have something else that’s going to require time outside the school day.
I want my infinite banking based on an asset that is guaranteed to grow.
Please, I don’t care if you use me or not, I don’t care. But get a good coach.
Do what you love. If you don’t love real estate, find something else.
“I grew up in rural Indiana very meager family. Nobody had been to college.” – Doug
“These guys showed up at high school and wanted to talk about playing football. I didn’t understand what they were talking about and thank god my coach was with me. He says, you don’t have a clue what they’re talking about, do you? I said, it sounds like if I play football, they pay for college. He says, that’s all you gotta know.” – Doug
“my thrill comes from helping somebody turn the light on. And all of a sudden now all the pieces start to come together.” – Mike
“I ended up playing football and then my ability ran out and I ended up coaching. Cause I couldn’t play anymore, so let’s go coach.” – Doug
“To me, everything is still football. I still coach also. My body doesn’t have to take any of the hits that we sometimes took out there. And I think I can do this a long time, but the bottom line is athletics, period.” – Doug
“I had my former student athletes that had gone to college, got the degrees, but now had this student loan that was hanging over their head big time. They couldn’t even buy a house.” – Doug
“I tell people, everything I do is a crock pot. It’s not microwaves. If you think it’s a microwave, I’m not your guy.” – Doug
“I know the companies that we work with, you get to sign about seven sheets before they’re gonna let you MEC. It’s called a Modified Endowment Contract.” – Doug
[00:43] Intro to Podcast
[01:32] Intro to episode guest
[04:07] One word that describes Doug personally and professionally.
[07:09] Talk about your background a little bit.
[14:13] Doug explains Infinite Banking.
[20:45] What happens if you do a real estate deal and the real estate deal goes bad and you lose the money?
[25:42] Doug talks about capital gains and the application of taxes on that.
[33:50] What’s one piece of advice you want to give the listeners?
[35:14] Best book you’ve ever read?
[35:45] Favorite tourist attraction.
[00:00:00] Kristen: Welcome to this edition of Insider Secrets, the weekly podcast that turns real estate investing goals into reality. Each show we interview guests who are seasoned real estate professionals, actively closing and managing real estate deals. Mike is the founder of My Core Intentions and would like to help you make your real estate investing dreams a reality.
Mike coaches you to buy investment real estate, creating short-term cash flow and long-term wealth. Your host and real estate coach, Mike Morawski, has more than 30 years of real estate investing and property management experience. Here’s your host, Mike.
[00:00:39] Mike Morawski: Hey, good morning everybody, and buckle up. You know what time it is. Glad that you’re here this morning. If you’re joining us for the first time. Go grab a cup of coffee and sit back because we’re in for a treat this morning. My guest this morning, we met for the first time just before we got on, and I knew instantly that there was a connection. So I’m looking [00:01:00] forward to this interview this morning.
Hey, if you’re here like us, love us subscribe if you’re out on YouTube this morning. But we’re here bringing you great content, a great guest about multi-family or investing, or how to invest in real estate, multi-family real estate, so we’re gonna talk about that. But you know me, I always want to talk about intentions. What are you being intentional about this weekend? Have you had some things that you need to catch up on from the week or through the weekend at home?
What do you need to do? What are you being intentional about? I always tell people, I say, listen, when you are working through some of your things, the things that you need to put together. Are you sitting down? Are you taking that quiet time? Are you journaling it out and getting it on paper so that they say that you write your goals, you’re more successful in your goals.
It’s the same thing with our intentions. So I just encourage you to continue to be intentional about what you do on a daily [00:02:00] basis, a weekly basis, that’s what grows us or helps us grow personally so that we can grow professionally. All right. My guest this morning, Doug Peacock from Fort Will, Indiana and I said, where is Fort Will Indiana?
He said, that’s outside of Indianapolis. So not too far from Chicago this morning. So Doug’s a former football coach and today we’re gonna talk about infinite banking and how you can use that system in passive investing in real estate. So let me bring Doug in real quick. Doug, how we doing?
[00:02:33] Doug Peacock: Good morning, Mike. It’s great to be with you this morning in your crowd. Thanks.
[00:02:36] Mike Morawski: Yeah, you as well. So appreciate you being here. What’s the weather like down there today?
[00:02:40] Doug Peacock: We got a little rain, woke up to some thunderstorms but it’s clearing out now, so it’s probably gonna get cold. And probably the stuff that you’re experiencing is gonna be here this afternoon.
[00:02:51] Mike Morawski: Yeah. We’re getting some heavy rain now, but they were saying it was gonna snow today. We’ll see what comes through, I guess my sister lives about [00:03:00] an hour west of me in crystal lake. Because I’m in the city and she said that it was snowing there already this morning.
[00:03:06] Doug Peacock: Yeah.
[00:03:08] Mike Morawski: We’ll see. You know, it’s Chicago, what do you expect, right?
[00:03:10] Doug Peacock: Yeah.
[00:03:11] Mike Morawski: West. It’s always interesting. I spoke last week at a number of events up in Wisconsin. And I was in Green Bay, Appleton and Kenosha last week. And when I had left Appleton after speaking that night and was leaving to go to Kenosha and I was saying, boy, I was so grateful for how nice the weather was.
The sun was shining. I got south of Appleton, blanketed snowstorm, snow, and sideways. Couldn’t see it was a white out and got close to Milwaukee and it dissipated, but it was just nuts for a little bit. So you never know what to expect in the Midwest. Right?
[00:03:51] Doug Peacock: And if you don’t like it, hang around cause it’s fixing to change.
[00:03:54] Mike Morawski: That’s right. For sure. Hey Doug, one question I always ask my guests when I kick [00:04:00] the show off is in one word, what best describes you personally and professionally?
[00:04:06] Doug Peacock: Yeah. Win (WIN) and there’s a whole different story there, but win truly stands for what’s important now. And I’m not a win at all cost guy. I don’t think that ever works. But I think you’ve gotta understand and your lead in to what you talked about intentionality is huge. You don’t have to be perfect. In fact, there’s never been a perfect parent. But you better be intentional or they will rule the roost. I mean, I’ve had three and I’ve got five grandkids, so I understand that.
[00:04:38] Mike Morawski: Yeah.
[00:04:38] Doug Peacock: So the bottom line is you’ve got to be intentional about your life if you’re going to win. And it’s not gonna happen by accident.
[00:04:47] Mike Morawski: Right. Yeah. A lot of people say, I can’t accomplish that. Well, do you take the efforts or the steps to get there to accomplish that?
[00:04:55] Doug Peacock: Yeah.
[00:04:55] Mike Morawski: The word win is come up a lot lately in my life. Right? [00:05:00] I read a book a couple months back by Tim Grover called “Winning”. And Grover was the personal coach for Michael Jordan and Kobe Bryant, LeBron James, and you’re not a stranger to coaching.
[00:05:13] Doug Peacock: No, sir. No, sir. I’ve read that book and I recommended highly for anyone who intends to win.
[00:05:19] Mike Morawski: Yeah.
[00:05:19] Doug Peacock: Yeah. Great book.
[00:05:21] Mike Morawski: It is. And I like what you just said. Who intends to win?
[00:05:25] Doug Peacock: Yep.
[00:05:25] Mike Morawski: Cuz maybe some people have the notion they’d like to win, but do they really intend to win?
[00:05:32] Doug Peacock: We all wanna win. Everybody wants to win. Right? But the bottom line is how are you going to win now? That’s the next step though.
[00:05:40] Mike Morawski: Yeah.
[00:05:40] Doug Peacock: Cause your plan’s not gonna go as you planned it.
[00:05:44] Mike Morawski: Yeah. Let me ask you this. So what makes you a winner? Is it physical ability, is it activity? Is it the intention? What is it that makes somebody win?
[00:05:55] Doug Peacock: I think you have to start with mindset. Every time you’ve gotta start with [00:06:00] mindset and your number one asset is you. And if you’ll guard your mindset and make sure that you’re thinking clearly and not emotionally. And then turn around and make sure that you are adding value to you. Make sure you’re doing, and that’s why I love real estate people.
If you don’t understand real estate, please do not invest in real estate. Cause you’re gonna be that guy we are talking about. So the the point is, understand what you’re doing. You’re not gonna be perfect at it. You’re not even gonna be good. That’s why they call it practise. All right? But the truth is I can be intentional, I can learn. And the business I have now, I had no intentions of doing any of this Mike.
[00:06:45] Mike Morawski: Yeah.
[00:06:46] Doug Peacock: I mean, I was a high school football coach.
[00:06:48] Mike Morawski: Yeah. Let’s get into that, Doug. Talk about your background a little bit. Cuz obviously if you’re talking about winning you’ve gotta have a winning background, right? And that, I’m sure you had some great wins in high school football.
[00:07:00] Did you say basketball coach?
[00:07:01] Doug Peacock: Nope. Football.
[00:07:02] Mike Morawski: Football Yeah. That’s what I thought you said. I got Grover on my mind now.
[00:07:05] Doug Peacock: Yeah, well.
[00:07:05] Mike Morawski: The basketball piece.
[00:07:06] Doug Peacock: That’s okay.
[00:07:08] Mike Morawski: Yeah. But go ahead. Talk about your background a little bit.
[00:07:10] Doug Peacock: Well, I grew up in rural Indiana very meager family. Nobody had been to college. These guys showed up at high school and wanted to talk about playing football, and I was so naive at that point. Now you gotta understand, this is early, early seventies. But I didn’t understand what they were talking about and thank god my coach was with me.
Cause he walked outta there with me and says, you don’t have a clue what they’re talking about, do you? Coach. I said, it sounds like if I play football, they pay for college. He says, that’s all you gotta know. So I ended up playing football and then my ability ran out and I ended up coaching. Cause I couldn’t play anymore. So let’s go coach.
[00:07:51] Mike Morawski: And did you go to college on a scholarship?
[00:07:53] Doug Peacock: I did. Played at Indiana University. Down in Bloomington.
[00:07:56] Mike Morawski: Alright.
[00:07:56] Doug Peacock: And absolutely loved it. And [00:08:00] stuck in high school and then wound up, down in central Florida near Kissimmee St. Cloud. And everybody thinks Disney World. We called it the Mouse Factory, by the way. Everybody thinks that’s in Orlando. No, you’re in Oceola County. You are in Kissimmee. So if you get that Southern draw for me, that’s exactly where it’s from. Cause I spent way too long down and loved it, don’t get me wrong.
But we moved back for family. We didn’t have any family down there. I had three kids, so I wanted them growing up with grandmas and grandpas and aunts and uncles and cousins and all that. And so that’s why we moved back.
[00:08:34] Mike Morawski: Yeah. Nice. So talk a little bit about some of your experiences coaching. I think that I’m a coach, right? I coach people in real estate and some mindset, performance, things like that. But talk about some of your connections with coaching and the shaping of those kids.
[00:08:52] Doug Peacock: Well, the bottom line isn’t I have a huge advantage over a lot of coaches who are trying to coach. I had something they [00:09:00] wanted, and it’s called playing time. And if you don’t wanna do it our way, then you don’t get what you want . So I don’t know. I loved it. I don’t think it’s always the best athlete that wins. We had a very, very different system. We were a Wing T football team for those of you who are in football.
And every time I talk to somebody, you know, defensive coaches, what do you hate to see? What do you hate? Well, Wing T, Well shucks. If they hate it, then that means I’m gonna go learn it.
[00:09:26] Mike Morawski: Yeah.
[00:09:27] Doug Peacock: And I did. And I had a couple guys that coached with me from Tennessee, whose high school coaches had run it for 20 or 30 years. And that was my resource. To me, everything is still football. I still coach also. All right. My body doesn’t have to take any of the hits that we sometimes took out there. And I think I can do this a long time, but the bottom line is athletics, period.
And I don’t care what, I don’t even care that it’s athletics. It could be something else, but you’ve got to have something else that’s going to require [00:10:00] time outside the school day. And it is, parents, listen to me. I don’t care what it is, but find something that your kid helps other kids be a part of something bigger than themselves that’s outside the school.
[00:10:20] Mike Morawski: Wow. That’s huge. What you just said right there. Parents, help your kids learn to help other kids do something big.
[00:10:28] Doug Peacock: I mean, you coach, where does your thrill come from?
[00:10:31] Mike Morawski: Oh, my thrill comes from helping somebody turn the light on. And all of a sudden now all the pieces start to come together. I’ll give you a great example, right? I have a coaching client who we’ve been working on underwriting for the last several months, and all of a sudden, about two weeks ago, and I shouldn’t say several months, probably about six weeks. And about a week ago, two weeks ago, he goes, I got it. He goes, this happens and this happens and [00:11:00] this happens.
And I said, you got it. You understand it now and when somebody gets it, there’s a thrill about that as being a coach, isn’t it?
[00:11:10] Doug Peacock: Absolutely. Absolutely. When the light goes on. But Mike, that’s where Peacock Wealth Group came from. I had no intentions of doing any of this. Ok. I was a huge get outta debt fan and I wanted people to be outta debt and I had done everything I was told to do and did what I did, and then I sat down and look what my retirement’s going to look like, and there’s this big red expanding sash across the paper and it’s real pretty.
But what is that? And that was the money that I was short. And I said, well, don’t you think maybe we should have had this conversation five years ago and not 60 days before I’m out of the classroom.
So I got honked off. I really did. My PNC guy, my house and auto guy knew that I was an out of debt guy says, Hey, I want you to go listen to this guy. And that was ended up being Nelson Nash. Now Nelson has since taken his final [00:12:00] graduation to Heaven, but when I heard him, he was 84 years old and did a six hour seminar by himself and he was 84.
And I’m just telling you there’s a resource for you. Go out and listen to Nelson Nash. But that’s where I learned. And then as soon as I heard that, I sat down with a couple of guys and I learned that I could use this warehouse if you will, to store money to store capital that my kids who were in student loan debt, which by the way is 1.7 trillion as we talk today.
So how’s that working out for you? Let’s find a different plan. Okay. It’s not working. But bottom line is I had my former student athletes that had gone to college, got the degrees, but now had this student loan that was hanging over their head big time. They couldn’t even buy a house.
I mean, it was just killing them. And I learned how to use that to pay off their student loans. So here we are, five years later, they’re out of their student loans with $50,000 sitting in a cash value account. That’s not a bad [00:13:00] place to be at 25, 26 years old.
[00:13:02] Mike Morawski: Not at all. And what’s the formula around that, Doug?
[00:13:06] Doug Peacock: Well, it’s the infinite banking. That’s the whole process, and people want to tie infinite banking to a product, and it’s not. It’s a process of banking. Have you ever noticed how profitable the banks are?
[00:13:20] Mike Morawski: Oh yeah.
[00:13:21] Doug Peacock: We just come outta the lowest interest rate known to this planet.
[00:13:26] Mike Morawski: Doug. I notice more how stingy they are.
[00:13:29] Doug Peacock: Well. I always say they’ll give you your umbrella as long as the sun is shining.
[00:13:33] Mike Morawski: Yeah.
[00:13:36] Doug Peacock: So the bottom line is I just want you to take control the banking function of the banking processes in your life. And when you control those, every time the bank moves money, somebody gets paid. Why can’t that be you?
[00:13:52] Mike Morawski: Right.
[00:13:53] Doug Peacock: And everybody wants to tie it to a certain product or this product. I don’t care if you use a can in your backyard. [00:14:00] Infinite banking can do that. Let’s go pick an asset that’s guaranteed to grow.
[00:14:05] Mike Morawski: So for the people that don’t know that term, infinite banking and what that is, explain to them, Doug, what it is?
[00:14:13] Doug Peacock: Sure. We’re going to create a warehouse for your capital. Okay. And like you said, they get stingy with it. Talk to somebody that went through 2008. What’s the first thing to get wiped out when times get tough? And it’s accessed to capital, right? I mean, there were HELOC withdrawn and limited. There were lines of credit canceled.
And the bottom line is, you’ve gotta have a way to get capital. So we literally use a very special, uniquely designed whole life policy. Now, this is not your grandpa’s policy, this is very different. But it allows you [00:15:00] access to your money while it’s guaranteed to grow.
So, that’s why I picked whole life. I want my infinite banking based on an asset that is guaranteed to grow. You could do it with real estate and housing, but as we learned that you don’t always go up.
[00:15:21] Mike Morawski: So, let’s talk about the mechanics behind that. I go and open a whole life policy with you and I put, let’s say I fund it with, what’s the minimum I can fund that with?
[00:15:32] Doug Peacock: Whatever works for you.
[00:15:34] Mike Morawski: Okay.
[00:15:35] Doug Peacock: Okay. I’m not going to limit it to that and there’s more to that story, but let’s follow what you’re going on first.
[00:15:41] Mike Morawski: Okay. So let’s just say I fund that with $50,000. How soon do I have access to that capital?
[00:15:47] Doug Peacock: You’re gonna give up use of part of that 50,000 because of underwriting costs, the costs of insurance, the administrative costs, and things like that for the insurance company. In 30 days, you’re gonna have [00:16:00] access to a portion of that money.
[00:16:02] Mike Morawski: Okay.
[00:16:02] Doug Peacock: Now, what portion is available to you depends on your age, depends on your health status. It also depends on gender. Because women don’t do stupid stuff that men do. Okay. That’s why they’re cheaper to ensure. It’s also why my first policy was on my wife and not me. So the point is the numbers work. So instead of seeing this as a insurance bill, it wound up being a storehouse for capital.
Because eventually I’m gonna make more money than I put in. Okay? So not only does it grow with interest, which by the way, once it’s credited to your account, you can’t lose it either. It’s gonna grow more next year than it did this year.
[00:16:56] Mike Morawski: So inside that policy, there’s a [00:17:00] component also that helps that money grow. So it doesn’t just sit there stagnant, right?
[00:17:05] Doug Peacock: No. No.
[00:17:06] Mike Morawski: Okay. So now let’s talk about some more mechanics, Doug. So if I put this money in this policy and then I take that portion that I can use.
[00:17:16] Doug Peacock: Yeah.
[00:17:16] Mike Morawski: Back out. And I’ve invested in a real estate transaction. And that real estate transaction is earning money when we’re done and we cycle out of that real estate transaction. Do I just put all that money back in that policy?
[00:17:31] Doug Peacock: You can if the policy will hold it. Okay. So we opened up some can, I love the way you’re going, but we opened up some cans of worms here.
[00:17:41] Mike Morawski: Okay.
[00:17:42] Doug Peacock: Truthfully, Mike, the difference is, you gotta have the right coach because this policy has to be, remember I told you it was special and uniquely designed. So it’s got to be designed for minimum death benefits. Maximum cash [00:18:00] value. Yes, it’s going to grow. But I can help that policy out a lot if I put more of your savings over there. Now the problem is that requires that I take a 50 to 70% cut in my commission. Well, the nice part is I don’t have to make a living doing this. Alright? I got my pensions, I got my retirement.
Everything’s cooking. But man, can I change your world for capital? Absolutely. But it’s not gonna be done overnight. I tell people, everything I do is a crock pot. It’s not microwaves. If you think it’s a microwave, I’m not your guy. But the bottom line is, yes, that money’s going to grow.
Now, let’s say you’ve got $50,000 in there, okay? And yet, bingo. Here’s this chance to buy into a real estate deal for $25,000, okay? Guys, I don’t have to do credit checks. I don’t have to do profit loss statements. I don’t have to do last three years, [00:19:00] it’s literally 1800. In fact, now once you’re established, it’s literally a couple of clicks on a computer. But until you’re established it was 1800, send me some money.
[00:19:11] Mike Morawski: Yeah.
[00:20:01] Doug Peacock: So the neat part is yes. How much do you want and where do you want it sent? That’s the two questions. So there’s no hoops to hop through. And it’s especially designed that way too. Cause the insurance company can’t lose. Cause all you did was leverage your death benefit. Okay. So if you borrowed 25, and let’s say you put your $50,000 in there, like you talked about, which bought you a $1 million policy and then you took out 25 and then you died. Well, they’re gonna take the death benefit minus the 25. Cause they already gave you 25.
[00:20:41] Mike Morawski: Got it.
[00:20:42] Doug Peacock: But you’re gonna suffer through.
[00:20:44] Mike Morawski: Got it. Well, what happens if you do a real estate deal and the real estate deal goes bad and you lose the money?
[00:20:53] Doug Peacock: So here’s the neat part. When I take that 25 out of there, [00:21:00] that’s not my money. That’s the insurance company’s money. Okay? So that allows me my 50,000 continues to grow over here, even though I’ve leveraged it for 25. Now the deal goes bad, you better find a way to improve your real estate skills.
[00:21:22] Mike Morawski: Mm-hmm. Yeah. I always wanted to ask that question. And we always hope, we always are focused on the point that the deal’s not gonna go bad. But what if, I’m a what if guy? I like to ask those questions. So what I heard you just say, and correct me if I’m wrong. If I put 50 in, I borrowed 25 or take 25 out to passively invest in a real estate offering. I’m still earning money in the policy on the entire 50,000?
[00:21:51] Doug Peacock: Yes, sir.
[00:21:53] Mike Morawski: So the interest rate that that policy kicks off, that coupon on your $50,000 still [00:22:00] earns at that rate. Plus I have 25,000 in this real estate offering over here that’s earning whatever that’s earning.
[00:22:08] Doug Peacock: Yes, sir.
[00:22:09] Mike Morawski: So this is really, and I love to talk to people about creating generational wealth. This is a play that allows people to create that long-term generational wealth, doesn’t it?
[00:22:20] Doug Peacock: Right? Yeah. So let’s talk about a couple other things here. Not only is your money, your 50,000 gonna continue to grow, but every year that we only use certain insurance companies. Not every insurance company will let you do this policy. Okay? And so you got it. Please, I don’t care if you use me or not, I don’t care. But get a good coach.
[00:22:46] Mike Morawski: Yeah.
[00:22:47] Doug Peacock: Okay. Let them coach you through this because if you get the wrong coach, the wrong company, you’re gonna meet the IRS and they have no sense of humor. Okay, so [00:23:00] we’re going to use mutual companies. Now, why mutual? Because they have no stockholders. So every time this company turns a profit, excess profit, where does that have to go to?
Because it’s called the dividend. So where do the dividends go? Cause there’s no stockholders. Or who does has to go to is the policy owners. Oh. That would be me. So not only does your cash value grow by interest, but it also grows by dividends. Now then, dividends are not guaranteed. But I mean, we use companies that have paid them well over a hundred years consecutively. Now, I got it. It’s not guaranteed, but I’m gonna take that track record.
[00:23:48] Mike Morawski: Sure.
[00:23:48] Doug Peacock: Do the math. That means that somebody cashed a dividend check during the Great Depression. How weird were you?
[00:23:56] Mike Morawski: Yeah. And that dividend goes right back [00:24:00] into the policy and helps that policy grow as well?
[00:24:02] Doug Peacock: Once it’s into the cash value. It’s just like interest. It will never disappear. It cannot be reduced. It cannot be recalled. It can’t be minimized. It’s going to set in there and it’s going to earn whatever your policy’s going to.
[00:24:16] Mike Morawski: Yep. Let’s talk about bad news for a second. Is that life insurance policy subject to anything like, let’s say civil lawsuits, IRS debt, things like that?
[00:24:29] Doug Peacock: And Mike, the answer to that is it depends on your state. Okay.
[00:24:33] Mike Morawski: Okay.
[00:24:34] Doug Peacock: The insurance is state regulated, not federally.
[00:24:37] Mike Morawski: Okay.
[00:24:38] Doug Peacock: Every state’s a little bit different, but no. The truth, and I just know what Indiana is.
[00:24:46] Mike Morawski: Yeah, sure.
[00:24:47] Doug Peacock: Okay. And yet, no. It cannot be attached to lawsuits. In fact, there are six IRS tax codes that prevent [00:25:00] taxation of this account. Okay.
[00:25:03] Mike Morawski: Well talk about taxes for a minute too, Doug. So here, just a scenario again. I take 25,000 out of my whole life. I put it in this real estate offering. This real estate doubles my money. It’s got a multiple of two on it, so I put 25 in. At the end of the day, I have 50.
And I could be taxed capital gains on the 25 I earned. How does that work? Am I still taxed at capital gains? If it goes back in my insurance, are you free of tax or how’s that work?
[00:25:37] Doug Peacock: I will tell you, for the sale of real estate, I don’t know.
[00:25:41] Mike Morawski: Okay.
[00:25:42] Doug Peacock: Okay. Now then, how the policy works though, is you can take that loan. No taxes. If you go borrow money for a car, are you charged money for the loan?
[00:25:53] Mike Morawski: Sure.
[00:25:55] Doug Peacock: Taxes?.
[00:25:56] Mike Morawski: Oh, no.
[00:25:57] Doug Peacock: Interest. Yes.
[00:25:57] Mike Morawski: Yeah. Yeah. Okay.
[00:25:58] Doug Peacock: Taxes.
[00:25:58] Mike Morawski: Yeah. Taxes, [00:26:00] right.
[00:26:00] Doug Peacock: All the same thing’s true with this. Okay. So you’re not charged any taxes on this. Now for excess and this, so remember I told you minimum death benefit, maximum cash value. So who sets the limit on how much each and every policy can hold and it’s not the insurance company. It’s the IRS.
Now time out. Why would the IRS care how much money is in there? Because it’s tax exempt. There’s not even a line on the 10 40 to put this number. Okay. Now you step over that line. The whole thing’s taxable. Again, better have the right coach.
[00:26:42] Mike Morawski: Yeah, right. And I always tell people, I say, Hey, I’m not an accountant. Go get one that knows this stuff.
[00:26:47] Doug Peacock: I know the companies that we work with, I mean, you get to sign about seven sheets before they’re gonna let you MEC. It’s called a modified endowment contract, is what it’s called. Mec (MEC).
[00:27:00] And when that happens, it loses its tax favoredness. Guys, go study it. Nothing spends like life insurance money, nothing. We are so protected on spending the money and that’s the problem right now. Nobody’s teaching retirees how to spend the money, so we’ve all accumulated this huge pile of money.
But if nobody teaches me how to spend it, I get to give all of it to either fees for investment or to the government.
[00:27:37] Mike Morawski: Yeah.
[00:27:38] Doug Peacock: So why not get rid of all of that? Live on much less or much less that you take out because it’s tax free. So I tell people, there’s two piles of money. There’s 5 million and 3 million.
Now, if that’s all you knew, everybody chooses a 5 million. Now what if I said that the [00:28:00] 5 million is gonna kick off $200,000 a year, 4% rule and I don’t wanna go in the weeds there, but that’s a common rule. The problem is it’s 100% taxable as income, by the way, not capital gains. Highest rates you can pay.
The 3 million dollars, however, sets in an infinite banking policy and it can kick out $180,000 a year absolutely 100% tax exempt. Which do you want?
[00:28:31] Mike Morawski: Yeah, the 3 million.
[00:28:33] Doug Peacock: In a heartbeat. I mean, this is almost coach proof. Even coaches can configure this one out, right? So the bottom line is nobody’s required to teach you how to spend your money on the backside.
I will never recommend, I’m not gonna tell you what to do with your money. You do what you wanna do. But will I coach you the options? Absolutely.
[00:28:54] Mike Morawski: And Doug, how do you fund these? Where do you find capital? Where does the average person find capital [00:29:00] to fund these? Do they have to be funded all at once? Is it over time? What if somebody had equity in a rental property and they wanted to pull equity out of a rental property cuz you could do that tax free. I can re-capitalize a piece of real estate, do a cash out refinance, no taxes on that.
[00:29:19] Doug Peacock: Right.
[00:29:20] Mike Morawski: Could fund this, right?
[00:29:21] Doug Peacock: Yes, sir. So when I started this business, I was using College kids, very young college kids. Well they don’t have any money. So they were doing really small policies, but they were compounding it over and over and over and over. And then I teach ’em how to collateralize the money, leverage the money, go pay the student loan off.
Now instead of paying Sally May that payment, you’re gonna pay that Sally may payment back to the Insurance company.
[00:29:51] Mike Morawski: Sure.
[00:29:52] Doug Peacock: And you just reestablish that fund again. So the next time the fund gets big enough to kill the next loan, we kill it [00:30:00] too. And you just repeat the process over and over and over. Now, again that MEC line that we talked about going over too much, there’s two times that I will let you MEC a policy. One is for college funding. Because it’s absurd, and that’s a whole another show and a whole nother discussion.
[00:30:17] Mike Morawski: Okay.
[00:30:17] Doug Peacock: The other one is for real estate investors. Because yes, we can put in lump sum. I’ve had people throw, 5400, 5800 in and yet, does that create a mech? Yes, but I have up to that amount of money available. Again, tax free.
[00:30:40] Mike Morawski: Yeah.
[00:30:41] Doug Peacock: And we’ll just cycle it over and over and over. But the bottom line is, can it be done one time? Yes. Can it be done forever? Yes. Why would I ever wanna put money into a life insurance policy forever? Because let’s just say, I go a thousand dollars a year.
Not a lot of [00:31:00] money. But if you’ll watch that thing sooner or later, it starts making more than a thousand dollars a year. So now, do I really have an insurance bill? No.
[00:31:13] Mike Morawski: Yeah.
[00:31:13] Doug Peacock: I’ve got a capital account. All right. Oh, by the way, it’s gonna grow more next year, guaranteed. So let’s run this thing out 20 years. Now all of a sudden, I’m paying a thousand dollars a year, but it just made me 12 grand this year. Why would you ever stop funding that?
[00:31:33] Mike Morawski: Right, right, right.
[00:31:34] Doug Peacock: And those numbers are all just examples. Please don’t take that as gospel. Cause every policy is different. Again, based on your age, your gender, your health status, and all that. But the bottom line is, if you’ll give me seven years, I’ll change your life.
[00:31:50] Mike Morawski: So this really becomes a great way for the passive real estate investor and active investor, but the passive real estate investor to really build [00:32:00] some wealth for themselves. And for leaving a legacy. It’s a direction for people to use.
[00:32:07] Doug Peacock: It also gives you a place to store capital. Save predictable growth until that deal comes along. So I’ve got farmers doing this and they don’t have to sell their corn when the market wants them to. They can pick the price that they want to sell that corn. Why? Because they did it with a policy loan who controls the payback on the policy law.
[00:32:35] Mike Morawski: You do?
[00:32:35] Doug Peacock: You do. Oh, now am I going to pay interest to the insurance company? Yes, I am. Simple interest, but I’m earning compound interest. By the way, as a PE major, I flunked that math test when I first started studying this. I knew that $30,000 at 5% for five years, I don’t care if it was simple or compound, is the same dollar, and it’s not.
In fact, there’s [00:33:00] $4,200 difference on $30,000 in five years. It was my wife’s car by the way. Oh my gosh. I take a policy outta my loan and I make $4,200 just because I bought my wife’s car. I was gonna buy the wife’s car anyway. Now, do not get that. You can get rich by going out here and buying cars. You can’t do that.
[00:33:22] Mike Morawski: Right.
[00:33:22] Doug Peacock: Alright. No more than you can go out and buy real estate and get rich just because you got a bunch of real estate. That’s a great way to go broke fast.
[00:33:29] Mike Morawski: Yeah, for sure, for sure.
[00:33:31] Doug Peacock: The bottom line is if I’m gonna buy that car anyway, why not recoup every time that money moves that I’d get paid that money? And that’s all we’ll do.
[00:33:38] Mike Morawski: Yeah. Well, Doug listen, I really appreciate you being here this morning. We wind this down. I have a couple questions, but before we do that, as a winning coach, Doug, what’s one piece of advice you wanna give the listeners this morning?
[00:33:53] Doug Peacock: Do what you love. If you don’t love real estate, find something else. I mean, I got [00:34:00] guys that with this they buy cows. And again, they’re right back to the seed corn price. They can dictate when they buy their cows.
[00:34:10] Mike Morawski: Yeah. Right.
[00:34:11] Doug Peacock: Right. Huge advantage. I got another guy that does high end antique cars. All right. I mean, he spent $250,000 on a car. And I said, what are you doing? He says, Hey, it’s worth 700. I said, nevermind right? And again, a real estate guy ended up getting a huge warehouse because he had 800,000 that he could write a cheque on. Didn’t have to wait for a bank decision, didn’t have to wait for all the paper to fall.
He could write the cheque. So he got a better price on the warehouse. Plus he already had a vendor to go in the warehouse and he was gonna build out the warehouse for the vendor. I mean, this is win, win, win all the way down for this guy. Now, he wasn’t a rookie and he knew what he was doing. When we first [00:35:00] started out, he said, this has gotta be illegal. And that’s exactly what I thought.
[00:35:06] Mike Morawski: Yeah. I love that.
[00:35:07] Doug Peacock: It’s not so love what you do. Do it with passion.
[00:35:10] Mike Morawski: Yeah. Nice. Doug, what’s the best book you’ve ever read?
[00:35:14] Doug Peacock: Oh, that’s the Holy Bible. Either the Bible, I mean, you want a Master’s in finance? Go read Proverbs. There’s 31 of them. Go read one a day. And you’ll have a master’s in finance by the time, a couple of months roll by. Learn what that book says. It’s not outta date.
[00:35:32] Mike Morawski: 2000 verses in the Bible that talk about business and finance.
[00:35:36] Doug Peacock: Oh, wow. Yeah. I don’t have a problem believing any of that.
[00:35:40] Mike Morawski: Hey, what’s best tourist attraction you’ve ever seen?
[00:35:45] Doug Peacock: Oh, I love Duns River Falls in Jamaica.
[00:35:52] Mike Morawski: Oh.
[00:35:53] Doug Peacock: Okay. My oldest son and his wife kind of hoodwinked me and my wife. We’re gonna go on [00:36:00] this Duns River Falls tour. Right. Go see it. It’s literally a fast going river, fast flowing river with waterfalls and rapids and everything else out of a jungle. And it’s beautiful. Little did I know he had signed us up to go up the falls. And I will tell you, I’m glad I did it, but I ain’t doing that again. But it was beautiful.
[00:36:32] Mike Morawski: Doug, it’s been great having you here this morning. I appreciate you, your bundle of energy and knowledge as well. And I appreciate the knowledge. I’ve talked to other infinite banking people and I have to say that I learned a lot this morning and I hope my listeners did too. So, how do people get ahold of you? If they wanna reach out and talk about infinite banking?
[00:36:51] Doug Peacock: Guys, the easiest way is just go to Peacock Wealth Group, all one word dot com. Okay, so it’s just [00:37:00] like the bird wealthgroup.com and phone numbers there. Email is there. There’s actually a couple of books there in fact, one of ’em is a free download. It was written for chiropractors but if you can cross out chiropractor and put in real estate guy. Yeah.
The fundamentals are the same. I just love what chiropractors do and I owe a debt to a buddy and so I wrote that for him and give it to chiropractors for free. All I gotta do is, you gimme a name and an email and you can have the book.
[00:37:29] Mike Morawski: Nice. Doug, thanks for being here. I am gonna go ahead, I’m gonna move you out to the back room. If you hang out with me for a minute?
[00:37:36] Doug Peacock: Absolutely.
[00:37:36] Mike Morawski: Say goodbye to everybody and we’ll take it from there.
[00:37:39] Doug Peacock: Absolutely. Thanks, Mike.
[00:37:40] Mike Morawski: Thank you. Appreciate you, Doug.
Hey everybody, glad you were here this morning and if you have comments or questions, don’t hesitate to shoot me an email up. Get those answered for you. Reach out to Doug, talk to him. He’s got a lot of knowledge around this infinite banking process and I like what he said in the very beginning that this is not [00:38:00] just a product. And it’s not your grandfather’s whole life policy cuz it is whole life on steroids. There’s no doubt about that.
Hey, thanks for being here. Make sure you tell somebody, like us, love us on social media. Please subscribe on YouTube. We are always bringing relevant content to you every day, as well as our live shows that come up.
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Glad you’re here. If I can help you at all through the week, don’t hesitate to gimme a call or email me and I will look forward to seeing you soon next week. Thank you. Have a great week everybody.
[00:38:55] Kristen: Thank you Mike, and thank you for joining us for another great episode of [00:39:00] Insider Secrets. As always, Insider Secrets is brought to you by My Core Intentions. Wherever you hang out on social media, you will find Mike and My Core Intentions. Please like and follow us to get the most up to date real estate investing trends.
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