Olivia Kirk

Now more than ever, with a potential recession on the horizon, people are asking an important question: how can we depend less on banks and more on ourselves? The answer lies in building a family banking system a strategy that allows you to regain control of your money and reduce reliance on traditional financial institutions. When a recession hits, up to 30% of loan applications are denied, which means access to capital becomes limited right when you need it most. This is why it’s critical to build a system of wealth that you own, control, and that your family and business can rely on for years to come. Instead of depending on banks, you create your own pool of capital one that grows over time and is always accessible when you need it.

Think about what typically happens when you get paid: your money goes into a bank, and when you need money, you go back to that same bank to borrow it. This cycle keeps you dependent. A family banking system flips that model. Instead of depositing all your income into a traditional bank account, you redirect a portion into a properly designed life insurance policy focused on cash accumulation. Over time, this builds a growing pool of capital that you can borrow against for life’s major expenses. With a system like this in place, you can use your own capital to fund cars, college education, weddings, vacations, business opportunities, and even debt payoff such as credit cards or mortgages. In the beginning, you may still rely on banks, but as your cash value grows guaranteed over time your dependence on external lenders continues to decrease.

One of the most powerful aspects of a family banking system is its ability to create intergenerational wealth. It opens the door for meaningful financial conversations within your family conversations that often don’t happen, such as how money works, how financing works, and how to properly build and use capital. By teaching these principles, you equip future generations with knowledge many people never receive, allowing each generation to become more financially independent than the last. While it may take around 20 years to fully transition away from traditional banking, your children can benefit much sooner, potentially reaching financial independence in their 30s instead of their 50s, which creates a completely different life trajectory.

In addition to the living benefits of accessing cash value, life insurance policies also provide death benefits that play a critical role in strengthening the family banking system. As older generations pass on, these benefits create a tax-free influx of capital for younger generations. This not only transfers wealth efficiently but also reinforces the system as future generations continue the process by purchasing policies on themselves and their children. Over time, this creates a continuous cycle where wealth is built, passed down, and expanded, forming a system that can operate indefinitely.

At its core, banking is a process, and the real question is whether you will control that process or be controlled by it. When you control the process, you decide when loans are made, how they are repaid, and what the terms look like. While insurance companies do charge interest, you still maintain control over how your family interacts with that capital, allowing more money to remain within your own system. Even when interest is paid, it is not truly lost, as the tax-free death benefit ultimately helps recapture and redistribute that wealth back into the family, making the system highly efficient over time.

Beyond the financial benefits, a family banking system creates a shift in culture. It encourages open conversations about money, brings financial education into everyday life, and helps instill discipline around saving, investing, and long-term thinking. It transforms how families view money not just as something to earn and spend, but as a tool to build, protect, and transfer wealth.

Getting started begins with focusing on the oldest generation, whether that is your parents or yourself if you have children. By starting at the top, the system is positioned to receive death benefits sooner, which accelerates growth and liquidity. From there, as income and cash flow allow, additional policies can be added across the family, gradually expanding the system and increasing its strength over time. When structured properly, a family banking system becomes self-perpetuating, with each generation contributing to and benefiting from it.

At the end of the day, everyone has goals, and all of them require access to capital often quickly. The difference lies in where that capital comes from. By building a family banking system, you take control of your financial future, reduce dependence on traditional banks, and create a lasting foundation for generations to come.

If you would like to learn more about how to put these strategies to work for you, your business, and your family, visit our website www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

As a small business owner, you know that cash flow is king. In fact, 82% of small businesses fail due to lack of cash flow, which is why today we’re going to talk about how to increase your access to cash. There are small steps that every small business owner can take to increase access to cash and improve their ability to maintain full liquidity, use, and control of capital when things go awry. Whether that means making payroll, hiring new people, investing in equipment, or investing in new technology, all of these things are inevitable, and they require access to capital.

So how can we position you as a small business owner to take advantage of opportunity rather than become a victim of circumstances outside your control? First and foremost, 90% of small business owners have the majority of their net worth tied up in their business. They take all of their profits and pour them back into the business. That is not necessarily a bad thing, especially in the beginning as you build and establish the foundation of your business. But as time goes by and your business grows, and your access to capital increases because your business is growing, taking all of those profits and dumping them back into the business puts you in a position where you are not in control of that equity. That can actually hold you back, especially when you want to access money from a bank. Banks are not looking at how much inventory you have. They are looking at how much cash you have so they can determine how much they are willing to lend. When you depend on banks for access to capital, there are many hoops you must jump through. You have to disclose your income, your business cash flow, and your business equity. All of these factors are used by the bank to determine whether you are a worthy candidate to repay the loan you are seeking. And the reality is, you are not in control of that process. The bank is. Positioning yourself so that you have liquidity, use, and control of a pool of money will not only make you look stronger to a bank, but it will also leave you in a more secure financial position because you will have access to capital no matter what. It all comes down to control. When you have access to money, you are in control. You are no longer solely dependent on a bank. You can self-finance if you choose, through the capital you have built up. The key is that you positioned yourself to do that.

The second shift most business owners need to make is not placing all of their savings into qualified retirement accounts such as 401(k)s or IRAs. These accounts are restricted, and access to the money is limited. As a small business owner, you already have most of your wealth tied up in your business, and you cannot easily spend equity. Then, in an effort to save for retirement and reduce taxes, you put money into qualified retirement plans. What this often does is leave you without a pool of accessible cash. You cannot access the equity in your business, and now you cannot access your retirement savings either. Life still happens. There are expenses outside the business your family, your home, your spouse, your children, vacations. All of these require access to significant amounts of money at different times. If your capital is tied up in your business and locked away in retirement accounts, you may not have the access you need. As a result, you become dependent on banks and credit companies to fund short term goals and unexpected expenses.

The third shift is to stop taking your profits and paying cash for large purchases. When you pay cash, you may save on interest that you would have paid had you financed. But you are also giving up control of those profits to the vendor who sold you the equipment or inventory. Paying cash can feel good because you eliminate a monthly payment. However, it does not necessarily reduce financial stress. Bills still arrive each month. And now, you no longer have access to the capital you once had available to manage those obligations. You gave up control of that pool of money to purchase an asset, and now you do not have that liquidity to operate and grow the business as smoothly as you might have otherwise.

By making these three small shifts in how you use your money what we call the financial golf swing, you can place yourself in greater control of capital and move from a position of scarcity to one of abundance. It positions you to be in control of money and cash flow, which are both the lifeblood of a small business.

If you would like to learn more about how to put these strategies to work for you, your business, and your family, visit our website www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

49% of small business owners expect a recession by the fourth quarter of 2025. And with a recession comes the inevitable squeeze on cash and access to cash by banks. So you may be wondering, what do I do and how do I access cash if my business line of credit gets frozen?

Things happen that are outside of our control, and one of those things is that banks start pulling in their reins. They begin positioning themselves for what they see as an eventual economic downturn. How do they do that? One of the first things they will do is freeze your credit line. So what does it mean when your credit line is frozen? Let’s say you have a $100,000 credit line and you have $60,000 borrowed against it. The first thing the bank will say is that you can no longer use the remaining $40,000 of available credit. You are frozen at $60,000. The next thing they may do is say that since you have been paying interest only, they now want you to make principal and interest payments. That means you are required to pay not only the monthly interest but also reduce the principal balance each month. What does that do to your cash flow? It squeezes it, and it squeezes it tight.

Is it any wonder that 82% of small businesses fail due to lack of capital and lack of cash flow? Think about it. These changes are often outside of your control. You may have been current on every payment. You may have never missed or been late on a payment. It does not matter. The banks see shifts in the economy and tighten their lending standards. They turn off the faucet to your access to capital. That is one of the major downsides of being dependent on banks. Not to mention, during a recession, 30% to 50% of loan applications get denied. First, you lose access to the remaining portion of your credit line, which for many business owners is the easiest source of capital. Then, you cannot obtain a new loan because your position appears less favorable and more risky to the bank.

So far, we have discussed what happens when your credit line gets frozen. Now let’s talk about what you can do in advance to position yourself, your family, and your business so that you are no longer a victim of external circumstances. More importantly, you can position yourself to take advantage of opportunities that are created when others lose access to capital.

If you do not take these steps, you may never even see those opportunities. You will be so overwhelmed by the stress of tightened cash flow that you will not be able to lift your head above water. But if you prepare in advance and build a strong capital position, you will be ready to act during a recession when others cannot. That is why it is so important to view your finances through the lens of control.

You started your business because you wanted to control your own destiny. Yet many business owners discover they are not in control of access to capital because they depend on banks. There is an old saying: a banker is someone who will sell you an umbrella when it is sunny and take it back when it starts to rain. Over decades of economic cycles, this pattern has repeated itself. When downturns occur, banks tighten credit, freeze lines, and limit access to capital to protect themselves. So what can you do? It begins with a few simple shifts.

First, build a pool of capital that you have full liquidity, use, and control over. One simple way to start is by redirecting extra payments that you were sending to the bank into your own capital pool. Second, reconsider where you are saving money. For many people, the majority of their savings is in qualified retirement plans. That means limited access. In a 401(k), you can typically borrow only the lesser of $50,000 or 50% of your account balance. You must also repay it within five years, which can further strain cash flow. Instead of locking up all of your savings, consider directing some of those contributions to a place where you have full liquidity and control. This does not mean you need to withdraw money from your 401(k) or IRA. Rather, direct future savings into vehicles that provide access instead of restrictions. Third, stop paying cash for major purchases and begin setting some of that money aside in a way that keeps you in control. When you maintain access to capital, you increase your flexibility. You can choose when and how much to pay the bank instead of giving the bank your money and later asking permission to access it again, especially during an economic downturn when you may be denied.

If you would like to learn more about how to prepare yourself for when the bank freezes your line of credit,  visit our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

Paying cash has a hidden cost. They call it opportunity cost. Opportunity cost is defined as the interest that you’re not earning. After you drain your savings, you drain your tank. Today, we’re going to talk about the true costs of paying cash.

Have you ever heard the term cash is king? Today, we’re going to talk about why that’s not necessarily true and why you may want to rethink paying cash for purchases.

As a business owner, we work really hard to earn a profit. Then we get that profit, we control it, and all of a sudden we start building up some cash. Now we want to pay off our debt, or pay cash for equipment, or pay cash for inventory. Think about it. We get our profits, which aren’t easy to earn and aren’t easy to create, and then we literally give away control of those profits by paying cash.

It’s simple to calculate the opportunity cost of paying cash. But most people don’t consider opportunity costs. They call it the time value of money. However, there are other hidden costs that we don’t see. One is lack of control. We control the dollar, then we use that dollar to pay cash. Now we no longer control it. There is also a lack of preparedness for future opportunities because we don’t have access to capital. The money is flowing away from us rather than flowing toward us. That is one of the biggest problems with paying cash. Is it any wonder that 82% of businesses fail due to cash flow concerns when they look at things through the lens of saving on interest instead of maintaining control of their money? By maintaining control of your money, you are able to weather those cash flow concerns.

That is the benefit of the unique lens through which we view things. We view financial decisions through the perspective of being in control of money rather than no longer being in control. It’s exactly how banks look at things. Depositors give banks money. The banks are able to lend out ten times that amount. They are in control of that deposit, plus all of the cash flow that each of those loans generates. That is ultimate control, and that is the position we want you, as a policyholder, to be in. When you have money flowing toward you, it prepares you for the unexpected. It also gives you a feeling of confidence rather than a feeling of being out of control.

That is a big deal. Business owners already deal with significant stress on a day to day basis. The last thing you want is additional stress caused by a lack of control when it comes to money and cash flow. Having access to capital puts you in a much stronger position. It gives you a mindset of abundance rather than a mindset of scarcity. Everything becomes easier when you operate from that mindset. And that mindset comes much more naturally when you have a pool of money that you can access with no questions asked.

When it comes to paying cash, the math is easy. You can say, I drained this tank and I’m losing this much in opportunity cost. But what is not seen are the other consequences that come with paying cash. Lack of control.Money flowing away from you instead of toward you. A feeling of helplessness. A feeling of stress because now you have to generate more profits to regain access to capital. The very actions that once moved your business forward can begin to hold it back if you do not make the necessary shift at the right time.

If you would like to learn more about how to build a pool of cash for you, your business, and your family, visit our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

49% of small business owners expect a recession by the fourth quarter of 2025. And with a recession comes the inevitable squeeze on cash and access to capital by banks. So you may be wondering: what do I do, and how do I access cash if my business line of credit gets frozen? Things happen that are outside of our control, and one of the first things banks do when preparing for an economic downturn is pull in the reins. One of the first actions they’ll take is freezing your credit line. So what does it mean when your credit line is frozen?

Let’s say you have a $100,000 credit line and you’ve borrowed $60,000 against it. The first thing the bank will do is tell you that you can no longer access the remaining $40,000. Your line is frozen at $60,000. Then they may shift your payment structure from interest-only to requiring principal and interest. That means you’re now responsible for both the monthly interest and a principal reduction tightening your cash flow significantly. Is it any wonder that 82% of small businesses fail due to lack of capital and cash flow? The worst part? These things may be entirely outside of your control. You could be current on every payment, never missed a due date, and still get cut off because the bank is reacting to external economic conditions, not just your performance. They’re turning off the faucet to your access to capital.

This is the hidden danger of being dependent on banks. During a recession, 30% to 50% of loan applications are denied. So not only are you losing access to your existing line of credit the easiest money to access you now can’t even get another loan because your position now looks riskier to the bank. So what can you do? You need to prepare in advance so you, your business, and your family are no longer victims of these outside forces. More importantly, you can position yourself to take advantage of the opportunities that arise when others are cash-starved. If you don’t take these steps, you may not even see those opportunities. You’ll be so bogged down by the stress of cash flow problems that you won’t be able to lift your head above water. But when you’ve prepared, you’ll be in a strong capital position, able to act while others panic. That’s why it’s so important to view your finances through the lens of control. Let’s face it you started your business to take control of your destiny. But when you’re dependent on banks for capital, you’re not in control. As the old saying goes: A banker is someone who will sell you an umbrella when it’s sunny and take it back when it starts to rain.

Over decades of experience, through many economic cycles, we’ve seen this happen again and again: banks tightening credit, freezing access to lines, limiting your ability to move forward. It’s often not personal they’re protecting themselves. But that doesn’t make it any easier when you’re on the receiving end.

So how do you gain control? It starts with some simple shifts:

First, build a pool of capital that you have full liquidity, use, and control over. One way to start is by redirecting extra payments that you were making to banks whether to pay off loans or debt into your own pool of capital.

Second, reconsider how you save. Most people keep their savings in qualified retirement plans like 401(k)s. That means limited access. You can only take out the lesser of $50,000 or 50% of the balance as a loan. You’re also required to pay it back within five years, which can limit cash flow even more. Instead, start saving in a place where you have complete access and control. It doesn’t mean you have to pull money out of your 401(k), but direct future contributions toward vehicles that offer you control and liquidity.

Third, stop paying cash for major purchases. Squirrel that money away. Keep it accessible. If you have money on the side, you can still choose to pay for something, or take a loan and pay it back on your terms. You increase your flexibility and control, and you’re no longer asking for permission from the bank or risking being denied when times are tough.

If you’d like to learn more about how to prepare your business for when the bank freezes your credit line, visit our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

We all know cash flow is the lifeblood of any business. Today, we’re going to talk about what the true cost of dealing with a bank is. Not just numbers in terms of how much interest you’re paying, but the true financial cost and the true emotional cost of dealing with a bank. It’s easy to think about dealing with banks in terms of origination fees, interest rates, and loan terms. We know all of that. But what is the true cost of depending on a bank for access to money? The first and foremost issue is: you don’t control that process at all.

We’ve all applied for a bank loan. You have to show them everything. There could be things going on in the economy that are outside of your control. Your business could be doing very well, but because of external factors, the bank may look at your loan or credit line application very differently than they would have during a time of economic prosperity.

During a recession, 30 to 50% of applications for loans get denied. Think about that. You need more money to run and grow your business to be successful but the bank looks at your cash flow, assets, revenue, everything, and still says, “This isn’t good enough. You’re too big of a risk right now. Sorry.”

So what do you do then? There’s that helplessness. You need access to capital, and the bank is turning off the faucet. That’s a very difficult position to be in. For business owners who don’t have access to a credit line or the ability to get loans, it puts them in a much more difficult financial situation and it inhibits their ability to run and grow the business.

Think about the stress that causes not just financially, but personally. That pressure spills into your health, your family life, and everything else. If you’re not doing well in your business, that stress can carry over into all other areas of your life.

Intuit did a study and found that 61% of small business owners struggle with chronic or cyclical cash flow issues. That same study found that 69% lose sleep or sleep less due to cash flow concerns.

There are countless studies linking lack of sleep and increased stress with health issues. Chronic stress increases the risk of heart disease by 200% and cancer by 40%. Even more alarming? The life expectancy of a small business owner is a full five years shorter than the average American.

So think about this: the stress from cash flow problems many of which are outside your control is literally killing business owners. The irony is that most people go into business to achieve financial freedom. Instead, what they often get is chronic and cyclical cash flow stress. The question becomes: how do we relieve that stress? How do we set ourselves up as business owners so that we are no longer affected by that stress?

The answer is by building a pool of capital that we have full liquidity, use, and control over. The key is to prepare yourself for the inevitable economic downturn or any external factor that could cut off your access to capital. You can’t afford to remain dependent on banks. You need to create your own capital.

That’s why we advocate putting money away during prosperous times so that when the downturn comes and others are struggling for access to capital, you are ready. They say hindsight is 20/20. Looking back, you may or may not have experienced a downturn. But looking ahead, we can all see that another is likely coming. Taking action now to prepare your business, no matter where you currently stand, will put you in a position of strength when times get tough. That preparation gives you an unfair advantage over your competitors and peers. Why? Because you will have access to capital when they don’t. When you have access to capital, you have access to opportunities. If you don’t have money, opportunities won’t come knocking because people know you can’t take advantage of them. As Nelson Nash told me many years ago, “When you have access to capital, opportunities will find you.” And that couldn’t be more true.

At Tier One Capital, we use whole life insurance designed for cash value accumulation. These policies build up a pool of cash that you have full liquidity, use, and control over plus a death benefit.

You can access that money through the loan provision while you’re alive. That means as a business owner, you can use those funds to cover payroll, expand the business, buy inventory, invest in new equipment or technology all of the things that inevitably come up and require capital to move forward.

If you’d like to learn more about how to put these strategies to work for you, your business, and your family, check out our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

We all know cash flow is the lifeblood of any business. Today, we’re going to talk about what the true cost of dealing with a bank is. Not just numbers in terms of how much interest you’re paying, but the true financial cost and the true emotional cost of dealing with a bank. It’s easy to think about dealing with banks in terms of origination fees, interest rates, and loan terms. We know all of that. But what is the true cost of depending on a bank for access to money?

The first and foremost issue is: you don’t control that process at all.

We’ve all applied for a bank loan. You have to show them everything. There could be things going on in the economy that are outside of your control. Your business could be doing very well, but because of external factors, the bank may look at your loan or credit line application very differently than they would have during a time of economic prosperity.

During a recession, 30 to 50% of applications for loans get denied. Think about that. You need more money to run and grow your business to be successful but the bank looks at your cash flow, assets, revenue, everything, and still says, “This isn’t good enough. You’re too big of a risk right now. Sorry.”

So what do you do then? There’s that helplessness. You need access to capital, and the bank is turning off the faucet. That’s a very difficult position to be in. For business owners who don’t have access to a credit line or the ability to get loans, it puts them in a much more difficult financial situation and it inhibits their ability to run and grow the business.

Think about the stress that causes not just financially, but personally. That pressure spills into your health, your family life, and everything else. If you’re not doing well in your business, that stress can carry over into all other areas of your life.

Intuit did a study and found that 61% of small business owners struggle with chronic or cyclical cash flow issues. That same study found that 69% lose sleep or sleep less due to cash flow concerns.

There are countless studies linking lack of sleep and increased stress with health issues. Chronic stress increases the risk of heart disease by 200% and cancer by 40%. Even more alarming? The life expectancy of a small business owner is a full five years shorter than the average American.

So think about this: the stress from cash flow problems many of which are outside your control is literally killing business owners. The irony is that most people go into business to achieve financial freedom. Instead, what they often get is chronic and cyclical cash flow stress. The question becomes: how do we relieve that stress? How do we set ourselves up as business owners so that we are no longer affected by that stress?

The answer is by building a pool of capital that we have full liquidity, use, and control over. The key is to prepare yourself for the inevitable economic downturn or any external factor that could cut off your access to capital. You can’t afford to remain dependent on banks. You need to create your own capital.

That’s why we advocate putting money away during prosperous times so that when the downturn comes and others are struggling for access to capital, you are ready. They say hindsight is 20/20. Looking back, you may or may not have experienced a downturn. But looking ahead, we can all see that another is likely coming. Taking action now to prepare your business, no matter where you currently stand, will put you in a position of strength when times get tough. That preparation gives you an unfair advantage over your competitors and peers. Why? Because you will have access to capital when they don’t. When you have access to capital, you have access to opportunities. If you don’t have money, opportunities won’t come knocking because people know you can’t take advantage of them. As Nelson Nash told me many years ago, “When you have access to capital, opportunities will find you.” And that couldn’t be more true.

At Tier One Capital, we use whole life insurance designed for cash value accumulation. These policies build up a pool of cash that you have full liquidity, use, and control over plus a death benefit.

You can access that money through the loan provision while you’re alive. That means as a business owner, you can use those funds to cover payroll, expand the business, buy inventory, invest in new equipment or technology all of the things that inevitably come up and require capital to move forward.

If you’d like to learn more about how to put these strategies to work for you, your business, and your family, visit our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

We all know cash flow is the lifeblood of any business. Today, we’re going to talk about what the true cost of dealing with a bank is. Not just numbers in terms of how much interest you’re paying, but the true financial cost and the true emotional cost of dealing with a bank. It’s easy to think about dealing with banks in terms of origination fees, interest rates, and loan terms. We know all of that. But what is the true cost of depending on a bank for access to money?

The first and foremost issue is: you don’t control that process at all.

We’ve all applied for a bank loan. You have to show them everything. There could be things going on in the economy that are outside of your control. Your business could be doing very well, but because of external factors, the bank may look at your loan or credit line application very differently than they would have during a time of economic prosperity.

During a recession, 30 to 50% of applications for loans get denied. Think about that. You need more money to run and grow your business to be successful but the bank looks at your cash flow, assets, revenue, everything, and still says, “This isn’t good enough. You’re too big of a risk right now. Sorry.”

So what do you do then? There’s that helplessness. You need access to capital, and the bank is turning off the faucet. That’s a very difficult position to be in. For business owners who don’t have access to a credit line or the ability to get loans, it puts them in a much more difficult financial situation and it inhibits their ability to run and grow the business.

Think about the stress that causes not just financially, but personally. That pressure spills into your health, your family life, and everything else. If you’re not doing well in your business, that stress can carry over into all other areas of your life.

Intuit did a study and found that 61% of small business owners struggle with chronic or cyclical cash flow issues. That same study found that 69% lose sleep or sleep less due to cash flow concerns.

There are countless studies linking lack of sleep and increased stress with health issues. Chronic stress increases the risk of heart disease by 200% and cancer by 40%. Even more alarming? The life expectancy of a small business owner is a full five years shorter than the average American.

So think about this: the stress from cash flow problems many of which are outside your control is literally killing business owners. The irony is that most people go into business to achieve financial freedom. Instead, what they often get is chronic and cyclical cash flow stress. The question becomes: how do we relieve that stress? How do we set ourselves up as business owners so that we are no longer affected by that stress?

The answer is by building a pool of capital that we have full liquidity, use, and control over. The key is to prepare yourself for the inevitable economic downturn or any external factor that could cut off your access to capital. You can’t afford to remain dependent on banks. You need to create your own capital.

That’s why we advocate putting money away during prosperous times so that when the downturn comes and others are struggling for access to capital, you are ready. They say hindsight is 20/20. Looking back, you may or may not have experienced a downturn. But looking ahead, we can all see that another is likely coming. Taking action now to prepare your business, no matter where you currently stand, will put you in a position of strength when times get tough. That preparation gives you an unfair advantage over your competitors and peers. Why? Because you will have access to capital when they don’t. When you have access to capital, you have access to opportunities. If you don’t have money, opportunities won’t come knocking because people know you can’t take advantage of them. As Nelson Nash told me many years ago, “When you have access to capital, opportunities will find you.” And that couldn’t be more true.

At Tier One Capital, we use whole life insurance designed for cash value accumulation. These policies build up a pool of cash that you have full liquidity, use, and control over plus a death benefit.

You can access that money through the loan provision while you’re alive. That means as a business owner, you can use those funds to cover payroll, expand the business, buy inventory, invest in new equipment or technology all of the things that inevitably come up and require capital to move forward.

If you’d like to learn more about how to put these strategies to work for you, your business, and your family, visit our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

It’s easy to run and grow your business when the conditions are favorable. But what happens when there’s an economic downturn? How can you use life insurance policy loans to help run and grow your business during times of turbulence? According to a U.S. Bank study, 82% of businesses fail due to cash flow concerns and cash flow issues that hold them back. That same study also found that loan rejection rates increase by 30 to 50% during an economic downturn.

So, cash flow is down, your access to money is down how do you continue to grow and run your business during these times? That’s why we advocate very strongly that you position yourself for that ultimate downturn in the economy. Think about it. It’s the factors that are outside your control, and you have to prepare yourself to be able to weather that storm. What better way to do it than to have access to capital? You see, access to capital trumps everything. When you have access to capital, opportunities will find you.

You’ll hear people talk about scarcity and abundance mindset. It’s really easy to talk about the abundance mindset except when you actually feel like there is scarcity when it comes to cash, access to cash, and cash flow. It could be really easy at that time to hunker down and try to get through. But if you have the foresight to build up cash reserves in a life insurance policy, for example, you are actually going to be in a position where you will have abundance. You will be able to use that money for whatever you want.

There are no limitations on how you use life insurance policy loans. There are no qualifications on whether or not you’re able to access that money. The only requirement is that you have the money built up in your policy, and then you’re able to use that life insurance policy loan provision to access that money to weather the storm.

Keep this in mind: your financial situation is going to be compared to everybody else your competitors, your peers. And if you have access to capital at a time when they do not, it’s going to put your business in a much stronger position so that you can actually take advantage of all of the bad things your competitors are going through, and maybe have some opportunities that you wouldn’t have had access to previously.

If cash flow is tight, it’s going to be hard to hire new people. It’s going to be hard to meet payroll. It’s going to be hard to invest in new equipment and technology which is more important than ever these days. And if you have access to money, you’re going to be able to do all of those things, while your competitor, who isn’t necessarily prepared, is going to have a much more challenging time.

That’s the point of having access to capital. Life insurance fits the bill so well because you have two things going on. Yes, you have a death benefit, but you also have an ever-increasing base of capital. It’s guaranteed to have more cash next year than it did this year, and it’s guaranteed to have more cash the year after next than it does next year.

So consequently, you have this perfect compounding, where the money is continuing to increase year after year after year and all you’re doing is putting the same amount of money away. That gives you the access to capital that you need to run and grow your business.

It all comes down to the design of these policies. First of all, they’re designed for cash value accumulation so, early access to cash in the beginning of the life of the policy. This is unique to life insurance policies because typically, with a whole life policy, it takes several years until there’s any cash value you can borrow.

Also, with whole life policies, you’re designing the policies with actuaries. They are actuarially designed to get better and better with time. As you get closer to the end of your life expectancy, the cash value needs to grow faster and faster in order to meet the two promises.

The first promise is to pay that death benefit out anywhere along the line as long as the policy is in force. The second promise is to have a cash value that’s equal to the death benefit at the age of maturity typically age 100 or 121.

In order to meet that second promise, the life insurance company needs to stash away more and more cash year over year so they can meet it. That’s all part and parcel of having access to capital. As the policy grows, as time goes by, the cash value grows greater and greater.

Let me share how a client of ours used this. We set up a policy for them in the late 1990s, and then around 2007 and by the way, they weren’t putting a lot of money into the policy; I think it was like $300 per month but as time went by, during the financial crisis, they had an opportunity to start a business. But they needed capital.

So they called and said, “Hey, do we have enough money in our policy? You said we could borrow against the cash in our policy. Do we have enough cash value to borrow $5,000?”

And sure enough, they did.

They were able to access that money no questions asked.

And that was the thing that amazed them. They just called the insurance company, and the company didn’t ask them what their credit score was. They didn’t ask what they needed the money for. They just said, “Where do you want it? How much do you want?” And that was it. Consequently, they had the money. They opened the business. They used the money to start it, and now that business is worth $400,000. Now they’re at the point in their lives where they’re going to sell the business.

Think about all the income they generated over those years. Now they’re going to sell that business for maybe $400,000 maybe $350,000. That’s an incredible rate of return on a $5,000 policy loan. And it’s one of those things where they didn’t necessarily know what was going to come up, but they knew that, number one, they wanted the death benefit, and number two, they liked having the ability to access the cash if they ever needed to.

So, by taking those steps even without knowing exactly what they were going to use that money for they were able to take advantage of the opportunity when it came knocking on their door.

If you’d like to learn more about putting this system to work for you, your life, your business, your family, be sure to visit our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.

A client called the other day and asked this question: is whole life insurance a good hedge against economic tariffs? Today we’re going to talk about exactly that how to hedge against tariffs using whole life insurance.

It seems like whenever you turn on the TV, they’re talking about tariffs these days. So it’s natural that people are wondering how to come out ahead with these tariffs being imposed on us.

And not just tariffs, but any type of economic uncertainty. Life insurance is always a good hedge—and by that, I mean cash value life insurance. The reason is because there are three basic, fundamental principles of life insurance that could help anyone during a downturn or times of economic uncertainty.

The first is access to capital. Access to cash is king. It really is. Just knowing that you can access that cash for whatever you want, whenever you want no questions asked puts you in a different, more positive position during economic uncertainty.

With these whole life insurance policies designed for cash value accumulation, they have a loan provision, which is a contractual guarantee that you’re able to access the policy’s cash value through a policy loan from the insurance company. That’s not something you’re going to get in many other places.

That puts you at an advantage.

The second key is that you can use the dividends in a life insurance policy to help supplement your retirement income, giving you retirement income certainty. One of the keys there is that you save on a bunch of taxes that you wouldn’t if you had money in a traditional retirement account or a taxable brokerage account.

With these whole life policies, it’s not something that’s going to go on your tax return. The Social Security Administration is not going to ask how much money you accessed from your life insurance contract this year. It’s totally off the radar when accessed through the loan provision.

Keep in mind that if you surrender cash over and above your basis how much money you put in it becomes taxable. For example, if you paid $10,000 a year for 10 years, that’s $100,000. The first $100,000 that comes out as a distribution from your life insurance is a return of paid premium and is not taxable. But the next dollar over that is fully taxable as ordinary income.

So the key is to avoid triggering a taxable event.

What that could look like is pulling all of the money you paid into the policy out your basis and then, for that next dollar that would be taxable, using the loan provision instead of continuing to surrender value from within the policy.

The third key to cash value life insurance is that it’s a hedge during volatile times. Whether it’s the market reacting to tariffs or geopolitical events, life insurance cash values are not correlated to the stock market. That’s a really good thing.

It’s especially important when you think about how to take advantage of opportunities during times of uncertainty. Because when there’s so much panic in the world, that’s often when the best opportunities arise for those who have access to capital.

Now let’s look at why life insurance is such a great asset during times of uncertainty or volatility. It comes down to the conservative nature of how insurance companies reserve and manage money. Basically, they buy bonds but they hold those bonds to maturity. So fluctuations in the bond market don’t affect an insurance company the way they might affect a bank.

Because insurance companies are holding their assets to maturity, they’re not subject to selling at a loss. That conservative approach is key.

Insurance companies are also limited in what types of assets they can invest in. By nature, those assets don’t fluctuate much. So the insurance company is essentially very good at investing conservatively because of their regulatory constraints and fiduciary duty.

The majority of their assets are bonds, and they hold those bonds to maturity. For example, if they have $10 million and know they’ll need $15 million in 10 years to cover expected death claims, they invest the $10 million in a way that will yield $15 million in 10 years.

Spoiler alert: insurance company actuaries are engineers. And engineers overbuild everything.

So while they plan to have $15 million, in reality, they might only need $12.5 million. But they invest to hit $15 million just in case. That’s a good thing especially when you’re in the business of managing risk.

This is actuarial science it’s not an art or a guess. It’s science. They know when people are going to die, statistically speaking, and they plan accordingly.

So they hold their bond portfolio to maturity. In the meantime, interest rates go up and down, bond values fluctuate but it doesn’t matter. Because they’re holding to maturity, that conservative and certain approach protects them and, by extension, your money.

A great test of that was the COVID-19 pandemic. During that time, more people were dying sooner than expected. Yet, all of the insurance companies stayed afloat. Why? Because actuarial science helped them plan for the future.

Yes, the insurance industry suffered significant losses. But because of their massive reserves, they were able to weather the storm.

And those reserve requirements imposed on them put insurance companies in a position where your money is safest.

So the bottom line is this: cash value life insurance can be a safe harbor during volatile or uncertain times.

If you’d like to learn more about how to put a whole life insurance policy designed for cash value accumulation to work for you, your business, and your situation, visit our website at www.tier1capital.com and click the “Schedule Your Free Strategy Session” today. 

Thanks for reading, and remember it’s not how much money you make, it’s how much money you keep that really matters.