Valuable Finance Insights from Tier 1 Capital

Laptop, calculator, and graphs on a desk, representing business and finance.

Mastering the Art of Business Storytelling with Park Howell

Episode Summary

In this episode, Tim & Olivia are joined by Park Howell, host of “The Business of Story” podcast. With over eight years of podcasting experience and a wealth of knowledge in branding, advertising, and marketing, Park brings a unique perspective on the power of storytelling in today’s noisy world.

Guest Info

This is Park Howell’s website

Key Takeaways

ABT Framework for Effective Storytelling:

  • The And, But, Therefore (ABT) framework is a simple and effective way to structure stories and messages.
  • ABT can be applied to various aspects of business, communication, and problem-solving.

The Power of Storytelling:

  • Storytelling is a powerful tool for connecting with people and conveying messages effectively.
  • Stories allow individuals to relate, connect, and find common ground even when they initially seem unrelated.

Simplifying Complex Topics:

  • Storytelling can simplify complex topics, making them more accessible and understandable to a broader audience.
  • Using stories to illustrate financial concepts can help clients grasp and engage with the information more effectively.

The Importance of Personal Growth:

  • Both business owners and clients can experience personal growth through financial education and taking control of their finances.
  • Improved financial literacy can lead to a brighter and more secure financial future.
Transcript Below

Tim: Well, today we have Park Howell from the Business of Story. Park, it is definitely an honor to have you on our podcast, and, uh, if you don’t mind, why don’t you share with our audience the, your backstory.

Park: Sure. Well, Tim and Olivia, thank you so much for inviting me on your new show. I, uh, Congratulations. My hat’s off to you. You know, I’ve been doing my podcast for almost eight years. And people are like, dude, how you know how much can you actually talk about storytelling? You’ve got like 425 episodes, but there’s just something about it.

You get a chance to meet really interesting people and talk to great guests. And um, I think through my show, I got, uh, acquainted with you all and they did a little bit of work with you over the, uh, well what was that? Pre pandemic or that was during the pandemic, I think some brand storytelling work with y’all.

Tim: Well, so originally Park, we worked pre pandemic, and then when pandemic hit, uh, we did some other, uh, some of your courses, et cetera. So,

Park: Gosh, that just seems like it was so long ago now, but I’ve been at this for a long time. You’d asked quickly about my backstory, so. As you know, I’ve been in the branding, advertising, marketing world for 35 plus years. I ran my own ad agency in Phoenix, Arizona for 20 of those years, and really about 2004, I started looking for other ways to communicate because technology, the internet, you know, took over and where our clients used to own the influence of mass media, the masses had become the media and they are more, you know, vocal and louder than ever.

This day and age. So you and I and everybody watching and listening to this program, you know, our biggest struggle is how do we get our messages to land right the first time, every time quickly, so that we can hack through the noise and hook into the hearts of our audiences out there. And it was, I went in search for that very answer to that very question, and that’s where I found story tell, telling back in the early 2000 aughts and have studied it inside and out and, um, 2016 really pivoted away from my traditional ad agency.

Uh, closed it down, and now all I do is consult, teach, coach, and speak on the power of story internationally from sales and marketing to brand building and so forth. And it’s probably more crucial or critical now than ever to be able to really understand the power and use the power of story because we are all competing in this cacophony.

Of communication out there, and it is almost impossible to be heard unless you use these three primal frameworks that we teach. And you know, they all begin with the, And, But Therefore, but that’ll give you a quick little background in who I’m a, who I am, what I’m about. My ultimate goal is to help everybody here excel through the stories they tell by using these frameworks.

Tim: Well, the, you know, and, and we could attest that it works. Uh, we, our messaging has been spot on since we had consulted with you, um, Park share with us Also, you know, a lot of us have read. And our, our proponents, so to speak, of Joseph Campbell’s Hero’s Journey, and I know that that sort of played into part of your journey.

Why don’t you share with us how that’s worked?

Park: Wow. It sure did. You know when I went back looking for an answer as an ad agency owner to how do we possibly be effective in this very noisy internet driven world? We were lucky, our middle child. Our son Parker was going to film school at the time over at Chapman University in Orange, California. A very, very prominent film school.

And he graduated, went what? 2006, graduated 2010. Spent the next 12 years in Hollywood, primarily directing virtual reality and mixed reality films. And he has since moved on to Austin, Texas, and he’s doing a ton of work out there. He loves the intersection of technology and movie making in Austin. But I tell you that because since I was looking for this answer to this question of how do we stand out in this noisy world, I asked Parker.

I didn’t ask him. I, I prompted him. I said, listen, Send me your books and your recorded lectures when you’re done with them since, well, we’re paying for them because I want to know what does Hollywood know about coaching and building? Right. You know, competitive storytellers in the most competitive storytelling market in the world.

Los Angeles and Hollywood. That’s when I found Joseph Campbell read the Hero’s Journey. Looked at this monomyth. That’s anywhere from 12 to 17 steps, um, depending on who you read. It is an amazing, amazing framework and we’ve used it to great effect in, in brand development, brand story strategy. In fact, growing one brand by 600% using our story cycle system, which is based off.

The Hero’s Journey, I tell you all that because I started in the very complex world of storytelling and started to learn that in the business world, most business leaders, sales and marketers don’t want complex brand storytelling. They don’t even care about the theory. What they really want is give us a simple, foolproof, proven way to be able to communicate that uses the three forces of story.

And so everything I teach now, Tim and Olivia, I, I, I, I teach exactly backwards from how I learned it. I learned the very complex. Hero’s Journey, applied it to the 10 step story cycle process, tried the eight step Pixar way, which is really cool in its own right. But you know what? Majority of us are not screenwriters, so it’s kind of hard to figure out.

Um, Blake Snyder’s, 15 beats of story is brilliant still. It’s hard to figure out. So I’ve boiled it down to first the five primal elements of a short story for big impact and then even reduced that down to the, and, but, therefore. This ABT framework that we know works because it uses the three forces of story of agreement, contradiction, consequence, which plays to this subconscious, primal limbic brain, which is pattern seeking cause and effect decision making.

In the background while all the rest of this noise and hub hub is going on around us. So long-winded way of saying I learned it for the complex, create it simple, and now I teach it just the exact opposite way.

Olivia: That’s interesting Park. Um, because the, what really hit me there is. The business owners do want the simplicity as, as someone who’s working in the business, give me an equation that’s going to work time after time. I know I need to tell the story. I know that’s how I relate to people, but the how, how can I do it as effectively and simply and consistently as possible to make the biggest impact?

So that certainly makes a lot of sense.

Park: Yeah. And that’s where the And, But, Therefore, comes in because you don’t have to be a story theorist to be able to apply it in all of your work, whether you’re doing a brand strategy, an email campaign, social media focusing, a sales presentation, you name it. It starts with really understanding how to use the, And, But Therefore, and real quick, just for your viewers, listeners, what that means is, the And is a statement of agreement.

You want to get your audience nodding yes, saying yes, that’s what we want. But is a statement of contradiction, but you don’t have it because of this problem. Your Therefore is a statement of consequence. Therefore, imagine what it’s gonna be like when you get it. When you follow my advice to do this or whatever, set up problem resolution.

It is literally what I have learned is the DNA of storytelling. Get this three word framework down and it will completely revolutionize how you communicate everywhere else. Using those three forces of story, agreement, contradiction, and consequence.

Olivia: That makes a lot of sense.

Tim: Now Park, we, uh, we’ve been, uh, subscribers or loyal listeners to your podcast. And, uh, I’m, I’m amazed almost every time I look at a guest and I’m thinking, oh my God, I have nothing in common with this person. And then they come out and tell their story and it’s like, Oh my gosh, this is so fascinating and it’s because of how they’re, I really think it’s because of what you taught them and how they’re delivering their message.

Uh, you had a, uh, uh, a woman on not long ago from the Better Business Bureau, uh, and I was thinking like, oh my God, there’s no way. Yes. And, and I’m thinking, there’s no way, well, I’ll listen to it because Park’s podcasts are usually pretty interesting, but son of a gun, I’m walking out, I’m thinking I gotta join the BBB.

Olivia: It’s funny, it’s funny how, how, how stories allow us all to, to connect and, and you know, you could be listening when I’m listening to keynote speakers especially, it’s like I have nothing in common with them, but I, I’m so interested in, in. In relating my own story cause we look at everything through our own lenses and relate everything in our, in our existence through our own lens.

So I love listening to other people’s stories and how they triumphed and, you know, the story is just so powerful how it’s able to connect so many people with so many different lenses and, and cause action. You know, it’s, it’s a very powerful way to, to cause people to take action and, and move forward.

Park: Yeah, and, and you’re exactly right and, and what we all have in common. Whether you look at that guest and go, I’m not really sure if the BBB show’s right for me, or there’s a lot of guests on there. You could look at the business of story and go, really, where’s he going with this? But we always have one central focus with the show, and it doesn’t matter who comes into it.

We’re always trying to find that Central focus, and that is to help our listeners excel through the stories they tell, which is the tagline for the business of story. And what I have learned in this whole process is you can approach storytelling from myriad directions. And where, and, and, and people that seem so far removed from you that it couldn’t possibly have anything to do with your business.

My job as the host is to show you how they’re using story to be able to build their own thing, be it a career, a business, a nonprofit, for-profit, whatever, and then weed out, suss out those tips that they have that you have never thought about before in your own line of work and go, I could use that. I’ve never thought about it that way.

I wanna see how I can apply it now in my world. And I think, again, it kind of goes back to this, And, But, Therefore, methodology of getting you super focused on who your audience is. Who listens to my show, who listens, watch, watches your show? What is it they want relative to our respective offerings? And why is that important to them?

What is it that they want out of life, and why is that important to them? That’s our statement of agreement. So in my case with the show, you know, these are often small business owners, solopreneurs, chief marketing officers, HR leaders, you name it. What do they want? They want to be able to connect and convert their audiences as quickly as possible into their way of thinking, feeling, doing.

Could be an internal initiative, it could be a sales and marketing program, whatever. That’s what they want in the world, but they quite often don’t know where to start. And storytelling can be really confusing for ’em. Therefore, with the business of story, I try to simplify it and approach storytelling from any number of surprising directions that hopefully our listeners, viewers have not thought about before, that they could at least take one tip from that and apply it to their business.

So, you know, my next question for you two, what’s the ABT for your show? Let me put you on the, uh, hot seat for a minute. Who’s your listener, who’s your number 1 listener?

Tim: Well, you know, park, I. I was, I was sitting here chomping at the bit, hoping you would ask that question. So, um, yeah, so the, the, here here’s our ABT, our ABT. Everybody wants to be in control of their cash flow.

And their money, and they think that every move they’re making financially is putting them in control. But the reality is that we’ve been conditioned by the financial institutions and the government to give up control of our money unknowingly and unnecessarily, therefore, We designed a process to show you how to put you in control of your money so that you could win not the financial institutions and not the government.

Park: That’s awesome. 

Tim: Well, I had a good coach. I just wanna say that I had a really good coach.

Olivia: So the goal of the show is to, to showcase business experts or business owners and share their experiences and how they either help businesses grow or grow their own business and, and share that with other business owners out there so that they could take advantage of the same opportunities to be in more control of their cash flow and more in control of their life.

Right? We always say whoever controls your cash flow controls your life. So if you’re able to gain more control without increasing your income or you know, having to chase and increase your sales and just gathering information from this community and take it out like you say and, and just apply that one thing to move yourself forward, that’s a win.

You know, that’s a good use of your time.

Park: Absolutely. And we’ve all bought into that old story, haven’t we? Of what? Of the way they want us. To save the big corporate industrial financial complex that in some cases uses predatory tactics to get us to save so that they can live off of that money, pay us in the long run, but then tax that payment even when they do that too.

So what you are to are about is not creating a new story because it’s, there’s revealing this new narrative about how you can get in control of your own cash flow.

Tim: Yeah, and we’ve, we’ve found that it’s. People. People have the wherewithal and the cash flow and the money to do almost anything they want to do. The problem is, is that they’re so inefficient in areas that they shouldn’t be inefficient with their money. That, it ties their hands and prevents them. It sort of puts them in a position of scarcity rather than abundance.

And when we free them up, a lot of times Park, it’s, it’s sort of like, uh, it’s just a, a different way of thinking or a different way of looking at things. And when you. Open up that lens for them and show them how they could be in control of more and more of their money, more and more of their cash flow.

All of a sudden, the world is just completely different for them, and now there’s opportunity, after opportunity, after opportunity. And it, and now they’re, they’re, they’re sitting there and saying, well, what’s the best utilization of my money? Rather than saying, boy, I’d like to take advantage of that, but I don’t have the money to do it.

Park: Mm-hmm. Yeah. I mean, it’s a tremendous service you provide to the world out there. It’s just getting people to, for lack of a better term, buy into that story. Right. Um, I know when I’ve shared your story and some, some similar stories from your competitors to people, I go, what do you think of this? This is pretty cool.

The one thing I hear back, and I don’t know that you probably hear this too, and I’m kind of curious from a storytelling standpoint, how do you overcome it? People will say, it just sounds too good to be true. Everything I know. It doesn’t work that way. How could this possibly work that way?

Tim: So here’s, we, we give, I think we give really good examples and we tell it in this form of a story. So when you’re talking about folks who, uh, let’s say we’re thinking about things a little differently, or needed to think about things a little bit differently. I, I met with a gentleman about four years ago.

Who was making really good money and, you know, over $600,000 a year, and we’re thinking, I was thinking like, well, there’s not really much I could do to help this guy. But the reality was he had two business loans and a credit line, and the business loans and the credit lines, uh, popped up because he couldn’t pay his quarterly taxes, uh, without drawing on his credit line. And ultimately what would happen is he would draw on his credit line and then not pay back as much as he he drew for for the previous quarter, and then keep adding to that, and then the credit line would be maxed out. So the bank would term out that loan, make it a five year.

Monthly payment loan instead of an interest only credit line loan. And then he’d have to get another credit line. So he had two of those business loans and an open credit line. And so I, I asked him, at this point, I didn’t know how much money he made, and I said, well, how much, what was your income? And he said, well, I’m making about 600,000 a year.

I said, what was your goal when you started this business? He said, if I thought, and he started laughing, he said, I thought if I could make 150 to 200,000 a year, that we would be in pretty good shape. And I, I started laughing and I said, isn’t it ironic that you’re making three and four times what you ever dreamed you could make? And you can’t pay your damn credit your your damn, uh, quarterly taxes without drawing on a credit line. And he, he, I, I remember the, the look on his face, he said, you know, I never thought of it that way, but that’s just what I do. And that’s where I realized that the system conditions us to do things in a way that benefits the system, but is to our detriment. And, you know, we, we got him straightened out. This is the, this is the great part about it. We started his plan in October of 2019, and in, uh, July of 2020, he filed his, uh, 2019 taxes on extension on his way back from his CPA’s office. He texted me and said, Hey, Tim, I just want to share with you. That we just finished up my 2019 taxes.

I had enough money to pay my tax liability for 2019. I have enough money set aside for my September quarterly, our January quarterly, and what we think we’re gonna owe for 2020 in April of 2021. Thanks so much for everything you do for myself and my, my family, and my business. Now, that’s a great story,

Park: Oh yeah.

Tim: it’s even better. Because in December of 2022, now here’s a guy who couldn’t pay $50,000 a quarter in cash. He had to borrow on a credit line. In December of 2022, I met with him and his CPA and we found out that he’s got all these little businesses set up for various locations of his business. He has over 1.8 million of cash sitting in those businesses.

So what a transformation that was from, from October of 2019 to December of 2022. What are we talking? Three years? A little over three years. He went from not having 50,000 to having almost $2 million in cash, all because of how we taught him to think about using his money. So that’s the power when people ask.

It’s too good to be true. This could be you.

Park: Well, and when we met, and you were talking about this a few years ago, we sort of arrived at this central narrative for you all. I’d be curious if you’re still using it about this idea of. You know, playing off of cash flow to cash fluency, meaning understanding everything that you teach that we don’t, we aren’t all the best at cash flow.

And really, how do you do it? It’s not our world. It’s where you all live all the time. It’s your swim lane. The rest of us are floundering in that swim lane. But are you still using that concept of cash fluency?

Tim: We do, not as much as I think we should, but at the other, the other side of it is, one thing that we did walk away with from, from consulting with you is that the money is literally hiding in plain sight.

Park: Yeah.

Tim: And, you know, and this was a great, this, this example that I shared with you was a great example of this gentleman had the money.

It was just, and it was hiding in plain sight. All he needed to do was look at things through a view, things through a different lens. And now when you view things through the lens of being in control, all of your choices and all your decisions with how you’re gonna use your money. Become much, much more clear.

And that’s why he’s in this significantly stronger position financially.

Park: Yeah. That’s awesome. It’s a great story.

Tim: Now, Park, you co-wrote a book recently, uh, The Narrative Gym of A, is it of ABT, was that the title?

Park: No, The Narrative Gym for Business, but it is all about the ABT. Yeah. So my first book that I came out with, do I have a copy of it? Well, look at that. I just happen to have a copy of it right here. Brand Bewitchery, this is the 10 step story cycle system that will teach you how to develop a real powerful brand strategy for your business.

Plus, it’ll teach you the two other, uh, frameworks that we share so you know how to talk about it. But Tim, since you asked, here you go. I wrote this, co-wrote this with Dr. Randy Olson. He’s the gentleman that introduced me to the And, But, Therefore, Har, uh, you know, as you probably know from listening to my show, Randy is a Harvard PhD evolutionary biologist, turned USC film school grad, produced three documentaries on climate change and global warming now has 10 books under his belt.

Teaching scientists what he learned from Hollywood, how to communicate their big ideas. It was Randy in his second book called Connection that I read back in 2013 before it came out actually, they sent me a galley proof of it, and that’s when I was first introduced to the ABT. And that’s where I thought, wow, this thing is so powerful, but it’s so short.

Can it really work? And so I spent the last decade working with Randy. We teach it in the science world, I translate it to the business world. And yes, this is the book, very simple, you know, 75 page guide to help you craft ABTs in all aspect of business, not science, but business.

Olivia: Oh, that’s awesome. And, and so much that’s so applicable. I mean, the thought of how many, how many great scientists and business owners have a great story to tell, a great message to get across, I should say, a great, something that could be transformational and life-changing for the people in their community.

And you know, so many people out there, but if you don’t know how to communicate it in an effective way, It’s, it’s like a pile of rocks. You know, it’s not gonna do anything for you if, if, if you don’t know how to communicate it and communicate it in a way that is going to provoke emotion and cause action.

So that’s great. And man, the, the, the thought of applying it to scientists, That’s gotta be so powerful and, and rewarding, you know, to, to be able to translate it into science and have them communicate their message.

Park: Yeah, well, Olivia, during the pandemic, you know, when a lot of our speaking gigs, in-person courses and whatever got shut down, Randy went through the same thing because he was, again, working with science and then academics, big thinking, academics, and so he started an online 10 session online. Uh, course ten one hour sessions, four scientists.

Specifically during the pandemic, we were working completely, virtually on it. Myself and Randy and a few other colleagues, and we trained, we log over 300 hours training this program to the science world, and guess what? In that process we learned so much, about how to communicate it, how to train it, um, that it was invaluable for us.

And so, yeah, I, I travel all over now, thankfully, and I do virtual work too, but I was just in Virginia last week. I was working with McCormick. You know, the Spice Spice people, you go in your pantry, the McCormick Spices. Well, I had done, uh, several full day training sessions for them. Pre-pandemic. Hadn’t heard from them in a couple years, but now they’re just bringing their sales teams back in and people back in.

And so I did another half day session out there with them. I do in the tech world, uh, the music world, I mean, you name it, you can apply this to any line of work you’re in because what do they all have in common? As you and I and everybody watching and listening to this, we are trying to communicate and convert that Homo sapien sitting across from us.

Essentially that storytelling ape. And I don’t mean to, you know, dissolve us down to apes, but essentially we are, cause we’re not that much different than our brethren, you know, the, the monkey out there. But we are the only organisms that we know that plan, think, organize, and act in story. So you know, Tim, that story you just told earlier about that gentleman who you helped out, who went from being in debt every quarter to 50 for 50,000 bucks to whether he had 1.8 million in cash reserves that he could use anywhere.

Well, that’s a story that happened now, but you are telling it to a prospect and it’s still a fictional account for that prospect. Because, what you’re trying to do is get them to buy into this fiction, and then you make it fact by delivering on all the promises you make in that story to show them what a brighter tomorrow would be if they follow this, and then you know, you prove it out by making that happen for ’em.

Well again, we are the only organisms that we know of that can buy into that fictional account. See that bigger picture. Then of course, as a storyteller, you’ve gotta deliver on it and make that fiction fact as you’ve done so many times before with all of your other customers. And that’s why stories work.

It’s, it’s a bonding agent. You know, you, when you hear a good story, you can feel it. You can well up, you can laugh, cry, make, you know, the hair stand up on your arms on the back of your neck. It has a visceral connection with you. And make no mistake, we buy with that visceral emotion and we justify the purchase with our logic reasoned brain.

That’s why we always in business want to begin with placing our business points in the context. Of a story so that Homo sapien sitting across from you can easily process it in their primal limbic brain without any effort. And then you start backfilling with the logic and reason to support your emotional problem solution point.

Tim: Well, you know, and, and, and that’s the struggle for a lot of business owners and, and a lot of salespeople, right? We’re good at what we do. I could, I, I, and I think I told you when, when you and I first started working together, I could say with a hundred percent certainty that you’re giving up control of money.

I not even seeing your situation, but I know for a fact you’re, you’re probably giving up control of your money now. You don’t believe that. Because you think everything you’re doing is moving you forward. You wouldn’t do it if you didn’t feel that way. True?

Park: Right, right.

Tim: And so the easy part for us is to deliver on what we’re, what we’re saying or you know, our story.

The hard part is doing it in a way or communicating that in a way where people understand it. And that’s where we got invaluable coaching from you to. Be able to deliver on what we actually do in a way that our clients and prospects can understand it, and more or less, uh, more so take action for their betterment.

Park: Yeah, that’s, that’s so awesome to hear and what you’re saying right there, Tim is a very valuable point for all your audience here, and that is, Whenever we are trying to sell something to someone, or let’s say selling people have such a bad connotation of the word sales, but that’s what we all do. Let’s say we just want them to buy in to our way of thinking, feeling doing brand, product, service, or your way.

Of ma- of doing a better job of managing cash flow. What we’re doing and every single time we ask them to, to consider this is we’re trying to shake them out of status quo. To your point you just made there, mark, you’re not gonna change because you think it’s actually working for you, but I want you to consider doing something like this.

Well, I’m gonna tell myself an anti-story. I can’t help it. It’s gonna pop up and it’s all about survival. Well, no, you know, Tim, I can’t possibly do it because I bought into this story here and it seems to be working okay here. And don’t shake me outta my status quo because it’s comfortable for me. I don’t feel like I have to deal with any sort of change if I don’t have to move.

But how often by remaining in status quo do we find ourselves shooting ourselves in the foot? Blowing it? Because we didn’t move. We didn’t change when we need to change. And our jobs, no matter if we’re leaders, sales, marketing, branding, nonprofit, teachers, coaches, consultants, parents, our job is to do what’s best for that person sitting across from them, right?

And quite often that means change. From their point of view, it would be better if you exercised more, if you drank less, if you got out and saw more people, if you stopped working so hard, if you managed your cash flow a little bit differently. You’re asking me to change, I’m gonna well up. I’m gonna create a anti-story.

You and I, and everybody else has to have a better story. A true story well told to combat that anti-story because there are no amount of numbers. That are going to beat an anti-story cause they have emotionally bought into it. It’s that what they believe, it’s what they value. Even if it’s wrong for them, that’s our job then to go and show them a new way of looking at a new vision, buy into a new belief.

And then, you know, as we’ve been talking about, you gotta pay off on that. You gotta absolutely deliver so that they go, wow, this change blew my mind. I was scared as hell going into it, but I am so glad I did it.

Tim: Yeah. That’s so powerful. You know, and, and just as well, I, I, I’m gonna give a plug for you Park, but one of the, the things that we found of incredible value, Is that, uh, even on your online courses, once you go through that, and I think it’s each course is what, an hour?

Park: Yeah, if, if that, and I’ve got a new one I’ll tell you about here in just a second, but go ahead. But yeah, I try to keep ’em under an hour.

Tim: Yeah. So in, in an hour’s time, you’re gonna walk out with something of value that you could utilize to help. Craft your message and to help people to take action, that is gonna put them in a much better position.

Park: Yeah, and, and again, it starts with this basic, simple framework And, But Therefore, that you can use in everything. And I do have this online course called the ABTs of Agile Communications. And it is just under an hour. It’s three 20 minute modules, 20 minute or less modules where I walk you through how to build the ABTs.

I give you a whole ton of examples in all different kinds of businesses, all different kinds of communications channels. But what I’m doing right now is something new, and I’m not exactly sure when this show airs, but I just launched, uh, the ABTs of Business Storytelling, and it was an answer to people, entrepreneurs, solopreneurs.

Folks like yourself and Olivia, smaller companies that wanted to take, go through one of my mastery courses, but didn’t have the benefit of a large brand paying for it coming in. You know, I, I mentioned, I was just worked with, uh, McCormick, the Spice Company. I had 40 of their sales and marketing people in that session before that.

Technology group up in Whistler. I had 60 people in the room. The Home Depot, Walmart, Canada, Dell, you name it. I’m typically hired by these large organizations that come in and work with their large teams, but in this case, it is meant for yourselves, solopreneurs. Any customers that you may have that wanna get really.

Good at their communications so that they can grow revenue, and it is what the way it’s set up is it’s like a four week deliver practice program, but it’s really, really simple. We start by having them take the one hour session and they immediately learn the ABT. They can start applying it in all their work right there.

Plus they email me their ABT, and then I give them some personal coaching. Then I’ll do a live 90 minute virtual training for the entire cohort. The cohort’s, only 25 people. And we just launched this last week, so we’ve already sold, I think, 10 of those seats. We have 15 left. I wanna keep it small so I can work with everybody.

So then on Thursday, June 1st, I’ll do a 90 minute virtual training. We’ll do a bit deeper dive on the ABT, and then we’ll get a chance to work everybody’s ABTs during that session and they learn from each other. Take a week off while people are working on their ABTs. And on Wednesday. June 7th, I’ll do another Ask Me Anything session where we’ll come in and we’ll do some more ABT building and then that final week is just answering any questions via email.

The thinking here is that anybody can take advantage of this course. They don’t have to belong to a big brand that covers the cost. It’s only 250 bucks and that 250 bucks, Tim and Olivia is absolutely guaranteed. If people get done with this mastery course and don’t feel like it’s worth like 25,000 bucks to ’em, I’ll give ’em their $250 back.

Cause you know how it works. I’ve got testimonials day in and day out of how well this works. So I want to take any fear out of anybody’s minds and say, look, it. Invest 250 bucks. It will revolutionize how you communicate and grow your sales. And if you’re not a hundred percent pleased, I’ll give you all your money back and you get to keep all the wisdom you’re learning so they can learn all about [email protected], they go to the website, there’ll be a quick little popup there.

Click on that and it’ll explain what the whole course is about, but it’s underway now. So that people are taking that online course, and then we’ll kick in and do that training on June 1st and again June 7th. And even if they get a late start on it, they can do one of those virtual trainings first and then do the online course as well.

So if they feel like they’ve missed this boat, they haven’t. It’s just we only have about 15 seats left for anyone that’s interested in it.

Tim: Very good, and I would say well worth it. So if anybody’s out there, jump on it.

Park: Well, thank you.

Olivia: Do you have anything else you wanna touch on Park before we, um, close out?

Park: Well, you know, number one, I wanna thank you both for having me here and in your world, the financial world. It can be extraordinarily stressful for the folks like me that don’t understand your world inside and out. You know, a lot of business people, a lot of your viewers and listeners here are really adept at at their businesses, and they probably made a lot of money in it, but a lot of time we don’t know what to do with it.

All right, well, should I put it in that 401k or should I put it over here? I know when I was running my agency, we got to be about 20 people, which was a lot for me. And we had quite a lot of, you know, I mean, we had $125,000 a month payroll that I had to meet, and I always stockpile a lot of cash. I was raised by a, uh, uh, a father who came out of the Depression Era in North Dakota.

And you know, of course his business advices, cashflow advice was make more than you spend, son. And so I would stockpile cash in case that rainy day came that I could still write checks to people and whatever. And I would have no end of financial people say if Park, you have $400,000 of cash, right?

They’re not working for you, you should put it in these different instruments. And I was fearful to do that because I was raised with this Depression Era. Thinking of don’t trust the banks, you know, I mean, keep that money there, divide it up and make sure that you have access to that cash. Now, I think in hindsight, that was probably not the best move.

It was a safe move for me. Extraordinarily conservative move for me. But what I’ve learned a lot since then is that um, you know, there are a lot better ways to find that cash fluency to understand how can I really put this wealth in this cash flow to work for me? And I, I know that that’s the great work that you were all doing.

Cause I had a chance to peek under the hood when I was working with you all on your brand story work. So keep up the great work and I’ll be curious to hear how your storytelling helps people overcome. That big fear of change. This is what I’ve been indoctrinated into the, you know, industrial financial complex.

You’re saying, I can have more authority and autonomy over my cash. That scares me. Shouldn’t I trust all these good people over here, or you? And that, and that’s the story tension you deal with day in and day out. Right?

Tim: Exactly. And, and I like the, the wording there, tension cause it is definitely tension And uh, the idea of being in control for a lot of folks is probably scary. And I think that, that that’s behind, you know, a lot behind the psychology of maybe some folks who don’t move forward.

Park: I read something Tim the other day, that somebody equated fear is nothing more than ignorance about a problem and, and he wasn’t even being like calling people ignorant. They’re just saying if you’re really fearful about something, it just simply means you haven’t done your homework. You don’t completely understand whatever this scenario is you are in.

And so this fear wells up inside of you because you just simply haven’t done your homework. And I think maybe that comes to play quite a bit in a line of work you’re in.

Tim: Oh yeah, it does. And, and you know, another acronym for fear is, um, Fake Emotions Appearing Real.

Park: Hmm. Yeah. Isn’t that the truth?

Tim: Yeah, well Park, I can’t tell you how much we’ve enjoyed this. I, I can’t believe, you know, 45 minutes has gone by so quickly, but, uh, I can’t tell you how much we appreciate you appearing on our show and sharing your journey and putting people hopefully in a position they might take you up on your, uh, your upcoming, uh, help me with this again Park.

Park: I called it a mastery course because in those three to four weeks, you’re gonna be able to master this ABT and use it in all of your communication.

Tim: Absolutely. And uh, for $250 you don’t have anything to lose. It’s fully guaranteed. Uh, it is definitely a bargain. Uh, so Park, thanks so much. Thanks so much for appearing on our show. We appreciate your time.

Olivia: Thanks, Park.

Compound Interest vs Simple Interest: The Key Differences

Sometimes money concepts could feel complex, especially compound interest versus simple interest, and how they impact your life insurance policies. Interest is a very complex topic, the further you dig into it, the more complex it gets.

Every once in a while, we’ll hear that life insurance policy loans are calculated on a simple interest basis, and that’s not exactly the case. Let’s take a step back and look into the difference between compounded interest and simple interest.

Compound interest is where you calculate interest on your principal balance, plus the interest. Simple interest is interest that is calculated only on the principal balance. 

An example of simple interest would be a $10,000 deposit into a CD and it’s earning 4% interest. If it was calculated on a simple interest basis, you would receive $400 per year for the duration of the CD. Looking at this, we’d have a $10,000 balance, and the interest would only be calculated on that balance. Within those three years, we would only earn 1200 dollars worth of interest.

Now, when you compound interest, you’re earning interest on your principal, plus the interest that you earned. At the end of that three-year period, you actually earn an additional $48 and change because you’ve been earning interest on your interest.

But let’s translate it into how it affects our policy loans and paying back those policy loans, and how interest is calculated over the policy year.

Most life insurance companies calculate the loan interest due in advance. Basically what that means is you will be charged interest at the time of the loan if your policy anniversary date was today and you took a $10,000 loan and the interest rate for borrowing was 5%, your loan balance would be $10,500 because they charge you the interest in advance.

Another caveat with life insurance policy loans is, that as you make loan repayments, those repayments go towards reducing the principal of the loan, not towards the interest being charged on the loan. That’s why in many cases at the end of your policy year, you’ll get a bill for loan interest that may be due whether or not you’ve been paying on that loan all throughout the policy year.

Now you do have the option as to whether or not you want to repay that loan interest. If you don’t, it will accrue onto the loan balance and become part of that principal after your next policy anniversary. If we step back, this makes sense, you are actually in control of the repayment process. The insurance company charges the interest. The decision as to when and how you pay that interest is completely up to you.

Let’s look at an example of what this would look like.

Let’s say you borrowed $1,170 against your policy cash value via the loan provision, and you wanted to pay it back at the rate of $100.16 over 12 months. Assuming 5% interest is charged. A simple way to figure out the loan repayment is to use an amortization calculator.

With this, we’re able to see that we paid back $1,201.92, which is $31.92 of interest over that year. This could be calculated simply through the amortization calculator. However, the insurance company views things through a different lens. You’re working off of an amortization schedule based on $100.16 payable each month. But the insurance company looks at it from the perspective of saying, okay, we’re going to charge you 5% interest on the principal, $1,170, and you’re going to be paying this loan back at the rate of $100.16.

When you make your last payment. The insurance company will refund you any unused interest, meaning when you pay it back, you might pay it back in 11 months and 22 days and they will refund you the eight days of unused interest.

If you’d like to learn exactly how to put your life insurance policy to work for you, your business, or your family, check out our free web course. The Four Steps to Financial Freedom.

And remember, it’s not how much money you make, it’s how much money you keep that really matters. We’ll see you in the next one.

Taking Advantage of Opportunities through Your Whole Life Insurance Policy

You hear us talk all the time about using life insurance cash values to finance the things of life. Recently, we had a client who used her life insurance policy values in order to finance a home purchase.

Whole life insurance policies have something contractually guaranteed called a policy loan provision. And if you’ve been following our strategy for any amount of time, you know that we often recommend that our clients borrow against the equity or the cash value of their life insurance policies to take care of the things of life, whether it’s an emergency or an opportunity.

Recently, this client called us and said, “Hey, we have an opportunity to purchase some real estate. It’s an insider deal, but I need to close in 21 days. I don’t believe I can go and borrow from a bank and close within 21 days.” Because it was an inside deal, a sale from a family member, they didn’t necessarily need the inspection report because they knew the history of the property. Consequently, the client asked, how much do we have in the policies and how much can we borrow? 

Well, fortunately, there was enough equity in the policies that they could borrow against the cash value and make the closing within the 21-day period.

You see, this is a huge benefit and future of whole life insurance policies. You have a contractual guarantee to access the policy loans via the loan provision. And what this means is that it’s an unstructured loan from the insurance company to the policy owner. The policy owner is able to set up their own loan repayment terms.

The insurance company does charge an interest rate that goes to the insurance company, The client gets to decide how much and how often they make loan repayments to that policy loan.

And you see, having access to money when you need it is a huge benefit. And it’s a benefit that you get with cash value life insurance. Most financial frustrations come from not having access to money when you really want or need something. And the fact of the matter is when you have access to cash, opportunities tend to find you.

Here was a great opportunity for one of our clients to buy a piece of real estate that they loved and cherished. Keep it in the family. But more importantly, it was a great deal because they borrowed against the cash value, there were less in closing costs, they didn’t have to pay any bank fees, and consequently, that will all increase their overall rate of return. Not to mention the fact that they have complete control over the loan terms.

You see, with this process, you are in control of the process rather than being controlled by the process. And that’s not a small distinction. Now, the key to utilizing this process is to be an honest banker. If you were to go the traditional route and pay the bank X amount of money for X amount of years, whatever the amortization schedule stated, you want to do the same thing with your policy.

And you may be wondering why. Well, there’s a few reasons.

The first is loan interest. The quicker you pay off that loan balance, the less interest that’s going to be transferred to the insurance company as lost opportunity cost. The second reason you want to pay that loan back as quickly as possible is because you want to be able to be in a position to take advantage of the next opportunity. If you’ve borrowed out all of the equity against your policy, you have less equity available for the next opportunity. It’s a concept called inventory turnover. When you’re in control of your cash, you want to turn it over as quickly as possible. Meaning borrow it, pay it back, borrow it, pay it back. The more you turn it over, the greater the profits. And again, when you have access to capital, opportunities will find you.

With a mutually owned life insurance company, you’re entitled to non-guaranteed dividends. Meaning the profits of the life insurance company that come from, let’s say, policy loan interest, could be credited towards your policy in the form of non-guaranteed dividends but keep this in mind.

Once the dividend is declared by the insurance company, it is guaranteed. And once it’s paid to you, it could never reduce in value. The only non-guaranteed dividends are the ones that haven’t been declared yet.

So let’s take a look at what happened here.

We had a client who had an opportunity to make a great investment, and they had equity or cash value in their life insurance policy that they could access at their discretion. But they needed to close within a very short window, 21 days. Therefore, they borrowed against the cash value of their policy, reduced their closing costs, made the closing, made the investment, and now they’re in the process of paying back that loan. You see, liquidity use and control should not be something that’s taken for granted.

If you’d like to get started with building a cash-value life insurance policy designed for cash accumulation, schedule your free strategy session today. If you’d like to learn more about exactly how this process works, check out our webinar called “The Four Steps to Financial Freedom” which goes into detail about this exact process.

And remember, it’s not how much money you make. It’s how much money you keep that really matters.

Should I Own a Whole Life Policy Individually or Through My Business?

When setting up a life insurance policy designed for cash accumulation, a question that often comes up is, “Should I have my person own the policy or should I have my business on the policy?”

Today we’re going to talk about the pros and cons of each.

Before we get started, let’s address the elephant in the room. Should your premiums be paid with before tax dollars or after tax dollars? Basically, the question of, “Can I run the premiums through my business and take a tax deduction for it?” The answer is a big NO.

You cannot get a tax deduction for paying life insurance and understand why. Life insurance is not an expense. It’s an asset. You can’t expense an asset. And, if you do, you’re paying tax on the harvest instead of the seed.

You see, the premiums are the seed, the small amount that you’re paying today, and the harvest is the life insurance death benefit. And the last thing we want to do is expose several thousands or hundreds of thousands or millions of dollars to taxes in the long run.

You see, one of the great advantages of owning life insurance is you could put in pennies, the premium, and get back dollars, the death benefit. That’s called leverage. And why would you want to counteract that leverage by having the dollars taxed? It doesn’t make sense.

Now that we got that out of the way, the question becomes, should you have the person on the policy or should you have the business on the policy?

The short answer is, either is fine and each situation is different. But, keep this in mind, whether or not your business should own the policy really comes down to what type of business entity are you? Are you a sole proprietorship? Are you an LLC, a partnership, a sub S corporation, or a C Corporation? The answer to that question, what type of business entity do you own, will dictate who should own the policy.

Now, in most cases, having the individual own the policy can accomplish what you want to accomplish when you’re capitalizing a whole life insurance policy for cash accumulation to help capitalize your business. But then again, there’s the question of what’s the purpose of the insurance? Is it for a stock redemption? Where the business is going to redeem a deceased shareholder’s equity in their business, or is it a cross purchase, or is it for key person reasons? There’s a variety of reasons why a business would want to get or own life insurance on one of its employees. 

However, in most cases where the business owner wants to take loans from the policy and infuse that cash into their business using the policy loan provision. Even if the individual owns it, you could just add one extra step and it allows that individual to own and control that cash value rather than the entity.

Another question we often get is, is there any tax benefits to the business owning the policy versus the individual owning the policy? And to that, the answer is no. You see, there are no tax benefits that go to the business, if the business owns the policy. If the business does own the policy and the business is the beneficiary of the policy, that means the death benefit is paid to the business and that goes tax free from the insurance company to the business. But now you got an issue where the death benefit, the dollars, are tied up in the business. There’s only two ways you can get the money out of the business. One is to expense it, meaning pay expenses. And the second is to salary it, to pay somebody’s salary. Either way, they’re taxable events.

And the bigger question often becomes, who should be paying that premium? And to that, we see that often the business account has more cash flow running through it. And as long as the individual is owner of that entity, the business is able to make those premium payments and expense it to the individual.

So basically what that would look like is the business entity is going to pay the insurance company and then the business entity is going to bonus out that premium amount to the individual so it gets taxed. So, ultimately, the business paid the premium and was able to deduct it as salary to the executive or the owner. That’s all kosher from a tax perspective. The individual paid the premium but he didn’t have to write the check, he just paid the tax on the premium.

Now, let’s not forget about the tax benefits of whole life insurance policies in general. Although there are no added benefits for the business by the business owning the policy. There certainly are benefits associated for tax reasons with whole life insurance policy designed for cash accumulation.

First of all, we have tax deferred growth within the policy. After we pay tax on that premium, we’re able to grow that asset in a tax deferred environment. We also have tax favored access to policy loans on a guaranteed basis. We have tax favored benefits in retirement with access to the cash value, and then we have a tax free death benefit paid out to our named beneficiary outside of probate.

On top of all of that, you have additional tax benefits if you’re using the cash value to supplement your retirement income. If it’s done properly, you can avoid state income tax, federal income tax, Social Security offset tax, no increase in your Medicare premium. The death benefits pass outside of probate and in most states pass outside of state inheritance or estate taxes. And the death benefit, again passes tax free to the beneficiary.

If you’d like to learn more on exactly how to use a whole life insurance policy designed for cash accumulation for your individual or business situation, schedule your free strategy session today and download our free business owners guide.

And remember, it’s not how much money you make. It’s how much money  you keep that really matters.

Stabilizing Your Portfolio Using Whole Life Insurance

If you have an investment portfolio, chances are you’ve heard of a 60/40 split. 60% equities with 40% bonds and you’ll be safe. However, do you realize that the 60/40 split recently had the worst year ever because of the inverse relationship between interest rates and bond prices?

With the rising interest rates in the market, prior to last year, bond investments had a run like no other. For 40 years, bond interest rates came down, which means the prices went up. It didn’t matter. When you got in on the bond train, you made money. Those days are over. The reason this happened is because interest rates, again, steadily came down. That’s probably not going to happen for a long time. 

We all know that interest rates are on the rise. They’ve been on the rise for a while. And they’re going to continue to go up until inflation gets under control. With a small interest rate increase last year, the 60/40 portfolio split had its worst year ever. That’s not even taking into account the rise in interest rates since January 1st of this year.

Now, the point of the 60/40 split in the portfolio is to have some riskier investments and bonds to balance it out with some more stability. However, what happened last year was we had volatility in the riskier investments, as well as volatility due to the interest rate rises in the bond market.

So this bears the question, if bonds aren’t stable anymore, and we’re adding them to the portfolio for stability, what do we use to replace the bonds to add stability and keep our money safe?

Most investment managers talk about diversified portfolios, but how do we diversify our portfolio in a way that introduces stability to our portfolio? One way may be with a specially designed whole life insurance policy designed for cash accumulation and you may be wondering, what does whole life insurance have to do with investments?

Whole life insurance is a terrible “investment.” And that, in fact, is true because typical investments inherently have risk. But with a whole life insurance policy, it’s actuarially designed to get better and better, year over year. The fact of the matter is that whole life insurance is uniquely positioned to take advantage of increasing interest rates -which will work out in your favor.

You see when interest rates rise, the insurance company doesn’t have to sell the bond. They’re going to hold the bond to maturity. They can utilize the bonds that are maturing to reinvest into higher interest-rate bonds, or they can utilize those bonds to pay expenses. So it’s an old money, new money type phenomenon.

But the point is, because the insurance company has that option, they don’t have to sell the bonds before maturity, and therefore, realize a loss. In essence, what you’re doing is you’re giving the interest rate risk to the insurance company (instead of taking on the risk yourself -as in typical stock investments) which is uniquely positioned to accept that risk because they don’t have to sell the bonds.

Here’s the long and the short of it.

In rising interest rate environments, the insurance company is able to take on that bond interest rate risk and come out better on the other side. You’re able to transfer that risk to the insurance company. 

But what happens in low-interest rate environments?

Well, whole life insurance policies designed for cash accumulation are a great way to warehouse your wealth due to their many benefits. We have tax-deferred growth within the policy. We have an actuarially designed policy that’s guaranteed to get better and better every year. We have dividends that, once they’re credited, can never go away. We also have tax-free access to the policy cash values via the policy loan provisions. And then at the death of the insured, we have the opportunity to recapture all of the costs associated with the death benefit costs, as well as any loan interest that you paid throughout your life. You have the opportunity to recapture that and keep it within your family at the insured’s death. 

You give the insurance company the interest rate risk. You give the insurance company the portfolio risk, And you give the insurance company the opportunity cost risk. They’re accepting all the risk because they’re uniquely positioned to accept that. And it adds stability to your portfolio, plus, you get a death benefit.

If you’d like to learn more about this positioning, schedule your FREE strategy session with us.

Remember, it’s not how much money you make. it’s how much money you keep that really matters.

Cracking the Code to Properly Save for College

Have you ever wondered how people afford sending their children to college? Sometimes the first child is manageable, the second is tight. And by the third or fourth child, it’s downright impossible. Today, we’re going to talk about how to set yourself up financially to send your children to college and afford that college tuition. 

The cost of college education has been rising at a rate that is significantly higher than the rate of inflation. Basically, that means that what it’s going to cost you to send your children to college is growing much faster than the income that you’re earning. But here’s the deal. If your income grows fast, that factors against you when you’re filling out the FAFSA, the Free Application for Federal Student Aid.

We call inflation the stealth tax because we don’t see it on our tax returns, but it affects each and every single one of us. When it comes to the cost of college, not every family is going to pay the same amount of tuition for the exact same school. You see, it’s calculated based on four factors: parent’s income, parent’s assets, children’s income and children’s assets. So when it comes time to send your children to college, you want to make sure you keep those numbers looking as low as possible.

But the question becomes, how exactly do you do that? How do you set your family up in a position so that you’re paying the lowest legal amount you have to your to send your children to college so that you could get out ahead in the long run?

What you’re trying to do is maximize the amount of federal aid that you receive. And if you do that in so doing, you’re making your money more efficient. What we’re trying to do here is show you how to send your children to college with minimal impact on your ability to save for your future and with minimal impact on your current lifestyle.

But here’s the issue. Traditional methods of paying for college and saving for college are going to leave you pinched. Here’s a secret, 529 savings accounts count against you when it comes to federal aid application. So by doing the right thing and saving for your children to go to college because that’s a major capital expenditure, you’re actually decreasing the amount of aid that your family’s going to qualify for because you did the right thing to save for college. 

If it seems like you’re damned if you do and damned if you don’t. I got news for you. That’s the way they set it up. You see, everything that served you well financially up until the point your children are applying for federal aid, will work against you going forward after the application for federal student aid. 

No parent should have to choose between sending their child to their dream school and funding their own retirement. But unfortunately, that’s what it comes down to a lot of times in these college funding situations. Because you know what wasn’t factored into the FAFSA calculation? How much money parents are paying towards their own debt on a monthly basis. And clearly the amount of debt you have is going to impact not only your lifestyle, but your ability to pay for your child to go to college, especially if you plan on doing so without derailing your own retirement. There’s only so much cash flow to go around.

If you have a lot of debt payments, there’s only so much leftover at the end of the month. What happens is a lot of parents are forced to decrease their retirement savings at the time they’re sending their children to college so that they’re able to finance the cost of college tuition.

Here’s the solution.

You really should be looking at ways to make your money more efficient because the more efficient your money becomes, the better prepared you are to take on or tackle this increased expense of sending your child or children to college.

At Tier 1 Capital, we look at things through the lens of control. Are your financial decisions putting you in more control of your cash flow and assets or in less control of your assets? Whoever controls your cash flow controls your life.

No parent wants to stand in the way of their child pursuing their dreams but we see so many times where children have to make a decision between almost bankrupting their parents and pursuing their dreams.

So what are some practical steps you could walk away with and apply?

Number one is to look at where you’re giving up control of your money unknowingly and unnecessary. We call these wealth transfers. The five areas that we focus on are taxes, mortgages, how you’re funding your retirement, how you’re paying for your children’s college, and how you’re making major capital purchases. And let’s face it, isn’t college a major capital purchase?

Number two would be to build in flexibility to your plan. First, you find the inefficiencies, regain control of that cash flow, and then save in an area where you own and control. And the importance of that is the flexibility to send your children to college to pay for vacations, to pay for any expenses that come up, and then eventually also use that money to retire without the restrictions placed on accounts by the government for example.

Remember, it’s not how much money you make, it’s how much money  you keep that really matters.

The Inverse Relationship Risk between Bonds and Interest Rates

Everyone knows that interest rates are finally on the rise. But what you may not realize is what’s going on under the covers. What’s happening to the bond market as these interest rates rise? Do you realize that there’s an inverse relationship between interest rates and bond prices? Let’s take a deep dive on what this means for you.

Let’s start at the beginning. What the heck is an inverse relationship, and how is there one between interest rates and bond prices? Well, it’s real simple. When the interest rates rise, the value of the bond or the price of the bond goes down. And when interest rates go down, the value or the price of the bond goes up.

Now, in and of itself, it may not mean a whole heck of a lot to the average investor, because if you’re holding the bond to duration or till the end of the bond period, there’s no problem. If you bought a 4% bond and interest rates went up to 5%, you’ll still collect your 4% at maturity. The problem is when you’re either renewing rates or exchanging bonds, that’s where the problem comes into play.

There are three main risks with this inverse relationship. The first is interest rate risk. Interest rate risk really comes into play if you need to sell your bond before maturity. If you need to sell your bond before maturity and interest rates have risen, the value of your bond may have gone down and consequently you’ll receive less than you were supposed to receive. You will lose money.

Risk typically isn’t associated with bonds, as they are considered a safe investment. But as we see here with this inverse relationship and rising interest rates, it can leave you exposed. This could also be a little bit of an issue because bonds are relatively liquid. If it comes down to it and it’s between selling your actual investments, stocks, real estate or mutual funds, it may make more sense to sell your bond, because it’s the most liquid. But the point is this. You have to recognize the fact that bonds are not risk free.

The second issue that could arise between this inverse relationship of interest rates and bonds is opportunity cost. And basically what that means is you might have better opportunities with higher interest rates, meaning that savings accounts, CDs, annuities or newer bonds might have higher interest rates than the existing bonds that you hold, making the value of your bonds worth a little bit less.

Now, the problem arises in this case, when you want to sell your bonds because they have a low interest rate, you can make more money, more interest somewhere else. So let’s get the bonds out of here. We could get a better opportunity somewhere else. But what happens is, we have to sell those bonds. You can’t redeem the bonds before the maturity date, so you have to sell them on the open market. But with that, they have a lower market value. So you could incur double loss in a sense.

Our third and final issue with this inverse relationship, and that is portfolio volatility. Bonds tend to be more stable than other investments, such as stocks and maybe even mutual funds. And consequently, they’re an ideal candidate for diversification of portfolios and risk management.

What this means in plain English is when you have a riskier portfolio full of real estate stocks and mutual funds, oftentimes advisors will incorporate bonds into the portfolio to stabilize and make sure you’re not losing all of your money, or all of your money is not at risk. But here’s the problem. During volatile interest rate environments, when the bond interest rates rise, because of the inverse relationship, the value goes down and that introduces risk to an asset that you may have considered to be less risky.

So, ultimately here’s the point. Fluctuation in bond interest rates can have an adverse effect on your overall portfolio performance.

Is Your Cash Flow Prepared for Student Loan Repayment

The most recent word on the street is that student loan repayments are going to begin again in October of 2023. What does that mean if you’ve been spending that money instead of saving it or paying toward your student loans all along? Well, basically, it could mean that you’re going to experience a cash flow pinch. Between inflation, high interest rates and now an extra debt payment it’s all about cash flow. Whoever controls it, controls your life. Let’s talk about how to create some cash flow relief and set yourself up for a better financial tomorrow.

They call inflation the stealth tax because it’s not written in the tax code, but it affects each and every single one of us. Some more than others. And recently, the costs of goods and services has been increasing at a faster pace than our income can keep up with.

According to the Federal Reserve, in the last quarter of 2022, consumer debt increased by $6.1 billion, which was one of the highest recorded quarterly increases. And that’s just in three months. This is proof that the cost of living is increasing faster than our income. If you don’t have the cash flow built in, it makes sense just to obligate your future income and put it on the credit card.

However, with student loans coming due and yet got another bill that we’re going to be responsible for, how are we going to fit this into our cash flow? This is why it’s more important than ever to make your money more efficient. You see, there’s only so much revenue coming in. There’s only so much income coming into your household or coming into your business. It doesn’t make sense to be using your money inefficiently and wasting the control that you had over that money. That’s why our process is more important today than it’s ever been, because we show you how to regain control of your money. 

What that looks like is looking at your cash flow for areas of wealth transfer. Areas you’re giving away control of your cash flow unknowingly, meaning you’re not aware of it and unnecessarily, meaning it can be corrected. And once you’re able to identify those wealth transfers, you could start saving in an area where you own and control, so ultimately, your goal could be to regain the finance function and control of that finance function in your life so that you’re less dependent on banks and credit companies for access to capital in the future.

You see conventional wisdom teaches us to save in areas where we don’t control that cash flow. Let’s take a look at a 401k, for example. Yes, we’re saving for retirement, which is admirable. However, when it comes to making these small milestones along the way, we don’t have access to that money and we certainly don’t have access to it without paying taxes, and a penalty in most cases.

You might be saying, “Hey, I’m using my money very efficiently.” Well, this is where the problem is. If you’re implementing conventional wisdom or traditional financial advice, in all probability, your money is inefficient. When we say inefficient, what we mean is your money is not accessible when you need it for whatever you need it. No questions asked. If your money is inefficient and inaccessible, that can create some huge financial problems.

I would argue that most financial struggles come from not having access to money when you really want or need it. Take, for example, when student loans are coming due. Imagine if you had access to money, instead of feeling pinched, you can have some cash flow relief built into your system. Flexibility is key when it comes to these issues.

If you’d like to learn exactly how we help our clients to become more in control of their cash flow and their assets Check our free web course that lays out exactly how we put this process to work, The Four Steps to Financial Freedom.

Remember, it’s not how much money you make, it’s how much money you keep that really matters.

3 Steps to Avoid the Great Resignation within Your Family Business

As a small business owner, you could feel limited in the ways you’re able to attract, retain and reward your key people. Let’s dive into how to use a whole life insurance policy to accomplish just that for your key people, so you’re able to keep them in the game. 

As a small business owner, there’s no way to do it alone. It’s so important that you have a team of key people around you to help build your business. During the Great Resignation, over 48 million employees voluntarily left the workforce. Some left the workforce before they even secured another job. According to Gallup, 48% of all employees, that’s basically half of your employees, is either actively looking or searching for opportunities.

Let’s ask this question. What impact would it have if you lost any of your key people? The cost of replacing a key employee could be as much as 200% of that employee’s salary. Recently, one of our clients had their plant manager retire. It took three people to replace that one individual. In a small business that could be very close knit and the key employees could end up taking on several roles to move that business forward. They’ll do what it takes. 

This all leads us to why it’s so important to incentivize your employees to make them want to stay. How can you incentivize your key people to stay without giving away equity in your business?  Let’s face it, you want to keep the family business in the family. 

There are ways to make your employees feel valued and to take care of them for their future. Because it is a family business, we do care about their well-being as well. So how does the process work? How do you get started with holding these key conversations with your employees?

Well, the first step is to actually have the conversation. We’ll meet with the owner and we’ll meet with the employee separately. We want to find out the key value for the employer. And we also want to find out what is important to the employee. Because let’s face it, if your objective is to incentivize your key person to stay. If the benefit isn’t perceived as valuable to him or her, they’re not staying. 

As a business owner, it’s really important to keep your key people incentivized to stay and help you to grow your business. But the reality is 48%, one out of two of your employees, is looking for another opportunity.

The second step is to design a plan that meets both the employer’s objectives and budget, as well as meets the needs and desires of that key employee. 

The third step is our secret sauce. We’ll meet with you and your financial team to find areas of great potential, where you may be giving up control of your money unknowingly and unnecessarily. This is where we literally find money that’s hidden in plain sight. It’s money that’s baked into your cash flow cake, but you think it’s moving you forward and it actually really isn’t. That’s the money we can use to fund the incentive plan to keep your key employee. 

If you step back from this process, basically what we’re saying is we can provide a benefit to incentivize your key people with having very minimal, or no impact, on your current cash flow. Because we all know that cash flow is the lifeblood to any business. So it’s important that we keep it as steady as possible. 

If you’d like to get started with incentivizing your key employees and building your strategy, schedule your free Strategy Session today. And remember, it’s not how much money you make. It’s how much money you keep that really matters.

4 Key Questions to Ask Before Signing Up for a Whole Life Insurance Policy

So you’re thinking about getting started with a specially designed whole life insurance policy designed for cash accumulation. Maybe you want to expand your business or protect your family, or you want to get started with the infinite banking concept. Today, let’s dive into the four questions you need to ask before you sign the final policy papers.

Let’s get started with question number one. Do you like the agent? This agent is going to be with you for the life of the policy, and it’s important that you have a good working relationship with this person before you sign the contract. And that’s why it’s important to have a key conversation with your agent to make sure the agent understands exactly what your goals and objectives are. If not, you may end up with a policy that doesn’t meet your needs.

Number two is you need to answer the question within yourself How do you plan on using the policy? And does your policy meet your needs? With most life insurance policies, you’re going to be building cash accumulation, but you want to make sure upfront that you know how your policy is going to perform over time.

For example, with monthly contributions to your policy premium. It’ll take some time for your policy to grow and accumulate a cash value. So with that, it will take a little bit more time before you have enough cash value to loan against that policy cash and go out and achieve your financial goals. That’s why it’s important that the agent understands exactly what your needs and objectives are to make sure that the policy fits your needs.

In most policies that are designed for this cash value accumulation or the infinite banking policy, you could expect about 50% of the premium contributions to be available for policy loan within that first policy year.

Number three is to look at your contract and make sure it’s not a MEC or a modified endowment contract. Modified endowment refers to a contract status that the insurance company must perform on an annual basis. Basically, the insurance company just needs to make sure that it is performing like a life insurance contract versus an investment.

Number four is to confirm you’re with the right type of company. You want to make sure your company is mutually owned, dividend paying and non-direct recognition. Mutually owned means that the policy owners are owners of the company, not stockholders.  Dividend paying is important because the policy owners are the owners of the company, they’re entitled to dividends if the insurance company makes a profit that year. And non-direct recognition, meaning that the policy performs exactly the same way, whether or not a policy loan is taken. 

It’s really important that you have the answer to all three of those questions when choosing a life insurance company, because some mutual companies pay dividends but they are direct recognition, meaning that they’ll give you a lower dividend if you borrow. And the point is this: if you intend on borrowing, you shouldn’t be penalized for borrowing.

If you’re looking to get started with the Infinite Banking Concept check out our latest YouTube video. We do a deep dive on the four questions that you need answered before you place that policy in force. Once you have satisfactory answers to all of these questions, you’re going to be in a great position to move forward with your whole life insurance policy designed for cash accumulation.

If you’d like to learn more about how to get started with the infinite banking concept or getting started with a cash value life insurance policy designed for accumulation, hop on our calendar for a free strategy session.

And remember, it’s not how much money you make. It’s how much money you keep that really matters.