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Life Insurance Dividends vs. Investment Dividends: What’s the Smarter Choice for Growing Your Wealth?

When discussing whole life insurance with a mutually owned life insurance company, dividends naturally come into the conversation. You might wonder, what exactly is a dividend and how do life insurance dividends differ from investment dividends? That’s exactly what we are going to cover today.

There are some key distinctions between life insurance dividends and investment dividends. An investment dividend is a distribution of profits from a company to its shareholders, and these dividends are taxable. However, life insurance dividends are a return of overpaid premiums and are not taxable. This is a crucial distinction.

One reason we always talk about paying income tax on the premiums is that you never want to take a deduction for your life insurance premium, even if it is for business purposes. Doing so could lead to your death benefit—the large sum of money that goes to the beneficiary—becoming taxable. It’s vital to ensure that everything is aligned properly to get the most out of life insurance.

The premiums you pay are small contributions towards the huge death benefit. If the premiums are deductible, the death benefit becomes taxable, and you don’t want that. By paying premiums with after-tax dollars, you maintain the tax advantages of the death benefit. Dividends, on the other hand, are used to enhance your policy’s cash value growth. Although dividends are technically a refund of overpaid premiums, they can be seen as profits because if you have a policy with a mutual insurance company, you essentially become an owner of the company.

With whole life insurance, policies are designed by actuaries, who typically overestimate the amount needed, which is why dividends are built into the policy. When you see an illustration, you’ll notice two sets of numbers—the guaranteed figures representing the worst-case scenario (if no dividends were ever paid) and another set based on the current dividend rate, showing how the policy could perform if dividends are paid consistently over time.

Reinvesting dividends into the policy by purchasing paid-up additions is a smart strategy. This allows you to earn interest on the dividends, which in turn increases future dividends. Over time, this compounding effect builds long-term value, with dividends being smaller in the early years and much larger in the later years.

Life insurance companies make two promises with a whole life policy. First, to pay out the death benefit when the insured dies, and second, to have the cash value equal to the death benefit by the policy’s maturity, which is usually age 121. As the policy matures, the cash value grows exponentially. If you add dividends into the mix, this process accelerates, making the policy more efficient over time.

One key thing to remember is that dividends are not guaranteed. When you get your policy illustration, the figures showing the dividends are based on the current rate, which is subject to change. However, once a dividend is earned, it’s yours—there is no risk of losing that dividend or the associated cash value, even if no future dividends are paid.

Although dividends aren’t guaranteed, many mutual insurance companies have been paying dividends for over 125 consecutive years, even through significant events like world wars, depressions, and economic downturns. While the dividend projections may not always be met, companies generally do pay something.

As the owner of the policy, you have the contractual right to choose how your dividends are allocated. You can use them to reduce premiums, take them as cash, or purchase paid-up additions.

If you’d like to learn more about how to apply this process to your business, family, or personal finances, visit our website at tier1capital.com. We’d love to speak with you in a free strategy session.

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

Essential Social Security Strategies: Key Decisions You Can’t Afford to Ignore for Maximizing Retirement Benefits

Episode Summary

In this episode of Control Your Cash, hosts Olivia Kirk and Tim Yurek are joined by Bill Rainaldi, a Senior Financial Consultant at Security Mutual Life Insurance Company of New York and an expert in Social Security planning. Bill dives deep into the complexities of Social Security, including spousal benefits, optimal claiming ages, and common mistakes people make when deciding when to start their benefits. He also explores how life insurance can play a pivotal role in long-term financial planning, especially for families with children and retirees. Throughout the conversation, the hosts and Bill emphasize the importance of consulting with knowledgeable financial professionals to navigate these decisions and avoid costly errors. Whether you’re nearing retirement or looking for ways to maximize your Social Security and insurance benefits, this episode offers essential insights.

Key Takeaways

  • Understanding when and how to claim Social Security can significantly impact spousal benefits and long-term income security.
  • Life insurance isn’t just for young families; it’s also a critical asset in retirement planning, especially for estate protection and tax-free inheritance.
  • Social Security offices often provide limited information, so asking the right questions and consulting with a financial professional is essential.
  • Early financial planning with the right professional can help avoid common mistakes that may lead to lost benefits or higher taxes​.

About the Guest

William F. Rainaldi, CFP®
Author, Social Security Specialist, and Senior Financial Services Consultant at Security Mutual Life Insurance Company of New York. Host of the “SML Planning Minute” podcast, where he shares expert insights on financial planning and retirement strategies.

Transcript

Olivia: Hello and welcome to the Control Your Cash podcast. I’m your host, Olivia Kirk.

Tim: And I’m Tim Yurek. And we have a special guest today, Bill Rinaldi, who is the Senior Financial Consultant for Security Mutual Life Insurance Company of New York. And Bill is a specialist in Social Security planning. Bill, welcome to the show.

Bill: Thank you, Tim. This is great to be here. You know, uh, you were a guest on my podcast at Security Mutual a few years ago, and it was one of the best perceived podcasts we’ve ever had, so I’m hoping to do the best I can to, to, to match that today. So, we’ll see.

Tim: <laugh> Awesome. Well, I know we have a lot of great information in store for us today. And, and thank you again, Bill, for, for joining us.

Olivia: So, Bill, um, let’s talk about Social Security because it seems to me that Social Security is probably one of the most misunderstood benefits, misunderstood pillars, if you will, of our retirement planning. So if you could talk to us about what are some of the biggest mistakes that people make as it relates to their Social Security claims or their strategies?

Bill: Well, first of all, Tim, I agree a hundred percent with what you said. Um, I have this economic theory, which is that any time you have a government program, uh, that stays around for a long time and becomes very popular, it’s inevitable that at some point it’s gonna get so complicated that nobody understands it. And unfortunately, that’s what’s happened with Social Security. Now, there are a lot of nooks and crannies, a lot of little special things you gotta know, and it is incredibly complicated, but at the same time, it affects everybody. Everybody has a Social Security benefit pretty much, and everybody wants to get the most outta Social Security. So the simple question people ask is, well, when should I claim my benefit? That’s the one thing that people want to know. Now, if you ask me, I think the biggest mistake people make is that they don’t seek professional help when it comes to figuring out what to do.

This is so tricky and so complicated, and there are so many things. For example, there might be children’s benefits. There’s almost always what’s called a survivor benefit in Social Security. Uh, there could be disability benefits that, that have an impact. There’s so much to know that it’s almost impossible for an ordinary person to know everything they need to know about when to claim. Um, the one biggest thing I think people miss is survivor benefits on Social Security. That’s huge. And when you understand that, you might be inclined to collect a little later than you otherwise would. So…

Tim: Yeah, absolutely. So, Bill, when it comes to Social Security, what, in your opinion, is the most important thing that, that someone needs to consider? Right. So there, there are so many moving parts when it comes to Social Security—you know, the benefits, the age, um, the spousal benefits. What, what needs to be focused on when you’re making that, that big decision?

Bill: Well, the age difference between the two spouses is really important. Uh, one of the other things that’s incredibly important is life expectancy. Um, so many people, for example, are inclined to collect their Social Security as early as possible. And usually it’s because they believe—or I shouldn’t say usually—most of the time, a lot of the time, it’s because they believe that it’s not gonna be there in the future. Uh, so, “I’m gonna get mine while I can” seems to be the general philosophy. Well, that’s fine. If you’ve got a life expectancy and you think, you know, you might not make it past age 70, then maybe you would wanna collect at age 62. However, the majority of people seem to be living longer now than they initially expected. And if you’re gonna live into your 80s or perhaps your 90s, you’re better off waiting as long as possible to start the actual collection process.

So that’s a huge one, Olivia. I would also add to that one thing that people miss, and I just mentioned this a few minutes ago about survivor benefits. Survivor benefits are one of the only simple things about Social Security. Okay? If, if you’re married and both spouses, let’s say, live past age 67, then survivor benefits are fairly, uh, easy to understand. But it’s the one thing that people don’t even consider when they’re trying to collect or trying to figure out when to collect. They collect based upon their own life expectancy, and they don’t consider their spouse. Now, let me give you a quick example of how survivor benefits work. Let’s say my benefit is $2,000 and my wife’s benefit is $1,000. Now, she’s three years younger than me, and she’s also female. You know, women tend to live longer than men by about two or three years.

So you factor all that in. But if I collect, that means that if I collected at my age 67, I would get $2,000 a month. If I waited until age 70, I would get an extra benefit because I would get 24% more money or $2,480 a month by waiting until age 70 to start. Uh, now I might think, “Well, I’m probably gonna live to, I don’t know, 75 or something like that. Why would I do that? That doesn’t make any sense ’cause I’ll never make up that difference.” But with a survivor benefit, my wife would take over my benefit because hers is lower. She would take over my benefit if something happens to me. So I might live to 75; she could live to 95. So when I make that claiming decision to start at age 67, it’s probably not gonna just affect me. It’s also going to affect her, and she’s gonna get stuck with that lower benefit if something happens to me. That’s probably the most basic concept I think people miss, Olivia, that, that they need to understand about Social Security.

Olivia: Yeah, that’s, that’s huge, and it’s a huge difference for so long. So I imagine that even comes into effect if, say, you know, you were to die before you started claiming. She would still be able to claim that higher spousal benefit going forward, right?

Bill: Uh, in most cases, yeah. If I were, let’s say I died at age 68 and I wasn’t collecting yet, I would be frozen at age 68. My benefit would be frozen at that point. That’s still gonna be higher than her $1,000. But, uh, you know, so, so yes, but, uh, it’s not gonna be the full age 70 benefit because I didn’t make it to that age.

Olivia: Okay. Yeah. And that’s still gonna be higher than, let’s say, if you started collecting at age 66 or 67, you know? Um, so that makes a, a huge difference. And I imagine that’s one of the biggest mistakes that people make when they’re, they’re processing these claims, um, and starting their Social Security benefits.

Bill: Oh, absolutely. And there are, there are plenty more, but that is, that is the one I see most commonly. So, yeah.

Tim: Bill, does it ever make sense? You know, so, you know, it seems that the, a prudent strategy might be to consider your life expectancy as well as the life expectancy of your spouse when making your claim. With that in mind, does it ever make sense in your opinion, uh, to claim, let’s say, at at age 62? Is there, is there an argument that one spouse or the other should claim at age 62?

Bill: Sure. Well, first of all, if you’re a single person, then you don’t have to deal with the other spouse, right? So under those circumstances, it’s strictly a, a play on your life expectancy. If you’re in bad health and you turn 62 and you’re not working—I’ll talk about that in a minute—but, and if you’re not working, uh, then yeah, you would probably want to collect as early as possible. Uh, now there is another situation for a married couple. Let’s say the, um, the unmarried, the, the, the, uh, the younger spouse is age 62, and, and that spouse has a much lower benefit than the older spouse who’s going to wait until age 70 because that becomes the survivor benefit. You follow? In, in those circumstances, if that older spouse is willing to wait and can afford to wait till age 70, then it doesn’t make that much of a difference when the younger spouse collects.

And if the younger spouse wants to collect at age 62 under those circumstances, that’s fine. The only thing you gotta watch out for is what’s called the earnings test. And the earnings test basically says that if you’re gonna collect your Social Security early, uh, you better not be working, earning a wage and making a lot of money because the, it’s gonna disqualify you from collecting any Social Security benefit. Uh, the earnings test amount in 2024 is, uh, $22,000 in change. And basically what happens is, if you make more, if you as an individual make more than that amount in wages—not interest income, not withdrawals from an IRA or anything like that—but if your wage income is more than $22,000 in change, your Social Security benefit, should you try to collect it, will be reduced $1 for every $2 over that limit. So let’s say you’re still working and you’re making $70,000 a year or something like that, um, you really don’t have a choice. You either have to give up your job or you can’t collect Social Security. Realistically speaking, those are your two choices if you wanna continue working and make that kind of money. So, other than that, yeah, there are, there are definitely some circumstances where it makes sense to collect at 62.

Tim: Now, Bill, let’s say you’re earning $40,000 and the threshold is $22,000. So in that scenario, you’re giving back $1 of benefit for every $2 over the threshold. So roughly it’s $9,000 that you would be giving up. And that’s in that example.

Bill: That’s, that’s correct. And if you have a small personal benefit, remember at that circumstance you’re starting at age 62. So remember I said you get more when you wait till age 70, you get less at 62. Right? So it’s quite possible that that $9,000 could significantly reduce and in some cases even eliminate that Social Security benefit entirely. So yeah, I mean, sometimes if you’re making $40,000, it’s just not worth applying for, uh, that Social Security benefit. And some, some people will, Tim, they’ll, they’ll work part-time or whatever just to get up to that $22,000 threshold and then not go above that threshold. So that happens as well.

Tim: Yeah, I, I’ve seen that quite a bit, but that is probably one of, in my estimation, Bill, just dealing with people on a daily basis and talking about their retirement planning, that is probably one of the most misunderstood aspects of Social Security. The fact that, hey, yeah, you know, I’m still working and I’m gonna, I’m gonna collect at 62 because I don’t think Social Security’s gonna be there and I wanna make sure I’m getting mine. And I understand that philosophy. But then when you explain to them that, hey, you’re not gonna be able to earn more than $22,000, well gee, I make $50,000. Well, now you have this giveback that you have to consider. And people don’t under—you know, they, they, up until that point, they were completely unfamiliar with it. And you know, I, I would explain it to them and then I would suggest that they call the Social Security Administration and just get verification on that. And sure enough, they do and they come back and say, “Okay, now what do I do?”

Bill: Well, yeah, you do have the option to withdraw within 12 months too. And I’ve seen people do that. Um, the problem with withdrawing is that you gotta give ’em back whatever you have already collected. So, but so, it, it, it’s really kind of a hassle to deal with with, uh, with all that. I’ve also seen situations, Tim, where people have, uh, just, you know, you fill out when you, when you apply for Social Security and let’s say you’re age 62, you fill out a form online and you tell ’em you’re not gonna make any money, and you know that’s not true, but you just figure out they’re gonna tell ’em that and that get, and, uh, they’ll never figure it out. Well, guess what, uh, they do talk to the IRS and they do find out what money you’re making. So, uh, that can get into an ugly situation where they’re gonna demand money back from you, uh, with what’s called a demand letter. So you don’t wanna deal with that. You wanna be honest with them and tell them the truth and make an honest decision about whether you should be collecting at 62 or not, or 63 or 64 or 65, you know?

Tim: Right. And, and you know, Bill, that makes sense. I mean, for us to be honest with the government, ’cause they’re always honest with us.

Bill: <laugh> Uhhuh. <affirmative> Sure. Well, understand, Tim, just to follow up on that, I just wanna make—just follow up on what I just said earlier too. The, this is the Social Security Administration. Okay. It is not the IRS. Okay. The Social Security Administration can’t garnish your wages. They can’t send an auditor to your house or anything like that. They don’t have those powers. However, it’s not like they don’t talk to each other, okay. And they don’t find out whatever they need to find out from each other. So just keep that in mind. I think the SSA is actually a little bit more efficiently run than a lot of other government agencies. So.

Tim: Yes, for sure. Um, so, Bill, talk to us about, um, the, you know, we talk about life expectancy planning when we’re making our decisions. Talk to us about where life insurance fits into the equation when making your Social Security claiming strategies.

Bill: Well, sure, there are probably about a, a dozen different situations that I can think of where life insurance can help with the decision. But I’ll give you just one example, uh, of where life insurance can make a huge difference. Go back to that example I gave you before where I’m collecting $2,000 and my wife is collecting $1,000 a month, let’s say. Um, we do the right thing. We, and I don’t collect early, so I’m getting that $2,000 for life. Uh, if something happens to me, the good news for my wife is that she gets a, a bump in her benefit, right? She was collecting $1,000, but now if something happens to me, she goes from $1,000 to $2,000 a month, right? That’s the good news. But there’s bad news too, isn’t there? The bad news is that collectively, the two of us were collecting $3,000 a month as a married couple in our household.

Now, something happens to me, it goes down to $2,000 a month. Uh, you know, what’s gonna happen with the household expenses? I mean, I mean, in my case, there’d be a lot less food in the house, all right? But <laugh>, but we might make it up because <laugh>, we might make it up because, uh, she’s gonna have to pay someone for maintenance on the house, the stuff that, you know, maybe I do around the house. What’s gonna happen with the real estate taxes? Are they gonna go down because I’m not there anymore? No, they’re gonna stay the same, right? Mortgage is gonna stay the same, right? None of that is gonna change, but there’s less income coming in to pay those expenses. And my experience with older people has always been that once you get past a certain age and you’ve been in your house for a while, you wanna stay there for as long as possible.

You’re not in any great hurry to go and, uh, move into assisted living or anything like that. So how do you solve this problem? You have less income and the same expenses. Well, a life insurance policy could create that pool of money. So you could write a, a, a life insurance policy on me, you know, and it wouldn’t have to be that much in terms of with the way life insurance is normally valued, you know, $300 or $400,000 and I would buy that at a younger age. But what if something happens to me? You have that extra money there and that can help, uh, offset those extra expenses, um, after I’m gone. That’s one basic idea.

Olivia: Yeah. And, and so not only to offset those expenses, but to replace the lost Social Security benefit.

Bill: Exactly. Yeah. Yeah. That, that, that’s exactly right. ‘Cause you have a pool of money now that you can draw from as needed. Uh, so, and uh, and it would just, it would just, uh, set my wife’s at ease knowing that, that that’s there, that she’s not gonna have to move out of the house because something happens to me.

Tim: Yeah, and that’s a good point, right? Because most people are under the mistaken idea that I won’t need life insurance after age 65. And the, the fact that there will be an income reduction at the first death because of the loss, Social Security, uh, benefits at the first death. Now, funding for that eventual loss is probably a prudent thing. And therefore keeping your life insurance benefits in effect post age 65 probably makes some sense.

Bill: You know, I, yeah, Tim, it’s interesting ’cause I, I’ve dealt—and I’m sure you’ve found this similar to in your situation—I’ve dealt with hundreds of people who have life insurance and get past a certain age. And I don’t remember ever any one person when they get to that point saying, yeah, I don’t want this life insurance anymore. Uh, ’cause first of all, they probably got it when it was a lot cheaper at a younger age than it is now. And, uh, for some reason, there’s always a use for that life insurance, even once you get past retirement age. So that’s been my experience anyway.

Tim: Yeah, that’s, that’s a great point because people in their 50s and 60s are not looking to get rid of life insurance. They are actually looking to purchase more because they see now—they see the value and the need is probably more pressing, let’s say, you know, their, their runway is much shorter than it was when they were in their 30s and 40s.

Olivia: Yeah, absolutely. And I, I think about like the term policies on, on young couples, um, being put in place, you know, for the benefit of the kids, right? So if one of the, one of the parents dies, they’re gonna need money to raise the kids. Um, and really it’s, it’s true. You do need money to raise the kids, but there’s also the, the longer term planning that also often isn’t considered. Um, and I feel like a lot of times, you know, we have that class of people who, who don’t want to get rid of the life insurance at, at a certain age right after they get older. But then there’s the other ones who are, are looking at their investments being paid for by the life insurance. And I feel like they, they don’t necessarily see the benefit that is life insurance, right? Being able to pay pennies to get those dollars tax free when they die is, is a huge benefit, um, that often is overlooked in this industry, unfortunately, you know, by other advisors.

Bill: Yeah. You know, it’s funny, I, I think of my friend Marty Smith who always likes to say to people, uh, “Well, you know, if you have enough life insurance, then you don’t have to worry about spending down their inheritance and you want to go on a trip around the world. Go ahead.” <laugh> So it certainly has its advantages.

Tim: So, Bill, let’s talk about the, uh, let, let’s call it the, you know, the eight-hundred-pound gorilla in the room, which is, will Social Security be around? What, what’s your take on that? What’s your opinion? Because that’s, you know, everybody’s, everybody talks about that.

Bill: Yeah. How many hours do you have, Tim, to talk about it?

Tim: <laugh> Uh, listen, I, I I, I, I’ve, uh, I’ve looked at this in a good deal of detail and, uh, I just don’t believe that it’s ever—first of all, if you look at the projection, people say it’s gonna disappear or it’s gonna go bankrupt. That’s not quite true. What they say is, if nothing changes between now and the year 2035, benefits will be reduced by about 20%. That’s what they say. It’s never, it is never gonna go to zero because people are always gonna be working and they’re gonna always be collecting Social Security withholding from people’s paychecks. Um, so the, the real question is what’s going to happen between now and 2035? And I, I don’t know, but I I would absolutely be stunned if there’s ever gonna be any reduction in people’s Social Security benefits. I mean, I, I just think there would be rioting in the streets if that ever happened.

Um, so they’re gonna have to fix it somehow. And if you look at what, uh, the two main, uh, the main nominees are to how, on how to fix it, it’s either A, raise full retirement age, or B, increase the withholding taxes in some way. That might mean increasing the percentage or increasing the number of people who actually pay it, increasing the income limit or something like that. Um, so I, I, as I said, I’d be shocked if something, if, if they didn’t come up with a solution like that, one of those two things. Now it’s not gonna happen tomorrow. Okay. And I don’t think anything’s gonna happen for the next three or four years because people forget this, this happened once before, back in the early 80s, in 1983, the Social Security Trust Fund got down almost to zero, and they were within a year of, of bankrupting that trust fund. Uh, and what they did was a combination of things, you know, they raised full retirement age and they increased the withholding tax. Now that was supposed to last 75 years. And, uh, <laugh> it looks like we’re gonna be a little short on that, so they’re gonna have to do something. But, uh, I would be, I would be, uh, really surprised if, if they didn’t do anything to fix this at, at some point.

Tim: Well, I, I think that’s a great point, Bill, and thanks for addressing that. ‘Cause a lot of people don’t want to touch that question. Uh, so I, I appreciate you going out on the limb and answering that question, but I, I think another thing that they’ll probably do is they’ll just print more money to pay for the benefits and, you know, further kicking the can down the road, so to speak.

Bill: Well, yeah, I mean, technically, Tim, in order to do that right now, they, they legally can’t do it, which means they just have to change the law and then they could do it. So, you know, <laugh> eventually, eventually they, they, they certainly could do that. A, another possibility, and I was thinking about this too—you remember about, I don’t know how long ago, it was maybe 15, 20 years ago—they got in a situation, the government did, where they decided there were too many military bases in this country, and they had to close some of these bases, and they tried to—Congress tried to work it out themselves, and that became impossible because every congressman who had a base in their district would not allow a closure. So what they ended up doing was appointing this blue ribbon commission to do the dirty work, and that commission decided which bases were going to close, uh, without offending the members of Congress. You know, something like that could conceivably happen in the future, I think, with Social Security as well. So, we’ll see. I don’t know. It, it, it’s just a guess, but something, something’s gotta happen. I think so.

Tim: Yeah, for sure. Bill, is there any other questions you think we should be asking?

Bill: Uh, no, I, I think we, we’ve got a good idea. I mean, the only other thing I would say is understand, uh, one of the reasons that you need professional help when you decide when to collect Social Security is that Social Security’s not gonna tell you about certain things. For example, you might have a child under the age of 18. Social Security is not gonna tell you that, hey, you can collect a, a benefit for this child. Or you have an adult child who’s disabled—hey, you can collect a benefit for this child. So there are so many other extra benefits that you might not be aware of that you really do need to get, get a pro, uh, to help you with this, this sort of thing. So it’s not as easy as it first seems.

Olivia: Yeah, it’s funny. I have some friends who work in the Social Security field, like at, at the offices and they’re in the call center, and when they go through the training, they just learn how to search for the questions on the website and then read the webpage to the people. So if you don’t know the right questions to ask, you’re not going to get the right answers, because half the time they don’t even know the follow-up questions that you should be asking, and they’re not going to give out that information because they’re just going and searching and reading you what they have off the page these days.

Bill: Oh, yeah. And in fact, the, uh, their manual, their, their training manual, Social Security Administration’s training manual is online. It’s thousands of pages long, and it, it’s very difficult. I, I don’t lie, I have to look at it sometimes. I don’t like using it because it, it, it, it ends up confusing a lot of situations. But, uh, uh, yeah, that, that’s exactly right. It, you, you do need to know to have someone who knows the ins and outs of the system either way.

Tim: Now, Bill, I know in the past you have helped me and hundreds of other agents with helping their clients make the best decisions for them, and I think it’s important to understand, like, what special software or programs do you have to help our clients make the best decisions possible for them?

Bill: Well, we use a program called SS Analyzer, uh, and, uh, I, I’ve, I know you’ve seen that, Tim, and you know what it, what it looks like. It, um, it addresses all the issues or, uh, every issue that, that pretty much anybody would, would come across when it comes to Social Security, like the children, like I talked before, um, there’s another issue for state and local government employees where their Social Security benefit might get reduced if they’re getting a pension from that state or, or government agency or a local government agency. Uh, it also addresses that. Uh, but as I said at the beginning, the, the basic question everybody wants to get an answer to is, when should I collect? And that seems to, uh, and this, this program does a great job of, uh, addressing when you should collect, when you should start, and, uh, uh, I’m happy to share that with you, Tim, and other people. So.

Tim: Yeah, absolutely. And, um, it is important to have financial professionals because as so many things in this financial world go, you don’t know what you need to know until, until it’s too late in a lot of cases. So taking those steps, um, preemptively, um, consulting with a professional who, you know, has more knowledge and also has more resources of knowledge, right? Because not everyone knows all the answers, but they should know where to get the answers and be able to communicate that to you in, in a clear and concise way.

Bill: Yeah, and Olivia, I would add something to that, which is, if you make a mistake, it’s gonna cost you money every month for the rest of your life, so you gotta get it right.

Olivia: Yeah, absolutely.

Tim: Yeah. And you definitely don’t wanna leave any money on the table, and that, I think, is ultimately what everybody is trying to accomplish, not wanting to leave any more, any money on the table from our government benefit.

Bill: Well, especially when you look at how much money you put in in the first place, right?

Olivia: Yeah, exactly. That’s a great point, Bill. Well, Bill, it’s only a matter of time before this podcast goes viral and, and certainly this episode. And, uh, I want to thank you for joining us today. We really enjoyed your company, and hopefully you had a good time as well.

Bill: Well, I always enjoyed talking to both of you, as you know. So this has, this has been great. And, uh, I hope people get some benefit out of what we’re talking about today. That’s the main thing.

Outro: Are you a business owner, tired of feeling like your finances are out of control? Do you wish you could minimize risk and maximize returns without sacrificing the growth of your business? Then Tier One Capital is the solution for you. Tier One Capital is a company that specializes in helping business owners take control of their finances and achieve financial success. Their mission is to empower their clients and enable them to make informed financial decisions that benefit their business. At Tier One Capital, they understand that financial institutions and the government can hinder your business’s growth, which is why they strive to identify areas where you may be unknowingly and unnecessarily giving up control. They provide expert guidance to help you reduce tax burdens, increase returns, and build wealth in a tax-efficient manner. So if you are looking to take your business’s finances to the next level, visit TierOneCapital.com today and start your journey to financial success.

Mastering Cash Flow Management: How Small Business Owners Can Regain Control and Increase Profits

When you own your own business, it’s common to want to expand that business as quickly as possible. Business owners often reinvest their profits into inventory or expanding the business in any way possible because hypothetically, the more money they put in, the more they can get out. It contributes to financial freedom. Today, we’re discussing how to make that cash flow as efficient as possible because, ultimately, every purchase we make is financed.

Keep this in mind: cash flow is the lifeblood of any business. According to our research, 61% of small business owners around the world struggle with chronic or cyclical cash flow issues. What we’ve found is that most of these cash flow issues are self-inflicted. It’s how business owners manage their money that holds them back.

Here’s the key: we finance everything we buy, whether it’s inventory, equipment, or even employees. We’re either going to borrow money and pay interest, or we’ll pay cash and give up interest that we could have earned.

Most people try to avoid paying interest because they see it as a loss. However, they often overlook the interest they’re giving up by paying cash. This causes a mistake when business owners pay cash for things they could otherwise finance. The same goes for paying off debt too quickly—this practice sacrifices cash flow and control at every turn.

What happens when business owners give away their cash flow by paying off debt or paying cash for things is they eventually find themselves needing to borrow money down the road. Why? Because they gave away their profits and now have no capital reserve to access when necessary.

This leads to what we call the “debt cycle.” Chronic and cyclical cash flow issues arise when businesses give away control of their cash flow, leaving them without a financial safety net when problems arise.

A cash flow issue is simply a symptom, not the root problem. Most people approach it by either reducing expenses or increasing revenue, but both come with costs. For example, reducing marketing expenses can lead to a dip in revenue. However, cash flow issues really stem from not understanding the bigger financing picture.

If businesses manage financing more efficiently, they gain better control over their cash flow. That’s the goal: more control over your cash flow and assets.

In our practice, we examine every financial decision through the lens of control. Does this decision give you more control over your cash flow and assets, or less? The goal is to have as much control as possible because control leads to freedom and opportunity.

When you have options, you can choose to borrow from yourself, from the bank, or pay cash. But it’s critical to make these decisions in the most efficient way possible—where you are in the greatest control of cash flow and assets.

Conventional financing methods send the velocity of your money away from you, your business, and your family. The money flows outward, and you lose control of it. However, with our process, we start taking back control of some of that money’s velocity, keeping it in an entity you own and control. This allows you to leverage and reuse that money in the future.

You’re still making the same purchases and investments in your business, but now you control the process, ensuring that some of the cash flow returns to you. As a result, the next time an opportunity arises, you have a pool of money to draw from, ensuring that your cash flow is constantly circulating back to you.

The key is that you’re still making purchases, but now the money flow comes back to you, putting you in complete control. It’s a huge difference.

If you’d like to learn more about how to apply this process to your business, family, or personal finances, visit our website at tier1capital.com or download our free business owners guide. We’d love to speak with you in a free strategy session.

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

How Whole Life Insurance Builds Wealth, Grows Tax-Free, and Creates a Financial Legacy

When people think about life insurance, they often focus on the death benefit. But whole life insurance, especially designed for cash value accumulation, offers much more. It helps build wealth in the present, grows for the future, and ultimately creates a lasting legacy. One powerful tool in this process is dividends.

Dividends are a portion of the profits that mutually owned life insurance companies return to policyholders. If you own a policy with a mutual insurance company, you are essentially part-owner. The company’s profits come back to you as dividends, which are a return of overpaid premiums and are not taxable. If you reinvest these dividends into paid-up life insurance, your cash value compounds, growing even more over time.

Whole life insurance policies come with two guarantees: a death benefit and cash value that matches the death benefit by the policy’s maturity (usually at age 100 or 121). Insurance companies have to stash away more cash each year, so your policy naturally becomes more efficient, accumulating cash over time. You have access to this growing cash while still alive, a portion of the death benefit that you can use.

For policyholders with a mutual insurance company, dividends are an added advantage. These profits, combined with guaranteed growth, boost your policy’s efficiency. As long as the money stays in the policy, it grows tax-free, and you can access it via policy loans without interrupting the policy’s growth.

Insurance companies generate profits in three areas: mortality savings (fewer policyholders dying than expected), expense savings (overestimating operating costs), and interest earnings (earning more on investments than estimated). All these factors contribute to the dividend pool. Focusing solely on the dividend interest rate can be misleading—it’s just one part of the equation.

Reinvesting dividends creates perfect compounding. Your dividends generate more dividends, fueling continuous growth. You can access the growing cash value for retirement income, investments, or other needs, all while maintaining the policy’s growth. Additionally, your death benefit increases, allowing you to leave a larger legacy for your family, charity, or business, all tax-free.

Whole life insurance is a flexible, powerful tool for building wealth and securing your future. It grows a pool of cash you can use and leaves a tax-free legacy for your loved ones. If you’d like to explore how this can work for you, feel free to schedule a free strategy session at Tier 1 Capital. We’d be happy to help you take control of your financial future.

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

The Circle of Wealth: How To Reclaim Your Finances Without Taking Risks

Episode Summary

In this episode, hosts Olivia Kirk and Tim Yurek dive into the intricacies of personal financial control, focusing on how individuals can make their money work more efficiently without increasing risk. They explore the concept of a “Circle of Wealth,” breaking it into three parts: accumulated money, lifestyle money, and transferred money—emphasizing how most people unknowingly lose wealth through inefficiencies such as interest on debt, taxes, and fees. Tim and Olivia stress that true financial freedom comes not from taking on more risk for higher returns, but from eliminating wealth transfers and putting individuals in full control of their cash flow. The episode also offers actionable insights on how to reduce expenses without sacrificing lifestyle, drawing an analogy to improving one’s “golf swing” instead of buying better “golf clubs” to illustrate their unique financial approach.

Key Takeaways

  1. Focus on reducing wealth transfers like taxes, interest on debt, and inefficiencies to help grow your circle of wealth without added risk.
  2. Increasing your rate of return is not always the most effective way to build wealth, especially if it involves taking on more risk.
  3. Increasing savings without reducing lifestyle is possible by focusing on reducing expenses rather than chasing higher investment returns. 
  4. Mastering the process of how you use financial products is more important than the products themselves to help achieve financial success.

Transcript

Tim: When it comes to finances, no one wakes up in the morning and says, “Man, how can I mess up my financial situation today?” On the contrary, we’re all doing what we think is best for our specific situation, given our specific resources. But the truth of the matter is that a lot of times, conventional wisdom—whether that be from the media, your family members, or mentors—a lot of the advice that we hear is actually giving away control of our money and giving away control of our cash flow.

What we do is help our clients, and help you, to become more in control of your cash flow and to make the most of your resources by making your money as efficient as possible. The reason we do this is simple: whoever controls your money controls your life. So here’s a 30,000-foot view of how our process can help you to make your money more efficient. It all starts with this circle right here, your circle of wealth.

Olivia: That’s right. One thing we all have in common is we all have a circle of wealth. Some are larger than others, and others are larger than ours, but we all have one simple thing in common: we want that circle to grow. Now, there are many ways that you can grow your circle of wealth, but what we have found is that every dollar that’s in or going through your circle of wealth is broken up into three areas: there’s accumulated money, that’s the money you have saved and invested, then there’s lifestyle money, that’s the house you live in, the car you drive, the things you do, the vacations you go on, and it’s the schools your children go to because that’s a lifestyle choice for Mom and Dad.

Tim: And the third type of money is transferred money. Do you know what transferred money is? Well, it’s money that we’re giving up control of unknowingly and unnecessarily. It’s things like interest on debt, it’s things like taxes, it’s things like fees and planning inefficiencies. And the key here is that we focus on the transferred monies. Why? Because we feel that is the best way to help our clients make their money more efficient—focus on not losing money rather than taking risks to get a higher rate of return.

So what we’d like to do is sort of show you what differentiates our process from the rest of the financial services industry, and it’s real simple. Do you know that in 2023, according to the Bureau of Labor and Statistics, there were over 272,000 financial advisors in America? And I would be willing to bet that less than a thousand focus on wealth transfers. The rest of them focus on moving the money that you have, because that’s the grease that makes the wheels operate in the financial services industry—moving money.

Olivia: The conversation basically goes, “Hey, you have X amount of money earning 5%, we can show you how to get 7%. Now, you have to take some risk to get there, and you may lose, but at least you’ll get a higher rate of return, hopefully over time.” And then you’ve got to buy into whether or not that’s a strategy you want to implement, but see, there’s no guarantee that you’re going to make more money.

Tim: The second way the financial services industry could help you is to discuss how you could live on less, how you can reduce your lifestyle in order to save more money. Now, that’s a conversation that I don’t want to have with my wife, and I’m sure a lot of people don’t want to have that conversation with their spouse or themselves, especially these days. As you know, the cost of everything is going up between inflation, interest rates, and let’s face it, the salaries that people are earning can’t necessarily keep up with the spending and that lifestyle inflation that came back in the COVID times. So it makes it challenging, and maybe more challenging than ever, to make your money more efficient on your own.

And that’s why we’re here, educating people as to ways to make that money last, make sure it’s accessible to serve you and your family, and help you accomplish your goals all along the way.

Olivia: So how we do that is to focus on these wealth transfers. And basically, our process has four steps. The first step is to identify exactly where you’re giving away control of your money, and when we show you that logically, it will all make sense. The second step is the hardest step in the process—you’ve got to stop doing what you’ve been doing for 10, 15, 20, even 30 years, and it’s a hard habit to break.

Tim: The third step is to show you where to put your money so that you’re in complete liquidity, use, and control of your money. We call it the L.U.C. Factor—putting money in a place where you, and only you, could access it. And then the final step is really where the magic happens, where you borrow money from yourself to fund your lifestyle and pay interest back to an entity that you own and control. And if you take a look at that, basically your money never leaves your control. And that’s the lens through which we look at things to make sure that you’re in control of your money at all times.

Olivia: Now, when we focus on these wealth transfers, again, it’s things like interest on debt, it’s things like planning inefficiencies, it’s things like taxes. But you see, if you paid a dollar in taxes this year that you didn’t have to pay, you don’t only lose that dollar—you lose something more valuable: you lose opportunity cost. You lose what that dollar could have earned for you, and you lose it for the rest of your life.

Tim: So we focus on opportunity costs because every move we make financially eliminates choices that we could have made had we not made that choice. Exactly. And we always say we’ll never see the interest we don’t earn on our money. You know, so a lot of people pay cash and they do it in order to avoid paying interest to outside entities. But what happens is we get a hole in the bucket, if you will, because we lose the opportunity cost, and that’s the unseen.

So we quickly identify where you’re giving up control of your money in six key areas: mortgages, how you’re paying for your real estate, taxes, how you’re funding your retirement, protection areas, insurances, college funding, how you’re paying for your children’s college, and then how you’re making major cash capital purchases. Because what we’ve found is it’s not what you buy—it’s how you pay for it that is going to make the difference in your financial life.

Olivia: So what we try to do is put you in control of your own money. Right now, a lot of the time, you know, depending on your situation, it may be the mortgage companies, the banks, the credit companies, the government, or those major capital purchases like cars and paying for education—all of these entities seek to gain control of your money and your cash flow. And that’s where the rub comes in.

Tim: So by putting yourself in control, you really regain control of your entire life because now you control all of that cash flow. And I would argue that most of life’s frustrations come from not having access to money when you really want or need something. Now, it might sound overwhelming, it might sound impossible, but the fact of the matter is it’s very simple. Do you remember when you first learned how to play this game, tic-tac-toe? It’s a simple game with simple rules, and the conversation went something like this: the person who showed you how to play basically said, “Hey, here’s a new game, it’s called tic-tac-toe. You’re X, I’m O. You have to get three in a row.”

Olivia: And because that person taught you the rules to play, but not the rules to win, you lost and you lost and you lost until you figured out how to prevent your opponent from getting three in a row, and then nobody won. So then you went and showed somebody else, and you taught them the rules to play, but you didn’t teach them the rules to win. Our process teaches you the rules to win the financial game.

Tim: And it’s funny because, you know, those financial institutions are the ones who are advertising, who are luring us in with all of those offers and giving us the information to make our financial decisions. So it makes sense that they’re winning right now, right? And you know they’re winning because a lot of times you’ll feel stuck, frustrated, unable to do the things that you want to do even though you earn a great income. And that’s how you know it’s not how much money you make, it’s how much money you’re keeping at the end of the day that’s really going to make an impact on what you’re able to achieve in this life and the impact that you’re able to have.

Olivia: And you see, conventional wisdom teaches us that we need to focus on getting a higher rate of return on our savings and investments. But here’s the problem—those products that we own are just that: products. Nobody’s showing us how to utilize those products to make our financial life better. And that’s the problem. If we only focus on getting a higher rate of return, and we completely ignore opportunity cost, taxes, and interest on debt, our total circle of wealth can grow, but these problems are going to grow as well.

Tim: So the best analogy that we make to differentiate our process from others is the fact that other advisors are focusing on getting a higher rate of return and selling you the best product—we’ll call them the golf clubs. Our approach is to focus on how you’re using those products—we’ll call that the golf swing. And if you wanted to get better in golf, there are two approaches: you can go out and buy the best clubs, and by virtue of that, you’ll be the best golfer, or you can figure out a way to improve your golf swing. And that’s what we do. We take you down to the practice range, find out how you’re using your money, and then make adjustments to make your money more efficient.

Tim: Here’s a great example of how we help our clients make their money more efficient. We’re going to use an example of a family earning $102,000 per year and they’re saving $6,000 per year, and they’re getting 6% on their savings. Now, it would be a fair estimate to say that up to this point in their lives before they met us, 100% of their financial planning focus was on getting a higher rate of return on this amount of money every year.

Tim: So, if they’re putting away $6,000 and earning 6%, they’re earning $360 per year of interest on their annual savings. And if they increase their rate of return by 50%, they now earn $540. And here’s the question: is that really moving the needle for them? They just increased their rate of return by 50%, and it didn’t necessarily move the needle for them financially.

Olivia: Well, they increased their rate of return, but they also increased the risk that they were taking in order to get that rate of return.

Tim: Exactly. So it comes down to, was it worth it for less than $200? So the question becomes, how can we increase the amount of savings or the amount of interest earned on your savings without taking on additional risk? And our approach is to focus on the $96,000 of expenses. And we’re not talking about, you know, stop going out for dinner three nights a week and only go out two nights a week, and you’ll save $100 a week. No, we’re talking about, how can we reduce your expenses without reducing your lifestyle? I want to repeat that: how can we reduce your expenses without reducing your lifestyle?

Olivia: That’s where we focus on the wealth transfers, because the wealth transfers are already baked into your cash flow cake. So here’s the benefit of reducing your expenses without reducing your lifestyle: if we reduce your expenses by 1%, that’s $960, and that is the equivalent of earning 16% on your $6,000 of savings. That’s how you move the needle.

Tim: Now, here’s the thing: we’ve all been told that the higher the risk, the higher the what?

Olivia: The higher the return.

Tim: That’s right, the return. Well, have we ever taken risk and not gotten a return?

Olivia: Unfortunately, yes.

Tim: But here’s the deal—how much risk do you have to take to stop an expense?

Olivia: Zero.

Tim: All you have to do is stop doing it. What does it cost to stop an expense? It doesn’t cost anything. So that’s how you win this financial game, and this is how we help our clients make their money more efficient: reducing their expenses without reducing their lifestyle.

Olivia: You see, we can prove that this works because 16% of $6,000 is $960. So that’s what makes us different, and that’s how we help our clients.

Tim: Now, if you had a bucket that had holes in it—things like debt, opportunity costs, taxes, interest—and you had a faucet trying to fill up that bucket, how long would it take to fill up your bucket?

Olivia: Well, it would never be full because all of the money would continue to leak out.

Tim: Exactly. So when it comes to filling up your leaky bucket, there are two methods: number one, turn up the water pressure, and you know, eventually maybe it’ll overflow. It’ll continue to leak, but as long as you keep that water flowing, you’ll be fine. But the second method is to plug the holes in your leaky bucket, and then that bucket is going to fill up even if you only have a trickle.

Olivia: And here’s the point: conventional wisdom tells us that we should save more into that leaky bucket. It doesn’t make sense. Why try to increase the flow? You should never increase the flow unless and until you plug the holes.

Tim: So our first step will be to see if we can find areas where you may be more efficient without the need to reduce your current lifestyle.

Olivia: Now here’s the question: on a scale of 1 to 10, how does what we do meet with what you’re looking for from an advisor?

Tim: If you’d like to learn more about how we put this solution to work for our clients, we’d be happy to take a look at your situation. Visit our website today at Tier1Capital.com and schedule your free strategy session. We look forward to speaking with you soon.

Why Whole Life Insurance is Essential for Wealth Building, Tax-Free Retirement and Legacy Preservation

When we think about financial assets, we often categorize them into three types: current assets, accumulation assets for the future, and legacy assets for passing on wealth. However, whole life insurance, specifically designed for cash value accumulation, can function as all three—current, accumulation, and legacy—simultaneously.

As a current asset, the cash value of your whole life insurance policy can be accessed at any time. You can borrow against it to pay off debt, invest in opportunities, grow your business, or handle immediate needs. This makes it a flexible financial tool that allows you to address today’s issues while keeping your long-term goals in mind. Unlike a traditional savings account, where you may lose out on interest when you withdraw funds, whole life insurance allows your money to continue earning uninterrupted compound interest while you borrow against it. Plus, it offers additional benefits like protection through a guaranteed death benefit.

As an accumulation asset, whole life insurance also serves as a long-term strategy for building wealth. Over time, your monthly or annual premiums accumulate in value, and the dividends and interest earned inside the policy grow your cash value. This provides a reliable way to supplement your retirement income on a tax-favored basis. You can withdraw the amount you’ve paid in premiums tax-free and borrow against the accumulated interest without triggering taxes. This setup helps avoid common tax liabilities that erode retirement income, such as federal and state income tax, Social Security offset taxes, and increased Medicare premiums.

Finally, whole life insurance acts as a legacy asset. When you pass away, the death benefit provides a significant sum to your beneficiaries—whether it be family, a business, or a charitable organization. This explosion of value far exceeds the amount paid in premiums and helps recapture the interest paid over the years through policy loans. In essence, whole life insurance allows you to make your money work in three different ways: as a current asset, a deferred asset for future use, and a legacy asset for your loved ones.

Incorporating whole life insurance into your financial strategy offers unmatched efficiency and control. If you’d like to learn more about how to use this strategy for your unique situation, visit our website at tier1capital.com and schedule a free strategy session.

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

Mastering Financial Freedom: Overcome Inflation, Debt, and Cash Flow Challenges

In today’s financial climate, many people feel the pinch as inflation reaches unprecedented levels, while salaries fail to keep up. It’s becoming increasingly difficult to manage your finances, especially after experiencing a period of “lifestyle inflation“—where spending habits increased during a time of economic boom, only to be met with the harsh reality of rising costs. This post aims to offer some relief and guidance on how to regain control of your finances amidst these challenges.

Inflation has surged by 18.6% over the past three years, while savings have plummeted by 37%. This stark contrast highlights the financial strain many are experiencing. The double whammy of dealing with both rising living costs and credit card debt, combined with contributions to retirement accounts, has left many feeling trapped. This scenario creates what we call a “double death”—a situation where your money is locked away in retirement accounts, making it inaccessible when you need it most, and at the same time, high-interest credit card debt eats into your cash flow.

Credit card debt in America is at an all-time high. The cost of living is forcing many to rely on credit just to get by, leading to a vicious cycle of debt that seems impossible to escape. Credit card interest rates can range from 20% to 35%, which means a significant portion of your payments goes toward interest rather than reducing the principal balance. This system is designed to keep you in debt, obligating your future income for purchases made today at a steep cost.

What we propose is a shift in mindset—regaining control of your cash flow and, ultimately, your life. Being heavily in debt means you’re not in control, and this financial stress can affect every aspect of your life, including your sleep. Studies show that a significant percentage of small business owners worldwide lose sleep over cash flow concerns, underscoring the pervasive nature of this issue.

Many cash flow problems are self-inflicted, often resulting from how we use our money. The combination of credit debt and retirement contributions is a prime example. Instead of the simplistic approach of redirecting all available cash flow to pay off credit card debt, which leaves you with no access to money and forces you back into borrowing, we suggest building a pool of cash that you own and control. This approach provides a safety net, allowing you to pay off debt while still having funds available for emergencies.

Building this financial safety net is key to navigating life’s unexpected expenses. By having access to capital, you gain the freedom to choose whether to tap into it, reducing your reliance on credit and giving you more control over your financial future. The strategies we often use may seem admirable—saving for retirement and getting out of debt—but when done simultaneously, they can leave you feeling just as pinched as before. By adjusting your approach, you can transition from feeling financially stuck to gaining more control almost overnight.

Ultimately, it’s about shifting your perspective to ask, “Am I putting myself in more control of my money or less?” This is the lens through which we help our clients view their cash flow, guiding them toward greater financial freedom. If you’re interested in learning more about how we implement this process for our clients, visit our website at tier1capital.com, where we offer a free web course that delves deeper into these strategies.

Remember, it’s not about how much money you make—it’s about how much you keep that truly matters.

The AI Blueprint for Business Owners: Brad Costanzo’s Proven Strategies

Episode Summary

In this episode of the “Control Your Cash” podcast, hosts Olivia Kirk and Tim Yurek welcome Brad Costanzo, the founder of Accelerated Intelligence A.I. Brad is an AI and business innovation consultant who helps organizations leverage the power of artificial intelligence to drive business growth through innovative strategies. Throughout the episode, Brad shares his insights on the rapid evolution of AI and how it can transform business processes to increase productivity, creativity, and profitability. He discusses the anxiety that comes with trying to keep up with constant technological advancements and provides practical advice on how to strategically implement AI in business operations without becoming overwhelmed. Brad also introduces his “Five Bucket Framework” for AI integration, covering thinking, creating, communicating, analyzing, and automating, and shares actionable tips for both tech novices and experienced users to maximize AI’s potential in their work.

Guest Info

Brad Costanzo is the founder of Accelerated Intelligence A.I., a leading consultancy that specializes in integrating artificial intelligence into business strategies for enhanced growth, productivity, and profitability. With a deep expertise in harnessing AI, Brad has distinguished himself as a pioneer in using innovative technologies to drive business success. His work focuses on empowering organizations to leverage AI for creating powerful content, automating processes, and optimizing communication strategies. Through his hands-on approach, Brad provides tailored solutions that not only streamline operations but also deliver measurable results, making him a trusted advisor for businesses looking to stay ahead in the rapidly evolving tech landscape.

You can send him an email at [email protected]

Key Takeaways

  1. Understanding AI Integration: Brad emphasizes the importance of focusing on the most impactful and easy-to-implement AI projects, avoiding the trap of trying to master every new technology.
  2. The Five Bucket Framework: AI can be categorized into five primary functions: thinking, creating, communicating, analyzing, and automating. Businesses should identify where they spend the most time and money and consider how AI can optimize these areas.
  3. Practical AI Application: Brad suggests using AI as a mentor, assistant, and critic to enhance productivity and creativity. He provides examples of how AI can automate content creation, analyze data, and improve customer communication.
  4. Simplifying AI for Business Use: Brad’s approach is designed to help businesses start small with AI and gradually expand their capabilities without feeling overwhelmed, ensuring a more sustainable and effective adoption of AI technologies.

Transcript

Olivia:
Hello and welcome to the Control Your Cash podcast. I’m your host, Olivia Kirk.

Tim:
And I’m your co-host, Tim Yurek. Today we have a great show in store for you.

Olivia:
We have with us Brad Costanzo. Brad, thank you so much for joining us.

Brad:
Thanks for having me. It’s exciting to be here.

Tim:
Brad is a really interesting guy. We worked with him recently. Brad is the founder of Accelerated Intelligence A.I. and an AI and business innovation consultant who empowers organizations to harness and transform the power of artificial intelligence. With a deep commitment to driving business growth through innovative strategies, Brad has distinguished himself as a leader in integrating AI with business processes to enhance productivity, creativity, and profitability. So we have a great show in store for you, and Brad, again, it’s great to have you.

Brad:
Yeah, it’s great to be here, and those are just fancy words to say I use tech to do my work for me and show other people how to do it, which is how we linked up. So yeah, it’s been fun working with you guys. It’s a really interesting field, and it’s changing all the time. It’s never a dull moment. That’s actually one of the problems—it’s never a dull moment. I’m like, slow down, let me catch my breath, but it’s fine.

Tim:
Well, just to add on to that, it’s amazing to me, Brad, to see some of the developments that have occurred from the very brief time we started to the time we actually implemented certain concepts. It was mind-blowing to me how quickly the technology has changed and moved forward. It’s amazing.

Brad:
Yeah, it feels like I put my head down for a week to work on a project, and I pick my head up, and somebody’s already solved that project with another piece of software. You push a button, and it’s done. That part’s frustrating, but it’s also great because the innovation is happening so quickly. That’s both a really good thing and a really bad thing because it can create this level of anxiousness and anxiety, especially if you’re a professional or a business owner trying to stay on top of this and adopt it. But it can be happening so quickly.

Brad:
I like to say that AI, in general, is the new shiny object, but it’s the one you can’t afford to ignore because it’s coming, and you’ve got to find a way to wrap your head around how to use it. That anxiousness and anxiety can come in when you’re trying to stay on top of all the new things. I think that’s what I try to tell my clients, and I’ve had to do this myself: don’t pay attention to all the most edgy cases, like the newest thing today, the newest thing tomorrow. Give it a little time to mature. Stick with the base areas. We can talk a lot about how to find that, but in the beginning, it was like a full-blown sprint out of the gate. Everybody’s running, running, running, and then you find yourself getting tired like, oh my God, now I really can’t keep up with all of this.

Brad:
There’s a concept we can talk about called diminishing marginal utility of artificial intelligence. I don’t know—have we ever talked about that in our private sessions?

Tim:
No, tell us more.

Brad:
This is just a—you know, I was thinking about this before because there are so many things AI can do. I can help you with this and that—everything from coming up with great plans to creating all your content and books and chatbots. There are thousands of things it can do. But as a business owner, professional, or executive, there are only so many things that actually need to happen to move the needle in your business and life. You want to attract more people to your business, convert those into customers or clients, retain them, and give them a better service experience. Yes, AI can create 30-second really cool video clips that would take somebody else—but are those going to move the needle in your business? Probably not. I can create really cool little designs in Midjourney and do all this other stuff, and I can create cartoons and graphics. But if that’s not part of my business, learning how to do every little thing on those edge cases that it can do—I’m not going to have any use case for it. The more you try to utilize AI in every aspect of your business, the more you realize that, wait a minute, these aren’t needle movers. So that’s that diminishing utility of trying to stay on top of every single innovation.

Brad:
I also say this from the lens of—I am not a technologist, I’m not a computer programmer, I’m not an engineer. I am a serial entrepreneur and growth consultant, and that’s what I look for. I look for what’s going to make a difference in my and my client’s business. Will it help me attract, convert, or retain customers and clients? Will it make me more revenue or profit because it’s reducing expenses? Will it free up my time to do other things? Will it unleash creative pursuits? If it doesn’t do those things, I try to filter those out and say, okay, what’s the handful of things that are going to really, really help, and then ignore the rest for a while. When I’ve told other clients and people this, it gives them relief that, okay, maybe I don’t have to stay on top of every single new innovation out there. It’s good to pay attention to what’s possible, but trying to master all that stuff—it’s really not necessary. I like to go in and say, what’s nice to have, what’s need to have, what do we do now, next, and never? Does that make sense?

Tim:
Well, based on what you just said, right? I’m going through in my mind, okay, talking about our journey together. We did our initial call, and you basically gathered a bunch of information as to what we were looking to help us move our needle, right? Then you came back and addressed most of those issues, if not all of them, and you prioritized which ones we should implement exactly, and basically almost in the order that was of most importance and most value, right?

Brad:
Exactly, exactly. I think of this as on a level of—I call this like ICE: what’s the level of impact it’ll have, what’s your confidence in that impact, and how easy is it going to be? I like to go after the high-impact, easy projects first. I kind of score them like that. If there’s a—think about it—you and I do this oftentimes: create a spreadsheet and go on a scale from 1 to 10. Here are 10 projects. If this works, what impact will it have on my business? Let’s say it creates a whole new channel of communication—like, that’s great, this was a problem before, it’s no longer a problem. We were spending $10,000 a month for this; now we’ll spend $100 a month—that’s a high impact. Now, what’s our level of confidence? Well, if we’ve done it before or if there’s a computer program out there that’ll do it for us with a few clicks, I’ve got a pretty high confidence that it’ll work and have that impact. And then once more, the ease, which is the opposite of effort, on a scale of 1 to 10, is this something we have to develop a whole new—like hire full-stack engineers to come in and develop a custom software for, and it costs $50,000? Well, that may be a very like a 2 on the scale of 1 to 10 of ease, but if it’s sign up for this program, install it, start using it tomorrow, $100 a month—that’s a 10. That means it’s super easy and effortless to do. And then if you just take all of the various ideas—and I’d love to talk to you—you’ve heard me talk about the five-bucket framework, I think—we’ll talk about that. That’s how you find these ideas. Let’s say I’ve got 10 of them. Score them all: impact, confidence, and ease, scale of 1 to 10, average them out, sort them by the highest number, and then just start knocking off projects like that.

Tim:
I mean, that makes perfect sense, right? Especially when you’re looking to move the needle the most with the least amount of effort. But tell us more about that five-bucket framework because that’s pretty cool.

Brad:
Yeah, so in working with a lot of clients and facing these problems, one of the first things to overcome is what I call “toolphoria.” Look at all these tools—this is exciting! You get euphoric over it, but then euphoria turns to anxiety. So I just took a step back and zoomed out and was like, okay, step one of what is necessary for somebody like a business owner to employ AI into their business is you have to know what’s possible. You just—the wide breadth of everything that’s possible. And then the next step is to know what are the projects I should do. So I group these—instead of looking at what departments AI will help you with, like here’s how AI can help you in sales and marketing, here’s how it can help you in finance and executive, etc., I just put them into buckets. I said, AI only helps you innovate in five different areas. The first one is thinking. I’ll actually just—I’ll rattle them off real quick, and then I’ll go deeper. So thinking, creating, communicating, analyzing, and automating. Everything that it does will fall into those. I’ll go into a little more detail here.

Brad:
So in the thinking bucket, this is all the stuff as a business owner that never reaches the rest of the world. This is internal—like you guys own the business together. So this is, hey, let me brainstorm ideas for a book, let me brainstorm ideas for a marketing campaign, let me think through potential content ideas that we may be able to do for our social media marketing. Let me—I like doing this with some of my clients, where we’ll create a virtual board member for their company. So we’ll create a custom ChatGPT with background information on them—like, this is the company, who they are, their background, their services, their products, their prices, their target market and audience. It’ll know a little bit about a lot of aspects of them, and then it’ll know about their constraints, etc. Now we build this virtual board member, so when you have a problem, you go to it, and it’s been instructed to be a business strategist. You say, okay, I’ve got a new opportunity here. Here’s a new product or service that we want to roll out to this audience. What are the pros and cons? Help me do a SWOT analysis or any strategic thinking. Well, if it’s got the background and the context and your constraints and goals, etc., it can give you really amazing advice that you might not have gotten, and it can do it for free. It can help you think through problems. You might say, here’s an issue we’re having with a supplier or a client or a contractor. What do you think we should do? We’re thinking about pivoting. Is there another route? One of the things that AI does amazingly well is it connects dots that you might not have thought of. You can sit around in a brainstorming session, but sometimes you just go over there. It may spit out terrible ideas, but every once in a while, it’s going to spit out some really, really good ones, and it’s getting better and better. That’s thinking.

Brad:
One of the exercises I like doing is creating a perfect avatar—a perfect client avatar or buyer persona. You put in who you are and what you sell, and then you have it say, help me think of different clients and customers—demographics, psychographics, things that like—here’s who I usually target, but who else might I go after that could use my products and services? And it might just say, well, have you—you know, I know that you’re typically working with C-suite executives and busy professionals, etc., but single moms who are also small business owners would also benefit from this because of X, Y, and Z. You’re like, you know, I never would have thought about that. So it helps you think.

Brad:
The next side is creation. So in the creating bucket, this is all the stuff that goes out to the world. It helps you do content marketing, sales copy, and creating books. I know you’re working on a book. It helps you create videos and audios. You can do an entire podcast without ever showing up by training a tool called—there’s many of these, but one of my favorites is called 11 Labs. You train it on your voice, and then you type in what you want it to say, and it creates a podcast for you. Or you have ChatGPT create a script of a podcast in your voice, and then you drop it into 11 Labs, and it automatically creates one without you ever having to think about it or pull out a microphone. It can also take a podcast or a YouTube show and create derivative content from that, which means everything from show notes to clips and social media posts and all that. This is where 90% of the people are playing in—they’re thinking and creating, like, help me create a think—help me think through an email campaign for my newsletter, and then now write the newsletter for me. Cool.

Brad:
The other three buckets are really exciting because they’re overlooked. They’re a little bit more technical in nature, but not overly. One of them is the communicating bucket. That’s where we can communicate with chatbots and voice bots. There are voice bots right now that sound exactly like me. They’re scary accurate. I think it’s something like 30 to 40% of people right now cannot tell the difference between the voice bot and a human. It can answer questions, set appointments, and do a lot. But then how else do you use communication in business? Well, you can communicate with leads, prospects, and give them frequently asked questions about your business. They want to know more about it. It can set appointments for you automatically, integrate it, and say, well, it sounds like you’d be a good fit for our program here at Tier 1 Capital. Would you like to set an appointment? It says yes, and the chatbot or voice bot says, great, I’ve got times tomorrow or the next day at 3:00. Which sounds best? And if they say 3:00, it automatically sends them a calendar invite, and it integrates with yours. So it can set appointments now. It can also help with customer service. This is huge. If you’ve got a big company, a lot of customer service reps working with people answering questions, they can go in and tell them things they need to know about their account or just in general. You can also communicate with employees, stakeholders, and investors in your business by creating a chatbot that’s knowledge-based and understands company policies, etc. So instead of having to open up a big old handbook, you just go in there and talk to the bot.

Brad:
The other two are analyzing. It’s great at analyzing data, and it’s also great at analyzing text, so qualitative and quantitative. If you’re trying to—I’ve built a bot on ChatGPT where I can take a screenshot of a stock chart and have it go in and give me a technical analysis based on what it sees as the patterns. It can say, well, this is creating an ascending triangle pattern or whatever. It can say, here’s your short-, medium-, and long-term bullish and bearish indicators. I can upload a spreadsheet and say, create charts of this, tell me what my clients’ trends are. But I can also upload, let’s say, two pieces of—one of the things I love doing with clients who have a sales team is I take their top sales performers, and I take three or four of their transcripts of sales calls, and I take their bottom or their new salespeople who aren’t doing as well, and I say, analyze these sales scripts, look at the sentiment analysis, look for patterns. How are the A players answering objections where the C players aren’t? Then create a corrective course of action for that. So that’s both qualitative and quantitative analysis.

Brad:
The last bucket is automating. Now, that is kind of, to me, that’s the big bucket where if you can get this software to talk to this software, to talk to this software, and you add AI behind the scenes—here’s a little sample I did where I’ve got a little Google sheet where I keep some of my favorite quotes. If I see a quote or if I think of a quote, I can just write it, type it in my Google sheet, and behind the scenes, I’ve got a program called Zapier going in and saying every time I enter a new quote, take this quote over to ChatGPT behind the scenes and use a prompt that I created—a set of instructions that creates a 300-word really engaging, profound, sometimes funny social media post, and then post it to my Facebook and Instagram. So behind the scenes, it just triggers all these actions to happen.

Brad:
To summarize, it’s creating, thinking, communicating, analyzing, and automating. What you as a business owner just have to do is think, go to each one of those buckets and go, where am I spending the most time and money? Write those down, and then ask what would happen if I was able to automate these or use AI to do this for me. There’s a good chance you can do that. But to me, that’s how you find the projects you should be working on, and then look at the level of impact. I’ve been kind of soapboxing this whole time, so I’ll let you kind of ask any questions about those.

Olivia:
Yeah, no, that makes a lot of sense. In working together with those specifically, like the bots and the chatbots and the voice bots, they’re really cool and really engaging. As people become more comfortable with interacting with the AI, as it becomes more popular, they’ll definitely be showing up more. It’s cool how you’re able to upload your content, give it a knowledge base to work off of, and then also give it a voice. It’s pretty awesome.

Brad:
Yeah, it really is. It’s one of those things where a lot of people are thinking about bots, and they should be thinking about it like, should I use them or shouldn’t I? There are some businesses where you probably don’t want to use it because the human touch is way better, especially if you don’t have a high degree of volume. If you’ve got a huge degree of volume, and the problem you’re trying to solve is that, you know, we’re only open eight hours a day, or we’ve got so many people and we’ve got a high hold volume, that’s when it starts to make sense to use them more. But also, I don’t think it is going from—it’s not human or bot. We’re already using bots in call centers. Like, there’s a call tree—every one of us has dealt with it. You call an airline, press 1 for English, press 2 for Spanish. Would you like to make a flight? Press 1. Would you like to check on your baggage? Press 2. Until they won’t let you go forward.

Olivia:
I know, and it’s frustrating.

Brad:
It is, but we’re all used to dealing with that, and those are better than getting no answer and saying, well, we’re putting you on hold. But just imagine now that you can talk to a bot that says, listen, what do you need? I can understand English, or Spanish, or whatever language you speak. I can automatically understand it, and then it can answer questions, give you answers really specifically when you need them—24/7, consistently. What these tools allow you to do, especially the voice bots, is if you get in trouble or it senses that you’re not getting the answer, it says, hold on, would you like me to transfer you to a human agent if they’re available? If you say yes, it transfers you to a human agent, and that human agent gets to see a transcript of everything that you were asking. It’s just—it’s like the next level up. Depending on the type of company you are, there are some tremendously powerful chatbots and voice bots that can be put into place. But yeah, you have to think, will this help my business or hurt my business? I tell people, don’t just automate it just to automate it—make sure it’s actually solving a problem.

Tim:
Yeah, for sure. Especially, you know, I could see it coming into play—what was coming to mind was right—what I want this to be in the world is we were trying to, like, at home, we were trying to find a part to fix a leak in a water heater, right? Like, why can’t we just put in the part, like, you know, take a picture of the water heater, and you could tell me which piece this is at Home Depot instead of having to go all the way through everything, right?

Brad:
What size? Did you actually do that?

Olivia:
No, because—

Brad:
Well, a lot of times that works. I did see on Home Depot they have a lens—

Olivia:
Like Google Lens? I’m like, did you try this?

Brad:
Yeah, well, even on ChatGPT, Google Gemini, but like all of them basically, but let’s just say ChatGPT, which most people are now at least a little familiar with. You can upload a photo of something and, A, say what is this? But, B, you can say, like, let’s say something’s broken. You can upload a photo, and sometimes you circle it, or you just describe what’s broken, and you say, how do I fix this, or what’s the part needed for this? Like, it’s mind-blowingly effective. Like, every single day—I work in this stuff, but every single day I’m blown away. I’m like, I cannot believe it just did that.

Tim:
Check that out, Brad. I haven’t used that feature yet.

Brad:
No, yeah, it’s so fun. I’m trying to think of other things that I’ve used that for, but yeah, it is famously effective for uploading images and saying, tell me what this is. People are even taking an image, like a screenshot of a computer program they use. Like, let’s just think of a—Trello is a famous project management interface, and it’s very easy—it’s a kanban board, and you can take a photo or an image of a screenshot of your dashboard if you use it, and then you can take that over to ChatGPT and say, I want to create a code, like software code, that will be a project management system, etc., and I want it to have the exact same user experience and layout as what you see here. Please create the code for me, and it, nine times out of ten, it will do it. So it’ll take a screenshot of that and it’ll write the code to create it. Once more, the amount of time and money that saves.

Brad:
I just created—speaking of code, I’m not a coder, but I just created code the other day. I had an idea for a little Chrome browser extension, and I was like, you know, my idea—so I’m an investor in Bitcoin, right? And I was interested to see if—I thought, wouldn’t it be cool if I went to a website and instead of prices in dollars, I could push a little button in my Chrome browser, and it would automatically change all the dollars—like, if something costs $500 that I’m looking at, I could push a button, and it would change it to, you know, how much Bitcoin would that be? Like, how many Satoshis, which is the unit, the smaller unit of Bitcoin. I just had an idea like, that would be cool to push a button, and it turns all my US dollar prices into Bitcoin. And I said, I went over to ChatGPT, and I said, here’s what I want to do. I have no idea how to do this. I’m a complete idiot when it comes to coding. Please walk me through this and help me flesh it out, and it did. And in about 30 minutes—well, first of all, in about three minutes, I had the code. Then I kept on getting errors when I tried to install it. What did you do with it? So I would take screenshots of the errors, and I was like, oh, now I know what to fix. And it says, here, I just fixed it. Do this. It took me about 20 or 30 minutes, but I now have a working Chrome extension that will switch things over to Bitcoin prices on my web, and I did no thinking except for, here’s what I want, and then I just used it as my coder. So it’s really amazing.

Brad:
By the way, I know I’ve mentioned this to you in our one-on-one sessions, but there are two mental frameworks or models that I use all the time to remind myself how to get the best out of this. I call it the MAC model, which is: it’s your mentor, it’s your assistant, and then it’s your critic. A lot of people just think of it as an assistant. They go to ChatGPT, and they say, do this, and then they get results they don’t like. They’re like, well, wait a minute, maybe it was garbage in, garbage out. So remember, I don’t know how to do this. Like, I want to create code for this Chrome plugin. Well, I treated it as my mentor. I said, ChatGPT, here’s what I want to do. I’m dumb. Walk me through this. Explain it like I’m dumb, and teach me how to do it, and it did. It says, well, here’s exactly what you would do. Then I had it be my assistant, and I said, now create the actual code base, and it did. Then I said, well, now I have to critique it, or in this case, troubleshoot it—what’s wrong? But most people will sit down with ChatGPT and not know what to do, and they don’t think—ask ChatGPT, how do I use you? You tell me. Help me help you, Jerry. It’s one of those things that—it’s a really great reminder that you don’t have to know because it knows, and it knows how to use itself better than you do.

Tim:
Right. It reminds me of going to my wife and saying, honey, I don’t know why you’re upset. Please help me help you. What is it you want from me? I see you’re crying, and I don’t know why.

Brad:
Right. Before I just jump in and try to fix this problem, what problem do you want it fixed, anyway?

Brad:
But then the other little framework is—I’m the Hollywood director. So I set the scene. ChatGPT or whatever AI is your actor. I may say, write an article about the benefits of infinite banking, and it writes one, and I go, wait a minute, hold on, cut! Way too complex. Too much jargon. I need you to explain this so that a sixth grader could understand it. Add in some examples and add in some humor. It’s like, okay, go, action! And it does it. And I’m like, nope, cut. All right, let me give you more background. Here’s what I’m trying to do, right? And I just think of myself as being the guy in the director’s chair, and the AI is my actor that never goes on strike. That gives you the permission to keep on using it to make itself better—like, nope, make it better. Nope, make it better. But a good director, a good Hollywood director, doesn’t say, cut, didn’t like it, or they don’t say, cut, didn’t like it, do it again. The actor would be like, well, what didn’t you like? You have to direct me, right? You have to guide me. You don’t just say yes or no. Actually give me guidance. You know, I think of this as like the difference between the art and science of AI. The science is create a well-constructed prompt or instructions. The art of it is sculpting it to get what you want. Analyze my writing so you can write like me. We did that with you guys. Add in more of this, take out this, here’s what I like, here’s what I don’t like. How could you make it better? Maybe write like this author, sound like this. That is what makes the difference between getting okay content from this and getting world-class content from things like AI.

Brad:
Once you kind of really—I love the term grok, right? To grok something—for those who don’t know, it means to really get it, like boom! Like, the minute somebody groks infinite banking, right? In the beginning, someone’s like hearing about it, and they’re like, okay, insurance policies and cash flow and bar—okay, I kind of get it, but I don’t know if I get it. And then the minute it clicks, like, that’s grokking—like, oh, boom, now, okay, now I get it, I know how to use it, I know what to do. Same thing with AI—like, all right, I understand the frameworks, I understand how to talk to it, I understand what it can and can’t do, and then I know the tricks to get it to do what I want it to. That is where the learning curve becomes insanely steep, so after a little bit of time, you become incredibly capable.

Tim:
Exactly, and one of the best things we learned in our time with you was how to build the custom GPTs to have their own personality, their own knowledge base, so that you’re able to prompt them to do what you want them to do without having to tell them how to do it every single time.

Brad:
Exactly. One of the things I’m working on right now with another private client is—they’re a hard money lender for real estate loans, and they do a lot of volume. He says, you know, we need a newsletter email drip campaign. We just need to stay in front of these people twice a week, every single week. Can you help me? I was like, yeah, let me create a custom GPT that will write 104—two emails a week—emails for you that are original, well-written, valuable, informative, but also with the desire to help build your credibility, brand awareness, answer questions, and just stay on top of this. So behind the scenes, a custom GPT, which you just mentioned for anybody listening or watching who doesn’t know what that is—that’s like a knowledge base and a little set of instructions for ChatGPT behind the scenes. You only have to build it once, and then you get to use it. What I did is I just took a bunch of information on them—who they are, what do they sell, you know, about the company and about the writer. Then I said, analyze his style, and I said, this is who they are, this is how they write, and these are—I loaded up a bunch of testimonials and case studies, and we just created this knowledge base about the company. Then I had it come up with, like, 104 different email subject lines, tried to make them as original as possible, and then I put that behind the scenes as well. So now it knew, and then now I built this for them so that they can just go in and have it write exactly like them. They were able to write about 104 emails in—you know, over the course of an hour or so. You just have to wait for it to actually print out. You copy those, put them into a Google Doc, and then now you just have a human come through and do the final touching, like, okay, I like this, don’t like this, let’s do some minor editing.

Tim:
Those custom bots—those are really amazingly useful. To have to hire a good copywriter to write 104 valuable emails for a year—I mean, it’s going to take them—I could have done it, it would have taken me easily a month, and I probably would have charged them $25,000 to do so. So it saves a lot of time, a lot of money, and that’s just one of the many powers of this stuff. But I’m glad you like the bots because, yeah, they can be really, really useful.

Olivia:
Well, you know, Brad, as you were discussing this, what immediately came to mind is, with limited knowledge of AI, for us to learn the system without the hacks that you provided us and the shortcuts that you helped us with, our minds would have been completely blown trying to figure this out on our own. Your knowledge of AI and the system is really—there’s always going to be a need for somebody like you to simplify it for somebody like us who knows that the technology is out there, doesn’t know where to start, and to invest the time—not so much the money—but the time to figure it out is just not a real efficient way to allocate that time.

Brad:
Yeah, thanks for saying that. It’s also—if you’re stumbling around, it’s really easy. Especially, I mean, you’re not sitting around retired with nothing to do on your hands. It’d be one thing if that’s all you had to do, but you’re running a business and you’re trying to do the other stuff. Yeah, it might be fun to tinker over here, but then you realize you just go down this rabbit trail, and you’re like, what am I doing? I’ve got other things I have to do. Trial and error is not a great way to do it. The way I learned, and you know, kind of my background in this really came from necessity and fear. So the necessity part, you know, I’ve been a growth and marketing consultant for a very long time. After I sold my last business, that’s what I really focused on—helping other businesses create everything from marketing plans and growth strategies for their business. One of my clients was a marketing agency, and I was kind of serving as a strategist both for them to grow their agency, but I was also working with their clients as an external consultant to help make sure that the strategies they were doing—and you know, there’s a lot of marketing work that goes on behind the scenes. I’ve been using AI tools for four or five years in one shape or another before they were ubiquitous. Then in November a couple of years ago, ChatGPT and OpenAI came out, and they just kind of dropped the microphone and showcased what was possible. The necessity part came with me going, okay, I’ve got a lot of work to do here. Let’s just see if I can do it quickly. AI allowed me to do the work I had to do anyway a lot quicker. But then the other piece was fear because I was taking something that would take me, no joke, two to four weeks to do, of real heavy mental bandwidth, and I would often charge about $25,000 to do a big strategic marketing plan. In the first month or so of OpenAI coming out with ChatGPT, I was able to do two to four weeks’ worth of work in two hours, and it was just as good, if not better, in some cases. I remember where I was sitting, right here, and I remember where I was thinking, I’ve just obsoleted myself. That old saying is, if you and a friend are outrunning a bear in the woods, you only have to outrun your friend, right? I’m looking at this as a marketing and growth strategist, etc., and I’m thinking, I have to outrun everybody else who’s starting to learn this because if I don’t, my skill sets that I have are going to be obsolete really, really quickly, or the price is going to have to come way down, and I don’t want to do the same amount of work for one-tenth of the price. Therefore, let me start to learn this because I have to. There’s another saying in this space that AI is not going to take your job. People using AI will take your job, and that couldn’t be more true. So I had to use it, and then as I felt that fear-based necessity in order to put it to work, I was getting tremendous results, and then that led to word-of-mouth referrals, people saying, hey, Brad, can you do this for us? Then I would either do it for them, but I would also teach them. I kind of have a knack for teaching this stuff and simplifying it down because I need to simplify it for myself to understand it, as I said, I’m not a tech. So one thing led to another, but yeah, fear and necessity led to me figuring this out. The vast experience I have, not only as a consultant but as an entrepreneur, has allowed me to go, okay, well, I know what CEOs and entrepreneurs need, and I also know what is overwhelming. Keep the overwhelming stuff out, know what’s possible, be good enough to be dangerous, and then know how to find the people who can do it for you.

Olivia:
Yeah, and to me, that’s the real rub. So tell us a few tricks for a tech newbie to really take advantage of this, hit the ground running, and then we’ll talk about—I know you have a book and some knowledge that you could share with the community.

Brad:
Yeah, for sure. So for a tech newbie, start with ChatGPT. You can get a free account. I always recommend the higher-paid ones, but if you’re just starting, just play with ChatGPT. If nothing else, yes, there are other tools like Claude, Gemini, Perplexity.ai—these are a lot of chatbots. They do similar stuff. Just jump into ChatGPT, and if you do not know how to prompt, say, ChatGPT—dearest ChatGPT, I don’t know how to use you, but give me some ideas of how I could use you. Or even better, if you have a—let’s say you have a job, maybe you are the head of logistics for a corporation, right? You may go to ChatGPT and say, I’m the head of logistics for Acme Company, and I’ve never used ChatGPT before. First, give me a list of various tasks that ChatGPT might be able to help me in my job role with. It’ll give you a list, like, oh, you could do this and this and this. Awesome. Now say, create a prompt—because prompts are the instructions—create a prompt for every single one of those ideas that will help me become more productive and capable, and it will do it. So it’s acting as your mentor. Here’s who I am, you tell me how I can use you. I don’t know, and it’ll tell you. Then say, now give me the prompts to use in order to get what you just told me to do, because that sounds good, but how do I do it? It will give those to you. It’s one of my favorite little techniques to open people’s brains to go, oh, be darned, like, I never even would have thought to ask it to do that, but it just did. Then continue to let it be your mentor, and then your assistant. Then if you get something that you don’t like, say, how would you make this better? A lot of people like to use this to write books. I’ve got an idea for a book. I’ve never written a book before. Can you give me a strategy to sit down and learn how to write a book? It’ll say, yes, here’s your game plan. Then I might say, all right, great, my topic is how to use AI in business. What’s a good format for creating chapters? Can you just create them for me? It’ll create it for you. Now you can say, well, those are okay, but how could you make them better? It’ll go make them better. This is how you play with it.

Brad:
I like to say FAFO—F-A-F-O—which is f*** around and find out, right? There’s another one—FAFF—F-A-F-F—F-A-F-F-I-I-O, which is f*** around and figure it out. So one of them is, find—just see what it does. But then the other one is, well, let me f*** around and see if I can figure this out because now I’m going to really use it as a sounding board, and let’s figure this out together. A lot of the clients that I get, I don’t know how to do everything on AI, but I’m really good at the figuring it out part, and AI makes it a lot easier to do that.

Brad:
One of my other favorite tools that any newbie can use is a Chrome extension called ChatTube. You don’t have to use the extension—I do, I pay the $5 a month, but there’s a free version. This allows you to go to YouTube, and it creates a little chat window, like a ChatGPT window, on your YouTube videos. If you’re trying to learn something, I may pull up an hour-long lecture or video on something, and I just go to this ChatTube, and I go, summarize this. Create an outline of what I need to know. I don’t want to watch your whole hour video—just give me the good stuff. It’s a great way to learn things you haven’t learned. If people don’t understand how infinite banking works—because I know that this is one tool in your big tool chest of that people can use—I might go find a video on YouTube or ChatGPT and say, okay, I heard Tim and Olivia talking about this, but they didn’t do a great job of explaining it, which I know is not true because you guys are great at this, but I could say, give me a summary. What am I missing? They can start to ask questions of it, and then once it clicks and they need more help, say, hey guys, I finally grok it, I finally get it. Can you help me out? This is great.

Brad:
So there are just a few ways to really start to play with it. Once more than anything else, I would think of the five-bucket framework: thinking, creating, communicating, analyzing, and automating. Just write down what tasks you’re spending your most time on in each one of those buckets. Then you could either ask AI to help you find those, or you could call somebody like me, and I may be able to work with you to work through it. In fact, I’ve got a great freebie I’m happy to give away, which is I’ve got a perfect prompt formula or GPT. It will allow you to use a prompt that I built that helps you build better prompts. If you don’t know how to prompt, it lets you build better prompts. So if you go to acceleratedintelligence.perfectprompt, you’ll get—I’ll send you the information on there, and it’s just a really great shortcut to getting pretty good at this stuff.

Tim:
Appreciate that.

Brad:
Awesome.

Tim:
You’re a wealth of knowledge, and we appreciate you coming on today and sharing it with us and our listeners. How do people get in touch with you if they want to reach out?

Brad:
You can send me an email at [email protected]. That’s one of the best ways to reach me—just that’s my direct email. I’m happy to give you my direct phone number: 214-673-05N9. I’m not afraid to give that out for people—just, you know, I appreciate a text instead of a phone call. If there’s a way that I can potentially help you, answer the questions, I’ve got a lot of resources. The way that I work is both with education and implementation. So on the education side, I think of this as enablement. I’ll work with groups. I just launched a 12-week AI accelerator for entrepreneurs and executives, where every single week we do a 90-minute session, and we just kind of go over things like we’re talking about now. We go over all these buckets, we do workflows together in a group setting. I’ll also work with people one-on-one, much like I worked with you guys, where we do just dedicated two-hour sessions every week, typically, where we’ll do implementation sprints. We’ll find out what are the things you need to do, and we’ll work on them together. Sometimes, if you need—sometimes it’s just saying, look, go use this software, or if you need other resources that I can’t provide, I’ve got a great Rolodex of resources. Then I also do corporate training. Sometimes a company will bring me in to do a one- or two-day workshop or a keynote speech, trying to really enable their people to understand how to use this and create a culture of innovation from the high level to the low level. Once in a while, customers want some custom development, new tools, chatbots, this, that, and the other, automations, and that’s something we can also help with as well. The first part, though, is just really wrapping your head around what’s possible.

Tim:
Yeah, and we’ll have all that information in our show notes. I could speak firsthand—Brad is great to work with and is certainly great at opening your mind as to what’s possible using AI and simplifying it in a way that it’s easy to digest. It’s not like he’s just prompting ChatGPT while you’re on the call. He’s telling you exactly his thought process as he’s going through it. It’s a great way to dip your toes in and get a lot of impact in a small amount of time.

Olivia:
Yeah, it’s a wealth of knowledge and more so an incredible guide on our technology journey, for sure.

Brad:
It means the world to hear you both say that, especially after working with you. It’s fantastic. I appreciate it. It’s been a pleasure.

Tim:
Thank you so much for joining us today, and check out the show notes for the freebies and to get in contact with Brad.

Olivia:
Thanks so much, Brad.

Financial Strategies to Benefit From Inflation

In today’s economy, the reality is that our dollar is never going to be worth more than it is today. Inflation acts as a stealth tax, eroding the purchasing power of your money over time. In this post, we’ll explore how to regain control of your money and position yourself to take advantage of inflation rather than becoming its victim.

Inflation has surged by 18.6% over the past three years. To put that into perspective, something that cost $100 three years ago now costs $118.60. This means your money will never be worth more than it is today. Consider this: if you buried $10,000 in your backyard and dug it up 10 years later, it would still be $10,000, but its purchasing power would have significantly diminished.

The most valuable dollar you own is the one you have today. When you maintain control of your money, you can position yourself to benefit from inflation rather than fall prey to it. Having access to liquid money opens up opportunities that wouldn’t be available if your funds were locked away.

Three Strategies to Regain Control of Your Money

  1. Opt for a 30-Year Mortgage:
    Instead of focusing on paying less interest with a 15-year mortgage, choose a 30-year mortgage to prioritize cash flow over interest rate. This approach allows you to keep more of your money under your control.
  2. Avoid Extra Payments on Your Mortgage:
    If you have a 30-year mortgage, resist the urge to make extra payments. Use that money to build a pool of cash that you own and control. This will give you more flexibility and options in the future.
  3. Limit Retirement Contributions to the Employer Match:
    Contribute to your retirement account only up to the employer match. There’s no guarantee that the dollars you contribute today will have the same buying power when you withdraw them in retirement. Instead, focus on maintaining control of your money now, when it’s most valuable.

If you have high-interest credit card debt, it’s wise to prioritize paying it down before making excess contributions to retirement accounts. High-interest debt can erode your financial stability, so focus on controlling your cash flow and eliminating debt before locking away funds in retirement accounts.

By implementing these strategies, you can regain control of your money and your life. Remember, whoever controls your money controls your life. The more control you have, the more financially free you will be, with options and opportunities at your fingertips.

If you’d like to learn more about how we can help you regain control of your finances, visit our website at tier1capital.com to schedule a free strategy session. Remember, it’s not how much money you make but how much money you keep that really matters.

How to Get the Most Out of Your Income: Proven Strategies for Financial Control

A lot of people come to us feeling frustrated and stuck. They’re earning a good income—whether it’s from a job or a business—yet they don’t feel financially free. Whether their income is $100,000 or $500,000, the feeling is the same. This frustration stems not from how much they make, but from how they’re using their money. And that’s exactly what we’re going to talk about today—how to get the most out of your income.

The biggest issue most people think they’re struggling with is that they’re not earning enough. But in reality, regardless of how much income they make or revenue they generate, it’s how they’re using their money that’s the real problem. Specifically, it’s how they’ve been conditioned to use their money in ways that are actually detrimental to them, their families, and their businesses. Instead, their current approach benefits financial institutions, large corporations, and the government.

Think about it—when you rack up credit card debt, it’s natural to want to get it under control. Credit card interest rates are sky-high. I recently received a letter from my Macy’s card stating that the APR was increasing to 35%. Fortunately, I don’t have a balance on that card, but imagine if you did. It makes perfect sense to want to pay that off as soon as possible. Or consider your mortgage—maybe you’re tired of that monthly bill and want to eliminate it, so you start funneling all your extra cash toward paying it off.

But here’s the counterintuitive part: the first step to regaining control of your finances is not to focus on eliminating those debts immediately, but to create a pool of money that you own and control. Secure your financial future first, before everyone else’s.

Stop Giving Away Control

The first step is to stop giving away control of your money. Once you’ve done that, you can redirect the money you were using to pay down debt toward building your pool of capital. When that pool gets large enough, you can borrow against it, pay interest back to it, and regain control of your financial future.

Yes, it’s admirable to want to get out of debt, but the strategies most people use to get out of debt are actually preventing them from getting ahead financially.

Build Your Pool of Cash First

Initially, you’ll need to cut back on expenses to start building that pool of cash. This can feel uncomfortable, especially when you’re already paying interest on your debts. But by taking this step now—by enduring that discomfort—you’re setting yourself up for a safer financial future. You’re creating opportunities and making decisions that prevent you from getting backed into a corner again.

It’s important to remember that this is a long-term process, not instant gratification. In today’s world, we all want immediate results. It might seem like a quick win to pay off a credit card balance, but then you no longer have access to that money. When an unexpected expense comes up, you’re forced to rely on credit again. It’s a vicious cycle—getting out of debt only to get back into debt. The question is, are you making any real progress?

The Power of Financial Independence

One of the most powerful aspects of building your pool of money is that it gives you options. You don’t have to self-finance every purchase just because you have the cash. If there’s a better financing option available, you can take advantage of it. The key is having the choice. Having the option to either self-finance or use someone else’s money is what financial independence is all about.

If you’re ready to take the first step toward financial freedom and want to learn more about how we put this process to work for our clients, schedule your free strategy session today or check our free webinar on out website.

Remember, it’s not how much money you make—it’s how much money you keep that really matters. Take control of your financial future today.