The Great American Senior Show

Sarry Ibriham Explains Banking on Yourself and Why Seniors May Benefit

December 08, 2022 Sam Yates Season 2 Episode 90
The Great American Senior Show
Sarry Ibriham Explains Banking on Yourself and Why Seniors May Benefit
Show Notes Transcript

If you have not heard the term Bank on Yourself lately, odds are you will be hearing more about it in the very near future. While there is renewed interest in the financial actions leading to the Bank on Yourself practice, the practice itself is tried and true with proven results.

The Great American Senior Show's grey-haired host, Sam Yates, caught up with one of the leading experts in Bank on Yourself and Infinite Banking, Sarry Ibrahim, to get the inside story on why this fine-tuned financial practice is gaining a powerful following with seniors and others looking for financial stability in our uncertain financial times. 

Sam Yates:

Hello, everyone, and welcome to another exciting edition of The Great American Senior Show. I'm your grey haired host, Sam Yates. And today, we're going to talk about something that you can take to the bank. Well, let me rephrase that a little bit. When I say rephrase, and bank, there's some key words there. When I am listening to podcasts, and I listen to podcasts, from all over the country, or I hear something from one of the companies that would like a guest to appear on my program, I listened very intensely to see if there is something that jumps out and would make our guest on The Great American Senior show and the other podcast that we do pay attention. And that phrase, bank on yourself was something that caught my attention. So I have the expert to talk about that topic and a few other things with me today. Sarry Ibrahim. Sarry, welcome to the program. Before we get into banking on yourself, tell us about yourself.

Sarry Ibrahim:

Hi, Sam, thank you so much for having me on. I appreciate it. It's a pleasure to be here and speak to you in the audience today. So a little bit about me, I'm from Chicago, Illinois, born and raised here. And I run a company called financial asset protection. So we're a full service financial services firm, we help clients in all 50 states, we even do some international things. With financial planning, we try to take the role more as like a financial coach, in that we work with clients of all backgrounds and try to help them reach their financial goals, whatever those goals might be. I've been in this in this industry for about seven years now. And love it, I definitely see myself in this long term. And we also have a podcast called thinking like a bank to the podcast, as you can probably tell from it. It's a financial podcast, a financial literacy podcast, that shows people how to think like a bank. And that's kind of the brand we're trying to build is the thinking like a bank brand, and showing people how to not just think like retail consumers or retail investors, but to really take the thinking of a bank.

Sam Yates:

I think that is a concept that is really coming to the forefront now. But it is a concept that also has been around a while.

Sarry Ibrahim:

Absolutely, yeah, it's been around actually, probably for over 100 years. So it's something that we didn't invent this right, this has been around for a really long time. It just became more popular recently with podcasting, and books and Amazon and things like that. And information being more easily accessible. Nowadays, it's been becoming more of a relevant topic. People usually know it as infinite banking or the bank on yourself concept. So really, I would say the first introduction to it was in the book becoming your own banker by Nelson Nash. So Nelson Nash wrote the book, becoming your own banker, and he talks about the strategy of using the vehicle we're going to talk about, as far as becoming your own source of financing, growing your business, investing in real estate, kind of taking control of your financial world, and not just leaving it up to the banks.

Sam Yates:

And I think that is something that's going to really capture the attention of our audience. So before I forget, How may people get in touch with you? Because they're going to be jotting down some notes. And if we don't let them know, now, we might, we might lose them a little later on the program. How can they get in touch with you?

Sarry Ibrahim:

Yeah, easiest way thinking like a bank.com. Thinking like a bank.com.

Sam Yates:

And being in Chicago, you're on Central time, but they can reach out and schedule a meeting or an appointment with you pretty much anytime.

Sarry Ibrahim:

Yeah, anytime they can reach out schedule an appointment, they can send me an email, connect with me on LinkedIn, all of that as Senator through thinking like a bank.com.

Sam Yates:

Who's your audience, when we talk about anything financial, no matter what you're doing? You have an audience. So who's your target audience,

Sarry Ibrahim:

your target audience? Good question. It's business owners and real estate investors, I guess every real estate investors in essence of business owner as well. So looking for real estate, investors, business owners, and also full time employees who want to venture off they want to kind of create their own retirement plan, not just rely on their company, 401 k plan or their company, 403 big plan, but somebody who really wants to kind of step outside the parameters of the corporate life and really want to look at passive income and wealth accumulation outside of their job.

Sam Yates:

As you say that, it sounds like you're also advocating that people don't necessarily go to the bank and get caught up in. I like to call it banking chaos. Yeah.

Sarry Ibrahim:

Yeah, absolutely. Yeah. Bank something for the most part tend to be helpful, right? It's convenient. You could go somewhere, put your money somewhere. And then when you want to access that you could write a check. You can go there, you can withdraw money. It's convenient, I get it. But there are certain things that banks do that I'm not really I don't really like for example, you go to the bank, you deposit let's just say $1,000 in it. A bank account, and then they turn around and then they loan that out to other people through credit cards and all types of interest loans, high interest loans, and you get nothing for usually checking accounts will give you anything, right. And then even savings accounts are, you know, a fraction of a percent. I work with a lot of my a lot of my clients are Medicare beneficiaries, they have Medicare, and one of my clients is, like 75 years old, and he told me he's like, you know, he's like, the world is different. Now. He's like, when in 1980, I used to make 25% interest on on one of my CDs. And I'm like, yeah, that those days don't exist anymore. So there's been a lot of shifting as far as it's not, it's almost like it's not a it's not fear it you know, the way we put money in the bank, and then what banks do with money. So I want to kind of revolutionize that change, though, in the sense where we could do a little bit more now, we'll still need banks, right? We'll still need banks to transfer money and use debit card and credit cards and things like that. But as far as who, where the interest goes, we should refund all that back into our pocket, we become our own source of finance, and we become our own bank, in essence. Yep.

Sam Yates:

And I'm glad that you narrowed it down into the banking community, don't get me started on the stocks and bonds traders that use your money and that were those there's, there's a whole different ballgame of where your money goes then and how it's being used before it is back in your control. But when we talk about growing your assets, you know, I run into a lot of seniors that they're very tight lipped about talking about their assets. Is that something that you recommend that we keep a tight lip on? What we are doing with our assets? Yeah, it's

Sarry Ibrahim:

a good question. So I think a lot of people are worried about people suing them, right. And people finding out the type of assets you own, because a lot of people might have like investment properties, or businesses or stocks or bonds, or any type of asset, either tangible or financial, or any type of asset, they'll usually have them in, if they've done a good asset protection plan. And like LLCs, and trusts and things like that, not necessarily in their name. So when they tell people what those trusts are cold, or what those LLCs are called, they kind of gives away, it kind of defeats the purpose of, of doing that whole asset protection plan. And if you're already has done this already reaching out to attorneys and do asset protection and estate planning, they're really expensive. They charge a lot of money, because it's a very complex thing, it's a very labor intensive thing to do. It requires a lot of hours of research. And so that's also a very niche part of the law. Right? It's not like any attorney down the street from you can just do all these types of things. It's like a specialist. So when people invest in these, they kind of want to keep it that way. So they don't defeat the purpose of telling people the names or the LLC is the names of their trusts and, and things like that. So it's definitely an asset protection mechanism for sure.

Sam Yates:

And the reason I mentioned that is because I'm headquartered in Florida, but here in Florida, we do have certain asset protections in place through our homestead exemptions and other things that can have your home can't be touched. Well, technically, it can. But those are some very important things that we see. And I think an enormous amount of LLCs in Florida, perhaps is compared to other states. Yeah. How it probably for that very same reason.

Sarry Ibrahim:

Yeah, absolutely. Yeah, for sure. Florida, I think is arguably the best state in the country. As far as asset protection and the home, the home set one being the best one. This is why you hear about celebrities who build $50 million mansions in Florida, it's it's entirely for the most part, it's all protected. I'm not an attorney, so don't quote me on this, but it's it for the most part it is it's the best state for asset protection, pensions, annuities, cash value, whole life insurance, all these things are protected in the state of Florida. And then also that's the reason why there's a lot of companies located in Florida, I think second to Florida maybe is Delaware. Right. So double a Delaware corporation is usually has a lot of high asset protection. But as far as real estate goes, and the reason why a lot of companies are located in Florida other than the fact to there's no state, I think there's no state income tax right in Florida. That also makes a big difference too. So one thing I've noticed when it comes to proper filing financial planning and financial strategies is the connection between asset protection, taxes and the ability to grow wealth, regardless of the market. And so those kind of all three of those things kind of intertwine together. So, usually, it's not like you take care of one only it's usually like you're trying to take care of all those things. You're trying to mitigate taxes, protect your assets from creditors and other risks and grow your money regardless of how the market does not just have to rely on how the stock market does.

Sam Yates:

When we think about growing our money, when we grow anything, it takes a tool or a set of tools So what are the tools that go into play with what you're talking about? What are your giftings?

Sarry Ibrahim:

Yeah, good question. Yes. So there's a lot of tools, right? So look at the people that who is number one at the top of it. So the who you're working with, I'd want to have everyone out there a CPA, right and accountant, at one attorney, maybe a few attorneys that specialize in different things. Like I, we just talked about trusts and asset protection. And then as well as like corporate things, if you own businesses, and you're selling businesses and things like that. And then also like a financial advisor, financial planner, or financial coach, somebody kind of stepping outside of what the accounting and the what the lawyers because lawyers and accountants, for the most part, they might know everything about a retirement plan, but not necessarily how to recommend it to you. That's not necessarily their job. They know the technical parts of it. But as far as recommending it to you, it's kind of outside usually outside of the scope unless they have training in that area as well. So I'd want the WHO up there to be the top of it, right. And then after that, you know, there's all types of vehicles right, like one of the strategies, we use the bank on yourself strategy, that's a that's a tool we use, in that it uses cash value whole life insurance to do a lot of things like protecting your assets, and growing your money tax tax free. And so there's some situations, and I think that's the way you position the question is really good, because it's, that's all it's about. It's about the tools, not necessarily what the product is called. I think a lot of people get caught up on that, like, I don't want to do a whole life insurance because this person said whole life insurance is not good. When we're too caught up on the title of it. What we need to do is we need to understand the function and what does it do? What how does it help you? How does it play out? So the who and the tools you're using? Absolutely, along with the whole life insurance? Well, I would also highly recommend some real estate in their portfolio and understanding how real estate both from the active inside active investing side as well as the passive investing side and that can get into further than that if you'd like.

Sam Yates:

Well, I think one of the things to reflect on about real estate is right now, we have seen some significant pendulum swings in the world of real estate, Florida somewhat protected. And I'm speaking a little bit from a background of being in many industries, including the building industry, that Florida's splurt is still doing well. But there are some areas some states that that real estate market has absolutely come around to bite them right in the wallet.

Sarry Ibrahim:

Yeah, 100%. Yeah, that's right. So I think the biggest downfall to real estate recently, over the last, I would say three or four months, and 2022 has just been the interest rates have gone up dramatically. I bought a house. Last year, our interest rates like everybody else at that time were low threes. Now I passed by a billboard on the highway, it was x 7.5%. So that big jump in the in the interest rates, that could lead to an extra 600 to $800 a month and principal and interest and interest payments only on your on your house. So that's going to deter a lot of people from buying because it's too expensive to borrow money. Plus, even more importantly, a lot of people can't qualify now, because as interest rates go up, the bar is raised now to qualify. And a lot of people who buy houses are barely able to they're coming up with the downpayment, they're maximizing the downpayment, they're maximizing the monthly payments, they're working with their lender to, you know, pay off credit cards refinance certain things to really get by. So when interest rates go up, it makes it even harder. But but that's in the residential mortgage area, I still think there's a whole nother world out there. And that's a commercial real estate. I think like for example, multifamily housing, where you have like 100 unit buildings, 200 unit buildings, I think that there's been an increase in those types of properties, because the demand for rent has gone up dramatically. Like, you probably talked a lot of people who can't even find a place to rent nowadays, like When has that ever existed where you can't even find like, even if you want it to rent somewhere, you can't even find that because of the demand for rentals going up. So from an investment standpoint, I think that still stands to be a good investment. I wouldn't buy like, you know, residential to live in right now. It's probably not that best, the best time for that. But as far as investing into multifamily housing and other asset classes, if anything is on the rise, even through a high interest environment. And I

Sam Yates:

think even in your particular area, I can think back to the days of the Cabrini Green redevelopment and some of the infield growth. One of my friends is pretty high up in the Masonic lodge there in Chicago, and one of their greatest decisions that it was a grave decision not just great was Where are we as Mason's going to invest our money now that Chicago is seeing such a massive amount of growth in particular, that multifamily multifamily sector so I think you're right on right on target, but a moment ago you were talking about whether or not you should consider being active or passive in So with that respect explained a little bit.

Sarry Ibrahim:

Yeah, absolutely. So a lot of people when they think of real estate, or they think of starting a business, they think of an active engagement, right? Like, you're gonna find the property, you're gonna find you're going to create the LLC, you're going to find the the contractors, and there's nothing wrong with that, there's all that's obviously a very lucrative thing to do, if you know what you're doing. But what about the people who don't have time for that, you don't have time to go out there and real estate, you can get into real estate, from a passive perspective, this is where the only thing you're responsible for is your share of the of the fund or your share of your investment you get that you're gonna allocate, and then agreeing to the terms and conditions of that deal. That's really all you have to do to be a passive investor, you want to do research, you want to consult with your attorney or accountant or financial adviser, you want to make sure it's a good fit for you. But really, you're not responsible for anything in the day to day operations, you're limited in the set, it's called also limited partners. So you're limited in the sense of your liability, and limited in the sense of the decisions you have to make, you actually don't have to make any decisions at all, for the most part, for the most part, being a limited partner. And I think that's really important because we get caught up in this world of, you know, entrepreneurship, where we're trying to build businesses and invest money. But we have to differentiate the active side from the passive side, because what's the point of owning more businesses owning more real estate, if you're just building up more, you're you're taking up more of your time, it kind of defeats the purpose of having a good standard of living having a happy life, if you're constantly working, I think we need to transition where we need to take the money that we're making, and from our previous days, and then push that into vehicles and things that will pay us forward, that will we can sustain our living our income, even increase our income to keep up with standard of living to keep up with inflation and taxes and things like that, without having to put in necessarily more hours and more time. And, and that's usually done through vehicles using vehicles using real estate using assets that pay that cash flow that pay you on. So that's something that would kind of differentiate really is the difference between active investing and passive investing, and then even figure out a way to take from the active side, because everybody has to work, you have to work for money, but you take from that, and then you put it into passive things that'll pay forward.

Sam Yates:

Or as some of my friends call it mailbox money, who?

Sarry Ibrahim:

Yeah, yeah, I've heard Sam, I've heard from so many people that they've made, you know, millions of dollars working in companies and running their own businesses actively engaged in a working 6070 hours a week. And then they started doing some passive income, and whether it was writing a book or something, and then they literally get like a check in the mail for 10 or $15 a month for for example. And they that's when they feel the wealthiest, not when they were making a million dollars a year before they because they were actively engaged in money. But when you're making money without working for it necessarily. It's a different feeling. It's a different type of money.

Sam Yates:

And it's funny that you say it, because that is my friends. You know, they they're making some money, but you know, I'm looking at it. And I was like, Are you kidding me? Why don't you get out there and come work with me or something, we'll make some money. And I don't know, I don't have to do anything to make this. So it's really that joy that they get up? Hey, it's just coming on Coming on into my mailbox. So that's, that's a nice feeling. What about our seniors? You said that you you have some clients within that senior sector? Yes. They're living longer? How does that impact what you are advocating? And I guess I'm gonna back off and say you're not advocating because that would be offering decisions of you do this, or you can choose A or B and I from what I'm hearing, yours is not necessarily pick one of these. But this or, and it's a combination.

Sarry Ibrahim:

Combination. Exactly. It has to be combination, it has to be different things. And, you know, one thing I would look at is the risk of when you when you live longer. That's good, right, from a health perspective, from a family perspective. But from a financial perspective, it's a risk. You know, this is where the the terms annuity, an annuity comes in, right. And annuity is insurance against living longer. So you it's a there's a risk involved with living longer, because the longer you live, the more you have to spend. What if you? What if you've you budgeted your retirement to live until age 85. And here you are, you're 90 years old, what happened in the last five years, you've had to deplete accounts, you've had to get support from the family? What if you could hedge against that type of risk, and one of the ways to do so is through annuities. Now, I'm not advocating annuities, because you have to really understand them. There's, there's certainly, they're very important, it's very important to understand how annuities work. But one of the advantages to it is you can set it up so that way you never run out of money, you're always getting your monthly checks coming in. And then you can even set it up so that way it increases every year because of inflation. It's going to go up every year. And you can even set it up to the point where regardless of how long you live, you'll always see that increase and then set it up so that way your spouse or your beneficiary will also see that increase to they'll get like it's like a pension where somebody is getting income, they pass away and it goes to the spouse and then the spouse keeps getting paid Come, you can set it up, set it up that way, Social Security Osint is an annuity. It's a national federal annuity, that everybody pays into it from your jobs from Social Security taxes, it goes into an account. And then from that account people when they either 62 or 65, or 67 Get back money from that. So in essence, it's an annuity. So you want your own annuity right, still, obviously, still gonna get Social Security, you're still gonna get you might have a company pension plan, or 401k, I would also add in an annuity, just to so you can always have that increase in income coming in, and you mitigate against the risk of living too long.

Sam Yates:

Now, that begs the question, as you're looking at doing something with funds, and looking forward to a life at some point where you're not necessarily going to be working as actively or or maybe you will, when should one start?

Sarry Ibrahim:

Yes, sir. So there, I would, I would really, I would recommend never to defer it to the future, right? Whether you are 30 years old, it now's the time to do so. And whether you're seven years old, now's the time to do so. So really, it's because there's so many different aspects to planning, and then retirement planning and financial planning, that each stage requires some sort of analysis, right? When you're 30 years old, it's good, because you have the next 40 years to work for, you know, for example, if it's 70, you're good, because you probably accumulated money during your life or some sort of ask, even if you don't have that much liquidity that much cash somewhere, or in cash flow, you've probably accumulated assets in some sort of way. So really, I would, I would, I would do a plan as soon as possible I'd want I'd focus on the who's the accountant, the lawyer, the financial advisor, or anybody else, who you look at as the who, in your portfolio. A lot of when you hear a lot about stories of entrepreneurs and people who started a lot of great companies and you ask them, you know, what, how did you do this? They would say the first step is they got the WHO involved there, who Robert Kiyosaki talks a lot about this in his book, you want to gather your team, you know, your team of professionals, and, you know, you can in the business world, you can be cheap with everything, except for the professionals around you, you know, you want to best invest in those people. So, so yeah, definitely, I would do it as soon as possible, start working on your team, and then started looking into this, there's a lot to learn, right is a lot of self education involved, as you could tell, like pot and listen to podcasts like this, listen to our podcasts, reading books out there, there's a lot of content to consume about the strategies and, and these things that are mentioned.

Sam Yates:

I know that we mentioned your contact information earlier in the show, but I'm watching the clock. And I know that I want to make sure we don't go too much over what I like to budget for our listeners. Again, how can people get in touch with you?

Sarry Ibrahim:

Yeah, so thinking like a bank.com, thinking like a bank.com?

Sam Yates:

Before we wrap up, you basically touched on taxes very briefly. We were talking about homestead in Florida not having but the taxing situation that currently is in a little bit of a flux, or it could be as we go through different political parties. How important is it that you plan around some of the taxation problems or opportunities?

Sarry Ibrahim:

Yeah, 100 It's definitely it's something that should be on top of your list, right? I think that the tax code is designed to for you to understand it. And for you to replenish your money to invest in different places. Real estate is a big one. running businesses, operating businesses that deductions, depreciation on assets, there, it's already written out for people to use them. And I think that so So number one, it's meant for that we're not trying to find loopholes and try to, you know, not pay taxes, because we were trying to be sneaky. They it's actually the opposite is true. The government writes these things, Congress, the IRS, they write these things, so that people could entrepreneurs and real estate investors mostly could understand how these work and then use them to their advantage. So it makes a big deal. If you understand these taxes, taxes, you could save you know, in your life, I don't even know. Let's just say even if you were able to save 20% on taxes, I mean, that could that could be millions, for some people, you know, over the lifetime. If you consider year after year of paying taxes, it can mean the difference of having a proper tax and play could mean the difference of your children having a college education funded or not. Are you having to pay extra for that? And give me the difference? You know, building you're helping your church expand, leaving a legacy for your business for your grandkids. I mean, it's the minor things can make a huge difference, especially when you consider the time the time value of money and had them when you've been invested somewhere and growing rather than going to taxes. And again, it's meant for that, really, for proper tax planning. You need an Tony, a tax attorney, and you need a CPA or an enrolled agent to help you really kind of go through the different tax parts, the charitable parts, the deductions, depreciation, to really figure out a way to keep as much money as you can within your estate within your family over real life. But yeah, it makes a huge difference. It's it's up, that's the top two or three most important factors to your financial planning the tax part.

Sam Yates:

There were a lot of areas that we touched upon, there are still many that we did not touch upon. So I have to ask the question, can you come back for another appearance at some point in the near future?

Sarry Ibrahim:

I'd love to see him. Yeah, I'd love to write. And

Sam Yates:

ladies and gentlemen, I have to say that being in the broadcasting business and I still consider myself in the broadcasting business. It is rare that you are able to that I am able to sit down with someone and carry on a conversation and cover so much material that it's not a matter of extracting teeth or or just pulling the information out. I want to give you a compliment in front of the whole world that you are a conversationalist, and you know what the hell you're talking about. Thanks so much. Thank you. All right. We look forward to having you back again at some point in the future. In the meantime, I am Sam Yates, your gray haired host of The Great American Senior show. Have a great day everybody