Robert Kiyosaki loves Whole Life Insurance: The Secret Tool of the Wealthy

This article is a written adaptation of the video available on the Life180 YouTube channel.

Within this space, my aim is to unravel the secrets of the financial elite and disseminate them to leaders and influencers worldwide. My focus lies in providing them with the necessary tools to navigate the volatilities of the stock market and safeguard their wealth from unnecessary risks.

For this article, I want to talk about Robert Kiyosaki and how exciting it is that he has come out and endorsed cash value life insurance. Now, you may not see the excitement, you may not understand why it's so exciting yet, but I promise you will.

If you don't know who Robert Kiyosaki is, he is an international best-selling author, a real estate investor, a business coach, and he has personally mentored thousands of people to financial freedom throughout the world. He's made a huge impact on my life personally.

I've spent some time with him, read his books, and his book, Rich Dad, Poor Dad, had a profound impact at the start of my business career. One of the key teachings of Robert is that to become wealthy, one must think and act like the wealthy. Now, I understand that if you're into self-development, pushing yourself, or an entrepreneur, you've likely heard this countless times. The real question is, how do you do it?

Here, I'd like to delve into four key insights I've gleaned from conversations, studies, and research into the lives of some of history's most successful figures, as well as those thriving in today's economic landscape.

"You create wealth, you don't earn it!" - Robert Kiyosaki

The first point I want to share with you actually comes from Robert Kiyosaki himself. He emphasized that if you aspire to be wealthy, you must understand how to generate wealth, rather than simply relying on conventional employment: punching a time clock, collecting a paycheck, and receiving benefits. The stark reality is that 92% of Americans who adhere to this traditional system are unable to sustain their standard of living upon retirement.

And so, I present you with several questions: When you retire, do you envision taking a step backward? Do you aspire to lower your standard of living? Do you anticipate downsizing your house or limiting your ability to travel, perhaps missing out on opportunities to visit your grandkids across the country? If your answer is yes, then you can continue following the same path you're on.

However, if your answer is no, if you desire more than that, then it's imperative to contemplate the results that most individuals following conventional financial strategies achieve. Wealthy individuals comprehend this principle, which is why they refrain from following such methods.

“Only invest in what you know” - Warren Buffett

The second lesson, which I first heard from Warren Buffett, resonated deeply with me. He emphasized never investing in anything you don't understand. More significantly, he stressed the importance of investing only in things you truly comprehend.

Now, how well do you understand your 401(k)? How familiar are you with the mutual funds in which your money is invested? How much do you comprehend about P-E ratios for the stocks in your portfolio, or any related financial metrics? If your understanding is limited, I challenge you to consider that during the next financial correction, if you experience a significant loss in your accounts, the responsibility lies with you, not your advisor.

Let me make it clear, wealthy individuals grasp this concept well. That's why they prioritize the safety of their money, ensuring it's protected and safeguarded. They only invest in ventures they fully comprehend when the timing is right for them.

“Never tip up your money unnecessarily” - Warren Buffett

The third lesson I've learned is that you should never tie up your money unnecessarily. This highlights another issue with the retirement planning institution in this country and the system within which everyone operates.

It raises the question, how sensible is it to lock your money into an account for the next 30 years when you might need access to it for unforeseen circumstances or opportunities that arise in just a few years? It doesn't make much sense at all, yet that's precisely what most people are doing.

Currently, over 80% of retirement savings are funneled into qualified accounts, meaning you cannot access the funds until you reach the age of 59 and a half without incurring penalties and taxes.

Taxes are inevitable; you'll have to pay taxes on that money regardless. However, the reality is that taxes are likely to increase, or at least that's my belief. There's certainly not much room for them to decrease, considering various factors at play.

But the third lesson I've learned is never to tie up your money unnecessarily. Wealthy individuals understand this concept well, so they avoid putting their money into accounts that they can't access for 30 years, especially when they may need it for emergencies or business opportunities, such as real estate investments or other ventures that may arise suddenly.

Money is simply a tool - every self-made wealthy person in history

The fourth and overarching principle I've learned is that wealthy individuals understand that money is merely a tool. They don't allow themselves to become enslaved by money; instead, they view money as a servant, a tool to achieve their goals and desires.

Everything I've mentioned about 401(k)s, stocks, mutual funds, bonds, and so on, they're simply tools. All financial products serve as tools. The key is to start seeing financial products in this light. Not all tools are bad; it's just crucial to ensure you have the right tool for the job. How logical is it to bring a saw when you need a hammer, or to bring a drill when you need a saw? It doesn't make sense at all. You just need to ensure you have the appropriate tool for your specific situation.

The truth is, Robert Kiyosaki comprehends this concept well. The most successful and wealthiest individuals in the world understand that money is indeed a tool. Furthermore, a properly structured life insurance contract, more specifically, a whole life insurance contract, is the only vehicle that can guarantee that your desired outcomes will be achieved when you want them to occur, whether you're present to witness them or not.

Now, that might sound like a bold statement, but the reality is, it's absolutely true. There's a reason why these individuals are utilizing this strategy, and there's a reason why it's not widely known.

The reason for this is simple: individuals in the financial industry either aren't aware of it or prefer that you remain unaware, as if you did know, your funds wouldn't be directed into other investment vehicles, thereby reducing their ability to earn annual commissions from managing your money. This is a concept that the wealthy fully comprehend.

The wealthy grasp the concept of leveraging their money effectively. Now, let's delve into an example. I'll demonstrate how a 40-year-old individual can leverage $100,000 sitting in a money market account at a bank, earning a mere fraction of a percent in interest, essentially losing purchasing power each year.

Absolutely, it's crucial to remember that if inflation surpasses the interest you're earning, you're essentially losing money because the purchasing power of your funds diminishes over time.

So, let's consider the options for a 40-year-old with $100,000. They could leave the money in a bank account and gradually deplete it over time, a slow path to financial decline. Alternatively, they could invest it, taking on the risk of potentially losing a significant portion or even losing access to the funds altogether. Or, they could opt to place it into a properly structured whole life insurance contract. What are the benefits of this approach? Well, if they invest $100,000, after two years, they'll have access to 94% of that money.

Actually, in year one, when he makes the first deposit of $50,000 - because we're going to deposit the $100,000 in two installments into his contract - he'll have access to 90% after 30 days of placing the initial $50,000. That means he'll have liquidity of $45,000.

Then, after the second deposit in the second year, he'll have access to $94,000. So, over a two-year period, he only sacrifices 6% liquidity. However, look at all the benefits he receives: a one and a quarter million dollar death benefit. This means we all have people, families, business partners in our lives that we're doing this for, right? We want to leave the world better than we found it.

Let me emphasize this: if something were to happen to you tomorrow, or the next day, your family, especially if you're a business owner, will be vulnerable if you don't have the right protection in place. Without it, they'll be left struggling, unless you have a solid succession plan for your business.

This is the only way to ensure that if something were to happen to you tomorrow, they're protected, and wealth is created for them overnight.

On the flip side, if you live a long time, you still have access to the money to use for your business, to use as leverage to go where you want to go. On top of it, you get a 4% guaranteed rate of return on the money that you have left in the contract. That's 40 times higher than people are getting in the bank right now.

Benefits

And on top of that, you also receive disability coverage. Disability coverage acts as cash flow insurance, ensuring that if anything were to happen to you and you're unable to perform two of six activities of daily living, a majority of your income, your cash flow, will be covered. This ensures that you can maintain your dignity, preserve your lifestyle, and move forward without putting unnecessary stress on your family to take care of you.

Additionally, as we all age, the reality is that 70% of people will require some form of assisted living or care as they enter their elderly years. And with this contract, you have the flexibility to access some of the money if you reach that point in time without experiencing any catastrophes. This provides a safety net for you in case of unforeseen circumstances.

These are significant benefits that most people in the world don't comprehend how to utilize and leverage, but the wealthy do. This is precisely how the wealthy think. They understand how to take money, use it as a tool, leverage it, and achieve their goals.

They know how to maintain liquidity, use, and control of their money so they can access it in case of life opportunities, without facing penalties or taxes. This money will grow on a tax-deferred basis, and they can access it tax-free when needed.

There is no other tool on the face of the earth that offers these benefits. Wealthy individuals understand this concept, as Robert Kiyosaki often emphasizes, the "rich dad" way, as he calls it. This is something that every entrepreneur, every individual seeking to improve their life, their family's life, and their business's life should consider.

It provides greater security, guarantees in your finances, and more opportunities as you navigate your career or entrepreneurial journey. It empowers you with greater control over your decisions and your future.

So you're never beholden to anybody telling you what you can or can't do in your life. And so, like I said, just to recap, you're going to have more security, more guarantees, more opportunity, and more control with your money. Isn't that what you're looking for? I'm telling you, a properly structured whole life insurance contract is the only way to get there. I don't care what anybody tells you; those are the facts and the math backs it up. Anyone who wants to tell you otherwise is crazy.

If you have any questions, I hope this helped. I hope the information was helpful. There has never been a more important time than right now, with what's coming down the pipeline, to gain hold, to gain control, to grab a foothold of your financial position and make sure that you are structured properly.

Because in the next financial downturn, you're either going to be really stressed or you're going to be able to thrive and create a lot of opportunity and wealth for you, your family, and your business.

Please reach out if you have any questions. Until next time, live abundantly, live efficiently, live life 180.