Arguing to 100 – Episode 466

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[00:01] Welcome to the Prosperity Podcast. Hello. Welcome to the Prosperity Podcast. And we’re going to be talking about arguing and I know we’re not going to get into a fight today. We’re going to redefine it. So do we both agree we’re not going to fight, but we’re actually going to talk about arguing? It’s a deal. I can argue about arguing. Okay. Good. That, that is, that’s a great way of putting it. So you, um, did some research and found this topic and it’s not one of those topics that just fill in your lap, but you grabbed it from a book, which then came from other people’s suggestions. I think that’s how always the best stuff happens. So let’s break it down, Kim. Well, and what’s extra fun about it is that the book has nothing

[00:46] to do with my business at all. And yet immediately as I was reading the book, I thought, oh my gosh, this applies so well. But beyond that, it applies to so many things in life when we are trying to speak with somebody in an area where there may be disagreement. Okay. So a lot of people call that arguing, you know, you could call it friendly arguing or battling it out, you know, whichever way you want to look at it, the fact is that there are a lot of times in our life where we’re wanting to impart information to somebody that has a different point of view and so this concept came from Alex Epstein in his book, Fossil Future and his, I don’t know the exact title of the book, but it’s basically how to look at the oil and gas industry from a human

[01:43] flourishing standpoint and it’s a tomb of a book and in the back under chapter 11, he addresses this idea that he calls arguing to 100. And as I said, I loved it immediately. I was so excited to be able to make use of it. And I’m so grateful to get to talk it through with you today, Spencer, because I literally just learned about this about a week ago. And as we know, it takes sometimes talking through something that you’ve learned three or four times to really learn all that you need to learn about that. So I’m grateful to you. I’m grateful to our listeners that are willing to listen to you and me learn about this idea of are you into a hundred? Perfect. Well, this will be fun. I think one setting the stage, Alex is up against, you know, the

[02:38] thousand pound gorilla, him taking on that climate and the fossil fuel industry, and then I think if we look at that and anything that we are trying to do, be it specific in your use case, talking about the ability of using the life insurance in our lives is one of those arguments that most people on the street can’t even fathom us. So you have to work from a framework. So let’s unpack and say, what’s the framework that you gathered from arguing to a hundred, and then we’ll dive into the little pieces. I think the first part of the framework specific to the life insurance industry, because most people that are listening to our podcast have that as a commonality is that the life insurance product itself has essentially two accounts.

[03:30] It’s the cash value account, which is an asset. So that’s framework number one. It’s so easy to continue to fall back into thinking of the life insurance just as an expense. And then framework two is the account two, if you will, which, you know, really just builds onto the same framework. So I apologize. It’s not framework two, account two is the death benefit. And as we all know, death is a guaranteed event. Consequently, that death benefit is absolutely positively going to come into your family’s life at some time in a tax-free format. And so those two accounts together are so valuable and people so easily slip back to essentially the opposite of arguing to 100, which in this case would be to talk about both the cash value and the death benefit and

[04:24] its use as an asset. And what we do is we slip back. We forget about the death benefit because we’ve been so convinced by the YouTube fashionalities that cash value is the only thing. And we slip back into old thinking, which calls all insurance and expense. And it’s understandable for all insurance, but it’s incorrect for life insurance. So you’re looking at it and, and you’re having to first, I think, um, you have to get on the same page of language and that’s really intentional. So using language, you know, and you’re, you do this all the time on your, in your training and working with clients, the language of simple as traditional versus typical, the language of understanding, you know,

[05:08] we’ve had recently an episode that did really well about 15 year versus 30 year mortgages, and so the language of understanding and comparing correctly. And then the opposition is, could be the stuff we see on YouTube or the things that Dave Ramsey may say, or other people like that. And so you have to pull that together. So how do you do it, Kev? Show us your method. Well, uh, thankfully it’s, you know, like all things that look so easy. Now it’s because I’ve been working with it for 30 years and I’ve had Todd Langford’s truth concepts calculators prove it for 30 years and 14 different ways, and it just is one of those things that over time becomes so natural and normal to me that then you start to back up and you start

[06:00] to observe conversations that, for example, I might be having with a client and yet I still make mistakes too. I did it the other day. I let a client get off the framework of what we just discussed, where it’s an asset, it’s death benefit is valuable and get mired in the muck of the internal rate of return. And believe me, I can go down that path in half a second because I have the calculators that prove the internal rate of return is awesome compared to any other place to store cash. But the problem was it was causing confusion in the client’s minds because the framework was now basically the wrong framework. We were looking at it as an expense, as an internal only, not the equivalent rate of return.

[06:44] So like, just to put some quick numbers on this, inspirator returns were around 4%, but the equivalent rate of return is close to six and a half for seven. When you talk about the inclusion of the death benefit, the fact that the cash value growth is not taxed, et cetera. And so that is, it’s that the problem is so easy to fall into areas of understanding that we think we have, that we then forget about and cause somebody else to enable us to derail. And in Alex’s book, as he talks about this idea of arguing to 100, basically the opposite of that is arguing to zero. And so in this example, arguing to zero is back and forth around the internal rate of return of the cash value and, oh, you know, the

[07:33] breakeven point and cash value is only doing this and this cash value is that, and this policy doesn’t have as much cash value as that policy, et cetera. That’s a lose argument. That is arguing to zero. That is a race to the bottom. And I know we’ve talked about race to the bottom before on our podcasts, whereas arguing to 100 is lifting the whole thing up and including all those other elements, the tax-free death benefit, the tax-deferred cash value growth, the fact that the death benefit is guaranteed, you know, all those, and, you know, the fact that it’s an asset, the fact that life insurance benefits all other assets. That’s another element of arguing to 100 is it doesn’t matter what other

[08:17] asset you have, if you have life insurance to go with it. It enables that asset, the first asset to be benefited by the second asset, the life insurance. And so that is arguing to 100. That’s an example of it. Yeah. That’s really well put. You know, you mentioned in there when you can get derailed, then it can, you know, just talking about, you know, rates of return, then you’re arguing to zero at that point. And the outcome, the result of that is that more likely one person’s going to feel like they were right. And one person is going to feel like they’re frustrated. We’ll use that. Now, Alex in his book, he’s using a moral framework. And I think what happens is before we jump into the moral piece, we have

[09:06] to be really clear in our thinking that when someone’s arguing, we can sometimes be the fish instead of the fishermen and we can get hooked. You know, I’ve seen it where people, my kids will try this. And it’s like, Whoa, hold on. Like we don’t need to go down this path and be really careful. So like if you, as a listener, if you’ve moved forward and set up this life insurance policy and you’ve done the hard work that we’ve talked about, don’t let people pull you off track because that can happen. And now they’re going to pull you into their world. So the moral superiority, let’s talk of that for a sec. Well, it’s interesting picking up on the numbers that I spoke of earlier. So life insurance often gets compared to investments.

[09:57] And even though we absolutely should not ever compare it to investment, it’s a common one to do. And then of course, when you have the index universal life, people talking about how there is some pretend because it isn’t real. Protection at zero. So earlier I mentioned 100 to zero when in actuality, the comparison that well should be speaking of if they want to bring that forth, the investment world forth is negative 100. And Alex talks about this in his book, not in the same way that I am speaking of it now, because he brings in the moral aspect of negative 100. In other words, what are all the things that could go wrong with whatever the subject matter is that you’re speaking of? Well, when you look at investments and investment that goes wrong is not at

[10:56] zero and investment that goes wrong is at negative 100 and truly that is the only thing that investment people can guarantee. I mean, you have some exceptions, you know, somebody has a debt insurance and they’re guaranteed 5%. Then, okay, fine. That’s what they’re guaranteed. But I don’t know about you, Spencer, but if you looked at your long list of investments, not life insurance, right? But your investments, do many of them have guarantees? No, very few. Very few. And so what they could guarantee if you look at your list of investments is literally 100% loss. Like it’s not a zero. And so that moral standpoint of investments can go to negative 100. I realize you’ve done good research. I realize your list of investments is awesome.

[11:48] You know, I’m speaking generically now. I realize you have all this upside opportunity and the fact is they could go to negative 100 and so on the other side of the table, because life insurance does have a guarantee and it is also attached to a guaranteed event called death. So kind of two guarantees and really a third because the premium’s guaranteed as well, so you have guaranteed growth. You have guaranteed growth of cash value. You have guaranteed premium payments that never change and then the guaranteed death benefit. And I remember early on in the business when I was learning all this stuff, I would roll my eyes at that kind of commentary. Like, yeah, whatever, guaranteed premium. That doesn’t really mean anything.

[12:30] Oh, yes, it does. Now that 30 years have gone by and I’ve witnessed premiums that have not been guaranteed. I’ve seen what happens when there’s not a guaranteed cash value. I have been on the other end of the phone call where the client says about a policy that I did not help them with, but they were turning to be for help. What do I do with this? It’s imploding. It’s falling apart from the inside. And holy cow, Spencer, to bring this full circle to your last question of me, you want to talk about a moral issue? That’s about as moral as it can get when somebody thinks that life insurance is going to be there for them. And it’s not because it was not sold properly. It was not understood at the beginning and it does not have the guarantees.

[13:19] Yeah, absolutely. You know, what you mentioned, there was actually two thoughts in there. Okay. Three, three thoughts. Is there one more guarantee in there, which is the tax piece? Yes, it is not taxed. Well said. There’s another guarantee. Yep. And that’s in our current state that is increasingly becoming more and more important. Now, the next is this. The problem of this that we’re speaking about may seem very small at the beginning, meaning when someone’s young and setting up these policies, if they make small mistakes, they’re huge outcomes at the end. As you’ve just mentioned, meaning not doing it properly. You’ve met with people, I imagine they’re 50s, 60s. And they say, wait, the last 30 years, like this was all wrong.

[14:13] And you have to be the bearer of bad news. I’m the messenger breaks my heart when that happens. Absolutely. The last is in the argument from zero to 100. I was thinking about the new style of arguments that happens in our world, which is taking quote unquote, the moral high ground, which so if someone doesn’t do well in life, meaning like they don’t land the job they want, or they didn’t save enough or invest enough, they go, well, money’s not really that important to me. You know what I mean? That’s, that is the skewed way of arguing. And we’ll hear that happen often. So for you as a trusted advisor, we’ll call it that way, someone that, and I’m using the word trusted advisor, because you have to take the mistakes

[15:08] that people made years ago and you have to give them the truth. You have to take the arguments that people may want to have on numbers and you have to give them the truth. How can you do that with the way that is also thinking in the lens of prosperity? And I think that would wrap up question. It is a great question. And I think frankly, it is laying things out as simply as possible and then giving them a way forward. And I’ll admit it’s pretty rare that I can’t find at least some way forward. Even if really the way forward is to do nothing, then that’s still a way forward because it’s clarity. And I love nothing more than to simplify somebody’s situation and give them clarity. And it’s thankfully, I believe a God given talent that I have, because

[16:07] I’ve been told that for a long time and I am always happy to do that for people, even if I get nothing out of it, just the knowledge that I’ve simplified the situation, given them clarity and a step forward, a path forward is so valuable. And I always actually, what I get is a Google review. That’s always what I asked for. If I can help them financially and yet I’ve helped them get some clarity, then I asked for a Google review. So it’s a joy to do that because people are always grateful and we know in this world that does good. That’s awesome. So I think the wrap-up phrase that I have in my head is arguing to clarity because that’s what you get to help do and doesn’t matter if they’re not ready to handle the truth, at least you’ve helped them

[16:59] understand what the truth is and give some clarity towards that next step. And most people come around and others that don’t, that’s okay. It is okay. And I think that’s a really big part of it too, is to go into every meeting, completely unattached from the outcome and let it be what it is. And when people get that sense, because you don’t have to say anything, that’s more about how you are being during the meeting, then they’re free to make their own decision and go on and develop their own path to prosperity in their own way, either with or without me, and both are fine. Fun episode. Thanks for sharing this framework, Kim. Absolutely. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit

[17:58] us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.