In this episode of the Tactical Empire, Jeff Smith and Shawn Rider discuss strategies for thriving in a world that often imposes limitations. The conversation centers around balancing family activities with the non-traditional lifestyle of traveling and homeschooling, focusing on ensuring children's development through various sports and activities despite a lack of consistent structure. They then dive into the merits of high early cash value life insurance policies as a financial foundation. Jeff and Sean explain how these policies provide security and growth by allowing individuals to store and access money while earning uninterested growth. They explore the use cases of taking loans against the policy for investments such as real estate. The conversation covers strategies for managing and repaying these loans, the psychological comfort provided by these policies, and the importance of leveraging them to build and protect wealth. Both Jeff and Sean emphasize the significance of early adoption and strategic use of life insurance policies for financial stability and growth.
In this episode of the Tactical Empire podcast, Jeff Smith welcomes Shawn Rider for a discussion on leveraging high early cash value life insurance to build a robust financial foundation. They explore how this financial tool supports business growth, real estate investments, and family security. Sean shares his personal journey, including the initial reservations, strategic deployment during COVID-19, and his current plan for future investments. The conversation emphasizes the importance of having a dependable financial system, the psychological comfort it provides, and how it can be used for active and passive income. Jeff and Sean also discuss the importance of adapting your financial strategies over time and thinking big for long-term wealth creation.
00:00 Introduction to Tactical Empire
00:30 Meet Shawn Rider
00:55 Balancing Family and Travel
01:37 Kids and Organized Sports
06:06 Infinite Banking System
06:34 Jeff's Financial Journey
09:17 Wife's Perspective on Finances
11:12 Utilizing Life Insurance Loans
13:27 Real Estate Investments
18:23 Future Financial Strategies
27:54 Conclusion and Call to Action
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[00:00:00] How do you find the will to fight back against a world that wants to keep you sedated, averaging, stuck in place? Join us for the tools and strategies you need to create a life of abundance, discipline, and high achievement. This is the Tactical Empire, with Jeff Smith.
Jeff Smith: Welcome to another episode of the Tactical Empire. I am joined today by Sean Ryder. How are you, Sean? I
Shawn Rider: am good going to finish this podcast episode and sit down with my wife and go over some KPIs for our business. Then we're going to go pick up our kids together and come home. And then we got, uh, gymnastics night for the kids.
We do it one day a week. And that, that made me think of a question for you. I mean, I know you guys are traveling the country coming up on almost a year [00:01:00] and, uh, You guys are planning on doing that for a pretty long time. Your kids are super active. I see you guys taking walks. They're playing with 300 kids at a time some days.
How do you feel that you don't have your kids? This is such a weird question to ask, but like your kids aren't in anything that's quote organized in terms of sports or activities. Like I know there's probably things that they do at these, at these campgrounds, but it might be different. They're in a different place, which is really cool in and of itself, but there's no consistency within that.
What is your easy answer? Cause that's not today's podcast topic.
Jeff Smith: Yeah. Uh, I, we talk about that all the time. That comes up every year at couples planning. Um, like w as, as we do retrospectives, like, uh, my son wants to play football, so we're going to be putting him in, uh, Football in the fall. Um, so we will just have to stay in a [00:02:00] general area for six or eight weeks.
Luckily, he's young enough that it's not an all year thing. Um, we're going to a thing in March, uh, a meetup in March where they're doing sports camps. So he's going to go to camp for two weeks. Um, so there, there's going to be structure there with regards to sports. Uh, but. I mean, I, I struggle with it from time to time because I like played every sport growing up and uh, like that structure taught me a lot of lessons like in, in still that I utilize to this day.
Um, but, um, there's also a lot to be said about the independence of kind of their, what they're doing as well. Oh, they're getting, they're getting
Shawn Rider: different lessons. They're getting awesome lessons, I'm sure.
Jeff Smith: Yeah. I mean, the, the, the independence of free play and stuff like that. Um, I don't know. I mean, when I also didn't ever really want to be, I don't like the specialization of today's sports world, um, where [00:03:00] like your kids playing 150 baseball games a year and he's fucking nine years old.
Like I knew I never wanted any part of that. Um, like I just think that that's unnecessary. I mean, some of the best athletes in the world played like everything until they were, I don't know, mature 16, 17, 18. And then they were like, Oh, I like this. And then they focused on it and they were fucking great.
Um, so I don't know. I'm just, we kind of take a temperature on it pretty frequently. My girls have done, uh, they've all done gymnastics and everything else in the past. And, uh, they, they did aerial, which is like. Silks from the ceiling where your trapeze type stuff, um, which they really enjoyed, uh, that again, though, is not like team sports.
So, um, but there, there are certain ways to do it as far as like traveling and then homeschooling. You can be parts of, you can be part of like organized sports in [00:04:00] most states. I mean, Texas is where we domicile, so we would be able to play sports there if we wanted to. Um. With the school district, Florida's the same way.
And so, um, you, I don't know, we're just taking, I mean, they're young now. Our oldest is 12 and she doesn't wanna do anything right now that's organized. She's running on her own and she's super fast. And, uh, so I don't know. She could be across country runner or something 'cause she's super tall too and she's great at running.
But, uh. I don't know. We'll see. It's just something we keep our fingers on. I mean, we talk about them or talk with them about what their interests are and do they want to do stuff and things like that. And so far it's been like, they're happy doing what they're doing. And, uh, I mean, minus my son wanting to play football, like that, that's the one thing.
And we've solved that. Particular deal. Cause like there's a place called I nine sports. I don't know if they have it in Virginia. They definitely have it in Florida and Texas. And, uh, [00:05:00] what it is, is it just like recurring sports leagues, um, like throughout the year. So any, any time we want like a six week season, we can just look at a calendar and go to that area.
Like we've identified, we may play in Orlando in the fall. And, uh, and we just stay in that particular kind of vicinity. Where it's close enough to drive and stay there. And then they've got it set up. So it's like low barrier. Like you do you in soccer? I know for a fact you, you practice and then you play on the same day.
So it's all like. In a two hour time span you practice for 45 minutes or whatever then they break for 15 minutes and get ready And then they play a game and so it's not highly competitive, but he's eight years old So, I I don't know what we would expect or need I just need him to kind of get the fundamentals run around and listen to a coach.
That's what I want him to do
Shawn Rider: Sounds perfect. Yeah, I was thinking about that the other day because uh [00:06:00] Cause we're starting a new sports season here coming up and it made me think of, of your family. So awesome, man. Last episode, we got to learn a little bit about where you've come from in regards to higher early cash value life insurance, the foundation system to your portfolio, your infinite banking policies, creating your own family banking system.
We're going to flip the script and I'm going to let you ask questions and I will answer them. They may be some of the similar questions. They may be different questions. Who knows? But go ahead and take it away, Jeff. You ask, I answer. We'll see what happens.
Jeff Smith: Okay. Well, I, I think that I, I have been intimately involved with your high early cash value career, I would say.
Um, and so what, what were your, I liked starting the last one with reservations. So what were your reservations when I, like, what were your thoughts when I first brought this concept to you?
Shawn Rider: Well, I had asked. Right. You asked me what my problem was. I said, this is the first time we're sitting on capital. I, I know I don't [00:07:00] want it in the bank.
I don't want it in the stock market. I don't know what else to do. And you literally said, have you ever heard of overfunding a life insurance policy? Um, I said, no. And you literally air quotes here. If you're not on video, uh, taught it to me in less than five minutes. So my reservations would be like. You just gave me the cliff notes version, which at the end of the day, like it's a pretty simple system.
So I understand now in hindsight why you did that. But that did not, uh, that did not work for my brain when we're looking at the dollars that I was talking about. Um, and so. I didn't know what questions to ask, right? Of course, the simple response is, well, that sounds too good to be true. How can you put money in something that's earning a percentage?
You can borrow someone else's money against it, and they're going to charge you less than what you're earning. That doesn't make sense. So that was like the big broad stroke reservation [00:08:00] I had. I didn't understand how that was possible. Number one, number two. And you said this on your last episode was. I couldn't get past the thought that I had to commit air quotes again, commit to a number every year, essentially in perpetuity.
And I viewed that as an expense, not building an asset. So I really had to one, learn about the system, which again, we, anyone that's, that knows you and I and knows how that went down. Like I didn't open a policy for nine months, but I literally consumed. Almost every piece of content that's ever been probably created on higher early cash value, life insurance, and infinite banking.
I read the books. I watched YouTube. I remember my first daughter, my first child, my daughter was born and I'd be holding her as a newborn, trying to get her to go to sleep at night. And I'd be watching a Garrett Gunderson YouTube video trying to help me connect the dots. So that was my reservation. And it's funny on the backend now, cause like I can see why you [00:09:00] get frustrated at people that don't open these things quickly, because.
At the end of the day, it is a very simple system and I did not, I did not open it right away. So, uh, that was my greatest reservation, both broad stroke and micro level.
Jeff Smith: Okay. Okay. And then was your wife on board?
Shawn Rider: Um, my kudos to my wife. Uh, she just believes in me when it comes to finances. So she didn't really.
Care. Sure. I would try and explain it to her. She's like, I trust you to do what you feels in our best interest. Um, so luckily I didn't get screwed over by putting my money in these things or else she may not trust me as much as she does. So, um, she understands. It a little bit more now in regards to that's where we store money.
And then we use those things to acquire other things. Um, there have been times where, you know, when [00:10:00] we talk about money and I'm like, Hey, we have X amount of dollars of premiums coming up. And she'll be like, why are we paying for this? And I'm like, hard stop, we're not paying for anything. We're building.
Something that gives us all of these benefits as to why we've been able to do what we do. So, um, she, she certainly cannot explain it, but she does know that that's where we, we put funds.
Jeff Smith: The reason I ask is because oftentimes, like one member of a relationship is the analytical one. And the other one is like the fly by the seat of their pants one.
And so usually somebody's like, this sounds like snake oil. Like it sounds too good to be true. I don't get it. And like, So, yeah, I just, I, I wondered how that dynamic went down. Um, did you have
Shawn Rider: a, we actually have a man in the inner circle right now that's going to pull a life insurance loan and then loan it to a real estate LLC and make double digit interest over top of what, and he did, he did talk to me yesterday.
He's like, my wife is questioning why I'm sending this amount of money to these other [00:11:00] places. Now that's outside of the life insurance policy, but they're leveraging the life insurance policy to send it. So yeah, it definitely, uh, definitely makes for conversation.
Jeff Smith: Sure. Sure. Um, that's healthy for sure. Um, so did you, did you utilize loans out of it or did you just park it and use it as a savings account?
Shawn Rider: Yeah, I absolutely. Um, now the, the, the first part of the reason why it took me nine months to open one is because I, I like to see my options. So again, giving credit to the agent that I was using, I had them send me like. Five different policies, like small amounts, medium amounts and large amounts. Um, and I just had to look at the numbers.
I'm a very visual person, so I had to look at the numbers and be like, Where do I want to be at the age of 40? Where do I want to be at the age of 45? I think I was 20. Eight 29 when I was looking at these to start on, and the bigger numbers moved bigger, faster. And so I was like, okay, if I want to be [00:12:00] in a really healthy spot at 40 and 45, I need to commit to this bigger policy.
So, uh, the first policy that I opened on me was 25, 000 a year. For 15 years, and then it drops to 10, 000 a year in perpetuity. Um, we also set up the same exact policy at the same time on my wife. So just double those numbers. Uh, so 50, 000 a year for 15 years is what we committed to. Every policy we've opened after that has been smaller.
Those are the largest policies. So I kind of did it in reverse. I did bigger policies first and then smaller policies. Um, and then. I, I did not pull a loan for almost three years, so even though I knew I could, I did not have a, I was still building businesses at that time, um, and we didn't have debt on the businesses, so I didn't need to pay off high interest debt, and we didn't need debt to grow faster, so I just sat [00:13:00] them there, uh, for three years.
The it really was a protection play for me early on and a retirement play so it protected it Right now. And then it was, Hey, at these, at, at this rate, at this age, I could pull X amount of dollars tax free. I wasn't too concerned with what happened in between them. But the more that I hung out with you got mentored by you, the more I really, and then COVID happened.
And that really showed that my business wasn't as strong as I thought it was. COVID was the catalyst for me pulling my first loan to buy it. A piece of real estate. So at the end of the day, even though I can pull loans for all these different things, um, I've only pulled loans for real estate, but it, um, it took me three years to get to that point.
I did at the start of COVID, we paid off our vehicle, which was a low interest loan. [00:14:00] And that was partly because my wife doesn't like debt. And so once COVID happened and the business started to lose, I was like, what would make you feel comfortable? And she's like, I don't want any debt. And I was like, well, I'm not paying off the house, uh, but I'll pay off the car.
So in hindsight, I should have funneled that money into a policy first, then paid off the car and my system would be bigger. But you know, during that time, we just did what made the, the, the, the family feel good. So yeah, my money sat there, man, my money sat there, but it was definitely psychologically.
Especially during COVID because I, all my clients that had money in the stock market were freaking out. Cause the market dropped by 40 percent or whatever it was. Um, my money was just sitting free and clear and I knew it was going to grow that year. So that definitely is from a psych psychology standpoint made me feel really comfortable.
Jeff Smith: Sure. Sure. Um, [00:15:00] yeah, I think that. Guys, if you're listening to this, you need to put your money to work. So it makes money for you. Go make sure that you're rolling it, but the level of comfort that like, that's why I am such an advocate of starting these policies, because like, honestly, you had to get comfortable with it.
Your, your mindset, if you will, had to grow into it, being comfortable taking risks, but you were chugging along doing six and a half percent. And like it uninterrupted, your money was growing at a steady clip while everything else was paying 0 percent because at COVID, I mean, at the beginning of COVID, I mean, we were still at 0 percent interest rates until 2022 or three, whatever, when that started to swing.
So you were really crushing like a savings account at that point in time. And so, like. Yeah. I mean,
Shawn Rider: my mind, [00:16:00] my mind, my mindset was still make as much money as I can actively through my business, which is a great strategy. We're huge fans and we tell people there's way more juice in your business that you haven't squeezed out.
And so, but I was so hyper focused on that, that I just needed to protect my money in the meantime. And I didn't want to go do all these other things. Um, again, COVID changed that mindset for me. And the one thing I didn't realize was. Okay, well, if I pull a loan and buy real estate, okay, on, in theory, you utilize cash flows to pay back your loan on your own timeline.
So like I could explain that and I could, I could say that that is the strategy, but I didn't do it. Once I started doing it and I bought real estate, what I realized was if you make decent income and you live below your means, not only does the real estate or the asset, the cash flow asset business, whatever it is, Not only does the excess funds [00:17:00] from that help pay down the life insurance loan that's in your control, there's no monthly payment to it.
Your active income versus what you pay in family expenses, all those dollars you can utilize to pay down your life insurance loan. As fast or as slow as you want. And so once I bought the real estate and it was a really big piece of real estate, so the cashflow was high early on, like 90 days later, I realized that I could start just like taking huge chunks by utilizing cashflow, uh, Delta.
Leftover money and family Delta leftover money. So fast forward two years after I started pulling loans and I bought three or four pieces of real estate in two years. I never had an outstanding loan for longer than like 100, 120 days. Yeah, we're talking about decent sums of money. Now, I'm, I'm not cycling at that rate [00:18:00] nowadays.
Sure. I'm kind, I'm kind of readjusting my portfolio as well as my, um, the things that I want my money in have changed. Um, yep. Right. I'm, I'm kind of divesting from the short term rentals. I sold one already. I'm contemplating selling the others. They're not on the market, my commercial building's on the market, but.
I don't, I don't need to sell it. I'm just kind of seeing what the market does. So now, um, I asked you, I'm going to take over the question here. I asked you what percentage of your portfolio is outstanding loans. Ours. We don't have right now today. We do not have any outstanding loans. So I have all of that powder.
Um, we are investing in Texas, so I have that ready to go for that, the BRRRS, the LTR, so that money's ready for that. Um, but with that being said, I'm now that my wife left her job. One thing I'm interested in considering is going back [00:19:00] to allowing all the businesses and bank accounts to just hoard cash.
And then utilizing the life insurance as the income source via loans for like six months at a time. I've never done that, but I'm interested to see that play out and see how it allows me to manage money in a different way. Hey, let all this money from real estate business, whatever we do, mentoring, whatever, let it flow to the, their own bank accounts, but pool alone for what we need every month for six months.
So I don't, I like, I don't know what I'm trying to explain there, but like I've had that over the past week and I, I, I'm kind of leaning towards that to, to implement that strategy for the next six months.
Jeff Smith: Well, you would pull one loan a month, right? Instead of you wouldn't pull all six months at once, right?
Shawn Rider: Yes. [00:20:00] Correct.
Jeff Smith: Okay. Okay. Yeah. I,
Shawn Rider: I like it. So let, so let five and a half percent accrue slowly. Adding to it for six months while hoarding cash, because again, there's going to be no payment due on these, on these loans, right?
I don't mind, I don't mind 5 percent interest on, on quote lifestyle spending, right? We're going to pay our mortgage, we're going to pay our private school. We're going to pay for food. We're going to pay insurance. Like we'll do all that via life insurance loans while hoarding cash. But I'm saying hoarding cash, but that cash is going to be available along with other lines of credit if, if more properties become available, because I need, I need to streamline a lot of money into investments.
If the time is right now, now here's one thing I don't want to rush because now you're seeing the headlines about Berkshire Hathaway and Warren Buffett. They have like 318 billion worth of cash and cash and
Jeff Smith: [00:21:00] it's,
Shawn Rider: it's, it's basically the same ratio that they held back in 2007 and eight before the crash.
I think they went from these numbers might be wrong, but like last year they only had like 18 billion in cash reserves. Now they have 318 billion or something like that. Like it's a ridiculous amount of money that they've sold off on on equities. Um, and so it's kind of like, I'm not mad that I'm sitting on capital right now.
Another thing. That you said on the last episode is you're looking at an opportunity to, once you sell one of your bigger investments, paying off your real estate. Now I have, I have two strategies that can go in either direction. If my commercial building sells, if my building sells, it's going to bring capital into my life and that's going to make things fine for a while, good for a or I wait two years.
Hoard cash network with private money lenders or family, [00:22:00] whatever. In two years, if I don't sell that building and that note becomes due. At that point, if it appraises for a lot more and the bank will give me the money, I'll cash out refi at the highest amount and take the difference. Or I think in two years, I'll still owe like 2.
4 million on that. I think between whatever lines of credit, cash value, life insurance I have, other assets, equity, and maybe one or two private money people, I think I could pay off. In full a 2. 4 million note at without taking on like a three and a half million dollar note, you know, if I, if you know what I'm saying there, pay off that note, have one or two private lenders, even if the interest rate, I'd have to do the math at that time.
And then just [00:23:00] have the cashflow from the building and a line of credit from the bank against it. I don't know how that's going to play out, but like my mind's kind of thinking about that because there's not much right now with the commercial building sale. So I have to start, I have to start preparing for a year from now.
And I'm like, Oh shit, I'm only a year out from needing to make a decision.
Jeff Smith: Sure.
Shawn Rider: Maybe that's just me, like brain dumping on you and not really helpful for the people, but, um, that's what my life insurance loans, I have zero loans. But I have a lot of opportunity to deploy them in the next 24 months.
Jeff Smith: Right.
Right. And you always have to, you always have to figure out like if paying things off is a good thing from, from a timing standpoint. But ultimately at the end of the day, like paid for real estate is what makes you like wealthy. I mean, you could have a thousand rentals leveraged and you're still going to be scrambling to.
Like make it [00:24:00] all
Shawn Rider: I think if, if I get here, like, here's my plan in my head. It's like, if I get the right offer, I will sell it in the next year. If we get, if we get to a year from now, I will spend a year working my ass off to have the potential to leverage my own funds, to pay that building off and solely have a line of credit for like 3 million against it.
And that, that, because what I'm looking for, Jeff is to buy myself time. And keep everything in my own system without now, if interest rates were 3 percent on a commercial loan, hell yeah, I'll take that.
Jeff Smith: Yeah,
Shawn Rider: my, my commercial loan is going to go like from 3. 75 percent to, I don't, I don't see them coming below 5 percent in the next few years.
I'm not, no, one's got a crystal ball, but like, I don't, I don't think that's going to happen probably.
Jeff Smith: Right.
Shawn Rider: I hope so. I hope so. And because that would change my answer. But, um, I think I'd [00:25:00] rather just have access to the equity and then net net the cash flow from from rents. And again, that's ideally with a fully occupied building, which were like 92 percent fully occupied right now.
Jeff Smith: But you have to understand if you could go, if you could go leverage 3, 000, 000 in a line of credit, you could buy a 15, 000, 000 asset. And so think about the power that comes from that. So yeah, I mean, you might have to do some fucking Houdini shit to get it paid off in the next two years. But like. When you're done with that, you've got whatever 35 to 50, 000 a month worth of rents coming in on that particular thing.
And then the access to essentially. Three, the ability to potentially leverage 10 to 15 million, which would take you instantly to like, I don't know, 20 million of assets. [00:26:00] Like, so you think about making that one move in two years that takes you from fucking whatever, two, three million, 4 million, 5 million assets to 20 million.
And, uh, That's an interesting scenario.
Shawn Rider: I laugh because I don't, I still don't think that big.
Jeff Smith: You better start thinking that big.
Shawn Rider: You're still,
Jeff Smith: you're still young and you're doing the right things. And like, even as, even as slow and as like cautious as you want to be with it. Like, there's just no denying it. Like time just does its thing. Right. And so it's a good problem to have good questions to be asking for sure.
Um,
Shawn Rider: I think my mind's there now just because of the situation that my family's in, right? Started businesses, wife left her job. So I don't want to say that I've fallen back into the protect at all costs mode, but I'm also like, I'm also seeing like, okay, where are my life? [00:27:00] Where are my risks? How can I gain all this back into one place?
Blink my eyes fast forward a year and a half and then make, make what I feel is a big move that makes one mathematical sense, financial sense and just streamlines. And, and, and removes, uh, diver, not diversified risk, but like, like you said, like it own, would you rather own 10, 10 properties or a hundred?
Like there's risks that come with both and the headaches are bigger with a hundred than 10. And so I can put everything into one. I think that's starting to be very entertaining to me now. Um, but the point of this episode is to reinforce that. Man, like without that foundation, where would this money flow to?
Where would it flow from? Where would be my family's protection? Knock on wood. God forbid something happened to me. So this is these last two episodes and we'll wrap it up here. These last two episodes really to show you guys [00:28:00] why high early cash value is, as Jeff said on the last episode, the greatest foundational financial tool that you can implement and you, you are better off implementing it.
Now, then later, do not get behind the eight ball, um, get the system started and build upon it in perpetuity. Now you, you will not regret it. I have never heard anyone that has a properly structured, highly cash value life insurance policy. I've never heard anyone say. That they regret having. You will never hear that.
I have not heard that. And we've helped a lot of people get started. And you know a lot more people that have them than I do. Um, and they all use them for benefit.
Jeff Smith: Yep. Yep. So get one. Or ten. Guys, if you need, if you need help setting up these policies just like the last show, reach out and let Sean and I know.
[00:29:00] We're happy to help you. If you know people that should be in these, send them this episode. Go ahead and subscribe to us on Facebook. We have the Tactical Empire community on Facebook and, um, follow us on YouTube, subscribe to the channel. Let us know if we can help you guys. We want you to kick ass. Like I said, I mean, I think it's a very important next two years.
Hopefully you guys are on the accelerator like we are. So have a great week, kick ass, and we'll talk to you soon.