Speaker 1: All right. It’s the summertime. How y’all doing out there? I’m Tawanda Black and thanks for coming back to the show. And oftentimes, summertime means money. We take vacations, we buy cars, we hit the lake, we take the kids on extravagant vacations. I just met a couple, I can’t even tell you, they took their kids last year, two months on like a tour of all the amusement parks. I said, “How much did that cost you?” And the lady said, “Oh, only about $10,000.” I was like, “Oh my God.”

Speaker 1: But you know what, we have a lifetime of managing money. And our wealth expert is here, Steven Labroi of the Labroi Insurance group. And, and our subject today is funding your own lifestyle without financing it. Because I did ask the lady and I said, “Did you pay cash for that?” She said most of it was on my credit card. I was like, you will be like dust before you pay that off. Am I right?

Speaker 2: Oh yeah. This is interesting. Lord, another Sunday morning. I’m happy to be here. And this topic is near and dear to me because I’m going to tell you for some reason we have created a phenomena of financing.

Speaker 1: Everything.

Speaker 2: Everything you do. And sometimes we don’t even know we were financing things. We just have taken it for granted and it’s become part of our lifestyle. And it’s just something that we don’t even look deeper into to understand that the dollars that we pay these other companies add up.

Speaker 1: Yeah. But you know the funny part of it is that corporations have made it a part of what they do. You look at some of the smaller things that we have, like Sirius XM where you got to pay every month, cable you got to pay every month. Netflix, you got to pay every… you know what I’m saying? Even down to meal preparation. I mean, everything is a finance right now. And the whole country has moved to that.

Speaker 2: Yes, and I challenge all my clients to look at the fine print. Was written a car recently and probably over the, well double the amount of the actual price of the rental car were taxes and fees. So you look at the fine print with those things that you just named cable, XM and just see, don’t take for granted, look at this thing and see how much are we paying additional. I know that a lot of the things that we want, we take it for granted, but at the same time, if you can build in the idea of I’m going to build wealth so that I can consume the things that I want then some of those taxes and things we can kind of cover.

Speaker 1: Shoot, you know, that when you get on an airplane, the cost of the flight itself is not that much. It’s all the other things that go along with it. And some of those things we’ve got to do what we got to do okay. But like you said, we need to begin to look at what, we’re fine at this, this, this plastic thing. This financing thing is serious. It’s very serious. Now talk about the history of banking and financial institutions.

Speaker 2: Yeah. I really love getting into history because again, one of my cliches is history is no mystery. A lot of the things that we do today are as a result of as a result of what was developed probably less than a hundred years ago. The history of banking and financial institutions pretty much dates back to England, but in this country, right at the turn of the century where banks initially were decentralized, they were just in each state. You could not really bank across state lines and then write in the early 1900s there in Jekyll Island, we all know Jekyll Island outside of South Carolina. They created a plan to build a Federal Reserve, and that’s where it started, the whole centralization of the banking system. So there’d be some control.

Speaker 1: Six men. Six men. Six.

Speaker 2: Yeah. How did that occur with these man who decided that, hey, we didn’t want to lose control because at that time people were starting to learn how to save. They were building their own entrepreneurial businesses, farms, and they didn’t want to lose control over loaning money and the banking system that was coming in to play.

Speaker 1: It’s amazing. You suggest a book about a little bit of that history.

Speaker 2: Yeah. That history. The book I love is called “The Creature of Jekyll Island” by a gentleman named Edward Griffin. It gives the good, the bad, and the ugly about how the Federal Reserve was established and how these men and their power positions in this country does help decide how we operate today.

Speaker 1: Yeah.

Speaker 2: I mean, we know that the Federal Reserve gets together quarterly and makes decisions or do the interest rates stay flat? Do they grow? Do they reduce? And that’s a major part of what leads us to make financial decisions.

Speaker 1: That’s right. That’s right. So when you go back, just maybe a couple of generations. My grandfather saved his money. He bought some land, bought a parcel of land, a few acres, started a business. He had a GI, he had money from Gi and the military and paid that all back. And when he left this earth, he paid off the house that my grandmother is now still lives in at 91. He paid off all the cars, he paid off everything. All she has to do is pay taxes. And so that’s the kind of generation I like and that I grew up in. So my thing is I need some furniture right now. While you can go and put that on layover, put that on credit. What I always like to do is if I couldn’t really afford it, I would save money and go puts a little bit of money down on it. And go put some more money down on it and go, but, and then paid it off. And then I would bring it home because only then did I own it. And I got that from my grandparents.

Speaker 2: I’m going to tell you something about our grandparents. And we always mentioned them because we always say, hey, they were pretty cheap or they kept everything that they purchased. Well this is a generation that came out of the depression.

Speaker 1: Yeah.

Speaker 2: And these folks were taught a profound respect for money and its power over life and they were taught the value of self reliance. I mean I think it’s just now and these future generations that people are starting to garden again. Remember our grandparents gardened all the time to supplement food and things that they wanted to have that they couldn’t afford.

Speaker 1: They put up preserves. Think about that.

Speaker 2: That’s right.

Speaker 1: Yeah. They made preserves and all that. They didn’t have to buy all that stuff. All the fruits and vegetables. It was amazing.

Speaker 2: That’s right. And people are doing that now and we think it’s a new thing, but what you transfer from then to now is that it’s expensive to live now. So people are starting to figure out ways. Nothing has changed under the sun. We have to create some goals and some strategies so that we can continue to make it in this life that we live.

Speaker 1: That’s so true. Now talk about for a moment because this is still happening and I know it happened for me some 30 years ago my senior year in college and all the credit card people descended on us and gave us applications. We didn’t have no jobs. We had nothing. But we had credit cards and they’re still doing this today.

Speaker 2: Right. And it’s interesting because sometimes I hear credit card, the applications are being sent to almost elementary school children. I mean it’s a phenomenon that when you look at it from the opposite side, banks and lending institutions, this is their product and the way they market their product is to provide it up front when you have no idea on how to manage money. I have no credit score and this is supposed to help you establish it. But what normally happens is the banks end up winning on a large portion of the population that sign up for credit cards. And then people began to pay these interest rates on credit cards and credit cards and plastic becomes this habit form. So it’s an interesting phenomenon because even when I step foot on a college campus there was a big sign out First Atlanta, for those that remember First Atlanta Bank and they were passing out applications. I got my first application, first thing I did was run to the department store, buy me some school clothes.

Speaker 1: Exactly. With no job. Right?

Speaker 2: That’s right. I was a college student, no money coming in. But I look good.

Speaker 1: That’s so crazy. That is so crazy. I like what you say and in your conversation that credit is not cash. It is buying money from another business whose product is to sell you credit or lend you money. And we got to get that and we’ve got to get that into our kids in these coming generations or the cycle continues.

Speaker 2: Yeah, I’ve heard parents tell me that that card, that ATM card or the ATM machine some children think that it just prints money, stick a card in there and the money comes out. But we have to have these clear discussions because it is a phenomenon that is being pushed here in this country to create some conveniences. But at the same time we have to know the rules. We have to know the rules. So credit is not cash. And we at our firm say that when you use credit, you’re buying money just like you buy, you know, products on the market.

Speaker 1: Right.

Speaker 2: Right, right. Because you’re paying interest. And even when you say, somebody tells me all the time when I use, pay no interest for 24 months and I pay it off within 24 months. Well that company gets the use of those dollars coming in. They make it convenient for you. They get the use of those dollars coming in just as anything else to buy their product. And there are some people they know what percentage of people that are going to miss that one day that is supposed to be paid off and all the interest rate it’s placed on that card. And so they play the odds. Some of us are able to pay it off before the 24 months and that’s good. You’re able to use the system and that’s another way of managing money. But at the same time they know there is some percentage of people are gonna miss that day and they’re going to be on the hook for all of that interest rate.

Speaker 1: You know the credit scoring system. And it’s interesting. So many things are now attached to your credit. You think about employers who say, oh, we’re going to check your credit before we can hire you. Why? In some fields I do understand, but in a lot of them I don’t. Then you’ve got housing, tenant screening, check and bank screening, auto and property insurance screening, all kinds of stuff. Everybody’s checking your credit today.

Speaker 2: Yes. I mean, it’s an interesting phenomena as well. I found there’s over 50 different credit bureaus. See we’re only taught that there’s three that affect our finances, but you just named several others. And there are many places where our data and information is being held and it is the [inaudible 00:13:41] is on us to make sure that it’s correct. And sometimes we get a little bit lackadaisical about that because we said, well, we checked the Equifax so we check Trans Union and everything’s fine. Well guess what you may have some data incorrect at a medical database, and those types of things affect how you operate, which is why we’re such advocates of making sure we have some way of doing business outside of the credit system as well. Because you never know what you’re going to fall into. I mean, that’s why those credit trust companies like Lifelock and those companies are out there doing big things, is trying to protect your credit.

Speaker 1: So important. So important today. And then you look at it. I mean, the hackers are always a step ahead of these big companies. And it’s like this vicious cycle. Everybody’s trying to keep up with everybody. I mean, the corporations, the hackers, the hackers, the corporation. You know what I’m saying? And their job is to get all the information so they could sell it. And the corporations are doing their best to keep up and keep you safe. But my goodness, it is, that’s crazy. When you got top credit companies like Equifax, that’s credit scoring system and they got hacked. There’s a problem.

Speaker 2: Yes. We’re thinking they’re protecting all our sensitive information, but they’re a big data bank full of computers. And it’s just so interesting that sometimes we just, again, take it for granted that everything’s gonna be okay and we operate within the confines of what they say. But well, our firm is we’re a firm believer in finding ways outside of that to maintain your lifestyle, create some goals for your family and be able to create a lifestyle so that you can maintain it while you’re participating in the system at large as well.

Speaker 1: And really and truly the only way to do that is life insurance because it’s not connected to the credit system. A life insurance has their own check and balances and all of that. And I think that’s really interesting. A lot of people don’t think about it that way. So talk about that for a moment.

Speaker 2: Yeah. This is something that again I am a big proponent of, because of this particular type of insurance outside of auto and home and all the insurance that we’re mandated to have life insurance is a contract. And if you get the type of agent or company that will allow you to customize those contracts in your favor, that you’re able to use these products while you’re living, not just when the next generation occurs, that you can have a free reign to deal with the life insurance company, which is not a bank directly as it relates to having access to funds that you can use without having to use credit. So it’s really another way. It’s an additional way because I’m not saying that you had to devoid yourself from the credit system because that’s the world we live in.

Speaker 2: But I want to have something on the outside that will allow me and when things go awry, when there’s a hack in the system.

Speaker 1: And they will.

Speaker 2: Yeah, a little trip up in the system and somebody mess my credit score up. I still need to have access to funds. And so I’m a very big proponent of building something outside of just the one system that we’ve been presented. And we use life insurance and annuity contracts and we show you how that works. Generations pass. We may not have had the proper policies or the proper relationships to have rhe type of insurance that has been around for 50 years. But like I tell anybody in your hand right now hold a cell phone that has the Internet where the information is available for us to learn and it is out there.

Speaker 2: So we have to expand our horizon with these different strategies so that we can make it into the future where we just don’t know what’s going to happen.

Speaker 1: That’s true.

Speaker 2: And how taxes is going to affect the interest rates are going to affect us. I mean, Tawanda, it’s funny, but we’re in the lowest marginal tax rate income tax rate we’ve ever been in the history of this country. To me and to a lot of other financial professionals, that means that the potential of taxes going up in the future is great. And if you plan on retiring in five, 10, 20 years, and you have products that are deferred for taxes at that time, you could expect to pay more.

Speaker 1: Wow. Wow.

Speaker 2: There are a lot of things that we’re following and we want you to have options and choices and not be stuck with what happens with the general public, the general masses.

Speaker 1: Wow. Wow. Great. And great information. Great Information. Did we finish our

Speaker 2: oh, money mastery?

Speaker 1: Yeah, did we finish.

Speaker 2: Yeah, we did all money mastery. And that was good because I think a lot of people really got some good stuff for money mastery. If they haven’t gone on moneymastery.com to learn more I tell people to do that. What I was going to recommend this week, this month is if you know listener emails me, then I’ll send them free of my book and resource list so that they have information at their fingertips that they can read, they can look up on the internet or share with their children. and just have more information at your fingertips so you can start to build a base of understanding of what we need to go in the future.

Speaker 1: Sure. Absolutely. Tell them how to do that. Steven.

Speaker 2: Yes, please email me at S Labroi. That’s L-a-b-r-o-I, so S. L-a-b-r-o-i @labroiinsurancegroup.com. You can reach out on phone, by (202) 544-6226 Again, or my website is Labroiinsurancegroup.com. I am definitely on all social media and if you reach out to me, I’ll send you free my book list, a resource list, how you can search, what search terms to find different strategies, and hopefully we can start spreading this information and start learning some good stuff about building wealth outside of these financing tools that we’ve been given.

Speaker 1: Absolutely. Absolutely. Thank you for the great information. Stephen Labroi, our wealth expert and strategist from the Labroi Insurance Group. Thank you so much for joining us.

Speaker 2: Thank you.