The Five Stages of IBC: From Denial to Advocacy

As Authorized IBC Practitioners, we find great satisfaction and fulfillment in guiding our clients through a transformational financial journey. Everyone who ultimately puts in force a policy and begins this generational wealth building journey away from banks and Wall Street goes through a very similar sequence, consistent enough in its iterations that we can categorize this development process into what we’ll call the Five Stages of IBC. These stages are:

·      Dismissive denial

·      Critical opposition

·      Skeptical optimism

·      Enthusiastic embrace

·      Passionate advocacy

The mission of Remnant Finance is to contribute to the mission of the Nelson Nash Institute and the broader IBC community of ‘building the 10%,’ as in spreading the word and getting enough of the population to at least the skeptical optimism stage. The first two stages are the uphill portions of the trek, where the resistance takes the form of one’s own prior assumptions as well as the constant barrage of external opposition. The external forces include both the financial planning industry, which is predictably reluctant to allow AUM capital to slip out of their portfolio into a vehicle which would drastically improve their client’s financial strategy, as well as the outspoke yet mostly misinformed opinions of individuals in their lives.

Dismissive Denial

"Well how come I haven’t heard of this before?”

We know the challenges to IBC, for we ourselves have posed all the same questions in our own journeys through the five stages. When a prospective client says they are interested but must check with their financial advisor, we can predict how that conversation will go with surgical precision. We send them to the meeting with their advisor with a predictable list of challenges and criticisms which will be posed to the client in the meeting, and we have yet to hear that our predicted transcript was not meticulously accurate. What we have yet to come across, however, in light of the certainty of opposition from the financial planner, is an individual who even remotely understands the mechanics of a whole life policy and how it is underpins a holistic financial strategy.

This vast chasm between the advice given and the requisite knowledge base from which an accurate recommendation should be made forms the retaining wall that keeps people stuck in the conventional financial planning model. If the first stage of dismissive denial is the individual’s own preconceived notions of how bad a product whole life insurance is, the critical opposition stage is the validation of ‘the experts’ sought to confirm prior assumptions and reject the concept without a full exploration of its merit. Reaching this second stage is still a positive development though, as it means the idea has struck a chord sufficient to merit outside opinion.

Critical Opposition

"Okay maybe it works, but I can do better in the market.”

Even if this outside opinion is almost exclusively negative, the process of trying to disprove the idea can bring one face to face with ideas that they must acknowledge hold weight. I myself came to understand IBC by my own furious attempt to dismantle the idea. Every hole I tried to poke in a tenet of the concept turned out to be fortified by robust contractual rights that I could not ignore without lying to myself or turning off my faculty for critical thinking. Eventually, IBC stood unshaken by my attacks, and I was forced to admit its brilliance and simplicity.

It takes research and exploration to get past the second stage, even if that effort is approached from a position of deep skepticism. The life insurance contract, initially written off as a ‘bad investment,’ becomes the first financial vehicle that most consumers have ever deeply examined. Scattered amongst the financial junk drawer which most clients bring to the table when we first begin discussions are various uncoordinated financial products about which they know almost nothing. In exploring IBC, the client has endless questions; we delve in depth on the financial strength of the companies we use, the specific tax treatment under different contingencies, or the sustainability of the financial obligation incurred, among many other topics. I often ask, after four or six hours of discussion, if they spent more than ten minutes in the individual decisions that led them to their current suite of products. Invariably, the answer is no.

Skeptical Optimism

"There’s gotta be a catch, right?”

The rabbit hole of whole life is where most clients find themselves before advancing to the third stage- skeptical optimism. This is the stage where we spend the most time with someone considering implementing this powerhouse of a financial strategy. We do our fair share of educating with people who show genuine interest but are still stuck in the critical opposition stage, though our time is best served in support of those who have gotten past their skepticism and are genuinely trying to understand the process to a degree sufficient to be entrusted with such a powerful, paradigm-bending tool.

This is where the best questions are asked, as current capital outlay is seriously scrutinized and the financial order of operations are reviewed with the nervous anticipation of possibly committing a sizeable portion of one’s income to this new (but actually very old and time-tested) financial vehicle. This is where we approach the ‘money where your mouth is’ moment.

The work put in during this stage is also the reason why the IBC community appears so zealous about what they are doing. It’s more than sharing investing or lifestyle tips in a Facebook group. Those who are practicing IBC are devoted students to a philosophy around money that emphasizes control and guarantees. Here one learns about the fractional reserve system, that our money is actually debt, that they lack control over their money, and that another entity is profiting greatly off understanding the banking function using the capital they are just realizing they don’t actually understand or control.

Many enter this process not even knowing there is a problem- after all, there has always been an expert there to tell them their strategy is the best they can be doing. When they lose money, its just the risk of investing in the market, they say; high risk equals high reward, they’re told. It takes realizing there is a problem for one to set about correcting it. If you don’t know that you don’t need to take risk to grow your money, and that all risk you choose to assume can be done from a position of strength where it’s downside cannot impact your principal, then you won’t think twice about diving into risk-on assets at the advice of your advisor.

The scales begin falling off the eyes at this stage, and the most common response as one progresses to the next stage is frustration that their trusted advisors had failed to inform them that this was an option.

Enthusiastic Embrace

“I can’t believe nobody told me about this sooner!”

Once you see it, you can’t unsee it. Nelson Nash always said that “IBC is more caught than taught,” meaning that it has to ‘click’ before it can be implemented. Some people begin their learning journey only to write off the idea as too complicated, or, no kidding, too good to be true. Then we might not hear from them for six months, till they finally ‘catch’ it. Once caught, there is no holding back. We go from encouraging them to explore further and answering questions to having to tell them to pump the brakes a bit, to not over-extend themselves.

They are incredulous that nobody has told them about this, and without exception wish they had started sooner. I have 45-year-old clients who start policies and lament that they didn’t start at my age (35). I also have a 25-year-old client who wishes he had started in college, while I was wishing I had started at his age. The best time to plant a tree is twenty years ago, as they say, the next best time is today. We can only start where we are, and mourning over time wasted in the Wall Street hog trap does not solve any of the problems we are tackling by implementing IBC.

When this stage is reached, we are typically in the application process. More often than not, people start smaller than is likely reasonable for their situation, and then again, more often than not, expand their desired premium input beyond the high end of their initial estimation. This is where we have to be the bumper on the other side of the lane, preventing a commitment to more premium than is sustainable. Some variation of ‘manageable but uncomfortable’ is often stated in the IBC community when discussing appropriate premium funding levels. Obviously it would be irresponsible to put a client in a position where they will struggle to keep the policy in force in light of their overall financial position. But we also know that with appropriate reallocation of the cash already flowing through one’s personal economy, we can find substantially more premium dollars than a simple budget analysis might indicate. This comes with the understanding that premium is not a one-way budget item expense, but rather is simply relocating capital from a stagnant holding account to a robust value-generating contract.

Finding that balance dominates the discussion in the later stages, as we also lay the groundwork for future system expansion. The enthusiastic soon-to-be IBC practitioner begins thinking about policies on his wife and children, after he maxes out his own insurability with companion convertible term to bridge the gap until income can support maximum permanent coverage. We are on the home stretch to completing the five stages, and are about ready to begin telling everyone we know that there is another, better way to deal in certainty with one’s financial strategy.

Passionate Advocacy

"Don’t wait as late as I did to get started!”

After a substantial amount of time diving into the weeds on policy mechanics and company specifics, we all usually end up coming up for air and realizing that the process simply works. As James Neathery says, “If you understand the concepts, the details don’t matter. And if you don’t understand the concepts, the details don’t matter.” Either way, the details matter less than we suppose them to at the outset. We who have arrived on the other side of understanding the problem at hand and it’s solution begin to focus less on the minutia that initially consumed us. No longer do I look at the illustrations that I once scrutinized to compare to actual performance- I just know the company will pay a dividend (required caveat implied here) and that I will use it to purchase additional insurance, and that my cash value will be higher tomorrow than it is today, and that I am providing guaranteed generational wealth to my family.

With proof of concept, we see the simplicity of the process and appreciate the value of newly found certainty in our economic lives. There is great peace in deleting the stock ticker app on your phone because you no longer care what the market did that day. In my case, what was once dead capital locked away for decades in a qualified plans with no guarantees or certainty is now stored securely in a policy which I am using to acquire cash flowing assets. 

We ask prospective clients what their goals are as it pertains to money, and what strategy is currently in place to ensure those goals are achievable. Often there isn’t a coherent strategy in place, but if there is, we ask what could go wrong that would derail that plan. There are always many, many holes in the dam that could collapse the whole thing without warning. When we know that we have plugged those holes up ourselves, that we are immune to hazards to which others we care about have left themselves exposed, how can we not let them know what we are doing?

The passionate advocate runs into the same headwinds encountered in the first two steps, only this time it is all external forces trying to pull the crab back down into the trap; the internal voice that once derided and dismissed the idea is a distant memory. We have proof of concept and have seen things we can’t unsee, so the un-researched spears and arrows from the acolytes of financial entertainers fall pathetically short.

This isn’t meant to come off as some nirvana of financial enlightenment, where we have transcended all misunderstanding. It is simply well-earned confidence borne of legitimate research and the rigorous stress-testing of ideas, usually for the first time. I don’t feel like I’m trying to ‘sell’ IBC when I talk about it because I am simply discussing what I am currently doing with my capital. Investing in rental properties without exposing any principal to risk is enough to pique the interest of someone who may be on the verge of starting the learning journey, I don’t need to embellish or exaggerate the merits of the process. 

The five stages of IBC as laid out above are a recurring observation in the IBC learning process. Remnant Finance is there to be your sherpa as you progress through your own discovery journey. If you are not confident in the certainty of success in your financial strategy, or if you don’t even know what your strategy is, it is worth reaching out to explore what IBC can do for you. There is an Authorized Practitioner finder function on the Nelson Nash Institute website (infinitebanking.org) if you prefer to work with someone in person in your local area. If you are still skeptical of the process, would it not be worthwhile to invest the requisite time to prove out your position? After all, if you’re wrong, and you end up catching IBC, you will most certainly wish you had starter sooner.

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