Tom Laune has had an incredible career in the music industry, working with some of the biggest names in the business. But when a hearing loss forced him to change careers, he used his financial acumen and expertise to become a successful financial advisor. In this episode, Tom shares his story of resilience and reinvention, and offers advice to anyone who is facing a major life change.
Key Takeaways
Resources Mentioned
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About our Guest:
Tom Laune is a financial advisor and the founder of Laune Financial Group. He has over 20 years of experience in the financial industry, and specializes in helping clients achieve their financial goals. Tom is also a motivational speaker and author of the book "From Music Maven to Financial Advisor: My Journey of Reinvention."
Investing to Hedge Against Inflation - Free online training at https://investormindset.com/start
00;00;00;00 - 00;00;08;07
Steven Pesavento
Welcome back to the name your numbers show presented by the investor mindset. I'm Steven passive enter and today of time line in the studio how you doing today, Tom?
00;00;08;09 - 00;00;12;06
Tom Laune
Hey Steven. I'm doing great thank you so much for having me on your show.
00;00;12;08 - 00;00;35;24
Steven Pesavento
Yeah, I'm excited to talk with you. I've been a long time friend and, you know, fellow in the industry, you're doing some really incredible things in business. But today I really want to talk more about you and kind of this journey and this vision of the life that you're creating. I think there's some really inspiring things in there, but before we get into what the future and present looks like, I want to take a look back at a little bit of your story.
00;00;36;01 - 00;00;53;28
Steven Pesavento
Sure. And I think it's really interesting because you know, a lot of people, they go to work, they're grinding, they're building their business, whatever they're doing, and they're earning that income and they're very active in doing it. And there's always that thought that there's not going to be a time when, you know, I'm not going to be able to make money.
00;00;54;05 - 00;01;09;11
Steven Pesavento
But I know for you, you were in the music industry. You work with some of the biggest names in music and you had an accident that happened that ended up preventing you from that. So tell us kind of what happened, what you were doing in your career and then the tool or strategy that really ended up kind of saving you.
00;01;09;13 - 00;01;10;07
Steven Pesavento
Sure.
00;01;10;10 - 00;01;35;19
Tom Laune
I would love to do that. Steven. So I was 29 years in the music business, and I will tell you this I did not get into doing music for the money at all, like I was hoping money would come eventually, but that is total passion. I was just, you know, into it my whole life and I wanted to learn as much as I could about how records were made.
00;01;35;25 - 00;02;06;08
Tom Laune
So I ended up going to a school, but actually a university program in Memphis, Tennessee. Memphis State University had a degree program in recording engineering. So I ended up going there and absolutely falling in love with the craft of how records were made and the chances of making a living making records. Steven is astronomically small. I was glad that I didn't understand that when I started.
00;02;06;11 - 00;02;31;17
Tom Laune
I was glad I understand how daunting of a prospect that was, But I happen to have an amazing career break where I got offered an internship at a really large recording studio that had recorded Led Zeppelin three. And they when I day one entered the building, they were recording Z Tops huge record called Eliminator with Legs and all of the great songs.
00;02;31;17 - 00;02;54;28
Tom Laune
So I got to literally walk in day one and meet Z Top and I was big, you know, star struck and everything. So I ended up getting at a really, really great foundation in music and doing that for a super long time. I ended up getting to work with some of the best artists in the in the business and it was awesome.
00;02;54;28 - 00;03;26;16
Tom Laune
So I'll just name a couple Bruce Springsteen, Stevie Ray Vaughan, Fabulous Thunderbirds, Aretha Franklin, just a just a great wide variety of people. Keith Richards from the Stones. I got to do an album with him, R.E.M., I got to do their Green album. So anyways, long story short, great career and music I did during that time. Steve And have a series of fraudulent financial advisors.
00;03;26;16 - 00;03;46;21
Tom Laune
That was the bad part about being in music. I didn't know this, okay, but people in the music industry are financially preyed upon, meaning that pretty much everybody in the financial industry knows that people in the music industry really don't know what they're doing. I hate to say it as a paint it as a general brush, but.
00;03;46;24 - 00;03;56;05
Steven Pesavento
As the guy who has friends in the music industry from the business side all the way over to artists, they're just they're creatives. They're not focused on the finance side. And, you.
00;03;56;06 - 00;04;29;08
Tom Laune
Know, that's exactly right. And the thing is, the big mistake I made over and over again was asking my fellow musician friends, who they're using for their professional services people, you know, which honestly in hindsight, that's super dumb. That's blind leading the blind, right? You don't ask somebody that doesn't know what they're doing. But I had this mistake and thought in my head that if somebody in the music industry was super successful and they were just killing it, that they must know what they're doing on the financial side.
00;04;29;12 - 00;04;49;20
Tom Laune
So those are the people I would ask, you know, the people who I looked up to and and without fail, they would turn me on to their guy and their guy turned out to be fraudulent. Like literally two other three guys I had as financial advisors ended up in jail. MM mm. I mean, the third one really should have gone as well.
00;04;49;20 - 00;05;16;08
Tom Laune
But I, I was told by one of the guys who may still be in jail to this day because he did a really whopper of a, of a scam on a lot of people. I was told by him you need this ability to insurance which see obviously a financial guy who's not necessarily doing everything right. You know, they say some things right every once in a while.
00;05;16;08 - 00;05;44;07
Tom Laune
And that was one thing that he said which was super important. You need to get a policy, disability policy that will cover you if you ever are not able to work. Right. And so I researched and asked some other friends who would be a good guy to go to. That guy ended up getting me a disability policy and he got a special what's called an own occupation, which means it was just on my hearing, which was super critical for me.
00;05;44;09 - 00;06;06;16
Tom Laune
But Steve, I'm not a this isn't like I cannot make this up, okay? That very guy who got me that policy told me to write the premium payments to him personally, to his company personally. Okay. And not knowing I did that right, not knowing any better, I thought, well, that must be how it's done. And so I'm going to do whatever this guy says.
00;06;06;16 - 00;06;32;26
Tom Laune
Well, eventually I got that policy canceled for lack of premium payment because what he was doing is he was taking in premiums from a bunch of people for different insurance products, having them all sent to his company. He was trying to invest the difference and then pay everybody's premiums. And that worked for about a year and a half before the whole thing collapsed on him, like the ridiculous idea that it was right.
00;06;32;28 - 00;06;49;13
Tom Laune
And so that guy came to my door one day bawling. I answered the door. He came in and he was a mid-fifties guy and I was in my mid thirties. He said, Man, you know, I've totally screwed you over and I want you to please not turn me into the insurance commission. And of course I didn't know what he'd even done.
00;06;49;13 - 00;06;51;06
Tom Laune
Steve Yeah, but anyway.
00;06;51;06 - 00;07;11;09
Steven Pesavento
Fasting, fast forward, you, you got this policy idea and you dealt with a lot of fraud, which I think is something that's really important to understand, is that there are people out there who are not the best, and it's really important to get connected to people who are experts, who have alignment, who are doing the thing that they're telling you to do.
00;07;11;12 - 00;07;13;22
Steven Pesavento
What happened once you had that policy? I mean.
00;07;13;28 - 00;07;14;20
Tom Laune
So what did.
00;07;14;20 - 00;07;23;17
Steven Pesavento
That do for you by actually having it? Because you hear a lot about people getting things like this and they think it's a waste of money. But for you, it it really was a game changer.
00;07;23;18 - 00;07;49;20
Tom Laune
It was an absolute game changer. So fast forward 20 years later, I got that reinstated, that policy that got canceled, reinstated, and I paid the premium every month for the next 20 years. And then I did lose hearing partial hearing in one ear that created a situation where I could not do that job. It comes in with tax free income every month, and I had that for five years.
00;07;49;20 - 00;08;10;03
Tom Laune
And I want to say that it was just a little over ten grand a month that I got. And this was back in, you know, lawsuit a long time ago. I can't remember what year that was, maybe 2010 or something. And so it was more than enough for me to be able to go, all right, what do I want to do?
00;08;10;05 - 00;08;27;28
Tom Laune
What is it that I want to do and that is when I decided, you know, had this guy not told me to do that, I would be in a world of hurt right now because I couldn't do my job, that I was very successful at in the music industry. And so I was able to go back to school and change careers.
00;08;27;28 - 00;08;53;09
Steven Pesavento
And I think the thing that's so important that the reason I wanted to talk about this story is because whether you choose to or you don't choose to, at some point there's going to be a point where you're going to have to to change, right? Yeah. You had an injury. There was no choice. Change was coming. You're going to be in a situation where, okay, you have to go from this thing that you absolutely love.
00;08;53;12 - 00;09;31;07
Steven Pesavento
You love doing it. You made your way in the music industry, which is extremely difficult. You're working with some of the biggest names. I mean, Stevie Ray Vaughan. I mean, all those folks that you named were absolutely impressive. But then in a moment, it changes. And the only thing that you if you did not have that policy in place, you would have not had the financial buffer to be in a position to then go out and figure out what's next and whether it's health, whether it's injury, whether it's an industry shift, whether it's something that happens with your family, change is inevitable.
00;09;31;07 - 00;09;52;15
Steven Pesavento
And so when we can put ourselves thinking forward, what are those kind of buffers, those things that we can put in place that help us be ready for that change? But then most importantly, that we can accept that change has happened, that we're playing a game, the rules of the game have changed, and now in order to win this new game, we need to go get reeducated.
00;09;52;15 - 00;10;00;25
Steven Pesavento
We need to start going after something in a different way. I think it's a really powerful metaphor that you lived that just shows kind of what's possible.
00;10;00;27 - 00;10;24;12
Tom Laune
Totally. And I will say, Stephen, that I was so, so grateful that that thing was in place. And so I just went back to school, dove in to wanting to be able to help people not get screwed in the financial business, right? Because that's what I did. And so I really wanted to be a change maker in that in that world.
00;10;24;12 - 00;10;30;20
Tom Laune
And I've been doing that now for ten years. And it's just been really it's been amazing, amazing run.
00;10;30;22 - 00;10;52;24
Steven Pesavento
And so, you know, fast forward, you're running a business, you've had a ton of success in it. You know, I've seen that success over the last ten years myself. Ryan We've been friends for many years. We've seen and connect with each other and seen that growth. You're at a point where by a lot of means you've created the life you want.
00;10;52;24 - 00;11;05;28
Steven Pesavento
What what is next for you? Like, what is that vision for the thing in your personal life, Maybe not even in business that that you're excited about and that really gets you out of bed every day.
00;11;06;00 - 00;11;35;18
Tom Laune
So what I'm the most excited about right now is really deepening my connection with my family because I'm a pretty hard charger and I love business, right? And so making it work has had its, you know, strain on my family life. So I definitely am focused and really excited about, you know, spending more time with my family than ever and really being home more.
00;11;35;18 - 00;11;58;27
Tom Laune
That is one of the cool things that happened in the in the COVID era, if you want to call it that, is that people got used to being on Zoom. Okay. Prior to that, Stephen, I had an office in a commercial location and I was doing in-person meetings a lot, you know, and that just all went out the window, you know, completely.
00;11;58;27 - 00;12;29;10
Tom Laune
And so it allowed me to pursue more of a dream lifestyle, if you might want to call it that, because I was able to move out into a rural setting where I could get my kids outdoors and I have a 13 year old boy and my daughter just turned 18 and is super exciting to be able to be in a place where we can really have more a more time and more buffer, I guess, to enjoy ourselves.
00;12;29;13 - 00;13;07;21
Steven Pesavento
Yeah, because it's it's you grind and you go after something and you create this new career, you make that transition, you make the money and the income. And then fortunately, we had this gift, which was by all means very difficult, but we had this gift that ended up changing the rules of business, and it actually allowed you to see for yourself that it was possible to do your business in a different way, because we saw that it was possible people were doing it, but it was in that in that ecosystem of how you would ran your business, that it felt like, Oh, I need to be connecting with these people face to face in person.
00;13;07;27 - 00;13;26;01
Steven Pesavento
And that allowed you to actually step out and create more of that, that business the way that you want to. And what I'm curious about your your high income earner, you work with a ton of high income earners. People are paying a lot in taxes. And I know you've looked at a bunch of different strategies. Of course, you're not a CPA.
00;13;26;01 - 00;13;37;02
Steven Pesavento
This is in tax advice. But from your experience, what are some of the strategies that you've used to be able to reduce or eliminate active income and be able to save a ton on taxes?
00;13;37;04 - 00;14;05;02
Tom Laune
Stephen There it is very, very, very difficult. There's really two main categories that that reduce active income. Of course, there's a lot of things that I don't do right now because they're just getting so incredibly they're just getting to be such hot button triggers like conservation easements. Right? I've stopped doing those a couple of years ago. I don't know if you have many.
00;14;05;07 - 00;14;18;08
Steven Pesavento
Of those used to be those used to be, you know, the widely accepted way to be able to reduce active income is you invest in a conservation easement. Why don't you explain what that what that was just as an example.
00;14;18;10 - 00;14;52;08
Tom Laune
Absolutely. So a conservation easement would work like this. You could put in, let's just call it $100,000 for round numbers and it would generate somewhere between a 4.8 and a 5.5 multiple on that as a deduction on your active income. So if you put in $100,000 at 5.2, you'd get $520,000. Not of you wouldn't get $520,000 of cash, but you would have you'd be making 520,000 less.
00;14;52;08 - 00;15;12;20
Tom Laune
That's a write off. So if you were in the 40% income bracket, take five, 20 times point four, and that's how much less you're going to be paying in taxes, which obviously is more than the 100 you put in. So it's just those types of strategies, but they're getting more and more frowned on, you know, too. And I don't do it.
00;15;12;23 - 00;15;39;07
Tom Laune
I don't do it now. It's like, hey, we're putting the brakes on that, all right. And the brakes on that. So another thing that works against active income is energy, right? So anything in the energy space, The problem with it is, is it's so highly speculative, right? You literally can lose everything. Okay? It's like, okay, this this may hit this may not, you know, on on oil drilling or whatever.
00;15;39;07 - 00;15;58;24
Tom Laune
So there's that and then there's solar is another interesting means by which you can write off active income. So there's there's just a very few things. And then of course, there's the living in Puerto Rico for six months out of the year, 181 days, which I know a lot of people.
00;15;58;24 - 00;16;02;09
Steven Pesavento
Who have family who's done it for the last ten years, and.
00;16;02;11 - 00;16;02;23
Tom Laune
They do.
00;16;02;23 - 00;16;04;21
Steven Pesavento
50% on taxes. Yeah.
00;16;04;24 - 00;16;34;02
Tom Laune
I mean, you know, if you can make that work for you, that, of course, is the coup de tar. But the thing is, is there's this cloud hanging over that that they may change it at any year. It's always there's a threat of it going away. And I will say that the IRS is absolutely going after Puerto Rican US citizens who do that strategy just to make sure they're 100% compliant and very.
00;16;34;04 - 00;16;35;22
Steven Pesavento
You have to check every box.
00;16;35;22 - 00;17;10;26
Tom Laune
Oh, my gosh. Yeah, you have to do it. Very vague. Don't be saying you're down there and then not be down there. Yeah, that is that is what a huge no no. And they're very much aggressively going after that. So in terms of offsetting active income, the other thing would be getting a spouse that maybe could qualify as a real estate professional and then being able to invest in real estate and have that be able to and a joint household income be able to offset active income is another really good possible strategy.
00;17;10;26 - 00;17;20;18
Tom Laune
You know, I know a lot of people who do that as well. I mean, real estate is the bomb, right, Stephen? But we all can be real estate professionals. That's the problem, you know?
00;17;20;18 - 00;17;48;23
Steven Pesavento
Well, that's the tough thing if you're making active income and you're spending majority of your time making that active income on a business, that it's difficult for you as an individual to be a real estate professional because by the the rules that I understand and the regulations that I've read, if you spend 700 hours doing real estate activities and it has to be that the majority of the time you're spending doing any business related activities.
00;17;48;29 - 00;18;15;20
Steven Pesavento
So as somebody who is running a business or in your case, who is a financial adviser and insurance provider, you're spending majority of your time and you're earning that income actively on your personal income statement, rest on a business. And so that makes it difficult. Now, if your spouse happened to be at home or happened to have a job but was able to step out of that career because you're making so much more money by saving on that.
00;18;15;20 - 00;18;45;26
Steven Pesavento
I've seen a ton of people who would who the the husband or the wife is a doctor and they're making a half a million or $1,000,000 a year. And the other spouse was a nurse. And that person, the nurse ends up leaving. And by becoming a real estate professional using depreciation or write off that active income, her salary, which was once 150 with the tax savings, is now equal to 250 or 300 or 400,000 in the value that she's getting from doing that.
00;18;45;26 - 00;18;57;15
Steven Pesavento
So it can be a really powerful strategy, but it only works if one of your of the two partners is able to spend majority of their time focused on that activity.
00;18;57;17 - 00;19;08;14
Tom Laune
Totally. Yes, that's exactly my understanding of it as well. And again, I'm not a CPA, but that would be an awesome strategy if you can pull that one off for sure.
00;19;08;17 - 00;19;31;26
Steven Pesavento
Yeah. And and yet the reason why we want to save on taxes is obviously because the government puts out this plan saying, hey, we want you to do these activities and you follow the rules and regulations to create that incentive, right. By investing in real estate or oil or solar or businesses, and you're able to have a huge write off as a result.
00;19;31;26 - 00;19;53;18
Steven Pesavento
So you're actually just doing what the government wants you to do in order to take advantage of that. Same with conservation easement. They want you to put money in to conserving land. So they were creating a write off, but then they changed the rules later on. And now long that that strategy no longer is viable, although again, it will likely come back when they clarify the rules.
00;19;53;24 - 00;20;02;17
Steven Pesavento
And so it's all about the cycle of having the right experts around you who can advise you and make sure you're making the right moves.
00;20;02;20 - 00;20;06;17
Tom Laune
Totally. Steve and I couldn't have said that better. Absolutely. Yeah.
00;20;06;19 - 00;20;28;10
Steven Pesavento
And how do you look at finding the right experts? Because you're an expert for many people. You help them put together policies, you help them become their own bank in many ways. You help them with a lot of other things, financial advisement. Sure. How do you look at going and finding experts for yourself, the people who are going to come in and do the things that you're not an expert at?
00;20;28;13 - 00;20;51;27
Tom Laune
Absolutely. Well, I will tell you that, you know, being for me, being in different masterminds has been super helpful because I see who they're using and who I get to meet people in person. My personal CPA works with a ton of real estate investors and I've just been friends with them for a long time. So I have that that element going for me.
00;20;51;27 - 00;21;17;00
Tom Laune
And I just am always wanting to make sure that the people I'm working with are vetted and, you know, they come recommended by not like I did in the music industry. People who don't know what they're doing become recommended from people who actually do know what they're doing, you know. So that's the way I usually find people is just through networking.
00;21;17;02 - 00;21;42;05
Steven Pesavento
I think those recommendations as they have to come from people who are truly, really good at finding those kind of people. It's people like you and me who have got great networks and relationships, and we spend hundreds of thousands, if not millions of dollars building those relationships. And yet at the same time, what I've found is, is I'll often go out and a CPA, for example, or an attorney often and hire that attorney that was recommended to me.
00;21;42;09 - 00;22;04;15
Steven Pesavento
And then I'll have a second attorney review the work. And once I have that trust, once I've seen that the work quality is really good, then I know that person is someone that I can trust. Same with the CPA. Now you might say, Hey, while you're spending a little bit more money doing that, but you're also getting that assurance that you have a second opinion and that you are understanding why they're saying something is either good or bad.
00;22;04;21 - 00;22;09;17
Steven Pesavento
You're getting educated in that process. So then you feel a level of confidence yourself.
00;22;09;19 - 00;22;15;25
Tom Laune
Totally. That's a great idea. Steve And yeah, having that back up person, look at it yet.
00;22;15;27 - 00;22;27;28
Steven Pesavento
When that when it comes to investing, you know you've obviously put a lot of money into a variety of investments from real estate to ATMs to a variety of other strategies that are out there.
00;22;27;28 - 00;22;28;16
Tom Laune
Yeah.
00;22;28;19 - 00;22;43;06
Steven Pesavento
How have you looked at investing and then how have you used some of the vehicles that you work with your clients in order to be able to not only make those investments but be able to make them and create the best return in the safest way possible?
00;22;43;08 - 00;23;16;16
Tom Laune
Yeah, totally. Steve And, well, what I let me just back up for one second and just say that what I'm teaching people to do is to essentially implement an interest rate arbitrage strategy, meaning that they want to have their money growing and they want to have access to it at a very, very low cost of capital. And then they want to take that capital and put it into something that is going to earn a greater rate of return than their than they're paying for the use of the money.
00;23;16;16 - 00;23;53;19
Tom Laune
And that puts them in the position of exactly what banks do. That's literally how banks make money. And so I always am saying, look, if your cost of capital, for example, is 5.7% and you are looking around for an investment opportunity, you know, unless it's going to be a differential that makes sense for the amount of risk you're taking and just don't do it right, because if you don't invest, you're going to be earning 4 to 6%, you know, on a on a tax deferred basis.
00;23;53;26 - 00;24;15;13
Tom Laune
So you've got to have something out there that makes it worth the risk. And, you know, honestly, I'm thinking in my mind, I look for at least a double meaning, like if I'm going to buy a cost of capital is 5%, I'm going to be looking for investment opportunities that are going to yield ten, right? Because obviously that depends on the amount of risk that you're taking.
00;24;15;19 - 00;24;47;01
Tom Laune
But some of the things that I've personally done that I really enjoy is ATM investing. That's definitely one of them. And the reason I like it is because it's a very, very significant in an up and down industry where you're getting on steady income, it evens your income out because basically you give them a lump sum of money, you get bonus depreciation in on it and then you get a seven year payback of a very fixed monthly amount.
00;24;47;04 - 00;24;49;23
Tom Laune
And that's super nice, right?
00;24;49;26 - 00;25;27;08
Steven Pesavento
And it's one of the big benefits of investing in private equity and businesses is those businesses, they need money to operate and they're willing to, because of the way the numbers work out for them on the back end, they're willing to give you that fixed rate of return. Yeah, that you can then borrow money. And so what you're really talking about with interest rate arbitrage, a simpler version of saying that is you're essentially saying, hey, I'm going to borrow money here at 5% and I'm going to lend out money over on the other side at ten or 15 or 20 or 30%, and you're going to make the difference.
00;25;27;14 - 00;25;37;03
Steven Pesavento
And the benefit is not that, okay, if you're borrowing it at five and lending it for ten, you're not making five. You're actually making a compounded return. Why don't you talk a little bit about that?
00;25;37;03 - 00;26;06;21
Tom Laune
Is Sure. That's a it's a good point, Stephen. So people obviously get a little bit they're normally not used to thinking in terms of percentages and I've grown really a accommodated I mean a you know, accustomed to doing that. So if you're borrowing money at 5% and you're making 10%, you're actually earning 100%. That's your rate of return you're earning because you're not spending all of the money to do the investment.
00;26;06;28 - 00;26;33;19
Tom Laune
You are literally just spending the 5%. That's all you're doing. Now. The magic happens when all of the money that you're you is using to collateralize or borrow against is also earning money as well. That's that is where it's like really exciting. So if I'm borrowing money at three 5% and earning 15%, that's a 200% rate of return I'm getting.
00;26;33;25 - 00;26;56;16
Tom Laune
And then I'm also growing that portfolio or that that pool of money at about 4% as well on top of that. So it actually works out extremely well and that's why people like to do the strategy of basically creating a privatized bank inside of life insurance. So it's what I personally do myself. So I eat my own cooking.
00;26;56;19 - 00;26;58;09
Tom Laune
I've been doing it for ten years.
00;26;58;11 - 00;27;15;24
Steven Pesavento
Yeah. And so what's so interesting is this same strategy, just in terms that everyone can understand if you're borrowing money, for example, against assets that you own and let's just simplify and then we'll come back to the banking example. If you're borrowing money from your home equity line of credit, for example.
00;27;16;00 - 00;27;16;10
Tom Laune
Yes.
00;27;16;11 - 00;27;40;29
Steven Pesavento
You're going to borrow that money. Let's use numbers that are simple, not rates are today. You're going to borrow that money at 5% and you're going to loan it out at 15. Now you're making a 200% return, but you still own that home and you're borrowing that money. So their appreciation on the home continues to grow and yet you've loan that out and now you've taken money that was just sitting dormant and you've been able to create a return.
00;27;40;29 - 00;28;04;25
Steven Pesavento
And this is what the wealthiest people do. When you hear about people with tens or hundreds of millions of dollars, they're oftentimes taking a loan at a low rate interest against assets they already own. And then they're going out and they're buying businesses, they're buying homes, they're buying whatever they're looking for, and then they'll come back later and refinance that or do some kind of arbitrage using that money.
00;28;05;00 - 00;28;29;23
Steven Pesavento
And what you're talking about is using an insurance policy to be able to create that same asset where you're funneling cash into the insurance policy and you're using that to be able to store the money in a way that's not only secure against creditors coming after you, but you're also you create a rate of return from the insurance company that's paying you on that money that you're earning.
00;28;29;23 - 00;28;33;21
Steven Pesavento
And then you can borrow against that and lend that money out.
00;28;33;23 - 00;29;00;21
Tom Laune
It's very well said. And and Stephen, what I often talk about is comparing this to a home equity line of credit, because in the financial world, that's the most simple thing that people understand. I think the big difference between doing an insurance backed line of credit versus a home equity backed line of credit is that when you utilize a home equity line of credit, you're actually hurting your credit score, right?
00;29;00;21 - 00;29;31;23
Tom Laune
It is counted against your debt to income ratio. And and that is not good when you're using a life insurance line of credit. You're not doing that is completely off the radar of the IRS. And it's just you know, the other big thing is that the interest is not required to be paid back like a home equity line of credit, which is super nice for different types of investing to be able to wait until the investment funds or sales before you pay it back.
00;29;31;25 - 00;29;45;04
Tom Laune
So that's one of the things that I you know, I really appreciate myself and I know a lot of the clients that I work with. Appreciate that as well. So those are a couple of the big differences, I guess, between the two.
00;29;45;06 - 00;29;59;18
Steven Pesavento
And we're not going to get into all the details on this show. We'll have to have you back to kind of dive into all the details. But just yeah, that's fine. As a reminder to folks out there, will you tell them kind of the difference about what you're talking about versus what used to be done in the past?
00;29;59;23 - 00;30;08;20
Steven Pesavento
Because I think there's been kind of a lot of confusion. There's a lot of people talking about this today, and there's a right way to do this and there's a wrong way.
00;30;08;22 - 00;30;28;24
Tom Laune
Well, you know, there is a lot of people spreading, confusing misinformation about what I do, and it drives me crazy, Steve, And to be honest with you, because they often talk about borrowing from yourself, they say, oh, I'm just borrowing my own money. And I'm lending, you know, that's why I'm paying myself back. And none of that's true at all.
00;30;28;24 - 00;30;49;03
Tom Laune
The way it really works is that you're borrowing the insurance company's money and you're paying the insurance company back. Another myth out there that is really gotten crazy popular is that you can somehow make money just by taking loans. Like even if you are going to just go buy your own personal vehicle, you're going to make money on it.
00;30;49;03 - 00;31;08;12
Tom Laune
Well, it doesn't work like that. You have to have something that you're investing in that is paying you a higher rate of return than what you're paying to the insurance company. So I try to come in and demystify the whole thing and explain it to people like it really is so that they go, Yep, this all makes sense now that I know what's really going on.
00;31;08;12 - 00;31;17;06
Tom Laune
It's not some sort of magical unicorn, you know, thing that you know where people like, I don't get it. It doesn't make sense why you do that, you know?
00;31;17;09 - 00;31;40;00
Steven Pesavento
And I think the thing that I'll say before we move on, kind of the last section of the show is one of the things I appreciate about your time is that you're one of those guys who seems to know everything about this industry, every little detail, every little nuance, each individual piece being so important. And when we first met, you were so focused on sharing all of that information that sometimes is overwhelming.
00;31;40;03 - 00;31;51;26
Steven Pesavento
But I've seen that personal growth that's happened where you've learned to be able to communicate this in a way that anybody can understand it. And the truth is, once people understand the value of it, it becomes absolutely a no brainer to do.
00;31;51;28 - 00;32;08;17
Tom Laune
Oh, that's cool. Steve and I really appreciate you saying that and it has taken a long time. You have to know something inside out and do it yourself before you can be able to go, okay, I'm going to just kind of cut through all the B.S. on this and tell you what's really going on. So so before.
00;32;08;17 - 00;32;13;01
Steven Pesavento
We get to the last question, how can people find out more about you or kind of follow along?
00;32;13;04 - 00;32;45;20
Tom Laune
Yeah. So bulletproof wealth dot info is my website. And what what I try to do to make things super easy is I have a library of all kinds of different events that I've spoken at, and I have an educational library of talks that I have all different kinds of topics and where you can really learn what I'm teaching and all you do is go to my website, Bullet Proof Wealth dot info instead of dot com dot info to sign up to get those videos.
00;32;45;20 - 00;32;58;09
Tom Laune
And then if you want to talk with me, there's a link to book a time to talk and we'll go over your personal situation. So that is generally the easiest way. And of course I'm on Facebook and everything else as well, but.
00;32;58;11 - 00;32;59;07
Steven Pesavento
All the places.
00;32;59;07 - 00;33;00;17
Tom Laune
Tom Yeah, yeah.
00;33;00;17 - 00;33;20;01
Steven Pesavento
What, what as we wrap up, what advice would you give to those folks who are at a point where they know that a change is necessary? They're feeling that resistance, they're feeling that fear. They they wish things were the way they used to be, but in reality, they know they need to accept it and move forward. What advice would you give to those folks?
00;33;20;03 - 00;33;45;05
Tom Laune
I would say just take a deep breath and step into the fear and go and just make that change. Because just putting your head in the sand ultimately is going to make it worse. And it is just something where, when, when, you know, a change is on, you just go ahead and, you know, try to make the best of it and move forward.
00;33;45;12 - 00;33;57;22
Tom Laune
You know, even if you're not confident in what you're doing moving forward, getting started, making the first step, confidence will grow as you as you begin to do execution.
00;33;57;25 - 00;34;12;19
Steven Pesavento
Yeah, Well, so great hearing kind of your story of going from something you love and finding that path toward something else that you love and that is profitable and helps a lot of people. So I really appreciate you joining us. Thanks for listening to the show and we'll see you on the next episode.
00;34;12;22 - 00;34;13;20
Tom Laune
Thank you, Stephen.