Today, I’m excited to welcome Mike Olson, Partner and Founding Member at WealthPoint, LLC. With over 25 years of experience in financial and insurance planning, Mike has dedicated his career to helping affluent families and business owners unlock clarity in complex financial decisions. He holds multiple professional designations—CLU®, ChFC®, CFP®, and MSFS—and is nationally recognized for his expertise in structuring insurance solutions that fuel business growth.

In today’s episode, we’re diving into a powerful and often overlooked strategy: how e-commerce entrepreneurs can use insurance to fund inventory cash flows. Mike is here to share how these creative financial tools can give Amazon sellers and online business owners the liquidity and leverage they need to scale sustainably from 7 figures to 8 and beyond.

> Here’s a glimpse of what you would learn….

In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley interviews Mike Olson of Wellpoint LLC about using life insurance as a strategic financial tool for e-commerce entrepreneurs. They discuss how established business owners can leverage specially structured life insurance policies to fund inventory, manage cash flow, and scale sustainably, while also gaining tax advantages and creditor protection. The episode covers the pitfalls of traditional financing, the importance of disciplined policy funding, and actionable steps for building a financial “war chest” to support business growth and personal security. Mike also shares insights on technology, AI, and economic resources.

Here are the 3 action items that Josh identified from this episode:

Special Mention(s):

Related Episode(s):

Sponsor for this episode…

This episode is brought to you by eComm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures.

I started Hadley Designs in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

If you’ve hit a plateau and want to know the next steps to take your business to the next level, then go to www.EcommBreakthrough.com (that’s Ecomm with two M’s) to learn more.

Mike Olson 00:00:00  This is for the entrepreneur that has a profitable business. You don’t start putting your first dollar that you’re saving into insurance, right? You still have a balance sheet. You have some cash. Your business has a strong kind of cash reserve to support it. Personally, you have write a savings account for bills. So this is kind of that add on. Once you have a successfully profitable business and now you’re trying to optimize efficiency.

MC 00:00:32  Welcome to the Ecomm Breakthrough podcast. Are you ready to unlock the full potential and growth in your business? You’ve already crossed seven figures in sales, but the challenge is knowing how to take your business to the next level.

Josh Hadley 00:00:46  Before you take out a loan for your business, you need to listen to this podcast first. Imagine having the ability to unlock liquidity right when you need it most without the headaches of traditional financing. That’s exactly what we’re going to be talking about today. Welcome to the Ecomm Breakthrough Podcast. I’m your host, Josh Hadley. I scaled my own brand from 0 to 8 figures in sales, and now my mission is to take it to over nine figures on my journey to nine figures, I bring you unfiltered conversations with the smartest minds in e-commerce.

Josh Hadley 00:01:17  Past guests include Kevin King, Michael E Gerber, author of The Myth, and Matt Clark from ASM. Today, I am excited to welcome Mike Olson. He is a partner and founding member at WellPoint LLC. With over 25 years of experience in financial and insurance planning. Mike has dedicated his career in helping affluent families and business owners unlock clarity in complex financial decisions. He holds multiple professional designations CLU, SFC, CFP, and MSF and is a nationally recognized for his expertise in structuring insurance solutions that fuel business growth. In today’s episode, we’re diving into the powerful and often overlooked strategy of how e-commerce entrepreneurs can use insurance to fund inventory cash flows. Mike is here to share how these creative financing tools can get Amazon sellers and online business owners the liquidity and leverage they need to scale sustainably from 7 to 8 figures and beyond. With that introduction, welcome to the show Mike.

Mike Olson 00:02:23  Thank you. Josh. Nice to participate.

Josh Hadley 00:02:27  Mike, it’s great to have you on the show and I’m excited to share this kind of like with the audience because for the last decade I have heard about, you know, life insurance and the infinite banking concept and the bank on yourself kind of concept.

Josh Hadley 00:02:45  And there’s a lot of like, go check it out. There are books, there are YouTube videos. I’ve heard it on numerous podcasts where it’s like, hey, you need to make sure that you are the bank and you fund your you fund a big life insurance policy, and then you continue to loan against yourself. And every time, you know, I looked at doing that, it it just did not add up and it just did not make sense. And so what I love is that when we started working together with you over five years ago, you painted a very clear picture of like for the first time, I understood why it made sense to actually like build a little war chest, an amount of money in a life insurance plan that would then allow me to leverage it for business use when I needed to. So with that, Mike, I want to dive further into this, but just for further context for the audience, this is all for entertainment purposes only. None of this is financial advice or recommendation.

Josh Hadley 00:03:49  I am just a podcast podcast host and some idiot on the internet talking. So, consult your your, CPAs, your own wealth advisors. those that are experts. This is for entertainment purposes only. But, Mike, tell me your experience. You’ve been in the life insurance world for a very long time. You’ve heard people pitching whole life, infinite banking policies. You kind of have steered us away from those whole life infinite banking policies. And I would love for you to share the reason why with the audience and, why what you do is so unique.

Mike Olson 00:04:25  So I think that the our industry, the life insurance industry has very good marketers of concepts or strategies that they’re selling. And with that comes a generic approach to a client situation versus really taking their personal balance sheet, cash flows, timing of cash flows, net worth, family dynamic and then building the appropriate insurance design with all of those inputs. Versus hey, just buy this. So I think there’s a little bit of a marketing predatory issue going on.

Mike Olson 00:05:07  Here’s entrepreneurs to use this concept. My challenge has always been the thought process of this insurance policy. We’re going to put the money in and we’re going to take it right back out, and we’re going to borrow it, and then we’re just going to keep spinning it. I do believe insurance as this bank is a phenomenal strategy, but I think there’s a couple caveats to that. One of those is, let it build to create a war chest to use versus put it in and then take it out right away. creates more efficiency. And then two is how do you build the right type of insurance policy to do that with the generic kind of foundation? From the beginning was using whole life contracts and a strategy or a definition of fully participating non direct recognition type whole lives. Was the original concept and strategy. I was at New York Life for about ten years of my 30 year career where that was promoted. The challenge with the whole life structure is that the flexibility of timing of premiums, dropping of death benefit all these different things you can do to create the most efficient life insurance policy.

Mike Olson 00:06:35  And when I say efficient, I mean the the less the internal costs are, the more efficient your money is. So you have to do all these different things to build it to minimize that cost and structure and life happens. So different timing of you think cash flow is going to come in and they don’t or all those different things. You need flexibility in your policy to adapt to being a business owner, right. not taking the paycheck for six months because you’re paying employees and cash flows and those kind of inventory like we’re going to talk about today, those kind of things. so I think the right structure, it’s fitting the very specific person’s objectives in designing it that way. and then the last thing is, is rate of return. What’s the the largest rate of return you can get while still having a very, very, very conservative, strategy so that instead of getting a 5% return on your money, if you can get a six and a half right over 30 years, that’s a lot of different.

Mike Olson 00:07:46  That’s It’s a lot more money and a lot more growth. So I think the whole life kind of puts a governor on your potential, up your upside or your return that you can get over a long period of time. That can be millions of dollars depending on how you’re using your insurance. So those three things have really changed. My strategy of of how do you really do this the right way?

Josh Hadley 00:08:11  I love that. Now, Mike, for our listeners that are maybe new to this concept, they’re like, what are you what are what in the world are we talking about? You’re talking about life insurance. Wait, I’m I’m buying insurance. And then I’m supposed to put it into this account, and then you’re saying it can grow? but then you’re also saying I can take a loan against this money. So for our listeners that are, like, brand new to this concept of, like what? What are you talking about? A whole life insurance policy or life insurance and banking on yourself? Could you maybe break this down into, let’s let’s make it easy for a second grader to understand what’s going on here at play with this life insurance.

Mike Olson 00:08:54  So the whole reason life insurance is even in this conversation is the life insurance chassis itself has tax advantages. So you can put cash value or premiums into the policy. And then that cash value can grow tax deferred. And then when you take a loan you can borrow from your policy, pay it back or not. But that’s an issue to have a conversation around. And then they just withhold the death benefit from the they reduce it by the loan. but that’s tax free. So in reality it kind of functions like a Roth IRA from a tax perspective. In addition, depending on the state of domicile, there’s creditor protection. So a lot of entrepreneurs and business owners love the creditor protected aspect, as well as the tax wrapper that you get. So the theory is great is you load up your policy with cash, it grows tax deferred, and then you can borrow from it for whatever strategy you’re trying to implement in your business. It could be for real estate. It can be for inventory. You pull that money out in those loans that you’re borrowing from.

Mike Olson 00:10:13  Your policy are relatively low compared to the traditional banking world in a normal environment. Now, five years ago, it’s a different story. But in a traditional environment, the loan rates that you’re borrowing from are less than the, the bank opportunities and other options, hard money lending and, strategic strategies, strategic alliances with, you know, Amazon, things like that. And there’s flexibility on how you pay it back. So there’s no control mechanism of, okay, I’m going to give you this money. Now here’s how you have to pay it back. It’s very flexible. So you’re basically just using this insurance shell, this creditor protected shell as a place to put assets into, to create this war chest of money that you can use in the future and not have a tax consequence tied to its growth.

Josh Hadley 00:11:10  Yeah, I absolutely love that summary there. So let’s dispel this. So now I’m going to apply this maybe into the e-commerce world a little bit so that the entrepreneurs can kind of like maybe just get your minds going of like how you might be able to implement this.

Josh Hadley 00:11:24  So what Mike is saying is like, all right, let’s say your business spit off some cash, right? You have some profit at the end of the year, rather than just taking that money and saying, hey, I’m going to go, let’s go dump this into the S&P 500, right? Or let’s go dump some money into my Robinhood stock account. You could do that. And you could pick some winners in that stock account. And it could. You could ride a big wave, but you could also lose some money. But one of the unique aspects is that’s not necessarily credit or protected. And it’s not tax efficient as well. So if I were to want to take that money out, right, I would have to sell the and sell the stock. Right. You know, we could also talk about, you know, margin we could talk about loans against your investments as well. That is a separate strategy. But what I think is unique about the life insurance policy is that it is actually tied to something.

Josh Hadley 00:12:24  There is a death benefit. So for me, I’m going to go open up a life insurance policy, maybe against my wife so that I’m the beneficiary of that and then vice versa. She has one on me. So she’s the beneficiary of my life insurance policy. And then what we’re going to do is we’re going to take off, take some excess cash, that we get net profit from the business. I’m going to put it into this life insurance policy, and I’m going to end this life insurance policy, depending on how you structure it, which is why Mike is on this. There are different policies that allow you to participate in the market up until a certain degree. So, you know, if the market’s crushing it, maybe you could get a 10% return. But it all depends on the actual policy that you have and how that’s written. but you get to participate in the upside of the market. And here’s also what I love about the life insurance chassis. There are certain policies where it has either a 1% floor or a 0% floor.

Josh Hadley 00:13:26  So let’s say the market crashes and it’s down 50% and you lost 50% of your money if you invested it into Robinhood stocks. Right. But if, on the other hand, it’s in this life insurance policy. Your life insurance policy did not decrease by 50% like the market. Did you have that floor of 0%? So even on the worst year, your worst year is a 0% return on your money, not a 50% loss. And so you’re perpetually growing that money and it’s creditor protected. So let’s say you sold something online and you’re but got sued. Right. And now they’re coming after your personal assets. Well they can’t touch that depending on, you know, where you’re domiciled, right? Where you’re living. There’s different states and things like that. But that’s a unique advantage. In addition to that, you’re able to loan against this. The money continues to greet to earn like or I guess obtain interest and growth that is tax deferred. So if you are like, hey, I do want access to my money, Honey, you could go.

Josh Hadley 00:14:35  Say, you could go. Pull out that money. And a unique aspect of this is that if you take out that money, you’re going to have a a cost of the interest for that capital. However, another thing we’ll dive into, Mike, is all right. Let’s say the interest rate that they’re saying. Yeah, it’s going to be 5% interest. However, let’s say you’re in one of those participating loan structures where you have the ability to like, keep your money, or your policy value can grow with the market. So let’s say the market performed well and you get a 10% credit. Right? Well, now you’ve just arbitrage. Your money has now grown in two different places. You pulled out the money. The cost of capital is 5%. Right. But then your policy value also grew by 10% at the same time. And so now you’re kind of you just arbitrage 5%, of interest on that. So I wanted to just explain that in like simple details for like the listeners to say, like it is a place where you can store money that will continue to grow and this can become like in retirement ages, right? Which is where a lot of people like leverage, like the whole life policy is like when you get to a certain age, you can begin taking money out of that policy.

Josh Hadley 00:15:56  If you’re retired and not making any income, whole money out, that’s tax efficient for you, in tax efficient years for yourself. And so it’s also setting yourself up for retirement because I believe, like one of the biggest things like entrepreneurs get stuck with is like we’re always very optimistic, very overconfident in ourselves. And there’s always going to be hiccups along the way. But if you’re just constantly saying like, oh, we got all this net profit, either a, I’m going to go take vacations, buy a second home, or I’m just plowing all the money back into the business. I love that the life insurance chassis, like almost forces you to save for your future retirement, and also builds a massive war chest that I would argue becomes one of your biggest competitive advantages in the e-commerce space, because you’re now going to be able to access capital at. What I would say is like one of the lowest cost of capital that you could probably ever find. It’s truly like you’re banking upon yourself. So, Mike, I know that was like a mouthful.

Josh Hadley 00:17:00  Correct me if I said anything wrong or elaborate further on any of those topics.

Mike Olson 00:17:04  So I think a couple key points is one is this is for the entrepreneur that has a profitable business. You don’t start putting your first dollar that you’re saving into insurance, right? You still have a balance sheet. You have some cash. Your business has a strong, kind of cash reserve to support it personally. You have. Right, a savings account for bills. So this is kind of that add on once you have a successfully profitable business and now you’re trying to optimize efficiency, and the higher tax bracket you are in, that’s where the tax leverage really has a lot of benefits, right. So if you’re making $1 million plus a year, right, you’re going to be in the highest marginal tax bracket. Great. That’s where a lot of the leverage is going to occur. So the assumption is is that’s the type of profile entrepreneur or e-commerce entrepreneur that’s truly using this. the other thing that I wanted to add is I use this word Roth.

Mike Olson 00:18:06  Right. That has the same kind of tax benefits. A Roth is fantastic. And if we could all do a Roth and put in, you know, millions of dollars, we’d all do it. The unfortunate part is you can’t fund it like that. The other challenge with the Roth is once the money’s in there, if you take it out, you can’t just put it back in versus the insurance. You can take it out, put it in. Take it out. Put it in so it has the ability to have to use multiple, multiple times right. In your business. And still maintain that tax structure versus a Roth once it comes out. Now it’s in the taxable world. So that’s a huge benefit. The beauty of having your balance sheet diversified to use this bank at strategic times. Sometimes it makes sense to go to a bank because of their interest rates and get a line of credit. Fantastic. Do that. But you’re always you have this war chest that you’re comparing to your options of financing to say what’s going to create the best outcome.

Mike Olson 00:19:13  For me from a pure cash flow standpoint, interest rates, you know, scenario, timing. so you always have that. So it’s not that you would always go here, but you’re going to look at your options and say, great, this is the most strategic place for me to go to get money based off of the interest rates for this, this option, this option, this option. So it’s that flexibility of having choice. Right. And as an entrepreneur, you know you can’t always control timing and and all that kind of stuff. So it just gives you this war chest of money to have access to tax efficiently, but also to compare it to other options to get money.

Josh Hadley 00:19:54  Yeah. Well summarized there. And I think it also just adds like a level of safety net for an entrepreneur. Right. It becomes an option. It is not the only option for capital. And it’s not always the go to, to be honest with you. And I love that you talked about that. So like let’s now like do some scenario planning for our audience here to say like, all right.

Josh Hadley 00:20:16  Like, okay, I kind of get what you guys are talking about, but like, when would I ever loan against this policy? Because, Mike, you said a lot of the guys that are going to pit you on this like whole life policy. They’re going to say, hey, you want your money growing in two places at once, don’t you? So put money into your whole life policy, then immediately take out money. It’s still going to grow in your whole life policy, because that’s part of the guarantee is like you’re growing, right? The policy value is always growing. But now you’ve got this capital that you could go arbitrage that interest rate. So yes, there is a cost of capital. But why don’t you go invest this into the next real estate deal. Now your money’s growing in this whole life insurance and it’s growing in this, this real estate deal. And as you mentioned, like the flaws within that is like you’re just constantly trying to recycle capital in there. And that’s where you have seen from your experience.

Josh Hadley 00:21:12  Like most of those policies just blow up over time because like something happens, you don’t get the liquidity event you were expecting. You can’t pay that back. Then you run into a whole host of tax consequences because your policy lapses or kind of blows up. And so I think that’s the first thing for people to understand is like, again, if you’ve heard of that infinite banking policy, like what we’re about to share with you, how to use this in the e-commerce world is very different, and I would say is like a very strategic use of why of how you could leverage life insurance efficiently. Does that sound good, Mike?

Mike Olson 00:21:51  Yes. Perfect.

Josh Hadley 00:21:52  All right. So the scenario would be this if you have to make a large purchase of inventory, that’s that’s kind of like above your normal expected inventory purchases. Like let’s say you’re ramping up for Q4, right? And for most e-commerce owners, like Q4 is where they could do 60, 75% of their entire sales the entire year. And so the amounts and payouts that they’ve been getting earlier in the year from there like summer sales, right? The Q2 sales and things like that.

Josh Hadley 00:22:26  It’s not overly meaningful. But now they’ve got a place, a really large Po from their from their supplier, their manufacturer, and now they’ve got to sit on all of that inventory and now wait for it to be sold during Q4. And then it at the end of Q4 in January, that entrepreneur is going to be flush with cash. I think most entrepreneurs can relate to that. It’s like, I’ve got to take this big bet. I’m buying a lot of inventory here. I think I’m going to sell it all during Q4, during that Christmas season, after Christmas season, after I wait my two weeks and pay outs and withholding from Amazon. I’m going to get that money back and I’m going to be sitting flush with cash, right? So the but the challenge is the entrepreneur. That’s like crap. I have to make a $200,000 purchase order right now, but I only have $100,000 sitting in my bank account. So what typically ends up happening that I see is two options. Number one, they go get these like I call them predatory cash advanced loans from people that will look at your Amazon inventory and they’ll loan against your Amazon inventory or loan against your Amazon payouts, and maybe fund your payouts so that you get them more quickly.

Josh Hadley 00:23:44  Like when we looked at that, like you’re looking at 20% interest rates, like probably the worst cost of capital that you could find. Like this is hard money lending. Definitely not something I would recommend. and also, if you’re needing to tap into those solutions, like you have something wrong with the margins in your business, so go and fix that anytime you’re needing capital, like either you’re growing really quickly, which is a good thing. And that means you’ve got a, you know, if you’re growing over 25% per year, then yes, that makes sense. Like, you probably need an outsized inventory order that you might not need. The cat might not have the cash for right now. But on the flip side, if you’re like year over year growths, only 10% like, and you don’t have the money to fund that. Like something’s going wrong in the business in your margins. All right. So there’s the predatory capital. And again, the challenge I see there is most people that begins the death spiral of like you’re perpetually taking out loans at that point because now that inventory purchase like tack on an extra 20% and that’s how much you’re paying is a premium to use somebody else’s money to fund that POA.

Josh Hadley 00:25:00  On the other hand, the more efficient cost of capital is going to be kind of like a traditional line of credit, right? That is meant to be paid back within less than a year, for sure. But maybe you just need to leverage it. And in the AR scenario, you’re making this Po in July. You know, you’re going to have all the capital in January. So you’re like, oh yeah, this is. This is like a six month bridge loan for myself. Right. To just like, I just need to get through here. I’m sitting on a lot of inventory. I realize it, but I can see the ROI over here. So this is a temporary situation. This is where I would say, Mike, depending on the interest rate environment right now as we record this. Interest rates are on the high side. And so with that being said, I then think like the most the like the best cost of capital that you could find would arguably be your life insurance policy.

Josh Hadley 00:25:58  If you have built that up to where let’s say you’re you’re missing that $100,000 gap, right? Let’s say that over the last five years, you’ve been putting in 20 K per year into this life insurance policy, and it’s grown. So you have $100,000 you could actually take out from that life insurance policy you loan against it. Okay, now here’s your $100,000. You now have a total of $200,000 to place that Poh sales go as well as you expected in Q4. And then in January, you’re flush with cash. You then take that $100,000. You then put it back into that life insurance policy, just like you would have to pay back a, a line of credit, just like you would have to pay back those predatory lenders that are giving you those cash advances from Amazon or from Shopify. Okay. Just as like you would have to pay them back, you instead of paying a bank back and giving them a little bit of margin on that interest rate, guess who gets that margin? You get to keep that right.

Josh Hadley 00:27:10  And especially if again, depending on how your life insurance policy is set up, your policy value could have grown while that loan is out. And so your money is effectively worked in two different places. And if you structure it properly, the interest you take or the interest you pay yourself. Right. I would rather me be the bank so that the business is paying interest to me, rather than paying another bank that money. So and then you’ve got to pay it back. And I think that’s the that’s the critical component here, Mike, that we need to talk about, which is like this is not free capital that like, you just take it out and you never pay it back again. This is no in situations where like and if you need to take it out, you need to be able to pay it back. But this should not be like hey, rinse and repeat this every month. Dip into this loan against it. Pay it back. It’s this is like I don’t know. How often would you recommend this, Mike? What if you had to do this every July but then pay it back in January? Does that work or would this be an every year thing? Give me your your advice on this kind of situation.

Josh Hadley 00:28:21  Does that mindset and framework work for how we could leverage life insurance?

Mike Olson 00:28:26  100%. The the thing I think that is just really important is when you start a life insurance policy, there’s upfront costs. So it isn’t a short term investment like some of the other opportunities that entrepreneurs have. So when you put in money, it’s going to go backwards before it goes forwards. So that’s why I’m very leery of put it in and take it right out. I’m more of the belief of let it build and time value of money and a tax free state. The longer it’s festering and growing, the more efficiency that occurs. So I’m more of the kind of thought process of start funding it with a couple chips. You take off the table from your business, build it up, and then when there’s enough money in there that you can use it within your business to finance inventory, for example. Great. so that I want to make that assumption that I don’t think you put it in and then take it right back out.

Mike Olson 00:29:27  The other thing is, is I don’t have a problem with doing it twice a year if you’re paying it back. Right. Where where I see the problems is somebody takes it out. This is this happens to be a lot that happens in the real estate world is they put money in. They take it out for a real estate opportunity. And the assumption is I’m going to sell that property, flip it in two years, I’ll have my money. It doesn’t work out that way. All of a sudden that loan’s a lot longer, and then all of a sudden they might have some excess money. But instead of paying the loan back for that initial loan, they go do another real estate deal. And then what happens is that interest never gets paid. That loan never gets paid back. So now you have a really efficient, costly life insurance chassis that’s not doing its thing. So I think to your point, it’s really important that there’s a you go into it with the strategy to pay it back.

Mike Olson 00:30:19  And it could be every six months and that would be fine. the other thing is to kind of way, like you said, as you can leave your money in the life insurance contract in. Right, a more, a little bit more growth oriented environment while you’re borrowing it out to do its thing so you could make some return in addition, some spread. Their worst case scenario, if the market did get a 0% return, for example. And that’s your flaw, you know, your cost of capital was 5%. You could pay that loan back right inside your own policy. So I think it’s just, being strategic with. Great. Here’s what I need to use money for. What are my options? What do the banks look like? What are the other options look like? What is my insurance look like? And then let’s calculate what’s the most efficient way to use your money and be strategic. that’s where you see efficiency leverage and it really working versus the put it in pull it out in this constant spinning.

Mike Olson 00:31:26  It very rarely ever gets paid back the right way.

Josh Hadley 00:31:31  Really good advice there. I think this is an important thing to talk about. which is like when should you when should you get a loan for your business? And we just had Bill D’Alessandro on the podcast just a few episodes ago. So if you did not hear that one, that was all about like finance and accounting and cash flow, being able to grow your business. And that’s honestly one of the biggest weak points for most entrepreneurs. But so go, go listen to that. But we talked about like when does it make sense to actually take out a loan for your business? And the best time to take out a loan for your business is when it’s due to growth. If you are growing significantly, like again, hopefully it’s over 25% per year and your like the the amount of cash and the profit that you’re getting from your previously sold inventory is not able to fund the new purchase orders, right? That then is where like you could justify taking out a loan if it’s outside of that situation and you’re just like, man, I’m not sure where my money went, but like, I need it to to place this purchase order.

Josh Hadley 00:32:45  I would argue like, hey, either reduce that purchase order or you need to take a look at your your margins because something is not working in your business. Charlie Munger, I think, said it best. There are three ways that you can really like. Wreck yourself. Ladies, liquor and leverage. And, I think that’s it. Leverage. Most e-commerce brand owners really get themselves in a sticky situation. That first loan that you take out that’s like against your Amazon payouts or that is against your inventory. Like you, you have now effectively created the official death spiral for your brand, in my opinion, because most of those people I see that they never pay them back. They are perpetually because the cost of capital is so high, over 20%. They’re just constantly taking out loan after loan after loan. Whereas if you need to take out a loan, your mindset and you need to run the analysis, you need to know when you will be able to pay that loan back. Because if you can’t do that math and say, hey, this is when I can pay this alone back then essentially you are gambling.

Josh Hadley 00:34:00  And if you are gambling and you are gambling with a loan and leverage, that’s exactly why Charlie Munger said, like that is one thing that will blow you up, and it will just it will wreck you and it will set you back. Ladies, liquor and leverage. Those are the three things. So the more leverage you invite into your business, the more risk you take on. And so that’s why before you ever take out a loan, you have to have a concrete plan of how you are going to pay this back. How long will that loan be outstanding? If you can’t model that out, I would say stop. Do not take out that loan until you can model that out. If you can model that out and it still makes financial sense. This is where, in my opinion, this bank on yourself policy right with life insurance becomes the holy grail. And the reason why. And again, some people are going to dispute this and say like, no, why would you ever do this? Now you’re putting your own personal capital back into the business.

Josh Hadley 00:35:04  But I would much rather like if I’m taking out a loan, I’m betting on myself no matter what. If I take out a loan from a big bank, like, I gotta be pretty darn confident I’m going to be able to pay that bank back. Otherwise, like, the business starts to fail. So look, if if you’re going to take out the loan with that level of confidence, why not bank on yourself and that like, if you can have that type of mindset, that’s where I think this infinite banking or life insurance like loan becomes the holy grail. Mike, would you agree with that kind of like thought process?

Mike Olson 00:35:40  100%. I would just add the caveat is, if you do have your numbers dialed in and you have good accounting and you can have good projections of when that when you pay that back, you’re also going to have good projections on the growth of your business. So I also would add to those really successful companies that do have enough money that they could pay for that purchase order right up front out of their own cash flow of the business.

Mike Olson 00:36:08  It might make sense to do a loan, and if you have the ability to grow your business faster, right, with additional marketing efforts or whatever that you’re comfortable with, you’re getting leverage. So I think that is something that we’ve seen quite a bit where it’s just where, where am I getting the greatest rate of return on my money? Right. And if it’s in my business and it’s controllable, maybe don’t use your cash flow for the inventory. Do the loan out of your life insurance policy and invest that cash for growth. Right? So that works well.

Josh Hadley 00:36:43  I love that. And I think the overall rule of thumb with that is like, you can you can see like this. This comes down to like not necessarily sophisticated but really well done Financial models? Yes. Right. So you need to have, whether it be a CFO on your team or a director of finance that is modeling all of this out for you and is helping say, hey, this is where we need to direct the capital in our business to just continue to like, make more money.

Josh Hadley 00:37:11  The money makes money itself. And here’s our different cost of capital. So Mike, I love that aspect. What have we not touched on, Mike, that you think our listeners need to hear about this strategy?

Mike Olson 00:37:25  I think we haven’t we haven’t jumped ahead 20 years. Right. And you get into that retirement phase and where I think the the war chest of money inside of an insurance policy becomes a big value on your balance sheet, is for all of the future what ifs. Right. the business not working out exactly the way you want it. You want to pass it on to your kids, and you’re not going to charge them for it. You all kinds of different, kind of timing of now I need to live off of my assets, and I might not have an operating business that I’m used to getting income from, and I got to start spending down my own assets to live on. Now you have this tax efficient, potentially tax free income that can come from that. So if you work your bank strategically and fund it, you can build up a good war chest of money to use for tax free income right at retirement or to adjust for certain things depending on the taxation of assets.

Mike Olson 00:38:32  So a lot of what we see now is the market’s done phenomenal. So you see a lot of people that have brokerage accounts. They might have sold their business 3 or 4 years ago. They have brokerage accounts and they have a lot of gain in them. If they want income now, they have to start selling off those those stocks or those mutual funds or whatever to get income. Now they’re getting hit with tax, state, federal, maybe nit tax, all of that. So this becomes this insurance policy becomes a great place to do great tax planning for retirement. Right. Even though that might not be the mission now, I think it’s a great thing on the balance sheet later that that isn’t always thought about because entrepreneurs are so positive and growth oriented about my next opportunity. And I’m going to grow this in my wealth versus thinking about at age 65 or whatever age, right, that I need to start living on it. So I think it just lends itself very nicely to use strategically along the way.

Mike Olson 00:39:32  And then in the back end, great. You have this tax efficient bucket to use for cash flow at retirement.

Josh Hadley 00:39:40  Yeah Mike well said on that point. And I do love that approach of you also mentioned it being able to take chips off the table. So I think one of the biggest like mind hacks in the e-commerce space, or for any business owner, is to be able to take some chips off the table. Right. We would all love to sell our business someday, everybody. But guess what? 80% of businesses will never be sold. Are you one of those 80%, right? Like, 80% of the listeners here will never actually sell their business. Okay, so if that’s true, what if yours is one of those businesses that never sell, but you keep reinvesting dollar after dollar into your business, thinking like one day there will be a massive payout. I’ll get millions of dollars. What if that never happens? What I love and what we’ve done over the last few years, Mike, is we just take some chips off the table and we put it into this life insurance policy.

Josh Hadley 00:40:40  What it allows me to do as a business owner is it allows me to make much bigger bets and better decisions in the business, because I know that my downside, right? If the business were to ever blow up, every year that passes and I’ve been able to take some chips off the table, put it into this policy and it’s continuing to grow, and I can see how much money I would be able to take out at retirement age. It allows me every year to be able to make a bigger bet, because I know my downside just got a lot smaller and a lot smaller, and every year that that compounds and I’m building up that asset. Like I can take bigger bets in my business, which in return allows me to experience even more growth in the business. So it’s it’s a perpetual flywheel where I don’t you don’t need to invest all 100% of your cash flow back into the business. You can take chips off the table that will boost your level of like confidence as a business owner. and if things were to completely fall apart.

Josh Hadley 00:41:48  You know, your downside is a lot smaller. Thereby being able to be just have a better mindset in the overall productivity of the business. Mike, is that what you would advise as well? Is that what you see? I mean, you work with a lot of business owners.

Mike Olson 00:42:07  That’s a fantastic point that I think that the conversation we have to have is the life insurance is not going to get the return like your business, period. Right? That’s where you’re going to create wealth. That’s where you’re really going to get leverage on your money. The whole idea of the insurance, like you mentioned is it’s it’s risk controlled. It’s a war chest of safety money. Now, if we can get a good return on that safety money somewhere between 6 and 7% over time. Fantastic. But it’s very, very risk control, which is the opposite of most Entrepreneurs that are very speculative, growth oriented. Right. They’re seeking that that return. So this is very purposeful, built to be the opposite of that.

Mike Olson 00:42:53  Right. On your balance sheet and and as you just can continue to see it grow and what percentage is it is on the balance sheet. Then you can be more strategic, like you said, on how you invest money. Right. And what what risk you take on for opportunity that you might not before because you know, you have a safety net or a war chest. So I think it’s very purposefully built to be like that, not to be growth oriented and have a lot of volatility to it. It’s meant to be the exact opposite.

Josh Hadley 00:43:28  Yeah, I love that, Mike. Anything else that we haven’t touched on?

Mike Olson 00:43:32  I would mention the creditor protection being a reasonable and real and real value proposition. A lot of entrepreneurs get caught in legal issues. Not that they’re justified all the time, but they are what they are. So depending on the state you’re in, that is when you’re doing your trust planning and your estate planning and all those kind of things. One of the conversations that comes up with entrepreneurs a lot is my creditor protection, asset protection.

Mike Olson 00:44:02  And they do Nevada trusts or Delaware different trusts. Very purposeful of that. Insurance is a very simple solution to get creditor protection with it. It doesn’t have anonymity, but it’s still there. And when I say creditor protection, liability exposure does not include IRS. So back taxes and does not include divorce. So divorce is going to take the structure of community property separate property. Who owns it. Right. Did you have legal you know, premarital planning, all that kind of stuff?

Josh Hadley 00:44:36  Awesome. Really well said there, Mike. Mike, As we leave the audience today, I love to leave them with three action items from today’s episode that they can implement today. Here are the three action items that I noted. You let me know if I’m missing something. Action item number one is if you don’t have a financial modeling or projection or accounting documents that you are looking at on a monthly basis, like that’s step number one. Again, you’ve heard this time and time again on the podcast recently that it’s like most entrepreneurs don’t know their numbers and then they start taking out loans.

Josh Hadley 00:45:13  And I promise you, if you’re if you’re in that camp, like, that’s your number one thing that you got to fix in your business, you got to get clear how much profit is actually coming into the business, and what is the cash flow look like in your business month over month? When does the cash come in? When does the cash leave? Why does it leave? Where is it going? If you don’t know those answers, you will not be able to implement this strategy that we talked about today. So that’s action item number one. Clean up your books. Get cash flow forecasting spreadsheets that go 9 to 12 months into the future so that you can see what your projections look like to be able to do that modeling to know where’s the best cost of capital going to come from. That’s action item number one. Action item number two is. All right. Let’s assume you know that your business is spitting off some excess cash. It is profitable. One of my biggest recommendations is to begin taking that that cash and then investing it wisely into places that your biggest your biggest asset, where you should take your biggest risks is in your business.

Josh Hadley 00:46:27  So anything that comes out of your business, I would argue, rather than going and doing a bunch of speculative speculative plays or doing a bunch of, you know, venture capital investments or things like that where. Sure, you could get 100 X, but it could also be a zero. Rather than doing that, your best. Like your best strategy is to take the money, use all of your risk in your business, then begin building safety nets. And you can do that through real estate. You can do that through life insurance that we talked about. And as you do that and you build your portfolio of assets, true assets, it’s not liability. It’s not a new car. You don’t need that new car. You don’t need that new boat. You don’t need that second house. If you truly invest into assets, that raises your floor of downside risk. And then you can go take bigger bets, bigger swings in your business, take all of your bets inside your business. That’s where your your your wealth is truly going to compound right there.

Josh Hadley 00:47:35  So that’s action item number two. Action item number three is before you ever take out a loan again, like if you can at all begin generating a life insurance policy that you’ve been investing in for the past couple of years. Because this is a war chest, as Mike talked about, that will compound over time. The best day to start was yesterday. Begin building your war chest today because a couple of years down the road, when your business is growing and you need a source of of capital, we didn’t mention this. But what happens if we have another massive recession? Guess what happens to all those places that are giving you capital now? They shrink up and they’re not loaning out capital anymore. Even lines of credit. Okay, but guess what would still be around your life insurance policy. So if you see a massive opportunity, right, go back to Covid and you had access to to the face mask supplies or something like that. Right. The masks. And you’re like, well, I need $1 million worth of masks right now.

Josh Hadley 00:48:41  I don’t have that money, but and maybe credit has tightened up a little bit so I can’t even go get a loan. What if I tap my life insurance policy? That’s that war chest that we talked about that allows you to be primed for opportunities when opportunity strikes. Okay. luck is when opportunity meets preparation. And this preparation right now is building your assets. Build that, that cost of capital that you could then leverage that war chest in the future at your most cost efficient cost of capital. So and then set yourself up for retirement. At the same token, I think that’s just the cherry on the top. I’m using it more strategically. Mike, those are my three action items for our listeners. Anything else you would add to this.

Mike Olson 00:49:28  Just to enhance that third, Scenario, you said of you just don’t know the timing of when you need that money. It might be business things. It might be personal things. So, for example, my daughter graduated college, moved out, and we took I took money out of my policy to go buy a condo that they happen to live in.

Mike Olson 00:49:49  Right. That wasn’t my plan, but I had that war chest of money to do something like that very strategically, quickly, and effect kind of the opportunity that I had with that condo for her. So you just don’t know when. So having that war chest there for, for all the what ifs, timing issues, opportunities, business strategic, you know, equipment, you’re buying equipment on a regular basis, inventory, things like that. it can you can use it however you want.

Josh Hadley 00:50:22  Well, said. Mike, I’d love to ask every guest the following three questions. So, number one, what’s been the most influential book or even podcast that you’ve listened to and why.

Mike Olson 00:50:32  So, I’m not a big reader, but I do listen to a lot of podcasts. I listen. I there’s no one particular I’m a, I’m more of a, more kind of like an Instagram. I get options and then I head down those paths based off of. that’s interesting to me on whatever concept. So I’m more of a diverse learning about lots of different stuff.

Mike Olson 00:50:57  And I always do podcasts and listen versus read. Just don’t enjoy the reading aspect of it. So I don’t have a specific book.

Josh Hadley 00:51:06  well, good, good use of time if you’re all if you’re commuting listening to a podcast, hopefully it’s this show that you’re listening to.

Mike Olson 00:51:12  Mike I will.

Josh Hadley 00:51:15  I’ll, All right. second question here. What is your what’s a software tool or AI tool that you’ve been using and how have you been using it in the business?

Mike Olson 00:51:26  So this is new to me. I’m 56 and I’m a little bit more of a old dog type mentality. but as a company, we’re really being proactive in what’s that look like? And in my industry, the insurance world, it’s a dinosaur. so they’re not usually ahead on the technology. We’re trying to be one of the ones that’s kind of driving that. So we just integrated copilot and we’re trying to control the ability to use it. But in a very, very safe, secure environment, which is part of the challenge. so that is new to me.

Mike Olson 00:52:01  And I’m, I’ve used perplexity quite a bit for personal kind of filtering. one of the projects that I have is I talked with an entrepreneur that, basically has created a project within his AI that has all of his medical records, all of his blood work, his aura, information, and he’s trained it over the last year to be proactive with him on. You need to start doing this. This is happening and it’s a very proactive management source of his body and his health. so that’s the project for Q4 and this year to kind of set that up. So but I’m new to that world. I’m still figuring that out a little bit along the way.

Josh Hadley 00:52:50  Love it. Great recommendation. Love the personal health aspect of it as well. All right. Third and final question here. Who is somebody in the business or e-commerce world that you recommend other people follow?

Mike Olson 00:53:04  I’ve been a, a follower of a gentleman named Martin Armstrong. I think his firm is Armstrong Economics, and it’s much more of a global, what’s going on in the world from a truly international perspective, debt perspective, anything you can possibly imagine? And he created one of the first and only AI tools in that space that takes into account, currency transactions since inception.

Mike Olson 00:53:33  So he’s, he’s had unbelievable, ability to predict things based off of the modeling that he has, that he was one of the first really to to truly use AI. So it’s great overall economic information and strategy of of what is coming down the pike.

Josh Hadley 00:53:57  Awesome. Love it. That’s that’s a new recommendation. Look forward to diving in even further. Mike, this has been awesome. If people want to learn more about you, they want to reach out to Wealth Point. they want to talk to you about maybe their own personal, insurance needs. What’s the best way people can reach out to you?

Mike Olson 00:54:16  emails. Find Mike at Wealth net. please hop on our website. well, point, and I’m, I’m more than willing to help anybody just brainstorm their situation, whether it’s. I have a policy, I’m not using it. How do I do it? Or I’m thinking about, should I should I add a policy to my portfolio and my balance sheet, those kind of things I’m always up to just talk through, help.

Mike Olson 00:54:47  brainstorm. Just be a good sounding board to an entrepreneur to help them think through what their what their thoughts and goals and objectives are, but have a different perspective on that. In working with hundreds and hundreds, probably thousands of entrepreneurs, we get a chance to see the good, the bad, the ugly. So I can offer some good advice, real advice, you know, kind of real life situations.

Josh Hadley 00:55:15  Yeah. And for full disclosure, you know, I’m a client of of Mike’s as well, And, you know, it is we’ve I’ve personally worked with a lot of different life insurance people and have sat on many calls and even purchase life insurance from other people that we then transitioned over to. Mike. So what I would say is like, they are it’s like finding a needle in a haystack, finding a really good like agent that actually has your needs, at the center of their focus and not their own commission check. Few and far between in the insurance world. And so, want to give that shout out to you, Mike.

Josh Hadley 00:55:51  Love what you’re doing. It’s a very different, unique approach and would invite the audience to check out. 12 points. So with that, thanks for your time today, Mike.

Mike Olson 00:56:01  Oh thank you. Really appreciate it. Really enjoyed.

MC 00:56:05  It. Thank you for listening. Visit Ecomm Breakthrough com for more information. If you’ve enjoyed today’s episode, the best way you can show your appreciation is by clicking the subscribe button and quickly leaving a review. See you again next time!