In this episode of The Same Day Podcast, host Yoni Schmidt is joined by M.C. Laubscher, the Founder of Producers Wealth, to talk about how to build your own banking system and multiply wealth. They explore how infinite banking works in practice, why life insurance is more than just a death benefit, and how to generate and redeploy cash flow strategically. M.C. also shares the difference between financial freedom and sovereignty.
How To Build Your Own Banking System and Multiply Wealth With M.C. Laubscher
Michiel (M.C.) Laubscher is the Founder of Producers Wealth, a wealth strategy firm that helps business owners across the United States implement and execute advanced alternative wealth strategies. He is also the creator and host of the top-rated investing podcast Cashflow Ninja, which has been downloaded millions of times in over 180 countries. A best-selling author, M.C. has written several books, including The 21 Best Cashflow Niches and Get Wealthy for Sure, and is a member of the Forbes Finance Council and the Million Dollar Round Table.
Here’s a glimpse of what you’ll learn:
- [2:26] M.C. Laubscher explains the multi-dimensional meaning of wealth beyond just financial capital
- [7:06] How growing up in South Africa during apartheid shaped M.C.’s views on uncertainty and financial systems
- [15:22] How the wealthy use dividend-paying whole life insurance to create tax-free, private banking systems
- [23:12] Using convertible term life insurance to expand whole life banking systems
- [28:50] Top cash flow niches that withstand economic cycles, including real estate and luxury markets
- [34:29] The difference between cash flow and cash flow multiplication for business owners
- [42:55] Digitization of money and rising opportunities from economic disruption
In this episode…
What if you could take full control of your finances and multiply your wealth without relying on big banks or Wall Street? Many entrepreneurs and business owners are looking for smarter, safer ways to protect and grow their capital, especially in uncertain times. But how exactly do you build a banking system that works in your favor?
According to M.C. Laubscher, a leading expert in alternative wealth strategies, the key lies in using dividend-paying whole life insurance policies as the foundation of a personal banking system. He highlights how this approach creates guaranteed, tax-free growth, uninterrupted compounding, and private access to capital that doesn’t depend on traditional financial institutions. The main effect? You become the banker — gaining control, flexibility, and the ability to finance your own investments while your capital continues to grow. M.C. explains how this system has been used by the ultra-wealthy for generations and why it’s a misunderstood yet powerful strategy for creating lasting financial freedom.
Resources mentioned in this episode:
- Yonatan Schmidt on LinkedIn
- Mat Zalk on LinkedIn
- Keyrenter Property Management
- Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
- Keyrenter Property Management email address: [email protected]
- Michiel (M.C.) Laubscher on LinkedIn
- Producers Wealth
- “Exploring New Possibilities in Entrepreneurship” with Chip Gaberino on The Same Day Podcast
- “Revitalizing Communities Through Multi-Concept Restaurant Development” with Elliot Nelson on The Same Day Podcast
- “Why Bitcoin Mining Is the Ultimate Energy Investment With Beau Turner” on The Same Day Podcast
- Cashflow Ninja Podcast
- The 21 Best Cashflow Niches: Creating Wealth In The Best Alternative Cashflow Investments by M.C. Laubscher
- Get Wealthy for Sure: The #1 Financial Strategy for Business Owners to Multiply Wealth Predictably by M.C. Laubscher
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki
- Becoming Your Own Banker: Unlock the Infinite Banking Concept by R. Nelson Nash
Quotable Moments
- “A bank makes a profit whether you deposit, save, spend, or borrow money to invest.”
- “It’s great to be financially free, but don’t forget the sovereignty part.”
- “The money keeps growing uninterrupted inside of your policy, tax-free, and then you get a loan.”
- “Everything that’s a liability is someone else’s assets, and all the liabilities are assets of the bank.”
- “You just got to make it, you got to protect it, and you have to multiply.”
Action Steps
- Set up a personal banking system using whole life insurance: Establishing your own capital reservoir allows uninterrupted compound growth and tax-free wealth building outside traditional banks.
- Reinvest cash flow into income-producing assets: Recycling capital into real estate or businesses ensures consistent growth, greater control, and accelerated wealth multiplication.
- Structure convertible term life insurance early: Locking in future insurability and scalability supports long-term financial planning as income and net worth increase.
- Adopt a cash flow-first wealth strategy: Prioritizing income-generating assets builds stability and sovereignty regardless of economic cycles or market conditions.
- Study how the ultra-wealthy use financial tools: Learning proven strategies from family offices reveals smarter, long-term approaches for creating multi-generational wealth.
Sponsor for this episode…
Keyrenter Property Management:
This episode is brought to you by Keyrenter Property Management.
Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.
The team helps clients build wealth while taking the headache out of property management.
That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.
To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].
Episode Transcript
Intro: 00:05
Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.
Yonatan Schmidt 00:20
Hi there. Yoni Schmidt here, hosting today’s episode of The Same Day Podcast where we connect with top business and real estate leaders. Past guests include Chip Gaberino, local restaurateur entrepreneur Elliot Nelson, the CEO of the McNellie’s Group, Beau Turner from Abundant Mines, and many, many more. Today’s episode is brought to you by Keyrenter Property Management. At Keyrenter Property Management, we are a full service property management company helping our clients buy, renovate and operate real estate assets.
We help our clients build wealth while taking the headache out of property management. That is why no matter what rental you have single family homes, condos, townhouses, apartments. We have the management solutions for you. Go to keyrenterpmc.com or email us at [email protected] for more information.
Today’s guest is a globally recognized authority in the Alternative Wealth Strategy, and one of the most sought after voices in the world of financial freedom, M.C. Laubscher. He is one of the Founders of Producers Wealth, where he helps business owners across all 50 states create their own banking system and elevate their financial well-being. M.C. is also the host of a massively popular podcast called The Cashflow Ninja Podcast. It has been downloaded millions of times, over 180 countries, and he is the author of multiple best selling books, including The 21 Best Cashflow Niches with a deep insight and a passion for sovereignty, freedom and legacy building. M.C. empowers creators and entrepreneurs to take control of their financial destinies.
Welcome to the show and thank you for being here.
M.C. Laubscher 02:09
Thank you so much for having me.
Yonatan Schmidt 02:11
Yeah. M.C. let’s just dive right in, start a little bit with foundation and philosophy. You’re a strong advocate of financial sovereignty. What does wealth. You know what?
What does this mean actually?
M.C. Laubscher 02:26
Yeah. You know, it’s interesting. Wealth itself means many different things to people. Right. And I, I almost from a philosophical standpoint, I look at wealth as it consists out of different types of capital.
And most people, when I say that even the word capital, they just think financial capital, right. But if you if you think about your intellectual capital and then your relationship capital that you have. Those are extremely value types of capital. Very valuable. So you combine those two and the result of it is going to be more financial capital.
And then of course, I mean there’s all different types of capital that exist. You know, if you look at wealth in general, it’s, you know, having age defying health. Right? We’ve heard it. Health is wealth.
I can tell you, I know some wealthy people. They have health issues. They would spend any amount of money to have their health back. So it just shows you what what actually matters, right. So anyway, so health is a big part of it.
And then having soulful relationships with your with family members, whether it be a significant other, spouse, children, friends, your community and so forth. And then obviously financially having the ability to use your intellectual capital, your relationship capital, and solve problems in the marketplace through products and services, which is your business. And then deploying that capital and building that. And, you know, if you think about financial freedom, there’s a couple of different types of freedom you have. You know, the first the first thing is time, freedom, the ability to spend your time as you please.
Right. And then it’s relationship, the ability to spend your time how you please, with whom you you would like to spend it with. And then of course, financial freedom ties into it too. The money part of it, where it’s like, hey, money no longer becomes a reason why or why you’re not doing something. So those are those are very, very important.
And that’s kind of where wealth ties in. And financial freedom is a big slogan or kind of like concept that’s shared on podcasts. And, you know, everybody talks about being financially free. And basically what that means is, again, money doesn’t become a reason why or why you’re not doing certain things. You have enough income coming in, whether it be through your operating businesses, whether through your investments passively to to cover all of your expenses on a monthly basis, and you have a little bit of a buffer to.
Right. Where sovereignty comes in. I think people realize there’s a big difference between financial freedom and actually being financially sovereign. In 2020. You could have had all the money in the world, but all of a sudden you were stuck in one place and a lot of people at their income sources cut off.
And they, they, they realized how actually reliant they are on systems. And once those systems cease to work, they’re actually not in a in a good spot. Right. So sovereignty ties into, you know, physical capital again, part of, you know, wealth where, you know, do you have access to food that you grow on a piece of land that you own? Do you have access to water that you own and control through a well and not relying just to, you know, just to another town or city?
Do you have the ability to protect yourself and your family if something happens? That’s a big part of sovereignty. So I think that piece kind of like bringing financial freedom with sovereignty, it really started to become a big part of this wealth equation for me over the last five years. So we’ve talked a lot about it. It’s great to be financially free and have freedoms, you know, of time, relationship, money and purpose, you know.
It’s great to be financially free, but don’t forget the sovereignty part, because I know a lot of multi-millionaires that were stuck and they realized really what was important. You know, in the in the past five years.
Yonatan Schmidt 06:55
Yeah. Interesting. Tell us a little bit about what inspired you to launch, I guess, Producers Wealth. And, you know, how did your background shape the philosophy of of the business?
M.C. Laubscher 07:06
Yeah. So I grew up in South Africa, so I’m originally from South Africa. So I grew up during a very interesting time in the country’s history. I was a young, young man when the apartheid regime came to an end. Right.
Fell. Right. And we I still remember when Nelson Mandela was released from from prison. And then within three years, we had elections. I was very young.
I and again, I at that stage I saw what the you you’ve heard of the concept of the the madness of crowds, right. And how big crowds react and how emotional they get. Well, I saw everything as a young man already. uncertainty. Nobody knew what was going to happen the next day.
It was very, very, very kind of like there was a lot of turmoil. There was a lot of chaos, a lot of people panicking, stocking up. I mean, we were basically getting ready for a civil war right at that stage. Everybody looked at South Africa and said, oh, wow, this might be the like the next Bosnia basically happening pretty quickly. So having witnessed that, that was actually a gift because, you know, again, fast forward 20 to 20, 30 years later when 2020 happened, I was not surprised at all to see people fight in stores over toilet paper, because I’ve already seen that stuff happen as a young, as a young man.
So it might have shocked a lot of other people here, but I’m like, no, this is totally how crowds behave, especially when people start to panic and they don’t know what’s going on. And, you know, they they get emotional. So after, After I graduated university, I traveled a bit. I ended up in the United States playing sports up until 2007, in a league here. And as I was doing that, I had a degree in history and economics, and I loved reading about business and investing.
I came across across Robert Kiyosaki’s book, Rich Dad, Poor Dad. And in that book, I mean, I it just blew my mind what wealth is, how money works, this entire different game that’s being played that the average person, for the most part, does. They don’t even realize this is going on. So I took action within six months. I used some of the money that I generated playing sports and doing odd jobs.
And I bought my first real estate property. Six months after reading the book, I put some tenants in there. I collected rent, paid all the bills, and there was money left over at the end of the month and I’m like, wow, cash flow. Just like the book. Cool.
How many times can I do this? How many units can I own? And of course, you know, then. Then the school, then school starts. That was the easy part.
Property management is actually the secret sauce, which really contributes to the performance of an investment, especially real estate. So the management of it. So that really I mean without the the property management, it it’s just another piece of real estate. It can make or break the deal. So but for me yeah that that was really I, I was just I saw this entire different world.
I saw an entire different future kind of laid out. So I got into the real estate business. I read certain books every single year. I’ve read Rich Dad, Poor Dad by Robert Kiyosaki since the first time I read it, which was around 2001. So I’ve read it every single year.
So it’s now like 24, 25 times. I’ve read the book every single time I read the book, there’s something else I picked up, So I think it was about 3 or 4 years after the first time I read the book. And I looked at the financial statements that he simplified and shared in the book, and I saw all of the liabilities in the book with someone else’s assets. And I’m like, this is kind of insane. Everything that’s a liability is someone else’s assets.
And if you really look where it all is going and you, you, you study the cash flows, it’s all assets of the bank. So all the liabilities that you have are assets of the bank. And I looked at this and I’m like, this whole banking thing is like this is this is interesting. And then it’s just funny. Then I came across Nelson Nash’s work Becoming Your Own Banker, which he actually writes about this.
And, you know, Nelson puts it so eloquently and great man. A great mentor of mine. But he says, you know, a bank is makes a profit whether you deposit money into it, just into a checking account, whether you save money, whether you spend money, or whether you borrow money to spend or to invest, that bank makes money. Still makes a profit out of it. So he he planted this the seed in my mind that he’s like, look, you you have to in life, you have to be in two types of businesses at all times.
You have to be in the business that you’re in. And then that’s that’s my real estate business. And you have to be in the banking business. So you can create a very similar system, your own banking system, just like the banks within your own life. And that kind of led me into family offices that do this family offices, you know, obviously families that have millions and millions of dollars in net worth, you know, the, the, the larger ones have, I mean, $100 million and up.
You need to have to to operate those. And the Rockefeller family office is a very famous one where most families modeled their family office on the Rockefeller one. And then I started to see, well, this is what they do. This is the game that they’re in. They’ve created a banking system for their family, which then finances everything that the family members need, and it finances their operating businesses.
They use it to buy real estate and so forth. So yeah, I mean, so this really impacted my philosophy. And I’ll share just one more story with you. It’s crazy how the world works, right? So I read Robert Kiyosaki’s Rich dad, poor dad I saw.
Hey man, you’ve got to be in the banking business. That was really what I learned from the third or the fourth time that I read it. Then I came across Nelson Nash’s work. Then I looked at family offices and then, you know, a friend that I met through a network that I was in And that I started working for in real estate just part time because I was traveling quite a bit, invited me to a lunch, and I started to realize how wealthy this friend of mine was that I became good friends with because he actually had a family office structure set up. His family was literally doing that, and he had his advisors with him, and my mind was just completely blown because I’m like, I, this is this whole system that they’ve built out to have this family bank structure, banking system blew my mind, which even blew my mind even more is they were private shareholders in a bank, a private bank already.
And I’m like, but you guys don’t have your money in your own bank. Why wouldn’t you have your money in your own bank? You own a bank. It’s like, no, that’s where other people put their money. We keep our money in our banking system, which we’ve built up.
So we profit from that. And then we profit as the other bank, you know, doing the same thing with other people’s money. So that’s probably a very big impact in my philosophy, how I structured my financial strategy over the past two decades and then also where produces wealth comes in to tie it all together is we we actually help business owners and investors implement and execute this system in front of banking, this banking system, within their own personal and business and investing economies in all 50 states in the United States. And we’ve been doing it for, you know, ten years now. So we’ve had a lot of fun.
Yonatan Schmidt 15:01
Nice. Yeah, I definitely want to touch a little bit about the strategies and systems. And Infinite banking is a big part of your strategy as I understand it. Yeah. Can you break it down for us?
How does that work in practical terms for, you know, someone like me, the layman who’s, you know, listening to this for the very first time and learning about infinite banking?
M.C. Laubscher 15:22
Yeah. So infinite bank. What infinite banking is, is kind of this system. It’s a process, right? So I think the first thing that you have to understand is it’s a strategy.
It’s not just a product because we’re so used to thinking in terms of, oh, I just have to buy this product and then cool, then I’m doing it. Actually not. It’s a it’s an entire strategy and it’s a process. So in this process you use life insurance. And this is a four letter word.
It’s a very dirty word. Just mentioning it already will get eye rolls I’m sure if you’re listening to this you’re probably rolling your eyes. Life insurance at retail level and to the average person is sold a very, very different way than it is to the ultra wealthy and the ultra affluent. They actually, in family offices, look at life insurance as an asset class, just like real estate. There’s no difference for them between like they both asset classes, they both serve a purpose and they are used for different things.
So You use life insurance, but it’s not about the death benefit. Because first, you know, everybody thinks life insurance is, well, somebody’s got to die in order for someone else to get a payout. You can actually set up a life insurance policy where it’s a super charged savings mechanism. It’s a savings vehicle. So you would put money in a life insurance contract and put as much premiums in there as they would allow you to, because it’s funding your savings account.
And if it’s structured correctly, 70 to 80% of your premiums all go to the savings element of it. The rest go to buy the death benefit. So why would someone put put money in in a life insurance? And to be specific, we use a dividend paying whole life insurance policy with a mutual life insurance carrier. So it’s even I had an eye roll before on the life insurance.
Now I get a double or a triple. I roll again because Dave Ramsey and everybody tells you it’s the worst place to put your money in. By the way, if you’re buying life insurance as how it’s sold in the retail markets. Yeah, yeah, I agree with Dave, you know. Absolutely.
But how do the wealthy people buy this. So the wealthy people buy it there with a death benefit, but to maximize the savings component of it because yes, the death benefit is important, but they’re really buying it as a vehicle to warehouse cash. So why would they put money in there? Number one, the money’s guaranteed. Never go down in value.
And it’s guaranteed by companies, mutual life insurance companies that have made good on promises for 170 plus years. It’s a pretty good track record. Number two, it’s guaranteed to grow contractually. It’s a contract, and then it’s guaranteed to grow tax free. You also get access to dividends, which is around 6% right now.
And that’s all tax free. So you’ll never pay money taxes on the money in that life insurance policy ever again if you Follow the correct strategy. So the money’s in there. Guaranteed. Guaranteed to grow tax free.
It also is a private contract. Nobody knows you have it. The only reason why people know that Joe Biden, the previous president, had six of these is he had to declare it as the president of the United States. So recently this is interesting. Trump’s not President Trump’s nominee for SEC.
He had like a ridiculous amount of these policies in his family. So that just broke, you know, an article. And people were looking at this like, why would this guy have so many life insurance policies? This is crazy. But anyway, so that’s the only way that people would find out if you have to disclose it, which is really nice.
It also had as an asset protection. Now it can be in a trust, but in most states in the United States it’s protected. So if somebody sues you and you don’t have to do anything wrong in the United States to get sued, they can’t get to it. The beauty of this, though, to the really and this is where the process comes in. When you access the money, which you have guaranteed access to, you do it through a policy loan.
You don’t do it. You don’t just pull money out of the policy. Now why would you do that? Well, if you have money inside of the policy, you’ll place it as collateral. Meaning that is what is there that helps you get the loan, right.
So the insurance company is covered. So if you let’s just say you have a $500,000 in your life insurance policy and you want to use $100,000 to buy real estate, you would get a loan for $100,000 at around 5%, secured by that $100,000. That’s part of the 500,000. So what happens is the money keeps growing uninterrupted inside of your policy, tax free, and then you get a loan at 5% of this $100,000 to invest and buy real estate with. And then of course, you repay the loan back to yourself.
Your own banking system. When you’re generating cash flow or you just flip the property or, you know, and so forth. So this is how it all stays. In one system. You make deposits just like you would do in a bank, in your in your banking system, your life insurance policy.
You then if you need money for spending for for to loan to finance, you know automobiles, investments, whatever you need it for you borrow from this life insurance policy, finance, whatever you need to finance, whether it’s automobiles or real estate. And then you become your own banker, paying back the the loan to your own life insurance policy. So you get uninterrupted compounding in this policy tax free. You’ll never pay taxes on that money again. You always have access to money.
And you are the banker in this system benefiting from making the deposits, building up savings and then financing all the things that you need in your life.
Yonatan Schmidt 21:21
Yeah. Interesting. So two questions. One, I guess, is this a whole life insurance policy, a term life insurance policy? What kind of policy are we talking about?
M.C. Laubscher 21:29
Yeah, this is a whole life. So a term policy can be for 20, 30 years. And it’s just basically what it says it is it’s term. You’re covered for a specific term. Right.
And would they have a time and a place to. There’s nothing wrong with the term policy. So if you’re a young couple just starting out and or you just bought your, your first house or something, or you just got married or you just have a child, term policies are great to provide coverage to replace income if something should happen to you. This is a whole life policy. So this policy will have for your entire life.
You’ll fund it, you’ll utilize the strategy, and eventually when you pass away, you will get a the death benefit will go tax free to your beneficiaries. It could be part of a trust like the Rockefeller trust system. It could be go to a spouse, children and so forth. But that’s how you transfer money tax free to your next generation, your children, and so forth. But it’s a dividend paying, whole life insurance policy with a mutual life insurance company.
Mutual life insurance companies have been around since the mid 1800s. They have stood the test of time. They have a track record for over 170 years of making good on promises. So that’s also very important. You’re not setting these up with companies that are listed on the New York Stock Exchange.
Yonatan Schmidt 22:53
Yeah. And if you are going the term life insurance policy, you’re you’re better off also trying to get a policy that’s convertible to a hole so that potentially in the future you could convert to a hole and then go through this, you know, process and deploy this strategy. If I’m not if I’m assuming correctly.
M.C. Laubscher 23:12
You are 100% correct. That’s actually part of my own strategy, and that’s one of the strategies that we teach. So you have the reason you would get a convertible term as it does different things for you. Right. So the first thing is your banking system.
The second thing is you’re always going to need to put money somewhere. So your banking system replaces where you warehouse capital. So you want to make sure that you have the ability to keep putting money into the system. Right. So how do you do that.
You can get a convertible term. And let’s just say your whole life policy is $1 million in death benefit, right? And let’s just say you would get an extra convertible term on top of that for $10 million. Why would you do that? Well, number one, for the next 20 years, that you have that convertible term, you can convert that over in chunks to your whole life without any medical underwriting, which What is your.
So number one, if something happens to you in that 20 years, let’s just say your family gets the maximum death benefit. Number two, you have now bought the ability for yourself to convert more and more term into whole life for the next 20 years. As your income goes up and your net worth goes up. And most people that we work with and and help with a system, their incomes keep going up, their net worth keeps increasing, they keep crushing it. Where are you going to put the money?
So they, they, they they convert chunks of this term over. You can convert, you know, 500,000 over time or a million in death benefit. So you just convert more over and you add more policies to this family bank. You know, the goal is to convert all term over by the the time that the term expires, right? So it becomes permanent.
and that’s part of a strategy. So this way your banking system will keep growing and eventually, you know, your death benefit will be very, very sizable, which when you pass away, that’ll go to the next generation. That’s kind of the Rockefellers call it the waterfall, where you maximize the death benefit on both of the parents, let’s just say. And then there’s a waterfall of millions of dollars going tax free to the children. They put it in a banking system and open up policies, maximizing their death benefits when they pass away.
There’s another waterfall of more millions of dollars to the grandchildren. And this is how you this is how you have multi generational wealth and build it over the course of three, four, five, six generations. I mean, you start with a couple of million dollars and you implement this strategy, you know, three or 4 or 5 generations in there’s millions of millions of dollars now in a family bank, which you started the process of, you know, 50, 60, 70 years ago, right?
Yonatan Schmidt 26:10
Yeah. Awesome. Tell us a little bit, I guess, about some of the most common misconceptions that people might have with alternative wealth strategies like this.
M.C. Laubscher 26:22
Yeah. I think it’s just they don’t know anybody that that does this. That’s the first thing. So I think everybody’s always I grew up a contrarian and I, I’m comfortable being on the side that no one’s at. It’s actually, you know, over the past 25 years as an investor served me really well.
I was the guy that everybody made fun of, you know, in 2013 with Bitcoin, where they said, what is it like Disney tokens that you’re that you got right there, right. So I’m comfortable being there. But I think the big misconception is because you don’t know anybody that does this, that it’s you know, that it’s it’s not real or it’s doesn’t work or something like that. It’s incredible to me like. And I’ve, I have been blessed to have access to a lot of people that have opened, pulled back the curtains, so to speak, for me to look at what the ultra wealthy do.
And it’s very, very simple. And then I tell people this and I’m like, this is what they do. It’s really very, very simple. And people wouldn’t believe it because again, they don’t know anybody else that does this. And all of the marketing, remember, comes from Wall Street.
They’re selling you products. So Wall Street wants your money. They want it consistently over a long period of time. And they want to give it back to you as slowly as possible over time. So that’s their game.
So that’s the type of marketing and information that you’re going to get. So when I when I throw out these types of ideas that, hey, you actually can take full control over your capital for yourself, your family, your business and your investments, you can manage it. You could set up the system which, if implemented and executed correctly, guarantees that your net worth and your income and your family wealth will keep growing every single year. It’s, you know, there’s it’s it’s still a little bit too out there for folks.
Yonatan Schmidt 28:24
Yeah. Interesting. You mentioned some you mentioned cash flow and I want to focus on that. Yes. Right now.
So you know, and you mentioned also that you’ve interviewed a lot of wealthy people and, you know, you’ve interviewed hundreds of wealth experts as well. Tell us, I guess, you know, what are maybe top 2 or 3 cash flow niches that, you know, consistently work in any market, right?
M.C. Laubscher 28:50
That’s a very good question. You know, it. It all depends. Real estate, you know, if you think about if you think about asset classes that’s been around for centuries that have stood the test of time. I think real estate’s pretty good.
Really? You’re always going to need somebody. Always going to need a place to stay. Always. That is not going to change.
And it’s also, you know, it’s like a primary need. You want a roof over your head, you want clothes and you want a full belly. You know, those three things right there. If you’re in business and you’re serving those three things or helping people, those three things, I think you’re always going to do well. You know, the economy is going to go up, down and sideways.
And it also in real estate, it depends where you play, too. You know, in any market, by the way, any market, there’s different tiers and different levels. And you know, what I’ve seen over the past 25 years is luxury markets have a lot of price elasticity out of it. So when you’re when you’re in the upper echelon serving like luxury markets. I think you’re always going to do okay.
Like, there’s a lot of people right now that I’ve spoken to that struggle with Airbnbs. I’m just using this as an example, you know, because, I mean, Airbnbs were going gangbusters and they started to slow down. And in a lot of markets there’s just too many Airbnbs. Right? So demand is down.
So now you’ve got a ton of people struggling. Well who is still not struggling in Airbnbs. The luxury market. They’re still not struggling because they can even bring down their prices a little bit to get their occupancy up. And people would go, oh, I could stay in this luxury place for like that price.
But the other and as opposed to renting, you know, kind of a middle tier property for like not much less than that. Well, why wouldn’t I stay in luxury? Because they have a lot of price elasticity and there’s always going to be folks in that. So yeah. So I would say cashflow niches, real estate, you know, and you can be in single family, you can be in multifamily, you can be in mobile home parks, you can be in Airbnbs.
I think you’re always going to do well there. If you buy right, you finance it right. And then of course you manage it right. I think those are very, very good businesses, you know, not as passive as real estate, but I think there’s just if you think about the world, right. Is there ever going to be a time that we’ve got all of our problems solved as human beings?
It’s almost impossible. We are strange creatures to begin with. I don’t think we ever solve all of our problems. So if there’s a problem out there, there’s an opportunity for a entrepreneur to find a solution to that problem and come up with a solution through a product or a service. And again, if you also are in the luxury kind of space in that I’m a mentor one time said to me, you know, he goes, that’s a short.
Here’s a here’s a life hack when it comes to business. You know, if you service very, very wealthy folks and you provide products and service to them, you’re going to be okay. They’ve got a lot of problems to solve, too. By the way, they also have the pockets to pay for it, which comes in handy. So I think that’s a pretty good niche businesses.
You know, I’m trying to think of like, yeah, because I’ve interviewed folks now almost for ten years and it’s we have covered probably like 150 different types of niches. It’s crazy. Everything from, you know, crypto all the way to fine whiskey to, you know, rare earth metals, which is now in the news finally. I mean, that that’s been coming for a while. We’ve covered that for a while.
And all of a sudden, you know, because of all of the the war in the Ukraine and the negotiations Gotiations going on rare rare earth metals is is making an appearance, which is interesting. Yeah, there’s a lot of fascinating, fascinating niches. But I mean, those two, if you think about and this is what you see in family offices, by the way, again, pulling back the curtain, operating businesses and real estate is a very big part of what the wealthy do and continue to do. You know that friend of mine that I shared that I had lunch with? They had family operating businesses.
They made money from those businesses. That was their cash generator. They parked it all in life insurance contracts. Then they leveraged those life insurance contracts to buy real estate. And they just did it over and over and over again.
Yonatan Schmidt 33:34
Yeah. Nice. Love that. And just going back to what you mentioned about luxury goods and price elasticity, defining price elasticity. For our listeners is basically how people will react or how sensitive they are to fluctuations in the prices.
Meaning if you have an Airbnb, that’s a luxury Airbnb. They priced they dropped the price just a little bit. People will respond well to that and book it more, more often. Increasing occupancy and overall I guess cash flow and and revenue for the operator. Yes.
Okay. I do want to touch a little bit about some things here that are related to cash flow. Tell us, I guess, a little bit about the difference between cash flow and cash flow multiplication. And how do you coach clients on both? You may have just alluded to that, you know, with your friend and what he does.
M.C. Laubscher 34:29
That’s exactly what we do. So we work with a lot of business owners. So the first thing is the cash is generating the cash, right. And that’s in their businesses. One thing.
And how we put some rocket fuel on what they’re doing in their businesses is setting up this banking system. Because if you think of you’re a business owner, right? There are so many challenges. So the first challenge that you have is when you’re a successful business owner, you’re going to have a financial advisor bang down your door and promise you all this kinds of stuff. Oh, you’ll get a Goldman Sachs Young Entrepreneur of the year award, or we’ll introduce you to more rich people like you, all that kind of stuff.
But what are they going to do? They’re going to say, look, you need to diversify out of your business. Take some money off the table, give it to us. We’ll manage it for you. They put it in stocks, bonds and mutual funds, which they basically invest in someone else’s business.
I mean, you can make this up. You take money out of your business, you hand over money, you lose all control. They take your money. And what do they do? They put it in stocks, bonds and mutual funds and a lot of equities.
They just say they put it in Apple stock for you. You are now providing liquidity for Tim Cook and Apple to manage and grow their business instead of your own business, which is kind of insane when you say it out loud. But anyway, that’s that’s what happens there. So the other thing is you have to manage cash flow. You know, it’s easy when you have your highest revenue month.
Every entrepreneur or business owner knows their highest revenue month of the year, right. Running a business is pretty easy during that time. I call it the summer of Cash flow because there’s four seasons. The opposite of summer is winter. Winter is your lowest revenue month as a business.
We all have them. Every single business have them. So how do you how do you run your business? Then you’re going to need access to money, right? Because the overheads stay the same, the payroll stays the same, all that stuff stays the same.
And all of a sudden you make a lot less money, probably 25% of what your highest revenue month is is what you make on your lowest. So then it becomes challenging and you would need money in all four seasons. You know, the summer you start to slow down. You go into the fall. Now you need a little bit of capital that goes into the winter.
Well, how do you come out of the winter of cash flow. You need an injection of capital. You need new marketing campaign. You need marketing. Let’s just say ad spend.
Hire more people, invest in technology. And that gets you out back into the spring, which takes you that momentum, takes you back into the summer. You need money during all those times. And most of the time, because business owners have diversified out of their business and are now funding Tim Cook and Apple, they need to go to the bank and borrow money from the bank. It’s this vicious cycle that they’re in.
So we the first thing that we do is, you know, as part of how do you amplify your cash generation while you create this banking system for your own, for your own business, so you never have to go beg banks again for money? And then also by doing that, you actually diversify out of your business, then by putting money in your own banking system, your second business. Now, now the other thing is, after you’ve generated it, the capital has to go somewhere. So it goes into your banking system and the multiplication part. You could do it many different ways.
You could reinvest in the business, which, you know, that’s a big part of it. We’ve had folks multiply capital business owners by buying the real estate from which the business operates, leveraging their banking system. Now, all of us. Now you’re diversified. You’re a tenant in your own building with three other tenants, collecting rent, generating cash flow.
You funded the whole thing with your own banking system. And as a business owner, you’re not diversified. You have your own bank, your family bank, you have some real estate and you have the business, but you control all three. You could do some private lending to to other businesses in your community. You could, you know, there’s a lot of different ways of how you could do that, but there’s a lot of fun ways to multiply.
And then, you know, eventually you want to grow a portfolio of, let’s just say, real estate outside of your business. And that’s the fun part of it. And I just use real estate because that’s where I started to. I started with single family. I went into multifamily.
I’ve invested in resorts, different types of properties. But yeah, so that that’s what I would share about, you know, the the big driver first is generating the cash. Then you got to position it somewhere. And a banking system is pretty powerful. And then you have to deploy it to multiply.
Yonatan Schmidt 39:09
Yeah. For those business owners who come to you and say, man, this sounds way too complicated, what would you say to simplify the process?
M.C. Laubscher 39:17
Oh, I keep it very simple. It’s like making money, putting your money somewhere and then borrowing it to multiply it and repaying it. So you just got to make it. You got to protect it, and you have to multiply. It’s very, very simple.
It’s really and and the thing is, people make this much more complicated when what it, what it needs to be. It’s actually a very simple process. It’s just like a bank. It’s. You’re just putting money into a different place now.
Yonatan Schmidt 39:43
Yeah. And borrowing it from yourself. Of course, would reduce the cost of capital. I’m guessing.
M.C. Laubscher 39:49
Yeah, exactly. I mean, think about it this way, right? If you’re borrowing money from anywhere, if you have good collateral, you’re going to get lower lending rates and life insurance right now. I’ll just compare it to real estate because these are my favorite two asset classes. There’s a bank that has a program.
They call it a lilac program, life insurance line of credit where you can actually put your your life insurance policy as collateral. Why would people do that? You know, when you have family bank, sometimes you have ten, 15 life insurance policies. You know, we have we have 12 in our family. You want one line of credit.
They’ll put it all. All the policies together give you one line. But they’re REITs right now. And I have to date this this is what are we now May 2025. Because people might listen to this at a different stage and go, what is he talking about?
Sounds crazy, but anyway, your lilac rate is 5.85%. That’s your lilac rate, right? Your HELOC rate with that exact same bank is eight 9% right now, between 8 and 9%. So it just shows you the good, the collateral that life insurance is. And you know, again, if you look at it as an asset class, because that’s what wealthy people like in family offices look at.
What does it do for you? Well, it’s guaranteed. It’s guaranteed to grow tax free. It protects the individual in the family. That’s why it’s such a powerful asset class.
And, you know, that’s why banks even see it as such a great piece of collateral.
Yonatan Schmidt 41:19
Yeah, a lot more liquid than home. So that’s why the rates are much better.
M.C. Laubscher 41:24
And this. This is what she told me too, because I. Oscar, I said this is kind of insane. Why the big difference? She goes, think about it, missy.
If people don’t buy us with the real estate, you know, and you know, even with the HELOC now there’s another mortgage on the property. You got second. I mean, it’s it’s a mess. Even if it’s a mortgage, they would have to take the property back, sell it at a discount. And then maybe somebody had a massive party and stripped the property before they left.
It’s. They don’t want to deal with that. Banks. Banks don’t want to deal with that. With the life insurance, what they can do is they can just keep if the person doesn’t make payments and just kind of like takes the money and never pays it back, they can keep charging them fees or and so forth, and this person’s eventually going to pass away.
It’s just yeah. One of the things in life we’re going to leave this spinning ball of dirt. And then they will reclaim their full amount, plus the fees and penalties from that life insurance policy, without the dirty work of taking over a physical property and renovating it and that kind of stuff.
Yonatan Schmidt 42:26
Yeah. If there’s one thing I remember from my commercial banking courses in college is that the banks don’t want to have real estate on their books as an asset. It clogs up their ability to make loans and profit off of interest, of course. And the financial assets is definitely where they play up. Okay.
Talking a little bit about, you know, forward looking into the future, what are the financial trends or regulatory changes that you’re keeping an eye on right now.
M.C. Laubscher 42:55
You know it’s interesting. We’ve had this move towards digital money. I would say over the past 15 almost two decades. And I see that accelerating. So we’ve all seen it like we just you just have to go out and observe it now.
You know, think how easy it is you just now you don’t even swipe cards anymore. Yeah. And by the way, I most of the time I don’t do it. But I’m not that tech savvy. But other people already have wallets loaded on phones and just scan barcodes and all that kind of stuff.
Yeah. So I think those trends are going to continue. And money’s just going to be I mean it’s already digitized if you think about it. It’s funny how people say, well, you know it’s going to be money’s going to be digital. I’m like, it already is digital.
There’s very I mean, actual physical cash. Everything is digital. So that’s a big financial trend that which I think is going to accelerate and continue to accelerate. The other things is it’s going to be interesting to see, you know. Yeah, I mean interest rates are are fascinating.
Just to see what’s going on with with REITs, that obviously impacts everything because I mean, the world we live in a debt a debt based monetary system. So that’s pretty important as that’s your foundation of the system. And higher interest rates obviously puts a lot of pressure on people repaying the debt. And at this stage, everybody’s got an ocean of debt, whether it’s governments, whether it’s local governments, whether it’s corporations, whether it’s banks. So that’s fascinating to see, you know, just from a financial perspective.
The other thing is we have a lot of different things happening now too. You know, we have two of the biggest disruptors in business, probably in our lifetime in charge of the world’s largest economy. Just think about that for a second. So two individuals, Donald Trump and Elon Musk, which is two of the biggest disruptors. Say what you want, think of what you want or say what you want of any of them, any industry that both of them have gone into, they have disrupted.
And it’s never been the same again. And now, now, now they’re heading the world’s biggest economy, right. So you’re going to see I mean, I’m preparing for like big changes. And, you know, times like this where you have people coming in that disrupt by their nature. You’re going to have opportunities.
So I think there’s going to be massive financial opportunities, you know, in the next, you know, 12, 18 and two months. And I mean two years. And even for the rest of the four years, I think there’s going to be massive opportunities. Government has gotten too big, too heavy for a long time. And, you know, you’re you’re you’re going to have to go to work to shrink this, this, this sucker.
But it’s become unaffordable. I mean, the math doesn’t add up for anybody that wants to do it. So they’ve gone to work shrinking it, obviously, which impacts every other aspect of the economy, the global economy, markets and so forth. So yeah, it’s going to be very, very interesting. There’s going to be a ton of opportunities for folks that see it coming.
And that’s just that’s just, you know, from a leadership standpoint, we haven’t even brought in technology. So I. Where does AI come in? AI is going to disrupt you. So you’re going to have disruptions everywhere, which again, if you stay calm.
Back to my gift. Growing up in South Africa, you know, stay calm and just see what’s going on. And you’re going to see massive opportunities.
Yonatan Schmidt 46:45
Yeah, definitely. It’s going to be interesting. M.C. leave us with what book or podcast are you listening to right now that you would recommend to our listeners? Aside, of course, for this podcast, the same day podcast.
M.C. Laubscher 46:58
Yeah. Yes, absolutely. You know, the two books that I mentioned obviously, is Rich Dad, Poor Dad by Robert Kiyosaki and Becoming Your Own Banker by Nelson Nash. I’ve also got a book out recently. It’s called Get Wealthy For Sure.
It’s the number one financial strategy for business owners to multiply wealth. Predictably. If folks want to want to check that out, we’re actually doing a An offer. Right now it’s just a a free paperback book that will ship to you. You just pay for shipping and handling.
And you can grab that at getwealthyforsure.com. That’s getwealthyforsure.com I think you know the book’s name. It’s funny. Well we came up with that because we kept saying everybody is everybody’s into get rich quick.
You know, we live in a world where people speculate on meme coins. You know, it’s we we’ve moved away from the ape and the monkey jpegs to like, just meme coins, which is just it’s just fascinating. We’re fascinating as a, as a, as a, as a specie. But anyway, it’s it’s kind of like everybody they want instant gratification and immediate downloads and fast food and fast this and like everything is just instant or fast or immediate or instant. So we look at it and go, no, if you actually want to build a multi generational wealth.
There’s only one way to do it and it’s it’s it’s long. It takes discipline. It takes perseverance resilience staying with a strategy. And that’s how you get wealthy for sure. And the strategy that we follow people have been doing it for 170 years.
It’s a pretty good track record. So that’s what that’s I just wanted to share that too.
Yonatan Schmidt 48:50
Yeah, definitely getwealthyforsure.com we’ll put the link below for anyone who wants to order that book. Thank you so much for being here, enlightening me, educating me and our audience. Truly appreciate it.
M.C. Laubscher 49:05
Thank you so much for having me.
Yonatan Schmidt 49:06
Yep. Thanks so much.
M.C. Laubscher 49:08
See ya.
Outro 49:12
Thanks for listening to The Same Day Podcast. Tune in to a new show each week and be sure to subscribe to get future episodes.