This article is a written adaptation of the video that you can find on my YouTube channel LIFE180.

I believe one of the most crucial aspects of personal finance is the concept of control. One of the significant issues we face globally is that people's finances often don't align with their values and beliefs.

People's finances often fail to support them in achieving their desired lifestyle and creating the life they want to lead. Ultimately, if you aren't deliberate about how you use your money to reach your goals, you'll struggle to succeed. Living according to someone else's plan instead of your own is a sure path to dissatisfaction.

In this video, I'll discuss why I believe whole life insurance, out of all assets in the world, is actually the foundational asset that can potentially make the biggest impact in your life. I know it might sound like a bold statement, but I assure you that if you stay with me, it will all make sense.

Why and How Is Whole Life Insurance So Misunderstood?

We're discussing how whole life insurance can be an incredibly powerful asset, capable of making a significant impact on your life. It can help you achieve your dreams, live the life you want, and pursue what you love. But how is that possible?

Why is it that most people view whole life insurance merely as a necessary evil, or some might even argue, an unnecessary one? Influential figures like Dave Ramsey and Suzy Orman often advocate against it, labeling it as the worst financial product and recommending term insurance instead. But why?

Here's the thing: a few weeks ago, I made a video discussing Tony Robbins and his concept of the six basic human needs that we all experience as we navigate life. This is a topic I delved into a couple of years back, and it's been on my mind and in my heart a lot lately. Specifically, I've been thinking about the concept of certainty. If you're familiar with Tony's work, you know that he emphasizes how certainty is one of the fundamental human needs.

Now, personally, I happen to have a very low need for certainty compared to most people. I'm comfortable with risk and variance in life. I mean, I made a living playing poker in my 20s, and now I'm an entrepreneur, risk is my game. But even for someone like me, certainty is essential. It provides a foundation that allows us to take big swings, achieve incredible feats, and create the life we truly desire.

For me, certainty has played a significant role. The more success and stability I've achieved, the more confidence I've gained to take even bigger risks in areas I'm passionate about. This allows me to pursue and create the life, business, freedom, family, and time that are crucial to me. By living intentionally, I'm able to manifest these values and aspirations.

The Importance of Having Some Certainty In Life

It's a topic that, in the past, I used to downplay the importance of, about 15 years ago. Back then, I had little regard for money because I was making a living playing poker, and I was doing quite well at it. Even now, I've never really fretted about money. I would say that in my 20s, I didn't have a healthy respect for money because it was never a concern.

I never really worried about my ability to make money because I always knew I could just go out and earn it doing my thing. So, when you have that mindset and lack a healthy understanding of money, it can lead to either a lack of respect for money or an unhealthy obsession with it, I should say. That's what happened to me. Then, life took a turn when online poker was shut down, and I was suddenly confronted with uncertainty.

Then I transitioned into the business world, started thriving, and if you've been following my content, you know the rest of the story. I left the Index Universal Life industry, walking away from a substantial sum of money to pursue what I believed was right and aligned with my moral compass, values, and beliefs, and how I wanted to make an impact in this world. Once again, I found myself thrust into another realm of uncertainty.

So, it was a struggle, and I persevered, staying true to myself, my values, and my compass. What I can share with you is that over time, as I've held on and fought for success, for my values, morals, and beliefs, everything that I believe this industry stands for and why I'm called to be a part of it, I've realized that success has a compound effect. The longer I've stayed committed, the more success I've achieved, and it continues to grow exponentially.

Having Certainty Helps You Serve At A Bigger Level

I believe it's crucial to understand that as I delve into this topic, the more certainty I began to cultivate, the more confidence I gained. I knew I could take risks without the constant pressure to win every business deal or close every sale. I no longer had to worry about myself. Instead, I could wholeheartedly focus my energy on serving others.

If I were to break it down, I'd say that my YouTube channel has played a significant role in that journey for me. It has provided a sense of certainty, a platform to build momentum and success. Thanks to this, I can authentically show up in the world as the person I aspire to be. It's all possible because I have a foundation of certainty; I don't have to worry about mere survival.

Instead, I can focus on thriving, paying it forward, and serving the world in a way that aligns with my values and beliefs, and that brings fulfillment. To me, that's a monumental achievement, don't you think?

Now, let's take a moment to reflect on our lives. Let's be honest about it: financial certainty is undeniably a significant component of overall certainty. We all have the need for certainty in our living situations, relationships, and finances. When we examine every aspect of our lives, it's clear that there's always a foundational need for certainty.

The Biggest Lie In Personal Finance & How To Fix It

Then, shifting our focus to the financial aspect, which is the purpose of this article, let's delve into the concept of certainty. One thing that frustrates me about the personal finance space is a prevalent misconception. I understand why it exists and how it has perpetuated itself, but it's the notion that the younger you are, the more risk you can take.

The reality is quite the opposite: the younger you are, the less risk you actually need to take. In fact, you should take less risk when you're young because time and compounding are on your side. I understand the rationale behind the advice that young people can and should take risks because they have more time to recover from losses.

But ultimately, if you grasp the power of compounding and how uninterrupted compounding can be one of the most potent forces in wealth-building, then you'll realize that one of the most crucial steps you can take when you're young is to minimize losses and invest your money in a way that secures your financial future.

I often refer to something called the LIFE180 Pyramid. It's a concept I discuss frequently. Imagine building a pyramid from the bottom up, starting with safe money. In terms of financial strategy, we have safe investments at the base, followed by medium-risk investments, and finally, high-risk investments.

Unfortunately, many people, particularly in the United States, are living their lives with an inverted pyramid. They've been led to believe that the younger they are, the more risk they should take.

So instead of adopting the approach of "slow and steady wins the race," where we focus on building a solid financial foundation before venturing into riskier investments, many people are misled into thinking that they need to save for retirement without truly understanding what that entails.

They're told to invest for retirement in their 401(k)s, IRAs, qualified plans, Roths, and the like. But the advice they receive is often to simply buy and hold, ride out the market's ups and downs, and trust that over the long term, everything will work out. However, if they haven't saved enough money, they'll face challenges over the course of their 30-40 year career.

When a significant market downturn occurs, coupled with potential job loss and a lack of safe money, their entire financial future becomes vulnerable. Relying solely on these volatile assets without a solid financial foundation isn't true investing. Real investing involves building that foundation first so that you can then take calculated risks.

That way, if, for instance, we have some high-risk investments, we've already built a solid foundation. So, even if the top of our financial pyramid gets destroyed during a market downturn, like the 40% correction we experienced in 2009, we have that safety net in place.

If that happens, it's okay because we have this stable foundation, accounting for 85% of our total assets or whatever the proportion may be. However, if we're solely reliant on volatile investments and the market tanks without any safe money to fall back on, that vulnerable point crumbles. Losing your job in such a scenario can have catastrophic consequences, causing your entire financial world to collapse.

 You Will Want Whole Life Insurance Even If You Don't Need It

And that's why I advocate for the power of whole life insurance. Regardless of your stage in life, you'll want to reap the benefits it offers. When you're young and ambitious, you'll appreciate having a savings vehicle, like the one I mentioned in the pyramid, a liquid savings account.

Many people opt to put their money into a high-yield savings account at a bank, and that's a valid choice. I'm not here to argue that a whole life insurance policy, especially in its early years (say, year one through three), will outperform such accounts. It likely won't. Currently, you can get around four and a half to five percent with a high-yield savings account, which is quite attractive.

However, it's worth noting that just a couple of years ago, the interest rates on these accounts were much lower, maybe just a tenth or two tenths of a percent. Meanwhile, your whole life policy would have been steadily growing. When we think long-term, we must realize that short-term thinking won't solve long-term problems. The economic environment is ever-changing and not necessarily consistent.

We need to acknowledge that over time, the market will experience fluctuations, up, down, up, down. Similarly, interest rates will fluctuate accordingly, sometimes with longer or shorter periods of increase or decrease. Currently, we're in an environment where interest rates are on the rise.

For the past 30 years, we've been in a decreasing rate environment. Now, it's uncertain how long rates will continue to rise. However, during periods of increasing rates, whole life insurance tends to follow the fixed market and the performance of more fixed products like bonds, CDs, and high-yield savings accounts. Nonetheless, the principle of thinking long-term remains paramount.

How Whole Life Insurance Gives Each Dollar Multiple Jobs

When you're saving, consider how to make your dollars work in multiple ways. This, to me, is crucial. Leveraging your dollars to serve multiple functions is not only powerful but also safe, as there's no risk involved in utilizing this form of leverage.

The only downside to whole life insurance and leveraging it is that you may experience a short-term liquidity crunch. However, consider the alternative: instead of putting $10,000 a year into a savings account earning 5%, what if you put $10,000 into a whole life insurance contract? Let's say you only have access to $9,000 out of that $10,000 in year one.

In the high-yield savings account, I only have cash, without any additional benefits. Plus, any gains I make are taxable. However, with the whole life policy, while I may lose $1,000 in liquidity upfront, all the growth from that point forward will be tax-free. Additionally, the long-term internal rate of return is likely to surpass that of a high-yield savings account and even compete with bonds over the long term.

When I say long-term, I'm referring to periods exceeding 10 years. With whole life insurance, we're talking about a product that not only provides a death benefit but also serves as a self-completing plan. Even if you're currently in your 20s without a family, it's likely that at some point in the future, you'll want to start a family.

So, you'll want to establish this foundation when insurance costs are at their lowest. This is where you can save your money, adopt a long-term perspective, and ensure you have insurance coverage as you age. Later on, as you enter different life stages, such as marriage and having children, you'll already have insurance coverage in place.

As you progress further, with kids going to college, you'll have access to funds that can be utilized for their education expenses. And as you approach retirement, this resource can serve as a buffer against market volatility, providing you with financial stability.

And as you utilize it in retirement as a volatility buffer, one thing we must acknowledge is that we're not escaping mortality. The reality is that there's a high likelihood we'll face health issues as we age. It's just statistics, I'm not trying to be negative here, but the numbers speak for themselves. There's a 70% chance that at some point, we'll require some form of assisted living before we pass on. That's simply the math.

If you wait until you're older to address these eventualities, it's going to be incredibly expensive. Whole life insurance allows you to tackle these issues right from the start. It addresses your short-term financial needs while also providing coverage for various life stages and needs you'll encounter along the way. With whole life insurance, you can rest assured that these needs will be covered, providing you with peace of mind.

Become Who You Need To Be To Live The Life You Want To Live

Now, let's bring this back to the topic of this article: certainty.

The fact is, when you have greater certainty about various aspects of life, it prepares you for the inevitable uncertainties ahead. By addressing these uncertainties proactively, you can alleviate worry and move forward with increased confidence and trust. This mindset empowers you to embrace the role of an investor and take decisive action.

Going out and embodying this investor mindset is crucial. Why? Because if the market takes a downturn and you experience financial losses, having a solid financial foundation means those setbacks won't devastate you. However, if you're constantly worrying about your financial stability crumbling beneath you, it becomes challenging to move forward and present your best self.

Now, one of the truths I find paramount to understand is the concept of the financial pyramid. Let's revisit this idea, as it holds significant importance. When you prioritize, as I'll illustrate here, the layers of the financial pyramid, it becomes clear how vital this understanding is.

When you prioritize safe investments, such as saving before delving into medium or high-risk ventures like long-term stocks or cryptocurrencies, it offers significant benefits. Especially for young investors, focusing on fundamental financial principles, like those detailed in Ray Dalio's book, can be incredibly beneficial. Emphasizing the importance of saving before investing, with the ultimate goal of strategic investment, is key.

Imagine the process of filling this in with money, almost like coloring it in. Each year, we add to our savings, gradually filling the space. While it might be difficult to completely fill it in, the goal remains constant. It's akin to saving money consistently over time, with the aim of eventually achieving financial stability.

As this journey progresses and the space fills up, it's important to recognize that the process itself is a journey. Life doesn't adhere strictly to spreadsheets, and neither should your approach to money management.

Your money should align perfectly with your values, beliefs, and goals, all with the aim of facilitating the life you desire. And here's a truth I firmly believe in.

The meticulous process of meticulously filling in every gap and ensuring your savings are precisely where you want them to be, to establish a solid financial foundation, will transform you into someone different from who you are now.

One of my favorite quotes that has had a profound impact on my life is this: "Chris, you are where you are in your life because of who you are, period. If you were better, if you deserved more, you'd have more, right?" It's a tough reality to accept.

We all need to engage in that internal reflection. I'll share with you the same message my mentor imparted, which hit me like a punch to the gut: "You are where you are in life because of who you are." What I appreciate about whole life insurance is that it's a self-completing plan. By viewing it not as an investment but as a savings alternative, we can truly leverage its benefits.

When you contemplate it from that perspective and approach it with determination, you're laying the groundwork. The process may take time, right? It might require you to exercise patience and delay gratification. Instead of aiming for 8 to 12% returns in the first 10 years, perhaps settling for a 4% return during that time period could be more prudent.

But if I told you that investing money here might seem more appealing on a spreadsheet, consider this: what happens if the market declines while this option continues to perform? Moreover, what about that 4% return when you have access to it and you're going through a process that establishes a solid foundation, providing you with more certainty? It puts you in a position where you start to recognize the value of your human life, doesn't it?

As I recognize the value I bring to the world and to my family, I understand the importance of insuring that value. So, okay, that's a good thing. But beyond that, having access to and control over your capital, the number one asset you should ever invest in is yourself.

I believe that when individuals, like myself, begin to think, "No way, I would never invest a penny in the stock market," it's because if I can't achieve an 8 to 12% return by investing in myself, my businesses, and the projects I'm involved in, then it might feel like I should just give up.

Because there's no guarantee we're going to achieve that every single year. However, over a long period of time, if you invest in yourself and develop yourself as an asset, which, by the way, as you go through this process, like I was saying, filling this in, you're going to become somebody else.

You're going to grow into who you want to be to live the life that you love, and chances are, you're not there right now, but you've got to be willing to slow down to go fast. The biggest mistake people make in personal finance is assuming that the younger they are, the more risk they can take.

So, when they're 20, they go out and invest in cryptocurrency. Not that all crypto is bad, by the way; I'm a big fan of Bitcoin. But if you're speculating on Bitcoin and putting money into assets you can't afford to lose, well, that's just a financial mistake.

Create A Plan Of Predictable Success With Your Personal Finances

Now, am I going to sit here and say you can't get lucky? No, of course not. Luck plays a role, and some people do strike it big. They take a swing, hit a home run, and get lucky. But for every success story, there are many more who swing and strike out on ventures like that.

If I could share with you the number of stories I've heard from people in cryptocurrency who invested their first ten or twenty thousand dollars in their 20s into Bitcoin, only to lose it in a Bitcoin mining scheme or some altcoin, it's because they were chasing returns instead of focusing on financial structure.

Ultimately, my encouragement to you is this: if your money isn't helping you grow into the person you want to be, to live the life you love, then perhaps it's not the right investment for you. That's just it.

Anyway, I'm done with my rant. Hopefully you found value in that. If you did, please like it, share it, and spread the word. If you haven't already, make sure you subscribe and hit the bell icon to receive notifications every time I release a new video on my YouTube channel, LIFE180.

I'd be really curious to hear what your thoughts are on this. Is your money in alignment with your values and beliefs, and is your financial strategy helping you become who you want to be? Tell me in the comments below. Have a blessed and inspirational day.