Why Life Insurance Is Important w/Joseph Lombardi

Joseph, welcome to the podcast. I'm excited to get to know your, a little more, your personal story, but before we do that, tell us who you are and what you do. I'm the owner of Iron Hawk Financial. We are a nationwide financial services planning, estate planning legacy planning firm that has about 50 agents with another 200 of 'em that are like brokers. And we have lawyers, accountant, CPAs, attorneys, and we specialize in using life insurance as an asset. And we specialize in long-term care planning to keep more of your assets in your pocket, not the state you live in. Very good. I love that. So what got you into this business? And I know you were sharing with me a couple of your accolades, so share your accolades and then what got you into this and your big why. I'll try and keep this short. Yeah, I've been this 22 years, won 27 or 29 industry awards. Now I've been featured in International Business Times, business Insider, market Insider, the Daily Collar. I'm on the cover of plenty publications, like the top 40 under 40 for finance. Also the who's who and Building Construction 'cause I work with a lot of business owners in the blue collar field. I also have my own radio show, money Talk with Iron Hawk. Five star rated on Google, a plus rated on the Better Business Bureau. I publish and written three books that are all on Amazon. One of 'em is close to being a bestseller, being your own bank. I also have written there's a better way than a 401k and long-term care without long-term pain. And yeah, I basically just try and help people save money on taxes and have their money stretched so that they can, you know, enjoy their last years you know, not worrying about money. Yeah, so good. I was sharing with Joseph that we have not covered life insurance yet on this podcast, so I'm excited to go into that topic. So why did you, why did you get into this role and what sparked your desire to build your group but also focus on long-term care? So, I was. I don't know, 11 years old. It all started and I was doing construction with my dad. My mom left at four years old so she can do drugs and drink and live in ary tone and drive Mercedes and live that life. She didn't wanna be a mom. She wanted an abortion before I was even born. So I'm lucky to even be here, to be honest. And so that was done. It was just me and my dad. And so I, he owned JV Lombardi builders and we were just, I was normal. I would be checking jobs with him, you know, where else am I gonna be? 6, 7, 8, 9, 10, 11, 12, 14, you know, 15, 16 years old. I was with my dad. And we went to check on this mansion in Greenwich. And to make a very long story short, I took an elevator down to the basement. The guy had a baseball field in his. Freaking basement with like a Chuck E Cheese thing. It was insane. I get back in the car, I had a blast. Oh my god, I had a blast. And I asked my dad, what does that guy do? He said he works on Wall Street. So in the back of my head, I had no idea what it went, but in the back of my head I'm like, I wanna work on Wall Street. 'cause I want that type of lifestyle. And fast forward about five years my dad's doing a h another house in Greenwich, Connecticut. It's a very wealthy town. He did like this whole row and he accumulated millions and millions of dollars in profit. And, he ended up following three stories off a ladder and the bone in his foot disintegrated. And at that time he was going through a divorce with my stepmom because we found in the back of the closet during the divorce, we found a bunch of receipts in an old purse for vanilla extract in Listerine. And we found out that because my dad's been in AA since 91, she couldn't bring any hard liquor or beer into the house. So she was sneaking it through vanilla extract and Listerine. So my sister was born two pounds, seven ounces with fetal alcohol syndrome. About 13 weeks early. She survived, thank God. But now here I am at this time, she's two. I'm 15. I'm a sophomore at Fairfield Ward in Connecticut. And I, I was like lettered in sports. I was running, you know, 10 miles a day. And I had to drop out of football, basketball, and track. And I started working at this daycare called child's Garden on Mona Terrace which was very close to my house. And I used to walk to school so, or ride my bike until it was, you know, not cool to ride your bike when you get older. So it was right before I got my license, I had to walk her to the daycare, walk to school, go to school, work there from like three to when they close at six, and then I'd walk down the hill where there's like a Burger King and a grocery store and just. You know, take my check money and buy us dinner. And it was really difficult. But, you know, I didn't wanna say anything 'cause I didn't want DCF involved where they would've split me and my sister up and wouldn't have the same school system. So I didn't think it would, my dad would be in the hospital for almost two years of reconstructive surgeries and rehab. So, you know, that was a big defining moment in my life to be like, are you kidding me? My dad was worth $25 million. He had an Audi S eight. He had boats, he had real estate. He had like 20 houses in the next town over all rental properties. I. But he had no life insurance, which he didn't die, which is fine, but he also didn't have any disability insurance. And then sure enough, 20 years later, now he's got Parkinson's disease and he's in jail, also known as a nursing home in a 10 by 10 room with a stranger that's blasting, you know, the Met game at 3:00 AM and it's, it's very hard to go visit him. So. I, I realized that like, hey, a lot of people aren't planning, you know, and then of course God just sprinkles more down on me. And then my mom ends up dying at 52 years old. So us to liver from alcoholism with no life insurance. And I was her only kin of course. And now I'm responsible at like 20 years old to take care of her estate. And then she died ten three oh nine. My, my first child was born 11/3/09. We just bought our house August oh nine. So I went into like this, just deep anxiety, depression, panic attacks. I couldn't handle it 'cause I. Didn't, couldn't mend the relationship we had. And then on top of it, financially, I went in severe credit card debt 'cause I had to transfer her body across state lines. And they charge you per state line, at least they did in oh nine. And I had to come up like 30, $40,000 when I didn't have it. We just did the babies room. That was the last penny I had for the crib and the, you know, members, babies r us back then. And that was like five grand on a credit card I didn't have. And then I got another 40. It was, it was a complete nightmare. And then about two years after that. My grandmother loses her husband, who owned Lombardi Mason, rebuilt all the Westfield shopping malls in New England, their foundations. So she inherited about 4.55 million bucks. It took my grandfather 40 years to build and then she had a stroke led to dementia because on top of losing her husband, she loses her son, my uncle, through Agent Orange you know, from battling cancer for years because of that, when he was in, in, in the Vietnam. So I. You know, she, she was in Ludlow nursing home across from Sacred Heart University in Connecticut for seven and a half years, which 5 million gone. Because people don't understand, like if it, for every dollar you need for care, it actually costs you $2. 'cause you have to cash out IRAs, 4 0 1 Ks real estate, you gotta pay realtor capital gains, ordinary income tax, federal tax, state tax, fica, Medicare, unemployment, social security tax. So by the time you get the dollar. It's 48 cents, so you know it, that money was gone and I'm sitting there and I'm like, holy crap. My, my family were very hard workers. They owned businesses, they employed hundreds of people. They, they made, you know, the world a better place, but they, they never thought that like. Anything can happen to them. And of course, my dad being an old Guinea, he was like, oh, I'm Superman. And he was, his calves were like this big, you know? And but things happen outta your control. And I, and I really realized that like how many other contractors and business owners and blue collar business owners are don't have that, so I started. On I 95 from, you know, Connecticut, going down to New York City, and I would drive really fast in the left lane. As soon as I saw a truck, 1, 2, 3, electric, A, B, C, plumbing, I pull behind him and I'd be like, Hey, purpose of my call. My father was Jamie Lombardi builders. You fell three stories off a ladder, lost everything. Can I buy you a cup of coffee? Make sure it doesn't happen to you and your family. And I started killing it, because no one had anything. Like these business owners are like, I never thought of that. Like I'm, I'm insured up the, you know what, with liability, workman's comp, auto home health insurance. I don't want another freaking insurance policy. So I found a way that you can actually make money on your insurance policy so you can protect your family, protect yourself, save millions in taxes, and make money and build a legal tax free pension with no 59 and a half year rule and you can't lose. And it's sue proof and it's divorce proof in some states. So it's like unreal. And I then I found this IRS code section 7 7 0 2 that's embedded in the permanent life insurance. And I was like. Are you kidding me? And it like smokes 4 0 1 Ks and IRAs from the standpoint of fees, growth, downside protection, liquidity, you know? And so I just went nuts and I just, for the last 20 years, just been building my business unbelievably up to over 2000 clients and over $2 billion of protection rollovers in 39 states, and I'm licensed in all 50. Yeah. Wow. What a story. I know everybody is like, it's not gonna happen to me. Of course not. Death happens, we just don't know when. What is your advice to somebody who's like, I don't have, or I have very little life insurance. What's something they need to start thinking about to, you know, capitalize on it as well? So the, the con, I've met thousands of people and the consensus is, is that I need life insurance till my kids are 25, 26. And then once they're older, they have their own life. I don't need life insurance anymore. And that can't be farther from the truth. 'cause what ends up happening, and I can't tell you hundreds. When I say hundreds, I mean hundreds of people over the age of 60 that were dying to build a legacy for their grandchildren, wanting a big life insurance policy. Put it in an irrevocable life insurance trust, also known as an eyelid trust, and they get declined. And they're like, whatcha talking about? You're like, you have high blood pressure, overweight, you have cholesterol. You, you, you just had a heart attack, you had a stint put in, like, they're not gonna cover you. And they're like, what? I, I, I'll pay 50,000, a hundred thousand a year for a plan to make sure that my grandkids, you know, because I love them so much and their little babies and I hold them and I have the, I have the assets and the resources to do, and it's like. Sorry, like, like I'll, I tried, we ran through 20 carriers 'cause I'm a broker. I've access to over 200 of them. And, and so the, the, the thought process is that people never wake up on a Thursday and are like, oh, how's my life insurance or my long-term care strategies, you know, in their forties, fifties. They always wait until it's too late. Yeah. Right. They always wait until it's so expensive that they can't afford it, or they ha finally have the money and they're an insurable. So it's, it's so important that when you're young, like when all three of my kids were born, I got 'EM accounts, literally as soon as their social security number came to me, like three weeks later. They got life insurance that day and, and you think like, oh, why would I wanna make money if my children die? Like, no, that's not it, because I built them their own bank. The, there's something called the Rockefeller strategy that they're like, how are you thinking that the ultra wealthy people in this world, how are they keep, you know, keeping the rich, rich and the poor, poor? All this is planning. It's really all it is. It's, it's taking a, a small percentage of your income, putting it away, having it growing compound. The, the benefits in it, including the long-term care, the life benefits, hence life insurance, not death insurance. We're not talking about term life here. We're talking about permanent life insurance, not renting your life insurance like most people do. Like I have life insurance. It's like, no, you don't, because the insurance company wouldn't have sold you that policy through underwriting. If they knew there was a 99.99% chance you're gonna die in the 10, 15, 20, or 30 years. They're not dumb. They've been doing this for 180 years. You don't think they have a law of large number based on your age, your sex, your health, your demographic, your prescriptions you're taking, whether you've had Psyche, DUI speeding tickets, they, they can tell you. Literally within a two year window when you're gonna die, unless there's a crazy freak accident. So it's like people think like, oh, I have life insurance. I'm all set. I have it at work. Okay. What happens when you retire? You're on a group plan at work. It's on the tax ID of the company, not on your social security number. So as soon as you detach yourself from a, a retirement, a quitting, or a firing, you have no life insurance. None. And then now how old are you? 53, 56, 61, 64, 68. You really think insurance companies wanna insure somebody like that, take that risk. If they do take that risk, it's gonna be way too expensive. You're like, I don't want to pay that. Well, should have done it when you were younger. So it's vitally important when you're hitting 40, even 50. I have clients in their seventies that bought life insurance from me, but they were worth millions of dollars referred from an estate attorney. But it's very, very important to do that planning now to build that foundation. I call it people always skip the foundation. Why it's not sexy. When you're at the cooler, you know, with at a coworker, you're talking to another business owner. What do you talk about? Bitcoin stocks, real estate. I. Nobody said, I have an IUL, I have a whole life plan. I just bought 1.8 million in life insurance. Harold, nobody, it is not sexy. So it's not something that people talk about, but they talk about, Hey, I bought SoundHound when it was $4. I bought Bitcoin at 20,000. I bought Ethereum or XRP br. But it's like, that's great. You, you're just creating a lot of money that the government's gonna end up stealing from you later. Because we're all guaranteed to die. Sorry. Sorry guys. We don't make this, you know, we don't survive this, this life. You know, as, as physical, I believe we, we go on spiritually, that's a whole nother podcast. But when you have the chance, you have to make sure that you have that like financial foundation set up to protect the people you love. Because if you, you know, if you fail the plan, your plans to fail. And you're the only one that's gonna help your future self, which most people lack and forget. Or don't put it high enough on a priority list until it's too late. Yeah. Yeah. And insurance. Yeah. It is boring. I mean, oh my God, it, yeah, it, it's boring. However, listening to you, I'm like, wow, this is interesting. You know, I love this. It's some cool stuff in it. There's some really cool loopholes, talk about it. Okay. So tell us, tell us these loopholes. What are going to, long-term care. Or you know, inheritance, like what are the loopholes in life insurance? Absolutely. So the best loophole in life insurance is IRS code section 7 7 0 2. If you were to Google that, it'll tell you it's the IRS code embedded in life insurance. I don't know if any of your listeners remember when Donald Trump and Hillary Clinton were on the political stage and Hillary Clinton goes to Donald Trump, show us your tax returns. Show us your tax returns. What did Donald Trump say? I'm not gonna show my tax returns. She said, yeah, 'cause you pay no taxes. He goes, you're right. I don't pay taxes, but I used the same loopholes that your donors use and you had 30 years to close it. It was a very pivotal moment in the, in the election race in 2016, what they were referring to, which most people are like just right over their head. Yeah. What they were referring to was IRS code, section 7 7 0 2. Think of a trillion dollar industry that the average American doesn't know exists. How are they making all that money? Where's all the money come from? From the 0.01 percenters? Think of somebody if they, they sign a $700 million contract like Shhe Otani, to go from the do to go from the Angels to the Dodgers. Does he put it in a bank with a $250,000 FDIC insurance? Does he get a 401k with a $18,000 or 19,005 catch, or a SEP with a $70,000 ketchup? No. They dump that in life insurance. Well, why, why would, if I got 700 million, why would I dump it in life insurance? Well, let's, let's talk about it. Number one, it is sue proof. Remember HIPAA laws because of covid. Yeah. It's illegal for any creditor, even government organization to know you have this asset. What do you think rich people love? They love to not let everybody know they're rich because they don't wanna be a target. So they hide their money and life in insurance. Then what else? Well, what if they get divorced? Well, if it's inside of a trust, they can't touch it. So, you know, you hear about these stories of like you know, a, a, a. A a, a athlete gets divorced and the ex, you know, the ex, the soon to be ex-wife's like, I'm taking half your money. You put all his money in his mom's name. It's the same thing, what they do in trust. So they get it outta their name and no, I'm not advocating people to do that, to hurt your spouse, but it's just something that the ultra rich think about, especially if they're not married yet. So they have that set up. What else? Well, you can't lose. What do you mean you can't lose? Well, there's two types of permanent life insurance. One is a whole life plan, which is like a bond portfolio for very conservative investors. You're gonna average six to 7% tax free on your money, and you may be squawking at that when the market's been getting 30% in the last 12 months. But what is the s and p 500 average in the last 20 years? 7.6%. What is life insurance average in the last, A whole life average in the last 20 years? Right around 7.6%. One is tax taxable, so there's half your gains. 'cause the government, you're in bed with the government when you're in a 401k or an IRA and one's tax free, which one do you think nets more? Well, you have fees or life insurance. You have fees inside of 4 0 1 Ks and IRAs 12 B one fee class A share fund fee, money management fee, annual account fee, mutual fund expense fee. Lloyd Wall Street has been in bed with the 401k market for the last 30 years. I worked in Wall Street for six years. I know it. I used to sell in, I was, I was securities license for 17 years. It is a very dark, demonic place because they're taking one or 2% of your money whether you win or lose. And they don't care. Their goal is just to take as much qualified money as they can put it under management, and they just throw it in a, in a target fund, and 80% of those money managers can't even beat the s and p 500. So you think like, oh, I'm, I'm all set. It's like you are all set. It's set up. That's what you are because of gov. You have the government that's gonna take half your money when you pull it out in FA, Medicare, federal, state, unemployment, social security tax. Then you have with all the fees, one or 2% compounding for 30 years not on your contribution. Like we get paid on life insurance on the total account value. So you think if you start, you know, I only start at $15,000 a year. He's only taking 1500 bucks, but what happens 20 years from now, it grows to a million. He's taking 10 grand. How about when it goes to 3 million? He's taking 30 grand, which is more than your first two years of contributions he's taking 20 years from now, or she is. So you have to, under, people have this short term memory loss, that it's all about instant gratification. And now, well, if I offered you two amounts, $2 million tax free, or $2.8 million taxable, which one do you want? Well, most people say, oh, I'll take 2.8. Well, if it goes through taxes, you're gonna get like 1.6. The cash that you build inside of life insurance, especially permanent index, universal life, variable universal life, which I, I don't like, but we don't have to go down that road and or whole life. Which is for very conservative people. So it's just like a bond or a CD type of life insurance account. I. When you, when you build those up, that money is yours, like it's liquid cash. There's no 59 and a half year rule. Unlike a Roth IRA, there's no 10% penalty. Unlike a Roth IRA, there's no filo, which I know I'm speaking Spanish, but it means first in last out, and that is in a Roth IRA. Meaning if I put 10,000 in it and it grows to 20,000 and I need the money before I'm 59 and a half, the government is going to penalize you. Federal tax, state tax, fica, Medicare. All taxes and fees on a tax free asset. Really. And what's the percentage of somebody taking money out of a retirement account? It's like 70%, or the government wouldn't bother putting a 10% penalty in. So they know this whole, the whole system. Not to put a tin foil hat on. Just looking at the numbers and looking at facts. The fact is, is that when you invest in IRA or 401k, the government is enriching themselves because half of that account belongs to them. Whether if you lose all your money, government didn't lose anything. If you, if you triple or quadruple your money, they get half of whatever you gained with no risk inside of it. It doesn't seem fair to me. And then on top of it, if, if taxes were to go up. Well, that's even more of your money. And by the way, we owe $38.6 trillion in debt with 42 trillion in Medicare and, and 27 trillion in Social Security and 227 trillion in US unfunded liability debt. I. All could be [email protected], by the way. And where were taxes? In 1980s. Oh, they were what? 67 0. They were 70% and the eighties, not 18 0 2, 19 84. Five six. How about 1963? Where were taxes? 91%. So if you don't think it can happen, yes, Trump won, which is amazing. You know, sorry to be political, but I'm saying for, for monetary reasons and other things, not whatever, I'll just shut up with that aspect. But if you understand exactly where, where things are going, and all of your eggs are in one basket, they're all taxed, they're all high feed, they're all illiquid, they're all tied to the market, including your business, including your home. You're not diversifying. Market goes down, you lose. Taxes go up, you lose interest rates go up, you lose. Inflation goes up, you lose. Let's talk about life insurance. When taxes go up, you lose nothing. When the market goes down, you lose nothing. When an interest rates inflation go up, you make more money. So knowing how much money was printed in the last four years compared to more than the existence of the United States of America combined. You see the stock market going up? Do you know what people are making in index Universal life policies documented over the last 20 years? 14.93%. Tax free compounding. I just told you the s and p's averaging like seven point a half. That's not double. That's quadruple because the s and p 500 is usually invested in what? IRAs and 4 0 1 Ks. That that would net you about three and a half, 4%. This has been averaging 14.93 documented tax free. So you're talking about a 400% up when the market lost in 2022, which everyone has a short term memory, like no market in the last 12 months is up like 40%. Cool. 2022 market was down like 20 something percent. My client lost nothing. So when you take a look at it, for every 1% you lose. If let's say you lose 50% for every 1% you lose, you need 2% to break even. And this is where people lose math, and I know I'm long-winded. I'll end with this. If you had a hundred dollars and you lost 50%, you have $50. If I gain back my 50% that I lost, I have 50% of 50, which is only $25, which means I have $75. So if I lost 50% on a hundred, I have $50. I need a hundred percent. 50 into 50 is 1.0. So if I lost 50 and then gained a hundred, I made nothing. Then you take the fees out that you were paying 12 B one fees class, you actually lost money, right? Because there was a study done. I forgot by what, what colleges said, if I give you an account that lost 50% and gained 90 the next year, would you want it? And like 87% of people were like, oh, I'll take that account. And they were down like 12%. Because people don't understand finances. Most people just like, I don't know, it's too much. There's numbers involved, there's there's codes, and I don't know what I'm, I'll just trust somebody else. Well, the person you're trusting is in five Star rated, like I am a plus rated on the Better Business Bureau, like I am, have zero complaints in 22 years with thousands of clients. Then maybe you should see what their ratings are and maybe you should say like, 'cause most people I meet, they have an advisor already. And I talked to 'em about taxes and liquidity and diversification and downside protection, and they look at me like, like, you don't have a, you don't have a planner. You have an investment advisor that'll just take your money and charge you a fee and then patch your, patch it on the back when the market's up. Look how great I am. And then when the market down tells you, oh, it's a great time to buy. Either way, you're right. That's how they train you in wall Street, by the way. So if the market's up, you're a hero. If the market's down, you're a hero because you're telling 'em to buy low when you just lost them a bunch of money. It's like the whole thing is rigged. Not to sound crazy, but if you really understand, 'cause as an economics major, if you really understand how arbitrage works and taxes work and long-term returns and liquidity versus, oh, what did I make this year? You'd understand that the government is playing you and taking advantage of you. Yeah. Who knew that the topic of insurance was so entertaining. I just want to thank you for this, Joseph. So if people are interested in learning more, getting a better understanding of everything you've touched on in this episode, how do they get ahold of you? Yeah, so any of your listeners wants all three of my books absolutely free, plus all the articles that I've been featured in International Business Times, business Insider, market Insider. And two Forbes articles on my strategy written by a certified financial planner and a CPA an accountant is telling you to buy life insurance, believe it or not, in Forbes. If you want those, just write an email to [email protected]. Just put free books. You won't go on any type of spam list or anything. I'll send you all the information. I'll send you as a a Calendly link if you wanna book a free consultation on my calendar. I can build you a custom plan for absolutely for free. I could show you how much money I could save you in taxes where it's at minimum, hundreds of thousands of dollars usually turns to millions, and then I could save You get this hundreds of thousands of dollars in interest because my clients use their life insurance to finance homes, buy vehicles, college for their children, which instead of you paying a federal grant, $80,000 in interest over 10 years, you make. 50 to a hundred thousand dollars in interest on your money by being the bank, meaning while the money's lent out somewhere else, you're still earning interest on it. That's called non-direct recognition. Again, you can Google it, but a lot of people just don't take the time and they think, oh, well, er, Earl and Sarah and Bob are doing a 401k, so I'll just do what they do. When you realize that, are they millionaires, are they billionaires? Because this is what the ultra rich do, and I try and bring it to the middle class or upper middle class market. Yeah, and I appreciate that. I appreciate that. So email Joe, get your list of books. Schedule that consultation to learn more. He's licensed in 50 states, so he's gonna cover you. Joe, thank you for taking the time. And is there one last thought you have for us? You can go to my website, www iron hawk financial.com. There's a contact us button, name, phone number, email me or somebody on my team will reach out to you. But I mean, at the end of the day, it, it, most of your listeners are doing the right thing. They're saving for their retirement. They have a term policy set up case they die today. They have some sort of 5, 2, 9 or Chet plan for their children. So they're trying to do the right thing, but just know that, you know, you're doing the right thing. You're just doing it the wrong way. And, and I've lived by one last thing that men lie. Women lie numbers don't lie. I can show you the numbers where I can save you and make you so much more money than you can with your current strategy. And even if you don't wanna work with me, just find somebody in your area that that knows what they're doing. And I promise you that you will be so happy to sleep at night knowing that when either God calls you to go or God calls you to stay a little bit longer than maybe you want to, you didn't exhaust everything and give everything away. Yeah. I love that. Thank you for that advice and thank you for being here. And thank you. I appreciate you letting me use your platform and your, oh yes. I really enjoyed this. I appreciate you very much. Anytime. I did as well. Thank you so much.