Wealth-Building Wisdom: Insurance Is Your Foundation with Christopher McKenzie

Christopher McKenzie, a Navy veteran turned Financial Agent, joins me to highlight the transformative power of Financial Education. Spurred by a pivotal Black Enterprise article, Christopher's odyssey from military life to a finance maven is nothing short of inspirational. He highlights the multifaceted benefits of life insurance—particularly Index Universal Life policies—and how they can be leveraged beyond mere death benefits to establish generational wealth. Our exchange goes deep into the tax perks outlined in IRC 7702A, uncovering a realm of financial strategy oft-ignored but crucial for communities historically left out of the wealth narrative. Financial know-how is more than just balancing a checkbook; it's the linchpin for both individual prosperity and collective political clout. Our conversation cuts to the core of why financial literacy is so vital, examining the sharp contrast between mere income and true economic advancement. We discuss the state of the Black community and the opportunities to improve the power of it's dollar by stressing the importance of prudent purchasing decisions, especially when it comes to significant investments like vehicles. By focusing on steady growth rather than the allure of keeping up with the Joneses, we have a passionate discussion about a path to true financial freedom. 


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Transcript

Speaker 1: 0:24

Welcome to the Money Focus podcast. I'm your host, moses, the Mentor. In this episode, I'm joined by a distinguished financial professional. His name is Christopher McKenzie and he's on with the MBA and also a deep understanding and expertise of wealth building, and he's here to discuss the transformative powers of financial education, particularly its impact to the black community. So get ready to dive into a conversation that bridges the gap between financial literacy and sustainable wealth creation. So let's go All right. Thank you, christopher, for joining the show. I always like to start the show to give my guests the floor to talk a little bit about their career journey and also what inspired you personally to start your career in insurance.

Speaker 2: 1:14

So the floor is yours. Well, once again, Moses, I want to say thank you for inviting me onto your show. Just to give you a little background about myself and my journey. Originally, I'm born and raised in New Jersey. I transferred down here to Norfolk, Virginia, 21 years ago and, because of the Navy, I did 21 years in the Navy, the thing that got me. While I was in the Navy, I started reading and I read an article out of Black Enterprise and this article was pertaining to a young man that's from New Jersey who started his career in netting venture capitalists with people that wanted to start their businesses and things like that, and so it intrigued me. It intrigued me and I said, well, okay, well, let me learn a bit about this. So I started taking an interest in business.

Speaker 2: 2:15

I came out of the military, finished my bachelor's degree in business administration and then I got my master's in business management. So I started reading books in regards to the stock market, mutual funds work, blue chip stock, things like that, and that was always an interest of mine and I said, wow, this is something that I really would like to get into and learn more, and at that time I did not know that the at the base of all of that is insurance. So once I started learning that insurance was the base of all of this investment, I said, well, let me learn more about insurance. So I looked for means and ways to learn about insurance and I found that and I started studying up on insurance and how insurance works and I said, wow, you know, there's so much to this that you know I want to learn and I want to be able to pass on the other people and educate them. And one of the things that I found out that was really interesting to me that insurance you transfer risk.

Speaker 1: 3:32

Expand on that a little bit. What role does insurance play in personal financial?

Speaker 2: 3:38

plan. That's a good question, because what I found, that in establishing a financial foundation, insurance is one of the cornerstones. Okay, and most people may or may not notice, but insurance, if it has a cash value, part of it, it gives you the opportunity to be able to build upon it. Right, and many, many, many million successful people have used insurance to their benefit, and one of those people that come to mind is Walt Disney. He had several different policies on him and he was able to use that as a means to borrow against him to build Disney World, disneyland okay, to build his empire. Ray Kroc is another one, sam Walton is another one. So insurance becomes not just debt benefit, but there's more to insurance than we know. And because we are able to use that insurance to fund many different avenues, you can build on top of it. Right, that means, in a way, to create generational wealth. So insurance becomes one of the cornerstones that you need to be able to build a financial foundation with.

Speaker 1: 5:09

Like, when I hear life insurance or just insurance, I'm thinking of it as a debt benefit, something that I can. I won't personally get the opportunity to enjoy, but my family will be financially stable in my absence. So can you kind of talk a little bit about, like, some of the strategies that you can advocate for that will build wealth, maybe alongside life insurance?

Speaker 2: 5:35

One of the strategies that comes to mind that is currently being used is the IUL is Index Universal Life, and with the index universal life policy, like I said, it allows you to have the debt benefit, but it also provides you with a means and a ways to protect your money from taxes. Right, there's a tax code that is used in insurance called the IRC 7702A, and this code makes insurance life insurance non-taxing. Okay, so it's tax free. So now with the index market, you're able to go into the marketplace, receive a rate of return Okay, and if the market was to go down, your rate of return is still protected. You're locked in. So now, if that rate of return goes up, that's great. You're still protected and you're locked in at the new interest rate. But if the market was to go down, it wouldn't affect you. Okay, so you get all the highs and none of the lows in the index market, okay.

Speaker 2: 6:57

Now many of us don't even know about the index market. So we look at some other strategies that we use, like your whole life policies out there, and people use that insurance to have the protection of the debt benefit and everything, and there is some cash accumulation, but the interest rate is set by the insurance company, okay, whereas in the index market the insurance, the rate of return, is directed by the market itself. So you can use either one of these strategies to accumulate cash value, but it is in the IUL, the index market, that you can get the best value for your money. Okay, and because of the IRC 7702, your monies are protected from taxes. Many of the poor in the middle class never heard of the 7702.

Speaker 2: 8:01

They don't know what the 7702 is and let alone know what it can do for you. So understanding that tax code and understanding how that strategy or those strategies work puts you at a vantage point, more so than you would ever have with a savings account, money market account or even a certificate deposit. So those are some of the strategies that I recommend the foundation that you need or the monies that you want to accumulate, and you can use that monies towards retirement retirement supplement. You can use it for travel, you can use it for savings for college for your kids, whatever it is that you so desire. You can use that money that you're accumulating in your cash value to be able to do that.

Speaker 1: 8:50

I had no clue. I had no clue. I'm definitely gonna have to tap into that and learn more. So I appreciate the breakdown. The first time you and I talked, we shared a passion about financial education overall, but also, in particular, about financial education in the black community. So I wanted to ask you a few questions to, you know, ignite a dialogue about this, because it's something that I hope near to my heart. So can you discuss, in your own opinion, the state of financial literacy in the black community?

Speaker 2: 9:49

I appreciate that that question, because that is something that is dear near to my heart. You know, we as a community, overall, we are very concerned about helping others. Okay, unfortunately, many are not concerned about helping us. So there's a lot of knowledge that bypasses the black community. And because that knowledge bypasses the black community, we don't often make good decisions financial decisions and because we don't make the right decisions, financially, we have a great deal more of debt and we have more problems in the black community than other communities would have. I'll give you a prime example of that.

Speaker 2: 10:45

Right now we have an election that's coming up and most of the politicians, of course, they want our vote, they look for our vote and they will make promises to us in regards to our vote and how that would benefit us if they get elected. The problem with that is is that when they get elected, they forget about us, and the reason being is because there is no economic power behind our vote and because we don't understand that we vote for those who we think will serve our interests the best. But once they get in office, they receive what they want, but then they forget about what we want. But to ensure that we have more power behind it. We have to establish an economic base, and the only way we can do that is to gain more knowledge financially. What does your dollar mean to you? Okay, and unfortunately we don't have anybody coming in our community and that's educating us on a mass scale. Okay, I was just talking to a friend of mine today and I was saying that if you belong to a church and they don't make financial education a part or program in that church, you might want to look at another church, because we got to understand this power in your dollar.

Speaker 2: 12:12

If we don't understand how to make that dollar go to work for us, then we're always going to be behind and we're always going to be in that position of trying to catch up. Now, the way we can help in this is that we have to really put an emphasis on reading. We have to read, we have to get out there and read books that pertain to us and how to make our monies go to work for us. We need to focus in on those things that are going to help us, and one of the things that I think would definitely help us is if we gain a better understanding of our finances and how our finances can work for us instead of against us. I heard on an average of over $1.3 trillion comes out of the black community every year, but when you go into the black community, where's your evidence of this? Where's your proof?

Speaker 1: 13:16

Right the money leaves.

Speaker 2: 13:19

So if there's no proof, as it says in the scripture, you judge a tree by the fruit it bears. If there's no fruit, then what are you talking about? Okay, you do nothing, you have nothing, you own nothing. So many of us are going to school, we're getting to college, educations and everything, college degrees, but when you come out of college, you're looking for a job. You're looking for that job that's going to pay you the good salary and unfortunately, those jobs are few and in between. So everybody's not going to get that good paying job.

Speaker 2: 14:09

Okay, and that's something that we have to accept. And the only thing is is we're not creating the jobs to be able to satisfy that need. You want the school for physical education? Okay, well, the school didn't hire you right away, so you don't work as a phys ed teacher, but you got to get a job, so you ended up taking a job at family dollar. So that's where we come in at and we educate people and we show them how they can manage even with the little bit that they have and make it go a long way. You don't know, because nobody's educating you to that. Okay, and it's unfortunate because we're saying we are now educated and we know, but the proof is in the pudding. You don't know, you don't know, and because you don't know, you don't broke. So come on, let's face the reality, let's accept the truth about things. It's not about hating or disliking somebody. We're just talking real fast. We're talking real fast.

Speaker 1: 15:32

You know, for me and my platform, it's really about financial education, right Like that's my passion. I want to be able to give people options with their money, to help them understand how money works, and how it can work for you.

Speaker 1: 15:46

So what I'm ultimately hoping to provide for people is to give them some foundational knowledge that will help them move forward. You know things like understanding inflation, understanding how interest rates work Like. So in your, in your mind, are there some foundational things that you might teach your clients or people that reach out to you? Definitely the mentor capacity. This is to say, hey, you know, how can I actually do better with money? Are there some foundational things that you actually would say, hey, focus on this first.

Speaker 2: 16:26

One of the things that I asked some of my clients.

Speaker 2: 16:30

First, I try to simplify it as best I can when I ask them if they ever played a game in Monopoly. And a lot of them, you know they, they like the game and they played the game and you know they thought the game was good and then some didn't like it because it was too long or they didn't know all the rules. And one of the things that I educate people to is the rules of the game. And and like I said to them, you know, hey, you are playing this game and sometimes you might play the game with people that don't know any of the rules. You might play the game with people that know some of the rules, but when you play the game with people that know all the rules, how do you know when they're cheating you or not? Okay, and a response always comes back with you don't know exactly. So we educate them in regards to one of the rules of the game, and one of those rules is the rule of 72. Okay, and how compound interest can work for you? Okay, if you learn it, and it could work against you if you don't learn it. So give you a prime example If you have a savings account right now and that savings account is paying you less than 1%, and just for all intents and purposes, let's just say it pays you 1%, okay.

Speaker 2: 18:03

Well, the rule of 72 was discovered by Albert Einstein and he said it like this. He said if you take the number 72 times and divided by the rate of return, equals the number of years it takes for your money to double. So if you got a rate of return of 1% and you took 72 and divided by that 1%, it would equal 72 years. Now, I don't know about you, moses, I don't know about any of your audience. I don't think any of us got 72 years to wait for a dollar to turn into 72 years, okay, okay.

Speaker 2: 18:40

So we got to look for a rate of return that's going to give you the amount that you're looking for. So we could look at a rate of return that's, let's say, 4%. That's going to give you 18 years. That's not good, it's okay, but it's not good. Then we might look at a rate of return that's going to take 72, divided by 8, let's say that's going to give us 9 years. That's a little better, but we want that rate of return that's going to give us the biggest bang for our buck, and that is 72 divided by the rate of return of 12% equals 6 years. So every 6 years your money doubles, and that's what you want you want your money to double.

Speaker 2: 19:31

Go to work for you, building for you, so by the time you're at retirement age you've got enough to retire on and then build something. Build on top of that. So the bigger the rate of return, the less amount of time it takes for your money to double. And that's just one of the basic rules that you learn in getting better financial education.

Speaker 1: 20:03

I appreciate that and you breaking it down. You know, because, again, people hear these rules. They might have heard it in an academic setting and studied it for a test and then, once that class was over, they were applied in their life. But yeah, and that's key, you know. So we want to make these you know financial principles very relatable and because they're not really difficult to understand, you just have to make them fit in your life because you're just so programmed to, especially for someone as a college student. Hey, go to college, you pass. I'm looking to get a job so I can make this money. Get me my own place, get a car, all the things that really set you up, really for a lifetime. You know so if you're not applying, if you're not applying your financial education that you've been exposed to, then you just fall right into the trap. You're not really prospering at all.

Speaker 2: 21:51

Okay. So one of the things that you have to do is you have to start thinking about money in a different way and you have to start talking about money in a different way. All right, if, if, if you're calling around and you've been going around for years and saying I'm broke, I'm broke, I'm broke, guess what you are? You're broke, so you have a broke mindset. And that led me to understand oh, so when you have a mindset of lack, you don't see any possibilities, you don't see any opportunities, you don't see anything, because your mind has been trained to always look at the shortage. I don't have enough. So you have a mindset of scarcity. I can't afford this, I can't afford that, I can't do this, I can't do that. So once you have that mindset, it's hard for you to move forward because you already locked yourself down and too scared to do it. But then, when you are ready to make that transition from scarcity to increase, once you transition into increase, now your mind is open to new possibilities, new opportunities.

Speaker 2: 23:08

Okay, and I often say like this there's a scripture in the Bible where Jesus is feeding the multitude and he has two loaves of bread and five fish. And if he had a mindset of lack, he would have told the disciples this is not enough, this is not going to do it. I need y'all to go get some more, get more food, get this. And with that mindset, no, he would have never been able to feed the multitude, but because he had a mindset of increase. This is valuable because when you see that little is much in a master's hand.

Speaker 2: 23:54

So it doesn't take a whole lot, it just takes what you got. And what are your priorities? Where are your priorities set? See, because at the at the end of the month, when you sit back and you add it all up, you're praying that nothing outside of the norm comes along to disrupt what you got. So if you're, you know you don't pay the bills and everything and you just made it through the month, right there, at the beginning of the next month, the car breaks down, but you don't have any money to do anything about it. Now what?

Speaker 1: 24:40

When you talk about cars. That's a classic example of how people you know that have lacked the financial education they I don't know if you've seen this to where like, if someone has a car repair right, they'll take their car to the shop and the car repair place says something you know that might be high for them. Let's just say it's a thousand dollars repair. That's how repair the vehicle Right.

Speaker 1: 25:08

A lot of times I've seen people say hey, you know what, I'm sick of this car. I'm just going to go to the dealership and get me a new car. And they go to the dealership and they say well, why, you know, spend a thousand dollars to fix this car when I could put thousand dollars down to give me a car right off the line. And it just starts the cycle over and over again because that one car that you just yeah, that one car that you said I'm not going to fix, didn't have a car now. And now you're taking pictures saying you know, oh, I got a new car, but no, I mean you failed to pay a thousand dollars, but now you're paying a $500 car now.

Speaker 1: 25:53

So literally in two months you had the same place and the cars getting you from point A to point B. So really being in a position to maintain a car and making the best financial decision at times to say, hey, I'm just going to go ahead and pay for this car to get fixed and have access to that money to take care of those emergencies is the better financial decision, and I'm speaking from experience. My car has almost 300,000 miles on it and I plan on driving it to the wheels fall off because I've had no car note for over five years. You know it's just something that it saves a lot of money month over month and I'm just a big proponent of no car note.

Speaker 2: 26:39

And whenever possible.

Speaker 2: 26:40

I definitely think it makes sense and I can understand that, and you know that's how most most successful people will think. It's like look, if it's not broke, don't fix it you alone. But what happens with most of us and this is no slant on anyone and I don't want anyone to take it personally but I want you to think, I just want you to think OK, you're, you're, you're praying to God and you're asking God for a means, in a way, to get to work. So you want a new car, you're asking God for a new car. Ok, remember one thing when God gives you a vision, he's already made provisions for that vision. Ok, it's already made provisions for that. However, when you go and you get a car, you know, and you you're quick to come back and say, well, god bless me, god bless me, ok, got you. However, whatever God blesses you with, it does not become a struggle for you. It does not become something that's working against you, it's working for you. Ok, and so what I found is that when God blesses you with something, as I said, he's already made provisions for you. So now, that is not a struggle for you. You're not struggling with that car payment, you're not struggling with that house payment, it's something within your means, you can afford it.

Speaker 2: 28:12

This scripture says count up the cost, count the cost. Ok, so that means you got to sit down and look at where you are, and if you can't afford a six hundred seven hundred eight hundred dollar month car payment, why are you getting that car? Why are you doing that to yourself? But then you know what I'm saying. You want to say God bless you. You didn't bless you to be stupid. He said you know, use what you got. He said my people perish for lack of knowledge. So before you go sign anything, always number one check with God. Number two seek wise counsel. Hello, all right, seek wise counsel. And so in seeking wise counsel, that means you take your time. Because if you can't afford that car no, all right, and you miss one, two or three payments on that car, what's going to happen to that car? They're coming to take it back from you. Ok, so now you got bad credit, you got a repo on your hand, it's OK. And so what's the next step? You're going to file bankruptcy. But all this can be avoided if you took your time and thought out wise counsel.

Speaker 2: 29:42

So a new car might not be what you need. You might need a workable, usable use vehicle. So that means you got to know somebody in that field that could go down. Take a look at the car for you tell you what, hey, this is a good deal, this is good, alternate is good, this is good, that's good, whatever is good on the car, they'll tell you. If they tell you, you know they really got your best interest at heart. And they tell you, no, that's not a good deal.

Speaker 2: 30:14

What we try to do is we try to figure it out on our own. And when we try to figure it out on our own, it's where we go wrong. So we don't look at the overall picture. Yeah, okay, you had that, you had that car. You had that car for a number of years, but it's still doing what you wanted to do. It gets you from point A to point B.

Speaker 2: 30:35

If you're taking care of that car, that car is going to take care of you. You're up on the maintenance. You know what the maintenance schedule is. You clean it, you wash it, you clean the inside of the car. Sometimes you won't even know that that's a used car, See. So there's got to be wisdom in this. Take care of it and it'll take care of you.

Speaker 2: 31:01

Now, that money that you're saving on that car note, that's not money to go and buy new shoes and purrs and take a cruise and nothing like that. That's money that you put to work for you. So then when you get to be 55, you're not looking at well man, what am I going to do for retirement? I ain't got nothing saved up when you got all your retirement saved up from that money that you didn't have to use to pay for that car note. You see, it's easier once you learn, once you understand. It's harder. When you don't put nothing in motion, you don't put anything in play. So if you're not being a good steward over your money, your money is not going to take care of you. So you have to learn. It doesn't take a whole lot to get started, it's very little to get started. But here's the key word. Here's the key word Moses Discipline.

Speaker 2: 32:09

If you're not disciplined in, this I don't care what you know, I don't care what you do. You're not going to succeed at it. You got to be disciplined. And then the next word is consistent. You got to consistently put money to work for you.

Speaker 1: 32:32

I definitely feel like discipline and consistency. You know, and people that are successful in different areas of life, you know, they can attest to that. So I always use the example of someone who's in shape. Right, if someone's in shape, they are disciplined in the gym, disciplined with what they eat, they're consistent with their workout, consistent with their diet and, as a result of that, they you know six pack, you know big muscles, you know better stamina, so that it can be applied in different areas. So the people that can do apply that discipline and consistency in one area and be successful, you have to do the same thing when it comes to your finances.

Speaker 2: 33:22

You have to do the same thing.

Speaker 1: 33:23

You can't just be yeah, you can't, just can't be lackluster with it. You got to go for broke because otherwise you're going to set yourself up for a huge hurdle. And we gave the example of cars, but there's many examples people that you know have a house that they can't afford, you know. And or people that choose to rent, not purchase, a home at some point in their life. So it's a, it's a laundry list of things that obviously we all have you know time for in this episode. But really getting that foundational knowledge is so key and really, when you get money, don't think the first thing you want to do is spend it. You think about multiplying your money, you know, growing your money Real, real quick.

Speaker 2: 34:11

I'm just going to add this in there real quick. In regards to my in-laws, okay, when they bought their house, they had a foundational house that they built on. Okay, and I don't know exactly how much it cost, but it wasn't as much as these houses that you have out here today, the ones that are being built. This house was built some years ago, all right, and when they bought it, I think they only have maybe two or three or three bedrooms in there. Okay, they now have about five no, excuse me, six bedroom, a family room, a living room, eating. I mean, they just built on top of that home to where it's worth more than it ever was when they first got it. The point is is you start where you are and stop trying to live up to what the Joneses are doing. You build where you are and you go from there.

Speaker 1: 35:21

The Joneses really a lot of times don't have it anyway. So you're trying to get to somewhere that you don't want to be at.

Speaker 2: 35:30

Trust me Exactly, the grass is over the green on the other side, till you get there and realize there's crabgrass right.

Speaker 1: 35:37

Very true, very true, what final thoughts or advice that you would like to give to the audience? And also, before you go, go ahead and let us know that how we can actually reach you. If we want to reach out to you, please give your contact information and social media so the audience can tap into you and learn more about insurance.

Speaker 2: 36:02

My final notes on this is everybody's got to start somewhere and, as I said, we all have a genesis, all right, and sometimes our genesis don't always look pretty. They don't always look the way we think that she looked. It's in just getting started and how we are talking to ourselves, to God, to the environment around us, how we are talking. If you're continuously talking down and negative to yourself and then talking to others around you in that same negative voice, you can't expect that plant to grow. You can't expect anything that's good to come out of that. So you have to start changing your thought process. The Bible says all that gaining, gain understanding. And then it also says be not conformed to this world, but be transformed in the renewing of your mind. So you have to change your thought process. And if you're not going to change your thought process, you're not going to read books outside of the classroom, you're not going to study the field that you're in, you're just going to live life on the whim. You're just going to. If it works out for me, great. If it don't, I'll try something else. I'll try something else.

Speaker 2: 37:42

Well, before you know it, hey man, you in your 60s and 70s and it's time to retire and you have nothing in place. So get out of that mindset of lack, step up into the mindset of increase, be ready to invest in yourself, be ready to put your money to work for you, all right, and continuously want to better yourself, every day, every day. So that's what I have to share with you on closing notes. Be blessed and be safe, and you can reach me if you so desire. You can reach me at 757-579-0584. It's my number. You can call me or you can reach me via email cmac6179 at gmailcom. All right, moses, you got it.

Speaker 1: 38:38

Thank you, chris, for jumping on the show with me and sharing your expertise and experience, really appreciate it. We both share a strong passion and desire for financial education in the black community and I just really appreciate you sharing your thoughts on that. So good luck to you and everything that you do, and I look forward to having you back on the show in another time. To my listeners please don't forget to check out mosestementorcom it's a valuable resource and, at the same time, check out my YouTube channel, moses the Mentor, for more episodes just like this. So until next time, stay financially focused in, empowered into your journey. Peace, music.