Protect First, Grow Second: The Inverse Thinking Strategy Behind Kai-Zen Wealth

Jim Barlow (00:00)

Inverse thinking is saying, ⁓ let’s see if I can get the quote. Charlie Munger of Berkshire Hathaway said, tell me where I’m gonna die and I won’t go there. And the message there is, tell me how I could fail, how I could lose money. ⁓ And if I could find out how not to lose,

then I can make sure that doesn’t happen and go the other way.

Quentin Edmonds (02:07)

Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds. I’m excited to be here today. I’m excited about my guest. I have a gentleman, he admitted he retired, living a life, but he said, you know what? This is not enough. And so he wanted to push himself a little bit more and he wanted to push himself because he wanted to help people.

He wanted to make a difference in people lives. So he found something, an incredible opportunity that he’s going to tell you all about. And I’m just so excited to introduce you all to Mr. Jim Barlow. Mr. Jim, how are you today, sir?

Jim Barlow (02:48)

Terrific, good to meet you.

Quentin Edmonds (02:50)

Absolutely. Great to meet you. So glad you’re here. And listen, sir, I want to dive in. I want to get started. I want you to tell the people what your main focus is these days. You want to give us a little bit of an origin story, you know, of how you transition through real estate and how you know where you are today and what you’re doing today, like the origin story there. And if you want to tell us what part of the world you’re in, we would love to know that, too. So your main focus, your origin story and where you are.

Mr. Jim, you have the floor,

Jim Barlow (03:20)

Okay. Thank you. Well, I’m in Clearfield, Utah. ⁓ I grew up in a small town by the name of Clearfield, Utah. Otherwise, I’ve never left. And ⁓ I went into the investment advisory business 40, 45 years ago, ⁓ and ⁓ love business, loved working with clients. And ⁓

It’s a fun business. I sold my business a few years ago. They said it’s retirement time. And but I have found out that I need more and I want to give more. So I explored the insurance world to see if there’s something that we can offer that’s better. And I think I found it. It’s a product by a company out of

Texas by the name of NIW built this insurance platform, I guess that’s the right word, called Kai-Zen. Is that about what you wanted so far?

Quentin Edmonds (04:34)

yes, sir. Yeah. If you want to keep going, you can or we can pause there. But yes, that’s why I wanted. But if you want to keep going and tell us more about Kai-Zen, I would love to hear how you feel about that.

Jim Barlow (04:44)

Yes, sir. Let me mention first, inverse thinking. Have you heard of that?

Quentin Edmonds (04:51)

I know the words, but not to slam together? No. So please enlighten me. Yes, sir.

Jim Barlow (04:57)

Inverse thinking is saying, ⁓ let’s see if I can get the quote.

Charlie Munger of Berkshire Hathaway said, tell me where I’m gonna die and I won’t go there. And the message there is, tell me how I could fail, how I could lose money. ⁓ And if I could find out how not to lose,

then I can make sure that doesn’t happen and go the other way.

So inverse thinking is protecting the downside first. the Kai-Zen does that. ⁓ What Kai-Zen is, is that you’re overfunding a life insurance policy. You’re not making, sometimes if you’re shopping for life insurance, you’re,

And eventual question is, well, how much will this cost me per month? that’s not the question here. We’re trying to overfund a policy and we’re not just putting our own money in. We’re putting leverage money in, bank money in for about three times more than what we’re putting in. The leverage, well, let’s see. ⁓ I wrote down some bullet points.

Five major bullet points is remove downside first, remove risk of things going down. There’s a type of life insurance called index universal life. Some of your guests are hearing and say, yes, I understand that. There’s no downside risk there. You can get market like returns, but on the negative 30 % year, you get zero.

So that’s the first thing you’re protecting the downside. The next is leverage. Some of you have heard of premium finance, premium finance, if you reverse those two words and say, finance premiums, that means you’re buying life insurance using a bank for partially part of the way or all of it sometimes.

but you have to put up collateral. In Kai-Zen, we have built a product where you don’t have to put in collateral. You can get them three times. So if you’re putting 100,000 in, putting on 300, but you’re not on a dotted line to pay that back. If you decide you don’t wanna do it anymore,

then you quit and the bank gets their money back. Or if the assets are not there to get their money back, they’re the losers, not you. You don’t have any risk on the leverage. Third point is… ⁓

death benefit on life insurance is tax free. Always has been since income taxes came out about 100 years ago. And it ⁓ grows tax deferred. And then so you can have something grow with no taxes and then it goes to the beneficiaries tax free. But the little interesting twist is you can borrow.

from the policy, not paying taxes. So if you can borrow and make, let’s say 8 % and your interest rates are five, then you’re going to make 3 % on other people’s money. ⁓ the three major ones, no downside, no leverage commitment, and tax free withdrawals.

Quentin Edmonds (10:37)

Hmm. Man, thank you. Thank you for the bullet points. Thank you for explaining Kai-Zen more of the index university, universal life policy. I appreciate it, man. I want to ask you this, Mr. Jim, why did Kai-Zen make sense to you? Like, what was it about them that attracted you? Why did it make sense to you to join the team?

Jim Barlow (11:01)

Because it’s more secure. ⁓ I’ve made investments in my career that I lost 100%. Not many. and in hindsight, I said, Wow, what was the risk? I didn’t see. Because there obviously was a risk I didn’t see. ⁓ Here we were protecting what are the risks

potential that we’ve covered them all in Kai-Zen. you know, people say for the retirement ⁓ and 2008 comes along and destroys maybe their old retirement or close of it. This can’t happen here. ⁓ They say about 50 % of society really don’t want to be in the stock market because they don’t want the risk. Well, here’s a way to

protect that downside, but get the performance you’d like.

Quentin Edmonds (12:08)

Yeah, I love it. love it. So you sold your investment advisory business, joined Kai-Zen. Was it an easy transition for you? Like, was there any kind of adversity with the transition? Like, how did that process go for you going from business owners selling it to what you’re doing now? How was that transition?

Jim Barlow (12:32)

What I’m doing now is really, you’ve heard the term side hustle. In a sense, this is a side hustle. don’t get up and go to work. We vacation a lot, we travel a lot. So I’m retired, but when I’m not doing that stuff, I’m helping people.

Quentin Edmonds (12:38)

Hehehehe

Jim Barlow (13:01)

have a better retirement or get one of the cool way I didn’t mention it highly, but you could set this up for your, well, be dramatic, you set it up for your 20 year old granddaughter or something. what you’ve done, you bought a life insurance policy for them, your funding. And by the time I turn 65, it will be outrageously.

Amazing. Something I didn’t mention that’s probably pretty important is five payments only, five annual payments. It’s not a payment every year forever. It’s five years. ⁓ It’s an interesting statistic. The average person that buys a whole life or an indexed universal life policy surrenders it

a lot of them over 60 % and about seventh or eighth year. And the reason is, wow, is this really doing anything for me? And even with Kai-Zen, you could say, wow, is this doing anything for me? ⁓ You’re getting life insurance day one, you’re getting disability policy for

anything day one, you’re getting a long term care insurance day one, you’re covering a lot of the bases on the unexpected of life. But at seven and a half years when people are leaving, they say, what’s the benefit? Because it’s only five years of payments, there’s a better chance they’ll stay with it. You’re seeing the insurance costs for the early years. But after

15 years and 20, this thing is growing amazingly, conservatively too.

Quentin Edmonds (15:49)

Yeah, I love him, Mr. Jim. Let me ask you this. Is there any clear cut next goals for you? Like, is there something that you’re trying to solve at scale next?

Jim Barlow (16:00)

⁓ you know, in retirement, you, you probably no one gets a retirement with the perfect health, but you got this or that or whatever. And I’m pretty good health, but you never know the future. So I’d like to be, I’d actually like to set this company up in a bigger way. So more people are joining me with this idea and

helping them make a living too and where I’m probably bowing out because just getting too old.

Quentin Edmonds (16:36)

Yeah, I hear you. And I mean, listen, you start in a whole nother path. So I don’t know if you’re getting too old. It sounds like you’re still trailblazing to me. But I love how you said you want to set this up to help other people. So that brings in this word for me, relationships. So are relationships important to you? Do you put a premium on it? Give me your perspective when it comes to relationship building within what you do.

Jim Barlow (17:06)

I’m not sure I understood what you would explain that a little bit more to me.

Quentin Edmonds (17:11)

Absolutely, absolutely. So you just explained to me how you want to grow this. You want to make this bigger. You want to put opportunities in front of other people for them to be successful. And so to me, that means you want to foster relationships. OK, and so what’s your perspective when it comes to relationship building?

Jim Barlow (17:33)

Associations is where it’s at. I’ve got grandkids and I’ve got son-in-laws and grandson-in-laws and some of them are looking for their, how can I make a living for my family? They’re still exploring and I said, well, when you have time, let me show you this. More friends that I,

associates I’ve known over the years, here’s something you probably could look at that’s not aggressive. I’m probably changing the subject, but this wasn’t available when I was in my 40s and 50s. for those who are in a sweet spot per se, to have with some time to grow it, it can set them up well.

We’re offering a service that, ⁓ and that’s something we, if you have a service you really like, you want to just get on the tower and shout about it. And that’s the relationship part. I’d like to, I’d like to convert people to this approach that is different than buying a mutual fund and hoping it does well. ⁓ cause the protection parts, the inverse thinking.

Quentin Edmonds (18:59)

love it. I love it, Mr. Jim. Well, listen, sir, if someone wanted to reach out to you, connect with you to learn more about Kai-Zen, how can they reach out and connect to you,

Jim Barlow (19:09)

Sure. Obviously you can call me. My number is 801-698-1329. You can ⁓ email me, jim@oaktreeIA. My company is Oak Tree Strategic Leverage, but jim@oaktreeia.com. My website is www.oaktreeia.com.

⁓ And you can attend, there’s a tend of webinars that I have. There’s always, I advertise those a lot on LinkedIn. I do quite a few articles on LinkedIn. So you can also look me up in LinkedIn, read about what I’m thinking at the time.

Quentin Edmonds (19:59)

Beautiful. I love it, Mr. Jim. Listen, let me say three things to you. First, thank you for your time, because time is a precious commodity, so I appreciate your time. Two, thank you for your story, for you explaining what you do, telling us about your background. I think our stories, they just help people navigate so many different parts of their lives. And so I thank you for your story. And definitely thank you for your perspective. Thank you for your mind frame, your mindset, and bringing that mindset to this platform.

I appreciate you being here today, Mr. Jim. Thank you so much.

And beautiful, beautiful. Well, listen, y’all heard Mr. Jim definitely looking to show notes, get connected with him, check out his website, get in contact with him, but definitely make sure you are subscribed here because we’re going to continue to bring up amazing people just like Mr. Jim. So sir, thank you again. It’s everyone else. You’ll have a fantastic day.

Jim Barlow (20:56)

Thank you.