Many founders assume revenue growth eventually creates financial stability.
At first, that belief appears reasonable. Revenue increases. Headcount expands. Demand strengthens. The business gains momentum. From the outside, scale itself begins to look like proof of resilience.
Brandon Neely argues that this is often where financial exposure quietly compounds.
As businesses grow, obligations expand faster than most founders expect. Payroll increases. Vendor relationships become more complex. Tax exposure grows. Debt structures multiply. Operating costs harden. A company may generate more revenue than ever while simultaneously becoming more vulnerable to disruption.
The issue is rarely visible in growth metrics alone.
The issue is liquidity.
This is the central framework behind Neely’s conversation on The Breakout CEO. Most founders spend years optimizing revenue while underestimating how access to capital, cash flow timing, and financial flexibility determine survival when pressure arrives.
That pressure eventually arrives for every business.
The businesses that endure are not always the ones growing fastest. Often, they are the businesses that retain the most optionality when operating conditions tighten.
One of Neely’s strongest observations is that many founders mistake business activity for financial understanding.
“Most business owners don't understand how cashflow works.”
His point is not that founders lack intelligence or discipline. Most operators simply build expertise around product, sales, operations, hiring, or delivery long before they fully understand financial systems.
That imbalance creates predictable blind spots.
As companies scale, founders often:
The business can appear healthy while remaining structurally fragile.
Neely repeatedly returns to the distinction between revenue and accessible capital. Businesses fail from timing pressure more often than they fail from lack of long-term potential. Strong economics do not protect a company if cash becomes inaccessible during periods of operational stress.
That distinction matters because scaling increases the consequences of delayed decisions. The larger the organization becomes, the less room there is for financial rigidity.
A founder may understand their P&L thoroughly while still lacking flexibility when payroll expands, receivables slow, taxes come due, or operating interruptions appear unexpectedly.
“Revenue doesn’t mean you understand cash flow.”
The two are connected. They are not interchangeable.
The episode’s clearest illustration comes from Neely’s experience operating a coffee shop in Chicago.
Six years into the business, the building’s roof was removed during repairs. Heavy rain flooded the space while the business remained exposed operationally. Insurance claims were underway, but immediate working capital was still required before reimbursements could arrive.
Without accessible liquidity, the business likely shuts down.
Instead, Neely had structured access to capital through cash value life insurance that he could borrow against immediately while the claims process unfolded. That access provided enough time and flexibility to stabilize operations and ultimately sell the business rather than close it under distress.
The important point is not the financial product itself.
Neely consistently avoids presenting the conversation as an insurance strategy. The larger issue is capital access during periods where timing matters.
“Access to capital is really, really important.”
Operational disruptions rarely arrive on schedules convenient for lenders, insurance carriers, or investors. Founders who maintain liquidity before they need it preserve the ability to make strategic decisions under pressure instead of reactive ones.
That difference changes outcomes.
The business with temporary access to capital can often survive long enough to restructure, stabilize, or reposition. The business without it may lose control before the underlying economics ever have time to recover.
This is why Neely frames liquidity as a resilience issue rather than an investment discussion.
Optionality matters most when operating conditions become constrained.
Another pattern Neely identifies is the tendency for founders to outsource financial thinking before they fully understand the mechanics themselves.
“Every business owner needs to understand how the banking system works.”
His criticism is not directed at advisors, investing, or financial planning. It is directed at passivity.
Many founders operate inside financial systems they do not fully understand. They rely on conventional assumptions around investing, retirement structures, debt, and banking relationships without fully evaluating how those systems affect operational flexibility.
That becomes especially relevant for founders still building companies.
A CEO planning to scale aggressively over the next decade faces a fundamentally different financial reality than someone optimizing purely for retirement decades later. Liquidity timing matters differently. Access to capital matters differently. The ability to redeploy reserves quickly may matter more than maximizing theoretical long-term returns.
Neely frames this through what he calls understanding the “banking function.” Banks consistently maintain leverage and liquidity advantages because they understand how capital moves under pressure. Founders interact with those systems every day while often remaining dependent on institutions that control access.
That dependency creates vulnerability during contraction.
“We've been taught to invest and never save.”
Neely’s point is not anti-investment. It is about sequencing and control.
Founders who aggressively deploy every available dollar into growth, expansion, or external investments may unintentionally eliminate the very flexibility required when uncertainty appears. Accessible reserves create room to think clearly during disruption.
Without reserves, every setback becomes urgent.
One of the more practical observations in the episode is Neely’s refusal to treat founder finances and business finances as completely separate realities.
Operationally and legally, they should remain distinct. Strategically, they constantly influence each other.
Founders experience this connection directly:
Neely references discovering this while operating the coffee shop with his wife. Despite years in business, they realized they consistently paid themselves last. Revenue existed. Operations continued. But the underlying system remained unstable.
That pattern is common among scaling companies.
Founders normalize financial strain because growth itself appears to justify the pressure. Over time, though, constant liquidity stress affects judgment quality. Leaders become more reactive, more short-term oriented, and less capable of evaluating tradeoffs calmly.
“Your greatest investment is in yourself.”
The statement is operational, not motivational.
Founders remain central assets inside their companies. Their ability to sustain pressure, maintain decision quality, and absorb uncertainty affects the organization’s broader stability. Ignoring founder resilience eventually creates downstream operational consequences.
This is part of why Neely treats liquidity infrastructure as both a business issue and a founder issue.
The systems overlap whether leaders acknowledge it or not.
A recurring theme throughout the conversation is Neely’s emphasis on savings discipline as a strategic capability.
Most founders are conditioned to optimize for deployment. Revenue gets reinvested. Expansion absorbs reserves. Growth opportunities consume available cash. Financial efficiency becomes associated with keeping capital constantly active.
Neely pushes against that instinct.
Accessible savings are not idle if they preserve decision quality during volatility.
The founder with liquidity has more time to evaluate options carefully. The founder without liquidity is forced into shorter timelines, weaker negotiating positions, and more reactive decisions.
This becomes particularly important during:
Businesses rarely fail because leaders lacked ambition. More often, they lose flexibility before the business model fully matures.
Neely encourages founders to think in systems and percentages rather than arbitrary financial milestones. The discipline itself matters more than the initial scale. Small liquidity habits compound into larger strategic resilience over time.
That framework changes how founders think about growth itself.
Growth without liquidity increases exposure. Growth with optionality increases control.
The Framework Is Ultimately About Optionality
It would be easy to reduce this conversation into a narrow debate about insurance structures or financial products.
That misses the larger framework entirely.
Neely’s argument is fundamentally about optionality under pressure.
The flood story illustrates how quickly operating conditions can change and how little time founders often have to respond. Companies that survive disruption are not always the companies with the strongest visible growth metrics. Frequently, they are the companies that preserve enough liquidity and flexibility to maintain strategic control during instability.
That distinction sharpens as businesses scale.
Founders who understand capital access, liquidity timing, savings discipline, and financial mechanics gain more than stability. They gain the ability to make better decisions while competitors become reactive.
That does not eliminate risk.
It changes how exposed the business becomes when risk arrives.
For scaling CEOs, the episode reframes financial strategy away from optimization alone and toward resilience architecture: how quickly capital can be accessed, how financial systems behave under pressure, and whether the business can maintain control when operating conditions tighten.
Those questions matter long before a crisis appears.
Brandon Neely is the founder of Counterflow, where he advises founders and business owners on liquidity strategy, cash flow systems, and capital access frameworks. His perspective is grounded in both founder operating experience and work helping CEOs think more strategically about financial resilience, leverage, and accessible savings systems.
__________
Jeff Holman is a CEO advisor, legal strategist, and founder of Intellectual Strategies. With years of experience guiding leaders through complex business and legal challenges, Jeff equips CEOs to scale with confidence by blending legal expertise with strategic foresight. Connect with him on LinkedIn.
Intellectual Strategies provides innovative legal solutions for CEOs and founders through its fractional legal team model. By offering proactive, integrated legal support at predictable costs, the firm helps leaders protect their businesses, manage risk, and focus on growth with confidence.
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The Breakout CEO podcast brings you inside the pivotal moments of scaling leaders. Each week, host Jeff Holman spotlights breakout stories of scaling CEOs—showing how resilience, insight, and strategy create pivotal inflection points and lasting growth.
Listen and subscribe on your favorite podcast platform:
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Want to be a guest—or know a scaling CEO with a breakout story to share? Apply directly at go.intellectualstrategies.com.
TRANSCRIPT SUMMARY:
00:00 Most Business Owners Don't Understand Cash Flow
00:18 Introduction to Brandon Neely & Counterflow
01:51 The Coffee Shop That Started It All
04:15 The Flood That Nearly Ended the Business
05:51 Discovering Infinite Banking & Emergency Capital
09:44 Why Every Business Owner Needs Life Insurance
12:45 Understanding Infinite Banking Explained
15:22 Who Benefits from This Strategy?
18:14 Real Estate, Arbitrage & Policy Loans
22:04 Using Policy Loans to Fund Business Growth
29:30 Capturing Cash Flow Before Taxes
33:03 Building Your Own Bank & Finding Your Flow
36:26 How to Connect with Brandon Neely
37:34 Final Thoughts & Outro
FULL TRANSCRIPT:
Brandon Neely (00:00)
Most business owners don't understand how cash flow works. If I can get it for lower rates and I can use that money to arbitrage we've been taught to invest and never save. Every business owner needs to understand how the banking system works. If I could capture the money that's going to Uncle Sam well
Jeff Holman (00:18)
Welcome back, everybody, to the Breakout CEO podcast. I'm your host, Jeff Holman. Super excited to be here with you again today. Just love talking to people, CEOs, advisors, and just people in the ecosystem about building and scaling businesses. So ⁓ I'm excited today to bring you Brandon Neely. Brandon, welcome to the show.
Brandon Neely (00:38)
Hey, thanks Jeff for having me. I'm excited to talk to you.
Jeff Holman (00:41)
Yeah, for sure, for sure. So Brandon's with us from Cincinnati. ⁓ I guess it's rainy there today, he said, although ⁓ you know, ⁓ we could why don't you send some rain our way? Utah needs a lot more moisture for this time of year. So
Brandon Neely (00:54)
I I'm not like a fan of it because ⁓ my son is doing ⁓ while I'm at my home office is he is gonna be doing some baseball, but apparently not today.
Jeff Holman (01:05)
another day, another day. Well well, Brandon, thanks for joining us. We you know, as you know, we talk to a lot of CEOs about scaling their businesses, about navigating pivotal moments, decision making perspectives that they've gained and used. And and we just share that with our audience so that so that CEOs can, you know, have access to maybe some broader perspectives or maybe even just understand that they're not alone in their businesses. Cause I know a lot of a lot of businesses feel like, man, I'm I'm the only one struggling with
this problem right now or maybe ever, right? When that's when that's absolutely not true. ⁓ you're with a company, you're with Counterflow. This is your company, and you guys do some financial things with with founders. ⁓ tell us just a little bit of background about Counterflow and ⁓ and your expertise.
Brandon Neely (01:51)
Yeah. So I'm not just in the financial world where I became a financial planner, financial professional because I wanted to make money. I got into it because I saw a need. and going into my way back machine, ⁓ my first business was called Overflow. kind of fun that counterflow and overflow. ⁓ so Overflow was a coffee shop. We wanted to change the world, make a difference.
in the world. And so we thought ethical economics and community building was the way to go. And so we we were very naive entrepreneurs, got into it and realized, man, we didn't have a rich relative to get going. We had a lot of credit card debt and ⁓ I don't know, a bunch of luck. And and just kind of bootstrapped everything. Right. And so we did a lot of what you shouldn't do. ⁓ we we did read Dave Ramsey and Susie Orman's books.
And said, okay, let's do that. However, if we listened to Dave, we would never have started a business in the first place, probably. ⁓ and so we got into it, started down down this venture, and we met this guy, Mark Willis, who is a a friend of ours, ⁓ and learned about this idea of infinite banking, which is kind of weird. ⁓ but I implemented that strategy.
And use this strategy for an emergency fund because we were last to get paid. We didn't read profit first yet. ⁓ we were and most business owners either they pay themselves too much or they don't pay themselves at all. One of the two. So we wanted to figure out how to make sure that we were paying ourselves, taking care of us, because you can't overflow if you don't take care of you, right? That's that's a huge, huge thing, which we learned the hard way. And so
⁓ crazy story we were saving into these ⁓ policies life insurance of all things and as a liquid emergency fund well raining like today ⁓ we it was ⁓ we were in chicago doing our thing took a day off and ⁓ and my staff calls me and says ⁓ you need to come in at this store is is falling apart and i was like what do you mean the store is falling apart
And and so the coffee shop. Well the roof was off and it rained. Right. The roof was off for repairs. I didn't own the building, ⁓ we were tenants. And ⁓ here's here's a some
Jeff Holman (04:15)
This is the coffee shop.
What do mean the roof was off? Someone had like physically the the landlord or someone had come in and and and torn the roof off and left it open?
Brandon Neely (04:36)
Yes, for repairs. They were working for repairs, doing some repair work. So there was no roof. Just maybe a tarp or something. I don't know what was on upstairs. But ⁓
Jeff Holman (04:47)
So when it started to rain, you guys became you guys literally embodied the name of your business, Overflow.
Brandon Neely (04:54)
Yes, a hundred percent. And we're like, ⁓ crap. Everything. We're crying. We're and then on that day, it did not know this at the time, but ⁓ we found out later that my wife was pregnant. ⁓ and we're like, ⁓ great. Now she's pregnant. We have a store that that well we didn't have any revenue for coming in for
Jeff Holman (05:17)
Was there damage I mean, was there was there extensive damage? This was like flooding flooding, or was this Yes, yeah.
Brandon Neely (05:21)
It was like Hurricane Katrina, except in my coffee shop. and so the the great thing was is I had my access to my life insurance cash value that I could use immediately to as a line of credit to overcome the flood, right? While the insurance claim was was happening. And because of having that access to capital, I was able to sell the business and not close the business.
Jeff Holman (05:51)
So you and your wife, you're you know, you're talking about your your team or whatever, but you and your wife were the coffee shop owners. You ⁓ you had at some point ⁓ probably gotten into this like a lot of other people, right? Like we we start a business, we see an opportunity, we get excited about it, we have enough money to get started, maybe not always enough money to, you know, do ever do all the marketing it takes or do all of the the operations that take after we get started. ⁓ you you hire a team, you're going, how long have you been open by the time?
That this happened with the with the flooding.
Brandon Neely (06:23)
It
was ⁓ six years in.
Jeff Holman (06:25)
six years old. You've been operating quite a while. Got a team going, Your your lease is you know, you're you're established in your lease, but for some reason the landlord says we're gonna Yeah they're on this building.
Brandon Neely (06:37)
Yes, and and eventually they we did not have a long term lease. We had a year to year lease after a while. Okay. And so we knew the writing on the wall and we knew we were pregnant. And we had also had read profit first and said, Hey, we're not paying ourselves fairly. We we're last to get paid, not first. And we need to make sure that the numbers ⁓ line up to where I'm not saying you pay yourself a ton, but make sure you're a livable wage, right? And so
Jeff Holman (07:07)
Well and that's what I wanted to get at 'cause you've because you you know, you're running this business, but you mentioned you mentioned something about, you know, setting up life insurance policies and and, you know, reading some Dave Ramsey ⁓ Ramsey, Susie Orman, some Profit First and so so you'd been learning this type of money management stuff along the way, I assume. Is that right?
Brandon Neely (07:28)
Yeah, understanding how cash flow works. I've learned that most business owners don't understand how cash flow works, ⁓ because they're operating on a different manual.
Jeff Holman (07:38)
And they probably learn it a a lot of times the same way that it sounds like maybe you were learning it as you go. You're like, wait a second, stuff didn't add up this month, or where'd the money go? Or why do we have you know, why didn't we save it for taxes or whatever those things are? You're learning this as you go. So you're reading the books and doing this. ⁓ well, what was the point at which at which you like how does this whole life insurance thing play into it? Because a lot of business owners probably, and I don't know, I could be wrong, would
would say to themselves, hey, we gotta put cash in the bank or we gotta we gotta pay ourselves. I don't know if I don't know how many of them. In fact, I had a conversation with a a friend of mine. He ran a small business, sold you know, graduation supplies and rings and photo packages and stuff, and has done very very well for himself himself as a small local business owner. ⁓ and I and I asked him, hey, you know, you're doing well, you're you're making enough money if you have disposable income, you know
W when do you s when do you start putting that into other vehicles? And I think I might have I can't remember if I asked him directly if I s when he puts it into life insurance. He's like, Well, when you got everything else covered, then put it into insurance. But so I just don't know if every business owner thinks to himself, hey, insurance is where i is maybe my go to right now if funds are tight. How did you come into the how d how did you come up with the the format or the you know the strategy to say, let's put some away here?
Because it clearly it sounds like that was ⁓ what came out in the end to allow you to continue to operate your business. Yeah. Cause 'cause there's that gap, that's that window, right? When a tragedy like this happens, there's flooding, the the space is not occupiable or needs to be fixed so that it can be so that you can actually work in it and and insurance takes a while. Somebody's gotta come up with a little bit of cash in the meantime to get those things done before insurance approves it and
covers the cost so so you get that operating cash flow gap that you were able to span or bridge because you had this insurance. Yeah. Was it f just fortunate that you had done this or or what was the what was the thought process about this?
Brandon Neely (09:44)
Exactly. ⁓
So
I would say ⁓ every business owner, if you're a business owner or any any well, even banks, they ⁓ protect their vice presidents, right? So they all have life insurance on them. Right. So that's tier one capital that banks use. Right. So what I thought about was if something happens to either one of us, we need to be sure that we're protected. Your greatest investment is in yourself and your biggest risk is yourself, right?
And so, ⁓ for business owners, having a life insurance, just life insurance, not properly designed life insurance that has the cash value, but having protection in case something happens is really, really, really important. Yeah. I I'm dealing with that with a friend right now that that tragically lost his life four days ago. Right. So at the very least, we have to cover that in case something happens. That's what insurance is for. Yeah.
And you are the biggest investment in your business. If you're the founder even, right? Or the team. So you might have certain team members that are ⁓ really valuable to you and if they were gone, you might have a key man policy or something like that. So what what I what I wanna make sure is have you ever ⁓ bought a house and then used the equity in your house to buy something? Yep. All the time. ⁓
Jeff Holman (11:17)
Right.
Brandon Neely (11:20)
So here's the difference. What's the difference between a house and a life insurance policy?
Jeff Holman (11:27)
I don't know, sounds like a joke maybe, but what's the difference? What what is the difference?
Brandon Neely (11:34)
You're the house. You're the house. You will eventually go to heaven or, you know, graduate, right? At some point. So what if I could get a house, make sure it's it's set, and I can borrow and leverage that asset, home equity line of credit, at a lower interest rate than even equity in the house is right now. Could I control that and would that be better? Right. Okay. And so
What I've learned in in all of this and and everything, the banks will give you I I don't know how many emails you get, but I get a lot of emails saying, I'll give you a line of credit for this rate or whatever, all the time right now. Okay. so understanding how cash flow works and being able to say, Okay, if I can get it for lower rates and I can use that money to arbitrage to make more money, isn't that a better
way to go. Right. And so that's the power of of using these kind of principles. It's just saving and then using it to leverage arbitrage in right things.
Jeff Holman (12:45)
No, I I guess I wanna hear I wanna hear more about the details of how that works because I don't know of maybe this is more common than I'm aware. I don't know of many business owners who have told me, you know, when I work with my clients and they're like, hey Jeff, we ran into cash crunch, so I tapped into the equity of my of my insurance policy or something like that. is is this a more common thing than I'm aware of? Do do a lot of people do this?
Brandon Neely (13:08)
So I think, and this is where counterflow came around, is I believe the financial system is like an abusive relationship and we're told, don't worry about it, just put in Wall Street and it'll be fine. And we're just conditioned to think everything should go through the market. So we never think about small business, we never think about ⁓ w we want a dividend from our stocks, but we don't do dividends for our own businesses.
Right. And so I think it's it's a resurgence in the infinite banking concept is happening a lot because people are starting to say, Hey, all the systems that we thought was gonna work, the four one K system are not. Yeah. And and we need to think through strategically how cash flow works. Every business owner needs to understand how the banking system works because we're all in it. We just don't even know it. ⁓
And so understanding how that works and having access to capital on our terms, not waiting until we're sixty to finally say, ⁓ I can finally retire because now now the money's unlocked. Right. And so there's a lot of ⁓ complexity in the financial world. And I think ⁓ it's built on purpose. You know, Donald Miller says if you confuse you lose. And I think that there's a reason
That p that taxes are so confusing.
Jeff Holman (14:39)
So is this is this type of ⁓ you know, as I'm thinking about it, I'm thinking this is probably more applicable to people who are in the earlier stages of their of their business. I don't know what the costs are to set up the policy or fund the policy or you know what the borrowing limits or repayment terms are on the policies, but I would guess this is more similar to somebody who is, you know, somebody early stage in their business.
They're tapping into the equity, maybe they're tapping into some friends and family, you know, ⁓ small funding to get going, or maybe they're tapping into something about their four one K. Is is this is this on that same level as those types of things?
Brandon Neely (15:22)
think it depends on the client, right? And so I believe one of the biggest like buyers of there was a whole big giant purchase of a lot of life insurance. ⁓ it was around the time that ⁓ t ⁓ it was Tesla and t and Twitter were ⁓ bought, right? Okay. So it was a very, very big policy. We don't know who bought it, but I'm pretty sure
⁓ he's he's been around the block a few times.
Jeff Holman (15:55)
Tesla and X, is that what you're saying? You're saying that there's some public public announcement or s public reporting at one of these companies that a really large pol how how do we know that
Brandon Neely (15:57)
Yeah, something along those lines.
I just know
that some policies were purchased and I know politicians who use these kind of things and and so it just depends, right? Okay. The the idea with the rich is buy, borrow, die. Buy an asset, borrow against the asset, leverage the asset to buy another asset.
Jeff Holman (16:25)
I think there's a whole ⁓ whole fine art scheme around that, if I'm not mistaken, right? Yes.
Brandon Neely (16:31)
So again, don't do what the banks tell you to do, do what the banks do. How are the banks making money and leveraging? They're using other people's assets to to make it. We have to understand the banking function. And I would say everybody, if you have money just sitting in a bank account, main making two percent, using the profit first system, you happen to just put it through maybe a life insurance policy.
And I can leverage that and have it growing at the same time, right? And so that and there's no death benefit on your savings, or you get taxed as you have it grow at not very much interest rate. So it's a matter of being creative and thinking creative with our finances. There's so many tools and so many ways, but a lot of times we didn't we didn't get into our business.
to be a financial professional, we got in our business to sell the widget, right? Right. ⁓ same with yours. They they didn't get in to do turkey stuff. ⁓
Jeff Holman (17:36)
I started as a technician before I learned the business for sure. Yeah. So so tell me who like let's walk through a scenario. ⁓ give me the profile of somebody that you've worked with who has who who's benefited from this type of infinite banking arrangement. And then let's kind of walk through what what it looks like for somebody to set it up. ⁓ what are the ongoing costs or obligations? And and is there a time where you've seen somebody else in addition to your own story?
pull some of that out and h how how much was it? How do they use it? What yeah like I'm I'm really curious how that's all worked for people.
Brandon Neely (18:14)
So ⁓ you can make one as small as like when I when I say that when's the best time to start? It's right now, right? So start a kid, maybe they're doing saving a percentage of their income. I always say save, not invest, twenty percent of your income in things that you have access to. Saving and then you can leverage that to buy more assets. So whether it's four hundred dollars or a hundred thousand dollars a year or more into a
Policy. So I've I've had clients that have put in $200,000 per year into a policy, put it in, immediately take a loan to buy real estate. Right. ⁓ I've done that where I did a bridge loan where I did one loan for me ⁓ with the the mortgage, half half for the mortgage, and then half was my policy. And then I am both the landlord and the tenant.
Jeff Holman (19:13)
So so why do that as opposed to say just, you know, 'cause I've bought a I've bought a couple of buildings. Why why put it into the life insurance policy first ⁓ and borrow against it as opposed to putting it directly into the building itself?
Brandon Neely (19:26)
Well, the amount of death benefits gonna be way outperforming that. Taxes, long range taxes, and then compounding, 'cause the policy, if it's designed appropriately, it's a non direct recognition company that it will continue to even as you're borrowing from it, it will grow as if you never touched it.
Jeff Holman (19:47)
So so there are there there might be some benefits to ⁓ for my taxes today, my income taxes today if I put it into life insurance. As it grows, as that as that building appreciates over time, as it's paid down, then there's maybe better fewer tax liabilities when it when it's a part of the policy than if it's just my own capital gains.
Brandon Neely (20:12)
Well and think about this. How much is your ta how much can you put into a Roth?
Jeff Holman (20:18)
I I don't know the answer to that.
Brandon Neely (20:20)
six thousand to seven thousand dollars, right, per year, if it about, right? ⁓ the reason that Uncle Sam wants you to pay taxes now or later, so it's gonna be more expensive. We don't know what the tax rates are. So if I can mitigate my taxes, make a policy where I can pay my taxes now, they call this a rich man's Roth, then I can leverage that, paid the taxes
and ⁓ be able to create more wealth. Right. Okay. So it's a it's a rich man's Roth is is another term for it. Right. And so it's just a matter of understanding the cash flow mechanics. That's why I do a full analysis with my clients, because a lot of times they don't know and there's little tricks or things that you can do to mitigate taxes, both long range and short range.
Jeff Holman (21:17)
Okay. And so and so if I'm if I'm a CEO of a business, you know, I'm I'm at a million dollars a year or two million dollars a year, I'm trying to get I'm trying to double that in the business. I in addition to this aspect of, you know, maybe looking at owning my own real estate wherever my business is located, assuming that it's, you know, affordable within the range that I can buy. ⁓ how how else can this be used to help fund growth in the business, whether I'm
You know, can be used to add teammates to the business? Can it used be used for I guess you used it in your coffee shop for cash flow or or just ⁓ operational purposes ⁓ during during a cash crunch? Are there limitations on how this can be used? Or what are the what are the requirements for that? Yeah.
Brandon Neely (22:04)
You
have to qualify, right? So it is life insurance, right? And so there's there's that. ⁓ it's about cash flow. So I'm doing a full cash flow analysis. And if they're like, ⁓ put in a hundred and fifty thousand, I'm like, Well, you only make a hundred and fifty thousand, that's not gonna work, right.
Jeff Holman (22:21)
Sure, you're saying on the on the funding side of it, right? Yeah, funding. But after it's been funded, you know, assuming that somebody is funding it the you know, a reasonable amount given their circumstances, what what are the what are the ways that you've seen ⁓ use use the after it's already funded? Yeah.
Brandon Neely (22:34)
The funny.
⁓ that's the fun part, right? And so it's called arbitrage, right? And so this is for example for for me and a lot of other ones. ⁓ some of my clients love real estate and they love to fix things. ⁓ as I told you before, I had a flood. Well, I've already had about three or four floods and I've only owned two personal real estate deals. ⁓ and I've had
Jeff Holman (23:05)
You've got good luck with these things.
Brandon Neely (23:06)
Yes. So I'm like, I am not gonna own any more real estate because a flood will happen to me. ⁓ and so I've used the policy for what I call node investing, investing in other people doing real estate, and I'm a first lean position, so I'll use my cash value and I'll make twelve to thirteen percent.
Jeff Holman (23:28)
So you put money into the into the into the insurance policy, then you borrow against it, then you take that money that you borrowed out of the policy, you do hard money lending or something for for for home flips or whatever.
Brandon Neely (23:41)
The bigger thing that I tell people is you gotta know who you are and what you know, right? So you could I've talked to some clients and they're like, well, I really am really good at stock trading. If they understand it and and it's less of a risk, but it's still a risk. Running a business is a risk, right? But if they understand how their business works, I might use a policy loan for a team member.
to to then have that runway to be able to turn that fifty thousand into a hundred and fifty thousand because I have staff now.
Jeff Holman (24:20)
Okay, so you could so you can actually use it in the business. This is this is what I'm curious about because as you're describing it, I'm I'm thinking, okay, it sounds like maybe a self directed IRA or something like that. But with but with retirement accounts, you have restrictions like prohibited transactions or prohibited
Brandon Neely (24:36)
No prohibit no pro prohibitive treatment.
Jeff Holman (24:39)
No prohibitions about 'cause with the self directed AR IRA, I I couldn't take that out, loan my my own business the money and pay myself out of that because I'm a prohibited party or I I think re you know, misremembering the phrase, but but and so and so there's this thing with, you know, your own immediate family and I think maybe parents and children and
⁓ you know, lineal descendants and ascendants or something like that. The are all prohibited parties. So you can't do transactions with prohibited parties.
Brandon Neely (25:10)
I mean, I was both the landlord and the tenant. ⁓ you couldn't do that with self directed IRAs, right? Yeah. ⁓ but I could personally, and then I can control the interest rate. Or I could say on the policy, there is still a policy loan and it's simple interest that's that's ⁓ on the policy loan. So I'm borrowing from the insurance company. But let's say I get a cash crunch. I can I can decide not to pay my loan back.
Or wait for a while because we went through COVID, right? those kind of things. And and I think that that's really what's important and why counterflow why I call it counterflow is we need a different flow. We need to understand that the flow of money is going to the rich guys, uber rich, and oftentimes the banks even, they're winning whether we have a recession or not, right? They're they're winning tons. Yeah.
How do we take back that control?
Jeff Holman (26:12)
Okay. I guess I guess for me, I haven't used this, so I'm I'm ignorant in this in this aspect, but maybe so are many other ⁓ people who are starting and founding businesses and worried about how to operate their business more than the financial strategies around how to fund and ⁓ and run their business. So this is this is helpful for me personally and probably for some of our some of our audience members too. I I guess what where where I'm kind of taking this is this is this is like
You know, I ask myself, why do I why do I buy a house? And some people have said, I'm not buying a house. That's not part of my financial strategy, right? I just rent and I put the money somewhere else. But but when you buy a house, if your if your plan is to buy a house, let it appreciate while you ⁓ borrow against it to start businesses that that hopefully are successful, right? And of course n none of this works very well if if the investments you make lose money. That's a different outcome. But but if you
If you're borrowing a if you buy a house, let it appreciate while you use some of the equity to also do other transactions in the meantime, then you kind of have the the ⁓ I guess these layers of financial performance. And that's what this sounds like to me. It's like, okay, you could take the money directly, put it into the building, but instead you're gonna put it into this this insurance vehicle and then use the money while the insurance vehicle builds its own ⁓
inherent value. Yeah, you're gonna use that and and, you know, perhaps fund your other fund your other businesses in the meantime. ⁓ and then of course repay that. I I'm sure it has to be repaid or there are quite significant, you know, valuation ⁓ effects that you got to deal with. But okay. So that that that's the best corollary for me. Is is that a good corollary or is there a better way to think about it?
Brandon Neely (28:04)
Yeah, I think it's it's just your understanding how savings works. We've been taught to invest and never save. and to be smart with our money, right? Think strategically because every one of us is in the money game. Right. And so I've I've learned that a lot of business owners just look at that top line number, revenue. And they they don't realize, but I'm spending twenty two percent in
⁓ credit card fees to to make thirty two or th whatever. I don't know. It's it the math usually doesn't work sometimes.
Jeff Holman (28:41)
Yeah,
I've I've seen I've seen e commerce companies out there that are spending more spending more to gain a client than they make off of the client, right? At least on the initial purchase. Sometimes there's that repeat purchase with a the lifetime value where you where you make it up in the long run. And sometimes there's not, right? Sometimes it's just we're trying to we're trying to gain users or eyeballs or consumers so that we can build our our community, we'll call it, more than our profitability. And that's a
Brandon Neely (29:07)
And that's why I do profit first and thinking strategically. And then with the profit first system, ⁓ our biggest expense is probably credit card fees and taxes. Yeah. ⁓ and so if I could capture the money that's going to Uncle Sam, create a asset out of it before it goes to him, wouldn't that be a cool idea?
Jeff Holman (29:30)
Me again, borrow from yourself if you if you've got the funds to borrow from yourself. Well, that seems what's the key? ⁓ 'cause that does seem like the key here, right? Is is you gotta have the and and maybe this is the the catch twenty two that we always think of when we think of trying to build wealth. It's it's easier to build wealth when you already have wealth, or so it seems. What what are the keys to somebody looking at this ⁓ you know.
not having any of this in place, they're they're in the middle of build the building phase in their career or their business, and you say, Hey, let's get you in a position where you can start to, you know, as you said earlier, start today to to build up some of these strategies. What what do you see as the one or two steps that somebody needs to do? In addition to just saying start today, that I mean that's easier said than done. What what are the one or two things that
What comes next after you say start today?
Brandon Neely (30:28)
Couple things I think about is everyone has a plan for your money. ⁓ my eight year old has a plan for my money. ⁓ watching commercials and most people are spending money that they don't have. Yeah. Right? Because and the banks love it. Right. So understanding to live within our means. Savings, and this is what I always tell people, savings is different than investing. Save into things. If you're a business owner, why
Why, if you want to start a business, why are you putting all this money up to the match in a 401k or or above the match? And you're like, but I want to quit my job in five years and I'm 35, right? To start a business. I'm like, well, now you just locked it in jail for a while. So understanding that we need to be saving and if I can save in things I can control and access first and then do the market.
But build your financial foundation first. And I don't say a dollar amount, I say a percentage, right? And you do that 10, 10, 10 savings personally. And then you do profit first using those percentages in profit first. I just happen to have bigger policies. When I started, it was five thousand a year, right? That's what we could do. Yeah. And now I have a policy that we put in a hundred thousand per year, way bigger zeros.
And and some people are even bigger than us. I mean, I I they're like five thousand is what I spend on dinner, right? But it's it just depends on on perspective here, but save a portion of your income and then you redeploy it. Right. And so that those are the things I I think are super important. And don't just say I have a I have a guy that's gonna take care of it. I have a financial advisor.
Who doesn't understand how business works, right? That's oftentimes we're asking for advice from people who don't actually know anything about cash flow or business or any of that stuff.
Jeff Holman (32:36)
Yeah. Well, this has been fascinating. It's a it's a it's an interesting topic. The one that I think ⁓ for the people ⁓ in the situations where this is applicable, this will probably really resonate with them. ⁓ and and then for the rest of us where we're not sure if it resonates yet, it'll it opens our eyes and then maybe down the road we'll say, now I get it. That's what Brandon was saying I should have done five years ago. I should have started that earlier.
Brandon Neely (33:03)
Well, and I think that's where everyone, in my opinion, ⁓ if they are wanting to think about their legacy or future, ⁓ understanding how to create their own bank is that it's only makes sense, right? This is why the banks are the most profitable business in the world. How about we take a note from them? ⁓ not a literal note. I mean that that is what w that is what they give us. I didn't even mean to say that, but Yeah. ⁓ so
That's the interesting thing. And and we're again on the banking world. And then I think really with counterflow, there's flow types, different flow types that we've created. We've created financial archetypes, but it's understanding who you are first, build a system that will work for you to grow your business or your wealth.
Jeff Holman (33:58)
Yeah. And as you're s as you're saying that, the other thing I'm I'm thinking of is that this really when you are a small business, when you're starting out, when you're a founder, when you're, you know, growing the early stage of your business, a lot of times we don't want to commingle funds, but financial strategies ⁓ for your, you know, for you individually, for your family, for your for your growing, you know, fledgling business all kind of commingle together, even if the funds themselves are not commingled.
The strategies certainly overlap and so there's
Brandon Neely (34:30)
The stress is stress, yeah. ⁓
Jeff Holman (34:34)
I haven't figured out how to separate the stress out from ⁓ you know, from family ⁓ versus work sometimes. But yeah. So so while I think while I guess why I'm saying that is while sometimes it might be like, insurance, that's really ⁓ that's really my personal or my family thing, not a work thing, what I'm hearing is there's really there's really an aspect to it where you can turn it into your bank. Not just your personal bank, but your your, you know, business bank and
How many of us ⁓ how many of us wouldn't do a little bit better if we had a at least something out there f as a standing line of credit with easy access to in case ⁓ heaven forbid or there are that our coffee shop floods one day, right? So
Brandon Neely (35:17)
Well we've created flow like our our money map of our business and personal and so I can tell you where things are rolling. ⁓ and it's on a like a what are those called Nant charts or not a Nant chart. one of those other charts that that is mind a mind map. Yeah. So we've done that. And then the other thing of why life insurance, again, the business partner, ⁓ that
Jeff Holman (35:30)
Gantt chart?
mind map, okay.
Brandon Neely (35:44)
H his business he didn't have a key man policy for his business partner.
Jeff Holman (35:49)
This is talking about your friend that passed recently. Yeah.
Brandon Neely (35:52)
Yeah. So thinking about all of those areas of of what if and how can we use that? And some people are like, Well, that's an expense. I'm like, Yes, that's we have it for just in case. That's why we have life insurance, that's why I have health insurance. But is there ways that we can maximize and use it efficiently, not just by a ⁓ cancer policy that we're never gonna use? I don't know. There's a lot of mis
Jeff Holman (36:19)
Yeah.
Brandon Neely (36:21)
People buying crap that doesn't help, but cash flow is really important.
Jeff Holman (36:26)
For sure. Well, Brandon, this has been really interesting for me and hopefully for our audience too. if somebody wanted to dig into this more, hear more about how ⁓ these policies work or, you know, examples of of what you've seen happen, ⁓ either personally or or in their businesses, what would be the best way for them to get a hold of you?
Brandon Neely (36:46)
Yeah, if you go to livecounterflow dot com, if you go there, there's a find your flow quiz that's there. And then counterflow cornerstones dot com is our life insurance and annuity division. ⁓ but live counterflow helps you find your flow type. And then you can find my wife. She writes on Substack all the time. ⁓ if you if you're a big write if you like to read, she's really good at that. so if you find
Live counterflow at Substack. So live counterflow, live counterflow cornerstones. Look up counterflow. You should find me.
Jeff Holman (37:22)
Love
Awesome. Well, Brandon, thank you so much for taking some time to share this with ⁓ with me and with our audience.
Brandon Neely (37:31)
Thanks, Jeff. I appreciate it. It's it was fun to talk here.
Jeff Holman (37:34)
Yeah, it's been good. And for those of you in the audience who listened today to this episode, thanks for joining us again on the Breakout CEO podcast. Be sure to follow or subscribe on your favorite podcast platform. And if you enjoy the show, a rating or a review goes a long way. Our mission is to promote the stories of breakout CEOs in scaling SaaS, e-commerce, and tech companies to equip peer CEOs with valuable perspectives and confidence.
Thanks again for joining us on this episode of the Breakout CEO. I'm Jeff Holman, and I'll see you next time.
Brandon Neely (38:11)
Okay.
