Simplifying Insurance: Smarter, Tax-Efficient Strategies for Business Owners with Adam Niman

0:01John Lee Dumas:Boom, shake the room, Fire Nation, JLD here and welcome to Entrepreneurs on Fire brought to you by High Level, the all-in-one sales and marketing platform. Today we'll be breaking down simplifying insurance smarter, tax efficient strategies for business owners. And to drop these value bonds, I brought to Adam Niman and EU Fire Studios. Adam is a Toronto-based insurance advisor and co-founder of Kibono. He focuses on exposing how industry incentives, not better products, drive most financial decisions, helping business owners strip away complexity and build simpler, more transparent insurance and benefit strategies that actually work in their favor.

0:36John Lee Dumas:And today we talk about the hidden cost, simplifying insurance, turning expenses into strategy, insurance as a growth tool, and oh, so much more. And a big thank you for sponsoring today's episode goes to Adam and our sponsors. Sleep impacts everything. Your energy, focus, and performance. FitNexus Somnipods 3 are ultra-comfortable sleep airbags that block distractions, track your sleep, and deliver personalized insights to help you rest and recover. If better sleep is a priority for you, visit fitnexa.com and use code EOFire10 to save $10 on Somnipods 3 today. Stop duct-taping your business together.

1:12John Lee Dumas:HighLevel runs your website, your funnels, email, automation, scheduling, payments, and memberships all in one place. And when you sign up at highlevelfire.com, you get a 30-day free trial, plus my exclusive bonus stack that includes weekly office hours with me and much more. Visit highlevelfire.com. Highlevelfire.com. Adam, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Hey, Fire Nation, thanks for having me. Just because you become successful doesn't mean you necessarily feel successful. That's what I've experienced.

1:49You know, that saying, kind of wherever you go, there you'll be. As an entrepreneur, you kind of create these goalposts and you hit them, but then you move the goalpost. That's my advice. You'll always feel the same way unless you kind of change your thinking, which is much easier said than done. It's not to say it's not a good thing to be successful, but the idea that it will significantly change you. I don't know if that's true.

2:11John Lee Dumas:Fire Nation, today we're talking about simplifying insurance, smarter tax-efficient strategies for business owners, and that's many of you. So I want to start by talking about hidden costs, Adam, because you say that most business owners are significantly overpaying for insurance, and they don't even realize it. So why? Why is that happening? I think they're significantly overpaying just because the products that they're being presented are being, I believe, misrepresented to serve the interests and the needs of the financial services industry. Now, I don't think they're doing this intentionally.

2:45You know, it's not like your advisor or whoever you're dealing with is sitting across from you and thinking to themselves, how do I generate as much revenue as I possibly can, independent of what this means for this relationship or this person long term? The highway to hell is paved with good intentions. They get their training from their superiors. but at the end of the day, people are overpaying because they're being sold products that are incentivized. And I think there's a big, the biggest issue that I see is that the incentive structure behind what you're being sold is not generally disclosed, which is very common in the investment space.

3:27You know, it's very common to sit down with someone and ask about what their fees are. And I would thank, you know, companies like Robinhood, Wealthsimple, Questrade for bringing that to top of mind. But in the life insurance or insurance space in general, the compensation doesn't factor in. And as a result, people end up overpaying because they think that the incentives of who they're dealing with are aligned with theirs. And, you know, that couldn't be further from the truth.

3:50John Lee Dumas:Great start to what's going to be a great episode, Fire Nation, because again, we're going to uncover some truths about what's going on in the world of insurance. And let's start by simplifying that, like simplifying insurance, because let's be honest, it feels complicated, Adam, for so many business owners, for entrepreneurs, for myself. I mean, how can data-driven tools, as well as transparent comparisons, make the process both simpler and smarter? I think AI has effectively solved that problem for a lot of people. All you really need to do now is focus on why you're getting what you're getting.

4:27And if you are looking to grow your wealth, you have to realize that that chances are if someone is telling you it's going to happen inside of an insurance policy it most likely won't because insurance in principle is about offsetting risk you're paying someone a premium because you want to be compensated if god forbid something were to happen if you're being pitched an insurance product in the context of wanting to grow your wealth that should be counter that's counterintuitive and you should immediately think to yourself, you know, what is in it for me? What is in it for them? And what is on the other side of the coin?

5:05And all you need to do now is take the illustration, the documents that you're getting, put them into chat GPT and simply have a conversation with the AI and ask it, what is this? You know, based on my situation, what it would look like if I didn't do this, what it would look like if I put the money into this 10, 20, 30, 40 years down the road. And what most people will end up realizing is that these products that are in the insurance space that are being pitched to them as growth tools or state planning tools or things that will help you transfer assets to your heirs over the long run, chances are they may do that, but they'll do that at a fraction of what the traditional markets could have done.

5:42You know, taxes, investment, taxes, estate planning. You know, they are not feelings. They are numbers. And be numbered oriented. And thankfully, you have things like ChatGPT and Claude and Gronk. And for all the problems that these AI and this new technology has, just being able to learn and not being worried about asking stupid questions and getting the unvarnished truth and being able to ask it about the implications of decisions and understanding what this money could have done with you elsewhere, that's just so powerful. And I think it'll change a lot of people's buying decisions.

6:13John Lee Dumas:Now that's huge. And to me, like that really clears up some questions that I know that I had going into this interview. So now I kind of want to talk about turning expenses into strategy, because this is something that you've been able to effectively do. So you talk about specifically transforming medical expenses into tax deductible business costs. I mean, how does that work? See, this goes back to insurance as a product being misrepresented. Now, I don't know a lot about the insurance business in the United States. I know you guys have health spending accounts down there and we have them up here too.

6:45But the problem is in Canada, more specifically, insurance companies, rather than focusing on insurance, they've effectively become administrators and they're clipping coupons off of routine transactions. So when people want a benefits plan or want to write off their medical expenses, they think they need an insurance company to do it. But the problem is the insurance company should be there to take on risk for a premium, not to reimburse me for my glasses, reimburse me for when I take my son to the dentist or get a massage. And people don't realize that these products aren't actually products, they're a tax strategy.

7:21And you can effectively self-insure without an insurance company. So rather than giving the insurance company a thousand bucks a month to go get reimbursements that are tax deductible to your business, you could effectively turn your medical expenses into a premium on a pay-as-you-go basis, not deal with the insurance company, not deal with a premium commitment, still get the tax benefit of running these expenses through your corporation by self-insuring. But at the end of the year, if you have no medical expenses, you don't pay a premium, nothing came out of pocket. Meanwhile, you could be paying thousands a month to an insurance company for a benefit that you may never actually get because you don't go to the dentist, you're young, you're a single guy, maybe you'll get one massage a year.

8:01Meanwhile, well, you paid thousands in insurance premiums and never got anything back. Understand the difference between trying to offload risk and just trying to get a tax benefit for things that are routine. It's really simple. If the transaction is not catastrophic in nature, it has no basis in the idea of insurance, question who is getting the premium and who is actually really receiving the benefit of that transaction.

8:24John Lee Dumas:I mean, Fire Nation, I think a lot of you are like having a light bulb moment or at least having some wheels turning right now of like, oh, that's actually an option. I can actually do that in real life. How much better would my life be if I did X, Y, or Z, or by the way, maybe all of the above. And after the break, we're going to be talking about insurance as a growth tool, coverage mistakes, building a smarter foundation, and more when we get back from thanking our sponsors. Okay, Fire Nation, let's talk about something every business owner should care about, making your cash work harder. High yield savings accounts exist for a reason.

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11:17John Lee Dumas:And when you go through my link at highlevelfire.com, you unlock my full bonus stack. a 30-day free trial of High Level with full access, a private 50-minute coaching call with me, weekly live office hours with me, a digital copy of my book, The Common Path to Uncommon Success, my 50-days to something execution roadmap, and more. Stop piecing tools together. Start building momentum. Visit highlevelfire.com and start building your something today. Adam, we're back, and I want to talk about insurance as a growth tool because, listen, most people, they just see insurance as a drain on their cashflow.

11:55John Lee Dumas:They're like, oh man, the bills come in again. I got to pay this or blah, blah, blah. But you actually argue that it can improve cashflow. Break that down for us. I think the people that are pitched these products in ways that you're told improves cashflow is kind of a facade. Now they improve cashflow because if something happens, your cash is no longer flowing and you have a windfall of capital there to protect you. But I think actually, ironically, the opposite is true. Anytime that you're pitched an insurance product, that's at least you're told is designed to create wealth or improve cash flow.

12:34It's kind of like, I don't know if you've heard that poem when you're younger, dark and stormy night, the sun was shining bright.

12:44They're opposite. It can't improve cash flow. Now, it definitely helps your business because you need to offload risk, especially when you're starting out young entrepreneur. You never know what could happen, whether on the liability side or the health side. But the idea that these products actually help you grow your business, the industry is just selling you this dream because that's how the industry makes money and people are incentivized to do so. And the irony is that any strategy that implements insurance to grow, help you add value or grow your business, if you effectively replaced that engine of that strategy with a basic non-registered investment that you manage on your own, you'd be giving yourself a lot more value and growing your business a lot faster.

13:32So whether it's utilizing debt to invest or just having your extra money parked in an investment that you can eventually draw on should you need additional capital down the road. I would argue that you should stay away from insurance concepts altogether unless you are uber wealthy. And the reality is the second you're in the tens of millions of dollars, the situation changes entirely. You're in a luxury position that most people dream of. And the way I see these insurance products, it's kind of like a Ferrari. It's do it when you get there, but don't buy it to get there.

14:08John Lee Dumas:Let's talk about coverage mistakes, because I think this is something that freaks out a lot of entrepreneurs from maybe changing or exploring new options. So what would you say are the most common mistakes that entrepreneurs make, that business owners make when choosing insurance coverage? They plan for tomorrow 20 years down the road, rather than planning for tomorrow today. Too often when people buy illness insurance or even life insurance, there's this idea that, oh, what if I never, something's not going to happen to me over the next, what if something doesn't happen to me over the next 10 or 20 years?

14:49This is going to be money down the drain in the long run. I need to get coverage that I keep in place till I'm 60, 70 or 80, or even for the rest of my life, just because nothing's going to happen tomorrow and chances are. And if it doesn't, statistically speaking, it won't. Look at all this money I put into it. It's money down the drain. And I think the opposite should be true. And the reality is in the long run, there's no perfect product. There's only trade-offs. It is true that it's going to be money down the drain. But the idea that stretching the coverage out for the rest of your life, the idea that just because something is there in the long run doesn't necessarily mean you didn't lose out on something.

15:29And people, what they generally are losing out on is a lot of opportunity. And I think the most important thing to do is protect yourself for tomorrow. You're working hard, you have a mortgage, you maybe have kids, a lot of other responsibilities. The way I see insurance is making sure everything around me is protected and insulated if something happens tomorrow. And that's not to say I'm not thinking about what about when I'm 65 or 75, when I'm 85. But the reality is your needs at that age are drastically different from what your needs are now. So don't sacrifice a short-term windfall for that long-term emotional security that you may never need.

16:09But in general, I guess my point is there's no perfect solution here. There's only trade-offs. And if you are going to take that$100 a month or$200 a month and try to stretch your protection out to age 85 or 95, just realize that if something happened to you tomorrow, you're getting a fraction of what you could have gotten. if you were more short-term focused in terms of your risk. That's why I think squeezing as much protection as you can out of a term 10 or term 20, it's much more valuable than getting a permanent policy that'll last for the rest of your life.

16:38John Lee Dumas:So this is building off of what you were just sharing, but let's talk about building a smarter foundation for people that are listening here today. So how can our listeners, entrepreneurs, small business owners, how can they actually use insurance strategically to create stronger, more efficient financial foundation for their business? Focus on risk. And if you're looking to grow your business, if you're really focused on the dollars, if you want to scale up, I would really question any advice you receive in that context from someone who is insurance focused, because they're going to see everything through an insurance lens.

17:16They're going to give you products that they probably believe make the most sense, but the incentives of the advisor and the context of the insurance industry aren't aligned, I believe at least, with a growing business. And what you should do is focus on getting a lot of short-term protection because if your goal is to grow your business and something happens to you, the way I see it, I want my family to have that windfall that I would have worked for that would have existed in 10 or 20 years from now. That's the foundation. The foundation is being able to operate with freedom and security mentally and emotionally.

17:52So you know that even if something were to happen to you, that goal that you have is there for your family. Because at the end of the day, we all want to make a lot of money. Nobody wants to spend it all in their lifetime. And true legacy is providing for the people around you, providing for the people around you, the people that you love, the people that have helped you and the people that care for you. I think personally, the best thing you could do is get something simple, basic, and extremely valuable that if God forbid something happens, you at least know in the next life that you reached that goal, even if it means you didn't climb that mountain, you planned and put that coverage in place just in case.

18:32John Lee Dumas:Adam, I think that was a mic drop moment. I think a lot of people are going to rethink their approach to insurance for sure after this episode. But if they want to connect with you, if they want to learn more, What is your call to action for our listeners today? Squeeze as much protection as you can over the short term out of every dollar that you spend because the world's moving way too fast. And I don't think we have the luxury to plan super long term like we used to. Just know that we are a collection of the small decisions that we make. And by making good decisions, small ones day by day, the future will work out for yourself.

19:09but don't try to over-engineer it. Focus on those short-term movements, the things that you can control and be smart with your money. And if you're buying insurance, focus on insurance. And if you're not, don't speak to an insurance guy.

19:22John Lee Dumas:And if Fire Nation wants to connect with you, what is your call to action for them to do that? NymanFinancialInc.ca One more time. NymanFinancial, NymanFinancial.ca And that is N-I-M-A-N, Fire Nation. Yes. So you're the average of the five people you spend the most time with Fire Nation. You've been hanging out with A-N and J-L-D today. So keep up that heat. And for links to everything we talked about, Adam's website, et cetera, go to eofire.com, type Adam in the search bar and the show notes page will pop up. And Adam, thank you for sharing your truth, knowledge, your value with Fire Nation today.

19:57John Lee Dumas:For that, we salute you, brother, and we'll catch you on the flip side. Appreciate it. Thank you. Hey, Fire Nation, a huge thank you to our sponsors and Adam for sponsoring today's episode. and Fire Nation, are you an entrepreneur on fire who's looking to share your amazing message with the world? If yes, we're now accepting applications for EO Fire. So to learn more about becoming a guest, visit eofire.com slash guest and I'll catch you there or on the flip side. Sleep impacts everything. Your energy, focus, and performance. FitNexa Somnipods 3 are ultra-comfortable sleep airbags that block distractions, track your sleep, and deliver personalized insights to help you rest and recover.

20:33John Lee Dumas:If better sleep is a priority for you, Visit fitnexa.com and use code EOFire10 to save$10 on Somnipods 3 today. Stop duct taping your business together. High Level runs your website, your funnels, email, automation, scheduling, payments, and memberships all in one place. And when you sign up at highlevellfire.com, you get a 30-day free trial plus my exclusive bonus stack that includes weekly office hours with me and much more. Visit highlevellfire.com. Highlevellfire.com. Thank you.