Becoming Your Own Banker | Enhance the Implementation of the Smith Maneuver via IBC

So if you fast forward, let's just say you implement the process today and you fast forward two to three years and you're putting in premium and your annual cash value growth is more and you looking back and you're like, oh my God, I'm glad I implemented this process. If I say to you give me 99 cents for every 99 cents you give me, I'll give you $7. How many times will you give me 99 cents? Now my hope is every single day and twice on Sundays. Today's content is for someone who's thinking about Smith Maneuver or you're implementing Smith Maneuver or you're doing Smith Maneuver and you are practicing the process of becoming a banker and you want to learn how you can put it all together. So this is going to be a session for you. So what are you going to discover today? So today we're going to introduce you. So just brief overview of Smith Maneuver just for the purpose of, you know, making sure that we are all on the same page. Before we get into case study, we'll touch base on Smith Maneuver. We'll we'll also talk a little bit about the process of becoming a banker. And if you want to know more about becoming your own banker in depth just on becoming a banker, please get a copy of Nelson's book titled Becoming a Banker the Unlock the Infinite Banking concept. But I'll be more focused on the integration of Smith Maneuver with the process of becoming a banker. All right, so just word of caution before I dive into the content, I just want to disclose to everybody that we are not advocating for Smith Maneuver. It's a strategy. It has its place in the marketplace. This session today is not about investment advice. We're not here to advise anybody on any investment. If you are considering implementing Smith Maneuver, please do your due diligence. I would recommend working with an authorized Smith Maneuver coach. When it comes to application of the Smith Maneuver, you will need an authorized infinite banking practitioner to help you integrate the process of becoming your banker with Smith Maneuver. And my colleagues at SNN Financial are by far the best, best authorized infinite banking coaches in North America. We've helped several hundred individuals, business owners, investors integrate Smith Maneuver using the process becoming a banker for their goals. And it just enhanced everything that they wanted to do with their financial outcome from Smith Maneuver. So what is Smith Maneuver? It's a strategy to make your mortgage the principal residence especially tax deductible and then create wealth. It involves converting the non deductible mortgage on principal residence to deductible mortgage. And I'll dive a little bit more into how it's done. It's all about converting bad debt to good debts. In the, in the eyes of Robinson Smith. You know, bad debt is debt that is not tax deductible, debt that cost us cash flow. And then good debt is debt that is tax deductible and debt that we can use to build more wealth. Wealth. So my 100% agree with his definition on good debt. Bad debt. I'm sure most investors would. Smith Maneuver involves accelerating the pay down of your mortgage balance called the bad debt. And then while paying down the mortgage balance and the bad bad debt, it creates access to capital to invest, which is the good debt through re advanceable line of credit. Here's the truth. You can't take the house to heaven with you. So most investors use the equity in the house today to build additional wealth. And then they use the Smith Mini strategy to do that. Now what is equity? If your house is valued at $400,000 and your mortgage balance is $280,000, as you can see in the middle there, the difference between 400,000 and what you owe to the bank, which is in this case $120,000, that's the equity in the house. Smith Maneuver is a way to take that equity. Then you can, you have the option of taking that equity and investing. And now that equity becomes tax deductible especially or you have to be careful where you invest money. So investments have to be non registered investments. That's, that's one thing you have to focus on. Now here's what's required to implement Smith Maneuver. You need the right structure of the mortgage. The mortgage in this case, which is the tool, it has to be re advanceable. You have to work with the right mortgage broker to make your mortgage re advanceable. It is recommended to work with someone who is familiar with Smith Maneuver strategy. You need to have a good accountant for the purpose of tax, you know, tax deductions. You need a good Smith Maneuver coach. So again, you know, if you haven't heard about Robinson Smith, you may want to connect with his team to find a Smith Maneuver coach. And then when you're ready to implement Smith Maneuver, you have to consider carefully the investments that you're going choose because investments have risk associated with it. A re advanceable mortgage. As you pay the principal portion down, you're able to access funds of what you paid down on the principal portion via a line of credit which is secured against the house. So a readvanceable Mortgage has two components. It has a mortgage component and it has a line of credit component. And as you continue to pay down the principal on the mortgage, the amount of money that you pay towards principal becomes accessible in line of credit immediately. And that is the money that you can put to work in investments. So let's assume that you bought a house for $500,000. And again to have a re advanceable mortgage, take advantage of that. Make sure that you have about 20% equity. Because that's when the line of credit kicks in. It's after you have 20, you build up 20% equity in the house. Let's assume that you built equity in the house, 20%. So mortgage balance is $400,000. And as you're paying down the mortgage, you're able to readvance the future principal pay down portion. And then you're able to access that money in the line of credit secured against a property. Usually the payment required to access that money is interest only by the bank. Now this re advanceable loan in line of credit can be used for the purpose of investments and for the purpose of taking advantage of Smith Maneuver. These investments need to be non registered. Examples of non registered investments, most common ones, dividend paying stocks, real estate, private lending, you know, purchasing businesses. Now let's assume that there's a mortgage balance of $400,000 and the monthly payment is $2,000. So this monthly payment is principal and interest. So the principal portion of the monthly payment is 1100 and the interest portion is 900. So when you add these together, that's $2,000 which is your monthly payment. So as you pay down the principal portion on the mortgage, the same amount becomes readvanceable to you as a loan on the line of credit. So as you paid down 2,1100 of that go to went towards a principal. So your new mortgage balances 398,900. You're able to advance eleven hundred dollars from the re advanceable portion which is the line of credit. So your total debt balance, if you advance this portion on the line of credit, the total debt balance is not going to change, it'll be $400,000. It's just that you're paying down the bad debt and you're creating access to money inside a good debt which is line of credit. So you can access that money and put that money to work and create more wealth by investment. Now the whole essence is to move your debt on principal residence from a traditional mortgage to a re advanceable line of credit. So your debt will not be Eliminated, it's just that it'll be converted into a re advanceable line of credit. And when you access money from line of credit, you can put that money to work. And usually the bank asks for interest only payments on whatever you used from the line of credit. Now so here's a flow of money when it comes to Smith Maneuver. So you have your income, your income goes into a mortgage payment. So after your lifestyle expenses, you also set aside money for your mortgage payment. So portion of income goes towards the mortgage payment and the mortgage. So let's assume that the mortgage has been structured in a way that you have a regular mortgage. And anything that you pay down on the regular mortgage, it becomes re advanceable in in line of credit. So as the income goes down, it become towards the mortgage payment. A portion of the mortgage payment which is principal reduces the mortgage balance. And what amount gets reduced on mortgage balance becomes available as a re advanceable loan in line of credit. And that money can be invested into non registered investments. And then the cash flow from non registered investments pays the interest back on the line of credit. So the whole idea is to build an arbitrage. So for example, if this line of credit is costing you 5%, you're doing a private lending at 12%. So different between 5% and 12%, that 7% is the arbitrage. That's how most investors use this strategy. So the cash flow from the line of credit is used to pay the interest only on the re advanceable portion. Line of credit for the remaining cash flow is used to pay down the mortgage balance so that you can have more money available in the re advanced line of credit. So you can buy more investments. Now as you had borrowed money for investments, you also get to write of the interest that the bank is charging on the line of credit. So at the end of the year you will get a tax refund. So the whole idea is to take any cash flow that you have from investments and the money that you get from tax refunds and apply all that towards the mortgage balance. And so that you create immediate access to capital from the re advanceable line of credit and then put that money to work towards non registered investment. And you rinse and repeat that process so that your mortgage balance, the bad debt comes down and all that debt is moving to re advanceable line of credit. And then you have good chunk of investments that'll be built up for your retirement. So as you repeat the process, you can see the readvanceable portion is taking over the whole mortgage. And then ultimately your Mortgage will be paid down in record time. So you won't have a traditional 25 years amortization to pay off your mortgage. Because you're going to pay off the mortgage in real time in record time. Using this process, you won't have a mortgage payment. But all that debt is now moved to re advanceable line of credit. So you will still have an interest payment that the bank is calling for. And the whole idea is to make sure that we build up enough investments and then enough cash flow from these investments to cover all the future interest payments. So the objective is move your bad debt to re advanceable line of credit and then use that to invest. Now Smith, when your objective is to ultimately objective of any investment strategy is to build wealth. So investment value. So when if you go back to this example, so this investment value, the whole objective is to build network. So net worth will come from this investment value that you built up. So investment value plus over the course of the time the house would also appreciate. So investment value plus the house appreciation appreciation minus any outstanding balance on the re advanceable line of credit. This should be a positive number. That's the whole idea behind Smith Maneuver. And obviously continue receiving your tax deductions. Because that debt is on a re advanceable debt and hasn't been paid off, the investments are still paying the interest portion every month. And then the investment on top of having enough money to cover the interest portions for the re advanceable line of credit, there should be enough money to have a positive cash flow for retirement. That's the essence of Smith Maneuver. Now how does the outstanding loan on the re advanceable line of credit get eliminated? So well, if while we are live, you may choose to take your investment account and pay off your debt or you may choose to take your own income and pay down the investment debt. But the real idea behind Smith Miniver is actually not to pay off the debt. Have enough money in the investment to offset the interest payments and the debt so that you continue getting those interest deductions and you still have cash flow from those investments. The other way that the debt will get paid is at debt. So bank gets paid by selling the property. Because the property is still the collateral for the readvanceable debt. After the bank sells the property, any remaining money that's left over after seeing the property after bank covering all the principal balance, that extra money along with the investment is now transferred as a legacy to the next generation or whosoever you have as the beneficiary on your will. If someone who's Implementing Smith Maneuver, they're smart. They would also have a life insurance policy. So when that occurs, they'll use the tax free proceeds from the life insurance policy to pay the bank and then still keep the house in the family, still keep the investments in the family. So these are some of the ways that the debt gets paid on the re advanceable line of credit either while we're alive or when we're gone. When we meet with a prospect client and their investors and they're looking at implementing Smith Maneuver, one question that they ask all the time is should I implement Smith Maneuver or should I become my own banker? Now becoming your own banker is not an or process. Becoming your own banker is an as well as process, meaning you should implement Smith Maneuver and you should also become your own banker. When you implement the process of becoming a banker, it will radically improve the outcome of whatever you are presently or intend on doing financially. And you can achieve that result without working any harder, without changing your cash flow, without taking on any risk, and without ever losing control over your money. Let's meet Alex and Alexa and there are a couple in Calgary, Alberta. Now again, this couple is in Calgary. When they met with us, they were looking at implementing Smith Maneuver, but they also discovered the process of becoming a banker, the infinite banking concept, and they wanted to take advantage of that. They're in Calgary, but the concept works across Canada. It's not restricted to just Calgary. So Alex is age 45, Alexa is age 42. They have a, they have one daughter, she's age 10. Now Alex is a CPA. As you can see, he looks like a nerd. And Alexa is a project manager. Now Alex's income per year is $150,000. On top of that he receives bonuses. Alexa's income is $120,000. She's expecting a raise next year and then she also receives bonuses on top of her income. Total combined family income is $270,000. So that's gross income, net income. It will be after taxes. They got introduced to smith maneuver earlier, 2022 and they got super excited about it. So the principal residence in 2019, the purchase price was $600,000. They put in 5% down, which is $30,000 to buy the house. The starting loan balance or the, the loan that they amortized over 25 years is $570,000. The fair market value of the property in April 2022. So this year it's $700,000. The mortgage balance as of April 2022 was 5, $533,000 and the mortgage payment is $3,300. Now the mortgage renewal coincidentally was this year. So it was perfect timing for them to implement Smith Maneuver. Now here's some more facts on the mortgage. So as I disclose that their fair market value is $700,000. The mortgage balance is 533,000. The equity in the house is $167,000. So their loan to value is 60 76%. So they have 20% equity built in. Which means they can structure the mortgage, get a readvanceable one and any future principal pay down that they make on their mortgage payment, that money becomes accessible to them immediately in the re advanceable line of credit. And if they access that money for the purpose of investing, the cost of accessing that money from the bank is interest only payments. A little bit more about the mortgage structure. So I know we discussed all this. So mortgage payment is 3,300 now. So restructuring traditional mortgage to read once the mortgage. So the total mortgage payment per month is 3300. The principal portion is 1050 and the interest portion is 2002 50. So as they pay down this principal portion, this money becomes accessible to them via line of credit right away. And as they continue to make any future pay downs on the using the mortgage payment, more will start to go towards principal, less will start towards going towards interest. Hence what they'll be able to access in line of credit will certainly increase every month going forward. They're getting ready for Smith Maneuver. They restructured the mortgage, they made it readvanceable because they could now. But in addition to their mortgage payment which is $3,300, as you can see the principal is 1050, interest is 20 to 50. Because they're super excited about Smith Maneuver and all the tax incentives that they'll come up after borrowing money from the line of credit for investments, they actually wanted to put more towards the principal payment every month. And then they were still working with what whatever the rules are regarding the mortgage in terms of how much extra they can pay per year. So based on that, based on the cash flow, they were actually willing to contribute additional thousand to thirteen hundred dollars per per month towards mortgage payment. And if they contribute this money per month, it'll go directly towards the principal. So as the principal portion gets paid down immediately, that amount of money becomes accessible to them via re advanceable line of credit. They're going to use the readvanceable loan so line of credit and then they're going to use that money for the purpose of real estate investment. Real estate is what they understand they want to do more real estate investments, mostly short term rentals like Airbnb in the Calgary area. They also want to join venture on some private lending deals with other investors. And the payment that they'll be making to line of credit every month is just going to be interest only. So this is going to be the investment that they'll be putting the line of credit money to. It's not stocks for them, it's just real estate and some private lending. A friend of them who has been practicing the process of becoming a banker for several years introduced them to Nelson's book. After reading the book they were wowed and they're like yeah, I want to meet and talk about integrating my goal which is Smith Maneuver and ibc, which is what we're going to discuss today. Let's talk a little bit overview on the process of becoming a banker. So like I mentioned, we're going to, we're not diving into understanding becoming a banker, but I would love to share an overview of becoming a banker just so that we are all calibrated as we dive into the case study. Financial Strategy needs a financial tool the financial tool that the Smith Maneuver strategy requires is the re advanceable mortgage. That's the tool that it needs at the main foundation of implementing Smith Maneuver, the financial tool required for the implementation of becoming a banker. The infinite banking concept is a properly structured participating dividend paying whole life insurance. So the word participating means anybody who has a contract like this, a policy like this participates in the profit generated by the insurance company. So you basically become a co owner of a business. In this case it's a life insurance company, preferably with a mutual life insurance company. A mutual life insurance company is only owned by participating policy owners. They don't have any stock ownership. So when you have a participating dividend paying whole life policy, you become a part owner of the life insurance company and you participate in the divisible profits generated from every line of business that insurance companies make profit on. Now dividend paying. So your share of profit is paid to policy owners via dividend and dividend is paid on policy anniversary day. So if the policy starts Today, today is October 4th. October 4th going forward is your policy anniversary date. That's when you get your dividend. So each year when life insurance company declares a dividend, it is contractually guaranteed to be paid to participating policy owner and it can never be repossessed or lose values. Insurance companies in Canada, they have been paying dividends to policy owners every single year since 1847. So go back to 1847, today's 2022. So mentally, if you just go back to 1847, you look at all the years that have passed and insurance companies have never failed to produce a profit. Because without producing profit, they cannot pay dividends. So they have been profitable over 170 years. And keep into consideration all the recessions, depressions, the inflations, the market crashes over all those pandemics, recessions. They have been profitable, hence they have paid dividends. They must be doing something good with the money. The whole life means your life is insured for your whole life till age 100. And it's permanent insurance. It's not temporary insurance. The premiums can never go up, premiums can go down. And the only person who can reduce the premium is the policy owner, not the insurance company. Now there are set contractual guarantees which kick in the moment you get a policy in place. So one contractual guarantee is obviously the death benefit. So when you put in money, the only way you can put money in to get a policy is premium. So when the premium goes in, it'll have death benefit. So one contractual guarantee is, hey, in case that unlikely happens, there's a payment of death benefit and death benefit is paid tax free to the name beneficiary. The other contractual guarantee on top of the death benefit portion is cash values. Now, cash values is your capital, which insurance company is growing on your behalf to fulfill this contractual guarantee which states that total cash values of the policy must equal the total death benefit by age 100. So if you're 45 years young and you start a policy, you're going to be age 100 in about 55 years. Every single day as you wake up, you're one day closer to age 100. Your cash values keep going up. It doesn't matter what happens in the financial entertainment world, your cash values in the policy can never be less than what it is today. It can only go up. Every day that you age, total cash values rise and policy cannot lose value. The cash value can never be less than what it is today. The components of participating dividend paying quality policy. So you know it is life insurance. So one component is premium. Premium is what you put in to buy the death benefit. And premium when it comes to the implementation of the process of becoming a banker, because we're not having discussion just on how much life insurance you need, we do have a duty of care to calculate how much life insurance you need. But when we design a policy, we are designing policy to achieve a very unique financial Objective, which is process of becoming a banker. And premium is what you want it to be. Because what we're creating is a banking system. And banks need deposits to build up capital. So the more you put into your banking system, the more capital it'll produce for you. The premium is what you want it to be. The more you put as premium, the more compounding is in the policy. It's a deposit. So if you think about how you're depositing money in a bank, it's just changing that process of, instead of, instead of depositing the money in a bank, you're just depositing that money in a policy. That's what it is. It's not about changing your cash flow, it's about changing where the money is going to be sitting. It's about changing the address of that money moment the premium comes in. As I mentioned, there is death benefit. And death benefit is received tax free by name beneficiary upon the death of life insured. Now on top of that there's cash value which is your capital, which insurance company is growing for you inside the policy based on a contractual guarantee which is by age 100, cash values or total cash values must equal total death benefit. And on top of that there's, there's dividends which is your share of divisible profit from the insurance company paid to your policy on policy anniversary day. Let's just say there's someone who's age 45 and they started a policy. Well, the first thing that they do is deposit the premium. So they're putting the premium in. Now let's assume that that premium purchased this particular life insured. So age 45, the person is male, age 45, he's also the life insured. So this person, based on his premium, starting death benefit is $400,000. So again I'm just picking death benefit for the purpose of teaching, making a teaching point. The moment the death benefit is created. So that's the base of the policy. That's where the policy starts. Based on insurance companies contractual guarantee, they're going to start growing the cash in this policy and the cash values are going to grow every single day to match the death benefit by age 100. So the bottom line is age. So age 45 till age 100. So every day he ages, his cash value is going to increase every single day to match the death benefit by age 100. You can see on the right hand side the contractual guarantee. Now we talked about dividends. So dividends are paid on policy anniversary day. Let's just Say the policy started today. Today he's age 45. At the next policy anniversary, he is age 46. So when he turns 46, he gets a dividend from the insurance company. Now he decides what to do with the dividend because he owns the policy. Now, what we recommend, which is the best use of the dividend, is to use the dividend to compound the asset even more. And the only thing that grows the cash value is the death benefit, because cash value must match the death benefit. Death benefit is higher than cash value. Initially, it only matches at age 100. So dividend is rolled into the policy to buy even more death benefit. And that extra death benefit is called paid up addition. Addition, meaning in this case is $30,000. It's an addition to what your starting death benefit is. And now the total death benefit is $430,000. So that's where the word addition comes in. The word paid up means this dividend that was used to buy this death benefit, that's all that's required to buy this death benefit. There's no extra capital that's required. So this dividend, when it's rolled back in, it increases the death benefit. In this case, for example, it's $30,000. And that extra block of death benefit will have its own cash value. And this cash value has to grow every single day to match the death benefit by age 100, another year into the policy, he's two years into the policy. Now, here's a important understanding fact. When it comes to dividend, each layer of death benefit is entitled to its own dividend. If he got dividend on this portion at age 46, when he turns 47, he is going to get dividend again on this portion. Plus he's going to get dividend on this portion. So combine these dividends. That dividend in age 47 is going to be more than age 46. And if it's more, it's going to go in and buy more death benefit. So now at age 47, he buys another block of death benefit. Let's assume it's $40,000. And this death benefit has its own cash value, which is growing every single day to match death benefit by age 100. Now I'm going to do one more year. So age 48. So now he gets a dividend right here on this block, and then a dividend on this block, and then a dividend on this block. So combined now that dividend is much more than age 47, age 46. So he takes that dividend and buys another chunk of death benefit, which again, just using example, it's $50,000. And that portion of death benefit has its own cash value which is increasing every day to match the death benefit by age 100. Doesn't matter what happens outside the policy in terms of finances, stock market economy wise, because of these contractual guarantees, your cash values will only get better. And as years go by, the daily growth in cash value just gets worse, better. Just for example, I'm showing age 49 also. So now you can see that his starting death benefit in this example was $400,000. But by the time he's few years into policy, his estate value called death benefit has gone up. Because his death benefit has gone up, his cash values are much stronger, not just in terms of growth, but also in terms of how much he can access if he wants to use the money. And his dividends are also much more stronger. Now, access to capital, as that policy gets built up, there's cash values. So you can access capital via two methods. Number one is you can access your own capital, all your cash value. So if you need to use capital, you can withdraw your own money, which is your cash value. The other way you can access capital from inside this policy is via policy loan, which. And when you access money via policy loan, you will be using insurance company's capital, not your capital. Your capital will be used as collateral and will continue to grow no matter what. Now, if you access your own capital, called cash values, you don't have to pay any interest to use your own money because you're basically using your own capital. You're stripping your own money out and you're using your own money. No different than if you have accumulation in your bank checking account. And if you use your own money to use it for any purpose that you have the need for use of money, your account value will go down. But you don't have to pay interest to use your own money. Now you don't have to pay interest to use your money, but you will certainly lose interest that you could have earned. So as I shared, the cash values keep growing every single day. So if you use your own cash, that daily growth in cash value will stop, your future dividends will stop, your death benefit will stop. So every decision that we make with the use of money is actually a financing decision. If you use your own capital, you're making a financing decision of not to earn any interest on that money ever again. In this case, daily cash value growth, future dividends, future death benefit. But if you use someone else's money, then you have to pay interest. So either you lose interest or you pay interest. But every decision you're making is financing. Now if you access insurance companies capital via policy loan, you create uninterrupted compounding on your capital called daily cash value growth. Because when you access a policy loan, you're borrowing against your ever growing pool of capital. The money that you borrowing is insurance company's money, not yours. Yours is in the policy growing every single day. Now when you borrow someone else's money, in this case insurance company, they will charge interest. A policy loan process. Now if someone has a policy they've accumulated and they wanted to access that money via policy loan, here's what's required to access that money. Policy loan process. It's a single page policy loan document. Here's the input that's required. Your name. So policy owner is the only person who can access a policy loan. So policy owner has to put their name, they have to put the policy number. Because you could have multiple policies. So you have to indicate which policy you want to access money from. How much money do you need? What you can access as a loan is equal to 90% of your cash value. 9, 0. So loan to value is 90%. And then the other question that the insurance company is going to ask you is do you want this money via check or you want the one this money electronically deposited? Just let us know, we'll do it for you. And then you sign and date and that's it. That's all that's required to access money via loan from the insurance company. There's no qualification, there is no consent to repayment. And the reason why there is no consent to repayment is because when you access a policy loan, they'll use your cash value as collateral and they'll put a lien on the death benefit because they are obligated to pay the death benefit. It's not if it's when you die, the death benefit has to be paid. So at debt, any outstanding policy loan and interest will get deducted and the family gets the remaining money. Now outstanding policy loans do not impact your daily cash value growth. Your cash value keeps growing as if nothing happened. Outstanding policy loans do not reduce your death benefit while you're alive. It only gets reduced at death if there's any outstanding policy loan. Now outstanding policy loan do not negatively impact your future dividends. You will receive your dividend as if there was no policy loan outstanding. So dividend payout is not impacted by any outstanding policy loan, outstanding policy loans or policy loan in General do not show up on credit report because the collateral for the loan is your cash value and the lien is that benefit. So when you receive that money and you use insurance companies money, you basically it's like spending your cash. Although it's insurance company's money but it just shows up as cash and it's private between you and insurance company. There's no reporting to TransUnion or Equifax. And like I mentioned at that any outstanding policy loans gets deducted from did that benefit. When folks go through reading Nelson's book here's and then they meet with us to you know, understand how this process of becoming a banker can be implemented in their life. And we asked them hey, after you read Nelson's book, what what stood out for you? What what were your some of your aha moments. So here's the most common responses that we get. One is peace of mind. The capital that we have in policy called cash value is grown by the insurance company based on the contractual guarantees. And we love the fact that that we can never lose that value. It can only increase as we age. It gets better because there are not many contractual guarantees in world presently. The other thing that they share with us, especially investors, they're like. We love the power of uninterrupted compounding. We have access to capital on demand via policy loan from the insurance company to capitalize on high caliber opportunities that will show up for us for sure. It is not going to interrupt the growth of your cash. It's not going to interrupt the growth of future dividends. It's not going to get interrupt any growth in the debt benefit. So we love the power of uninterrupted compounding. We are able to grow our capital as we're able to access someone else's capital, in this case insurance companies and put their money to work. And last but not the least is control. No financial qualification to access money via policy loan you just send in the request money shows up, no credit checks, no consent on repayment on policy loans. Control, control, control. We get that all the time. And this tax efficiency. So the cash value that grows in the policy is tax free. There's no tax on the death benefit payout, it goes to your name beneficiary, the dividends if structured properly, you'll never pay any tax on dividends. Especially how I showed you, when dividends are rolled back into policy and increase the death benefit, you'll never dime of tax on that dividend ever again. And last but not the least, it's the power of legacy and legacy. I'm not talking about the tax rate that benefit just by itself. I'm talking about the power, the knowledge that they'll be able to transfer to the next generation. Because we love to do family banking meetings. We bring families together, we talk about why mom and dad set this up. We talk about how kids can take over and then build this going forward when mom and dad are so let's go back to Alex and Alexa. So the goals for them was to build, melt, build wealth with the implementation of the Smith maneuver strategy. And they're going to be paying down the mortgage organically. They have to make that payment. They cannot take a vacation from the payment. Bank won't allow them to do that. But on top of that they wanted to accelerate the pay down on the principal portion of the mortgage so that they can gain access on line of credit and invest that money. They're okay putting additional thousand to thirteen hundred dollars per month towards the principal payment. Here's the original plan without the extra payment. So income will come into mortgage payment. Mortgage payment will reduce the mortgage portion of the balance. They will gain access of what they paid on in the principal in the read. Once a full portion of line of credit they will take that re advanceable portion of line of credit invested in real estate, private lending. Things that get them really excited, things that they are familiar with. The cash flow from these investments will now go towards paying down the principal portion and the other while a portion of cash flow would go towards paying down the interest on this read once a line of credit and then the other portion of the cash flow will pay down more of the principal so that they can gain more access on the readvanceable, put more towards investment and then rinse and repeat this process. But as they paid down the interest portion they also get a tax refund and they plan to use that tax refund to also pay down the principal residents so that they can gain more access in the re advanceable portion of the line of credit. So this was the original plan. So this was just based on them organically just making a mortgage payment. But they got so excited about that they actually want to accelerate it and they want to do that by actually sending more money, more of their hard earned money directly towards the principal portion of their payment to reduce the mortgage to gain more access in the re advanceable portion. So as you can see these red arrows, this is the revised plan where they were okay sending additional thousand to thirteen hundred dollars per month which will go down directly to reduce the mortgage, which will give them access in the rebalanceable portion and put more into investments, more into cash flow, more towards the interest on the loan and definitely more towards tax refund. So that was their revised plan after reading the Smith Maneuver book. Now after reading Nelson's book, they still wanted to do exactly what you see on the screen. And they did. But they just added one extra step to the process, which is they implemented the process of becoming a banker. They didn't change their goal, they didn't change the cash flow. They just added one extra step which enhanced everything. So this was the revised plan for them. So and here's an opportunity for them to rethink their thinking. Right? One of Nelson's golden rule is to rethink our thinking. And Jason Lowe, who's my coach at Ascendant Financial, he says it's not just about rethink your thinking, it's about developing the habit of rethinking your thinking. Right. Think about how you think. So that's critically important. Now if they go ahead and implement the plan exactly how you see on the screen, well, will they accomplish their objective? The answer is yes, they will accomplish their objective. But here's something that they didn't consider. How much of that money will be working for them? So if they send this extra payment towards reducing the mortgage, yes, they will accomplish the objective of reducing the principal and regaining that access in the readvanceable and a credit. But how much of that money will now work for them? Well, the answer is zero. Once the money has been sent to the bank, the money has been permanently transferred away. You can never recycle that money. You can never reuse that money. You can never earn any interest on that money ever again. So the third point is, how much interest are they now going to earn on that money? While the answer is zero, it'll accomplish the objective. But that money is gone permanently. And that is what they resonated with after reading Nelson's book. They didn't want to go ahead. Now, without changing the process, they're not going to change their objective, but they're certainly going to change the process so that they can still do exactly what they did. But they wanted to have the capital grow all the time, no matter what. Here's what they did. They're going to take that extra payment. So obviously they have the income person. The income will go towards mortgage payment organically. That's going to reduce the principal and that'll become accessible in the re advanceable portion. But the extra payment that they have to make will go into their system of policies. So they're going to implement becoming a banker right at this step and then they're going to take a policy loan, which is insurance companies money, and then reduce the mortgage. So they'll do exactly what they intend to do, just going to do it a little bit differently. And that's just going to enhance the outcome considerably. Now when they use insurance companies money, they will still accomplish their objective. Their objective will get accomplished. Now how much of that money will be working for them? Because when you, or in this case them, when they initiate a policy loan, they're not using their money. Their money called cash value is consistently growing in the policy uninterrupted because they're borrowing against it. Now how much interest are they going to earn on that money going forward? All of it. Because they never lost any growth of that money. They're going to have cash values, they're going to have future dividends, they're going to have future death benefit. All of that is still there and they still get to accomplish their objective plan after becoming a banker. And as I mentioned, becoming your own banker is not an either or thing. Should I do Smith maneuver or should I do becoming a banker? Becoming a banker is an as well as you should be doing Smith maneuver, if that's what you want to do. But you should be doing it through the process of becoming a banker because it'll enhance everything that you're doing. So this was the original plan and then this is what the new plan is and I'm going back to the same slide. So I'm giving you a holistic picture on what's happening. So this extra payment goes into the policy and they take a policy loan, reduce the mortgage. So now they got more into re advanceable but good chunk of that is coming from insurance companies money as their money continues to grow and compound in the policy. Creating a private banking system, use this word also in conjunction with becoming your own banker. So when I say private banking system I mean becoming your own banker. So creating the private banking system. So to create this money had to come from somewhere. So the so so premium was the extra payment that they were setting aside to pay down more principal the thousand to $1,300 per month which they were comfortable. The premium that they actually started was 1200 per month which is $14,400 per year. So they did two policies. So one for Alex, other for Alexa because they both have the need for permanent life insurance. They both earn income for the family. See life insurance is not just there to cover the outstanding loan balances on any debt. Life insurance is truly there to actually replace the income for that person when that person is gone. That's the real value of life insurance. So they started with two policies, 7200 per year. So they created two private banking systems. So one policy wasn't Alex, the other wasn't Alexa. So again, they're working with the cash flow. They're not changing the cash flow, they're just going to flow the money differently. We had two policies in addition to these whole life policies. When I met with them, they already had trim life insurance in place and they each had $800,000 in term. So combining whole life death benefit in term, we were able to meet the need for insurance. They already had this policy, so we didn't have to worry about adding anything else on top of this. Now for Alex, starting death benefit on whole life was $108,000 plus he had 800,000 from terms. The total death benefit was almost $900,000. And as you saw on my previous slide, that the death benefit on whole life keeps increasing every year. And for Alexa, starting that benefit was 140,000 on the whole life and then 800,000 on the term. And then again, I'm just repeating myself because repetition is best practice today. Whole life death benefit for Alexa will also increase every year. So we did create two policies for the family just to make sure that the family is protected from risks standpoint because nobody has a lease on life. So we created two policies. They named each other's beneficiaries, so in case Alex dies, Alexa gets the money in case Alexa dies, Alex gets the money in case they both die. Then it goes in trust for the kid. But combine both policies, they can access cash values or policy loans to implement the process on day one. So cash values just from get go was $6,500. So they put about 14,000 in policy immediately. On day one, they had about 6,500 in cash values. These cash values grow every single day as I mentioned earlier. So just in the first year itself, the daily cash value growth is $7 per day between the two policies. Now again, how do I know what the daily growth is? Being an advisor, I can look at the numbers today, I can look at the numbers very next day. The difference is their daily growth. Daily cash value growth is $7 per day. And every year going forward, the daily growth will also get better after the policy anniversary day. Policy loans available on day one, 5850, which is 90% of cash value loan to value is 90% access to capital. So I know we mentioned withdrawal and policy loan. So let's go back and revisit that. So if they withdraw money, the daily cash value growth will disappear. There's no growth anymore. If they use their money, yeah, they get to use that money and put towards mortgage. But that daily growth is gone. The future dividends are gone, the future death benefit is gone. And hence they never would withdraw their own money from the policy. They have the privilege to access money as a policy loan which is insurance companies money. So option two. So policy loan available on day one 50. At 50, their capital if they initiate policy loans continues to grow again just in the first year it's $7 per day. And every year going forward that will get better. Now when they're accessing someone else's money, in this case insurance company, there will be interest on that money because they're not using their money. And we'll talk a little bit more about the interest in a bit policy loan not sliding. As I mentioned, it won't negatively impact any future dividends or death benefit. Continuing with policy loan. So daily cash value growth is $7 per day. Now if and I'm assuming that they initiated all that loan today 58.50. That loan will not impact a daily growth which is $7 per day. But insurance company is going to charge interest on any outstanding policy loans and you can see the calculation. So daily interest charged by the insurance company is 99 cents per day. Basically it's 5850 which is the policy loan amount multiplied by 6.2% which is the interest charged by insurance company as of today and divided by 365. It's simple interest. Simple interest is charged on daily basis. So this is the daily growth and loan doesn't interrupt that. And this is the daily interest. Now the process of becoming a banker, the real power in is because you get to recapture your interest. Now you must be wondering what is word recapture. Well here's what it is. So daily cash value growth is $7 per day, daily interest is 99 cents. Alex and Alexa recaptured the daily interest in the daily growth of the policy. So they're way ahead financially. So this is what I meant by the word recapture. They recapture the cost of interest in the growth of the policy. How they're doing so far. If I say to you give me 99 cents, for every 99 cents you give me, I'll give you $7. How many times will you give me 99 cents. Now my hope is every single day and twice on Sundays creating more access to capital by paying back policy loans. Just for example, because I want to make this as a teaching point because when they initiate a policy loan, they're going to take policy loans and apply towards mortgage but they'll use the cash flow from the investments to pay back policy loans. So I want you to visualize using this example what will happen when they actually start paying back policy loans. And in this example I'm just using $300 a month. But this is powerful guys. This is why people love what we do, which is implement the process of becoming a banker. Let's say they pay back $300 a month as a policy loan repayment. Now daily cash value growth is $7 per day. So outstanding policy loans as I mentioned at $7 per day, it's not interrupted. So if daily growth is $7 per day multiplied by 30, assuming there's 30 days in a month, that'll give them $210 a monthly growth in cash value. So daily interest is $0.99 per day multiplied by 30 days. So that'll give them $30 in monthly interest over to the insurance company. So if you do some basic math, so they pay back $300. So $300 plus the growth plus 210 minus interest. So when they pay back a loan, a portion goes towards principal, portion goes towards interest. They cannot re access interest. That's just profit for the insurance company. So 300 plus the growth because they can always re Access the growth -30 is 480. So they pay back 300 as a loan and they have access to 480 and the interest that they're going to pay back to the insurance company. In this case 30 bucks. That's more financial energy for the insurance company which they are co owners of. So it's going to come back to not just them but anybody else who co owns the insurance company or anybody else who has a participating dividend paying whole life policy adds more dividends. So we're in this together. The more we pump as profit to the insurance company, the more we all receive back as dividends. If we just dissect all that and we look at just this $300 per month as a loan repayment and they have access to 480. Repay 300, gain access to 480. How would you feel if you were Alex and Alexa and you make a $300 loan repayment and you have access to 480 immediately? Well, my hope is something like this this is how you will feel because that's exactly how Alex and Alexa felt when they actually saw the transaction. Because you're paying back into amber growing pool of capital because when you took that loan, you never interrupted the growth of your own cash value. So you're pushing yourself ahead financially for regaining more access. More access means more principal pay down. More principal pay down means quicker you can achieve your goal of Smith Maneuver capitalizing your private banking system. So Alex and Alexa, they will reach a milestone where their annual growth in cash value is more than the annual premium. And this typically happens within two to three years. So if you fast forward, let's just say you implement the process today and you fast forward two to three years and you're putting in the 14,400 in premium and your annual cash value growth is more than 14,400 and you looking back and you're like, oh my God, I'm glad I implemented this process because now it put everything into sonic mode for me. You're breaking the sound barrier because you creating live steam as Nelson would call in his book, where you have access to more capital than what you've been putting in as premium. Now private family bank. So just to recap, extra mortgage payments go into policy as premium. Premium buys death benefit. Because they bought death benefit, insurance company is growing and accumulating cash values. And these cash values values are going to grow every day to match the death benefit by age 100. So as they continue putting premiums in, the death benefit goes up. When death benefit goes up, cash value becomes better. So as you can see, cash values go bigger, that benefit goes bigger and by age 100 they are going to match. It doesn't matter what happens outside of the policy, the cash values just keep growing no matter what. Point to note, one question that comes up in question is so I'm not going to lift the H1 100. So what happens to the contractual guarantee? Well, you don't have to live till age 100 for total cash values to keep growing to match total death benefit. It doesn't matter what happens in the financial world outside of these policies, as you age, you're one day closer to age 100. Your cash value just keeps increasing. Whether you're 50, 60, 70, 80, you reach age 100, your cash values will just keep increasing. And, and let's just say we don't make it till age 100. I'm 38 years young, I make it till 8, 78, 40 years from today. From now to age 78, my cash flows will Keep increasing. I kick the bucket at 878, my wife gets the death benefit. But from now to late 78 till I die, my cash values just keep increasing no matter what. So when stock market goes up, cash values in whole life policies go up. Why? Because total cash values must match total death benefit by age 100. When stock market goes down, your cash values still go up. Why? Because total cash values must match total death benefit by age 100. Cryptocurrency goes up, your cash values go up. If crypto goes down, your cash values go up. If interest rates go up, your cash values go up. If interest rates go down, your cash values still go up. Why? Because total cash values must match total death benefit by age 100. It doesn't matter what happens in the financial economy, your cash values can never be less than what it is today. So here's their action plan using the process of becoming your own banker. Now I want to show you the flow of money after implementing the process to obtain their objective which is to implement Smith maneuver to get more investments, to have more cash value cash flow at retirement, to have more tax deduction ability, pay down the bad debt called mortgage. Move everything into re advanceable debt so that they can invest more and get tax deductions. As they put their portion of their earned income into policy as premium. As you're aware now it creates that benefit which creates cash value which grows every day. When they're now ready to implement this maneuver, they are not going to use their money. They are going to use insurance companies money quote unquote policy loans to apply towards mortgage balance and whatever principal that they pay down on mortgage. They're able to re access that money from the re advanceable line of credit. And that money now goes towards the non registered investment. And that investment produces cash flow. Portion of the cash flow is going to be used to pay back the interest on the line of credit amount that they borrowed for this investment, the remaining cash flow and the tax refund that they're going to get. Because they borrowed money to make investment. So they they get a tax refund. So tax refund and any extra cash flow now goes towards paying back the insurance company. And now you know why they are so excited to pay back the policy loans. Because when they pay back policy loans they are now able to re access more money to put towards mortgage. So if they repeat this process, their cash values are increasing. There's more that they can access from insurance company. The more you can access, the more mortgage balance you pay down, the more Re advanceable line of credit you have, the more investments you have, the more cash flow you have, the more tax refunds you have. And if they repeat this process, you can see mortgages paying down and then more is moving towards the re advanceable loan. As they continue to build wealth, cash values keep increasing, which means more money they can access as a loan, which means more they can put towards the mortgage. That move everything to re advanceable. Once everything is redevanceable, the more they can put towards investments, the more they can put towards investments, the more cash flow they have, the more cash flow they have. Certainly they'll also have more interest payments, but the cash flow is going to cover the interest payments. Remaining cash flow goes towards paying by policy loans and then they also get a nice tax refund at the end of the year. All that goes towards policy loans. So this is how the new flow is for them. So they're not changing their objective which was to implement Smith Maneuver, they're just changing the process to make it even better going forward for themselves and the family. And God forbid the unlikely happens if either of them pass away, get on a wrong plane, wrong turn, whatever scenario happens, there's tax free death benefit that's going to come walking in which is going to eliminate the debt outstanding on the revance of the loan, eliminate the debt outstanding on policy loan and the family still retains the house owned free and clear. The family still has the non registered investments, they don't have to sell investments to pay down any debt. Now they still have this cash flow. So they're in a much better, stronger financial position because death benefit was built into the policy which is an incentive or benefit which we can't forget because nobody has a lease in life. Alex. I'm going to pick on Alex because he's a male actually speaking, Alex is going to die before Alexa. And if that happens, well, it's not going to put Alexa in a financial stress mode. In fact, she won't have these payments, she won't have to worry about this, which means she can take the time to grieve and do the things that she truly wants to do, which is to spend time with her daughter at that time or other family members. And if you live a long life, you build up wealth which is cash value growth. And that cash value can also be used for retirement. You build up wealth in the non registered investments which created wealth for you in cash flow which you're going to supplement in your retirement. The other wealth that you also have is tax refund, tax is one reason why we're not making progress financially. So by flowing the money through the process of becoming a banker, you created wealth in four different categories. And if they didn't do it this way and they still did it the other way, which is the conventional way, they will still obtain the objective. But they created wealth and non registered. They created wealth and cash flow and they created wealth and tax refund only using the process of becoming a new banker. They created four different categories of wealth. Without it it's three. Now we can all do some basic math and we know four is greater than three. This is the process of becoming a banker. So integrating becoming a banker with Smith Maneuver. So they were able to achieve the outcome without changing their cash flow and so can you. They were able to do that without working any harder, without taking on any additional risk and most importantly without ever losing control over access to capital. IBC is not an or process, it's an as well as process. It will radically improve the outcome of anything that you are presently or planning to do financially. And here's the best part about it. You don't have to do this alone. We have the best authorized Infinite Banking coaches in North America at Ascendant Financial and most of them are actually on on this call answering some of the questions that you posted in the Q and A section. They have helped several hundred clients implement becoming your own banker personally and corporately. Also helping folks achieve Smith Maneuver integration. Using the Smith Maneuver and Infinite Banking integration for their investments. Could be real estate, could be anything else. Now here's what's next for you. Text the word schedule to 780-809-4599 and you can pick a day and time that works best for you to meet with an authorized Infinite Banking practitioner with as an infinancial and so that you can have a discussion regarding how this can be implemented for yourself and your family going forward. And at that meeting there's nothing to bring to the meeting other than your questions and it's an opportunity for Infinite Banking practitioner on our team, one of the coaches, to meet with you and determine there's a good fit. We're the one who actually wants to make a decision to work with a prospect client because we're not working together for the purpose of hey, here's a policy, hope you get there. We're working together to implement a strategy. And strategy involves work. Strategy involves time. Strategy involves reengaging meeting reviews. So we are building a long term relationship and you know, as you want to feel comfortable working with Us we want to feel comfortable working with you. Also, it doesn't matter where you start when it comes to the premium amount and I get this question asked all the time, hey, how much should I put in? And my response is it doesn't matter where you start when it comes to premium amount. When you start, you'll feel real good about it because it'll work for you immediately. Now if I may also invite you to Google. So if you I'm sure everybody is familiar with Google so if you just Google listen in financial and I'm just so we have more than 500 plus Google reviews on SN in locations at different provinces combined and I'm just sharing some of the most common, some of the most recent reviews if I may on Google. So as you can see Andrew says I'm so excited to start this journey, start this new journey and I didn't know it was possible. Thanks to the wonderful and knowledgeable people at Ascending Financial my financial goal are on track with coaching and wealth building in superdrive. Timothy Ascending Financial has been pleasure to work with so far. Going through the process of gradually replacing big banks with your own private banking system. The team is great and there's ton of learning potential. Martin Great organization and people. Infinite banking concept is very powerful tool in building long term and generational wealth. Raja it was nice working with Roman Pushkar. Roman if you haven't met Roman, he's in Manitoba. He's wonderful to work with and the team set up the insurance policy for me. Roman was very helpful in explaining the infinite banking concept. Happy to start my journey. Tim I really appreciate working with Henry. Henry again if you don't know Henry, you should. He's in Markham. Wonderful, wonderful person to work with. I really appreciate Henry's advice and many consultations we've had to get me comfortable with the concept of becoming a banker, IBC and to get my bank started. I also appreciate all of the people at S and N Financial. Remy I had a great experience working with Jingen and Kathy and again if you haven't met Jingen, she's wonderful to work with. They have been able to drive us very efficiently into the process of putting in a place the infinite banking concept based on specific insurance. I recommend the whole team. So again the most common response that we get from review and we generally ask people hey, give us the review, let us know what was it like working with us. And everybody always says it was a team. The team, the team. Because that's how we show up. We show up as a team. So the next step is for you to connect with one of my colleagues, book a call, have that discussion, talk about your goals. Smith Maneuver. Maybe your goal. Maybe there's other goals. There's more that will come up on that meeting. There's no obligation to do business. It's just getting more clarity on how this can be best applied in your life, personally or corporately.