Becoming Your Own Banker | How the Banking System is DESTROYING Your Wealth

The most common advice you hear from financial entertainers is talking about how powerful compound interest is in the world. Is that really practical in real life? I wanted to kind of share with all of you today in terms of what we're going to go through, an audit of your financial journey and growing your wealth. What does wealth mean to you? Now I want to start with just sharing what the definition is in terms of the Merriam Webster dictionary, which is an abundance of valuable material possessions or resources. And according to Investopedia, its wealth is the accumulation of scarce resources. When it comes down to these definitions, it's that accumulation of resources. What would that be? Well, would it be fair to say that the accumulation of money is the form of wealth? How you accumulate that money is a form of wealth. So now I want to start with that discovery exercise. In the discovery exercise. So what I want to do is just share this Excel sheet. This is completely educational and for illustrative purposes only. I'm going to use a client of mine, a family as an example to walk you through and show you what that will look like when. So that family that I'm going to walk through, I want you to meet the Spectra family. So here they are. Now the Spectra family is a family of four. And I want to introduce you first to Harvey. Harvey is age 47, he's a mechanical technician and he earns $150,000 as a self employed individual. He saves about 25,000 per year into his RRSP and he's accumulated $250,000 to date. So Harvey learned about this infinite banking concept, wanted to take control of his wealth, but he needed to know what was going on in terms of why he was working so much harder, why even though he's working so much, he earned more income. Somehow he just wasn't getting ahead. So that's why he came to this session, just like this one here. I also want you to meet his wife. His wife's name is Jane, she's age 45, she's a teacher and she earns $100,000 as an employee at ABC School Board and she maxes out her TFSA every year and right now it's maxed out at 81,500 and she also saves around 25,000 per year and she also gets a pension from the Province Teachers Pension plan. So just combined, here are some of their assets and liabilities. Like they have a car, they paid 55,000 for it, there's a loan of $50,000 payment, they make about $898 per month. And there's four years left of it. So the second car is about $40,000. With a loan, 33,000. They make a payment of 718,000. They have a real estate in terms of their principal residence of 600,000. There's a cost of 500,000 and they've paid 100,000 into it. And there's a mortgage of $390,000 with four years left. Their monthly payment into that mortgage is 1880, 24. When it comes to the investment property, it's a fair market value of $400,000. Cost of 400. And they paid $80,000 with a second mortgage on that property of 320,000 with five years left on that mortgage paying 1,436.94. Now that's a lot of numbers. You know, it's just to kind of. I want to let you kind of discover and see the process that we go through in terms of discovering and working with clients just like yourself. They have two children. Shane, age 7, should be Shane's resp at 12,000. And then Grace at age 5 with an resp of also 12, 12,000. Let's go through the wealth assessment. So the first part of the wealth assessment that I want to help guide and illustrate everyone through is this cash flow awareness exercise. So the first awareness exercise just wants you to take the Excel sheet and then fill out your main source of income. And so when it comes to Harvey and Jane, the income is 150,000 for Harvey. Now he's self employed and Jane is employed. So Jane is $100,000. So that's just the first part of the exercise. If you don't have the Excel sheet or you're not comfortable using the Excel sheet, just give it a shot. Fill it out on a notebook of yours that you have in front of you and just, you know, if you have this income range put down, like if it's income range over 150, apply, you know, 30, 35%, 40%, whichever makes sense for you. The income range, if it's a hundred thousand dollars, try 23% income range, 80,000, 20%. And then there's CPP and EI. So I just kind of want to bring to awareness that as you are earning income, this income, I'm sure you all know you have to pay taxes and the money also goes to pensions and ei. So I just want you to capture and have that awareness to see what is involved. Let's take a look at everything.

Well, first you are doing all the work and you earn that money. Well, the first part of that money goes somewhere legally bound by laws by the Income Tax act, as an example. Well, the first part that money leaves you, there's some money that leaves you. That money that leaves you goes to the government system, which is taxes. The next part of the portion of money that leaves you is the pension system, the CPP and the EI. So, you know, even though you earn $100,000, you don't get $100,000. You get only some of that money is already taken off in the form of taxes and in the form of CPP and ei. If you're an employee, that is already deducted from your paycheck, so you already receive that money off of what you would normally get per month. The next part I wanted to dive into is, well, whatever you have left after the deductions from income taxes, CPP and ei, well, that money then goes to a banking system. Well, you know, you have probably have it automatically set up with your employer who has your banking information, and they deposit that money into that banking system. So you actually don't really see that money today. But you know, if you log into your bank account, you will see that there's also money that leaves that banking system as soon as you, you move the money in there. And it's actually in the form of bills. I mean, we have bills that we've got to pay. Water, cell phone bills, cable bills, Internet bills, you name it. And it also includes things like purchases. So you've got to pay for. Maybe you've saved up to buy a car, so you've got to pay for that car. Maybe there's other vacations that you want to take and you've taken money to go pay for those bills as a resource. That money's already leaving you. The next part that money is leaving you is, well, if you own a home, you will have a mortgage. And that mortgage is probably automatically set two times a month or every month. Money is automatically withdrawn from your bank account to pay for a mortgage. If you have a car loan as an example, then it's used to pay for the car loan, maybe it's set up every month. All in terms of what you have in terms of that debt after you've earned that money. You paid the government, you paid the pension system, you paid all the subscription and expenses and bills to someone else, and you've had the money removed for mortgages and debts that you're paying because you owe someone money, you get whatever's left. So Whatever's left is your savings. Right now if we go back to those bills that you paid to someone while someone receives that money that needs to go somewhere, well, where does that go? It actually goes back to the banking system. Now when you borrowed money from someone in the form of a mortgage and debt, that money also comes out and it goes back to the banking system. Well, you've saved money in a banking system, maybe you want to move that money somewhere or you just keep it there while it's still in the banking system. So I just want to bring to your awareness, to show and highlight that you are working for money. And then afterwards money is leaving you in the form of taxes, pension and going to other people. And you are at the bottom of the chain or the totem pole when it comes to the money that you save. But it's still within a banking system. And what we're going to focus on today is that all this money or this, this box that you see here is the banking system. And that's what we're going to focus on today and we're going to dive into what goes on in the system and how it impacts your own life. And I'm going to tell you that if you've been handing control of your money over to someone else, you may not be in the best situation right now. And I just want to share with you, I personally discovered the path to peaceful, stress free financial life the hard way. Ultimately, when it comes to building your financial wealth, it really was about taking control of the wealth and how I was building the wealth, not where I was always putting it. And if you haven't seen a copy of this book, I want to make sure that all of you get a copy and see this book. There's been over 470,000 copies sold. And if this is the first time you're hearing about this, please make sure you get yourself a copy of this book. Now don't let the amount of pages fool you. It's a, it's 92 pages. It's a very simple read. However, as you go through the contents of the book, there's a lot of gems and wisdoms in there that will certainly bring clarity to your financial journey. I'm in debt of gratitude for Nelson in terms of how much he's made an impact in my life. I unfortunately didn't get the chance to meet him, but I am very fortunate that I get to learn from people who actually got to meet him. So the first part I want to highlight and go through and talk about is the first problem. Well, there's a cost to how you use your money. As you can see with what was laid out, where your money flows, it actually gives power, energy, and balance benefits. So who you're flowing that money to, that's where they get those resources. If money flows to you and stays with you, you get to make certain decisions with it. If you don't have the basic needs met, then your money goes to making sure your needs get met. But what happens is most Canadians may not realize is that even when once your basic needs like food is met and you're sending your money in other places, there's actually a cost to it. And we use money every day. Money must come from a storage location. And the very first principle that must be understood, and this is straight from the book, that is that you finance everything that you buy. You either pay interest to someone else or you give up the interest you could have earned otherwise. There's no other exceptions. How do we use our money? Well, here's how we use our money. If this is kind of like the zero line, and I've just added some timelines, 5, 10, 15, 20, 25 years, 30. Well, how do you use your money? Well, you can use it for vacation, you can use it to buy cars, you can use it to get education, pay for tuition, you can use it to buy homes, you can use it for retirement. Well, you can use it for anything that you decide that you want to use it for. But what's really important to understand is it depends on what type of person you are. And even if it depends on what type of person you are, how you use the money is going to cost you in terms of what you're using your money for. Well, you could be a saver. Well, you just save one year, you put money away, you save, you work, you save, you work, you save, you work, you save. And once you get to the item that you want to buy, well, you end up back down to zero because you spent all that money. Then you work and save, work and save, work and save and work and save. And again.

Well, alternatives like, well, I don't want to be spending my money or I don't have enough money. Well, here's what other people do. Then they borrow the money to buy things. So they borrow the money and then they work to pay back, work to pay it back, work to pay it back, work to pay it back. Well, the next time comes around, they borrow money again, work to pay it back, work to pay back, work to pay it back. And do the same thing, borrow money, work to pay it back, work to pay it back, work, and they keep on going.

So along this whole journey, what's going on is there's something happening when you put money into some place. You should be getting some interest. You get some little interest here, and then you get some interest here, and then you get some interest.

Here and here. So you can kind of see by the amount of lines, that's the amount of interest you're getting. And then all that interest goes away and you start this whole cycle again. And very similarly, when you borrow money while you're paying a lot of interest at the beginning and then you pay less, you need to spend $50,000 every year, for example, just to buy a car. I mean, cars. And with inflation and with what's going on, things are getting much more expensive now. Well, the first option you have is you can give up earning in a vehicle that grows at 2%, or you can borrow at 2%. And so what does that look like? So here's an example. You have $50,000 and you can earn 2%, or you are borrowing money and you pay 2%. So what does that look like? Well, let's take a look. In the first year, if you earn 2%, well, here's sort of what you are earning. Each year, you earn $1,000. Or if you borrowed the money, you're paying $912 in interest. You do that again in the second year because it gets the compound you're compounding from the $51,000 times the 2%, you get an increase of 52,000, whereas your interest is going down is now $718. Because you've been paying some principal along the way. And you just keep following this process through. Ultimately, by the end of five years, if you've kept your money saved in some vehicle that is paying you 2%, you would have earned $5,204. Or the alternative is you would have paid 2005. 83. These are just the same. $50,000 is just how you use that $50,000 or how you receive that $2,000. Well, let's kind of follow that all the way to the same thing. You need to buy another vehicle after five years. Well, after five years. And after that compounding. Well, if you noticed, the compounding from the first five years was 5,204. Now by 10 years, because you haven't gone through borrowing and using this money. It's just you didn't need to spend it anywhere. You just kept it Saving and growing, it's 5746. It's more than what it was before because it's compounding more. Whereas when you're borrowing money, it's basically same thing. You repeat that cycle again. Well, if you kept the money in place and you never needed to spend it, you get to compound it even larger. It's 12,000. Ultimately, at the end of that period, if you've kept your money in that place and you've never needed to spend it, you've been able to accumulate after 15 years, 23,039. And if you kind of look at it from a spending standpoint in terms of the amount of money that you borrowed, you would have spent 7,000 7,50. Just comparing that because you used your money, if you never used your money, you kept it in a savings vehicle, well, that money had a chance to grow. It got to grow actually uninterrupted. And the other part, well, if you are borrowing money, well, you have to keep paying interest and you're losing the opportunity of earning this 23,000 3,9. And so that's what I wanted to now introduce of what is being lost. So there's a cost to how you use your money. So here's the second problem. Every time you spend your money instead of saving it, you are interrupting the compounding interest. And here's a really smart guy. Albert Einstein says compound interest is the eighth wonder of the world, and he who understands it earns it. He who doesn't, pays it. And the most common advice you hear from financial entertainers is talking about how powerful compound interest is in the world. Is that really practical in real life, when you spend money that you've earned, you are losing interest forever every time you spend your money. How damaging is it when you are interrupting the compounding of your money when it comes to your wealth? Well, let's now compare 50,000 earning 2% of uninterrupted compounding versus the interrupted compoundings. Here you will see earn uninterrupted 50,000. Earn interrupted 50,000. And they're both at 2%. Well, if we look at that 50,000 again, you have the 50,000. You just build it, build it, build it, build it, build it. And there both, both the same, obviously, because it's uninterrupted. Now you've saved the money and you needed to spend it. Well, here's what happens. You spend that money and what happens? Well, you start that whole cycle again. But the one who didn't spend it keeps the money there growing and compounding off of the previous balance. So they grow, grow, grow, grow, grow. And now it's much higher. 5007, 46 versus 5204. And guess what happens? Has to spend it again. For whatever those reasons that money is being accessed and it's leaving your hands, your wealth is leaving you. You're ruining that interruption of that compounding. Well, let's follow it again all the way through to the very end. So if we kind of look at this all together, how much of an impact was this compounding interest at using 2%? Just as a very simple example, after 15 years, that damages 1681. Well, what does that damage look like after 50 years? Well, that damage is 32,539. And you know, I can just change things around if you want to do 5%. Sure, no problem. 5%. What does that look like after 5%? Well, that damage becomes 12,504 after 15 years. 385,229 after 50 years. So because of you interrupting a nice mountain that you have that you've accumulated, you're needing to work extra harder to make up for it instead of having compound interest on your side. You know, there's also another very smart guy that I want to refer to when it comes to compound incomes, and his name is Jason Lowe. And he's quoted to say, uninterrupted compounding cash value is the ninth wonder of the world. So what I wanted to highlight was that you are sabotaging yourself by stopping the momentum of your wealth building. And this is kind of what it looks like. You know, you're just trying to start, but you're going, you stop. So there's never any momentum. You can't gather that momentum to build the wealth. So let's go through the second exercise, which is I want to start talking about accumulation awareness, which is first, fill in your checking and savings account. RV and Jane have $0. So I'm just putting that there, there for you to see. Again, very, very simple. Nothing, nothing too complicated. Fill in what you have for cash and savings. So the next problem I want to take you through is, well, you are likely giving the control of your money to someone else and they are charging you fees for managing it. And if you're lucky, they pay you a little bit of interest. But let's look at the amount they are charging today. And I gotta be very honest with you, when I put this presentation together, I was shocked actually how much it is right now. And if we take a look at it, I Just put together a screenshot of all the current bank accounts from all these financial institutions of what they're charging. If I just take a look at using 6.45 as an example per month times 12, that's $77.40 per year just to have an account in there. And let's just also even know is that you know, you're also limited with the amount of transactions that you have to pay your money that you're being having to pay to access to. Well, what if you need something with more needs? Well, in that circumstance, if you want unlimited transactions, well now you've got to pay for it 15, 95, 12 times a year, that's $191.40, almost $200. Even if you want to be more primo, then you're paying $30 times 12 and that's $360 per year just to maintain a premium account. Now, fractional banking is a financial system in which deposit taking institutions like banks are required to keep as a reserve only a small fraction of all the money deposited with them. When an individual or business deposits money with a bank, they lend that money and the bank pays the depositor money on that. But it's actually a loan. You actually become an unsecured creditor to the bank. They set the rules on that interest to be paid when you deposit that money. And what unsecured creditor means is they don't actually really owe you anything. I mean, they owe you. But I mean when that money that has been deposited with the bank is used by the bank, obviously I think we all know that it's used to start or originate loans for other customers who need financing. And so the deposit account owners who have lent their money to the bank can withdraw their money at any time. But in reality, at any given time, only a small fraction of that money that is initially deposited is available because it's been redeployed somewhere to be used. Well, why does fractional banking work? Well, the assumption is that not all depositors will demand their money at once. So this is why the main reason fractional banking exists or why it's possible. Now there's a real good question that maybe you might want to think about is how safe is your money? Well, let me kind of show you some challenges that have happened a lot recently. And here's something that has really happened. China deploys tanks to protect banks from angry citizens seeking to withdraw savings. Widespread protests through China after 6 billion deposits reportedly vanished, prompting the CCP controlled banks to freeze withdrawals in April and you would think a developed country with a GDP significantly larger than Canada wouldn't resort to this right? Now. Let's kind of walk through how fractional reserve banking works. You deposit $100. Well, here's what's happening. A customer deposits the $100, and the bank keeps a reserve of $10. And then they loan out $90. Well, that $90 gets loaned out to someone and then it goes into someone else's another bank account, which there's $90. And they follow that same formula of 10% and $9 as a reserve. And now they've loaned out $81. And then now that $81 goes back into another bank as a deposit, and they keep a reserve of 8.1. And, and now they've loaned out 72.9. And we follow that all the way from that $100 deposit across the six banks, we're able to have $468.50 as a deposit. Really, what's in reserve is that $100 and they've loaned out $368.50. I'm sure if common citizens like us did this, well, things wouldn't look so good. But somehow, you know, that $100 was able to magically balloon to $468.50 called fractional reserve banking. And here's something that, you know, I just kind of want to share with you here is. Well, I think you know how much they pay you in terms of interest. They pay you about, if lucky, 1% of interest, depending on what type of vehicle you put it in. But when they lend you money, they definitely are not charging you a lot less than that 1%. They're charging you at least 3% in interest. How much did the banks make in 2020 in terms of the audited 2020 financial statements? If we kind of take a look at this in terms of all these banks, and if you ever check out our YouTube channel, the Bankers Vault, you also see a video that our team, my team members Sarblo and Richard also put together and how much the banks make in 2020. Why was 2020 pivotal for me, just to highlight is that if you remember, the government imposed lockdowns on you and the banks flourished. If we take a look at how much interest that they earned, the bank of nova Scotia earned 29,700. And the interest that they paid was 12,400. RBC was 34,083. Interest paid was 14,004,8 for a profit of 20,008. 35. Now this 20,008 35 is actually in millions of, denoted in millions of dollars, meaning there's six more zeros that follows that. So that's $20 billion in interest that they've earned from the deposits that you've flowed to them or you deposited your money into it. They've taken your money to redeploy that to earn almost three times the money that you've lent them. Now you've been told to put your money in mutual funds, commodities, stocks and bonds. And you know, ultimately I'm not here to bash any financial products or put to say, not to put your money there. I mean, ultimately it's your wealth journey. You can decide what is best appropriate to your circumstances. But I just want to highlight some things for you. Why have you been told to put your money in the financial markets? Well, there's a reason why they've asked you or they show you to put all your money with those financial markets. Well, let's see how the investment industry gets paid. Well, I just kind of did a real quick search. How do wealth advisors in Canada get paid? Robo Advisor costs you 0.4 to 0.7% per year in advisory fees. Another one will charge you 1.1 to 2%. Another one will charge you 0.65 to 1.65. Another one will charge you 1.18 and so on and so forth. So you can kind of see the range is about one, one and a half percent. Let's say I wanted to share with you that they're going to take fees off of the assets or the amount of money that you've sent them to manage here. Let's see how your wealth is being robbed by these fees. Well, let's take a look at that first, that I'm showing you no fees and earn uninterrupted. And with fees uninterrupted, $50,000. Now, both of them is still going to be 2%. However, I've added a 1.5% fee to the assets under management. Now, if we kind of go through this, you can see, well, whatever is earned, they're going to subtract the 1.5% fee from that. So if we take a look at it here again, the uninterrupted compounding $50,000 grows to 5,204, 5,746, 6,344. So accumulation of 17,293. Well, how does that impact you in terms of the fees that being paid? Well, what if the choice that you made was to leave it with these Investment advisors. And they have 50,000. You started with assets under management of $50,000. Well, with that $50,000, it's going to be 2%. But they're going to take their fees off of that money. And with that fees off that money, well, here's how much you end up taking. 1263. 63. And let's look at the profit for the investment firm. So that 2% was what was made, but they've gotten 1.5% whereas you got 0.5%. So together that's 2%. And together, if we take a look at this, that's 3807 for compared to 1263. And if we look at the percentage of how much money was earned, they've gotten a larger percentage of the money because they're calculating their income off of what you hold. And we just keep working through that, working through that. So if we take a look at the damage after 15 years, it's about $13,000 and you make only 3884. Very unusual circumstance, which kind of brings into a really curious thing as, wow, you know, they're making money off of what you've passed them and you get to make money off of what they earn for you. What I want to just also remind you of is don't forget that these advisory fees that they receive, that's just one part of the equation. They may also get paid on the products like mutual funds, ETFs, whatever they put that money in. So when they do that, that advisor earns a commission in the fund, they put your money and then possibly there's a trailing commission for how long you keep the money with them in there. And then also that fund that they put the money in, that investment firm, maybe it's the same investment firm, also receives fees like an M E R fee. If we kind of look at it all together, something doesn't look right here. But what I just wanted to highlight for you is that when it comes to building your wealth, I think you get the point that you are permanently losing what you could be earning with your money to fees. You are giving your money, you're handing it to someone else who's paying a fee, who you are paying a fee to. It's not based on what they build, is based on what you own. So let's talk about this concept here. Control, awareness. Now that your money is transferred and stored with them, your money can go up and down. You're the one taking the risk. I mean, if you look at your registered and Unregistered accounts. Right. Now I'm sure you know this. Are they up or are they down? I think for most people it may be down. Well, let's look at the last 22 years for the U.S. s&P. The financial markets don't just move in one direction. They can go up, they can go down. And one of the ways the industry attracts you to bring money is they celebrate on their what they achieve with the average rate of return. Here's what I'm going to share with you, which is the historical values. 10.1 loss, negative 13 loss, 23.4 loss, so on and so forth. You can see there is no logical or linear pattern. It has very random results. But these were actually what was captured in the last year. And when you put your money into the temperament of a stock market, you don't know what direction it's going to go. But the average is 5.5%. Well that 5.5%, if that actually happens, it's 15,003, 48, 20,000 in terms of that. So this is that average returns with that average rate of 5.5%. If things went well after 15 years, it would be 61,624. Well, what if we change the sequence of returns? What happens is 12.8 is actually year 2010, because I have no idea what that's going to look like. As humans, we all want some form of predictability, to have that clarity, to know exactly what we want to earn. And that can be frustrating. But somehow we've come to accept and know that money can go down in the financial markets and we're okay with that somehow. Well, you know, here's 12.8 as an example, 26.4, 6.2, 26.9, so on and so forth. So with that $50,000 just by changing the sequence of returns, the order of how they have. Because past is not really a reflective of the future, which is a disclaimer that they'll share if we go all the way. Ultimately you earn 8,236. And here's another part that I just kind of want to press on to show you. Now if you put this money in with a advisory firm who does the same thing that you could have done, well, if their compensation is based on the assets that you own, well, here's how much they end up getting paid. 17,004, 79. Now no matter what the market does. So let me highlight as an example, after five years, from this fifth year to so at year 10, so five years after the fifth year, you've lost $14,000, but they still get paid 5,086. And why is that? It's because the way they get paid is based on the assets under management, the money that you've left with them. So if it goes up, they get paid more. If it goes down, they get paid less. But they still get paid. When it comes to wondering how are their interests aligned with yours, you're not in control when it comes to access of the money. An rsp. You put money into an RSP and yeah, you get a nice refund at the beginning. Where do we think future tax rates are going to go? Are they going to go down or are they going to go up? If today's tax races are lower than what it's going to be in the future and you've put money into the RSP for a refund today, when you want to withdraw that money and the tax rates are higher, tell me out of curiosity, how are you saving taxes here? All you are doing is deferring, so you're actually paying taxes on withdrawing your very own money. What about all the money that if you are part of a pension plan or even CPP, or you have what's called a lira account, money has been put aside and has been essentially put and locked in prison. And the conversation to get that money out doesn't even start until after 55. I don't know if you're aware of your money being locked up, even though you're the one who worked very hard putting it together and storing it there. Even though it's your money, you're not in control on how you want to use it. So let me talk about this ownership awareness. And if you have real estate, maybe you want to fill in your real estate values and your mortgages. In terms of Harvey and Jane, their real estate is here. Cost is 400. Their mortgage balance and payments are over here. And they had some car loans. So I'm just going to put that also over there. So you can already see the picture forming here. Just kind of want to show the real estate values. When you own real estate or some other assets, you may be the manager for someone else's wealth, not your wealth. Okay, so maybe you understand financial markets is not where you want to put your money because it's risky. You know, it can go up. You know the flaws of it being locked, and you don't like that. So the next best thing is you exchange the money that you've built up to put together for real estate. Perhaps you think you are exiting the banking system, but I just want you to be aware you probably are not. You need to borrow money from the bank to buy the real estate. And let's walk through a principal residence exemption. And I'll walk through using Harvey and James. Their principal residence that they initially bought was $500,000. Well, there's two players who are going to fund that transaction. Harvey and Jane funded $100,000 for that down payment. The bank funded $400,000 to fund the rest of the real estate. Who's doing all the work to generate the money to make the payments. The payments to their mortgage is 1,880 24. Now, that payment is very, very deceptive because there's two components to that payment. There's principal and then there's interest. So who receives the payments and earns the profit, you or the bank? Exactly, the bank. Well, who ultimately owns the asset? If 80% was funded by the bank, 20% was funded by Harvey and Jane, who ultimately owns the asset, you or the bank?

Exactly. The bank owns it. That's what I wanted to show with you. Who's getting wealthier when it comes to real estate. And let me kind of walk through something. It's called the mortgage, and in Latin, it's called the death pledge. So we're so encumbered by the object of what we bought, we lost sight on what we are paying to get it. And a mortgage is really a special form of a secured loan where the purpose of the loan has to be specified to the lender to purchase the asset. And it has to be a fixed and not a movable property. Let's go through what some items here. The truth in lending $400,000 was the mortgage. The term or the amortization period is 25 years. The interest rate, I mean, compared to now is a lot lower. It's 2.92%. We're so encumbered by focusing on the interest rate. And the payment is 1880.24. Well, let's take a look at their payment or their cash flow month. One, they made a payment of 1880.24. But the principal component of that payment. Principal is $906.91. The interest is 973.33. When I look at the component of the cash that's being paid out of 1,880, I'm not sure I can find where 2.92% comes from. The dollars that Harvey and Jane have to work for is 52% of the payment. Let's look at month two, month two. I mean, more money is being paid. The same payment, but that principal is $909. The interest has gone down slightly, but the weighting is still 52%. Well, let's take a look at that. After one year. Well, after one year, Harvey and Jane have made cash outflow of 22,005, 62, which is 1880, 24 times 12. And they've made principal payments. The accumulation of these 900 ish dollar payments is $11,000. Interest is 11,005, 33. So the balance only went down from 400,000 to 388,000. But they've paid, they've worked for paying 22,005, 62. So they've ended up really, if we look at it, after one year, 51% of their dollars went to interest. If we look at five years from now, still 51%. But if we look at five years total, they've paid, they've worked for five years on 150,000, $100,000. That money, they basically paid $112,000 of that. The balance only went down $341, only went down $60,000, but the bank made $54,000. Now, after five years, what normally happens is, you know, the bank says it's time to renew your mortgage. And we're going to renew it at today's rates because things change. But to keep things simple, let's assume that it's been the same one all the way. So after 25 years, finally the death pledge has come to an end. You've made your payments all the way. The balance is zero. You've made an annual payment of 22,562. And the total interest that you've paid the mortgage is $400,000. The total mortgage money that you flow to them in the form of payments and interest is 164,073. I think the bank is very happy with knowing that when they put a mortgage on a home, they know that they're going to get paid in the future. And this all comes in terms of how they structure the loan. So when you borrow money from someone who sets the rules, you or the bank, do you get to decide when you pay that mortgage back? Do you get to decide how much per month you get to pay that back? Do you get to decide to skip the payment? Bank decides. Real estate only goes up, right? So going back to Jane and Harvey, 500,000, 400,000 funded by the bank, 100,000 funded by them. Well, it goes up, right? So in their case, it did. It went up to 600,000. So they paid their mortgage for one year. So after one year, paid their mortgage $390,000, the value of their home has gone up and now Instead of the 100,000, it's grown to 210. So the split is 6,535 now. But still the weight of who owns the home is still more based on the bank. But what do most real estate investors end up doing? What happens is I want to make more money. So they go through time to refinance. And of course, when it comes to refinancing and looking at the loans, banks are going to slam you with fees again and put together another loan fee, loan origination fee, any fee, legal fees, you name it. For that $80,000. Well, in Harvey and Jane's case, they've taken that $80,000. WellS, if they take in the $80,000, well, that has just bumped the loan back up to 80%. And now they now own 20% of the home again because they wanted to maximize, to get cash out of the real estate and take that money to use it again. What's really eye opening is after doing that, bank now owns the principal residence again of 80%. So they take the $80,000 and what happens is, well, if the mortgage is also larger, if you saw from last example, they've earned 164,000. They're now going to earn even more because the amount of money that's owed is even more than before, from 400,000 to 480. What happens is Harvey and Jane went through and put that money and redeployed it into a real estate investment, and they find a tenant, they go through things like maybe a brrrr strategy and puts together another real estate property. Well, either way, they still go through the real estate funding process, puts down a down payment, the bank funds the other portion. It seems like the cycle's repeating itself again. So the bank is the one who's in complete control of the situation, getting rich, and you are the one managing the asset. So the bank still owns the asset.

The bank still profits from you. That's if real estate goes up. What if the value of real estate goes down? And if we just take a look at today, just doing a search, real estate Canada going down. Well, we can see that real estate market fell as much as $87,000, has dropped to 24%, can crash 40%. I mean, it's speculation, we don't know, but the Fact of the matter is, real estate values can go down. It does. It isn't purported as always going up. The value of your real estate can go down. And let's hope the value doesn't go, and this is the, the key. Let's hope the value doesn't go below the amount of your mortgage, or let's hope that your tenant can continue paying for the rent no matter what. In terms of the situation, the bank still profits from you. They've got you being the manager, not the owner. And you are the one taking all of the risk. Now, here's the last problem that I wanted to share with you. When you become an angel, the government will swoop in to ensure that they get their taxes from your wealth. And there's a saying, there's two things in life that you can avoid. Death and taxes. Along the way, as you build your income for your wealth, the government taxes you in the form of income taxes, corporate taxes, dividend taxes, capital gains, interest taxes. So whatever you're earning, they're going to find their way to tax you. But also when you spend money, the government is also going to tax you on when you spend money, like gst, hst, carbon taxes, sales sin taxes, like alcohol, cigarettes, you name it. Then there's possession taxes, like when you own a luxury vehicle. There's luxury vehicle taxes now, and then there's property taxes when you own a property. But the one tax that most people don't pay attention to is the taxes at death. I mean, rightfully so. I mean, the only time people learn about this is when it's too late. When you become an angel and at death, the government considers all of the capital property deemed at fair market value and you must pay taxes on it within about a year. And they want to be paid in currency or money. They're not going to allow you to exchange a real estate asset for it. They need to receive the money, not the actual asset that it's on. And even though you haven't sold it, meaning if you don't have the cash, your beneficiaries, for example, your children, may need to sell the property or assets to fund and pay for those taxes because they don't have the reservoir available to pay for it. On your journey of building wealth, it just seems like you are doing all the work. You are giving everyone else the fuel to get wealthier more than you. And something's not right. Well, let's take a look at Harvey and Jim. And there's a little bit of a secret here. If we kind of take a look at everything. Ultimately, they together earned $250,000. 57,500 went to taxes, 23% of that money. Then the pension system took 6%. The loan payments took 24%. So if we look at the living expenses, 24%. The money saved or available to save is 23%. Looks like everybody nicely evens out. Why did I have you fill out this spreadsheet? To look at the values and see everything in these particular boxes. You have the tax system, you have the pension system. And now everything that you own or you've put in there, you just put a one where you see the zero. Your wealth is all stored in someone else's bank. When it comes to the accumulation, 100% in terms of Harvey and Jane is in someone else's bank. In terms of control, I would argue 100% is not in your control in terms of the ownership. After all, what's paid and the values and what's available, 40% is really owned by you. Because you've had the assets, but you've paid the liabilities. 40% is really owned by you. And what I just wanted to reveal is after what is there if you become an angel today? Because we don't know when our best before date is going to be. The taxes in terms of Harvey and Jane is estimated to be $140,000. So after all of that work in building everything up, the taxes that get taken away at death and what's left behind is 398,500. These systems want your money because they and they want you to keep your money there so they can keep getting paid. And they've built a massive system which you may right now be heavily dependent on. And how did it get there? Well, it actually came from all of your hard earned money flowing there. You are giving them the wealth by sending the money there. They get the resources to now decide to make the decisions to grow and expand. They get the financial benefit. They get the financial energy. Who owns the banking system? It's definitely not you. So whomever controls that motion of the money directing the flow of money into them is the one who accumulates the wealth. And what is the meaning of wealth? Well, wealth is the abundance of valuable material possessions or resources. How much of the wealth that you generate is actually owned by you. Isn't it time you rethink where you direct the flow of and where you store your money? And wouldn't the less people involved in your money be better? Isn't it time you change the way you Use your money. Everything around you that you call life is made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. And this is very powerful because this is where I want to see encourage you to take massive personal action. You probably know what the solution is and it's ridiculously simple. It's minimizing or stop giving your money to the banking system.

Get them out of your life and at most limit them to when you need to use them. Like for Devin. So the most common question that I get is how do I get started? And I want to just first tell you about something which is the most important word that comes to my mind is desire. Without it you probably can't do it. Everyone is already spending all financial resources on what he or she thinks is best. There has to be some honest introspection at this point and a commitment to get out of the financial prison must be a burning passion. Now once you have that desire, next step is build your own private banking system to direct your money to your own system instead of someone else's. What's needed for building private banking system? Well, the private banking system requirements are number one, have desire, have an open mind. This is where now I'm introducing a tool for you. Properly structured participating dividend paying whole life insurance policy and it's placed preferably with a mutual insurance company. The third, set it up and get coached by an authorized infinite banking practitioner from the Nelson Nash Institute which our team members here at Ascendant Financial are. And participating dividend paying whole life insurance, what is that tool? Well, one thing that I want to make sure that you know is we don't have many financial guarantees in life anymore. However, dividend paying whole life insurance placed with a mutual insurance company can help create peace of mind and unmatched financial security. And here's how. First, there's something called cash values. They begin accumulating immediately, tax free and is contractually guaranteed to grow daily. As opposed to the sentiment of the financial markets that can go up and down. You put money in there, you don't know if it's going to go up, you don't know if it's going to go down. But the cash values of what you put your money into is contractually guaranteed to grow daily. It can't go down. When it comes to building your wealth, you can decide to take the wealth that you have and invested with risk of it going up and down. But the foundation of where you are Flowing your resources, your wealth should not go down. That's my belief at least. Easy access to and control over a growing pool of financial value that you can use to take advantage of opportunities that will track you down. You're not going to be penalized for accessing it early like you are in an RSP or other financial products and the ones we work with. You can access money immediately as it's in force. Within the first month you will be able to access your money. And there are many tax advantages, both personally and corporately. And there's a growing death benefit which is paid to your named beneficiaries income tax free compared to when you put money into an RRSP or real estate when that is disclosed. If there's no money available to pay taxes that needs to be paid, some money has to come from somewhere. Your own private banking system is your ticket to financial freedom. So remember that Spectra family. Let's look at what the start of their plan looks like. The old way was to take income, it goes to the tax system and it flows to someone else's system. The new way is really, it's really hard to mitigate and avoid the tax system, but you can still create your own family system. And let me use an example and I'll use real estate. I'll use land and building to explain banking with someone else. Well, right now there's land, which is in essence the bank that you do not own while you have some money and you need to store it somewhere. So you go to this bank or you go to this land to put a building, or you're building a building on top of that land, which is the bank account. So now the bank account is set up and used. You flow your money into the bank account. So money is going in there. Now if I follow the rules of what the banking system does, fractional banking, they're going to take some of that money and put that into their system. They're going to reserve only 10%, but they're going to redeploy 90% of that money. So they do that once, they do that twice. So that's money accumulating inside that banking system. But you're the one doing all the work. Reality sets in. You've got to pay bills. So you're taking money from your bank, interrupting your compounding to go pay for bills. So money is leaving you work. Again, you put money into the bank account and again because it goes into someone else's bank account in the banking system, they're going to create some more money for themselves and loan it out and make a profit with that extra money that you have. You don't want to leave that much money in there. So you want to move that money somewhere. So you're going to move it into an investment account. So you move it into that investment account and because it's in the investment account they're charging you advisory fees, mer fees, any fees, many fees that you name it. And that's how they're building themselves. And this building in most cases, most people go to the same bank to set up the investment account. So again you make some extra money and you move it and the bank charges fees. I ran out of space because I can't fill out how much money they end up making. But you move into your investment account and they charge and make you more fees. What happens when you graduate because you don't know when that is? Well, if we look at the accounts right now there's about three, three chunks or stacks of money. What's left behind is really, if you become an angel is three chunks. What you put in is what you're going to get back out. And if you're lucky, you may pay taxes for it too. I just also want to highlight something that your money in that investment account is actually exposed to market losses. So that money, even though that pile you see is that big, well it can actually shrink, it can actually go down. So your wealth is a moving target of up and down because of what can go on and where it's being placed. Well, what does the private banking system look like? If we look at the land again, this time it's a mutual insurance company that you co own. You build your bank on top of the land you co own. Would you rather build a bank or your infrastructure or your wealth on something that you own or you don't own? I think the obvious answer is you want to build it on something, something you own. What most people who don't understand infinite banking as what Nelson teaches, they build it on an insurance company that someone else owns. A non mutual or stock owned insurance company. You build your bank account on top of the land that you co own or the company that you co own. You flow the money into there. That money is also now in the insurance company. They're going to take that money, they're going to invest it, they're going to make sure that there's enough resources to ensure the co owners like yourself would be properly covered while that money is contractually guaranteed. And it increases every single day no matter what happens with the market, no pandemic, no recession, no manipulation of the stock market can ever take the values that are sitting in this account to ever go down. The insurance company legally guarantees these values and you get to keep your money compounding every single day. How is that the case? Well, if you have bills coming around, I'm just using bills as an example, your money gets to stay growing every single day. You actually get to use the insurance company, the money that you co own, all of us, the money that's sitting in there. And you're going to use their money to pay for your bills, your purchases and I didn't get a chance to talk about this, but when you borrow money from someone, you've got to fill a lot of sensitive private income, qualification, assets, liabilities, you got to give everything, including the kitchen sink. Well, when you access money from a company that you co own, very simple forms, you fill out within a couple of business days, that money is there for you, no questions asked. What a different experience when it comes to your own money. Next you have another opportunity that's come your way because you filled up your banking system. And while if you've built up the banking system, I'm going to keep my money in place. What the insurance company again will kind of tie down to that is then they take, they allow you to access their pool of resources and you want to put it into investments for yourself. That money is still going to grow every day because it's not leaving you. You're actually using the insurance company's money. And maybe those investments go up, but they can go down nonetheless. You decide, it's your choice, you make the decision. It's your money. If it does go up though, you get to enjoy money growing every single day in your bank account, but you also get to enjoy money growing in your investment. And all of this is growing uninterrupted, compounding now what happens at death because we don't know when our best before date is going to be. Guess who swoops in to save the day as opposed to the amount of stacks of money that you've left in someone else's bank. This company that you put your money in into a mutually owned insurance company, that death benefit is far exceeds how much money you put in. I haven't heard of anyone who's been really upset that they wish they got less than what they were paid. Everyone starts at where they are today and it builds and expands. Their programs will always build and expand. The key is just getting started. So what does the Spectra Family banking system look like Jane and Harvey were already saving 25,000 each. And now instead of going to that financial prison system, they are putting it into their own wealth building system. So that was $50,000, 25,000 from Jane, 25,000 for Harvey. Well, here's how it was allocated and set up. Harvey was 25, Jane was 18, Shane was 3,500. Grace was 3,550 thousand per year. Each year the money pool expands. I know the mind of many people when they see numbers, they want to reverse engineer it. The key is not the numbers. The key is the process of what I'm sharing with you. Building this money pool takes time. You have to build the capacity for it to fill the needs. And what you need in your life, your life is very different than my life. Harvey's life and Jane's life is very different than your life. What they start with is different than what you may start with. Either way, it's important to understand the concept that I want you to take away is you need to fill your banking system. You need to put your resources on the shelves to be used. And so for Harvey, this is what it looks like. After the first year, 17,005 3, 25,000 in 0, 17,005 3 can be accessed. The second year is 37,662, 50,000 in, in total, 37,662, 6, 2, 6, 8 7, so on and so forth. So after five years he's put in 125,110 after six years, 136,878. Jane is 12,623, so on and so forth. Shane is this much after six years. Grace is this much after six years. You know what the beauty is? At least the money that's going in here, you already know with a good reasonable precision that this is what is going to be there. If you put your money in the accounts of stock markets as an example, you don't know what year two is going to look like. You don't know what year three is going to look like. You don't know what year four, five or six is going to look like. But just to kind of make everything all simple, I just kind of want to show you what that combined money pool looks like. 50,000 in total, 34,456, $100,000 in total, 76,046 again after four years, it's 172 after five years, 222, 275. But what I also want to share is also how much does their system compound combined by putting in $50,000 their daily cash value increase. The access that they can get grows at $23.95 cents. They're not working any harder. No government is taking any taxes for that increase. Well, what does year two look like? Well the estimated amount is $38.52 per day. So what does the Spectra family banking system visually look like? Well here's that land, the mutual insurance company that you co own again or they call they have that banking system. The first job that they did was to flow their working income into the system. And what does that look like? Well here's where they built up those resources. Now from good coaching and other opportunities that they've taken advantage of, they have expanded their banking system. This is as money is flowing in to their banking system that they co own they get the benefits of and using. Well this comes from money that they're flowing from their real estate income. Maybe from $18,000 per year on his taxes. Instead of spending that extra $18,000 he wants to redeploy that into his banking system. So let's start another system for him. Now maybe there is including money from balance transfers like their TFSA is not making enough money for them so they want to put it in an environment that they control. And so that way it's growing contractually every single day. So we expand their money system in there. Now what happens when death occurs? Well if death occurs, there's a pile of money that is built up. This is the family banking system where all of your working income starts flowing in there. Everything that was owned and sitting in someone else's bank is moved into your own banking system that you have complete control over. And this can include now paying for things like university educations, car purchases, retirements, more real estate, anything that their imagination desires. And it starts with building the capacity so that your system can handle the needs of your life. If you start with a system of just as an example $5,000, it's unrealistic that you're going to get to buy a real estate property for it. It's important to understand that the system takes time. I also want to share with you that this isn't a math or a science test like you had in school where you're told to do your tests alone. I want to recommend that you do it together with a coach. And I of course would recommend working with members of my team who are authorized Internet banking practitioners from the Nelson Nash Institute. Our Coaches are going to work with you to discover where you are in your life journey and where you need to be. They understand what it means to build their own banking system because we all practice this in our life. Even the very best athletes have coaches. We're all human. Sometimes we get bombarded with the financial entertainment that ends us sucking us back or setting us back into that world. Well, hall of Fame coach, player Michael Jordan, Phil Jackson, Novak Djokovic, 21 time Grand Slam champion has Goran Ivanicevich, Wayne Gretzky has Glenn Sather. You've got to get the right coach for the right situation and you should choose someone who is an authorized infinite banking practitioner with the Nelson Nash Institute. And all of our coaches here at Ascendant are if this is important to you, it's worth it and it takes time and this isn't a limiting system. It's not like you can't do this, you can't do that. It's a growth system. You can do this and you can do that. You can expand it or you can not expand it. What's really important is it's designed for your needs, your financial life, the journey that you want in your financial life. Aren't you tired of being told what what you can or cannot do, especially when it comes to your money? Our Nelson Nash says is what a peaceful, stress free way of life it is when you get the banks out of your life and it's priceless. Our coaches are the best at what they do. We have over 500 verified Google reviews. While working with Jason has been nothing short of amazing, he and his staff has provided us with the tools of building wealth and financial stability for our family. Josh Richard helped me gain a bright financial future by utilizing my business savings as part of retirement life insurance wealth creation plan. Miguel Jason's very nice and a very personal person. He's also very knowledgeable about ibc. Ani writes Henry it was a pleasure working with you and your team. Helped her family with obtaining financial clarity and controlling the banking function. Greg wants to thank Roman for help getting the process started. He had a lot of questions in the process, answered them all professionally and had it make more sense for him to go forward with ibc. Anoop Dan Allen has been such a pleasure to deal with. He was very transparent about the whole process and very thoroughly answered all of the questions. You're going to have questions like should you implement this process personally or corporately or should you build the system with your children? And to all of those questions, I'll just tell you right now, the answer is yes. Whether you do it personally or corporately or involve your children, when you implement this system, you are going to feel amazing. So make that decision and text the word schedule to 780-809-4599. Make sure you reach out to your coach that you are working with to help bring more clarity to expanding your system. And I just wanted to share something a little bit more for you to kind of see what this process looks like. And this is called the infinite wealth plan. At Ascending Financial, our goal is to educate and empower our clients to be in the driver's seats of their own money. We have world class coaches and authorized infinite banking practitioners guiding you along this process. And if we look at Nelson Nash's five folding rules to think long range. Don't be afraid to capitalize. Don't steal the peas. Don't do business with banks. Rethink your thinking. Well, the first step, which all of you are here today is to be educated and get empowered to take control of your your money and put the power in your hands and take the power away from someone else's hands. Next is to schedule the becoming your own banker call. Get your questions answered so that we can get give you clarity on your specific situation. And this all starts with the becoming your own banker call. Once we find a basis together for, for us to work together, we have to make sure that we can work with you and we are in a good mutual understanding and, and together you're going to meet with your coach who's really going to dive into your financial situation and you're going to learn and you're going to walk away with some really good value in terms of where you are in your situation, where you're possibly inefficient, what opportunities are there for you to really grow your wealth with confidence and moving forward. Once you decide to move forward after that process, the next is a custom designed session where taking all that personal information that you've shared with us in confidence, we design a custom design plan specific for you and your needs and your goals and objectives and how you need the banking system to meet your needs in the future. And we also talk about things like protecting your financial plan and your income, which includes things like disability insurance and critical illness. Because if you're not generating the income something that's which is a very valuable asset, you need ways to protect the ability to, for you to have that income for your needs as you are still focusing on your health or anything of that nature. Once you go through that process, you will meet our client success team. We have simple online meetings to streamline any application work and paperwork that's needed. And ultimately all of that, from 1 through 5, is about setting up the banking system. Because it's really important to get the banking system set up properly for you and your family. We don't want to just put something together and slap some illustrations for you or anything like that. There's a process involved and we're very serious about setting this up properly for you. Once it's all set up, it's implemented, the implementation of kickoff goes on. And that's when there are very valuable ongoing lifetime coaching from your coach who will meet with you and discuss taking action with the banking system that you have to really gain that efficiency and build your wealth. But also at Ascendant Financial, we offer quarterly group sessions, regular meetings, training on how to use your policy loans. Use the form. We have a portal for all the forms, all accessible 24. 7 I just want you to picture a day when financial control is in your hands. Not a bank, the government or the risky stock market. When your spouse says, thank you for not making me wait 30 years to enjoy the lifestyle we want today. When your finances are exactly where you want them to be and you know with certainty that you have the freedom to travel when you want to travel, relax when you want to relax, and serve when you want to serve. If you remember when I asked you, what does wealth mean to you? If you're looking for where your finances need to be, well, ask yourself this question. Who is the banker in your life today? And I just want to leave with making sure that you know to text the word schedule to 780-809-4599 and reserve a day and time that works best for you.