Becoming Your Own Banker | Real Estate Investing Through Effective Cash Flow Management

I understand there's a problem. I'm either losing interest or I'm paying interest and money has been transferred away from me. I wish I had more money. This way I can recycle more money for more goods and services or investments that I have to buy. But is there a better way?

How does successful real estate investors manage this cash flow?

Is there a way for me to structure a policy to use this money that I hold for the government for a policy to fund premiums?

Hello. Welcome everyone. Let's just get started. We are hosting a content specific webinar regarding a real estate investment and cash flow investment. If you are a real estate investor, if you are looking into investing real estate, one of the most important thing that being a real estate investor is really regarding on the cash flow management. We are going to talk about how we can enhance our cash flow management through this process called becoming your own banker. The infinite banking concept today would just be a specific case study for you. I'm sure you are going to pick up something tonight. I strongly recommend you to get a hold of this book if this is your first time. Because we are not going to go into deep with the introductory of this process of becoming your own banker webinar. But today we are not going to dive off the overview of this process. We are just going to touch base on it. We are tying some very specific topics which is extension to this process. All right, let's dive in. My name is Jianjian Fang Sarblo Gill is also one of our speaker both of us advisors here with Ascendant Financial and we are also coaches and also authorized infinite banking practitioners through the Nelson Nash Institute. Today we are going to talk about approaching real estate investment without increasing your risk or liabilities through effective cash flow management. And why do people invest in real estate? Like I shared, because real estate produces cash flow which creates confidence in the future for the family. Without cash flow, nothing happens. And real estate also creates equities which people can sell in the future. And people can potentially leverage this equity to expand your portfolio. And how can people build equities in real estate? Well, rental properties, your tenants is paying the mortgage for you. So. So you gain that mortgage, pay down the principal, pay down to gain the equity. And there's also natural appreciation in the property. We all know that real estate is a very good solid investment to hedge against inflation, right? And also real estate is a great leverage potentially we can, you know, multiply and scale scale which expand the portfolio which brings us even more cash flow than equity, right? And the other thing that real estate investors really love about real estate is really the passive income and the freedom of time that real estate is providing. Because you are not exchanging your time for money. You receive the passive income, rental income from your tenants which give you the freedom to do the things that you love to do. And that's why people love about real estate. Now the other thing that real estate can also provide is it can transfer to the next generation. And I'm not even talking about transferring the the property, transfer the equity. I'm talking about transfer real estate, transfer the cash flow and the knowledge so that our next generation can scale from it and going forward benefit them even more. And you as a real estate investor understands the difference between delayed gratification and instant gratification. As a real estate investor you must heard the word sweat equity, have you? Yeah. There's a lot of hard work has to put into for you to build that equity. So as a real estate investor we all looking to achieve delayed gratification because they there is no such thing as instant gratification. Do you agree? In the era of instant coffee or instant tea, there is no such thing as instant gratification. Anything worth considering takes time. And real estate is exactly like that. And that is why real estate investors are obsessed with the process of becoming your own banker. Because it is not a get rich quick scheme. This is about achieving constant goals, results and outcomes. It is all about delayed gratification. Now success in real estate comes from two basic ways. Number one is the cash flow and equities which is based on how many doors have how many units that you may have. So we know that cash flow from scaling your number of doors is important. But also the most important thing is how we manage this properties, how we manage the cash flow. Do you agree? Because the cash flow management comes from two ways. One is cash flow management with our hard earned incomes and that's one way of managing our cash flow. But the other way is to manage a cash flow that are associated with each of your properties, each of your investment. Because how you manage this properties is important. And today we are just going to be focusing on discussing the enhanced ways of cash flow on the properties that you already have. It is not about changing your objective or changing your cash flow, is all about changing a how changing one extra step which it will do is you will enhance whatever you as a real estate investor is already doing without taking any more risk, not working any harder, not changing any cash flow, not ever lose control of of any of your money. But we use a cash flow through this process of becoming your own banker or infinite banking concept. And for the real estate investment. Why? Because cash flow management is really important because you are going to capitalize more. If you managing your cash flow well, you can expand and scale and increase your number of doors. And it's also important because being a seasoned real estate investor that you are or you want it to be, you have to prepare for this cash for expected expenses. Now here I said expected expenses. Because it's not about if, it's about when we know as a real estate investor, those expenses will come, those expenses will occur. It's just a matter of time. And successful real estate investors plans for them because there's no escaping it. So I'm just listing all the things, I just wanted you to think about one property that you have. Think about all the expenses that are related with this property. There will be vacancy cost, there will be change of ac, change of your fridge, change of dishwasher, stairs, roof and all those things. And the repair maintenance category is always my longest with bookkeeping. And along with that there's property management fees. When you have 20 something doors. Even though you can live next to these properties, I guess you still might have to leverage someone else to manage this properties for us, right? So there's all this cost, property management fees, taxes and accounting fees, all this expenses, it will come. And how does successful real estate investors manage this cash flow? Well, one way is you can save all your net cash flow. And the other way, if you do not have the net cash flow yet, most of us allocate the money aside, keep some money, extra money aside to allocate money from your earned income for each of these categories. You know, it's like create all those buckets of account from a commercial bank so that we have a designated fund just like the envelope method, if you remember, like I have a designated account for the vacancy expenses, designated account for this unexpected or expected, but don't know when those repairs and maintenance bucket for that. And successful real estate investors may also put aside money for capex, which is capital to require. Because if you manage your cash flow well, you might also wanted to set aside time for capital for future real estate acquisitions. And this is a way to scale and buy more and more properties and to achieve the goal to have your financial freedom. Right? But for some people who have the net cash flow from this properties, but they did not manage capitals as what I just shared, how I described, they are going to spend all the money when all those expenses come what would they do if they spend all this net cash flow? What would they do? Well, they might be going into debt. And this debt, may I ask, is it a good debt or a bad debt? With this debt going to help you to scale more properties or it will hinder you from buying more properties. The answer is bad debt, right? It will take away your borrowing power when you borrow someone else pile of money to achieve all those expenses, right? So most real estate investors prefer using saved money over debt. For the exact reason that I mentioned people wanted to scale people does not get into debt. And maybe thinking the saved money is a way to go. And before I get to know the process of becoming your own banker, these two ways, saved money or borrowed money are the only two ways that I know how I can achieve my objective by allocating those expenses. I only know those two ways because as a real estate investor, I just focus on the ultimate goal of how do I go about buying the real estate, which equity should I take? All I focus is acquiring real estate and how I manage the cash. I did not pay attention to any of this transaction which without transaction money does not flow. Until I read Nelson's book. Until I get to know the process of becoming your own banker, I finally see it is not the problem, was not the problem that I know. The problem is how I go about achieving all this. How do I go achieving these goals and the outcome is the transaction of money. The next slide I want you to share, which is important, I want you to pay attention. I also want you to invite my colleague Sarvalo to join me is because the next slide, slide that graph you are about to see is really my aha moment as a real estate investor. How I understand this process, right?

So you mentioned a really important point, you know, and even me, you know, when I got into real estate, my ultimate goal was to just keep buying, keep buying joint ventures. And you know, I did quite well in real estate investment and my mind was focused on just acquisition cash flow and never paid attention on all the transactions that are required to a buy properties because down payment has to be made. So that transaction I never paid attention on. I was just paying attention on how much money had to save and then pay for that transaction, get the down payment, get the property. And then once I have the property, have the cash flow, I did the allocation exactly how you walked through for vacancy expenses, for repairs and maintenance, for taxes, for admin fees and things like that. But all I was thinking was I have to make a location and when the expense Came I would just take the money from that account and cover the expense and never really paid attention on the transaction because our IC and years here, what our mind is focused on. So mine was only focused on real estate, never focused on this transaction. And just like yourself, when I got introduced to the process of becoming a banker and many investors that have successfully implemented this process, they realize it's not just about the real estate. Real estate is good, but it's also about maintaining control over these transactions. Because it's these transactions that's going to help you scale your real estate investments. Because without access to money, without having money, nothing ultimately happens. So, Jenjin, you walk through people saving money and accomplishing the objective and people who don't save money to accomplish the objective of curving these expenses that get into debt. And as a real estate investor, we want to make sure that we have saved money so that we don't get into bad debt, because bad debt takes away the credibility to leverage more for real estate. Now what we're going to show you is, transactionally speaking, looking at saving and debt doesn't matter which method you use, the outcome is actually very similar, transactionally speaking. So let's look at a saver Now, Jen. Jen. The first allocation was for vacancy. Now to have money and funds available for vacancies. Now, has any real estate investor experienced vacancies during COVID time or not Covid time? And then you had to use your funds to accomplish the objective of keeping the property going because mortgage still has to be paid, insurance still has to be paid, utilities still have to be paid, and then what does that do to your bank account? So if you piled up savings in a bank account for the purpose of covering vacancy expenses and vacancy happens and you use your savings to cover that expense, then what happens to your account balance? And I know it, and you should know it too. It goes down. And in this particular case, I'm just dropping it down to zero, assuming all that money was used for vacancy. But the teaching point is, as you start saving money to cover vacancy expense, and when the time comes to use that money for that expense, your account balance goes down. Now, if you're saving money for repairs, well, you start to save money no different than how you're saving money for vacancy. And when the time comes to use that money for repairs and expenses, because those expenses will come, the account balance reduces, or maybe it goes down to zero based on your allocations. And then same thing happens with maintenance and same thing will happen with tax and accounting fees. Guess what? There's no escaping taxes. Taxes have to be paid. And then usually we get a really good sound accounting or accountant to manage all this for us. And it's not cheap, it's not inexpensive to hire a good accountant to, to do, to leverage their unique ability to file all the taxes from real estate investment standpoint. And all that costs money. And once we use all that money as a saver, where does all that money end up?

Goes back to zero. And to be honest, as a real estate investor, every time when I go to accountant, I'll be happy to see a zero if it's not negative.

Accountants just love to build, right? But we need their good guidance too. So. So again, if you're a saver, I know using these transactions, you know, you save money for vacancy, you use money to cover vacancy expenses, you save money for repair, you use money for repair expenses, you're able to obtain your objective, but all that money is gone permanently. You cannot reuse that money, you cannot own any interest in the money. The money is completely gone. Now on the other hand, if you're comparing the saver mindset with, with the debtor mindset, so debtor is someone who just hasn't saved any money. And to cover these expenses, looking at vacancy, for example, they have to go into debt, they have to borrow money, and then once they borrow money, they use borrowed money to pay for the expenses, but then they have to pay the debt back. So when they pay the debt back, they're down to zero. And then same thing, maybe they're not saving money for repairs, and then they go into debt for repairs, and then when they pay the debt back on repair, it goes down to zero and the process continues. So whether you saver or whether you're debtor, when you focus on that transaction, the outcome is very similar. The outcome is you got no money to show for it. The objective was accomplished, but there is no money.

And as a recent investor, when I saw this after reading Nelson's book, it connected with me because what the process of becoming a banker has nothing to do with taking on any risk. It's all about adding efficiency to what we already doing when it comes to cash flow management. And when I walk through a case study with everybody of a recent investor who understood this, and all they did was they added one extra step to what they're already doing, which is implementing this process and they radically improve the outcome of that transaction. They weren't going down to zero. They were continuously compounding their wealth, which is their cash. No matter what expense came up for them. It doesn't matter whether you are the saver or whether you're the debtor. Both methods will result in permanent transfer of wealth away from you. Every decision you make for the use of money, and it doesn't apply to just the expenses that we're talking about when it comes to real estate. It applies to everything that you're doing today financially. Every decision that you make with the use of money is a financing decision because you either lose interest when you pay cash for things. So if you keep piling cash like a saver, and then once an opportunity comes for you to use that cash, you deplete that cash and you exchange that cash to buy the goods and services, you do accomplish the objective of using cash to buy those goods and services. But all your money has been permanently transferred away from you, that money on that particular transaction. Now you can never use that money again. It can never work for you again. You can never own any interest on that money. So when you pay cash for goods and services, there's cost associated with it. That cost is called cost of loss opportunity. You're losing interest that that money could have been earning for you today. The other way is you borrow money from someone and then you use borrowed money to exchange that money for goods and services. But now you have to pay the lender back principal and interest. So you're also making a financing decision on this transaction, which is to pay interest. So either you lose interest when you pay cash, or you pay interest when you borrow someone else's money. Either way, you're making a financing decision. The decision is either to lose interest or to pay interest. Now the real question is, this is what we get. This is what people come to when, once they, when they look at all this, they come to us to understand, is there a better way? I understand there's a problem. I'm either losing interest, I'm paying interest, and money has been transferred away from me. I wish I had more money. This way I can recycle more money for more goods and services or investments that have to buy. But is there a better way? And the answer is yes. That's why you're here today, to discover a better way, which is the process of becoming a banker. And you all may have received a link to order a copy of this book. This book is 92 pages. It'll take you probably four hours to read it. And then it's going to change your life, I guarantee it. It happens all the time. We have existing clients who come back to us to implement more process, to expand their program. And then one thing that they say to us all the time is I wish I had known this process 10 years ago, 20 years ago. But the real thing is while you're here today, it doesn't matter when you get started. When you get started, that's the best time to get started. The best time to plant a tree was 10 years ago. The second best time is today. So is there a better way? The answer is yes. And that's the process becoming your banker. So what I'm going to do is I'm going to walk everybody through a case study of cash flow management for real estate expenses using the process of becoming a banker. And you can compare how you are doing it presently and how this is going to enhance the things that you already are doing presently. Now case study discussion. So let's talk about Mike. Now Mike, when he got introduced to me, he was age 33 and his occupation at that time he was a retail manager at a retail store. And he was earning about $90,000 in income and with bonuses he was making about $120,000. He lives in Saskatchewan and he wasn't married at that time, but today he's, he's married and he's got a young family. Now he discovered the process of becoming a Banker back in 2016 and, and he stumbled upon this book. A friend of him introduced him to this book. He read this book, he took action, he scheduled a call to discuss how this can be implemented in his life when it comes to real estate. And what I'm showing you today is just one of the ways that Mike is using his system. But there's other things that he's doing. Now back in 2016, Mike had owned two properties. So he had a principal residence where he lived in and then he had an investment property, single family home which was rented. This particular home had a main floor like a upper floor and a legal basement suite. So there were multiple families living in the property. Now this is back in 2016, but since 2016 he has acquired many more properties. He's also a private lender. But just for the purpose of showing you a case study, for the purpose of teaching point, we are just going to focus on one of his investment properties. Now this particular property and here are the numbers on this property. The property was purchased in 2010. The purchase price for the property was $440,000. It's, it's appreciated to high number today. The mortgage payment at that time was 1750 per month. So this was so he had purchased the property in 2010, but he discovered the process of becoming a banker in 2016. So six years after he had purchased this property, now his mortgage payment was 1750 per month and he had a 25 year amortization. His property tax was 250 per month and his insurance was $100 per month on that property. Now as a owner of the property, all he had to do was make sure that the money is there for mortgage payment, property tax and property insurance. The tenants were paying all the utilities associated with living in the property. So investment property. So with a single family home with a legal basement suite and the rent from the top floor, the main floor was nineteen hundred dollars per month. And this is back in 2016 and the basement, he was renting the basement to students for 1100 bucks per month. So that was a pretty good cash flowing investment property. The total rental income, so 1900 from top floor basement was 1100. So total rental income was $3000 a month. Now the tenants covered all the utilities associated with the property. So he water, whatever utilities they were using they were paying out of their own pocket. Now the total rent and income as I showed earlier was $3,000 per month. Now the total expenses as an owner of the property that he had to make sure that he covered was 1750 for the mortgage to 50 for the property tax, $100 per month for home insurance. So if you add all his expenses together and then you subtract the gross cash flow minus all these expenses, he was cash flowing about $900 per month and he had purchased his property with just 5% down payment. So that was a pretty good cash and cash return for him and the property is still producing exactly this, if not more than $900 per month as net positive cash flow. Now once he received the cash flow, because like Jingjing mentioned, all successful real estate investors, they have coaches and Keyspire and we're not here, you know, promoting any coaching groups. But coincidentally he was also part of the Keyspire group and they talk about allocations, making sure that you manage the property cash flow really well because there's going to be expenses that are going to come up and then also make sure that there's money allocated towards capex, which is capital that's required for expansion of properties, more property equity position. And he was very diligent about cash flow management. So he allocated from that cash flow $100 per month towards vacancy. This particular property, he was self managing it so there was no property management that was involved. He allocated 300 per month it was repairs and maintenance. He allocated a hundred dollars per month towards taxes and accounting fee. So if you add up all that, the total was about approximately 500 bucks.

And then his net cash flow was $900 per month and he was allocating $500 per month towards these buckets. So he had about $400 per month as capex, which is capital that he was setting aside for more expansion. Now this is just from the property cash flow, but he was also allocating additional monies from his income because he was producing good, good level of income at that time. And that helped him scale his real estate portfolio. Now when expenses came up for him, because there's no escaping those expenses, these buckets were used to cover those expenses. And once the money was used from the Beckett, the account value will go down, sometimes even all the way down to zero. And you're going to see some of the expenses that came up for him. And conventionally he just wrote check or he just made bill payments and the money was gone. And then when he discovered the process of becoming a banker, he just changed where the money is going to be sitting and then he used the process to accomplish his objective and you're going to see the difference that made for him financially and he was still able to scale and grow his real estate portfolio no matter what. So. So like I mentioned, he was using cash to accomplish all his objectives. And you know, I'm repeating myself because repetition is going to be best practice today. But once he had used his cash, which he was doing it, you know, before discovering ibc. IBC stands for the infinite banking concept. Becoming a banker. So before discovering ibc, he was using his cash to accomplish his objective. And once that cash was used, the money was gone. Right. Now how much of that money was not working for him? Well, the answer is zero. Once the money is gone, it's gone. And then how much of interest is he earning on that money again? And the answer is zero, because once the money's gone, it's gone. And then how much of that money he's able to reuse again? Well, again the answer is zero, because once the money is gone, it's gone, it's permanently transferred away. Not just for him during his lifetime, the money has been permanently transferred away, but also lifetimes on the next generations because now he's got a young family, it's not just him who's not able to use that money, but his next generations to come, they're not able to use that money. It's gone. Once the money's gone, it's gone, it's permanently gone from a lifetime. Now, with the implementation of the process of becoming a banker, he was able to enhance what he already was doing. And he was able to do that without working any harder, without changing his cash flow, without taking on any risk, and without ever losing control over his money. All right, so cash flow management using the process of becoming your own banker. Now he started his banking system back in 2016, as I mentioned. Now before we dive into looking at how he started his banking system and the tool that we use to create your own banking system, and you're going to spend some time understanding the tool, let's just agree that your money today has to sit somewhere to be saved for future use. Your money needs a warehouse. Now your money needs a warehouse. Your money could be sitting in a wallet. You may have money underneath a mattress, you probably have money or lots of money in the bank. You have money in a safe at home. And I don't know if you have money in a toilet tank, but I just put it there just for humor. So the teaching point is your money needs to be sitting somewhere for it to be saved for future use. Now for him, because he understood the process of becoming a banker, he took his money from where it is saving, which is commercial bank, and he redirected a portion of his savings into a participating dividend paying whole life insurance policy, which is the tool that we use to implement the process of becoming your own banker. So we talked about participating dividend paying whole life insurance policy, which is a tool. Now here's some of the attributes associated with this tool. Now first thing first is this participating, developing whole life policy has something called cash values. Now those cash values is your capital. So the moment the money goes in and the money can go into policy, this one in particular, since it's a life insurance policy, the money can only go in as premium. So premium is your deposit, premium is your saving. Money is being saved in the bank as a location to cover those expenses. We just take the money and change the address. Rather than keeping the money in the bank, we keep that money in the policy as premium. And the moment the money goes into policy as premium, it has contractual guarantees. In a participating dividend paying holder policy, there's something called cash value which begins to accumulate right away. And cash value is your capital. And this cash value has contractual guarantees to grow on daily basis. So your cash value is going to grow on daily basis based on insurance companies contractual guarantee which stipulates that by age 100 cash values must match death benefit. So when money goes in as premium, it buys death benefit and the cash value gets accumulated right away. And then cash value has to grow every day to match the death benefit by age 100. That's the contractual guarantee. So if the crypto market goes down, cash values go up. If the inflation goes up, cash value goes up, inflation goes down, cash value goes up, interest rates go up, cash value go up, interest rates go down, cash value go up, stock market goes up, cash value goes up, stock market goes down, cash value goes up. I think you get the teaching point. The teaching point is the cash value growth in this policy is not impacted by what happens outside of the policy. In the financial world. It can only go up because of contractual guarantee. The cash and the policy can never be less than what it is today. Now, once the cash value starts to accumulate, the owner of the policy. In this case we have Mike. Mike has easy access to those policies and control over access to money in the policy. No matter what happens, insurance companies cannot deny Mike access to his ever growing financial pool of capital. And then Mike can access that money to track or capitalize on some high caliber opportunities. And we're going to talk about in a bit how he can access the capital. There are two ways he can access capital. I'm going to talk about both ways. One is better than the other and you'll know why. Now, in a participating dividend paying whole life policy, Mike is not penalized for accessing money earlier, like how someone is when the money is sitting in rrsp. Because policy is not a registered account. A policy is a private contract between Mike and insurance company. There's no government intervention, there's several tax advantages. Because as that cash gets accumulated and the cash is growing, the growth in the cash is tax free. That money will never see another dime of tax no matter what. And the policies can be done personally, corporately. So if you have investment properties in your corporation or personally, and you're allocating funds to cover some of these expenses, those funds can go into policies, corporate policies or personal policies and can be used to do exactly what you're doing. It's just going to be better. Now the policy also provides a tax free death benefit. See that 10 years from today, there's two possibilities. Number one is we are alive. If we are alive, we're going to be fine. Just by having that cash value grow every single day no matter what, and having access to the cash for high caliber opportunities if and when they track the other possibility 10 years from today is we're gone, we become an angel, we graduate. We don't use the word debt, we prefer the word graduate. And in case my graduates, there's boatload of tax free death benefit that's going to come walking in for the family because that's when the family needs the money the most. So if he's alive, he's going to be fine with the cash growth and access to cash. And if he becomes an angel, well, the family is fine because of tax free death benefit. So this is what he was doing conventionally to manage the cash flow on his property. So as you can see, the allocations, I'm just repeating it just because I want to make sure that it's fresh in your mind because we're going to dive into how he changed one thing in what he was doing, which is he implemented this process and it enhanced everything for him going forward. Now, one question that we get asked is, okay, I understand we have to put premium in, but where can the money come from for premium? So now you can see for Mike, where did the premium come from? So the owner's usable cash, which is the $400 per month which he was able to set aside for cap X, which is capital for expansion after doing all these allocations. So he took that money to start a policy. That's his first policy which was started early 2016. Then he took the monies from vacancy allocation and taxes and accounting fee allocation, which is 200 bucks per month, to start another policy. So he did two policies in 2016. One was 5,000 per year, which is approximately $4 per month, and the other is 2,400 per year. So it was two separate policies. One he did beginning of the year and the other was more later, towards the end of the year. And you're going to see that in a bit. Now he discovered ibc, the infinite banking concept, which also stands for becoming a Banker back in 2016. And then his first policy started in May 2016 and his premium was 5,000 per year. This is that $400 per month which he was setting aside for Future acquisition. So 400 bucks per month, multiple 12, rounding it off, that's 5,000 per year. That's what his first premium was. His second premium was 2,400 per year. This is from the allocation for vacancy and tax and accounting fee. He took all that money and he started a policy. So he didn't change his cash flow because he was already setting aside money for those allocation. He just changed the address of that money instead of Having that money sit in a bank checking account as a deposit, he's just depositing that money as premium in a policy. So combining both, that's $7,400 per year as premium. Now, in this particular policy, Mike was the owner, and Mike also was the life insured. So it's a life insurance policy. So starting death benefit on the first policy was 166,753. Now, how do I know that number? Because I'm the advisor on this case. That was the starting death benefit. And the second policy, the starting death benefit was $81,372. So if you add these together, that was his death benefit on whole life policy. Now, the way we design policies is the death benefit will increase every year. Now remember, the contractual guarantee in the policy is cash value must grow every day to match the death benefit by age 100. But the way we design policies is every year your death benefit increases. So when your death benefit increases, your cash value growth must accelerate. Because the contractual guarantee, which is by age 100, cash values must match death benefit. That contractual guarantee still has to happen. But if you keep increasing death benefit every year, that must grow cash values even more. Now, this was not enough when it comes to death benefit on him because he had a lot of debt. So we added a term insurance rider on one of his policies to get him some additional death benefit. That's just to meet his need for insurance. That term insurance has nothing to do with the process of becoming a banker. We, being life licensed, we have a duty of care to calculate how much insurance you need from estate planning standpoint. So we added that extra benefit just to meet his need for insurance. God forbid something was to happen to him as he was young. And now that he has a young family, he has an even higher need of death benefit. Now, what you can see is his daily cash value growth just in the first year. So there was some cash value accumulation immediately as he put in the premium into policy. But that cash value kept growing every day, and just in the first year. And I say just in the first year because as of today, today's 2022, he started the policy back in 2016. So six years later, his daily cash value growth is much more this year than what it was in 2016 because his death benefit is much higher this year. So when death benefit goes up, your cash value growth becomes better. And every year your death benefit goes up in the policy. So just in the first year, the first policy that he started, the daily growth was $2, 10 cents. And the other policy was a dollar and 10 cents. So every single day, just in the first year as he woke up, he got one day closer to age 100 and his cash values went up by $3.20. Now, we talked about access to capital when it comes to this policy, which is cash value. So there's two ways to access capital, no different than accessing money from a bank. One method is he can withdraw his own cash value out if he wants to use his money. It's called withdrawal. And all he has to do is just call the insurance company, do some paperwork and say, hey, I want to withdraw this much portion of money from my cash value, insurance company will give him the money, no questions asked. But ask yourself this question. If he withdraws the money from cash value, which is growing in value every single day as he ages, because insurance company is fulfilling their contractual guarantee, which Is by age 100, cash values and death benefit must match. So every day he's aging, his cash flow is increasing. But the moment he withdraws that money, that growth will get reduced or even stopped. Because he withdrew the money, he stopped the compounding of the cash value. So when he accesses his own money and he used his own money, his objective is accomplished, but that growth in cash value is disappeared. It's gone. It's not happening anymore. So when he accessed his own money, he didn't have to pay any interest to use his own money, but he lost the growth and the interest on the cash value for time to come. So remember, every decision we make with the use of money is a financing decision. So if he withdraws money, he's making a decision. The decision is not to earn any growth or interest on that money ever again. So withdraw is one method. The other method is something called a policy loan. Now, policy loan. Yeah, you're 100% right in understanding it. It's a loan policy loan. Insurance companies contractually allow a policy owner to access money from the insurance company as a loan against the cash value. And what you can borrow as a loan against cash value is 90% of cash value. So loan to value is 90%. And there's no qualification. You're going to see some criteria. You just have to send in a page of policy loan requests and the money is going to show up, no questions asked. Now, when you access money as a policy loan, insurance company is going to use your cash value as collateral. Let's just say if they wanted to access $10,000 as loans, it's using that as example. 10,000 of his cash value will be used as collateral, meaning he cannot re access that money until he repays the loan. But all his cash value is inside the policy, growing every single day uninterrupted, because he's accessing money as a loan against an ever growing pool of capital. He is not withdrawing his own money. And then I know questions are coming up. Questions regarding, hey, good, I can access loan, but what's the interest? Well, you're going to see that in a bit. So obvious for him, withdrawing is a no no, because withdrawing stops the compounding. The way he accessed money is a policy loan. And we're going to show you, walk you through what it takes to get a policy loan. What's the process like and what the interest is, and compare that with what the growth is and see if it even makes sense to get a policy loan. So policy loan process. So it's a single page document that's required. And the input on that single page document is as follows. So Mike had to put in his name, he had to put his policy number. He had two policies, one with 5,000 per year in premium, the other one was 2,400 per year in premium. And he could access loans from both policies at the same time if he wanted to. He just had to put in the amount of loans. So what he can borrow is 90% of his cash value. So from how many dollars, which is the minimum that insurance company would issue as a loan, to up to 90% of his cash value, he can request whatever he wants. And then all he has to do is on that form just indicate how he wants to receive that money. If he wants to receive that money via check, he just puts in his. An insurance company will mail a check to him via Canopost. And if he wants to receive that money as electronically fund transfer, then he just has to send in a copy of his banking information like a void check or direct deposit slip, and they will automatically, within five to 10 business days, deposit the money directly into the bank account. And then he has to sign the loan form and date it. And that's it. That's how one requests a policy loan. So there's no income verification, there is no credit check, there's no questions regarding what you need the money for. There's no questions regarding when are you going to pay us back? Because once insurance companies contractually guarantee the policy loan and then they cannot force you to pay back a loan because the cash values and the policy were used as collateral for the loan. And the lien for the loan is his future dead self, which is his death benefit, which they contractually guarantee to pay the family when he's gone. So if there's any policy loans outstanding, it'll just get deducted from his death benefit when he's gone. But Mike is in total and in absolute control to pay back his loans when he wants to. He can set up his own amortization. And as he's accessed money as a loan, his own cash in the policy never stops to grow. So let's look at some important facts on policy loans. So outstanding policy loans do not impact daily cash value growth. That cash value continues to grow because insurance company is on the hook to fulfill that contractual guarantee. There's death benefit on the policy and outstanding policy loans doesn't reduce the death benefit while he's alive. If there's any outstanding policy loan and death occurs, the insurance company will deduct any outstanding loans against the death benefit and the family gets the remaining money at that time. Outstanding policy loans do not impact his future dividends. Now this policy is called participating dividend paying whole life policy. So the word participating dividend paying means by virtue of him owning this policy, he participates in the profits generated by the insurance company and that profit is shared by the insurance company with him as dividends. So if he has outstanding policy loans, those loans do not impact his future profit called dividend. And here's the best part, which I'm sure you as real estate investor, you are probably going to jump off your chair when you saw this. The outstanding policy loan doesn't show up on credit report. The loan is a private arrangement between you and the insurance company. It's not reported to TransUnion or Equifax. So keeping things private as an investor is important. If it's not private and we have loans outstanding, well, guess what? It takes away the ability to leverage and borrow. So policy loans do not show up in credit report. Now at that, any outstanding policy loans gets deducted from the total death benefit and the family gets the rest of the. Now let's look at a transaction. So this is the. So he started the policy in 2016. And again, you know, Jingen mentioned we can plan for some of the expected expenses. There's no escaping it. Those expenses are going to come so immediately. In 2017, he had an expense of $2,500. He had a messy tenant and you know, I'm sure as an investor you probably have experience that I have personally. So in 2017 he had to do some repainting, some cleanup and all that. Definitely cost some money. So it was $2,500 for him. Now, if he had been doing things the conventional way, which is he was setting money aside into a bank checking account to cover for repair and maintenance, he could have easily accessed money from his bank account and paid someone to do all this for him. And $2500 would have been used, but his bank account balance would have gone down, and the money's gone. Now you're going to see after implementing the process of becoming a banker, what changed for him and how he enhanced everything what he already was doing. So I'm going to share this with everybody. So first policy loan and the expense was in 2017 for $2,500. Now, he started the policy in 2016. So you started two policies. So 5,000 per year was premium on one, and 2400 per year was premium on the other. Cumulative was 7,400. So in 2017, what you're seeing is the total cash value combined in both policies. So his cash values are over $8,000 in 2017. So that's his capital call. His cash value and what he can borrow against it as a loan is 90%. So 90% of 8,000 is $7,200. And he needed about $2,500 to cover this expense. So there was more than enough money in the policies to cover that for him. Now, his daily cash value growth in 2017 was $5.30 per day. Now, if you recall, in 2016, his daily growth was just over $3 per day. But in 2017, a year later, it's $5.30 a day. And the reason why, because here he's a year into policy, he's got more death benefit in 2017 than what he had in 2016. So the Daily cash value growth become better because insurance company is still fulfilling his contractual guarantee, which is by age 100, cash values must match his death benefit. But the death benefit went up, which means the cash value must accelerate now to match the new death benefit by age 100. So every year you're going to see that your daily cash value growth becomes better. So back in 2017, it was $5 and 30 cents per day. Now, one question that I get asked all the time is, hey, how do you know what his daily growth is? Well, because being the advisor for him, I can look at his numbers today and I can look at his values the very next day, and the difference is daily growth. So he initiated policy loan for $2,500, and he got the money directly deposited into his bank account. Now the daily interest because he's accessing money as a loan. Now back in 2017 the interest from the insurance company was simple interest at 7.5%. Now you may be wondering that pretty high. Well rate is a rate, interest rate is an interest. It doesn't matter. What matters is what happens after he borrows the money in the policy. So let's look at that. So daily interest charged by the insurance company is a buck 49, almost 50 cents per day. How did I calculate this number? So $2,500 is how much he borrowed. So 2500 multiplied by the interest rate 7.5% and that's for the whole year. So if I divided by 365 because a simple interest is charged on daily basis. So 2500 multiplied by 7.5% divided by 365. That's the number. 49 cents per day. Now if you look at his daily growth, $5.30 per day, that growth did not stop because he took a policy loan. So you can see that he recaptured the interest charged by the insurance company on daily basis in the growth of his policy. So how does the interest matter to him when he continues to make $5.30 per day as growth in the policy and he has to pay insurance company $0.49 to use their money? He's way ahead. And not just that. Once he pays back the interest to the insurance company, that interest became profit for the insurance company which is profit for anybody who has a participating dividend paying whole life policy and that profit gets distributed to us as dividends. So he's adding financial energy by paying interest back to a business that he co owns. But if you look at it on daily basis, his daily growth is $5.30 and interest is 50 cents. Now when he took that money from insurance company he was able to do exactly what he wanted to do for his property, which is painting and some minor cleaning and repairs. Whatever it was, he was able to get his objective accomplished. So he didn't change his cash flow because he was saving money. He started saving money in a policy as deposit versus the bank. He was able to access money to accomplish the objective and he was still growing his cash. And the interest charge is 49 cents and the daily growth is $5.30. Now when he took that money as a loan, insurance company didn't force him or didn't come after him to pay back the loan. He decided to pay back the loan at 216amonth over 12 month period because he decided the amortization to be 12 months. So he did the math. He said, if I have to pay back $2,500 and it's charged 7.5% and I have to pay back in 12 months, what should be my monthly payment? While his monthly payment is 216amonth, he decided that payment. He's using the net cash flow to pay the premium and the loan repayment. Now he decided that payment, it could have been over 24 months, 36 months. He can reduce his payment, take a vacation from this payment. He is in total and absolute control to pay back that loan. But if he had borrowed that money as a debt, well then guess what? Someone else would have controlled that transaction. But in this case, he's the one controlling the transaction. Now let's just summarize what transpired. As his cash values were growing and he was paying back the money to the insurance company says monthly cash value growth is $159. So basically $5.30 multiplied by 30 days, that's $159 in growth. His monthly loan repayment is 216amonth. He decided that the monthly interest is $14.70. So if you just take dollar sorry, 49 cents multiplied by 30, that's $14.70. That's the monthly interest. So let's look at the transaction. So $216 per month as loan repayment, $159 in growth, $14.70 in interest. Because as he pays back the policy loan, a portion of that goes towards the interest which he cannot reaccess, but he can certainly access the growth in the policy. So he pays back to 16amonth, the growth is 159. Interest is $14.70. His net access is $360. So think about it. Where else can he pay back $216 as a loan repayment and immediately create access to $360 again to reuse and recycle that money in case something else shows up for him as an expense. So again, where else can you pay back to 16amonth and immediately build access to 360? So now he's enhancing everything for him going forward. That loan repayment on a policy immediately became an asset for him because it's creating access to more capital. And the reason why that's happening is because when he borrowed that money from the insurance company, it never interrupted the growth of its own cash, called cash value in the policy. He became a wealth creator. So this green line is your cash value which is increasing in value every single day as you age. And when you need access to capital, you're able to borrow against this capital as a loan. Now you see this red line? That's a transaction loan. It doesn't indicate that the cash value has gone down. It's just showing that when you borrow money, you know, from the insurance company, there's a debt. But the debt something that you own and you control and you can decide when to pay back the debt. But when you pay back the debt, you can re borrow more than what you had initially borrowed and more than what you're going to pay back. Because you're paying the debt back into an ever growing pool of capital and you control and own that debt repayment 100%. You can set your own terms of repaying back the loan. And God forbid if that debt was not paid back to the insurance company, there's boatload of death benefit tax free that's going to come walking in when he walks out of planet Earth. So he doesn't leave any indebtedness behind for his family. So this was before, this is what he did before. He was a saver. So he was saving money for those cash flow using the cash flow from the property, he was saving money for the expenses that are going to come up for the property. And when he had enough money, let's just say an expense came up, his account balance will go down and he would rinse and repeat that process. He was still accomplishing the objective of maintaining property and scaling his investments, but all the cash was gone. Now by doing it this way, which is the wealth builder way, he's still able to do exactly what he was doing before, but he just enhanced everything for him financially. Because when he repays the loan back, he's able to not just re access what he paid back, but more than that and more is a good thing right now here are some other expenses that he financed using IBC. So from 2016 till 2022, here's other things and this is just on that particular property, the first one that I mentioned was on that repair and cleaning expense that came up in 2017 for 2,500. In 2018, his water tank and for the basement suite broke and needed to be replaced. And that was $5,000 in 2019. Coincidentally, the water tank for the main floor also broke because the property, he had bought the property since 2010. So it was time to replace those anyways. And that was another $5,000 in 2020. Me as an investor, I experienced this. I'm sure you Must have experienced this. Also there was vacancy because of COVID And he had to cover about $4,000 few months of payment that was financed from the policy. And in 2021 there was some replacement of doors, carpets and floor that was $2,000. So if you add up all those expenses from start of 2017, because that's when the first expense he financed from the policy all the way to 2022, if you add up all that expense that was 18,500. And all that was financed for the first two policies that he started. The premium on first one was 5,000 per year. The premium on other one was 2,400 per year. Now 18,500 plus interest. That was the policy loan and the cost of borrowing from the insurance company. While his cash in the policy kept grow. Now that financial energy, because money is what money is a tool. But it's also a financial energy that we pump towards financial institutions. So that financial energy he could have pumped that money towards the bank. But he took that money and he pumped that financial energy towards the insurance company principal and interest repayment. Because he's a cult owner of this insurance company. Because he has a participating dividend paying whole life policy. And anybody who has a policy like this becomes a co owner of the insurance company and participates in divisible profits called dividends. So he could have transferred all this financial energy away from his family permanently and not benefit one bit. But he chose to keep that financial energy in his family. Because anything that he repays back as loan he's able to re access more. And then he's also transferring that energy into business that he co owns with other participating owners. Because he's going to share in profits as dividends. Now if you Fast forward to 2022 as of today. So this was his first policy. So Mike and his family, because now he's got a family, he's married, he's got children. So his first policy was 5,000 per year which he started in May 2016. His second policy as I shared with you was 2,400 per year which is August 2016. When he started that he started third policy with $20,000 per year. And this policy, the allocation of premium from this policy came from his earned income. These two were from property cash flow, these three as far as earned income. So $20,000 per year started in March 2018. He got mad and started policy on his wife Jackie. September 2018. They had a daughter, daughter was born 2019. The policy was started March 2019. Mike owns all these policies. The Last policy is on his daughter. So $5,000 per year was the premium. So what he did was they were willing to allocate about a couple of hundred bucks per month, but they were also getting about a couple of hundred dollars per month as a child tax benefit. So they took the child tax benefit and basically matched it and then started a policy for the daughter. Now they're able to access money from all these policies to acquire more properties. Now they're also in private lending. You're going to see that example in a bit. So now they build up more capital in the policy and ways to finance things from the policy going forward for themselves. Now becoming his own banker, Mike created wealth not just from real estate investment, which he still continued to do using his policy loans, but also on the transactions of that money that he needed to spend for managing his real estate. Because before this those transactions were just leaving his family forever. He wasn't making any profit. He couldn't have reused that money. It wasn't earning any interest for him. But just by adding this process in his life, he didn't change his cash flow or work any harder or lose control over access to money. He just added more efficiency and enhanced what he was doing from those transactions standpoint. So he wasn't doing things one dimensionally, which is just buying real estate. He was actually doing two dimensionally buying real estate and building cash wealth at the same time, which is his banking, his financing wealth. Now Mike's family banking System. Now in 2022, total cash value. So he has no upselling policy loan because he sold a property and then he had some outstanding loans. He backfilled all those loans by selling the property. Anything that he put back into policy, he's able to reaccess again. His total family premiums are 41,400. So if you combine all the premiums that he's making to his family policies on him, his wife and daughter combine, all these are personal policies. 41,400. Now here's something interesting. He puts in 41,400 in 2022, but his cash value growth from 2022 to 2023 is now $45,406. So he's producing more growth in cash value than his premium. And this is where Nelson talks about thinking long range in his book called becoming your own banker. And he's saying don't be afraid to capitalize because policies are going to produce this momentum for us going forward in a matter of six years or so. The policy is not producing more cash value growth than what he's putting in his premium. More growth means more access to capital to do more great things. And that's just 2022 to 2023. From 2023 to 2024, it's just going to get better. So think about this. He would have saved this money in a checking account and he would float that money from his bank checking account. If he would have continued flowing this money from bank checking account, 41,400. All he could spend is 41,400 just by redirecting that money because money has to flow and prioritizing putting that money in a policy as premium. Now he's not able to spend just 41,400. He's able to access 90% of 45,406 as a loan, which is more money now. And it's just going to get better every year. And let's not forget that his death benefit is $1.7 million. So if he dies, his family is going to be just fine. And if he lives a long life or great what, guess what, his cash value is going to keep growing and it's going to exceed everything in terms of premium and he's going to have access to more money to finance more things. Maybe at some point, if you look at this today, 169,531, he's in Saskatchewan. If he wants to buy a condo, he can actually take a policy loan and buy a condo and own it free and clear. It may not happen in Ontario, but in Saskatchewan or other provinces. Yeah, you can do that. Now as he kept building the cash in his policy, all he did was just change the process. He added one thing to what he was doing. Instead of having that money flow through a bank, he just chose to flow that money through policy. So he had access to more high caliber opportunities because more cash became available. And this is one of the other opportunities that came up for him because he started as a real estate investor in he had a vision what he's going to do going forward from recent investment. Now he's also capitalizing on some private lending joint venture deals with other partners. And he's just a money partner now. Now this deal came up for him in 2022 and then one of his JV partners wanted access to $50,000 and it was an interest only loan for six months. So here's what he did. He called the insurance company, got $50,000 from the insurance company, gave his JV partner the $50,000 and then this loan was made for six months. Now during that six months as he took policy loan and put insurance company's money to work. As his money in the policy continued to grow and compound, he wasn't paying any loans back to the insurance company because he wanted to wait until he got all the money back from a JV partner and then pay back his policy loan. Now interest charged by Mike. So Mike is the lender, his JV partner is the borrower. So Mike is lending him at 12% per year, so annually 12%. But he's getting paid on a monthly basis. So he's basically making 1% per month on this loan. So $50,000 at 12% but getting paid on a monthly basis, that's $500 per month. Just interest payment that his JV partner was making was just giving back to him every month for 6 months for the use of 50k of Mike's money. Now Mike's daily cash value growth and the policy, the particular policy that this loan came from was $30 a day. And again, how do I know that number? I can look at the policy today and I can look at the policy next day and the difference is the daily growth. So daily growth is 30 bucks per day and over the month is $900. Because 30 multiplied by 30 days in a month. Assuming 30 days, that's 900 bucks. The daily policy loan interest is $8.49. So 50,000. Now in 2022, the interest from the insurance company is not 7.5% anymore, it's 6.2. So 50k multiplied by 6.2% divided by 365. This is the daily interest and $254 is the monthly interest charged by the insurance company. So you can look at his daily growth, 900 bucks and daily interest, 254. If I say to you today, give me $254 for every $254 you give me, I'm going to write to you check for $900. How many times are you going to give me $254 today? Now think about it. Probably all day long and twice on Sundays, right? So no principal or interest was repaid to the insurance company until that loan was outstanding. He was just collecting his monthly interest only payments. Principal outstanding after six months was $50,000. Policy loan interest outstanding after six months was 1529. Because he wasn't paying any interest back to the insurance company. Total profit from private loan, 50,000. Plus the $3,000 that he earned in interest on private lending. So total money that he got back in 6 months was $53,000, 50k principal, 3000 profit. Total policy loan balance of the insurance company is $51,529 which is basically a combination of these two. He took 53,000, paid all the policy loan back. After doing all that he had 1471 in extra cash. And the moment he paid the policy loan back he was able to re access 53,008,71 from the insurance company again. So think about it, where else can he repay 51,529 and have access to $53,871. Now he's got access to more than what he repaid more means. Now he can put this money to work which is more more profit will be made and he can also put this money to work. But if he's smart, which he is, he's going to take this money and crank up another policy and he's going to funnel money again through another policy. He's not going to change his cash flow, just change the process of funneling and flowing his money. The family banking potential for real estate and Jen, Jen, if I may ask you to join me for this.

Hello.

Family banking potential. Think about the things that you have spent money when it comes to your property management. So things that we can think of which we were doing before conventionally and still doing all that is property insurance, management fee, accounting fee, property taxes.

Renovation, roof tenant vacancy, furnace, toilet, plumbing, hot water tanks, landscaping, gifts, repair fees, appliances, decks, snow removal, you know, pest, private lending, down payment for future properties, future property acquisition. To think about all the transactions that you presently have made when it comes to managing and building your real estate wealth. Think about all the money that you spend. Just take a minute, close your eyes and think about this transaction and get a rough number in your mind. It's probably in thousands of thousands of dollars. Now can you today write me a check for all the money that you spend on above transaction and if the answer is no, and that's probably because all the money is gone, whereas Mike would not have that issue because he had all the money growing and he's going to pay back all the money back on his terms, he's going to get all the money back and he'll be able to reuse more than what he repaid and all he did was just change the process. He didn't change his goals, objectives, cash flow, no risk was taken on just change the process. That's all he did. Like I said, all you got to do is add one extra step to what you're already doing and you radically improve the outcome.

Exactly. Awesome.

Now we talked about real estate. We talked about examples on cash flow management and expenses. Now I'm going to talk about just the insurance policies by itself. Now let's assume so his total premiums and his policy of 41,400. Now let's assume that he only pays premium till age 65 or between age 65 and age 67. And after that he stops putting money in. Policies can be easily put into offset mode at that time, even before that. So total premium that he would have put in is 41,420 years. That's $828,000 in just premium Mike can spend at retirement. And I'm not talking about what he can get from the real estate investments, I'm just talking about these policies that he has. Real estate investments is in addition to this, Mike can spend tax free $112,063 per year from age 65 to age 90. And I'm just going to kill him at age 90, assuming that death occurs at age 90. So he puts in $828,000 over 20 years. He's able to spend tax free. So I'm emphasizing on tax free because loans are tax free. So if he has other sources of taxable passive income at that time, this money is not going to change his tax bracket because it's a loan.

And insurance companies cash value just used as collateral. And the loans are going to be paid at debt using the death benefit that insurance company has a lien on. Now cumulative amount from all policies, so 112,063 multiplied by 26 years. Because from age 65 to age 90, that's about 26 years that he's able to access money. So 112,063 multiplied by 26 Years, that's 2, $2.9 million that he was able to spend at so called retirement time or passive income time tax free just from his insurance policies. Nothing to do with real estate. Real estate is in addition to it. So how did he do? Just if all he did was did the policies and nothing else, I think he did pretty good. But in addition to doing what he was going to do at retirement using these policies, he was able to borrow money from the policies today and still capitalize on the things that he wanted to to capitalize on. So it didn't take away any of his options. In fact, it just made things better for him. And again on this, I'm not considering any extra cash flow that he has from Real estate that's just an addition to it and I'm not even showing you any death benefit. I'm just talking about all the living benefits and the policy so far. Jenjin for this I'm going to pass it over to you.

Yeah, as real estate investors that you are, you might be Robert Kiyosaki's fan. It is not about how much money you make, it is about how much money you keep, how hard your money is working for you and how many generations you keep it for. I think this is one of aha moments and this what IBC can do for you. What I recommend is that go to the introductory webinar and schedule a call to spend speak with one of our world class advisors who are authorized infinite Banking practitioners. Text the word schedule to 780-809-4599 and schedule time and speak with one of us because we talk very in general we talk about Mike's situation but each one of you have your unique situation and you wanted to just discuss with one on one coach. And we're not even fee for charge. We don't charge anything, right Sarvlo yeah.

We'Re not a fee for service. And one thing I would share is for that meeting, don't bring any money. There's no money required. What we want to talk about is how this can be best applied in your particular financial situation that Jingen mentioned. Everybody is different. Everybody has different goals, different lifestyles that they want to maintain. So the purpose for this meeting is to have much more expanded discussion on that and also to make sure that we are actually good fit to work with you. If you want to feel comfortable working with us, we have to feel comfortable working with you. Because.

Policy is just a tool to get the job done. The real value that we add to our clients is once the policy is in place, it's the execution of the process and for that particular role, it's a lifelong relationship. So we want to make sure that whose role we take on as a client, it's a good fit for them and want to make sure that this is a good fit for you also. And if you're an existing client and you know you want to talk about how you can expand your program to do exactly what Mike did, well, schedule a call with a coach and have that discussion with your coach on it. So again text it what's scheduled to 780-809-4599 and then you get a link and you can click on it and schedule a call based on your convenience. Your Availability.

So just have a flavor of when you go watch the introductory webinar regarding this process, because today we just went on a very extended content specific for real estate. But do you believe in compound interest? Sarvo has showed us a lot of examples, a lot of numbers today. This is a very extreme example. I'm assuming that. Look at this calendar. I'm doing very extreme. We're assuming that every day we're just putting $0.01 into this calendar for 31 days within this month. And we are assuming that your one cent is doubled every day. So the second day you get four cents. A third day you'll get four cents and goes on and on at eight and all that. So my question for you, real estate investor, is how long does it take for your $0.01 to compound to $20,000? How many days does it take you to compound to $20,000? It's 22 days, right?

Yeah, 22 days.

And my question is, how many days does it take to get you another $20,000?

One day.

One more day. But real estate investors, unfortunately we have to replace the roof today. We have to spend the $20,000. We have to do some renovations today we have to spend $20,000. What do we do? Usually we take all the $20,000. And if we take out withdraw the $20,000, what would happen on the 23rd day? Let's see it. We're getting $0.01 again. And until the 31st day, we're back on that road of compound. We're back at $2.56. Whereas before, if you can leave your money uninterrupted compound growth for the 31st day, you get over $10 million. And my friend, that is one thing that resonated with me is not about the rate, it's about the process. It's about the uninterrupted compound growth. Of course, it's a very extreme example. We're not getting doubled 100% return on your income. But this just shows what is compound interest.

Yeah, I would just say, you know, let's not just focus as recent investors on just compounding wealth on real estate, which is good, but let's change the way we think and also add focus on compounding or cash, which is required to build wealth at the same time. Right.

And what happened to the compound factor on the cash if you hand it over to the bank?

So if you have money checking account and you use your money to buy the things that you need, you stop the compounding or growth of that money. Right.

And any interruption on compound Interest on compounding is permanent. What we did is we constantly kill the growth, compound growth. We constantly do that. But what would happen if you have it changing a different process through this process, through becoming your own banker, the infinite banking concept. What happened to your compound factor on cash value? It just keep company, keep growing uninterrupted until the end of time. And Albert Einstein said this. But compound interest is ace wonder of the word. He who understands it earns it. He who doesn't pays it. So I really want to emphasize on the pay that because if you don't understand, it's not that you don't earn it, you have to pay it because money has to reside somewhere, right? Someone has to have that financial energy. And Jason Low, who is a founder and also one of our team member here at Ascendant Financial, he said that uninterrupted compounding cash value is a nice wonder of the word. And it is indeed. So my friends, text the word schedule to 780-809-4599 and schedule a call with the advisor. You will not regret it. And yeah, thank you so much for being here. Now I know that I mentioned a little bit about, you know, HGTV and Keyspire. That's not the point, guys. You could learn from YouTube, you could learn from podcast, because one of the core value here at Ascendant Financial is empower with education. But it's very, very important that you schedule a call and have a one on one conversation with a coach. You know, when I started to invest in real estate, I did join every real estate investment club that I can. Keyspire Real Estate Investment Network, Rain Rich dad for this book and local clubs as well. But when I find out about the process of becoming your own banker, I also read all the books that relate with this topic as well. Because do you believe in education? Do you believe in training? You know, in real estate we have this cliche saying that, you know, any mistake that we made in real estate is very costly, isn't it Sarvalo?

100% been there myself.

So yeah, so you don't want to make mistakes. So that's the power of coaching, that's the power of mentoring and that's what here at Ascendant Financial we can provide for you.

How would you finance the policy premium since there is no cash flow?

I've had an opportunity to connect with some investors who were just struggling with cash flow. But at the same time I would say that we're pretty good at finding cash flow also. So I would say that discussion is more one on one where we look at your personal financials and we take a deep dive into it and we find opportunities and if we find one, we'll let you know how and why and then if it makes sense to you, then you can go ahead and implement it. But I would suggest schedule that call and have a one on one discussion and that's how truly we can answer the question for you.

If he sold the property, then he no longer have any cash flow, how would he keep on going financing his policy?

So, so, so if you sold your property, you have influx of capital which is windfall of money and that money has to go somewhere so that money can be staggered into policies. And the way the policies are designed, again we have to meet and have a little bit more expanded discussion. But the way we design policies, after five to six years, the premium is optional, the policies can go on its own. But that's not the point.

You have the option to continue putting the money in, you're just not required to. But if you continue to put the money in, the better it's going to become going forward. So the answer to your question is yeah, you're going to receive a windfall of money and that can be staggered into policy or a period of time. And again schedule that call and that will be the best way to really look into your personal situation and really give you an intelligent answer.

Do you provide any advice regarding minimizing taxes?

When money goes into policy, and I'm talking about personal policy, that money will never see another dime of tax again. So speak about minimizing taxes. I'm giving you option where you don't have to pay any taxes. Right? So that money will never see another dime of tax again. Because cash value growth is tax free, death benefit payout is tax free. And the way we structured the policy from dividend standpoint, that is that growth from the dividend that you're going to have in the policy is also tax free.

But yeah, we have a CPA on our team, his name is Henry Wong and, and that may be a discussion that you want to have with him, but if you already have a good cpa, have that discussion with him on taxes. Because a CPA would be the best person to ask a question. But when it comes to policy, there's never a dime of tax that you would ever pay on the growth of the policy going forward. Never.

What happens if someone puts a million into a policy? No monthly payments, can they still take a policy loan from it?

Maybe they're Referring to single premium policy, where they say, you know, I got a million dollars, I'm going to put one lump sum in a policy. Well, there was time when we could do that, but unfortunately we just cannot do one single premium anymore. Based on how the policies are designed in Canada, we have to make sure that the premiums come in at least. Again, I'm just speaking generally. We have to dive into really your situation to answer the question clearly. Want to make sure that premium at least comes for five to six years. So we stagger that money over the course of time.

What happens if Mike loses his job and could not pay those premiums every year?

Well, who's paying the premium by the way?

Renters.

Renters. Or his first two policies. That's coming from his cash flow from properties, now the other premium. So there was 20k premium that he did on him and then there was $9,000 on his wife and 5,000 on his daughter. That is from family income. So if Mike loses his job, well, great, his wife is still working. They can sustain it. They can reduce their premium to what works best for them and then bring it back to what the amount was. So there's a lot of flexibility is built into it. They can take a policy loan and cover their premium. They can use a dividend and cover the premium. Because when life happens, in situations like this where someone loses job or they're in between jobs, it's a temporary setback. Won't you be glad that you actually have access to capital to continue building the asset versus having no access to capital to do anything, Anything that you own and you control. When life happens, you'll be glad that you have something that you own and you control. When life happens and you have a mortgage payment, what are the options? I would suggest getting a copy of the book. If it's a 92 page book, takes about 4 hours for you to read it. And if you order today, it'll be in your mailbox in the next 48 hours. And when you go through this, you'll be glad that you did that question. Answer to the question is actually Nelson's book also and it provide you more clarity on much more than what we were able to cover in just short 90 minutes today.

What is the benefit of multiple policies?

It would be okay if I invite you to answer the question?

Well, sure, it's. I can answer that, but I know your answer would probably be better. But so really, you know, what happens in life is people end up with multiple policies because when they first learn about this process and they first want to start it, they probably can't start a policy that's going to be big enough for their need for finance for the rest of their life. Now, if you could, and that would be the exception rather than the rule, most of the time you can't even get that much death benefit on your life at the start. So it takes time. And people build multiple policies for a lot of different reasons. But it's usually as more cash flow becomes available, they start another policy. If they're in business and they're in business with someone else as a partner, they may start a policy on someone else they're in business with. There's a lot of reasons why people have multiple policies. I always coach people, well, start where you're comfortable. And then as you get used to the process in the system and if you have more cash flow, that's the time to start the next one. When you don't have enough room to put all your cash flow into a policy, well, that's a good time to start another policy. So there's a lot of ways to answer that question. But the benefit of multiple policies is just that, you know, if you could do it as one, it'd be great. But I just don't come across where most people can do it with one. Because your need for finance is a lot greater than throughout your life than you're ever going to be able to finance or start in one policy.

That's a very good answer, Dan. And if you think about it from bank's perspective, you know, when banks become profitable, they open more branches because they cannot get everything done in just one branch or with just one unit. So when we become profitable from cash flow standpoint, we open more policies which are more branches. It's as simple as that. It's impossible to get everything done in just one policy. That's why you have to expand it. Because we cannot expand the policy that's only in place. It's just not possible. And majority of your clients end up doing multiple policies in a matter of year one, no later than year two. You saw Mike, he started in May and then in August, he was already adding another policy because he knew he had to capitalize. He had to grow his system to do the things that he wanted to do going forward because he understood if he spent his cash, money is gone, and if he borrowed money, the money is gone. He wanted to do everything from his system. So he got to build it. We got to build to a point where it's going to accommodate all the needs that you have for the purpose of financing, it's not going to happen overnight. That's what we said. It's not a quick rich get scheme. And that's why real estate investors love it, because it's all about delayed gratification. And you'll be glad that you did. If you look at Mike's Premium today in 2022 is 41,400, but his cash fleet growth is $45,000. Looking back, he's probably giving him a pat on his back saying, I'm glad that I started it when I started it.

Is the interest collected by the insurance companies on policy loans returned in dividends?

Well, everything in terms of interest and other things that they invest their money into, all that becomes part of the profit. And at the end of the year, the profit divisible profits gets distributed to policy owners. The profit distribution is based on your divisible share, which is based on your premiums into that particular policy. So if you want more profit from insurance company, put more premium into that particular policy. Policy.

And if I put all my money from the refinance on a spread of new policies, how quickly can I access the money via policy loan in order to purchase a second property?

While the access to capital from policy is actually on the 30th day of starting a policy and we can access what is available at that time and 90% of cash value. Well, if you are an existing client, I would recommend connecting with your coach on a team and have this discussion with him. And if you're new, you're brand new, connect with any one of us and have that discussion based on what you're looking to get accomplished. And we can give you really close, accurate answer based on how much you put in, how much you'll have on day one.

If all my expenses from cash flow are going to premiums, how do I pay the loan back when the cash value is tied up in the premiums for the policy?

If you look at Mike's situation, not all his money from his cash flow from properties was going in his property premium. He built that system over time. So we will never design a system because the system is about banking and banking is not about deposit only. Banking is about deposit being able to access and be able to replenish also. So we look at the whole holistic picture before we design anything. But really good question and schedule a call, look at your goals. So when you schedule the call, one thing that we want to know is okay, where are you in your life journey? Because we need to understand where we where you are presently and where you need to be. It's like gps, you know, we all use gps. But before you put the destination GPS calculates where you are and then based on where you are and your destination, it'll take you the shortest route. So when you meet with us, we want to know where you are and where you need to go so that we can build that GPS for you, which is the process of becoming your banker. That's why we take time to develop solutions and policies. Because once the policies are developed, it cannot be changed. And we don't get many opportunities to do things the right way. We get one. And none of our team members want to lose that opportunity. So we'll take our time to make a recommendation. And the first person that we're going to make a recommendation is to ourself. If we like the solution, then we'll bring it towards you and everybody in a team. You practice what we teach. So we're not going to show something to you that we ourselves haven't been able to achieve using the system of policies that we have in our own family.

If a policy loan interest rate is 6.2% or thereabouts, how much is the money you put in earning an interest? And I'm going to read out of this book called becoming your own banker and I'm going to read on page three and it's right in the top right hand corner. This is not about an investment of any kind. It's about how one finances the things of life, which certainly can include investment. It's not about rates return. As time go by, interest rates are up and interest rates are down. But the process of banking goes on forever. You know, it's all based on the contractual guarantee that's in those contracts. That cash value has to equal death benefit at age 100. So it really becomes the owner, the policy owner, their behavior that's more critical if they, you know, they push up that death benefit. The more they push it up, the more the life company has to drive up the cash value. So it's not about rates of return, it's about process of banking. And I say this a lot of time I wish the interest rates were higher that the life company charges because I share in those profits that they generate through that and it just increases my dividend. So that's how I like to answer that question. Do you Jing Gin or Servalo, do you have anything to add to that?

No, I think you just hit the nail on the head, Dan. The Process of becoming a banker is nothing to do with achieving a rate of return. It's all about how you go about financing things in life, including investments. So if you think about the most recent investment that you purchased, it was either using your own cash, which is your own capital, or it was using someone else's capital called opm. Using both access to capital, doesn't matter how you access it. You were able to achieve the objective of buying the investment but all that money was gone. You're either losing interest or you're paying interest. It's just better if you do it through becoming your own banker. Using a participating dividend paying whole life policy. You can finance it from the system and still have an uninterrupted compounding in your policy. While you still use insurance companies money to buy another asset that's going to compound. You thought compounding was good, but how about dealing compounding? Compounding your cash value as you compound the investment at the same time worse is just compounding. The investment choice is completely yours.

Good answer. What's the difference between working with you and Darren Mitchell? Well, both Darren and I don't have any hair, so that's the same part. But that's, you know, Darren's a IBC practitioner, we all know him. So that's just how I would answer that question.

He's a colleague in the industry and we're not here to convince anybody to work with us. Please work with us. If it's a good fit, right? If you have a good fit with someone else, make sure that whosoever you're working with is an authorized infinite banking practitioner. Practices what they teach. Ask them how long you've been doing this. What's the process like when it comes to continuously coaching and teaching the clients on and then you make a decision. And one of the core values that we have at S and N Financial is to educate. And we pump a lot of content on a YouTube channel called Banker Crawled. We got the best resources on our website when it comes to books on this process. We have a podcast called what's the Dog? Bay Street. So our commitment to our clients and prospect clients is when it comes to learning about ibc, you're never going to run of content. You, you'll watch a video, there's another video ready to be watched again. And that's how we want to add value to our clients. Now in addition to that we also do group client coaching sessions. So all of our clients we get to meet on quarterly basis and we teach more on a very unique Topic and then we also have a client portal which is only accessible by our clients where clients can access that portal and then go back and watch pre recorded client coaching sessions and then all the frequently asked questions on okay, how do I go about requesting policy loan, how do I pay back a policy loan? All that is in the portal available 24 7. And we built all that for the benefit of adding efficiency so that you can enjoy implementing the process of becoming a banker and not worry about anything else. That's how we roll. Yeah. Make sure it's a good fit. Doesn't matter who you work with.

Exactly. Are there clients who has a policy in Canada would move to the US and vice versa to ask do people do this and don't lose on the growth, cash value and et cetera. If you have that question, I think it's again something worthwhile to address one on one with your coach because there's so many variables when it comes to that question. There is people that started a policy in Canada and moved to the US and their policy, you know, stays intact, but it just, you just have to know about all the nuances that would come with that. So I just advise you to take and, and ask that question of your coach. Anything you wanted to add, Serval?

Well, once the policy is in place, the policy can never be taken away and the cash value is contractually guaranteed whether you're in the US Or Canada. It's, it's not dependent upon where you are. But if you're looking at changing a country of residence in the near future, especially next two years, then then yeah, we have to meet and have more expanded discussion because insurance companies, one of the questions they ask is are you looking at changing your country residence in the next two years? And if you answer yes, then they'll be very specific on okay, where are you moving to? And sometimes they're okay issuing a policy. If someone moves to the US because it may be a temporary move but they still have plans to come back to Canada, Sometimes they say hey, you know, not coming back to Canada, then we're not looking at ensuring this particular individual. Then you may want to look at getting a policy in the U.S. can.

You have long term care insurance as part of the policy or does that require a separate policy?

If you look at my system, so I talked about in one of the slides where if he starting age 65 and I just looked at age 65, he was able to access tax free money from the policy to take care of himself, his family at retirement time. So the Policy can be designed to meet a very unique objective. Unique objective can be I need so much money per year to sustain my retirement lifestyle, which can be long term care. So the answer is yes. But again we, we have to have more discussion to really look at exactly what that timeline is and how much are you looking to get from the policy at retirement time to maintain your lifestyle and long term care expenses. But policy can be designed to do.

That 100% policy rates different for different ages like the traditional life insurance policies.

I'll give you an example of my own policy. So coincidentally the first policy that I started was also $5,000 per year in premium and my starting death benefit was just about $100,000. Now when my daughter was born and she was 30 days of age when I started her policy and just so happened it was the same amount of premium, $5,000 for her also and she was 30 days of age. You can get a policy in Canada on a juvenile the moment they turned 16 days. And I also allocated 5,000 per year as premium for her policy. Now she was 0 days of age and I was almost 34 35. My starting death benefit was $100,000 for 5000 in premium. Her starting death benefit was 500,000 for 5000 in premium. So she had a high death benefit. Yeah, because we were different ages. But when it comes to cash value growth, my cash value growth was much better than her policy because I was much closer to age 100 than she is. So to answer your question, yeah, the death benefit can be different based on age. But when it comes to cash value growth, access to cash is same but the growth can be better or will be better on my policy because I'm closer to age 100. So if you're closer to age 100, your growth is better than someone who's much younger because insurance company has less time to grow your cash to match your death benefit by age 100 versus someone who's younger than you.

All right, that's a good answer. Once the rain mentioned using IBC concept for down payments might be cumbersome. Have any comments on that? Recommend not to use it for this point. Maybe the example of today. Ash, your thoughts?

We actually had another content specific webinar regarding. You know how we allocate the funds to funding the real estate, right? So we have those available that in.

The past I've used IBC as down payment. It's the best thing I've ever did because policy loan never showed up on credit report for me. I just planned it a Little bit better. I just took a loan 90 days in advance of closing on the property. So that because I didn't have all the money to finance the whole property from a policy 100% I still had to use the bank for the majority of the financing. And when you allocate money as a down payment, bank just needs to know what the source of money is. And I just planned it. Tragically, I was able to access money from the policy. My money is growing, use insurance companies money as a down payment, got the remaining from the bank, no questions asked. Most of our clients have done that.

And me being a real estate investor, I'm hitting the reset button. What I do is I sell my property and I'm going to do it in a completely different way. And that's exactly what Romeo you're talking about. So stay tuned and schedule a call with us.

I have a small business in which I have to collect HST and Remit quarterly which is approximately $7,500 per month. In case you need to know, my business is incorporated. Is there a way for me to structure a policy to use this money that I hold for the government for a policy to fund premiums, Take a policy loan to pay it back to the government when the quarterly remittance is due.

Don't you want to control the remittance versus not control it and have someone else controlling it? So the answer is yes. You just have to build your system to a point where you can do that. One of my clients paid all his corporate tax, provincial and federal lump sum for the year through policy loans. One lump sum and it was almost $55,000 or $58,000 because he was fed up of someone else controlling that for him. Whatever he was going to send them per month on an installment, he just took that money and started putting it right back into his policy. So now he's still making the installment payment. He just changed who's getting it and now he can control it. He can take a vacation from the payment, reduce the payment. He has a peace of mind. So the answer is yes. You just have to build it to a point where he can do all that and it's stress free way of living. The moment you get there and everybody gets there, it's just a matter of building the system.

Exactly. When a policy is active, is there any follow up and coaching with customers not only on the current policy status but also on how customers financial IBC situation can be optimized and improved further? The answer to that is yes. We continue to work with our clients, help them and support them on their journey. And yeah, there's quarterly coaching sessions, lots of good opportunities just like this one. This is for clients to help them learn more. So the short answer is yes. There's lots of follow up coaching and work with our existing clients.

Yep. I would just add to that. Some clients meet with us every second month based on their plan, some every six months, some every three months. It's just based on what the plan is when it comes to the user policy and that's what we meet upon. We don't have to meet to review policy because we don't have to worry about it. The cash value just keep going up. It's the best review ever when it comes to policy. But yeah, it's important to stay in touch based on what the policy was designed to do and that's where we get our energy on is the execution and strategy discussion part.

As an incorporated business, can my premiums be paid directly through my business, thus reducing my business income and lowering the amount of taxes that would have to be paid?

The answer is yes to the first part where business can pay the premium for you. But the premium paid by the business is not a tax deduction to your business because once that premium is paid using after tax corporate dollars, that growth in the policy is never taxable as income to business anymore. So there's never tax that the business is going to pay on that growth. Hence there is no deductions for the premium that the business is going to pay for you. You only get a deduction on an expense if the money was used to produce a taxable benefit in the business going forward. Policy cash value is never going to trigger any taxes as business grows, so the premium is not tax deductible. Now there's ways where policy is structured to use in the growth of the business. In very specific case you may get some deductions of the premium. I won't dive into that today because it's out of the scope of a discussion, but I would advise you to book a call with one of the Infinite Banking Advisors is an infernal team and they can explain to you a very specific scenario where it's possible to get a portion of a premium deductible as an expense.

You're looking at additional policy of 5k per year on a family member. Is it better to go with a parent that is under 80 or a niece that is 20?

It depends.

Depends on it does could be the right answer for one or it could be the right answer for the other. Each situation varies. So.

Thank you everybody for attending. And if there's anything that we didn't cover from question standpoint, I know a lot of good questions must have come up. It's easy to get those questions answered. Just book that call and we look forward to connecting with you. Thank you so much, everybody. Have a great rest of your day.