Becoming Your Own Banker | Tax-Saving Strategies

Taxes are apparently funding many valuable services for society that the government claims you are benefiting from. That may be true. And there's also quite a lot of spending that's not in your control and it does not benefit you. And it seemingly seems that they have an unlimited amount of money to spend. And this is where the question is, who works for who? What we're going to talk about is actually about keeping taxes away from your wealth. There's one thing I do want to make sure that I share and talk about, which is just setting some expectations. Every year, more rules and more changes happen in terms of the rules of how much the government can tax you. They install new programs, they remove new programs, they change rates, they change many things. And so it's really important to understand that the tax landscape for every individual is very different. So the first thing I wanted to go through and talk about is let's just start with an exercise and let's assume that you are business owners. The first part I want to just kind of walk you through is you have a management team who produced these results for your business. One of the goals for a lot of business owners is to try to be not the one working in the business, but working on the business. When they work on the business, they actually have a management team in place. And let's walk through some of the results that this management team has created. Now, the first year in 2014-2015, all of your various individuals and no revenues is to. Let's see here you can see 282.3 expenses, 280.4 and a profit. So the revenue subtract expenses is 1.9. Now let's walk through a few more of the years. In 2015-2016, there was a change in management and this is what that change in management did. Well, they've increased revenues to 295.5 and.

The expenses have increased to 296.4 with a loss of 1. So, you know, it's not bad, but it's also not good. The next year, revenues stayed about the same, but the expenses went up and therefore the loss went to negative 19. The year after revenues went up, expenses went up even higher and the losses remained about the same. The year after that, revenues have gone up, expenses have also gone up and losses have got to negative. 14. In 2019 to 2020, revenues stayed again around the 334 mark. And then the expenses are 362.9 and the losses were 39.4. And then a very significant event happened in 2020 to 2021 where revenues fell 3.16, expenses ballooned 628.9 and then the losses became 327.7. If we look at all of this in terms of the track record of this management team, how happy would you be with this management team? The information that I just shared with you, all of these numbers that you see here, they're actually all real. So If I use 2020 to 2021 as the example, most recent time 316 subtract expenses 628.9 and profit of 327.7 with a debt number here of 1,006,52. These numbers are not a couple of hundred of dollars. They're not a couple of thousands of dollars. They're not a millions of dollars, but it's actually billions of dollars. And with that billions of dollars, the number I want to highlight specifically that you see here is this debt number which is 1000. So that's actually $1 trillion.

Of death. I have some even more bad news to share with you. We are actually those business owners. And what's probably not a surprise to all of you, we are the source of the revenues for this organization. Now, this management team spends your money without any approval from you, the business owner. And in any normal business you would never allow this to happen. But this management team spends more than they collect from revenues and even worse, they go into more debt. So who is this management team? I think without a surprise, it's actually the Canadian government and more specifically the Canadian Liberal government. What's really important to see is how serious is this situation. Now, if we take a look at the revenues in 2014, this was with the Conservative government in the past, and the expenses of 280, that profit is 1.9. So that 1.9. If we divide 1.9 into the 1,024. Okay, this is very simple math. It would take at this pace 538 years to pay off this debt. Now if there was a loss in every single year, I can't even make that calculation to show you when that debt would be paid back. So we don't even know when it would get paid back. Now if one generation is 25 to 30 years, if we divide one generation into five 38 years, that's 18 generations, that's going to be taxed to end up paying back if they ever decide to this debt. This is how serious the situation that Canada is in with how the government is running the finances. Now, if we take a look at that debt, specifically from 2014 to 2015, the lifetime of Canada's debt, you know, Canada's been here for over a hundred years. The debt was $1 trillion up until 2020. So five years later, that debt ballooned to 1.6 trillion. So more than half. So 60% more than the lifetime of Canada's debt. Who's paying for all this? It's going to be you and your future generation. Let's just take a look at the situation even more. That government. Government debt was in the blue numbers here. And I'm just showing you visually what this looks like. And if we look at the red number, that's the earnings. The earnings have never gotten at a level or a pace. And you can see it's in red because it's going below the zero line. It's getting less and less and even more worse. And that number is ballooning more and more and more. The situation is getting really, really bad for Canadians. Let's look at the expense number again. So you notice how that expense number is $628.9 billion. Where does a lot of that money go? Well, some of that went to the Prime Minister's lakeside residence. That was 8.6 million of renovations. The next was there was a WE Charity scandal where 456 million went in the form of student grants in that time of the coronavirus pandemic. Then you can see that even his NDP coalition partner, Jagmeet Singh even called him out on all of this. The trip related to Aga Khan helping friends at the SNC Lavalin, the WE Charity. All of these have been very, very visible in terms of how this government has been caught and how they've been. I will just say it politely. Spending Canadians money that they've collected from me. There's also a $200 million loan that lent to a failing Casino Rama operator. And also you would think that this money would be spent in Canada. However, this Trudeau government provided the World Economic Forum, which Trudeau is a member, and his Finance minister, Christopher Vreeland is also a trustee of that organization, who is an unelected government. And they've received $3 million in 2021. And overall the United nations received $1.576 billion of the Canadian taxpayer money. Why is our own citizens working for the income? And then they are losing that money in the form of taxes, which is getting sent overseas to unelected individuals who are participating and receiving our money. Now, if we look at the amount of Money the United nations received at that time is 1.576 billion. Isn't that surprising? In 2014-2015, the profit was 1.9 billion. So almost all of the profit that the government earned in 2014-2015, the size of the amount of money that was sent was pretty much close to matching the profit. So let's do some really simple math. In Canada, if we take a look at 2021, the revenues there are about 38.7 million residents, which is actually increasing even more with new immigration policy. Let's estimate about 30 million of that are working adults. The average Canadian salary is 50,000 and taxes on that income is about 10,500. So in total, with 30 million times 10,500 of taxation that is being taken from Canadians income, that's 315 billion in revenue. So you can actually see that number is very close to the actual estimation. The question here is where will they find the money to continue funding their expenses if it's at $628.9 billion? So taxes are apparently funding many valuable services for society that the government claims you are benefiting from. Now that may be true. And there's also quite a lot of spending that's not in your control and it does not benefit you. And it seemingly seems that they have an unlimited amount of money to spend. And this is where the question is, who works for who? I mean, what do they care? It's not their money they're spending, it's your money. When you're spending someone else's money, this is what happens. Liberals yet to account for 600 billion in public spending. Pritchard Freeland wants $2 billion plus for a non existent green corporation, meaning she's trying to get $2 billion before a corporation was even formed for the purposes of green climate change. Trudeau stayed in $6,000 of a London hotel suite for the Queen's funeral for five days, which was $30,000. Now if we actually work out the calculation in terms of the amount of spending, 19,208 per person is what the spending rate is at. So all of the spending and expenses the government is going through, every person has to at least earn 19,208 to support their spending. This is the part that I wanted all of you to recognize. So now we know the situation related at the government's level, how much does that trickle down to you? How much does this cost you? Well, there was a survey done by the Fraser Institute recently, and if we take the average salary of the Canadian which is $100,000. 43% of what is earned is going in the form of taxes. So for every $1 you earn, 43 cents is going to the government. For every $100 earned, $43 goes to the government, meaning the government gets much more money than you get. As you can see, 35.7 goes to clothing, food and housing. So that ratio is much larger than what you actually need. The government needs more money from you than you need for yourself. And if we look at the form of taxes, let's take a look at that breakdown. It's not just income taxes. Again, this is just based on a general survey across Canadians. And it was simulated data shows that it's not just income taxes. There's payroll taxes, there's sales taxes, there was property taxes, profit taxes, and all these other ancillary taxes. If we add it all up, it's 42,005, 47. That brings total cash income. If we look at the cash income, 99,030, 43% of that is what is the percentage of taxes paid on that income. So if 43%, if not more, goes to the government as payment for services that they provide for the citizens, maybe it's some time for you to reflect. Have your services from the government gotten any better? You're working more, you're paying more of your share of your income to the government. Have your services gotten better? Are you happy with working multiple jobs, generating more income to make ends meet for someone else that is spending your money? If you've answered no, well, it's time for you to wake up. And I think it's important now to identify the problems. Let's first understand what a system is. Now, a system is a regularly interacting or independent group of items that formulate a whole. So it's a system. Now, specifically, the income tax system is a type of tax that the governments impose on income generated by businesses and individuals within their jurisdiction. So in general, this is the part to help educate your understanding on the income tax system. Because if we don't know how the system works, then we don't know how to manage our position and impact of how the system hurts or benefits us. So how is the income tax system in Canada designed? Well, the first is it's based on residency. A person who is resident in Canada is subject to income tax on their worldwide income. So if you have income that you're earning in France, well, all of the income that you earn in Canada plus the income in France will come into included into your income. And that's how you will get taxed. The second is based on the income you earn. The third item to be very, very aware is it's a progressive system. The more income you earn, the higher it gets, the more taxes you pay. Now if the expenses you have to pay for are increasing, doesn't it make sense? You have to earn more income. But if you need to earn more income, you now need to pay more taxes because of the progressive system that has been designed. And the most important part to understand related to this income tax system is that the government is the one who defined these rules, not you. Now when it comes to income taxes, it's important to understand that it's a system implemented and designed for for the government. It's not designed for the citizens. It's designed for the government to collect revenue. And the rules that define what the government can collect and how they collect it is outlined in the Income Tax Act. So that's their rules. Now if you're in a company, I'm sure you understand standard operating procedures, company or corporate policies, all of that stuff. Every company has their policies. No different than Canada when it comes to the collection of income taxes. There's an Income Tax act or set of policies for it, set of rules. Canada joined World War I in 1914 and because of war in 1917 the Income Tax War act was introduced as a temporary measure. And even though the war has ended, the expenses for the government continued. And at this point by 1948 they've decided that it was no longer temporary. And the Income Tax War act was replaced with the Income Tax Act. So they dropped the war, but now they've made it a permanent measure. Now as you can imagine, citizens when this was implemented did not enjoy paying income taxes. And the government had challenges in forcing citizens to pay taxes. And so to enhance the income tax system ability to collect revenues, the government introduced laws and penalties deduct taxes from the citizens sources of income. Now whether you like it or not, laws have been designed by the government to ensure that these income taxes system can collect the taxes their revenue from you. What's really now important to highlight is the government's revenues come from the backs of your efforts. And another way to put it is they've designed a system in which they control to entrap you to take bites from your efforts. Because of how the system has been designed, you may not even realize this. You are trapped. Just like the inflation income trap. You most likely reintroduce your income back to the income tax system and you get taxed Again and again and again. So at this point, this is probably how most of you feel. My shoulders here free. I understand. I wanted to highlight with you that you are right here making a really good investment of your time to be here in the right place. The first step and why I wanted to go through all of this is if you don't understand the problem, the solutions that I'm going to talk about make absolutely no sense to you. So the first step to realize is that you've been entrapped by laws created by the government to pay income taxes to a system that is controlled by the government. The government has designed these rules to tax you along the way and spend your money without any accountability. Taxes create a drag on your wealth when you focus your time on getting educated and learning about, especially when 43% of your money is going to an organization that you have no control on how that spending is being done, no direct control over it. I think it's really worthwhile of an investment of education to learn that there are ways to place the tax rules in your favor legally. And despite how cumbersome the rules are, you do have the right as a citizen to legally pay the lowest amount of taxes. The government is not going to step in and go out of their way to do it for you. What they will do, though, is if you underpay your taxes, they will audit you. They will make sure they penalize you with interest and penalties. But if you overpay them, they will not audit you when you overpay your taxes. I mean, why would they, if they did it mean that they would start getting less revenues and that would be a direct threat to their spending that they go through. So what's really important is no one has direct control over what you do. The power rests in your hands to take personal action on minimizing or preventing this from happening to you. And remember, what I want to highlight is you do all the work to generate the income. The government depends on you financially for your productivity and efforts to generate revenue. Could you imagine if all of the Canadian citizens actually never worked? Where would the revenues for the government spending come from? They have no source. So when you let the government charge you more taxes than you owe, you are constantly giving them positive reinforcement to misuse your money. You went to a business that provided you poor products and services. Would you stand for it? The answer is for all of you. Most likely no. But somehow, a lot of Canadians completely accept the fact of how the government is using the money that they're collecting. And I Want to highlight for you that what I'm going to share with you is not about a one trick pony. There is no one solution to it because the government has made things much, much difficult for situations, for exceptions, for new rules, for changes, for everyone's different situations. So it's very hard to have one blanket rule and what this will do, what you really need is a real evaluation of what you're currently doing and a commitment to see the steps through so you can understand and see how bad the situation is. But are you taking the necessary steps to move forward on that? Are you willing to commit to improve on anything that you're now doing financially today to keep taxes away from your wealth? Welcome to Commitment. Now I want to introduce you to a client of mine. His name is Chris. And the purpose of showing you Chris is to highlight what he was able to achieve by redirecting his focus on building his wealth instead of building someone else's wealth. So let's talk about it from the taxation standpoint. And what I want to introduce to you is a very special strategic framework from my years of experience, over 15 years of working with many, many clients. And this is what will work on protecting your wealth from taxes. And it's kind of like your Pentagon of Defense. There's five very simple concepts not easily implemented. But if you understand the concepts, this is already a first step of getting there. The first one is defer. Now, if you defer your taxes, the objective here is using time. Instead of paying the taxes today, you're deferring the taxes to be paid in the future. If you have one year where you suddenly fired from a job and you get a severance, or you get a big, big bonus for doing some wonderful work, or you've sold a home and you've had some extra balloon of income that's come in in that one year instead of concentrating in that one year, are there strategies and ways for you to defer that? And when you defer that, you still can't forget the fact that it's still available to be taxed, but at least you're removing the concentration of time. And this way you want to put it in a form that you control. Now, the challenge of deferring taxes, it's not eliminating it, it's deferring. It is if we look at the trend or the behavior pattern of how the government is spending money and the levels of debt that they're getting into, what direction do you think in terms of the highest probability taxes will go, the tax rates will go Will they go up or will they go down? The probabilities in where things are going with the levels of interest rates and the debt that they have, very likely that the tax rates will go up. So if you're deferring it, what a lot of people do is if they get too busy with their life, they forget about it and they don't have a designed plan on how to get it out. You're still going to need to pay taxes on it, but you get it out in a mechanism that you control in a more friendly manner. The second one is defining the income. Now, a lot of people may not realize this, but how you get your income, how you define it, will attract different rules. So the rules can range from the least level of tax to the most level of tax. Not everyone can control and make income a very specific way, but I think it's still very important to be aware of the options that exist and the choices that can be there when you can make those choices. So the first one is employment income. That is the one that will get taxed absolutely the highest. And for specific speak, I'm only talking about personal, I'm not talking about corporate, but personal standpoint, a T4 income attracts the highest level of taxation. The second one is, let's say business income. Because if you are operating a business and even though you've generated that income, you have eligibility of claiming expenses to bring down that income and pay less taxes. As an overall outflow, the next one kind of fall into the same category. In a personal environment, there's what's called dividend income and capital gains. And as a broad stroke category, they're called passive income. So on a personal environment, passive income pays less taxes. In a corporate environment, for those corporate business owners, the opposite actually happens where the passive income that the corporation receives attract a 50% tax rate. And then the expenses and revenues and the profits that they get taxed their business income, if it's in Ontario, it's about 12.2%, provided it meets very specific criteria. So you can see the tax rates in the environment can be different. But just in general, this is where it's important to understand. The definition of income will attract different rules around how the government will collect tax income for themselves. The third one, now we're walking into some more advanced topics called design. So the structure and how you receive the income can change the amount of taxes you pay. So let's go through the structure, a very simplified structure. Example, if you receive income personally as a T4, structurally personally, you're going to pay the most annual taxes. If you have the ability to incorporate for the reasons of incorporating that source of income, the active income that gets earned here will attract a lower annual tax. And that gives you further control to defer personal income taxes. And so the general strategy is to try to move the income from the least efficient structure to the most efficient structure. So as an example, the least efficient is a T4 salary employee. The middle is kind of like in between, like a self employed contractor. The most efficient structure is corporation corporate environment. And things can get much more complex in this space. But again, access and relevance to the space all depends on your situation. That doesn't mean everyone. Right Now I'm a T4 employee, I want to become a corporation. In your circumstances may not be a possible option. And this is where everyone's individual circumstances must be evaluated. The fourth one is divide. Again, a very advanced topic. As you know, the income system is progressive. So the higher income you make, the higher tax bracket you fall in and thus the higher taxes you pay. So that's the progressive system. You can be progressive in time or you can be progressive if all that income comes and lands on one individual, which is the taxable legal entity. Now the strategy here is, where possible, you want to divide the income rather than concentrate the income in one year. And you can divide it in the following ways. Personally, through your spouse, through children, through corporations, through multiple means. This strategy has been severely neutered by the liberal government for introducing what's called the tax on split income in 2017. They've minimized the eligibility, they've narrowed the window of how you can split income. For example, in the past, children who were part of the corporation in one way, shape or form could receive income. But now they have to have very clearly defined rules and at a very specific age to support the fact that they can get a salary. And this gets very difficult and very challenging, especially for farmers who have children who are, let's say 12 or 11, who are very mature and capable and they're working and they sometimes, if they're not properly set up, if they pay their children salaries, this could get reattributed back to the parents in the higher tax bracket. But they're actually doing work, they're actually drawing a salary from the business. It's completely legitimate and fair. So this is where it's really important to start building a proper set of documentations so that if and when you get challenged, it can be countered. So all of what you've been taught right now are four of the five strategic Ds for optimizing your income taxes in the Income Tax Act. Nothing unusual, it's just really simplifying the message in a way that the Income Tax act has so many positions. It's trying to move you into the best position to your situation. Everyone's situation on the chessboard is going to be different. How you move closer to the efficiency in that Tax act all depends on, again, your situation is it's not just one thing that you work on. You don't just say, today I'm going to have my deferred, tomorrow I'm going to have divide the next one I'm going to have design. When you can, there's actually abilities to combine multiple strategies together. And when you can, the better your outcome will be. And all these strategies were all focused on improving your position on the Income Tax Act. Now, most tax practitioners can be very adept at sharing what I shared above. But there's something else that severely limits your ability to keep taxes away from your wealth. And it's related to the fifth Strategic D. Unless you understand what the problem is and who is getting all of your money, the solution won't matter. Just like how the income tax system flourishes for the government, for all of your hard work, there's actually another system that flourishes from your hard work. After the income tax system takes a bite of your income, many Canadians, much like yourself, without much thought, hand over their hard earned money to this system. Now even worse, you may even pay this system in fees to hold your money. They flip the equation that when you hand them your money, they're going to charge you monthly fees for holding onto that money for you. Now while they use. And then when they hold onto your money, they're actually giving you an IOU and it's unsecured. Meaning that if they default, they may not even need to pay you because there's nothing that is secured against. They're going to take that money and they're going to use it to generate billions and even trillions of dollars in profits for themselves. And they don't share any of that profit with you. Even worse, they pay you only pennies and dimes for using your money when you leave it with them. And here are some of the ways that they attract you. Especially if you pay attention to a lot of the ads or the marketing announcements and they tell you to put your money in these products that you see. Mutual funds, commodities, stocks, bonds, all with the promise that it is a great place to store your money for Some attractive average rate of return. Now what they don't tell you though is when you put the money with them, one day you can wake up and you see this and you get a heart attack. And then the next thing you're going to get is you panic and you tell them and they're going to tell you, no, no, no, no, no, no, it's going to go back up. Just keep your money sitting with us. Don't worry, we'll get it back up for you. So you put your faith and trust into the recommendation. It's gut wrenching, your heart is beating, everything's pulsing. And when it comes to looking at your account, this is probably what you do. Now, if your wealth is going to be used for retirement, then this is probably more accurate. And so you look at, you put your money in, you're like the market outperforms. If you do this for 20 years, follow this specific index for 20 years, you could be a billionaire, whatever, a millionaire. And so. But we all know it doesn't move in a straight line. What actually happens is it goes up and then in certain circumstances, like bank collapses or wars or whatever you want to call the market will go down. And then it goes up again and then it goes down. And what happens at the timing of when it goes down is when you decide to retire. And then you look at it and you're like, you're not even sure if there's actually enough money for you. In a time when you, you are most vulnerable and you're not potentially not able to work anymore, you need to rely on the mountain that you built. So what I want to highlight is you earn income, so that's money coming into you. That income that you take gets deposited into someone else's bank. We've gotten so comfortable outsourcing the storage of our money, they've trained all of you to feel comfortable. As soon as you get money, immediately put it into the bank, which you don't own. And one thing that's really important is the banking is the most important business in the world because the bank system pumps the money to where it's needed. And at some point all of that money flows through yours and my hands, right? And where does it go? As soon as money comes in to you, where does it go? It goes back to someone else's banking system. When you put your money in someone else's system, you've surrendered the control to their rules and you essentially put your money into prison if you don't believe me. If anyone receives pension from Their paychecks. Try accessing the money from your pension. Most of the rules around pensions is around after 55. Then you can potentially access that money. And not only can you access the money, they will penalize you for accessing your money. Or the rrsp, they give you a nice refund. But when you need to get it out, good luck. If we look at the pace of where taxes are potentially going to go, you could be paying a lot more than the refund that you've got. So what I want to highlight is whomever controls the motion of the money, directing the flow into them is the one who's accumulating the wealth. We want to learn to bring the flow of the money back to each of us individually. Now, what's the meaning of wealth? Wealth is the abundance of valuable materials or possessions or resources. How much of the wealth that you generate is actually owned by you. Wherever wealth resides, someone is trying to steal it. Based on today, the events that we're going through, I wouldn't say that's actually very hard. Here's what's happened. This is relatively recently in 2022. Why the CRA wants a closer look at your investments held in an rrsp. Now, when you file your taxes, the government wants you to start reporting your principal residence. Even Christa Freeland, the Deputy Prime Minister and Finance Minister, said, if people have ideas on how the government can act to help unlock that preloaded stimulus, in other words, the savings that everyone is holding onto, I'm very interested. It's quite absurd. What's really important is that wealth must reside somewhere. And where your money should reside is somewhere that you own and you control. You got this. You can actually do this. You just have to have the follow through on the commitment you made tonight to do this. And that is creating your own family bank. And it starts with actually reading and getting a copy of this book from R. Nelson Nash, Becoming youg own Banker, where 470,000 copies of this has been sold. The other step is at least go through to watch IBC.com, where we have a free 90 minute training about the process of becoming your own banker. Now to become your own banker there is a tool that we use and it's a customizable tool and it's very much designed for your unique situation. And what we do is we make sure that when we design this tool, we're placing it with a company that you co own and that tool is a participating dividend paying whole life insurance policy and it's placed with a mutual Insurance company. So what does that mean? You become a part owner of the life insurance company and you participate in the profits generated from that, every line of business. So that insurance company does sell term insurance, does sell universal insurance, does sell investment products, whatever. All of that you get to be a part of because you own a policy, a participating dividend paying whole life insurance policy. Now, with that whole life insurance policy, the way the design of the contract is created is it is for your whole Life until age 100. The insurance company believes you will live until age 100. How this policy gets constructed is that there is a term called cash values in that policy and that is contractually guaranteed to grow to match the death benefit that the insurance company has legally bound themselves to pay you when you pass away. We don't have many financial guarantees in life anymore. And dividend paying whole life insurance policies placed with a mutual insurance company can help you create the peace of mind and unmatched financial security. So the first part is cash values begin accumulating immediately tax free. This is the part that I want to help separate is that it is contractually guaranteed to grow daily and those cash values can't go down. And since the fact of the matter is it's cash values growing as part of a contractual guarantee, it does not meet the definition of the income. So it is outside of the definition of the government's jurisdiction. And therefore that is why it is tax free. The second is you can have easy access to and control over a growing pool of financial value that you can use to take advantage of opportunities that will track you down. As you have more money, more opportunities will start coming into you. You're also not penalized for accessing it early. And believe this, that there are many tax advantages, both personally and corporately and how we design it. There's a growing death benefit and this is paid to your beneficiaries income tax free. Because it's not property, it's not income, it does not fall into the jurisdiction of the Income Tax Act. It matters where you store your wealth. And this process is not an either or. Becoming your own banker is a step, a series of steps that is changing your behavior of where you are relocating, the depositing of your money. And it's not about an investment. Everybody tries to look at this insurance policy as a product and what's the rate of return? It's not an investment. That's not how you need to use calculative tools. Of all people with my experience, I would say I would be one who is very deep into the numbers. And this is not what I look for because I am looking at a different way of facilitating how I'm going to bank to do things in my life, how I'm going to finance the things I need for a car. I've just completed a renovation in my landscaping and all of that has been funded using my policies. So when your wealth is stored with someone else, you get this. When you store your money in a properly designed, participating, dividend paying whole life and policy, you get this. When your wealth is stored with someone else, it's controlled by someone else. So you could end up like this. More specifically, you could end up like this. The RCMP gave police info on the Ottawa protesters. How do you feel about being exploited for your own data? What's important to see is money flows to you and stays with you. And if you design it in a system properly, you can control that flow and you can use it. Your money is safe and accessible. It keeps the interest inside your family banking system. Whether you use it for car, school, business, investment, home, vacation, it doesn't matter. This is why it's called the infinite banking concept. You get the choice in how you use your money. And when you place your money with a mutual insurance company, policy owners own the company, not the stock owners. And when policy owners own the company and work together, you get to enjoy the pooling of all the premiums that come into the participating whole life policy contracts. There's a set of benefits for all of the co owners that is part of the participating life company. And when the participating life company generates profits, everyone gets their share of it. So whole life policies are not a creature of the tax code. They were not created because of tax reasons. They were created before income taxes were introduced in Canada. When designed and implemented properly, this is your scale from Healing Tract. This is the income tax system. This is the banking system. Income tax system is stealing from your wealth and the banking system is exploiting your wealth. When you look at everything you own right now, how much of your wealth is actually yours? And this picture may represent that.

So this isn't going to be stolen by the income tax system or warehouse in someone else's banking system. Just remember there's one pool of money in the world. And what Nelson saw was he was pumping money into the pool the wrong way. He was pumping money away from him instead of to him. So what's the solution? Are you ready? The fifth and most powerful strategy or D of them all is to disconnect. And this is so powerful that most people Conceptually know it, but very few really understand it. You've got to take steps to remove the power and control away from someone else's hand and reclaim that power and control back into your hands. So get the flow of money coming to you, not away from you. When you pay debt, money's leaving. What if the debt was in your system? You're paying back your system, money's flowing back into you. Remember, your money must reside somewhere. Someone must perform the banking function in your life. Should it be the banks that are out there? I disagree, it should be you.

Now let me show you. Meet Chris. Now Chris is 47 and he's a mechanical technician. And he earns 150,000 in the form of being a self employed individual. And he saves at a pace of $25,000 into his RRSP and he's accumulated $250,000 today. His goals, when he came to me, talking to me, before he came to me, the first thing that he did do was make sure he understood what becoming your own banker actually means and taking the control of his finances and building his wealth for himself instead of someone else. This is what he was passionate about. And the way that he did that was he went to read the book becoming your own banker. He reached out to me, to the phone number and from that phone number got spoke with me and with speaking with me, asked for more information, to learn more. As he's gone through it, he's like, Henry, I want to build my system and I want to work on this right now. And when he wants to work on it, this is when I invested the time, sat with him and really brainstormed and explored and constructed the system specific to him. And he shared with me, Henry, I'm paying a lot in terms of taxes. I need to make sure my money's not locked because I want to continue investing. I'm still young and I want, my way of investing is through real estate, crypto and stock. And his goal was to try to get to 65,000 of after tax income before CPP and OAS. Now at his 150,000 income, his total taxes he was paying was about 50,000. So that's what was going to the government. He had a lot of debt and in his debt he had visas and lines of credits that were 21.9%, 10.2% with balances of 28,000, 9,000 and another secured HELOC of 7.2% that he had a $23,000 balance. He also owned main home where the interest rate is 2.42% with a BAL of 669 in that. He also had rental mortgage of 234,000 where the interest rate was 4.5%. And he drew another HELOC of 6.9% of 160,000. So those are the balances. If you add it all up, that's 1 million in debt. Now if we take a look at this column here, all of his debt, these were the payments that he's making. He was paying 6,297 in terms of the amount of money that was going out. And if we do 6,297 just rounded 6,300 times 12, that's 75,000. He was earning 150. 50,000 was going to the government and then 75,000 was going to payments in debt. The 75,000 that was going to pay debt doesn't bring his 1.1 million down because a lot of that goes to interest. So what I did with him was unpack how much of his payments went to interest. Interest loans like Visa, lines of credit, secured lines of credit, those interests, if we take the interest rate times the balance, the annual interest was $6,132,000. We add it all up, that's all that there. The part that tricks a lot of people who don't know is they are very consumed about the mortgage rate being 2.42%. But we all know that inside of this 2004, 88 is not related to payments, nor is it actually the interest. If we unpack the payment that he makes, a lot of that, over 50% of that is interest. So if we take a look at that, overall, $16,000 of that mortgage is going to interest. Now, all of you who own property understand that you also have to pay property taxes. And he was paying $8,000 in property taxes annually. And then the rental mortgage, similar structure, 50% of the payment goes to interest, which does not bring down the principal balance. The HELOC, just on servicing the interest is 11,040. Add it all up together, that's about 50 something thousand right there. In terms of how much money was leaving him and taxes, that was not getting him ahead. He was paying 75,000 in payments and only 43,000 was serving profits to a bank that was not bringing his debt down. But let's see where all of his money is going. Now, if you have a copy of this book, if you actually go to page 17, there's a diagram in there and it's called an annual spending pattern compared with interest paid by category. So the general American Citizen, they spend 20% of their income on automobiles, where 5% of that is interest, housing, 30% of that is spending. And then 25% is actually interesting. 40% of the money goes to living. 8% is in interest, and they actually save potentially 10%. Now, if we add up all of the interest that is paid, the General family pays 38% of their income in interest to the bank, and they're saving at a rate at 10%. Well, let's look at Chris's situation. He was earning 150,000. His assets generate a $12,000 return. Again, we all understood that $50,000 goes to the government in the form of taxes. So if we take a look at here, this is income and expenses. How that income expenses, $100,000 goes to Chris, $50,000 goes to the government. And I just introduced another person, which is the bank. If we take a look at over here, in terms of now, the property taxes and that interest, remember that $53,000 together, subtracting from the money that he earns, he has to pay the property taxes, he has to pay the bank for the interest from the income that he's earned, he's really left with 58,000. So if we look at all of the money in terms of the 162,000 that is earned, Kris earns 58, the government earns 60, and the bank earns 43. And let's just distribute that as a percentage. Chris earns 35.81%. The government earns 37.24%. The bank earns 26.9%. 5%. Let me just summarize it visually. The money earned of 152, Chris gets 36%. The bank gets 27. The government gets 37. Who's doing all the hard work, who's getting all the money? Because if we look at how much money Chris gets, if we just combined these two people, who's getting all of the money? So the problems that he has is he's struggling to get by. And we can see that 64% of the money he's earning is going to someone else. 38% is interest, 26% is taxes. So before we dive into how I helped Kris, there's another system that I want us to look at, and it's the Canada pension system, the Canada Pension plan. Let's take a look at the cpp. When you paid a salary, the government already starts confiscating some of your income away from you before you even Receive your actual money by deducting CPP contributions straight off of your check. And when it's deducted you don't even know where that money goes, what it is even done and you don't even have the ability to access it until you declare retirement with the government. The government has also designed laws in place where if you receive a particular form of income T4 you don't have a choice, you have to contribute to it. This means the CPP system gets paid before you do. So as long as you receive a T4 you will contribute to the CPP until you decide to retire. So how does the cpp work? The T4 employee pays half, the employer pays the other half. That means but if you're self employed you actually have to pay double. If you're corporate and you have your own corporation, you actually have to pay double. The corporate business owner who pays salaries to themselves pay CPP through their corporation and that's where they pay double. So irrespective of being a T4 self employed business owner, CPP is going to get the amount of contributions they're going to get. It just depends on who's giving it to them. Have you ever wondered if it's money well spent, it's normal then you should look at least getting out as much as you put in. Right? For Chris, whether or not it was worth it for him, he had 150,000 and 7,000 went to CPP. Again he was paying 3,500. Because he's self employed he has to pay double that rate. So it's 7,000. When did he start contributing? Actually when he was 24. And when did he, does he want to retire for 65 years? So if we take $280,000 just to keep the math simple, 40 times $7,000 per year he's contributed $280,000. Now after 40 years of contributing to the system, here's how much he will receive. Starting at 65. Here are his pre tax amounts. At 65 he'll get 10,168, 66 he'll get 10,269 it gets another 10,372. So remember that these amounts he's receiving with CPP, not only does he receive that money, he's actually going to get taxed on that money. So it's not even tax free. Now let's use some statistics. In Canada the general male life expectancy is 85. Female is actually 88. If he starts receiving CPP of 65 and dies at 85. As part of this life expectancy in Canada, how much does he get? That's 236,291. He's put in 280. How long does Chris need to live until he actually gets what he's contributed? He needs to live until 89. And if he dies prematurely, will the CPP pay his family back for all of the contributions that he's put in that 280? Nope. Doesn't that sound a little bit weird? And Chris understood the importance of keeping wealth within himself. And he knew it was not a matter of putting more money into investments for some unguaranteed rate of return. He knew the severity of the problem. He knew he wants to have control. Chris also knew he was missing something that his current financial team of accountants and advisors could not fulfill. He was missing someone from his team that could see the picture of keeping his wealth away from other people. And not only that, he was also missing knowing what he needs to do to get there. He was missing a coach. And not just any coach, the right coach. And even the very best athletes have coaches. Let's see for Chris, the freedom and prosperity Chris was able to achieve with me as his coach when he started working with me. Here are the tactical maneuvers that brought Chris to financial freedom. It started with stage one move his position in the Income Tax act to increase his efficiency with tax. So the first strategic move was to change his design and incorporate his income from self employed where he was paying $45,000 to $50,000 in taxes to corporation where he still received the same income. And now instead of paying $45,000, $18,000. So now his taxes have gone down and there's a savings of $27,000. The second is to change the definition of how he received his income. He was initially receiving some form of a self employed business income that was kind of like a salary in terms of house self employed destruction. So he would have to pay 45,000 in taxes there and then 7,000 in CPP contributions. But by changing the design and changing the definition, now his corporation pays 18,000. He only needs 55,000 to live. So he drew it out in the form of a dividend. And when you taxed himself personally, when he received a dividend, only had to pay 4,000 in tax. So ultimately by not contributing to the CPP, by changing the definition of his income in dividends, he no longer needs to contribute to the CPP because he decided not to. Now he saved $30,000. So now stage two, creating the new storage of warehouse of wealth because he did not want to put his money into an rrsp. So this is stage three. Design and implement his specific own private banking system. And in his circumstances, because of what we've restructured from, we created a personal private bank and a corporate private bank. Again, all of this gets explored when you meet with the coach, your coach and have your discussion. We don't understand how you're structured, we don't understand anything about you yet until we dedicate the time to meet you. And when we meet you, you get our full attention. And our aim is to give you the best form of value and clarity when you meet with us. The third stage is actually starting the disconnect process. We're storing his wealth in his system and what he was already sending to the government's registered systems and the bank. We're just changing the location and changing the flow of where his money is going. In terms of the RRSP trap here, 150,000 deposits. 25. His RSP is 250. When he was making his deposits today, he was getting a refund of 11,000. So that moved him from 33% down to 26%. Now the problem is if Chris dies today, which he had no idea what his best before date is, all of that 250,000 is going to get included into income at once. Remember progressive income, concentration of income, it all gets included at once. So what would happen to Chris if he earns 150 and he passes away and gets 250 together? Well, his income is going to be 400,000. The government's going to tax 45% of it, 180,000. His beneficiaries will get left behind 220,000. Well, if he withdrew $60,000, he would pay 18.5%. So it's basically not really any different. If he waits until retirement, he gets exposed to a rise in income taxes. And there's an even more penalizing one, which is when you retire, the government gives you benefits like old age security, guaranteed income supplement. But if you earn too much income, the government claws back those government entitlements and say, no, no, no, you make too much money. We're not going to give you any of those benefits. So that in my opinion is actually a tax. No actual money saved from taxes. And what if taxes go up in the future when you retire? So in that strategic move, we've just changed where he's taking his 25,000 instead of putting it into the RSP and deferring it for future Exposure to higher tax rates. We've stopped that. We put it into his personal private bank. And now by moving his money into a place that will never see another dime of tax as he's building wealth with that tax free death benefit. And that death benefit was far larger than what his RRSP balance would be. Here's the fourth strategic move which is to draw no income from the corporation. Because now he has control from the design that he's created personal and corporate. And if he needed the amount of income he needed to survive or live, he can now under his control, control the release of his rrsp. Again, he put it into the government's rules. He has to follow those rules to exit those rules legally without getting taxed. But at least now he can do it in a place of favorability for him where he's not concentrating his income and he's not following into the penalization realms of the tax system, he's in more control of it. His tax refund is 25,000. And if he draws the 55,000, he's actually in today's tax rates paying 9,500. So in this way he's going to keep his money in his corporation that he's earning and instead of doing a dividend or anything like that, he's taking money from his rrsp. He's melting it out in a very strategic way at a level that he's comfortable with. And what we looked at how much of a refund he got and if we looked at how much he paid to get it out, which was 9,500, he actually gained 1,500 for doing that. So that's what we worked together. And that's the part of the coaching that came after his system was implemented. Stage 4. Now continue his wealth building journey and do as he always was doing, just changing who gets the money. So uses his tax savings to double his savings program. So before he was taking the 25,000 from his permanent and putting it in his personal bank because of his corporate design paying less, he had money available. So that's why we started another 25,000 in the corporate banking system. Because this corporation is going to need a bank to store the money that he earns. His personal is going to need to store money that he earns. He needs to draw from it at places. So why not create both? Especially when he has freed up cash flow for legally paying less taxes by positioning himself in his favor. Just by doing that now he's able to save at the double the rate. Could he not get to his retirement goals much faster. Absolutely. So he's parking his money in his banking system to grow his wealth. When he puts it in his banking system, does he need to do this or this? Not anymore. Because when you put money in your banking system at a company that you co own, you get access and privilege that is not the same as in the traditional banking system. Can he build a Stanley banking system and still build his investment portfolio of stocks, real estate and crypto? Of course he can, yes, because his money's not tied up. And here's the success formula for Chris. Just in his first year before implementation of the five Ds, remember he was paying 64% of his money was going to someone else. He was getting 36%. By changing that, we reclaimed the control for Chris and gave him 56%. The bank got 27% and the government got 18%. So the first move actually largely cut out and minimized the tax burden from the government. Well what did he need? He needed to get educated on the importance of taking control of the money and the flow in his life. This is the first step. You need to know how to use this tool. I mean we can coach you, but we can't do it for you. He started his own family banking system using a series of properly designed, participating, dividend paying, whole life insurance policies. As you can see, he created two just from all the strategic moves. The next is he aligned himself with a coach like me. And now that he legally minimized his tax obligations to the government, his next step was to kick out the next one who's taking his money and that was the bank. And this step actually has to take time and that can't happen overnight. The other part is it requires continued commitment from me and his coach. Let's take a look at the outcome for Chris and I'm sharing with you what that looks like. So remember, before 5Ds, before any intervention, before becoming your own banker, before 5D's, anything, 64% of his wealth is going to someone else immediate after implementation. Again, he took all of those steps, worked with his accountant, restructured himself, all of that stuff, he's reclaimed back to 56%. But when it comes to a coach who knows they can get much more out of you, this is what his long term projection that he is so excited about and he is knocking off debts one at a time right now, today. And in the long term, this is what it looks like. 11% goes to the government and 89% goes to Chris. And this is not even neglecting the fact that he has so much potential, he's going to earn more money, he's going to grow his wealth. And this is legitimately what gets all of us here at Ascendant Financial extremely excited. For all of you who actually take the action to do. We can't do this work for you. You know, you're the only one who can do it. It's not about taxes, it's not about shopping for the lowest interest rates, it's not about a whole life insurance policy. We're talking about building the family bank. Because it's not about what you buy, it's all about how you buy it. And this is all about starting with educating yourself. Because recognizing the human problems is half the bottom one never fully conquers them. But if you at least trend in the right direction, you know progress is going to be made. It's controlling the banking function in your life and it's rethinking your thinking beyond paycheck to paycheck, month to month, year to year. We're talking about here generations to generations. And it's about connecting with like minded people who completely understands that your wealth is trapped in someone else's system and being taken away chunks at a time. But what I want to make sure that you know is please don't take the information that I've shared with you and do this alone. And you need to choose someone who is an authorized infinite banking practitioner.