Jayson Lowe shows how one family used the Infinite Banking Concept to finance a Tesla Model Y. IBC lets you borrow against a life insurance policy to keep cash flowing while building wealth, rather than taking a traditional car loan.
The reason why we don't have sometimes enough money in retirement is because of all the money that we use to buy and finance cars. If we can show you a way where you can actually have the money coming back to you for the purpose of buying cars, coming back to your system, would that put you in a much better financial position than what you already are doing?
We had to build the foundation first before we dive into case studies. If you would have started with case studies and you really didn't understand the problem, then the case study just won't make any sense. Right. I'm sure you would agree with that. The case study that I want to start with is the power financing. And I'm going to finance a Tesla. One of my clients is actually financing Tesla this year. So this is their case study. Obviously, I'm not sharing their names now. It doesn't just apply to cars. I'm using cars because it's the most common commodity that we all need and something we can relate with. It's money. Money could be used for financing anything. So as I go through the case study, think about what you would be using this for. It could be a pro car, it could be for business growth, it could be for investment, it could be for private lending, it could be for stocks, it could be for paying down debt, it could be for family vacation. It's whatever you want to use money for. All right, let's dive in. Financing now, how people finance the things in life. So either it's by lease, if you've leased an equipment or a car, it's. It's financing, right? Because you have to qual, someone else is setting the terms on the lease. You're doing all the work, someone else is getting all the money. The second method is the third party financing, which we are all aware of, bank financing, private lenders. The third method is cash. You know, when we pay cash, we are making a financing decision as Henry walked us through, because we are making a decision of not to earn any interest on that money. It's called cost of loss opportunity. So there's either cost of borrowing or there's cost of loss opportunity. Doesn't matter whether you prefer the boring method or the cost of lost opportunity method. You are making a financing decision. Now, personal financing. Some examples include cars, appliances, furniture, home renovations, et cetera. Some of the business financing, building, office furniture, computers, photocopiers, human resources, vehicles, farm equipment, other operatories. So everything that you buy, guys, it is a financing decision because you're either buying it with your own cash and losing an opportunity to earning trust? Or are you using your someone else's money and paying someone else back principal and interest? So every decision that you make with the use of money is financing. Now we're going to talk about a better way. Is there a better way to finance things so that we have the money flowing back to our system, which is someone else's system? Well, that's why we are here today. We're going to discover that it's called the process of becoming your own banker, the infinite banking concept. So let's dive into this, this particular case study. So this particular family was introduced to IBC in 2020. They ordered a copy of Nelson's book, they read through the book. They met with a authorized infinite banking practitioner on the team. It is so important for us to understand what your goals are and what are you doing presently to achieve your goals so that we can take away the information and then at the next meeting actually show you what a solution would look like when it comes to implementation of the process of becoming a banker. So we take our time to actually go through the solution presentation with you because we don't get many opportunities. There's only one opportunity that we get to do things the right way and we don't want to miss that opportunity. So they were introduced to IBC in 2020. They're age 40, so husband and wife, they both same age. Now the goals, so I'm just showing some holistic goals, so was to take over the banking function for the purpose of financing cars. So that was immediate for them because they realized that they buy cars every few years, every seven to eight years to buy a new car. And they understood all the money that they've transferred away from the family for the cars that they financed so far and they wanted to change that immediately for the next car. And the next car that they're purchasing is 2022. So this year, so next car purchase is coming up. So this year, 2022, they want to build wealth for retirement. So cash values grow every single day because cash values must match that benefit by age 100. So as you're financing cars, financing things that you need from your system, your cash values keep building for future. For future. It could be used for retirement, for tax repassive income. So that was another concern that they had. And then obviously we met with thousands and thousands of folks and not one person that we met has told us that they have a lease on life. Shocking, right? We all have our best before dates. We just don't know what the date is. So it was very important for family to solve for that, which is family protection either if something was to happen to husband and wife, they wanted to make sure the surviving spouse and the other family members like children, they can go on living without having to worry about money. Because when we die, it's not just we who are gone. It's the income that we bring into the family that's also gone. And that income is there to, to build the the family's future finances. So life insurance is truly a replacement of income when we leave this planet for the surviving family. Now some facts. The family income is about $180,000. They actually, it's a little bit more than that with bonuses and real estate income that they have. But, but I'm just using $180,000 as conservative number for husband and wife. And they easily can save between 20 and 25,000 per year. And they've actually saved more than that. But I just wanted to. We always work with conservative numbers, right? So just conservatively, they set aside 20, 25,000 per year very easily. They have no life insurance in place today they have about $200,000 in cash assets and some other real estate properties that they own. You accomplish the objective of buying cars, doesn't matter which method you use or you don't have that money. Now, one of the things that I learned from my mentor, my coach is the reason why we don't have sometimes enough money in retirement is because of all the money that we use to buy and finance cars. Think about what I just said. The reason why most Canadians don't have enough money in retirement is because of all the money that they spend on just buying cars. If we can show you a way where you can actually have the money coming back to you for the purpose of buying cars, coming back to your system, would that put you in a much better financial position than what you already are doing? Would that give you more access to money at passive income time? The answer is yes. So let's look at how this family, just by changing the process of how they're going to go about buying cars, they created a financial advantage for themselves, husband and wife, and not just for themselves, but also for the next generation. So they started a policy in 2020. So action is everything. Once you catch this message, you know exactly what to do and then you'll take action on working towards becoming your own banker. That's exactly what they did. They started a policy in 2020. The premium that they started with is 50,000 per year. So if you recall, they're already saving about 25,000 per year very easily. And they had about $200,000 saved in someone else's bank. So they just wanted to kick start the policy with capitalization. So they're putting 50,000 per year and that $50,000 will go in for two years. And then after year two, they have the option to reduce the premium down to $20,000. So you can see the amount of flexibility that's built into the policy from get go. You can heavily capitalize the policy in the initial years just to get it kickstarted. And then going forward we can reduce the premium if you wanted to. The only person who can decide to reduce the premium is the policy owner, not the insurance company. Insurance company will react to how we manage the policy going forward. They still have the option to continue putting 50,000 per year because if they do so, the outcome will be even better for them. But we just wanted to build in flexibility for them from get go the starting death benefit. So the policy, the participating whole life policy wasn't the husband because husband was the major bread owner for the family. So we got $1 million of death benefit on the husband. So if they live a long life, they'll be fine by using the policy for the purpose of controlling the function called banking. And they'll be able to use a policy in future for retirement. The policy will give them more out than than what they put in while they were alive. It also creates that peace of mind of death benefit because nobody has a lease on life. We all have a best before dates. So God forbid something was to happen to husband, wife would receive $1 million in tax free death benefit. So if they live a long life, they're fine. God forbid they become an angel. The surviving family is still fine. Now for wife just to get her some death benefit, we started with term life insurance for now. And then after two years we're going to convert that term life insurance into a whole life policy. That's the beauty about term life insurance. Term life insurance are convertible. So we know today that we are insurable. But we don't know in 10, 15 years from today whether we are insurable or not. So if you have a term life insurance for the right company, we can convert that into a whole life policy without even qualifying medically and continue practice becoming your banker. So this was how we got started for this family. Now let's fast forward to this year 2022. Here's the car that the family decided to buy. It's a Tesla Model Y, the price tag on that car is $85,000. Now here were the options. So the family could have saved up all that money into checking account and then paid cash for the car. But you know, now that when we pay cash for things, we do accomplish the objective of buying the product or service, but the money is gone. The other would have been very conventional car financing through Tesla financing. They would have accomplished the objective, but all the payments would have left their family forever. Or they could have leased it same. They could have leased it from Tesla too. But they also understand leasing is a permanent transfer away from money. The fourth option is become your banker. And that's the option they selected. So 2022 car financing now 2022. So two years after they started the policy, the total cash value in the policy as of today is $95,000 and is growing every single day. The daily cash value growth in the policy is $32 a day. Now you may be wondering how does cerebral know what the daily cash value growth is? Because being the advisor, I can look at values today for them and I can look at the values very next day. The difference is the daily growth. That daily growth in the policy stays the same over the policy anniversary date. And once they pass the policy anniversary day, the daily growth also becomes better. That's how we design policies. Remember we talked about the cash in the policy grows every day for them based on how the policy design. The daily growth in 2022 is $32 a day. And all they have to do is wake up. They wake up, they have $32 more in the net worth. If one of them doesn't wake up, the other family gets a tax free death benefit. They're fine financially. Now the capital required to purchase a car is $85,000. Now the death benefit. So they started at $1 million of death benefit. And I'm just looking at husband's policy because husband has a whole life policy, wife has a term life. So husband's death benefit, as you're aware started at $1 million. Now the death benefit in 2022 is almost $1.5 million. That is how we design a policy. The policy is designed so that the death benefit increases every year because insurance companies contractual guarantee is that by age 100, cash values and death benefit must match. So the more death benefit we buy in policy every year, the more acceleration we'll have in the cash value. So death benefit goes up every year, which increases your cash value. That's going to increase the dividends too going forward. But Your premiums never go up. The premiums can go down, but the premiums can never go up. And only the policy owner can reduce the premium. All right, let's go through a policy loan process because they wanted to become their own banker. And to do that they have to initiate a policy loan. Now a policy loan document is a single page document and here's the input required by the insurance company to request a policy loan. And then compare this with how you are requesting loans today and let me know which one's easy. It's a typical question with an obvious answer. But again, some thinking is required because everything that we do in life is a measure against how someone else is doing. If you're making progress compared to who, if you're not making progress compared to who. So let's see how easy is to get a policy loan and compare with how you are requesting loans today. So name so first thing that's required in the policy loan request form is the policy owner's name. They want to know who you are. They want to know which policy number do you want to use to request a policy loan. Because one can have multiple policies. You can also initiate policy loans from all policies at one time if you wanted to. And they want to know how much amount that you that you need as a loan. So what you can borrow as a loan from the insurance company is equal to 90% of your cash value. So 9, 0. So loan to value is 90%. Now the other question they want to know is how do you want to receive that money as a loan? Do you want to receive it via check? And if you want to receive it by check, just give us your address, we'll send it to your address. Or if you want to receive that money electronically via electronic fund transfer, just send us your banking information and we'll electronically deposit this money in your bank account. And all they ask for is a sign and date. So current signature, current date and then signature in wet ink. And that's all that is required, required to request a policy loan. It's a loan process that I'm referring to right now. Name, policy number, amount, electronic deposit, sign and date, that's it. When you have a policy, a participating dividend paying whole life policy, you only pre approved for loan, you don't have to qualify. No income check, no verification, no proof on what you need the money for, no consent and repayment terms, none of that. It's on demand capital available when you need it and when you request a loan, here's what the loan some of the facts in the policy loan. So outstanding policy loans do not impact your daily cash growth. For for them, if you remember, the daily growth was $32 a day this year. So when they initiate a loan which is equal to 90% of the cash value for the purpose of buying the car, they are not going to interrupt the daily growth of their own cash in the policy. Because insurance company is on the hook to fulfill the daily cash value growth, they do not reduce the death benefit. So policy loan outstanding do not impact your death benefit while alive. If that occurs, any outstanding policy loan will be deducted from the death benefit and the family gets the rest.
Policy loans outstanding do not negatively impact your future dividends. Isn't that awesome? So if you are a policy owner, you're entitled to profit and that profit is shared with your dividends. If you have a policy loan outstanding, it doesn't negatively impact your dividends. Now there are companies out there which have a whole life policy where you initiate a policy loan and they'll recognize that you have a loan outstanding and they may impact your dividends. But the companies that we work with, they do not impact your dividends. If you have a loan outstanding. A policy loan does not show up on credit report. It's a private loan between you and the insurance company at that. Any policy loan outstanding gets deducted from the death benefit and the family gets the remaining money. So in 2022, so they're ready to, they took out ready to take a policy loan to buy the car, Tesla. So the daily cash growth is $32 a day policy loan. So they initiated a policy loan for $85,000 and the money was received in seven business days. Remember their cash values were around just over $92,000. And there was enough money that they could collateralize the cash value for to get the policy loan because the loan to value is 90%. So they initiated a policy loan. What insurance company did was insurance company used their cash as collateral. So 85,000 of their cash was used as collateral. And they put a lien on the death benefit for $85,000. So in case the loan was outstanding and death occurred, they would just deduct it from the death benefit. So the key word is guys, the lien for the loan is the death benefit. It's not what they're going to buy using that money. That's the most important thing. So when they initiated the policy loan to buy the car to technically own that car free and clear and that policy loan debt doesn't show up in TransUnion in Equifax and policy loan doesn't interrupt the daily growth. Now, when you initiate loans, in this case from insurance company, because you're not using your money, you're using insurance company's money, there's going to be interest on that money because you're using their money. Although you are a co owner of the business called the insurance company. And the nature and the purpose behind the business is to be profitable. So if they can deploy 85,000 somewhere else and own a profit for you and everybody else, why should they give us the money for free? Money has value attached to it and the way they add value to it by charging interest because interest paid back on policy loan becomes profit for the business. And more profit for the business means more dividends for us. We're in this together. So the daily interest charged by the Insurance Co. Is $14.43. So simple interest and it's calculated on daily basis and charged on daily basis, but it's capitalized on the policy. As a policy owner, you decide how to pay back the loan principal and interest. They can't force you to do anything. So the interest from this particular company is 6.2%, which some of you may think it's high. But let's go through the example and you're going to realize that it has nothing to do with rate. It has everything to do with the attributes of how you financing things from the policy. So the interest is $14.43 when they initiated this loan. But this policy loan interest or policy loan outstanding did not interrupt the daily growth that they have in the policy. Do you think family is doing okay increasing their net worth every day by $32 even if they have to pay insurance company $14.43 to use their money? Nelson said the whole idea behind the process of becoming a banker is to recapture the interest that you are paying to someone, in this case insurance company. They recaptured the interest in the growth of the policy. So how they're doing so far financing it at 6.2%. They decided to pay back policy loans to the insurance company 1125 per month because they set their amortization by themselves. They said, hey, we would have amortized this from Tesla anyways. Over the next 96 months we're going to do the same amortization, but we're going to change who's getting the money. And we know that we are in 100% control of the repayment process. But what we're not going to do is steal the piece because we are practicing Banking, we're practicing financing. So they set their own amortization and the payment is 11:25 per month for 96 months. They're just paying $85,000 back to the insurance company at 6.2% over 96 months. That's all that they're doing now, monthly cash value growth. So now I'm going to break down the transaction every month. Because the loan repayment is monthly. Everybody thinks in terms of monthly, it's easy to understand everything monthly. So I'm going to break it down on monthly basis. So monthly cash value growth is 960, which is basically $32 per day multiplied by 30. Because policy does not interrupt the cash value growth that's happening no matter what. So monthly growth is 960. Now monthly policy, loan repayment is 1125 set by them. Now monthly interest accrued on the policy loan is $432, which is 1443 multiplied by 30. So let's see the monthly transaction, what happens? So monthly transaction is policy grows by 960, cash flow increases 960, they pay back 1125. So 960 plus 1125. Now portion of 1125 is the interest which not going to access because that interest portion goes to the insurance company. So 960 plus 1125 minus the interest for the month, that's equal to 1653. So 960 plus 1125 minus 432 is 1653. So here's my question. They are paying back 1125 per month for financing the model Y and they're regaining access to 1653 again. And all they're doing is changing the process of financing things. They're not changing their goal of buying the car. They're not changing their cash flow because money was always sitting in someone else's bank. You just redirected the money into their own bank. All they did was change the process to get to the objective. For every 1125 that they're going to pay this year, every month, they're going to have access to 1653 again. A car is a depreciating asset. They just converted the car into an appreciating asset just by changing how they're going to finance things. If you were going to give me 1125 or 1125, you give me, I'm going to write you a check for 1653. How many times and are you going to give me 11, 1125 per month? And this is happening at 6.2%. Interest has nothing to do with the process of banking, everything has got to do but being the four characters in the financial play, the depositor, the borrower, the banker and the bank owner, that's who they are now. And this is the outcome that they've created. And every year going forward, as they're paying it back, it's just going to get better. For every 1125 they're going to pay back, they'll have access to more money because cash values increase every year. It grows every day, but it accelerates every year going forward. How is this for stress free, peaceful way of financing a car? Now if life happens, can they reduce this payment? Can they take a vacation from the payment? Can they reduce it down to 900, can they increase it to 2000? The answer is yes, because they control all that. But if life happens and they actually had this finance from Tesla, can they call Tesla and say, hey, I don't feel like making a payment this month, can you allow me to take a vacation? That's not what Tesla would say. Tesla said we need money because that's, that's an asset to us. That's a stream of capital, that's an asset to us. So when you are all four characters in the, in the financial play, you create wealth and you create a stress free way of living and financing going forward. So just to summarize, they are building wealth called cash value growth while paying back debt called policy loan. It's a debt that they control and own 100%. They are continuously compounding their family wealth for retirement because cash value growth doesn't stop without selling policy loans. Cash value growth doesn't stop at what happens in the financial world. It just keeps getting better. Total and absolute control over loan repayments. They can decide and change their loan repayments going forward. They can take a vacation for as long as they want. They can increase it, accelerated, they can reduce it. They are the bankers. Policy loan is a private arrangement between them and insurance company doesn't show up on any credit report. So if you are, if you're a real estate investor and you start to rely on banks for the purpose of financing, wouldn't it be important for you to keep things private on how you go about financing things so that banks don't see that as a extra debt. God forbid, if the husband dies, he doesn't leave any indebtedness to his family. In fact, he will leave behind a car that is paid off because death benefit will extinguish any policy loan outstanding and the family will still get the remaining money. So in Case he died the very first day he took ownership of the car. The policy loan outstanding was $85,000. His death benefit was 1.4 million. So 85,000 will come off the death benefit and the family gets the remaining death benefit tax free. Interest payment and policy loans adds more profit to the business. So don't steal the piece. More profit for the business means more dividend. Have you ever heard a company ABC died because it had too much capital? No. The more capital we pump into our business, the stronger a business becomes. The stronger a business become, the more money they can put to work for us. The more money they can put to work for us, the more dividends we are also going to earn from that business by co owning the business. And that's all it takes is to have a participating different paying holder policy to co own business like an insurance company to share in profits with them. Now whenever they make a loan repayment, they're actually creating access to more capital for more opportunities that'll surely come for them. Because when you have readily available access to capital, opportunities will surely come attract you. I have an important question to ask you. Have you purchased your last car? I met with a client, they were 78 years young. So wife was 78, husband was 81 and they just got started with their own family banking system almost. It's been four years now that they've been clients and then they use the policy for the purpose of financing the car and they thought that that's what's going to be their last car. But I didn't agree with that. But they were just getting started at 870, 78 for wife and 81 for husband. So have you purchased your last car? Think about the cars that you will still need to buy. And knowing what you know now, how much of your hard earned money are you willing to say goodbye to just for the purpose of financing cars? If your answer is zero, then we can absolutely coach you in achieving financial control and money coming back to your system and create that financial stress free way of living by becoming your own banker in life. That's where we get our energy from. This process just doesn't apply to cars. You're going to buy goods and services till the end of time. It doesn't matter what you buy, someone has to control the banking function over the transaction for you. And that someone should be you. By changing just how you go about buying things, how you go about financing things, just by adding one extra step to what you already are doing, you will make radical financial improvement for yourself, your family and your business.
