Jayson Lowe walks through a case study where Mira deposits $500,000 into a participating whole life policy over 10 years, then withdraws $45,817 annually tax-free from 65 to 90, leaving $1,080,000 tax-free to heirs. He argues this beats RRSPs because the government can't change the rules on your money.
Questions this video answers
$50,000 per year for 10 years (total $500,000).
$45,817 per year tax-free from age 65 to age 90.
Total out $1,191,242.
$1,080,000 left income tax-free; Mira passes away at age 91.
Chapters
If the stock market goes down, her.
Cash values go up.
If the stock market goes up, her.
Cash values go up.
If the real estate market goes down.
Her cash values go up.
If the real estate market goes up.
Her cash values go up.
If the economy recedes, her cash values go up. If the economy expands, her cash values go up. If tax hikes come into play, her.
Cash values go up.
If tax deductions come into play, her.
Cash values go up.
You get the picture.
Now we want to chat a little bit about passive income. What does passive income mean? Well, let me address this whole thing about retirement. When you hear the word retirement, the first thing that comes to mind for me is to be taken out of service. I love aviation. I'm an aviation enthusiast and I think about aircraft. And you may have heard at some point in your lifetime this particular type of airplane is being retired, it's being taken out of service. And they fly these airplanes to this very large airplane graveyard and they just sit there collecting dust and rotting away. The one force that you have to fight is gravity. And so when you get to that point in your life and you're ready to retire, whatever retirement means to you.
Remember that gravity wants you back in the ground. And so if you're not in motion, if you're not in motion mentally, if you're not in motion physically, then you become low hanging fruit for gravity. And so if you've got this passive income stream and you're ready to do something different, I would just encourage you to stay active. Stay active physically, stay active mentally, and don't become low hanging fruit for gravity. Okay, now I'm going to go back to what I want to share. And this is hopefully going to resonate well with you because you may be thinking about this time in your life and how you want that to unfold for you and whether you want to be in a position where you're stressed financially or you're completely relaxed financially. So what we're going to do, we're going to talk about MIRA. MIRA's 50 years young. And MIRA's objective was to have $45,000 of net annual retirement income from age 65 to age 90. A very specific, well defined objective. Those are the types of objectives we like to know so that we can engineer the system and more importantly, the coaching on the process to achieve that objective. So, so Mira begins depositing 50,000 per year into her dividend paying, participating whole life policy for a period of 10 years. She chose that timeframe because it achieved her defined objective. So the Total that she deposited into the system a half a million dollars from age 65 to age 90. MIRA accesses $45,817 per year tax free. This is no coincidence that the number is 45,817. It's an engineered outcome. The advisor engineered the policy to achieve that defined objective. Total out 1,191,242. That's a lot more than what was put into the system. So what am I putting in, what am I getting out? Mira passes away at age 91 and leaves 1,080,000 income tax free to her named beneficiaries. So let's just zoom a little bit closer into what transpired here. We had a half a million dollars go into the policy. Now that money was not trapped in a vise. Cash value began accumulating from day one. So they were able to utilize the system leading up to retirement for all those things that they need to go about financing in their life. Then in retirement, they're able to use 45,817 per year tax free, for a total of 1.191 million. So we are not triggering any taxable event. Tax rates could have gone up to 80% for Mira and that wouldn't have impacted her because the moment there's a tax hike, tax free becomes instantly more valuable. And so at death, all of that asset was replenished back to the family. So all of the money that Mira paid into the policy, plus more so more than double what she paid in, comes back to the family on a tax free basis. The only loser in this scenario is the government. This is all happening on a tax free basis. And so now the surviving family has capital to continue funding their own system of policies so that when they get to passive income time, they can repeat the same cycle, but there's just more money to repeat that cycle with, and then it transfers on to the next generation, et cetera. But you've got to not only transfer the money, what Mira did in this circumstance is she educated her family on the process of becoming your own banker, the infinite banking concept, so that she wasn't only transferring the wealth in the form of money, she transferred the wealth in the form of knowledge. And that's why Nelson said in his first golden rule that you've got to think long range, meaning you've got to think three generations past your own. So it's not only about you embracing this concept and the knowledge, it's about you transferring that knowledge to the next generation and coaching them on how to Transfer it to the generation after. And so on and so on. Now ask yourself this question in mirror circumstance. Is it easier to save $500,000 inside of a policy? Or is it easier to accumulate 1.191 million inside of a mutual fund or a registered retirement savings plan? Remember the golden rule. Whomever has the gold makes all the rules. And in this case, who's got all the gold? Mira. She became a co owner of the life insurance company. Her policy's cash values were contractually guaranteed to rise every single day without interruption. That guaranteed rise in value is not tied to the performance of a stock market. If the stock market goes down, her.
Cash values go up.
If the stock market goes up, her.
Cash values go up.
If the real estate market goes down.
Her cash values go up.
If the real estate market goes up.
Her cash values go up.
If the economy recedes, her cash values go up. If the economy expands, her cash values go up. If tax hikes come into play, her.
Cash values go up.
If tax deductions come into play, her.
Cash values go up.
You get the picture. This is not an investment.
If she had taken the alternate route and put all the money into mutual funds inside of a registered retirement savings plan, is she really saving? She's investing, she's not saving.
And this is a registered plan. So whomever has the gold, in this case, the government makes all the rules and rules can change. And she would be laying awake worrying at night. Especially with the phenomenon that we're experiencing right now and inflation rising and the inevitable tax hikes that are on the horizon. Her and her husband would be laying awake wondering, are we going to make it? She wanted certainty. She wanted peace of mind. She wanted guarantees.
That's what this contract provided. Isn't that good?
