Expanding Your System of Policies In Canada

We've continually spent less than what we earn. So if you earn a dollar and you spend 80 cents of that dollar, well, a good place to begin with your system is to take a portion of that 20 cents, not the entire 20 cents, but take a portion of that 20 cents of discretionary money and start somewhere where it's comfortable and affordable so that you get into a good rhythm of simulating. The best way to learn is to simulate for yourself.

Well, term insurance in a life insurance industry is kind of like an option to purchase. Yeah, you pay an amount every year to maintain insurability. You're insured for whatever that insurance value is. Maybe it's 500,000 million bucks, $2 million, whatever it is with Insurance Company ABC. If you've got that policy with Insurance Company ABC, you can convert that at a future date because you're already insured with company abc. Yep. You don't have to medically qualify for the insurance. So if you've developed a medical condition, you can still initiate a new permanent insurance contract, no questions asked. If you want to augment that contract and have some more, you know, you know, do paid up additions and things on it, there might be some underwriting requirements there, but they cannot deny you the ability to have that conversion regardless of your health status. So it's a very important tool. But the key thing is that it's an option. So you're paying whatever you're, say you're 500 bucks a year on your term premium. You get this coverage so your family's covered for more death benefit, you're actually getting a benefit for that value. And then additionally you have the ability to turn that into another contract, another part of your system of policies. When the time is right. Right. So really the question that comes up, Jay, is how do you know when the time is right?

Well, you'll recall over the years when we used to ask Nelson that question, and that used to come up actually a lot in the seminars that he did as well, especially when it was a seminar where it was advisors who were there. So he would deliver his 10 hour seminar before each annual Infinite Banking think tank conference. And primarily the majority of the audience were financial professionals. And that was one of the more common questions that would come up because clients are asking advisors, when should I expand my system? And Nelson always responded the same way. He would say something to the effect of whenever you can. And much like your journey, Rich, I mean, we began with a policy and then we added another policy and so on. The trigger for that was we've continually spent less than what we earn. So if you earn a dollar and you spend 80 cents of that dollar, well, a good place to begin with your system is to take a portion of that 20 cents, not the entire 20 cents, but take a portion of that 20 cents of discretionary money and start somewhere where it's comfortable and affordable so that you get into a good rhythm of simulating. The best way to learn is to simulate for yourself. So you have policy number one. You may already have ambition of, hey, I want to create a policy on my spouse or my children or my grandchildren, my nieces, my nephew, my business partner, key people in my company. But it all begins with that one policy. And then when you get into that rhythm and you're simulating the process, the enthusiasm is not going to dry up and you'll get inspired to say, okay, now I think I can, I think, you know, I was putting five of that 20 cents into policy number one. I think I can comfortably manage 10 cents going into my program.

Then, you know, you can. That's the time where you should create another policy. This can grow to become enormous. We have started with one policy. We have more than 62 policies in our system now. And it was all occurring based on what, what I was just saying to you, like the, the logic behind it. And not to mention, much like yourself, growing a family, children coming along, adding a policy on the children, using those policies for figure skating, hockey, skipping swimming, basketball, volleyball. You've got tournaments, equipment, hotel stays, fuel, food, all of these things that require money. And each policy can only accommodate so much of the banking function as it relates to your needs. So as your needs increase, the need to take control of more of the function increases. Your policy can only accommodate so much. So there will come a point where you've got to expand your system to accommodate your degree of control over the banking function as it relates to your family or as it relates to your business.

And one of the things you tied into was, you know, again, watching Nelson, having discussions with Nelson, especially in live seminar format. Again, that question was always asked. I know I asked him the question one on one, multiple times. And Nelson's answer was always the same. He would say, well, Richard, as soon as my feeble brain could envision doing so, you know, Nelson, when did you know it was time to get another policy? Well, Richard, as soon as my feeble brain could envision doing so. And, and I, I love that. And it's always sticks with me because the, the, the teaching point is that the only limiter on the size of your program is what's here. Yeah, there's some cash flow and asset based stuff, but it's how you view the money that's running through your life.

Right.

And, and, and as you deepen your understanding and you get practice, you start to recognize, okay, how much liquidity do I have? How much can I have access to in a policy as I build it? And as it's getting better and more proficient, you can say, well, you know what, because of that, I may, I could actually do a larger number on my next policy than I anticipated. Because now I'm familiar with the loans process. I know how long it takes for me to receive, you know, a policy loan back to my bank account. And I've, I've repaid a couple. I see how easy that is. And, and so it leads you to change your thinking so that you can recognize how much more is possible for you. And I'll use an example. So again, the very first policy I had was a whopping $4,219 a year. And that was the most that I could do at that time that I could conceive and relative to what was going on in my life at that stage, you know, moving from a career as an electrician, going cold turkey into real estate and you know, not having any income coming in and then immediately shifting into another business and then, and then shortly thereafter learning about IBC and saying, this is what I really want to do. This is the thing I've been looking for my whole life. You know, there wasn't a whole lot of income coming in, I'll be perfectly blunt. And so that was a, it was a stretch for me, a real stretch. And I'm very glad I made that decision because I wasn't going to get into this environment of this business and teach people about Nelson's message. Right. I myself was not a participant. If I wasn't willing to do this for me, why on earth would I suggest anyone else do it? You got to walk the walk. If this is what you're doing, is what you're teaching people, you sure as heck better, better own some of it. Like for anyone who's in the insurance industry, if you're helping people get insurance and you don't own insurance, you got to wonder, where's the. Miss, where's the, what's going on? Like, what's the mismatch? Right?

Totally. Yeah.

Anyhow, so you know, then, then the next policy I got was it was about roughly 200amonth, you know, 2,400 a year. Now that policy was a small whole life amount and it had a big term rider on it. And that term rider was a part of the cost. Of course, I don't remember, it was like a million or $1.2 million of term insurance. Well, shortly after getting that policy, Jason, you and I and a number of our colleagues, we went down to an event and we, we did some learning around this process and we got a new hard drive dropped into our heads around our thinking about this, this process. And literally the moment I got back, this is six months after that policy was initiated. I had, I had realized I had changed my thinking and recognized, you know what, with this new information I believe I can amplify this. I now see how it's possible for me to do more. And I immediately converted some of that term insurance and I got another policy that was $6,000 a year. So I went from the 4,200 a year, the 200amonth and I took a chunk of that 200amonth policy, had term insurance. Boom, I initiated a conversion and I, and I still had term left over, but I had now have a new whole life policies. The total insurance value didn't change, but my deposit changed and the structure of what I had. So now three policies and so forth.

This is one of the reasons why, among many, that we created our quarterly group client coaching sessions. One of the primary reasons that we did that is because in Nelson's book he talks about, there's no need for you to feel like a lone ranger. You should surround yourself with like minded people and in this case a community of people who are practicing this process in their lives. And you just, you never know what degree of inspiration you're going to receive from something you hear, something you see. And it's an exercise in your imagination as everybody knows, where you'll be inspired like Rich. You can attest to this. Whenever we had the pleasure of seeing Nelson speak prior to the think tank because we were inspired to be there among colleagues, sharing, learning, again, thinking about our quarterly group client coaching sessions. We're trying to build this amazing community. Well, we literally would be sitting there taking notes and listening. And then it was only a matter of when we look at each other, look at a few of our colleagues that were there as well, and we would say, okay, the moment we get home, we're cranking up another policy. Like you just, you get inspired to grow your program because of the possibilities that you open up for yourself in the way that you're thinking. And that never ends. I get inspired when I attend a quarterly group client coaching session and I want to grow my own system of policies even more. So super important to be surrounded by people who are implementing this in their lives so that you can continue to expand and the inspiration that you receive to, to apply it more and to take more control of that function in your life as it relates to, to your needs. And that function is the process of banking.

Well, and what you mentioned brings me up to page 65 of, of Nelson's book. And there's a couple things that Nelson says in this that I really love. And you know, reading this book as, you know, as many times as we have, I'm due for a full, full read through, but I've been chipping away at different components here. You know, Nelson says, how do I get started? The most important question or word that comes to mind is desire. Without it, you probably can't do it. Remember, remember Parkinson's Law? Back in part two of the book, everyone is already spending all financial resources on what he or she thinks is best. There has got to be some honest introspection at this point. And a commitment to get out of financial prison must be a burning passion. There's gonna, this is gonna require a change in priorities in life, recognizing that controlling the banking function personally is the most important thing that can be done in your financial world. And then he goes on to talk about joining a wealth club and having, you know, it's like developing a regimen of physical activity and that sort of thing. You need a coach and what have you. Well, the wealth club is like our client community and having, you know, resources of that nature and, and, and, you know, again, how do you start your system? Well, getting started is one thing, and then how do you grow that or add another policy or continue it? It's based on how you're thinking what you perceive as possible. All it takes is one comment, one reread of Nelson's book, or all of a sudden you're like, oh, that's how I'm gonna do it. Or oh, I didn't consider that before. Oh, oh, I, I listen to the Client series on the wealth of Bay street podcasts and I was listening to, you know, Sean Quigg, the lawyer, and he said, hey, this is, you know, how I thought about my real estate investing. Or I was listening to so and so talk about it. And it just, you know, really another great example that would be our interviews that we've done with David Stearns Nelson, son in law, him talking about his family system and how they grew it over time. What an incredible lesson. And for our clients, you know, who've participated in, you know, hearing David be able to showcase his family system that was built over and how Nelson began it and then how it cascaded over generations. So when you get to see these things and get, you know, you heighten your awareness. Sometimes there's things that are on the edge of your vision and they're kind of blurry. It's like a fog or it's in the Merc. And then all of a sudden the wind blows by and it gets crisp and you can see it clearly. Well, things like that happen in our mind when it comes to our own financial life. And often it's just something that someone shares with you. It's podcast you listen to. It's a, it's a video you saw, it's a reread of a book where your brain just gets attuned to it and all sudden that, that vision, that idea becomes crisp. And you now know the next step to implement.

And look at it from this vantage point too. Imagine if, imagine if you and I opened up a retail store and we did the ribbon cutting ceremony. We were super excited. And then we never went back to the store. So we didn't visit it, we didn't take a look at how it was doing. We didn't ever see customers coming in or out. And then contrast that with opening a retail store where the owners are there, they're present, they see the reactions from customers, they see the lineup out the door. When they run that special for that product, they get excited, they pay very close attention to what's happening in the business. They're likely going to be inspired at some point to open up another branch of that store. Because, hey, if it's doing well here, well, let's find a neighborhood that has similar demographics, similar characteristics, similar economics, and let's put the shovel in the ground and build another branch to the retail business. And the more you do that, the more inspired you get to do that, even more because you're, you're involved in the business. You're not. There's a difference between being a driver and an operator. If you get into a piece of equipment and you're just a driver, you're going to tear up that piece of equipment, I promise you. But if you get into that equipment and you're an operator, you're going to make money. And so be an operator in your, your family banking system, your, your business banking system, don't be A driver, be an operator.

When I think, oh, it's good. I think one of the things that, that people who are just, you know, getting exposed to the idea or maybe they, you know, they've started there may be, I don't know, a couple of months in or a year or 18 months into their journey, they maybe got one policy or maybe they have, you know, two or three, like husband and wife and a, you know, you know, a couple kids or whatever, a couple policies like that. And that's a system right there. You've got multiple people in the family insured. Well, that's part of having the system. And it's, it's not just limited to one person, it's only limited to how many people you can insure and the resources you have to get that insurance. All right, and can you, can you get it past underwriting? That's the other limitation. But when you, when you recognize that your life is changing in dynamic and things unexpected things show up, windfall events, you sell a piece of property. You know, hey, if you're in the Toronto or you know, Vancouver real estate market, you sell a piece of property, you're probably going to end up with a big fat chunk of change right now because of what's going on there.

If you have a property burned down, I had a client, an existing policy owner, he had a whole apartment complex burned down in Winnipeg.

Oh, wow.

No plans to reconstruct it.

And he's gonna, obviously they're, they're gonna, they're helping everybody get re situated, get reload. Thank God nobody was hurt. But the very first thing that came to mind for him, he reached out, shared what happened. Well, our response immediately is like, hey, is everybody okay? We hope nobody was injured. You know, everybody's fine, but there's going to be a windfall coming and I got to make sure that whatever can't be held inside of my existing system gets accommodated in expanding my system. So from a tragic event comes a blessing in disguise, in, he's gonna, he's gonna rebuild. He may not do it there, but it is his banking system now that is going to take care of everything for him because he's going to create more room for more windfalls and grow his banking system. At the very same time, it's increasing.

His family is going to be dramatically more protected, increasing the, the net estate values, the tax free estate values that are going to show up totally perpetuating the possibility of the system. Yeah. And by going through this experience so again, it's, it's Just being a good steward of recognizing this is an opportunity for me to grow. And here's, here's an unexpected thing that I can now use to grow my system. You know, I, I've had similar experiences with people who had, like, car accidents or some kind of a. Of an incident where there's an insurance payout. And it's, you know, it's, it's taken a couple of years or whatever for it to happen, but they know it's coming. And so there's a bit of a plan in place, like, hey, we're going to use this because the circumstance was it impacted, you know, one of the, one of the kids. Everyone's fine, but there could be future complications. Well, we're going to put that capital to work in a policy for them, and we'll use the, the funding to, to pay for it for three or four years, and then we'll, we'll be at, you know, do it out of pocket at that point, but we'll get it kickstarted, get it initiated. Right. You know, people get raises all the time. We, you know, there, there's people that, you know, there's, there's just all kinds of things that happen. You increase rent on a rental property, you know, any number of things that can take place that can create a little bit of extra value. Now, another thing that we see that people do sometimes, Jay, is they, they, they get excited about this process. They want to get started with becoming your own banker, but they think that it takes a lot to get started, or they want to know, hey, is it worth me getting started with, you know, only 200amonth? Well, absolutely. It's worth it because it's worth, it's worth getting started, right? But sometimes people will hold off because they want to make sure they can go a little bit bigger and everything. Now, there might be some validity to that, but get clear on what's the reason. Like, if you don't have coverage, get the coverage, right? If. Because you don't know how many tomorrows you have.

Yep, that's right.

And so if you're one, you know, don't ever hold off on getting quality insurance in place because you don't think you can, you know, it's going to be valuable enough for you. I'm sorry, but insurance is valuable. Get over it. Like, I'm pretty happy. I've got a furnace point. In fact, I'm about to apply for a couple new policies on my wife and I for additional kinds of insurance, some for some critical ills. Jason you and I were talking about this, you know, through emails the other day. I'm going to be initiating some more contracts. I have some already. I have some on my wife. I have it on my kids, but I just don't think I have enough Right. So it's time to re up. It's time to re up and keep increasing, because if something happens to me, there's a dramatic financial impact to my family that we have to take care of. It has to be done.

Absolutely. And that brings us to a really important point that we've been, you know, talking about as a team as well, and the. The reality of how cancer is impacting families. If we were to fill up an arena of people and stand at the center of the arena with a megaphone show of hands, how many people in this stadium know someone who's been impacted by cancer? Every hand in that stadium is going to go up. And so having not only your dividend paying, participating, whole life insurance contracts as a tool to empower you to implement a process, but also having critical illness coverage in place so that the very person creating the capital that creates the tool, heaven forbid, if that person gets sick, shouldn't have to be worrying about the mortgage payment, the gas, the groceries, the policy premium, like all of that can be taken care of through a living benefit of critical illness coverage. And everybody should own it. If, if you're watching this now or after the live session and you do not have critical illness coverage, you have an opportunity because here's how incredible this cancer is in terms of its proliferation and what's happening to families. If you put a room of 10 people together, and again, I'm simplifying this to a great degree. Five people in that room are going to experience cancer at some point in their lifetime.

And this shouldn't. Your life should never be a heads or tails deal. Hey, pick one. Heads or tails? Heads you get cancer, tails you're going to be okay. You don't want to play that game. If it, if it does happen, it's far better to have coverage in place that is going to take care of you while you're focusing on healing your body. And that is just so important. And gosh, you know, shame on us, right? People are reaching out, going, we had.

No idea that you did that.

Well, yeah, you know, hey, thank you for saying that because that's a stark reminder that we've got to do a better job at communicating to the marketplace that we'll provide that for you.

We'll.

We'll put that in place and, and we're pretty darn good at it. So get that coverage on your life. You'll be glad you did.

And it's not just, you know, your life like we work with families, we work with business owners, but business owners have families. Yeah, right. And so we, we really work with families, including the families of business owners. And we often are putting policies in place for, for children, I would say we, we do a ton of that. Like a truckload of it. Oh yeah. I, I'm so happy when I get to help implement a, a child policy for a family because that means, you know, to me that, that showcases that this is a, this is a family that's actually really focused on a multigenerational thinking. They really want to, you know, take. People are anything like me or like you, Jason, what you do and the things you go and do, you have a purpose. But a lot of that purpose ties back to whatever you're trying to do, to the lifestyle you want to live and create for your family and how you want to show up for your family. What kind of demonstration do you want to be to your, to your children? Well, when you implement the process of becoming a banker and you get a policy on your kids, not only are you protecting them, you're protecting them for life. You're automatically creating a cascade effect to a generation that doesn't yet live because the grandkids aren't here yet, you know, in this, in this case. So you're, you're multi generationally connecting value of a decision you make now to something that's probably 70, even 100 years into the future.

Totally.

I, I mean, just think about that. You can make a decision today, an impactful financial decision that can have a hundred year impact. That is a, there's not a lot of other things that you can do in your financial life that can, you can say that about and knowing that that's going to happen. And, and you can also initiate critical illness on kids. So again, I have critical illness on, on both of my children and I did that immediately as they were born. It's the moment they were born. And in fact, you know, it's a pretty good sized plan. I'm happy with the plan. If I could go back and change how I structured it a little bit at the beginning to today, I might have made a couple of tweaks. But I communicate those things forward to my clients. Like, hey, here's how, here's what I did and you know, today, here's how I might do it differently if I was looking at my own, my own structure. I would maybe make this slight adjustment here. And the end result is you're creating a pool of financial value. The probability that something's going to happen to my own children again. In a room of 10 people, there's five people that are going to be impacted. Well, at what point do I want to have the money show up? I don't know. I'm hoping that they're going to live a really long, healthy life, but I can't control that. I can't control what they do. I can't control the environment.

Right.

They, they are going to be in. I can't control the work that they're going to choose to do. And, you know, if my son decides that he wants to go work at a chemical plant or whatever when he's 25 years old and he's surrounded by all kinds of, you know, dangerous stuff, well, maybe that could cause a health impact to him in his later life that we can't determine. There's an unintended consequence there. So I'm glad that we've initiated this program in place for him so that there's protection. I have peace of mind. My wife has peace of mind. And it's inexpensive for kids to get that initiated. So there's no reason not to. There's just no reason not to. You and I have both experienced having conversations or meeting with people where they've had something happen to a child. A health risk has shown up for a child. Yep. And that child is no longer insurable. They're going to be struggle with being insurable for probably 10 or 15 years. You know, things like heart murmurs and all kinds of stuff that take place. And things like diabetes, you know, early onset diabetes.

Yeah.

This can have a dramatic impact on insurability for a child. Well, if you have the coverage in place beforehand, then now you've got some dollars that show up. You've got some protection in place because you got the insurance beforehand. You don't have to worry about trying to get it later. Another thing to point out for people is that there's a flexible guaranteed insurability option. So it goes back to a system of policy. We have something called flexible guarantee insurability options where you can initiate the ability to get more coverage on a child at a future date. Yeah. Typically at age 21 and age 25 varies by company. So for a couple of dollars today, an option on tomorrow. Like we talked about options at the beginning of our chat here, you can initiate another contract. Regardless of Insurability on your child. Well, that's thinking about your system. That's a proactive step to grow your system 10, 20 years from now, Right? I have that for my kids. I know you have it for your kids. In fact, I have it with two different companies for my kids. You know, all together I can get about 750 grand of new insurance coverage, you know, starting at age 21 and then at age 25 in combination on both of my children. It cost me very little per year to have that option in place, regardless of health insurability for things that I cannot control. And how often are you scrolling through your Facebook feed or on the Tic Tacs or whatever, whatever the social media program that you're using and you see someone running a GoFundMe page because all the time, so and so's, you know, kid got diagnosed with blank or so and so can no longer work. Well, GoFundMe is an insurance. Guys, I'm sorry, that's not an appropriate way to insure your family. The appropriate way to ensure your family is to get freaking insurance. That's what it's there for. It's mutual pooling of risk with a whole crapload of people all over the country. So you can pay a fraction of a cost to get a big fat benefit.

That's right.

Why on earth wouldn't you want to have that? I don't get it. Yeah, crazy. And actually a comment here from Curtis. Thanks Curtis, for jumping, you know, happy Friday. Yeah, man, good to see you. Always, always love travel, Curtis, and thank you for this message. This is really important that you're sharing this. So Curtis, you know, his daughter was diagnosed with diabetes recently and thankfully we've got a policy in place and that policy has guaranteed insurability on it. Yeah. So again, initiating these things in advance, that was an unforeseen. Nobody can expect that that's going to happen and then it happens. Okay, well, you don't want to plan for things after they happen. You want to plan for them beforehand. The only way you can do that is to think about what's possible and you know, make a phone call, book a meeting with somebody, get it initiated, protect your family. It's not that hard. And even if you just want the basic protection, it's not that expensive. But if you want protection that also grows, then now you want to have a constructive plan about building something of value. Where you going to get, you're going to get all your capital back. And that's really where becoming your own banker comes into to play anyhow.

Love it.

There you go. System of policies. Jay that was good.

That was good. Hopefully, hopefully someone receives the inspiration and says, wow, this all makes really good sense and I think I'm ready to, to expand my program and add another branch, so to speak, to the family banking system. And so we, we hope that this was helpful to everybody who's watched.

And if you're watching on the YouTubes or the podcast later on when this airs, make sure you check out the other videos that are popping up on the screen. We do appreciate that and have an incredibly profitable and happy 2,022.