How Every Money Decision Impacts Your Wealth Building Journey

I get questions about I got to pay my premiums if I start this. The premiums are not the problem. The premiums are the solution. Because as you pay premiums, you're going to get access to an ever increasing pool of equity called cash value in your policy. And that's kind of key thing because you're going to need access to money throughout your life. You're going to be making decisions with money. And if you can utilize this process, you. You end up recapturing that interest that you pay to that life company. Hi. Today I wanted to ask you a question. Do you realize that every decision you make with money is a financing decision? Well, today I thought I'd do something just a little different. I'm going to talk about one page out of the book called Becoming your own banker Unlocking the infinite Banking concept by R. Nelson Nash. And that page is page number 26. That is just before the review of part one of that book. And that part one of Nelson's book has got so much information for you to take in. It really goes through a lot of the fundamentals of becoming your own banker. It really helps you understand about the process. So they're going to talk about the grocery store example, all right. You're going to learn that you don't want to steal the peas and that in order to start a business, it takes time and effort and you're going to find out about the problem. What problem was Nelson trying to help us understand? And see, that's all in part one. Then when he gets to page 26, he talks about basic understandings, some of what Nelson wanted us to understand about basic understandings. So the first thing he states, every decision you make with money is a financing decision. You either pay someone else interest or you give up the interest you could earn. Yeah. So it's like pay up or give up. That was kind of how he started. Nelson wants us to see that and he wants us to understand that we're either giving up or we're paying up interest. So I got a question for you. If you think about life and the fact that you're going to pay interest, most of us, if not all of us, have paid interest at some point or we're going to give up the interest we could have earned. Which amount volume you think is going to be larger? Well, I think the answer might surprise. I will give you that answer later on based on one reference from a bank that I found. Let's get into this page again. So right away, after he makes that opening statement, he talks about creating an entity or a plan. What he's asking us to do there is create something where we can have control over our need for finance. And he talks about, you know, some that you can borrow, lend money, or it is a improvement on what you're doing financially. So you lend money and it improves what you're and how you're doing financially. So that's what he talks about. So he gets into his experience in life and when he started to look at this, he found that the best tool. And he talks about that in part one. He talks about creating an entity using dividend paying, whole life insurance. And again, entity. And I just want to remind you it's about something that you can control and that you can lend money and it's going to be profitable for you. Now, when he talks about becoming your own banker, he's not talking about a commercial bank, brick and mortar building and all those good things and all those processes. He's talking about doing it at the you and me level, like it's a entity that we can emulate. A lot of things that happens in banking because of that. So that's what he's talking about. What happens when we set up a policy with a life company. All the first thing is we pay premiums. So they, as that entity and they have all the administration staff, they're going to do the job of administering everything. You're paying the premiums. They're doing the rest of the work when it comes to that policy and administering it. They put that premium money to work. Once they set up that policy, they know that with high certainty there's going to be a claim at some point in time in the future on that policy. So they go about putting that money to work. So they're going to lend it out, they're going to put it into investments, they're going to do a multitude of things. Now, what Nelson points out is that as the policy owner, we get the first right to the equity, the cash value that we have in our policy. That's right. We can access all that cash value if we want. Now, I wouldn't recommend in doing that because really you would be surrendering the policy at that point. I'm going to recommend that you take a policy loan. And the life companies that we work always allow us to take up to 90% of our cash value as a policy loan. When Allison goes on and talks, you got the first right. So you're the first one in the line. They're going to give you access to that Equity cash value in your policy before anyone else. So you've got that. And he says, well isn't that a great form of control? No one's going to ask you what you're doing with that money. They just give you access to it. That's what the life companies do and they do it very well. And then Nelson goes on and he speaks about what happens at the end of the year. Well, the life company takes a look at all what's gone on with within the pool of money they have where all these participating dividend paying policy owners premiums have been going. Now they're going to have expenditures, right? They're going to have claims. Every year life companies will have claims. They're going to also have expenses for staffing, all the administrative stuff and they're going to have premiums coming in and they're also going to have, you know, returns from the investments, they're going to have returns from policy loans. You know, people took out loans their loan borrowing money from the life company. Life company is going to charge them interest and that interest is going to go into the coffers of that life company. So at the end of the year they take a look at that. And one of the things that Nelson talks about in his book in a different part, but he does relate it to here too is that they are going to declare a dividend. And one of the things that he pointed out, and it's true, is that part of the premiums that you paid those actuaries design this, they take more premiums than they possibly need. They're very conservative. They want to make sure that they're going to be able to pay those claims. So some of what you pay as premiums may be and is a calculation just like an engineer would do. They over design the system. So part of what you get back in dividends is the return and premium. And in our country of Canada, those dividends are not taxable. When they stay inside the policy, they are not taxable. So that gets you, it allows you to put that back in and it's not taxable. So you don't have to worry about a tax event if your dividends stay inside your policy. The other key part that Nelson talks about in this particular chapter is that the dividends are used to buy paid up additional death benefit. Now that's if your policy structured the way that it should be structured for this process, it will go to buy paid up additional death benefit. That's right, it's paid up. And what that does is it adds to the death benefit. So it's paid up. Additional death benefit gets stacked on top of the death benefit you had in that contract before. And each year that the dividends declared, that death benefit goes up and up. Now why does that matter? One of the key contractual guarantees in that contract is that the life company will grow the cash value to equal the death benefit by age 100. And they're very good at it. Like I said, they've been doing this for hundreds of years and have never not declared a dividend. All the companies we work with have always declared a dividend every, each and every year, meaning that they're profitable. So they do a very good job of managing money. So when you think about what happens when you keep stacking more death benefit on top, you get that continuous uninterrupted compounding effect and it's ever increasing the base, and that's the foundation of the product that helps you and I when it comes to practicing banking at the you and me level, we get to emulate what a bank does. And it's not a bank, but it's a form, it's a plan that we have where we can get control of our need for finance over time. And so that when we go to make a financing decision, we can pay interest or give up interest, but if we're using this process, our money is going to grow uninterrupted. We borrow money from the life company, we don't take our money out, it continues to grow, we don't stop the growth, and then we pay interest to the life company. Great idea. Because they're going to share their profits with us. One of the things I wanted to leave you with is that when I looked at page 26, I go and I get questions about, well, I got to pay my premiums if I start this. Well, the premiums are not the problem. The premiums are the solution. That's right. Because as you pay premiums, you're going to get access to an ever increasing pool of equity called cash value in your policy. And that's kind of a key thing because you're going to need access to cop money throughout your life. You're going to be making decisions when with money. And if you can utilize this process, you end up recapturing that interest that you pay to that life company. And that's kind of key. Plus when you've not just been in cash and given up the opportunity for it to grow anymore because your money's in the policy and it continues to grow every day. Now I Don't want to get too much into the detail and haven't had a chance to really understand this. I'm going to encourage you to go to watchibc.com that's right, watchibc.com and in Canada, this concept works extremely well. And again, I'm going to encourage you, well, get a copy of this book because it's going to help you understand what Nelson was trying to help us see through this opportunity to do things differently with your money over time. All right, so this is what I promised you. Just a quick little review of page 26, the basic understandings. The first thing that Nelson said, do you finance everything you buy? And his actual verbiage was you either pay interest to someone else or you give up the interest you could have earned. Now, this is that little example that I wanted to just show you now. But what it showed is that interest earned is greater than interest paid to someone else. When you think about life, when you think about how much money flowed through your hands that you spent, you know, the lost opportunity for that money, I would suggest, I don't have any more proof other than this little example I've seen from one bank in the US that you're, over your lifetime, you're going to give up a lot more interest than you paid. That's kind of a interesting thought, but I want you to think about that. And the other thing I want you to remember is that there's benefits with continuous compounding. You know, we teach people all the time that, you know, you don't want your money just to sit somewhere, you want it to put it to work. And that's the nice thing about becoming your own banker. So with that, I just wanted to encourage you. If you haven't watched watchibc.com that's something you should do and just get to copy the book and read it.