How To BEAT The Rising Inflation

Hey, Canada, I know you've seen an increase in your bills, your food bills, your gas bills, your electricity bills, and that's all due to one thing, inflation. All right, so in order to increase your purchasing power to tackle inflation, we're going to go over how you can do that in this video.

What do we know about purchasing power? I mean, you're a couple years younger than me, Taran, but, you know, and maybe we have viewers from all over Canada, all different ages. And what's the age old saying? You know, your dad or your mom or your grandpa would have said, oh, you know, when I was your age, $2 would have got me on the bus and a chocolate bar and I would have change left over or whatever. I remember my dad telling me those stories all the time. But even you and I have experienced that, right? Like 20 bucks. Heck, when I was your age, 20 bucks was a lot more. But when I was a kid, I mean, 20 bucks was like, holy snap. Like, that was like so much money. 20 bucks isn't a whole lot of money today. Is that fair?

Yeah, not a lot. Not a lot. Probably get a good lunch or dinner out of it.

Maybe if you're going at a decent.

Restaurant, not an expensive one.

Yeah, one of mine's like lettuce burgers or A and W or something. But yeah, yeah. So, yeah. So the idea is, what we're going to do here, Taran, is we're going to walk through an example and I just picked the number out of a hat you had shared. You don't mind me sharing. Your 29 year old male today in Canada. And so we're going to walk through an example of using the process of becoming your own banker, the infinite banking concept, just by changing the process of where you deposit capital. Like every dollar that you're earning is being deposited where to ren.

Into someone else's bank.

Someone else's bank. You're putting your money into their bank. So they're the one harnessing the control over that capital. It has to be warehoused. You know, I talk to people often. In fact, my colleague Richard Canfield pointed this out yesterday, Taran. He goes, a lot of people say to us, oh, I don't, I don't keep money in the bank. I put it to work. Well, that's great that you're putting money to work, but what about when that money comes back? What about when you sell a property? What about when you get a windfall? What about when somebody returns a promissory note? You have to have a warehouse for your capital. And right now, you know, you put it in the warehouse, let it sit there until it's time to take advantage of your next opportunity. Well, where are you warehousing that capital until it's going to back out to work again? Most people are warehousing it in someone else's bank, so.

Or under a mattress for some people.

Yeah, I actually, now it's increasing. I actually talked to God. He goes, oh, I got like 30 grand in cash or 60 grand. I go, oh, so you mean like, like in the bank you mean? He goes, no, like in my safe. I was like, all right, so, so what we're going to do is we're going to walk through just a basic policy design. Now I'm not going to go a super deep into how a whole life policy works or you know, there's a ton of content that you can see in our playlist here that can help you understand better how the process of becoming your own banker works, how or how these policy systems work. The key thing to focus on, Taran, is that there's both a process called banking and there's a tool that we need to use to implement becoming your own banker. And we use a participating dividend paying whole life policy, ideally with a mutual insurance company wherever possible. Not that there's anything wrong with stock companies to implement the process of becoming your own banker. So as we go through this, you can go to watchibc.com if you're looking to learn more about the process becoming your own banker, the infinite banking concept in Canada, go to watchibc.com so you can get access to a 90 minute webinar to give you a good overview on how the process works. Okay, I'm going to focus on the policy, but how we use it for banking and how we're going to use it to be able to increase our purchasing power so we can combat inflation. Just like you positioned at the beginning of the video. Okay, so what we have here folks, as you can see, can you Canada, we're using an example of a 29 year old male non smoker and this individual is going to be saving $10,000 per year. They decided, hey, I want to save $10,000 per year and you got to deposit that money somewhere. You could use a savings account and rsp, tax free savings, whatever. The problem with using all of those things is they are what we call, or I like to call them or assets. I'm going to put money in a tax free savings account or an rsp. I'm going to pay off some debt or I'm going to invest in real estate. What we're doing here is we're looking at a tool that we refer to as an and asset. Because I can deposit money into my policy system and I can access capital to achieve other objectives. Now I'm planning, in this example, the 29 year old is planning to put a maximum of $10,000 per year into the policy. But you can see here it actually says they're only required to put less than half. And now we can change and manipulate and do different things the way that we structure these designs depending on someone's objectives. So don't want you to get caught up in all that. I just want you to focus on the process and see what's actually happening. Recognize that if this money ran over the next 20, 30, 40 years of this person's life, if it wasn't going into the policy, wouldn't it be going.

It would be going into someone else's bank account.

Exactly.

And that someone else would be making the interest and giving you a very, very, very, very minuscule portion of it.

If you're lucky, not their bank account, but into their bank. And it's, they call it your bank account, but it's their bank, they own the bank. So they get you correct over the energy that this capital could grow into. So now not only do we get a pretty large starting permanent death benefit that lasts your whole lifetime. God forbid this person becomes an angel. A heck of a lot more is coming out to the name beneficiary than what we put in. So that's the first thing. Now we're able to access capital from this policy right away. This policy is going to generate daily cash growth because the contract says the total cash value that's building up in the policy every day has to equal the, the total death benefit by the time the life insured reaches age 100. And I'm using a mouse, that's why it looks like a 4 year old's doing it. So bear with me folks. Now I'm just going to dive down. I want you to imagine that this money is being deposited into a system that, that you could compare it to whatever else you're already doing financially today, storing it in a checking account, what have you. We're talking about purchasing power here folks. So imagine over here we have something called guaranteed values. Now I'm not going to get into that too much, but I'm just going to scroll all the way down to age 100. And you can see that by age 100, the total cash value and the total death benefit. So here's the cash value. Here's the death benefit. You can see that they match. Well, that doesn't look real good. Well, Taran, are you okay if we make it look better?

Absolutely.

Okay, well, the question becomes if the total death benefit has to match the total. If the total cash value has to match the total death benefit, well. Well, the question becomes how do we create more death benefit? Well, let's show you what we can do to create more death benefit. Well, I want to point this out. This says non guaranteed values. The reason why it says non guaranteed is, Taran, we've already expressed or determined that we only have to put just over $4,200 per year into the policy, right? Correct. And 42 is less than 10, is that correct? Yes, sir, you betcha. So we could, if we wanted to, because it's up to the policy owner. You could put less capital into the policy, right?

Yeah, yeah. We're in control.

You bet. In this dividend here that we're using to actually purchase paid up additional death benefit. You can see the death benefit is rising. This dividend, if you wanted to, couldn't it be taken out and used as cash instead of buying more death benefit?

Oops.

Cash. If you pulled it out cash. Yeah. If you pulled it out as cash, it would create less death benefit, which would also create less cash value. Is that right, Taran? Yeah. So then, based on what I'm saying here, whose behavior is more important in terms of how the policy performs? Yours or the insurance company? Our behavior all day long. Now the other thing I want to point out, folks, without getting too much into how the policy works, Canada, is that these dividends are non guaranteed until they're not guaranteed until they're credited to the policy. The insurance company is going to declare a dividend each year. The dividend might be higher or lower than it's projected to be. And who the heck cares? What we know is once that dividend is credited to the policy, it can never be taken back and it can never be reduced. And the same rule applies to the cash value that accumulates every day within the policy system. So each day that goes by, Taran, we have more access to capital than we did the day before. Is that right? Yes, you bet. Okay, great. So all that's happening. Just to keep it simple, look and see that we're putting 10k per year into this policy. And we could be putting it anywhere, but we're putting it here. Now. You can See, at the end of the year, because that's all I can show is the end of the year totals. Okay? We don't have to wait until the end of the year to access policy values. And you can watch one of those other videos that I had mentioned if you want to know more about that. We can actually access policy values within the very first month of the contract being enforced. Because of the way that it's structured. Whenever we're purchasing paid up additional death benefit, those pools of paid up additional death benefit are going to automatically create additional. It's going to create a pool of cash value, and we can access 90% of the cash value. But right here, we're just illustrating the end of the year total. So you can see that because the person is a bit younger, this death benefit is increasing because of the additional premium they're putting in. And that is the total. By the way, I want to make sure that you're aware of this. This isn't 10,000 plus 4,000. It's 10,000 total. Okay? That's the maximum premium for this policy. Now, this policy is increased by. That's about 33,000 of new death benefit. Right, Taran?

Yeah.

And that death benefit, because this cash value is chasing this death benefit by age 100. By the end of the first year, we put in 8,000 or, excuse me, 10,000 bucks. And the insurance company has piled up just shy of 8,000 of total cash value. That's. That's actually pretty darn good if you ask me. But what I want to point out about that, Taran, is if we do quick math here, 8,000 or, excuse me, 17,000 minus 8,000. That means from year one to year two, the insurance company piled up just north of $9,000. Is that right?

Yeah, it looks, looks, looks about it.

That's supposed to be a 9K. But you're with me. I'm using my mouse here, folks. Be patient with me. But that's what we're trying to say. You can already see we haven't got to what I refer to as break even yet because we've put in 20, but we're already piling up more from year one to year two than we did in the first year. And the same phenomenon occurs if we. Look, if I do some math, aren't we closer to now 11k from year. Year three. Excuse me, year two to year three? Yeah.

Yeah. It's about 11k and change.

Yeah. And this premium is going to stay level or go down. It's not going to go up, is it.

That. That premium is one of the contractual guarantees. It's. It's guaranteed to stay level or come down. It can never go up. Right. So you can already see that the momentum is starting to be generated. We have to be patient, and we have to think long range. What I'm going to do is I'm going to fast forward for one. I'm going to go, look, Taran, you're only 29 years young, but tell me, how quickly does six years go?

Pretty. Pretty darn quick.

Pretty darn quick. Sometimes people say to me, oh, it takes, like, six years to get to break even or seven years or whatever. Yeah, six years is already gone. What are you talking about? Let's think about this for a second. You're going to be here for a very long time. Six years is nothing. And what's more important about that, Taran, is can't we access this cash value up to 90%, no questions asked, at any time we want? Couldn't you be using this 8,000 bucks here as a loan to pay, like, your property taxes?

Yeah, yeah, for sure.

Yeah. And then we could store that money back in the policy as what we call a loan repayment, replenish the pool and borrow it back out to, like, maybe we could pay for our property taxes and home and auto annual insurance premiums that year, the next year. And now we've sent in that money back, the money's flowing back to the family, maybe the year after. Oh, maybe we need to replace a vehicle. We need to do things. We're using this cash value as a policy loan to achieve objectives in our real life. But what I want to point out is now that we're at what we fondly refer to as break even here, we got $60,000 that went in, and we have more than $60,000 that in the policy as cash value. By how much? Like, if we just did quick math to rank, we took 70, almost 74, minus 61. Does that mean the cash flow. It's not quite, but it goes up by almost 14 grand. Am I or am I doing that right? No, 13 grand. It almost goes up by 13,000. Just shy of 13,000. And how much? We put in 10, right?

Yeah. Yeah. So it's just 10,000 going in every year.

As you said, we're putting in 10,000 every year. And the gap, I like to show the gap between what you're depositing and what you can access is only going to widen over time. And I'm going to illustrate that in a moment by going down Here to a milestone year I like to call year 20. And 21 is a bit of a milestone. So first things first, Taran, you'll notice that our annual dividend at that time, it's larger than what's required to go into the policy, isn't it? Yeah. Couldn't we just use that dividend to pay that required premium and never put another dollar back in the policy if we wanted to?

Yeah, yeah. That option is absolutely available to us.

Now, Taran, if that dividend was like 6,000 instead of 69 or if it was 5,000, like, would you be real upset?

Not really.

That's.

That's 50% on the premium going in every year.

That's pretty awesome. It's amazing. Like, who cares? And by the way, it could be higher or it could be lower than it's projected to be. The company is a for profit business, so who cares? It's going to be what it is. But once it's credited, it can never be taken back. Now what I want to show you, Taran, is if you think about this for a second, someone could say, well, I don't need to put more premium in the policy burn because I have these large dividends. I'm going to take this $10,000 and do something else with it. Well, if you take this $10,000 and you put it in someone else's bank, you get to spend $10,000. Tarant, if we look at the value difference between year 10, or excuse me, year 20 and year 21, that increases, not quite, because we have this $685,000, but it increases by just north of $25,000. Is that right?

Yeah, looks right.

Okay, so in 20 years from now, we know, Taran, that $10,000 is going to buy whatever it buys, but it's going to be probably a heck of a lot less than it can buy today. Isn't that right?

Yeah.

Yeah.

Purchasing power would decrease because of inflation. As we talked about.

Look at this. We put 200,000 into the policy. We have 300,000 of total cash value. We have almost a million dollars of paid of permanent death benefit that will last you a lifetime. So you have access to more cash than what you put in. And then you put 10,000 in the next year and you can spend 25.

Is there anything stupid about doing that, Taran?

Not at all.

That 200,000 bucks would have flowed through someone else's bank anyway. And what you could have spent was 200,000. Is that right?

Yep.

Yep. If you take this 10,000 bucks here and you put it in someone else's bank, what you get to spend is 10,000. Again, I want to repeat that. But if we put it in here into the policy, we actually get to access almost two and a half times that amount. So that's how we're going to increase our purchasing power over time, because we're going to keep depositing the same 10,000. And this is what Nelson would refer to Live Steam. Fast forward another 10 years, and I just again, do a quick look at these values. We're now increasing by closer to $38,000 year over year. And again, Taran, if instead of 38, that was 33 and you put in 10, would you be real upset?

No.

This is what we're trying to emphasize to people when they come onto calls and whatnot and they say, hey, I want to see some numbers. I want to see some numbers. The numbers do not matter. It's all about the process. Where are you flowing that capital so we can create capital momentum just by changing where we're depositing our capital and how we're using our system and get the banking function to work for you rather than against you. Is that ridiculously simple, Taran, or what? That is.

That's super simple. You're just trying changing the location of your money.

That's all you're doing. Yeah. And then if I access a policy loan, is that any different really, than accessing it from a savings account or a checking account to achieve the same objective?

No, not at all.

And then when I replenish my policy loan, do a policy loan repayment, who gets use and control over all of the money you send back to the policy?

The policy owner, which would be us.

Okay, great. If you got a paycheck and you drained your bank account to zero, and then you got paid again the next week, who gets to use all that money? Well, someone else. Yeah, they get using control. But my point is, if I drain my checking account down to zero and then I get paid again, nobody thinks of that as a payment or it's just a deposit you're depositing into your checking account. Well, we're just paying a policy loan, depositing it into the policy and storing it in a private system.

Yes.

It's like so ridiculously simple. It's like, oh, my gosh, man, you got to get started right now. Just like Taran said. Because, Taran, if you said, hey, this is really interesting. Burn. I'm going to wait until I make more money. I'm going to wait till I can do an annual premium instead of monthly payment. I'm going to wait till, wait till, wait till. Can you jump in a DeLorean and go back in time and pay premium, or do you. Or did you lose that time?

Yeah, that time is gone.

So when should you take action?

Right now or yesterday?

Yesterday. Yeah. And the first action that you should take, Canada, is go to watchibc.com and get access to that 90 minute webinar. Make sure you consume a bunch of the content from my great colleagues Henry and Dan, who really expand on an inflation process problem. And go ahead and get yourself a copy of Rnlson Nash's book. And one bonus action you can take. Don't be shy, leave a comment, get in touch with us. We'd be more than happy to give you some good guidance along the way in the process.