How to Build a $6.4 Million Dollar Empire Using Infinite Banking

Imagine you had 45 properties and they were 100% paid for. If you needed to, you could access 90% of whatever those properties are worth with no questions asked. You wouldn't even have to go to a bank. You wouldn't have to fill out any Mickey Mouse stupid paperwork. You weren't worried about the interest rate spikes and all these other things that are going on in the marketplace. You had immediate access on demand to that equity to go and get the next deal if you needed it. And it would create a passive income as long as you live. So now that you've got that picture in your mind, I want you to just think of a word comes up for you when you think about what the impact of that would be in your life today. The impact of this is something that is possible and it is achievable. So here's really what we're going to cover. So we're going to highlight a couple of resources for everyone. We're going to talk a little bit about the guy who made this all happen, R. Nelson Nash, who wrote this book. He's really the epicenter of everything that we're going to discuss. He created this concept. So we're going to talk a little bit about the basics of the tool, the thing that we use to help implement this concept into our life. And then we're going to bring up our real estate case study. We're going to set the stage. They're going to be doing a brrrr strategy and we're going to talk about how they design the program to help this person implement this strategy in their life while also being able to work with the deal that they had on the table. And time permitting, we'll see where we're at with the 10 of time. We have a little bit more time. I'm going to do a little bit of a summary, share a story about, a personal story, and then some stuff about my family banking system. Then we'll have time to go into Q and A. Now we got a lot of content out there. We have two YouTube channels if you haven't already done so please make sure you're subs subscribe to those. So the first one is the bankers vault. There's 847 videos on that channel right now and more added every single week. And then of course we have our podcast. If you can see my in the background. I've got my logo here for Wealthville Bay Street. We have a lot of fun there. We have a whole playlist that you can go to right on the YouTube channel. Now, we've written a couple books. Each one of these we've been able to achieve bestseller status on Amazon, which has been fantastic. So we appreciate the support that everyone gives us. Our first book was Canada's guide to wealth building without Risk. Our second book is Cash Follows a Leader and our most recent one is Keep taxes away from your wealth. I want to talk a little about Nelson and again, he's the inspiration for myself personally and for our team members. We always want to honor Nelson and we do that as many times as we can, of course, when we do these sessions. But the reason we're doing that is because this idea of the infinite banking concept stems out of his brain. He's the guy that created this idea. And through his background as a forester, as an Austrian economist, as someone who recognizes and understands history and how money flows through our life, he recognized that we could have more capacity, control the flow of money as it comes in and out of our life, to be able to do more with those dollars over a lifespan and then bless the people that we love most throughout that process. I want to get into the real estate track here and I want to give everyone's mindset in the right frame of mind. So the picture of this, this house is actually a house that I sold here a few years ago. This is the one I'd done a few renovations on. I had a basement suite in it. It was a good cash flowing property, but I sold it when I moved to Chilliwack bc. And everyone's at a different point in their real estate journey. So you might be a seasoned real estate investor. Maybe you've got, you know, 10 plus doors, maybe you've got your first door, or maybe you're just looking to acquire your first. So wherever you're at in the journey, I just want us to think about this for a second. Imagine you had 45 properties and they were 100% paid for. You didn't owe a dime to any third party lender at any kind. So you had great cash flow on them. So just imagine, fully paid for, no maintenance. If you needed to, you could access 90% of whatever those properties are worth with no questions asked. You wouldn't even have to go to a bank. You wouldn't have to fill out any Mickey Mouse stupid paperwork. You weren't worried about the interest rate spikes and all these other things that are going on in the marketplace. You had immediate access on demand to that equity to go and get the next deal if you needed it, or to do something else that you had in mind and it would create a passive income as long as you live. So now that you've got that picture in your mind, I want you to just think of a word that comes up for you when you think about what the impact of that would be in your life today. The impact of this is something that is possible and it is achievable. And why is that the case? Well, I know it's the case because it happened to Nelson Nash. Now, the property that I'm talking about isn't physical real estate in the way that we think about it today. It's property in the way of contracts. Okay? And when Nelson graduated, when he passed away in March of 2019, imagine there was 17 properties that you had. Those 17 properties, you know, you have 45, 17 of them were sold immediately the day that you graduate, and they were sold 100% tax free. There was no capital gains, there was no probate you had to deal with. You had 17 that sold. There's still 28 that are left. So 28 of those properties pass automatically and tax free to the family that you love and care about, and they get to still reap all the benefits and rewards of having those assets. This is what happened in Nelson Nash. It wasn't rental properties, it was life insurance contracts, the law of contracts, property contracts. So Nelson had 45 life insurance contracts that he owned and controlled. 17 of them were on his life. In other words, he was the body, he was the life insured person. So when Nelson graduated, when he passed away, there were 17 death benefit checks paid 100% tax free to his family members. Now the remaining life insurance contracts, he owned them at the time that he passed. The next owner of those contracts was already declared on the policy documents, so they automatically inherited those policies. And there was no taxable event because they went to family members. So 28 assets passed tax free to all of his family members. Now, he passed most of those assets down to his children, and he strategically selected who would get them. And, and his wife Mary, who's still with us today, also received some of them. Now, when Mary passes away, many of those 28 contracts are on Mary's life. But at some point in time, graduation will happen. And when it does, as it will for all of us, there's going to be a secondary windfall, tax free event. More of those properties which have grown in value are going to pass and create a tax free death benefit to the loved ones. And there will still be assets that remain because Nelson insured His children, himself, his wife, his grandchildren, and his great grandchildren. That was the power of what he was able to create over his life. See, wherever you are, you're at your current financial situation, your current condition, wherever it is you're looking for this ideal financial future of yours, well, we want to figure out and we want to help you today. And as we do, our ongoing education, our videos, our podcasts, et cetera, our book series, they're about helping you create increased control so that you can have a wrapper of tax free protection around you, creating a legacy. And as we do these things, as you increase control, you increase confidence and it increases your peace of mind. And as that happens, what happens is you expand, you expand your capacity, your capacity to go get more real estate. So imagine you bought your first piece of real estate. Well, if it went okay, you probably looked at buying another one. As you buy and add more to your portfolio, your experience improves, your education gets better, your confidence goes up. That allows you to expand what you're trying to do. When you build your assets, the same mindset applies for this. As you have access to more capital, opportunity, awareness goes up. Your ability to see deals, deal flow, recognize them, deals that were probably always there that you didn't recognize before, you now start to see them for what they are. It allows you to continue, expand so that you can create legacy continuity and you can have the wealth transfer you're looking for. A lot of this has to do with mindset, though. This is one of my favorite quotes. It's not how much money you make, but how much money you keep, how hard it works for you and how many generations you keep it for. The way that Nelson set these up is using dividend paying, participating whole life insurance. So that was the asset class that he used to develop his own system and what he taught people to do to implement this concept. It is the way it's meant to be done. The key of this whole thing is that by age 100, the cash value must equal the death benefit. So that is a contract. Just like if you got a mortgage and you borrowed 500 grand and you have to make a mortgage payment and after 30 years it's down to zero. You have a contract with that mortgage company. If you try to break the deal, they're going to wreck your credit, they're going to come after you, etc. So you're contractually obligated to make those payments and they're putting up a big chunk of money. It's the same idea with the insurance company, except it's almost in the reverse. Okay, you make a payment into getting the insurance and the insurance company puts up this huge chunk of tax free money that if you die at any point in time, they're going to pay it to your family tax free. But what also happens is they build an asset. That asset is called cash value. So you can see on my diagram here, we start out with a base whole life policy. Whatever the size is, you can see it's this kind of light gray thing here. And then we add and we start stacking up as we go. We stack and stack, stack and stack these things called paid up additions. Now you have the ability to, through the way we design these to control a lot of how you do that. But basically you can put extra deposits in premiums in, they purchase paid up death benefit right away, and those come with a cash value component instantly that helps you build up and build up and build up. And then you get to earn dividends from the life company and those dividends get chunked right back in and they do the same job. They buy more and more paid up additions. And the end result is you have a pretty good compounding scenario that takes place here. This white line represents cash value. And so anything below this line is equity. So if you look at this line, you look anywhere below that, consider that as just like equity in a house. The difference is if you've got equity trapped in your house, a lot of times you can't access it. And today the lending rules might be a little tricky to get money today based on what's going on in the lending environment. And so in this environment with the insurance company, you have contractual right to be able to access that capital and you can access 90%, that's 9, 0% of whatever that equity is on any given day. So just remember this really crystal clear. The cash must grow to equal the death benefit by age 100. It has to happen. The insurance company is obligated to do it. So every time that we increase the death benefit, this paid up addition goes up and up and up and up and up and up. And the dividend comes in and it goes up and up and up and up and up. What we're doing is we're forcing the insurance company to create a future cash flow for us. The death benefit must be realized and the cash must grow to equal it. So it's got to get faster and faster and faster as it chases after the end result. Now with that in mind, I want to get into our real estate example. You know, it Used to be a couple of years ago, especially in the Toronto marketplace, man, deals were everywhere. I think nowadays the deals are still there. Funding the deals has changed a little bit and a lot more people are holding their capital tight and they're a little bit hesitant maybe to let loose of the purse strings around deals nowadays. Here's the way that people are used to doing these things. We have our money, we go and deposit it at a brick and mortar bank, okay, One of the big five banks or whoever it is. You put your money on deposit, then you go find some deals and you need to fund those deals. So you fund them using opm, other people's money. It's either the regular bank or B lenders or it's hard money or it's joint venture partners. You're using opm, but usually somewhere along the line there's a, there's a typical brick and mortar bank involved. Hey, whether you're funding down payments, you're doing private lending, you're doing rentals, burst strategy. And then the result is that you're the one that's jumping through all the hoops. You go through this process so that you can get cash flow, you can build equity, you can have capital gains, you can create the environment you want, but you're taking on all the risk and you're signing over on these debts and doing all these things and man, the paperwork process to get that mortgage qualifying. What a pain that is. We want to transition people to help them figure out how can we do this. We transition where we deploy our money instead of having it sit inside of a bank or regularly depositing it into a bank. What if we were funding premiums in a whole life contract and our money and our wealth was sitting there and then from that point in time we're still going to use opm, other people's money. It's just that the other people's money is going to be the insurance company that we co own. As soon as you own a participating whole life contract, the word participating means ownership. You participate in their profits. Well, it turns out they're pretty profitable and they've been doing it really well for a very long time. So they share those profits with you each and every year. So now when you borrow money against your policy as collateral, similar to like a home equity line of credit on your house, the difference is if you borrow against the home equity line of credit in your house, you don't usually earn dividends or get anything back from, you know, the main bank. If you do it with a Life insurance company, you do. So now you co own the lender and the lender is charging a little bit of interest, but that goes back into the profit pool for everybody. So that's kind of a little bit of how that works. So we want to implement the same process of what you're doing anyway. You're funding the same deals. The goal is to create the same kind of cash flow and capital gains. We just want to change the method of where the funding is coming from and to augment your ability to have more control. One of the additional benefits of course is just like I showed you in Nelson's example. 45 insurance contracts, 17 death benefits paid and there's 28 assets still in force today. He's been gone now approaching five years is the tax free windfall, that generational wealth path that we can accomplish. Now what our goal is is not to do this overnight. We're going to transition that over time. You're still going to use opm, you're still going to use traditional banks and things. But the goal is to try to minimize your relationship with them and to be in the driver's seat of it so that you can slowly and incrementally transition your dependence on those institutions to becoming independent with your own system. That's really what our focus is. That brings us to our case study. So here we've got a young family and this case study is loosely based actually on a client of mine. So we have a FELLOW that's age 45, his birthday is in May. I picked May for a reason. It's going to talk about some of the strategy on how we design the policy for this individual. Married with two kids are under the age 10. He does need insurance protection. He doesn't really have any proper insurance. He's got some through his employer, but he doesn't have very good insurance. And a lot of times when we meet with folks, this is the case. So number one, he has a problem he needs to solve and we're going to try and solve that. He has very strong family values and a desire to build a legacy. This is really a key fundamental thing for him and he does not like banks. You know, the last couple of times he had to go through the mortgage process. Absolutely frustrated with the whole process. They'd already done the education, they've already read Nelson's book, they've already gone through our education process and they've already been able to make the decision that this is something they want to implement in their life. Now he's actively involved in real estate, the his focus is on the BRRRR strategy. Buy, rehab, rent, refi, repeat, do that over again. He's got good cash flow from his existing rental real estate already. You know, when he has to do some mortgage renewals, that might change in a couple of years, but as it sits right now, there's some great cash flow there. And he's also got his career and so combined household income is about 225,000. And they're going to be redirecting money that's already flowing through their life to look at that as funding the minimum requirement on their plan that they're going to set up. So that's what's going to be the driver on an ongoing basis for the minimum. And, and they have other cash flows coming in. So one of those areas might be their RSP contributions. Rather than continuing to do that, they're going to say, you know what, I want more control over my money in my life. I'm going to redirect that money that was going there and instead I'm going to apply it here. And there's other areas in their budget that they've been able to do that with as well. He recently had a deal that paid out as a property sale with a JV and he's got 95,000 available from that previous deal. It's ready to deploy. He's already got the next deal lined up. The deal's all spoken for. It's closing in about 90 days. He needs 85 for rentals and holding costs and he wants to create long term efficiency on their capital. So he's not just thinking about this one deal as the next thing. And the only thing he's thinking about what are all the other things going on in my life, what's happening with my family situation, what are some of the things I'm doing long term in the future. I don't just want to go deal to deal. I want to do something more on the sustainable side. So he wants more efficiency. So he's already got the accepted offer. Again, he needs 85. He's got private money lined up to close on the deal so that he can get the rentals done, do what he needs to and then set up the refi when it's all complete. And this is not their first rodeo. We know what the real estate deal is. We know a little bit about the goals and the objectives of this individual and their family, what they're looking to do. Now let's talk about how we set up their program for the Infinite banking concept to begin the process of implementing this. Here's the program that we designed for this individual. So it's a $50,000 a year annual capacity. When I say capacity, that's the maximum amount that they can put into this particular contract. They couldn't put a dollar more in that than they wanted to. If they want to do more, they can absolutely do more, but they need to go get another insurance contract. 50,000 is the maximum capacity. 12,500 is the minimum required, or what we would refer to as the base amount. A37500 is flexible. It's up to the individual and his family if they want to put that money in. It's planned for, it's a target, it's something that they want to do and they're going to do it in this situation. But what it's doing is it's giving them a lot of control. It's giving them the ability to ebb and flow as their life shifts and changes and as deals shift and change throughout their life as well. And so what that gets them is a $500,000 starting whole life policy on the husband and as well as $1 million term rider for 20 years. They needed the coverage and in fact, that's probably borderline what they need. But that was a good start for them at least getting going. So they got $1.5 million of initial coverage, which is something that was on their requirement list. It was on their, their checklist of things they needed to get done. We're going to help this family become time travelers, or at least the husband, and we're going to let him go back in time. The reason we wanted to do this is number one, because we can. It made a lot of sense in their specific situation. And it had to do with the fact that we want to show you guys some of the flexibility that can exist. This is one of the flexibilities that we have available in this situation. So we have an option to backdate 364 days. And if you may remember I mentioned that his birthday was on May 15th. Okay, well, we're in October 2023. He turned 45 in May. Well, his insurance age, if we go six months from May, that puts us to November. May to November is six months. So as of November 15th, his insurance age, because he's six months closer to 46, is that he'll actually be 46. So we're right at that cusp where we're able to do something really cool for him by, by doing this Backdating. So we will keep him at age 45 no matter what. But we actually are able to backdate, go around the clock back to the previous year, October 2022. And we're going to able to lock his insurance age in at age 44. I mean, I thought it was pretty cool. So the Borat, Borat agreed with me. Now, a question I have for everybody is when is a dollar worth more? Today or tomorrow? So we've, we've done some inflation hedging right there just by getting the policy set up. Now here are some of the steps involved that that took place. First off, he went and got educated, okay. He had a meeting with someone on our team, discussed it, and there was a plan design. It probably happened over a couple of meetings to get all that set up. Had to go through a life application. Yes, it is life insurance. Get over it. It's a requirement. Okay? Then of course, you can't have a contract until you fund the premium. So we got to get that done. And because he's got a deal coming up on the table, the deal's got to be coming up in 90 days. What's actually going to happen here is we're going to switch him from annual funding, which he did year one annually. He's going to switch to monthly and pay the minimum premium in this scenario. Again, this is unique to his situation. If you can pay the whole annual, we'd obviously recommend that in his situation. There's a reason we're doing it this way. I want to really isolate some of the flexibility and the control features that he has to navigate through his real estate business. So he's going to switch to monthly, and he's funding that monthly from his regular life cash flows. Okay, that was already. We already talked about that. But he's going to take some of his extra money that he's got available and he's going to fund the entire flexible portion of that policy immediately for year two. So year one's funded 50 grand. Year two, he's going to pick one monthly payment and then he's going to shove $37,500 into the, into the program right away. For year two, he's going to be able to borrow from those funds to work on his renovation project. Then he'll go ahead and do his refi. He'll replace out of the refi, he'll replace the money he borrowed back to the life company, and he'll sit there waiting for the next deal. You have to save money. You do your performing, you do your Spreadsheet, you do the math on all your deals. You plan for maintenance and reserve refunds, you plan for vac vacancy, you don't factor that into your net cash flow. But the reality is if your property's rented, you don't have the vacancy. And if there's no repairs for a while, you don't really have any repairs. So those funds end up building up and building up and building up until you eventually need them. So he's going to be able to work with that excess that's happening with his existing real estate and with the new ones he does. And he's going to now start thinking about storing that capital in insurance contracts. So when he has a vacancy, when he has to do a repair, replace the furnace, replace the roof, etc. He's going to borrow from the insurance company's money pool because his money's in there working all the time. And he's going to go ahead and take care of the repair or the maintenance or the vacancy cost. It's just he's going to change the location of where he stores that because he's got to store it anyway. Instead of doing it a brick and mortar bank, he's going to start doing it with an insurance company he co owns. So fund year one, he puts $50,000 in. Remember he's 45 years old, but we backdated him to age 44 so he's got to pay the last year's premium because he went back in time the moment he did that, he instantly created $120,000 of new whole life insurance death benefit. So his original whole life was 500. Boom, it just went up to 620. Then he's going to switch from being annual payment to monthly payment. Pay the first monthly payment. Then he's going to do an online bill payment transaction. Boom, he's going to send in $37,500. He's going to fund that flexible premium into year two and BAM, instantly brand new death benefit will be created again. And yes, it's going to be more in the next year and then he's going to borrow to do his rentals. Now we did this. He's basically one month in. He's a year and a month in in the reality of the policy. But in actual time he's only in the first month, isn't he? Okay, he's gained 242,000 of brand new tax free death benefit immediately. And as you remember, he had 95,000 sitting aside to fund his next deal that came out of his last deal he was already there. So that's where we were working with his own variables. Now he's paying that monthly payment out of his regular cash flow. He's redirected other cash flow to pay the monthly. That's where it was coming from. He immediately takes a policy loan. 70,500. That's we can access out of the policy right away. So where are we at? He's put in 88,005, 75 on day one. $50,000 for the first year. He funded the flexible premium portion or paid up addition premium of $37,500. And he made one monthly payment and he's funding those monthly payments out of his regular cash flow. He's got collateral available. He can access a policy loan from the life company with no questions asked. He now can do a literally click a button and do it online. And the money can be in his bank account in about four to five business days, give or take. He's got an asset value of 78,500 in the policy. And he's increased his legacy. So he got a brand new policy. Had no death benefit before. So now his family's protected. They weren't. We got 1.5 million of of insurance coverage and we added $242,000 of whole life boom in the first month. That becomes a future cash flow. He's got liquidity of approximately 80% of every dollar he's put in. He's put in 88 and change. He's accessing 70. He's accessing about 80% of every dollar so far in his first deal. So he's got the deal. He needs $85,000. For his rental project. He had $95,000. He used $87,500 plus one monthly payment. But the monthly payment's coming from his regular cash flow. He only used $87,500 of the money he had sitting aside. So he still has some of that money available. He takes a policy loan. He has total control over it. He does not need to make a loan repayment. We want him to do that. We're going to teach him how to do that. We're going to coach him on why that's important. That's part of the education process. But he's not required to make a more monthly payment. He gets to choose the payment schedule. So now he's got 70,500 plus what's still available from his original money. Got 78,000 to work with now renos. You know that renos take time. He's planning about four months for this to go on before he can, he can either either put the property back on the market or go ahead and do his refi. In this case, he's, he's going to, he's going to do the refi, but he's prepared to sell it if he needs to. His policy is going to keep growing at this stage. This particular policy will have about $22 a day in daily cash value growth before he receives the dividend in the second year. That's what's happening in it at that point. So in a few more months he'll have actually access to some more capital he can access out of a policy. Yet again. This is what's happening as he's looking to close in on his deal. So let's summarize that. We got a problem here. There's $5,000 Richard missing. He needs 85 grand to do the to to do the Renault. He's only got about 80 to work with. Where's the other $5,000? I think it's important to ask that question. So let's take a look. Where would you get other money from to close on the last $5,000? What are some areas that you could go to find it? HELOC credit card. So let's talk a little bit about this policy loan. He takes the policy loan, he goes logs into his online system with the life insurance company. He opens up, he clicks on the values tab, he clicks on request alone, he fills in three boxes and he hits submit and it says your loan request is being processed. Okay. That's how simple it is. You can check your online account as often as you want to see the loan balance, to see the loan available. It's very, very simple. Now, not every insurance carrier has that. We primarily work with one because it has all these amazing variables with it. The current policy loan rate is 6 and a half percent. A policy loan is an invested asset of the insurance company. If you co own the insurance company, you need them to put money to work for the benefit of everyone that's in that company. This is one of the areas that they put money to work. But it's basically like a line of credit. It's like a heloc, except there's no payments required. Most every other line of credit requires a minimum monthly payment or a minimum interest payment. That is not the case here. You want to do that, we're going to coach you to do that. It's important to recognize the power of payments. Your mindset is the most important feature of all this. So we've talked a lot about what the policy allows you to do, but if we're not thinking correctly, you're the one that could effectively ruin this, not the insurance company. So we need to have the right mindset in place, and we spend a lot of our time in our education and our coaching on doing that. But let's take a look at this as what happens. Let's actually look at him. So he's got the deal now. He's got access to the money. He can take 70,500 policy loan, but he's starting the rental. He doesn't need to take 70 grand out right now. He's not paying a contractor $70,000 immediately. He's going to slowly start paying out amounts of money. So let's say in month one, he takes a $20,000 policy loan and then he starts, you know, paying, you know, he uses his credit card, he buys material, gets the things that he needs, and then he takes a $20,000 loan and he pays off his credit card. This 70,500 is his future operating line of credit and it's going to continue growing. So let's look at month number one. He took 20,000 out and the interest rate is six and a half percent. That's thirteen hundred dollars over the course of a year. But we're not at a year, we're at one month. So we divide that by 12. This quote, unquote, interest only payment is $108. Right? He borrowed 26 and a half. It's only for one month. It's $108. Now, I want to talk to you a little bit about the insurance company. The insurance company has this big giant money pool. It's called the general fund. Policy owners, just like this people, they put premium deposits into the money pool. They can access policy loans, and the policy loans land in their checking account. They can use it to go do buy cars, buy real estate, fund contractors, buy stuff at Home Depot, whatever they need to do. Then out of their checking account, they can make loan repayments back to the money pool. At the end of the year, they share profits with the owners. That's called a dividend. It's part of the divisible surplus. That's basically how this works. It's really very simple. Money goes in, you can access some money out from them. It's not the same money. It's a different pile of money. You make some repayments. Whatever you repay, you can access Again, everything seems to move around pretty good. They've been managing the money for over a hundred years really well. And they've been profitable for a long time. So they've got a really good system in place. You get to participate in that system. You're literally just like plugging into it. And you're now changing the way that you move money throughout your life. Okay, very simple. So month number two, he takes another $20,000. All right, so now we've got 40,000 that's borrowed 6.5%. That's 2,600 for the year. But it's only been one month with 40 grand. So the monthly interest now in month two is $216. Month three, let's take another 20 grand. Cool. We've got 60 grand. It's a monthly interest of 325. Months four, we take 12. Five, he had 70,000 and change. And then the policy kept growing from month one to month four because it kept growing at, you know, 22 bucks a day. He was able to access more policy loan value by the end of month four. So he takes out a little bit more. He's now got 72,500 outside of the policy and divide that by 12. His now monthly interest payment is less than 400 bucks a month. Okay, so he had 102, 16 and then 325 and now, you know, 400 bucks. And he's four months in and his renovation is complete. So over that time frame, again, let's assume, let's assume he has three more months maybe because for whatever reason, meanwhile, while this whole thing is taking place, his policy continues growing every single day while the money is borrowed. That is very, very important for everyone to understand. Let's summarize the borrowing. So month one, two and three, we add those together. Month four and then months five to seven, we're going to. I'm adding some extra holding cost in here. We add all these quote unquote interest payments. That would be less than $2,300 over the seven month time frame. He had the money borrowed from the life company. Now in my example, I'm assuming he actually made a monthly payment and he paid a simple interest payment. He does not have to do that. If he didn't make payments and he just let the interest roll up a little bit, which he can totally do. It might be more like 25 or 20 $600 of combined interest, but it's going to be pretty close to that. This is the circle of us trying to get qualified again for the next deal. One of the key things that Happens when he goes to refinance, he's got to go through debt servicing again and the policy loan doesn't show up anywhere. It doesn't show up on his credit report. The lender doesn't see that anywhere. He doesn't have to tell them that he's servicing interest only payment on this 70 grand. So it has no impact on his ability to get new financing on debt servicing. If anything, it actually helps because if he went and used his HELOC to do all that, he's got an increased interest only payment that he has to debt service that could interfere with his ability to qualify for the refi. So he's actually increased his control in other areas beyond just the fact that he was able to access capital from the policy and not have to make a payment. So there's many layers of control that's being added in here. So let's take a little summary. Did we meet all the objectives? He needed insurance, protection, had to protect his family. He wanted to build a lasting legacy. He hates banks. He's avoided to some degree. He's transitioned a little bit over time some of his dependency on banks in this first deal and therefore in future deals. For every future deal he wants to do okay, he needed access to $85,000 to do his deal. That's what his math showed on his Performa. You know, I've got a little asterisk there in my example and how we built the contract. He didn't have access to all 85s, but boy, he only needed an extra 5,000 to figure out the gap. He was pretty well sorted to get it done. Would everyone agree with me that we were able to help him meet that objective pretty closely. He wanted to create long term efficiency on his capital to meet lifelong goals. In this particular contract for this individual, again, he's 45, but we backdated to 44. So in year three to four is year three to four of the policy, not three or four years from now. Year three is actually starts next year, he funds one more premium and it starts the next year. That makes sense. So he's much closer to that. Well, if he puts 50 grand in at the beginning of year three or he continues making a monthly payment and then he funds the 37,500 flexible premium because he's built that up from his other resources. At the end of that year, from policy year three to four, his policy will increase 52,200. So he would be putting in 50 and it's going to be growing 52 at the end of the year five, he would have a cash value of 254. Year 10, it would be 600. The increase from year nine to 10 was 76 grand. Let's take a look at this. So in year three to four, he put in 50 grand. He funded the premium. The growth was 52. In the end of year five, he's five years in. He's put 50 grand for five years. He didn't have to do that. He wanted to do that. He chose to do that. 50,000 went in. He would have 254 in his asset column, of which he could borrow 90% at the end of that year. Year 10, if he keeps funding, he's put in 500 grand. He's got 600. Year 9 again. So it grew 76. But he only put 50 in. Remember, he can't put more than 50 in a year. Will only accept $50,000 of premium. If he wants to put more in, he's got to go get a new contract. He's got to contact his coach and book a meeting and talk about how they build another part of his system. At the end of year 15, we're 15 years in. If he keeps doing the 50,000, he would have put in 750,000 of inputs into that policy, and he'd have an asset value of 1,000,035 at the end of year 20. 50,000. 20 years is a million bucks. He has an asset of 1.6. This is not an investment, you guys. I'm not bringing this up to get you thinking about that. I want you to recognize that once you get a machine built and if you put money into the machine and the machine is growing greater than what you put into it, if you had a bank account where every time you put $50,000 into the bank account at the end of the year, there was 52 grand in there, and you knew that as you continue to do that, it would grow on an incremental basis. That is what we're really talking about here. Now, what also happened is the death benefit went up. At the end of year four, it's 2.1. At the end of year 10, it's 2.7 million. And at the end of year 20, it's 4 million. He started at 1,500,000. And at the end of the 20th year, by continuing this funding process, now he's up to $4 million. Here's the fun part. We remember we had term insurance on there. He had to protect his young family, so he couldn't do all of this in whole life, he had to have some term insurance there for strategic reasons. That's something that you discuss with your coach to understand how that works. In this scenario at year 21, that term insurance is going to jump up in price. It's going to renew at a very expensive rate. He doesn't need it anymore because he's built up this incredible whole life asset. So if he gets rid of the term insurance, he drops a million dollars off. He still has $3 million a whole life and it's growing every single year. That's the, the power of the legacy that we're building here. 500,000 was a starting whole life. And at the end of the 20th year, he's 65 years old and he's got $3 million a whole life. That's a six times growth in the death benefit. What has to happen by age 100, cash value has to equal the death benefit. So his death benefit was 500,000 of whole life on day one. Now it's 3 million. The cash is rising and rising and rising. It's got to grow to equal the future death benefit. If he's 65, it's going to keep going based on that. He's already six times. In other words, he's created future cash flow. And in this example, what I did is I said, okay, he's going to choose, quote, unquote, choose to stop paying the premium. If it were me, I wouldn't do that. I would keep paying the premium. But for the purpose of my example, let's just say 65. He's going to not pay it anymore, even though it'd be far better if he did. And he's not going to put another dollar in all the way from 65 day to 100. If that is the case, that policy would grow and the death benefit and the cash value would be equal and they would be $8.1 million. Assume that dividends are similar and consistent to what they are today all the way out to that stage. So in other words, his cash value at age 65 is 1.6 million and it's got to grow to equal this 8.1 million. That's the jelly in the sandwich. They like to say the jelly. The difference between this guy and this guy is 6.5 million. That is a future cash flow. That is a guaranteed outcome as long as he, you know, doesn't cancel the contract. Now, if he dies early, the death benefit is higher. And if he's got an outstanding policy loan, it pays off the loan and his Family gets the rest of it guaranteed tax free. That is the power of what we're building here. So In August of 2014, I got married to my beautiful wife in Jasper, Alberta. The one thing about weddings is, you know, they're kind of expensive. You got to have some money to take care of that. So that drained the bank account a little bit. The policy loan account actually is what it drained. And right around that time, shortly thereafter we made an offer on a property was late August. And I've always wanted to move back to an acreage. What I didn't realize is that it would turn into a bit of a money pit. So this is what actually took place. I'm just going to summarize by crunching some of the numbers for you guys here. We purchased it, we made the offer and had it accepted in August. We took possession at the end of November and the purchase price was 630,000. The mortgage balance, I put 10% down at that point. I had to, I just paid for the wedding. Although I hadn't finished paying for it. Policy loans had. I had to refi another rental property to free up capital to pay off a tax bill that I owed so that I could qualify to get this property as a self employed individual at that time. So it was a lot. There was a lot of things happening around this and we had the down payment, we had some closing costs. So the summary is I had $65,000 in the deal. Something happened right before COVID My wife and I were registering our son for kindergarten at the local school right by the acreage and we really actually were interested in school. We were excited that school was pretty close. But it was a pretty abysmal winter and we'd had two pretty crappy winters and we'd actually had two fairly crappy summers. We had a lot of mosquitoes. It was actually. We had a lot of rain. Like, well, so much rain. We might as well live in Vancouver. Like we were having some like the weather didn't participate with us very well for about 24 months and. And there was a lot of work happening on the acreage that was making life a little bit more difficult than we anticip. So maybe we bit off more than we can chew, I'm not sure. But the end result is we decided that we were going to move to Chilliwack B.C. and we wanted a different lifestyle. So we made a lifestyle decision and we thought, you know what we'll do, we'll go and we'll move for a year, we'll Rent our place, we'll do a little quick rental, we'll rent it, we'll keep it, we'll try BC for one year and if we don't like it, we'll come back. Once we got deeper down the path we were a few months later on we decided, you know what, let's just sell it and not deal with the hassle. Well, the end result is we had to drop the price a number of times and the final selling price was 563. We had to pay off the mortgage balance and our payout penalty went up. And so the payout penalty when we decided to sell was only 3,000 bucks and it tripled by the time we actually sold. So we had some realtor fees. Of course. I was a realtor, I knew a lot of people, so I got a pretty good deal on that. And the end result is we got $44,000 out. Let's take a look a little bit deeper at the deal. So I built a big deck out front. I built a salon in there for my wife, she's a hairstylist. And we spent a bunch of money doing that. We did a big rental on a bunch of things. Flooring, heated flooring, took out a little wall, new carpet, finished off some aspects, some wall building in the basement, a number of other things. When I add up all the things that we did over a six year period and a lot of it was at the rate at the end, I had to do an upgrade to the septic system, some rentals for sales, about 15 grand. The deck in the salon was about 10. Two furnaces, air conditioning unit, hot water tank, also a pump for the cistern, upgraded the electrical. In fact, during the home inspection, if I'm an electrician and I had to do a roof on the shop, so about 80 grand worth of stuff, a lot of that was actually near the end, so probably about maybe 50k. Well not 50, but 45 of that or so was, was right near the end of the last year. So we take the 65 I put into the property plus the 80 I put in over the six years. I had 145 grand into the deal and I got 44 grand out. How am I doing so far on this particular deal? Obviously it wasn't a cash flowing piece of real estate. I get that. This hundred thousand dollar learning opportunity was one of the best hundred thousand dollars I ever spent. The move that we've had to BC the lifestyle change has actually been worth every dollar because of the quality of our life and my family has gone up drastically. The reason I want to share the story is that life happens to all of us and I am no exception. Even throughout all of this, I was still able to use and grow my family's banking system. I had to make mortgage payments. While I was there. We made $185,000 worth of mortgage payments and we paid out 82 grand in principal. Now this is during a very low interest rate environment. That means 103 grand went to banks in interest. If you take 103,000 and you divide that by the all the payments over the six years that we live there, 56 cents of every single dollar I paid a bank went directly to interest. That's called volume. Interest rates, yes, they're important, but interest volume is far more important. What is the physical amount of money that's going to leave your pocket and go to someone else's bank that you will never ever see again? This is what becoming your own banker is about solving the problem for. And it does happen over time. Nothing happens overnight. But this is the area that we really want to put our energy on where we can reclaim this cash flow, suck this drain throughout life. And we want to put that back in your life so it's available for your retirement years, for your passive income and for your children. That's the key. Here's a little summary of my family system. I'm in my 14th year of doing this. I started my very first policy for $4,219 a year. Now I didn't have $4,219 a year and I'm not going to suggest anyone does what I does. It's not good idea. It's just the truth. Now I have 12 policies in my family system and I have number 13 is an application. Presently the policies in all 12 of them, they range from $1,000 a year up to $90,000 a year as the capacity for each individual policy. There's a big range there between them. The minimum premium on my family system of 12 policies is 45,177. And I have 155 that is flexible. So that's the control lever I have available on a yearly basis. A lot of deposit potential and I do everything I can to hit that target every year. And that's, that's grown as of course as I go. And I have a new one in progress right now that's going to add $27,000 into that system. It took me four years to get my system up to $14,000 a year in annual premium. It took me six years to hit 40 grand a year in total premium. It took me nine years to get up to 135. And in 2022, at the beginning of the year, I added three more policies onto my system, and I did some backdating. I added $42,000 in new premium. Okay, so one of my wife is 36,000. And then I got two new policies on my both of my children, and they're whatever, 30 $600 a year or something. That was a 31% increase in the system. My family system is a big jump. And. And I'm now making another jump. And we're only able to do that because, you know, income is going up and assets and all those other things. The same way that you would go buy another rental property, the same way you would go look at getting the next deal for a rental property, I just look at it from an insurance contract perspective instead. So I'm always looking to add something new to my portfolio, except my portfolio is a portfolio of insurance contracts instead of a portfolio of real estate. One of those policies is a tax policy. So I pay my annual tax bill out of that policy. I take the money that the CRA wants from my corporation. I fund premium first, and then I borrow from it to pay the tax bill. And then I chip away at the loan as I'm putting money away every month for next year's tax bill. So it took me 13 years to get to the $180,000 level. On April 10, I had a summary of the whole system, and then I did another update on it on September 11th. Over 154 days, my daily cash value growth was $158 a day, worked out to, you know, 24 grand and change. So that's what happened in my system. Do you remember what the minimum amount of my system was that I have to fund every year? 45 and change. And that includes riders. So I have guaranteed insurability riders for my children. I have term insurance riders. I have some critical illness riders. All of those are rented benefits. Those don't go to help grow the cash value and the policy and the death benefit. But they're important and I need them. And they're strategic for many reasons. So we design policies for many reasons, and we try to check as many boxes as possible, and we have to have riders in place to do several things that we want to do in the future. Okay? So it's very strategic when we put them together. So minimum premiums today, 45,000. And the cash Value growth over the year here, that 365 day period. I mean I haven't finished that 365 period. And there will be new premiums put in there which will change those numbers. But from this position there's no additional premiums added. Okay. Which is why it's a good time frame to get these numbers. That represents $57,000 in cash value growth just in this year. Well, if you take the 57 in growth and you subtract the minimum required premium, that means that's $12,500 for the year or about a thousand dollar cash flow or cash accumulation available to me. 24% of my entire system is pretty much brand new. It's not at that level of efficiency yet where it's what's really producing as much as some of the older ones are essentially. But the key thing is did and my wife and I chose to do is all we did is fund this minimum amount for the rest of our life. And we never even received another dividend. This would increase every single year for the rest of our life. Now that's not what I'm going to do. But if, if all we did was that I have constant motion on all of the capital that I've put into the system and it's just going to continually improve. That's the key. And this is what we learned from Nelson. All we're doing is we're doing what Nelson did. The policy owner is always in control. No one else is pulling the puppet strings. You are the only one controlling the strengths. This is very important to me personally and that's one of the reasons why I value this system. Having money safe and available when you need it. Take away any of your options. Oh man, I love this quote. My opinion is it doesn't. And so every once in a while, opportunity knocks, deals come around. I had a deal that showed up for me and my family in March of this year. It was around $150,000. Where do you guys think I got the money from? So yeah, I took policy loans. So where did my plan start? February 2010. This guy. Can you believe it? Would you guys do business with this guy? My starting death benefit of my system was $148,000. That was it. Now what's the face value of my death benefit in 2023? At 12 policies, adding them all together, the total whole life benefit, the starting amount. So not the paid up additions, just the starting level is $2.6 million. Well, what about the paid up additions? We've been growing Paid up additions. Richard, you're 12 or 13 or whatever years in here. You got some paid up additions. I've got $1,900,000 in paid up additions. That's added up. That's as of April 10th is where that number lives. Most of the term insurance I have is actually on me. I have a little bit on my wife, but most of it's actually on me because I'm the primary income earner for my family. So if something happens to me, we need a large amount of death benefit to show up, to solve problems. Okay? So you know, we're talking about the usage of cash value here, but we can't discount the value of protecting our family and setting up the things that we need to set up while we're here. All right, if I subtract the policy loans, this is Again, as of April 10th, these numbers, there's $6.4 million of net death benefit on the family system. 4.2 million of that is for these guys, my wife and my two kids. The policies on my kids obviously are in there. That's a little bit different. But most of the death benefit, I've got a little note here. 66% of the entire system is on my life. All right? That's a future cash flow. So if I have whole life amounts, the total whole life component is $4,500,000. That's the total combined starting and paid up addition death benefit, all combined. And as of April 10, my cash value in the system was 556. That means the future cash flow I already have in place is $3.9 million. So if all I did is pay the minimum premium, I never receive a dividend I send. I don't put any flexible premium in at all for the rest of my life and for my kids lives. All we did is pay the minimum premium, no more dividends. This is going to happen. It cannot be stopped. The only thing that stops it is someone dies, in which case you get all your money out anyway. Or I cancel it because I'm an idiot. Those are the only two outcomes that can take place. This is a picture of a tree stump that is actually taken by Nelson Nash. This was a tree that, when Nelson took this picture, it was actually the same age, about the same age as Nelson. I wanted to use this visual representation. So today I'm at about this level of the tree. Way out here is what's remaining for it to grow if we stopped funding it. Okay, in this example, the tree's already done. It's already Dead. So my intent isn't to do that. I'm going to keep growing the tree in. If I keep growing the tree well, the tree is going to get bigger and bigger and bigger, which means that future line is going to get pushed out more and more and more. This is what we're building when we implement this in our life. All right? And along the way, I already took 150 grand out to do some deals, and I just took 11 grand out and bought turf for my yard. I'm using these policy loans all the time, and I'm making repayments. I have $7,000 a month of monthly repayments going back to my system right now. It's for things that we've bought and used in our life, and I'm replenishing the pool. We do family banking meetings. We've had two of them so far. This is a picture of us in Vegas earlier this year when we had our family banking meeting. We talked about passive income and active income. And we use the books as an example of passive income because that's a passive income source for us, not producing a lot of income, but it's going to increase as we go. And I really encourage people to do this. We do a lot of teaching and training about this. We're going to be doing a lot more of it in the future, so you can look out for that. And the goal is to build a legacy. That's my goal. That's what I learned from Nelson. I saw what Nelson did. I got to see Nelson's legacy created and come to fruition, and it still exists today. You guys are part of that legacy because you're here today. You're. You're an extension of that by being here, whether you know it or not. And you know Nelson, he would say it's all about how you think. That was his number one thing. You are where you are today, and you've got an ideal future out there. We want to create increased control. The more we increase the control, we more we increase confidence and peace of mind. The more we do that, the more you can create expansion. It creates more capital. You get more contracts. That's exactly what I do. It increases the legacy. By doing that, you create opportunities. You continually expand, and opportunities show up. They're already there. You just don't see them until you have more capital to do it. That builds continuity, legacy mindset. And of course, we can build in some great wealth transfer.

Can Canadian legislation change to affect MEC limits? So we don't have a MEC in Canada? Called a modified endowment contract. We have something called mtar, which is a maximum taxable accrual rate, which is similar. But the big difference between the US and Canada in this area is that it's kind of very wild Westish in the US in that you can design things and build things where it's very easy to break a policy and to create problems from the policy owner's perspective and set them up. Although things might be really good for a while, 10 years, 15 years, 20 years, if you do certain things, you could actually create a problem, especially if you're not in good contact with your insurance advisor. In Canada, it's much more difficult to do that. The insurance carriers themselves, for the most part, it's not a blanket statement here, but just in general have done things to keep the guidelines tighter so that there's less capacity for you to screw it up by putting too much money into the contract or whatever. They did an overhaul to mortality rate change in 2017among a number of other things, and because of that change, it has actually led to any increase in the mortality age. For the assumptions used in tax exempt room, it's actually allowed for more potential of premium dollars to go into contracts. Is the interest due at the end of calendar year or at anniversary of the loan? Interest is calculated on a daily basis and it accrues daily and then it's officially chargeable or charged to the policy on the anniversary date of the policy. So again, February 10th is. I have several policies that are, then they're, they're kind of all over the map, but I personally have several on me February 10th. So every February 10th, if I haven't paid the loan down or paid the interest or whatever for that year, it capitalizes at that point and it rolls into the next year. That's fine. There's nothing wrong with that as long as it's being managed effectively and you have a good plan, the strategy in place and you're proactively managing your loan portfolio. If you have other loans, you would manage them. If you have a savings account that's going up and down, you're going to manage that. So to the same degree that you put effort on those things, you would put effort on this. It's really important to identify and that the calendar year is when the tax year ends December 31st. And because the tax year ends there and policy start dates almost never end there, I don't think I have a single client that has a December 31st policy date. Because of those variables, things like interest write offs and all stuff become a little bit more challenging. And to a large degree, my opinion, just an opinion. Other members of my team may feel differently about this. I personally don't do anything where I write interest off on policy loans, although it's possible. I think it's just a huge pain in the I have no interest interest in doing that. I don't want to participate in the government's. You know, I'm not going to spend hours and hours of work and labor tracking a bunch of crap just to go and send something to the CRA who I don't care about anyhow. Like, I have no interest in doing that. I just want to keep it simple. You can do some of that stuff. Some people might do it. I. I don't. You could mess it up. It could go sideways.