How To Finance A Car in Canada The Smart Way (Not What You Think!)

We are going to repay our loan back to the policy. And we, as the owner of the policy, we decide how to structure our loan repayments back to the system. Insurance companies cannot force us on a structured loan repayment process. We decide what to repay because we are bankers.

How car financing using IBC provides more access to money. In this video we're going to show you how financing anything using the process of becoming your own banker will provide you with more access to money. It's important to know that any decision we make with money is a financing decision. Either we pay up interest or we give up the opportunity to earn it. When we use ibc, you'll see how this will give you access to infinite opportunities. In this example, we're going to review how Sarbo financed his car using his IBC system and the possibility of outcomes that this has created for him and his family. Sarblo let's begin.

It was 2017 and I was looking ahead to 2019 because I was, I was going to be ready to buy a car in 2019 and usually the amount of money that I spend on cars is about $35,000. So 2017 I was looking ahead and I knew every few years I need a new car. So between six to seven years, every time I need to replace my cars, because that's just one of my excitements I get is to buy a new car every six or seven years. So 2017 I started a policy for the purpose of financing cars using the system going forward.

And I started putting $20,000 per year into that policy. Now why $20,000? I was already setting that money aside in a commercial bank as savings. I just took that money and I started saving that money in a participating dividend paying whole life policy because I wanted to create my banking system using the policy to finance cars going forward. That was my number. That number worked with me. Everybody has different numbers now. When 2017 came, I had access to $35,000 as loans from the policy to purchase the car and ended up buying a Nissan Murano. So what I'm going to do is I'm going to share my screen and I'll walk you through what transpired. So let's go to 2017.

So 2017 is when I started designing when I started this policy for the purpose of financing cars going forward and an IBC policy designed with $20,000 per year in premium Nupira. Can you see the screen? Okay, can you see me annotating?

Yes, I can.

Now this premium is my deposit into my banking system that I'm creating. So it's not a cost to me, it's a deposit to me. No different than how if you are depositing money in a bank, the more you deposit, the more access to capital you create. Same applies to this. The more I deposit into my policy, which is my banking system, the more access to capital I create. Capital meaning Money. Now when 2019 came.

I had access to $35,000 in policy.

Via policy loan. Or if I wanted to withdraw that money, I could have also withdrawn that money.

It's my policy. I could access money the way I wanted. I could have withdrawn my money or I could have borrowed it as a loan from the insurance company. Now, in 2019, my daily cash growth.

So daily cash growth in policy.

Was $20 per day.

How do I know what my daily cash growth was? Because it's my policy. I can look at my numbers on daily basis. If I check my numbers today and I check my numbers tomorrow, the difference is my daily cash growth. And that daily cash growth is there because of insurance companies contractual guarantee. And I'm just going to stop the screen sharing for a bit. To expand on that. The contractual guarantee from the insurance company in this policy is that by age 100, my cash values in my policy must match my death benefit. I Repeat, by age 100, my cash values in my policy must match my death benefit. So based on that contractual guarantee, in 2019, my daily cash growth was $20 per day. Today it's 2021. My daily cash growth is much more than $20 per day in the policy today. But back in 2019, when I purchased my car, it was $20 per day.

So my cash and my policy was growing every day by $20.

Daily cash growth. Now Peter, I mentioned that I had two options to buy the car. One was to withdraw the money, the other was to take a policy loan. So if I would have opted for option two, which is withdraw, what would have happened in my policy? When it comes to daily cash growth.

You'D have to start from the beginning again.

Yeah. So when you withdraw money from an asset that's growing in value every single day, you kill the compounding of the asset. Because is you withdrew your money, you strip your own money out. Now Peter, if you withdraw your own cash.

From an asset like this, which is growing in value every single day, do you have to pay interest on.

It if you withdraw?

No, you don't, you don't, you don't pay interest on your own money. Right. When you withdraw your own money from an asset, you don't pay interest on it. But when you withdraw money, the asset stops to grow. So that $20 per day growth in my policy would have stopped, so I could have taken money. So what I wanted was I wanted $35,000 to buy the car. I could have withdrawn my money from my policy to buy the car. Objective would have been accomplished, but all my money would have been gone. And the asset called a participating whole life policy would have stopped growing for me. But I didn't have to pay interest right now. What I did was I didn't opt for this option because I understand that capital has value, this time value of money. I wanted to keep my capital in my policy growing because I value compounding, I value future value of money. I never wanted to interrupt it. The day we start interrupting the growth from our capital, which is growing in value every single day, it just becomes downhill from there going forward. So what I did was I opted for option one, which is called a policy loan. And here's what transpired. I'm going to share my screen and I'll go back to that option. So I opted for option one, which was.

Policy loan.

So I had $35,000 as a loan amount and my death benefit in the policy at that time. I don't know the exact number, but it was just shy of $800,000. But for this example, just to say it was $800,000, just for basic math. So what I did was I opted for option one, which was a policy loan.

Now when I opted for the option called policy loan, what insurance company did was they used my own cash in policy. So my cash, which was $35,000 in policy as collateral.

And they put a lien on my death benefit, which was $800,000 at that time. So the loan was issued to me and there was no income verification, credit check, consent to repayment terms. They never asked me what I did for work, when I gonna pay the loan back, can they run a credit check? No such questions were asked. No questions what I'm gonna use the money for? So none of those questions were asked. It was a single page document that I had to fill out, which was my policy number, my name, how much money I needed, and the money showed up into my bank account, no questions asked. What insurance company did was they used my cash in my policy as collateral and they put a lien on my death benefit. So in case I do not pay back the loan while I'm alive, it'll get deducted from my death benefit when I'm gone. Now Peter?

Yes.

When we access a loan from the insurance company, is there interest on the loan?

Absolutely.

Absolutely. There is interest on the loan. And why would there be interest on the loan, Peter?

Well, you're borrowing money. You're borrowing the insurance company's money.

There's interest because it's not my money, it's a loan. Right? My money is inside the policy growing every single day. That amount, $35,000, which I initiated as a loan, came from insurance company. My money is intact in the policy, is growing every single day. A policy loan does not interrupt the growth of my own money in the policy. And Peter, what was my daily cash growth in the policy back in 2019?

$20 a day.

So I was making $20 per day as cash growth or cash value growth in the policy every day. The the loan did not interrupt this growth.

And there was interest on it because the main money came from insurance company. Insurance companies value their pool of capital.

Now they gave me the money, and at that time in 2019, they were charging interest on that loan. And the interest rate at that time was 7% simple interest.

That was the rate at that time. The rate has reduced since then, but in 2019, that was right. So, Peter, if you take $35,000, because that is the loan amount, and you multiply this by 7%, so multiply by 0.07 and divide it by 365, because simple interest is charged on daily basis. So what would be the daily interest on that loan?

I have that as $6.71 per day.

$6.71 per day. So this is the interest on that loan. Now, I mentioned just earlier in this video that when I initiate a loan from the insurance company, it does not interrupt my daily cash growth. So I'm still growing in 20. Again, these are numbers from 2019. They're much better today. In 2019, I was still growing my cash values by $20 per day, and the interest was $6.71 per day to the insurance company. So, Peter, how am I doing so far?

It looks like you're still ahead.

I'm way ahead. So is it okay for me to pay someone $6.71 per day so that I can maintain my $20 a day growth in the policy? Is that a good exchange for money?

I would be all right with that.

Now, compared to withdrawing the money and worrying about, hey, if I have to pay interest on the loan, okay, that's 7%. I don't want to pay interest. I want to opt for option two, which is withdraw the money because 6%, 7% is a high interest. I don't want to pay interest. If I would have opted for option two which is to withdraw my money.

I would have foregone this $20 per day just because I was too worried about this number. When you do the math it makes sense to never interrupt the growth of your own capital. Now insurance company is charging interest because they want to be profitable. The question becomes for who? Who is insurance company making all their profit for?

I have my capital sitting in a participating.

Dividend paying.

Whole life policy.

Which is the tool that we use to implement ibc. That's the tool that we use to implement infinite banking concept or becoming your own banker concept that we're sharing with you today. The word participating means that I as a policy owner participate in the profits generated by the insurance company. And that profit is shared with me via dividends. Not just to me, it's anybody who has money sitting in a participating dividend paying holder policy. That's who the insurance company is making the money for this part because we are the co owners of the business. So when they charge interest, their intention is to make profit for us.

So when I'm paying interest back to the insurance company, which I am, and I'm going to walk you through that right now, I'm making my own business much more stronger because interest becomes profit. Profit gets distributed to everybody who has a participating whole life policy as dividend. A the interest doesn't matter because I maintain my $20 per day for $6.71 in daily interest and B when I pay back the interest it benefits everybody. We're in this together. It's that abundance mindset.

Now. So when I took that money as a loan to buy the car, here's what transpired. That money showed up in my bank account. Now when people think it's a loan, people make may think that this may show up on my credit report. Well not when it comes from the policy. That loan is private between me and insurance company. Nobody knows I have a loan outstanding and the lien for that loan is my death benefit which is my future debt self. So when I received that money it showed up as cash. And when I took that money and I bought my car, I paid cash for the car. I won't get into details as to how much money I saved by paying cash for the car, which was a lot of savings. So if the objective is to pay cash for the car because you can get a better deal on the car, I did accomplish the objective. But Peter, whose Money did I use to accomplish the objective?

You used the insurance company's money.

And what happened to my money?

Your money was still residing within your system and growing every single day.

Every single day. I own a car free and clear. And God forbid if I get hit by anybody while driving a car and I graduate, meaning I die or. Well, I'm not going to leave any indebtedness behind to my family. Because what's going to happen is insurance company at that time, they're going to take my death benefit, subtract any outstanding policy, loans and interest at that time, and give my family the remaining death benefit amount. And plus my family, if my car is still fine at that time, they'll still get to keep a car.

So by financing my car using the system, Peter, did I take away any of my options?

Well, I think you've perhaps given yourself many more options going forward.

Yes. Now, what I've explained to you so far is just a loan. My daily cash growth and my daily interest on the loan from insurance company. Here's where the process of becoming a banker comes in.

We bought the car and we took the car home and I had a meeting with my wife. I said, we are going to repay our loan back to the policy. And we, as the owner of the policy, we decide how to structure our loan repayments back to the system. Insurance companies cannot force us on a structured loan repayment process. We decide what to repay because we are bankers. What we're not going to do is steal the peace. And if you're not aware of what steal the peace is, then you should read Nelson's book to understand what steal the peace means. So I'm going to treat this exactly how I'm treating a loan from a commercial bank. If I would have taken that $35,000 from a bank to buy the car and I had to pay the bank back based on their terms, I'm going to treat the same thing to my own system. I want to structure the loan repayment back into my own system. But I'm going to set the terms because I'm the banker now. So let's go back to that Excel sheet.

So we took out a loan to buy a car for $35,000. We own the car free and clear because the lien for this loan from insurance company was my death benefit, not the car. The car is owned free and clear. So we looked at our cash flow, and based on our cash flow, we can repay $500 per month back. Great. So we just did some basic math. So if you are repaying back 500 bucks per month to repay $35,000, add 7%, because this is the interest rate that insurance company called for. And let's assume that I'm just going to repay back at that 7% interest rate to the insurance company at $500 per month. It'll take me seven years to pay off the loan.

That's my amortization. It cannot get simpler than that. Now, Peter, who set the loan repayment terms?

You did.

Can this loan repayment terms change?

Yes. You're in full control of that?

I can change the amortization. I can make it 7 years, 8 years, 10 years, 2 years, 1 year, 1 month. It's up to me. Can this payment also change?

Absolutely.

Can I reduce the payment?

Yes.

Can I increase the payment?

You can do whatever you want. You've dictated the terms.

I'm the banker. Can insurance company charge me fees on changing the payments? No.

Can I reduce the payment down to even zero?

You can do whatever you want to do.

Now, if that is control, I don't know how else I can define control. If you are financing things other ways, not using the system, ask yourself this question. How much control do you have by financing things the way you're financing today? And how am I doing as compared to you? I'm not changing my cash flow. I'm not changing. I'm not working any harder. I'm not taking on any risk. I'm not ever losing control of my money. The only thing that I change is the process to get to my objective. I'm financing things differently. That's it. So let's see what happened. So my growth in policy is $20 per day.

Now, let's look at in a month, month time. Because we all think in terms of day, month, right? So let's see what transpired on loan repayments in one month. So $20 per day. And let's assume there's 30 days in a month. So this is my daily cash value growth. Because my cash value is just still growing every day, right?

So my daily cash value growth is $20 per day. Now, if I multiply that 30 days, which is. Let's assume there's 30 days in a month. In one month, my cash value is increased by $600, right, Peter?

Correct.

Now, what is my loan repayment?

500.

My loan repayment is $500.

I repay $500, my cash grows $600. How am I doing so far?

Pretty good.

Pretty good. But here's the next best thing. The next question is how much can I re access again.

From this loan repayment?

Now, I can have this $500 go back towards principal payment if I want, or I can structure it in a way that I can have that $500 go towards principal and maybe to cover the interest payment also, we can structure it differently if I wanted to. Right. So let's assume if I have it going back as principal, I pay back 500. My policy grows by 600 in one month. I can use. I got access to $11 again.

Per month because I have all this $500 going towards principal. Now the question that I have for you today is where else have you made a payment of $500 on a car or any amount of payment on your car and had access to $1,100 again?

Now, what is that access creating for me, Peter?

It's giving you opportunity.

Yeah, opportunity to reuse that money again for future. Because when is my need for money ever going to end?

Never.

Never. So by structuring my financing using my system, I'm creating more future access to capital. And if I have access to capital, I become an opportunity magnet. Opportunity is going to come find me. So the loan repayment became the best way for me to save more money again, to capitalize on more future opportunities.

So this is how the process of becoming a banker and by financing things using the process of becoming your banker can give you more access to capital. And all you're doing is banking. You're not investing. This is not an investment of any kind. You're not taking any risk. You're not losing control over your money. All you're doing is you're changing the way you're financing things. And like Peter mentioned, every decision that you make with the money is a financing decision. Sorry, Every decision you make with the use of money is a financing decision. Either you borrow money from someone and you pay that person back interest, or you use your own cash and you lose interest. So if you're going to finance money, well, this is a better way for financing things because it creates more opportunity for you. Make sure you check out our other videos on this channel.