How to Shield Your Wealth from Inflation and Taxes

Predictable wealth building. Did they achieve it? Yes. And was it recession proof? Absolutely. Is it not inflation proof? It is inflation proof. Does it not reduce their taxes? Of course it does. Can they become debt free? Yes. Did they achieve the objective of being ready for retirement? Yes. They have a pretty good retirement and that is tax free. Can they not travel a lot as they love to? Of course they can. And are they living enough money to pay their stock taxes? They sure do. Can we call it a predictable growth? We sure can. What effect did this contract have on their network? Growth, predictability, Security. What is net worth? Net worth is the value of assets a person or corporation owns minus the liability they owe. The net worth is depending on assets. The more assets you have, the more net worth you have. And the liabilities. The more liabilities you have, the lower net worth will be. The net worth can be either positive or negative. So this is an example of a positive net worth. So? So assets is $650, liabilities is $400. And the total net worth is 250. Very simple negative net worth. The assets are actually lower than liabilities. Assets are $480 and liabilities are $670. So the net worth is minus $190. Guess what? This person is probably using debt and paying a lot of interest to banks. Right? Because if they have a lot of liabilities, it will probably cost them a lot of money. What is net worth? Telling you. So calculating net worth involves adding up all your assets and subtracting all your debts. There's no hard rule for determining your right net worth. But you should know that it is headed in the right direction towards a comfortable future. That's key. If it is not, then it's time to cut your spending, reduce your debt, or both. When you look at main things that destroy the wealth or destroy the net worth, people will name normally things like inflation, taxes and fees and interest in. In order to illustrate how the inflation affects the net worth, let's look at bank of Canada website where there is a calculator. You can play with different years to see how much purchasing power was Canadian dollar lost in the time frame of these years. So I took last three years from 2021 to 2024 and I entered $1,000 in 2021. What is it in 2024? In order to buy things that is equal to 1,000 three years ago. Now today you need $1,144.70. That's 14.47% lost of purchasing power. I was shocked actually When I saw this number, because if you divide it by three years, you will see that it's closer to 5% a year. That's very high inflation. What does it mean in terms of purchasing power? What is purchasing power? Purchasing power is how much products or services you can buy using the same amount of money. For example, $100 in 2021 can be used to fill up this basket of groceries. Right. So in 2024, using the same amount of money, $100, you need a smaller basket. Why? Because the purchasing power of $100 bill actually reduced by 14.47%. So now either your basket has to be smaller or you need to have more money to buy the same amount of growth groceries. Let's look at the impact of taxes on wealth. Let's say we have a couple, a spouse, a husband and a wife, and they both make $100,000 a year. The income tax on first spouse is $26,347. And then if we add a second spouse, that's $44,715. Because the household is taxed at a marginal tax rate. So after they paid their income tax, they can invest this money to put into some investments to grow wealth. They always say that you should pay yourself first. So they decided to pay themselves first. They decided to take 10,000 each and invest into something that is producing 20% return, which is very good return. Right. So the capital gain in just one year is $2,000. Let's say both of them made $2,000. The capital gain tax is actually 500 because half of the profit is being taxed at 50% and they paid 500. So they left with net profit of 1,500 each. Then they have a house. So they have to Pay property tax. 5,000. Right. Property taxes are very high in Canada living expenses. So each of them has 50,000 to live on and is spending this cash for living expenses. They have to pay what they have to pay sales tax or GST and hst. Right. In different provinces, we have different taxes from their living expenses. The actually money that has already been taxed is taxed again. That's sales tax. So we have to add up all these taxes and we can see that it comes to $89,062 before between the two of them. And we didn't actually even include the payroll taxes which the employer paid because the employer also has to pay payroll taxes on even on to pay them $100,000 each. So we didn't actually include the excise and specialty tax which will Increase this number significantly. So the total income is $204,000. Because $100,000 each plus 2,000 profit from the investments, that's 204. And the taxes is $89,062. That's almost 44%. That's huge. In fact, what it means is one spouse works for the family and the other one works for the government just to pay taxes. So no matter how hard you try, you seem to be always losing the game. So it is logical to say that in order to increase net worth, you need to either outpace inflation and you also need to reduce taxes or reduce fees and interest you pay. But that's not the biggest issue. The biggest issue is actually that your wealth must reside somewhere. And ask yourself a question. Where does it reside today? Where is your wealth residing today? You know, when you flow your money through the system, when you're paying your bills, you're flowing through someone else's bank. That's the biggest problem. The money is flowing, always flowing, right? So your paycheck comes in, it has to be deposited somewhere and it is flowing through someone else's bank. If it is not your bank, then someone else is making profit off of your money. When you get your income, your income is coming into you. And then you have a lot of bills to pay. You have mortgage or rent, you have appliances, credit cards, chiropractor, physiotherapy, whatever. You have bills to pay. This cash is sitting in your checking account in someone else's bank. And then you pay those bills and the money is now leaving you. All this bill has to be paid and the money is flowing away from you. Now you may be wondering, all these bills are paid, Great. So where's my money? And the place where your money resides is empty because the cash is gone. So the problem is you need to be the banker. You need to make sure that the money is actually flowing to you, not away from you. And when it happens, not only your bills are paid, but you can also get all the money back. You may be wondering, how is it even possible? And in order to help you, you need to connect with us. You need to text the word schedule to 780-809-4599 and book a call with one of our advisors. Because you don't have to figure it out yourself how to do this. We have a lot of resources to help you and get started on the process. Talking about uncertainty. So whatever is government is doing, is it helping you or is it taken away from you? Are you able to Control it. You probably cannot control it. Right. Let's talk about the unemployment rate. Whatever the government, they're always doing something that we always get surprised. The unemployment rate in Canada actually is now going to increase again. Recently the unemployment rate reached 6.1%. And you can see in this graph that it is increasing very, very quickly. And then it is going down very, very slowly. Right. So it only takes three months to go up to the max. And then it takes more than 20 months to actually go back down. And the government is actually manipulating with rates and increasing the interest rate actually increases unemployment. And then when they start cutting the interest rate, the unemployment rate goes down. But what is more important is actually long term unemployment rate. So this indicator predicts recessions with almost 100% accuracy. So what is a long term unemployment rate? Long term unemployment rate is basically the rate that is showing unemployment for someone who is looking for job for for more than 26 weeks. The problems begin when you are looking for a job more than six months in a row. This chart does not include people who stop looking for work. It only shows everyone who is still looking after six months. Right. And you can see that long term unemployment rate actually predicts the recessions with very, very high accuracy. So it predicted four out of four previous Canadians recessions. So the first one started in 1981 where the unemployment rate increased very high. And then it predicted the recession in 1990. And then the next one was the recession of the great crisis of 2008. And the last one was the recession of 2020 where we had issues with COVID and we had a pandemic. Now you can see that the unemployment rate, long term unemployment rate is actually going up again. And that is an indicator that the recession is going to be happening very soon. This recession was in the US but it didn't really affect Canadians too much. But it is also showing on the chart as well. The recession happens when the unemployment rate goes up. The unemployment rate goes up just before the recession or just after the recession. Some analysts predict that in the summer or early fall 2024, Canada will officially go into recession and bank of Canada will may start cutting interest rates. So if they're halfway smart, they will look at this indicator and preemptively start to drop interest rates so that the unemployment rate doesn't really go up too high. So when this rate goes down, it goes down really, really slowly. But when it goes up, it shoots way too fast. The unemployment rate goes up either right before the recession or after the recession. Canada just announced a new budget 2024 the things that were announced are capital gain gains Inclusion tax IT increased from 50% to 66.67%. Lifetime capital gain exemption changed. The Canadian entrepreneurs incentive changed and alternative minimum tax is updated. New homebuyer's plan. The government is doing a lot of changes and that is causing a lot of frustration and people don't understand what's going on. Let me ask you these questions. Do you feel they have you in mind when they propose these changes? The answer is no. Do they think the government aims to increase your net worth? The answer is no. Do they want to tax you less or more?

More.

Does the government want to control less or more of your wealth? More of it. All of it. Do you think the taxes will go up in the future or they will go down? Up? So how does it make you feel something like this?

Canadians are concerned about the deficit. So there's a lot of spending, a lot of unnecessary spending that is causing a huge budget deficit. And this year this deficit actually is almost reaching 50 billion. That's with B billion dollars in just one year. So the federal government is spending too much. And if you're wondering what the government budget value looks like. So this is a chart for the last 30 years. The deepest downs in this chart is showing the recent government budget deficit. And this year will be actually way at the bottom here. So whatever is government doing, they're spending too much money and the Canadians have to pay for that. I just wanted to also introduce this book. So this book is by Carlos Lara and Robert Murphy. It's called How Privatized Banking really Works. This book actually explains how the government operates and how they create problems in economy and they create inflation, they create boom and bust cycles and the citizens are struggling with trying to figure out how to even increase the net worth. I highly recommend everyone to actually get a copy of this book to better understand what's going on in the economy. Do you believe the government is going to need more money or less money in the future? They need a lot more money. And if you knew that there was an exemption in a tax code, if you knew that it existed, take a moment to write down all the disadvantages of not taking advantage of that exemption. If you knew that there is an exemption, take advantage and take a moment to write down all the disadvantages of not taking advantage of this tax exemption. As a Canadian, is there anything you can do to protect your own net worth? And the answer is yes. All you need is to remove as much of your wealth as you possibly can from the reach of government and politicians. And how you can do that, you need to look at this concept. Imagine this. What if you could only stop losing wealth because of inflation? What if you could shield your net worth from onerous taxes by making them tax exempt? What if you could pay less fees? What if you could grow your wealth predictably? The key word here is predictably without losing access to it. What if all interest you have been losing could actually be recaptured? What if your money is working for you, not your banker? Let's imagine a financial institution. This financial institution is taking deposits and is lending. And they want to be in business with you. And this is what they propose to you. There is an administrator in the financial institution and they propose you to sign a contract. And let's look at this contract and see if we want to sign it or not. They want you to make regular deposits and they don't tell you which deposits you made. You decide the amount. You decide on the amount. You may reduce the regular deposit if you want. You may take a break if you need. You may take extra deposits. But they're capped, right? So the extra deposits are limited by how much you can put in to make sure that the contract is tax exempt. What does it mean? It means that they are limiting you in how much you can pay extra so that it doesn't create a tax problem or capital gain or whatever it is. So the administrator of this contract must accept all your deposits to the limit that you're allowed. They must put these deposits to work. They must use deposits to provide for the maturity amount. So what is a maturity amount? Maturity amount is basically a payout. At some point, they assume all the risk of investing this money. You're making deposits, they invest it, you're making deposits. They take all the risk. They can lend this money to other borrowers if they need to. They cannot lend more than they have on reserves. They do not add to the inflation, so their loans are not inflatory. These deposits are guaranteed. Let's look at equity. Once you sign this contract with this financial institution, you will automatically become a co owner of this financial institution. As an owner, you get some equity in this contract. You can access this equity anytime you want. You have total ownership and control. You can speed up the growth of your equity so your equity is growing daily. If you want, you can actually increase your equity. You're not limited to the amount of such contracts. You can own what the administrator is responsible for. They are responsible to increase your equity daily. They have to do that. The equity can never lose its value. Tax preferred growth. The growth may outpace inflation. No management fees. Equity must match the maturity amount at a certain year. The equity can be leveraged, which means used as a collateral. You can use the equity to take a loan. And the contract has uninterrupted compounding of this equity. So what is the maturity amount? Maturity amount is a payout. So at some point there will be a payout. You as an owner can increase the maturity amount by making extra deposits. So you're making regular deposits. If you want to increase the payout, you need to increase the deposits. Every dollar of extra deposit will buy more than one dollar of maturity. And it will add to maturity amount. Think about it. $1 in increases your maturity amount by several dollars. How amazing that is, right? You can control who the contract pays upon maturity. The maturity amount pays out tax free. That is tax exempt. There's no capital gains on the equity growth. The administrator needs to link a specific asset to the maturity payout. The contract matures immediately as soon as you lose this asset. So you have this asset. As soon as you lose it, the contract ends. The payout is due. What is the probability of loss of this asset? The probability for you is 100%. Upon maturity of this contract. Please close as the payout is due. The contract must grow equity based on the maturity amount, which is a target. The contract must be approved. And the administrator of this contract must underwrite this asset. Now let's talk about how you can use this equity and you can leverage it. So you as owner can take a loan using your equity as a collateral. Instead of taking your equity and interrupting compounding, you can actually take a loan against it and use it as a collateral. There's no interruption of compounding when you do that. When you apply for a loan, there's no minimum required payment. No credit check to qualify, no fees. Just simple interest. No repayment schedule. A loan available is tied to equity. It is growing daily. So your equity is growing up daily. And so is your loan available to apply? It is an online application. Just under one minute. So limited to borrow is ever increasing. Loan is immediately re advanceable as soon as you make loan payments. This loan is readvanceable. You can actually immediately take it back if you need to. The administrator of this contract can actually charge interest. Since you co own the lender with other people, the interest charged increases everyone's equity. So not only your equity increases when you pay interest to the lender, but also everyone who also owns this lender. His equity is also increased. The administrator in this financial institution can actually change the interest rate if they need to. And because they must be profitable and they can also lend to other people or entities. There's also a dividend. Because you are the owner of this contract, you will get receive a dividend and you get to decide what to do with the dividend. You can take it as cash if you want, or you can reinvest it back into the contract and you can increase the payout immediately. The dividend will increase each year based on the maturity amount. The higher maturity amount you have, the higher dividend you will get next year. Your total dividend received may potentially be significantly more than your total deposits. Your total deposits are not even as high as the total dividend. Who doesn't want that? The administrator of this financial institution says that the dividends are not guaranteed, but they have a very long track record of being profitable. They have been profitable for last 87 years. And you can look it up and you can make sure that that's true. Once the dividend is declared and paid, it cannot be repossessed. Let's talk about the outcome. So the outcome is really dependent on your behavior as the contract owner. It is critical. Your behavior can change the outcome. They can change the maturity amount, can change the equity. It can change everything. Extra deposits are important to make an increase in maturity amount. If everything done right, the maturity amount or payout will always be much greater than all deposits in total. Who doesn't want predictable growth? So your behavior may speed up or slow down the growth of your network. The administrator of this contract takes your deposits and is guaranteeing that your payout will grow and your net worth in equity will grow predictably. So the administrator is responsible to match the equity and the maturity amount on a specific date and it is guaranteed. Let's talk about guarantees more. You as a contract owner have a peace of mind knowing that even if this financial institution ever goes under, which is very, very unlikely, this institution is actually protected from 90 to 100% of your money is protected. If your equity is $100,000 or less, then all of it is protected over this amount. If you have more equity than $100,000, then 90% is absolutely guaranteed. If your maturity amount, the payout is million or less than all of it is guaranteed. If it is more than a million, then 90% of it is guaranteed. This contract is private. It provides predictable growth of your net worth and it is an engineered outcome. It provides liquidity at any time. It is a tax free payout. It has Tax deferred growth of equity. It is creditor protected. It is not subject to market volatility, not exposed to market risk. It has uninterrupted compounding, it can be leveraged, it is money multiplier, it has guarantees and it is inflation proof and recession proof. Think about tapping into this account and leveraging liquidity when you're laid off from work or when you are unemployed, right? Think about the easy access to easy access to capital when you need it most. And at the end of the contracts there's two signatures. The administrator has to sign and you has to sign. If you had this opportunity, would you sign such a contract? And you may be wondering if it's even possible. What I just described is one of the most accurate definitions or characteristics of a participating and dividend paying whole life insurance policy. The contract is a whole life insurance policy contract. The financial institution is a life insurance company itself.

And ideally you want to deal with a mutual company. The deposit you're making is a premium extra deposit you can make is paid up. Additions equity is a cash value. Assets which is linked to a contract. What asset is is it based on? It is based on a life of an insured person. The event that triggers the payout is a death of the life insured person. Maturity amount is a death benefit. Dividend is a participating dividend that is being paid to the owner because you are the owner of this contract. Loans is policy loans and guarantees is provided by Assurus assurance is providing 90 to 100% guarantees of your cash value and death benefit. Have you read this book is Becoming youg Own Banker by R. Nelson Nash. It was written in year 2000 and sold over 500,000 copies. You have an opportunity to buy it today and then read it because this book can change your life and it's only 92 pages. Think about how this contract is inflation proof. So every dollar you put in creates multiple dollars in your net worth. So it is recession proof. It provides the liquidity in the times of economic turmoils. It is super easy to take a loan. No credit check, income verification, lower payment schedule, no requirements to pay it back and no NSF fees because the insurance company is not taking loans from your checking account because they don't have to. They have to make a minimum payment. There's no minimum payment. It is shielded from taxation. No capital gain taxes on your net worth increase and dividends are also tax free. I put an asterisk there because the dividends may be taxable if you withdraw this cash, right? So in order to keep the dividends tax free, you need to put them back into the system. And then you'll need to talk to an advisor to help you do that. There's no account management fees. Let's talk about the case studies. I have a couple here. His name is Louis and he's 55 year old, male, non smoker. His wife, Savannah, he's 49 years, she's 49 years old, non smoker. Louis works as an engineer, he's employed and his income is $102,000 per year. She's a designer, she's self employed, sole proprietor. Her income is $95,000. They have one son, 22 years old, but he no longer lives with them. They are financial objectives to build wealth. Predictably, they want to become debt free. They want to be ready for retirement. When Savannah is 65 years old, Louis at that point will be actually 71 years old. They want to travel a lot. They love traveling. They want to leave enough money to pay estate taxes. They also want to leave something to their son, but that's not their biggest objective. They know that they want to leave him something, but they want to enjoy their wealth in retirement instead and leave something just to pay estate taxes. They were told to do seven baby steps to increase wealth. And one of financial gurus they found online actually says that there are seven steps to take in order to increase net worth. Step number one, save 1,000 for your starting emergency fund. Step number two, pay off all debt except the house using the debt snowball. Step number three, save three to six months of expenses in a fully funded emergency fund. Step number four, invest 15% of your household income in retirement. Step number five, save for your children's college fund, which they don't really need to do. Step number six, pay off your home early. And step number seven, build wealth and give. And they're wondering, where should we save on $1,000? Should we put it in a bank or should we put it under a mattress? Where is our cash when we pay all the debt? We can pay all the debt today if we want to because we have some cash saved up. But where is the cash going? Where should we save up three to six months of expenses in a fully funded emergency fund? Where can we get money to invest 15% of our household for income for retirement? Where can they save for the children's college fund? And if they pay a house too early, where's the cash go? They were not told to create their own banking system because they are thinking traditionally, they know that all the cash Goes into someone else's bank and they're trying to build this big reservoir of wealth like this big pond or big lake. They're trying to build wealth and add a little bit of energy into this wealth building system, the wealth building place or reservoir. But they don't see the elephant in a room and the elephant is actually a huge leakage. So they're losing money because they're not controlling the banking function. That's a huge leakage. All this money is flowing somewhere, but it is not staying in their reservoir. When they started implementing this process of paying your debt first and then saving and investing, they realized that all this cash will be spent and they will nothing to show for. So at this point they actually found the process of becoming your own banker. They attended a webinar and they read Nelson Nash's book and they realized that when they pay all the money to the banks, the money will be gone. And then they cannot take it again, they cannot use it again. The problem is not the debt itself. By paying off the debt with cash, they're losing the cash forever. By saving money in a bank, they're not in control and the cash is not keeping up with inflation. If anything goes wrong, even when they are debt free, let's say they paid off their debt today. If something happens, they need to borrow again and they will need to start paying interest again. What can go wrong? They can lose job or income. If they have a long term unemployment, the mortgage has to be paid, the rent has to be paid, the bills have to be paid. If something goes wrong with the health, they have to actually also come up with cash. Right? So there may be critical illness in the family. And I do have critical illness insurance on me and my wife has critical illness and all my children have critical illness insurance. If there is an emergency, if someone in our family gets critically ill, I will probably be off work for some time and that's a huge leakage. So I want to make sure that there's money showing up when you most need. If there's an emergency in a family, they can also spend their savings. They can tap into their retirement plans. By investing their capital, they're losing access to it. So if they pull out their investment in lean times, then the compounding stops. So let's say they have some retirement savings. If they pull it today in the times of emergency, the compounding stops and the growth of networks actually slows down. Some accounts are not even available to be used. I'm talking about accounts like RESP RRSP locked in investments, GICs. So those types of accounts which are registered with government, you can even access some of them or access them conditionally. Yes, you can leverage entity in your house. But guess what? You need to qualify for a bank to actually borrow against your house. And the bank will look at your credit score. The bank will look at many, many factors will look at your income. The main factor for the bank to get access to this equity in the house is if you're able to pay it back. If you lost your job, guess what? You may not actually even qualify for the home equity line of credit. So for them it was a paradigm shift. They discovered the new process of increasing net worth predictably. Step number one, learn about the process of banking. Read the book. Step number two, connect with a coach. Step number three, start your own journey. Open a system of policies and fund them. Step number four, build wealth predictably and increase net worth. Step five, recapture your debts, although it may take some time. Step six, fund your investments from your banking system. Don't spend just your cash, but rather use your banking system so that you fund your investments and your money is growing in both places at the same time. Step number seven, expand your program to control more your wealth. You will need to get support from our advisors. So text the word schedule from your mobile phone to 780-809-4599 to book a call with one of our advisors. This is the breakdown of their net worth and the income. So Louis is making $102,000. Savannah is making $95,000. The for the household is $197,000. The expenses so they're paying about $70,000 in taxes. Mortgage is 44,232 and living expenses is $59,000. So their discretionary income is about $24,000. So they used to put them into RRSP and other investments and actually have done really good job saving up. Their assets are $900,000 is the principal residence. The cash is 60,500. TFSA which is Tax Free Savings Account is $30,000 and RRSP accounts are $350,000. But they stopped contributing because they found this concept and they decided you know what, we actually want to redirect our payment, redirect our savings of discretionary income into something that is growing faster and better than the RRSP which is not guaranteed to grow. Even their liabilities are mortgage $646,000. The payment is $3,686 per month and it is up renewal in two years. Line of credit is $25,000 and the payment is $219 per month. They're only servicing the interest. The total liabilities is $671,000. If you add up all the assets and all the liabilities, you will see that the net worth is actually positive. It's $669,500, but it includes RRSP. And you probably know that if you have RRSP included in your net worth, then probably half of it is not yours, right? So you probably need to only include 50% of it. And if they do, then their net worth, their real net worth, is actually less than half a million dollars. So they decided to open two whole life insurance policies and they're using half of the discretionary income for each. So $12,000 for Louis and $12,000 for Savannah. So the base premium, which means the minimum required premium, is $6,105 for Louis and the paid up addition is 58.95. These two numbers come up to $12,000. For Savannah, it's $5,072. And paid up additions is $6,928 altogether comes to $12,000. They also asked the coach, how can they actually make sure that the amount of premium can be increased in the future? And the coach actually helped them set it up properly so that the maximum amount is actually $21,040 per year. It's not 12. They were able to increase it to 21,000. And they wanted to actually, you know what, want to move our savings and put it into this. And we also want to make sure that we front load it. We can do something that's called backdating, where more of your savings can be put immediately into the system. And instead of doing one annual deposit, you can actually make two at the same time. So they're putting 21 plus 21 for Louis, which is $42,080. And they're putting in 21,295 plus 21,295. So this way almost all of their cash is going into the policies and almost all of their TFSA is also going into the policies. So cash and TFSA cumulatively is just over $90,000. The death benefits, starting death benefit for Louis is $648,700. After the policy settles, they paid $42,000 for Lui. The death benefit immediately goes up to $705,000. The death benefit for Savannah starting death benefit is $691,500. And as soon as the policy is settled, the death benefit is actually $88,000 more, which is $783,000. The cash values. So they put $42,000 plus each. And after the policy settled, the cash value available to borrow against is $30,890 and they can borrow 90% of that. So loan available in Louis policy is $2,000 $7,800. In Savannah's policy, the cash value is $31,144 and the loan available is $28,830. So between the two of them, the cash value available is actually more than $50,000. This is a breakdown. And the total premium paid is 84,006.

They paid between two policies. They paid two annual premiums right away. And the source of premium, like I said, is cash and tax free savings account. So the cash value immediately $62,034. Altogether the loan available is $56,630. The daily cash value increase is $22 a day. Think about it. Every single day, the cash value between two policies is going up by $22. So they initiated a policy loan immediately of 25,000. Because remember, they have a line of credit outstanding and they paid it off completely. The loan interest is $4.45 per day. So loan repayments, they actually decided to pay the same amount of interest that they used to be paying $219, but they increased it by $100 each. So they're paying $219 plus $200, which is $419 back to the system. Their net worth increase is $17. 50. How they came to this number is because gross cash value increase is $22 minus the loan interest 445. It comes to 1755 a day. So net of interest, it equals $6405 a year. Think about it. They have paid $84,670 and their net worth started growing by $6405 per year. And next year, by the way, this increase will be higher. One year later, the premiums are due again. Right? So they remember they wanted to only use the discretionary income to pay 12,000 into each policy altogether 24,000. But minimum premiums are required is actually lower. They don't have to pay 24,000. They only need to pay 11,177 into these policies. But they paid it to the max. And the remaining deposit they can make on top of 24,000 is actually $18,335. And they were thinking about it and it's saying, okay, so how can we move our money around so that we can actually take advantage of the increased growth in our policies. And because of the coaching, they decided actually to use their RRSPS account and pay taxes today because they know they have to pay taxes at some point. If they wait longer, they will just end up paying more taxes. They ask the coach, show us how we can move this into the policy so that our system grows faster and it is accessible to us now. They decided to withdraw about 36,000 per year. And this withdrawal is taxed at a marginal tax rate today. So half of it is going to CRA right away because of withholding tax. And 18,000 after tax is being put into the system into two policies between Louis and Savannah. So they decided they can recapture the taxes inside of the policies so that their nest egg is not going to be taxed again over the next 10 years. Louis will be 66 years old and Savannah will be 60 years old. Louis and Savannah are still working full time. Right? So the premium paid is the initial deposit of $84,670 plus the 24,000 per year for over 10 years. That's 240 plus 18,000 each year of after tax RRSP withdrawals. So altogether the total deposit comes to $504,940. That includes our RRSP money. Money withdrawn from our rrsp is actually 360k. It's a little bit more than initially because the account was still growing. The withholding tax they paid on rrsp withdrawals to CRA is $180,000. Right. Half of it went into CRA, but they want to stop making premium payments after 10 years of additional contributions. In terms of the chart, so the orange bars on the chart represent the premiums. Right. So they pay annual premiums. So for the first two years.

They used their savings NTFSA to pay for these premiums. And over the next 10 years, they used their discretionary income and they used their RRSP accounts to pay taxes. And what's left after tax they're putting into this system. So every year they're putting 42,000 into the system. And the gray bars represent the total net outlay. So the money that is put into the system. Totally. Right. Oh, you can see that after all the RSP account is used to put into the system, they decide, you know what, we don't actually want to put into the system again, we want to stop here. And that's why the total net outlet doesn't increase anymore. But the orange area represents the cash value increase. Do you see that? The cash value is actually now higher than it was before because the cash value is growing very fast and it is compounding daily. Even I just wanted to show something here. So on this chart, very important to understand. So even after they stopped making premium payments, what happens with the cash value? Does it go up or does it stay the same or does it go down? It's incredible how they stop making premium payments but the cash value is still going up. So by the time they stop making premium payments, the total net outlay is $505,000 almost the cash value is $627,000. And then they don't put anything in for the next four years. And the total net outlay doesn't change. It is $505,000. But the cash value increased significantly for four years. It increased by $133,000 over four years. Why? Because it is compounding and increasing. So let's fast forward 15 years from today. Louis at this point is 70 and Savannah is 64. They stopped working and they want to get passive income from policies. So the total premium paid again is $505,000. Total income paid from RRSP withdrawals is 180k and that amount was paid at marginal tax rate. The total cash value is 760k which is 142% more than the tax paid on RRSP withdrawals. The death benefit between the two policies is almost $1.5 million. It is 295% more than all premiums paid. So they paid 505,000. The death benefit is almost three times more than they paid. What happens if they die today? When they die today, based on this situation, there will be two death benefits paid and the total amount will be $1.485 million. How much tax would paid from their capital sitting in their policies? The answer is zero. There's no tax because the death benefit is paid tax free. If they had RRSP still, if they didn't melt it, if they didn't use it, how much tax would it trigger? In their states, it would be taxed on a second death at marginal tax rate. So when the first death happens, the RRSP is rolled over to the next surviving spouse on a tax deferred basis. But when the second spouse dies, then everything is added to the last to die spouse at a marginal tax rate. So let's say they didn't die. They wanted to start receiving passive income from these policies. So what they do, they decided to collaterally assign the policies with the bank. They start getting 48,000 every year from these policies between the two of them for 21 years in a row. Total premium paid again, I want to remind you, is $505,000. Total income received from policies at $1,008,000. So this number is basically multiplying 48,000 by 21 years. That's $1,008,000 at death. Life insurance company will cover the loan outstanding with a bank and the remaining death benefit will be paid to the beneficiaries. So there's outstanding loan in a bank and life insurance company sends two checks. One check goes to the bank to cover this outstanding loan in interest and the remainder goes to the beneficiary. The remainder between the two of them from two policies, it's $729,000. Two death benefits, and that's tax free. So Money in is 505. Money out is $1.737 million. That is coming from $1,008,000 of passive income and $729,000 from death benefit from two policies. And that's tax free. The ratio between money in and money out is actually 344%. Let me ask you a question. Is there anything stupid about doing that? There's nothing stupid about that. So are they too old to start at 55 and 49 for Savannah? Actually we have this question asked a lot from our clients. Am I too old? I'm 52. Am I too old? No, they're not too old. It's a great time for them to actually still use the time to grow and compound their policy so that they can still use it. Let's look at a chart. So passive income for Savannah and Louis, the blue line. The blue bar represents premiums for 12 years. And by the way, the premiums in the year 11 and 12 actually go in down a little bit after that. There's no premium coming in. That's it. Premium are down. The orange line is representing the death benefit. It is actually going down a little bit because at this point they had term insurance riders added to them. And after 10 years, the term rider is gone. So the total death benefit drops down, but it is still way higher than whatever they've put in. The orange bar is showing the passive income. So on this side you can see how much passive income they're getting. They're getting 21 years of $48,000 per year. And that is actually tax free. The gray bars represent outstanding debt with the bank. There is outstanding loan, outstanding interest, and that is increasing. But at the same time it is increasing. The death benefit is still increasing even though There is no more premium coming in. The death benefit is going up and they can borrow against the cash value. So what they basically doing, they're basically spending part of their debt benefit because they're borrowing against the cash value. The longer they live, the bigger portion of the death benefit will they spend. So you see that in 21 years of doing that, they have come to about 3 4th of the death benefit spent. And then when they pass away, there's still death benefit that is paid out to the beneficiaries tax free. So this blue line represents the net estate value after the loan is even paid. What happens if they die? Right after receiving passive income? They just decided to collateralize this policy and they both died. Then what happens? So there is a death benefit. They may receive one passive income 48,000 and they pass away. There is a huge payout. The remainder goes to the beneficiaries. The longer they do that, the less amount goes to the beneficiaries and the higher amount is spent as passive income. Let's look at a second chart. This chart shows money in and money out. The money in area, the money in area. The blue area represents money coming into the policy. So it has been coming in for 12 years and then it stops so it doesn't change. For the remainder of this chart the gray lines represent the death benefit and the orange columns represent the total amount of income received. So they are spending the death benefit, they're borrowing against the cash value and essentially they're basically receiving passive income. But the payout is always, always greater than money in. Do you see on this chart that money they receive from the policy is actually lower than what they've paid in? No. Right. It doesn't happen. Let's see what they can do differently. The alternative income can be actually received from rrsp. If they didn't use it, they can still use the RRSP to grow it instead of putting into a policy. So if our RRSP is not withdrawn today, it will be growing for the next 15 years. Let's assume 5% net of management fees. The RRSP has to be then converted to rif, it's registered retirement income fund. At some point when you are done investing into rrsp, you want to turn it into Riff and then you want to start pulling money out of it as passive income and they're ready to start receiving passive income. The value of reef on the 15th year will be based on this compounding 5% per year is $727,000. So it increased from 350k to 727k. So they want to draw income from this. And to receive net 48,000, they need to actually draw more money. So their marginal tax rate is 25%. So they have to pull 32,000 each, which totals to 64,000 in order to receive 48,000 net of taxes. After taxes, 64,000. They're getting 48,000 between the two of them. If they're doing that, they will completely run out of money in 14 years. When Louis is 84 and Savannah is 78. What if they live longer? What if they live till 90? What if they live till 95? How much income are they still getting? The income will be only very, very small based on whatever they get, CPP and OES and maybe some payments from the government. What happens if they pass away too early? There will be a huge tax bill for them. Income received from two policies is $1,008,000 plus net estate value of $729,000. That comes to $1,737,000. Income from RRSP received is 713 and 262. The difference is more than a million dollars. Where does the difference come from? The difference come from them putting money into the policies and from recapturing all the interest that they would otherwise pay to banks. Projected income from RIF is $64,000 gross, which is $48,000 net. But it is very optimistic. So 5% constant return year over year, net of fees may not be even realistic in the long run. If they pass away too early, then 50% of the account will be taxed at marginal tax rate. The beneficiaries of the estate will only receive the after value. There's no death benefit. So while the RRSP is growing and compounding, they cannot leverage it. What is the cost of not having access to your capital? Think about it. So if you don't have access to your capital, if it is locked in, what is your cost of really not having access to it? What opportunities you will not be able to invest into that cannot be even measured. The future tax bracket is not guaranteed. They may actually be higher than 25% so that the net income will actually be lower than 48%. So the tax bracket may be changed and most likely it will be changed. If they outlive their retirement plan, the income will drop at later ages. They may need to find an alternative. If they run out of money, what do they do? They probably have to come up with some idea, maybe just to do like a reverse mortgage. And they're also paying much more Taxes than they pay by withdrawing it today because the amount of account is growing up, even at a lower tax bracket, they may still pay much more taxes. And because of the terminal tax liability too. Let's see. Did they achieve their objectives? These are their objectives. Predictable wealth building. Did they achieve it? Yes, they built it predictably. And was it recession proof? Absolutely. If they lose their income, if they lose their jobs, if something happens with the economy, can they not tap into this account to borrow against it? Is it not easily available for them to leverage this cash value? Absolutely it is. So it is recession proof, is it not inflation proof? It is inflation proof because the growth in a policy is very high. So it actually outgrows inflation. Does it not reduce their taxes? Of course it does. Can they become debt free? Yes. So if they choose to use the policies to actually pay off the mortgage quickly, can they not do it? Of course they can. They can take a policy loan, put it on a mortgage balance, bring the mortgage balance down, and this way they will pay it down quickly. Did they achieve the objective of being ready for retirement when Lee 1774? Yes, they have a pretty good retirement and that is tax free. Can they not travel a lot as they love to? Of course they can, in terms of recapturing the cost of the trip. So how does it work? If they plan to travel somewhere, they take a loan from a policy, they pay cash for the trip, they go to Europe, and then when they come back from their incomes because they're still working, they can still pay it back on their terms. Instead of spending cash, they can actually flow all these expenses they have in life. What changed for them is they have readily access to liquid capital. And are they leaving enough money to pay their stock taxes? They sure do. They leave enough money for the beneficiaries to pay their estate taxes. So by putting their capital into private contract that they own and control, did they lose access to it? No, they can still access it if they need to. Is it easier for them to go through financial insecurity with having access to liquid capital on demand than giving it to capital to banks? Yeah, absolutely. It is easier. If you knew that at passive income time you would be getting back everything that you've paid into the system tax free, would you object to putting more money into it? And they said no. Did the cash value ever go down? No, it didn't. Even when they stopped making premium payments, it's still going up. Can we call it a predictable growth? We sure can. What effect did this contract have on their net worth? Growth, predictability, security. So you may be wondering, this all sounds great, but I don't want to do this alone. How do I do this? We can offer you one on one conversation with an authorized Internet banking expert and then we provide lifetime mentoring, quarterly group coaching sessions. And as a client, you get access to client only, exclusive access to resources that we only have for clients. So you get lifetime coaching with your advisor, with your coach who can not only help you set up this system but also help you implement it and apply it and recapture a lot of interest that you're paying to banks right now. So right now you have two options. First option is do nothing. Nothing changes if nothing changes. So you will continue to work your butt off of the banks government in trying to outpace inflation, but everyone is still getting all your money in. Second option, schedule your discovery call, take hold of your personal finances and put the control back in your hands. Picture a day when financial control is in your hands. Not a bank, not a government, and not in a risky stock market. When your finances are exactly where you want them to be and you know with certainty that you have the freedom to travel when you want to travel. Relax when you want to relax. The time will go by anyway. So have it go by with this proven and predictable system in place rather than doing your financial transactions the old way. So click the link you received by text or text the word schedule to 780-809-4599 and reserve at any time. That works best for you. Just people and dozen.

What if you get a sizable influx of cash? Would you start another policy?

So let me ask you a question. When a bank has too much money, right? What did they do to expand? The bank opens up a new branch to expand, right? So for you to expand when you have a windfall, we just need to make sure that we put back into the system. If you want to grow your system, put it back. If you don't want to grow your system, just spend it. Then you open a new policy on yourself. Or are you always opening new policies against someone else? Yes, you need to talk to your coach because this question is a little bit too deep, right? So your coach will help you understand who should build the life insured. But you're not limited by one policy on yourself. You can open multiple. Can IBC be used for utility?

It absolutely is. Homeowners or home investors, real estate investors, things like utilities, things like property tax, things like an emergency fund for repairs, all those type of things, right? A tenant leaves on you, whatever the case is you could absolutely use this as an emergency fund or also redirect those expenses here. And now think about all the expenses that you're paying out to somebody else. And now consider that if that's an expense that's being paid to somebody else, that's somebody else's income and somebody else's profit. We can literally just redirect that to our own system. The expense can be taken out or replaced with any other expense. So long answer. But to answer your question in a short way is absolutely. Property taxes, utilities can be recaptured in your system. Any expense can be recaptured in your system.

How much insurance can you get? The insurance company will underwrite you based on your income. So whatever your income is based on the need for insurance, the more financial risk your death will create, financial mess will create, the more insurance you can get. So but it is based on your income. When you talk to an advisor, advisor always makes sure that we look at your need for insurance, how much insurance you actually need, and you can get up to this limit. Normally if your income goes up, then you can actually get a little bit more insurance as well.

Can the government ever bring up a bill to tax the capital in an insurance company?

Well, it's at the peril because a contract, that's what it is. So we deal with contract law. So if you have a contract in place, then it's a contract. Now it doesn't mean that they couldn't change the rules and that a contract issued two years from now has different laws that it has to abide by. But the contract I have in place and multiple contracts I have in place have, it's tax exempt. And the life company has a job to keep it tax exempt.

If a contract is put in place today under this rule set, when the rules do change, that rule set does not affect the contract that's already put in place.