How To Turn $0.01 Into $10,737,417 With COMPOUND INTEREST (Canada)

But what the banks don't want you to know and don't want you to be thinking about is all the interest that you would have otherwise given up the opportunity to earn. So if you have this growing pool of financial value that never leaves your control, it cannot go down, it cannot be repossessed, it cannot be taken away from you. That really is the truest definition of savings, because savings can only be achieved inside of an instrument where there is zero possibility of losing the money.

Can you turn one penny into more than $10 million.

In 31 days?

Sounds like a lot.

That sounds like a lot of money. Well, when you're talking about compound interest, one of the examples that comes up in the conversation is just that, the penny doubling every single day for 31 days. But let's rewind a little bit and let's talk to what compound interest actually is. So, for example, if you take a sum of money. So, Richard, we're going to use a sum of money, we'll say saving 500 bucks a month. And you put that $500 away in a savings account, and that savings account is paying you a percentage of interest. So think about this for a moment. You're taking that money and you're storing it in someone else's bank. And in exchange, that bank is going to pay you interest because that bank is going to keep your money in constant motion. So let's say the interest rate is an astronomical 10%. Let's keep the math real simple. 500 bucks a month over one year is how much rich?

Well, that's $6,000.

Okay? So you leave $6,000 on deposit with the bank, and you've left it there for an entire year. And the bank is going to pay you 10% interest on those savings. So the bank is going to pay you $600 in exchange for you leaving your money on deposit with the bank. Now, here's what's super important to understand when you do that. The bank now has control over the motion of your money, and the bank is not going to let that money sit still. They can't let the money sit still because. Are you sure? I'm positive. The money that you've left on deposit is a liability on the balance sheet of the bank. Because the bank.

Really important takeaway for anyone listening. Any, Any. Every liability that you have is an asset in someone else's asset column. Okay? Versa.

Great point. Now, if the bank is willing to pay you. Now, no bank is paying 10% on your money. Humor me for a second here. If the bank is willing to pay you 10% to leave your money on deposit with them so they can gain control of the motion of that money. Do you think the bank is quite confident that they can earn far more than the interest that they're paying you?

Let's think about that for a moment. And if you leave that money on deposit for another year. So here's where the compounding effect comes into place. Now, you have $6,600 on day one of the second year, right? You put 500 bucks a month into the bank. You've stacked up the money, you've been paid 600 bucks in interest. We're not taking into account tax or anything of that nature. And then in the second year, you continue depositing. So now you've deposited another 6,000 bucks. You got $12,600. You earn 10% on that total amount. That's another 1260 plus 12,006. Anybody like, totally shaking their head, getting confused yet? So that's 13,860. You're creating this compounding effect, but you have no control over the motion of that money. The bank is putting that money to work for the benefit of the stockholders of the bank, not the depositor who left the money there.

Now, can you do something different, Richard?

Oh, absolutely. There's lots of different ways you can do it. In fact, most people, they have that money accumulated into their bank account, and we become creatures of habit. We see things, white, shiny objects that we really want to get, like on Amazon or at Best Buy or whatever the store is that we're in. And that money that's accumulating, well, it often finds a way of disappearing and draining out through purchasing power. And then every time that we drain it out of that account, well, we've given up the compound potential that we're now receiving on any dollars at exit. So if you have that account at the end of the first year, it's got $6,600 in it, and you take that interest of 600 back out. Well, you didn't just kill $600 of money. You killed all of the money that was going to earn on that $600 for the rest of time while it was lumped together in the larger sum.

So you've got money in an account. You want to purchase something, your objective is to purchase that something. You ease on over to the bank. You say, listen, I got 6,600 bucks in the bank. And it just so happens that what I want to purchase is 6,600 bucks. I need to withdraw that money. So now my account balance is zero. I've achieved the objective of purchasing that something, but I can't earn interest on that money now for the rest of my lifetime or any future generation that comes after me. It's the truth. There's one fundamental truth that needs to be understood, and that is your money must reside somewhere. Now, if our video editor can do something really like boom, like making that, like a, I don't know, like an explosion or some big aha moment, the truth is, your money must reside somewhere. And so if you knew that there was a place where your money could reside, it can grow, it can earn interest on a daily basis and grow uninterrupted. Meaning when you need that $6,600 item. Following the same example, if you're storing the money inside of dividend paying, participating whole life insurance and you get to borrow against your own pool of financial value, so you've still got the 6600 growing every day uninterrupted. You can access a policy loan from the life insurance company, go and purchase that item that you need. You're going to repay that policy loan, re access everything that you repay. And yes, you're going to pay interest on that policy loan. But what the banks don't want you to know and don't want you to be thinking about is all the interest that you would have otherwise given up the opportunity to earn. So if you have this growing pool of financial value that never leaves your control, it cannot go down, it cannot be repossessed, it cannot be taken away from you. That really is the truest definition of savings, because savings can only be achieved inside of an instrument where there is zero possibility of losing the money. Most people don't know, Richard, you can attest to this. Most people are unaware that when you leave money on deposit in a commercial bank, you become an unsecured creditor of that bank and that deposit is no longer yours. So that's not truly in the spirit of saving money.

You've transferred over control of the money to another entity, that custodian and the ownership of that money. They give you a receipt, right, which is basically a deposit slip saying, we've received your money. We now owe you this money that you've placed on deposit with us. It's a liability on our books that we owe to you. So it's. But it's not your money anymore. You just have a receipt that you basically have. You've, you've essentially lent your money to that bank for them to go put it to Work with all their other customers. And it's hard to get our brain wrapped around that sometimes because we're just not trained to think that way because we're just used to being a customer of the bank. The bank has demonstrated, or banks, plural, have demonstrated that they are a trustworthy source and location for us to put our capital to work. And more importantly, if you're operating in the world today far and wide, you can't even receive income from an employer or whatever without having it done. Direct deposit to a bank account now. Right. So the whole machine is built around this premise that the bank is who's going to become first custodian of your own money. Yeah.

They get to see it first and then the control the motion. Well, banks don't let money sit still. They can't let money sit still. And so think about, if you look at your own experience with money up to this point in your lifetime, think about all the money that you've spent on vehicles, property, groceries, fuel, recreational vehicles, business expenses, business equipment. What else am I missing here? Weddings, education. The list goes on.

Winter tires.

Yeah.

Transmission replacements. Right.

And so think about all the money that you have spent on those things up to this point in your lifetime. Can you write me a check for that amount of money right now? Probably not. In fact, most likely not. And so people are chasing the. We understand that people can invest money. You can put money to work to grow that money. People are chasing the bitcoin and.

Trying to kick the hedge fund manager in the nuts and all the things that they're trying to do to chase that quick buck. And nobody is sitting down saying, can somebody help me understand who's controlling the banking function as it relates to my needs? And I'm spending money that I'll never see again. I can't earn interest on it again. I can't use it again. I'm likely financing and paying interest on things like a mortgage, a car payment, credit cards that are in my wallet or my purse.

It's absurd. You earn an income, it gets deposited into someone else's bank. The bank puts that money to work for the stockholders of the bank. You are interrupting the compounding effect on your own money by saving it up in someone else's bank and withdrawing it to go and buy the things that you need. And then you have to go to a bank to borrow money when you need access to more of it. It's completely absurd.

The reason you go to the bank to borrow money is because he who has the gold makes all the Rules he or she. They've accumulated a capitalized pool of money which isn't theirs, because the money that they've accumulated is. It's yours, Jason, it's mine. It's the people who are leaving money on deposit. And we have to beg, borrow, and steal and provide every piece of paperwork under the sun to get access to that pool of money, because we don't have our own pool sufficient enough size to tap into. So it's a capital pool problem that we're trying to solve. And who's got the capital pool right now that you're doing business with? Well, the person should be you. But when you use your own capital, then you're always depleting. It's, you know, accountants refer to it as a sinking fund method. You build up a pile of capital and then you sink the fund down to zero.

You sink it. You drown the damn thing.

That sounds like a great idea. Let's build up a big pile of capital that was working really well for us. Then let's drop it to zero and start all over from scratch. Well, that happens repeatedly through people's life all the time. Because we didn't know that there was another way, that there are vehicles in place, there are financial vehicles that would allow you to accumulate that pile of capital, that reservoir warehouse of capital, allow it to continue earning, continue growing for you, but still having the ability to access it and put that capital to work in some other area of your worth, because you still need to go buy winter tires and buy all these things that we talked about.

Here are some really fundamental things about dividend paying, participating whole life insurance that is so widely unknown. First and foremost, the moment that a policy is put into place, a pool of financial value called cash value begins accumulating inside of that policy immediately. And it grows on a daily basis. And it is contractually guaranteed to match the total death benefit of the policy by age 100 of the life that is insured. So imagine you can create this growing pool of financial value, and all you have to do is age. There's no stock market risk, there's no government intervention. There's no.

Bank manager or loan officer that you need to be dealing with. And as you're growing this pool of financial value, you can borrow against that pool of financial value and access money in the form of an unstructured loan. Putting yourself in the driver's seat in a position of total and absolute control.

That's really important. So if you're really listening, make sure you capture that Jason said an unstructured loan, unstructured, meaning you have complete and utter control over that instrument. So the repayment mechanisms of how you want to repay it, which we encourage, we recommend. There's a whole host of details that we have on how and why to do that. But you're in the ultimate control position, unlike any other loan that you're accustomed to having from any other financial institution, a third party financial institution where they set the terms on repayment. And if you don't make a payment or you skip payments for six months because you went on a holiday or you lost your job for six months, they immediately go and ruin your credit. And then it ratchets up the cost of interest, which compounds negatively against you on every other thing that you own. So it's unstructured. The unstructured loan provision that's available in these contracts is so fundamentally critical, it's so important because it is the ultimate method of control of your own financial life. Totally allow while your money continues to grow as though you never touched it, because you didn't, your money did, never came out of its account. You know, we used to do this thing, Jay, where we would have. Just picture, you know, we have a little water glass, you know, so you've got a water glass in my hands. We say, well, this represents your pile of financial value or cash value of the insurance contract. And then we would have the big jug. Well, it turns out I actually have a big jug here today. So I've got a big old jug.

Look at this.

Check out my water intake here, everybody. So you have this big, giant, huge jug. And that's the, that's the money pool. That's funny because it's water. It's actually a pool, the money pool of the insurance company. And when you go to Access Capital, you're actually getting your money out of the giant pool, the general fund insurance company. Your pile of value is never touched. So it continues uninterrupted growth throughout the rest of time. The only thing that kills it is if the policy owner decides to stop paying for the premium to get rid of the policy. Or the life insured is no longer with us, they've passed away, they've moved on. And a death claim is paid, in which case way more money than what was put into the program gets, gets shoved out tax free to the beneficiaries, the people you love and care about.

A couple of things that are so important to expand on as it relates to that one is the uninterrupted compounding. So let's go Back to a penny, doubling every single day for 31 days. What do we achieve with that? We start with a penny and then it doubles every single day for 31 days. What do we end up with? North of $10.7 million. So if you know that you're going to need to use some money throughout the rest of your lifetime and in order for you to gain access to money, for most people, you're exchanging your time for a paycheck or you've invested capital and more capital is coming back, you're multiplying your capital. If you're transferring control over the use of that money over to someone else and they understand how to achieve uninterrupted compounding, who do you think is coming out ahead financially? And so if you recognize that this is something that you can do in your life, join The Bankers Vaults YouTube channel. There is so much content. The process that we're talking about is the process of becoming your own banker, which is you might be thinking, wow, becoming my own banker. How on earth do I do that? The process we're describing is becoming your own banker. The infinite banking concept pioneered by the late R. Nelson Nash, who wrote the book titled Becoming youg Own banker. It's a 92 page read. It's a great book to add to your library. It'll take you the better part of an afternoon to get through it. And if you found yourself thinking this whole uninterrupted compounding thing is very interesting, I want to take control of that function as it relates to my needs financially for my family or my business. Then just go ahead, check in the link below the YouTube's video here and get yourself a copy of that book. You'll be glad you did. But be sure to join the Bankers Vault YouTube channel now. Rich, I'm going to ask you this question because I just had to capture this note before we hopped on to record this YouTube video.

Do banks let money sit still?

Not at all. They have to put it into motion in order to appease their shareholders the moment the money hits the bank. I mean banks are lending 24, seven, they lend even. There's overnight lending. You can Google that. There's an ad that says money follows the sun. So as the time zones shift and people are in business operation and other parts of day to day business operations in other parts of the world, banks are lending overnight. That one bank closes, but they sent money for lending and then by the time they're back up for business in the morning, like interest has accumulated back from the overnight lending that they do. So money is always put into motion at the bank level and they're putting volume and velocity. It's they get you put a bought deposit in there for $10,000. Well they have to maintain a fraction of your money on deposit. So they keep $1,000 but 9,000 bucks that gets lent out right away. Well when that $9,000 comes back in through the method of payments, it brings friends with it. They don't just get the 9,000, they get the 9,000 plus interest. Right. And they're just paying you a little pittance to keep your money there at this point in time, like very, very little. So they're just volumizing and then putting speed on that. Those transactions at an unprecedented rate. I mean the computer basically does all for them. So they're earning substantial amounts because they're able to do that. And they're using OPM other people's money to get it done.

The other people is usually isn't that interesting. And you know what most people don't know out there in the financial world today is that.

If you have a dividend paying, participating whole life insurance contract or a system of contracts that you can truly become your own banker. That is the tool that enables you to implement that process. Here are the reasons why your money must reside somewhere. And so if you park your money, you store your money somewhere and rather than leave it on the books of someone else's bank, you're now putting that money into a policy or a system of policies. You immediately begin to accumulate your own pool of financial value. When you need access to money for all those things that you would have otherwise paid cash for, leased or financed throughout your lifetime, you can borrow against that accumulating value without interrupting the compounding. And you control the repayment schedule and you get to re access everything that you put back in. You become a part owner of the insurance company that has never failed to produce profit since inception. We're talking 173 years and counting in Canada.

You're a co owner of a business that cannot inflate the money supply.

That cannot inflate the money supply. That assumes 100% of the risk to grow your capital on a daily basis that can never be repossessed, never lose value, never be taken away from you. Regardless of what's happening in the stock market, the economy, the real estate market, etc. The process of banking goes on no matter what. And so if you can take control of that function as it relates to your needs, you are going to create an Outcome that is much different than anyone in your peer group, because everything that you are doing financially is measured against what everyone else is doing financially. And so if you're chasing the next Bitcoin or the next GameStop or the next tip in the stock market, that's your privilege, that's something to do. Just make sure you're not betting your entire house of cards on that. Because there's risk. Here's what happens when you invest capital, you subject that money to the risk of loss. And so you can still invest in things, but don't ignore who's controlling the banking function as it relates to the use of the money.

Well, here's another piece on that, too, Jay. And this is like, you know, we started talking about compounding and compounding, compounding interest.

It's like this. I don't know this. Dragons that don't exist. It's like this thing that you don't ever get to see, but everyone talks about, well, people will generate returns on things, investment returns, and then also people will generate an awful lot of investment losses. Now, we talked to people who've seen both of those things. We've seen the extremes on super highs and super lows on both sides. And sometimes you talk to one person that's like, wow, you wouldn't believe what happened in the last, like, 30 days. Like, wow, I made like, 100% of my money. This is amazing. And then the next year, it's like, wow, it's all gone. Because GameStop, Robinhood, whatever it is that comes out and takes it all out at the knees. Here's the thing that is not compound interest. That is that you might be able to compound your returns. You might be generating returns or losing them, but compound interest can only happen inside of an instrument or a vehicle where you have. Where it's actually growing. It's growing at a consistent constant rate. It's always there. So when you always look at an Excel spreadsheet, people are happy to show spreadsheets on things all the time. And they'll show the power of money compounding over time. But what they won't show is, oh, yeah, here's where. Then this year, here's where we lost 50% and then it all came back up again. But then, boom, here's where we lost 50% again. And so that is not uninterrupted. Okay? And, you know, they often say that Albert Einstein is quoted as saying that compound interest is the ninth wonder of the world. Well, he didn't. He was talking about compounding, not Interest specifically because compounding happens in other areas of our life as well.

So just like compounding numbers.

Compounding numbers, exactly. So just recognize that when people are talking about compounding or compound interest, are they actually talking about interest and is it actually compounding? The only way it can compound is if it sits in an environment and stays there. The moment you pull it out, you lose compounding. It's done. You can't continue it once it's removed from that environment. And that's what most of the world is doing. They might get it for a little bit of time and then boom, they pull it out and it's gone. And oftentimes it's not really compounding. We might be seeing the advantage of some investment returns potentially, but they're up and they're down and they're up and they're down and they're up and they're down, which means it's inconsistent. So just be really clear. What are you really getting? Are we really talking about compound interest? Because if it's interest, well, then interest should be in an environment where you're actually earning interest. If you're earning a return on something because a mutual fund went up or a stock went up, well, that's not compound interest. That might be a capital gain or it could be something else, but it's not compound interest. So be really clear about what it is that you're actually talking about. Be referencing things that are relative to the accurate, you know, the real information.

Well, that was an interesting topic. And so on that note, we want to share. Just go ahead, click on the next video that's showing up in the playlist. Continue on your journey of learning. Join the Bankers Vault. Get your hands on a copy of R. Nelson Nash's best selling book, Becoming youg Own Banker. Thank you sincerely for tuning in. We hope you got some value out of today's episode. Continue watching. You'll be glad you did.