How to Turn Your Car Payments into Retirement Income

This is really very simple. It's, we're going to use cars, we're going to use a lot of them. The kids are going to need them. The kids spouses are going to need them, the grandkids are probably going to need them. Someone is going to get the money. Who should it be? Let's talk a little bit about money flow. Now we have this thing in Canada, not every, you know, Alberta, they don't talk about, you get a power bill, you don't just get a hydro bill. But in B.C. and many parts of Ontario, a lot of Canada, they think, they say hydro and that's your power bill. Well, that's because they've harnessed the power of water. The movement of water turning a turbine, generating power and the, so the power of water, the flow of water is something that is a tremendous amount of harnessed power. Well, water's got a flow and money's got to flow. And that flow, that energy, is called cash flow. How is that cash flow and the energy of that cash flow disappearing in our life? And where are parts that we can start to retain and contain it and harness it with for our family's energy potential? Now, I'm going to read a little something from page 11 of Nelson's book here. He says banking is the most important business in the world. Without it, all businesses come to a screeching halt. Whenever a business transaction takes place, money must flow from one party to another. Money must flow from one party to another in a relatively short period of time. Otherwise nothing takes place. That is what banking is all about, folks. That flow of money must come from a supply source. That's the essence of what the banking business is all about. Someone or some organization has control over a pool of money that can and must flow at a cost to meet some need. There's only one pool of money in the world. The fact that it is managed by any number of institutions, including banks, insurance companies, corporations and individuals and various currencies and countries is incidental. So this is really the fundamental component of what banking and the banking business is all about. The becoming your own banker is trying to harness that potential. So with that in mind, we think about all these car purchases. Who's going to get all that money? Well, if you add up all the car purchases you already talked about, and I'll just ask this question, who here has a bank account balance right now, today, with the amount of all the car purchases that you've made for you and your spouse? And I'm pretty sure the answer is going to be no. Some people will have bank accounts that might be equivalent to that, which would be great. But most people aren't going to have all that money set aside. Our goal is to figure out how we can contain some of that. Okay, that's our focus. A couple of interesting stats I found in this Forbes article. 92% of households in the United States have at least one registered vehicle. That means it's pretty difficult or unlikely to live in North America without a vehicle unless you're one of the major urban centers and you can get transit very easily. Now of that, 37% had two vehicles registered. Some of you may even have a three vehicle household. So if we see this, there's roughly ballpark somewhere between 45 and say 50% of the American population that has two vehicles or two or more vehicles in their driveway. That's a big amount of financial energy. Now let's get into our family scenario. Okay, They're a young family. They had their first kid at age 30. They're going to have three kids and all kids are about three years apart. So they basically spent their life in diapers for the better part of 12 years, give or take. Now our focus is going to be on the payments, all right, the flow, the cash flow of vehicle payments. We're not going to be looking at what's the interest rate on a car loan here and a car loan there. Like, we're not going to get into those details. We're going to focus instead on the cash flow because that's the financial energy that we're trying to recover. In our scenario, everyone needs cars. We've kind of demonstrated that based on the statistics that we looked at. So again, our goal is to recapture in that, that closed system. We want to go from having an open system where everything's leaking away and disappearing to a closed and contained system. Think of an aquarium. In our example, we're focusing on the purchasing of the children in this scenario, not on the purchases of the parents. Okay? So that's where our mind is going to be focused on the purchasing of all the children. In fact, the children's spouses, we're going to talk a little bit about that. The parents also need cars. During this experience, we're not going to be bringing in any of those numbers, but I'm going to be asking some questions about it as we go. So we get us thinking about that a little bit. All right, now we're going to assume that the parents in this scenario, they've already started the infinite banking concept in their life. They've read this book, they've gone through some of our education. So we're going to assume that they're building up a system of insurance policies in the format, working with a coach hand in hand. They're engaged on a regular basis and they're doing all the steps to make sure that they can start communicating this to the next generation. Now here's a picture of Nelson Nash. For anyone who doesn't know Nelson. My, my friend, my mentor, I miss him dearly, absolutely love this human being. It was an incredible human being, completely changed my whole life and thankfully I was blessed to get a chance to know him, to spend time with him. In fact, this picture, I was in the room when this picture was taken during the documentary film. If you haven't already seen it, I would encourage you to go watch the documentary film. This is Nelson Nash. You can find that @nelsonnashfilm.com. so if you haven't done so already, feel free to go watch that. It's only one hour. It's a well, well utilized hour of time in my opinion. Albert Einstein imagination is more important than knowledge. Nelson was a big fan of using our imagination and, and he focused on as one of the core elements of the infinite banking concept. He said it was an exercise in imagination, reason, logic and prophecy. Now we're talking about a family aquarium here. Okay. And again our goal is to capture that financial energy into this closed loop aquarium. You know, an aquarium is a whole ecosystem where fish and fish related aquatic sea life can live without ever having to leave that whole zone. That's what we're thinking about when it comes to our financial life and our financial energy. Now we have a new book that is, it's not officially launched, it'll be launched officially at the end of summer, but it is available to go and access. Now it's at don't spread wealth.com. so don't spread the wealth is really about the, the, the objective of being able to host family banking meetings and the importance of those and what that can mean for your kids at an early stage. It includes lessons for kids. Mindset is very important and that mindset matters. As we go into the discussion that we're going to have for this passive income strategy. We have now the, the very first family vehicle here. We had a, the, the parents were age 30, they had their first, their first kid. We shoot forward 16 years in time and now they're ready to get their driver's license and go ahead and start driving. Now at this point in time the parents are 46 now. They need a replacement vehicle anyway. And so rather than buying or helping their kid buy a car, their kid's going to get their car and dad's going to go get a new one because dad needs a new one anyway. Now when dad transitions old car to the kid and go gets new car, what's important to recognize here is that car that dad is transferring, that car is already paid for. So he's transferring the car over to the kid. And there's not like there's a loan outstanding on that vehicle. But we're going to talk about a financing arrangement because the car has value and that value is now understood at the family level because they've been having discussions about it. So the parents are still making their own vehicle payments, they're buying their own vehicles. They're doing it in a way that they've learned how to do over that previous 16 year period. They're already trying to recapture a lot of financial energy using their policy system. When we look at this just kind of at a high level. So we've got cars we can see here's our young family and as they're, they're growing and transitioning now, we've got these adult ish, adult adjacent youth who are looking to start driving in the world. And, and let's take a look at how we have set up this idea of car purchases. So at age 16 we're going to get that first vehicle that's the hand me down, you know, we're going to call it from mom and dad. They're going to go actually buy or purchase their first real vehicle around age 22. And roughly speaking, about every six years we're going to see another vehicle acquired. So here's kind of the ages that we're setting out where the, you know, each kid is going to be buying vehicles. And as you see when we get down to the later years, we see the vehicle styles kind of change a little bit and you'll notice that we're also spinning a little bit of a gap between the replacement time frame. Often as people get into their older years or more quote unquote golden years, they're not needing to replace vehicles as frequently, although that again not always the norm. But they might have a desire for new ones but they don't have maybe the need to replace them as often. So that's kind of the premise by what we're looking at here. So this is looking at, you know, the oldest child, but then we have to add in the middle child and then we have to add in the final child. So we have the same dynamic happening for each of them. The difference is that they're phased out by about three years in time because their kids are three years between ages. So they're doing the same car purchases. They're buying the same price points of cars. They're going to get different cars, but we're looking up at the same price point, and they're doing them roughly three years later than their next oldest sibling. Here is the vehicle price points or the purchase values that we're looking at. It's. It's actually not even purchase values. It's really more of the financing value. Because when you're thinking about the car payments, the car payments aren't based on the purchase price. They're based on the financing package. So for the purpose of our example, we're going to use these numbers because we're trying to keep this very high level. But in each one of these numbers, you're seeing, imagine that's the financing value of what's being financed. So you can see in the younger years, you know, we're basically raising the price about 10 grand every vehicle, give or take, until we get along the track. And then we're buying nicer things. Nicer things. And then when we got down to this age, we're just saying, okay, we're going to keep it about the same. All right. That's kind of the model that we're looking at for our example. And then that's going to happen for each of the three children. Here we're looking at the financing price. Here we're looking at the monthly payments. What is the child going to be making as a monthly payment on these vehicles? $200 a month on the $10,000 financing package. Well, over the period of time, that works out to ballpark about 12.8% as an interest rate. So you can see those monthly car payments that one child is making on a car, and then each child is going to make the same equivalent payment once they acquire a car for the same price point. That's essentially what's transpiring here. This is an example of a conversation I had in the last. I think it was maybe 45 days. I've had a lot of travel in the last two months, so I was going to say it was a month ago. It's probably actually about two months ago that I had this conversation. Young man in Alberta, lives in the Edmonton area. Just turned 35, and he works in Fort McMurray. He's got an oil field position. He does like I think pipe QC in that zone. And he just traded in a vehicle that he had, a truck, 250,000 kilometers. He owned that vehicle for six years. He was having some maintenance issues. He was really concerned about the vehicle shutting down on him when he was out on site and not being able to deal with it. So it was a 10 year old vehicle he went and made the trade in. And when he bought that vehicle, it was $35,000. When he acquired it six years ago, he traded it and he got a brand new Ford F150. After the trade in, value of 12,000 bucks, he still had to finance almost $84,000. So everyone just think about that for a second. What transpired? How did he trade in 12 grand on a $90,000 vehicle and still end up financing almost 84? What happened, what ended up happening was is that, you know, they, they got to get the warranties, the extras, the mud flaps, the this, the that, all these extra bells and whistles that they try to, to load up and potentially even like creditor insurance. So really the price tag wasn't 90,000. It ended up being about 93, 398 after it was all said and done. So that's why the financing package is that amount. Now the car payments here for this gentleman were $1,200 a month. Now he had asked, he said 1,200 was a payment that he could work with. They talked about that in the financing department and he said, I'd like to have it paid for in six years. So what happened in this scenario is they set up twelve hundred dollars payments for six years. However, if you do the third grade math, that doesn't get his vehicle paid for because the actual amount of payments he has to pay it for is longer than that. And so what's going to end up happening is he's going to have a buyout amount. So he had $1,200 payments actually over 84 months. But what they did is they gave him a six year term. So that means that there's a balance to pay out at the end of the term. He's going to have to refinance or pay out cash to pay out the remaining of the vehicle. That's essentially what transpired. So the calculation was actually over seven years. Twelve hundred a month for seven years is almost $101,000 of actual payments. That's the financial energy, that's the cash flow. The jelly in the sandwich is the 17, $402 of interest cost over that period of time. Okay. Again, our goal is trying to get that money flow back. So thinking about the money flow, just to reiterate, here's that energy that we've got, that water, that power. Now imagine for a moment what would happen if this young individual. And that sets up what our children are now doing in our, in our actual case study. They're now 16, they're buying cars, or 22, they're 28, they're going through these stages of life and their financing so parents can get this financial energy, we can retain that financial energy. And what I want people thinking about is what do the parents do when they're getting this energy? If they're at a stage of life where they're in their early mid-40s and they're still buying their own cars, and perhaps they've taken a policy loan from their insurance policy and they're using that to pay cash for a car and then they're making repayments to their own system. Well, what would happen if they were to take the kids financial energy and cash flow of car payments and then they accelerated the pay down or the replenishment of their system on their own vehicles? Let's just assume that this is the period of time. And let's just say we have a vehicle payment over six years. If we make the regular monthly payments and we go along, eventually it'll be paid off in six years. Whereas if we actually go and start accelerating that by making extra payments. So now imagine you take the kids payments because the kids are making car payments and we hammer that balance down much quicker and we get it paid off in, let's just say, two and a half years or three years. Well, this entire time frame, there's no more outstanding loan, whether it's to the insurance company or a third party on mom and dad's vehicle. And all the payments that mom and dad were making. So here's mom and dad, they were making a payment, they were committed, plus what the kids are making, that all can start building up and it actually begins accumulating like this until they need to go purchase the next vehicle. Mom and dad are making car payments on their own. They've got their own vehicles now. The kids are making car payments, but they're making it to the bank of mom and dad, to the family system. That energy could be used to either double up or accelerate the recapture scenario of mom and dad's own other resources, whatever it is that they need, and it can be piled up and accumulated, or it can be reducing Say a third party debt or reducing a policy loan that they have outstanding. So then once that's gone, they can now start accumulating again and they're building up for the next purchase. So that's part of what can take place here. And I want to like expand on that in a great deal, but I just want to give everyone context to how that financial energy can be utilized by the parents, but they get to be in the decision making process. Here's a picture of my wife and I at our wedding in Jasper, Alberta. We're now showing the kids getting married around age 30, just like the parents did. And if that's the scenario and we have a second generation now beginning to look at buying cars, we need to start factoring in the spouses. So here we see the oldest child gets married, spouse probably already has a car, but is going to need one soon. Like spouse needs a car. We have the next child, three years later, gets married, spouse needs a car and likewise. So we see this trajectory of marriages happening, families growing, car purchases continue, and now we're adding a whole nother body into the car purchasing scenario that wasn't there before. So we're going to almost explode the car purchasing potential and then the financial energy potential that exists for mom and dad as they go into the future. So to take that a little bit further, we have that cash flow that without having clear direction, if we didn't have something in place to contain some of this, what would happen in most families is that that financial energy is still going to flow, but it's going to flow to someone else's banking institution. It's going to land on the books of someone else's bank and it won't be this family. And that's what we're trying to fix and correct. Instead what we want to do is we want that cash flow to be directed with a proper warehouse. This is where Nelson Nash's concept of becoming your own banker comes into play. So again, if you haven't already done so, make sure you schedule a call with one of your coaches to, to look into understanding this. You know, check out our content, get a copy of the book to really learn how you can have that warehouse work for you. So we can reduce outgoing payments to third parties. We can start to reuse capital that the family is already working with and recycle it within the family aquarium. The family system, just like water circulates through like the aquarium's filters and then it, it's able to be reused again. Yeah, you're still Injecting some new water. But there's also a recycling kind of process that happens there as it's being cleaned and recycled. Same concept that we're looking at just around money. So now let's look at the parents in this situation. Well, at age 30, for the parents, they had their, you know, first little kid, that little. They. They were welcomed with this beautiful young child. So here we go, age 30. And now if we shoot forward a couple of years, here's 16 where their kid is getting their first car. That's going to be this kid over here. Boom, getting their first car. We shoot forward a little bit further in time. We now have the parents, they're in their early 60s and at this stage of the game, these kids are now getting married and increasing the size of their family. They're welcoming new members of the family as they're growing. Okay, now obviously there's some expenses there at the wedding. Perhaps that's another area of cash flow and financing that can start to find its way back into our system if we're thinking about it properly and we have the right mindset in place. Now from this period of time, they're going to want to start thinking about passive income or quote, unquote, retirement. Now, in our world, we don't really like the word retirement. Retirement, in my opinion, means the big sleep. It's to be put out of service. So we talk about passive income and, and being able to continually add value into the world with the things that you do and the gifts that you have. So, but this is what we're going to be start talking about in the parents timeline. Now I want to circle back a little bit to when we got that first hand me down vehicle. So the hand me down vehicle that we got, it was about $10,000. And that $10,000 vehicle or its value, it didn't have any debt on it. So it's not that the children were paying. They're making a payment, a financing payment, but mom and dad don't have a third party that they owe. So the kids payments are actually building up, building up, building up. And mom and dad are building that up into their system until they need to go pay for the next vehicle. When they pay for the next vehicle, the balance is going to come down. And then they build up with two car payments. Then they buy another vehicle and the balance goes down, and then they build up with, you know, three vehicle payments potentially, or two. And then now every once in a while, you're going to have a year based on when the kids are purchasing and when the spouses are purchasing, where you're going to have an off year, you might actually be buying two, maybe even as many as three vehicles in that one year because the need for a vehicle is going to ebb and flow. So you might have a, a bigger drop, but then you're going to have more payments and the vehicles are getting more expensive as we go throughout time and we're going to actually increase the amount of payments and we're going to increase the volume of money that's coming back into the family system. Thinking about what happens as people go through these different phases of life, the types of cars, if you think back about what kind of car you were driving when you were 18 years old, and then you compare it to the kind of car you have now, you know, if you think about the type of vehicles that you see people driving around in, once they've well established in their career, their kids maybe have finally exited the nest and maybe they're not spending as much money on their food bill and their food bill gets replaced with a car payment because they want to finally a nice vehicle. You know, these are the kind of things that we see happen pretty consistently for people. So just consider along that wheel of life how things do change over that time frame. So let's look at the parents and do a bit of a summary. So from age 46, that's when they find they have the hand me down vehicle to child one and they're starting to receive payments all the way to age 66. And then we're going to start looking at 67 where they're going to begin using a bit of passive income from this strategy. So between these two ages, they finance nine cars plus the three hand me down. So there's a total of 12 cars plus flowing into the kids world, nine of which were purchased over that time frame. The three hand me downs, of course, over that 20 year time frame. So we can kind of see, here's the three first vehicles, then we can see it had three vehicles that were purchased that were worth 20,000 when the kids were in their early 20s. We have six vehicles that are purchased that are worth about 30,000. That's because we have the kids plus spouses now adding into the mix. And that's all happening in that same 20 year time frame. And so, and again, it's over a variety of purchases. Maybe we haven't finished paying or receiving all the payments for those yet, but the purchase, the acquisition of a car has happened in that chunk of Time. So if we add all this up, the total payments and financial energy that have transitioned over all of these vehicles that, that have the potential to flow through the parent's life is $355,000 worth of financial energy. Now these people are paying cash for vehicles. The parent is becoming the car dealer. They're going and buying and negotiating the deal, acquiring the vehicle that the kid wants. And then they're saying, here's a contract that you're going to sign. And I have, I have a registered loan arrangement on this vehicle, and you now need to pay me a payment for the use of this vehicle. But we're going to contain those payments in such a way where when I go and I leave planet Earth, you're going to be able to get access back to all your car payments. That's the generational impact that we're going to create here. So I'm kind of jumping a bit ahead. But we're going to create an environment where all the financial energy for the car purchases are going to be able to be contained and then also available to the children who made the payments once mom and dad are gone. So we're going to create this multigenerational impact.

Yeah, I just wanted to add that if you are even paying cash for the car, how, how did you save up for the, for the car, how did you save up this. You probably from your income. You set aside $200, $300 every month. Right. To even to. To be able to pay cash for the vehicle. So is it a payment, Richard, or is it not a payment?

Yeah, I mean, it's a payment has to happen. So even if we pay cash for something, we're still making a financing decision. We finance everything that we buy. We're either gonna pay up a premium to access someone else's pile of money, or if we use our pile of money, which is our cash, and we drain it, we're giving up the potential earning into all the future tomorrows that we have of that money. So there's still a cost, and that cost is a financing decision. So even if we're paying cash, there's nothing wrong with paying cash. I don't want to suggest that there is, but, but there's something to be aware that we need to reckon with the opportunity cost of that cash because it now can't do something else for us. So we're still making a financing decision. And that's, by the way, that's very well discussed and covered in the book, becoming your own banker. So if you don't have a copy of that. Please make sure you get a copy that will help clarify that question substantially. Now we're shooting forward to these parents who are at age 67, give or take, roughly, and they're now in a position with the six cars that are being financed between their children and the spouses, where they're generating $4,200 a month in monthly repayments on cars. And these are based on $30,000 cars each of the six cars. And that works out to, you know, $50,000 a year of cash flow. Could the parents use half of that? If you're generating just shy of $51,000 in monthly repayments coming into your household from car financing, could you take half of that amount of payments and use it to go do something else? You could do more than half if you want. But for the purpose of our example, we're going to focus on just using half and we're going to take the other half and we're going to have that going and still plugging back into whether it's loan repayment in the. In the infinite banking system or whatever. So it's still going to be utilized. It's just going to be utilized differently. 50% of it, though, we're going to go and be able to buy groceries with. We can use that as a source of passive income. Passive because someone else is making the payment. So if we take half of that, we got about $2,100 a month of extra augmented cash flow that could be used as a retirement scenario. Now, as cars are purchased, the parents may need to dip into their infinite banking system every once in a while, because some car. Sometimes you're going to have years where you purchase two vehicles. The price of the vehicles are going up. Sometimes you're going to have. There's different periods of the year where you do it. You know, if we showed $150,000 in one year of vehicle purchase, because there was three vehicles purchased, let's just say they're not all being purchased on the same day. Okay? So recognize that throughout the course of a year, that's going to change, but the parent can decide how they use that cash flow. The purpose of our example, we're just going to highlight on the. The parents using 50% of what that cash flow coming in is. This is the trajectory of vehicle purchases that we're. We're seeing with the kids, okay? So we can see that the pricing of them is getting a little bit more each time they buy a new one. We get out to this Older age for the kids, mind you, and they're buying a little bit more expensive vehicles. But at this point in time when the oldest is 64, the parents are well into their 90s, right. So the fact that those parents are probably not even receiving those payments at this point. So we have to exercise our imagination a little bit here from that perspective. But let's summarize the first 20 years of the parents doing the parents age. They're getting that hand me down car. So this vehicle number one is a hand me down car. This is a hand me down car. This right here is a hand me down car plus a $20,000 car. Because the oldest child is buying their first vehicle actually from, from a dealership or a used car. So there's 30,000 of vehicle purchases, but it's actually two vehicles happening right here at this stage of the game. And we can see the cumulative, and we're only looking at if we just isolated the car payments. We can see as we acquiring new vehicles and multiple vehicles and the price point of the vehicles is going up, that the accumulation of monthly cash flow that's cycling back to mom and dad is increasing over time. Now let's go to age 67 and we're going to start breaking down the final section of the parents lives and taking a look at what happens here. We can see the annual car payments there, our monthly car payment and the parents say hey, we're going to take 50% of that and we're going to start buying groceries. We're going to use that as a supplement our retirement income that becomes a passive income stream for them. And so you can see they're still buying vehicles for these kids along the track here. These years where we have 90,000, it's not a $90,000 vehicle, it's two vehicles, 40,000 and a 50,000 bar vehicle being purchased, etc. Is kind of taking place. And what's interesting about this, if we look at the cumulative passive income over a 10 year period starting at 67 going to the end of 76, there's over $300,000 worth of accumulated passive income that they've been able to spend in that time frame, I think that that's pretty good. The other thing that's kind of nice is that we can see because of the lifestyle and the price of vehicles increasing and the number of vehicles, etc. The car payments are increasing. So their passive income is, is going up with it. They're, they're, because it's based on the purchasing requirement of their children. Essentially, and their children's spouses. So let's extend this a little bit more. We can see a couple of key things. So number one, we had 300,000 here. Now we're at almost 500,000 at age 81 in cumulative. So they've gained almost $200,000 of passive income over that period of time. And then if we go from age 81 again to basically down here at age 86 in about a five year period, they've gained another 200, $220,000 of passive income. So the utilization of income, I think is very, very interesting to see. And we look at the total cumulative vehicle payments the kids have made up to that point in time in their life. It's, it's almost $1.8 million worth of vehicle payments. That's a lot of energy. We haven't brought the grandkids in yet. But now if you want to use your imagination, you can start to think about, okay, there's a third generation that might exist now. They might be at driving age. What are, what are their kids doing with the grandkids? How is this beginning to materialize for them in some way? Now, if we move down and we're going to go all the way out to age 95 in our scenario here, we can see the annual car payments have gone up. We're at 105,000 of total annual payments, 50% of that $52,000 a year. And we can see the cumulative passive income that's been created over that entire time frame for this family scenario. A lot of moving parts that are happening here. Don't get me wrong, there's a lot going on, but this is really very simple. It's, we're going to use cars, we're going to use a lot of them. The kids are going to need them, the kids spouses are going to need them, the grandkids are probably going to need them. Someone is going to get the money. Who should it be at this stage of the game? We have These parents are 67. They've been in working age in Canada for a long time. They're going to start to be able to have some of these quote, unquote entitlements, cpp, you know, confiscation plan. So the confiscation plan that the government of Canada has created where they're going to compensate your working income over your years of your life to put it into a giant pool where hopefully you'll get some of it out. In fact, it's really well funded. You'll probably be fine, but nevertheless, you're going to start being able to draw an income from here. You get to choose when you start to take it. Some of those things, OAS is another thing. And depending on where you're at with all your income, whether you're going to have it clawed back or not, you know, that's to be determined. But let's just go through some potential estimates. So doing a couple very quick searches, even just from today, the average for Canadians right now and about in 2024 is about $835 a month as CPP that they earn. Now that will range based on how long you contributed, how much did you contribute, what time frame did you begin taking it? Did you take it at 60, at 63, at 65? All of those factors are going to going to adjust. And so the average for the average Canadian receiving cpv is around 835amonth. So it could be higher than that, could be a little bit lower. So I just picked the average. Now if we have two people who spent their life working in Canada, then let's just times that by two. And that gives us this, we have old age security. If they're able to get the maximum benefit amount, it's around 713amonth. It does adjust, I believe every three months with the CPI. Now if we had that for both parties, husband and wife, great. Times it by two. We can see how that works. That's giving us, Roughly speaking, about $3,000 a month in an income on this family where we're assuming the dual household. Both of them worked throughout their working life, they both contributed to cpp. You know, they both got some of these benefits. The reality is that's never the case. That perfect scenario doesn't really work. But you guys can kind of see how these things come together. What's interesting is that the car financing model almost doubles their pension income. And in some years it actually more than doubles their pension income. So that, and that's only using 50% of those vehicle payments. And I think that's a really important thing. So here's a method. Just through vehicle financing and the family dynamic, with good education and the right mindset, you could be able to create your own, let's call it pension by vehicles would be a way to look at it potentially. Now I want to circle back again. Let's go back to that young gentleman I talked about who bought that new Ford F150. And if we think about that, here's what I didn't tell you about his situation. He told me when I was speaking to him this again, this is two months ago, that this had to do with a dealership, a Ford dealership in Edmonton. And they told him very clearly that if he was able to pay cash, they would have let him take that vehicle and drive away with it for 85,000. So the sticker price was 90. He could have walked away with 85. He would have saved 5,000 right off the gate. But he didn't have the capital, he didn't have the money, he wasn't well capitalized, he couldn't make that exchange. And a lot of people are in that position now. The 5,000 in initial savings, but there's also the savings value of approximately seventeen grand of interest that he's now going to be paying because of the financing package. So there's really about $23,000 worth of savings on his $90,000 vehicle had he been able to do it this way. Now why do I mention that? Why is that important? Well, here's the reason. Here's what I want everyone thinking about. If we have built up a family system, mom and dad have gone through the initiative to begin building this, this warehouse of wealth. They're implementing the strategy of becoming your own banker, not the car financing strategy, the process of becoming your own banker. And now through the mechanism of doing that in education, they're creating a car financing strategy inside of their family scenario. Okay, but given that situation over that 20 year period that they were building up their resources using the infinite banking concept, what's the probability, low, medium or high that they could have been. When the kids needed to buy vehicles, they were actually able to basically go pay cash for those vehicles and negotiate with the car dealer or the private seller in a cash deal. Now, not always is there a cash deal to be made. Sometimes that is not the case. Some dealers I know, they actually want the financing. They're really a financing business that sells cars. But that is not the case across the board. In fact, for this young gentleman, it was the opposite. They wanted to get the car off the lot and get rid of that inventory and get the, the churn happening. That's what they were looking for. So what other advantages could have been created for this family that we haven't even talked about if they were in a position where they could do that every time? And if we think about the volume of vehicles that they're buying over this two generation lifespan, do you think you'd get a little bit better at negotiating car deals? More importantly, if you had a car Dealer that you could work with or a couple. And you could say, hey, about every 24 months I'm going to be coming in and buying a vehicle in the 30 to $50,000 range. I want to make an arrangement where I can work with one person and we can sort something out where we can get deals done. Do you want to do that with me or not? There's some things that you can start to do here. This is the, what we would refer to as the unseen. The things that happen in the real world that you can't necessarily put your finger on. You need to think them through, you need to experience them. Our job as coaches is to help extrapolate and give you some viewpoint, some guidance, ask the right questions to help you be able to see some of that unseen for yourself so that you can catch it and start implementing it in your life. In this situation and going up to about age 90, the parents did 41 cars over that time frame. That included the three hand me downs. If they went all the way to age 100, it would be 47 cars. That's 27 for their kids and 20 for the spouses. That is a lot of cars. So we're talking about 25 cars for a household with everyone that's on this car. That wasn't including all of our children.

Yep.

So here in, in our scenario, we're actually talking about three households because we didn't even include the parents at all. In this scenario, there's over $2 million of car financing. Maybe there was some trade in values. We're not factoring that in. We're talking about the financing package amount and that's all the way to the age 95 of the parents. The cumulative payments up to age 95, for our example that was received was almost 2.7 million. And so this is where we talk about the jelly in the sandwich. That extra value, that extra interest over this entire time frame. We're talking about from, you know, 46 to 95 range. It's a long time frame of purchasing and a high volume amount of money. Someone else, someone's bank was going to earn that money, someone was going to get it, or someone was paying cash and they were going to give up the potential of that money. They were either going to sacrifice having it or we were going to pay it to a third party. That's generally what's going to take place.

What is owed to the insurance company for the loans.

What happens for a lot of people is that when they set up a system again, they're working with a coach. Everyone's objectives are different in how they build and design things. What takes place is for a lot of people, they will go and take their insurance contracts if they have them. And they might eventually turn them into a collateralization model where they're borrowing against them to some degree and depending on your jurisdiction, maybe borrowing from it versus borrowing against it. You know, we want to get in the weeds there, but. And they're using that as a source of passive income in this scenario. What I'm talking about is instead of doing a whole bunch of that, which you could also do or you could do in combination, we're focusing on using the financial energy of the vehicles to produce and create that cash flow versus borrowing against and accumulating a giant loan against insurance contracts separately and then having this other financial energy disappear to third parties. So we're really looking at a combination of those things. Roughly speaking, by the time that this couple reaches about 95 or so, they're going to be looking at somewhere between 400,000 and 800,000, depending on where rates are, rates change, rates shift. So all that could have an impact, but they're going to have an outstanding balance of, of loans on the policies that they have or in some other mechanism. Now when they pass away those loans, and most likely they're not passing away together, one's going to go before the other. That's typically how it works. I know for me, based on statistics, I'm going to go before my wife. Now the reason for that is probably because I do a lot of dumb things and that tends to put me in the danger zone more so than my wife. That means there's going to be an impact of a tax free event which would eliminate a lot of those loans at that point. And then there's a run rate on value for the next partner before they pass away. And then as if they're building their system well and they're again, they're creating that, that environment that they want to operate in. There's a secondary event in which case the kids who've passed all this money through the system are now being able to recoup all that, that, that capital because now they're also dealing with the estate and all the other values. They got a house to sell, maybe some rental real estate, maybe a corporation's assets. There's all these other things that are going to happen plus the tax free benefit that remains from the insurance contracts. The reality is it's too dynamic based on what could transpire over that time. Frame for a human being. So give you a range and more. So I want to focus on the concept of what would transpire because if we understand that, all the rest of it we can figure out along the way. If you borrow from the cash value in your policy to pay cash for your car, there's an interest you have to pay to your policy as well. So what's the difference? You're right, 100% there's going to be interest that you pay to the policy. That is correct. However, you have to start to think about the volume of payments that are taking place. If you go back to the beginning of our example, we didn't have to borrow anything to go and get the first three vehicles because they were hand me downs. So over about 8, 9 year period of time, it was pure payments building up for mom and dad both. And then they could use those payments to go buy the next car they actually had to pay cash for. They already had the cash from all the accumulated payments.

Yep.

Right. And so that model continues to happen through the bulk of the first 20 years. There's only one or two points in time where they're maybe buying two or three vehicles in one year that they temporarily have to take a policy loan for that purpose for maybe one vehicle. But the amount of cash flow that's happening in monthly payments obliterates it within one year. And then they're building back up again. That's what I want people to recognize is that, you know, no one's buying all the cars on one day. That flow of energy, you're going to rapidly replenish any policy loans you take during that time frame in a very short area. Because during mom and dad's working years, they don't need that cash flow from car payments to do anything else. They have cash flow, they're, they're running their life, they're supporting their initiatives in other ways. So they're able to amplify the utilization of that car payments through those 20 years to do other things. I want everyone to stretch your imagination and think about the different ways money's flowing through your life. And if you could all of a sudden have 1000, 2000, $3000 a month of car payments that you didn't have before, what could you do with it differently? How quickly would it accumulate or how quickly would it eliminate a third party debt, even if it was a policy loan? Yeah, you buy a car for $30,000, but you get $36,000 worth of car payments in one year and you created a car payment schedule over six years. Well the car's already replenished. Now you're building six years worth of extra payments. It's hard to picture and see that until you really talk it through but that's what we have to imagine in our mind because that's really what's taking place.

Awesome. On a separate note the interest they are paying back because they're paying back the policy loans who's getting that interest? Is it leaving them forever or is it staying in the system? All this interest is coming back to the company that you co own or they co own Right. So that's staying in a system and that that interest is adding to the profitability of the insurance company and increasing their net worth because from that pool of money insurance companies paying dividend which is increasing the overall energy of the policy and then it is just getting better and better versus paying interest to dealership where you will wave bye bye to this interest and never see it again.