Infinite Banking Made Simple In Canada

Your wealth, your money, your capital, it actually must reside somewhere. It has to have a home. And generally speaking, right now, if you ask somebody where do they store their money, they're going to say, probably a bank, right? Someone else's bank.

Today we are going to be talking about the infinite banking concept and how simple it really is. You know, we hear a lot out there, a lot of buzzwords, a lot of things like adjusted cost basis, or you hear things like taxes or rates of return and all these fancy terms that come in. And the mind wants to complicate things. But this process of becoming your own banker actually is ridiculously simple. So my colleague and I, Liz, we're going to focus on four key points that make infinite banking really simple. My name is Vernon McCarty. I'm an infinite banking practitioner authorized through the Nelson Nash Institute and a member of the Ascendant Financial team. And this is my colleague, Liz.

Hi, everyone. So let's start with the first point, which is you are already doing most of what you need to do to do this process anyway. You are already using money, you're flowing it through a place that, where you're not getting the benefits. So that's one thing you do need to change. But you're already understanding how the flow of money works. And certainly, I'm sure you understand exactly how banks use your money when your income gets paid in there. So with infinite banking, we're changing where you're storing your capital so that you're starting to get more of the benefit rather than somebody else getting that benefit. So we're not changing many of the things that you're doing. We're just essentially changing where you store that capital so that you're getting the ongoing benefit not only for you, but for generations after you as well.

If we break that down, exactly what you said, we're already doing most of the things that we need to do to become our own banker. So you said, well, we're depositing money, and generally speaking, we're depositing money in someone else's bank. So you and I know who's that money being put to work for. Not us, someone else. So we're just going to, to your point, shift where we deposit our capital, and then we're accessing money. We're accessing money from someone else's bank. It's either going to be cash or we're borrowing it. So if we spend our cash, well, it's gone forever. And if we borrow it now, we're on the hook to make a payment back to Somebody else. Liz, what if we could do all that ourself? What if we could just access that money from a system that we owned and that we controlled and we could set all the terms? How much better would that be for our family? And that's all we're talking about here. We're talking about the process of banking.

Yeah, awesome, Vern. And that leads into our second point, which is creating a better place to store capital. So the product that we use for that is a dividend paying, participating whole life insurance policy contract. Because of how the contract is designed, there is a possibility of us being able to take policy loans and to be able to have our money stay inside the contract and continue to compound and grow every single day. We're not giving up the ability to use the money, but we're storing capital in a way and in a place that is going to give us those ongoing benefits that Vern just spoke about.

Like Nelson would say in his book Becoming youg Own Banker, Unlocking the Infinite Banking Concept. And by the way, if you haven't ordered a copy of this book, we'll make sure that there's a link in the description of this video below. Definitely a good add to your library. But Nelson will expand on, you know, the process of becoming your own banker. But in Nelson's book, he tells us, he says, look, your wealth, your money, your capital, it actually must reside somewhere. It has to have a home. And generally speaking, right now, if you ask somebody where do they store their money, they're going to say, probably a bank, right? Someone else's bank. And what Liz is saying is that we can use something called a permanent participating dividend paying whole life policy. Ideally with what's referred to as a mutual company. There's nothing wrong with what's referred to as a stock company, nothing wrong with a mutual company. They're both great. In fact, I own policies with both stock and mutual companies. The real difference there is that obviously with stock companies, they have stockholders so that they have a responsibility to make sure that those shareholders get paid. And generally speaking, their policyholders are going to be sort of the next in line, the next in line in terms of being compensated from the profitability of that, what's called the participating pool. Whereas a mutually owned insurance company is literally owned by the participating policyholders. It's mutually owned by the insurance policyholders. We can't buy stock in those types of companies. The only way to become an owner is to own one of these policies.

I think a lot of people then understand that concept in terms of a co op. So it's a similar kind of arrangement to a cooperative.

But to your point, Liz, now I can carve out some of my capital, either my savings or my cash flow, and I can store it with the insurance company inside one of these policy systems. And now there's certain contractual guarantees that reside within the contract, one of which says that my cash value that's rising on a daily basis, it has to rise such that it meets matches my total death benefit by the time I reach age 100. But we also have the privilege, the ability to borrow capital from our own policy System up to 90%. Again, generally speaking, this is up to 90% of the total cash value in the policy system. So I can now borrow that money out. But I'm the one who owns the contract and we want to practice the process of banking. So imagine for a moment if you went and borrowed money from someone else, you'd have to agree to their terms. And guess what? I know you're a really good, responsible person. You're paying your bills, right? Well, we need to take that same programming into our own system. We have to follow the same rules. If I borrow money from my own system, just because I'm in charge doesn't mean I'm not going to pay back my loans. I'm going to pay back my loans as if I owed that money to somebody else.

Another really valuable part of storing your capital in a better place, Vern, is compounding. Because when you take a policy loan, as Bern described, you're not actually using your money, you're using the insurance company's money money for that policy loan. So that means that your money is staying inside the policy and is growing on a daily basis. There's a video actually that, that I did on compound interest. If you want to understand why that's important, please click on that. You'll see that appearing above and then you can understand that what a difference it makes is when you take money away, as you would know, like when you take money out that you've saved out of your bank account, that bank account goes back to zero or very little, and you have to start again. But if your money continues to compound, but you're not losing access to that money throughout that time so that you can borrow the insurance company's money for your objectives, then you're just going to be able to create two assets at the same time.

Just imagine for a moment, okay, imagine you could, I don't know, access money out of your policy system. And in fact, I've just done this. Imagine you could access money from your own system and let's say pay off something like, I don't know, a car loan. So now I'm already paying $650 a month to a car company. Well, I paid off the loan early. Well imagine now I could redirect that $650, I could drop it down to 500 if I want. I can raise it up to 700 if I want. I'm going to put that back into my own policy system. Imagine now I can go back and I can re access not only 100% of what I pay back, but I can access some of that 90% of that daily cash growth as well. So I can always go back and get more out of my policy system than what I've actually paid back into it. That's what Liz is talking about, about being able to enjoy uninterrupted growth on it's really creates a peaceful, stress free financial life, doesn't it Liz?

Absolutely. And I think, you know, often the really good point is that we're often concerned to move money places because we're worried that we'll give up the ability to use it. And that leads to our fourth point very nicely, which is liquidity. Absolutely. It's really important to have access to liquidity of our money so we can make the most of opportunities. So understanding that by being an honest banker and paying our money back into our system, we're not giving up the liquidity to be able to borrow that money back out again. So you know, we have that ongoing flow of being able to take policy loans, pay them back, borrow money again, take another policy loan and continue so that when opportunities come our way, we can make the most of them and you know, grow our asset base.

And the beauty of what you're talking about here is we're not talking about this or that, are we? We're not talking about, hey, stop putting your money into what we, what I fondly refer to as the financial prison. I'm not saying there's anything wrong with this, but let's think about this for a moment. If I put my money, let's say into the traditional financial planning, I put my money into, let's say a registered retirement savings plan. Look, I get there's some benefits with that. Maybe I get a tax break, maybe there's my own reasons why I'm putting that money into that RSP for example. But if me and my family need to access money, well, I may be subject to a sales fee, I am definitely going to have to pay withholding tax, right? I'm going to have to pay tax on every dollar I pull out of there. Now, I'm not saying not to do this, Liz. I'm just saying if I need access to that money, if I do get it. Excuse me, after potential fees, after taxes, after all these sorts of things, now I've pulled the money out. Well, first of all, we know in an rsp, if I take money out, I don't get that room back, I can't put it back in. And if I have an account balance here, and let's assume the investment's growing as soon as I pull the money out, well, now it might still be growing, but now it's actually growing on a smaller balance. So all I'm really doing is kind of hurting that plan. But guess what? By becoming your own banker, we're not saying, hey, don't put your money into an RSP or into real estate or into whatever other thing that's working for you financially today. All we're doing is controlling the banking function. And by first depositing money into my own policy system, I can still access values if I want and then deploy it to other asset classes, kind of like just like what Liz said. So all we're doing is giving you more options. And it's an and process, not an either or.

So I'd love you to rewatch this video, go through the four simple steps of how simple infinite banking really is, and watch our other videos, too, where you can learn more about how this process can meet your objectives.