Inflation Is Coming To Canada, Do This Now!

Through the bank of Canada and decides to print more money and put that into our economy. Well, you have a higher volume of dollars after the same amount of goods and services, and that just puts upward pressure on the cost of doing things. And so what really happens is the buying power that you have gets eroded.

Whether you like it or not, the evidence is that inflation is increasing during this period of time. Want to stay ahead of the curve? You need to be doing something to inflation proof your finances. So today I'm going to talk about a way that you can do that. As I was reading recently, I came across the information that in July of this year, inflation went up to 3.7% and then in August, 4.1. And the analysts are saying that it could average 2.2 for the year. And I know that typically the bank of Canada has a goal to keep inflation somewhere around 2% and they can't control everything. So sometimes it gets above that and there's other times where it's below that. So that's why I wanted to have a little conversation about inflation today. Hi, my name's Dan Allen and I'm with Ascended Financial and I'm an infinite banking practitioner with the Nelson Nash Institute. I thought I'd start with just a definition of inflation, so I went to the Webster's Dictionary says a continuing rise in the general price level, usually attributed to an increase in the volume of money and credit relative to the available goods and services. And what's a good example of how that plays out for us? Well, one that I thought of is the cost of housing or homes. But if you think about what's going on across Canada and how the prices of homes just keeps on going up and in some markets really going up, high rate of increase. One of the factors that's contributing to that is that credit is so cheap right now, the interest rates are really low, so people are able to get access to more credit so they can actually offer a higher price for a home. So that is putting some of the pressure on the cost of housing in our country. And that's how it works. The other thing you think about is when the government, through the bank of Canada, decides to print more money and put that into our economy, well, you have a higher volume of dollars after the same amount of goods and services, and that just puts upward pressure on the cost of doing things. And so what really happens is the buying power, the that you have gets eroded. So if you think about it and say that your income is staying nice and level, but the cost of Goods and services was going up. Well, you're actually losing ground. So I thought today I'd just demonstrate a couple things. What I'm going to start with is with inflation. And I look back over the last 40 years. So over the last 40 years in Canada, inflation has averaged about 2.68%. So what does that mean? So if you have $100 and when you consider how they calculate the rate of inflation, they look at a basket of goods and they take that basket of goods and they keep it consistent so they can look at what it costs at the start of the period and then they go to the end of that period and they see what it costs then and that gives them their calculation. So we're going to look at a one year example where inflation was based on the average of the last 40 years, 2.68%. So if you had $100 at the start of the year, what would it cost you at the end of the year for that same basket of goods? Well, that's a pretty simple calculation. It's $102.68. So in order to buy the same basket of goods, you now need an extra $2.68 to do that. So that doesn't look that bad, eh? Let's just look over a period of time. Let's just say we went and use that Same average over 20 years, what would that look like? Well, it would go from $100 today to $170 20 years from now. So 20 years from now, if all things being equal and the average stayed the same as it did in the last 20 years, it would now cost you $170 to purchase that same basket of goods. And that's how inflation impacts us. So pretty real. We hear about it all the time. People are always talking about how do you have your money somewhere where at least you stay ahead of inflation and hopefully better. So it's a good, interesting piece to talk about. So what are the options out there? And the one that I wanted to speak to you today is very much related to what I do each and every day. So I teach and educate people on the process called becoming your own banker, the infinite banking concept. And through that we use a very specific product. And that product is dividend paying whole life insurance. Now if you haven't heard about the living benefits of that product, I just encourage you to go and look at other videos on our channel here. If you haven't subscribed, you've got an opportunity because there's lots of great information on our channel about how you can use the living benefits of that product to help you through life financially. Why would we use that type of a product and what would it do for you? One of the things I'm always interested in is certainty. And how do you find certainty in today's market? Well, it's not easy. You can go out and you can put your money into different investments and you can hope over the next 20 years that that rate of return that you can get from that investment will be enough to shield you from inflation. So I like to use a something that gives me a high level of certainty. And so I've known because I've gone and looked. I personally have dividend pay and whole life insurance policies that I'm using not just to shield me from inflation, but to help me with all things financial in my life through this whole concept that I teach. But it really does a great job of inflation proofing my finances. When we talk about anything, I always like to say, you know, how confident are you that it's going to achieve what you set out to do? So I look back at some of my policies just for the sake of interest. I wanted to see how good were they at predicting what my cash values were going to be like in the product that I had. The first one that I started was in 2014. So I got my statement in 2015 and I looked at the numbers on the in force illustration and so I could see what they were predicting out the next number of years all the way up to age 100. Now I've got this year's in force illustration and statement so I can look at six years later. And I looked at that and I said, well, how are they doing against their prediction? And what I found is they had predicted that at this period of time with that particular policy that I had, I would have $120,700 of cash value. So I went and looked. When I got my statement this year, I went and looked and I said, so what is the cash value that you've got? And it was $122,400. Now that's a 1.4 over 1.4% increase over what they predicted. That's what I've noticed. They do a great job. These life companies that we use have been in business for hundreds of years and they're very good at what they do. And that's why I can comfortably talk about this as a product that will help you inflation proof, whatever you're doing. So here's what I found. This is an example of what you could do with a dividend paying whole life insurance policy to protect yourself against inflation. So what I have here is, it's an example of someone who has been putting capital into their policy for 10 years and they were putting in $12,000 a year. And after 10 years I looked at it, their cash value was predicted to be at $140,000. So based on that, I put that number in and I applied the average inflation rate over the next 20 years. So as you can see over that 20 years, the cost to purchase the same amount you could have purchased. Like if we started with this 140amount right here and you just look at what would it cost each year given that average. And I know and you know that it's not always going to average 2.68 for that year, but we're talking about over the whole period of time I just applied that average and what would it look like at the end? So at the end of that period of time, it clearly shows that you would need 237/,000 to buy the same basket of goods that you could have bought for $140,000 back at the start. Now, with a dividend paying whole life insurance policy that was illustrated for this purpose and looked at what they predicted based on today's dividend scale. You can see those numbers off on this column right here. So this column here speaks to what they're predicting the cash value would be in that policy if you did nothing else. Now one thing I need you to understand, there's no additional premiums going into this policy at this point. We stopped putting premiums in just to take that noise away and show you how you can inflation proof your warehouse of wealth. So if this was your warehouse and you had your money put in here, this is what it would do to help protect you against inflation. Because the cash value has to go up every day by contract. And these life companies, like I said, are very good at doing that. So it will continue to grow every day. And as we look at this example, we took a 20 year kind of look based on the illustration. And no more premiums going in just to take that noise out. Because that's never the way I would coach you to use your policy. But I just wanted to do this to help you understand how effective this tool would be at helping you inflation proof your wealth. So as you can see, after 20 years the cash value would build somewhere close to the $325,000 mark, which comfortably puts you above the inflation rate and it puts you in a good stance for you and your family. Now, the other thing that I wanted to speak to you about is that I wouldn't personally just put my money in there and leave it sit like that and not use it. The nice thing about the infinite banking concept is that you utilize that cash value all the way through those years. Yes, you need to keep paying it back just like you would if you were using money from someone else's bank. Because really this becomes your own banking system. So you borrow it for whatever you need, whether that's an investment. Hey, and if you're into investing, great. The nice thing about that platform you use, it's an and asset. You put your money in there and you can leverage it through a policy loan to invest if that's what you want to do. You can use it for real estate, you can use it any kind of investment that you want to take part if you believe that's a good investment to have your money in. What you think of this particular tool as an inflation proof way or method to help you financially? Because again, I want to remind you, it doesn't take away your options. You got all those options. You can be utilizing that money all the time through that period of years that we looked at and you can be investing it, you can be using it elsewhere and doing all those things that you think you have to do from a financial perspective to help you get ahead in life. And yet you have this foundation, this platform is going to help you from reducing the risk that inflation will eat into your buying power.