Investors Invest LESS & Earn MORE In Canada!

Because all of his money kept growing in the policy tax free. So he just didn't make more money as compared to option one and option two, but he also paid less taxes. How's that for a win?

Let's talk about how we can invest less and earn more using the process of becoming your own banker. And not just more, but much more. So meet Corey. Now, Corey, he's a full time investor. So Corey, he's age 38. He's 38 years young. And interestingly, when Corey and I met, we were of the same age, so we were both 38. Corey is a full time investor. He gets really excited on rate of returns over 20%. So he invests in real estate, he gets cash and cash return above 20%, but in stocks and things like that, he's easily, according to him, he's like, yeah, I can achieve 20% on the stocks that I'm investing in now. He came through the education process just like yourselves, on the process of becoming a banker. And he got really excited and he created his time to meet with me, but he shared his concern. He's like, sir Blow. I've read Nelson's book, I've gone through your coaching Sessions on the YouTube, your podcast. I've consumed all the information. I love the long term benefits through the process of becoming a banker. I'm just struggling with the short term benefits because when I'm looking at illustrations, when looking at policy design, I see in the first year that we're not getting a dollar for dollar out. And that to him was a problem. It struck to him as a problem. Here's what my response was to Corey. The problem is not the problem. The problem is how we think about the problem. So although Corey spent a lot of time educating himself on the process, it tilted and struck with him because it's not about a policy. Policy is just a tool to get the job done. It's all about how we can flow the money through the policy to achieve the goal that we want to achieve. And, and that is what he didn't see. So the problem is not about the problem. The problem is how we think about the problems. It's not about the policy, it's about the process. So we're going to show you how we can make the objective better for Corey by flowing the money to the policy, even in the first year, is going to beat the pants of any investment that he's doing today. Let's improve his outcome. And we're going to improve his outcome by not focusing on what you're going to buy. So we're going to improve your outcome if you're an investor. So we're going to improve your outcome, but we're not going to focus on what you're going to buy. Instead we're going to focus on how are you going about buying it. That's the key thing. The process of what process are you using today to buying it? Everything that we do in life financially is a measure against how everybody else is doing. So if you are making progress financially while it's compared to who, and if you're not making progress financially, it's always as compared to who, Right? It's always comparable. Now let's see how we can.

Enhance these investment transactions for Corey just by changing one thing for him, which is the process. So again, his objective is to invest. We're not going to change his objective. We're just going to change the process of accomplishing his objective. So let's look at a case study where he's got $20,000 and he wants to invest $20,000 every year into some investment and he wants to earn 20%. So I asked him, I said, how are you going about accomplishing the objective of investing today? What resources are you using today? So let's see how you're doing it so that we understand what the outcome is. And then we're going to compare it with how an infinite banker is going to do it so that you can see the comparison. Once you see the comparison, then it'll click for you. Right? All right, so method one. So the first method that he's using is he uses his own cash. So he starts saving money, the $20,000 that he needs to invest. So saving first. He has to have 20k to invest first. But where is he saving his cash now? He's saving his cash in someone else's bank. The other method that he's using is opm, other people's money. So he's got a mortgage that he's paying down and he understands that he cannot take the house to heaven with him. So he registered a HELOC on the property. And he said, sir Palo, I can use my cash and I can also borrow money from a HELOC. The 20k in this case as an example, to invest, if I use my cash cerblo, I don't pay interest. That's what he said. But if I borrow money from the HELOC, I have to pay the bank 3%. And I had to go back and correct himself because, Corey, when you use your cash. Yeah, you're not paying interest, but you're losing interest. And you're not losing interest just over your lifetime, but you're losing interest over the next generations to come. The cost of lost opportunity is permanent. So we have to recognize that. So whether we lose interest or we pay interest, that is how we finance things. And this is how Corey has been financing his investments. So method one and basic arithmetic, math, Right. So we're just doing some basic math right now. Nothing is complicated. So he took his own $20,000 and he invested into an investment that yields him 20% over the year. So that 20k at the end of the year earned him $4,000 in gain as a gain in his investment. So 20,000 at 20% is $4,000,000. Using his own cash, very simple month using the second method where he borrowed $20,000 against the HELOC, which is bank's money, OPM, other people's money to invest at 20%. So he still makes $4,000, but the bank interest on that $20,000 loan is 3% for the year. So although the investment made in 4,000, but he has to pay the bank 600 on the interest. So his net gain is $3,400. Basic math. Now let's make things better for him. So if you, if you saw the first option and second option, let's just agree that Corey did pretty good damn job. Now let's make it even better for him by adding one thing to his process to his transaction, which is the process of becoming your own banker. So let's change one thing, which is the process. So, so now Corey took his 20k. So he took the cash, the 20k, and he capitalizes his banking system as his premium. So he put, he took all this 20k and he paid the policy premium for the whole year. Now in exchange for his premium, obviously it's a life insurance policy. So insurance companies say, Corey, this is our first contractual guarantee. We're going to give you death benefit. So God forbid something was to happen to you over the year, we'll pay your family $400,000 in tax free money. So that's one contractual guarantee. Now, immediately when Corey capitalized 20,000 per year as premium, immediately in his policy, he had cash values, which is the money that the insurance company is growing for him and it's growing every single day so that it matches the death benefit. By age 100, which is the second contractual guarantee, his immediate cash values were $10,333. And in addition to that, this cash value was growing every day by $8 for that year based on insurance companies contractual guarantee. So the cash values must grow every day to match the death benefit by age 100. So every day in the first year, the daily growth in his cash value was $8 per day. So his cash flow is at $10,333. And as you saw in my previous case study, what Corey can borrow as a loan from the insurance company is 90% of his cash value. So you can see right here, he took a loan from insurance company for $9,300 and now he's taking insurance company's money and is making the investment that's yielding him 20%. His money is in the policy. Now he's using insurance company's money. So when he's using insurance company's money, the interest rate for the year is 6.2%. That is what the insurance companies charge because they make a determination of profitability, because interest is profit for the business. They work backwards from the profitability. And they say, yeah, for this year we're going to charge policy owners 6.2% simple interest because policy owners are sharing in a profit. If we can deploy this money somewhere else for policy owners and make a profit, why should we give this money to policy owners for free? If you give them money for free, it's not economic value addition, we'll be stealing from our business. So we're going to charge 6.2% annual interest. But what we are not going to do is interrupt his daily growth. His policy keeps growing every day by $8 because the loan, there's a collateral on his cash value for the loan and the lien on his death benefit. His all his money is growing every single day as if nothing happened. All right, so summarize. He took insurance company's money and he bought the investment. So he took $9,300 invested at 20%, 20% of 93. Basic math is 1860. But he has to pay 6.2% interest on $9,300 because that is insurance company's money. So the interest that he paid to the insurance company is 576. So his net gain in the investment is 1284, which is basically 1860, minus 576. And by the way, it's his business got this interest payment which made his business much more stronger, which means more dividends for everybody participating in the policy together. So his net gain in the investment is 1284 by using the policy loan. Now wait, Sroblo, you said IBC does things better. But if you look at option one and two in the option one when he took his cash and he invested the money, he earned 4,000. In option two when he borrowed money from HELOC, he earned 3,400 after paying the interest to the bank. Whereas using policy he took 20k and started a policy as premium, the investment only made him 1284. How is he financially ahead? Well here is how he's financially ahead because the investment made him 1284. But all his cash and the policies still kept growing Every single day. $8 per day. He never interrupted the growth of his money. That is the financial tailwind he created by becoming his own banker. And that tailwind is still pushing him ahead financially. So he made 1284 in the investment plus $8 per day is what he made in the policy which comes to 2920 as one year cash value growth. So he made 1284 plus 2920. So the overall access to money that he has now is 4,204 out of which 1284 is coming from the investment and 2,920 is coming from the policy. So you can see that he wins when he flows the money through the policy. So it's not about what you're going to buy, it's all about how are you going to buy it. So the policy flowing them into the policy. He made more money. But here's the other awesome stuff about it. When he took his cash to buy the investment, he's going to pay tax on all $4,000. If that investment was non registered, if it was registered like an rsp, those taxes are just different. When he took the key lock money to buy the investment, he's going to pay tax on $3,400. But when he took the policy loan to make the investment, he's only going to pay tax in 1284 because all of his money kept growing in the policy tax free. So he just didn't make more money as compared to option one and option two. But he also paid less taxes. How's that for a win? Here's the teaching point and this is what resonated with me after I've read Nelson's books numerous times. You can't get a better rate of return investing into anything without first controlling the financing function as it relates to the transaction. Create your financial tailwind. Never interrupt the growth of your money. Always be in a position of borrowing against your money with control and be in a position of paying back the loan with control. Create your financial tailwind by implementing becoming your own banker in your life, personally or in your corporation. For every transaction that you have the need for use of money.