Jayson Lowe and Richard Canfield explain how whole life insurance policies let you act as your own bank, building guaranteed cash value instead of betting on market swings. They show how to borrow against your policy for cars or college, and argue this beats relying on volatile stocks or bank savings.
Chapters
And I used the expression. I said, well, volatility is not in our vocabulary because we don't have to worry about, you know, what's going on in the NASDAQ or what's going on with the S&P 500, or what's going on with Bitcoin or Ethereum or all of these cryptocurrencies.
In no instance in there is there any investment required in the market.
It's all about controlling the banking function.
That's right.
And using your imagination, which you don't even need to use your imagination because Nelson's already done it for you.
Let's address what people are thinking about, maybe feeling anxious about, you know, the markets, the cryptocurrencies, you know, the market manipulation that's going on.
And Manipulation, Jay, what do you. Whatever do you mean? And I used the expression.
I said, well, volatility is not in our vocabulary because we. We don't have to worry about, you know, what's going on in the NASDAQ or what's going on with the S&P 500, or what's going on with Bitcoin or Ethereum or all of these cryptocurrencies.
Ardona and.
Whatever, all the thousands of ones that are out there.
And the reason is what we've been talking about the past 14 years. And we shout it from the rooftops. And people when they experience it themselves, because they're policy owners, and maybe they still have money that's exposed to stock market manipulation or some risk element that creates volatility, and we don't have to concern ourselves with that. And if you're watching, you're a policy owner. You don't have to concern yourself with that. Your cash values keep going up each day. They can't go backward. Dividends that are declared are contractually guaranteed to be paid. They cannot be repossessed. They cannot lose value, because what you've.
Been paid, you've already got it, so they can't take it away.
Yeah, yeah. Like, I was at an event in Daytona, as you know, Rich, with some of our US Colleagues who run an organization named the Money Multiplier. And they were hosting this event for their clients and their prospective clients. And I was invited to speak there. And while I was there, there was a lot of conversation around the anatomy of a policy. And the comment was made a few times, well, you know, dividends are not guaranteed. And it's like, well, hang on. Let's make sure that we get this correct. The only dividend.
Let's quantify the only dividend that isn't.
Guaranteed is the one that hasn't been declared yet. So if you're a policyholder and you've gone through, you know, each year at the anniversary where you've seen that a dividend has been paid, once it's declared, the moment it's declared, it's contractually guaranteed to be paid. And, and so the point is, it's not a conversation about dividends, it's a conversation about certainty. It's a conversation about recognizing that what you have is a unilateral binding contract, not an investment. So there's big difference between those two. Money that you invest, you're subjecting that money to volatility, to the risk of loss, to the opportunity for gain. But you have to recognize it's not an elevator that goes straight up, it's a roller coaster. And there are so many people, I'll say this because it's just a point that came to my mind. There are so many people out there who are, for the past number of years, they've had incredible success with stock market, you know, trading, whether it's day trading or options or all the above. They've never experienced, they've never experienced a crash. They haven't been through 2008, 2009, they haven't been through the early 1980s. They haven't been through the tech bubble bursting in 2000.
The market is not engineered for the average retail investor to achieve success. It's not what it's engineered for. It's engineered so that Wall street and Bay street can say, listen, we are a big repository for money, so you just hand it over to us, we'll go put it to work and we'll give you a portion of the return that we generate. And then we're going to hand out big bonus checks to everyone who had no part in generating that return.
It's a very interesting phenomenon.
Whereas, which, interestingly enough, divisible surplus with a life company is kind of like handing out a bonus check to, because of the returns generated from the life company for everyone, that maybe you didn't do anything particular in generating that other than you were a participating policyholder.
Absolutely. And it's not an either or. Right. But let's be honest, like if, if we had a conversation and said, well, okay, yeah, you can do that, or you could become the co owner of a company that's never failed to engineer a surplus. It's engineered and you get to be a co owner of it and your ticket to entry is premium that's your subscription to your ownership interest in this business. You got to pay premium. And from that place, from that very place, you can go and do other things. You can invest money in cryptocurrencies or stocks or ETFs. Yeah. Or, yeah. Buy the dip, buy the, buy the cone, buy the ice cream. Like whatever it is you want. Like.
You can do it from that place but still have a foundation of an aquarium of money that is yours. That never leaves your control. Because there's a lot of language out there too, right? Rich of people saying you get to have your dollar doing multiple work in multiple places. That's not what's happening. You're borrowing against your dollar so that your dollar never leaves your control. You're using someone else's dollar to go and take care of that thing that you would have otherwise used your dollar for. Your dollar is doing one thing. It's growing in one place. It's not doing multiple things. You're using other people's money to do those things. So how much of your money do you want leaving your control?
Logically, none.
Yep.
And you got choices. You got a mattress, cookie jar, shoebox, or a policy.
You got to choose the policy.
Or you could keep giving it to your bank, but I don't think that they're going to share any of those profits with you. Look, you can, you know one of our past think tanks, a gentleman named Mark Benson, who's I believe he's out of St. Louis. Yeah, I love, he did a little drawing. He's like, look, you can, you can save and borrow money way over here at a traditional bank or you can save and borrow money without restriction over here in an insurance company.
He's back in coach now, by the way.
Oh, is that right? Oh, that's.
Yeah, yeah. He was in the last 10x session and he goes, oh my gosh. He said, we need to, we, we have to connect because, because I told him, hey, you know, we, we really love seeing everyone at think tank and it'd be nice to, you know, a day will come where everyone's back again, you know, being able to travel and do all those things. He goes, yeah, he's going to be meaning to connect with you. And I said, yeah, the last time that you mentioned that was after a think tank several years ago where you said, hey, I'm going to reach out to you and connect with you. I never heard from you. And so here we are now, and we're in this breakout room in a 10x meeting. And he's you know, still going strong and. But yeah, he's, he's a smart cat for sure.
What's interesting about the gentleman we're speaking of, he was, you know, he's a, was a, was a football coach. He was a, you know, high school a teacher and stuff like that. And so he works actually a lot with teachers. And they all have their money wrapped up in these government programs all tied into the market and maybe going up, maybe not going down, money coming out of their paycheck, right out of their control, not able to do anything with it. And the same thing happens here in Canada. We have, you know, we speak with people regularly that they've got, you know, some kind of a, you know, a pension account and they're looking at leaving that vocation. And then, then they want to know, okay, well, what do I do? Do I leave it with, you know, the teachers organization or the government pension, or do I go and, you know, get the capital release and try to work with it? But it's always tied into that. It's, you know, it's tied into that, that account that's registered with the government, like, it's, you have limited options on how you can liberate that capital until a certain age. And so it's, it just goes to talk about prisons that exist around your money. And, you know, if you, you enter into the situation where you're, you're working for an employer and they're, they're forcibly taking that contribution off your check, it's in that case, I don't call it a contribution. I call it a confiscation. And it goes right into the account. And then, you know, the day that you leave, it's still stuck in that compensated account. And yeah, you might have some choices with it, but you can't really liberate it to do anything if you think you can do a better job with it somewhere else. So, I mean, that doesn't tie directly into the market risk condition, but all that stuff is, is tapped into current market risks that are happening. You know, so we're, you know, at the time of this recording, Jay, we've got interest rate uncertainty everyone's now been accustomed to. They've kind of known, I think in the back of their minds, people have been aware that at some point in time interest rates will have to rise again. Yeah, you know, we've been saying that, we've been talking about that frequently over the last 13 years, but people have been accustomed. Now you just, just think about it. Basically 20 years of declining interest rates. That's a long period of time. That's, that's, that's having a kid and then having that kid go to college in the same time frame under a lower interest rate environment. And people are all up in arms worried about, well, the real estate markets is over inflated and all this stuff like, well, why do we think that's happened? I mean, is there any correlation? How about the ability to have easy access to low interest rates? I mean, there's no possible way that that could increase the housing prices. You know, I mean, just think about the correlation of some of these things and recognize that as interest rates begin to rise and whatever speed they do, we don't, we don't know that yet. Some things are positively impacted and some things are negatively impacted. And one thing that will over the course of time be positively impacted by that is actually the ability for the insurance company to put money to work for longer periods and therefore have additional capital resources that they can also work with to support long term dividend distributions to par owners.
Yeah, definitely. And.
You hear the words used like unprecedented and you hear that language that comes out in the media and.
That'S.
Not part of the vocabulary of the life insurance companies because they've been operating long before you and I have been alive combined and much longer than that. So they've weathered all of these different events that have happened. Even if you just examine over the past century the number of recessions, the number of events, H1N1 SARS, Covid.
Great.
Depression, Spanish flu, 33, 34, soon to be 34 recessions.
So many more events. And yet the life insurance companies remain the most financially solvent businesses on the planet. It's not because they figured out how to get the caramel into the caramel bar.
Still trying to figure that out.
It's engineered.
And I want an engineered outcome.
Engineered. That's the outcome that creates certainty. It creates a sense of peace and comfort. And yeah, from that platform you can take risk if that's what you like to do. Just knowing that you always have that strong foundation and that it cannot be destroyed by anyone except you.
So you've got the control, but you also have the power. You have the power to ensure that it stays growing and that stays in place. But you also have the power to kill it.
And would it be responsible or irresponsible to kill a business that is engineered to be profitable?
Funny that you're mentioning that you've got the power because it reminds me of the shirts that we had made for think tank the power of family banking. We had the he man on there. I have the power, right?
And that was the. That was the name of the deal. It was family banking.
Right?
The power is yours. And that's what we mean by that. That's the essence of it. Like, you wouldn't sit down with a group if you started a business and you had a group of investors and they put capital into this business.
And.
You met with them all one day and you said, listen, I got good news and I got bad news. The good news is we've got too much capital.
The bad news is I'm killing the business that's generating it.
You'd probably be carried out of there in a stretcher and a straight jacket because the investors would be like, what is the matter with this person? And so you've got to.
Because in times of where anxiety, you know, can take a hold of someone.
If you don't have that option to even consider.
Then you're in a bad spot because you're vulnerable.
And people have been riding this euphoria, particularly in the cryptocurrency space. And we are in the early stages. Think about the Internet. Think about the emerging Internet back in the day. You're using what, email, you're on the what? You're surfing the what? The Internet. Like what. What on earth are you talking about? We don't do things that way. And there will be companies that make it, there will be companies that don't. There will be cryptocurrencies that make it. There will be many, far more that will not make it than the quantity that will.
We're in the early, early stages. Fortunes are made.
But so much money's lost. But is it really lost?
Transition, transfer. Right.
And so this brings me again, it takes me back to Nelson's book. He describes it perfectly when he says, if you were to take all of the money on planet Earth and distribute it equally among every human being on the planet, within About a decade.
97% of that wealth would be controlled by 3% of the population.
Is it because they have a giant magnet and they're sucking up all the coins on the planet and, you know, know, vacuuming up all the. The dollar bills.
My son plays a Nintendo Switch game where Luigi does that. It is.
No, it's because they know. They know something that the average person simply does not know. And that's the way of the world. And we get caught up in this human condition called greed. I gotta get in because everyone else is getting in. That's the human condition and now we're in a state of fear. I gotta get out because everyone's getting out and I'll feel better, I'll feel less anxious if I get out now. And then the human condition remaining is to repeat that cycle until, until all the money you have, you've been separated from.
It kind of reminds me of something. It actually came up today, an article. So in Edmonton they have us big ginormous facility over by the, the Edmonton International Airport. It's the Aurora cannabis facility. It's the largest, you know, marijuana facility in the world, I think, and they're shutting it down. So they, they just built that thing. I think it's, I don't even think it's been. Maybe the doors opened five years ago. I don't even know if it's been around that long. And at the time it was right, you know, right as the, the industry was being legalized in Canada and all this stuff. And it was all, you know, the, the market and the news, it's all you could hear about is Aurora and what Aurora is going to do. It's going to revolutionize and change everyone. It's going, they're going to be selling and producing for other countries and all this kind of stuff. Yeah. And at the time I'm, you know, the stock was quite high as I recall, and I, I don't know, I'd be, I don't, I don't know what it is today, but I'd be surprised if you can get a dollar or two bucks for it. I think it peaked somewhere around 20 or $25. And so again, it's, it's like this is, this is time now saying we've, you know, we've got this excitement and this exuberance and there's, there's, there's a new market change condition and there's legalization thing and then all this stuff that can happen. But again, some companies are going to make it, some aren't. And this is a company that doubled down on a massive facility at a huge cost and huge expense, which would only allow them to operate as basically like a premium product, premium seller. And now they can't keep the lights on.
Interesting how that happens, isn't it?
Just imagine that.
You know.
Again, I can only think about everything that I've read in Nelson's book so many times over the years. Interest rates rise, interest rates fall, economies expand, economies recede. Real estate cycles will continue. But the process of banking goes on no matter what.
Someone has to control that function as it relates to your needs and it should be you. And this concept has absolutely nothing to do with addressing the yield of an investment. It's all about how you go about financing the things in your life which can certainly include investments. And so it's just again, rethinking your thinking. Because this phenomenon of market volatility euphoria around the next greatest thing that you should be investing your money in, there'll be many more next greatest things, and there'll be many more instances of market volatility, severe market volatility. What are you going to do to shield your money from that?
One thing that kind of comes up for me as you're talking Here is page 75 of Nelson's book, which is a different look at the monetary value of a college degree. And in this example that Nelson goes over, he basically says, look, here's what people are putting in to pay for a typical kind of college degree. Since the book was written, those prices in the United States have gone up substantially. But he says, if, instead of doing that, what if you put the money aside into a, into a policy on that, that, that child who. And they decided they went and got an administrative job or some other type of job, and then they went and started borrowing from the policy to go and basically lease Lexus cars or Mercedes or fancy cars basically to all the doctors and the dentists, getting out of their, you know, getting their degrees and getting out of college and even, even gives you the business model. You go and you, you take them out for lunch, you know, when they're getting ready for their finals are coming out and you go take them out and you talk to them, you show up with a couple cars, you, you get them into a lease, lease agreement. And basically he talks about creating an entire massive passive income stream of income, retirement income, simply from being a car finance financer for people in this area and, and using the policy as the reservoir for accessing the capital to go and do that. And in no, in no instance in there is there any investment required in the market.
It's all about controlling the banking function.
That's right.
And using your imagination, which you don't even need to use your imagination because Nelson's already done it for you.
To go and create that payment stream. And so it's not that everyone should just go and do that tomorrow. It's about recognizing there are many other ways to go and create a passive income, to go and create revenues to have control and a little bit more of simplicity without having to take on all the same Level of risk. Now, could there be some risk in leasing some cars? The answer is, is yes. But nowadays you can, you can basically load jack them with like a GPS deal. You know, I think they have like remote shutoffs where if not when the car is running, but if the car isn't running and like you haven't got a payment, you can basically stop the car from turning on so you can go repossess it. Yeah, right. So there's, there's, there's, there's, there's control features around there. And, and the person that pays for that device to be installed in the car isn't the person who bought the car. It's the person who's leasing or making the payments on the car. It gets baked into the price of the car. No different than when you buy a house and you put a mortgage on it. Well, if you, if you put less than 5%, you know, less than 20% down, CMHC insures it. But that insurance premium has to get paid. Well, the bank pays it and they tack it onto your loan so you're paying for it. The consumer pays for everything.
That's right. That's absolutely right. And you know, Nelson talked when he was sharing, you know, when taxes change, and he was talking about the transport driver, and he had that sign on his transport. Do you remember that?
Yeah. He was falling down some interstate behind, you know, and you get to thinking as you do on a long drive and a long road, and here I am, lo and behold, following behind this, you know, transport truck, and it's got a sign on the back that says, last year this truck paid, you know, $18,000 in taxes. And, you know, got to thinking, that's not true. I paid those taxes.
That's exactly right.
That corporation simply collected them. Yep.
We're all tax collectors. If you, if you run a business.
Let'S encourage folks who are in the group or who are on the YouTubes, if they haven't already, to watchibc.com and when you get to watchibc.com you get to watch IBC. It's an introductory overview of the process@watchibc.com again, that's watching ibc.com and when you get there, that's what you'll find.
Isn't that good.
Pretty simple.
You like how I did that with the, it's kind of like the. I got to share this with you real quick before we sign off. So there's, there's, I think of a company like McDonald's. They're amazing at neuro linguistic programming. They had it one time. I don't know if they have now. I haven't had a hamburger from McDonald's. I can't even tell you the last time I had a hamburger from McDonald's, but they had it one time with a Big Mac. You'd open the container and rate on the inside of the container, it would read unique.
You might even say, it's excellent.
And so your eyes go to that NLP happens in the human brain, your subconscious mind. You look down at the food and you're just, you're set to eat. But you're, you're thinking as you're taking the bite, and you're in your subconscious mind and going, yeah, this really is excellent.
So.
Watchibc.Com.
Unique.
You might even say, it's excellent.
