RESP vs IBC In Canada

But the whole idea behind starting an RESP is you want the money to be there specifically for kids education. So again, not saying RESP is good or bad, it is what it is. But the question is, is there a better way? Is there a better way to accomplish the same objective without having to subject the money to the risk of loss so that the money is truly there to fund kids education?

RESP vs IBC. A frequently asked question we get on this process is, can we use IBC for kids education? Now the answer to that is absolutely yes. We're going to have an expanded discussion on this video to talk about that specific topic. And with any of these discussions, we want to start with any financial decision starts with your why, you know, why are we doing this? Anything you do financially, you have to have a why and understand why you're doing this and what goal are you trying to accomplish. Now, if you're putting money aside for your kids education, meaning you want the money to be there when you need the most, a common tool that we use is the resp. And I guess the question that comes out of this is, is there a better way? Sorbilo, do you want to add your thoughts to that?

Absolutely, Peter. So again, the whole discussion is not to really say RESP is good or bad. It is what it is. RSP is what it is. It's not good, it is not bad. The whole intention is not to bash any products, they're all great products. But it's important to understand the characteristics behind it and the mindset behind it, right? So you know, your objective is to put money aside to save for children's education. So when you quote, unquote, when you want to save money for children's education, you basically are you looking for the money to be there when you want it to be there to fund their education. So if you're setting money aside into resp and let's assume that that money is just sitting in cash. Well, if you're putting that money aside into resp and the money is sitting in cash, then hundred percent that money is going to be there for kids education. But now we all know money sitting as cash is being eaten away to inflation. So what we end up doing is we take that money and we start investing that money to grow that money so that we can beat inflation. And hence we have more than enough money now to fund kids education. But moment we put that money into investments, we are subjecting that money to the risk of loss.

Investment has risk. So now you're subjecting that money to the risk of loss. So the probability of that money being there is just. It may be there, it may be not there because now you are investing that money.

But the whole idea behind starting an resp is you want the money to be there specifically for kids education. So again, not saying RSP is good or bad, it is what it is. The question is, is there a better way? Is there a better way to accomplish the same objective without having to subject the money to the risk of loss so that the money is truly there to fund kids education? And there certainly is a better way. And that tool is called participating dividend paying whole life policy. That is the tool that we use to implement the process of becoming a banker. The infinite banking concept. Because as you're putting money into participating daven pink whole life policy, a policy that you can own on your child, you as a parent or as a grandparent can own the policy on your child. And you can set money into this policy as premium. And the policy is going to grow every single day, doesn't matter what happens. Stock market, Bay Street, Wall street, the growth in this policy is not interrupted by that. So that you know for sure that the money is going to be there when you need the money for your kids education. So that's just one great characteristics of the product. Now the other advantage that we get by putting money into participating whole life policy is that we can access the money today. Whereas if you're setting money aside into resp, the money can only be used at that time for kids education. So we are locking away the use of money while someone else takes away or takes over the use of that money to create more wealth for themselves. And that someone is the institution where you're warehousing resp. But you cannot use that money until that time it's locked in prison. Whereas if you are putting money into participating different bank holder policy, you're not just growing the money to meet the objective for education for the child, but you're also able to access money today. Because if opportunities come for you, you need to be able to access money. So by warehousing money in this tool, you're able to access money while the money is still growing to be there for kids education.

Now education is an important aspect in child's lifetime.

But it's not the whole lifetime that the kid is going to be in the college or university. It's a portion of time that the child goes to university and college gets educated and then they're back in the professional world where they start.

Earning an income to provide for their family going forward. Now if you're setting money into resp, the money is used for education. The moment they graduate, they got nothing else now. Now they have to start from scratch. Whereas if you're putting money into participating, developing whole life policy, the money is not just going to be there for the kids education, but when they graduate the money is still going to be there. Because the policy cannot be taken away, it cannot lose value. As you're using money for kids education, the policy still continues to grow and and now the child can pay the policy loans back and make more money available to reuse again for their first car, for their house, for the investments in future for passive income. Because the policy is going to help them and it's going to be with them till the end of time. Whereas the resp account is only temporary. Policy is there for the whole life. And how long do you think your child has a need for use of money?

For the whole life. Right? So again it all begins with your why. And then you have to work backwards and ask yourself question, is this the best way to accomplish the objective or is there a better way to check more videos out on participating, dividend paying whole life policy and the process of becoming a banker. Make sure that you look at the videos that are coming up on your right.