YouTube talk by Jayson Lowe ("Ridiculous Cost of Spending CASH") demonstrating the hidden costs of spending $1,000 in cash. Using a 22% example tax rate (taxable income ~$75k), he calculates you must earn about $1,282.10 to have $1,000 after tax. He then computes foregone investment earnings of $1,179.35 by assuming 3% growth over 26 years (illustrative), producing a combined present loss roughly around $2,500 when adding the spent $1,000. Lowe then proposes the Infinite Banking Concept (per R. Nelson Nash) using a dividend-paying whole life insurance policy: premiums build cash value that continues to grow by contract while the owner may take policy loans (up to ~90% of cash value). In his in-force illustration he cites a company loan rate of 6.2% (≈$60/year interest on $1,000) and shows guaranteed cash-value growth figures (e.g., $1,400 increase between year 2 and 3 = ~$3.83/day). The video frames this as recapturing lost opportunity and encourages viewers to learn more via IBC.com and related videos.
Questions this video answers
22% (example earned taxable income ~$75,000).
About $1,282.10.
3% annual growth over 26 years, yielding $1,179.35 in foregone interest.
Up to 90% of the cash value (policy loan).
6.2% (example: borrowing $1,000 would incur ~$60 in interest in one year).
Chapters
How much money is going to flow through your hands? How much is that? Think about time and think about the money that comes in. And when I think about the amount and volume that I spent in cash already in my life, it equates to such a big number of lost opportunity for me. You got an opportunity to change that for yourself. Have you ever been frustrated when you learn something and you go, oh man, it would have been so much better if someone would have told me that sooner in my life. Well, I've experienced that. I suspect you may have too. And today I'm going to show you what it would cost to spend $1,000 in cash. That means you've earned the money, you have it in cash and you go and spend it. Now this is one thing that really frustrated me and angered me, actually, when I realized how much it had actually cost me. Because I had gone and spent a lot of money up until that point in my life by just spending cash, the first thing I thought I would do is just talk about what it cost to earn that thousand dollars. Oh, you had to go to work in some form to earn that? Right. And every one of us living here in our great country of Canada, we know that when we earn income, it gets taxed. For the sake of this argument, I'm going to say, well, to get that thousand dollars, it's going to cost you about $1,282.10. Well, I don't know what it's going to cost you actually, because every one of us can have a different tax rate. That particular calculation was done on someone who had a taxable income of $75,000 a year. We could go, and we'll go look at that. So this is just a example of a software tool that you could, you know, just a tool you can get that would calculate what your average tax rate would be. And as you can see, it's this row here. And average tax rates vary across our country. They go up to 25 plus percent and down to like 19, 18%. So for the sake of the example that I want to go through, I use 22%. And that's where that $1,282 comes from. So 22 cents out of every dollar you earn goes to taxes. So you have to earn more than a dollar to get a dollar. So as you can see in this example, for a thousand dollars, you have to earn $1200 and $82. And that's the first point that I wanted to make. The next thing I wanted to show everybody Was how much lost opportunity would you have when you spend that thousand dollars? Well, again that number is going to depend on you because it's going to be based on a few inputs, right? So let's go look at what they could be. I use 3%. So that's just 3% per year over X amount of years. That depends on how long you live. So you have to decide what's a reasonable time frame to use. So for the sake of this argument, I use some person who's 64, so 26 years of income off of that thousand dollars. So let's just say that thousand dollars is in a tax free savings account growing at 3% per year. That's what it would have cost you in 26 years. Just to help you see that, you can just simply go find an opportunity cost calculator. There's a lot of money Internet, plug in thousand dollars, plug in the 3%, plug in the 26 years and it shows $1179.35 that are foregone interest earnings. That just gives you a much better picture of the cost of actually what it costs to spend $1,000. So really add the two together, the $282 that went to tax, you know, to get that thousand, screw that in there for like $1461 to get to that point. And you know, so that's plus the thousand that you spent. So it costs you somewhere around $2,500. Now those numbers very much will vary from person to person. And it's just to help you understand that there's a cost. As soon as you spend a dollar that you earn in cash, you never get to spend that again. So that's what we call lost opportunity. And the next thing was is how could you change your results? Because you know, remember back when I started talking about this, like just something that frustrated me about the fact that I didn't know I could have done something different than spending cash. If you're not familiar with what we do here at Ascendant, we help people with what we call the infinite banking concept. Now that happens to be based on this particular book by R. Nelson Nash, Becoming youg Own Banker. It's sold over 500,000 copies as a self published book. And why has it sold so many copies is because it works. The thing that I really want you to understand is if you don't know about what the infinite banking concept is, I'm going to encourage you to go watchIBC.com now. You'll see the link below here, that's a 90 minute training video on the concept. And that concept allows you to do things like I'm going to speak about. And so how can you change your results? I think I gave you a hint there. You can apply the infinite banking concept in your life. Now what would that look like? Instead of putting $1,000 into, you know, just spending it, you put it into a dividend paying whole life insurance policy. That's right. That is the platform that we use for the infinite banking concept. It's a very specific design, dividend paying whole life insurance policy. So you might be saying, well why would I put it there? Didn't I just lose, you know, I don't have that thousand dollars anymore. And that's a pretty simple answer because when you start to practice this concept, you would be able to take a policy loan for the thousand dollars that you need. Here's where it gets really interesting because thing is that your thousand dollars, you don't take it out, it keeps on growing every day uninterrupted because it has to by contract. And you're able to take a policy loan against that contract up to 90% of the cash value. So when I say here, what could you do instead? Well, you could put your thousand dollars into premium and then you could turn around and take a policy loan. So what I thought I'd do is I just show you what that could look like. It's an in force illustration and it's on a policy that I own on one of my children. So I'm the owner, I get to use it, I get to practice banking. Because we're going to talk about banking. It's not about the product, it's about the process of banking. Again, if you don't know why, I'm going to encourage you to go watch IBC.com and take in that 90 minute video just to help yourself understand this. In this particular contract I'm able to put $4,000 a year into it. You see that number right here? And what the life company requires that I put in is over here less than what I could put into it. That's the way that contract is designed. Just to help you understand a few things, I just wanted to point out a few things. So because the numbers are here, I thought I'd use them. And that's where on the guaranteed side you can see between year two and year three, the guaranteed cash value is going to grow by $1400. So it's just the difference between the 3100 and the 1700, that's $1400 in that year. Once you do the simple Math, that's like $3.83 a day. So every day between year two and three, the guaranteed cash value in this policy is going to go up $3.83. Now the other thing is I have the option to put in the 4,000. So this is when I'm thinking back to that diagram we looked at there. If I chose to put a thousand dollars into here and I chose to take that thousand dollars out, you can see, well based on, you know, that conversation we had where, you know, you can borrow up to 90% of your cash value. So I could easily borrow a thousand dollars against this policy because I paid the 4,000 at the start of this year, it's going to grow to 4,200 by the end of the second year. It's well above $1,000 at this point. So I can easily take that policy loan out right now for $1,000. Now a couple other things I just wanted to show you just for information's sake. You can see that in the third year, if I put this $4,000 in a premium and then I go look at what my cash value grew to at the end of that fourth year, you can see that's pretty much dollar for dollar already. And this is the end of the third year. And one thing you'll learn, Nelson said this very clearly. Every time you start a dividend paying whole life insurance policy, you're creating a business where one didn't exist before. Your own little banking business you can create with these assets, these contracts. So you're creating a business that didn't exist before. So you got to capitalize it. And so the first few years you may put in more capital than you have value. That's pretty normal for any business. If you've ever started a business, you'll get that. But as you can see, it's pretty amazing how quick we can get to a point where we have as much or more value than we've ever put into these contracts. And when I talked about putting that thousand dollars in and instead of, you know, just spending cash, you can see here, I put that $4,000 in already. It's pretty much dollar for dollar, put a 4,000 in, pretty much 4,000 of growth. So I take out the thousand dollars, the life company is going to charge me interest. And this particular example that I use for the in force illustration, I know that Life Company charges 6.2%. So if you borrowed $1,000 you're going to pay $60 in interest in that year or 17 cents a day. Another thing I want to teach you is that as a dividend paying policy owner, I get to participate in the profits of that life company. So do you think I mind paying interest into a business entity that I'm a co owner of where I get to share in the profits? I really appreciate the fact that those life companies are very good at being profitable. They've never failed not to be profitable all two times longer than I've been alive. Every year they have given the policy owners a dividend because they're profitable. So they do a very good job. And part of that profit can come from people like you and me paying interest on policy loans. The cash value growth was going to be $8.83 a day. Just on the guaranteed side. Cost of interest is 17 cents a day and yet my value is going up $3.83 a day. Nelson spoke about recapturing the interest that you're spending sending away to someone else. And he just didn't talk about money you borrowed. He's also talking about the cost of spending cash because either way there's a cost to it. So by spending cash, you lose the opportunity for that money to grow, your opportunity to change the narrative so you're no longer spending cash and losing the opportunity for it to do anything in your life. Because here's what I want you to think about. How much money is going to flow through your hands? How much is that? Like we just looked at a thousand dollars, you know, think about time and think about the money that comes in. And when I think about the amount and volume that I spent in cash already in my life, it equates to such a big number of lost opportunity for me. That's what I hope you can get from this is that you got an opportunity to change that for yourself. And if you want to learn more about this, I'm just going to encourage you to watch more of our videos. And there's one in particular I want to point out and it's called everything you've been told about money, it's wrong. And you're just going to be able to see the link to it up here. Just a short little video like this one and it'll help you on your journey.
