Saving For The Future While Paying Off Debt In Canada

Money grows in branches, right? Isn't that the reason why banks open more branches? Because the money grows in branches. So same applies to our system. When we become profitable, we create another branch because more systems are needed to create more access to capital to create bigger control over our banking system. So it's not a matter of a policy, it's a matter of system of policies that we're going to create because otherwise that money will continue flowing through the books of someone else's bank.

Debt. One of the things that we get excited as IBC practitioners is to help folks just like you recapture your debt. One of the questions that we get asked all the time is hey, does this process help pay off debt in less time? Well, I want to clarify that this process is not about paying off debt in less time. You don't need our help in paying off debt in less time. If you want to pay off your debt in less time, just increase the payments to those debts. Your debt will be paid off in less time. Where we come in and where we add value, which is where the value lies, is not about paying off debt. We will accomplish the objective of paying off debt, but we are going to recapture your debt because the real asset is the stream of payments that you're sending to third party finance companies on that debt. And, and once you become your banker, you need to recapture those stream of payments because that's where the wealth lies. Now in this particular case study, we're going to talk about a chiropractor. He's 47 years young, or he was 47 years young when he had started this policy becoming a banker system. Now, the chiropractor had about $420,000 in consumer debt, which included two mortgages. And in total he had about 15 debts between lines of credit, credit cards, money that he owed to cra. So we're going to go through his Excel sheet and you're going to see exactly who he owed money to and what the loan balance was. Now the chiropractor, after he went through the education process just like this, because that's so fundamental to us, is to make sure that you understand the process before we get going. He wanted to start his banking system with $20,000 per year in premium. And once we heard that from him, it's an obvious question that we have to ask. I said, hey, Mr. Chiropractor, help us understand, how did you come up with that 20k in premium? Like what's your rationale behind putting 20k into your banking system per year's premium? And he said, well guys, I'm a chiropractor, I see patients and per patient visit for me is 50 bucks. So what I want to do is I want to take equaling to two patient visits aside every day. So $50 per patient visit and two patient visit is $100. So I'm going to take $100 aside every day from my business and I'm in practice every year for about 200 days per year. So $100 per day multiplied by $200, that's $20,000. That's my rational, that's what I want to put into my system. So we said, hey, that makes sense. Now here's the tricky thing. Chiropractor did not have 20k to start the policy with. He didn't have lump sum money available to start a policy with. So you're going to see one of the debts in the 15 debts that he had is actually a borrowed money. He bor from someone to start his policy. But he only borrowed money for the first year premium. Going forward, he was putting aside $100 per month from his cash register to make sure the premium is available for next year. So he was able to capitalize his system with 20k per year. Now let's go look at his objective. So his objective was to eliminate debt without working any harder, without taking on any risk, without obviously changing his cash flow, without ever losing control over his money. And in case, God forbid, something was to happen to him, he wants to make sure that his family is not left with all the debt. So he wanted life insurance, there was need for insurance. Also, the solution to his problem is the process of debt recapture using becoming your own banker. Now here's what the chiropractor did. There's going to be a lot of moving parts in this case study, so your 100% attention is going to be required. And if you have tuned in using one of these mobile devices, I would suggest rather than keeping this in this mode, please flip it over so that you can have a full screen view. So I'm going to walk everybody through his debt recapture plan. Now a lot of planning and brainstorming is spent into debt recapture plan and this is where we get our energy on because we want to help you to recapture your debt and we love this process. This is one of the things that I get excited about is debt recapture. So the first thing that you see is month end year. So the green shaded area, that's the year and the white area is the number of months going forward in his debt Recapture plan using the process of becoming your own banker. The second column is going to be Policy loan. Well, sorry, it's going to be Policy premium. So you can see the first premium is $20,000. And as I mentioned, he didn't have this $20,000 to begin with, so he borrowed money from someone as a private loan to kickstart his policy. But going forward, he was setting aside $100 per month from his cash register to make sure the money is there for next year going forward. The other column is going to be Policy loan. So you can see in the first year he puts 20k and he's got immediate access. So if he puts 20k into policy today, right away, within 30 days he could access 11,200 as a loan from the insurance company. And that loan will not interrupt the growth of his own cash. His cash kept growing in the policy. Now you're going to see a separate checking account. I put a separate checking account in the sheet which I'm going to come to and explain the benefit of that. Now you're going to see all his debts. So you can see debt one, debt two, debt three, and so on and so forth. He's got 15 debts and each of these debts you can see who the creditor is, what the balance on that loan is, how many months are remaining if he continues to make that payment. So his payment amount is $200 per month. So what his payment is going to be on that debt and how many months are remaining to pay off that debt. So a walkthrough, Home Depot and same thing with Target, you can see balance, monthly payment and number of months required to pay off the debt. So we have that for each debt. So if I scroll to my right, you can see all his debts. So you can see nine debts on this sheet and the remaining debts are on the second sheet which I'm going to bring up right away. So there you go. So you can see all the remaining debts. And this debt number 13 is that private loan that he took to kickstart his policy. He bought a 30k but he only needed 20k to kickstart his policy. The remaining 10k was used to pay off some other debts. So as you can see, he was really struggling. He had a lot of debt. Now his debt is $420,000 if you add up all those 15 debts.

Now he started a banking system with 20k per year. So if he just took all that money and applied towards his debt, it's going to take him a long time to pay off his debt to pay off debt by just sending 20k per year away, it's going to take about 20 years to pay off the debt. Now let's see how by changing the process he was able to pay off the debt in 57 months using this process. A repeat, he paid it off in 57 months. So let's start. So first year he put 20ks premium and immediately he's got a loan available of 11,200. So he took insurance company's money. So again that's a key thing to understand. That money is not his money. His money is inside the policy, growing every single day. So he took insurance company's money and immediately he was able to pay off his first debt, Home Depot, Target, BMO, MasterCard. And he also had some money left over to put a little dent in a CIBC Visa. So immediately he eliminated three debts, put a dent on CIBC Visa. Now all the minimum payments that he was sending away to these snakes and dragons, the third party finance company, we call them snakes and dragons. So as those snakes and dragons are being paid off, we asked him this question. We say hey doc chiropractor, what do you want to do with the stream of payments? And he said, you know what, I've been sending these payments away for so long, I want to just set these payments aside every month in a separate checking account and I want to add it to my debt recapture plan. So you can see this is where the separate checking account comes into handy is because we prefer that we don't co mingle our becoming your banker money with our day to day expenses. So we always encourage our clients to create that separate checking account. So if you add up all these debts together, that was 665 per month which he was sending to these snakes and dragons. And as those snakes and dragons are being paid off, he's saving all that money. He's very disciplined, very diligent. He's saving all that money per month in a separate checking account. Now you'll notice something from year seven to year eight, his checking account balance or his checking account savings increased from 665 per month to 1720 per month. What happened was one of his debts on one of his practice, wellness practice, he had a balance of about $7,378. His payment was 1,054 per month and he had about seven months remaining in that debt. So just by virtue of him making those payments, the debt was paid off in seven months. So we advised him to take this 1,054 and add to his separate checking account every month. That's why his savings into his separate checking account every month increased from 665 to 1720.

So let's complete the year and let's see what's transpired. So by the beginning of the second year he puts in his another premium $20,000. Now immediately he's able to access a loan of 17,540. You can see in terms of access to loan it started at 11,200 in the first year. In the second year now he can access more money from the insurance company. The reason why that is happening is because his cash values must increase every day to match the death benefit by age 100. Longer we keep the policy, the better the cash growth becomes. So every year you will be able to access more and more money out of your own system. So he puts another premium $20,000. He's able to access another $17,540 now just by virtue of him putting some money aside into his separate checking account from all those payments that he was making to third party finance companies. As those payments are done, those third party finance companies are done. He's been saving that money. So by the end of the year he saved up $13,255 in the checking account. She took this money from insurance company. He added his $13,255 that he saved. Now he's got access to 30,795. And now he's taking that money and he's applying towards more debt. So he eliminates his CIBC visa which had a balance of 4,475 at that time. He eliminated TD bank, he eliminated CRA tax debt, he eliminated Royal Bank Loan and he put a dent in his Sears credit card. So the balance came down from $11,905 to 2135 in a matter of start of year two. So how is he doing so far? Les, can we get some engagement? He's one year in, beginning of year two, eliminated eight debts and he's starting to work on his debt number nine. So how is he doing so far? Ask yourself this question, has he worked harder? Is he taking on any risk? Is his cash flow struggling now? Or how much risk is he taking to recapture his debt, repay off his debt using this system? People are saying he works smarter, he's doing awesome, Fantastic. No risk, not harder, just smarter. Perfect. So again, it's not a matter of what you're going to buy or what you're going to use the money for. It's how are you going to flow that money? Right? So let's move on. Now if you add up all the minimum payments that he was sending to all these third party finance companies which are now paid off, if you add up all those minimum payments, it came to 3625 every month. Imagine how much of money was leaving his family every month.

Now he's just redirecting that money back into his own debt recapture plan. 3625 per month. He's recapturing that money.

By virtue of just him setting that money aside in a checking account every month. At the end of two years now he saved 43,500. Now let's move on to year three, beginning of year three.

So beginning of year three, month 25, he puts in another deposit into his own family banking system. See what happened to his policy alone? It increased from last year. Now it's 18,235. His loan amount is almost equal to his premium. And that is going to happen with every policy. Your loans will ultimately exceed your premiums that you're putting in. So beginning of year three, start of month 25, now he's taking $18,235 as a loan from insurance company. He adds up what he saved from recapturing the stream of payments. Now he can use $61,735. He takes that money, eliminates Sears, eliminates Scotia debt number 10, he's on debt 11, he's eliminating the debt on his other practice, JW practice, he eliminates TD loan that he's got standing. He eliminates the private loan that is the loan that he took out to kickstart his policy. So by start of year two, sorry, start of year three, end of year two, he's paid off 13 debts just by changing his process. And, and now all the minimum payments that he was sending away to third party snakes and dragons, 5775. He's recapturing his very discipline. Now all this time he needed coaching, he needed help. So there was someone from a team helping him working through all this because this is also brand new to him. When you do decide to do this process, don't do alone, don't do it alone. Have a coach, have a mentor, someone who's done all this for themselves personally so that they can share exactly how it's supposed to be done. Now he's been recapturing 5,775 every month by virtue of him just putting that money aside at the end of year three. He saved 69,310 in a separate checking account. Now let's start with year four. Start of year four, end of year three, he deposits another premium. And now he's got a loan available of $19,000. You can see his loan available is increasing. Every year he takes 19,000 from the insurance company, adds it to 69,310 that he saved. Now he's got access to $88,000. And now he takes all that money and he starts to pay off his last two debts. So the only two debts that are remaining are the two mortgages that he has. So he puts a big chunk, he pays off a big chunk of the debt number 14, which is one of the mortgage balances, and he reduces that debt to 6,980. So he's got this balance and then the balance on his 15th debt. And that's pretty much it. That's all he has. And then he's still recapturing all the stream of payments that he was sending away to third party finance companies. So he still saves that money. And just by virtue of him saving that money, now he's got enough money saved by 38 months to pay off the balance remaining on his last mortgage. So the debt number 14 is also paid off. All he has left now is debt number 15 and that is it. So in a matter of four years, he's paid off 14 debts and now he's recapturing 6,525 every year back into him, his family. That money was leaving him. Now it's been put to work for him and his family. So by saving all that payments every month, by end of the year, he saved himself 71,305. Now you'll see. And when it comes to premium, something happened. His premium from $20,000 per year reduced to $8,000. Now what happened there, now what happened was, and this is how we structured the policy. Although he was capitalizing $20,000 per year into his own system as premium deposit, but insurance company did not need $20,000 per year to keep the policy going. That's how we design policies. The required premium for him was actually less than 20k per year. It was $8,000. He just had the option to put some more money into policy as premium. So what he did was he reduced the premium on his first policy down to $8,000, which was just the required premium. And the reason why he did, because the policy became efficient. He only needed to put $8,000 in to get a loan for $9,300. So now the policy is efficient. You have to put less to get more. Now, he didn't change his cash flow. He's seen what the policy and the system has done for him. So what he did was he found more cash and he kickstarted another policy for $20,000 per year in premium. And that new policy gave access to another loan. So he doesn't have one system now, he's got two systems. Now, you must have heard this from so many coaches or you're probably familiar with money grows on branches, right? Isn't that the reason why banks open more branches? Because the money grows in branches. So. So same applies to our system. When we become profitable, we create another branch because more systems are needed to create more access to capital, to create bigger control over a banking system. So it's not a matter of a policy, it's a matter of system of policies that we're going to create. Because otherwise that money will continue flowing through the books of someone else's bank. We always keep prioritizing to flowing that money to the books of our bank as premium deposits.

So now he's able to access the loan from both policies. So 9,300 from his first policy and then 11,000 from his second policy. So combining both, plus combining what he saved in his checking account, he's got access to $91,000. He takes that money and he applies directly towards the mortgage balance on his 15th debt, which is a mortgage on a house. So he reduces the balance down to $54,000. He applies a big chunk of money towards it, and then he continues with the process of recapturing those stream of payments. So he's saving money, he's very disciplined. Now, by the time he reaches month 57, he's got enough money saved in his checking account that he can actually take all that money and eliminate the last debt, which is the last mortgage. So in 57 months.

He'S paid all his debts. If he can do it, so can you. It's easy when you know it how. And it's easier when there's someone actually guiding you, coaching you to do it right? And then this is what we take pride on. So in 57 months, all his 15 debts are paid off. And in addition to that, he also has cash flow of 7,640 per month, which was leaving his family on those debt payments to Snakes and Dragons. In 57 months, all his debts were paid off. It would have taken him 21 years, but he accomplished the objective in 57 months. But it doesn't end there because it's not a plan to pay off debt. It's a plan to recapture the stream of payments, which is what we call recapturing the debt. The total amount of money that he put into policy is $108,000, which is what he put in as premium. The total policy loans that he had taken to apply towards his plan is 86,480. So this is the amount of money that he took from the insurance company. The total debts that he paid off in 57 months is $420,000 now on those loans. At that time, insurance company's interest rate was 7.5%. Now as he was using insurance company's money to pay off the debt, he wasn't paying any policy loans back because he was the banker on those policy loans. He just decided not to pay off those loans until his debts were paid off completely. He was in total and absolute control. Insurance companies would not call the loan would not come after him. They don't care because they have the best collateral in the world. His life during the debt recapture phase, in case something was to happen to him and he would have passed away, his family would have received 420,000. About what was his death benefit? I think it was just about $400,000. I think it was more, it was like $450,000. The family would have received $450,000 in tax free death benefit which the family could have used to pay off all the debt. So as he was not paying back any interest on policy loan, the total interest capitalized on those loans of $17,141. So he has to pay the insurance company now $86,480 which is the principal and $17,141 which is the interest. So total loan balance is $103,621. Now he's got access to $7,640 per month in cash flow. That was the amount of money which was leaving his family to paying off the minimum payments and all the 15 debts. So as family paid off all those debts, he took that money and he started applying to us, paying back his policy loan, which is paying his banking system back. So he owed about 103,006, 21. And at a rate of paying back 7,640 per month, it would take him 13.5 months to eliminate policy loans also, which is the debt that he owed to himself, to his system. So in 70 months from start to end, he just not paid off all the debt, but he also recaptured all the debt by paying back his system, paying back his policy loan. So 70 months is what it took for him to do it.

Now think about what did he accomplish in 70 months? Debt paid off, access to 7642 system of banking policies which grow in value every single day. So access to cash from these policies to do whatever he wants to do. Estate value in terms of death benefit from both policies that he has plus $7,640 in cash flow now, which he can use to do more banking policies and use those banking policies to maybe expand his business, buy more real estate. So this process did not take away any of his options. In fact, it created more access to capital for him to do more things going forward for himself and his family. If we recap, did the chiropractor John accomplish his objective of paying off his family debt? The answer is yes. Did John the chiropractor work any harder? No. Did John ever lose control over his money? No. Did John ever take on any additional risk by following this process to accomplish his objective? The answer is no. Did John ever change his cash flow? No. The only thing that he changed was the process.