The 7-Year Money Hack That'll Make You Wealthy

Respecting the truth that your money and your wealth must reside somewhere. Because money and wealth are two completely different things. If you had a choice, you pull up to a drive through and lane one says, be on the government's radar. Don't be in a position of control. Subject yourself to volatility and the stress associated with that. You have no clue what the account value is going to be at any point in the future. And neither does anybody who sold it to you. Or store your money inside of an entity that's contractually guaranteed to grow on a daily basis. It can't go backward. You pay no tax on the build up. You have a tax free windfall called the death benefit that shows up exactly when it's needed the most. Okay, here's what I want to start with. I want to say this before we dive in to Nelson's book that has sold more than 550,000 copies around the world for a reason, because the process works. Here's what I want to say right out of the gate. Imagine for a second you were to hear somebody say you should not use dividend paying whole life insurance as an entity to create ready access capital on demand, on your terms so that you can go about controlling how you finance all the things that you need throughout your lifetime. You should only use dividend paying whole life insurance to provide a death benefit. Let's contrast that with me saying you should not use real estate to generate create wealth or passive income. You should only use real estate to live in.

That's good nonsense. Words have meaning and everything begins with the way that we think. And so we're going to just dive head on, head in, be the lightning and the thunder. We're going to do a deep dive right into Nelson's book. And this is coming from a place of years and I'm talking if I was to take you back to July of 2008 and share with you that this was the domino that tipped over in my life. This book, the process of becoming your own banker, the infinite banking concept, authored by our mentor, the late R. Nelson Nash. Tom, we're going to do a bit of a deep dive, so without further ado, I'll just share with you. Richard Canfield and I co host the podcast titled wealth is Obey Street. We've also got as an ascendant financial team, we have the YouTube channel titled Bankers Vault. So again, that's wealth of Bay street and Bankers Vault. So without further ado, let's get started.

So we're going to go ahead and jump right to the introduction of the book and, and you know, kind of first things I want to highlight, Jay, is literally right at the beginning. So first off, Nelson created this book originally as a course for a 10 hour seminar. When Nelson first started doing this, he was teaching it as, you know, over about a five week period at two hour sessions on Monday nights. So you'd had to come back every week. Now Nelson never phoned people to come back to the session. They either showed up or didn't show up. What he found is that some people that were there one week didn't show up the next week. Others that showed up brought friends with them. So it was a really interesting experience. And he said he did Monday night specifically because he wanted to compete with Monday Night Football, which I thought was really fun. So this is all about the power of dividend paying whole life insurance. And this is really important. It is not a sales tool for life insurance agents. This is really information that Nelson thought should have been taught in the, in the insurance industry for years and years and years and it just really wasn't fundamentally taught. So this isn't about you creating a brick and mortar bank. This is about who the banker in your life is right now. Someone's playing that role. It can, and it should be you. He goes on to say that the book demonstrates that your need for finance during your lifetime is much greater than your need for protection. What he's saying there is, hey, everyone should have some protection to protect their family. We have a responsibility to do that. But your need for buying things and, and acquisitions vehicles, the things that you need to acquire throughout life and where you're spending all your money is more important than, than the amount of protection. It's probably a bigger amount of money that's going to flow through your life than the protection that you need. But if you solve for that financing aspect, those major purchases throughout life using this beautiful mechanism of dividend paying life insurance, you'll end up with so much of it, you might not even get it past the underwriters. Now, Jay, why don't you pop back in? You mentioned earlier before we went live on our session that you're, you're going to be going back into underwriting and you might be at a point where they're not going to give you any more. Is that correct? Yes.

Yeah, that's correct. The insurance carriers name it Human Life Value.

What an interesting, what an interesting name. What an interesting way to, to characterize it. But when you get to the point where, where if you're expanding your system to accommodate all income, which we'll touch on. As Nelson referenced in his book, you get to the point where, especially when you're dealing with a mutual company where there's no stockholders, you get to a point where you can be listed under a category called significant ownership, meaning you are a significant participating policy owner. I've been called worse things. I have no problem being called a significant participating policy owner. And so I'll just say this is that. Let me touch base on this real quickly so we know, we understand the tool that's used to implement the process, right? So there's a difference between what someone is buying participating whole life insurance versus what someone is implementing the process of becoming your own banker. Nelson said that you should ideally have policies with a mutual life company. Now we are going to have many different opinions about this out there in the world. He indicated there are some good stock companies out there too. So it's not about being good or bad, right or wrong, best or worst. It's all about understanding the attributes and understanding this. When you deal with a stock company, you're dealing with stockholders as well as participating policy owners. The stock company, publicly traded company, is responsive to the stockholders irrefutable. The stockholders have an expectation of profit and value creation. Stockholders receive portion of the divisible surplus generated by the participating account of the life insurance company. People can look at what's happening in any given year, oh, the dividend scale, interest rate or the DC ir. For anybody who wants to hang out with the life insurance company executives. The DC IR is 6.25% at this particular company. That's a stock company and it's 6.24% at the mutually owned company. Surely if you're halfway smart, you're going to want to do your business with the company that has a higher DC ir, dsir, dpir, whatever it is, doesn't matter. What people aren't thinking of is 100 year theoretical lifespans. We hear this noise on Wall street, on Bay street, on advisors talking about, hey, don't you understand that one of the biggest destroyers of your wealth is fees, management, expense ratios that institutions and portfolio managers charge and that they're paid a fee on the account balance value, the account value, not the gain. And they're paid on that account value for as long as the account is in force. But nobody's added up how much stockholders have gotten out of the participating account over the last century. Whereas when you're dealing with a mutually owned company, the sole Beneficiaries of the divisible surplus are the participating policy owners. So my question to you, to all the viewers around the world, who would you rather be in a 100 year relationship with? Think about it. Nelson begins with saying this. There are only two sources of income, okay? You've got people at work or you've got money at work. And he talks about passive income, time, retirement. He talks about how banks work, right? So here are a couple of key fundamentals that I want you to really think about as you read page 85 over and over again. Because each time you read it, you are going to see something that you didn't see the last time that you read it. Go to point number three. Because everybody that we interact with earns income from some supply source, whether it's T4 income, W2 income, interest income, dividends, a combination of all the above. Isn't it interesting that all of that money flows onto the books of someone else's bank? Right, I'll say that again. Someone else's bank, someone, some organization must perform the function of banking as it relates to your needs. If you understand that, you can become that character in the financial play. You can become the banker as it relates to your needs. You can stop someone else from getting all your money. That's the problem, is that you're doing all the work and everyone else is getting all your money. And what Nelson said so often is that unless you understand the problem, the solution just won't matter to you. Now when he says if you owned a banking system, he's referring to an entity. And he referred to that entity as dividend paying participating whole life insurance contracts, which plural means ideally a system of contracts that you grow and develop over time. Wouldn't you prefer to run all your business through your own bank? This is akin to what we talk about Rich all the time. When I say, hey Rich, if you and I owned a Publix grocery store together, would we ever want to buy our food or have our inventory shipped to Walmart?

I don't think that would go over very well.

It certainly wouldn't.

We would have a really big conversation about why the heck is that happening and big time probability. If that actually did happen, by the way, it's probably because someone let me in charge of filling in the online order form and the delivery address and I probably would have messed that up on 85. One of the things that I really appreciate about Nelson's one, it's, it's one of my, you know, favorite favorite components is bullet number two. If you knew it passive income time, you would be getting back everything you paid into a system 10, tax free. I always say potentially tax free. Would you object to putting any more money into it? Obviously it's a rhetorical question. We're talking about a system. So just imagine that for a moment. You have a system, you put money into it. Every time that you put money in, you have the ability at some later date to take that money back out. And it, it can constantly provide almost like a refilling resource for you. Essentially this to me, you know, there's a lot of amazing stuff in Nelson's book. The whole book is incredible. But this one, when I first read the book, this really hit home for me. And so when I talk about reading the book for people and I have in my instructions, I always say, look, you're going to read these first couple of pages and then you're going to skip to the end at page 85, you're going to read all this and then you're going to go back to the beginning again. Because this really does summarize a lot of the key components. The other one that I personally am a big fan of is number five, wealth has got to reside somewhere. Where would you prefer to have it reside? Now, you know, I'm a real estate guy. We have a lot of real estate investors who obviously get attracted to this concept as well, and people that we work with. Nothing wrong with real estate, but when you think about where the wealth is going to reside, where you want it to be, if you put it in real estate, take a look what happens when one needs liquidity. Real estate is very much a frozen asset now. Right now, at the time that we're having this conversation, people are experiencing that. You know, I had a client recently who very, you know, had a lot of variable rate mortgages, decent real estate portfolio. A lot of it was in the Ontario marketplace and there's rent control there. So she wasn't, she had long term tenants, which is great, except she wasn't able to keep up with the pace of increasing costs of property taxes and other things. So her cash flow got squeezed and then the lever of the real estate interest rates went the opposite direction and boom, she's in a negative cash flow position. So she'd been living off of this revenue, now she's in a negative cash flow position. She's in a position where she also, because the rates went up, it's starting to squeeze and impact the value of the, the appreciation of equity that she'd achieved. So it's, it's not that her equity is frozen, she could sell some of those properties, but it's, it's really created an issue for her where she almost is forced to sell to some degree. So that's not the position that we want to be in. So as a wealth storage facility, it's might not be the best one on the planet relative to the liquidity that you want to have when you need it. You know, Nelson talks about the stock market he has at the back of the book. And in fact, if you go to Nelson's website, he has a whole list of recommended reading about the stock market. Nothing wrong with the stock. Lots of people do really well in that category.

However, that whole list is right behind me.

Oh yeah, Jason's got the entire library back there behind him. It's not necessarily. And we'll do this. Everyone can see your library back there. Every, every recommended book on Nelson's in. Nelson's book on his reading list is literally behind him. It was an amazing, I think was a birthday gift last year, wasn't it Jamie?

It was, yeah, yeah, yeah.

So what's, what's interesting is just that we're talking about the volatility in that marketplace and if that's a wealth storage location, then the liquidity changes quite a bit on a day to day basis because markets could be up and they could be down. Nothing bad about it. But is that the place that you want to store your wealth? It might be a place you want to grow it. It might be a place you want to spend time getting educated so that you can become a ninja at, you know, some unique strategy there. But is that where you want to warehouse everything? Probably not the best thing. Now the last one on the list that Nelson talks about is free contract with other free persons, which is the basis of life insurance from this base of financial operation. So a base, financial operation base. It doesn't mean you know that you're, that everything is stored in there. You don't do anything with it. It means it's a place where you store it and activate it somewhere else in your life. You can do all the other things in life that you desire now. I think this is so beautiful. Free contract with other free persons. Insurance was originally created as a way to reduce risk for other people, to pool risk. That's what insurance is, it's pooled risk. So we have a risk as human beings that at some point in time we're going to stop taking air into our lungs and we can be talking about us in the past tense when everyone agree to that. So when that happens, there's clearly a risk, a financial risk that happens to the rest of the family members. And that problem was solved with insurance A long time ago. They said, hey look, if we pull a little bit of money in from everybody, not everyone's going to die at the same time. So we'll have a big pot, we'll bet that get that pot to grow. And every once in a while, when someone does die, who's a paying into this pot, we'll have enough money to make sure their family is looked after. So it really is one of the original social goods that was ever created because it was designed to solve a need. The general public demanded something to solve this problem and insurance was created. It's a beautiful system because it solves real issues for people. And coincidentally, when you get the right stuff, the participating whole life set up in an appropriate way. With the education that we're going through today, you can now take this vehicle, your knowledge, you can smash those things together and you can create peace of mind and financial prosperity through the utilization of capital throughout your lifespan.

Last point on page 85. What's really struck out to me is something that Nelson said many years ago. He said, you just don't have to play their game. And what he meant by that is he was referencing these tax qualified plans, right? You've got registered retirement savings plans, you've got 401ks, self directed Roth IRAs. And because I'm speaking to both Canadians and Americans in context of our talk today, you just don't have to play their game. Everything begins with the way that we think. And so if the government creates a problem, too much taxation, and then turns around and grants you an exception to the problem that they created by enabling you to store money inside of an entity that is tax qualified, aren't you just a little bit suspicious that you're being manipulated? If if these plans were all created under the guise of giving you a tax break, all the government really needs to do to achieve that objective in simplicity is cut taxes. Do you really believe that they want to do that in every single year that you file a tax return? Right. You're on the government's radar and so are your qualified plans. Respecting the truth that your money and your wealth must reside somewhere. Because money and wealth are two completely different things. Understanding that it must reside somewhere. If you had a choice. You pull up to a drive through and lane one says be on the government's radar. Don't be in A position of control. Subject yourself to volatility and the stress associated with that. You have no clue what the account value is going to be at any point in the future. And neither does anybody who sold it to you. Or store your money inside of an entity that's contractually guaranteed to grow on a daily basis. It can't go backward. You pay no tax on the buildup. You have a tax free windfall called the death benefit that shows up exactly when it's needed the most. You participate by being a co owner of that very same entity. And when a divisible surplus is created, it's paid out annually. A portion of it, a portion is kept on reserve so that we have ready access capital to smooth out any volatility. You get paid dividends. No taxable event gets triggered on those dividends. Your cash value grows daily and you have ready access to capital on demand, on your terms to take advantage of high caliber opportunities that track you down. And when you do that, the repayment schedule is unstructured. You control it. Just imagine the drive through window reaction that you would have. Let me take half a nanosecond to decide which lane I want myself and my money and my peace of mind in. That's what Nelson meant when he said, listen, you just don't have to play their game. There's so much financial noise out there in the world because of the the mainstream advice that just keeps getting pontificated over and over and over again. Hand control of your money over to someone else because they can do much better with it than you can. It's nonsense. It doesn't have to be that way, Rich. I can tell you from a place sitting in this chair of complete authenticity and honesty, we don't have to rely on a conventional bank for anything other than the convenience of debit. Did it happen overnight? Of course it didn't happen overnight. It was gradual and incremental. But we had a very specific objective to achieve and we didn't play their game. We became co owners of an entity that has never failed to produce a surplus. It's private contracts with a private company. I like privacy and I'm sure most people do too. Otherwise everyone would have their cameras turned on. So every remember, everything begins with the way that we think. And I can't overemphasize that point enough. Let's hop over to page 72. Sound good?

Let's do it.

So Rich, when Nelson talked about an even distribution of age classes, can you provide sort of a high level overview of what he was trying to get across. Before we get into the key points on page 72.

Yeah, I mean, I think it really boils down to the diagram that he's got here. This is, this is based on a forestry principle. And if you start planting, you know, you have a huge amount of land, you're going to start planting trees. The purpose of that is to cull those trees eventually so that you can have the lumber, you can sell it and you can have a very profitable business. Trees take a long time to grow. So you divide the land in the 40 compartments, a hundred acres each, and you plant these things at different schedules so that when you, you make cuts, you're cutting in one section and then you're doing that every couple of years so that you're creating a constant stream of cash flow and then replanting so that that grows for the next one.

Hey Rich, can I just add to what you just said because you illustrated probably one of the most important sentences on that page, dividing the land into 40 compartments. I want you to think of each compartment as a life insured.

Yep, it's. Each one of those is another is another policy that you're acquiring in your system as you, as you grow and build over time. It's not something that happens. So if you were going to, if you had this land and you want to turn into something productive because otherwise it's just sitting there. It's not the type of land maybe that you can farm in any way. So forestry makes sense. This is a long term objective. This is something that takes 40 years to, to accomplish. But then you've created perpetual motion. As long as you maintain the system. That is, you cut the lumber, you sell it, you have an area to replant. You replant it so that in another certain period of time you can cut from that section again. Meanwhile you're cutting another section the following year. Replanting. Lather, rinse and repeat. Lather, rinse and repeat. And that's really what he's trying to talk about here. And so the purpose of this, you know, one, two pages is all about talking about grant grandchildren and turning in the same concept into this distribution of continual financial value as it rolls through Life. Here's page 72. And Jay, I know there's a number of pieces you want to cover here. I'm sure it's going to be, you know, primary along these, these advantages, but I think I want to really just hit on this diagram. This, this is a follow up kind of example using Nelson's forestry connection but now talking about how generations are buying on the, you know, grandparent, buying on the grandchildren, okay, now this person becomes the next grandparent and it's buying on the grandchildren. Then this person becomes the next grandparent, buying on these grandchildren and so on and so forth. So you're always creating this distribution mechanism that allows for efficient capital to be accumulated not just from, from, from the grandchild's perspective, but the grandparents perspective. They own and control that contract. They only pass it off in the way that they determine at the time that they go. But you're creating this cycle of constant motion effectively on money.

So well put. And these are things Rich, that over the years you and I can confidently say that when we're connecting with people and talking to them about their own insights from having read Nelson's book, so much of these key takeaways weren't grasped on the first read. That's why Nelson recommended that you read his book more than once. And in fact you revisit his book regularly because each time you see Infinite banking concepts, the more you see it, the more you'll see you didn't see. And when we talk about the family banking system and how to really put this in place at a family level, what gave rise to that was dealing with so many people insert here entrepreneur, real estate investor, business owner, individual husband, wife, joint venture partners, et cetera. They just didn't know for the most part that you can insure your kids, your grandkids, your spouse, your key people in your company. And when you think about family banking, the essence of it is to keep the money in the family. Because what we're taught to do mainstream wise is not to do that. And we share this all the time where you're sitting around the dinner table and you're maybe even telling your own kids this right now. Someday you're going to have your own mortgage, someday you're going to move out and start your own family, you're going to have your own bills. And you'll understand why we never talk about money at this dinner table. The bankers are standing out your dining room window going, keep going. This is exactly what we want you to keep doing. Keep the topic of money away from the family. Let us handle the motion and the liquidity and the control of your money because we can do much better with it than you can versus what the wealthy do is they say, well, you know, what we do as a family, we actually circle the wagons as it relates to money. We keep money in the family. We want the loans, the mortgages, the borrowing, the business acquisition, expansion, proceeds of sale, real estate growth. We want all of that money flowing back to the family, not flowing away. And in order to do that, you've got to think three generations past your own, which was one of Nelson's six golden rules. And in order to think three generations past your own, you got to start with your own. That's where it all begins. And so you've got to take care of getting policies in place and then thinking about everyone else in your life that you have a beneficial interest in so that gradually and incrementally over a period of time, you can ensure them that and you can grow the program so that you keep the money in the family. One of the things that we do in our own family as an a direct interpretation of page 72, is that we started our program, you know, with just one policy, right? And we've grown it to the point where now I think once underwriting is done on the last set of 12 that we had applied for, I think we've got all approved Tom, with the exception of one that's still in underwriting. But we're just gonna, we're gonna be just shy of 79 policies in our family banking system. And each one of those policies is growing cash value on a daily basis. We're utilizing the system to go about financing and controlling how we finance all the things we need in life. But someday, death will come. You and I were joking earlier, before the call, when Nelson said, would you believe that out of 1,000Americans alive today, 1. 1,000Americans are gonna die eventually? And so isn't that the truth? Every one of you who are on the webinar, you're gonna die someday. And when that time comes.

Sorry to be the bearer of bad news.

Yeah, sorry to be the bearer of the truth. And when that time comes, money is going to flow in the form of tax free windfall, death benefit. It replenishes the family. We extend loans, we do private lending, both internally within the family and externally outside of the family. And we have the gold. So we make the rules. That's referred to commonly as the golden rule. So we're not having to deal with any of the stress, pressure, debt servicing ratios, credit checks, income verification, all of that noise that creates stress, we are, are literally getting paid every single day to move money. Does that sound like a familiar character in the financial play, the banker? And the one making the most money, understandably so is the banker. And when you implement this process and you really, truly dive into page 72, and you understand what Nelson's saying here, that it covers multiple generations, it promotes long range planning. Underwriting problems are minimized because when you put policies in place on juveniles, there's no paramedical exams required. There's a tax free buildup of cash values over a long period of time. It never stops. If you keep insuring everyone you have a beneficial interest in the outlay is very small compared with the ultimate yield. Do you have any earthly idea how big my children and their children's policies are going to be when they're my age? They're going to be far bigger than the policies that Rebecca and I own on our lives today.

I thought for sure you're going to say, do you have any earthly idea how big like my son is? Because he's like 6 foot 9 or whatever and he's like a 14 year old giant. I thought that's where you're going with it.

I was just about to go there. Yes. Jackson, what an incredible kid. The generation paying the premiums can most easily afford them. And so think about it. When you have death benefit that flows to the next generation, if you don't transfer any of the knowledge on how to be a good steward of that and it's just a death benefit, the money's going to be squandered. But if you transfer the knowledge of a process along with the money in that exact order, you are going to keep the wealth in the family and the death benefit proceeds are going to be utilized to continue paying premium on all the current generation. And then the current generation is going to be responsible to leave the process and the money in that exact order behind to the next generation. They're going to be learning how to do this because this is going to be on the YouTubes and the, and the Internets and all that in perpetuity. So page 72, I'll just end with this. Passive income is assured, not hoped for. There's a big difference. Passive income is assured, not hoped for. Which lane do you want to be in? Hope or assured? Take your pick. I don't wake up wondering what any of the talking heads on the major news networks talking about the stock markets and political turmoil and the economy. All that I do is log on and trust but verify that my total cash value is larger than it was yesterday. Your family's net worth can go up every day just like mine, without risk. Believe me, you sleep a lot easier and your blood pressure actually goes down. That's proven. I'm living proof of that.

Man. There's just so much value in this book. But fundamentally, these two pages here, page. This is page 15 and 16 on the fifth edition of the book. The understanding and the, the, the constant rereading and the recognition of this particular section of the book is instrumental, I repeat, instrumental to your fundamental understanding and your implementation. So understanding is part of your journey of getting there, deciding if there's something you want to do, et cetera. Implementation is once you've made that commitment, you're going ahead, you're working with a coach, you're getting up and running, and on an ongoing basis, you want to make sure that you're abiding the rules and the principles of the grocery store that Nelson talks about. And the reason he uses a grocery store is because he wants to assess a business that you are both a consumer and a seller of the same thing. That's why you picked that. Well, in banking, you are also a user, a consumer and a seller, the same thing. You have to perform this function. Someone's doing it, and it can be you. Essentially. One of the things that I really want to highlight at the grocery store that stands out for me is Nelson spends a lot of time talking about essentially capitalization.

Don't mind my spelling here, but the importance of capitalization is so key. He talks about getting in a grocery store. Well, you. In order to do that, you first, you need to research what you're going to do, why are you doing that? What market are you going to be in? You need a building to get it done. You got to research where that building is going to be. You need to create, you need some capital or some investors. You need some way to have the dollars to go and acquire the land to build the building or to get an existing building and renovate it so that you have a nice grocery store. If you've ever been to a grocery store that was missing a whole bunch of items or it looked kind of, you know, dingy, it just didn't look like it was well cared for. What's common is that when, when you go to a space like that, you're looking for an item and they don't have it, and you go back again, you're looking for the item, you don't have it. That repeats a number of times. The brain says, hey, I should probably stop shopping at the store. They never have what I need. They, they don't have stuff on the shelves, so they're not stocked effectively. You might have to do it out of necessity, but the reality is you would generally choose to Go to one that's well stocked, well cared for, well lit, et cetera. And so Nelson says you have to construct a nice looking building.

Let's do highlighter here. A nice looking building, a nice property. It must be well arranged, attractive equipment, and it has to have everything in place so that people will actually come. Otherwise they won't, they won't come. You must stock it with good quality, attractively displayed and competitive prices. If you don't do these things, people will just stop attending. And if they stop going, the result of that will be your grocery store will fail. So Nelson's trying to teach us the important fundamentals about growing a simple business. And if you are in the banking business, you need to apply some of these principles of looking after the business, making sure it's well stocked. Well stocked in the banking business means you have capital access, means you're funding premium. It means that you're making loan repayments, you're, you're restocking the shelves. So as an example, you have, you know, he talks about a can of peas here. You buy a can of peas, you go to the till, you pay for it. That can is now gone. Doesn't matter who pushes it. Another can has to come from the back room, the storeroom. It has to land on that shelf so that the next shopper can see and buy canopies as well. If it's not being restocked or it's not being purchased and ordered and showing up on a truck in the back room, eventually you're going to run into a problem. All the people who want peas aren't going to be able to buy them at your store and they're going to stop coming to your store and your store is going to begin to fail. And that's what ends up happening in these situations.

Yeah, definitely. Here are a couple of key additional items from the grocery store example that are so important to understand. Nelson wants you to think about being both the buyer and the seller of the same goods. Right? Because everybody needs to eat, everybody needs to use some money. So if you go to page 16 and you go down to that bottom left paragraph, I want to expand on this for a second. Whether you're in Canada or the United States. So in Canada we have the Canada Revenue Agency, cra. In the United States we have the irs, the Internal Revenue Service. The mantras and postures are both the same. The more money you make, the more we take. So if you're just operating a grocery store in the, in the truest sense, the more money and the more profit that your grocery store makes, the more the government takes. And so that can create an incentive for the owners of the business to take the cans of peas out the back door. Because, hey, if we don't go through the front door and pay retail, then we're essentially circumventing IRS and cra. But suppose there was a situation, as Nelson went on to say, where the profits from the sale of your groceries weren't subject to income taxes. So when you create a policy or a system of policies, you're paying no tax on the buildup of cash value. Does that not create an incentive to never steal the piece, knowing that not only do you have a much more profitable business, but you're also going to, as Nelson would say, clip larger coupons when you get to passive income time in retirement? Because when you can get access to a preferred source of retirement income and you can do that without triggering any taxable event, how does that compare to the person who played the government's game and has all the tax qualified plans? Remember, you're a business owner. You're cranking up a business that never existed before. What business do you want to be in? Well, you want to be in the business where you can achieve maximum profitability and paid the least amount of tax. At least that should be your motive. This process of becoming your own banker is meant to ensure that you understand the advantages of not stealing the P's, the product, the entity is your store. That's your warehouse of wealth. That's where you store money. And so one person had typed in a really good question like, why would you want to have multiple policies versus just having one big policy on one person? Well, ask Costco. Why would they prefer to have locations in every major city center than just have one massive distribution center and retail storefront in Ontario? The reason is, is that there's a demand. And a business like Costco is showing up and putting up a facility where there's demand. Well, in your family and in your business, is there not an ever increasing demand? And if you have multiple lives insured, you're in a position now where you're not just transferring wealth without a warehouse to store it in, you're transferring wealth. And you already know that there are multiple warehouses to store it in. And those warehouses belong to the family versus if you just had one large death benefit on one person, that person gets on the wrong airplane or they trip, you know, on a banana peel in the grocery store and something happens to them, they pass away, they hit.

Really hard in the can with a can of peas. Yeah, it flies up and comes down. Gets them right in the noggin.

Exactly. Or they end up, you know, incapacitated, where they end up like talking to the ice cream in the frozen food section aisle of the grocery store. But when death happens that the windfall of money shows up. But remember, money must reside somewhere. Where are you going to put it? Your grocery store is gone. It's not in business anymore. So you want to have multiple locations so that you always have a place to warehouse the wealth.

There's another risk to that too. Jay, I want to highlight again the idea of one person, one policy that you lose that individual, hey, yeah, you're going to receive a tax free benefit. That's great. However, if you have this windfall of money and you want continuity on that for generations to come, now the remaining family members need to go and apply for the insurance to duplicate that event. And they may or may not be insurable. We've dealt with many people who have not been insurable and then it creates a problem. Whereas if we begin and we get people insured as soon as we can, or at least we lock in their health insurability, we're creating an option on their future tomorrows. And so that's another reason for multiple policies. It's not just limited to expanding the size of your system. It's also ensuring that we're creating the best possible outcome with uncertainty of events in life that do come about that do happen.

Oh, really good points. Couple of key quick takeaways if I may. You're creating a new business where no business existed before. You have to run the business so that it achieves profitability. If you steal the peas, you, meaning you access policy loans and you don't repay them, you're stealing. That's a polite description of theft. I don't do business with thieves. I know Richard. You don't do business with thieves and so don't steal the piece. And when you request policy loans, pay them back and put a little bit more capital back into the cash register of your own store. In other words, the simple interest that the insurance company calls for is a direct contribution to the net profitability of that insurance company that you co own. But if you put even just a little bit more capital back in in the form of premium, because that extra interest is not really interest, it's premium. If you do that, you create another shelf in the grocery store to put more products on for more captive customers. And if you go out the front door as the owner of the company, and you pay just a little bit more than your customers do at retail, you're building an even more profitable business. And when you go to sell that business at some point down the road when you die, your business is going to be getting a far better sale price when compared to somebody who didn't obey those same principles. And they have an exorbitant loan balance at death because they weren't paying anything back. And now the business sells for less money. So these are key takeaways that Nelson didn't expand on in the book, but we're sharing it with all of you because we were blessed beyond good measure to have been coached and mentored by this man for so many years.

One thing I just want to reiterate so your statement about the selling the business later, again, just imagine for a moment you want to go buy a business. When you're looking at a business, one of the first things you're going to want to know is you're going to want to know the numbers. How much money does this business make? And if you're looking at the exact same business, in this case, in the example is a grocery store, one makes more money than the other one, wouldn't it stand to reason that the one that makes more money or has higher profitability will go for a higher price point? It'll sell for a larger dollar, maybe even a multiple. That's what Nelson's really trying to help us understand by, by working with captive customers, family members, etc, charging them interest and, and storing that extra, the extra interest into those policies or additional ones, whatever's got room in your system. You're creating a leapfrog effect of additional future value that increases the capacity for every future thing that's going to happen, which includes the eventual death of some member of that family. And another thing I want to highlight in the grocery store we kind of almost glazed over this, is that the grocery store, Nelson really takes the time to explain what needs to go into creating and building that grocery store or acquiring it and starting it, etc. You know, you gotta get the land, you get the capital, you gotta buy it, you gotta build it, you gotta fill it, you gotta hire staff, you gotta pay them before you've even opened the doors and train them before you can even start to take in your first customers. So you have to pay for all that stuff back. And that takes a lot of time. He's talking about the capitalization not only of dollars, because when we say the word capitalization, a lot of times people are brain shortcuts and it makes an assumption around money or dollars. Yeah, capitalization is in many formats. One of the most important formats is time. Time, effort and energy. There's a lot that goes into the beginning of that process before you can even begin to start taking customers in. Who here has gone and attended, let's just say a university or college and went and got a college degree. So if anyone that's gone and done that, and even if like maybe you're a trade person or whatever, you know, I was a recovering electrician, you've gone and you've spent the time, effort and energy and the cost of dollars for the education while you were there at university, however many years you attended it for, did you get paid for the thing you were learning how to do or did you only get paid for that, that skill that you learned there, whether you're a doctor, dentist, lawyer, whatever it is you live, did you only get paid for that after you exited university and you were able to find a job in that vocation? That's all capitalization. You put the time in, you put the capital in. Whether you paid for it upfront or you're paying, making student loan repayments, whatever you've got to, that's all vested time and energy so that you're creating an outcome of the potential for a future long term revenue stream. Same idea as the grocery store example. So everyone should be familiar with capitalization because we all done it some point in time in our life, usually through time, maybe not as much in money, but it happens in both of those occurrences.

Oh, such a good point. And the essence is that Nelson wanted you to understand that once you grasp the grocery store example, the rest of becoming your own banker is ridiculously simple. But just reinforce in your thinking, don't steal the peas. That's another one of Nelson's six golden rules. Don't steal the peas. One thing I want to show Rich is the essence of Nelson when he talked about the fact that and he used a tree stump as an example. And I'll share my screen to show everybody what I mean.

I just want to grab one policy out of our family banking system and I just want to isolate some of the things that we've been able to do with that policy since 2012. And Nelson would always say when people would talk about, ah, you know, gosh, I'm going to own this policy and I'm going to own it for my lifetime. And this is going to take some time. And Nelson said, listen man, the time is going to go by anyway. And so when you're ahead 10 years, you know, 11 years down the road, my goodness, when you see what happens, the financial energy. And this ties right back to the grocery store example. So I'll just illustrate a key point if I can. Okay, so this is one policy and Nelson talked about in the grocery store example. He referred to a phenomenon in physics when he said, I think it was on my memory. Serves me right. What Was that, page 15? Yeah, the page 15 in the bottom left hand corner when Nelson said it all reminds me of a phenomenon in physics. Take a pail of water to seaside. I want you at sea level and heat it up to 210 degrees Fahrenheit. All you have is very hot water. But if you heat it up to 212 degrees Fahrenheit, you have live steam with unbelievable power. The steam engine changed the world, but it doesn't happen until you get past 212 degrees. Lots of heat goes into the process up to the boiling point, but the dramatic power comes on suddenly. Here's a sharp example of that. This policy was created in 2012. The annual premium payment is $20,000. The minimum required premium is $15,000. That wouldn't be the case today. The minimum required premium would be much less than that. But at the time Nelson said, work with what you've got. So the minimum required premium, 15,000. The accelerated deposit option or paid up additions, 5,000. I want you to see what happened over the years in this policy. In 2012, the policy began accumulating cash value immediately and continues to grow cash value daily. What most people don't understand, cash value is not money. Cash value is equity in the contract because the policy is a unilateral binding contract. Now, in 2013, at the first anniversary, a dividend was declared and paid. The policy grew, hence the tree stump. Nelson always asked the question, have you ever seen a tree contract? Have you ever seen a tree contract in size? It just continues growing. And each one of these rings represents one year of uninterrupted growth. And it cannot go backward. The second year, we took a family vacation utilizing a policy loan. Second dividend was paid, paid up. Additions were added to the policy. Third year dividend paid, again paid up. Additions grew. Policy grew in circumference. Cash value grows every single day. The very next year, another dividend, more paid up additions. We purchased a car the year prior. With a policy loan, we control the repayment schedule. The very next year we bought another vehicle. We dividends paid again. Paid up, additions added to the policy, family vacation, more dividends. You can see the trend. The policy never stopped growing. Here's where page 15 is highlighted. In my own real world policy example, when we started the policy on day one, we had a starting death benefit of $721,177. Eleven years in, the death benefit is now 1,159,939. That death benefit grows with every premium paid and every dividend paid. The total cash value was $4,500 on day one. It's $237,673 today, and it's going to be higher tomorrow and every day after that. The loan amount available is $213,906. When I deposit my next 20,000 in October of this year, the cash value growth for the one year, this one year is more than $30,000. So when you ask me the question, how does this compare or how does this combat inflation? My premiums can never go up. So I put 20,000 a premium paid. The annual increase of total cash value is more than 30,000. Does that not beat the pants off of inflation? That's more than 50% of what I paid in. This is Live Steam. This is what Nelson talked about when you get to 210 degrees Fahrenheit. So year four, year five of paying my premium, all that I had was really hot water. But the moment that the total cash value began growing at a rate that exceeded the premium I'm paying, that's live steam. That's 212 degrees Fahrenheit. And now here's the question I have for everybody. Just tapping into your logic. I want you to type your response into the chat window. When would I ever not want 20,000 of my money residing here? If I put $20,000 into this policy and the annual increase in cash value exceeds that 20,000, and it cannot go backward, it can't be repossessed, it can't be taken away. When would I ever not want 20,000 more of my money residing here? Never. Remember, everything begins with the way that we think. And some of you who are already practicing this process, I guarantee you, you either asked yourself or you asked your advisor, how soon could I stop paying the premium? That's like a business owner saying, how soon can I stop generating profitability in my business? It's illogical because everything begins with the way that we think. And the policy owner's behavior, in this case me, is far more critical than the behavior of the life insurance company, I can stop paying the premium in that policy. I could have stopped paying the premium in that policy four years ago, but yet I choose to continue paying the premium because my money and my wealth must reside somewhere. That's the key takeaway. And if you want to see exactly where our family banking system is at today, let me give you a little bit of insight. And I shouldn't say as at Today, as at March 3rd of this year, Nelson said that this is meant to be a system of policies. This is not meant to be a single policy. Here's our system. As of March 3, we got 63 policies, 20 lives insured, 76 policies. By the end of this year, we started with 16,800 a year in premium. This year we'll finish the year at 700,000 in annual premium. Total death benefit was 32,043,000. It's just shy of 33 and a half million today. Total cash value 3,064,507. It is significantly more today. Loans 664,000. That is also higher today. Loan amount available 2,093,000. Also hired today have in excess of 55,000amonth coming back to the family in the form of policy loan repayments. This is financial energy that we would have been transferring away from the family. So when you talk about why couldn't I just have one large policy on me versus multiple policies on a variety of lives insured? I just demonstrated that to you. Where do you want the families financial energy flowing to? Where do you want the businesses financial energy flowing to? Where do you want your joint venture financial energy flowing to? You want it coming back to an entity, a system of policies that you own and that you control. Isn't that good?

One of the key takeaways there, Jay, I'd like to highlight is around multiple policies. We also talked a lot about team teaching the kids and bring that up with them as well. Page 72. You want to make sure you're creating an education path there. Well, one of the things that works really well to help hone in and incentivize that education is the fact that there's a policy or policies available on your children. So the members of the family that are participating in this communal aquarium of money, the money is staying in the aquarium. In the low family system, there's an incentive that's automatically created whether it's known or unknown. It's almost intuitive by nature because there's a policy that children or members of the family, extended family, are going to receive at some point when you're gone or when, as these things transition. So they have, among other things that you've done in your family to help create that incentive for them to participate with the system. But that creates an, an automatic, almost intuitive connection and a reason for people to want to participate. So in the example of my family, my kids are younger, they're five and seven, so they don't know about insurance yet. They haven't, they haven't discovered those things. We're just starting to broach those topics, you know. Now to some degree they do understand that we have a family bank because the banking, the family banking system is where we access money and then we have to put it back in. They know those fundamentals and they understand, or they're starting to understand that at some point in time they're going to be able to access that capital at a later date. So, you know, we're keeping it fairly rudiment, rudimentary at this point. But I'm, I'm planting seeds with them all the time so that they understand that there's going to be a period of time where they're going to be responsible to look after that resource. And I was having a conversation with someone the other day about, about education, and they want to make sure they can provide for their kids, for their education. I thought that's great. I think that's a natural tendency for most parents. My vantage point of it is a little different. It's not that I don't want to provide for them, I want to provide for them, but I want to provide for them the knowledge and experience of what providing for themselves will look like. So that means when they want to, if my kids decide they want to go get a university degree and they want to be a scientist or whatever the heck it is they desire, I'll support them with that and the family system will support them with it if they've demonstrated the right capacity. But they will be responsible for paying those loans back. Now, I may decide after they've completed and got their degree and we celebrate all that wonderful stuff, I may say, hey, by the way, you guys knew that you were going to be paying all these loans back. We can set that up and, you know, you know, we'll work out a payment schedule and what that's going to look like. Oh, by the way, I've decided, hey, I'm going to take on half of it and I'll pay that back and you guys pay the other half. So there's things that you can do in that. But I want them to understand that they're going to be responsible for it. So they'll be committed to the process of the education that they choose, and they're actually choosing it versus thinking I can just do whatever I want because someone else is paying for it. It's going to create a tight incentive.

So good, so true. And being able to transfer knowledge of this process along with the money in that exact order is what's going to ensure that you follow Nelson's golden rule, his very first golden rule, which is to think long range, think three generations past your own. And this is exactly what we do in our family banking meetings, our family banking system, which in both Canada and the United States, you're going to see family banking summits and family banking programs where we're coaching families on how to do this and how to implement this in their lives. And so just some food for thought, something to keep in mind that as you begin with yourself, right, it's much like when you get on an airplane and you know, the announcement is made, like in the unlikely event of an emergency, oxygen masks will drop from the ceiling. Be sure to affix your own mask before helping anyone else. So you start with yourself and then you help your family. We are here to coach and help you through that. Through our family banking system, we have a whole method, a whole process that we are going to be providing you the opportunity to invest in so that you can bring this to your family. It's much like anything, when you make an investment in something, you're intentional, you have the intention of following through here.

Fundamentally, Nelson talks about, you know, the problem that everyone in North America faces. It's, it's who's the bank, you know, who's who they do in their banking business with now basically, and the, the interest earnings going someplace else or the potential interest capacity that they could be earning going someplace else versus to their family and where it belongs. And I specifically want to isolate the pattern of spending that Nelson, you know, talks about here in the book. And this is from a great deal of his own research. And you know, from, I suspect, I think if we did similar research today, we'd find the numbers very similar. But Nelson wanted to look at, you know, he called the all American young man age 30, making $28,500 a year. So he always said that you didn't need to be rich to get into the banking business. Now my name is rich, so that's okay. But he didn't say you didn't need to actually have a lot of like A really high income. In order to do this, what I want to isolate is, you know, he talks about the spending for automobiles. Roughly 20% of out of $100 that you, you make 20, 20 of those dollars go to service. Automobiles is, you know, often very common. And specifically the interest cost of those vehicles. Well, if you look at the graph, he's not talking about the interest rate, he's talking about the interest volume. You know, that's one fourth of that total line. So the total payment is the, you know, the tall bar and then this one is the actual interest component of that. So almost one quarter of every dollar spent is actually going towards interest. That's interest volume. He talks about the housing and the housing he's specifically isolating, you know, like the first five, five, six years of a mortgage. Because what's common even still today, although now with the rates rising, it's going to be a very interesting situation. What happens here in the next couple of years as people's five year terms and stuff in Canada begin to renew? A lot of times people are resetting or refinancing or breaking a mortgage contract. You move across town, you go somewhere else, you have a job opportunity, you add a member of the family, the house is too small, these types of changes take place. And then people are breaking those mortgage contracts and resetting them, often at a higher value because house prices have gone up or what have you. So this is the interest cost represented in that, in that housing allotment of, you know, 30% of your annual spending. Then he's talking about, you know, living, hey, this is your day to day living expenses and the fun things you do, etc. And the interest costs on that. So that's interest on things like whether it's the boat, the credit cards, the lines of credit, the things that you're using on a day to day basis and then we're talking about savings. Now in Nelson's example, he's trying to give everyone the benefit of the doubt. He says ideally everyone is saving 10%. Well, that's what we're told. So everyone must be doing it right. Well, in his experience that actually wasn't the case. He found a lot of people weren't, you know, saving 10%. It does range. Everyone's in a different situation. But what was really interesting about this is it says, look, if all we could do is eliminate this interest cost right here on the living side and we could go and move that onto the savings category, we would add 5% to it, to the savings. So if you're saving 10%, and you increased it by 5%. How much additional savings did you. How much did your savings rate go up? Boom, 50%, because we went from 10 now to 15. That's a 50% increase from the original amount we were saving. It's a huge, huge game changer for a lot of people. And then if you were able to take that, that power, that financial potential and begin to continue cascading it to create volume and velocity in a system or a warehouse that was efficient and allowed you to access it, Nelson's trying to teach us. That would be a really powerful example. So ultimately, this is. This is the part of the problem, is that worse we're earning the money and the money's disappearing to other people. We want to be able to harness and control that to create, you know, And Nelson uses an example of an airplane analogy. We want to be able to, you know, in this, this all American young person is flying into a headwind, and we want to start creating a tailwind where we can take these interest dollars and we can tack them back here into that savings value to create something larger and bigger for your future by controlling the circumstances, stance. Jason, anything you want to touch, add on to the problem?

Yeah, the. The problem is, is that you're doing all the work and everyone else is getting all your money. People ask the question, right? We get asked the question, like, how much money do I need to start this process with? Or what is a good starting point? Once you understand the problem, the solution will become clear and you'll know exactly what to do. And if it's true at present, which it is for everyone that we initially meet with, all your money is flowing through the books of someone else's bank. And the fact of the matter is that the only money that you get to spend is what's left over after income taxes. That's all that you get to spend. And so create the entity, the policy, or the system of policies, ideally with a mutual company. Understand the process, begin to simulate it by implementing. Okay, so we had step one, step two, step three, step four, don't steal the piece. Step five, repeat steps one through step four.

That's the basic understanding.

Isn't that good? Nelson taught us to understand the characters in the financial play. You've got the depositor, you've got the borrower, you've got the banker, who's the character that controls access to someone else's pile of money and sets the rules, right? Whomever has the gold makes the rules. And then you've got the bank owner who has an expectation of receiving proceeds called profit in the form of dividends or more ownership in the company. And so keeping those four characters in the financial play in mind, Tom, let's pull up page 45 and let's take a look at this example that Nelson created. And he, what he wanted to do is he wanted to isolate people who were saying, Nelson, listen, we don't need the life insurance policy as the entity. We can use guaranteed investment certificates or certificates of deposit. We can borrow against those and then we can achieve the very same objective which is to go about purchasing whatever it is we need to buy throughout our lifetime. And Nelson said, oh, okay, I understand you're a little bit concerned about loans, is that right? And people would say, yeah, as a consumer I feel like borrowing money is something that creates some stress. It's not something that I'm comfortable with. And Nelson said, okay, well why don't we take loans off the table for a second and let's just compare and we'll do this. In an example that I've named the twin sisters, we'll have one twin sister who's going to save money on the books of someone else's bank in a certificate of deposit. And that certificate of deposit is going to be guaranteed to earn 5.5% interest that is taxable and taxed at the highest rate. Twin sister B said, well, I met this guy named Richard and he told me that my money must reside somewhere. I understand the problem, the solutions become clear to me and I'm going to put the very same amount of money into a participating dividend paying whole life insurance policy. But I don't want to access policy loans. I don't like policy loans. And Rich said, well that's fine, just put your money into the policy. That's okay. Let's see how we make out. So each twin sister decides to commit $5,000 a year to the processed the program for seven years. In the first year, twin sister A, the certificate of deposit or guaranteed investment Certificate Sister, puts $5,000 into that product, that financial product, and a year later has got 5,200 bucks. That's really good. Twin sister B, who decided to go down the path of purchasing a policy from Richard, only has $1,933. So both twin sisters are out to lunch together and they're eating some of Carrie's amazing cupcakes and things that she bakes on our team. And the GIC certificate of deposit twin looks at the ibc, the infinite banking Concept twin and says, I think you need an immediate psychiatric evaluation. And that twin says, why is that? The other twin says, let's just compare balances. I've got 5200. You only have 1933. All my life I've been telling you I've been right about everything. Here's another sharp example of that. And twin sister who implemented infinite banking said, just give it a little bit of time. Because Richard told me about this whole instant gratification thing. I really buy into his philosophy. And I've rethinked my thinking. Let's just give it a little bit of time. So we go all the way out to year seven. They've been having lunch every year. And every year the gic, the certificate of deposit twin has been rubbing it in the face of the Infinite Banking concept twin saying, saying listen, year after year I keep trying to get through to you to tell you that you're absolutely insane for becoming your own banker. How have you become your own banker? And you watch the video that told you to be your own bank. I thought you bought an infinite banking policy. And the twins like, hey, look again, I'm just going to be aggressively patient. Let's see how we're making out here.

Aggressively patient. Is that a real, Is that a real. It sounds like a, almost like an oxymoron.

Well, that's, yeah, I utilize that. I utilize that. That's a copyright trademark, used by permission only. Jason Loey.

I just picture someone with a, with, you know, twiddling their thumbs with this like really frowny face.

Okay, so Rich, starting in year eight, what happens?

Well, in year eight, it's time to go and buy some cars. So the assumption here is that they haven't touched this system at all for the beginning. Because Nelson says at the beginning that you have to recognize human factors. You have to learn how to conquer Parkinson's law. Show me someone who will put money repeatedly into a system for seven years without touching it. I will show you someone who has conquered Parkinson's Law. So really important. That was one of the fundamentals. So both of them are going to do the same thing because they need to capitalize. They're building up something so they have a reservoir to work from that they can do in perpetuity. So here they go and buy their first car. And he did this all off a trade in package that was actually based on a Chevy Malibu that his wife purchased at the time. And so they had their existing vehicle they traded in at the dealer after the trade in amount was left the financing balance so that they would have been financing, would be $10,550. So here we actually aren't, they're self financing. So you can see that the balance of the account goes down here in both scenarios because the infinite banking sister also did withdrawals. Both are taking, they've built up their account value. Now they're actually, you know, the GIC sisters redeeming some of those GICs, pulling their value out. They're not earning interest on that value, they're paying cash for the balance of the car. And then they are each going to commit car payments for a four year period of time and they're going to put those car payments back back into the respective systems. So the IBC is putting it back into premium, the GIC sister is putting it back into new GICs basically each and every time. Okay, so they continue to repeat that process and if we scroll down we can see, okay, there's 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 vehicles that they purchase over their lifespan. Okay, and we'll summarize that in a moment. So, but the process is the same. Nothing changes. They only put their original $5,000 a year in. They stopped when they did that for seven years. They put 35,000 in original capitalization, they did withdrawals. They continue to be an honest banker and make car payments back to their system equivalent to what they would had to pay some other finance company. And they, they re, you know, quote unquote reinvested that or put it back into what they were using the GICs or the, the policy as premium. And then those values continue to increase. There's a couple interesting observations that we do need to look at here. Just take a look at the values in the account. At which point does the IBC sister have a larger account balance than the GIC sister? So here, 59,000 versus 48,000. Now you know, not everyone can see the entire screen, but I want everyone to just go and pan down and continue looking down and let me know at any point in time do you see the CD sister catch up. So once, once the IBC sister crosses that level, the other twin never catches up. She's ahead for the rest of time, for the rest of her life. That's the power of that live steam that Jason was talking about earlier and he showed us the example of his own family system. She never catches up. So it's really critical to understand that yeah, she was far behind for that first 15 year period. They started getting closer and closer. But it Wasn't until they hit the end of that year 15 where she overtook and then she began to continue on forward. So it's kind of like that, that old fable of the tortoise and the hare, if you guys think about. And in both of these examples, you know, again we're talking about something that's growing tax deferred here in the CD Sisters example, we're showing the net after taxes paid because there's going to be a, you know, a W2 or a T form, a tax form sent every year for that interest earnings, whereas the infinite banking sister isn't going to have a tax form in that format. And a question I have for everybody here. We don't know the number on it and it's not important about the number. I just want the question to go out. In both of these examples we're talking about the same capital flow, the same flow of financial energy. But what is the death benefit for the GIC sister the entire time? It's only whatever the account balances. The infinite banking sister has the death benefit plus the account value working for them. That's a really key distinct distinction I think it's important to make. So I'm going to go ahead and scroll down to the bottom and we want to summarize what happens here. I think this is going to be, this is kind of always where the rubber hits the road I think in this scenario. So the we go down to line 50, sorry, 51 I should say, and this is after they've made their final car payment. They've bought their final car. No more car purchases after this point. The CD sister has $259,000 of accumulated capital and the infinite banking sister has 964,000. So the gap between these two and I'll just round it is $706,000. That's the difference between the two people. But they did the exact same thing. They followed the exact same flow of financial energy. Both of them are going to begin the process of withdrawing our retirement income. They're going to take the same amount. Obviously if you've got 260 grand and then you're taking 50 grand a year out, you're going to deplete that balance pretty quickly. The earnings on that account will just won't keep up with the withdrawal rate that you have. So you'll see that the, the CD sister runs out of money. She doesn't even have 50 grand in that final year and she depletes her capital fairly quickly. Now one thing I want to isolate here I think is really, really important. Both of these twin sisters came out really, really well. They both self financed cars, they used a system, they practiced honest banking. They both created an environment where they accumulated the equivalent value greater than the equivalent value of all their car purchases. In other words, they had all the money that they spent on vehicles available to them in the account value or greater than. So they, they, you know, that's where we would say that they recaptured the cost of those, those vehicles. It didn't mean that they got rich buying cars. They still had to pay for those vehicles. Right? But the system created an environment where equivalent, greater than equivalent value was still stockpiled for them to utilize as a passive income. So both of these people did exceptionally well. Would you guys all agree if you.

Go right back up to the top, Rich, here's, here's something that Nelson wanted everybody to grasp in this example because he wants you to rethink your thinking. If you look at the GIC or CD sister, she is depositing that money on the books of someone else's bank. That bank has already been capitalized. It's already been in business for a very long time. So that's why she's got 5,200 after year one and 10,608 after year two, et cetera, et cetera. The infinite banking concept. Twin sister is starting a new business where no business existed before. She is paying premium into a life insurance company that she co owns. Her money must reside somewhere. So now if you scroll all the way down to passive income time, Nelson asked a very fundamental question. If you understand the four characters in the financial play, you've got the depositor, the borrower, the banker and the bank owner. His question for you is when you compare 964,000 to 258,000 at year 51, he asked what was the banker's reward for, for all of her effort, the difference between 964,000 and 258. Because the twin sister who's implemented the infinite banking concept without accessing a single policy loan just purchased a policy and stored money there. Practiced the concept to the degree where the money that she would have transferred away to someone else for a car, she's paying in premium, not policy loan repayment. What was her reward as a banker for that behavior? Because the policy owner's behavior is far more critical than the behavior of the life insurance company. And Nelson went on to say, if you can imagine for a moment if I introduced policy loans into this equation, the twin sister who purchased a Policy to implement the concept. How much better did she do? Because she's all four characters in the financial play. The twin who was just the depositor and the borrower. Remember, no loans, but you're always working with borrowed money because you're giving up the opportunity permanently to earn interest on it. The twin sister, who was only two of the four characters in the financial play, didn't make out as well as the twin who was all four characters. Remember, Nelson said, your money must reside somewhere. We're dealing with the exact same amount of input in money, but the output and the outcome is much different. Much, much different. That's what he was trying to get across in this twin sister example. Isn't that good?

And. And Nelson wanted to, you know, because he'd heard it from people in years previous, trying to explain this idea to people, oh, well, why would I go do this when I could just go do that? And people would really struggle with the word loan. We have a. People get a mental baggage connotation with words. The word loan being bad. Loans are bad. Loans are bad. Loans are bad. Well, no, that's not true. If you're the borrower, loans might be bad, but if you're the bank owner, loans is good.

That's right.

Loans are an asset. Every loan is an asset on someone's balance sheet. It's a liability on someone else's. So it's a matter of what side of the equation of the balance sheet are you sitting on.

If you have a bit of an issue, like Jim Carrey did, and me, myself and Irene, like you might really struggle with that being, you know, different characters, but it's. It's really just a way of thinking and it's a way of behavior. Your behavior is far more critical. The insurance company is going to administer this contract with no loan activity. That's exactly what Nelson is showing you here. So super, super important to grasp that and something that is often overlooked when people first read his book.

Well, I want to go further to behavior before we finish this, Jay, because here we. The key. The key behavior. There's lots of great behaviors here, but one of the critical key behaviors is this continual honest banker repayment schedule. These are. Both of these individuals are not stealing the piece. They're returning capital on a schedule at a regular basis to refund intentionally their pile of capital for the same purpose on a repetitious basis. This behavior of the car payments and recapitalizing to create the outcome for the next major purchase is one of the most critical components of the Behavior. That's what Nelson was telling us in the grocery store. So we're seeing an example of that here in this chart. Because if they hadn't done that and then they went, they wouldn't pay cash for this car because they have this big pot of cash. Well, their balance would have dropped to 34 grand. Yeah, they would have earned a little bit of interest. But then when they went to buy the next car, the balance would deplete and eventually that balance would go to zero, and they wouldn't be able to continue that process. So the repayment and the recapitalization for the next capital asset, the next thing you're going to acquire or the next major purchase is extremely important. It's integral to the fundamentals of what you're doing in life. Anyway, someone's going to get the flow of that money. The more intentional you are about it, the more capital accumulation begins to happen to your advantage. Yeah, God, I love this example. Talking about the income draw here, I think is really important. Again, in this example, Nelson's not talking about policy loans. He's talking about withdrawals. Here they both take out a retirement income. Obviously they both did well. They both got more than the capital they put in. One thing I really want to highlight, there's a summary here. Down here at these totals. If we add up all of the car payments and all of the original deposits, the $5,000 a year for seven years, the 30, 30 a year for all the car payments, the total amount of money in the capital inflows, the flow of money going into the system for each sister is $168,000. However, they used money, they did withdrawals, so they actually pulled out 116,000. When we do, as Nelson would say, the third great arithmetic, we take this number and subtract this number. The net amount of money that they have left in that system is 52, 2, 70. This would be their net real cost. That's the net amount of money that they still have tied in because they put it in and they withdraw it along the path. So They've only got 52 grand in this deal. Well, the very first year, they each take out 50,000. So pretty much they get almost all of their, their net capital back at that point, which means every year afterwards was all gravy. That's the, that's the advantage that they created in both, both of them for creating the system. So when we say recapture doesn't mean that you're getting the money back for the cars. You still had to spend the money in the cars. The car dealer got the money. Okay. But your system creates a capitalization impact over time where the equivalency of that money is available for you to reuse at a later date in life before you're dead. Oh, and if you're dead, well, the money's available then too, usually a lot more of it.

That's a really good point, Rich. And he also, Nelson also shared with us that the 50,000 for the. The twin sister who purchased the participating dividend paying whole life policy, the $50,000 coming out from year 52 onward, that was actually dividend withdrawals. And the total cash value continues growing because the total cash value must match the total death benefit by age 100 of the life insured in Canada and age 121 of the life insured in the United States. So every single day, the total cash value kept increasing. But what Nelson was showing is no loan activity, even in passive income time. He's indicating that the 50,000 coming out each year is just dividend withdrawals. Is he paying tax on that? Absolutely. But his philosophy was to say, Look, I'm getting 50,000. I'm going to take that money out in the form of a dividend withdrawal. I didn't do anything to earn it. I have no difficulty paying tax on money that I did nothing to earn. Had I introduced policy loan activity, then there would have been no taxable event triggered and the outcome in terms of the cumulative amount inside the policy, both while the twin sister was alive and when she died would have been much higher. So again, it's just.

And policy loan activity, or the equivalent of collateral loan activity.

Yeah. In Canada, collaterally assigning it tax rules wherever you live.

Now, one more thing I want to highlight because you mentioned a good point there. I'm going to scroll back up to the previous page. So on page 44, there's an addendum section that was introduced here. Now, my first version of this book, which I have in front of me also, it's all highlighted it. It didn't have this addendum. I had this page, but the page ended right here. So I actually had to rip that page out of another book. And when I went and got my book bound, you know, and you know, what do they, what do they call it when they put the COVID on? Anyway, when I went and had this thing bound, I inserted that page. So I had the copy of the addendum as well. And on the addendum again, he says right here that he would have recommended policy loans to buy those cars. And he goes on to explain that. And I think that's a really important piece of Nelson's book right here, is that there are only two hard, fast rules in building and in carrying out this concept in the building of it and the implementation. Don't be afraid to capitalize. The more you put in, the more you get back tax free. A passive income time. Don't make policy loans without making provisions for paying them back. That is the equivalent of stealing from your system. So a lot of people will do, and a lot of our clients, they'll do an amortization chart. We always recommend an amortization chart and a regular payment schedule. Maybe you're purchasing an investment or a business structure and then you're going to create revenue stream and that revenue stream is going to make the repayments, whatever that is, but have a clear intent of how you're going to repay that back. And you should have it documented because if you did business with a regular bank, you better make sure you can guarantee they're going to make you sign a whole bunch of documents, lots of them. So you should be prepared to do that for yourself so you can manage and track the commitments that you make so that you can be successful in this process.

I think that's really well put and it ties perfectly into, you know, dive in a little bit into the equipment financing example as well, because I think it's so poignant and so incredibly important. And before we do that, we can have just a brief discussion around the human condition and what is so, so vital to understand about the human condition that Nelson describes in the book. Yeah, understanding, you know, that there are some pitfalls in the human condition and the, the human condition or these, these human factors that Nelson talks about in the book. What's so important to understand is that we can't illustrate them.

Right.

We can't illustrate Parkinson's law, we can't illustrate Willie Sutton's rule. We can't illustrate, you know, use it or lose it. But it's really so important for people to have a fundamental grasp of what Nelson wanted us to take away from those human conditions. What comes up for you in all your readings of the book? What have you taken away from that over the years?

I'm going to give you an example, actually. It's something that Vern, Vern and I were on with our team recording a reaction video to some interviews with the University of Toronto that some of our team members did earlier today. And it was quite fascinating to hear people's thoughts on money. And Vern shared a story about some clients he spoke with here just this week where they have been proactively sending money back to policy loans and getting used to it. And the result is that behavior has actually been more and more money has been accumulating than they anticipated, because through the process of doing that, they're realizing that they're getting very focused on repaying their policy loans, and it's changed their behavior. And that behavioral change has increased their savings rate, the speed, the speed and the volume of saving that they're doing, because they're, they're almost gamifying their financial life to some degree. And the result of that behavior means there's more money staying with them than was previously just disappearing in their household budget. And those are things that are, you know, they're psychological in nature and, but they're, they're true. And they happen for a lot of people. And so these human behaviors have a direct correlated impact to your future outcomes financially. So the more that you hone in on practicing and implementation of good financial patterns and behaviors, and you can do that in the household setting, clearly you're going to end up with more capital than someone that didn't do that. And it's just a result of good behavior. So that is, we're seeing that with people where by implementing the process, sometimes as an example, you take a policy loan. Well, because it still has that word loan. And you may have a mental, you got some past world mental baggage with that word. Whatever it is, you know, it's there. And so in your gut, you know, you know what, I really want to pay that down. And so because you know you want to pay it down, you're spending less money at Tim Hortons, less money at this thing, at that thing. And you laser focus yourself on the objective of, of paying that down. And meanwhile, the cash value is going up. So you start to see, like, unique things happening in your world where suddenly more capitalization is taking place. And then opportunities begin to appear. Whatever those opportunities are. And those behaviors is what Nelson was trying to teach us about and how they overlap with one another. And then they begin to show up financially in your life because of the way that you're using it.

Again, this comes up. This is a human condition, right? What happens if I do a dump in? I'd love to see a scenario where you're showing that it all goes back to the human condition. I want it now. I just want to transactionally put something in there and then set it and forget it. That's not becoming your own banker. That's purchasing a life insurance policy with a single premium and then leaving it alone. So that has nothing to do with becoming your own banker. And it's one of the pitfalls of the human condition. You've got to understand the problem. You're doing all the work and everyone else is getting all your money, not just a dump in. You've got to read Nelson's book and then put it down for a few days, pick it up and read it again, put it down for a few days, pick it up and read it again. And if you understand the grocery store example, the rest of this is going to be ridiculously simple for you. If you don't grasp the grocery store example, call me and I'll talk to you about it. If you still don't grasp it, I'm afraid there's no helping you. This is not about dump ins and how we can sensationalize a policy illustration to show you that if you put a hundred percent of your financial resources into a policy on Monday morning, you've got nothing to worry about for the rest of your lifetime. That's not what we're describing here. I would encourage you to take those words dump in and dump them out of your brain and then develop a deeper understanding of this concept. When you do that and you really, truly understand the problem, the solution does not include dump in. And you'll understand exactly why.

Nelson talks about the importance of desire. It goes back to behavior. So I want to bring this up because we're having that behavior type conversation. Without that desire, you probably can't do it. And everyone is already spending all financial resources on what he or she thinks is best. There has to be introspection at this point, and a commitment to get out of financial prison must be a burning compassion. So this is where we recognize that people who are exploring this process, yes, you need to understand and learn about it. You need to do the homework to, to bring this in to make that decision. Is this something that you want to do? But you also have to get clear why it's important for you to do that by understanding the problem and, and then how that's really going to impact you going forward. And he goes on to say that it requires a change in priorities in life. In other words, adjusting your budget or your the way money's flowing through your life. That's where our coaches come in to help you figure out how to implement that in your specific situation. But then making the commitment to go ahead and start doing that so helping you find the money to begin the process of capitalization, etc. They mentioned finding a life agent or someone who's familiar with the concept. Of course we obviously someone who's authorized Nelson Ash Institute practitioner and in all probability those people will be familiar with the questionnaires and they'll be able to help you figure out how you're spending money in cash. This happens all the time. We find out there's things happening in people's budget where all of a sudden, oh well, what about this, what about that, what about that? And all of a sudden over the course of a year's budget, we find a bunch of capital that's flowing somewhere that could be redirected and repurposed for the concept while still being able to implement the usage of capital and other things in your life. It's extremely common. Our coaches are incredible at that. But the real reason I wanted to highlight this page is that it's going to take years to get started in commitment. And it's like developing a regimen of exercise. You got to go and see where you're at and you got to make a goal of where you want to be and then you have to put in the work. The coach can't exercise for you. Nobody can do that work. You have to do the reps, lift the weights, etc. To see the result that you want to achieve. That's what implementation is. Like Nelson said it was becoming your own banker, not someone else is my banker. That's already the case. We want to put you in the position of control where you are the banker, but it can only happen if you take on that commitment. The other thing I think is really powerful about this page, which I love, it's one of my favorite things. He talks about getting involved in a wealth club that meets periodically. Here you have the support of others working their way out of darkness. Be sure to include members that already have a track record of practicing the principles of the infinite banking concept.

We do that in our quarterly group client coaching.

It's so important you're learning together. This is how community is created in this environment. And our quarterly client coaching is a perfect example of that. And when we have our regular live events. Jay now that we're back to the live events in a post covered world, I mean in Toronto we had 200 people there. In Edmonton we had almost 200 people. In Calgary I think we had 75 people. So when we get people together in these rooms, relationships are created. You're going to bump in and meet somebody that that is, is going to inspire you or an opportunity is going to be created because of those relationships. It's so critically important to be involved in this community once you make the decision to get started and be a part of it. So again, a lot of great stuff here on this. And with that in mind, we can circle back to basically Nelson saying, look, this, this part of the book, page 65. He kind of says this is almost like the, the end of the book. But the remaining components are to help stimulate your imagination, to help you figure out how you can capitalize your system. So Everything past page 65 is extremely valuable, but it's really about helping you craft and think through the ways that you might go about by seeing some other examples, starting the implementation journey for yourself.

So good. And here's what we're going to do. Maybe at some point over the weekend might pick up their copy of the book and read it. If they haven't, if you haven't purchased the book yet, if one of our team members can put in the Ascendant Financial Bookstore, we'll courier the book right to you. But don't just order one order to @ minimum get the book in the hands of somebody who you think would benefit from the gift of what we do. We're going to do a whole session on the equipment financing example. So we're going to do that as a standalone session and Rich and I will do an in depth like this will be an overview of the equipment financing example that you have never seen to the extent that we are going to go in explaining it and it is going to be incredible. You're definitely going to want to come back and join us on that because it's going to be amazing. Rich and I are going to do a deep dive on that example that no one's ever seen. And it's going to be incredible. So thanks everybody, so much.

For.

Use of your valuable time.