The BEST Way to Pay Off Your Mortgage

This has absolutely nothing to do with investing.

This has nothing to do with rates of return.

This is all a matter of where your money is flowing to, who.

That money is being put to work for, for how long, and who's in a position of total control. Because I've got news. Interest rates rise, interest rates fall, Economies expand, economies recede. Inflation goes up, inflation comes down, taxes go up. Taxes never come down. The process of banking goes on, no matter what.

Congratulations for having your own home. Because as you know, the average person walking around today doesn't actually have their own home. They haven't really saved. They're living paycheck to paycheck. And the words mortgage free or becoming your own banker doesn't really mean much to them, but it certainly does to you. But the question is, are you making the progress you could be making toward paying off your mortgage and creating wealth? The progress that you could be making by doing it the smart way? Well, that's the first thing that you're going to know, how to pay off your mortgage the smart way, by implementing the process of becoming your own banker, the infinite banking concept in Canada. Now, a lot of times people hear that, they hear becoming your own banker, like what does that actually mean? Like, they're not really sure what that means. Well, it's ridiculously simple. Just think for a moment. What does a bank actually do? Well, they accept deposits and they lend money out to good people just like you, so that they can buy houses and do all that stuff. And the reason why they do that is because it creates a stream of very reliable, secure payments. Well, what if you could just do that all yourself? What if you could be the one who was issuing those loans? And if you were the banker in your life, then the capital, the payments that you're making today, the payments that are flowing away from you would be flowing toward you and your family and you'd have more access to capital so you could achieve more objectives. So that's really good. Now it's important to remember or acknowledge that everything begins with the way that you think. And when you can adapt to change and new ways of thinking, amazing things can happen. And that is the opportunity that you have tonight just to think differently.

If you think about anything that you do financially in your life, anything, whether it's buying a home, buying a car, paying your utilities, buying food, you've earned the income necessary to take care of all of those expenses.

The problem is that the banking system is getting all of your hard earned money. And so you're able to Take care of those things that you need to look after your family. Or maybe you have a business and you have office space or commercial warehouse space and you have team members who need to get paid. You have power bills that need to get paid.

You're doing all the work and everyone else is getting all your money.

And as it relates to purchasing a home, which for most Canadians, for most North Americans, that is going to be the single largest purchase that you make throughout the course of your lifetime.

And so my question to all of you, do you really believe that you're buying a home, or are you really making the wheels of the banking business and the real estate business turn in that order? Which one do you think it is? This is the original copy, my original copy of Becoming youg Own Banker. And this was authored by the late R. Nelson Nash. You're all going to have a varying degree of knowledge and exposure to this process. And so I'm going to take the first few minutes, I'm going to set the stage, pour a solid foundation. I really want you to understand the essence of the process. But what's super important to understand is that you are, I'm speaking to you, you are a character in the financial play. You just don't even know that there's a play going on, let alone you're acting on the stage. And you may not have any idea that you're doing it.

There are four characters in the financial play. The first character is the depositor. So if you envision for a moment so you earn an income, you receive a paycheck, and maybe a portion of that income was from T4 income. Maybe a portion of that was from interest income. Maybe a portion of that was from dividend income. Maybe a portion of that was from ownership in a business. And maybe you're accessing some equity from your business in the form of income. Maybe some was from a passive investment opportunity that you took advantage of. All of that income flows through the books of someone else's bank. And then when you think of all your expenses, including your mortgage, whether it's on your principal residence, on real estate, investment property, that money flows away from you. So if this represents the payment for that mortgage, all of that capital is flowing away, it's gone. And so it's not just about the amount of the payment, it's about the lost opportunity cost that that represents. Because.

Your payment is someone else's passive income. And the bank is not letting that money sit still.

The bank must keep this money in constant motion. If all I did, if I was a bank and I just took this money that was coming in from a multitude of depositors and I just let that money sit still.

I'm not going to have a bank for very long, especially in this inflationary environment that we're in. The money that I'm holding in my hands right now is going to be worth less tomorrow than it is today.

And so if you recognize that the problem is you're doing all the work, everyone else is getting all of your money. And you just don't know that there's a different way to finance the things that you need throughout your lifetime, including your principal residence or your investment. Real estate. There is a different way to go about it. We just understand how to control the use and liquidity of money better than you do. Same money. We just know how to control the use and liquidity of it better than you do. And I mean that coming from a place of. We want to coach you, we want to teach you on how to develop a deeper understanding of what it is that we already know. And I'll share with you in my own personal journey with the implementation of this process. So if I take you back to April of 2008.

That was right, right on the cusp, right on the cusp of that housing crisis, the financial crisis. And my wife Rebecca and I, we purchased a principal residence here in Leduc, Alberta. And when we purchased that property, this was before I was even exposed to the process of becoming your own banker. We were able to get a 40 year amortization on that mortgage. 4, 0.

We thought, wow, okay, this is terrific.

The interest rate was below 4%.

We thought, oh my goodness, this is fantastic. We have an incredibly low payment. The interest rate is low. We're moving into this home. We thought that was our lot in life. And so my objective was to pay off the mortgage faster.

And you know how I first got started doing that? Sit down. Make sure that you're not in a position to fall over. I started sending an extra $200 a month to the bank. So what I did.

Is not only did I send more money away from me to another banker than what the banker was expecting.

But I also essentially said to the bank, hey, don't sweat it. Don't go out of your way to find another borrower. I'm going to send you more money than what you're calling for sooner than you're calling for it. So I've covered two characters in the financial play. You're the depositor and you're the borrower. All of your income flows through the books of someone else's bank. When you need capital to buy a car, to buy a property, et cetera, you've got to go back to that very same bank that received all your income. I say that again, all your income. And then you have to apply to get access to capital to finance the things that you need throughout your lifetime. The third character in the play is the banker. The banker determines who gains access to capital and what the repayment schedule is going to be and what the terms of that access are going to be. So you're the depositor, you're the borrower, and the banker determines who gets access to money, what the repayment schedule is going to be. And then the bank owner who got a group of people together called stockholders who became co owners of the bank, they got that bank going. Now the stockholders, in order to have an ownership interest in the bank, they had to buy stock. So they parted ways with their money. And then in order for the bank to function as a bank, does the bank need to rely pretty heavily on the first two characters in the financial play? If all there were was character three, the banker and character four, the bank owner, if those were the only two characters on stage in the financial play, we wouldn't be talking tonight to anybody. And banks could not operate. Banks requirements depositors in order to function as a bank, which is a deposit taking institution that creates money where no money existed before, lends money into existence.

And so what you want to do is you want to become all four characters in the financial play. Now I'll ask you this as it relates to your mortgage.

When you purchase that property, principal residence or investment, real estate. What character in the financial play applied for the mortgage? The borrower applied for the mortgage. What character determines who gets approved?

What character determines the mortgage repayment schedule and the terms?

What character is doing all the work to earn all the money to make the payments?

What character makes the payments?

What does the banker do with those payments? Creates more loans.

Because the bank cannot lend unless the bank is a deposit taking institution. Makes sense. So which character in the play is unimportant? Not one of them are unimportant. All four characters are of vital importance. That's how this whole financial system works. Now what character makes the most money? The bank owner. Now I want you to think about something because everything begins with the way that we think. That's what the late R. Nelson Nash, our mentor, shared so often. And it's so true. If the whole model of housing and Mortgages was created for the banks. And then the banks turn around and use language with you like home equity. I want to ask you this question. What rate of return do you think.

The banks are making.

Compared to the rate of return you're getting on your home equity? Which entity do you think is making a much better return? Because I've got something to share with all of you. You're earning a whopping 0% on your home equity. Because my question for you is who that is. What character in the financial play actually has the equity? The bank. And so what you think is there isn't really there. And when I was sending that extra 200 bucks a month of my own money to the very same institution that was already getting all of my money, I was increasing the margin of safety for the bank, not for my family, not for me. And the reason why is that I was not all four characters in the financial play. So how did I become all four characters in the financial play? The first thing I did was I understood the problem.

Because if I didn't understand the problem, the solution to that problem just wouldn't matter to me. Until you understand the problem, the solution just won't matter to you. You can see all the numbers, you can read all the books, you can watch all of our content. Until you catch this, the solution just won't matter.

And so I believe that it's a problem that you're doing all the work and everyone else is getting all your money. First step for me was understanding the problem. The second step, because the solution mattered to me, was to begin to implement the solution. The way that I did that is I began to build an aquarium of capital. Now, the tool that I used to build that aquarium of money is a dividend paying, participating whole life insurance policy.

And since 2008, we have since grown our family banking system of policies to a quantity of 62.

We started with one.

The moment that that policy was put into place.

I began to accumulate cash value inside of my own aquarium.

When I needed ready access to money, I borrowed against the aquarium on my terms, nobody else's. The money that I gained access to did not come out of that aquarium.

The money that I gained access to was money that was lent to me. And the money in the aquarium was used as collateral.

I deposited money into the contract in the form of premium. So I'm the depositor.

I accessed policy loans to get rid of the mortgage on my principal residence using the life insurance company's money. I'm the borrower.

I set the repayment schedule for every policy loan that I access. I'm the banker. I co own the life insurance company. As all of you can by becoming policy owners. That's your ticket to co ownership, is becoming a policy owner. And each year that the insurance company engineers a profit. I say that again, engineers a profit. I participate in that divisible profit in the form of a dividend. I take that dividend, I chunk it right into the aquarium. I pay no tax on it. And my aquarium keeps filling up with money every single day. I became the bank owner.

As I started to gain access to policy loans, which is the life insurance company's money.

My aquarium. This is my aquarium of capital. My aquarium. The insurance company said, hey, we're happy to lend you some money on your terms. This policy has a death benefit. So God forbid if the unthinkable happened to you, that's okay. This loan will be extinguished by the death benefit, and the remaining death benefit will be paid to your beneficiaries income tax free. But every single day that you're alive, your aquarium.

Is receiving more capital. And the next time you need a policy loan, nothing leaves your aquarium. You're borrowing against the accumulating value in that aquarium. So it took us seven years to get rid of the bank. That was a $426,000 mortgage. If we would have continued sending all that money away from our family.

To get rid of the mortgage, because we want to feel good that we don't owe anybody anything, which is impossible, by the way, unless you're homeless and destitute.

It took us seven years. The first person I called was the author of this book because he had been mentoring me. And I said, nelson, I've got great news. I got rid of the bank. He said, don't get too excited, son. You need to finish the original loan repayment schedule. You're just going to change who's getting the money.

You've got to be an honest banker, because if you don't finish that original loan schedule, all that money that you were previously sending to someone else's system is going to be consumed by your expenses. Your expenses will rise to find that new money. Don't let that happen. You got to finish the original loan schedule.

So.

I'm the banker now, right?

Is that right, Vernon?

You bet.

Guess what I do with all the payments that I send back to my system every month?

Let us know.

Do I let that money sit still?

Why would you?

No, Because I understand that if I.

Did.

If I did.

Then am I creating an advantage financially Or a disadvantage. Money that sits still isn't worth anything.

You've got to keep money in constant motion. So we would have gladly, had we not known about this process, we would have gladly continued to accelerate our mortgage repayments by sending extra money to someone else's bank so that they could create more wealth for the stockholders of that bank.

I can think of things to do that are dumber than that. It's not your fault because you simply didn't know that there was a different way. And what we're going to go into, case study, and we're going to dive deeper into. This has absolutely nothing to do with investing.

This has nothing to do with rates of return.

This is all a matter of where your money is flowing to, who.

That money is being put to work for, for how long, and who's in a position of total control. Because I've got news. Interest rates rise. Interest rates fall. Economies expand, economies recede. Inflation goes up. Inflation comes down. Taxes go up. Taxes never come down. The process of banking goes on, no matter what. So you've got to take control of this function as it relates to your needs, because someone must perform it. That person should be you. And believe me, it is ridiculously simple to do once you know how we talk to people every single day. I just want you to envision this for a second. So you really worked hard to earn all the money to pay off the mortgage. I want you to picture this. You're sitting down on that day.

And you know that that mortgage balance is zero. In addition to that is imagine that now the banker is out of your life. The mortgage balance is zero.

You've got an aquarium that is full of money.

To take advantage of opportunities that will track you down. High caliber opportunities. And you've got a permanent death benefit. God forbid if anything happened to you, your family will never have a bad financial day for the rest of their lifetime.

And they don't have to worry about a mortgage balance ever again. Here's the deal.

You can, you absolutely can.

Create the lifestyle that you want.

Or you can just continue reacting to the one that you already have.

I'm going to walk through a case study on how to pay off your mortgage the better way.

Which is the process that we teach, the process of becoming a banker. The case study that I'm going to show you, this is just one of many ways that we help clients achieve their financial goal. In this particular case is paying off mortgage. Our objective today is that you leave with full clarity on how this process can help eliminate Mortgage. But also, as Jason mentioned, if you haven't had an opportunity to read Nelson's book, you have an opportunity today to get yourself a copy. I'm going to start by sharing this from Nelson's book. It's a phrase by Will Rogers and he says, the problem in North America isn't so much what people don't know, the problem is what people think they, they know that just ain't so. And Nelson used to start all his 10 hour sessions and seminars on the process of becoming a banker with this message. So as we go through the case study, I would encourage everybody to rethink your thinking.

And focus on not just on the problem itself, but focus on your ultimate goal, the ultimate objective, which is to build wealth and be financially free from the crux of the banking system for yourself, your family, your business or anybody else who's dependent on you financially. So let's dive into the case study now, this case study. So I'm going to use these fictitious names. So Jack, Jill. So husband and wife. So Jack is age 45, Jill is age 44 and they have a little daughter, she's age 10. Now one of the values which is near and dear to us, Addison, and financial, is we empower through education. And what you're going through today is just one of our processes, one of the methods that we use to educate Canadians, individuals, business owners, coast to coast on the process of becoming a banker. The infinite banking concept. We have plethora of content on a YouTube channel which my team will share with all the attendees. We have plethora of content on a podcast channel. We have the best books on this process ever written that can be ordered from our bookstore. So we empower with education. So same same thing with Jack and Jill. They came through an education process and once they really understood the power of becoming their own banker, they wanted to implement this process, but wanted to start by recapturing or paying off the mortgage. Now you may not be familiar with the word recapture, but as we go through the case study, it's going to become abundantly clear the objective is not to pay off your mortgage. That's just one step of the process. The real objective is to recapture the stream of payments which you're presently sending away to third party bank or finance companies on your mortgage. Because the real wealth is in recapturing those payments, not just paying off your mortgage. So Jack's income is $90,000 and in addition to that income, he earns a bonus from his employer which can be anywhere from 10 to $20,000. And I'm just using a median of $15,000 for him. Jill, her income is $50,000, a combined total family income, not including Jack's bonus that he receives based on his performance. So total Family income is $140,000 now, current debt. So, you know, when, when someone get introduced to us, it's important to make sure that they understand the process of becoming a banker. And once they do, and once we determine that there's a basis for us to work together, it's important for us to really understand where do you, where are you in your life journey when it comes to finances, how you set up from income, assets, liabilities. Because we need to understand where you are today, presently, financially and where you need to go, which are your financial goals so that we can structure the process of becoming a banker to help accelerate those goals for you. So for Jack and Jill, the current debt. So they have a mortgage, the balance is $320,000 nowadays. They started with $500,000 of mortgage balance 10 years ago. And just by virtue of them paying down the mortgage over the 10 years, the payment per month is $2,100. The mortgage balance now is $320,000. And then since 10 years ago, when they bought the house, the house is appreciated. So the free market value of the property is $600,000. Now they have a variable interest rate on the house mortgage, which is at 2%. Now, in addition to the mortgage, they also have a car loan, and the balance is $15,000. It's a 0% interest rate. You may agree with what I'm going to say that there's no such thing as 0% financing on car. It just built into the price of the car. But for this case, let's just assume that it is truly 0%. The balance is $15,000. The monthly payment that they're making is 500 bucks. And in addition to that, they did some renovation on the property and they put that debt on the credit card. The balance on the credit card is $10,000. The interest rate at that time was 15%. The minimum payment that the bank wanted was interest only, which was $125. But the actual payment which they were making at that time was 300 bucks per month. So principal and interest. So these were some of their debts. And then.

It'S important to understand their goals. So their goals were simple and the goals were like any other Canadian. They wanted to accelerate the mortgage payoff because they wanted to be absolutely free of those payments. They wanted total and absolute Control when it comes to finances, on their cash flow, because they understood.

The whole objective of being your own banker, which is to achieve total and absolute control on things that you finance in life going forward. And in addition to mortgage, they wanted to reduce their other debts, like car and credit card. They didn't want to lose access to capital while achieving their goals, because if an opportunity came up for them, they wanted to have access to capital available to capitalize on opportunities, because opportunities don't wait.

Right.

So access to capital was key for them. And then they wanted to build their wealth going forward sustainably and predictably without having to risk their without having to risk the wealth to temperamental stock market. They want into investment or into risk of any kind. They wanted to build their wealth sustainably and predictably. And then obviously they wanted to achieve all that via the process of becoming a banker, the infinite banking concept.

So I'm just summarizing. So with the mortgage, with the car, with credit card, the total debt the family has is $345,000. And the total payments that they were making on all Those debts were $2,900 per month. Now, if you are an existing client, you know this, and if you are a prospect client, then you may or you may not know what I'm going to share. So I'm going to talk a little about cost. So there's two kinds of costs in transaction. One is called cost of borrowing, which is the interest rates on the loans. And the other is called cost of opportunity, which is the payment that you have to make on those loans, because those payments would have been working for you. Just because you made a decision to borrow money and make those payments, now those payments are leaving you. As Jason mentioned, you're doing all the work and the payments that you have today, someone else is getting all your money. So that's an opportunity cost on those payments. Now, for them, again, just breaking it down for you guys, a mortgage, the payment is 2100. The car payment is 500 bucks. Credit card is $300. And then the cost of borrowing, which is the interest rate is 2%, 0% in the car, 2% on mortgage and on the credit card is 15%. So this is the cost of borrowing, and this is the opportunity cost on the payments, because these payments would have been working for them or that money would have been working for them. But now it's working for someone else. They're doing all the work to earn that $2,900 per month. And someone else is getting all the money. Yeah, we Understand their objectives are being met, but the payments are being sent away from the family forever.

Now, Canadians rely heavily on borrowed money to purchase the things that they need today. So we talked about mortgage cars, the debt that they put on credit card for home renovation. In addition to that, we also borrow money for investment purposes, maybe for some consumer goods that we need to buy. We may finance televisions, furniture that we need for a house using borrowed money. We may finance kids education, and the list goes on. So we rely heavily on borrowed money to purchase the things that we need in life. Usually, and I'm not generalizing, I'm just speaking based on what I get from feedback from most of the clients that we see or meet. Usually the most important factor when it comes to consideration of borrowing money to buy something, usually the most important consideration is always interest rates. Yeah, I'm going to go ahead and buy this car because, hey, I get a really good rate today. It's zero percent. I know I need the car. It's zero percent interest rate. I can't go wrong with it. Let's jump in and let's buy the car today. Oh, the interest rates have gone down, let's go down. Let's go to the bank and borrow money and buy more investments. Most conversations are always around the interest rates. And the reason why that happens is because that's what everybody talks about, that's what the financial market.

Has taught us.

And this is something important that I want to share with everybody that Nelson Nash.

He spoke about this so many times on all our sessions and seminars, even at think tanks, think tanks that we attended.

Which we attend one time per year during the month of February in Birmingham, Alabama, Nelson's hometown. So Nelson kept reminding us everything begins with the way that we think. And then he encouraged everybody to rethink our thinking. Thank you to Jason Lowe. Courtesy of Jason Lowe. Nelson added this fifth golden rule to the to to the list of golden rules that he has. So it's not just about rethink your thinking. It's about building the ability to rethink your thinking. And the decisions regarding buying things should should be beyond just interest rate. Interest rate should not be a factor or a decision making consideration to borrow money to buy something. So access to capital, irrespective of what interest rate you're able to borrow that capital at, should not be the reason.

For you to take that money and buy things. The objective to access the capital should be based on your ultimate goal. And the ultimate goal is always to build wealth. Interest should not be the Factor, the factor should be, okay, how does this access to capital help me achieve my ultimate goal, which is to build wealth, which is to be financially free, which is to leave some more legacy behind for my children. Whatever. Your ultimate goal is to build wealth. So here are the steps that Jack and Jill took to achieve their goals. So first thing first is, and I'll expand on all these three steps as we, as I make progress towards this case study. So first thing first is they started with their policy and then they decided to flow as premium deposits into the banking system which is the policy participating different paying holder policy, the tool that is used to implement this process. So they decided to start with $18,000 per year in capitalization. And the reason why they did that, because they were looking at Jack's bonuses, the income that they're making presently, the money that they're setting aside, this work with their cash flow, that's their number. They decided because ultimately it's all about becoming your own banker. The keywords meaning your own, you will decide how much to put into your banking system and that will determine a good starting point for you. And then going forward you can do multiple policies. Jack and Jill will do more policies going forward. Now the ultimate goal or one of the goals was to pay off mortgage. So we're going to talk about, okay, how did we restructure their current debt? And then we use this policy to start paying down and recapturing debt which is going to be part of the execution plan for ibc. So three step process for them, starting a policy, restructuring the debt and then executing the plan. So step number one, starting a policy. So their premium was $18,000. Now the way the policy structured is the minimum premium that the insurance companies need per year is $5,000. So basically what that means is in case they run into some financial difficulties, they're not obligated to put $18,000 per year into this particular insurance policy, which is what we used to implement this process. They can reduce their premium down to $5,000 and then bring it up to $18,000 when things are back to normal again. So this big flexibility built into the policy. Now the total debt that the family has today, so on mortgage, car and credit card, combining all that, the total debt is $345,000. So you can see the starting death benefit is almost equal to what they owe in terms of mortgage. So God forb to happen to Jack. So this is a policy on Jack. All that money will be used to pay off the debt and Jill won't Have a bad financial year. Now, this is just where the gut started from life insurance standpoint. They also have additional term insurance in place from other carriers. But this is just a starting debt benefit on this policy. And going forward, every year, the death benefit will also increase. That is how we structure these policies. Now, as Jason mentioned, the tool that we use to implement this process is called participating dividend paying whole life policy. So here's some of the attributes of the policy. So dividend paying whole life insurance can create a peace of mind and unmatch financial security. And here's how there's cash values in the policy. So as Jack and Jill put in the premium and you'll see how much cash values they have available immediately and what the growth in their cash value is every day. So this policy has cash values and cash values accumulate right away. So there's access to capital right away from the policy. In addition to that, the cash values in the policy also grow on daily basis based on contractual guarantee. And the contractual guarantee is that by age 100, cash values in the policy must match death benefit. So Jack and Jill, they just got started with the policy. They put in the $18,000, their death benefit is $330,000. And then going forward, every single day, their cash values is going to increase every day because it has to match the death benefit by age 100. So Jack is 45 years young when he's starting the policy. He's going to be age 100 in about 55 years. So as he capitalizes the policy every year going forward, his cash values in the policy till the end of time, till next 55 years, can only go up in value irrespective of what happens in the financial entertainment role. Because there's contractual guarantee in the policy which stipulates that by age 100, his cash values must match death benefit. So the stock market goes up, cash flows will still go up. If the stock market goes down, the cash values will continue to increase. Because it doesn't matter what happens in the financial independent world, the policy can never be less than what it is today. Every day he ages, he has more cash value and he has easy access on that growing pool of capital. And as Jason mentioned, he can borrow against his growing pool of capital as a loan directly from the insurance company. And when he access that money as a loan, there is no qualification, there is no income check. In fact, there's no even consent or obligation to Jack in terms of repayment on that loan. Jack, as policy owner, controls the repayment terms of that loan. And you're going to see that in a bit how much he was able to access and how he used the policy to accomplish one of the goals that they have, which is to pay off the debt. Now it also provides the death benefit. So again, nobody has a lease on life. We all have our best before dates. We just don't know what that date is. God forbid something was to happen to Jack, there's a payment of that death benefit and that death benefit is always paid tax free, provided we structured the policy the right way. And that's how we do it. So there's payment of the death benefit for additional benefit for the family from protection standpoint.

Now, when Jack and Jill, when they are ready to initiate loans against the policy. So here's some important facts on policy loan. So policy loans do not impact the daily cash value growth. So cash values grow every day because it has to match the death benefit by age 100. So when they access loans, their reservoir of capital, their wealth called cash values will keep increasing every single day. Loans will not interrupt that because insurance company is still on the hook to fulfill their contractual guarantee. So policy loan outstanding will not impact that growth in the cash value. Now policy loan outstanding does not reduce the death benefit while they're alive. So the death benefit in the policy, the wage design, if the premium is on annual basis, the death benefit will increase every year. So every year the protection value goes up, the estate value goes up. And if that occurs, or when that occurs, any outstanding policy loans get deducted from death benefit and the family gets the remaining money. But while they alive as they access policy loans, the death benefit can never be reduced.

Now, the policy loans do not negatively impact their future dividends. So again, Jason talked about four characters in the financial play. The depositor, the borrower, the banker and the bank owner. So they are the depositor because they're going to deposit their premium into their policy. And they are the borrower because they're going to be borrowed borrowing loans from the insurance company against their cash values. And when insurance companies become profitable, they in addition to anybody who has a participating dividend paying whole life policy is entitled to that profit. And policy loans, if you have a loan outstanding, it's not going to negatively impact your dividend. There are certain companies which if you do a policy with them and you have a policy loan not standing it will or it may impact your dividends. And we don't work with those companies. When it comes to implementing the process of becoming a banker, so many things have to be Considered the right company, the right policy design and the coaching that goes in along with the policy from our team. So there are many factors that we consider before placing a policy. Now, the policy loans also do not show up on your credit report. So a loan not standing is private loan between you and insurance company. It doesn't show up on your credit report. It's private. Keeping things private, even, especially in the environment that we are in today, is very, very important at that. Any outstanding policy loans are deducted from the total death benefit and the family gets the remaining money.

Now here's their policy. So on day one, so the moment Jack puts in $18,000 of premium deposit into the policy, immediately, this is his cash values in the policy and then this is his death benefit. This is just a starting death benefit and the death benefit will increase. Now, cash values are going to grow every single day starting day one. So this is the daily growth in the policy just in the first year as they get started and as time goes by, as years go by, the cash value growth every year will also become better. So what does that mean? So if they put $18,000 into policy, the immediate cash value is $11,880. If Jack wakes up the next day, the cash values will be 11,880 plus the $5. So it'll be 11,885. If Jack wakes up two days later, his cash flows are going to be 11,080 plus $5, plus another $5. Because every single day at Jack's ages for the first year, the cash flows will increase every day by $5. Now how do we know that number? You know, we've done many, many, many policy designs for clients. So with a very close degree of accuracy, we know what the daily growth is going to be just in the first year. And every year going forward it's just going to get better. If Jack doesn't wake up one day, then this is what the family gets just in terms of starting death benefit. So they put $18,000 and this is the death benefit payout to the family, tax free. Now the death benefit, if the premium is paid annually, the death benefit will increase every year going forward. So when death benefit goes up, your cash value go up. Because by age 100, cash values and death benefit must match.

Now. So the first step in the process is to get them a policy, which we talked about. The second step in the process, which is the step which takes the most time, because this is when we do strategic planning, which is, okay, we have the policy, we're going to get the policy in place. Now let's look at how we can strategize.

The goals going forward so that we can use the policy for the objectives that the client has. So a lot of time goes into designing the strategy. So doing the policy is easy. Policy is the easy thing. Using and strategizing and coaching the policy, that's where all the time and effort is gone. And this is what gets gives us energy is to work closely with the clients to implement the strategy that we're going to put in place with them. Now, again, just going back to what I had shared earlier, just summarizing it a bit. So Jack and Jill so here's the current debt. So they have a mortgage, car loan, credit card. So mortgage payment is 320, car loan is 15,000, credit card is 10,000. And you can see their payments. So the total loan balance is 345,000. So if you add mortgage, car loan and credit card, this is the total loan balance. And then if you add up all the payments, this is the total payment, $2900 a month.

Now here's the so we're going to now be strategizing, okay, how can we perhaps restructure the debt.

Presently the way it's structured so that we can immediately add some more efficiency. And once we got the policy in place, then we can start working towards their goals. So total debt again is 345, 345,000. This is the monthly payment. Now the fair market value of the house is $600,000.

Now let's talk about restructuring the debt. Now this is what we do and this process called debt recapture. Majority of our clients are using policies for this purpose. So again, before we dive into implementing or executing the plan that we have in place for the clients, when it comes to the process of becoming a banker, we have to add efficiency to what they already are doing. Now, most of you on the call may already know this, and if you don't, well, great. This is an opportunity for you to learn something new. So there's just two types of loans that can be registered on a house. So you know you can register a mortgage on your house. Now, mortgage is your traditional loan. And mortgage needs a payment of principal and interest. And there's an amortization schedule that you have to follow. Now the other kind of loan that you can register on your house is a secured line of credit by using your house as collateral. Even for the mortgage, the house is used as collateral. Now, the secured line of credit, usually on a house it goes by the name, the acronym heloc, a home equity line of credit. And usually on heloc, the payment that the bank needs is interest only, whereas in the mortgage is principal and interest. So again, I'm sharing with you how we worked with this particular client for their goals. This is a case study. This is one of many ways that a mortgage can be not just paid off, but also recaptured. Now here's the issue. So if you don't change what they presently are doing, it's an inefficient way to proceed with the execution of the plan. And here's what I mean. So again, I'm just listing their balances and the payments. Now if the goal is to pay off the debt and let's assume that they have $10,000 that they saved and let's focus on mortgage quickly. So the mortgage balance is $320,000, the payment is $2,100 and they've saved $10,000 and they want to pay off their mortgage. Now if they take the $10,000, they apply towards mortgage balance because they need to accelerate. The goal is to accelerate the debt. So if they keep making $2,100 a month payment on mortgage, it'll take them long time to pay off the debt. To accelerate it, they have to send more money to the bank to reduce their balance. So if they take $10,000 applied towards the balance, the balance will go down to $310,000 on mortgage. But here's an interesting fact about mortgage. The monthly payment is not going to change because of the way the product is structured. In this case, the loan is mortgage. So if they send extra money towards the bank to reduce their debt, they will reduce their debt. But the monthly payment is not going to change, which means they're not going to have any additional cash flow. What's going to happen is bank is going to reduce the number of payments they need to make to pay off the debt, but the monthly payment is not going to change. And that's the biggest issue, that's the biggest issue with how it's all structured presently for what they're doing. So we're going to talk about how we restructured the debt. And again, because one of the goal was to have total and absolute control on cash flow, that is why we worked with them restructuring the debt first. Now again, some of you may know this, some of you may not. So this is going to be, if you're not aware of it, this can be a great learning opportunity for you. Now the total Debt balance is $345,000, including mortgage, car payment and credit card, and the monthly payment is $2,900. The fair market value on the house is $600,000. And again, the loan to value against the fair market value of the house that the banks give you is about 80%. Now, according to the mortgage rules, 65% of fair market value. So you can see 65% of fair market value can actually be structured as a HELOC loan, a home equity line of credit. So 65% of $600,000 is $390,000. And if they needed additional capital out of their equity, the remaining 15% has to be structured as a mortgage so that the total loan to value ratio stays at 80%. So 65% is what they can actually structure as a loan. Now, if you are looking to buy a new house today, and if you put 20% of your down payment, the way you can structure your new mortgage or new loans on your house, 65% of the loan can be structured as a HELOC home equity line of credit, and the remaining can be structured as a mortgage. And you know why, as I go through this presentation, why do we have to restructure the debt.

Now again? So HELOC that we can access is $390,000. Total debt that they have right now is 345,000, including mortgage cards and credit cards. So we basically took $345,000 from HELOC and we paid off all the debt. All the debt to mortgage, car and credit card has been paid off using HELOC. So they still owe the bank $345,000, but they owe it to as a HELOC, not as a conventional loan where it needs a principal and interest payment. So they still haven't paid the bank, they're just restructuring it. They're adding some efficiency to this whole process before we execute the plan, using policies to tackle their debt. So the heloc balance is $345,000. All debts have been restructured on Hillock. Now, why did we do this? Why are we restructuring the debt? So here's the reason why. Now HELOC in most cases is interest only. Now I'm using a little bit high interest rate on HELOC, so it may get 2, 4% the way interest rates are going right now. So by taking all that debt and Putting onto HELOC $345,000 at 4%, the cost of opportunity or the cost of cash flow that the bank needs now is only $1,150, which is interest only. Now, if you recall, just on the mortgage itself, which was at 2%, the mortgage payment was 2,100 DOL. Yeah, the interest rate on mortgage was lower than HELOC, but the cost of opportunity or the cost of payment outflow was much higher in heloc. See, we have to pay the bank. There is no escaping it. Bank will need the money, but let's use some of the money today to grow before we send the money to the bank so that we net positive from the transaction. Now, we put all their debt to mortgage, car and credit card on a HELOC. And the original payment that they were making was $2,900. Now, the HELOC only needs 1,150. So 2,900 minus 1,150, that's 1750. That could be working for them versus working for the bank. Now here's another interesting fact about heloc. If you have extra cash and you want to pay off your heloc, you take your extra cash, pay off your heloc, the balance on HELOC will go down. And as your balance on HELOC goes down, what will go down with it is the payment that is required on the HELOC because it's on remaining balance. So as we keep paying down the heloc, we keep extracting more cash flow. And then the portion of the HELOC which was paid down, you can still access that money as a loan in case an opportunity came up for you. So you haven't lost control or access to capital. You're just adding some more efficiency to what they already are doing in this case Jack and Jill. So their opportunity is 1750. Now by restructuring everything. So as HELOC balance goes down, the cash flow increases and HELOC is read once. It also, they haven't lost control to access money, which was one of their goals that they shared with me. So just to summarize, so they started a policy. So we haven't really executed the plan right now. So the first step was to start a policy, which they have. They restructured the debt, they added some efficiency. Now we're going to look at step third, which is executing the plan of paying down the debt. But now all the debt is on heloc. It's not on mortgage, there's no car payment, there's no credit card. It's all HELOC now.

So step number three, now we are day one, we just started the policy when we just restructured all the debt. So we are day one. So we are on day one. We put in $18,000 as premium. The cash values immediately are 11,800. Now, what they can borrow as a loan from insurance company is 90% of the cash value. So loan to value and policy is 90%. So they can access 10,700 as a loan directly from the insurance company. And what they'll do is they'll use their cash as collateral and they'll put a lien on the death benefit for the amount they borrowed as a loan. So God forbid, in case the loan is outstanding and death occurs, they'll deduct it from the death benefit and the family gets the remaining money. The consent to repayment is none. The repayment is all structured by the policy owner. Now, when you're borrowing money, in this case, Jack and Jill are going to borrow money from the insurance company. There is going to be interest on that loan because remember, they're not using their money. Their money, their warehouse of capital is inside the policy, still growing every single day. They're borrowing against that money from the insurance company as a loan. And so the daily growth in the policy is $5 per day, which I had covered in the initial slide. So every single day as they took this money as a loan, their growth in the policy will not be interrupted. It'll keep growing every day, just in the first year by $5 per day. And every year going forward, it's going to get better, but there is going to be interest on that loan. And this particular company that we use to implement this process, this particular insurance company charges 6.2% simple interest. And you can see the daily interest because simple interest is charged on daily basis. So if you take 10,700, which is the loan that they taken, multiplied by 6.2% divided by 365, that's the daily interest. So see what happened on that particular transaction when they initiated that loan, Their pool of capital is still increasing every day by $5. And the interest that they have to pay to use insurance company money on daily basis is $83. So how they're doing so far just by initiating a loan. And I know one of the questions that got popped into a Q and A initially was, hey, what's the interest rate on policy loan? Well, now you can see real numbers, real facts. Here's the daily interest. This is the rate, here's the daily interest, and here's the daily growth. See, Nelson says it clearly in his book that the whole idea, the whole essence of practicing becoming your own banker is to recapture the interest that you're sending away to other third party finance companies. So when you borrow money from the insurance company and Jack and Jill, their daily growth is $5. The daily interest is $1.83. So they recaptured the interest that they have to pay to the insurance company in the growth of the policy.

If I say to you, give me $1.83 for every $1.83 you give me, I'll give you $5. How many times would you give me $1.83 now? All day long and maybe twice on Sundays. All right, so this is what transpired when we initiated policy loan for them. The question is, when they initiate a policy loan, where will the money come from to pay back the policy loan?

Well, here's where the money's going to come from. Their original payment to the bank was $2,900 per month. Once they had the mortgage, the credit cards and that car payment after the debt was restructured. Because the whole idea is to give the bank the least amount of your money. The whole idea is to keep all your money working for you. So after we restructured the debt on HELOC, the payment that the bank needed is $1,150 per month. So difference between these two is 1750. This is where the money is going to come from to pay back policy loans. It's money that was already flowing away from them. It's not that they're working harder now to start paying back policy loans. It was already there. Just by adding some efficiency and restructuring the debt, we are taking that money and we're just changing who is going to get that payment. Now it was initially leaving them on those things that they're financing now they're going to take policy loans and they're going to take that capital, that energy and put it right back into their own system.

Now one question that we get asked all the time is, hey, can they use a portion of that new found money from the cash flow to do more policies to create more banking systems? The answer is yes, absolutely. Yes, absolutely. They are in control. They can take a portion of money allocate to paying back policy loans. They can take the remaining portion, maybe crank up more policies. But let's assume for Jack and Jill, they didn't take that extra money to start new policies. They actually just took that money to start paying back policy loans. That was their biggest goal, is to gain control over their debt. And once they have more control, they may take that money and do more policies going forward.

So they're not changing their cash flow. They're just changing who is getting their money, which is the key. They're not working any harder. They're not taking on any risk. They haven't changed the cash flow. All they're doing is changing who is getting the money. Now let's execute the plan. So the HELOC balance. So now again, I'm going to repeat myself. There's no mortgage anymore. There is no car loan anymore. There's no credit card anymore. All those debts were structured into a HELOC. So the HELOC balance is $345,000. The minimum payment that the bank needs is interest only, which in this case is 1150. They took out a policy loan immediately, 10,000, 7 50. And then they applied it towards the HELOC. The balance on HELOC went down to $334,000. And here's something also happened simultaneously. When the HELOC balance goes down, the payment that they have to make on HELOC also went down. From 1150 per month, it went down to $1114. That's additional cash flow of $36 per month. They're going to take that cash flow and the extra payments that they were planning to pay back the policy together. Now they're going to start paying back their policy 1786 per month. Again, they're not working any harder. Just by adding efficiency and using this process, they're extracting more money leaving them and putting it right back to the system. They're using insurance companies money to pay the bank. Their capital is growing in the policy every single day. And just because they added some more efficiency in restructuring the debt, the extra money is now going back to their system. And that money is energy, which is coming back to them versus away from them. Now they continue to make interest payments on heloc. So this new payment on this new balance, they continue to make those payments every month so that the interest is not compounding. And then the cash values also keep growing every single day. So this is day one. This is what they did right away. Now let's fast over six months, because I want to show this to you in six months increments. So let's fast over six months. So after six months, the balance was still $334,000. And the payment that they were making was $1,114 a month. Now what they can access as a policy loan is $5,808. And the reason why they're able to access that money is because as.

Their cash values kept growing every single day because the loans that they had taken out the first time from the insurance company did not interrupt the daily growth of the cash value. So over the six month period the cash values kept increasing plus they were repaying back 1786 per month. So the total that they can Access now is 5808 as a policy loan. So they take that 5808, apply it towards HELOC balance. So you can see the HELOC balance went down further in six months and when the balance and he like goes down, the minimum payment that they have to make on the, on that he like to the bank also goes down. Now additionally they're saving about $56 per month because the original HELOC payment when they got started was 1150 because they paid it down in six months, the new payment is 1094. So now they have additional $56 per month which they've added right back into their own system. So now they're paying their policy loans back 1806 every month. So you can see in a matter of six months the outflow to the bank has reduced, their debt has gone down, they haven't lost access to capital in case an opportunity came up for them. Whatever they paid down on heloc, they can access that money. But importantly they've increased the inflow to their banking system. They added more energy and efficiency to their banking system. So this 1806 is now coming back to their system which is away from them and they continue to make those interest payments per month. They're not letting that interest compound because bank wants that. And the cash values kept increasing. So let's fast forward 12 months. So now we are going to be one year into policy and so 12 months in, so we're six months now we're going to go six months further down. So we're going to be 12 months into policy. And many things have happened because a year has gone by. They received a dividend and now they've remitted the next year's premium. So let's see how much they can access from the insurance company now. So 12 months in, here's the HELOC balance, 328,000. This is their monthly payment to the bank. And now they can access 18,124 from the policy because a, the cash values kept increasing $5 per day, that didn't stop. They were repaying back the money to the policy by using that extra money which we talked about. And plus they received the dividend and also in addition to that, they also remitted the next year's premium. So now they can access $18,000 as a loan from the policy. And they take that money, apply towards heloc. HELOC balance has gone down. And again, when HELOC balance goes down, what goes down with it is the monthly payment that the bank needs. And that gives them additional cash flow which they can add to their payments. And then this is what they're recapturing now, 1866 per month. That is the energy coming back to this system. So again, not working any harder, just changing who's getting the money. They continue to make this HELOC payment and then the cash values again always keep on growing. Loans do not interrupt policy. Loans do not interrupt the growth in the cash value. So now let's Fast forward another six months, another 18 months in working with us on this process. Now you're going to see what happened in the second year is that daily cash value growth has increased. It's not $5 per day anymore, now it's $8 per day. And the reason why that happened is because the death benefit in the policy increased in the second year. And when death benefit goes up, cash value growth becomes better because by age 100, cash values must match the death benefit. And this is the nature of the product, nature of how we design the policy. So 18 months in the HELOC balance is $310,000. The payment is 1034. Now they're able to access $6,318 as a loan from the policy. So they took that money, applied it towards HELOC. The balance goes down 318, $304,000. And when balance goes down in HELOC, the monthly payment also reduces. And now you can see they've extracted more cash flow which is coming back to their system versus away from them. So again, 18 months in HELOC balance goes down, cash values keep going up, they keep extracting more money coming back to them. They keep reducing how much they have to send away from the family. And they've reduced the HELOC down, which means if an opportunity came up for them, they can always access what they paid down to capitalize on opportunity. So they haven't lost access to capital, they're growing their wealth as they're paying down their debt. So how would you feel if this was happening for you where your debt balance was going down and your cash flows were increasing, which is your wealth. So you keep building wealth as your debt balance is coming down and then you have more money coming back to you versus away from you. Now we are 18 months in, we're going to continue with this process and we're going to go into six months further down. So we're going to be.

24 months in. So now the HELOC balance is $304,000. The payment is 1,013. Now they're 24 months in. So they start off year three, end of year due, they put in their premium, they receive the dividend. The cash value growth is much better in the second year than what it was in the first year. Plus they've been repaying the loans back to the policy every month. So now they can access 18,008, 18. And you can see now the HELOC balance came down to $285,000 and the minimum payment is much lower. Now it started at 1150 per month, now it's 950 per month. So which means there's additional $200 a month that they freed up, which is what they can add back into their system. So now what's coming back to them is 1950 per month.

So again they continue making that interest payments per month. The cash flow is keep increasing. Now, mortgage is an elephant.

And I know you will agree with me when I say this that the best way to eat an elephant is one bite at a time. So what we wanted to give you was a glimpse of 24 month period. And if they continue going forward, the process is going to work as effectively as it's been working with the last 24 months.

Now just to summarize, in two years, this was a starting loan balance that they owed the bank. In a matter of two years, their loan balance has gone down to $285,000. This is what they owe on the HELOC. Now because they've paid it down using policy loans, they've created 59,800 equity in the house, which is a difference between these two numbers in case an opportunity came up for them, they haven't lost access to that capital. The original payments that they were making to the bank, which was the money that they were sending away, was $2,900 a month. And after two years, the payments that they now are sending away from the family forever is 950. And the difference between these two is the opportunity which is working for them. They can take that money, keep doing the process, which is paying back policy loans. They may want to take that money, crank up new policies, new banking system, more wealth to add to the family. It's up to them what they want to do with that money. They're in total and absolute control.

Now. What else did they achieve in a matter of two years? They have accelerated the mortgage payoff, which is, which was one of their goals. They are achieving total and absolute control as years go by because more money is coming back to them. Their cash flow is increasing, their debts are going down, they keep building equity, so they're accelerating the total and absolute control in financial control going forward. They've reduced their debt significantly in a matter of two years. They have readily available access to capital on that HELOC in case an opportunity came up for them. And they are building sustainable and predictable wealth by implementing the process of becoming a banker. Because the cash value growth in the policy is a contractual guarantee by the insurance company. It has nothing to do with rate of return and stock market. So it doesn't matter which way the stock market goes, which way the inflation goes. You know for sure that your capital in this policy can only go one way, which is up. It can never be less than what it is today. And they created additional family protection by buying that benefit in the policy, which is in addition to everything that we talked about. They have achieved it without working any harder, without changing the cash flow, without taking on any risk, and without ever losing control over access to their money.

So going forward, so they're going to continue on this journey going forward, HELOC balance is going to keep going down every six months because that is the process, that's the plan that we have in place for them. And we're going to meet with them every six months to just touch base and execute the plan. Because life happens, if plan has to change, will change the plug. More payments are flowing back to their system, more payments coming back to you or assets. Money leaving you is a liability. So just by practicing this process, because the real asset is not the house, the real asset is a stream of payments. So by recapturing the stream of payments, they're converting that debt into an asset. They're increasing the financial margin of safety because their cash flows are increasing, cash flow is increasing, debts are going down, payments are coming back to the system. They created family protection by buying death benefit. And they have access to capital from HELOC in case an opportunity came up for them. And then every six months, as they take policy loans, they apply towards the heloc, they're increasing how much they can access from the HELOC also. So they're not cash deprived, they're not opportunity deprived. The cash values, their wealth Keeps increasing. The death benefit, which is the family protection, keeps increasing every single year going forward.

Now, the most important question that we get asked all the time is can you connect me with the right person on your team to take a look at how we can achieve being mortgage free the smart way going forward by the implementation of the process of becoming a banker. And the answer to the question is yes. And all you have to do is you have to text the word schedule. Text the word schedule to this phone number and you'll be invited to schedule a becoming your banker call. And at that call, don't break any money. There's. There's no money required. The opportunity is just for us to see how we can add value to what you're looking to get accomplished financially. And most importantly, if there's a good fit for us to work together going forward. Like I mentioned, and I'm going to use Jack and Jill in this example again, a lot of time is spent in planning the implementation of the process. Doing a policy is easy. So when we are committed on planning all this, we want to make sure that we are a good fit for each other because our relationship is going to be long term relationship. We're going to be with you every step of the way with the implementation of the process. That is where we get our energy from. Policy is a policy. It's just the best tool to get the job done.

You can create the lifestyle that you want or you can continue to react to the one that you have. And what advantages would this process represent for you financially? I'd love for you to think that. Rethink your thinking. What advantages would this process represent for you financially? Your debt repayments are someone else's passive income. Please read that again.

And to date our clients have accumulated $1,166,473,790 in total death benefit. And that amount is going up every day. $39,689,743 in total cash value also rising every day. That's changing thinking. That's changing lives. Do you think that a lot of mortgages are being paid off? That a lot of debt is being paid off? That a lot of money is now flowing back to these families versus flowing away? You can do this too. That's what we help our clients do every single day. Working toward achieving the lifestyle that they deserve, not one that they have to wait 40 years to accomplish. Hopefully start getting you the lifestyle that you deserve now.