The BIGGEST Lie About Retirement Saving Plans Exposed!

Can we all agree that words actually matter? Do words matter? The words that you use matter. Aren't we as investment advisors or financial advisors, we're in the financial services industry and they talk about compliance, and I just find it fascinating. We're here to educate people on financial literacy. There's nothing wrong with investing money, but if you invest money, you have to understand that there's a risk of loss. You can gain, but there's a risk of loss. So what's the benefit of putting money in rrsp, TFSA versus a policy if they're both tax deferred, slash tax sheltered? So that's a pretty loaded question, but I'm looking forward to diving into it a little bit. So is that a clear question, gang, really? What's a tfsa? What's an rsp? What is a policy? They're all just buckets, right? They're all just warehouses. They're warehouses for your wealth. It's a place to store inventory called capital. Keep in mind, I guess if we're just looking straight at a tfsa, RSP or a policy at this point, we're not actually talking about a process. We're not talking about the process of becoming your own banker. We're not talking about achieving really an objective based on the question. It's just like, what's the difference? Or what's the benefit of putting money in an rrsp, TFSA versus a policy? That's the question. There is no versus as it relates to storing money in a policy. Because I know that if I store money in a policy, I still can gain access to capital from that policy and I could still put money in a TFSA or an rsp. So I just have to start by saying that if I was going to put money anywhere, I'd first put it in the policy and I'd borrow it out of the policy and then go fund the TFSA or the rrsp. Not to say that I do that, but that's what I do. But if we're doing sort of a straight comparison, personally, I don't know. Do you guys like control?

I'll take control.

Do you like freedom?

Take freedom, too.

Do you like to have some say in the matter of how your capital actually performs? Is there any rule out there that says, hey, Vern, if you invest money in an RSP or if you invest money in a TFSA, or if you save money in a policy, is there any rule that says, hey, the more money I put in a tfsa, the More money I put in an rsp, the more money that's going to be there. Is that actually true? If you actually look at is it true, can we all agree that words actually matter? Do words matter? The words that you use matter? Yeah. Aren't we as investment advisors or financial advisors or financial professionals. Let's use that term because there's a lot of conversation around the title too. Let's just say we're in the financial services industry and they talk about compliance and all these kinds of things. And I just find it fascinating. We're here to educate people on financial literacy, if you will. And isn't there a key and a distinct difference between investing money and saving money? Can we agree now, there's nothing wrong with investing money, but if you invest money, you have to understand that there's a risk of loss. You can gain, but there's a risk of loss. Now this isn't 100% true. When you are putting money into a TFSA or into an rrsp, technically you can put it into like a cash account where it could be classified as savings. But generally speaking, when you're putting money into a tax free savings account, keyword being savings, and when you're putting money into a registered retirement savings plan, the money's not actually being saved, it's being invested. So right out of the gate. Personally, I like to tell the truth. And when I look at a TFSA and an rrsp, there's a lie right in the title. There's very little saving going on. It's being invested. Yeah, you can check out your risk profile. You can be, you know, conservative and all these things, but the reality of it is, generally speaking, the money is being put at risk. So that's the first thing that I would say. The differences and the benefits. I know when I put money into my system of policies, truly the more I put in the policy, the more I can access out of the policy. And my behavior of how that policy performs is more important than anything that the administer does. The life insurance company. Literally the more fuel I put into that policy, the more energy it kicks out. It's as simple as that. It's a true savings vehicle. So that that's what I'll kick it off to say. The benefits are one, I have a whole lot less control and influence over what happens and it's generally a investment accounts and the other is a true savings tool. Does anybody else have anything to add.

If I may ver? That's great. I love your point about investing because we all know there's a lot of market volatilities in the last few years, maybe in general overall. But I know that in the chat someone mentioned that you can put it in as cash or you can really save it. Nowadays with the gic, the savings interest rate is pretty high. Yes, you could do that in the vehicle like PFSE or rsp. But I also understand that life happens when you save money there, even though it's just there. But what if you need to use the money? What happened to that account balance? That's just a point that I wanted to ask everyone to think about.

Absolutely right, Ginger. And to be fair, I did actually say that you can save money in a TFSA and an rsp. I actually did say that. So you're absolutely right. Good point. So let's talk about that. Jinjin, let's expand on what you're actually saying. Just like I sort of mentioned like control and access. So let's assume jingen that, you know, you decide, hey, you know, I. I like consistency. I like guarantees. I'm going to put some money in this RSP or TFSA and I'm going to put it though in, in a cash account or in a gic. So a guaranteed interest type of account with some kind of term or whatever. So it's growing and maybe you keep it there and you roll it right back in. And you like that growth, right? But then like you said, give me an example of life happens, like what might occur in your life where maybe you need to access some of that money. Go ahead, Roman.

Maybe your car broke or something happened to your car as it happened to my car. You know, I was at the meeting in March doing presentation in general Saskatchewan, and someone decided to just spontaneously drop rocks on my car and my car was totaled and I had to come up with cash to actually buy a new car. Well, yes, I got some insurance money, but guess what? It wasn't enough. And I wanted maybe a newer car, right? So I had to come up with some cash anyways. Okay, this is a good example of like an emergency, right?

Or repairs an emergency. Well, hey, no big deal. Well, there's nothing preventing you from going and accessing money from your RSP or tax free savings account, right? Can you, can't you go do that? I don't see the problem.

Well, yeah, I mean, I technically can, but I don't want to pay too much tax because, you know, when I pull money from rrsp, then I have to add it to my taxable income.

Okay, so rsp. But. Well, what about the tfsa? You. You can pull money out of that tax free, right?

100%.

Yeah.

Okay, so Tan's like, oh, he, he wants to chime in. Well, I'm just, I'm just playing devil's advocate here, guys. Like, what, what's the problem? Like, you can pile money up in the TFSA and in the, in the gic, and you can pile money up in the rsp and Roman's car gets blown up and he just goes to the bank or wherever and he, you know, gets money out of the tfsa, and, and life is good, Right. What's the problem?

If I may, for myself, something that comes up, and we discuss this as a team a lot as well. Right. It's that you're not comparing the same thing to the same thing. Like, you're not. You're not comparing an investment vehicle to another investment vehicle when we're talking about the process of banking and using one of these TFSAs or RSPs to warehouse your wealth for investing.

Right.

It's not apples to apples, it's apples to oranges. Yeah. They're both fruits and they have something to do with finance, but it's not the same thing. What I mean by that is, in Roman's example, Roman, you were able to go into your system of policies that you've built up your banking system and get access to capital on your demand, and you were able to get that capital as cash into your account within three to four businesses, if I'm not wrong.

Right?

That's right. Yes. Right.

How long did the insurance company take to the car company take to actually go through the claims process and all that?

It took one and a half months to complete and to receive the cash proceeds. I mean, the insurance proceeds from mbi.

So that's the first thing that comes to my mind. Second thing that comes to my mind is if your money's in a tfsa. Yeah. If it's not in stocks and stuff, first of all, and you don't have to sell things off and be liquid as fast as possible, when you take that money out of the tfsa, when you go back to replenish it, the limit that you have, that you can put into it is dictated by who? Is it controlled by you or is it controlled by the people who created the tfsa?

Yeah, it's in control by the government.

Yeah. So that, that's what comes to my mind. It's like when you go to prison, you got to pay bail to go out. It's like when you put money in financial prison. You got to pay a tax or something. There's always a cash. That's what constantly, I've learned.

Nice. Sukman's like Mic dropping it. That's dope. Okay, so Sukman, that was a really good point. Well, Roman, we were kind of talking about something at the beginning of the call, and we were talking about growing capital, and I had mentioned, hey, like, when does money actually compound the most? And didn't we all agree that? Does it compound the most in the beginning or in the end? In the end. In the end. So when do we actually want our money to stop compounding?

Ideally, never.

Never. So if we think about some of these government programs. Actually, Henry can chime in on this one, but I'm not 100% sure with the TFSA, but I know with something like an resp. Something like a registered retirement savings plan, there's a timeline on those vehicles. And let's assume that the vehicle's actually growing and doing well. Well, it's going to get to a point where if you don't want to take it out, someone's going to make you take it out. So someone has the control, you're going to take it out on their schedule. And maybe I'm going to share another point here, but I would like to know what that looks like from a TFSA perspective, but I'm going to just share my screen for a second, gang. This is just for visual purposes. With these types of accounts, as you're building it up and you're accumulating cash in there, they start to grow. And then right as they start to grow and compound, right near the end, right as they compound the most, someone comes along and makes you kill the vehicle, makes you take out the energy. So here's what happens. Hey, Roman, it might not be a huge amount of money. I'm not sure. How much cash did you have to put forward to fix your vehicle?

Like I said, I. I got.

If you don't mind sharing.

Yeah, I got a quote for like 7,000. It was a very kind of fancy vehicle, but, yeah, 7,000.

No, I mean, seven grand is not nothing. So. So let's be. Let's be fairly conservative. What's a going rate right now for like a GIC? Is it. If I was conservative, I said 3%. Is that fair?

It's not even keeping up with inflation. I would say.

So this. For the purpose of this conversation, let's just. Let's just create A visual. This is all about rethinking our thinking.

Right?

Right. So. So a lot of times people think, oh, that's no problem. I got the cash. No big deal. I'll just. I'll just pay the cash. Right. But what we don't see, what we fail to see, to Sukman's point, if I. If I'm gaining momentum on this vehicle, if I've got it in that financial prison, I can pay the toll by pulling the money out. But what I don't actually see is the true cost of spending, the true cost of using capital. So if I have the $7,000 accumulated somewhere in some account, and I was earning just 3% on that money, let's say uninterrupted, for the rest of my days, because I never want to stop compounding my money today, I'll let the cat of the bag. You might not be able to tell with all this wisdom. I might look a little bit older. I'm 39 years young today, and I hope that I outlive this number. But we're going to lean on Statistics Canada. Statistics Canada says that I'm going to be around about another 46 years. Just imagine when I make a $7,000 decision today, when I spend that cash, I actually give up the opportunity to grow that capital. I'll never get it back and I'll never grow it again. So that means when I make a $7,000 decision today, I'm actually making closer to a $28,000 decision. And I could be leaving potential of almost $21,000 of growth from my future. I'm stealing from future Verne every single time I spend a dollar, and I'm stealing from the next generation every time I spend a dollar. And you don't see that. So we want to create an entity that will allow us to grow our money uninterrupted, but while still maintaining access to that capital.

I think it's important to recognize when we're taking advantage or people are using the jurisdiction of their. Putting their jurisdiction of their money into government programs like RRSPs, RESPs, TFSAs. There's some conditions attached to that money and there's an incentive to promote it, to bring it in for you to deposit funds into those program accounts. However, what is not emphasized enough is the access or the drawing of that money. And when it comes in rrsp, you're very much limited to only two. Two ways you can get money out of that which is approved by the government is if you're going to buy A home and you're limited to 35,000 which you have to repay over 15 years or for education, for lifelong education, which is 10,000 per year or 20,000 maximum. When it comes to the domain of where you're putting money, let's say into your family banking system, we already talked about, we don't have many restrictions in how we need to use the money. We get the choice. Roman in his case could use it for his car with no questions asked and you get to be the bank banker, you get to set the terms when you want to pay it back. That's a very big part of that element of control that we're missing. Same with like an rxp, the incentive on the outfront that gets marketed is you have, you put in at least 2500, you'll get a grant of 500. But what if your child doesn't go to the approved post secondary school? That 500 is actually not even earned yet until they actually go through that school. And I used to be a university instructor and part of my past life. The stories that I would hear and also when I was experiencing as a student, when you did a good job saving money in your resp, when you're trying to qualify for I'm in Ontario, an OSAP loan, they would look at how much money was accumulated in your resp and if you accumulated too much, the Ontario government wouldn't lend you any money. What happened to the people who actually had saved up too much in their resps? They would not get enough, but they couldn't get enough from their resp to fund their tuition. So they ended up having to work and that was an impact to the quality of their studies. When it comes to the AHA moments for some people, these government programs in a way is not as it's quite surprising for some people when they get caught with it when they want to access their funds.

How is banks investing our money or investing our TFSA or RSP differ from how insurance companies invest money or invest our premiums. Especially if you can use TFSA RSP for self directed accounts and control where it's invested. My question for you then, this process of. Now we're starting to talk about the banking process because if you put money into a self directed account for the purpose of investing it in something like residential mortgages or whatever, to have more influence over the rate of return that you're getting, that's really good. See the challenge with it is is that that whole process is called banking. And the only way for you to take advantage of any type of financial opportunity, whether that's going on a vacation at a discounted rate, if that's investing money in a really great private lending opportunity like a mortgage. So if that's taken advantage of any, any opportunity, if you need to move money from one place to another to take advantage of an opportunity, the last time I checked, the only way for you to do that is to use something called fiat currency. And just like the other example I was sharing, once you take your cash and you fund the RSP with it and then you flow it to the, the mortgage, the mortgage or the, the RSP or the TFSA might actually be creating a rate of return, but that's the investment that is growing. Where's your cash? Your cash is no longer growing because your cash was used to purchase the asset. We're not here to coach people to change what they're actually doing. We're here to coach people to become more efficient with what they're doing and change the, how they get things done. So how do you go about funding your rsp? You got to earn money and you got to deposit it. And then once you deposit it, it becomes an investment. The cash is gone. What I would first do is I would actually fund my banking system. I would build up my policy system. Now, the insurance companies, there's various investments that they put money in, and they're very, very conservative and they're grotesquely managed, okay? They, they can't take big swings in the stock market. They are 100% responsible to manage that cash, that cash in a way that they can fulfill in all their contractual obligations. And the most important one is that your total cash value of the policy has to rise to match your death benefit. Okay? And it's going to grow day in and day out. No matter what happens in the stock market, no matter what happens in the real estate market, it's going to keep going. And they've only been doing this for about 175 straight years in Canada. You know, they're just started. Here's the key. Option number one, build up your cash. Take cash, buy the asset, get a rate of return. You're happy. Option number two, take capital fund policy with it, grow your capital uninterrupted every single day. Borrow from system without interrupting growth on capital, fund the RSP and then go invest in your private mortgage. And now you grow the money and grow your investment in the private mortgage while your capital continues to grow. Again, it's not necessarily one versus the other. This whole process that we coach folks isn't like, hey, go become your own banker and buy whole life policies and don't do any of the other stuff because you don't need to. That's not what we're here to coach people to do. In fact, if somebody tells you that, turn around and run the other way we're here to do is we're here to coach you on how to put your money to work, how to put your capital to work, and then use that system without losing momentum on your money to take advantage of all the other opportunities that you're already good at doing. I didn't really answer the question about what's, where's the money invested versus one versus the other, because that second part of the question was really what was key. He said, hey, I can, I can self direct my investments, Vern. Like, isn't that better than putting the money in the policy? It's not one versus the other, it's one and the other. So now you're just going to get dual compounding.

Yeah, I think, I think that's really cool that you bring that up because Nelson in his book, right, he says the rate of return on any investment doesn't matter until you control the banking function. That's exactly what you're talking about, Vern. It's about how many times is your money working for you and like, let your capital work twice, if not more. That's a great point. Let your capital work twice, once in your banking system and once wherever you want to. It's called the infinite banking concept for a reason. It's infinite. You get to decide what you want to do with it. As you guys can tell, one hour doesn't do justice in terms of answering all your questions and also providing you with how much value we can and how much information we can. So what I'm going to do is actually share my screen very quickly. You should see both our great teammates, Henry and Richard here. So the reason why I wanted to bring this video up is Henry and Richard took the time to make this video and as you guys can see, it's almost an hour and 10 minutes long. Which tells you that just talking about this for 20 minutes or half an hour isn't enough. And a lot of people in the chat, they probably want to go further and deeper into the education about RRSP matching and more of the specifics of it as well. Right. And Henry, like, I'm not completely finished yet either. I'm still making my way through it. But I will say that I'M still learning a lot as well. So when it comes to talking about the arrival syndrome, even us as advisors and IBC practitioners, we are still learning every day. So I would invite everybody to maybe if somebody can, if you guys want, click the video, watch it and, you.

Know, go, go back to it.

Maybe there's a lot of information to it and you can't get through it all at once. But that's what I've been doing, going back to it whenever I can. And there's a lot of good gems that Richard and Henry have dropped here.

What are your perspectives on using policy loans to substitute for cash deposits into the first time home savings account? Considering the latter is promoted having similar benefits to a TFSA and rsp? Any negatives with this approach? So, first of all, I'm not going to say that there's any negatives or positives because I don't want this to be mistaken as any sort of advice. We're not here to give anybody advice because, you know, we can't do that unless we get connected with somebody and better understand what your objectives are and how, how you're structured financially and all those sort of things. The only thing that I would add to that is say that if you feel like, you know, you've done research and you feel like either the FHSA or the TFSA or RRSP or all of those are good vehicles for you to store capital, then that's great. But I think if I'm reading the question correctly, it says, what's your perspective of using policy loans to substitute for cash? While, you know, we've shared already at length what our thoughts are on that wherever possible, when I'm taking advantage of a discount, something I can get for a discount, where I'm taking advantage of something that is going to give me a good rate of return as an investment, or if I can access a policy loan to pay off or recapture third party debt that's taken money out of my pocket, I think that's a great substitute for cash because when I use my cash again, I give up the opportunity to grow that capital. So I want to use my cash to fuel my policy system and then I want to borrow against my cash value that's accumulating and I'd like to use the insurance company's money and put it to work in the fsaf, HSA or the TFSA or rrsp. Anything to add to that team?

I would answer a little bit more specific to the nature of the savings account. For first Time homebuyers. The name doesn't have it, but it's a registered account and when it's a registered account it has the attributes. Basically similar to an rrsp. You get a refund of the extra taxes you pay when you pay the government from source and then when you withdraw it or use it, then it is a taxable event. Now one of the things that people don't know is that you can actually have both of them with where an RRSP you want to use the first time home buyers plan and you have, let's say, funds in your fhsa, you actually can't use two programs at the same time. You're limited to one or the other, which is obviously the FHSA first. The other part is you can actually transfer money from your RRSP to your FHSA tax deferred in the same way it's still in the register environment with the government, so it doesn't trigger a taxable event when you're transferring it. But ultimately, when it comes to strategizing your capital towards acquiring a home, that's really where I think the question is coming from. That's more of a personal discussion between you and your coach to dive into the best and maybe most efficient source of capital to fund your first home and whether policy loan makes sense to do that. But personally I don't really see value in the fhsa. And you know, I've gotten my first home before utilizing it. So that's just my own personal perspective.

If I would want to pay the simple interest of a policy loan to the insurance company, is there a way to do that? This is actually a really good question, but the question basically is, can I service policy loan interest only? Because when you pay policy loans back, the principal gets hit first. Surely you can service policy loan interest, but you're servicing it in an indirect way. So what I mean by that is this. Let's say you had a $10,000 policy loan outstanding and now how the life insurance company calculates interest on those policy loans is they take the simple interest rate and let's just use, oh, I don't know, 6.5% as an example. They will multiply the total policy loan by the annual interest rate, which is 6.5%. So that means there'd be $650 worth of interest that would accumulate on that loan, assuming that you didn't pay anything back to the loan at all. Because the minute you pay any part of the loan, the simple interest rate calculation is going to be based on the balance. So if I paid $1,000 to my policy loan, they would look at the $9,000 loan and then the interest would would be based on $9,000, not the original 10. With that said, let's pretend in this example to keep it simple, that you decided not to pay back any of the policy loan for the entire year and you were going to go pay your next year's premium. So what we coach you to do, or at least what I coach my clients to do, is okay to service the interest. You're not technically paying the interest. You're actually just going to pay an extra $650 to the principal of the loan. And then when the interest compounds that year, the 650 would just be added to the balance and then it would bring it back to the original balance of 10,000. So the interest amount on a daily basis wouldn't change. So hopefully that makes sense. You're servicing the interest, but really in an indirect way. You're paying just additional principal and that interest compounds on top of the loan balance and then it just brings it back to the original principal and the interest calculation on a daily basis wouldn't change. So hopefully that helps. Surely if your premium was $10,000, you would just pay $10,650 and we would instruct the insurance company to add that $650 to the principal loan balance and then the interest would get added on top and bam, your loan balance stays level at 10,000. My employer matches contributions to an RSP up to 6%. Is there a way to use my portion to fuel my banking process, then contribute? I'm going to assume the answer is no, because they probably do your contributions just like directly as like a income, like directly from your income would be my guess. Unless there's some way that you somehow put the money in on your own or whatever. I'm not sure how that would work. It's a little bit complex, but I would assume the answer is no, because it probably is deducted at source rate when you get paid and they match it.

You know, at Ascendant Financial, one of the first things we love to do is educate you. We don't want to be the one doing everything or doing things for you. And it's important for you to learn if you want financial independence, to get more education around it. When your employer is actually contributing on your behalf, there is an equivalent taxable benefit that the government will charge you for in terms of your income. So if you are getting 6% of a match, as an example and Your salary is $100,000, you are actually going to be taxed for that year if you've matched the RRSP deduction 100 6000. Because 6006% is what it is being matched. So you are getting taxed at a higher tax bracket for that extra contribution into your RRSP from the employer at the same time when you are getting the employer to match your RRSP. Presumably, if you are trying to maximize your RRSP, which is 18% of your earned income, so $18,000, that 6,000 also counts towards that contribution amount too. Let's just call it the contribution to activate the matching is 5% to get 4%. And if you have a salary range in around here, here's the amount of taxes you would pay for that. That average tax rate in this example, if you were 50,000, would pay 20.89%. So 10 divided by 50 is 20.89%. 100,000, 26.35% of taxes is of that $100,000. Now, in Canada we have what's called a progressive tax system. So the more income you earn, whether you get a bonus or extra money on top of it, you're not actually going to be paying that 26.35%. You're actually going to be paying that marginal rate. So if you've got an extra $10,000 in bonus, you are not getting the 10,000, subtract 1 minus the 26.35%, you are not getting the 73,000. You are actually going to get roughly 1 minus of 33.89%. So you're only getting 6,600 of the 10,000. Because every new income you earn on top of it, you're not getting taxed at the older rate at the lower scale, you're getting taxed at the higher rate at the higher scale closest to you. So if we include that mechanism related to how the RSP deferral works, sorry, RRSP matching works. If I were to use that 5% again, I'm not really going through the details of the calculation. Your maximum annual contribution, let's say for 100,000, is 18%. So it's $18,000 if the employer is matching 5 if you are contributing 5%. So here's your 5% amount that you're putting in, that would be 5,000. If your employer is matching 4% is 1317, which, sorry, the deduction you would get is 1317. The matched amount is $4,000. The taxable benefit is $1,356. You can see, approximately.

Where it doesn't make Sense is around $100,000 and up the employer match. You're actually paying taxes today to get the employer match even though they're putting more money in because of that taxable benefit. Now if I were to just make it interesting, if you put 6% to match 6%, you're actually paying more taxes today to take advantage of the deferral to get the contribution into your rrsp. A lot of the most common things people talk about in terms of managing their budget, they'll look at like how much money am I putting towards entertainment or how much money am I putting towards vacation? And you spend all your time itemizing all of these things and what's really important, if you take a step back to look at things from the money that you earn and you break down who is getting all of your money, that actually makes things a lot easier for you to track. If you've ever taken a look at if you have a mortgage clearly or debts clearly the bank is getting a lot of your money in the form of interest. Because we live in Canada. A lot of that is going in the form of taxes and it's not just in the form of income taxes, but it's also spending taxes or gas carbon taxes or alcohol taxes, whichever taxes you do. The interesting perspective when it comes to taxes is you earn the income, they've taken taxes off of it and then afterwards now you want to spend the money and they're also making you pay taxes on spending the money. It's quite eye opening when it comes to the, I'll call it the system, the income tax system that is existing within Canada. And what I want to show is actually painting the picture of how much Canadians money is being spent towards taxes. So let's just take a little bit of a side journey because if it comes to interest it's the banks and then if it comes from taxes, it's the government and then how much of that money is remaining back to you. And part of these things that will happen when you go through this journey on becoming your own banker and you meet with our coaches like us, we go through this process of helping you identify where's all your money going, how can you keep more of your hard earned money? Well, you can start keeping it when you know who's taking it. So let's take a look at that. The first one I wanted to share with you was in 2022. This was how much taxes in that from income transfer taxes, whatever taxes that is being paid, 43% of an average family's income is going to taxes. And you know what the average family income is? It's about $100,000 on that 43%, 35% is what most people use to live. Again, this is across Canada, so in different regions this could be even more painful. In Ontario, taxes are usually a lot higher compared to other provinces. But this is a very eye opening point of view where you earn $100,000, 43% of that 43,000 is going to the government in the form of some form of services. And if the average service family, which is two, you know, husband and wife household, 50,000 and 50,000, 43,000 is going to the government, that's quite a very eye opening thing. One person's salary is paying for that. Now with the current level of government spending that's happening, there is quite a lot of debt. And with that level of debt that has happened, well, where do you think, how does the government pay for debt? They have to collect revenue. And where do they collect revenue? They collect revenue from working Canadians in the form of taxes. So if we take a look at then the next year for 2023, which is the current year, and this just interestingly came out in August, that has now gone up to 45.3%, things are going a lot higher in the form of taxes. And I'm sure this is probably going to be more with additional spending as it comes to carbon taxes and the raising of carbon taxes. So nonetheless, if I were to share, if there were some things to start having that awareness is putting more money into the government plans. They're attracting you to put more money into them, but eventually you will need to pay more getting it out. So let's say if today you put money into your RRSP and irrespective of any calculations, you are putting in money and you're getting a tax rate for, let's say you know, tax refund of $1,000, now you're going to pay more taxes to get that money out because tax taxes are rising. The only person who's benefiting from those type of programs is really the government. So I thought I would just share some new information for people. So to go back to the second part. So one was the government, the next is the banks. And if you look at this chart here, you'll see that when it comes to the spending. So now we have 35% of the money to spend, but. Or not. I'm just saying here's how much money a typical household will spend. 20% of that money that they earn goes to autos, 30% goes to housing, 40% goes to living, 10% goes to savings. So we add all of that up. That is where your 100% of your dollars are going to. Now the next thing I want to highlight is next to it is in terms of autos, the way people spend or consumers will spend for auto is to let's say get a car loan because they don't have enough of that money upfront to pay for it. So this 5%, this red number you see here is 5% related to the interest that is being paid. The next is housing. Now this is potentially at that time, but for a lot of people this amount of interest for housing could be a lot higher. But let's just use 25% as that example is related to interest. And then 8% is related to living. Maybe people spend on line of credits and things of that nature and then their savings, they're not really getting much, much interest up into that. So if we do some really simple math and we add up autos being 5% and living being 25% plus living. So housing was 30, 25% and then living was 8%. So this is where it's important to highlight that in all of the money that is being spent from your budget, 38% of that of your. Let's use $100,000 because it's an easy number. 38,000 is going in the form of interest. Most people are focused on. Let's invest, let's put money into some tax advantage programs to invest and try to get even further and save taxes. But they're only able to save 10%. So the bank is getting 38% of your money, yet you're saving at a rate at 10%. Who's getting ahead here? So the volume of Canadians, consumer spending is all being sent to interest.

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