The FASTEST Way To Pay Off Debt In Canada

So again, so when we meet with clients, the first thing that we do is we do our due diligence to make sure that our prospect clients have clear understanding on the process of becoming a banker. And then we spend a lot of time in understanding objectives because it's important to know where we are in a life journey and what the desired state is so that we can see how we can fill in the gap using the process of becoming a banker. So when we go into understanding John as his objective, not as his objectives, but his family's objectives, the first and foremost thing that he said was herblo, I'm done with debt. I want to find a better way to pay off debt.

It's not about paying off the debt. Paying off debt is easy. You can just increase your payments and you'll accomplish the objective of paying off debt. But if you do it that way, all you would achieve is a debt being paid off, nothing more than that. What we're going to walk you through is a process that we use, not just pay off debt, but to recapture the debt. So meet John. John is a client of ours and John is a breadwinner for the family. He was age 48, he was 48 years young, non smoker when he met with me. And his consumer debt was $200,000 at that time. And again, just like yourself, how you're coming through this education process. So did John and he read the book and once we got together, we clearly looked at his objectives and his objective was to focus on that he wanted to pay off his debt in a smart way. So John discovered IBC in October 2017. And John and between John and his wife, their annual gross income is $250,000 per year.

So again, so when we meet with clients, the first thing that we do is we do our due diligence to make sure that our prospect clients have clear understanding on the process of becoming a banker. And then we spend a lot of time in understanding objectives because it's important to know where we are in a life journey and what the desired state is so that we can see how we can fill in the gap using the process of becoming a banker. So when we go into understanding John as his objective, not as his objectives, but his family's objectives, the first and foremost thing that he said was herblo, I'm done with debt. I want to find a better way to pay off debt. So the objective is to be debt free and he wants to achieve that without working any harder, without taking on any risk, certainly without changing his cash Flow and without ever losing control over his money while still making sure the family is protected in the event of unlikely happening, meaning he graduating, he leaving the planet earth. Because there's two possibilities. 5, 10, 15, 20 years from today, guys, either we are alive or we are gone. If we are alive, we want to make sure that we have access to cash. We, we are able to provide for a family. And if you're gone, we'll make sure that the family is protected also. So what John did was we looked at his scenario and the solution is.

The debt recapture plan. Using the process of becoming a banker, and this is where we all get excited, is to help families recapture debt. So what I'm going to do is, Jason, I'm just going to pull up the plan on my screen in an Excel sheet for everybody to see and I'll walk you through the plan from start to the end. Without any further ado, I'm going to dive in. And so if you're joining us on the iPad or the iPhone or the mobile device, may I ask you to switch your phone mode from a portrait mode to landscape mode? Because this is a quite wide Excel sheet. And I'll try zooming as much as possible so that the numbers and the whole plan is clear. But I'm going to start by showing everybody how things are mapped out on this sheet. So the first thing is I'm just going to rearrange the microphone here. So I've listed all the creditors for the family. So you can see there is a Visa, there's RBC loan, the CIBC line of credit number one, CIBC line of credit number two. There's a loan for a recreation vehicle rv, there is a Harley loan outstanding and a truck loan outstanding. So the family has seven loans, seven consumer debt. And if you add all these debt, the balance is just over $200,000. Let's just call it $200,000 just for.

Simple number.

Now, when we map out these plans, it's important to understand what exactly is the payment that the family is sending away to these creditors. So what we do is we look at the minimum payment. So it's important to understand what is the minimum payment required on that loan and what is the payment that the family is actually making on that loan. So sometimes families, they send extra money than what the banks need to accelerate the loan process. So then we have a different discussion as to if you're sending the bank more than what they need. Whose margin of safety are you reducing, yours or the bank's?

Can we get that in the chat box, please. If you are sending extra money to the bank than what they need, whose margin of safety are you actually reducing? Yours or the bank's bank? And who gets to use the control over the extra money?

Yeah, what you're doing is you're telling the bank basically, hey, don't go out and actively try to find another borrower. Let me just send you some extra money.

That's precisely right. So that's why it's so important for us to really understand where we stand in a life journey and where we need to go so that we can provide this whole coaching to our prospect clients again. So let's go back to this example. So it's important to understand what the minimum payment is and what the actual payment is in this sheet. What you see is the minimum payment that is required on those creditors. And then we capture the interest rate. Now, for one particular loan, I don't have the interest rate. They didn't share it with me. I'm just going to plan this based on the minimum payment that they have. And then in addition to all that, you can also see the loan balances. So you can see visa, they owe $10,000. On RBC is 60 on CIBC is 9,500. On the second line of credit, CIBC is 8,300. On RV, it's 34,000. On Harley, those bikes are expensive, it's 45,000. And on their truck is $77,000. So we put everything in this plan and then we look at where does the family want to get started in terms of premium deposit, where how much can they sustain as a deposit into their banking system? And that number has to be sustainable. It's not something that we just pull out of thin air as a starting premium. There's a rational and logic behind it. So with this particular family, they were comfortable putting $24,000 per year into their family banking system to accomplish the objective of paying off the debt. We are a method called debt recapture. Now, may I ask, and this is just for trivia, how many standard working hours are in a year? Does anybody know the number?

Ron, do you see any response in chat box?

A very specific number of 1957.5. But Jim says 2,200.

2,200. Let's use 2,200 as example. So this family's premium is $24,000 and 2,200 working hours in a year.

So that's basically $10.90 per hour that they're setting aside into creating their own banking system. For the purpose of accomplish their objective. Now, is there anybody on this boot camp today who think they are not worth $10.90 an hour?

Again, a rhetorical question, but it's important to understand these things from the vantage point. What we are creating is not a policy. We're creating a storage of capital which is owned and controlled by you. The more you put in, the more you get. Think about what banks need to operate. They need money to operate. So if you're creating your own banking system, you have to put capital in to operate it. The more capital you put in, the more money you put in, the more money you have access to. So for this family, when I showed it from this vantage point, they're like, well, this is, yeah, I'm worth $10.90 an hour. In fact, I'm worth more than that. I want to put 50k per year into my policy. And then I have to really remind them that it's not about just a premium. It's about a process called banking. So let's start with this. And then the family, I told them, you will do more policies going forward. It always happens. You can always expand your program. So let's walk through this case study, guys. So it was October 2017 when the family met with me and they started the policy with an annual premium of $24,000 per year. Now, right away, immediately after starting the policy, they had access to about 11,906 from the policy as a policy loan. So within 30 days of starting a policy, you can access a portion of money as a loan for this family, based on their policy design, they put 24,000 and within 30 days of starting a policy, a policy being approved and issued, they could access11906 as a policy loan. Now, when you access money as a policy loan, may I ask, whose money are you using?

Whose money is that that they access as a policy loan? So Rowan, what are you seeing in the chat box? Your money. Your money.

Oh, someone's chimed in. Yeah, Someone else says insurance. The insurance company.

That's right. And this was a trick question. So when you accessing policy loan, you're not using your money. Your money is inside the policy growing every single day. You're accessing insurance companies money to accomplish your objective. You're not interrupting the growth of your capital. So it's important to understand policy loan is not your money. Your money is inside the policy growing every day. That money called policy loan came from insurance company. And when we request a policy loan, we just fill out a single Document page. We put in the policy number, how much money we need and whether we want the money electronically deposited or do we want to receive a check from the insurance company. That's all we have to put in. And the money shows up, no questions are asked. So when this money showed for the family, they immediately took this money and they paid off their Visa because the visa balance was $10,000. So immediately they applied that loan to Visa and they eliminated the Visa and then the remaining difference because they took out 11,906. The visa balance was only $10,000. So as the Visa was paid off, small portion of the remaining money went towards the line of credit. So you can see the line of credit balance is reduced now. Now the Visa is paid off. The minimum payment that they were sending on the Visa per month was 500 bucks per month. So the Visa is paid off, that Snake and Dragon Visa is done. Now what do they do with that 500 bucks per month which they were in the habit of sending away?

What they're going to do is they're going to develop a new habit with our coaching. And the whole idea is becoming your own banker. So as a coach, we're not responsible for you, we're responsible to you. We're going to coach clients and this is what you're going to do because you're custom on paying that money to Visa. So in this particular case, don't change that payment, make the same payment, but change who's getting it. Now that money is coming back to you. So immediately that Visa payment became an asset to the family because the asset is determined if the money's flowing towards you or and the liability is that the money's flowing away from you. So they're not changing their cash flow, they're just changing who is getting that money. Now that debt of $10,000 is owned and controlled with their banking system. So now their banking system is going to get that money till the end of time.

So you can see the column right here. Policy, loan repayment. So they're repaying the policy to loan back. So every month that accumulation is increasing. So they're paying it back, they're recycling the money through their banking system. Now let's fast forward a year. So October 2018. So one year after now, they're able to access 16,182 as a policy loan.

First year, the loan access. So October 2017 was 11,906. In October 2018, the loan access is 16,182. So can someone just share with the Group. What happened to the access to capital did it went up in one year? Were they able to access more money from the policy now? And the reason why that's happening is because the policy is growing all the time.

So they're able to access that 16,182 as a policy loan, plus they're able to access what they've repaid back on their policy. That $500 per month on Visa has accumulated $6,500 at the end of the year. So the total money that they can access at the end of the year now is $11,682. So they take that 11,682 and the. You mean. Sorry, 22,682. Thanks, Jason, for correcting me.

Tarble was a math major in his engineering program.

What do you say, Jason? You may be late, but I'm worth. Waiting for something.

I'm a little slow, but I'm worth.

All right, so, yeah, thanks for correcting, Jason. So now the family is able to access 11,682 from the policy, and they took that.

Did I say the 11,000 again? Yes, you did. Oh, Saturday.

Okay, your human is showing.

Yes, yes, exactly. So 22,682 is what they're able to access now. And they took that money and they applied it towards the RBC loan and then the CIBC line of credit. So they eliminated the first three debts. The first one was eliminated right away when they started the policy. The second and the third debt having eliminated a year of being into the policy.

So three deaths are gone in the matter of two years. The total balance on those debts were approximately $35,000 of debt paid off in a matter of one year of starting the policy. How are they doing so far? Just in one year.

And now again, they're not changing their cash flow. So the payments which were leaving them on the Visa RBC loan and CIBC line of credit, all those payments are now coming back to their system, which is their banking system versus going towards someone else's banking system. Because all those debts are now controlled and owned by their system.

And think about this as financial energy.

So whose system is being energized?

Someone else's or John's? You're taking the financial energy away from someone else's system and redirecting it into your own.

Money is energy. Now they have the energy coming back towards them. And this is what Nelson talks about, recapturing the money that's leaving your family by controlling the banking function. Now, the minimum Payments that we're leaving on those debts. So 500 on Visa, plus 300 on the RBC loan, plus 168 on the CIBC loan. Combined, those minimum payments are about 968 per month. So now those payments are coming back to their system versus leaving their system. So they're not changing the cash flow, they're just changing who is getting the money. Now, let's fast forward to the second year. So October 2019. So they're two years into policy. The policy loan amount that they can borrow is 19,900 plus they are able to borrow everything that they repaid back as a policy loan, which is 11,624 over that year. And now they can access almost $31,000, 31,525, and as a cumulative amount from the policy. And they took that money and they immediately applied it to debt number four, which is Harley. Because throughout this process, they have been making payments on Harley and RV and truck loan that they have outstanding. So by the time October 2019 came, they had enough money in their system to pay off the Harley completely. So the Harley is gone. And whatever the extra money that they have now got applied to their CIBC line of credit. So the line of credit balance has reduced. So now in a matter of two years, they've eradicated four debts from their system. They've eradicated four snakes and dragons. Debt number one, debt number two, debt number three, and debt number six. Hardly. And all those payments combined which were leaving their family, leaving their system is now coming back to the system. And combined those payments are 1866 per month. Now, Nelson always says it's the behavior of the policy owner which is far more critical than the behavior of the insurance company when it comes to implementing this process. Is the policy owner who's sticking to the plan and paying all those payments back into the system. If the policy owner said, hey, you know what, I have this extra money cash flow, and I'm going to just start spending this extra money, then the system is just not going to be as effective because the policy unit decided to take all those payments which have been freed up. Now let's go back and spend that money again.

And which golden rule are we talking about here?

Don't steal the peas.

Don't steal the peas.

So let's Fast forward to October 2020. So three years of owning a policy. Now, what is the policy loan amount? It's $24,000. Now, what is the premium? What premium were they putting into the policy?

$24,000. So now they're getting out more money than what they're putting into policy as access to loan. They're able to borrow that money plus they're able to borrow everything that they paid back over the last year. Total loan repayment back is $22,000, $394,000 to the policy. They're able to access $24,000 as a loan just by virtue of policy growing. Now they got access to $46,409 in total money. They took all that money, they finished their car loan which is the debt number seven. They finished the CIBC number two, which is the debt number four. And anything that was left over is now applied to the RV. So the RV has a balance of 20,720 now in a matter of 37 months.

Now if you add up all the payments which they were sending away to the commercial banks or other finance companies on debt number one, debt number two, debt number three, debt number four, debt number five, debt number seven, all the stream of payments per month is 2787. Now all that money is coming back to their system again. They're not changing their cash flow, they're just changing who is getting the money because they were accustomed to sending those payments away. Now since those debts are owned by their banking system, they are the one getting all the money. Now just by virtue of repaying policy loans and by virtue of them actually making a payment on the RV because they're still making those payments on the RV. By the time they reach 44 months, which is May 2021, which is coming up very soon, they have enough money to pay off the RV. So in 44 months they just paid off all the debt.

Now think about this. They had a consumer in debt of $200,000. And what they could have done is rather than following our coaching, rather than following this process, they could have taken all the $24,000 and applied directly towards that debt, they still would have been able to accomplish the objective. But what they never would had is an asset called a policy that is growing in value generating cash. An asset that can be used going forward for banking a death benefit that is there which is going to come walking in when John leaves his planet so that the family is taken care of. So by doing it our way it's just better. It just makes better financial sense of the family versus just doing it the consumer way is which is to just send your money away and pay off the debt.

Now I'm going to go back to the PowerPoint. So again, remember in 44 months, they were able to pay off all the debt. There's still some work to be done. So just to recap.

Did John accomplish his objective for paying off the family debt? That was his objective. The answer is yes. Did John work any harder? No.

Did John ever lose control over his money?

No.

And did John ever take on any additional risk? Because a policy is a unilaterally binding contract and the cash grows every single day as if nothing happens, nothing happens. In the means of stock market, Bay Street, Wall street, the cash values keep increasing every single day. So the risk to John in terms of growing the cash is zero.

And that John ever changes cash flow. So to implement the whole process.

That John ever changes cash flow, his objective of saving money in a premium or a policy premium deposit. He didn't change his cash flow. He was saving that money in a bank. He just decided where to save that money. And as he was recapturing the debt, he just took all that debt and started paying back his policy loan. So in terms of his cash flow change, it never happened.

The only thing that John changed to accomplish his objective is the process of getting to his objective, which is the process of becoming your own banker. The total policy loans outstanding at the end of 44 months, which is when his policy debt was paid off, was $66,000. He had paid off $200,000 in debt. After paying off his debt, he has a cash flow of $3,451 per month. He used that cash flow to pay off the $66,000 in policy loan. So his policy loans were paid off in 18 months.

So from start to end, it took John 62 months to not just pay off his debt, but also to recapture all his policy loans. So in a matter of five years, approximately, he paid off all his debt and he recaptured all his outstanding policy loans. The start age for John was 48. The debt was paid off and recaptured. Recaptured, meaning all his policy loans were recaptured by the time he was 53.

Happy camper, no pun intended with the RV.

Very happy camper.

Sarbill, thank you for sharing that.