The IMPACT Of Infinite Banking Deposits For PASSIVE INCOME

If you had a machine and every single time that you went to use the machine, it just got better and better and better and more efficient, you'd probably continue using that machine or keep putting fuel into it. At least in our situation. Deposits or premium deposits is effectively the fuel for the infinite banking system. That is the impact of compounding over time inside of a system where that growth is uninterrupted, it cannot be stopped because. So what exactly is the impact of making deposits into a well designed infinite banking policy for the process of becoming your own banker? How would that look? We're going to look at an example today. I'm going to show you a tool and we're going to look at an example of a 40 year old individual putting deposits into a system for a number of years. And then what is the impact if he continued to make deposits versus if he only did kind of the bare minimum? And, and then we're going to talk a little bit about the possibility of generating a passive income.

Let's dig into this thing right away. So here you'll see on my screen a great little tool we call the Wealth Access System. And I've got some sliders here, I've got some deposit years, I've got an age here, slider and then some summary points where we can look at different values from different, you know, sections. So we're going to start first with a 40 year old and that's going to be our example today. So if you're not 40, that's okay. Whether you're above or below that line. The key is just to use this as a reference point. And so I'm going to focus for example just on a $10,000 annual deposit. So we're going to go ahead and move this up to 10,000 and we're going to look at doing that for seven years. Now I'm going to do this in phases. The keyword is phases. I, I'm going to show you putting in for seven years, but I wouldn't recommend doing seven years. I would always recommend putting more in. The objective is to always keep contributing to your program because the more you contribute to it, the bigger, better and more advantageous it becomes for you. In fact, I'm going to show that to you in our example. So let's kick this in for seven years. So we've got $10,000 for seven years for our 40 year old. And you know, I've got this cool little graph right here. So we're going to walk over this a little bit. We're got our front section, which is the deposits. You see we're looking five years out. We started at 40, now we're at 45. And you can see if we went five years of 10,000, that's 50,000 and then that goes out to year 10 and so on and so forth. So this front section is our cumulative deposits, the maximum deposits. Well, if you only put Money in for seven years, 10 times seven is $70,000. Nelson Nash would say that's some third grade arithmetic. And of course you have the ability to keep putting more in. I can kind of show you how that looks. But we're going to get to that in a second. Now down here we're going to summarize some different time frames. And let's just start by looking five years out. So we started at age 40, we're now at age 45. We've put in 50,000 and we have a cash value of 48,000. So we've put in 50 into the insurance company and they've piled up 48 of that. And we also have insurance that's accumulating as well. So, so we have a tax free legacy that's built up there. So we're not quite at exactly break even but boy, we're getting very, very close in this example. Now what's really interesting is if I take my slider here and I go out to age 50, so we started at 40, we're now at age 50, that's 10 years. We put money in for the first seven years and after year seven we just stopped putting money in again. I wouldn't recommend that. We would always recommend you continue putting capital in. But for the purpose of my example, I just want to walk this through a few phases here. So we're now at the 10th year. That means we put money in for seven years which is 70,000 and we now have $81,000 in our cash value asset. Again depending on additional bells and whistles and things that you might need in your own policy that'll vary a little bit depending on the insurance company. The key thing is understanding what's taking place. We've put in 70 and the insurance companies piled up 81. Plus we have a very large tax free legacy value that's accumulated as well, protecting the whole system. So in other words, you have access to every dollar you've contributed and anytime that you continue to put money in, it's going to obviously increase that. However, we're not putting any more in. We stopped at the seventh year. It'd be very Weird to do that. I mean, if you had a machine and every single time that you went to use the machine, it just got better and better and better and more efficient, you'd probably continue using that machine or keep putting fuel into it. At least in our situation. Deposits or premium deposits is effectively the fuel for the infinite banking system. So I'm going to take this out and I'm going to scroll all the way out here and we're going to go to, let's pick age 85. I'll use 85 as my example today. So here we are, we put 70 in at the very beginning. We're now at age 85 and we have 286,000 in cash value. And of course the death benefits around 350. There's, it's chasing after, towards meeting and equalizing that, that death benefit. What's really interesting is that we only put money in for the first seven years and we've got more than double. I would say that we've got about triple what our original deposits are. But we've also been able to use this accumulating pile of money over that entire time frame. So you see, as I'm scrolling over these different, you know, five year gaps, that value continues to rise even though we're not putting any new capital in. You could be utilizing this money in other areas of your life as well. So that's a key component that I want to identify. Now what I want you to take away is if we look at this cash value of 286,000, what were to happen if we were just willing to make three more deposits? What if we could just fund three more years and get out to 10 years, how would that impact that change? Well, now if I take this up to 10 years, we've now put 100,000 in and look at how much our cash value accumulated at the same age. When we're looking at age 85, we added three more deposits. That's 30,000, 30,000 of more deposits and we had a huge increase in our cash value. So again, go back to seven. We were at 286,000. Now we go up to 10 years. We're at 442,000. Very big difference. 442 minus the 286, we have $156,000 increase in the program. The only thing that changed was our behavior. We committed to adding 30,000 and we got 156,000 result for those deposits. That is the impact of compounding over time inside of a system, inside of a system where that growth is uninterrupted, it cannot be stopped because the cash value is chasing, chasing, chasing after the death benefit. It's always reaching towards equalizing the death benefit at age 100. In fact, if I go to age 100 here, at least age 100 in Canada, that is, and I look at our cash value and our death benefit numbers there, the legacy value, the, the orange box, those are the same. They're at 750,000 in this example. So now obviously, if it worked well to go from seven to 10 years, why wouldn't we go to 15 years again? You can see everything increasing along the way and just how much better the whole system gets by continually making those deposits into the machine. This is the power of making deposits. What were to happen if we did a larger program? So maybe we had more resources available to us, we had some saved up capital, maybe we were putting money into a registered account and we wanted to redirect the flow of that money. Maybe we're saving for a vacation fund and saving to pay an annual tax bill, etc. What if we took those other line items, that financial energy, and we redirected that energy into more deposits in our system. So as an example, let's say we kick this up to 25,000 in deposits. And here if we go for 10 years, well, we would have put 25 in for 10 years, that's 250,000. Now we have a pretty healthy asset and death benefit here. Correspondingly, if we went and did this with the $10,000 number, you know it's going to take us a lot longer to get to that similar value point. It's harder to accomplish the objective versus if we went with a slightly larger program right of the gate. So the key takeaway is, is that the bigger you make your policy, whatever's reasonable for you to do, you can often get some discounting, some bulk discounts. That makes it more efficient for your life. So we would encourage you to work with a coach, figure out what is a size that is right for you, what makes sense for you, what's something that you can maintain, that you can feel confident in. And as you build confidence and you, you adjust your mindset and your resources, your ability to go and increase the size of your system will also go up with it. Now, key point I want to make here about our example here, we're showing 10,000 going in. That's the maximum that this program would allow. If you wanted to do more than that, but you didn't set up the room to do it you wouldn't be able to contribute more. So if you have the resources to do a larger program, you want to make sure that you're either building in that value or you're able to try to hit those targets because you don't want to, you don't want to overestimate, but you certainly don't want to undershoot either. So it's important to work with your coach when you're designing your program. Now let's take this $10,000 idea and let's assume that this four year old is going to do that for 20, at least 20 years. What kind of income could they create by putting a machine like this together? Well, we're going to go to our next tab and take a look at that. So here I've got a slightly different view of the sliders. So again we're going to look at our 40 year old person right here. We're going to do 10,000 and we're going to go up to 20 years. All right, now we can choose when do we want to start drawing our tax free income down? In this example, the, the tax free income is being created by a loan instrument. In our case in Canada. In order to get that tax free income you would utilize a third party collateral loan. We have other videos that explain that. So I, you know, defer you to watch some of those other, that other content. But we would be taking the policy and using it as collateral and then going, getting a third party, you know, cash value credit line facility where we can draw an annual amount of money off. And in this case we're showing not paying anything back on that loan that's accumulating. So in other words, we're going to let the interest roll up and accumulate or capitalize on itself for the purposes of this example. Now in practicality our life is dynamic and that may show up differently for you in your life. It may not happen exactly like that. But again, we're looking at some static things here and we want to stretch our imagination as we consider how this might work. So here, if we wanted to start taking that tax free income at 65, we have to leave some money behind for the next generation. In other words, there's gotta be a net death benefit. So as we accumulate a third party loan, it builds up and up and up and up as we're taking money out that places a lien essentially against the death benefit. So when eventually we die, we kick the bucket. The tax free death benefit pays out, but it has to pay off the loan and any outstanding interest first. And then the remaining balance, the net remainder, is what goes tax free to your beneficiaries. So here we're talking about what's that net remainder? Well, we have to leave at least 10% behind. So in this case, we have about $2 million of death benefit and we're going to have a big loan that accumulates and we're going to have to keep 10% of that death benefit available for the next generation. So if we did this all the way out to age 100, starting at 65, and you took an income stream all the way to age 100, this person would be able to generate about a $13,000 a year passive income every year from age 65 to 100. That's a pretty good chunk of time based on only putting in $10,000 for 20 years. Now, if you're willing to wait a little bit longer because you have either other resources or you're working longer because 70 is the new 65, we encourage people to work longer to be of value. Because if you are engaged in your life, people are healthier, they're living longer. We find that it's giving people more purpose to do that. Well, obviously you're going to see an increase in the income amount per year. And again, we're showing this going all the way out to age 100. So in this case, it's about $17,000 a year. Again, if we kick that up to 75, obviously we just see the income increase. Now here's the next piece that I want to show you. If we scroll down a little bit here, what you can see is that we've put about 200,000 into the system. We started our income at 70 in my example. And we also have a tax free death benefit to leave behind. So when we add in what we took as a cumulative tax free income after, you know, money, you've taken out 17,000 for that period of time, you've taken out 525 while you were alive. You put 200 when you were alive in, you took 525 out while you were alive. That's a pretty good deal. And then when you kick the bucket and you're gone, you leave an additional 200,000 back to the next generation. So when we add that tax free income and this next generation level amount, the total amount that we really left behind is 725. What we got to use and what we left behind for the next generation tax free, which means for every dollar we contributed, you got to use or contribute back $3.63. That's a pretty good machine. This. Now, in this whole time frame, all we're talking about is what the insurance policy is doing. None of this is looking at what you could be doing while the money was growing. That's what we would refer to as off the page. It shows up in another asset column. It's all the family vacations. It's all the things that you did somewhere else in your life. It's the investments that you were able to accumulate, the rental properties you purchased, you know, the Bitcoin that you bought, and all the things that you wanted to do in your financial life that you were able to do because you had this mechanism in place and you could have your capital working in more than one location. So I hope you found this very useful again. My name is Richard Canfield. Welcome to the Bankers Vault Channel. Enjoy the content you see here. We've got a ton of great content and a ton of great team members who are producing that and sharing education for your benefit. Subscribe, check out the next recommended playlist and continually come back as you learn the journey and the process of becoming your own banker.