The Process Of Creating WEALTH In Canada

Is there a slight chance that if I use some buzzwords out there, if I say the Elon Musk's or the Warren Buffetts of the world, is there a slight chance that they're doing something a little bit different with their money today than the majority of people in the world are? Why doesn't everybody just do what Warren Buffett does and then we'd all be billionaires, right? So you have a choice. Most people just continue to go along and they consume what they're being fed. Hey, put your money in RSPS and take risk and you know, pay low interest and send your money away. People just continue to do what the majority of people do because they're busy and they're in their stressed out and they've got a lot of things going on and they just want to relax and they want to chill out after work or whatever it is they're not diving deep into, well, what are these other wealthy people doing in the world? What could I be doing differently today to create wealth? So that's what you're here to do today is learn about a process that will allow you to create wealth and has created some of the wealthiest people on the planet.

Wherever wealth resides, someone will try and steal it. This is a quote by R. Nelson Nash. Let's take a look at that. If you want to save the economy, start with the 150 billion that Canadians will save during the or have saved during the pandemic. Toronto Star, December 1, 2020. Just going to look at a couple of the headlines that have come out over the years. The deficit will rise to nearly 282 billion.

Toronto, excuse me. Financial Post, November 30, 2020.

Statistics Canada is about to require Canada's nine largest banks and credit unions to turn over highly sensitive data about their customers without the customers knowing. That means every deposit withdrawal, bill payment, overdraft fee, credit card, mortgage payment and more. Essentially your life's. Your life will be laid to bear for the government bureaucrats to look over. Toronto Sun, October 29, 2018 COVID 19 bill will give the Liberal government or Liberals power to raise taxes without parliamentary approval until the end of 2020. National Post, March 24, 2020.

So here's the question. Who is the banker in, in your life today?

Let's just examine something that you already know. You earn an income and that income gets deposited. It gets deposited into.

Someone else's bank. This is the key right here. Just let that sink in for a moment. You're the one who earns the income. You're the one who does the work, but it gets deposited in someone else's bank. And we'll discover later that that bank's just not letting that money just sit still. They're actually putting it to work. And it's your money. You pay bills, right? You have to go and access your money from someone else's bank. You pay the bills, you live your life, and then you have to go back to work and work really hard to earn more money so you can do more things. In other words, you're doing all the work and someone else is getting all that should be capitalized. You're doing all the work, and someone else is getting all of your money. And when they get that money, it's no longer your money. When you deposit money into someone else's bank, you've actually unknowingly and unwillingly given that money to that bank. You just have become a creditor to that bank. In other words, the bank owes you that money, and they will give it back to you, but they're going to give it back to you on their terms. They've just been reliable. When you check into your online banking and you see a bank balance of 5,000 bucks, your brain thinks that that 5,000 dol is there and it's readily accessible for you to get to. Then you make a transaction and the transaction gets approved. And then thus, you're blinded to the problem. You don't actually realize there's a problem because banks are really reliable to provide the capital when you need it. But that's not how it has to go. They're doing that on their terms. Now, how does that make you feel? Does it make you feel like this? It should make you feel like this. Like, wait a minute, what is actually happening here? I'm the one doing all the work, and they're actually getting all of that money, and they're using that money to grow wealth and make other families rich. To make other families rich. It absolutely should make you feel like that. If Jason shared this earlier, if the minority of people in the world accumulate and control the wealth, then why do we continue to do what the majority of people do financially? It's absurd. It makes no sense. People say that to me all the time. They say, like, hey, there must be some kind of a catch. How come everybody isn't implementing the process of becoming your own banker if this is so great? Well, let's just think about that for a moment. Is there a slight chance that if I use some buzzwords out there, if I say the Elon Musk. So the Warren Buffetts of the world, is there a slight chance that they're doing something a little bit different with their money today than the majority of people in the world are? Why doesn't everybody just do what Warren Buffet does? And then we'd all be billionaires, right? So you have a choice. Most people just continue to go along and they consume what they're being fed. Hey, put your money in RRSPs and take risk and, you know, pay low interest and send your money away. People just continue to do what the majority of people do because they're busy and they're stressed out and they've got a lot of things going on and they just want to relax and they want to chill out after work or whatever it is. They're not diving deep into, well, what are these other wealthy people doing in the world? What could I be doing differently today to create wealth? So that's what you're here to do today is learn about a process that will allow you to create wealth and has created some of the wealthiest people on the planet. The banking business. You're going to learn how to control the banking business or the banking function as it relates to your need. If you understand the problem, you will know what to do. The solution will become clear. So that's the point is we really need to frame up and understand the problem. So let's examine the annual pattern of spending. You see here. What we're looking at is the annual pattern of spending and we're breaking this down. Just an average Canadian family earning an income. Well, we all generally need to finance cars. We need to have a vehicle so that we can go to the job or go to the business, so that we can pay for the housing and so that we can pay for the living. And then hopefully we can save a little bit of money. Right now, what's actually happening, you purchase a vehicle and there's a payment that has to be made regardless of the rate. See, the rate is a distraction. The rate doesn't actually matter. It's all about who's controlling the structure of the loan. How is that loan actually compounded? If I see 3% interest, am I really paying 3%? Is it only 3 pennies on every dollar going to interest, or is there a much higher volume of interest actually going away from me? So less is hitting the principal. So of the of the 20% that they're financing or using for financing a vehicle, 5% of their entire income is going to interest. Now look at the housing they're spending 30% of their income on housing, but 25% of their income actually is interest. Same with the living expenses. Most of that's just an expense because they're buying, you know, paying for gas and groceries and. And keep in mind, what we're not factoring in here is the lost opportunity cost on every single dollar that we give up when we pay cash for things. So there's an entire other pile of interest that you could be earning if your money was left somewhere where it's growing, compounding uninterrupted. All we're talking about is the money that's actually leaving. So this other 5% might be going for, you know, maybe there's some credit cards that they're financing, or maybe there's some lines of credit and that kind of thing. Now, this is, as most of you know, this 10% savings. This is a high gu. But the average person is likely not saving 10%. Now, let's think about the trend that's actually going on here. You see the cash that's flowing away. There's 90% of the money flowing out of the house. And of that 90%, like 35, 40% of that is all going to interest. So you're sending 90% of your money away. You're working for all this cash. It's flowing in, and 90% of it's flowing out the door, gone forever, regardless of its principal or interest. It's a permanent transfer of money away from you. And then you've been taught to save 10%. Hey, save 10%. Save 10%. You're saving 10%. Maybe of that 10%. Maybe you're investing some of that money. Now, how hard does this 10% actually have to work to compete against all the money that you're just simply sending away? So you've been taught to put this 10% at risk.

You have to put that money at risk in order to grow it to compete with this money that's flowing away. If we could find a way just to get all of this money flowing back to you and your family, back to your savings, back to your warehouse of wealth, gosh, that would make it a heck of a lot easier to grow your wealth, and you'd have a lot more capital available to take advantage of opportunities on your terms when you've had the time to think about it and consider it and choose whether or not it makes sense to you and your family rather than frantically looking for opportunities because, man, I got to grow my money because it's all flown away. Let's Take a bit of a deeper dive and we'll talk about rate versus volume. So this will help really frame up exactly what I'm referring to when I'm talking about the rate of interest that you've been told that you're paying versus the volume of interest that you're actually paying. And which one of those two numbers actually matter. The interest rate does not matter. The interest rate is nothing more than a tool that the bank uses to attract money. Think about that for a moment. Why are we in the lowest interest rate environment of history, but yet the banks are more profitable than ever? There's nothing to do with the rate. It has to do with the volume of borrowing and the volume of dollars that are flowing back to the bank. So let's look at the real truth in lending here. We have a $400,000 mortgage. We used a 2.92% interest rate, which I think is fairly reasonable for today. We have amortized over 25 years. And so the payment of that mortgage ends up being $1880.24 per month. And that's the thing that we focus on. Great, Just paying the mortgage. Away we go. And we know I have to pay this mortgage for 25 years. Now, this is assuming no refinancing. We've seen this all the way through the amortization of 25 years. Same interest rate, same payment, and away we go. If we look at the very first month, you can see here, the red numbers represent the volume of interest that's flowing away, and the green number represent represents the principal that actually hit the balance of what you borrowed. So if you look at the very first month, it's pretty close to 50, 50, a little higher on the interest side. So let's just take a moment to scratch our heads and go, wait a minute. How does that work? I've been told I'm paying 2.92% and I'm actually paying closer to 50 or 60% of that payment. 60% of every dollar that you paid actually flowed toward interest. The important thing to recognize here is the reason why they're able to do that is because who has the control in this equation? I'm emphasizing this and I'm repeating it because repetition is our best teacher. And that's what you need to start to recognize is even if this number was 800, who cares? It's a lot more than 2.2%. And the point is, is you're not in control of what that payment is going to be or how it's divided or how the Loan is structured. So if I continue to go on, you can see second, there's a little bit less, a very little bit less that goes to interest. By the end of the first year, the payments, we still have more than 50% of the payment is going to interest. So the volume is very high. And there is nothing you can do about that because the bank has all the control. And not only are they getting this interest to put to work, they're actually getting the entire payment, regardless of principal of interest. The entire payment is flowing away from you going to someone else's bank. And that bank is putting that money to work and they're putting it to work to grow profit for someone else. You look at the end of the year total, so we've paid 22,000. We think we're doing making progress. And then you get your mortgage statement and your heart jumps up into your throat and you go, wait a minute, I paid 22,005, 62 toward the mortgage, but I only hit $11,000 on principle. How does that work? And now if we fast forward all the way down to the bottom, now we've made our last payment here and the scales have tipped a lot more is hitting principal. But then we look at the amortization table and we look and we go, okay, we bought the house for 400,000, but we actually paid $564,068 overall. So if I divide 400,000 into 164, 40%. So there's a pretty big disparity here. And the thing that I'm trying to point you to here is, is your eyeballs drives past the whatever bank and you see the flashing sign that says hey, 1.99%. And you rush in to refinance. That's to attract you to go and sign paperwork so that they can get you trapped into this game that you're not aware of. And then you talk to your twin brother who has 2.92%, and you actually think you're winning. And it's all an illusion. You're both going to pay an exorbitant amount of interest. Maybe you pay a tiny bit less, but it's going to be a heck of a lot more than 1.99 or whatever that rate is. Okay, fundamentals of banking. Lend with security rather than invest with risk. Invest with risk. Does that sound familiar? That's what you've been taught to do. You've been taught to take your hard earned money and put it in the hands of someone else and take risk and hope that that Money grows. But the wealthiest people on the planet do not do that. They lend with security rather than invest with risk. And you can do that too. And then you can take advantage of investments that fit your criteria for a good investment. So who is in control of the money? Who's in control of the money? We just discovered this. It's the bank that's in control. The bank has all the control. What is the underlying asset to the bank? You and I go and we buy our house and we feel really good about it, or we buy a rental. We have that asset. We. Does the bank actually care about the real estate or does the bank care about the stream of payments? All day long it's the stream of payments. They don't care about the real estate. The real estate is just a tool that is used to help create a stream of payments and money flowing back to them. And we walk away thinking that we're winning and we don't realize that we could actually have both. We could have the real estate and we could have the payment as well. Now, I guarantee that would accelerate whatever you're doing financially today, regardless.

Whoever controls the motion of money.

Accumulates the wealth. Whoever controls the motion of money accumulates the wealth. If I can find a way to have my truck payment that was flowing away from me, if I can find a way to recapture that debt, if I can have that debt reside in my banking system earlier than the eight year schedule, all of a sudden that payment that's flowing away from me, I already planned to pay it to somebody else for eight years anyway. If I pay that truck off two and a half years early or five and a half years early by capitalizing my own system, accessing money from my own system, paying off the car company, now all I do is I reverse the flow of that money. I'm the one now collecting and accumulating the capital that I was presently flowing away and planning to flow away for the next eight years anyway. So I just keep doing what I'm doing. I'm just reversing who's getting the money. We're going to examine the banking business and we're going to see that banks actually make a lot more money off of our money than what we think they do. So let's look at what happens with a bank. This is just how things work. You deposit your money into someone else's bank. So let's assume that you deposit 50,000, whether that's at one time as savings or if that is over the course of the year, because that's your income. The money has to flow to someone else's bank. They get control over it before you do. And now you're taking advantage of opportunities. You're growing your family. Maybe this is you, maybe this is someone else. Somebody needs to buy a home. So now the bank is going to create a mortgage. They're not actually going to send any money to anybody. They're just going to use a keyboard and electronic dollars and they're going to allow somebody to purchase a home. And in this case, they're purchasing, purchasing the home at 4%. So now we think that the bank is getting the spread the bank is getting. They're giving us, let's assume, by the way, I never mentioned this, they're paying us 2%. I don't know if there's a whole lot of savings accounts out there that are actually paying 2%. So we're being quite generous to the banks at this point. But now they're earning the spread 2%. Okay, now what happens when you get the mortgage? The seller actually gets money and they can do with that money what they choose. But what are they going to do? They're going to put it right back in someone else's bank. The money is always flowing back to someone else's bank. And the banks understand this. It doesn't matter which bank it flows to. They're going to take a mortgage from X bank and then the seller is going to divide, deposited into Y bank, whatever. It's going right back to the banking system. As Jason said earlier, there's only one pool of money. If I got my house and I bought a new job, well, I better get myself a car. And again, to finance the major purchases. Throughout your lifetime, you've been taught to go to someone else's bank to access their money and pay interest. And you've just been told, hey, get the lowest interest rate that you can. Again, regardless of the rate, if it was 0% financing and I had to pay $600 a month, do I care about the rate of interest that I'm paying or do I care about the amount of money that is leaving me and my family? You should care about the rate of the amount of money that's leaving you and your family. Regardless of the rate, it's money that's being permanently transferred away from you. So now we have the bank earning 2% on the mortgage and they're earning 3% on the 5% financing for the vehicle. Car company, as far as I know, they don't have a giant mattress that they stick all their capital under. What's the car company going to do with the money that you give? You've given them or electronically transferred to purchase the vehicle? They're going to stick it right back into the banking system. So, again, the money the bank just continues to get, to multiply the dollars, just like what Jason was talking about. They need to turn that inventory over in the bank, just like those cans of peas. The businesses are virtually identical. The more times they turn those dollars over, their inventory are not cans of peas. Their inventory are dollars. And the dollars are coming from you. And so they're turning that money over and creating more and more and more profit. And they're multiplying that money and they're sharing it with other people. And this could be, you.