The TRUTH About Your RRSP/TFSA In Canada That NO ONE Tells You

You're the one who put the money in. You're taking all the risk to grow the money. But someone else has taken over the control and have put that money in motion and made millions from your money. While you are locking your wealth away in RSP and you're trying to build your life for the things that you need to finance by using money from the bank. That's absurd.

The truth about your RSP and TFSA is that no one tells you. Hi, I'm Peter and I'm here with Sarval. We are both practitioners of infinite banking concept out of the Nelson Nash Institute. Today we're going to debunk the myth about TFSAs and RSPs, get really down to the truth and understand truly why they're in place and how they help us. And just maybe to get you rethink your thinking. And I go back to really a couple simple concepts we talk about, right? The majority of the wealth is held by the minority of people out there. So why do we do what the majority does? The other part is just rethinking our thinking. This is all the knowledge that we know and then outside of that is the knowledge that we know we don't know. But there's a massive amount of knowledge that we don't know we don't know. And that that kind of will set the stage for what we're talking about today is I think a lot of things we just do, we do because we do. But today we're going to just peel back the ending a bit about these government qualified plans and how they help us or just think from a different ang.

Sarblo. Let's begin. The first tool that we're going to talk about is rsb, which stands for Registered Retirement Savings Plan. And just a quick disclaimer, you know, we're not here to bash any product. That's not the objective behind this video. The objective behind this video is to provide clarity on and debunking the myth behind RSP and tfsa. These tools, these products are what they are, it is what they are. And we just hate to provide more polarity on it. Peter, one of the things that you said and it is so important for us to understand if the minority of the people in this world control and accumulate wealth, then why do you continue doing what the majority is doing financially? Why? And Peter said it best. He said because we are limited to what we know. Our knowledge to what we know is restricted to what we have consumed in life so far. If this represents what we know we know. Then there's this representing what we know we don't know. And then there is this that represents what we don't know we don't know. So what we don't know is always more than what we know. And Nelson Nash, who's the founder of the process of becoming a banker, one of the things that he talks about in this book, which if you haven't read this book, you have an opportunity today. The link is underneath the video description. Order a copy and you won't regret it. One of the things that Nelson talks about in his book is human conditions, human behaviors. And one of the human behavior he talks about is called arrival syndrome. So what that means is. So, Peter, do you know somebody who is suffering with arrival syndrome?

I think I've run into a few people in my lifetime.

Right. So Arrival syndrome, what does that mean? It means that you. If somebody says, yeah, I'm suffering with rival syndrome, what it means is that you have arrived in knowledge. You have learned everything that there is to know in this life so far. So you have arrived in knowledge so far. Arrival syndrome. And like Peter mentioned, so do I. I know I come across folks who are suffering with stage four rival syndrome. So if you're not suffering with stage four rival syndrome, then this video is for you. So just tune in till the end. The first product, rrsp, which stands for Registered Retirement Savings Plan. So when we look at the word retirement, our mind thinks that this is the best place for me to warehouse money for my retirement because the product states it's a retirement plan. And the second thing is it's Registered Retirement Savings Plan. I'm going to come back to the word registered. But let's talk about savings. You can only save money if the money is sitting in cash or if the money is sitting in gic, Guaranteed Investment Certificate. Because saving has its attributes. Attributes, meaning you don't want to lose that money. That's why it's called saving. But in reality, what are most Canadians doing with the money in rsp? Are they saving or are they investing? Your money may be sitting in mutual fund. Your money may be sitting in stocks and rrsp. So it's not saved money, it's invested money. One of the myths behind RSP that people may think is if I invest money into stocks or mutual funds and if I lose money in the rsp, the government is going to help me recover my money. Well, that's a lie. Government doesn't care what you do with your money in the rsp. The risk is upon you to invest and make those decisions where you want to invest that money, where you want to grow that pool of capital for retirement in future. Now let's come back to the first word, registered. So it's a registered plan and here's what it means. Let's assume someone who is 35 years young and they are looking to retire, they're looking to create that retirement paycheck at maybe at 65 or 71 or 72. So they look at quoting or warehousing their money in an rrsp. And this product is registered, meaning for whatever dollar you put into rsp, you don't pay tax on that dollar. Key word is you don't pay tax dollar as of today. But at some point in future as you putting money into this RSP and you don't, you're not paying any taxes on this dollar and the money is growing and compounding. And let's assume you're doing really, really well. You haven't paid tax or any of that money. Your wealth has grown and so has the tax problem. You haven't paid tax on it today, but at some point in future, as you are building this wealth, you're going to have to withdraw that money in future. And when you withdraw that money in future, you have to pay tax on it. So going back to the example that we're using, so 35 year gentleman who's starting to put money into RSP because he wants to secure his retirement. So from 35 till 71, this gentleman can put money into RRSP, but starting age 72, he cannot put any money into RRSP. The law dictates they deposit into RRSP stocks and the withdrawal has to begin. And the government controls how much you have to withdraw every year going forward. Government is waiting for the windfall that they're going to receive on all the tax free or tax deferred growth that they've provided you in this product. Now here's an interesting thing. So you haven't paid taxes on this money at all and it's growing. You're 35 and now you reach 71 and you're ready to retire from 35 to 71. Peter, how many years is that?

That's 36 years.

36 years. So you've been growing wealth in this tool for next 36 years. You haven't paid any tax on this money because it's been deferred. And 36 years from today you're 72. What do you think is the tax going to be at that stage? What does the history say? About tax. Taxes only go one way up. So you've deferred the tax, but you've also deferred the calculation of tax. That big tax is unknown. And you've been doing this to build retirement. You've taken all the risk to grow that money. You've been paying management fees on these investments and you've taken all the risk. And now you have. We build up. And the big unknown factor that can put you in a difficult position at retirement is the tax. So if you're looking to build wealth predictably and safely and have that money being available to you at retirement, how does it make sense to do that in an rsp? Because it's a big unknown. Now again, we're not trying to bash any product. It is what it is. It's important to realize and understand what the characteristics are. Now the other thing to consider is so tax deferring. Tax deferring. The calculation of tax is one thing. The other thing that you should consider if you're putting money into RRSP is who's going to control the use of this money from now till the next 36 years? In the paper, it's your money, but you don't have any access to that money. Someone else gets to control that money. And that someone is where the money is sitting with the financial institution, gets to control the use over that money going forward for the next 36 years. You're the one who put the money in. You're taking all the risk to grow the money, but someone else has taken over the control and have put that money in motion and made millions from your money. While you are locking your wealth away in RRSP and you're trying to build your life for the things that you need to finance by using money from the bank. That's absurd. You end up paying interest while someone else has the control over your money. Do the math. How much interest are you paying on the things that you finance today? Per month interest on house, interest on car? And then think about is your RRSP account increasing at a rate higher than what the interest you're paying to the bank finance to the third party finance companies today? So if you're paying thousand dollars per month on financing someone else's pool of money for the house that you need for the car that you need for your family as a cost of borrowing, is your RRSP increasing every month by thousand dollars? I know the answer, but you should do your math. And if the answer is no, how is that progress? One of the things that resonated with me and for clients at SN8 Financial from Nelson's book. Becoming your banker is you cannot get a better rate of return investing your money into any instrument until you take over the control of the banking function for the things that you financing for your lifestyle. Now we talked about RSPs. The second thing that we need to talk about is tax free savings account. Now no different than rrsp. If you're warehousing money in tax free savings account, well you're putting after tax dollars. So any growth that you can have in tax free savings account, you don't have to pay tax on that money ever again. That money will never see any taxes. It's different from RSP because RSP is tax defer money that you put in rsp. You don't pay tax on that money yet, but in future you have to pay tax on it. But in TFSA you pay the tax on the money and then you put that money in TFSA and any growth that you have in TFSA is tax free. But again the question is who is controlling the use over that money? Is it you? Someone else? It's someone else. Because where that money is sitting today, wherever whichever financial institution that you're using, you create that TFSA account, the tax free savings account, that institution is controlling the use over your money. And again, if you are achieving rate of return in tfsa, great. I hope you earn ton of rate of return on TFSA account. But the question is the rate of return that you're achieving on your accounts, is that more than the interest that you have to pay to the third party finance company for financing things that you need in life? If the answer is no, then you're not making any progress.

The question that we get asked all the time is is there a better way? Well there is. There is a better way. There is a better place where you can warehouse your money. And as you put your after tax dollars in that money, that money will never see any tax in the future. It's all tax free. And that tool is called a participating dividend paying whole life policy. Make sure you check the video that's going to pop up right on top the attributes of participating dividend paying whole life policy. And as you warehousing your money in these policies, as the policy builds up from this policy, you can control the banking function in your life. No matter what happens in life, someone has to control the banking function for the things that you finance in life. And every decision that you have made with your money is being a financing decision. Either you use your cash to buy things and you lose the opportunity to earn interest on that money, or you borrow money from someone else and you pay to someone else back in trust because you're borrowing their money to accomplish the financing decision for your life, for buying the things that you need. So either you pay cash, lose interest, or you borrow money and you pay in trust. So you're financing money all day long. Every decision that you made with money is financing. And maybe you've been you borrowed money for investments or you paid money into investments of your own cash and that is also financing. So if you're going to finance money, then there's a better way to finance money, which is through the process of becoming your banker. So do check out more videos on our YouTube channel which dives into the process of becoming a banker. But do leave your comments underneath this video as to what resonated with you when it comes to rsps tfsa. Did you pick up something new? Please leave your comment. And if you like what you see, make sure that you share this video with someone else who can benefit from this education.