The Worst Infinite Banking Advice Ever (Canada)

We're already making premium payments, but into somebody else's bank. Like we're not actually changing that, we're just putting it somewhere where we're actually going to get the benefit rather than somebody else. So to sort of explain what I mean more is that when you're putting deposits into your savings account, that is effectively the same thing. You're putting aside money and you're depositing it on a regular basis to build up savings so that you can go and use it for opportunities. The challenge with that is that.

Hi there, Vern McCarty here with the Ascendant Financial team with my wonderful colleague Liz Lamond. And today we're going to talk to you about the worst advice that you can receive around infinite banking. And I like to joke around and say the worst advice that I would ever hear is not to do it at all. But I mean, I think, Liz, it goes without saying, obviously, you know, you have to take the time and energy and effort you have to put in the work to learn about the process. So one of the worst pieces of advice would be to jump in too early to try to get too much done in too little time or try to take advantage of it not working with a good coach or things like that. Those are kind of no brainers. Like you got to take the time and energy to learn about the process. What are your thoughts on that? Liz?

I think often people's focus goes directly to numbers or rates or those kinds of things. And the really important thing is to understand that, that the problem that we're solving is not around rates or numbers. The problem is solving is controlling the banking function as it relates to your life. So really understanding that and not getting too hung up in the other pieces because once you understand that piece, all the numbers and everything else makes sense and it all ties around into understanding what is it that you're wanting to change in your financial picture and how can this process help you do that? How can you stop leaking money everywhere such that you change where the money is flowing so it's no longer flowing away from your family, but it's flowing back towards you so that you can change your opportunities, how you can finance things and exactly the results that you'll be starting to get.

You said earlier, before we started the video, you said sometimes people hear things about infinite banking and pick out little pieces of it and then they go, oh, that must be what this is. And I can do that. So the first thing that I would offer is take some time to actually think about banking. Nobody thinks about banking and the actual flow of money. You just mentioned it. Money's flowing away. Well, that's a result of banking. That's a result of someone else controlling the banking function. If I'm controlling the banking function, I'm going to be the one collecting and accumulating the capital that I'm presently sending away from myself and my family forever. If I'm the one collecting and accumulating the capital, don't I now have more capital and more access to cash to do more things with? Right. And take advantage of of opportunities.

And something that, you know, we find sometimes people do is they'll hear about the ability to take policy loans and policy loans are awesome. But there needs to be a period of capitalization. Anything that you are offered in life where there's not an equation of time to build something up you should probably be suspicious about. So understanding that this, this is a concept that's going to take time. It's not a short term fix. It's something that's going to take time and some consistency in how you are starting to change how you manage your money. Very much like a piece of real estate. So when people go and purchase a piece of real estate, they understand that it's going to take some time. So in the early years of a mortgage, for example, people don't expect to have a lot of equity in that, in that mortgage. They expect to have to make regular payments and they expect that it's going to take some years for that principal interest balance in that mortgage payment to shift. And really in the first five years there's not going to be a lot of feeling like you're making much progress. But as that mortgage progresses, that equation shifts. This is very, very similar. It's going to take some time to capitalize your system and have that equity that's building up over time and then that equation and once that shifts, then you start to get some amazing opportunities and results with what you can do with what you've built up in terms of that equity within your own system.

Liz, you hit some really good points there. I have to point out the Nelson's book Becoming your own banker because Nelson taught us his five golden rules right in the very first one. Rethink your thinking. You have to think about the banking process. You have to think long range and don't be afraid to capitalize. You got to start thinking about the process of becoming your own banker as a business because guess what, banking is a business. So if you're going to become your own banker, you're going to get into the business of banking. If we want to start a business, I don't know a whole lot of businesses. Just like you said, Liz, if you can start with no money down and it's going to take off tomorrow, maybe be a little suspicious and that's not how the process of becoming your own banker works and rethink your thinking. Well, we're using a permanent, participating, dividend paying, whole life policy as a tool to implement the process of banking. Well, if I'm purchasing a insurance policy of any kind, it doesn't matter what kind of policy it is. Obviously there's a specific type of policy for the process of banking. But I'm saying in general, if you're buying insurance, whether it's car insurance, life insurance, universal life term insurance, I don't care what it is, there's a premium associated with that. That is a cost. And that's normally how we're taught to think about insurance. Oh, gosh, it's a cost. And I was telling you before the call, I've got two premiums coming up in November for a couple of my policies. And I'm like super pumped to put that premium into the policy because I know the more premium I put in, the more years that go by, the more I capitalize, the more and more momentum I'm building in my policy system. So I cannot wait to put that premium in because now I'll be in the fourth or fifth year of those two policies and they've got some really good momentum built up. So rethink your thinking.

Part of rethinking your thinking is being aware of what you're already doing. We're already making premium payments, but into somebody else's bank. Like, we're not actually changing that, we're just putting it somewhere where we're actually going to get the benefit rather than somebody else. So to sort of explain what I mean more is that when you're putting deposits into your savings account, that is effectively the same thing. You're putting aside money and you're depositing it on a regular basis to build up savings so that you can go and use it for opportunities. The challenge with that is that money's generally, especially in current rates, not really doing anything while it's piling up there. We're talking the other day about banks advertising high interest rates and that's being a quarter of a percent. I don't know about you, Vern, but I don't really relate high and quarter percent as being the same thing. So understanding that putting our money somewhere where it's actually growing daily such that we have that opportunity and we're not wasting time while we're continuing to capitalize our system.

Liz, you really struck a chord there. And actually I want everyone to click on the link above right now. Our colleague Dan Allen did an amazing job on a video where he actually goes into the lost opportunity or I guess inflation, right? The loss of purchasing power on our dollar. And he talks about how important it is to put your money somewhere where it's working every day, where it's growing, where you can access more capital than what you're putting in. Because guess what? In 50 years from now, regardless of what $5,000 buys, $5,000 is going to buy whatever 5,000 dol. So if I can start capitalizing system and continue to say put $5,000 into that system for the rest of my life, but I'm able to access a heck of a lot more than what I'm putting in, how much value is that going to add? What's that going to make available for me and my family if I can access more than what I put in? Right.

So it goes back to what we started, the video with Bern, which was the worst banking infinite banking advice ever is to not start.

And to that point, Liz, just to add to that, a lot of times people get it in their head that like, oh, becoming your own banker, I must need billions of dollars clearly to get started on this. And I always say to people, it doesn't matter how much you get started with, it matters that you get started. And it is a system and it is a long term. I can always build and add to it over time. So just get started.