THIS Is How You Become YOUR Own Banker in Canada!

So I can't emphasize this enough. And your consumer brain is going to fight you on this. You're going to get into basically a UFC match right up here in your head bone. Your consumer brain is going to go.

Wait a second, you knucklehead. You can borrow money from TD bank at 3%. Why on earth would you ever want to access a policy loan at 7%? And then your banker is going to come in and go.

Float like a butterfly, sting like a bee. Float like a butterfly, sting like a bee. And the banker is going to say, remember what I told you? This is all about who's getting the money and who it's being put to work for.

Let's get back to equipment financing. Okay, so here are how most Canadians go about financing the things in their life. They're either leasing, which that involves making a payment continually, but you don't own anything. And I'm often asked, hey, you know, the more I learn about this process, because, you know, I heard so much over the years that leasing is good, especially if you're a business owner, you should lease it because, you know, you get tax advantages and depreciation and all this other, you know, great stuff. And my question is always, well, look at it from this vantage point, because I want you to think like a banker. So is the person who purchased the item that you're leasing stupid?

Of course not. Because what's important to that person, the stream of payments. So if you want to lease, then just create your own leasing company, implement the process, and lease the equipment back to your company and, and be the banker as it relates to that transaction as well. Third party financing via banks, private lenders, et cetera. How many of you have had an unpleasant experience at this point in your life? At some point when you were borrowing money from a bank, commercial bank, third party lender, how many of you have had an inconvenient experience at some point over the course of your lifetime?

Getting a lot of yeses in the chat box, Jason? Yeah, and the third option is you can pay cash. And we already talked about the saver, the debtor. We're going to dive a little bit more into the wealth creator. And here are some examples of personal financing. You have vehicles, appliances, furniture, homes, renovations, et cetera. On the business financing side, you've got buildings, office furniture, computers, photocopiers, human resources, vehicles, farm equipment operatories, and so much more. Is there a better way? The answer is yes, and that way is becoming your own banker. So let's dive a little bit into financing. Using the infinite banking concept.

So Bill's 45 years young, he's a non smoker, and he decides that he wants to implement this process for the purposes of purchasing equipment. Now the equipment that Bill is talking about is, it's a combination of things. So Bill's a dentist and he needs things like operatory digital X ray machines, things that he would otherwise have paid cash for, leased or financed. And so when we had talked to Bill about putting capital into the system, Bill used a real simple analogy. He said, look, I was planning to maximize my contribution to RSPs. I know that I could get 28 plus thousand bucks into an RSP. I'm just going to round that number up to 30,000. It's really easy for me to manage that premium deposit. Now recognize when I said it was Bill who came up with that number.

So think about when you go to a commercial bank and you want to deposit money, there's.

Does the teller ask you how old you are?

Do you ask the teller, can you help me decide how much I'm going to deposit into my bank account today?

Of course not. You already know how much you're going to put in. And so Bill already knew how much he was going to put in. He's been through this class, he's read the books, listened to the podcast, he's been through the material. And he said, I want to start with $30,000 a year. And we said, great, sounds good. So $30,000 goes into the policy in the first year. The insurance company piled up $22,913 in cash value just in the first year. His death benefit grew to $541,000 in the first year. Now, God forbid, if the unthinkable happened to Bill at any point during that first year, his family would receive $541,000 income tax free. The only loser in this scenario is the government because there's no taxable event triggered. Isn't that good?

And in the second year, so Bill decides he's going to go and purchase a piece of equipment. It's $45,000. He initiates a policy loan from the insurance company for $45,000. Now, the insurance company asked him two questions. Would you like us to electronically deposit the money into your account or would you like us to mail you a check? Bill almost fell out of his chair because he was accustomed to can you fill out this lengthy, nosy credit application? Can you provide personal guarantees? Can we run a credit check? Can we verify your financials both corporately and personally? He no Longer has to worry about that because who owns the policy?

Any guesses? Sarblo just wrote it down. Bill is the policy owner. The insurance company itself is the administrator of the contract, not the owner. So Bill calls the shots. When he requests a policy loan, he sets his own repayment schedule. So he said, look, I want to repay no different than the payment I would have been sending away to the finance company for the same equipment. So we said, no problem. That's a $900 per month payment that you were accustomed to transferring away from your practice and by proxy away from your family. So he starts putting that 900 bucks a month back into his system as a policy loan repayment. So that equates to 10,800 per year. He makes those payments for a period of five years. Now he's going to repay more than what he borrowed because capital has a cost. Remember the grocery store example? He wants to put more money into the cash register so there's more money available to provide to more captive customers. He's in the banking business now, as well as dentistry. There's two businesses that everyone in this boot camp needs to be in. The business in which you earn a living and the banking business. You need to be in both businesses. Bill is now in the banking business. So let's summarize what happened with that first policy loan and his capitalization of the system in the first six years. How much money, Sarblo? I'm just gonna get you to rhyme out the answers. If all of you have an iPhone or a calculator and you wanna follow along, we encourage you to do that. And this is going to be a real eye opener for you in terms of who's controlling the use and the liquidity of the capital. So, Sarblo. Yes, Jason. Let's type in 30,000 over six years. That's the premium that went into the policy for that six year period. So that's 180,000 in. Agreed?

That's right.

He also put in $10,800 in policy loan repayments for a five year period. That's $54,000. So when we add those two numbers together, that's $234,000. Agreed.

Yep.

He took $45,000 to purchase the equipment.

So his net outlay is $189,000. How much total cash value does he have in the policy at the end of the sixth year?

So what percentage of his net outlay does he have in his system?

How we doing so far? Type into the chat window. And God forbid, if he Passed away. His death benefit grew to 850,548. But his premium never went up.

So who's in a position of total and absolute control.

If he would have completed this transaction? Because, remember, I can't emphasize this enough.

I cannot emphasize this enough. This is all about how you go about financing the things in your life. This is all about how you go about financing the things that you need in your life. If Bill would have paid 900 bucks a month to lease the equipment, who is getting the money?

Sorry, Bill.

Well, it's leaving Bill. And the institution that owns the equipment is getting the money.

And what are they doing with the money?

Buying more equipment, more adaptive customers.

And so if Bill had financed it, he would have had to have qualified for the financing. He would have been required to make a payment on someone else's schedule, not Bill's schedule. And every payment that he makes is a deposit into someone else's system.

Let's think about that for a moment. And he permanently gives up the opportunity to earn interest on that payment for the rest of his lifetime and every generation that comes after him. Now, what happened to Bill's total cash value? Every single day that he was seeing patients.

Going up, it was rising because the cash value growth is uninterrupted by the policy loan. There's no money leaving Bill's policy.

The lien for the loan balance is on the death benefit of the policy.

I say that again. The lien for the loan balance is on the death benefit. The total cash value of the contract is guaranteed to rise every single day because it must match the total death benefit by age 100 of bill.

And so who is in a position of total control?

And do you think that with Bill knowing that he has more than enough death benefit to extinguish that loan balance and that he controls the repayment schedule, do you think that Bill is sleeping more comfortably at night or less comfortably at night?

I can't tell you the number of people who reached out to us during COVID 19, especially in the early stages, when there was all the uncertainty, all the anxiety, all the fear, and our clients weren't there. Our clients were reaching out to us, saying, thank goodness we're in a position of total and absolute control.

No bank is calling Bill in the midst of COVID to say, hey, you stopped sending 900 bucks a month back to your insurance contract. Why did you do that? Bill's response would be, it's none of your business. I'm the banker.

Isn't that good? Okay, now let's get through to, let's go to year seven. So what we're going to do now is we're going to isolate the loan and we're going to violate Nelson Nash's.

Second golden rule, which is don't be afraid to capitalize your system. The reason we stopped showing the premium deposit here is because we want to isolate the policy loan activity. We want you to see what the phenomenon of what's going on here. So Bill purchases the next piece of equipment, in this case an operatory. We keep the number simple. The operatory is a little closer to 37,000, but we want to keep it at 45, keep the math simple. So $45,000, he initiates another policy loan. He's maintaining the same repayment schedule, so he's not changing his cash flow at all. He's just changing the process of who's getting it. He makes the payments again for another five year window. So how much money in payments went back into the system, Sarblo?

$54,000, Susan.

And what came out?

$45,000 as loan.

So what's the net outlay for that particular transaction?

$9,000.

How much did his cash value grow from year seven to the end of year 11?

So from year seven to year 11, the growth and policy to be exact. Let me just do the math. 226,481 minus 193,098. That's 33,383.

And how much death benefit does he have at the end of year 11?

772,597.

Let's do one more quick calculation.

How much total premium has he deposited into the policy up to this point?

Total premium gone in is $30,000 for six years. That's $180,000 in premium.

And how much has gone back into the system as policy loan repayments? From his first policy loan to the conclusion of his second.

So 54K plus 54K. So let's just do that math together. 54,000 for the first one, 54,000 for the second one, plus the premium of $180,000. Total in is $288,000.

And how much came out?

$45,000 for the first equipment and $45,000 for the second equipment. So it came out as $90,000.

And how much total cash value does he have at the end of year 11?

So the cash value is $226,000. And cumulative net outlay, which is the number that we calculated is $198,000.

So who's the banker in Bill's life now? I'd like to hear from everybody in the chat window. Give me a B for Bill or question mark for I don't know.

Lots of B's so far, Jason. No question marks.

Now if Bill's company owned this policy, so if he had a corporate owned life insurance contract and Bill was the life that is insured, how much tax is Bill paying on the daily cash value accrual?

0.

0.

And this contract is exempt from the passive investment income tax rules.

So how much surplus capital does Bill want flowing through one of the greatest tax exemptions that exists in the tax code today? Renzi. Now Renzi, can you say from a place of authenticity that you and I have not met before? No, we have not met. And can you say from a place of authenticity that I have not preempted you with any of the questions I am about to ask you?

Correct.

Yes. Okay. This contract, if Bill owns it corporately, so we're not talking about personally owned, which Bill in this case owns it personally, but let's presume that his corporation owned the contract, how much tax is he going to pay on the daily cash value growth.

And what is he paying on the death benefit growth in tax?

Nothing.

And when he makes a policy loan through the insurance company, a simple interest that the insurance company calls for because Bill is using the loan proceeds to buy equipment that is going to produce taxable revenue, is the simple interest on the policy loan tax deductible to the corporation?

Yes, 100%.

And when the corporation repays the policy loan balance with interest and the corporation gets to re access everything that it put back in, is there anything stupid about Bill operating his business that way?

And because it's a unilateral binding contract, Bill is the only party to the contract that can change the rules.

Correct.

If he has an instrument that is exempt from the passive investment income tax rules, he pays no tax on the daily accrual, he has ready access capital and his corporation controls the repayment schedule.

Is, is Bill, is Bill's corporation at an advantage or a disadvantage? At a huge advantage. And I'm asking these questions rhetorically because, Renzi, and I'll say this with the utmost professional respect, so many CPAs and Chartered Accountants that we first interact with, they're simply not told this. They simply do not know. Now Sarblo, let's go to the third loan. And I just want to do some, just some quick math. So I'm just going to pick an arbitrary year so if I look at year 19.

So bill is 64.

He put the same $10,800 in loan repayment back into his system. What was his cash value growth from year 18 to year 19? What was that annual increase in cash value?

Let's get the exact number, Jason. So 305,181 minus 295,506. So the annual growth in cash values are 96.75.

Now how much premium did he put into the system in year 18?

0.

So all he did was make policy loan repayments. Right. Now he gets to re access everything that he put back in and his cash value grew by $9,675 that year.

Can everybody in today's boot camp see what, what's happening here? His policy is just getting more efficient because he's aging closer to 100. Every single day that he's aging, his pool of financial value is getting bigger. And so does having ready access capital take away any of Bill's opportunity or advantage.

Or his options?

No.

It increases his ability to capitalize on opportunity that will track him down. Because when he needs access to policy loans, there's no credit checks, there's no income verification, there's no review of corporate financials. Because who calls the shots? The policy owner.

And policy loans are not reported to TransUnion or to Equifax. These are private loans. Private company.

Policy owner is in control.

Now let's scroll down.

And for those who are reviewing this example. So great. I saw a question pop up in the chat. This interest rate is the interest that's being paid, not the interest that's being earned. And so this again, I want you all to just take a moment and just humor me for a second. And I want you to repeat after me. Becoming your own banker.

Has absolutely nothing to do.

Has absolutely nothing to do.

Rates of return. Rates of return has everything to do. Has everything to do with who's getting the money. With who's getting the money and who that money is being put to work for.

And that money is being put to work for.

For how long?

Okay, now let me illustrate the teaching point. So Renzi, if, if I could borrow money from td bank at 3% versus accessing a policy loan at 7%.

Can you and I both agree that 3% is a lower number than 7?

Yes.

Okay, now when I get that loan from TD bank, who sets the repayment schedule?

And when I make a payment, that's a deposit. Into whose bank?

Their bank.

Who is TD bank putting that interest to? Work for regardless of the rate, because remember the rate versus volume. Who is TD bank putting that money to work for.

Stockholders? Not the depositor who left the money there, not the borrower who made the payment. So the consumer thinks, when I go to borrow money, I'm focused on the rate and the payment. When the banker thinks of lending money, what is the banker thinking about?

Volume and where the money's going and who the money's being put to work for. So I can't emphasize this enough. And your consumer brain is going to fight you on this. You're going to get into basically a UFC match right up here in your head bone. Your consumer brain is going to go.

Wait a second, you knucklehead. You can borrow money from TD bank at 3%. Why on earth would you ever want to access a policy loan at 7%? And then your banker is going to come in and go, float like a butterfly, sting like a bee. Float like a butterfly, sting like a bee. And the banker is going to say, remember what I told you? This is all about who's getting the money and who it's being put to work for. So when you repay money into a company that you're now a co owner of, and I repay my policy loans at 10% interest, that's going to bake your noodle. I repay my policy loans at 10% interest because I'm putting more money in to the cash register in my grocery store so that my grocery store can go buy more cans of peas to sell to more captive customers. Because when I repay that policy loan with interest, who is the insurance company putting that money to work for.

The policy owners.

For how long?

Right? And is there any such thing as having too much money in the bank? You do have to wage this fight with yourself because until you recognize that, the solution won't matter to you because you're going to be focused on rates, rates of return and rates of interest. And I don't care about any of that.

Every single day that I wake up, thank God, I thank the Lord above every single day that I wake up and I'm able to take air into my lungs. I can, I'm blessed to go make a difference in someone's life. Today.

I didn't wake up going, gosh, jeez, I wonder, I wonder what the rate of return was on my crypto coins.

Fungible tokens and throwaway tokens and whatever it is I'm concerned about.

Getting up tomorrow because I know that my net worth is going to be bigger than it was When I went to bed the night before.

And I get to control this function in my life as it relates to my needs. So if Bill can do this for equipment in his business, it's, is there anything that he can't do it for?

And if you're the banker, Renzi, and I'm the banker, and you and I both have an opportunity to participate in an investment that produces some rate of return, I don't care what that rate of return is. And we go up against Verne and Sarblo. And Sarblo are not bankers.

And they go, well, guys, you're putting money into these insurance policies. What kind of rate of return are you getting?

And Renzi and I say, well, I thought we were talking about an investment opportunity that you wanted us to participate in with you. Yeah. So Renzi and I are going to take a policy loan and use the insurance company's money to trigger the investment. Vernon and Sarblo are going to use their own cash.

To purchase the investment.

All four of us get the same return. But who came out ahead?

We did.

So I got to stop here and make sure that everybody grasps this because this is the problem.

And once you recognize the problem, the solution will become very clear and you'll know exactly what to do, which is to recognize the importance of controlling the banking function personally in your life.

Why haven't you heard about this before? Because the banks can't make money off of telling you about it. That's why you haven't heard about it before.

I have not had one affluent, high net worth client ever sit down with me and say, can you show me a basket of mutual funds to put my money in?

What they say is, what are other high net worth, affluent wealthy people doing? Because that's what I want to be doing.

And the bankers are buying these contracts by the truckload.

Anybody heard of that little automobile manufacturer called Ford Motor Company?

They have 3.2 billion in cash value in dividend paying, participating whole life contracts. It should strike you as no surprise that during the TARP bailout that Ford Motor Company was the only car company that opted out of TARP bailout money.

What does that tell you? They had a lot of assets to mortgage to the hilt to get themselves through that mess, including collateralization of those cash values. Isn't that good?

Was that helpful to see that example now, Sarbo?

I don't know.

Were there any other points you wanted me to go through in financing? What did we talk about? The four characters in the financial play was Bill the depositor show of hands. Thumbs up. Yes. Bill was the depositor. Was Bill the borrower? Was Bill the banker. Was Bill the bank owner. How we doing so far? Bill's talking to his dentist buddies. True story.

Bill's talking to. And his real name is not Bill, but his real name does start with a B. He's talking to his dentist buddies at a conference in Las Vegas.

And he calls me and he says, I'm standing around here talking about this with my buddies at this dental conference, and they all think that I'm clinically insane. So we put a time together, we talked to Bill and his buddies, and they didn't know what they didn't know. And so once we went through the same example, all that I did is I asked them. So we went through purchasing options, leasing it, financing it, paying cash, or the infinite banking concept. And then I asked his buddies, when we went through the logic of it, I said, how would you recommend Bill go about purchasing this operatory? And not one of them, not one of them said anything other than the infinite banking concept.

Because once you understand the problem, the solution becomes clear and you'll know exactly what to do. Isn't that good?