This Is The REAL Golden Rule (Canada)

So you worked so hard to build that gold. Now gold is metaphorical in this. We're talking about the cash. You worked so hard to build the cash, but then you gave up the gold. So if you want to have the gold to make the rules, why are you giving it away?

Hi, I'm Little Mond. I'm here with my colleague Sablo Gill. And we're going to talk today about the golden rule. What is the golden rule? Well, let's define it first. Those who have the gold make the rules. We're going to talk about some really important things about understanding exactly how that golden rule works. Let's talk first in terms of what people's main objective is. In terms of what we work with people and their objective is to grow wealth. So let's talk first perhaps about cash. What do people do when they're accessing cash? Do you want to talk about that first Ablo?

Yeah, we'll love that. We meet so many people coast to coast and majority of people share that. Our objective, our financial goal for the family is to build more wealth. Now to build wealth, the first thing that you have to do is you have to start saving money. Because cash, remember, is just a tool to be used to build the wealth. So everybody starts with saving. They save as much as possible. And once they have enough money saved. Now first things first is Liz, where do you think people are saving money? Typically into a commercial bank, in someone else's bank. Whether that account is checking account, savings account, tax free savings account, registered retirement savings plan, whatever you want to call that account, you are saving money in someone else's bank. On repeat, it's someone else's bank. And once you have enough money saved and you have an opportunity that showed up because opportunities come if you have access to cash, so you saved up enough cash and you have an opportunity and to capitalize on this opportunity, what you do is you deplete that cash from that account all the way down to zero and then you use that money to go buy the opportunity or go capitalize on the opportunity. So the objective of capitalizing on the opportunity has been accomplished. So speaking to the golden rule. So you build up that gold and because you had that goal, you were able to capitalize it on the opportunity. So that's one way of how people do things is by using their cash.

Part of the problem with that sublo is that now that money is only doing one thing right. So yes, you've achieved your objective. But now the place that you were building that up is depleted, and you're now going to go and have to work harder to get that source of, of funds back up again.

Well, you know, so we've talked about golden rule all the time. So you've worked so hard to build that gold. Now, gold is metaphorical in this. We're talking about the cash. You worked so hard to build the cash, but then you gave up the gold. So if you want to have the gold to make the rules, why are you giving it away? Now someone else has it now they get to use it for themselves and their family and people that are dependent on them, not you. All you have is that opportunity now. Now that is what the most conventional way of doing things is. And Liz, you're a real estate investor. So may I ask, when you meet with so many prominent real estate investors, how are they capitalizing using the golden rule?

Yeah. Thanks, Pablo. So generally people are using leverage. So that could be home equity, line of credit, or some other way that they're leveraging assets that they already have. So they're basically borrowing against an amount of value that they have in another asset. Just sort of break that down very simply and then they're using that to go and borrow or to go and use that to buy some other asset there. The thing about that is that they don't actually have control over those funds that they're borrowing against. So people feel like that they might because they say, well, you know, it's my equity, it's my home. But I think anybody who's been through an application for home equity, line of credit credit understands that there are many hoops to jump through and the amount that you're even able to borrow and leverage can vary and certainly the ability that that money can actually be called back at short notice. So in terms of actually the true control of that money.

Has actually gone to the bank. It actually isn't in the real estate investor's hands.

Yeah. So just building on that, which is the second way to describe the golden rule. So the first one was cash. The second one was maybe perhaps access to equity. So as homeowners, we work so hard to pay down the mortgage. And as mortgage is being paid down, we are able to re access some of the money as a line of credit secured against the house. So folks think, and this is what is happening out there in the marketplace, hey, I have access to money as a line of credit. So I have access to money, which means I have access to gold and I can capitalize on opportunity. So they borrow against their equity in the House using someone else's money, in this case the bank's money. And the bank has to charge interest on it, so you have to pay interest. But they're okay leveraging money because if they can borrow money 3%, invest at 12%.

They'Re making that extra spread. And that's one way of building wealth, which is one way of using the saying called the golden rule. Yeah, I'm going to borrow money using HELOC capital as an opportunity, objective, accomplish. But in this transaction, the money is gone and then you end up paying the money back to the heloc. Maybe in trust only, maybe in trust in principal. So you have a small portion of the money that's left. But overall the control is not there because the bank can call the loan at any time. This is what most people may not realize, although they think it's a secured loan. But even that secured loan has a clause that it can be called at any time. And the interest that you're going to pay on that loan is benefiting the bank owners, not the person who is doing the transaction. You only made money on that transaction, not on the function called the banking in that transaction.

That leads to the obvious question, Sablo, can you actually have gold and make the rules? Because it sounds like so far you can't.

Yes, well, so the question is, what's the real golden rule?

That's right.

Well, the real golden rule is where you are able to borrow money while your money still continues to grow, no matter what happens. And as you borrow money, you don't have to qualify, you don't have to prove income. And that loan doesn't show up on TransUnion or Equifax, doesn't hurt your credit report. And at the same time, you have full control to repay that loan. Nobody else can dictate that to you. And as you pay back the loan, you get to reuse all that money again without qualifying. How does that define the true golden rule? And that is through the use of the process of becoming a banker. And the tool that we use is called a participating dividend paying whole life policy. So if you go back to the first example of using cash, are you saving cash in someone else's bank? Now, rather than doing that, you start saving your cash as premiums in these policies because your money must sit somewhere. Even if your money is under your mattress, behind your toilet tank, in your wallet, it has to sit somewhere. So we warehouse money as premiums in these policies. And as you're putting the money in, your cash grows in the policy every single day. And if an opportunity shows up, you have access to cash, you can borrow against your growing pool of capital from the insurance company to capitalize on this opportunity while your own cash is still growing and you still obtain the objective of accomplishing to buy that opportunity to build wealth for your family. And as you pay back the money, the money is made available to be reused again from the system.

And I think that's a really, really important point, Sablo, because I don't know about you, but life doesn't always go to plan. So often people have, particularly real estate investors will have money that's just sitting there as reserve funds or whatever else that is actually effectively doing nothing. So there's small pieces of gold that are floating in water and not actually doing anything that we need them to do. But by using this process of becoming your own banker, all of your gold is working for you. While you still have the ability to go and accomplish other objectives, you're not wasting time on parts of your wealth because your money's continuing to grow inside of this product. And that, that in itself, you know, it was a game changer for me. And it's certainly something that, you know, enables you to continue to capitalize on opportunities when they present themselves. And I think you have a really great example, Sablo, of that, of how you just put your gold in a more effective place and then that enabled you to, you know, capitalize on an opportunity of what you needed.

Yeah. So, Liz, thank you for that. I'm going to share that example. So, you know, like, just like yourself, Liz, all our team members at ascendant Financial, we practice what we teach. So I have. I have multiple policies in my family system, including myself, my own policies and wife. I have policies with my daughter. Now, long before I discovered the process of becoming a banker, I had purchased some investment properties. The way I purchased those properties was the conventional way. I saved up the down payment and the remaining camera. Remaining money was financed from a bank. So for this particular property, which I own in Edmonton, I have a tenant which is covering all the expenses. But that being said, the tenant wanted to move out the family. They were growing. The family was growing, so they wanted a bigger place, so the tenant was moving out. And I am very picky on whom I want to rent this place to because I want to make sure I have the right person and it fits my certain criteria. So I knew that to find the right person, it may take me a couple of months. Months, it may take me three months. So I had to cover the mortgage payments in the interim for the vacancy. Now what I did was when my daughter was born a couple of years ago, I had started her first policy. You know, I was receiving child tax benefit from the government. And then I matched that money from my savings and I started that policy for her. And for this particular vacancy that I want to cover, I actually used a borrowed money from my daughter's policy, which I started two years ago. So I called the insurance company and said, hey, I need about $5,000. Insurance companies looked at the cash in my policy. They said, yeah, you got more than enough. Send them a policy loan form. They gave me the money in 5% business days. So to accomplish the objective of covering the vacancies, I used insurance company's money while my money is still in the policy, growing every single day. So my gold of my wealth is inside the policy, growing every day. So I haven't given up the control of my gold. I'm using insurance companies money to accomplish the objective. Now that I have a tenant in that property, the tenant is paying back my loans. Isn't this what the banks do? They have someone else paying the loans back. So same applies to my equation. I got the tenant paying the loans back to my system. And my system is also growing, so I get to reuse the growth system all the time, plus whatever I'm putting back as a loan repayment. And that creates more opportunities for me to recycle that money. Again, thinking conventionally and rather than saving money for my daughter, and this policy is a premium, I would have taken that money and put that money into an resp. That money would have been in prison. And there's no way I could have capitalized on an opportunity where I needed access to capital without having to withdraw that money from the resp.

So again, if you have the gold, you make the rules. Make sure you have the gold at the right place so that you never lose it.

If you'd like to find out more about how this process can apply to you, please click on the videos that you can see appearing beside here.