Use THIS to Combat Inflation!

You get to control how you finance the things that you need in life. And you're using a warehouse that you've built, and it just cannot go backward. It just keeps getting more and more and more efficient. I was just in San Diego a week ago and I thought that everything was far more expensive than maybe what I would be accustomed to when traveling on business. So literally everything way, way, way, way, way more expensive. And in our day to day lives right now, with what's going on in this inflationary environment that we're in, so, so many people that we talk to or even people that you just maybe interact with, like, you know, the Uber drivers that I was talking to and the people working in restaurants and hotels, they use the word inflation, but maybe don't really truly understand what it is other than, you know, the impact that it has on a person where it's like, okay, generally everything has increased in price. Yep, I still only have the unit of currency. Like, I'm still earning the same wage or even if I got an increase in wage. You're dealing with a unit of currency to buy something, and your purchasing power has been greatly diminished. That is not a way to get ahead financially in any person's life. And so you contrast that with the conversations that are happening with clients who have been policy owners for many years. Many years, meaning they've had a policy in place for seven years or more. And when folks first got started on their journey, we, we were in the lowest interest rate environment that we had ever experienced. We were not dealing with rapidly rising inflation. We were not dealing with rapidly rising interest rates. So the cost of borrowing, you know, climbing very quickly, all of those things were not part of our reality. And so when we're kind of shouting from the rooftops that we would always get the question in every, every, every educational event that we did, how does this help when inflation is high? While it's tough to really immerse someone in that, if you're not dealing in a high inflation environment, you can talk. So we would say, well, this is gonna, this is gonna beat the pants off of inflation. Okay, what does that even mean?

I don't know if we ever use those exact words about beating the pants off of it, but I mean, I think the gist, the gist would have been implied.

Okay, well, so follow my logic. You're dealing with a unit of currency, and that unit of currency now is being applied as premium into a policy. And that price, regardless of what's happening in any inflationary environment, that price can never go up. So your purchasing power inside of that insurance contract, you're already at an advantage. If you're putting a dollar in premium into the policy and you have a seasoned policy that has aged, just call it seven years plus. And now that dollar that you put in is accumulating far more than a dol. Still working with the same unit of currency. But now your purchasing power has actually gone up.

Yeah, every time you put a dollar in, you're getting a dollar 10, a dollar 15, a dollar 20 back.

Like a, you're not getting that anywhere else. It's just, you just, you're just not getting that anywhere else without taking on risk, mind you. But let's just take a look at what's happening. We're taking our kids on a vacation and they want to go on these roller coasters. And I do not like roller coasters. I'm very risk averse and actually had a conversation with an actuary about probabilities of an accident on a roller coaster. And so I don't like roller coasters. I won't on them.

He didn't have very good news to share.

No. And so just, it doesn't mean that.

Jason doesn't like fun. For those that are listening, Jason's a fun.

I really, yeah, I'm a very fun guy.

He's not, he's not anti fun, he's just anti roller coaster.

I will not get on a roller coaster and I won't put my money on one either. And especially when you see what's going on right now. Sure, there's going to be wonderful opportunity created for people who really enjoy investing in the stock market and speculating, you know, different opportunities to, to take an ownership interest in these large businesses that trade in the Dow Jones or the NASDAQ or, you know, these stock markets. But really what you are genuinely doing is you are speculating. Whereas if you are building your warehouse of wealth and from that place you can go and speculate, then that's your privilege. You can go and do that. But to combat inflation, what does that even mean? Like, does that mean we're going to send you tactical gear and we're going to put you through a boot camp on how to go and, you know, combat inflation. Like imagine the scenes from Rambo movies. Like that's not what we're talking about yo inflation. Hey, who keeps ringing that bell trying to concentrate? Okay, so it's. If you think about combating inflation, then the discussions that we're having around that is. Well, ideally you would want to have More purchasing power. And if you have an engine that's producing or purchasing power with the same unit of currency, how many units of currency do you want flowing through that engine? It's really no more complex than that because again, the premium going into the policies can never go up. It can go down.

Right.

If, and again, you know, we don't know whether or not they have policies that have that flexibility of additional deposit room or accelerated deposit option or whatever the insurance company, you know, characterizes that part of the premium to be. But when you're in a position of total and absolute control. So yes, I was concerned when I was traveling. I was like, oh my God, like everything is more expensive. Like sir, can I get you something to drink? Yeah, may I have an iced tea? Yeah. That'll be $427, please.

Whoa.

Okay. That's a little bit more expensive than, you know, paying a buck 40 that you might have been accustomed to a few years ago.

You're down in the States and so you know, right now I think, well, at least when you were down there, the exchange rate wasn't particularly awesome. So that would be an extra adjustment that has another impact. But that's not really what you're referencing here. You're talking about you travel down in the States frequently for business. You're used to going, buying something, it's this amount of US dollars and now it's this much more US dollars for that same equivalent item. And interesting. I was having a chat with my father in law here the other day. They just crossed the border here. They were visiting and they, they drove down to Seattle to see my brother in law and his family. They have a vehicle, they fill it up with premium because that's what the vehicle requires. And you know, coming from Alberta and driving through, they filled up in like Jasper. The last, the last Alberta hit before they could cross the B.C. border. And what's the old adage of BCS bring cash? And he's filling up a premium I think. I don't know the price today, but it's like $2.70 or something a liter. It's up there. It's up there. I think, I think regular, like the other day I filled up and I think it's because I don't buy anything that requires premium. But I think the regular gas price was 225A liter or something like that. Right. And so there's a big parity between, you know, Alberta and B.C. just in that item. But then he crossed the border and of course it's in gallons. But he did the math and the result was it was not quite half price. Although it was much higher than the last time he was in the states. That is true, comparatively speaking, it was still dramatically lower for that line item than it was in the BC border versus when he crossed, he crossed into the US border. So yes, that price of gasoline has gone up in the US as well for sure. But I'm just like recognizing the relevance. And so that goes to something else we were talking about earlier, Jay, which is some of the pressures, the things that are going on that are flying, forcing the general rise of the cost of everything. Now we could talk about the money printing and quantitative easing and all these kind of stuff, but one of the key things that's driving that cost up in Canada is taxes. And, and it's the tax on the tax on the tax on the tax that you pay for all the goods that you buy. And when you increase, just for an example, let's just take one line item, call it fuel taxes and you increase that. Well now every single truck on the road that brings goods from this warehouse over to the store that you're going to buy it at, it costs them a lot more for that same fuel to bring it from A to B. Now the guy that runs that business or the guy or the gal, the person owns that business, they have to increase their rates for shipping.

Yep.

So that they can accommodate that rise. And that means that the person buying the goods that are at the retail store, it's the grocery store or it's the clothing store, I don't care what the store is, they now have to raise their rates because it's costing them more to get that good into the back of their warehouse for their inventory. So a slight rise in just something like fuel taxes or we'll call it, oh, I don't know, a price on carbon, whatever it is that they're going to do there, these increasing incrementally things, they're stacking on top and stacking on top, stacking on top and then it's creating a ripple effect that's pushing up the end user goods for every single person. And something that we learned from Nelson years ago. I remember we were at one of his seminars down in Birmingham. Nelson told this story about driving through the States on long stretches of road. He would drive frequently, love to drive and look at the mountains, look at the trees. And he would, he would travel to between doing seminars and he did seminars all over the US all the time. And he remembered, you know, driving behind this large freight truck and on the back of the freight truck it had last year, this truck paid $17,500 in taxes. You know, and he says, you know, you follow a truck long enough on a long stretch of road, your brain gets to thinking. Yeah, and Nelson sure liked to think. And he's like, wait a second, that truck didn't pay any of those taxes. I paid those taxes. That's right, because all the business owner is, is a tax collector.

That's right.

Because they're required to charge and pay taxes on everything else. They're collecting it so that they can remit that to the cra. So the business didn't really pay the taxes. The consumer had to pay for that. And that's the case all the time. The consumer pays for everything. There's many factors going into causing this rise in the collective price of goods. But one of those items, if we can get really clear about it, is the rising cost of taxes on things such as fuel that's adding unnecessary pressure into the pocketbooks of every Canadian. And before I get off my little soapbox, I want to circle back to what you started with talking about, you know, an individual with a seasoned policy. They got a policy seven years ago, eight years ago, nine years ago, ten years ago, and let's just say they were putting in $10,000. Well, $10,000, ten years ago they locked in the price of the Canadian dollar. Ten years ago they're paying the same $10,000, but they're paying it with weaker Canadian dollars year by year. So now in an inflationary pressured environment, the dollar is worth less, but they're paying that same fixed amount of. So effectively they've inflationarily protected the dollar when they got their policy started, as, you know, way of looking at it, and now they're in a position where they're getting there. You know, they're putting 10 grand in and they're getting, you know, 12 grand or 13 grand or 14 grand back out. Every time they do that with the increase in the policy, it's a pretty wonderful thing to be a part of without having all the unnecessary risk elements of the typical financial structure that everyone else is out there pontificating about these days.

Yeah, well, you get to, you get to control how you finance the things that you need in life. And you're using a warehouse that you've built and it just cannot go backward. It just keeps getting more and more and more efficient. And so the catch up conversations, the policy reviews that are going on, policy owners, clients are saying I'm really starting to see an entirely new element of what it means to truly become my own banker because of all of these external factors that are part of my financial world now. And, and it's so true. Nelson said, the more you see infinite banking concepts, the more you'll see you didn't see. And so as these different things are happening, whether it's increase in, in taxes, which brace yourselves, there's a lot more of that coming next year until we get, you know, a change at the federal level where some of these nonsense tax measures can be obliterated. But brace yourself, you're going to be paying more for everything, everything.

And the sooner, because of the taxes, you'll have less, potentially less of what you're accustomed to, to use to pay it.

It's not potentially you will. And if you ask yourself pure logic, do we believe the government's going to need more or less money in the future? Well, the answer, logic would tell you more because when you have unlimited credit and there's no consequences for bad spending decisions other than being voted out of office, what do you think the human condition is going to be? Let's be frugal. Not a chance. And so you've got to shield your hard earned money not only from inflation, but from onerous taxation and all those things that can really destroy the wealth that you're working so hard to accumulate. And the policies just can't go backward. That's, that's one of the marvels of these unilateral binding contracts called life insurance policies that are participating and clients are telling us, we heard it, hey, this is cannot go backward. And regardless of what's happening, political turmoil, you know, increase in taxes, inflation, my policies just keep growing and they will continue to do that. Again, it takes us right back to the fundamental truth. Your money must reside somewhere. What better place to have it reside than here where you've got this engine that takes a much weaker dollar today and produces the right strength dollar exactly when you need it. Like if I reach inside one of my policies now that I put a dollar into in premium and it's generated $1.60 in growth, that's a straight uppercut to inflation, like KO'd, down for the count. The fight has been stopped. The belt is coming on like, you know, so yeah, we beat the pants off of inflation and it's only going to continue because of everything that's going on out there. And I know that with the whole climate thing, like they've, I don't know if they Bought the thermostat yet with all that money, the big giant thermostat that they're going to put up on the parliament building to turn the temperature down in the country, like just waiting. I wonder if it's going to be digital or if it's going to be one of those like giant, you know, remember the old when you had to turn the okay, can somebody bring that down a degree so we can save the planet?

Let's just charge people more. It's not a climate program, it's a tax program and people are sick and tired of it. And if you're in a position where there's an absence of control short of, you know, voting, voting somebody out and bringing someone new in, regardless of that, you still need to shield your wealth. You need to protect the what you work so hard to build. And inside of this engine where you're building this warehouse of wealth, you're paying no tax on the daily accrual of cash value growth which is constant daily. It just keeps going up no matter what. You pay no tax on the death benefit proceeds when you have a named beneficiary or beneficiaries plural. If you're a business owner, the policy is exempt from the passive investment income tax rules. So if you have surplus capital in your corporation that needs to reside somewhere, what better place to have it reside than here? It's just logic. Is it logical to shield what you've worked so hard to build? Yes. Are you motivated to do that? Absolutely. Then you've got to get going. Either create your program or expand your program. And that's what our clients are doing. Like our phones. We keep fire extinguishers next to our phones and our computers now because they're literally burning up with people. I just, I need to get more capital inside of my warehouse. How do I do that? Again, it's so positive for that when you're having that conversation and a person says, you know, outside of this, like this is really the only asset on my balance sheet that is outpacing inflation significantly. That not only feels good, but it creates a stress free way of life as it relates to utilizing that and what you're doing with it in your family or inside of your business. And it's just incredible.

Well, something that just popped into my brain, you know, thinking about a gentleman who's client, awesome guy and you know, he's got a great policy, a whole family set up with great policies and he was involved in some of the crypto space and stuff and that's all fine and dandy again. There's, that's a big monstrous space. That's like saying, I live in Canada and that's a pretty big country. Right? So yeah, it's like you tell someone, you go to, you go traveling and you tell someone that they, you live in Canada. Like, oh, do you know Jeremy? Like, yeah, of course, Jeremy from Moncton, whatever. He's a great guy. But he was doing some things with a service that's recently basically going to receivership, which is Celsius. It was a, you know, many of our listeners might even be familiar with it. Basically you could park money there and you could earn interest on it, you know, a couple different ways. The problem is when the market started to tank, what they had is they had a demand problem. So similar to how like a bank, if you went and you asked to, you know, get all your money out of there, we had a run on the banks. There was basically a run on this crypto exchange facility and that, that caused them to squeeze of capital. They were under capitalized basically for the purpose of that.

Right.

And the result is, you know, basically the whole organization's going into receivership. He's going to walk away. He'll get some of his capital back, but he won't get all of his capital back. There will be a loss there. However, he borrowed from his policy to go and fund that. So the money in the policy is still growing and he's using, because he's an honest banker, he's been using his, his corporate cash flows to make repayments right on the system that he did. So he's doing exactly what Nelson would suggest. He's following the process very effectively. You know, it doesn't mean that he's not going to have a loss. What it means is that the loss for the, you know, investment, the speculative investment is not nearly as bad because the source of funding came from the policy that was always in motion. So the original dollars that he put into the policy never stopped working for him.

That's right. And they never will.

And in that whole process, there's a whole bunch more death benefits that accumulate. And in this case, it's, it's a lot. It's not a little bit, it's a large amount. Yeah, heaven forbid something were to happen to this gentleman, a lot more money comes in and it recovers. It'll recover the loss and in fact, it'll recover the opportunity cost of that loss for his family. So had he not had the policy and he just shoved his money directly into the exchange. And the same situation happened, same amount of money, he wouldn't have any of it. Right. So you can't get a better again, quote unquote rate of return without first controlling the banking function first. So now he's got a multitasking effect on capital. He's got constant motion on his original money which never left the policy. He used opm, he used leverage, he used the insurance company's money to go and get the investment speculative deal, even though there was a loss. Yes, he does have a policy loan, but he controls the repayment terms. He gets to deal with that at his own schedule. What works for him.

Yep.

And he already had made a plan to do that anyway because he was very intentional about what he's up to. The end result is we don't always hit home runs when it comes to our investment life. I don't know about you, Jay, but you've probably had some ones that didn't go as planned over the course of your time on planet Earth. Like yeah, I know I've had a couple doozy. In fact, I'm still dealing with some of them. But what I do know is if I had understood this process when I was 18 years old and before I started buying my next piece of real estate, I first had started injecting capital into a system like this, I would have a boatload more capital that would have helped me deal with the renovations, the vacancies, the tenant issues, all the miscellaneous crap that happened in my real estate investing career that would have helped manage all that, you know. And interesting enough, I have a one of my units in, in Edmonton. I just got notified that the tenant gave notice here the other day. So I'm thankful to have someone looking after that, that particular property. But you know, we're back into, you know, filling a vacancy again. So that's just the nature of the beast. That's part of what the real estate investment world is like. But had I had capital starting from day one, building up and building up and building up inside of a system of policies like I do presently, there would be an awful lot more available there to take advantage of, more opportunity. Because right now with the market shifts that we're seeing happen, the opportunities that are going to be showing up are going to be very, very, I think, high caliber. There's going to be a lot of really, really positive things that we're going to be able to see for those that are have ready available access to capital. Definitely, you know, one to two years.

Yeah, definitely. And as it relates to Opportunity, being able to capitalize on that right away immediately puts you at an advantage. And if you're not concerned with interest rates, you're not concerned with borrowing power because you've got all of the borrowing power at your fingertips, then you can move faster. And you think back to all these periods of time, like 0809 crisis. There were so many great opportunities that came up and people just didn't have ready access to capital to take advantage of them. Except for the wealthy. And why, again, thinking logically, why do the wealthy put so much money into dividend paying, participating whole life insurance contracts? Because it makes them wealthier.

Shocker.

Like they, like they do it because it makes them wealthier. And you do not have to be rich to get into the banking business. Banking is a process, not a product. The wealthy put money into a product because it makes them wealthier. If you insert the process of becoming your own banker and you're putting money into a product that makes wealthy people wealthier. Well, if you want to become wealthier, then do what the wealthy are doing and then you begin to practice a process. And the only thing that's boring about becoming your own banker is that it always works. The only thing that's boring about it. And we have, we need this stimuli as human beings because of everything that we're bombarded with. And then there's this boring process. Oh, going to become my own banker, get wealthier every day. I'm going to pay no tax on the accrual.

I'm bored. How can I go and make this more fun and engaging? I know, let's go and speculate on some, some crap that I know nothing about.

Well, you could do that. If that's your, your stimulant of choice, then you could go and do that and you could do that without jeopardizing the constant daily accumulation that's going on inside of your own aquarium of capital. And it's just again, you know, for clients who now have those seasoned policies, they see it. And for people who are just getting started on their journey, well, they're just getting started on their journey in rising interest rates, rapid inflation, political turmoil, tax increases, everything costs more. And when we get past this and go into the next phase and we start to see stabilization and those clients are going to go, wow, when I first got started, my goodness. And things are great. Now I'm going to go and pursue opportunity and I'm going to. So it doesn't matter what's going on in the economy or anything like that. The process of banking goes on no matter what. And so the sooner you begin to assume control of that function, the less you're penalizing yourself because the longer you wait, the more you're penalizing yourself. And it's just so amazing to have these discussions with clients who've been around a while and are seeing all of this velocity and momentum that's been created in their aquarium of capital. It's incredible.

Isn't that good? It just got me thinking about something too. So I mean one of the most recent policies I got, I converted some term insurance for a policy on my wife and I put in for the paid up additions rider. The flexible Premium is about 25, $26,000, something like that. And the moment I funded that into the policy, my decision, my choice, because money had to go someplace anyway, I instantly got about, somewhere like around $130,000 worth of initial like paid for, guaranteed to be their tax free death benefit.

That's amazing.

Now that that's not going to pay out anytime soon, I don't want it. I'm hoping that way, way down the road. But the thing that matters is that that's roughly five, about five times what I injected in today's dollar, today's capital dollar. That means that heaven forbid, if something does happen, I'm going to get five times more of those dollars back. Right. But additionally, I've created a automatic growth model on that 25, $26,000 that must now reach the 130,000.

Right.

So I've turned today's dollar into five times of future dollars automatically just by the future of making the decision to put it in.

That's the beauty of it. And that, that's just, that's just, I.

Didn'T have to ask permission.

That's just the product, the unseen is everything that you're going to utilize that policy for.

Yeah, like the, the bill I paid the Canadian government for the taxes they wanted to charge me.

Which had to happen anyway.

Yeah, it's, it's great, you know, it's great to see people thriving in a high inflation environment and you get to look at their family banking system and you, you get to be on that journey. Like to do that with clients is just one of the most fulfilling, fulfilling elements this whole journey and we just love having those conversations.