Using Infinite Banking When Financing Cars In Canada

If you are presently financing cars the traditional way, you may end up spending more money financing cars than you would ever save for retirement. If you can finance cars a different way or a better way, as you keep building your wealth for retirement, you are going to be in a much, much better financial position. If you are financing things outside becoming your own banker, you do not control those financing terms. Someone else is controlling it for you. You, you cannot take a vacation from that payment. Whereas in this scenario you have total and absolute control. You can take a vacation if you want from a payment. Nobody's going to come after you for the laundry payment.

I am going to be diving into our first case study that is focused on financing cars. And the reason why we are using a case study on financing cars, but is because car is the most common commodity that we all need and we can relate with it. But the process of becoming a banker is not just for financing cars, is for anything that you have the need for use of money for. Now, let's look at different ways of financing cars. So let's look at the traditional or so called conventional ways of how people go about financing things in life. So the first option is the lease option. We all aware of leasing. The second option is bank financing where we qualify for for the loan and then we make consistent loan repayments back to the bank based on the loan amortization. And the third way is paying cash. So whether we borrow money from someone else or someone else's bank and we pay back principal and interest, which becomes a financing decision because whenever interest is involved, it's, it's financing. So the first two methods are considered the conventional financing. Now the third method, cash, is also financing because when you pay cash for goods and services, your money is gone and you're not going to earn any interest on that money ever again. So the financing decision of using cash is the decision of never to own any interest again. So all three methods are a financing way of acquiring things today. So some of the personal things that people finance, cars, appliances, furniture, home renovations, etc. And if you are a business owner, you may be financing buildings, office furniture, computers, photocopiers, human resources, cars, equipment, operations. So any decision that you make with the use of money, whether it's a personal use of money or whether you're using corporate dollars, you are making a financing decision for every transaction. Presently I'm going to show you a better way of financing things going forward. And that better way which you are aware of is called the process of becoming your own banker. Now.

This Family that I want to share this case study of. They actually were introduced to this concept back in October of actually early 2017 is when they discovered the process of becoming your own banker. So they came through the education process just like how you folks are educating yourselves on the process. They've read Nelson's book and then they got connected with me. They were age 40, so husband and wife, they're both age 40, 40 years young at that time. And then when they met with us, they had some questions and certainly they wanted to see how this process can be applied in their lives personally, how to achieve the things that they want to buy going forward to achieve their financial goals. So the main goal that they have after understanding this process was to take over the banking function, over the car financing because they understand that they need cars till the end of time. And every seven years they buy a new car. And they knew that there is a problem because they had already purchased cars up until that point, up until age 40. And reading Nelson's book, educating themselves to this process, they realized that they did accomplish the objective of buying those cars, but all the money was gone and they wanted to change that. Here's another fact about financing costs the traditional way. If you are presently financing cars the traditional way, you may end up spending more money financing cars than you would ever save for retirement. If you can finance cars a different way or a better way, as you keep building your wealth for retardment, you are going to be in a much, much better financial position. And this is what we're going to show you. We are the process of becoming your own banker. Their next car purchase was coming up in 2019, so they met with me in 2017. So they're looking two years ahead because planning is important, right? What's the saying? If you fail to plan, you're planning to fail. So they're looking ahead. They're like, we want to be prepared in 2019, we're going to buy a car and the next car that we're going to buy is through the process of becoming a banker because we want to build wealth while buying that car and we want to recapture those stream of payments so that we are in a much better financial position when we retire in future. And in addition to that, they also wanted to protect their family from life insurance standpoint because they had no life insurance at that point. Now some facts. So in my discovery with them, so that's the first thing that we do is what we connect. We see if there's a basis for us to Work together. And if you confirm that from both parties, you need to be comfortable working with us. And we need to be comfortable working with our prospect or new clients. We do a discovery. In that discovery, we capture income, assets, liabilities and goals. So I'm just highlighting some of the things that I discovered in that meeting. So family income at that time, $180,000 between husband and wife. Husband was earning a little bit more than the wife. And then they are savers. They set aside 25,000 per year, but no different than anybody else. They had been setting that money aside in the books of someone else's bank. They had no life insur insurance. Now they did purchase three cars so far, as I mentioned, until age 40. Between the two of them, they had bought three cars. The average cost of car was $25,000. And they had used cash purchased and they had also used bank financing up until that point. So if you do some math, 25,000 for three cars, that's $75,000. And that money was gone from their family forever. And that money created a negative net worth for them as a family because someone else got their money. That money could have been with them forever. But just because they didn't know any different, they had transferred that money away. And we're going to solve that problem. We did solve that problem for them by implementing the process of becoming your own banker. So here's what this family did. They started a policy immediately because they didn't want to penalize themselves any further. They've been penalizing themselves for many, many years. They want to take action. They started a policy in 2017. The premiums that they decided to use for this policy because they wanted to capitalize. They believed in the process because they educated themselves. They've got all your questions answered. And once you know what this is all about, you know exactly what to do. So Nelson's first golden rule. Don't be afraid to capitalize. They are capitalizing their banking system with 20,000 per year in premium. They were already setting that money aside in a Commercial Bank. 25,000 per year. Remember, they were saving that money. They're just changing where the money is going to be saved. They're not changing their cash flow. They're not working any harder. They're just changing where the money is going to be saved. The starting death benefit. So the participating whole life policy was on the husband. The starting Death benefit was $680,000. God forbid he puts $20,000 into policy. He dies, his wife and family gets $680,000. Before this, he was keeping money in a Commercial Bank, 25,000 and he died. The family only gets the equivalent to the bank account. There's no death benefit there. So by changing the address of the money, we created an estate value for the family. Here's another fact to consider. Years from Today, whether it's 1, 2, 3, 4, 10, 20 years from today, there's two possibilities. Either you're going to be alive or you're going to be gone. Why we are the implementation of this process, you're going to be just fine because all the access to cash and the growth and God forbid you're no longer with us, your family is going to be taken care of because of the tax free death benefit. So we solved the problem on husband, the permanent insurance by getting him going on a participating holiday policy. And for the wife, for the interim, we had just started a term life insurance just because we wanted to ensure her life and that term life insurance will be converted into a future participating whole life policy for the family when they're ready to expand their family banking system. When banks become profitable, they open more branches. When we become profitable, we open more policies.

So let's fast forward, let's Fast forward to 2019, October 2019, when they're ready to buy their car. So this is the car that they purchased, that very exact car. The price tag on the car was $35,000. October 2019. Now the options available, as you are already aware of the traditional options, cash finance or lease, they didn't offer any of those options anymore. They went with the process of becoming your banker route. So 2019 car financing using this process, the cash values at that time in 2019 were over $35,000. So remember, they started the policy in 2017. They want to be prepared in 2019 when the next car was coming up, when the family wanted the next car. So in 2019 they had way over $35,000 in cash values, which is more than enough money to finance their car from their own family banking system. Now the daily cash value growth. So as Vern, he did such a fantastic job taking the time to educate on the daily growth aspect and the policy. So the cash values in this policy grow every day. Back in 2019, for this policy, the daily growth was $20 per day. Now how do I know what the daily growth is? Because I am the advisor for the client. I can look at the values today, I can look at the values the next day. The difference is the daily growth. So in 2019, the daily growth was $20 as of today, today is 2022. That daily growth of cash value is much more. It's not $20 anymore, it's much more. Back in 2019, it was $20 a day. The capital required to purchase the car was $35,000. Now, what we can borrow as a loan from the insurance company against our cash value is 90% loan to value. So we can borrow 90% of our cash values as loan. So like I mentioned, they had way over $35,000 in cash value and the loan amount was $35,000. They could easily take a loan of 35,000 to go buy the car. The death benefit in 2019 had increased to $750,000. It started at $680,000 in 2017, and now in 2019, it is $750,000. As Vern mentioned, the way we design policies is the death benefit increases every year, which accelerates daily cash growth in the policy at the same time. So, car purchase. So here's how they went about buying the car. They took a policy loan and.

Here'S what the process looks like. A policy loan is a single page document. The input required on a policy loan document is you put in your name. So policy own name is required. You put your policy number in there. You put how much amount you need as a loan. What you can borrow is equal to 90% of your cash value. And all you have to do is let the insurance company know whether you want to receive that money as a loan electronically deposited into your bank account or you want to receive that money via check. Both options are available if you ask them. Electronic deposit. The money is deposited in seven to 10 business days. If you request a check, well, then it depends upon how long Canada Post takes to deliver the check at your address. And then after that all you do is sign and date. This is how we request a loan from the insurance company. This is how they're loaning their car. This is how they're financing their car. Now if you financed car the traditional way and you know the whole qualification process that goes into financing the car traditionally, compare that process with this new process. See, everything in life is comparable. Traditional financing qualification versus a loan from the insurance company. It's obvious the loan from insurance company is an easy way to access the loan versus the traditional way of qualifying from the bank to buy the car. So there's no qualification for the loan and there's no consent to repayment terms. Because when you request a policy loan, insurance company will use your cash as collateral for the loan and they'll put a lien on your death benefit for the loan. In case that occurs and the loan is outstanding, they'll deduct it from your death benefit. The key word that I just mentioned is that lien is on the death benefit. When you are financing things from the traditional bank and going back to the same example, let's just say you buying a car and you're going through traditional financing, your car is collateral, the lien is your income. Because if you don't repay the loan, they'll garnish your wages. In this case, the lien is your future dead self. So when you're accessing loan from the insurance company to buy the car, the lien is your death benefit, not what you're going to use the money to buy. So technically this family owns the car free and clear because the lien for the loan is death benefit. There's some important facts in policy loan Outstanding policy loans, they do not impact your daily cash value growth. Your cash value, your capital, your wealth continues to grow every single day. In 2019, I'm going to repeat myself. The daily growth was $20 per day. The loan did not interrupt that daily growth. The outstanding policy loan doesn't reduce your death benefit. While you're alive, your death benefit continues to grow every year. Your outstanding policy loan doesn't negatively impact any future dividends. Your dividends, your share of profit is not negatively impacted by an outstanding policy loan. Outstanding policy loan doesn't show up on credit report. As I mentioned, the loan is private between you and insurance company because the lien is death benefit. Keeping things private today is in your own best interest. The way things are asset any outside.