Want to Keep More of Your Hard-Earned Money?

Team, you can go ahead and join me. It's 6:30pm Mountain time. I'm super pumped. Everybody was just saying right before the call, like, wow, Vern's. Vern is pumped tonight. I just had some really great conversations. Am I the only one who had some good conversations with some awesome people today? I know the answer is no, right? I just, I get my energy from people, man. That's just how it works. Like, some days I come in and I'm like a little flat. I have my first meeting and then by the end of that meeting I'm just like, I'm just jacked. Ask the Tish. He's. He sees me throughout the day. My energy is just like picks up throughout the day. So anyhow, I, I digress. I welcome everybody. Congratulations for being here. You made a great decision. It's going to be a super awesome night. We have some brilliant people on our call here tonight. And so we're just going to have a good open discussion about government programs and, and the various types of accounts that are promoted out there. The intention tonight is not to, you know, say something is good, bad, right or wrong. It's really just about what we always do here at Ascendant is just educate people and give you a different way of looking at things and just, it's all about rethinking your thinking. So we're going to have just a really good open discussion as a team. And you're welcome to put some questions in the Q and A box, but let's just do a little practice here with the zoom controls. Everybody, you should be able to see at the bottom of your screen. Everyone's already using the chat window, so let's get a little participation. Where's everybody joining from tonight? I will start or. No, Devin, you beat me to it. Well done.

Okay, so just go ahead and let us know where you're joining from. We've got about 40 people on the call.

And this is really great because it's gonna be interactive. We need your help. We need your help because you get to just have a. If you're curious, you have a curious mind, otherwise you wouldn't be here. So that's the chat window, right beside that chat window, at least for my zoom controls. On the left is the Q and A window. So you've probably already have some questions loaded up. This is an Ask me Anything webinar and it's about government programs. So if you have some questions, some things are already top of mind. You can go ahead and type them in the Q and A window there. One of our teammates gave us a great question before the event started, so I think it'd be a really good way to kick off the event. And so we're just going to start having a bit of a conversation here. And as questions come up, you're more than welcome to put those questions in the Q and A window and we'll do our best to. To dissect them and shed a little light on them and have a good conversation. Team, am I on the right track? Does that sound good?

Sounds great.

Awesome. Awesome, awesome. Oh, man, I'm excited about this one. This is going to be good. So anybody have anything to add before I share this question?

All good. Okay. This would be a really good one to kick it off. So what's the benefit of putting money in rrsp, TFSA or rrsp, TFSA versus a policy if they're both tax deferred slash tax sheltered? So that's a pretty loaded question, but I'm looking forward to diving into it a little bit. So is that a clear question, gang? Really? What's a tfsa? What's an rsp? What is a policy? They're all just. They're all just buckets, right? They're all just.

They're all just warehouses.

They're warehouses for your wealth. It's a place to store inventory called capital. Right. So let's dissect it a little bit.

Now, keep in mind, I guess if we're just looking straight at a tfsa, rrsp, or a policy at this point, we're not actually talking about a process. We're not talking about the process of becoming your own banker. We're not talking about achieving really an objective based on the question. It's just like, what's the difference? Or what's the benefit of putting money in an rsp? TFSA versus a policy. Okay, so that's the question. Well.

Personally, you couldn't pay me to put money into an rsp, so I don't know what the benefit is there for me personally. Not trying to badmouth it. I'm just saying I've weighed the pros and cons, and it doesn't really fit my objectives. So I'm probably not the right person to talk about the benefits of an rsp. I can certainly talk about the benefits that are. Are talked about or how it's promoted, but I've rethought my thinking around it personally. So the first thing that I'll go, I'll just kick us off here. And I'll just start to share some points that I would say, what's the difference versus? Now my mind has to go here. The IVC coach kicks in, and I think, well, there is no versus as it relates to storing money in a policy. Because I know that if I store money in a policy, I still can gain access to capital from that policy and I could still put money in a TFSA or an rsp. So I just have to start by saying that if I was going to put money anywhere, I'd first put it in the policy and I'd borrow it out of the policy and then go fund the TFSA or the rsp. Not to say that I do that, but that's what I do. But if we're doing sort of a straight comparison, personally, I don't know. Do you guys like control?

Yeah, I'll take control.

Do you like freedom?

Take freedom, too.

Do you like to have some say in the matter of how your capital actually performs?

Is there any rule out there that says, hey, Vern, if you invest money in an RRSP or if you invest money in a TFSA or if you save money in a policy, is there any rule that says, hey, the more money I put in a tfsa, the more money I put in an rsp, the more money that's going to be there? Is that actually true?

Absolutely not.

Is it?

If you actually look at Is it true? And, and let's. Can we all agree that words actually matter? Do words matter? The words that you use matter? Yeah.

And aren't we as investment advisors or financial advisors or financial professionals. Let's use that term. Okay. Because there's a lot of. There's a lot of conversation around the title, too. Let's just say we're in the financial services industry and they talk about compliance and all these kinds of things. And I just find it fascinating. We're here to educate people on financial literacy, if you will. And isn't there a key and a distinct difference between investing money and saving money?

Can we agree.

Now, there's nothing wrong with investing money, but if you invest money, you have to understand that there's a risk of loss. You can gain, but there's a risk of loss. Okay, now this isn't 100% true. When you are putting money into, to a TFSA or into an RRSP, technically, you can put it into, like a cash account where it could be classified as savings.

But generally speaking. And team, chime in if I'm wrong here. Generally speaking, when you're putting money into a tax free savings account, keyword being savings. And when you're putting money into a registered retirement savings plan, the money's not actually being saved, it's being invested.

So right out of the gate. Personally, I like to tell the truth. And when I look at a TFSA and an rrsp, that there's a lie right in the title.

Because there's, there's no, there's very little saving going on. It's being invested. Yeah, you can check out your risk profile. You can be, you know, conservative and all these things, but the reality of it is generally, generally speaking, and I know we don't like to speak in generalities, but generally speaking, the money is being put at risk. So that's the first thing that I would say. The differences and the benefits. I know when I put money into my system of policies, truly the more I put in the policy, the more I can access out of the policy. And my behavior of how that policy performs is more important than anything that the administrator does. The life insurance company, literally the more fuel I put into that policy, the more energy it kicks out. It's as simple as that. It's a true savings vehicle. So that, that's what I'll kick it off to say. The benefits are one, I have a whole lot less control and influence over what happens and it's generally investment accounts, and the other is a true savings tool. Does anybody else have anything to add.

If I may, Vern, that's great. I love your point about investing because we all know there's a lot of market volatilities in the last years, maybe in general, overall. But I know that in the chat someone mentioned that you can put it in as cash or you can really save it. Nowadays with the gic, the saving interest rate is pretty high. Yes, you could do that in the vehicle like TFSA or rsp. But I also understand that life happens when you save money there, even though it's just there. But what if you need to use the money? What happened to that account balance? That's just a point that I want wanted to ask everyone to think about.

You're absolutely right, Gingen. And to be fair, I did actually say that you can save money in the TFSA and an rsp. I actually did say that. So you're absolutely right. Good point. So let's talk about that. Jingen. Let's, let's, let's expand on what you're actually saying. Just like I sort of mentioned like control and access so let's assume jingen that, you know, you decide, hey, you know, I like consistency. I like guarantees. I'm going to put some money in this RSP or tfsa and I'm going to put it though in a cash account or in a gic. So a guaranteed interest type of account with some kind of term or whatever. So it's growing and maybe you keep it there and you roll it right back in. And you like that growth, right? But then like you said, give me an example of life happens, like what might occur in your life where maybe you need to access some of that money. Go ahead, Roman.

Maybe your car broke or something happened to your car as it happened to my car. You know, I was at the meeting in March doing presentation in general Saskatchewan, and someone decided to just spontaneously drop rocks on my car and my car was totaled and I had to come up with cash to actually buy a new car.

Well, yes, I got some insurance money, but guess what? It wasn't enough. And I wanted maybe a newer car, right? So I had to come up with some cash anyways.

Okay, that is a good example of like an emergency, right?

Or repairs an emergency. Well, hey, no big deal. Is there, is there anything preventing you? Like let's say in this example, by the way, I'm just looking at another screen here to pull something up. Well, there's nothing preventing you from going and accessing money from your RSP or tax free savings account, right? Can't you go do that? I don't see the problem.

Well, yeah, I mean, I technically can, but I don't want to pay too much tax because, you know, when I pull money from rsp, then I have to add it to my taxable income.

Okay, so rsp. But. Well, what about the tfsa? You. You can pull money out of that tax free, right?

100. Yeah.

Okay, so.

Tehran's like, oh, he wants to chime in. Well, I'm just, I'm just playing devil's advocate here, guys. Like, what, what's the problem? Like, you can pile money up in the TFSA in, in the, in the gic, and you can pile money up in the rsp and Roman's car gets blown up and he just goes to the bank or wherever and he, you know, gets money out of the tfsa and life is good, right? What's the problem?

If, If I may for myself, something that comes up and we discuss this as a team a lot as well, right? It's that you're not comparing the same thing to the same thing. Like, you're not. You're not comparing an investment vehicle to another investment vehicle when we're talking about the process of banking and using one of these TFSAs or RRSPs to warehouse your wealth for investing.

Right.

It's not apples to apples, it's apples to oranges. Yeah. They're both fruits, and they have something to do with finance, but it's not the same thing. What I mean by that is, in Roman's example, Roman, you were able to go into your system of policies that you've built up your banking system and get access to capital on your demand, and you were able to get that capital as cash into your account within three to four business days, if I'm not wrong.

Right? That's right.

Yes.

How long did the insurance company take to. The car company take to actually go through the claims process and all that?

It took one and a half months to complete and to receive the. The cash proceeds. I mean, the insurance proceeds from the. From mbi.

So that's the first thing that comes to my Second thing that comes to my mind is if your money is in a tfsa. Yeah. If it's not in stocks and stuff, first of all, and you don't have to sell things off and be liquid as fast as possible. When you take that money out of the tfsa, when you go back to replenish it, the limit that you have that you can put into it is dictated by who? Is it controlled by you, or is it controlled by the people who created the tfsa?

Yeah, it's been controlled by the government.

Yeah. So that. That's what comes to my mind. It's like when you go to prison, you got to pay bail to go out. It's like when you put money in financial prison, you got to pay a tax or something, there's always a catch. That's what comes to mind.

Nice. Sukman's like, mic dropping it. That's dope. Okay, so. So, Roman, wait a minute, though. I heard this policy loan process is really invasive. Like, they ask you these two really invasive questions. They ask you if you want the money in a check or a direct deposit. Like, what's up with that?

Yeah, I basically, it took me, like, it took me 30 seconds to actually apply for a loan and get it. Get it deposited in three to four business days. The questions. I don't even remember the questions, to be honest with you.

I'm just having fun. This is awesome. So, yeah, Sukman, that was a really good Point. Well, Roman, we were kind of talking about something at the beginning of the call, and we were talking about growing capital, Right. And I had mentioned, hey, like, when does money actually compound the most?

Right. And didn't we all agree, does it compound the most in the beginning or in the end?

In the end.

In the end, definitely. So when do we actually want our money to stop compounding?

Never. Ideally never.

Never. So if we think about some of these government programs. Actually, Henry can chime in on this one, but I'm not 100% sure with the TFSA, but I know with something like an resp.

Something like a registered retirement savings plan, there's a timeline on those vehicles. And let's assume that the vehicle's actually growing and doing well. Well, it's going to get to a point where if you don't want to take it out, someone's going to make you take it out. So someone has the control. You're going to take it out on their schedule. And maybe I'm going to share another point here, Henry, and I don't know if you're. If you got it queued up. No pressure, but I would like to know what that looks like from a TFSA perspective. But I'm going to just share my screen for a second, gang. Now, I got a. Put a. Put a. What's the word? An asterisk out here. This is just for visual purposes. Okay. With these types of accounts, as you're building them up and you're accumulating cash in there, they start to grow. And then right as they start to grow and compound, right near the end, right as they compound the most, someone comes along and makes you kill the vehicle, makes you take out the energy. So here's what happens. Hey, Roman, it might not be a huge amount of money. I'm not sure. How much cash did you have to put forward to fix your vehicle?

Like I said, I. I got.

If you don't mind sharing.

Yeah, I got a quote for like 7,000. It wasn't a very. Kind of fancy vehicle, but, yeah, 7,000.

No, I mean, seven grand is not nothing.

It's nothing.

So let's be. Let's be fairly conservative. What would be the. What's a going rate right now for like a GIC? Is it. If I was conservative, I said 3%. Is that. Is that fair?

It's not even keeping up with inflation.

I would say, well, hey, who cares?

No.

So for the purpose of this. For the purpose of this conversation, let's just. Let's just Create a visual. This is all about rethinking our thinking. Right?

Right.

So a lot of times people think, oh, that's no problem. I got the cash. No big deal. I'll just. I'll just pay the cash. Right. But what we don't see, what we fail to see, to Sukman's point, if I. If I'm gaining momentum on this vehicle, if I've got it in that financial prison, I can pay the toll by pulling the money out. But what I don't actually see is the true cost of spending, the true cost of using capital. So if I have the $7,000 accumulated somewhere in some account, and I was earning just 3% on that money, let's say uninterrupted, for the rest of my days, because I never want to stop compounding my money today. I'll let the cat of the bag. You might not be able to tell with all this wisdom. I might look a little bit older. I'm 39 years young today, and I hope that I outlive this number. But we're going to lean on Statistics Canada. Statistics Canada says that I'm going to be around for, oh, I don't know, about another 46 years. Okay.

Yep.

Just imagine when I make a $7,000 decision today, when I spend that cash, I actually give up the opportunity to grow that capital. I'll never get it back, and I'll never grow it again. So that means when I make a $7,000 decision today, I'm actually making closer to a $28,000 decision, and I could be leaving potential of almost $21,000 of growth from my future. I'm stealing from future Verne every single time I spend a dollar, and I'm stealing from the next generation every time I spend a dollar. And you don't see that.

Right. So we want to create an entity that will allow us to grow our money uninterrupted, but while still maintaining access to that capital. So hopefully that was a good visual for folks. I see that there's starting to be some. If anybody has anything to add, go for it. I'm starting to see that there's some questions coming in here, guys.

I think it's important to recognize when we're taking advantage or people are using the jurisdiction of their. Putting their jurisdiction of their money into government programs like RRSPs, RESPs, TFSAs. There's some conditions attached to those, to that money, and there's an incentive to promote it, to bring it in for you to deposit funds into those Program accounts. However, what is not emphasized enough is the access or the drawing of that money. And when it comes in rsp, you're very much limited to only two. Two ways you can get money out of that, which is approved by the government is if you're going to buy a home and you're limited to 35,000 which you have to repay over 15 years or for education, for a lifelong education, which is 10,000 per year or 20,000 maximum. When it comes to the domain of where you're putting money, let's say into your family banking system.

We already talked about, we only have two way, we don't have many restrictions and how we need to use the money. We get the choice. Roman in his case could use it for his car with no questions asked.

Yeah, no one asked me a question. Hey Roman, why do you, why do you apply for a loan? Or are you applying for a loan even like what happened and what's, what's your repayment schedule you're going to commit to and what's your credit score? Yeah, those questions I never saw on my policy loan application.

And you get to be the bank banker, you get to set the terms when you want to pay it back. And that's a very big part of that element of control that we're missing. Same with like an rp, the, the incentive on the outfront that gets marketed is you have, you put in at least 2500, you'll get a grant of 500. But what if your child doesn't go to the approved post secondary school? That 500 is actually not even earned yet until they actually go through that school. And I used to be a university instructor in part of my past life and the stories that I would hear and also when I was experiencing as a, as a student, when you did a good job saving money in your resp when you're trying to qualify for.

I'm in Ontario, an OSAP loan, they would look at how much money was accumulated in your resp and if you accumulated too much, the Ontario government wouldn't lend you any money.

So what happened to the people who actually had saved up too much in their resps? They would not get enough, but they couldn't get enough from their resp to fund their tuition. So they ended up having to work and that was an impact to the quality of their studies. So when it comes to the aha moments for some people, these government programs in a way is not as. It's quite surprising for some people when they get caught with it when they Want to access their funds.

Man, this is so good. Hey, Sukman, I got a really good segue for you because I know you have something that you want to share because somebody just asked a really good question in the Q and A and they're starting to actually start talking about a process now, which is fantastic. And if I pronounce this wrong, somebody help me out, guys. I nna.

That's.

That's. Ina.

You know, this is a really great question, okay, because we're talking about a process now. So. So the question is, how is banks investing our money? TF or investing our TFSA or RSP differ from how insurance companies invest money or invest our premiums especially. So this actually shifts, she says, especially if you can use tfsa, RRSP for self directed accounts and control where it's invested. So now it's not the bank investing it or whoever the investment is. You're actually taking control for one. So congratulations. And she says, that is like mortgages, etc. So I really want to dissect this one, gang. So my question for you. Sorry, Ina. Right, Superman. Yeah, that's my question for you then in that is that. See this process of. Now we're starting to talk about the banking process because if you put money into a self directed account for the purpose of investing it in something like residential mortgages or whatever, to have more influence over the rate of return that you're getting, that's really good. See, the challenge with it is, is that that whole process is called banking. And the only way for you to take advantage of any type of financial opportunity, whether that's going on a vacation at a discounted rate, if that's investing money in a really great private lending opportunity like a mortgage, if that is. Thanks for pronouncing my name, Sukhman. You're the man. You're welcome. So if that's taken advantage of any opportunity, if you need to move money from one place to another to take advantage of an opportunity, the last time I checked, the only way for you to do that is to use something called fiat currency. And just like the other example I was sharing, once you take your cash and you fund the RSP with it and then you flow it to the mortgage, the mortgage or the, the RSP or the TFSA might actually be creating a rate of return, but that's the investment that is growing. Where's your cash? Your cash is no longer growing because your cash was used to purchase the asset. So we're not here to coach people to Change what they're actually doing. We're here to coach people to become more efficient with what they're doing and change the, how they get things done. So how do you go about funding your rsp? You got to earn money and you got to deposit it. And then once you deposit it, it becomes an investment. The cash is gone. So just like Ginger and I were mentioning earlier, what I would first do is I would actually fund my banking system. I would build up my policy system. Now, the insurance companies, there's various investments that they put money in and they're very, very conservative and they're grotesquely managed, okay? They, they can't take big swings in the stock market. They are 100 responsible to manage that cash, the, that cash in a way that they can fulfill in all their contractual obligations. And the most important one is that your total cash value of the policy has to rise to match your death benefit. Okay? And it's going to grow in, day in and day out. No matter what happens in the stock market, no matter what happens in the real estate market, it's going to keep going. And they've only been doing this for about 175 straight years in Canada. So, you know, they're just getting started. But here's the key. Option number one, build up your cash. Take cash, buy the asset, get a rate of return, you're happy. Option number two, take capital fund policy with it, grow your capital uninterrupted every single day, Borrow from system without interrupting growth on capital, fund the RSP and then go invest in your private mortgage. And now you grow the money and grow your investment in the private mortgage while your capital continues to grow. So again, it's not necessarily one versus the other. This whole process that we coach folks isn't like, hey, go become your own banker and buy whole life policies and don't do any of the other stuff because you don't need to. That's not what we're here to coach people to do. In fact, if somebody tells you that turn around and run the other way, what we're here to do is we're here to coach you on how to put your money to work, how to put your capital to work and then use that system without losing momentum on your money to take advantage of all the other opportunities that you're already good at doing. So I didn't really answer the question about where's the money invested versus one versus the other, because that second part of the question was really what was key. He said, hey, I can self direct My investments, Vern. Like, isn't that better than putting the money in the policy? It's not one versus the other, it's one and the other. So now you're just gonna get dual compounding. So love to hear some thoughts on that.

Yeah, I think that's really cool that you bring that up, because Nelson, in his book, right, he says, I was trying to find the exact page. So, team, if you know it, you can help me. It's the rate of return on any investment doesn't matter until you control the banking function. And that. That's exactly what you're talking about, Vern. It's about how many times is your money working for you? And, like, we have a lot of smart people in the. In the chat today. I can see in the chat already everyone's bringing up a lot of good points. Someone said it's about. I'm gonna actually find it in the chat here. I thought it was a really good point. Let your capital work twice, if not more. And that sounds like someone who's already practicing the process. And, Shirley, I think that was you. So that's a great point. Let your capital work twice, once in your banking system and once wherever you want to. It's called the infinite banking concept for a reason. It's infinite. You get to decide what you want to do with it. Team, if it's okay with you, I do want to take just five minutes to kind of segue into speaking about something very quickly, if that's okay with everyone.

Go for it.

Awesome. So, as you guys can tell, one hour doesn't do justice in terms of answering all your questions and also providing you with how much value we can and how much information we can.

So.

So what I'm going to do is actually share my screen very quickly. And, team, if you can, just let me know if my screen is visible here. You should see. You should see both our great teammates, Henry and Richard here.

You got it.

It's a good still of Henry there.

Oh, Henry, I'm trying to do better.

Oh, wait, hold on.

Now you got ads.

We should. We should have just left it there.

Oh, stupid. You're a banker, man. You got to get YouTube Premium, bro. Come on.

I know, I know.

All my money is in my policy system. I'll take a loan for it.

Yeah, I could show. I could show you how to deal with that, Henry.

We're going to stick with this headshot. Hope that's okay.

That's pretty good.

So the reason why I wanted to bring this video up is Henry and Richard took the time to make this video and as you guys can see, it's almost an hour and 10 minutes long, which tells you that just talking about this for 20 minutes or half an hour isn't enough. And a lot of people in the chat, they probably want to go further and deeper into the education about RRSP matching and more of the specifics of it as well.

Right.

And Henry, like, I'm, I'm not completely finished yet either. I'm still making my way through it. But I will say that I'm still learning a lot as well. So when it comes to talking about the arrival syndrome, even us as advisors and IBC practitioners, we are still learning every day. So I would invite everybody to maybe if somebody can drop a link to the YouTube video in the chat. Anybody that's in the chat today, awesome. Thank you, Roman. I should have known. Roman's on that already. But if, if you guys want, click the video, watch it and you know, go, go back to it. Maybe there's a lot of information to it and you can't get through it all at once. But that's what I've been doing, going back to it whenever I can. And there's a lot of good gems that Richard and Henry have dropped here. And then from that I'll just kind of segue into our website here and if somebody can drop a link to the website or even the landing page, that'd be great. If you guys go on our website and go to upcoming events, we have a great event that we're hosting live in Edmonton and it's our family banking summit, guys, right now it's going to be. Oh well, here's all the hosting information. First of all. So 20th October, that's when it's happening. It's going to be from 8am to 4:30pm Mountain Standard Time. Nobody show up Eastern standard time like I would because I'm out in Ontario. Don't do that, guys. If you guys go all the way down here, it talks about all the things that are included in the ticket. And right now it is on sale for 127 until October 20th. October 1st. So you guys have a few days to pick it up. And if you guys keep going, you guys see some of the actual testimonials and the experience of some of the people that are already practicing the IBC method right now. And then I think some of those people might even be on the chat. So if you see yourself, drop it in the chat, that'd be awesome to know. Maybe you, you didn't know that you were on here. And if we go down, we also have an agenda as well. And there's a lot of great talks that are happening. This one's really exciting. It's for Jason talking about his family banking system and how he's been practicing, practicing this for years on end right now. And if you keep going, there's even more things we have going on. This is going to be very exciting. So for the business owners, there's something for you as well talking about how you can actually use your business and a corporate owned policy to recapture personal mortgage interest. So using corporately taxed dollars personally sounds great to me. So this is something that might kind of interest you. And then for the first time ever, we are actually having a guest, we're having a guest speaker from Profit First. So these guys do great work. They're very in line with our kind of thinking as well. Just like we are caught up sometimes with budgeting and expenses and things like that in the business. This, the guest speakers talk about how Profit first should be your goal, how we should focus on profit and some of the techniques and strategies that can be used to actually not only implement this in your business, but how to actually be successful at it. And then we always have to have Dan. Dan is one of our favorite teammates on, on our advisor team. He's been practicing this for over 10 years and has been using it for not only him, but his grandchildren as well. So if you go through the agenda, there's a lot of great chats and a lot of great events happening there, guys. So again, until October 1st is the early bird, 127 is the costly event and you'll get to kind of spend time with all of us just like we're kind of vibing and zoning off each other today. You get to be a part of that in person. I think it's always a great time, so I can attest to it. I got to meet all the team in person in Toronto and I think it was a great event. Anybody that was at the Toronto event, you can drop in the chat, let people know how great it was, but we look forward to meeting some of you guys in person. That'd be awesome.

Hey, that was great, Soukman. Henry, I'm not going to put you on the spot here, but I have a question for you because maybe I'm a big dummy here, but there's an acronym in the chat or in the Q and A there and I don't know that acronym. I don't know what they're asking there. Maybe you do, and if you don't, we'll have them reach out to us separately because I'm not sure what that.

That one's a first home savings account. It's the new.

Oh, is that the new one? Oh, that's why I don't know it. The new. The new one. Okay. Okay, fair enough. No, that's not a bad question and I think we can take a different approach to it here and just kind of expand. So it says, what are your perspectives on using policy loans to substitute for cash deposits into the first time home savings account, considering the latter is promoted having similar benefits to a TFSA and rrsp. Any negatives with this approach?

So first of all, I'm not going to say that there's any negatives or positives because I don't want this to be mistaken as any sort of advice. We're not here to give anybody advice because, you know, we can't do that unless we get connected with somebody and better understand what your objectives are and how you're structured financially and all those sort of things. The only thing that I would add to that is say that if you feel like, you know, you've done research and you feel like either the FHSA or the TFSA or RSP or all of those are good vehicles for you to store capital, then that's great. But I think if I'm reading the question correctly, it says, what's your perspective of using policy loans to substitute for cash? Well, you know, we've shared already at length what our thoughts are on that. Wherever possible, when I'm taking advantage of a discount, something I can get for a discount where I'm taking advantage of something that is going to give me a good rate of return as an investment, or if I can access a policy loan to pay off or recapture third party debt that's taken money out of my pocket, I think that's a great substitute for cash because when I use my cash again, I give up the opportunity to grow that capital. So I want to use my cash to fuel my policy system and then I want to borrow against my cash value that's accumulating and I'd like to use the insurance company's money and put it to work in the fsa, F HSA or the TFSA or rrsp. I hopefully I understood the question, hopefully I answered that correctly. Anything to add to that team? Am I on the right track with how I read that question?

I would answer a Little bit more specific to the nature of the savings account for first time home buyers. It is very simple. The name doesn't have it, but it's a registered account. And when it's a registered account it has the attributes. Basically similar to an rrsp. You get a deduction or not a really a deduction, a refund of the extra taxes you pay when you pay the government from source and then they, and then when you withdraw it or use it, then it can get it is a taxable event. Now one of the things that people don't know is that you can actually have both of them. Where an RRSP you want to use the first time home buyers plan and you have, let's say funds in your fhsa, you actually can't use two programs at the same time. You're limited to one or the other, which is obviously the FHSA first. The other part is you can actually transfer money from your RRSP to your FHSA tax deferred in the same way. It's still in the registered.

Environment with the government. So it doesn't trigger a taxable event when you're transferring it. But ultimately when it comes to strategizing your capital towards acquiring a home is really where I think the question is coming from. That's more of a personal discussion between you and your coach to dive into the best and maybe most efficient source of capital to fund your first home and whether policy loan makes sense to do that. But personally I don't really see value in the FHSA and you know, I've gotten my first home before utilizing it. So that's just my own personal perspective around it.

Henry, could you, could you go over that one more time? Maybe I missed it when you said you can't use the FHSA and another registered account at the same time. Was that right? Could you go over that one more time?

Yeah. So for the RRSP there is an ability for you to withdraw for buying a home home buyer, it's called the home buyer's plan. You are not able to use the home buyer's plan of the RRSP with the FHSA at the same time. So if you had pools of funds in both, you're not able to use both of those pools of money. Let's just say 30 in the RRSP you want to take 35 from the RSP, you want to take from the as the home buyer's plan. And FHSA you have 40,000. So you're not able to take both of those together.

So you have to choose again, someone else decides. Like someone else gets to decide how much of the money you get to take out of which account or which vehicle.

That's correct. Well, when you put your capital into that jurisdiction of their control, then they're in control of setting. Setting the rules, and you're following their rules.

Well.

And by the way, Jeffrey, you're welcome. Part of. He also said, thanks for holding the webinar, so. You're welcome.

Henry, I have a question for you. Can you see it in the chat?

I do.

I would just say the purpose of most people when they use it is to use it for their. Their home. If there is a withdrawal, then, yeah, you can have taxable events from it. If it's not.

Oh, if it's not. Okay, so just to be clear, so you're saying with the home. Home savings plan or the home savings account, if it's withdrawn and not used for the purchase of a home, it would be. The gains would be taxable. Is that what I'm hearing?

Or just taxable? The capital coming out would be taxable.

Okay, so if you. Okay, perfect. So if you use it to buy the home, then there'd be no tax on it. So that's kind of the carrot that they dangle. Is that what you're getting at?

Here's the other caveat. When you are trying to purchase the property, you actually don't withdraw the money. You have to use it as part of your deal. Close with and things to say. In my FHSA, I have 40,000. I'm again making the number up here. And as part of my commitment to this purchase, I am going to pass the amount to. As part of my, you know, acquisition of the property with it.

Thank you. That was awesome. Okay, great.

Oh.

So not sure if I can ask this question here or connect with my coach. Well, congratulations, Shirley, for having a coach. If I would want to pay the simple interest of a policy loan to the insurance company, is there a way to do that? Ah, no, this is. This is. Okay, this is actually a really good question because this is actually a piece of education that I got at least. This might not be the case. I have to mention this to be really clear. This might not be the case with every single life insurance company and every single life insurance policy out there. I'm just speaking from the perspective of where my policies reside and my primary carrier. And we're not going to promote a specific life insurance company on the call here, but the question basically is, can I service policy loan interest only because when you pay the policy loan, when you pay policy loans back, the principal gets hit first. So surely you can, you can service policy loan interest, but you're servicing it in an indirect way. Okay, so what I mean by that is this. So try to stay with me here. I wish I had a visual for you. So let's just use a really simple number. Let's say you had a $10,000 policy loan outstanding, okay? And now how the life insurance company calculates interest on those policy loans is they take the simple interest rate and let's just use, oh, I don't know, 6.5% as an example. They will multiply the total policy loan by the annual interest rate, which is 6.5%. So that means there'd be $650 worth of interest that would accumulate on that loan, assuming that you didn't pay anything back to the loan at all. Because the minute you pay any part of the loan, the simple interest rate calculation is going to be based on the balance. So if I paid $1,000 to my policy loan, they would look at the $9,000 loan and then the interest would, would be based on 9000, not the original 10. Hopefully that makes sense. Now with that said, let's pretend in this example to keep it simple, that you decided not to pay back any of the policy loan for the entire year and you were going to go pay your next year's premium. So what we coach you to do, or at least what I coach my clients to do, is okay to service the interest. You're not technically paying the interest. You're actually just going to pay an extra $650 to the principal of the loan. And then when the interest compounds that year, the 650 would just be added to the balance and then it would bring it back to the original balance of 10,000. So the interest amount on a daily basis wouldn't change. So hopefully that makes sense. You're servicing the interest, but really in an indirect way, you're paying just additional principal and that interest compounds on top of the loan balance and then it just brings it back to the original principal and the interest calculation on a daily basis wouldn't change. So hopefully that helps, surely. So if your premium was $10,000. Okay, good, I got a thumbs up. I'm assuming that was from you. If your premium was $10,000, you would just pay $10,650 and we would instruct the insurance company to add that $650 to the principal loan balance and then the interest would get added on top and bam, your loan balance stays level at $10,000. So hopefully that that helps. And of course your coach can meet with you and expand on that. Great question. Oh, this is a good one, Henry. I think my employer matches contributions to an RSP up to 6%. Is there a way to use my portion to fuel my banking process, then contribute? Ah, I don't really know. That's probably. I, I like where your head's at, Eric. I, I, I would say that that's gonna pro. I'm gonna go. I'm gonna assume the answer is no, because they probably do your contributions just like directly as, like a, you know, like an income. Like directly from your income would be my guess. Unless there's some way that you somehow put the money in on your own or whatever. I'm not sure how that would work. It's a little bit complex, but I would assume the answer is no because it probably is deducted at source right when you get paid and then they, and they match it. So I like the creative thinking there, but I'm not sure about that. Maybe there's something I don't know.

Well, I would love to direct Eric to a very wonderful podcast that was just shown by Sukhoin, and this was the exact topic that we talked about. And you know, at Ascendant Financial, one of the first things we love to do is educate you. We don't want to be the one doing everything or doing things for you. And it's important for you to learn if you want financial independence, to get more education around that. So that specific topic is right here. I can't advise on your specific situation, but I think what is really interesting as a highlight for a lot of people that they don't realize is when your employer is actually contributing on your behalf, there is an equivalent taxable benefit that they that the government will charge you for in terms of your income. So if you are getting 6% of a match, as an example, and Your salary is $100,000, you are actually going to be taxed for that year if you've matched the RRSP deduction. 106,000. Because 6,006% is what it is being matched. So you are getting taxed at a higher tax bracket for that extra contribution into your RRSP from the employer at the same time, when you are getting the employer to match your RRSP, presumably.

If you are trying to maximize your RRSP, which is 18% of your earned income, so $18,000, that 6,000 also counts towards that contribution amount too. So the surprise for a lot of people is, well, again, I can't explain on your specific situation or advise around it, but I think in that podcast, one of the spreadsheets that I share, and this is just for educational purposes, is that the. Let's just call it the contribution to activate the matching is 5% to get 4%. And if you have a salary range in around here, here's the amount of taxes you would pay for that. And that average tax rate in this example, if you were 50,000, would pay 20.89%. So 10 divided by 50 is 20.89%. 100,000, 26.35% of taxes is of that $100,000. Now, in Canada we have what's called a progressive tax system. So the more income you earn, whether you get a bonus or extra money on top of it, you're not actually going to be paying that 26.35%. You're actually going to be paying that marginal rate. So if you've got an extra $10,000 in bonus, you are not getting the 10,000. Subtract. Oops.

One minus the 26.35%, you are not getting the 73,000, you are actually going to get.

Roughly one minus the 33.89%. So you're only getting 6,600 of the 10,000. Because every new income you earn on top of it, you're not getting taxed at the older rate at the lower scale, you're getting taxed at the higher rate at the higher scale closest to you. So if we include that mechanism related to how the RRSP deferral works. Sorry, RRSP matching works. If I were to use that 5%. Again, I'm not really going through the details of the calculation. Your maximum annual contribution, let's say for 100,000, is 18%. So it's $18,000 if the employer is matching 5 if you are contributing 5%. So here's your 5% amount that you're putting in.

And.

That would be 5,000. If your employer is matching 4% is 1317, which, sorry, the deduction you would get is 1317. The matched amount is 4,000. The taxable benefit is 1356. You can see approximately the. Where it doesn't make Sense is around $100,000 and up the employer match. You're actually paying taxes today to get the employer match.

Even though they're putting more money in because of that taxable benefit. Now, if I were to just make it interesting.

If you put 6% to match 6%.

You'Re actually paying more taxes today to take advantage of the deferral to get the contribution into your rrsp.

You just gave me a reason to go back and finish that video tonight.

Well.

For you, it's just an observation that took.

Rethink your thinking to a whole new level.

Oh, yeah.

Awesome job, Henry. That was amazing. Okay, fantastic.

Sukman, do you have something queued up? Can we actually do a quick. Let's do a quick value check. We have a chunk of people. We had like 20 people that were watching the YouTube live. We have about 50 people here on the call. Can we just get a. A 1 to 10 in terms of a value check? Just in the chat, One means like, what am I still doing on this call? I'm receiving zero value. Why am I here? 10's like, holy smokes. My. My mind is blown. I can't get enough. Can we get just some feedback? We're. We're big people. We can take it. We like the truth. Okay, so we got a. We got a 10. We got a 13. We got a 10 plus 200. Holy smokes. We got an 8. Oh, dear. We got someone who's really honest. We appreciate that. That's good. Okay, Good stuff.

Well.

An eight. Lol.

Oh, this is awesome. Okay, great. So we, we appreciate the feedback and we're glad to hear you're getting some good value. And so with that said, you know, what we really like is we really appreciate just honest feedback and there's a lot of people out there looking to learn and get some honest feedback. So if you would, I think one of our teammates will be able to queue up some links to some Google reviews. I think we're up to. Gosh, I have no idea. I think we're well over a thousand five star Google reviews nationwide. So if you wouldn't mind, just click the link that's closest to your region and just, you know, leave a few words, maybe click the five stars if you got some good value. Leave a few words about the value that you might receive tonight. And. And that'll help more people find some of our content and just, you know, get empowered and get educated. So we really appreciate you doing that.

Any other questions, guys? Or. Go ahead, Henry.

Yeah, if I may, just to bring some more value to bring everyone who gave us sevens and eights, we're going to. I'm going to bring them up.

Oh, nice.

So one of the. A lot of the most common things people talk about in terms of managing their budget, they'll look at, like, how much money am I putting towards entertainment or how much money am I putting towards vacation? And you spend all your time itemizing all of these things. And coming from a background as an accountant, I did not enjoy accounting or tracking all of that stuff. I do not enjoy that level of detail. But what's really important if you take a step back to look at things is from the money that you earn and you break down who is getting all of your money, that actually makes things a lot easier for you to track. And it's not the $3 or 6, I think coffees now are like $6 or $7 for a grande or something now. But it's not, it's not the coffees that are causing you to have less money to live with, but it's about who's getting your money. If you've ever taken a look at, if you have a mortgage clearly or debts, clearly the bank is getting a lot of your money in the form of interest. And if you have, because we live in Canada, a lot of that is going in the form of taxes and it's not just in the form of income taxes, but it's also spending taxes or.

Gas carbon taxes or alcohol taxes, whichever taxes you, you want, you, you do. The interesting perspective when it comes to taxes is you earn the income, they've taken taxes off of it and then afterwards, now you want to spend the money and they're also making you pay taxes on spending the money. So it's a lot, it's, it's quite eye opening when it comes to the, I'll call it the system, the income tax system that is existing within Canada and that shows you. And what I want to show is actually painting the picture of how much Canadians money is being spent towards taxes. So let's just take a little bit of a side journey because who is, if it comes to interest, it's the banks and then if it comes from taxes, it's the government. And then how much of that money is remaining back to you. And part of these things that will happen when you go through this journey on becoming your own banker and you meet with our co like coaches like us, we go through this process of helping you identify where's all your money going, how, how can you keep more of your hard earned money? Well, you want to, you can start keeping it when you know who's taking it. So let's take a look at that. The first one I wanted to share with you was in 2022. This is just a. And I'm going to give Credit to this organization here, Fraser Institute, they do pretty really good research. And in 2022 this was how much taxes in the, in that from income, you know, transfer taxes, whatever taxes that is being paid. 43% of an average family's income is going to taxes. And you know what the average family income is? It's about $100,000.

Now on that 43%, 35% is what most people use to live. Again this is across Canada, so in different regions this could be even more painful. In Ontario, taxes are usually a lot higher compared to other provinces. But this is a very eye opening point of view where you earn $100,000, 43% of that 43,000 is going to the government in the form of some form of services. And if the average service family, which is two, you know, husband and wife household, 50,000 and 50,000, 43,000 is going to the government, that's quite a very eye opening thing. One person's salary is paying for that.

Now.

With the current level of government spending that's happening, there is quite a lot of debt. And with that level of debt that has happened, well where do you think, how does the government pay for debt? They have to collect revenue. And where do they collect revenue? They collect revenue from working Canadians in the form of taxes. So if we take a look at then the next year for 2023, which is the current year and this just interestingly came out in August, that has now gone up to 45.3%.

So things are going a lot higher in the form of taxes.

And I'm sure this is probably going to be more with additional spending as it comes to carbon taxes and the raising of carbon taxes. So nonetheless it's really starting to be.

It'S really starting. If I were to share, if there are some things to start having that awareness is putting more money into the government plans, they're attracting you to put more money into them. But eventually you will need to pay more getting it out. So let's say if today you put money into your RRSP and irrespective of any calculations you are putting in money and you're getting a tax rate for, let's say, you know, tax refund of a thousand dollars, now you're going to pay more taxes to get that money out because tax taxes are rising.

So how, how you. The only person who's benefiting from those type of programs is really the government.

So I thought I would just share some new information for people.

Well Henry, I always am impressed and I love how much detail you go in to those kinds of things because you know when I think about these government programs and that kind of stuff, I, I say to people, I go look, if there's a problem called too much tax and then they tell you that you can solve that problem by putting this money in this tax deferred vehicle. Well, it's kind of odd because you think about who caused the problem. The same person who caused the problem or the same group that caused the problem seems to have the most magical solution. It's like you have to kind of rethink your thinking. It's like if somebody like smacked you in the head with a hammer and then they gave you a bag of ice, like they caused the problem while you're bleeding and your face is swollen, but yet they have the solution, they have the ice. Wouldn't you be just the least like a little bit suspicious as to if you could trust that person? Right? So interesting, interesting stuff. That was amazing. Henry, anybody else, anybody else have anything to add.

Anything to share team? Because we're just about at 7:30pm Mountain time here and I think that was a, a pretty awesome call. You all did a great job and brought a lot of value.

I'll share one more thing.

Well I know we're going to stick around for that.

So to go back to the second part. So one was the government, the next is the banks. And if you haven't read the book becoming your own banker definitely encourage you to do that. And you'll find this.

I have read it, read it again.

Actually on page 17. And if you look at this chart here, you'll see that when it comes to the spending. So now we have 35% of the money to spend. But or not. I'm just saying here's how much money a typical household will spend. 20% of that money that they earn goes to autos, 30% goes to housing, 40% goes to living, 10% goes to savings. So we add all of that up. That is where you know the, your 100% of your dollars are going.

Now the next thing I want to highlight is next to it is in terms of autos, the way people spend or consumers will spend for auto is to let's say get a car loan because they don't have enough of that money up front to pay for it. So this 5%, this red number you see here is 5% related to the interest that is being paid. The next is housing. Now this is.

At that potentially at that time but for a lot of people this amount of interest for housing could be a lot higher. But let's just use 25% as that example is related to interest and then 8% is related to living. Maybe people spend on line of credits and things of that nature, but. And then their savings, they're not really getting much, much interest up into them. So if we do some really simple math and we add up autos being 5%.

And living being 25%. So whoops, 25 plus living. So housing was 30, 25% and then the living was 8%.

So this is where it's important to highlight that in all of the money that is being spent from your budget, 38% of that of your. Let's use $100,000 because it's an easy number. 38,000 is going in the form of interest.

Isn't that crazy? Yet most people are focused on let's invest. Let's put money into some tax advantage programs to invest and try to get even further and save taxes. But they're only able to save 10%. So the bank is getting 38% of your money, yet you're saving at a rate at 10%. Who's getting ahead here?

So the volume of Canadians, consumer spending is all being sent to interest.

And to anybody on the chat that's seeing this and getting a little bit angry, like don't feel like you're alone.

The reason why I say that is I think we've all had these emotions when Henry, who's so grateful and translating this message in a very simple way, like we've all been there as well. I myself can be vulnerable and share with you guys too, right? That when I found this out, I was angry about it. It's not fun to realize that banks and governments are getting all your money when you realize that $38,000 out of $100,000 that you work hard to earn leaves you, that should make you angry. But there's also something that comes after the anger. There should be a choice to make a decision and take action to change it. Which you have an opportunity today, right? So whether that means booking call with an advisor, whether it even means just reading the book, that is the best way. Henry literally shared page 17 from becoming your own banker and gave you so much value and you learned something in about a minute or two minutes there. Imagine what 90 pages could give you or team. If I'm wrong, it's 89 pages, right?

77 pages of reading.

There you go. Thank you. So yeah, like if you feel angry or you feel overwhelmed with it, like take those feelings and. And turn them into a source for action.

Make that change going forward and transform it to energy. Because no one could take the action for you. Only you can. Yeah.

Yeah. Somebody said anger leads to action sometimes. Yeah, sometimes that's what it takes. You get a little bit angry and it causes you to take action. Thanks for that comment. And you guys are right.

It's. It's.

The thing is. Is. Is you can get a little angry, but also don't feel bad. Don't feel like you did anything wrong because you do the best you can with the knowledge and resources that you have. But it's like my good buddy Sarblo always says, we. We can't. Now that you know this, we can't be having this conversation 10 years from now, right? So to Sukman's point, take. Take action. Okay, guys, that was an amazing, amazing job. Thanks for being here. Congratulations for those of you who stuck around. And don't forget to text the word schedule to 780-809-4599. Look at Roman. You were just, like, on the ball. Eh?

That's awesome. As soon as I say it's like, already in the chat, that's awesome. Okay, thanks, everybody. Have a great rest of your night.

Awesome.