Where Canadian’s Wealth Should Reside

If you really, truly understand the grocery store example, the rest of becoming your own banker is a piece of cake. You've got to study the process, Then you have to purchase a superior location. You've got to get your policies in place, Then you have to stock the shelves with inventory. You got to put money into your system, otherwise nothing happens. The more capital you put in and the more you turn that money over, the more profitable you're going to be.

I want to talk a little bit about getting into the grocery store business. Now, for some of you, where this is your first exposure to the infinite banking concept for Canadians, you might be thinking, gosh, why is there a grocery store on the agenda? Why would we want to be talking about that? It's so relevant to the process that Nelson often said that if you understand the grocery store example that he did such a great job writing about in his book becoming your own banker, if you really, truly understand the grocery store example, the rest of becoming your own banker is a piece of cake. And so let's dive into it and let's see what aha moments come up for you as we walk through this particular example. Now, we're going to consider a business. I'm going to put all of you into the grocery store business. Now, when you want to enter into a new business, you have to take some time to study that business. You have to take capital and invest that capital to get the business off the ground. But I want you to consider that the grocery store business is a business in which you're a captive customer as well, because everybody uses groceries and you're both the consumer as well as the seller of a product. Your market is unlimited and someone has to perform this function of distribution. Now we're going to study the business for a period of two years. We're going to purchase a superior location, we're going to build an attractive building, we're going to stock it with high quality merchandise. We're going to recruit some great team members who can take great care of customers, take care of keeping the shelves stocked with inventory. Now, if you were to think about this up to this point in the grocery store, I want you to understand that in order for the business to make money, in order for the business to be profitable, we actually have to turn over the inventory. So when we buy the milk and the bread and the butter and the eggs and all of those consumables, we have to keep that turning over and over and over and over so the business can actually be profitable and make money. Now, you've got to turn the inventory 15 times in one fiscal year just to break even. You turn it 17 times and you'll be profitable. If you can turn it 20 times a year, you can retire early. And I want you to think about this as it relates to creating a banking system in your life. You've got to study the process which you're all here studying today. Then you have to purchase a superior location. You've got to get your policies in place. Then you have to stock the shelves with inventory. You got to put money into your system. Otherwise nothing happens. The more capital you put in, and the more you turn that money over, the more profitable you're going to be. Now, I want you to think up to this point in getting into the grocery store business. Bought the location, stock the shelves, hired the team members, put the cash registers in place. How much money have you made? You haven't even opened the doors yet to your store. So how much money have you made? None. That's exactly right. So we went through a period of capitalization, right? We invested capital, we invested time and energy to get our business going. And now we're ready to open the doors to all these captive customers that want to purchase groceries from us. Now, I'm going to utilize an example, and it's going to be a can of peas. And let's presume for a moment. We purchased this can of peas, and we sell it at 60 cents retail, but we purchased it wholesale at 57 cents. So we're making three pennies on every can of peas that we're selling. So the more we turn over that inventory of peas, the more money we're going to make, the more profitable we'll be. Now, I want you to envision for a second that you're the owner of the store. So if you think about how you purchase food now that you're the owner of the store, would it be your inclination? So if your spouse shopped at your store, would your spouse prefer to go out the front door of the grocery store and pay retail, or would your spouse rather go out the back door because you're the owner, so you're the one who calls the shots. You make the decisions. You're the big person on campus. You're the business owner. So what would you rather do? Would you rather go out the front door and pay retail or go out the back door because you own the store? Now, I want you to think about this. We made three pennies on each can of peas that we sold at retail. Well, if we take one can out the back door. We need to sell 20 cans of peas to make up for the one can that walked out the back door. Because we paid 57 cents wholesale and we could have sold it for 60. So when it goes out the back door, there's no money going into the cash register. Now, this is a description of what happens in so many businesses. And if you really want to understand this more deeply, just make friends with somebody who owns a retail store or make friends with somebody who owns a grocery store and ask them to talk to you about employee theft. Because the majority of theft from these businesses is internal. It comes from employees and the owners. Because imagine for a moment if the employee saw the owner going out the back door with the canopies. What are the employees going to do? They're going to mirror that very same behavior. Think about this as it relates to your own family banking system. If Richard was taking the P's out the back door. So if Richard was taking out policy loans and not repaying them, not putting the inventory back on the shelf, what are his children going to do? They're going to mirror that behavior. So you want to make sure that you're teaching your family how to be a responsible business owner. Because when you put a policy or a system of policies in place, you're starting a new business where no business existed before. Don't steal the peas. You want to get that money into your banking system so that you can replenish the shelves and you can sell more inventory to more captive customers who need access to it. Think about this as the owner. Rather than putting 60 cents into the cash register, what if you put 62 cents in so you put a little bit more money into the cash register than what a customer would pay retail. That's going to supply your business with more rocket fuel, more capital. And as the owner of the grocery store, what can you do with more capital? Well, you can purchase more cans of peas and you can stock more shelves. I've never met a successful grocery store owner yet who would complain about having more shelf space to be able to put more product on it to sell more. So you've got to think about the grocery store example as you're implementing this process in your life and remind yourself, don't steal the peas. If you understand this grocery store example. The rest of becoming your own banker is ridiculously simple. Here's what I want you to know as well. Think about as you build a policy or you build a system of policies and you get to your retirement years for passive income time. If you've been replenishing the shelves with money, you can clip bigger coupons in retirement, can't you? You can take out more capital in your passive income phase than you would have been able to take out otherwise. If you were stealing the piece and you want to have a business that's a lot more valuable when it comes time to sell it, meaning when you die, there's going to be a lot more money coming back to the family to replenish the shelves with more cans of peas. Now, Nelson said, wherever wealth resides, someone will try to steal it. And folks, remember, don't steal the peace.