Financial Tailwind for your Whole Life

If I had to pay all those payments monthly, like I used to do 35 automatic debits per month. What a nightmare. I have, like, zero now. I used to be able to pay all those payments monthly. I was already used to making them, wasn't I? So now I use my policy system, my own family banking system, to pay the annual premium. And then what I do is I create my own loan repayment schedule to create that tailwind. I'm now continuing to make the monthly payments that I always used to make for all of those different types of subscriptions and insurances and all the stuff that you were mentioning earlier. I've paid all those annually now using my policy system, while I continue to enjoy uninterrupted compounded growth on my capital inside the system, which is contributing to my tailwind. Nelson talks a lot about imagination. We actually have to imagine what's going on. We have to think about you're working and you're saving money, investing money, making payments. Nobody ever takes the time to actually think about what's going on at the bank or how a bank works or what a bank does. It's actually pretty simple process, right? So we have to imagine what's possible. And we're talking about creating a tailwind or a headwind. If you're fighting against a headwind, they might not even know what a headwind is or that they're fighting against a headwind. So if I don't know what a headwind is or that I'm fighting against a headwind, how would I know that I could create a tailwind? A lot of people don't even realize that they're flying through an environment that is not favorable and that they can do something about it. They don't even realize that they can control the environment through which they navigate the financial world. And that requires a little bit of imagination. As I said, if somebody just picked up Nelson's book and started reading on page 18, right away they'd say, like, what is this guy even talking about? Right? So that's where it takes a little bit of imagination. And I got on a call today with a fellow and I was talking to him and he's like, hey, look, you know, I got to do some work to get my wife to better understand what's going on here, because she kind of wants to do it the neutral way. She wants to make the plane go 105 miles per hour. That's kind of where she's at. She's at that arrival syndrome, Parkinson's law. This is where we're at. This is the best we can do. That's the conclusion that she made. And so she doesn't realize that she can do anything about it. And he told her a little bit about this process, and you're never going to guess what she said. Well, gosh, that sounds too good to be true. And then, you know what I always say to people when they tell me that sounds too good to be true? I don't know if I could become my own banker. I say, well, if you knew the reality, what was actually happening at the banks, you'd think it was too bad to be true. This isn't too good to be true, because it isn't an overnight thing. It takes time. Just like getting an airplane license. You can't just go fly an airplane tomorrow. You got to put some time and effort into learning how all that works so that you can become a pilot. Well, no different than learning how to become your own banker. You got to put some time and effort into understanding how all this stuff works. And then when you know what's going on, then you'll know what to do.

And the idea of it being too good, and we do. We hear this a lot of the times, it's like, okay, if it were too good to be true, then you, you know, then. Then you can determine that. But the only way you're gonna determine is if you put the effort in. So you go and put the effort in, and now you find out that it's not too good to be true. Well, how will you ever get there if you don't make the first step and start the education journey? Like. Like just making a blanket statement that it sounds too good to be true. Okay, well, hey, like, if my radio turns on all of a sudden and it's playing country music because my wife is in control of Spotify, then it sounds to me like country music is playing. But I can actually get on my phone and I can control that Spotify, and I could turn that into AC DC if I wanted to, and we could flip the switch right away. So, in other words, what I'm getting at is, like, it's within your power to control the way that things sound as they enter your brain. Right. And challenge yourself a little bit to recognize if something sounds to be a true. Well, maybe it is, but maybe it isn't. Why don't you do a little bit of research? Why don't you watch a couple of videos, read the book, and then you could decide if it. If it's still at that case, and if you come to that decision, that's fine, that's your decision. At least you put the energy and you put the effort in, right? Everyone that's watching this, guess what? You're in the banking business now. You are your own banker today. The problem is you don't know it and you're not controlling any of it. You're abdicating the responsibility that you already have. You have a given responsibility on your capital to operate as a banker. You're just saying, you know what? I don't want the responsibility. I don't even know that I should have the responsibility. I'm just going to abdicate it over here to third party banking institution because they seem to have been doing it for a while and they've convinced me that that's the best place for me to warehouse my money and to do all my business with. And I'm happy to just willingly transfer all the custody of my own capital over to them and put it on the books of their business so they can issue me some crappy IOUs that says I can get my money on demand, assuming that they actually have my money. You're doing the banking business now. You're just not doing it the right way. That's my opinion. And you can take it for what it's worth. I was on a call with somebody and young, young girl who's exploring this concept. Fantastic. Got a, you know, wonderful marketing business and it's growing and she's, she's doing good with online type businesses like marketing things that really have like a lot of softwares and that sort of stuff. There could be a huge, huge savings potential when you pay for those expenses, business expenses on an annual basis versus on a monthly basis, you know, and I don't remember the exact number, but she was funding somewhere in the area of about, let's call it $2,300 a month in cash flow expenses just to service the cost of the necessary software she needed so that she could operate and be effective at her business. Having these tools so that she could help her clients the way that she does. Okay, so she needed them. They're, they're critical to her business operation. Got it. Now through our discussion, we had a discussion and I challenged her to do some homework. I said look, go and find out, put a spreadsheet together, go and find out with all these offers, if you went and switched them from monthly to annual, what would the savings value be? And then we'll look at calculating what the percentage is and all those kind of things. She went and did that work. We met about. So we just met yesterday. It was about 30 days, 45 days later I asked her, so how did it go? Like, tell me about your homework. She was like, well, turns out I can drop that monthly burn rate down from like $2,300 a month to $950 a month.

Wow.

And I said, wow.

Oh, I like where you're going with this, by the way.

And so, and I remember the exact numbers, but the end result is it was about fifteen hundred dollars a month basically of differential of tailwind headwind transferred into tailwind that was created by her doing that work that wasn't even around debt, that had nothing to do with outstanding debt or whatever, any of those other stuff that was just about changing the way she thought about the financial environment she was operating in. She didn't know that she could make that adjustment until someone coached her to go and find out. I didn't go find out all the values and get the work. She did the work. I simply helped her see that the possibility was there. And then additionally, there was some other changes. She's now becoming incorporated. This is going to make a change for her where she's going to be able to control more of the financial environment. She can reduce how much she, you know, contributes to Canada pension plan. The overall total change on different factors that we worked out for her, the situation is going to be like around 2000, maybe $2500 a month, maybe even as much as $3000 a month of total financial cash flow readjusted in her life. And she's not working any harder. She doesn't have to go and earn more money to do this. She has to change and reprioritize how money was flowing through her life. So now this is common for everybody. The answer is no. This is an outlier circumstance. But it all started with our thinking. And now because she knows how she can control that, she can start creating a tailwind to her financial life. She can optimize this cash flow on an ongoing basis. And she's at a young age, she's, you know, in her early 30s. This is going to have a momentous impact for every future year, for the rest of her financial life.

Well, this is awesome, Rich. I'll take it one step further because you say, hey, not everyone's in that situation. Well, maybe not like that's a huge amount of subscriptions and things like that she's paying for. And to your point, everyone knows, you know how it is, even Spotify you mentioned that earlier. YouTube, premium, whatever. Like you have these things you can pay for on a monthly basis or you can do the yearly subscription. There's usually big time savings. Well, let's take it back to the home and the family for a sec, Rich. I actually have my policy loan payment tracker open that I was sharing with a client earlier and showing them how I operate my system. Well, what did I just take policy loans for recently? My wife's CRA bill, My kids critical illness insurance premiums. My wife's critical illness insurance premiums. My home and auto insurance premiums. I have other things that I have to pay for. And many of these things sometimes, you know, some insurance companies, like I work with my, what do you call it, home and auto insurance company that I won't mention, they don't happen to give you a discount when you do annual versus monthly. A lot of them do 3, 4, 5, 8%. Some of them.

Right.

You pay annually versus monthly and you save a lot. I don't really care about the savings. The savings is a bonus. As far as I'm concerned. I was paying $420 a month for home and auto insurance. I don't really care if I get a discount if I pay it annually versus monthly. What I care is who's getting the payment, who's getting the money. What I do is I build up this system of policies. I have capital available in the policy system. Money's got to come from somewhere. You just got to pay the bill, right? So I access money from my system. I pay my home and auto insurance. I pay all these premiums annually. And guess what? I'm fortunate and blessed enough if I had to pay all those payments monthly. Like I used to do 35 automatic debits per month. What a nightmare. I have like zero now. I used to be able to pay all those payments monthly. I was already used to making them, wasn't I? So now I use my policy system, my own family banking system to pay the annual premium. And then what I do is I create my own loan repayment schedule to create that tailwind. I'm now continuing to make the monthly payments that I always used to make for all of those different types of subscriptions and insurances and all the stuff that you were mentioning earlier. I've paid all those annually now using my policy system while I continue to enjoy uninterrupted compounded growth on my capital inside the system, which is contributing to my tailwind. And now because I'm a responsible banker, I read Nelson's book, page 17. I want to say the grocery store. The grocery store. So I'm still making the payments. In fact, I've increased my payments. If I have to pay critical illness insurance, it's 192 bucks a month. I'm paying 100 or 200 bucks a month back to my system because I can, but I'm getting all that money back. So those monthly payments that I used to send to all those other, essentially, banks, I was sending money to all these other banks. I'm sending all those monthly payments right back to my own bank. And that's exactly what you're talking about for your client there. She's going to be able to now recapture a whole boatload of that money that was just leaving her for services and subscriptions. Yeah. That she needed. But now that money is going to be put to work for her instead of being put to work for somebody else. And she still gets the subscriptions. And she has a lot more control and a lot more peace of mind and a lot less stress. And, you know, I really enjoy the fact that back in July, I increased my monthly payments that month because I missed a couple in June because I was busy and I was traveling and I was doing all these things. And guess what? I didn't get a phone call or a letter or a cancellation in my insurance or a whatever because I missed the payment. Yeah, I made it up, but I didn't stress. I didn't worry about it. I didn't even think about it because I'm in control and it makes a world of difference.

And there was even one other win, like, in the process of going through that discovery, she also said, hey, here's four or five of the tools I'm using. And here's another tool that will accomplish all the same things. Kind of smashed into one. It'll simplify my process a little bit. I'll have a little bit of a learning curve, but it'll add even more value to the longevity of my business and how I help my clients. And because I can bundle them together now, I also save $150 a month. So that was part of the total savings value there. So it wasn't all just on the discounting. It was also by taking an introspective look at what she was using as tools. And then, hey, she found a better mousetrap at a better value proposition. So that's also part of it. Now, if we add all that stuff up, if she. We looked at the same amount of cash flow, you know, about 30 grand a year, basically, is what she was doing. If she had to invest that money and invest the monthly payments and to get the same equivalent return or whatever on savings value, like what she now can, reducing that value from being 30 grand down to like, you know, 18 grand or whatever, you know, or 15,000, whatever it is that she's reducing it to, that's like the equivalent of like 100% plus rate of return. Like, she would've had to go get on the open market to create the same environment. And she didn't have to work any harder. She just had to reallocate capital and rethink about the situation again. It's an outlier example, but there's little efficiencies in your life, in your financial environment. You're already living in a financial environment, some of which you can control, some of which you cannot control. Bank of Canada, Federal government decisions, next election, whatever shenanigans, market factors, you know, global strife that might be happening, all this stuff is outside of your window of control. But at the you and me level, what are the pieces you do have control over? And if you're not exercising a measure of control over it, you are abdicating that responsibility to someone else. Stop doing that.

100% rich. That is so powerful. So can I just to cap this off, to share what I heard you say, I think one of our colleagues shared an analogy. Let's say I have $10,000 a month. That has to be payments and various expenses. And I'm able to put, let's say $1,000 a month into some sort of a savings or an investment vehicle. So what we do, what we're taught to do is we're taught to focus on the thousand, the small number, and try to grow that by 10 or 20%. So if I grow my thousand bucks by 20%, now I've got 1200 bucks, right? I got $200 extra 20%. Most people pretty happy about that. I got to make that money, work pretty hard to achieve 20%. Fair enough. Might have to take a lot of risk. Yada, yada, yada, right?

Probably a lot of risk. Yeah.

Now, if I got this 10 grand and those payments that I have to make, which is a function of banking that somebody else controls, if I focused on that 10 grand and found a way to better control the environment and better control the process of banking, if I was able to recover or recapture, let's say, 20% of the 10, that's leaving me, that's $2,000. What's the rate of return on that. So we're focusing on the wrong pool of money here. We should be focusing on what's leaving, rather than what you're trying to keep and putting that to work. If we could find a way to reverse the flow of your money, you would dramatically enhance your rate of return. Is that a fair statement?

And you wouldn't be focused on the rate of return. Instead, you'd be focused on the recovery of capital that was already willingly sended to someone else. And by the virtue of doing so, you would end up with more capital. And because you have more capital, you have more opportunities to therefore grow that capital in other areas of your life. More investments, more opportunities, more joy. Like whatever it is that you want to do with it. You're only amplifying your capacity by making these changes and shifts in your financial life. Hey, check out the rest of this conversation. You're out here enjoying the crap out of it. Head on over to the banker's vault and pick up the rest of the chat, because it's pretty awesome.