Never Lose Money Again: Build Your Indestructible Wealth System

Imagine co-owning the lender on your mortgage, or you outrank everybody. It all boils down to where the money is flowing to and who that money is being put to work for. Picture a day when you're in a position of total and absolute control financially. I can tell you it's starting to feel pretty doggone good.

Hey everybody, it's Richard Canfield here. I want to introduce you to an awesome new series that we're excited to share with you on Wealth on Main Street. One of our incredible advisors, Mike Smela, has been doing something I I really respect. He's been going through our book Cash Follows the Leader, and he's going through it chapter by chapter, and he's sharing his own notes, his insights, his highlights. Man, does he have a lot of highlights. The key observations fundamentally that stood out for him as he read through this book, and he's done it with a number of books. We're excited about launching some of these series because Mike, not only is he a great reader, he's a great observer, and sharing those observations so that you can get a fresh take on this incredible content is really valuable. Now, this isn't just a summary, it's really more of a breakdown and the perspective of someone who's actually applying this in their own life and who's also sharing this with other people. And so he's having those interactions on a regular basis. He's also got a breadth of life experience, and it's really helpful to get his journey and through his eyes as someone who had a lot of time in both blue-collar work, running multiple businesses, and helping people where they like to be helped, right there at the kitchen table. So Mike's a great guy, and I think you're going to get a lot of value with this. Now, if you're reading the book yourself and We really think this will help deepen your understanding, or if you want to go through the book again and follow along, that's a great way to do it. Make sure as you go through the series, you leave a comment below on something that really connected with you from what Mike had to share in his observation or something that you took away from the book yourself. So with that, let's go ahead and jump right in to Cash Follows the Leader, chapter by chapter with Mike Smellett.

Well, it's Mike. Welcome back. Cash Follows the Leader. Our next chapter we are talking into on page number 29, chapter 2. The foundation is the base policy. So we're going to talk about how do we design, how do we build these policies for growth, how do we build these policies for control, how do we build these policies to create the cash value that we have the control over and, and create liquidity for us in our needs throughout our lives. So page 29, picture your home's foundation as we describe the importance of the base policy. And just as a foundation's primary purpose is to hold your house up, the base policy also needs to be built right the first time. The following elements will make your base policy structured sound. The policy owner, you, outranks everybody. The minimum required premium you choose to deposit can never increase. It can go down, but never up. So you are the owner. You outrank everybody. The minimum required deposit— again, that's what your choice is— and never increase. It can go down but never up. Thirdly, you have ready access to money on demand on your terms by utilizing the guaranteed policy loan provision. More control. You co-own the lender, which is the life insurance company. Imagine co-owning the lender on your mortgage. That's what we're trying to accomplish here. That's what we are accomplishing here. You're the co-owner. You co-own the lender, the life insurance company. When you access policy loans, you control the repayment schedule. Remember the characters in the financial play of the depositor, the banker, the borrower, and the bank owner. We become all four characters in the financial play. So again, when you access the policy loans, you control the repayment schedule. It's up to you. When I took out a policy loan after my wife Paula passed away, I took out policy loans for the next several years to live on, honestly, and I never paid them back until several years later. As I started getting things back in order financially, I was able to then start paying the loans back. But it was up to me. It wasn't up to somebody else. It wasn't up to anyone else. So you stay in control. That is really, really cool. Okay. The eventual payment of death benefit proceeds is contractually guaranteed and income tax-free to your named beneficiaries. Your total cash value rises daily and cannot go backward, and there is no taxation on the daily accrual. Each year that a dividend, that a dividend is declared by the life company you co-own, it is contractually guaranteed to be paid and not be repossessed and not lose value and does not trigger tax when used to purchase paid-up additions. And why do you want to purchase paid-up additions? Because it makes the value grow higher, makes the amount of insurance grow higher, which makes your cash value growth curve go higher. Cash follows the leader. All of the above and more make up the foundation of your policy. In simplicity, we're dealing with a life insurance contract, a policy, or a system of policies. This unilateral binding contract has two essential building blocks. Total cash value and total death benefit by age 100 in Canada, 121 in the US, the life insured. Both components must match. Remember, cash value must equal the death benefit by the end of the contract. Must. That's cool. Shifting your thinking from the product, the policy, back to the process of becoming your own banker, bank requires deposits in order to make loans. And regardless of whether or not you become the banker in your life as it relates to your needs, the truth is you are always going to need the use of money. And the question becomes, who controls the banking function? And that money must come from somewhere and some organization. Start to think about that and start to shift your mindset toward— from someone else's institution and organization and control into you. Excuse me. You can become that someone, and the life insurance company that you co-own can become that organization. In this way, you now share in the profits of the lending business that you that you require for your life's needs, plus the lending needs of others who conduct their financial affairs this way. When you create a policy, and if we have the same underwriter, if both of your policy and my policies are with the same underwriters, we're both in business together. We both co-own the insurance company. When you take out policy loans and repay them, you're helping me. When I take out policy loans and when I pay premiums and I'm pay it back. I'm helping you. We're all in this together. What a cool, cool thing.

Hey, it's Richard here. We're talking about Cash Follows the Leader, led through by Mike Smela. Great observations that we're hearing. If you want to grab a copy because you don't have one, head over to CashFollows.com. That's CashFollows.com.

Think of total cash flow as your own aquarium of capital that can and should flow at a cost to meet your and other families' needs. Think of your pool of financial value as being utilized as collateral to borrow against on your terms for your family and your business and to purchase all the things that you need throughout your lifetime. And because your aquarium grows daily, the percentage of the banking function that you can control in your life also grows daily. Isn't that good? That's good. As time progresses, your system of policies become your indestructible warehouse of wealth, and gradually what you would have previously utilized someone else's bank for, you begin to finance through your own family banking system. It all boils down to where the money is flowing to and who that money is being put to work for. You do have options. You can keep working hard and have all your income continue flowing through the books of someone else's bank, or you can take— incrementally increase your own system and take over the banking function as it relates to your needs. It all boils down to logic and motivation. Is it logical to become a banker in your life? And are you motivated to take action? I want to take you back to the 4 characters in the financial play as we review another example. Suppose your daughter needs access to money for this semester's college tuition. She comes to the bank of mom and dad asking for $15,000. You look into your system of policies and see cash values available greater than $15,000. Can you simply request a policy loan and then write your daughter a check? Yes, that is your privilege, but that is not taking control of the banking function as it relates to this particular need. On the other hand, to properly implement the process and to build a sound family banking system, you draft a loan agreement that includes a predetermined repayment schedule. You review that agreement with your daughter in its entirety, and then all parties sign off prior to the release of funds. So who are the four characters in this example? The depositor is you. Borrower your daughter. The banker, the one that's making the loan, is you. And the bank owner, that's you too. As the banker and the bank owner, you will earn interest on the amount borrowed while still accumulating more total cash value inside your system every single day. Remember, your total cash value amount increases with premium deposit deposits and has contractually guaranteed daily growth. It must do this to follow the leader, the total death benefit, to age 100 or 121. Your cash value does not go down whenever a policy loan is accessed. Best of all, when you transfer the knowledge of this process along with the money, your daughter will know that every dollar she pays back into the family banking system will be available to her again And again and again throughout her own lifetime, she's going to college to learn things. I can promise you they aren't teaching her this. This becomes incredibly important to the daughter, in this case, to you as the parent, to all of us with all of our kids and our grandkids. To not only provide the vehicle, but even bigger, to provide the wisdom, the know-how, the knowledge, and the working aspects of how this does go, so that that's all they know and that's all they become. Designing the base policy to meet your needs. The one thing we can say for certain is that no two policies are alike. Why? Well, no two people are alike, and everyone's needs vary. As you picture what it will be like working with an advisor on our team to create your own base policy, we also want you to think about how you'll feel when you're in a position of control. Imagine a position of financial control. How will that make you feel? I can tell you it's starting to feel pretty doggone good. Picture a day when you're in a position of total and absolute control financially. Wow, pretty cool. In designing your policy or system of policies, our team will focus on consideration of— for your needs and core objectives, both while you're alive and when that day comes when you've passed away. We will help you to prepare for each step in an upcoming chapter. So yes, the, the base policy becomes the foundation. In the next part, we're going to talk about supercharging it, adding floors onto your house. How do we create this even more efficient? So thanks for this. We will be back, um, take on the next part of Chapter 2 on page 32.

All right, check out the next chapter as Mike goes through it right here.