The Problem With Registered Retirement Plans - RRSP's| Bryan Bloom, CPA

Life insurance agents are trained by, they're trained by the insurance companies, right? And I would guess that of all the life insurance agents out there, it is 5%, maybe as low as 1% of advisors who know what we're talking about today. Because it really, it's a true partnership. And you know, partnerships are great, but boy, if you can slide a partnership so it just favors one person over the other, that I guess that's even better. And that's the traditional life insurance sales. But this is really a true partnership, right, because an insurance company makes all their money on term insurance because, you know, why not collect a little bit of money and not ever have to pay any money out. That's, that's pure profit. Right? But, but they know that sometimes death does occur early.

Why what you were taught to be true has turned out not to be. Tom It's a real pleasure to be joined yet again on Wealth Without Bay street with our dear friend and colleague in the industry, Brian Bloom. And you may recall Brian Bloom as a guest last year on Wealth Without Bay street where we highlighted his books titled Confessions of a the Capital Equivalent Value of Life Insurance and Confessions of a the Truth About Life Insurance. And if this is your first exposure to, to Brian. Brian is a chartered accountant. He's been so for more than the past 35 years. And he shared with us that most of those years he spent, you know, preparing personal income tax returns. I bet that was a whole lot of fun as a side to his normal activities involved in planning retirement and early in his career being the chief financial officer of the State University's Retirement System of Illinois. Now, of course, all that experience has really provided you, Brian, with a deep understanding of the retirement plans of people who work in the public sector. But then you went on to work with a third party administrator, benefit planning consultants, designing 401k plans, or here in Canada, our equivalent would be registered retirement savings plans for small businesses. And that helped you develop a deeper understanding of retirement plans for people who work in the private sector. And about 15 years ago, you ventured into the arena that you're in now, thank goodness. And helping individuals practically plan for their retirement years. And during those 15 years, you've been understanding more and more about how different financial strategies and products work and more importantly, why they don't work. So this is going to be a great discussion. Having authored five books, most people couldn't envision authoring one book over the course of a lifetime. And Rich and I are still working on our first book that is released as Part of the Wealth Without Bay street series, which is going to be absolutely remarkable. And the Confessions of a cpa. We found that these books have been not only outstanding for chartered accountants who are being exposed to what we're about to discuss today, but also to existing clients who are asking their accountants about this process and about this financial tool. And their accountants are saying, geez, you know, I really don't have a deep understanding of it or not. A high level of expertise or familiarity. And the Confessions of a CPA reveals why Brian was taught to be true as a CPA has turned out not to be true. And we have no chance of success, Brian indicates, if we follow what we are taught in academia in regard to traditional planning and what the mainstream media would tell you. These are all the things that you need to be doing financially. Well, how's that been working out for you? And together with his wife Pam, he celebrates 40 years of marriage. Congratulations, Brian. Sincerely. And having two daughters and three granddaughters and a grandson. And certainly they are the joy of your life. And, oh, yeah, so for you, you've said, hey, this is retirement for me. And sharing with people across North America now some of the financial realities in life that differ greatly from what you've been taught to believe. So, Brian, a sincere welcome. Thanks for being back with us on Wealth Without Bay Street. How have you been?

I've been great. Just to play off what you just said in North America, I just found out two days ago that I had five book sales in the uk.

Congratulations. That's excellent. And we're super excited to announce, and without further ado, that you've also got a new book that's just been released and the title can under the Confessions of a CPA Brand. The title being why what I Was Taught to Be True Has Turned Out Not To Be. And we will include in the show notes the link for you to get your copy. Please do. You'll be glad you did. Brian is somebody that you definitely want to be connected with and that we will continue to have contributing to our community as well. And so, Brian, what was the process like and what inspired you to write the latest edition of the confessions of a CPA brand?

Yeah, it's actually the first book 10.

Years ago, so it's an updated version.

Yeah, it's the 10th anniversary. I can't believe it. And while the principles were all the same, I was a little concerned that the numbers were just too old and would turn some people off. And so what I did was I tried to refresh it where the where the dating really didn't matter. I left it the same, but I refreshed it. I added about 60 pages of new material, including lessons we learned from COVID financially. And so it's. It's just a rework of, of the first book that I wrote, Confessions on the cpa. Why what I was taught to be true has turned out not to be. And for those who are not trained in financial things, just twist that a little bit and you might say, why what I thought was true has turned out not to be. Because many of us, we just learn from other people, from the media, from different places, and we get this thinking, oh, that must be true. But then we find out when it's too late that it's not. It's time to find out before it's too late.

That's the key. And so many people who, they follow mainstream advice and then they find themselves in a position at some point in the future, wondering, I did everything that mainstream advice told me to do. How is it that I've ended up here in this situation?

Yeah. And that's how I got to go into private practice, because I began to see that, gosh, I was. The stuff I was doing for myself, which I was taught to be true. You know, it was. Where was it? It wasn't there. And it caused me to begin to look at stuff. I mean, when you think about it, I was involved in retirement planning my entire career up to that point in retirement planning meant, well, you don't. You set money aside and you go, well, I'll be in a lower tax bracket in the future, so I'll just pay the taxes then. And, you know, that turns out not to be true either. And so it was out of personal experience that I began this writing.

What's so interesting about that statement you just made is, you know, we, we, we. We communicate this to, to people, we ask questions. I mean, we like to ask good questions. And we'll often say, hey, when. What would you rather pay tax on? The harvest or the seed?

Right.

And, and so to have someone with your credentials and your experience who is in that, you know, really in the thick of that industry, in the planning stages of the creation of plans in this style, to be able to recog have that experience both personally and then realize, hey, geez, wait a second. You know something, you know, what's, what's the expression? Is there something rotten in the state of Denmark? I think, you know, and so you, you're able to now in, through the books and through your work and through speaking engagements, you're now able to help people. Americans, Canadians, North American. Some folks in the UK understand that these plans may not have been designed that are going to produce the type of results they've been produced.

They've been told, no, that, that's right. And Rich, you bring up a great illustration, and it's funny, you bring up the, the seed and the harvest type of a thing, because in my office, I have that visual. In my office, I've got a little packet of corn seeds. Cause I'm in, I'm from Illinois. This is the corn capital of the world, you know, so I've got a little packet of corn seeds, and then I have a bushel basket full of corn stalks and corn cobs, just full. And I go, so you have your choice. Do you want to pay taxes on the, on this packet of seed or do you want to pay your taxes over here in this bushel basket? And it's like brainer.

Yeah. And what's interesting, our, our mentor Nelson, he'd also say, you know, you, you know, in great places like that in Illinois, they, they plant a lot of corn. Well, but you know, when you plant corn, you also get something else. You get weeds. Yeah, boy, if you get rid of those weeds, that corn stands out like a sore thumb. And so he would say, you know, you need to develop financial noise canceling headsets. You got to learn how to filter through those weeds. And that's, that's the media and the marketing and all the stuff coming at us preaching this mainstream concept that these types of retirement plans will, will be there to look after you and take care of you. Hey, put your money in here now. Get your little bit of a tax break now. Oh, but wait. Taxes have been increasingly on the rise over our lifetime. What's the, what's the final bill gonna be like? And that's those people that don't really contend with that aspect.

And you know, the thing that nobody thinks about is that it doesn't take a tax rate increase for you to owe more than you didn't pay when you should have. Because your tax bill, even at the same tax rate, is going to compound at the same rate that your retirement account is compounding at.

Very good point.

You are guaranteed to pay more in the future. Even if they put through a tax decrease. You're going to pay more dollars in the future than what you didn't pay while you were working. Just because it all compounds and the.

Taxes are there from the moment that that tax qualified account is created and then to your point, as the account value grows, well, you're also compounding the tax problem. And if you've got large balances that are accumulating in what we know as a registered retirement savings plan, then you've got a big problem and so do your beneficiaries.

Right. Are there investment fees to the registered retirement?

There sure are.

So do Canadians pay investment fees on the entire account?

Yep.

Or you mean they don't pay expenses just on the part that's yours, they pay government's investment fees for them.

Yeah.

Yeah. Another thing we were taught to be true, that has turned out not to be. Why would you pay someone else's fees?

Very good point. And with the fact that even in Canada, the amount of money that's been printed and pumped into the system just in the past two years, it begs the question, is the federal government going to need less or more money in the future? If you just stop and think about that for a second. And what I love about how you describe things in, in all your books, frankly, is that you make the complex simple. It's very simple to understand and it's very logical because logically, if you knew that at retirement income time, if you knew that you're going a gonna have no idea what the tax calculation is going to be, let alone the rate, you have no idea what your retirement account value is going to be, then if you could store your capital somewhere else where you've got a foundation of contractual guarantees and you have certainty and you're shielding the accumulation from tax, then unless you feel like you're not being taxed enough, where else should your money reside? Like, logically, where else should it reside? And the utilization of dividend paying, participating whole life insurance, ideally with a mutual company, has. It's not a new idea. This is an instrument that's been around longer than the three of us have been alive combined.

Combined. Right.

I'm pretty old and I'm older than I look.

But the key is, is that, gosh, and we asked you this in our previous episode. I think it's, you know, this might be time for a refresh on this too. Like if your advice to the general public and to, to chartered accountants who are dealing with the general public, what would you say to them about, you know, your journey and how you, you know, discovered just this, this better way and what advice would you impart on them now?

So there you have to be really careful because a chartered accountant or a CPA in the States, we do not want to be told we're wrong. So you never give an accountant advice. You never tell them anything. They have to discover it on their own. And that's one of the things that I found where this first book, now refreshed for 10 years, is a great tool. I've had a number of advisors give this book to their accountant or to an accountant and, and say, you know, I just met this guy, I've read through this. It's stuff that I, it just, it kind of makes sense with would you mind reading it and giving me your opinion? See, accountants are paid to give their opinion and so that's what they do and they love to give their opinion. But it starts a conversation and then in that conversation you'll know whether that, that accountant is someone that you want to continue to pursue a relationship with or not. Because they're either going to go, man, this guy's got something to say or he's all screwed up. One of the two. And. But you're just looking for a conversation starters with an accountant because they have to discover the truth themselves. You cannot tell them.

Very good advice.

I'm glad you identified that Brian, because you know, we work with entrepreneurs all over the country and you know, not just entrepreneurs, but we certainly work with a lot of entrepreneurs and professionals, you know, doctors, lawyers, et cetera, even accountants professionals. And wonderful when they, they really grasp onto what this concept, what the implementation of high cash value insurance, well structured can do with for you over a lifetime as a source of working capital. And what I find is interesting is sometimes you run into some resistance or the entrepreneur themselves, they feel the tension of the resistance that they're going to run into because they're going to run it by or they're going to have to have that conversation. They know in their heart of hearts what they want to do, they want to move forward and they want to implement the strategy for their business, they want to implement it for their family. But they don't know how to make that conversation happen with their, with their, their professionals that are working with them and helping them and that, and the professionals there to assist them. And so I find that it can create a little bit of a rift from time to time. But those professionals, those, those accountants who are open and ready to, willing to learn, man, what an incredible connection is made between that, their client and them now that they're embarking on this journey together and they get to collaborate with someone like ourselves as part of that discussion where we can have a well rounded view, good strategy sessions about how that business owner can now move their life forward and actually obtain the things they're looking to obtain.

Yeah. And remember, life insurance is not the strategy. Life insurance is a tool to get to the ultimate strategy. And so what's the strategy? Well, I want as much cash flow off the radar screen of the tax system in retirement as possible. And if possible, I'd love to be able to use that money leading up to retirement. That's the goal. Okay, now you've got to the best discussion then with the CPA on this front end. Instead of coming in and say, do you think I ought to buy this life insurance contract? No, no, no, no, no. You got to go back in with the problems. You know, what was the problem that the advisor exposed in the entrepreneur's life financially have that discussion with the cpa, not the, not the tool.

Right, right. And it's through that discussion that the logical solution to the problem becomes clear.

Absolutely. And you know, it's, you got to call it what it is, you know, but. And there's been so much negative connotation to it, but boy, once someone gets it, they get it because they got the problem. They know the problem has misled them. And if the problem has misled them in the past, isn't maybe this idea of life insurance, maybe, weren't they misled there as well? And isn't it maybe a good idea?

Yeah.

If what you thought to be true turns out not to be, when would you want to know it?

Well, probably right away.

Right.

I would go with yesterday.

And you know, if you were asked the question, so why, why participating, dividend paying, whole life insurance, why that form of insurance? What would your response be to that?

Well, it's the oldest thing around. It has worked over the centuries. Now it's been tweaked along the way, but it's the original life insurance concept. Every life insurance concept since then has tried to shift the financial burden from the insurance company back to the client. And every other insurance product has put in less guarantees in more tweaks that the insurance company can turn on or off to favor them, not you. Because after all, they're in it for them. And the whole life insurance, it's the oldest, it's the most unadulterated, it's the purest. And what we have found in the last 20, 30 years is this whole idea is if you over fund it, which again, that goes, that goes against everything all the financial entertainers on radio and TV would talk about as well. Why would you want to pay more for something than you have to, well, when you do, miraculous things happen.

That is an understatement. And people, once they. So a few things that we touched on here, really, really important for our listeners and our viewers. Once you understand the problem, the solution will become clear and you'll know exactly what to do. Secondly, your money has to reside somewhere. And so if you know, as, as the late R. Nelson Nash would say to us today, it's just a tool. The, the insurance policy itself or the system of policies is just a tool. And if you put the best tool for the job in the hands of an incompetent, not only is that person not going to turn out any good work with the tool, they're likely going to break the damn tool. And so it's really important to, to work with somebody who's thoroughly familiar with how to implement the process. The tool is there, it can be purchased from hundreds of thousands of life license advisors across North America. But you've got to work with somebody who's thoroughly familiar with and can help you implement the process so that you're doing it to solve your problem, but you're doing it the right way.

But remember who life insurance agents are trained by, they're trained by the insurance companies, right, to peddle a product. And I would guess that of all the life insurance agents out there, it is 5%, maybe as low as 1% of advisors who know what we're talking about today. Because it, it really, it's a true partnership. And, and you know, partnerships are, are great, but boy, if you can slide a partnership so it just favors one person over the other, that I guess that's even better. And that's the traditional life insurance sales. But this is really a true partnership, right? Because an insurance company makes all their money on term insurance because, you know, why not collect a little bit of money and not ever have to pay any money out. That's, that's pure profit, right? But they know that sometimes death does occur early. And if death occurs early, they got to come up with a million bucks to pay someone's term insurance policy, and they've only been collecting $32.98 a month. Well, where's that going to come from? Well, they need this overfunded whole life insurance to give them the capital so that they can produce and sell the policies that make them all the money. The overfunded life insurance contracts is truly a partnership because the client makes money, the insurance company makes money, and we leave the government out of it. And that's that, that's the best scenario, but yet I would say 1 to 5% of agents know what we're talking about.

And I would imagine that in your experience, which is, is quite vast and now in the type of planning that you do, you also probably bump into folks in the, in the industry who, you know, maybe they've, or you, you see someone who's had a policy or a bag, a bag of policies put together, which is often the case. And they're, they're, there's, there's a different hodgepodge and mishmash of them and even ones that, you know, may be well intended, that were set up, you know, for the purpose or the, the, the thinking process that we're talking about today. And they still lack optimization or they lack some refinement around the edges to really make them as functional as they could have been. With just a little bit of extra training, a little bit of extra coaching for that advisor at the beginning on the onset of the creation of that policy. Is that something that you've experienced, Brian?

Oh, yeah. I, you know, I keep learning different tweaks. I mean, I just learned a tweak on Monday that I, there was like light bulbs going off in my head in regards to how do you tweak this to really make it work? So you're always learning the tweaks. And you know, unfortunately there's, there's not a lot of longevity in our industry. I mean, I don't know what the average lifespan of a life insurance agent is in terms of being in the business, but it's not long.

It's less than five years.

Yeah. And so you've got well intentioned people that go at it for three, four years and then they leave the business. What happens to those clients? Well, someone else comes in that may not be from the same persuasion in regards to strategy and from product and they gobble that up. And all of a sudden you've got something that's poorly designed and not what was originally intended.

So important to work with somebody who's thoroughly familiar. And what we're describing is we're talking about dividend paying, participating whole life insurance, ideally with a mutual company, and making sure that the policy is designed to achieve the objective to solve the problem. So you've got to get clarity on the problem first. You can't start with the solution first without developing an acute understanding what the problem is and that that's part of our process and what we work through. And we utilize resources like your books, Brian, to help people rethink their thinking and more Importantly, to help people develop the ability to rethink their thinking. It's one thing to say it, it's a whole other thing to develop the ability to actually do it and.

Oh, I'm sorry, go ahead.

No, I was just going to say that again. This is the, the, the whole idea of putting capital into one of these types of policies and the whole idea of being able to borrow against that accumulating value is nothing new. But what authors like yourself, authors like the late R. Nelson Nash, who authored the book titled becoming your own banker, building your warehouse of wealth, et cetera, being blessed beyond the definition of good fortune to be mentored by him for so many years, he really helped us to develop the ability to rethink our thinking.

Yeah, yeah. And that's, you know, that's what a lot of these books that I've written are for the one that we're talking about today just happens to be the lead in one. Why what we were taught doesn't work. You need to look somewhere else. But that middle book, the truth about life Insurance, that should be required reading from. For everybody who owns a life insurance contract every year. Because I can't tell you how many times I've had to re educate why someone's doing this. And if they take that middle book, the truth about life insurance, it just serves as a great conversation starter for a review meeting, especially the back half of it because Nelson, yeah, Nelson, talks about how you use your money while you're living.

Right.

And that second book talks about it as well. And it's just a great conversation piece for a review meeting because clients need to hear repetition of this because they've got everyone in their brother coming in the other year talking about wacky stuff and they forget because no one else is talking the way we are.

And you make a good point. In fact, that's actually how our podcast got started was, you know, for us to be able to have those conversations on a regular repetitious basis with leading experts, share additional details, things around the edges of how we implement this strategy in our life with our clients and with people who are curious and hungry to learn and they're really itching to get to the core of information and they're constantly avidly exploring their learning journey. And there are many people who just aren't willing to do that. And it's unfortunate because if you could have. It doesn't matter what you're doing financially, if you're trying to do a long term financial project, let's say it's an Investment in abc. If you don't keep tabs or follow up or pay attention to what's going on with that, what's the chance that this ABC could go the way of the dodo bird? Like, it's, it's pretty high. And so as, as, as consumers, it's really important that you have to engage, you have to engage in your financial life. That means constantly learning. That means reading books, listening to good content. Hopefully this show is the good content you're listening to. There's many others like it where you're able to constantly recognize the value of what you're doing and you're able to spark new ideas. Something that Brian says today, something that Jason says today could be enough to give you a spark of an idea that was always there, but now we've lit it and turned it into a fire in your brain about something new you can implement in your financial life. That's all it takes. And sometimes that's the difference between getting the success that you really want versus the success that you end up with.

That's a really good point, Richard. And you know, for the both of you, I mean, we know so many examples of people who have utilized the tool to implement a process or to solve a problem, to, you know, implement a strategy. I was just in a call earlier today with a few colleagues. A real estate investment opportunity presented itself that I've been doing some due diligence on for the past several weeks. I've completed my due diligence process. I moved forward with the opportunity. Immediately following that meeting, I got in touch with my beautiful wife Rebecca, who looks after the low family banking system, as we've aptly named it. I said, I need this amount of capital to participate in this opportunity. Before I was even off the phone, the request for that capital was submitted. And I know that it's an eight month money in, money out, 12% simple interest per annum on the opportunity with a guaranteed 15% payout and my carrying costs, I'm going to get interest each month of $750 and my carrying cost on the policy loan, which here in Canada, because I'm producing taxable income, is deductible. For me, the simple interest each month is going to be just north of $193. So let's do some basic grade three math. I've got all the money in the policy growing uninterrupted every day. No matter what's happening in the economy, no matter what's happening with the stock market, no matter what's happening with real estate and the real estate cycles, no matter what's happening with inflation, I have ready access to capital to participate in an opportunity that tracked me down, not the other way around. The opportunity found me. One phone call, the money's on the way. All of my money still growing in the policy. I've got interest income and I'm doing nothing to earn it. And I'm replenishing. I'm going to get that capital back into the life insurance company that I'm a co owner of and I get to establish a relationship to create future opportunities that are going to produce more passive income. And all of my accumulation that occurred and will occur, pardon me, over the next eight months inside the policy. There is zero tax on that daily accrual of cash value, no tax. And it's going to show up whether I want it to or not. So my net worth is going to go up every single day. And I've participated in an opportunity by accessing capital on demand on my terms, not on anybody else's. On my terms. And heaven forbid, if the unthinkable happened, the death benefit will extinguish the loan and the investment opportunity will still realize again. That will show up for the family anyway. Is there anything stupid about doing that?

You know, what if that money, what if your money was tied up in your employer retirement plan?

There you go. Thank you for leading me to that. So what would happen, Brian, if I wanted to participate in the opportunity and I had to deregister or get that money out of that account? Well, I'm sacrificing account value. I'm sacrificing compound interest. In fact, I'm permanently interrupting it, which I love. The chapter in your book, chapter seven, by the way, the Miracle of Compound Interest. The book that I'm referring to is the Truth about Life Insurance and great book. Anybody listening? You need to read that book, like order it right now, pause the show and order the book. And so, and you've got to, you're paying withholding tax. So in Canada, tax is withheld at source. And so you are in a position of no control. And then when I hand the money over to the investor, well, I've handed control of the motion of that money over to the investor, all of my capital in this scenario, by utilizing this remarkable tool, dividend paying participating whole life insurance and implementing a process of becoming your own banker in this instance. And I am going about financing the investment from a position of total control.

Using the life insurance company's money to finance the investment totally Right, totally.

And Nelson described it best in his book Becoming youg Own Banker. He said this process is nothing to do with addressing the yield of an investment. It's all about how you go about financing the things that you need in life, which can certainly include investment. And Brian, you've got many examples from yourself, from clients where they've borrowed against their accumulating value to finance the things that they need in life.

That's right.

On our last chat, Brian, I think you were telling us about the buying a retirement condo to be close to the grandkids from your future dead self.

Yeah, and I'm in it today. I, I'm, I'm in Iowa, a block from my grandkids house. We were just there this morning.

Nice.

And so, yeah, I, my dead self paid for that. Now the difficulty there is Pam's going to get that much less when I die. But isn't she still going to have the condo all day long? What did we lose?

You get. You gained the life experiences by being close to your grandkids, which is very important to you, that you get to have as long as forever every day that you still exist on planet Earth with you and your wife to experience that joy, which I'm not a math expert, but I mean, if we were to apply some numbers to that, I'm sure the numbers would be pretty high for what the value proposition is to you and your wife.

But therein lies the problem. Everyone wants to know, well, what's the rate of return with that life insurance contract? Well, you can't put a rate of return on opportunity. I mean, Jason, the benefit to you may not have necessarily been how you're using the life insurance policy and this interest and that it may have been that moment.

That's precisely what it was.

Yes. You were out. Yeah, you know, I've made a practice of it with clients in my office. Now, I'm a little careful sometimes, but I'll take out of my wallet a hundred dollar bill and I'll tell the client, if you can pull out a hundred dollar bill, you can have mine. And they try to put five twenties together and they try to put a few twenties and tens. I know. No, no, no, no. You have to. $100 bill. And they go, well, I don't have it. I go, you'll get mine. But see, that's the lesson of opportunity, right?

Yeah, that's a, that's a really powerful lesson. And you know, what I described in my example is the unseen of this process. Because what we, what we are Experiencing in the industry, Brian, and you're seeing this likely every day, is that advisors are, are focusing, they're taking the discussion with the client to the anatomy of the policy, the rate of return, the internal rate of return on the cash value, the internal rate of return on the death benefit, all of that. But what I just described to you is the unseen how I, how I was able to not only achieve all the internal rates of whatever you want to talk about as it relates to the policy, I'm also able to take advantage of opportunity using the life insurance company's capital and its ready accessible capital on demand, on my terms. Everyone's talking about rates of return. Talk about the accumulation and control of capital. You need to be capitalized. Look at what's happening in the economy. When the economy decides when the, the basically when the wires snap and, and the gondola falls right off of Mount Everest, there's going to be a ton of opportunity. And I'm, I've got ready access capital to pounce on it.

Yeah.

I mean, because I'm well capitalized. There's a difference.

That, that's exactly right. And, and you know, I saw what happened in March of 2020 and the stock market just nosedived. And I looked and I go, you know, Disney's not going away. The airlines will fly again. Marriott's will, will, will start having guests again.

Yep.

Yet their, their stock prices plummeted 70, 80%. Well, guess what, My dead self bought some of that stock.

Well, we're, we're gonna have to thank your dead self, you know, and send a card, send a copy of the book. That's totally awesome.

And talking about that unseen rate of return. What was the unseen rate of return on the $3,000 life loan that Walt Disney took from his life insurance contract when no bank would finance his dream.

Very good point. And look at, look at what that, the domino effect as we refer to it as using Walt Disney as a prime sharp example of that that policy loan was the domino effect. That's what tipped the domino over. And look at what has been created.

And it wasn't huge. No.

At the time it was a good sum of money. Relative to today, it might not be so much, but at the time of token and similar stories about Ray Kroc as well and being able to, I mean again, what we now know as the franchise restaurant industry is really created off of the impetus of being able to have access to a policy loan and opportunity being available there. Now the industry has said, oh yeah, and by the Way.

Hey, if you have this policy, like.

You know, in an emergency, if you needed some money, you could take a policy loan. That's kind of how it's been, I guess, kind of promoted or maybe glazed over, I think, by the financial community for the last, I don't know, 100 years or so.

Or skip a premium payment, right?

Yeah, or you could skip a premium, in which case they end up with an outstanding loan that they completely forgotten about, which has accumulated over 30 years. And yet no one is also saying, hey, by the way, that car that you just you drove in here with to my office with those four wheels that you have to change every year, and the oil that you got to change every couple months, and the fuel that you got to put in it and the, and the annual insurance payment that you need to make on it, where's all that money flowing to? Away from your family for the rest of time.

Oh, cool.

Hey, did you know that you could use this policy to maybe try to start cycling some of that money back into your future so you can use it again before you're dead and then you can pass it on after you're dead?

If the insurance industry knew what we know and they were able to articulate it properly, they'd be standing on the rooftops of their building saying, policy loans are one of the best invested assets on our balance sheet. You co own this company. This is where you should be doing your financing business. You should be doing it here, not anywhere else. And it's catching on there. There are certain carriers that are really starting to catch on to say, okay, let's just take this into account for a second. We, the life insurance company, contractually guarantee the collateral for the loan check. We, the board of directors of the insurance company, get to establish the interest rate on policy loans. Check. We, the insurance company, know that the payback is guaranteed. It's either going to happen while the life insured is alive when the policy is surrendered, or when the life insured dies, or when the life insured takes the policy and collaterally assigns it to a commercial bank and the commercial bank will pay off the loan balance. Either way, it's a guaranteed payback. So how much of that business do we want on the balance sheet? Take all the time you need to decide. Let me know and then we can communicate to the policyholders what they don't know they have.

And I have had numerous conversations with life insurance companies, higher executives telling them what, what, where you get, what's the best rate you're getting on new Money. And it's, it's, it, it's usually lower than their loan interest rate.

Yeah.

Yet they go, no, you know, we, we really don't want our clients taking loans. And it's like, shoot people, how can you. What on earth.

Well, you know those, those carriers compared to those who understand how policy loans bolster the balance sheet of the insurance, there's a distinct performance difference between those carriers. And I'll tell you, you know the, the largest mutual carrier here in Canada, you know, we're not going to run a commercial for a life insurance company. But they get it. They, they, they get it. They understand it, the strength and mutuality. They understand that they're responsive to the policy owner. They encourage policy loan activity because they get it. They didn't get it 14 years ago.

Yeah.

But they get it now.

Yeah.

Now on that note, I think this might be an interesting thing and I'd love to get your thoughts on this, Brian. I'm sure again through your experience you bump into people or you've met people and they get bent out of shape over simple things. And a lot of times their brain wants to focus on the minutia of rates, interest rates, et cetera. And so hey, maybe they might be able to go over in our case Royal Bank, TD bank, or in your case maybe bank of America or Wachovia bank or some other institution to go and collaterally assign policy and collateral and they might even be able to get maybe a lower interest rate than what the life insurance company is offering. However, the moment they do that, all the financial energy is now escaping their closed loop ecosystem from an entity that they co own which uses that capital to bolster for the benefit of everyone that's a participating dividend paying policy owner and they're now running that energy to help spin the wheels of someone else's banking business. And then additionally if that happens, well usually they gotta make, they gotta fill out some Mickey Mouse paperwork and every once in a while things aren't going well and business changes and shifts and those banks want to call those loans due. Whereas in this case you bought this. Go back to the condo, the condo you're in today. How many questions were you asked about buying that from your future? Did your future dead self. Did you get, did you have a reckoning conversation before it happened? Did you have to fill any loan paperwork?

It was one heck of a Christmas party.

This is the amazing thing when we did this because it, you know, you take a policy loan from life insurance contract for the price of the, of the property and, and you go in on closing date and you know, usually there's a stack of paper like this for you to sign. Sign, sign. There was one piece of paper, one.

Thanks for your cash sign.

Yeah. Because it was a cash sale.

What's the rate of return on that feeling, Brian?

Oh, it's, it was ecstatic. I mean, we, we, you know. Well, and the other part of it was the offset of this. We did it right at the height of COVID Okay. And we didn't want to be in anywhere. And so we go into this closing company, we're out in a minute and a half.

I've never, you know, outside of having experienced that personally as well. You talk to anybody who goes to a closing and they leave, they leave with half a migraine going, oh my God, like, well, what did you sign? Do you recall everything that you signed?

No.

You would spend three months reading it all and it. What better position to be financing something from than a position of total and absolute control? It just creates a very peaceful, stress free way of life. And you don't look stressed to me, Brian.

Well, I know the only paper I remember from previous mortgage situations that I signed, it was the piece of paper that said that of all the papers I signed, if in chance they made a mistake, I was signing letting them make a change to what I had already signed without having to resign them. Wow.

Unbelievable. And, you know, don't worry, the banks.

Are out there to look after us, right, Brian?

That's right. That's right.

What's interesting, Brian, is that through this period of, you know, global pandemic and what we've been dealing with with COVID we've had, and I'd love to hear your insights on this too. We've had so many clients reach out to us to share examples of how they felt shielded from it because they, they were able to access capital. I have a client who's a chiropractor who had to literally shut down his practice because nobody was permitted to really go anywhere during periods of lockdown. And he said, you know, without having ready access to money from the life insurance company, I would have had to do the unthinkable. And that kept them going. I have a client who's a dentist who said, I paid off the remainder of my practice just to get it out of the way, knowing that, look, we're going to get through this pandemic and I want to come through this just without any stress, without any anxiety. And I decided to get rid of it. Other clients, you're saying I kept people employed through this timeframe. I kept my doors, you know, not open to the public, but I kept my doors open, so to speak, and didn't have to shutter the business as a result.

Right.

And that, that to us, in when times are good, the tool is remarkably good. When times are bad, the tool is remarkably good.

Yeah. So for anybody listening to this, if you didn't have that experience the last couple years and you lost your business or you had to lay people off, people you knew and you loved, but you had to lay them off, fix it for the next time.

There you go.

See the people who, who survived this time, they learned this lesson in 08 and in 08 in the States, when banks just wouldn't lend money anymore, so many businesses couldn't buy their inventory, so many businesses couldn't make payroll, and they closed in 08. Now, those folks got the message and they prepared for the pandemic. Now, if you weren't prepared for the pandemic, get ready for the next one. Now, don't hesitate. Jason talked about capitalizing, getting yourself capitalized. Get started now and you will soar with the Eagles next time this happens because it will happen. Because remember, prior to 08, it was 00.

That's right.

And the people who lost it all in 00, they figured it out and they survived. 08.

Prior to that, it was Black Monday, 1987.

That's right. So don't let this disastrous opportunity go to waste. Learn from it and get capitalized the way Jason and Richard are talking about, because this is what's going to save you the next time.

Such good advice. Thank you so much, Brian. Brian, it is always a pleasure to be with you and we will have you again. I promise you that. And for all of our listeners and viewers, be sure to get your hands on a copy of Brian's latest book. The link is right above the fold, just in the description there. If you're on the YouTubes and make sure that you pick up a copy, get a copy for someone who you think would benefit from the gift of Brian's knowledge and wisdom. And Rich, any, any other remarks that you'd like to share before we take it home?

Well, I'm, I'm all good. I just enjoyed it thoroughly and I'd love to just, you know, give Brian the chance to, to close us out with his final thoughts and anything of value you think you could share with our community of list. And what, what would your final takeaways be? As we're recording this here in Q1 of 2022.

Yeah. So some people have difficulty reading a nonfiction, like all my books are. So book six is coming and it's. It's a fictional. It's a fictional account. There's a professor in a Midwestern university, a dean of students or a dean of finance who has found murder. And the finance professor who ascribes to all of this traditional stuff has to work with the student who questions everything, who has an uncle who understands the stuff we understand. And they have to work together and they learn the lessons in Confessions of a CPA to solve the murder. And that's coming this spring.

Oh, wow. Very much looking forward to that. And we'll have you back in the spring as well. And Ryan, always a pleasure. Thank you. Sincerely. And to all of our viewers and listeners, if you're on the youtubes, just check out the playlist. It's going to show up on either side. You're going to see this playlist. Poof. It just showed up. And we recommend that you continue your journey of learning as always. Rich, take us home.

Well, Brian, you know, one of the things we like to do on our show is we like to just check in and we like to celebrate people who we think are the unsung heroes of the world. And we believe that you're a hero for the work that you've been doing for the last 35 years and the work that you're doing right now and writing your books, because these books will outlive you and they will be here for so many people to learn these lessons that you're sharing with us today. So we're endeared to that and we thank you so graciously. And we'd like to know, who would you most like to be a hero to?

Oh, any generation to come. You hit it on the head about this. The idea that the books will outlive me. My goal in life is to leave some kind of a financial legacy of knowledge so that what. What God has blessed me with in terms of being able to hone the experiences he took me through, the. The jobs that now I look back on, that didn't make any sense. I would never do that again. But he took me through each one of those life experiences to give me the knowledge that I have today. And I'm still learning every day. But I want to leave a financial literacy legacy. So I want to be a hero to anybody in a future generation.

Avid folks. Brian, thank you again. Sincerely. Make the rest of your week great, gentlemen. This was a lot of fun, and I hope that our viewers and listeners got as much value from it as we all did. And can't wait to have you back in the spring after book number six. Thanks so much, Brian.

Thank you.

Thanks, Brian.