What Is The Time Value Of The Banking Function? | Wealth Without Bay Street Podcast

If you really want to empower our family with wealth and money and we focus on the time value of money, well, it just makes sense to control the banking function so that you can actually control that and enhance whatever you want to enhance for your family, for family wealth. But it starts with us. It starts today. How much time and effort do we have with this unlimited time? And maximize that, optimize that so that you're 100% working for the betterment of your own family and folks that are dependent on you. Anybody else, if everybody's like, I want to have more wealth, I want to have this. Well, they have the right problem in their mind. They want to work towards it. Are they really thinking about the problem the right way? I want to have more money so I can grow it because I understand time value of money. Well, to do that, don't you need money and how can you get more money? Well, follow the money. Where is your money going? Who's getting it today? And what can you do today to keep it and reuse it and grow it and do wonders, wonderful things with it?

You are listening to the Wealth Without Bay Street Podcast, a Canadian guide to building dependable wealth. Join your hosts, Richard Canfield and Jason Lowe, as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future that you can bank on.

All right. What is the time value of the banking function? We are super excited to be joined today again for his second appearance on the Wealth Without Bay street park podcast, Mr. Sarblo Gill. Mr. Sarblo Gill. Now, Sarblo, if you don't know, is an authorized infinite banking practitioner with the Nelson Nash Institute. He is a coach. He is a team leader here at Ascended Financial and is an exceptional practitioner of this process. Sarblo, welcome back. It's good to have you again.

Thank you, Jason, and thank you, Richard. It's always good to be here. Although me and Jason were like 10ft apart, but we don't get to hang out much. So this is how we hang out.

Well, it's because of the COVID 19 global pandemic. We're in day, I think now we're in day 842,224 of the global pandemic. You know what we have been doing, Rich, in all of our episodes? I just dropped my pen. You see how that really didn't faze me at all.

It's very different than dropping some knowledge, which will also happen on this.

That is going to happen. And one thing that we have been wanting to express on all of our episodes, especially as of late, is to express our sincere gratitude, our sincere thanks to everyone who is on the front line, first responders, those who are working tirelessly in health care, on the front lines. And so if that's you, thank you sincerely. If you know a friend, a colleague, a family member, someone who is in that profession working the front lines and being so selfless, thank you sincerely, we appreciate you more than we can ever articulate. We kid around about the restrictions and things of that nature, but it's nothing to kid around about. And we appreciate you. So thank you. Sarblo, let's dive in. What is the time value of the banking function? Take it away.

Thank you, Jason. You know, growing up and learning from parents, learning from financial gurus out there, everybody really talks about the time value of money. You know, what can money buy today? Let's call that present value of money.

Okay.

What can money earn in future? Let's call that future value of money. We always focus on that. Let's change your focus towards time value of the banking function. And I want to use an example. So let's consider a family. And the family is making 150k per year as gross family income, which is very common. Right?

Okay.

Okay. Now, the family has some bills to pay when one of the most expensive bill is the mortgage. And on a monthly basis, they spend about $2,000 a month easy on a mortgage payment for a $400,000 house. And between husband and wife, they at least have two car payments. So combine mortgage and car, that's $3,000 a month very easily in terms of just payments towards major things that they finance.

Yeah, that makes sense.

Right. And that financing is a banking function. Now, $3,000 per month multiplied by 12, that's $36,000 per year. That's what they're spending on that now. To earn $150,000 per year as gross income, they. They kind of have to go and work.

That's right.

Yeah.

There's no.

Nobody's been able to point out the money tree in anyone's backyard that you can just go out and shake $150,000 out of.

I thought the money just showed up in my bank account, Sarah. I thought that's how it worked.

So to work, you got to exchange your time for money. And if you just look at the average family, you know, working 40 hours per week, and let's just give them two weeks off in a year where they don't really have to work this Location and start and Christmas and new year break. That leaves them with 50 weeks a year. So 40 yards.

Sorry.

By the way, I'm really happy to know that I'm above average because I'm working so many more hours a week than the average family. So thank you for pointing that out for me.

It would be the equivalent of three families, three average families.

All of our business owner listeners are like, yep, I know what that's all about.

Go ahead, Sarblo.

Sorry.

We're gonna have. For listeners, we like to have fun, especially when we're among friends. And so. Carry on, Sarblo.

I think combined between the three of us, we have a new average. It's so 40 hours per week multiple 50 weeks, that's 2,000 a year, give or take. Right. Right now I'm going to pull up my trusted calculator. So 36,000 is what they're spending on payments. If I take 36,000 and I divide it by $150,000 is the income that they make, that's about 24% of the income being transferred away, which means 24% of the time that they're working in a year, they're working for someone else.

Yes, see, I get it. Yeah. The time value of the banking function. Okay, carry on. Yes, this is good.

Time is of the essence. You only have so much time in a year. And in our mind's eye, we think that we are actually going to work and produce all this to provide for a family, for our family's future. Naturalizing the 24, 25. Even more than that. For some families, that time is spent adding value to someone else's banking function. And I'm just considering. Or we're just considering. Mortgage and two cars, just major items that we finance. We finance appliances. We finance home theater systems for furniture.

Effective, sorry, Student loans.

Student loans.

We finance everything that we buy.

Yeah, everything.

Everything.

Whether you pay cash, whether you lease, whether you finance, you truly are financing everything that you buy. Even when you use your own cash and you pay for it, you've made a financing decision. You've decided to permanently give up the opportunity to earn interest on that money ever again. That is a financing decision. Do you think the bankers make that same financing decision? Not a chance.

No way. And if he built on that, Jason, then it's not just 25% of their income that they're financing, it's all of it.

Almost.

Almost 80, 90% of the money just spend financing, which means 90% of the time spent per year is actually spent to profit Somebody else's banking system.

So what's the solution to that problem?

Well, now that we know on an average, and that is a low average, if you're spending 25 to 30% of your time producing profit for someone else's banking system, don't we think it's worth taking some time off a busy life to understand that function so that we can truly spend 100% of that time for our family by controlling the banking function? And the solution is what Jason is showing.

So for our listeners, driving in your car, Jason just did the slow raise for the Becoming youg Own Banker book into the camera view. And as he's prone to do with a goofy look on his face, which I always appreciate. And what's really interesting too, as you, as you share that Sarblo, as I.

Look at Mark Brown, appreciates that.

The, the, the key of, the key of the time connection that you've just made here, I really think that's a fascinating way of looking at it. And what that tells me, number one, is that you've been thinking on your thinking, as Nelson would indicate. And you know, we often, we often look at, you know, Nelson talks about, in his book about, you know, the, his average North American family and earning $35,000 a year and 35% of every dollar was walking out the door towards interest. And a lot of that had to do with the fact that we're constantly caught in the cycle. We're refinancing, recycling dollars. And then, oh, hey, we got some equity in the house. Boom, let's refinance it. And then, yeah, we might have a lower payment, but we just started off the calculation of the amortization of the interest at the front end all over again. And so Nelson really walked us through that a number of times. And the. Then he led us into the airplane analogy tailwind. And we're constantly flying our financial airplane into this headwind of interest and money and payments that are going out the door. Well, by implementing this process the way that you're talking about, we can shift that over time where now we've got a tailwind where that payment stream that used to walk and flow away from us, that 24% of energy that we are working for someone else, we now have that energy and that flow of it coming back towards our family's system that we can now repurpose and reuse that capital for all the other things that we want to do in life and be able to transition it to the next generation. What a powerful observation. I love it. What a great, great, great. We got to come up with a drawing to look at what you just did. Start thinking on that.

Richard. Yeah, absolutely. 100% correct on that. If you really want to empower our family with wealth and money and we focus on the time value of money, well, it just makes sense to control the banking function so that you can actually control that and enhance whatever you want to enhance for your family, for family wealth. But it starts with us. It starts today. You know, how much time and effort do we have with this? Only limited time. And maximize that, optimize that so that you're 100% working for the betterment of your own family and folks that are dependent on you, not anybody else.

The other thing that this really ties to for me, Sarbul, that comes up, what really popped into my head, I actually was on a conversation earlier this morning about this, and it's something that Jason's asked on the podcast a couple of times, but it's like, hey, look, we both co. We, you know, Starblow, you and I, we co. Own a grocery store. And the moment that my wife not to pick up my wife, because Hope she's not listening to this, she goes and starts to go. She goes and buys something at Superstore or Safeway or wherever she wants to go, and she's not buying it from our store. I'm going to guess that you and your wife are going to be pretty upset about that situation because money is leaving our, our business environment where it could be coming back in to go buy more inventory to put on the shelves for all the other consumers of our store. And when we have 24% of our energy disappearing to go feed someone else's grocery store, the moment we can redirect that back into our system and we are now in a mutual relationship with everyone else that is a part owner of that grocery store. So the mutual insurance vehicle that we're talking about for this process, becoming a banker, we're now all cohesively working to the betterment of mutual profitability.

Yep, absolutely.

And that is such a powerful teaching moment to understand that the financial energy that you're able to redirect away from someone else's system and change that so it's being added to your system, you immediately improve your financial situation. And Sarblo, you can attest to this. I mean, you're speaking with the general public every single day. People from all across Canada who are reaching out, they're excited, they're on their journey of discovering this process. And what are Some of the common things that come up for you when you're explaining the time value of the banking function. What are some of the reactions that you get from the general public?

Well, there's a lot of aha moments, Jason. And you know, one of the things that people. So again, you know, I always tell them, take the time to educate yourselves on the essence of the process of becoming a banker. And they're like, can I get some resources? Yeah, absolutely. Here's one resource. And there's other resources. Waltz without the Bay Street Podcast. And once you understand that, you know exactly what to do. And then they come to me, they're like, okay, can you sit with me and look at my financial picture? I said, yeah, we need to understand where you are in your life journey and where you need to go in your life journey. So the current state and the desired state, once we have a clear understanding on all this, then we can design the bank for you. That'll get you to where you want to be.

Like Nelson said, I mean, we're not talking about a bank in the conventional sense of the word. We're talking about. And you clarified it so well. We're talking about the function.

Yeah.

Because someone has to perform it. So good. So good. The time value. What is the time value of the banking function? Ask yourself this question. When is the last time that you thought about. So right before you decided to purchase something, when was the last time you. You asked yourself that question? Hey, I'm thinking about going out to buy that set of appliances. But before we do that, dear, maybe we should find out what the time value of the banking function is. Nobody does that. What are people thinking about? Do I have one of two things? One of three things? Do I have enough cash saved up to purchase those appliances or whatever it is that you're thinking of buying? Do I have a good enough credit score to qualify to finance it? Or do I have enough balance credit limit available on a credit card to make the purchase? But nobody's sitting down and saying, okay, if we pay cash for it, I wonder how much interest are we going to give up the opportunity to earn for the rest of our lifetime and every generation that comes after us? If we make even just this one purchase, using our own cash to buy that fridge and that stove, if we have to qualify to get it financed, every payment that we're making is a deposit into someone else's banking system. We're transferring financial energy away from our family and adding that energy to someone else's system. If I swipe the credit card. Well now I'm thinking about okay, how am I going to feel when I get the credit card statement the next month and I see that it's going to take me 127 years and 6 months to pay off the balance if all I do is make the minimum payments. The time is going to go by in your life and there won't be a single moment of time where you are able to transact something without money flowing from one supply source to another in a very short timeframe. Otherwise the transaction doesn't happen. Those narrow minded folks won't do business with you.

No sense of humor at all, right?

No sense of humor at all. And so what Sardlow is describing is incredibly powerful. The time value applies to any financial decision that you're making, but yet nobody's talking about that. The most common thing that people are focused on is rates. And that's exactly where the bankers want you. That's where they want your thinking to be. You've been duped. You heard it right here on Wealth Without Bay Street. You have been duped because you're focused on rates. You're not focused on redirecting that same rate or more back to your own system and immediately improving your financial situation. Someone has to perform that function of banking in your life and it should be you. We cannot emphasize that enough.

Well, and there's something else Serblo, that comes up for me based on this thought process that you've kind of isolated for us. And you know, we have individuals, there's, there's people that have, you know, debts to some other third party pile of money, you know, their regular bank or whoever it is. And then, and then there's the ones that you know, again we have a lot of people who are cash buyers and they're really adverse to debt. And debt's bad, debt's bad, debt's bad and good, bad or otherwise, it just is, it just is. And what we don't really recognize is when you're paying cash for things we often don't, we can't, our brain doesn't necessarily see because we're not trained to see what are we giving up by doing that. So the finance, everything you buy, that's a great statement but we have to actually think it through. And so as an example, I did this earlier today again on a call, kind of at random. It was a $6,000amount of money and I said was for something coming up and like, well if you, if you put that $6,000 into this thing let's use the appliances that Jason was talking about a minute ago. Well, over the next 40 years, this is a 35 year old gentleman that worked out to like 28,800 bucks in lost opportunity at that one. That one transaction over a 40 year timeframe at about 4%. So that, so what are we giving up? Well, 28 minus the $6,000 is still 22,000. Right. So we would have got our, had our six still available. Plus we lost 22,000 of potential over that time frame. And that doesn't include when you set it up through the structure that we're talking about. Also the additional tax free benefit the day that someone leaves planet Earth. Because I don't know about you guys, last time you looked in the back of your net circle, did you have a stamp on there that said your best before date?

Well, and the other thing too rich. I mean, you can sell the appliances if you lose a loved one, but the proceeds will be nowhere near what the death benefit proceeds would be on the insurance policy.

Well, plus if it's your, if it's your washing machine and your dryer, I mean, it's going to be pretty tough to, you know, have clean clothes for a while. So it's still not really solving any problems.

Right.

And so you can get, you can get all of that done in the same method by just changing where you put the money. That's all we're doing. We're just redirecting where the money goes. And then who's going to keep more of it?

It should be you. Yeah.

Well, Richard, on that Note Also, so $28,000 is what the lost opportunity is. Now, how much time do you have to go work or spend to work and earn that $28,000 back? What's the calculation on that, Sarbo?

That's so powerful.

Sarbo, can you say that again exactly the way you just said it?

Absolutely. So we spent cash, in Richard's example, $6,000. And that cash could have been earning him 4% in Richard's example. And over the last 40 years, that cost of loss opportunity, because once he spends the cash, the money is gone forever. He cannot earn interest on it. That cost of loss opportunity is $28,000. Now if that person is worth $25 an hour, how much time does he have to go work to make that $28,000 back? 1,120 yards.

Not including the fact that you can tack on some more on there for the tax man.

Yes. Well, this is just gross, not net. So the net 28,000 is like you got to work another year to make up for that one transaction.

And who are you working for? The bankers. So we would suggest to everybody, stop working your butt off for someone else's bank.

Well, and I think what's kind of fun with that is it takes my brain to thinking about, everyone's talking about it, and I've been saying it a lot too, is really popular language nowadays is the side hustle. And what's your side hustle? And what is that? You know, it's just, it's just people looking for other avenues to go and create. Create extra income sources, which is, which is good. And what that means is it's showing motivation and showing people are willing to do extra to go and earn and do things. So it's great. And a lot of people have great side hustles that are working for them really, really well. And if you don't have one of those, you should maybe start researching where to get one. But we have, we have people and clients that are actively pursuing and generating new revenue streams on these kind of quote unquote side hustles. And they're using that to go and, you know, go and add to the size of their family banking system. They're using that money rather than, rather than losing that potential, they're putting it to work in another financially beneficial area of their life so they can multitask the money. And you know, so it's, it's, it's just such a. The reason they're able to do that, though, is because of their thinking. They're thinking about. I recognize if I just have this money disappear again, it's gone forever. Whereas if I now use that to go and increase the size of the family system, I'm creating more wealth potential on all aspects of my life by making that decision. And I'm conquering Parkinson's law, which is something that Nelson talks a lot about in this book. So, you know, Parkinson's law, a couple basic principles is that a luxury once enjoyed becomes a necessity. Well, if you're, you know, the time of our recording this, we're near the end of January 2021, and there's a bit of a cold snap happening in Edmonton. I myself, extreme grass outside. But you know, I've been hearing, I've been hearing from several people. It's pretty chill out there. And it's like, so, so I, I.

Know you're not in Chilliwack, you're in chilla warm chilliwarm, B.C.

There is, there's these beautiful things that we have in our car these days are pretty standard, at least in Canada that you got those, you got those seat warmers, you know, now the steering wheel warmers. And it's like once you get used to having that, it's really difficult to go buy a vehicle that doesn't have it. Like, same idea you have we used to have, you know, I'm sure you guys remember having a crank roll up window. I haven't used one of those in a really long time. I don't think. I don't even know if they make vehicles that have those anymore. So that's a luxury that once enjoyed becomes a necessity. And in our financial life, another principle around Parkinson's law is that expenses rise to equal income. Well, if we're not managing that and thinking about and being prepared on how to take control of that situation, that's what happens for so many people. And we're just constantly having the money flow away. Whereas if we say, okay, look, let's take this extra raise or this extra amount of income and let's properly apply it, let's make it part of our regular monthly or bi weekly, not expense, but redirection of money into something that we can control. And then you're conquering that environment that Nelson talked about. And that's not about an insurance policy or about. It's all about what's going on in between our ears. That squishy mass of our brain that determines how are we going to think about the flow of money in our life.

Well, going back to the whole rates thing, what is the rate of return? What is the rate of return of what? What's the rate of return of your time, getting your time? It's irreplaceable. It's the most important investment you can make. And again, the predominance. Oh, thank you. I don't know who that is, but I think it's. Oh, that was, you know what that was? That was my phone.

Siri wanted to chime in on a conversation today.

Wow. Hey Siri, can you say that Sarbloghil is awesome? Who do you want to send it to? Sarblo. Gil, your message to Sarblo says Sarbloghil is awesome. Ready to send it? Send. Okay, it's sent. Oh, okay. Here, let's do this. Hey Siri, what is the time value of the banking function? Okay, I found this on the web for what is the time value of the banking function? Check it out. And it's, and it reads, tune in to the wealth without basically podcast on Sarblo Gill that talks about how does Siri know that?

I love how we have. We had a sudden guest, guest contributor to the episode today.

Well, we should have Siri on the podcast.

Actually that could be a very interesting. We could have some pre planned questions and just like see what Siri has to say. That would actually be really fun.

No other podcast interview on the planet has ever interviewed Siri, I betcha.

Well, for any of the folks tuning in, I'm sure you've listened to a number of other podcasts. We would love to hear your comments on what questions you would want us to ask Siri on a future episode.

All right, all right. So Sarblo, talk to us a little more about this because the way that you articulated is very, very easy to understand. It's really easy to grasp because once a person, again, once they understand that, of course, every decision that you make with money is a financing decision. Whether you're using your own cash or applying to access someone else's, there's always a financing decision involved. So maybe could you. What's the popular buzzwords on can we hang out with the guys on Bay street if we say Sarblo, could you unpack that a little bit more for us? That's a $5 phrase. We can hang out with the bigwigs there, the head funds, the hedge fund managers out on Bay street if we use that word. Could you unpack that for us, Sarblo, a little bit more?

I think what those guys are unpacking is your wallet, though.

And using the money to go to GameStop and buy some stuff. Okay, sorry, go ahead.

Well, Jason, one of the phrases that you share with us all the time in our special Learn with Jay session is the problem is not the problem. The problem is how we think about the problem.

That's Dan Sullivan right there. Dan Sullivan, strategic coach.

Yes.

Yeah, thank you, Dan.

And if everybody's like, you know, I want to have more wealth, I want to have this. Well, they have the right problem in their mind. They want to work towards it. Are they really thinking about the problem the right way? I want to have more money so I can grow it because I understand time value of money. Well, to do that, don't you need money and how can you get more money? Well, follow the money. Where is your money going? Who's getting it today and what can you do today to keep it and reuse it and grow it and do wonders, wonderful things with it.

I love that. That is really powerful.

In Nelson's Book, Sarblo. I don't recall what page it's on because my, my back, I threw my back out and my book is on the floor. So I'm not going to reach down and grab it right now. But Nelson, he talks about how serious introspection must occur and you have to reevaluate in order to take on this process. And to embrace starts with reevaluating. Where are you spending all your resources? Because everyone is already spending all financial resources on that which they think is best. Now that we've challenged your thinking, we need to reset that.

Okay, so after a temporary Internet malfunction brought on by the hedge fund managers that are really upset with the comments.

The ones that missed out on the rise of Zoom stock during COVID So.

We were saying, so we were Talking about page 65, Ern Nelson Nash's book. Rich, you shared some really, really good wisdom there. We didn't lose the audio. We still had you on audio. So that did not escape. But Sarblo, what else would you share with listeners about the time value of the banking function?

What else I would share is educate yourself on a function that you're spending the most of your time in a year. If you're spending 24 to 30% of your time doing that, I think it's worth the time to understand it and control it. But it all begins with you.

That is so good.

So good.

Rich, anything that you'd like to impart on listeners before we wrap up this amazing episode in.

You know, they, they have, what do they call it, Tax Freedom Day, I think, which is like, what day in the year, the calendar year? Have you finally like stopped working for all the taxes that you're going to pay in the year and you're actually now earning for yourself? I think it's like moved up to June 10th or something. It's more than half of the year. You basically spend kind of paying for taxes, et cetera. And so considering the longevity, the long term thinking that Nelson's imparted on us, because rule number one is you got to think long range. We can't get rid of all the taxes that you're going to pay this year or today, but there's a lot more taxes that you haven't seen yet that are to come. And often for most families, for many people, the year that they part ways with the most tax dollars is the year that they leave planet Earth and they don't even know it. Every single thing that you own is considered sold on the day that you walk off planet Earth. It's Earth is not flat, by the way. It's pretty hard to walk off of it. But.

People, if people really think that the Earth is flat, then what do they have to say about the moon or Mars or.

I'm just wondering.

I don't think that logic is going to work. That requires too much logic. JAY so, and Nelson said that becoming your own banker is an exercise in reason, imagination, logic and prophecy. That's right. So circling back to the tax bill, the day that you, you know, the year that you pass away, all of your assets are considered sold on that day. So if you own a bunch of investment real estate or you own whatever stamp and art collections and any number of these other things, you have a bunch of money in registered accounts like RSPs, et cetera. Well, all that, yeah, you might be able to roll it over to your spouse one time. All that does is pass the buck forward. Then the event is still going to happen just a couple of years later. And so what happens for a lot of families is that you're gone, but the family's left to deal with everything and they have to file that final tax bill within six months. And then they have like, they're on the floor, someone's got to pick them off on the floor from the sticker shock of what the final tax bill is. So you spend a lifetime working, you spend a lifetime putting in that time that several of that time value to be in a position where you leave. And half of what you spend a lifetime building and trying to leave behind has to go to the government, the tax man, for them to choose how to spend it versus you, determining how you want it to be spent when you go, when you have this insurance in place, it's actually going to be there when you pass away. And it's constantly rising because of its design. Tax free money shows up liquidity when you most need it, when your family needs it most, so that they have the time to take the necessary grieving process that's required. They don't have to make rash decisions. They don't need to be selling off assets at a discounted price to raise the money just to pay the tax man off. And they are in a far better financial position because you've put the steps in place today to make sure that you're tackling that event that will take place. And so just being aware of that alone, the knowledge that, hey, look, the year I leave planet Earth is the most, a big fat chunk of my money is going to be considered as income, and I'm going to have to pay the biggest tax bill I've ever had to deal with my entire life. What can I do today to make sure that that event is controlled for the benefit of my family? And if you start thinking about that, all of your actions will start to change to reflect the outcome you want to achieve.

As the late Ben Feldman would often say, the best definition of an investment is one that pays the most when it's needed the most. Sarblo, we loved having you on with us yet again and if you're open to it, we'll have you back. And for all of our listeners, if you're on the YouTubes, continue watching. We've got a playlist that's over there somewhere right next to you, so keep watching. Lots of great episodes in the playlist. And Sarblo, any parting words for the Wealth Without Bay street listeners?

I just want to thank you, Jason and Richard for inviting me again and I look forward to future episodes together. This is, this is a lot of fun. And yeah, like, keep watching, keep educating yourself and when you know what the problem is, the solution will become clear. So.

And there you have it from Sarblo Gill.

Thanks Sarblo.

Thank you.

Thanks buddy.

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