What Type Of Banker Rakes In The Most Cash?

Capital is very mobile. Money is mobile. And if you want to be the type of banker that makes the most money, then become your own banker. Which type of banker makes the most money?

Well.

This brings me back to the characters in the play when Nelson describes, and we're referring to Nelson Nash, who wrote the book titled becoming your own banker. And the type of banker that makes the most money is the bank owner. Understandably so. And so let's jam a bit on that. Let's talk a little bit about the essence of why Nelson wanted to describe it that way, where he was referencing the characters in the play. And he made this connection between if you were to take an executive vice president from a bank and have that person trade places with an executive vice president at a life insurance company, it would take about six months before anybody would even realize that those two characters traded places.

Which is interesting because Nelson has a glossary in the back of the book and there's some pretty awesome terminology in here, but it's Nelson's interpretation of that terminology to some degree. And so one of the ones I have highlighted with an exclamation point behind it, which I think is pretty comical, is gopher. And so the gopher is any administrator within a banking system. Bankers don't work at the bank. Gophers work at the bank and they are given long titles to offset their low pay scale. Real bankers are found on the golf course or in all probability running some other business. And then literally you go to the other side, like the next side over, and it has senior executive vice president. And he says the definition is a gopher at a bank or life insurance company. So, so I, I think like if someone's searching for which banker gets paid the most or whatever, it's. Yeah, it's the person who owns the bank. But the term banker is thrown around in so many different ways in our current society. There's an investment banker, there's the loans officer, or they have a different name, but they would typically think of that person as the banker. When you say the banker, you don't usually think the bank owner, but ultimately, clearly the person is going to make all the money because they own the freaking bank. Now if you're in relation to Nelson's characters in the play, when we talk about the banker, we separate the banker and the bank owner as two different characters because the bank owner isn't working on the day to day operations of the bank. They might be working on, you know. You know, yeah, on a golf course, maybe they're working on Building relationships. They're doing CEO or whatever level type activities. And then there's the banker, which is the person that, as Nelson describes the gopher, the person that works in the bank whose primary, let's say, role is in the issuance of loans and loan portfolios and then the management of those, such as you want to go and request a loan, you need to go talk to a banker. And that person is the one that's going to make you jump through all the stupid hoops to prove to them that you don't need their money so that you can get their money. Whereas if you can't prove to the quote, unquote banker that you don't need their money, they're most definitely not going to give it to you. Right. So they're the ones that makes the rules, makes the final decision on whether you get approved for the loan. So. So, I mean, it's not like that one individual does it. It's usually a team of people. There's an underwriter involved. But we're referencing, you know, the person that's there, the kind of frontline individual that you're communicating with that's going to give you the go or no go to your loan approval so that you can go about your day conducting your life, whether that's for a car loan, purchase of a new property, a new home mortgage on a house, second mortgage, business financing, what have you. That's kind of the role of that character in a play. From Nelson's vantage point, what did he.

Used to say when he spoke about the difference between Las Vegas and Wall Street?

The only difference? Yeah, the only difference between Las Vegas and Wall street was it that was at the temperature?

I don't remember. It was something. It'll come back to me. But it was really, really funny the way that he would describe it.

But he would talk about, yeah, they've got this new drug that they're promoting down on Wall Street. It's called Hopium. Yeah.

And I really liked how he would get you thinking about understanding the importance of being all four characters in the financial place, so that the four characters being the depositor, the borrower, the banker and the bank owner. And that when you become all four characters in the financial play, you're in a position of total control, but you're also making the most money. And he was absolutely right in sharing that, because for most people in their lives, so they go through life on this cycle, earn, spend, earn, spend, spend, earn, spend. And they go through a lot of very significant swings right in Terms of when times are good and when times are really stressful. And Nelson always reminded us that the process of banking goes on no matter whether times are good or times are stressful. And the one character in the financial play, the bank owner, is the one making the most money. And so respecting this cycle of earning and spending all of that money that you handle, it all originates from the banking system, and it all ends up back in the banking system. And so you've heard us talk about this before when we asked that question, how much money do you make each year and how much money do you spend? And a person might say, you know, I'm making 100,000 a year. You're not really making that, you're just handling it. And I spend 85,000 of that money per year. Yeah, but where does all the money end up? And the payments that you're making on debt that you have, that stream of payments is some one else is passive income. And where does that money end up? Right back in the banking system. And so if you're going through life in that earn, spend cycle, and you're only the depositor and you're only the borrower, and the borrower is the most important character in the financial play, nothing else happens without that character. And you understand that there's a process that you can implement in your life that puts you in a position to become all four characters. And all that you've got to do is implement a process. We're not changing your, we're not changing your financial objectives. We're not changing your earning and your spending cycle. We're just, it's all a matter of where the money is flowing to and who it's being put to work for.

And Nelson talked about this as it relates to your needs. So I think some of, I would say confusion, but maybe misinterpretation comes into play because of some of the terminology that's used and the lack of understanding of banking or a process or the process of banking or even who the banker is now, because given the description I gave earlier about what Nelson would interpret as the banker in the four characters of the play, that person often goes by multiple different names depending on the institution. And so like, even if we compare, say, Canada and the United States, although we operate on fundamentally the very same kind of systems, we do have some different vernacular from time to time. And like, investment banks are very prominent institutions in the United States, I can name an investment bank in Canada because we don't really use that terminology. We, we talk about investment firms or you know, companies that handle the management and the creation and then the sale of securities. That's really what an investment bank is, the United States. But they're considered or they're called a bank. But from a day to day operational perspective, people think of the bank as the brick and mortar place where they go and go to the green machine of the machine and they take their money out and they put the money in, they go see a teller. Like that's our visual mental kind of conception. And so the fact that there's these investment banking institutions which are not commercial deposit taking and lending institutions, so those are two fundamentally different things. But because they're banks that we tend to like smash these ideas together in our head and it can create a little confusion because they're actually separate. But because the bank word is intertwined, it creates this a little bit of uncertainty about what it is that we're actually talking about. And Nelson says on page 11 of the book, he said, perhaps the answer lies in the fact that most folks know next to nothing about the process of banking and its importance to their lives and their well being. Banking is the most important business in the world. Without it all business comes to a screeching halt whenever a business transaction takes place. This is the process of banking. Money must flow from one party to another in a relatively short period of time. That flow of money must come from a supply source, a reservoir or a warehouse. So we talk about like again, banking, you know, a blood bank. Well, it's a storage facility for blood. It's a type of bank, all right? That is the essence of what banking business is all about. Someone or some organization has control over a pool of money that can and must flow at a cost because they don't do it for free to meet some need. That's right. There's only one pool of money in the world. The fact that this pool is managed by any number of institutions such as banks, insurance companies, corporations and individuals in various countries and with various, various currency denominations is incidental. So that's where Nelson's talking about this pool of money. It's, it's one pool of money and it's moving transactionally throughout the world through ones and zeros and numbers and transactions and online and one to one currency transactions. And it's flowing at some measure of speed through this whole ecosystem, which is broad and expansive across the entire globe. You could look at it from a local economy, a national economy, a provincial economy, a state economy, and you could spread it out in its different iterations but it's all this transactional stuff, that happening, that flow of money, that transactional aspect of it that is the process of banking. It's money moving from a place to another place in a reasonably short period of time.

Yeah, it's, it reminds me too of when Nelson would share with folks. He would say, you know, did you realize that you, you can live without a heart? And he talked about his, his surgery when he had his heart replumbed in four different places. And he said, you know, my heart was outside of my chest cavity for several hours while this operation was being done. And it was a heart and lung machine that kept him alive during that surgical procedure. And he said, you know, I don't have any recollection of it. I knew I was alive, but I wasn't really living. I was just existing. And the heart.

The function of the.

Heart is to pump blood, circulate it throughout the body. And so he said, when you think about banking, most people abdicate the responsibility of that banking function in their lives and more importantly, abdicate the opportunity that controlling it represents. Most people are doing the equivalent of living off of a heart and lung.

Machine, which isn't really living, it's just existing, existing.

And so he really helped people understand that someone must perform the function of banking as it relates to your needs. And so don't live off a heart and lung machine. Take control of this function as it relates to your needs. And the function of educating someone about the process of becoming your own banker is the equivalent of replumbing the heart in four different places and helping someone to understand that someone has to perform the function. There are four characters in the financial play. The depositor, the borrower, the banker, the bank owner. Presently you're only two of the four characters in the financial play. You can become all four. You have to rethink your thinking and most important, develop the ability to rethink your thinking. And the truth is that most people would rather die than think. And the institutions, conventional banks, they're necessary. Money's gotta flow. Richard just did a great job narrating what Nelson meant when he would talk about flow.

They provide a valuable service and they've built an infrastructure that allows us to create expediated transaction flow. I mean, hey, I might be dissatisfied to many degrees about certain aspects of the conventional banking system. Happy to indicate I, I'm not, you know, an avid proponent of what they've built. However, I am an avid proponent of the convenience factors that's been created in my day to day life because I like a measure of convenience. I think most people do. We this ability to transact at speed with online banking tools and stuff. I mean someone, an institution had to invest money and capital into the creation of those things, the ongoing management of those things to maintain the system so that we can functionally utilize it and create the speed of transactions that exist today. If we went back 50 years, think about what it was like if you're not 50 years old or by the way, I'm not, but I can recall in my youth and then the stories that I heard about the way things used to be done and the advent of technology that's available to us. So that just didn't happen overnight. It required an investment of capital. And so that's been dealt with. But also the banking institutions as we use them conventionally are reaping the rewards of that investment of capital through transaction fees and ongoing other fees and account fees and management fees. And you got to keep this much money in your account or we don't charge you fees.

Could you just imagine what the state of the world would be if conventional banks provided the very same elements of protection and control over the use and the motion of money that a life insurance company provides to its participating policyholders? If you could just envision that for a moment. Picture that. You see the, you see all the marketing and the correspondence and the communication coming from a conventional bank saying, look, warehouse your money here.

We're a safe, trustworthy institution for you.

We're going to give you contractually guaranteed daily growth that can't go backward. We're going to permit you to borrow against the collateral that we guarantee on demand, on your terms.

We're going to let you do it with no questions asked and we'll get it to your, the account that you have with us at a reasonable speed that you can be able to implement that in your life like lickety split.

And not if, but when you die, your surviving heirs, family won't be left with any burden of debt and they.

Won'T even really have to talk to anyone in our company because we're just going to cut them a check and send it right to the address on file.

And you'll, you'll pay no tax on the build up and you'll participate in the divisible surplus generated by the bank year in and year out.

Oh, and by the way, we've been doing that profitably for, you know, the last 100 years or so. So we've got it down to a fine science about how well we manage this giant pool of money that everyone gets a chance to participate in, that's an owner in our company.

And so if you think about it that way and then realize that the distinguishing factor between the life insurance company and that conventional bank that we're using in this hypothetical scenario, the differentiating factor is that life insurance company cannot inflate. A life insurance company cannot inflate their money pool, whereas the conventional bank can and certainly does. And so, recognizing the fundamental truth that your money must reside somewhere, what better place to have it reside than here? As Nelson would ask, and if you refer to the beginning of his book when he talked about if we were to take all of the, all of the money on the planet, regardless of currency, and we were to distribute that evenly to every human being on the.

Planet.

It'S been said that within approximately 10 years, 97% of that wealth would be controlled by 3% of the population. That is because the 3% know something that you don't. And the fact is, money's attracted to where it's well respected. It's the truth. And so you can, you can be the type of banker that makes the most money. To answer your question, you've just got to take control of the function as it relates to your needs.

I think it's funny you use that analogy of, you know, money being attracted to where it's respected, but it's kind of like I envision someone going camping and they've got, you know, the, the off and all the deet and everything, and they're spraying themselves to keep the mosquitoes away. And I'm like, well, that's kind of like, I could see like the, the image of like, the tax man on, like, one of those newspaper cartoons.

Yeah.

Where, where they're like spraying themselves to keep all the investment capital out of the country or out of, out of a geographic area because they're just spraying it is like, oh, no, we're going to increase tax. We got to spray it. We're going to keep all that good investment money out of here because we don't want all that amazing prosperity that it brings with it.

Capital is very mobile. Money is mobile. And if you want to be the type of banker that makes the most money, then become your own banker. And we'll put some stuff in the show, notes and stuff about how you can set about continuing your journey of learning about this process and recognizing all of the advantages that it represents. To take control of this function in your life, somebody must perform. Can be you. It should be you. You Just have to recognize the problem and then the solution becomes very clear and you'll know exactly what to do.

And I think it's worth reiterating what Nelson says in the book is that it's all a matter of how much of this banking function, the need for capital and capital utilization for all the major things in your life, the purchasing power of the things you're going to buy or invest in, how much of it as it relates to your needs, your needs, your purchasing, your buying power, your financial decisions, that of your spouse, your family, your direct descendants, the people that you love and care about. How much of it do you control as it relates to you, what you're doing? Not when everyone else is doing not like, oh man, I can become my own banker and I can have this brick and mortar situation and I'm going to be lending money to 4 million other people and I'm going to be getting all these payments back. Like, no, no. Okay, just. Sure, maybe you'll get there. That's great. How about you just start with you. Let's just start with you and start with your very first next big purchase and just do that. And if we knock that one out of the park, you know, we're playing baseball and we got on base, great, let's just keep getting on base. We don't need to be hitting home runs here. The more and more that you get on base, the more runs you're going to get. And it's kind of like that movie Moneyball. And that's really all it is. So you're just trying to do that with your financial life using the most efficient tools that are available because you still need tools to go and accomplish the job. Well, the highly efficient tool that we, that Nelson found made the right sense. He said it never, it was misclassified. It never should have been called life insurance. It should have been called life insurance. It should have been called a personal monetary system with a death benefit thrown on the side for good measure, which is really long obnoxious name. We'd need some kind of a fun acronym for him. But that's. If you call things by their major characteristics, then you identify them for what they are, which was really what he was getting home with. And also you have all the advantages of having family protection, which. One of those advantages, by the way, I'm just speaking as a, as a husband and a father, is that there's a high degree of peace of mind that comes with knowing that heaven forbid, something will happen to me eventually. There's a boatload of money that's going to show up that the Canadian government can't get their hands on and it's going to go to the people I love and care about most. And that protects and preserves all of my tomorrows. So I can secure all of my tomorrows today just by the stroke of a pen and an underwriter saying that it's good to go and paying a simple premium. And all of my future tomorrows are secured for my family. How powerful is that? Oh, and in the process of doing that, I get to use all these other advantages and access capital and put capital to work the same way I'm doing everywhere and they don't inflate the money supply and I get co ownership and I'm going to earn some dividends and like it's just like on and it's like, just like check marks all the way along. It's so easy and I didn't need an illustration to go and figure all that out. Could you imagine?

Jay, secure all your future tomorrows today. I love that. This was fun as always. And for all of our viewers on the YouTubes, watch the video that we've just recommended. It came up in the playlist. Watch that next video. There's a reason we recommended it and we want you to continue your journey of learning. If you're just joining us on this channel, take action. Watch that free masterclass that we put together. Get a copy of our Nelson Nash's book. It'll open your eyes to a whole new financial world. And that book is titled becoming your own banker. Make the rest of your week outstanding.