When to Start Your 2nd Infinite Banking Policy (Most People Get This Wrong!)

Foreign. We're excited. We're going to do some IBC Real Talk today. We've got some great questions that came in recently. I'm going to show a couple of items from some of our great subscribers and our listeners. So thanks again. Keep the great questions up. We love being able to tackle some of these and some of them will type a response in, but for others, we'll definitely record an awesome video like this. So the first one comes from Glenn Yanny. So now this is when would you open a new policy? So, great question. We have talked about this a number of times on our podcast and really, I always defer to what Nelson Nash indicated because I actually asked Nelson Nash this question on several occasions and his answer was always consistent and it was always the same. And so I'll do my best, Nelson. But he would say, well, Richard, as soon as my feeble brain can envision doing so. So what Nelson meant by that is it's time to open another policy when you're starting to see and recognize how you might be able to do it. So two things start to happen. So, number one, you start to see throughout your life, cash flow. If your brain is attuned to the idea that you want to grow capitalization, you want to grow the size of your family banking system, then probability is your brain's looking for a way or a solution on how to find more premium dollars to go and create another policy. That's generally what happens. It's something that kind of takes place naturally for a lot of people. And so because of that, we have a lot of our clients that will reach back out to us. And within the first two years or three years, they're often reaching out to their coach and saying, hey, I'm looking to expand my system. Can we get together for a strategy session and discuss it? And they'll already have an idea as to how they might be able to do that. So you know what I realize every year I get a little bit of a tax refund. I realize that, you know, we get a bunch of money from for the kids for birthdays and Christmas, or we're putting money into a kid's education fund, and we haven't really allocated that to help grow our system. Can we readjust how we're running that money and see if we can't find a way to create another policy? So we get these fun discussions that come up because people are actively focusing on how do I grow and increase my capitalization? It's a natural thing that happens when you have some really good success with your financial life because you're building up a reservoir of capital, and you can see it, you can log in, you can look at it on a regular basis. It gives you peace of mind. It gives you confidence. The more that starts to happen in your life, the more your brain's like, oh, my God, this is really cool. How do I get more of that in my life? Like, how do I increase this. This happiness, this feeling, this, like, peace of mind that I have, knowing that we're going down this path. That's just the circumstance that I've heard from people as they talk to me. I know I personally feel that. But our clients, when they share with us what's going on for them, we hear things like this very consistently. So when your brain's like, yeah, I really am enjoying this process. I like how I can log in. I can see my values, I can see them growing regularly. I like how I can take a loan and I have control and I can pay it back when I want, and I have all this autonomy that just lends people to want to think about how to grow. So the reality is, as your brain starts to come up with ways to grow, you book a meeting with your coach and you talk through what you're thinking about. Have a good discussion. I have a wonderful gal that I'm working with for the last couple of years, and I've probably had three or four meetings just this year alone on her thoughts and ideas on expansion. And I've said, you know what? Love the idea. You're on the right track. This is a great idea. It's a little too early. We're jumping the gun a little bit. Let's give it some more time. I want you to get a little bit more practice. Let's reevaluate. So we've had a number of those discussions, and now here we are, roughly about a year later, since we've been talking about growing and expanding the system. And now it's at a point where she's got a great idea. She's indicated how she's going to use the money, where the money's coming from, how we're going to be able to create that expansion. So it's not going to impede or interrupt her cash flow. And it makes sense because she's had a lot of practice. She's spent a lot of time thinking about it, and now, yeah, we're going to be able to expand that system. That's when it makes sense to go get another policy, another type of area where it comes up is relative to your family dynamic. So family changes happen. Maybe you have a grandchild that was born, or you have a new baby yourself, or you entered a new business. And because of that business, it's a partnership and you're like, you know what, there's risk in that partnership. I want to make sure that I have an insurance policy on my partner that'll be part of our buy sell arrangement. If I'm going to do that anyway, I might as well make it a policy that I have an asset that I can build. So I have my new business, I have the partnership, and I'm building an asset like that would be a logical reason to look at expanding. So the main expansion reasons are, number one, you've, you've realized there's a more cash flow or financial energy that you can work with. That usually comes with practice. Okay. And the second reason is that there's an actual need for a new contract, a new person that's insurables entered your life, like new baby, new grandchildren, maybe one of your kids got married or is engaged. And you want to get a policy on that spouse. And so that might be a reason. So there's a lot logical reasons to expand the insurance and then there's logical reasons to expand the system. And sometimes those things kind of overlap is essentially how that works. So super good question. The next question comes from Aurora Taylor, and it's can you show us how IBC is a part of our lives and not just a theoretical idea? That's a pretty cool question. Please provide examples of how we can implement it in our daily routine. Okay, so really good question. I'm going to do my best on this and I'm just going to, I'm just going to pick myself as the guinea pig here for this example. And I'll talk through a couple of specific use cases that I've had in the last couple of years and I'm going to show the amortizations that I've set up for those policy repayments. As far as like implementing it in your daily routine, that is really an education question. So are you actively engaged in regular education? Are you subscribed to podcasts like ours? Are you subscribed to this YouTube channel? So you see the shorts and see like the, the content so that you're filling your brain and your mind with thinking about how to implement this. So step one is, are you regularly engaging in a thinking environment? You know, do you have Nelson's book somewhere on a bookshelf where you know that it is. Or is it sitting on a coffee table? Is it out and available? Is it in your office? How frequently do you grab this book? That's part of daily implementation and routine. It's not just the moving of money around, it's also the, it's, it, it ties to the mindset. The more that you focus on how you're thinking, because Nelson says all about how we think, the more you're going to see day to day implementation. Okay. Now there's things happening in my life that are happening all the time, every day, but it doesn't mean that I'm, I'm moving money and doing policy loans every day. Okay, so policy loan activity is not something that you would do daily. I personally only take policy loans a couple of times a year, maybe, I don't know, maybe four times, maybe five times a year. Personally I have some people and some clients where they might do that once a month, but they're doing it for a specific reason. So the act of taking a loan is one component of practicing this process. Loan repayments, however, is a big component. And so how are you repaying? What's your repayment schedule? Now for a lot of our clients, what they'll do is they'll set up repayments on an automated schedule. When you log into your online banking, you choose the policy which you're going to repay back. You say, okay, I'm going to put 50 bucks a month back or 50 bucks every two weeks. You send a corresponding email to the Life company. Hey, this is what's happening. Please make sure it gets applied correctly. So there's, we have a whole system that we teach people how to do that. We have videos on that in our membership site that people can look at 24 7. If you're an ascendant financial client, you're welcome to go do that. Okay, so that's more of the practice and opportunity. So what I'm going to talk about here and show is I'm going to show a couple of examples where I have used policy loans and sometimes from more than one policy to accomplish some financial things. I'm going to look at some like annual or basic day to day things like smaller purchases and then I'm going to look at some larger purchases that I've combined. So let's, let's go ahead and do that. Let me bring up my screen and we'll walk through. And this first one we're going to do, actually I think I'm going to start on a smaller end. I've got a Couple of screens going on here, but let's look at the smaller one first. Ah, here's a really good example. All right, so this first one that we're going to go through is for the purchase of a cell phone. So we're talking about not a monstrous purchase here, but it is a purchase nevertheless. And it's a common purchase that people make sometimes every year, sometimes every, you know, once every two years, every three years. And I'm going to make this a little bit bigger on the screen here. Hopefully you can see that. Okay. All right, so here's the example. So this was for my wife. She wanted a new phone. We actually, I think we needed to replace it for some reason. Hers was a little bit outdated and rather, in fact, I got this idea from one of my teammates. I hadn't even considered it. And then shout out to Taron on my team, amazing guy, he had this, this idea, well, why aren't we using it for things like cell phones? Because fundamentally you're financing a cell phone. Most cell phone plan providers, they want to get you on the monthly contract and in that contract it's like, hey, free. It's a free upgrade for your phone, but it's not a free upgrade for the phone. They're, they're, they're locking you in essentially to the equivalent of a finance charge to keep you in a contract for a long time frame. The other thing that they also typically do in these cell phone scenarios, and it varies based on country and whatever, all the cell phone providers, they can do whatever they want as far as how they market their products. But you know, nowadays these phones, you know, I don't know about anyone else, but go ahead, type in the comments below. Who, who's ever cracked a phone screen? Okay. Boy, oh boy, have I ever cracked a phone screen. They're, they're way better now than they used to be. But one of the old iPhones I had I think was like an iPhone4 or something like that. I must have cracked like four screens in one year. So I was spending like 150 bucks to replace a screen all the time. So, you know, they always want to offer you the upsell protection if there's a problem for your phone and there's a valid reason to do that. I'm not suggesting that someone doesn't do that, but recognize now they're trying to charge you for an insurance, an insurance fee basically for the risk of replacement for damage. But in a lot of the situations, not all, but in a lot of them, if you do Damage the phone. You sometimes have to send the phone away. Like it creates a whole disruption in your life. I know a lot of people that can be very frustrating and not a great experience. And so for me, I'm like, you know what, if that happens to me, I might just buy another phone instead of paying for the damage. And if, and if there's an issue, I might just go down the road to a cell phone repair company because there's usually one in every city and I can just get a screen or get something replaced. They can usually fix it there, not always, but usually. And it might cost me more, but it's done. And it's done typically within 24 hours, sometimes two to three hours. So rather than paying for the insurance to fix or replace my phone or a damaged phone, I'm just going to add that cost into my, my own repayment. So I'm going to, I'm going to self insure, self insure for the damage replacement of the phone. So when it was all said and done, I believe this phone, after the sales tax in the province that we purchased it in, it was $1356. So I just said, you know what, I'm going to round it up. I got a rough idea what the quote to cover the replacement damage was and I just made it a higher number. I don't remember the number offhand. I didn't write that down. I said, you know what, it's, I'm for sure it's going to be about 250 bucks. So let's just add that number in and I'll make my repayment schedule based on the phone price plus the, the cost of the total amount that it would cost to insure the phone over that timeframe that I'd have to make payments on. So it worked out to about 16. I'm self insuring. Okay, well, the, the loan, the contract with the cell phone company was going to be two years. So I just did the same thing. And for me, what I cared about is I cared about having a simple easy number. So I wanted 75 to $76. That was the number I was looking for. So I adjusted the interest rate. I just kept playing with the interest rate number until I got the payment I was looking for. So we made a payment. I believe this, this loan is expired and done. Now we made a payment of $76 a month for two years for the cell phone. Now my wife did actually need to replace a screen on that phone. I think that happened maybe, maybe about three months ago, roughly. So she'd had the phone for a while, like, you know, not quite two years, but it had been like 18 months, I think, somewhere in that range. And we finally had to replace that. And. And the screen was expensive. I think it was 300. It might have been $300 to replace it. So. So, but we. We took care of that cost, and I had basically been paying for the. For that cost anyway, plus interest. So that's kind of how this worked. This was a small, kind of a daily example. The cell phone. Everyone needs a cell phone. So that. That's one. Let's grab another version. Here's another example. I've got a couple of these. We're going to go over. Let's see. Okay, so cell phone. Let's close that one. What have I got next on this? That's. This one's got a bunch in it. So I'm gonna. I'm gonna use that one after. That one's a large one. I'll do that one after. Here we go. Here's a good one. This is a loan where I was doing some consolidating. In fact, I have two of these, actually. No, here, we'll do this one first. So here I got some artificial turf in our. In our property. And the artificial turf boy totally changed our life. We have some podcast episode where I've talked about this. It was. It's. It's been a huge advantage to us. We have a lot of rain here. Our dog had destroyed the yard. It was bringing mud in the house. And it was just. It was a really. It was an investment in our quality of life. Okay. I didn't like the price tag, but I'm really happy with the end result. I. I can't believe how much it really actually changed our. How we run and operate our life on a daily basis. So the total cost was about 10,800 bucks. I took policy loans. I took policy loans from three different policies. So when I make an amortization here, what I do, I don't get into all the weeds and all the details. But if I'm taking a loan from multiple policies, I might make a note on it. So I make some commentary. That way, if I want to go back and look at it like someone asked a great question on one of our YouTube videos or a podcast, I can reference what I'm talking about. Or if my wife has a question because she sees, you know, why are we making this payment to a policy? I'm like, well, okay, that. That ties to this particular loan that we did so there's a way to enhance that communication. So if you keep some basic records, we don't need to go to the nth degree here. I'm pretty basic with this. But if you keep some basic records, it makes it easier to go back if you get questions or you just want to remember something that happened a couple of years ago. So we got this artificial turf. The repayment timeframe was going to be a one year loan. I wanted a payment. I picked the payment number again. $960 a month made sense to me for that. I wanted it done in one year. The interest rate worked out to 12.51%. A lot of our teammates, a lot of our clients, they'll just make their loan repayments back at 10%. Some people are just keep a standard rate and that's what we do. That's perfectly fine if that's what you want. Me, I tend to focus more on the cash flow amount that I want to, I want to, I'm prepared to work with. Okay, so I took three policy loans. I didn't even take policy loans for the entire amount. I just topped up the rest of that. I needed to pay the contractor out of cash. And I just took three loans from, from three different policies to total up $10,450. And then I proceeded to make payments back on this. Now I ended up having a variety of other loans going on. And after a couple of months, I said, you know what, this is silly, Richard. I'm going to consolidate all this. So when you're the banker, when you, you get to play all characters in the financial play. You get to be the depositor, you're paying premiums into your system. You get to be the borrower. You're the one borrowing to pay for all your stuff. That's the case. You get to be the bank, the banker. The banker is the one who makes the rules. It's the person who creates the amortization. What's the payment? What's the time frame? What's the interest rate? How are you going to be accountable to yourself and to your family and your financial future, your family's future? By being accountable. This is all about how we think. How are you going to not steal the P's according to Nelson? And so because I'm the banker, I get to do whatever I want. I can consolidate loans. So I actually did that. I had several different loans going on the artificial turf. I had paid down. I'd made several payments. In fact, I'm going to look at the other example 82. I'd made three or four payments, I think, on that loan. I'm like, you know what? I still owe that money back. I made a commitment to repay that amount. So I looked at the balance remaining on the loan that I created, and I'm carrying that over, and I added it into a new loan arrangement. I had a loan that I was making of. I was backfilling some stuff from years ago where I hadn't been repaying loans because I wasn't making enough revenue. And I had a lot of crazy expenses that kept coming up that made it very difficult to repay loans for a couple of years, actually. So I, I, I added that in here. I had a, a home gym that we bought. We had a peloton. We had a trip to Vegas where we did a family banking meeting. Like, there was a whole bunch of stuff that had a loan balance remaining. Like just a whole bunch of things. So I combine all of this together, and I just consolidated. It was really three major loans, and two of them were already consult. It was like a consolidation of a consolidation. I'm the banker. I can do what I want. I was like, you know, I'm going to simplify all this. Let's wrap it all up. One big amount. I'll do it over five years. It worked out to an 11% interest rate, 1500 dollars a month payment. Bam. That's what I did. So that's a way that you can control this. So these are, these are a whole bunch of things. I had the artificial turf. I had a home gym that we bought. It was a vehicle, not a vehicle expenses. The vehicle expenses were like, new tires, brakes, you know, a couple other, like, maintenance items. It was like $4,500, you know, Peloton. Like, there was just a ton of things. And these are just life expenses, right? Everyone has vehicle expenses. Everyone has home insurance and things. You have to do this one here, I'll talk about this backfilling loan. This is kind of an interesting one, which I'll, I'll share, because sometimes we get questions about this and hey, what happens if you can't make repayments? Well, there were several times in my life where it was actually very difficult for me to make loan repayments. And I. Either I wasn't making enough money or we had major expenses that happened. Like, I've told some of these stories. I've got some great webinars where I've shared some of my personal stories. We had some. We had some complications with a pregnancy that my wife had where thankfully, amazingly, everything worked out. In fact, my beautiful and amazing daughter just had her eighth birthday as the time I'm recording this video. Shout out to you, Nora, I love you. Amazing. So, you know, these were circumstances that created some hard times for us. You know, rent, renovation requirements on properties, tenant moves out, move outs, furnace replacements, hot water tank replacements. What else? I had to build a home salon for my wife at one time. I had to redo a roof on a shop at my acreage. I had to buy a snowblower because one crapped out on me. New lawn tractor. I'm just like, man, the list goes on and on and on. Like there's no end of major expenses that fill your life. Go ahead, type a couple in the chat box down below. Like, type a comment like, what are some of the crazy expenses that show up that you just don't anticipate that happen every year? So there was a period where just due to some lean times, I was not being a very good steward of making loan repayments. And it'd probably been two years almost since I'd really made any proper loan repayments and shooting forward a couple of years later. So, so I started making repayments on some things, but I didn't even track, I wasn't even tracking how much I owed. And I said, you know what, I'm sure of all the stuff that happened during that time frame, I, I borrowed at least 4,000, 4, 43,000 dollars worth of loans to get myself through those wean periods. I didn't know the exact number and because I didn't know, I said, but I'm going to make a commitment because that's what Nelson taught me to do. And now it's time to start repaying and being an honest banker again. I need to get the habit working properly. So I picked a number that I thought was a good reasonable number so that I could be honest and I started a repayment schedule of $2,000 a month and I set that up for a two year period. Well, while that was happening and I was, you know, cruising along and I got down to whatever the number was, it was like $25,000 or something. I, I, I was making this other one. We'll bring this one back on the screen. This. Oh no, that's the turf one. Where's the other one here? That's turf. Sorry, I got a lot of amortizations up on the screen. There we go. This one, I ended up having this big consolidation that I created that was about $69,000. So out of that, one of the areas that I was consolidating was what was remaining on that backfilling of old loans where I hadn't been making proper payments. So, yeah, this is the type of control that you can have over your life when you operate this way financially. So I hope that's helpful. Again, we're looking at how, how are, what are day to day uses. You know, we've talked about how do you grow your system? When do you know it's the right time? I gave you several examples for that. I have personally grown my, my system multiple times. I have 13 policies. I plan to get more. When will I get the next one? I don't know. I don't really like doing applications, to be honest. Thankfully, I have a great team of people to do that. But I would anticipate probably in the next 24 months. I'll, I'll be getting another one. We'll have to see how is business go? How, how, how is our marketing working for people joining us on our podcast? You know, is that, is that creating revenue and is that revenue going to help support, you know, Richard and his family being able to continually grow their asset base and grow their system? There's other considerations that are always in there. So there's a lot of moving parts in your life all the time. I'm no different than, than you are and how you've got things changing in your life financially, but you're going to have regular expenses every month, every year. Things are going to come up that you don't expect. You're going to probably use Visa, you're going to probably use MasterCard, you're going to use your own cash or you might even sell investments to cover some of these things that come up for the same reasons that you would have to do that to go and take care of that item. I'm going to go use policy lens and I would encourage, if you're thinking about this practice or thinking about implementing this concept that Nelson described to us, I'm talking about the process here of becoming your own banker. All right, shout out to Nelson. We miss him dearly. Absolutely love that man. He was an incredible human being. We miss him dearly. This is a process that liberates you financially. If you want to grow and increase your net worth and your wealth, you can also do investing. I've borrowed from policies and invested in things mostly in business structures. I've invested in things like our books. I've invested in certain marketing efforts that are going to help grow revenue for our business because I have more control over that than I might have if, if I'm investing in, let's say, the stock market or something. Not that there's anything wrong with that. We have clients that do very successful things there. But my focus is controlling as much of the financial energy as possible. And that's what our hope and our wish is for you. So if you enjoyed this, give it a like. Subscribe to the channel. Leave a comment below. We'll see you next Friday.