Speaker 0 00:00:00 You were listening to The Wealth Without Bay Street Podcast, a Canadian Guide to Building Dependable Wealth. Join your host, 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.
Speaker 1 00:00:17 In this episode of Wealth Without Bay Street, Jason and I had a lot of fun talking about a particular subject that is onerous taxation. And of course we spent some time talking about the inflation problem too. Make sure you check out the entire session and if you're able, swing on over to the YouTube channel, wealth Without Bay street.com/youtube and watch the session that we did there where we did a little bit of a screen share, walking over an example of a policy where you could reallocate your CPP contributions into a system that you own and control.
Speaker 2 00:00:51 I like that. I like
Speaker 1 00:00:52 That new share. What does that say? Entrepreneur? What
Speaker 2 00:00:56 This was, that was just honestly a really nice gift from Moses, our teammate. And so shout out, shout out to Moses. Thank you Moses. Sincerely for this gift. I was recording some stackable content and the gentleman that I was talking to right before this, he made the same comment. He goes, wow. He's like, I really like that shirt. I said, yeah, it's a really nice gift from, from a teammate. And we'll have more of these things cuz we gotta do these with the wealth without Bay streets too, cuz we've got Love it. Yeah, we got the Wealth without Bay Street logo golf shirts, which are super nice. But I think some of the, you know, t-shirt style stuff, cuz people like that, especially the cash value is king. Yeah, yeah. Like we sell a lot of those shirts and we're doing a bit of a promo on shirts right now, so if, Hey <laugh>, if you like us, sure. Just let us know. But yeah, for all the, I guess this week it might be how many people, we maybe have two people on planet earth watching right now. So good. Our audience is good. I like that. But, uh, what do you wanna talk about today? Yo, you know what I wanna talk about
Speaker 1 00:01:59 Other, other than awesome shirts and they, they're all minded people and how entrepreneurs shape the world that we live in ultimately by taking all the risks.
Speaker 2 00:02:09 Yeah. Let's, let's talk about why taxes suck. Oh yes. Do you want, sounds like something an
Speaker 1 00:02:17 Entrepreneur would say, Jason.
Speaker 2 00:02:18 Well, so here's the deal. We know that hearing Canada, right, right now, if we look ahead to 2023, we're going to be facing some major tax hikes yet again. And every person that we talk to who brings that up and who has, you know, uh, been taking their blood pressure pills so they, you know, can maintain stable blood pressure when talking about it, people are telling us that they're, they're just sick and tired of it. Like it's, it's just coming up in conversation because when you, when you implement the process right, becoming your own banker, the infinite banking concept, the process of becoming your own banker has nothing to do with addressing the tax situation that impacts you in your life or in your company. But the tool that's used to implement it just happens to be shielded from taxation. And so the question is, it's all about really how, if you have the ability to really think about your thinking, if you're upset with external circumstance like these, you know, carbon tax hikes and for employers, you know, the, the payroll tax hikes and the, all of these increases in taxes that are coming.
Speaker 2 00:03:41 If you have the ability to really think about your thinking, first of all, you recognize that as a problem. And is there a solution to that, that problem? Well, the solution is not to, you know, evade, you know, taxation in the sense of doing anything that is unjust or illegal or offside Sure. Or something. Yeah. And like, but if you can shield, if you can shield hard earned income, hard earned business revenue, hard earned capital surplus, if you can shield that from taxation today and taxation in the future, then in rethinking your thinking logically you might ask the question, how much of that hard earned income, revenue surplus, et cetera, how much of that do I want shielded <laugh>, right? Cause if, if we can't control what politicians, you know, uh, do, which doesn't appear to be a whole lot except spend more what, and you, you
Speaker 1 00:04:44 Mean that just by exercising your vote, you don't have any exercise over the control of what they do once they're
Speaker 2 00:04:50 In power? Huh. Interesting. Well, you know what's interesting is that you can vote, you can absolutely vote and, and you should, but you can scream into the year of someone is who's deaf as loud as you want. And it won't change a damn thing. And so how much of your hard earned income, revenue surplus, et cetera, do you want to shield from taxation today and taxation in the future? Because you can continue to frustrate yourself and, and get worked up. Like sometimes I do, I get like, really, really ticked off at, at this sort of thing. Or you can rethink your thinking and then start to take steps to do that. And we, uh, we have existing clients who have expanded their programs over the years and who continually say it just keeps getting more peaceful. It just keeps getting more stress free. It just keeps getting better and bigger. And there isn't any government bureaucrat or government body that is telling me, you don't put so much in there. You need to send us more and we're, we're gonna control how and what you do with this. Like just stay out of, just stay outta my way. Like, I just wanna be able to, to do things that create value for other people and
Speaker 1 00:06:24 Well, I'm, I'm curious, you know, just thinking just, you know, I don't know if you've thought about our estimate, I'm sure, I'm sure maybe you've thought about it, but maybe not at a, in a, like a, at a spreadsheet version is, you know, just thinking about at ascendent with all the team members we have, we have a, a lot of amazing teammates that are T4 teammates. Yep. And so from a business standpoint, the payroll taxes like this, you know, the CPP contributions, et cetera, are, are gonna rise as of January one. And so if you just just estimated it looking at, as the organization sit today with the amount of T4 team members we have, what, what is that going to cost? Basically it's inflationary cost essentially is one way of looking at it. What is that gonna cost the, the company and how much, so how much is that gonna add up to which is gonna mean that's somebody that's some other business that we can't hire that's less money that we can give to a charitable cause that's less money that we could use to go hire another staff member. Mm-hmm. <affirmative>. Right. And I would say looking across the board at the size of our organization easily, that's gonna be the, the, it's probably gonna be the equivalent of either a part-time or a full-time person that we could have hired to added the organization. Oh
Speaker 2 00:07:38 Yeah. Quite easily.
Speaker 1 00:07:40 It's gonna disappear additionally to payroll taxes, to support CPP contributions. And we just did a podcast episode, Henry and I on that item, you know, going over some line items for the Canada pension <laugh>. But, but it's funny because I was on a chat with, uh, several of our teammates, some of the advisors yesterday. It was yesterday. It must have been yesterday. We had a, we had a blast. It was all five of us were, there was, you know, Dan Tran Verne and Engine and myself. And we had a, we had a really fun conversation for like 90 minutes and we just like you, so that's gonna be a, a cool, you know, like some YouTube video that comes out probably in about two or so weeks. Cool. But Verne was talking a little bit about, you know, just the cost of like his home and auto insurance premiums like added up and, you know, if, you know, having that money working back and like, what, what's the opportunity cost on that money we kinda talked about?
Speaker 1 00:08:29 So interesting enough, like I put together a little example on that just to, to show like on the fly during our conversation. But the number is kind of similar to the CPP contributions that we make. So especially with the increase in the payroll actually under that. Cuz the way that it's working is there's an in prescribed increase rate as your, as your income goes up, what their, what, what the threshold is. And then also there's, there's actual increases as well. So it's like a combined increase. So over the years, the contribution level has just been rising and rising and rising and rising and rising, you know, pretty substantially. And so I had, I had an example up that's like $5,040 a year going into a policy and I, you know, if you wanted to, we can just throw it up and take a look at it and just talk through like the opportunity cost of that money that's going to feed CPP versus what if that money was feeding your own family system.
Speaker 2 00:09:18 Yeah. Man, dude up. Like, let's show the world. Well, let's show all four people that are watching us right now, <laugh>, but this what this looks like. But the good thing is is, I mean, you know, this, this gets out on the YouTubes and the, the social is, and uh, you know, we get a ton of views on it, which is great.
Speaker 1 00:09:39 How, how's that? Let me go even bigger here.
Speaker 2 00:09:41 Yeah, let's go even No, even go even bigger. Let's
Speaker 1 00:09:43 Go bigger.
Speaker 2 00:09:44 Yeah, it looks, it
Speaker 1 00:09:45 Looks pretty crazy on the size of screen that I'm looking at. Like
Speaker 2 00:09:48 That's Yeah, keep going, keep going. Make it a little bigger.
Speaker 1 00:09:51 All right, here
Speaker 2 00:09:52 We go.
Speaker 1 00:09:53 Holy. Okay, we're messing
Speaker 2 00:09:55 Up. What am I, what am I looking at here?
Speaker 1 00:09:57 So, just very random, I just picked a, a 40 year old and there's no bells and whistles, there's no riders or anything on here other than just base premium and flexible premium going into a policy. The total premium was, was $5,040 a year on a 40 year old non-smoking mail. Yep. And that turned out to spit out a death benefit amount, a starting death benefit of 87,698.
Speaker 2 00:10:19 Okay.
Speaker 1 00:10:20 Well, after the first year of funding the policy, uh, we, you know, we get a little bit dividend, some flexible paid ions, premium goes in, we've increased the death benefit by, you know, uh, almost $11,000. And of course see a good progression there. Go ahead.
Speaker 2 00:10:36 You know what's interesting, rich? Mm-hmm. <affirmative>, isn't it cool that you see an increasing death benefit each year that you get closer to actually dying
Speaker 1 00:10:44 <laugh>. Amazing. Wow. Wow. Yeah. Funny how that works. I mean, it seems like it's like somebody thought that through like that would be when you need the money the most is when you're actually gonna die. Funny.
Speaker 2 00:10:55 Yeah. And what's I, I'd like this too because it, so the, the total premium amount, as you mentioned it, it's attributed to like, there's some logic to that in terms of how you supported this example. But much like every other policy that's designed, the cash value rises each day. The, the death benefit increases each year. The premiums maintain at this very same level. They can go down, but they can't go up like all the attributes are the same in this example. Right?
Speaker 1 00:11:25 Yeah. So just, so just thinking this through, again, I, I put it together for something else, but it just coincidentally as we're talking about our topic today is around increasing taxation, especially what's happening in, in January one, payroll taxes being one of those things, one of the core components of your payroll taxes is their CPP contributions. Yeah. So as a, as a an employee, if you're an employed person, you are paying your portion of the cpp and then you've gotta double that. Although the employed person doesn't usually know the business business owner is paying an equivalent amount that they don't get back. Right? Right. So, so they're funding half of your Canada pension plan amount basically for you. And you, you may not have known that, but when you think about what you're earning from an employer, the employer is spending probably another 25% on top of that just to cover all the things that they need to, to keep you employed.
Speaker 1 00:12:14 Right? Right. So if you're, if your, your hourly rate is, you know, whatever, 40 bucks an hour, well the employer is actually spending like 48 bucks an hour equivalent to keep you employed effectively is kind of what boils down to. And I'm not sure about the math on that, but just giving you the, the, the rough context. And so just kind of looking at this, if we, if we add up, of course the first kind of 10 years here, well that's 50,000, $40 of contributions that went in and we have a cash value of $55,000. So if we just stop right there and isolated, okay, we've been making deposits into a system and now we have more capital in that system than what we deposited. It's getting very efficient. And in essence, you could say that the insurance company paid you $5,000 for owning the system.
Speaker 1 00:13:02 That's one way of looking at it. You put 50 in, they, they piled up, you put in 50, they pile up 55. Doesn't that mean that their pile is, that they put together for you is bigger than what you put into the pile, therefore they've actually paid you for owning the insurance and the insurance is bigger. It's kind of one way of looking at it. Well, I mean, you do co-own the insurance company AB absolutely. As a policy owner. And you're, you're in a position where, you know, it's growing at a, at a pretty decent rate. It looks like it's growing at about seven or so thousand dollars a year. So every time you put in five, $5,000, you get 7,000 back out of it. That seems okay. CPP doesn't apparently do that for you. And the other thing is, you can't access any of the money.
Speaker 1 00:13:41 Whereas if you had the same equivalent money that was going into CPP or the Canada pension plan for you, so your portion plus the employers portion, you could just go and put it to work for yourself. Then you could plug it into something like this. You're now, you know, when, when, if you just think about the time when you are, you graduate from planet Earth and you're no longer with us. Yeah. A lot of the big problems that happen in life show up at that time. Okay. Big problems show up at that time. It causes strife, all kinds of things. A lot of people end up becoming, for lack of better terms, we'll solve a bit of a burden on the system. So, so the demand on the public system increases usually when somebody dies because there's all kinds of things that need to happen.
Speaker 1 00:14:20 Yeah. Well, if you solve that problem with your own capital and resources using insurance, then the need for the additional assistance and government programs that's, that are put in place to solve those problems doesn't goes down. So you become part of the solution, the, the bigger overall solution. And again, you would have access to this capital while you're growing and waiting to the time that you would, you know, need to take it for your cpp. So if we go down to, you know, as an example, let's pick 65 here. It's kind of highlighted in orange. All right. So maybe you're gonna start taking your quote CPP income now. Well, you know, you've built up a pile of $200,000 of capital. That's a pretty effective pile. How much did you put into the pile? Well, let's scroll up and we'll just total these numbers here cuz I don't, I don't know the total, I just picked a number. If I go down to the bottom here, it says 126,000 is the total. So you put in 1 26 and you have access to 200. That not a bad deal.
Speaker 2 00:15:20 And then if you contrast that for a second, so you've got this at age 65 right? Of the life insured.
Speaker 1 00:15:26 That's where we're looking at the life insured. Yep. In this example. And,
Speaker 2 00:15:30 And god forbid, so in in the CPP track, right, the, the person decides to start accessing their Canada pension plan benefit mm-hmm. <affirmative>. And they just happen to get on the wrong airplane. What happens? What happens? Bucket. Yeah, what happens?
Speaker 1 00:15:51 They get no more of that CPP payments. There is a bit of a spousal amount that pays off to the spouse if there is a surviving spouse. Yeah, there's orphan orphan benefit if there's orphan children. However, those that only works, the children are longer at home. 65 real person likely not the case.
Speaker 2 00:16:06 I can promise you, I can promise you the surviving spouse is not gonna get a check from CPP for $381,000.
Speaker 1 00:16:13 Oh, they're gonna get 2,500 bucks.
Speaker 2 00:16:15 So
Speaker 1 00:16:16 Which, which one of these would you rather have
Speaker 2 00:16:19 <laugh>? Yeah.
Speaker 1 00:16:20 Right. And, and as, as the, as that continues on, I mean the death benefit grows pretty substantially. I mean, you can kind of see here, just over this timeframe, I mean the death benefit increased a hundred thousand dollars in that timeframe. Now I'm showing deposits still going in. Again, I didn't, I built this example for something else that we did two days ago. It, it just reminded me. So, you know, I could have turned it off at 65 and we could have looked at some different numbers. But I mean, realistically, if you're, you had a bank account where the bank account grew $15,000 every time you put $5,000 into it, why would you wanna stop putting 5,000 in
Speaker 2 00:16:56 People here? Here's the deal. And that goes to
Speaker 1 00:16:58 An inflation problem that we keep talking about too, Jay. That's, that's another one's mind.
Speaker 2 00:17:01 Oh man, here's the deal. Oh goodness. Developing the ability to rethink your thinking. We share this with people all the time. When we're educating North Americans on this process, the question to ask yourself is not how soon can I stop paying the premium? The question to ask yourself is, how long can I pay it for? Because the more capital you put in, the more capital you get out. It really truly is ridiculously simple. You just highlighted a brilliant example of that. From age 65 to age 66, pick any other age, you know, age 70 to 71, age 74 to 75, pick any other age and look at what am I putting in to a system that is already achieving live steam. It just keeps getting more efficient. It just keeps putting out more power. Well, the more capital you put in, the more capital you get out. Pick any year where that doesn't happen. And,
Speaker 1 00:18:08 And to take it even just like to, to further this example, Jason, like, you know, I'll do the actual math here. So the actual gain was 13,417. You put in $5,000. So for every dollar that you put in, I mean, if you doubled $5,000, that's $10,000. You got more than double. So for every dollar you put in, you got more than $2 out. In this case, it's probably roughly about $2 30 cents. So every time you put in a dollar, you've got $2 and 30 cents back out. That's a pretty healthy bank account. That's a very efficient bank account, especially if you can do it with no risk. And the worst case scenario is that you die and way more money than what you put in comes out. That's the worst case.
Speaker 2 00:18:49 Yeah. And, and it's tax free. Nobody gets their hands on it except your family. Isn't that good? Yeah. This was a cool example. Thanks for thanks for bringing that up. That, that's awesome. And you know, the, it just serves as, as additional inspiration to what we've been sharing. You know, I've, I've been on a bit of a bandwagon here the last couple of weeks just expressing to people that, you know, the the one thing, one thing about becoming your own banker, the infinite banking concept that is incredibly boring is that it just keeps working. That's the one thing that is just incredibly boring about it. And human beings want stimulant. They want to be stimulated. So you're, you're putting money into a system and Nelson taught us that from that system you can control how you finance the things that you need in life. People want stimulant. So they say, well gosh, you know, I've been put putting money into my policies now for the last 10 years and they just keep going up and it just keeps going up by more every time I put capital in. And surely there's gotta be something else I can be doing.
Speaker 2 00:19:59 So, okay, so what you're telling me is that you're bored and you're a human being and you need to be stimulated. And so there are many other ways to achieve stimulation without putting your money at risk. Maybe you go on an adventure, maybe you ride that rollercoaster that is gonna, you know, cause you to have to replace your shorts after you get off of it. Like there's, there's things that you can do to be stimulated and you don't have to put money at risk in order to achieve that. You think Warren Buffet wakes up in the morning and goes, man, I'm just so bored outta my mind with all the money I'm making holding stock and Coca-Cola. Like, it's just keeps getting better. You know, more and more human beings show up on the planet every day and sooner or later they're gonna crack open a can of Coca-Cola. And so he just keeps getting wealthier. When you think about becoming your own banker, the infinite banking concept, I, I need you to understand this, that it's gonna be boring, but it's just the boring thing about it is that it just keeps working. So go seek stimulant somewhere else.
Speaker 1 00:21:05 There's something interesting that's, uh, popped in my head and I, I'm not sure why it popped in my head, but I was in a conversation the other day with an amazing guy, one of my, you know, favorite people and he's got a number of policies. Every time we have a conversation, he's always trying to figure out how we can go get another one, which is the right kind of mindset. He's very long-term oriented. Yeah. Just a fantastic individual. And so he, he had a situation where several years back he had a joint venture deal, a real estate deal with a, with a guy. He'd helped him purchase a house. It was a joint venture arrangement. And eventually, you know, the house would, you know, accumulate in value, et cetera. They would sell that house and he would get his down payment money back plus 50% of the profits was kind of the idea.
Speaker 1 00:21:42 Okay? The gentleman who he did the deal with, they ended up being a problem of falling out. Basically. The guy kind of his whole life turned around. He had, he got kicked in the face pretty hard in life. The end result is the house ended up going into foreclosure. I, if I remember correctly, he, he, the joint venture deal was lost. So, so the original down payment capital, he, he basically lost that capital. So the only way that he was able to, you know, or he's able to now I guess recover that capital, he was able and he was proactive in thinking, I need to go get an insurance policy on this guy's life to protect my interest in the deal. So he did that, the policy, it is a whole life policy. It wasn't designed with an IBC mindset in mind. It it really wasn't, but it's still gonna be a great policy.
Speaker 1 00:22:24 In fact, we were looking at it the other day, he's putting about, it's a little under $4,000 a year. Yeah. And it's the type of policy where it has a lot less cash value in the areas. Very, very little. In fact, at this point, almost none. He's now about five years in, it's just starting to accumulate a little bit now, but on the back end that policy's really gonna start picking up steam. And now my client, he's older than the, the joint venture partner. The guy was about 37 maybe when he got the insurance policy. And my, you know, my client was a little bit older than that and he was, you know, roughly around 50 give or take. Okay. And so, but he's got kids, he's got several kids. The this policy will go to his kids at some point, most likely my client will expire before the joint venture partner does just because of the gap in age most likely.
Speaker 1 00:23:10 We don't know that for sure. So, but if we go out and we looked at this thing, you know, when, when the joint venture partners like 85 years old, like out in that point in time, well every time that the kids at this point now inject $4,000 into the policy, the policy generates like 25 grand or 25 or 30 grand a year. Well the kids will be roughly 65 years old at that time. Yeah. What a coincidence. Now if the DeJoy venture partner dies at that stage, even if they didn't use the policy, let's assume they didn't use it for any kind of banking activity, there was no loans on it, there's gonna be like a million dollar death benefit that pays out.
Speaker 2 00:23:45 That's great.
Speaker 1 00:23:47 It's gonna be a, a dramatic multiple of what the original down payment for the real estate deal was that was lost. And it's all gonna be recovered. Now, my client may not see all the money because he might be gone potentially, I don't know for sure, but his family won't see it. And they locked in the inflationary, protected the dollar when they got the policy five, six years ago. That's great. But they're using $4,000 of 2017 money, not $4,000 of today's money. If that makes sense.
Speaker 2 00:24:19 That makes perfect
Speaker 1 00:24:20 Sense. Every time that they put that capital in and they put their 4,000 in and they end up getting 25,000 out, that's a pretty good inflation hedge and it's an inflation hedge that now expand or, or extended beyond generations. And that's something I never really thought about before was preserving the capital value beyond your own lifespan when it comes to inflation. And that's something you can really do when it comes to this process. Yeah,
Speaker 2 00:24:47 It's not, it's not only about keeping the money in the family, it's about keeping all of the spending power in the family too. Because when you have spending power, you can take advantage of opportunities in times like these. And believe me, when the storm hits and it's gonna hit again, you know, banks, banks who are over levered because the, you know, especially in the United States, banks who are over levered are gonna be some of the biggest, hardest hit this next go around. And then of course it's gonna affect the consumer as it always does. And there there's going to be an abundance of opportunity and if you have spending power and you've got ready access capital, you'll be able to take advantage of those high caliber opportunities. And so it, and we talked about this in our last live deal where people have heard us talking for years about, hey, you know, when, when high periods of inflation return, when interest rates begin to rise, when we're in that situation, uh, you're going to be at an advantage because what you do financially is compared to what everyone else is doing financially.
Speaker 2 00:25:52 And those who weren't practicing this process did not have money that was shielded from what's going on right now. Whereas people who have been do have capital that's shielded and they're, they're just in a much better position financially. And so now that we're in this reality, people are saying, you know, we heard, we heard you guys talking about that a lot, but we were in the lowest interest rate environment that we've been in and we weren't experiencing rapidly rising inflation. And so we really didn't, obviously didn't really, truly appreciate what was being said. And now it's like, how can I get more capital into my system? Like how do I do that? So it's just an interesting time.
Speaker 1 00:26:35 It's funny when you talk about, you know, again, over levered banks and stuff, and what immediately pops to my brain is page 19 and Nelson's book, which is, you know, when he talks about the first National Bank of Midland, Texas. Now you and I have done some video conversation about that before, but he basically is talking about how the, the, the highest per capita earnings location, the small community of Midland, Texas had, you know, you know, great, great banking business, you know, was, I think it was probably one a bunch of awards or all this kind of stuff were being nice, the most money making bank or whatever at that time. And they went belly up because of, of a, of a not maintaining a prudent relationship between their, their loan, their loan portfolio and, and deposits and repayments and that sort of thing. And they were, they were basically using all the capital and they had so many non-performing loans that the, the business went belly up and this kind of activity can happen again. It's, it just happened once, it happened a couple of times. It's pretty reasonable to think that it can happen again,
Speaker 2 00:27:35 <laugh>. Totally, totally.
Speaker 1 00:27:37 And there's not, there's not a, there's not a, they're not gonna get bailed out by the, by the government this time. They're gonna get bailed in by Canadian depositors. And you're gonna, if that does happen, you're gonna end up owning a bunch of defunct stock in a crappy bank that basically can't pay its bills,
Speaker 2 00:27:54 Maybe
Speaker 1 00:27:55 Private contract with someone that doesn't use manipulated funny money.
Speaker 2 00:27:58 Yeah. Precisely
Speaker 1 00:28:01 Possible idea to maybe limit your exposure.
Speaker 2 00:28:04 And if you're, if you're walking a tight rope, you know, financially where even, you know, another percentage point increase in interest rates is going to cripple you financially, boy, you're in trouble. And you need to, you need to set about rectifying that. And, and the way to do it is to start gradually and incrementally shielding your money from onerous taxation from, you know, the, the central banks and, and what's going on. I is just a, it's a huge mess. And with, you know, all of these institutions trying to unwind and untangle, you know, this, this mess that's been created. It's a, it's a futile effort. It's just a futile effort. And if you look across the history there, there's a reason there, there is a, an engineered reason why the life insurance companies themselves remain the most financially solvent institutions on planet earth. And they're, they weather, you know, these economic storms, I guess for a lack of better description or, you know, monetary policy breakdowns and mistakes and, and things that happen out there.
Speaker 2 00:29:26 And these institutions remain the most financially solvent on the planet because they engineer the outcome. They're, they're not speculating and then sitting around at the boardroom table saying, wow, this party is never gonna be over. Let's just continue over leveraging, let's continue multiplying the money. Because you know what, those government bureaucrats, they already came to the trough once with a whole series of U-haul full of cash <laugh>. So if the poop hits the fan, chances are they're gonna be there again. Because if, if we had situations called too big to fail back in oh 8, 0 9, look at how much worse it is now because of all those large banks that had to merge to stay alive and, and they, that wasn't a decision of, hey, maybe JP Morgan should buy Chase Manhattan. It was the federal government saying get on the phone, CEO of JP Morgan, get on the phone with the CEO of Chase and you two are gonna merge and it's gonna happen. Get your boards together and hammer out the deal. And we wanna know that you're making the announcement to the press tomorrow afternoon, because if you don't, by tomorrow evening, you'll both be outta business. That's what was going on.
Speaker 2 00:30:55 If you really want to be entertained, watch the movie titled too big to Fail. It streams on all the popular stream platforms. Just watch it. It'll give you a deep insight into what actually happened. Because these CEOs were all like, listen, we're we're capitalized. Like we don't want and we don't need the additional money. It's the investment banks that lost their way, that lost their way from being deposit, taking institutions to being speculators that, I don't even know how they call them banks, they shouldn't even really be called banks. They're just, they needed to to, to build out. But you know, the, the, the folks at, at, again using, you know, chase and JP Morgan and you know, these companies, they sat down and said, look like we don't need any of this injection of capital. And the government said too damn bad, you're gonna take this money and you're gonna get it circulating in the system because the system has paralyzed. There's no credit, there's no money moving. And these large corporations are calling going, Hey, we can't buy raw materials, we can't pay our our team members, we can't expand the business, build new plants, create develop new products because money isn't moving in the system. We have no access to capital. The system is frozen. So to unfreeze the system, they had to give it a big jolt of trillions of dollars. And once the banks got their hands on that money, do you think they immediately started lending? Nope.
Speaker 2 00:32:31 They paid out a lot of bonuses. Well, they sure did. They sat down and said, listen, like we gotta hang on to all these people who got us in this to begin with. So to hang onto them, why don't we just pay them all more and the government's picking up the tab, so right. Fuel up the car, we're gonna hit the private jet, we're outta here, here, have a party, somebody's waiting in line at the teller wanting alone, and we'll be in Cuba somewhere, have a big party like on the taxpayers dime. And so how much of your capital do you want shielded from that nonsense? You know, I was thinking, I gotta tell you this, oh, I gotta share this with you before we sign off here. So I was thinking about, there was, you know, a group of people in the industry who were together and the conversation about a mutual life company versus a stock company came up, which it always does, right?
Speaker 2 00:33:24 People just genuinely, a lot of people in the business, they, they just genuinely are curious, you know, like, hey, what is the difference between a mutual life company and a stock company? And then one of the remarks from someone in the group was, well, you know, I have to be able to do the best thing for my client. And I say, you know, gosh, it's funny you say that because that's exactly what the board of directors at a mutual life company says. And their client is not a stockholder, their client is the policy owner and we have to do the best thing for our client. And so who do you, whose interests do you want represented and who do you want the company to be responsive to? Well, when you're dealing with a mutual life company, you're dealing with a company that has no stockholders, they're only responsive to the participating policy owners.
Speaker 2 00:34:14 That's who they are saying we need to take care of. When you're dealing with a stock company, it's not that the company's bad. Stock companies are great, but understand, really be clear on who they are responsive to, first and foremost. It certainly isn't the customer, it's the stockholder chasing quarterly, quarterly share reports, right? So who do you want to be the custodian of, your warehouse of capital, your warehouse of wealth, people who are mandated and legally bound to be responsible to you first or to a stockholder and you second the good thing is, is that you've got a choice and your choice maybe different than mine. And it's not that mine's right and yours is wrong, it's just each choice has consequences. That's a fact. I mean, Nelson, Nelson didn't just wake up one morning and go, I think I'm gonna suggest that people do business with a mutual company because I think that'd be a good thing to do for my client. Unbelievable. You know what though? He, what he would do is he would've made a joke like that and he would've then looked off and
Speaker 3 00:35:37 Took a,
Speaker 2 00:35:42 He, he, he suggested it because he understands the strength and mutuality and he understands who the gophers at the company must be responsive to. And that is the participating policy owner. And every single mandate that gets created in the company is created for the benefit of the owner. And that is the participating policy owner. That's what Nelson understood long before anybody was out there talking about becoming your own banker.
Speaker 1 00:36:11 I'm not sure why, but I just had a a, I just, I just saw an Austin power reference in my head
Speaker 3 00:36:18 Who does number two work for <laugh>. Come here. That
Speaker 2 00:36:27 In my billing. Yeah. Okay.
Speaker 3 00:36:29 Don't worry buddy. We've got this
Speaker 2 00:36:31 Like, anyway, hell, it was good. Today was fun. Happy Friday to all. I don't, I honestly don't know how many people are watching. Maybe, maybe five people now. I don't know. But
Speaker 1 00:36:44 If one of you has a multiple personality disorder, we can add that in so we could see
Speaker 2 00:36:47 There's perfect. So we can say there's six, there's six people watching us, but we, we wish everyone a a fantastic weekend. Today's Friday, happy Friday. Have a great weekend. Rich, you and I are gonna do some, some more content creation, which is gonna be great cause it's Friday and, um, can't wait until next week for you to be here. It's gonna be
Speaker 1 00:37:10 Family Banking Summit, getting lots,
Speaker 2 00:37:12 Banking summit,
Speaker 1 00:37:13 Talking about the summit. It's gonna be a blast. And I'm excited. Have a lot of fun. Yep.
Speaker 2 00:37:18 So
Speaker 1 00:37:18 Cool
Speaker 2 00:37:19 Man.
Speaker 1 00:37:19 And we had a lot of people suggesting that we, we try to throw another one. So maybe we'll see how this one goes and then we'll decide if we should throw another one.
Speaker 2 00:37:27 Yeah, well there, if we are definitely, we're gonna make an announcement about a big event in Toronto, and I think that'll be in February, I think. But uh, yeah, we're gonna make a big announcement about that because there's been a huge demand and oh boy, it's gonna be exciting. Really exciting. I'll see you on the Zoomers.
Speaker 1 00:37:46 Sounds good. Okay. All right.
Speaker 2 00:37:48 Cheers. Cheers.
Speaker 1 00:37:50 I hope you enjoyed this episode. It was a ton of fun. Make sure to check out our live streams, typically done every Friday at noon Mountain time. And we enjoy these incredible conversations and we enjoy having you a part of them. So look forward to seeing you on the next live session. And don't forget to download our seven step
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Speaker 4 00:38:12 Thanks for listening to The Wealth Without Base Street podcast, where your wealth matters. Be sure to check out our social media channels for more great content. Hit subscribe on your favorite podcast player and be sure to write the show. We definitely appreciate it. And don't forget to share this episode with someone you care about. Join us on the next episode where we continue to uncover the financial tools, strategies, and the mindsets that maximize your wealth.
