Episode Transcript
[00:00:11] Speaker A: Welcome to wealth on Main street, where conversations about growing your wealth are fun and entertaining. Wealth isn't just about money. It's the skills and the knowledge that we develop to pass on to future generations. Tune in each week to grow your mindset and your net worth at the same time.
I'm excited about this upcoming episode. Jason and I were able to finally get together in person and record a few incredible discussions together for the first time in years. It was so much fun. We did have some technology issues along the way, and we had some audio blips here and there, so I hope you enjoy the content cause we had a lot of fun making it. And now on to the episode.
[00:01:01] Speaker B: Let's have a conversation regarding your money problem.
[00:01:09] Speaker C: And we're literally recording this live at the Westin in Birmingham, Alabama. Richard and I were just here for the inaugural Nelson Nash Institute Infinite banking Coaching Academy, which we were very blessed and honored to be speakers at, and to be able to pour all of our experience and energy into all the attendees. And one of the topics of conversation was the money problem that Nelson described so eloquently in his book titled to becoming your own banker, which, if you haven't read this book, it'll take you less than an afternoon to get through. It's a 92 page read. You have an opportunity get your hands on a copy.
[00:01:50] Speaker D: That 92 page pages include, like, the glossary, table of contents, the epilogue. You know, recommended reading this, so when you really strip it all down, there's roughly 70 to 75 pages that you really need to read. And if you can't complete that in an afternoon, might wanna loosen up your schedule a little bit.
[00:02:09] Speaker C: And one of the things that our late mentor, Nelson Nash often said was that unless you understand the problem, the solution just won't matter to you. And what we see out in the marketplace, when either prospective clients are connecting with us, advisors in the life insurance space are connecting with us, that the conversations or questions often lead with the solution path. And when we're making an inquiry with these folks who are connecting, hey, can you describe the problem to us from your vantage point? We often are met with sort of a deer in the headlights look like, what are you. What are you talking about? And unless you understand the problem, the solution just won't matter to you. And the way that Nelson described it, the way that we were taught, because we were blessed beyond the definition of good fortune, to be mentored by Nelson for so many years, is that you're doing all the work to earn your money and everyone else is getting it meaning. Is it not true that at present, all of your money is flowing onto the books of someone else's bank? Think about that from a ridiculously simple vantage point, regardless of what your streams of income are.
[00:03:17] Speaker B: So what would be a multitude of streams of income?
[00:03:21] Speaker E: Real estate. Cash flows. And when I say cash flows, I don't mean the cash flow left over. I mean an entire rental. You get a multifamily building at a single family unit. You receive rent.
[00:03:30] Speaker D: That entire rent check is deposited onto.
[00:03:33] Speaker C: The books of Saul.
[00:03:35] Speaker D: You get a ledger entry that indicates the money's in an account that you quote unquote, own. But really, what that is is a ledger entry that says you've deposited $2,000 of rent income into this account that's got your name on it. That's just an indication of tracking missing mechanism for that banking institution to say they owe you that money. So it's really a receipt.
[00:03:53] Speaker C: And you're an unsecured creditor of the bank.
[00:03:55] Speaker D: You instantly become unsecured on in relation to that rent, right? And then you get paid for your, your income, whether you're, aww, two or t four employee in Canada. You work for, you work for a business, you get a paycheck. It comes out every second Friday that lands automatically. An auto deposit used to be. That used to actually get a physical check. And there's some people that still do that, and they have to go into deposit bank with most people who are on an automatic deposit. You know what Dave Heyday is, but you don't. You set up all your bills and your arrangements so that things are happening in the background without your necessarily awareness, you might know what a lot of those things are, you know what the.
[00:04:28] Speaker E: Big ticket items are, but you're not.
[00:04:30] Speaker D: Really watching it every day.
[00:04:31] Speaker E: And so you almost become psychologically unaware of the daily activity of how your money is flowing right away from you.
[00:04:42] Speaker B: And when that money lands on the books of someone else's bank. Now, granted, there are no exceptions to this. Unless you're stuffing money in a jar or you're stuffing it in a mattress or you're burying it in your backyard, there are no exceptions to this. All of your money is flowing onto the books of someone else's bank. And so when you think about that in terms of not only yourself, but your business, all your employees, their families, your family, your extended family, all of that money that's flowing through your hands over the course of your lifetime for everything that you spend money on. So a great way to frame up this problem, even with more clarity, is that if you were to think about all of the things that you've spent money on up to this point in your lifetime, not just for you as an individual, but for your family, your extended family, your employees, your companies, could you write me a check for that amount of money breakdown?
[00:05:40] Speaker D: Not a chance.
[00:05:41] Speaker B: Why not?
[00:05:43] Speaker E: It's all gone to someone else, right?
[00:05:44] Speaker B: And not only is it gone, but all of the transfer of that money away means that you've permanently given up the opportunity to earn interest on that.
[00:05:54] Speaker C: Money, not only for the rest of your lifetime. Your families, your employees, the list goes on, but for every generation that comes after them. And that is something that we would characterize based on everything that we've learned to be a problem. And so I'm asking you, the viewer, I'm asking you, the listener, if you. If you can't see me right now, I'm asking you to just pause for a moment and think. Think about your thinking and ask yourself.
[00:06:19] Speaker B: Is that a problem? And if you agree that it is, then the infinite banking concept is the solution to that problem. And when you hear me say that, Richard, what comes up for you? So, from your vantage point, when I say that it is the solution to the problem.
[00:06:37] Speaker E: So, getting clear on identifying what the problem is, which in your description, if we just kind of re unpack what Jason just identified, and let's use an example to do that we talked about the things that we're spending money on.
[00:06:50] Speaker B: Yeah.
[00:06:51] Speaker E: And so it's generalized. But let's pick an example.
Let's say you got to put your kid through hockey or soccer or gymnastics or dance class, some of those things to be very competitive. And if you have a couple of kids, those add up.
[00:07:04] Speaker D: So let's just take a look at that.
[00:07:05] Speaker E: Now, you have your son in competitive.
[00:07:07] Speaker B: Hockey and my daughter in competitive volleyball.
[00:07:10] Speaker E: She's daughter on the dance, basically been recruited by the University of Alberta.
[00:07:14] Speaker B: She's on varsity team.
[00:07:15] Speaker E: Unbelievable.
[00:07:16] Speaker D: Of course, she's basically lame, but she's so tall. I think she's just spiking the ball but smashing people's faces, I'm sure all the time. And I just, like, I could picture her just be like, huh? Like, not even like, oh, I'm so sorry that that happened. But we won, sort of.
[00:07:29] Speaker C: Yeah.
[00:07:30] Speaker D: Anyway, so, so these. That's just one example. Now, let's just say I don't know what competitive volleyball is, but maybe that's somewhere between 500. And let's just say, keep it. So $501,000 a month. To do that. It's.
[00:07:42] Speaker C: Yeah, a little more than that, but, yeah.
[00:07:44] Speaker D: Okay, so let's just keep the. That's because you got coaching as part of that as well. All right, so let's just use $1,000 a month for a competitive sport for a kid. And now she's a teenager now, but she's probably going to pursue doing that all the way until she's finished, before she goes to university.
[00:07:58] Speaker C: Yeah.
[00:07:59] Speaker D: So there's another, let's say that'll be five years worth of doing that if she pursues that initiative.
[00:08:05] Speaker C: Oh, at least.
[00:08:06] Speaker B: Yeah.
[00:08:06] Speaker D: Okay, so we've got $12,000 a year for five years. What is that, $60,000?
[00:08:13] Speaker E: So just in that one area, we're isolating one thing, one element that's a money flow that's going through the family life. And this happens for all families that have kids.
[00:08:22] Speaker B: Not to mention it costs about $300,000 to raise a child.
[00:08:26] Speaker E: To raise a child.
[00:08:26] Speaker D: Just. Yeah.
[00:08:27] Speaker E: When you think, well, all the education, all the food, all the clothing, all.
[00:08:30] Speaker D: The toys, all the broken parts that you see that legos that you step on, all the fuel to get from all the places. Like, we're just talking about the cost of just the volleyball and the coaching. We're not looking at travel costs.
[00:08:46] Speaker C: Parents watching are already getting my, like, oh, my God, he's describing me.
[00:08:50] Speaker D: If you're throwing up because of everything, that's. I'm sorry about that. But, like, it's okay to just tell the truth, because all progress begins telling the truth. So when you unpack one element, element of the cash flow that's running through your life.
[00:09:02] Speaker C: Yeah.
[00:09:02] Speaker D: It gets easier to say, oh, wow, yeah, we're paying for that. That does start to add up to a lot of money. But then, okay, well, you think about what it's going to cost you this year, but then you don't think about.
[00:09:11] Speaker E: Well, what is that going to cost us over five or six years? Right. So let's just say in that five year period, that $60,000 that's flowed into and then out of the cash flow, in and then out of the family life.
[00:09:23] Speaker D: Yeah.
[00:09:24] Speaker E: So what is the interest earning potential on that? You know, when your daughter started this, you know, she was, like, 13 when.
[00:09:30] Speaker D: She started this competitive.
[00:09:31] Speaker C: She was 1212.
[00:09:32] Speaker E: Okay, so, like, if you just think about that from age twelve all the way to age 100, what is the compound potential of all that money flow that's now disappeared from her future? Just on that. Just on the earnings on that one item?
[00:09:46] Speaker B: Yeah.
[00:09:47] Speaker E: Now if that money, and in your case, I know that has already happened.
[00:09:50] Speaker D: But let's assume that it hasn't happened. But if you were able to get that money into a system of policies, as Nelson describes in his book, which is the solution. Yeah. Okay, so the $60,000.12 grand a year, five years, that's the problem, money flowing out. The solution is if you get that money flowing through a system that optimizes that money so that it has constant accumulation effect without interruption to the original dollar that went in.
[00:10:18] Speaker C: Yeah, without interruption.
[00:10:20] Speaker D: But you had the ability then still access money from a reservoir, in this case, the life insurance company's general fund, using a collateralization effect, borrowing against, then you've now controlled the original dollar to bless your family and her future family for the rest of her life and beyond her life. Right. So your life, her life and beyond her life, all by making the decision to change the flow. So just imagine money comes in, it then goes through something, and then it has the ability to go out and do the thing it was supposed to do. But whatever gets captured inside of this element now has perpetual motion on it.
[00:11:00] Speaker C: Yeah.
[00:11:01] Speaker D: So problem is, the money's flowing and going everywhere else and you're not retaining any of it. Once we implement the solution and we redirect the flow, we've now retained that original money to do something for your life, for the rest of time, for the rest of your future.
[00:11:16] Speaker C: And let's further clarify that. So Nelson said that his book titled becoming your own banker was really meant to be a ten hour course of instruction on the power of dividend paying life insurance, ideally with mutual comps.
[00:11:34] Speaker D: The first sentence in the book.
[00:11:35] Speaker C: And when you think about solving the problem, well, what is the problem we want to solve? We want more money flowing into the family's hands versus through the family's hands. So, following up on Richard's example, when you begin to pay premium into a dividend paying life insurance policy IP system of policies, you're paying a premium. It's a payment that money is flowing onto the books of the life insurance company that you now co own. You have a guaranteed loan provision, because the moment that you begin to pay premium, you begin to accumulate cash value, which is not money. It is the net present value of the future payment of a death benefit. But that cash value is rising each day. And the life insurance company says, look, we're going to permit you to borrow against that ever increasing accumulation without interrupting it. So if I've got $20,000 of cash value in a policy. And I need $12,000 from the life insurance company to take care of my daughter's volleyball activities. I'm borrowing against that 20,000 of accumulation, not withdrawing and not reducing it. That 20,000 is still there, growing every single day that my daughter is aging. The lien for the policy loan is against the death benefit of the insurance policy, and that death benefit is ever increasing. But the premiums that I'm paying can never go up. They can go down, but they can never go up. Now, a person viewing this for the first time, I'd say, my God, what on earth are you talking about? I'm talking about the fundamental truth that your money must reside somewhere. So if you can have money flow onto the books of a life insurance company versus onto the books of someone else's bank, you co own that life insurance company. You have guaranteed access to capital on demand, on your terms, without reducing your assets value, without triggering a taxable event. Policy loans are unstructured, meaning the policy owner controls the repayment schedule. Ask yourself a logical question, given that the government is constantly hovering over your assets with a giant knife and fork, just waiting to consume them. Ask yourself a fundamental logical question. How much of your capital do you not want residing here? Because from this place you can take care of investments. Cars, property investment. Property.
[00:13:51] Speaker D: Volleyball.
[00:13:52] Speaker C: Volleyball?
Dance hockey?
[00:13:55] Speaker D: Artificial turf. Artificial turf.
[00:13:57] Speaker C: You know, the list goes on.
[00:13:59] Speaker D: Vehicle repairs, vehicle purchases, buying equipment.
[00:14:02] Speaker C: Yeah. Anything that you would otherwise pay cash for, lease or finance, anything. And when you understand what's really going on, you'll know exactly what to do. Because not only as a co owner of the life insurance company do you get all of that control, but you also participate in the visible surplus generated by the life insurance company in the form of dividends, which once declared, which happens once a year, those dividends can't be repossessed. They can't lose value. Ever.
[00:14:30] Speaker B: So again, that begs the question, how much of your capital do you not want residing there? Would you rather all of your money continue to reside on the books of someone else's bank, where you have the convenience of debit, you have the convenience of visa, Amex or Mastercard. But believe me, you're making the wheels of the banking business turn. They're making a great living off of you, and you're doing perhaps so so at what you're doing to earn an income.
[00:14:56] Speaker C: And that's become the banker as it relates to your needs. That's the solution to the problem, that.
[00:15:02] Speaker D: Description of it sitting on the books of someone else's. Banking business, which is what everyone else in the world is doing and had been trained or accustomed to do, is perfectly outlaid in Nelson's book on page 45 in the twin sisters example. So we're not going to deep dive into that. But I would encourage you, if you have a copy of the book, take a look at and reread, you know, page 45 in that segment. It clearly isolates it when you do business with the third party banking institution for the purpose of financing your purchases in life and playing honest banker, how you can have a distinct advantage by doing it through the advantage of mutual policy ownership. Mutual ownership with a dividend paying life insurance contract. I want to unpack what Jason indicated about, you know, being a co owner in the company just a little bit further, because I think a good way to indicate that we hear these words here, co owner. Okay, cool. Co owner. So, like, yeah, that makes sense. But, like, just consider this one. Jason and I, we both have children and we both have policies, and we have policies with multiple companies.
[00:15:58] Speaker B: Yeah.
[00:15:59] Speaker D: But a lot of our policies, coincidentally, are with one particular kind of mutual insurance company. Very fond of them. I like them. They do a great job, personally speaking.
[00:16:07] Speaker E: And we have clients. Likewise, most of our clients have policies with that same company. And we also have our team members, which have their own families and have multiple policies with that same company. So when Jason takes a policy loan for $12,000 to go and pay for volleyball, and he's got to pay some interest on that loan, that interest goes back to the pool, the general fund of the insurance company, which he co owns and I co own, and Sargo co owned, and Dan Allen and Jinjin and our clients.
[00:16:37] Speaker D: And so we are all co owning in that industry. So if Jason pays interest or I pay interest or you pay interest to that same pool, it benefits all of us in that pool. And that, that allows the business and the engine to churn more effectively and efficiently for bigger, better decision making process by the mutual life insurance company as well. So now with Jason's returning loan repayments.
[00:16:59] Speaker C: Yep.
[00:17:00] Speaker D: To replenish that capital, because he's going to have to take another loan for next year's volume. Yeah. So if he's just taking that, let's.
[00:17:05] Speaker E: Say he takes $12,000 out and he pays upfront and he sends $1,000 payment.
[00:17:08] Speaker D: Just to keep things simple.
[00:17:10] Speaker E: Back to the general fund of life insurance company.
[00:17:11] Speaker D: The loan balance goes down. So loan balance goes down, cash values going up. Well, the next year, he's going to take another 12,000 and do it and repeat that process. But there's more capital available for him to work with because of the way that the policy is designed and so on. In that very simple, like, little atmosphere, a little bit of interest is going to be paid to life company that benefits us. Meanwhile, at the same time, I had to go replace artifice, do an artificial turf project, which ive talked about a few times at my property in Chilliwack VC. Im very glad that I did. Coincidentally was around a $12,000 number, just coincidentally speaking.
[00:17:45] Speaker E: And so ive been making loan repayments back on that. And now my interest allotment is benefiting Jason and his family, which includes his children, which includes his daughter playing volleyball, his daughter playing volleyball. And him taking that policy loan is now benefiting my children who get to. To play soccer in my backyard on artificial turf. This is what co ownership on then. Now just take that thing about every single person that you know, every friend, every family member, every, every, every student that your kid is in school with.
[00:18:14] Speaker D: Of their parents, everyone that you, all your coworkers, take a look at all of those people and just imagine for a moment that they are all doing that transactional process on mass at scale with an entity that they have ownership over, and that entity cannot inflate the money supply. Now, we've got something really powerful when that takes place, and it is taking place. And by the way, if you implement that, there is no one putting a.
[00:18:42] Speaker E: Gun to your head, forcing you to do it. It's a voluntary decision that you can choose to do and participate in. You're not being forced to participate in anything.
[00:18:52] Speaker B: And think about this from a different vantage point, too, where people might think, okay, when I request a policy loan, I have to pay interest on that.
But that interest isn't directly benefiting me and only me. Well, is the interest that you're paying to someone else's bank directly benefiting only you? It's not benefiting you whatsoever. It's benefiting the stockholders of the bank. And so think about it from this perspective.
Dividends are declared based primarily on the contribution principle. So if you're sending all of your payment streams to a conventional bank, first of all, that's that institution's passive income. But that conventional bank is also making a determination as to what the payout ratio is going to be of dividends based on their earnings per share. The more interest you pay, the higher the earnings per share are. So I just want you to think about this for a second.
[00:19:50] Speaker C: When you're dealing with the life insurance.
[00:19:51] Speaker B: Company that you co own. The more interest you pay back into that entity, the larger your net contribution to the earnings of the company that you co own, which means your divisible share of the surplus goes up.
[00:20:04] Speaker E: But it can't be that simple.
[00:20:08] Speaker D: It can't just be that simple, right?
[00:20:10] Speaker E: So fundamentally, I mean, it has to be more complicated. And how on earth could it be that simple, Jason?
[00:20:17] Speaker D: Look, it's ridiculously simple.
[00:20:20] Speaker B: You have a policy, or ideally a system of policies, with a mutual company.
You have a good coach who can mentor you and help you to implement this process properly and to integrate it within your family, your company, or ideally both. Especially if you're a.
[00:20:39] Speaker E: An entrepreneur.
[00:20:40] Speaker B: You systematically and repeatedly and regularly pay your premium.
[00:20:48] Speaker C: When you do that, these policies are accumulating contractually guaranteed daily growth of cash value, which attracts no tax, by the way. So you're paying no tax on that daily buildup. It can't be repossessed, it can't go backward, regardless of what's happening in the economy, the real estate cycle, the political environment, um, the stock market, the list.
[00:21:08] Speaker D: Goes on, global wars, and you name it.
[00:21:12] Speaker C: Now you're in a position where you can begin to gradually and incrementally control how you finance all the things that you need throughout the course of your lifetime, like cars, property investment, property investments.
[00:21:25] Speaker B: Artificial turfs, artificial turf, volleyball, anything that you would have otherwise paid, cash, leased or financed. And when you begin to gradually and incrementally control how you finance all the things that you need throughout your lifetime, you begin to really experience a peaceful, stress free way of life, financially, because you're getting the backers out of your life. And that, as evidenced by the thousands of five star go reviews and the testimonies from our clients in North America, they're telling us firsthand that, a, they've never experienced that before, and b, this process is ridiculously simple. Once they know how. And the best way to develop the know how is to do it is to simulate.
[00:22:10] Speaker D: It's the same, same way you learn how to ride a bike. Hey, maybe you fall off and you scratch your knee, and then you get back on the bike. An example of that, you know, would be you took a policy loan and maybe you weren't as good at repaying the loan back, and you paid a little bit of extra interest life company than you otherwise could have had you been more meticulous at it or, you know, you. You took the policy loan and you got really busy with life, and then, you know, something happened and you had a major hiccup. Maybe you lost your dog for three.
[00:22:36] Speaker E: Or four months and you had to take a pause on policy, loan repayments or whatever, which, by the way, you can do when you're your own banker. Yeah, who you can't do when someone else is your banker. If someone else is your banker. They expect that payment every freaking month.
[00:22:51] Speaker D: Or bi weekly or whatever they, they told you they were going to set up and you signed a contract to agree to. And coincidentally, they have no flipping sense of humor about at all when you say, oh, hey, jeez, Jason, sorry, but I lost my job. Is it okay if I take a three month holiday on payments? They're going to say no. But it is okay if you declare bankruptcy or we come after you and ruin your entire life and destroy your family financially. So you have to recognize what is the power and advantage of having that level of control. That's how you create peace of mind.
You cannot have that level of peace of mind when someone else holds the keys to your financial capacity and your ability to recognize the ebbs and flows of a life. You just can't have the same level of freedom and enjoyment and sleep that you can when you are in the control position of those elements.
[00:23:49] Speaker C: That's a very, very good point. And so where we begin is we began by saying, let's address the word money problem. And so, in summary, if you're earning an income regardless of the source, isn't it true that at present, all of that money is flowing onto the books of someone else's fellow, and you systematically pay taxes, you transact for all the things that you need over the course of your month, if you're paid monthly, over the course of bi weekly, if you're paid biweekly, and you're systematically and permanently transferring all that money away from you, you can't earn interest on it again, save it again, spend it again. It is gone. The transfer is permanent. You're doing all the work. Everyone else is getting all of your money. We suggest to you to think and to ask yourself, is that my problem? And we haven't found any exceptions to it yet. The solution to the problem is the infinite banking concept, as outlined in the number one best selling book authored by our late mentor, the late Arnold Sinej. This book has sold more than 550,000 copies, and it's self published, and it has sold that many for a reason. The process works on whose? I, who is most impacted by this problem? You are. And so the solution is here. And believe me, when you read that book with an open mind, it's going to open your eyes to a whole new financial world. We're going to include a link in this video where you can get your hands on a copy of not only this book, but our latest release titled don't spread the wealth, where we take what Nelson built and we just add.
[00:25:26] Speaker B: A second story to it and we bring it to the family level where we talk about the family banking system where you can introduce this to your family and really simplify the estate planning process, simplify the transfer of generational wealth, and to keep the money where it belongs, in the family.
[00:25:44] Speaker E: In the family. You can go to don'tspreadwealth dot. That's don'tspreadwealth dot. Go ahead and get a copy of that book. Right now it's getting great reviews and it's all about serving and giving you the tools to, to be able to implement those conversations today at the family level. If you haven't already done so. And even if you have done so, maybe there's some other elements that you may want to consider adding into what you sprinkling in to, you know, increase the flavor of the recipe as you go about having those conversations with your family members. So we're eternally grateful for you listening and watching and hopefully you get a.
[00:26:20] Speaker D: Ton out of this.
[00:26:21] Speaker E: But by the way, right here down below, you're going to see another video.
[00:26:24] Speaker D: That popped up that says, here's some more amazing content that we need to get through. So go ahead and click on that and start getting through it. If you got more to learn and there's no sense in waiting, we'll just get started right now.
[00:26:35] Speaker C: Thanks for tuning in.
