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.
[00:00:36] Speaker B: Yeah, so this is the new one, guys. You know, so this is, you know, and it's. It's the same continuation of the gambling with other people's money, you know, and we have 401ks and in the US what do you call them? RSVPs? What do you call them?
[00:00:56] Speaker A: RRS? Yeah. Register Retirement savings plans where there's no savings and the plan is how their government's going to get your money.
[00:01:04] Speaker B: Same thing. You follow me? Default me. It's just rebranding, you know, and so. So again. So it goes on again. And so this book is about buybacks and cryptocurrencies, which actually were pretty big in Canada, too, which is still our.
Up in bc, stuff like that. There's actually miners up there. A lot of these have gone public through what are called special purpose acquisition companies. A lot of them have gone bankrupt. Yeah, spacs and unicorns. And then, you know, so it's the same old, same old. And, you know, it's. And then if you. If you want to talk about it, we can also, you guys, if you. In Canada, we can talk about my friend Brookfield. Brookfield.
[00:01:49] Speaker A: Okay.
[00:01:50] Speaker B: You know, but anyway, so. So. So I think really, you know, one of the big things really is what you're doing for your clients and for the public is such a good thing, because people are really not getting the truth, you know, and so true.
They're not getting the truth. And. And instead of patiently. You know what, guys? You guys play any sports? Oh, yeah, hockey. Hockey.
[00:02:17] Speaker A: And I watch it because my back's not so good. But.
[00:02:22] Speaker B: But, you know, how long you play hockey for, Jason?
[00:02:26] Speaker C: Well, for me personally, I've been obsessed with hockey since I was a fetus.
[00:02:32] Speaker B: Okay, so. So this is my point, is that, you know, we look at the Wayne, Great Wayne Gretzky.
Why is Gretzky so good or Bobby Orr so good on skates? Okay, Gretzky was probably one of the greatest ever. But the thing is that because he worked on things for year in and year out, day after day after day after day after day, and he practiced, he practiced, and he continually got better at it. And it's no different with any. With money issues. And the thing is that. But what we're being told now is to Continue to speculate with, in the markets and, and, and you'll be okay. And the thing is, is that we know, intuitively know if we want to get good at anything, we have to really stick with it and practice it long, long periods of time. And it's like I, you know, I write books and people think it's, you know, it's, it's hard writing books. It's very, very difficult. I mean, you have to work in generally, I'm up at 5 in the morning, whatever, and I work in the stuff and so good thing, God bless me. And eventually we can finish the books, but it takes a long period of time. So I salute what you guys are doing because it's now more than, more important than ever that really people invest themselves and really take back their financial future. And you know, because this is not going to end well with all this, you know, rampant inflation which we have and in the us, Canada, throughout the world, because all the money printing, you know.
[00:04:01] Speaker C: Yeah, it's the thing I was going to add too, Barry, is that for our listeners. So, Barry, you have been a remarkable influence on our client community, our listening audience, our viewing audience, and it all began with Pirates of Manhattan, which for anybody listening or watching, if you have not read that book, not only should you buy that book, but you should get your hands on anything that Barry has written because your eyes are going to be opened to a whole new financial world. And speaking of that, with the election coming up. So Barry, you may not know this, but we operate in the United States now as well. So about 30 plus percent of our listening audience was continually reaching out to us, saying, look, we're American, we understand this is Canadian focused content, but can you point us in the right direction for someone to give us a hand with, in our case, implementing the infinite banking concept, the process of becoming your own banker. So that gave rise to.
How many more times do we want to hear that question before we recognize that this process doesn't recognize any borders? We should be serving Americans as well. And so we've been doing that and that's what caused us to brand over from wealth without Bay street to wealth on Main street, which is what we're now known as. And you played a role in this, Barry.
[00:05:28] Speaker B: You're much too kind. You're much.
[00:05:30] Speaker C: No, it's the truth.
It's the truth. And so when you think about the upcoming election as an example, people are thinking, okay, in America, am I going to vote for lower groceries or to Prevent World War 3?
What's your take on the fact that we're recording this before the election. Any perspective on how it's going to impact the financial sector by the time.
[00:05:54] Speaker A: This airs, it'll be after the election. So it's going to be interesting to have this discussion and then see what happens.
[00:06:00] Speaker B: That's a great question, guys. You know, you know, it's just, you know, I love this, this country, you know, where I live. I mean, I live in a beautiful area. I live in New England. I live on the seacoast, New Hampshire. So, you know, a little bit outside my door is the ocean. And so, so I'm very, very grateful. And, and I love this country and I've spent a lot of time in Canada too, and I love this country. And you know, the great question, I think, you know, this is, this is me. I mean, I, this is very corny, but I have, I kind of have my five Fs. Did I ever tell you my five S, guys?
[00:06:38] Speaker C: No, I don't believe you.
[00:06:39] Speaker A: You have.
[00:06:39] Speaker B: Okay, well, this is, I keep real simple, my 5s. And the most important thing is my faith is my most important thing in my life. Okay? My God, you know, in my, in my faith. Number two is my family, obviously, and number three is my friends. No one does anything without friends, okay?
And then the next thing is really physical fitness, you know, fitness, you know, and then last thing is finances. So that's kind of my hierarchy of needs, if you will. My maslow hierarchy of needs. So I think we're, you know, we're, we're in a. We're in. Not end times, but we could. I mean, my greatest concern right now is that we don't blow this whole place to smithereens when we look at, you know, what's going on in the Middle east right now. So that's really kind of my greatest concern, more so than anything. More than monetary. But in terms of the other concerns, if you look at the collapse of civilization throughout history, whether it be the Roman Empire, the Spanish Empire, the British Empire, the Ottoman Empire, and more importantly the Roman Empire, it's always because of excessive debt, too many wars and manipulation, the currency and rise of the big state, okay. Which we're pretty much seeing in the US and Canada.
Would we agree, gentlemen? Yeah.
[00:08:03] Speaker A: All day long there's some big state. All right. It makes me think of Anatomy of the State by Rothbard a little bit. And just, you know, the, you know, Nelson Nashi sent me this video of a guy named Mike Rosef talking about the state as an organization years and Years and years ago and it's resurfaces about once or twice a year for me and I go and rewatch it and I'm just like. Because the state is this thing that it isn't, it isn't an entity, it's, it's an enigma.
It's this, it's this thing that has its own. It's like an amoeba that runs through the world know and it's got this energy of oppressiveness attached to it that just kind of makes seemingly decisions that affects everyone's lives but you can't directly pinpoint to the one thing. But the one thing is the state.
[00:08:50] Speaker B: Yeah, so, so that's what we see. So you see in the US and Canada and obviously in the UK and in Europe and stuff like that and the deep state, whatever you want to call it, the elites. And so you know, so I'm concerned because you know I subscribe to all the media. I mean I give Bloomberg, the Times, you name it in the Financial Times, all the stuff, the Guardian, what have you and what amazes me how much the media really manipulates everything and as soon as the Harris was candid brought into the fold of this whole election. So I don't know what's going to happen guys but I think really, I think we have to get more into fundamentals, be more self reliant because you know the state's going to do what it's going to do and I think what you're, what you guys are preaching is more important than ever.
But I hope you know, but, but the problem we're seeing right now is massive inflation and but we may be seeing some turnout now. What's you guys are in Canada, what's the average price for a home in Toronto now? A million bucks or something like it was something ridiculous.
[00:10:00] Speaker A: It's, it's probably something like that. I in van Vancouver is in the top two or three most expensive real estate markets in the planet.
So I mean that should say something and it doesn't make a whole lot of sense and Toronto is way up there. I mean I think it's, I think a average home price in Vancouver is like 1.3 or 4 million or something like that. And that that's in factoring in like condos too. But if you want to get a detached home that's like a moderate, moderate home that probably was built in the 70s and needs a bunch of work, you're probably spending close to $2 million for that in Vancouver.
[00:10:31] Speaker B: Who can afford that?
[00:10:34] Speaker A: People that sold A house where they got 4 or $500,000 worth of equity that accumulated over 20 years and they're just going to move it into the next one. That's who can afford it.
[00:10:43] Speaker B: Yeah, that's going to do it. So the whole thing is. So you have the, you know, we have all this land, but there's no affordable housing. So. So I think really.
And eventually, I guess the best thing is really to look at history. John. It was. Mark Twain said, history may not repeat itself, but it sure runs. And boy, it does. And people say, well, the stock market always goes up, okay? That's what everyone, you know, I always say, well, no, it doesn't. I said, I said, well, what do you mean? They said, let's look at Japan.
Let's look at Japan, folks. Let's look at the rule book. Okay? So in the 1980s, you know, the land, I think in Tokyo was valued more than the entire state of California, okay. And the land in Japan was four times the wealth in the U.S. okay, I'm not making this stuff up. Actually, it's going to be in another book I'm doing called Guaranteed Income, which is.
And actually it cost over a million dollars to join a golf club in the 1980s, okay. Because of the massive money printing and massive inflation, which they learned really from all the U.S. business schools after World War II.
So we had just had. So the Nikkei, or the Nikkei 225, which is similar to the S P500, I don't know what you call the Canada. The index reached like a 38,000, whatever, 1989.
And then all of a sudden, holy, it all crashed. And then it remained in the seller, guys, for it just passed the nikkei. It took 30 years, 30 years for it to get back where it was now. And the reason was because of the massive inflation. Now the problem is the poor Japanese, the regular Japanese folks over there right now, because the devaluation of the currency, you know, people can't afford meat or anything like that. And it's, it's.
So they have a real, real problem with it. And so I'm saying, if you don't think it's going to happen, folks, Japan, Japan is one of the biggest economies in the world. You know, same thing could happen. Canada, same thing could happen in the US So I think really the whole thing is really important is people to realize that, yes, it can happen, and it does happen. Yeah. You know, and it started in Rome and it just happened. Japan. It's just the people don't now you guys read. The problem is people don't read books anymore.
[00:13:22] Speaker C: So. True.
[00:13:23] Speaker B: Well speaking of Richard J. Said, what do you think? I mean people don't read, do they?
[00:13:30] Speaker C: No, they don't. They don't.
[00:13:33] Speaker A: There's, there's, I think, you know, I think that for our listening audience we tend to attract readers. Probably part of that's because of all the books on Jason's bookshelf in the background there. And Jason's got a book recommendation, he sends like the entire team a book like every year at Christmas time. He's like this is what you need to read this year. But I think that. And we have released a few of our own books as well. Of course our most recent one being Don't Spread the Wealth About Keeping wealth in the Family and go to dontspreadwealth.com but your new book, the Retirement Ruse Barry, this, this is a, this is a, a modern. Not that it's a more updated look at the same kind of shenanigans that you've been writing about in the pirates of Manhattan 1 and 2 and the stuff in the back door meetings that's happening that's impacting the everyday citizen. So walk us through a little bit about stock buybacks and you know, what's going on with cryptocurrencies and things and how that's destroying American savings. I mean how is that taking place truly?
[00:14:33] Speaker B: And it's happening now. The whole thing is stock back buybacks, believe it or not the discoveries in Canada, they're not totally and illegal in the UK but they flourish in the United States.
And actually roughly about 50% of all the stock purchasing that goes on today is not food retail investors. It's actually companies buying back their own stock.
And which is which I kind of freaked out and actually there's some guys out of Texas real investment advice and they did some calculations and if you took off the stock buy buybacks out of the market the constantly went out only went up about 3%. So it was kind of frightening. So all this risk and you know, so if you took out the buybacks the market really went nowhere. So but, so why, why do, why does, why is that now? And it's huge. And someone like Apple, I mean, and I mean, I mean I love my Apple iPhones and stuff. I have, I'm a big Apple user.
But Apple has repurchased close to three quarters of a trillion, not a billion, three quarters of a trillion of its own stock.
And why do they do that? Because most executive compensation is Based upon stocks, the share prices.
And so by buying shares outstanding, you reduce inherent value the rest of the shares. In other words, say we have 100 shares or something and we use. Instead of putting money into, back into the company or into new products or into better employee benefits or to new types of innovation, instead of putting money into which is a better long term organic growth. If we buy, we take our company treasury money and we reduce the amount of shares outstanding. And our compensation is based on stocks. Our compensation goes way up.
There's like magic, this manipulation. Now the irony of the whole thing, guys, it doesn't always work.
Shocker, you know, okay, okay. Greater Swiss spent 13 billion and they went bankrupt.
Lehman Brothers spent 2.7 billion buying their stock before they went bankrupt in 2008.
Citigroup, that's another story. Shitty group, okay? They spent, I don't know, it's, it, it's just a phenomenal, I mean what they did and JP Morgan, all these banks have spent all these money and actually the stock has gone backwards.
So yes, a lot of times it does go up, okay, but it doesn't always work. GE or Government Electric, okay, which has been disbig around the world, okay. I mean it was the largest, it was the largest industrialized company in the world in 2000. It had a $500 billion market cap when it was going down the tubes in 2016, 17, they spent 20, 30 billion buy back their shares and the stock went down. Yeah.
So the whole thing is that these are the things which are happening and it affects everyone's savings. Okay? So instead of, you know, for people having a better, you know, employer, the executives are more concerned about, you know, increasing their compensation. And I guess maybe if I was a CEO, whatever, I probably want to do that step too. But I'm saying is that, but it hurts really. The average, your average listener. And so I mean, you know, it makes sense.
[00:18:11] Speaker C: Makes perfect sense. And that's what I think you do such a great job of exposing is what's happening at that level. The average retail investor really doesn't possess the awareness or the knowledge of understanding all that goes on behind the curtain that could manipulate a company's stock price. And they think about buying stock as maybe conversations around the water cooler or hype that is going on in the marketplace around one particular company. And people are flooding in to buy stock. Whereas the truth is most people just don't possess the emotional degree of intelligence to own stock. Because when the stock price fluctuates, that human condition kicks in, you know, we used to use the analogy that the human condition is that people, they buy high and then the stock market price or the market declines, the stock price declines, they sell low and then they repeat that cycle until they're broke and.
[00:19:27] Speaker A: They complain about it the whole time, wondering what happened and wondering where all their money went.
[00:19:33] Speaker B: Yeah. And this is, I don't know how bad it is in Canada. I mean luckily and I actually go through the world league tables by the way and actually you're better than us. Okay. You know where can the now Mercer out of Australia. They do a study every year on world league tables. Who's the best and who's the worst. And unfortunately Canada, your number. And you know where Canada is in the, in the, in the, in the top 25. How many guys have any guesses?
[00:20:09] Speaker A: I'm gonna give it 11.
[00:20:15] Speaker B: Richard, you're right, spot on. Number 12. Okay. Switzerland is number 11. Okay.
But this is the whole, this is, this is the, this is, this is in the US we're number 22 in the top 25. So we, we know how to build bombs and, and you know, weapons, mass weapons destruction. Okay. But we can't build a retirement plan. Actually the best place if you really.
[00:20:37] Speaker A: Want, you could build one that's going to be destroyed though. So that's kind of in alignment.
[00:20:42] Speaker B: And you know the irony of the whole thing, you know who has one of the best retirement systems in the world is Israel. Wow. They're number four or five. Really the best retirement system. The Netherlands, Iceland, Denmark, Israel, Australia a down under a. You know but the, so, so one of the things is that it's a real problem because of this whole speculation going on and so actually Canada is better than the U.S. but, but the regular people are really kind of in the same boat. I think if you're a government employee you work for like the Alberta Investment Authority or you work for the, you know, the omers, the Ontario Municipal Employees or the Case Depot, you know, big, big Quebec pension plan. If you're a government employee, you're fine.
If you're a regular person you're going to be really hurting. So I think what you, what you're showing people to do is be more self reliant is awesome because the state's not going to bail you out in the end.
[00:21:51] Speaker C: Very true.
[00:21:52] Speaker B: If you're very rich, you're cool. If you're a government employee, you know, you really don't have a lot to worry about. But if you rail most people you got, you got to really be self.
[00:22:01] Speaker C: Reliant and so what's the, what's the primary message that you want the reader to take away from this latest book that you've written, Barry?
[00:22:10] Speaker B: Well, it's an irony. This is kind of an appetizer. Now the reason why I did this book is because I had this massive book, it was like a thousand pages. And, and I, the reason why I wanted, it's kind of an act like an appetizer because I really wanted people to be aware of the problems which really affects their savings. Am I making. Because, you know, so much of this comes from, you know, other people's money. I. E. Like Fidelity is really big in Canada. Am I correct?
[00:22:39] Speaker C: Yes.
[00:22:40] Speaker B: Yeah. Okay. So it's, it's really. So I, I show like Fidelity. Like, but you know, find some of these disasters like actually the funny. Actually they were involved in the latest one, the leverage buy out of Twitter and they marked down that investment by like I think no matter if I'm pretty. A matter of fact I would about 75 cents down. And it's for every dollar they invested, marked it down by 75 cents. So my point is that Fidelity is not, they're not using their money, they're using other people's money.
[00:23:13] Speaker C: That's right.
[00:23:14] Speaker B: And so money's so fungible, you know, if it's in, you know, if it's in the Canadian mutual fund or American mutual fund, they're pretty much the same.
So my point is you have no control of it. And so what I'm just showing. And so what I did is I detailed all this stuff.
The thing is with you, I think, you know, if you ordered some of this through, you've ordered these books in both room, which is really the best thing to do because bloody Canada, their postage rates might. Holy moly. I mean it's just, it's like I can ship something cheaper to Australia than I can to Canada.
And it's true, you know. Yeah. You know, so, you know, so if you want to. But, but so they actually will be coming up with the ebook too. But so, so the whole point is really is people to be more reliant and then, and to build their, their retirement plans and more life insurance and annuity based products. That's the finance and that's the fundamental. Now what I hint to, and I'll get into this in the next book is that all the really good retirement plans in throughout the world, they're all annuity based.
[00:24:27] Speaker A: Or I think what you're saying is that there's, there's a signal to mirror and model what already works, rather than trying to reinvent the wheel the way that we've been trying to do it. Is that kind of the takeaway?
[00:24:39] Speaker B: You got it, man. You nailed it. Yeah. And that's the whole thing. It's just that. And there's real beauty and simplicity, you know, because Leonard da Vinci said, you know, the ultimate beauty is in simplicity.
[00:24:51] Speaker A: And when you think about simplicity, there's something that comes up that for I think a lot of people, even for myself wouldn't, I wouldn't classify as simplicity. And that is the cryptocurrency market. Now, you wrote your first couple of books, pirates of Manhattan 1 and 2 and so forth, prior to the rise of what is now known as the cryptocurrency market. And it's come in like a flash in the pan and it's had some great runs and people have made a lot of money. People lost. It's really been a wealth transition transfer, wealth transfer of wealth transfer. And the end result is usually the big, big people have ended up with the big money anyway. So from your perspective, as you were doing the research for this book and some of the details that you have in the book, what, how do you view through your experience, Barry, the, the, the advent of these markets and what they've done to the North American consumer.
[00:25:44] Speaker B: You need to think about, when you really think about, for any, any currency, what do you call the Canadian loony or the American dollar or whatever it is, it really has to be backed by the state. There has to be some uniform standards.
Otherwise it's considered. I think otherwise it's creating money out of thin air. I'm not that the central banks don't do that now, but they do. But at least with the central bank currency, at least there's some system of weights of measure, an honest system of weights. Does that make sense? But with crypto, it's like, hey, I can create my own deal out of thin air. And so I'm not. We have digital currency now through transfers and stuff like that. But the fact of the matter is, it is, it's another way to manipulate people's savings now, because when Sam Bankman Fried set up that thing up in the Bahamas, I mean, you got 1.8 billion of venture capital. I mean, from some pretty smart people, by the way, theoretically smart, I guess. I don't think they've looked at the balance sheet. Oh, yeah. So here's some of the people who put money into it. I got this all, by the way. I get this all from the public filings. Blackstone Group, Gisele Bundchen, Tom Brady.
Actually I think some Canadians put money in there.
[00:27:12] Speaker C: Devin. Okay.
[00:27:15] Speaker B: Oh geez.
Don't get me going about him, man. He said oh yeah, no you go jeez, don't get me going on him. He so cryptocurrency they stink. And then when he gave when bank and freeing gave him 50 million bucks. I bet these guys and legit. I don't think so. Yeah. So Cameron O'Leary, thank you and but no. So we have all the. We have all these, you know, people investing 1.8 billion into the company and they convince 8 or 9 billion of retail savers money to put into this stuff. It's vaporized. Now there was something which came up this week in the courts that I think they're going to be able to get $230 million back from the.
But that's me. We're, we're shy. I mean that's 230 million.
[00:28:08] Speaker A: Won't the trustee and the bankruptcy people need to get a big chun chunk of that before it gets to any filters down.
[00:28:13] Speaker C: Although get about 20% of it.
[00:28:15] Speaker B: About a third. Yep. Actually a third. It's roughly about a third. Matter of fact, I don't know if you guys remember this but honestly before your time. There's a guy named Alan Stanford Financial.
I don't know if you remember him. He was in 2008. That'll be before you kind of. Well actually one of the biggest brokers was of this. He sold these like fake CDs.
And this is all true. And actually this is in the back of this book because I kind of concluded with that is that he sold these fake CDs out of the Caribbean bank and additional banks like TD bank and hsbc and all these banks were big sellers of it. It took 13, 14 years guys to settle this thing.
[00:28:57] Speaker A: Wow.
[00:28:58] Speaker B: Okay. It was just settled last, last February. TD Bank Toronto Dominion, okay was the biggest broker of this stuff. They paid like 1.2 billion. I, I can give you the exact figures but make a long story short. 7. 8 billion was lost. They only recovered 2.7 billion out of the 7 or 8 billion which was invested with Stanford. But the lawyers got a third of that.
So. So the whole thing is that. So what you're doing folks, you know, is, you know is Will Rogers said I'm not so concerned about the return on my money, but the return of my money. And so this is a problem we face in the US and Canada all the time. And so we have this gambling stuff. Well, all these very theoretically supposedly smart people, you know, all these Blackstone and all these, you know, Willoughby Capital, Thomas Bravo, big private equity firm. I said, did they even look at this guy's balance sheet? But anyhow, so that's necessity here there, so that's done. And so, so and that was the biggest one. And then irony, there's another one.
Thank you for bringing up guys. There was another one Celsius Network, which, this involves old Canada, you know. So actually the guy actually runs, ran this private firm called West Cap Capital. He actually has a house from about b from here. Okay. He has this big compound, right.
And he, he invested was their money, 400 million in the Canad, the Quebec pension plan into Celsius Network. And guess what happened to them?
Bankrupt. What do you call it? Administration, what do you call it? Administrative act in Canada.
[00:30:50] Speaker A: Yeah, they basically took it over or whatever, but not to, to do nothing. It's basically kaput.
[00:30:56] Speaker B: So those are the two biggest ones and they went bankrupt.
But you know, because of lobbying, you know, and the lobbying on Bay street or Wall street, whatever, they become more legitimate and you know, but now they're part of the, they were lobbed by ETFs in January of this year. And so now we're going to see more of them, you know, so it's just so you have to be even as you have to be even more firm in your message to people because then, you know, Bay Street, Wall Street, City of London, they're all in the paper, you know, you know, they're all being paid off.
[00:31:33] Speaker C: Well, we just recorded an episode before, you know, this one with yourself, Barry and Rich and I were describing why life insurance carriers, but you know, particularly, you know, mutual life companies that sell in place, you know, dividend paying whole life insurance contracts, why these carriers are the Fort Knox of finance and why they are the most financially solvent institutions on the planet.
And if you think of everything that's transpired just over the past century and more with the Spanish flu, the Great Depression, all the economic recessions, the tech bubble bursting, the COVID pandemic, the list goes on and on, the savings and loan crisis, we could talk about these calamities all day long. And yet these life insurance companies continue to be the most financially solvent institutions. There's got to be a reason for that, which we explained in the episode.
But we don't have clients that call us and say we're really frustrated that our cash values keep rising every day. It's really bothering us.
[00:32:40] Speaker B: Yeah, and, but the thing is, but you hit a great point, Jason and Richard, you got to use mutuals and fraternals. Okay?
Anything with, you know, and this is a really major concern of mine which will be coming out. Major concern of mine is private equity getting involved into the life space and heavily, you know, it's a real huge concern. And we mentioned it before, you know, one of the biggest asset managers actually in your own, in the world is actually Brookfield out of Toronto. And that's a real huge concern of mine because what they're doing is they're buying companies like they bought American national, which is a big family owned, very well run company by the way.
And I did business with them actually probably about 25 years, 30 years and. But Brookfield bought them and what they're doing is they're doing what's island, they're the headquarters off of Bermuda and, and the Cayman Islands and what have you and all these other tax ships. And so it's going to be really, it's gonna, this is not going to end well because they're using the assets from the company, you know, to, to show up their balance sheet for a lot of the commercial real estate.
You know, and so I'm not making this up. And I've actually got some other, you know, third party research. So, so what you're doing with mutualism. Yeah, you know, it's, and, you know, you know, well, capitalized companies, you have to do it. Mutual fraternities. Now, I don't know how big fraternals are in Canada, but there are some of them. There are some.
[00:34:14] Speaker C: There are a few. Yeah, there are a few. And we were sharing in that previous episode that, you know, we don't know of any other deposit taking institution that is subjected to as much capital adequacy testing as a life insurance company is.
And so if you know that they're, and again, speaking particularly to mutually owned and fraternal organizations that are subjected to this, these mock adverse scenarios where their money pools are exposed to these adverse scenarios to stress test their, the insurance company's capital adequacy and they pass with flying colors year in and year out, then it shouldn't surprise anybody that these companies are producing a divisible surplus each and every year because it's an engineered outcome.
[00:35:14] Speaker B: And so, yeah, it's very, very safe. And the thing is that I don't know if you guys researches it all, but I have. But investment banks go down all the time, unfortunately. And the biggest one, which was the fifth largest investment bank in the country was Drexel Burnham and Lambert in Los Angeles in 1989, which was insolvent and it caused the collapse of Executive Life. It was a really. It was the biggest junk bond thing when, again, that's what I'm saying. You get to stick with mutuals or fraternals. So Drexel caused a collapse of Executive Life, but I didn't realize. But researching that Drexel Burnham Lindette was offering a 96% borrowed money, which is crazy. Whereas a dumb mutual company. Yeah, maybe, you know, but they're very safe, you know, So I did. But this is. Yeah, and this is. And this is what caused Lehman Brothers, and this is what causes so many other collapses of over leverage. And. But they can't do this with the mutual or, you know, a fraternal Life company.
Very true.
[00:36:33] Speaker A: The, you know, thing you mentioned about the private equity in like Brookfield and how they're trying to gobble up and scoop up things. And there's been a number. I mean, last time we had, we on, we talked about a mutual who'd been acquired. I think it was Northwestern or something at the time when we spoke last. But there's also private equities are also going after the distribution force. And they're, oh, huge things like IMOs and MGAs that are, that are what, you know, like life licensed individuals and financial advisors contract through so that they can be able to access these many.
[00:37:05] Speaker B: Companies, which I find very frightening. As a matter of fact, I was actually invited to, you know, because of the books I've written. And, you know, and I was not bigger producer, but I have been pretty big, you know, with some. Several companies. And I almost, I almost signed an agreement. And then I said, but who really owns this? And they said, I think it's private equity. I said, we don't need to talk no more. I said, and I'm not doing any business with you. I said, I won't do it. Yeah. You know, because I just know of all the, you know, the bankruptcies and the over leverage and the problems of too much debt. If you look at what's really wrong with society today, it's too much debt and manipulation of the currency. Okay. And private equities. The whole business is built upon debt. I was actually invited to, you know, because of the books I've written and, you know, and I was not bigger producer, but I have been pretty big, you know, with some. Several companies. And I almost, I almost signed an agreement. And then I asked it, but who really owns this and they said, I think it's private equity. I said we don't need to talk no more. I said, and I'm not doing any business with you. I said I won't do it. Yeah, you know, because I just know of all the, you know, the bankruptcies and the over leverage and the problems of too much debt. If you look at what's really wrong with society today, it's too much debt and manipulation of the currency, okay? And private equities. The whole business is built upon debt and over leverage, okay. And I'm not, I'm not against business debt or good debt, okay? For reduce income or purchase a home like that.
But this, these guys are crazy.
And people say, well give me an example. Well, let's talk one Mutual Sears that was essentially, you know, that was a huge leverage buyout and with, I don't know, uk so if a pension goes into insolvency in Canada, what happens deserve. Is there a branch of the, is there a government entity which bails out a failed pension?
[00:39:09] Speaker C: Oh, I'm sure there is. I, yeah, I know that, you know, outside of you mentioned Sears, I mean this has happened to a number of companies. Didn't the same thing happen with Kmart and Consumers Distributing here in Canada? Rich, you know, there were hundreds of locations across the country and they couldn't compete in the marketplace. When Walmart started to make its entry into Canada and private equity got involved and then they put a figurehead in, someone that they named CEO and three months later the business was gone. It was fully liquidated and gone. And so it happens all the time.
[00:39:54] Speaker B: But the irony of the whole thing is all these guys made all this money on Sears, which was essentially one of the largest retailers in the world for a number of years and then they went bankrupt and they dumped.
I'll give you the exact figures that's going to be in the book. But I don't know, somewhere 90,000 people failed pension plan onto the, what's called the Pension Benefit Guarantee Corporation, which is the insurance group which basically the government backed.
[00:40:20] Speaker A: We're going to save you to what degree we can and it's going to become a public liability that adds to the back of every tax paying citizen.
[00:40:29] Speaker B: Yeah. And so what it does, unfortunately then it just infects the rest of the pool for everyone else. So it, it's certainly, you know, hey, things happen, guys, you know, we don't know. I mean there are legitimate business reasons for them closing. Whatever. I'm not saying this but these guys made a shitload of money. Okay. And then it went into bankruptcy, 90,000 people. And the thing is it, it discourages pensions and retirement wellbeing for everyone else. So, so this is the kind of thing which we're seeing in private equity now. And you know, there's, there's actually a term for, it's called pension dumping. And so I haven't seen it in Canada. Thank God. You guys dodged a bullet on that one. But this, it's been obviously a problem in the UK as well.
So for instance, remember, did you have Toys R Us? Oh yeah, yeah. Oh yeah. You know, so now there was no pension plan in the U.S. so if you had a savings plan 401k, you're kind of, you're, you're out of luck. But it was a actually defined benefit pension plan in the uk and so you know, the UK authority, it's called a pension protection fund, had bail amount. So I think, you know, for your listeners there, if you, if, you know, when you, when people get it, that insurance companies are really one of the places to warehouse your wealth.
You know, I think that you have to really emphasize that it has to be with a mutual fraternal company because the, the problem is now some of these are getting really big guy Brookfield and Apollo Global Management and you know, you know, Blackstone and, and the Carlisle Group and kkr, they're all buying the insurance companies now as their new piggy bank. So it, this will not end well.
[00:42:14] Speaker A: You may find this interesting and probably already know to some degree. Barry, I had a, we had a great interview, a podcast episode. We'll, we'll try to link to that in the, in the description with an actuary with one of the leading mutual companies in Canada here. And he previously had worked for one of the large stock companies in Canada. And I asked him some questions and we talked a little bit from his words around what was the boardroom meetings like at the new company at the mutual versus at the stock company. And he said he was dumbfounded in the first number of meetings. How they just went around the table talking about how they were looking out for and trying to do things to improve their clients lives.
He's like, you would never hear a discussion like that at the old company.
[00:42:58] Speaker B: Yeah, yeah, it's a totally different mindset. You know it's, and you know, it's, it's a totally different mindset. I remember, you know, I think I did, I said I was in a movie, the Baby Boomer Dilemma.
No, I'm in a docking movie called Baby it's about retirement income and I'm in it with some of the top economists in the country and stuff like that. And I, I was kind of edited out of it because of the people didn't want to get sued by Bloomberg. But anyway, that's another story. But I was, I was in the movie and I got a lot of people in the movie. But one of the, the, the things which I learned, some of the advisors, one guy said well, you know, and I talked him off the camera. I said, I said why don't you believe mutual companies? Well, the mute he said the mutuals don't pay anything to people. You know, I mean the, but you know, he said they, but the private equity companies paid me a lot, you know, to speak. You know, it's like, how can you do that? But in any event, so I think what you're saying is really. Yeah, you get paid less, but I think you're getting a lot more visit, you treat people right, work out, you.
[00:44:03] Speaker C: Know, all day long. And the, one of the things that we share with the general public in, in the content that we create is when you take into account that in Canada, for example, so the, the cash value of a participating whole life policy is contractually guaranteed to match the death benefit by age 100 of the life insured. And it's age 121 in the United States.
[00:44:35] Speaker B: Yep.
[00:44:37] Speaker C: Who do you want to be in a 121 year relationship with? A stock company or a mutual company?
[00:44:45] Speaker B: Not with Wall street man or Bay street man.
They're so bad. I mean it's just when you take.
[00:44:53] Speaker C: When you actually evaluate the financials of one company versus the other, a mutual versus a stock company, you quickly come to realize if you know how to do some simple math and you can go back and really take a look at it, how much of that capital is being paid out to stockholders who understandably so they have an expectation of profit versus how much capital is being deployed by that mutual company that is not being paid out to stockholders.
You carry that out over 121 year timeframe. It's not going to take you long to decide who you want to be in a 121 year relationship with.
[00:45:41] Speaker B: Yeah, yeah, you guys said it better than I did. And yeah, so I just know just the, I just know that I know how the sausages are made, you know, and it's, and it's just like, you know, it's just, you know, it's like I've done with some of some very boring the midwestern companies and people like that, who really they were, how are they really care. And, and then you deal with, if you deal with Wall street, it's just.
And it's. They don't really care.
I mean, is it. I mean, it's just. I don't know. Have you seen that. This new HBO special, which I've just seen bits and pieces of it industry. I don't know if you've seen that.
[00:46:26] Speaker C: I haven't, no.
[00:46:27] Speaker B: No. It's kind of like it's about a fictional investment bank in London that's called purepoint, in which it could be, you know, it could have been JP Morgan or Morgan Stanley, whatever, but it's fictional. But it's, it's spot on because of the research. I'm saying these guys really know what's going on, you know, and, and the whole thing is that the, and when you understand it's in the, you know, how the sausages are made. And you see this. When I'm saying this, this fictional TV story, I said it's pretty accurate. And, and so, but if you look at, you know, but it's been a mutual company, they're pretty boring, whatever, but they have integrity, which is, I think, is everything at the end of the day.
[00:47:15] Speaker C: It sure is. And again, I cannot emphasize enough to anybody who's listening or viewing. Just head on over to wherever, I'm sure, Barry, wherever people buy books.
[00:47:28] Speaker B: But I, I be honest with you, I only. I have. This has been a soft release. I haven't even really officially released it yet. I just saw it off the website and I haven't even put on Amazon yet. And just go to barryjamesdyke.com There you go. And if you want to get something, do it through Canada. I mean, well, I will be coming to ebook, but yeah, and get it.
It's really important because people's money, they're. They're just gambling with other people's money. And people don't really understand what's really going on, do they?
[00:48:12] Speaker C: But once they do, their eyes get opened.
[00:48:18] Speaker B: Well, that's why we need guys like you, you know.
[00:48:21] Speaker A: Thank you.
Well, we appreciate you, Barry, for, for giving us a look through your incredible work and your research, your tireless research and putting it in a way where people can see the truth, what's behind the curtain in the financial sector. In the newest book, the Retirement Ruse, you're uncovering what the ruse is so that people can have a cold, hard look at it for themselves. And doesn't matter where you live. In the world. I think they can get value from this, Canada and us most definitely.
All of these companies in this global financial situation is interconnected. And we saw that very clearly in 2008 in the meltdown, the degree to which we were interconnected. And it's these backroom deals happening at, you know, on golf courses and high level boardrooms that why you might not think it has a direct impact on your passive income and how you think about your, you know, later years in life. There's a good chance it does. And the only way that you can stand that test of time is to take control back at the you and me level, build your own warehouse of wealth and get crystal clear on how you're controlling your behavior and your money where it belongs. It should belong with you, not with anyone else.
[00:49:37] Speaker C: And be sure to visit barryjamesdyke.com again, that's barryjamesdyke.Com we'll include the link in the show notes. And if you're watching this on the youtubes, you just saw another video that showed up. And the reason that we encourage you to continue your journey of learning is because there's no such thing as having arrived in knowledge. And so that's why we always recommend that you continue to watch, watch that next video. Barry, this was incredible. We're going to have you back again and we're going to continue to encourage people to read everything that you've written because it's going to open their eyes up to a whole new financial world. So, Barry, this was a real pleasure. Thank you for being with us.
