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. Grow your mindset and your net worth at the same time.
[00:00:36] Speaker B: Well, welcome to wealth on Main Street. We're super excited to be joined by a very special guest man who's written a book that outlines you don't need a bull or a bear to build wealth, and Wall street can take a long walk off a short balance sheet. So without further ado, I want to welcome my dear friend, my colleague, who wrote the book titled wealth without Wall Street, Mr. John McGuire. John, welcome to the show.
[00:01:01] Speaker C: Thank you, Jason. Nice to see you, Richard. Thank you for having me.
[00:01:04] Speaker A: Yeah, excited to have you here, John. Unfortunately, Jason has a copy of the book with him. I don't have a copy of the book with me, but I know when I saw the title, I had a lot of amazing things go through my mind because we have some colleagues that have a podcast with a similar name. And we recently rebranded our podcast to wealth on Main street, but it formerly was Wealthy Without Bay Street. And so Bay street being Canadian, Wall street is just kind of interesting how the similarities are, and obviously we think a lot alike in relation to how we want to go out and help the general public. So excited and really inspired by the book, and we'd love to hear. John, what. What was it that actually drove you to writing this book?
[00:01:42] Speaker C: Well, I've been the business now 25 years, and I was. I was. I was a Bay street advisor for 17 years.
[00:01:49] Speaker A: And I'm sorry to hear that, but we won't hold that against you.
[00:01:53] Speaker C: But I left. I saw the light, and it just, you know, it's one of those aha moments where putting on my suit and my tie, looking in the mirror, and just not feeling good about what I was doing, I felt that I was no longer servicing my clients with the best possible advice. I realized that I was servicing my employer and I was building my retirement plan and the retirement plan for my employer.
You know, we talk about, you know, accumulate, accumulate, accumulate, so you can get this incredible account of money that you could retire on. But what I was really doing was I was helping to build mine because, you know, as a traditional advisor, we charge a fee, you know, generally around 1%. And so the more assets that I accumulated, I was helping to strengthen my balance sheet for when I one day was going to sell my book of business.
And it just got To a point in my life where I just, I couldn't do this anymore. I had to be really honest with myself and spoke to some people within my firm. I sold my book of business and I decided that I was going to go against the grain and I was really going to teach people how to play the game of money and teach them that you don't need the help of a financial advisor charging you a 1% fee. You don't need to be taking all the risk and giving 2/3 away. So I decided to write a book and let the world know that it's not really that difficult if you follow a few simple rules. So it took me about four years to write this and I'm really proud of what, what was the end result of it.
[00:03:47] Speaker B: It's not easy writing a book and so credit to you for doing that and thank you again for a copy of the book. And I read that book on, on a flight home from Toronto back to Edmonton and John and I had occasion to meet through a mutual colleague in the United States, Caleb Williams, at his and Asset Mastermind event. And John and I got acquainted very quickly and decided to stay in touch with one another. And this is sort of what led to our conversation here today. We connect periodically and just share a really, really good conversation. And that's what great colleagues in an industry do is, you know, iron sharpens iron. And John, much like Rich, like, much like the colleagues that you know, we most love to hang out with, he's very abundant minded and just loves to embrace best practices, share best practices. And so for anybody watching and listening, you know, we would first of all wholeheartedly encourage you to get your hands on a copy of this book and just add it to your wealth building library. And if there was a key insight that you really want the reader to grasp because we were having this discussion, John the other day where he said, you know, I think I'm probably going to put in like a, like a post it note or something that just says look, when you pick up the book, I'd love for you to start here. So where is that in the book and what's the key message that you want readers to, to grasp quickly?
[00:05:16] Speaker C: That's a really, that's a really good question.
I would say if I was to pinpoint something and put a sticky note in, I would probably start with the five laws of money.
[00:05:30] Speaker B: Okay.
[00:05:32] Speaker C: You know, there, the way I look at there, there's five laws.
You, if you don't understand these laws and it's really simple Five laws of money is number one is money comes increasingly to those who save at least 10%. At least.
My theory is you should be trying to save 20%. And I have a moniker, it's live 50, 30, 20.
You live on 50%. 50% of your income should go to your fixed expenses, which is your needs.
30% is to lifestyle and wants and 20% goes to your savings and investments.
But if you can't save 20%, because you know, I get a lot of people are living paycheck to paycheck, they're living hand to mouth.
But if you can't save 20 bucks a month, the thinking is, oh, I'm going to save more when I earn more. That never happens because you and I both know, and we're in the business that we watch lifestyle creep. As we earn more money, we upgrade our car, we upgrade our home, we upgrade our lifestyle, and you still can't save 20 bucks a month.
So if you can just save, start off, you know, make, make it a goal. I, I say start off at 5%, start up at 3% and maybe every quarter increase it by 1%.
You know, I always say if, if you gather little wins, they equal big wins.
So start small, but build yourself up to getting to that 20%.
Another law of money would be money leaves those who don't respect it.
[00:07:23] Speaker B: Very true.
[00:07:24] Speaker C: You need to respect money. Don't be buying stupid things. I'd call it consumerism, right?
Another law of money would be don't give it away to scammers and tricksters.
So people always promising high rates of returns. You know, buy crypto, buy this, you know, put this money in, I'm going to get you double your money.
This doesn't work. Anyone who's going to tell you they're going to double their money, it's not a true investment, right?
Another law of money would be stay like invest in what? You know, we talk about investor DNA. Invest in what? You know, Derek Gunderson is really good for talking about this investor DNA. Invest in what? You know, Warren Buffett follows this to a T.
He does not invest in anything that he does not understand.
And you go back to the dot com days, people, you know, when, when the dot com industry was booming, he didn't, he didn't invest in it because he says, I don't understand this. I'm going to invest in what I know. And he's got two rules of money. And you know what those rules are? Rule number one, never lose money. Rule number two, don't forget rule Number one, never lose money. So, you know, I would start off with just learning, understanding rules of money, how the money game works.
[00:08:50] Speaker B: Well, this reminds me of the. One of the things that the late John Savage often said he would. He would describe how when he sat down with somebody, you would draw two circles. And if you just envision this in your mind's eye for people who are listening, you would draw two circles next to one another. And inside the first circle you would draw and depict a group of people who save first and then spend what's left over. And then he would depict the second group of people who spend first and then save what's left over. So he named a group one, Group two, and he said those folks in group two always end up working for the folks in group number one.
[00:09:34] Speaker C: Love it.
[00:09:35] Speaker B: So it's just so true because it's all about habits. Think about any aspect of your life, right? Like if the three of us said we are going to be much more physically fit a year from today, well, the human brain has no idea what to do with that. But if we say we are all going to burn a pound of fat and gain one inch of muscle around our chest and shoulders each month for the next 12 months, well, the human brain knows how to get going on making that real. But you've got to develop the habits to get there. And one thing I mentioned to John when we had breakfast recently is that, you know, people are just already a hundred percent disciplined in their own set of habits. And so if you're, if you're recommending something to someone like save, start there. Start by saving first, spending what's left over.
What habit do you think you can realistically develop so you can become 100% disciplined in it, irrespective of what the percentage is or the dollar amount it's developing the habit. That's what's going to transform you.
[00:10:41] Speaker C: And I always tell my clients, pay yourself first before you pay anybody, before you pay your mortgage, before you pay your rent, before you pay the IRS or the cra. Pay yourself first because if you pay yourself first, you'll never go broke.
[00:10:57] Speaker A: It reminds me when you talk about investor DNA, of something that the late R. Nelson Nash would say. And he said that an investment was only or should only be in something you know a great deal about. Everything else, he would repeat, everything else is speculation.
And that's why he invested in land and forestry. And because he was trained as a forester, he understood that. He understood the dynamics of real estate and land in the path of Development something that he can, and he was willing to wait long time frames. You know, another thing that comes up for me as you're sharing some of this, John, is, you know, we talk about habits and paying yourself first. I know for me, the way that I choose to pay myself first is I pay premium. For me, dividend paying, whole life insurance premium is a, is a forced savings mechanism where I'm guaranteeing that as I pay that premium, I'm paying myself and my family first. And I'm also making a mental commitment that my family is more important than everyone else because I care about them and protecting them through the virtue of insurance on myself, on my wife and my two children. That to me there's a mental component that goes along with making that decision about where our value lies, where our value system lies. So it goes a little bit above and beyond personally for me than just paying yourself. That's just one area where I choose to do that in. And many of our clients follow suit.
[00:12:16] Speaker C: In that degree, you know, like yourself. I have several policies, not as many as you, but the way I'd set up my bank accounts is I have a general account where all of my income comes into. I have a separate account nicknamed Me, and the first 20% right away comes out and goes into me. Then I have another account nicknamed cra and I estimate my taxes and I fill that account with cra. Then I have my general account and I have my lifestyle come out of that. I have my fixed expenses all come out of that.
And I've been able to accumulate a ton of cash inside this. And once I get a ton of cash, I throw it into premium. I do annual premium, so I get a chunk and as soon as I annual premium, I've got the money already to dump into it, you know, so I don't keep my money in a bank for very long. It goes into premium, it goes into a life insurance company.
[00:13:14] Speaker B: I love that. And in addition to what you both described, so rich, you may know this. So one of our late mentors, Bob Shields, so he wrote the book titled you don't have to die to win.
And it wasn't long before his passing that he said, you know, one of the things that I share with people is that my perspective is one of the best ways to save money is to repay policy loans.
And I just thought, A, I had never heard that before and B, it got me thinking by rethinking my thinking.
And he was so right. And much like yourself, John, you would agree, like we are all the Sum parts of everyone who's mentored us and who has helped us along the way. And so when you think about a mentor, someone special who's really helped you in your journey, what was the domino that tipped over? How did you meet your mentor, and what impact did that mentor have on your life? And what advice would you give listeners and viewers around the advantages of being coachable and being mentored?
[00:14:24] Speaker C: That's a really great question, and thanks for the question.
I remember how I met my mentor, Trent Fortner.
A lot of advisors in the business know who he is. He's based out of Nashville. He's an incredible mentor. He knows the business in and out. It's not just understanding the life insurance business. It's understanding how to deal with people and asking the right questions and finding the money. Because I'm all about plugging your financial leaks. That's what really the book is about, is plugging your financial leaks and learning how to be more efficient with your dollars.
Right? And when you know how to plug these leaks, you don't have to take a lot of risk.
You can reduce the amount of risk you take if you know how to find plug these leaks and then redispose that money into areas where you'd be more efficient with it. So I was able to meet my mentor because probably about 10 years ago, the insurance MGA that I was with was bought out by a much larger one. And they had the annual conference and they were announcing the number one advisor that year for the firm. And I decided that I was going to go up to this guy and I was going to ask him to take him to lunch. And he agreed to go to lunch. And I basically said, why are you number one? First thing he said to me, do you have a mentor or coach? I was like, no, I don't. He said, well, you need to get one.
If you don't have a mentor, you need someone that's going to get you to number one. And I said, well, who's your mentor? He said, trent Fortner. I said, I would love an introduction. He gave me the introduction. And that was 10 years ago. And. And I've been working with Trent ever since. And I honestly, I owe a big portion of finishing this book to Trent because about two years ago, we were on a coaching call, and I actually started this book about four years ago, just prior to Covid. And I probably got to about 13,000 words. Covid hit, and I got really busy, like, stupid busy. Because not only am I in the insurance business of being advisor, I'M also in the mortgage business and I have a real estate license. So as you know, real estate took off. So I was incredibly busy selling real estate, buying real estate, doing mortgages, and I kind of forgot about the whole book. And then one day, two years ago, on a coaching call, he says, he goes, how's the book coming? And I said, I haven't written a word in two years. Like, why? I said, how do people find the time? Like, really? Like I am so busy. Like, how do guys like Garrett and Ed Mylett and Andy Frisella with the guys with all these companies, how are they able to write books? He says, well, a lot of times they have ghostwriters. But let me ask you a question. Is it in your calendar? I said, no. He goes, well, that's your problem right there.
If it's not in your calendar, it's not going to get done. And I, you know, I thought about that for a second. I'm like, you're absolutely right. I literally got off my coaching call and at that time I was probably getting up around 6am I thought, when is the best time to write? It's got to be in the morning time. Because all of us, once we start our day, the emails, the phone calls, there's no time. We have family, we have commitments, we have business, there's no time to write a book. So I thought, I'm going to write every morning from 5am till 7am So I started waking up at 4:30 and I had an alarm in my phone 5am when that thing went off, whatever I was doing, I dropped it and for two hours I wrote. And then in probably nine months, I was able to go from 13,000 words to 87,000 words and I completed the book.
[00:18:28] Speaker B: So congratulations.
[00:18:30] Speaker C: I contribute a lot of me finishing that book to Trent for one, keeping me accountable and two, showing me a better way that, you know, if, if you want to get something done, it's got to be in your calendar. So for anyone listening, all your listeners out there, I highly recommend a mentor. And it doesn't matter in what business you were doing.
You know the number one golfer in the world, Scotty Scheffler, you better believe this guy's got a mentor. He's got a swing coach. After he wins a tour, he's on the range working with his coach. You might think, well, why would, why would someone who's number one in the world have to work with a mentor to stay number one?
So I, I totally believe in having coaching and having mentorship. If you Want to get to the top and stay at the top of your game.
[00:19:21] Speaker B: Love that. Absolutely love it.
Very well said.
[00:19:25] Speaker A: Yeah, absolutely. I mean, there's so many golden nuggets there. And, you know, for, for everyone listening, it's not, it's not about your financial life, but all those lessons are directly applicable to your financial life. It's really applicable to any area of your. Of your life, an area that you want to work on. I. I find, you know, John, and maybe you've experienced this, that the people that, you know, we serve or that we meet along the road of life, they are choosing what to prioritize at that time. Something that's gotten away, something that's ever present, something that's distracting them. And what tends to happen for many people, and it's certainly not all, but for many is their finances often take a back burner to some other crisis that's taking place in life and they think, I'll get back to it or we'll work back on it again. And the result is they usually don't start working on it again until that thing starts to get to a crisis level itself, and then they pivot from crisis to crisis. Have you experienced that in the people you serve?
[00:20:22] Speaker C: Oh, absolutely.
I've. I've gotten people reaching out to me, booking calls with me that they've. They ran into so much debt and they don't know how to get out of it. And it's like, well, you know, why didn't you take care of this two years ago or six months ago? Why do you wait to a point where you know you've got creditors coming after you, you've missed payments on your credit bureau, your credit bureau shot. You've. You've ruined it.
Why didn't you come and seek my help or anybody's help if you know there's a problem? I think a lot of people, it's pride, number one. I think pride gets in the way. Two, I would say they don't know where to turn.
They don't know who to ask. And that's the big reason why I wrote this book, is to get it out there to let people know that there's a better way of doing things.
You don't need to be afraid to ask someone, but if you're in trouble, ask for help before it's too late.
[00:21:27] Speaker B: 100%. And, John, you may not be aware of this, but many years ago when.
So one of the catalysts for me in investigating the life insurance space was as a registered insolvency counselor And I was meeting with families and through the conversation with families who were really struggling with debt, and they were contemplating whether it was filing an assignment in bankruptcy or a consumer proposal or working out some form of repayment plan, you know, with creditors. One of the questions that I would often ask, and I wasn't licensed in the industry at the time, at all, and I would ask the question, like, God forbid, if one of you passed away, how is the surviving spouse going to go on living? Do you have any form of life insurance? And the answer was repeatedly, no, no, no, no, no. And so that sort of triggered, well, why don't we serve these people by providing that solution to them and doing it as fast as we can. Because you're stressed out enough in life without having to deal with the weight of financial pressure on your shoulders where you can't make ends meet. And it drives a wedge in between couples. It ruins families and marriages. And so asking for help is just so important.
And not waiting until you're already underneath the surface. It's long before that to say, look, I feel like I'm sinking here. I need to ask for help to prevent me from going under. And it's just again, finding the right who's that can help you get that how done. And, you know, reading books like John's and educating yourself, with the advent now of having ready access to YouTube and to Google and so many resources to learn from, there's no shortage of opportunity to learn. And when you describe, you know, people who get to the top of their game and they want to stay at the top of their game, it's, it's often, at least I've found in my humble, you know, 17 years in this industry when I was going through this journey and I began to, to achieve really, really good financial success and, and then doing that again and again and again and again and becoming number one and then staying number one, and then nine years later, you're still number one.
I realized that it wasn't the money that I was after.
It just wasn't. I achieved complete cash confidence, and it wasn't the money that I was pursuing. And it was a coach credit to my coach, Dan Sullivan, of Strategic Coach, who helped me to rethink my thinking around that. He's like, you're in this constant pursuit of going from here to there and then going from the new here to the new there, and you're just in this constant climb and pursuit, and you just don't realize it's not the money that you're after.
It's the freedom of time, freedom of purpose. It's freedom of relationships.
It's freedom that you're pursuing. And he was just so right. And so I just share that anytime I speak with a colleague in the industry who has got a great Runway and is achieving great things and is going to go on to do amazing things, I just always try to share that story because we are blessed to earn a very good living doing what we're doing in serving the people. And you can become a Deca millionaire a few times over, but you can sacrifice a lot of other things along the way, and it's just super important to be mindful of that.
[00:25:15] Speaker C: When we talk about waiting too long or being too late to the game to ask for help, it reminds me of.
It's a joke. And it's probably not, you know, maybe a good time right now with what's going on with Florida and periods, you know, with all this flooding, but it reminds me of a joke I heard where, you know, a lot of this rain came. And this man is sitting. He gets up into the roof of his house and he prays to God. God, please send. Please save me. Please save me. Please save me. You know, Guy on a boat goes by and says, hey, mister, you want some help? No, no, no, it's okay. God's going to save me, okay? He leaves. A few hours later, you know, the water's rising. Guy on a boat comes by. He says, hey, mister, come on. You need some help? The water is rising. You need to come with me. No, no, no, no. God's gonna save me. And the third guy comes by the following day, and the water's right up to this house, and Guy says, come on, man. You better get in this boat. You're gonna drown. No, no, God's gonna save me. And he leaves, and the water rises, the guy drowns, and he gets to heaven. He says, God, what happened? I asked you. I spent my life serving you, and I asked for some you to save me. He says, what are you, stupid? I sent you three boats.
Wait, if you see that first boat, get in it. Yeah, that's your. That's your life raft.
[00:26:49] Speaker B: Oh, that's so good.
[00:26:50] Speaker A: Well, you know, it's interesting, John, you talked about your experience in your. Your previous part of the industry, you know, working on Bay street and the things that you learned and saw there and kind of the. Almost like the taste that it left you with in your mouth to some degree, thinking about, you know, what you're doing presently. The book being able to Share your story with us and our listeners. How you're serving people today.
What are some of the, like, differences, the dichotomy between, you know, the old world that you were in and how you were being trained or taught to serve people there versus the things that you've kind of learned, you know, on your journey now, and also, like, with good mentorship, like with Trent and so on. So how would you compare those things? I guess just from your vantage point.
[00:27:35] Speaker C: For our listeners, that's a really great question and I have a perfect response.
I was taught that there are three types of money you have. Your savings and investments, lifestyle money, and transferred money.
And if you sit with any traditional advisor for the first time, the first area of money that they're going to go to and try and talk about is your savings and investments and the money that you currently are saving.
And the first thing they're going to show you is, hey, you know, what kind of rates and returns have you been getting? And they're going to try and sell you on getting you higher rates of returns because that's generally what they do. And I know this because I did that for 17 years. Oh, you know, you're only getting 6%. I can get you nine or 10 over here, you know, with a properly structured coefficient ratio portfolio. And we're going to invest this and that. I'm going to get you a 9, 10% and I'm going to show you the history of it.
Okay, great. But what if you don't have a lot of savings and investments?
The next place that the advisor is going to look at is your lifestyle money. So I say to my clients, how much time do you want to spend with an advisor showing you how to take more risk in your portfolio? Because really, what is risk? The risk is the probability of losing everything. And the way I equate risk is to increase your chances of winning, you also have to increase your chances of losing. Is that a strategy that you want to implement? And like, no. Okay, so we don't want to spend time taking more risk. Okay, so now the next area of money that the advisor is going to look at is your lifestyle money. How much time do you want to spend with an advisor showing you how to reduce your lifestyle so that you can put more money up into your future lifestyle? And they always say, I don't want to spend any time reducing my lifestyle.
At that point, the meeting is over, they walk away. You're not a good fit for them. But there's that other part of money that they Forgot about which after leaving that world and working with guys like Trent and Don Blanton from Money Tracks, we focus on transferred money, and that's the money that you were losing unknowingly and unnecessary. So when I focus on that, I say, Mr. Client, how much time do you want to spend working with an advisor showing where you are losing money unknowingly and unnecessarily? And, like, I want to spend all my time focusing on that area of money, Boom, I just got a client.
Because now when I start focusing on where you're losing the money, it's unknowing. Because a lot of people don't understand just in how they pay for things, where they're transferring money away. They may have 401ks or RSPs or TFSAs, and they're losing money inside the portfolio just by MERs with mutual funds.
Well, what if they're paying a high rate of tax? Maybe they're an employee of some place and they can actually be a consultant. So instead of being taxed and then deducting your expenses from what's left over, how about if you were to deduct all your expenses and pay tax on what's left over that's being consultant? So maybe we can reduce your tax bill. We say the client, what's the largest line item on your tax return? It's line 150 is my how much tax I pay. Well, if I can reduce that. Actually, to reduce that. If I could show you how to reduce, say, credit card fees. If I could show you how to reduce fees on your mutual funds and just on how you're investing things. If I can find the money, would you save it? And I'm like, yeah. I'm like, well, I don't want you to save all of it. What if you save two thirds of it and you spend the other third? You contribute that to lifestyle. Because my theory is, yes, we need to put away and we have to think about creating this future lifestyle. But shouldn't the journey along the way be a fun one, too?
[00:31:42] Speaker B: Oh, yeah.
[00:31:44] Speaker C: So get out of this whole scarcity mindset, because that is what traditional advisors want you to do. Save, save, save. Put as much money way into an RSP, put as much money you can into TFSAs. You know, live through scarcity just to get to retirement one day and you find out, oh, I've got a million dollars. Great. Well, guess what? You can't spend it all because for fear of running out, you can only live on 4%. So while you've been accustomed to living on, say, 80 or $100,000 throughout your lifetime, and your advisor told you, save 20% and put it away. Now you live on 4%. So you went from 80 to 100,000. Now you're living on 40 grand a year, and after tax, you're at 36 or 35,000.
Now you got to live through scarcity again.
So the question that you ask is, what have I learned as I've. I've learned not to focus on building large retirement accounts, build large retirement cash flow, buy assets that are going to produce cash flow, learn how to be more efficient with the money, learn how to plug your financial leaks, focus on transferred money. Because if I could focus on the transferred money and reduce your mer. So many times I sat with clients that are being billed a 1% fee on their portfolio or they're paying 2.6% on a mutual fund. I said, why are you in this mutual fund? You understand what the objectivity of a portfolio manager is to do is to outperform the indices. So if you buying an equity, a Canadian equity, his total objective is to outperform the indices. So why don't you just buy the indices in an ETF and pay 0.2%, own the whole indices, and I guarantee 87% of time you're going to outperform that fund manager. You're paying him 2.6%.
[00:33:29] Speaker A: Very true.
[00:33:30] Speaker B: And you're paying 2.4% on the account balance, not just the gain.
Something that's super important that people don't, they don't conceptualize. It's like, oh, okay, well, if I put in 100k and I gained 25, I'm paying 2.4% on the $25,000 gain. No, you're not.
It's assets under management, not gains under management.
[00:33:56] Speaker C: Right. And people, people think that, you know, the portfolio managers are doing such a great job. 87% of fund managers fail to outperform the indices. That means only 13% are actually beating the indices in any given year. And it doesn't mean that they're going to do it in the year after and the year after or the after. So my question is, I say to my clients, would you tip the waiter who just peed in your soup?
No.
So why are you paying these guys these fees for bad advice, bad performance? Stop paying. The waiter just peed in your soup. Get rid of it. Buy the indices or buy a bond index, pay 0.2% and now just put all that money back into your pocket.
[00:34:44] Speaker B: I'M not ordering soup anytime you and I go out.
And what we're talking about here, folks, again, is John's book titled Wealth Without Wall Street. Again, that's wealth without Wall Street. We'll include links on how you can get your hands on a copy.
You'd be well served to do it. And you know, John, this is something that comes up on our program where again, it just speaks to this, just this old way of going about things. And people make comments like, why do you have folks on the show that are in the same business that you're in? Because we can't serve everybody.
It's ridiculously simple. And when we get to connect with folks who have a collaborative mindset, who recognize that when you begin to think collaboratively and you stop thinking competitively, collaboration opportunities begin to appear everywhere. John's been kind enough on a number of occasions, hey, I've got a prospect out in this part of the country not equipped to serve this person there. Can one of your team members handle it? And we get together, we share best practices. Why am I sharing this with our viewers and listeners? Because regardless of what industry you're in, collaboration trumps competition all day long. And you've heard the expression rich and John, you've heard people say, oh, when I, you know, choose a mastermind or I choose a group that I want to go and learn from, I don't want to be the smartest person in the room. I want to be in a room where everyone gets smarter. And that's why I love to collaborate with like minded colleagues. And so that's what, you know, brings special guests like John to our program.
[00:36:28] Speaker C: Because I had you on my podcast. Yeah, that long ago. It's, you know, people, you know, someone said, well, why would you have a guy in the insurance business on your podcast? You're in the same business. Because I learned from him too. We, we collaborate together. There's no competition.
[00:36:43] Speaker B: That's right.
[00:36:44] Speaker C: There's so many people out there that are underserved, that are getting fed so much misinformation by banks that we need to create an army to get the message out there that the advice that you're getting from these banks and traditional advisors most often than not is the wrong kind of advice.
I dare you to test me on this. Go to any city, anywhere in Canada, anywhere in the US and you look for the tallest, most beautiful buildings. Who were they owned by?
Banks.
[00:37:19] Speaker B: Yep.
[00:37:20] Speaker A: They must know something.
[00:37:24] Speaker C: Is it funny though, how banks own over $200 billion of whole life insurance, but they don't sell it to you and they don't recommend it to you.
[00:37:35] Speaker B: Isn't that interesting?
Isn't that interesting?
[00:37:39] Speaker C: Bank owned life insurance. Yeah. But they won't talk to you about it. Why?
Because they don't make money. They got their own products to sell you. They've got their mutual fund to sell.
[00:37:52] Speaker A: You know, as a, as also a mortgage professional, John, you will certainly relate to this. And I'll, I'll, I'll take you back to 1999. I was buying a property, my, my second rental property with my parents. At the time I just turned 18. And we got the mortgage documents and we were high fiving and bumping chests about how excited we were that we got, the rates just went down and we got a mortgage. 25 year amortization. At the time for rental property you couldn't get 30 years back then and it was 6.97%. And we were like, hallelujah, this is the, like, are they even going to let us out of the building with this interest rate? Oh my God. You know, we thought we were pulling one over on these guys. And I remember going to the documents and I looked at the purchase contract and everything else and the mortgage documents were three times thicker than everything else to do with the purchase when you're at the lawyer's office. So I actually, and I don't really like reading really boring documents, but I was tremendously curious. I actually read through it and I looked at like the payout penalties and all these things. And then I went and said, okay, well what does this really mean? And I went and created, I wouldn't figure out how to create an amortization chart. And I'm looking at this thing and I'm like, oh my God, like look at this interest column. This is bonkers. I said we're in the wrong business. We shouldn't be buying this real estate. We need to get into what these guys are. This is the racket. And ever since that day, I always thought, somehow, some way I'm going to figure out how I'm going to become the bank. That's where the real action is. And then I learned like, oh, I could do private lending with registered accounts and I could take my RSP and I could become a mortgage holder on a second mortgage.
[00:39:21] Speaker C: That's it.
[00:39:22] Speaker A: That must be the solution. And then lo and behold, it wasn't until many years later, almost a decade later, that I finally got the book Becoming your own banker realized, oh, wait a second, this is what I was looking for. The Whole time. And so I just think it's interesting that if you just take a moment and consider what is really going on behind the curtain. What are banks actually doing and why is it working so well? They have a business model. They're in the business like making money like anyone else, but it's all about turning the inventory. The problem is the inventory is your money. They don't even own the inventory. You own it and they're turning your inventory around and around and around and collecting a spread on every single transaction. That's an extremely powerful business model.
[00:40:06] Speaker C: Well, if you think if you deposit $1,000 into the bank, what is that rate that they're going to pay you? 0.01%, but they're going to take $900 and they're going to lend that out at 8, 9, 10%. Or maybe they walk it down to the visa department and they lend it out at 20%.
They only need to keep 10% on deposit and they perpetuate this over and over and over again.
If you were to come into the bank and I just deposit $1,000 and you came into the bank and you needed a thousand dollar loan or a $900 loan, they're going to take $900 of my money and they're going to lend it to you at 8%. And then you're going to go purchase something and then that person who received your check, he's going to go into the bank and he's deposited $900.
And then Jason goes in and he borrows $810. And this perpetuates and perpetuates and perpetuates at 8, 9 and 10% while they're paying you 0.01. This is. People understand what fractional reserve banking is. This is it, folks.
They know how to create velocity out of money.
And so all I do is I talk about this in my book, is you need to learn how to double your money. The money game is about how many times can I double my money? I teach the rule of 72. The rule of 72. We all know this, but there's a lot of your listeners who don't know the rule of 72. If I was to take a sum of money and I put into an investment, whatever that earns, if it's an 8% rate of return, it's going to take nine years without putting another dollar in before it doubles, right? So we want to get as many doubling effects as possible.
So I put a chart in my book and I asked this question And I love asking this question. If I was to give you a penny a day, if I was giving you a penny and that penny doubled the day for 30 days, what would you take? Would you take $1 million today or the penny a day doubled every single day for 30 days? Too many people said, I'll take the million bucks today because what they heard the penny right. But what people don't know is that penny that doubled every Single day after 30 days is how much? $5.3 million. And if there's 31 days in that calendar, it's $10.6 million. But what if I started, if I started on day 16, there's only 160 bucks in the account.
So you want to get as many doubling effects. So that's the game of money. Start early, invest early, and try and double your money as many times as possible. And this is what the banks do. They create velocity. They don't hold on to it, then they'll save it. But what do the banks talk to you about doing?
Save and put. Do dollar cost averaging. Give us your money on an ongoing basis. We want to hang on to it for as long as possible and then give it back to you as little as possible.
[00:43:17] Speaker A: Yeah, we want to restrict your access. We want to do exactly with your money what we're telling you not to do.
[00:43:23] Speaker C: Right. So do the opposite of what the banks tell you to do. And this is, I talk about this in my book. Whatever they tell you to do, you do the opposite and you will create money. And this is what I love about whole life insurance is with the cash value, there is an opportunity to arbitrage. I was just listening to a podcast this morning at the gym with Caleb Williams and Devin Burr.
And Devin says, I do a lot of private investing. Like he's got $40 million worth of death benefit and he funds it with like 700,000 bucks a year. And he says, every time I get a couple million bucks in, I do private lending at 15%. I work with developers.
I'm paying 8% on a policy loan, but I'm getting 15. I'm arbitrage 7%.
This is what banks do. This is infinite banking, folks.
Right? Becoming your own bank, not having to apply for loans. I just did a loan, a policy loan for a client of mine. He bought a piece of property in Puerto Rico and he expected his company to have some cash. He's owed a whole bunch of cash that didn't come in. He needs 275,000 bucks. Called me up. He says, hey, John, what's my cash value at? And I gave him the number. He said, oh, I only need 275. I said, no problem. One piece of paper. I sent him a piece of paper. I said, can you please sign this policy number? Here's 275. Sign it. Ten business days, money's in your account, no questions asked. Well, what happened to my money? Your money is still there. With the insurance company growing and compounding. We didn't touch your money, but we use the insurance company's money as a collateral against the cash value. You're using their money? Well, when do I gotta pay it back? Whenever you want. It's a private loan.
Didn't go on your credit bureau.
[00:45:21] Speaker B: Imagine having that discussion at the corner bank.
[00:45:24] Speaker C: How many banks, how many places do you know that you could go and get a $275,000 loan on a piece of paper and not ever have to pay it back?
And I tell him, you want to be the honest banker? If you're going to be the banker, be an honest banker. He said, oh, no problem. Once this money lands in my account that I'm expecting, I'm going to pay this thing off, but I need something right away. It's like it's there for his use.
Like, I don't know anything else out there. Any other financial tool that allows you to dump money into a premium deposit, get a dividend of anywhere between say, six and six and a quarter percent, get full access to it without penalties, without paying tax on it.
If I die, there's a massive multiple that my family is going to get versus the amount of premium that put in.
And I can get to use this throughout my retirement and not pay tax on this.
There is no other financial tool out there.
[00:46:35] Speaker B: Well, on that note, Rich, well, you.
[00:46:39] Speaker A: May not know it, John, but when you wrote the book, you haven't obviously heard from every single person that's read it, but most definitely people are going to go through it and they're going to, they're going to start looking at you as though you've been wearing a cape this whole time. So our question for you, John, is who do you most want to be a hero to?
[00:46:57] Speaker C: My son, my 13 year old. I've got him reading my book now.
[00:47:05] Speaker B: How's he making out with that? Because you told me that when we went for breakfast there a couple weeks ago.
[00:47:10] Speaker C: Yeah, he's on page 70. So I have a rule in my home.
I have shared custody with my, with his mom. And when he's in my home, when you get up on a weekend, you make your bed, you read for an hour, you practice your piano for an hour and then you get to game.
He loves, you know, 13 year olds, they like to get on these video games. So one day he says to me, dad, I finished reading my book. I said, well, why don't you go into my office and grab one of my books from my library. I mean you can see behind me, I've got a ton, I've got a ton of books. And just like you, Jason, I see behind and there's a ton of books we love to read. He says, dad, your books are boring. I said, okay, why don't you prep the book that daddy just wrote? Oh, that's even more boring. I said, let me tell you something, I guarantee you, if you pick up and you read my book, you will know more about money than half of Canada and half of the United States.
He said, really? I said, yes, because the stuff that you're going to learn in my book is not taught in schools. It's about money, how to win the money game. I'm going to teach you everything that you need to know that you will not learn in schools. So he's okay. So he grabbed my book and for an hour he's got to read. And one day I walked up and I said, how you doing? He says, dad, it's actually pretty good. He goes, a lot of stuff I don't understand but it's actually pretty good. I'm like, good. Continue reading. I want to report when you're done.
[00:48:40] Speaker B: Well, hey, for all the parents out there with 13 plus year old kids, get your hands on a copy of the book Wealth Without Wall Street. John, it was a pleasure and look forward to having you back and to being on your show and just continuing to educate the general public and doing it from a place of abundance, which is exactly what we ask people to embrace is a thought pattern and habits based transformation in abundance, not in scarcity. So John, thanks for being with us. It was a pleasure to have you. And for all of our viewers on the YouTubes, you just saw another video show up and there's a reason for that. There's no such thing as having arrived in knowledge. There's always something new to learn. We want you to continue that journey of learning. So we curated this next video especially for you. Well actually it wasn't us, it was YouTube's algorithm, but that's not the point. Watch the next video, continue your journey of learning and we'll look forward to seeing you on the next episode. Guys, this was a ton of fun.
[00:49:39] Speaker C: Thanks, Jason. Thanks, Richard.
