Latest / Wealth On Main Street / 215. Infinite Banking Concept After Age 55, Can I Do It?

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215. Infinite Banking Concept After Age 55, Can I Do It? · Wealth On Main Street

• 0:00
  Speaker A: You were listening to the wealth without Bay street podcast, a canadian guide to building dependable wealth. Join your host Richard Canfield and Jason Lowe as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future that you can bank on. Get our simple seven step guide to becoming your own banker. It's easy. Head over to Sevensteps CA and learn exactly the learning process required for you to implement this amazing strategy into your financial life. That's seven steps ca. So you want to know if the infinite banking concept will work for you. Picture this. You're approximately 57 years of age, or you're somewhere between 57 and 70. You've been scrolling around on YouTube or you got someone recommended you buy this book called becoming your own Banker. You've learned about this concept and you're interested in applying it to your own life and you want to know if it works for you. Well, we're going to talk about that today. We're going to go over some examples. I'm joined with my good friend Henry Wong, and we're going to show you how people in this stage of life are implementing this process. And we're also going to talk specifically about how people in this same phase of life are not able to. So you absolutely can implement this process at various ages of life. Even if you're on what we hear from people, they sometimes feel that they're in an older category. I think you're as old as you are and as young as you feel. But we also have a lot of questions where people, they learn about this and sometimes they get really enamored and excited about it. And absolutely, you should do that and you should continue your educational learning. But sometimes we don't have maybe the resources in place to be able to implement the concept yet. So we're going to talk a little bit about what are the things that you need to have in place to be able to implement this at later stages in life and how can that work for you? And then we're also going to talk about where maybe it might not be the best idea if you're at a later stage of life. And what are some of the criteria that we would be considering or that you yourself should consider if you find yourself in one of these age categories? So we hope it's going to be a lot of fun today. And Henry, I'm excited. We're going to, we're going to be looking at some, some slides. We're going to be looking at some graphs, some really cool, colorful graphs to kind of walk through some examples, even some, some income related examples. And overall, I think it's going to be a really great experience to help us understand the relevance of time. Time has a critical component to everything that we do financially. And in this case, the implementation of the infinite banking concept is no different. In fact, if anything, it may even be more impactful when we understand how time shows up in our life using this type of a model. So where should we begin, Henry? Where do we want to kick it off? We want to look at our sample person and kind of go from there.
• 2:50
  Speaker B: Yeah, I mean, the premise of all of this that we're going to dive into today is actually talking about the approach to retirement or building up that wealth in the location that you've built it in. And most of people who have gone through this many years of building it now, if you think about it, some are in that 57, 60 year old age range. And if we look at it now, that's actually 60 years ago or 1960. So they've actually gone through quite a bit of economic ups and downs, tax policy changes, interest rate changes. So they've actually lived quite through quite a bit of cycles in their lifetime. So they know what the experience of things are like. Now. The most common question that I will get from people around this age is, am I too late to start? You're absolutely not too late to start. It's all in your mindset. Like, my oldest client is 72. Richard, I don't know if you know, your oldest client.
• 3:57
  Speaker A: Presently is actually in their eighties, but when they started, they were right in their late sixties, approaching 70 at the time. And in fact, they have a policy that they got on their oldest, one of their oldest children, and that's what they're utilizing versus doing it on themselves, because that was what made sense at that time.
• 4:19
  Speaker B: Yeah. And so, like starting in, it doesn't actually matter too much when you start. We are using a particular product or vehicle, which is a life insurance tool. And traditionally, how people understand life insurance is if you're too late, it's not going to work for you. But we've got, we have, you know, times have changed. We've gotten a lot smarter, and we have a lot of ability to structure these policies in a very particular way to suit objectives. And this is really what we're going to dive into and talk about having this particular asset in your approach to retirement, if that is the word that we're going to use before I kind of dive into things. This part is particularly sensitive for me because when I was looking at how my parents were growing up and how they were told when they came to Canada to set money aside and build for that future or that long term plan of theirs, they were told to put it into traditional, I'll call it vehicles, traditional mainstream advice, qualified investment plans. So in Canada's TFSAs, RSPs, LiRas, pensions, Us is like 401 ks, Roth IRAs. So very similar concept that are qualified investment plans created by the government. And so that's kind of where they would build up their nest egg. So my parents built it up. In the RRSP, where you put money in, you'll get a tax deferral on getting a receipt or refund of income tax, first at the beginning, and then in the later years when you're going to draw it, you're going to pay taxes on getting money out of that location into your own hands. Now, my father and my mother built up a pretty sizable RRSP despite them being in their lower income tax bracket. And the taxes they were paying were around 15% to 20%. Now, after in the stages that we needed to use the money for their own reasons, to get the money out, they were paying 50% in taxes to get the level of income that they needed to get out. And that made absolutely no sense. And that really bothered me. So this is why I want to use that as sort of the explanation why this process, in thinking differently, is so important for retirement, not just to rely on the traditional financial system or all the advice you may hear from the traditional, I'll call financial entertainers. Their main job is to attract your money, to put it into that traditional system. Richard, anything you wanted to add to that?
• 7:07
  Speaker A: You cover this example, this personal story dealing with your parents in the book that we co wrote on keeping taxes away from your wealth. So we should put a link to that down below. And understanding that is very important because you yourself have lived this circumstance. And unfortunately, we don't know what we don't know. And often when we learn something, it's too late. And that sort of is the situation with your parents. And to a degree, even yourself being, you know, on the outside, trying to build and grow your own life and running some businesses and a career. And sure, you're very involved with your. With your parents to the best of your abilities, but you also had your own life to live and to run at the same time, so you, you could invest all of your energy into their circumstance, right? That's just not the way that our world operates. And similarly, the, the model of retirement that is promoted in Canada is, is the entire media machine, the financial industry machine, and even the accounting machine. The CPA world, to a large degree, is pigeonholing people down this primrose path, that if you utilize these magical tools that are invented by government bureaucrats that propose some magical way of giving you a tax benefit, and then the result is for many people, not everyone across the board, but for many, many people, they are going to be in a much higher tax situation when they go to take that money out. And one of the things that, it really bothers me, Henry, is the lack of control that we don't have on certain things. One thing we don't know is we don't know what day we're going to die. I certainly don't know. I do know on that day because I've learned. And prior to doing this kind of work, I didn't know. But one, once I started down this path, I began to realize every single thing that you own is considered sold on the day that you die. That includes your giant registered accounts, okay? And if you've earned, even if your tax free savings account has earned too much revenue, they'll come and claw that back, too, because they've already has, we already have court events that have indicated that happening. People who earn too much in returns in their TFSA, and they, they made it all taxable. So not even the thing that says it's tax free in Canada can be relied upon given that circumstance. So you're literally putting your money and your capital into a system where there's unknowns that you have. But there's also known the knowns are you're going to die. And the known is that there's going to be a big tax event. So do you want to place your money into a system that's going to augment that tax event, or do you want to diminish that tax event? And that's part of the mindset that we're talking about that you need to have when you go into this, this model. We can't fix the past. What we can do is we can take the knowledge that we get today and we can start making different decisions. And that's part of what we hope people are going to take away from this conversation.
• 10:03
  Speaker B: And actually, a lot of the inspiration in what I'm going to share, too, is coming from this book here. Warehouse of wealth. Building your warehouse of wealth from our Nelson Nash, actually our mentor. And he actually passed away at age 88. And his life started in 1931, and he passed away in 2019. So you can imagine from the history that he has experienced from the end of world War one, beginning of the Great Depression in the US, the confiscation of private property, gold and World War two and the Bretton woods agreements and all of those economic events, he's actually lived all of in that. And what was very eye opening, if you pick up a copy of the book and actually read it, there's a lot of really insightful wisdom that he shared in there. And if we kind of think of the problems that are existing, if you look at it, and Nelson actually said this, where all of the government programs are initiated under the guise of helping citizens when the real object is actually to control their lives. And he wrote this before he passed away. If you're living in Canada and you're actually paying attention to what's going on, I think we can agree there's an element of increased level of control in your lives and in the choices and decisions that you get to make where someone else is actually starting to make them for you.
• 11:33
  Speaker A: There's two components to that, Henry. It's not just an increased measure of control. It's at the same time a population's abdication of responsibility. So it's not. It's not just that there's one thing happening, it's that both things are happening in congruency, and that's allowing the gap to widen, in my opinion. And so I think people should be mindful and aware of that and try to find ways where they can take some of that control back. As Nelson Nash would say, to secede peacefully one step at a time, at your own decision making level about the environments which you want to operate, whether it's the health environment, the food that you eat, the money that you. How you earn your money, how you store your money, where you invest your money, these are all areas that you have direct and immediate control over. And you can secede from the environment that you don't like and position yourself into one that you do. And that's where that personal responsibility comes in again.
• 12:31
  Speaker B: Yeah. And what's important is through that amount of time now, we've gotten a good lens of how these qualified investment plans work or the pension systems and how they're all generally working out. And again, I'm just quoting from Nelson, from the book, is that there's always a hidden agenda that's actually never stated. And that one really caught my attention when he said that because Canadians and Americans will swallow that apparent immediate benefit, you have no idea. When I'm looking at certain forums and seeing things people love to put money into, let's say the RRSP or the 401K, because they get an immediate tax return. It's kind of like a bait that they've given you. They've hooked you in with some bait, but you don't realize the downstream effect of the consequence of what the tax event is. And then you see all these murmurs talking about, how do I get my money out of this cage, my money out of this cage without triggering too much tax? So they find themselves in a situation today where they're in too much tax, and then they defer the situation and hope that by deferring it, they don't have to worry about it. And the main thought to really just have listeners think about again, we'll dive into the details, is when we think about placing our capital or our resources or our money in a location, and one of that is actually sponsored or created by the government, one really honest answer here, and this is not to get political or anything, is when has the government ever done something? And this is the question that Nelson asked, when has the government ever done something and has been successful at it?
• 14:11
  Speaker A: It's interesting, the something you made really stirred me because I was on a conversation with somebody very recently, sole proprietor in BC. They run a great small business, husband and wife working together. Hes out in the field. Shes kind of doing the books and managing the schedule. And gross income is only about 100,000 a year for this small business. So after expenses, vehicle cost, expenses, et cetera, a little bit of equipment, not very much, theyre only left with maybe about 65,000. At the end of the day, when its all said and done, theyre going to pay tax on that. But because theyre sole proprietor, they have to pay the CPP confiscation, which weve done other content about. And the total tax bill ends up being roughly around $15 to $16,000 for these folks. Well, 33% of the tax bill is the confiscation for the government sponsored pension plan, where they keep moving the targets farther out. That's crazy. I mean, the total cost basis ends up being like 21 22%. But out of that total tax bill or tax paid because it's paid at the same time, it's just viewed as a tax. It's really a confiscation of money that's being sold as this future endeavor that's going to help you. Whereas had they just been able to take that five $6,000 and allocate it to some other beneficial area of their life. I mean, it would be a drastically different scenario, especially if they had access to that capital for the 1520 years of their working life.
• 15:36
  Speaker B: Exactly. And so the part now we'll talk about is just the visual model that I just wanted to share that people may be familiar with. So I'm just going to share my screen and we'll talk about here specifically that you see. And again, it's just a rough model illustration where the bottom down here you have the age, and then this blue line is that money that's being set aside, let's just call it discretionary, from the sense of using qualified investment plans, TFSA's, RSPs, Liras, I'm not going to talk too much about pensions and lira, sorry, but they're, because they're a little bit more complicated in a different framework. But what you're building up is building up that asset pool and you're accumulating it. And Richard, as you just already talked about or mentioned, this money has very much, first you believe it's your money, but it's not really your money because you don't have the control in that money because you've moved it to, it's been moved to another location that someone else has control over. And here's a really simple example. If money has been put into the RRSP, can you use that money to pay for your mortgage, make an advance payment for your mortgage? You can't. Can you use the RRSP without withdrawing it again for facing tax consequences, to use it to fund a vacation or do it use it for other reasons, you're restricted in the use and how you use it. Otherwise, you're going to pay the tax toll to get that money out. Otherwise, part of the collaboration is you're using, working with the financial institution. And if you purchase and use the money to purchase one of their approved investment products, now you don't pay any taxes for it, but it's essentially that money's capped or stuck inside the system of that qualified investment plan when you're building up that capital. And again, you have restricted use on how you use the capital because it's been defined by the location in which you put it in and you've reached the age, let's say it's 65 and you decide to retire. Now you're going down the mountain of drawing on that pool and it just goes down and down and down. And let's say your journey ends a little bit early. Well, whatever that amount that's still accumulated to keep things generally simple, but is actually quite fitting. Half of it's going to go to the government in the form of taxes, and then your family, if they're lucky, gets the other half. So this is kind of generally where people get that stage where, oh, I gotta have enough of a mountain and I'm just drawing it at a very particular pace so that I don't, you know, use up all my resources before I die. But there's still the issue of if you die too early, then half of it's gonna go away. So you're in a situation where it's actually like a no win for you. And what I wanna just spend this time talking about is rethinking the approach of the location of where it's been put, where your capital has been residing.
• 18:34
  Speaker A: And they typically, you know, the, the system will say oh, it's your accumulation phase years and your de accumulation phase years, which to me is a really stupid way of looking at it. It's the buildup and it's the destruction of. You just built something up and now you're tearing it down at the later stages of life. That's really what's happening. So again, again, I think language is really important. And when we call something more clearly based on what's happening, it gives people a better understanding of what's taking place. And so you spent a lifetime building something up and you're going to try to make it last while you tear it down as slowly as you can while still trying to maintain your lifestyle. And. Or for many people, they actually increase their lifestyle because they don't know what to do and they're not going to a job for 8 hours a day and they've got more time. And so they spend more money than they, than they're used to because they're not sure what to do with their day because they've lost purpose. So again, that ties back to mindset a little bit. Anyway, looking at the graph, it's important that we've got that build up and then we have the teardown component. Now, what's interesting about the graph that Henry has up here, we see a straight kind of, you know, that, that curve line building up and then the curve line going down. What you don't show is any market volatility in that line. And so this is the line as we anticipate it. As you build up and you get more, more history, more income, raises your, you know, maybe the kids finally move out, your mortgage is paid for, your cash flow increases, you can start putting more away, and hopefully that can build up as well. And everything works out perfectly when you look at it on a graph or a spreadsheet and you put an interest rate to it. But the reality is life is going to come around with a, you know, number one wood or a three wood golf club, and it's going to start smacking you around at various stages of that beautiful timeline called life. And every time it happens, if it's your money, usually it's your money that's getting kicked around. And so that's the thing that people really need to be mindful of, that you can't control those events. You can minimize them, but you can't control them.
• 20:40
  Speaker B: Absolutely. And so this is kind of where we're going to talk about a little bit of the phases, from accumulation to the destruction of the asset phase. The accumulation is really on the concept where we actually have, again, an asset that most people are not that familiar with. They're still learning about, which is a properly designed, participating whole life insurance policy. And then we're also using it to help practice the process of banking with it. That's the vehicle that we're using. And when it comes to just showing how ingrained in how much people rely on the commercial banking system, most people don't think about when they're placing the money with a third party institution, commercial bank, they're actually lending money to them. Now, Richard, if I went to you and you, sorry, if you came to me and asked to borrow money from me, I would, even though I really like you, Richard, I would still charge you a reasonable interest rate for that money because there's a cost to my capital. And what you're going to draw from your, what I'm going to lend you now. But oppositely, the commercial banking system has trained citizens to surrender their money into them to be deposited and then get pennies on interest on that money. And what people actually don't really know is that when money is deposited into that system, the commercial bank actually owes you money because it's, but it's an unsecured loan, so there's no collateral. They don't, they don't give you collateral. You don't have, and you get pennies on interest. Logically, it just makes absolutely no sense.
• 22:21
  Speaker A: Whereas, and quite, quite literally, they're giving you a paper IoU. If you receive paper statements, if you get digital statements, you're getting a digital IOU. That's really what it is. But it's, it's the equivalent of printed on paper. It's, if it's, if I wrote you a note on a piece of, you know, yellow pad and I hand it over, say, hey, don't worry, Henry here, I owe you this money. It's all good, bud, don't worry. That's essentially what's happening in the bank.
• 22:45
  Speaker B: Well, they have more advanced technology. They actually give you a printed receipt that tells you how much they owe you afterwards. So you've put money in and like, yes, you're used to not paying any interest because they're going to pay you nothing in interest. But I'm sure everyone understands when the money is put back into their system, they're going to go deploy that money for their own reasons and their own profit. Building objectives to build capital and profit. And, you know, you've given them the fuel for them to build profit and they don't even share the profit with you. The sense common sensory around that is not even present in most people's minds. So it's actually recognizing that there's an alternative, which is what Nelson teaches all of us to do, is to become your own banker. If you are your own banker and you are taking responsibility for your own resources, then you're taking the ability away from the banks to profit from the fuel that you're giving them. That's one thing. But you're also, you know, there's always, always a cost to something. If you're giving your money to the commercial bank, they're using your money to generate and earn income. But what if you put your money in your own banking system and now you have the ability to earn and build money if you choose to invest it with that, with your own money. So when you put your money to someone else, it's costing you the ability to use the money to earn something. So the main thing that we now just, I want to dive into is talking about this asset. So I've put together kind of a couple of scenarios with some for an individual now, obviously for educational and teaching purposes. Now, when I kind of have this discussion with a client of mine, I'm just going to use her name as angel. But the value in what I'm just showing you here is an example of some of the conversations that helped her rethink her approach to realize that, number one, she wants to become her own banker. And once she is decided in this accumulation phase, to become her own banker, to utilize it to advance her life further. Part of that equation includes retirement and having enough resources to draw from. But she didn't want to rely on these resources that were built up in the location of the traditional system, because while money's, well, she's built up all that money in that traditional system, she can't use that money for vacation without destroying the asset. She can't use the money without paying taxes. She can't use that money for buying cars. She can't use it for investments unless it's approved on the list, on the financial institution that they have. So there's a lot of limitations in what she didn't like in that traditional system, which is what appealed to her. In becoming your own banker. That's again, part of the longer term thinking that she's thinking about. So today she's directing her capital into her own system. And as she's accumulating it in her own system, she has needs to use it for, she's not restricted to it. And then when it comes down to the time that, let's say, she does decide to retire, by the way, she's 58 and she actually has no intention of retiring. But she's heard around the murmurs at the 65 year old timeframe where most people do. So she wants to be prepared in case she decides that, but that's not her intention. So she's building up that she's going to build the mountain a little bit further on that and then potentially draw on the mountain. But it's actually not going to be destroying the mountain, because the particular asset that we're using is a very special designed asset. It allows, you know, the only way money goes to in, because we're using a properly designed policy, you, it goes in through premiums. And then the insurance company has to fulfill their side of the contract and the guarantees, and they have to build. They're taking the premiums to start building. They're administrating all of the money and build cash value towards a contractual guarantee, which is that death benefit. And so this is what the insurance company is building. They're building using the premiums, building the cash value, and being the policy owner, you get the ability to borrow against that cash value while the insurance company keeps building it. You're not interrupting the compound. It's a different concept than the traditional bank. You put money in and you withdraw it, and you're interrupting the compounding along the way.
• 27:29
  Speaker A: Become your own banker and take back control over your financial life. Hey, is this even possible? You may be asking, can I even do this? Well, you better believe it. In fact, it's easy to get going. So easy that we've put together a free report. Seven simple steps to becoming your own banker. Download it right now, go to Sevensteps ca. That's seven steps ca. Now let's get back to the episode things that you identified. Henry is of course, angel here, being 58. She's at that right in that crux period of what we said at the beginning of our recording here. And she's planning for the retirement idea, but she's not actually looking at doing it the way society is telling her to. So she's got a longer term mindset in place and she intends to work longer, probably because she enjoys what she do. She does. She's probably good at it. She probably has an eye for maybe some longevity, and she's thinking about a future that's bigger than her past. So that's the mindset criteria where, hey, absolutely, this is going to work for her because she's bringing some things to the equation. She's bringing some income continuity, she's bringing some existing resources, and she's bringing a mindset that says, here's the things that important to her, she has a goal and a plan, and she's working with a coach to implement those things. Without that mindset piece, if she had all the same things, but she didn't have the mindset, this maybe wouldn't be the right path for her.
• 28:55
  Speaker B: Yeah, for sure. And like for her, she's in a pretty high level management position, earning a very sizable salary that gets taxed to the yin Yang of 50% plus. But she recognizes that her future and what she's really looking for in her next chapter of life is actually to start coaching and building a business there. She has quite a big skill set and she's actually building up her coaching business at the same time time. So that's part of the reason why as she's building up, she's building up another asset. So this asset, of course, is a financial tool that again, the insurance company bears the risk on providing that cash value. So it doesn't depend on the economic cycle of what's going on, on a recession, it doesn't depend on interest rates, it doesn't depend on taxation rates. Whatever happens, as long as angel is doing her job and providing the fuel, which is the premium, the cash values are going to be built to target towards that obligation of the death benefit that the insurance company owes her family when she passes away. So that cash value since is not dependent on any external circumstances, she's removed and what this term is called, volatility out of her wealth equation from that situation, there's no more exposure to volatility because the cash value only has one direction to go, which is up. It has to match the death benefit by age 100. So the conversation we have is talking about, you know, her obviously, first mindset. Thought is, am I too late to start? And I would tell angel, no, you're not too late. You're actually in a good place, well resourced. The only difference is that you've got to be ambitious, which she is. You've got to be realistic, which we are. You also got to be prudent, which is all built into the package of this process that we're using and the tool that we're putting together now. For the purposes of illustration, I kind of wanted to show a few things related to not her example, but just using a very good example mirrored off of her, of showing people that, you know, what if you started this process of building this asset, putting your fuel in, and I'm going to use 50,000, hers was actually higher than that, putting in starting at age 50. Here's kind of what the value of the asset projects to be. Now, why can I project this value for people to see? Now, our conversations are very rarely about squarely around the numbers. It's around the process. Do I want to put my money in the traditional system, where I have no clarity on the guarantee finishing value, or do I want to put it into a place where I have first a known number that is going to grow tax free on a legally binding arrangement, and then I have the ability and control to access and utilize it. So the first one I just wanted to share was the value of the asset by putting 50,000 in from age 50 all the way to 65. So a couple of things that I wanted to highlight. The blue, which you'll see in the bar graph, is the premiums funded, which is 50,000, then 100,000, then 150. So there's an accumulation all the way to age 65, which is $750,000. Now, in correspondence, that asset that is going to be used as collateral, which you can borrow against to use money to do things that you need to accomplish in your personal life without the same restrictions that the commercial banking system provides you or the traditional system, you can borrow against that cash value to use it and get further ahead. So during that accumulation stage, she's not restricted to keep the money in an investment or keep it into the account. She can use it for her goals and objectives. And part of those objectives, let's just say, is for investing in building her brand and her business. So those are some of those things. So what I've kind of showed is by age 65, as an example, starting at age 50 today and projecting it to 65, and you stop putting. So you have put in 750, the end target, by age 100, because of the mechanics of the policy, where the green line is, the death benefit must match. By age 100 is almost $5 million. So this vehicle is where you put 750 in, and with contractually, legally binding guarantees, grows to 5 million. If I look at this very logically, if I have this location where I can put 750 in, that will give me 5 million close to it. Is there another location that will offer me a different benefit or a better benefit than that.
• 33:52
  Speaker A: With the same quality and level of consistency and peace of mind? I mean, there's lots of things have the potential of doing that, but nothing has the clarity and conciseness of being able to produce it.
• 34:07
  Speaker B: Exactly. Whereas people can talk about instant gratification of stocks or real estate and you'll get these wonderful blip journeys. But we're just talking about a pool of capital or your family banking system that you're putting your money through and residing there to utilize. And it's going to do its job in growing to give you more capital in the future. Now, if we look at that 50 year old example again, I'm just showing at 51st, just to show, if you start earlier, kind of the impact of that, the 750, over that accumulation to 65, the cash value was $1 million and 40,000 or 60. Now, the next thing that I show is by age 66, no more capital goes in, but the cash value still goes up. And it went up $52,000. It may. For some, it may sound like a lot, for some it may not sound like a lot, but if I were to look at this in absolute perspectives, that if no more money went into this asset and the value of the asset went up $92,000 that I can actually tap into and use. That's a. That's a win for me, no matter how you slice it.
• 35:25
  Speaker A: So, to recap, we've got a person who started at 50. They put fifty k a year in for 15 years, which is 750,000 of cumulative deposits into a system. They've got an asset that's worth 1,040,000, a little over that. And in the following year, no new money went in. It was just money making money, or in this case, it was the cash value accumulating because of the obligation that it has by the insurance company to grow that asset to equal the eventual death benefit. So we went from 1,000,040 to 1,000,092, a little over. That's almost 1,000,093. So just shy of $53,000 of accumulation happened with no new money going in. That sounds like a pretty powerful system. That's like a machine or a business. That's just cash flowing every year without reinvesting in the business, just operating as.
• 36:20
  Speaker B: Is essentially, for many people, that's the dream asset that they're actually looking for. Now, the thing that does people do get lost with is when they hear whole life insurance. That's a sudden, sudden, like hit to the brain for most people, and they just have all these misconceptions or misunderstandings of it. But what they don't realize is there's a process to design it and engineer it. And the ways that it was probably designed before is not how it would, how we would use it in the circumstances of practicing the process of banking. And why you've got to work with the right authorized, infinite banking practitioner, because it's just different than the way that other professionals will do it.
• 37:01
  Speaker A: What's really interesting about this graph, it's a great graph, Henry, is what it doesn't show. So, Nelson Nash talks a lot about the seen versus the unseen. And just for our viewers, our listeners here, just to consider, so we can see that 750,000 went in over this timeframe. We have over a million dollar asset that's growing pretty effectively what happened over the previous 15 years, because they had access to capital and it wasn't locked away in a prison. How many cars did this 50 year old person need to buy and purchase and use for their family? How many vacations did they go on? What other investment opportunities came across their desk or business opportunities that they were able to jump on and take advantage of because they had ready access to capital by using the collateral of this policy and the insurance company's money that they co own. Those are all the unseen components they don't show in this graph. But if we could show them and add them in, we would probably see a lot better numbers here. And this person's gotten every single dollar back. If they've been following what we teach, following what Nelson teaches, they've probably bought three, maybe four cars, and they've gotten every single dollar back on those cars returned into the system so that they can repurpose that capital for ongoing future retirement needs.
• 38:13
  Speaker B: Now, let's walk through just a shift in time frame. So when you discover this concept is when you discover this concept. And then there's another part of when you start this concept. So let's look at the impact on the information. If the same variables were the same. Except the only thing that changed was starting five years later. Now, starting at age 55, the same 50 per year goes in premiums for this time. It's only ten years, because five years short. And let's just really look at this very, very clearly. So less money went in. Therefore, the asset at the end, by age 100, is only 2.5 million. I mean, only still a lot of money. But we can see it pretty much halved because of five years less time. Now, if we go to age 60, so another five years later, or ten years from the 50 year starting point, again, Angel's age was 58. So this is where part of the context is important, because, let's say, as the examples, 50,000 per year for five years is 250. The asset now is almost 15% of it, or like roughly 800,000, almost close to 800,000 now. So it's a lot less than what it was before 50 year old.
• 39:41
  Speaker A: I think it was about 4.9 million that we had at age 100 versus here we started at 60. So we're ten years late to the game. We still put in 50k, but we did it for less time, less years, and we had less years for it to grow. And now we have less than 800,000. So we went from 4.9 to less than 800,000. Hence the 15% that you're talking about. It's a huge impact, and that impact.
• 40:07
  Speaker B: Is really relevant, that is just to demonstrate the impact of time. But if we were to look at, on an individual perspective, where you are putting money in to the system of 250, and it still gives you almost more than three times the amount of money that you put in by age 100, it's still an obvious answer that I. I would still pursue doing or resigning my capital in this location versus a commercial bank. I'm sure we've been used to running more than 250,000 in the commercial bank, but I don't see the commercial bank, them offering me a check of 781,000 when I reach age 100. I have 100% certainty they are not going to do that. So you can't look at this result and say, oh, it's only three times the money compared to if I started ten years ago. It's significantly higher. It's not that type of comparison we're talking about. You're going to be in the situation that you start. But the choice that you make now obviously has a larger impact to your future based on what you do. So the key that I want to highlight is the choice that you make.
• 41:22
  Speaker A: This impact of time is important. But again, this also comes down to mindset. Does that 65 date really matter if someone's mindset is, well, I'm actually planning on going to 70, I have income continuity. Or if you're starting at 60, this process, and you're in a position where you hadn't built up or saved anything else, you have no other, quote unquote, retirement assets, and you're hoping that suddenly this process of infinite banking is going to solve all of that and it's going to make up for 40 years of not doing anything. Well, that's, that's not true and that's not realistic. So you, you can't go into this process, you know, expecting, you know, the Ferrari, but you're working with a Honda civic budget. That is not an appropriate way of considering it. This isn't a magic pill that's going to solve all of your financial woes and instantly take all the pain away from the market risks that you've had in the past. You need to commit to the process, and you need to commit the mindset to being able to build something of value so that you can have and do the things that you want to do. So just be really mindful that if you're two years away from your, quote unquote, retirement day and nothing's going to change or shake that from you and you're planning on dropping your income from, you know, by, by 70% and you're happy with that, well, then this system isn't going to magically come in and solve all of life's problems for you.
• 42:43
  Speaker B: That's not, it's important just to be realistic that if there is a lack of resources to start this process, you're not going to expect, or you shouldn't expect, in my opinion, anything magical to happen. But if you've done and earned the efforts of putting the money into the system in the proper way, which we'll dive into. It's not a simple, I have 750,000 sitting in my RRSP and I want to draw the money out and transfer it into this location. The system has rules and how money has to go into it. So we're going to do our best to engineer the ability for you to put the money into it, but it follows different rules and we just accept the fact that the rules are different. So the key thing that I want to highlight in this summary slide is the more money you put into this, the more money you get out of it. Now, this also clouds it a little bit because of also the time of when you do it. So just again, to recap, the 50 year old started with 750. Their ending result is close to 5,000,055. You can only put less in now because your target date you put was 65. So we're working with that target date. So that's 500. Then you get half of the result. If you're putting in 250 and your target date is still 60, 65, sorry. Then you're going to get 781. In all of these circumstances, your money still comes out better ahead. But clearly you can see if you were to start at an earlier time, the value would be better.
• 44:28
  Speaker A: All these examples, we're looking at age 100. So we're taking this out over that timeframe. People are living longer. We're also looking at the expectation. I mean, we don't know when we're going to go. We all know that it's going to happen and we can't control it. So we might as well plan for a long and healthy life and set ourselves up for the best possible potential. And there's not very many other things that let you plan and think around age 100, but whole life insurance does a really good job of it.
• 44:55
  Speaker B: Exactly. Now, the question then obviously comes is, okay, well, what if I am late to the game? The most important thing to recognize is this is a very solid system or a machine that I would just share my opinion. So what does it look like then, if the two variables is the amount of money you put in or the amount of time you have? Well, let's kind of flip the equation where let's hold time constant five years, and I'm going to use the 60 year old and you're putting more money in. So what's the impact of doing that? And you can see the 60 year old, that previous example was 250 for 781. Let's double that. So 100 going in for 100 per year for five years. So 500,000 goes in. Now, the ending result at age 100 is 1.6 million, which is more than double the result. So you put double the input, but your output is more than double. I think that's already a great win, too. Now, is it enough for you? Again, that's a different circumstance. But we're talking about the situation as we are living right now, using a very solid vehicle that is bound and protected by contractual guarantees.
• 46:10
  Speaker A: What's really cool about this? Again, graphs and math and spreadsheets are all great to look at, but we have to really use our imagination here. Nelson said. It's an exercise in reason, logic, imagination and prophecy. In version two, where you're showing a higher deposit amount, a higher premium of 100,000, which there's flexibility built into that. So what you don't see is, well, what if that same person put another year of 100,000 in? Or what if that same person put another two or three years of 50,000 in instead of 100? What kind of an impact would that have? And so those little adjustments, you know, I know we're talking about 50,000 or 100,000, so maybe it doesn't seem like a little adjustment, but what I mean is the adjustment to continue contributing to your program. And as an example, the person turned 65 the next year. So now they take their CPP, maybe they're getting their old age security pension in Canada or Social Security benefit of some kind. Maybe they've kicked in a pension from a previous employer and but they're still working, or they're working as a contractor now in some way, and they're able to earn income into a corporation. Like as an example, the coaching business that you're talking about with angel as a perfect example of that. So what if they redirected those other income benefits and continued continuity of premium for another three, four or five years? Everything gets drastically better by doing that, and that's largely a mindset shift. So again, mindset income resources. Resources like other investments, capital, equity, things that you have. The combination of those three things and how they come together determines the real impact of what happens in the system that you built.
• 47:52
  Speaker B: Yeah, and the system is what sets a lot of the direction and how we're building that plan. And with angel as the example, with her very high income, which is getting taxed at a 50% rate, her actual coaching business was actually starting to get pretty successful. And with that success that she was getting the ability, because she thinks long range, is to build a plan around it and structure that income into a corporation where she's able to defer that income and control it outside of her personal income tax brackets. And again, we're taking into this concept of how it's going to get funded and everything. Now most people think about the concept when they hear, oh, I have to put $100,000 in, but I only make $100,000, so half of my income is going in. Income is not the only source that you can utilize. You've built up all of your resources and wealth in, let's say the traditional wealth system which is inclusive of the commercial banks and the government. What if you relocate that money into a different location that is your own when you are becoming your own banker? And that is what we also look at in terms of the circumstances. I'm not telling everyone that you need to do it that way. Again, this is where your mindset and confidence, comfort level and true understanding of this concept is. If your money and wealth is residing somewhere in that traditional system and it's not benefiting you, how can we help you benefit from the situation? Well, if you have existing resources that can help fuel the relocation of the capital.
• 49:33
  Speaker A: And there's ways to do that strategically considering like Anna's example, maybe you're selling investment real estate and there's a capital gains tax you need to be dealing with. Okay, well you might pick and choose year by year which property you might sell to do that. Or you're doing an equity takeout because you're a real estate investor doing a BrRrR strategy or whatever the different model is that you're working with. Maybe you have a stock portfolio and it's a combination of things that you're hoping for a large capital gain on versus dividend paying stocks. Okay, well, dividend paying stocks maybe you want to keep because there's income consistency there and that'll be part of your retirement fund and you want to keep it. Great. Maybe you have the ones that you're doing for long term buy and hold. You're picking and choosing market times when you're going to sell some because you probably want to take some of your wins off the table and you're reallocating. So there's lots of ways to consider this. It's not a one size fits all model, but it's. It's getting clear on how you want to work with existing resources by having a good conversation with your coaching so you can map something out that's sensible given your circumstances.
• 50:37
  Speaker B: And that's the key working with your coach. What people actually, in my opinion, don't see in terms of, I'll call it the team of the component is it's not just the tool that gets designed or the product or the whole life insurance, it's actually the coach that you're working with to be able to have these conversations with to map out your plan. Again, if you are already having the resources, we're relocating it and you're wondering how much of a retirement or cash flow you're going to get from it. The system is going to do what the system is, but if you didn't have enough resources that was stuck in your pension or stuck in your RRSP, there's no difference. That's not going to save you on giving you the 100 grand monthly draw that you want. That's not going to work in the traditional system. It's not going to work in your own system that's being created here. The key is, and we're also not even talking about saying, oh, you have an RSP that you hate and you don't want to have it in there. We're not going to advise you to take it all at once. There's consequences with it. And that's where, again, it's important to work with your coach to really understand and have, if you are deciding to take that action, what is a favorable income tax event you want to take on drawing that source of capital for your goals and objectives. Now, on the very same asset that we're talking about here, let's just use the example that it's been accumulated and built up and it's not a destruction process. The integrity of the asset is still being held, except now we actually have the ability to work and the relationships to work on maintaining the integrity of the asset to build what's called an insured retirement plan, where you can actually draw money from the asset that you've built in the form of collateral and a loan. So this is a second step that is happening here. And on this particular example, if we use an assumption of 30% tax rate and we assume that this particular individual lives until age 90, again, the individual who started at age 50 from the system that is being drawn will actually get an even. So this is a software calculation, an even calculation amount of 50,000 tax free. That's pretty amazing. Where the alternative system, in order to get the same after tax cash flow of 50,000, you have to have first declared 71,000 of taxable income. So again, we're just being realistic to what you've contributed to the system, what the system can give you at the part of the decision you've made to start tapping into it as your resource to help finance your next phase of life or journey.
• 53:36
  Speaker A: Really important distinction to make here is you're showing, again, based on a 30% tax rate that's going to vary based on your jurisdiction and a lack of other factors. But if you're in a tax qualified plan, you know, 401K or RSP in Canada, and you're withdrawing $72,000 a year and you're paying your 30% tax. So you're. You got to withdraw about 72 to get 50. Basically, what it boils down to. Well, that means your asset base in that other tax qualified instrument must be much better or must be much either higher, or you have to be chasing after a higher return in order to maintain the ongoing continuity without depleting that principle down further and further, all the while trying to balance negative market events and political turmoil that could drastically impact that investment vehicle. None of that is relevant here. In the collateralization model, with the whole life insurance plan, we're talking about $50,000 a year consistently from age 65 to age 90. It's actually 26 years, not 25. Even though you just do the quick math, you have to actually add the year that you're taking it, the last year. And, I mean, that's a very consistent method. Now, we're not talking. We're not factoring inflation here. Wouldn't matter if we're talking about the. The whole life plan or the other investment plan. The same inflation is going to exist in either one of them. So that's. It's a non starter relative to what we're talking about here. We're just trying to keep it simple. You put 750 away from age 50 to 65, you built up a great asset. If you die early, a bunch of tax free money shows up. You're now withdrawing or not withdrawing. You're accessing capital in a tax free method, utilizing what you're. You know, how your coach describes how to do it. That may vary based on whether you're in us and Canada, how you. How you implement that process. But we're taking a consistently stable income without market risk, all that timeframe which creates peace of mind. Peace of mind reduces stress. Reduced stress makes for healthier people that probably live longer. So we're not just talking about one thing here. It's not just a spreadsheet. You have to look at these layers of different things that are happening. And how would you feel by having that peace of mind? And, well, what would that outcome create in your lifestyle for the people that you're around and with for the rest of your life? All of that has a measurable impact to your quality of life. It's not just about. So quality of income increases quality of life.
• 56:11
  Speaker B: And, you know, one of the things that I would say just getting anxiety on seeing is, for my parents account, if there is a market event and imagine losing half of the, I'll call value because of market events that would, if I was actually retired and I was depending on that pool as my source, and I lost half of it because of market events, you have no idea how much anxiety I would have compared to the circumstances here. There is no fear in that circumstance because I know it's going to be there. It's a very different mindset just by building it up in this location. And the other, maybe we need to.
• 56:59
  Speaker A: Bring back those no fear t shirts, but we'll have them based around cash value insurance.
• 57:03
  Speaker B: Oh, for sure.
• 57:05
  Speaker A: And I'm curious, you know, in the story that you shared about your parents, especially in the book, Henry, if I recall, and maybe you can just speak to this in general terms. You had gone in and later in the stages of life, and really gone in with them to meet with their banker and who was dealing with their investment portfolio for years and years and years. And the summation of it, as I understand, is that basically their account values were pretty much what they had contributed, with very little to almost no gains over that. Almost a lifespan of work. Is that about right?
• 57:36
  Speaker B: Yeah. And what was very disheartening was they didn't understand. So there's an investment profile that they get asked, and they get asked what their sentiment is as it relates to the capital. And, you know, the way that it gets explained is they're conservative. So if they were conservative and low risk meant principal protection. So that meant putting that capital into these funds that essentially earned absolutely no money and interest other than the money that they put in. But if I, when I look at the MER fees that came out of that, which were three to 4%, depending on which of the funds, it disgusted me. The fact that the MER fees was higher than the return that they actually got, that was. It was absolutely disgusting.
• 58:27
  Speaker A: Well, we're shedding light on this for North Americans wide and how you can consider alternatives not only to your banking system, but to your method methodology by which you take an income at passive income time.
• 58:43
  Speaker B: The other point I didn't get to touch upon that. I was just focusing here is if we look at the income tax equivalent of that 71,637, imagine that is money that you need to draw out of your RRSP 71,637. Now, combine that with, if this is a sole income earner, combine that with the government benefits. A lot of the times the government benefits inclusive of that, and, let's say, other sources you may have if you actually need it, because price of groceries, for example, are a lot higher now than they were in 1960, 1980, 819, 99. Whichever year you want to say the amount of money that you need to get to live now is a lot higher, but the tax brackets haven't moved according to the same level of spending that was needed. And the benefits coupled with that income draw puts you in a very dangerous category zone. And in Canada, there's what's called old age security clawback, where if the amount that you're drawing is too high, that's going to put a threat to it. Whereas if you're having money in the arrangements that get set up after you've built up the asset value to get this $50,000, there's no threat on that particular government entitlement that you actually should be getting since you've been contributing to it for your lifetime.
• 1:00:04
  Speaker A: Yeah, just in this one example alone here, that could be the equivalent of an extra couple of year of net spendable income because there's no clawback situation created. So again, it's quality of income, not so much quantity of income in the tax deferred model, or, sorry, in the tax qualified plan model, we need a higher quantity of income to create the same result. But the quality of income is really what we're focusing on here by having that control at the Unme level to dictate the terms and to minimize the impact of other forces such as OES clawback that you just identified.
• 1:00:48
  Speaker B: Yeah. Now, just to kind of extend the rest of the discussion, starting at 55, the amount of contribution that went in, that's going to create now again, five years difference, half of that value of the annual draw, the income equivalent is 30,000. And if you start at 60 and you're putting the same amount of money for a shorter period of time, logically makes sense you will get a lot less out of it in that standpoint. So depending on when you prepare for it or when you start building it up, it can either be, let's call it replacement, or it becomes a supplement. So again, these are important considerations to take into hand based on the journey that you've come into us today. Now, this next item that I just wanted to highlight is comparing again, if you have lost time and you're starting at 60, what if, and you were putting the original at 50,000. Well, what if you did it with more money to make up for lost time? Then you actually get more than double the amount. Instead of, let's say 18, 16,000, it's actually 18,000. So more than double, which is the income tax equivalent of 25,000. So you can see the impact of you putting more money in, even though on a dollar standpoint it's double, the result for you is actually more than double, which is actually a very good benefit to look at in this standpoint.
• 1:02:19
  Speaker A: And some of that has to do with efficiencies, both the efficiencies of capital and the efficiencies that sometimes are created in the insurance contract itself relative to different age groups. Different age groups have, you know, again, we can all recognize that if you're going to put the same amount of money. So in our first examples, we've got age 50, 55 and 60 all doing $50,000 a year. Well, it's the same 50,000 going in, but the amount of initial starting death benefit created is different in each scenario because of age. The 50 year old is getting a higher starting death benefit, the 60 year old getting a much lower one. So the 50,000 of deposit or premium going in is the same, but the death benefit start point is what changes in that scenario. And that's an important distinction as to how sometimes there's additional efficiencies that can be created when you speak with your coach around the amount of capital that you're putting in. Sometimes it makes sense to put a little bit extra in at a certain age to get into a slightly more efficient zone of a policy. And that's a consideration on a one to one basis.
• 1:03:26
  Speaker B: Yeah. So let's look at this financial journey impact. Again, there's a lot of information here, but I want to summarize it piece by piece, because I'm showing a lot of comparisons between the three age groups as the example. So the 50 year old is getting, if they decide to implement the, let's call it the insured retirement program, getting 50,000 tax free each year they've put in 750 into the machine. Now, that machine actually has the ability to draw that 50,146 for the cumulative in green. While they're alive, 1.2 million, which you can already see, the amount of money that went in from 50 to 65 was 750. The usage of 65 to 90 was 1.2 million. And at the end of the stage, assuming this person has passed away at 90, still leaves behind $845,000 for a combined total of two, almost 2.1 million enjoyed for putting in 750. So 750 went in. The ability to enjoy 2.1 came out first. The 845 is enjoyed by someone else, the other 1.2 is enjoyed by the individual.
• 1:04:42
  Speaker A: And another way to look at that. So this individual puts 750 in during their working time frame, they spent the 750 before they died, plus about 450 to 470,000 friends. So they got the 750,000 back and they used it. Plus an extra 450 to 475,000 of additional friends, money that they got to spend in a tax preferred way. And they still left an additional tax free 845,000 to the people they love and care about, or the things that they love and care about if they don't have people. You either love and care about people or things. By the way, if you don't love and care about either of those things, infinite banking may not be the right thing for you because you might not have the right mindset.
• 1:05:27
  Speaker B: Agree. Now, just again, showing the impact of 55. Again, 500 has gone in, but the amount to utilize while alive is 666, which is 166 more than what went in. What gets left behind is 462, for a combined total of 1.1 million. So 500 in total out 1.1. If we're looking at this concept here, if there's a machine, again, whether you want to put your capital into this location, it, to me, logically, just makes it a no brainer. Now, what people may see is discouraging. They come at age 60, like Henry. If I put in this amount of money, 50 for five years is 250. Well, the output along the way is 375. It's still better than what you've put in. And that, to me, is already still a big win. It's not sizable, but we've got to work with the situation that you have. It's, again, not going to produce a miracle for you. We're being very, very, we're being very realistic, prudent with the capital. So is it a good peace of mind to not worry about half of your capital value disappearing because of market volatility and exposure? Definitely is, to me, much more worth it.
• 1:06:51
  Speaker A: And I'm going to take this one step further. What's not on the graph? And let's look at an example, or just discuss an example of someone who's age 70 and they want to start this. Well, at age 70, you probably already have or should have your. Your retirement income streams and passive income stuff set up. If you don't have that, this is not going to come and fix that for you. So that's not the right reason to consider doing this at that stage, unless you're planning to work for another 20 years, in which case, first of all, that's amazing. And secondly, I would want to know how you're doing that. But if you do have more of a legacy mindset. You want to think about your children or your grandchildren and your great grandchildren, and you want to consider implementing a cohesive strategy in between family lines where you can start to see the impact of the things that you do. You want to be able to continue to use and spend money, but you want to do it through an efficient model that also creates capacity for the next generation. Then absolutely there's a sensible reason to consider implementing this in your life. Are you going to be the body that's insured? Sometimes, you know, as we get into the 70 category and beyond, into the 60 category and beyond, we have a lifetime of living and often health conditions do arise over 70 some odd years of life. And maybe we aren't able to get you insured, but we won't know until we try. But are you the right body? Well, maybe not. Maybe it's a child of yours, maybe it's a business partner, maybe it's a key employee, maybe it's the grandchildren. There's lots of ways to continue creating this in your life and doing it. It's relevant to what's important to you. What's your goal, what's your mindset? And again, what's your income, what's your resources? All of those things have to coalesce together to be able to make a definitive model of this implementation make sense in your life.
• 1:08:37
  Speaker B: And I just want to add into that this is where we do suggest not to do this alone and go through that thinking. That's why we have the meetings to collaborate and explore. What are your income? What are income sources? What are your asset sources? What are your liability sources? What are your reasons for what you're doing? What you're doing. This is an exploration process that is going to provide a lot of clarity. And if you were to just kind of sit alone and try to figure this out yourself, I wouldn't. It would be a very tough thing to do because it's a new thing for you. It's that learning curve is going to be very high. That's why working with a trained professional who actually, in my opinion, practices this in their life is really going to give you the edge to go through it. There's people who can maybe design policies that match it, but if they don't use it, and if they don't authentically, if they don't use it, I would challenge the fact that they have the ability to authentically speak and coach you through it. If they're not using it, how could they coach you through it? That's really the main thing, I want to just make sure there's some really good clarity around the process that you're going through, especially at the stage of consideration when you're looking at something like this. The last thing I just wanted to highlight here, again, a lot of numbers that I wanted to put together here, but it's always talking about. Okay, well, you highlighted how great this alternative system looks like. Well, what does it look like from the traditional system? And traditional finance heads will always talk about rate of returns or talk about specific. What's my interest? What's my cost of capital? They're not actually looking at the proper perspective. When finance head looks at things, they only look at ROI, and that's the only view that they see. They're missing the bigger picture of things. We have to talk about the economics of the choices that are available. And this is very different than what most people may have picked up on the Internet or gone through their traditional school. So if we look at the economics of the decision of putting the capital in one location versus another location, the choice around that we're talking about. So just recapping, I'm using an example of the individual that was age 55. So I've just cut it in the middle. There was 50, 55 and 60. I'm using age 55. That tax free cash flow that was drawn annually was 26,670 until age 70. So the asset value that this particular individual will be able to enjoy would be 1.1 million. How is that 1.1 million created? It came from the 500 that was put. Put in. 666 got spent while alive and left 462 to their beneficiaries as legacy. So together, that's 1.1 in the current system that exists for the traditional ways, just to use an example here, to create the same 1.1 million of enjoyable benefit of drawing money on a tax after tax basis. And after, when you were to pass away on an after tax basis, you have to put in on an interest based asset like a bond or anything like that. That's producing interest income, which is taxed at the highest taxable rate. On a personal standpoint, you have to put in capital of 773,591 compared to the 500,000 that was going in the system. So first, a lot less money has to go in. Sorry. A lot more money has to go into the interest based asset in the traditional system to produce the same economic value of 1.1 million. Now, on the dividend asset, you have to put in 738. So slightly less, mainly because the favorable tax rate is on dividend income sources versus the interest rate sources. But to produce the same equivalent resources or economic value is 1.1 million. So this is what, the key thing.
• 1:12:54
  Speaker A: Here, Henry, is that the economic value you're talking about is an after tax economic.
• 1:12:58
  Speaker B: Correct.
• 1:12:59
  Speaker A: So, for our listeners, again, age 55, we're taking just shy of $27,000 a year of tax free cash flow after tax cash flow until age 90. And then we're also leaving behind a tax free death benefit of 462,000. So to have an equivalent asset, whether it's an interest bearing one or a dividend asset, you need to input. You have to put in substantially more capital to create the same after tax result. In the case of an interest bearing asset, you need 770, almost 774,000. Or another way of looking at that would be you need 274,000 more deposit money going into the machine if it's interest bearing, to create the same after tax result, if it's a dividend relative asset, you need 238,000 more deposits on the front end going in to create the same after tax result. So the end result that, you know, just to circum summarize this here, 500k going in creates a much better after tax result in the alternate system than 774 going in to an interest bearing system. So. Or to, you know, to get the equivalent result. But you also might have to take on more risk in that interest bearing system. We're assuming those interest rates are consistent throughout that timeframe. So, again, even this graph isn't painting a true picture. It's creating a snapshot picture with heavy assumptions about the result.
• 1:14:33
  Speaker B: Gotta keep it simple for people. Richard, you pointed out that while I'm keeping it simple, it's missing those factors in realizing this key point, as you very eloquently put together, is you have to put more money in because people don't factor in taxes. And this is a very important part in why we started our conversation talking about the interventions and control of the government. When the government gets involved, they have to get their peace. And if they're getting their piece, that means it's a cost to you. How much of that cost do you want them involved as it relates to your specific later journey chapter?
• 1:15:25
  Speaker A: And how much do you want your family to have to be involved? You know, the day that you leave, someone's got to pay the final tax bill. Someone's got to clean up the mess you leave behind. And I'm sorry, that's going to suck. I'm not looking forward to the mess I'm going to leave behind. But at least I know presently today, whatever mess I do leave behind is going to show up with an awful lot of tax free friends to buy time for my family to deal with whatever mess I leave behind. And I'm really happy and I have a lot of peace of mind knowing that that's going to be the case. And so get really, really clear about what's important to you. I can't overstate this enough. In order to do this, you need to have income, resources and the right mindset. It's a combination of those three things. If you have a lower income but you have high resources, hey, that's something we can work with, but you need to have the right mindset. If you have low income and low resources, but you have an amazing mindset and you're willing to do the work and do what's hard and put the effort in, we could probably work with that. The older you are, the harder that will be. Regardless of your mindset, your mindset could be perfect. You could be the absolute perfect infinite banker. But if you have very low income and very low resources and you're also at an older age, it will become very difficult to be able to implement that journey for you. If you're younger and you have low income and low resources and you have a great mindset, the world is your oyster. There is so much capacity for you that can be built. It's crazy what's available to you because of the vantage of time. You could have really, really high income and really, really low resources or no resources. And we can probably still implement this as long as the mindset's right. Take any one of those pieces, you could be any one of those descriptions, but have a crappy mindset, this will not work for you.
• 1:17:24
  Speaker B: And the main thing to realize is this is not an either or type of thing. It's not like you can't deploy the money that you've put into the alternative system into for whatever reason. If you do decide to put it back into qualified plans, you could. But I believe the fact that in terms of our process, you are going to get educated with good information. And as you learn through the information, even for example, reading the book, becoming your own banker, or kind of drawing on today's one on building your warehouse of wealth, if you've properly read those books or you know, as plug the keep taxes away from your wealth book that we co authored together, if you've read any of those books and your mindset hasn't shifted or hasn't made you think differently, I would be very, very surprised.
• 1:18:24
  Speaker A: Well, Henry, this was awesome. I think we hit the nail on the head as far as helping you understand what's possible for them at older ages of life. And again, I say older a little bit with a little bit tongue in cheek. I don't really think anyone who's over the age of 55 is older. I think that often people begin to think that themselves, and that's what's common when we hear people. We often I'll have people that email or message me and say, richard, I'm 45. Is it too late for me? I'm like, no, it's not. Not unless you plan on dying tomorrow. Like, it's not too late. If you message me and you're 65, you say, is it too late for me? I'm like, well, probably not. But it also depends, what's your mindset like, what's your income like, what's your income continuity like, what are your resources that you're working with? So depending on those factors, it's not that it's too late, but it might not make sense for you given those factors. Okay. But you could be that person that, hey, maybe you just sold your business. You're sitting on a big pot of capital. You're tired of dealing with government overreach. You're willing to commit and put this into it. You have kids and grandkids. You want to make sure people are looked after. You want to be the patriarch of the family. It's important to you. You want to start having family discussions. You want to get trained on all these things. You want to be part of an amazing community of people. Yeah, we can absolutely help you with that, no problem. So where are you at in the journey? You decide for yourself. And if you found this really helpful, go ahead. Leave some comments down below. And poof. Right there, you're going to see an additional video that just popped up. That's because we're recommending it. You should probably watch it. See you next time. Thanks for listening to the wealth without Bay street podcast where your wealth matters. Be sure to check out our social media channels for more great content. Hit subscribe on your favorite podcast player and be sure to rate the show we definitely appreciate. And don't forget to share this episode with someone you care about. Join us on the next episode where we can continue to uncover the financial tools, strategies, and the mindsets that maximize your wealth.