Table of Contents
Podcast Transcription
Erwin Szeto [00:00:06] Hello everyone. Welcome to Another Week episode of The Truth About Real Estate Investing Show. My name is Erwin Szeto and yay! Things are opening up. Vaccination rates are climbing and over 60% of adults have had their first shot at least. So we’re on pace for step one of three of the reopening of the economy and also normal life. I saw pieces roadmap has December 7th for their final step of their reopening, so the end of the pandemic had never been so visible. Also reopening for us is deep. I mean, for and I have many times we’ve committed to a once per week date night, but the most recent lockdown kind of killed that tradition. Well, we’re back on track this past week on Victoria Day, we actually spent the evening together playing golf. We had a great day, enjoying each other’s company in the outdoors. We had great weather. She beat me thoroughly again. Even though I can hit the ball a lot further than cherry, there’s little to negative benefit of hitting a ball further out of bounds or into a pond. Note This is only my second year playing golf, so I’ll endeavor to improve. I have plans to take lessons once per week, plus golf once or twice per week as well. So the summer is looking promising to me. It’s always fun to take on a new challenge outside of business and investing in learning a new skill. Because I get to observe how I learn new skills and not only helps us share and educate others on how to invest, whether it be in real estate, stock hacking or whole life insurance. And whole life insurance is the subject of today’s episode. Today we have my friend Jayson Alo of Ascendant Financial. He’s a gentleman who was kind enough to provide share and I hope life insurance. If you’ve never heard of whole life insurance before and how it benefits, how it fits into the infinite banking concept. That’s okay. Like learning how to invest in real estate. It wasn’t anyone’s job to teach you. And I only got first interested in life insurance when several of my wealthy real estate investor friends shared with me how this was their path to obtaining several more mortgages. So who doesn’t want to be able to get more mortgages? There is a right way and wrong way to invest just like anything. And I’m glad we have Jayson on who is a real estate investor and a private lender. So he’s here today to explain the strategy. So I hope you enjoy the show. Jayson, what’s keeping you busy these days?
Jayson Lowe [00:02:13] Oh, we’re busier than we’ve ever been. And, you know, we’re educating Canadians coast to coast and sharing the message and the process to becoming your own banker, the infinite banking concept. And it’s been an incredible journey.
Erwin Szeto [00:02:27] We’ll dig into that. We’ll dig into that because, you know, there’s supposed to be there’s a pandemic going on. Businesses are hurt.
Jayson Lowe [00:02:32] All.
Erwin Szeto [00:02:33] So what’s different for you?
Jayson Lowe [00:02:37] Well, you know, I think I would share with you that something that you probably already know. And that’s I mean, the media does a really good job of keeping people in a constant state of anxiety or fear and uncertainty. And what we’re experiencing in our business day to day is the complete opposite, so that the folks that were introduced to the folks that we’re serving, they’ve been saving a lot of money. They have been expanding their real estate investment portfolios. They’ve been very aggressive in moving forward and continuing to make progress. And so we’re not running into very many folks who are saying, listen, we are we’re underwater financially or we’re approaching that. It’s quite the opposite. We’re dealing with people who are operating in a sense of abundance, and COVID 19 isn’t getting in their way.
Erwin Szeto [00:03:26] So it’s partly a mentality and probably partly some prior business decisions before and investment decisions before the pandemic.
Jayson Lowe [00:03:33] Definitely. Definitely.
Erwin Szeto [00:03:35] All right. So, Jayson, for the listeners benefit, where are you?
Jayson Lowe [00:03:38] So we’re headquartered here in Edmonton, Alberta. We have branches, if you will, across the country. So we serve Canadians coast to coast. And we do have a strategic partnership with the firm out of Quebec as well. So Ascendant is operating in Quebec just to be a joint venture.
Erwin Szeto [00:03:58] Because this is a real estate show. I want at least to get the real estate stuff out of the way.
Jayson Lowe [00:04:02] Yeah.
Erwin Szeto [00:04:02] So even though the main thing we’re not we’re not talking about your real estate experience as much as the learning lesson because I think you have greater value to share on your, on your day to day business. Yeah. So before we were recording, you mentioned you were a remember.
Jayson Lowe [00:04:15] For quite some time. Yeah, yeah. I’ll share this story with you really quick because it’s how I got engaged in my own real estate journey and how I became a member of the ring group and my mentor, who’s still a dear friend mentor to this day. We were on an airplane back from Vancouver, Leamington, and he was leafing through this condo that he just purchased. And I said, Hey, this, what do you do? And he says, Oh, I’m investing in these condo townhomes. I said, That sounds interesting. And that’s where it all began. And I purchased my first condo townhome in 1999, became a real number, was a REIN member through 27, and built a small real estate portfolio 13 doors. And but being a member of the ring group was. An incredible experience if I can do Campbells to and just the wisdom that he shared and the community. I think the community was where the most value was in the REIN group. It was a great experience.
Erwin Szeto [00:05:15] Do you still hold these properties?
Jayson Lowe [00:05:17] No, no. I divested from real estate 2009 through 2012 and I did that by design just based on getting in the practice that I’m in now and growing this business. And, you know, real estate was one of the sources of capital that helped me get my business off the ground and helped me to capitalize it and move through what we’re doing now, through becoming the banker and being able to lend and to control the financing function. I choose not to own real estate, rather to help finance it. And so it’s just a different way of participating, you know, in that realm.
Erwin Szeto [00:06:01] And I love that you bring that up because that’s how I start. That’s how I was convinced to do real estate investing as well, because I was when I graduated school, I thought I was an entrepreneur. And then my partner brought to me the idea of in real estate, that sounds boring, but it’s interesting. And then when the angle she gave me was, Well, if you invest in real estate, then you’ll have an asset base to fund a startup like, oh, that’s actually a good angle. And so that’s actually the path you followed.
Jayson Lowe [00:06:25] Yeah, you better believe it. And I don’t know that I would have been able to capitalize the business the way that it needed to be and to be able to sustain, you know, a good level of income to take care of all your personal financial overhead. And as you’re just getting started in a business and we’ve operated debt free since inception and real estate was a big part of that. And so I’m very grateful for that, that experience.
Erwin Szeto [00:06:51] Right. And I’m assuming sorry, was this a self-funded venture that you started?
Jayson Lowe [00:06:57] Yeah. So when you move away from where I was, I was a senior partner with one of the world’s largest technology firms. And when you move away from that comfort of a biweekly paycheck, you’re climbing the corporate ladder. You think that that’s your lot in life and you go into business for yourself and there’s no guarantees other than there are no guarantees. Then, you know, having the real estate was it was a great fallback and it pulled me through those earlier years. And it’s been like I said, I’m very grateful and thankful for it. You know, to Don trusts and the whole group that was operating REIN at that time.
Erwin Szeto [00:07:35] And then did this allow you to keep 100% of the equity in your in your new business then? Oh, yeah.
Jayson Lowe [00:07:40] Absolutely. Yeah, yeah, for sure. And you know, what it’s culminated into today has been just nothing short of amazing. You know, we have a wonderful team of people. We were very, very strong, tightly knit group and all of our practitioners of the process. There’s some of the greatest people that you’ll ever meet, you’ll ever work with. And I don’t think there’s any proud business owner that wouldn’t share something like that about their team and about their organization. But I really, truly believe that we walk the walk and we live our values and we’re quite proud of that. But all the credit goes to my team. Honestly, as a leader, I have the privilege of handing out all that credit, and I get to take all the responsibility when things don’t go well. And that’s the mark of a leader, I suppose.
Erwin Szeto [00:08:28] So while we’re sharing out of it, I don’t understand everything about infinite banking, but what got us down this path was, I guess I was mentioning before we were recording, several of my rich friends have whole life insurance, which is a component of investment banking.
Jayson Lowe [00:08:45] That’s right.
Erwin Szeto [00:08:45] They were raving how it enabled them to be able to get more it able to them to refinance more of their properties. One friend specifically said she was able to, I think, refinance one property that she previously could not. Yeah. And she was able to be able to buy three more investment properties. Yeah. So from being stuck against a brick wall to being able to open up opportunity. So I really got my interest right and then I dumped it this time sharing. And then then.
Jayson Lowe [00:09:11] That and it all blossomed from there.
Erwin Szeto [00:09:14] Oh, blossom from there. I don’t completely understand everything. I’ve signed off a whole bunch of paperwork that I admittedly didn’t read. So Jayson talked to me as if I’m like, be my listener or my 17 listeners who wasn’t familiar with investment banking or even whole life. Because I think a lot of people know life insurance and term insurance. I may not even know that. And then until like two years ago, I had never heard of whole life before.
Jayson Lowe [00:09:37] No kidding. Really?
Erwin Szeto [00:09:38] Where who would tell you? Where would you find out? And also, not everyone qualifies. Right.
Jayson Lowe [00:09:43] You know what’s interesting about that, Erwin is, first of all, what you shared is not uncommon. It really, I guess, goes back to if the minority of people in the world are accumulating and controlling wealth, then why do we continue to do what the majority do financially? So this tool, this this amazing. Incredible tool called dividend paying, participating whole life insurance has been in existence in Canada since 1847, and those who understand it utilize it. And it’s been if you talk to any life licensed advisor in the country, if you were to pull the majority of the life license advisor, it’s great people doing great work serving Canadians. Most would have at best a rudimentary understanding of the tool because the industry focuses on the death benefit characteristics, not the financing characteristics. And when you’re dealing with real estate investors, people who are focused on wealth accumulation, people who have an ambition and want to grow indestructible wealth. If you get around the circles of people who have already done that dividend paying, participating, whole life is going to come up in the discussion of what you need to have in your arsenal. And the primary reason for that is the contractual guarantees, the liquidity, the access, the control, the ability to access capital in the form of unstructured loans. So if you’re dealing with a real estate investor, for example, and you ask them, gosh, you know, how much do you enjoy the process of having to go to a lender to expand your real estate portfolio? No one has ever said to me, I just love sitting down with a banker or a loan officer going through that process. It’s amazing. And even if you’re networked with someone who you’ve got a great relationship within the business, sooner or later you hit the ceiling. You know what? Your debt to income, your debt ratios, you’re we’re factoring everything in. We just can’t lend you any more money. You’re over leveraged. Whereas with the tool, the dividend paying, participating whole life contract, you have ready access to a pool of financial value that’s rising every single day uninterrupted. And when you need access to capital, you can borrow up to whatever could have otherwise been lent from your policy. And it’s unstructured. So when you need access to money from the life insurance company, they’re not asking you for a credit check, income verification, a copy of your portfolio, your financials, personal guarantees, letters of credit, whatever that may be. They’re asking you two questions. Do you want us to electronically deposit the money into your account or mail you a check? So the policy owner is in a position of total and absolute control, and I haven’t met a single person yet in the real estate realm who doesn’t want total and absolute control. And so, among many other things, are at the foundational level. Everybody is familiar with the process of banking. They’re just not controlling the function of banking as it relates to their needs. All the payments, all the money that flows through your hands and mine, it ends up right back in someone else’s system. Whereas if you embrace the process of becoming your own banker and you use dividend paying, participating whole life insurance contracts as the tool and the place from which you implement that process, then you create indestructible wealth. And for clients of ours, especially those who have similar to the example you shared, where they’ve been able to access capital to expand their real estate portfolio or get rid of the bankers much faster than what they were originally scheduled. It’s a very peaceful, stress free way of life. When you don’t have the bankers in your life, it’s a very peaceful, stress free existence. And when you achieve that stage, I’m 13 years into my journey and you don’t need to rely on a commercial bank for anything other than the convenience of debit. There’s not a whole lot that’ll stress you out. Isn’t that good? Mm hmm. Mm hmm.
Erwin Szeto [00:13:56] So what do people need to do to be able to obtain insurance?
Jayson Lowe [00:14:00] Well, the first thing that they need to do is they need to meet with someone who is thoroughly familiar, not only with the anatomy of the policy, but how to coach and mentor somebody to utilize this tool properly. All right.
Erwin Szeto [00:14:16] It’s like having lunch with someone who has whole life, and he has the version that he can take money from.
Jayson Lowe [00:14:20] Oh, goodness. Well, there you go.
Erwin Szeto [00:14:22] Thank you. Know what damage is going to be? I don’t know if you can just flip a switch. Okay. I won’t tell them.
Jayson Lowe [00:14:31] But yeah, I would say first.
Erwin Szeto [00:14:33] He’s not the first. I’ve heard this from at least three times the last two months or so. They have the wrong boy.
Jayson Lowe [00:14:38] So important to work with somebody who’s thoroughly familiar with it. And of course, I’m going to say that here at Ascendant Financial, our team, they are all thoroughly familiar with not only the tool, but how to coach and mentor policy owners on how to utilize this tool properly. Because you can put the best tool for the job in the hands of an incompetent. Not only are they not going to turn out any good work with the tool, they’re likely a tool that.
Erwin Szeto [00:15:05] Can be a hammer I might hurt myself.
Jayson Lowe [00:15:07] With. Me too. I’m not I am not handy in that way at all, that’s for sure. But yeah, it’s super important to do that. And also important if your listeners have not had the occasion to read some of the best material on the process of becoming your own banker. So for example, we just launched a new book club columns and I coauthored it’s titled The End Asset for Canadians. Again, it’s the end asset for Canadians, and this book is an absolute must have in your library and your listeners can access it from end asset. Okay, that’s end asset tax day and we can ship that right to their front door. And then, of course, there is the quote unquote Bible of the process of becoming your own banker, the infinite banking concept, which is our Nelson Nash’s book titled Becoming Your Own Banker. And I was blessed beyond the definition of good fortune to be mentored directly by Nelson for so many years. And in fact, there’s a great documentary film that your listeners can view on YouTube at no cost, and it’s titled This is Nelson Nash. That’s the name of the film and listeners can view it at Nelson Nash film dot com. Again that’s Nelson Nash film dot com and there’s no cost. It’s a one hour documentary that I had commissioned on my mentor just as an incalculable token of gratitude and a deep appreciation for just how incredible it was to know him and to be mentored by him. And that film will give you a deeper glimpse into the essence of just how incredible this man was. Mm hmm.
Erwin Szeto [00:16:52] So now, Jayson, I’m sure the listeners probably still confused over talking, though, so I try to put myself in their shoes. Yeah. As I often am confused. So investor usually thinks in the basis of the simplest things as master things about is what’s my investment? Yeah. And then what’s the return? And then how much effort goes into it. Right. So how much does someone need to. How much capital does wanting to invest? And then how soon can one start seeing benefit from it?
Jayson Lowe [00:17:21] Thank you for asking that. Really good question. So the amount of capital that goes into a policy is determined by the policy owner, and it has to meet two criteria. It’s got to be a comfortable amount and an affordable amount. And the moment that that money is deposited into the policy, there is a loan amount available immediately dependent upon the life insurance company that the policy has been issued from. And then the policy itself has a contractual guarantee that. Cash value. So capital is going to begin accumulating in that policy from day one and it must accumulate to match the total death benefit by age 100 of the life that is insured. So in simplicity, Erwin every single day that you are aging closer to 100 your aquarium. If you envision this, if your listeners picture this for a moment, your aquarium of financial value of capital is rising. It’s growing every single day. There’s no pandemic, bad economy, real estate cycle, risky stock market. There’s no other economic factor that can take away any of that accumulating value. Here’s why. Super important for your listeners to remember this distinction. The policy itself is a unilateral, binding contract. It’s not an investment. The insurance company itself is controlling and managing 100% of the investment function of the money pool. The policy owners sole responsibility is to deposit the premium. The insurance company themselves are on the hook to satisfy the contractual guarantee of the cash value. Matching the death benefit by age 100 in the way that the policy is engineered is critical because if it’s engineered properly, the death benefit will rise every single year with no increase in premium. And so if we have an ever increasing death benefit, we have an ever aging policyholder or life insured. We have an ever increasing daily pool of financial value that just keeps going up no matter what. The possibilities become endless in terms of what you can take advantage of as it relates to opportunity that tracks you down. Here’s a key message that my mentor used to share with me that I want to pass along to your audience. When you have ready access capital, opportunity will hunt you down. And it’s the truth. I get tracked down by opportunity almost on a daily basis because I have ready access capital to quickly pounce and take advantage of opportunity. I don’t have to wait or deal with lengthy, nosey credit checks or credit applications or bankers that need a mt. Everest of information. It’s a phone call to the insurance company, and I get to take advantage of the opportunity that tracked me down. And so I hope that helps kind of frame up, you know, some of the fundamentals or the foundation, if you will, of just how ultimately simple this truly is. In that good.
Erwin Szeto [00:20:30] I’m sure we’ve lost at least eight of my listeners. So I suppose that okay.
Jayson Lowe [00:20:34] So we’re down to four, down to nine.
Erwin Szeto [00:20:36] Now we have signed hopefully and hopefully the eight are still intrigued. So what percentage of the policy can you borrow against?
Jayson Lowe [00:20:46] You can borrow against 90% of the accumulating cash value and when you do that. So I’ll give you start. But let’s work with some real arbitrary numbers here. So let’s say that we have piled up $100,000 of cash value in the policy, and the policy has a death benefit of $1,000,000. The policy owner is able to borrow against 90,000 of that total cash value. And if the policy owner did that, the insurance company will place a lean on the death benefit for the loan balance. The entire 100,000 continues growing daily uninterrupted by the policy loan, and the policy owner controls the repayment schedule of the loan. And people ask, wow, how does the insurance company able to do that? Why do they do that? Why do they give the policy owner total control? And the answer is simple the insurance company itself is contractually guaranteeing the collateral. That’s why they don’t require a repayment schedule. So the policy owner gets ready. Access Capital. They’re not interrupting any of their own aquarium of money that’s still rising every day uninterrupted. They get to take advantage of the opportunity that tracked them down, and then they get to control the repayment schedule. And so if you put a policyholder who’s practicing becoming your own banker right alongside an investor, and these two individuals participate in the very same investment opportunity with the very same investment sum of money, they get the same return at the very same time. The policy owner who’s been practicing becoming your banker comes out ahead every single time. The rate of return on the investment was the same. The amount of capital that went into the investment was the same. The person practicing becoming your own banker just executed a different process to take advantage of the opportunity. The opportunity was the same. It’s just the process that the policyholder executed to take advantage of it. That was different.
Erwin Szeto [00:22:50] And so the analogy I give Cherry, because I was trying to explain it to her, my lack of understanding of the analogy I was using was it seems almost like a home equity line of credit in your in your example. See, that’s my house is worth 100 grand. And it used to be we could borrow up to 80% home equity line. I pay a small interest rate on it now I can access it whenever I want. Payment terms are up to me. I think one company required interest only month each month. That was it, but otherwise the repayment terms are up to me. I could pay it back whenever I wanted it never paid it back. As long as my interest payments were made each month, they didn’t care. And those interest payments I would deduct because I was using that money for investment purposes. So I was deducting that as my income.
Jayson Lowe [00:23:33] Which you can do with the policy as well.
Erwin Szeto [00:23:34] Right. And as the analogy close.
Jayson Lowe [00:23:38] You’re not too far off. So imagine for a moment if I can just expand on your analogy, please imagine if the banker said to you, Erwin, you’ve got all of the control that you just described and Erwin we are going to provide you with a document that contractually guarantees that the property is going to rise in value every single day for the rest of your lifetime, all the way to age 100, no matter what. Right. You know, I wouldn’t even be talking right now. You be dealing with the banker, but no bank is going to give you that contractual guarantee. Encumbered by real estate, no banker is going to do that because the assets, not the property, the asset is the stream of payments, the money. And so the insurance company is completely different. Completely different in the sense of the collateral. The collateral. We’re dealing with human life value. We’re dealing in theoretical 100 year life spans. We’re dealing with a unilateral binding contract, not a home equity line of credit. And so your example is like your thinking is on the right track for sure, but you’d have to frame it up so that it actually compared. Right. And that. The missing piece. If the bank said, Hey, Irwin, you know what, we’re going to guarantee your property is going to go up every day. For how long until you reach age 100. How does that sound? Well, you would say, but yeah, this is a great deal. Then again, for your listeners benefit, this is nothing new. These contracts have been around longer than you and I been alive combined. And those who understand it, utilize it. So first step would be sought to understand. Seek to understand the tool, seek to understand the process. And if it’s something that you believe would be an advantage for you, then just make sure you’re working with somebody who knows what they’re doing because this can be constructed incorrectly. So really important to work with someone who knows what they’re doing.
Erwin Szeto [00:25:33] And again, I find industry insiders like people who have a friend who’s whose dad was always in an insurance industry. So he always had multiple policies. So my friend also has multiple policies and he’s pretty good with money. So there’s be something to it. Yeah, I know people are going to ask, what’s the interest rate on the money they borrow? Yes.
Jayson Lowe [00:25:55] Well, that’s a great question. So dependent upon the life insurance company that the policy’s placed with, the simple interest calculation can range anywhere from 5% to 7% or more. It depends upon the life career that you’re working with. Now, what’s really important to understand is that the interest calculation is simple, so it accrues daily and compounds once annually on the policy anniversary. However, with every payment that you’re making back to your system in the form of a policy long repayment, the simple interest calculation resets all over again. So if to give you a bit of a crash, course not you personally, I mean, for your listeners just on interest and how that’s calculated, you’ve got simple interest and then you have an effective rate of interest. The effective rate goes way down. This is more so about where the money’s flowing to. And it brings me to a very good point that people need to know. When you become a participating policy owner, you become a co-owner of the insurance company. If you’re dealing with a mutual company where there are no stockholders. When you become a co-owner of the insurance company, it would be incumbent if you own a business and your capital needs to reside somewhere that you would want your capital residing inside of your business versus someone else’s. So it’s a fatal error to think that the process of becoming your own banker is a function of rates. It has everything to do with a matter of where the money is flowing to and who that money is being put to work for. And so when we put that capital back into the money pool of the insurance company that we co-own, that insurance company is multiplying that capital for your benefit. For my benefit and for everyone who co-owns the company, there are no stockholder interests to cater to the participating policy owners or the sole beneficiaries of the divisible profit generated by that money pool. It is. Isn’t it interesting that through all of the economic crises that we’ve experienced in the past hundred plus years, I’m talking about through the Spanish flu all the way through to COVID 19, that the life insurance companies have been the most financially solvent institutions on the planet through each and every single one of those crises. What does that tell you? And if the commercial banks are purchasing, dividend paying, participating whole life contracts by the truckload, I’m talking about billions of dollars. Either the commercial banks are really stupid and getting wealthy or they know something that you and I don’t. Which one do you think it is?
Erwin Szeto [00:28:34] All the smart money. That’s always been very useful in my life.
Jayson Lowe [00:28:37] And so people on Wall Street, people from the commercial banks, they’re not going to stand on the rooftops and tell you about this because they can’t make money from it. Right. They make money from you handing control of your money over to them. And so this completely reverses that flow. And once you experience the ultimate simplicity of it, your imagination will get to work on how to expand it in your life, how to expand it in your business, how to expand it in your real estate portfolio. And that’s why in the late hour, Nelson Nash named it Infinite, because it’s impossible to place boundaries around infinite. It’s really limited to the extent to your imagination in terms of how you can go about utilizing the system and the more capital you put in, the more capital you get out. It’s ridiculously simple. Mm hmm.
Erwin Szeto [00:29:25] And then this is also similar to traditional insurance, where there’s a benefit received after you die.
Jayson Lowe [00:29:30] Oh, yeah. So there is a death benefit that is paid income tax free to your named beneficiaries. And that death benefit, if the policy is engineered properly, that death benefit will rise every single year with no increase in premiums ever. And as a co-owner of the company, you participate in the divisible surplus. By way of dividends. And these carriers that we’ve been working with have been declaring and paying dividends since 1848 in our country. And so if you know this so Erwin, let’s boil it down to simplicity. You have capital. It must reside somewhere. You’re seeking an opportunity. You can warehouse that money and become a co-owner of the company that you’re warehousing it in. And that company has been profitable every single year since inception for the past 175 years. And you know that there’s a really high probability that that phenomenon is going to continue. And you’re contractually guaranteed to receive a daily growing pool of financial value and a death benefit that’ll be paid income tax free. And there’s no taxation on the daily accrual of that growth of cash value. There’s no taxation on the death benefit. How much of your capital do you want flowing through that business? And logic would dictate. Is this logical? Yes. Are you motivated? Yes. Do you recognize that your capital must reside somewhere? Yes. Then what better place to have it reside than here? And that’s when the conversation comes up. Well, what if I want to invest in real estate or the stock market or things like that? That’s the whole point, is that from that place you can do those other things. So it’s not an either or. It becomes and as well as that’s why we named the book The End Asset. It’s not the either or asset. It’s the end asset. Take control of this function as it relates to your needs. And from that place you can go and invest capital, grow your real estate portfolio, trade in the stock market, whatever it is that you choose to pursue, knowing that your pool of financial value is still growing uninterrupted every single day. That is a very peaceful, stress free financial existence. And it has to be done incrementally over a period of time. It cannot be achieved overnight. Much like your experience in the real estate business or other investment opportunity. It has to be done incrementally, and the longer you do it, the more efficient it gets and the more efficient it gets, the larger your pool of financial value becomes. And sooner or later, you’re going to die. And when that day comes, your beneficiaries are going to get back everything you ever put in, plus more. The only loser in the scenario is Revenue Canada, unfortunately.
Erwin Szeto [00:32:24] But there are many levels. I guess part of the point for us to get insurance was to cover up all of our liabilities.
Jayson Lowe [00:32:31] Oh yeah. And you know, people say, well, you know, I’ve got my portfolio will cover that or I have enough assets to take care of any of my terminal tax obligations. Well, do you know what the tax rates are going to be when you die?
Erwin Szeto [00:32:47] You got me higher.
Jayson Lowe [00:32:48] I don’t know.
Erwin Szeto [00:32:50] I’m guaranteeing they’re going to be higher.
Jayson Lowe [00:32:54] You and I and your listeners, I think, are conceptual and intelligent enough to know that if the government, regardless of political leanings, that doesn’t matter. If the government is spending at the rate that it’s spending, where is the money going to come from to pay the bill? It’s going to come from taxable accounts, taxable income, taxable goods and services. Well, if tax rates go up, doesn’t tax free become instantly more valuable. And so if you have a death benefit. Let the insurance company take care of that tax bill rather than having your estate take care of the tax bill. One way is a lot cheaper than the other. And sooner or later, everyone listening, everyone watching, you’re going to pass away. And when that day comes, you know, one of my late mentors, the late Bob Shiels, he said, you know, Jayson, I wish everyone could die once just for a week and see the problems that they leave behind and this dividend paying, participating whole life insurance contract. If you live a long time, you’ll be a hero. If you die early, you’ll be a hero and you get all the financing characteristics, control and flexibility while you’re alive. The opportunities become endless in terms of what you can do from that place in that good.
Erwin Szeto [00:34:11] That’s great. Now, Jayson, you were saying how if you have available capital opportunity, it has defined you. I’m sure some people, but some people are saying 5 to 7% is a lot to pay. Yeah, but folks should do like second mortgage lending, for example.
Jayson Lowe [00:34:26] Oh, my goodness.
Erwin Szeto [00:34:27] They can likely beat 5 to 7%.
Jayson Lowe [00:34:29] So let me share with you a real story here. So just recently, I was speaking with a client of mine who took out a $70,000 policy loan, and he took advantage of an opportunity that had tracked him down. And he said, you know what, Jayson, I’m going to track this because, you know, I want to understand the advantage of what I just did now that I’ve actually executed the process. So his daily simple interest on that policy loan was just over $12 a day. Is cash values rising at $67 a day? And he gets to re access everything that he repays. So it begs the question, if I’m going to repay the loan on my terms and regardless of the rate I get to re access all the money that I put back in. Does the rate matter to me.
Erwin Szeto [00:35:22] Especially when you can often beat it and many, many opportunities to beat it?
Jayson Lowe [00:35:26] Oh my goodness. The daily cash value growth alone beats it because you’re not withdrawing. There’s no money leaving your policy. You’re borrowing against your accumulation of value, not from it. Big, big difference. And when you experience that. Oh, my goodness. You want that pool to grow because you want to continue to take advantage of more opportunity that tracks you down. And the great thing about that tool is that we never have a bad review with a client because the values in the contract cannot go down. The policy itself is a unilateral, binding contract. The insurance company is legally bound to fulfill those contractual guarantees, and there’s not a single documented instance that’s ever been brought to my attention in this country where a life carrier has failed to do so. And so that gives me a great sense of confidence and peace, if you will. And our clients just love it. They rave about it. And there’s a reason that we have hundreds of five star Google reviews. It’s not because we bribed people for them. These are legitimate people who are saying this is all that and a bag of chips. Isn’t that good?
Erwin Szeto [00:36:35] It is good. And then the show is called a show about real estate investing. So we do cover all the other things as well. There does seem to be more value with type of whole life also we’re talking about. Yeah. So it does cost more than does. I think that’s why most people don’t have these policies. They’re doing like I have a small term life policy. For example, you know, when I used to work for corporate, we had a small life insurance portion in our benefits as well. But that wasn’t like this.
Jayson Lowe [00:37:01] No, not that.
Erwin Szeto [00:37:01] I’m sure that costs less as well.
Jayson Lowe [00:37:03] Oh, yeah. Well, look at it from this vantage point. So, for example, if we take a 40 year old male, I’m just going to pick 40 year old male nonsmoker. We can get $1,000,000 of term life insurance for about 30, 35 bucks a month. Now if that person is renting the death benefit so there’s no equity building up inside that policy, you’re just renting the death benefit if the person rents it for a period of ten years, 20 years. Do you believe that the insurance company thinks that person is going to die within that window of time? Not a chance. It would be horrible business to say we promise contractually to pay a million bucks in exchange for 35 bucks a month. If we believe you’re going to die within that 10 to 20 year window. Less than 2% of term policies ever paid the death benefit. Because the closer you get to your projected mortality, the higher the cost of insurance. So we share with our clients term insurance is too expensive. You want a permanent solution to a permanent problem.
Erwin Szeto [00:38:08] Right?
Jayson Lowe [00:38:08] You can’t solve a permanent problem with a temporary solution. And so that’s where this comes into play. And I’ll share with you whether your listeners, our viewers are making $10 an hour or $10,000 an hour. They need to be implementing this in their lives. We have clients that deposit as little as $100 a month into their policies. We have clients that deposit multiple six figures a month into their policies. And so if you’re somewhere in between, those two numbers are when we can help. But you’ve got to start somewhere.
Erwin Szeto [00:38:38] It’s actually a good place to leave off the show. Know your type of time. Where can people start their learning journey about this or where it folks are? Because again, I have some listeners who are pretty further along. They already have a significant amount of insurance. Now they’re probably asking themselves if they had the right one. So what are the next steps for, for people?
Jayson Lowe [00:38:57] Well, two things. So, one, as a favor to your listeners and viewers, without wanting to interrupt any relationship that they may already have with an existing life adviser or financial planner or whomever. We have no intention of interrupting those relationships as a favor to you and to your listeners. We’re happy to look at any existing policies that they may have and give them good guidance on what they should do next. If people want more information because our newest book is just hot off the presses, I will absolutely encourage people just ease on over to end asset. Okay. Again, that’s and asset. Okay. Get your hands on a copy of the book. You’ll be glad you did. And our primary website, ascendant financial dossier. That’s our world headquarters ascendent financial dossier. And when you get there, there’s a free, unguarded. You don’t have to provide your email, address, your name or anything. There’s an unguarded access to a full overview on the process of becoming your own banker, the infinite banking concept. You just have to scroll down the page, click on video. In a way, you go. And my hope is, is that those resources will be helpful to all of your listeners.
Erwin Szeto [00:40:08] Awesome. Amazing. All right. Thanks so much, Jayson. I think we’ll be talking in weekend or two Kong for book. Another one of those as well in the future.
Jayson Lowe [00:40:16] I look forward to it and we’ll have you back on our podcast, too. That was a lot of fun.
Erwin Szeto [00:40:20] Thank you. Thanks so much. All right. A great weekend.
Jayson Lowe [00:40:23] To give my best to Terry.
Erwin Szeto [00:40:25] Well, there.
Jayson Lowe [00:40:25] Are a lot.
Erwin Szeto [00:40:34] Before you go, if you’re interested in learning more about an alternative means of cash flowing like hundreds of other real estate investors have already, then sign up for my newsletter and you’ll learn of the next free demonstration webinar I’ll be delivering on the subject of stock hacking. It’s a much improved demonstration over the one that I gave to my cousin Chubby at Thanksgiving dinner in 2019. He now averages 1% cash flow per week, and he’s a musician by trade. As a real estate investor myself. I got into real estate for the cash flow, but with the rising costs to operate a rental business, it’s just not the same as it was 5 to 10 years ago when I started. Never forget a cash flow reduces your risk. The more you have, the more limbs you can absorb. And if you have none or limited cash flow, you’re going to be paying out of your pocket like I did on a recent basement flood at my rental in St Catherine’s, Ontario. If you’re interested in learning more about Stitcher for free from my newsletter at WDW DOT Truth About Real Estate Investing Dossier, enter your name and email address on the right side will include in the newsletter when we announce our next Free Stock Hacker demonstration. Find out for yourself with so many real estate investors are doing to diversify and increase our cash flow. And if you can’t tell, I love teaching and sharing the stuff.