Give accumulated corporate wealth a plan for use and transfer

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Before you became one of the [music] top financial advisor in Canada, you were a tech entrepreneur, right? You built multiple companies and then the 2008 financial crisis wiped out [music] most of his savings despite doing everything his financial adviser advised him to do. You know, I thought I was smart [music] and had some financial knowledge and stuff. Then I realized I really wasn't and I didn't. You're right. In 2008 ended up losing a bunch of money when everything crashed and it was really [music] out of my control. people that were in the game saw it coming like a year in advance. Whereas me, it just kind of happened to me and that wasn't cool. He went searching for what the wealthiest families in [music] Canada were actually doing differently. Life insurance went from like number six or seven to number one or two of things that you can still do if [music] you were trying to save taxes in Canada.

It's an unlimited TFSA that you can do if you put the money in the insurance policy, right? But they also got rid of like trust planning. They got rid of income splitting. They got rid of a lot of planning that you could do at a [music] corporate level where you could minimize your taxes. So life insurance is really like the last tax advantage [music] thing that you can do inside your corporation that's not super complex, right? Start now even if you think you're not ready. [music] A lot of these things, the biggest factor in the success is the amount of [music] time that you have it. Welcome to Beyond [music] the Bottom Line. I'm your host Joey Lon and this show is about pulling back the curtain. how the ultra wealthy actually protect and grow their money without the gatekeeping or the complexity.

So my guest today has one of the most unique origin stories we've had on the show. So very excited to have you on Lan. Uh Lan came to Canada as an immigrant at age five. He started working with paper route in the third grade. He went on to build four companies as a tech entrepreneur himself and then the 2008 financial crisis wiped out most of his savings despite doing everything his financial adviser advised him to do. So instead of giving up, Lo, he went searching for what the wealthiest families in Canada were actually doing differently. And what he found changed the trajectory of his life and it might change yours as well. So in 2011, he founded Safe Pacific Financial, which is now one of the most respected independent financial firms in Western Canada. He's been ranked a top 30 financial adviser in Western Canada, top hundred in Canada, and is a member of the Million-Dollar Round Table.

and he just authored a book called Wealth Multiplier that you can check down below in the description that reveals the tax efficient strategies of Canada's wealthiest families and business owners that have used for generations. So with that said, LA, welcome to Beyond the Bottom Line. Thanks so much. That was a great intro, Joey. Um, yeah, it make me sound like a superstar. Well, you are excited to have you on. I think you're going to give a lot of value for Canadian business owners, wealthy, successful business owners in Canada that are making a lot of money and are kind of frustrated about where uh those tax dollars are do are going and how little control they think they might have on those tax dollars, which could be a myth that we're going to uh potentially unbuss uh today on this on this show.

So, I want to start with this, Lauram, before you became one of the top financial advisors in Canada, you were a tech entrepreneur, right? You built multiple companies. You were making money. You were doing everything by the book that the financial system, your CPA, your financial adviser told you, right? Mutual funds, blue chip stocks, the safe place. Then 2008 happened. We all know what happened uh back then. Uh but I want you to take me back. What did it feel like? What did it teach you about the difference between making money and keeping the money that you were actually making? Yeah. First, just want to say uh welcome and hello. Happy to be here and to all of your uh your viewers and subscribers. I know we might not have ever met, so just want to say hi.

Uh my name is Laurent Mun and I'm one of the partners at Safe Pacific Financial and we're based in Vancouver, but we're licensed all across Canada. Um but yeah, it's I've always been kind of an entrepreneur. So my first company was a jeans design company. Uh so we made like jeans and hoodies and t-shirts and hats and things like that. Um and then from there started really at the beginning of the.com. So, we had a couple of big websites that were big social websites that advertised um nightclubs and special events across the country and sold a lot of tickets and put a lot of people on the guest list. Uh that was clubbes.com and clubzone.com. If anybody's old enough to have been partying in the 2000s, you probably were on those websites. And then, um yeah, during that time, a lot of money came through my hands.

Uh not a lot of money stayed in my hands. And you know, I thought I was smart and had some financial knowledge and stuff, but I then I realized I really wasn't. And I didn't um you're right, in 2008 ended up losing a bunch of money when everything crashed and it was really out of my control. I didn't know why or what. And you know, now looking today, you know, that financial crash, people that were in the game saw it coming like a year in advance u or more. and uh whereas me it just kind of happened to me and I uh that wasn't cool. So [clears throat] um basically went and kind of started doing my own financial research [snorts] uh online, subscribed to a couple of uh newsletters and like educational like courses and things like that.

So took a bunch of courses that were maybe a little bit um considered alternative but really opened my eyes to just kind of the breadth of the financial world and the fact that there's a lot of strategies that are out there in all different parts of the financial world that that don't really get play upfront, right? Like most people just get your standard basic financial information, which is great for a lot of people. Um but it's not great when you need better advice than that. And I was going to ask you because I we you said everything is was done by the book, right? And you still lost a decent amount of money. So if the book is broken, what is the right book for for business owners maybe at the time? What what going back?

What would you have done knowing what you know now? Well, the right book is obviously this one. [laughter] I know we didn't even plan that, but that was a perfect setup. I had to take it. Um but yeah no I think uh the way that the world is going and the way that people are getting financial education today is a lot different than than before right like we have the internet we have YouTube we have social media the democratization of that kind of information has really happened right you don't need you know for [snorts] a lot of the strategies that we do um you know we work if we would have been doing this 20 years ago or 50 years ago you would have had to have a tremendous amount of money to go and meet the right person who knew how to do this and who was probably one of the only few people in the province or the country that could do this and it would be super expensive and you probably wouldn't get access to them unless you were introduced or like somehow found a way.

Now, you know, you could watch videos on YouTube and watch like super complex financial uh things uh from [snorts] every anywhere from insurance to crypto to options to stocks to day trading, swing trading, like all sorts of houses, buying laundromats, car washes, like all it's all out there. Um so, you can get the information now. And it doesn't just have to be on YouTube. like there's also specialized channels where where they get really deep in this or some you know some courses are worth buying and and they get really deep into it and they help a lot. Uh so I think that kind of democratization of information has really helped um just give people access to things that they would have never had access to. And also just making things the way that that technology has evolved and now you can open accounts digitally.

You don't have to, you know, if you don't live in the big city, you you can still do all the stuff. You don't have to go to some broker's office in Toronto or Vancouver to do it. You know, most of our meetings for with clients are all on Zoom now. And um you know, it's it's very rare that we have inerson meetings anymore. We used to do it only in person meetings but um but now this like you can do whatever from wherever and you can get the information and you can meet the right people and uh it's it's amazing the that you could even do this right like this was unthinkable just a decade ago like a little while ago right like unthinkable what the access that you have now so you think the biggest difference is access to information nowadays which I totally agree with you and being able to have not only access to information but access to people, right?

If you were in in Toronto and you wanted to meet with you that maybe you're in Vancouver or Alberta, wherever it might be, Western Canada, we'd have to fly. You'd have to fly in, right? Um now you can just Exactly. Now you just go to a website, take a call with you, and it it it the the the barrier to entry is much lower in information and access. But what I have to say to that is like again I'm I'm the type of business owner which I know a lot of others are like that as well that before taking action on anything I want to be super educated on the thing before putting myself into it. Right? If I want to invest in Bitcoin I want to understand what Bitcoin is. If I want to talk to you and or or other people like you that has access to strategies that can help me save taxes then I want to know by myself what am I implementing in my own business.

And the problem with too much information is that we don't know where to start because there's too much information. So what do you recommend in that area? Yeah. Uh so there's a few things there. Um [snorts] again the the breadth and volume of information that's available now is fantastic, but it also can be really detrimental um if you don't focus. Right. So, um, all of these financial strategies that you, well, not all of them, like some, there's definitely some that don't work, but like many of the financial strategies you see online do work and they are the right answer for the right person in the right situation, but those same exact financial strategies also don't work if you're the wrong person in the wrong situation and you, you know, so and also they they work if you commit to something and they don't work if you jump from this to this to this.

So, you know, once you start clicking on a couple of financial things on YouTube, that algorithm is just going to hammer you with all sorts of money-m options that you can do, right? And and a lot of these things work and a lot of them don't work, right? So, you'll get, I don't know, for I'm just thinking of my personal YouTube feed. I'm [snorts] getting stuff for like 200 different ways to buy rental properties. Uh and then in this country or that country or this country, different ways to do lending through different banks, different ways to do lending through not banks, different ways to do insurance, different ways to do crypto, different ways to do stocks, different ways to do ETFs, to do mutual funds, to buy boring businesses. That's a huge trend right now.

Or uh roll things up and sell it to private equity. Like there's a all of these things work [snorts] if you do them. And if you commit, you say, "Okay, well, I'm going to go and do this thing for like 10 years and I'm going to be really good at it and I'm not going to do anything else. I'm just going to do this one thing. You will get good at it and it will work and you'll probably make money if you pick something that works. Uh but if you try doing this strategy for 3 months and then it doesn't make you a million dollars in 3 months and then you're like, "Okay, well that obviously doesn't work. Now I'm going to go try this other thing and that doesn't work and then I try this other thing and then if you just keep bouncing, those things are never going to work, right?" Um a lot of what we offer and kind of the clients that we work with, they're gen they're business owners in Canada and they're usually profitable.

Um, so they have money at the end of the year saving and retained earnings. And the way that they get to these positions is by committing to that business and doing it for an extended period of time and showing up every day and and doing the job um and building that business and making money, right? And and growing that business, hiring people, you know, doing your marketing, doing your sales, doing all this stuff. And then uh when it comes time to like what do you do with the actual money? How do you invest it? They're also thinking of things like on a very long-term basis. and they're like, uh, you know, I'm going to commit this for like a period of time, not I'm going to put some money into this thing and if it doesn't double in 2 months, I'm quitting cuz it doesn't work.

And you're like, that's a very unreasonable expectation. But we do have there's people out there that that think that that's how money works. Um, so there's a lot of education that needs to go along. But yeah, I think the the breadth of financial information today is fantastic. Uh, but how you can trip yourself up is by trying to do too many things, right? I sort of use the analogy with people uh people understand sports generally. So [snorts] like if you want to be a really good hockey player, you might also know how to play football and you might also know how to play tennis and you might also know how to play soccer and whatever. And that's great. You're a rounded athlete. Fantastic. And maybe you enjoy doing those things on the weekends. But if you're going to commit and go and want to join some sort of like legitimate competitive league in hockey, you also need to drop those other things and commit all the way to hockey because you can't be a hockey player and a football player and a soccer player and a tennis player and a baseball player and a poker player and a you know have time for your kids and a and a and right like it just doesn't work.

So, same thing when you're when you're investing or when you're growing wealth or you're trying to keep your wealth. It's [snorts] about finding the thing that you want to do and then committing to it and then also saying no to all of those other things that are not directly what you want to do. And that's the hard part. That's where um right there just so many options today that it's really hard to pick one and and to just stick with it. Yeah. And I I definitely want to dive into what you think that one uh vertical should be. We're going to touch on that later on. But just to to to summarize what you just said, what I took away from that and I think that's the right way to look at it is that there's again there's so many ways that you can skin a cat, so many ways you can invest and save on taxes and do all that stuff.

But find spend a lot of time finding that what that one thing that you want to go deep in and then go deep on that until you've did all the options that you can to make that work, right? Instead of just doing a little bit of this, a little bit of that, a little bit of that, which is where a lot of people might uh fail through the um paralysis by analysis% type of syndrome. No, I get that. I like that a lot too. And um I know you talked we talked a little bit before and you were talking about champagne problems for business owners. You want to touch on that? What does that mean? [snorts] Yeah. I don't we uh we came up with that name before Taylor Swift put out the song. So it was kind of cool when she dropped that song.

Yeah. Now if you search champagne problems like obviously Taylor Swift dominates us we [laughter] can't compete. But um but yeah, it's just um you know, I come from like a late 90s, early 2000s hip-hop background, right? And one of the biggest tracks was More Money, More Problems. And it does, it's true. It's just you get you get to a different level of types of problems, right? So our clientele, their problems are different today, especially being profitable and making hundreds of thousands or millions of dollars every year. Um they're different than than they were before or if you were not at that level, right? So, a lot of our clientele's problems is maybe they are paying a tremendous amount of tax. Um, or they have a company and the money's in the company, but how do you get the money out, right, without losing half of it to tax?

Um, right. Generally, our clientele will be they'll be paying themselves whatever they need to live. So, they're paying themselves a salary or dividend. They'll arrange that with their accountant, however that however that want they want to make that work. And then whatever money they don't need to pay their mortgage and car and kids and food and flights and whatever they're spending money on, um they keep it in the company because you're taxed at the corporate rate versus your uh your income tax rate, your personal income tax rate. And so they feel like that money that's in there, that's great, but if I want to take that out and I want to go buy a pair of shoes, I don't want to pay 50% tax on that money, right? And like how do I how do I use my money um now?

And then and how do I also another problem kind of like our champagne problems that that people have is is how do you grow that how do you like preserve that money but then also grow it in in a reasonable safe way right so generally our clientele will um you know they'll say I can make the money I will grow my money like that's my job I I know that whatever money I'm going to put into my business it's going to come out more on the other side and I full control over that and I can make it as big or small as I want. This money that I have saved, I want it to grow, but also I don't want to spend a ton of time doing it because it's not my job. You know, I have an electrical company and so my job is to make sure that these 40 trucks are on the road as much as possible and that my guys are working, right?

My job isn't to go and watch the stock market every day. Um, but I do want it to grow because I know that if it's sitting in a bank account doing nothing or earning whatever point nothing percent um that I'm tech you're actually losing money to inflation, right? And they understand that money, right? And so how do you make that money inside the corporation grow? But then also how do you not lock it up into something if you need the money, right? So say again electrical company contractor uh you know maybe they want to buy uh a competitor is retiring and they want to buy the company or they want to buy some new machine or they want to hire a bunch of people or start a new marketing campaign and build a new website I don't know to whatever you want to do and um how do you use that money then right and so I don't want to have that money all invested and tied up and then I'm going to need a few hundred grand to do a thing but I like do I hell do I what?

Right? So, you want to be able to grow the money, but you also want to be able to access the money now. Um or, you know, for for positive or negative things, right? So, it could be to take advantage of opportunities, but it could also be for like an emergency comes up or say COVID shuts you down and uh you know, you still got to pay the rent, you still got to keep pay for the lights, you still got to pay like you still got to pay for stuff, right? So, but you're not making any money. Um and then eventually they plan on growing this pile of cash for some time and then eventually ideally passing it on to family uh which is usually people's kids right to their beneficiaries or they want to donate or they want to you know do whatever they want to do with it.

So, you kind of have this kind of three-part champagne problem that comes up when you're a successful business owner in Canada is how do you grow the money safely um with and also without it being taxed at the highest marginal tax rate because when you're investing inside the corporation, you know, you're you're automatically taxed at the top. Um so, how do I grow that money safely? And it also counts towards your passive income rules. So, if you're growing cash or like money inside your corporation in Canada and it's not directly tied to your operating business, then that's considered passive income. And your passive income could actually like ruin your small business deduction on the other side and it could become very expensive to make money um passively in Canada, right? So, you want to grow it without being affected by the passive income rules, without paying too much tax.

You want to use it to take advantage of opportunities or to take advant or to like protect from crisis. Uh and then eventually how do you pass this down to your kids uh in a in a tax efficient way and that's really kind of like the champagne problem that we solve. Interesting. Yeah. And I think you just touched on uh the again the four functions of wealth that you talked about right the the keeping, the growing, the using and the transferring which is where all of those have a tax event that we would like to to prevent. Um, [snorts] but why why are are use and and transfer where the real money is that you explained about? Sorry, what do you mean? Why why is it when why is it in the using and the transferring of that wealth that you say that the real money is in those two things?

Oh, that's huge. Um, so I don't think a lot of people quite understand how expensive it is to die in Canada. Um, it's one of the most expensive things you can do and let me explain. Right. So we tech we don't have anything that's called specifically an estate tax, right? They have that in the US. They have an actual estate tax. In Canada, we have what's called a deemed disposition uh on death. So it assumes that on the day before you die or like on the day you died, you sold everything that you owned at fair market value. So basically your everything becomes taxable. Um right. So, if you don't set up your estate plan correctly and you don't plan for it, you could lose anywhere from 40 to 70% of everything that you own to tax uh just because you died and you didn't have an estate plan set up properly, right?

So, there's there's definitely plans and things that you can do to get around that because you should absolutely not be paying that if you put any time and effort into into planning. Um, and it's super expensive and your kids don't want to pay that and your wife doesn't want to pay that and your husband doesn't want to pay that. Nobody wants to pay that. It's crazy. Uh, and most people that we talk to generally believe that they can spend their money better than Ottawa can spend their money, right? So, most people would rather keep the money in their pocket and choose how it gets distributed versus send it to Ottawa and then Ottawa can choose whatever they want to do with it. Um, [snorts] so that is one of the most uh wealth damaging things is not having a proper estate plan.

And I'm just talking about just if everybody likes each other and the tax man just takes a huge chunk. I'm not even talking about if people don't like each other and like your kids are fighting or you uh you have an ex or something like that or you have somebody that you owe money to, right? Like that that can complicate estate plans and make everything more expensive. Um, [snorts] and then on the using, right? So you were talking about using and transferring. One of the most important things to do when you're using your money is figuring out like where am I going to get it and how much is it going to cost, right? So, is that money that money is going to cost you either you're going to pay interest to use it if you're getting it from someone else or if you get it from yourself, it's going to cost you the opportunity cost of not having it invested or not using it for something else, right?

So, you're going to pay for it one way or another. Um but where you can really make a ton where you can really like accelerate your growth is in having access to capital that you can use to take advantage of opportunities, right? So um you know we talked about CO a second ago that was a huge stock market crash. Anybody who bought in at that beginning period of COVID, uh, when everything was down, if you bought anything reasonable, um, even some things that were crazy that you doubled or tripled or quadrupled your money, like within a couple of years, it was it was a huge rally after that, right? And however that happened, there's But, um, you know, we had one client actually that uh that did really really well. very smart guy uh had um had cash had recently sold a company and had had a significant amount of cash uh available inside the company and had said to us so this would have been maybe like 2018 or something like that and just said the market is way too hot uh is way too high right now like something bad is going to happen and I want to have a bunch of cash ready when that happens I'm going to buy and literally like a year later or like a year and a half later [clears throat] everything just collapsed collapsed.

And what he [snorts] did, he didn't even do any crazy. He just bought I think like three or four different Canadian bank stocks uh [snorts and clears throat] and bought like a million dollars worth of shares that he So, what we had done, we haven't gotten into the details of this, but we had set him up with a whole life policy that that had cash value inside of it and that [snorts] he had set up a loan against this policy at the bank. So, he had a line of credit at the bank set up for this before CO happened. And then um when that crash happened, he went in and bought a million dollars worth of Canadian bank stocks at the bottom. Like basic he hit it like like the week that it that was right at the bottom.

It's like the perfect execution, right? Like it this not everybody's going to be able to do this, but he did it and he was waiting for it. He had it planned and and and it happened. And basically a year later, all of those bank stocks had recovered. So he doubled his money. He sold half, paid off the loan, and then kept half. So, he has now, well, five years ago, he had a million-doll portfolio of Canadian bank dividend paying stocks for free. Um, [snorts] right, he paid to he paid some interest to to use the money for like a year and a half or something like that, whatever it took. Uh, so not only does he have these stocks for free, but he's got a million dollar portfolio and Canadian bank shares are paying anywhere, you know, depending on on what their value is, anywhere from like four to 5%.

All right? So, he's also getting like 50 grand a year just in dividends for for free for and he'll get this forever as long as he keeps those shares, right? And as long as um Canadian banks keep paying dividends, which I imagine they're going to. That's interesting. So, what do you think got him in that position? Was it that he was he had you [clears throat] touched a bit on the whole life cash value? Was that a big part of it? Was that just opportunistic? That was a big part of it. Yeah. Well, he had a plan and he was ready. And when it happened, he executed, right? So, obviously with investing, everybody knows you're supposed to buy low, sell high. Yeah. Really easy to say, way harder to do. Um, but he did. He bought low and then sold high.

And so what he we had done in the beginning is he come to us um looking for what's called an immediate financing arrangement which is a type of strategy where you can put uh a big amount of cash into a whole life policy and then uh you can take that that policy to a bank and use the policy as collateral uh to get a loan from the bank. And so we had done that with him. And you know this process takes some time. It takes months. Sometimes it takes years to to set this up because there's a lot of moving parts and it's um a lot of underwriting going on. there's a lot of stuff that goes on that we that we do for for clients and um and so he set this up and he had and he had deposited this amount of money already into the policy, right?

So um there was the million dollars was there already and and then when this happened, he just took uh [clears throat] a line of credit from the bank that he already had set up. It was already it was already open and then he just took the money, bought the stock and um and then turned around and sold it like a year later and doubled his money. M and at what range was that was that business owner at revenue-wise? So he had just sold his company for uh like eight figures and so he had like millions of dollars of cash on hand and then he was planning like what is next? And um a big part of that was going to be buying real estate. Uh a big part of that was building the stock portfolio and just basically setting himself up to be like forever set up.

And um and now he's you know he's generally the business owners that we work with like if they're going to sell they're probably going to be back in business like within a couple of years like they don't generally sit around and do nothing. Yeah. But we have tons of like this is actually really why I like doing what we do is because we work with cool people doing cool stuff, right? So like the these kind of this is what gets me excited is like you could probably see my like I'm probably lit up right now. But I I I want to touch on um like if if a business owner watching this, let's let's go into like the details, the value, like why a business owner should be listening to the conversation right now. Let's say a business owner, they have over $500,000 every year in the retained earnings sitting in their in their holding company, for example.

Um, what does the wealth multiplier account like you guys call it actually do with that money that a GIC or market portfolio can't and what is it the strategy that these guys should implement um to to keep as much as possible that money into their hands? Yeah, that's a great question and it's not a question that gets answered in a lot of like traditional kind of media [clears throat] because it's not a problem that affects a lot of [snorts] people. Um, right. Not a lot of there's not a lot of business owners and there's not a profitable business owners saving money every year, right? Like it's it just it's a very very small niche of people. Um, but yeah, what do you do? Right? You've got you're earning you're paying yourself your your salary or your dividend, so you're living life and that's great.

And then you're also saving another about 500,000 in retain earnings every year. So, there's a few things you can do with that, right? Like, what do you want it? Some people do nothing. They just leave it in a bank account, which I don't think is a great idea because you're just losing to inflation every year. Um, other people want to invest it in some sort of way, right? Whether they're invested in stocks or GIC's or mutual funds or whatever it is, that's great, but that counts as passive income. So that's going to number one, it's going to be taxed at the highest marginal rate of whatever type of uh income you're earn whether that's interest or capital gains or dividend like however you're earning the money. Um [clears throat] right so it's taxed very high and as that value goes up it affects like as you earn money every year from that it affects what's called your passive income rule.

So, if you if you qualify for the small business deduction in Canada, uh right now in BC, you would be paying around um you'd be paying around 12% corporate tax on that money, right? [snorts] But then when you break out of the small business, like when you don't have access to the small business deduction, your tax rate goes to 27%. So, it's like a 15% jump. Um which is significant, right? you know, on 500 grand, that's uh 5 time 15, that's $75,000 in extra tax that you would pay by being in a different tax like by not having access to the small business deduction. So, the way that that passive income rule works, for every $50,000 of passive income that you earn in the company, it takes away um $5 for every one until uh until eventually it takes away your entire small business deduction, right?

And then when that happens, you you're now into a whole new tax bracket for the corporation. And so a lot of people want to stay in that kind of um they want to keep that small business deduction. And so one thing that you can do to grow your money and to have it growing in a safe kind of secure way is you can wrap it up in what's called a whole life insurance policy. And so these a participating whole life insurance policy. So what that does is it gets you life insurance which you probably need anyways as a business owner. And most of our uh clients have families and they have mortgages and stuff. So, they have a high insurance need, uh, which is important. And [snorts] then the other side of that account is what's called a cash value.

So, you could put that 500 grand, uh, that you're saving every year into this insurance policy and then have it grow. And the way it grows is from the insurance company participating account. And so, this participating account is the insurance company investing this money in a very conservative, safe way, similar to like a fixed income kind of thing. They're very fixed income heavy but um you know you're investing like an insurance company whether that's a sun life or a manual life can Canada life equitable life like whatever whatever they do with the money right that because it's wrapped up in insurance it's it's tax exempt and it doesn't count towards the passive income rule. So you could have millions of dollars inside your cash value of your life insurance policy growing with a dividend. So today uh the dividend depending on the insurance company that you're working with will be anywhere from like 5 to 6%.

Right? Uh it's dividend scale interest rate is what it's called exactly in the insurance world. So your money is growing. So it it checks that box of I want my money to grow. I don't want to just leave it in a bank account. And then like I was saying you can take these policies to a bank and the bank will leverage them. So, um, a lot of people recognize leveraging an asset like say maybe you leverage a house, you get a a home equity line of credit against your house, right? So, say you have a million-doll house and you could get like a 70% loan of value. You could get a line of credit on your house for 700 grand. This is very much the same except you don't need the house. You're just using a piece of paper that's called an insurance policy, right?

And the insurance policy is the collateral and the cash that's inside the insurance policy is the collateral, right? So, if you've got a million dollars of cash inside this policy, the banks will actually lend you um anywhere from 90 to 100% of that [snorts] cash value. So, they'll actually lend you more on the insurance policy than they will on your house. So, if you had a million dollars of cash inside a life insurance policy, many banks would get you 100% loan to value against that and they would open you a line of credit or some sort of loan uh for a million dollars, right? Right? So, it checks that box as well of like how do I grow my money in a safe way without being subject to high tax and without affecting that passive income rules and affecting my small business deduction.

[snorts] And then how can I uh use the money, right? So, the money is invested, it keeps growing, but then you're also able to use it by using the loan, right? And a benefit of this is that your money stays inside the policy growing, right? So, you're earning this dividend every year, but you're still able to use the bank money, the loan money to do whatever you want, right? So, say uh you know, you need to buy a new machine or you need to hire some people or whatever you're going to do to grow your business or to invest or whatever you want to do, you can now do that through this leveraged uh system, right? So, you're you're able to grow the money in a safe way and you're able to use it. And then again, because it's wrapped up in life insurance, eventually this is going to transfer to your beneficiaries.

And then again, life insurance pays out in Canada taxfree. And in this case, if you were doing it in your corporation, it would pay to the corporation taxree and it would create what's called a capital dividend account or like a CDA. Um, and then that CDA can flow to your shareholder beneficiaries in a taxfree way. So, it's a way to to grow your money, use your money, transfer your money, all in a taxfree way. with much bigger limits than you would normally get through like a government registered plan like an RRSP or TFSA. Um, and you just you have way more control over your money. Um, [clears throat] and and way more guaranteed access to it, right? And so you're able to take advantage of opportunities as they come up. Interesting. So let's say I have six figures a year in retained earnings.

So pretty successful business owner, 100K, 200K, 500K retain earnings every year. If I were to keep it in the business, I my um if my passive income from those retained earnings are above $50,000, I would go directly from you said 13 to 27%. Yeah, it depends on your province, but here in BC it would be from 12 to 27, but there all the provinces are like within a percent, right? Double actually. Yeah, it is actually. I never thought I just said it's 15% higher, but yeah, it's more than double. It's 100%. How are you? Yeah. So it doubles. Yeah. Okay. [snorts] Uh so that's painful, right? So it starts at $50,000 and then by the time you get to $150,000 of passive, you have no more small business because it takes away one to five.

So like for every $1 passive, it takes away $5 of your business deduction, right? So for so if this person here was super conservative and had $500,000 of retained earnings every year, say they got they've been doing this for 6 years, they got $3 million and they're earning um they have a GIC, right? Or say say they have a GIC doing call it's like 3 4% right now. I call it 3%. Right? So you're going to you're you're going to lose your small business deduction like the whole thing, right? And and not only that, but the interest that you're going to earn off that GSC is going to be fully taxable at like 50 51%. Because it's like interest income is is one of the highest taxed. Interesting. Okay. And then the alternative to that that you're saying is having a corporateowned whole life insurance to your business, right?

Where you can contribute [clears throat] your retained earnings to that instead. Yeah. And we do that a lot. So there's a lot of business owners that do that where they contribute their retained earnings into the like into the premium into the cash value of these life insurance policies just to do exactly what we're saying, right? So number one, they need the insurance. So they're key to the business working um right? So like something happens to them, the business suffers or if they have partners or something like that, the business suffers. They're also key to their family, so they probably have kids, they probably own their house, they probably have a mortgage. So if something happens to them that negatively affects the family. So there's like a strong life insurance need. And then as they're growing assets throughout their lifetime um you know the their capital gains on death is only getting bigger because they're going to buy more real estate.

They're going to buy more portfolios. They're going to buy more companies. So these things are going to grow over time and they're going to become very highly taxed when this person dies, right? So there's going to be some sort of need for like a big um a big cash like liquidity event when this person dies because the CRA is going to want to collect a lot of tax money right away when that like that year when that person dies. So again that life insurance creates that cash at the right time in a tax-free way uh when that person dies, right? So, um, so you're you're you're needing it to kind of address the CRA's requirements now while you're alive throughout your lifetime and when you pass away. And so, they need the insurance as a business owner, as a a mother or father, um, as a mortgage holder, right?

So, like that's a big need for the insurance. And then eventually if they want to pass this to their kids, uh the the insurance pays out taxree. It can pay out a lot of taxes for uh all the rest of the port like all the rest of the assets and um and leave something for the kids if you care about your kids which not everyone does. Which I hope you do. I hope you do, but not everyone does. And that's okay. Like if you some people it's not their thing. [laughter and gasps] Oh yeah. There might not be the the best fit for for us working with you then. But uh it's very interesting because I've talked to a lot of adviserss again in Canada and a lot of them talk about again corporateowned whole life insurance for business owners as being one of the best if not the best strategies for wealthy people that wealthy business owners in Canada and affluent people have been using for years and years and and decades and even centuries.

But yet for some reason every time someone hears insurance or life insurance it's like ah it's a liability or I I don't want to spend on that or it's not worth it. And it's funny because one other advisor came on board and he was talking like I do my best to speak all the benefits and then really at the really end do I mention insurance because now they see all the benefits and it's not insurance like just the regular mom and pop insurance that your neighbor has right that doesn't have a business. It's a different kind used for different ways. But why do you think there's it turns off so many people when they hear about life insurance even if the benefits completely eclipse everything that the cons if any? Yeah. Well, there's there's a few things.

So, number one is just most people don't know you can do this, right? So, most people have usually never heard of this. So, a lot of times when we're explaining this to people, they're like, "What do you mean like you can actually do that?" And like, yeah, this is super boring, basic, conservative life insurance stuff. Like, people think this is some crazy trick and you're like, no, this is like the most boring thing that you could do. Um, so it's it's very safe. It's very conservative. Um, and then also just generally, I I find like life insurance kind of uh it has like one of those negative stigmas just in society, right? Like a life insurance salesman is supposed to be a pushy salesman. is there like a used car salesman, right? So, it's got that kind of negative thing which gets reinforced by media or television and stuff.

Um, you always think of the guy on Groundhog Day that he runs into when he steps in the puddle and he he meets that guy that that wants to sell him a whole life policy and you're just like that's what people [clears throat] think, right? Um, and then also there are just some people in our industry that that are pushy sales people as well, right? So, people have that opinion because of a reason. So, this we try to not do that at all. Like I don't like pushy sales people, so why would I be one, right? I I I don't do it. Rob doesn't do it. None of us do it. And we work with people that want to work with us. Like I'm not trying to convince anybody to work with us ever. Like I if if you if we're a good fit, we are a good fit.

It makes sense. We show you the numbers. Like you look at it and you're like, "Yeah, this makes total sense. Let's go." That's the type of person we want to work with. If somebody's doesn't if this doesn't fit, I also don't want to work with, you know, like if you don't want to work with me, I also don't want to work with you. Like why would I, right? Cuz um [snorts] with life insurance, especially these whole life insurance policies, we're setting this up for your whole life. So when we sign up a client, like they're going to be clients of ours for 20, 30, 40 years, 50 years maybe. So I don't want to sign up somebody that I don't want to talk to in 20 years, right? Like if if we are [snorts] if this doesn't work now, it's for sure not going to work in 10 years from now or 5 years from now.

So for us as well, like when we're onboarding new clients, like we're screening up front uh to make sure that this is somebody that like I want to deal with for a while um and I'm happy to deal with and and you know I want to address any red flags up front uh to to make sure that we're dealing with good people. So why you know why do people kind of shy away from the insurance? Actually another big thing too is a lot of people because our industry's got a lot of like specializations. So you have say like investment adviserss, financial planners, you have insurance adviserss, you have and even on investment advisors you have ones who do mutual funds, you have ones who do stocks, you have ones who do and and these are all like specialties, you have private, you have all sorts of stuff.

So the only people that really talk about this are the insurance people, right? Like the investment people don't talk about this because they don't offer it and they don't know how it works. Uh generally and they see this as a threat because if you put money into this insurance policy, well, you're not putting money with them. So you're like taking money away from their AUM. So there's like um they don't want you to do this. They want you to keep the money with them, right? [snorts] And then with accountants and lawyers, which is where a lot of people get their uh financial information from as well. Up until recently, there were a lot of things that you could do to save tax as a business owner, right? So when we would tell accountants like, "Hey, we should talk to your clients about this insurance strategy." Well, they'd say, "Well, we could do this and this and this and this, and if we run out of things to do, you know, we'll call you." So, life insurance used to be, you know, number six or seven on the on the list of things you could do if you were trying to save taxes in Canada.

But then what happened is um under Justin Trudeau's first uh finance minister, Bill Morno, he uh he used to run a company called Morno Chappelle uh which was in our our field in the insurance field. Uh they changed the rules around uh they got rid of a lot of stuff, right? So they introduced those passive income rules, but they also got rid of like trust planning. They got rid of income splitting. They got rid of a lot of uh planning that you could do at a corporate level where you could minimize your taxes. And basically, life insurance went from like number six or seven to number one or two of things that you can still do, right? And um like there's not a lot like you can't have a TFSA in your corporation. You can't have an RRSP.

There's no tax advantage accounts, right? And [snorts] especially with the way that the the current ideology of our of our governments is they're not trying to make it they're not trying to save tax for business owners. They want to tax business owners more. Business owners are not paying their fair share and they're the bad guys and the all the problems in the world are because business owners make too much money. Um so they're not trying to like make it easier to make money in Canada and to not and to like pay less taxes. They're they're trying to do the opposite, right? So life insurance is really like the last uh tax advantage thing that you can do inside your corporation [snorts] that's not super complex, right? Like some people again like I was saying if you're watching videos on YouTube about finances, you're going to want eventually end up with somebody telling you to like move offshore or something like that, which is a super complicated thing, super expensive, super risky, right?

Like unless you're talking about lots of millions of dollars, it probably doesn't make sense for you. Uh but you know we get people asking for that too and you're just like uh dude you made 100 grand last year like don't worry about offshoring anything like settle down but um um yeah so this is one of the last things and it's and it's in the law it's in the insurance act right like the this isn't uh this isn't a novel thing about life insurance like the taxexempt nature of life insurance has been there since the beginning since uh you know for more than 150 years since before Canada for some of these insurance companies right So, uh, this is a nice safe old conservative thing to do and it's one of the last things and it, uh, you know, could rules change in the future?

Maybe. Um, but generally, uh, a lot of people don't understand how life insurance actually works, which is bad from like an understanding perspective, but it's also good from like it prevents politicians from trying to touch it because they can't and they don't understand how it works. Um, so that's actually kind of good. And then also these life insurance companies in Canada are big giant powerful companies that own practically everything. Um so they they put up a fight when you try to affect how life insurance gets taxed or they want or if some government wants to change the rules around life insurance, they're going to uh challenge that. Um, and then there's organizations like KAU and stuff like that that that talk directly to the Ministry of Finance and talk to the CRA about like, hey, yeah, that's great that you want to increase taxes on everybody, but uh, did you think of the ramifications of this and you can't do it because of this?

And so they they work with them uh to make sure that that this doesn't happen. Um, [snorts] but yeah, no, it's a it's a great concept. It's something that I do myself. I've been doing it. It's actually we all do it here. uh at Safe Pacific and um and for the right person, it's it's a slam dunk. Like it when you when you show the numbers, you're just like, "Yeah, this makes total sense." And those are those are great clients to work with. Very interesting. And so I know you so we talked about the corporateowned whole life insurance, but we also touched a little bit on IFA. So the immediate finance financing finance agreement, right? Uh arrangement. Immediate finance arrangement. Yeah. It's not an official name. It's like what banks the banks made up the name and [snorts] you you say this is something that most business owners have never heard of.

Uh again because banks made up the name maybe that that's one of the reason but can you break it down what is it and what does it let business owners do that uh they can't do otherwise if it wasn't from that and who would would that be for? Right. So an immediate financing arrangement it's a type of loan that you get from a bank. Um and that's where the name actually comes from. But again it's very similar to the wealth multiplier concept. Uh there's a lot of time concepts that use different names for it, but you're essentially again putting a large amount of cash value inside the right type of of whole life policy so that this cash value can grow fast and bake. [snorts] Um and then once you have the cash inside the policy or once you set up the policy, then you can take it to a bank and a bank will leverage against it.

Uh usually at 90 to 100% of whatever the cash value is in there. Um so what can it do for the business? same advantages. It allows you to grow the money in that safe and conservative way that's not affected by the highest marginal tax rates and you're earning the dividend. U doesn't affect your passive income rules and then again because you're setting up with the loan with the bank, you're able to leverage that money to use it for whatever you want, right? So, you know, generally the the things that our clients are using it for will change over time as their life situation changes. So when maybe when you're younger and you're growing and you're you're growing your company, maybe you're investing back in the company or you're again you're buying a new building or you're buying new trucks or you're buy you're you're doing whatever you need to do to grow that.

You're buying a competitor. Um you're opening a new office, whatever you're doing. [clears throat] And then as they reach kind of like some sort of retirement age, okay, well maybe now you're not borrowing money to grow the business anymore, but maybe you're you're selling the business or maybe [snorts] um you're using the money then as like retirement income. So again, because it's inside this life insurance policy and it's growing and you can get the loans um certain loans with banks, you can get them like in a they call it an insured retirement plan where you could leverage against the policy and then take these loans and not pay them back and you don't you don't even have to uh service the interest. The interest is still running, but you don't have to service it on a year-by-year basis.

And then what happens is eventually they just wait they just wait for you to die. And then when you die, the life insurance pays out, covers the loans, covers all the interest, and then the remainder goes to whoever you like whatever your beneficiaries are set up as. Um, and if it's in the corporation, it'll go to the corporation. Andrew, these are the great great uh tools for business owners who have that retained earning coming in every month or every year um to be able to grow their money, use it, and then transfer it. just kind of like that guy that you talked about that sold his business and that's what he did, right? To be opportunistic and take action. Bunch of stories, some cool stories actually. I'll tell you one. Another super interesting one is um uh client in a very very high inventory uh business.

So he's actually a commodities broker. So you know when you see trains driving by full of coal or full of wood or full of whatever like somebody's buying and selling those like that wood or that that whatever, right? He's a broker and so he uh he buys and sells a couple times a year and then when he does that he needs like you know $2 million to be able to buy and then he sells it and then he collects the money like 90 days later after he sold it to whoever [snorts] right so he has a a big amount of cash inside the company but he needs it for but for actually operating the company needs to buy the inventory sell it and then get the money back. Uh, [clears throat] so he he wants to grow the money.

He wants to invest it, but he also can't invest it because he needs it now or like he'll need it in a couple months. You can't be investing it and taking it out uh and risking it. [snorts] And then his uh business is technically higher risk for a bank. So it's hard for him to get loans for that amount. So the bank said they would give him loans, but they would give him like smaller loans at high interest rates. And so we showed him this concept and we're like, "Listen, put it inside his insurance policy. open the line of credit at the bank so your money will be growing with the dividend from the insurance policy and then you'll have the line of credit at the bank when you need to uh buy your inventory.

And um and so we did that. We ended up transferring uh $3 million from his corporation into the life insurance policy over a couple of years. We didn't do it in just one shot, but we did it over a couple years. And the crazy part is he's like, I went to the same bank that wouldn't give me the loans because my business was too risky. And then I took him this policy and they gave me the loan right away. Um, and so now he has what he wanted, right? And he was he's a younger guy, right? Like he's just having his kids must be a couple years old by now. And um, right. So he also needed the insurance, but he's growing the money, which is what he wanted. Um, he's able to use the money to to buy and sell his inventory.

And then um if anything happens like he's got uh a wife and kids uh he's got his he's bought his uh his house uh recently. So he [snorts] needs this amount of insurance anyways and and he's got this thing set up that he didn't think that he could do, right? Like he wanted to be able to invest the money, but he also needed the money for the inventory. So he didn't think he could do that. And then this by putting the money in the policy and then borrowing it out, he's kind of killing a few birds with that one stone. and he's accomplishing several goals with one kind of piece of paper. So, he tried to get a loan through the bank for his business and he didn't Yeah, he tried to get a line of credit.

They would give him a line of credit, but they wouldn't give him nearly enough uh because he's considered as much as he wanted. Yeah. He's considered a high-risisk business, right? Because like if somebody doesn't pay you if Yeah. going the [snorts] IFA route through an insurance policy, he got it right away. plus all the benefits like weeks to do like we have to there's a lot of paperwork but we we do all that right and um uh but yeah it's done and um actually another cool one this one is super interesting we have um a client that owns a Mick so a Mick is a mortgage investment corporation and so what they do is they lend out money uh to people that the banks won't lend to right so banks will generally lend you a mortgage if you're like an A client like if you're an A right so these guys fall into like the B lending uh world.

And so [snorts] they have an existing line of credit with a bank, like a like hundreds of millions of dollars line of credit with a bank that they turn around and they lend that out um you know, they get it from the bank at whatever price they get it and then they lend it out to somebody else for their house. Um, [snorts] when we set up the IFA for the owner of the Mick, uh, we went and got the line of credit against his life insurance policy at the same bank that his firm has hundreds of millions of dollars of line of credit with that same bank. And the percentage interest rate that he's paying on his loans with his life insurance policy for like a couple million dollars is lower than the percentage that he's paying for the loans that he has for his company which has like a a few hundred million line of credit with the bank.

[laughter] He's like, "How did you what?" Like we got a better deal than he did. Um and his volume is like 100x what we're doing for him. That's crazy. Yeah. And that's that's the security of the insurance policy, right? Like the banks treat it as cash because it's the cash value in the insurance policy. So like they're covered. The bank is covered, right? If anything, if you don't pay, they just cancel the policy and take the cash. They're they're fully covered. And if something happens to you, there's life insurance. So like if you, you know, you're skiing and you jump off a cliff and you don't ever make it home, um they're covered from the life insurance side. And obviously this is for business source in Canada that way that has way more liquidity and and are way more advanced and way more successful.

What's the ideal profile that you see like like this is a no-brainer if you're looking for that you just might not even know it's it's a possibility for them. Yeah. So for us a no-brainer client well a we I think even before all that is you have to like us and trust us and we have to like you and trust you too. So that's like the the first thing. If that doesn't work nothing works. Um but generally our clientele is in the wealth accumulation phase of their life. So they're somewhere in the 35 to 60 years old. They have a successful company. They're paying themselves whatever they need to live and then they're keeping money in the company every year as retained earnings from anywhere from few hundred grand to millions of dollars and anywhere in between.

um they generally will have kits because again we're using life insurance as like the the cornerstone of this strategy. So um eventually that life insurance has to pay out to somebody. So you should have somebody that you care enough about to give them millions of dollars when you die. Uh so and then they have they have real estate. So either they own their own house or they rent where they live and then they own other real estate. So they're business owners, they've got family, they own some real estate. Um, and then generally we like to work with good people, right? So we want to work with people that that like us, that trust us, that respect us. So when we give people advice that they're actually going to do it, um, and uh, and people who are coachable and people who are like open to new things, right?

Like, so sometimes you have people that, you know, they they join our call and they're just like, "Okay, convince me." And I'm like, "What? No." Like, "No." Um, and they sit there with their arms crossed and they're like, "Oh, everything you say is and you're like,"Wh are we doing this?" Like, "What?" No. And uh, yeah. And, uh, but yeah, that's our that's the the right type of person. So, we generally we, you know, it's it's people that we want to go out for dinner with or that we want to go and have a nice bottle of wine or we want to go to a hockey game with like those are the types of people that we want to work with. Um, and they're doing fun. They're doing interesting things. the um it's good when what we're doing makes an impact um and when we can see it and when they appreciate it like that's those are the best ideal kind of clients for us and again because of what we do we're in such a small niche and there's such a small amount of Canadians that that actually kind of should should work with us for doing something like this um it lets us be really like specific in who we work with no and that's good that's good and no you you gave a lot value so far.

And so I think what what I would come back to is the four functions of wealth that we talked about the keep grow use transfer. We talked about probably arguably the the the the best strategy that Canadian business owners should use today which is corporate own whole life insurance. Um, and then we didn't talk about the retirement part of that, which I think is a huge part of it in terms of the use, right? Which is how can business owners use all that hard-earned income that they've accumulated to all their career, how do they actually retire with tax-free, efficient income from all this corporate wealth, right? So there again, um you've got the cash inside the insurance policy and by the time you're getting into a retirement, you've probably been building it up over some some amount of time like and for us we would say minimum 5 years, probably like 10.

Um and then so say you've been putting say you've been putting half a million dollars a year into a policy for 10 years. So you've put in $5 million and maybe it's grown to 5 1/2 or six or something. It's grown to five and a half. Today, what we can do is we can run what's called an insured retirement plan calculation. Um, and we would set up the loan with a bank. And so, we'd say, "Okay, hey bank, here's a life insurance policy that has $5.5 million of cash value inside of it. We're going to set it up for Joey here. And Joey would like to receive a loan of, you know, and we'd figure out whatever the number is. So, maybe you want to get like 400 grand a year for the rest of your life taxree, right?

So you would just take a loan every year from the bank and your policy would continue to grow. So you know in like another 10 years it's going to be more than 5 a.5 million. It's going to be it's going to have grown significantly. Um and then you're able to take a certain amount every year and never run out of money. Um [snorts] you know you could live to 100 and not run out of money and also be getting this money in a tax-free way um through these loans. And then eventually when you pass away the life insurance pays out, covers all the loans, covers all the interest and then the remainder would go to your beneficiaries, right? Obviously this is a very simple way to do it. Like we it's a little bit more complex in the way that we but we handle the complexity in the background, right?

Like the client doesn't do that. We do all that and uh they just you know they just tell us what they need and we send it to them. And how does that compare to the RSP RF approach that most Canadians are told about as their retirement plan? Yeah, they're different. Um, all of these things play a role, right? I know uh on YouTube or on whatever I'm supposed to like put a stake in the ground and say my way is the only way. All those other ways are terrible and you should never do them. But that's not real life. RSPs are important. RSPs definitely play a role. Uh but one of the main differences is uh our RRSPs have a limit of how much you can put into them, right? So for clients like ours, like if you're saving a half a million dollars a year, well, getting a deduction on 28 grand of uh RSP limited, that's great, but it's not enough, right?

Like it's it doesn't move the needle. Also, uh the CL the RRSP is based on the concept that you're going to put the money in the RRSP today while you're at a high tax rate and you're going to save the taxes now and then in the future when you retire, you're not going to be earning. So, you're going to be in a lower tax rate. So, when you take the money out, it should be in a lower tax rate. That might not happen for all our clients because our clients might be making more money in the future than they are now. Right? So, one of the big things about the RRSP is that a at age 71, you're forced to start taking it out through what's called a RIFF. Um, and [snorts] the government will tell you you have to take out this much every year.

Like there's a minimum amount. Uh, and then also when you pass away from an estate perspective with your RRSP, you can do a spousal rollover, but um but if you don't do a spousal rollover, that whole amount becomes taxed as income on your final tax bill. So in your deemed disposition that we talked about earlier, right? So again, say you had a million dollars in that RRSP and you pass away. Well, that million dollars now counts as your income for that year. So like half of it is going to disappear to tax like immediately. Um, right? So like, you know, most people don't want to do that. So not saying that RSPs don't have a place, RSPs are definitely important. We open a lot of RSPs for clients and uh you know we have we have a lot of clients with RRSPs.

It makes total sense. But also when you're a successful business owner and you're making a lot of money, you have to be very careful how much money you're putting into your RRSP every year because you don't want to I'm not going to say overcontribute where you're putting too much in and you're outside the rules, but you don't want to overcontribute where you have too much inside your RRSP, more than you need, and where it's going to cause you a big tax problem in the future. So, you think you're saving some taxes now, but it probably is going to cause a problem later if you're going to be continuing to earn money. Um, especially if you're going to be continuing to earn a lot of money. Very interesting. Yeah, we often hear about that and I know there's another advisor that came on that talked about uh this being the TFSA on steroids for business owners.

100%. I've definitely used those words before, but yeah, it's an unlimited TFSA that you can do if you put the money in the insurance policy, right? Because you have that it's tax deferred. It's tax [snorts] exempt, right? So, um, yeah, you can put a lot of money inside these insurance policies, way more than your TFSA, way more than your RRSP. Uh, and it's a great idea for the right type of person. Yeah, very good. Very good. Absolutely. And, uh, I know that again, we we've we talked a lot about different strategies. I think we went into great details of that. So, hopefully business owners found value into this. Now, I want you to ask like I know you wrote you wrote a book, it's right behind you, right? Uh, literally on how Canadian families build generational wealth, which again will be in the description down below if you want to get a copy.

Um, now if an entrepreneur in Canada is watching this, is successful right now, they're doing everything they can that their traditional advisor, accountant told them to, and they're still unsatisfied, what's the one conversation they need to have before, again, another year goes by? Um, well, if they if somebody wanted to talk to us, we operate on a philosophy of no pressure, no rush. So, if somebody wants to set up a meeting with us, we are happy to meet with them. We're happy to talk. We're happy to add as much value as possible. uh and see if there's a good fit to work together and see if a strategy like this could even work for you and if it makes sense. Uh you can do that through our website. It's safeepacific.com. So s a fe pacifi.com.

Um we do all our meetings on Zoom. So you can meet us from wherever you are anywhere in Canada. And um we only work with Canadians. So if you're calling from a different country, we don't we can't work with you. But um yeah, if you go to our website there, you can either fill out the form, the contact form that'll send a message to somebody on our team and we'll get back to you within 24 hours to book a meeting or uh there's lots of calendar links all over our website where you can book a meeting straight into one of our calendars and just book a discovery meeting so that we can get to know each other and see if there's a good fit to take next steps. If there's not a good fit, like we will absolutely tell you.

Um like I was saying before, like we're not trying to get clients that are not a good fit. uh we only want to have good fit clients. So [snorts] that's that's really the best thing that they can do. Um if they're talking to their accountants or to their lawyers, uh some of the things that they can do right away, um number one is just ask for a strategy of what do I do with the retainer in my company? How can I grow it? How can I use it? How can I transfer it to the next generation? Um and how can I do this in a safe and secure way without losing the money? Uh they might also want to look at what their corporate structure is. So if you have an operating company, if you have a holding company, you might have a trust.

So how uh you know, if you want to rack up the fees at the accounting firm, if you want to rack up the fees with your lawyer, you can you can play with your corporate structure and uh [snorts] uh and that that can help a lot uh depending on kind of what uh what you're trying to do. [snorts] And then you you really want to work with the right types of people, right? So, one of the things that we do ask or one of the kind of concepts that we use here is, you know, we look at finances is a team sport. Um, so if if I'm one player and we're doing one thing, I also want to know like who are the other players. So, if if this was a hockey game, you know, we're on the insurance side, so we're probably one of the defensemen, [snorts] right?

But I also need to know who's center, who's goalie, who's coach, who's GM, who's water boy, right? and what advice are they giving you and it does it line up right because if you have if we're all on the same team we need to all be playing uh for the same goal right like so we can't have the accountant say oh I want to only go left and then you have the investment adviser saying I only want to go right and then the lawyer saying well put everything down and then I'm saying everything up doesn't work you need everybody to say let's all go left and we're all going over here and this is what we're doing for um right so [snorts] you you need everybody on the same page and you need everyone kind of like on the same strategy.

And this goes back to what we were talking about at the beginning, right? When there's so many options, so many financial things you can do, you need to pick one and everybody needs to be on the same team and say, "Okay, this is what we're doing. We're not going to everybody go try to do their own thing cuz that that ends up in a disaster and a mess. It ends up to clean up." Yeah, 100%. And I think that's something that you guys actually do as well. It's it's bringing the whole team on board and making sure everybody's aligned, which is already a big step that can definitely help everybody get to the the the end goal that they want. Um, and I I'll put all your links down below so people can uh can get in touch with you.

Um, and now just in terms of like what to expect of that conversation for if they were to meet someone like you or someone from our network that is a good person that can actually help them, like what should they expect from that conversation? So our first meeting is called a discovery meeting and we're going to ask you a bunch of questions. So we really want to get to understand your current situation. We want to understand your goals. We want to understand your concerns, right? So the first meeting is going to be broken up into kind of four sections. The first bit is going to be your standard kind of vital statistic stuff where we're going to ask you your date of birth, your income, do you own your house, do you have investments? Like your standard stuff that anybody at a bank could ask you uh of just your financials.

then where is where it really starts to separate. So we really want to get deep into so that's and we we look at that as your current situation, right? So here's your financial and your current situation and then we want to look at your goals. So what are you looking to do? What does your near-term future look like? What is your long-term future look like? What and and we keep it focused, right? So we want your goals that are personal goals, professional goals, financial goals in the in the short medium term. Not only goals, obviously goals are fun to talk about and that's that's the most fun part, but we also want to know what the concerns, right? So, if these are your goals, like what are the things that are going to throw you off and what are some things that we should look out for or what are some things that you're expecting that are coming down the pike that that we need to know, right?

And so, that's kind of the first two sections that we'll talk about. [snorts] And then the next is um more philosophical. So, we get really into what like how do you think uh what's what are your value system? What's your philosophy around money? What did you learn from your parents about money? Um what like you know different people money is a very emotional thing. Like obviously there's like the Excel spreadsheet you can do that's cold in facts and figures. [cough] Sorry but money [snorts] is a very emotional thing right so it means different things to different people. People have different upbringings. People have different value systems. They have from wherever they found that whether it was through their family or the people around them or their schools or their religious affiliations. however they however people come to their their thing.

And so we want to know that and [snorts] it's really important for us to know that because you know as you're telling me your values and you say I only like blue I don't like red. I only like blue. And then if I'm not listening to you and I come back and I say hey here's a great program for you. You should do red. And you're like what? No I told you I don't want to do red. I only want to do blue. Right? So like this is where we really want to listen and we want to understand and we're giving you something that that you said you want. Right? And then the last bit is what I just talked about here. So it's your financial team. Um, and who else are we playing with?

Like, so who's your do you have an investment advisor? Do you have a lawyer? Do you have an accountant? Uh, do you have a mortgage broker? Do you have a realtor? Do you have a banker? Do you have And and if you don't have these PE, can we introduce you to some of these people? Because um, sometimes finding the right person is, you know, it's just not anybody, right? Like um, and actually, you know, speaking of the financial team, sometimes we upgrade people's financial teams. So, you know, the accountant that got you here maybe isn't the accountant who's going to get you there, right? So, sometimes it's time for people to upgrade to the next level. And so, we're we can tell you that and we can introduce you to who who it's going to be.

Um, [snorts] right. And and and it's not like hard feelings or we don't like that person so get rid of them. It's um and then a lot of times people just don't even know um like [snorts] you know you maybe you you got your accountant or you got your lawyer, it was some random person you met at a networking event, but did you really like research them and find out if they were the best? Um cuz if you're going to be paying for it, you might as well like if you're going to pay $400 an hour for a lawyer and you have like this lawyer who's okay, but this lawyer who's awesome and they're both $400, you might as well get the awesome one um that you like better and that's closer to your house.

Uh right. So there's there's all sorts of things. Um so that's really what the first meeting looks like. Uh we take a lot of notes and we want you to do most of the talking. Um and then from there we'll book a second meeting and then in between we're going to actually put together a proposal based on what uh you tell us. So you you know you told us ABC and then when we come back at the proposal meeting we're going to say okay because you said ABC here's these things that will help you to accomplish these goals and here's what it looks like. Here's how long it takes. here's what we need, here's how much it costs, all that kind of stuff. And again, [snorts] like I was saying, we have a no pressure, no rush philosophy.

So, in those first couple of meetings, uh you haven't signed anything. You don't owe us anything. Um nobody's pitching you anything. And then from there, um if you like what you see at the proposal meeting, we take next steps and we start to implement the plan. Uh or we can make adjustments. So, if you say, "Okay, well, I like this, but I don't like that, or what happens if I do more of this or less of that?" Then we adjust the numbers, and we we'll come back to you as many times as as you want to to make sure that we dial something in that fits and that makes sense. Uh, and then the next step is uh is actually like applying for things. So, you know, these things that we've been talking about like say the wealth multiplier account or an immediate financing arrangement, these are great and a lot of people want this, but just because you want it doesn't mean you can have it.

Um, at the end of the day, it's these are large insurance policies that are underwritten, you know, with scrutiny, with medical scrutiny and financial scrutiny. So, you might not be able to get it even if you want it, right? So, the insurance company could decline you. And so, we want to make sure that uh that we're managing this along the way, that we're stick handling it, that we're doing the underwriting properly, and that uh you know that the insurance company uh understands why we're asking for so much insurance. and your life situation and how this makes sense. Uh so we can we can paint the best picture of uh to make sure that we try to get the best approval ratings that we can. Uh and then people need introductions to the bank. So we don't do any of the lending.

We're not the banker. Uh but what we do is we introduce you to uh ideally we could keep it at the bank that you're at because that just makes everything easier. But sometimes the banks that you're at don't lend on insurance policies and we would transfer you to a better one. Um, and but there's there's tons of options, right? And then once you get these things set up, you have like a lot of flexibility in what and what you're able to do. There's certain guard rails that are pretty rigid and you have to stay inside here, but once you're like once you're set up and you're in there, um, there's a lot of things you can do. That's good. I [snorts] appreciate you sharing all that. And honestly, like if you're watching this and your adviser don't go in that amount of details on your first calls and second call and cannot explain to you [snorts] the whole thing right away, like that's that's your sign to run the other way.

So I think uh if if you ever get into a meeting with Lan, you're definitely going to be in great hands. And that's what we're trying to provide with this podcast, this episode, this this education material, this with Pris Group is to give access to those free meetings literally that you can get and access to to to people like you that as all that experience for yourself and also for bunch of other business owners that you've helped um improve their tax their their tax situation and their financial situation. So um thank you for all that value. I think that was very appreciated. And I want to end with this recurrent segment that I like to ask to to end the episode on a good note, which is if [snorts] this episode were to outlive you, okay, what's the one lesson about building wealth in Canada that you would want every entrepreneur to remember if there would just be one lesson for them?

I would say start now, even if you think you're not ready. Um, okay. A lot of these things, the biggest factor in the success is the amount of time that you have it, right? So for these life insurance policies, you want to have them for a long time. If you're buying real estate, you want to own it for a long time. If you're buying good stocks, you want to own them for a long time. So the sooner you can get in the game, the sooner you can start playing, the sooner you can figure things out, the sooner you can get into like the best position possible. Very good. I like that. I like that, Laura. Thank you for your time, L. That was [music] a an amazing conversation. Hopefully, it's going to hit to those business owners as well as much as it did to to [music] me today.

So, thank you for that. And if you're a business owner that watched until the end, I want to thank you. The only thing we ask in return is that you subscribe [music] and that you tune in for every Monday when a new episode drops. So, thank you for your time. Ask your questions [music] in a comment. If you want to reach out to Lan, just go into the description down below, grab a copy of his book, get to meet him or his team, and uh and see what uh how your life can change and your business, your situation, [music] your tax situation can change as well. So, thank you for your time and we'll see you guys on the next