Taking Back The Next Generation of Canada's Kids: Wayne Durksen

Certainly we're facing some difficult challenges, particularly in the area of finances.

For our kids and for our futures, we watch what's going on. I'm deeply concerned for that.

I believe that the role of leadership that the parents play, that we parents play, will ultimately change the trajectory for our kids. And so those of us disciplined enough to embrace these challenges. I think there's tremendous opportunity ahead.

You all know that I'm pretty passionate about KidsMatter and taking back the next generation of Canada's kids, instilling character, competence and commitment in their lives.

These are my kids and grand kids, and I'm very passionate about them, but I'm really passionate about the kids of our country and beyond. So part of that challenge is to really give them foundation.

I believe we all need people in our lives that can help us grow, can help us be pushed to higher heights, and these three gentlemen have been profoundly important in my life and have really changed the direction of my life.

This man, Nelson Nash. He really wrecked my life when he introduced me to this concept called Becoming Your Own Banker. We're going to talk lots about the concept, but he made this statement that deeply disturbed me, he said, "Everybody needs to have a dividend paying, participating, whole life insurance policy as part of their financial structure."

I didn't necessarily agree with him and I didn't understand that, so I spent a lot of time trying to figure that out. And as I spent time and exercised the discipline of learning, I began to discover that we really haven't been given the advantages that really were available to us when it came to our finances.

And a big part of my life, and I suspect a big part of your lives, really needs to be focused on discipleship and how do we transfer to the next generation, and to our own children and grandchildren, the things that we've learned and the things that we believe very deeply.

So this is my little grandson, Jake. I have great grand kids. I've got a brand new one coming next week, Wednesday. What little Jakey for his third birthday, I gave him a copy of this book. And by the time he graduates high school, it's my intent that we will have instilled these principals right into the very DNA of his life and that he will have a financial foundation upon which to build, and so I'm pretty passionate about that.

Something else people will know about me is I'm very big on questions. I think we need to have good questions, and so I love the term "EQs", Effective Questions, and so anytime I ask one , I'm going to invite you to just throw something in the chat box.

But my first EQ is this, "If what you believe to be true, turned out not to be true. When would you like to know?"

Not all surprises are good surprises, like little Maxi here is enjoying. So, most people say I'd like to know right away, and yet Thomas Edison tells us that only 5% of people really do hard thinking, 10% think they think, and 85% of people would rather die than think.

The challenges we're facing on the financial front as we watch what's going on right now, federally and globally, are going to get really tough given that many Canadians are living paycheck to paycheck, and haven't even begun to think about how they're going to navigate in those latter years of life when they're not wanting to work or not able to work.

And so I think about our children and our grandchildren, I go "How do we provide them a foundation?"

I'm not so much about saying, give them money. I'm saying, how do we help them discover the problem that they're facing and come up with a solution.

And so Nelson put this in his book as a chapter. And one of the things that I really appreciated is that he started with this verse of scripture.

In John 5:6 and basically it's a story of an invalid, that's been waiting 38 years to get into the pool that would ultimately offer him healing. But he was never successful in getting there. Somebody always beat him. And one day Jesus passes by fully aware of a situation, and he says, "Do you want to get well?" And I think what a dumb question to ask somebody that's sick.

Of course people that are sick want to get well. And yet I look around our country and our world and I go, man, we got some financial illness and I think that's a pertinent question, do we want to get well? And so if we want to get we really have to understand how money flows. And that's going to be a trigger word for me.

So how does money flow? That's going to be a question that I want us to wrestle with, so.

There are three types of money that I think we deal with in our lives.

And of course, for many of you, you already know this, but we deal with accumulated money. That's our private reserve pool or our savings account, our future, our emergency funds.

We deal with lifestyle money. That is our food, shelter, clothing, all the things it's going to take for us to survive as we navigate through life. And then we deal with these transferred monies. And I want to talk just briefly about those.

So I'm going to just assume on a conservative level, we've got a $50,000 household income. If we're saving 5% as Canadians, which technically they say we're not, that would be about $2,500 dollars. And every advisor in the country wants to come along and manage this portfolio of money. And I'm saying, the advisors say how much interest are you earning on your account right now?

And people tell them and they say I think I can do better than that. I can get you somewhere better than that kind of a percentage if you work with me.

And my question is who's managing the $47,500 that is passing through your hands? I think that's a pretty pertinent question.

And I say to my clients all the time, I think I might be more useful to you managing the money you're not keeping versus trying to get you that great big ringer investment that can bring you the big returns.

Because what I know is there are some wealth transfers that are taking place in these dollars we're not keeping that are occurring either unnecessarily or unknowingly. And if we could actually refine 1% of transferred wealth, that'd be $475 a year.

It may not sound like a lot, but you'd need 19% on this portfolio to get a $475 a year. And in the traditional investment structures, you're not going to get that. The markets aren't going to produce that consistently over the next 30, 40, 50 years.

But I believe we can find that kind of money simply and easily within our wealth transfers that are taking place.

So the question becomes, if we could find the money, would people actually be willing to put it to work for them?

And again, I'm thinking about our kids. Nelson said, there's a problem, and we're going to have to figure it out, because nobody's going to do that for us, so, pretty profound, really.

As I walk through life, periodically, people say to me "Wayne, what do you do for a living?"

Because it's very difficult for people to figure that out, and I say to people often, I'm a Flow Management Specialist. I find things that

need to flow. I figure them out and then I help people understand them.

And so for example, there are many things that must flow. Everyone has a toilet in their house and at some point we're going to flush it and we expect it to flow because it was designed to flow. And if anything restricts that flow, it's going to back up and make a mess.

There are lots of things that must flow.

Love must flow. If love doesn't flow, we get broken relationships, broken homes, families, communities, societies, and ultimately countries.

Grace, mercy, truth, forgiveness, kindness, all these things have to flow in order for us to have a vibrant experience.

Blood must flow or else we die.

Water must flow or it stagnates, and it becomes poison.

Money must flow.

And I want to just stop here just momentarily to say, money must flow. And I want us to kind of plant that thought in our brain because money is flowing and it has to flow.

One of my EQs for you is, "Which direction does your money currently flow? Does it feel like it's flowing towards you or does it feel like it's flowing away from you?" I often hear people say, "Where does my money go? It just seems to disappear."

Another thing I want to bring a highlight to before I get into a bunch of examples is that banking is the most important business in the entire world. Every dollar that passes through your hands is going to find its way through a bank at some point. And that's true globally. And our lives are very costly to sustain and all this funding has to go through a bank. And yet, most of us don't have really very good idea of how banks work, how they make money, how they actually become so progressive and successful.

And yet they really are. And I'm saying we should probably take some time to try to understand that. So again, we're back to Nelson saying, "There's a problem and we better figure it out. And yet it's going to require thinking at levels that we typically aren't comfortable with."

I know that some of our people on the line have thought this through and are extremely brilliant and we should figure out how to get into the network and learn from them because they are really figured this out and they figured out what they need to do about it.

There are two major money leaks that I want us to focus on in the next couple of minutes.

One is lost opportunity cost.

Most of us are going to get a job and we're going to work till at least we're 65. So there's 45 years of work. We're going to earn, we're going to just start with a salary, but it starts someplace.

It's going to start with a $50,000 annual income with a 2% cost of a cost of living increase. And if we could earn 5% on those dollars and never have to spend a dollar in our lives, we could put that entire thing into our private reserve of funds or pool. We would accumulate potentially $11.4 million in our working lifetime.

So here's another EQ for the chat box, "How much of the money you earned throughout your lifetime will you end up keeping?"

I don't know that many people have sat down and set that down in concrete and become very clear about it. It's a great question. And yet here's what we know, we can't keep all those dollars. Some of those dollars are going to have to be spent.

And so we know we're going to have to pay some taxes. So we send off approximately a million dollars of income tax to Mr. Trudeau. And yet our actual loss is $3.4 million. And so the question becomes, where did that extra $3.4 million disappear to?

For many people, doesn't exist, but I'm saying no, it actually flowed someplace, and it came off of the bottom line of our private reserve fund. We should probably be paying attention to that because it's a big deal.

Here's something else. We know if the average Canadian is only saving 5% of their dollars, and it's probably not going to get better, what we know is that about $3.4 million of what we earn is being used to fund our lifestyle. About $10.8 million is actually our loss that is disappearing into somebody else's private pool or pool of reserves. Leaving us somewhere less than $600,000 for our retirement. And I'm going, and that's not the worst thing inflation has to kick in yet.

And then that ends up lowering our pool down under a quarter million dollars.

That's a big deal.

We've had the potential of $11.4 million flowing through our hands. And you think about this for your kids and grand kids, and 11.2 disappear, somewhere. It just, much of it just vanishes. And so another EQ, how much of that will disappear due to wealth transfers that occur either unnecessarily or unknowingly, and of that, how much is lost opportunity cost?

So these are really important functions and factors for us to pay attention to.

So now let's get practical. So we have the need to buy a used pickup truck. We're going to buy a truck. We're going to pay $25,000 for that truck. And I say to people, how much did you pay for your truck?

And they say I paid 25,000 bucks for my truck. And I go, that's assuming that money didn't flow. But $286,000 flowed to somebody else's system, somebody else's pool. And that becomes highly problematic.

And so enter my little grandson, Jake. Jake one day is going to have to buy a truck as well. He's going to buy a used truck.

He too will pay $25,000, probably be more by then, but let's assume that it isn't. Here's what I want you to know. What differentiates my little Jake from most of the kids he'll ever go to school with is, he's going to recapture the $286,000 that was typically flowing to somebody else's system. And people say, how do you know that Wayne?

I know that because Nelson Nash got through to me and caused me to figure out that, you know what, I need to preserve my capital. And so I bought, and put in place, or my wife and I did, a dividend paying, participating whole life insurance policy for little Jake, and for each one of my grandchildren, incidentally.

We are funding that so that we know that he will have, by the time he's 20, at least $25,000 of capital, and we're going to talk about that in a minute, available and he's going to recapture. And here's what we know that only took him to age 70. If life expectancy is age 85, and he makes it there, that is $600,000. It's actually being recaptured into his system because he simply took responsibility to understand the problem and learn what to do.

Another thing we have to factor in is that little Jake is probably not going to buy just one truck during his 50 year working life-cycle. He's likely going to buy one about every seven or eight years. If he stayed with only 25,000, that'd be $200,000 of a wealth transfer, which really translates into $926,000 that flowed into somebody else's pool.

Little Jake is going to recapture that, plus the additional 15 years of life expectancy. There's potentially $2 million that would be transferring through his wealth structure into somebody else's and most of us aren't really even cognizant of the fact that's happening.

Another thing I find really fascinating as I work with clients and friends. Is most people I work with don't have a good working definition of capital.

I say how would you define capital?

And most people will come up with something, but capital has an acquisitive component to it. It actually has the ability to reproduce. It's an incredible production machine.

I say to people, if you had a goose that laid a golden egg, and every morning you could run down to the barn and grab that egg, sell it, put a thousand bucks in your jeans. You would protect that goose with your life.

And I'm saying, that's what capital is. You need to learn to protect your capital with your life because it's really powerful and it will flow. And it's either going to flow towards you or flow away from you.

That's really what Nelson was trying to get through to me while he was teaching me about this concept.

He said, "There is a banking function. And whoever controls that function in your life is going to win. You need to figure out what's happening so that you know what to do and preserving your capital and making sure it's available for the future is profoundly important."

I know all about these wealth transfers that are going on and I'm going, I believe we can be way more helpful to our kids and grand kids. If we can recapture those wealth transfers and get that money to flow towards them, into systems that they own and control, versus the wealth transfers that are currently taking place in many people's lives and circumstances.

The second leak that I'm deeply concerned about is the volume of interest.

We talk lots about the rate of interest, but we don't talk much about the volume of interest. The volume of interest is really important for us to factor in and understand.

If we had a truck loan, we were going to buy a truck for say, $50,000, we could finance it at 6%, that would be a $966 monthly payment, of which $250 is a wealth transfer into somebody else's system.

We think that's the way it is, it's a 6% cost. But truthfully we're giving 26% of every payment that we're making into somebody else's system.

And that's extremely expensive. Over a five-year loan that would end up being about an $8,000 wealth transfer that translates into a 14% volume of our payments are going into somebody else's system.

Many of us say, the payments may be a little high, how do I lower that payment? Rather than buying less vehicle, we just extend that the time frame out, the amortization period out. So we took 140 bucks off our payment, but we didn't lower our interest costs by one red cent, which is a wealth transfer directly leaving our system.

All we did is drove up our volume of interest from 26 to 30%!

And again, over the six years, we spend nearly $10,000 of our wealth into somebody else's system, which makes virtually for a 16% perpetual transfer of wealth.

I'm saying if we actually understood the problem and knew how to solve that problem, we could make a drastic difference in the lives of our kids.

One last example I want to throw up here and that is a mortgage. If we had a $350,000 mortgage and we could get a 3% rate of interest on it. Incidentally, somebody told me last night, they just signed a five-year fixed mortgage for 1.83% last week.

That's interesting.

It tells us a little bit about our global economy.

That payment will be $1,600 a month of which $875 of that is a wealth transfer. That is a direct interest cost that is leaving your system and going into somebody else's.

To put it in perspective, that one month's interest cost translates into a lost opportunity cost in excess of $15,000. We're going to do that for 300 months in a row.

And what that really means is that we're spending not 3% on our mortgage, but 53% of our payment is actually going to the volume of interest. We're really not helping our system and trust me, I'm going someplace with this whole rationale.

In the 25 year mortgage, we're spending $148,000 to acquire a $350,000 asset.

That's a 30% volume of interest that is leaving our system and going into somebody else's care.

I come back to saying what Nelson taught me was, "Whoever understands the problem will actually know what to do. They will have some clarity and clarity leads to power."

Don Blanton is a friend of mine and he says it this way, "If you're a golfer," which I happened to be, "and you can have the golf clubs of any golfer that's ever played the game, or you could have their talent and ability, which would you choose?"

Most people say I would choose their talent and ability because the product, the golf club, isn't going to help me. If I don't actually have their skill, discipline and competence.

Really that's the argument Nelson is trying to make when he writes his book. And as he appealed to us as citizens to say, Don't worry about the product. It's not about buying the right product or finding the right investments that's going to get you the ringer.

He said, it's about controlling your capital and understanding the concept and developing the skill, the discipline and the competence to control and steward your capital, multi-generational down the line.

A properly structured, participating, dividend paying, whole life insurance policy puts control of the banking function back at the you and me level. We actually get to control the liquidity and the capital. We have uninterrupted compounding forever and ever. And that is a really significant component of what he was trying to get through my thick skull.

And we have absolute flexibility. We can completely structure this to serve us.

So imagine what our child's lives would look like if we were using a system that would allow us to plan for significant milestones, if we were able to teach our kids financial stewardship, while we go.

And many people say, man, I wish I'd have known this before. I've never heard this before. And I'm going well, the best time to plant a tree is 20 years ago. The next best time is today.

And here's what I want to say. As parents, you are ridiculously in charge.

It starts in our homes, and it starts young.

For me, it's all about how do we change the direction of the finances for our kids so that they don't end up in the incredible challenge that is facing Canadians today.

Whoever controls the banking function in our lives wins. And Nelson's right in saying, we've got to figure this out.

And only a few people are actually going to put forth the effort.

The wealthy have been doing this forever. They understand that this is a great place to store capital. It has stood the test of times. It's been consistent. It's a very powerful but misunderstood tool.

Here's what I want you to grasp. This is not an investment.

We don't put our money in here. It's simply an alternative storage facility to warehouse our capital.

And as we understand that, we start to realize, even while it's in here, it actually is growing and it's got this no loss provision. So once we get capital in here, if we buy into the fact that we're going to secure that capital forever, then of course, we're going to say we got to put it someplace. Where are we going to put up that it's safe?

I come back to saying, I have a dream. I think we need to take back the future for our kids. I think we need to instill character, competence and commitment in their lives. I think we need to link them up with the design of God, for their capacity to live and serve in their strengths, and do the things that they were designed to do.

I think we need to help them steward their resources so that they're able to do that without the financial stresses and pressures that are affecting most people.

Some time ago, I read a book called, Holy Discontent. To the best of my ability, this is my Holy Discontent, this is how I would articulate it, inaccurate messaging shaping the beliefs of our kids.

The only way for this country to keep our artificially stimulated and artificially propped up economy running, is to meier these little lives in consumer spending and consumer debt.

I'm wanting to advocate that we need to actually help the children, our own and others, figure out how to steward their lives.