The Debt Millionaire

by George Antone

  need.

  One of my favorite things to do is gather in small mastermind groups with other like-minded people and discuss these things, discover new things, and help each other

  elevate our game. It makes for a more rewarding experience when we know that the

  main objective of doing this is lifestyle, not greed. It is enjoying nature and what the

  world has to offer, not buying more “stuff.” It is enjoying other people’s company, not

  competing with them. In a nutshell, it’s about enjoying the journey of life.

  Taking the time to learn, gain knowledge, understand and build your thinking

  capabilities, and then in turn passing your knowledge and experience on to your loved

  ones is one of the best things you can do. Unfortunately we live in a society where we

  initially trained to do tasks repeatedly to accomplish objectives for others.

  The waiter is trained to serve customers, keep tables cleared, keeping drinks filled,

  looking at the tables they’re serving regularly to see if customers are signaling them,

  among other things, all the while being friendly and smiling.

  An accountant is trained to reconcile bank statements to the company’s books, prepare

  tax returns, issue financial statements of how the company is doing to management, and

  prepare a lot of journal entries, among other things.

  Most jobs are just like that. You have specific tasks to do and to complete as your part

  of a bigger system to benefit someone else.

  But taking the time to gain financial literacy for your benefit and the benefit of your

  loved ones has exponential benefits. I have found that as you gain more experience and

  knowledge in the field of investments and personal finance, the rewards are truly

  magnified.

  For example, when I first started learning about investing, little did I realize that I

  would learn about what not to do! Through experience, I was able to connect the dots

  looking backwards, as Steve Jobs famously said in his commencement speech at Stanford

  in 2005. His exact words ring so true “you can’t connect the dots looking forward; you can

  only connect them looking backwards. So you have to trust that the dots will somehow

  connect in your future. You have to trust in something—your gut, destiny, life, karma,

  whatever. This approach has never let me down, and it has made all the difference in my

  life.”

  I have found that every piece of knowledge or experience I gain builds on my previous

  knowledge and experience, and each has a compounding effect for me. I could have

  never imagined being where I am today without the thirst to learn.

  The challenge with a job and working for others is that the increase in pay is not

  commensurate with the gain in experience and knowledge from the years of working in

  the same place, whereas the economic gain is indeed commensurate with the time

  invested and gained experience and knowledge in financial literacy.

  One simple example is the “Opportunity Cost” section in this chapter. Most investors on

  the left side of the WealthQ are seeking higher returns. But it’s clear that the benefits from using your money more efficiently by itself outweigh the returns that most people

  are seeking.

  * * *

  That meeting with Emile and his grandson Emile III changed the trajectory of my life. I

  really enjoyed their company. We laughed a lot. I could see why everyone loved the elder

  Emile’s sense of humor, and I could tell that the younger Emile’s sense of humor was just

  like his grandfather’s.

  Over the coming years after that meeting, I would visit the same restaurant and

  remember that meeting.

  The time at that lunch meeting had passed so fast even though it was several hours.

  That’s all it took for me to grow fond of these people. I would become closer with their

  family over time.

  A few years later, Emile the grandfather would pass away sitting with his friends

  around a BBQ having fun. It was sudden and unexpected.

  It was after his death that I would find out even more what a great man he was.

  During his life he donated a lot of money to charity, but not in the usual way. He would

  get to know people and then he helped them no matter who they were… and he would

  do it secretly asking that no one share what he had done for them.

  He helped over a dozen families pay for their children’s tuition with no strings

  attached, and none of these families knew where the money came from. Emile told the

  principal of a school that he would help families out financially but he did not want

  anyone knowing it was him. Only after his death did the school principal share this

  information.

  There was always a different spirit about Emile. He knew how to enjoy life. He was a

  good person with a great heart. And he was so loved and admired by so many.

  In fact, one of the moving moments for me personally was right after his death when

  his wife handed me a box and said “Emile wanted you to have this.” I remember my

  heart racing. I was confused. As I opened the box slowly, Emile’s golden Cartier pen

  appeared. It was the same pen he always used in the restaurant. The box also contained

  a hand-written note that read “It is with this pen that I signed contracts worth millions of

  dollars. It’s my lucky pen. It’s yours. You earned it. Now it’s your turn. Make me proud.”

  It was a very emotional day.

  Beyond that initial lunch meeting, his message to me was always about the

  importance of financial literacy, about the importance of developing your “Thinking

  Capabilities.”

  In fact, one of the last questions I was able to ask him was “why are you sharing this

  with me?” to which he replied “One of my favorite quotes was by Dalai Lama XIV; ‘Share your knowledge. It is a way to achieve immortality’.”

  That was so perfect. He achieved immortality with the ones he shared this information

  with… And now this is being passed on to you.

  And I was determined to do just that, and pay it forward, just like he did.

  Chapter Summary

  · The most important leverage of them all is KNOWLEDGE.

  · Financial literacy is critical to your success

  · Financial literacy allows you to be a better hacker of the game of finance in order to improve your lifestyle.

  · We have built a community of people that have the same goal—better lifestyle and

  less greed. Collaboration versus competition. Enjoying life versus accumulation of

  money.

  · Always be working on improving your thinking capabilities.

  Chapter Twelve

  The Family Bank

  During the years I knew my mentor, he and a few of his very wealthy colleagues

  frequently mentioned two terms “family office” and “family bank” often. I never bothered

  to ask about them, but I recalled Emile also mentioned them a few times.

  I remember hearing that upon his death, Emile’s family received a significantly large

  sum of money into their family bank.

  I felt it was time I asked my mentor what exactly these things were. I had made many

  assumptions, but I felt it was important I learn some more specifics.

  This conversation I would have with my mentor would again open my eyes to

  something completely new that could benefit the whole world. It was becoming apparent

  to me that the
rich have a perspective on life and a wealth of knowledge and both are

  completely different from the rest of the world.

  The one thing that struck me immediately about this so called family bank was that

  the people on the “Receiving” end of the WealthQ all seemed to have one.

  This conversation with my mentor started with me asking him a simple question “So

  what exactly is a family bank?”

  “It is by far the most powerful and important financial strategy that can have a

  significant impact on most people’s financial lives anywhere in the world, and in fact will

  make the world a better place” he said. “Let me explain why…”

  * * *

  Let’s start with a very high level question—what is a family bank?

  The “family bank” is an exciting concept for the accumulation of wealth for the benefit

  of a family through generations. It is referred to as a “bank” because it mimics the

  workings of a traditional bank but for the sole benefit of a family. The primary reason and

  purpose for its existence is the funding of various needs of the family now and also for

  future generations. The concept allows for the recapture of the interest that normally

  would be directed to third-party financial institutions, as well as the passing of intellectual assets and relationships to future generations. The potential compound growth of your

  assets (financial, intellectual and relationships) from this activity makes this a very

  compelling strategy for families to adopt. In fact, this strategy, as a whole, with all of its benefits is one of the most powerful and effective strategies for families today. Actually, it is THE most important and powerful strategy for families today!

  So let’s dig a little deeper to better understand what I just said above!

  How do you pay for “stuff” you buy?

  You pay for it with cash, a credit card, a loan, etc. These are financing methods. They are also known as financing systems.

  The family bank is just another financing system. It’s another option for financing a

  purchase, except that you “own” the credit card or the loan company. The family bank is

  your own personal lending company.

  But that’s just the start. It’s a lot more than that.

  Imagine a “bank” owned by you and your family to finance all your purchases. But this

  is not a brick and mortar bank, it’s just a concept. Think of it as a separate financing

  business that does nothing more than finance your family’s purchases.

  Cash, credit cards, loans from banks or individuals are all financing systems. So

  is a Family Bank. It’s just another option for financing purchases.

  There have been many books written about the concept being a trust or about

  insurance products, but they are missing the big picture. It’s a lot more than that. It’s like someone telling you that a race car is the steering wheel, or the engine. But obviously, a

  race car is a lot more than that.

  A whole book can be written on the incredible benefits of a family bank, and this topic

  is well beyond the scope of this book, but I will cover a few of the main things you need

  to know.

  You can download a more advanced report on this topic.

  Refer to the Resources page.

  How a family bank works at a basic level:

  Imagine having a regular checking account in your local bank in which you deposited

  $5,000. The amount could be any amount.

  Then you designate that account as a separate “entity” in your mind, as a “bank” that

  you can only borrow money from, not take money from. We are all used to “taking”

  money from a checking account and using it. This is different. You NEVER “take out” the

  money, you simply borrow it and pay it back over time. With this account, money never

  goes out without coming back and coming back with interest. Never!

  You never TAKE money out of your family bank, you simply BORROW it and

  pay it back with interest.

  To distinguish this checking account at your local bank from other accounts you might

  have, you call this account a “family bank vault.” There are other types of “vaults” for

  family banks, but for now we will stick with the checking account.

  Again, every time you borrow money from this vault, you have to pay it back with

  interest. Furthermore, every time there’s a need to either borrow the money or lend it to

  a family member, instead of you being the only one making the decision on what to fund, the whole family, or a committee made up of family members makes that decision. After

  all, it is a family bank.

  I’m simply trying to paint a very simplistic picture here to start. As you will see, it

  becomes a lot more interesting.

  When you borrow money from your vault (checking account in this case) and pay it

  back with interest, your vault starts accumulating money. Now you have a little more

  money in your vault to re-lend out (money from the pay back of the loan and the interest

  earned from the loan).

  That in a nutshell is a family bank.

  As you build this bank’s vault (again, checking account in this example), you start

  establishing some “family bank” rules for the family to follow.

  The family should meet on a regular basis (monthly) to decide which loans to fund.

  Family members can submit “loan requests” and these are discussed at the monthly

  meetings. If there is a need for an emergency loan, a family meeting can be called for

  that emergency request, but otherwise it’s discussed at the monthly meetings. For

  example; your son Bob submits a “loan request” wanting to purchase a laptop for $1,800.

  The family decides whether or not to fund the loan during the family meeting.

  It is recommended that once a year the family have a “Family Retreat” that is paid for

  by the family bank. The annual Family Retreat is a great time to share goals, challenges,

  successes and lessons learned and also to plan for the next year. This retreat should be

  filled with fun activities for all the family members, which will build great family

  memories. The retreat should also include wealth building educational discussions for

  everyone.

  Again, that in a nutshell is a family bank.

  But as you will find after you start and begin to grow your family bank it can and does

  become a lot more interesting.

  Benefits of a Family Bank:

  There are many benefits to the family bank. Here are a few.

  Part of the family bank is having these regular “family meetings” mentioned above.

  These are where the family meets to discuss loans to fund or not for family members.

  These meetings include everyone, but typically the younger family members (under age

  of 16) cannot vote. By having all the family members participate in these meetings the

  family bank and the financial knowledge acquired by the family is shared within the

  family and passed on from generation to generation.

  The Rothschild’s (Mayer Rothschild) started this concept in the late 1700s. This is how

  their wealth has been passed from generation to generation, not only their financial

  wealth, but also their intellectual wealth.

  Through these meetings, the family members come together often (at least once a

  month), and the extended family at least once a year or more. This brings the family

  closer and builds a stronger family unit.

  Another hug
e benefit of the family bank is access to and control of money. The ever

  growing amount of money in the family bank gives the family peace of mind knowing

  they have financial security in the event of an emergency. Beyond that as well, it gives

  the family access to money for major discounts and good deals, and access to such

  money quickly.

  Additionally, by using specific vaults, some of the money can be used to grow in a tax-

  advantaged environment earning 4% to 8% which the family can borrow against while

  the money keeps growing. Talk about using money efficiently. The average American

  with a college degree makes $2.1 million over their career. Approximately 25% of that

  amount goes towards interest alone, not principal and interest but interest alone.

  By having the family bank, that interest can be recaptured into the family bank and not

  paid to some third party financial institution. Every family member, including you, each

  child, each sibling, and your parents can have their interest over their lifetime recaptured

  into one place. The amount of interest that is being paid out to third party lenders that

  can be recaptured into the family bank is massive.

  The family bank also has some pretty advanced features which make sure the amount

  of money in it keeps growing with every generation, beyond what we have discussed

  here. This is beyond the scope of this book.

  Why does the family bank work so well?

  Many people incorrectly think that with a family bank, money is essentially going from

  one pocket to another. That’s what I thought when I first learned about it. That’s not the

  case.

  Let’s divide the borrower/banker relationship into two sections. On one side, you have

  the borrower who borrows money from the bank and pays it back over time. On the other

  hand, you have the banker side that lends money and when they receive repayments,

  they relend the money back out.

  Consider the above table. Let’s step into the borrower’s shoes and see things from his

  perspective. The borrower thinks to himself “I will generate $2.1 million over my lifetime,

  and pay close to $500k over my lifetime in interest alone. A loan will cost me some