In a recent interview with CanadianSME Small Business Magazine, Darren Mitchell, Founder and CEO of Control and Compound Financial, discussed the limitations of traditional financial planning for real estate investors and business owners. Darren explained that conventional financial strategies often involve surrendering control of one’s money to financial institutions, which can hinder wealth-building opportunities. In contrast, Control and Compound’s approach, centered on the Infinite Banking Concept (IBC), empowers individuals to maintain control over their finances, enabling investments in personal development, businesses, and hard assets like real estate. Darren also shared how IBC provides tax-free growth, flexible loans, and uninterrupted financial growth, offering a more effective financial strategy for entrepreneurs and investors.
Darren is an entrepreneur, real estate investor, financial educator, amazon bestselling author, and founder of Control and Compound Financial where their specialty is helping real estate investors and business owners implement the power of Infinite Banking. After 20 years of practical experience and constant academic study while doing typical financial planning, he realized the investment strategies handed to advisors by financial institutions were not providing clients with answers or results.
They were being taught to push products and investment vehicles designed to benefit the banks and insurance companies that made them — not those who had invested! Since then, he has spent years learning how to truly help clients make money. He has studied the wealthy and he has learned the secrets they are using to accomplish their goals in a fraction of the time it takes most people. Now he shares his knowledge as a financial educator through training seminars, webinars and podcasts.
Why Traditional Financial Planning May Not Work for Real Estate Investors and Business Owners.
Can you explain why traditional financial planning doesn’t work as effectively for real estate investors and business owners, and how Control and Compound addresses these gaps?
Traditional financial planning often falls short for real estate investors and business owners because it centers around relinquishing control of your money to financial institutions. Consider how most people are paid: their money is deposited into a bank or financial institution, which then directs them to invest in Registered Retirement Savings Plans (RRSPs) or other conventional vehicles. These funds are typically locked away for 40-50 years, during which time the bank maintains control over your money. Upon retirement, you hope that there is enough money to sustain your lifestyle, but even then, the bank doles out your funds in small increments, still holding the reins.
In contrast, wealthy individuals think differently about their financial planning. They understand that true wealth is built through three key avenues:
Investing in Yourself: You are your greatest asset. Anything you do to improve yourself—whether it’s hiring a coach, joining a real estate group, or taking a course—provides the best return on investment.
Starting or Buying a Business: Wealthy people often create or acquire businesses, which become significant sources of income and financial growth.
Investing in Hard Assets: This includes real estate, land, gold, Bitcoin, and other tangible assets that hold and increase in value over time.
To pursue these paths effectively, you must be in control of your money. For business owners and real estate investors who recognize that their wealth-building journey depends on investing in themselves, their businesses, and hard assets, control is essential. The Infinite Banking Strategy, employed by Control and Compound, offers a way to regain and maintain control over your finances, allowing you to invest where it matters most.
The Infinite Banking Concept: A Strategic Approach to Wealth Building.
What is the Infinite Banking Concept, and how can it benefit individuals, business owners, and real estate investors?
The Infinite Banking Concept (IBC) is not an investment but a financial strategy that allows you to grow your money tax-free while avoiding the four wealth destroyers: taxes, fees, volatility, and unnecessary spending. The core product used in the Infinite Banking Strategy is a specially designed, high cash value life insurance policy.
Here’s how it works:
– Tax-Free Growth: The money you save inside the policy (whether personally or corporately) grows tax-free.
– Tax-Free Loans: You can take tax-free loans against your policy to invest in other opportunities, effectively multiplying your money.
– Tax-Free Death Benefit: The policy provides a growing death benefit that is paid out tax-free. This type of life insurance benefits you during your lifetime and offers tax-free income in retirement that doesn’t appear on your tax return and doesn’t have to be repaid until death.
How Loans Work in the Infinite Banking Concept.
How do the loans work in the Infinite Banking Concept, and what advantages do they offer compared to traditional loan options?
The loans available through a life insurance policy under the Infinite Banking Concept are highly advantageous, particularly for business owners and real estate investors. These loans are often referred to as the “Holy Grail” of loans for several reasons:
– Guaranteed Approval: You can never be refused a loan as long as you have sufficient cash value in your policy (up to 90% of the cash value can be borrowed).
– Flexible Repayment: These loans are not callable, meaning you can repay them on your terms—whenever, however, and in whatever amount you choose, making them ideal for investors who need flexibility.
– Tax Deductibility: If the loan is used for investment purposes, the interest is tax-deductible, offering further financial benefits.
– Uninterrupted Growth: Even when you take a loan, your full cash value continues to grow tax-free, completely unaffected by the loan.
The Specific Insurance Used for Infinite Banking.
What type of insurance is used for the Infinite Banking Concept, and how do you design a policy specifically for this purpose?
The insurance product used in the Infinite Banking Concept is an optimally designed high cash value, dividend-paying, participating whole life policy. Out of the more than 10,000 life insurance products available in Canada, only four are suitable for Infinite Banking. This makes it crucial to work with experts who understand how to design and implement these policies effectively.
Real-Life Success with the Infinite Banking Concept.
Can you share your experience of investing in two multifamily properties without using your own money through the Infinite Banking Concept, and what lessons can others learn from your success?
I utilized the Infinite Banking Concept to invest in two multifamily properties, both times without using my own money. Here’s how it unfolded:
First Investment: I took a $200,000 loan from my policy and invested as a limited partner in a 39-unit multifamily building. After 18 months of renovations, rent increases, and refinancing, I received my full $200,000 back as a return of capital—completely tax-free. Importantly, I still retained my original equity in the building, valued at $200,000+, which continues to generate approximately $10,000 annually in cash flow. The interest cost of the loan over 18 months was about $19,000, which, after tax deductions, resulted in a net out-of-pocket cost of just $9,500. With the original loan repaid, my policy’s cash value continued to grow, unaffected by the loan.
Second Investment: I borrowed $200,000 again and invested in a 38-room student rental. This property generates a net, after-tax cash flow of $7,000 annually for the first three years. The interest on my policy loan of $200,000 at 6.5% is $13,000 per year, which, after tax savings, reduces to a net cost of $6,500. This cost is fully covered by the property’s cash flow. After three years, once rents have increased to market rates, the original $200,000 will be returned tax-free, while maintain my equity investment and I’ll repay the policy loan. The cash flow from the investment will then increase to $10,000 per year.
Both investments have demonstrated the power of the Infinite Banking Concept to multiply money like a bank, grow my policy tax-free, and simultaneously build substantial equity and passive income. These are truly “AND” assets—providing multiple financial benefits simultaneously.
