Becoming Your Own Banker

Getting Started: Think Like A Banker

It’s been said that if all the money in the world were distributed equally among all the people in the world that 97% of all the money would be under the control of 3% of the people within just 10 years. Why? Proven banking strategies that measure their success in centuries. Those who understand the banking equation will capture and control the money.

Most people believe they understand banking. You write checks, you put money into the savings, and you get loans at the best interest rate you can find. However, most people fail to understand the most profitable elements. As a result, the average consumer pays over 34% of their after-tax dollars on interest over their lifetime.

Think about that. They blindly give away over 34% of all their after-tax dollars in interest. That’s banking and this article will help you see the monetary upside available through the Infinite Banking Concept®.

Being on the right side of debt holds a compelling wealth building strategy that can be put to work for you! In fact, it could amount to over 1 million dollars on your next eleven car purchases alone.

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How Did Infinite Banking Start?

Before taking a closer look at this wealth building vehicle it is important to understand what the Infinite Banking Concept® is and how it came to be. The Infinite Banking Concept® was developed by Mr. Nelson Nash during a difficult financial struggle.

Interest rates spiked in 1981 and 1982, rising to 23%, while Nash was holding debts totaling $500,000. Interest alone was approaching $10,000 per month. This “awakening” period was compounded by his house being burglarized, the unexpected death of his 52-year-old brother, and the birth of his second grandchild who five weeks into her young life was diagnosed with cancer.

Nelson is often heard saying, “the rapid succession of this bad news can really dramatically increase the quality and quantity of your prayer time.”

Grow your whole life insurance policy

Harvesting the Power of Compounding Interest

Nelson graduated from the University of Georgia in 1952 as a forester. Studying forest finance shaped much of his early thinking. In the forestry world, you must think many years into the future with a clear understanding of what the endgame looked like: harvesting mature trees.

Dealing with compound interest over a long period of time with no taxation on the growth left an indelible impression. Following a decade of consulting in the forestry industry, Nelson mixed 35 years of making a good living selling insurance and working inside real estate.

The bonanza of selling real estate into a rising market had no end in sight or at least it seemed. The ventures got bigger and bigger and he got more involved, buying a large number of acres of rural property. The going was good!

1981 and 1982 brought the gravy train to a screeching halt and he found himself in the middle of a financial nightmare which was not unlike what many folks are facing in today’s economic environment. The weight of this burden weighed heavy on Nelson. The basic idea of the Infinite Banking Concept® was born during
numerous sleepless nights and time spent in prayer looking for a way out.

Nelson comments, “The answer came about like a baseball bat across the eyes. He was standing in the midst of everything it took to get out – but missed it because he was looking at things like everyone else. He had access to capital at a rate of 5 to 8% through whole life policies that he owned with three different companies.”

Hardship often helps us to see things to which we are normally blind too. It was evident to Nelson that he needed to increase his life insurance premiums dramatically to create a pool of cash values from which to borrow from to pay off the bankers. This was the starting place for Nelson, just like this article may very well be the new beginning you are looking for after weathering the Great Recession!

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Control Your Cash Flow

It’s not practical to think you can make it up by getting a higher return on the $5,000 dollars in savings. That’s like flying an airplane that’s only capable of flying 100 miles per hour right into a 345 mile per hour headwind.

No matter how hard you try, you are moving backward at 245 miles per hour. You’d be better off to land your plane and wait until the wind changes directions. Eventually, you’ll get a nice tailwind of 345 miles per hour, then your 100 miles per hour plane will be moving at a ground speed of 445 miles per hour.

The money flow in your life acts much like the tailwind for the airplane. It holds powerful potential when the money flow is headed in the right direction, such as back into your own banking system.

Much like the airplane arrives at its destination faster with the help of the tailwind, you too can arrive at your financial destination with the surprising speed with the help of the Infinite Banking Concept®.

Financial Vehicle

Choose the Right Financial Vehicle

There are many financial vehicles where you can store your money and build wealth for each of them with their pros and cons. But imagine for a moment that you can create the ideal financial instrument.

What would it look like or more specifically what characteristics would it have? Are you tired of restricted access to your capital inside your qualified retirement plan? If so, you would probably want the ability to access your cash, much like your checking or savings accounts.

Generate a guaranteed positive return like you get with bonds or certain annuities. Access the growth on your money without having to pay taxes on the increase like you can with a Roth IRA. Use your money as collateral to secure a loan like you can with real estate or other property.

Protect your money from creditors and judgments like you can with 401K’s and IRA’s. Bypass the probate process by going directly to your beneficiaries. Income and estate tax-free like you can with certain types of trusts.

Leave a legacy for your heirs or loved ones in the event you pass before being able to reach your accumulation goals like you can with life insurance. And continue to contribute to your account in the event that you become disabled and unable to work like you can with disability insurance.

Tax free insurance policy growth

Unlocking The Power of Permanent Insurance

These individual financial benefits come nicely wrapped in a surprisingly low-key and reliable product called permanent life insurance.

Although permanent life insurance has been around for over 200 years it remains one of the least understood tools in the financial industry even by advisors themselves. That’s because most people try contrasting permanent insurance with term insurance mistakenly thinking they are the same thing and that they provide the same benefits.

That’s the equivalent of trying to compare a price of a car with the price of four tires. While a car does have four tires it obviously has much more than that. Permanent insurance and term insurance are two very different products and the benefits they provide are vastly different.

At its core term insurance is a lot like gambling at the slot machine. You give some money to the insurance company and if your number comes up by the end of the spin they will pay your beneficiaries. If not you must pay to play again only next time you’ll have to pay more because the odds of your number coming up will have increased.

Using Your Permanent Insurance As A “Bank”

The cost to purchase the same amount of term insurance continues to rise higher and higher. This is precisely why less than two percent of all term insurance is ever paid.

The cost to continue coverage simply becomes too prohibitive so the coverage is dropped and no benefit is paid. Permanent insurance, on the other hand, is not like gambling at all because the payout is not contingent on whether you die during a specific period of time. In other words, your beneficiaries will receive the death benefit regardless of when that happens.

So with permanent insurance, you’re paying for a predefined specific benefit that is guaranteed not a benefit that is contingent upon an event that may or may not take place during a specified period of time. But that’s just the death benefit which is all there is in term insurance.

Permanent insurance, on the other hand, has both the death benefit and many living benefits as well which you can enjoy during your lifetime.

As mentioned earlier, permanent insurance shares many of the most desirable characteristics of several other well known financial products like checking and savings accounts, bonds and annuities, 401-K’s, IRA’s and Roth IRA’s, real estate and even trusts.

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Why Can Permanent Insurance Be Better?

However, unlike those products, a permanent insurance policy does not require you to do several things:

  • Does not qualify to get your money back like with a mortgage
  • Does not penalize you for accessing your money before reaching a certain age or require you to begin withdrawals or limit the amount of your contributions like a 401-K or IRA or Roth IRA
  • Does not restrict where you can put your money like most qualified plans
  • Does not burden you with an unknown future tax liability like 40-1K’s and IRA’s
  • Does not subject your hard earned money to real estate or stock market declines like real estate, stocks, bonds and mutual funds.
  • Unlike term insurance does not require you die before you can benefit from the policy.

Plus a properly structured permanent insurance policy is the only vehicle where you can use your money for anything you want and still earn interest on it as though you hadn’t even touched it. Just think about that for a while!

Properly Design Your Insurance Policies

As you can see a properly structured permanent insurance policy shares many of the favorable characteristics of the most popular financial instruments around while avoiding nearly all of those that are less desirable.

This means you can have more liquidity, use, and control of your money. The facts speak for themselves. These characteristics make permanent insurance the perfect vehicle for operating the infinite banking concept.

Inside Nelson’s best-selling book, Becoming Your Own Banker, the idea of unlocking this new form of wealth building has relieved many from financial hardships.

For the hundreds of thousands that have opened its pages looking for a financial system they could grow, access and control, the fan favorite has unquestionably become the equipment financing examples, another very popular scenario with Nelson’s speaking seminars has been Infinite Banking’s ability to turn a depreciating asset like a car purchase into an appreciating asset using the Infinite Banking Concept®.

Cars are an expensive luxury that dampens our ability to build wealth…or at least that’s the case until you put the Infinite Banking Concept® to work. If you received this article as an invitation to an upcoming seminar with Mr. Nash understand that the examples below are just the beginning.

Designing Life Insurance

Maximizing The Power Of Becoming Your Own Banker®

Now listen closely because you are about to see the power of becoming your own banker. Let’s take a look at purchasing a car at an 8.5 percent loan after you fund your bank for the next four years by making premium payments into your permanent life insurance policy.

Now, you will be able to borrow from your own bank which is the cash value in your policy to pay for the car. Then instead of making payments to the ABC Finance Company, you make the payments to yourself by making the payments back into your policy.

To maximize the power of becoming your own banker you must pay yourself at least the amount of interest you would be charged by the Automotive Finance Company preferably more. What does this amount to?

Let’s assume you will buy a new car every four years for the next forty-four years so eleven cars total. Each car will be financed for 10,550 dollars and can be financed at 8.5 percent interest for forty-eight months.

You have a choice with how to pay for these cars. You can use one of five methods. You can buy them through a bank or other finance company, lease them, pay cash for them, use an interest-earning savings account or use your own bank by using the infinite banking system. Let’s look at each method in further detail.

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Buying a car through a bank at 8.5 percent interest would cost $260 per month, which is $3,030 per year. (When you make annual payments you get a discount).

Over forty-four years that amounts to $137,280. Leasing a car costs a little more. Why, because you lease from the owner of the car. Is the owner a fool?

No, he will make some money on the activity. Lets then assume that leasing will cost you $175,000. Paying cash for the cars will first require you to save up for the car.

So you would have to defer buying the first car for four years. The overall cost for the cars would be $116,050 which is the 10,550 times eleven
cars.

The last two methods both involve having a banking mentality. The difference is using your own bank versus using someone else’s. Let’s compare. Assume that for the last two methods you understand the need to capitalize your bank.

So you accumulate $5,000 per year for seven years before purchasing the first car. You could accumulate your money in a savings account and buy certificates of deposit at someone else’s bank in the amount of $5,000 with the yield of 5.5% interest.

However, this interest is taxable so the after-tax effect is 4% assuming a thirty percent tax bracket. After seven years you would have 41,071 dollars in your account. So you buy your first car and continue making the $3,030 car payments into your savings account.

By year fifty you would have $258,927 in this account. Alternatively, you could accumulate your money in a dividend paying permanent life insurance policy instead of in someone else’s bank.

For the first fourteen years putting your money in someone else’s bank comes out ahead. But from that point forward the infinite banking concept is favored in accelerating
fashion.

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In fact, by year fifty you will have $964,638. That’s $705,710 more than putting your money in someone else’s bank. Why is this? Because when you become your own banker you are the only owner of your bank so you receive the profits that would otherwise go to the bank.

It’s that simple and that powerful. There really is no comparison. Plus by using a dividend paying permanent life insurance policy as your bank you get the other inherent benefits with life insurance policies.

Namely, the dividends paid on a life insurance policy are not taxable, the money you borrow from the cash value is not taxable, and the cash value is protected from creditors and judgments in most states.

Hopefully, you have found this article to be both beneficial and eye-opening. This could be the answer to the biggest concern in life today. Relying on a company pension, 401(k), or social security to fund your retirement is obviously not realistic.

Solutions exist for a more peaceful financial existence. The Infinite Banking Concept® stands as a well-founded and proven alternative to the market chaos that dominates the news cycle. Please take the next step to seek out the person who chose to share this important message with you.

The Infinite Banking Concept® can bring you the financial security you want and deserve!

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