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The Infinite Banking Concept is one of the most brilliant financial strategies ever conceived. Although it has been around for decades, it is one of the best-kept secrets in the world of personal finance. Frankly, I was amazed that I had not been exposed to it sooner than I was, but I am glad I finally discovered it.
The essence of the Infinite Banking Concept is that anyone can “become their own banker” by building a fund from which they can borrow money. As the fund grows, they can borrow more and more money from themselves rather than from lending institutions, but where it gets really good is that they pay the same interest that they would normally pay to the lending institution to themselves which further helps their “banking fund” grow. It will certainly challenge your traditional way of thinking about money, but keep in mind the traditional way we have viewed money hasn’t kept many from experiencing a financial storm over the past several years.
You can implement the Infinite Banking Concept using a variety of financial instruments, from a simple savings account to a CD or a whole life insurance policy. In the book that explains the intricacies of the Infinite Banking Concept, Becoming Your Own Banker, Nelson Nash illustrates how using a mutually held, dividend-paying, whole life insurance policy can produce the best results. The reason that this vehicle works the best is that you not only see growth from paying yourself interest but since these policies pay dividends the money grows that much faster. Another advantage of using an insurance type instrument to build a “banking fund” is that you will have a death benefit, and as your fund grows, it could turn into quite a significant benefit, one that you can leave for your family or estate.
For those out there that shut down because I mentioned insurance or whole life insurance, let me reassure you, Infinite Banking is not about insurance, it’s about learning a new way to bank. If you are currently paying interest to anyone but yourself, you need to take a closer look at this. Also, because it isn’t about insurance as much as it’s about banking, your insurance agent will most likely not understand the concept. In fact, the people who work for the insurance companies most likely won’t even be able to help you use your policy to do Infinite Banking because that’s now what they do.
The two primary benefits of Infinite Banking are paying less interest to financial institutions and less tax on the money you would pull out for retirement. Can you imagine a system that empowers you to grow your nest egg as you spend money? Those who use Infinite Banking to purchase cars, end up making money instead of losing money. I know it’s hard to wrap your head around, but just envision not paying someone else interest, but rather paying yourself interest. What about a system that allowed you to tap into your retirement nest egg without a penalty or taxes? Again, the Infinite Banking System will help you accomplish that as well.
In life, if something seems too good to be true we tend to be skeptical. Rather than losing out by being a skeptic, I encourage you to be proactive and get a copy of the book, Becoming Your Own Banker, and learn what it’s all about. It’s a simple read (86 pages) and the illustrations will help solidify the concept. I am confident you will be glad you did and I am. Feel free to post any questions in the comment section below and I will gladly respond. If I don’t have the answer, I likely have a colleague who does and I will find it for you.
If you want to speak with someone about how you can implement the Infinite Banking Concept to radically enhance your personal or business financial position, contact me and I will have a financial educator contact you.
Hi Anthony. Your article is pretty good, you use simple language and a focus on financing.
It is unfortunate that to use the best vehicle which is a whole Life Insurance policy with a mutual company and designed according to Nelson Nash’IBC concept, people get turned off.
It is because of advisers who do not understand that this great process that happens to use an insurance product gets chastised.
Jorge, Thanks for your input. I agree, and that’s why education is so important. Nelson Nash’s book stands up against a traditional financial system – one that’s not “for the people” but in favor of those selling to the people.
Many people fear and avoid what they don’t understand, which is why they don’t take action. That’s why I recommend that everyone read Nelson’s book. Sadly, many will read the boo and go their “trusted advisors” who aren’t making money for themselves or their clients and keep doing the same as usual. To get some different, you have to take different actions. That’s why I am such a big advocate.
Even more sadly, people like Dave Ramsey and Suze Orman, won’t accept the challenge to put any of their strategies up against Infinite Banking. Here is the link to that story if you have not read it – https://www.bankonyourself.com/suze-orman-and-dave-ramsey-discuss-bank-on-yourself.html
It’s sad, but it made me lose some respect for both of them. Someone did point out that they are really celebrities now who got famous through their opinions on finances.
Wishing you much success!