Saturday, October 15, 2022

How To Be Your Own Bank

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Infinite Banking Wiki – How to be your own bank

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How To Become Your Own Source Of Financing

In a Nutshell: By using a little-known form of high cash value, dividend-paying whole life insurance, you can essentially be your own bank your own source of financing instead of relying on traditional lending institutions.

What if you could banks, finance and credit card companies altogether and become your own source of financing?

Its easier to do than you might think and hundreds of thousands of people are already doing it!

The Bottom Line For Every Saver

If you like to skim, heres the bottom line:

  • Be your own bank by owning and controlling capital
  • Earn uninterrupted compound interest
  • Start by maximizing the cash you keep and storing it in whole life policies with mutual life insurance companies
  • Use arbitrage to earn higher rates of return

By the way, if youre one of those savers who is serious about learning how to put this whole process on steroids, get the Investors Quick and Easy Guide to Privatized Banking: How to Earn a Return in 2 Places at the Same Time, with the Same Money, so you can keep your money available and earn maximum returns at the same time and get your money to do the most effortlessly without having to put your capital in a position of risk with wall street!

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The Rich Utilize This Process To Grow Their Wealth Exponentially

Infinite Banking has been a term used scarcely in the investment world. It is not a new concept or phenomenon but many people, even investment professionals who have been a part of the industry and know about its ins and outs do not know about the concept of infinite banking.

If you have heard of it, you are amongst a select few who have this information that the majority of others dont. Infinite banking or banking on yourself are synonymous terms first introduced by Nelson Nash who was an economist, and he aligned himself with the Austrian school of economics.

The very first principle that must be understood is that you finance everything you buy you either pay interest to someone else or you give up interest you could have earned otherwise. Nelson Nash

This concept to generate wealth is certainly not for everyone. I will explain in detail the pros and cons whether it makes sense for the average person. Now, having said that, the biggest names in American banking families, be it the J.P Morgan family, the Rothschilds, or the Rockefeller’s they all have amassed billions of dollars using this very same concept. Interested now? Let’s dig in.

Life Insurance Policy Loans

BYOB: Learn How to Use Bitcoin to Be Your Own Bank

When youre ready to start borrowing against your policy , you get it from your insurer. Your loan comes from the cash value portion of your plan and is used as collateral.

Because the insurer holds the funds to cover your loan means there are no underwriting requirements. You can keep the loan outstanding for as long as you want. This means no hard inquiries against your credit. The loan wont show on your credit report because its all done in-house through your mutual life insurance provider.

***Caveat ~ When you withdraw from your cash value it reduces your death benefit until its paid back.

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Using Life Insurance As Your Own Bank

In our continuing series on the infinite banking concept® we wanted to lay out a framework of how banking with life insurance actually works. If you are already convinced that using life insurance as your own personal bank is the way to go, then please give us a call today for a complimentary strategy session.

Now for you readers who are not yet convinced at the utility of being your own banker, consider the infinite banking pros and cons in light of the following article about using life insurance as your own personal bank.

A Better Way To Be Your Own Banker

Instead of paying that $12,500 a year in premiums to a mutual insurance company , you could put it into a deductible tax free 401 plan and invest the funds in a diversified portfolio. Youd even be better off to put it into a taxable account. Then if you needed a new car or water heater, youd have cash and wouldnt have to borrow from yourself or anyone else.

After spending hours researching being your own banker, my staff and I understand what BYOB really means. It stands for Bring Your Own Bottleof pain reliever. Youll need it for the headache of trying to understand that this is a slick advertising scheme. It makes no sense for anyone except those insurance agents selling the life insurance policy.

Learn more about our Insurance Planning services.

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How To Get Started

Paradigm Life specializes in providing clients with the proper tools and education so as to take advantage of the benefits of Infinite Banking. In addition to structuring your policy correctly, well make sure its personalized to fit your unique financial needs and goals. We take an active role in continuing to educate and provide guidance to our clients, even after your policy is in place.

Millennials Meet Inflation: Theres Never Been A Worse Time To Leave Your Savings Sitting In A Bank

How to Become Your Own Bank?

People under 40 are rightly fearful for their savings

Millennials are facing inflation for the first time in their lives

Eoin McGee, author of ‘How To Be Good With Money’. Picture by Steve Humphreys

Valarie Daunt, human capital lead at Deloitte Ireland

Jason Dorsey leads the Centre for Generational Kinetics

‘We built a small pot of savings’

‘Were back living month to month’

Millennials have spent most of their adult lives living with economic uncertainty but unlike previous generations, they have never known the sharp shock of inflation.

Born between 1981 and 1996, just after the sharp price hikes of the 1970s and 80s, they graduated from secondary school and college during the economic crash of 2008 and were dealing with spiralling house prices before the pandemic hit.

Now people under 40 are experiencing price hikes for the first time and they have been telling leading money management expert Eoin McGee how theyre coping with the impact.

Mr McGee holds weekly Q& A sessions with his 90,000 online followers, almost 80pc of whom are between the ages of 24 and 40. He says the new reality is causing huge anxiety.

The people who follow me are financially savvy, so Im getting their perspective and what Im hearing is that during lockdown they paid off the credit card, got out of debt and had good savings for the first time. Now all of a sudden they are finding they need the extra money just to get to the end of the month.



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So What Really Is Infinite Banking

One of the strongest selling points of the whole life insurance policy is the fact that this product allows policyholders to borrow against the actual cash value of the life insurance policy. Now, taking advantage of this in our favor, according to Nash, a person having enough cash reserves deposited in these life insurance policies can continually, over long periods of time, borrow from themselves using this same policy as collateral.

This way you wont need to borrow from a bank ever again. You would just borrow from yourself and continue paying yourself back over time thus becoming your own bank. Needing the money to buy an engagement ring, a new car or house, or a childs education you can borrow for anything using this policy. No more paying interest to the banks anymore. Think about it this is beating the banks in their own game. How good!

Now we come to the infinite part of the infinite banking process and this refers to the whole life insurance payout in the event you are to die. As long as youve paid regular premiums on your policy, the whole life policy always payout. A policyholder can continue to borrow against their policy throughout their lifetime and once they die, the payout goes to the beneficiaries who can then repeat this magical process again and bank on themselves.

Who Does Infinite Banking Work For

To utilize an infinite banking concept, you must have a whole life insurance policy. Not everyone will be able to obtain one, and even if you can, the monthly premium payment is typically fairly substantial, at around 10% of your income.

Before even considering this, you’ll need to have a meaningful, dependable income stream and a solid understanding of money, loans, banking, and investing — or you could end up in a position of overextending yourself.

This banking concept is ideal for the business owner or real estate investor who is looking to grow their business. It’s also helpful if you are someone who already maxes out your Roth IRA contributions on a regular basis, because this can be a way for you to grow your wealth tax-deferred.

There are skeptics who think the infinite banking system is a scam. But whole life insurance is considered a tier 1 asset by the traditional banking system. Using whole life insurance as a banking function was an entire course at the Wharton School of Business, and some of the world’s wealthiest individuals have used it to create generational wealth. The âinfinite bankingâ moniker is just a marketing name Nash created to popularize this banking concept it has been used since these life insurance policies were first offered.

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Would You Like To Find Out How Much More Wealth You Could Have When You Become Your Own Source Of Financing

No two Bank On Yourself plans are alike. Each is custom tailored to your unique situation, goals and dreams. To find out what your bottom-line, guaranteed numbers and results would be if you added Bank On Yourself to your financial plan, request a free, no-obligation Analysis today, if you havent already done so.If youre wondering where youll find the money to fund your plan, keep in mind the Bank On Yourself Professionals are masters at helping people restructure their finances to free up money to fund a plan. Here are the eight most common places they look.

Pay Down The Loan On Your Terms With Your Own Private Family Bank


Thankfully, a Whole Life policy loan is a private loan between you and the insurance company, so it doesnt show up on any credit report. Also, since the mutual company is holding your growing cash value as collateral, theres no stringent payment structure in place with your own bank. Here are your options for repayment:

  • Pay principal and interest on whatever schedule you want
  • Make interest-only payments
  • Pay nothing until you can make a balloon payment for the entire balance
  • Pay nothing then eventually have the Whole Life death benefit pay off the loan when the insured passes.

Needless to say, theres no other institution that offers this kind of flexibility to be your own bank with. Obviously, you should schedule some sort of regular loan maintenance, but its certainly not required by the insurance company.

In fact, I have contractor clients who bid jobs and have to come out of pocket for materials and labor costs. They float a Whole Life policy loan for close to a year and then pay it off in one fell swoop when they get paid for the entire job. We encourage them to pay whatever minimum interest maintenance is needed to maintain simple interest on a flat loan balance while earning compound interest on an increasing cash value balance. However, when a banking life insurance policy is performing well as your own bank, the minimum required loan payment may be nothing at all.

Here are the 3 reasons why becoming your own banker using life insurance works:

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So Where Do You Start

Starting a bank might sound like easy money, and you’d expect that a lot of people would give it a try. Instead, there only are about 20 applications to start banks in the U.S. each year, according to Carpenter. And just 10 new federally chartered banks opened in the first three quarters of 2019. That’s because starting a bank requires a lot of work and money. Typically, the process takes about a year and a half.

At the start, when potential bank founders come in to seek help from Carpenter, he first wants to look at their business plans. “The bottom line when people come in is, does it make sense or not make sense, based on competition and the business plan?” he explains.

If it looks as if a new bank has a good chance of success, that’s when the complicated part begins. Bank founders need to put together a board of directors to oversee management, and then they have to go out and raise enough capital to fund the bank’s operations. We’re not talking just taking a loan out of your 401, either this requires serious money. “Most likely at the low end, we’re talking about $10 million,” Carpenter says. “We just opened a bank in New York for which they raised $130 million.”

Benefits Of Being Your Own Bank

And now youve freed up your mind, youve freed up your money, so you can actually make money like the banks do for the rest of your life, without having to take any risks, without having to change your cash flow or your lifestyle. Just by changing where the payments are going.

One of the major benefits of infinite banking is to get out of debt. However, it does not end there. Once the debt is gone, you can use the policy to pay cash for everything so that you never get back into debt. You will have complete control over your money and be able to determine where it is spent and used. Essentially, all major financial stress can all be solved or helped by becoming your own banker. Take the steps to be your own banker today.

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How Much Do You Need To Start

The younger you start, the lower your premium. Pricing for this is tricky as no two insurance companies are identical. Youll want to do your homework.

Lets say youre a healthy 25-year-old male and want to take out a $1M policy. Youd pay $688 a month for the rest of your life. If you start a plan when youre 30, its $827 a month and keeps getting higher the older you are when you start.

Think of the dividend-paying portion of your policy as the cash-value in a savings account.

Benefits Of Becoming Your Own Bank

How To Become Your Own Bank | Wealth Nation

Considering taking out a loan?

Why not just lend yourself the money?

Yes, it’s that easy when you become your own banker by practicing a financial strategy that leverages permanent life insurance to put you in control of your own money.

No more walking into the bank, hat in hand, filling out applications and waiting to find out whether or not you qualify for a fantastic interest rate. No more fees–application, origination or otherwise.

It’s just you, your money and whatever you want to do with it.

That is, IF you are your own banker.

To be your own banker, you take out a dividend-paying, compound-interest generating whole life insurance policy and use its accrued cash value to finance your dreams.

When you are your own banker, you cut banks out of the lending equation, keep more of your own money and build wealth.

You also get to realize these five less obvious benefits:

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What The Naysayers Say About Becoming Your Own Banker

History tells us that a lot of people have issues when seeing a new product or service that is not mainstream or traditional. Just consider the internet and you have all the proof you need. Most people embraced it early on but there were many people who considered as dangerous as voodoo magic simply because they could not wrap their head around how the concept worked. We see the same push back with the Infinitive Banking Concept. Here are some typical responses from the naysayers:

How Do I Know If Infinite Banking Is Right For Me

Anybody who plans to use the infinite banking strategy must be prepared to make a major commitment to the concept.

Whole life insurance policies are not cheap. In fact, it is common for policyholders to spend at least 10% of their annual income to fund such a policy, according to the Corporate Finance Institute, which provides online financial analyst certification programs.

That fact alone may put infinite banking out of the reach of many.

It also is important to know your spending habits and to gauge your ability to handle money responsibly:

  • If you withdraw money from your cash-value savings, will you be able to pay it back?
  • Will you avoid withdrawing all of your cash value, so that you do not end up putting the entire policy at risk?

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