If you recall our previous story about Jack and Jill, you may recall that Jack discovered he has been borrowing money on one end, while simultaneously investing in those same companies. He has been paying high levels of interest, and getting mediocre, risky returns. However, coming to a realization of all the additional middle men he has placed into his financial situation has led him to the discovery of one of the most impressive concepts he has ever learned of…banking. Here is the rest of their story.

Jack and Jill have decided that they want to relieve themselves of all the unnecessary middlemen that have crowded their financial plan for so many years. They sit down with a very nontraditional financial planner, who understands wealth and its process, and who simply uses products to compliment or enhance the already correct process.

Jack and Jill, following the discussion with their new and improved financial planner, decide they like the control of their money, they don’t ever want to lose it, and they would like some tax advantages as well. They decide to begin creating their own banking system by utilizing an overfunded and maximized participating permanent life insurance policy. They have learned that if they correctly overfund the policy they will have a fully functioning bank after 3 years, wherein every dollar deposited is fully accessible. They have also discovered that they will be able to capitalize their bank in five years, with their total contributions equaling their available cash value, or in other words, they will have a created a very efficient savings account with a death benefit on the side.

Jack and Jill have decided they are going to start redirecting their debt back to themselves and become their own bankers. They begin using the money to redirect all their debt back to themselves, and are now getting the full 11% and 7% they were unnecessarily giving to HSBC and Bank of America in the form of credit card debt and car loans. If you can recall, they were investing in mutual funds returning them 5%, taxable growth, which consisted of the same companies they were indebted to. They have increased their returns dramatically, eliminated all the risk, and within their policy the money will have additional growth and grow tax free. They couldn’t be more pleased.

Jack and Jill also realize that by using their bank they are actually recapturing the principle and interest over time, and that they are dramatically increasing their wealth. They have been borrowing about 15,000 dollars every 4 years for the last 44 years, and they have accumulated nearly 700,000 dollars of cash value. Money they would have lost had they continued on their original path.

“Becoming your own banker” is a very powerful concept about controlling wealth and learning how to maximize the accumulation of it. It is a large misconception that you have to risk money to create wealth. This is incredibly false. By understanding the principles of banking, and using the correct vehicles, you can be in control of your money, and never have to take risk again.

Please watch our video about how to become your own banker, or contact us directly.

The essence of the Infinite Banking Concept is how to recover the interest that you normally pay to a banking institution through the use of dividend paying life insurance, so that the policy owner makes what a banking institution does. It is a third alternative to making a purchase. Instead of losing opportunity cost on cash, or the finance cost of using someone else’s bank, this alternative provides a way to do what you would normally do anyway, but recapture the cost of those purchases. Earnings grow within the policy tax deferred. You are both reducing your tax burden and capturing monies for yourself that a banking institution normally would receive. And by the way, you have a death benefit thrown in on the side!

Anytime you can cut your payment of interest to others and direct that same market rate of interest to an entity you own and control, which are subject to minimal taxation then you will have improved your wealth generating potential significantly.

The Infinite Banking Concept is not about investing, it is about financing, and financing is a process not a product. Financing involves both the creation of and maintenance of a pool of money and its use. However, when a financing system is combined with an investment system the combination of the two will always out perform an investment system. When the system combines reduced tax liability with a financing engine and allows complete control over your investments there appears to be no system capable of generating wealth with as much consistency or speed.

A primary concept or principal is that you finance everything. You either finance by: Paying interest to someone else – a bank, lender, etc. Or giving up interest you could have earned otherwise. (When you pay cash the interest the money could have earned is forfeited).For these reasons when we are discussing investment alternatives we must not only weigh the return we will receive but we must also evaluate what we are forfeiting or giving up. This mind set will become more important as we evaluate the “Infinite Banking Concept.” For all of the reasons mentioned above every person should be fully engaged in two businesses – Your occupation and Banking.