NEW YORK (CNNMoney.com) — Withdrawals from 401(k) retirement saving plans saw their biggest spike in over ten years, Fidelity Investments said on Friday, in the latest sign of a dismal economy.

Fidelity reported that 62,000 Fidelity participants made hardship withdrawals from their 401(k) workplace plans during the second quarter. That’s up from 45,000 participants during the prior quarter, a 37% increase. That means that 2.2% of Fidelity customers took a hardship withdrawal in the second quarter……

Unbeknownst to the majority of 401(k) owners, they could have created a banking system that would have allowed them to withdraw funds, determine their own payback schedule, and not have to worry about the potential tax consequences if the person were to lose their job, were unable to pay the loan back, or switched jobs and could not “roll” that loan to his/her new employer. Remember if you take a loan from a 401(k) and don’t pay it back or lose your job, you now have a tax liability and potentially a penalty if you are under 59 ½ years old.

There is a 401(k) alternative, creating your own banking system, to access funds, determine your own payback schedule, and if you have to change jobs or lose your job it won’t have a tax affect on the loan. Keep in mind that even within our own banking systems we want and need to pay back the loans, but they can be paid on our terms…..not theirs.

Better yet, within your own banking system you are paying YOURSELF back, which can be a substantial difference over time in creating wealth.

To learn more go to: www.becomeyourownbank.com

–Dan Thompson

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.

Ever wonder where your investment dollars end up? Jack’s story reveals some very interesting truths about your investment dollars.

Jack is a middle aged guy who works hard to make a living. He is happily married to his wife, Jill, and they have 3 children. They live in an average home, with an average income; they have 2 cars, and some consumer debt. Jack and Jill are who you would call the average American family.

Every other week when Jack gets paid he automatically deposits 300 dollars into his savings account. After a couple years of saving, Jack and Jill decide that it’s time to do some investing; they’ve grown a substantial amount of money, and want to put it to use. They sit down with a financial planner to discuss what they should do, and he points out that there are some mutual funds he knows of that are doing very well. He also indicates that “diversification” is key, and suggests bonds as a great place to allocate some dollars. Does this discussion sound familiar?

Following their meeting with their financial planner, Jack and Jill are convinced that “diversification” is what they need, it makes them feel all warm and cozy inside, as if nothing could ever go wrong. Now instead of getting sidetracked here, discussing the absolutely incorrect principles of traditional financial planning based on “diversification,” “buy and hold,” or “dollar cost averaging,” and their false sense of comfort, let’s realign ourselves with the story at hand, following Jack’s dollars. We will discuss these issues at another time.
Jack and Jill find that they are getting 5-6% returns on their mutual funds (again, a discussion for later on the realities and falsehoods of this generous assumption), coming out to 4-5% after taxes. Not bad right? Something in those mutual funds is producing some strong growth for Jack and Jill’s future retirement. Jack, being very curious, decides to investigate a little more into these mutual funds, and recognizes the two following investments as a substantial part of these funds:

• HSBC Finance Corp
• Bank of America Corp

This find has left Jack a little perplexed, and even more curious, so he decides to further his investigation. He pulls out his bills for the month, and finds one of his credit cards. He reads through the fine print and realizes that he has been paying almost 11% interest on his debt, which doesn’t surprise him, until he realizes why he was so intrigued with the two finds in the mutual fund portfolio… He makes his payments to HSBC! He’s been paying 11% to get 5%!

But it doesn’t end here, Jack still has his car loans to look over. He looks at his payments and finds that he has been paying 7% interest on those loans… to Bank of America! He has been paying 7% to get 5%! What a rip!

Hundreds and thousands of people do the exact same thing as Jack on a regular basis. After all, what are a large majority of the investments out there anyway? Someone else’s debt… or our own! Many search for investments when they have most of the investments they will ever need in their very own financial situation. They risk their money, hoping others will make debt payments in order to satisfy these investments, they get smaller returns, or losses, and in economic times such as these, they lose both money and sleep.

Continuing the story…

Jack realizes that he has a problem. He has created unnecessary middle men in his financial plan. He pays
fees, taxes, and incurs risk unnecessarily. So Jack decides to investigate a little more into his situation, and realizes that if he would eliminate the middle men, invest his money directly into his own personal debt, he will substantially increase his rate of return, never incurs taxes on that growth, eliminate risk, and be in complete control of his money. He seriously thinks it over and wonders why he never realized this before… Have you?

Upon finding more information about the best way to become his own banker, Jack learns that there are also particular vehicles that will allow him to create a pool of money in which he will have additional growth, tax benefits, and the ability to pass on wealth in a most efficient manner.

Jack and Jill now have the relief of knowing they are in complete control of their money, because they are their own bankers. They are at peace knowing that the market environment will not affect their financial future.

Understanding true principles of money is very important when making preparations for your financial future. Wealth is not a product, but is a process. Please be sure contact us for more information about these concepts.

Infinite Banking is a process that allows you to recapture the purchase price of any purchase you make and pay yourself the interest that normally would be paid to another financial institution. Many Americans are searching for safe ways to create wealth. At the same time these individuals search for products and investments with higher rates of return, they need money for things like cars, homes, medical/dental, vacations and so forth. The process of becoming your own banker is a way to utilize your capital as a bank would, but this time you are not only the banker, but the borrower.

By controlling your capital, loaning it out, paying it back diligently and honestly wealth is created almost by accident.

You need to understand that even using your own money and paying cash for an item has a cost to it. You either give up the interest that you could have earned by paying cash, often referred to as opportunity cost, or you pay someone else interest to use their money, there is no other way.

By becoming your own banker you pay yourself the interest, recapture the purchase price of the item, and keep complete control over your assets. Incidentally, use these banking concepts in a business structure and you gain additional tax benefits that make the concept even better.

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Becoming Your Own Bank, or the Infinite Banking Concept, is the most powerful and innovative concept used today. To state briefly, the Infinite Banking Concept is the process of becoming wealthy not by investing your savings in high risk or low return investments, but by putting your capital to work for YOU and recapturing so many of the hundreds of dollars that go out of your circle of wealth every day. The idea of recapturing the lost dollars is a much safer and more powerful way of creating wealth than any other investment vehicle known today. This creates a low risk and high return method of accumulating wealth by taking principles that have been around for years and years and implementing them into our own personal lives.

Banks have been around for years, and function and grow thanks to the flow of money. They sell no product, no service, they just know how money flows, and can make it work for them. By implementing these principles and using the right vehicles to get there, you can create a promising financial future and legacy of wealth to pass on to future generations.

Benefits:

Tax Deferred Growth
Tax Free Income
Income Tax Free Death Benefit
Collateral
Competitive Returns
Unlimited Options (Loans)
Unlimited Contributions
Creditor Proof
No Probate
Liquidity, Use, and Control
Passive income for Golden Years

I know of no other strategy that has all of these benefits. Everything has restrictions somewhere, but this concept shows you the right vehicles to use to have these benefits, all of them.

Please visit Becoming Your Own Bank! The Infinite Banking Concept!