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

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.

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!