Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
The Grocery Store (continued)
Now we are going to face the complications at your grocery store. Let’s assume that you are a male, married, with children – where is your spouse going to shop – your store or somewhere else? Your store, of course! She comes in and fills her cart with groceries. Here comes the complicated part, so pay close attention. This point is critical and requires complete honesty. Out of which door does she want to take the groceries – front or back?
When asked this hypothetical question, an amazing number of people will admit that “she will probably want to go out the back door, avoiding the cashier at the front door.” This is a polite description of theft! More retail businesses have been destroyed or severely limited by this factor than any other. It is a feeling among owners and those related to them that “this is our business and I can do anything I want to!” Unless this feeling is overcome the business is doomed. Remembering from lesson 5 the small markup on the can of peas – this means that if your spouse steals one can of peas, you must sell 20 to make up for it.
If you haven’t kept up, go back and start with Part 1!
Furthermore, can she go out the back door with groceries, over a period of time, without the employees witnessing her act? And what will they do? Right! They will do the same! I’m trying to paint the picture of how devastating theft is to a retail business. I’m told that 85% of theft in a retail business is by employees.
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There is another factor that makes owners want to go out the back door with goods. All businesses have a “silent partner” – the IRS. If your spouse goes past the cashier at the front door and pays retail for the peas, it means that your store will make more money than if she went out the back door. And the IRS posture is – “the more you make, the more we take.”
Imagine a situation where there is no income tax on the sale of groceries. Now we have eliminated one of the reasons to go out the back door. The only problem that remains is the urge to use the back-door privilege. This must be overcome – your business is at stake.
In addition, you and your family (plus maybe some others) are “captive customers.” You are not going somewhere else to buy groceries. If you charge these captive customers wholesale prices you will make no profit and you have defeated the entire reason for being in business. If you charge them retail prices you are assured of profit. But these are “captive customers” – why not charge these folks 62 cents for the can of peas? Instead of making 3 cents you are now making 5 cents. Your have increased your profit margin significantly! The extra 2 cents will go directly to additional capital and it will enable you to buy more peas to sell to other customers – and there is an unlimited demand for peas! Hopefully, you can see what continued use of this practice can do to the profitability of your business. Do this over a long period of time and your record books will show a superior profit picture.
When you sell your business many years later, you are in competition with others that have not obeyed these principles. He and his family members took goods out the back door. His record books will never look as good as yours. In fact, he will probably have gone out of business some years ago.
Even if he is still around, can you guess which business will bring the better price? Yours!
With the proceeds from the sale you can buy a huge annuity and have income deposited monthly directly to your bank account at retirement time.
I hope that you have learned this little lesson well because we will re-visit the grocery store many times in this course of study. If you understand the grocery store, the rest of learning how to be your own banker is a “piece of cake.”
Grocery stores are in the business of moving groceries to customers. When you sell something, you must replace the item to sell again. If you own the store don’t steal the peas.
Banks are in the business of “renting money” to customers. When they lend money, they must get it back, with interest. If you own the bank don’t steal the money!
Pretty simple, isn’t it?
Content: Page 16, Becoming Your Own Banker Fifth Edition {Get your copy here}
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
The Grocery Store
Continuing our exercise in imagination, I would like to put you into a business in which you are both a seller and a consumer of products. I pick the grocery business since everyone uses groceries — there are no exceptions. Someone must perform the function of the grocer. You have an unlimited market. Everyone is a potential customer — as well as you and your family and maybe some other “captive customers” – these are folks who are not going somewhere else to buy groceries.
Before getting into the business you need to study it for at least two years. You had better understand it inside and out before you start or your competition will “eat your lunch!” It is a very competitive business. This is going to take some time and expense.
If you haven’t kept up, go back and start with Part 1!
Next, you must find a superior location for your business. Real estate agents say there are three qualities of real estate — location, location, and location. This is not an overnight activity. You are going to spend some time getting the right property and for this you are going to have to pay a premium price.
Now you are going to have to put an attractive building on that very high-priced property. This, too, is going to cost you a lot of money.
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Then, you must stock the store with quality merchandise and it must be attractively arranged and maintained. This means you are going to have to have “hired help” (that’s “Southern” for employees)– you are never going to be able to run this business alone. Mom and Pop grocery stores are gone forever. Face it! Your employees must be attentive to customer needs, courteous and neat. You have spent a lot of money and time just to get to this point — and you haven’t made a dime yet!
At long last, you open the front door for customers — they come in and load their carts with groceries and take them by the cashier who collects their money at the front of the store. This is going to leave empty spaces in the display of goods. Your “hired help” is busy cruising the aisles, noticing where goods have been sold and very quickly going to the storeroom at the back of the store to get more things to fill up those spaces. It is imperative that the store appear to be fully stocked at all times. The customers demand it. Have you ever been to a grocery that was only partially stocked? Do you go back there to shop or do you go to some other store where managers pay closer attention to their business?
All of this means that you are going to have to re-stock the storeroom at other intervals to insure that you have immediate access to an adequate supply of groceries. Once you have all this set up and in operation, the difference between the “front door” and the “back door” is a very good living — if you can turn the inventory enough times during the year. If you sell a can of peas for 60 cents at the front door, you have to replace it at the back door at a cost of 57 cents. (I have found this to be a shocking revelation to most everyone). Grocery stores operate on a very small margin on such items. There is a different markup on meats, produce, and certain other items, but for things like canned goods that’s the way it is.
The can of peas sitting on your shelves is inventory and you must turn the inventory 15 times just to break even. There is all that interest you must pay on the huge sums of money you have borrowed to buy the land, the building, the inventory, the signs, advertising, payroll and fringe benefits, utilities, legal fees, accounting, etc. just to name a few. Turn the inventory 17 times per year and you have a nice profit. If you can turn the inventory 20 times per year you can retire early. Something dramatic happens once you get “over the hump.”
This reminds me of a phenomenon in physics – get a bucket of water at seaside (I want you at sea level) and heat it up to 210 degrees Fahrenheit and all you have is very hot water. Heat is up just 2 more degrees and you have live steam with unbelievable power! The steam engine changed the world. But it doesn’t happen until you get to 212 degrees F at sea level. Lots of heat goes into the process up to the boiling point but the dramatic power comes suddenly.
The objective of the business is to provide you with an income and to show a continuous profit picture over a long period of time, say 30 to 40 years. Then you sell the business and use the proceeds to buy a large annuity that will pay you retirement income for the remainder of your life.
So far, we have a very simple business. In the next lesson we will introduce the complications that can destroy your business. See you then!
Content: Page 15, Becoming Your Own Banker Fifth Edition {Get your copy here}
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
In the world of personal finance, the Infinite Banking Concept (IBC) emerges as a revolutionary strategy, empowering individuals to break free from traditional banking and investment institutions’ clutches. This concept, pioneered by R. Nelson Nash, is not just a financial strategy but a paradigm shift towards achieving financial independence and security.
The essence of Infinite Banking lies in utilizing the cash value of properly structured whole life insurance policies as a personal banking system. This allows individuals to borrow against their policy to invest in real estate, pay back the loan at their own pace, and simultaneously earn cash value accumulation along the way. This unique blend of liquidity, safety, and growth offers real estate investors a level of flexibility and control that traditional banks and investment institutions cannot match.
For real estate investors, the importance of controlling the banking function in their lives cannot be overstated. Traditional financial institutions often prioritize their interests, imposing terms and conditions that may not align with the investors’ goals. These entities dictate loan terms, interest rates, and repayment schedules, leaving investors in a position where their financial strategies are influenced by external factors. Infinite Banking, however, places investors in the driver’s seat, enabling them to finance their projects on their terms without external interference.
This autonomy is particularly crucial in the fast-paced world of real estate investing, where timing and the ability to act swiftly can make the difference between securing a lucrative deal and missing out on an opportunity. The conventional route of securing financing through banks & other lenders often involves lengthy approval processes, during which prime investment opportunities can slip away. By contrast, Infinite Banking offers immediate access to funds, allowing investors to capitalize on opportunities with agility.
In addition to providing a source of financing, Infinite Banking instills a sense of responsibility and control over one’s financial future. Real estate investors, in particular, benefit from this empowerment, as it enables them to make more informed and strategic decisions.
Moreover, the Infinite Banking Concept even extends its utility to personal and family financial planning. From debt recapturing, to college savings, to car loans, mortgages, family savings, and even retirement income, the Infinite Banking Concept can truly act as your privatized family bank throughout ones life. The concept of generational wealth takes on a new dimension as well. By establishing a system where wealth is not merely accumulated but also efficiently transferred across generations, families can ensure financial stability and growth for their descendants for generations to come.
In conclusion, the Infinite Banking Concept is not just a financial strategy, but a pathway to financial sovereignty. It challenges the traditional dependency on banks and financial institutions, offering a blueprint for managing and growing wealth independently. By embracing Infinite Banking, real estate investors can unlock a new level of financial freedom, positioning themselves to take advantage of opportunities with greater ease. In the process, they not only achieve their financial goals but also pave the way for a future where their financial destiny is firmly in their own hands.
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
IMAGINATION
Albert Einstein said, “Imagination is more important than knowledge.” Coming from such a knowledgeable mind as his, this observation should have a lot of meaning to us.
The Infinite Banking Concept is an exercise in imagination, reason, logic and prophecy. We will re-visit this thought many times during this course. To help stimulate your imagination let’s go back in time to 1785 – the German schoolmaster was having trouble with his boys that day – they were rowdy. He wanted to quiet them down and to punish them, so he gave them a problem. “Add up all the numbers – one through one hundred.”
If you haven’t kept up, go back and start with Part 1!
The boys got their slates down and started to work on the problem. The schoolmaster’s plan seemed to be working! But one little boy was not participating – he just sat there staring out the window. Shortly he picked up his slate, wrote down a number and turned it in. Would you believe, he was the only boy with the right answer? All the rest had wrong answers. The schoolmaster took note of this fact and asked the boy how he did it.
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The boy said, “I visualized a line with the figure 1 on the left side and the number 100 on the right. In the middle was the number 50. I cut the line at that point and folded the right end of the scale over to where it was parallel to the other line. Now, I had 1 lined up with 100 and 50 was lined up with 51. Adding 1 and 100 produced the answer 101. I noticed that adding 50 and 51 produced the same answer. Further, when I imagined all the series of numbers between these extremes I always got the same answer, 101. Then, I saw that I had 50 sets of 101’s. Multiplying 50 times 101 produced the answer 5,050.
Thereafter the boy received special tutoring and he became one of the three greatest mathematicians of all time – his name was Karl Gauss. Look his name up on the internet.
Young Gauss did not invent that fact. He discovered what God had done already. He discovered a relationship between numbers that is fixed and nothing can be done to change it.
Now that we understand this fact we can take a shortcut in getting the answer. Whenever we are adding anything beginning with 1 and ending with a multiple such as ten, one hundred, one thousand, etc. you simply pick the mid-point and put that same figure beside it. In the case we just cited the midpoint was 50, so putting 50 beside it we get the answer 5,050.
So, to add up the numbers 1 through 1,000 you simply pick the midpoint, 500, and put 500 alongside it — 500,500; ridiculously simple — and absolutely accurate. It is fixed! Try to pass some law to change that fact and you are engaging in an exercise in futility.
Nevertheless, somewhere in the past I have heard that a legislature in some state tried to get the mathematical term, “Pi” changed from 3.1416 to 3.00 because it was too complicated and cumbersome! These demigods could not conceive that they were dealing with a fixed relationship that they could not change and had no authority over. But, therein lays the story of mankind since time began.
Karl Gauss was able to see what others could not see because he used his imagination. In the next lesson we will continue to use our imagination in a very practical way. I’ll see you then!
Content: Page 14, Becoming Your Own Banker Fifth Edition {Get your copy here}
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
We continue to learn how the Infinite Banking Concept got started. So far, you have heard only a part of my story. The beginning of my awakening was in November 1980 when our first grandchild was born. Interest rates had begun to zoom upward. That was Bunker Hunt’s heyday – do you remember him? Bunker and his brother were going to “corner” the silver market – and as a result silver prices went up higher than anything, relatively speaking. Gold went up to $800.00 per ounce – that will give you an index.
Well, what did that cause out in the big wide world? Among other things, “drug junkies” started supporting their habit by stealing silver from homes. While my wife was visiting our new granddaughter for several days, some 60 miles away, the thieves broke into our home at 3:00 p.m. and “cleaned us out.” Have you ever been burglarized? You won’t believe what they can do to a house in just a few minutes. Luckily, I got to clean up the mess. If my wife had seen it I don’t believe she would ever feel comfortable in that house again.
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Two months later my 52-year old brother dropped dead from a heart attack while playing racquetball with a son. Poor selection of ancestors – our father died at age 64 from the same problem.
Five months later our second granddaughter was born out in Hawaii. Five weeks later her parents discovered that the baby had cancer. I didn’t even know that babies could get cancer. She went on chemotherapy when she was 6 weeks old. Six months later she went through surgery to remove the tumor on her right adrenal gland. The cancer was a neuroblastoma, a very rare kind that attacks children. The lesions had involved her liver and she had to go back on chemotherapy for several more treatments. My story has a good part – she is now 20 years old and is cured [June 2019 – 38 years old with two children]! We have seen a miracle!
And now for the bad financial news – it was that summer that Interest rates went to 23% – and there I stood owing $500,000 under those circumstances. When a number of bad things like this occur in fairly rapid succession it will increase the quality and quantity of your prayer life dramatically. The basic idea revealed in the Infinite Banking Concept was born over a period of many, many months at 3:00 to 4:00 a.m. in the kneeling position praying, “Lord please, show me a way out of this financial prison that I have created for myself.” The answer came back about like a baseball bat across the eyes. “You are standing in the midst of everything it takes to get out – but you don’t see it because you look at things like everyone else. You can get to money during these awful times at 5% to 8% interest from three different life insurance companies through policies that you own. The only thing that limits how much you can get to is the same thing they tell you at the bank when you ask them how big of a check you can write – how much have you put in?”
If I had not been accustomed to paying very large premiums, by worldly standards, it is doubtful that I would have seen the message. Hardship often helps us to see things to which we are normally blind. It was evident to me that I needed to increase my life insurance premiums dramatically to create a pool of cash values from which to borrow to pay off the bankers that I owed. But I owed $500,000! How could I do both?
Honest introspection revealed that I could revise my spending pattern. This was a starting place. When I started teaching others to design their financial dealings along these lines my income tripled and that helped out. Thirdly, it occurred to me that the American public will buy anything if you give them a time payment plan. So, I started fragmenting lots of my rural property and financing the sales. With that chain of payments, I bought more life insurance.
Practically everyone thought I was crazy – it was opposite to what all the “experts” said. But an objective look at the facts of how life insurance worked, plus reason and logic – and continued sessions of intense prayer for guidance has proved that the system works.
Maybe you have found yourself in such a financial prison – or maybe you want to develop a system that will keep you out! Maybe yours is smaller or greater. Whatever, the principles are the same and they will serve you well. It requires understanding – and it requires discipline to implement the idea, but it can change your life dramatically – even beyond your fondest dreams!
Content: Page 13, Becoming Your Own Banker Fifth Edition {Get your copy here}
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
Welcome back to lesson 2. It will probably be useful for you to understand just how this concept came into existence. We are all products of our prior understanding of things. First of all, my initial college degree is in the field of forestry, graduating from the University of Georgia in 1952. A large portion of the root thought of this concept is coming from the study of forest finance — the fact that you are dealing with compound interest over a long period of time with no taxation on the build-up. The reverse fact is that you must make an investment in planting trees and you won’t see any financial return for that same long period. In the forestry world one must think many years into the future.
If you have not yet read Part 1, it would do you well to go back and read that first, HERE.
Some of it is coming from the life insurance business. I made a good living in life insurance sales for 35 years. Knowing how dividend-paying life insurance works is an essential ingredient to it all. Most people have a minimal understanding of the subject, including the home office personnel at life insurance companies. That may seem strange to you, but it is very true. In fact, a case can be made that it is probably the most misunderstood subject in the world.
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Lastly, it was strongly influenced by my experience in the real estate business. Recalling that I was educated as a forester, timber is real estate as well as the land on which it grows, so I have been around real estate for all my working life, and I developed a deep interest in the subject and studied many books on it. If you read those books, the central message is not about real estate at all – it is about the magic of leverage! Essentially, they all say, “Buy some real estate, borrow the money to pay for it (because you are always dealing with borrowed money — you either borrow money and pay interest or you use your own money and give up interest that you could have earned elsewhere) – pay interest for a while, then sell the property. All you have given up is the interest you have paid out. That leverage is wonderful.”
That is all true – as long as things are going the way the “financial geniuses” describe it in the books. But they never tell you what happens when the lever goes the other way! Frankly, I made some money in the late 70’s doing it the way the geniuses explained it. By the way, there have been a number of people who have observed that “financial genius” is a rising market. There were several successful ventures in a row, and it looked like there was no end to this bonanza. I could do no wrong! The ventures got bigger and bigger and I got more involved, buying a large number of acres of rural property.
And then I got into real estate development. With the profits from one small parcel, my wife and I went to Europe in 1977 and spent a month! Would you believe it – I have never seen that property yet? I don’t even know where it is! And I did it all according to the “book by the financial geniuses” – leverage – other people’s money. Just have your realtor find such a deal and attend to all the particulars for you – and then sell it for you. Marvelous!
There was no logical reason not to expand – and so I did. The interest rate (they called it “the prime rate” in those days – now called “base rate.” This is the rate charged to the bank’s most secure customers) at that time was 8%, but your must pay 1.5% over “prime” because you are not in that category. They are not lending you money because you have real estate – they are lending you money because they think you can make payments. Why else would they require personal endorsement on the loan? And you must renew the notes every 90 days (or pay off the loan) at the current interest rate.
I got accustomed to paying 9.5% and that was “normal.” And then, along came 1981 and 1982. The prime rate rose and peaked at 21.5%! Add 1.5% on top of that and you see my situation – 23% interest – and I owed them $500,000.00! That amounts to $67,500 of interest per year that I was not expecting to pay.
When this happens to you, what do you do? Go as the “financial geniuses” that recommended that you do this and ask, “What do I do now?” If you can find them, they may mumble something about “selling the real estate.” But where do you find a fool who will buy it under those circumstances? Of course, everything will sell if you get the price low enough – but losing five times what you paid for it is hardly a good way out.
You can see the predicament that I was in, but that is only part of my total situation. We will save that for Lesson 3. I’ll see you there!
Content: Page 12, Becoming Your Own Banker, Fifth Edition. {Get your copy here}
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
Perhaps it was that eminent author, “Anonymous,” that made the observation, “If you take all the money in the world and divide it equally among all the people in the world, within ten years time 97% of the money will be in the control of 3% of the people.” There is no way to measure the validity of this, but do you suspect that there is a lot of truth to it?
Even if you change the proportions to 75% vs. 25%, it still is an appalling situation. Have you ever wondered why this is happening? I think one strong possibility is that the common man knows next to nothing about the most important business in the world – banking! Without banking we are all back in the caves and dealing with each other by means of barter. Our standard of living would be vastly degraded.
When you go to buy something, money must flow from you to that other party in a relatively short period of time or, otherwise, those narrow-minded folks won’t do business with you. They have no sense of humor at all! Similarly, when you sell something, money must flow from that other party to you. The flow of money is absolutely necessary. It is the method of keeping score with one another. Where the money comes from is the subject of this course. It must come from a reservoir – a pool of money – a bank! And it must be adequate to complete the transaction plus all the contingencies of life that we all face. The money in your pocket is all part of the banking system.
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Consider this analogy. Look at a globe and it is rather obvious that about 80% of the earth’s surface is water. The sun heats it up and causes some of it to evaporate into the atmosphere. That causes wind currents that carry the moisture around the earth and it will precipitate out as rain, sleet, snow, and hail. And, somewhere along the way some of it will flow through you and me – eight glasses per day. After all, we need to acknowledge that most of you is water and that proportion must remain fairly constant. Have we all not heard the phrase, “Don’t get dehydrated?” Does it dawn that you are a pool of water? When it flows through us, pray tell, where does it end up? Back in the oceans, of course! It is a system!
There is only one pool of money in the world. The fact that various banks, insurance companies, corporations, and individuals are managing it in various countries and currency denominations is incidental. To argue otherwise would be the equivalent of a person looking at the globe and saying, “Oh, look! There is South America – and look, there is the Amazon River flowing into the South Atlantic Ocean. But, that has nothing to do with the Indian Ocean on the other side of the world!” Nonsense! That is ridiculous! There is only one pool of water on the earth. It is all part of a system – and they are all connected in one way or another through the various forms of water–solid, liquid, or water vapor.
Another analogy – would you agree that everyone needs a heart? Its function is to pump blood to wherever it is needed within your body – so you need one, personally, and it must be functioning to make your blood flow. But, have you ever considered that you can live without one? I did, back in January 1988! The doctors had mine outside the chest cavity and were re-plumbing it in four places. They can’t do that without shutting it down for the duration of the surgery. My heart did not work for about two and a half hours! But, here I am talking to you today! What made all this possible?
There is this wonderful machine called a heart-lung machine that performs the functions of the heart. But, as I look back on this event, there is no way that I could classify those 2 ½ hours as “living.” That was “existing!” I don’t remember any of that time – thank God! The other thing I noticed is that the procedure was very expensive – but worth it! I would gladly have paid three times what it cost without objection.
Now, translate these analogies over into terms of money and banking and pay close attention to what is happening in the world of the common man. You will see that he is doing the equivalent of living on a heart-lung machine 35% of the time! Absurd! He should not be living on it at all!
This course is all about building a banking system so that you control 100% of your needs for money at all times. You can recapture that “financial energy” that is now flowing away from you (you will never see it again) and it will accumulate on an income tax-free basis for your benefit.
We live in an age of instant gratification, sound bites, and a pill for every known or imagined malady. This is the “now generation” – looking for immediate gratification for every action. Put on a garment and wear it for a while until something else comes along that looks more attractive – or worse, that is more “in style.” Becoming Your Own Banker is not of that nature – it is a major paradigm shift. This is a concept that needs thorough examination so that one can make a life-long decision. It can’t be done overnight. It will take a long time and will require patience and complete understanding – but if you absorb its meaning and adopt it as your “new paradigm” it will be worth all the effort!
Exercise: Try to figure out how much interest you pay per month.
Written by R. Nelson Nash / Originally published on infinitebanking.org / Used with permission
Written by L. Carlos Lara / Originally published on infinitebanking.org / Used with permission
Picture yourself having just recently returned from one of the most exciting vacations you have ever had. But you are home now and you begin reliving the trip’s experience. Suddenly you are unable to understand your wife’s words when she speaks to you. Furthermore, and worst of all, you are unable to share your own words and thoughts back to her. Now that would be a frightening experience for anyone. You silently ask yourself– “has something gone wrong”? Am I ok? Am I sick? Actually, yes, there is something wrong. This is what is known as “aphasia,” a language disorder that’s caused by damage to the brain and caused by a serious stroke.
L. Carlos Lara Nelson Nash Institute
David Knopman, MD, a professor of neurology at the Mayo Clinic in Rochester, Minnesota, explains the signs and disorder of aphasia in this way. “The difficulties in processing or expressing verbal and written communication are obvious only to the patients themselves, or the people around them.” It’s not that they cannot hear those talking to them, it’s a perception issue and why some doctors refer to it as “perception aphasia.” In desperation to articulate their thoughts to others the pitch of their voices intensifies and it comes off as anger, but the victim cannot control it. Even though they apologize for their actions to others, nonetheless, the isolation it leaves behind for the stroke victim is intense, and it’s scary to family and all others around him.
Aphasia has various causes and is usually triggered by serious trauma, like a gunshot wound to the head. If this issue is new to you and you have never heard of aphasia it’s actually quite common, affecting 2 million Americans annually.
Sharon Stone, the Basic Instinct star and Oscar-nominee suffered a brain aneurysm in 2001 at age 43 and the subsequent cerebral hemorrhaging destroyed her career. She had lost her ability to read and has developed speech issues, including a stutter. In her own words she shares what she had to do about it. She says, “I became more emotionally intelligent. I chose to work very hard to open up other parts of my mind. Now I am stronger. And I can be abrasively direct. That scares people, but I think that’s not my problem. It’s like, I have brain damage; you’ll just have to deal with it.” That attitude is very harsh and difficult to accept, especially by family members.
Another example of aphasia is what happened to Emilia Clarke of Game of Thrones fame. She experienced a painful headache in 2011 that she says felt like an elastic band was squeezing her brain. She was actually suffering an uncommon type of stroke caused by bleeding on the surface of the brain. During the ordeal she could not remember her name. She explains, “Instead, nonsense words tumbled out of my mouth and I went into a blind panic. I’d never experienced fear like that–a sense of doom closing in.” Emilia was very lucky because fortunately the aphasia left her after a few days and she returned to herself, but she has never forgotten the experience.
This was not the case for Randy Travis, the Grammy-winning music star. He suffered a stroke in 2013 and lost his ability to talk, much less, comprehend language. Even now his struggle with aphasia continues and his ability to speak is limited. As he explains, “In my case, my brain was functioning, and I could understand what Mary (Travis’s wife) said to me, but I could not respond in anything close to a sentence. When we first returned home, I could barely speak at all. We spent three months in speech therapy before I learned to say the letter ‘A.’ Eventually, after about a year and a half, I could say ‘yup,’ ‘nope,’ and ‘bathroom.’ I could also say ‘I love you’ and a few other phrases but not much more. All this was extremely frustrating for me; I felt like I was trapped inside the shell of my body.”
That feeling of being trapped inside your own body certainly hits home with me. I suffered a stroke on June 17, 2019 and the battle with aphasia became my own. I still cannot read, right, or add and subtract, but I have learned phone and computer shortcuts that help me keep going. I have mentioned several celebrities here in this article, but the truth is that strokes and, or aphasia, is no respecter of persons. It can happen to anyone, young or old. One minute you are working out at the gym, fit and strong, like I was once, and the next minute a stroke comes upon you like a ravenous wolf and ruins your life probably for forever.
Three years later after my stroke I realize now how important health and life insurance coverage really is. My hospitalization costs you would not believe, they were enormous. Thank God I had medical coverage. Yet, unlike most developed nations, the US health system does not provide health care to our country’s entire population. Instead, most citizens are governed by a combination of private insurance and various federal and state programs.
According to the World Health Organization (WHO), total health care spending in the U.S. was 18% of its GDP and continuing to climb higher leading it into a “dysfunctional” system. As an example, the Cato Institute claims that because government intervention has expanded insurance availability through programs such as Medicare and Medicaid, the problem is exacerbated. Because the U.S. health system is also the most expensive and worst-performing in terms of health access and efficiency, 27 million adults do not have health insurance. This causes roughly 18,000 unnecessary deaths every year in the United States.
A 2009 study in five states found that medical debt contributed to 46.2% of all personal bankruptcies, and 62.1% of bankruptcy filers claimed high medical expenses in 2007 according to a Wikipedia article. It goes on to say that since then, health costs and the numbers of uninsured and underinsured have increased. A 2013 study found that about 25% of all senior citizens declare bankruptcy due to medical expenses. In practice, the uninsured are often treated, but the cost is covered through taxes and other fees which basically shift the cost.
More importantly, the US healthcare system does not sufficiently promote wellness. Over the past decade rates of obesity, heart disease and type 2 diabetes are areas of major concern. While chronic disease and multiple illnesses became increasingly common among a population of elderly Americans who were living longer, the public health system has also found itself fending off a rise of chronically ill younger people. According to the US Surgeon General “The prevalence of obesity in the U.S. more than doubled (from 15% to 34%) among adults and more than triple (from 5% to 17%) among children and adolescents from 1980 to 2008.”
What so many people do not realize is that the best type of health coverage can be obtained by the oldest and original insurance policy in America, the Dividend Paying Whole-Life Insurance Policy. In fact, it is the best kept secret in America. Whole- Life not only pays a death benefit to the insured’s beneficiaries at death, but it also provides the insured living benefits while alive. In fact, this is what it does best, therefore, understanding what it is and how it works is essential, but this information is not readily available. R. Nelson Nash, the founder of the IBC concept has written a book that explains the mechanics on how to turn your policy into a financing instrument and is the main reason why the book, BECOMING YOUR OWN BANKER, has sold millions of copies worldwide. More recently, Nelson Nash, David Stearns, Robert Murphy and myself created the Authorized IBC Practitioner Course for financial professionals. It is the only financial course of its kind that helps individuals understand the “the Infinite Banking Concept” and it can be obtained at infinitebanking.org
Basically, the course teaches that the core element of a life insurance policy is the death benefit, but the financing function of the policy is made possible because the owner can take out policy loans with the surrender value of the policy serving as collateral. This is a legal right that is provided to all policy owners and is spelled out in the language of the insurance contract. Assuming you understand IBC and own such a policy, the following message is for you.
There are several things to consider at the outset before deciding whether to use cash or a policy loan, the first of which is the nature of the expenditure itself. We should begin by asking ourselves if the expenditure we have in mind is a lifestyle “necessity,” a reduction of debt, or an investment. If it is any of these types of expenditures my personal preference is to use a policy loan after I have first put the cash in the PUA Rider of my policy, simply because these types of expenditures, given the mechanics of IBC policies, serve to conserve and grow the wealth I already own.
This wealth that I already own actually exists inside and outside my IBC policy. So, in effect the triggering of this wealth increase generated by the injection of the cash into my policy’s PUA Rider will partially offset the interest charges on the loan. But in certain situations (mostly in the future), the expenditures I have selected to pay for using my policy loan will have the potential to completely offset the entire loan balance when they are sold for a profit.
Let me explain. Lifestyle necessities, as I see them, can be thought of as repairs, maintenance, and replacement costs of facilities and infrastructures that serve to increase my future production, and/or future revenue. Debt reductions serve to increase net worth. Investments appreciate and then can be sold for a profit. Hence all three of those types of expenditures contribute to building my estate in the long run and are appropriate expenditures for using a policy loan.
For example: A car that is used up and needs replacing is, in my opinion, a lifestyle necessity. So is the replacement of a mayor home appliance that has reached the end of its it’s usable life, such as a heat and air unit in your home or office. Or, it could be the roof over your head, or any expense that can easily be classified as an on-going life style essential that needs fixing or replacing to keep it operational and help maintain the market value of it’s underlining asset that can be sold at a profit or at least converted to cash.
On the other hand, living expenses such as food, gasoline, utilities, clothing, and similar consumption costs are completely different types of expenditures. They should be paid for with cash, not policy loans. Now there is certainly nothing in writing that says you can’t use policy loans to pay for these types of bills, or any type expenditure of your choice. But if you are truly attempting to manage your money well and grow an estate you should draw the line between lifestyle necessities that affect the growth and value of your estate and those that don’t. Otherwise you would wind up using your IBC policy as though it were an ATM machine practically every month, which is a gross misinterpretation of IBC.
Windfalls Windfalls also play a major role when considering taking out policy loans versus paying with one’s base working capital (the cash in our checking accounts). We should never forget that we are “banking” with these policies, which involves the full scope of cash management and finance. Although a windfall is often thought of as a piece of unexpected good fortune, typically one that involves a large amount of money, sound money management can create windfalls. As IBC “bankers” we should manage our money with expected windfalls in mind. In fact, all of our efforts should strive to create windfalls and policy loans can be used for that specific purpose.
For example: Let’s take the case of an expected, or even an unexpected, family inheritance. This event can certainly be described as a windfall, actually more like a gift from heaven–an expression of love in the form of money from a deceased family member. A bonanza such as this can take care of a lot of previous money mistakes for some lucky person or family.
Yet an IBC Practitioner, by the mere fact that he has taken out an insurance policy and has assigned a beneficiary to it, has already taken a very first important step toward establishing an estate. If he or she now begins to take out policy loans in the manner prescribed above, over time this privatized banking system will create living benefits for the policy owner while alive, and an inheritance (windfall) for the beneficiary upon death.
Keep in mind that what we are doing is practicing IBC while “thinking long range” as Nelson Nash advocates. Also, with everything that I have stated up to this point in our exploration, I have been addressing it to salaried individuals and managers of households. What I am trying to make clear is that when practicing IBC, you must learn how to start thinking like a business owner because, whether you realize this or not, an IBC policy has placed you squarely in the management role of a business–a banking business.
Business owners reading this analysis are more naturally inclined to understand the points I have made thus far in this report in addition to understanding the value of creating windfalls, because this is their modus operandi. Business owners use business profits (after taxes) to deliberately invest in hard assets that they hope to sell in the future at a profit. Since they generally think of their business enterprise as their chief asset, they tend to reinvest these profits into their business in order to increase their wealth and eventually sell the business in the future—as the final windfall.
In the meantime, and at great risk to themselves, business owners will not hesitate to take out loans and borrow from lines of credit from commercial banks in order to create those windfalls. But once they become their own bankers using IBC, policy loans take preeminence over commercial bank loans. Space constraints prevent me from unpacking each of the steps business owners use to wean themselves away from commercial banks using IBC, but for a complete treatment of how they make the switch, please read my newest book co-authored with Bob Murphy, Nelson Nash, and David Sterns, The Case for IBC. https://infinitebanking.org
The Power of Whole Life Let’s also not forget that dividend-paying Whole Life not only has multiple-dimensional benefits unlike any other financial instrument, but it also has three very important characteristics that are foundational to this particular discussion. Briefly summarized, the first of these is the legal right every policy owner has in his policy contract to take out policy loans so long as he or she has cash value in the policy.
Second. Although an outstanding policy loan rolls over at interest, you can pay the loan back on your own terms and schedule, or not at all, if you wish. This is extraordinary! That kind of payment flexibility on any kind of loans exists nowhere else in the financial world, but obviously with that kind of freedom also comes responsibility. With regards to this I have a suggestion. My August 2017 LMR article, “An IBC Tax Strategy: Part III,” contains a thorough treatment of the most important discretionary guidelines on policy loans that every policy owner should know. The 2017 article is a great companion to this article because it breaks down the functions of practicing IBC correctly and responsibly and will eliminate the worry of a 1099 surprise or the worry of the IBC policy ever being underwater.
The third foundational characteristic of Whole Life is that no matter what amount of money you borrow from the life insurance company with the cash value serving as collateral, that very same amount of money continues to earn interest, dividends, and a growing death benefit in your policy for as long as you live and for as long as your policy remains in force. But when additional cash is injected into the policy’s PUA Rider it grows even more and it grows even faster. For that reason, all three of these elements of a specially designed Whole Life policy when used in combination make it the ideal financing system that every household and business owner should own.
Conclusion In this article we have examined IBC from an angle many advocates have not often considered. It is only when you have personally suffered a debilitating illness and what one has to go through, let alone your family, that the reality of the brevity of life sinks in. Nevertheless, because of Nelson Nash’s IBC, we get a chance at life once again. This is why we say that Privatized Banking is for everyone. It really is.
Written by L. Carlos Lara / Originally published on infinitebanking.org / Used with permission
In this constantly evolving financial landscape, the buzz around cryptocurrencies and blockchain technology seems to be growing louder by the day. This brief article aims to shed light on these topics and their potential implications on our financial systems.
Cryptocurrencies, led by the flag-bearer Bitcoin, have been in the spotlight for their potential to redefine money transactions. These digital assets promise decentralization, security, and ease of global transactions, thus attracting a huge interest from investors and technologists alike. However, they also bring along risks and volatility that need to be thoroughly understood.
On the other hand, blockchain, the underlying technology of cryptocurrencies, is being lauded for its potential far beyond digital currencies. From supply chain management to secure voting systems, blockchain could bring about transparency and efficiency in numerous industries.
As we navigate these new waters, it’s crucial to stay informed and understand the complexities involved. Despite the promise they hold, cryptocurrencies and blockchain also present potential pitfalls. It’s important to conduct proper research or consult with a financial advisor before making any major decisions in this domain.
In light of the dynamic and sometimes unpredictable world of cryptocurrencies and blockchain, it’s crucial to also consider alternative financial strategies that offer steady growth and security for your funds.
One such strategy is the Infinite Banking Concept (IBC).
The Infinite Banking Concept is based on the use of a properly structured, dividend-paying whole life insurance policy. The goal is to create a system where you essentially become your own bank. Over time, as you pay premiums and earn dividends, you can grow a substantial cash value within your policy. This cash value can be borrowed against for any purpose, all while your policy continues to earn dividends. One of the main benefits of Infinite Banking is its predictability. Unlike cryptocurrencies, which can be extremely volatile, the growth of a whole life insurance policy is guaranteed and steady. You won’t need to worry about sudden market changes devaluing your investment. Instead, you can feel secure in the knowledge that your funds are growing at a consistent rate.
Additionally, the Infinite Banking Concept provides a unique blend of liquidity, use, and control of your money. By becoming your own bank, you can have access to your money without the penalties, fees, and restrictions that can come with other financial products.
In the ever-changing financial world, staying informed about a broad range of options is the best way to ensure the growth and security of your investments. Whether you’re considering dipping your toes into cryptocurrencies, or pondering the Infinite Banking Concept, careful consideration and sound financial advice are essential.
Remember, financial security is a journey, not a destination. Patience is key. Think long-range.
Want to learn more about Infinite Banking? Reach out!
The recent banking crisis has demonstrated the vulnerability of traditional banking systems. Multiple banks have collapsed, leaving their customers stranded and financially devastated. In such a volatile environment, is it wise for real estate investors to trust their hard-earned money to these unstable institutions? There is an alternative: the Infinite Banking Concept (IBC).
The IBC is a financial strategy that enables an individual to become their own banker. Instead of relying on traditional banks that can collapse or fail, IBC encourages individuals to utilize whole life insurance policies with cash values. These cash values can be borrowed against, ensuring your money remains within your control, providing a safety net against banking crises.
As you have seen, the United States is also currently experiencing unprecedented inflation levels, which can erode your real estate investment returns. When inflation rises, your purchasing power decreases, and the value of your money diminishes.
IBC can serve as an effective hedge against inflation. Cash values in whole life insurance policies grow on a tax-advantaged basis, providing a guaranteed, contractually-ensured rate of return that is often higher than inflation rates. Unlike traditional banking, the value of your ‘bank’ in IBC is not directly tied to the economy’s performance, thus offering protection against inflation’s corrosive effects.
The beauty of IBC is that it is not a financial strategy reserved only for the wealthy. Regardless of your current financial status, you can use the IBC to fund your real estate investments, and so many more things in life. Whether you’re purchasing a property, renovating a rental unit, or expanding your portfolio, IBC provides a readily available source of funds.
Moreover, the death benefit associated with the insurance policy provides a financial safety net for your loved ones, adding an extra layer of security to your investments. And as your policy’s cash value grows over time, so does your ability to invest and generate wealth.
In today’s uncertain economic environment, the Infinite Banking Concept can provide real estate investors with a stable and secure financial strategy. It offers protection against banking crises and hedges against inflation, all while providing a powerful tool for real estate investment. Regardless of your financial status, the Infinite Banking Concept is an accessible and practical tool to harness.
The banking crisis and inflation serve as reminders of the inherent risks in traditional financial systems. By contrast, the IBC allows you to take control of your finances, mitigating risk and promoting growth. For real estate investors, it’s a pathway to greater financial freedom and security.
The Infinite Banking Concept (IBC) is a financial strategy that involves using Whole Life Insurance policies as a means to build wealth, create a tax-advantaged savings vehicle, and provide a source of financing for various personal and business needs. In the purest sense, and how Nelson Nash intended it, the Infinite Banking Concept is best done through Whole Life and not Index Universal Life (IUL) policies. The reasoning in short, is because the whole idea of “being the bank” is getting away from the market risks, and have a safe, secure and guaranteed growth throughout the life of the policy, thus replacing the banking function in your life over time. In the information below, I have tried to take an objective approach to explain the differences between the two, though I do believe that Whole Life is the best way to go for most.
Here are the key differences between these two types of policies as they pertain to the IBC:
Policy structure:
Whole Life: A Whole Life policy offers a fixed premium, guaranteed death benefit, and a cash value component that grows at a guaranteed minimum interest rate. It is designed to last for the insured’s entire life, as long as the premiums are paid.
IUL: An Indexed Universal Life policy, on the other hand, has more flexibility in premium payments, adjustable death benefits, and a cash value component that is linked to the performance of a stock market index, such as the S&P 500. The policy allows for potential higher returns based on market performance while also providing downside protection with a guaranteed minimum interest rate.
Cash value growth:
Whole Life: The cash value of a Whole Life policy grows at a guaranteed minimum interest rate set by the insurance company. Additionally, policyholders may receive dividends from the insurance company, which can be used to increase the cash value or reduce premiums, although dividends are not guaranteed.
IUL: The cash value growth in an IUL policy is determined by the performance of the chosen stock market index. It offers the potential for higher returns compared to Whole Life policies, but also has a higher degree of variability. Most IUL policies have a cap on the maximum returns and a floor that prevents losses in case of negative market performance.
Premium flexibility:
Whole Life: Whole Life policies have fixed premium payments throughout the life of the policy, which ensures that the policy remains in force.
IUL: IUL policies offer more flexibility in premium payments, allowing policyholders to adjust the premiums within certain limits based on their financial situation. This can be beneficial in times of financial hardship or when policyholders want to increase their cash value growth.
Loan provisions: Both Whole Life and IUL policies allow policyholders to take loans against the cash value, which can be useful for the IBC strategy. However, the loan interest rates and provisions may vary between the two types of policies.
Complexity and management:
Whole Life policies are generally considered less complex and easier to manage than IUL policies, as the guarantees and fixed premiums provide more predictability.
IUL policies require more active management and understanding of market conditions, as the cash value growth is tied to the performance of the underlying index.
In conclusion, the choice between a Whole Life and an Indexed Universal Life policy depends on the individual’s financial goals, risk tolerance, and preference for flexibility and complexity. Whole Life policies offer more guarantees and stability, while IUL policies provide the potential for higher returns and more flexibility in premiums and death benefits. However, again, Infinite Banking at its purest form, is to utilize properly structured Whole Life Insurance.
There can be disadvantages to both Whole Life and Indexed Universal Life (IUL) insurance policies, depending on the individual’s financial goals and risk tolerance. Here are some of the disadvantages of each type of policy:
Potential Disadvantages of Whole Life Insurance:
Higher premiums: Whole Life insurance policies generally have higher premiums compared to IUL policies. The higher premiums are due to the guaranteed cash value growth, the fixed death benefit, and the lifelong coverage.
Limited cash value growth potential: The cash value growth in Whole Life policies is based on a guaranteed minimum interest rate, which might be lower than the potential returns of an IUL policy linked to a stock market index. As a result, the cash value growth in a Whole Life policy may not keep pace with inflation or provide the same potential for wealth accumulation as an IUL policy.
Inflexible premiums at times: Whole Life policies can have fixed premiums, which may not be ideal for individuals who prefer flexibility in their payment schedules or who might experience fluctuations in their income. However, todays policies are becoming more and more flexible.
Limited investment options when contrasting to IUL: With Whole Life policies, the cash value growth is determined by the insurance company, and policyholders have little to no control over the investments. This may be a disadvantage for individuals who want more control over their investment strategy.
Disadvantages of Indexed Universal Life Insurance:
Complexity: IUL policies are more complex than Whole Life policies, as they involve more variables, such as flexible premiums, adjustable death benefits, and cash value growth tied to a stock market index. This may require more active management and a deeper understanding of market conditions.
Market risk: IUL policies have cash value growth that is linked to a stock market index, which means that the policy’s performance is subject to market fluctuations. While there is usually a guaranteed minimum interest rate to protect against losses, the cash value may not grow as much as expected during periods of poor market performance.
Caps on returns: Most IUL policies have a cap on the maximum returns that the policy can earn, which may limit the potential for cash value growth during periods of strong market performance.
Less predictable cash value growth: The cash value growth in an IUL policy is subject to market performance, making it less predictable than the guaranteed growth of a Whole Life policy. This may make it more challenging for policyholders to plan for their financial future.
Cost of insurance: The cost of insurance in an IUL policy will usually increase over time, which may require higher premiums to maintain the same death benefit. This can be a disadvantage for individuals who are looking for lifelong coverage with fixed premiums, and when structured this way, will effectively eat the policy alive in costs, later in life.
Ultimately, the decision between a Whole Life and an Indexed Universal Life policy depends on the individual’s financial goals, risk tolerance, and preference for flexibility and complexity. It’s essential to carefully weigh the advantages and disadvantages of each type of policy before making a decision.
Reach out today and we can discuss what’s right for you!
Inflation is the rate at which the general level of prices for goods and services is rising and subsequently, purchasing power is falling. It can be caused by a variety of factors such as supply chain disruptions, labor shortages, and increased demand for goods and services. These factors have led to an increase in the Consumer Price Index (CPI) by 6.2% over the past 12 months as of October 2021. The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Inflation can have a widely significant impact on the economy, as many of us are seeing unfold before our very eyes these days. When prices of goods and services increase, consumers lose purchasing power which can lead to reduced spending and lower economic growth. According to the Bureau of Labor Statistics, in the past 6 months, the following has been largely affected:
Cereals and bakery products have gone up 8.4%
Meats, poultry, fish, and eggs have gone up 13.6%
Dairy have gone up 4.3%
Fruits and vegetables have gone up 10.7%
But what about in the Real Estate world?
Lumber prices have gone up 114% since May 2021
Iron & Steel prices have increased 45% & 78% since June 2020
These increases and others have led to higher construction costs, which have attributed to some of the higher new home prices (and your rehab costs – have you noticed?!). Companies also lose purchasing power and risk seeing their margins decline when prices of raw materials and other inputs increase.
Inflation can also lead to higher interest rates which can make borrowing more expensive for businesses and individuals.
A Counter Strategy to Inflation.
One financial strategy that is used as a hedge against inflation is the Infinite Banking Concept. This strategy provides a way to borrow money at a fixed interest rate while the value of the dollar is decreasing, or interest rates are increasing.
The Infinite Banking Concept is a concept that involves using a properly structured, dividend paying whole life insurance policy from a Mutual Insurance Carrier as a means of building wealth, while at the same time having guarantees, safety and liquidity options. It is a strategy that allows you to borrow against the cash value of your life insurance policy and use it on anything you please – ideally to save you money or make you more money. All the while you’ve borrowed against the your cash value, the principle balance is growing uninterrupted at a guaranteed growth rate initially set by the Carrier. Above and beyond that even, properly structured whole life from a mutual carrier entitles you to dividends, further compounding your growth.
Immediately after issuing a policy with this strategy in mind, you can borrow against the cash value. Imagine replacing the banking function in your life over time, slowly replacing higher interest rate debts, with a lower interest rate environment from your own policies. Imagine having the flexibility to decide the terms of that policy loan. Imagine having the Infinite Banking Concept playing a major role in your financial life to where your family now has a family bank to utilize throughout their life as well. The possibilities of this financial strategy are quite infinite.
Reach out to me today and I’ll teach you in greater detail what it is, how it works, and how you can create financial velocity that can literally last for generations.
If you are a Private or Hard Money Lender this webinar is for you!
Your money works hard being loaned out, and you expect a safe return on your investments, but what is your money doing while it’s not out? Is it growing? Is it safe? What if your money could grow even while it is out?
Join Jason K Powers on this exciting webinar and learn how your money can grow uninterrupted even while you’re utilizing it elsewhere.
Your warehouse of wealth should NOT be in risky investments and NOT be in failing banks!
Your money is growing in two places at once utilizing this little known strategy called the Infinite Banking Concept.
Join Jason on this free webinar, Wednesday, April 5th, 4pm CT.
THIS EVENT HAS PASSED.
Jason K Powers is a Multi-Business Owner & Real Estate Investor himself. He started a real estate investing business after the crash of 2008, helping homeowners out of distressed situations. Starting out with Wholesaling and moving to Fix-N-Flips and then Buy/Holds, eventually leading to owning and re-developing a 170+ acre RV camping and recreation area with camping, fishing and swimming.
Using his unique experiences in real estate investing, Jason has mastered the art of integrating the Infinite Banking Concept with Real Estate Investing. He has taught hundreds of real estate investors how to begin funding their own deals, becoming their own bank over time, and creating a financial legacy that can last for generations.
In the book, “How Privatized Banking Really Works” (Lara & Murphy), “It is possible to salvage your household’s financial situation, despite the shackles put in place by powerful forces. But you don’t stand a chance if you allow these same forces to design your blueprint for escape…”
We are in strange times, financially speaking. Any given day, we can turn on the television and hear someone talking about the inflation rate, consumer debt, a boom or bust cycle, investment decline and more. At the time of this writing, US National debt is up over $30 Trillion. Student Loan debt is up past $1.7 Trillion. Credit Card debt has surpassed $1.1 Trillion. Only ten years ago, US National debt was at $15 Trillion. Credit Card debt was hovering at $852 Billion. Let those numbers sink in.
Let’s take a minute and visualize just One Trillion Dollars. If you spent $1 per second you will have spent $86,400 in one day or $31.5 Million in a year. It would take you nearly 32,000 years to spend 1 Trillion dollars. Again, our Country is $30 Trillion in debt. You can draw your own conclusions on the impact of this kind of spending.
Personal finances for thousands are in shambles or at best traumatized. Savings accounts are being depleted, retirement accounts taking a beating, interest rates rising, and the list goes on.
How do we protect our hard earned money? Where do we store money besides our bank accounts & qualified employer or government controlled environments?
In our financial world, most of us prefer to have our money in something that is safe, liquid, has a high rate of return, is tax advantaged, can provide a (future) source of income, isn’t correlated with the stock market if it can be helped, acts as a hedge against inflation, and is creditor protected. It’s ok to dream, right?
Change the way you think about your finances, and it will change your future.
One little known strategy used by the wealthy is putting money through a properly structured whole life insurance policy and utilizing the cash value access to create financial velocity. We call this the Infinite Banking Concept. It is an avenue where you can warehouse your wealth allowing it to compound year over year (internally) even while you’re using it (externally) to make even more money. It is a place to warehouse your wealth while at the same time borrow against it to use for real estate investing, private money lending, financing your own car, a down payment on a house, buy a house outright, and even retire on.
One has to wonder why the wealthy use this strategy. One has to wonder if simply changing the way we think about money can change our financial trajectory, while still allowing us to do the things we love.
Article written by Jason K Powers. Jason K Powers is a Mutli-Business Owner, Real Estate Investor & Wealth Strategist helping people change the way they think about their money, to create financial velocity that can last for generations.
There is a thought process out there that, quite possibly, has limited the achievements of mankind more than any other, and it is dubbed, “The Arrival Syndrome.”
When I first heard about this, I think logically I knew that as just a human being, I had a predisposition to this syndrome. We all do. However, what we do about it is a different story.
I used to have my phone navigation map talk me through directions as I was driving. It would tell me as each turn approached, where to turn, how far ahead it was, how far to drive on the next road, and then concluding once I’d reach my destination, it would stately say, “You have arrived.” I would chuckle because it would always make me think of someone having ‘arrived at the top of their career’, or ‘arrived to the height of their knowledge’ or ‘arrived to the pinnacle of whatever belief system they had,’ and this map just knew I had arrived… wherever that was. Or maybe it was more like, “Vous venez tard, mais vous venez,” (You have arrived late, but you have arrived).
In all seriousness, however, so many of us think we have arrived in our scope of knowledge about a particular topic. Maybe it’s wholesaling. Maybe it’s fix-n-flips. Maybe it’s about the best way to save for retirement. Maybe it’s where to stockpile our money… and the list goes on.
“…We live on the brink of mysteries and harmonies into which we never enter, and with our hands on the door-latch we die outside.”
~Ralph Waldo Emerson~
Nelson Nash once said, “When this ‘thing’ infects us, we stop growing, stop learning. We ROT! We turn off or tune out the ability to receive inspiration – because we ‘already know all there is to know!’” Remember, this is human nature! He goes on to say, “The Arrival Syndrome produces a ‘comfort zone’ that causes people to lapse into their old way of doing things – a lifetime of accumulated information that determines how one conducts oneself. The fact that this conclusion may be based on fallacious information is beside the point!”
When I teach people about the Infinite Banking Concept, for many, we have a major hurdle to get over in their brain first. What have they heard about it already?
“Oh, this deals with Life Insurance – must be a scam!”
“Well, my qualified retirement account out-performs anything you could ever show me.”
“It’s too expensive!”
“I have to save up for years before I can start.”
Well, the answers are for another day, but let it suffice that if it were a scam, then why do banks, the businesses, the Presidents, and so many more, utilize this concept? If it were being “outperformed” by investments, shouldn’t what we’re talking about actually be an investment product? It’s not! It’s only too expensive if you don’t know how to manage your money – but we can work on that with you. When you start is when you’re ready. I’ve never had a client say to me that they wish they’d waited to start this. They always say they wish they’d started it sooner!
And then there are all the things that don’t even get asked – and you don’t know what you don’t know! Some of these advantages can help curb inflation that we’re facing today. It can help supplement retirement. It can grow income tax free. It can pass on an amount of wealth to the next generation, so that they would never have to go to a public bank again.
If you’re willing to fight the urge to submit to The Arrival Syndrome, then the Infinite Banking Concept is worth the look. It can change your life. It can change your real estate trajectory. It can change the generations behind you.
Nelson Nash, the man who coined the term Infinite Banking Concept, talks about 5 human problems, or psychological pitfalls, that we all must overcome in order to have a disciplined financial plan. Overcoming these pitfalls is paramount to not just surviving financially, but thriving.
The first human problem is what has been coined as Parkinson’s Law. This was coined from C. Northcote Parkinson’s book by the same name. This law can be summarized in three points.
The first point is, “Work expands to meet the time envelope allowed.” In the context of real estate, how often have you had one contractor on one job complete something in the 10 days they were allowed, and then when you give them the same job on another project but 30 days to finish, it took the full 30 days? Life is full of these kinds of examples – kids and homework – work deadlines – and basically anything else that has a deadline. What if we could master overcoming this trait in our lives, and get things done more efficiently, and consistently? What if our finances were working this way?
The second point is, “A luxury, once enjoyed, becomes a necessity.” I remember spending eleven years in a home with no air conditioning. When I moved out of that home and into a house with central air, I couldn’t believe I ‘survived’ all those years without it! How many things in life have we convinced ourselves that we can no longer live without? From a financial perspective, what if we had a better handle on our own understanding of these things in our own lives? What would change in your own finances if you could have a little more self-control and discipline?
The final point is, “Expenses rise equal to income.” When a pay raise, or bonus, comes along we usually have it spent (in our minds) before it even hits the bank. Once we have a consistent increase in income, most of us in the world begin to expand our living environment in one way or another. If we were better at living below our means, do you think we could get ahead a little better?
We have to change the way we think about money!
The average American household spends a shocking amount of money on interest payments each year on things financed. The average American is putting their pre-tax money into accounts that they can’t touch for decades and will be taxed at an unknown future rate – yet at the same time believe taxes are going up in their lifetime. The average American follows the heard, financially speaking.
What if there was a way to change up the status quo with your finances? What if you could be the bank and borrow from yourself instead of an outside institution? What if your one pile of money could grow in two places at the same time? What if you could live on income tax free money at retirement? These are all things we teach people how to do here at Unbridled Wealth.
Change the way you think about your finances, and it will change your future.
Over the years, I have met hundreds of real estate investors, and in talking with them, I’ve heard hundreds of reasons as to why they have gotten into the industry. Great Wealth. Passive Income. Greed. To Support a Family. Replacing that 9-5 Job. Boredom. A Smart Investment. Diversification. Legacy. To Rule the World… and the list goes on. (Okay, maybe not that last one.)
I would say the why for me has morphed throughout the past 10 years as I’ve gotten older (and theoretically wiser). I was moving along, happy with my goal of passive income by retirement, and being a slave to the grind until then. Then one day someone introduced me to the term, Private Family Banking System. This intrigued me.
Setting up a Private Family Banking System wasn’t about setting up a brick-and-mortar store. It wasn’t opening my own true “bank”. It was about creating a financial strategy, a banking system, where YOU take over the banking function in your life. Imagine a world where you never had to pay interest to an outside bank again. Imagine a world where you never had to approach a traditional bank again, but could borrow from yourself, and pay yourself back, time and time again throughout your life. This is a game changer in real estate endeavors, and so many other areas of one’s life. I’ll leave you to dream all the ways your life would change by controlling the banking function in your life.
Now that we’ve created a system that can change the financial trajectory in our lives, it doesn’t just stop there. How can we create a financial trajectory that can literally last for generations? Through this approach, one can be building up their warehouse of wealth throughout their own life, utilizing it along the way – then, their children can also be accessing it to replace the banking function in their lives. Those children then begin setting up their own banking system, thus combining and compounding the growth for the 3rd generation. And this can go on and on and on, as long as each generation teaches the next. As a matter of fact, the Rockefeller Family have a very similar system in place, and they are some six generations in, with the wealth still flowing.
With a system like this in place in your life, you’re leaving more behind than just a rental property, or a life insurance death benefit, or equity in your home. You’re leaving behind more than just a legacy. You leave behind a legacy that can last for generations – A Generational Legacy – and that is worth pursuing.
It has been said, “A good man leaves an inheritance for his children’s children.”
It has been said that, “Procrastination is the grave in which opportunity is buried.” * I’ve spoken with countless people, and an overwhelming majority have what is perhaps a well intended thought that, some day, when I’m ready, I’ll start. When it comes to implementing your own Private Family Banking System, and build it to a point where you can be doing amazing things with it, such as funding a half a million dollar purchase and rehab in full… you have to start somewhere.
I want to show you an example of what one 30 year old person can be doing by the time they’re 38. Watch how over the next 10 years, they not only grow passive income and increase equity, they create an additional $15,000 a year of income tax free growth inside a properly structured cash value Whole Life Insurance policy. This is not your grandmother’s policy. This is structured to have robust cash value growth from day one, and compound in growth year over year, even while it’s out being used to make money elsewhere.
By the time Mr Investor reached age 38, he had built up just over $207,000 in cash value. He borrows against his policy that year a sum of $200,000 for real estate deals. Now typically, an investor can make one of two choices – pay cash for one home, or down payments on 4 homes. Hopefully, you choose the 4-home option. Leverage is our friend in the real estate game.
Based on some common numbers, he’ll be cash flowing $479 per month on each home. Over the next 10 years, he’ll pull in $22,992 per year. Over the next 10 years, the mortgages will be paid down, while at the same time the value of the homes will presumably go up by some 30%. This is why we do what we do when it comes to buy & holds! Now let’s factor in the cash value from his policy. Over that same 10 year period, he’ll pay in $230,680 in premiums. His cash value will grow from $207,387 to $586,854 (less the $200,000 that is out). That means his net cash value growth will be $148,787! That’s an additional average $14,878 per year, of cash value that he can utilize for other deals, or however he sees fit. If he sets up a repayment plan for that original $200,000 loan from his policy over that 10 years, he’ll have the full $586,854 to use by age 48. Or, he could choose to keep the $200,000 out for the 10 years (but why?), and he’d still have $386,854 to utilize (586,854 – 200,000).
Did I also mention that even though $200,000 will be out of the policy, being used on something that’s going to make him money, the cash value will still be growing inside policy at a rate as if it never left. No other vehicle can you do this with! And furthermore, the $200,000 ‘loan’ against the policy is an unstructured loan where you decide how you’re going to pay it back, over how long, and how much. And did I also mention that the $148,787 net cash value growth inside the policy is not taxable when structured and accessed properly?
There is no other vehicle with this many advantages. Call me today and let’s come up with your own personalized plan. Now is the time.
What would change in your real estate investing business if you didn’t have to pay the 7-12% interest and points to a lender? What would change in your financial life, if you never had to borrow from a bank again, but could borrow from yourself, and pay yourself back, with interest, and do it over and over and over again? What would change in your personal life, if you were able to be your own bank throughout life, and finance your own cars, vacations, child’s college & even retirement? What would change in your family’s life, if you were able to do everything we’ve talked about while you’re still alive and then leave a substantial financial legacy that could literally last for generations?
Most of us are on board with these ideas. What if there is one vehicle that can help you accomplish all of these things… at the same time?
Now what I am not talking about is a replacement strategy against your real estate investing ones. What I am talking about is how setting up what we call ‘private family banking systems’ can turbo-charge your current strategies.
Utilizing these strategies allows a person to build cash value in a vehicle where it can grow uninterrupted, while at the same time being used for other things.
For example: While you’re using that cash value throughout your life for real estate investing purposes, that same cash value is growing as if you never touched it. While is it doing this, you are at the same time building up the ability to supplement (or even fully fund!) retirement and even leave a legacy that could literally last for generations. In the end, your real estate investment strategies creates passive income for retirement, all the while your private family bank also supports you through retirement.
As I talk with more and more clients, I would have to say that the main thing I teach is about the flow of money. Most people have money flowing away from them. My job is to work with you based your goals and objectives, based on your current situation, taking a wholistic approach to changing the constant outflow of your money, to help you turn in inward.
This is why we do what we do in teaching people about the Infinite Banking Concept. We want to see your life changed for the better.
The average household in the United States currently carries a debt of $137,000, which is a staggering amount. For context, the median debt in 2000 was only $51,000.
Here in America, we’re taught to finance our cars and our homes. Then, we’re told to get a few credit cards—because you need good credit—and it’s okay to buy something that you can’t afford—but pay it off as soon as you can… and the cycle goes on.
In the end, we find ourselves standing at the kitchen table, looking over a staggering pile of bills. We scratch our heads, wondering how we got into a position where debt became such a daily burden.
There are plenty of popular strategies to help people get their debt under control. Grandma’s envelope system for household budgeting, for example, might be a great starter strategy for those who can’t seem to control their spending habits. Debt stacking is a great approach for knocking down debt, though it does require some discipline.
One of the services we offer at Unbridled Wealth is helping you build a debt recapturing plan by applying the Infinite Banking Concept (IBC). The Infinite Banking Concept is best achieved through a properly structured dividend-paying whole life insurance policy, which we help you develop. Once you understand the process of using a whole life policy to recapture your debts, you begin to see tremendous cash value growth through the life of the policy, which offers you more freedom to manage your own personal finances.
The whole life insurance policy we’re talking about is far different than your ‘average’ policy. It is not Universal Life (IUL’s, VUL’s), Annuities, or Term, nor is it an investment product. Instead, it’s a way for you to build cash value inside of a policy while still having access to that cash along the way. Your money will gain uninterrupted compound growth inside the policy. Rather than needing to finance everything with a traditional bank, you have the ability to be your own bank.
How much money would you save in life, if you didn’t pay interest to an outside bank?
So what about recapturing debt inside of a policy? If a bank were willing to gradually consolidate your outside debts, let you decide the terms of the loan repayment, guarantee you growth of the cash value that you have accumulated (even with an outstanding debt balance), and offer to pay a guaranteed sum of money to a beneficiary once you pass away (outstanding loans or not), would you be inclined to use that bank? I should hope so!
This is what IBC can do for you.
Alternatively, you can pay down your debts, pay interest to the banks, and end up with a zero-dollar debt balance. That’s a great accomplishment too! But would you, if you could, take advantage of all the other benefits along with it?
Reach out to us and we’ll show you how.
Article written by Jason K. Powers
~ Let no man seek the good of his own, but that of his neighbor. 1 Corinthians 10:24 ~
