THE INFINITE BANKING CONCEPT

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.

Nick Drzayich and the team at becomingyourownbank.com have been helping clients realize financial success and control for over 20 years.  Visit their site or give them a call at 208-484-3120 to learn more.

2 thoughts on “THE INFINITE BANKING CONCEPT”

  1. This is a decent article, may father who was an adviser told me.
    . Although it is more important to invest in a
    highly profitable business than a business that has superior management, you should watch
    out for snakes. Even businesses that are extremely profitable at the moment can be bad investments if extremely bad management is
    in control. If you discover a business with management practices that make you leery, then stay away.

  2. Wow that was strange. I just wrote an incredibly long comment but after
    I clicked submit my comment didn’t show up. Grrrr… well I’m not writing all that over again.
    Anyway, just wanted to say fantastic blog!

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