Infinite Banking

Your Guide to the

Infinite Banking Concept

A look at the Infinite Banking Concept, cash value life insurance,
and how to become your own banker

 

your guide to the infinite banking concept

Let me take a minute here and explain what infinite banking is.

 

It’s a way of using cash value life insurance to create and protect your wealth.

 

There are essentially 5 key elements to this concept.

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They are:

1. Safety of Principal
2. Tax Benefits
3. Access to Capital
a. Purchases
b. Opportunities
4. Income at retirement
5. Legacy builder (death benefit)

 

Quickly lets hit each one of these points.

 

#1 Safety –

 

Look, markets are volatile. Extremely volatile. It’s up for a few years, it lulls everyone to sleep, we all think the market will go up forever, then bam, it changes almost instantly and years of growth can be wiped out in sometimes days, even hours.

 

Did you know that in 2008 2.1 trillion dollars was wiped out in about the time it takes to brush your teeth? That’s how fast it can change.

 

There is a saying that the market has a way of proving the most number of people – Wrong!

 

It’s true isn’t it? How many people have no idea what to do, ride the roller coaster up and down with the market and then cross their fingers and hope they made the right choice.

 

Pretty scary isn’t it? Most people put the greatest amount of money at risk hoping it will be okay. What if it isn’t?

 

It doesn’t have to be that way.

 

What we gain by using this concept of high cash value life insurance is safety.

 

Strong insurance companies have been through every market cycle and have protected your capital through good and bad times.

 

I personally won’t even touch a company that doesn’t have a track record of over 100 years.

 

There are underlying guarantees as well. In the end, it’s deemed so safe that even banks put billions of dollars into cash value life insurance to protect their capital as well.

 

Yes, they take your money that you deposit into your checking or savings account and they in turn use some of it to buy cash value life insurance.

 

So my question is, why not cut out the middleman and go direct?

 

#2 – Next we have Tax-Benefits –

 

This is one of the last places where you can save or invest money and gain substantial tax benefits. Now you have to do this right, and we are good at making sure you do, but if managed properly, you can get tax-deferred growth on your cash value, but also tax-free income, and tax-free death benefit as well.

 

When you add all of those advantages into the equation, the net results become attractive, particularly when compared to other risky and taxable alternatives.

 

# 3 – The next benefit is Access to Capital –

 

This can be a tremendous advantage for sure. Families and business owners alike have a need for capital.

 

I recently had a business owner call me and say he needed to get $50,000 for a short period of time. The loan is to expand his business and he would be able to put the money back in in a month or two.

 

He has been building up his cash value and so he had plenty to easily access the $50,000 he needed for this opportunity.

 

What a huge benefit – the hassle of getting the money elsewhere might have lost him this opportunity.

 

We all have a need to access capital at times in our lives. It may be to make a major purchase or to take advantage of an opportunity.

 

We’ll talk more about loans and how they work and the best way to use them later, but for now, understand that there will come a time, most likely, when having access to capital with no credit applications, no explanation, no payback constraints, simply make a phone call and money is on its way, will be a huge benefit to you.

 

#4 – The next advantage is Income At Retirement –

 

This is often overlooked and to me it’s one of the most amazing benefits of all. Why, because at some point in our lives if we want to retire, we are going to need to have a plan for income.

 

All the assets in the world are useless if they don’t produce income right?

 

It used to be career employees received a pension when they retired. An income for life. Now it’s all on you. The pension has been replaced by the 401k.

 

Now the risk is on you and most 401k’s are at the mercy of the market.

 

What if you could have your safe money send you off tax-free income as well?
What’s more, what if the income was far more than you could get in a typical safe investment such as a CD or even a treasury bond. This is often referred to as your “withdrawal rate” during retirement.

 

It’s the percentage you could take each year from your assets to have a reasonable assurance that you won’t run out of money.

 

The Wall Street journal, Monte Carlo simulations and several other analysts of have said there is a “bullet proof withdrawal rate” that you should stay within.

 

Again staying within the bulletproof withdrawal rate would basically assure you don’t run out of money.

 

You might be shocked at how low that is.

 

In fact 1 million dollars would produce less money than the poverty line in America.
The poverty line is less than $24,000 per year.

 

Can you imagine have 1 million dollars and being advised you should not take more than 2.4% or $24,000 per year?

 

I guess a million bucks ain’t what it used to be!

 

Add to the fact that at some point, usually 7-10 years before you retire and 7-10 years after your retire where you simply should never lose money. I call it the danger zone.

 

If you lose money during the danger zone you have a greater chance of running out of money before you run out of life as your capital base or your assets can be depleted quickly.

 

Managed properly a well-engineered cash value policy can offer you substantially higher income, tax-free income.

 

Once more, ever have to worry about the danger zone again.

 

We’ll talk more in depth on our video about taking income. I think you will be pleasantly surprised at the tax-free income you can get from your cash value.

 

# 5 – Finally – Leaving a legacy

 

Most people I talk to wouldn’t mind leaving something behind for their posterity. The problem comes when mom and dad live like church mice, barely subsisting, in order to leave something behind.

 

Or if Dad is worried that mom won’t have enough assets to continue a comfortable lifestyle that too can make for a worrisome retirement.

 

It’s not any fun at all living paycheck to paycheck and wondering if your savings or investments will run out.

 

This isn’t the way we dreamed of retirement is it?

 

The great thing about having a death benefit, is that is can let you spend down other bucket of assets while you are living knowing the bucket will be refilled at death.

 

It’s a safety net for your spouse so that they are assured adequate assets to provide income.

 

It can also be the best way to pass on an estate. The wealthy have been using life insurance for decades to pass on their legacy.

 

The death benefit is always income tax-free too. Where else can you get all your cash and also get what I call a “bonus” much greater than your cash value.

 

I just had a client pass away at a young age. He left a wife and young child. Without this plan being in place who knows what she would have done, but because he did some planning, she’ll have the capital needed to generate income the rest of her life.

 

While he was living they were able to take advantage of the opportunities and build additional wealth in those investments too.

 

So there you have the 5 key elements to the infinite banking concept.

1. Safety of Principal
2. Tax Benefits
3. Access to Capital
a. Purchases
b. Opportunities
4. Income at retirement
5. Legacy builder (death benefit)

 

There really is nothing like it.