Financial Literacy remains a mystery for many today. Statistics show that 64% of adults simply don’t know how to make and manage money to last them a lifetime. Even if they worked a decent job with retirement savings many run out of money in their later years. Not to mention many never create generational wealth. I truly believe this challenge is not because people are not smart enough to understand financial concepts. It’s the lack of exposure and access to the information in a relatable way that creates fear and doubt around the best moves to make with money. When I speak on this subject it strikes a chord because I grew up in a middle class family with humble beginnings. My mom worked very hard to take care of me and my siblings with no real mentorship on what to do with the money she earned other than deposit it into a traditional bank then pay bill collectors. Then you were able to eat and live off of what was left over. Rather than what the wealthy do which is pay themselves first then pay the bills with what is left over.
Most people are shocked when they learn that they could actually deposit their money into a safer financial vehicle without riding the uncertain waves of the stock market. As well as instead of their local financial institution they can create a personal banking system for their family called IBC or Infinite Banking Concept. Infinite Banking is one of the safest investments with guaranteed return. When you own an Infinite Bank you have the ability to create cash flow and have full authority to decide how, when and where your money goes without depending on a traditional bank to qualify for loans. Instead you can start an account typically a whole life insurance policy and borrow against the cash accumulation. When I discovered this strategy it was a game changer to my wealth building strategy.
This very real and true concept can improve your family finances drastically if you have someone to help you understand how to make the best of it. It’s a good idea to seek a professional who specializes in this rather than a general insurance agent. Although utilizing whole life insurance as a tool to build wealth is not a new idea just like neither is investing, you need to have competent guidance in order to profit.
Here are five things you should know if you’re considering starting a Family Bank with the Infinite Banking Concept (IBC).
The Wealthy Have Used Infinite Banking for Ages. The elite have used this infinite banking as a strategy dating back people like John Rockefeller, Walt Disney as well as Sears and Roebuck. They have built fortunes that lasted for generations using whole life insurance like a bank.
Banks and Large Corporations Own Life Insurance. Did you know banks use whole life insurance as one of their Tier 1 Investments? These are called BOLI (Bank Owned Life Insurance). Big corporations also hold millions of dollars in whole life insurance in order to fund business expenses and maximize tax advantages. So deposits, loans and credit card interest are not the only money makers for banks and customer sales are not the only money makers for big business they also invest into insurance.
Whole Life Insurance Policies Are Not Strictly For Death Benefits. Life Insurance is not only for unexpected illness, disability or income protection. They are other savvy uses as a financial strategy. This can be maximized while the policy holder is alive. If you want to fund a new business, buy a new laptop, car, house or want to pay down debt. Instead of you applying for a loan or a high interest rate credit card, you can take a loan against the cash value of your whole life insurance policy without a credit pull. You can tap into the liquidity of your policy to borrow from the policy tax free. Yes, I said tax free while your principal balance in the policy continues to accumulate interest. In other words your money keeps growing even while your loan isn’t fully paid back.
You Could Earn Additional Money Through Dividends. Participating whole life policies allow you to receive dividends based on the profits of your insurance company. This means your cash value will increase every time the insurance company pays dividends. It will also increase when you pay policy premiums and earn you a guaranteed interest rate. The dividends are not a guarantee but if you do receive them you will be able to accumulate them as cash toward your total value or make paid-up additions.
Infinite Banking Concept is best for people who?
- Can obtain a whole life insurance policy for themselves, a loved one or even a business partner.
- Are willing to invest around 10% of their income monthly on a whole life insurance policy.
- Have a dependable income stream and are willing to increase their understanding of money, loans, banking, and investing (to avoid overextending yourself).
- Entrepreneurs, Business owners or real estate investors looking to grow their passive business income.
- Who may have max out their Roth IRA contributions and are looking for tax smart investment strategies.
- Are looking for a safer, simpler way to invest their money with guaranteed returns.
- Who want to start building generational wealth so your children have a stronger financial future
Now, of course there are more benefits and details that may have not been mentioned in this article. Such as it’s a very good idea to pay yourself back the loans but even if you didn’t. The outstanding loan amount plus interest would just be deducted from your death benefit. This would need to be addressed on an individual basis with your professional. However, now you can say you know a little more about Infinite Banking as a viable option to grow your money. It’s amazing that you can actually cover unexpected expenses, generate passive income with better tax advantages to ultimately come closer to financial freedom with the cash value from your whole life policy.
If you’re interested in creating your Family Bank using this strategy or have more questions schedule a consultation with a professional money mentor by clicking here. Finally, you can have someone by your side who’s on your side with your financial ventures.