_Why You Should Use the Infinite Banking Concept
The Infinite Banking Concept has been around since permanent life insurance has existed, but it didn’t really gain popularity until the 1970s, when Nelson Nash wrote a novel detailing this money making phenomenon. So precisely what is the infinite banking concept and the way does it work? In this video, Paul Haarman and Mike Dillard discuss the way the infinite banking concept works.
Is there a Infinite Banking Concept?
Investing secrets
The Infinite Banking Concept involves purchasing a permanent life insurance policy that is built to build large cash values and death benefit as time passes. As these policy cash values increase, then they become available to the policy owner for loans at very favorable interest levels and terms.
Even in tough economic conditions you still be able to qualify, as Nelson Nash did bank within the 70s and 80s. All that you should do is simply have cash values available and you’ve qualified! The insurance company will put a check within the mail to you for whatever amount you seek approximately the extent of your policy’s available cash values.
Here’s where it gets fun. If you pick out the right life insurance policy, it'll pay you interest or dividends on your cash values EVEN IF YOU HAVE BORROWED THEM OUT. In other words, you’ve now found a way to “magically” build your money work for you in two places simultaneously.
Infinite Banking Concept Illustration
Here’s a great example of how the infinite banking concept works as supplied by David Haas:
Now imagine you have a banking account that pays you 5% interest on your own funds. If you want to make a purchase of, say, a $20,000 new car and you also pay cash for it, you are INCURRING A COST (lost interest) of 5% about the use of your money, correct? Are you not paying interest? Of course you might be. You’re paying interest by to not get it. You’ve chosen to move neglect the from an account that was paying you 5% to an automobile that pays you nothing. Therefore, your choice has still cost you 5% interest on your own money - in the form of sacrificed interest.
Now, back to normal insurance policy loan. If you borrow the identical $20,000 for your car out of your insurance policy, you will pay interest of, say 6% for the use of your money BUT - and here’s the big difference again - THE INSURANCE COMPANY WILL CONTINUE PAYING YOU INTEREST OR DIVIDENDS In your MONEY AS IF IT WERE STILL INSIDE THE POLICY. Your mathematical mind kicks in now and quickly calculates that the actual cost with the policy loan is NOT the full 6% but is actually the difference between what you pay the insurance provider and what you are receiving back from their store. In practice, this “cost” for the use of your money is very negligible (1-1.5%) inside the short run and is normally FULLY RECOVERED Along with a PROFIT in the long run (when the income tax-free death benefit is eventually paid for your heirs).
While this difference in financing costs may well not initially strike you as meaningful, consider whatever you finance (by paying cash or borrowing) compounded throughout your lifetime. Then, consider that banks perform the very same thing and look at how big they grow. Then, take into account that it can be proven that most people spend between 30 and 50% of their annual income on financing charges within the whole course of their lifetime. Then, that is amazing some or perhaps even nearly all of that money could be recaptured and compounded to your own pile of wealth and reinvested over and over for your own enjoyment later in life since your resources continue to expand exponentially. This wealth welcomes in FOR USE DURING YOUR LIFETIME. These are the basic possibilities of the Infinite Banking Concept.
These records about the infinite banking concept should wet your appetite to learn more. Mike Dillard and the Elevation Group discuss this idea in great detail. For a lot of the infinite banking concept, watch the Mike Dillard Webinar.
_Infinite Banking Concept
Is there a Infinite Banking Concept?
Investing secrets
The Infinite Banking Concept involves purchasing a permanent life insurance policy that is built to build large cash values and death benefit as time passes. As these policy cash values increase, then they become available to the policy owner for loans at very favorable interest levels and terms.
Even in tough economic conditions you still be able to qualify, as Nelson Nash did bank within the 70s and 80s. All that you should do is simply have cash values available and you’ve qualified! The insurance company will put a check within the mail to you for whatever amount you seek approximately the extent of your policy’s available cash values.
Here’s where it gets fun. If you pick out the right life insurance policy, it'll pay you interest or dividends on your cash values EVEN IF YOU HAVE BORROWED THEM OUT. In other words, you’ve now found a way to “magically” build your money work for you in two places simultaneously.
Infinite Banking Concept Illustration
Here’s a great example of how the infinite banking concept works as supplied by David Haas:
Now imagine you have a banking account that pays you 5% interest on your own funds. If you want to make a purchase of, say, a $20,000 new car and you also pay cash for it, you are INCURRING A COST (lost interest) of 5% about the use of your money, correct? Are you not paying interest? Of course you might be. You’re paying interest by to not get it. You’ve chosen to move neglect the from an account that was paying you 5% to an automobile that pays you nothing. Therefore, your choice has still cost you 5% interest on your own money - in the form of sacrificed interest.
Now, back to normal insurance policy loan. If you borrow the identical $20,000 for your car out of your insurance policy, you will pay interest of, say 6% for the use of your money BUT - and here’s the big difference again - THE INSURANCE COMPANY WILL CONTINUE PAYING YOU INTEREST OR DIVIDENDS In your MONEY AS IF IT WERE STILL INSIDE THE POLICY. Your mathematical mind kicks in now and quickly calculates that the actual cost with the policy loan is NOT the full 6% but is actually the difference between what you pay the insurance provider and what you are receiving back from their store. In practice, this “cost” for the use of your money is very negligible (1-1.5%) inside the short run and is normally FULLY RECOVERED Along with a PROFIT in the long run (when the income tax-free death benefit is eventually paid for your heirs).
While this difference in financing costs may well not initially strike you as meaningful, consider whatever you finance (by paying cash or borrowing) compounded throughout your lifetime. Then, consider that banks perform the very same thing and look at how big they grow. Then, take into account that it can be proven that most people spend between 30 and 50% of their annual income on financing charges within the whole course of their lifetime. Then, that is amazing some or perhaps even nearly all of that money could be recaptured and compounded to your own pile of wealth and reinvested over and over for your own enjoyment later in life since your resources continue to expand exponentially. This wealth welcomes in FOR USE DURING YOUR LIFETIME. These are the basic possibilities of the Infinite Banking Concept.
These records about the infinite banking concept should wet your appetite to learn more. Mike Dillard and the Elevation Group discuss this idea in great detail. For a lot of the infinite banking concept, watch the Mike Dillard Webinar.
_Infinite Banking Concept