Be Your Own Bank
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- Опубликовано: 7 сен 2024
- Be Your Own Bank
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Have you heard of the concept of becoming your own banker or being your own bank, but you're a little bit confused about how to put this into action in your life?
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Becoming your own banker was popularized by Nelson Nash, the father of the Infinite Banking Concept. He found this way to utilize a whole life insurance policy by borrowing against the cash value to get him out of a terrible financial situation.
The three steps that you need to be your own bank.
1) Keep cash reserves
Now, what do I mean by that? When we put our money into savings accounts, we're looking for safety and access.
Being able to use that cash is essential, but the most important thing about the bank is that it is a store of capital.
I want to challenge you to think about that same cash in the bank's reserves from the other lens or the other's perspective in the equation.
You, as a customer of the bank, put your cash in the bank for safekeeping.
The bank, on the other side, is receiving those cash reserves. There are going to pay you for the use of that capital, and why do they do that?
They can then make loans to other people.
They're able to make loans that will be repaid at interest, and they're able to charge more interest on those loans that they make out to people who they expect to be repaid from.
This is why banking is the most profitable business model in the world.
If we look at being a customer of the bank, we earn a return or interest by keeping our money in the bank. However, on the bank's side, they pay interest for the use of that cash because it's so valuable to them. It allows them to make loans that earn cash flow, which puts them in a position of control, and it's all because they hold reserves.
We want to keep a portion of all that we earn. If you take this concept all the way back to the Richest Man in Babylon by George S. Clayson, he says, "put your purse to fattening," meaning if you make $10, keep one, only spend nine. You can increase this concept and even say your goal should be to save 30% of everything that you make.
2) Own the Reservoir.
When you think of who is holding and controlling capital, this can often be misleading because we believe, well, if the money is in savings, it's in the bank, then I control that capital. The bank is controlling the capital in that case.
What we wanna do is figure out how we can have a reservoir where we keep our money, where we are saving, and we are putting that money in our own control.
The key here with control is, can I earn interest? Can I access this capital and will it not drop in value?
I want as much safety, as much liquidity and as much growth on this cash as possible.
So where is the ideal tool or vehicle to keep my own cash in a reservoir that I control?
The ideal tool to use is a specially designed whole life insurance contract.
When you put it into a privatized banking policy or a whole life insurance policy is that you want to utilize a mutual company.
Now, this company is owned by the policy owners, meaning you own the company. You receive a return of the revenue through dividend payments. When the company is profitable, you receive that gain in your policy in the form of a dividend.
This cash is also accessible to you because you can access it through a guaranteed loan option.
When you have your money compounding and growing inside of a life insurance policy, you never interrupt the compounding of that capital, as long as you have the policy in force, even when you borrow against it.
So you're getting safety, liquidity, and growth.
3) Master the art of arbitrage.
Now, here's what the bank does. They pay interest to a depositor. That's the cost of capital for them.
So let's say one percent on a dollar. That would be a penny. That's their cost for the use of that dollar. Now, if they are able to loan out that $1 at a 5% interest rate, they're going to have the five cents come back into their hands as a result of controlling that $1.
So their cost of capital is 1%. Their earnings on that $1 is 5%. Now, if we look at the gains, they get a 400% return on their money.
Say you're able to take a policy loan at 5% and put that to work in a rental property earning 20% cash-on-cash returns. That would be a wonderful position of arbitrage. You're using leverage to create velocity of money and have your money do so much more for you.
At the same time, your money continues earning uninterrupted compound interest inside the life insurance policy.
#beyourownbank #beyourownbanker #infinitebanking
Hi Rachel: its the "more baby bloopers pls" guy. Since international banking exists could this apply to infinite banking at all? a) do high cash-value whole life insurance policies exist outside the US/Canada? (youtube content implies no, so far) b) in general does a policy-holder have to be a citizen where the policy-issuing company does business? (ex. could a Cdn or British citizen get a US policy?) Tx, V
Thank you for asking!
1) Yes you can get a whole life insurance policy even if you are not a resident of the U.S. You would need to have hard assets in the U.S. such as a business or real estate and be willing to visit the U.S.
2) I am not aware of any other countries where these types of policies exist.
Yes
Thank you for watching!
Thank you for these videos , serously ❤
You're so welcome!
I currently use a HELOC to pay down my mortgage and am making great progress ..... I will be ready to make another chunk in April.... my question is should I start a policy first? I read the book, I like it but am still a bit confused and am a bit hesitant...... I did meet with an agent and he laid out a plan for me but I’m still learning and hesitant.... any advice would be much appreciated.... thank you ! Love your chanel
Jason, Thank you for commenting! I would like to commend you for taking control of your finances and learning how to improve your financial IQ! I cannot speak to your specific situation in a RUclips comment, but we do have a free Privatized Banking Guide here: themoneyadvantage.com/privatized-banking
If you would like to meet with our team to map out your financial picture and determine the next best steps you can schedule here: themoneyadvantage.com/calendar
Excellent explanation
Thank you
You are welcome!
What other options are available that does not involve whole life insurance
Thank you for watching! We are not aware of anything else quite like it.
Rachel how does a person get started doing this? I would be interested!
Rosemary, thank you for commenting! Glad you found it valuable. You can book an appointment with our team here: themoneyadvantage.com/calendar
You can find out more info here: themoneyadvantage.com/privatized-banking
I retired sitting on big reserves. Who can help me set this up?
Thank you for watching! You can book a call with our team here: themoneyadvantage.com/calendar
@@TheMoneyAdvantage ok thank you
Is this for South Africans?
This is only available in the US and Canada. If you own hard assets in the US and are willing to travel to the US for the application then it can still be an option.
I am bit confused your other video ruclips.net/video/9FkwOp08REc/видео.html and this one.
Thank you for watching! What are you confused about?
Keeping your money in the bank is pathetic they give you less than 1% ,
Did you watch the video? It is about being your own bank not keeping your money in the bank!
Yes
Thank you for watching!
Yes
Thanks for watching!
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Thanks for watching!
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Thank you for commenting!
Yes
Thanks for watching!