Tuesday, January 31, 2012

Privatized Banking, It's Not Just For Financial Reasons

Wachovia (now part of Wells Fargo), was discovered to have allowed billions of dollars of dirty money to be laundered for the Sinaloa cartel. (The amount is staggering: $378,000,000,000… which is about a third of Mexico's GDP; the bank paid out $160 million to the Feds to settle the issue without having to admit fault.) 
During the height of the financial crisis, the laundered drug money was, according to the Guardian, "the only liquid investment capital available to banks on the brink of collapse." Despicable. You don't have to support bankers. 
Ethically, morally, and financially, the best thing you can do is Become Your Own Banker. Ask me how.

Monday, January 30, 2012

Is Fraction Reserve Banking a Farce?

I saw this on my Facebook page posted a few times and I would have to say it's mostly true given my experience in talking to people.

Regarding wanting to know about Fractional Reserve Banking:
Ask a Libertarian and they'll tell you...
Ask a Republican and they won't know...
Ask a Democrat and they won't care...

I would recommend taking the time to read the article by Stephen St. Angelo located here: http://www.financialsense.com/contributors/steve-angelo/the-coming-paradigm-shift-in-silver

If you are short on time or attention span, let me simply direct you to this portion of the article: 

Effective December 27, 1990, CD’s, savings accounts, and timed deposits owned by entities other than households were not included in this 10% reserve requirement.  Additionally, in 1994 the Federal Reserve Board passed a “Deposit Reclassification” for financial institutions to help lower reserve requirements even further.  Eric DeCarbonnel explains this in his article “US Banks Operating without Reserve Requirements”:

Deposit reclassification is an accounting trick, used by virtually the entire financial sector, which allows banks to eliminate nearly all their reserve requirements. Deposit Reclassification splits a checking account into two separate subaccounts, a transaction (checking) subaccount and a non-transaction (savings) subaccount. This distinction only exists on the bank's books: you will never see these subaccounts on your bank statements.

 Deposit reclassification means that, at any point in time, most of the money in American checking accounts sits in invisible savings subaccounts. These savings subaccounts pay no interest, but allow banks to avoid reserve requirements. The public is completely unaware of this financial engineering.

It is now apparent that the so-called official 10% fractional reserve ratio of the U.S. banking system is just a mere figure to delude the public into believing it has a working cash reserve ratio, whereas in reality, the system is a complete farce.

The public has no clue just how weak and vulnerable the U.S. banking system has become.  At one time, the United States had a fractional reserve banking system backed by physical gold money.  Today, its financial system is entirely based on a fiat monetary regime with practically no fractional reserve ratio whatsoever.

On a final note, here's a good video explaining Fractional Reserve Banking.

Thursday, January 26, 2012

Investments Can Freeze, Too

In time of need, frozen assets are as useless to a person as air is to a fish.  Yet many people have put their savings into investments which can never be liquidated without serious loss.

Of all places where money can be stored for protection from loss, short and long-term security, and tax-favored growth, a dividend paying Whole Life insurance contract is the only place money can reside that is most flexibly adapted to your personal needs when those needs are likely to be most urgent whether now or in the future.

  • It guarantees to you a tax-favored growing fund available on demand for any purpose you desire.
  • It guarantees to you a regular tax-free income (under current tax laws) when your earning power is diminished and or has ended. 
  • It guarantees to your spouse and children a regular income when you are no longer able to provide for them.
If you have other investments which proved disappointing- and who hasn’t?- why not decide now to put more of your future savings into a private contract with the most solvent financial institutions in the world: life insurance companies.  A private (as opposed to government sponsored and controlled retirement accounts like a 401k/IRA) contract is always liquid and never fluctuates in value regardless of the economy.

Would you like to know how a guaranteed life insurance contract can benefit you?  Call JLM Wealth Strategies at (925)386-6639 to learn more.

Monday, January 23, 2012

Mike Maloney Discusses The Monetary System

"It's best to be way too early, than one second too late." Listen to Mike Maloney break down the monetary system in very simple terms. It's not difficult to understand. Most people don't understand it because mainstream media promotes ignorance on the subject. Share this video with others and ask them to watch and learn.

Friday, January 20, 2012

Pick Your Poison-Banks Will Get You Either Way Unless You Become Your Own Banker

This blog post comes courtesy of an exchange between Facebook friends after posting this article from Examiner.com: Financial Suicide, With The Assistance of Your Bank

Me: Think you have a low interest rate?  Think again.

Tony Russo, Co-Founder of LandMark Mortgage Group:  Yes-ish and no-ish.... The percentage of principal to interest is a byproduct of amortization. The fact of borrowing at 4% (nets to +- 2.5-2.75%) is great. Im paying 4% but a great wealth manager (let's just say at...JLM) is able to help me get more in this economy AND as the economy heals, money market rates move up but my 4% stays. If someone can pay cash for a home these days in sunny California, more power to ya. It's not healthy to leverage heavily, I'm not saying it is. A balance of well advised mortgage with smart financial planning is the key.

Me: Tony, well said on the money management of a mortgage. The significance of the article for me as a Bank on Yourself advisor is getting people to realize the volume of interest being paid to the bank. If people realize the problem, they can seek a remedy to that problem. That's where Bank on Yourself aka the Infinite Banking Concept comes in. 

All loan interest (with a traditional bank) is directed outward to the bankers never to be seen again versus being re-directed back towards the borrower to be used over and over again during the borrowers lifetime. This strategy (Bank on Yourself/Infinite Banking Concept) also creates a tax-free retirement and a multi-generational transfer of wealth with no luck, skill, or guess work required. 

I like where the article says at the end "Unfortunately, average Americans are so busy living life as they know it, they have no idea that they’re killing themselves financially. Alternatives exist. But they require looking at money in a whole different perspective. There are alternatives to routinely bludgeoning your financial future with never-resting bank charges. The financially healthiest Americans are generally not the ones who make the most money. They’re the ones who figure out how they can actually keep the money they make. Imagine keeping the 36.7% that the average American pays to banks. If you take into account that you may be able to pay that interest back to yourself, that puts you essentially 73.4% ahead of that average American." An alternative is suggested but never by name. It should have been. 

The more people know about the Infinite Banking Concept, the better off more individuals would be. I'm a firm believer that if people eliminated bankers from their life, a lot of the worlds problems would be eliminated. Bankers do one thing, they position people into a corner by creating debt. It happens on an individual level as well as it does on a macro level. Look who is running Greece and Italy now. Unelected bankers now called Technocrats. 

Bottom line,when a person controls their individual banking function, they create a greater amount of wealth during their lifetime and as well as for their next generation. To do otherwise, means throwing endless amounts of money to your bank. 

It's like a pilot choosing to fly into headwind versus flying with tailwind. You can fly into headwind but it will take you much longer to get to your destination versus having the wind at your bank. This is where traditional financial planning drops the ball. Financial advisors focus on chasing rate of return on the 10% of money people save out of their take home pay versus the 36.7% that the average Americans pay to their traditional banks/finance companies. 

I'd rather work with the larger chunk money. That's where the tailwind is. The solution is out there, even in sunny CA.

Thursday, January 19, 2012

The Ultimate Wealth Building Strategy

The Lifetime Loss of Not Getting Started With Bank on Yourself

Question from someone doing their homework on the Infinite Banking Concept (IBC)/Bank on Yourself

Comparing this scenario to how things would work in my current TD Bank account: If I withdraw $3,000 from my TD Bank account, then I spend that $3,000 to pay my credit card bill.  I then replenish my TD Bank account with an additional $3,000 that I've generated through my job.  Is the only difference that I am getting to keep some interest on the money?

My answer via email:

There are a couple of ways to explain this.  This is the first one that comes to mind because I just heard it recently and thought it was an interesting take on IBC.

“Would you rather attempt to earn 10% on money you save, or 4% on money you spend?”

Most people spend in excess far more than they save on an annual basis but we get caught up with chasing rate of return on the fraction of take home money we save.  Wall Street and the Banks have programmed us very well in that regard.  We focus our attention on the investment returns with what we save vs. recapturing all the money going out the window we’ll never see again.  Which is the larger amount, the fraction you save or amount you spend?

You bring up a good a point about losing out on just a little bit of interest on that $3000.  It is a little bit of interest on a small amount of money and especially if you are thinking in terms of a short time period like a year or two years.  I’d like to challenge you to think bigger and to focus on what's going out the window.

How much of your take home pay goes to pay expenses?  Of those expenses how much of your expenses do you pay with cash?  Paying cash is another form of financing.  Instead of paying interest to a finance company, you are now losing the ability to earn interest on the cash used for purchases and not just for a year or two, but for the remainder of your life.  It’s the opportunity cost of paying cash.   How much of those expense are just for paying interest (mortgage, car, student loans, etc)? 

Once you’ve determined how much money you have going out the window that you’ll never see again, I want you to skip forward 30 or 40 years.  What is the lifetime loss of your money? 

You don’t have get specific with the numbers.  I’m sure your imagination is at work.  I’m guessing it’s a very large chunk of money that you could have redirected back to yourself if you had a financial system you controlled.  With IBC, you re-direct the flow of your money back to yourself and because you own the system, you also profit from it.  That is the essence of banking. 

Banking is the most important business in the world.  No other business can operate without it.  The problem is that banks have tricked us into believing we need them for the banking function when in fact we don’t.  (Have you ever heard that the greatest trick the devil ever played on people was convincing them he didn't exist?  I'm not suggesting bankers are the devil...BUT it is a pretty neat trick to convince people no other banking options exist.) We have all the characteristics of a traditional banking system with a dividend paying mutual life insurance company. (Side note: care to guess which business buys more cash value life insurance policies than any other?)

With a traditional bank, there are four components:  
1.       Shareholder 
2.       Employees 
3.       Savers
4.       Borrowers

With IBC, we’ve replaced the shareholder with the policyholder.  We hire the employees to manage our banking business.  We’re saving money with each premium paid and we all act as borrower whether we realize it or not.  Remember that paying cash is just another form of financing.  Ultimately, the money borrowed is our own.  We pay it back with interest.  The employees get paid.  After all expenses are subtracted from income, there is a profit leftover.  Since we’ve replaced the shareholders of banking system with ourselves (mutual life insurance companies are owned by its policyholders), we share in the profits in the form of dividends. 

At the end of the day, an insurance contract is one of 3 places where you can put cash: Traditional Banks, Wall Street, and Insurance companies.  It’s easy to understand why people who do their homework on IBC/Bank on Yourself end up choosing life insurance contracts.  Dividend paying Whole Life insurance contracts provide the greatest safety, liquidity, and tax-favored contractually guaranteed growth versus any other place where money can reside, and that’s just on the surface of what you see.  The "unseen" of IBC/Bank on Yourself is the ability to have your money working 24 hours day (for the rest of your life) even when you use it for other purposes.

Focus on the bigger picture and you'll avoid the lifetime loss of not getting started with Bank on Yourself. 



P.S.  Traditional banks are the largest purchaser of cash value life insurance contracts.  A good portion of a bank assets that it keeps in reserves has to reside somewhere that is ultra liquid and ultra safe.  What better place than a life insurance company?  Do as the banks do... they don’t buy mutual funds!

John A. Montoya
JLM Wealth Strategies, Inc.
(925) 386-6639 Office
Authorized Advisor-Bank on Yourself®
CA Life#0C42222
DRE #01390017

Wednesday, January 18, 2012

Incredible Money Saving Tips You Can Use & Invest The Difference

The most common marketing ploy for term insurance tells us to buy term insurance rather than cash value insurance and invest the difference. If that’s such sound advice, why don’t we apply the wisdom more often? For example:  

    • Buy folding chairs, not a couch, and invest the difference.
    • Buy a push mower, not a power mower, and invest the difference. 
    • Buy a bicycle, not a car, invest the difference. 
    • Buy a shovel, not a snow blower, invest the difference. 
    • Buy a pet, don’t have kids, invest the difference.
    • Buy scissors, cut your own hair, invest the difference. 
    • Buy just aspirin, not your prescriptions, invest the difference. 
    • Stay at home, don’t take the spouse out, invest the difference. 
    • Move back in with your parents, sell your house, invest the difference. 
    • Visit the mall, instead of taking a vacation, invest the difference.

It seems this philosophy works with everything! Simply extract value, and invest the difference. 

Dave Ramsey seems to think Buy Term and Invest the Difference is a brilliant financial move for all American households.  Here's how Bank on Yourself compares to Dave Ramsey's recommended strategy.  What do you think?

If you'd like to hear Dave Ramsey and Suze Orman discuss their strategies, watch the humorous video below.

Thursday, January 12, 2012

How To Become Your Own Source of Financing

This is the best video I've seen if you've never been introduced to Bank on Yourself.  It is also known as the Infinite Banking Concept or IBC for short.

As one of 200 Bank on Yourself advisors, I can help you get started.  Visit www.FindOutMoreNow.com and enter my promo code: JM66.

John A. Montoya
JLM Wealth Strategies, Inc.
(925) 386-6639 Office
Authorized Advisor-Bank on Yourself®
CA Life#0C42222

Wednesday, January 4, 2012

Another Perspective on the National Debt

This brilliantly cuts thru all the political doublespeak we get and puts it into Perspective.  

Lesson # 1:
        * U.S. Tax revenue: $2,170,000,000,000
        * Fed budget: $3,820,000,000,000
        * New debt: $ 1,650,000,000,000
        * National debt: $14,271,000,000,000
        * Recent budget cuts: $ 38,500,000,000
        Let's now remove 8 zeros and pretend it's a household budget:
        * Annual family income: $21,700
        * Money the family spent: $38,200
        * New debt on the credit card: $16,500
        * Outstanding balance on the credit card: $142,710
        * Total budget cuts: $385
        Got It ?????
        OK now Lesson # 2: Here's another way to look at the Debt Ceiling:
        Let's say, You come home from work and find there has been a sewer backup in your neighborhood....and your home has sewage all the way up to your ceilings.
        What do you think you should do...
        Raise the ceilings, or pump out the crap?
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Tuesday, January 3, 2012

10 Things You Don't Know About Ron Paul

1. Ron Paul doesn't go to the gym. He stays fit by exercising his civil rights.

2. Ron Paul delivers babies without his hands. He simply reads them the Bill of Rights and they crawl out in anticipation of freedom.

3. Ron Paul doesn't cut taxes. He kills them with his bare hands.

4. Jesus wears a wrist band that says "What Would Ron Paul Do?"

5. When Ron Paul takes a shower, he doesn't get wet.........the water gets Ron Paul.

6. Ron Paul could lead a horse to water AND convince it to drink, but he doesn't believe the government has the right to do so , so he refuses.

7. Ron Paul's midi-chlorian level is off the chart.

8. When Chuck Norris gets scared, he goes to Ron Paul.

9. Studies by the World Health Organization show that Ron Paul is the leading cause of freedom among men and women.

10. Ron Paul makes the U.S. dollar want to be a better currency