5 Reasons Why Infinite Banking Makes More Sense Than You Realize

There's a reason our education system doesn't teach you about money.  There's a reason our education system doesn't teach how the banking system works.

Until you understand the reasons why, you are simply a pawn on the chessboard.  Limited in movement and the least important piece in the financial game we are living.

To help you grasp the bigger financial picture, you need to understand WHY Infinite Banking?

If you don't understand the reasons why, you're like a rudderless boat drifting whereever the current moves.  So here's 5 reasons to help you understand your financial WHY the Infinite Banking Concept (IBC) should be examined for your situation to determine how you can benefit:

1. IBC is a financial system that guarantees what you want to have happen, will happen, even if you're not around to see it happen.   An IBC Whole Life policy (designed with a Paid Up Addition's rider) comes with the strongest contractual guarantees that can be found anywhere.  Uncorrelated compounding asset growth materializes every year without any luck, skill, or guesswork (even when you leverage policy loans to buy more wealth producing assets!).   

Whole life policies are the only type of permanent cash value life insurance contracts that endows meaning the cash value will eventually equal the death benefit regardless of whether that happens next week or at age 121.  The financial success of a Whole Life plan is reverse-engineered to provide an annual blueprint of increasing value.  No other place for money does the same.   Think about it.

2. IBC is full reserve system.  Unlike a traditional banking fractional reserve system where your deposits are leveraged to make new money to lend at interest, the life insurance industry is afforded no such money printing luxury.  By law, all liabilities must be equaled by assets on the balance sheet of a life insurance company.  This is called solvency.  The life insurance industry has it and must maintain 100% solvency by law.  This means money held by a life insurance company is with the safest financial institution and industry in the world.  This alone is reason enough why banks place up to 25% of their reserves with life insurance companies in permanent cash value life insurance contracts called "Bank Owned Life Insurance."  No life insurance company would ever risk more than they possibly have to in a traditional bank account.  Think about it.

3.  You 100% control it.  A Whole Life policy is considered an asset because it appreciates in value every year and it is owned by the policyholder.  There is government or 3rd party custodian with overriding control of a Whole Life policy.  401k/IRA's are created by the government meaning you partner with an ever changing landscape of politicians in Congress who in most cases fail to represent your best financial interests.  A Whole Life policy in comparison is simple because it is a unilateral contract (grandfathered in place) between two like minded parties:  you the individual and a privately owned mutual-based life insurance company.  No rent seeking 3rd parties needed.  Think about it.

4.  It cannot be taken away from you.  Money in a banking system can be confiscated at any time.  While it is your money, you must follow the rules set by the banks.  Banks can censor any of your financial transactions and are required to report anything deemed suspicious no matter how inoccuous.  The IRS can put a lien on your bank accounts and restrict your access without warning.  

A properly designed and funded IBC Whole Life policy is a private contract existing outside the realm of bank and IRS reporting.  Considered private property, it cannot be seized from your grasp (unlike a house).  In short, you have to abide by bank rules and be on good terms with the IRS to have access to your own money.  Think about it.

5.  You can live life on your own terms.  Infinite Banking is a strategy that creates an alternative financial system that protects you, your family, and your labor (translated into money).  Whole Life policies have existed for nearly 200 years largely unchanged because the contract law that protects it as an asset along with the actuarial science that guarantees the financial performance have been proven to work since they were first created.  

Although Whole Life policies were not created to function as an alternative banking system, if one examines the banking function of a traditional bank (and the true reason why people bank... we all need access to large amounts of capital throughout our adult life) and compare it the banking function with a Whole Life policy, you will discover a far more robust system for money that not only puts individuals and families first, banking with Whole Life (the IBC strategy) also provides long-term benefits for the economy with less of government meddling or "aid" from your local and federal overseerers.  Ultimately, the Infinite Banking strategy is about regaining your freedom from a top down system that doesn't ever want to be fully in control of your own life.  Think about it.

Elevate your understanding of money and banking, you will elevate your financial status.  No need to be a financial pawn.

To learn more about Infinite Banking, schedule time in my calendar at www.IBC.guru.

Thank you,

John Montoya

Five Reasons To Borrow From a Whole Life Policy instead of a Bank

Here are 5 of the best reasons to borrow from the insurance company against your Whole Life policy versus borrowing from a bank: 

* No application process. I ask for the money and I get it. I don't have to qualify...ever! 

* Instant liquidity of repayments. Every dollar I repay on my policy loan is instantly available to be borrowed again without application or qualification, as opposed to a bank loan where payments simply reduce the unpaid principal balance. 

*  Another huge reason for borrowing against your life insurance policy is the flexibility of the repayment plan.   This is especially important if you are business owner with cash flows that fluctuate monthly.  Re-pay policy loans based on your schedule, not the banks.  

* Privacy.  If you have kids to put through college, consider that your bank assets, and even your kid's 529 account, will account against them when qualifying for finanical aid.  You can pay the retail cost of college but wouldn't you rather get a discount?  Strategically placing money in life insurance contracts shields this money from prying eyes.  It also helps you in retirement because policy loans used for income are tax-free and won't bump you into a higher tax bracket.  Retirees with 401k distributions have to report taxable income that potentially reduces Social Security benefits.  Ouch!

* Uninterrupted compounding growth of your cash values.  Simply put, you continue to grow your wealth even when you take a policy loan to use somewhere else.  I call this "Dual Compounding".

Albert Einstein is noted for saying:

"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."

In summary, total control is in the hands of the policy owner.  You decide how much and when you pay back the loan.  For best results, don't "steal" (borrow without setting up a payment schedule) from yourself.  Maintain discipline.  Paying back your loan re-capitalizes the policy for future use.  

Let me know what questions you have about Infinite Banking.  You can find me here:  www.IBC.guru

You can also hear me talk about Infinite Banking on my podcast here:  www.TheFifthEdition.com

Thank you,

John Montoya

Here’s Why You Should Only Work with an Infinite Banking Authorized Practitioner

When you need to prepare your taxes, you go to your tax professional.

When you set up your living trust, you go to an estate planning attorney.

When you want to buy or sell a property, you go to a real estate professional.

Foot issues?  See a podiatrist.  Is your baby is sick?  Go to a pediatrician.  Kitchen remodel?  Hire a contractor that specializes in kitchens.  And on and on we can go.

If this sounds like common sense, it’s because it is.  The point is we seek out specialists in their field when we have specific goals we want to accomplish.  It’s the best way to assure that we get what want-- the best advice from experienced professionals.

When it comes to the Infinite Banking strategy, there are specialists across the United States who have completed the necessary training and been approved by the Nelson Nash Institute to teach and implement the Infinite Banking strategy properly.  You can find an authorized practitioner here:  https://infinitebanking.org/finder/

Here is why you should only speak to an IBC Authorized Advisor:

Whole Life insurance is a financial product.  Infinite Banking is a financial strategy.

There’s no end to the amount of incomplete information about life insurance on the internet.  

There are many life insurance options and no one size fits all.  Anybody who tells you should only buy a certain type of life insurance product probably isn’t qualified to be giving advice in the first place or have a professional agenda to steer you to something only they can offer.

The best life insurance product is the one that accomplishes an individual’s goals and everybody’s situation and priorities are different.  If obtaining life insurance protection is your goal, you should work with a professional who can educate on the pro’s and con’s of all the different life insurance products available. 

Pretty simple.

Taking it a step further, if you are interested in learning more about Infinite Banking, it’s important to know Infinite Banking can be accomplished with different financial products but none as well as a participating Whole Life policy from a mutual life insurance company. 

Definition of product:  an article or substance that is manufactured or refined for sale.

Definition of strategy:  a plan of action or policy designed to achieve a major or overall aim.

If you want to incorporate Infinite Banking into your personal financial picture, then you want a strategy, not a product.  To that end, you want a specialist who knows the field better than the rest.

In working with an IBC authorized practitioner, you’ll be working with someone who practices the strategy and can speak about their personal experiences.  They should be able to tell you exactly how they’ve used the strategy to build wealth.  If they can’t do that, they have not fully implemented IBC. 

Furthermore, any advisor can speak about a Whole Life policy but most advisors don’t even own a Whole Life policy let alone practice Infinite Banking.  Owning and practicing Infinite Banking with a properly designed IBC Whole Life policy is a world of difference!

In addition to the specific Infinite Banking training they receive, all IBC authorized advisors must own their IBC designed policies in order to be certified practitioners by the Nelson Nash Institute. 

   

It’s worth mentioning that not all Whole Life policies are the same and certainly not up to the criteria needed to be used for Infinite Banking.

Example, people who buy final expense whole life policies technically have a whole life policy but this is far different policy from the type of whole life policy an IBC authorized advisor would use for Infinite Banking.  Final expenses have little to no cash value growth and no flexibility or collateral capacity to use for banking purposes.

Another example are Gerber baby policies.  These are technically Whole Life policies but they are non-participating policies which means they pay no dividends.  They also cannot be used for banking purposes. 

Switching gears, it pains me to say that there are advisors who advocate and teach Infinite Banking but are not Infinite Banking authorized advisors.  They have not been interviewed by the Nelson Nash Institute, passed the necessary curriculum and gone thru the mentoring program to be approved as an IBC authorized advisor.   They contribute nothing to the community of advisors who have committed to upholding the highest levels of integrity to the public who are asking for the Infinite Banking strategy.

All IBC authorized advisors take very seriously a code of ethics to structure and implement only the correct type of Whole Life policies for the Infinite Banking strategy.  It’s because advisors were using the Infinite Banking name and peddling different recommendations that Nelson Nash created what was first called the Infinite Banking Institute, later changed to the Nelson Nash Institute by the board of directors to honor Nelson and his legacy.

My advice:  work with an IBC authorized advisor who is trained and vetted versus those who fail to meet the requirements and can potentially put you at risk by recommending policies that are not right for the IBC strategy. 

If an advisor is promoting IBC but is not a verified advisor on the Nelson Nash Institute website, you should ask him/her why that is.   

Action Plan:  3 Steps

1.      Connect with an IBC authorized advisor.  Get a high level overview and learn the basics of the strategy.  If it makes sense logically, request a customized plan.

2.      Complete a financial analysis with your IBC authorized advisor.

3.      Schedule an online or in-person appointment to review your IBC recommendations.  If the plan makes sense for you, start the underwriting process to implement. 

John A. Montoya

www.IBC.guru

JLM Wealth Strategies, Inc.

IBC® Authorized Practitioner

CA Life#0C42222

 

“Paying Extra Interest” on Life Insurance Policy Loans (Infinite Banking Concept)

Over the years one of the most frequently asked questions I seem to get from my Infinite Banking clients is how they can pay extra interest on their policy loans the way Nelson Nash, the pioneer behind the Infinite Banking idea, teaches it in his best-selling book “Becoming Your Own Banker”.

It’s a great question because Nelson Nash, the creator of the Infinite Banking Concept (IBC), had a unique way of teaching which a lot of the time incorporated euphemisms. 

First, what’s a Euphemism?  It’s expression used as a substitute for the actual thing.  For example, one might say “he passed away” instead of “he died”. 

“Paying extra interest” is the euphemism Nelson used to explain how to re-capitalize Whole Life policies when loans were taken. 

“Paying extra interest” in effect means sending larger loan repayments to accelerate the payoff of a policy loan. 

One of the unique things about policy loans is that 100% of the loan repayment automatically reduces the balance of a loan.   If you have a $10,000 policy loan from your IBC policy and submit a loan repayment for $500, all $500 is applied towards the $10,000 loan balance.

Not one cent first goes towards interest which is what you will be familiar with when borrowing money from a bank.   

In contrast, a bank loan will demand a payment schedule where the banks charge you interest first and then applies the rest towards the principal.  In this way traditional banks collect more interest upfront and delays the payoff of loans for as long as possible in order to maximize the interest collected.

This is why Nelson talked a lot about Volume of Interest being more important than the Interest Rate.  Check out a mortgage for the best example.  A “homeowner” might have a 4% fixed rate mortgage for 30 years, but are they actually paying 4%? 

Far from it!  We all probably realize the volume of interest on a mortgage is over 80% in the first 10 years.  If a person keeps and pays off the mortgage in 30 years, the volume of interest will eventually come down to the mid-30% range. 

Did the homeowner ever pay 4%... at any point?  They actually paid 1/3 of their mortgage in interest over 30 years. 

It’s financial deceit at the highest level.  And banks will do this with car loans, credit cards, personal loans, etc.  We should not think of banks as friendly institutions which is what Nelson really wanted you to know!  Banks want a pound of flesh and they do a masterful job of drawing out the interest on loans for as long as possible.

Understanding Volume of Interest is critical to your financial base of knowledge but unfortunately consumers are fixated on interest rate.

With IBC, the policy loans from Whole Life policies have a true Volume of Interest of 5% (the average borrowing rate from IBC approved life insurance companies) because it is a simple interest loan.  Every dollar repaid goes towards the balance with interest assessed at 5% at the end of the policy year, not upfront and certainly not compounding like a bank loan.

So if you decide to re-pay the policy loan on an 8% schedule, you’ll pay off the policy loan sooner.  This is good because it recapitalizes the policy making more cash value available sooner for the next use.  This is the first and most common way to “pay extra interest.”

Eventually when the loan is fully paid, you’ll have a good problem though.  You’re accustomed to making a loan repayment each month but now with no more loan balance, you have that extra cash flow from the 8% schedule of payments to do something with. 

This is where Nelson talks about “Overcoming Parkinson’s Law.” 

Simply put, most people will use extra cash flow to go buy something they don’t actually need.  Instead this extra cash flow should go back to the insurance company but now as premium to purchase Paid-Up Additions (PUA) rider. 

PUA’s turbo-charge the cash value right away.  The structure and use of this PUA rider is what sets an IBC Whole Life policy apart from any other type of permanent life policy.

The other way to “Pay extra interest” is to break up the loan repayment into 2 parts:

1. Schedule a loan repayment for 5% (you always decide the time period… for example 5% over 12 months or maybe 60 months, etc., you decide based on your cashflow!)
2. Any amount “extra”, you send a separate check to be applied towards the PUA rider.

Either way, you will accomplish “paying extra interest” which essentially is Nelson’s way of instructing you to be a disciplined saver and grow your wealth in the smartest place possible.

Benefits of IBC:

·       Safe from market losses

·       Available for any reason (investments or debt acceleration)

·       Always growing uninterrupted even with loans

·       Policy Loans are Tax-Free

·       Additional death benefit protection for loved ones

·       Shielded for college aid formulas

·       Protected from creditors/lawsuits (check your state)

Need a review of your policy or have additional questions?  Perhaps you’re ready for another Infinite Banking policy?  Many of my clients, including myself, have multiple IBC policies.

Schedule time to connect here:  www.IBC.guru

Thank you,

John A. Montoya

JLM Wealth Strategies, Inc.

Bank On Yourself® Authorized Professional

IBC® Authorized Practitioner

CA Life#0C42222

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. 

Best,

John

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.

john@JLMws.com

(925) 386-6639 Office

Authorized Advisor-Bank on Yourself®

CA Life#0C42222

DRE #01390017

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.

john@JLMws.com

(925) 386-6639 Office

Authorized Advisor-Bank on Yourself®

CA Life#0C42222

The Four Rules to Becoming Your Own Banker (Infinite Banking Concept)

Becoming Your Own Banker is a financial strategy that empowers individuals, business owners, and corporations to profit the same way banks do. This is accomplished by having access to your capital on your terms, not the banks. It also provides a way to grow your money tax-free without risk of stock market loss. And unlike a 401k/IRA government retirement account, the money is held in a private contract that can provide tax-free income at retirement.

If you follow these rules, you will eliminate your local bank and finance company from your life forever.


Rule #1: Think long range like a forester.

It's been said the best time to plant a tree was twenty years ago. So twenty years ago would have been the best time to think about planting. If you have the discipline to save money, now is the time to start your policy, not 20 years from now. Unlike a forester though, with the Infinite Banking Concept you can begin utilizing the benefits of your savings from the beginning because the IBC strategy provides liquidity while you are growing your savings. You can use the money for any purpose and without any conditions.

The money you save should last a lifetime. If you have a short term need for your money, the Infinite Banking Concept is not right for you.

Rule #2: Don’t be afraid to capitalize.

A customized dividend paying whole life policy is the best place in the world to have capital. It is insured from loss by the insurance company and has tax-favored status under the Internal Revenue Code.

Each year, the policyholder is contractually guaranteed to have an increase in cash value EVEN IF YOU USE THE MONEY FOR OTHER PURPOSES.

The #1 lesson to learn in building wealth is never lose capital. Every time you lose capital, you miss out on future opportunities. Don't be afraid to capitalize your policy.



Rule #3 Don’t steal from yourself.

You would never take a loan from bank and not pay the bank, right? The same rule applies to a loan you take from yourself. Let's take it one step further. If you knew you were going to re-capture all the interest you were charging yourself, how much interest would you pay yourself?

All that extra interest creates more capital in your policy. The more capital you create, the more opportunities you will have to invest.


Rule #4 Don’t do business with banks.

There are likely more banks than coffee shops on the main street of the town you live in and the tallest buildings are usually bank buildings. Doesn't that seem a bit odd to you? This is because the banking business is the most profitable business in the world. Businesses come and go, but the business of banking is eternal.

Only when you control your banking function will you be able to protect and grow your wealth safely and predictably through recessions and even depressions. If you do nothing, you will continue chase risk, jeopardize your financial future, and give the banks the interest on your money you would have otherwise earned for yourself and family.

Summary

My advice is simple. You can choose one of two options.

Think like a banker. Protect your assets. Pay yourself back and with interest. Become your own banker!

Or you can continue to be a pawn of your bank, finance company, and Wall Street.

The intangible value of Becoming Your Own Banker is incomprehensible. A whole life policy is a private contract with other free people and it precludes the necessity of contracting with the bank. It is your safe and predictable ticket to growing and preserving wealth now and for your next generation.



Contact me to learn more:  www.IBC.guru


I can customize a policy to fit your unique situation and advise you on how to implement Infinite Banking into your life. 99% of advisors in the financial community including CPA's and Certified Financial Planners do not have the required training and expertise to explain the benefits of the Infinite Banking Concept. You want to work with an expert in this field. As an authorized advisor with the Nelson Nash Institute, I encourage you to interview me and ask questions to determine how you, your family, and even your business can benefit from this strategy.


Thank you,



John A. Montoya

The Seen & Unseen of Bank on Yourself/Infinite Banking Concept

You'll want to take the time to read the intro and all the discussion thread banter.  Very informative.

http://enjoyyourmoney.blogspot.com/2010/03/infinite-banking-and-bank-on-yourself.html

Reading articles like the above always remind me of the very first conversation I had with Nelson Nash.  He schooled me and I'll never forget it.  In particular, he told me I was majoring in the minors.  Basically getting caught up in all minute details and missing the bigger picture.  It's easy to get caught up in forensics and analysis of a policy but in the end he recommended returning to the WHY (control the flow of your money) and refer to the basics. He calls it the Seen and Unseen of IBC.

1. There is no safer place for money.  No FDIC insurance needed.  Life insurance companies are solvent.  They must have more capital reserves than liabilities at all times.
2. The money is liquid. Access your cash value for any reason, any time.
3. The money is tax-advantaged.  IRS approved section 7702a.

For the most part, these characteristics are the "seen".  It doesn't take much study to know this about a whole life policy.  The "unseen" is how utilizing this very specifically designed policy will move you from a position of being a saver/borrower to saver/borrower and banker.

Banking is the most important business in the world.  All other businesses will come and go, but the business of banking is eternal.  That's why Nelson will instruct people to have two paychecks in life.  One from their job/business and the other from their banking business.  If they maintain only their job/business, they've giving the banker the other paycheck they could be earning.

People get so upset about the fatcats on Wall Street and the banking industry, yet they fail to understand why the fatcats are there in the first place.  It's because we outsource our individual banking function (give up control of the flow of our money to them).  Wall Street banks will never teach us to control the flow of our money (Be our own banker).  Doing so would mean an end to easy money.

Nothing improves in this world until people change the way their think.  The biggest secret is that we are what we think about the most.  When it comes to your money, my hope is you start thinking like a banker.

John Montoya

JLM Wealth Strategies, Inc.

(925) 386-6639 Office

Authorized Advisor-Bank on Yourself®