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

Comparison: Whole Life Policies and Tenet

Whether you care or not for the movie Tenet directed Christopher Nolan, it is for certain a unique film.

(SPOILER ALERT)

If you’ve heard somewhere that the movie is about time travel, it’s not.  At least not in the sense of jumping to points in time in the future, past, or even sideways (thank you Lost).  

Nope, this story offers something different.  In a word: entropy.

Generations into the future a scientist has invented a machine capable of reversing the flow of time.  It’s this machine that the future of mankind and the world hangs in the balance and it’s up to the protagonist to stop a doomsday event from happening.

The strategy chosen to combat the antagonist is a called Temporal Pincer Movement.

Essentially, there is a (RED) team in the present moving forward and a (BLUE) team in the future working backward to and from, respectfully, the same point in time.  

This gives the distinct advantage of knowing what will happen and how to achieve the outcome desired.

What’s the popular saying?  

“Hindsight is 20-20”

A temporal pincer movement gives the advantage of hindsight which is what makes the strategy so compelling and a juggernaut to overcome.

If that sounds a bit confusing, watch the movie.  As a fan of Inception, another film by Christopher Nolan, Tenet ranks up there with movies that are meant to be enjoyed multiple times.  

Here’s where Tenet is similar to a Whole Life insurance policy.

A Whole Life insurance policy is the ONLY financial product that gives you the hindsight of 20-20.  It works moving forward and backward at the same time.

I call this a “Financial Temporal Pincer Movement”.

Quite literally, the cash value in a Whole Life policy is INCREASING every year at the same time that guaranteed death benefit has been solved for at age 121, the last official day of the policy contract.  Once the policy is issued, the death benefit at the future age of 121 starts to unwind, or work backwards (entropy) to the original face amount from the policy issue date, or day 1 of the policy.  

Each year in a Whole Life policy is a reference point when looking at your own illustration.  The cash value each year gives the present value of the future death death benefit.  

The unknown variable is the year of your eventual passing.  The end of your life is the point the cash value then blossoms in value to equal the death benefit.  If you live all the way to age 121, the cash value has now become equal to the death benefit on the final day of the contract.  We call this Endowment.  

Essentially, what you desire to happen financially is set in a blueprint (fate, if you will) and the outcome is certain.  No other financial vehicle offers this.

What advantages would you have if you knew your financial fate 10, 25, or even 50+ years into the future?

How much of peace of mind would you have knowing that everything you wanted to accomplish (nest egg for retirement, guaranteed income options, a proverbial tax-free mountain of cash to use for any purpose) will be available to you no matter how the stock or real estate markets perform?

Do you have questions about Whole Life policies and Infinite Banking? Schedule time here.

Cheers,

John Montoya

Note, you may want to put on captions because there were points in the movie where you will attempt to read lips and rather than guess at what’s said and ruin the flow of the movie, captions will eliminate the need to wonder what was mumbled.  

IBC Q&A Mailbag: The Power of Zero (Review)

The following is an email exchange with an existing client:

Hi John,

I have read the Power of Zero book by Dave McKnight, along with listening to many of his podcasts. I seem to resonate with his approach to matters. Have you read, and are you a fan of his approach to things also?

 

Thanks. 

My reply:

I am familiar the book and movie.  The director, Doug Orchard, actually produced and directed two of the videos on my website.   

(The 2 videos are at top of the page here: https://jlmwealthstrategies.com/videos/)

 

I like the Power of Zero strategy with regards to how it applies to indexed annuities.  I do have a difference of opinion as it applies to IUL’s because of the increasing cost of insurance within those policies.  I don’t believe the industry does a very good job of disclosing the risks with IUL’s.  The only mention of risk to a prospective buyer seems to be that money can’t be lost if the market goes down.  This is a half-truth at best.

 

There are actual risk esposures IUL's have but they are usually never mentioned.  The cost of insurance in an IUL increases every year by a larger amount which poses a major problem during retirement years.  IUL are sold on the idea that the returns will be there, and while it is possible they could be, but it’s also possible they won’t. Then what?

 

For this reason, I would only recommend an IUL for two sets of people:

1) High net worth clients who can commit a minimum $20k a year while still maintaining diversified portfolio of other assets AND life insurance policies. 

2) Parents living with diabetes who cannot otherwise qualify for a permanent cash value policy.  There is an IUL only program specifically designed for those with diabetes, currently unavailable with Whole Life.

Outside of these two demographics of people, I wouldn't recommend an IUL because I see too many buyers of IUL putting the majority of resources into one IUL plan and little elsewhere.  It’s a recipe for disaster because here's what I know as an experienced advisor what go wrong with an IUL:

Here are 5 Perils of an IUL

 

1.  The IUL cost of insurance is based on annual increasing one year renewable term.  Cheap when young, cost prohibitive once a person hits retirement.

2.  Returns could be below illustrated.  The increasing cost of insurance will only erode returns further. 

3.  Planned premium funding falls off because life happens.  Examples include layoffs, an extra kid (or two!), unplanned college expenses, failing health, divorce, lack of financial discipline... even pandemics!  Life does happen and failing to maximize the policy contributions of an IUL has an adverse effect on the returns of the policy because less premium means less cash value potentially earning interest to offset internal increasing costs of the life insurance.  

4.  IUL’s never endow.  

Only Whole Life policies can endow---- this means the cash value is guaranteed to equal the death benefit by age 121.  The current cash value in a Whole Life policy is actually the present value of the future death benefit.  This is hard to grasp at first but it’s very powerful.  

Essentially, a Whole Life policy is reverse-engineered from age 121 with fixed premiums and a minimum guaranteed growth rate completely uncorrelated to the market or economy.  What this means is that what you want to happen, will happen. A Whole Life policy provides a blueprint guaranteeing policy owners that their policies will eventually grow to equal the death benefit—even if their not around to see it.  

Furthermore, the PUA rider in an Infinite Banking designed Whole Life policies speed up the process by turbo-charging the cash values AND death benefit at no future cost.   In comparison, IUL is a side savings account based on positive market returns combined with the rising cost of a one year term policy.  While it’s nice IUL’s have the potential for 1-2% higher average returns than Whole Life, returns are dragged down by the rising cost of insurance over time, the unpredictability nature of market returns, and lack of discipline to stick to the planned premium when life events invariably happen.)

Underfunded and/or poor performing IUL policies should not be the foundational basis of a financial plan because IUL's have no guarantee of performance.  Just a guarantee of zero AND a guarantee of increasing life insurance costs.  As you can guess, I like building a financial plan with growth guaranteed each year and guaranteed fixed premiums that combined create financial certainties... hence Infinite Banking designed Whole Life.

5.  Taking income from an IUL during years of low and no return makes the cash value disappear even faster, especially so when the cost of insurance is rising exponentially after age 65.  It's the triple whammy that can't be avoided: no return, loans coming out, exponentially rising cost of insurance.  (This perfect storm of risk is even more pronounced in Variable Universal Life (VUL) policies).  

For this reason, I mention an IUL is not suituable for middle class income earners because they won't have a fallback plan if the majority of their eggs are in this one basket.  There’s just too many perils for middle class clientele to navigate to make it their main strategy.   

Unfortunately, there is an army of inexperienced life agents and advisors touting an IUL as the best thing since slice bread, and worse yet, people show me their IUL plans that have been designed the wrong way because there is too much death benefit (which means higher commissions for the advisor and an increased likelihood of that IUL to fall short of expectations).

 

All this said, The Power of Zero with Indexed Annuities is an excellent way to go because there is no life insurance mortality costs to eat away at the returns and many indexed annuities can be purchased with no annual fees or if choosing an indexed annuity for income purposes, a guaranteed lifetime income rider that averages 1% per year which is an extremely low cost for the peace of mind knowing you'll always have an income.

 

My thoughts are if people really want "The Power of Zero" without any true downside risk (no market risk AND no rising mortality costs), then combine IBC designed Whole Life policies with uncapped Indexed Annuities.  You get the best of both worlds (upside growth and the IBC banking strategy) without taking any unnecessary risk.

And one more thing, remember that if you're doing Infinite Banking right, you will have more than one IBC designed Whole Life policy. 

We can discuss further if you like by scheduling time on my calendar here:

www.IBC.guru

 

Thank you,

 

John Montoya

Infinite Banking for your Kids

How would you like to help prepare and secure your child’s financial future for all stages of their life including college and all the milestone that follow? 

Not ever having to worry about whether your child will be beholden to banks for massive student loans, crippling credit card debt, or any other type of bank debt?

Instead you could give your child the ultimate financial gift. 

Put them in driver’s seat so they can re-write the financial rules to escape the bank-controlled money system that plagues families from one generation to the next.

It’s the so-called “Rat Race” for a reason. 

But it doesn’t have to be your child’s financial destiny. 

The truth is our kids are destined to follow the same financial path we do. 

If you borrow money from a bank from one car purchase to the next, finance your home from mortgage to the next, contribute to a 401k plan praying the stock market can consistently perform so you can finally retire (March 2020 has seen the market crash 25% because of the Covid19 crisis!), I’m going to tell you something that deep down you probably already know. 

You’re saving money in the wrong place! 

Worse yet, your kids will adopt the same or similar money habits from you when they become adults.

Undoubtably, you're a proud parent who wants the best for your kids.  Why pass on a lifetime of financial insecurity?

The challenge Middle Class America has is not knowing what we can do differently for our kids instead of the traditional options… like bank savings accounts and 529 Accounts.  These savings options are mediocre at best.

The big question is: how can you give your child the best head start in life so they can avoid repeating the same financial blunders you've made?  Yes, you!  We all have to own our mistakes in life so let's keep it real.

What I’m going to share with you will help you give your child access to a tax-free reservoir of wealth they can use over and over and over again…at any point in life! 

Not only can it help pay for college but for ALL THE MILESTONES in their life. 

From buying their first car, their first home, start or buy a business, the opportunities they'll be able to take advantage of is unlimited.  That's the power of IBC.  It puts those who implement the strategy in the position to be "Master & Commander" (great movie by the way) of their financial ship!

And IBC will even be there to providing TAX-FREE income in retirement, too.

It’s been called “the Swiss Army Knife of Financial Planning” because of all its uses. 

I’ve even heard the Infinite Banking Concept® referred to as “the black box secret for the ultra-wealthy” because affluent families use it TO HAVE ACCESS to cash reserves WHENEVER NEEDED and FOR ANY PURPOSE.  Plus money kept in these accounts allow families to transfer wealth from one generation to the next.

It's the ultimate wealth building secret

And for kids, the power of time and uninterrupted compounding growth is the perfect recipe to help them navigate their entire financial life. 

I call it the “Junior Estate Builder” and this plan is so simple you’ll be surprised to learn it’s worked for over 150+ years secured by the safest financial industry in the world.

It’s where I put my kid’s savings because I know it will be there for every big event in their life and I invite you to do the same for your children.

In the next few minutes I’m going to share how you can give your child the best financial tool to navigate their life. 

  

This simple, proven financial strategy is so flexible it can be used for any purpose no questions asked. 

Imagine your child having a place to grow wealth without ever experiencing market losses and economic downturns, political uncertainty and social upheaval, or any global event that cut an asset in half without warning.  

With the Junior Estate Builder, every year is a good year

I know it sounds too good to be true but it does exist and it's even written into the IRS tax code.  It just happens to have the worse name ever which is why I choose to call it the "Junior Estate Builder".

With this strategy, your child will no longer be beholden to banks for loans.  No more worrying about getting dinged on their FICO scores, and having to verify income or employment will be a thing of the past.

I can tell you it’s such a peaceful existence to never having to deal with bank loans, high interest rates, and onerous fees. 

Then consider what your child will do for retirement.  401k plans were never meant to be the primary source for income in retirement.  They are fundamentally flawed plans.  Think about it.

Money in a 401k plan is tied up for decades.  Early access is penalized and taxed.  

The only option for growth comes with risky and complicated market-based options with many hidden fees.  In truth, these plans serve Wall Street and the government better than they will for your child. 

Wall Street locks in the revenue for decades with no performance guarantees in return, then the IRS takes a sizeable portion in taxes every year for life. 

Is this really a good plan?  Is it really the best you can do?

It only seems that way if it's all you know!

Well, most parents only know about 529 Accounts too, and like 401k plans, these are severely flawed as well.  

529 Accounts put money at risk like 401k plans, can be used for only college expenses, and once spent will never provide any additional value or benefit to your child... EVER!  

In short, 529 Accounts are a risky, single purpose strategy with no additional value past college. 

The greatest benefit to the Junior Estate Builder is how it can be used to help pay for college, but more importantly, it can be used as a private banking system to accumulate long-term wealth during your child's life.

Imagine a multi-use strategy where your kids can re-use the money over and over again to acquire assets like real estate, or start a business, or perhaps buy an existing business so they can be their own boss.

They can also use the money you save for them to finance all the cars they'll ever own, maybe even put their own kids (your grandkids!) thru college...

Ultimately, it will even provide tax-free income in retirement.

Remember when I mentioned that the Junior Estate Builder is the “Swiss Army Knife” of financial planning?  This is a versatile, flexible, and predictable money system unlike the traditional bank and Wall Street system that holds you captive with your own money.

The sad truth is that traditional financial planning amounts to life-long financial servitude to banks and Wall Street because those institutions control your largest assets.  Congress writes the laws and changes the rules all the time.

Does it make sense to be penalized for early access and eventually get taxed on every dollar withdrawn in 401k/IRA accounts?  These plans are designed more for our government's benefit (great source of annual revenue) and the average American accepts it blindly because “it’s what everybody does!”

And this bank/Wall Street monopolized money system keeps you from discovering the truth about this strategy which hides in plain sight waiting for you to discover it.

It's the secret traditional banks and Wall Street hope you never learn about.

And keeping you in the dark is the best way to ensure your child will learn the same money habits you have now which keep you and your kids tied to banks and Wall Street in perpuity.

This is the financial destiny your child will inherit from you but the strategy sessions I offer will help you and your child change the course of your financial future by getting your child started on a path that puts them in the financial driver’s seat during their lifetime.

As a parent I know you have the best intentions  

I have no doubt your intentions for your child are no different than my parents had for me.

They did what they thought was best for me as a child and most families still do something similar.

For me, it was one those passport savings account books that are now a relic of the past, especially with interest rates at 0% these days! 

Back when I was growing up interest rates were much higher than they are now, so it was pretty cool to see the money my savings account grow at 6-8% each year during the 80’s. 

My parents were dutiful savers and thankfully that discipline certainly rubbed off on me.

Problem is despite my parents work ethic and discipline to save as much as they could for me, they chose accounts that conditioned me at an early age to think of banks as trusted institutions.

The de facto place to always save money.  How was I to ever learn otherwise?  I have a feeling you can relate.

Unfortunately, I had no Rich Dad or wealthy uncle to help me learn about money.
 

For this reason I went to work in the financial services industry after college.  Fast forward 21 years and I’ve tried just about every financial vehicle that exists. 

And of the places I’ve put money, there has only been one strategy and asset class that has worked like clockwork each year.  

This strategy has given me access to money tax-free to deal with financial curve balls as well as financial opportunities (the ability to purchase multiple homes, rental properties, an apartment complex, precious metals, you name it), and do so without ever interrupting the foundational portion of my net worth.  

I stopped contributing after-tax money to mutual funds that left me susceptible to tax consequences each year, including years when I lost money in the market. 

No more maxing out my 401k’s/IRA’s where I was putting my money in financial prison for 3 to 4 decades. 

I even stopped directing money to my kids 529 Accounts.

The more I realized how beneficial this strategy was for me, the more I thought how I should be setting up my kids with the same strategy for when they come of age.

The traditional advice of using 529 Accounts just didn’t make much sense compared to the alternative I had discovered for myself back in 2007.

What really drove home the point for me was my experience as an advisor and seeing 529 College Savings Accounts take massive hits when the market corrected from 2007 to 2009.

It wasn’t just 401k retirement plans that suffered during the last big recession, kids with their 529 accounts, especially those about to go off to college suffered as well.  We are witnessing it now again with the Covid-19 pandemic.

My experience as an advisor also helped me learn the other downside to 529 Accounts which is that not every child goes on to college. 

Money in 529 accounts are taxed and penalized on the earnings if not used for educational purposes.  No such rules or restrictions on a Junior Estate Builder plan.

This was the icing on the cake for me.  No 529 Accounts.  Instead I would set my kids up what I now call the Junior Estate Builder.

I’d give my kids the freedom of choice and direction in life without ever being hamstrung by banks, Wall Street, or even Congress. 

The truth about money is this:

The only fix is taking matters into your hands  

You cannot continue to rely on banks, Wall Street and Congress created plans to create the future you desire.

You have to OWN AND CONTROL your future and you have to teach your kids how to OWN AND CONTROL their future as well.

The Junior Estate Builder gives you the ownership and control with your own “privatized banking system” and it's actually quite simple.

Through the use private dividend-paying Whole Life contracts structured for maximum cash values, I create and OWN the pool of money I use to finance my cars, homes, make investments, pay my taxes… and yes, even to supplement my future income in retirement TAX-FREE.   

All of it is accomplished without ever needing to finance (borrow money from a bank having to agree to their terms), relying on Wall Street roller coaster, or lock up money in lobster traps (401k/IRAs) Congress creates to capture tax revenue each year when I retire until the day I day.

Everything it does for me, it will also do for my kids who each have their own contracts.

Quite simply, the Junior Estate Builder will do for my kids more than any 529 Account could ever do AND do better than any 401k plan could do.

The freedom of this strategy is going to teach them how to be financially independent from banks and Wall Street so they can live the life they aspire to without the financial obstacles that handcuff Middle Class America.

Most importantly, with the power of compounding interest and youth, my kids and yours will have the benefit of time to make even small amounts today go an extraordinaryly long way tomorrow!

Each of my 3 kids have their own Junior Estate Builder.  It’s where I direct their savings and each year their accounts grow larger and larger, just like the adult versions I have for myself and my wife where between the two of us, we have 8 properly designed IBC® Whole Life contracts and counting.  Including my kids contracts, our family has 11 Infinite Banking designed Whole Life policies we direct money to each year.

Think of that for a moment.

Instead letting banks and Wall Street controlling our wealth, my family has total control of a growing pool of money every single year that we can use for any purpose.  

Two simple reasons why this works so well:

1. These are private placed contracts backed by mutually owned (shares are not traded publicly) life insurance institutions that have paid dividends for 150+ years consecutively, even thru the Great Depression. 

2.  These plans are an uncorrelated asset class meaning it has no connection whatsoever to the stock market so will never suffer a market drop.

In fact, unlike Wall Street,  these financial institutions put their own skin in the game by guaranteeing a minimum amount of growth each year no matter what happens in the economy. 

I have the ultimate peace of mind knowing the money I put away from my kids will always be there for them.

I especially love that my kids' financial plan is now all-inclusive for any direction they choose to go as adults. 

Imagine the financial freedom you could be giving your kids where they have the resources to own cars, buy a house, start or invest in a business without the need to ask a bank for financial assistance. 

Attending college is an important milestone but as a parent I really believe we need to look beyond transitioning our kids from high school to college. 

Let’s face it, these days it gets harder and harder to get ahead. 

One thing that often goes overlooked is that the better prepared our kids are to transition to adulthood, the less likely we will have to support them financially in their 20’s, even their 30’s.

You’ve probably heard college graduates are returning to live their parents more than ever these days.

Marriage, having kids, and buying their first homes are being delayed later and later these days.

The number one reason is because they don’t have the financial resources to step out on their own.   

And the results have been proven to work over and over and over again.

So you may be wondering, if this is so great, why haven’t I heard of the Junior Estate Builder?

Now in the financial services business you probably realize Wall Street and Banks will do anything to manage your money. 

They’ve monopolized  401k plans and 529 Accounts to the point all financial recommendations narrowly focus only on stock market-based portfolios. 

For Middle Class America, these are the choices talked about.

That’s the biggest reason why the Junior Estate Builder is the best financial secret hiding in plain sight.

It’s not a Bank and Wall Street created product or service.  Quite simply, they can’t, don’t, or won’t recommend it because it directs money outside of their control!  Remember, it's a very specific type of dividend-paying Whole Life policy.  Furthermore, it has to be structured just right to avoid becoming taxable later in life.

By now you should know when money is locked into 401k/IRA plans, that money becomes tied up for life! 

When the need for money arises, where must a family turn if they are prohibited from accessing their own the largest asset they own?

Middle Class America is forced to borrow money from banks, of course!  They refinance their home if possible or rack up sizeable credit card debt that will take years to pay off.

It’s a system designed with purpose to keep you on that Bank/Wall Street treadmill.

And unless you do something different for your kids, this treadmill is all your kids will likely ever know!

But it doesn’t have to be.

You now have a choice to take action.

You can take the next steps to help your kids avoid the same financial pitfalls.

I’ve made getting started so simple and easy for my clients, that way your kids don’t have to be another financial statistic who don’t have a rainy day fund or have enough to retire on when they are adults. 

The best part? 

You will know down to the dollar and year, how your child’s plan will perform, you will finally have the missing piece that moves your child’s financial life forward from one milestone to the next because they will have access to money tax-free when and where they need it. 

To setup the Junior Estate Builder system correctly, you must be able to do 3 things:

1.  You have to be able to think long-term.  This is not a get rich quick scheme.

Remember, saving for college is one milestone but your child will have many more milestones ahead of them.  Give them the resources to prosper at every stage of their life.

2.  You have to have the financial discipline to save money consistently.  $100 a month is the minimum.  If your budget allows for more, you can add more.

3.  Put the plan on auto-pilot.  It won’t require any luck, skill, or guesswork on your part to be successful because the contract is has guarantees, flexibility, and access to cash whenever it's needed.

If you can do these 3 simple things, you will ensure your child the ability to take advantage of any opportunity life presents them.

OR...you can continue doing what you’re currently doing for your kids hoping the plan works and in the case of 529 Accounts, hope it’s utilized for college. 

I have no doubt your kids will be grateful for any amount put away for their future. 

I know I was grateful for what my parents saved for me, but if you’re the type of parent that really wants to give your kids an edge financially, you owe it to your child to see how this plan can work for them.

Here is the next step to take:

Visit my calendar and request a strategy session here:  www.IBC.guru

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

 

Contribute to your 401k If You Want To Be Poor & Make Wall Street Rich

“Contribute to your 401k” is not just the wrong advice, but exactly the opposite of the RIGHT advice.

Most people will believe just about anything if they hear it enough times. 

401(k)’s are a prime example.  Most people have been effectively educated (brainwashed) through endless marketing pieces, commercials, and retread financial advice from Wall Street paid financial advisors into believe that investing in 401(k)’s will help them prepare for a long and rewarding retirement. 

This notion of 401(k)’s being a good investment is without merit because a 401(k) plan provides participants without any option to turn their nest egg into a lifetime income stream.  Isn't the whole point of a 401(k) retirement plan to eventually provide you with lifetime income?   How can a 401(k) plan accomplish this goal when it can't even guarantee your asset from loss, especially when you're no longer working?  The answer is that 401(k) plans are designed specifically for accumulation, not distribution (withdrawals for income purposes).  

And as you will learn in a few moments, Wall Street stands more to gain with your money without exposing themselves to any of the risk you unnecessarily take by investing in mutual funds!!!  Are you getting the feeling yet that this "system" was created for their benefit instead of yours?

For those with only a more recent working history of the stock market, now consider the horror stories about investors losing 40-50% in the market crashes of 2000 and 2008.  Perhaps this happened to you?  If losing 40-50% of retirement asset isn’t frightening enough, now imagine it happening when you ARE retired?!?

The point of this article isn't to scare you aware from a 401(k). It's to get you running completely in the opposite direction!!  Just kidding, sort of... 

Joking aside, I would like to educate you with real numbers why you need to re-think your 401(k) contributions.  For the sake of brevity and short attention spans (myself included), I'm going to skip the first 2 points of contention I have with 401(k) plans which are 1) future taxes at unspecified rates and 2) limited or no liquidity.

Instead, I want to take a few minutes of your time to point out what is the biggest drag on your 401(k) while you are in the accumulation phase of saving for retirement because most people THINK they know, but after years of sitting down with people, I've determined they really have no idea!!!

This is mainly because since the inception of 401(k)'s, Wall Street has been able to deceptively hide the true cost of mutual funds and 401k plans.

Here is the dirty truth coming from no other than the founder of the largest mutual fund company in the world.  Turn away now or be prepared to be enlightened...

“Simplicity is the key to brilliance. It is not the daily increase but the daily decrease; hack away at the unessential. The height of cultivation always runs to simplicity.”  -Bruce Lee

Fees

PBS did an eye opening interview with John Bogle, founder of Vanguard, in February 2006, in which Bogle admitted that most mutual funds were terrible investments and that expenses and fees ate up to as much as 80% (yes, you read that correctly… 80%!) of investors' returns.

How does that work, you ask? Your expense ratio on your carefully selected equity fund is "only" 1.01%?

Let's take a look:
 

Frontline: So what percentage of my net growth is going to fees in a 401(k) plan?

Bogle: Well, it's awesome. Let me give you a little longer-term example. The example I use in my book is an individual who is 20 years old today starting to accumulate for retirement. That person has about 45 years to go before retirement—20-65—and then, if you believe the actuarial tables, another 20 years to go before death mercifully brings his or her life to a close. So that's 65 years of investing. If you invest $1,000 at the beginning of that time and earn 8 percent, that $1,000 will grow in that 65-year period to around $140,000.

So far, so good… $1,000 into $140,000 sounds terrific! But let's look more closely…
 

Bogle: Now, the financial system—the mutual fund system in this case—will take about two-and-a-half percentage points out of that return, so you will have a gross return of 8%, a net return of 5.5%, and your $1,000 will grow to approximately $30,000. One hundred ten thousand dollars goes to the financial system and $30,000 to you, the investor.

Think about that. That means the financial system put up 0% of the capital and took 0% of the risk and got almost 80% of the return, and you, the investor in this long time period, an investment lifetime, put up 100% of the capital, took 100% of the risk, and got only a little bit over 20% of the return.

WOW!!!! Perhaps you’ve been wondering why you can't retire at 65! If you don't understand the math, don't worry, my brain works best when I can see exactly how the figures add up (or in this case, bottoms out!)   So how can 2.5% in expenses and fees turn into 80% of my entire return that Mr. Bogle speaks of?

Here it is, all laid out for you in black and white.  The table on the left shows the growth of $1,000 invested by an individual at age 20 until his/her death at age 85, assuming 8% annual growth.

On the right, it shows what happens to that same $1,000 over the same period assuming a 2.5% annual cost, such as a mutual fund 401(k) management fee. Over the 65 years, these annual fees eat up a staggering 79% of what the investor would have earned with no management costs:
 

Growth of $1000 in 401k:  No Fees vs With Fees 

Left: $1000 Before Fees; Right: $1000 After Annual Fees 

At age 85, $1000 before fees grows to $160,682.  However, after 2.5% in annual fees that same $1000 is worth only $34,250!!

Are you waking up yet?  Have I caught your attention?

And it gets even trickier, if you can believe it because mutual fund investors and the investing public have been "educated" to measure fund management fees and operating expenses as an annualized percentage of fund assets, which makes the resulting expense ratios (the tiny numbers you see like 0.92%) seem almost trivial.

This is because expense ratios represent only about HALF of the cost of owning mutual funds.  You also need to factor in hidden portfolio transaction costs and sales loads which raises your expense ratio up to a full 2.5-3%.

(Full Interview can be found here: http://www.pbs.org/wgbh/pages/frontline/retirement/interviews/bogle.html)

Are you still excited about your 401(k)?  Hopefully you are coming to the same realization I made years ago which is:  A 401(k) is a horrible place to safeguard and grow your wealth.  

How many millionaires do you think retire by living off their 401(k)?  Do you really want to have Wall Street take 80% of your nest egg ( with the IRS taking 33% or more of the rest) over your lifetime because you failed to learn about better tax-favored alternatives?

If not, I encourage you to spend some time on my site to learn more about the safest place to build a foundation for your wealth.  Go to www.CashValueBanking.com.

One last thought while I still have your attention.  If you’re not blown away by how the effects of taxes, lack of liquidity, and fees will have on your 401(k), there’s one more thing you ought to know.

Aside from the fees Wall Street is charging you, there's a 100% certainty that the money in your bank and investment account is losing value each and every day even if your account balance is going up!!  If you're wondering how that's possible, we should definitely talk.

Best Regards,

John Montoya

Founder, JLM Wealth Strategies, Inc.

John@JLMws.com

(925) 386-6639