In this brief dialogue, Speaker A and Speaker B discuss the flawed mathematics used by proponents of the infinite banking strategy. Speaker A notes that advocates claim the strategy still yields profit despite questionable numbers, while Speaker B bluntly states that the math is wrong. Both agree that the financial arguments presented are misleading and based on bad calculations.
I've seen proponents of the strategy say, well, let me show you how you actually still make money because they're wrong.
They're wrong and they're using bad math.
I agree. But it's shocking to me that people go out and say with those types of numbers and say this still—
that what they're saying is compound interest versus amortized interest, which is not factoring in opportunity cost. It's misleading. It makes us all look bad. And yet majority of people that teach infinite banking are talking about that. I just want to go back to the addressing the 4%, 5%. You're an idiot if you're putting your money in a 4% account, borrowing at 5%, and thinking you're ahead long term. My, my belief is over time, if set up and used properly, which I know is a big if, Jim, is that there's other benefits to that 4% that are not being factored in. You could just look at the cost of insurance and the tax, tax-deferred benefit, because in a savings account you have to pay ordinary income tax. And so just factoring those two alone, gets you over in that equation more than 5%. But I'm saying all the other benefits that I listed are things that we need to factor in. And you could look at them as maybe liabilities, as extra costs. I see them as, as, as an amazing asset that's only going to get more valuable in the future. But again, like I like in my permanent policies, if I didn't want to fund, I could reduce, pay up my policies and never have to pay again. And it doesn't blow up in my face. So again, I maybe I might be talking because of, of a, a segment, but I think overall on TikTok and all these people that are like pitching infinite banking, they're us— like statistics will say that they won't be in the space. Over 90% of people will fail. And so they're selling these things, they're over-obligating in these policies that are not well designed. Their agent's not gonna be around. And even if they were, they weren't gonna be that helpful cuz they don't know what they're talking about. And people are then buying cars and pay like, They think they're getting rich by going on vacation, which is bad math. And so overall, infinite banking has been pitched really, really poorly. But that doesn't— it goes back to the credit card example that I mentioned. It doesn't mean all credit cards are a scam, but overall, if we could go without credit cards, I think America would be better off.
