An In-Depth Breakdown of Privatized Banking aka Build Banking

My name is Brian Scribonia and on this episode of the Common Sense Financial Podcast at my firm we have created a system called Build Banking that uses a specially designed whole life insurance policy that is built on the inherent tax favored nature and unique capabilities of these policies. What is different with Build Banking is the design that allows for rapid cash accumulation with uninterrupted tax free growth while having access to cash without relying on banks or Wall Street. To understand and appreciate how bill banking works, you really must take everything you know and understand about life insurance and set it aside because a specialty design whole life insurance policy is unlike the basic concept of insurance that many people are familiar.

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And the whole teaching there is about preparedness and being ready.

There's a difference between what's real and what's true. You're listening to the Common Sense Financial Podcast. I'm your host Brian Scribonia. Thanks for tuning in and let's get into today's topic. Most everybody knows that banks use other people's money to leverage profits for themselves by converting deposits into loans. But the real engine under the hood of this process is something called fractional reserve banking. At an elementary level, the banking system uses spreads between interest paid on deposits and interest charged on loans to make a profit. And when a deposit is made into a bank account, the bank pays the depositor interest as payment to access the money that is then lent out to the bank's clients. On the surface, this seems like common sense, but behind the curtain, there's some interesting math. When you file the money, imagine for a moment that a friend hands you $10,000 and then asks you to return the money back to them in 12 months with an additional $100. In this scenario, you are essentially renting the $10,000 for the next year for $100. At the same time, you coincidentally have another friend who asks you for a $10,000 loan and promises to repay that loan in 12 months with $400 in interest. So breaking this down, you see that you rented $10,000 from one friend for 100 bucks and turned around to lend the $10,000 to another friend, charging them 400 bucks. You have no personal investment in this transaction other than the hundred dollars. And in 12 months you have $400 for a 400% profit. That is the front stage view of how banks work. But now let's go backstage on this. When a deposit is made, the money is loaned out to another, who then deposits those dollars into other banks. And this makes for some interesting math. As money is deposited and lent out, those same dollars are deposited and lent out multiple times. Acting as a money printing machine, the money is multiplied with every deposit from one bank to another as your deposit appears in your account, while the next person shows the money in their account and the next in their account. And this is repeated over and over again. What is crazy about this is that it's perfectly legal and it's known as fractional reserve banking. And fractional reserve banking is a system in which banks are not currently required to hold any reserves to cover their customers deposits. They are authorized to lend the entire deposit while keeping the original deposit on the books with no money backing the numbers on the screen. And the result of fractional reserve banking is the expansion of the money supply with each deposit as new money is formed out of thin air than circulated within the economy. This increased money supply contributes to inflation and comes with the potential for a serious problem for depositors if there's a sudden demand for withdrawals, considering banks do not have the reserves to cover the demand. Silicon Valley bank recently found themselves in trouble and were unable to cover their liabilities, leaving depositors relying on the government to bail them out. Which leads to an even bigger issue with the FDIC. According to Demonocracy's website, the FDIC has an estimated 26 billion with a B of insurance funds available. While There is over 9 trillion with a T in bank deposits, that's a serious gap in insurance coverage, leaving the entire system relying on money floating and not being needed all at once. So this may be something to consider the next time you deposit money into your checking account and determining how much money to store in a bank. Now, it's not necessarily realistic to think we can bypass the banking system entirely though. New blockchain Technology is in the works. There is a way to take control over how you save and store money. For years we have been educating people about privatized banking and designing strategies helping clients take back some control of their savings by creating their own personal banking system. At my firm we have created a system called build banking that uses a specially designed whole life insurance policy that is built on the inherent tax favored nature and unique capabilities of these policies. What is different with build banking is the design that allows for rapid cash accumulation with uninterrupted tax free growth while having access to cash without relying on banks or Wall Street. To understand and appreciate how bill banking works, you really must take everything you know and understand about life insurance and set it aside. Because a specially designed whole life insurance policy is unlike the basic concept of insurance that many people are familiar. As we already discussed, banks rent money from one person to lend to another person or business, and it was that 400% profit that we were referring to. Using a build banking strategy, you have a similar capability to borrow money from the insurance company just as a bank borrows from their depositors to leverage growth outside of the policy. Consider the $10,000 example from earlier with a few tweaks as it applies to build banking. You receive a loan from the insurance company and let's say 5% and assume that growth inside of the life insurance policy is around 4%. On the surface, it's presumed to be a net cost of 1%. But let's look a little closer at the math. Let's assume the policy has a cash surrender value of $50,000. And when you apply the example of 4% to the growth, you have $2,000. The loan of $10,000 at 5% equates to $500 in interest, which is still a $1,500 net gain. Now consider the opportunity to now be able to use that $10,000 to make an investment outside of the policy. So that way you have the internal rate of return of the policy and the opportunity for an external rate of return doing something else. Now, there are many different types of contracts and there are strong opinions about how they work. But as you can see with my example, there is more to how life insurance works than what many people seem to realize, which makes the conversation around life insurance a bit tricky. A specially designed contract is engineered to rapidly accumulate cash, enabling the policy owner to access the cash values for banking purposes. Now to be clear, the term banking as I'm referring does not suggest that a policy is an actual bank. The term simply represents A process of saving or borrowing money that most people associate with banking activities. People use banks every day, making deposits and paying bills from those accounts. It's a continuous process of earning, spending and replenishing the supply of money. It's like filling up a gas tank and driving. You must keep that tank full to have the ability to keep driving. And when you think about the process for making big ticket purchases such as a new car, home improvements, or maybe a child's education, you find that you are either saving money over time to make these purchases, or you borrow money from a bank to fund these types of purchases. But regardless of how you approach these big ticket items, one thing is for certain. You will accumulate money and then you will spend it, or you'll borrow money, then pay the loan over time. Either way, it's a zero sum game, considering all arrows are leading to zero and requires a continuous need to earn, spend and replenish your money supply. It's a hamster wheel, and with every dollar spent, the opportunity costs become staggering. The idea of build banking replaces this traditional banking method with a specially designed life insurance contract to help create a system that could help recapture some control of this money you would otherwise spend. Now inherent to a whole life policy, policy owners have access to money through policy loans. These loans are collateralized by the policy's cash surrender value and death benefit, allowing the cash value to remain inside the contract and continue earning dividends and interest. Accessing cash through a policy loan allows for uninterrupted compounding growth of your money inside the contract and allows for money to be moved in and out of the contract over time. It's important to note that not all policies are the same and the loan features can vary greatly from one policy to the next. So be sure to work with somebody who is experienced with these designs and don't just assume a contract you already own can function in this manner. Of course, loans are charged interest and insurance companies aren't charities. But the benefit of using a specially designed life insurance contract is the ability to have your money remain in the policy and continue to grow uninterrupted while simultaneously using a policy loan from the insurance company to access money for use. Now, a business owner has a greater advantage using build banking because they can leverage the policy loan to invest in their business, creating both an internal and external return using the same money as described earlier. The other advantage is the ability to deduct interest charges while having the cost recaptured through the policy's growth. The management of a policy loan is very important considering since the insurance company doesn't force a repayment amortization, the insurance company charges interest annually and if you die or were to surrender the contract, they deducted a loan plus interest before proceeds are paid out. In other words, they know the loan will be repaid, so they're not necessarily concerned with whether you make an actual regular payment towards the loan, which is a huge advantage to the policy owner, allowing control of how and when loans are repaid. The use of specially designed life insurance contracts. They do have limitations and there are costs involved. It's not a unicorn, and it's why it's important for someone considering the strategy to work with a seasoned financial professional who looks at their entire financial situation before making recommendations. You can learn more about Build banking by visiting buildbanking.com that concludes today's podcast. I am Brian Scribonia. Thank you for listening to the Common Sense Financial Podcast.

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Securities offered only by dually registered individuals through Madison Avenue securities llc Member FINRA and SIPC Advisory Services offered only by dually registered individuals through Scribonia Wealth Management, a registered investment advisor. Tax Services offered only through Scribonia Tax Consulting Mass does not offer build banking or tax advice. Scribonia Financial Group, LLC Scribonia Wealth Management LLC Scribonia Insurance Services, llc, Scribonia Tax Consulting and Build Banking are not affiliated with mask. Scribonia Wealth Management LLC is a registered investment advisor. Advisory services are only offered to clients and prospective clients where Scribonia Wealth Management LLC and its representatives are properly licensed or exempt from licensure. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying ability of the issuing carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual situation. Build Banking is a DBA of Scribonia Insurance Services, llc. Benefits and guarantees are based on the claims paying ability of the insurance company, not FDIC insured Results may vary. Any descriptions involving life insurance policies and its use as an alternative form of financing or risk management techniques are provided for illustration purposes only, will not apply in all situations, may not be fully indicative of any present or future investments and may be changed at the discretion of the insurance carrier, general partner and or manager and are not intended to reflect guarantees on securities performance. The term Build Banking, private banking alternatives or specially designed life insurance contracts are not meant to insinuate that the issuer is creating a real bank for its clients or communicating that life insurance companies are the same as traditional banking institutions. This material is educational in nature and should not be deemed as a solicitation of any specific product or service. Build Banking is offered by Scribonia Insurance Services, LLC only and is not offered by Madison Avenue securities, llc. Our firm is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the US Government or any governmental agency. The information and opinions contained herein provided by the third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. References to Build Banking, private banking alternatives, or specially designed life insurance contracts are not meant to insinuate that the issuer is creating a real bank for its clients or communicating that life insurance companies are the same as traditional banking institutions. This material is informational in nature and should not be deemed as a solicitation of any specific product or service. Build Banking is not FDIC insured. Build Banking is offered by Scribonia Insurance Services, LLC only and is not offered by Madison Avenue Securities, LLC nor Scribonia Wealth Management, LLC.