How To Choose Your Infinite Banking Strategy (2025)
This is a YouTube video titled "How To Choose Your Infinite Banking Strategy (2025)" created in August 2025. The content features Denzel Rodriguez delivering an in-depth monologue about infinite banking strategies, whole life insurance policies, and financial planning. He shares personal experiences with clients, discusses policy design and communication systems, and explains his own approach to funding and leveraging life insurance for wealth building. The video is educational and motivational, aimed at helping viewers understand and implement infinite banking concepts effectively.
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To the whiteboard. I'm gonna give you some numbers, bit of an example here, what we're working with. And I'm going to share with you some of the most popular strategies that are talked about online. Whether someone is presenting real numbers or they're giving stories or they're explaining their philosophy in terms of how they use a whole life insurance contract, a whole life policy template, the different things in their, in their financial life.
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To make it better, to improve cash flow wherever it may be. So these are going to be the most popular ways of using a whole life insurance policy to practice the infinite banking strategy or strategies. Because there's different things now in the marketplace. There's a lot of different ideas, some good, some interesting, some maybe theory based, some with more credibility than others.
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And the way I listed them at the top, I have my particular strategy as how I'm using whole life policies for my personal and business finances. And then I'm sharing with you the most popular ones I've seen online that vary from simplicity to the most complicated. So starting at the top would be the most simple and then as we go through, right. These would be the most complicated out there. Meaning for a new person, not only do you have to learn what infinite banking is and how does a whole life policy work and all the intricate pieces as a, as a consumer, as a customer, then you have to find, you know, the right person to help you to build the system, design the policy.
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So let's say you get past all that and then to actually implement the strategy is a whole nother ball game in and of itself. And that can come with a level of complication which can ultimately lead to failure, which I've personally seen with some of my own clients. So this is me being fully transparent, saying that, hey, not every one of my clients or audience that follows me is successful in doing some of the strategies that I'm talking about.
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That doesn't mean I'm gonna stop, I'm not gonna stop throwing my seed, right. I throw my seed and sometimes it lands on good, solid ground and, and sometimes it lands on undisciplined, rebellious ground. And that's talking about you guys, people that follow my channel, that initially when we interact, there might be some headbutting, maybe not necessarily arguing because I've never argued with a client over the phone, but sometimes there's a headbutting of ideas. So they have a certain idea that they're coming to me with. And obviously I've got math that I'm using on their ideas and while simultaneously revealing what I'm personally doing. At the end of the day, the person that actually reaches out to me, that desires to be a client, they're interested in something I'm doing right, and they want to be a part of that, they want to benefit from that in some sort of way way. Right now what can happen is we, we have our own say, expectations and sometimes the way that I speak to my clients, the way that I present ideas may not meet their expectation. Maybe like, oh dang, I didn't know that. That math didn't math out the way that I mathed out. Like, I was like, well, you're not factoring in this, you didn't factor in this, you didn't factor in that. If we factor in these key risks right here, if we factor in what if scenarios, if we factor in what if this doesn't work out, then what are you left with? You're left with a failure, right? In your strategy. You're left with not knowing what to do. And ultimately that leads to you disconnecting, say from me, the coach, your agent, and falling into, you know, victimhood, falling into whatever spouse says, right? Whatever your friends say, whatever your co workers say. And it ultimately leads to a failure type of a strategy. I have two scenarios in my six year career where two people have canceled their whole life insurance policy, right? One of those people canceled their life insurance policy on a child, right? So they were funding a policy on a very, very young child, I think maybe like 2, 2 or 3. And then they canceled it, they stopped it. Why did that happen? Well, number one, that was very early in my career. There were some things that maybe didn't get expressed or taught or maybe I didn't provide enough education. So holding myself accountable, where it's like, okay, maybe I didn't know enough to help that client, even though they wanted to work with me, and even though we went through the process and designed a policy and whatnot, it wasn't strong enough education for them to have a conviction to keep that policy in place. So ultimately that led to a failure. And on top of that, there really wasn't a strategy with that particular policy. It was just a matter of saving money in a whole life insurance policy that's going to grow tax free, guaranteed for the rest of that child's life. And that policy can be used, say years down the road, right? We're talking 10, 15 years down the road. They're only paying in like $500 a year, five, you know, thousand, nothing Crazy, very low dollar amount. So when something like that happens, what I didn't know at the time, in hindsight, what I see now after working with someone, many different families, is that particular family did not have the capacity to think that far out. 10, 15, 20 years, when this child is 2 years old, if I start saving money into this asset, $500 a year, thousand dollars a year, whatever it is, 20 years from now, when they're 21, 20, 19, 18, however many years out, that they can use that policy to finance their first car down payment, to possibly finance their first down payment on a home, to possibly finance the upfront capital to start a business, start a YouTube channel, start a online business of some sort, an E commerce store, and that would give them that upfront capital. But that family did not have that capacity yet to think that far out. So if I was to do it all over again, I probably would still write the policy. Because the value of protecting your child, right? Having a death benefit on your child is still extremely valuable. But what I would have changed is the type of product. So maybe I, in that case, if I can understand what the client's current capacity is and education and whatnot, maybe. I just want to check something real quick. I think I just paused. Okay. No, I think I'm good. Give me a comment real quick. Got 21 people in the house. Just want to make sure I'm. I'm good. I just froze for a second. I think I'm good. I think I'm good. Okay, so back to my point, the only thing I would change differently if I had to do it all over again with that particular client is I probably would have just wrote a convertible term life insurance policy for that family on that child, which is more of a. It would have been a much cheaper payment, let's say a cheaper upfront cost, and the sole focus would have just been death benefit. And maybe as they built more discipline and education around the strategy, then they say, well, hey, at any point we can convert this term to a whole life to start building it for some of the different methodology here. So that's one example of a failure.
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Another failure example. This is less of a failure. This is more of just a lack of communication between me and the client. And this is something that I've just learned that just comes with hindsight. Like, I would have never known that until now, going through the process. So I'm dealing with a client right now that I've been serving for years, since 2019, been a faithful client.
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There's been gaps where the client and I did not speak for a period of time, and they put themselves in more debt, and then they reached back out, and then we were strategizing, paying down debt. So this is a client 2019, that initially found me on YouTube. And their primary goal was to pay off debt, save money, do the infinite banking strategy. We literally did all those three things. They radically paid off debt extremely fast. Using the velocity banking concept, we were funding a life insurance policy anywhere from like 12 to, like, almost $20,000 a year max. Funding a policy faithfully, consistently, each and every year, we're borrowing from the policy, make different moves, pay off different debts, take care of different expenses, right? This particular client, I was communicating with the husband only. Husband implies there's a spouse.
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From 2019 all the way to 2024, I've never communicated with the spouse. So we got a husband and we have a wife. I never communicated with the wife, only the husband. The husband is the head of the household. He makes majority of the financial decisions. So I thought, okay, financial decisions made by him, head of household, the man of the house, okay? Now, one thing that I've learned over the years, working with grown men and grown women, okay? And when I mean grown, I'm talking not just in age. I'm talking maturity. I'm talking been through life, been around the block, gone through divorces, been married, have had kids, has had lots of debt, has seen life, okay? A grown adult. Those of you that are watching, you know who you are. You are a grown man. You're a grown woman, okay? I'm 28 years old. I started my journey at 22, 23 years old. There are certain dynamics that I just did not understand until now. Now I am 28 years old. I am engaged to a woman that's going to become my wife. I now have a home. I have debt on this home, right? I have more responsibilities. I am becoming the man of the house, right? The head of the household. And yet there are still certain things that I'm learning. That dynamic between man and woman, right? What decisions get made, what certain compromises occur, et cetera, et cetera. So with this particular couple, right? Again, talking to the husband, from 2019 all the way to 2024, we've been funding a policy faithfully, paying off debt faithfully. And then 2024, between end of 2023 and 2024, the client, the husband, started to stop paying into his policy on time. It started to form a pattern where he wasn't, like, consistently funding the Policy, he was waiting and then the policy would go into the grace period and then eventually go into lapse pending, right? Policy has never lapsed, but it was in lapse pending, awaiting a payment and multiple times it was like I had to re educate the client on why they had this asset in the first place. So ultimately it's gotten to the point where we are now making the last payment on his policy, which is occurring over the next few days. Meaning he's never going to pay in another dollar into this policy.
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Now that's going to come with certain cons, some negatives, right? If we're no longer funding a life insurance policy, it's like we're no longer saving money, right? That's basically what has concluded for this particular client. They believe that they have created enough assets or around themselves they're debt free, they paid off debt, they believe that they're, they believe they are self insured, right? This is coming from the wife whom I never spoke to. She believes that they are self insured, which is a statement that's simply not possible. It's impossible to self insure yourself. Either you have insurance or you don't, right? Either you have health insurance or you don't. Either you have homeowners insurance or you don't. It's impossible to self insure, right? Even if you're someone that owns your home outright, right? And because you own your home outright and let's say you got a bunch of money in the bank, okay? And you say, you know what, I'm going to do away with homeowners insurance, I'm just not going to pay for homeowners insurance anymore because I have X amount of dollars in the bank, X amount of dollars in assets, X amount of dollars in guaranteed income for life and a paid off home. So I'm just going to do away with just not paying that couple grand on homeowners insurance, okay? And then if something happens and the house burns down and you don't have homeowners insurance, it is up to your responsibility to insure and protect the home. So what would happen is you have to pull from another asset, another vehicle to replace that entire home. And what we often don't run the math on is what does that actually, what is the true cost of trying to self insure yourself as it relates to your life. So if something happens to either of the spouses and they decide to remove the cost of life insurance and then that person passes away, okay? Now it's up to the wife to liquidate assets to Replace some or all of the income that that spouse was bringing in.
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And depending on how much time we have on earth is there's certain things that are just unforeseen that we're just not running the math on to calculate which is again, that comes with certain negatives. If we believe that we can self insure ourselves, which I don't think is possible, either you are or you're not.
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And then if you're not, then you have to understand that you're going to have to pull from something to cover that particular tragedy or expense. So in this case, we are now paying the last payment into the policy and we're doing what's called a reduced paid up option, which is something that exists within a whole life insurance contract that allows you to remove the cost of insurance.
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And this was our like go to option because the wife actually wanted the husband to cancel the life insurance policy. Which I had to like really like put a lot of time and effort to like educate and say, hey, wait a second, like as your coach, as your agent, as your advocate for your legacy financial wealth, generational wealth building, you are grossly underestimating the value of this product. If you cancel it. We're talking about something that you've been overfunding for nearly five years. There's over fifty plus thousand dollars in cash value built up. We're talking about a multiple six figure death benefit. If you cancel this policy, it's as if you had a rental property that's about to be paid off. It's cash flow positive, you're getting tax benefits, tax deductions, right? And right before you pay off the rental property, you voluntarily put that property into foreclosure. It's like, who on earth would voluntarily put any one of their assets into foreclosure by just stop paying into it. Like you have a rental property, it's cash flowing, it's doing well, right? And you're about to pay off this property, it's got a ton of equity in it, right? You're getting tax benefits. And then you just decide to stop making mortgage payments and let it go late, let it go into default. And now you're in foreclosure, you've got the money. It ain't like you don't have money. It's like, like in this example, you've got the money, you got the cash flow. Why on earth would you ever stop funding your rental property? Why would you ever stop paying the mortgage payment on a rental property? Worst case scenario, you sell it but you don't let it go into foreclosure. And that's equivalent to canceling a whole life insurance policy if you've been funding it for years. One of the things that you can do is a reduced paid up. If things got really bad financially in this particular case, with this one client that I've dealed with, I've learned that in hindsight, I have to communicate with the husband and the wife because even if the husband tells me I am the man of the household, I make the decisions and I take that at face value. But then five years later, wife has the influence to tell you to cancel an asset in the portfolio that's going to create generational wealth. Because we're not even thinking about the unborn people in our family. We're not like, do you understand how valuable it is for an unborn individual in your downline to benefit from your wealth? We're talking multiple six figures. Even if you never spend that money, but your children's children get to spend that money, you radically shift culture in your household for the better. That's what's at stake here. And if you cancel an asset like a whole life insurance policy, that's what's at stake. And all it, all it costs you is a couple hundred dollars or a couple thousand dollars a year to maintain it. But when we don't have the education, when we don't know what we don't know, what does that ultimately lead to, leads to failure, leads to destruction, Right? So I'm taking it upon myself to double down on education, to take extra time with clients, to make sure. Wife, do you understand what we're saying here? Husband, do you understand what we're saying here? Are we ready to move forward? I'm willing to have two and three extra phone calls before I write any policies moving forward on any one of my clients because of hindsight, because of what I'm experiencing now. This is the very first time that I'm experiencing a client wanting to voluntarily foreclose on their whole life insurance contract because their spouse said to without having any fact.
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That's an incredible amount of influence. So I've learned, oh, Denzel Napoleon Rodriguez can't compete with my client's spouse whom they go to bed with at night, every night. I can't compete with who you sleep with at night. No way, no how. It's just not going to happen. So you know what? I got to get spouse on board. I got to get her educated. I got to get him fully educated them on the Same path to understand, hey, not only is this asset benefiting you while you're living, but it's going to benefit your spouse when you graduate Earth and you're no longer here. And not only is it going to benefit your spouse, but it's also going to benefit your children. And not only is it going to benefit your children, it's going to benefit your children's children's unborn children. Like, that's incomprehensible. The value of this asset, of this strategy, what we're talking about, incredible. Now I recognize I've never talked about it like that before because I never thought I needed to, I guess. We've always been so focused on the cash value. We've always been so focused on the here and the now. And I, and I get that. And I think there's a level of importance, right? But when you can also have a level of conviction, like, no matter what, I'm not destroying this asset, right? Like I'm not going to just voluntary foreclose on my house. Like, I want to make sure I keep it going and running and operating smoothly. So those are the two examples. We're going to take it to the whiteboard here. Here's a case study. We have someone making 6,500amonth, net take home expenses are 4,550. We have a total debt of $9,000. Not a whole lot of debt. They're not a homeowner. And we have a cash flow about 1,950. So some of the numbers that I gather before I even put an infinite banking strategy in place, okay, this is a client that is in the process of putting a policy in place, right? So some of the numbers that I pull from them is I take their cash flow and I times it by 12. To understand how much free cash flow do we have available to fund this particular strategy.
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So cash flow times 12, 1950.
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Times 12 is $23,400.
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Then what I do is I take their cash flow in a year and I times it by 2/3. This is the same formulas that I use for velocity banking to help determine how we're going to make a chunk payment to eliminate debt. I use the same method in terms of how we're going to fund a life insurance contract. So if they're cash flowing 23,400 a year on average, using conservative numbers, and 2/3 of that is 15,444, right. Then I'm educating the client. I'm saying, look, if we try to fund a policy at 23,400, that would be extreme, extremely aggressive.
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You understand that you're taking a hundred percent of your cash flow and you're putting it into one basket. Doesn't really make full sense to me.
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So I express that to them. So then I say, well, if I took two thirds of my annual cash flow per year, 15,444, and I say, this gives me a baseline, right? This gives me a foundation that this is a number I know I can do because I cash flow Significantly more than 15,444 in a year. Then the other number that I'm grabbing is I'm also finding out with the client, how much are they saving per month? Per year. So part of this, 4,005, 50, they are automatically saving $500 a month.
Okay.
So we actually included of the expense, 4550, their cost of living in there. We've included that every time they get a PayCheck, they automate $250 per paycheck. So that's $500 a month. That's just automating going into a high yield savings account. So 500 times 12 is 6,000 a year. So there are three numbers that I gather when I'm talking to a client, one of you guys watching my YouTube channel, a follower, anyone that comes into my ecosystem when we get on a phone call together, there's three numbers I'm trying to figure out before we implement the infinite banking strategy. Infinite banking concept, right? Which is what is the low number? What's the number I know I can do no matter what with my eyes closed, that this will get funded. So when we look at, okay, a very low number would be whatever you're saving per month, because it's something you're already doing. So I'm implying that in this case study here, and assuming for you that we already have a discipline of saving money, I would say in order for any infinite banking strategy to work to its full extent, I believe personally, you need to have the discipline of already saving money on a consistent basis. And that money is going into a separate account, savings account. There's some automation involved. I believe if you already have that discipline, you are on your way to successfully implementing one of these strategies. So in this case, our low number would be $6,000.
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Because they're already doing it. It's already accounted for in their expenses. And then their goal number could be two thirds of their annual cash flow per year.
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So maybe we. So sometimes I'll even Underestimate and just round down, say, okay, our goal number is 15,000. And then because of how we can design and structure a whole life insurance policy, we can design it in a way that we can grow with the policy. Which leads to my third number being the max number. What is the max dollar amount that I want to be able to pay into this policy in any given year for the funding duration, right? So when I'm talking to the client again, this comes with getting to know you more. This is a type of person with a military background, high discipline, very motivated. They have a desire to increase their income. They have a desire to succeed. They have a desire to build a business. So knowing those details about this person and about you watching right now, I can then propose, hey, today your average cash flow in a year is 23,400. But I'm pretty sure you and I can make a strong argument that this income is going to increase, right? We're dealing with a person in their mid-30s, right? Like 35, 36 years old, right? So we're still young, healthy, motivated. In our producing prime years, their income is going to go up. So then I can say, well, we can design a policy where we can max fund up to 23,000 a year. So, meaning my required low number, right? My low number would be the requirement, no matter what happens, I get 6,000 a year into my policy. My goal is to save 15,000 a year, right? So we're increasing the savings number to implement this particular strategy, 15,000 a year. And then we're saying, hey, Max, I should at some point, even now, be able to max one up to 23,000 a year into this policy, right? So as you're watching, you want to get these three numbers locked in for yourself. Denzel, here's my low number. This is what I know I can do. This is my goal, and this is my max number. If you design a policy that way, you are accounting for ups and downs. You're accounting for the fact that, hey, there might be a down year, there might be a death in the family, there might be a tragedy that occurs, There might be a car accident, there might be a storm. That.
That.
That happens and totally drains my cash flow. So if it totally drains my cash flow, right? Well, I know I can at least get the six grand in, right? And what's cool about whole life insurance policies, you can always make up for lost time, right? You can always do what's called a makeup contribution. The next year, you fund 15 grand, and then you make up for the for the, say the 9,000 that you didn't put in, right, you put in six, right? There was 9,000 left of, you know, space to hit your goal number. You can get that in the next year so you can make up. That's what's really cool so you don't lose on your ability to fund the policy. So low number, goal number, max number, then you've got design and system. Okay, These are two intricate pieces for success before implementing the strategy. So what is the design? Okay, design is referring to literally these three numbers. Like how is your policy being structured? How is it accounting for ups and downs in your life Right? Now to sort of summarize the space of infinite banking as it relates to design is you will typically see as it relates to where your money goes. Once it's in the whole life insurance contract, your money goes into two places, premium and cash value.
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That's like your two general locations where money goes. Premium is just cost of insurance. Cash value is cash value. Money that shows up day one, that's going to be growing. Your premium is what's covering your death benefit, protecting your human life value, creating generational wealth.
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So the design of it can be anywhere. Typically, again, summarizing this entire space of infinite banking, all the different terms that it gets, all the different YouTube channels and TikTok channels that exist that educate people, you will typically fall within the range of 10, 90 to 40, 60, meaning 10% of your money, say 15 grand, 10% of it, 1500 bucks is going to base premium, or as high as 40% of your money is going to base premiums. 15,000 times 40%, say six grand. So anywhere from 1500 bucks to $6,000, right. How you design a policy is going to have a direct impact to whatever strategy you choose. So if you're trying to use one of the strategies here on the board, that would require a higher amount of cash value upfront in the first years that you're going to borrow from it initially, then you're probably not going to want to go with a high base premium because you're going to have less cash value available upfront. If you're thinking more long term, I want to fund a policy for an extremely long period of time. And to maintain that discipline, you may not want to go with such a low base premium policy. We might need to increase that a little more, which gives you the ability to fund the policy for a much longer period of time. That's what that's referring to, design and then system, right? The system over Here.
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Because we have the strategies over here. That's once the policy is in place, the system, this word that I'm referring to here is involving the maintenance and upkeep of your whole life insurance policy. And this is very, very important because this goes back to my story that I shared earlier about the client. I'm talking to the husband for five years, never spoke to the wife.
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Our system of communication was between Denzel and husband, only that system ultimately failed five years later. Would you agree? The person now wants to do a reduced paid up. They never want to pay into their policy again because wife didn't know. All the five years of work that we put in together is now being essentially destroyed.
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Not even to sugarcoat it like that's what's happening. We're destroying the strategy and setting, settling for something very, very less being reduced, paid up so early into the policy's funding.
Period. Right.
Terrible, unfortunate.
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But again, this is me being transparent and vulnerable. This kind of stuff happens. So now, as I learn and improve in my career, I could say, okay, I'm going to spend a little more time on the system.
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So the system is referring to really your insurance agent, yourself. How are you and your insurance agent communicating before we put the policy in place? And after the policy is in place, how are we ensuring the success of the strategy? We need to have a system that complements the strategy. Does that make sense? Comment below.
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So in this case, I think a very good, solid system to have with your agent. Whether you choose me to be your direct agent or any one of my partners that I work with. Steve Parisi, Caleb with Better Wealth. Daniel romberg. Chris Kirkpatrick, Life180.
Right.
Sebastian Boyer, the approved guy. I collaborate and partner with a lot of people in the space that I know like and trust.
Okay.
So what's important is to really develop a system with you and the agent where you can say, look, Denzel, this is my wife. I want you to meet my wife. This is the type of people we are. This is what we want to do. These are our goals. Denzel is taking notes. I'm keeping record.
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We put the policy in place and we form an agreement and we say, look, we're going to talk at least one to two times per year. I want to talk six months in to the policy, and I want to talk 30 days before the anniversary date of your life insurance policy. I want to Talk at least 30 days before the anniversary date and six months into any given year into the policy. What does that do. That allows us to really project how each year is going. So in the first year, we fund the policy, right? In this case, let's say we dump 15 grand in. Wonderful. Six months in, we're having a conversation. We're saying, okay, is there anything coming up? Any unexpected life circumstances we need to be aware of? Yes, Denzel, I need to do a roof repair. It's going to cost ten grand. Okay, so now we get to strategize. We have a $10,000 unexpected expense, right? That's come up. Where are we going to pull from that 10 grand? Well, we can borrow from the policy. $10,000. We could borrow from your line of credit, your home equity line of credit, 10 grand. Or we can pull from your savings account $10,000. What should we do? So if Denzel and the client don't have a conversation in month six, and the client takes it upon themselves themselves to make their own decision, right? And ends up not being the most efficient one, and then it ultimately leads to year two. Denzel, I only have $6,000 now because I spent 10 grand on this roof repair. And I'm like, well, I didn't know you had a roof repair. You didn't tell me you had a roof repair. There was no communication, right? So immediately within one year, the system breaks, right? If there's no consistent communication and we're in synchronization now, what works great is in that Same example, month six, Denzel got a $10,000 roof repair. I got 10,000 in savings. I have space in my HELOC to finance it through there. Or I can borrow from my policy and pay a $10,000 expense. I say, well, interesting. You say that. Husband, we have an opportunity. You just got done saying that you have 10 grand in your savings account, right? We've got this expense coming up. What if we dump the 10 grand in your policy, max fund it for the year, get it up to the $23,000 number? Let's say we did that, and then we borrow ten grand from the policy, right? Pays for the roof repair. You max funded your policy for that year. You now have that money growing tax free, and you finance that expense. The roof repair is taken care of, and then we keep saving money. Then 30 days before the anniversary date, we have a conversation, and he's like, Denzel, I have $10,000 to put into the policy on anniversary date. Okay, great. We dump 10 grand in, and then we set up a plan to continue to fund it. 500 bucks a month, right? Of that 6 grand, a year, this example.
Right?
So having a very good, effective communication system. Right. So system is really referring to communication, right. Agent and client. And if I'm dealing with a spouse, I believe spouse needs to be a part of those calls, especially the initial ones, and maybe one or two from time to time. Not to be on every single call, but at least they're on the same page, right. I can't have spouse destroying our financial strategies that we're putting together. Can't have it. It's not going to work. And I am not going to try and compete with the husbands that are listening. I have never had this issue with women. Never had this issue. It usually only happens with the men because again, I'm 28 years old. If I'm talking to a man that's 55, 60, 65, you're, you know, you're a tough guy, right? You're the macho, you know everything. And then I take that as face value. I take your word for it. And then, you know, years go by and all of a sudden you're a softie, right? Because wife is making the financial decisions. Yet you're the breadwinner, you're the head of household, you're the man of the house, you're the provider and the caregiver and the protector. Yet we've got these occurrences that happen which, again, I'm not against it. I myself, I break a couple times when it comes to my household, I'm not going to lie. I think I'm the head of the household. That's what God told me I am. And yet there'll be times where I compromise. Does it make you, as the man, any weaker?
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Doesn't make you weak, doesn't make you incompetent in any given way.
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I don't know the dynamics of your household. I don't know, you know, who makes more money, who makes less money, who makes equal money, how decisions are made. Your wife might have a good point, right? And it would be great to have that dialogue, right. Bring her into the conversation so that we're all on the same page. So I'm not against her. I'm not against you. I'm for the team of your household succeeding, building your kingdom to last multiple generations. That's what I'm for. I'm your greatest cheerleader. I'm your quarterback coach. That's supporting you from a distance as an asset, as a resource, as a teacher, as a counselor, as all of those things, consultant. I'm for you. But if I don't Know what's happening behind closed doors as it relates to finances. If I don't know what kind of conversations you're having when you get off the phone call, you guys come up a certain way with a different. We put on our mask, we jump on a call, but if we don't reveal what's actually going on, that can ultimately lead to failure.
Right?
So an important system of communication between the agent and the client is extremely important. The design, we got our three numbers. Low number, goal number, max number. The way we come up with these numbers is looking at cash flow and looking at how much you're already saving per month and recognizing your savings as an expense, putting it in your expenses, and then seeing what your cash flow is at the end of the month.
Okay?
With that being said, now let's take a look at these different infinite banking strategies. I'm pretty sure you've been, you know, reading it right through. These are the most popular ones. I got five of them on the board here. And then I have the one that I'm doing personally. Okay. My strategy as it relates to infinite banking, okay, this is what I do. I have a first position home equity line of credit where a majority of my income goes into. I have business income, I have personal income.
Okay?
So that's why I say majority of my income, not all of my business income is going into the heloc. What's happening is I'm taking distributions and salary from my business to personal and it directly gets deposited into the first lien heloc. What does that do? That is automatically paying down the debt on my home in a very efficient way. And then what's happening is I save money, right? So I'm saving money. Saving money is a strategy in and of itself. It's a principle, it's a rule, it's a law that I implement in my household. My goal, I try to save at least 40% of my income every single year. So what's happening is my savings dollars does not sit in a high yield savings account. It's sitting parked in my first lien heloc. Now, that number ultimately amounts to about $110,000 a year is what I am saving into my first lien HELOC parked. And then on the anniversary date of my four policies, I have four of them. Two of myself, one of my fiance, one of my mom.
Right?
I take that 110 throughout the year, different anniversary days. We got four different anniversary days of four different policies.
Right.
That money will come out of the first lien. Heloc and it pays for my policies, it contributes it max funds. Every year I'm hitting the max number on all four of my policies. Every year I'm hitting the max number, right? Then what I do is once the policies are fully funded, I'm borrowing 2/3. I use my same rule for funding, for borrowing. I borrow 2/3 out of my policy. I might go slightly higher if it makes sense, but I'm borrowing 2/3 of the total amount of cash value that's getting dumped into those policies throughout the year. And I'm paying off debt and investing through value creation. I create value in the marketplace and I get paid abundantly for that. So what ends up happening is this value creation is a cash flow vehicle for me. What is value creation? That's me building a business that serves people right. That's me getting licenses. That's me getting educated training. That's me forming partnerships with other content creators online. And so what happens is that value creation through those dollars that I initially invested to my income, which then goes into the first lien heloc, which then creates a rinse and repeat effect. It creates a nice, what I call cash flow flow, right? A flow of cash flow. This creates velocity of money. This creates velocity banking. These are the things that I teach on the YouTube channel, right? And where I'm saying pay off debt. Well, paying off debt is an automation of me just parking money in the first lien heloc. So it's like I'm automatically paying off debt faster than any other debt elimination strategy. And at the same time, I'm also investing through value creation after I've saved money, right? So I've saved money first in a whole life insurance contract. I'm protecting my human life value today. I'm ensuring that not only am I benefiting from having these life insurance policies, but my family will benefit and my unborn children's children will benefit from the work that I do today, which is again, incomprehensible. How do you measure that? How do you measure the rate of return of leaving a legacy behind for your children's children, people that aren't even born yet? Isn't that insane? That's me thinking 100 years out. Many of us are thinking very, very small minded just about us being very, very selfish. And we wonder why certain cultures continue to succeed while other cultures continue to fail, right? We wonder why we remain what's called a minority. We wonder why we get labeled minority low income, right? This is where I start to get a little more Passionate. Because I come from minority, low income, Puerto Rican, Colombian, right? That's my say, culture, nationality. I'm a minority in the United States of America. Yet with this education and knowledge I've been able to accumulate over the last decade of my life, I'd be able to put myself from a minority, right? Into a different type of minority.
Right?
The minority here is high income level minority. Where there is a. I'm in the top 10% of income earners in the United States of America. That's insane. To go from the bottom minority, right? Which technically is. That's where the majority of Americans live. Paycheck to PayCheck, less than $500 a month in their bank account. So going from there to now, being in the top 10% of income earners, I'm in rooms I don't even belong. And I promise you, I walk in, I'm like, I'm the only one with this kind of skin tone. I'm like, dang. Holy crap. These people got money, money. I got new money, these people got old money, they got generational money. Whoa, that's pretty cool. Alright, so I get involved in these rooms. I got no qualifications for 28 years old, as I mentioned. I'm getting them in rooms. People have been doing this kind of thing for 20, 30, 40 years, building massive companies, being around multi, multi millionaires, even close to billionaires, I don't even know. Insane. How does that occur? You got to think long term. That's the only way that occurs. You got to think long term. You got to think beyond yourself. You think bigger than your own problems. How do I solve other people's problems?
Right?
You think massive, right? Put value behind it, you put purpose behind it, you put faith behind it. Belief. Game changer stuff. Game changer stuff. So that's my strategy. This is what works for me. And I would say that in order for you to implement this kind of a strategy, you need to have this type of mentality of creating value in the marketplace. So you feed the system. This system I don't believe will work on just a job. I believe you need to create value so that the system can continue to increase and it feeds itself, right? And then it creates a cash flow perpetuating system. That's why I like this particular strategy a lot. And I don't honestly, this strategy is not really taught because it's still somewhat of a theory, right? Because I have personally never seen any other content creator explain this thoroughly. I have videos on my channel where I say velocity banking and infinite banking. Combined. I've never seen anyone on YouTube combine the two and break the math down. Fully never seen it. So therefore it is a theory, right? Because it hasn't been successfully implemented for multiple decades, right? So therefore with theory comes risk. What is the risk of this strategy? Risk number one, if my value creation doesn't create value and I don't get paid and my income goes down, which means less money goes into the heloc, which means more interest is being paid on the heloc, which might mean less money goes into the policies, which might mean I'm borrowing more than 2/3, which means I don't have as much money to invest in value creation and not as much money to pay down the debt. And all of a sudden you've got too much owed on the policy and too much owed on the first lien e lock that can become a mess. That is the risk that I'm willing to take. I'm not saying that everyone should take that risk, but this is just me simply sharing with you what I do right now. Simplest strategy to most complicated, right? As it relates to infinite banking. One strategy here. This right here in my opinion is the most complicated strategy. This is very complicated. There's a lot of moving parts here. This is not a set and forget type of a strategy. This is active, right? Active. Need to be aware, need to know your numbers. Very, very important. So that's most complicated. That's why that's at the top and that's why that's my strategy, right? I'm a geek, I'm a nerd for this stuff. So I can, I can do it, I can handle it, right? So now let me give you the simplest infinite banking strategy I have seen on the Internet. And it blew my mind. I said, wow. Now if that is duplicatable, what I'm doing may not be duplicatable for the majority of my listeners. For some, yes, but not the majority. This right here, the majority of people watching right now, 43 people in the house now and those that will catch the replay. This is the most duplicatable implementable strategy as it relates to starting a whole life insurance policy yourself. And this is the book that goes with it. So this strategy can be found in this book right here is by a gentleman named Tom Wall, wrote a book called Permission to spend maximize your retirement with the best kept secret in personal finance to give it away. The best kept secret Whole life insurance. Right, that's the book. So we're talking about a whole life insurance policy and what he basically presents is, he says, look, majority of Americans have a 60, 40 portfolio. 60% of their money is in stocks, right? Growth funds, IRA, 401k, right? It's in a brokerage account and you're investing in growth stocks, indexes, right? That, that comes with more risk then 40% of the money that you invest out of your cash flow, right? What remains is in bonds, CDs, money market account and high yield savings accounts and checking accounts and cash under your mattress, right? That's what a majority of Americans are doing today. They have a 6040 split portfolio. Comment below if you agree with that. So far that statement, 60, 40. I bet you if anyone looks at their 401k right now, you look at your brokerage account and you see where your, how your money is actually being managed. I'd be willing to bet it's somewhere around a 60, 40. You got 60% of your money in stocks and growth stocks and you have 40% of your money in safe funds that are growing consistently, right? So what Tom Wall pretty much presents is we can replace your bond portfolio and, and the money that you save in high yield savings, bonds, CDs, money market accounts, and just stick that money in a whole life insurance contract. So it's not like you're coming up with new dollars, it's money you were already saving and money you were already putting in a CD bond, money market, high yield savings, checking account savings, cash under your mattress, right? And he's literally saying you just take 40% of that, stick it in the whole life, right? Not even talking about borrowing money and leveraging it, right? None of that, just, just literally saving money in addition to your portfolio. So now you have 60% of your money still in stocks growing, right? And you got 40% of your money growing in a whole life insurance contract. And over a long period of time, a whole life insurance contract will outperform any bond, any cd, any money market account, any high yield savings. And I've proved that in some of my previous videos and so has he. He's got a PhD, right? Very credible guy. You can watch some of his work, he's been interviewed on multiple channels. Very smart, knows what he's talking about. He looked at the whole life insurance performance over a 30 year period and it outperformed all bonds, CDs, money. So and the other cool part, not only did it outperform and when he talks about outperform, he's talking about the cash value performance in a whole life insurance contract. Not only does it outperform bonds, CDs, high yield savings, money market account, cash under your mattress, cash in your checking account. But it's also tax free growth and you get a death benefit that's tax free when you graduate earth and you have liquidity throughout the entire period. So you don't get any penalties for using the money, taking care of certain expenses and things like that. Very, very duplicatable, very implementable where you can literally just say, okay, I've got 60% of my money that's in my 401k, that's in my IRA, that's, you know, in these brokerage accounts. And I look at it and I'm like, yeah, it looks like, you know, especially if you have someone managing it for you, roughly 60% of that is in risk investments and then the other 40% is in safe growth funds. Safe money that grows, not going to lose it. And that's a balanced financial portfolio.
Right?
And all he's saying is, dude, if all, you know, if you, if you were contributing 10,000 into your 401k, 5, 6 grand into the brokerage account and anything else, just remove what goes into safe money instead of have it there. You just have it go in the whole life insurance contract and it'll outperform all of the other safe money assets out there in the marketplace. It'll outperform it. That's super cool. When I came across that, I was like, that's game changer, right? So I started implementing that for my clients as well. Just showing them like, look, you're already contributing to a 401k and you're contributing to your brokerage account and you're contributing money to your cd, whatever the percentage is, just redirect it to the whole life. It's going to outperform and the money's going to grow tax free and you have liquid use. You don't get any penalties before 59 and a half. That's incredible. So that is the simplest infinite banking strategy I have seen. And that is like infinite banking just for the sake of funding a whole life, saving money, maybe using it at a later point in time. The next strategy, this is where it starts to get progressively more complicated. Okay, the next strategy I've seen online, which is you simply save money, come up with a number based on your four major numbers, what your cash flow is. You, you save money into a policy, you then borrow it that same year or years in to pay off debt. It's an extra step in this, in this first strategy, there was nothing spoken about borrowing, okay? Nothing spoken about borrowing here we're adding borrowing. You save money to borrow at a later point in time and the purpose is to pay off debt faster. That is an alternative to making extra payments. Instead of sending an extra thousand dollars a month to my mortgage, let's say you're doing that. Let's say you're someone that is trying to pay their mortgage off faster and you're sending an extra thousand dollars a month. Thousand dollars a month. Thousand dollars a month, right. That money goes into that mortgage payment, it dies.
Alright?
You'll never see that money again unless you sell the home or borrow. Make sense? So that's why I say the money dies, you never see it again. It's a one time use. Whereas what's being presented here is, hey, take that thousand dollars that you were going to send to your mortgage, instead of sending it there, we're going to put it in your life insurance policy where that money is going to grow tax free forever, guaranteed basis. And, and then at a later point in time, once there's enough cash value built up, we can either do one lump sum borrowing to pay off your mortgage in one shot. And the amount of time in comparison to extra payments are pretty close. It's not too far off. Maybe it takes an extra year and a half. So it's not crazy, right? In terms of, say you were projected to pay your mortgage off in seven years and nine years, say nine years, you're projected to pay your mortgage off making extra payments at $1,000 a month on top of your normal mortgage payment. And with this strategy, it would take 10.5 years.
Okay.
Even though it took longer, the value is you built an asset that's tax free, guaranteed liquid, comes with a death benefit, and you were able to achieve the same result. You paid off your mortgage faster, right? And now those mortgage payments that are now removed, you would be sending that into the policy and you continue to save $1,000 a month into the policies, you're saving $1,000 a month. And then you're sending the mortgage payment to the policy loan that you took out and it's paying that down. And that would take another, say, additional couple years.
Right?
However long that took is you took a lump sum out to pay off your mortgage. Now the mortgage is gone and any interest you pay right inside of the policy, you're being credited interest on the same dollars as if you didn't borrow it in the first place. So it creates this offset where it's like whatever I pay in interest inside the policy shows up in the form of dividends, right? So I paid the insurance company interest, but at the same time, the insurance company credit me interest on the money I borrowed plus the money I didn't borrow.
All right?
It's like all of it together, uninterrupted compound interest growing quite powerful, right? So that is pretty straightforward. And that strategy solves for becoming debt free. And then once you're debt free, you just continue to save the money and grow it, build that portfolio up even more, and then maybe use it for different things like financing different things or building wealth and making investments, right? So it's like this strategy is a temporary one, right, until you become debt free. Then, boom, strategy is done. Now you change. Okay, so the next one below that is saving money to borrow immediately to finance consumer purchases. And the result here, the idea with this is you're building wealth with expenses, or you might have seen online building wealth with debt, right? But we'll get into that strategy. This one is just talking about you saving money into a life insurance policy, right? And those same dollars that you're saving, you're intending to use it for a future expense, like buying a car. Buying a car is one of the most popular strategies out of the five here that are presented. This is probably the most popular thing I see as it relates to infinite banking is this idea of buying cars, right? And the notion is that when you buy a car from the dealership, right, the money is gone, you never see it again. It's a depreciating asset, all that stuff. And what they're saying is, okay, you're already saving money to buy a car at some point in time in your life. And the average American switches their cars, say, every seven years. Let's just say there's some statistic out there, whatever it is, okay? So the amount of cars the average American will have, say, five, six cars, and who knows, that might run you about 100 to like 200,000 a year in an expense a consumer purchase, right? Buying car. So the idea is, okay, you are already saving money somewhere to buy this car or finance it. So what infinite banking would suggest in this strategy is you are saving that money in a life insurance policy first. That money is going to grow. You're then going to borrow at a later point in time to finance a consumer purchase that car. So now you bought the car, and then you're going to pay yourself back what you would have paid to the dealership under the financing terms. It's a little bit more complicated. You got to set, you know, Up. Basically, you got to set up a payment plan for yourself. You got to pay yourself back an interest rate back to the policy that covers the interest.
Right?
And the whole idea is that you are building wealth with the expense of buying cars.
All right?
So it could be buying cars, it could be financing equipment, it could be, you know, running your tax bill through here. A lot of different things, right? That, you know, gets talked about. Now, I'm someone that personally practiced this. I practiced this strategy for a period of time. My personal opinion is that it can work. It also cannot work, right? It can work your favor, but it can also work against you if you don't run proper math. And then what I'd also say is this is not something I would suggest an individual do for the life of the policy. I wouldn't even suggest doing it for more than five to seven years.
Right?
Especially in the first five to seven years. I think you're creating a negative arbitrage in the beginning, especially if we're dealing with people with consistent income like jobs, careers, I think you might find yourself running into some problems. The other thing I've seen is the human factor. You know, these strategies sound great, but the reality is when you put the person in it, are they actually going to do it?
Right.
Are they actually going to do it? So as we go down these strategies, they get more complicated. And what you have to understand is there's more risk and they look more attractive. They look like you'll get more than this simple one right here.
Right?
And that might be true, right? It might be true. But the problem is the human factor. Will you actually do it? Will you actually pay yourself back? What you would have the dealership. So what does that mean? Like, you would have went to the dealership, you put money down and they give you an interest rate, Right? But are you going to have the discipline to pay that same interest rate back to yourself? Which means more money went into the policy so that it grew the policy so that it does create an actual benefit. A lot of people don't. What they do is they save the money to buy the car. They borrow. They bought the car, Then they don't pay themselves back. They don't know how something happened. Life happened. And now they're not funding it. They're not max funding it as much. And now they got a loan building up with interest, and it can implode on you.
Okay?
So I think it's important for me to dive into that a little bit deeper, especially as we get more and more complicated.
Right.
So that's the third strategy. The next one is, and I do like this one, this one I do like. Even though it's more complicated, it's very duplicatable, it's implementable.
Right.
I believe in it. So it's this idea of saving money and also investment dollars, meaning dollars that you're planning on investing somewhere, say the stock market, say real estate, say Bitcoin, whatever it is that you want to invest your cash flow in, that's a certain dollar amount. And then you have money that you save that you're not investing with. So what would it look like if you combine those two numbers together, put it into a life insurance policy, and then all you borrowed out was the investment dollars that you already had earmarked for that real estate investment.
Right.
Or for that business investment, or for that bitcoin investment, stock investment, crypto, whatever it is.
Right.
So that would be the idea. So what's nice is you have a safety, which is the safe money, that's the base of the policy. And then you've got investment dollars. Let's say it's, you know, 15 grand of investment dollars and 6 grand of savings dollars. So all together, 21 grand went in, then you borrow 15,000 out. And when you borrow the money out, you are trying to invest and create cash flow, right? You're trying to invest and create cash flow, right? So when you do that, let's say you borrowed the 15 grand out of the life insurance policy and the interest rate is 5%.
Okay?
So if you borrow at 5%, you owe 15 grand in a year, your interest cost to borrow is $750.
Right.
This is the first year, okay, of funding the policy. 21K went in, you borrow 15 out, right? And you're going to have a $750 interest expense on the anniversary date, year two. But now you take that 15 grand, you make an investment. I ideally, in my opinion, you want to make at least double what you're paying in interest so that there could be a net positive, and then it accounts for taxes and any fees that come with that particular investment.
Right.
And then ideally we want this investment to be maybe a little more short term. You know, one year, two year, nothing too long.
Right?
Because ideally I want to be able to pay back the principle I took out.
Right?
So you're creating cash flow from 15 grand. So whatever cash flow and principle gets created would fund the policy back and that's what occurs.
Right?
So you're basically, you start off using your income, however many Years it takes to eventually you'll have the asset that you created. So you have one asset, whole life insurance, you created another asset. Say it's real estate and you keep putting money in. Every year, 15 grand you borrow out, right? And then you're paying back the 15,000 plus interest with your cash flow and principle, whatever that investment made, say 10% or more, ideally goes back. Do it again in year two. Let's say you dumped another 21 grand in, right? So now the amount of cash value is more. So then you take money out again, you have more, but you're at the same interest rate, say 5%, and now you're earning 10% on $30,000.
Right.
And you do that every year. But you have to have the discipline. Ideally we want the investment to be no longer than a year. So maybe you're getting involved in like a fix and flip or you're being a private money lender and you're lending money for just one year terms or maybe six month terms to earn 10% or more. That would be ideal, right? So that you're not lingering the loan on the policy for too long. That's, that's, this is like perfect scenario for me. And what happens is the principal and cash flow pays back the policy loan that you took out 15k in the 750 boom, pays that back. You're still going to save money and you're still going to put new investment dollars in. So every year you're injecting 21 grand in, you're borrowing 15 out, and then 15 grand plus interest gets paid back, policy grows, you do it again at a higher amount, you keep doing it. And then it gets to a point where whatever investment we created now has the ability to actually fund the policy at 21,000 a year. So then like you don't have to put any more dollars, your own income in. The asset is doing it on its own. That could be a business, that could be a real estate portfolio. That's basically funding.
Right.
And then you may not have to borrow anymore because it's done all the work. So now you're just funding the policy, building up more of a, of a capital vehicle here.
Right.
So a little more complicated complication there, but I believe that's very doable. It's duplicatable.
Right.
And, and I would argue that's truly building wealth. I think with running cars and consumer item purchases. I don't think it creates the necessary discipline to create true wealth. I think it's like you're trying to, you Know, finesse, you're finessing, you're playing a bit of a game there. And I don't think that when you get to the end you're not going to love the results. I don't think you're gonna love the results. That's just me personally, right. Others might prove me wrong. I just don't think you're gonna love it.
Right.
So now the last one, right. Is very complicated and I personally never done it before. But there is a company or group of people that talk about this, right? And that is the, that's the bank on yourself community. So we got. Bank on yourself is where I discovered this strategy from. And in my personal opinion has the most amount of risk involved.
Right.
And I think it steers the customer, you guys in the wrong direction.
Right.
And I'll get into why I feel that is. But my answer is going to be this, the value creation factor, right? This strategy for me, I don't see, see where value creation is being occurred. If we look at this strategy above, this actually creates value how? Through the cash flow investment that they made. The real estate, the business.
Right?
You bought a real asset that helps people providing housing for someone, you're creating cash flow, that's value creation. Saving money to borrow to finance cars. I don't understand how that creates value in my life. Or value strategy above, this actually creates value how? Through the cash flow investment that they made, the real estate, the business, right? You bought a real asset that helps people providing housing for someone. You're creating cash flow that's value creation. Saving money to borrow to finance cars. I don't understand how that goes. Creates value in my life or value for others. It's a consumer purchase, right. It's like a debt asset.
Okay.
Save money to borrow to pay off debt. That creates value for yourself. So that's kind of one one sided. It's just value for yourself. Replace bond portfolio, save money. It's value for yourself that builds up your portfolio, right? That puts you in a better financial position. That's value creation for yourself. This strategy is value creation for yourself and also for others. Because you're investing in something. This down here is an interesting one. Again, full transparency. I've never done this personally so I can't say that it won't work and I can't say that it does work. When I run the math, I just don't see it happening. When you include the human factor into this on a spreadsheet, it might look great, right? But the human factor, ah, kind of throws me off. So the idea is you're taking saving dollars, dollars that you save per month, and then you're taking the debt payment. So this assumes, this strategy is assuming that the person that does this is in debt, right? So let's say this person just has a mortgage debt, okay? Now what's going to happen is you're going to save money and your cash flow. Let's, you know. Because I'm trying to make it safe, right? So let's say you've got cash flow per month and money that you save per month, and then you have a debt payment, right? So let's say the debt payment on your mortgage is $2,500 a month. And then let's say you're saving 6,000 a year and say your cash flow, maybe another three grand or something for the year. So you got total certain amount of dollars going in. And immediately, like day one, immediately starting the policy, you're going to borrow $2,500 out and you're going to make a payment to your debt. So instead of sending that $2,500 payment to the mortgage, right? And then making an extra payment, you're actually not going to send that $2,500 mortgage payment directly to the mortgage. You're going to send it into your policy first, right? And then you're going to borrow it out at an interest rate, right? And you're going to make the mortgage payment. They also talk about, like, you may be borrowing some more of the money to like, send extra, I guess, to this, to this mortgage. And somehow, some way that creates what's called positive arbitrage, the amount of interest that you're earning over here inside the policy, the $2,500 that you're earning inside the policy versus the amount of interest that you pay to the policy versus the amount of interest that you save by paying off your mortgage earlier. You're somehow going to save all this money and create positive arbitrage. I'm telling you right now, there's a lot of mechanics that is involved in this to make this work. First of all, you're taking out a loan every single month, your policy. So you have to make sure that you take out a loan before the mortgage payment is due so that you're not late on the mortgage. So you got to make sure you do that. So that's manual work involved. You have to borrow money from the policy, wait a few days, hits your checking account, checking account, pays the mortgage payment like normal, and then you are building a loan inside of the policy, right. So it's not really going to be a whole lot of available cash or value in there because you borrowed it and then you stuck it in a mortgage and you don't have any liquid use. There's no liquidity in the mortgage.
Right.
It's one ended. You can only put money in, you can't take money out. So very easily, this could get destroyed very easily. You have to borrow money from the policy, wait a few days, hits your checking account, checking account, pays the mortgage payment like normal, and then you are building a loan. How might you ask? Well, what if this person loses their job? What if.
