10 Things Most People Get Wrong About The Infinite Banking Concept

All right.

Well, let's jump. So, well, I'll say this. So after, I mean, my 18th year teaching, practicing the Infinite Banking Concept, we've earned the business of more than 6,500 clients across North America, 77 policies in our family banking system. And all along the way, and even in our time together, Ash, with the CommandPost, watching people actually live with this process and the experiences that people are sharing and what's happening out there now in the marketplace is that more and more people are gaining awareness of the concept. They're developing really good insights, asking a lot of great clarifying questions. The financial services profession is, I think, shell-shocked by that because there's, as Nelson used to say, the late R. Nelson Nash, he would often say, "People can take a tiny bit of information and reach an absurd conclusion." And so the people who don't, the people who read R. Nelson Nash's book titled "Becoming Your Own Banker," the people who, take in content from several great resources, including ours, tend to see the financial world differently and start down a path of getting to clarity, particularly on this concept. And I'm curious, Ash, just in the conversations that you're having, have you heard somebody say to you, "Isn't this infinite banking, isn't it just a fancy name for Whole life insurance?

I have heard things like that. Yes.

And the reason I'm saying that is because I've got a bit of an omnipresence on social media. So obviously that attracts a lot of attention. And so somebody had posted that and I said, well, I think that it's almost like calling real estate investing a mortgage. Right? And it was just like crickets. You know, it's, um, if a person— and this is, you know, definitely coming from a place of, again, just not having clarity. I, I don't know what this commenter does or doesn't do, but if you're evaluating the tool instead of the process, then I think that's the wrong question.

Absolutely. Yeah. It's like putting the cart before the horse.

Yeah. Good point.

Because we know that the Infinite Banking Concept is a process, not a product.

Right. That's exactly right.

But they always come at it from the product. So, because they come at it from the product, of course, they're not going to be able to tie or link the two together because they're not even looking at it holistically. They're looking at it piecemeal.

Yeah.

So, once we explain to them and provide them with the resources and they start to understand what the infinite banking concept truly is, the problem that it's solving, once they understand that, then the tool, the product starts to make sense because they see all the great attributes that come with it. But it takes that conversation because Like we were talking about earlier, words matter.

That's right.

Definitions matter. And if you don't know something, that's okay. But since you now don't know it, I would highly recommend that you either research or contact someone that is in that profession, that's in that field, that's already doing the thing that you want to know about and ask them questions because they'll give you the information and answer the questions that you need to know.

[Speaker:JAYSON_LOWE] Very accurate. And it leads me to something that is, again, just over my humble journey in this process, questions, why not just invest the money instead? And what's really important to understand in terms of a distinction is that the infinite banking concept doesn't replace investing. It replaces the banking function in your life, which can certainly include investing. And, and so it's really about where your capital resides, not where money eventually flows to. So if you pay premium in a dividend-paying whole life insurance policy, or, or ideally a system of policies from a reputable mutual life company, and from that place So you recognize a few things that are super important for clarity. So when you pay a premium, it's not your money anymore. It's not your property. You hear language like, "All my money's growing inside the policy." No, it's not. There's no money inside the policy. Cash value is not money. This is more like a trust arrangement. And Nelson does a great job outlining this in the book, "Becoming Your Own Banker." In a trust scenario, so if you follow my logic, you have a grantor, which in this case would be the, think of it as the policy owner. So grantor, policy owner. The grantor puts property into the trust. So the premium payer pays premium to the life insurance company. A trust has a trustee. The life insurance company is the administrator of these dividend-paying whole life insurance contracts. So you have a trustee and you have the life insurance company. Then you have beneficiaries of the trust, beneficiaries of death benefit proceeds. The trustee is obligated legally to ensure that the property of the trust is put to work for the beneficiaries of the trust. It's no different with a life insurance company. And so when you really truly understand what's going on, because in the financial world, what these financial professionals have been trained into in their career isn't wrong and it isn't bad and it isn't good. It just is, right? It's— they've been trained to place or sell or recommend certain financial products. And then when they look at dividend-paying whole life insurance, the brain is immediately sprinting toward comparison. Comparing a dividend-paying whole life insurance contract with some investment or some financial product, and there's no comparison required because they are two completely different instruments. An investment is not a dividend-paying whole life insurance contract, no different than a dividend-paying whole life insurance contract is not an investment. And so when you really truly understand the tool and you recognize that from that place you can invest, you can control how you finance the things that you need throughout the course of your lifetime, what a peaceful, stress-free way of life it creates when you get the banks out of your life, when the banks become, uh, option 2, not option 1. And, um, I shared this with our advisor teammates in our weekly Learn with Jay session: every dollar that you don't control is someone else's tool. Isn't that good?

Oh, yeah. It's so good. I actually wrote that down because that is a write-me-downer, as you say. And the stuff that you're talking about, Jayson, if people were savers, if they actually saved their money and it was probably residing in their mattress or out back in a hole somewhere and the value of the dollar wasn't going down constantly, then this would be a much very different conversation.

Okay.

But the banking function still needs to take place. But a lot of the times, people are abdicating that responsibility to the banks. They're not even controlling, as we used to, our own banking function. So, and I think maybe that was a little bit easier when everything was kind of either in bartering and/or in cash, when you had to actually physically, it had to leave your hand, you felt the pain of it leaving your hand, vice the bing, the little tap there, this little sound that it makes, and then you don't see anything actually happen. So, I think there's a big psychological aspect to this as well when it comes to the money and everything. But yeah, I mean, if things in the economy, if things when it came to money and if the system that we're currently in that we don't have the— this system was created not necessarily for us, but for the benefit of others. If we weren't in this and these weren't all issues that we had to try and overcome or issues that we had to think about, then it would be a much different stress-free way of life. But unfortunately, it's not. So once we realize that's the case, inaction isn't any good. We have to take action.

100%. I agree. And if people become aware of, you know, what Nelson, uh, [Speaker:CHRIS_SULLIVAN] And again, credit to the late R. Nelson Nash. I was blessed beyond the definition of good fortune to have been mentored by him for so many years. And he developed, he engineered this process. And so we learned just so much from him. And if you think logically and you're aware of a few fundamental truths, so one is that your money must reside somewhere. And that someone or some organization must perform the banking function as it relates to your needs, and that there are no exceptions to either fundamental truth. If you understand that your dollar, your property, can be transferred to the life insurance company where that dollar is no longer your property and it's being put to work by an institution that is the most financially solvent on the planet, and you know that you can contribute almost unlimited sums of property, and you pay no tax on contractually guaranteed buildup, you pay no tax on death benefit proceeds which are contractually guaranteed to be paid, you assume 0% of the risk of the investment function of that institution, and that institution has never failed to produce a divisible surplus, aka profit, what is a logical place for your property, the money, to reside?

But do they have a booth I can go sign up?

Like, when, when people— again, when we just make this ridiculously simple And, and from that very place, you can access capital directly from the life insurance company on demand, on your terms, through the device of a policy loan, which is unstructured, which has two sides to that coin. An unstructured policy loan to an undisciplined policy owner can be very dangerous. An unstructured policy loan to a disciplined policy owner is an advantage, an unmatched advantage. And so if people truly understand, Ash, that if control and liquidity reduce financial risk, shouldn't both of those be foundational rather than optional? Most people do the opposite. They optimize for growth first and they try to add the control later. We're just flipping the script on it.

Yeah. You need a solid foundation if you're going to build anything that's going to be worthwhile and last the test of time. Yeah. And people need to realize and truly think about this. If you're not the one in control, you're the one being controlled. Wow.

That is powerful and very true. Very true. If you look at it from this vantage point then, So if we say that, again, understanding that banking is a process, right? It's not a product. So if you take that just one step further and if you recognize that banking as a function, that it's not a location, then what happens when somebody doesn't intentionally choose how that function operates as it relates to their needs? They're going to default into someone else's system. That's it. Simple. And so from a systems perspective, why does having a stable base of ready access to capital, why does that short circuit a financial professional's brain when they first get exposed to this?

[Speaker:JAYSON LOWE] Well, it's probably because they're not even them, they're not used to it, right? Because they're used to having to jump through hurdles and provide justification and income statements and tax statements and all these different things to be able to get access to that capital to take advantage of that opportunity. But we know that if you have ready access to capital, that opportunities will track you down.

It's very true. Yeah. I was going to say, if you sort of— Take a look at that too from the opposite side of it. If a person is in a situation where the timing is forced, so they have to sell an asset and the market is not ideal for that asset sale, but the timing is forced versus being in a position where you have a stable base of ready access capital on demand on your terms. Forced timing is what destroys long-term plans, not what helps build them.

It's also what destroys compounding.

100%.

And that's what a lot of people don't realize, right? A lot of the times, even though they are taking advantage of an opportunity that's been presented to them and they do their research and everything lines up and all the numbers make sense, a lot of the time they're still stopping one thing to start another. And when they do that, they interrupt one of the greatest things they have going for them, which is the compounding.

100%. And the fact that it's uninterrupted, and the fact that the value of the policy cannot go backward. It's not tied to market volatility. And if market volatility creates emotional and behavioral mistakes, then shouldn't reducing that have measurable value? If we look at this purely logically, the answer is absolutely. Most losses, if you look at it from this vantage point, okay, think about the stock market. Here's the human condition as it relates to the stock market. Buy high, Sell low, repeat until you're broke. So most of the losses, they don't come from math. They come from behavior under pressure. And so when people say, "So are you saying that investing in the stock market is bad?" No, not at all. But you have to understand the human condition. Warren Buffett, his words, not mine, Most people should not own individual stocks. They don't have the emotional bandwidth to be able to do that because again, behavior under pressure. A stock price is not a company and a company is not a stock price. So there's a difference between stock market investing versus having co-ownership in a business that has never failed to produce a profitable outcome that shoulders 100% of the risk. That is contractually bound to deliver on its guarantees. And your only entranceway to ownership, your only pathway to co-ownership is to pay a premium. That's the only way to do it. You can't go to the Toronto Stock Exchange and say, "I want to be a co-owner of a mutual life insurance company." And so, it's not an either/or. It's just really truly understanding what is and making sure that you're approaching that from a place of logic and, and from accuracy and from truth, not from opinion. Opinions are very dangerous.

Yeah, and you bring up Warren Buffett, and he talks about emotional control with the stock market all the time. I, I believe, I believe that's even mentioned in The Intelligent Investor, and that's a book that he recommends people read.

That's right.

Where they emphasize that in the book, just like Nelson emphasizes the human condition and our behaviors in his book, Success Leaves Clues. There's a reason why they do that.

That's exactly right.

Yeah, I was just going to say that, you know, just because we're talking about logic, which is a, which is a word nowadays, in my opinion, in my opinion, is used rather loosely. But most people probably wouldn't agree with this, or they wouldn't maybe look at it from this lens. But I think pride is the antithesis of logic.

Oh, that's interesting. Expand on that.

Because people in life, even successful people, they allow pride to get in the way of learning something new, even if you lay out the foundation of it logically.

Ah, okay. I see where you're coming from. I see where you're coming from.

So even if you take them from the start all the way down the road of logic and they agree at every single point you're making, their pride can still get in the way because pride makes you emotional.

Yeah, that's true. That's true. And we all have a degree of it, right?

Correct.

Yeah.

Yeah. No, I mean, no one's— no one's perfect, but it's— it's being able to step through that. Being able to be humble in moments that matter and understand that, hey, it's— believe it or not, it's possible that you don't know everything. It's possible, right? It's also possible that someone knows more than you do, and that's okay. You can get to that place as well, but you need to be humble in the moment, right? As, as, as older family members would say, you need to pin your ears back and listen I love that. I love that saying. But it's true, right? It's, you know, because that is what— if you can be humble in the moment and absorb the information, you will be better, as the outcome will be better, as long as you apply it and not just listen to it.

Most, most definitely. And I think that, um, it reminds me of something that Nelson shared, and I heard it for the first time. This was at a think tank conference, which happens once a year. It's an annual infinite banking think tank conference. And my first one was in Birmingham, Alabama, and there were several hundred folks in attendance and spending a few days together and sharing awareness, knowledge about the concept and use cases and all of that that you've experienced, Ash. You've been to Think Tank, you know what that experience is all about. And when Nelson was with us, we were sitting down to dinner and after the plates and everything were cleared and dinner was done and it was just, it was such an incredible evening with him. And he has this wine glass on the table and he picks up the glass and He sort of points to the circumference of the bottom of the glass and he said, "I want you to think of the bottom of this glass as all the knowledge that you possess up to today." And then he sets the glass down on this massive round dining table and he says, "Now I want you to think about the circumference of the dining room table as all the knowledge that you're not yet aware of." And so, what you need to do is step outside that circumference, keep growing it, keep making it larger. In other words, there's no arriving in knowledge. There's always something new to learn because the dining room table circumference is also forever expanding. And so, it's this lifelong journey of learning. And boy, does it ever pay dividends. And when you think of this process, the infinite banking concept, again, for myself personally, I always lean toward logical thinking just in reference to the simplicity of the process. So you pay a premium to purchase the tool to implement the concept. That tool is dividend-paying whole life insurance. It immediately begins piling up cash value, which is not money. So your money is not growing in the policy. Your money is now the property of the life insurance company who puts that capital to work for the benefit of everyone who co-owns it, including you. Simple. You've got a guaranteed loan provision. And so if you can access capital without interrupting any of the daily growth of cash value and the loan is unstructured, why would that be considered risky when it's done intentionally? It wouldn't be unless the borrower ignores repayment discipline, or in our Nelson Nash's case, if the borrower does not follow Nelson Nash's golden rules. Think long range, meaning think 3 generations past your own. Don't be afraid to capitalize your system, meaning don't be afraid to pay premium. Don't steal the peas. When you access money in the form of a policy loan, you should have a plan to repayment, to repay it. The fourth is don't do business with banks. So the risk is behavior, not structure, and that's what these folks need to hear. The risk is behavior. It's the human condition. It's not structure. Structure is airtight. Airtight. And if major corporations utilize collateralized lending, why is it suddenly considered advanced when it— when individuals want to do the same thing? It's simple.

Most individuals were never taught to think I think a lot of the conversation around risky comes from the fact that something that sounds too good to be true either must not be true or there must be a catch, which means it must be risky. And in this case, that's just not true. You know, and I'm glad you brought up about property. And the insurance company, when you give them the money, right, it's no longer yours and so on. And there are other institutions where that's the same case, right?

And what institutions might those be, Ash? Deposit-taking institutions?

I believe so. I believe from what I've heard along my journey that they come in various sizes. Various colors, but they all have the same objective: profit and control.

Ah, wouldn't you know it? And I guess for me too, Ash, that's a big contrast that I've taken away over the years is that with the life insurance companies, again, being the most financially solvent institutions on the planet and recognizing that your money must reside somewhere, It just begs the question, what better place to have it reside than here? And if there's one thing that I hope anybody watching and listening takes away from Ash in my conversation today is that infinite banking isn't something that you try. It's something that you understand. And understanding always comes before action. So make sure that you, you get to clarity on the process before you take action, because everything that Ash and I talk about in the command post— control, liquidity, certainty, long-range thinking— none of that started on the internet. It didn't start with a product. And so if it started with one man, one man, and that man was the late R. Nelson Nash and his book titled Becoming Your Own Banker. It's not a pitch, it's a framework. It's not going to tell you what to buy, when to buy it. It's not gonna rush you into anything. It's going to open your eyes to a whole new financial world very clearly, patiently, and he's going to help you understand the advantage of independence around controlling the banking function as it relates to your needs. And so if this discussion with Ash and I resonated, getting your hands on Nelson's book is the logical next step. And there's a link here that you can go right to our website. You can buy it, we'll courier it to you. Just read it slowly and don't worry about agreeing with everything. Just let it sharpen how you see money. Because once you change how you think about who controls the banking function in your life, I promise you, everything else starts to reorganize. And so, Nash, thank you. We miss you. We think about you every day. And Ash, this has been another great segment of The Command Post.

I have one comment to make that even Nelson would appreciate from his military background. The infinite banking concept sets the conditions for success.

Very nice. Okay, so folks, build deliberately and think long range and always, always, always, always control the system before you chase the outcome. So thanks for tuning in. Money flows. Once you begin to observe the pattern of flow, you start seeing something that most people miss. Money is always being stored somewhere and borrowed from somewhere. You've got car payments, credit card payments, loan payments. You're paying cash for things.