Richard Canfield explains the Infinite Banking Concept: how policy loans work against your cash value, why it's not a magic product but a behavior shift, and what misconceptions trip people up. You need discretionary cashflow, patience, and the right mindset to make it work.
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Once you know that IBC and the ability that you could become your own banker is available to you, the knowledge that is out there generally won't leave you. Once you've learned something, it's very hard to unlearn it. Whether you decide to implement or not is really your call. That's part of what these videos are about. It's giving you the opportunity to take in that learning, make a good decision for yourself. The only one that can be responsible for you and your money is you. So just what are some common questions, frequently asked questions and misconceptions about this thing called becoming your own banker? My name is Richard Canfield, here with the Bankers Vault. We're going to talk about the power of family banking, specifically going over some questions that we receive from time to time from people, either through comments on our videos on our YouTube channel, or just in conversations with clients and, and things that we also see throughout the greater aggregate community of authorized infinite banking practitioners. So first question on the list is what is cash value? Well, great question. We're going to actually have the video here, a link to an animated video explaining the power of paid up additions, which will really do a great job of explaining that. It's about seven minutes long, so go ahead and click that link and you'll be able to dig into what exactly cash value is, what paid up additions are. Those two things kind of go hand in hand. But from an overall perspective, cash value is today's present value of the future death benefit. Okay, so the death benefit of the whole life insurance contract and the cash value are actually linked effectively, they're the same thing, they're just represented at two different points in time. So today's cash value and the current death benefit, on that day, the cash value's got a job to do. According to the life insurance company. They have to grow that cash value and it's chasing after this future eventual death benefit. The way that policies set up with the intention of usage for the process of becoming your own banker is that you're going to see an increasing level of death benefit through the proper funding of premiums, et cetera, that's going to continually accumulate through the life of that policy. In general, broad terms, as that death benefit rises and continues, it forces an increasing level of accumulation on the cash value. So the cash value again being a representation of the death benefit, really a effectively the same as the death benefit, it's just today's current value of that. That's one of the reasons why you're able to use that Value as collateral for the purpose of policy loans, or in some instances for some people, third party collateralization. So it's very intrinsic really. When you take a policy loan, one way to think about it is that you're effectively taking an advance, kind of like a credit card advance on your future death or future death benefit of the life insured person. We did a great interview with a gentleman named Brian Bloom who wrote a number of books called Confessions of a cpa. You know, he shares some stories about buying a family minivan from his future dead self, buying a retirement condo for him and his wife to be closer to the grandkids from his future dead self. So it's comical, it's interesting, it's a nice way of phrasing it to get our brains thinking differently. But fundamentally, cash value is a representation of the death benefit, hence why you're able to borrow against that. It's part of the death benefit that will eventually be paid. A question that I don't have on here, but I'm just going to add it, I think because it's tied to the same thing. Sometimes we'll hear people say, well when you die you don't get the cash value, you only get the death benefit. It's not that you don't get the cash value, you do get the cash value. It just happens to be the cash value is a directly related measurement against that death benefit. So upon death of the life insured person, the death benefit is paid, which includes the cash value component. One of the reasons that the cash must grow and accumulate to equal that future growing accumulating death benefit is because the insurance company, which as a participating dividend paying policy owner, you now co own that insurance company, especially in a mutual status, they have an obligation contractually to pay the death benefit. They must grow the cash value for the purpose of paying the death benefit. It's really an actuarial design that says, hey look, we need to grow this asset value so that upon the mortality age at the expected death of these selected lives of people, we have the capital base necessary to make sure that that claim can be made. That's one. Again, one of the reasons why you can borrow against it because really what you're doing is you're drawing down or drawing against, I should say against the future death benefit value. So when, when a death benefit is paid, first thing that must happen is it must pay off any indebtedness to the policy because you've basically already used or accessed part of that future death benefit while you were alive. All right, next question. Is IBC for everyone? Well, I'm going to use some opinions here. I think IBC should be for everyone. That doesn't mean that everyone should do ibc, but can everyone do it? Fundamentally, the answer is yes. Should everyone do it? Is maybe a better question. And that ties to mindset. So. And it also ties to financial circumstances. If you're not in a current position, financially speaking, where you've got more money left over at the end of the month or the end of the year than what you're spending, probability is you should be considering other help than doing ibc. Now, what we find with people when we meet with them as advisors and coaches in this space, well trained advisors, authorized practitioners, they've learned through time and through experience and understanding to help figure out how money is moving through someone's budget. Monthly, annually, weekly. However it is that you're spending your capital and often there's either stagnant money or efficiencies that can be created on how money is being allocated throughout your life and your budget. That was a little bit of coaching and some understanding where you realize, oh, wow, yeah, that's actual money that I could be working with. I know it feels like I don't have any leftover at the end of month, but it's because of how I'm prioritizing my money. How do I get started? Nelson says in the book, the most important word that comes to mind is desire. Without it, you probably can't do it. Remember Parkinson's Law back in part two of the book? Everyone is already spending all financial resources on what he or she thinks is best. There has got to be honest introspection at this point. And a commitment to get out of financial prison must be a burning desire. It's going to require a change in priorities in life, recognizing that controlling the banking function personally is the most important thing that can be done in your financial world. So Nelson really spells it out right there. And then he goes on to say, I strongly recommend that you find a life insurance agent that is thoroughly familiar with the infinite banking concept to act as your coach. In all probability, such an agent will be thoroughly familiar with questionnaires that will help you find out how you're spending money now and show you ways to redirect cash that will flow and build up your banking system. Above all, you must be patient. It's going to take years to get started and it needs to be a lifetime commitment. Everything that we need is right there in that statement. So. So you have to have A desire you have to have a willingness to learn, to be coached, to be educated. You have to understand that it's going to take time and it's a commitment. Implementing the process of becoming your own banker in your life isn't just something that you do and then you just walk away and forget about it. If you're really going to harness and focus on Nelson's principles as outlayed in the book becoming your own banker, take effort and it's going to take time. And so you know, once you make a decision, you're making a lifestyle decision. It's something that will be with you and incorporated in all future financial growth aspects of your life. Because of the way that the mindset and the mentality around the process is. So it's not just something that you kind of set and forget. There are some really beneficial set and forget features of the product, of the insurance product itself, so that there's some nice advantages there. The actual process of banking requires your effort. Just like nowadays if you're doing online banking transaction, you're moving money from here to there and here to there and here to there, and you're spending money on this and spending money on that and you're investing money here and you're like you're doing all these things in your active day to day life. Now you're doing banking right now. That transactional aspect of moving money from one place to another in a relatively short period of time is what banking is. So the process of that having a greater harnessed ability to control that process while optimizing some efficiencies on the accumulation of your asset base while wrapping it around with this nice big tax free wrapper called a participating whole life insurance, you're really able to do an awful lot more with the same dollars. But can't happen without the right mindset, without the right foundational thinking principles in place, you won't achieve the right level of success. So is IBC for everyone? It could be. It effectively isn't because it's for the people that have developed the right mindset. They've done the homework, they've done the work, they're ready to make that commitment to get started and they have the financial means to do so. And if you don't have the financial means to do so, you should still seek help and coaching and find out when you'll be able to do that. It doesn't mean that you shouldn't be actively trying to do more financial things to your benefit in your life. You should. And if IBC or its principles and ideas inspire you to do so and you get your financial house in order, well, then it won't take you very long before you can begin implementing that process. The general principles can still apply to your life. You just might not be an appropriate time to get the product or the insurance component to help you optimize that thinking in your life. Taking frequent loans and paying them back increases the size of your system. Wrong. Taking loans doesn't increase the size of your policy system. Paying them back doesn't directly increase the size of your policy system. Paying them back, as Nelson describes, with a spread of quote unquote interest or paying more than is necessary effectively is. Think of it as like a forced savings mechanism where you're, you're harnessing the money that's flowing through your life to cash flow. You're being very intentional about how you're directing that cash flow. And because there's excess that's going back to the policy or system of policies where you want to earmark some of that. According to Nelson's principles for growing the system, that means ideally that money, that excess amount or the quote unquote extra interest value needs to find its way into premium. Premium is what grows the size of the system. So if there's no room in a current policy or a number of policies you might already have. Nelson teaches us in the book that it's all about of our imagination. So you may need to consider adding another policy into your system so you have another storage place. What it shows you is that you're continually increasing the size of your effectively savings because of your habits. And the result is that it expands the base of everything that you're doing so that it's all growing and accumulating on a larger basis. Essentially, by the way, if you don't have the book, you should get the book would encourage you to do that. I'm going to go to page 58 and at the bottom of page 58 there's a footnote that Nelson comments and this often missed or overlooked. The first one, two, three times someone's reading the book, working with a coach, they'll point these kinds of things out, things that they've learned and discovered. They'll help you recognize and see how these pieces come together as you're going through the book. Because there's just so many golden nuggets in here. So from Nelson's book, actually this interest is not really interest. It is additional premium or capital that has been paid into the policy that equals the interest that was being paid to the finance company. That is the reason it is adding to the cost basis of the policy. If you have trouble understanding this, go back to the grocery store on page 15. If you still don't understand this, then contact me. Well, unfortunately Nelson's no longer with us, but you can contact an authorized practitioner and have a good discussion about this to seek some clarity and seek some understanding. We also have a treasure trove of resources available on the Bankers Vault Channel. There's a whole playlist of a Nelson Nash seminar available. And in the later segments of the videos he actually goes over this section of the book and he shares additional commentary and talks about this to some degree. So that would be a great resource for you. Another great resource, again, depending on where you're at in your journey right now, would be head over to watchIBC.com you're going to get a great fundamental understanding of this process and implementing in your life and you're going to be able to hear some of the commentary and examples of how people are implementing, including Nelson, and help set the right baseline for you to determine if this is right fit for you. So head over to watchIBC.com Another thing I want to mention about this, as far as I get all the interest back or I if I pay myself interest, it goes to increase my policy that it does not directly happen. It can happen intentionally by making sure it goes to premium. This is where people get again, get a little bit misleading, misconstrued again, they think that lots of policy loans make the thing grow. It's not true. It's being intentional with the money and understanding how to get the excess and how to develop good habits. And the result of those habits is that you actually end up saving more. Less money is leaking out of your financial life. Going to the things like Tim Hortons and Starbucks and like all these associated things that our money tends to disappear to where we don't really recognize that it's happening. But because we're being intentional, we've set a payment aside and it's coming out of our account on a regular basis. We get accustomed to making sure the money is there. And because the money's there and it's going to a storage facility, think of the policies and the system of policies as a storage facility for, for some of that money, that wealth, it's, it's going to a place where although we can still access and touch it, it's a little bit out of sight, out of mind. The virtue of that happening means less is kind of sitting in your bank account, which means in general, your spending pattern starts to shift and change and less money is just leaking out of your financial life. So a lot of this has to do with, again, just fundamental basic budgeting habits. And there's a psychological advantage to implementing these types of strategies. The result of those well practiced over time has an aggregate effect of building up more capital for you to utilize for opportunities that will surely appear. Is IBC a scam? That's a good one. Well, I don't know. How do you define a scam?
Let's see. I've been practicing IBC for about 14 years. As a time of this recording, I do not feel as though I've been scammed in the process. But could some people believe that? I'm certainly sure that they could. I think it's important that you do your research. What does that mean? Well, number one, if you have not read Nelson's book Becoming youg Own Banker, not only do you have an opportunity, I don't think any human being should be, you know, blasting him on blogs or comments or whatever that it's a scam. If they haven't a read the book, read the book again. If you haven't read it at least twice, I don't think you have any basis to be doing that. Watch the Nelson Nash documentary film. This is R. Nelson Nash, creator of the Infinite Banking Concept, and either read a number of other books, such as the Case for ibc, I do encourage, although I am biased, Cash Follows the Leader. This is our most recent book from the Wealth Without Bay street series. It does talk about the fundamentals of how the policy itself grows. And it's a short, easy read and you probably have a few more videos to watch. So if you haven't committed, roughly speaking, somewhere between four and 10 hours of education time into your life to determine this, then and all you've done is read a couple blog posts or something, or you watched a 10 minute video from some random talking head on YouTube. You don't think you have any basis to determine that? Another example of what you can do is on the Wealth Without Bay street podcast. We have an entire client series. It's a whole playlist. You can walk through that playlist. There's probably 25 different conversations there with existing clients practicing this process in their life. And you can determine pretty effectively if you watch those. If those people think it's a scam based on the success that they're having, I think this is a dumb question. Be perfectly blunt, but I don't want to discourage anyone from their learning journey. I just think that you need to put more effort into the journey and the people that do that, they come to a realization really quick. Here's one thing I can say. Once you know that IBC and the ability that you could become your own banker is available to you, the knowledge that that is out there generally won't leave you. Once you've learned something, it's very hard to unlearn it. Whether you decide to implement or not is really your call. That's part of what these videos are about. It's giving you the opportunity to take in that learning, make a good decision for yourself. The only one that can be responsible for you and your money is you. And so that's part of the advantage of becoming your own banker and implementing Nelson's concept and the general principles that he outlaid is that it allows you to have more control over your money regardless of any insurance product that may or may not be involved has nothing to do with the insurance. It has to do with human behavior. It all rests on there. Speaking of human behavior, here's a good point I'm going to add to this. So this is a little review piece on page 40 of the book. It's reviewing the second section of Nelson's book. Number one, pitfalls of human Behavior. Make sure that you fully understand all five factors. They are the bedrock in building your banking business. For instance, if you can't whip Parkinson's Law, then don't bother to read any further. You are wasting your time and you are doomed to slavery. Nelson was funny like that. He just wanted to lay it on the line. Parkinson's Law is one of the key components and it has to do with expenses. Rise to equal income, a luxury once received becomes a necessity. These are human behaviors that we all contend with on a regular basis. Being aware of Parkinson's Law, recognizing how it shows up in your personal life and circumstance and then seeing it on an ongoing basis because it will continue to show up for you. Being able to kind of stop it in its tracks and challenge it is the type of thing that will allow you to aggregately save and accumulate more capital. Infinite Banking concept is human behavior oriented. It is not insurance policy oriented. It has very little to do with the insurance contract. Nelson says in the book multiple times that the policy owner's behavior is vastly more important than the behavior of the insurance company because the insurance company is going to do whatever they're going to do. How you interact and how you choose to voluntarily commit premium into your system will determine the outcomes that you achieve. Next question. Is IBC too good to be true? IBC is not too good to be true. I do think, however, though, there's a lot of content out there that people tend to use kind of some gregarious language. And I would imagine I've been guilty of this in myself certainly in the past. We, we take kind of shortcuts in how we make explanations to people to try to keep things simple. But the reality is IBC isn't too good to be true. But some statements or some of these misconceptions, I think we've already done a few here, may give us the conceptual view that it's too good to be true. Like I get all my interest back. Well, you don't really get all your interest back. You can have the equivalency of interest that you paid back because of the accumulation of overall capital. So that has the perception that you got all the interest back. But do you actually effectively get it all back? No, not, not exactly. Like it doesn't work like that. There is language that's used that can give people, I think, the perception that it might be too good to be true. However, those who've been doing it for a long period of time, who can assure you that it's not too good to be true, but you'll have to take their word for it, don't take mine. Go talk to some other people that have been doing it for three, four, five years and talk to them about their experience taking policy loans, repaying loans, the simplicity, earning some dividends from life company growing, the tax free death benefit, the advantage of having an authorized practitioner, being a coach that helps them in multiple areas of their financial life outside of just ibc. So those are all things that I would encourage anyone who's exploring this concept to dig into more. Your insurance policy is your bank. Wrong. That is oversimplified, not accurate. Your insurance policy is your insurance policy. Anyone that says that it's something else is misleading a little bit. A bank in the terms of the traditional, what we're conventionally accustomed to is a financial institution. They have certain things and rules they need to abide by to become a chartered bank. That is not what's happening here. But in the same respect, anyone in Canada has probably driven a car or landed in a snow bank. Well, a snowbank is an accumulation, a stockpile of snow. That's what a snowbank is. You've probably donated blood or maybe received blood from a blood bank. Well, what is a Blood bank. Well, it's a place probably with air coolers and chillers where they have lots of bags and things of blood hanging there. Well, that's kind of weird and cryptic, but that's what it is. It's a storage facility for blood that can be accessed as needed for inventory to go and save lives all over, you know, the nation. Okay, that's what a blood bank is, a bank in the terms of storage. That's what it is. It's a storage facility, it's a warehouse for something, it's an accumulation of something. And so that's what fundamentally the word means. Because we associate a conventional banking system, you know, brick and mortar bank debit cards, online banking, etc, our brain goes to that because it's in the financial category. We're talking about becoming your own banker in the financial category. Well, you can save and you can borrow money from a conventional bank or you could save by the way of making premium payments and you can borrow money by the way of policy loans from a different financial institution called an insurance company. So those, you know, those two items are fundamentally similar between these things. However, the insurance company is not a bank, your policy is not a bank. You are the banker who operates these things in such a way that it mimics what you might do at a conventional bank. Another important thing I want to mention on this, this is on page four of Nelson's book, right at the very beginning of the book. Let me be abundantly clear. I am not talking about a bank in the conventional sense of the word. I am demonstrating that one can use dividend paying whole life insurance to solve one's need for finance through one's lifetime. Very simple. He literally states that right in the first two pages of the book. So he's not trying to replace or compete or whatever with traditional banking system. He's simply saying the function of accumulating money, accessing money for the important financing needs that you have throughout your lifetime, which are extensive, can be done at a different type of financial institution. And by doing it that way you're, you're in now in mutual free contract with hundreds of thousands of other people all across the nation who are participating in the mutual profitability of that common pool of money that is well managed. And you don't even need to go and hire staff and employees and go and build buildings and do all the excessively difficult, you know, capitalization oriented things necessary to create a true brick and mortar bank. You have all the functions of that available to you in an institution that already does all that similarly, which is an insurance company minus the transactional requirements. So again, you would still need the usage of a commercial bank for the convenience of online banking and day to day transactions and all the associated things you're accustomed to in those conveniences for the purpose of storage and financing for your future needs and that of your family. You can reduce your dependency on this world and you can transfer and control that dependency that you still have from this world. And by doing so, with good habits and behavior, you can become more profitable as a result. Aren't the premiums expensive? Or another common one we hear in regards to this is, hey, I'm older, won't the premiums be much higher on me? Shouldn't I just insure my kids or my grandkids first? This comes down to a fundamental, I think, misconception about insurance in general. As we learn throughout life over time as you get older, for a similar amount of insurance coverage as you age, if you want the same coverage level, then mathematically the insurance company must charge you more money as you get older for that same coverage level. That's just a logical conclusion. Otherwise how on earth would the insurance company be able to guarantee providing that benefit to your family or to your business? So if you are aging, which everyone is, I haven't met anyone that isn't doing that. I know some people who look like they aren't doing that, but I don't know anyone who actually isn't aging. But you have a similar same level death benefit, whatever that is. And if you're creeping up in age, well then to get that same death benefit the next year or the year after, it will cost more for that benefit, regardless of the type of insurance. Okay? I don't care what the type of insurance is. That's not, not has no bearing on whole life or dividend, whole life or the infinite banking concept, none of that. Now when it comes to the infinite banking concept, the goal or the objective for the consumer, once they learn and discover and decide this is what they want to move forward with. This is a financial methodology that they want to embrace as a fundamental component of everything they do moving forward, then they will want to pay more premium because the premium builds up the death benefit, which builds up the cash value. So as the death benefit rises and goes up, the cash value is sucked along with it like a vacuum. Okay? The cash is just chasing after that future death benefit has no other option. The death benefit is a future cash flow and the the cash value is a representation that is continually growing to create and reach that future cash flow. As you start your system or your program, you're going to be working with whatever you have to work with, regardless of your age. Everyone's got different financial circumstances. Working with a coach, you'll be able to figure out, hey, this is a reasonable number for us to get start with. It's reasonable, it's sustainable, we feel comfortable about it, it has flexibility, it gives us lots of options. Boom, we're going to commit to getting started. There's going to be a minimum premium amount and a flexible premium amount. So you have to pay the minimum, but there's optional value that can be over and above that. That's all done and built with your coach. So the amount of death benefit that you receive as you get older is simply less. So as an example, if I'm 30 and I want to commit.
$20,000 a year into my program, I'm going to have a minimum amount and a flexible amount. Whatever that is, it doesn't, doesn't matter. Whereas if I'm 55 and I want to commit 20,000, the same 20,000. Well, the, the breakdown of that minimum premium and flexible premium might be different based on the age, but the 20,000 is the same. The amount of death benefit that you achieve, well, the 30 year old is going to get more death benefit, the 55 year old will get less death benefit. It's just a logical, very simple, simple scenario. But the 20,000 that is being used to fund the premium, which is the voluntary choice of the 55 year old and the 30 year old, doesn't change. The idea that it's expensive is misleading. It's not expensive because you, as the policy owner decide how much you want to pin in. So if it's too expensive for you, well then you did something wrong in the design phase. Or you need to go back to Nelson's book and reevaluate what you're up to. Because if you're going to get all the capital back, then it wouldn't be expensive. And to further that point, I'm going to go to one of my favorite pages of the book, page 85. If you knew at passive income time that you would be getting back everything you put into a system potentially tax free, would you object to putting more money in it? Very simple rhetorical question. So as the policy accumulates in cash value, it doesn't take very long for you to be in a position where when you put in, going back to my previous example, 20,000, the policy accumulates in that same year 21,000 and then the next year you put in 20 and it goes 22. The next year you put in 20 and it goes 24. So you're creating a ever increasing accumulation on that value by making those premium payments on a consistent basis. Oh, and then next part of that question was, shouldn't I insure my kids or my grandkids first? So the answer to that is it depends. What is your objective? What is your need? Who needs the coverage? What is your estate tax problem? What does your current debt look like? What do you want to leave behind for your kids and your grandkids? Do you want to leave them behind a policy or do you want them leaving behind tax free death benefit that they can fund their own policy? Do you have a spouse that needs to be looked after? Do you have enough remaining assets that can create an income stream for your spouse if you're not insured? Like, there's a massive amount of questions that need to be taken into consideration to help determine who's the right insured person. In some instances we may have someone that's not insurable. Well, if that is the case. That is the case. In which case who's the next logical body that we're looking at? Or maybe you have a larger amount of asset value or income free, free cash flow that you can work with, in which case maybe we're getting multiple people insured right out of the gate. All of these things are common, but they're also very unique to the specific circumstances of an individual family or business owner. Everyone's got a different nasty looking financial junk drawer. You gotta unpack the junk drawer, you gotta sort everything, which is what a coach helps you do. With your combined effort, working as a team to figure out what's a sensible amount of premium that you're comfortable with that you want to deposit. Then we figure out what's the death benefit that you need and how can we try to match all those things together in an effective manner that makes sense to you? How do I pay my premiums and also find the money to pay my policy loans back? Yeah, so this happens every once. We get these questions. And I think some of that comes from the confusion of I think people trying to. They read Nelson's book and they think, okay, well I got to. If ultimately my premiums, my income should match, well then I have to go like really, really big with my whole plan and my whole system. And what if I do all that and then all my money's going to premium, but how am I also going to pay my loans back. So I need to take some loans to go and go on vacation and pay off my car and like all these kind of things. So I think we just get a little bit overwhelmed with what the possibilities are. And we were some, to some degree people are trying to maybe stretch a little bit more over stretch. There's nothing wrong with having a goal and a healthy target and stretch. But it's okay just to get started. Like it's okay to just get started as long as you're getting started with a number that is actually reasonable to your life. If you make 250 grand a year and you want to start with a 200amonth policy, that is illogical. That doesn't make any sense. There would have to be a fundamental, really good reason why you're doing that. Is it just because you want to dip your toe in the water to see how the insurance policy works? That's fine. But rather than just doing that, unless there's a fundamental need for you to have a $200 a month policy. But if the purpose is to figure out and learn about ibc, do more education, Read the book again, go back and watch a few videos again, get some more education to recognize what's happening up here with your thinking relevant to your income and your asset base. Like that is just a weird and odd number. We do find with people that often. A lot of different books talk about the richest man in Babylon. Among others, recommend that you should be saving 10% of your gross income. Okay, well, that's a good starting block for most people. Many people want to save a lot more than that. So we have people that do a lot more than that. There's lots of ranges there. If you don't have 10% of your gross income to work with, well then what do you have? And have you worked it out with your coach? Have you figured out how you can maneuver some money through your budget to create more capacity? Do you have variable times in your year where lump sums of money show up unexpectedly that could be added and utilized as part of the flexibility of your program? So all this stuff happens when you're having a good conversation with someone. Again, it's not as simple as put this much of your money into a policy and, you know, brush your hands off. Go watch the hockey game. Like you're gonna put a little bit effort in. Sorry. It's okay. It's okay to put effort into something that that's gonna have tremendous financial benefit to your life. It's really. All right. So again, how Do I pay your premiums and also find the money to pay my loans back? Their answer to that is, you communicate with your coach about what your objectives are, what your financial condition is. You get clear on a policy size and design that makes sense, that you feel good about and can commit to minimum premium, flexible premium. Maybe you have a little bit of a high target, so maybe there's some wiggle room in the flexible premium or, or a plan in place for how to create another policy in one or two or three years. As you're growing, you're expecting a. You know, as an example, you're, you're an apprentice electrician or welder, and you know that you have an income bump when you complete your next level of schooling and you get your hours and then you're going to have another one. Well, those are known natural events to accumulate an increasing level of income. Some strategic planning can be taken into consideration around that. And then again, how do you pay your loans back? There has to be a balancing act there to get things started. But once you start taking loans and doing stuff with the money and practicing repayment, you will start to recognize and see things that you couldn't see before because the act of doing it teaches us so much more. It's like getting on a bicycle. You are going to fall down and scrape your knee a couple of times, but once you learn how to ride the bike, you never forget. So similar to that scenario, you have to actually do, you have to do to learn. That's what's going to give you the best intellectual shortcuts to make this functional and more profitable in your life. When you take a policy loan, you are borrowing your own money. Wrong. That's false. You're not borrowing your money. You're borrowing the insurance company's money. Here's a little example. I've got a water jug here and I have a coffee mug, coincidentally. Let's just assume that the coffee mug right here is a representation of my cash value. This is my asset value available to me. The water jug or water bottle is a representation of the general fund of the insurance company. So when I take a policy loan, this is the cash value that I have. This is a general fund. Where does the money come from? The money does not come out of your cash value. Your cash value is completely untouched. The insurance company sends you a policy loan from the general fund of the insurance company. Insurance company must put money to work. By the way, there's a great diagram on page 26 of Nelson's book with the money Pool, the money pool must put money to work for the benefit of all policy owners. They have no choice in the matter. They must do this. One of the areas they can put the money to work with is with the policy owner. They have contractual right to access whatever can be lent from their asset value from their equity of this contract. So they can borrow against the cash value, but the cash value does not deplete or come out. And you're not borrowing your money, you're borrowing the insurance company's money which you co own because it's a mutual company. Okay. Why would I take a policy loan rather than use the cash I've already set aside? Hmm, this is a good question. The answer is it depends. So many people will say, well, you should always take a policy loan. And many people will have different feelings on this. I'm going to give you my opinion. My opinion is this, especially if you are new, because taking policy loans for the sake of taking policy loans does not increase the size of your system. However, if you haven't taken a policy loan yet or you're new and you're in your first, you know, whatever, three months, one year, two years, and you haven't had a lot of practice, what makes us better at everything that we do in life is practice. By getting the practice on anything, like sports, like working out, like whatever you've done for training, for your career, you only get better by doing so. Why would you take a policy loan rather than use cash? In my opinion, you would need to do that because you need the practice, practice, practice, practice by doing the practice. And I can tell you from multiple conversations with clients over well over a decade that the act of taking the loan, receiving the loan, creating a repayment plan, making the repayments, seeing the result, doing it again, has been way more impactful to them than anything that they've done financially. Don't take my word for it. Talk to someone else who's done it before, talk to them about their experience and actually go and do it yourself. If you have an existing cash value policy, go take a policy loan. Do not take the loan if you don't have a reason, unless you just want to test it or a plan to repay. Okay, but go through the transactional components of that to see what it's like and learn from it. You will learn more by doing than by anything else. How do I get started with IBC? Couple key things. Number one, go to watchibc.com and then additionally I'm going to reference again page 65. Nelson really focused on the fact that you need. A couple of things need to happen. Number one, you need to have desire. Okay? You have to have desire to do this. Understand the Parkinson's law. You're already spending financial resources on everything that you think is best. You have to have honest introspection and a commitment to get out of financial prison. Must be a burning passion, I would go so far, say, or a commitment to improve your financial condition. There's something that IBC is going to do for you to help you fulfill a goal, objective, a dream, a desire, a legacy, whatever that is, get clear on what that is and then commit to the process. He mentions a change of priorities in life. Earlier in the book, Nelson talks about how it got started for him, how the concept got formulated in his brain. It actually happened, you know, down on his knees at 3am praying, praying, praying to get some way to get out of the brutal financial condition he had created for himself through his own behaviors. And he realized what needed to be done. And he recognized he was thinking about everything in the world the way that everyone else was. If he adjusted his thinking and he recognized that he could put more money into premium, he could build up the reserves he needed to solve all these problems in his life. In order to do that, he also mentions in the book that he had to have a dramatic change and reevaluate the way he was flowing money through his life, how he was spending money. He found money by changing his spending patterns and he realized if he did that he could commit more capital to growing his system. That it would take time, but by doing that he would create the solution to his problems and that's really how it all started. The other thing that mentions on page 65 is the importance of a having a coach and then organize or join an already in existence wealth club. Hear the support of others that are working their way out of darkness. Be sure to include members that already have a good track record of practicing the principles of the infinite banking concept. This is important because you need to surround yourself with others of like minded understanding. You don't want to be a victim of feeling that you are a lone ranger. Unfortunately, when it comes to this thing called infinite banking, there is a lot of lone rangers out there. So it's important to get connected with a good environment of people like this. Again go to watchIBC.com you're going to learn how to get connected with a community of people by doing that. We all need the nourishment of a favorable environment. No one elevates himself much above the environment in which he operates. Man, that's just gold. Pure gold. Anyhow. So there you go. There are some facts and some misconceptions. Go ahead and make some comments below. Let me know some other facts that you would like or frequently asked questions that you'd want addressed. And also, what are some other misconceptions or things you want clarity on? And go ahead and leave some of those comments below. Cheers.
