The REAL Risk of Infinite Banking (And How to Avoid It)

If you do not understand the problem, the solution just won't matter to you.

It's probably not the right tool for the job, like it'll do it, but it's not going to do the greatest job as the tool. It's 100% designed for that job.

There are no disadvantages to being in a position of control.

And I think that that's a risk that people who are implementing the process tend to fall into a trap.

One of the things that I experience, and I know that you, Rich, and our teammates experience, is that when people are wanting to get into a conversation, they want to discuss the infinite banking concept and they've developed some degree of understanding based on information that they've consumed, whether it's on social media, YouTube, et cetera. When there isn't clarity, and it's evident that there isn't clarity on the infinite banking concept and the essence of what it actually is, most often that person has not read Nelson's book. When we ask that fundamental question. Have you read the book titled Becoming youg Own Banker? Because the author of the book is the pioneer, the engineer, the developer of this concept. I didn't even know that book existed. Or no, I haven't read that book. That is obviously risky because if you do not understand the problem, the solution just won't matter to you. And if your behavior creates an outcome that becomes a financial disappointment, like borrowing against the policy, not repaying it, not paying your premium. How you avoid these risks altogether and how you set yourself up for long range success is that you follow R. Nelson Nash's golden Rules. Golden rule number one, think long range. Meaning think three generations past your own. Golden rule number two, don't be afraid to capitalize your system. Capitalizing your system means paying premium, repaying policy loans with more interest than what the insurance company calls for. Third golden rule is don't steal the P's, don't borrow without the intention of repayment. Fourth golden rule, don't do business with banks to the greatest extent possible. Control how you're financing the things that you need throughout the course of your lifetime from this place, not from the place of someone else's system.

And then beholden to someone else's rules.

Right, exactly right. And the fifth being to rethink your thinking and what, what Nelson meant by that. You're approaching a, a new concept, new to you. It's been in existence for decades, but it's new to you. It's going to require a shift in your thinking because the, the fundamental truths will always Be there. Your money must reside somewhere. Someone must perform the banking function as it relates to your needs. There are no exceptions. And so when people take a moment and they think through what are all the things that I've financed up to this point in my lifetime? And when I say finance, I mean paying cash, leasing, or having some form of structured loan or credit facility that you've used to finance.

Something that includes things like your cell phone in your pocket, by the way.

Yes.

You're financing that with the cell phone company or Costco or wherever you bought it. And you're on a plan. Well, that plan includes essentially the finance charge for the cost of that thousand dollar phone.

And you're earning an income from some source. Maybe it's employment income or it's investment income. Nelson asks the question, and again we, we always go back to his book because that's where you get the clarity on the concept. And he asked the question, is it not true at present that all of your income is flowing through the books of someone else's bank? Well, of course that's true. We're addressing 99 plus percent of the general public. If you understand that fundamental truth, then you would, you would absolutely understand that your money must reside somewhere.

Look, we all think that we should be paying only your fair share in taxes. Just so happens I think your fair share is lower than probably what you're paying now. Well, we talk a little bit about that in our book. Key taxes away from your wealth. You can get a copy and access to the bonuses by going to keeptaxesaway.com that's keep taxesaway.com head on over there and pick up a copy today.

What disadvantage would there be to controlling how you finance the things that you need throughout your lifetime? Well, logically, a person would immediately say there are no disadvantages to being in a position of control. But the concept is often sensationalized where we're not describing solving a problem, we're describing some. This is the best thing before sliced bread. And you can get rich buying cars, or you can have $1 doing the job of 2. And all this other misinformation that just simply is factually not true. And so the real risk is not having clarity, not fully understanding the essence of what the infinite banking concept actually is. In a ridiculously simple manner, it is controlling how you finance the things that you need throughout your lifetime and recapturing the interest that you would otherwise pay to someone else's bank or someone else's finance company. That's it. Ridiculously simple.

You know, another risk or I think it kind of ties into my magic bullet element a bit to a degree is once you're in the process of implementing this and you're, or you're starting down the path sometimes, and maybe this is because of the marketing, maybe this is the way that some advisors run their practice. I don't know. But I think once people get down the track where they're starting and they, they, they really get, get connected with the idea and they, they love what they're, what they're seeing, but they, they tend to believe that it's going to do more for them than it will. So what I mean by that is you still need to go and build assets and create other things that are going to create streams of income for you. You know, so, so putting all of your, you know, once you, once you might realize, oh well, this does all of these things. I can put money in, I can borrow against it. It's got some growth attached to it. There's some tax free capacity on, like my family's protected with its death benefit or my business is protected, you know, maybe I can draw passive income out of this later in the future years. Like there's all these things that it can do. So it's like it starts to feel like it's the Swiss army knife of financial products, which is good. It's got a lot of things in it. But it doesn't mean that, you know, if you look at a Swiss army knife and you want to just use the knife component versus you have like a skinning knife for fishing or hunting. Well, if you're hunting, you probably want the skinning knife for that task. And if you absolutely had to use a Swiss army knife, like you might be able to do it in a pinch. But it's probably not the right tool for the job. Like it'll do it, but it's not going to do the greatest job as the tool. It's 100% designed for that job. Right? You've got this Swiss army knife. So can you go use that Swiss army knife, in this case borrow against it to go buy the right, the right skinny knife? You know what I mean? So like you can create these other things with this one thing. And so I think people tend to, they almost tend to, they, they realize there's almost like this peaceful element that comes with implementing this process. And they're like, oh man, Jason, thank God I've got this. Now I can kind of coast a little bit on everything else. I can just sit back on the couch with a bag of potato chips financially and relax a little bit because I got this thing working for me. Like, well, sure, you could do that. But what are you missing out on by not activating that to try and generate more assets, more cash flow, more capacity, more value? You know, you, Jason, you just recently bought a business. You've bought multiple businesses and you funded business equipment and growth and expansion for your businesses, which is where you have the bulk of your investments. Your investments are in people, processes, technology, and businesses that create cash flow. That's kind of your model of the world. But you use the home base of insurance contracts, a whole lack of them, to be the financing machine for all that. And so the businesses and the various business entities have, have to produce a cash flow result, assuming that they're profitable. And that comes back to the machine as the, as the loans go down and the policies go up, you can access and say, hey, I've got enough equity in the machine now. I'm looking at other opportunities. The next business structure I'm looking at is this one. That's the trend I want to go after. So that is a way that you're creating amplification of your net worth, but you're not letting it just sit there, do nothing. And I think that that's a risk that people who are implementing the process tend to fall into a trap. They get comfortable. And unfortunately, being too comfortable means that there's no reason. All of your growth comes from some measure of discomfort. Go ahead, watch the next episode. Click down below and make sure you click over here to subscribe to our channel.