Remember our mission statement: **Throughout the entirety of our journey, our goal is to recapture debt. To accomplish this task we must begin with a paradigm shift in our thinking. Instead of giving our hard-earned money to banks and financial institutions who use our money to gain wealth for themselves, we will bring our hard-earned into our own storehouse (becoming our own bankers) so that we can create our own wealth! This storehouse is a dividend-paying (participating) whole life (permanent) insurance policy set up properly (customized) by an Infinite Banking Concept-oriented broker through a reputable mutual life insurance company.
In It’s A Wonderful Life, George Bailey begs Mr. Potter to give him more time to come up with the money he owes. What you may not remember is that George whipped out his life insurance policy as collateral to pay his debt, to which Mr. Potter responds:
Look at you. You used to be so cocky. You were going to go out and conquer the world. You once called me a warped, frustrated, old man! What are you but a warped, frustrated young man? A miserable little clerk crawling in here on your hands and knees and begging for help. No securities, no stocks, no bonds, nothin' but a miserable little $500 equity in a life insurance policy. [Potter chuckles] You're worth more dead than alive!
The policy’s $500 equity may not have paid off the $8K George owed, but life insurance has been a viable financial strategy for centuries. It’s the way Americans used to save money until the smartest people in the room told us their financial strategies were better.
These same gurus who, by the way, are the largest purchasers of dividend-paying whole life, have been bashing whole life for several reasons. One, their inferior financial products can’t compete with the tremendous advantages of whole life, and two, when whole life is set up and utilized properly it allows you to become your own banker which, in turn, eliminates your dependence on financial institutions.
The average American spends 30% of their after tax money on housing; 20% on transportation; 45% on living expenses; and less than 5% on savings. Most purchases are financed by institutions which charge interest and fees. Paying cash allows us to avoid the interest and fees, however, we end up losing the interest we could be earning on our capital.
Oddly enough, when people think of life insurance they think of death benefits. Those are fabulous in and of themselves, but the Infinite Banking Concept (IBC) focuses on the life benefit side. When set up properly, we can use the cash value of our policy as collateral and borrow against it. We can pay for cars, vacations, mortgages, school loans, payrolls, taxes, buy other policies, etc. all while never, ever touching our money within the policy that continues to compound as it grows.
Yes. We’ll pay a 4.76% annual rate on the money we borrow, but the interest we earn plus the dividends our policy pays us will offset those fees. Any loans not paid back are simply subtracted from the death benefit side. We’ll be dead by then so no worries there.
Life is a wonderful life. Despite all the shaking going on in the world, you can still find refuge. Take time to study and pray. If the IBC strategy isn't right for you, what have you lost? And yes, as you study your preconceived notions regarding finances will be shaken to the core, but once you get through that you’ll see the light. Promise.