According to R. Nelson Nash, author of Becoming Your Own Banker, The Infinite Banking Concept, the average American is losing 35% of their net income to interest paid on various loans (auto, home, credit cards, etc.). Even if a person saves 10% of their income, they still have a 3.5 to 1 ratio of interest paid to savings.
This is probably the main reason why many Americans never achieve financial success. Rather than fighting to obtain a higher rate of return on their savings and investments, it might make more sense to change the environment in which their money operates and capture all of that lost interest by creating their own bank.
Now I know there are sekptics out there, but let me explain some things...
Everything we buy is 100% financed!!! That's right, you heard me correctly. We either pay interest to someone else or we give up the interest we could have earned. Since we are not going to stop buying things, we must win by paying for things in a way that favors us instead of "them." Since it is the banker who always wins, we must do business like a banker!
What if could create your own bank?
You need to learn how to create you rown personal banking system and why self-financing is better for your bottom line than paying cash. Learn how to finance your next car - yourself! How to finance your next home improvement project - yourself! Simply put, you need to learn how to finance anything you want or need in the future - yourself!
Learn how to pocket that same profits as the banks you now pay interest to every month. This approach will offer you the chance to accumulate much greater sums of money than you ever thought possible by allowing compound interest to work for you, not against you.
This concept is not new, it has been around for more than 150 years in the form of investment grade life insurance. The concept of how to properly utilize the life insurance contract (which has similar transactional characteristics of the banking process) is what has been developed.
Some FAQs:
Q - Do I need to open my own bank?
A - Not in the literal sense. What you need to build is a banking system that will allow you to self-finance future purchases, such as cars, investment properties, and any other large ticket items that are normally financed.
Q - What do you mean by self-financing?
A - What most Americans don't realize is that everything we purchase is financed one way or another. It is financed by someone else which is most often the case with home loans, cars, and anything bought with a credit card. If we are not using someone else's money then items are financed by us when we pay cash. The true cost of paying cash for something is the interest and access to capital that we give up, we refer to this as Lost Opportunity Cost.
Q - Why didn't someone else come up with this concept sooner?
A - The answer is revealed in the uniqueness of the concept. The underlying contract of an investment grade life insurance policy has not fundamentally changed in over 100 years. This contract is central to the entire system. So, the concept of how to convert that contract into a tax-advantaged vehicle with similar transactional mechanics of the banking process is what was developed.
Q - Is there a drawback or major flaw in the system?
A - Since there is no perfect system, there are some obstacles in the details of the system. One is that you need to commit to a long term discipline versus a get rich quick program. You must learn how to use the system correctly in order to reap the benefits awarded by following the guidelines. You must use the correct life insurance contract along with its prescribed options, riders, and ratios. Lastly, you must believe that the system works becuase of fundamental economic principles, US tax laws, and insurance contractual guarantees.
More to come in a future blog or more blogs...
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