I’ll admit, the first time I heard that advice it shocked me. Were the advocates for Infinite Banking leading some kind of revolution that included boycotting all banks? Was I supposed to go back to storing my money in creatively shaped piggy banks instead of having a checking account for my family and my business?
It definitely got my attention. As I continued to listen, and then did my own research, which included reading Nelson Nash’s Becoming Your Own Banker, I realized that he was talking about me actually becoming my own banker.
It’s not that borrowing is necessarily bad. It’s who I was borrowing from. I often paid cash for things and thought I was “getting ahead” and “beating the system” by doing so. I wasn’t! I was losing the opportunity cost – the ability to use that money elsewhere. Maybe not AS BAD as paying interest to a bank, but still putting me behind. And that brought me to the real question: Who controls the banking function in my life?
By financing my truck, my home, and my business (and unfortunately, as a younger man, occasionally floating some credit card balances) I was giving control of the banking function to outside institutions. I was feeding a system designed to profit off of me and everyone else who did not understand how to take back that banking function for themselves.
I’d often thought about how, in any size city or town, it’s typically the banks that have the nicest buildings. Why? Because they understand how to use money. To multiply money (with the Federal Reserve’s help, but that’s another article). And banks are really good at controlling the banking function. And most of us have NOT been trained in how to leverage this banking function for ourselves.
Most people pay interest most or all of their lives. They interrupt or ignore the compounding of their money. They recycle interest payments to outside lenders. And this, unfortunately, is considered normal.
The truth is that we finance everything we buy. We either pay interest to someone else, or we give up interest we could have earned by spending our own cash to buy things.
But there is a way to take control of the banking function and steer the flow of interest BACK to ourselves. And it is fairly simple. Through properly structured, participating, dividend-paying whole life insurance from a mutual insurance company, a person can build GUARANTEED cash value, receive historically reliable dividends, and borrow against one’s OWN cash value WITHOUT hurting the total value that is generating the interest and dividends. In other words, uninterrupted compounding interest for life, even when you use the money!
So you can essentially have your cake and eat it too, financially speaking. Too good to be true? No. Because this is not a get-rich-quick scheme. This is get-rich-slow-and-disciplined over years, in order to build generational wealth through controlling your own banking function.
Here is an example. Many people finance cars their entire lives. The average American replaces vehicles every 5–6 years. Adding up all that interest over their lifetime of driving, that is a pretty mind-blowing amount of interest. But the real damage isn’t just the interest — it’s the lost compounding on those interest payments.
When you become your own banker:
This simple change in thinking and change in banking control unlocks a wealth-protecting and wealth-building force in your finances that will have impact for years and generations to come.
And don’t get stuck, like I did for months, on the rate of return comparison. What is the internal rate of return? What is the policy loan rate? How does that compare to this investment or that bank’s rate? Wrong questions. The question is WHO controls the system? Control is more important than rate. If you don’t control the process, someone else does — and they will always design it in their favor.
When you control your own system, your own banking function, you protect your money, you grow your money, and you prevent yourself from impulsively spending your money. You build control and discipline into your finances and into your life.
So it’s not that we are calling people to boycott and picket outside the First National down the street. First National is going to be just fine. But how about you? You don’t have to finance your life through them. You can reclaim control of your finances and function. You can stop thinking like a borrower and start thinking like a banker. Your OWN banker. And you will build control, access, and wealth when you do.
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