"If it sounds too good to be true, it probably is." - Every parent on Earth
You've heard it from your parents, who heard it from their parents, who heard it from ...
Well, you get the idea.
The old adage about something sounding too good to be true has been around for as long as parents have been preparing their children for the realities of life.
And while the axiom has probably protected countless Americans from sending copious amounts of cash to that Nigerian prince, it's also possible that it has held back many people from pursuing their financial dreams through legitimate investment strategies.
Think about it, if you approach everything with the suspicion and cynicism of a homicide detective, you're going to kill any chance you have to maximize real, tangible, too-good-to-be-true opportunities – like infinite banking.
Infinite banking is the process of using dividend-paying whole life insurance policies as a way to quickly build cash value – cash value that you can then "borrow" from yourself to finance major purchases.
It's known as "being your own banker," and it's not too good to be true ... it is too good of an opportunity for some people to pass up.
Should You Fire Your Banker?
"Fire your banker." Sounds kind of harsh, doesn't it? But when you think about it, would you really want to work with your banker if you had other, less expensive options?
Think about it: Every time you make a major purchase, you pay interest. You either pay interest to someone else (most likely a bank) or you lose out on interest you could have earned.
Infinite banking allows you to avoid paying interest to someone else (most likely your banker) and keep the interest you earn.
If you like that idea, you should definitely figure out if you're in a position to leverage the power of infinite banking, fire your banker and open your own family bank.
Are You Ready to Become Your Own Banker?
Of course, most people are in no position to immediately become their own banker. Most people need a little time in order to take the four steps necessary to build up enough "equity" in their life insurance policies to be able to borrow against it for major purchases.
Here's a look at those four steps:
- Acquire permanent life insurance. Permanent life insurance is the key to infinite banking. You can take out a policy on yourself, your spouse or domestic partner, your child, a grandchild or even a key employee.
Who the policy covers isn't as important as the insurance you secure – so make sure it is permanent.
- Properly fund your policy. In order to quickly build up the cash value of your life insurance policy, you're going to want to pay more than what is required for basic coverage.
The reason is that the extra premium payments goes directly into your cash surrender value, which becomes equity and starts growing at an impressive rate.
- Leverage your cash surrender value. Once you have built up a significant cash value, you can leverage it to make major purchases (homes, automobiles, etc.), invest or buy new business equipment.
You'll essentially be getting an interest-free, tax-penalty-free loan...and will still earn interest on your policy's value as well as dividends.
- Repay and repeat. Infinite banking allows your money to work harder for you, so why not keep it working? Repay the loan on your terms and then repeat the process all over again.
If you're like most Americans, you could benefit from infinite banking. To find out if it's really right for you, let's talk!