Infinite Banking helps you be your own bankerWealth is defined as a great quantity or store of money, valuable possessions, property, or other riches.

It's what Americans dream of achieving. It provides freedom, opportunity and peace of mind. It can also be incredibly difficult to obtain.

According to the U.S. Census Bureau, the gap between higher- and lower-wealth households is growing. Researchers say that wealth in the United States is highly concentrated in the hands of relatively few people. Almost everyone agrees that most people will never become wealthy.

Maybe that explains why half of all Americans play the lottery, the average household has more than $134,000 in debt and confidence in banks is much lower today than it was 10, 20 and 30 years ago, according to Gallup's Confidence in Institutions report.

Yes, everyone wants to be wealthy, but few people have the know-how to reach their goals--in large part because there is an enormous disconnect between what the wealthy do and what everyone else in the country is being taught.

While average Americans borrow from banks, the wealthy are often their own bankers.

Why you should become your own banker

Imagine a world in which you didn't have to gamble your financial future on stocks and mutual funds, you didn't have to rely on high-interest loans from large financial institutions, and you had access to money whenever you needed it and for any reason.

That is the world of infinite banking.

Infinite banking is a concept that allows you to be your own banker by leveraging the cash value of whole life insurance to finance major purchases and investments while building a substantial nest egg for your retirement.

And it comes with an array of undeniable benefits:

  • savings that are guaranteed to grow, typically at a consistent rate of anywhere between 4.5 and 6.5 percent a year
  • earning interest on your policy, even when you have borrowed it
  • compound interest
  • freedom to do with your money what you wish
  • tax-free dividends, which are offered through many whole life insurance policies
  • a guaranteed, tax-free death benefit.

When you are your own banker--when you have built up enough cash value in your whole life insurance policy--you are no longer beholden to banks. No more applications, credit checks and faxing of pay stubs. And you can use the money for anything--vehicle purchases, college tuition, medical expenses, real estate, business inventory and equipment.

It's a concept that can work for anyone with the means to take on a whole life insurance policy, practice diligence and remain patient.

How to be your own banker

Becoming your own banker is actually relatively easy. Here is a look at a three-step process that will allow you to practice infinite banking:

Step 1: Secure a whole life insurance policy. The policy can cover you, your spouse, children, domestic partners and others.

Step 2: Properly fund the policy. Your goal is to have your whole life insurance policy's cash value grow as quickly as possible. This means you want to pay into it as much as possible.

Step 3: Leverage the policy's cash value to fund your purchases. When you borrow against the cash value of your policy, you are making a wise decision. The cash you "borrow" actually never leaves your account because you're actually borrowing the money from the insurance company--so your policy continues to earn its full interest and dividends are paid accordingly (if you receive dividends).

Once you have leveraged the cash value, you can pay back the loan and the process can continue.

Infinite banking is a system that can help you join the ranks of the wealthy.

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