Putting the ‘King’ in Banking: A Complete Guide to Infinite Banking

Infinite banking means you become the banker. While it’s a bit more complicated than that, it essentially means you are borrowing money from yourself. 

Developed by Nelson Nash, infinite banking refers to a person taking out funds from an insurance policy. To be more specific, it refers to a person borrowing actual cash from their own life insurance policy, whatever the value of that policy is. 

This is infinite banking in a nutshell. 

If you want to find out if this kind of banking is right for you, read on!

Why Infinite Banking Works

Whole life insurances always payout, which means a person can borrow that money throughout their life. 

It can work if you have lots of cash flow. You will need lots of cash flow because some life insurance policies cost several hundred or more per month. If you want to borrow money from your life insurance policy, you should already be paying a lot. 

In essence, your whole life insurance acts as collateral for a loan you are taking out against yourself. 

One of the benefits of infinite banking and why it works is that it’s faster cash flow and equity than other forms of loans. 

For instance, it’s a faster process than taking out equity in real estate. Infinite banking also offers lower interest rates than real estate. 

You can also learn more about the infinite banking concept and how it originated. 

You Have Control of the Loan

Another benefit of infinite banking is that you have control of the loan, meaning you can use it for business or for personal use. You can use it for emergency situations or give it to others as a loan. 

Regardless of how you use it, the point is you have control of the loan. You have control over the funds and whatever you need it for. 

Infinite banking also gives you the opportunity to accrue interest. That means when you borrow money from your life insurance policy, you are still accruing interest of about 3-4% each year. 

Finally, if you decide to pursue infinite banking, you’ll realize that you have more control over your finances rather than having a bank control it for you. However, it’s important that you treat it as a business. 

In fact, you will need to be wiser in your financial decisions because you are more in control of your loans and what kind of financial decisions you make. 

Should You Do It? 

Should you become your own banker with infinite banking? The answer is a resounding yes! There are so many benefits to borrowing money against your life insurance. 

You can take advantage of having immediate cash flow in emergency situations. Equity banking also offers more advantages than a lot of other kinds of loans in terms of interest rates. 

If you liked this article, you can check out more on our website. 

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