The Infinite Banking Concept is not complicated.  It is actually quite simple – accumulate your wealth in an asset that you have complete control over and that is guaranteed to increase in value.  Then, through wise leverage, finance the things of your life – family, business, etc.  In this you retain complete control over the terms of every purchase and capture the opportunity cost of those purchases.

It is simple, but it does require a paradigm shift and requires rethinking your thinking.  Because changing how we think is difficult, many people feel the need to sensationalize IBC or they try and come up with analogies or explanations that reveal one truth but in that they also muddy the waters.

Some also misrepresent IBC in order to disparage the concept to in favor of the conventional financial paradigm.

This is the fifth of a series of articles addressing some of these misconceptions, misrepresentations, or over-sensationalized statements.

Another gimmick in the Infinite Banking Space is that this is some sort of secret of the wealthy.

There is an abundance of content describing the Rockefellers and other wealthy individuals and their use of whole life insurance. The problem with this marketing gimmick is what it leads people to believe. 

For many people this form of marketing gives the impression that whole life insurance will make you wealthy.  If you do what the Rockefellers do – specifically purchase whole life insurance – then you will be wealthy like them.

It is true that many wealthy people use whole life insurance to protect their wealth and pass it on to future generations.  It is also true that they will leverage the policies through policy loans to fund their lives.

But that is not how they built their wealth.   John D. Rockefeller built generational wealth through Standard Oil, founded in 1870 – that wealth was later diversified into banking and finance and real estate and other investments.

The Vanderbilt fortune was built through shipping and then later the railroads.   The Astors’ through real estate and fur trading, the du Pont’s through chemicals and manufacturing.

For each, their wealth was built through entrepreneurship and industry.  Interestingly, it was not built through “investing” in the stock market.  But that is a subject for another time.

These families preserved their family wealth primarily through a family economy and culture.  Wealth earned was captured into the family economy.   Members of the family got their financing for businesses from the family and paid the family back with interest, compensating for the time value of money and opportunity cost.

Instead of those finance charges leaving their family, it stayed in the family where it would continue growing.

To this mindset and culture, the families added other financial tools such as wills, trusts, and whole life insurance contracts. They built their wealth through their business, they preserved their wealth by controlling the banking function for their families.

The Infinite Banking Concept is not about life insurance.  It is about that mindset – managing your finances as a business and building a family economy and culture instead of atomized individuals, each trying to overcome inflation on their own.

This marketing gimmick also leads to another misconception – that you must be wealthy before starting to implement this in your life.

It takes no money to build a family economy; the only thing it costs is time and the only effort it requires is intentionality.  It doesn’t take any money to teach your children about money and involve them in the family economy.

Taking control of the banking function in your life costs nothing.  It is a mentality and a process.  You can implement this way of managing your money with the savings vehicles you already have.   If you make a purchase from your savings account – treat it like the loan that it really is. You are borrowing from your future self.  Pay that loan back to yourself with interest compensating for inflation and opportunity cost.

You can practice this concept with any vehicle that allows you access to liquid capital.   The most effective and efficient vehicle we have found is Properly Structured, Dividend paying, Whole Life Insurance with a mutually owned company.

Even the specific step of practicing IBC using this tool does not require you to be wealthy.  You start where you are at.  Individuals have started this with as little as $15 or $30 a month.  A properly trained agent, like Nelson Nash Institute Authorized Practitioners, will work with you to find what makes sense for your current situation, while thinking long range and planning for your future. 

But my primary issue with this gimmick is portraying the Infinite Banking Concept as if it is a secret no one wants you to know about or something “they” have been hiding.

The Infinite Banking Concept is not a secret. It is taught from a best-selling book, with over half a million books being sold. There are multiple podcasts produced by authorized practitioners across the nation.    

It is widely known that leverage is the most efficient way to use money because your capital is able to do work in two places at once.  1) Earning unbroken growth where it is stored and 2) serve as collateral to purchase an investment.  The only expense in this is the interest paid on the loan.  This is nothing new or secretive.

Whole Life insurance is over 200 years old.  The loan provision has been part of contracts since the Civil War.  Entrepreneurs have used policy loans to start businesses like Disney, McDonalds, Pampered Cheff, and Foster Farms.  JC Penny used policy loans to make payroll for his stores during the great depression.

Countless families have used policy loans have been used to pay for kids’ college education and remodel homes and add swimming pools.

The Infinite Banking Concept is just applying scale to these practices, not just using it for these major expenses, but recognizing that you finance everything you buy, treating your finances as a business.

Why is it not more common?  Because a marketing slogan has become universal “wisdom.” 

That “buy term and invest the difference” is taken as gospel or a proverb of King Solomon is like “Don’t leave home without your American Express card” being an cultural norm and practice.

Only 2-3% of term policies ever pay out.  It is the most profitable product, by rate, for insurance companies.  It makes sense that an insurance company – specifically AL Williams, now Primerica – would come up with a marketing slogan to push people to their most profitable product.

We don’t need another “secret.” We need to rethink our thinking — to build family economies, practice stewardship, and take back control of the banking function in our lives.

The Infinite Banking Concept isn’t about becoming someone else; it’s about becoming a better steward of what you already have. When families embrace that mindset, they stop chasing someone else’s version of wealth — and start building their own legacy.

Veritas non verbum venditoris

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