Financing for Life
Building your Private Financing System is a process more than a product. True, it all starts with a properly designed Policy. A Policy from a Mutual Dividend Paying Whole Life, Life Insurance Company. There are many Insurance products, and plenty of opinions about different types of Insurance Policies, that will do the “banking function.” And claims of Universal Life products and Variable Life doing the same thing or outperforming Whole Life. In these pages, the product we are using is for Life. Nelson’s original Infinite Banking Concept was built on the use of Whole Life, a product of guarantees. For the life of the insured, this could be the bigger part of a century. Building with the proper product, means the difference in Infinite Banking, and Infinite Speculation.
Building a series of policies with a Cash Value big enough to start capturing your Family Financing is not an overnight process. First, the building of cash within the policies model the snowball effect, the first years are the least efficient. The total Cash Value available is not equal to the Premium. It is years three, four and five when this machine starts to pick up speed. The first years are saddled with administrative costs, insurance costs, commissions, “ultimately here we are purchasing Life Insurance, Permanent Life Insurance.” The question here is not “if it will pay, it is when it will pay.”
Another detail of a properly designed policy, the Cash Value is proportional to the death benefit. The longer and more efficiently the Policy Owner uses the system, the death benefit will continue to grow as a result. That’s right, this is not the product that is typically designed by a Life Insurance Agent trying to provide a death benefit. In a properly designed policy, the older the policy, the better it performs. Later in life, these policies can become income streams.
Do you Believe
The Saver goes into the bank, the Banker knows the Saver is shopping for a new car.
The Banker approaches the Saver and says, “You can take a car loan at 5%, leaving your cash in a CD that makes 3% and makes money.” The Saver doesn’t want a payment, but, after a quick math lesson, concedes, the Banker’s math is right. He can borrow the money at 5%, while his is parked at 3% and is better off. As his cash accumulates, the compounding is growing every year. As the payments are made on the car, the balance is descending every year.
For the Saver, the $50k at 3%APR, over 5 years matures to $58,080.
At the same time, he takes a loan from the bank for $50k at 5%APR, over the same 5 years, total payments are $56,613.
There is another option. Outlined in these pages is an old and proven financing option. By building a system of cash-accumulating Whole Life, Life Insurance Policies and using the Cash Value to finance purchases throughout the life of the policy, a properly managed system allows one dollar to do multiple jobs. Providing both compounding of principal and liquidity. Simultaneously, that’s right, AT THE SAME TIME! Think how much wealth this adds to the family and generations to come.
Pay yourself first.
Pay yourself interest.
Recapture debts.
Build yourself a system that
doesn’t change your cash flow.
Where you are not working harder.
Not taking chances.
In a favorable Tax environment.
Ray Poteet