Become Your Own Bank
AKA “The Solution”
How you can become your own bank
Imagine sitting in your living room, dreaming about your ideal life—what would that look like? Now, consider where you are today. What financial hurdles are standing between you and those dreams? At Be My Own Bank, we empower you to bridge that gap by transforming your finances into a self-sustaining system through the Infinite Banking Concept (IBC) and whole life insurance.
Whether you’re aiming to grow your business, pay off debt, or secure a stable future for your family, we’re here to guide you every step of the way. We start by understanding your unique situation—your dreams, your current finances, and your immediate goals. From there, we’ll explore how you can harness the power of the IBC concept to become your own bank, turning your aspirations into reality.
Key Concepts for Achieving Financial Independence Through Whole Life Insurance: Once you understand the problem and the Solution, what’s next?
Envision Your Life with Financial Control…
Beginning A Policy
- Create a whole life insurance policy that is designed to maximize your vision for the future and the goals that will take you there.
- Decide on the Cash Value you want to see in year 1, 5 or 10 years. Executing and beginning the policy.
- (Premiums are paid monthly, semi annual, Bi Annual or annual, building up the cash value.)
Cash Value Growth
- The cash value grows tax-deferred over time at a various rates. This growth also depends on the understanding and conviction of knowing how to utilize the concept and the WL policy as the tool.
- The combination of base, and PUA premium and the annual dividend grows over time. You get to decide what to do with that growth to enhance your wealth all while protecting what matters most to you.
Policy Loans
- You can take out loans in the amount that is available in cash value, collateralizing your death benefit. The insurance company will not ask for tax returns, pay stubs, or what the loan is for, ever.
- The insurance company will never ask what you are using the money for, nor do they care. They have access to your asset, the policy, and it’s collateral, the death benefit. A few ideas for loans might be paying off debt, investing in a company, education, real estate, farming operations or equipment, weddings, vacations, you name it.
Loan Repayment
- You repay the loan on your own repayment schedule, and payment amounts and terms. You are in control.
- Simple Interest accrues at on a daily basis. Once a year (at your anniversary start date) the insurance company will notify you of how much interest has accrued since you took the loan(s) and give you the opportunity to pay to keep it from becoming part of the loan. We strongly suggest this be part of your strategy.
- The entire amount of any repayment goes toward paying down the principal balance, thus lowering the amount of interest accruing over the time frame before your anniversary. This is unlike with a conventional bank.
Benefits:
How This Approach Works for You
Interest and Dividend Accrual:
The individual earns an interest rate, (and while dividends cannot be said to be guaranteed, historically all insurance companies we work with have been paying dividends for well over 100 years) on the cash value, and base premium which continues to grow even when loans are taken out.
Tax Advantages:
Cash value growth is tax-deferred, and policy loans are not considered taxable income. Just like cars and other things we take loans for are not taxable.
The Death Benefit
Passes over to your beneficiaries tax free upon your passing.
Control and Flexibility:
Loans can be taken and repaid without the need for credit checks or bank approval. You are in control.
Uninterrupted Compounding:
The cash value continues to grow uninterrupted, compounding the growth even when loans are outstanding. This goes on until you pass.
Legacy Planning:
The policy’s death benefit provides financial security for beneficiaries, as the death benefit passes to them tax free. This can create a perpetual compounding effect if your beneficiaries are able to take that money and get it into other Life Insurance policies. Keeping the capital you created in your families banking system. This is much like growing trees on land you own and harvesting perpetually.
Comparisons
| Interest | Fees | Investment Profits | Control | |
|---|---|---|---|---|
| Traditional Banking | Banks earn a significant interest rate spread by paying low interest on deposits and charging high interest on loans. This can be as high as 100 to 1000% and more. | Numerous fees, adding to their profit. | Banks invest deposited funds and earn returns, which benefit the bank’s shareholders, not the individual depositors. | Banks set rates and payment schedules and require collateral to grant you a loan, in case you default on loan. |
| Be My Own Bank | You earn a guaranteed interest rate on your policy's cash value, with potential dividends, because you own a portion of the Mutual Insurance company. | Any annual interest you pay on policy loans, goes back to the insurance company general fund of which you are a percentage owner. | Tax-deferred growth and tax-free death benefit. | You have complete control over loan terms and repayment schedules. Insurance companies do this because the Death Benefit acts as collateral for the loan. |
Comparisons
(Tap to Open and Zoom Image)
Sample Scenario:
How to Empower Your Financial Journey
Question: When a bank gives you 1% for depositing your money and charges you 2% for borrowing, what is the spread? 1%, 10%, or 100%?
If you chose 100%, you are correct! The bank is charging you twice what they’re paying you for your own money. Essentially, they’re making a profit off your deposits while you’re paying more to borrow. Why not be your own bank and keep more of that cash flow in your own hands?
This is one scenario of many possibilities
Traditional Banking
Person A-saver ($10,000 per year) and then spender for things we need.
- Your Savings Account Balance at a bank (you do not own) is $10,000. They are paying you 0.5% interest per year which earns $50 per year. And is taxed at 28%, leaving you with $36.00
- You decide to take a loan for a new used car, rather than paying cash, you take a loan from the bank: The loan is for $10,000 at 8% interest paid back in one year. The montly payment is 869.88. at the end of the year the interest cost you $438.61 with a payment of 869.88 for 12 months.
- The Bank’s Profit: the difference between the 438.61 and the $36.00 they paid you is $402.61.
In other words, they are making 11 times or 1100% from you all while never having any of their money in the process.
And you gave away to that bank, a total of $10438.61 that you will never have access to again, ever. Unless you want to borrow from them again. Think about this for a moment. Why would you do that if you knew a better way? Like become the owner of the tool… the bank.
Also, let’s remember that they don’t have any money invested in this equation. They simply loaned your money back to you at a higher rate.
Now you might say, “I would pay cash instead of taking a loan” And that certainly is an option, unless you consider the opportunity cost of paying cash, which you should. If you borrow you pay interest, if you pay cash you are giving up interest you could have earned. Either way you are giving up interest or the potential to receive interest…Unless you own the banking function in your life. Then you get to keep the car, and the principle and interest. Let’s talk about it.
Infinite Banking Concept:
Person B-Wealth builder (You). Long range thinker. Same age as Person A, same saving per year as well. However this person has owned own banking tool for 8 years now and has been making $10,000 all those years.
- Loan: Simply emails or electronic request (like banking that we arleady do) from the Insurance company to send $10,000 to his checking account. 3-5 days later it’s in your checking account.
- Next, Wealth Builder decides to pay back a bit more in interest at 14.5%, that comes with a payment of $900.23 per month. That’s $30.35 more per month. Hey it’s my bank, why not.
- At the end of the 12 months between principle and interest there has been a total of $10802.71 sent back into my bank. The additional $802.71 has gone into your tool (the policy).
- Now it’s time to pay the interest back to the insurance company. At 6%, you would think that total was $600.00. However because this is a simple interest instead of an amortirized (compound interest) loan.
- In this case PAID MONTHLY, the actual ANNUALIZED interest paid was 3.27%, or $327.97, when you own the banking function. You get to this by dividing $327.97 by the 10,000.00 loan is 3.27%
- You can easily figure this out in an amortization calculator. Using 10,000 at 6% for 12 months.
- While this loan was being paid back I had $80,000.00 I had sent over to the insurance company for the last 8 years that was growing at 4% for $3200.00 in growth, (this year alone) that will not be taxed, EVER. And now I am making nearly 10 times on my banking tool.
- Insurance company general fund does get the interest payments, but you are a part owner of the company.
- With continuing premium payments the overall value plus dividends will continue to compound every year.
- I, person B, have recaptured all the principle ( making the monthly payments) for the next thing I will want to buy or invest in.
By using the Infinite Banking Concept, individuals can effectively “Become their own bank,” earning interest and dividends and controlling their finances while avoiding the high costs and fees associated with traditional banking.
Take Control of Your Wealth
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