How to Become Your Own Bank?

How to become your own bank? For just a second... Imagine this... What if you can become your own bank - paying yourself the interest? Instead of paying interest to a corporation or other people, why not pay YOURSELF the interest? Introducing... The Infinite Banking Concept. This concept has different names such as the IBC, accelerated retirement, Be your own Bank, Be Your Own Banker, etc... We have a SPECIAL guest that will join us to explain this strategy in GREAT detail!

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Alright, so how does this concept or strategy work? How do you become your own bank, pay yourself interest? So let's break it down...

1. This concept involves creating a Life Insurance Policy. Traditionally, individuals have used Whole Life Policy to overfund their cash value. By overfunding your cash value, you also have the option to be able to borrow against your cash value while part of your cash value is still growing in compound interest. .

2. Borrowing Against the Cash Value means that you'd have to pay yourself back the interest. It works similarly to borrowing against a 401(k) but the cool part about a Universal Index Policy is that there aren't any structured payments or terms of the debt against your cash value. Meaning, you don't have monthly payments or you don't have a set deadline as to when the debt needs to be paid off in full.

3. You can borrow against the cash value to pay off your mortgage, debt, student loans, etc. You can also borrow against the cash value for future real estate deals or simply to buy a new home. There are many real estate investors using the infinite banking concept to fund their own fix and flip projects, paying themselves interest, all awhile the cash value is still growing in compounding interest. Or... If you want to keep it plain & simple, you can use it to retire faster by simply making contributions to the cash value while growing it on compounding interest.

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Video Created by:
Christopher Dorsano - Creative Director

---DISCLAIMER--- The suggestions, advice, and/or opinions that are given by Sam Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold Sam Kwak, Novo Elite, Inc. and the Kwak Brothers brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based upon experience.

[KarloSalgado]

As an agent I’ve been doing this for years, and yes, it’s a fantastic idea and it works well if and only if the policy is structured properly. The policy has to be “max funded.” Meaning you want the least amount of life insurance for the amount of cash you are contributing. This way more money is going towards the cash value account and less money is going towards the cost of insurance and fees associated with the policy. Also, you want to ensure you understand the loan rates and how they work since there are both fixed and variable options and it’s critical to know the difference. Good video and good luck!

[Zumbamom]

IBC is great! It is long term so don’t think get rich or rich fast. The concept is fantastic. I have 3 policies and borrow and pay myself interest. I am glad I don’t have to borrow from a bank.

[paulstutsman]

This video helped lead me to the Nelson Nash Institute where I leaned, am learning, how to "become my own banker". Pretty great concept that I wish I would have found a LONG time ago.

[mattanderson]

Thanks guys!!
Really great information!

[FengV]

Wow! I love your creative thinking!!!! Thanks for asking them!

[FunkyFaulc]

This is a few years old so you might have figured it out, but two big problems with putting that full $100K into a policy is that 1) If it's a new policy you'd MEC it and lose the tax free access to cash if you stopped putting in any sort of premium in future years (but hey .... if you can do this and can keep doing it every year do it because in like 3-4 years you'll be making a sweet cash on cash return with your premiums alone). 2) You won't get 100% access to the cash right away but you could easily get 90%. There are insurance costs to start the policy and that's why you don't get 100% access to cash in the first few years. But wih the right policy design you should be getting your full premium back within 3-4 years and then over 100% of premium in years after that!

[toldu]

Here is how, you create your own trust, you open a bank account for the trust and then put your asset in the trust, funds are in the trust, you create your own terms and conditions for a loan, use your own loan T AND Cs contract (make sure your t and c have Accept for value and promissory notes so you can set it off before the tax year) then you tax exempt because its a loan

whalla!

[TheKwakBrothers]

How do you see yourself using this strategy??? Real estate investing?? Pay off your debt?? Share & Comment down below!

[anthonysued]

I've just recently come accross this infinite banking concept, but I have also been considering the HELOC strategy to pay off my mortgage. How can these two strategies co-exist with each other?

[onlychildren]

In a low interest environment like we have had and will continue to have this is a good alternative to a savings account

[ljuan]

I don't know if I missed it. I saw where Steve said the money in the insurance account earns 3-6% but what about the loan? Interest free?

[williamstanley]

Very creative idea...

I would consult an attorney about how to do your disclaimer in a short burst at the beginning so you do not feel the need to belabor the point throughout the video. Makes the flow better, and much easier on you guys, also! Great Video, and thanks!

[azianjz]

Great video, what kinda insurance policy offer the benefits u mention, whatever you put into it gets full access liquidity immediately? I believe it takes time for the cash value to build up, usually after the first year. I know products like high early cash value but not full 100%, please advise!

[kirilllesnykh]

Can I buy a house using this strategy? How soon would I be able to buy a house if I just started a life insurance policy? And how do I know which life insurance is the right one?

[theexit]

What Life Insurance company do that? I’m interested

[JamesBond-pmlo]

Can you tell me what kind of fee involved here? Nothing is free for sure. Insurance company has to make profit out of this.

[enjoythedreamlife]

This idea sounds good, however when you borrow your own money, the insurance company still will charge you an Interest rate to borrow the funds. You are kind of borrowing your own money but you are not. The insurance company lends you money and uses the dividend account as collateral

[LiliansGardens]

Good idea but your explanation ...I got it in the first two sentences and got confused by further explanations. I'm a money expert . Thanks

[VeteranJudy]

So how do you use this strategy with your heloc strategy. Can they be used together somehow?

[jmoney]

There’s gotta be a catch somewhere...great video my friend