Paying Cash vs The Infinite Banking Concept

Are you better off paying cash or using the Infinite Banking Concept to finance purchases such as a down payment on a house, a vacation, cars, rental properties etc?

We like to say that we do the math!

This video does the math on financing one purchase with

1. Cash with no payback.
2. Cash with paying yourself back using a banking account
3. A policy loan against an IBC structured whole life policy with paying yourself back

The winner will be the method that has the most cash at the end of the period.

After watching this, you will see the power of IBC with only ONE purchase.

What would happen if you made multiple purchases?!?!?

[dilyaknight]

Can you take out loans from the insurance and NOT pay them back? Basically let them collect against your death benefit? Thanks.

[alexcameron]

You're still paying a 3% spread to the insurance company. Where do the payments of principal go? To your account or to the insurance company?

[matthewgarel]

Thanks for the video. Just wondering if your spreadsheet takes into account the fact that since you borrowed instead of pulling out cash, you have to have the resources to pay back the loan with interest and at the same time cover your insurance premium. Is there a way to factor that cost into consideration? I know the actual yearly outlay is $7, 770 (for some reason I get $7, 636.68 at 5%) which is principal and interest, plus whatever the $20K premium. So I guess the opportunity cost on the other end is whatever extra you had to do (like work extra hours, cut expenses...) in order to come up with this principal and interest repayment. I would love to get your thoughts on this.

[markjones]

I’m a little confused. Doesn’t that 5% go to the company? And not to our cash value? Or are you implying we charge ourselves an additional 5% on top of what we pay to the company?

[jowellavance]

What insurance carrier supports the IBC?

[galactix_crypto]

Why isn’t the premium calculated into these numbers?

What’s the premium on a $1M policy?

So, if I deposit $1M into the policy as quickly as allowed then borrow against it. I’m now obligated to pay 5% on the loan + the monthly premium which would add to the % rate.

[ttturbo]

I think I mostly understand the concept of IBC vs. a savings account, but am I right in saying this can only be comparable in the case that you are "paying back" the WL loan or to your bank savings account? What if you had an expense you were saving for (i.e. a car in the future) and then paying for it, but didn't intend to replenish that saving? In that case, I'd feel better about saving that money in the saving account instead of IBC...because I don't have a loan to worry about paying back. What would you say to that?

[SergeTX]

This illustration does not seem to account for the "Annual Earnings" for the first year. For the savings example, the EOY balance would be slightly higher after year 1, but the EOY balance would be considerably less for the IBC scenario (closer to $12, 838). Am I missing something?

[carlosuter]

It's even better : I believe because you can deduct the insurance premiums from your income tax, I hope I am right with this.

[matthewharrigan]

20k a year for 20 years at 11% long term stock market average is over 1.4 million. A savings account is a terrible long term investment.

[andreavandekleut]

20K per year dude? really, why not just put in 20 MIllion, this is not for the average joe,