Interest: Your Worst Enemy

September 30, 2009

The average American household spends 35 cents of every dollar it brings in on paying interest to someone else.  Your interest might be accumulating on a car loan, boat loan, credit card debt, student loans, or all of the above.  However you slice it for every dollar you make you lose 35 cents and you will never get it back.

Here is a simple example of how much money we’re really looking at: if you make $50,000 a year you are missing out on $17,500 that is being used to pay someone else the interest you owe them.  Its no wonder why becoming your own bank can be one of the most beneficial things you can do for your financial future.  Why not pay yourself $17,500 instead of seeing it slip through your fingers, never to be seen again?

The possibilities are endless when you become your own banker, you just have to be committed and start today!


Many people are under the impression that the only way to buy life insurance is to buy term and invest the difference.  True, this option is the best for some people but the majority of people out there are not dedicated/disciplined enough to actually invest the difference.  They end up paying very low premiums for term insurance and the extra money goes toward living expenses or leisure activities.  The thought of those that actually do invest the difference is that when their term insurance expires they will be so wealthy that they will not need to purchase any more life insurance.

I believe the mindset about insurance needs to be changed.  So many times I here life insurance compared to car insurance and you pay it just in case of an accident.  While this is true of car insurance, life insurance can be used for so much more than simply accident protection.  Just like its better to own rather than rent and home, it is better to own instead of rent lift insurance.  Why?  because at the end of your 20 or 30 year term you have nothing!  Unless certain riders are put in place you have no cash value, no death benefit and nothing to leave to your heirs.

Using dividend paying whole life as an investment vehicle as well as a personal bank can extremely increase your saving potential as well as your overall wealth.  Becoming your own bank is the most powerful, safest, and well tested tool you can have in your financial arsenal.  Click on the link on the top of this page to fill out our secure form and request more information.  You have nothing to lose and everything to gain.

Has the economy taken away years of gains from your retirement plan? Is there a better way?

I read a report in US News that over 2 TRILLION dollars have been lost within retirement plans. Most 401K’s and other retirement plans have seen better days to say the least. Not only do they tie up your money until you are 59 ½, but you or someone else needs to constantly manage the investments they are in and then hope that the markets perform.

Company matching has always been the lure to participating in the company retirement plan. Lately though, many companies have reduced and even eliminated the company match. If this has happened to you should you continue to contribute?

And what about taxes on retirement plans?

For years we’ve been under the assumption that we would put money in our retirement plans at a higher tax bracket than when we take it out, after all that is the only way to really come out ahead. However, that does not seem to be the case with most retirees.

I spoke with a 71 year old single woman the other day who said her income, at just under $40,000 per year plus social security, is putting her near a 33% tax bracket with federal and state. In addition 85% of her social security is taxed because of her income. The majority of the problem is caused because she has no deductions, no kids, no mortgage, no business, and most of her income is coming from retirement plans that have never been taxed. The result is she wishes she had never put money in a retirement plan and had paid the tax years ago at a lower tax bracket. Its cost her more to “postpone” the tax and pay it today than it would have to pay it years ago.

Maybe now is the time to change the way you are preparing for retirement. There are alternatives that may be more attractive than the traditional retirement plans created by the government. It’s funny, in a sick sort of way, that the government who created this massive and confusing tax system is the same government who created the “retirement plan” loopholes such as 401(k)’s and IRA’s. Should we trust them? At any time those who make the rules can change the rules.

Do you think taxes are going to go up? How are we going to make our way out of an 11 Trillion dollar national debt? Take a look at the National Debt Clock: and it grows by $3.71 billion per day.

The bottom line is that if tax rates are on the rise, which seems inevitable, than why do we want to wait and postpone the tax to pay later at a higher tax rate? It doesn’t make much sense does it?

The question becomes, “what do I do?”  What if I told you there was a better way that offers all the same tax advantages of government created retirement plans but takes the government out of the equation and puts YOU in control?  Click here to view a video that explains this idea.

The essence of the Infinite Banking Concept is how to recover the interest that you normally pay to a banking institution through the use of dividend paying life insurance, so that the policy owner makes what a banking institution does. It is a third alternative to making a purchase. Instead of losing opportunity cost on cash, or the finance cost of using someone else’s bank, this alternative provides a way to do what you would normally do anyway, but recapture the cost of those purchases. Earnings grow within the policy tax deferred. You are both reducing your tax burden and capturing monies for yourself that a banking institution normally would receive. And by the way, you have a death benefit thrown in on the side!

Anytime you can cut your payment of interest to others and direct that same market rate of interest to an entity you own and control, which are subject to minimal taxation then you will have improved your wealth generating potential significantly.

The Infinite Banking Concept is not about investing, it is about financing, and financing is a process not a product. Financing involves both the creation of and maintenance of a pool of money and its use. However, when a financing system is combined with an investment system the combination of the two will always out perform an investment system. When the system combines reduced tax liability with a financing engine and allows complete control over your investments there appears to be no system capable of generating wealth with as much consistency or speed.

A primary concept or principal is that you finance everything. You either finance by: Paying interest to someone else – a bank, lender, etc. Or giving up interest you could have earned otherwise. (When you pay cash the interest the money could have earned is forfeited).For these reasons when we are discussing investment alternatives we must not only weigh the return we will receive but we must also evaluate what we are forfeiting or giving up. This mind set will become more important as we evaluate the “Infinite Banking Concept.” For all of the reasons mentioned above every person should be fully engaged in two businesses – Your occupation and Banking.