The Power of Interest

November 30, 2009

If you were offered a 28 day job that would pay you one penny for your first day of work—then double that each day there after. Would you accept that job?

Probably not—right?

It might surprise you to learn that on the 28th day, you would earn $1,342,177.28!

That’s the power of compound interest! And it’s why Albert Einstein called it the most powerful force on earth. However, it can work both for you and against you.

Banks and financial institutions try to make this work against you—and for them! And, considering that over 95% of people will retire dependent on others, I think they are doing a pretty good job of it.

In fact, J. Reuben Clark depicted the negative power of interest quite well when he said:

“Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours. . . . Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.”

So, which side of Compound Interest do you want to be on?

By “Becoming Your Own Banker”, you put the power of compound interest on your side.

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!


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.