Becoming Your Own Bank
There is no time like the present to take control of your own financial future by managing and safeguarding your assets. How are you able to start?
Educate yourself: Learn as much as you can on personal finance, banking, investments, and asset protection. There are abundant resources available on the internet, including e-books, blogs, podcasts, and free online courses.
Create a budget: Start a diary/log to determine your income and expenses, and create a budget that helps you live within your means. This will allow you to save money and invest in your financial future. You want to know where your money is going.
Save money: Save as much as you can, and at the least, put your savings short term bond or Certificate of Deposit. This will allow your money to grow over time, while keeping it safe.
Invest wisely: If you’re risk averse, consider investing in low-risk assets, such as index funds or real estate. These investments can provide steady returns over time, while minimizing risk. You do not have to risk your principal to make your money grow.
Protect your assets: Once you start to accumulate some assets, setting up a trust or LLC to protect your assets from creditors and lawsuits is considerable easy and effective. This can help you safeguard your wealth and keep it in your control.
Use technology: Utilize modern financial tools like online banking, budgeting apps, and digital wallets to keep track of your finances and manage your money more efficiently. You shouldn’t hesitate to take advantage of available automation features. The hard part may be sitting down and organizing yourself. This will require discipline, knowledge, and effort, but it can provide you with greater financial independence and security once a plan is set. Monitoring your plan periodically will be easier than starting from scratch at every impasse.
…if you’re still with us, how can you become your own bank?
With a strategy called "Infinite Banking" or "Bank on Yourself". The idea is to use a specially designed whole life insurance policy as a financial tool to save and invest money while also providing a death benefit to your loved ones.
How would this work:
1. Purchase a whole life insurance policy: This is a type of life insurance policy that offers a death benefit, but also has a cash value component that grows over time.
2. Pay premiums: You pay premiums to the insurance company, which go towards the cost of the insurance and the growth of the cash value component.
3. Build up cash value: As you pay premiums, the cash value component of your policy grows tax-free. You can borrow against this cash value at any time, without having to go through a credit check or approval process.
4. Use the cash value for investments: You can use the cash value to invest in real estate, stocks, bonds, or other opportunities. The interest you earn on these investments can be used to pay back the loan you took from the cash value.
5. Repay the loan: You can repay the loan at your own pace, and the interest you pay goes back into the cash value of the policy, which continues to grow over time.
6. Repeat the process: As you continue to pay premiums and build up cash value, you can borrow against it again and again to fund other investments or expenses.
The affluent have using this strategy for years. With a whole life insurance policy, you can essentially become your own bank and have access to capital whenever you need it, without having to rely on traditional banks or lenders. It can also provide tax benefits, asset protection, and peace of mind knowing that your loved ones are protected by the death benefit. Keep in mind that anything involving money requires discipline, careful planning, and a long-term commitment. This life insurance strategy is no different.
