Why Infinite Banking is Better for Any Investment

Becoming Your Own BankerOnce again, I could take the time to answer this thoroughly. However, Nelson Nash does such a good job at addressing this in his book, “Becoming Your Own Banker,” that I am going to take a excerpt from that to address this question.

By the end of this you will see why any of your investments, stocks, real estate, or other investments are going to be much more efficient coming through your Infinite Banking system or whole life insurance policy.

“But, I Can Get a Higher Rate of Return

“When first exposed to the rationale of The Infinite Banking Concept a person will almost always think–and often voice the thought, ‘but I can get a higher rate of return by investing in _________.’ Unfortunately that person has not understood the message! We are not addressing the yield of an investment–we are discussing how you finance anything that you buy. It is always better to finance it through your banking system than out of your pocket.

“To demonstrate this principle, suppose that ‘A’ invests $100,000 for one year and earns 20%:

“Gross yield…………………………..$20,000

“Less taxes (30%)………………………-$6,000

“Net yield…………………………….$14,000

“Suppose ‘B’ builds cash values of $100,000 in his own Infinite Banking Concept (Dividend-paying life insurance) plan, then borrows it from his system for 8% and then makes the same investment as ‘A’ above. The results are like this:

“Gross yield…………………………..$20,000

“Less interest paid to his banking system…-$8,000

“Taxable gain………………………….$12,000

“Less taxes (30%)………………………-$3,600

“Net yield……………………………..$8,400

“BUT, in this case you must remember who the characters are in the play. ‘B’ also owns the policy to which interest is paid and earns the $8,000 on a non-taxed basis. So the total results are like this:

“Net yield from the investment……………$8,400

“Net yield from his banking system……….+$8,000

“Total yield…………………………..$16,400

“This principle applies to any investment that you might make, so there is no way that a person can ‘get a higher rate of return’ by ignoring the banking process! There is a delay in time while getting ‘the banking system’ established, but once this is done, it is a ‘one-time only event.’ Anytime a person stars up a new business there is a delay in the time before profitability commences. When a life insurance policy is created, that is the equivalent of starting a business that never existed before and the same phenomenon is inevitable.”

Nelson Nash, Becoming Your Own Banker

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