Search

Credit Stacking Looks at the Infinite Banking Concept

As you know, I am a big proponent of building wealth and helping people see and understand that no matter their age, they can absolutely achieve financial freedom.


I’ve talked about having a good credit score, building relationships with banks, business credit, and how credit scores work, but today I’ve got something completely different.


It’s called the infinite banking concept, which is a high cash value whole life insurance policy. And it’s another fantastic way of significantly increasing your personal wealth.


What is Infinite Banking?


Infinite banking is a concept where an individual becomes their own banker. This is similar to how decentralized finance works in cryptocurrency.


In both cases, you’re taking a traditional use case and using it to provide passive income, independently of commercial banks or lenders.


With the infinite banking concept, whole life insurance policies uniquely function as a source of dividend-paying assets through their accrued equity.


Infinite Banking Concept using Life Insurance

Essentially, infinite banking can be used as a valuable investment vehicle to grow your money. And this isn’t exactly a new concept, even if you’ve never heard of it until now.


Several multimillionaires have advocated the concept, including:

  • Ray Kroc, who bought McDonald’s from the McDonald brothers

  • Franklin Delano Roosevelt, our 32nd president

  • John D. Rockefeller, widely considered the wealthiest American of all time and head of one of the most influential families in the US

These figures and others have used this concept to build generations of wealth and the reasons for this are simple:


Tax-free wealth.


Know that you have a brief understanding of what infinite banking is, let’s look at the benefits of using it.


6 Benefits of Infinite Banking


The combination of these 6 benefits are what helps your money to grow within this particular type of life insurance policy.


Those benefits are:


1. Tax-free

2. Guaranteed growth

3. You get access to your money

4. Policies are customized to your goals

5. Your money is protected

6. You will receive death benefits


The money that you put into the account, every year, has already been taxed. So, if for any reason you have to pull it out, there are no taxes that need to be paid on it.


This can save you thousands of dollars, especially if structured properly.


The best way to structure your policy is to minimize the premium and maximize the cash value.


Call value and growth using infinite banking

So, for example, if you do an aggressive split of 90/10, you would maximize the cash value while you’re living, while minimizing the death benefits.


This can be set for whatever dollar amount that you put in it, but let’s say you put in $20K in this policy.


At 90% of that is $18K, which is the money that will be growing tax-free in the account; the other 10% is the premium, which then goes towards your death benefits.


That would be about $2,000.


When your money is in a high cash policy, your money is guaranteed to grow at 4% every year.


And depending on the company you receive this policy from, you also get a dividend between 1.5-2.25% every year.


There are four major companies that offer this type of high cash life insurance policy:

The third benefit is the ability to loan against your policy. This means that you will always have access to your money.


And because you have access to it, you can take a loan against it in order to pull out money.


Now, why exactly would you do that?


The main reason would be to invest in something else, such as real estate or even funding a business.


A downside to this is you will be charged 5% interest on the money that you take out, however your principal investment will continue to grow at whatever percentage the insurance provider states.


The next benefit is the fact that your money is protected from litigation.


What does that mean?


It means no one can touch this money except you. So, if you ever get sued, for instance, this money cannot be touched or used by anyone but you.


Lastly, death benefits. Going back to the above, if you do something like a 90/10 split, the 10% of $20K is $2,000.


I did this exact scenario – I put in $20K, with $18K growing tax-free and where I can access it at any time, and $2K goes into death benefits.


After a year, I already have $900K; this $900K will continue to grow the more money I continue to put in.


Basically, that means when I die in my 80s or 90s, my family will be able to receive whatever money has accrued to help pay for funeral costs, medical bills, etc.


Here’s a bonus benefit – retirement pay.


Once you’ve hit retirement age, you can pull money out as long as it’s not more than what you initially put in.


Just keep in mind that this will count against your death benefits, but depending on the amount you’ve put in and what you’re taking out, you will still have money for the future.


Guys, this is just another great way to invest your money, while also ensuring that your loved ones are taken care of in the case of your death.


If you want even more options for investing your money, make sure that you join our Credit Stacking community.




46 views0 comments