How to Start a Family Bank: Insights from John Moriarty

Interested in finding out how to start a family bank? Today, Bruce and I talk with our friend and colleague, John Moriarty, Founder and President of e3 ConsultantsGROUP.

You’ll hear about his personal and business use of Infinite Banking, and the thinking behind a growing and evolving system of policies. John is smart, business savvy, and a leader who walks the talk of thinking differently with his finances. And it’s paying dividends – literally!

We invite you to a behind-the-scenes conversation with an entrepreneur who has been using and loving their system of starting a family bank using whole life insurance policies for the past 11 years.

You’ll find out exactly how and why this wealth creator is funding and using cash value life insurance on the regular. You’ll also witness the opportunity created by this method of cash flow management, so you can use family banking to store cash reserves. Tune in now!

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In This Episode On Family Banks with Cash Value Life Insurance, You’ll Find Out:

• Why people with good money habits are frustrated and feel forced into the stock market. And the solution to your problem!
• Understanding the purpose of your money is more important than learning how a financial product works.
• How starting a family bank optimizes your economy, gets your money doing multiple jobs, and reduces your opportunity costs.
• A look at the most important component of Privatized Banking: how you want to use your money.
• What this wealth creator is investing in, and why.

Where A Family Bank Fits into Your Cash Flow System

Starting a family bank strategy with Specially Designed Life Insurance Contracts (SDLIC) is just one step in the greater Cash Flow System.

It fits into Stage 2, a part of keeping and protecting your money.

We said before that Privatized Banking is like the peanut butter to your cash flow sandwich.  It’s wedged between Stage 1 – keeping more of the money you already make – and Stage 3 – increasing your cash flow from investments.

And it helps you do everything else better. Privatized Banking increases your financial efficiency, enables you to keep more of what you already make, amplifies your cash-flowing asset strategy, and accelerates your time and money freedom.

Privatized Banking is the how of keeping and protecting your money, and specially designed life insurance is the what.

Family Bank (Behind the Scenes)

As an entrepreneur with several businesses, privatized family banking strategies are a generous part of John Moriarty’s practice, both personally and business-wise.

5:20 “I wouldn’t call myself a visionary…I’m blessed in that I find myself surrounded by really smart people in a lot of instances. And I gravitate to those types of people. What I try to do is basically garner as much knowledge from them as possible, figure out ways to give back to them, and then take what might seem like complicated processes and try to simplify them…When I see something that works, I don’t deviate from it…and if there are ways to improve that process, absolutely.”

One of the foundational missions of John’s business is to awaken the entrepreneur within and teach these foundational strategies. Creating a Family bank is a way to have your money working for you in more than one place.

Breaking into Finance

John’s pivotal shift into the world of finance happened in college. He realized that he likely wouldn’t be continuing to play baseball and set his sights elsewhere. So he began an internship in the financial sphere.

He spent the first eight years of his career path supporting other advisors, which helped him focus more on the concepts. In 2005, he worked with a business coach who introduced him to neuro-linguistic programming, which helped him to evolve his business.

He realized that there was a gap between what life insurance does and what people believe about it. The insurance industry is the only industry that doesn’t defend why it’s necessary, the way banks and other institutions do.

The Stock Market Appeal

Even people with good savings habits find that they’re not getting rewarded for those habits, and effectively get forced into the market. Maybe you’ve felt this way.

Good savings habits don’t always equate to success, but not for the reasons you’d think. If your money is in the bank, you can make maybe 1% on that money (at today’s rates), which essentially forces you to choose. Do you continue to pursue an account that does not help your principal to grow? Or do you increase your risk by entering the market?

Many families choose to enter the stock market because it seems like the only option to accumulate wealth.

Then, there’s the lesser-known way of starting a family bank, which will reward your good habits. If you don’t like the way things are today, you have the power to ditch the status quo.

A Family Bank Pays

A family bank is a key piece of financing the life you want, personally and in business.

John has held life insurance for a long time, yet his first experience truly utilizing his cash value life insurance policy (what he refers to as specially designed) was in 2009. At this time, he was becoming more familiar with the Nelson Nash Institute and the Infinite Banking Concept. The recession raised a number of questions for the general public, so John implemented the strategy himself so he could recommend it with confidence in the future.

He went all in, building and designing his own policies. He knew how the policies would be funded and what the cash value would be used for.

The most important piece of advice John gives when creating a family bank is to examine the purpose of your money. What will it do for you, and what do you want from it? If the purpose of your money and the account you’re using to store it aren’t in alignment, you’ll have a harder time getting what you want.

Infinite Wealth

When you first create a family bank strategy, there’s a finite amount of money that can run through it. Yet if you continue to expand your family bank while allowing money to flow in and out, you can create infinite wealth.

You have three resources—time, talent, and capital. If you think of your life in those terms, you will run your systems more efficiently. For safe money, you have two options: a commercial bank and your family bank. The latter provides liquidity while continuing to earn interest and expand your capacity.

When you’re building your family bank, John lists two priorities: working with someone who has your best interests at heart and someone who can answer your questions. Insurance isn’t a magic solution, yet it can make you far more efficient.

Mindset and Money Habits

Interest rates and taxes are just numbers until you relate them to your personal economy or your business economy. Too often, these concepts are broadened, which doesn’t help you connect to them in authentic ways.

If you start from these basic concepts, it becomes easier to implement high-level, flexible strategies like creating a family bank. This is because the key component is management—something you work with alongside your advisor. It’s not a “set-it-and-forget-it” strategy.

A family bank is something that helps you live your life better. It’s meant to be used, not shelved.

Don’t Fear Loans

If you have your money working for you, you can make choices about your money. Personal and business loans are both available, without question, in a family bank. This is an advantage that isn’t often afforded through bank financing. Loans, especially against your policy, are not something to fear.

51:00 “The fact that I have an outstanding loan balance… [is] something I can calculate and keep an eye on. But what I also know is, if…I just paid down the principal, and I don’t even touch the interest, I still know what that policy is going to generate as a return, net of the interest cost…I think it’ll end up being about 3%.

The reality is, I know that all of the different investments I made, if even some of those turn out the way I expect, the actual creation of wealth vs. what I’ve got in my policies…will be 5- 10x that number. So, the reality is I’m not concerned about that interest cost because I know what I’m doing with my money.”

53:05 “For a client, the idea is, if you can see the potential of what this strategy can create for you…The idea is to figure out how you want to be utilizing the money, and then work with your advisors to structure that system so that it creates as much opportunity as possible for you.”

Benefits of Starting a Family Bank

Remember, learning how to start a family bank gives you far more than a place to store money. It’s about creating a secure financial system that serves your family for generations.

One major advantage is tax efficiency. Cash value growth inside a properly structured whole life policy grows tax-deferred, and policy loans are typically tax-free when used wisely.

Asset protection is another key benefit. In many states, the cash value of your policies is shielded from creditors, providing a layer of security that traditional savings accounts can’t match.

Finally, internal family financing allows you to borrow from your system instead of relying on banks or lenders. This keeps your money working for you while empowering your family with access to capital, all without losing control.

Creating a family bank is one of the most strategic ways to safeguard wealth, promote stewardship, and build a legacy that lasts.

Common Misconceptions and Risks

Choosing to create a family bank is one of the wisest financial decisions you can make for your family’s future, but just like any opportunity, it needs good stewardship.

A common misconception is thinking of your family bank as “free money.” In reality, every policy loan is a tool, not a shortcut. Borrowing without a clear plan for repayment weakens the system meant to serve future generations.

Another risk is a lack of structure. A thriving family bank requires communication, accountability, and a commitment to wise money habits. Teaching these principles across generations strengthens not just your finances, but your family’s legacy.

Unlike traditional banks built on profit, a true family bank is built on trust, purpose, and stewardship. When managed thoughtfully, it becomes one of the most powerful ways to safeguard and grow your family’s resources for generations to come.

About John Moriarty

John E. Moriarty, CPWA®, ChFC, is the founder and president of e3 ConsultantsGROUP.

As an entrepreneur in the wealth management industry since 1995, John has a passion for challenging the status quo. John founded e3 ConsultantsGROUP in 2003 to provide a family office model to individuals, families, business owners, and entrepreneurial-minded people.

With four separate entities under e3’s umbrella (Wealth, Tax, Insurance, and Real Estate), their mission is simple: to awaken the inner entrepreneur in anyone who is ready to think differently about money!

Educating the public about ways to protect the purpose of their money is at the core of John’s endeavors. He has been a guest or host of various radio shows, television programs, and podcasts. Also, John has written four books on various money-related topics, where John has been considered a subject matter expert.

Take the Next Step with Family Banking

See an 11-year family banking system by the numbers, including premium, cash value, death benefit, internal rate of return, dividends, policy loans, and loan repayments.

PLUS, get John Moriarty’s eBook, Building Your Own Privatized Banking System.

Book A Strategy Call

Do you want to coordinate your finances so that everything works together to improve your life today, accelerate time and money freedom, and leave the greatest legacy? We can help!

We spend a lot of time and attention educating and sharing the benefits of family banking, so it can come across like we’re the whole life insurance people. However, when it comes to working with clients directly, we don’t start with products.

Starting a family bank is the middle of the process, not the start, not the end, and not the complete picture. Helping you think differently about your money starts with your individual financial picture and goals.

Book an Introductory Call with our team today to learn how family banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster.

If you want to find out more about how a family bank gives you the most safety, liquidity, and growth, take a look at our free privatized banking secrets guide to boost your investment returns and guarantee a legacy.