Family Banking Strategy

Family Banking Strategy with Whole Life: An 11-Year Case Study, with John Moriarty

This week, we welcome John Moriarty back to the Money Advantage Podcast. In Part 1, we talked about building a family bank on a conceptual level. Now, we pull in real facts and figures to show you how private family banking looks in action.

If you have considered implementing family banking and didn’t know where to start or what it looked like, this is your chance to pull back the curtain. And this is not speculation. John is showing us how he personally implements the Infinite Banking Concept to be the banker and build his family bank. 

Now is your opportunity to see behind the scenes! You’ll see a high level of funding, cash value, how he is using policy loans, the internal growth of each whole life policy, the death benefit, and how he’s getting a front-row seat to opportunities. Why? It’s all because of this family banking system and tool for storing cash reserves.

In This Episode, you’ll learn:

  • What it takes to become your own banker and start a family bank
  • How to build a family bank with whole life insurance policies over time
  • What you can and cannot do with a whole life insurance policy
  • Why you should not fear interest charges
  • How to structure your repayment strategy

Where Private Family Banking Fits into Your Cash Flow System

Family Banking is just one step in the greater Cash Flow System.

Privatized Banking

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. Infinite 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.

The Infinite Banking Concept is the how of keeping and protecting your money.  And a whole life insurance policy is the what.

The “Mystery” of the Family Bank

The idea of Infinite Banking, and thus family banks, is often shrouded in mystery. Mainstream financial advice makes it seem more difficult and unattainable than it is. Yet we know that what it boils down to is sound money principles–how you take control of the banking function yourself.

If you consider yourself to be a disciplined person, you can implement and benefit from family banking strategies. 

The Basics of a Family Banking System

While saving is the first component of private family banking, Infinite Banking can be considered a system for cash flow management. A whole life insurance policy offers a way to take your savings and optimize it from a cash flow standpoint. While this concept is not new, whole life insurance policies became more publicized when Nelson Nash wrote Becoming Your Own Banker.

The benefit is that you can customize whole life insurance to perform in ways suited to your goals. Then, you can leverage the cash value of your life insurance to take out loans against your policy, instead of going to the bank. And all the while, your policy cash value continues to grow, uninterrupted. 

With the right strategies, you can finance virtually anything you can imagine. Can you say the same for banking institutions? Your personal and business economies can both benefit from your ability to leverage your assets. 

Enjoying Your Money

In a well-structured strategy, not all of your “moves” have to be related to wealth accumulation or investments. John himself tells us, and those he works with, that his strategies allow him to do the things that he wants to do as well. In many instances, the way that he utilizes his cash value helps him to participate in activities that he enjoys, too—like take family vacations or go on golf trips. 

Because your private family banking System makes your money more efficient, it excels as a fund for both emergencies and opportunities. A well-executed strategy gives you limitless possibilities. The optimization of your dollars provides one of the most rewarding benefits—the ability to finance things that bring you joy, too. 

Private Family Banking with Whole Life Insurance

Since 2009, $1.9 million has been saved into the Moriarty family bank. His family has borrowed roughly $2 million from the family bank. And overall, they have repaid only $1 million to the family bank. 

Rather than a linear system–put in, take out, replenish–he has established a process. John repays some life insurance loans more quickly because they do not add to his net worth—like vacations. Investments with monthly cash flow are an opportunity to make incremental payments. Other times, there are long term investments with an expectation of future liquidity. Those “windfall” moments are opportunities to pay down life insurance loans in a lump sum and cycle money into the system. 

The benefit of a whole life policy loan is that you can pay back whenever and however your choose—the important part is that you have a strategy to do so. Being reckless in how you borrow against your whole life insurance policy can put you in a precarious position. 

Rather than treating your family banking system as a linear process, consider it a living system.

Why Would You Want to Borrow Your Own Money?

This is an important question—and one that can be difficult to understand when typical financial advice trains you to view interest as something to avoid at all costs

However, think of the opportunities that arise when you have access to your cash—and have the diligence to pay yourself back. You lessen your risk of depleting your emergency/opportunity fund because there’s more incentive to be disciplined. When all your savings are in the bank, how likely are you to repay yourself in addition to continued savings? 

Furthermore, private family banking enables you to leverage the power of your money on investments that a bank may be hesitant to finance. More options are available to you when you become your own banker. 

And then, of course, there is a mathematical component. In John’s example, he was able to receive financing at 5%. It’s easy to look at that and be skeptical. In the bigger picture of his personal economy, however, that 5% should not be a deterrent. He can use that life insurance policy loan to invest in opportunities that earn far higher rates of return. Additionally, his life insurance policy continues to earn uninterrupted compound interest, so he is earning a return in 2 places at the same time. So the whole time he has this loan, his cash value is still working for him and increasing over time. More money becomes available to him regardless of how quickly he pays down his loans.

Ultimately, he has a repayment strategy that allows him to make the most of what he has. 

The Long Game

In the first few years, building a private family banking system of whole life insurance policies can be difficult to wrap your head around. It’s a long-term wealth-building journey, and the first few years offer limited liquidity. While you can still utilize your policy, it does not have the same wow-factor as a policy that has been around for more than 10 years. Yet somewhere between the 5th and 9th year, you hit your break-even point—and everything after that is pure growth. Meaning that from that point on, your cash value will be worth more than you put into it.

Private family banking is about the long game. It takes patience and work; though the best things in life rarely come without effort. When you buy assets and finance them with a financial institution, you often need a down payment or other collateral. Conceptually, that is no different than what happens with a whole life insurance policy. On the front end, you relinquish some of your access to capital, which covers the cost of insurance. On the back end, you reap the long-term rewards. Your banking system continues to improve over time. 

Start Your Family Bank

A whole life insurance policy is not a stagnant asset—it is not an account where you lock your money away until you turn 65. Your cash value is money that you get to use and enjoy over your lifetime—earning uninterrupted compound interest on money you can also use is something to celebrate. On top of that, the extra protection a death benefit provides for your loved ones is priceless. 

Get the Moriarty 11-Year Case Study

  • Annual statements from the life insurance company for each whole life policy in the Moriarty family bank
    • Policy cash values
    • Death benefit
    • Policy loans
    • Interest payments on policy loans

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 private 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. 

Family Banking 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, and find out how Private Family Banking, alternative investments, or cash flow strategies can help you accomplish your goals better and faster.

That being said, if you want to find out more about how Privatized Banking gives you the most safety, liquidity, and growth  … plus boosts your investment returns, and guarantees a legacy, go to to learn more.

Rachel Marshall

Rachel Marshall is a devoted wife and nurturing mother to three wonderful children. Rachel is a speaker, coach, and the author of Seven Generations Legacy™, passionate about helping enterprising families unlock their true potential and live into the multi-generational legacy they are destined for. After a near-death experience, she developed a deep understanding of the significance of recognizing and embracing one's unique legacy As Co-Founder and Chief Financial Educator of The Money Advantage, Rachel Marshall is renowned for her ability to make money simple, fun, and doable. She empowers her clients to build sustainable multi-generational wealth and create a legacy that extends far beyond mere financial success. Rachel's expertise lies in helping wealth creators remove the fear of money ruining their children, give instructions for stewarding family money, teach financial stewardship and create perpetual wealth through family banking, and save time coordinating family finances. Rachel co-hosts The Money Advantage podcast, a highly popular show that delves into business and personal finance, including how to effectively manage finances, protect wealth, and generate sustainable cash flow. Rachel's engaging teaching style and practical advice have made her a trusted source of financial wisdom for her listeners.
Controlling the banking function

Becoming Your Own Banker, Part 16: Controlling the Banking Function

By Rachel Marshall | November 27, 2023

Prepare to elevate your financial game as we unravel the infinite secrets in Nelson Nash’s Infinite Banking concept. Promise yourself a brighter financial future armed with the knowledge of how you can start controlling the banking function in your life, maximizing your cash value, and creating a lasting legacy.  We’ll reveal how to strategically capitalize…

Read More
Pay More Premiums

Becoming Your Own Banker, Part 15: How to Pay More Infinite Banking Premiums

By Rachel Marshall | November 20, 2023

Unlock the secrets to infinite banking in this power-packed episode. We guide you through the intricate steps of using whole life insurance as a tool to gain financial freedom, inspired by Nelson Nash’s groundbreaking book, “Becoming Your Own Banker”. Learn the advantages and drawbacks of this system, and pick up practical tips on finding more…

Read More