What Makes Infinite Banking Infinite

What is Infinite Banking? Part 10: What Makes Infinite Banking Infinite?

Have you heard about Infinite Banking, and you want to learn more? Or maybe you’re already using Infinite Banking, but would like to explain it better to your family and friends. In past installments of the series, we’ve discussed how IBC works, and what it is. Today, we’re unpacking what makes infinite banking “infinite”.

So if you’re ready to learn how to increase your opportunities and create wealth that lasts beyond your lifetime… tune in now.

The Multigenerational Benefit of Infinite Banking

There are many ways one might consider the Infinite Banking Concept to be “infinite.” One of these ways is the multigenerational capacity of infinite banking. By establishing a liquid savings vehicle like whole life insurance, you’re creating a system of wealth that not only can be leveraged for investments and opportunities but can be passed on to the next generation via the death benefit. 

That money can then be reinserted into a new life insurance policy that creates new opportunities for your children. And by extension, it creates opportunities for their children. As long as each generation is properly prepared to receive your legacy, and has the required knowledge to be a good steward of that wealth, it can last for generations. 

This is a key reason that having a succession plan is critical. That way, your heirs are prepared to continue the family legacy that you’ve established. There should be some guidelines and procedures for how the wealth transfer is handled, and how the family can best maintain the wealth. 

How to Create a Succession Plan for Infinite Banking

[9:08] “The first thing is, you have to communicate within your family. The second thing is you need to work with an organization that has a succession plan that’s going to continue these thoughts within the agency itself so that it can become infinite along the way.”

The goal of a truly infinite IBC strategy is to involve your family. This means starting young: educating your children, involving them in your family culture, creating family values, and more can help your children get a sense of your family mission. 

By involving your children each step of the way, you’re including them in creating this legacy. Inclusion can inspire your children to take responsibility for their role in the family banking system. It also enables them to be good stewards of wealth in the future. This is further aided by having a support system of financial experts who can be your strategic partners. That way, you can create more wealth and freedom. This is how you keep a family banking system alive. 

What Makes Infinite Banking Infinite?

To understand the full scope of this conversation, it’s important to get clarity on why infinite banking has its name. And, why infinite banking is such an excellent strategy for multigenerational wealth. 

One key is certainty, as Les McGuire discusses in his article, The Economic Value of Certainty. Whole life insurance is a product that creates certainty because it protects your wealth even in death. This certainty gives you the security and peace of mind to make decisions you might not make in scarcity mode. And being able to operate from this mindset makes the possibilities quite literally infinite. 

Examples of the Infinite Possibilities

Using an IBC strategy with whole life insurance allows you to create a pool of liquid cash with certainty. That certainty is locked in by a few different variables:

  • The death benefit gives you the certainty that your family is protected, your legacy can continue, and the family bank can be replenished
  • The cash value is not correlated to the stock market, which gives you the certainty that your account will continue to grow
  • The policy loan provision gives you the certainty that you can finance opportunities that are fully collateralized by the cash value (though you should still repay your loans)

It’s this financing portion of IBC that helps make it infinite. What whole life insurance enables you to do is create a pool of money so that you can finance your own investments. The cash flow from those investments can contribute to repaying the loans. Once the loan is repaid, that cash flow can be enjoyed. 

You can also finance other opportunities that aren’t investments. You can use your cash value to finance your child’s first car. That way your teenager can buy their first car, even without credit, and learn to make responsible payments. You could finance college with a whole life policy, or a family retreat, or anything you want. 

Velocity of Money

Another reason IBC is infinite is that you can use and reuse your cash value an infinite number of times. You do so by borrowing against your cash value, rather than withdrawing it. Then, as you pay down the loan, you’re able to use that money again for something else. All the while, your cash value continues to earn interest and dividends because you haven’t withdrawn it. 

This is called the “velocity of money,” which means the frequency at which you can use a dollar. Since you can continually use and replenish your access to your pool of money without it shrinking (and in fact, while it grows), your velocity is infinite. 

This, of course, depends on you being a good steward of that account. In other words, paying your premiums and repaying your loans. The money is not “free,” it’s simply a financing option that you have control over. Of course, when you see how valuable it is to repay your loans and pay your premiums, you’ll want to have good habits. 

Internal and External Returns

We should also note that, depending on how you choose to use your IBC policy, you can create “infinite” sources of return. Internally, your policy is guaranteed to increase each year. You can count on the money in your policy growing, even if you leverage it for other opportunities. 

What’s amazing is that depending on how you leverage your cash value, you can create an external return, too. So investing in assets with monthly cash flow, like real estate, can give you an external rate of return. This return enables you to grow your wealth. Then, you can invest in more assets that grow your wealth even more. 

[29:43] “So you’re not only continuing to grow money inside the life insurance policy while you have this loan outstanding because dividends and interest are continuing to grow on the life insurance money. In addition to that internal return, you’re also getting this external return on this outside investment at the same time. That provides infinite opportunity because you’re not just getting one return on your money, you’re getting two returns on the same money at the same time. And the second idea is that you are able to do this as many times as you want, that’s called velocity of money.”

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!  Book an Introductory Call with our team today https://themoneyadvantage.com/calendar/, and find out how Privatized 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 https://privatizedbankingsecrets.com/freeguide 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.
Perpetual Wealth

Becoming Your Own Banker, Part 23: Practical Wisdom for Perpetual Wealth

By Rachel Marshall | February 12, 2024

Do you want perpetual wealth that continues growing in future generations? Today, we’re continuing this power-packed series through Nelson Nash’s famed book, Becoming Your Own Banker, as we discuss the benefits of buying life insurance for your grandchildren. So if you want to see how thinking generationally is a long-term target on wealth that gives…

Read More
Higher Rate of Return

Becoming Your Own Banker, Part 22: Get a Higher Rate of Return

By Rachel Marshall | February 3, 2024

Are you looking for a higher rate of return? If so, your quest may point you to an important secret as you make financial decisions. Most people want to get the highest rate of return on their investment dollars …. which is why whole life insurance can be such a turn-off.  It seems like a…

Read More