Infinite Banking Concept

[Tri-CitiesVol]

Anyone familiar or practice it? Legit or nah? Still in the learning phase, but a colleague swears by it and its potential to help create generational wealth.

 

[BigOrangeMojo]

When you hear whole life insurance and investment, run....

Trying to get rich by manipulating one of the worst financial products put there is a fool's game.

 

[BigOrangeMojo]

Just a reminder - mutual life insurance dividends aren't taxable because the IRS deems that you were extremely overcharged to begin with (i.e., the IRS deems them as a refund of overcharging you for premiums)...

 

[LouderVol]

Just a reminder - mutual life insurance dividends aren't taxable because the IRS deems that you were extremely overcharged to begin with (i.e., the IRS deems them as a refund of overcharging you for premiums)...

yeah, I was looking into this and unless you are "saving" 5k a month on not paying interest on that loan you are losing money doing this.

individual results may vary that number.

 

[Thunder Good-Oil]

It’s a viable option to create wealth, but not for you. It’s a lifetime commitment that instead benefits your heirs plus you don’t have as much flexibility as with an IRA or one of the other defined contribution plans. You can’t change your mind and pull your money back out. Plus you can’t put premium payments on pause. But if you are a kazillionaire (or at least 8 figure wealth) it might have a place for some of your investment mix. It utilizes leverage which isn’t allowed with IRAs/DCBs.

But why give the insurance companies a big cut of your investment returns through their fees?

 

[BigOrangeMojo]

It’s a viable option to create wealth, but not for you. It’s a lifetime commitment that instead benefits your heirs plus you don’t have as much flexibility as with an IRA or one of the other defined contribution plans. You can’t change your mind and pull your money back out. Plus you can’t put premium payments on pause. But if you are a kazillionaire (or at least 8 figure wealth) it might have a place for some of your investment mix. It utilizes leverage which isn’t allowed with IRAs/DCBs.

But why give the insurance companies a big cut of your investment returns through their fees?

Maybe but people don't get to 8 figure net worth by paying excessive fees and locking in a long term low rate of return.

It can be part of an estate plan but there are just better and cheaper alternatives IMO...

 

[OldVolMan]

One of the biggest cons of whole/universal insurance is what most people are not told. It is the worst investment program you can have. The only small advantage is some people will not save anything on their own.
Unless, since I sold insurance this has changed, but I don’t think so.

One example; let’s say you have a $100,000 death benefit and you have accumulated $10,000 on the investment part, at death the $10,000 goes to the insurance company.
At death you do not get both.

Another example; dividends are not quaranteed. But, in the sales pitch they are sold as they are, plus usually told “and will probably be even higher.”
That is why when you are given an estimated projected dividend sheet it is not attached to the insurance contract.

 

[Thunder Good-Oil]

Maybe but people don't get to 8 figure net worth by paying excessive fees and locking in a long term low rate of return.

It can be part of an estate plan but there are just better and cheaper alternatives IMO...

It’s a method to use leverage inside of a wealth management plan. It’s used when creating generational wealth. It isn’t a logical alternative to prioritize over maxing out IRA and other defined contribution options.

 

[BigOrangeMojo]

It’s a method to use leverage inside of a wealth management plan. It’s used when creating generational wealth. It isn’t a logical alternative to prioritize over maxing out IRA and other defined contribution options.

So many better ways to use leverage or create generational wealth....

Paying excessive fees for decades isn't the way. When you hear whole life and investment, run....

 

[Thunder Good-Oil]

So many better ways to use leverage or create generational wealth....

Paying excessive fees for decades isn't the way. When you hear whole life and investment, run....

Is there another way to use leverage in a tax exempt plan that has substantial funds? I qualified my initial post with you probably need to have 8 figure wealth to take advantage of the Infinite Banking Concept.

 

[allsgood21]

Anyone familiar or practice it? Legit or nah? Still in the learning phase, but a colleague swears by it and its potential to help create generational wealth.

My wife and I have been practicing it for the past 3 years. I studied it for about a year before we started our journey. It's a completely different way to think about money and seeing how much of your paycheck flows away from you and learning how to recapture those cash flows into your own banking system. It's also not an investment, it's a savings vehicle and place to store your wealth/capital and then you can choose to access your capital via policy loans and deploy it for whatever you want (payoff debt, invest, etc). And while your capital is deployed and working for you, your equity or cash value continues to grow because it hasn't been touched! The same dollars are working for you in two places. When you take a policy loan, you're getting the insurance company's general fund money and they use your policy cash value as the collateral.

I encourage you to continue educating yourself. Start with reading Becoming Your Own Banker and The Case for IBC. Banking with Life, Wealth Warehouse, and Cashflow Legendz are good podcasts to reference as well.