Protect Your Wealth with Infinite Banking: The Ultimate Guide to Creating Your Own Personal Bank and Securing Your Savings
Introduction
Bank failures have been in the news lately, with regional banks such as Silicon Valley Bank and First Republic Bank experiencing financial difficulties. As a consumer, it's important to be aware of the safety of your savings and how to protect them from potential bank failures. While traditional banking institutions are generally considered safe and FDIC insured, the recent failures have highlighted the risks associated with relying solely on these institutions for savings.
In this post, we'll discuss how the concept of infinite banking can be used to protect your wealth and give you more control over your money.
Fractional Reserve Banking and Bank Failures
The recent failures of Silicon Valley Bank and other regional banks have been attributed to a combination of bad loans, poor management, and fractional reserve banking.
Fractional reserve banking is the practice in which banks hold only a fraction of their deposits on hand, and loan out the rest to generate profits. This practice can lead to bank failures when too many customers demand their money simultaneously, causing a bank run.
Austrian economist Carl Menger explained why fractional reserve banking is problematic. He argued that
it creates a false sense of security for both depositors and bankers, as they believe that all the money in the bank is available at any given time.
In reality, only a fraction of the money is available, and the rest has been loaned out. This creates a vulnerability in the banking system that can lead to failures, as we have seen with Silicon Valley Bank and other institutions.
Infinite Banking Explained
How can the infinite banking concept solve the problem of liquidity if you have your money in a traditional bank like Silicon Valley Bank?
Imagine that you have a lemonade stand and you want to sell more lemonade. You have a bunch of customers who come to buy lemonade from you every day, and you make money by selling them lemonade.
But what if you could also make money by lending them money to buy lemonade from you? That's basically what banks do - they lend money to people and charge interest.
Now, imagine if you could be your own bank. You could save your money in your own bank and lend it to yourself whenever you need it. That's the basic idea behind infinite banking. You use a whole life insurance policy as your own personal bank, and you can borrow money from yourself whenever you need it or use the money to fund investments.
Protecting Your Wealth with Infinite Banking
One of the best ways to protect your savings is to ensure that your bank is FDIC insured. However, this protection is limited and may not cover all of your savings if a bank fails. This is where the concept of infinite banking comes in. In addition to protecting your savings from traditional banking failures, infinite banking can provide a number of other benefits.
Some of the key benefits include:
Protection from Bank Failures: By utilizing whole life insurance policies as a savings vehicle, individuals can protect their wealth from the risks associated with traditional banking institutions. Unlike banks, insurance companies are required to hold much higher reserves on hand, which reduces the risk of failure.
Liquidity: The cash value in a whole life insurance policy can be accessed at any time without incurring taxes or penalties, providing individuals with greater flexibility and control over their finances.
Control: Infinite banking allows individuals to become their own bankers, giving them complete control over their money and enabling them to make financial decisions that align with their personal goals.
Estate Planning: The death benefit in a whole life insurance policy can be used to provide financial security for loved ones or a cause you want to impact upon your death, making it a useful tool for estate planning.
Others include access to a super-charged savings with no market risk, reduced taxes, and no underwriting requirements for capital needs, as well as providing peace of mine that your hard-earned capital is safe.
Real-Life Examples of Infinite Banking
Robert Kiyosaki, author of the best-selling book "Rich Dad, Poor Dad," is a big proponent of infinite banking. He used this strategy to protect his wealth, his savings, and have more control over his money. He explains that by using whole life insurance policies as your own personal bank, you can grow your wealth and protect your savings from market downturns and bank failures.
For example, let's say you have $100,000 in savings. You could use that money to buy a whole life insurance policy and create your own personal bank. You can then borrow money from your policy whenever you need it, while your policy continues to earn interest with uninterrupted compounding at a guaranteed rate of interest as long as the policy is in force.
This allows you to grow your wealth, have more control over your finances, and protect your savings from fractional reserve banking, inflationary monetary policy, and the potential failure of banks.
Creating Your Own Personal Bank with Infinite Banking
To create your own personal bank using infinite banking, you need to purchase a whole life insurance policy from a mutually-owned company that has a cash value component. You pay the premiums on the policy, which go towards both the death benefit and the cash value. The cash value grows over time and can be used as savings that have no exposure to traditional banks and financial markets.
By using infinite banking, you can take control of your finances and protect your wealth in a way that traditional banking cannot offer. It's a strategy that has been used by many successful individuals, including Robert Kiyosaki, Walt Disney, the Rockefeller Family, and many more to protect their savings and create generational wealth.
Final Thoughts
If you're concerned about protecting your wealth and taking control of your finances, infinite banking could be the solution you're looking for.
By creating your own personal bank, you can protect your savings from traditional banking failures and market risk while also enjoying reduced taxes, access to funds at any time, and more control over your finances.
To learn more about infinite banking and how to create your own personal bank, sign up for our 5-day Protect Your Wealth challenge. During this challenge, I'll teach you the concept of infinite banking in more detail and help you create your own personal bank so you can take control of your finances and protect your wealth!😄