What is Privatized Banking?
The need for financing plays a significant role throughout our lives. We finance things every day. Most people rely on traditional banks to meet their financial needs, but this often leads to undesirable consequences. Fortunately, there is an alternative solution to self-financing, known as Privatized Banking. Essentially, this means you become both your own bank and your own banker.
Privatized Banking can be defined as the systematic and optimal accumulation and deployment of capital, from both an economic and a capital perspective. The accumulation of capital refers to how you store or “accumulate” your money. This could be in a 401(k), IRA, Roth IRA, real estate, etc. Many people are misled into believing that accumulating capital is the most important aspect of financial security. In reality, it’s not even the top priority. The most important factor for your financial health is how you finance the things you acquire in life—this is the “deployment” of your money. To become financially independent, you need to develop acquisition strategies in your financial plan—specifically, how you’re going to finance what you purchase in life.
Privatized Banking was created to address both the accumulation and deployment of capital. It provides a secure place to accumulate and grow your capital at a guaranteed rate. Within this account, your capital can be deployed in ways that do not hinder the growth of your money. This is often referred to as “uninterrupted compound growth” and is just one of the many benefits of Privatized Banking.
Starting Point:
To begin with Privatized Banking, you must answer the following four questions:
- What rate of return do you need to earn on your savings and investments to retire at your current standard of living, and ensure your money lasts through your life expectancy?
- How much do you need to save on a monthly or annual basis to retire at your current standard of living and ensure your money lasts throughout your life expectancy?
- Given your current situation, how long will you need to work in order to retire and maintain your current lifestyle until your life expectancy?
- If you don’t make any changes, how much will you need to reduce your standard of living at retirement to ensure your money lasts through your life expectancy?
It’s very common for individuals to be unable to answer these questions. These questions are not exclusive to Privatized Banking but apply to any kind of financial planning. How can you know where you’re going if you don’t know where you’re currently at? If you’re serious about securing your financial future, it’s relatively easy for me to provide you with these answers.
Privatized Banking: Plant, Product, Professional
Privatized Banking is often referred to as the Infinite Banking Concept. You may be wondering what this “safe house” is that I keep mentioning. Privatized Banking utilizes a whole life insurance policy. However, not just any whole life policy will suffice; the plant/carrier and product play a significant role in this method.
The carrier you choose must be mutually owned, meaning the policyholders own a part of the company. The product needs to be a dividend-paying whole life insurance policy. There has been some talk about using a universal life policy for Privatized Banking, but this is incorrect. A universal life policy has a rising cost of insurance, which means your premium increases every year. For Privatized Banking to work, the cost of insurance must remain low, so more of your premium can be directed toward building cash value.
With the policies we structure, we immediately reduce your cost of insurance by 60%! This means that 40% of your premium goes toward the cost of insurance, and 60% is directed into your cash value. As each year passes, less money goes toward the cost of insurance, and more is directed into your cash values.
Another critical element of Privatized Banking is the professional you choose to work with. You need an advisor who is an expert in this field. To be associated with the Infinite Banking Concept, your advisor must be an authorized practitioner, or work under one. Authorized practitioners undergo extensive training, interviews, and written exams through the Nelson Nash Institute. They adhere to a high code of conduct and can be terminated at any time for breaking these standards, ensuring consumer protection.
Key Benefits of Privatized Banking:
- Uninterrupted Compound Growth: This is one of the most powerful benefits. When you borrow money against your cash values, it doesn’t interrupt the growth of your account. For example, if you have $100,000 in cash value and borrow $60,000, the entire $100,000 is still earning interest.
- Liquidity and Flexibility: You have full access to your cash values at any time, for any reason. Whether you face unexpected expenses, want to pursue new business opportunities, grow your investment portfolio, or make home improvements, you can use the money to fund anything, providing limitless possibilities. Unlike qualified plans like a 401(k) or Roth IRA, you will not face penalties or fines for using this money.
- Tax Advantages: The growth inside the account, policy loans, and the death benefit are all tax-favored.
- Legacy Planning: The death benefit provides peace of mind, ensuring your loved ones will be cared for after you’re gone. Additionally, the death benefit allows your family to create generational wealth. By teaching your family about this concept, they can use the death benefit to fund their own policies, securing the financial future of generations to come.
- Protection from the Market: Privatized Banking offers a predictable growth path. Your cash values grow at a guaranteed rate, regardless of market conditions. This feature is especially valuable for those seeking reliable returns during retirement.
- Control Over Your Money: If you choose to borrow against your cash values, you decide how to repay the loan. We understand that some months are financially harder than others, so this provides flexibility in how you repay your loans.
With a traditional whole life policy, cash values often take years to grow. However, we structure our policies differently, so your cash values begin to grow just 24 hours after activation! We also understand the importance of the banking function and recognize how large corporations make millions off of you. It’s time to start thinking outside the box and break away from tradition. You have the opportunity to take control of the banking function and use it in a way that works for you.
If you have any questions or are interested in learning more, please feel free to reach out to me using our contact page!
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