Becoming Your Own Bank Prosperity Thinkers Version – Episode 560

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers, as we hit this deep dive into living our life insurance, we’re not going to be talking about being the bank, but this is the prosperity thinkers perspective. This is not what you’ve heard on Instagram, TikTok or YouTube video. This is the real deal. If you need the foundation, go back to some of the previous episodes. Jim, we’ll assume because we’ve got an amazing loyal audience. They’re already there. Take us. Take the lead. Take us on the journey. Let’s hear it. So first set the stage for us. Absolutely. Well, let’s begin with probably a couple centuries ago when the ability to borrow against your cash value was written in to the policy language of whole life insurance.

[00:57] It is provided by mutual companies which are owned by their policyholders. And the whole reason whole life was even created is that people had term insurance where they paid and paid and paid and paid and then didn’t die during the term of time, lost all that premium, lost the ability to do anything with that premium. And so there were bands of brothers, literally church brothers often is where it started sometimes they were connected in other ways and they created these mutual companies owned by the policyholders that could then utilize that structure to build an asset called cash value. And right away, people wanted to be able to have access to that asset. So the provision for loans against cash value was written into the policy

[01:50] early, early on, literally centuries ago. That’s the beginning. Okay, there’s something that you listed in there. There’s an overarching principle that most people never talk about, which is absolutely essential to do. So we have to zoom out. We have to look at the time of creation of this. So we went back centuries. Now we have to go and think about who those people were. They were principally based people on foundations of trust, on foundations of financial solvency and on having their money work for them. Then we also have to look at who were they as far as call it their wealth category. This wasn’t the peasants, but this also wasn’t the monarchy, the people that were controlling everything.

[02:44] These are people that wanted freedom, but they didn’t make it just for their people. They made it available for the peasants, but the peasants were only sold the dream of term. That was something you shared that’s so valuable because now we are participating in something that was, we’ll call it our freedom founders, the people that wanted to do something for life. That’s what this is. That’s why to me, when you shared it like that, it’s like, oh, wait, this isn’t just about becoming a bank. This is becoming truly based on something that is freedom focused. Okay, go from there. I had to jump on that soap box. I’m off now. I’m so glad because such an important addition to the thought that is prevalent

[03:35] in our society today that some people were right with you and some people had to step back and pause for a minute. So good addition. So in 1997 or eight, maybe 99, can’t remember exactly, a gentleman named R Nelson Nash wrote a book called Becoming Your Own Banker. Just previous to that, I believe I had published Live Your Life Insurance. Both of those books spoke about utilizing the cash value of life insurance and the ability to borrow against it. Again, both from the insurance company as well as from banks as a viable strategy for emergencies and opportunities. Nelson’s book has had now about five or six iterations, I believe. My book, Live Your Life Insurance has had two iterations and the entire space has expanded immensely.

[04:36] So we had Nelson’s Becoming Your Own Banker. There was an organization created around that called the Infinite Banking Concept, IBC, and there’s been numerous other little pieces and parts and factions that have developed from and within that environment. So the arena is all about borrowing against your cash value. It’s really just boiling down to that. And technically, frankly, we shouldn’t even really be using the word bank because I think it’s very misleading for people. You can collateralize your cash value. You can bargain to pay it back, bargain to pay it back. So it definitely has some elements of a bank, but life insurance at a mutual life insurance company and its cash value is not a bank.

[05:25] And yet you’re going to see, and I use the terms all the time, but you’re going to see the family bank, the unlimited bank. There’s just an endless amount of names around the arena. You’re going to even see people calling premiums deposits and that kind of thing. And I don’t know that that’s super wise, although I understand why they do that because the term can help us learn. The most important message is that this cash value is completely, and I use my little acronym of Clue CLUE. It’s completely controllable by you. It is liquid. You can utilize it for whatever you want. And it acts like equity, meaning you can borrow against it and it will keep on growing unaffected by the loan. And so that is very, very appealing to people

[06:13] that creates and supports solving emergencies and taking advantage of opportunities. Our society in the United States and Canada, because these policies exist very, very similarly in both countries, is not liquid enough. And the life insurance provides great liquidity for people. And it can sometimes get abused because people do take that concept of bank too far and try to pay their bills and that kind of thing with it. But if you just break it down to emergencies and opportunities, these are what those dollars are for. And the fact that this has literally been around for centuries, it’s a pretty straightforward environment to be the foundation for somebody’s personal and business and real estate wealth building empire.

[07:10] Absolutely. So we’ve covered a lot of valuable pieces in here of becoming the own bank. The previous episodes, we’ve talked about some of the details. We’ll have future episodes where we actually dive into the death benefit and spending down and utilizing all of these pieces. But there’s one area I want to cover before we go and cut ways for the next episode, which is a part of your acronym here, CLU, which is control. I want to take control and I want to tie that to centuries-old founding fathers. And I’m going to tie it to right now, which is today there are businesses and people that are having their businesses shut down, their bank accounts frozen because of what they say, because of what they believe in.

[08:06] Our country wasn’t formed that way, but it’s going like that right now. So you mentioned freedom earlier. Yes, exactly. So here’s the deal. The control piece has been important, meaning we have control, being able to utilize it. If you own a piece of real estate, like getting money out of that, if you want money out of it in a week is pretty complicated to do. This vehicle, not as complicated. But we’re not even talking about the money piece. We’re talking about the control piece because we live in a world where things are frozen. So why is that so important right now, maybe when it wasn’t as important five years ago? Well, because of freedom. And we think that we have freedom with the money in the bank.

[08:58] And unfortunately, we don’t. There’s a thing called civil forfeiture that I don’t even know who enacts it. The powers that be can come in and literally just freeze your account until they figure out if you’ve done something wrong. I mean, it’s the opposite of how our court system works, which you are innocent until proven guilty. In the civil forfeiture space, you’re not. IRS can come in and slap liens on your accounts. The states that operate the sales tax can come in and slap liens on your accounts. It is an endless amount of lack of control of dollars in a bank. And so, you know, small bank, big bank, local bank, nationwide bank, U.S. Canada doesn’t really seem to matter. And so what can people do about this?

[09:52] And clearly, you and I are not necessarily trying to promote any kind of conspiracy theory. We’re just helping people be wise. And because our society is absolutely drowning in information, yet starving for wisdom, I want to lay out some very specific things that you can do. And the first is to utilize the life insurance industry. I mean, this is a centuries old industry, very boring, very effective. Store a lot of your extra liquidity in the life insurance industry, which is a state regulated industry, not federally regulated, and whereby your dollars are reserved dollar for dollar. If you have a hundred thousand dollars of cash value, that insurance company has a hundred thousand dollars of cash value for you.

[10:44] Unlike a bank whereby your dollars are reserved, maybe seven to ten cents on the dollar, depending on when and where you do your research. I’ve heard worse numbers, but we’ll just go with seven to ten cents on the dollar is what a bank reserves for your money. So the insurance industry can be helpful there. Additionally, I think a lot of people are storing actual cash these days, whether you put it in the safe, in your wallet, in your briefcase, very in the backyard, whatever you’re comfortable with, at least have some actual money in literal dollar form so that that can be helpful to you. And then as I’ve recommended from as long as I can remember, have some food and water in your home so that you are not relying on having to have the

[11:36] access to money if something goes haywire in our society, as we absolutely saw happen in 2020. Deliveries, food at the grocery store, problems with demand and supply, and the shipping containers and everything else. It just makes no sense today to not have some bottles of water thrown in the back of one of your closets and food in the pantry that can hang out for a while and then stop thinking about it because there’s not a lot else that we can do, but we can do those things so that we have freedom in our minds to go do what we are good at out in the marketplace and not have the noise of this fear in the back of our heads. So good. That is the prosperous way of thinking about it. And so many people are scared

[12:32] to look at it like that or they’re really good at manipulating and marketing that they’re portraying it to be something different. They can put you in almost a trance to be scared, that you have to prepare for everything, or they can put you in a trance that everyone’s freaking out and this is the biggest and best opportunity and over leverage yourself. None of that was said here. This is all going back to centuries old thinking. And we’re doing this because one, it’s all prosperity and principled based and we know how important that freedom is. So Kim, wonderful episode. We’ll have another one that will dive deeper into the intricacies of being your own bank, but this helps set the prosperous tone. Appreciate it. Enjoy. Thank you for listening to the

[13:35] Prosperity Podcast. To take control of your money and have it work for you, visit ProsperityThinkers.com.