The Infinite Banking Concept

Wealth Transfer in America

In 2007 the personal savings rate was negative for the first time since the Great Depression. Americans are now spending more than they are making. How is that possible? The previous 10 years saw record breaking growth in both the stock and real estate markets, yet most households need the incomes from both parents to make ends meet. This has changed the fabric of our lifestyle. We are spending less time with our kids and more time at our jobs. The value of family and community has diminished. Why? Well, the answer is that most of us are trying to keep pace with the neighbors. We measure success by what we have. This leads to ever increasing family expenditures. C. Northcote Parkinson observed that “a luxury once enjoyed becomes a necessity.” So, must we go backward in order to go forward? No. The problem is not what you buy but how you buy it. Did you know that roughly one-third of every disposable dollar goes to pay the interest on financed expenses? The amount is staggering! We are bombarded by financial institutions with offers to finance practically everything. They clearly understand the economic power of financing and therefore encourage us to do it at every turn. Just the fact that the banks mail us vast amounts of credit card applications tells you what? They must be making A LOT of money. With their pockets full don't expect any changes.
So, if the banks won't change then what can you do? Well, you must seek to put yourself in control of your money. Therefore, you must treat yourself like a banker and create your own system of banking. The only way to avoid the transfer of interest and the opportunity costs that accompany it is to put yourself in a position where you have the choice to use your money or someone else's. This means that you must save enough until you can choose to pay cash or finance. If you pay cash you should pay yourself back. As long as you borrow money from others you will be forced to transfer some of your wealth away. Doing this will allow you to regain control and take charge of your financial future. Ask yourself this question: “If you had your own banking system how would you view borrow money from the local bank?” Borrowing from yourself and paying it back means that you get every penny back. Interest charges are gone forever. Not only do you recapture the interest that you were previously sending to various financial institutions but you also recapture the principal. By transferring the financing from the local bank to your personal banking system the cost of your purchases are significantly reduced.
You may be wondering what the difference is between a local bank and your personal baking system. Well, the condensed answer is that the local banks are federally chartered institutions that require vast amount of time and capital to start. But banking itself is merely a way of transferring wealth from savers to borrowers. What exactly is banking?

What additional advantages would you enjoy by becoming your own banker?
Purchase a car and increase your wealth by doing it.
How many cars have you owned over your lifetime? How much have you spent on those cars? How did you factor in the interest paid? What about the lost opportunity cost on those dollars? Did you pay cash, finance or lease? No matter how you bought the car you unknowingly transferred some of your money away. How?

1. If you financed your purchase then there's the obvious wealth transfer in the form of interest payments to the bank.
2. If you paid cash then your wealth is being transferred because that money is no longer earning interest for you.

What about your credit cards, student loans, home loans, business equipment, etc.? How much money do you think you transfer away to the financial institutions every year in the form of interest payments and finance charges? What would those dollars be worth today had you been able to keep them? You may be asking yourself is this even possible? The answer is: ABSOLUTELY! We can show you a process whereby you can recapture every penny of your principal and interest, regardless of the cost…just like a bank does! You’ll earn interest on that recaptured money as well and through the Velocity of Money Multiplier Effect your wealth will increase much faster than if you had not borrowed it. Get your own customized analysis to see how you create wealth from Personal Banking.

It's about the banking process, not a financial product.

Are you looking for a magic pill to cure your financial woes? Well, this isn't it. If you're looking for a get-rich-quick product then you'll have to keep searching. What we teach is a process to systematically turn the tables on the traditional financial institutions. Conventional financial planning would dictate that in order to build wealth you need to:

1. Achieve higher rates of return
2. Spend less on your current lifestyle to save more and
3. Maximize your contribution to your company's qualified retirement plan

The first question that most financial advisors will ask you is “how much money do you currently have?" The next question is usually, “where is it?" Once they know where your money is they will usually start telling you about how their products are better. Very few advisors will spend time talking with you about the money transfer problems that erode your wealth. After all, it's much easier to sell someone a product and go on your way because anything more than that takes more time and energy. To illustrate the point that products are not as important as the process let us assume that we're going to send you to play in the Master Tournament, golf's most prestigious event. We have two things to offer you but you can choose only one. You can have the clubs of any golfer who's ever played the game or who can have their ability. Which one would you choose? Of course you would want their ability, or swing. This is what we're teaching people with the Perpetual Banking Concept. Unnecessary wealth transfers are the fundamental problem. The process that we teach solves this problem and eliminates the staggering cost of financing. Learn how to use financing as a tool!

Tax free 401k? Now you can get your tax deferred growth to come out tax free. Proper retirement planning is crucial. How would you like to have 33% of your nest egg taken away at the time that you need it most? What if your current savings isn't enough to sustain you and your spouse through retirement? Who will take care of you during your final years? Most qualified retirement plans do two things:

1. They defer the tax and,
2. The tax calculation.

Which one of these two things are you looking for? Well, since most of us are smart shoppers, we decide that it's best not to pay our taxes today and defer them until some date in the future. You're undoubtedly looking for the tax deferred growth. I have two questions for you. What tax bracket will you be in when you retire? What deductions will you have when you take the money? If you're like most people you'll be in the highest tax bracket and you'll have the least deductions when you retire. What does that mean? Well, it means that the IRS will be taking more of your money at retirement. What if you could change that? What if you could still get the tax deferred growth during your accumulation years but have the money come out tax free during the distribution years? That means that you get to keep every cent and the IRS can't touch it. Check with us to see how well you’ve planned for retirement.

Enjoy a tax free income stream that will last longer than you will.

One of the greatest benefits of becoming your own banker is the creation of a tax free income stream. Wouldn't it be great if that income stream continued to grow while you spend it down? And at the time of your passing, wouldn't you like to pass your nest egg on to your family and children tax free? Definitely! When you learn and apply the process that we teach not only do you have a wealth building machine for yourself but you can create a legacy that you can leave for future generations.

Who is in control of your money and financial destiny? Is it the government, your employer or financial advisor who is steering your ship?

Are you in control of your financial destiny or are you relying on someone else to get you through? Do you expect the government to provide you with Social Security and Medicare benefits? Maybe you feel your employer's defined benefit plan will be enough to take care of you and your family. Or do you feel that your financial adviser has your financial future well in hand? Who's in control and who makes the rules? Does the government guarantee your Social Security and Medicare? Absolutely not! They can change the rules whenever they desire. Social Security is sorely under-funded. In 1950 there were 16 workers paying in to the system for every 1 worker receiving Social Security Benefits. In 2004 there were 3 workers paying in to the system for every one worker receiving benefits. And soon that ratio will drop to 2:1. But that's just part of the problem. People are living longer these days with a greater life expectancy. The longer they live the longer that the government must pay those benefits. Federal Reserve Chairman Ben Bernanke stated that unless Social Security and Medicare are revamped, the massive burden from retiring baby boomers will place major strains on the nation's budget and the economy. Betting your future on your employer is extremely risky too. Defined benefit plans are in extreme danger and you may end up losing a substantial chunk of your retirement benefits. And how good is your financial advisor? If you don't take control and seek the financial education that's necessary then your financial destiny is left to the discretion and experience of your advisor. Unfortunately, most financial professionals will only talk to you about their products. Very few will spend time discussing money transfer problems because it takes more time and energy. It's much easier for them to sell you a product and then go on their way. We focus on educating our clients about the process and the benefits of eliminating unnecessary wealth transfers. Click here to find out how we can help you eliminate wealth transfers in your life.

If rate of return is important, what is the return on tax free?

Most financial professionals would have us believe that rate of return is the most important factor for growing your investments. Therefore, their primary focus is on the products and “where you have your money." We disagree with this philosophy. By becoming your own banker and eliminating the staggering costs of traditional financing you can dramatically increase your wealth building potential. To illustrate this point let’s assume that I am the greatest financial planner in the world and I can get you a 100% return on your investment every single year for the next 20 years (See chart below). Comparing the growth in a tax free account and a taxable account is staggering. We’ve used tax rates of 0%, 17% and 27% respectively for 3 fictional clients. Many people are in higher tax brackets! Now, I have performed equally well for each of these 3 clients. What’s the difference? Will getting a higher rate of return solve the problem? Absolutely not! The bigger issue is the tax paid on those gains. So, which one client would you prefer to be? Of course you'd want the tax free plan. Contact us to find out what the effective rate of return on your investments is!

Pensions are in deep trouble, how safe are you?

44 million Americans are covered by traditional pension plans. Are you one of them? Currently there are about 30,000 defined benefit plans that are under funded to the tune of $450 billion. According to government estimates, in 2005, so many large U.S. companies grossly mismanaged their pension funds that their total deficit reached a record $353.7 billion and smaller companies ran up a total pension deficit of $100 billion. Jim Lange, the author of a bestselling book entitled “Retire Secure! Pay Taxes Later: The Key to Making Your Money Last as Long as You Do," states that “you, and only you, are responsible for funding your retirement. You can no longer depend on your employer and it's hardly worth mentioning that Social Security isn't going to get you very far. As corporate icons like GM, Verizon, IBM, Sears, Lockheed Martin, Motorola, Circuit City and Hewlett Packard declare pension freezes, Americans need to reevaluate their retirement plans." The band-aids that the government has put in place are too-little too-late. The Pension Benefit Guarantee Corporation, which is funded by U.S. taxpayers, is charged with bailing out employers who renege on their promises. In 2000 the PGBC had a $9.7 billion surplus. Six years later they had an insurmountable deficit of $28 billion. The Pension Protection Acts of 2006 and 2007 do not do enough to address the severity and time sensitivity of this crisis. People will need to rely more on themselves rather than the government or their employer. Contact us to get back in control of your financial future.

Grow your nest egg predictably year after year no matter what happens to the stock, bond or real estate markets.

What would it look like if you could have a guarantee? Guarantees provide security and give us peace of mind. Well, if could get a guaranteed rate of return without subjecting your nest egg to the volatility of the stock, bond and real estate markets wouldn't you want it? Our financial markets are subject to increased volatility these days due to global integration and technology advancements that have led to lightning quick communication. Events worldwide impact our markets immediately and vice versa. Whether it's an economic boom in China, the Hurricane Katrina disaster in the Gulf Coast or an OPEC decision to slow oil production, our local and national markets can be subject to immediate spikes and slides. Once again, who is in control of your financial destiny? With pensions, Social Security and Medicare in disarray; an ever increasing national deficit making the U.S. the world's largest debtor; and countries such as China beginning to pull money out of the U.S. to put towards building their own economy, how safe do you feel your nest egg is? This is where the Infinite Banking System comes in. If you're interested in maximizing your opportunities and limiting market and tax liabilities then it's worthwhile to find out more about becoming your own banker from one of our financial strategists.
Contact us now!