What Is the Infinite Banking Concept, in Simple Terms?

Hey guys, in today's video I'm going to be reacting to "The Infinite Banking Concept Explained," a four minute video by a guy named David Belfort. He did a voiceover while he drew it out. It's super well done. I actually watched it. I have an 11 point note that I'm going to go over after the video is done. So without further ado, let's jump in.

Okay, let's talk about how to control your wealth. First we start at your income. You probably receive money from either your job, or maybe you're a business owner, maybe you're retired and receive a pension, or maybe you were lucky and you got an inheritance. In either case, monthly or bi-monthly, you receive a paycheck. Now when you get that paycheck, there's really only four things you can do with it. You can save it, you can invest it, you can spend it, or you can give it.

But what if before we did those things, we first put that money into an area, a place that we control completely? Let's call this place your family bank. Now when your money is inside your family bank, you earn dividends, you earn guaranteed growth for life, it's private, you control it, you earn tax free growth, you can leverage it and put your money at work in more than one place at a time. You'll receive protection in the form of a death benefit in case you die, and from creditors in case somebody tries to sue you. Your money's protected and there's zero market volatility. What does that mean? That means there's no losses ever.

There's also opportunity, because when you have money, opportunity will find you. So you can use that money for investments, or maybe big purchases such as a car or college tuition, maybe a wedding. Then when you want to access that money, because it's liquid, you take it out and you can invest, spend and give with it. Okay, we got that part, but how do we do this?

Well, it's kind of like a mortgage. So if you're familiar with homeownership, you understand that you make monthly mortgage payments to the bank. With each payment, a portion of that goes towards the principal balance of the home and you build equity. Now when you have enough equity built up, the bank may grant you a home equity line of credit, where you can access that equity and use it for whatever you want. Now the family bank operates a lot like this, except with a few distinct advantages. One, with a family bank, you own it, which means you control it. Two, it's always guaranteed to increase, unlike your house. And three, there's no required repayments.

Okay, so what product are we talking about here? Well, you may have heard of it before. It's called whole life insurance, but more specifically, we use a specially designed life insurance contract, something you've probably never seen before. How it works is you capitalize your policy with premium payments. With each premium payment, a large portion of that goes towards cash value in your policy. Once it's in there, it's locked in for good. It can never decrease in value and it will never come out of there.

Now over here we have a separate pot of money. This money, our reserves, held by a mutually owned life insurance company. Now what does mutually owned mean? Well, simply put, you own the company, not stockholders, but you, the policy owner. Now when you want to access your cash value, you take a loan from the other pot of money and collateralize it with your cash value. No questions asked. You can spend that money however you see fit, and then you create your own repayment schedule. All the while your cash has been sitting safely and securely inside that policy, enjoying all the benefits we discussed above.

All right, I don't know about you, but I think David did a phenomenal job summarizing a very, very complicated strategy, the infinite banking concept, into four minutes. So David, great job, really appreciate it. I have 11 points that I want to mention before we wrap this video up, and I also want to say I would love to hear from you. So if you have thoughts about the video, what would you add, what would you subtract, what are your big takeaways? Would love to hear that.

And then also, if you're like, okay, I want to learn more about this infinite banking concept or the AND Asset strategy, we have this AND Asset Vault that gives more education, more interviews. We have a 61 page handbook that we're giving. So if you have questions about this strategy, you can go down below and click the AND Asset Vault and you can learn more.

So here are my 11 key takeaways. So obviously David talks the importance of income. Straight up, if you don't have income, the strategy doesn't work, along with so many other things. So the number one thing that you can focus on is, are you maximizing the cash flow that's coming into your personal household economy? That's number one.

Number two is he talks about money only does four things. We simplify and say money only does two things. It's either saved or consumed. Saved means it could be invested. Consumption represents the cost of doing your lifestyle, and giving is a decision of an intentional life.

So love where he's going. So you have income, it only can do so many things, and so what he's saying is, what if you had a family bank that you could run your income through, and ultimately that family bank could, if it had more pluses than negatives, could be an overall positive thing to your personal economy?

All right, number four is he goes into the nine benefits of your family bank. And so number one is dividends, number two is guaranteed growth, number three is privacy, number four is control, number five is tax free growth, number six is leverageable, number seven is protection, number eight is volatility, or zero volatility I should say, and number nine is this concept of opportunity fund, meaning if you have access to capital, opportunities will seek you out. Love that.

Now that we're talking about life insurance, the two other things that you could potentially add is understanding chronic illness riders, which essentially means if something happens to you in the future, you could potentially tap into the death benefit prematurely to pay some medical bills while you're alive. That's a benefit. And then the second big benefit is the death benefit. This is obviously an amazing asset for you, not just when you die, but while you're alive. And so those are two other things that you could add to that list.

Then he transitions, you could add this as like the 10th key benefit, but he transitions to the importance of liquidity. So fifth point that I want to make is liquidity. Liquidity, all that means is you can access this money while you get all the those

...benefits. So that's really cool, and that's his bridge to his family bank concept. And he says it's kind of like a mortgage, it's kind of like you're building up equity and you get a HELOC, which means you can have access to the bank's money while your house is hopefully growing in value. And the three things that he says about that is you own it, so you own the policy. Number two is it's a guaranteed growth. Your house is not guaranteed to grow, but your policy, if it's set up properly, is. And number three is you have no required repayment.

So a lot of times if you're dealing with banks, you have somewhat of a required minimum payment that you have to make, and the cool thing about your family bank is you don't have any minimum payments that you have to make. And so those are three distinct benefits that your family bank is versus having a mortgage. Number seven is specially designed. I have a ton of videos about making sure that your policy is specially designed. I believe it's one of the most important things that gets overlooked in the strategy, and so yeah, if you want to learn more, we have definitely videos about specially designed policies.

He talks about the importance of a mutual company, a mutual company versus a stock. A mutual means you have ownership. It's almost like a credit union versus all the profits go to shareholders that are not you. And so you want to make sure that you're mutually owned. That's point number eight.

Point number nine is he talks about collateralize. And what I love about how David explains this is a lot of people talk about borrowing from, and it gets very confusing because you're like, how do I get all these benefits and I'm borrowing from myself? Well, you're not borrowing from yourself. You're getting all these benefits and you're able to collateralize. Collateralize meaning you're taking someone else's money, you're taking the mutually owned insurance company's money while you're getting all the benefits, which allow you, and this is number 10 and number 11, allow you to spend your money on whatever you want, which can be a just as big of a negative as positive, but we'll take it as positive. You don't have someone looking over you and saying you have to get permission. No, you can use your money on whatever you want and your money continues to grow.

And so in summary, those were the 11 points. I think the AND Asset is obviously a book that I wrote about this strategy, very much again explains the power of having your money do multiple things. I think the multi-use or multi-utility aspect of what life insurance, when set up and used properly, can do for your money is pretty cool. And I love the fact that people like David make videos like this. And so David, thank you. I'll make sure that his videos down below, I'll make sure that the AND Asset vault is down below for you to check out if you want to learn more about the strategy, and would love to hear your thoughts in the comments, and make sure to subscribe if you want more videos like this.