Infinite Banking Made Simple: Top Beginner Questions Answered

If you've spent more than about 11 minutes on the internet trying to understand the infinite banking concept, you've probably experienced the same thing everyone else has. People who tell you it's an investment, people who tell you it's life insurance, people who tell you it's a scam. Another guy who tells you that he got rich financing 17 Lambos, a goat farm, and somehow paid for his cousin's orthodontics, all with one policy and one premium payment. Today, Ash and I, we're going to cover the beginner's guide to this process. And you'll understand with ridiculous simplicity what the Infinite Banking Concept is. So what is infinite banking? What is the Infinite Banking Concept? The essence is ridiculously simple. It's to control how you finance the things that you will need throughout your lifetime while recapturing the interest that you would otherwise pay to someone else's bank. Or someone else's finance company. And I see so often online where there's comparison conversation between infinite banking and an investment. Infinite banking is not a mutual fund, a stock, crypto, real estate. It's not in an investment category at all. So people just ask, isn't it just Whole life insurance? No, that's— that would be like asking, isn't Amazon just a warehouse? In this case, there is a warehouse involved. You get to build your warehouse of wealth, but that's not the business. Infinite banking is a process. It's a way of controlling how you finance the things that you need throughout the course of your lifetime. And yes, the tool that's used to implement it is dividend-paying whole life insurance, ideally with a reputable mutual company. It's a method of organizing your capital so that you get to be in a position of total and absolute control. But if you confuse the process with the tool, it would be like confusing a hammer with home building, right? The hammer matters to get the home built, but what ultimately matters the most? The house. Once it's built, isn't that good?

No, it's great, Jason. And it's a great summary because it is, and we know it to be true that it is ridiculously simple. Unfortunately, with the noise out in the markets and the noise out in the environment and with people just not understanding how the concept truly works, they have a tendency to complicate it or believe that it's not valuable. And there's a reason why In Nelson's book, Becoming Your Own Banker by R. Nelson Nash, there's a reason why he puts so much emphasis on the human condition and how we work from a psychological perspective and how our perception works when, especially when we're introduced to new things as well. And when you really understand that, that really does set the stage to help people understand when they hear things, how to really go through that. How to sift through the things that don't quite make sense and then really start to, to appreciate and understand what the concept can truly do in their lives.

Yeah, very good points.

It—

people, when they're researching, there, there's— so there's a lot of frequently asked questions that, that make perfect sense, right? When you're researching something, one of, one of the, one of the things that you would want to know is like, how does it actually work? Really important question to get clarity on. The simplest— I think the simplest explanation that I've ever been able to give is that you pay premium in exchange for dividend-paying whole life insurance. The contract, the insurance contract, Immediately begins accumulating cash value, which is just the net present value of the future payment of a death benefit. Cash value is not money. The insurance company allows you to borrow against that cash value and to utilize it as collateral without interrupting any of its daily growth. The insurance company lends you its money. You get to repay That policy loan on your schedule. Meanwhile, your policy or system of policies ideally are continuing doing exactly what they were engineered to do— grow. That's it. It's ridiculously simple.

Yeah, we— when I say we, human beings— we are the ones that overcomplicate The Infinite Banking Concepts. We try to dive into it too much and we try to always believe that there's something else behind the curtain, like the Wizard of Oz, right? The guy moving all the handles. They finally pull the curtain and, oh, there, okay, there it is. Now I've got it figured out. That doesn't exist here. It's what we're telling you and how we explain this is there. There's no other magic secret behind it. And it really is that simple. But when— if we don't understand the reason why we are starting or want to do this in the first place, then we start to lose the reason why, or we start to lose focus on what really matters. And having control over the way you finance things throughout the course of your lifetime that you will need and controlling the banking function is what really matters financially. But until we have that conversation, a lot of people don't realize that. Or don't realize that they're the ones that can actually take back that control to benefit themselves and their family long-term.

Yeah, so true. It begs the question, which again, when we look up what are the frequently asked questions recently on this concept so we can stay current and continue to provide clarity, many people are asking, can you really become your own banker? And I think the phrase can be a source of confusion, right? Because people can hear it and imagine that they no longer need banks, which is impossible, right? Banks perform valuable functions, including moving a lot of capital around planet Earth. And Nelson The late R. Nelson Nash, the pioneer, the developer of the Infinite Banking Concept, someone who I was blessed beyond the definition of good fortune to be mentored by for so many years. We miss him. We think about him every day. And he always challenged us to think, and he would express fundamental truths. He said, there are 2 fundamental truths. The first is that your money must reside somewhere. And the second is that someone or some organization must perform the function of banking as it relates to your needs. He wanted you to understand that you can and should control the financing experiences in your life because you're, you're financing everything that you buy. Even when you pay cash for things, you're making a financing decision. Because when you pay cash, you have to withdraw it to pay with cash, and you cannot earn interest on that cash ever again. That's a financing decision. You're addressing lost opportunity. How much future opportunity am I losing? And what does that cost as a result of me paying cash to finance the thing that I want to purchase? You've got cars, homes, businesses. We were talking about this earlier— education, renovations, appliances, equipment, taxes. You participate in the function of banking every single day. What Nelson asked you is, who is the banker? As it relates to your needs. So when people are saying become your own banker, we're talking about controlling how you finance the things that you need throughout your life. That's a very, again, profound shift in thinking. You're still going to need the use of banks. You just get to be in a position to decide whether or not you want to do business with them. As it relates to your needs for finance. Isn't that good?

It's so good when the people that we work with, when they start to really understand how they can reclaim that function. Because I like the way that Nelson laid it out, where we talk about and go back to the 4 characters in the financial play. And we're only familiar, we've only ever seen the first 2, especially if you've ever walked into a branch or anything like that, right? You're familiar with being the depositor. Because that's where your money goes. And you're familiar with being the borrower because that's usually all we really know about. But what if you were able to be the banker to set and make the rules? And then what happens if you were able to also be the owner to participate in the profits as well? So, what happens if you were to be all 4? Do you think you would be bettering your position and being— putting yourself ahead of everyone else? Or do you think that control and that opportunities, do you think that would put you in a worse-off position?

Those are questions to grapple with because you, you have to think about your thinking. That's the key. Your thinking, not Nelson's thinking, not my thinking, not Ash's thinking, but your thinking. And I always tap into— Ash knows him and I We like to have discussions around logic. So if you were to tap into just the pure logic, right? What disadvantage does being in a position of control over how you finance the things you need, what disadvantage does that represent to you now and for the rest of your lifetime? Logically, it could not— personally, I can't speak for anyone else's train of thought, But I could not personally develop any response to that. I cannot see, and given that I'm entering my 19th year into my implementation of this process, 78 policies, $1.5 million in premium, more than $100,000 a month flowing back just in loan repayments from the family, never mind the external private lending that we do. What a peaceful, stress-free way of life it is when you get the bankers out of your life. It's remarkable. And that leads me to a question, Ash. How much money do you need to start? Very common question.

That is a great question. What are you hoping to achieve?

And how much money is required to achieve it?

Yeah, that's what we're going to find out. That's why. Yeah, exactly. And it's I think that when people ask that question, how much does it take to get started? Because it is a fantastic question, but if you understand the problem, if you understand what the Infinite Banking Concept can do for you, then that no longer really becomes the question. It all has to do with what your goals and objectives are financially, because that's what's the most important because your need today Financially is going to be very different 3, 5, 10 years from now. But worth talking about thinking long range, thinking generationally, not just thinking about tomorrow or the next car payment. That's the difference. You really—

Yeah.

So, when we talk about thinking, like you said, right? You have to really think about your thinking. And what did Nelson say when it came to people and thinking?

He said most people would rather die than think.

And how unfortunate is that?

Yeah, because of everything that people have going on in their lives. You've got family, you've got work, you've got all of these obligations that consume your thinking, and people have difficulty thinking past this weekend. Because of all of that busyness and all of those things going on in their lives. We have clients that they'll begin their journey, they'll put a policy in place on their child or their grandchild. Maybe they've got a couple hundred dollars a month in premium that they're paying. We have clients that pay multi-six figures in premium every month. And so we always say in good humor, if you're somewhere in between those 2 numbers, we can help you. Everyone's starting point is unique. There's no prescribed— this is where your starting line needs to be, otherwise the concept doesn't make sense for you today. That is simply not the case, because remember the first fundamental truth. Your money must reside somewhere. And when you develop a deep understanding of this concept, you will formulate the question, what better place to have it reside than here? Because from that place, you can set out to achieve all those things that you want to achieve financially. It's brilliant.

And I just, I want people that are watching and or listening to this episode to just really under— understand that, you know, we know and we can appreciate that financial conversations can bring stress in people's lives. If you look at, if you just look at the statistics, right? Yeah. Yeah. For most people, when it comes to their financial position, It's usually a stress point of some form or another, whether, whether it's small or big. So we understand that, we appreciate that. But sometimes you need to have those difficult conversations to really truly figure out what is important to you. What is a priority in your life? What are you trying to achieve? Because if we're not having those conversations, Then we're never really going to truly get to a better position or a better place in our lives. Because whether we want to admit it or not, or whether we believe it or not, money will always have a place and hold a position in everything we do in life. We just need to recognize that and figure out how can I be the one that controls what that looks like and what that outcome is. And this is one of those— this is one of those things that's going to help me achieve that. Whether we want to talk about it or not, we just need to realize that the conversation needs to be had. But once we have it, we can figure out what's the best way to move forward and what's that going to look like in our future.

Yeah, I agree with you. And it leads me to another frequently asked question, which is, am I too old? And I hear this so often throughout these past 18-plus years. In some cases, a 30-year-old thinks they're too late. A 55-year-old thinks they're too old. It's incredible. Apparently, everyone thinks that someone else started at the perfect time. You're always going to need the use of money. And we use the analogy, people don't go into branches anymore, but the last time you went to deposit money and you stepped into the branch, did the teller ask you how old you are? And you've all heard the expression, the best time to plant a tree was 20 years ago. The second best time is today. And so, could you have started earlier? Yes, of course. Could you have invested in Apple in 1997? Also, yes, it's neither observation changes the decision that you can make today. Your next 20 years begins regardless. You said it, the time's going to go by anyway. My question is, which financial system will you use during the next 20 years? What financial experience are you going to have over the next 20 years? Because People say, oh, I wish I would've known about this 5, 10, 15 years ago. You can't say that 5, 10, 15 years from now. The whole advantage begins when you get started. And it's not a function of how young or how old you are. It's addressing the fundamental truth. Your money must reside somewhere and someone or some organization must perform the function of banking. As it relates to your needs? It can and should be you.

The age bit is such a great question because the last time you went and purchased a car, did they say, oh no, you shouldn't purchase this car because you're too old? They will— they would never say that to you, right? And especially if it was something that was quite luxurious, but they would never say that to you. And to go along with that question, just ask yourself, because it's thinking about your thinking, ask yourself, Are you going to require the use of money throughout the rest of your life? If the answer is yes, then this applies to you.

Yeah, all day long. And we talked in a prior episode about the comparison because it's very natural for the human brain to think through a new idea. You've got— you have a mode of comparison, very normal. How does this compare to insert whatever it is that you might be doing financially already up to this point in your lifetime? You might be saving money, you might be investing it, you might be an entrepreneur. Maybe you're building a business or maybe more than one business. So you're making decisions as it relates to the use of your money. So when you're exposed to a new concept, comparison is probably one of the very early thinking patterns that you'll go through. And when Nelson did— he just did such a great job really emphasizing That the Infinite Banking Concept is a process, it's not a product. That when first heard, the brain goes, okay, I heard that, but I haven't yet compartmentalized it in the sense of if I was to compare process. So everything that people experience financially up to this point in their lives when they need to make a financing decision, There's an absence of control. There's some irritation, some tension around underwriting, filling out loan applications, credit check, income verification, having to repay on someone else's schedule. That's all process. And when you contrast what you've experienced up to this point in your life With the financing process and you contrast it with the Infinite Banking Concept where you're in a position of total and absolute control, no income check, no credit verification, no underwriting, no repayment schedule, you control. That's a much different financing experience and a much simpler process. Can you and should you continue to do whatever else it is that you're doing financially? You're investing in— insert whatever it is you're investing in. You're building— insert whatever it is that you're building as an entrepreneur. You're saving— insert whatever it is you're saving for or where you're saving it. Absolutely, because there's no comparison. We're not comparing To a product. We're contrasting a process. And then if you were to ask yourself, which process do I feel most aligned with? Ridiculous simplicity, total and absolute control, ready access to capital on demand on my terms. I control the repayment schedule. I'm not interrupting the asset's value or reducing it. I'm not triggering a taxable event. I can align with that pretty well. Versus continuing to experience what you've experienced up to this point in your lifetime. Sir, we need to run credit check. Okay. We need income verification. Okay. We need you to fill out this lengthy, nosy loan application. Okay. We need you to agree that you're going to contractually— that you're going to repay it on this schedule. And if you don't, you not only lose the thing you bought, you lose your credit. And we make your life miserable.

Okay. Yeah.

Which process do you feel most aligned with? Isn't that good? I kind of feel like I'm on 60 Minutes or something there, asking them. What do you feel most aligned with?

Yeah, it's good because if you keep repeating that same process and expecting a different outcome, I think we're starting to tread on the definition of insanity here, right? If we're constantly repeating the same thing over and over again, but I think it's very important to to remember what Nelson said at the beginning of his book, that this is an exercise in imagination, reason, logic, and prophecy.

That's right.

Because it really does take that to appreciate that and understand that at the beginning so that we can put aside our biases and what we think we know about the financial world and just take something else in. temporarily to be able to expand our appreciation and our knowledge. And if you can, if you just have the discipline to just do that, I promise you, you will start to see things differently.

Oh, absolutely. Absolutely. And what's the book again, Nash, that we keep talking about?

Become Your Own Banker by R. Nelson Nash.

1,000%. Add that to your wealth-building library. And Ash, okay, so let's— I'll address the viewers. So Ash and I, we're going to leave you with one final thought. And Ash, let me know if you agree with this. Every single person watching this right now already has a banker in their lives. Do you agree with that?

I would 100% agree with that.

Everyone does. The only question is, who is it? Because every time you finance a car, you carry a balance, you refinance your home, you, you borrow for your business, someone and some organization is profiting from that banking function in your life. It's just purely the truth. And you can go on through the remainder of your lifetime Negotiating with banks whenever the need for financing arises without ever realizing you're negotiating over a game you don't own. And then you introduce the infinite banking concept, which isn't about winning some imaginary war against the financial system. It's about asking a question that nobody is asking. How much of the banking function as it relates to my needs can I responsibly bring back under my control? That's a very different conversation. Very different. That is a massive financial decision. Very massive financial decision. And so, Ash and I always like to share, remember the episodes Because of the process. Remember them because of the process. Wealthy people, they don't just own assets. That's such a big misconception. They think differently about the movement of capital. So do banks. And so when you begin to see this concept for what it truly is and the ridiculous simplicity of it, You won't be able to unsee it. You'll notice it in every car loan, mortgage, business expansion, financing decision. The banking function can and should be controlled by you. And so, Ash, any thoughts that you want to add to that?

Yes, Jason, because you mentioned that you currently have a relationship with your banker right now and what's that look like? But you should also ask yourself, who's the one in control of that relationship? Because if you're not implementing the Infinite Banking Concept, and if you're not controlling that process, it definitely is not you.

So true. And the conversation Ash and I shared today, if it changes the way you think, even just a little, hit the subscribe button, leave a comment, let us know what insights came up for you. This is what we do. To help you see and think about money differently. And so just leave a comment. What was your biggest, wow, I never thought of it that way moment from the episode, right? Those comments, they help Ash and I shape what we tackle next. And so until next time, when you start thinking like a banker instead of just behaving like a borrower.

Bye.

Everything changes. We'll see you next time on The Command Post. Ash, this was fun as always.

Agreed.

Money flows. Once you begin to observe the pattern of flow, you start seeing something that most people miss. Money is always being stored somewhere and borrowed from somewhere. You've got car payments, credit card payments, loan payments. You're paying cash for things.