Banks create new money when they lend, but insurance companies lend from existing capital using your policy as collateral. A policy loan lets you act as your own banker, directing money toward investments or business while keeping control of the dollar throughout your life.
Conventional banks create money where no money existed before. You apply for, you get approved for a mortgage. This is the tool that's used to create the money, the keyboard. Money that gets created where no money existed before. When the life insurance company lends from its own general account while using your policy as collateral, that's fundamentally different from how conventional banks create loans within the banking system. And that distinction really matters because Nelson wasn't trying to get you, me, or anyone else excited about borrowing. He was trying to get us excited about stewardship of capital, and he did such a brilliant job at it because a dollar that remains under your influence, it can help finance the things that you need throughout the course of your lifetime, where you control how those things get financed. It can help capitalize a business, purchase an investment, help another generation. You became a better steward of capital because you became the banker as it relates to your needs. And that's why Nelson spent no time talking about interest rates. Interest rates explain the cost of a transaction. Stewardship determines the outcome of a lifetime of transactions. There's a difference. I go deeper in a free training at learnwithjay.com, or just follow along and I'll keep it simple.
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