Bank on Yourself is also known as Infinite Banking. When you maintain your winnings or dividends in your insurance policy, they continue to earn interest at the guaranteed rate of return on the policy. Because it allows you to generate considerable sums of tax-free money, this is one of the most financially sensible ways to invest in life insurance benefits. The term Bank on Yourself or Infinite banking is invented by Nelson Nash.
Infinite banking concept
Bank On Yourself allows individuals to create money securely and consistently through the compounding power of dividend-paying life insurance plans. The idea behind this concept is that a person with substantial financial reserves invested in these life insurance plans can borrow from themselves, again and again, using the same policy as collateral. You will never need to borrow from a bank again. You would just borrow from yourself and repay yourself over time, therefore becoming “your own bank.”
With an infinite banking concept, an individual can achieve financial freedom and never have to work again. The person can ask for money from himself and pay off the debt to himself. Therefore, becomes The bank for himself.
How to leverage the infinite banking concept
An increase in liquidity or cash flow is by far the greatest benefit of the infinite banking concept. Because the loan may be taken out more rapidly and the individual can get cash in hand faster and usually at affordable interest rates than those available from traditional lenders, the value of a whole life insurance policy functioning as collateral is significantly more liquid than other forms of investment, for example, real estate. The unmetered and condition-free borrowing helps the person in personal finance.
The Bottom Line
Finally, the endless banking concept and practice are for the people with the ability to think clearly and plan ahead and not suitable for people who lack financial confidence. The notion necessitates a financially stable individual who is willing and able to make a long-term financial investment. Before becoming your own banker, it’s critical to think about all of the aforementioned reasons. Therefore, you can visit life-benefits.com to learn about the infinite banking concept.