Sunday, November 1, 2009

Becoming Your Own Banker: the Infinite Banking Concept

What is the banking process?

One of the fundamental principles of wealth is that anytime you can redirect interest that you are currently losing to banks or other financial institutions back to yourself or an entity you own, you are safely and significantly increasing your financial worth. Implementing the Infinite Banking Concept will do exactly that, redirect this interest back to you, with additional growth and tax advantages.

The average American spends 34.5 cents of every dollar on interest alone. On the other hand they are doing everything they can to save even 10 cents of every dollar (average saves 5), a 3.45 to 1 ratio of interest to savings. Instead of searching for a higher rate of return and risking those hard earned dollars, changing the environment in which your money is working will dramatically change your financial status. Imagine a plane flying at 100 miles per hour, a relatively good speed, but the actual speed relative to the ground will be determined by other factors as well such as a 345 mph headwind. How fast is the plane going now? Still 100 mph in speed, but relative to the ground it is actually going in the reverse direction 245 mph. The pilot might as well ground the plane and wait it out, its only doing him worse. Now let’s imagine that he waits for a 345 mph tailwind. He is still flying his plane at 100 mph, but this time with a powerful tailwind that brings his actual speed, relative to the ground, to 445 mph! A 690 mph difference all because the change in environment.

The same applies to infinite banking. In the case of flying an airplane you cannot necessarily change the environment, but in the financial world you can. You see, most financial advisors are trying to increase the “speed of the airplane.” Going from 100 mph to 110 or 120 mph is not the answer to the problem. It’s the environment. Implementing the principles of Infinite Banking will create as radical a change to your financial situation as the change in wind is to the airplane.

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