When the world is seemingly bursting at the seams and chaos starts to settle in, the simple life of infinite banking starts to shine more and more.
Topics Discussed:
- Rules and Process to become Confident Financially
- What it is like to be in an IBC during Chaos
- Why you should learn a new Paradigm and Idea in times of Chaos
- Opportunity to experience something you’ve never experienced before
- Understanding how simple IBC Life can be
Episode Resources:
- Gain access to our Beginner’s Course now FREE to listeners of the podcast here now
- What is Infinite Banking
- Who was Nelson Nash?
- CREDIT: Episode art background photo by Jp Valery
Podcast transcript for episode 166: Infinite Banking Concept During Financial Crisis
Nate: When the world is seemingly bursting at the seams and chaos starts to settle in, the simple life of infinite banking starts to shine more and more. She’s Holly and she helps people find financial freedom.
Holly: He’s Nate, he makes sense out of money. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered.
Nate: All right, everyone. Welcome back to the show. Holly, the news has been pretty sour financially for most of this year, all across the board. You’re reading on the Wall Street Journal, there’s just pessimism everywhere and there’s chaos everywhere. And so that’s really what I have been feeling lately. By the way, Holly, I got started doing infinite banking in 2012. Besides the blip, that was the Covid chaos, like March, April and May of 2020, where everything was chaotic and then the Federal Reserve started buying everything and the government started sending out stimulus payments and everything to settle everything down. There was a small blip of time, but really since I got started, everything has been nice and easygoing in the financial world. Mortgages were cheap, house prices were always going up. Commercial real estate was looking great. The stock market was one of the longest rallies ever.
And so IBC, by the way, infinite banking was actually thriving during that time, but I never personally got to feel what it was like to be an IBCer during chaos. I heard about it. I heard stories of Nelson Nash describing the dot-com bubble. I heard stories of the housing crisis and the financial crisis of ’07 and ’08, ’09. I heard there were people doing IBC there and they would tell their story. In fact, in those moments, especially in the financial crisis, that’s when a lot of people discovered IBC because they were desperately seeking something. And so you hear stories about it and you’re like, “Yeah, I wonder what it would be like to be an IBCer, to practice this concept.
When the world is chaotic, the financial world’s chaotic. I’m telling you we’re living it right now. I am more confident than ever before that what this thing is extremely valuable. In the midst of chaos when the world seems to be falling apart, IBC starts to shine more and more and more. You can feel it. I hope you can feel that you are insulated from all of this and life can be simpler and more freeing and under more control as an IBCer. So that’s going to be the premise of this episode. We’re going to talk about a few things, Holly, but that was just setting the stage.
Holly: And I would say there’s a peace with it, Nate, that you don’t have while all the chaos is going around you that you do feel that isolated bubble. You feel as if you’re in your kind of own little, I call it my IBC world, but I’m in my own world and I know that there’s all this other stuff going on outside of that, but I’m not anxious or stressed or worried about what is taking place in those areas because of the system we have in place.
Nate: That’s right. I’m just paying premiums right now. The cash values are all growing all the time and I’m feeling really great. I can’t wait for the other premiums to come do. I just can’t wait to put money into IBC because I can feel the emotional freedom that you can find. We’ve told the story before many times. Nelson Nash and Ray were, I think you said it was in Austria during the financial crisis of ’08 and ’09, and they just woke up jokingly stretched their arms, saying, “Man, I’m glad my cash values went up today.”
So you hear these kind of funny stories, but I didn’t get to live through that as an IBCer. So now that I’m living through this year, it’s just like, “Wow.” Of course, I knew what I had was good, but man, it seems to really shine and you see the world at large flooding towards something that is good in good times, and good in bad times. And I think IBC is one of the few things that does that. It’s good in good times, it’s good in chaos. In fact, it’s better in chaos as far as in its own imagery than it was in good times.
So that’s one thing I wanted to make kind of clear. Holly, you and I were talking about this concept before the show and I was mentioning that even the strongest critics of IBC, those who are most vocal against it in some ways, you hear stories of them changing their mind. Oftentimes it comes when chaos strikes. So in other words, maybe everything’s going good and they’re like, why would I change what I’m doing? Everything’s going just perfectly fine, and then suddenly the crypto market bursts and they lose hundreds of thousands of dollars if not more, and it’s just gone. And then they’ve been residential real estate investors and now there’s a whole bunch of uncertainty in that environment and suddenly… Or maybe they’re in commercial real estate and it’s getting harder and harder to find deals and they’re trying to figure out what to do with money and they realize, “You know what? Maybe if I had been practicing IBC for the last five years, I would be more confident about my financial future.”
But one of the things I wanted to say is their pride may soften and they may become humbly enough to learn a new paradigm and learn a new idea in times of chaos. All I’m saying is IBC was just as good before the chaos showed up. They just couldn’t see it. That’s essentially what I’m trying to say. They couldn’t see the real message because they felt like it was an unnecessary message. But it becomes quite obvious when chaos strikes.
Holly: Well, and Nate, I can remember a story from ’08, ’09 with an individual that actually had, this is kind of crazy, he had an original illustration that an insurance agent had given him 10 years before and he literally said, “If I’d only done this instead of my investments,” he lost all his retirement. It was gone. And he is like, “If I’d only done this, this is what I would have today.” And he is like, “So now I have to go back. I have to rebuild all that wealth and use a different vehicle.” But he was like many other people, I’m going to say you as a skeptic like, “It’s too good to be true. What’s the downside?” I’ve even heard, he’s like, “Oh, I just thought it was a Ponzi scheme.” And that’s why we say there’s rules and there’s a process. It’s not a get rich scheme overnight.
There are rules and processes, but it is isolated and it is your banking system and it’s something you can control. And I think in the midst of all the chaos we have right now, with everything going on, especially financially in the world, this is something that actually brings you, like we say, financial freedom. It brings you a sense of peace. We’re just paying our premiums, but we paid our premiums and I’m like you, I got some premiums due this month. I’m not stressing about it. I’m kind of excited.
Nate: I’m loving it. Yeah. I’m excited to pay them.
Holly: Oh, I get pay my premium, versus people going, “How am I going to afford that? What am I going to do?” There’s people that even rent is going up or they can’t afford, whatever it is, the roof over your head, the clothes you have. This is something that gives you the opportunity to really experience something we’ve never experienced before. And your generation, I’m going to say I live through the dot-com bubble, all that, but I wasn’t as financially sound as I am today because I didn’t have money invested, probably. And I have a lot more peace today where my money is and where it’s going to versus what’s going on in the world.
Nate: Yeah. And one of the things I really am starting to realize is Nelson Nash would always describe IBC, and he would just mention, “If you can catch this, don’t you realize how simple life can be if you become your own banker?” And he would mention things like that. I think he lived it out longer than anyone has. He lived it out for almost 50 years. I guess 40 something years is of actual practicing IBC. And he’s like, “Don’t you understand how simple life can be, becoming your own banker, not having to worry about all these sorts of things?”
Now, it doesn’t mean that you may not borrow from your policies to make investments and they may go south, but I’m just saying the overall life of infinite banking becomes more and more compelling the more chaos there is around, and sometimes it just simply takes some chaos to awaken people to the reality that IBC actually offers something that the world actually wants, that the people really want. They may not have realized that when everything was really, really smooth and going really well, but they realize it becomes more painfully obvious in the times of chaos.
The simple life of IBC, of just paying premiums, having policies grow all the time and picking and choosing investments based on your own expertise. That’s the idea of IBC is that you’re not following prey to unknown risks essentially, where you’re just putting money in, you’ve got your ears tickled, trying to chase rates of return. You don’t have to do that anymore as an IBCer. You can just pick and choose the deals you want to be a part of, knowing that even if you don’t take part, you’re going to make a lot of money.
Well, this is why, Holly, I call it one of the only things that’s good in good times and it’s good and bad times. I’ve been reading a book, actually, one of my clients recommended it to me and I’ve just been loving it. I’ve actually not totally finished with it yet, but it’s the book Antifragile. I think he was even the one who connected the concept of being anti-fragile and IBC. And then you start reading the book and you’re like, “Holy cow.” So the idea of anti-fragility is essentially things that thrive in chaos. Like the more chaos that encompasses it, the better off that thing is. The organism is, or the political system is or whatever it is. So the goal really should be to become anti-fragile, which is to thrive during chaos. But the other thing about being anti-fragile is that it doesn’t actually need chaos to thrive either. It’s actually good on its own. The system is working on its own even if there was no chaos. But then it starts to reveal itself as being even more powerful during chaos.
He was the one who mentioned this, and I totally agreed that IBC’s one of the few things in the financial world that is essentially it has survived and thrived in every single chaotic environment for the last 170 years or so, from when it was started. It’s the only thing like it that is truly anti-fragile that looks even better. People start flocking towards it, the more the chaos is. So I don’t know. We wanted to chat about that for just a moment that that’s what I’m living. I’m living for the first time and I just thought I’d let the world know for the first time. And by the way, this episode may not launch until January 2023. Just know that we’re producing this episode in early December. So who knows what the world’s going to look like when this actually launches? Maybe things are going to be great, maybe things are not, I don’t know.
Holly: Well, a lot of people differ, Nate, on that. There’s a lot of differing opinions out there in regards to the chaos as well.
Nate: Yeah. Could be way more chaotic than it has been. But essentially what stirred this, Holly, as we talked about is you just read article and article. Right now, the big thing in the news is really crypto has just been decimated all year. And you look at, let’s say Bitcoin, it was $50,000 to start the year in 2022, and now here in December it’s 17,000. It’s lost over 60% of its value. And then to stir all of that up, the big crypto exchange trading firm, essentially FTX has just gone under, filed bankruptcy. Who knows if everyone’s going to get their crypto back. I don’t know all the ins and outs of that, but that’s terrifying. I have plenty of clients, some who made a lot in crypto and actually got out on time, others did not. And a few clients have lost everything in crypto. They fell prey for these cryptocurrency firms going under and they’ve just lost their money. And they were leveraging money, they were doing a lot of things because crypto, when everything’s looking good, the tide raises all boats, everything was going great, and then it came crashing down.
So that’s what we’re seeing in that world. The stock market year to date’s down 20 to 25%, that’s no fun. A lot of people are losing money there. And then just an article came out this week in the Wall Street Journal about how commercial property funds are seeing a huge exodus where someone like the Blackstone, REIT, the REIT of Blackstone, their flagship real estate investment trust is they’re having to put a cap on withdrawals. There’s so many people trying to withdraw money out of the commercial property investment funds that they’re in, that they’re that these bigger institutions are having to put a stop on withdrawals and limit withdrawals, and they’re not the only one doing that. There’s a big exodus there fearing what this inflationary environment mixed with the Federal Reserve is going to do. Also, fearing what the gigantic valuations in commercial properties that are here today, what that’s going to look like in the future. That’s a dangerous game to play.
The residential marketplace, Holly, is just as dangerous right now, where there’s a whole bunch of uncertainty there. There’s a whole bunch of uncertainty, are interest rate’s going to stay this high for this long? What does that mean for prices? What does that mean for buyers? All I’m saying is that you look all around and there’s a lot of uncertainty, but the one thing that seems to be quite certain and has been certain the whole time is that your cash values are going to go up next year for all of you who own infinite banking style policies. That’s been certain before the crap happened, that’ll been certain during the crap, and that’ll be certain after the crap.
And those of us who have practiced IBC, we actually as the anti-fragile mindset, we get excited for chaos because that means when everyone else is losing money and selling assets to survive and taking a bath on everything, that just leaves a lot of stuff for people like us to go in and dip in and buy. So we’re excited. I hope we have a recession. I don’t know if I really do. I hope that commercial prices fall, that residential prices fall, that the stock market continues to fall, that we have a true recession because I’m going to get rich. I’m going to go in and I’m going to buy a whole bunch of assets with my cash values and I’m excited for it.
Nate: So all that to say, Holly, this is what we see. I think in these types of moments, even the people who used to be critical of it or it just simply decided it wasn’t for them, they start revisiting this with more of an open mind because they realize, “Well, this thing could be pretty useful to me right now.”
Holly: Well, and I think Nate too, a lot of what you said like, “Hey, I put money in with this company. Oh, I can’t take my money out anymore,” or even, and I’m going to go back to FTX with the crypto, according to the contract, that was your money that they had and it couldn’t be taken out or used and it’s gone. People do not have their money. So I think the reality is we are looking and seeing it, “Oh, I put my money in,” doesn’t mean I’m going to be able to take it back out and use it or do anything with it.
Nate: Exactly right.
Holly: And that’s what I love about IBC because it is your money, it is your system and it’s closed. You can access and use it. Nobody’s going to tell you, “I’m sorry, you can’t take that out. It doesn’t belong to you.” If you have cash value in there, you can borrow it and use it and keep growing.
Nate: Yeah, it’s amazing. We’re always taught to lock up our money in some place in exchange for a possible higher return. That’s the name of the game. And we’ve talked about in previous episodes that have launched about the paradigm shift of IBC, that it requires a paradigm shift to really understand it. And most people bring the old paradigm of locking money up in some sort of investment in exchange for future profit, and that’s what they bring that with them into IBC, and they assume it’s going to be just like that, and it’s really not. That’s why it takes a bit of a movement.
So really, I wanted to bring up one more thing I guess before we close down. And it may be kind of tangential. It’s a tangent to what we were talking about today with the chaos. An article in the Wall Street Journal just today came out and it was titled the $42 Billion Question, Why Aren’t Americans Ditching Big Banks? So this article comes out in the Wall Street Journal, we’re going to shoot a podcast today and I’m thinking, we got to throw this in too to the mix.
Holly: We have to.
Nate: Come on. They’re just giving you a coach pitch shot at this. So essentially saying the $42 billion question, why aren’t Americans ditching big banks? And essentially what they are saying is happening, which is what we’ve been teaching everyone for a long time. And so it’s just interesting when just someone goes out and essentially says the same thing we’ve been saying this whole time, is that big banks, Bank of America, Wells Fargo, Chase, all these people, people are leaving deposits with them, and yet they’re really paying essentially no interest on these people’s deposits, especially the big banks. They researched it and they said, in theory, savers could have earned $42 billion more in interest in the third quarter of this year alone, just in the third quarter alone. If they moved their money out of the five largest US banks to the five highest yield savings accounts you can get at smaller places like online banks and different things.
So they were essentially saying, US consumers missed out on $42 billion of interest by sticking with the big banks. Really all they had to do was move to some smaller banks, take their savings accounts elsewhere, and they could have made $42 billion in total in the third quarter alone. I hope that anyone here who subscribes to the Wall Street Journal saw that article and revealed that they’re essentially just pitching IBC. So essentially, they’re saying, “Hey, go from one place, the worst place the big banks who don’t pay anything, move it to some smaller, more medium sized banks that offer higher yield savings accounts, and consumers would’ve made $42 billion more in the third quarter alone of this year.”
The next step though is why would you go to the small banks when you could just become your own bank and make all the money? It would easily be over $100 billion if everyone just started moving all their deposits into policy cash value. I know that’s oversimplified, but all I’m saying is, anytime I see an article essentially describing IBC from the Wall Street Journal to a T and trying to make an argument the same way we’re trying to make an argument, I got to bring it up at least that yeah, that’s IBC, and there’s no way around it.
Not only that, they said a little bit further on that since the start of 2019, so three years, almost four, Americans have lost out on almost $300 billion in interest just by doing business with the wrong banks. I hope that rings an IBC bell for everybody, that consumers have lost $300 billion in interest they could have earned if they just did business with a different bank. Man, guys, this is all we’re trying to say. All we’re trying to say at its core fundamental message is that there actually is even a step further, doing business without banks in a mutual life insurance company that you own, that operates like a bank, that allows you to participate in the profits of the entire company and earn way more than you can earn at a bank.
Suddenly, it’s not $300 billion of missed income for consumers. We’re talking probably more like 600 billion to a trillion dollars of interest in into the American consumers that they could have earned if they had just simply started banking the way IBC teaches. Take it one step further than this article. Don’t just say switch banks completely switch to your banking concept as a whole. So had to bring it up.
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Holly: Well, and Nate, one thing you didn’t bring up in all that. Yes, consumers would’ve made $42 billion if we’d moved it, right? You and I. That’s you and I. But we would’ve had to pay taxes on that interest we earned. But if you move it into your life insurance in a mutual company, it grows tax free. So guess what? You don’t get to have to pay Uncle Sam money on your money, the earned interest that they actually invested or made money off of. And really in reality, Nate, the higher yielding savings accounts, they can afford to pay a lot higher interest, but they’re keeping all that money for themselves. This way you get to use your money, it grows tax free. And like Nate said, it’s not 300 billion, 600 billion. We’re talking about a system that actually over time you could and people, if everybody did it, it would be in the trillion dollar range. It would easily go into that range.
Nate: Yeah, exactly right. And why would the big banks change what they’re doing when we refuse to change? In other words, the only reason the big banks would start offering actually competitive interest rates is if they saw people leaving in mass to go to these other banks. Now, there are some going to smaller banks to get higher interest savings accounts. I’m just me merely saying it’s not denting the big bank’s business enough to where they’re going to be competitive and nobody can compete against the infinite banking concept in the banking world. It can’t be done. And we don’t have time to go into all of that, so I’m not going to. I’m just merely saying it is pretty cool when the Wall Street Journal essentially poses a question that we’ve been talking about this whole time, which is essentially why is everyone doing banks in such a way that doesn’t profit them?
Maybe they should switch to do something else that does profit them. And we’re just saying yeah, maybe you should do it one step further and go fully become your own banker where you own the bank, you’re an owner of the bank itself, the insurance company per se, who’s operating like a bank, and you can just profit not only on the interest, but also on the dividends that are paid. And suddenly you’re looking great. So this is what we’ve been trying to say to everyone’s personal economy. It’s just interesting to see an article written that describes it on a cumulative scale as a nation, how much interest is being missed out just by banking at the wrong place? Can we get an amen out there, folks?
Holly: Amen.
Nate: Big banks are not working in your favor and you are missing out on a lot of money over a lifetime by keeping deposits with them. So just thought we’d bring it up.
Holly: I always say the worst thing you can do, and it’s not the worst thing, but it’s sarcastic in nature. The worst thing you can do is take that money in the savings account and put it in a life insurance policy. And I say that because so many of us have money just sitting in the bank doing nothing, and it’s actually the best thing you can do. It’s not the worst, it’s the best thing you can do is to put it into a life insurance policy because then you have compounding interest. You can use the money and it grows and you get death benefit. But it’s that concept of taking it, like we said, that paradigm shift. You literally have to change the way you’re thinking.
And until we as a society and as consumers stop just following the herd and doing what everybody else does, the big banks that we’re going to invest in this, we’re going to do that Until we change that mindset and take control of our money and stop sending it to everybody else, it’s going to continue to go out the door and you’re going to continue to live in the chaos unless you change something.
Nate: The article is pinpointing what I call the stage one IBC, by the way, which we just did a podcast a few weeks ago on the four stages of IBC commitment, and then I did a webinar to follow up with that. I think it’s one of the most powerful, useful perspectives in IBC that anyone has given in a long time. And I don’t say that about everything I do. I just say I think it’s really, really important. And if you haven’t listened to it or watched the webinar especially, you need to go back and do that, I promise you, you’ll be amazed at how simple you can actually see it as a perspective.
But essentially what the article is pointing out is that is what I call the objective stage of IBC, the stage one of IBC commitment, which is the saver stage. Essentially, that’s what they’re trying to say is just by switching where your deposits are, you can start making billions of dollars as consumers more than you otherwise would’ve. People talking here are probably not going to make billions, but it’s easily hundreds of thousands if not millions of dollars for the average person. I mean just the average middle class person over a lifetime, to just switch where you’re banking, which is what the article is trying to say. There’s a lot of money just being lost by people who leave deposits at banks. Just switch banks and you’ll make a lot more money. It’s objective. There’s no reason not to. Just do it and you’ll make more money. Why are you not?
So they try to investigate why. Why aren’t they ditching the big banks? And everyone’s just saying, “Well, I’ve just been banking here for a while. I’m just going to keep it going. I just like the convenience. All of my expenses are already auto debited from the account. I’m not going to move.” And they’ve seen all these little things like, okay, just take a put forth a little bit of effort, just a little bit. It’s kind of like opening a policy, put forth a little bit of effort, do a little bit of stuff, and suddenly you’ll make hundreds of thousands of dollars, if not more over your lifetime. That’s what we call the objective stage of IBC. They’re saying it’s pretty objective, just move banks and you’re going to make more money. We’re just saying, yeah, get out of the banks. Start using a policy and you’ll make more money. You even have to do anything. It’s just done.
Now, some people would probably argue, which I would say too, is that the saver stage of IBC might not really be much IBC at all. It’s just changing banks. That’s what it is, changing banks, just like the article says. We’re just moving it out of the other bank into this one. And so it may not be true IBC, I’m just saying that at least everybody should start there. And then if you want to progress to other stages, then great. But at least you should start there. Now, I would encourage people, don’t start there. Start at stage two, start at stage three, do real IBC. It’s really fun, but certainly everybody, no matter how concerned you are, should start at stage one. So anything else, Holly?
Holly: Get out of the chaos. Stop the chaos around you and unless you stop following the herd, you’re going to continue in the chaos and you’re going to continue with the uncertainty of what’s going on around you right now and the anxiety it creates. So you have control of your life. You have control of your destiny, and like Nate said, just move your money and see what happens and then see what the other stages. But if you hear nothing else, control your money and stop the chaos around you.
Nate: Yeah, I like to think of it now. The word I use to become anti-fragile. Add some anti-fragility to your overall financial life. You won’t regret it. I would hope that one day the listeners of this can feel what we feel can feel the insulation that IBC provides. The idea of this simple life that Nelson Nash was trying to convey, the simple life of infinite banking where everything is simplified, it starts to make sense. You’re under more control and decision-making becomes easier, less cloudy, concerns and anxieties fall by the wayside. IBC has a lot to offer in that way. Nelson Nash was trying to describe, can you think of a more simple life, just financing your own things, paying big premiums, having guaranteed growth dividends, tax free. It sounds great, everybody. Come on and drink some Kool-aid with us.
So I just wanted to share where I’m at right now, never being an IBCer through chaos and just describing, yeah, Nelson Nash I think was right. He was trying to tell me. I was like, “Yeah, I hear stories about it, but I’ve never lived it.” When you live it, you’re like, “Wow. Yeah, I feel really good right now.” I don’t know if everyone can say that, but I’m, I’m confident, happy solidified in where I’m at, and I love that feeling. So I thank IBC, I think Nelson Nash for that. So just as we recap, when the world starts to fall apart, the simple life of IBC starts to shine more and more. So this has been Dollars and Nonsense. If you follow the herd, you will be slaughtered.
Holly: For free transcripts and resources, please visit livingwealth.com/e166.
Announcer: Listeners, one last thing before you go. Start your journey towards financial security and wealth today. Visit livingwealth.com/beatinflation. You’ll gain instant free access to the beginner’s course Ray, Nate, and Holly made just for you. Again, that’s livingwealth.com/beatinflation.
