E225: How Do I Know if Infinite Banking is Right For Me?

Join Nate Scott in this episode as he tackles the burning question: Is infinite banking the right fit for you? He delves into the nuances of infinite banking, stressing that it’s not a one-size-fits-all solution. And encourages listeners to explore their financial paths, whether it’s the traditional retirement route or the more hands-on, entrepreneurial approach. 

Nate also highlights the flexibility of infinite banking, reassuring people that they don’t have to go all-in to reap its benefits. By the end, you’ll have a clearer understanding of where you stand on the financial spectrum and whether infinite banking aligns with your goals.

Key Takeaways:

  • Personal Fit: Infinite banking isn’t for everyone; it’s essential to assess if it matches your financial goals and preferences.Financial Path: Consider your financial path carefully—whether you’re inclined towards conventional retirement or a more active investment approach.
  • Flexibility Factor: You don’t need to fully commit to infinite banking; it can complement your existing financial strategy as a secure, liquid savings option.
  • Spectrum Insight: Learn about the spectrum of compelled individuals, from those embracing entrepreneurship to those favoring passive retirement planning.
  • Self-Assessment: Understanding your position on the spectrum and your comfort level with financial involvement can guide your decision on whether infinite banking is right for you.

Episode Resources:

Gain FREE access to our Infinite Banking Course here 

What is Infinite Banking

Who was Nelson Nash?




Nate Scott [00:06]:

For some people, infinite banking doesn’t add much value to their life at all. But for others, infinite banking completely transforms their life. So in this episode, I want to discuss the most fundamental question that anyone investigating IBC should ask themselves. Is infinite banking right for me, or is it something I should avoid altogether? Let’s go ahead and dive in. I’m Nate, I make sense out of money. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered.

Nate Scott [00:35]:

Is infinite banking right for me? The most fundamental question that exists in any financial strategy. You hear about it, you have some concerns, you have some questions, and all of them are really just to determine, is it right for me? And I don’t believe that there’s any financial strategy that’s right for everybody in general. I think that certain people should do certain things, and other people should do other things, because there’s nothing objective in the financial world. 

There’s just one strategy that is better than every other strategy for every other person at all times. That, of course, doesn’t work. So we are all choosing from different opportunities that are available to us in ways that we think are going to benefit our life based on the future we want. And infinite banking is one of those, which I don’t really believe is for everyone. And in fact, I don’t really want people to do it if it’s not right for them.

Nate Scott [01:23]:

And I think everybody can say that, and every advisor like myself, can give lip service to that fact. But the truth is, I don’t want people to do infinite banking if it’s not right for them. Which is why I am not the most salesy, markety evangelist around. Because I don’t want to attract people and make infinite banking sound so good that they want to do it. 

And then they realize they don’t like it. They realize it wasn’t for them, they realize that it doesn’t make any sense or whatever it is. That’s honestly why people can talk about infinite banking, be a scam or something like that. It’s mainly because it was somebody who really shouldn’t have gotten involved.

Nate Scott [01:54]:

Got involved because some agent sold them on getting involved, because they thought it was some sort of spectacular thing, that they were misunderstood. In fact, I’m even to the point where I don’t even like to push or evangelize the IBC world to the people that are around me. And like my friend circles and school, parents of my kids and church and friends. I mean, some of them are working with me, of course I’m happy about that. 

But I’m saying I don’t try to push it on them or try to promote it to the world because I don’t want to get people involved just because Nate said something about it. I want them to be compelled for the right reasons and to get involved for the right reasons, which is why I do this podcast. And really, we funnel everything through the podcast and the beginners course on our website about the infinite banking course that we have. That’s free, by the way.

Nate Scott [02:44]:

All of these tools are meant to push away. Like, if you learn about this and you’re compelled by it, then it’s probably going to be a good fit. If you’re not compelled by it, it’s probably going to be a bad fit. And so you don’t want people to get started who are not ready to get going or for whom it doesn’t make sense to get started. So I actually want to dive into that, by the way. I think that it’s actually fairly easy to figure out if it’s something you should do, and it’s fairly easy to figure out if you should avoid it. It shouldn’t even be that complicated.

Nate Scott [03:11]:

So I’ve actually got three things written down on my notes right here that I wanted to kind of discuss on these three areas that if you understand these three, you’ll know for yourself. But by the way, if you came into infinite banking and you stumbled upon this and you kind of thought it was a scam, I’m just telling you it’s not a scam. Stop thinking that. It might not be right for you, which hopefully at the end of this episode, you’ll understand why, but it certainly can be right for somebody else. 

So, just stop with this ridiculous thing that infinite banking is a scam like that. Just get that. Anyone who’s ever said that you’re deceived, you should stop thinking that. It might not be right for you. So if some agent is trying to compel you and convince you and contort you into doing it when you really shouldn’t be, yeah, it’s going to feel scammy. But for the rest of us, for me and for a lot of my clients who are doing it and having a lot of fun, it’s not a scam.

Nate Scott [04:03]:

It’s very valuable. So the first thing that you need to ask yourself, or really confront in yourself, is something that I call the choose your path methodology. You have to choose your path, and I’ve said this before on the show many times, that to understand if infinite banking is right for you, you have to determine what path you want to go down overall financially. And I believe there’s kind of two main paths that are before us in a lot of ways. 

There is your typical retirement path that involves primarily, like, mutual funds, brokerage accounts, IRAs, 401(k)s, and all of that. That’s kind of your conventional path. And then there’s this other path that many wealthy people choose to go down, which doesn’t really involve much of those retirement programs and mutual funds, brokerage accounts, things like that. That involves more building businesses, being actively involved in investments, doing alternative investments, buying real estate.

Nate Scott [04:56]:

There’s so many things that exist that are outside the typical pathway. And so what I’m trying to bring up on this is that for somebody who is not that excited about the typical path by nature. So if you find yourselves in a shoe where you’re like, man, in a situation where I don’t really like the typical path, I don’t really like being in the stock market. I’m just doing it because that’s all I know. That’s what the world kind of pushes us into this. 

You get a job, your first job, they automatically enroll you in the 401(k) and you start putting money in. And once again, if you’re in a situation where you don’t even like those, you would want to do a different pathway to building wealth for the future, but you don’t really know of another way. Infinite banking oftentimes shows up in your life and is like the “aha” moment.

Nate Scott [05:51]:

Most of my clients would say amen to this, that it’s like an “aha” moment. Like, oh, there is another way. Infinite banking can often be the off ramp from the conventional retirement pathways that are not exciting to everybody and onto a pathway of more entrepreneurial focus, actively involved with money, more control over your money.

It starts to present this new way of building wealth where maybe instead of investing money in the stock market, you start to use your system to build or to make loans to your kids and to your friends, and to build businesses and to invest in real estate. And that pathway may be more enticing. 

So, the first thing I wanted to mention, the choose your path methodology is that if you are somebody and you’re trying to figure out if infinite banking is right for you, and the typical retirement pathway is not compelling to you, then infinite banking is oftentimes like, almost 90% of the time is a good choice to start going down this pathway because it can lead, it can be what we call the gateway drug to financial freedom. It’s like the first step in removing yourself from the conventional path and starting to forge a different path, one that has a lot more involvement with your money.

Nate Scott [07:02]:

Oftentimes, however, if you are somebody who actually does like and believes that it’s very good to be involved in retirement programs, then at that moment in time, you would say, I actually like the retirement program path. I listened to Dave Ramsay and he says, put all your money in these 12% growth mutual funds, and it’s the best thing you can do. And to get a financial advisor and stuff all your money in 401(k)s and IRAs and max those out, and I actually believe in those things. That’s the path I want to go down. 

Then we would say, by design, infinite banking will be less compelling to you, and it may not even be right for you at all. In other words, you can do the conventional pathway and get conventional results and be perfectly happy. But for those that are already disenchanted by that path, infinite banking produces an awesome off ramp to different ways of building wealth that would not be involving that other pathway. So this is the first point, by the way, that if you are on the typical retirement path, it might not be something for you.

Nate Scott [08:04]:

If you’re on the non retirement program pathway, that’s what you want to build your life around. It would say it’s actually a very high likelihood. It’s for you. But then we keep on going down. So I’m going to go to number two now, and for either one, this works. If you answered, by the way, that, yeah, I don’t really like the retirement pathway, I’m looking for something else. You could probably stop there and say, infinite bank is probably going to be a good idea. An entrepreneur, and we’re going to talk about this later.

Nate Scott [08:25]:

An active investor, entrepreneur, small business owner, things like that. It’s probably a good thing for you to get involved in. It just really is. If you are not any of those things and you’re not sure you want to go down those types of pathways, then we have to continue to go down the spectrum. So if you are okay with the retirement program path, what next? Should I just not do it at all? 

And so the next point I want to make is, point number two is you don’t have to go all in with infinite banking. You don’t have to go all in. In fact, I did the four stages of IBC commitment webinar that’s really taking off very, very well. It’s very well received.

Nate Scott [09:02]:

You can get it on our YouTube page. The four stages of IBC commitment webinar that really describes you don’t have to be stage four. You don’t have to even be stage three. There’s different ways to commit to infinite banking that may be beneficial. So here’s what I’m trying to say, let’s say you are someone who likes the typical retirement path, but maybe you don’t want all of your money to be built into the stock market. You don’t stuff all of your money into retirement programs. There’s some money that’s going to be left over that you still want to do something with beyond that.

Nate Scott [09:32]:

We would say infinite banking can oftentimes plug those gaps. It does a really good job doing that, by the way. So the idea would be someone who actually likes retirement programs, mutual funds, brokerage accounts, things like that. You would find these people would oftentimes operate inside of the infinite banking world in what we would call more of like a stage one or stage two individual, where you do actually have a lot of your cash flow and investable money going into the conventional things that you already like. 

And infinite banking just plays a smaller piece in your life. And that’s okay. In the webinar that I talk about, the different scales you can do it at, it is true that in most people’s mind, real IBC happens in like stage three and four, where you’re putting a lot of money in and you’re using money often. That’s like what we have in our mind is a typical infinite banking strategy.

Nate Scott [10:20]:

I’m going to put a lot of money into policies, and I’m going to use them to do a lot of things. And so that’s what we have in our mind. But there are more lower end spectrums where stages, really, that you would not be putting in a lot of your money, nor would you be using your money all that often. And these are kind of the stage one, stage two environments. 

So, the idea would be this. Yeah, Nate, I actually kind of like the retirement path. I am just looking to save money in places I’m not really that active. I don’t really have an entrepreneurial bone in my body.

Nate Scott [10:49]:

I don’t really want to be too involved with money. But I do like the way this sounds. But I kind of like taking a little bit of extra risk, per se. I’m hoping that the stock market does really well. I want to be involved in mutual funds. We’d say, great, that means you should continue to fund those. 

Who am I to say that my way is better than your way? If you are content doing those things and receiving the returns and you’re okay with the ups and downs of the market and you’ve thought it all through and you’re like, yeah, I think it’s still a really great idea and I’m very compelled to continue doing it. Then we’d say, go ahead and do it.

Nate Scott [11:23]:

Don’t think that we are trying to force you to stop. Like, you have to make a dichotomy choice. Like it’s a black and white thing where you either I only either do infinite banking or I do the typical financial instruments. It’s not that black and white. Just go ahead and fund your IRA. Just go ahead and fund your 401(k). Go ahead and put money into the stock market. That’s perfectly fine.

Nate Scott [11:44]:

But if there’s money that’s not going to, you may not want all of your money in these types of volatile places. In fact, I would say it’s actually wise to not have your money in all these volatile places. And so you could say, I’m going to put some money, I’m going to save money into policies, and I may use them at some point, but I’m not going to completely remove myself from the pathway. I’m not using IBC as an off ramp to a totally different wealth building platform. 

Like actively entrepreneurially being involved with money. 

I’m going to stay on the other pathway, and that’s perfectly fine. So if your first step is Nate, I like the entrepreneurial path, the active investor path, getting my hands on the money path, we’d say impotent bank’s probably right for you. But if you say that’s not really because I like the retirement passive approach, it still might be available to you, but it’s unlikely that you should operate at high stages. That’s the idea. 

Nate Scott [12:29]:

So, if you like the retirement pathway already, you don’t have to go all in. That’s point number two, right? You don’t have to go all in. You can open a policy that kind of fills the gaps. Because I still believe for almost anybody that for safe growing liquid money, I really don’t believe, and I think it’s essentially objective. I think you’d be kicking against the goads to use a biblical phrase, to try to make an argument that says there’s some other way for liquid safe money to be built up. 

That’s better than doing what we’re doing right now inside the world of infinite banking, I really do believe that properly structured, high cash value, dividend paying whole life policies produces the best place to store liquid safe growing capital, especially because it’s in a tax free environment, I think it would be very hard to argue against that. So what I’m trying to say is it can fill the gaps.

Nate Scott [13:24]:

It can be your liquid safe reservoir, your emergency fund, your liquid savings, your kind of diversified savings, and it’s okay to be that. But just know that if you choose the IBC to do that, then stop talking about all the stage three and stage four stuff, like don’t go into it thinking that you’re going to be using policies all the time. 

Don’t go into it thinking that there’s going to be tons of policy loans and that there’s something magical about using policies, because there’s really not, just be okay with, I’m going to put some money in, but I got a lot of money going doing other things that’s not involving policies. 

I’m going to put some money in and it’s going to be kind of my safe reserves, and I might pull from it every now and then, maybe to go buy something larger, to do a house remodel, maybe to make an investment here and there. But really, I’m pretty content just kind of saving money into it, and that’s perfectly fine. So just know you don’t have to go all in. 

So, if you said all that, we’re going down, and so now you understand you don’t have to go all in. The very last thing I wanted to say about this, whether infinite banking is for you, is just understand this, and I’ve mentioned this before, that people are compelled to do infinite banking on a spectrum.

Nate Scott [14:33]:

A spectrum exists to determine how compelled you likely are to hear the message of IBC, which is kind of what I said the very beginning when I said, stop calling IBC a scam. It’s ridiculous. It’s kind of foolish, actually, to call IBC a scam. It may not be right for you, but to say that you’re in the same financial position as somebody else, that’s completely different than you. It’s ridiculous. 

People use different tools to do different things. So I’ve always said there’s kind of a spectrum. On one end of the spectrum, there lives the people who don’t like locking their money up, who don’t like to be passive with money, and who really love to be in control and have their hands on their money and build wealth in kind of unique, more entrepreneurial ways.

Nate Scott [15:19]:

And I’ve talked about this many times. So that’s why you see on one end of the spectrum are all these people that what I call the entrepreneurs, the small business owners and the active investors, they’re the ones who live on the far, let’s say, right side of the spectrum, where they will hear the message of infinite banking and realize that it solves a problem. 

Like the fact that they can pour their money into policies and then leverage those policies to go do things and then have profit pay back the policies and then go reuse them again, all the while earning this tax free growth. They say, that is for me. I didn’t even want to be involved in the 401(k) and IRA world. I don’t even have any money there to begin with. That’s not the route I wanted to go down financially. They’re already on a different route.

Nate Scott [16:05]:

And so the policies fit like a glove. Infinity making fits like a glove for that. People on the other end of the spectrum are the people who hate those guys who think it’s ridiculous to put money into actively involved things. They want to be extremely passive. Oftentimes, they really like long term appreciation based investments, not really focused on cash flow. 

Those are just the people who love and strongly believe that the best place for money is oftentimes retirement programs and brokerage accounts and mutual funds. And so they have 100% of their money going into these passive appreciation based, stock market based investments. Those would be on the other end of the spectrum.

Nate Scott [16:50]:

They just want to let money sit, and they don’t really want to touch it, and they don’t want to get involved with it very much. They’re not really focused on cash flow. It’s more of the typical retirement planning style situation. 

Those people may hear the message and really what it boils down to, if they have all of their money in these other types of programs, and that’s what they really want, then they would just say, well, why would I do this policy thing if all I’m going to do is put money in this policy or I’m going to put money into an IRA? Why would I put money into a policy? Maybe the policy grows by 4%, but I’m in Dave Ramsay’s magical 12% mutual funds. 

It’s just a rate of return question. And they say, why would I do that? Because they don’t actually want to put the money to work to begin with. It’s just going to be a safe place to store some money. So the further you go to the left side of the spectrum, the side of the spectrum that’s not really entrepreneurial, you’ll hear the message, and you’ll think that what we’re trying to convince everybody to do is that policies produce better rates of return than stock market, or they’ll think that’s what we’re teaching people and we’re saying, no, that’s not even what we’re saying.

Nate Scott [17:55]:

By the way, the stock market returns, I mean, who knows what it’s going to do? But that’s kind of beside the point. We’re not trying to make that argument. We’re trying to say that policies produce this very unique thing where you can put money into the policy and leverage it to go do other things. And it’s very unique in the financial world, and it fits certain people like a glove, while other people are like, what’s the big deal? They try to double– Is it just the rate of return of the policy? Like, what do I do better? Just setting money in my retirement programs? 

So, we would say those people probably shouldn’t even do it. Just keep doing what you’re doing. The only reason you would maybe even entertain doing IBC is if you just wanted, as I said, a place to store some safe money. But if you’re a big believer in the stock market, mutual funds, retirement programs like you’re Dave Ramsey through and through, I’m going to stuff all my money in mutual funds.

Nate Scott [18:43]:

It’s the best growth stock mutual fund with a nice fee based planner that’s charging me 1% a year to do it, and I’m going to make a ton of money. I’m going to get rich just letting my money sit in the stock market. And that’s all I want to do. Don’t come over to our side of the woods. It will not be great for you. Just don’t even worry about it’s not for you. It might even be bad for you, for all we know. So what I’m trying to say is there is a spectrum that exists and understand that, understand where you are on the spectrum.

Nate Scott [19:13]:

Maybe you’re not going to go crazy with money, but you’re somewhere in the middle where you essentially say, in the middle. Yeah, I look at the active people and I kind of want to be involved with some of those things, but I’m not going to go crazy with it. I’m going to get involved with a few things here and there, and I don’t really love being in the stock market very much. 

I mean, I’ll put some money there, but really, the policies are a great fit for me here in the middle because they kind of give me the best of both worlds. So all I’m saying is the further you go to let’s say the right side, the entrepreneurial, active investor, small business owner. Just get my hands on my money all the time, wheeling and dealing, those people will hear infinite banking. They’ll say, that sounds awesome because it fits me like a glove.

Nate Scott [19:52]:

You go to the far left side of the spectrum of people who really just want to set money aside, let it sit there, and are hoping to get a passive decent rate of return. Who cares? If you love what you’re doing already, don’t come over here. For the people in the middle, yeah, you might not be like a stage three, stage four IBC guy. You might be stage one to stage two, but you’re happy to be involved. And so just understand this. The three things I wanted to bring up on. How to answer the question if infinite banking is right for you. Number one, you have to choose your path.

Nate Scott [20:18]:

If you’re happy with the retirement path, infinite banking might not be right for you. If you’re looking for some kind of alternative ways to build wealth and you want to get more involved and kind of have an off ramp for financial and wealth building from the conventional tools, then infinite banking is likely right for you. And you can just stop there and be like, yep, I understand what Nate’s saying. I think that’s right. 

If you like the retirement path, you’d say you have to go down to number two and say, okay, well, I understand that. I don’t have to go all in, so it doesn’t have to be a black and white thing. I don’t have to go all IBC or no IBC. I can do some IBC, I can do a lower stage, and I can still take part in some of these things.

Nate Scott [20:53]:

I’m already pretty happy with the retirement style pathway. I can fund my 401(k). I don’t have to stop. I can fund IRAs, I don’t have to stop. I can continue to put money in broker hands. I don’t have to stop. And I’ll let IBC fill in the gap. That’s perfectly acceptable.

Nate Scott [21:05]:

We have plenty of people doing that. Just understand, though, when you do that, you’re probably not going to be wheeling and dealing with policy loans all the time. Just understand the natural effect of that. You just don’t have very much money compared to your overall financial picture going into policies. And lastly, fully understand that there is a spectrum of people that are being compelled. This is kind of the summation of everything. 

There’s a spectrum of people that exist in the world depending on how much control and activity they want with their own hands on the money compared to people who are just totally passive and actually really enjoying even locking money up, like putting money in tax deferred retirement programs that they can’t touch and they know they can’t touch it and they’re perfectly content doing that. We would say you would be less compelled if you like that.

Nate Scott [21:45]:

And where IBC may not fit like a glove, if you already know you’re not going on the other path and changing paths completely. So just understand that people can be compelled. So only the people who love the retirement program way of life, they’re the ones who call out on YouTube and everywhere else, infinite banking is a scam in which we’re saying, yeah, it probably would be. 

If someone convinced you to do infinite banking and you were on that far left side and you believe there’s some sort of magic sauce about it, and they made it sound spectacular and they made it sound too good to be true and you got involved with it. Yeah, it would be a scam. 

Scams are essentially whenever your expectations are not met. The reality is, though, it may just be you shouldn’t have done it at all because you’re on one end of the spectrum that really is not that interested in having liquid capital to be able to go use with no risk, like to you, you just want to put your money in the stock market, you don’t care about the volatility, and you’re hoping to get a good return in the stocks, and that’s fine. So just understand that there is a spectrum. So if you go through all of this, I’m hoping to say that some people are going to hear this and be like, yeah, I like the retirement path.

Nate Scott [22:45]:

I understand I don’t have to go all in, but really, I’m kind of all in on the retirement path. I’m on that bottom end or the far left side of the spectrum. So I shouldn’t get involved. And we’d say, no, you shouldn’t, and be happy with that. 

But if you’re anywhere else on the spectrum, infinite banking becomes more and more and more and more compelling depending on how far to the right you want to go financially speaking. So this is the best way and the most complete discussion I could think of to determine if infinite banking is right for you. I hope it’s been beneficial to you. I would love to have you on next week for our next episode as well.

Nate Scott [23:16]:

But that’s it for this week. This has been Dollars and Nonsense. If you follow the herd, you will be slaughtered. Also, please remember we do have what I believe one of the best infinite banking courses available in the marketplace at livingwealth.com/escapethebank. It’s completely free. Just go to livingwealth.com/escapthebank and you can sign up for free to really understand infinite banking at a high level.

Nate Scott [23:40]:

Thank you again. See you next week. Bye.