E148: The Big Differences – Owning a life insurance policy vs being your own banker

In this episode, we discussed the difference between owning a life insurance policy and being your own banker.

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Topics Discussed:

  • Why merely buying a policy alone is not practicing Infinite Banking
  • How nearly everyone is already in banking — even if they don’t know it yet
  • Why understanding which business you are really in is so important
  • Why Nelson Nash said everyone is in two businesses
  • Thinking strategically in addition to tactically about wealth building
  • How being your own banker impacts real estate investing
  • Using IBC for investment diversification

Episode Resources:

Podcast transcript for episode 148: Owning a life insurance policy vs being your own banker

Nate: In this episode, we discussed the difference between owning a life insurance policy and being in the banking business through the becoming your own banker strategy. She’s Holly and she helps people find financial freedom.

Holly: He is Nate. He makes sense out of money. This is Dollars and Nonsense, if you follow the herd, you will be slaughtered.

Nate: All right, we’ve got kind of an exciting one, I think. Or at least I hope one that will bring some clarity to how to really operate in the Infinite Banking world. So for those of you who have been a podcast listener for quite some time, I think you’ll really love this. For those of you who are brand new, I guess it’s just time to buckle up and get ready for a ride. Because we’re going to talk about the Infinite Banking Concept or the becoming your own banker strategy with some detailed nuance, I guess you could say. That has come to light recently from meeting with clients for certainly my own life and in Holly’s life.

And so the theme of the entire show today is going to be the difference between owning a policy and being in the banking business. There’s a big difference and I think some people don’t understand it, Holly. In other words, they think that because they buy a policy, they are doing Infinite Banking. Just because you own a life insurance policy that was designed to help you implement the Infinite Banking Concept or the becoming your own banker process. That does not actually mean that you are practicing Infinite Banking. Because the entire concept is based on this idea that using these policies in a certain way, and building your lifestyle around them in a certain way, allows you to enter the banking business in a way that none of us really thought possible.

That’s going to be the theme, Holly, the difference between owning a policy and being in the banking business. And maybe Holly will start with this, that this is not an unusual thing that we’re going to describe. Because I think most of us would agree if we look at other types of financial things that we could put money into and so forth. There’s a big difference between investing in real estate on the side, as just like a little thing you do as part of your diversification strategy. You own a little bit of real estate, maybe a buddy of yours said, “Hey, you want to go flip the house together?” And so you said, “Sure, I’ll put some money in.”

There’s a difference between investing occasionally a little bit, dibble dabbling in real estate. And actually being in real estate or being a real estate investor. There’s a difference between being a real estate investor, being in real estate. Versus just owning some real estate. Just because you own a home does not mean you are a real estate investor or in real estate. I hope people can see the nuance here. And the same thing occurs, whether it’s in crypto. I own a little bit of crypto. I am not in crypto. I am not a crypto investor, that’s not who I am. I just happen to own a little bit. There’s a big-

Holly: I agree, Nate. When I have somebody ask, “Are you in crypto?” And I’m the same. I have some money in crypto, I do not consider myself in crypto. Do I know the ins and outs and nuances? Whether it rises, falls? No, not at all. Not remotely. I can’t give you any advice. Because I just did this kind of first because I will be honest, because I have a client that’s really big into crypto. So I did a little bit. But other than that, that’s all I did. I’ve never touched it, never looked at it.

Nate: Yeah, you own a little bit of crypto and you’re not actually in crypto.

Holly: Yeah. I’m not in crypto. Am I in banking? Yes. Am I in crypto? No.

Nate: Yeah, that’s exactly right. And so the same methodology needs to be understood that we … the Infinite Banking community, which we are in, is not out there trying to describe to you the benefits of a whole life insurance policy. We’re trying to present to you the opportunity to get into the banking business. So it is actually a bit of a different discussion. Whenever you commit to living out the Infinite Banking Concept, you’re essentially saying, “I’m getting into the business.” You can invest a little bit in real estate for fun, or you can say, “I’m going to make real estate the pillar of my future.”

The phrase that we came up with, Holly, before the show is that typically what separates someone from owning a policy to actually being in the banking business is whether or not they are actively trying to make their banking business more profitable. And I think that definition works for anything. The same definition works for real estate investing. What separates someone who wants to get into real estate and actually be in real estate and become a real estate investor. Versus someone who just owns a bit of real estate because they think it might be a good investment. There’s a big difference between those two people. And the difference is one of them is actively trying to make the real estate investments in business more profitable. The other one is just treating it as a place to store up some money. And there’s a huge difference in the end results. I think we would all agree there’s a huge difference in the end results.

The same thing goes with crypto. There’s a difference between putting a little money in crypto, seeing where it goes. And those who are actively in crypto, they’re crypto investors. Those are the ones who are actively trying to implement strategies, to make their crypto investments more profitable. I am just not one of those people and I am quick to admit that. I guess where we would draw the line though, Holly, and this is the truth. Everyone is already in the banking business. Everyone is already doing banking.

Not everybody is investing in real estate or has any sort of real estate holding or committing to get into real estate. Not everyone owns crypto, by default. Not everyone invests in currencies, by default, necessarily. But everyone is in the banking business by default because banking is not an investment choice. Banking exists in the modern economy and has existed for thousands of years. And it is just based on the flow of money, money transferring from one place to another. It has to exist, there has to be somebody performing the banking function in everyone’s life, all the time, every day. By being a human being, you are in banking.

So the question is, do you want to try to make more money since you’re in the banking business already? That sounds too simple, but it’s just the truth. That’s the whole point of this becoming your own banker concept. Is essentially saying, “Hey, we’re already doing banking. Money is moving around in our life for all sorts of things. The question is, do you want to try to make more money doing that? Since you’re already in the banking business.”

So we’re not actually trying to convince somebody that real estate’s better than stocks. In other words, if I was a real estate guy, this was a real estate show, then I would be trying to convince people to get into the real estate business and hire me as their coach. Buy my stuff so I can teach you how to be a better real estate investor. And we’re not actually trying to convince somebody to do something that they’re not doing that they should be doing, per se. We’re just saying, “Hey, there is a better way to do what you’re going to have to do anyway.” Which I think is a very interesting way to look at it.

Holly: Nelson even mentioned in his book, you should always be in two businesses. Or you should view yourself really as being in two businesses, but most of us don’t. One is what you love, you’re passionate about. But everybody is, like you said, involved in banking. But are you making it profitable? And are you treating it like a business? Because if you’re not, all you’re doing is giving your money away to somebody else to handle and control.

Nate: Somebody will make money on the fact that you are in banking. There’s no way around it. Before you were taught about the becoming your own bank concept and how to do this. Most people did not want any money in bank accounts or at least they wanted as little as possible. And I don’t blame them, that’s because banking is a horrible way to try to grow wealth. It’s going to exist in your life until the day you die.

So it’s an another interesting point that people don’t fully understand, is that they start learning about this Infinite Banking Concept and they treat it like an investment concept. This is not an investment concept. You don’t have to be in real estate until the day you die. You don’t have to be in crypto to the day you die. You don’t have to be in the stock market until the day. You don’t have to do any of those things until the day you die. But there is no way around the fact that you are going to be in banking until the day you die. All Infinite Banking is trying to solve is say, “How can we make more money since you’re in the business already?”

When a client meets with me, I really do hope that they’re meeting with me to discuss strategies to make their banking business more profitable. Because that’s my role to you. So if you’re a client listening, that’s my role to you. That’s the whole point. But I do find that it can be difficult to meet with people who think they’re in the banking business and think they want their business to be more profitable. They just essentially want me to offer them like a little tip or trick. A little move, a “Hey, should I take a policy loan to do this? Will that make me?” No, this is a banking business, there has to be strategies in place if you want it to be more profitable than the current trajectory that you’re on.

But it’s the same discussion that a guy who’s in real estate would be having with himself. The same discussion is, “What’s the next opportunity for me to put more money to work, to make more money doing what I’m doing?” That needs to be the mindset if you want to be really great at the banking business. You’re going to be in it anyway, so you might as well become more profitable in it.

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You’ll receive instant access to what we call the beginner’s course. This in depth and easy to follow course teaches people how to create and profit from Infinite Banking. You can become debt free, in control and achieve financial security and significance. Stop letting the banks and Wall Street dictate your financial future. Go to livingwealth.com/beatinflation today to instantly receive free, no obligation access to this priceless course on Infinite Banking. Again, that’s livingwealth.com/beatinflation. Now back to Nate and Holly.

Holly: We have clients, everybody has clients or individuals that they believe they bought this policy. That’s all they did, they bought the policy. Yet, they think they’re in the banking business. All they did was buy a policy and put their wealth or store it somewhere else. But all they’re doing is storing their wealth somewhere else. They’re still not utilizing that wealth and that money to actually make that business profitable, that banking business profitable. And those are the ones that it’s really hard sometimes for them to understand the fact of all they did was change their bank and we’ve said this before. But the difference between a life insurance company and a bank is the name on the building. And who’s the owners? Is it shareholders like stock? Or is it, are you a shareholder because you own a policy? But you can be a shareholder by owning a policy and literally do nothing with it and it’s never profitable. And then they don’t understand why they’re not making money per se.

Nate: I think one of the biggest things that keeps people from really committing to the banking business the right way is oftentimes their confidence level in the strategy just remains low. You’d be surprised how many people are owning policies, but they’re just dabbling in them. But yet they think that it’s them in the banking. No, you have just diversified into a safe liquid asset. That’s fine. I’m just saying that’s not actually Infinite Banking or that’s not the concept we’re trying to teach. We’re not promoting the value of a whole life insurance policy compared to the value of other types of assets. We’re just simply saying that policies can be used to perform the banking function in your life in a more profitable way.

So what we really would discuss is more like the scale you want to implement this. I’m just surprised how many clients I’ll speak to that are still sitting on hundreds of thousands of dollars in cash in a bank. I get surprised by it. Holly, I’ll talk to clients who’ve been clients for a few years now and they’re sitting on two or $300,000 in cash or more. I mean it is all relative. A guy who has 40,000 or 50,000 in cash versus a guy who has a million in cash. I mean, that’s just relative based on their income and overall position financially. But I’m just simply saying that relative to their overall financial wellbeing, they are still so devoted to the old idea of banking, which does not make them any money. And they know how they could start making money by transitioning as much as possible into their own bank, i.e, policies. But yet they won’t do it because there’s typically is some sort of mental hindrance.

It happens all the time. So I mean, just every day I probably talk to a client who’s kind of stuck in that boat. So there’s some who are just killing it, Holly, and you just love to see that. Where they’re making just tons of money in the banking business and they’re using it all the time to invest in other things or to finance the various things in life. And a lot of money’s flowing in and out. They got big premiums and big funding going on and constantly leveraging it out and doing some things. They’re creating passive income from the future, both on what they invest in and also based on the growth of the cash values working simultaneously. And it’s just a beautiful picture. And then you have others who can’t seem to get over the hump.

And so I don’t know if this podcast is going to help anyone in that boat. But I would just say, “Hey, we know the answer.” We actually know now how to make more money in the banking business. There really is no reason to keep patting the profits of somebody else’s bank. When we know now, if you’re a listener to this podcast, you know now that there is a way out of that. You can get started at any scale you want to, but at some point you have to get to a mental place and emotional place, which says, “I actually just wanted to start making more money in my banking business. I want it to be more profitable and I’m tired of leaving money on the table that’s patting the profits of somebody else’s bank.”

Holly: I think on that same end, you have to start thinking like a banker. But you have to start treating it like a business. And there’s a lot of you out there, you have the product. You actually have the start of the bank. Now it’s the point of you got to put it into motion, you got to utilize that in order to make it profitable. Nobody wants a business that isn’t profitable. And if you’re not doing anything with it, then hopefully this motivates you to say, “What can I do? What are my options? Please talk to me, Nate, Holly, tell me how I can actually try and make this profitable.” I mean, I love talking to clients who are the profitable side, Nate, because you get to hear what they’re doing with it and it gives you new ideas. And you’re like, “Oh, I never thought about that.”

Nate: I mean, everybody’s going to be profitable whenever they open a policy, obviously. But what we’re saying is, they’re actively trying to increase the profitability consistently. I hope people fully understand that what we’re just saying is the same for almost anybody getting into anything. That there’s a big difference between those who actively try to make their real estate investments more profitable and have committed to being in real estate and those who just own some real estate. That’s what I was trying to bring up to that there’s a bit of a caveat to be made there. That the truth is everybody’s already in banking. Not everyone needs to be in real estate, not everyone needs to be in the market, not everyone needs to be in crypto and all the other things, oil and gas and commodities and so forth.

You don’t have to be in those things, but you have to be in the banking already. You have to, we’re all in it. And so you might as well just try to make more money since you’re in the business already. And then especially those of you who have policies and have already said, “Yeah, this is something I like.” I do think it’s time to sit down with somebody, maybe it’s myself or Holly, and lay out your true, honest feelings and your inhibitions. So what I’m trying to say is that there typically there is a way to expand the banking business and become more profitable up until a certain point when you really are at the sweet spot.

And everybody should be trying to get to their own sweet spot, but oftentimes the reason why people don’t default and just start at the sweet spot is because of some various inhibitions or questions or concerns. And the only way to figure out what the sweet spot would really look like for any sort of individual would be to actually sit down and talk with a coach. In the same way that if you’re trying to become a better investor in real estate, oftentimes you meet with other people in the real estate world to learn from them so that you can become a successful real estate investor or a crypto investor or a commodities investor. The same type of thing happens.

So, if you’re going to get in the banking business, which you kind of said you wanted to do when you started a policy. You might as well just figure out how to make it as profitable as possible and get to the sweet spot. Otherwise, you’re not actually in the banking business. All you have done is owned a life insurance policy on the side, and it’s going to produce some value to you. I say, it’s fine, it’s going to produce some value, but I keep going back to the fact that, well, you actually are already in the banking business. Like you might as well just do it.

If the world becomes no money and we just have the new cryptocurrency creations and you know, all Fiat currency goes by the wayside. And the US dollar goes kaputt, then the default banking scenario is going to be through crypto. And all I’m saying is … then I probably want to be good at that because I’m going to be in it till the day I die in some sort of banking fashion. So right now, the way we currently set up, IBC is the only way I know of to actively create a more profitable banking business for me. And so if I’m going to be in it, that really is the discussions that I would have with people. Is looking at their life and trying to figure out how can we get more money flowing through their own banking system, through the policies. And less money flowing in and out of just conventional bank accounts that don’t make them money. And once we get to the sweet spot, everyone’s happy.

Holly: I feel like you enjoy life a little more. You actually feel like you have more control over what’s taking place in your life. And especially in regards to money versus somebody else that’s been controlling it for most of your life. Because you’ve been in banking, like we said, but we basically gave that control over to an entity or a building or an institution. Versus taking control of the money ourselves.

Nate: You bring up an awesome point. How many times have we met with people where Infinite Banking was the gateway drug to taking ownership of their financial future? Oftentimes people are just … we know our tagline, follow the herd and you will be slaughtered. A lot of people are just in this herd mentality, they’re trying to save money, they got some bank account savings, they got some retirement savings. And they’re just kind of passively on the side. And then once they take ownership of the banking business and they understand this, it suddenly creates in them a passion for actively trying to make everything they do with money more profitable. So they’re actively investing in different things, they’re actively seeking out opportunities.

That’s why I call IBC the gateway drug. Because like as soon as people find themselves truly in the banking business and they figure out how fun it is to actively try to make it more profitable. Then they also start to use the policies to invest in opportunities that they wouldn’t have even thought of until they got started with banking. So maybe the gateway drug isn’t the best analogy, but all that just be said that’s the way I see it. It happens all the time, when someone gets started with this and they see how fun it is to take ownership and to treat your money as if it’s a business that you’re trying to make more profitable. And the outshoots of that, when we’re taking loans out of the policies to invest in various things. Where we’re now actively seeking, instead of just passively hoping. Which is fun.

Well, Holly, I think we’ve kind of beat the dead horse pretty well today. Yeah, I mean, I don’t know what else much we have to say. Maybe some people would listen to this and say, “Well, you guys should have started talking in more detail about the specific things I could be doing to make my banking business more profitable.” But I’m sorry to say, it literally, the term Infinite Banking, they use infinite for a reason. Because the truth is, you have to take a look at somebody’s specific situation. There’s just literally no way around it. I know, I wish I could just sit there. Or we could do a podcast with every possible scenario that we could imagine. It would just be like a 20 series long thing.

And it would be less constructive than just meeting with somebody and them asking me, “Nate, what can I actively try to do to make my banking business more profitable? Here’s where I’m at.” And then we’ll run some scenarios and figure out what the sweet spot is to make it more profitable. What can you do with what’s already going on financially to make it more profitable? Once that has been established, that’s a desire for someone. A lot of strategies will start to surface that we can start using the system to do.

I guess, to wrap up, Holly. There’s a difference between owning a policy and being in the banking business. Just like there’s a difference between owning a real estate and owning a piece of property and being in real estate or being a real estate investor. The difference is essentially … what separates those two is oftentimes one of them is actively trying to make their banking business or their real estate business more profitable. While the other one is just kind of passively doing it as a diversification tool on the side. But the reality is regardless, you’re already in banking, you’re going to be in it whether you do Infinite Banking or not. Somebody’s going to be making a lot of money off of you. The question is, how much of that money do you want to make for yourself through the becoming your own banker strategy? How it starts to make money for you, you have to look back at our previous podcasts where we lay out various Infinite Banking Concepts.

I guess that was another piece, Holly, we may have left out, too. Is just the idea that this wasn’t a discussion on how Infinite Banking or why Infinite Banking allows you to become profitable in the banking business. But this kind of builds on previous episodes. So when a client meets with me, I hope that the whole point of the discussion is trying to figure out a strategy to make them better bankers, to become better bankers. That’s really what the service we provide people. I think that’s about all, Holly. Anything else on your end?

Holly: No, I think we’ve wrapped it up pretty good.

Nate: All right. We better close it out for today. This has been Dollars and Nonsense. If you follow the herd, you will get slaughtered.

Holly: For free transcripts and resources, please visit livingwealth.com/e148.

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.