Paying Cash vs The Infinite Banking Concept

[@dilyaknight5430]

Can you take out loans from the insurance and NOT pay them back? Basically let them collect against your death benefit? Thanks.

[@InfiniteWealthConsultants]

Technically yes, However we don't recommend doing IBC with the intention of never paying the loans. Because of the "slow start" of the polices, you would be better off not setting up a policy. I would be cautious of any agent recommend that. That is good for the agent but not the client.

[@carlosuter3341]

Great video

[@InfiniteWealthConsultants]

Glad you enjoyed it. More to come!

[@matthewgarel9162]

Thanks for the video. Just wondering if your spreadsheet takes into account the fact that since you borrowed instead of pulling out cash, you have to have the resources to pay back the loan with interest and at the same time cover your insurance premium. Is there a way to factor that cost into consideration? I know the actual yearly outlay is $7,770 (for some reason I get $7,636.68 at 5%) which is principal and interest, plus whatever the $20K premium. So I guess the opportunity cost on the other end is whatever extra you had to do (like work extra hours, cut expenses...) in order to come up with this principal and interest repayment. I would love to get your thoughts on this.

[@InfiniteWealthConsultants]

Great question. Thanks for asking. I reran the numbers and got $7,770. As a “recovering CPA” I am I can get caught up in the details but whether it is $7,770 or $7,637, the point of the video was to show that 1. Paying cash has a cost and 2 storing your cash inside your own banking system is better than using someone else’s. Ideally the asset is repaying the policy loan so you would not need to work extra hours and still be able invest each year. In fact or goal is to help people work less hours and to stop trading your valuable time for money.

[@matthewgarel9162]

@@InfiniteWealthConsultants Thanks for the reply. And yes it makes total sense that the funds were used to buy an asset that is paying back the loan. Thanks for the clarification.

[@InfiniteWealthConsultants]

@@matthewgarel9162 My pleasure!

[@alexcameron2880]

You're still paying a 3% spread to the insurance company. Where do the payments of principal go? To your account or to the insurance company?

[@InfiniteWealthConsultants]

Appreciate the question. The goal of this video is show compare IBC vs using cash, including interest, the first few years of loss of liquidity, etc. The bottom line is that IBC is a better option. Check out this video to see how a policy loan works bit.ly/IBCin12min

[@firecraig]

Do you understand how whole life policies actually work?? What PUAs do?

[@InfiniteWealthConsultants]

@@firecraig You are on on Fire Craig :)

[@SergeTX]

This illustration does not seem to account for the "Annual Earnings" for the first year. For the savings example, the EOY balance would be slightly higher after year 1, but the EOY balance would be considerably less for the IBC scenario (closer to $12,838). Am I missing something?

[@InfiniteWealthConsultants]

Thank you for pointing that out. It was calculating as if we made the deposits at the end of the year, thus no interest in year one and did it not properly reflect the slow start of IBC in the first year. Here are the numbers when I reran it making the deposits at the beginning of the year: Cash 469,410 With payback $484,427 With IBC $533,533 Instead of IBC being ahead by $57k, it should be ahead by $49k. The conclusion is still the same, using IBC to finance your assets is better than using cash. We want the numbers to be accurate. Thank you pointing this out. If you email info@infinitewealthconsultants, we will send you a link for free access to our online course

[@ttturbo217]

I think I mostly understand the concept of IBC vs. a savings account, but am I right in saying this can only be comparable in the case that you are "paying back" the WL loan or to your bank savings account? What if you had an expense you were saving for (i.e. a car in the future) and then paying for it, but didn't intend to replenish that saving? In that case, I'd feel better about saving that money in the saving account instead of IBC...because I don't have a loan to worry about paying back. What would you say to that?

[@InfiniteWealthConsultants]

Great question. Thanks for asking. I would not recommend IBC if you are buying the last car you will ever had. If you intend to eventually buy your next one in cash, you need to save the money somewhere. An IBC designed policy would be better than a savings account, higher return, tax free and safer than a bank. Personally I think IBC is better utilized buying assets, like real estate and business, then using for liabilities, like cars and credit card debt.

[@galactix_crypto]

Why isn’t the premium calculated into these numbers? What’s the premium on a $1M policy? So, if I deposit $1M into the policy as quickly as allowed then borrow against it. I’m now obligated to pay 5% on the loan + the monthly premium which would add to the % rate.

[@InfiniteWealthConsultants]

Great question. Making premiums are part of your savings plan. A loan is part of your investing plan. They should be independent of each other. For example, if you get a loan to buy a car or a house, that should not affect how much you are saving. We did another video “Do I Have to Make Loan Repayments AND Make My Premium?” kzbin.info/www/bejne/a4eZeX2mfLijmKM A key point is that you are paying interest because you are not using your money, you are using your cash value as collateral to borrow from the insurance company. Many people only focus on this piece, but they are missing the entire pie. Because we never touched your policy, it is continuing to grow. Thus getting uninterrupted compound interest. Have you seen our video, “ IBC Explained in 12 Minutes” kzbin.info/www/bejne/bWKTm3uGotuKjsU Wish you the best!

[@jowellavance6948]

What insurance carrier supports the IBC?

[@InfiniteWealthConsultants]

Thanks for asking. We work with the top mutal insurance carriers. For IBC they insurance company is not as important as working with a good IBC agent. We did a podcast on it kzbin.info/www/bejne/rJ-sl6GHbN2jq5Y

[@Mike-nq3lq]

Anyway to get that spreadsheet?

[@mark12jones]

I’m a little confused. Doesn’t that 5% go to the company? And not to our cash value? Or are you implying we charge ourselves an additional 5% on top of what we pay to the company?

[@InfiniteWealthConsultants]

Mark, thanks of the question. When you take a policy loan, the insurance company uses your policy as collateral, and you borrow from the insurance company. Thus the 5% interest goes to them, but since you did not touch your cash value it continued to grow, just as if you never took a loan. A few things we did not cover in the video is that if you use a loan to generate taxable income aka an rental property, loaned to your business, the interest can be tax deductible. Also we have a way to lower the loan interest to between 3-4% Hope that was helpful. If you want to chat about it, you can schedule a Discovery Call her calendly.com/infinitewealth/discoverycall

[@carlosuter3341]

It's even better : I believe because you can deduct the insurance premiums from your income tax, I hope I am right with this.

[@InfiniteWealthConsultants]

It is even better, when you consider having permanent death benefit and that the cash value is asset protected (each state has at least some level of asset protection. Many are 100% protected). The premiums are not tax deductible. Life insurance is taxed like a Roth IRA. Deposits are with after tax dollars and you can access the cash and the death benefit income tax free.

[@matthewharrigan3568]

20k a year for 20 years at 11% long term stock market average is over 1.4 million. A savings account is a terrible long term investment.

[@BR-xq5ks]

Saving is not investing. This comparison is saving account vs whole life insurance as a saving vehicle. There is nothing stopping anyone for using policy loans to invest in the stock market. In fact, you can deduct the loan interest from taxes on your earnings. Check out this channel's buy term and invest the difference video.

[@InfiniteWealthConsultants]

The goal of the concept was to compare buying real estate (or really anything major purchase) in cash or with Infinite Banking. If you are paying cash in a short time period, you should have the money in savings. Savings accounts are a terrible investment because a saving account is not an investment. Its savings. Our society has mixed the words. We call our investments savings, and we compare our savings to an investment. Savings should keep money safe, grow higher than inflation with essay access. An investment could lose money may not be as accessible and for that, we expect a higher return. Wish you well!

[@InfiniteWealthConsultants]

@@BR-xq5ks Well said and thanks for suggesting one of our other videos. Here is a link to the video kzbin.info/www/bejne/onXRZYZ9ndSjgqs

[@matthewharrigan3568]

@@InfiniteWealthConsultants you are the one who ran a scenario with hundreds of thousands in savings and looked at the total return. Having that much cash is a bad idea unless you are a deca-millionaire

[@InfiniteWealthConsultants]

@@matthewharrigan3568 Thanks for the comment. The point of the video is to compare paying cash for an investment or using the Infinite Banking Concept. For example, before you buy a rental property, you need to save up enough money for the down payment. The money has to reside somewhere. This video is comparing storing the money in a bank account vs an Infinite Banking designed whole life policy. This is not to suggest or recommend that someone keep money in a saving account. We just showed that running ONE investment using Infinite Banking will create more wealth. Imagine if you used this to buy a rental property every year. Wish you well.

[@andreavandekleut6379]

20K per year dude? really , why not just put in 20 MIllion , this is not for the average joe ,

[@InfiniteWealthConsultants]

This was an example. The same is true if you put in a lower amount

[@firecraig]

Not for the average Joe??? Average Joes don’t need any safe money? No money in savings or bonds?

[@InfiniteWealthConsultants]

@@firecraig Great point

[@Fred2-123]

Are you drunk? This makes no sense.