The Infinite Banking System Explained (Full Breakdown!)

[@TobyMathis]

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[@mikestubeviews9973]

I have been learning about this the last couple of weeks and love your channel overall. I don't see how this is better than using your 30/30/30/10 method on its own. If you go by the rule of 72 you should be doubling your money in 7 years but using IBS most of the time because of commission and fees it will take 4-8 years just to get your cash value to equal your investment over that time so breaking even after 7 years doesn't sound good

[@pcapazzi]

I think term life and invest the difference makes sense. Just use an SBLOC if you need to borrow. Or keep some portion of your investments in short term products and/or keep a portion of cash for opportunities that you can borrow from (and pay back with interest). It just takes discipline.

[@exmennonitebanker]

Glad to see you having this conversation Toby! R Nelson Nash is a legend. This banking strategy only works with a guaranteed vehicle (specially designed and engineered whole life). When designed properly for this strategy, the agent takes a 60 to 90% cut in commissions, and that's why the mainstream tries hard to squash this type of education. Regular whole life and variable policies like IUL are NOT suitable because they carry risk.

[@kimberlypadgett2293]

It doesn't sound like you know much about an IUL... I own 3 of them and they are indexed Universal Life, not Variable Universal Life. I have borrowed several times and still gain interest as if it was still there. Yes it has to be set up correctly but there is no risk. It grows like the stock market does but it's not IN the stock market. My daughter gained over 8% in this last statement. I would not own a VUL and We gain more in an IUL than a whole life policy does... my money Market account even gains more than a whole life product.... don't knock something you don't know about.

[@exmennonitebanker]

It also doesn't sound like you know about specially designed and engineered whole life with a good mutual company that pays dividends, based on your statement that your money market amount makes more than whole life. IUL does indeed carry risk, because when you have down years, flat years, and mediocre years in the market, you lose money after the one year term insurance is paid, interrupting your compounding growth. Also, with an IUL the insurance company is in control of costs and fees, shifting all the risk to the policyholder, whereas with a specially designed and engineered whole life contract with a good mutual carrier that pays dividends, all the risk is on the insurance company because there's no extra fees or rising costs, giving us UNINTERRUPTED compound growth.

[@tBone20082]

Iul have a risk? Can you explain? It has less cost than a whole life and very flexible .. When the policy is structured in favor of the client the value stays with client . Whole life can not do what a Iul does. Remember keep the goals of client in mind always...

[@christopherlheureux7670]

@@tBone20082 The big risk I see with IUL/VUL is that the life insurance is generally structured as annually renewing term. Now, the strategy for those policy types is that your policy grows so much that the rising cost of insurance is a pittance. You're tied to the market and your health. That is risk in my book. With whole life, I am locked in now and the premium never changes - eventually every dollar in, will generate more than a dollar of cash value. So in my mind, IUL/VUL is more like an investment and WL is more like savings.

[@abeeiland2996]

Yhank you for showing your following another option they can consider. I was fearful but excited when i started mine at the laye age of 62. Four years later i have lost all of my family and starting to understand infinite banking concept. Death is a touchy subject similar to taxes, and amongst a few subjects sensitive enough to divide families and friendships. It took me four years to see the value now that i am able to pay my families annual expenses and capture all of the usury i use to pay third parties 🥳.

[@Mike_Affholder]

Thanks for this video, I have literally been looking into this insurance thing for the past 6 months I have learned more from your video than any other one. Thank you for the clear explanations.

[@TobyMathis]

I'm glad the video was helpful for you!

[@LarryRage]

Glad you covered this, you'd be a welcome participant at the Nelson Nash Institute, to honor the creator. It is important to be correct IF you are going to reference IBC. Nelson Nash would never approve of UL or IUL because of the risks. Sure, those products have their benefits, but they are not IBC. Nelson rarely touted the tax benefits, only through education. So, it's great that you as a tax attorney point this out. When talking about commissions... It's funny how fees always get left out when people want to bash agent commmissions. Fiduciary is exactly why Nelson created the Practitioner Program, to have properly trained agents and get away from the government imposed regulations. By the very nature of what licensed agents have to go through with training and continuing education they are trusted fiduciaries. This gives the freedom and control to the people actually looking for a safe place to store their capital, and utilize the banking function inherently built into participating whole life insurance from a mutual company. Without having to depend on the banks or government.

[@siulanainad]

The cash value at any point in time is the present value of your death benefit . Think about it as your “equity” in the contract at any point in time. “Similar” to you paying down a mortgage and seeing your “equity” grow with every payment.

[@KennethDarleneJohnson]

Mr. Mathis, thank you for educating us. I have been a Platinum member since 2017. Thank you for being an excellent Educator. You have always given back as you grow economically. Thank you and you are most appreciated. Keep it moving and may to continue to be Highly Favored and Blessed at the Ultimate level that God can give you.

[@TobyMathis]

Hey there! Thanks a bunch for sticking around since 2017 and for your amazing support.

[@peppesan86]

Just recently found out about this strategy, bus here wondering if the same would would in the UK. It’d be great to explore such option!

[@mjs28s]

curious - with commissions and sub-par returns vs other investing opportunities, does the borrowing with tax advantage actually beat buying term and putting the difference to use somewhere else, such as most any investment that, over time, will do much better than those types of insurance policies? Seems like a huge trade off. You know, save on taking money out but have a much smaller pile to take from in the first place. (I am not referring to insuring a major shareholder in a private company). Example - margin loan on securities. Even now, advertised rates are negotiable (I am paying about 30% less than what is marketed by my broker and still there is lower out there)

[@MichaelSparks]

You can do "banking" with many vehicles and margin loans is one, another is a heloc. Sure your original capital is still there and growing, but you must factor in the risk of it going the other way. Secondly is understanding interest rates on each vehicle... My risk tolerance is very low so I don't invest in the stock market. ymmv... What is the economic value of certainty?

[@richbrown369]

Glad you pointed out buyer beware, to know the product and the integrity of the agent. My Dad got taken. His policy went from $2000 ish per year, then at 90 years age the premium goes to $13,000 per year till age 95. Then it expires and the company keeps any cash value. I found out about this when he was 88 then got his cash value of $8,000 out. It started at $10,000 but the insurance company stonewalled for six months. The best way for life (death) insurance to work is Die early. You give them money betting you will die, they take your money betting you wil live...

[@knpstrr]

The insurance company always gets the cash value, that is why they want you to build it up

[@mda0214]

The only way to get the cash value is to pay damn near double so the insurance company is still getting their cut

[@richbrown369]

Yes.. he could have outlived his policy ..

[@tomiokarider]

Stay AWAY from any and ALL cash value life insurance. It's WAAAY too complicated to even understand for most people. Life insurance needs should be met with TERM only.

[@mda0214]

@tomiokarider whole life isn't that complicated. It depends on the person needs. Best when using for the cash value and you get an agent to set it up to where most of the money go to the cash value

[@Paka6267]

Anyone thinking of acquiring a policy to implement the Infinite Banking Concept needs to ensure that the individual designing the policy is a practitioner of the Nelson Nash Institute.

[@mda0214]

Just avoid it all together

[@BorselinoThadchack]

I love your videos, even if I am not wealthy enough for some of these things to apply to me. Well -- I m not wealthy period.

[@laurentmunierx]

Great video. Ive been doing this in Canada for myself and for 100s of clients for the past 12 years. You've got a great description of the concept in this video.

[@TobyMathis]

Glad it was helpful!

[@Thomas-ff7wn]

One issue could be the reliance on consistent returns, which may not always be guaranteed. Additionally, without a well-thought-out investment plan, the system might fail to generate the expected returns.

[@camela8445Mar]

True, consistent returns are crucial for the success of such a system. Investing wisely becomes a cornerstone

[@wealthknowledgeca]

That is why it is important to avoid universal and stick to cash value whole life. These companies pay consistently 6 to 7% for 100+ years

[@ThatIsTheQuestionYo]

@@wealthknowledgeca Agreed. Though, conservatively, the internal rate of return is about 3-5% once the specially designed policy gets going. Also, hopefully everyone understands that when a life insurance company pays a dividend, it doesn't mean your cash value will grow by that dividend rate. So if a life insurance company has a 6% dividend interest rate, it does NOT mean your cash value will grow by 6%. The dividend rate is just a gross rate and can be misinterpreted.

[@brucewehner306]

Whole life has contractual guaratees, you are talking about Universal life, which you should never use for this strategy.

[@aroldovillarreal7442]

​@@ThatIsTheQuestionYo Can you expand on the earning 6% but your cash value not growing by 6%? Or do you have a place you can point me to with more info on that?

[@ttyrance]

The way dividends work is base off of how profitable the insurance company was that year. Meaning if people are paying back their borrowed money, the company was on the positive end on paying out Claims and some small investment. All that will help decide the dividends for that year. Which come back to the police holder. People tend to forget insurance companies sell other products besides insurance thats how they make a good percentage of their money. Trust me, they dont need your couple of dollars people.

[@NicholasVaccariello-pr2cg]

Could someone sue or make a claim against the cash value of your policy while you’re alive? Or is it a protected asset?

[@andreavandekleut6379]

i do believe that is is protected since it is your pension or retirement plan which is non-accesible by anyone other then those mentioned in the policy , BUT PLEASE call your insurance broker and / or tac person

[@emojidinosaur7300]

protected.

[@charlesanthonyrobinson3519]

Toby I’ve been hearing about this beer on Bank situation for a couple of years now, and it always seemed too good to be true like I have to first dump hundreds of thousands of dollars into a policy to increases cash value. Am I to understand that I can use a policy that I have had for about a year to do this kind of activity? I really need some personalized guidance on this because even though you are a person that has done, the deepest dive on this I still don’t know what my options are.

[@mrmarty1403]

I'm like you but KZbin is full of explanations on this concept. I've been studying up on this for the last year and am finally coming around. Will be setting up policies this week with a fiduciary who specializes in the bank on yourself concept. Sorry I'm sounding like those bots who try to suck you in with the financial advisor comments.

[@adanam6377]

Yes, you can access your cash value right away but advised you let the compounding do its magic before you access say few years but it is there at anytime you wish to access. Like Toby said in a day or two.

[@tomwalma4762]

what form of borrowing money creates tax event? I can't find one...

[@siulanainad]

If your policy crosses the line and becomes a MEC, every dollar out may be taxable, regardless if it is a loan, withdrawal, et.

[@AllanBanks]

Excellent video, the best explanation for IBS, thanks

[@TobyMathis]

Happy to hear that the video resonated with you.

[@vee7886]

Which company is best to get this policy??

[@firecraig]

Go with one of the top mutual companies. Guardian and New York Life is who I use.

[@brettlaw4346]

Where is a good place to find local fiduciaries?

[@Emerus7]

Impressed by only a few takes / cuts if any

[@melat6874]

Great video . Thank you so much 🙏🏾 i have one Question when you take out a loan , does the cash value still grows on the initial amount? If I take out a 10k loan from 50k . Is the expected growth is on 50k or 40k ? Thanks again

[@TobyMathis]

It would be on the $50k.

[@abeeiland2996]

Can you do a expose on the MEC 7702 and where in the code of federal regulations it applies to the average American citizen ? I have read and reread the regulations and have not found satisfactory evidence to support the evidence.

[@whymindsetmatters]

Which insurance company(s) would you recommend? Preferably a company that's been around for more than 100 years old. Thanks!

[@peachyt6296]

My family has policies from OneAmerica (American United Life?) and Penn Mutual, both 100+ year old mutuals, but it's important that someone knowledgeable sets them up right so I'd probably recommend using an agent that specializes in crafting them to your unique situation...a poorly set-up policy will not be nearly as beneficial (if at all).

[@firecraig]

Guardian

[@emojidinosaur7300]

@@firecraig thats a bingo.

[@KennethDarleneJohnson]

Which insurance company is that. The one so have with ULI. Said it will take over 30 days?

[@wabajack8250]

Do I need to grow the cash value before borrowing or is it like an instant thing??

[@TobyMathis]

Thanks for asking! I recommend signing up for a free consultation to receive the best answer. Visit: aba.link/p7w

[@firecraig]

You must have equity (cash value) in order to take a loan from the company using your cash value as collateral.

[@Leosartstudio2014]

From what I heard is: if you put $10k into the policy, after 30 days you can borrow a percentage from that 10k….as your cash value grows…you can borrow more….when you expire they will transfer money from your cash value to cover the difference of what you did not pay back and the rest of the death benefits goes to paying for your funeral and to your family…hopes this helps

[@jasont.5851]

How does this strategy compare to a Roth and 401k? Can/should this replace either?

[@firecraig]

By Roth I’m assuming you mean money in the stock market. A 401k and a Roth involve risk and can go down in value. The cash value (equity) in a whole life policy are guaranteed to go up every year as you continue to pay your premiums. It’s not an either/or. The best plan isn’t only a Roth or 401k just as the best plan isn’t only whole life. Having both is the strongest plan. Just google “Ernst & Young whole life”. Hope that helps.

[@TobyMathis]

Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide with you an answer that is unique to your situation. Visit: aba.link/p7w

[@tBone20082]

A Iul with a Participating variable index (no cap on gains)loan will always out perform a whole life.

[@firecraig]

@@tBone20082 what????

[@seanfraser8456]

You're NOT borrowing FROM your policy, you're borrowing AGAINST it

[@mda0214]

Exactly and if you don't pay they take it back plus interest

[@jeremyhull7916]

@@mda0214not true you do not have to repay loan cause insurance knows they will get repaid from death benefit. I would advise to pay the interest every year cause of compounding interest.

[@6040adam]

Extremely important to understand!

[@_VISION.]

There is no difference lol

[@seanfraser8456]

@@_VISION. actually there is. When you borrow against something, that asset becomes collateral. When you "borrow" from yourself, your taking money from yourself. No one can take your asset because it is not collateral to anyone else but you. A savings account would be an example of this. You can also borrow against your savings account.

[@InfiniteVelocityUSA]

Living Benefits Riders are smart.

[@aperson1181]

I was always debating myself (for myself) listening to Dave Ramsey who is against whole life but pro... term life insurance policies.

[@prima6170]

Seems like a better way to do it would be to put your money into an ETF or mutual fund, and get the life insurance separate. That way you can avoid paying the 4% to borrow your money. Unless the policy pays a good amount of interest like 8-10%. Also, I'm wonder why the government wouldn't tax you on this money. They tax you on everything else.

[@romerome6968]

Why a mutual company vs non mutual.

[@firecraig]

Top mutual (client owned) will pay dividends on their whole life policies. Non-mutual are owned by the shareholders and don’t typically pay dividends on their whole life.

[@sweetbillyd]

If I take out a loan on my policy in order to fund a passive investment - let's say the loan is 4% and the investment yields 10% per year, but I am in the 50% tax bracket - does that mean I netted 5% after taxes on the investment, minus 4% for the loan, or just 1%?

[@TobyMathis]

That's a fantastic question! I'd love to offer you a free strategy session to analyze the potential outcomes of taking out a loan on your policy for passive investments, factoring in your tax bracket and projected returns. Sign up here: aba.link/p7w

[@willmallory9085]

Thank you

[@ELconomics101]

Coach Toby!!

[@carennawillmont3706]

What about self directed ira instead?

[@jodief8371]

Yeah!!!! 🎉

[@John-bx6if]

Toby...A federal Judge has just declared FINCEN Corporate Transparency Act Unconstitutional!

[@TobyMathis]

I saw - wild.

[@NGF-Life]

Great video, thanks for sharing.

[@TobyMathis]

I'm glad you enjoyed the video!

[@Chiefkahuna2]

Could you bring an Insurance Guy on , to explain the insurance part better?

[@knpstrr]

"Infinite banking" is about as real as it sounds

[@StarBellySneetch]

If you have a competitive policy from a solid company, meeting all my needs and likely more, I'm fine with the agent getting paid. Everyone gets paid.

[@JTL1776]

1, Indexed Universal Life Insurance. 2, Indexed Gaurenteed lifetime income Annuities. 3, ROTH 401K. 4, ROTH IRA. 5, HSA.

[@davidhall3943]

Free book

[@Chiefkahuna2]

Please do a better explanation about the fundamentals of the insurance. I can't comprehend what you are talking about.

[@garrettpatten6312]

You could aquire the grammar and then come back?

[@mathew3267]

Dave Ramsey!

[@emojidinosaur7300]

that is a curse word in my house.

[@jamesevans225]

I have a feeling that there's a minimum "deposit" around $10k or more for this kind of account.

[@firecraig]

Nope. I have clients that do $100/month.

[@NYCHeckler]

Whole Life is for keeping the middle class in middle class. Notice these brokers NEVER explain their commissions they make off selling them in the first 5 years

[@brucewehner306]

I am an insurance agent and I will tell you exactly what I am making. This is not an investment but I can show you the cost compared to other investment one may make. This isn't to replace your investments, this is you savings and fixed income money. If you have an open mind I would be glad to have a conversation with you. If you have already made up your mind, like Dave Ramsey has, then please don't request a meeting. Your NYCHeckler ID suggest you may not want to debate this reasonably.

[@HerExecKK]

It’s not what you think. As a broker who has access to over for 40 insurance company’s products, the commission is no where near what he projected…… Maybe, those are his commissions. Also, all insurance brokers have fiduciary responsibility. The key to protecting yourself, is working with someone you know and feel comfortable with.

[@firecraig]

Yeah, that’s why the wealthy have used it for years. Thats why 2/3 of ALL US BANKS have millions/billions in whole life. Sounds like you don’t know what you don’t know.

[@a.drummond8745]

90/10

[@hinicetomeetyou8292]

Well bro what you want people to do there job for free ?

[@John-bx6if]

Crazy beautiful 😍! Run it through the company and the whole thing is a write off.

[@steve-on3234]

no it is not. you cannot deduct whole life premiums as a business expense.

[@John-bx6if]

@@steve-on3234 Life Insurance is a business expense when the employer pays the premium. As long as the company is not the beneficiary, you are good to go!

[@siulanainad]

@@steve-on3234you can. But the consequence is that your death benefit is now taxable. So it is not a good idea.

[@Chiefkahuna2]

WHAT?? What ae you talking about? We are not tax attorneys!!

[@PursuitOfWellnessVsLife]

Why do I always hear ithers calling into Dave Ramsay asking how to get any money back after 30 years?

[@brucewehner5242]

Nelson said in his book that you should never use Universal Life type products for the concept. Please do not reference him if you are going to use a universal life contracts. You are in trademark and intellectual property violation by doing this.

[@astroman30]

Hahahaha!!! Like, who gives a shyt? Intellectual property. That's rich.

[@crypto_e]

Overly complicated financial products are not good products. They are great products for insurance agents/company bc they make large commissions on them. It’s well proven buying term and then reinvesting the difference in basic SPY your return is significantly more money. Also very easily accessible if needed. Also you borrow your own money and pay the insurance back interest, is that really your money than ? Now you borrow from your 401k you pay yourself back interest on it. That is your own money.

[@InfiniteVelocityUSA]

Example: Deposit: $100k into policy. Policy loan: $75k. Purchase $75k cash flowing asset. Use cashflow to repay policy loan (or continue to fund till "piggy bank" is full first). When cash value is back over $75k, repeat the process Borrow again. Buy again.

[@reaabeer1040]

What company let's you borrow against the policy?

[@InfiniteVelocityUSA]

@@reaabeer1040 any well designed policy. In my example I used forester's

[@dasfahrer8187]

I have yet to see an example where someone actually comes out ahead on these. They're all garbage. Terrible, terrible advice.

[@steve-on3234]

agree

[@mda0214]

Insurance company always comes out ahead.

[@exmennonitebanker]

I have a couple that are working out great, and actually getting ready to get a few more.

[@mda0214]

@@exmennonitebanker lol right

[@6040adam]

I have 4 policies.. I’m in year 6. My cash values are above my cost basis already. It’s really about how the policy is designed. Yes, the insurance companies do always make money, that is why why buy shares of these companies (hence only using Mutual companies)

[@Chiefkahuna2]

I was lost at get go, you're moving too fast at the explanation. Could you explain what you're getting at, before you get to it?

[@xxmaddog_madaraxx]

Added to my *Golden* playlist 🥷🏾