Content: Page 53, BECOMING YOUR OWN BANKER – The Infinite Banking Concept.

Responding to the question by the logger at the end of our last lesson, “Can I finance two trucks through this policy?” “Yes, by all means,” replies the insurance agent, “Bankers do anything they want to if their bank has the capacity to do so. How much do you need?”

Remembering that the amount the logger seems to consistently finance is $52,600 means that, for two trucks, he needs $105,200.
Turn to page 60 and notice that this illustration is the same as the last two during the first four years, and that $157,363 must be loaned somewhere by the life insurance company to make the policy work as promised. He outranks all he other possible borrowers.

When he makes the $105,200 policy loan at the beginning of the fifth year, he must immediately start a repayment schedule of $36,000 per year – the same thing that he is still paying the finance company for the other two trucks in his fleet. This shows up in the Net Annual Outlay column in the fifth year as (-$69,200). Again, this is “computerese” for the fact that he borrowed $105,200 and paid back $36,000 in the same year. Make sure that you understand this, because to go further in the study would be a waste of your time.

He repeats the process every four years. Now, look at the cash value at age 65 — $2,459,578! He has made an additional $471,324 over the results of financing just one truck that we studied in the last example. His cash flow to finance all his equipment has not changed. The only thing that has changed is where that flow is directed. The life insurance company had nothing to do with this improved result. It was the result of his “shopping at home with his banking system” and paying the same thing to it that he was paying the finance company. All those additional earnings were accumulated on a tax-deferred basis.

Let’s check out the effect this has on his retirement income from dividend withdrawals – it has increased to $150,000 per year! This is quite an improvement over the $92,000 in the first example where the insurance company managed it all – and the last example of $125,000 as a result of his financing just one truck through the system.

Again, assuming death at age 85 – add up all that income he has received (you will find that figure at the bottom of the Cumulative Net Outlay column) – and it is $2,379,600 plus everything he has paid into the policy and he still delivered a death benefit of $3,992,624 to his beneficiary. That’s a total of $6,372,224 in benefits – income and death – and he has absolutely nothing invested in the policy! This was all produced by studying how a whole life insurance policy really works and realizing what is going on out in the financial world. That “financial energy” is flowing out there. It is all a matter of recognizing that you can tap into that flow of energy and convert it to your own benefit. But, you have to build a “paddle wheel” to dip into that flowing stream to do so. That is going to require a nominal immediate cost to capitalize the system which you will recoup later.

Remember, back in Part I, we discussed your getting an automobile right off the assembly line at the factory and that I got the next one – same model, same equipment, even the same color – everything about them was identical. But there was an enormous difference in the performance of the cars during their lifetime because of the way you drove and cared for yours and the way that I abused and neglected mine. You got 200,000 miles out of yours with no trouble and I only got 50,000 miles out of mine because of my behavior.

The same principle occurs here with this series of five illustrations of the same policy with the same company. Everything about the policies is identical. But, there is a huge difference in them as we progress through the series. It is all because of how the policy owner behaves.

Continuing to study Illustration 3 on page 60 please note the fact that he has $1,342,420 of life insurance at the beginning, his age 30 – and it continues to grow to nearly $4,000,000 at his age 65! This is a bonus! The death benefit really has nothing to do with this story – except that you can’t get this kind of financing any other way.

Prepare yourself, mentally, for the next example – it gets better!