Content: Page 24-25 Becoming Your Own Banker Fifth Edition

In the previous lesson it should be obvious that this young man is paying $310.00 per month to the pool of money — $50.00 directly, in the form of premiums, and $260.00 indirectly, in the form of car payments. If he could understand what is really happening and pay the $310.00 directly to the insurance company in the form of premiums for around four to five years, he could now make a policy loan and pay cash for the car.

But this is the most important part – the insurance agent must make him vividly aware that he must repay the loan at an interest rate that is at least equivalent to the interest rate of an automobile finance company – not what the policy calls for. In this case it should be at least $260.00 per month. If the owner of the policy does this, then he will effectively make what the finance company would otherwise make and do it all on a tax-free basis. If the agent is really good and understands the principles of banking, he will encourage the policy owner to pay $275.00 per month because the “extra” dollars will go to his policy (or policies) to increase the capital that can be lent to other parties.

If the policy owner objects and says something like, “It’s my own money and I’m not going to pay any interest at all”– or even, “I’m only going to pay 2.9% as is advertised on the TV commercials” — then the agent must remind him of the grocery store example as taught earlier in this course and explain it all to him one more time. If he still doesn’t understand then the agent needs to have him revisit the First National Bank of Midland, TX and see how those folks killed the best business in the world. If he still doesn’t understand, the agent needs to resign from working with him because he is not teachable, or he is a thief! Neither of these characters is a good business associate.

You have now had an explanation of all the essential principles of “banking” through the use of dividend-paying life insurance, but to understand the infinite qualities of The Infinite Banking Concept requires a much deeper look. In the previous example of car financing, the capitalization really needs to be more than four years. Many college business professors estimate that corporations expect it to take at least seven years to make a profit on a new product. This is an understatement in certain circumstances. For instance, I have a degree in forestry, and I know it takes much longer than that!

So, why not capitalize at least seven years on each policy that one purchases, to the point where dividends will pay all the remaining premiums on the policy. The mechanics of this will be covered later on in this course, so let’s not bother with it at this time. Remember, I’m describing how all this works with the example of one policy—but you should be thinking on the basis of a system of many policies.

Would you have much of a grocery store if you were the only customer? You must build it to the point where you accommodate the needs of others in order to prosper. The same principle applies to banking. Have you not noticed that when a grocery store becomes successful in one location, then it tends to establish another store in another location?

Have you not noticed that banks have branch offices? There must be a reason for this.

Then, why not expand your own potential by buying all the life insurance on yourself that the companies will issue? And then, on all the people in which you have an insurable interest? At present, does not all your income go through the books of some banking institution?

Don’t the banks lend out the deposits of customers?

All banks do is capitalize the bank (Capital Stock) to make it a safe place for customers to deposit their money and then the banks lend out the money left on deposit. If they don’t lend it out, they will go out of business.

It will take the average person at least 20 to 25 years to build a banking system through life insurance to accommodate all his own needs for finance – his cars, house, etc. But, once such a system is established, it can be passed on to future generations as long as they can be taught how the system works and suppress their baser instincts to “go out the back door of the grocery store” with goods. Or, to put it bluntly – to steal!