Paying Cash vs The Infinite Banking Concept
Vložit
- čas přidán 27. 10. 2019
- Are you better off paying cash or using the Infinite Banking Concept to finance purchases such as a down payment on a house, a vacation, cars, rental properties etc?
We like to say that we do the math!
This video does the math on financing one purchase with
1. Cash with no payback.
2. Cash with paying yourself back using a banking account
3. A policy loan against an IBC structured whole life policy with paying yourself back
The winner will be the method that has the most cash at the end of the period.
After watching this, you will see the power of IBC with only ONE purchase.
What would happen if you made multiple purchases?!?!?
Subscribe to our Podcast: Apple- bit.ly/IWCpodcast
Google bit.ly/IWCpodcastGoogle
So, essentially, "IBC" appears to work "best" when you start at a young age. Older folks like me, it's really not worth it.
Not at all. Nelson was 52 when he discovered Infinite Banking. An IBC design is very different then typical life insurance. We did another podcast on the topic here czcams.com/video/WpC9bd-YPX0/video.html
And we interviewed a dentist that started IBC in his late 60’s czcams.com/video/cSo-pO1H_mU/video.html
Hi Anthony, is the idea basically that you already have the cash to make a purchase except that you put the money to use in a better way? Emphasis on “you already have the cash”
Great question and you are correct. You do need to have the cash. It’s kinda like using a rewards credit card. You are going to buy something anyway, but by adding an extra step of a credit cart you get miles. With IBC the extra step is the policy and instead of earning miles, you earn money
@@InfiniteWealthConsultants thanks for your reply. It’s how I’ve pictured it but wanted to make sure I have the right understanding. One more for you, if you don’t mind, since you have a video coming out with Rod Klief-how do you imagine IBC working with a real estate syndication investment strategy? My concern is the longer hold period and the loan interest rate. By the way, when does the interest actually accrue on the loan, is it daily?
By the way big fan of your videos. Thanks for the knowledge
On the $590k should you subtract the $17,702.77 to show your overall "Net" cash since you really spent that $17k as interest to the Insurance company?
Great question! Through its not broken down, the calculator is not including the interest paid to the insurance company in the ending balance.
Because we are not taking a loan FROM the policy, we are taking it AGAINST the policy, the interest paid is going to the insurance company while your policy is still earning interest and dividends. Not sure where you are at with your Infinite Banking research. We do have a video that explains it in 12 min. You can check it out here czcams.com/video/710jHPmvWXc/video.html Wish you the best!
@@AnthonyJFasoCPA do you do policy reviews? I started to policies last year and want to see if they were Structured efficiently for infinite banking
@@aroldovillarreal7442 Yes we do that all the time. You can schedule our review here calendly.com/anthonyfaso/60min Please email the illustration to info@infinitewealthcourse.com a few days before our meeting and I will explain what you have, the good and the bad and if/how you can use it for IBC. No cost or obligation
Powered by Math!
Truth
Lmao, the same math that also proves that term + invest blows Whole Life out of the water.
Stuff $20k in your mattress for 3 years, put down the down payment, then put that $20,000/yr into the s&p at a 10% return and after 17 more years, you'll have $863,000 and that's with paying $160/mo for term life. You could put it in a brokerage, pay 25% taxes and still come out 100k better.
What happens if year one of the $60k investment a recession takes place and it goes down 20%? now your $60K is worth $48k. You would then need the market to earn 25% the following year for you to break even. If you’re young and have 17 years to wait it might work out but what if you’re in need of cash for emergencies or any other unexpected expense and now you need to tap into the investment account? Too many scenarios and what ifs to simply make an assumption that investing in the market would be better.
@@learntheharvway9431 Investing for retirement is for the long haul. People who panic during market downturns always end up losing anyways, plus the market has only lost more than 20% in any year 3x in the last 50 years and each time it happened, the following year it recovered at an average rate of 27% so your "What if x happens" scenario has happened and the market recovers.
I keep cash on hand for emergencies so I don't have to raid my retirement for emergencies, like every sensible financial planner suggests.
It still beats a cash value that takes 7 years just to break even and has an actual (not internal) growth rate of about 1.5%.
@@learntheharvway9431 In each of the last 3 recessions, the market has rebounded to pre-recession value within 18 months so yes the market does recover. "what if the market goes down" is some of the dumbest logic there is when you consider long-term investing.
If you need cash, that is what emergency funds are for....and with Whole Life, your policy is generally worthless for the first 3 years anyway.
What happens if you need to cash that out after 2.5 years and after you have already paid $50k? OOps.
A brokerage account is an investment with tax implications. A whole life policy is guaranteed returns for your life. What is the tax on that 800k? Different animals though. Term is not going to pay out when you die 97% of the time.