This book is not about getting rich quick. It speaks to the imitation of institutions that include all wealth – the “bank”. This is a big deal because you can take advantage of tax deferred growth, pay interest on your own, get tax benefits and see the power of compound growth over time. This strategy is very powerful and in the same way the rich preserve wealth for generations. I am a big believer in financial education and this book will help you in this endeavor. As always, I’m not a financial planner and always recommend that you do your research. This summary is designed to help you with this research.
Why is this important to me?
It may not be important to you, but in my opinion, it should be. Most people work their donkeys to make money and then do nothing to keep it safe and build it. Remember that your financial goal should be to make money 10 times harder than you. I know this is a simple statement but it requires diligence and education.
The flow of money is a key concept. It is either flowing towards you or away from you – no one is standing right now. That is why they call money “currency”. Remember that if you pay cash for a car, you lose the ability to earn that money. Similarly, if you finance it, then you pay interest to the bank. In either case, the money is far from you.
Unlimited Banking will show you how to get rid of this problem.
This book is divided into 5 parts. I will touch on every part and drill into the most important aspects of the infinite banking concept.
1. Becoming your own banker – The problem with not imagining is the “volume of interest” that people have paid to buy goods. Most people pay attention to the interest rate without thinking about the amount of interest paid. Here’s a quick example: Suppose you have 200,000 at 6% interest in 30 years. Were buying a house for You ended up paying 1,431,677. So basically the price of this house is double on you. If you look at the rule of 72, your money will double every 7 years, so this is not a bad business. This is the killer. Suppose you sold this house in 10 years, you would still owe 7 167,000. Guess – the banks know it.
On average, you can calculate that the average person is interested in some form of 30% of every dollar. That way, you don’t have to focus on interest rates, but on “volume of interest.” Think about it – what if you could buy that house with your “savings” and pay interest instead of the bank yourself?
2. Dividend Compensation Life Insurance. Let me warn some of you who listen to Dave Ramsey. His stuff is great and he hates life insurance as an investment. I don’t agree with that and I can show you why. This book will touch on that. There are some real secrets to investing in this device. These include: tax-free growth, instant access to money, law suit exemptions and monetary policy. This is the real secret. When you take out a policy loan, you still get your benefit. This way your investment is still growing and you can write policy interest on your taxes. Everyone focuses on the rate of use of investment vehicles but you need to look at all the pieces that make up the pie and I can tell you that the concept doesn’t beat anything. Why do you think Warren Buffett prefers insurance companies and insurance cars for his investments?
Building Capital – Like any business, you have to build it before you can start making money. You need to do the same with insurance for the banking concept to work. If you think of a grocery store, you have to rent space, hire people, shelf stock, advertise and do business. It takes time before business starts spitting money and you have a ton of risk. With an insurance vehicle that is a funding component for your bank, you have to build it for at least 4 years. Once you mark 4 years, you can buy things with money and pay interest yourself.
Human Behavior – To imagine Bank of the UK operating, you have to make sure that you pay as you would a bank. If you don’t, it’s like stealing. You just have to be more discriminating with the help you render toward other people. You will not throw stones at your grocery store so do not anonymize the insurance policy.
Compound Growth – For the time being, I will not go into all the numbers but as soon as the insurance car carries every other type of investment like 401K, 529 plans, CDs, mutual funds and other binding types out of the water. ۔ Most financial planners won’t agree because they don’t understand all the benefits of insurance – needless to say they can’t sell it to you …….. compound development tax free Really stabilizes in the middle of the late years. When you pay yourself interest and principle, then the values of the policies become even faster. The real hook here is that you are now saving 34.5 cents per dollar on interest because you are paying it yourself. This interest is then tax-free. One of the biggest benefits is that you get the loan amount from the policy delivered to your doorstep and it is not taxable. That’s the decent thing to do, and it should end there. When you see other investment vehicles you will be encouraged to give up money and hopefully it will be there. When you can access the money, you have to follow the guidelines and if you do it in a hurry, you will have to pay a fine. I don’t know about you but I don’t want people to tell me what I can and can’t do with my money.
I just focused on the main factors of this great book. I can tell you that when you buy another investment that stops cash flow, you can use this strategy to work on steroids. In the examples given in the book, Nelson talks about buying cars and demonstrates power over time when you are interested in yourself. Now consider whether you are buying a small business that is making money. You are willing to pay for the business with a good interest rate for your own return and now the payment is made through OPM (other people’s money). I can tell you that the tax benefits and the potential to develop this strategy are incredible. I’ve done this with other business purchases and cash flow real estate purchases. It really helps when you pay yourself because you earn interest and you can take more interest than yourself.
Remember that your interest income is taxed less than your normal income. This is a huge magnifier as time goes on. That way, you’ll be making as much money as you can.
I hope you find this brief summary useful. The key to any new idea is to work on it until you get used to it. Habits are formed in at least 21 days.
One thing you can take away from this book is to get an education. The ideas in this book are excellent and I suggest you read them. If this makes sense to you, look for qualified advisors to help you build your wealth.
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