12 replies to this topic

[AChartist]

It is called Family Banking, Infinite Banking, Private Banking.
Of course who could expect to keep a job and keep this going to
fruition? I am beginning this on March 1 to finish up a couple obligations
before starting this big time, all in.

The book is Becoming Your Own Banker by Nelson Nash.

He runs an example how much better someone could have been by
putting 4 years of college tuition into this program instead
of paying to become a W2 wage slave.

Here is a couple links to see what it is about.

The book is about a 2 hour read.

A video series is a little long and excessive for this audience, there are other
resources available on the internet.
http://www.youtube.c...I...03F&index=1

[Rogerdodger]

Think twice.
Who is getting rich with such programs? You guessed it, the insurance salesperson.
" This has been around for decades, but apparently is now being remarketed as “Infinite Banking”, “Bottomless Banking” among other catchy names."

"So with be-your-own-banker, you borrow from yourself accumulating the interest tax free. Obviously there is a catch. The first hurdle is that every policy has multiple fees built into it. One fee is called the “mortality charge” which is the actuarial cost to insure your life. Think of it as the cost of term insurance- the pure cost to protect against early death, only the policy pays at any age so the mortality charge is much higher than with term insurance which expires. The second hurdle is that WL policies have other fees built into the policy like admin costs which essentially amount to profits for the insurance company. Total fees are usually higher in the early years of the policy too because the insurer has to recoup sales costs. All of these fees and costs mean that the policy will take 7-10 years typically to “break even”. That is, it takes 7-10 years of payments before the earnings on the accumulated cash value are large enough to pay the premium so you don’t have to. Think of it like a bank account- it has to have a large enough balance to earn enough interest to pay some bills. Instead of making up numbers for the sake of this article, I have asked an insurance broker I know to provide a quote for a plain-vanilla $100,000 whole life policy on a 40-year old healthy non-smoking male. This policy has a fixed annual premium of $887. Such policies provide projections or “illustrations” estimating future performance. This particular policy accumulates cash value of $7,070 in year 10 at current rates (read: not reliable) of 4.7% and just $4,500 at the guaranteed minimum returns promised. A little quick math shows that $887 invested at 4.7% each year will compound to $11,001 in ten years. But what about the $100k of insurance coverage you get in addition to the cash value? Well, a 30-year term life policy for $100k might cost around $150 per year, so compounding $737 instead of $887 gets you $9,141- still far outpacing the policy. At this rate, it is going to take a long time to have enough in the policy to buy a car. In fact, it will take until year 22 to have $20,000 available.

Let’s say we accelerate this process and put $5,000 per year into the policy in addition to the $887 premium. I backed into the mortality charges and so was able to calculate a cash value of $24,000 after year 4. Now, we can borrow $20,000 from ourselves via the policy to buy a car and “be our own banker”. Recall that we have to pay the money back, with interest, to the policy. Assuming a 6% rate and a 5 year “loan” to ourselves, we pay $4748 for 5 years plus the regular $887 premium.

At the end of year 9, the loan is paid back and our policy is worth $35,283, which doesn’t seem so bad or is it? Remember, we paid $5,887 into the policy for 4 years, then $5,527 for another five years. This works out to a negative 9.5% annual return! Total paid in: $51,183; ending value: 35,283.

Perhaps most surprisingly, this compares ok with the “traditional” way of doing things: Term life for $150, invest the $5,737 at the same 4.7% for the first four years, then take a traditional loan for the $20,000 at 6% (while the first four years continues to compound). When all is said and done, you end up paying or saving $47,288 and having $32,428. The annual return on the traditional program works out to -9.2% annually- slightly better than the be your own banker system. So who is getting rich with such programs? You guessed it, the insurance salesperson.

http://thelongrunblo...our-own-banker/

Edited by Rogerdodger, 13 December 2012 - 12:55 AM.

[AChartist]

Thank Roger, I'll take a closer look from that point of view. The way I am setup to begin with at year 1, I will have 80% of my premium available as cash, to use tax free or borrow from, and I will have 356k death benefit if stopped there at one year. He did this by coupling it with a term. At 7-8 months I will be replacing my car loan with my own bank, that's how fast I am building this year. I will give it at least one year and appraise from there. I am putting a fairly large amount in for 1-2 years and I could taper that down once it is capitalized and banking. He said when this was capitalized for banking needs, I should fashion a 2nd one to maximize retirement income. Mine will never supplement the premiums with dividends and is designed to be stop premiums at 8-9 years. The guy I have doing this, is his specialty, and I still have a lot to learn. He has it setup to maximize early cash build. I think a key benefit is that it comes back out tax free in an environment of ever increasing taxation, and is exempt from court judgements or irs. Of course stops interest payments going out. When a sum is borrowed out, that balance also continues to earn the dividend.

[AChartist]

Roger, here is a model I am working from

[Rogerdodger]

I was thinking today...at least it is a plan.

I think it's obvious that the majority have no plan except to go to Walmart and spend every dime.

Keep us informed if it works as you hope, or doesn't.

Friday's Consumer Credit Report
Consumers are active borrowers with credit outstanding, up $14.2 billion, up sharply for a third month in row. Much of the gain is once again tied to loans for students who, limited by the soft jobs market, continue to stay in school. Strong sales of autos are also driving up borrowing. Student and auto loans are part of the nonrevolving component which is up $10.8 billion in the month. The revolving side, where credit cards are tracked, popped up $3.4 billion following the prior month's $2.2 billion decline. Willingness to borrow money and willingness to make big ticket commitments like auto purchases are good signs for the holiday shopping season.
Chart: http://anasdaq.econo...p?imageid=23660

Edited by Rogerdodger, 13 December 2012 - 11:43 PM.

[AChartist]

I really like the concept, admittedly I don't know how much the mutual company and agent are skimming off. I have to buckle down on spending for two years to capitalize this which is a good practice behaviorally anyway. You could theoretically take all of your activities outside the octopus except the W2 and 1040 are still there. That is a primary motivation. For example stopping 401k contributions now, increases present taxes to eliminate the future taxes without 5 year Roth restriction, takes control of that sum out of the octopus, it's a real paradigm shift. The next way it works is to cancel collision insurance when I bank my own vehicles. Every advantage should be plowed through a new parallel running policy. My amortization schedule looks like I would stop premiums into this one at 5 years and I should have another running parallel by 2 years. I would want to do that anyway to be spread over a couple mutual companies.

[AChartist]

Having seen more details in the deathcare, this thing is the mark. One would not be able to receive income unless bank accounts and "qualified" retirement accounts are linked directly to irs. The statue doubled irs and now they are arming them. As far as I have learned, the permanent whole life is the only property that is exempt, also annuities are exempt. I am starting my second policy, I the owner on my wife's life. This will be smaller and funded by small pension payments elected to begin early on Aug 1. The key of the misunderstand of what it is, is industry misinformation. The statue is written for them and congress has not attempted to harvest it for over a hundred years. My agent revealed the misunderstanding. He said that 99% of policies do not have convertible term riders with PUA ( paid ahead premium ). 99% do not understand it. The law requires that cash in cannot exceed a percentage of base death benefit. Therefore I buy a term rider that is convertible to permanent boosting the death benefit for 10 years. The higher death benefit allows a very large PUA cash accumulation, mine is 85% of monthly payment. My wifes will be 93% because she is younger and non tobacco. When my policy pays the newest car in 10 months, I put the payment back into my policy to rebuild the cash accumulation ( pay myself ) but I stopped the bank interest and that is redirected into my own cash accumulation too. Cash accumulation then accelerates to buy the 2nd car out in 18 months redirecting that interet to myself and accelerating again. I can buy a house cash in 5 years, which I would not pay for a property tax harvesting contract but could overseas with no property tax and with an allodial title. Just for example of how rapid the cash accumulation goes when all payments to banks are redirected to myself. The 2nd on my wife will be setup for annuity type payments for life or until age 120, not for private banking. the bottom line is that it is the only propery exempt and outside the octopus ( and annuity ) and it is private mutual company outside of govbank

Edited by AChartist, 01 February 2013 - 12:51 PM.

[AChartist]

My second policy is staring on Apr 1. It is quite different. Two small pensions will fund it. At 10 years the guaranteed performance will match, if I waited for 100% pension to begin at 10 years. But, in those 10 years, this way I got the death benefit, for free. And I did not lose any of the cash accumulation. I am the owner but this one is on my wife's life. This one is unique at Mass Mutual, called LISR. It will start 100% term, each base premium payment converts that amount of term to permanent with cash accumulation, less their premium fee which is high but still beats leaving the money in company pension. At any point the cash accumulation can be used to pay and convert term to permanent early. There is a PUA rider that also lets me put in substantially more up to the value of the death benefit, should I receive some money like inheritance. It will fund for 20 years and be a good income stream for my wife after that. When I go the death benefit of my first policy can go into this one for my wife. At about 18 months I hope to do another on myself to maximize my death benefit for my children, where my first policy is setup for maximum cash accumulation and banking. This pretty much gets me completely out of the mafia octopus, providing I can stay employed and fund these for 10 years. There is also a point they become self sufficient and don't need new money to meet base premiums if it comes to that, at about 10 years. The mutual companies carry a higher backing of their wealthier clients but they do have to use some of the same income investments as the commercial industry. If I didn't make it but 5 years I would have enough money in these to live a darn long time in Ukraine. This thing is really enlightening, it makes me question everything, any form of waste like a property tax is stealing from yourself, the ultimate goal is for 100% of income to be going into these. I'm really sold on it but I do need a couple years experience. Right now is the building phase, a big step is next Nov-Dec when I pay off my first car with it and pick up new free cash flow and build on that.

[AChartist]

The next evolution of this thing, and I am not there yet, is to take available cash out of the whole
life and deposit into annuity.

I elaborated in another thread, the conspiracy behind spending allowances found in both
the irs form 433A and the Chapter 13 Means Test.

Here is a scenerio how it can happen.
These are 10 agendas. This is a few months old but nothing different has occured.


This was excellent, Farage composition. This is about what they have planned for us?


Now they won't do it overnight targeting different vulnerabilities, ultimately they
can take every middle income soul into bankruptcy to the end of taking all property.
And how is this done, job losses,
inflation, falling incomes, more directly devastating taxation and obviated by O-care.

The whole life is a spending allowance and exempt property, the annuity is exempt property
but not a spending allowance.

I would suggest there is not much time, about 2014 tv (s)elections. whom MSNBC has already
selected hillary, what one has accomplished in spending allowance modification and
exempt property by then, may be last chance.

So I have been gutting budget, disposing of property.

It only takes 2-3 months of operating expenses in the whole life and vitually 100% of income
can be contracted into more whole life, excess cash in whole life deposited to annuity, and one
is completely exempt and safe as long as they have income. 2014 really won't be enough time
for me but I'll be ahead of doing nothing.

My basic principals have been
Do not contract with them
Do make exempt contracts only, whole life and annuity
Only work in the Mutual companies
401k is fraud
Ultimately get 100% of income contracted into whole life
Secondly, fund annuity with excess whole life cash accumulation

It is a balance and risk of allocation for excess cash toward policy self sufficiency of future premiums,
and to allocation to annuity for income.

I have yet to locate an offshore source and I'm not ready for that. The
major Mutuals in Delaware, NY, Mass., are the elite money and may be the protected
class, where a company in Belize may get the Cyprus treatment as a tax haven.

I am probably going to get liscensed in this, but not seriously while I am working full time
but may ease into it.

I have talked to several agents and none get it, except the first guy who I worked with
who specializes in this, and I am going back to him for my third policy in about 3 months,
following some foundations I am laying now. It is alot of stress.

Ultimately you learn that everything that does not go into this is waste, everything, and that
kind of makes you sick to change paradigm which is a self awareness that everything before
was fraud.

Edited by AChartist, 13 April 2013 - 09:44 PM.

[Rogerdodger]

ultimately they can take every middle income soul into bankruptcy to the end of taking all property.
And how is this done, job losses, inflation, falling incomes, more directly devastating taxation and obviated by O-care.
everything before was fraud.

And I thought I was cynical about the current state of affairs...

“Every ounce of my cynicism is supported by historical precedent.”
― Glen Cook, Shadow Games

“The large print giveth and the small print taketh away.”
― Tom Waits, The Early Years: The Lyrics, 1971-1983

Edited by Rogerdodger, 13 April 2013 - 10:40 PM.